Grayson v. Berryhill

          OPINION AND ORDER TO GRANT PLAINTIFF'S MOTION FOR ATTORNEY FEES

          GERALD B. COHN, UNITED STATES MAGISTRATE JUDGE

         Before the Court are Plaintiff's Motion for Attorney Fees pursuant to 42 U.S.C. § 406(b). (Doc. 33). In Plaintiff's Motion, Plaintiff's counsel seeks approval of an attorney fee award of $15, 000.00 pursuant to 42 U.S.C. § 406(b) and the terms of the contingency fee contract between Plaintiff and counsel. (Doc. 33).

         I. STANDARD OF REVIEW

         Unlike fees awarded under other statutes such as the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412, fees under 42 U.S.C. § 406(b) are paid from the claimant's benefits, rather than from agency funds, based on a contract between the claimant and the claimant's attorney. Pursuant to 42 U.S.C. § 406(b), a district court must independently assess the reasonableness of the terms in contingent-fee agreements. Gisbrecht v. Barnhart, 535 U.S. 789, 808 (2002). § 406(b) “calls for court review of such arrangements as an independent check, to assure that they yield reasonable results in particular cases, ” and to guard against windfalls for lawyers. Id. at 807-08. Decisions on motions for § 406(b) fees “are committed to the district court's sound discretion.” McGraw, 450 F.3d at 505. § 406(b) contemplates awarding a reasonable fee only for work performed before the court, not for work performed before the agency. See McGraw, 450 F.3d at 498. Thus, in considering the reasonableness of a § 406(b) request, the court should not consider time enumerated for any work that was performed before the administrative agency. Additionally, where a plaintiff is also awarded attorney fees under the EAJA, plaintiff's attorney must refund the lesser of the two fees to plaintiff. See Gisbrecht, 535 U.S. at 796; Weakley v. Bowen, 803 F.2d 575, 580 (10th Cir. 1986).

         II. BACKGROUND AND COMMISSIONER RESPONSE

         In this case, the Commissioner issued to Plaintiff a Notice of Award on October 1, 2017, showing Plaintiff and his family were entitled to past due benefits, of which the Commissioner withheld 25 percent, or a total of $24, 637.00 ($19, 120.00 from Plaintiff's past due benefits and $5, 517.00 from his family's past due benefits), for the payment of attorney fees (see Doc. 33-2 at 1, 3). Here, counsel requests $15, 000.00 in fees for 20.1 hours of attorney work and 5.8 hours of paralegal work before the court (see Doc. 33 at 2, 6; Doc. 33-4). Although Plaintiff's motion indicates 5.2 paralegal hours (see Doc. 33 at 6), counsel's billing timesheets indicate a total of 5.8 paralegal hours were expended in litigating this matter (see Doc. 25-1; Doc. 33-4). In her response, the Commissioner notes she is “not a party to § 406(b) fee awards and generally takes no position on such petitions … but rather she defers to the Court's sound discretion as to the reasonableness of the fee award.” (Doc. 35).

         However, the Commissioner states in calculating the effective hourly rate for the court's reasonableness consideration, Plaintiff applies a multiplier to the paralegal fees (see Doc. 33 at 6- 7). Commissioner states Plaintiff cites no authority for doing so and asserts the court should award paralegal fees only at paralegal market rates. See, e.g., La Plant v. Berryhill, No. C14-1143-JCC, 2017 WL 823289, at *3 (W.D. Wash. Mar. 2, 2017) (unpublished) (“As to the paralegal hours, however, the Court does not find it appropriate to apply the . . . multiplier.” (citing Chandler v. Sec'y of Dep't of Health & Human Servs., 792 F.2d 70, 73 (6th Cir. 1986) (awarding paralegal fees under § 406(b) but only at paralegal rates)). Here, Plaintiff's billing timesheets and EAJA filings indicate counsel's firm billed paralegal work at $100 per hour from 2011 through 2015, and at $120 per hour beginning in 2016 (see Doc. 33-4; Doc. 25 at 8-9). This calculates to a total of $680.00 for paralegal work (0.8 paralegal hours billed in 2015 at the rate of $100 per hour and 5 paralegal hours billed in 2016 and 2017 at the rate of $120 per hour) (see Doc. 25-1; Doc. 33-4). Thus, for purposes of determining the reasonableness of the fees sought for the 20.1 hours of attorney work in this case, Commissioner argues the court should reduce the total amount of § 406(b) fees to $680.00 in paralegal fees (versus the $1, 404.00 suggested by Plaintiff's counsel when improperly using a multiplier). Less the $680.00 (for the 5.8 hours of paralegal work billed at the market rate), counsel is requesting $14, 320.00 in § 406(b) fees for 20.1 hours of attorney work. Thus, counsel is effectively requesting attorney fees at the rate of $712.44 per hour.

         III. ANALYSIS

         The court located few social security disability cases analyzing paralegal hours within attorney fee awards. A district court in Colorado found:

To determine a reasonable fee request, a court must begin by calculating the “lodestar amount.” Robinson v. City of Edmond, 160 F.3d 1275, 1281 (10th Cir. 1998). The lodestar amount is the “number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.” Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). With respect to assessing the hours claimed, the Supreme Court has found that certain tasks are non-compensable because they are “purely clerical or secretarial tasks [which] should not be billed at a paralegal rate, regardless of who performs them.” Missouri v. Jenkins by Agyei, 491 U.S. 274, 288 n.10 (1989).

Here, plaintiff seeks an award of fees for 0.2 hours related to service of process. Such time is not compensable. See Jenkins, 491 U.S. at 288 n.10. The Court finds that the remainder of the hours claimed are reasonable. In addition, the Court notes that Mr. Seckar undertook a substantial risk of loss in connection with the case, devoted considerable time and effort in presenting plaintiff's position, and obtained a favorable result for plaintiff.

Valenzuela v. Colvin, 2013 WL 1786501, at *2-3 (D. Colo. Apr. 25, 2013). In this case, Plaintiff's counsel submitted billing timesheets indicating clerical time expended, but counsel did not request attorney fees for clerical hours. See Doc. 33-4. Plaintiff's counsel solely requested attorney fees for paralegal and attorney time spent litigating the case. See id. In a district court in Oregon, the court found:

In those cases that have dealt with the issue of paralegal time, some have excluded the time completely; see Roark v. Barnhart, 221 F.Supp.2d 1020, 1026 (W.D. Mo. 2002); and others have considered paralegal time in assessing the overall reasonableness of the fee request. See Siraco v. Astrue, 806 F.Supp.2d 272, 278-79 (D. Me. 2011) (noting that the question is not whether paralegal time is compensable or what multiplier for paralegal time is appropriate, but whether the fee is reasonable in light of the legal services provided); Crawford v. Astrue, 586 F.3d 1142, 1151-53 (9th Cir. 2009) (repeatedly referencing paralegal time, but nowhere stating how paralegal services should be accounted for, and discouraging a lodestar based approach). This court adopts the approach set forth in Siraco, whereby the results achieved are compared with the services provided to reach a reasonable fee. Indeed, a discussion of an appropriate paralegal fee versus attorney fee creates the risk that this court will overly rely on a lodestar approach when the focus should be on the contingent-fee agreement, adjusted for reasonableness.

Here, the court concludes that the requested fee is unreasonable. This is driven by two primary factors. The first is that the case was not particularly complex or time consuming and the second is that the retroactive benefits recovered were quite large. The combination of these two factors results in a windfall. In short, “the benefits are large in comparison to the amount of time counsel [and paralegal] spent on the case [and] a downward adjustment is ... in order.” Gisbrecht, 535 U.S. at 808. While giving primacy to the ...