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Nature of Suit Code: 864
Nature of Suit: Social Security - SSID Title XVI
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

GAIL C. CLARK, 

Plaintiff-Appellant, No. 07-35056

v. D.C. No. 

M CV-04-05237-FDB ICHAEL J. ASTRUE, COMMISSIONER,

SOCIAL SECURITY ADMINISTRATION, OPINION

Defendant-Appellee. 

Appeal from the United States District Court

for the Western District of Washington

Franklin D. Burgess, District Judge, Presiding

Submitted April 11, 2008*

Seattle, Washington

Filed June 25, 2008

Before: Carlos T. Bea and Milan D. Smith, Jr.,

Circuit Judges, and Joseph M. Hood,**

Senior District Judge.

Opinion by Judge Bea

*The panel unanimously finds this case suitable for decision without

oral argument. See Fed. R. App. P.34(a)(2). 

**The Honorable Joseph M. Hood, Senior United States District Judge

for the Eastern District of Kentucky, sitting by designation. 

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COUNSEL

Ralph Wilborn, Ralph Wilborn and Etta L. Wilborn, P.C.,

West Linn, Oregon; Elie Halpern, Halpern & Oliver, PLLC,

Olympia, Washington, for the plaintiff-appellant.

Jeffrey C. Sullivan, United States Attorney; Brian C. Kipnis,

Assistant United States Attorney; David Morado, Regional

Chief Counsel, David M. Blume, Assistant Regional Counsel,

Social Security Administration Office of General Counsel,

Seattle, Washington, for the defendant-appellee. 

OPINION

BEA, Circuit Judge:

Social Security claimant Gail Clark appeals the district

court’s order denying, in part, her attorney’s request for attorney’s fees pursuant to 42 U.S.C. § 406(b). In its decision, the

district court concluded § 406(b) limits the combined amount

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of attorney’s fees that can be awarded under both § 406(a)

(which governs the award of attorney’s fees for representation

before the Social Security Administration) and § 406(b)

(which governs the award of attorney’s fees for representation

of Social Security claimants in federal district court) to 25%

of the claimant’s past-due benefits. Because the plain text of

§ 406(b) limits only the amount of attorney’s fees awarded

under § 406(b)—not the combined fees awarded under both

§ 406(a) and § 406(b)—we reverse the district court’s award

of attorney’s fees and remand for reconsideration in accordance with this opinion.

I. Facts and Procedural History

On April 20, 1999, Clark filed an application for disability

insurance benefits with the Social Security Administration

(“the Administration”), pursuant to 42 U.S.C. §§ 401-34,

alleging she was disabled due to depression, back weakness,

fatigue, aches in her hips and knees, and chronic inflammation. After three hearings before the Administration and two

appeals to federal district court, an Administrative Law Judge

(“ALJ”) issued a decision on March 8, 2006, finding Clark

had been disabled since July 15, 1997, and was entitled to disability benefits starting on that date. On May 29, 2006, the

Administration issued a Notice of Awards to Clark, informing

her that her past-due benefits totaled $72,068. 

Throughout her three hearings before the Administration,

Clark was represented by attorney Ann Cook. Pursuant to a

written agreement, Clark agreed to pay Ms. Cook the lesser

of $5,300 or twenty-five percent (25%) of past-due disability

benefits awarded to Clark. On March 8, 2006, the ALJ in

Clark’s final administrative hearing approved the agreement,

pursuant to 42 U.S.C. § 406(a). On May 9, 2006, the Administration paid $5,300 to Ms. Cook out of Clark’s past-due disability benefits. 

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Attorney Elie Halpern represented Clark during her two

appeals to federal district court. Pursuant to a written fee

agreement, Clark agreed to pay Mr. Halpern a fee equal to

twenty-five percent (25%) of past-due benefits awarded to

Clark. On November 1, 2006, Mr. Halpern filed a motion in

district court seeking approval for the payment of attorney’s

fees under the fee agreement, as required by 42 U.S.C.

§ 406(b). The district court granted Mr. Halpern’s request

only in part. Relying on cases from the Fourth and Fifth Circuits,1

the district court concluded § 406(b) limits the combined

amount of attorney’s fees awarded under both § 406(a) and

§ 406(b). Accordingly, the district court deducted $5,300—

the amount previously awarded by the Administration to Ms.

Cook under § 406(a) for her representation of Clark in Clark’s

administrative hearings—from the amount payable to Mr.

Halpern. On December 11, 2006, the district court entered a

judgment and order awarding Mr. Halpern attorney’s fees

under § 406(b) in the net amount of $6,658.32.2 Clark timely

appealed. 

II. Standard of Review

We review the amount of attorney’s fees awarded by the

district court pursuant to 42 U.S.C. § 406(b) for abuse of discretion. Allen v. Shalala, 48 F.3d 456, 457 (9th Cir. 1995),

abrogated on other grounds by Gisbrecht v. Barnhart, 535

U.S. 789 (2002). The district court abuses its discretion if it

does not apply the correct legal standard or rests its decision

1Morris v. Soc. Sec. Admin., 689 F.2d 495 (4th Cir. 1982); Dawson v.

Finch, 425 F.2d 1192 (5th Cir. 1970). 

2The district court arrived at this figure as follows: $18,017 (25% of

Clark’s past-due benefits) minus $5,300 (amount awarded to Ms. Cook

under § 406(a)) minus $6,058.68 (amount previously awarded to Mr. Halpern under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412,

for his representation of Clark in this matter). The district court’s

$6,058.68 deduction for the prior EAJA award is not at issue in this

appeal.

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on a clearly erroneous finding of fact. Id. Interpretation of a

statute is a question of law we review de novo. Id.

III. Analysis

A. Statutory Framework

Title II of the Social Security Act, 42 U.S.C. § 401 et seq.,

governs the award and collection of fees by attorneys representing claimants seeking old-age, survivor, or disability

insurance benefits. 42 U.S.C. § 406(a) governs the award and

collection of attorney’s fees for the representation of Social

Security claimants in proceedings before the Administration.

42 U.S.C. § 406(b) governs the award and collection of fees

by attorneys for the representation of claimants in court. 

1. 42 U.S.C. § 406(a)

42 U.S.C. § 406(a) provides two methods by which a

Social Security claimant’s attorney may obtain fees for the

representation of the claimant before the Administration: the

“fee petition process” and the “fee agreement process.” 

The “fee petition process” is governed by § 406(a)(1).

When the Administration makes a determination favorable to

the claimant, § 406(a)(1) authorizes the Administration to “fix

. . . a reasonable fee to compensate [the claimant’s] attorney

for the services performed by him in connection with such

claim.” 42 U.S.C. § 406(a)(1). Other than the requirement that

fees be “reasonable,” neither § 406(a)(1) nor the governing

regulations limit the amount that can be awarded under the fee

petition process. Under 20 C.F.R. § 404.1725(b)(2), the

Administration “may authorize a fee even if no benefits are

payable.” 

The “fee agreement process” is governed by § 406(a)(2).

Under this process, the attorney and the claimant must enter

into a written fee agreement and submit it to the AdministraCLARK v. ASTRUE 7415

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tion before the Administration issues a determination of the

claimant’s benefits. 42 U.S.C. § 406(a)(2)(A). If the Administration issues a determination favorable to the claimant, the

Administration “shall approve” the fee agreement at the time

of the determination, provided the fee does not exceed the

lesser of 25% of the claimant’s past-due benefits or $5,300.3

Id. 

Here, Ms. Cook was awarded $5,300 for her representation

of Clark during Clark’s administrative hearings, pursuant to

the “fee agreement process” outlined in § 406(a)(2). 

2. 42 U.S.C. § 406(b)

42 U.S.C. § 406(b) governs the fees an attorney may charge

a Social Security claimant for representation in court: 

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. . . .

42 U.S.C. § 406(b)(1)(A). 

B. Circuit Split

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

3Pursuant to 42 U.S.C. § 406(a)(2)(A)(iii), the Commissioner of the

Social Security Administration increased the original $4,000 statutory

limit to $5,300, effective February 1, 2002. See Maximum Dollar Limit in

the Fee Agreement Process, 67 Fed. Reg. 2477 (Jan. 17, 2002). 

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§ 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). 

C. The Statutory Text

Section 406(a) grants the Social Security Administration

exclusive jurisdiction to award attorney’s fees for representation of a Social Security claimant in proceedings before the

Administration. Similarly, § 406(b) grants federal courts

exclusive jurisdiction to award attorney’s fees for representation of the claimant in court. See MacDonald v. Weinberger,

512 F.2d 144, 146 (9th Cir. 1975).4

4

“Under 42 U.S.C. § 406(b)(1), a District Court may award a reasonable

fee to an attorney for representing a Social Security claimant before the

court. The court has no authority to award an attorney’s fee for representation of a claimant before the Secretary, that power being granted by 42

U.S.C. § 406(a) to the Secretary alone.” 

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This exclusive grant of jurisdiction is mandated by the text

of § 406(b), which states:

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. . . . 

42 U.S.C. § 406(b)(1) (emphases added). The statute authorizes the court to award a reasonable fee “for such representation.” The phrase “such representation” refers to

representation “before the court.” Thus, § 406(b) empowers

courts to award attorney’s fees based only on representation

before the court. 

[1] Just as § 406(b) grants the district court authority to

award attorney’s fees only for representation before the court,

not before the Administration, Weinberger, 512 F.2d at 146,

§ 406(b) imposes a statutory limit on the award of attorney’s

fees only for representation before the court, not before the

Administration. Nowhere does § 406(b) purport to impose a

limit on the combined attorney’s fees awarded under both

§ 406(a) and § 406(b). To the contrary, the statute limits only

the award of attorney’s fees for “such representation”—i.e.,

representation before the court—to 25% of past-due benefits.

Attorney’s fees awards for representation before the Administration are governed by the separate provisions of § 406(a). 

[2] Moreover, as discussed supra in Section III.A.1,

§ 406(a)(1) authorizes the Administration to award attorney’s

fees (under the “fee petition process”) in any amount—

including amounts greater than 25% of past-due benefits—so

long as the fees are “reasonable.” If a fee award under

§ 406(a) can be greater than 25% of past-due benefits, it follows that the combined amount of fees awarded under both

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§ 406(a) and § 406(b) must be capable of exceeding 25% of

past-due benefits. Thus, the district court’s conclusion (and

the Administration’s contention on appeal)—that the combined amount of attorney’s fees awarded under § 406(a) and

§ 406(b) cannot exceed 25% of past-due benefits—is fundamentally in conflict with the express provisions not only of

§ 406(b), but also of § 406(a). 

[3] Our interpretation of § 406(b) also accords with the

Commissioner of Social Security’s Hearings, Appeals, and

Litigation Manual (“HALLEX”), which states, in relevant

part:

Section 206(b)(1) [42 U.S.C. § 406(b)(1)] . . . of the

Act authorizes a Federal court, which renders a title

II and/or, after February 27, 2005, a title XVI judgment favorable to the claimant who was represented

before the court by an attorney, to authorize a reasonable fee for such representation. The attorney’s

fee may not exceed 25 percent of title II and/or title

XVI past-due benefits. This fee is in addition to the

fee, if any, the Social Security Administration (SSA)

authorizes for proceedings at the administrative

level. . . . 

HALLEX I-1-2-71 (emphasis added). 

We have previously held that HALLEX is strictly an internal Agency manual, with no binding legal effect on the

Administration or this court. Moore v. Apfel, 216 F.3d 864,

868-69 (9th Cir. 2000). Nevertheless, as an Agency manual,

HALLEX is “entitled to respect” under Skidmore v. Swift &

Co., 323 U.S. 134 (1944), to the extent that it has the “power

to persuade.” See Christensen v. Harris County, 529 U.S. 576,

587 (2000). For the reasons discussed supra, we are persuaded by the interpretation of § 406(b) put forth in HALLEX

—i.e., that an award of attorney’s fees under § 406(b) is sepaCLARK v. ASTRUE 7419

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rate from, and in addition to, any fees awarded by the Administration under § 406(a). 

D. Legislative History

[4] Because the statutory text of § 406(b) is clear, we need

not delve into legislative history to make our decision. See

Rubin v. United States, 449 U.S. 424, 430 (1981) (“When we

find the terms of a statute unambiguous, judicial inquiry is

complete, except in rare and exceptional circumstances.”)

(citation and internal quotation marks omitted). Further, we

find unconvincing the legislative history upon which the

Fourth and Fifth Circuits relied in holding § 406(b) limits the

combined total of attorney’s fees awarded under both § 406(a)

and § 406(b) to 25% of past-due benefits. 

In Dawson v. Finch, the Fifth Circuit noted that the 1965

amendment adding § 406(b) to the Social Security Act was

enacted, in part, to prohibit attorneys from charging Social

Security claimants inordinately large fees:

“Another problem that has arisen is that attorneys

have on occasion charged what appeared to be inordinately large fees for representing claimants in Federal district court actions arising under the social

security program. Usually, these inordinately large

fees result from a contingent fee arrangement under

which the attorney is entitled to a percentage (frequently one-third to one-half of the accrued benefits).” 

Dawson, 425 F.2d at 1194 (quoting Hearing on H.R. 6675

Before the S. Comm. on Fin., 89th Cong., 1st Sess. 513 (1965)

(supplemental report submitted by the Dep’t of Health, Educ.,

and Welfare)). Based largely on this expression of congressional intent, the Fifth Circuit concluded in Dawson: “We are

fully convinced that 42 U.S.C.A. 406 precludes the aggregate

allowance of attorney’s fees [under § 406(a) and § 406(b)]

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greater than twenty-five percent of the past due benefits

received by the claimant.” Id. at 1195. 

The Fifth Circuit’s conclusion, however, is not supported

by the legislative history upon which the court relied. In the

testimony quoted above, the Department of Health, Education, and Welfare expressed its disapproval of inordinately

large fees for representation “of claimants in Federal district

court actions[.]” Id. at 1194 (emphasis added). Accordingly,

Congress passed § 406(b), which imposed a limit on attorney’s fees for representation “before the court.” 42 U.S.C.

§ 406(b). Nowhere did Congress (or even a congressional

committee) express a desire to limit the aggregate fees

awarded both for representation of a claimant in court and for

representation of the claimant before the Administration. 

In Morris v. Social Security Administration, 689 F.2d 495

(4th Cir. 1982), the Fourth Circuit also relied on the legislative history quoted above in holding that 42 U.S.C. § 406 prohibits a combined award of fees, for representation before

both the Administration and before the court, in excess of

25% of the claimant’s past-due benefits. In an attempt to bolster its legislative history-based analysis, the Fourth Circuit in

Morris also analyzed Congress’s 1968 amendment to 42

U.S.C. § 406(a).5 The court interpreted the amendment as pro5The 1968 amendment added the following paragraph to 42 U.S.C.

§ 406(a): 

Whenever the Secretary, in any claim before him for benefits

under this title, makes a determination favorable to the claimant,

he shall, if the claimant was represented by an attorney in connection with such claim, fix (in accordance with the regulations

prescribed pursuant to the preceding sentence) a reasonable fee

to compensate such attorney for the services performed by him

in connection with such claim. If as a result of such determination, such claimant is entitled to past-due benefits under this title,

the Secretary shall, notwithstanding section 205(i), certify for

payment (out of such past-due benefits) to such attorney an

amount equal to whichever of the following is the smaller: (A) 25

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hibiting the Secretary of the Social Security Administration

from authorizing an award of attorney’s fees under § 406(a)

(for representation of a claimant before the Administration) in

excess of 25% of past-due benefits: “[A]fter the 1968 amendment, neither the Secretary nor the district court was authorized to approve an attorney’s fee in excess of twenty-five

percent of the successful claimant’s past-due benefits.” Morris, 689 F.2d at 497. Based on this interpretation of the

amendment, the court further reasoned the “obvious intent of

Congress” was to limit the total fees that could be awarded

under § 406(a) and § 406(b) to 25% of past-due benefits. Id.

at 498. 

The 1968 amendment, however, did not prohibit the

Administration from authorizing attorney’s fees under

§ 406(a) in excess of twenty-five percent of past-due benefits.

Instead, the amendment added a new provision that allowed

some or all of an attorney’s fees to be paid directly to the

attorney from the claimant’s past-due benefits. This provision,

which governs only the logistics of an attorney receiving payment for his services, was added “to encourage effective legal

representation of claimants by insuring lawyers that they will

receive reasonable fees directly through certification by the

Secretary.” Dawson, 425 F.2d at 1195. The amended provision does not limit the total amount of attorney’s fees the

Administration may authorize under § 406(a):

Under 406(a), the Secretary first makes a determination of a “reasonable” fee to compensate the attorney. In addition to this, the Secretary is required to

per centum of the total amount of such past-due benefits, (B) the

amount of the attorney’s fee so fixed, or (C) the amount agreed

upon between the claimant and such attorney as the fee for such

attorney’s services.

Soc. Sec. Amendments of 1967, Pub. L. 90-248, tit. I, § 173, 81 Stat. 821,

877 (1968) (emphasis added). 

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withhold up to 25% of the total amount of past-due

benefits and pay that amount directly to the attorney.

The two calculations are independent of one another.

The attorney is free to then attempt to collect the difference between the 25% paid directly to him and

the “reasonable” amount authorized by the Secretary.6

Guadamuz v. Bowen, 859 F.2d 762, 769 n.11 (9th Cir. 1988).

The correct interpretation of the 1968 amendment—i.e., the

amendment left untouched the Administration’s authority to

award attorney’s fees under § 406(a)(1) in excess of 25% of

past-due benefits—does not support the Fourth Circuit’s holding in Morris; it instead supports the holding we make today.

While amending § 406(a), Congress chose not to impose a

categorical ceiling on the Administration’s authority to award

attorney’s fees for representation before the Administration.

As discussed supra in Section III.C, if a fee award under

§ 406(a) can be greater than 25% of past-due benefits, it follows that the combined amount of fees awarded under both

§ 406(a) and § 406(b) must be capable of exceeding 25% of

past-due benefits.

IV. Conclusion

[5] We hold that the plain text of 42 U.S.C. § 406(b) limits

only the amount of attorney’s fees awarded under § 406(b),

6The payment certification process for attorneys representing claimants

before the Administration (which has been modified slightly since it was

added to the Social Security Act in the 1968 amendment) is currently governed by 42 U.S.C. § 406(a)(4). Under § 406(a)(4), if a claimant represented by an attorney is entitled to past-due benefits, the Administration

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. . . . 

42 U.S.C. § 406(a)(4). 

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not the combined fees awarded under § 406(a) and § 406(b),

to 25% of the claimant’s past-due benefits. Accordingly, we

reverse the district court’s award of attorney’s fees and

remand for a renewed exercise of the district court’s discretion in accordance with this opinion. 

REVERSED AND REMANDED.

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