DeJesus v. Berryhill

Background

Adane P. DeJesus sought Supplemental Security Income and Disability Insurance Benefits, alleging that her disability began on September 6, 2011. An administrative law judge initially found her not disabled in 2014. After an earlier round of proceedings, a second administrative law judge again found her not disabled in 2016.

DeJesus’s lawyers then filed this federal-court case. On March 9, 2020, the court granted DeJesus’s motion for judgment on the pleadings and sent the case back to the Social Security Administration for further proceedings. The Appeals Council sent the case to another administrative law judge, who found on May 10, 2021, that DeJesus was disabled as of September 6, 2011. The Social Security Administration later issued a notice stating that $23,954.38 was being withheld from DeJesus’s past-due benefits for possible payment of attorneys’ fees.

The firm had represented DeJesus in administrative and federal-court proceedings. Three of its attorneys reported a combined 38.2 hours of federal-court work. The firm’s fee agreement allowed payment of up to 25 percent of past-due benefits if the case was remanded and benefits were awarded. The firm also had previously received a $7,400 fee award under the Equal Access to Justice Act, a federal law that can provide fees when a person prevails against the government.

Fee Standard

Section 206(b)(1) of the Social Security Act, 42 U.S.C. § 406(b)(1), permits a court to approve a reasonable fee for a lawyer who represented a claimant in federal court, subject to a limit of 25 percent of the claimant’s past-due benefits. The court must independently review a contingency-fee agreement to ensure that it produces a reasonable result.

The court considered whether the fee was within the 25-percent limit, whether the agreement resulted from fraud or overreaching, and whether the fee would give the lawyers an unearned windfall. In evaluating a possible windfall, the court also considered the lawyers’ ability and experience, their efficiency, the length and nature of their representation, the result achieved, the claimant’s satisfaction, and the uncertainty and risk of receiving no payment in a contingency-fee case.

Court’s Analysis

The parties agreed that the motion was timely, that the requested amount equaled 25 percent of DeJesus’s past-due benefits, and that the fee agreements supported the request. The court found no fraud or overreaching.

The court found that the three attorneys had substantial experience handling Social Security proceedings and had achieved the result efficiently. The requested amount represented a de facto hourly rate of $627.08, which the court found within the range of reasonable rates in disability cases in the Second Circuit. The court also considered that the firm had represented DeJesus at both the administrative and federal-court levels over nearly years, had obtained two remands, and had ultimately obtained past-due and ongoing monthly benefits.

The court concluded that the requested fee was not a windfall. When a lawyer receives fees under both Section 406(b) and the Equal Access to Justice Act, the lawyer must refund the smaller amount to the client. Here, the firm was required to refund the $7,400 EAJA fee to DeJesus.

Disposition

The court granted the motion. It awarded the firm $23,954.38 under Section 406(b) and ordered the firm to promptly refund $7,400 to DeJesus. The clerk was directed to close the fee-motion docket entry.