Culbertson v. Berryhill, 586 U.S. ___ (2019)

Justia Opinion Summary and Annotations

For representation in administrative proceedings, the Social Security Act provides that if a fee agreement exists, fees are capped at the lesser of 25% of past-due benefits or a set dollar amount—currently $6,000, 42 U.S.C. 406(a)(2)(A); absent an agreement, the agency may set any “reasonable” fee, section 406(a)(1). In either case, the agency is required to withhold up to 25% of past-due benefits for direct payment of fees. For representation in court proceedings, section 406(b) caps fees at 25% of past-due benefits; the agency may withhold benefits to pay these fees.

Culbertson represented Wood in Social Security disability benefit proceedings before the agency and in court. The agency ultimately awarded Wood past-due benefits, withheld 25%, and awarded Culbertson fees under section 406(a) for representation before the agency. Culbertson sought a separate award under 406(b) for the court proceedings, requesting 25% of past-due benefits. The Eleventh Circuit held that 406(b)’s 25% limit applies to the total fees awarded under both sections.

The Supreme Court reversed. Section 406(b)(1)(A)’s 25% cap applies only to fees for court representation, not to the aggregate fees awarded under 406(a) and (b). The subsections address different stages of the representation and use different methods for calculating fees. Applying 406(b)’s 25% cap on court-stage fees to 406(a) agency-stage fees, or the aggregate fees, would make little sense and would subject 406(a)(1)’s reasonableness limitation to 406(b)’s 25% cap—a limitation not included in the statute. The fact that the agency presently withholds a single pool of past-due benefits for payment of fees does not support an aggregate reading. The amount of past-due benefits that the agency can withhold for payment does not delimit the amount of fees that can be approved for representation before the agency or the court.

Annotation

Primary Holding
Social Security Act section 406(b)(1)(A)’s 25% cap applies only to fees for court representation, not to the aggregate fees awarded under sections 406(a) and (b) for representation before the agency and before the court.

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

Syllabus

Culbertson v. Berryhill, ACTING Commissioner of Social Security

certiorari to the united states court of appeals for the eleventh circuit

No. 17–773. Argued November 7, 2018—Decided January 8, 2019

The Social Security Act regulates the fees that attorneys may charge claimants seeking Title II benefits for representation both before the Social Security Administration and in federal court. For representation in administrative proceedings, the Act provides two ways to determine fees. If a fee agreement exists, fees are capped at the lesser of 25% of past-due benefits or a set dollar amount—currently $6,000. 42 U. S. C. §406(a)(2)(A). Absent an agreement, the agency may set any “reasonable” fee. §406(a)(1). In either case, the agency is required to withhold up to 25% of past-due benefits for direct payment of any fee. §406(a)(4). For representation in court proceedings, fees are capped at 25% of past-due benefits, and the agency has authority to withhold such benefits to pay these fees. §406(b)(1)(A).

Petitioner Culbertson represented Katrina Wood in Social Security disability benefit proceedings before the agency and in District Court. The agency ultimately awarded Wood past-due benefits, withheld 25% of those benefits to pay any attorney’s fees, and awarded Culbertson fees under §406(a) for representation before the agency. Culbertson then moved for a separate fee award under §406(b) for the court proceedings, requesting a full 25% of past-due benefits. The District Court granted the request, but only in part, because Culbertson did not subtract the amount he had already received under §406(a) for his agency-level representation. The Eleventh Circuit affirmed, holding that the 25% limit under §406(b) applies to the total fees awarded under both §§406(a) and (b).

Held: Section 406(b)(1)(A)’s 25% cap applies only to fees for court representation and not to the aggregate fees awarded under §§406(a) and (b). Pp. 5–9.

(a) Section 406(b) provides that a court rendering a favorable judgment to a claimant “represented before the court by an attorney” may award “a reasonable fee for such representation, not in excess of 25 percent” of past-due benefits. Here, the adjective “such,” which means “[o]f the kind or degree already described or implied,” refers to the only form of representation “already described” in §406(b)—i.e., “represent[ation] before the court.” Thus, the 25% cap applies only to fees for representation before the court, not the agency.

Subsections (a) and (b) address different stages of the representation and use different methods for calculating fees. Given this statutory structure, applying §406(b)’s 25% cap on court-stage fees to §406(a) agency-stage fees, or the aggregate of §§406(a) and (b) fees, would make little sense. For example, such a reading would subject §406(a)(1)’s reasonableness limitation to §406(b)’s 25% cap—a limitation not included in the relevant provision of the statute. Had Congress wanted agency-stage fees to be capped at 25%, it presumably would have said so directly in subsection (a). Pp. 5–7.

(b) The fact that the agency presently withholds a single pool of 25% of past-due benefits for direct payment of agency and court fees does not support an aggregate reading. The statutory text provides for two pools of money for direct payment of fees. See §§406(a)(4), (b)(1)(A). The agency’s choice to withhold only one pool of 25% of past-due benefits does not alter this text. More fundamentally, the amount of past-due benefits that the agency can withhold for direct payment does not delimit the amount of fees that can be approved for representation before the agency or the court. Pp. 7–9.

861 F. 3d 1197, reversed and remanded.

Thomas, J., delivered the opinion for a unanimous Court.

NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES

_________________

No. 17–773

_________________

RICHARD ALLEN CULBERTSON, PETITIONER v. NANCY A. BERRYHILL, ACTING COMMISSIONER OF SOCIAL SECURITY

on writ of certiorari to the united states court of appeals for the eleventh circuit

[January 8, 2019]

Justice Thomas delivered the opinion of the Court.

Federal law regulates the fees that attorneys may charge Social Security claimants for representation before the Social Security Administration and a reviewing court. See 42 U. S. C. §§406(a)–(b). The question in this case is whether the statutory scheme limits the aggregate amount of fees for both stages of representation to 25% of the claimant’s past-due benefits. Because §406(b) by its terms imposes a 25% cap on fees only for representation before a court, and §406(a) has separate caps on fees for representation before the agency, we hold that the statute does not impose a 25% cap on aggregate fees.

I

A

Title II of the Social Security Act, 49Stat. 622, as amended, 42 U. S. C. §401 et seq., “is an insurance program” that “provides old-age, survivor, and disability benefits to insured individuals irrespective of financial need.” Bowen v. Galbreath, 485 U. S. 74, 75 (1988). A claimant’s application for Title II benefits can result in payments of past-due benefits—i.e., benefits that accrued before a favorable decision, 20 CFR §404.1703 (2018)—as well as ongoing monthly benefits, see 42 U. S. C. §423(a). A claimant who has been denied benefits “in whole or in part” by the Social Security Administration may seek administrative review of the initial agency determination, §405(b), and may then seek judicial review of the resulting final agency decision, §405(g).

As presently written, the Social Security Act “discretely” addresses attorney’s fees for the administrative and judicial-review stages: “§406(a) governs fees for representa-tion in administrative proceedings; §406(b) controls fees for representation in court.” Gisbrecht v. Barnhart, 535 U. S. 789, 794 (2002). The original Social Security Act made no such provision for attorney’s fees in either proceeding. Id., at 793, n. 2. But in 1939, “Congress amended the Act to permit the Social Security Board to prescribe maximum fees attorneys could charge for representation of claimants before the agency.” Ibid. In 1965, Congress added a new subsection (b) to §406 that explicitly prescribed fees for representation before a court and “allow[ed] withholding of past-due benefits to pay” these fees directly to the attorney. Social Security Amendments of 1965, §332, 79Stat. 403; Bowen, 485 U. S., at 76. In 1968, Congress amended subsection (a) to give the agency similar withholding authority to pay attorney’s fees incurred in administrative proceedings. Id., at 76.

Section 406(a) is titled “Recognition of representatives; fees for representation before Commissioner” of Social Security. It includes two ways to determine fees for representation before the agency, depending on whether a prior fee agreement exists. If the claimant has a fee agreement, subsection (a)(2) caps fees at the lesser of 25% of past-due benefits or a set dollar amount—currently $6,000. §406(a)(2)(A); Maximum Dollar Limit in the Fee Agreement Process, 74 Fed. Reg. 6080 (2009). Absent a fee agreement, subsection (a)(1) gives the agency authority to “prescribe the maximum fees which may be charged for services performed in connection with any claim” before the agency. If the claimant obtains a favorable agency determination, the agency may allot “a reasonable fee to compensate such attorney for the services performed by him.”

Subsection (a)(4) requires the agency to withhold up to 25% of past-due benefits for direct payment of any fee for representation before the agency:

“[I]f the claimant is determined to be entitled to past-due benefits under this subchapter and the person representing the claimant is an attorney, the Commissioner of Social Security shall . . . certify for payment out of such past-due benefits . . . to such attorney an amount equal to so much of the maximum fee as does not exceed 25 percent of such past-due benefits . . . .”

Section 406(b) is titled “Fees for representation before court.” Subsection (b)(1)(A) both limits these fees to no more than 25% of past-due benefits and allows the agency to withhold past-due benefits to pay these fees:

“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, and the Commissioner of Social Security may . . . certify the amount of such fee for payment to such attorney out of, and not in addition to, the amount of such past-due benefits.”

At issue is whether §406(b)’s 25% cap limits the aggregate fees awarded for representation before both the agency under §406(a) and the court under §406(b), or instead limits only the fee awarded for court representation under §406(b).

B

Petitioner Richard Culbertson represented claimant Katrina Wood in proceedings seeking Social Security disability benefits. After the agency denied Wood benefits, she brought an action in district court. For the court action, Wood signed a contingency-fee agreement “to pay a fee of 25 percent of the total of the past-due benefits to which [she] is entitled” in consideration for Culbertson’s “representation of [her] in Federal Court.” App. 8–9. The agreement excludes fees for “any representation before” the agency. Id., at 9.

The District Court reversed the agency’s denial of benefits and remanded for further proceedings. The court granted Wood attorney’s fees under the Equal Access to Justice Act (EAJA), which authorizes an award against the Government for reasonable fees in “civil action[s].” 28 U. S. C. §§2412(d)(1)(A) and (2)(A).

On remand, the agency awarded Wood past-due disability benefits and withheld 25% of those benefits to pay any attorney’s fees that might ultimately be awarded. The agency also awarded Culbertson §406(a) fees for representing Wood before the agency.

Culbertson then moved the District Court for a separate fee award under §406(b) for representing Wood there. After accounting for the EAJA award, see Gisbrecht, supra, at 796; App. 9, this request amounted to a full 25% of past-due benefits. 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, relying on Circuit precedent to hold that “the 25% limit from §406(b) applies to total fees awarded under both §406(a) and (b), ‘preclud[ing] the aggregate allowance of attorney’s fees greater than twenty-five percent of the past due benefits received by the claimant.’ ” Wood v. Commissioner of Social Security, 861 F. 3d 1197, 1205 (2017) (quoting Dawson v. Finch, 425 F. 2d 1192, 1195 (CA5 1970); emphasis deleted).[1]*

Given a conflict between the Circuits on this question, see 861 F. 3d, at 1205–1206, we granted certiorari. 584 U. S. ___ (2018). Because no party defends the judgment, we appointed Amy Weil to brief and argue this case as amicus curiae in support of the judgment below. 584 U. S. ___ (2018). Amicus Weil has ably discharged her assigned responsibilities.

II

A

We “begi[n] with the language of the statute itself, and that is also where the inquiry should end, for the statute’s language is plain.” Puerto Rico v. Franklin Cal. Tax-Free Trust, 579 U. S. ___, ___ (2016) (slip op., at 9) (internal quotation marks omitted). Under §406(b), when a court “renders a judgment favorable to a claimant . . . who was represented before the court by an attorney,” the court may award “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.” 42 U. S. C. §406(b)(1)(A) (emphasis added). Both at the time of enactment and today, the adjective “such” means “[o]f the kind or degree already described or implied.” H. Fowler & F. Fowler, Concise Oxford Dictionary of Current English 1289 (5th ed. 1964); Black’s Law Dictionary 1661 (10th ed. 2014) (“[t]hat or those; having just been mentioned”). Here, the only form of representation “already described” in §406(b) is “represent[ation] before the court by an attorney.” Accordingly, the 25% cap applies only to fees for representation before the court, not the agency.

This interpretation is supported by “the structure of the statute and its other provisions.” Maracich v. Spears, 570 U. S. 48, 60 (2013). As an initial matter, subsections (a) and (b) address different stages of the representation. Section 406(a) addresses fees for representation “before the Commissioner,” whereas §406(b) addresses fees for representation in court. Because some claimants will prevail before the agency and have no need to bring a court action, it is unsurprising that the statute contemplates separate fees for each stage of representation.

These subsections also calculate fees differently. Section 406(b) applies a flat 25% cap on fees for court representation. By contrast, §406(a) provides two ways to determine fees for agency proceedings. Subsection (a)(2) caps fees based on a fee agreement at the lesser of 25% of past-due benefits or $6,000. Supra, at 2. If there is no fee agreement, the agency may set any fee, including a fee greater than 25% of past-due benefits, so long as the fee is “reasonable.” §406(a)(1).

Given this statutory structure, applying §406(b)’s 25% cap on court-stage fees to §406(a) agency-stage fees, or the aggregate of §§406(a) and (b) fees, would make little sense. Many claimants will never litigate in court, yet under the aggregate reading, agency fees would be capped at 25% based on a provision related exclusively to representation in court. Absent a fee agreement, §406(a)(1) subjects agency fees only to a reasonableness limitation, so applying §406(b)’s cap to such fees would add a limitation that Congress did not include in the relevant provision of the statute. If Congress had wanted these fees to be capped at 25%, it presumably would have said so directly in subsection (a), instead of providing for a “reasonable fee” in that subsection and adding a 25% cap in §406(b) without even referencing subsection (a). Thus, the structure of the statute confirms that §406(b) caps only court representation fees.

B

Amicus Amy Weil agrees that “§406(a) and §406(b) provide separate avenues for an award of attorney’s fees for representation of a Social Security claimant,” but emphasizes that “these fees are certified for payment out of a single source: the 25% of past-due benefits withheld by the Commissioner.” Brief for Court-Appointed Amicus Curiae 10. According to Amicus, “[b]ecause the Commissioner withholds only one pool of 25% of past-due benefits from which to pay attorney’s fees for both agency and court representation, for an attorney to collect a fee that exceeds the 25% pool of withheld disability benefits,” the attorney may “need to file a lawsuit against his disabled client” to collect the difference. Id., at 23–24. Therefore, Amicus urges, “[w]hen the statute is read as a whole,” “it is evident that Congress placed a cumulative 25% cap on attorney’s fees payable for successful representation of a Social Security claimant before both the agency and the court.” Id., at 10.

Amicus is quite right that presently the agency withholds a single pool of 25% of past-due benefits for direct payment of agency and court fees. See Social Security Administration, Program Operations Manual System (POMS), GN 03920.035(A), online at https://policy.ssa.gov/ poms.nsf/lnx/0203920035 (as last visited Jan. 2, 2019); see also 20 CFR §§404.1730(a) and (b)(1)(i). And Amicus sensibly argues that if there is only a single 25% pool for direct payment of fees, Congress might not have intended aggregate fees higher than 25%. This argument is plausible, but the statutory text in fact provides for two pools of money for direct payment of fees. Any shortage of withheld benefits for direct payment of fees is thus due to agency policy.

Under §406(a)(4), the agency “shall” certify for direct payment of agency representation fees “an amount equal to so much of the maximum fee as does not exceed 25 percent of” past-due benefits. In other words, this subsection requires that the agency withhold the approved fees for work performed in agency proceedings, up to 25% of the amount of the claimant’s past-due benefits. But this is not the only subsection that enables the agency to withhold past-due benefits for direct payment of fees. Section 406(b)(1)(A) provides that the agency “may” certify past-due benefits for direct payment of court representation fees. As the Government explains, the agency has nevertheless “exercised its discretion . . . to withhold a total of 25% of past-due benefits for direct payment of the approved agency and court fees.” Reply Brief for Respondent 8 (emphasis added). The agency’s choice to withhold only one pool of 25% of past-due benefits does not alter the statutory text, which differentiates between agency representation in §406(a) and court representation in §406(b), contains separate caps on fees for each type of representation, and authorizes two pools of withheld benefits.

More fundamentally, the amount of past-due benefits that the agency can withhold for direct payment does not delimit the amount of fees that can be approved for representation before the agency or the court. The attorney might receive a direct payment out of past-due benefits, but that payment could be less than the fees to which the attorney is entitled. Indeed, prior to 1968, the statute allowed fees for agency representation but lacked a provision for direct payment of such fees from past-due benefits. See supra, at 2. And under the current §§406(a)(1) and (4), the agency can award a “reasonable fee” that exceeds the 25% of past-due benefits it can withhold for direct payment.

In short, despite the force of Amicus’ arguments, the statute does not bear her reading. Any concerns about a shortage of withheld benefits for direct payment and the consequences of such a shortage are best addressed to the agency, Congress, or the attorney’s good judgment.

*  *  *

Because the 25% cap in §406(b)(1)(A) applies only to fees for court representation, and not to the aggregate fees awarded under §§406(a) and (b), the judgment of the United States Court of Appeals for the Eleventh Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.

Notes
1 * See Bonner v. Prichard, 661 F. 2d 1206, 1209 (CA11 1981) (en banc) (adopting all decisions of the former Fifth Circuit announced prior to October 1, 1981, as binding precedent in the Eleventh Circuit).
September 5, 2017 Application (17A279) to extend the time to file a petition for a writ of certiorari from September 24, 2017 to November 23, 2017, submitted to Justice Thomas.
September 15, 2017 Application (17A279) granted by Justice Thomas extending the time to file until November 23, 2017.
November 21, 2017 Pursuant to Rule 34.6 and Paragraph 9 of the Guidelines for the Submission of Documents to the Supreme Court’s Electronic Filing System, filings in this case should be submitted in paper form only, and should not be submitted through the Court’s electronic filing system.
November 21, 2017 Petition for a writ of certiorari filed. (Response due December 27, 2017)
December 20, 2017 Motion to extend the time to file a response from December 27, 2017 to January 26, 2018, submitted to The Clerk.
December 21, 2017 Motion to extend the time to file a response is granted and the time is extended to and including January 26, 2018
January 25, 2018 Motion to extend the time to file a response is granted and the time is further extended to and including March 8, 2018.
January 25, 2018 Motion to extend the time to file a response from January 26, 2018 to March 8, 2018, submitted to The Clerk.
March 5, 2018 Motion to extend the time to file a response from March 8, 2018 to March 22, 2018, submitted to The Clerk.
March 6, 2018 Motion to extend the time to file a response is granted and the time is further extended to and including March 22, 2018.
March 20, 2018 Motion to extend the time to file a response from March 22, 2018 to April 5, 2018, submitted to The Clerk.
March 21, 2018 Motion to extend the time to file a response is granted and the time is extended to and including April 5, 2018.
April 3, 2018 Letter of March 30, 2018, received from counsel for the petitioner.
April 5, 2018 Brief of respondent Nancy A. Berryhill, Deputy Commissioner for Operations, Social Security Administration filed.
April 13, 2018 Letter waiving the 14-day waiting period for the filing of a reply pursuant to Rule 15.5 received.
April 18, 2018 DISTRIBUTED for Conference of 5/10/2018.
May 14, 2018 DISTRIBUTED for Conference of 5/17/2018.
May 21, 2018 Petition GRANTED.
May 21, 2018 As Rule 34.6 provides, “If the Court schedules briefing and oral argument in a case that was governed by Federal Rule of Civil Procedure 5.2(c) or Federal Rule of Criminal Procedure 49.1(c), the parties shall submit electronic versions of all prior and subsequent filings with this Court in the case, subject to [applicable] redaction rules.” Subsequent party and amicus filings in the case should now be submitted through the Court’s electronic filing system, with any necessary redactions.
May 24, 2018 Blanket Consent filed by Petitioner, Richard Culbertson.
May 25, 2018 Amy Weil, Esquire, of Atlanta, Georgia, is invited to brief and argue this case, as amicus curiae, in support of the judgment below.
July 3, 2018 Motion to extend the time to file the briefs on the merits granted. The time to file the joint appendix, petitioner's brief on the merits, and respondent's brief in support is extended to and including July 16, 2018. The time to file the brief of Court-appointed amicus curiae in support of the judgment below is extended to and including September 7, 2018.
July 3, 2018 Any amicus briefs in support of the judgment below are due within 7 days after the filing of the brief of Court-appointed amicus curiae in support of the judgment below.
July 3, 2018 Motion for an extension of time to file the briefs on the merits filed.
July 16, 2018 Joint appendix filed.
July 16, 2018 Brief of petitioner Richard Culbertson filed.
July 16, 2018 Brief of respondent Nancy A. Berryhill, Deputy Commissioner for Operations, Social Security Administration in support of reversal and remand filed.
July 23, 2018 Amicus brief of National Organization of Social Security Claimants’ Representatives not accepted for filing. (July 25, 2018) - To be resubmitted with required documents.)
July 23, 2018 Brief amicus curiae of National Organization of Social Security Claimants’ Representatives in support of neither party filed.
August 13, 2018 Motion of Nancy A. Berryhill, Deputy Commissioner for Operations, Social Security Administration for divided argument submitted.
August 13, 2018 Motion for divided argument filed by respondent Nancy A. Berryhill, Deputy Commissioner for Operations, Social Security Administration.
August 20, 2018 SET FOR ARGUMENT on Wednesday, November 7, 2018
September 6, 2018 Amicus brief of Court-appointed amicus curiae in support of the judgment below submitted.
Prior History
  • Wood v. Commissioner of Social Security, No. 16-13664 (11th Cir. Jun. 26, 2017)
  • Richard Culbertson was counsel for the four plaintiffs in these consolidated Social Security disability benefits cases. At issue in this appeal was the attorney's fees for Culbertson under 42 U.S.C. 406 and the Equal Access to Justice Act (EAJA), 28 U.S.C. 2412(d). The Eleventh Circuit held that the district court did not err in its interpretation and application of Dawson v. Finch, 425 F.2d 1192 (5th Cir. 1970) and by imposing a 24% cap on section 406 fees; it was necessary for the district court to add the requested section 406(b) fee together with his EAJA award; and the district court did not abuse its discretion and did not exceed its authority. Accordingly, the court affirmed the judgment.

  • Wood v. Commissioner of Social Security, No. 6:2012cv00915 (M.D. Fla. Sep. 16, 2013)
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