Nicholas J. v. Bisignano

Background

Nicholas J. filed a Social Security case with the assistance of counsel. On September 2, 2025, the court remanded the case to the Commissioner for further administrative proceedings under sentence four of 42 U.S.C. § 405(g). On November 14, 2025, the court awarded $8,000 in attorney fees under the Equal Access to Justice Act.

After remand, an Administrative Law Judge found Nicholas J. disabled. His notice of award stated that he was entitled to $82,727 in past-due benefits, with 25%, or $20,686.98, withheld to pay an approved attorney fee.

Nicholas J.’s April 16, 2025 fee agreement provided that his attorney could receive 25% of past-due benefits awarded for federal-court work if the case was successful. The agreement also provided that any Equal Access to Justice Act fee for the same work would be refunded or credited to Nicholas J., and that no more than 25% of past-due benefits would be taken for federal-court work.

Fee Motion and Positions

Nicholas J.’s attorney sought a total fee of $19,486.98 under 42 U.S.C. § 406(b), reduced by the previously paid $8,000 Equal Access to Justice Act fee, resulting in a requested net payment of $11,486.98. The Commissioner neither supported nor opposed the request but argued that the court should evaluate the reasonableness of the full $19,486.98 amount rather than only the net amount after the offset.

The attorney submitted a billing record showing 34.5 hours of attorney work and 5.5 hours of paralegal work. He argued that the fee was reasonable because the representation produced a remand and a favorable disability decision, the practice area required specialized experience, the firm had extensive experience with federal Social Security appeals, and the contingency arrangement involved a risk of receiving no fee.

Legal Standard

Section 406(b) permits a court to award a reasonable fee for an attorney’s federal-court representation of a successful Social Security claimant, up to 25% of the claimant’s past-due benefits. A contingency-fee agreement within that limit is not automatically reasonable; the court must independently review the requested fee.

A reduction may be appropriate if the representation was substandard, the attorney caused delay that increased the past-due-benefit fund, or the fee is unreasonably large compared with the time spent. When the court awards fees under both section 406(b) and the Equal Access to Justice Act for the same work, the attorney must refund the smaller fee to the claimant.

Court’s Analysis

The court found the requested fee reasonable. It found no basis in the record to conclude that the attorney’s work was substandard, caused undue delay, or involved disproportionate effort. The court concluded that the attorney spent an appropriate amount of time and obtained a full award of past-due benefits.

The $19,486.98 request was substantially higher than the $9,630 fee that would have resulted from the attorneys’ and paralegals’ stated standard hourly rates. After subtracting $660 attributed to paralegal work, the attorney portion of the fee produced a de facto hourly rate of $546. The court nevertheless considered the attorney and firm’s experience in federal Social Security appeals and the risk of nonpayment under the contingency arrangement. It concluded that the fee was not unreasonably large compared with the time spent.

Because the requested fee was less than 25% of Nicholas J.’s past-due benefits and the court found no reason to reduce it, the court determined that both the fee agreement and section 406(b) permitted the requested award. The $8,000 Equal Access to Justice Act fee was applied as an offset, leaving a net fee of $11,486.98.

Disposition

The court granted Nicholas J.’s Motion for Authorization of Attorney Fees under 42 U.S.C. § 406(b). It awarded his counsel $19,486.98, reduced by the prior $8,000 Equal Access to Justice Act award, for a net fee of $11,486.98 to be paid from Nicholas J.’s past-due benefits.