Gonzales v. Social Security Administration
1:18-cv-00502
D.N.M.Oct 30, 2020Background
- Amy Denise Gonzales appealed the denial of disability benefits to federal court on May 30, 2018; she had a contingency fee agreement (25%) with Michael D. Armstrong for court representation.
- Counsel filed a detailed motion to remand; the Commissioner filed an Unopposed Motion to Remand and the Court remanded under sentence four of 42 U.S.C. § 405(g).
- On remand the ALJ issued a fully favorable decision (disability since October 16, 2012); the SSA’s July 22, 2020 Notice of Award showed $66,685 in past-due benefits with $16,671.25 withheld for attorney fees.
- The district-court attorney (Armstrong) had been awarded EAJA fees of $5,534.80 for 27.4 hours; substituted counsel filed a § 406(b) motion seeking $10,671.25 for the same 27.4 hours (≈16% of past-due benefits).
- The Commissioner did not object to the § 406(b) request and deferred to the Court’s discretion; the Court evaluated reasonableness, timeliness, and potential need to offset/refund the EAJA award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether requested § 406(b) fee ($10,671.25) is reasonable and within statutory limits | Fee based on contingency agreement (25% cap); $10,671.25 equals ~16% of past-due benefits and is reasonable for 27.4 hours of court work | No objection; deferred to Court’s discretion on reasonableness | Granted — fee authorized as reasonable; does not exceed 25% cap |
| Whether attorney delay warrants reduction of fee | Minimal delay (two briefing extensions) and not counsel-attributable delay | No objection | Denial of reduction — delay insufficient to require reduction |
| Whether fee is disproportionate to time spent (hourly-rate review) | 27.4 hours yields a reasonable effective hourly rate ($389.46) given result and skill | No objection | Court finds fee not disproportionate; hourly rate reasonable |
| Timeliness of § 406(b) fee filing | Motion filed ~2 months after Notice of Award (timely) | No objection | Timely — filed within a reasonable time after award notice |
Key Cases Cited
- Gisbrecht v. Barnhart, 535 U.S. 789 (2002) (court must independently assess reasonableness of contingency fees and may reduce fees for attorney delay or disproportionate award)
- McGraw v. Barnhart, 450 F.3d 493 (10th Cir. 2006) (§ 406(b) fees allowed after sentence-four remand; EAJA award must be refunded to claimant if § 406(b) fee is awarded)
- Wrenn v. Astrue, 525 F.3d 931 (10th Cir. 2008) (separate EAJA and § 406(b) awards are permitted but counsel must refund the lesser to the claimant)