ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S COUNSEL'S MOTION FOR AWARD OF ATTORNEY'S FEES
Docket No. 33.
EDWARD M. CHEN, District Judge.
Plaintiff Jerry D. Goucher, Jr. initiated this social security case in 2014. In July 2015, the Court granted Mr. Goucher's motion for summary judgment and denied the government's. On remand to the Social Security Administration ("SSA"), Mr. Goucher prevailed and was awarded disability benefits, including but not limited to past-due benefits.
Currently pending before the Court is a motion filed by Mr. Goucher's law firm, Sackett & Associates ("Sackett"), in which it seeks attorney's fees pursuant to 42 U.S.C. § 406(b). Sackett acknowledges that any award under § 406(b) would be offset by the $6,000 EAJA award that the Court previously awarded pursuant to stipulation between the parties (i.e., Sackett would get the § 406(b) fee award and Mr. Goucher would get the $6,000 EAJA fee award).
Because, ultimately, any § 406(b) fee award will be paid out of Mr. Goucher's pocket, Sackett served a copy of the fee motion on Mr. Goucher. See Docket No. 33-2 (proof of service). Mr. Goucher has not filed any opposition to Sackett's fee request. The government has filed a response in which it states that, as a formal matter, it "takes no position on the reasonableness of the [fee] request." Resp. at 5.
Shortly before the hearing on the matter, Sackett asked the Court to rule on its motion for fees without oral argument. The Court granted that request and now
FACTUAL & PROCEDURAL BACKGROUND
As indicated above, Mr. Goucher prevailed in his lawsuit against the SSA, obtaining an order from this Court remanding to the agency for further proceedings. On remand to the agency, Mr. Goucher prevailed again and was found disabled. See Ex. A (ALJ decision, dated May 17, 2017) (stating that, "[b]ased on the application for a period of disability and disability insurance benefits protectively filed on May 9, 2011, the claimant has been disabled under sections 216(i) and 223(d) of the Social Security Act beginning on November 1, 2011").
Mr. Goucher was awarded, inter alia, past-due benefits. Sackett represents that the amount of past-due benefits awarded was $100,649. See Ex. B (notice of award) (providing that "you are entitled to monthly disability benefits from Social Security beginning April 2012"; showing the monthly benefit amount, with periodic adjustments for cost of living). Neither Mr. Goucher nor the government contests the amount of past-due benefits.
Mr. Goucher and Sackett had a fee agreement which provided, in relevant part as follows:
Ex. C (Fee Agmt. at 1).
Here, as noted above, past-due benefits amounted to $100,649. Twenty-five percent of the past-due benefits is $25,162.25, which is the amount of the fee request now being made by Sackett. See also Ex. B (notice of award) (stating that, "[b]ased on the law, we must withhold part of past-due benefits of pay an appointed representative[;] [w]e cannot withhold more than 25% of past-due benefits to pay an authorized fee" and, here, "[w]e withheld $25,162.25"). Sackett notes that, although this is the gross fee being requested, "[Mr.] Goucher would be credited for $6,000.00" because of the EAJA fee award; "[t]his would result in [Mr. Goucher] paying Sackett a net fee . . . for $19,162.25." Mot. at 2.
Sackett represents that it incurred 30.90 attorney hours litigating Mr. Goucher's case before this Court. See Ex. E (itemization of services rendered). Thus, if the Court awards the full fee request, Sackett would be paid a de facto hourly rate of $814.31 (i.e., $25,162.25 ÷ 30.9 hours).
Sackett's fee request of $25,162.25 is made pursuant to § 406(b). Section 406(b) provides in relevant part as follows:
42 U.S.C. § 406(b)(1)(A).
In Gisbrecht, 535 U.S. at 789, the Supreme Court addressed an issue that had "sharply divided" the circuit courts with respect to § 406(b) — i.e.,
Id. at 793.
The Supreme Court held that Congress "designed § 406(b) to control, not to displace, fee agreements between Social Security benefits claimants and their counsel," and, because the lower court had rested its review on "lodestar calculations" and "reject[ed] the primacy of lawful attorney-client fee agreements," the Court reversed the judgment below. Id.
The Court went on to explain that
Id. at 807 (emphasis added).
Id. at 808 (emphasis added).
In the instant case, Sackett is not asking for fees that constitute more than 25 percent of Mr. Goucher's past-due benefits. That being the case, the question for the Court is whether the full 25 percent of the past-due benefits is reasonable under the circumstances. And here, the Court's main concern is whether there should be a downward adjustment in fees because the past-due benefits (over $100,000) are large compared to the amount of time Sackett spent on the case (about 31 hours). As noted above, the de facto hourly rate under these facts is about $814. This is a high hourly rate, particularly in a Social Security case.
In defense of the fee request, Sackett points out that a de facto hourly rate of more than $800 has been approved in some Social Security cases. See Mot. at 10 n.53 (citing cases). But none of the cases cited by Sackett involves Sackett or is a Northern District of California case. Furthermore, while Sackett does cite to one Ninth Circuit opinion (where the fee awards translated to de facto hourly rates of $519, $875, and $902), see Crawford v. Astrue, 586 F.3d 1142, 1153 (9th Cir. 2009) (Clifton, J., dissenting), Sackett has failed to demonstrate with any specificity how Crawford — or any of the district court cases it has cited — are similar or analogous to the instant case, thus warranting a similar de facto hourly rate. See id. (majority opinion) (stating that a "district court should look at the complexity and risk involved in the specific case at issue to determine how much risk the firm assumed in taking the case"). In addition, Crawford is distinguishable because, there, counsel actually reduced their fees "substantially from the allowable 25%."
Sackett's other arguments in defense of a $814 de facto hourly rate are not persuasive. For example, even assuming that Sackett's noncontingent hourly rate is $350-400,
Implicitly recognizing such, Sackett contends that the de facto hourly rate should really be $620 "after the credit [Mr.] Goucher [gets] for EAJA fees," Mot. at 10; however, there is no principled reason to exclude the EAJA credit. See, e.g., Stewart v. Astrue, No. C 05-2317 PVT, 2010 U.S. Dist. LEXIS 35936, at *3 (N.D. Cal. Mar. 15, 2010) ("Plaintiff's counsel's suggestion that the court should base its reasonableness determination on just $11,765.89 of the award [i.e., taking out the EAJA award] ignores the reality of how much money he will actually have received for the court case."). Furthermore, even if the Court were to assume a de facto hourly rate of $620, that would not automatically make the rate reasonable. Although Sackett cites a chart indicating that a Bay Area lawyer with more than 30 years of experience can charge $630 per hour as a noncontingent rate, see Mot. at 11 & Ex. F (chart), the $630 hourly rate is commanded by the top ninth decile only and it is not clear that Sackett falls into that group. The average noncontingent hourly rate is only $480.
Another consideration for the Court is whether Sackett has ever actually been awarded a de facto hourly rate in the $814 neighborhood. The Court was not able to locate any such case; nor has Sackett cited to any such case. There were two cases (from 2010 and 2006) where Sackett was awarded a de facto hourly rate in the $600 range
Taking into account all of the above, the Court finds that Sackett has failed to show that, "[w]ithin the 25 boundary" permitted by § 406(b), "the fee sought is reasonable for the services rendered." Gisbrecht, 535 U.S. at 807. Instead of a de facto hourly rate of $814, the Court concludes that a de facto hourly rate of $600 is reasonable. This sum constitutes a multiplier of 1.5 assuming a noncontingent hourly rate of $400. This is a fair multiplier that accounts for the risk to Sackett in taking on Mr. Goucher's specific case, including but not limited to the specific medical impairments Mr. Goucher had and treatment therefor.
With a de facto hourly rate of $600 and 30.9 hours, the attorney's fee award to be paid out of Mr. Goucher's past-due benefits is $18,540.
For the foregoing reasons, the Court grants in part and denies in part Sackett's motion for attorney's fees. The Court awards $18,540 as § 406(b) attorney's fees. The $6,000 EAJA award shall be refunded to Mr. Goucher.
This order disposes of Docket No. 33.