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Barrera v. Commissioner, Social Security Administration

United States District Court, D. Oregon

June 7, 2018

JUAN M. BARRERA, Plaintiff,
v.
COMMISSIONER, SOCIAL SECURITY ADMINISTRATION[1], Defendant.

          FINDINGS & RECOMMENDATION

          MARK D. CLARKE UNITED STATES MAGISTRATE JUDGE

         This matter comes before the Court on Plaintiffs Motion for Attorney's Fees. Plaintiff seeks an award of $58, 266.00 in attorney's fees pursuant to 42 U.S.C. § 406(b). The Commissioner does not object to an award of fees, but argues that the requested amount would constitute a disproportionate windfall for Plaintiffs counsel and urges the Court to award a reduced amount of $32, 700.00. For the reasons discussed below, Plaintiffs Motion should be GRANTED IN PART.

         PROCEDURAL BACKGROUND

         On September 11, 2012, Plaintiff filed a complaint seeking review of the final decision of the Commissioner. ECF No. 1. On November 8, 2013, this Court recommended that the Commissioner's decision be reversed and remanded for further proceedings. ECF No. 19. The recommendation was adopted by Senior District Judge Owen M. Panner on December 13, 2013. ECF Nos. 21, 22. On March 10, 2014, the Court awarded EAJA fees in the amount of $6, 133.28. ECF No. 25. On remand, the Commissioner awarded benefits, including a retroactive award of $233, 064.00.

         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 Ghisbrecht 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 Ghisbrecht, 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.

         Although Plaintiff is the named party, the real party in interest is Plaintiffs counsel. Likewise, the Commissioner "has no direct financial interest in the outcome of this case, but instead serves as a de facto trustee" for Plaintiff. Parrish v. Comm'r, 698 F.3d 1215, 1216 n.l (9th Cir. 2012).

         DISCUSSION

         I. Contingency Fee Agreement

         Under Gisbrecht, the Court's first duty when considering whether to approve contingency fee agreement is to determine whether it is within the statutory 25 percent cap. Gisbrecht, 535 U.S. at 807-08. In this case, Plaintiff has previously submitted a copy of the Social Security Retention Agreement and Social Security Federal Court Retention Agreement between Plaintiff and his attorney. ECF Nos. 24-1, 24-2. These agreements provide that Plaintiff will not pay more than 25 percent of past due benefits for the total fees of all attorneys representing him before the agency and in federal court. Following remand, Plaintiff was awarded $233, 064 in past due benefits and now seeks an attorney fee award of $58, 266, which is exactly 25 percent of the past due benefits. Both the agreement and the fee demand comply with the maximum fee 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. "[D]espite the primacy afforded to the fee contract created between counsel and client[, ] . . . courts are empowered to exercise discretion to ensure that the claimant is protected from having to surrender retroactive disability benefits in a disproportionate payment to counsel." Mansfield v. Astrue, No. 07-cv-1427-HA, 2011 WL 2214739, at *3 (D. Or. June 6, 2011), aff'd sub nom. Mansfield v. Comm'r, 509 Fed.Appx. 643 (9th Cir. 2013). "Routine approval of the statutory maximum allowable fee should be avoided in all cases." Stone v. Comm'r, Civ. No. 6:14-cv-01007-CL, 2016 WL 951499, at *2 (D. Or. Mar. 8, 2016) (quoting Lewis v. Sec'y of Health & Human Servs., 707 F.2d 246, 250 (6th Cir. 1983)). "[A] twenty-five percent contingent-fee award is not automatic or even presumed." Dunnigan v. Comm'r, No. Cv. 07-1645-AC, 2009 WL 6067058, at *6 (D. Or. Dec. 23, 2009). The burden rests with Plaintiffs counsel to establish the requested fee's reasonableness. Gisbrecht, 535 U.S. 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 ...


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