Unreported / Non-Citable
Background
This case began as a routine Social Security disability appeal. The Social Security Commissioner had denied the plaintiff’s application for disability insurance benefits. She filed a federal court action under the Social Security Act seeking judicial review. The federal court reversed the denial and remanded the case to the agency for further proceedings, and the parties jointly agreed to a $4,400 attorney fee award under the Equal Access to Justice Act (“EAJA”), the federal statute that provides for fees in successful agency-review cases.
On remand, the agency found in favor of the claimant and awarded $247,681 in past-due benefits — eight years of disability payments. The Commissioner withheld $61,920.25 (25% of the past-due award) in case the plaintiff’s counsel filed a motion for fees under 42 U.S.C. § 406(b), which is the federal statute that allows the court to award attorney’s fees in successful Social Security cases out of the past-due benefits award. Counsel filed for $37,920.25, less the $4,400 EAJA fee already received.
The Court’s Holding
The court approved the full requested fee. Section 406(b) caps fees at 25% of past-due benefits, and within that ceiling the court must determine whether the requested fee is “reasonable” under the Supreme Court’s Gisbrecht v. Barnhart decision and the Ninth Circuit’s Crawford v. Astrue en banc decision.
The court started, as Crawford requires, with the contingent-fee agreement between the claimant and her counsel — here, the standard 25% contingency. The requested fee was 15.3% of the past-due award, well below the statutory cap. The court then considered Crawford’s reasonableness factors: the character of the representation, the results obtained, any substandard performance or delay, and proportionality between fees and time spent. None of those factors warranted a reduction.
Counsel and a paralegal had spent 22.3 hours on the federal-court case, producing an effective hourly rate of $1,700.46. The court explained why such a rate was not a “windfall” given the significant risk inherent in contingency representation in Social Security cases — the risk of total nonpayment if the case is lost, plus typical multi-year delays. Counsel had over 25 years of Social Security experience, and the result was an eight-year past-due benefits award. The court cited several California decisions approving similar high effective rates (for example, $1,612 and $1,990 per hour) where the work produced large benefit awards.
Per Gisbrecht’s offset rule, the court ordered counsel to refund the previous $4,400 EAJA payment to the claimant so that she would not effectively be charged twice.
Key Takeaways
- Section 406(b) attorney fees in Social Security cases are computed by starting with the contingency-fee agreement (typically 25% of past-due benefits) and then testing for reasonableness under Gisbrecht and Crawford.
- Effective hourly rates in the four-figure range — $1,500 to $2,000 per hour or even more — are routinely approved in California federal courts when the underlying contingency was real and the result for the claimant was substantial.
- Counsel must refund any prior EAJA fee award to the claimant to avoid double recovery. The court’s order should direct that refund explicitly.
- An unopposed § 406(b) motion does not automatically result in approval — the court must conduct an independent reasonableness inquiry under Crawford.
Why It Matters
Social Security disability appeals are one of the highest-volume areas of California federal civil litigation. The fee structure is central to making this kind of representation economically viable: claimants typically cannot pay hourly fees, and the EAJA-plus-§ 406(b) framework backloads payment to the moment of victory. This decision illustrates the practical math — and a useful set of citations — for counsel preparing § 406(b) motions in San Diego.
For Social Security claimants and their families, the case is also a reminder of how high-stakes a successful appeal can be. An eight-year past-due benefits award of nearly $250,000 will fundamentally change a household’s financial picture. The federal-court route is meaningful even when the agency initially denies benefits, and the contingency-fee structure means most claimants can pursue review without out-of-pocket cost.