Cruz v. Colvin

Background

Carlos G. Cruz originally asked the court to review the Commissioner of Social Security’s denial of his application for disability insurance and supplemental security income. On December 19, 2017, the court granted in part and denied in part Cruz’s motion for summary judgment, denied the Commissioner’s cross-motion for summary judgment, and sent the case back to an administrative law judge for further proceedings.

Cruz later received a fully favorable administrative decision. The administrative law judge found that he was disabled under the Social Security Act from July 1, 2011, through September 21, 2017, the date of his death. The Social Security Administration notified Cruz’s survivor, Brandon Cruz, that more than $48,360.90 in benefits were owed before deductions for the period from December 2011 through August 2017.

Cruz then moved for attorney’s fees under 42 U.S.C. § 406(b). He requested $2,957.89, representing the difference between 25 percent of the past-due benefits and the $9,124.61 previously awarded under the Equal Access to Justice Act. The Commissioner did not indicate opposition after Cruz’s counsel refiled a declaration with its supporting exhibits.

Legal standard

Section 406(b) permits a court to approve a reasonable fee for a lawyer who represented a claimant in court, subject to a limit of 25 percent of the claimant’s past-due benefits. The Supreme Court has explained that courts review contingent-fee agreements to ensure that they produce reasonable results. The court must consider the agreement and reduce the fee if the representation was inadequate, the lawyer delayed the case, or the fee would be an improper windfall.

Fees under Section 406(b) are paid from the claimant’s past-due benefits. When the same work also supported an Equal Access to Justice Act award, the lawyer must credit the Equal Access to Justice Act amount against the Section 406(b) fee so the lawyer is not paid twice for the same work.

Court’s analysis

The court found that Cruz and his counsel had entered into a contingent-fee agreement providing for a fee of 25 percent of Cruz’s total past-due benefits, including past-due benefits for auxiliary beneficiaries. The agreement also required crediting any Equal Access to Justice Act fee award against the amount paid from Cruz’s past-due benefits. The court therefore found the agreement enforceable.

The court found no reason to reduce the fee. It stated that nothing in the record showed substandard or delayed representation. Counsel had successfully litigated the summary-judgment motion that led to further agency consideration and had persuaded the administrative law judge to find in Cruz’s favor on remand. The court also found that the total fee owed under the agreement, $12,082.50, was reasonable in light of approximately 55 hours of work and was not a windfall.

Because the requested $2,957.89 equaled the difference between the $12,082.50 fee under the agreement and the $9,124.61 Equal Access to Justice Act award, the court found that the request satisfied the required credit.

Disposition

The court granted Cruz’s motion for $2,957.89 in attorney’s fees under 42 U.S.C. § 406(b).