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HUTCHINSON v. BOWEN

January 11, 1988

Harry (Henry) Hutchinson, Plaintiff,
v.
Otis Bowen, Secretary of Health and Human Services, Defendant



The opinion of the court was delivered by: DEBEVOISE

 DEBEVOISE, District Judge:

 This matter is before the court on the motion of Jeffrey W. Goldblatt, Esq. for approval of a fee petition and allowance of attorneys fees in the amount of $ 460.00 for Goldblatt's representation of Henry Hutchinson before this court in an unsuccessful appeal from a denial of disability benefits by the Secretary of Health and Human Services ("the Secretary"). For the reasons stated below, the motion is denied.

 In the petition and brief submitted in support of his motion, Goldblatt states that he and Hutchinson agreed before the challenge was brought that "if the case was won, 25% of accrued benefits would be applied for by [Goldblatt]. If the case was lost, application would be made for approval of the $ 500.00 retainer [deposited in Goldblatt's trust account before the action was brought]." Apparently, $ 40.00 of the $ 500.00 deposited in the account has already been used for costs.

 Hutchinson's appeal from the denial of his benefits was filed on August 1, 1986. On October 9, 1987, I filed an order and an opinion affirming the administrative decision.

 The Social Security Act, 42 U.S.C. sec. 301 et seq., ("the Act") provides that:

 
Whenever a court renders a judgment favorable to a claimant under this subchapter who was represented before the court by an attorney, the court may determine and allow as part of its judgment 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 by reason of such judgment . . . . In case of any such judgment, no other fee may be payable or certified for payment for such representation except as provided in this paragraph.

 42 U.S.C. sec. 406(b)(1). *fn1" The Act does not grant authority for a district court to approve attorneys fees where a proceeding does not result in payment of past-due benefits. Thus, I must deny the motion to approve Mr. Goldblatt's fees.

 The question remains, however, whether the Act allows Goldblatt to collect any fees at all. On its face, the prohibition in section 406(b) seems to apply only where the court has rendered a judgment in the claimant's favor, and thus would not prohibit collection of attorneys fees for representation before a district court where the proceeding did not result in payment of past-due benefits. Because, as shown below, this reading is not contradicted by other relevant statutory provisions, the legislative history, or the cases, I conclude that the Act does not prohibit collection of fees in this case.

 Section 206(a) of the Act, which governs attorney fees for representation in connection with disability claims before the Secretary, is of little use in determining the intent of Congress in section 406(b). That provision allows the Secretary to "prescribe the maximum fees which may be charged for services performed in connection with any [disability] claim before the Secretary[,]" and sets forth the maximum fee that may be charged when a proceeding results in payment of past-due benefits. This maximum fee bears some similarity to the maximum fee in section 406(b)(1). The Secretary has interpreted section 406(a) to mean that the agency may approve attorney fees for representation before the agency whether or not the proceeding results in an award of past-due benefits. 20 C.F.R. sec. 404.1725(b)(2).

 The legislative history is also ambiguous. Current section 405(b) was added by the Senate as an amendment to the House bill in the Social Security Amendments of 1965. The Senate Report states that

 
The committee bill would provide that whenever a court renders a judgment favorable to a claimant, it would have express authority to allow as part of its judgment a reasonable fee, not in excess of 25 percent of accrued benefits, for services rendered in connection with the claim; no other fee would be payable.

 S. Rep. No. 404, 89th Congress, 1st Sess. 422 (1965), reprinted in 1965 U.S. Code Congressional and Administrative News 1943, 2062. Although it is arguable that this language favors an interpretation of the provision that prohibits fees where past-due benefits are not awarded, other language in the report focusses primarily on contingent fees, thus supporting the view that Congress meant only to eradicate excessive contingent ...


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