Case No. 3:15-cv-1904-AC.

CANDY WESTPHAL, Plaintiff, v. NANCY BERRYHILL, Acting Commissioner of Social Security Administration, Defendant.

United States District Court, D. Oregon, Portland Division.

Editors Note
Applicable Law: 42 U.S.C. § 0405g
Cause: 42 U.S.C. § 0405g Review of Commissioner's Final Decision
Nature of Suit: 864 Social Security: SSID Tit. XVI
Source: PACER

Attorney(s) appearing for the Case

Candy Westphal, Plaintiff, represented by George J. Wall , Law Offices of George J. Wall.

Commissioner Social Security Administration, Defendant, represented by Janice E. Hebert , U.S. Attorney's Office & Sarah Elizabeth Moum , Social Security Administration.


JOHN V. ACOSTA, Magistrate Judge.


Before the court is Candy Westphal's ("Westphal") unopposed Petition for Attorney Fees Per 42 U.S.C. § 406(b) ("Section 406(b)"). Although Westphal is the claimant in this case, the real party in interest to this motion is her attorney George J. Wall ("Wall"), and the Commissioner does not oppose the motion, but merely acts in a manner similar to "a trustee for the claimant[]." Gisbrecht v. Barnhart, 535 U.S. 789, 798 (2002). Having reviewed the proceedings below and the amount of fees sought, the court concludes Wall is entitled to fees under Section 406(b) in the amount of $14,480.00.

Procedural Background

Westphal filed her applications for Disability Insurance and Supplemental Security Income Benefits on October 10, 2012, alleging an onset date of September 1, 2009. Her applications were denied initially and on reconsideration. On May 20, 2015, an Administrative Law Judge ("ALJ") issued an opinion in which he found Westphal not disabled and, therefore, not entitled to benefits. The ALJ found Westphal: (1) suffered from the severe impairments of fibromyalgia, hypothyroid, chronic obstructive pulmonary disease, anemia, edema, migraines, and mental conditions described as anxiety and depression; (2) retained the residual functional capacity to perform a reduced range of sedentary work; (3) was unable to perform her past relevant work; and (4) was able to perform jobs such as document preparer and silver wrapper. Accordingly, the ALJ determined Westphal was not disabled between her onset date of September 1, 2009, and May 20, 2015. That decision became the final decision of the Commissioner on August 26, 2015, when the Appeals Council denied Westphal's request for review after accepting additional evidence into the record.

Westphal sought review of the Commissioner's decision by filing a complaint in this court on October 8, 2015. Westphal alleged the ALJ erred in two respects: (1) rejecting the opinion of Dr. Maynard, Westphal's long-term treating physician; and (2) finding Westphal less than fully credible. Additionally, Westphal asserted the Appeals Council erred in rejecting the testimony of Paula Case, Westphal's mental health case manager. On December 27, 2016, this court issued Findings and Recommendations finding the ALJ's credibility assessment of Westphal was supported by the record but he failed to give proper weight to Dr. Maynard's opinion (the "F&R"). The court did not find the Appeals Council's improperly considered the additional evidence offered by Paula Case. The court determined the evidence, when properly credited, required a finding Westphal was disabled and recommended a remand for a calculation and award of Benefits. Neither party filed objections to the F&R and January 25, 2017, District Judge Anna Brown issued an Order adopting the F&R, reversing the decision of the Commissioner, and remanding the matter for immediate calculation and award of benefits.

On March 15, 2017, Westphal filed a Petition for Fees Per Equal Access to Justice Act (28 U.S.C. § 2412) in the amount of $5,774.40, which the court granted the following day. Westphal filed the instant petition for attorney fees in the amount of $14,480.00 under Section 406(b) on May 11, 2017. The Commissioner does not oppose the motion.


The parties do not dispute Westphal is the prevailing party in this matter. Additionally, the Commissioner does not challenge the amount Wall requests as attorney fees. Nonetheless, because the Commissioner does not have a direct stake in the allocation of Westphal's attorney fees, the court must ensure the calculation of fees is reasonable to prevent Wall from potentially receiving a windfall. See Gisbrecht, 535 U.S. at 798 n.6 ("We also note that the Commissioner of Social Security . . . has no direct financial stake in the answer to the § 406(b) question.").

After entering a judgment in favor of a Social Security claimant represented by counsel, a court "may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of the total of the past-due benefits to which the claimant is entitled by reason of such judgment." 42 U.S.C. § 406(b)(1)(A) (2017). A "twenty-five percent contingent-fee award is not automatic or even presumed; `the statute does not create any presumption in favor of the agreed upon amount.'" Dunnigan v. Astrue, No. CV 07-1645-AC, 2009 WL 6067058, *7 (D. Or. Dec. 23, 2009), adopted 2010 WL 1029809 (March 17, 2010)(quoting Gisbrecht, 535 U.S. at 807 n.17). A Section 406(b) fee award is paid from the claimant's retroactive benefits, and an attorney receiving such an award may not seek any other compensation from the claimant. Dunnigan, 2009 WL 6067058, at *7. Accordingly, when a court approves both an EAJA fee and a Section 406(b) fee payment, the claimant's attorney must refund to the claimant the amount of the smaller of the two payments. Gisbrecht, 535 U.S. at 796.

I. Fee Agreement

Under the Supreme Court's decision in Gisbrecht, the court first examines the contingent fee agreement to determine whether it is within the statutory twenty-five percent cap. Westphal and Wall executed a retainer agreement, which provided if Wall obtained payment of past-due benefits, Wall would pay him up to twenty-five percent of the past-due benefits awarded. (Pl.'s Pet. for Attorney Fees Per 42 U.S.C. §406(b), ECF No. 25 ("Pl.'s Pet."), Ex. B.) The terms of this agreement are thus within the statute's limits.

The next step is to confirm that the fee requested by counsel does not exceed the statute's twenty-five percent ceiling. This determination requires evidence of the retroactive benefits to be paid to Westphal. Wall provided a document from the Society Security Administration (the "Administration") entitled "Notice of Award," which details the retroactive benefits due Westphal and states it has withheld $14,483.08 in reserve to pay any attorney fees awarded by the court, which represents twenty-five percent of the past due benefits. (Pl.'s Mot. Ex. 1, at 3.) Wall seeks nearly the full amount withheld, asserting Westphal's retroactive benefits equaled approximately $57,932.32, an amount consistent with the sum withheld by the Administration for attorney fees. After determining the fee agreement and the amount requested are in accordance with the statutory limits, this court next turns to "its primary inquiry, the reasonableness of the fee sought." Dunnigan, 2009 WL 6067058, at *10.

II. Reasonableness Factors

An order for an award of benefits should not be viewed in isolation, nor can it be presumed always to require a fee award of twenty-five percent of a claimant's retroactive benefits award. Dunnigan, 2009 WL 6067058, at *12. If obtaining benefits always supported awarding fees for the maximum amount provided for by statue, the other Gisbrecht factors and the trial courts' assigned task of "`making reasonableness determinations in a wide variety of contexts'" would be unnecessary. Id. (quoting Gisbrecht, 535 U.S. at 808). Here, Wall seeks nearly twenty-five percent of the past due benefits, the full amount of the statutory cap.

Counsel bears the burden to establish the reasonableness of the requested fee. Gisbrecht, 535 U.S. at 807. While the court must acknowledge the "primacy of lawful attorney-client fee agreements," contingent fee agreements that fail to "yield reasonable results in particular cases" may be rejected. Id. at 793, 807. The court must ensure a disabled claimant is protected from surrendering retroactive disability benefits in a disproportionate payment to counsel. Crawford v. Astrue, 586 F.3d 1142, 1151 (9th Cir. 2009) (en banc) (citing Gisbrecht, 535 U.S. at 808). The four factors to be considered when evaluating the requested fee's reasonableness have been identified by the Ninth Circuit from the Gisbrecht analysis as: (1) the character of the representation, specifically, whether the representation was substandard; (2) the results the attorney achieved; (3) any delay attributable to the attorney seeking the fee; and (4) whether the benefits obtained were "not in proportion to the time spent on the case" and raise the specter the attorney would receive an unwarranted windfall. Crawford, 586 F.3d at 1151-53 (citations omitted). The Ninth Circuit, in Crawford, also identified the risk inherent in contingency representation as an appropriate factor to consider in determining a Section 406(b) award. It focused the risk inquiry, however, stating that: "the 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." Id. at 1153.

A. The Character of Representation

Substandard performance by a legal representative may warrant a reduction in a Section 406(b) fee award. Crawford, 586 F.3d at 1151. The record in this case, however, provides no basis for a reduction in the requested Section 406(b) fee due to the character of Wall's representation. In fact, Wall prevailed and earned a remand for an immediate award of Benefits.

B. Results Achieved

The court ordered a remand of Westphal's claim for immediate calculation and award of Benefits. This was the best result available.

C. Undue Delays

A court may reduce a Section 406(b) award for delays in proceedings attributable to claimant's counsel. Crawford, 586 F.3d at 1151. The reduction is appropriate "so that the attorney will not profit from the accumulation of benefits during the pendency of the case in court." Gisbrecht, 535 U.S. at 808 (citation omitted).

Here, Westphal's opening brief was filed on May 5, 2016, after Wall requested, and received, a two-week extension necessitated by a heavy work load. The Commissioner filed the response brief timely on July 8, 2016. Wall again requested a two-week extension with regard to the reply brief, based on an illness requiring Wall to miss two work days and a continued heavy work load, and filed a reply brief on August 5, 2016.

This action was resolved within sixteen months, a shorter period than normal due to the absence of F&R objections and few requests for extension of time. Wall's requests for extensions of time extended the action by only one months. This delay was not disproportionally long in relation to the overall pendency of the action and was not unreasonable or unfounded. There is nothing in the record to suggest the delay attributable to Wall was "undue." Accordingly, a reduction of Wall's fee request is unwarranted under this factor.

D. Proportionality

Finally, a district court may reduce a Section 406(b) award if "benefits . . . 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 Supreme Court explained "[i]f the benefits are large in comparison to the amount of time counsel spent on the case, a downward adjustment is . . . in order." Gisbrecht, 535 U.S. at 808.

In this case, Wall filed a fifteen-page opening brief asserting two errors by the ALJ and one error by the Appeals Council, and a seven-page reply brief bolstering his arguments in response to the Commissioner's opposition brief. Wall argued the court should credit Dr. Maynard's opinion as true and remand the case to the Commissioner for an immediate award of Benefits. Wall prevailed on his argument that the ALJ erred in rejecting Dr. Maynard's opinion and obtained the requested relief.

Based on the amount withheld by the Administration for attorney fees, Westphal is entitled to approximately $57,932.32 in retroactive benefits. Wall reports, and the time records confirm, he expended slightly more than thirty-two hours representing Westphal in this matter. This this time expenditure is consistent with the twenty-to-forty-hour range Judge Mosman found to be a "reasonable amount of time to spend on a social security case that does not present particular difficulty." Harden v. Comm'r, 497 F.Supp.2d 1214, 1215 (D. Or. 2007).

Wall currently seeks $14,480.00 in attorney fees for his representation of Westphal before this court, which results in an effective hourly rate of $452.50. This hourly rate is justified by the results Wall achieved, and is substantially less than those recently found reasonable for Wall's services by other judges in this district. Bradshaw v. Berryhill, Civil No. 3:14-CV-01829-JO, 2017 WL 2821941 (D. Or. June 28, 2017)(effective hourly rate of $645.67); Skoch v. Comm'r Soc. Sec. Admin., Case No. 3:14-cv-00725-MA, 2017 WL 1437099 (D. Or. April 20, 2017)(effective hourly rate of 756.40).

E. Risk

Wall does not identify any specific risks unique to this case. In fact, the issues raised by Wall on Westphal's behalf are fairly routine in Social Security cases. Wall does not seek an adjustment to the requested fee based on risk factors and the court does not find any such adjustment is warranted.


For the reasons stated, Westphal's Petition for Attorney Fees Per 42 U.S.C. § 406(b) (ECF No. 25) in the amount of $14,480.00 should be GRANTED. In light of the EAJA fees previously awarded Wall in the amount of $5,774.40, the amount due to Wall from Westphal's retroactive benefits is $8,705.60.

Scheduling Order

The Findings and Recommendation will be referred to a district judge for review. Objections, if any, are due July 31, 2017 days. If no objections are filed, then the Findings and Recommendation will go under advisement on that date.

If objections are filed, then a response is due within fourteen (14) days after being served with a copy of the objections. When the response is due or filed, whichever date is earlier, the Findings and Recommendation will go under advisement.


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