Court Opinion

ID: 816434
Source: CourtListenerOpinion
Date Created: 2013-01-31 17:12:29.053244+00
Date Added: 2024-06-11T12:39:24.516716
License: Public Domain

FILED
                                                     United States Court of Appeals
                        UNITED STATES COURT OF APPEALS       Tenth Circuit

                                 FOR THE TENTH CIRCUIT                  January 31, 2013

                                                                      Elisabeth A. Shumaker
                                                                          Clerk of Court
DONNIE RUSSELL,

               Plaintiff-Appellant,

v.                                                         No. 12-6185
                                                   (D.C. No. 5:09-CV-00887-M)
MICHAEL J. ASTRUE, Commissioner                           (W.D. Okla.)
of the Social Security Administration,

               Defendant-Appellee.

------------------------------

TROUTMAN & TROUTMAN, P.C.,

       Real-Party-in-Interest-Appellant.

                                 ORDER AND JUDGMENT*

Before HARTZ, EBEL, and GORSUCH, Circuit Judges.

       The law firm of Troutman and Troutman, P.C. (the Troutman firm), as real

party in interest, appeals from a district-court order awarding attorney fees in an

*
      After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of this
appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
amount less than it requested under 42 U.S.C. § 406(b). We review the award for an

abuse of discretion. See Hubbard v. Shalala, 12 F.3d 946, 947 (10th Cir. 1993),

abrogated on other grounds by Gisbrecht v. Barnhart, 535 U.S. 789 (2002); see also

McGraw v. Barnhart, 450 F.3d 493, 505 (10th Cir. 2006). Of course, we review

de novo any issues of law, such as questions of statutory interpretation. McGraw,

450 F.3d at 497. See generally Zinna v. Congrove, 680 F.3d 1236, 1239 (10th Cir.

2012). Under these standards, we affirm for substantially the reasons stated by the

district court, as explained below.

      The Troutman firm successfully challenged the initial denial of supplemental

security income benefits to their client, plaintiff Donnie Russell, securing a remand

for further administrative proceedings. The remand ultimately led to an award of

$68,736.40 in past-due benefits. Thereafter, the Troutman firm moved for approval

of a fee award under § 406(b), seeking 25% of the past-due benefits (i.e.,

$17,184.10), consistent with its contingent-fee agreement with Mr. Russell.

Although the statute allows for contingent-fee awards of up to 25% of past-due

benefits, it also “instructs courts to review for reasonableness fees yielded by

[contingent-fee] agreements.” Gisbrecht, 535 U.S. at 809. Exercising this duty, the

district court concluded that an award of $17,184.10 for the 28.1 hours of work done

by the Troutman firm would “not satisfy the statutory requirement of yielding a

reasonable result in this case.” App. at 109-10. Noting that the Supreme Court had

specifically directed that “‘[i]f the benefits are large in comparison to the amount of

                                          -2-
time counsel spent on the case, a downward adjustment [of counsel’s contingent fee]

is . . . in order,’” id. at 109 (quoting Gisbrecht, 535 U.S. at 808), the district court

explained:

       [U]pon the Court’s review of plaintiff’s attorney’s record of time
       expended representing the plaintiff, an award of the total requested fee
       would amount to $611.53 per hour. Counsel’s fee for non-contingent
       work is $275 per hour. The Court finds this comparison of fees
       unreasonable in this case. . . . Upon careful and thorough review of this
       matter, the Court finds considering the amount of time and effort
       expended by the lawyers in this case representing plaintiff, counsel’s
       motion for 406(b) attorney’s fees should be reduced.

App. at 110. The district court went on to award a fee “in the amount of $11,884.10,

the balance of past due benefits withheld by [the Social Security Administration]”

after subtraction of the $5,300 paid to separate counsel who represented Mr. Russell

in the administrative proceedings. Id.; see also id. at 91.

       The primary objection advanced by the Troutman firm is that the district court

did not follow the standard for § 406(b) fees outlined in Gisbrecht. We disagree.

The district court clearly followed the general directive in Gisbrecht to “look[] first

to the contingent-fee agreement, then test[] it for reasonableness.” 535 U.S. at 808.

But, the firm argues, in reducing the fee for reasonableness the district court “did not

base the reduction on the result achieved or the quality of the legal work in this

case,” neither of which considerations, the firm insists, would have pointed to a

reduction. Aplt. Opening Br. at 32. That may be so, but as the district court’s

quotation from Gisbrecht above reflects, a downward adjustment is also in order,

notwithstanding very favorable results, when the recovery of past-due benefits for the

                                            -3-
claimant is “large in comparison to the amount of time counsel spent on the case.”

Gisbrecht, 535 U.S. at 808 (emphasis added). And that was the operative rationale

here.

        In this same vein, the Troutman firm contends that the district court’s

consideration of hours worked and normal hourly rates reflects an improper elevation

of lodestar analysis over the contingent-fee agreement, contrary to Gisbrecht. But

Gisbrecht held only that the § 406(b) determination must begin with the contingent

fee, it did not hold that considerations relevant to the lodestar, such as hours and

hourly rate, were excluded from the subsequent test for reasonableness. Indeed, the

Court specifically noted that “a record of the hours spent representing the claimant

and a statement of the lawyer’s normal hourly billing charge for noncontingent-fee

cases” may be required “as an aid to the [district] court’s assessment of the

reasonableness of the fee yielded by the fee agreement.” Gisbrecht, 535 U.S. at 808.

        The Troutman firm also contends that the district court’s analysis contravened

this court’s holding in Wrenn v. Astrue, 525 F.3d 931 (10th Cir. 2008). In Wrenn we

held that “the 25% limitation on fees for court representation found in § 406(b) is not

itself limited by the amount of fees awarded by the Commissioner” under § 406(a)

for representation before the agency. Id. at 937. In other words, the 25% cap does

not “limit representative fees before both the agency and court to an aggregate 25%

of past-due benefits.” Id. at 936.

                                          -4-
      When past-due benefits were awarded to Mr. Russell, the Commissioner

withheld 25% ($17,186.10) as a source for fee payments under § 406. Counsel

representing Mr. Russell at the agency level was paid $5,300 out of the withheld

funds. As noted earlier, after the district court determined that the contingent fee

sought by the Troutman firm was unreasonably excessive, the court concluded that

the remaining amount of the withheld funds reflected reasonable compensation for

the work done in the case. That conclusion does not contravene Wrenn. The district

court did not hold, contrary to Wrenn, that it was required to reduce the Troutman

firm’s award so that the aggregate of court and agency fees would not exceed 25% of

the past-due benefits. If that had been the court’s understanding, it would have begun

its analysis with the $11,884.10 that remained under the 25% cap. Instead, it

properly used the full $17,186.10 as the baseline for its Gisbrecht analysis and

reduced that figure after concluding that it was unreasonably large in light of the time

spent by the Troutman firm on the case.

      To be sure, after rejecting the contingent fee as excessive, the district court

made use of the remaining withheld funds as a ready concrete alternative. But we

know of no prohibition on doing this, especially when such funds fall within an

otherwise reasonable range for the fee award in a particular case. And that is true

here. What constitutes a reasonable fee is a judgment that “ordinarily qualif[ies] for

highly respectful review,” Gisbrecht, 535 U.S. at 808—a deference captured in our

abuse-of-discretion standard, under which we reverse only if we have “a definite and

                                          -5-
firm conviction that the [district] court made a clear error of judgment or exceeded

the bounds of permissible choice in the circumstances,” Cummins v. Campbell,

44 F.3d 847, 854 (10th Cir. 1994) (internal quotation marks omitted). The fee award

here, which falls in a middle ground between the request of $611 per hour and

counsel’s normal rate of $275 per hour, is not beyond the bounds of reasonable

judgment or permissible choice. We therefore affirm the award.

      We note that a fair amount of briefing on appeal was devoted to matters that

have proved immaterial to our disposition. A collateral dispute arose over the

Commissioner’s citation to two unpublished decisions to support the result here.

See Gordon v. Astrue, 361 F. App’x 933 (10th Cir. 2010); Scherffius v. Astrue,

296 F. App’x 616 (10th Cir. 2008). The Troutman firm contends that the

Commissioner waived its right to rely on these cases because they were not cited

below. But the Troutman firm refers to no authority, nor are we aware of any,

holding that an appellee may not offer additional case law to defend the district

court’s stated rationale for a decision in its favor. In any event, our disposition

stands on the strength of its own rationale, without any need to rely on the persuasive

value of the unpublished decisions cited by the Commissioner.

      The Troutman firm has also argued extensively for adoption of the Ninth

Circuit’s interpretation of Gisbrecht in Crawford v. Astrue, 586 F.3d 1142 (9th Cir.

2009) (en banc). In our view, that decision does not offer any particularly useful

guidance here. The Crawford majority held that Gisbrecht is violated when a fee

                                          -6-
analysis does not begin with the contingent-fee agreement but, rather, proceeds from

a lodestar baseline and asks whether an upward adjustment or enhancement of the

lodestar has been justified by counsel. See Crawford, 586 F.3d at 1149-51. The

district court in the case before us did not proceed in such fashion. And as for the

particular fee awards made in Crawford, another circuit’s approval of different fee

amounts under different circumstances does not alter our conclusion that the fee

awarded in this case was within the range of permissible outcomes to which we

properly defer under the governing standard of review.

      The judgment of the district court is affirmed.

                                               Entered for the Court

                                               Harris L Hartz
                                               Circuit Judge

                                         -7-