Matthew L. v. O'Malley

Background

Matthew L. applied for Disability Insurance benefits and was denied. He filed this case challenging the Social Security Administration’s decision and hired Wes Kappelman and David Christianson under a fee agreement that provided for payment of 25% of his past-due benefits if the appeal succeeded.

After the administrative record was filed, the parties agreed to send the case back to the Social Security Administration for a new hearing. The court ordered that remand in November 2021 and later awarded $896.82 in attorney’s fees under the Equal Access to Justice Act, a law that can require the government to pay a successful claimant’s fees when the government’s position was not substantially justified.

On remand, the Social Security Administration found Matthew L. eligible for Disability Insurance benefits beginning in December 2017. His attorneys sought $5,125 in fees under 42 U.S.C. § 406(b), which governs fees for an attorney’s work representing a Social Security claimant in federal district court. The request covered 4.1 hours of work. The Commissioner took no position on the motion.

Legal standard

Section 406(b) allows a court to approve a reasonable fee for a successful Social Security claimant’s attorney, subject to a limit of 25% of the claimant’s past-due benefits. Under Supreme Court precedent, the court must independently review the fee arrangement and may reduce the requested amount if the representation was poor, the attorney caused unnecessary delay, or the fee was too large in relation to the work performed.

Analysis

The requested $5,125 fee worked out to $1,250 per hour. The court stated that this appeared excessive and was at the high end of fees previously found reasonable in the district. Nevertheless, the court found no indication that counsel performed poorly or caused unnecessary delay. The Social Security Administration had agreed to remand after the case was filed, and counsel timely sought fees after receiving notice of the past-due benefits.

The court also relied on the 25% contingent-fee arrangement as an appropriate starting point for evaluating reasonableness. It noted that counsel had capped their combined fees for work before the Social Security Administration and the federal court at 25% of the past-due benefits, even though the 25% statutory cap applies to federal-court fees alone. The court concluded that the requested federal-court fee was reasonable and would not reduce it.

Order

Judge John F. Docherty granted Matthew L.’s motion. The order directed the Social Security Administration to pay David L. Christianson $5,125 in attorney’s fees under Section 406(b) within 30 days of the order. It also directed Matthew L.’s counsel to refund Matthew L. the $896.82 previously awarded under the Equal Access to Justice Act within 30 days after Christianson received the Section 406(b) payment.