Smith v. Saul

United States District Court for the Southern District of California

Smith v. Saul

Trial Court Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 CHERYL S., Case No.: 3:19-cv-1692-AGS 11 Plaintiff, ORDER GRANTING MOTION FOR

42 U.S.C. § 406

(b) FEES (ECF 25) 12 v. 13 Kilolo KIJAKAZI, 14 Defendant. 15 16 Plaintiff’s counsel moves for attorney’s fees under

42 U.S.C. § 406

(b). Counsel 17 requests $15,000.00, offset by “an order to reimburse [plaintiff] the amount of $3,556.03 18 for EAJA fees previously paid.” (ECF 25, at 1.) This request represents nearly 25% of 19 plaintiff’s past due benefits, which total approximately $60,350. (Id. at 8.) After being 20 served with the motion, plaintiff has not filed any objection. (See ECF 25, at 23; ECF 27.) 21 “Whenever a court renders a judgment favorable to a claimant,” “the court may 22 determine and allow as part of its judgment a reasonable fee for such representation, not in 23 excess of 25 percent of the total of the past-due benefits . . . .”

42 U.S.C. § 406

(b). “In 24 contrast to fees awarded under fee-shifting provisions such as

42 U.S.C. § 1988

, the fee is 25 paid by the claimant out of the past-due benefits awarded; the losing party is not responsible 26 for payment.” Crawford v. Astrue,

586 F.3d 1142, 1147

(9th Cir. 2009) (en banc). In 27 evaluating an attorney-fee request, courts “must respect the primacy of lawful attorney- 28 client fee arrangements,” “looking first to the contingent-fee agreement, then testing for 1 reasonableness.”

Id. at 1148

(citation omitted). “Within the 25 percent boundary, . . . the 2 attorney for the successful claimant must show that the fee sought is reasonable for the 3 services rendered.” Gisbrecht v. Barnhart,

535 U.S. 789, 807

(2002). Factors the court may 4 consider in evaluating the reasonableness of the attorney-fee award are: “(1) the character 5 of the representation; (2) the results achieved; (3) whether the attorney engaged in dilatory 6 conduct; (4) whether the benefits are large in comparison to the amount of time counsel 7 spent on the case; and (5) the attorney’s record of hours worked and counsel’s regular 8 hourly billing charge for non-contingent cases.” Avina v. Saul, No. 18-CV-1728 W (MSB), 9

2021 WL 2662309

, at *1 (S.D. Cal. June 29, 2021). 10 Plaintiff assented in her contingency agreement to a fee of “25% of the past due 11 benefits awarded upon reversal of any unfavorable ALJ decision.” (ECF 25-1, at 1.) This 12 bargained-for percentage is presumptively valid and may be reduced only if warranted by 13 the character and results of the representation. See Gisbrecht, 535 U.S. at 807–08. Here, 14 counsel invested his resources on contingency, fully litigated cross-motions for summary 15 judgment, and achieved remand for his client. (See ECF 13, 18, 19.) On remand, plaintiff 16 secured a “partially favorable” decision. That is, plaintiff prevailed on her disability- 17 benefits claim, but her disability date was set in February 2019 rather than her asserted date 18 of May 2016. (See ECF 25-2, at 1, 5–6.) Even so, she was granted substantial past-due 19 disability benefits of over $60,000.1 (ECF 25, at 8.) There is no evidence of dilatory 20 conduct or undue delay. Indeed, counsel expended only 18.2 hours to achieve these results. 21 (See

id. at 6

.) The court in Patterson v. Apfel surveyed similar actions and found the average 22 time expended to be more than thirty hours.

99 F. Supp. 2d 1212

, 1214 n.2 (C.D. Cal. 23 2000). 24 25

26 27 1 As counsel notes, the Notice of Award omits plaintiff’s total past-due benefits, but it states that $15,087.28 was withheld to cover potential attorney fees of 25%. (ECF 25, 28 1 Counsel appears to have been so efficient, in fact, that the resulting effective hourly 2 rate of $979.052 may appear high. Yet given the substantial results achieved, this figure is 3 not outlandish compared to fees that courts have approved. See Sproul v. Astrue, No. 11- 4 CV-1000-IEG DHB,

2013 WL 394056

, at *2 (S.D. Cal. Jan. 30, 2013) (finding the 5 “seemingly exorbitant de facto hourly rate of just under $800 per hour” reasonable and 6 “but a by-product of counsel’s efficiency in prosecuting the case”); Hearn v. Barnhart, 7

262 F. Supp. 2d 1033, 1037

(N.D. Cal. 2003) (collecting cases, twenty years ago, that 8 approved fees between roughly $200 and $700 an hour); Palos v. Colvin, No. CV 15- 9 04261-DTB,

2016 WL 5110243

, at *2 (C.D. Cal. 2016) (finding an effective hourly rate 10 of $1,546.39 reasonable for an attorney-fee award of $15,000 in a similar case). 11 When a valid attorney-client fee arrangement exists, the fee statute is not meant to 12 displace that agreement, but to act as a check on the reasonableness of fees. See Gisbrecht, 13

535 U.S. at 793

. And in the time since Gisbrecht, “district courts generally have been 14 deferential to the terms of contingency fee contracts in § 406(b) cases, accepting that the 15 resulting de facto hourly rates may exceed those for non[-]contingency-fee arrangements.” 16 Hearn,

262 F. Supp. 2d at 1037

. Given the substantial results counsel achieved here—after 17 fully litigating cross-motions for summary judgment—and the lack of any opposition to 18 this fee motion, the Court sees no ground for penalizing plaintiff’s counsel for his 19 efficiency. 20 Counsel’s request for fees under

42 U.S.C. § 406

(b) is GRANTED. Counsel is 21 entitled to $15,000.00 out of plaintiff’s past-due benefits. Counsel must reimburse plaintiff 22 the $3,556.03 EAJA fees already paid. (See ECF 23); see also Gisbrecht,

535 U.S. at 796

23 24 25 26 2 Of the 18.2 hours, 3.4 were expended by paralegals, reasonably billed at $150 per 27 hour. Subtracting the $510 in paralegal billing from $15,000 leaves $14,490; and $14,490 divided by the 14.8 attorney hours yields an effective hourly rate of $979.05. (See ECF 25, 28 1 (noting that, when section 406(b) fees are awarded, “the claimant’s attorney must refund 2 || to the claimant the amount of the smaller [EAJA] fee’’). 3 Dated: January 5, 2023

5 Hon. Andrew G. Schopler United States Magistrate Judge 6 7 8 9 10 1] 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Reference

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