Opinion
Civ. No. 6:17-cv-01082-SU
04-22-2021
KIERA S., Plaintiff, v. COMMISSIONER OF SOCIAL SECURITY, Defendant.
FINDINGS & RECOMMENDATION
:
This case comes before the Court on Plaintiff's Motion for Attorney Fees. ECF No. 35. The Commissioner opposes the Motion. ECF No. 37. The Court has reviewed the record and the motion should be GRANTED.
LEGAL STANDARD
Upon entering judgment in favor of a Social Security claimant who was represented by an attorney, a court "may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of the total of the past-due benefits to which the claimant is entitled by reason of such judgment[.]" 42 U.S.C. § 406(b)(1)(A). Section 406(b) expressly requires any attorney's fee awarded under that section to be payable "out of, and not in addition to, the amount of such past due benefits." Id.
In Gisbrecht v. Barnhart, 535 U.S. 789 (2002), the Supreme Court clarified that § 406 "does not displace contingent-fee agreements as the primary means by which fees are set for successfully representing Social Security benefits claimants in court." Id. at 807. Courts must approve § 406(b) fee determinations by, first, determining whether a fee agreement has been executed and then testing it for reasonableness. Crawford v. Astrue, 586 F.3d 1142, 1149 (9th Cir. 2009) (en banc) (citing Gisbrecht, 535 U.S. at 808). "Agreements are unenforceable to the extent that they provide for fees exceeding 25 percent of the past-due benefits." Gisbrecht, 535 U.S. at 807. Even within the 25 percent boundary, however, "the attorney for the successful claimant must show that the fee sought is reasonable for the services rendered." Id.
DISCUSSION
Plaintiff in this case sought review of the decision of the Commissioner of Social Security denying benefits. On September 7, 2018, the case was remanded for further proceedings. ECF Nos. 14, 16, 17. On April 22, 2019, Plaintiff's application for fees pursuant to the Equal Access to Justice Act ("EAJA") was granted in part and Plaintiff's counsel was awarded EAJA fees in the amount of $10,262.37. ECF No. 28. On remand, Plaintiff was awarded past-due benefits totaling, for purposes of this motion, $109,081.00. Pl. Mot. 4 n.2. (explaining that the award letter, Pl. Mot. Ex. 1, reflects higher total past-due benefits than were used in calculating fees). Plaintiff seeks an award of $27,270.25, offset by the previously awarded EAJA fees.
The Commissioner does not object to the amount of fees requested but raises objections to the form of the proposed order. For the sake of clarity, the Court will address Plaintiff's Motion on its merits, before turning to the Commissioner's objections as to form.
I. Contingency Fee Agreement
Under Gisbrecht, the Court's first duty when considering whether to approve a contingency fee agreement is to determine whether it is within the statutory 25% cap. Gisbrecht, 535 U.S. at 807-08. The fee agreement between Plaintiff and Plaintiff's counsel contemplated a contingency fee award of up to 25%. Pl. Mot. Ex. 1, at 16. The total amount of fees sought is 25% of the past-due benefits awarded. On review, the Court concludes that both the fee agreement and the amount sought comply with the maximum allowed by statute.
II. Reasonableness
Next, the Court must determine whether application of the fee agreement yields reasonable results under the circumstances. Gisbrecht, 535 U.S. at 807-08. In making this determination, the Court must recognize the "primacy of lawful attorney-client fee agreements." Id. at 793. However, although a contingency agreement should be given significant weight in fixing a fee, the Court can depart from it if it produces unreasonable results. Id. at 808. The burden rests with Plaintiff's counsel to establish the requested fee's reasonableness. Id. at 807.
The Ninth Circuit has established four factors to guide the Court's inquiry into the reasonableness of a requested fee: (1) the character of the representation; (2) the results achieved; (3) any delay attributable to the attorney in seeking the fee; and (4) whether the benefits obtained were "not in proportion to the time spent on the case" and raise the possibility that the attorney would receive an unwarranted windfall. Crawford, 586 F.3d at 1151-53.
In this case, all four factors weigh in favor of granting Plaintiff's motion. Counsel ably represented Plaintiff and achieved a favorable result—remand and award of benefits—in a reasonably expeditious manner. The Court has reviewed the hours expended by Plaintiff counsel and concludes that the fee award is not disproportionate, even accounting for the hours previously eliminated during this Court's consideration of Plaintiff's EAJA application. ECF Nos. 21, 28. The Court finds no cause to reduce the requested fees and the full amount should be awarded.
III. The Commissioner's Objections
The Commissioner raises two objections, both of which concern the form of any order granting fees.
First, the Commissioner objects that the Court should not order an "award" of fees because 42 U.S.C. § 406(b)(1)(A) provides that a court may "determine and allow" fees as part of its judgment. This objection borders on frivolous—the Supreme Court itself has used "determine and allow" and "award" interchangeably in discussing fees under § 406:
"Whenever a court renders a judgment favorable to a claimant under this subchapter who was represented before the court by an attorney, the court may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of the total of the past-due benefits to which the claimant is entitled by reason of such judgment and the Commissioner of Social Security may . . . certify the amount of such fee for payment to such attorney out of, and not in addition to, the amount of such past-due benefits."Culbertson v. Berryhill, ___U.S.___, 139 S. Ct. 517, 520-21 (2019) (quoting 42 U.S.C. § 406(b)(1)(A), emphasis added).
At issue is whether § 406(b)'s 25% cap limits the aggregate fees awarded for representation before both the agency under § 406(a) and the court under § 406(b), or instead limits only the fee awarded for court representation under § 406(b).
In the same opinion, the Supreme Court later substitutes "award" in place of "determine and allow," when quoting the language of § 406(b)(1)(A): "Under § 406(b), when a court 'renders a judgment favorable to a claimant . . . who was represented before the court by an attorney,' the court may award 'a reasonable fee for such representation . . .'" Culbertson, 139 S. Ct. at 522 (emphasis added).
Furthermore, courts within this District have previously rejected the Commissioner's objections concerning the use of the word "award" in orders granting fees under § 406(b). See, e.g., Beyerlin v. Saul, Case No. 6:15-cv-1434-SI (D. Or. June 1, 2020) (Judge Simon, overruling the Commissioner's objection to the use of "award" and noting that "the Ninth Circuit uses, and has even mandated, such terms."). The Commissioner's objection to the use of the term "award" in the present case should likewise be rejected.
The Commissioner's second objection reflects a concern that the Court will order fees to be paid out of general social security funds. The Commissioner contends that the Court should not order the Commissioner to pay the attorney fees under § 406, citing the Commissioner's sovereign immunity and the discretionary nature of the Commissioner's withholding of past-due benefits to the pay the fee. The Commissioner argues that, if it does not withhold a sufficient portion of the past-due benefits, an order requiring payment would have to come from the agency's general fund.
As for language directing the Commissioner to pay the fee, social security regulations provide that fees allowed by a federal court are to be paid by the Commissioner to the claimant's attorney out of a claimant's past-due benefits. See 20 C.F.R. § 404.1730(a), (b) ("We will pay an attorney representative out of your past-due benefits . . ."). The Ninth Circuit has also mandated that district courts direct payment by the agency in fee award cases. See Crawford, 586 F.3d at 1153 ("We VACATE the district courts' orders and REMAND with instructions to order the SSA to pay the attorneys the fees they requested, less fees already paid under the EAJA, and to release the balance of the withheld past-due benefits to the claimants." (emphasis added)). Plaintiff's proposed order in this case goes no farther than these well-established precedents. The Commissioner's objections on this issue should be overruled.
As to the issue of a shortfall in withheld benefits, the Commissioner's concern is unfounded in the present case. Plaintiff has requested an award of fees in the amount of $27,270.25, offset by the previously awarded EAJA fees, for a total disbursement of $17,007.88. The Commissioner has withheld a total of $23,256.50 from Plaintiff's past-due benefits to pay attorney fees awarded pursuant to § 406(b). Pl. Mot. Ex. 1, at 3 (withholding $14,049.50); Pl. Mot. Ex. 1, at 9 (withholding $4,603.50); Pl. Mot. Ex. 1, at 13 (withholding $4,603.50). This sum is more than sufficient to satisfy Plaintiff's fee request and the Court should decline to engage speculation about what would be done in the event of a hypothetical shortfall.
CONCLUSION
For the reasons set forth above, the Plaintiff's motion for an award of attorney fees, ECF No. 35, should be GRANTED. Plaintiff's counsel should be awarded fees under 42 U.S.C. § 406(b) in the amount of $27,270.25. Previously, the Court awarded Plaintiff's attorney fees in the amount of $10,262.37 under the EAJA. When issuing the check for payment to Plaintiff's attorney, the Commissioner should be directed to subtract the amount awarded under the EAJA and send Plaintiff's attorney the balance of $17,007.88, less any applicable processing or user fees prescribed by statute. Payment of this award should be made via check payable and mailed to Plaintiff's attorney Ari Halpern, at 62910 OB Riley Rd., Ste. 100, Bend, OR 97703. Any amount withheld after all administrative and court attorney fees are paid should be released to Plaintiff.
SCHEDULING ORDER
The Findings and Recommendation will be referred to a district judge. Objections, if any, are due fourteen (14) days from service of the Findings and Recommendation. If no objections are filed, then the Findings and Recommendation will go under advisement on that date.
A party's failure to timely file objections to any of these findings will be considered a waiver of that party's right to de novo consideration of the factual issues addressed herein and will constitute a waiver of the party's right to review of the findings of fact in any order or judgment entered by a district judge. These Findings and Recommendation are not immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Rule 4(a)(1) of the Federal Rules of Appellate Procedure should not be filed until entry of judgment.
It is so ORDERED and DATED this 22nd day of April 2021.
/s/ Patricia Sullivan
PATRICIA SULLIVAN
United States Magistrate Judge