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Keywords

attorney

Related Cases

Gisbrecht v. Barnhart, 535 U.S. 789, 122 S.Ct. 1817, 152 L.Ed.2d 996, 70 USLW 4477, 80 Soc.Sec.Rep.Serv. 309, Unempl.Ins.Rep. (CCH) P 16729B, 02 Cal. Daily Op. Serv. 4543, 2002 Daily Journal D.A.R. 5795, 15 Fla. L. Weekly Fed. S 314

Facts

Petitioners Gary Gisbrecht, Barbara Miller, and Nancy Sandine sought Social Security disability benefits and were represented by the same attorneys. Each claimant prevailed on the merits and sought attorney fees under the Equal Access to Justice Act (EAJA). They had contingent-fee agreements with their attorneys, agreeing to pay 25% of their past-due benefits. However, the District Court applied a lodestar method to determine fees, resulting in lower amounts than those requested based on the agreements. The Ninth Circuit affirmed this decision.

Petitioners Gisbrecht, Miller, and Sandine brought separate actions in the District Court seeking Social Security disability benefits under Title II of the Social Security Act.

Issue

The main legal issue was whether the Social Security Act's provision limiting attorney fees to 25% of past-due benefits displaces contingent-fee agreements that are within this statutory ceiling.

What is the appropriate starting point for judicial determinations of 'a reasonable fee for [representation before the court]'?

Rule

The Court ruled that Section 406(b) of the Social Security Act does not displace contingent-fee agreements; instead, it requires courts to review such agreements for reasonableness within the 25% limit.

Section 406(b) does not displace contingent-fee agreements as the primary means by which fees are set for successfully representing Social Security benefits claimants in court.

Analysis

The Supreme Court analyzed the text of Section 406(b) and concluded that it allows for contingent-fee agreements as long as they do not exceed the 25% cap on past-due benefits. The Court noted that the lodestar method, while commonly used in other contexts, was not appropriate for determining fees in Social Security cases where contingent-fee agreements are prevalent. The Court emphasized that the attorney must demonstrate that the fee sought is reasonable for the services rendered.

Most plausibly read, § 406(b) does not displace contingent-fee agreements as the primary means by which fees are set for successfully representing Social Security benefits claimants in court.

Conclusion

The Supreme Court reversed the Ninth Circuit's judgment and remanded the case for recalculation of attorney fees based on the contingent-fee agreements, affirming that such agreements are valid under Section 406(b) as long as they comply with the statutory ceiling.

We now reverse the Ninth Circuit's judgment.

Who won?

Gisbrecht, Miller, and Sandine prevailed in the case as the Supreme Court ruled in their favor, allowing the enforcement of their contingent-fee agreements.

The Supreme Court reversed the Ninth Circuit's judgment and remanded for recalculation of counsel fees payable from the claimants' past-due benefits.

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