C.C. v. Kijakazi

Background

Nancy McCombs represented C.C. under a contingent-fee agreement providing for up to 25% of past-due benefits received as a result of the case. C.C. had sought review of the Social Security Administration Commissioner’s decision denying disability insurance and Supplemental Security Income benefits.

Before any motions were filed, the court approved the parties’ agreement to send the case back to the agency and entered judgment in C.C.’s favor under the fourth sentence of 42 U.S.C. § 405(g). The court later approved a $1,500 fee award under the Equal Access to Justice Act, plus costs. On remand, an administrative law judge reversed the prior decision discontinuing C.C.’s benefits as of May 31, 2018. The Commissioner then informed C.C. that they were entitled to $53,488.51 in past-due benefits.

Fee request and parties’ positions

Counsel requested $13,372.12 under 42 U.S.C. § 406(b), which represented 25% of the past-due benefits. Counsel argued that the contingent-fee agreement was valid and reasonable because it required her to bear the risk of receiving no payment. She reported spending 7.25 hours on the case and argued that the requested fee was not an improper windfall.

The Commissioner said it could not agree or object to the fee because it was not a party to the agreement, but responded because it has a role resembling that of a trustee for C.C. in reviewing these requests. The Commissioner noted that the requested fee produced a very high effective hourly rate and suggested that the court consider whether it was a windfall.

Legal standard

Section 406(b) permits a court to approve a reasonable fee for an attorney who represented a successful Social Security claimant in court, subject to a limit of 25% of the claimant’s past-due benefits. Under Gisbrecht v. Barnhart, courts generally begin with the contingent-fee agreement and then test it for reasonableness. A court may reduce the fee based on poor representation, delay, or benefits that are disproportionate to the time spent. Courts may accept effective hourly rates above ordinary hourly rates because contingent-fee work involves a risk of loss, but a fee cannot amount to an unreasonable windfall.

Equal Access to Justice Act fees are separate fees paid by the government when its position was not substantially justified. When both types of fees are awarded, the attorney must return the smaller fee to the claimant; the Equal Access to Justice Act award offsets the fee awarded under Section 406(b).

Court’s analysis

The court found that C.C. had entered into a valid contingent-fee agreement and that the agreement deserved significant deference. It also found no evidence of delay or inadequate representation. Nevertheless, the court concluded that the requested amount would be a windfall.

Counsel reported 7.25 hours of work, but the court found that descriptions of many tasks suggested that even this amount was exaggerated. Much of the work involved basic legal or clerical tasks, including preparing a short form complaint and summons, mailing documents, and reviewing routine procedural orders. Counsel spent one hour and 45 minutes reviewing the record and 30 minutes handling communications and the stipulation concerning voluntary remand. No briefing occurred, so counsel did not prepare a summary-judgment motion.

The court concluded that, given the limited substantive legal work, a reasonable fee should not produce an effective hourly rate above $1,000, while accounting for the risk counsel assumed by accepting the case. It therefore calculated a reasonable fee of $7,250.

Disposition

Judge Joseph C. Spero granted in part and denied in part the fee motion and awarded reduced attorney’s fees of $7,250. Counsel was ordered to pay C.C. the Equal Access to Justice Act fees previously awarded in the case.