,, 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

EUGENE S. HALL, 

Plaintiff, 

v. 

CAROLYN W. COL VIN, 

Defendant. 

PAPAK, Magistrate Judge: 

6:14-CV-1410-PK 

OPINION AND 

ORDER 

Plaintiff Eugene S. Hall filed this action against defendant Carolyn W. Colvin, Acting 

Commissioner of Social Security, on September 2, 2014, seekingjudicial review of the 

Commissioner's decision finding him not disabled for purposes of entitlement to disability 

insurance benefits ("DIB") under Title II of the Social Security Act. On September 29, 2015, I 

recommended that the Commissioner's decision should be reversed and that this matter should be 

remanded for the calculation and payment of benefits. Judge Mosman adopted that 

recommendation as his own opinion, without modification. Hall moved unopposed for an award 

of attorney fees pursuant to the Equal Access to Justice Act (the "EAJA") on December 8, 2015, 

and I granted the motion that same day, authorizing award of fees to Hall pursuant to the EAJA 

in the amount of$4,391.97. 

Now before the court is Hall's unopposed motion (#31), filed pursuant to 42 U.S.C. § 

Page 1 - OPINION AND ORDER 

Case 6:14-cv-01410-PK Document 32 Filed 06/15/16 Page 1 of 10
406(b), for approval of payment to his counsel out of his retroactive benefits award of 

$94,024.00 the amount of$l8,0001 less an administrative deduction to be assessed by the 

Commissioner pursuant to 42 U.S.C. § 406(d). I have considered Hall's motion and all of the 

evidence in the record. For the reasons set foiih below, Hall's motion is granted, and payment to 

Hall's counsel of attorney fees in the amount of $17,714.21 (less an administrative deduction to 

be assessed by the Commissioner pursuant to 42 U.S.C. § 406(d)) is approved. 

ANALYSIS 

Pursuant to 42 U.S.C. § 406(b), Hall's counsel seeks the comi's approval of payment to 

her of attorney fees out of Hall's retroactive benefits award in the amount of$18,000.00. This 

amount reflects a $1,114.03 deduction from the 25% contingency fee to which Hall's counsel is 

entitled pursuant to her fee agreement with Hall (which fee counsel asse1is she has not yet 

received), but does not reflect any deduction from the contingency amount pursuant to 42 U.S.C. 

§ 406( d). Section 406(b) provides, in relevant part, as follows: 

Whenever a comi renders a judgment favorable to a claimant under this 

subchapter who was represented before the comi by an attorney, the court may 

determine and allow as pmi 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. ... 

42 U.S.C. § 406(b)(l)(A). By contrast with fees awarded pursuant to the EAJA, a fee-shifting 

statute, Section 406(b) fees are paid out of the retroactive benefits awarded to the successful 

Social Security claimant. See id Counsel representing Social Security claimants may not seek 

compensation from their clients for trial litigation other than through a Section 406(b) fee. See 

1 This amount represents 25% of the retroactive benefits award ($23,506.00) less the 

amount of the EAJA fees awarded ($4,391.97) and less an additional voluntary reduction (in the 

amount of$1,114.03) self-imposed by Hall's counsel. 

Page 2 - OPINION AND ORDER 

Case 6:14-cv-01410-PK Document 32 Filed 06/15/16 Page 2 of 10
id. In the event that both an EAJA fee is awarded and a Section 406(b) fee payment is approved, 

the claimant's counsel must refund to the claimant the amount of the smaller of the two 

payments. See Gisbrecht v. Barnhart, 535 U.S. 789, 796 (2002). Any Section 406(b) fee must 

be approved by the court following analysis of its reasonableness before it may be paid. See 42 

U.S.C. § 406(b)(l)(A). 

In Gisbrecht, the Supreme Court established that the reasonableness of a Section 406(b) 

contingency fee is not to be dete1mined primarily by reference to the lodestar method which 

governs fee-shifting disputes. See Gisbrecht, 535 U.S. at 801-802. Instead, to the extent 

contingency fee agreements do not provide for fees exceeding 25% of claimants' retroactive 

benefits, their te1ms are fully enforceable subject only to the court's review "to assure that they 

yield reasonable results in particular cases." Id. at 807. It is the claimant's counsel's burden to 

establish the reasonableness of the calculated fee. See id. 

In assessing the reasonableness of a Section 406(b) fee, courts look first to the 

contingency fee agreement itself, and then may reduce the resulting award "based on the 

character of the representation and the results the representative achieved." Id. at 808. The 

claimant's counsel bears the burden to establish the reasonableness of a Section 496(b) fee. See 

id. at 807. 

The Gisbrecht court provided, as examples of circumstances that could justify a 

downward reduction, situations in which the attorney was responsible for delay or in which "the 

benefits are large in comparison to the amount of time counsel spent on the case." Id. The court 

specified that "the court may require the claimant's attorney to submit, not as a basis for satellite 

litigation, but as an aid to the comi's assessment of the reasonableness of the fee yielded by the 

Page 3 - OPINION AND ORDER 

Case 6:14-cv-01410-PK Document 32 Filed 06/15/16 Page 3 of 10
fee agreement, a record of the hours spent representing the claimant and a statement of the 

lawyer's no1mal hourly billing charge for noncontingent-fee cases." Id., citing Rodriquez v. 

Bowen, 865 F.2d 739, 741 (6th Cir. 1989) (en bane). 

The Ninth Circuit's en bane decision in Crawford v. Astrue, 586 F.3d 1142 (9th Cir. 

2009), applied the Gisbrecht reasonableness analysis. The Crmvford cou1i affirmed Gisbrecht's 

holding that it is error to determine the reasonableness of a Section 406(b) fee by the metric of 

the lodestar method. See Crm1ford, 586 F.3d at 1150. 

Here, Hall entered into a contingency fee agreement with his counsel providing for 

payment of25% of his retroactive benefits to his attorney in the event of a favorable outcome 

following federal litigation. It therefore now falls to the court to assess whether $18,000, or 

23.82% of the retroactive benefits award less the EAJA fees previously awarded, constitutes 

reasonable compensation for Hall's counsel under the various factors discussed in Gisbrecht and 

Crmtford. 

A. Character of the Representation 

1. Quality of Attorney Performance 

As Gisbrecht and Crmtford both make clear, substandard performance by a legal 

representative warrants a reduction in a Section 406(b) fee award. See Gisbrecht, 535 U.S. at 

808; Cra11ford, 586 F.3d at 1151. Here, there is no indication in the record that Hall's counsel's 

representation of her client was in any way substandard. No reduction in the Section 406(b) fee 

is therefore warranted due to the character of counsel's legal representation. 

2. Dilatoriness 

A Section 406(b) award may properly be reduced if any delay in proceedings is properly 

Page 4 - OPINION AND ORDER 

Case 6:14-cv-01410-PK Document 32 Filed 06/15/16 Page 4 of 10
attributable to the claimant's counsel. See Gisbrecht, 535 U.S. at 808; Crawford, 586 F.3d at 

1151. Here, Hall's counsel sought and received one 21-day extension of the deadline for filing 

the opening brief due to a "backlog in [her) caseload" resulting from a combination of a large 

number of active cases and counsel's recove1y from ankle surge1y and one 4·day extension of the 

deadline for filing a reply memorandum due to a further "backlog in [her] caseload" resulting 

from the large number of active cases she was litigating at the time. Although there was no 

impropriety whatsoever in seeking extension of court deadlines in order to accommodate 

challenges in counsel's workload management or counsel's recovery from surgery, such 

extensions did occasion delay in the final outcome of review proceedings for which the attorney 

was squarely responsible, warranting a commensurate reduction under Gisbrecht. Moreover, 

although there was similarly nothing unreasonable about either of the requests for extension, I 

find under the comt's inherent authority and obligation to evaluate the reasonableness of fee 

awards, see Gisbrecht, 535 U.S. at 808, see also Crawford, 586 F.3d at 1149, that it would 

neve1theless be umeasonable for Hall's attorney to benefit financially at Hall's expense from any 

delay, of no matter what duration, caused by the attorney's difficulties in managing the workload 

she elected to bear and/or by matters personal to the attorney.2 

But for the attorney-attributable delay, Hall would have had 25 fewer days of past-due 

benefits, and would have received benefits for those 25 days without a deduction for attorney 

fees. Those 25 days of benefits would have been compensated at a monthly rate of$1,714, and 

thus would have been compensated in the total amount of $1,199.80, 23.82 percent of which is 

2 Where extension is sought due to the particular complexity of a case or for the purpose 

of facilitating settlement negotiations, attorney-requested extensions of time do not warrant 

reduction under Gisbrecht. However, those factors are not at issue here. 

Page 5 - OPINION AND ORDER 

Case 6:14-cv-01410-PK Document 32 Filed 06/15/16 Page 5 of 10
$285.79. The requested Section 406(b) fee is therefore reduced by $285.79 on the basis of 

attorney delay. 

B. Proportionality of Benefits Awarded to Attorney Time Spent 

The Gisbrecht and Crawford courts both held that a Section 406(b) award could be 

reduced if the benefits awarded to the Social Security claimant were out ofpropmiion to the time 

spent by the claimant's attorney. See Gisbrecht, 535 U.S. at 808; Crawford, 586 F.3d at 1151. 

Although neither court's opinion provides significant guidance as to how to measure such 

disproportionality, Gisbrecht established, see 535 U.S. at 808, and Crawford affomed, see 586 

F.3d at 1151, that records of attorney time expended and a statement of the attorney's normal 

hourly fee in non-contingent matters could be considered in this connection, but only as an "aid" 

in assessing the reasonableness of the award provided in the contingency fee agreement. 

As noted above, the Gisbrecht and Crmiford courts made clear that the lodestar method 

is an inappropriate metric for determining the proportionality of Section 406(b) compensation. 

See Gisbrecht, 535 U.S. at 801-802; Cra11ford, 586 F.3d at 1150. Indeed, considered in 

isolation, the product of the lodestar calculation can at best be of extremely limited utility in 

assessing the reasonableness of a contingency fee. The lodestar method of calculating fees is 

designed for use where it is intended that an attorney be compensated strictly for time expended 

rather than on the basis of results achieved, milestones reached, or any of the myriad other bases 

on which clients may permissibly compensate their legal representatives, and where the 

probability of nonpayment is both low and unrelated to the attorney's ultimate success or failure. 

By contrast, the method authorized under Section 406(b) is one designed to compensate attorneys 

commensurately with results achieved, and to take into account the risk of failure, in which case 

Page 6 - OPINION AND ORDER 

Case 6:14-cv-01410-PK Document 32 Filed 06/15/16 Page 6 of 10
no compensation is available. As a matter oflogic, the fact (standing alone) that a fee calculated 

according to the lodestar method differs from a fee calculated according to a contingency fee 

agreement is uninformative as to whether the contingency fee might be disproportionate. 

Approaching the question from first principles, it is clear that the disproportionality 

analysis can have nothing to do with the absolute amount of the Section 406(b) fee requested, 

since that fee is always a maximum of25% of the retroactive benefits award, and must instead 

necessarily address primarily the effective requested hourly rate that may be back-derived by 

dividing the putative contingency award by the number of hours spent in pursuing it. Although 

that effective requested hourly rate cannot usefully be directly compared to a reasonable hourly 

fee to dete1mine its propo1iionality, it is logically defensible to posit that an effective requested 

hourly rate is not dispropmiionately high if it is less than or equal to the product of a reasonable 

hourly rate for non-contingent matters and the reciprocal of the pre-litigation probability that 

litigation would lead to a favorable result, based on the particular facts presented in a given case.3 

That is, an effective requested hourly rate cannot be disproportionately high if it does not 

overcompensate an attorney for the risk that the attorney assumed at the time the representation 

was undertaken that the attorney would ultimately receive no compensation for his or her 

services. An attorney is not overcompensated for such risk if the pre-litigation expected value of 

the representation - the probability of a favorable result times the compensation that would be 

received in the event of a favorable result - does not exceed the product of the appropriate hourly 

3 Thus, if $100 were a reasonable hourly rate of compensation for non-contingent 

matters, an effective requested hourly rate would not be dispropoliionate in light of the risk a 

paiiicular contingency matter presented if, e.g., the probability of a favorable outcome was 25% 

(or a one in four chance) and the effective requested hourly rate did not exceed $400 (or four 

times the reasonable hourly rate). 

Page 7 - OPINION AND ORDER 

Case 6:14-cv-01410-PK Document 32 Filed 06/15/16 Page 7 of 10
rate and the expected number of hours required. 

In addition to giving cognizable effect to the Gisbrecht court's suggestion that an 

attorney's normal hourly rate could bear materially on the disproportionality analysis, see 

Gisbrecht, 535 U.S. at 808, and to the Crmiford court's suggestion that case-specific risk could 

be a material factor in assessing the reasonableness of a Section 406(b) fee, see Crmiford, 586 

F.3d at 1152-1153, measuring the relationship between a reasonable hourly fee for noncontingent matters and the effective requested hourly rate by reference to the case-specific risk of 

an unfavorable result has the benefit of suggesting a potentially useful metric for assessing 

proportionality: a contingency fee award is dispropmiionately high where it disproportionately 

overcompensates for the pre-litigation risk of an unfavorable result. I therefore assess the 

propmiionality of the fee requested in this action to the time expended in litigation by reference 

to this risk-assessment metric. 

Here, Hall's counsel offers evidence that she expended a total of 23 .15 hours in litigating 

Hall's petition for judicial review; this total includes time spent preparing the motion for EAJA 

fees but not time spent preparing the motion for Section 406(b) fees now before the court. 

Compensation for 23.15 hours work in the amount of$22,391.97 (the total amount of 

compensation Hall's counsel seeks under both the EAJA and Section 406(b)) in a noncontingency context would reflect an hourly rate of $967.26. Hall's counsel offers no evidence of 

her normal hourly rate, but I may take judicial notice that the Oregon State Bar Economic 

Surveys provide information as to rates prevalent in various Oregon legal communities in the 

years in which survey data are collected, that the legal services at issue here were performed by 

Kathryn Tassinari, a Eugene-based practitioner, in 2014, and 2015, that Tassinari has been a 

Page 8 - OPINION AND ORDER 

Case 6:14-cv-01410-PK Document 32 Filed 06/15/16 Page 8 of 10
member of the Oregon bar since 1980, that the most recent such survey issued in 2012 and 

provides information as to rates actually charged by Oregon attorneys in 2011, and that, 

according to the 2012 Economic Survey, the median hourly rate charged by Oregon attorneys 

with 21-30 years' experience in private practice in 2011 was $250.00. An appropriate method for 

adjusting the 2011 rates repo1ied in the 2012 Economic Survey for inflation to produce an 

estimate of the corresponding rates prevalent in the material legal community in 2014 and 2015, 

when Hall's petition for judicial review was litigated, is to multiply the 2011 rates by the federal 

Bureau of labor Statistics' reported consumer price index for urban consumers ("CPI-U") for the 

years in which the fees were incun-ed, and then to divide the resulting quotients by the reported 

CPI-U for 2011. I take judicial notice that the Bureau of labor Statistics has published a CPI-U 

for the Western states of227.485 for 2011, of240.215 for 2014, and of243.015 for 2015. 

Adjusting for inflation thus yields constructive reasonable average rates of$263.99 for 2014 and 

$267.07 for 2015. 

Because the back-derived rate for the contingency fee is $967.26, or approximately 3.7 

times the 2014 constructive reasonable hourly rate for non-contingency work and approximately 

3.6 times the 2014 constructive reasonable hourly rate for non-contingency work, the requested 

contingency fee can only can only be disproportionate if, at the time Tassinari unde1iook to 

represent Hall, the risk of an unfavorable outcome was clearly lower than approximately 72.5% 

(or, to put the same point in different tenns, the requested fee is disproportionate to the risk only 

if the pre-litigation probability of success on judicial review was clearly higher than 27.5%). I 

cannot find on the basis of the record here that the risk to Tassinari of an unfavorable outcome on 

judicial review of Hall's application was clearly lower than 72.5% at the time she unde1iook to 

Page 9 - OPINION AND ORDER 

Case 6:14-cv-01410-PK Document 32 Filed 06/15/16 Page 9 of 10
represent Hall. I therefore conclude that reduction is not wananted in connection with the 

proportionality factor, taking into account the case-specific risks and the appropriate normal 

hourly rate for non-contingent matters. 

C. Appropriate Fee 

For the foregoing reasons, I find that the contingency fee agreement in place between Hall 

and his counsel is within the statut01y limits provided in 29 U.S.C. § 406(b), and that the fee 

provided therein (less the reduction discussed above for attorney-caused delay) is reasonable. 

The motion for approval of Section 406(b) fees is therefore granted, and payment to Hall's 

counsel of$17,714.21 (less an administrative deduction to be assessed by the Commissioner 

pursuant to 42 U.S.C. § 406(d)) from Hall's retroactive fee award is approved. 

CONCLUSION 

For the reasons set forth above, the motion ( #31) for Section 406(b) attorney fees is 

granted, and payment to Hall's counsel of$17,714.21 (less an administrative deduction to be 

assessed by the Commissioner pursuant to 42 U.S.C. § 406(d)) from Hall's retroactive DIB award 

is approved. 

10'\ 

Dated this~h day of June, 2016. 

norable Paul Pap 

United States Magistrate Judge 

Page 10 - OPINION AND ORDER 

Case 6:14-cv-01410-PK Document 32 Filed 06/15/16 Page 10 of 10