Unreported / Non-Citable
Background
Juan Antonio Salinas sought judicial review of a final administrative decision denying his claim for disability benefits under the Social Security Act. The U.S. District Court for the Eastern District of California reversed the Commissioner's denial of benefits and remanded the case to the agency for further proceedings, with judgment entered in Salinas's favor on August 12, 2025. On remand, the Commissioner found Salinas disabled and, on September 21, 2026, issued a letter approving his claim and awarding $137,846.90 in past-due benefits.
On October 5, 2026, Salinas's attorney, Jonathan O. Pena, filed a motion under 42 U.S.C. § 406(b) seeking $34,461.73 in attorney fees, equal to 25 percent of the past-due benefits award, with an offset of $6,200.00 for fees previously awarded under the Equal Access to Justice Act. The Commissioner filed a response stating that he neither supported nor opposed the request, and Salinas filed no objection. The fee agreement between Salinas and counsel, signed October 3, 2024, provided for a contingent fee of 25 percent of past-due benefits. The order's introduction references the EAJA award as of July 26, 2022, while its background section describes a stipulation entered November 10, 2025; the operative directive simply requires counsel to refund the $6,200.00 EAJA amount to Salinas.
The Court’s Holding
United States Magistrate Judge Sheila K. Oberto granted the fee motion, applying the framework established by the Supreme Court in Gisbrecht v. Barnhart and the Ninth Circuit in Crawford v. Astrue. Under section 406(b), a court may award a reasonable fee not exceeding 25 percent of past-due benefits, paid by the claimant out of those benefits rather than by the losing party. The court must look first to the contingent-fee agreement and then test it for reasonableness, considering factors such as the character of the representation, the results achieved, any dilatory conduct, the size of the benefits relative to time spent, and counsel's hours and billing rates.
The court found the requested fee reasonable. Counsel spent 26 hours representing Salinas and achieved a successful result, with no indication of substandard performance or dilatory conduct. Although the effective hourly rate of $1,325.45 exceeded the typical Fresno Division range of $250 to $325 per hour for non-contingency cases, the court held it was not excessive when compared to effective rates approved by the Ninth Circuit and other district courts in Social Security contingency cases, which have upheld rates exceeding $1,000 per hour. The court also recognized the contingent nature of the representation and the substantial risk of loss counsel assumed.
The court ordered three things: first, counsel's motion for $34,461.73 in section 406(b) fees is granted; second, counsel must refund $6,200.00 of that award to Salinas as an offset for the EAJA fees previously awarded under 28 U.S.C. § 2412(d); and third, counsel must file on the docket proof of service of the order on Salinas at his current or last known address.
Key Takeaways
- Section 406(b) fees are paid from the claimant's past-due benefits, not by the government, and are capped at 25 percent of those benefits.
- Courts review contingent-fee agreements for reasonableness rather than treating the 25 percent cap as an automatic entitlement.
- An effective hourly rate of $1,325.45 was upheld as reasonable in a Social Security contingency case, even though it far exceeded typical non-contingency hourly rates in the district.
- Fees awarded under section 406(b) must be offset by any prior EAJA fee award, with counsel required to refund the smaller amount to the claimant.
- The Commissioner has standing to challenge a section 406(b) fee award even though the fee is not paid by the government.
Why It Matters
This order illustrates how district courts in the Ninth Circuit apply the Gisbrecht and Crawford framework to section 406(b) fee petitions, confirming that high effective hourly rates in contingency cases are not per se unreasonable when counsel has achieved a favorable result and assumed the risk of no recovery. The decision reinforces that courts will defer to lawful contingent-fee agreements absent evidence of substandard representation or dilatory conduct.
The ruling also underscores the mandatory EAJA offset, which prevents double recovery by requiring counsel to refund the smaller EAJA fee to the claimant when a larger section 406(b) fee is awarded for the same work.