Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_09-cv-00982/USCOURTS-azd-2_09-cv-00982-0/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 

Vincent Kellogg, 

Plaintiff, 

v. 

Michael J. Astrue, Commissioner of 

Social Security, 

Defendant. 

No. CV 09-00982-PHX-JAT 

ORDER

 Pending before the Court is Plaintiff’s Motion for Attorneys’ Fees (Doc. 18). 

Defendant has filed a response (Doc. 19). 

I. BACKGROUND 

Plaintiff filed applications for a period of disability and disability insurance 

benefits under Title II of the Social Security Act on September 28, 2004. Plaintiff’s Title 

II application was denied initially and again on reconsideration. 

 Plaintiff requested and was granted a hearing before an Administrative Law Judge 

(“ALJ”). The ALJ issued a Notice of Decision-Unfavorable denying Plaintiff’s claims on 

March 25, 2006. On October 9, 2006, Plaintiff retained Plaintiff’s counsel on a 

contingent-fee basis. On October 19, 2006, Plaintiff’s counsel requested review of 

Plaintiff’s claim with the Appeals Council and she submitted a brief on February 20, 2007. 

The Appeals Council denied review on March 11, 2009. On May 7, 2009, Plaintiff filed 

this action in federal court. 

 Plaintiff filed his opening brief in this matter on September 11, 2009. (Doc. 11). 

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On November 9, 2009, Defendant stipulated to remanding the case to the ALJ to hold a de 

novo hearing and issue a new decision regarding Plaintiff’s eligibility for disability 

insurance benefits. (Doc. 14). On November 10, 2009, the Court entered an order 

remanding this matter for further administrative proceedings and the Clerk of the Court 

entered judgment in this case. (Docs. 15 & 16). 

 Upon remand, the ALJ held a supplemental hearing and issued a fully favorable 

decision on March 22, 2011. The Social Security Administration withheld $32,017.00, 

which represents 25% of the past-due benefits payable to Plaintiff, as required by Section 

206(a) of the Social Security Act for attorneys’ fees. 

 On November 27, 2012, Plaintiff filed the pending motion for attorneys’ fees with 

the Court. (Doc. 18). Plaintiff’s counsel seeks $22,017.00 in attorneys’ fees pursuant to 

42 U.S.C. § 406(b). (Id. at 1). Defendant argues that more reasonable sums would be 

either $7,699.12 or $10,220.00. (Doc. 19). 

II. ANALYSIS 

 Section 406(b) provides that whenever the Court renders a favorable judgment to a 

social security claimant, the Court can award reasonable attorneys’ fees for representation 

of the claimant. 42 U.S.C. § 406(b)(1)(A). The reasonable fee cannot exceed twenty-five 

percent of the total past-due benefits awarded to the claimant. Id. The fee is payable out 

of, and not in addition to, the amount of the past-due benefits. Id. Section 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. Rather, § 406(b) 

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

yield reasonable results in particular cases.” Gisbrecht v. Barnhart, 535 U.S. 789, 807 

(2002). The Supreme Court noted that “Congress 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. Therefore, the Court must ensure the fee is 1) 

reasonable, and 2) limited to 25% of past-due benefits. 

 This Court must first “respect the primacy of lawful attorney-client fee 

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agreements.” Crawford v. Astrue, 586 F.3d 1142, 1150 (9th Cir. 2009) (en banc) (internal 

quotations omitted). While looking first to this agreement, this Court must still test the 

resulting award for reasonableness. Id. at 1149. In other words, “the district court must 

first look to the fee agreement and then adjust downward if the attorney provided 

substandard representation or delayed the case, or if the requested fee would result in a 

windfall.” Id. at 11511

. In considering reasonableness this Court should consider the 

following non-exhaustive factors: the character of the representation, the results achieved, 

performance, delay, whether the benefits were proportionate to the time spent on the case, 

and, as an aid if necessary, the lodestar calculation. Id. 

 Plaintiff and his counsel had a contingent-fee agreement in this case typical of fee 

agreements in disability benefit cases. The contingent-fee agreement provides that 

Plaintiff’s counsel’s fee shall equal twenty-five percent of all past-due benefits awarded to 

Plaintiff and Plaintiff’s family. (Doc. 18-4). Twenty-five percent of the total amount of 

past-due benefits awarded to Plaintiff and others as a result of the judgment in his favor is 

$32,017.00. Plaintiff's counsel seeks an award of attorneys’ fees in the amount of 

$22,017.00. 

 The Commissioner objects to this amount because Plaintiff’s counsel worked 14.9 

hours on this matter, which represents a rate of $1,477.00 per hour. (Doc. 19 at 2). The 

Commissioner argues that the fee requested is unreasonable because this is an 

unreasonable hourly rate to be paid. (Id.). 

 Plaintiff has established that the fee is less than 25% of past-due benefits. Turning 

to the factors outlined in Crawford, the Court finds the fee requested by Plaintiff, 

however, is unreasonable. The only relevant factor to this determination is whether the 

benefits were proportionate to the time spent on the case. If the “benefits are large in 

comparison to the amount of time counsel spent on the case, a downward adjustment is . . 

. in order.” Gisbrecht, 535 U.S. at 808. 

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 “In the event the court chooses not to give effect to the terms of the agreement, it should 

state for the record the deduction being made and the reasons therefor[ ].” Crawford, 586 

F.3d at 1151 (quoting Rodriquez v. Bowen, 865 F.2d 739, 746 (6th Cir. 1989) (en banc)). 

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 The Court recognizes that counsel’s fee is under a contingent-fee agreement and as 

such Plaintiff’s counsel bore the risk of an unfavorable decision. Plaintiff’s counsel avers 

that the prevailing non-contingent rate in the Phoenix market is $250.00 per hour. (Doc. 

18 at 12). The rate in a contingent-fee agreement will justifiably be higher. The question 

is how much higher. 

 Under similar circumstances, in Hires v. Commissioner of Social Security 

Administration and Loveless v. Astrue, other judges in this Court have found attorneys’ 

fees requests equating to rates of $1,073.47 and $1,043.77 per hour respectively were 

unreasonable for no other reason than the excessive hourly rate these fees represented. 

See Hires v. Comm’r of Soc. Sec. Admin., CV-08-2037-PHX-FJM, 2010 WL 2720821, at 

*2 (D. Ariz. July 9, 2010) (finding $300.00 per hour rate was reasonable); Loveless v. 

Astrue, 2:09-CV-00830 JWS, 2012 WL 1190823, at *2 (D. Ariz. Apr. 10, 2012) (finding 

that an almost $700 per hour rate was high but still reasonable); see also Hearn v. 

Barnhart, 262 F. Supp. 2d 1033, 1036 (N.D. Cal. 2003) (awarding counsel nearly three 

times the amount of his normal hourly rate); Grunseich v. Barnhart, 439 F.Supp.2d 1032, 

1035 (C.D. Cal. 2006) (awarding hourly rate of $600); contra, Hodges–Williams v. 

Barnhart, 400 F. Supp. 2d 1093, 1099 (D. Ill. 2005) (contingency fee award which “would 

amount to an hourly rate of more than $1,000 per hour” is unreasonable). 

 In this case, the Court concludes that Plaintiff’s requested rate of $1,477.00 per 

hour for 14.9 hours of work is excessive and therefore unreasonable. To give adequate 

consideration to the risk that Plaintiff’s counsel took in undertaking the contingent fee 

arrangement, the Court concludes that an award of $11,175.00 is appropriate. This 

represents an hourly rate of $750—three times higher than the non-contingent fee rate—

and accounts for the risk that Plaintiff’s counsel took, counsel’s experience in the field, 

and the favorable disposition of Plaintiff’s claim. 

III. CONCLUSION 

// 

// 

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 Based on the foregoing, 

IT IS ORDERED that Plaintiff’s Motion for an Award of Attorneys’ Fees Under 

42 U.S.C. § 406(b) (Doc. 18) is granted. Counsel’s fees are approved in the amount of 

$11,175.00. 

 Dated this 17th day of September, 2013. 

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