Astrue v. Ratliff, No. 08–1322.

• Decision Date: 14 June 2010
• Docket Number: No. 08–1322.
• Parties: Michael J. ASTRUE, Commissioner of Social Security, Petitioner, v. Catherine G. RATLIFF.
• Court: U.S. Supreme Court

560 U.S. 586

130 S.Ct. 2521

177 L.Ed.2d 91

Michael J. ASTRUE, Commissioner of Social Security, Petitioner,

v.Catherine G. RATLIFF.

No. 08–1322.

Supreme Court of the United States

Argued Feb. 22, 2010.

Decided June 14, 2010.

Anthony Yang

, Washington, DC, for petitioner.

James D. Leach

, Rapid City, SD, for respondent.

Elena Kagan, Solicitor General, Counsel of Record, Department of Justice, Washington, D.C., for petitioner.

Scott L. Nelson

, Public Citizen Litigation Group, Washington, DC, Stephen S. Kinnaird, Panteha Abdollahi, Paul, Hastings, Janofsky & Walker LLP, Washington, DC, James D. Leach, Counsel of Record, Rapid City, SD, Stephanos Bibas, University of Pennsylvania Law School, Supreme Court Clinic, Philadelphia, PA, for respondent.

Elena Kagan, Solicitor General, Counsel of Record, Tony West, Assistant Attorney General, Malcolm L. Stewart

, Deputy Solicitor General, Anthony A. Yang, Assistant to the Solicitor General, William Kanter, Michael E. Robinson, Attorneys, Department of Justice, Washington, D.C., for petitioner.Opinion

Justice THOMAS

delivered the opinion of the Court.

Section 204(d) of the Equal Access to Justice Act (EAJA), codified in 28 U.S.C. § 2412(d)

, provides in pertinent part that “a court shall award to a prevailing party ... fees and other expenses ... in any civil action ... brought by or against the United States ... unless the court finds that the position of the United States was substantially justified.”

We consider whether an award of “fees and other expenses” to a “prevailing party” under § 2412(d)

is payable to the litigant or to his attorney. We hold that a § 2412(d) fees award is payable to the litigant and is therefore subject to a Government offset to satisfy a pre-existing debt that the litigant owes the United States.

I

This case arises out of proceedings in which a Social Security claimant, Ruby Willow Kills Ree, prevailed on a claim for benefits against the United States. Respondent Catherine Ratliff was Kills Ree's attorney in those proceedings. The District Court granted Kills Ree's unopposed motion for a § 2412(d)

fees award in the amount of $2,112.60. Before the United States paid the fees award, however, it discovered that Kills Ree owed the Government a debt that predated the District Court's approval of the award. Accordingly, the United States sought an administrative offset against the fees award to satisfy part of that debt.

The Government's authority to use administrative offsets is statutory. See 31 U.S.C. §§ 3711(a)

, 3716(a) (authorizing an agency whose debt collection attempts are unsuccessful to “collect the claim by administrative offset”).¹ Congress has subjected to offset all “funds payable by the United States,” § 3701(a)(1), to an individual who owes certain delinquent federal debts, see § 3701(b), unless, as relevant here, payment is exempted by statute, see § 3716(e)(2). No such exemption applies to attorney's fees awards under 28 U.S.C. § 2412(d)(1)(A)

(hereinafter subsection (d)(1) (A)), which are otherwise subject to offset, see 31 CFR § 285.5(e)(1) (2009), and which, as of January 2005, are covered by the Treasury Offset Program (TOP) operated by the Treasury Department's Financial Management Service (FMS). See Brief for Petitioner 4 (explaining TOP's extension to cover so-called “ ‘miscellaneous' ” payments that include attorney's fees payments the Treasury Department makes on behalf of federal agencies).²

In this case, the Government, relying on the TOP, notified Kills Ree that the Government would apply her § 2412(d)

fees award to offset a portion of her outstanding federal debt. Ratliff intervened to challenge the offset on the grounds that § 2412(d) fees belong to a litigant's attorney and thus may not be used to offset or otherwise satisfy a litigant's federal debts. The District Court held that because § 2412(d) directs that fees be awarded to the prevailing party, not to her attorney, Ratliff lacked standing to challenge the Government's proposed offset. See No. CIV. 06–5070–RHB, 2007 WL 6894710, *1 (D.S.D., May 10, 2007).

The Court of Appeals for the Eighth Circuit reversed. 540 F.3d 800 (2008)

. It held that under Circuit precedent, “EAJA attorneys' fees are awarded to prevailing parties' attorneys.” Id., at 802. The Court of Appeals recognized that its decision did not accord with a “literal interpretation of the EAJA,” ibid., and exacerbated a split among the Courts of Appeals, compare id., at 801–802, with, e.g.,

Reeves v. Astrue,

526 F.3d 732, 733 (C.A.11 2008); Manning v. Astrue, 510 F.3d 1246, 1249–1251 (C.A.10 2007); FDL Technologies, Inc. v. United States, 967 F.2d 1578, 1580 (C.A.Fed.1992); Panola Land Buying Assn. v. Clark, 844 F.2d 1506, 1510–1511 (C.A.11 1988).³ We granted certiorari. 557 U.S. 965, 130 S.Ct. 48, 174 L.Ed.2d 631 (2009).

II

Subsection (d)(1)(A) directs that courts “shall award to a prevailing party ... fees and other expenses ... incurred by that party.” (Emphasis added.) We have long held that the term “prevailing party” in fee statutes is a “term of art” that refers to the prevailing litigant. See, e.g., Buckhannon Board & Care Home, Inc. v. West Virginia Dept. of Health and Human Resources, 532 U.S. 598, 603, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001)

. This treatment reflects the fact that statutes that award attorney's fees to a prevailing party are exceptions to the “ ‘American Rule’ ” that each litigant “bear [his] own attorney's fees.” Id., at 602, 121 S.Ct. 1835 (citing Key Tronic Corp. v. United States, 511 U.S. 809, 819, 114 S.Ct. 1960, 128 L.Ed.2d 797 (1994)). Nothing in EAJA supports a different reading. Cf. Arthur Andersen LLP v. Carlisle, 556 U.S. 624, ––––, n. 4, 129 S.Ct. 1896, 1902, n. 4, 173 L.Ed.2d 832 (2009) (where Congress employs “identical words and phrases within the same statute,” they are presumed to carry “the same meaning” (internal quotation marks omitted)). Indeed, other subsections within § 2412(d) underscore that the term “prevailing party” in subsection (d)(1)(A) carries its usual and settled meaning—prevailing litigant. Those other subsections clearly distinguish the party who receives the fees award (the litigant) from the attorney who performed the work that generated the fees. See, e.g., § 2412(d)(1)(B)

(hereinafter subsection (d)(1)(B)) (the “prevailing party” must apply for the fees award and “sho[w]” that he “is a prevailing party and is eligible to receive an award” by, among other things, submitting “an itemized statement from any attorney ... representing or appearing in behalf of the party ” that details the attorney's hourly rate and time spent on the case (emphasis added)); see also Part III, infra.

Ratliff nonetheless asserts that subsection (d)(1)(A)'s use of the verb “award” renders § 2412(d)

fees payable directly to a prevailing party's attorney and thus protects the fees from a Government offset against the prevailing party's federal debts. See Brief for Respondent 11–19 (arguing that subsection (d)(1)(A)'s use of the word “ ‘award’ ” “expressly incorporates a critical distinction” between the right to an “ ‘award’ ” of fees and the right to “ ‘receiv[e]’ ” the fees). We disagree.

The transitive verb “ ‘award’ ” has a settled meaning in the litigation context: It means “[t]o give or assign by sentence or judicial determination.” Black's Law Dictionary 125 (5th ed.1979) (emphasis added); see also Webster's Third New International Dictionary 152 (1993) (“to give by judicial decree” (emphasis added)). The plain meaning of the word “award” in subsection (d)(1)(A) is thus that the court shall “give or assign by ... judicial determination” to the “prevailing party” (here, Ratliff's client Kills Ree) attorney's fees in the amount sought and substantiated under, inter alia, subsection (d)(1)(B).

Ratliff's contrary argument does not withstand scrutiny. According to Ratliff, subsection (d)(1)(B), which uses “the noun ‘award’ ” to mean a “ ‘decision,’ ” requires us to construe subsection (d)(1)(A) (which uses “award” as a verb) to mean that “[o]nly the prevailing party may receive the award (the decision granting fees), but only the attorney who earned the fee (the payment asked or given for professional services) is entitled to receive it.” Brief for Respondent 16, 15 (emphasis in original; some internal quotation marks and footnote omitted). This argument ignores the settled definitions above, and even the definitions Ratliff proffers, because each makes clear that the verb “award” in subsection (d)(1)(A) means to “give by the decision of a law court” or to “grant ... by judicial decree,” not simply to “give a decision” itself. Id., at 16, and n. 39 (emphasis added; internal quotation marks omitted). We thus agree with the Government that under the statutory language here, the “judicial decision is the means by which the court confers a right to payment upon the prevailing party; it is not itself the thing that the court gives (or orders the defendant to give) to the party.” Reply Brief for Petitioner 4 (emphasis in original) (citing Hewitt v. Helms, 482 U.S. 755, 761, 107 S.Ct. 2672, 96 L.Ed.2d 654 (1987)

(explaining that “[i]n all civil litigation, the judicial decree is not the end but the means”)). This settled and natural construction of the operative statutory language is reflected in our cases. See, e.g., Scarborough v. Principi, 541 U.S. 401, 405, 124 S.Ct. 1856, 158 L.Ed.2d 674 (2004) (“EAJA authorizes the payment of fees to a prevailing party” (emphasis added)).

Ratliff's final textual argument—that subsection (d)(1)(A)'s reference to “attorney's fees” itself establishes that the fees are payable to the prevailing party's attorney, see Brief for Respondent 19–22—proves far too much. The fact that the statute awards to the prevailing party fees in which her attorney may have a beneficial interest or a contractual right does not establish that the statute “awards” the fees directly to the attorney. For the reasons we have explained, the statute's plain text does the...