Jody A. E. v. Saul

Background

Jody A. E. challenged the Commissioner of Social Security’s final decision denying disability benefits. The court previously adopted a recommendation that the matter be sent back to the Social Security Administration because the administrative law judge had improperly considered a consulting examiner’s opinion. The Social Security Administration later issued notices stating that Jody A. E. and her daughter were eligible for Social Security Disability benefits from December 2012 onward.

The Social Security Administration withheld $29,388.25, equal to one-quarter of the past-due benefits, for possible payment of attorney’s fees. Jody A. E.’s fee agreement with Greeman Toomey PLLC allowed counsel to file a petition seeking more than $6,000 but no more than 25% of the past-due benefits for work in federal court. Counsel had previously received $3,173.95 in fees under the Equal Access to Justice Act, a separate federal fee statute.

Fee request and parties’ arguments

Counsel asked the court to approve $29,388.25 in fees under 42 U.S.C. § 406(b), with counsel refunding the previously awarded $3,173.95 in Equal Access to Justice Act fees to Jody A. E. Counsel stated that it had represented Jody A. E. since 2012, prepared for two administrative hearings, filed one federal court action, and had not caused delay that increased the amount available for fees.

The Commissioner opposed the request as unreasonable and excessive. The Commissioner noted that counsel had reported 23.9 hours of work on the federal court action, which would produce an effective hourly rate of $1,229.63 if the full requested fee were attributed to those hours.

Court’s analysis

Section 406(b) requires the court to independently review contingent-fee arrangements in Social Security cases to ensure that they produce reasonable results. A fee may not exceed 25% of past-due benefits. Even within that limit, counsel must show that the requested fee is reasonable for the services provided. A reduction may be appropriate if the representation was substandard, counsel caused delay, or the benefits were large compared with the time spent.

The court acknowledged that the effective hourly rate appeared excessive when viewed alone. It nevertheless concluded that a 25% contingency fee was not necessarily unreasonable in a Social Security case, considering the contingent nature of the litigation, the work performed, the results achieved, and Jody A. E.’s signed agreement to the requested fee.

Ruling

The court granted Plaintiff’s Motion for Attorney Fees Under 42 U.S.C. § 406(b). It awarded Plaintiff’s counsel $29,388.25 and ordered counsel to refund $3,173.95 in previously awarded Equal Access to Justice Act fees to Jody A. E.