Figueroa v. Acting Commissioner of Social Security

Background

Marilyn Laboy Figueroa applied for Supplemental Security Income in December 2015, alleging disability based on medical and psychological conditions. An administrative law judge found her not disabled in 2017. The Social Security Administration’s Appeals Council remanded the matter, but a second administrative law judge again found her not disabled in February 2021.

After remand, a third administrative law judge found Figueroa disabled as of December 7, 2015, and awarded her $79,624 in past-due benefits. Binder then sought $9,953 in attorney’s fees under Section 406(b) of the Social Security Act. His request represented 12.5% of the past-due benefits and was based on 2.7 hours of work by him and his associate in the federal case. The Commissioner stated that he neither supported nor opposed the request.

Legal standard

Section 406(b) permits a court to award a reasonable fee of up to 25% of a claimant’s past-due benefits. When a contingency-fee agreement stays within that limit and there is no evidence of fraud or overreaching, the court must decide whether the requested amount is reasonable.

Under the factors identified by the Court of Appeals for the Second Circuit, the court considered the quality of the representation and result, whether the lawyer caused delay, and whether the fee would be an unreasonable windfall compared with the work performed. In assessing a possible windfall, the court also considered the lawyers’ experience and efficiency, the nature and length of their relationship with the claimant, the claimant’s satisfaction, and the uncertainty and effort involved in obtaining benefits.

When a lawyer receives fees under both Section 406(b) and the Equal Access to Justice Act, the lawyer must refund the smaller fee to the claimant.

Court’s analysis

The court found the motion timely because Binder filed it nine days after receiving notice of the benefits award. The contingency percentage did not exceed the statutory 25% limit, the record contained no allegations of fraud or overreaching, and the court found no purposeful delay by Binder. The successful benefits award also showed that the representation achieved a positive result.

The court nevertheless found the requested amount unreasonable. The request would have produced an effective hourly rate of $3,686.30 for 2.7 hours of federal-court work. The court recognized Binder’s experience representing benefits claimants and found that his work was efficient, but it also noted that the reported time was substantially below the time often considered reasonable for a typical federal Social Security appeal. The court concluded that the limited federal-court work supported reducing the fee.

The court also reduced the fee because Binder had not represented Figueroa throughout the earlier agency proceedings. Two factors favored Binder: Figueroa obtained a substantial benefits award, and success was uncertain when Binder took the case because prior counsel had pursued the disability claims for more than five years without success. On balance, however, the court concluded that the requested fee would be a windfall.

Disposition

The court granted in part and denied in part Binder’s motion. It awarded Binder $4,050 in fees under Section 406(b), to be paid from Figueroa’s past-due benefits under agency policy. The court also ordered Binder, within five business days after receiving the Section 406(b) fees, to refund Figueroa’s $634.20 Equal Access to Justice Act fee and file a docket declaration confirming the refund.