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Regulation Agency Forces Rewrite of Social Safety Attorneys’ Payment Guidelines

The Social Security Agency needs to change its procedures for paying legal fees in disability pension disputes to allow payments to law firms and payments for the work of lawyers who later join the government, the First Circuit noted.

The government’s request that attorney fees be paid to individual attorneys rather than law firms is arbitrary and defeats the legal mandate to pay a reasonable attorney fee for representing those with disability benefits, the U.S. First District Court of Appeals said in a July 16 opinion.

The fact that only individual attorneys can act as agents in the disability claims process does not justify a limit on payments, which ignores the “practical reality” that law firms “are usually the ultimate recipients of fees paid to employees,” it said Dish .

The court came to a similar conclusion regarding the administration’s bar association to pay legal fees for the work of attorneys who later leave their private practice to take up public service positions. The administration said the rule was necessary to meet government-wide ethical requirements that prohibit officials from being paid to represent applicants in front of the administration.

The First Circuit disagreed and called this logic “unfathomable” and “visually irrational”. The fee filings from attorneys joining the government later include the exact dates the work was done, which allows the administration to verify that attorneys’ representation ended before their government service began, the court said.

The decision is a victory for Marasco & Nesselbush LLP law firm of Rhode Island, which claims it owes approximately $ 70,000 in legal fees for working on behalf of individuals receiving Social Security disability benefits. The firm sued administrative officials under the Administrative Procedure Act, arguing that some of their “Byzantine and irrational rules” about paying legal fees were arbitrary and unenforceable.

Although the court sided with the firm on important issues, it declined to find that the contested regulations violated the requirements of the Agency for Notifications and Comments or the federal constitution.

Judge Kermit V. Lipez wrote the decision. Chief Judge Jeffrey R. Howard and Judge O. Rogeriee Thompson joined them.

Whelan Corrente & Flanders LLP represents the firm.

The case is Marasco & Nesselbush LLP v Collins, 1st Cir., No. 20-1397, 7/16/21.

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