Hutchinson v. Commissioner of Social Security

Background

Richard Hutchinson sued the Commissioner of Social Security under 42 U.S.C. § 405(g) to challenge the denial of his applications for Social Security Disability benefits and Supplemental Security Income benefits. The Social Security Administration initially denied his claim, and Administrative Law Judge Selwyn S. C. Walters later found that Hutchinson was not disabled. The Appeals Council declined to review that decision.

Hutchinson retained Daniel Berger under a contingency-fee agreement providing for a fee of 25% of any past-due benefits awarded. Hutchinson filed this federal case in December 2018. The parties agreed to send the case back to the Commissioner for a new hearing and decision, and the court approved that agreement. Berger also received $6,100 in attorney’s fees under the Equal Access to Justice Act for the federal-court work.

On rehearing, ALJ Walters found that Hutchinson had been disabled since April 29, 2010. The Commissioner awarded Hutchinson $132,448 in past-due benefits and withheld $33,112—25% of that award—to pay attorney’s fees. Berger then asked the court to approve the $33,112 fee under 42 U.S.C. § 406(b).

Legal standard

Section 406(b) allows a court to approve a reasonable attorney-fee award in a successful Social Security benefits case, but the award cannot exceed 25% of the claimant’s past-due benefits. The court must independently review the contingency-fee agreement. It first considers whether the fee is within the 25% limit and whether fraud or overreaching occurred. It then considers whether the fee is consistent with the representation and results, whether the attorney caused delay, and whether the fee would be an improper windfall compared with the work performed.

Court’s analysis

The requested $33,112 was exactly 25% of Hutchinson’s past-due benefits and therefore was within the statutory cap. No evidence suggested fraud or overreaching in Berger’s agreement with Hutchinson.

The court also found no evidence that Berger’s representation was substandard, that either Hutchinson or the Commissioner was dissatisfied with the representation, or that Berger caused delay. The court concluded that the fee was not an improper windfall. In reaching that conclusion, it considered Berger’s experience in disability cases, his long involvement in the matter, Hutchinson’s lack of objection or dissatisfaction, and the uncertainty of the case when Berger began representing him after several unsuccessful administrative decisions.

Disposition

The court granted Berger’s motion for $33,112 in attorney’s fees under § 406(b). Because Berger had already received $6,100 under the Equal Access to Justice Act for the same work, he must refund that $6,100 directly to Hutchinson after receiving the § 406(b) payment. The clerk was directed to terminate the fee motion.