Lee R. v. Kijakazi

Background

Lee R.’s Social Security case had previously been remanded to the Social Security Administration for further proceedings after Magistrate Judge Becky R. Thorson granted in part and denied in part Lee R.’s motion for summary judgment and denied the Commissioner’s motion for summary judgment. The remand resulted in an award of benefits. The Social Security Administration notified Lee R. that his past-due benefits totaled $115,277.90.

Lee R. had agreed to pay his counsel 25% of all past-due benefits if the case was favorably decided after an appeal to the Appeals Council. Twenty-five percent of the past-due benefits was $28,819.47. The agency, however, withheld only $7,200 for representative fees. Counsel therefore asked the court to award $28,819.47 under 42 U.S.C. § 406(b), the law allowing a court to approve reasonable fees for successful representation before the court. The Commissioner did not object to the motion, the requested amount, or the submitted documentation, but took no position on whether the amount was reasonable.

Reasonableness of the Fee

The court explained that 25% of past-due benefits is a statutory maximum, not an automatic fee. The court must independently review the requested fee and determine whether it is reasonable for the work performed. A reduction may be appropriate for inadequate representation, attorney-caused delay, or a fee that is large compared with the time spent.

The court found the requested amount reasonable. Counsel’s work was instrumental in obtaining benefits, and the record did not show substandard representation or attorney-caused delay. Counsel spent 45.5 hours on the matter, producing an effective hourly rate of $633.39. Although the court described that rate as potentially high in other settings, it was lower than effective hourly rates that courts in the district had approved in other Social Security fee cases.

Because $7,600 had previously been awarded under the Equal Access to Justice Act, the court also applied the rule requiring counsel to refund the smaller fee to the claimant when both types of fees are awarded. The court ordered counsel to refund the $7,600 EAJA award to Lee R.

Shortage of Withheld Benefits

The court recognized that the agency had withheld $7,200 even though the approved § 406(b) fee was $28,819.47. The court stated that the amount the agency withholds for direct payment does not limit the amount of fees the court may approve. It also held that the court could not order the Social Security Administration to pay the remaining balance from its own funds. The opinion noted that administrative remedies remained available to counsel concerning the shortage.

Order

Judge Tony N. Leung granted Lee R.’s motion for attorney fees under 42 U.S.C. § 406(b), awarded counsel $28,819.47, and ordered counsel to refund $7,600 to Lee R.