Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_04-cv-02279/USCOURTS-cand-5_04-cv-02279-3/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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1

 Michael J. Astrue became Commissioner of the Social Security Administration on February

1, 2007. Pursuant to Ruled 25(d)(1) of the Federal Rules of Civil Procedure, Michael J. Astrue is hereby

substituted for Jo Anne B. Barnhart as the Defendant in this matter. 

2

 Plaintiff's counsel has also already sought and obtained by stipulated order an award of

attorney's fees under the Equal Access to Justice Act ("EAJA") in the amount of $2,227.25. Plaintiff's

present motion expressly acknowledges this previous award and that such amount will be paid over to

the claimant in the event that attorney's fees are awarded under Section 406(b). 

ORDER 04-2279 RMW

TER

 

E-filed: 2/8/10 

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

JACK REINKE,

Plaintiff,

v.

MICHAEL J. ASTRUE1

, Commissioner, Social Security Administration,

Defendant.

No. C-04-2279 RMW

ORDER ON MOTION FOR ATTORNEY”S

FEES UNDER 42 U.S.C. §406(b)

Plaintiff's counsel has filed a motion for an award of attorney's fees under 42 U.S.C. §406(b). 

Specifically, plaintiff's counsel seeks an award of an additional $8,000 in attorney's fees for

successfully representing plaintiff in obtaining an award of $83,909.50 in past-due benefits. 

Counsel has already received payment of $5,300 that was approved by the order of the

Administrative Law Judge for legal services performed before the agency.2

Under Section 406(b), "whenever a court render a judgment favorable to a claimant ... the

court may determine and allow as part of its judgment a reasonable fee for such representation, not

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3

 The court is not willing to award fees based upon the January 7, 2008 written agreement. At

the time the agreement was executed, the results were known and had been known for five months. A

significant amount of money – $15,677.38, corresponding to approximately one year's worth of benefits

– continued to be withheld by the Administration for the purpose of providing a source for the payment

of any attorney's fees awarded by the court. For all intents and purposes, this amount was held hostage

pending further proceedings, and in this context, counsel and client entered into an agreement pursuant

to which counsel would receive $8,000 and the client would receive $7,677.38, effectively "splitting the

baby." There is also no indication that the client had been informed that counsel's ordinary hourly rate

was $250, instead of the $542.37 recited in the agreement. Under these circumstances, the court is not

convinced that the January 2008 agreement represents a true meeting of the minds on the reasonable

value of counsel's services in the Federal Court proceedings.

ORDER 04-2279 RMW

TER 2

in excess of 25 percent of the total of the past-due benefits to which the claimant is entitled . . . ." 

The issue presented by the present motion is whether the additional $8,000 sought is a reasonable

fee for the representation.

Counsel's motion is based on Section 406(b) and what the motion describes as a 25 percent

contingent-fee agreement between counsel and client. The fee agreement submitted with the

motion, however, was entered into on January 7, 2008, several months after the completion of the

case and the Social Security Administration's notice to plaintiff that he was entitled to monthly

disability benefits and awarding past-due benefits totaling $83,909.50. It is not a contingent fee

agreement, but is instead a fixed-fee agreement, entered into after the benefits were awarded,

pursuant to which the parties agreed that counsel would be paid (upon court approval) the sum of

$8,000 for services related to the Federal Court proceedings, an amount expressly corresponding to

an hourly rate in excess of $542.

Section 406(b)(1) authorizes the court to award reasonable attorney's fees, not to exceed 25%

of the past-due benefits. 42 U.S.C. §406(b)(1). In determining the reasonableness of a proposed fee,

the court must consider the fee agreement entered by the parties, but is not bound by the agreement

and may make adjustments to avoid a windfall. Gisbrecht v. Barnhart, 535 US. 789, 808 (2002);

Astrue v. Shapiro, 586 F.3d 1142, 1151 (9th Cir. 2009) (court must review the fee to be awarded to

determine whether the fee sought under the agreement is reasonable). Counsel has cited no

authority, and the court's own research disclosed none, involving a post-hoc fee agreement offered to

justify the amount of fees sought to be awarded.3

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ORDER 04-2279 RMW

TER 3

Because the January 2008 fee agreement was entered into after the fact and was not a

contingent fee agreement, the court directed counsel to submit evidence regarding the terms of the

fee agreement entered into at the outset of the representation. In response, counsel supplied a copy

of the October 15, 2001 fee agreement. This initial fee agreement is a contingent-fee agreement,

providing that if the SSA favorably decides the claim, then the client will pay his attorney a fee

"equal to the lesser of 25 percent of the past-due benefits resulting from my claims(s) or $4,000.00"

plus reimbursement of costs advanced. If the SSA did not decide the claim in plaintiff's favor, then

the attorney "shall receive nothing for a fee or for any costs said attorney may have advanced." The

agreement further provides that "My attorney and I may enter into a separate fee agreement in the

event my attorney and I agree that an appeal shall be taken to federal court for review of SSA denial

of my claim(s)." (Emphasis added). No further fee agreement appears to have been reached

regarding legal fees for the Federal Court services, however, at least not until after the case was

successfully completed.

It therefore appears that, in effect, there was no fee agreement in place between counsel and

client for the legal services to be performed in Federal Court relating to the appeal of SSA's denial of

disability benefits at the time those services were performed. In the absence of a written fee

agreement, the appropriate starting point for determining a reasonable fee is the lodestar method:

calculating the fee based on the number of hours reasonably expended multiplied by a reasonable

hourly rate. Bentley v. Commissioner, 524 F. Supp. 2d 921925 (W.D. Mich. 2007); Sanfilippo v.

Commissioner, 1008 WL 1957836, *3-4 (M.D. Fla. 2008). The court may award such fees, subject

to the statutory cap of 25% of the past-due benefits. 42 U.S.C. §406(b)(1). 

In his moving papers, counsel represents to the court that his ordinary hourly rate is $250 and

that he expended 14.75 hours in connection with the proceedings in Federal Court. Counsel has also

submitted an "Itemization of Services" which sets for the time expended. Although the total of

14.75 hours appears reasonable overall, the court notes that the time appears to have been tracked in

quarter-hour increments, with a minimum billing of .25 hours. Thus, there are three one-quarter

hour entries corresponding to receiving and reviewing certified mail receipts in June 2004, ironically

the same amount of time recorded for reviewing the cross-motion for summary judgment and the

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ORDER 04-2279 RMW

TER 4

order of remand (each task logged at .25 hours.). It is not reasonable to award $187.5 for the receipt

and review of three certified mail receipts, and the court will discount the claimed hours by .75. The

remaining 14 hours, at the rate of $250 per hour, results in a lodestar fee of $3,500. 

The court finds that the resulting lodestar fee, $3,500, is a reasonable fee for the services

performed relating to the Federal Court proceedings. 

ORDER

For the foregoing reasons, it is hereby ordered that:

1) plaintiff's attorney, Terry LaPorte, is awarded $3,500 in attorney's fees pursuant to 42

U.S.C. §406(b), payable to him from plaintiff Jack Reinke's past-due Social Security

benefits that have been withheld by the Commissioner; and,

2) within fifteen days after receiving the attorney's fee award, plaintiff's attorney, Terry

LaPorte, shall reimburse to plaintiff Jack Reinke the sum of $2,227.25,

corresponding to the EAJA fees that were previously approved. 

DATE: 2/6/10 

RONALD M. WHYTE

United States District Judge

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ORDER 04-2279 RMW

TER 5

Notice of this document has been sent to:

Counsel for Plaintiff:

Terry LaPorte terry@terrylaporte.com 

Counsel for Defendant:

Sara Winslow sara.winslow@usdoj.gov

Nancy Marie Lisewski nancy.lisewski@ssa.gov 

Date: 2/8/10 TER

Chambers of Judge Whyte

Case 5:04-cv-02279-RMW Document 21 Filed 02/08/10 Page 5 of 5