Caraballo v. Commissioner of Social Security

Background

Janisha Gregoria Caraballo applied for Social Security Disability benefits and Supplemental Security Income benefits in 2016. An administrative law judge found that she was not entitled to benefits, and the Social Security Administration’s Appeals Council declined to review that decision.

Caraballo then retained Daniel Berger to represent her in federal court. Her fee agreement provided that she would pay Berger 25 percent of any past-due benefits obtained through successful litigation, subject to court or agency approval. After Caraballo filed this case and moved for judgment on the pleadings, the parties agreed to send the case back to the agency for further proceedings. The court approved the remand in October 2020. Caraballo also received $5,500 in attorney’s fees under the Equal Access to Justice Act.

On remand, a different administrative law judge found that Caraballo had been disabled since January 29, 2016. The agency’s November 26, 2022 notice of award stated that Caraballo would receive $62,000 in past-due benefits and $727 per month going forward. The agency withheld 25 percent of the past-due benefits, or $15,500.25, for attorney’s fees. Berger asked the court to approve that amount under 42 U.S.C. § 406(b), which authorizes fees for representation in federal court in successful Social Security cases.

Timeliness

The court found the motion timely. The applicable filing period was 14 days from receipt of the notice of award. The notice was dated November 26, 2022, and Berger filed the fee motion 12 days later, on December 8, 2022.

Reasonableness of the Fee

Section 406(b) limits a contingency fee for federal-court representation to 25 percent of the claimant’s past-due benefits and requires the court to ensure that the fee is reasonable. The court first found that Berger’s requested fee was within the 25-percent limit and that there was no evidence of fraud or overreaching in the fee agreement.

The court then considered whether the fee was reasonable in light of the representation and results achieved, whether counsel caused delay, and whether the fee was an improper windfall. The court found that the fee matched the successful result: the case was remanded, and Caraballo was later found disabled and awarded benefits. The court also found that Berger did not cause unreasonable delay. Although he received one 30-day extension to file his motion for judgment on the pleadings, he filed that motion five days early.

Berger reported 27.1 hours of attorney work on the federal-court case, including reviewing a 524-page administrative record and preparing a legal memorandum. The court found that amount of work fell within the 20-to-40-hour range commonly approved for Social Security disability cases in the Second Circuit. It also considered Berger’s experience in Social Security cases, the results achieved, the uncertainty of obtaining benefits, and the risk of nonpayment inherent in a contingency-fee agreement. The effective hourly rate was $571.96, which the court found within the range approved by courts in the circuit.

Disposition

The court granted Berger’s motion for attorney’s fees and awarded him $15,500.25. Because Berger had previously received $5,500 under the Equal Access to Justice Act, the court directed him to promptly refund that amount to Caraballo after receiving the § 406(b) award.