Mercado v. Commissioner of Social Security Administration

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WO
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
Marisol Villalobos Mercado,
Plaintiff,
v.
Commissioner of Social Security
Administration,
Defendant.
No. CV-20-00423-PHX-DJH
ORDER
Plaintiff Marisol Villalobos Mercado (“Plaintiff”) filed a Motion for an Award of
Attorney Fees under 42 U.S.C. § 406(b) (Doc. 33), seeking an award of $23,386.50.
Plaintiff’s Motion was backed by her Memorandum in Support. (See Doc. 34). The Social
Security Administration (“SSA”) Commissioner (the “Commissioner”) filed a Response
(Doc. 36) neither supporting nor opposing the award sought.
I. Background
Plaintiff filed Applications for Disability Insurance benefits and Supplemental
Security Income benefits on May 12, 2016, for a period of disability beginning on May 7,
2014. (R. at 19). Her claim was denied initially on August 5, 2016, and was then denied
on reconsideration in December of 2016. (Id.) Following a subsequent hearing, the ALJ
denied Plaintiff’s claims on January 25, 2019. (Id. at 19, 30). The Appeals Council denied
Plaintiff’s review request and adopted the ALJ’s decision as its final decision, prompting
Plaintiff to seek judicial review. (Id. at 1–3). On April 29, 2021, the Court reversed the
ALJ’s decision and remanded the case for further proceedings. (See Doc. 24). Despite
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Defendant’s opposition (see Doc. 29), the Court also issued Plaintiff an award of
$10,558.29 in attorney fees under the Equal Access to Justice Act (“EAJA”). (Doc. 31).
On remand, Plaintiff recovered past-due benefits in the amount of $93,546.00.
(Doc. 34-1 at 6). A portion of these benefits were withheld in case Plaintiff’s counsel
required payment. (Id.) Plaintiff’s counsel now seeks $23,386.50 in attorney fees.
II. Legal Standard
Section 4061 establishes “the exclusive regime for obtaining fees for successful
representation of Social Security benefits claimants.” Gisbrecht v. Barnhart, 535 U.S. 789,
795–96 (2002). Section 406(b) provides that “[w]henever a court renders a judgment
favorable to a claimant . . . 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 . . . .” 42 U.S.C. § 406(b)(1)(A). Fees are payable out
of, and not in addition to, the amount of the past-due benefits. Id. Before awarding fees,
the Court must consider whether the 42 U.S.C. § 406(b) fee requested is (1) within the
statutory guidelines; (2) consistent with the fee agreement; and (3) reasonable in light of
the contingent-fee agreement. Gisbrecht, 535 U.S. at 807–08.
III. Discussion
Plaintiff’s counsel is seeking $23,386.50 in § 496(b) fees. (Doc. 34 at 1). Upon
review of the Itemization of Services (Doc. 34-3), the time expended and the amounts
charged by Plaintiff’s counsel are reasonable in this case. First, the fees sought adhere to
§ 406(b)’s guidelines. Plaintiff was awarded $93,546.00 in back past-due benefits, and the
requested $23,386.50 in attorney fees equals 25% of the award. Second, this amount is
consistent with the fee agreement which clearly states that Plaintiff’s attorney would be
entitled to 25% of past-due benefits. (Doc. 34-2 at 2). Lastly, the requested fee is
reasonable given the contingent-fee agreement because it reflects the nature of the
recovery. (Doc. 34 at 5). Plaintiff’s case had a substantial risk of loss because Plaintiff
1 Unless where otherwise noted, all Section references are to the Social Security Act.
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had been repeatedly denied on agency review before the initiating this civil action. (Id.).
In sum, the Court finds that the amount requested is reasonable under Gisbrecht and will
award Plaintiff $23,386.50 in § 406(b) fees.
Under the present circumstances, however, an offset is necessary. The Court
granted Plaintiff’s Motion for Attorney Fees under the EAJA and awarded fees in the
amount of $10,558.29. (Docs. 26, 31 ($819.28 was deducted from the original amount
requested by Plaintiff based on Defendant’s Response.)). When an attorney receives an
award under § 406(b) and the EAJA, the attorney must refund to the client the smaller of
the awards. See Parrish v. Comm’r of Soc. Sec. Admin., 698 F.3d 1215, 1221 (9th Cir.
2012) (holding “[w]here the same attorney represented a claimant at each stage of judicial
review, the court need merely offset all EAJA awards against the § 406(b) award”). Given
the $23,386.50 award of § 406(b) fees to Plaintiff’s counsel, the fees awarded under the
EAJA here shall be refunded to Plaintiff.
Accordingly,
IT IS HEREBY ORDERED that Plaintiff’s Motion for Attorney Fees (Doc. 33) is
granted under 42 U.S.C. § 406(b). Plaintiff’s counsel Mark Caldwell is awarded
$23,386.50 in attorney fees to be paid out of the sum from Plaintiff’s past-due benefits.
Payment is deliverable to counsel’s office: Mark Caldwell, PC, 8205 S. Priest Dr., PO Box
10446, Tempe, AZ 85284.
IT IS FURTHER ORDERED that Plaintiff’s counsel shall refund to Plaintiff the
lesser of the fees awarded under 42 U.S.C. § 406(b) and the Equal Access to Justice Act.
Dated this 7th day of November, 2025.
Honorable Diane J. Humetewa
United States District Judge
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