United States Court of Appeals For the First Circuit
No. 21-1948
JOSE PAIS,
Plaintiff, Appellant,
v.
KILOLO KIJAKAZI, Acting Commissioner, Social Security Administration,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND
[Hon. Patricia A. Sullivan, U.S. Magistrate Judge]
Before
Kayatta, Lipez, and Thompson, Circuit Judges.
David Spunzo, with whom Green & Greenberg was on brief, for appellant. Timothy Sean Bolen, with whom Zachary A. Cunha, United States Attorney, Michael J. Pelgro, Regional Chief Counsel, Social Security Administration, and Ronald W. Makawa, Special United States Attorney, Social Security Administration, were on brief, for appellee.
November 1, 2022 THOMPSON, Circuit Judge. Today's case brings to mind a
particularly useful adage: He who hesitates is lost. Counsel for
Jose Pais appeals from the district court's denial of his motion
for attorneys' fees, which he filed over two years after
successfully representing Pais before both the Social Security
Administration (SSA) and the district court. For the reasons
stated below, we affirm the district court's denial of the motion
as untimely.
I. BACKGROUND
Back in 2014, Pais unsuccessfully applied for disability
insurance benefits with the SSA. Nearly three years later, seeking
a reversal of the agency's decision, he entered into a fee
agreement that provided for contingent attorneys' fees -- to be
collected out of retroactive benefits awarded as a result of the
representation, should it be successful. With the assistance of
counsel, it was: In 2018, the district court ruled for Pais and
remanded the case to the agency for further proceedings, which
ultimately found Pais to be a person with a disability and thus
entitled to benefits.
It was at this point that Pais and his counsel received
a Notice of Award (NOA) from the SSA. On June 16, 2019, the SSA
issued an NOA notifying Pais that he was entitled to past-due
benefits, and that 25 percent of his benefits ($29,159.13) was
being withheld for potential attorneys' fees collectable under
- 2 - 42 U.S.C. § 406.1 Soon after, Pais's counsel submitted timesheets
requesting legal fees collectable under § 406(a) -- that is, fees
for work done in administrative proceedings before the SSA. On
November 19, 2019, the agency approved an award of $7,091.03 for
such fees.
Pais's counsel was far slower to petition for the fees
he was entitled to for his work before the district court. Nearly
a year after issuing the NOA, on May 24, 2020, the SSA sent a
letter to Pais's attorney noting that the agency continued to
withhold the remaining $22,068.10 collectable under § 406(b) for
such work. On October 26, 2020, the agency sent another letter
regarding the withheld funds, with additional language stating
that the agency "will certify for payment to the claimant all
withheld benefits unless [his attorney] file[s] a petition for
approval of a fee within 20 days from the date of this letter, or
a written request for an extension of time." The agency
subsequently received a letter from Pais's attorney, dated
November 3, 2020, advising of his "intention to file a motion with
the District Court for approval [of] 406(b) fees," requesting "an
extension of time" to do so, and stating that he expected to file
it "shortly." No immediate action followed, but the agency
1As explained more fully below, 42 U.S.C. § 406 outlines what fees an attorney may collect after successfully representing a claimant in an action for past-due benefits from the SSA.
- 3 - nonetheless sent two more notices on April 25, 2021, and August
11, 2021, identifying the withheld funds and threatening
distribution to the claimant unless counsel filed a petition or
moved for an extension.
On August 13, 2021, two days after receiving the last
letter and more than two years after receiving the NOA outlining
Pais's past-due benefits award and the funds withheld for
attorneys' fees, Pais's attorney at long last filed a motion in
the district court requesting the § 406(b) fees. In the motion,
Pais's attorney observed that the statute does not contain a fixed
time for filing a § 406(b) petition and pointed out that the filing
was made within the 20-day deadline included in the SSA's latest
letter. In response, the agency cried foul and objected to the
motion as untimely filed. Pais's counsel then objected to the
objection and cited "clerical and logistical difficulties
(including moving office[s] and the [COVID-19] pandemic)" as
reasons for the filing delay.
Unmoved by the excuses offered by Pais's attorney, the
district court denied the fee request as untimely. In a September
23, 2021 decision, the court specifically acknowledged Pais's
attorney's argument that § 406(b) does not contain a time limit
for filing fee applications, and referenced the lack of guidance
from the First Circuit on the appropriate deadline for filing a
§ 406(b) fee petition. But after reviewing the varying approaches
- 4 - taken by our sister circuits, it concluded that such a motion must
be filed within a reasonable time of the agency's decision awarding
benefits, and that what amounts to a reasonable delay in filing
depends on the particular circumstances of each case, including
any explanation for the delay. After rejecting Pais's counsel's
explanation for the two-year gap between the NOA and his § 406(b)
petition, the court put the kibosh on the fee request. Pais's
attorney timely appealed and here we are.
II. ANALYSIS
The district court's "discretion in respect to fee
awards is extremely broad" and our review of such decisions is
highly deferential. Lipsett v. Blanco, 975 F.2d 934, 937 (1st
Cir. 1992). When reviewing an award of attorneys' fees, "the role
of an appellate court is to review for errors of law or abuse of
discretion." Furtado v. Bishop, 635 F.2d 915, 920 (1st Cir. 1980).
Therefore, we review the district court's interpretation of
§ 406(b) and subsequent adoption of the "reasonable time" standard
for errors of law, and review the district court's application of
the standard for abuse of discretion.
A. Attorneys' Fees in Social Security Cases: An Overview
We begin with a quick overview of 42 U.S.C. § 406, which
provides the statutory framework for attorneys to seek fees for
their representation of claimants in actions for past-due Social
Security benefits. "The statute deals with the administrative and
- 5 - judicial review stages discretely: § 406(a) governs fees for
representation in administrative proceedings; § 406(b) controls
fees for representation in court." Gisbrecht v. Barnhart, 535
U.S. 789, 794 (2002). For fees under § 406(a), attorneys may
petition the agency directly, and awards are based on several
factors. See 20 CFR § 404.1725(b).
In contrast, § 406(b) authorizes courts to grant fees
for work performed before them that results in a favorable outcome
for the claimant. Specifically, § 406(b)(1)(A) states: "Whenever
a court renders a judgment favorable to a claimant . . . 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[.]" The statute authorizes the SSA to
withhold 25 percent of the claimant's past-due benefits for such
fees and sets this amount as the limit a court may award.2 Id.
("[T]he Commissioner of Social Security may . . . certify the
amount of such fee for payment to such attorney out of, and not in
2 Additionally, the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412, authorizes courts to grant attorneys' fees when the government's denial of benefits is not "substantially justified." Congress has harmonized EAJA and § 406(b) fees -- "[f]ee awards may be made under both prescriptions, but the claimant's attorney must refund to the claimant the amount of the smaller fee." Gisbrecht, 535 U.S. at 796. In the instant case, the district court awarded EAJA fees totaling $3,618.15 shortly after ordering the remand to the SSA.
- 6 - addition to, the amount of such past-due benefits. In case of any
such judgment, no other fee may be payable or certified for payment
for such representation[.]").
The Supreme Court has also held that § 406(b) works in
tandem with representative fee arrangements, stating: "[Section]
406(b) does not displace contingent-fee agreements as the primary
means by which fees are set for successfully representing Social
Security benefits claimants in court. Rather, § 406(b) calls for
court review of such arrangements as an independent check, to
assure that they yield reasonable results in particular cases."3
Gisbrecht, 535 U.S. at 807.
B. The Proper Standard for § 406(b) Timeliness
With this statutory scheme in mind, we proceed to the
issue of first impression in this circuit presented by this case:
What is the appropriate timeliness standard for fee petitions
brought under § 406(b)? As discussed below, we believe that the
"reasonable time" standard applied to Federal Rule of Civil
Procedure 60(b) motions should also govern the timeliness of
§ 406(b) petitions.
3 Here, Pais's fee agreement mirrors the statute and provides that counsel may apply to the court for the maximum fees allowable under § 406(b).
- 7 - 1. The Circuit Split
To begin and as previously noted, § 406(b) does not
contain a time limit for fee requests. Federal Rule of Civil
Procedure 54(d)(2)(B)(i), however, states that "[u]nless a statute
or a court order provides otherwise, [a motion for attorneys' fees]
must . . . be filed no later than 14 days after the entry of
judgment[.]" This timeline presents a significant issue for
attorneys seeking to collect § 406(b) fees: Following a remand
from the district court, an agency's determination will rarely, if
ever, be completed within 14 days. Pais's attorney emphasizes
this point, highlighting the unworkability of a 14-day deadline
for district court fees contingent upon agency determinations made
on an entirely separate timeline. He urges us then to eschew this
rule in favor of the flexibility afforded by the "reasonable time"
standard applied to motions filed under Rule 60(b)(6).4 For its
part, the SSA has taken an agnostic stance on this issue and
declined to suggest a specific rule for this court to adopt. As
the SSA sees it, the fee petition here was untimely regardless of
the standard applied.
4 Under Rule 60(b)(6), a party may move for relief "from a final judgment, order, or proceeding" for "any other reason that justifies relief." Federal Rule of Civil Procedure 60(c) states that "[a] motion under Rule 60(b) must be made within a reasonable time" -- placing a one-year outer bound on reasonableness for certain motions made under the Rule (Rule 60(b)(1-3)), but not others (Rule 60(b)(4-6)).
- 8 - The minority of our sister circuits to address this
question have adopted the "reasonable time" standard. In McGraw
v. Barnhart, the Tenth Circuit followed this course, ruling that
"[a] motion for an award of fees under § 406(b)(1) should be filed
within a reasonable time of the Commissioner's decision awarding
benefits." 450 F.3d 493, 505 (10th Cir. 2006). Highlighting Rule
60(b) as the "grand reservoir of equitable power to do justice in
a particular case," the circuit court held that substantial justice
would be served by allowing counsel to seek § 406(b) fees under
that Rule's authority. Id. (quoting Pelican Prod. Corp. v. Marino,
893 F.2d 1143, 1147 (10th Cir. 1990)). In so ruling, the Tenth
Circuit's approach stands in contrast with every other circuit
that has considered this question since the Federal Rules were
amended to include Rule 54(d)(2)'s 14-day deadline.5
Turning to the other circuits (the Second, Third, Fifth,
and Eleventh Circuits) that have mulled the timely filing
conundrum, they have chosen to apply Rule 54(d)(2)'s more rigid
14-day deadline to § 406(b) petitions. See Sinkler v. Berryhill,
932 F.3d 83, 87 (2d Cir. 2019); Walker v. Astrue, 593 F.3d 274,
276 (3d Cir. 2010); Pierce v. Barnhart, 440 F.3d 657, 663 (5th
5In Smith v. Bowen, 815 F.2d 1152, 1156 (7th Cir. 1987), which the district court in the instant case cited in support of adopting the standard, the Seventh Circuit also applied a "reasonable time" standard to § 406(b) petitions. However, this was prior to the 1993 amendment of Rule 54, which established the 14-day deadline.
- 9 - Cir. 2006); Bergen v. Taylor, 454 F.3d 1273, 1277 (11th Cir. 2006).
And they have done so despite the deadline's imperfect fit with
the timing of SSA determinations made following a district court
remand. These courts have ranged in their approach to grappling
with the disconnect between the timelines of the district court
and the SSA. The Second and Third Circuits have relied on
equitable tolling to harmonize the process -- pushing forward the
triggering event for Rule 54(d)(2)'s timeline from the date of the
district court's remand to the date of the agency's subsequent
determination (as marked by the issuance of an NOA). Sinkler, 932
F.3d at 87-88; Walker, 593 F.3d at 280. The Second Circuit, along
with the Fifth and Eleventh Circuits, has also highlighted the
discretionary power of the district court to set alternative
deadlines as justice requires. Sinkler, 932 F.3d at 89; Pierce,
440 F.3d at 664; Bergen, 454 F.3d at 1278 n.2.
2. The Use of Rule 60(b)(6)
We are inclined to agree with the Tenth Circuit's
reasoning on this issue, and therefore adopt Rule 60(b)(6)'s
reasonable time standard for determining the timeliness of § 406(b)
petitions made in this circuit. Rule 60(b) empowers courts to
relieve a party from a final judgment on various grounds, including
"any other reason justifying relief." Fed. R. Civ. P. 60(b)(6).
Like the Tenth Circuit, we have referred to Rule 60(b)(6) as a
district court's "residual reservoir of equitable power to grant
- 10 - discretionary relief" -- allowing it "to relieve a party from a
final judgment where such relief is appropriate to accomplish
justice[.]" Paul Revere Variable Annuity Ins. Co. v. Zang, 248
F.3d 1, 5 (1st Cir. 2001).
In scanning the out-of-circuit precedent, we have
observed that in practice, accomplishing justice in most § 406(b)
cases seems to inevitably require some exercise of the district
court's discretion and powers in equity. Some of the circuits
that have adopted the Rule 54(d)(2) deadline have effectively
conceded as much, by tolling the Rule's triggering event to the
date of the agency's NOA. As the Tenth Circuit pointed out in
McGraw, this approach seems "contrary to the plain language of
[Rule 54(d)(2)], which states that the motion must be filed no
later than 14 days after entry of judgment. It appears that the
term 'judgment' refers to the judgment of the district court."
McGraw, 450 F.3d at 504 (citations and quotations omitted); see
Melkonyan v. Sullivan, 501 U.S. 89, 96 (1991) ("Congress' use of
'judgment' in [a fee-shifting statute] refers to judgments entered
by a court of law, and does not encompass decisions rendered by an
administrative agency."). Other solutions proposed by the
circuits, such as urging district courts to set alternative
- 11 - deadlines as necessary, no less involve the use of the court's
discretion to set aside Rule 54(d)(2)'s suggested timeline.6
Additionally, we find the concerns raised by our sister
courts that have rejected the use of Rule 60(b) here to be
unpersuasive. In rejecting this analytical pathway, both the
Second and Third Circuits have cautioned that there is "little
support" in law for the Rule 60(b) approach -- even arguing that
this pathway appears to "conflict in principle with Supreme Court
jurisprudence that instructs that a post-judgment motion for
attorney fees is not properly asserted as a motion to amend or
alter judgment." Sinkler, 932 F.3d at 87 (quoting Walker, 593
F.3d at 279).
We read the relevant jurisprudence that they cite to --
White v. N. H. Dep't of Emp. Sec., 455 U.S. 445 (1982) --
differently. In White, the Court emphasized the nature of
attorneys' fees requested under 42 U.S.C. § 1988 as separate from
and collateral to the relevant judgment by a court. In support,
the Court quoted a prior observation by the Fifth Circuit that
"[a] motion for attorney's fees is unlike a motion to alter or
amend a judgment. It does not imply a change in the judgment, but
merely seeks what is due because of the judgment." Id., 455 U.S.
6 Which the Rule allows for. See Fed. R. Civ. P. 54(d)(2)(B)(i) ("Unless a statute or a court order provides otherwise, the motion must: (i) be filed no later than 14 days after the entry of judgment . . . ." (emphasis added)).
- 12 - at 452 (quoting Knighton v. Watkins, 616 F.2d 795, 797 (5th Cir.
1980)).
We believe that this conception of attorneys' fees does
not apply to the plain language and statutory design of § 406(b).
Unlike some of the other federal statutes that allow for attorneys'
fees based on a court's discretion, § 406(b) implies that the fees
are awarded as a part of a district court's judgment for the
claimant, rather than as a separate judgment allowing the party to
recuperate costs underlying the action. Compare 42 U.S.C.
§ 406(b)(1)(A) ("[T]he court may determine and allow as part of
its judgment a reasonable fee for such representation . . . ."
(emphasis added)) with 42 U.S.C. § 1988 ("[T]he court, in its
discretion, may allow the prevailing party . . . a reasonable
attorney's fee as part of the costs . . . .") and 28 U.S.C. § 2412
("[A] court may award reasonable fees and expenses of attorneys,
in addition to the costs which may be awarded pursuant to
subsection (a) [which authorizes courts to award a judgment for
other costs incurred in the litigation] . . . ."). The Supreme
Court implied a similar distinction in Gibsbrecht, stating that
"[f]ees shifted to the losing party . . . are not at issue" in §
406(b) petitions. 535 U.S. at 802. Unlike fee-shifting statutes
like 42 U.S.C. § 1988 and 28 U.S.C. § 2412, the Court noted,
"[s]ection 406(b) is of another genre: It authorizes fees payable
from the successful party's recovery." Id.
- 13 - Indeed, given that § 406(b) provides for the fees to be
collected directly from a claimant's subsequently awarded past-
due benefits, it seems sensible to understand the fees as a
conditional part of the court's judgment. The statute states that,
should a claimant be successful before the agency on remand, the
agency may withhold a portion of the past-due benefits for
attorneys' fees in case they are awarded by the court. 42 U.S.C.
§ 406(b)(1)(A) ("[T]he 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."). In such cases, we see no reason why it would be
inappropriate for a district court to, based on the discretion
formalized in Rule 60(b)(6), amend the judgment in order to award
§ 406(b) fees. Unlike the fee petitions contemplated by the
Supreme Court in White, § 406(b) motions do not "merely seek[]
what is due because of the judgment" -- the fees are not due
because of the district court's judgment ordering a remand. See
White, 455 U.S. at 452. Rather, such a motion "impl[ies] a change
in the judgment." See id. Now that the condition of success
before the agency on remand has been met, the district court may
amend its judgment to award fees.
Admittedly, we have historically set a high bar for Rule
60(b)(6) motions, reasoning that "'[t]here must be an end to
litigation someday,' and therefore district courts must weigh the
- 14 - reasons advanced for reopening the judgment against the desire to
achieve finality in litigation." Paul Revere Variable Annuity
Ins. Co., 248 F.3d at 5-6 (quoting Ackermann v. United States, 340
U.S. 193, 198 (1950)) (alteration in original). However, unlike
most cases where a final judgment is disturbed, here it is clear
to all parties that, in the event of success before the agency on
remand, a subsequent amendment to the district court's judgment to
award attorneys' fees is highly likely. Indeed, given that a
successful claimant may not receive their full past-due benefits
until the question of attorneys' fees is resolved, here it seems
necessary for a court to in essence reopen the judgment (or
definitively decline to do so, by denying a § 406(b) petition) in
order to achieve finality for all parties in the matter.7
Therefore, we see no reason to fashion a unique rule to
direct our district courts, given that Rule 60(b)(6) provides a
clear enough guidepost for them. Accordingly, we hold that the
district court applied the correct rule, Rule 60(b)'s "reasonable
time" standard, when assessing the timeliness of Pais's attorney's
§ 406(b) fee petition. Under this standard, district courts must
determine whether any delay was reasonable based on the particular
7 While the "matter" extends beyond the underlying suit between a claimant and the SSA (and now mainly concerns the claimant and their counsel), the SSA remains tied to the litigation based on its role in withholding and ultimately certifying any fees to be paid out to the attorney.
- 15 - circumstances of each case, including any explanation for whatever
delay may be at issue.8 Once the NOA is issued, the principal
basis for withholding a request for fees will usually disappear.
Because the delay here was unreasonable by any measure, today we
need not decide the outer bounds of what constitutes a reasonable
delay.9
Further, we agree with the district court that the
"triggering event" from which reasonability should be assessed is
the issuance of the NOA, not the court's judgment ordering the
underlying remand. The availability of § 406(b) fees is premised
on the SSA's subsequent determination of past-due benefits, which
is established by the NOA. Accordingly, when determining the
timeliness of a § 406(b) petition, courts should assess whether a
reasonable time has elapsed since it was issued by the agency.
8 Naturally, these circumstances will also include the local rules of the district where the petition was filed. Currently, the District of Maine is the only court within this circuit to have an applicable rule. See Me. Loc. R. 54.2 ("[A]ny application for fees under 42 U.S.C. §[]406(b) . . . shall be filed within 30 days of the date of [the NOA].") 9 Unlike Pais's counsel, we do not understand the district court to have applied a one-year per se time limit on reasonableness. Because this standard is based on Rule 60(b)(6), which is not subject to that outside limit, we also decline to do so. See Fed. R. Civ. P. 60(c)(1) ("A motion under Rule 60(b) must be made within a reasonable time--and for reasons (1), (2), and (3) no more than a year after the entry of the judgment . . . .").
- 16 - C. The District Court's Holding
With that threshold question out of the way, we turn to
the district court's application of the "reasonable time" standard
in this case and review it for an abuse of discretion. See Ramos
v. Barnhart, 103 F. App'x 677, 678 (1st Cir. 2004).
We conclude that the district court did not abuse its
discretion in denying the petition. Simply put, we are hard
pressed to understand how a 26-month gap between the SSA's issuance
of Pais's NOA and his attorney's § 406(b) petition could possibly
be considered reasonable -- especially given that Pais's attorney
failed to provide any meaningful explanation for the delay.
Counsel counters that his timing was reasonable in light of the
multiple notices sent by the SSA after the NOA, each of which
included a new 20-day deadline for filing a petition and indicated
that the SSA was still withholding the funds.
While we appreciate the confusion that these notices may
have caused, they are immaterial. As the Supreme Court has noted,
"the Commissioner of Social Security . . . has no direct financial
stake in the answer to the § 406(b) question; instead, she plays
a part in the fee determination resembling that of a trustee for
the claimants." Gisbrecht, 535 U.S. at 798 n.6. This role
underscores the limited authority of the SSA here -- § 406(b)
awards are made at the discretion of the court, and the SSA does
not have the authority to acquiesce to delays or extend the court's
- 17 - timeline for accepting such petitions. For a district court, the
sole question for assessing timeliness is whether counsel filed
his § 406(b) petition within a "reasonable time," separate and
apart from any agency actions taken after issuing the NOA that did
not affect the claimant's past-due benefits.
Here, the NOA contained all the necessary information
that counsel needed to file a petition for attorneys' fees. Given
that Pais's attorney failed to file his § 406(b) petition in a
timely manner, the district court did not err in denying the
eventual submission.10 Like the court, because we consider the fee
petition untimely, we need not address the reasonableness of the
amount requested.
III. CONCLUSION
Summing up, for the reasons stated above, we hold that
Rule 60(b)'s "reasonable time" standard, measured from the SSA's
issuance of an NOA, should govern the timeliness of attorneys' fee
petitions submitted under § 406(b). Accordingly, we hold that the
10 We also find Pais's attorney's theory of detrimental reliance to be unpersuasive. The doctrine allows a party to be estopped from advancing an argument if the opposing party can show "that it relied on its adversary's conduct in such a manner as to change [its] position for the worse." Mimiya Hosp., Inc. SNF v. U.S. Dep't Of Health And Hum. Servs., 331 F.3d 178, 182 (1st Cir. 2003) (quoting Heckler v. Cmty. Health Servs., 467 U.S. 51, 59 (1984)) (alteration in original). Pais's attorney does not, and cannot, demonstrate how his reliance on the SSA's subsequent notices changed his position from one of filing in a timely manner to one of filing after unreasonable delay.
- 18 - district court did not abuse its discretion when applying the
standard, and therefore affirm.
- 19 -