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Brown v. Astrue

United States District Court, Ninth Circuit

May 23, 2013

JACK BROWN, Plaintiff,
MICHAEL J. ASTRUE, Commissioner of Social Security, Defendant.


JOHN V. ACOSTA, Magistrate Judge.

Claimant Jack Brown ("Brown") moves for attorney fees pursuant to 42 U.S.C. § 406(b), which permits a court to award attorney fees to the attorney of a successful Social Security claimant, so long as such award is "a reasonable fee for such representation" and "not in excess of 25 percent of the total of the past-due benefits to which the claimant is entitled...." 42 U.S.C. § 406(b)(1)(A). Although Brown is the claimant in this case, the real party in interest to this motion is his attorney Merrill Schneider ("Schneider"), and the Commissioner does not oppose the motion, but merely acts in a manner similar to "a trustee for the claimant[]." Gisbrecht v. Barnhart, 535 U.S. 789, 798 (2002). Having reviewed the proceedings below and the amount of fees sought, the court concludes that Schneider is entitled to fees under section 406(b) in the amount sought.

Procedural Background

Brown filed for Disability Insurance Benefits and Supplemental Security Income under Titles II and XVI of the Social Security Act, respectively. The Commissioner denied his claim initially and on reconsideration. Brown's claim was heard by an Administrative Law Judge ("ALJ") at an October 15, 2009, hearing. The ALJ found Brown not disabled. Brown requested review of this decision by the Appeals Council, which request was denied. Brown then sought review by this court.

In his opening brief, Brown raised four objections to the ALJ's decision. First, he argued that the ALJ erroneously rejected the opinions of an examining physician. The court agreed that the ALJ had committed reversible error in failing to give clear and convincing reasons to reject the examining physician's conclusions. Second, Brown argued that the ALJ improperly rejected his statements regarding the side effects of his medication. The court disagreed, finding that the ALJ did not err in excluding Brown's side-effect testimony due to his lack of compliance with the treatment recommendations of his physicians. Third, Brown argued that the ALJ failed to identify the transferrable skills that would permit him to adapt to the job set forth in Step Five. The court agreed with the Commissioner that, in light of Brown's age, the ALJ was not required to identify Brown's transferrable skills and, in any event, such failure would have been harmless. Fourth, Brown objected to the ALJ's treatment of the lay testimony of his father. The court found that the ALJ had erred by both giving probative weight to portions of the father's testimony, but ignoring other relevant portions without providing germane reasons for doing so. Finally, the court determined that in light of the ample record evidence, the testimony of the vocational expert and Brown's father, and the errors committed by the ALJ, there were no additional issues to resolve and the remand should be for an immediate award of benefits.


After entering a judgment in favor of a Social Security claimant who was represented by counsel, a court "may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of twenty-five 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). However, a "twenty-five percent contingent-fee award is not automatic or even presumed; the statute does not create any presumption in favor of the agreed upon amount.'" Dunnigan v. Astrue, Civil No. 07-1645-AC, 2009 WL 6067058, *7 (D. Or. Dec. 23, 2009) (quoting Gisbrecht, 535 U.S. at 807 n.17, adopted by, 2010 WL 1029809 (March 17, 2010)). A section 406(b) fee award is paid from claimant's retroactive benefits, and an attorney receiving such an award may not seek any other compensation from the claimant. Id. Accordingly, when a court approves both an EAJA fee and a section 406(b) fee payment, the claimant's attorney must refund to the claimant the amount of the smaller of the two payments. Gisbrecht, 535 U.S. at 796.

I. Fee Agreement

Under the Supreme Court's decision in Gisbrecht, the court first examines the contingent fee agreement to determine whether it is within the statutory twenty-five percent cap. Brown and Schneider executed a contingent-fee agreement, providing that if Schneider obtained payment of past-due benefits, Brown would pay him twenty-five percent of the past-due benefits awarded. See Motion for Attorney Fees (#22), Attachment 2. The terms of this agreement are thus within the statute's limits.

The next step is to confirm that the fee requested by counsel does not exceed the statute's twenty-five percent ceiling. This determination requires evidence of the retroactive benefits to be paid to the claimant. Schneider has included a document from the Society Security Administration entitled "Notice of Award, " which details the retroactive benefits due Brown and states that it has withheld $31, 360.50, which amounts to "25 percent of past due benefits in order to pay the approved lawyer's fee." (Motion for Attorney Fees (#22), Attachment 3 at 4.) Schneider currently seeks $16, 000 in fees under section 406(b). Thus, the requested award is within the statutory limit. After determining that the fee agreement and the amount requested are in accordance with the statutory limits, this court next turns to "its primary inquiry, the reasonableness of the fee sought." Dunnigan, 2009 WL 6067058, at *10.

II. Reasonableness Factors

An order for an award of benefits should not be viewed in isolation, nor can it be presumed always to require a fee award of twenty-five percent of a claimant's retroactive benefits award. Dunnigan, 2009 WL 6067058, at *12. If obtaining benefits always supported awarding fees for the maximum amount provided for by statue, the other Gisbrecht factors and the trial courts' assigned task of "making reasonableness determinations in a wide variety of contexts'" would be unnecessary. Id. (quoting Gisbrecht, 535 U.S. at 808). Here, Schneider seeks 17 percent of the past due benefits, less than the statutory cap of 25 percent.

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 of lawful attorney-client fee agreements, " contingent fee agreements that fail to "yield reasonable results in particular 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 payment to counsel. Crawford v. Astrue, 586 F.3d 1142, 1151 (9th Cir. 2009) ( en banc ) (citing Gisbrecht, 535 U.S. at 808). The four factors to be ...

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