Unreported / Non-Citable
Background
Lanh Dang Ho applied for Social Security disability benefits and was denied at the initial agency level, on reconsideration, before an administrative law judge, and on Appeals Council review. He then sued in the Northern District of California to obtain judicial review under 42 U.S.C. § 405(g). Magistrate Judge Robert M. Illman granted Ho’s motion for summary judgment, remanded the case, and awarded $7,984.45 in attorney fees under the Equal Access to Justice Act.
On remand, the Commissioner granted Ho’s application and awarded $200,027.00 in past-due benefits. Under his contingency-fee agreement, Ho had agreed to pay counsel up to 25% of any past-due benefits resulting from a favorable disability decision. The Notice of Award withheld $50,006.75 — exactly 25% — to pay attorney fees. Counsel Francesco Benavides moved for $42,800.00 in fees under 42 U.S.C. § 406(b) (less than the 25% maximum), reflecting work he and his firm performed on the federal-court phase. The Commissioner took no position but asked the court to assess reasonableness.
The Court’s Holding
The court granted the motion in full and awarded $42,800 in § 406(b) fees, payable from Ho’s withheld past-due benefits, with counsel ordered to refund the prior EAJA award to Ho.
Following Gisbrecht v. Barnhart and the Ninth Circuit’s en banc decision in Crawford v. Astrue, the court applied the contingency-fee-first framework: it began with the contingency-fee agreement, then tested it for reasonableness. The 25% contingency was within the statutory maximum, and the requested fee — about 21.4% of past-due benefits — was below that ceiling. There was no evidence of substandard performance; counsel’s work secured a six-figure benefits award after multiple agency denials. Ho was given notice and did not object.
On the effective hourly rate, counsel reported 31.7 hours of work, producing an effective rate of roughly $1,350.15 per hour. The court found that, although more than five times the EAJA rate, the figure was within the range routinely approved in the Ninth Circuit for Social Security § 406(b) work — citing Garcia v. O’Malley (E.D. Cal. 2024) (approving an effective hourly rate of $2,307.69), Ainsworth v. Berryhill (N.D. Cal. 2020) (approving $1,325.34), and Hearn v. Barnhart (N.D. Cal. 2003) (approving a 3x multiplier on the typical hourly rate). The lodestar method, the court noted, “under-compensates attorneys for the risk they assume” in this docket and is not the governing test under Crawford.
The court also emphasized the substantial contingency risk that counsel had assumed. Ho’s claims had already been denied multiple times before counsel took the case. Citing Crawford, Ainsworth, and Lewis v. Dudek, the court treated that risk as an independent ground supporting the requested fee. Following Gisbrecht’s offset rule, the court ordered counsel to refund the previously awarded $7,984.45 EAJA payment to Ho so that the client would receive the benefit of the smaller of the two awards.
Key Takeaways
- Section 406(b) fee analysis in the Northern District follows the contingency-first Gisbrecht/Crawford framework. The court starts with the contingency-fee agreement and tests it for reasonableness rather than running a lodestar.
- Effective hourly rates well above $1,000 — and into the $2,000+ range — are routinely approved when supported by a contingency-fee agreement, a successful past-due-benefits award, and the absence of substandard performance or unreasonable delay.
- The contingency risk that Social Security claimants’ counsel takes on is treated as a substantive justification for above-lodestar fees, given how often agency-level denials precede federal-court success.
- Counsel must always factor in the EAJA offset under Gisbrecht: when both EAJA fees and § 406(b) fees are awarded, counsel refunds the smaller amount to the client to avoid double recovery.
- Requesting less than the 25% statutory maximum is a useful signal of reasonableness and helps a court approve the requested amount without further reduction.
Why It Matters
Social Security § 406(b) fee awards are a meaningful slice of what makes contingency-based disability representation economically viable. The Ho decision confirms that the Northern District continues to approve effective hourly rates well above EAJA caps when a contingency agreement, a strong outcome on remand, and a clean billing record line up. That stability matters for the bar that handles disability appeals in the Bay Area and beyond.
For counsel filing § 406(b) motions, the opinion is also a clean modern template: the court walks step by step through the Gisbrecht/Crawford reasonableness analysis, anchors the effective-rate discussion in recent Northern District comparables, and applies the EAJA offset at the end. Practitioners moving for fees can model their motions on the structure that succeeded here.