Theodoros K. v. Kijakazi

Background

Theodoros K. applied for Social Security disability benefits in March 2018, alleging that his disability began in January 2017. The claim was denied initially and on reconsideration. An administrative law judge later denied the application, and the Social Security Administration’s Appeals Council declined further review.

Theodoros K. sought judicial review in the District of Minnesota. Both sides moved for summary judgment. Magistrate Judge Elizabeth Cowan Wright recommended granting Theodoros K.’s motion in part, denying the Commissioner’s motion, and reversing and remanding the administrative decision. The recommendation concluded that substantial evidence did not support the administrative law judge’s decision and identified issues involving the evaluation of Theodoros K.’s subjective complaints, medical opinions and prior administrative findings, residual functional capacity, and the conclusions at steps four and five of the disability analysis. The district court accepted the recommendation and remanded the case in February 2022.

On remand, the administrative law judge issued a fully favorable decision in December 2022 and awarded benefits beginning in July 2017. The Commissioner awarded $85,060.92 in past-due benefits. The court had previously awarded $9,700 in attorney’s fees and $400 in costs under the Equal Access to Justice Act. The attorney’s-fee motion at issue sought $21,265.23 under 42 U.S.C. § 406(b)(1), representing 25 percent of the past-due benefits.

Analysis

Section 406(b) permits a court to award a reasonable fee to counsel who successfully represented a claimant before the court, subject to a statutory cap of 25 percent of the claimant’s past-due benefits. The court independently reviews whether the requested fee is reasonable.

The court found that the representation was ultimately successful because it led to the award of $85,060.92 in past-due disability benefits. It also found the requested fee reasonable. The fee agreement called for 25 percent of past-due benefits, which complied with the statutory cap. The court found no indication that counsel caused delay or provided substandard representation. Counsel had spent 53.5 hours on the case, producing an effective hourly rate of $397.48, and the court found that the hours were not excessive given the extensive summary-judgment briefing and the 1,440-page administrative record.

The court also addressed the relationship between fees under Section 406(b) and fees under the Equal Access to Justice Act. When both types of fees are awarded for the same work, counsel must refund the smaller fee to the claimant. Because the $9,700 Equal Access to Justice Act award was smaller, counsel had to refund that amount to Theodoros K.

Theodoros K. had requested that the government pay counsel only the $11,565.23 balance after subtracting the Equal Access to Justice Act fees. The Commissioner did not oppose the fee motion but objected to that payment and refund method. The court chose the usual method: awarding the full Section 406(b) amount for payment to counsel, with counsel required to refund the $9,700 Equal Access to Justice Act award directly to Theodoros K.

Order

Judge Katherine Menendez granted in part Theodoros K.’s motion for attorney’s fees under 42 U.S.C. § 406(b). The court awarded $21,265.23 in fees, ordered the government to pay that amount within 30 days directly to attorney Frederick J. Daley, Jr., and required counsel to refund the previously awarded $9,700 in Equal Access to Justice Act fees directly to Theodoros K.