Jeffrie Gibson v. Jo Anne B Barnhart

Case 5:03-cv-00225-CW Document 17 Filed 12/21/07 Page 1 of 8 Page ID #:82 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIF...

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Case 5:03-cv-00225-CW Document 17 Filed 12/21/07 Page 1 of 8 Page ID #:82

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA EASTERN DIVISION

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JEFFRIE GIBSON,

) ) Plaintiff, ) ) v. ) ) MICHAEL J. ASTRUE, ) Commissioner of the ) Social Security ) Administration, ) ) Defendant. ) ______________________________)

Case No. EDCV 03-225 CW

ORDER GRANTING PETITION FOR ATTORNEYS’ FEES 42 U.S.C. § 406(b)

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Plaintiff’s counsel, Bill LaTour, has filed a Petition for

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Attorneys’ Fees Pursuant to 42 U.S.C. § 406(b) (“Pet.”) seeking an

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order for payment of fees in the amount of thirteen thousand one

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hundred two dollars and thirteen cents ($13,102.13) for legal services

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provided in representing plaintiff before this district court.1

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Although plaintiff’s counsel requests a gross amount of $18,402.13, equal to twenty-five percent of plaintiff’s past due benefits award, plaintiff’s counsel states that he has received $5,300.00 in attorney’s fees pursuant to 42 U.S.C. § 402(a). [Pet. 6.] Accordingly, plaintiff seeks a net amount of $13,102.13 pursuant to § (continued...) 1

Case 5:03-cv-00225-CW Document 17 Filed 12/21/07 Page 2 of 8 Page ID #:83

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Counsel seeks compensation pursuant to a contingent fee agreement and

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requests that the amount of fees sought by this petition be paid from

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the portion of plaintiff’s past-due benefits award withheld by

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defendant for the payment of attorneys’ fees.

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response taking no position as to the reasonableness of the requested

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fee but noting factors relevant to a reasonableness analysis.

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reasons stated below, the petition is granted in the amount of

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$9,472.00.

Defendant has filed a

For the

Proceedings

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On March 3, 2003, plaintiff filed a complaint for judicial review

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of defendant’s decision denying his application for disability

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insurance benefits and supplemental security income.

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2003, the court issued an order and judgment remanding the matter for

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further administrative proceedings pursuant to a stipulation between

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the parties.

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including past due benefits, in the amount of $73,068.50 [Pet. Exh.

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4].

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benefits award, was withheld by defendant for the payment of

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attorneys’ fees.

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pursuant to § 406(a) for legal work performed at the administrative

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level.

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406(b) in the gross amount of $13,102.13.

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counsel has already been awarded attorneys’ fees of $1,200.00 under

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the Equal Access to Justice Act (“EAJA”), 24 U.S.C. § 2412(d).

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The EAJA award offsets any attorneys’ fee award payable from

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plaintiff’s past-due benefits, up to the full amount of the EAJA

On remand, plaintiff was awarded disability benefits,

The sum of $18,402.13, representing 25% of plaintiff’s past-due

[Id.]

Plaintiff’s counsel received $5,300.00

From the remaining amount, plaintiff seeks a fee award under §

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On September 3,

(...continued)

406(b). 2

[Pet. 5-6.]

Plaintiff’s

[Id. ]

Case 5:03-cv-00225-CW Document 17 Filed 12/21/07 Page 3 of 8 Page ID #:84

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award.2

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gross amount of $13,102.13 and that the court order him to reimburse

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plaintiff in the amount of $1,200.00. [Pet. 21.]

Accordingly, plaintiff’s counsel requests an award in the

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Discussion

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Section 406(b) provides, in part:

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Whenever a court renders a judgment favorable to a claimant under this subchapter who was represented before the court by an attorney, the 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, and the Commissioner of Social Security may . . . certify the amount of such fee for payment to such attorney out of, and not in addition to, the amount of such past-due benefits.

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42 U.S.C. § 406(b)(1)(A).

Thus, “a prevailing [disability] claimant’s

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[attorney’s] fees are payable only out of the benefits recovered; in

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amount, such fees may not exceed 25 percent of past-due benefits.”

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Gisbrecht v. Barnhart, 535 U.S. at 792.

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Court explained that where the plaintiff has entered into a contingent

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fee agreement with counsel, section 406(b) is meant “to control, not

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to displace, fee agreements between Social Security benefits claimants

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and their counsel.” Gisbrecht, 535 U.S. at 793.

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where the claimant and counsel had entered into a lawful contingent

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fee agreement, courts that used the “lodestar” method as the starting

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point to determine the reasonableness of fees requested under section

In Gisbrecht, the Supreme

The Court held that

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If attorneys’ fees are awarded under the EAJA and section 406(b), the attorney must refund the smaller of the two awards to the claimant. See Gisbrecht v. Barnhart, 535 U.S. 789, 796, 122 S.Ct. 1817, 152 L.Ed.2d 996 (2002)(noting that “Congress harmonized fees payable by the Government under EAJA with fees payable under § 406(b) out of the claimant's past-due Social Security benefits” by requiring the claimant's attorney to refund to the claimant the amount of the smaller fee up to the point where the claimant receives 100% of the past-due benefits). 3

Case 5:03-cv-00225-CW Document 17 Filed 12/21/07 Page 4 of 8 Page ID #:85

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406(b) improperly “reject[ed] the primacy of lawful attorney-client

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fee agreements.”

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fee agreements as an “independent check, to assure that they yield

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reasonable results in particular cases,” lawful contingent-fee

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agreements are “the primary means by which fees are set” for the

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successful representation of social security disability claimants in

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court.

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Gisbrecht, 535 U.S. at 793.3

While courts review

Gisbrecht, 535 U.S. at 807 (emphasis added).

Here, plaintiff retained counsel to represent him in federal court in his social security disability case, and plaintiff agreed to

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pay counsel a contingent fee in an amount equal to 25% of any past-due

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benefits award obtained. [Pet., Exh. 1.]

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fee that, when combined with the fees previously paid under § 406(a),

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is equal to that amount.

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agreement thus falls within the 25% boundary set by § 406(b), the

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court appropriately examines counsel’s instant petition to assure that

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enforcement of the agreement is not unreasonable, and “the attorney

The instant petition seeks a

Because the parties’ contingent fee

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3 Under the “lodestar” method, attorneys’ fees are calculated by multiplying the number of hours reasonably expended in representing a client by a reasonable hourly fee. See Gisbrecht, 535 U.S. at 797 (discussing application of the “lodestar” method in the Ninth Circuit). The “lodestar” may be adjusted upward or downward to account for a variety of factors. See Gisbrecht, 535 U.S. at 798 (citing Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 69-70 (9th Cir. 1975). Courts in this and other circuits look to the following factors to determine whether the lodestar should be adjusted: (1) the time and labor required; (2) the novelty and difficulty of the questions involved; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases. Allen v. Shalala, 48 F.3d 456, 458 n.3 (9th Cir. 1995)(citing Kerr, 526 F.2d at 70), disapproved by Gisbrecht, 535 U.S at 797-99.

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Case 5:03-cv-00225-CW Document 17 Filed 12/21/07 Page 5 of 8 Page ID #:86

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for the successful claimant must show that the fee sought is

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reasonable for the services rendered.”

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In testing for reasonableness of the fee request, the court may

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consider factors such as the character of the representation, the

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results achieved, the relationship between the amount of any benefits

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award and the time expended, and any undue delay attributable to

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counsel that caused an accumulation of back benefits.

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U.S. at 808; see also Black v. Astrue, 229 Fed. Appx. 515, 517 (9th

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Cir. 2007)(requiring full incorporation of Gisbrecht factors in

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Gisbrecht, 535 U.S. at 807.

Gisbrecht, 535

reasonableness review). Consideration of these factors supports partial approval of the

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instant fee petition.

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before the court was efficient, resulting in a favorable result for

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his client in the form of a remand leading to a finding of disability

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and payment of benefits.

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time expended on this matter before the district court (7 attorney

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hours and 5.3 paralegal hours) are within the norm for social security

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disability cases.4 [Pet., Exh. 7.]

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Supp. 2d 1212, 1214 & n. 2 (C.D. Cal. 2000) (collecting cases

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approving up to 54.5 hours of compensable attorney services for

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individual cases).

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in litigating plaintiff’s claim.

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below, the relationship between the amount of the reward and the time

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expended warrants a reasonable reduction in the requested fee award.

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The character of counsel’s representation

The nature of the work performed and the

See Patterson v. Apfel, 99 F.

There is no suggestion of undue delay by counsel On the other hand, as discussed

The reasonableness of the requested fee is also appropriately

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Although plaintiff’s counsel asserts that he expended 10 hours working on the case [Pet. 9], the Itemization of Attorney Services indicates that 7 hours were spent. [Pet., Exh. 7.] 5

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checked with reference to a lodestar figure.

See Gisbrecht, 585 U.S.

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at 808 (noting that record of hours spent and hourly billing charges

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for noncontingent-fee cases may aid in the court’s assessment of

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reasonableness of the fee requests).

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hourly billing rate of $425 for attorney (proprietor) services

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represents a reasonable noncontingent hourly rate in light of

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published surveys regarding law firm practice.5 [Pet. 12.]

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finds this rate appropriate for purposes of a comparative fee

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calculation.

Counsel suggests that a base

The court

Although plaintiff’s counsel does not provide data

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regarding prevailing market rates for paralegal work, the court takes

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judicial notice of an hourly rate of $153.55, adjusted for the

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increase in cost of legal services since the figure was published.6

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This produces a lodestar of $3,788.81.7

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$13,102.13 requested by counsel for work performed in the district

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court under the contingency agreement is approximately 3.45 times this

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lodestar figure, producing a blended hourly rate of $1,065.218; the

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separate rates are $1,468.80 for attorney time and $532.17 for

In comparison, the fee of

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The base attorney rates which counsel references are derived from the ninth decile billing rate figures for southern California firms as shown in The 2006 Small Law Firm Economic Survey (Altman Weil Publications, Inc.). [Pet., Exh. 9]. 6 See The 2000 Small Law Firm Economic Survey (Altman Weil, Inc.) and the Consumer Price Index (“CPI”) for All Urban Consumers Legal Services (www.bls.gov). 7

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The lodestar calculation is: [7 (attorney hours) x $425.00 (non-contingent hourly rate)] + [5.3 (paralegal hours) x $153.55 (noncontingent hourly rate] = $2,975.00 + $813.81 = $3,788.81. 8

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$13,102.13 (fee requested) / 12.3 (attorney and paralegal hours) = $1,065.21 (blended hourly rate). 6

Case 5:03-cv-00225-CW Document 17 Filed 12/21/07 Page 7 of 8 Page ID #:88

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paralegal time.9

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in light of the lodestar, particularly given the contingent nature of

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the case and similar awards in other cases. [Pet. 14-21.]

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Counsel asserts that the requested fee is reasonable

The court finds, however, that the requested fee in this case

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should be reduced to reflect a fee that is reasonable for the services

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rendered.

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the amount of time counsel spent on the case, a downward adjustment is

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. . . in order.”

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achieved a favorable result for plaintiff and should be compensated

Where, as here, “the benefits are large in comparison to

Gisbrecht, 535 U.S. at 808.

Although counsel

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above his normal hourly fees to recognize the inherent risks of

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contingent litigation, the amount of past-due benefits, $73,608.50, is

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large in comparison to the amount of time spent (7 attorney hours and

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5.3 paralegal hours) on the case by counsel’s office.

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based on the court’s independent check of the reasonableness of the

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contingency fee agreement, an adjustment representing an hourly rate

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2.5 times the non-contingent hourly rates for attorneys and paralegals

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in the ninth decile of small law firm practice is appropriate.

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Ellick v. Barnhart, 445 F. Supp. 2d 1166, 1173 (C.D. Cal.

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2006)(applying a downward adjustment to reach reasonable rate

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representing 2.5 times attorney’s actual hourly rate); Ogle v.

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Barnhart, 92 Soc.Sec.Rep.Serv. 938, 2003 WL 22956419 *5-6 (D. Maine

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2003)(finding effective hourly rate of $1,860.17 “astronomical,” but

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approving 2.5 multiplier to attorney’s actual billing rate).

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figure adequately accounts for the uncertainties, delays and risks

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inherent in the contingency fee agreement.

Accordingly,

Cf.

This

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The calculation is: [7 (attorney hours) x $1468.80 (hourly rate)] + [5.3 (paralegal hours) x $532.17 (hourly rate)] = $10,281.63 + $2,820.50 = $13,102.13. 7

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Application of the multiplier results in an hourly rate of

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$1,062.50 for attorney work ($425.00 x 2.5 = $1,062.50) and $383.87

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for paralegal work ($153.55 x 2.5 = $383.87.).

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lodestar of $9,472.0010, which results in a blended hourly rate of

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$770.08.11

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the services rendered.

The court finds that this is a reasonable fee in light of Ellick, 445 F. Supp. 2d at 1173.

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This produces a

Conclusion For the reasons stated herein, the petition for attorneys’ fees under 42 U.S.C. § 406(b) is GRANTED.

Counsel is awarded the amount of

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nine thousand four hundred seventy-two dollars ($9,472.00) and ordered

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to: (1) serve plaintiff with a copy of this order and (2) reimburse

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plaintiff in the amount of one thousand two hundred dollars

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($1,200.00).

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IT IS SO ORDERED.

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DATED: December 21, 2007

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__________/S/__________________ CARLA M. WOEHRLE United States Magistrate Judge

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The lodestar calculation is: [7 (attorney hours) x $1,062.50 (adjusted hourly rate)] + [5.3 (paralegal hours) x $383.87 (adjusted hourly rate)] = $7,437.50 + $2,034.50 = $9,472.00. 11

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$9,472.00 (total fee) / 12.3 (attorney and paralegal hours spent) = $770.08 per hour. 8

English