Pizano v. Berryhill

Background

This opinion concerns attorney fees after an earlier Social Security appeal. The court had granted in part Juan Antonio Pizano’s motion for summary judgment, sent the case back to the Social Security Administration for further proceedings, and entered judgment. The court later approved a $3,500 fee for Pizano’s lawyer, Marc Kalagian, under the Equal Access to Justice Act.

After the case was sent back, the Social Security Administration found Pizano disabled under the Social Security Act and awarded him $57,369 in past-due disability benefits. The agency withheld 25 percent of those benefits, or $14,342.25, in case attorney fees were payable under 42 U.S.C. § 406(b). Kalagian then moved for $13,500—about 23.5 percent of the past-due benefits—under § 406(b) and the contingent-fee agreement with Pizano, which provided for 25 percent of past-due benefits. Kalagian acknowledged that he had to repay Pizano the earlier $3,500 fee, leaving a net fee award of $10,000 after reimbursement.

The record showed that Kalagian served the motion on Pizano by mail. The government did not oppose the motion, although it stated that it took no position on whether the requested fee was reasonable. Pizano filed no response. The court decided the matter without oral argument.

Legal standard

Section 406(b) allows a court to approve a reasonable attorney fee in a successful Social Security case, up to 25 percent of the claimant’s past-due benefits. Courts generally begin with a valid contingent-fee agreement and independently review it for reasonableness. A court may reduce the fee if the lawyer provided substandard representation, delayed the case to increase the benefits, or requested a fee that was excessive compared with the time spent and results obtained.

A lawyer may receive fees under both § 406(b) and the Equal Access to Justice Act, but must refund the smaller fee to the claimant. The court also explained that a fee should not be judged solely by dividing it by the number of hours worked; the quality of the representation and the result remain important.

Court’s analysis

The contingent-fee agreement was within the statutory 25-percent limit, and Kalagian requested less than that maximum. The court found that he successfully pursued the appeal and obtained an excellent result for Pizano. Nothing in the record suggested inadequate representation or delay intended to increase the fee.

Kalagian’s office spent 20.9 hours on the matter, including 18.8 hours by Kalagian and 2.1 hours by his paralegal. The requested fee produced an effective hourly rate of $645.93, or $718.09 if the paralegal’s time was excluded. Those figures were higher than the hourly rates listed in the time records, but the court concluded that the fee was not unreasonable merely because of that comparison. It found that the past-due benefits were not disproportionate to the time spent and that the fee did not create an improper windfall.

Disposition

Judge Demarchi granted the motion for fees under § 406(b) and awarded Kalagian $13,500. The order directed Kalagian to promptly reimburse Pizano the $3,500 previously paid under the Equal Access to Justice Act.