Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_11-cv-01063/USCOURTS-azd-2_11-cv-01063-1/pdf.json

Nature of Suit Code: 864
Nature of Suit: Social Security - SSID Title XVI
Cause of Action: 42:405 Review of HHS Decision (SSID)

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Jesus Encinas, Jr. 

Plaintiff, 

v. 

Carolyn W. Colvin, Commissioner of the 

Social Security Administration, 

Defendant.

No. CV11-1063 PHX DGC

ORDER 

Plaintiff’s counsel, Mr. Slepian, has filed a motion for an award of attorney fees 

under 42 U.S.C. § 406(b). Doc. 21. The Commissioner does not oppose the motion. 

Doc. 23. The Court will grant the motion and award $5,000.00 in fees. 

I. Background.

On April 30, 2012, the Court granted judgment in Plaintiff=s favor and remanded 

the case for an award of benefits. Doc. 19. On remand, Plaintiff received $56,969.40 in 

past-due benefits. Doc. 21 at 2. Mr. Slepian has now filed a motion for attorneys’ fees 

under 42 U.S.C. § 406(b), requesting $5,000 for 34.7 hours of work performed. Doc. 21-

1 at 7. 

The fee agreement between Plaintiff and Mr. Slepian provides that Mr. Slepian 

shall receive 25 percent of the past-due benefits award. Doc. 21-1 at 3. Under § 406(b), 

Mr. Slepian typically would be entitled to this contingent fee if found reasonable by the 

Court, and it would come from Plaintiff’s recovery. A 25% fee in this case would equal 

$14,242.50. Mr. Slepian would also normally have been entitled to seek fees under the 

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Equal Access to Justice Act (“EAJA”), and estimates that his recovery under the statute 

would have been approximately $6,650 for the 34.7 hours he devoted to this case. This 

amount would have been paid by Defendant, not taken from Plaintiff’s recovery. 

28 U.S.C. § 2412(d)(1)(A). To prevent Mr. Slepian from receiving a double recovery 

from these two sources – § 406(b) and the EAJA – Congress requires that Mr. Slepian 

refund to Plaintiff the lower amount of these two fees. Gisbrecht v. Barnhart, 535 U.S. 

789, 796 (2002). Thus, assuming Mr. Slepian had received the 25% contingency fee of 

$14,242.50 and an EAJA fee of $6,650, he would have refunded to Plaintiff the $6,650 

EAJA fee and kept the $14,242.50 contingency fee. 

Unfortunately, Mr. Slepian failed to seek fees under the EAJA. Doc. 21 at 2. His 

only remaining source of recovery, therefore, is § 406(b). Rather than seeking the full 

25% contingency fee when he cannot offset it with the EAJA fees he could have obtained 

from the government, Mr. Slepian asks the Court to award him $5,000 in § 406(b) fees. 

This money would come from Plaintiff’s past-due benefits of $56,969.40, but would be 

considerably less than the $14,242.50 Mr. Slepian would have received under the 

contingency fee agreement and § 406(b) in normal circumstances, and less than the net 

amount Plaintiff would pay if Mr. Slepian had received the $14,242.50 contingency fee 

from Plaintiff and remitted to Plaintiff the $6,650 in EAJA fees as required by law. In 

such a scenario, Plaintiff would be out $7,592.35 (the difference between $14,242.50 and 

$6,650), whereas, under Mr. Slepain’s proposal, Plaintiff will be out only $5,000. In 

effect, Mr. Slepian is proposing that he receive considerably less than the $14,242.50 his 

fee agreement calls for, and that Plaintiff incur an expense of $5,000 which is less than he 

would have incurred had Mr. Slepian filed a timely EAJA application. In short, Mr. 

Slepian is proposing that he, not Plaintiff, bear the consequences of his error. 

II. Legal Standard 

Section 406 establishes Athe exclusive regime for obtaining fees for successful 

representation of Social Security benefits claimants.@ Gisbrecht, 535 U.S. at 795-96. 

Section 406(b) provides that 

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[w]henever a court renders a judgment favorable to a claimant . . . 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). 

 In Gisbrecht, the Supreme Court discussed the meaning of the term Areasonable 

fee@ in § 406(b). The Court concluded that A§ 406(b) does not displace contingent-fee 

agreements as the primary means by which fees are set for successfully representing 

Social Security benefits claimants in court.” 535 U.S. at 807. “Rather, § 406(b) calls for 

court review of such arrangements as an independent check, to assure that they yield 

reasonable results in particular cases.@ Id. The Court noted that ACongress has provided 

one boundary line: Agreements are unenforceable to the extent that they provide for fees 

exceeding 25 percent of the past-due benefits.@ Id. Gisbrecht also recognized, as noted 

above, that a claimant’s attorney who has received fees under the EAJA and § 406(b) 

must refund to the claimant the smaller fee award. Id. at 796; see Yarnevic v. Apfel, 359 

F. Supp. 2d 1363, 1366 (N.D. Ga. 2005). 

III. Analysis. 

Mr. Slepian’s fee calculation makes a few assumptions. The first is that the Court 

would find that 25% is a reasonable § 406(b) fee. If Mr. Slepian were to receive the full 

25% of past-due benefits as provided in his fee agreement with Plaintiff, he would 

receive a fee equivalent to $410 per hour ($14,242 divided by 34.7 hours). The Court 

concludes that this is a reasonable rate given the inherent risk of contingent fee 

agreements. See Grunseich v. Barnhart, 439 F. Supp. 2d 1032, 1035 (C.D. Cal. 2006) 

(awarding hourly rate of $600); Yarnevic, 359 F. Supp. 2d at 1365-67 (awarding hourly 

rate of $643); Claypool v. Barnhart, 294 F. Supp. 2d 829, 833-34 (S.D. W. Va. 2003) 

(awarding fee equivalent to $1,433 hourly rate); Brown v. Barnhart, 270 F. Supp. 2d 769, 

772-73 (W.D. Va. 2003) (awarding fee equivalent to $977 hourly rate). Under normal 

circumstances, the Court would award Mr. Slepian $14,242.35 for his representation of 

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Plaintiff before the Court. Therefore, the Court accepts Mr. Slepian’s assumption that he 

would have been awarded 25% under the fee agreement. 

 Mr. Slepian’s second assumption is an above-normal EAJA fee award of 

$9,242.35 that would offset the $14,242.35 contingent fee. This high assumed recovery 

works to the benefit of Plaintiff, who would receive a refund of the EAJA fees and would 

incur a net outlay of $5,000. It also means that Mr. Slepian will receive only $5,000, 

which equates to an hourly rate of $144/hour. Without much analysis, the Court can 

conclude that this is a reasonable fee. See § 406(b) (setting 25% of the award as a 

maximum contingent fee). Mr. Slepian achieved a good result for his client, and should 

receive some compensation for his work. 

EAJA awards are not automatic, and operate to the benefit of the claimant by 

offsetting some of the fees due the attorney under the contingent fee agreement. Id. Mr. 

Slepian failed to request EAJA fees, but his proposed § 406(b) fee and assumptions 

operate to make up for that failure to the benefit of his client. Mr. Slepian has failed to 

cite any case where the attorney failed to request EAJA fees and was allowed to assume 

an EAJA award in order to request the remaining § 406(b) fees. The Court has also failed 

to find any such case. Because Mr. Slepian’s proposal does not penalize Plaintiff, 

however, and in fact results in a more favorable result for Plaintiff than if Mr. Slepian had 

sought an EAJA award, the Court grants his request to award $5,000 in attorney’s fees 

under § 406(b). 

IT IS ORDERED that the motion for award of attorney fees (Doc. 21) is granted 

pursuant to 42 U.S.C. ' 406(b). Mr. Slepian is awarded $5,000 in attorney fees, to be 

paid out of the sums withheld by Defendant from Plaintiff=s past-due benefits. 

Dated this 20th day of October, 2015. 

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