Carpenter v. Principi

Victor Weatherspoon was a veteran with bipolar affective disorder and schizophrenia whose claim for a service-connected disability was first denied by the Department of Veterans Affairs (VA) (defendant) in 1981. In 1993, Weatherspoon sought to reopen his disability claim and retained an attorney, Kenneth Carpenter (plaintiff) to represent him in the matter. Weatherspoon and Carpenter agreed to a 30 percent contingency fee to be paid to Carpenter from any past-due benefits that Weatherspoon might be awarded in the case. Weatherspoon eventually did receive a service-connected-disability award from the VA, effective from 1993, but Weatherspoon alleged that it should have been effect from his original claim in 1981. After various legal proceedings, Weatherspoon prevailed in an appeal before the United States Court of Appeals for Veterans Claims, which established that the VA must grant an earlier effective date. As part of this decision, the court granted Weatherspoon approximately $2,400 in attorney’s fees and expenses under the Equal Access to Justice Act (EAJA), which Weatherspoon paid to Carpenter. When the case was remanded to the VA for a final determination of the matter, Weatherspoon was awarded approximately $206,000 in past-due benefits. Carpenter billed Weatherspoon for 30 percent of this amount under the contingency-fee agreement and retained the EAJA award as well. The Board of Veterans’ Appeals (the board) reviewed these fees for reasonableness. The board found that Carpenter’s contingency fees were excessive and unreasonable and that Carpenter was not entitled to both a contingency fee and the EAJA fees. The board reduced the contingency fee to 20 percent and ordered Carpenter to return the EAJA fees to Weatherspoon. Carpenter appealed.