Brent Z. v. Kijakazi

Background

Brent Z. applied for benefits under both the Disability Insurance program and the Supplemental Security Income program. After the Social Security Administration denied his applications, he filed this federal-court case in March 2022. He retained Wes Kappelman and Gregg B. Nelson under a contingency-fee agreement providing for payment of 25% of his past-due benefits if he won his appeal.

The parties filed cross-motions for summary judgment. The court found that the Social Security Administration had made a legal error in deciding that Brent Z. was not eligible for benefits and recommended a remand. District Judge Jerry W. Blackwell accepted that recommendation and remanded the matter to the agency on March 8, 2023. The court later awarded counsel $4,420.59 in fees and $100 in costs under the Equal Access to Justice Act, a statute that can require the government to pay fees when its position was not substantially justified.

On remand, the agency found Brent Z. eligible for benefits beginning in May 2019. Counsel then sought $18,586.50 under 42 U.S.C. § 406(b) for 18.75 hours of work in federal court. Counsel calculated that amount as 25% of $25,786.50 in past-due benefits, less $7,200 sought for work before the agency under a separate provision. Counsel used the lower of two calculations of 25% of past-due benefits.

Legal standard

Section 406(b) permits a court to award a successful Social Security claimant’s attorney a reasonable fee from the claimant’s past-due benefits, subject to a 25% cap for work performed in federal court. The court must independently review the fee agreement and the requested amount. Relevant considerations include the quality of the representation, the result achieved, whether counsel caused delay, and whether the fee is excessive in relation to the time spent.

A claimant’s attorney cannot keep both an Equal Access to Justice Act award and a § 406(b) award without adjustment. When both are awarded, the attorney must refund the smaller award to the claimant.

Court’s analysis and ruling

The court observed that the requested fee produced an effective rate of $991.28 per hour and appeared high. It nevertheless declined to reduce the award because there was no indication that counsel performed poorly or caused unnecessary delay. Counsel had won summary judgment despite the agency’s opposition and timely sought the fee after receiving notice of the past-due benefits. The court also found it significant that counsel used the lower benefits calculation and capped the combined fees sought for agency and federal-court representation at 25% of the past-due benefits, even though the statutory 25% cap specifically governs federal-court fees.

The court granted Brent Z.’s motion. It ordered the Social Security Administration to pay Gregg B. Nelson $18,586.50 in § 406(b) attorney’s fees no later than 30 days after the order. It also ordered counsel to refund Brent Z. the $4,420.59 previously awarded under the Equal Access to Justice Act no later than 30 days after Nelson received the § 406(b) payment.