Unreported / Non-Citable
Background
Attorney Katherine Siegfried represented plaintiff Frances A. in a federal court appeal of a denied Disability Insurance Benefits claim under Title II of the Social Security Act. After plaintiff filed a motion for summary judgment, the government agreed to a voluntary remand for a new administrative decision under sentence four of 42 U.S.C. § 405(g). The court remanded the case to the Social Security Administration pursuant to the parties' stipulation. On December 20, 2024, the court approved an award of $8,500 in attorney's fees under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d).
Following remand, the Social Security Administration issued a Notice of Award granting plaintiff past-due benefits totaling $74,788.30. The agency withheld $18,697.00—equal to 25 percent of the past-due benefits—for attorney's fees. Counsel then petitioned for $17,500 in fees under 42 U.S.C. § 406(b), submitting the Notice of Award, the contingency fee agreement, and a statement of 37.5 hours expended at a non-contingent hourly rate of $500. The government filed a response taking no position but confirming the request did not exceed the 25% statutory ceiling.
The Court’s Holding
The court granted the petition for $17,500 in attorney's fees under 42 U.S.C. § 406(b). It found the contingency fee agreement was within the statutory ceiling, as it provided for a fee no greater than 25 percent of past-due benefits awarded after an appeal from an unfavorable ALJ decision. The court determined counsel assumed substantial risk of non-recovery because the claims had been denied after exhausting administrative remedies, and the representation was not insubstantial—counsel secured a remand that resulted in over $78,000 in past-due and ongoing benefits.
The court calculated an effective hourly rate of $466.67 based on 37.5 hours expended, below counsel's $500 non-contingent rate. It concluded the requested fees were reasonable based on the quality of representation and outcome achieved, and did not constitute a windfall, citing Gisbrecht v. Barnhart, 535 U.S. 789, 808 (2002), and Crawford v. Astrue, 586 F.3d 1142, 1151–52 (9th Cir. 2009). The court directed the Commissioner to certify the $17,500 fee payable to Katherine Siegfried, and ordered counsel to reimburse plaintiff the $8,500 in EAJA fees to offset the § 406(b) award, consistent with Gisbrecht's holding that § 406(b) awards are offset by EAJA fees.
Key Takeaways
- The court approved a § 406(b) fee of $17,500, below the 25% statutory cap of $18,697 withheld from $74,788.30 in past-due benefits.
- Counsel's effective hourly rate of $466.67 (37.5 hours) was deemed reasonable and below the stated non-contingent rate of $500/hour.
- The EAJA fee award of $8,500 must be reimbursed to the plaintiff to offset the § 406(b) award, preventing double recovery.
- The court applied the Gisbrecht framework, reviewing the contingency agreement for reasonableness rather than displacing it.
- Substantial risk of non-recovery and quality of representation supported the fee award.
Why It Matters
This order illustrates the routine application of the Gisbrecht reasonableness review for § 406(b) fees in Social Security cases following a sentence-four remand and subsequent favorable administrative decision. The court's analysis confirms that contingency fee agreements within the 25% cap are presumptively reasonable when counsel assumes risk of non-payment, achieves a favorable outcome, and expends meaningful effort. The mandatory offset of EAJA fees against § 406(b) awards ensures plaintiffs do not pay twice for the same representation, with counsel bearing the obligation to reimburse the client.