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Gonzales v. Commissioner Social Security Administration

United States District Court, D. Oregon

July 13, 2018




         Plaintiff Katie Gonzales filed this action against defendant Commissioner of the Social Security Administration on March 9, 2016, seeking judicial review of the Commissioner's decision finding her not disabled for purposes of entitlement to disability insurance benefits ("DIB") under Title II of the Social Security Act (the "Act") and to Supplemental Security Income ("SSI") under Title XVI of the Act. On June 5, 2017, [1] reversed the Commissioner's decision and remanded this matter for the calculation and payment of benefits. Gonzales moved unopposed for an award of attorney fees pursuant to the Equal Access to Justice Act (the "EAJA") on September 5, 2017, and I granted the motion the following day, September 6, 2017, authorizing award of fees to Gonzales' counsel pursuant to the EAJA in the amount of $8, 671.63. Because Gonzales' petition for judicial review had previously been litigated partially successfully before Judge Brown, and because in connection with litigation before Judge Brown Gonzales' counsel had previously been awarded EAJA fees in the amount of $3, 116.16, the total amount of EAJA fees received to date by Gonzales' counsel in connection with litigating Gonzales' petition is $11, 787.79.

         Now before the court is Gonzales' unopposed motion (#39), filed pursuant to 42 U.S.C. § 406(b), for approval of payment to her counsel out of her retroactive benefits award of $75, 146.00 the amount of $18, 786.50.' I have considered the motion and all of the evidence in the record. For the reasons set forth below, the motion is granted as discussed below, and payment to Gonzales' counsel of attorney fees in the requested amount less a deduction for attorney-attributable delay and less the amount of the EAJA fees already paid to counsel, or $6, 937.56 (less any administrative deduction to be assessed by the Commissioner pursuant to 42 U.S.C. § 406(d)) is approved.


         Pursuant to 42 U.S.C. § 406(b), Gonzales' counsel seeks the court's approval of payment to him of attorney fees out of Gonzales' retroactive benefits award in the amount of $18, 786.50. This amount, as noted above, is precisely equal to the 25% contingency fee to which Gonzales' counsel is entitled pursuant to his fee agreement with Gonzales (which fee counsel has not yet received), but does not reflect any deduction from the contingency amount pursuant to 42 U.S.C. § 406(d) or payment to counsel of EAJA fees. Gonzales' counsel asserts that upon receipt of any award of Rule 406(b) fees, he will refund to Gonzales the amount of the EAJA fees previously received by him in connection with litigating Gonzales' claim.

         Section 406(b) provides, in relevant part, as follows:

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). By contrast with fees awarded pursuant to the EAJA, a fee-shifting statute, Section 406(b) fees are paid out of the retroactive benefits awarded to the successful Social Security claimant. See Id. Counsel representing Social Security claimants may not seek compensation from their clients for trial litigation other than through a Section 406(b) fee. See id. In the event that both an EAJA fee is awarded and a Section 406(b) fee payment is approved, the claimant's counsel must refund to the claimant the amount of the smaller of the two payments. See Gisbrecht v. Barnhart, 535 U.S. 789, 796 (2002). Any Section 406(b) fee must be approved by the court following analysis of its reasonableness before it may be paid. See 42 U.S.C. § 406(b)(1)(A).

         In Gisbrecht, the Supreme Court established that the reasonableness of a Section 406(b) contingency fee is not to be determined primarily by reference to the lodestar method which generally governs fee-shifting disputes. See Gisbrecht, 535 U.S. at 801-802. Instead, to the extent contingency fee agreements do not provide for fees exceeding 25% of claimants' retroactive benefits, their terms are fully enforceable subject only to the court's review "to assure that they yield reasonable results in particular cases." Id. at 807, It is the claimant's counsel's burden to establish the reasonableness of the calculated fee. See id.

         In assessing the reasonableness of a Section 406(b) fee, courts look first to the contingency fee agreement itself, and then may reduce the resulting award "based on the character of the representation and the results the representative achieved." Id. at 808. The claimant's counsel bears the burden to establish the reasonableness of a Section 406(b) fee. See Id. at 807.

         The Gisbrecht court provided, as examples of circumstances that could justify a downward reduction, situations in which the attorney was responsible for delay or in which "the benefits are large in comparison to the amount of time counsel spent on the case." Id. The court specified that "the court may require the claimant's attorney to submit, not as a basis for satellite litigation, but as an aid to the court's assessment of the reasonableness of the fee yielded by the fee agreement, a record of the hours spent representing the claimant and a statement of the lawyer's normal hourly billing charge for noncontingent-fee cases." Id., citing Rodriquez v. Bowen, 865 F.2d 739, 741 (6th Cir. 1989) (en banc).

         The Ninth Circuit's en bone decision in Crawford v. Astrue, 586 F.3d 1142 (9th Cir. 2009), applied the Gisbrecht reasonableness analysis. The Crawford court affirmed Gisbrecht holding that it is error to determine the reasonableness of a Section 406(b) fee by the metric of the lodestar method. See Crawford, 586 F.3d at 1150.

         Here, Gonzales entered into a contingency fee agreement with her counsel providing for payment of 25% of her retroactive benefits to her attorney in the event of a favorable outcome following federal litigation. It therefore now falls to the court to assess whether $18, 786.50 constitutes reasonable compensation for Gonzales' counsel in light of the factors discussed in Gisbrecht and Crawford.

         A. Character of ...

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