Johnson v. Saul

Background

David Johnson applied for disability benefits in 2013, but the Social Security Administration denied his application. After an earlier related proceeding and a later lawsuit, the court remanded the matter to the agency for further proceedings. An Administrative Law Judge then found that Johnson was disabled from March 2011 through December 2017 and entitled to benefits.

The Social Security Administration later determined that Johnson was owed $129,589.00 in past-due benefits and withheld 25%, or $32,397.25, for a possible attorney-fee request. The agency also withheld $4,227.00 from benefits awarded to one child and $11,958.00 from benefits awarded to another child. Those amounts totaled $48,582.25.

Attorney Christopher James Bowes had previously received $10,739.08 in attorney’s fees under the Equal Access to Justice Act. Johnson’s motions under Section 406(b) of the Social Security Act sought approval of the full $48,582.25 fee but asked the court to direct payment of only $37,841.17 to counsel, with the difference accounted for through the earlier Equal Access to Justice Act award.

Court’s analysis

The court first considered timeliness. Counsel received notice of Johnson’s award on September 6, 2022, and filed the initial motion ten days later. Counsel received the notices concerning the children’s awards on November 15, 2022, and filed the supplemental motion fourteen days later. The court therefore found both motions timely.

The court then reviewed whether the requested fee was reasonable. The contingency percentage was within the statutory 25% limit, and the record showed no fraud or overreaching in the fee agreements. Although the requested fee amounted to a de facto hourly rate of $856.83 based on counsel’s 56.7 hours of recorded work, the court concluded that this did not make the fee an improper windfall. It considered counsel’s experience, the length of the attorney-client relationship, the work performed in the earlier related proceeding and this action, the results obtained, and the uncertainty of success in the contingency representation.

The court separately rejected the request for a “net” fee. It explained that when an attorney receives fees under both Section 406(b) and the Equal Access to Justice Act for the same representation, the attorney must refund the smaller fee to the client. The court concluded that directing the Social Security Administration to pay counsel $37,841.17 instead would not comply with the governing statutes and precedent.

Disposition

The court granted in part Johnson’s two fee motions. It awarded Bowes $48,582.25 in attorney’s fees, to be paid from the amounts withheld by the Commissioner for that purpose. It did not direct payment of the requested net fee and directed Bowes to return the $10,739.08 in previously awarded Equal Access to Justice Act fees to Johnson.