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Ricky R. v. Commissioner Social Security

United States District Court, D. Oregon, Portland Division

October 10, 2018

RICKY R., [1] Plaintiff,



         Introduction Before the court is an unopposed Motion for Attorney Fees Under 42 U.S.C. § 406(b) (“Section 406(b)”) filed by plaintiff Ricky R. (“Plaintiff”). Although Plaintiff is the claimant in this case, the real party in interest to this motion is his attorney, Merrill Schneider (“Schneider”) of the Schneider Kerr Law Offices. 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 Schneider is entitled to fees under Section 406(b) in the amount of $21, 144.75.[2]

         Procedural Background

         Plaintiff filed his application for disability insurance benefits on December 21, 2011, alleging an onset date of December 31, 2010. His application was denied initially and on reconsideration. On February 7, 2014, an Administrative Law Judge (“ALJ”) issued an opinion finding Plaintiff was not disabled through the date he was last insured and, therefore, not entitled to benefits. The ALJ found Plaintiff: (1) suffered from the severe impairments of coronary artery disease, diabetes mellitus, cervical/lumber degenerative disc disease, right shoulder injury, minor degenerative joint disease of the left shoulder, knee and foot pain, gout, and obesity; (2) retained the residual functional capacity to perform light work that requires only occasional climbing (ramps/stairs), balancing, stooping, kneeling, crouching or crawling; no climbing of ropes, ladders or scaffolds or reaching with the upper left extremity, and less than moderate exposure to hazards such as commercial driving, unprotected heights, and moving machinery; (3) was unable to perform past relevant work; and (4) was able to perform jobs such as automobile self-service station attendant and sales clerk. Accordingly, the ALJ determined Plaintiff was not disabled between his alleged onset date of December 31, 2010. through September 30, 2013, the date he was last insured. That decision became the final decision of the Commissioner on July 13, 2015, when the Appeals Council denied Plaintiff's appeal.

         Plaintiff sought review of the Commissioner's decision by filing a complaint in this court on September 9, 2015. Plaintiff alleged the ALJ erred by: (1) improperly discounting Plaintiff's credibility; (2) failing to account for Plaintiff's right shoulder limitation in formulating Plaintiff's residual functional capacity; (3) identifying representative occupations that conflict with Plaintiff's residual functional capacity; and (4) identifying transferable skills without the support of vocational expert testimony. On December 12, 2016, this court issued an Opinion and Order affirming the ALJ's discounting of Plaintiff's testimony, formulation of his residual functional capacity, and identification of representative occupations, but finding insufficient evidence in the record to support the ALJ's determination Plaintiff had transferable skills to perform the identified occupations (the “Opinion”). Consequently, the court remanded the matter for development of the record with regard to transferable skills. On January 2, 2018, the ALJ issued a favorable decision finding Plaintiff disabled as of October 30, 2011. As a result, Plaintiff and his children were awarded a total of $108, 579 in past-due benefits.

         Plaintiff previously filed a Stipulated Motion for Attorney Fees Under 28 U.S.C. § 2412(d) in the amount of $3, 599.28, which the court granted on March 15, 2017. On June 5, 2018, Plaintiff filed the instant petition for attorney fees under Section 406(b) in the amount of $21, 144.75. The Commissioner does not oppose the motion.


         The parties do not dispute Plaintiff is the prevailing party in this matter. Additionally, the Commissioner does not challenge the amount Schneider requests as attorney fees. Nonetheless, because the Commissioner does not have a direct stake in the allocation of Plaintiff's attorney fees, the court must ensure the calculation of fees is reasonable to prevent Schneider from receiving a potential windfall. See Gisbrecht, 535 U.S. at 798 n. 6 (“We also note that the Commissioner of Social Security . . . has no direct financial stake in the answer to the § 406(b) question.”).

         After entering a judgment in favor of a Social Security claimant represented by counsel, 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) (2018). 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, No. CV 07-1645-AC, 2009 WL 6067058, at *7 (D. Or. Dec. 23, 2009), adopted 2010 WL 1029809 (Mar. 17, 2010) (quoting Gisbrecht, 535 U.S. at 807 n.17). A Section 406(b) fee award is paid from the 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 a fee under both 28 U.S.C. § 2412(d)) of the Equal Access to Judgment Act (the “EAJA”) and Section 406(b), 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. Plaintiff and Schneider executed a retainer agreement, which provided the Schneider Kerr Law Offices were entitled to “[a]ttorneys fees for representation in the Federal Court . . . separate from and in addition to any fee for representation before the Social Security Administration” in an amount not to exceed twenty-five percent of the past-due benefits awarded. (Mot. for Attorney Fees Under 42 U.S.C. §406(b), ECF No. 27, (“Mot.”), Attach. 1.) The terms of this agreement are within the statute's limits.

         Next, the court confirms 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 Plaintiff. Schneider provided documents from the Social Security Administration (the “Administration”) entitled “Notice of Award” which detail retroactive benefits due to Plaintiff and his children in the total amount of $108, 579. (Mot. Attach. 2-4.) Accordingly, the Schneider Kerr Law Offices may recover up to $27, 144.75 in attorney fees for time expended before the district court, which represents twenty-five percent of Plaintiff's past-due benefits.

         The Schneider Kerr Law Offices seek attorney fees of $21, 144.75, significantly less than the twenty-five percent cap contemplated by the fee agreement. Schneider contends the fee requested is appropriate because the combined fees recovered under both Sections 406(a) and 406(b) together would equal $ 27, 144.75, exactly twenty-five percent of Plaintiff's past-due benefits award. (Mot. at 4 n.2.) The Ninth Circuit, however, has held Section 406(b)'s twenty-five percent statutory cap applies only to fees awarded for representation before the district court and does not limit the total fees that may be recovered under Sections 406(a) and 406(b). Clark v. Astrue, 529 F.3d 1211, 1215 (9th Cir. 2008). Therefore, the request for $21, 114.75 under § 406(b) is below the twenty-five percent cap. Having determined the fee agreement and the amount requested are in accordance with the statutory limits, the court next turns to “its primary inquiry, the reasonableness of the fee sought.” Dunnigan, 2009 WL 6067058, at *10.

         II. ...

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