Thorne v. Social Security

Background

Mary Ruth Thorne sued the Commissioner of Social Security seeking review of the denial of her application for disability benefits. In an earlier order, the court granted part of Thorne’s motion for judgment on the pleadings and remanded the case for further administrative review. After the remand, the Appeals Council ordered additional proceedings. Following a September 7, 2023 hearing, Administrative Law Judge Gina Pesaresi found Thorne disabled as of August 23, 2017, and awarded $185,757.92 in past-due disability benefits.

Thorne’s lawyers, the Law Office of Charles E. Binder and Harry J. Binder, LLP, known as Binder & Binder, moved for attorney’s fees under Section 406(b) of the Social Security Act. Their amended motion requested $46,439.48, approximately 25% of Thorne’s past-due benefits. The Commissioner stated that the Commissioner neither supported nor opposed the request.

Thorne had signed a retainer agreement providing for a 25% contingency fee if she received past-due benefits. Binder & Binder submitted information about its attorneys’ experience, detailed billing records, and the Social Security Administration’s award notice. Daniel S. Jones billed 5.5 hours, and Patrick H. Busse billed 29.5 hours, for a total of 35 hours.

Court’s analysis

Section 406(b) allows a court to approve a reasonable fee for successful representation in court, subject to a limit of 25% of the claimant’s past-due benefits. The court explained that it must independently review a contingency-fee agreement to determine whether the result is reasonable. The review considers whether the fee exceeds the statutory limit, whether the agreement resulted from fraud or unfair pressure, and whether the fee would give the lawyers an improper windfall.

The court found that the requested fee did not exceed the 25% limit, and it found no evidence of fraud or overreaching. The court also concluded that the fee would not be a windfall. It relied on counsel’s experience in Social Security disability cases, their work obtaining a remand and a substantial benefits award, the absence of any stated dissatisfaction by Thorne, and the uncertainty created by multiple prior denials over a prolonged period.

The requested fee produced an effective rate of $1,326.84 per billed hour. Although the court recognized that this rate was high, it explained that the hourly rate alone does not determine whether a contingency fee is unreasonable. The court stated that the negotiated contingency percentage, rather than an hourly-rate calculation alone, is the better measure in this type of case. It found the requested fee reasonable and determined that it would not produce a windfall.

Earlier fee award

Before the Section 406(b) motion, Thorne’s counsel had received $7,119.89 in fees under the Equal Access to Justice Act for the same work. The court stated that when counsel receives fees under both laws, counsel must refund the smaller fee to the claimant.

Ruling

Judge Ona T. Wang granted Thorne’s motion for attorney’s fees under Section 406(b). The Social Security Administration was directed to approve payment of $46,439.48 to Binder & Binder. After receiving that payment, Binder & Binder was directed to refund the previously awarded $7,119.89 in Equal Access to Justice Act fees directly to Thorne. The clerk was directed to close the identified docket entries.