Alvarez-Roman v. Commissioner of Social Security

Filing 48

ORDER granting in part 41 Motion for Attorney Fees. Signed by US Magistrate Judge Bruce J. McGiverin on 3/5/2025. (CSV)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
JOSE F. ALVAREZ-ROMAN,
Plaintiff,
v.

Civil No. 19-1780 (BJM)

COMMISSIONER OF SOCIAL
SECURITY,
Defendant.

OPINION & ORDER
Plaintiff Jose F. Alvarez-Roman (“Alvarez”) filed the present case challenging the
Commissioner of the Social Security Administration’s (“Commissioner’s”) denial of his petition
for Social Security disability insurance benefits. Docket No. (“Dkt.”) 2. The parties consented to
proceed before me. Dkts. 3, 5. After reviewing the record, I vacated the Commissioner’s decision
and remanded the case for further administrative proceedings. Dkt. 33. Judgment in the case was
entered on September 8, 2021. Dkt. 34.
On November 10, 2021, Alvarez’s counsel, David Luis Torres-Velez (“Torres”), filed a
motion for attorney fees in the amount of $3,900 pursuant to the Equal Access to Justice Act
(“EAJA”), 28 U.S.C. § 2412. Dkt. 37. I granted the motion for attorney fees accordingly. Dkt. 40.
On January 23, 2025, Torres filed a motion for attorney’s fees pursuant to § 406(b) of the
Social Security Act (“406(b)”) in the amount of $17,772.75 but requests the court order the agency
to only disburse the net attorney’s fee in the amount of $13,822.75. Dkt. 41 at1. For the reasons
explained below, Cruz’s motion for attorney’s fees pursuant to 406(b) is GRANTED IN PART.
APPLICABLE LEGAL STANDARDS
In Social Security cases, attorney fees can be obtained pursuant to the EAJA or the Social
Security Act, 42 U.S.C. § 406. Fee awards may be made under both the EAJA and 406(b), but if

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fees are awarded under both, the attorney claiming the award must refund the lesser award to the
client. Gisbrecht v. Barnhart, 535 U.S. 789, 796 (2002); 28 U.S.C. § 2412.
Under the EAJA, a party prevailing against the United States in court, including a
successful Social Security benefits claimant, may be awarded fees payable by the United States if
the government’s position in the litigation was not “substantially justified.” § 2412(d)(1)(A); see
also Gisbrecht, 535 U.S. at 796. EAJA fees are determined not by a percent of the amount
recovered, but by the “time expended” and the attorney’s “[hourly] rate,” § 2412(d)(1)(B), which
is capped at $125 per hour. § 2412(d)(2)(A). See Gerardo Dieppa-Velázquez v. Comm’r of Soc.
Sec., 19-CV-1574 (CVR) (D.P.R. May 25, 2021).
However, as noted above, a reasonable fee may be awarded to an attorney who successfully
represented a claimant in federal court under 42 U.S.C. § 406(b)(1)(A). When a court renders
judgment favorable to a Social Security claimant who has legal representation, the court may allow
“a reasonable fee for such representation, not in excess of 25 percent of the total of the past-due
benefits to which the claimant is entitled.” 42 U.S.C. § 406(b)(1)(A). Unlike the EAJA, however,
406(b) does not authorize the prevailing party to recover fees from the losing party. Instead, 406(b)
authorizes fees payable from the successful party’s recovery. Gisbrecht, 535 U.S. at 795.
The Commissioner has interpreted 406(b) to “prohibi[t] a lawyer from charging fees when
there is no award of back benefits.” Id. A court may award fees under 406(b) when, for example,
“the court remands . . . a case for further proceedings and the Commissioner ultimately determines
that the claimant is entitled to an award of past-due benefits.” McGraw v. Barnhart, 450 F.3d 49396 (10th Cir. 2006). However, 406(b) is not meant to permit counsel to request inordinate or
unreasonable fees under the guise of a contingency fee agreement. 406(b) calls for court review of
contingent fee arrangements between claimants and counsel to assure that they yield reasonable

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results. Agreements are also de facto unenforceable if they provide for fees exceeding 25 percent
of the past-due benefits. § 406(b)(1)(A). Even within the 25 percent boundary, plaintiff’s counsel
must show that the fee sought is reasonable given the services rendered. Id. Courts must ensure
that fees are reasonable even if they are less than 25% of the past-due benefits, as there is no
presumption that 25% is reasonable. Gisbrecht, 535 U.S. at 807 n.17.
In determining a reasonable fee, a court should look first to the contingent fee arrangement,
then test for reasonableness “based on the character of the representation and the results the
representative achieved.” Id. at 808. Factors relevant to reasonableness include: (1) whether the
attorney’s representation was substandard; (2) whether the attorney was responsible for any delay
in the resolution of the case; and (3) whether the contingency fee is disproportionately large in
comparison to the amount of time spent on the case. Id. The claimant’s attorney can also be
required to submit a record of the hours spent representing the claimant and a statement of the
lawyer’s normal billing rate for non-contingency fee cases. Id. “If the benefits are large in
comparison to the amount of time counsel spent on a case, a downward adjustment is similarly in
order.” Id. (citations omitted).
The statute does not specify a deadline for requesting fees. District of Puerto Rico Local
Rule 54(b) states that “An application for attorneys' fees in those cases for which fees have been
contracted . . . shall be filed within fourteen (14) days of the expiration of the time for filing a
timely appeal.” Furthermore, District of Puerto Rico Local Rule 9(d)(2) was amended effective on
February 28, 2022 to state that “[a] party seeking attorneys’ fees pursuant to 42 U.S.C. § 406(b)
shall have thirty (30) days after counsel’s receipt of the original, amended, or corrected Notice of
Award, or the Social Security Correspondence sent at the conclusion of the Agency’s past-due
benefit calculation, stating the amount withheld.” See 03-MC-115, Dkt. 71-1. Local Rule 1(a)

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provides that “[t]he Court may modify [the local] rules in exceptional circumstances or when
justice so requires.”
DISCUSSION
A. Timeliness
Torres received the January 11, 2025 award notice (termed the Notice of Award, or
“NOA”) by the Social Security Administration (“SSA”) on January 14, 2025. Dkt. 41 at 2; 41-2.
A fourteen-day filing deadline applies to 406(b) motions and the countdown to this deadline begins
upon delivery of an original or amended NOA to counsel. Pais v. Kijakazi, 52 F.4th 486, 494 (1st
Cir. 2022); D.P.R. Civ. R. 9(b)(2); see also L.Civ.R. 9(d)(2). Social security regulations state the
date of notification is considered to be five days after the date on the notice. See 20 C.F.R.
§404.1703. Regardless, since Torres filed his motion on January 23, 2025, nine days after
receiving the NOA from the SSA, he has filed his motion timely.
B. Effectuating Payment of Net 406(b) Fees Through Offset Procedure
Before turning to the reasonableness of the fees, I will address Torres’s request that the
court order the agency only process the net attorney’s fees in the amount of $13,822.75, deducting
the EAJA fees that need to be refunded to claimant from the total amount of the 406(b) fees. Dkt.
41 at 8. That is, Torres seeks to meet his refund obligation by using an offset procedure. The
government opposes arguing Torres’s proposal is an “end-run around the statute and regulation
and the potential for abuse . . . is real.” Dkt. 43 at 2 (internal quotations omitted).
As stated above, in Social Security cases, attorney fees can be obtained pursuant to the
EAJA or the Social Security Act, 42 U.S.C. § 406. Fee awards may be made under both the EAJA
and 406(b), but if fees are awarded under both, the attorney claiming the award must refund the

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lesser award to the client. Gisbrecht v. Barnhart, 535 U.S. 789, 796 (2002); 28 U.S.C. § 2412. The
§2412(d) notes read, in pertinent part, as follows:
Section 206(b) of the Social Security Act (42 U.S.C. 406(b)(1)) shall not
prevent an award of fees and other expenses under section 2412(d) of title
28, United States Code. Section 206(b)(2) of the Social Security Act shall
not apply with respect to any such award but only if, where the claimant's
attorney receives fees for the same work under both section 206(b) of that
Act and section 2412(d) of title 28, United States Code, the claimant's
attorney refunds to the claimant the amount of the smaller fee.”
Pub.L.No. 99-80, §3, 99 Stat 183 (1985) (“Savings Provision” added to 28 U.S.C. §2412 notes)
(emphasis added). A natural reading of this language contemplates it is the attorney’s obligation
to refund the award with the lesser amount to the claimant. See O’Donnell v. Saul, 983 F.3d 950
(7th Cir. 2020) (“There’s not much room to argue about the natural reading of this language. . . .
And ‘[t]he obligation to make the refund is imposed on the attorney.’”)
Torres cites to an Eleventh Circuit case so that the court applies the proposed offset
procedure. Dkt. 41 (citing Jackson v. Comm’r of Soc. Sec., 601 F.3d 1268, 1274 (11th Cir. 2010)).
There, the court reasoned that the EAJA Savings Provision does not mandate a specific procedure
for refunding the attorney's fee or require that the court effectuate the refund. See Jackson, 601
F.3d at 1272. Accordingly, the attorney is responsible for effectuating the refund and may do so
by (1) reducing her Section 406(b) fee request by the amount of the EAJA award, or (2) refunding
the smaller EAJA award to Plaintiff and accepting the larger Section 406(b) award in full. Id. at
1273-74.
District Courts in other Circuits have applied the offset procedure. See, e.g., Willis v.
Comm'r of Soc. Sec., No. 1:10-CV-594, 2014 WL 2589259, at *7 (S.D. Ohio June 10,
2014) (deducting EAJA award from Section 406(b) fee); Allan v. Comm'r of Soc. Sec., No. 1011651, 2014 WL 1818110, at *1 (E.D. Mich. May 7, 2014) (reducing Section 406(b) fees by

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amount of previous EAJA award); Kolp v. Colvin, No. 12-C-842, 2015 WL 4623645, at *2 (E.D.
Wis. Aug. 3, 2015) (deducting EAJA award from § 406(b) fees); Wojtecki v. Comm'r of Soc. Sec.,
No. CIV. 09-584-ST, 2011 WL 1694462, at *5 (D. Or. Apr. 6, 2011) report and recommendation
adopted, No. CV 09-584-ST, 2011 WL 1671549 (D. Or. May 3, 2011) (subtracting the EAJA
fee); Boissiere v. Astrue, No. C-09-02081 JCS, 2011 WL 1045170, at *4 (N.D. Cal. Mar. 22,
2011) (recognizes offset procedure).
The First Circuit has not addressed the issue. However, the government cites to Shaw v.
Astrue, No. 1:09-cv-455-JAW, 2011 WL 2416261 (D. Me. June 13, 2011), R & R adopted, 2011
WL 2618872 (D. Me. July 1, 2011) to support their opposition to the offset procedure. There, the
district court did not use the offset procedure because applying it would make the claimant wait
for the balance of the money due to him rather than the attorney who has already received an
advanced payment of his/her fees from the claimant out of his/her past due benefits, which have
already been reduced to pay attorney’s fees directly to the attorney. Id. at *2. Torres argues the
case does not present similar facts. While it is true that Alvarez has not made any “advance”
payments to Torres, the concern that the procedure is an end-run to the statute is applicable. While
Torres states that the claimant would not receive the EAJA refund until he himself receives the §
406(b) fees authorized by this court, Dkt. 46 at 5-6, the same is true if the court agreed with his
proposal. Alvarez would have to wait until the court determines a reasonable fee and if there is
any remainder from the money withheld, it would be sent to claimant. See Dkt. 41-2 at 2.
Therefore, Torres’s concern for the time Alvarez would have to wait is pointless as Alvarez would
not receive the funds until a there is a determination of the amount of the attorney’s fees and the
SSA processes the payment.

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Torres also argues that were he given the 25% withheld, Alvarez’s prior attorneys would
not be able to collect their fees and would have to chase or sue Alvarez for payment. Dkt. 46 at 45. Torres states the release of the gross fee instead of the net fee will allow the agency to avoid its
obligations of disbursement of any subsequently authorized fee. Id. However, the agency does not
have an obligation to pay the attorneys, it is claimant’s obligation. See Binder & Binder, P.C. v.
Colvin, 818 F,3d 55, 71 (2d Cir. 2016) (“[T]he Social Security Act [SSA] fees, whether for services
before the SSA or the court, are the plaintiff’s debt and not the government’s.”).
Torres’s policy arguments are beside the point. I must apply the statute as it is written —
even if [I] think some other approach might ‘accor[d] with good policy.’” Burrage v. United States,
571 U.S. 204, 218 (2014) (quoting Comm'r v. Lundy, 516 U.S. 235, 252, (1996)). In light of the
natural reading of the statute, the Commissioner's objection, and without guidance from the First
Circuit authorizing this procedure, I will not apply the offset procedure here. Because the EAJA
award is less than the full § 406(b) award to which Torres is entitled, Torres will be directed to
refund the smaller EAJA amount pursuant to 28 U.S.C. § 406(b).
C. Reasonableness of Fees
I next turn to the reasonableness of the fees requested. Torres requests $17,722.75 in
attorney’s fees per the agreement between Alvarez and Torres, which provides for Torres to
receive 25% of Alvarez’s past-due benefits or the EAJA fee. Dkt. 41-1. Torres claims that his
request is reasonable not only because of the contingent nature of his representation of Alvarez,
but also because the contract between himself and Alvarez provides that Torres may seek 25% of
the past due benefits awarded to Alvarez and his work at the district court level is what led to the
Alvarez receiving past due benefits dating back to May 2016. Dkt. 41 at 3. The government does
not oppose Torres’s request for $17,722.75 in attorney’s fees. Dkt. 43 at 1-2.

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It is up to the courts to determine whether a fee amount requested pursuant to 406(b) is
reasonable. See Gisbrecht, 535 U.S. at 807. When determining if a fee is reasonable, courts should
first look to the contingent fee arrangement, then test for reasonableness based on the character of
the representation and the results the representative achieved. Id. at 808. Torres states that he spent
a total of 20.5 hours working on Alvarez’s case at the district court level. Dkt. 41 at 5. Torres’s
406(b) fee petition therefore amounts to a de facto rate of approximately $864.52 per hour, or the
requested $17,722.75 divided by the 20.5 hours Torres says he expended on the case. Torres did
not provide a breakdown of his time log with this motion, but he did file said document with his
motion for the EAJA fees. I will use the document as reference. See Dkt. 37-2.
If the de facto hourly rate was the only relevant factor in the present matter, I would find
that the amount requested by Torres is excessive. However, I must also weigh other relevant
factors. For example, as Torres claims, the fee amount requested does comply with the statutory
cap because it is not more than 25% of Alvarez’s past-due benefits. There is also no indication that
the terms of the contingent fee agreement reached by Torres and Alvarez were unreasonable, and
the agreement provides for Torres to keep 25% of Torres’s past-due benefits. See Dkt. 41-1.
Though courts have the duty to serve as an independent check regarding the reasonableness of fees
requested pursuant to § 406(b), this duty must be balanced against a client and his attorney’s free
and willful decision to enter into a contingency-fee agreement and their right to have that
agreement upheld. See Falcon v. Comm’r of Soc. Sec., 19-CV-1914 (MDM), Dkt. 32 at 8.
Additionally, it has been clearly established that a fee should not be reduced unless it is
“inordinately large.” See, e.g., Gisbrecht, 535 U.S. at 806-07.
There also is no indication that Torres’s conduct was improper or that his representation
was significantly substandard. A review of the docket and his time log reveals that Torres

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performed substantive work, such as drafting the complaint, reviewing transcripts and meeting
with Alvarez to discuss the administrative decisions, court orders and further steps. See Dkt. 37-2.
Torres also had to spend time familiarizing himself with the record as he did not represent Alvarez
in the administrative proceedings where Alvarez was denied benefits. And ultimately, Torres
achieved complete success because I found in claimant’s favor and remanded the case for further
proceedings at the agency.
On balance, I find that Torres’s request is reasonable. Although the hourly rate in other
Social Security attorney awards made to Torres by this court have been slightly lower, the de facto
hourly rate of $864.52 here is not unreasonably higher. See, e.g., Edwin E.P. v. Comm’r of Soc.
Sec.,21-CV-1383 (GLS), Dkt. 23 (awarding a de facto hourly rate of $740.08 for 12.85 hours);
Nunez Claudio v. Comm’r of Soc. Sec., 19-CV-1589 (CVR), Dkt. 28 (approving a de facto hourly
rate of $712.03 for 35.7 hours). Additionally, if I consider that this court has approved fees
between $600 and $1,231.50 for cases where there was a voluntary remand, Torres’s de facto
hourly rate of $864.52 is not unreasonable for more substantive work. See, e.g., Piñeiro-Fuentes
v. Comm’r of Soc. Sec., 18-CV-1556 (MDM), 2023 WL 6605907 (D.P.R. Oct. 10, 2023)
(approving de facto hourly rate of $1,010 for 19.8 hours of work on case involving post-briefing
voluntary remand); Vazquez-Soto v. Comm’r of Soc. Sec., 19-CV-1168 (MDM), 2023 WL
4285991 (D.P.R. June 30, 2023) (reduced fee award resulting in de facto hourly rate of $1,231.50
for 7.8 hours of work in case involving pre-briefing voluntary remand); Hernandez-Miranda v.
Comm’r of Soc. Sec., 18-CV-1390 (MEL), 2022 WL 6174113 (D.P.R. Oct. 10, 2022) (reduced fee
award due to pre-briefing voluntary remand resulting in de facto rate of $815.22 for 9.2 hours);
Santiago Diaz v. Comm'r of Soc. Sec., 19-CV-1139 (MEL), 2022 WL 420443 (D.P.R. Feb. 11,
2022) (granting an award of $6,180.00 for 10.3 hours of billable work despite denying $25,000.00

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as excessive, which amounts to $600.00 an hour); Pagan-Torres v. Comm’r of Soc. Sec., 18-CV1921 (MDM), Dkt. 42 (granting an award of $5,111.00 in attorney fees for 8.3 hours of billable
work despite denying the attorney’s full claim of $11,000.00 as excessive, which amounts to
approximately $615.78 per hour).
Accordingly, I grant Torres’s petition for attorney’s fees in the amount of $17,722.75 under
§406(b) but deny his request that the agency only process the net amount of the fees.
CONCLUSION
For the foregoing reasons, Torres’s petition for attorney fees under § 406(b) is GRANTED
IN PART and payment of the gross amount of $17,722.75 in attorney fees to Torres is authorized.
Torres is ordered to refund Alvarez $3,900.00 in fees previously awarded to Torres and
subsequently paid to him pursuant to the EAJA; payment should be made within seven days of
receipt of the 406(b) fees.
IT IS SO ORDERED.
In San Juan, Puerto Rico, this 5th day of March 2025.
S/ Bruce J. McGiverin
BRUCE J. MCGIVERIN
United States Magistrate Judge