J.P. v. Kijakazi

Background

J.P. brought a claim for disability insurance and supplemental security income benefits under Titles II and XVI of the Social Security Act. Before the parties filed dispositive motions, they stipulated to a voluntary remand, meaning the case was sent back to the Social Security Administration for further proceedings. The court approved the remand and awarded Olinsky Law Group $1,255.12 in fees under the Equal Access to Justice Act.

After the remand, J.P. prevailed on her disability claim and received $120,088.90 in past-due benefits. The Social Security Administration withheld $30,024.18 from those benefits for possible attorney fees. J.P.’s contingency-fee agreement allowed Olinsky Law Group to ask the court for 25% of her past-due benefits for its federal-court representation. The firm instead requested $11,100, approximately 9.2% of the past-due benefits.

Parties’ Positions

Olinsky Law Group argued that the requested fee was reasonable under 42 U.S.C. § 406(b), which permits a court to award a reasonable fee for an attorney’s representation of a successful Social Security claimant in federal court, up to 25% of the past-due benefits. The firm served J.P. with the motion, but she did not object or otherwise respond.

The Commissioner took no position on whether the requested fee was reasonable. The Commissioner suggested that, if the court awarded the § 406(b) fee, it should separately order Olinsky Law Group to refund J.P. the $1,255.12 previously awarded under the Equal Access to Justice Act.

Court’s Analysis

The court explained that a contingency-fee agreement is the primary way fees are set in successful Social Security cases, but the court must independently review the agreement to ensure that the result is reasonable. Relevant considerations include the quality of the representation, the result achieved, whether counsel caused delay to increase the benefits, and whether the benefits are unusually large compared with the time spent.

Olinsky Law Group obtained a favorable result for J.P., who would receive more than $100,000 in past-due benefits even after the firm’s fees were deducted. Nothing in the record suggested substandard representation or delay. The firm’s attorneys and paralegals spent a combined 7.4 hours on the federal-court case because the Commissioner agreed to remand before briefing on dispositive motions. The requested fee produced an effective hourly rate of $1,500 when all timekeepers were counted, or more than $3,000 based only on attorney time. The court found those rates high but concluded they were not outside rates approved in other cases in the district, particularly because the firm had accepted the risk of nonpayment under a contingency arrangement. The requested $11,100 was also substantially below the 25% limit.

Disposition

Judge Virginia K. Demarchi granted the motion for fees under § 406(b) and awarded Olinsky Law Group $11,100. The court also ordered Olinsky Law Group to refund J.P. the $1,255.12 in previously awarded Equal Access to Justice Act fees.