Smith v. Kijakazi

Background

Theresa Ann Smith applied for Social Security Disability Benefits and Supplemental Security Income in February 2016. The Social Security Administration denied her application initially and again after reconsideration. An administrative law judge later denied the claim, and the Appeals Council denied review.

Smith then sought judicial review in federal court. On the Commissioner’s unopposed motion, the court remanded the case. The remand made Smith eligible to seek attorney’s fees under the Equal Access to Justice Act, and the court awarded $6,681.60 in those fees. The case was stayed while the agency reconsidered Smith’s claim.

After the remand, the Social Security Administration awarded Smith $81,604 in past-due disability benefits and $62,577 in past-due Supplemental Security Income. The agency withheld 25% of the disability-benefits award—$20,401—for representative fees. Smith moved for an award of that amount under 42 U.S.C. § 406(b)(1)(A), with counsel required to refund the previously awarded Equal Access to Justice Act fees.

The opinion notes a discrepancy concerning the Supplemental Security Income award. Smith stated that an additional $2,199 in past-due benefits might be involved, with a possible fee of $549.75. But the award document stated that $62,577 was owed and did not show that $549.75, or any other amount, had been withheld. The court therefore considered only the $20,401 withheld from the disability-benefits award.

Legal standard

Section 406(b)(1)(A) permits a court to award a successful Social Security claimant’s lawyer a reasonable fee for work performed in federal court, up to 25% of the claimant’s past-due benefits. When the representation is governed by a contingency-fee agreement, the court independently reviews the agreement and the requested amount for reasonableness.

The court considers the agreement, the quality of the representation, the results achieved, whether counsel caused delay, and whether the requested fee is disproportionately large compared with the time spent and the complexity of the case.

Court’s analysis and ruling

The court found that counsel’s representation was successful because Smith received $81,604 in past-due disability benefits. The fee agreement allowed counsel to seek more than $6,000, but no more than 25% of past-due benefits, so both the agreement and Section 406(b) permitted the requested fee.

The court found the $20,401 fee reasonable. The agreement complied with the statutory limit, the record involved more than 1,300 pages, and there was no evidence of deficient representation or significant undue delay. Although counsel estimated that the requested amount represented an effective rate of approximately $900 per hour, the court noted that comparable rates approved in the District of Minnesota were higher in some cases. It therefore concluded that the fee would not be an improper windfall.

Judge Susan Richard Nelson granted Smith’s motion for attorney’s fees and awarded counsel $20,401. The award was subject to counsel’s refund of $6,681.60 in previously awarded Equal Access to Justice Act fees to Smith. The order did not award or otherwise resolve any additional fee based on the Supplemental Security Income award.