Cortez v. Saul

Background

The court previously granted Cortez’s motion for summary judgment and remanded her Social Security case to the Social Security Administration for further proceedings. After the remand, Cortez received a past-due benefits award totaling $71,949.84. The Commissioner withheld 25 percent of those benefits, or $12,446.50, for possible attorney’s fees.

Cortez’s fee agreement with her lawyer provided for a contingency fee of 25 percent of the award. Counsel asked the court to approve $12,446.50 under 42 U.S.C. § 406(b). Counsel had already received $3,600 under the Equal Access to Justice Act, a federal law that allows certain fee awards against the government. The Commissioner asked the court to assess whether the requested fee was reasonable and require counsel to refund the earlier Equal Access to Justice Act fees. Counsel agreed to make that refund.

Legal standard

Under Section 406(b), a court may approve a reasonable fee for a claimant’s lawyer when the court has entered a favorable judgment in a Social Security case. The fee cannot exceed 25 percent of the claimant’s past-due benefits. A court must independently review a contingency-fee request to ensure that it produces a reasonable result.

In assessing reasonableness, the court considers the quality of the representation, the results achieved, any delay caused by counsel, whether the fee is disproportionate to the time spent, and the risk counsel accepted by taking the case. A Section 406(b) award must also be offset by any Equal Access to Justice Act fee award.

Ruling

Judge Beeler held that the 25-percent contingency-fee agreement complied with the statutory limit and that the requested $12,446.50 fee was reasonable. The court granted the plaintiff’s counsel’s motion for attorney’s fees. Counsel must refund the $3,600 Equal Access to Justice Act fees to Cortez, resulting in a net remaining fee award of $8,846.50.