T.P. v. Saul

Background

The Social Security Administration initially denied T.P.’s application for disability insurance benefits in 2016 and again on reconsideration in January 2017. An administrative law judge later denied the benefits claim, and the agency’s Appeals Council upheld that decision in May 2019.

T.P. challenged the denial in federal court and retained Harvey Sackett as counsel under a contingent-fee agreement providing for a fee of no more than 25% of past-due benefits if counsel obtained a favorable result through judicial proceedings. On July 14, 2020, this court reversed the agency’s denial and remanded the case for further proceedings. The court also awarded T.P. $4,175.91 in fees under the Equal Access to Justice Act.

After the remand, administrative law judge Ruxana Meyer found that T.P. was disabled and entitled to disability insurance benefits. The agency awarded $86,987.50 in past-due benefits and withheld $21,747.00 for attorney’s fees. Sackett then moved under 42 U.S.C. § 406(b) for $17,571.09, representing the withheld amount less the previously awarded Equal Access to Justice Act fees. The Commissioner took no position on whether the requested fee was reasonable.

Legal standard

Section 406(b) allows a court that has entered a favorable judgment for a Social Security claimant to approve a reasonable attorney’s fee of no more than 25% of the claimant’s past-due benefits. When an attorney receives fees under both Section 406(b) and the Equal Access to Justice Act, the attorney must refund the smaller fee to the claimant.

Under the Supreme Court’s decision in Gisbrecht v. Barnhart and the Ninth Circuit’s decision in Crawford v. Astrue, the court first considers the contingent-fee agreement and then checks whether the resulting fee is reasonable. Relevant considerations include whether the attorney provided substandard representation, caused delay to increase the past-due benefits, or requested a fee that is unusually large compared with the time spent on the case.

Court’s analysis

The court found that the fee agreement and requested award were within the 25% statutory limit. It found no indication that Sackett provided substandard representation; instead, he had successfully challenged the agency’s benefits denial in federal court.

The court also found no improper delay. Sackett had requested two extensions to file his summary-judgment motion because he had administrative hearings and district-court briefs due at the same time. The extensions added two months to the case, but the court found no evidence of bad faith, and the Commissioner did not contest Sackett’s diligence.

The court recognized that the requested fee would produce a high effective hourly rate for 19.9 hours of work, especially compared with Sackett’s stated typical hourly rate of $435. The court nevertheless concluded that Sackett had addressed the concerns previously raised about his high effective rates. The court considered evidence that other courts had approved similar fees for Sackett and that other courts in the district had recently approved comparable Section 406(b) awards. It therefore found the requested contingent fee reasonable.

Disposition

Judge Edward M. Chen granted T.P.’s motion for attorney’s fees under Section 406(b) without reducing the requested fee amount. The order disposed of Docket No. 26.

The opinion contains an apparent numerical inconsistency: it identifies the prior Equal Access to Justice Act award as $4,175.91 but later says Sackett was expected to refund $4,715.91. The court’s stated requested Section 406(b) fee was $17,571.09, and the order granted that request without reduction.