Ratliff v. Astrue

Decision Date05 September 2008
Docket NumberNo. 07-2317.,07-2317.
PartiesCatherine G. RATLIFF, Plaintiff-Appellant, v. Michael J. ASTRUE, Commissioner of Social Security, Defendant-Appellee.
CourtU.S. Court of Appeals — Eighth Circuit

James D. Leach, argued, Rapid City, SD, for appellant.

Michael E. Robinson, argued, U.S. DOJ, Washington, DC, Cheryl Schrempp Dupris, AUSA, on the brief, Pierre, SD, Wayne M. Stanley, Spec. AUSA, SSA, Denver, CO, and Deanna R. Ertl-Lombardi, Regional Chief Counsel, SSA, Denver, CO., for appellee.

Before MELLOY, GRUENDER, and SHEPHERD, Circuit Judges.

MELLOY, Circuit Judge.

Plaintiff Catherine G. Ratliff, an attorney, appeals from a district court judgment allowing the government to offset an award of attorney's fees under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(b), against debts her clients owe the federal government. Based on controlling Eighth Circuit precedent, we conclude that attorneys' fees awarded under the EAJA are awarded to the prevailing parties' attorneys, rather than to the parties themselves, and therefore cannot be used to offset the parties' debts to the government. Thus, we reverse the judgment of the district court.

I.

Ratliff successfully represented two claimants in their efforts to receive benefits from the Social Security Administration. She then moved for the award of fees and costs under the EAJA. The court granted the fees. The government reduced the fee award because of debts the claimants owed the United States government. Ratliff alleged this was an illegal seizure prohibited by the Fourth Amendment. The district court determined that because the fees were awarded to the parties, not their attorney, Ratliff lacked standing to challenge the government's offset.

II.

We review the district court's judgment de novo. Emergency Med. Servs., Inc. v. St. Paul Mercury Ins. Co., 495 F.3d 999, 1009 (8th Cir.2007) (reviewing de novo the district court's interpretation of a fee-shifting statute); Jones v. Gale, 470 F.3d 1261, 1265 (8th Cir.2006) ("We review the district court's conclusion that the plaintiffs had standing de novo.").

Based on controlling Eighth Circuit precedent, we conclude that the attorney's fees in this case are awarded to the parties' attorney. We recognize that many courts have reached the opposite conclusion. See Reeves v. Astrue, 526 F.3d 732, 733 (11th Cir.2008) (concluding in a social security EAJA case that "the statute unambiguously grants an award to the `prevailing party'" and thus "hold[ing] the award belongs, in the first instance, to the party and not the party's attorney"); Manning v. Astrue, 510 F.3d 1246, 1249-50 (10th Cir.2007) (holding that under the plain language of the EAJA, the government can offset attorney's fees by the social-security claimant's debt); FDL Techs., Inc. v. United States, 967 F.2d 1578, 1580 (Fed.Cir.1992) (noting the EAJA provides fees are awarded "to a prevailing party, not the prevailing party's attorney," and "[t]hus, under the language of the statute, the prevailing party, and not its attorney, is entitled to receive the fee award"); Panola Land Buying Ass'n v. Clark, 844 F.2d 1506, 1510 (11th Cir.1988) (noting in an EAJA case that "[i]n employing the `prevailing party' language, Congress recognized that throughout our history litigation costs generally have been awarded to the prevailing party"). Were we deciding this case in the first instance, we may well agree with our sister circuits and be persuaded by a literal interpretation of the EAJA, providing that "a court may award reasonable fees and expenses of attorneys ... to the prevailing party." 28 U.S.C. § 2412(b) (emphasis added).

However, case law from this circuit compels a contrary conclusion. In Curtis v. City of Des Moines, 995 F.2d 125, 129 (8th Cir.1993), we held that EAJA attorneys are entitled to fees awards; thus, the fees could not be recovered by a third-party judgment creditor of the plaintiff. This also holds true if the judgment creditor is the government. United States v. McPeck, 910 F.2d 509, 514 (8th Cir.1990). In McPeck, we remanded and directed the bankruptcy court to "determine whether attorneys' fees can be awarded" under the Internal Revenue Code and, if so, specifically directed that "the award of attorneys' fees should be assessed affirmatively against the [government], and not as an offset against its tax claim." Id. Applying Curtis and McPeck, we hold EAJA fee awards become the property of the prevailing party's attorney when assessed and may not be used to offset the claimant's debt. See also Marre v. United States, 117 F.3d 297, 304 (5th Cir.1997) (holding the government cannot offset attorneys' fees in an EAJA case because "the prevailing party is only nominally the person who receives the award; the real party in interest vis-á-vis attorneys' fees awarded under the statute are the attorneys themselves").

III.

Because we hold EAJA attorneys' fees are awarded to prevailing parties' attorneys, we find that Ratliff has standing to bring an independent action to collect the fees and that the government's withholding of the fee awards to cover the claimants' debts was in violation of the Fourth Amendment. We reverse the judgment of the district court and remand for proceedings consistent with this opinion.

GRUENDER, Circuit Judge, concurring.

I concur in the Court's judgment because I agree that we are bound by our prior decision in Curtis and that Curtis compels the conclusion that EAJA attorney's fees are awarded to the party's attorney. While Curtis involved the award of attorney's fees under 42 U.S.C. § 1988 and not the EAJA, see 995 F.2d at 128-29, Curtis's holding applies to this EAJA case because these "fee-shifting statutes' similar language is a strong indication that they are to be interpreted alike," Independent Federation of Flight Attendants v. Zipes, 491 U.S. 754, 758 n. 2, 109 S.Ct. 2732, 105 L.Ed.2d 639 (1989). See also Northcross v. Bd. of Educ. of Memphis City Sch., 412 U.S. 427, 428, 93 S.Ct. 2201, 37 L.Ed.2d 48 (1973) ("[S]imilarity of language ... is, of course, a strong indication that ... two [attorney's fee] statutes should be interpreted pari passu."). Furthermore, the Curtis court's conclusion that the attorneys were entitled to the fees without regard to the priority of the judgment creditor's claim necessarily means that the attorneys' fees were awarded to and belonged to the attorneys and not the party they represented. Had the fee award ever belonged to the party, the court would have been required to analyze the priority of the competing claims. Accordingly, I agree with the Court that Curtis compels the conclusion that the attorney's fees awarded pursuant to the EAJA are awarded to the attorney, not her clients.1

I write separately to emphasize that our holding today, as compelled by Curtis, is inconsistent with language in two Supreme Court opinions, the EAJA's plain language, and the holdings of most other circuit courts. In Evans v. Jeff D., the Supreme Court stated that "the language of [§ 1988], as well as its legislative history, indicates that Congress bestowed on the `prevailing party' ..." eligibility for a discretionary award of attorney's fees in specified civil rights actions. 475 U.S. 717, 730, 106 S.Ct. 1531, 89 L.Ed.2d 747 (1986). Several years later, in Venegas v. Mitchell, the Supreme Court reiterated its earlier statement, saying that it "[had] recognized that it is the party's entitlement to receive the fees in the appropriate case," 495 U.S. 82, 88, 110 S.Ct. 1679, 109 L.Ed.2d 74 (1990) (citing Evans, 475 U.S. at 730-31, 106 S.Ct. 1531), and "[had] already rejected the argument that the entitlement to a § 1988 award belongs to the attorney rather than the plaintiff," id. at 89, 110 S.Ct. 1679 (citing Evans, 475 U.S. at 731-32, 106 S.Ct. 1531). This language undermines Curtis's implicit holding that attorney's fees awarded under § 1988 are awarded to a prevailing party's attorney, as well as our conclusion today that EAJA attorney's fees are awarded to a prevailing party's attorney. See Manning, 510 F.3d at 1249-50 (citing Venegas and Evans, among other cases, in support of the proposition that the EAJA's language "clearly provides that the prevailing party, who incurred the attorney's fees, and not that party's attorney, is eligible for an award of attorney's fees").

Further, our conclusion that EAJA attorney's fees are awarded to a prevailing party's attorney also contradicts the plain language of the EAJA. In interpreting a statute we first "determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case." Robinson v. Shell Oil Co., 519 U.S. 337, 340, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997). If so, we apply the plain language of the statute. Barnhart v. Sigmon Coal Co., 534 U.S. 438, 450, 122 S.Ct. 941, 151 L.Ed.2d 908 (2002). The EAJA provides that "a court may award reasonable fees and expenses of attorneys ... to the prevailing party . . . ." 28 U.S.C. § 2412(b) (emphasis added). The EAJA clearly states that the attorney's reasonable fees and expenses are awarded directly to the prevailing party and does not authorize a court to award fees and expenses to the attorney. I recognize the policy argument that Congress created the EAJA to encourage attorneys to provide representation in certain cases where they might otherwise be unwilling and that to hold that the attorney's fees belong to the client might frustrate this purpose. See Evans, 475 U.S. at 731, 106 S.Ct. 1531 ("[W]hile it is undoubtedly true that Congress expected fee shifting to attract competent counsel to represent citizens deprived of their civil rights, it neither bestowed fee awards upon attorneys nor rendered them nonwaivable or nonnegotiable."); Curtis, 995 F.2d at 129. Nonetheless, the plain language of the EAJA awards the attorney's fees to a prevailing party, not the prevailing party...

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