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Catherine G. Ratliff v. Michael J. Astrue, 07-2317 (2008)

Court: Court of Appeals for the Eighth Circuit Number: 07-2317 Visitors: 145
Filed: Sep. 05, 2008
Latest Update: Mar. 02, 2020
Summary: United States Court of Appeals FOR THE EIGHTH CIRCUIT _ No. 07-2317 _ Catherine G. Ratliff, * * Plaintiff–Appellant, * * * Appeal from the United States v. * District Court for the District * of South Dakota. Michael J. Astrue, Commissioner of * Social Security, * * Defendant–Appellee. * * _ Submitted: February 15, 2008 Filed: September 5, 2008 _ Before MELLOY, GRUENDER, and SHEPHERD, Circuit Judges. _ MELLOY, Circuit Judge. Plaintiff Catherine G. Ratliff, an attorney, appeals from a district co
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                     United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                    ___________

                                    No. 07-2317
                                    ___________

Catherine G. Ratliff,                 *
                                      *
            Plaintiff–Appellant,      *
                                      *
                                      * Appeal from the United States
      v.                              * District Court for the District
                                      * of South Dakota.
Michael J. Astrue, Commissioner of    *
Social Security,                      *
                                      *
            Defendant–Appellee.       *
                                      *
                                 ___________

                              Submitted: February 15, 2008
                                 Filed: September 5, 2008
                                  ___________

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

                                           -2-
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”).




                                          -3-
                                             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 (1989). See also
Northcross v. Bd. of Educ. of Memphis City Sch., 
412 U.S. 427
, 428 (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

       1
       On the other hand, I am not convinced that our McPeck decision compels the
conclusion reached today. McPeck recognizes that “[w]hen a statute awards
attorneys’ fees to a party, the award belongs to the party, not to the attorney
                                             -4-
        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 (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 (1990) (citing 
Evans, 475 U.S. at 730-31
), and “[had] already rejected the argument that the entitlement to a §
1988 award belongs to the attorney rather than the plaintiff,” 
id. at 89
(citing 
Evans, 475 U.S. at 731-32
). 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


representing the 
party.” 910 F.2d at 513
. In remanding the case for the district court
to determine whether the attorney’s fees could be awarded pursuant to the Internal
Revenue Code, rather than the Bankruptcy Code, the court stated that, “[i]f so, the
award of attorneys’ fees should be assessed affirmatively against the IRS, and not as
an offset against its tax 
claim.” 910 F.2d at 514
. However, in the context of that
bankruptcy case, it is not at all clear to me that the court’s statement implied that the
fees are to be awarded directly to the attorneys and not to the party or the bankruptcy
estate. In addition, McPeck did not involve attorney’s fees awarded under either the
EAJA or § 1988. Moreover, because this statement is not necessary to the outcome,
I respectfully suggest that it is dicta.
                                           -5-
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 (1997). If so, we apply the plain language of the statute. Barnhart
v. Sigmon Coal Co., 
534 U.S. 438
, 450 (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
(“[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’s
attorney. Congress has elsewhere demonstrated that it is capable of explicitly
directing the awarding of attorney’s fees to attorneys. See 42 U.S.C. § 406(b)(1)
(“Whenever a court renders a judgment favorable to a claimant . . . who was
represented before the court by an attorney, the court may determine and allow . . . a
reasonable fee for such representation, . . . and the Commissioner of Social Security
may . . . certify the amount of such fee for payment to such attorney . . . .”) (emphasis
added). Congress knows how to ensure that attorney’s fees be awarded directly to the
attorney and plainly chose to award the fees to the party when it enacted the EAJA.
See 
Manning, 510 F.3d at 1251-52
.

       In addition, as discussed by the Tenth Circuit in its thorough and well-reasoned
opinion holding that attorney’s fees awarded under the EAJA belong to the party and
not the party’s attorney, “in defining fees and other expenses, the EAJA treats
attorneys in the same manner as it treats expert witnesses, engineers, scientists,

                                            -6-
analysts, or other persons found by the court to be needed to prepare the case.” 
Id. at 1251
(internal quotations omitted). In support of this proposition, the court cited
Panola Land Buying Association, in which the Eleventh Circuit stated, “Congress did
not intend that all persons performing services to the prevailing party in the litigation
be allowed to become parties in the case to assert their claims for compensation.
Those persons look to the party that obtained their services–just as does the attorney
for the 
party.” 844 F.2d at 1511
. The EAJA also requires the prevailing party, not the
attorney, to submit an itemized list of expenses from the attorney including the time
expended and the fee rate, supporting the proposition that it is “settled law that the
attorney does not have standing to apply for the EAJA fees; that right belongs to the
prevailing party.” 
Manning, 510 F.3d at 1252
(citing Oguachuba v. INS, 
706 F.2d 93
,
97-98 (2d Cir. 1983)). Finally, the EAJA conditions eligibility for an award of
attorney’s fees on the prevailing parties’ having a net worth of less than two million
dollars. 28 U.S.C. § 2412(d)(2)(B); see 
Manning, 510 F.3d at 1251
. “The EAJA
therefore permits attorney’s fees reimbursement to financially eligible prevailing
parties, who make a proper application, and not to their attorneys.” 
Manning, 510 F.3d at 1251
.

        Here, Ratliff successfully represented two social security claimants. Both
clients owed outstanding debts to the United States government, and before paying the
EAJA fees, the government offset the awards based on the claimants’ outstanding
debts pursuant to the Debt Collection Improvement Act (“DCIA”). 31 U.S.C. § 3716.
Ratliff filed suit to obtain the attorney’s fees awarded to her clients, and the district
court determined that the government could offset the attorney’s fees obtained under
the EAJA against each client’s debt to the government. The DCIA subjects all federal
payments, including fees, to administrative offset by the head of an executive, judicial
or legislative agency. 31 C.F.R. § 285.5(e)(1). “[T]he primary purpose of the [DCIA]
is to increase the collection of nontax debts owed to the Federal Government . . . .”
Exec. Order No. 13,019, 61 Fed. Reg. 51,763 (Sept. 28, 1996). However, Congress
recognized specific exceptions to the administrative offsets allowed under the DCIA.

                                           -7-
31 U.S.C. § 3716(c)(3)(A). EAJA awards are not listed as exceptions to the
administrative offset provision, and there is no indication that Congress intended to
exclude EAJA awards from DCIA offsets. Thus, the failure of the DCIA to exempt
EAJA awards from offset leads me to believe that Congress intended to allow EAJA
awards to be offset against any debts the party owes to the government. See 
Manning, 510 F.2d at 1255
.

       Finally, the majority of other circuit courts to consider the issue disagree with
our conclusion and hold that awards of attorney’s fees belong to the client as the
prevailing party, not to the attorney. See Reeves, 
526 F.3d 732
; Manning, 
510 F.3d 1246
; FDL Techs., Inc., 
967 F.2d 1578
; cf. King v. Comm’r, 230 Fed. Appx. 476, 482
(6th Cir. 2007) (unpublished) (stating that “attorney’s fee awards are necessarily
payable to the attorney, either directly or through the hands of the prevailing party”
while concluding that the motion for attorney’s fees was actually brought on behalf
of the attorney’s client). But see 
Marre, 117 F.3d at 304
. Accordingly, I concur
because I am compelled to do so by Curtis, but I believe today’s holding is in conflict
with the repeated statements of the Supreme Court, the EAJA’s plain language, and
the decisions of several other circuit courts.
                        ______________________________




                                          -8-

Source:  CourtListener

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