Annabi v. Colvin

Background

Amjed Farid Annabi moved under 42 U.S.C. § 406(b) for approval of a contingent-fee arrangement with Charles E. Binder and Harry J. Binder, Attorneys at Law, LLP. The agreement allowed the firm to seek fees under sections 406(a) and/or 406(b) if the court remanded Annabi’s case and he later received past-due benefits, but limited the fee to 25% of those benefits due to Annabi and his family.

The court had previously granted Annabi’s motion for judgment on the pleadings and remanded the case to the Social Security Administration. On remand, Annabi obtained a finding of disability and an award of past-due benefits. The present motion sought approval of a $28,040.25 payment to attorneys Charles E. Binder, Daniel S. Jones, and Patrick H. Busse. The Commissioner filed no objection.

Legal Standard

Under 42 U.S.C. § 406(b)(1)(A), a court may approve a reasonable attorney fee in a Social Security case, but the fee may not exceed 25% of the claimant’s past-due benefits. The court explained that contingent-fee agreements are the primary way fees are set in successful Social Security cases, while section 406(b) requires the court to independently review whether the agreement produces a reasonable result.

The court considered whether the fee was within the 25% limit, whether the agreement resulted from fraud or attorney overreaching, and whether the fee would give the attorneys an improper windfall compared with the services provided.

Court’s Analysis

The court found that all three considerations favored approval. The requested fee was within the statutory limit. Nothing in the record showed fraud or overreaching. The attorneys’ time records showed 31.4 hours of work related to the case, including preparation and filing of a 28-page memorandum supporting Annabi’s motion for judgment on the pleadings. That work was followed by remand, and Annabi later received the disability finding and past-due benefits he sought.

The court also addressed a prior $6,248.29 fee paid under the Equal Access to Justice Act. Counsel acknowledged that this amount had to be returned to Annabi after the section 406(b) payment. The court explained that when fees are awarded under both statutes, the claimant’s attorney must refund the smaller fee, up to the point at which the claimant receives all of the past-due benefits.

Disposition

The court granted Annabi’s unopposed motion. It directed the Social Security Administration to approve payment of $28,040.25 to attorney Binder. Upon receiving that payment, Binder was directed to promptly refund $6,248.29 to Annabi.