Santiago v. Saul, Commissioner of Social Security

Background

Nerida Santiago moved for attorney’s fees under Section 406(b) of the Social Security Act. She and her attorney, Eddy Pierre Pierre, had a written contingency-fee agreement under which Santiago would pay Pierre up to 25 percent of her past-due Social Security benefits if an appeal successfully reversed the denial of those benefits. The Social Security Administration’s May 9, 2021 Notice of Award stated that 25 percent of Santiago’s past-due benefits, payable through March 2021, was $24,604.25. The Commissioner of Social Security did not oppose the requested award.

The parties had previously stipulated to sending the case back to the Commissioner for further proceedings. Those proceedings resulted in a favorable determination for Santiago and an award of benefits. Santiago had also been awarded $9,000 in attorney’s fees under the Equal Access to Justice Act, but that award was applied to an outstanding debt and was not paid to counsel.

Legal standard

Section 406(b) permits a court to approve a reasonable attorney’s fee from a claimant’s past-due benefits when the claimant obtained a favorable judgment and was represented by an attorney. The fee may not exceed 25 percent of the past-due benefits. The court independently reviews a contingency-fee agreement to ensure that it produces a reasonable result. The court considered whether the requested fee exceeded the 25-percent limit, whether the agreement resulted from fraud or unfair pressure, and whether the fee would be an excessive payment, or “windfall,” to counsel.

Court’s analysis

The court found that the requested $24,604.25 fee equaled 25 percent of Santiago’s past-due benefits and therefore stayed within the statutory limit. It found no evidence that Santiago’s fee agreement with Pierre was reached through fraud or unfair pressure.

The court also found that the fee was not an excessive payment for the work performed. Pierre’s firm recorded 40.48 attorney hours and 9.80 paralegal hours on the matter. The work included preparing court papers, reviewing transcripts, and communicating with the Assistant United States Attorney assigned to the case. Dividing the requested fee by the attorney hours produced an effective hourly rate of $607.81. The court stated that this rate was within the range of reasonable fees approved in similar cases in the district. Considering the paralegal time under a method frequently used in the district produced an effective hourly rate of $583.60, which the court also found reasonable.

Because Santiago’s Equal Access to Justice Act award had been applied to her outstanding debt rather than paid to Santiago or her attorney, the court concluded that no reduction of the Section 406(b) award or refund to Santiago was required.

Ruling

Judge Vernon S. Broderick granted Santiago’s motion for attorney’s fees in the net amount of $24,604.25, representing 25 percent of her retroactive Social Security benefits. The court directed the clerk to close the fee motion at docket entry 24.