Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_01-cv-00658/USCOURTS-casd-3_01-cv-00658-0/pdf.json

Nature of Suit Code: 863
Nature of Suit: Social Security - DIWC/DIWW (405(g))
Cause of Action: 42:405 Review of HHS Decision (DIWC)

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01CV658

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

MARISA FRANCO,

Plaintiff,

v.

JO ANNE B. BARNHART,

Commissioner of Social Security,

Defendant.

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Civil No. 01-CV-658-L

ORDER GRANTING PLAINTIFF’S

APPLICATION FOR ATTORNEY’S

FEES UNDER 42 USC § 406(b)(1)(A)

[doc. #35] and DIRECTING CLERK

TO CLOSE THIS CASE

Plaintiff Marisa Franco filed the above-captioned case seeking judicial review under

section 405(g) of the Social Security Act (“Act”) of the final decision of the Commissioner of

the Social Security Administration denying her claim for disability insurance benefits for the

time prior to February 1, 1997. After full briefing, the Court adopted in part and rejected in part

the Report and Recommendation (“Report”) by denying plaintiff’s motion for summary

judgment and granting defendant’s motion for summary judgment. Plaintiff appealed the

Court’s decision to the United States Court of Appeals for the Ninth Circuit which affirmed in

part, and reversed and remanded in part. Specifically, the Court of Appeals ordered the district

court to “remand to the Council for an award of benefits” from January 5, 1996 to January 31,

1997. On the basis of that ruling, plaintiff sought an award of attorneys’ fees pursuant to the

Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412. The Court denied the application on

August 9, 2005.

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2 01CV658

On February 2, 2008, the Social Security Administration issued the Notice of Award

describing the retroactive benefit as $15,291.75 and setting aside 25% of the benefits paid

through June 2004, totaling $2,201.75. Counsel seeks that amount in the present motion. 

1. Legal Standard

Sections 406(a) and (b) of Title II of the Social Security Act governs attorney fees for

representation of disability claimants in front of the Commissioner and in federal court. Section

406(a) governs fees for representation in administrative proceedings before the Commissioner. 

42 U.S.C. § 406(a). Section 406(b), on the other hand, controls fees for representation in the

federal courts, and provides in relevant part: 

 Whenever 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 past-due

benefits to which the claimant is entitled by reason of such judgment. 

42 U.S.C. § 406(b)(1)(A). The fee is payable "out of, and not in addition to, the amount of [the]

past-due benefits." Id. The attorney's fees are payable from funds withheld from a claimant's

past-due disability benefits by the Social Security Administration for work performed by

claimant's counsel before the district court on his or her claim for Title II disability benefits

under the Social Security Act. An attorney may not charge any fees where representation does

not result in an award of back benefits.

The Supreme Court resolved a split in the circuits in favor of recognizing the primacy of

lawful attorney-client fee agreements and against a lodestar approach to determining reasonable

attorney fees in cases where claimants prevail in federal court. Gisbrecht v. Barnhart, 122 S. Ct.

1817, 1820 (2002). The Court concluded that the provision limiting attorney fees to 25 percent

of past-due benefits was designed to control, and not to displace, contingent-fee agreements that

are within the statutory ceiling. The Court stated that by enacting the 25% fee cap, Congress

sought to protect claimants against inordinately large fees and also to ensure that attorneys

representing successful claimants would not risk nonpayment of appropriate fees. As the Court

further noted, there is nothing in the text or history of § 406(b) that reveals a "desig[n] to

prohibit or discourage attorneys and claimants from entering into contingent fee agreements." 

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Id. at 1827.

Section 406(b) "calls for court review of such arrangements as an independent check, to

assure that they yield reasonable results in particular cases." Id. at 1828. A court may exercise

its discretion to reduce an attorney's contractual recovery based on the character of the

representation and the result achieved. Id. If an attorney is responsible for delay, a reduction

may be in order to prevent the attorney from profiting from the accumulation of benefits during

the case's pendency. Id. In addition, "[i]f the benefits are large in comparison to the amount of

time counsel spent on the case, a downward adjustment is similarly in order." Id. To prevent

windfalls for attorneys and assist the reviewing court in making a reasonableness determination,

the court may require the attorney to submit a record of the hours spent on the case and a

statement of the normal hourly rates charged. Id.

2. Discussion

Pursuant to the holding of Gisbrecht, the court must conduct an independent review to

assure the reasonableness of the fee request in light of the particular circumstances of this case.

122 S. Ct. at 1828. 

Counsel seeks less than the 25 percent maximum contingency fee allowed by law at this

time; therefore, the request is within the statutory and contract-based maximum of 25 percent of

past-due benefits. Plaintiff was awarded $15,291.75 of past due benefits. The attorney’s fee

sought, $2,201.75, is less than 25 percent of the past-due benefits owed. Counsel asserts that he

expended 93.3 hours in the proceedings and has provided his time records associated with this

case.

There is a substantial risk of loss inherent in these types of cases. Plaintiff's disability

claim had already been denied in whole or in part at several levels of agency review prior to the

initiation of the civil action in federal court. Any reliance on a non-contingent rate without

taking into account the contingent nature of this 42 U.S.C. § 406(b) fee could under compensate

counsel. As Gisbrecht makes clear, § 406(b) fees are, by law, contingent fees. A Title II

plaintiff's attorney may only collect fees from a plaintiff who ultimately receives benefits. 

Counsel agreed to a contingency fee arrangement in which he assumed the risk of

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receiving nothing for his time and effort if plaintiff was unsuccessful. "Congress has indicated

the permissibility, within limits, of rewarding attorneys for assuming the risk of going

uncompensated for representing Social Security claimants." Dodson v. Commissioner of Social

Security, 2002 WL 31927589, *2 (W.D. Va. 2002).

3. Conclusion

Having noted the less than 25 percent contingent fee sought by counsel as a starting point

and considered the Gisbrecht reviewing factors, the Court finds and concludes that the requested

attorneys’ fees are reasonable in this case and accordingly will award Plaintiff's counsel the sum

of $2,201.75 in fees under 42 U.S.C. § 406(b). 

Based on the foregoing, plaintiff’s motion for attorney’s fees in the amount of $2201.75 is

GRANTED. [doc. #35]. The Clerk of the Court is directed to CLOSE this case.

IT IS SO ORDERED.

DATED: March 10, 2008

M. James Lorenz

United States District Court Judge

COPY TO: 

ALL PARTIES/COUNSEL

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