Kathryn Tassinari, Brent Wells, Harder Wells Baron & Manning, PC, Eugene, OR, Attorneys for Plaintiff.
S. Amanda Marshall, United States Attorney, Adrian L. Brown, Assistant United States Attorney, Portland, OR, David Morado, Regional Chief Counsel, Seattle, Region X, L. Jamala Edwards, Special Assistant United States Attorney Office of the General Counsel, Seattle, WA, Attorneys for Defendant.
FINDINGS AND RECOMMENDATION
DENNIS J. HUBEL, Magistrate Judge.
The plaintiff Estelle Lynn Finney brought this action for judicial review of the Commissioner's decision denying her applications for disability insurance benefits under Title II of the Social Security Act, 42 U.S.C. § 1381 et seq., and Supplemental Security Income under Title XVI of the Act. In Findings and Recommendation entered July 8, 2011, I recommended that the Commissioner's decision be reversed, and the case be remanded for further proceedings. Dkt. #18. Neither party filed objections, and on August 1, 2011, Judge Malcolm F. Marsh accepted my recommendation and entered judgment for Finney. Dkt. ##20 & 21.
The parties stipulated to a fee payment under the Equal Access to Justice Act, 28 U.S.C. § 2412 (EAJA), in the amount of $4, 149.38. On November 14, 2011, Judge Marsh granted the motion, ordering payment to the plaintiff of EAJA fees in the amount of $4, 149.38. Dkt. #28.
The matter now is before the court on the plaintiff's unopposed motion for attorneys' fees pursuant to 42 U.S.C. § 406(b). Dkt. #29. Section 406(b) provides that an attorney who represents a successful claimant in a Social Security action may be awarded, as part of the judgment, "a reasonable fee... not in excess of 25 percent of the... past-due benefits' awarded to the claimant." Gisbrecht v. Barnhart, 535 U.S. 789, 795, 122 S.Ct. 1817, 1822, 152 L.Ed.2d 996 (2002) (quoting 42 U.S.C. § 406(b)(1)(A)). The attorney's fee "is payable out of, and not in addition to, the amount of [the] past-due benefits.'" Id. An attorney may receive fees under both EAJA and section 406(b), but the attorney must refund the amount of the smaller fee to the claimant. Id. (citation omitted). This ensures the claimant receives the largest possible award of benefits. Id.
The Gisbrecht Court observed that contingent fee contracts "are the most common fee arrangement between attorneys and Social Security claimants." Id., 535 U.S. at 800 , 122 S.Ct. at 1824 (citation omitted). To prevent an attorney from contracting for an unreasonably large fee, Congress enacted section 406(b) to limit the attorney's fee to 25 percent of the past-due benefits. Id., 535 U.S. at 805 , 122 S.Ct. at 1826-27 (discussing the legislative history behind section 406(b)). However, the statute does not mandate that an attorney receive 25 percent of the claimant's past-due benefits. Rather, "[w]ithin the 25 percent boundary, ... the attorney for the successful claimant must show that the fee sought is reasonable for the services rendered." Id., 535 U.S. at 807 , 122 S.Ct. at 1828. Thus, although the district court must look first to the contingent fee agreement between the attorney and the claimant, the court then must test the fee arrangement for reasonableness. Crawford v. Astrue, 586 F.3d 1142, 1149 (9th Cir. 2009) (citing Gisbrecht, 535 U.S. at 808, 122 S.Ct. at 1828).
The amount of the fee may be reduced "based on the character of the representation and the results the representative achieved." Gisbrecht, 535 U.S. at 808, 122 S.Ct. at 1828 (citations omitted). Thus, for example, a reduced fee would be in order "if the attorney provided substandard representation or engaged in dilatory conduct in order to increase the accrued amount of past-due benefits, or if the benefits are large in comparison to the amount of time counsel spent on the case.'" Crawford, 586 F.3d at 1148 (quoting Gisbrecht, supra ). The attorney ultimately "bears the burden of establishing that the fee sought is reasonable." Id.
Routine rubber-stamping of the statutory maximum allowable fee is disfavored in these cases. As the Fourth Circuit Court of Appeals observed over forty years ago,
[J]udges should constantly remind themselves that, while the lawyer is entitled to a reasonable compensation for the services rendered by him in the judicial proceeding, these benefits are provided for the support and maintenance of the claimant and his [or her] dependents and not for the enrichment of members of the bar. Routine approval of the statutory maximum allowable fee should be avoided in all cases. In a great majority of the cases, perhaps, a reasonable fee will be much less than the statutory maximum. The statute directs a determination and allowance of a reasonable fee and the courts are responsible under the [Social Security] Act for seeing that unreasonably large fees in these Social Security cases are not charged or collected by lawyers.
Redden v. Celebrezze, 370 F.2d 373, 376 (4th Cir. 1966)
In the present case, the fee agreement between the plaintiff and her counsel provides for a fee equal to 25 percent of past-due benefits. See Dkt. #30-3. Counsels' efforts resulted in an award of "approximately $47, 980 in total retroactive benefits, plus monthly benefits of at least $828 until she reaches her full retirement age or is no longer disabled." Dkt. #30, p. 1. Thus, the contracted-for attorney's fee would be $11, 995.00 - the amount sought in the present motion. After deduction/refund of the $4, 149.38 fee awarded under EAJA, the requested fee would result in an out-of-pocket amount for Finney of $7, 845.62.
The time records submitted with the plaintiff's motion indicate that attorney Kathryn Tassinari expended 23.55 hours in this case (17.05 hours in 2010; 6.50 hours in 2011). An expenditure of 23.55 hours falls within the twenty to forty hour range Judge Michael W. Mosman found to be a "reasonable amount of time to spend on a social security case that does not present particular difficulty." Harden v. Comm'r, 497 F.Supp.2d 1214, 1215 (D. Or. 2007) (noting "some consensus among the district courts" on this point; citing cases). Judge Mosman agreed that "[a]bsent unusual circumstances or complexity, ... this range provides an accurate framework for measuring whether the amount of time counsel spent is reasonable." Id. In the present case, the administrative record was 381 pages long. The plaintiff's opening brief was nineteen pages long, and raised four issues requiring analysis of the evidence and applicable law related to the ALJ's evaluation of the evidence. After review of the Commissioner's ten-page brief, the plaintiff filed a six-page reply. The attorneys' time records indicate the time expended by counsel in this case was reasonable, and the court so finds.
A fee of $11, 995 for 23.55 hours of work would result in an effective hourly rate of $509.34. Counsel states she "normally works on a contingent basis and thus does not have a normal hourly billing rate." Dkt. #30, p. 4. To demonstrate that the requested fee is reasonable, counsel refers to the "Oregon State Bar 2007 Economic Survey, " used by judges in this court as a benchmark in determining reasonable hourly rates for attorney fee awards. The survey reports that attorneys practicing in "other areas" of private practice in Portland bill at an average rate of $244.00 per hour. Counsel argues for an upward adjustment of the average hourly rate based on the risk of representing Social Security claimants, and the fact that although "Portland attorneys spend 15% of their time on contingency matters, " they "derive 17% of their income from such matters, " thereby "mak[ing] up in contingency-enhanced rates for the time they spend on contingency cases they lose (by a factor of 17/15)." Dkt. #3, p. 4. Counsel asserts, without citation to authority, that "[i]n Social Security court cases, there is only a 33.52% chance of winning benefits for the claimant." Id. She therefore applies "a contingency multiplier of 2.98 (100/33.52), " for purposes of offsetting the risk of non-payment. Id., p. 5. Applying the contingency multiplier of 2.98, and the contingency loss factor of 17/15, to the $244 ...