Werts v. Saul

Background

Sarah Werts’s attorney, Harvey P. Sackett, moved for attorney’s fees under 42 U.S.C. § 406(b). He requested $44,183.44 from the past-due disability benefits awarded to Werts. Andrew Saul, identified in the opinion as the acting Social Security Commissioner, filed a response but took no position on whether the requested fee was reasonable.

On March 3, 2023, the court reversed the Commissioner’s unfavorable final decision and remanded the matter for further administrative hearings. On April 24, 2024, an Administrative Law Judge found Werts disabled and entitled to Disability Insurance Benefits. Werts received $276,216 in retroactive benefits for July 2016 through July 2024. The Social Security Administration withheld $69,054, equal to 25% of the retroactive benefits, for possible attorney’s fees.

Werts had entered into a contingency-fee agreement with Sackett on April 3, 2017. The agreement provided for a maximum total fee of 25% of past-due benefits for work performed under sections 406(a) and 406(b). Sackett stated that, after approval of the requested fee, he would refund Werts $4,183.44 in fees received under the Equal Access to Justice Act. The resulting net fee would be $40,000.

Legal standard

Section 406(b) allows an attorney who successfully represents a Social Security claimant in court to request a fee of up to 25% of past-due benefits eventually awarded. The court must independently review a contingency-fee arrangement to determine whether it produces a reasonable result in the particular case. In making that assessment, the court considers the quality of the representation and the result achieved. It may reduce the requested fee if the representation was inadequate, the attorney caused delay, or the fee would be an improper windfall.

When an attorney receives fees under both section 406(b) and the Equal Access to Justice Act, the attorney must refund the smaller fee to the claimant.

Court’s analysis

The court found Sackett’s requested fee reasonable. The $44,183.44 request was approximately 16% of Werts’s $276,216 in past-due benefits, below the 25% statutory limit. The record and submitted time records did not indicate that Sackett’s performance was inadequate or that he delayed the case to increase the fee.

Sackett stated that he spent 26.5 hours on the case, including drafting the complaint, reviewing the administrative record, and drafting the summary-judgment motion. Using that figure, the effective hourly rate would be $1,667.30, which the court found within the range of effective hourly fees awarded to attorneys with Sackett’s experience in the district. The court also noted that Exhibit E’s timesheet totaled 23.15 hours rather than 26.5 hours. Even using 23.15 hours, the effective hourly rate would be $1,904.25, which the court still found reasonable.

Disposition

The court GRANTS Sackett’s motion. It awards him $44,183.44 under 42 U.S.C. § 406(b). Upon receiving that fee, Sackett is ORDERED to refund Werts $4,183.44 in fees received under the Equal Access to Justice Act.