Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_16-cv-02358/USCOURTS-cand-3_16-cv-02358-4/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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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ANA VALLE,

Plaintiff,

v.

NANCY A. BERRYHILL,

Defendant.

Case No.16-cv-02358-JSC 

ORDER DENYING MOTION FOR 

CIVIL CONTEMPT AND SANCTIONS

Re: Dkt. No. 34

In this Social Security case, the Court previously granted Plaintiff Ana Valle’s motion for 

summary judgment and remanded to the Social Security Administration for an award of benefits. 

Plaintiff has now filed a motion for Civil Contempt and Sanctions against the Social Security 

Administration for improperly withholding attorney’s fees for work performed before the agency.1 

(Dkt. No. 34.) The Court DENIES the motion because Plaintiff has failed to show that civil 

contempt and sanctions are warranted. Additionally, the Court lacks subject matter jurisdiction to 

order Defendant to pay attorney’s fees for work performed before the Social Security 

Administration. 

BACKGROUND

This case stems from Plaintiff Ana Valle’s appeal of the Social Security Administration’s 

(“the Agency”) denial of her application for disability benefits for a combination of physical and 

mental impairments. Steven Bruce, an attorney for the People with Disabilities Foundation 

(“PWDF”), began representing plaintiff Ana Valle in 2013.2(Dkt. No. 34.) 

 

1 All parties have consented to the jurisdiction of a magistrate judge pursuant to 28 U.S.C. §

636(c). (Dkt. Nos. 6, 8.)

2

Plaintiff Ana Valle and Steven Bruce entered into an initial fee agreement in December 2013 for 

representation through the ALJ hearing in which Plaintiff and Mr. Bruce agreed that the 

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On August 29, 2017, the Court granted Plaintiff’s motion for summary judgment and 

remanded for the calculation and award of benefits. (Dkt. No. 23.) Subsequently, the Agency 

awarded Plaintiff past-due benefits and withheld $18,158.75 for attorney’s fees, which is 25 

percent of past-due benefits owed to Plaintiff. (Dkt. No. 38-3, SSA Letter Ex. B.) Prior to filing 

this motion, Plaintiff moved for attorney’s fees under the Equal Access to Justice Act (“EAJA”) 

for work performed before the Court in 2016 and 2017. (Dkt. No. 26.) On January 18, 2018, the 

Court granted Plaintiff’s motion for EAJA attorney’s fees in the amount of $25,092.19. (Dkt. No. 

31.)

Two months later, Mr. Bruce sent the Agency a letter requesting that attorney’s fees for 

work done before the agency be paid from the withheld past-due benefits pursuant to the fee 

agreement. (Dkt. No. 34-5, Bruce Decl. Ex. B.) Mr. Bruce stated that if the Agency would not 

approve the fee agreement the Agency “may also use this letter as an intent to file a fee petition 

under SSA regulation.” (Id.)3 Four months later, the Agency responded requesting that Mr. Bruce 

either file a petition for administrative fees with an Attorney’s Fee Officer or provide a copy of 

authorization to receive a fee. (Dkt. No. 34-6, Bruce Decl. Ex. C.)

On July 19, 2018, another attorney for PWDF, Zoya Yarnykh, requested the fees be paid 

stating that if the Agency refused, her letter should be interpreted “as an intent to file a fee petition 

under SSA’s regulation.” (Dkt. No. 34-7, Bruce Decl. Ex. D.) On September 28, 2018, the 

Agency responded: “[u]nder the regulations, a petition for approval of fee or written notice of 

intent to file a fee petition should be filed within 60 days of the date the notice of favorable 

decision is mailed.” (Dkt. No. 34-8, Bruce Decl. Ex. E.) The Agency also stated they had not 

received notice or a fee petition and gave Plaintiff 20 days to file a petition or request an extension 

 

“attorney’s fee[s] will be the less of SSA’s current cap of $6,000 or twenty-five percent (25%) of 

all past due benefits awarded to me and my family, pursuant to 42 U.S.C. 406 (a)(2)(A).” (Dkt. 

No. 34-1, Bruce Decl. Ex. A.) After the Agency denied her benefits application, Plaintiff and Mr. 

Bruce entered into another fee agreement for representation during the appeals process; the later 

fee agreement reiterates that attorney’s fees will be the lesser of either $6,000 or twenty-five 

(25%) of all past due benefits. (Id.) 

3 Mr. Bruce attached copies of both fee agreements with Plaintiff Ana Valle to the March 1, 2018 

letter to the Agency. (Dkt. No. 34-4, Bruce Decl. Ex. B.)

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of time. (Id.) On October 8, 2018, Ms. Yarnykh, sent another letter to the Agency writing that a 

notice of intent to file a petition was sent on July 19, 2018. (Dkt. No. 34-9, Bruce Decl. Ex. F.) 

This time the letter warned that PWDF would seek sanctions for violating the Court’s August 29, 

2017 Order remanding for the calculation and award of benefits if the fee agreement was not 

processed. (Id.) On January 9, 2019, Ms. Yarmyhk sent another letter to the Agency repeating the 

request for the fee agreement be approved. (Dkt. No. 34-10, Bruce Decl. Ex. G.) The Agency 

advised PWDF that unless they “file a petition for approval of fee within 20 days from the date of 

this letter, or a written request for extension of time,” all withheld benefits would be certified to 

Plaintiff Ana Valle. (Dkt. No. 34-11, Bruce Decl. Ex. H.) 

Plaintiff thereafter filed the underlying motion requesting the Court do the following: find 

the Agency in civil contempt; award monetary sanctions in the amount of $6,712.50, for attorney’s 

fees incurred in connection with PWDF communications with the Agency and filing Plaintiff’s 

motion; and direct the Agency to pay the attorney’s fees for work performed before the Agency 

within 10 days. (Dkt. No. 34.) 

DISCUSSION

Plaintiff’s motion for contempt and sanctions is predicated on the Court’s Order remanding

for calculation and award of benefits. Plaintiff insists the Agency violated the Order by failing to 

pay her attorney in connection for work performed before the Agency. The Agency contends that 

regulations require that Plaintiff file a fee petition to obtain fees for work performed before the 

Agency. This Order will address, in turn, the civil contempt and sanctions issues, and then the 

request for attorney’s fees for work performed before the Agency. 

I. Civil Contempt and Sanctions

The procedural hook for Plaintiff’s motion is civil contempt and sanctions for violation of 

a court order. But neither basis applies here.

A. Civil Contempt

A court’s power of contempt is regarded as an “inherent” power that is “necessary to the 

exercise of all others.” Int’l Union, United Mine Workers of Am. v. Bagwell, 512 U.S. 821, 831 

(1994). “A district court has the power to adjudge in civil contempt any person who [ ] disobeys a 

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specific and definite order of the court.” Gifford v. Heckler, 741 F.2d 263, 265 (9th Cir. 1984). 

“Intent is not an issue in civil contempt proceedings. The sole question is whether a party 

complied with the district court’s order.” Donovan v. Mazzola, 716 F.2d 1226, 1240 (9th Cir. 

1983) (internal citations omitted). “Judicial sanctions in civil contempt proceedings may, in a 

proper case, be employed for either or both of two purposes: to coerce the defendant into 

compliance with the court’s order, and to compensate the complainant for losses sustained.” 

United States v. United Mine Workers of Am., 330 U.S. 258, 303–04 (1947). 

For the court to issue a civil contempt order the moving party must establish: (1) that the 

party violated a court order, (2) beyond substantial compliance, (3) not based on a good faith and 

reasonable interpretation of the order, (4) by clear and convincing evidence. In re Dual-Deck 

Video Cassette Recorder Antitrust Litig., 10 F.3d 693, 695 (9th Cir. 1993). “The moving party has 

the burden of showing by clear and convincing evidence that the contemnors violated a specific 

and definite order of the court.” In re Bennett, 298 F.3d 1059, 1069 (9th Cir. 2002) (citing F.T.C. 

v. Affordable Media, 179 F.3d 1228, 1239 (9th Cir. 1999). 

Here, Plaintiff has not satisfied the most important prong of civil contempt—violation of a 

court order. See E-Smart Techs., Inc. v. Drizin, No. CIV. 3:06-05528 MHP, 2011 WL 1884195, at 

*7 (N.D. Cal. May 18, 2011) (finding “civil contempt absent a court order would [] conflict with 

the unequivocal and long-standing precedent requiring disobedience of a court order for civil 

contempt.”). Plaintiff argues that the Agency violated the Order because “remand for calculation 

of benefits [] necessarily includes statutory attorney’s fees.” (Dkt. No. 34.) However, the Court 

did not mention attorney’s fees, a fee agreement, or administrative fees in the Order. (Dkt. No. 

23.) Plaintiff cites no case or statute to support her argument that the Court’s Order encompassed 

any fee award before the Agency and this Court did not intend that it do so. Moreover, the Court 

does not have jurisdiction to award Plaintiff’s request for attorney’s fees under 406(a) for work 

performed at the administrative level. Clark v. Astrue, 529 F.3d 1211, 1215 (9th Cir. 2008)

(finding under Section 406(b) the court has jurisdiction to award attorney’s fees for work 

performed before the district court; however, the court has no jurisdiction to award fees for work 

performed during the administrative process). Plaintiff has not satisfied her burden to show by 

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clear and convincing evidence the Agency violated a specific and definite order of the Court. 

B. Sanctions 

Plaintiff requests sanctions in connection with her civil contempt motion and maintains 

that “in narrowly defined circumstances federal courts have inherent power to assess attorney’s 

fees against counsel.” (Dkt. No. 39.)4 Plaintiff urges that the Court either grant sanctions in 

connection with the motion for civil contempt or under the Court’s inherent authority.

1. Civil Contempt Sanctions 

“It is well-established that attorneys’ fees are awarded as compensatory damage to the 

prevailing party in a civil contempt motion.” U.S. Philips Corp. v. KXD Tech., Inc., Case No. CV 

05-08953 DMG (PLAx), 2014 WL 12567518, at *1 (C.D. Cal. Aug. 26, 2014) (citing Perry v. 

O'Donnell, 759 F.2d 702, 705 (9th Cir. 1985)). Plaintiff requests that the Court award monetary 

sanctions for work performed “in connection [with Plaintiff] trying to collect the administrative 

fees,” the motion, and the reply. (Dkt. Nos. 34, 29.) Because Plaintiff has not satisfied her burden 

to establish civil contempt, the Court will not order sanctions.

2. Sanctions Pursuant to the Court’s Inherent Authority 

“The district court has the inherent authority to impose sanctions for bad faith, which 

includes a broad range of willful improper conduct.” Fink v. Gomez, 239 F.3d 989, 992 (9th Cir. 

2001). These powers, however, “must be exercised with restraint and discretion.” Chambers v. 

NASCO, 501 U.S. 32, 44 (1991). Accordingly, the bad-faith requirement sets a “high threshold,” 

which may be met by willful misconduct, or recklessness that is coupled with an improper 

purpose. Fink, 239 F.3d at 993–94 (internal citations omitted). It is the moving party’s burden to 

demonstrate that the party against whom it seeks sanctions acted with the requisite bad faith or 

improper purpose. Burnett v. Conseco, Inc., 87 F.Supp.3d 1238, 1247-48 (N.D. Cal. Apr. 9, 2015) 

(reversed on other grounds). 

 

4

Inherent authority sanctions are available at any time once litigation commences, including after 

entry of judgment. See Haeger v. Goodyear Tire & Rubber Co., 813 F.3d 1233, 1244 (9th Cir. 

2016) (imposing sanctions for discovery fraud discovered after cases settled under the court's 

inherent power), rev’d on other grounds, Goodyear Tire & Rubber Co. v. Haeger, 137 S. Ct. 1178, 

1184 (2017) (affirming the validity of sanctions but reversing because the amount awarded was 

too high). Therefore, even after granting summary judgement, the Court may grant sanctions. 

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Here, Plaintiff insists that sanctions are appropriate because the Agency ignored multiple 

requests for payment under the fee agreement. However, the Agency gave Plaintiff ample time to 

file a fee petition and gave Plaintiff extensions to do so. Moreover, the correspondence indicates 

the Agency did not deny Plaintiff’s request for fees, but instead, advised Plaintiff that based on the 

Agency’s interpretation of section 406(a) Plaintiff needed to file a fee petition to obtain attorney’s 

fees. The Agency’s interpretation of Section 406(a) should not be considered bad faith. See 

GoDaddy.com LLC v. RPost Commc'ns Ltd., No. CV-14-00126-PHX-JAT, 2016 WL 4569122, at 

*11 (D. Ariz. Sept. 1, 2016) (declining to sanction under the court’s inherent authority because 

defendant made plausible legal argument for a broad interpretation of the law). Under these 

circumstances, the Court finds the Agency did not meet the high threshold of bad faith. 

Although a court also has the inherent authority to impose sanctions where a party has 

willfully disobeyed a court order, Chambers, 501 U.S. at 45, as discussed above, the Agency did 

not disobey the Court’s Order remanding for calculation and award of benefits.

***

The Court DENIES Plaintiff’s motion for contempt and sanctions because Plaintiff has not 

satisfied her burden to establish civil contempt. Further, the Court declines to grant sanctions in 

connection with the Court’s inherent authority as Plaintiff has not established the Agency’s bad 

faith. 

II. Attorney’s Fees for Work Performed Before the Agency Under Section 406(a)

Plaintiff requests that the Court direct the Agency to pay within 10 days attorney’s fees 

based on the fee agreement method. The Agency responds that because the Court made the final 

determination regarding benefits, Agency policy requires that Plaintiff submit a fee petition.5 

 

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The Agency argues that the fee agreement method is not available to Plaintiff because “the 

[C]ourt, not the agency, found the claimant entitled to benefits”; therefore, the petition method is 

required in order for PWDF to receive fees from representing Plaintiff at the administrative level. 

(Dkt. No. 38.) According to the Agency’s internal operating guidelines (Program Operations 

Manual System (“POMS”)), “[w]hen a court makes the final decision regarding the claimant’s 

entitlement or eligibility to benefits, the representative must submit a fee petition to receive a fee 

for the services the representative provided before the Agency. The filing of a fee petition is 

required even if the representative previously submitted a fee agreement which was approved at 

the administrative level, because the fee agreement process applies only in a case favorably 

decided by the Commissioner.” Social Security Administration, Program Operations Manual 

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Plaintiff requests attorney’s fees under 42 U.S.C. § 406(a).

6

Section 406(a) provides two 

methods by which a Social Security claimant’s attorney may obtain fees for the representation of 

the claimant before the Agency: the fee petition process and the fee agreement process. 

The fee petition process is governed by 42 U.S.C. § 406(a)(1). When the Commissioner 

makes a determination favorable to the claimant, Section 406(a)(1) authorizes the Commissioner 

to “fix . . . a reasonable fee to compensate [the claimant’s] attorney for the services performed by 

him in connection with such claim.” 42 U.S.C. § 406(a)(1). The fee agreement process is 

governed by 42 U.S.C. § 406(a)(2). Under this process, the attorney and the claimant must enter 

into a written fee agreement and submit it to the Commissioner before the Commissioner issues a 

determination of the claimant’s benefits. 42 U.S.C. § 406(a)(2)(A). If the Commissioner issues a 

determination favorable to the claimant, the Commissioner shall approve the fee agreement at the 

time of the determination, provided the fee does not exceed the lesser of 25% of the claimant’s 

past-due benefits or a set dollar amount—currently $6,000. 42 U.S.C. § 406(a)(2)(A); see

Maximum Dollar Limit in the Fee Agreement Process, 74 Fed. Reg. 6080 (2009).

A. Jurisdiction to Award Fees Under Section 406(a)

Plaintiff asks that the Court grant attorney’s fees for work done before the Agency 

pursuant to the fee agreement. However, “[s]ection 406(a) grants the Social Security 

Administration exclusive jurisdiction to award attorney’s fees for representation of a Social 

Security claimant in proceedings before the Administration.” Clark, 529 F.3d at 1215. On the 

other hand, “[Section] 406(b) grants federal courts exclusive jurisdiction to award attorney’s fees 

for representation of the claimant in court.” Id. (citing MacDonald v. Weinberger, 512 F.2d 144, 

146 (9th Cir. 1975)). Here, however, Plaintiff is not seeking attorney’s fees for work conducted 

 

System, GN 03930.005B4 online at https://secure.ssa.gov/apps10/poms.nsf/lnx/0203930005 (as 

last visited Mar 29, 2019). The Court does not reach this issue because it lacks jurisdiction to 

order the SSA to approve attorney’s fees under 406(a). 

6

Plaintiff ask for $6,000, which is the maximum permitted by the fee agreement. (Dkt. No. 34, 

34-1, Bruce Decl. Ex. A.) Plaintiff’s reference to work done at the administrative level is another 

term for work done before the agency. Brandenburg v. Astrue, No. 06-CV-1431-BR, 2009 WL 

1138088, at *1 (D. Or. Apr. 15, 2009) (attorney’s fees under Section 406(a) are “for representation 

of Plaintiff at administrative proceedings before the agency.”

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during representation before the Court under 406(b).7 Thus only the Commissioner—not this 

Court—can award Plaintiff the fees sought.

Plaintiff’s reliance on Culbertson v. Berryhill and Gisbrecht v. Barnhart is misplaced 

because neither suggests that the Agency must use the fee agreement process. Culbertson v. 

Berryhill, 139 S. Ct. 517, 522 (2019) (holding that §406(b)’s 25% cap on court-stage fees does not 

apply to §406(a) agency-stage fees, or the aggregate of §§406(a) and (b) fees); Gisbrecht v. 

Barnhart, 535 U.S. 789, 809 (2002) (holding § 406(b) does not displace fee agreements, but 

instead “§ 406(b) instructs courts to review for reasonableness fees yielded by those agreements”).

Plaintiff’s cited cases do not suggest that the Court has authority to award attorney’s fees for work 

performed before the agency; instead, they suggest that the work performed before the agency and 

the Court are separate determinations. Culbertson, 139 S. Ct. at 522 (2019) (“Subsections 

[406](a) and [406](b) address different stages of the representation. Section 406(a) addresses fees 

for representation ‘before the Commissioner,’ whereas § 406(b) addresses fees for representation 

in court”); Gisbrecht, 535 U.S. at 794 (“406(a) governs fees for representation in administrative 

proceedings; § 406(b) controls fees for representation in court.”). Therefore, the Court does not 

have the jurisdiction to order the Agency to award Plaintiff attorney’s fees for work performed 

before the Agency. Accordingly, the Court denies Plaintiff’s request for attorney’s fees under 

Section 406(a). 

B. Waiver of Sovereign Immunity

Plaintiff’s request for Section 406(a) fees fails for a second reason: the United States has 

not waived its sovereign immunity. United States v. Mitchell, 445 U.S. 535, 538 (1980) (“A 

waiver of sovereign immunity cannot be implied but must be unequivocally expressed.”) (internal 

 

7

 Section 406(b)(1)(A) provides that “[w]henever a court renders a judgment favorable to a 

claimant under this title [42 USCS §§ 401 et seq.] 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.” PWDF has already received attorney’s fees 

under EAJA for work performed before the Court. (Dkt. No. 31.) If PWDF were awarded 

compensation under Section 406(b) for the same work, they would be required to refund Plaintiff 

the smaller award. Parrish v. Comm'r of SSA, 698 F.3d 1215, 1219 (9th Cir. 2012) (citing Pub. L. 

No. 99-80, § 3, 99 Stat. 183 (1985) (adding “Savings Provision” to 28 U.S.C. § 2412 notes)).

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quotation marks omitted). Nothing in Section 406(a) constitutes an expressed waiver of sovereign

immunity. People with Disabilities Found. v. Colvin, No. 15-cv-02570-HSG, 2016 U.S. Dist.

LEXIS 68122, at *11 (N.D. Cal. May 24, 2016); see also Pittman v. Sullivan, 911 F.2d 42, 46 (8th 

Cir. 1990) (“Section 406 cannot be construed as a waiver of immunity because it contemplates 

payment of the fee award by the claimant, out of past-due benefits, rather than by the government,

out of general funds.”) (internal quotations omitted). For these reasons, Section 406(a) does not 

give the Court jurisdiction to consider Plaintiff’s request for attorney’s fees for work done before 

the Agency. 

***

The Court lacks subject matter jurisdiction to order the Agency to award Plaintiff’s 

attorneys fees pursuant to the fee agreement under 406(a). See also Rattlesnake Coal. v. U.S. 

E.P.A., 509 F.3d 1095, 1103 (9th Cir. 2007) (holding that the federal courts lack subject matter 

jurisdiction over claims brought against a federal agency unless the United States has waived its 

sovereign immunity). 

CONCLUSION

For the reasons discussed above, the Court DENIES Plaintiff’s motion for civil contempt 

and sanctions because Plaintiff has not shown that the Agency violated a court order. Further, the 

Court lacks subject matter jurisdiction to order the Agency to pay attorney’s fees under Section 

406(a). 

IT IS SO ORDERED.

Dated: April 8, 2019

JACQUELINE SCOTT CORLEY

United States Magistrate Judge

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