Reported / Citable
Background
In February 2021, plaintiff Hattie H. filed suit seeking reversal of the Social Security Administration’s denial of her application for Supplemental Security Income. The plaintiff had been denied at all levels of administrative review before pursuing judicial relief. The district court granted the Commissioner’s motion to reverse the agency’s decision and remand the case for further proceedings.
In October 2023, the SSA issued a Notice of Award finding the plaintiff disabled and awarding her $158,738.90 in past-due benefits covering the period from November 2017 through August 2023. Plaintiff’s counsel, who represented her on a contingency basis under a fee agreement providing for 25 percent of any retroactive benefits awarded, thereafter moved for $25,000 in attorney fees under 42 U.S.C. § 406(b). The Commissioner neither supported nor opposed the request.
The Court’s Holding
The magistrate judge recommended granting the motion for attorney fees. Under § 406(b), courts may award prevailing Social Security claimants’ attorneys up to 25 percent of past-due benefits, but must independently review whether the requested fee is reasonable. The requested $25,000 fee represented approximately 15.75 percent of the plaintiff’s $158,738.90 award, falling well within the statutory ceiling.
The court found the fee reasonable under applicable factors: (1) substantial risk of loss—the plaintiff had lost at all administrative levels, and attorneys receive no compensation if the case is unsuccessful; (2) client consent—the plaintiff signed the contingency fee agreement with full awareness of the 25-percent contingency arrangement; (3) attorney experience and skill—counsel brought nearly 57 years of combined experience in Social Security disability law, with one attorney having filed over 100 cases against the SSA in federal court and the other having served as an Assistant Regional Counsel for SSA; (4) efficient representation—counsel prepared a focused 20-page opening brief asserting a single salient issue; and (5) effective hourly rate—the $1,004.01 hourly rate (calculated as $25,000 divided by 24.9 hours expended) was reasonable given the contingency risk, and fell within the range previously approved in other Social Security cases in the circuit.
Key Takeaways
- Courts must conduct independent review of § 406(b) fee requests to ensure reasonableness, but the requesting attorney bears the burden of demonstration.
- Effective hourly rates substantially exceeding market rates can be reasonable in contingency fee cases when significant risk of loss exists and the attorney achieves a substantial recovery.
- Client consent to the contingency fee arrangement is a relevant factor supporting reasonableness, particularly where no fraud or overreaching occurred.
- Attorney experience, efficiency, and the degree of case difficulty are material considerations in § 406(b) fee awards.
Why It Matters
This decision clarifies that courts reviewing § 406(b) fee requests in Social Security cases should weigh contingency risk heavily, particularly where a claimant has exhausted and lost at all administrative remedies. The holding reinforces that effective hourly rates of $1,000+ are not inherently unreasonable when attorneys invest modest time to achieve substantial retroactive benefits awards for disabled claimants. This supports access to experienced SSA counsel who might otherwise decline contingency representation.
The decision also establishes that attorney experience and skill level—evidenced here by counsel’s 27 and 30+ years in SSA practice—justifies fee levels above typical market rates. For practitioners, the case confirms that focusing judicial efforts (here, a single-issue brief) paired with meaningful recovery can satisfy reasonableness review, even when the ratio of fee to time invested appears generous on its face.