Dreesman v. Colvin

Background

Roger D. Dreesman brought the underlying case under the Social Security Act to challenge the Commissioner’s denial of Social Security Disability Insurance benefits. On June 30, 2017, the court reversed the Commissioner’s decision and remanded the case for further administrative proceedings. On remand, an Administrative Law Judge found Dreesman disabled and awarded $157,758.50 in retroactive benefits covering May 2012 through April 2019.

The Social Security Administration withheld 25 percent of that award, or $39,439.63, for possible attorney’s fees. Dreesman’s lawyer, Harvey P. Sackett, moved for an award under 42 U.S.C. § 406(b), which permits a court to approve a reasonable fee for an attorney who represented a claimant in court, up to 25 percent of the claimant’s past-due benefits. The parties’ representation agreement provided for payment from withheld past-due benefits. Dreesman later confirmed that Sackett could be paid up to 25 percent of those benefits.

The court had previously ordered $4,124.93 in fees under the Equal Access to Justice Act (EAJA), a statute that allows certain fee awards against the government. Any fee awarded under § 406(b) had to be offset by the EAJA award, meaning Sackett had to return the smaller fee amount to Dreesman.

Attorney’s-Fee Request

Sackett requested a gross § 406(b) fee of $23,439.63, approximately 14.9 percent of Dreesman’s past-due benefits, and a net fee of $19,314.70 after the EAJA offset. Sackett submitted a timesheet showing 22.65 hours of work, including three hours of paralegal work. The court calculated an unadjusted hourly rate of $1,034.86. Sackett also presented information about the risk that lawyers representing Social Security claimants in federal court would not recover fees and stated that his non-contingent hourly rate could reach $650.

The court explained that it first considers the lawful attorney-client fee agreement and then tests the requested amount for reasonableness. It may reduce a fee for substandard representation, delay designed to increase past-due benefits, or benefits that are unusually large compared with the time spent. The court found no evidence of substandard performance or delay. It also considered that Sackett represented Dreesman on a contingency basis for more than six years and assumed the risk of receiving no fee.

Disposition

The court found that Sackett met the requirements for a § 406(b) award and that the requested fee was reasonable in light of the results achieved, the time spent, and the risk undertaken. Although the implied hourly rate was high, the court treated that calculation only as an aid and focused primarily on the contingency agreement and the successful result.

The court granted Sackett’s motion for attorney’s fees. It directed the Commissioner to certify $19,314.70 under § 406(b), payable to Harvey P. Sackett, and to release the balance of the withheld past-due benefits to Dreesman.