Fortuna v. Commissioner of Social Security

Background

Juan Fortuna brought this action under 42 U.S.C. § 405(g), challenging the Commissioner of Social Security’s decision denying his application for disability insurance benefits and finding him not disabled. Fortuna moved for judgment on the pleadings, and the Commissioner filed a cross-motion.

On March 15, 2021, the court granted each motion in part and denied each motion in part. It ordered a remand for further proceedings before the Social Security Administration under sentence four of § 405(g), and judgment was entered on March 17, 2021. After the remand, an administrative law judge found Fortuna disabled and entitled to benefits. The Social Security Administration later issued a Notice of Award stating that Fortuna’s past-due benefits totaled $91,171.10.

Fortuna’s attorney, Daniel A. Osborn, filed an application under 42 U.S.C. § 406(b) for $22,792.78 in attorney’s fees. That amount represented 25% of Fortuna’s past-due benefits and matched the contingency-fee agreement. The Commissioner did not object and left the reasonableness determination to the court. Osborn had previously received $8,608.00 in fees under the Equal Access to Justice Act for the same district-court work.

Timeliness

The court held that the application was timely. Under the governing rule, a fee application generally must be filed within 14 days after judgment. For Social Security cases remanded for further proceedings, however, the deadline is extended until 14 days after the attorney receives notice of the benefits calculation. Osborn filed the application on September 29, 2022, 13 days after the Social Security Administration issued the Notice of Award.

Reasonableness of the Fee

Section 406(b) permits a court to award a reasonable fee for an attorney’s successful representation in federal court, subject to a cap of 25% of the claimant’s past-due benefits. The court began with the contingency-fee agreement and considered whether the requested amount was unreasonable because of the statutory cap, fraud or overreaching, or an improper windfall.

The court found that the requested fee was within the 25% cap and that there was no evidence of fraud or overreaching. It then applied factors concerning whether the representation was effective and efficient, the attorney’s relationship with the claimant, the claimant’s result and satisfaction, and the uncertainty and effort involved in obtaining benefits.

The court noted that Osborn’s firm spent 39.8 hours on the federal appeal, involving a 2,074-page administrative record, a 20-page motion, a 25-page response from the Commissioner, and a reply. Although the time was relatively high for a standard Social Security case, the court found it reasonable given the size of the record and the filings. The court also considered that Osborn’s representation began in federal court rather than at the administrative level, but concluded that this did not justify reducing the fee.

The court found that counsel achieved a successful result by obtaining $91,171.10 in past-due benefits. It also found that the case involved the level of uncertainty typical of an appeal from a benefits denial. The requested fee produced an effective hourly rate of $572.68, but the court emphasized that the hourly rate alone does not determine whether a fee is an improper windfall. After considering all of the factors, the court concluded that the fee was reasonable and was not a windfall.

Earlier EAJA Fee

Because Osborn had already received $8,608.00 under the Equal Access to Justice Act for the same work, he was required to refund that amount to Fortuna after receiving the § 406(b) award. The court applied the rule that an attorney receiving fees under both statutes must return the smaller fee to the claimant.

Disposition

The court granted Fortuna’s motion. Osborn was awarded $22,792.78 in attorney’s fees under § 406(b) and was ordered to return the $8,608.00 in earlier Equal Access to Justice Act fees to Fortuna upon receiving the § 406(b) fees.