Mangual v. Commissioner of Social Security

Background

Nestor Mangual moved for attorney’s fees under Section 406(b) of the Social Security Act. His written contingency-fee agreement with Daniel Berger provided for a fee equal to 25% of his past-due benefits. The Social Security Administration issued a notice stating that Mangual’s past-due benefits totaled $71,456. The requested fee was therefore $17,864.

The court had previously awarded $6,393.40 in fees under the Equal Access to Justice Act. That amount was reduced to $2,253.57 because of Mangual’s outstanding federal debt. Counsel stated that he would refund $2,253.57 to Mangual after receiving the Section 406(b) payment. The Commissioner did not object to the total requested fee but asked the court to determine whether the effective hourly rate of $556.51 was reasonable and whether the fee would be a windfall.

Legal standard

Section 406(b) permits a court to approve a reasonable attorney’s fee for representation in court, up to 25% of the claimant’s past-due benefits. The fee is paid from those benefits rather than added to them. The court explained that contingent-fee agreements are the primary way fees are established in these cases, but courts must review them for reasonableness.

The court considered whether the requested fee exceeded the 25% statutory limit, whether fraud or overreaching occurred when the agreement was made, and whether the fee would be a windfall to counsel. To assess a possible windfall, courts consider the attorney’s success, the work shown through the filings, and whether the case was handled efficiently based on the attorney’s experience with Social Security cases.

Court’s analysis

The court found that the requested fee was within the statutory limit and found no evidence of fraud or overreaching. It also found that the fee was not a windfall because counsel obtained a favorable result, evaluated the potential appeal, started the civil action, and prepared Mangual’s July 2021 memorandum. Counsel reported working 32.10 hours and had several years of experience working exclusively on Social Security disability cases.

The court held that the effective hourly rate did not alone establish that the fee was unreasonable. It noted that courts may give weight to the negotiated contingency-fee agreement and should not reduce the agreed fee lightly. The court also stated that counsel should not be penalized for working efficiently. It noted that the case involved a risk of nonpayment because an administrative law judge had denied Mangual’s application twice before the Appeals Council reversed those decisions.

Disposition

The court granted Mangual’s motion for attorney’s fees under 42 U.S.C. § 406(b). It directed the Social Security Administration to approve payment of $17,864 to the Law Offices of Daniel Berger, Esq. After receiving that payment, counsel must refund $2,253.57 to Mangual. The Clerk of Court was directed to close ECF 25.