Vega v. Berryhill

Background

Orlando Vega moved for approval of attorney fees under Section 406(b) of the Social Security Act. His written contingency-fee agreement with attorney Lewis B. Insler provided for a fee of 25% of any past-due benefits obtained after a successful court remand and favorable decision on remand.

The court had previously remanded Vega’s case to the Social Security Administration, which later found him disabled and awarded past-due benefits. The Social Security Administration withheld $28,645 from those benefits for possible legal fees. Insler sought approval of a $15,000 fee, which was less than 25% of the past-due benefits. The Commissioner did not object.

Insler had also received $6,947.61 in fees under the Equal Access to Justice Act. Vega’s motion acknowledged that Insler would have to return that amount to Vega if the Section 406(b) fee was approved.

Court’s analysis

Section 406(b) permits a court to approve a reasonable attorney fee of no more than 25% of a claimant’s past-due benefits. The court explained that contingency-fee agreements are the usual way fees are set in successful Social Security cases, but the court must independently review the requested fee for reasonableness.

The court considered whether the requested fee exceeded the 25% limit, whether the agreement resulted from fraud or improper pressure, and whether the fee would be an unjustified windfall to counsel. It found that all three considerations favored approval. The requested fee was within the statutory limit, there was no evidence of fraud or improper pressure, and Insler had spent 32.91 hours on the matter, including researching and drafting legal memoranda addressing a 620-page administrative record.

Ruling

The court granted Vega’s unopposed motion. It directed the Social Security Administration to approve payment of $15,000 to Lewis B. Insler and ordered Insler to promptly refund $6,947.61 to Vega upon receiving that payment. Judge Ona T. Wang signed the opinion and order.