2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 HERNANDO P.,1 Case No.: 20cv875-MSB

12 Plaintiff,

ORDER GRANTING MOTION FOR FEES

13 v. PURSUANT TO 28 U.S.C. § 406(b)(1) [ECF NO. 18] 14 MARTIN O’MALLEY,2 15 Defendant. 16 17 On June 10, 2024, Plaintiff’s attorneys, Sherianne Laba and Karl E. Osterhout, of 18 the Law Offices of Osterhout Berger Daley, LLC, filed a “Motion and Brief in Support for 19 Fees Pursuant to 28 U.S.C. § 406(b)(1)”3 in which they request an order granting 20 attorneys’ fees in the amount of $32,657.48. (ECF No. 18, hereinafter “Motion.”) For 21

22 1 Under Civil Local Rule 7.1(e)(6)(b), “[o]pinions by the Court in [Social Security cases under 42 U.S.C. § 23 405(g)] will refer to any non-government parties by using only their first name and last initial.” 2 Martin O’Malley became the Commissioner of Social Security on December 20, 2023. See SSA 24 Commissioner, https://www.ssa.gov/agency/commissioner/ (last visited on July 11, 2024). 25 Accordingly, Martin O’Malley is substituted as the Defendant in this lawsuit. See Fed. R. Civ. P. 25(d) (“An action does not abate when a public officer who is a party in an official capacity dies, resigns, or 26 otherwise ceases to hold office while the action is pending. The officer’s successor is automatically substituted as a party”). 27 3 Plaintiff’s Motion refers to sections 206(b) and 406(b). The Court applies 28 U.S.C. § 406(b)(1), which 2 in the amount of $32,657.48. Further, the Court ORDERS Plaintiff’s counsel to refund 3 Plaintiff for the $9,000.00 Equal Access to Justice Act (“EAJA”) fee that was previously 4 awarded. 5 I. BACKGROUND 6 On May 11, 2020, Plaintiff Hernando P. (“Plaintiff”) initiated this action against 7 Defendant Commissioner of Social Security (“Defendant”), seeking judicial review of the 8 denial of his application for disability insurance benefits under 42 U.S.C. § 405(g). (ECF 9 No. 1.) On October 8, 2020, Defendant filed the Administrative Record. (ECF No. 8.) 10 Pursuant to the Court’s Scheduling Order, on March 19, 2021, the parties filed a “Joint 11 Motion for Judicial Review.” (ECF Nos. 9, 11.) On September 3, 2021, the Court 12 reversed the decision of the Commissioner and remanded the matter to the Social 13 Security Administration (“SSA”) for further administrative proceedings. (ECF No. 12.) 14 On December 2, 2021, the parties filed a “Joint Motion for Attorney Fees Under the 15 Equal Access to Justice Act,” requesting the Court’s approval of attorneys’ fees and costs 16 totaling $9,400.00. (ECF No. 13.) The following day, the Court granted the Joint Motion, 17 ordering attorneys’ fees in the amount of $9,000.00 under the EAJA, 28 U.S.C. § 2412(d), 18 and costs in the amount of $400 under 28 U.S.C. § 1920. (ECF No. 14.) 19 On June 10, 2024, Plaintiff’s attorneys filed the instant Motion seeking $32,657.48 20 in attorneys’ fees. (ECF No. 18.) In support, Plaintiff’s attorneys explain that Plaintiff 21 prevailed on remand and the SSA awarded him $170,629.90 in past-due Title II benefits 22 for May 2017 through June 2023. (ECF No. 18 at 2; ECF No. 18-1 at 1.) The 23 accompanying notice from the SSA states: “We withheld $42,657.48 (25%) for possible 24 direct payment of any fees authorized by either the agency, the court, or both.” (ECF 25 No. 18-1 at 1.) Plaintiff’s attorneys seek a fee award of $32,657.48 pursuant to a 26 representation agreement dated April 30, 2020, in which Plaintiff agreed to pay counsel

27 “25% of [] past due benefits” upon a successful appeal. (ECF No. 18-3). On June 21, 2 that “the Court direct Plaintiff’s counsel to reimburse Plaintiff any fees they previously 3 received” under the EAJA. (ECF No. 20 at 2–3.) On June 26, 2024, Plaintiff’s attorneys 4 informed the Court they would not be filing a reply brief. (ECF No. 22.) 5 II. LEGAL STANDARD 6 Pursuant to Section 406(b) of the Social Security Act, a court that has rendered a 7 judgment in favor of a Social Security disability insurance (“SSDI”) claimant who was 8 represented by an attorney may award attorneys’ fees in a “reasonable” amount, not to 9 exceed twenty-five percent4 of the total past-due benefits awarded to the claimant. 42 10 U.S.C. § 406(b)(1)(A); Crawford v. Astrue, 586 F.3d 1142, 1147 (9th Cir. 2009). District 11 courts have an independent duty to ensure that a § 406(b) contingency fee is 12 “reasonable.” Id. at 1149; see also Gisbrecht v. Barnhart, 535 U.S. 789, 807 (2002). The 13 United States Supreme Court has explained: 14 [Section] 406(b) does not displace contingent-fee agreements as the primary means by which fees are set for successfully representing Social 15 Security benefits claimants in court. Rather, § 406(b) calls for court review 16 of such arrangements as an independent check, to assure that they yield reasonable results in particular cases. Congress has provided one 17 boundary line: Agreements are unenforceable to the extent that they 18 provide for fees exceeding 25 percent of the past-due benefits. Within the 25 percent boundary . . . the attorney for the successful claimant must 19 show that the fee sought is reasonable for the services rendered. 20 Gisbrecht, 535 U.S. at 807 (internal citation and footnotes omitted, emphasis added). In 21 evaluating the reasonableness of a fee request under § 406(b), district courts should 22 consider the character of the representation and the results achieved. Id. at 808; see 23 also Crawford, 586 F.3d at 1151. 24

25 26 4 The Court notes that the twenty-five percent cap set forth in § 406(b)(1)(A) applies only to fees for representation before federal court and not to aggregate fees awarded for representation before both 27 the court and the SSA. Culbertson v. Berryhill, 586 U.S. 53, 54 (2019); see also Ricardo A. v. Saul, Case 2 performance was substandard; (2) whether counsel engaged in dilatory conduct; and (3) 3 whether the requested fees were excessively large in relation to the benefits achieved, 4 i.e., whether the requested fee would result in a “windfall” to the attorney. Crawford, 5 586 F.3d at 1151–52. With respect to the last factor, the Ninth Circuit has noted that 6 counsel in Social Security cases assume significant risk in accepting these cases, 7 including the risks that no benefits will be awarded or that there will be a long court or 8 administrative delay to resolve the case. Id. at 1152. SSDI attorneys’ fees under § 9 406(b) are paid by the claimant out of the past-due benefits awarded; the losing party is 10 not responsible for payment. Gisbrecht, 535 U.S. at 802; Crawford, 586 F.3d at 1147. 11 Attorneys are permitted to seek recovery under both the EAJA and § 406(b) and to keep 12 the larger fee, but they must refund the smaller fee to the claimant. Gisbrecht, 535 U.S. 13 at 796; Parrish v. Comm’r Soc. Sec. Admin., 698 F.3d 1215, 1218 (9th Cir. 2012). 14 III. DISCUSSION 15 The “Contingent Fee Agreement” entered into between Plaintiff and his counsel, 16 the Law Offices of Osterhout Berger Disability Law, LLC,5 provides that if a federal 17 appeal is successful and Plaintiff is awarded benefits, Plaintiff’s counsel will be paid a 18 maximum of twenty-five percent of past-due benefits awarded to Plaintiff. (ECF No. 18- 19 3.) Because the agreement is within the statutory ceiling, the Court looks to the 20 character of the representation and the results achieved to determine whether it is 21 reasonable. See 42 U.S.C. § 406(b)(1)(A); Crawford, 586 F.3d at 1145. On remand, the 22 Commissioner awarded Plaintiff $170,629.90 in past-due benefits and withheld 23 $42,657.48, or twenty-five percent, for “possible direct payment of any fees.” (ECF No. 24 18-1 at 1.) Plaintiff’s attorneys seek $32,657.48 in fees,6 which represents 25

26 5 The name of the law firm is now “Osterhout Berger Daley, LLC.” (See, e.g., ECF No. 18.) 27 6 Because Plaintiff was previously awarded an EAJA fee, Plaintiff’s attorneys’ request is for $10,000 less 2 18 at 5.) 3 Under the first two Crawford factors, there is no suggestion that Plaintiff’s 4 counsel provided substandard representation or delayed litigation. Crawford, 586 F.3d 5 at 1151–52. Plaintiff’s counsel, in a timely and efficient matter, achieved remand for 6 Plaintiff and secured a highly favorable decision on remand, including a sizeable award 7 of past-due benefits. (ECF No. 18 at 4; ECF No. 18-1 at 1.) Additionally, assuming 8 continued disability until age sixty-seven and no benefit increases, Plaintiff’s attorneys 9 estimate Plaintiff’s future benefits award will be approximately $100,000. (ECF No. 18 10 at 4.) Adding the approximate past-due benefits ($170,000) and future benefits 11 ($100,000), Plaintiff’s attorneys contend the total value of this decision to Plaintiff is 12 approximately $270,000. (Id.) Thus, there is no evidence to indicate the requested fee 13 amount should be reduced for substandard performance or undue delay. 14 When considering the third Crawford factor, the Court must consider whether the 15 requested fees are excessively large in relation to the benefits achieved. See Crawford, 16 586 F.3d at 1151–52. Plaintiff’s attorneys state they “expended 50.0 hours on behalf of 17 Plaintiff,” and provide an itemization of those hours from March 2020 to November 18 2021. (ECF No. 18 at 6; ECF No. 18-2 at 1.) Dividing counsel’s requested fees by the 19 number of hours expended results in an effective hourly rate of $653.15. (Id.) This 20 hourly rate falls within the range of hourly rates awarded in other Social Security cases. 21 See, e.g., Elsa M. P. v. Kijakazi, Case No. 5:19-cv-01698-JC, 2021 WL 4497930, at *3 (C.D. 22 Cal. July 14, 2021) (finding that a fee award of $12,000 for 14.65 hours of counsel and 23 paralegal work, or a de facto hourly rate of $819.11, was reasonable); Reddick v. 24 Berryhill, Case No.: 16-cv-29-BTM-BLM, 2019 WL 2330895, at *2 (S.D. Cal. May 30, 2019) 25 (finding, on reconsideration, that a fee award of $43,000 for 21.6 hours of work, or a de 26 facto hourly rate of $1,990.74, was reasonable); Thomas v. Colvin, No. 1:11-cv-01291-

27 SKO, 2015 WL 1529331, at *2-3 (E.D. Cal. Apr. 3, 2015) (finding that a fee award of 2 Furthermore, courts recognize that “a reasonableness determination on a simple 3 hourly rate basis is inappropriate when an attorney is working pursuant to a reasonable 4 contingency contract for which there runs a substantial risk of loss.” Ayersman v. 5 Berryhill, Case No.: 17-cv-1121-WQH-JMA, 2021 WL 37717, at *2 (S.D. Cal. Jan. 5, 2021) 6 (internal quotation marks and citations omitted); see also Moreno v. Berryhill, No. CV 7 13-8492-PLA, 2018 WL 3490777, at *3 (C.D. Cal. July 19, 2018) (“Counsel assumed the 8 risk of nonpayment inherent in a contingency agreement, [and] the fee does not exceed 9 . . . the 25 percent statutory cap.”). Following Gisbrecht, “district courts have been 10 deferential to the terms of contingency contracts in Section 406(b) cases, recognizing 11 that the resulting de facto hourly rates typically exceed those for non-contingency fee 12 arrangements.” Daniel v. Astrue, No. EDCV 04-01188-MAN, 2009 WL 1941632, at *2 13 (C.D. Cal. July 2, 2009) (internal citations omitted). Here, Plaintiff’s attorneys assumed a 14 substantial risk of non-payment by agreeing to be paid on a contingency basis, and 15 counsel’s work ultimately resulted in a highly favorable result for Plaintiff, who raises no 16 opposition to the fee request. (See generally Docket.) The Court therefore concludes 17 that Plaintiff’s attorneys’ request for fees amounting to $32,657.48 is reasonable. See 18 Gisbrecht, 535 U.S. at 807–09. 19 Finally, while attorneys may seek recovery under both the EAJA and § 406(b) and 20 may keep the larger of the two, they must refund the smaller fee to the claimant. 21 Gisbrecht, 535 U.S. at 796. Because Plaintiff’s attorneys were previously awarded 22 $9,000.00 in fees pursuant to the EAJA, this amount must be refunded to Plaintiff. (ECF 23 No. 14.) 24 / / / 25 / / / 26

27 1 2 IV. CONCLUSION 3 For the reasons set forth above, the Court GRANTS Plaintiff’s attorneys’ Motion 4 || [ECF No. 18] and awards the Law Offices of Osterhout Berger Daley, LLC attorneys’ fees 5 |/in the amount of $32,657.48. The Court further ORDERS the Law Offices of Osterhout 6 || Berger Daley, LLC to reimburse Plaintiff in the amount of $9,000.00 for the EAJA fees 7 || previously awarded by this Court. 8 IT IS SO ORDERED. 9 || Dated: July 11, 2024 _ = _ 2 FF u Honorable Michael S. Berg United States Magistrate Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28