Buchanan v. Apfel

Attorney Dale Buchanan represented five individuals in successful claims for back benefits before the Commissioner of Social Security. The clients entered into contingency fee contracts under which Mr. Buchanan was to receive either 25 percent of the claimants'' back benefits or a flat fee, whichever was greater. Because 25 percent of the back benefits in each case was less than the flat fee (either $1,000 or $1,500, depending on the case), Buchanan subsequently submitted fee petitions to the Commissioner to request approval of the agreed-upon fees. The Commissioner denied these petitions and instead reduced the fees to 25 percent of the claimants'' back benefits. The Regional Chief Administrative Law Judge affirmed the Commissioner''s decisions although the judge amended the fees of two of the clients. Even after this adjustment, Mr. Buchanan''s effective hourly rate in the five cases ranged from a low of $5.50 per hour to a high of $44.31 per hour.

Mr. Buchanan brought the matter to the U.S. District Court for the Eastern District of Tennessee, arguing that the Commissioner's flat limitation on attorney's fees constituted a denial of due process of law and a violation of the applicable federal statute and SSA regulations. Mr. Buchanan noted that there is no fixed limit on the fee that an attorney may charge under 42 U.S.C. § 406(a)(1), and that SSA regulation 20 C.F.R. § 404.1725(b) and disability insurance regulation 20 C.F.R. § 416.1525(b) require the Commissioner to weigh certain specified factors in calculating attorney-fee awards, including the complexity of the case, the amount of time the attorney spent on the case, and the fee amount agreed upon between the attorney and the client. The District Court concluded that it had no subject-matter jurisdiction to review Buchanan''s claims.

Holding that mandamus jurisdiction is available for Mr. Buchanan's claim, the U.S. Court of Appeals for the Sixth Circuit remands the case to give Mr. Buchanan the opportunity to establish its merits. 'The use of a blanket fee cap such as that alleged by Buchanan,' the court writes, 'would be a violation of the Commissioner''s duties, because such a cap cannot be reconciled with the full consideration of the factors specified in 20 C.F.R. §§ 404.1725(b) and 416.1525(b).'