Delgadillo v. Astrue

• Decision Date: 21 August 2007
• Docket Number: Civil Action No. 06-cv-01556-AP.,Civil Action No. 06-cv-2186-AP.
• Citation: 601 F.Supp.2d 1241
• Parties: Eduardo A. DELGADILLO, Plaintiff-Appellant, v. Michael J. ASTRUE, Commissioner of Social Security, Defendant-Appellee. and Robert D. Winston, Plaintiff-Appellant, v. Michael J. Astrue, Commissioner of Social Security, Defendant-Appellee.
• Court: U.S. District Court — District of Colorado

601 F.Supp.2d 1241

Eduardo A. DELGADILLO, Plaintiff-Appellant, v. Michael J. ASTRUE, Commissioner of Social Security, Defendant-Appellee. and Robert D. Winston, Plaintiff-Appellant, v. Michael J. Astrue, Commissioner of Social Security, Defendant-Appellee.

Civil Action No. 06-cv-01556-AP.

Civil Action No. 06-cv-2186-AP.

United States District Court, D. Colorado.

August 21, 2007.

Robert Kelvin Gruber, Attorney at Law, Lakewood, CO, for Plaintiff-Appellant.

Kurt J. Bohn, U.S. Attorney's Office, Debra J. Meachum, Social Security Administration, Denver, CO, for Defendant-Appellee.

MEMORANDUM OPINION AND ORDER

KANE, Senior District Judge.

Identical motions by the same counsel have been filed in both of the above captioned cases. The rulings are identical. This opinion refers only to Winston, but applies to both. The motions are to amend and set aside an alleged wrongful offset of Equal Access To Justice (EAJA) attorney fee awards pursuant to Rule 60(a) and (b) of the Federal Rules of Civil Procedure. It is prudent to write a detailed opinion and order because the motions involve a conflict in federal interests presented by a recent development in the payment of EAJA fees in which the Department of the Treasury (Treasury) is offsetting social security claimants' EAJA awards in order to pay claimants' delinquent child support obligations and no opinion on the subject has yet been issued by a judge in this district. Moreover, the indiscriminate use of "attorney fees" and "attorney's fees" infuses both the statutes and case law on the subject of attorney fees and causes confusion and contradictory rulings throughout our jurisprudence.

Robert D. Winston and Eduardo A. Delgadillo (hereafter Winston) won their respective lawsuits against the Social Security Administration and thus became entitled to EAJA fees. The EAJA provides a fee-shifting mechanism that allows a qualified person to recover both court costs and fees when he prevails in a civil suit against the government. 28 U.S.C. § 2412(d)(1)(A) ("a court shall award to a prevailing party ... fees and other expenses ... incurred by that party")(emphasis added). The Tenth Circuit Court of Appeals, interpreting "prevailing party," has held that "an EAJA award is to the claimant." McGraw v. Barnhart, 450 F.3d 493, 497 (10th Cir.2006).¹

I ordered the Social Security Commissioner to pay the EAJA fees. Dutifully, the Commissioner submitted a request to the Treasury for payment. Winston, however, owed outstanding child support payments. Rather than receiving checks from the Treasury, as had been his experience in previous cases, plaintiffs counsel received a letter notifying him that Winston's EAJA fees had been offset to satisfy debts for delinquent child support. He therefore moved for an amended order to place the EAJA fees directly in his name, rather than Winston's. He argued the policy underlying. EAJA deprived the Treasury of the authority to offset prevailing social security claims plaintiffs' EAJA fees. I denied the motion. Winston then filed the instant motion pursuant to F.R.Civ.P. Rule 60. I called for briefs and ordered the Treasury to abate offsetting Winston's EAJA fees until the motion could be argued and decided.

Winston requested that (1) no decision be made until the Tenth Circuit decides the pending appeal in Manning v. Astrue, No. 06-7127 (10th Cir. Filed Jan. 8, 2007), (2) that I allow Winston to supplement the amount of attorney fees based on the additional litigation, (3) that I order the Social Security Commissioner to pay either the approved fees directly to the attorney in the attorney's name or that the EAJA fees be paid to Winston as a representative payee for his attorney.

The Commissioner asks me to find that the EAJA award belongs to Winston—not the attorney—and, because Winston was delinquent in his child support payment obligations, that the administrative offsets were proper.

I read the briefs in Manning v. Astrue and decided its outcome would not resolve the instant case, and therefore set the motion for oral argument following submission of briefs. I rule as follows.

SUPPLEMENTATION OF EAJA APPLICATION

Winston wishes to supplement the EAJA application to include amounts for his attorney's services rendered in defending the EAJA awards. He cites no authority, but the Commissioner does not oppose the request. Case law supports this position. E.g. Childress v. Sullivan, 742 F.Supp. 1088 (D.Colo.1990)(holding that prevailing plaintiffs are entitled to fees and expenses relating to work on fee applications, including time relating to their second supplemental memorandum and motion for reconsideration). Therefore, the proposed supplements to the applications will be permitted.

ISSUES

The asserted pivotal issues are whether (1) the Treasury may offset a claimant's EAJA fees to satisfy his outstanding child support obligations, thereby depriving the claimant's attorney of payment, and whether (2) such an offset's chilling effect on the representation of Social Security claimants is outweighed by the government's interest in collecting delinquent child support payments.

DISCUSSION

1. EAJA's Plain Language

Because EAJA's plain language provides the claimant himself is entitled to the award, and because the Tenth Circuit has interpreted EAJA's language to this effect, there was no "clerical mistake" in awarding Winston—and not Winston's attorney—the EAJA fee. The Tenth Circuit's pronouncement that "an EAJA award is to the claimant" does not admit ambiguity. Although mistakes caused by clerical errors, inadvertence, etc., may be corrected by the court at any time, Fed. R.Civ.P. 60(a)-(b), correction is not available simply to change a result where no such mistake has occurred. There was no mistake in directing the award to Winston who was the "prevailing party." The statute dictates that Winston—and only Winston—was entitled to receive the award, subsequent offsets notwithstanding.

2. Confusion in the Decisional Law

Despite the clarity of EAJA's assignment of fees to the prevailing party, confusion abounds in decisions determining whether EAJA fees belong to the claimant or to the claimant's attorney. Winston cites two district court decisions from this circuit—one published and the other unpublished—to support his position. These decisions, however, are not persuasive because they are contrary to EAJA's plain language and the Tenth Circuit's explication of that language.

In Dixon-Townsell v. Barnhart, the district court held a claimant's EAJA fees could not be offset by the Treasury because doing so would defeat EAJA's purpose of providing compensation to attorneys representing Social Security claimants. 445 F.Supp.2d 1283, 1284 (N.D.Okla.2006). That court found "no authority to grant Plaintiff, rather than Plaintiffs Counsel, attorney fees pursuant to EAJA." Id. Reasoning by analogy to a Tenth Circuit decision that denied a pro se plaintiff EAJA fees, Demarest v. Manspeaker, 948 F.2d 655 (10th Cir.1991), the court concluded EAJA "intended to compensate Plaintiff's attorney, not generate income for a claimant," and therefore ordered the Commissioner to pay the award directly to the attorney. Dixon-Townsell, 445 F.Supp.2d at 1283.

Similarly, in McKee v. Astrue, another district court ordered direct payment to the attorney of an EAJA award, No. CIV-05-359, slip op. (E.D.Okla. Jun. 13, 2007). The court found first that McGraw's pronouncement that "an EAJA award is to the claimant," when viewed in context, referred only to the "underlying rationales" of an EAJA award and a Social Security Act (SSA) award. Id. at 2. Because McGraw dealt with a situation where both EAJA and SSA awards were made, the court held McGraw's description of EAJA awards as belonging to the claimant was (apparently) inapt in McKee's situation which dealt only with an EAJA award. Id. Furthermore, because McGraw stated "[a]ttorneys handling Social Security proceedings in court may seek fees for their work under both the EAJA and the SSA," quoting McGraw, 450 F.3d at 497 (emphasis added), the court reasoned the award should be paid directly to the attorney. McKee, slip op. at 3.²

Though Winston argues Dixon-Townsell and McKee are dispositive, his position and that of the two district court decisions are incompatible with both EAJA's plain language and the Tenth Circuit's interpretation of that language for two reasons.

First, Congress drafted the statute to say the fee would be paid to the prevailing party himself. Nowhere does EAJA say the fee award is to be paid directly to that party's attorney. Indeed, EAJA itself contradicts this assertion. Section 2412(d)(1)(B) states that, to collect EAJA fees, the prevailing party must provide "an itemized statement from any attorney or expert witness representing or appearing in behalf of the party" computing the appropriate fees. The fact EAJA groups the prevailing party's attorney with others who may have contributed to the litigation suggests the party's attorney occupies no special place in the statutory schema that would authorize him to receive fees directly. Both Dixon-Townsell and McKee ignore the text of the statute and base their decisions on surmise about policy.

The statute is hardly aberrant. The traditional "American Rule" is that in the absence of a statute specifically authorizing the shifting of fees from one party to another, each party is responsible for his own attorney fees and costs. Two exceptions to this Rule, not applicable here, are bad faith and common fund. The bad faith exception allows a court to award fees when the opposing party has willfully disobeyed a court order or when the losing party has engaged in vexatious, oppressive or wanton actions. The common fund doctrine permits litigants to recover or preserve funds of others as well as themselves to subvent litigation costs out of the common recovered funds. See generally, Wright & Koch, Federal Practice & Procedure: Judicial...