Bryant v. Commissioner of Soc. Sec.

• Decision Date: 24 August 2009
• Docket Number: No. 08-6375.,No. 08-6378.,08-6375.,08-6378.
• Parties: Clarence BRYANT, John C. Turner, Plaintiffs-Appellants, v. COMMISSIONER OF SOCIAL SECURITY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

578 F.3d 443

Clarence BRYANT, John C. Turner, Plaintiffs-Appellants, v. COMMISSIONER OF SOCIAL SECURITY, Defendant-Appellee.

No. 08-6375.

No. 08-6378.

United States Court of Appeals, Sixth Circuit.

Argued: July 28, 2009.

Decided and Filed: August 24, 2009.

ARGUED:

Wolodymyr Iwan Cybriwsky, Law Office, Prestonsburg, Kentucky, for Appellants. Jeffrica Jenkins Lee, United States Department of Justice, Washington, D.C., for Appellee.

ON BRIEF:

Wolodymyr Iwan Cybriwsky, Law Office, Prestonsburg, Kentucky, for Appellants. Jeffrica Jenkins Lee, William Kanter, United States Department of Justice, Washington, D.C., for Appellee.

Before COLE and COOK, Circuit Judges; COHN, District Judge.^*

OPINION

COLE, Circuit Judge.

Plaintiffs-Appellants Clarence Bryant and John C. Turner (collectively, "Plaintiffs") appeal from separate cases awarding attorney fees directly to Plaintiffs rather than to their attorneys under the Equal Access to Justice Act (the "EAJA"), 28 U.S.C. § 2412(d). This Court consolidated Plaintiffs' appeals. Plaintiffs, who are both represented by the same counsel, argue that the district court's decision to award fees to Plaintiffs is contrary to the past practices of the Social Security Administration, at odds with a recent decision of this Court, and deleterious to the ability of Social Security claimants to obtain legal representation. Specifically, Plaintiffs argue that awarding attorney-fee payments directly to plaintiffs subjects those payments to administrative offset under the Debt Collection Improvement Act of 1996 (the "DCIA"), 31 U.S.C. § 3716, reducing or completely eliminating Plaintiffs' ability to pay for legal services. Plaintiffs also argue that the district court erred in refusing to increase the EAJA compensable hourly rate from $125 to $150.

We share Plaintiffs' concern that awarding attorney fees to successful parties, rather than to their attorneys, will prevent some successful plaintiffs from paying their lawyers and, ultimately, may prevent future claimants from obtaining counsel in the first place. However, the plain language of the EAJA, as well as Supreme Court case law interpreting similar language in other statutes, convinces us that we must AFFIRM the district court's decisions.

I. BACKGROUND

Plaintiffs filed separate applications for Social Security Disability Insurance Benefits. Their applications were both denied by the Commissioner of Social Security ("Commissioner"). After exhausting their administrative remedies, Plaintiffs filed appeals in the United States District Court for the Eastern District of Kentucky. In both cases, the Plaintiffs prevailed in that the district court found the Commissioner's decisions unsupported by substantial evidence and remanded the cases to the Commissioner.

Plaintiffs then moved for attorney fees under the EAJA at an hourly rate of $150 and requested payment directly to counsel. The Commissioner objected to the requested fee rate and argued that any fee award should be paid to Plaintiffs, rather than to their attorney. The district court awarded attorney fees but held that only the $125 per hour fee-rate set by Congress was warranted. The court also held that EAJA attorney fees are payable to the party, and not the party's attorney. These appeals followed.

II. ANALYSIS

A. Standard of review

Plaintiffs raise two issues on appeal. The first issue, whether attorney fees are payable to Plaintiffs or Plaintiffs' attorney, is an issue of statutory interpretation, which the Court reviews de novo. United States v. Gagnon, 553 F.3d 1021, 1025 (6th Cir.2009). The second issue, whether the Plaintiffs were entitled to an increase in the hourly attorney-fee rate, is reviewed for abuse of discretion. See Blum v. Stenson, 465 U.S. 886, 898, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984); Townsend v. Comm'r of Soc. Sec., 415 F.3d 578 (6th Cir.2005). "A district court abuses its discretion when it relies on clearly erroneous findings of fact, or when it improperly applies the law or uses an erroneous legal standard." Deja Vu of Nashville, Inc. v. Metro. Gov't of Nashville & Davidson County, 274 F.3d 377, 400 (6th Cir.2001) (quotation marks and citation omitted).

B. The Plaintiffs, and not their attorney, are the proper recipient of attorney fees under the EAJA

1. The history

The EAJA, enacted in 1980, provides for an award of attorney fees to a party prevailing against the United States in a civil action when the position taken by the Government is not substantially justified and no special circumstances exist warranting a denial of fees. 28 U.S.C. § 2412(d)(1)(A); see also Perket v. Sec. of H.H.S., 905 F.2d 129, 132 (6th Cir.1990). The purpose of the statute is described in its legislative history:

The [EAJA] rests on the premise that certain individuals ... may be deterred from seeking review of ... unreasonable governmental action because of the expense involved in securing the vindication of their rights. The economic deterrents to contesting governmental action are magnified in these cases by the disparity between the resources and expertise of these individuals and their government. The purpose of the bill is to reduce the deterrents and disparity by entitling certain prevailing parties to recover an award of attorney fees, expert witness fees and other expenses against the United States, unless the Government action was substantially justified.

H.R.Rep. No. 96-1418, at 5-6 (1980), reprinted in 1980 U.S.C.C.A.N. 4984, 4984. This statement indicates that Congress intended to make challenges to unreasonable government action more accessible for certain individuals by allowing them to recoup reasonable attorney fees and costs, should they prevail.

Since 1980, the Commissioner has paid attorney fees under the EAJA directly to attorneys, and not to Social Security claimants. As noted by the Fourth Circuit, "[i]n fact, the Commissioner created a direct deposit system for attorneys and issued I.R.S. 1099 forms directly to the attorneys who received awards as taxable attorney income." Stephens v. Astrue, 565 F.3d 131, 135 (4th Cir.2009). Recently, however, the Commissioner changed this practice, partly in response to the DCIA, taking the position that attorney-fee awards under the EAJA were the property of claimants and not their attorneys. The result of this change is that fee awards are now subject to administrative offset if the claimant owes a debt to the federal Government.

2. The EAJA

Plaintiffs argue that attorney fees under the EAJA are the property of and are payable directly to their attorney. A review of the relevant case law on attorney fees under the EAJA involving Social Security benefits reveals a split among our sister circuits. Compare Stephens, 565 F.3d at 139 (4th Cir.2009) (concluding that EAJA fees are payable to the party, not the attorney); Reeves v. Astrue, 526 F.3d 732, 738 (11th Cir.2008) (same) cert. denied, ___ U.S. ___ 129 S.Ct. 724, 172 L.Ed.2d 730 (2008); Manning v. Astrue, 510 F.3d 1246, 1252-55 (10th Cir.2007) (same), cert. denied, ___ U.S. ___, 129 S.Ct. 486, 172 L.Ed.2d 355 (2008); with Ratliff v. Astrue, 540 F.3d 800, 802 (8th Cir.2008) (concluding the EAJA fee award was payable to the attorney, not to the party). In an unpublished opinion, this Circuit took the position in dicta that "attorney's fees awarded under the EAJA are payable to the attorney; they are awarded for the benefit of the party, but the money is not the party's to keep." King v. Comm'r of Soc. Sec., 230 Fed.Appx. 476, 481 (6th Cir.2007).

Plaintiffs' argument relies heavily on King, but "as an unpublished decision, [King] is not precedentially binding under the doctrine of stare decisis," and is considered by us only for its persuasive value. United States v. Sanford, 476 F.3d 391, 396 (6th Cir.2007). The above-quoted language was not a central issue of the case. See King, 230 Fed.Appx. at 481. King involved a challenge to a district court order denying attorney fees under the EAJA because the motion was filed on behalf of King's attorney, rather than on behalf of King himself. Id. Although it was improper to bring the motion in the attorney's name, we reversed because the motion on the whole "was not made by counsel as the real party in interest, but was on behalf of the Plaintiff." Id. at 482 (internal quotations omitted) (emphasis in original). The King Court was not tasked with considering the proper recipient of the EAJA attorney fees so it did not examine the EAJA's text or look to case law bearing on that question from the Supreme Court or other circuits. As such, King's analysis did not address the question at hand.

Thus, we consider for the first time whether attorney fees awarded under the EAJA are payable to the party or the party's attorney.

When we ... are called upon to review and interpret Congress's legislation, "[i]t is elementary that the meaning of a statute must, in the first instance, be sought in the language in which the act is framed, and if that is plain, and if the law is within the constitutional authority of the lawmaking body which passed it, the sole function of the courts is to enforce it according to its terms."

Thompson v. N. Am. Stainless, LP, 567 F.3d 804, 807 (2009) (en banc) (quoting Caminetti v. United States, 242 U.S. 470, 485, 37 S.Ct. 192, 61 L.Ed. 442 (1917)). "The meaning of a statute is determined by reference to the language itself, the specific context in which that language is used, and the broader context of the statute as a whole." Nat'l Cotton Council of Am. v. United States EPA, 553 F.3d 927, 935 (6th Cir.2009). "If the words are plain, they give meaning to the act, and it is neither the duty nor the privilege of the courts to enter speculative fields in search of a different meaning." Caminetti, 242 U.S. at 490, 37 S.Ct. 192. Accordingly, when the statutory language is plain, the "function of the courts—at least where the disposition required by the text is not absurd—is to enforce...