X.S. v. Kijakazi

Background

Richard Zieman represented X.S. under a contingent-fee agreement providing for a fee equal to 25% of past-due benefits received as a result of the case. X.S. and the Commissioner filed competing motions for summary judgment. The court granted X.S.’s motion, reversed the Commissioner’s decision, and remanded the case for an award of benefits.

The court later approved a stipulated award of $5,839 under the Equal Access to Justice Act (EAJA), which can provide fees payable by the United States when the government’s position was not substantially justified. The Social Security Administration then issued a notice stating that X.S. had been awarded $88,900 in past-due benefits and that $7,200 in attorney fees had been withheld and paid to counsel. Counsel stated that the agency appeared to have approved an administrative-level fee agreement rather than withholding the full contingent fee while the court considered the requested judicial fee. Counsel said he had asked the agency to correct that issue.

Counsel asked the court to award $22,225 under 42 U.S.C. § 406(b), which governs fees for representation in court in Social Security cases. He did not seek fees based on auxiliary benefits payable to X.S.’s dependent. Counsel submitted records showing 28.45 hours of work.

Legal standard

Under § 406(b), a court may award a reasonable fee for an attorney’s representation of a claimant in court, up to 25% of the claimant’s past-due benefits resulting from the judgment. Under the Supreme Court’s approach in Gisbrecht v. Barnhart, courts first consider the contingent-fee agreement and then test the requested fee for reasonableness. A court may reduce a fee for poor performance, delay, or benefits that are disproportionate to the time spent. Courts may approve an effective hourly rate above ordinary hourly rates when the attorney worked under a reasonable contingent-fee agreement involving a substantial risk of losing.

When both § 406(b) and EAJA fees are awarded, the attorney must refund the smaller fee to the claimant. The EAJA award offsets the § 406(b) award.

Court’s analysis

The court found the requested $22,225 reasonable. The amount represented 25% of X.S.’s $88,900 in past-due benefits. The court relied on the valid contingent-fee agreement, counsel’s timesheets, and its finding that the hours were reasonable. It found no evidence that counsel’s work was substandard or that the fee was disproportionate to the work performed. The court calculated an effective hourly rate of $781.20 and found it within the range of rates previously approved under § 406(b). The court also noted counsel’s excellent result for X.S. and the risk counsel accepted by working on a contingent basis.

Disposition

The court granted the motion. It awarded counsel $22,225 in attorney fees under 42 U.S.C. § 406(b), subject to offsets for the amounts counsel had already received from the Social Security Administration and under the EAJA.