(SS) Avila v. Commissioner of Social Security, 1:17-cv-00420

Plaintiff Lorraine Marie Avila sought judicial review of an adverse Social Security disability decision; the district court granted her appeal and remanded the case on July 7, 2017.
On remand the Commissioner awarded past-due benefits of $57,063, and withheld $14,265.75 (25%) to pay Plaintiff’s representative under the contingent-fee agreement.
Plaintiff’s counsel (Law Offices of Lawrence D. Rohlfing; Cyrus Safa) previously received $2,700 in EAJA fees by court order dated October 17, 2017.
Counsel moved under 42 U.S.C. § 406(b) for a fee award of $8,265.75 (seeking that amount from the withheld past-due benefits), representing a blended effective hourly rate of $477.79 for 17.3 hours of attorney/paralegal work.
The fee agreement authorized a 25% contingency for court work and provided that any EAJA recovery would be credited to the client.
The Commissioner filed a response that neither objected nor assented; Plaintiff did not object to the § 406(b) request.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a $8,265.75 § 406(b) award is reasonable	Counsel argues fee is reasonable under the signed 25% contingency and based on 17.3 hours of work producing a favorable remand and benefits	Commissioner neither objects nor assents to the requested fee amount	Granted: § 406(b) fee of $8,265.75 is reasonable
Whether the fee exceeds the 25% statutory cap	Counsel’s requested fee is below 25% (14.5% of past-due benefits)	No contention that it exceeds statutory cap	Held: Fee does not exceed 25% cap
Whether counsel engaged in dilatory or substandard conduct to inflate benefits	Counsel represented efficient, effective work and no delay	No evidence submitted of dilatory conduct	Held: No reduction for dilatory or substandard conduct warranted
Whether EAJA award must offset § 406(b) recovery	Counsel acknowledges prior EAJA award should be credited to client and requests offset	Commissioner’s position not to contest; court must apply statutory offset	Held: Court orders $2,700 offset to reimburse Plaintiff for EAJA fees (counsel to reimburse client)

Crawford v. Astrue, 586 F.3d 1142 (9th Cir. 2009) (requires courts to respect contingent-fee agreements and assess reasonableness of § 406(b) awards)
Gisbrecht v. Barnhart, 535 U.S. 789 (U.S. 2002) (§ 406(b) permits up-to-25% contingent fees and directs courts to test such agreements for reasonableness)
Cotter v. Bowen, 879 F.2d 359 (8th Cir. 1989) (discusses balance between incentivizing counsel and protecting claimants’ benefits)
Craig v. Secretary, Department of Health & Human Services, 864 F.2d 324 (4th Cir. 1989) (Commissioner has standing to challenge § 406(b) fee awards)