Court Opinion

ID: 3171014
Source: CourtListenerOpinion
Date Created: 2016-01-20 21:01:00.321617+00
Date Added: 2024-06-11T11:57:05.341488
License: Public Domain

FILED
                            NOT FOR PUBLICATION
                                                                            JAN 20 2016
                     UNITED STATES COURT OF APPEALS                     MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

SANDRA E. LABOY                                  No. 14-15211

              Plaintiff - Appellant,             D.C. No. 2:11-cv-00596-RLH-
                                                 CWH
  v.

CAROLYN W. COLVIN, Acting                        MEMORANDUM*
Commissioner of Social Security

              Defendant - Appellee.

                    Appeal from the United States District Court
                             for the District of Nevada
                     Roger L. Hunt, District Judge, Presiding

                           Submitted December 11, 2015
                             San Francisco, California

Before: BYBEE and CHRISTEN, Circuit Judges, and CHEN, District Judge.**

       Real-party-in-interest Marc. V. Kalagian appeals the district court’s order

granting a reduced attorney’s fees award after he represented Sandra E. Laboy in

her claim for Social Security benefits. We have jurisdiction over this appeal

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
       **
             The Honorable Edward M. Chen, District Judge for the U.S. District
Court for the Northern District of California, sitting by designation.
pursuant to 28 U.S.C. § 1291. We review a district court’s award of attorney’s fees

pursuant to 42 U.S.C. § 406(b) for abuse of discretion. Crawford v. Astrue, 586

F.3d 1142, 1146-47 (9th Cir. 2009) (en banc). Having reviewed the record and the

parties’ briefs on appeal, we vacate the district court’s fee award and remand.

      The award of attorney’s fees in social security cases is governed by 42

U.S.C. § 406. 42 U.S.C. § 406(a) governs fees for the representation of a claimant

before the Social Security Administration (SSA), while 42 U.S.C. § 406(b) governs

fees for the representation of a claimant before the court. Each section imposes a

separate 25% cap on the amount that can be awarded to an attorney. Section

406(b) “limits only the amount of attorney’s fees awarded under § 406(b), not the

combined fees awarded under § 406(a) and § 406(b), to 25% of the claimant’s

past-due benefits.” Clark v. Astrue, 529 F.3d 1211, 1218 (9th Cir. 2008).

      In the appeal of the SSA’s denial of benefits to the district court, the parties

jointly stipulated to remand the case for a new hearing. On remand, the ALJ found

that Plaintiff was disabled. The Social Security Commissioner awarded

$112,657.00 in past benefits, and withheld 25% – $28,164.25 – for attorney’s fees.1

Kalagian’s contingent-fee agreement with Ms. Laboy tracks § 406(a) and (b) in

      1
       Plaintiff has filed an unopposed motion asking this court to take judicial
notice of the SSA’s letter on the withholding of past-due benefits for attorney’s
fees. We GRANT Plaintiff’s motion. See FED R. EVID. 201(b)(2).

                                           2                                     14-15211
providing for separate fee recovery for work before the agency and the court.

Under that agreement, for representation before the court, Kalagian was entitled to

25% of the past-due benefits awarded to Laboy. Kalagian moved for attorney’s

fees for work before the district court pursuant to 42 U.S.C. § 406(b), requesting

$20,000.00 (71% of the contract amount). The district court reduced the requested

fee award to $5,914.49, representing 21% of the contract fee, because only 21% of

the total hours was spent before the court as opposed to hours spent before the

agency.

      This 21% apportionment was an abuse of discretion because it was based on

the aggregate time spent before both the court and the agency, and the district court

assumed that the aggregate was subject to a single 25% limit. Under Clark, the

25% cap in § 406(b) applies only to fees for representation before the court. Such

fees are assessed independent of fees for work before the agency. Likewise, the

fee agreement also provided for separate fee awards for agency and court

representation.

      Accordingly, we vacate the district court’s award of attorney’s fees and

remand this case to the district court for reassessment of an appropriate fee. On

remand, the district court should only consider the time spent before the court in

awarding attorney’s fees under § 406(b), and should begin its analysis “by looking

                                          3                                     14-15211
first to the contingent-fee agreement, then testing it for reasonableness.” Gisbrecht

v. Barnhart, 535 U.S. 789, 808 (2002). In assessing the reasonableness of the fee

agreement, the district court should not start with the lodestar calculation, but

should instead consider “‘the character of the representation and the results the

representative achieved.’” Crawford, 586 F.3d at 1151 (quoting Gisbrecht, 535

U.S. at 808). The lower court may apply a downward adjustment in the event of

“substandard performance, delay, or benefits that are not in proportion to the time

spent on the case.” Crawford, 586 F.3d at 1151 (citing Gisbrecht, 535 U.S. at

808). The district court may also require counsel to submit a record of hours spent

and a statement of normal hourly billing charges, but a lodestar analysis should be

used only as an aid (and not a baseline) in assessing the reasonableness of the fee.

Id. If the district court reduces the requested fee award as unreasonable, it must

provide a “concise but clear explanation of its reasons for the fee award.”

Crawford, 586 F.3d at 1152 (internal quotations and citation omitted).

      REVERSED and REMANDED.

                                           4                                    14-15211