On January 8, 2019, the Supreme Court of the United States decided Culbertson v. Berryhill, No. 17-773, holding that the Social Security Act permits an attorney fee award greater than 25 percent of the claimant’s past-due benefits for representation before both the Social Security Administration and a reviewing federal court.
The Social Security Act, 42 U.S.C. § 406 et seq., addresses attorney’s fees in two discrete phases: ‘“§406(a) governs fees for representation in administrative proceedings; §406(b) controls fees for representation in court.’” (quoting Gisbrecht v. Barnhart, 535 U. S. 789, 794 (2002)). Section 406(a) gives the agency discretion to award a reasonable fee to an attorney who obtains a favorable agency determination in the absence of a fee arrangement with the claimant, but, if there is a fee arrangement, section 406(a) “caps fees at the lesser of 25 [percent] of past-due benefits or a set dollar amount—currently $6,000.” Section 406(b), titled “Fees for representation before court,” allows a court to award “a reasonable fee for such representation, not in excess of 25 [percent] of the total of the past-due benefits” if “a court renders a judgment favorable to a claimant.” Id. § 406(b)(1)(A).
Attorney Richard Culbertson represented a Social Security claimant before the Social Security Administration as well as before a federal district court. The agency denied the claimant’s benefits, and Culbertson sought review of that decision before the District Court. The District Court ruled in favor of the claimant, reversing the agency’s denial of benefits and remanding the case to the agency to determine the benefits due the claimant. On remand, the agency awarded the claimant past-due benefits and also awarded Culbertson fees under section 406(a) for representing the claimant before the agency. Culbertson subsequently moved the District Court for a separate fee award under section 406(b) based on his representation of the claimant there. “The court granted Culbertson’s request only in part because he did not subtract the amount he had already received under §406(a) for his agency-level representation.” The Eleventh Circuit affirmed based on its precedent at the time which dictated that ‘“the 25 [percent] limit from §406(b) applies to total fees awarded under both §406(a) and (b), precluding the aggregate allowance of attorney’s fees greater than  percent of the past due benefits received by the claimant.’” (quoting Wood v. Commissioner of Social Security, 861 F. 3d 1197, 1205 (11th Cir. 2017) (internal quotations omitted)).
The Supreme Court began and ended its inquiry with the language of the statute because ‘“the statute’s language is plain.’” The Court observed that § 406(b) specifically addresses representation in court and allows a court to award ‘“a reasonable fee for such representation.’” (quoting 42 U.S.C. § 406(b)(1)(A)). The Court held that the phrase “such representation” in section 406(b) demonstrated that section 406(b)’s “25 [percent] cap applies only to fees for representation before the court, not the agency.” The Court explained that “the adjective ‘such’ means ‘[o]f the kind or degree already described or implied,’” (quoting H. Fowler & F. Fowler, Concise Oxford Dictionary of Current English 1289 (5th ed. 1964)), and that “the only form of representation ‘already described’ in §406(b) is ‘represent[ation] before the court by an attorney.’”
The Court went on to explain that the structure of the statute confirmed the Court’s interpretation. First, “subsections (a) and (b) address different stages of the representation,” and it makes sense “that the statute contemplates separate fees for each stage of representation.” And, second, the subsections calculate the attorney’s fees differently. Were the Eleventh Circuit’s interpretation correct, section 406(b)’s calculation of fees would limit section 406(a)’s calculation, which “would make little sense” given that “[m]any claimants will never litigate in court.”
The Court rejected the argument advanced by amicus curiae that, reading the statute as a whole, Congress intended a cumulative 25 percent cap on attorney’s fees for successful representation before the agency and the court. Acknowledging the Commissioner’s current policy to withhold only 25 percent of past-due benefits for direct payment of agency and court fees, the Court nonetheless noted that the statute provides “two pools of money for direct payment of fees” and further that “[a]ny shortage of withheld benefits for direct payment of fees is thus due to agency policy.” The Court also observed that the amount of past-due benefits withheld for direct payment did not limit the amount of fees that could be charged, observing that the statute historically did not have a direct payment mechanism.
Justice Thomas delivered the decision for a unanimous Court.