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Merritt v. Berryhill

United States District Court, D. Oregon, Medford Division

June 14, 2018

DANA L. MERRITT, Plaintiff,
NANCY A. BERRYHILL, Acting Commissioner of Social Security, Defendant.


          Mark D. Clarke United States Magistrate Judge

         This case comes before the Court on an unopposed motion (#31) for attorney fees under 42 U.S.C. § 406(b) in the amount of $21, 700.53, with the actual payment request of $11, 232, the amount left after subtracting the $4, 559.20 in EAJA fees and $5, 909 for work at the administrative level that have already been paid to the plaintiffs attorney. Having reviewed the proceedings and the amount of fees sought, the Court concludes that the plaintiffs attorney is entitled to the fees requested. The motion (#31) is GRANTED.


         On February 10, 2016, the plaintiff filed her claim to obtain judicial review of a final decision of the Commissioner, which denied her application for Title XVI supplemental security income disability benefits under the Social Security Act. On October 12, 2017, this Court remanded (#25) Merritt's case for an immediate payment of benefits. On January 8, 2018, this Court granted a stipulated application for the plaintiffs attorney fees pursuant to EAJA in the amount of $4, 559.20 (#29); the fees were assigned and made payable to the plaintiffs counsel. On March 14, 2018, the plaintiffs attorney filed this motion for attorney fees under 42 U.S.C. § 406(b). The Commissioner does not oppose counsel's request.


         Under 42 U.S.C. § 406(b), a court entering judgment in favor of an SSDI claimant who was represented by an attorney "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." Crawford v. Astrue, 586 F.3d 1142. 1147 (9th Cir. 2009). In contrast to fees awarded under fee-shifting provisions such as 42 U.S.C. § 1988, the fee is paid by the claimant out of the past-due benefits awarded; the losing party is not responsible for payment. Gisbrecht v. Barnhart, 535 U.S. 789, 802 (2002). Also, in contrast to fees awarded under fee-shifting statutes, under which "nothing prevents the attorney for the prevailing party from gaining additional fees, pursuant to contract, from his own client, " Id. at 806, the court-awarded fee is the only way a successful SSDI attorney may recover fees for work performed before the district court. Crawford. 586 F.3d at 1147. In fact, it is a criminal offense for an attorney to collect fees in excess of those allowed by the court. Id.; 42 U.S.C. § 406(b)(2): see also Gisbrecht, 535 U.S. at 806-07. Thus, when a court approves both an EAJA fee and a section 406(b) fee payment, the claimant's attorney must offset any fees the attorney receives under Section 406(b) with any award the attorney received under EAJA "if the two were for the 'same work.'" Parrish v. Commissioner of Social Sec. Admin., 698 F.3d 1215, 1218 (9th Cir. 2012) (citing Gisbrecht, 535 U.S. at 796).

         Under the Supreme Court's decision in Gisbrecht, the court first examines the contingency fee agreement to determine whether it is within the statutory 25% cap. In this case, the plaintiffs counsel submitted the attorney-client contingent-fee agreement (#31-C); the agreement shows federal court appearance, followed by a favorable outcome, will result in a fee of either "such amount that my attorney is able to obtain under the Equal Access to Justice Act (EAJA) or up to 25% of my past due benefits as determined by my attorney pursuant to 42 U.S.C. Section 406(b)."[1] Thus, the terms of the agreement are within the statute's limits.

         The next step is to confirm that counsel's fee request does not exceed the statute's 25% ceiling. This determination requires evidence of the retroactive benefits to be paid to the claimant. Counsel has included the "Notice of Award, " from the Society Security Administration (#31-A), which states the total retroactive benefits due to the plaintiff to be in the amount of $88, 231.00. Plaintiffs attorney notes however, that this amount includes past due benefits through October 2017 when it should only be calculated through September 2017. Therefore, in determining whether counsel's fee request does not exceed the 25% ceiling, the correct total for retroactive benefits is $86, 802.10. Twenty-five percent of $86, 802.10 is $21, 700.53 - the exact amount requested. Therefore, the fee demand complies with the maximum fee allowed by statute.

         An order for an award of benefits cannot be presumed to require a fee award of 25% of a claimant's retroactive benefits award, however, nor should the order for an award be viewed in isolation. Newton v. Colvin. 2013 WL 3119564 (D. Or. June 18, 2013). 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, 586 F.3d at 1151 (citing Gisbrecht, 535 U.S. at 808). The four factors to be considered when evaluating the requested fee's reasonableness have been identified by the Ninth Circuit as derived from the Supreme Court's analysis in Gisbrecht:

1. the character of the representation, specifically, whether the representation was substandard;
2. the results the representative achieved;
3. any delay attributable to the attorney seeking the fee; and
4. whether the benefits obtained were "not in proportion to the time spent on the case" and raise the specter that the attorney would receive an unwarranted windfall.

Crawford, 586 F.3d at 1151-53 (citations omitted). The Ninth Circuit, in Crawford, also identified the risk inherent in contingency representation as an appropriate factor to consider in determining a section 406(b) award. It focused the risk inquiry, however, stating that: "the district court should look at the complexity and risk involved in the specific case at issue to determine ...

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