Frank v. Commissioner Social Security Administration, No. 6:2014cv01434 - Document 29 (D. Or. 2016)

Court Description: OPINION and ORDER - For the reasons stated, Frank's Motion for Approval of Attorney Fees Pursuant 42 U.S.C. § 406(b) 26 is GRANTED in PART, and the court finds McGinty is entitled to $18,378.19 in attorney fees. Because he was previo usly awarded $5,009.11 in fees under the EAJA, and $6,000 atthe administrative level, McGinty's award is offset by those amounts and he is therefore awarded $7,369.08. IT IS SO ORDERED. DATED this 9th day of November, 2016, by United States Magistrate Judge John V. Acosta. (peg)

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Frank v. Commissioner Social Security Administration Doc. 2 UNITED STATES DISTRICT COURT DISTRICT OF OREGON PORTLAN D DIVISION Case No. 6:14:-cv-14 34-AC SCOTT R. FRANK, OPINION AND ORDER Plaintiff, v. COMMISS IONER OF SOCIAL SECURITY , Defendant. ACOSTA, Magistrate Judge: Introduction Before the court is Scott Frank's ("Frank") unopposed Motion for Approval of Attorney Fees Pursuant to 42 U.S.C. § 406(b) ("Section 406(b )"). AlthoughF rankis the claimant in this case, the real party in interest to this motion is his attorney, Richard McGinty ("McGinty"). The Commissioner does not oppose the motion, but merely acts in a manner similar to "a trnstee for the claimant[]. " Gisbrecht v. Page 1 - OPINION AND ORDER Dockets.Justia.com Barnhart, 535 U.S. 789, 798 (2002). Having reviewed the proceedin gs below and the amount offees sought, the comt concludes McGinty is entitled to fees under Section 406(b) in the amount of$ l 8,3 78.19. Procedural Background Frank filed an applicatio n for Disability Insurance Benefits ("Benefits") on Novembe r 14, 2011, alleging an onset date of Novemb er 11, 2011. His applicatio ns were denied initially and on reconsideration. On May 15, 2013, an Adminish·ative Law Judge ("ALJ") issued an opinion in which he found Frank not disabled and, therefore, not entitled to Benefits. That decision became the final decision of the Commiss ioner when the Appeals Council denied Frank's request for review. Frank sought review of the Commiss ioner's decision by filing a complain t in this court on Septembe r 4, 2014. Frank alleged the ALJ erred in five respects: (1) failing to find Frank meets or equals Listing 4.02; (2) en"Oneously discrediting Frank's testimony; (3) erroneously discrediting the lay witness testimony; (4) improperly evaluating his functional abilities underthe New York Heait Association's rating system; and (5) failing to incorporate all ofhis limitations into the RFC. On October 19, 2015, this comt issued an Opinion and Order finding the ALJ improperly rejected Frank's testimony and the lay witness evidence, and formulated an incomple te RFC (the "O&O"). Concluding that fmtherpro ceedings were required to reassess Frank's credibility, further develop the extent of his limitations, and procure guidance from a VE, the court reversed and remanded the ALJ's decision to the Agency. On January 7, 2016, the court granted the paities' stipulated motion for EAJA fees in the amount of$5,009 .1 l. OnNovem ber2, 2016, Fraulcfiled the instant motion for attorney fees in the amount of $27,026.7 5 under Section 406(b). The Commiss ioner does not oppose the motion. Page 2 - OPINION AND ORDER Discussion the The parties do not dispute Frank is the prevaili ng pmiy in this matter. Additionally, less, because Commis sioner does not challenge the amount McGinty requests as attorney fees. Nonethe the Commissioner does not have a direct stake in the allocation of Prank's attorney fees, the ensure the calculation of fees is reasonable to preventMcGinty from potentially receiving a court must windfall. See direct Gisbrecht, 535 U.S. at 798 n.6 ("We also note thatthe Commissioner of Social Security ... has no financial stake in the answer to the§ 406(b) question."). After entering a judgme nt in favor of a Social Security claiman t represen ted by counsel, a "may detennin e and allow as part ofits judgmen t a reasonable fee for such representation, coUli not in excess of such of25 percent of the total of the past-due benefits to which the claiman t is entitled by reason award is not judgme nt." 42 U.S.C. § 406(b)( l)(A) (2015). A "twenty -five percent continge nt-fee automat ic or even presume d; 'the statute does not create any presump tion in favor of the agreed upon Or. Dec. 23, amount ."' Dunnigan v. Astrue, No. CV 07-1645 -AC, 2009 WL 6067058 , at *7 (D. 2010). A 2009)(q uoting Gisbrecht, 535 U.S. at 807 n.17), adopted 2010 WL 1029809 (March 17, Section 406(b) fee award is paid from the claiman t's retroactive benefits, and an attorney receivin g such , at *7. an award may not seek any other compensation from the claimant. Dunnigan, 2009 WL 6067058 Accordingly, when a coUli approves both an EAJA fee and a Section 406(b) fee payment, the claiman t's t, 535 U.S. attorney must refund to the claiman t the mnount ofthe smaller ofthe two payments. Gisbrech at 796. I. Fee Agreement. Under the Suprem e CoUli's decision in Gisbrecht, the court first examine s the continge Page 3 - OPINIO N AND ORDER nt fee agreement to determine whe ther it is with in the statu executed a contingent-fee agreement, whic h prov y tory twenty-five perc ent cap. Fran k and Mc Gint ided ifMc Gint y obtained payment ofpast-due bene Fran k wou ld pay him up to twenty-five perc ent of fits, l of the past-due benefits awarded. (Mot. for Approva this ECF No. 26 ("Pl .'s Mot ."), Ex. 1.) The terms of Atto rney Fees Purs uant to 42 U.S. C. §406(b), agre eme nt are thus with in the statu te's limits. by coun sel does not exce ed the statu te's The next step is to conf irm that the fee requ ested ires evidence ofthe retro twenty-five percent ceiling. This determination requ ety Frank. McGinty provided a docu men t from the Soci entitled "Not ice of Awa rd," whic h deta ils the retro $27,026. 75 in reserve to pay any attorney fees awar active benefits to be paid to Security Adm inist ratio n (the "Administration") active bene fits due Fran k and states it has with held ded by the com1, whic h represents twenty-five perc ent the 2.) McG inty seeks the full amo unt with held by of the past due benefits. (Pl.' s Mot. Ex. 3, at in ng the fee agreement and the amo unt requested are Administration for attorney fees. After dete1mini accordance with the statutory limits, this court next turns to "its primary inquiry, the reasonableness of the *10. fee sought." Dunnigan, 2009 WL 6067 058, at IL Reas onab lene ss Factors. An order for an award of benefits should not be view to require afee award of twenty-five percent of a ed in isolation, nor can it be presumed always 2009 claimant's retroactive benefits award. Dunnigan, ys suppo11ed awar ding WL 6067058, at* 12. If obta ining bene fits alwa fees forth e max imum amo unt g rs and the trial cour ts' assig ned task of'"m akin prov ided for by statue, the othe r Gisbrecht facto ting ty of cont exts "' wou ld be unnecessary. Id. (quo reaso nabl enes s dete rmin ation s in a wide varie s twen ty-fi ve perc ent ofthe past Gisbrecht, 535 U.S. at 808). Here , McG inty seek Page 4 - OPIN ION AND ORD ER due benefits, the full amount of the statutory cap. Counsel bears the burden to establish the reasonableness of the requested fee. Gisbrecht, 535 U.S. at 807. While the court must acknowledge the "primacy oflawful attorney-client fee agreements," contingent fee agreements that fail to "yield reasonable results in pmticular cases"may be rejected. Id. at 793, 807. The court must ensure a disabled claimant is protected from surrendering retroactive disability benefits in a disproportionate paymentto counsel. Crawfordv. Astrue, 586 F.3d 1142, 1151 (9th Cir. 2009) (en bane) (citing Gisbrecht, 535 U.S. at 808). The four factors to be considered when evaluating the requested fee's reasonableness have been identified by the Ninth Circuit from the Gisbrecht analysis as: (I) the character ofthe representation, specifically, whether the representation was substandard; (2) the results the attorney achieved; (3) any delay attributable to the attorney seeking the fee; and (4) whether the benefits obtained were "not in proportion to the time spent on the case" and raise the specter the attorney would receive an unwmranted windfall. Crawford, 586F.3dat1151-53 (citations omitted). The Ninth Circuit, in Crffi1ford, also identified the risk inherent in contingency representation as an appropriate factor to consider in determining a Section 406(b) award. It focused the riskinquiiy, however, stating that: "the district comt should look atthe complexity and risk involved in the specific case at issue to determine how much risk the firm assumed in taking the case." 586 F.3d at 1153. A. The Character of Representation. Substandm·d performance by a legal representative may warrant a reduction in a Section 406(b) fee award. Crav.ford, 5 86 F.3d at 1151. The record in this case provides no basis for a reduction in the requested Section 406(b) fee dueto the character ofMcGinty' s representation. In fact, McGinty prevailed on three of his five arguments. Page 5 - OPINION AND ORDER B. Results Achieved. The cour t orde red a rema nd ofFr ank' s claim, whic h was the resu lt he aske d for in his briefing. not weig h agai nst McG inty 's requ ested award. This was the best resu lt avai lable , and thus does C. Undue Delays. A cour t may redu ce a Sect ion 406( b) awar d for delays in proc eedi ngs attributable to claim ant's ction is appropriate "so that the attorney counsel. Crawford, 5 86 F .3d at 1151. The redu from the accw nula tiono fben efits during the pend will not prof it 808 ency of the case in cour t." Gisbrecht, 535 U.S. at (cita tion omit ted). Here, Fran k requested a 42-day extension to file his thus allowing Fran k to file his open ing brie f on June brief on Aug ust 10, 2015, and Fran k chos e to not opening brief, whic h request the cow t granted nse 8, 2015. The Com miss ione r timely filed its respo ber file a reply brief. The cour t issue d its O&O on Octo nsio n of time , the time 19, 2015. Taki ng into acco unt Fran k's sing le exte exceeded the nonn al rang e for Social Security cases to reso lve this case did not est . Accordingly, a redu ction ofM cGin ty' s fee requ is unw arran ted unde r this factor. D. Proportionality. Finally, a distr ict cour t may redu ce a Sect ion 406( b) awar d if"be nefit s ... are not in prop ortio n at 1151 (citin g Gisbrecht, 535 U.S. at 808). The to the time spen t on the case ." Crm1ford, 586 F.3d Supreme Com t explained "[i]fthe benefits are large in comparison to the amo unt oftime counsel spen t on r." Gisbrecht, 535 U.S. at 808. the case, a dow nwa rd adju stme nt is ... in orde In this case, McG inty filed an elev en-p age brie McGintyidentified were com mon to Social Secu Page 6 - OPIN ION AND ORD ER f asse rting five error s by the ALJ. The errors nded rity cases. McGinty argued the case should be rema to the Commissioner for futtherproceedings, ested result and did not file a reply brief. He obtained the requ on beha lfofF rank , ultim ately leadi ng to an awar d ofret roac tive bene fits (bas ed on the amo unt with by the Adm inist ratio n for attorney fees) of appr oxim records confirm, he expe nded slightly more than held ately $108 , 107 .00. McG inty reports, and the time twenty-six hours representing Fran k in this matter. This range Judge Mosman found to be a "reasonable amou time expenditure is within the twenty-to-forty-hour oftime to spen d on a social security case that does nt m 'r, not pres ent parti cular difficulty." Harden v. Com 497 F. Supp . 2d 1214 , 1215 (D. Or. 2007 ). McG inty curre ntly seeks $27,026.75 in attorney court, whic h resu lts in an effec tivel y hour ly rate justi fied by the mini mal brief ing McG inty unde fees for his repre senta tion of Fran k befo re this 1 is not of$ l ,023.74. This hour ly rate is exce ssive and ,a rtook to obta in a posi tive resu lt for his client. Thus r this factor. redu ction of the requ ested fee is walTanted unde Here , the cour t finds anaw ardo f$18 ,378 .19, or o1tio walTanted under the circumstances, because it is prop 17 perc ento fFra nk's retro activ e benefits, is nal to the apparent effort expended in achieving tive hourly rate of $696 .14. This redu ction from the award. A 17 perc ent awar d resu lts in an effec McG inty' s requ ested 25 perc ent awar d represents approximately a one- third redu ction in the requ ested fees, which reduction the court finds commensurate with the commonplace nature ofthe arguments raise d brief. in brief ing, and the deci sion to not file a reply E. Risk. aym ent and the sign ifica nt delay in McG inty discu sses the subs tanti al risk of nonp paym ent is $606. 73, he apparently fails to employ the While McG inty avers that the hourly rate requested rate. (ECF No. 27, at 2.) corre ct deno mina tor in calcu latin g his hour ly 1 Page 7 - OPIN ION AND ORD ER undertaken by Social Security practitioners. He does not, however, describe any risks unique to this case, which is the risk factor the Ninth Circuit in Crawford made clear the district cmnts are to consider. Thus, the court rejects McGinty' s argument that he should receive a higher fee award here to compensate him for the other cases in which he receives no award, because his argument is contrary to Crav.ford 's directive. Turning to the risk specific to this case, the comt finds thatthis case presented a risk no greater than that presented by the great majority of Social Security cases in this district. Thus, some reduction of the requested fee is wananted. An award of 17 percent of Frank's retroactive benefits adequately compensates McGinty for the ordinary risk undertaken in this case. Having considered all of the reasonableness factors, the comt therefore finds an award of $18,378.19 is wananted under the circumstances of this case. Conclusion For the reasons stated, Frank's Motion for Approval of Attorney Fees Pursuant 42 U.S.C. § 406(b) (ECFNo. in PART, and the comtfinds McGinty is entitled to $18,378.19 in attorney fees. Because he was previously awarded $5,009. I I in fees under the EAJ A, and $6,000 at the administrative level, Mc Ginty' s award is offset by those amounts and he is therefore awarded $7,369.08. IT IS SO ORDERED. DATED this 9·"'-1ray of November, 2016. 0 d States Magistrate Judge Page 8 - OPINION AND ORDER

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