LOCATION: The Cleveland Metropolitan School District
DOCKET NO.: 01-131
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Ninth Circuit
CITATION: 535 US 789 (2002)
ARGUED: Mar 20, 2002
DECIDED: May 28, 2002
Daniel J. Popeo - for the Washington Legal Foundation et al. as amici curiae urging affirmance
David B. Salmons - Argued the cause for the respondent
Eric Buchanan - for the National Organization of Social Security Claimants' Representatives as amicus curiae
Eric Schnaufer - Argued the cause for the petitioners
Joel F. Friedman - for the National Organization of Social Security Claimants' Representatives as amicus curiae
Jeffrey Robert White - for the Association of Trial Lawyers of America as amicus curiae urging reversal
Kirk B. Roose - for the National Organization of Social Security Claimants' Representatives as amicus curiae
Nancy G. Shor - for the National Organization of Social Security Claimants' Representatives as amicus curiae
Nancy Sandine - for the District of Oregon under 42 U
Robert E. Rains - for the National Organization of Social Security Claimants' Representatives as amicus curiae
Richard A. Samp - for the Washington Legal Foundation et al. as amici curiae urging affirmance
Facts of the case
Under 42 USC section 406(b), an attorney who successfully represents a Social Security benefits claimant in court may be awarded a reasonable fee not in excess of 25 percent of the past-due benefits awarded to the claimant, payable out of the amount of the past-due benefits. After three individuals prevailed on their claims for Social Security disability benefits and successfully sought attorneys' fees under the Equal Access to Justice Act, their attorneys were to collect 25 percent of all past-due benefits recovered from each claimant, pursuant to contingent-fee agreements. In each case, the District Court declined to give effect to the attorney-client fee agreement, instead employing a "lodestar" method, under which the number of hours reasonably devoted to each case was multiplied by the reasonable hourly fee. The Court of Appeals affirmed.
Do lodestar fee awards for attorneys who successfully represent Social Security benefits claimants in court, under 42 USC section 406(b), displace contingent-fee agreements within the statutory ceiling?
Media for Gisbrecht v. BarnhartAudio Transcription for Oral Argument - March 20, 2002 in Gisbrecht v. Barnhart
Audio Transcription for Opinion Announcement - May 28, 2002 in Gisbrecht v. Barnhart
William H. Rehnquist:
The opinion of the court in number 01-131, Gisbrecht against Barnhart will be announced by Justice Ginsburg.
Ruth Bader Ginsburg:
This case concerns fees for lawyer who successfully represent in court clients seeking Social Security old age survivors or disability benefits.
How those fees should be determined is the question that has divided the Court of Appeals.
Congress has provided that when an applicant for Social Security benefits prevails in court, reasonable counsel fees may be awarded subject to two limitations: first, fees are payable only out of benefits already past-due awarded to the claimant; and second the fee awards may not exceed 25% of the past-due benefits.
The petitioners in this case sought Social Security disability benefits.
They were unsuccessful at the administrative level but they prevailed in court.
Each had signed a standard form contract agreeing to pay his or her attorney 25% of all past-due benefits recovered.
Petitioners, more accurately their attorneys, urged that the 25% calculation should control subject to downward adjustment if the resulting fee proves too large judge by the size of the benefit recovered or the quality of the lawyers representation.
The Social Security Commissioner on the other hand urges counsel fee determination by the lodestar method that is the method now widely used on the statutes that unlike the Social Security Act provision at issue shift the obligation to pay counsel from the prevailing party to the losing party in the litigation.
Under the lodestar method fees are determined by multiplying the hours the attorney reasonably spent on the case by an hourly rate reasonable for the lawyer’s work.
The Court of Appeals for the Ninth Circuit whose judgment we review held that the lodestar method governed.
We reverse that judgment for reasons detailed in the Court’s opinion.
We conclude that Congress designed the Social Security Act's provision for counsel fees to contain but not to override the agreements between lawyers and Social Security benefits claimant.
Accordingly, we hold that the attorney-client agreement controls if it yields a fee that does not exceed 25% of past-due benefits and is otherwise reasonable.
Justice Scalia has filed a dissenting opinion.