Gurzenda v. Berryhill

Background

Angelina Gurzenda sued to challenge the Commissioner of Social Security’s final decision denying her application for supplemental security income under Title XVI of the Social Security Act. In an earlier order, the court granted Gurzenda’s motion for summary judgment, reversed the administrative law judge’s denial, and remanded the matter for further proceedings. The Social Security Administration later awarded Gurzenda $39,365 in past-due benefits.

Gurzenda’s attorney, Josephine M. Gerrard, had a contingency-fee agreement allowing her to seek up to 25% of Gurzenda’s past-due benefits. The agreement also provided that if Gerrard received both a fee under 42 U.S.C. § 406(b) and a fee under the Equal Access to Justice Act, Gurzenda would receive a refund or credit for the smaller fee. The court had previously awarded $6,750 under the Equal Access to Justice Act, a statute that can require the United States to pay reasonable attorney’s fees to a prevailing party when the government’s position was not substantially justified.

The Fee Requests

Gerrard sought $3,091 under § 406(b), calculating that amount by subtracting the $6,750 Equal Access to Justice Act award from the maximum 25% fee. The Commissioner responded in a role resembling that of a trustee and did not take a position on whether the requested fee was reasonable. The Commissioner argued that the usual procedure would be to award the full 25% fee of $9,841 and require Gerrard to return the $6,750 Equal Access to Justice Act award to Gurzenda.

The court explained that the competing approaches produced the same overall result. Under Gerrard’s approach, she would receive the $6,750 government-paid fee plus $3,091 from Gurzenda’s benefits. Under the Commissioner’s approach, Gerrard would receive $9,841 from the benefits and return $6,750 to Gurzenda. In either calculation, Gerrard would receive total fees of $9,841, and Gurzenda would retain $36,274 in past-due benefits.

Analysis

Section 406(b) allows a court to award a reasonable fee for successful representation in a Social Security case, subject to a ceiling of 25% of the claimant’s past-due benefits. The court must review the requested fee for reasonableness, considering such matters as the quality of the representation, the result achieved, any attorney-caused delay, and whether the benefits are large compared with the time spent on the case. The court must also respect a lawful attorney-client fee agreement.

The court concluded that Gerrard’s method was permissible, although unusual. Subtracting the earlier Equal Access to Justice Act award from the fee otherwise payable from Gurzenda’s benefits accounted for the required offset between the two fee awards and credited Gurzenda with the smaller fee. The court found no case addressing this precise method but determined that it was consistent with the fee agreement and the statutory scheme.

The court also found that Gerrard’s total fees of $9,841 were reasonable. Gerrard had spent 67.1 hours on the case, producing an effective hourly rate of $146.66. The court noted that although Gerrard had sought several deadline extensions, much of the delay resulted from the complex history of Gurzenda’s multiple disability-benefit applications, and Gerrard ultimately achieved a favorable result.

Disposition

The court GRANTED the motion. Josephine M. Gerrard may recover $3,091 from Gurzenda’s past-due benefits, in addition to the $6,750 she had already received under the Equal Access to Justice Act. The Commissioner was ORDERED to distribute Gurzenda’s past-due benefits consistently with the order.