Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_08-cv-02037/USCOURTS-azd-2_08-cv-02037-1/pdf.json

Nature of Suit Code: 865
Nature of Suit: Social Security - RSI (405(g))
Cause of Action: 42:405 Review of HHS Decision (SSID)

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NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Martin Hires, 

Plaintiff, 

vs.

Commissioner of Social Security

Administration, 

Defendant. 

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No. CV-08-2037-PHX-FJM

ORDER

We now have before us plaintiff’s motion for attorney’s fees (doc. 14) and

memorandum in support (doc. 15), defendant’s responses (docs. 18 and 19), and plaintiff’s

reply (doc. 20). 

On December 29, 2009, we issued an Order (doc. 12) concluding that the ALJ’s

decision denying Social Security benefits was not based on substantial evidence in the record

and remanding to the Commissioner for an immediate award of benefits. Plaintiff claims that

on remand the Commissioner awarded him past due benefits in the amount of $73,855.00.

Plaintiff has now filed an application for attorney’s fees and costs in the total amount

of $3,313.94 under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d) (doc. 14),

and for an award of attorney’s fees under to 42 U.S.C. § 406(b) in the amount of $18,463.75

(doc. 15). Fees under § 406(b) are distinguishable from those awarded under the EAJA.

Section 406(b) provides that when a claimant obtains a favorable judgment under the Social

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Security Act, “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. Id. §

406(b)(1)(A). The § 406(b) fee “is payable out of, and not in addition to, the amount of the

past-due benefits.” Gisbrecht v. Barnhart, 535 U.S. 789, 795, 122 S. Ct. 1817, 1822 (2002).

In contrast, under the EAJA, a party prevailing against the United States may be

awarded fees payable by the government if the government’s position in the litigation was

not “substantially justified.” 28 U.S.C. § 2412(d)(1)(A). Congress permits fee awards under

both the EAJA and § 406(b), “but the claimant’s attorney must refund to the claimant the

amount of the smaller fee.” Gisbrecht, 535 U.S. at 796, 122 S. Ct. at 1822 (quotation

omitted). Thus, “an EAJA award offsets an award under Section 406(b), so that the amount

of the total past-due benefits the claimant actually receives will be increased by the EAJA

award up to the point the claimant receives 100 percent of the past-due benefits.” Id. 

The Commissioner does not contest the propriety or amount of the requested EAJA

fee (doc. 18). Accordingly, finding that the government’s position in the litigation was not

substantially justified, we award plaintiff fees and costs under the EAJA in the amount of

$3,313.94.

Nor does the Commissioner contest the propriety of fees under § 406(b). The only

issue is the amount. The Commissioner contends that plaintiff’s statement that he was

awarded $73,885.00, “grossly overestimate[s] the amount of back benefits.” Response at 3.

Plaintiff’s only evidence of the benefits award is the “Notice of Award” attached as exhibit

C to his motion. But the notice does not set forth the total amount of the award. Although

plaintiff argues that the “2/23/10 Title II notice” states that “25% of the past-due benefits is

$18,463.75,” plaintiff has failed to attach that notice with his motion. Therefore, we are

unable to verify the calculation. Even if we assume, however, that 25% of the past-due

benefits is $18,463.75, we nevertheless conclude that the requested fee award is

unreasonable. 

Plaintiff retained counsel under a contingency fee agreement which provided for

payment to counsel of 25% of any past-due benefits awarded to plaintiff. Section 406(b)

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“does not displace contingent-fee agreements within the statutory ceiling.” Gisbrecht, 535

U.S. at 808, 122 S. Ct. at 1829. Instead, we will “review for reasonableness fees yielded by

those agreements.” Id. Under the statute, plaintiff’s counsel is entitled to a “reasonable fee,

not in excess of 25 percent of accrued benefits.” Id. at 804, 122 S. Ct. at 1826. However,

the fee must not only be within the 25 percent maximum, it must also be “reasonable for the

services rendered.” Id. at 807, 122 S. Ct. at 1828. If the “benefits are large in comparison

to the amount of time counsel spent on the case, a downward adjustment is . . . in order.” Id.

at 808, 122 S. Ct. at 1829. The lawyer should not receive a “windfall.” Id. 

Plaintiff’s counsel requests § 406(b) fees in the amount of $18,463.75 for 17.2 hours

of work, resulting in an hourly rate of $1,073.47. This is unreasonable by any standard.

Plaintiff’s counsel avers that the prevailing non-contingent rate in the Phoenix market ranges

between $200 and $250 an hour. Exercising our discretion and accounting for the risk

inherent in contingency fee arrangements, we conclude that an hourly rate of $300.00 is a

reasonable fee in this case. Therefore, based on counsel’s 17.2 hours of work, we award a

total fee under § 406(b) in the amount of $5,160.

IT IS ORDERING GRANTING plaintiff’s motion for an award of attorney’s fees

under the EAJA in the amount of $3,313.94 (doc. 14).

IT IS FURTHER ORDERED GRANTING plaintiff’s motion for an award of fees

pursuant to 28 U.S.C. § 406(b) in the amount of $5,160 (doc. 15). Counsel shall refund to

plaintiff $3,313.94, the amount of the EAJA award. See Gisbrecht, 535 U.S. at 796, 122 S.

Ct. at 1822.

DATED this 9th day of July, 2010.

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