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SEAMON v. COLVIN, 03:10-cv-06421-HU. (2013)

Court: District Court, D. Oregon Number: infdco20140107b19 Visitors: 4
Filed: Dec. 09, 2013
Latest Update: Dec. 09, 2013
Summary: FINDINGS AND RECOMMENDATION DENNIS J. HUBEL, Magistrate Judge. Currently before the Court is Plaintiff Michael Seamon's ("Plaintiff") unopposed motion for attorneys' fees pursuant to 42 U.S.C. 406(b). The fee requested is $4,580.50, which Plaintiff's counsel represents to be "25% of Plaintiff retroactive benefits, less $5,912, a sum that was paid to Mark Manning, one of the attorneys of record for Plaintiff, under 42 U.S.C. 406(a) for his services to Plaintiff in the administrative proceed
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FINDINGS AND RECOMMENDATION

DENNIS J. HUBEL, Magistrate Judge.

Currently before the Court is Plaintiff Michael Seamon's ("Plaintiff") unopposed motion for attorneys' fees pursuant to 42 U.S.C. § 406(b). The fee requested is $4,580.50, which Plaintiff's counsel represents to be "25% of Plaintiff retroactive benefits, less $5,912, a sum that was paid to Mark Manning, one of the attorneys of record for Plaintiff, under 42 U.S.C. § 406(a) for his services to Plaintiff in the administrative proceeding." (Pl.'s Mot. at 1.) Based on the factors established in Gisbrecht v. Barnhart, 535 U.S. 789 (2002), and explained in Crawford v. Astrue, 586 F.3d 1142 (9th Cir. 2009) (en banc), Plaintiff's motion (Docket No. 24) for § 406(b) fees should be granted.

I. BACKGROUND

Plaintiff filed this action on December 20, 2010, seeking judicial review of the Commissioner of Social Security's ("Commissioner") denial of his applications for disability insurance benefits ("DIB") and supplemental security income ("SSI") benefits under Titles II and XVI of the Social Security Act. In his opening brief, filed on December 7, 2011, Plaintiff asserted four grounds upon which the Administrative Law Judge's ("ALJ") decision should be reversed: (1) the ALJ erred by failing to develop the record regarding Plaintiff's cognitive and mental limitations; (2) the ALJ erred by failing to find that Plaintiff's cerebral palsy condition met or equaled the criteria of Listing 11.07; (3) the ALJ failed to give clear and convincing reasons for rejecting Plaintiff's testimony; and (4) the Commissioner did not meet his burden of proving that Plaintiff retains the ability to perform "other work" in the national economy.

On March 1, 2012, the parties, acting through their respective counsel, stipulated that this case be reversed and remanded to the Commissioner for further administrative proceedings before an ALJ, a de novo hearing, and new decision. On remand, the ALJ was directed to (1) retrieve, include as an exhibit, and evaluate the missing 1995 report by Dr. David Starr, wherein Dr. Starr found Plaintiff suffered from a learning disability; and (2) order a new neuropsychological consultative examination. Based on the stipulation of the parties, on March 5, 2012, Judge Hernandez entered an Order and Judgment of Remand pursuant to sentence four of 42 U.S.C. § 405(g).

On October 16, 2012, Judge Hernandez adopted this Court's Findings and Recommendation, wherein it recommended granting Plaintiff's stipulated motion for attorney's fees under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412. About one year later, on October 9, 2013, after receiving a favorable decision upon reconsideration, Plaintiff filed his motion for § 406(b) fees, which is presently before the Court. Although Plaintiff was awarded $3,475.86 in EAJA fees in October 2012, the award "was garnished to pay Plaintiff's debt to the government and therefore will not be subtracted" from counsel's motion for § 406(b) fees. (Pl.'s Mot. at 1-2.)

II. LEGAL STANDARD

A. The Statute

In Social Security cases, attorney fee awards are governed by § 406(b), which provides in pertinent part:

(1)(A) 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[.]

42 U.S.C. § 406(b)(1)(A).

B. Controlling Precedent

Gisbrecht concerned fees awarded under § 406(b). Gisbrecht, 535 U.S. at 792. Specifically, the Supreme Court addressed the question, which sharply divided the Federal Courts of Appeals: "What is the appropriate starting point for judicial determinations of a reasonable fee [under § 406(b)] for representation before the court?" Id.

For the purposes of the opinion, the Supreme Court consolidated three separate actions where the District Court, based on Circuit precedent, declined to give effect to the attorneyclient fee arrangement. Id. at 797. Instead, the District Court employed a lodestar method whereby the number of hours reasonably devoted to each case was multiplied by a reasonable hourly fee. Id. at 797-98. The Gisbrecht court concluded that § 406(b) requires a court to review the contingent-fee arrangement, to assure they yield reasonable results. Id. at 807. Congress provided one boundary line: contingent-fee agreements are unenforceable if they exceed 25% of past-due benefits. Id. Within that 25% boundary, however, "the attorney for the successful claimant must show that the fee sought is reasonable for the services rendered." Id.

Courts are instructed to first test the contingent-fee agreement for reasonableness. Id. at 808. An award of § 406(b) fees can be appropriately reduced based on (1) the character of the representation; (2) the results achieved; (3) when representation is substandard; (4) if the attorney is responsible for delay; and

(5) if the benefits are large in comparison to the amount of time counsel spent on the case. Id. The claimant's attorney may be required to submit a record of hours spent representing the claimant and a statement of the lawyer's normal hourly billing charge for noncontingent-fee cases in order to aid the court's assessment of reasonableness. Id. Lastly, the Gisbrecht court added that "[j]udges of our district courts are accustomed to making reasonableness determinations in a wide variety of contexts, and their assessments in such matters, in the event of an appeal, ordinarily qualify for highly respectful review." Id.

In Crawford, the Ninth Circuit reviewed three consolidated appeals and determined that, in each case, the district court failed to comply with Gisbrecht's mandate. Crawford, 586 F.3d at 1144. In each of the three cases, the claimant signed a written contingent-fee agreement whereby the attorney would be paid 25% of any past-due benefits awarded. The Crawford court noted that contingency-fee agreements, which provide for fees of 25% of pastdue benefits, are the norm for Social Security practitioners. Id. at 1147. However, since the Social Security Administration ("SSA") "has no direct interest in how much of the award goes to counsel and how much to the disabled person, the district court has an affirmative duty to assure the reasonableness of the fee is established." Id. at 1149. Performance of that duty begins by asking whether the amount of the fee agreement need be reduced. Id.

At the outset, the attorneys requested fees representing 13.94%, 15.12% and 16.95% of past-due benefits, id. at 1145-47, because they felt "the full 25% fee provided for by their fee agreements would be unreasonable." Id. at 1150 n.8. If the attorneys had received the 25% fee provided for by their agreements, they would have been awarded fees ranging from $19,010.25 to $43,055.75. Id. at 1150. Even so, the district courts still reduced the contracted fees by between 53.7% and 73.30%, which produced fees that represented 6.68% to 11.61% of the past-due benefits. Id. All three decisions were reversed because they relied on lodestar calculations and rejected the primacy of lawful attorney-client fee agreements. Id. That is to say, the district courts erroneously began with a lodestar calculation by comparing the lodestar fee to the requested fee award. Id. As the Ninth Circuit recognized:

In Crawford, for example, the district court awarded 6.68% of the past-due benefits. From the lodestar point of view, this was a premium of 40% over the lodestar. . . . But from the contingent-fee point of view, 6.68% of past-due benefits was over 73% less than the contracted fee and over 60% less than the [already] discounted fee the attorney requested. Had the district court started with the contingent-fee agreement, ending with a 6.68% fee would be a striking reduction from the parties' fee agreement. This difference underscores the practical importance of starting with the contingent-fee agreement and not just viewing it as an enhancement.

Id. at 1150-51.1.

III. DISCUSSION

A. The Fee Arrangement

Here, a contingent-fee agreement exists between Plaintiff and his attorney, which states: "My attorney and I agree that if SSA favorably decides the claim, I will pay my attorney a fee equal to 25% of the past-due benefits resulting from my claim or [the maximum amount recoverable under § 406(a)], whichever is less." (Pl.'s Mem. Supp., Ex. C at 1.) By its terms, the contingent-fee agreement is within the statutory limits.

The next inquiry is whether the fee sought exceeds § 406(b)'s 25% ceiling, which requires evidence of total past-due benefits. Dunnigan v. Astrue, No CV 07-1645-AC, 2009 WL 6067058, at *9 (D. Or. Dec. 23, 2009). According to the SSA's Notice of Award, Plaintiff received $41,970 in past-due benefits and the SSA withheld 25% ($10,492.50) to cover potential attorneys' fees under § 406(b). Plaintiff's counsel only seeks $4,580.50 in fees, which represents the difference between 25% of past-due benefits awarded ($10,492.50) and the amount awarded to Mark Manning under § 406(a) ($5,912).

B. The Reasonableness of the Fee Sought

Since the statutory ceiling has not been exceeded, the Court turns now to my primary inquiry, the reasonableness of the fee sought.

1. Character of Representation

Substandard performance by a legal representative warrants a reduction in a § 406(b) fee award, as Gisbrecht and Crawford make clear. See Gisbrecht, 535 U.S. at 808; Crawford, 586 F.3d at 1151. Examples of substandard representation include poor preparation for hearings, failing to meet briefing deadlines, submitting documents to the court that are void of legal citations, and overbilling one's clients. Dunnigan, 2009 WL 6067058, at *11 (citing Lewis v. Sec'y of Health and Human Servs., 707 F.2d 246, 250-51 (6th Cir. 1983)).

The record in this case provides no basis for a reduction in the requested § 406(b) fee due to the character of counsel's representation.

2. The Results Achieved

With respect to the results achieved, the Court's assessment should focus on whether counsel's efforts made a meaningful and material contribution. Dunnigan, 2009 WL 6067058, at *11 (citation omitted). In this case, counsel made a meaningful and material contribution to their client in this case. Indeed, counsel's opening brief clearly persuaded the Commissioner that remand was necessary in this case, and upon remand, Plaintiff was awarded past-due benefits.

3. Delay Attributable to the Attorney

The Court may reduce a § 406(b) fee for delays in the proceedings attributable to the claimant's attorney. Crawford, 586 F.3d at 1151. The Gisbrecht court observed that a reduction on this ground is appropriate if the requesting attorney inappropriately caused delay in proceedings, so that the attorney "will not profit from the accumulation of benefits" while the case is pending. Gisbrecht, 535 U.S. at 808.

No reduction is warranted under this factor. Plaintiff's counsel acted diligently throughout this proceeding.

4. Proportionality of the Fee Request to the Time Expended

The Court may reduce a § 406(b) fee "for . . . benefits that are not in proportion to the time spent on the case." Crawford, 586 F.3d at 1151 (citation omitted). Courts may look to counsel's record of hours spent and a statement of normal hourly billing in order to make such a determination. Id.

According to Plaintiff's counsel, 19.25 hours were reasonably expended on the merits of this case, which results in an effectively hourly rate of $545 ($4,580.50 plus $5,912 in fees under § 406(a), divided by 19.25) if the requested fee was approved. A much lower hourly rate of $237.95 is produced when the requested § 406(b) of $4,580.50 is divided by 19.25 hours. "There is some consensus among the district courts that 20-40 hours is a reasonable amount of time to spend on a Social Security case that does not present particular difficulty." Harden v. Comm'r Soc. Sec. Admin., 497 F.Supp.2d 1214, 1215 (D. Or. 2007). Because Plaintiff's fee request is not excessively large in relation to the benefits received, and because Plaintiff's expended a reasonable amount of time on this proceeding, no reduction is warranted under this factor.

IV. CONCLUSION

For the reasons stated, Plaintiff's unopposed motion (Docket No. 24) for fees under § 406(b) should be granted. Plaintiff's counsel should be awarded $4,580.50 in § 406(b) fees.

V. SCHEDULING ORDER

The Findings and Recommendation will be referred to a district judge. Objections, if any, are due January 2, 2014. If no objections are filed, then the Findings and Recommendation will go under advisement on that date. If objections are filed, then a response is due January 21, 2014. When the response is due or filed, whichever date is earlier, the Findings and Recommendation will go under advisement.

FootNotes


1. The attorneys in Washingtonand Trejo were dealt a 23% and 47% reduction, respectively. Id. at 1151 n.9.
Source:  Leagle

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