George H. Thomason, Appellant, v. Richard Schweiker, in His Official Capacity As Secretary Ofthe Department of Health and Human Services of Thegovernment of the United States of America, and Williamdriver, in His Official Capacity As Commissioner of Thesocial Security Administration, an Agency of the Governmentof the United States of America, Appellees, 692 F.2d 333 (4th Cir. 1982)

The plaintiff, George H. Thomason, challenges the fee awarded him by an Administrative Law Judge (ALJ) for the representation of a Social Security claimant. The plaintiff seeks injunctive and declaratory relief to compel the Secretary of the Department of Health and Human Services (Secretary) to afford him a hearing for review of the attorney fee determination. The district court dismissed the complaint for lack of subject matter jurisdiction under Fed. R. Civ. P. 12(b) (1). We affirm.

The plaintiff is a licensed attorney in South Carolina, who successfully represented a claimant in obtaining Social Security disability benefits. See 42 U.S.C. § 301, et seq. The claimant had signed a contract agreeing to pay the plaintiff for costs incurred in preparing the case as well as a contingency of twenty-five percent (25%) of any back benefits awarded in return for legal services. After a final determination of disability and the amount of back benefits due the claimant, the plaintiff submitted a fee petition itemizing 35 hours of work he spent on the case and requesting twenty-five percent of back benefits, in the sum of $2,408.45. See 42 U.S.C. § 406(a) and 20 C.F.R. 404.975-.977 (1982).

The ALJ who heard the case awarded the plaintiff $1,900.00 as a "reasonable" attorney fee. The fee authorization letter included a form explaining the considerations involved in setting a fee.¹  The plaintiff sought administrative review by the Regional Chief Administrative Law Judge (see 20 C.F.R. 404.975(e)), and requested a hearing at which he could present evidence to justify a full 25% award. The Chief ALJ reviewed the fee petition and upheld the decision of the ALJ, without granting a hearing. The plaintiff responded to the final determination by the Chief ALJ by requesting that the decision be reconsidered and, again, asking for a hearing. The Chief ALJ answered that the Social Security regulations provide "for only one administrative review of a fee petition" and that his prior decision was the final action of the Secretary. The ALJ added, however, that in addition to the "reasons" given on the fee authorization form, see note 1, supra, "there were no complex legal, medical or vocational issues involved."

The plaintiff filed suit in district court challenging his fee award and the refusal of the Secretary to grant him a hearing on the reasonableness of his fee. The district court granted the government's motion to dismiss, holding that it lacked subject matter jurisdiction. The court reasoned that the case did not come within the jurisdictional requirements of Sec. 205(g)-(h) of the Social Security Act, 42 U.S.C. § 405(g)-(h) (Supp.1982), and the due process requirements of the fifth amendment had not been violated.

Appellant first seeks judicial review of his fee award. This court is without subject matter jurisdiction to make such a review. The right to bring an action for disability benefits is circumscribed by Sec. 205(g)-(h). Attorneys who represent claimants do not come within the language of Sec. 205(g). See Copaken v. Secretary of Health, Education and Welfare, 590 F.2d 729 (8th Cir. 1979). Provisions for the legal representation of claimants is found in Sec. 206 of the Act, 42 U.S.C. § 406 (1974). This section, and the related regulations of the Secretary, do not provide a right to a hearing on the reasonableness of attorney fee awards. By reading Secs. 205 and 206 in pari materia, it is evident that the setting of fees is committed to the Secretary's discretion, and judicial review of the "reasonableness" of the fee is precluded. See Robinson v. Gardner, 374 F.2d 949 (4th Cir. 1967); Chernock v. Gardner, 360 F.2d 257 (3d Cir. 1966).

That the Secretary, through the decision of the ALJ, has the sole authority to set the fee, however, does not mean that he is free to set fees arbitrarily. As we mentioned in Garcia v. Neagle, 660 F.2d 983 (4th Cir. 1981), cert. denied --- U.S. ----, 102 S. Ct. 1023, 71 L. Ed. 2d 309 (1982), "even where action is committed to absolute agency discretion by law, courts have assumed the power to review allegations that an agency exceeded its legal authority, acted unconstitutionally, or failed to follow its own regulations." Id. at 988. The appellant does not colorably claim that the fee award itself was improper on constitutional,²  statutory, or regulatory grounds. His challenge to the reasonableness of the fee, therefore, must fail.

The appellant also urges that he was denied due process, because he was not afforded an evidentiary hearing by the Secretary. The due process clause creates a flexible standard that is dependent upon the situation to which it is being applied. Morrissey v. Brewer, 408 U.S. 471, 481, 92 S. Ct. 2593, 2600, 33 L. Ed. 2d 484 (1972). The dictates of the due process clause depend upon the nature of the private interest, the adequacy of the existing procedure in protecting that interest, and the governmental interest in the efficient administration of the applicable law. Mathews v. Eldridge, 424 U.S. 319, 335, 96 S. Ct. 893, 903, 47 L. Ed. 2d 18 (1976).

The appellant's fifth amendment argument is predicated upon the appellant's property interest in the contractual fee arrangement between the attorney and client. The contract is conditioned, however, on the statutory requirement that the fee be reasonable. Also implicit in the contract is the fact that the Secretary determines the reasonableness of the fee. The private interest of the attorney, therefore, is not in the twenty-five percent fee to which the claimant agreed, but to a reasonable fee set by the ALJ which is not to exceed twenty-five percent of back benefits.

The next consideration is the propriety of the current procedure, which does not provide the attorney a separate hearing on the reasonableness of his requested fee. The purpose of the procedure is to weigh the factors established by the Social Security Administration in setting a fee award. See note 1, supra. We note that the factors of the amount of fee requested, the level of review, and the results achieved normally are undisputed at the time the attorney files his fee petition. Of the other factors, the complexity of the case may be determined by the ALJ as a matter of law, and the amount of time spent on the case clearly is evidenced by the itemization of time spent included on the attorney's fee petition.³  The remaining factors of the economic security of the claimant and dependents, the services performed, and the level of skill and competence required by the case are usually the only factors in dispute in setting a fee after the claimant has been granted benefits. We find that the ALJ who heard the case is in a superior position to decide these issues, and a further evidentiary hearing would serve no useful purpose.

In Blankenship v. Schweiker, 676 F.2d 116 (4th Cir. 1982), we denied the government's request that this court set a reasonable attorney fee, because the district court was more qualified to weigh the factors involved in that determination. For the same reasons that the district court is uniquely qualified to determine the reasonableness of fees once the claim reaches federal court, the ALJ is even more qualified to set a reasonable fee when the claimant wins at the administrative hearing level. The procedure for appeals of a Social Security disability determination allows one de novo evidentiary hearing; that is heard by the ALJ. Even when the claimant reaches federal district court, he relies basically upon the record established before the ALJ in addition to any supplemental information supplied to the Appeals Council. At the hearing before the ALJ, the efforts and abilities of the attorney may be observed on a firsthand basis. Additional evidence procured by the attorney and the lawyer's legal theory of the case readily should be apparent. The ALJ has the unique opportunity to observe personally the preparedness of the attorney in his factual and legal presentation. It is doubtful that an attorney could establish at an independent evidentiary hearing on the reasonableness of the fee award any better evidence of his skill and competence, as well as the quality and quantity of legal services performed, than he could in the actual presentation of his case to the ALJ. Mindful of the last consideration in the weighing of due process requirements, we note that the government has a substantial interest in avoiding unnecessary evidentiary hearings that would further backlog the already overcrowded dockets of the ALJs.

We hold that the district court did not have jurisdiction to review the Secretary's determination of a reasonable fee award and that the appellant has not established a due process right to an evidentiary hearing on the reasonableness of the fee. Accord Copaken v. Secretary, 590 F.2d 729 (8th Cir. 1979). The dismissal of the complaint for lack of subject matter jurisdiction, accordingly, is affirmed.

AFFIRMED.