Phillip v. Commissioner of Social Security

Background

Sandra Phillip filed an action under 42 U.S.C. § 405(g) seeking review of the denial of Social Security benefits. On May 9, 2019, the court remanded the case for further proceedings. After a second hearing before an administrative law judge, Phillip was found disabled and entitled to benefits. The Social Security Administration later notified her that she would receive retroactive benefits and withheld $11,223.50, representing 25 percent of her past-due benefits, for an approved representative’s fee.

Phillip’s federal-court lawyer, Daniel A. Osborn of Osborn Law, P.C., moved under 42 U.S.C. § 406(b) for $5,225 in attorney’s fees. The court had previously approved $1,040.40 in fees under the Equal Access to Justice Act. The Commissioner stated that he deferred to the court’s discretion regarding the timeliness and reasonableness of the requested § 406(b) fee.

Timeliness

The court explained that a § 406(b) fee request generally must be filed within the 14-day period in Federal Rule of Civil Procedure 54(d)(2)(B), plus three days for mailing, but that the period can be extended when counsel must wait for the agency to calculate benefits after a remand. The period begins when the claimant or counsel receives notice of the benefits calculation, and the deadline may be enlarged when circumstances warrant.

The Social Security Administration’s notice was dated November 8, 2020, but Osborn stated that he did not receive it until January 8, 2021, because another firm represented Phillip during the administrative proceedings and received the notice. Osborn filed the fee motion on January 11, 2021. The court found the application timely because it was filed two days after Osborn received the notice and because his firm had previously requested updates about the case.

Reasonableness of the Fee

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 percent of the claimant’s past-due benefits. The court began with the attorney-client fee agreement and considered whether the requested amount was unreasonable. It examined whether the fee was within the statutory cap, whether there was fraud or overreaching, and whether the fee would be an improper windfall.

The court found that $5,225 was less than 25 percent of Phillip’s past-due benefits. It found no evidence of fraud or overreaching. The court also concluded that the fee was not a windfall because counsel’s efforts contributed to the remand, although the case did not proceed to briefing and the complaint was largely boilerplate. Osborn reported spending 5.5 hours on the case, producing a de facto hourly rate of $950. The court noted that other courts in the district had approved similar or higher hourly rates.

Ruling

Judge Sarah Netburn determined that the request was timely and reasonable. The court awarded Phillip’s counsel $5,225 in fees under § 406(b), stating that the amount represented less than 25 percent of Phillip’s past-due benefits. Upon receiving that amount, counsel was directed to remit the previously awarded $1,040.40 in Equal Access to Justice Act fees to Phillip. The Clerk of Court was requested to terminate the motion at ECF No. 34.