Ninth Circuit Weighs in on Split Re Scope of Attorney's Fees under § 406(b)

Per Clark v. Astrue, 529 F.3d 1211 (9th Cir. Jun 25, 2008):

The issue presented here is one of first impression in the Ninth Circuit: Does 42 U.S.C. § 406(b) limit only the attorney's fees awarded under § 406(b) for representation before the court to 25% of the claimant's past-due benefits, or does § 406(b) limit the combined total of attorney's fees awarded under both § 406(a) and § 406(b) to 25% of past-due benefits? Other circuits that have addressed this issue have reached different results. Based on the plain text of the statute, the Sixth and Tenth Circuits have held § 406(b)'s cap on attorney's fees applies only to fees awarded under § 406(b), and does not limit the combined fees awarded under both § 406(a) and § 406(b). Wrenn ex rel. Wrenn v. Astrue, 525 F.3d 931, 936 (10th Cir.2008); Horenstein v. Sec'y of Health & Human Servs., 35 F.3d 261, 262 (6th Cir.1994) (en banc), overruling Webb v. Richardson, 472 F.2d 529 (6th Cir.1972). Based primarily on legislative history, however, the Fourth and Fifth Circuits have held § 406(b) limits the combined attorney's fees awarded under both § 406(a) and § 406(b) to 25% of the claimant's past-due benefits. Morris v. Social Sec. Admin., 689 F.2d 495, 497-98 (4th Cir.1982); Dawson v. Finch, 425 F.2d 1192, 1195 (5th Cir.1970).

Because the plain text of § 406(b) limits only the award of attorney's fees for representation of a Social Security claimant before the district court, we follow the Sixth and Tenth Circuits, and hold the district court erred in concluding § 406(b) limits the total amount of attorney's fees awarded under both § 406(a) and § 406(b).