Gisbrecht v. Barnhart, 535 U.S. 789, 19 (2002)

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Cite as: 535 U. S. 789 (2002)

Opinion of the Court

gain more than that fee, or to charge the claimant a noncontingent fee, is a criminal offense. 42 U. S. C. § 406(b)(2); 20 CFR § 404.1740(c)(2) (2001).

Most plausibly read, we conclude, § 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.15

Congress has provided one boundary line: Agreements are unenforceable to the extent that they provide for fees exceeding 25 percent of the past-due benefits. § 406(b)(1)(A) (1994 ed., Supp. V).16 Within the 25 percent boundary, as petitioners in this case acknowledge, the attorney for the successful claimant must show that the fee sought is reasonable for the services rendered. See Brief for Petitioners 40.17

15 The dissent observes that "fee agreements in . . . Social-Security cases are hardly negotiated; they are akin to adherence contracts." Post, at 812. Exposure to court review, plus the statute's 25 percent limitation, however, provide checks absent from arbitration adherence provisions this Court has upheld over objections that they are not "freely negotiated," see Vimar Seguros y Reaseguros, S. A. v. M/V Sky Reefer, 515 U. S. 528, 556 (1995) (Stevens, J., dissenting), but are the product of "disparate bargaining power" between the contracting parties, Carnival Cruise Lines, Inc. v. Shute, 499 U. S. 585, 598 (1991) (Stevens, J., dissenting). See also Circuit City Stores, Inc. v. Adams, 532 U. S. 105, 138-139, and n. 3 (2001) (Souter, J., dissenting) (observing that many employees "lack the bargaining power to resist an arbitration clause if their prospective employers insist on one").

16 Statement of the limitation in terms of a percent of the recovery tell-ingly contrasts with EAJA, which authorizes fee shifting and, correspondingly, places a specific dollar limit on the hourly rate that ordinarily can be charged to the losing party. 28 U. S. C. § 2412(d)(2)(A); see supra, at 796, and n. 4.

17 Specifically, petitioners maintain that "[a]lthough section 406(b) permits an attorney to base a fee application on a contingent fee agreement with the claimant, the statute does not create any presumption in favor of the agreed upon amount. To the contrary, because section 406(b) requires an affirmative judicial finding that the fee allowed is 'reasonable,' the

807

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