James v. Commissioner of Social Security
6:13-cv-01270
M.D. Fla.Dec 19, 2017Background
- Plaintiff Naomi Jean James prevailed on a sentence-four remand of the Commissioner’s denial of Social Security benefits; the Court reversed and remanded on September 18, 2014.
- The Social Security Administration later awarded Plaintiff past-due benefits totaling $150,074 (combining disability and disabled widow’s past-due amounts), with portions withheld for attorney fees at the administrative level.
- Counsel had a contingency agreement with Plaintiff entitling counsel to 25% of past-due benefits for federal-court representation and seeks $31,552.00 under 42 U.S.C. § 406(b).
- Counsel expects a separate § 406(a) (administrative) fee of $6,000.00 and Plaintiff previously received an EAJA award of $4,681.05.
- The Court calculated twenty-five percent of past-due benefits ($37,518.50), reduced by the expected § 406(a) fee, and determined counsel’s reasonable § 406(b) award to be $31,518.50 to be paid from withheld past-due benefits; counsel must refund the EAJA fee to Plaintiff.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 406(b) permits counsel to recover contingent fee for court representation up to 25% of past-due benefits | Counsel seeks full 25% under contingency agreement ($31,552 requested) | Commissioner did not oppose fee request; statutory cap applies | Court approved § 406(b) award of $31,518.50 (25% of past-due benefits minus expected § 406(a) fee) |
| Whether aggregate fees under §§ 406(a) and 406(b) plus EAJA refund exceed statutory limits | Counsel argued requested fee reasonable within 25% cap and will account for administrative fee and EAJA | Statutory law limits aggregate fees under §§ 406(a) and (b) to 25%; EAJA must be refunded to client if both awarded | Court applied Dawson/Gisbrecht rule: total under §§ 406(a) and (b) cannot exceed 25%; ordered counsel to refund EAJA fee to Plaintiff upon receipt of § 406(b) funds |
| Whether the requested § 406(b) fee is reasonable under Gisbrecht factors (character of representation, delay, windfall) | Counsel asserted fee appropriate for services and results achieved | No opposition; court must independently assess reasonableness | Court found 25% contingency fee reasonable given results and time; no reduction for delay or windfall warranted |
| How to effectuate EAJA offset/refund when both EAJA and § 406(b) awards exist | Counsel anticipated adjustment/offset consistent with practice | Commissioner withheld past-due benefits for fees; court must ensure no double recovery | Court directed counsel to promptly refund the $4,681.05 EAJA fee to Plaintiff upon receipt of § 406(b) funds |
Key Cases Cited
- Gisbrecht v. Barnhart, 535 U.S. 789 (2002) (framework for assessing § 406(b) reasonableness and factors for downward adjustments)
- Dawson v. Finch, 425 F.2d 1192 (5th Cir. 1970) (aggregate attorney-fee allowance under § 406 cannot exceed 25% of past-due benefits)
- Jackson v. Commissioner of Social Security, 601 F.3d 1268 (11th Cir. 2010) (permissible methods for reconciling EAJA and § 406(b) fees; attorney must refund smaller fee)
- Bonner v. City of Pritchard, 661 F.2d 1206 (11th Cir. 1981) (adoption of former Fifth Circuit precedent as binding in the Eleventh Circuit)