(SS) Downey v. Commissioner of Social Security, 1:09-cv-00812-SKO

Plaintiff Willard Downey obtained a district-court judgment reversing the Social Security denial and the case was remanded; the court entered judgment for Plaintiff on August 31, 2010.
On remand the Social Security Administration found Plaintiff disabled and awarded $178,511 in past-due benefits, withholding $44,735.28 for attorney’s fees.
Plaintiff’s counsel (S. Bosavanh and co-counsel R. Wilborn) moved unopposed under 42 U.S.C. § 406(b) for the withheld $44,735.28; counsel spent 59.65 hours on the case.
Counsel and Plaintiff had a contingent-fee agreement providing the greater of 25% of past-due benefits or EAJA fees; counsel previously received an EAJA award of $7,777.02.
The court evaluated reasonableness (hours, results, contingent-risk, absence of dilatory conduct, and comparative effective hourly rate) and concluded the requested § 406(b) fee was reasonable.
The court granted the § 406(b) fee of $44,735.28 but required counsel to refund $7,777.02 to Plaintiff as an offset for the prior EAJA award and to serve Plaintiff with the order.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the requested § 406(b) fee ($44,735.28) is reasonable	Fee equals the contractually authorized withholding (25%); counsel performed 59.65 hours, achieved a favorable result, assumed contingent risk, and no dilatory conduct occurred	No opposition filed; Commissioner had standing but did not challenge the request	Granted: court found the fee reasonable after comparing hours, results, contingent risk, and prevailing §406(b) precedent; awarded $44,735.28
Whether prior EAJA award must be offset/refunded	Counsel requested the §406(b) fee and acknowledges EAJA award; fee agreement assigned EAJA proceeds to counsel but statute and Gisbrecht require EAJA offset to claimant	No opposition filed	Granted: court ordered counsel to refund $7,777.02 to Plaintiff as an EAJA offset from the §406(b) award

Gisbrecht v. Barnhart, 535 U.S. 789 (2002) (§406(b) defers to contingent-fee agreements but requires judicial review for reasonableness)
Crawford v. Astrue, 586 F.3d 1142 (9th Cir. 2009) (§406(b) fee analysis and deference to fee arrangements; courts must test reasonableness)
Cotter v. Bowen, 879 F.2d 359 (8th Cir. 1989) (§406(b) awards should balance incentive to counsel and protection of claimants’ benefits)
Craig v. Secretary, Department of Health & Human Services, 864 F.2d 324 (4th Cir. 1989) (Commissioner has standing to challenge §406(b) awards)