Jesus v. Colvin, 3:14-cv-03820

Plaintiff appealed the SSA’s denial of disability benefits; the district court reversed and remanded because the ALJ failed to give clear and convincing reasons for discounting Plaintiff’s pain testimony.
On remand, the ALJ found Plaintiff disabled as of August 23, 2012, awarding $57,578 in past-due benefits plus ongoing benefits.
Plaintiff’s counsel had a contingency agreement permitting up to 25% of past-due benefits as fees.
Counsel moved under 42 U.S.C. § 406(b) for $14,394 (25% of past-due benefits less a prior $3,300 EAJA fee award); the Commissioner took no position.
The court reviewed the § 406(b) request for reasonableness, considering performance, delay, proportionality, and risk assumed by counsel.
The court granted the § 406(b) fee of $14,394, ordered counsel to refund the $3,300 EAJA award to Plaintiff, and directed the Commissioner to certify payment to counsel.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a § 406(b) award of 25% of past-due benefits (minus EAJA) is reasonable	Counsel sought $14,394 (25% of $57,578 less $3,300 EAJA) as reasonable under the contingency agreement and results achieved	Commissioner took no position on reasonableness	Granted: court found the fee reasonable and not excessive; directed certification of $14,394 and ordered EAJA refund
Whether court must offset § 406(b) award by EAJA fees	Counsel acknowledged offset by the prior $3,300 EAJA award	Commissioner did not dispute offset requirement	Held: EAJA award must be refunded to Plaintiff and offset against § 406(b) fee
Whether counsel’s performance or conduct warranted a fee reduction	Counsel provided substantial work, including post-remand agency work; no dilatory conduct alleged	Commissioner raised no case-specific objections	Held: No reduction warranted due to substandard performance or delay
Whether contingency risk and proportionality support requested fee	Counsel assumed risk when taking case on contingency before remand; fee is proportional to benefits awarded	No opposing factual challenge	Held: Risk assumed and proportionality support the requested fee

Gisbrecht v. Barnhart, 535 U.S. 789 (2002) (courts must review contingency fee agreements under § 406(b) to ensure reasonableness)
Crawford v. Astrue, 586 F.3d 1142 (9th Cir. 2009) (court may award § 406(b) fees based on past-due benefits obtained after a judicial remand)
Parrish v. Comm’r of Soc. Sec. Admin., 698 F.3d 1215 (9th Cir. 2012) (§ 406(b) award must be offset by any EAJA fees previously awarded)