The Supreme Court has issued a writ of certiorari (meaning they'll hear) Culbertson v. Berryhill on the issue of:
This will be coming up in the Supreme Court's next term, which begins in October.Whether fees subject to 42 U.S.C. § 406(b)’s 25-percent cap related to the representation of individuals claiming Social Security benefits include, as the U.S. Courts of Appeals for the 6th, 9th, and 10th Circuits hold, only fees for representation in court or, as the U.S. Courts of Appeals for the 4th, 5th, and 11th Circuits hold, also fees for representation before the agency.
8 comments:
Not sure I understand the issue here. Anyone care to explain further?
It is hard to tell whether they are going to limit the arguments to merely whether when a matter is taken up to the Fed Dist Court the EAJ fees and any SSA Rep fees awarded will be limited to the 25% cap combined or are should they be treated separately. (example: Rep fees awarded and EAJ fees equal only 25% of total back benefits or Rep fees + EAJ Fees = Rep Fee total even if that total is greater than 25% - I believe the latter is the commonly accepted view as the purpose of the EAJ fees is to give an incentive for underserved to get representation and the former would discourage that)
The more interesting question would be whether they will address the 25% cap and whether they will address whether reps/attorneys can make a claim for reasonable fees for work performed even in cases where there was not a favorable decision or where the work was excessive. If you look at the statute fee petitions don't necessarily require favorable opinions nor do they have a 25% cap. Even though it is conceivable, I have never seen an ALJ approve a fee petition with fees greater than 25% or where there was not a favorable decision.
@12:38
42 USC § 406(a) says lawyers are entitled to "a reasonable fee" in social security cases for work performed before the Social Security Administration. The fee comes out of past due benefits. How this works in practice is the lawyer seeks a specific fee, the Administration considers the reasonableness of the request in light of services rendered, and grants the request either fully or at a reduced figure (usually months if not years later).
42 USC § 406(b) says lawyers may seek up to 25% of past due benefits for work performed before the Courts in a social security case. The Court then considers the fees and grants the fee in full, or reduced in consideration of circuit precedent addressing the reasonableness of fees.
Some circuits (4th, 5th, and 11th) say the 406(a) fee should be combined (i.e. subtracted) from the 406(b) while some circuits (6th, 9th, and 10th) say the 406(b) fee is separate.
Seems to me, the attorney has been doing Federal Court cases and their respective fees incorrectly all along. All of these issues could have been avoided, if the rep simply asks the Agency, rather than the District Court, for the 25% of back pay as a fee. In that instance, the rep gets to keep the EAJA fee for services rendered in federal court and gets 25% of back pay once as a fee from the agency after the remand and favorable decision (which is rendered by the agency).
From the filings, it looks like this attorney was winning EAJA fees in federal court, getting a remand, winning back at the agency level, and then petitioning the federal court for the 25% fee. In that instance, the statute requires that the 25% fee be reduced by the amount of the EAJA fee.
In my practice, it's always easier and more profitable to get the EAJA fee for the federal court work, then file a fee petition for the work before the agency asking for 25% benefits. In that instance, the fee does not need to be reduced by the EAJA award (since the EAJA award is a separate award for federal court work, there is no double recovery). So, in practice, you end up getting 25% back pay + EAJA fee as your total attorney fee, which will exceed 25% (but claimant only pays 25% as the EAJA fee is not paid by claimant but by gov't pursuant to statute).
If this attorney had done what I do, there would be no need for this case. His problem is that he's asking the federal court for 25% fee and his EAJA fee when he should be asking the agency for the 25% and, separately, the federal court for the EAJA fee.
2:2: The issue is not that the EAJA fee is used to reduce the attorney's fee. the attorney is seeking an attorney's fee for work before the Agency and for work before the Court and he is asking each tribunal for a fee for the work done before that tribunal. The issue is whether the fee for work done before the Agency should be subtracted from the fee for work done before the Court.
@3:02
Agreed, although I think 2:22's point was it is far easier just to seek 406(a) and EAJA, using EAJA to compensate for the court-level work which would normally be compensated under 406(b). While that might be efficient practice, I think it is reasonable to conclude the Supreme Court granting cert implies whether 406(a) and 406(b) create a cumulative cap of 25% as a matter of law is an issue which can reasonably be debated.
Seems like this Court is about to go back to Lochner era contract law philosophy judging by today's big opinion, so my guess is the Court will be happy to enforce whatever provisions reps put in their contracts despite the language of the relevant statutes/regulations here.
Based on the filings, the gov't isn't even defending the interpretation that caps the total fees (a and b) to 25 percent.
This issue seems to only happen in a few areas. In major metropolitan areas (e.g. Atlanta), very few disability firms are actually having their attorneys represent the claimant in court. They contract an attorney for the court level (bringing them into the firm, so to speak) on the basis that they get the EAJA. The original attorneys then file the fee petition for administrative fees (sometimes even just limiting it to just under $10,000.00 for each attorney to avoid Falls Church or the regional chief ALJ from having to sign-off).
In the end, if there were a serious matter that needed to be defended, the market would have resolved it. Claimants who go to the court level and win on remand are usually edging close to 4 years. Any attorney seeking above 25 percent of the past due benefits is in for a headache trying to collect the excess from the claimant from a small firm point-of-view and still a waste of time from larger firms who sent their own attorney. From my recollection, even B&B did not attempt this on court remand cases.
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