Lewis v. Kijakazi

Background

Plaintiff Gerald L. (identified only by first name and last initial under the District of Minnesota's policy for Social Security cases) originally filed this action on June 11, 2020. On September 26, 2022, the court remanded the case to the Commissioner of Social Security for further proceedings consistent with a Magistrate Judge's Report and Recommendation. On December 6, 2022, the court approved a stipulation awarding attorney's fees and costs under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412, in the amount of $8,800.

Following remand, an Administrative Law Judge ("ALJ") for the Social Security Administration issued a decision favorable to the plaintiff, awarding $86,545 in past-due benefits. On August 11, 2025, plaintiff's counsel, attorney Meredith E. Marcus, filed a motion for attorney's fees under 42 U.S.C. § 406(b)(1), which permits a court to award a "reasonable fee" to a successful claimant's attorney for work performed before the court, capped at 25% of the total past-due benefits awarded.

Legal Standard

Under § 406(b), the 25% figure is a statutory ceiling, not an automatic entitlement. Counsel must show that the fee sought is reasonable for the services rendered. Gisbrecht v. Barnhart, 535 U.S. 789, 807 (2002). The court has an independent obligation to assess reasonableness regardless of any contingency fee agreement.

A threshold requirement under § 406(b)(1)(A) is a "judgment favorable to the claimant." Once that is established, the court weighs factors including the terms of any contingency agreement, the quality and timeliness of representation, the hours spent, and comparable rates approved in similar cases.

Analysis

Successful Representation

The court found the threshold requirement satisfied: the plaintiff obtained $86,545 in past-due disability benefits, constituting a favorable judgment.

Reasonableness of the Fee

Ms. Marcus sought $21,636.25, which is exactly 25% of the past-due benefits — the statutory maximum. The court found this reasonable for several reasons:

- Contingency agreement: The plaintiff signed a contingency fee agreement agreeing to pay 25% of any past-due benefits, consistent with the statutory cap. The Supreme Court has recognized that 25% contingency agreements are the most common arrangement in Social Security cases. Gisbrecht, 535 U.S. at 800. - No delay or substandard representation: There was no indication that counsel caused delay or provided inadequate representation that might justify a reduction. - Hours and effective rate: Counsel spent a combined 50.35 hours on the case. The full requested amount yields an effective hourly rate of approximately $429.72, which the court found to be below other approved rates in the District of Minnesota. The court cited Smith v. Kijakazi, No. 19-cv-01571, 2023 WL 3580817, at *2 (D. Minn. May 22, 2023), which approved a fee with an effective rate of $900 per hour. - Reasonableness of hours: The number of hours was not excessive given counsel's briefing in opposition to the Commissioner's motion to dismiss, merits briefing, and the length of the administrative record.

The court concluded that a fee award of $21,636.25 (paid as $21,636.26 in the order) is reasonable.

EAJA Offset Requirement

Where an attorney collects fees for the same work under both EAJA and § 406(b), the attorney must refund to the claimant the amount of the smaller fee. Gisbrecht, 535 U.S. at 796. The EAJA award ($8,800) is smaller than the § 406(b) award ($21,636.25), so Ms. Marcus must refund the $8,800 EAJA fee to the plaintiff. The court noted the distinction between § 406(b) fees (paid from the claimant's past-due benefits) and EAJA fees (paid from agency funds as a penalty to the Commissioner).

Commissioner's Request for Qualification Declined

The Commissioner asked the court to specify that if withheld past-due benefits are insufficient to cover the fee, counsel must look to the plaintiff — not the agency — for any shortfall. The court declined, finding that the Commissioner made no showing that the funds withheld were insufficient.

Disposition

The court granted plaintiff's motion for attorney's fees under 42 U.S.C. § 406(b)(1), ordered the Commissioner to pay $21,636.26 directly to attorney Meredith E. Marcus, and ordered Ms. Marcus to refund $8,800 in previously paid EAJA fees to the plaintiff.