Munoz v. Saul

Background

This Social Security appeal was sent back to the agency for further proceedings by agreement of the parties and with the court’s approval. After the remand, Yolanda Munoz received past-due disability benefits. The Commissioner withheld 25 percent of those benefits, or $38,644.75.

Munoz’s attorney had a fee agreement providing for a 25-percent contingency fee from past-due benefits. The attorney previously received $4,000 under the Equal Access to Justice Act, a federal law that allows certain attorney-fee awards against the government. The attorney agreed to refund that $4,000 to Munoz.

Fee request

The attorney requested $36,000 under 42 U.S.C. § 406(b), which permits a court to approve a reasonable fee for a claimant’s attorney when the court has rendered a favorable judgment in a Social Security case. The statute limits the fee to 25 percent of the claimant’s past-due benefits. The Commissioner stated that he neither supported nor opposed the request.

The attorney also asked the court to apply a 3.27 multiplier. The court declined that request.

Court’s analysis and ruling

The court explained that it independently reviews a contingency-fee agreement to ensure that it produces a reasonable result. Relevant considerations include the quality of the representation, the results achieved, attorney-caused delay, whether the benefits are disproportionate to the time spent, and the risk the attorney accepted by taking the case.

The court found that the 25-percent fee agreement was within the statutory limit and that the requested $36,000 fee was reasonable. It granted the attorney’s motion for fees under Section 406(b). Because Section 406(b) fees must be offset by any Equal Access to Justice Act award, the attorney must refund the $4,000 previously received. The resulting net fee is $32,000, payable from Munoz’s past-due benefits under agency policy.