Kohler v. Bisignano

Background

Plaintiff Angela K. brought this action seeking judicial review of the Social Security Administration's (SSA) denial of her disability benefits. The court previously adopted a Report and Recommendation from Magistrate Judge Elizabeth Cowan Wright, granted in part plaintiff's motion to dismiss, denied the SSA's motion to dismiss, and remanded the case to the Commissioner for further administrative proceedings. On remand, the SSA determined that Angela K. is entitled to benefits for a period of disability beginning in December 2018.

Angela K. received a Notice of Award indicating that 25% of her past-due benefits is $21,426.50. Her child received a Notice of Award for auxiliary benefits indicating that 25% of those auxiliary past-due benefits is $3,040.25, bringing the combined 25% figure to $24,466.75.

The court had previously awarded Angela K.'s counsel $6,152.50 in attorney's fees under the Equal Access to Justice Act (EAJA), which allows prevailing parties to recover fees from the federal government in certain circumstances.

The Fee Motion

Counsel James H. Greeman moved for an additional attorney's fees award under 42 U.S.C. § 406(b), which governs fees for successful representation of Social Security claimants in federal court. The Commissioner took no position on the merits of the fee request but asked the court to distinguish between the gross § 406(b) award and the net amount to be paid, accounting for the required EAJA offset.

Legal Standard

Under 42 U.S.C. § 406(b)(1)(A), a court may award counsel for a successful Social Security claimant a reasonable fee not exceeding 25% of the claimant's total past-due benefits. Although contingency fee arrangements are permissible, courts independently review them for reasonableness based on the character of the representation and the results achieved. Gisbrecht v. Barnhart, 535 U.S. 789, 807-08 (2002). A court may reduce the fee if representation was substandard, if counsel caused unreasonable delay accumulating additional benefits, or if the award would be disproportionate to the time spent on the case.

Separately, when an attorney receives fees for the same work under both the EAJA and § 406(b), the attorney must refund the smaller of the two amounts to the claimant. Gisbrecht, 535 U.S. at 796.

Reasonableness Analysis

The court found the requested fees reasonable for the following reasons:

- Counsel's representation was successful, resulting in an award of benefits. - The fee agreement did not facially violate § 406(b) because it did not exceed 25% of past-due benefits, and contingency fees are common in Social Security cases. - The representation was not substandard, as reflected by the final result, and there was no evidence of significant or unreasonable delay. - Although counsel did not state the number of hours worked, his implied effective hourly rate of approximately $915 per hour was not unreasonable given the risk of a contingency arrangement, was not a windfall, and was comparable to rates approved in other Social Security cases in the District of Minnesota (the opinion cited cases approving effective rates of $970.65, $1,141.91, and $1,229.63 per hour).

EAJA Offset

Because counsel received $6,152.50 under the EAJA for the same work, he was required by law to refund that amount to Angela K. The court noted that counsel's motion incorrectly characterized this reduction as voluntary; the law mandates it. Rather than requiring a separate refund transaction, the court applied an offset approach — deducting the $6,152.50 EAJA amount directly from the § 406(b) award — citing circuit court authority supporting this method. The court clarified that because the EAJA amount is accounted for in the net award, counsel owes no further refund to Angela K.

Disposition