Astrue v. Ratliff
From ScotusWiki
Argued February 22, 2010. Decided June 14, 2010.
Authorship: Matt Sundquist of SCOTUSblog and Sheila McCorkle of Akin Gump
Docket: 08-1322
Issue: Whether an “award of fees and other expenses” under the Equal Access to Justice Act, 28 U.S.C. 2412(d), is payable to the “prevailing party” rather than to the prevailing party’s attorney, and therefore is subject to an offset for a pre-existing debt owed by the prevailing party to the United States.
Contents |
[edit] Briefs and Documents
[edit] Decision
REVERSED AND REMANDED in a 9-0 decision with an opinion by Justice Thomas. Justice Sotomayor filed a concurrence, joined by Justices Stevens and Ginsburg.
[edit] Oral Argument
Transcript (February 22, 2010)
[edit] Merits Briefs
- Brief for Petitioner Michael J. Astrue, Commissioner of Social Security
- Brief for Respondent Catherine Ratliff
- Reply Brief for Petitioner Michael J. Astrue, Commissioner of Social Security
[edit] Amicus Briefs
[edit] Certiorari-Stage Documents
[edit] Opinion Recap
Sheila McCorkle originally wrote the following for SCOTUSblog:
On June 14 in Astrue v. Ratliff (No. 08-1322), the Court made it a little more difficult for some attorneys to collect fees in cases brought against the government. In an unanimous decision written by Justice Thomas, the Court held that, under the Equal Access to Justice Act (EAJA), an award of attorney’s fees is payable to the litigant, rather than the litigant’s attorney; thus, the federal government can use that award to satisfy a debt owed by the litigant to the United States. Justice Sotomayor filed her first concurring opinion, which was joined by Justices Stevens and Ginsburg.
The respondent in the case, Catherine Ratliff, is an attorney who successfully represented Ruby Willow Kills Ree in her suit challenging the denial of her Social Security benefits. The district court granted Ree’s motion for an award of $2112.60 in attorney’s fees under the EAJA, which provides in 28 U.S.C. § 2412(d)(1)(A) that “a court shall award to a prevailing party . . . fees and other expenses . . . in any civil action brought by or against the United States.” However, the government sought to use the award to offset an outstanding debt owed by Ree to the federal government.
Ratliff filed suit against the Social Security Commissioner to recover the fees, arguing that fees awarded under Section 2412(d) belonged to her rather than Ree. The district court rejected that argument but, on appeal, the Eighth Circuit reversed. While acknowledging a conflict with the decisions of other circuits, the court of appeals deemed itself bound by its own precedent and thus held that “attorneys’ fees awarded under the EAJA are awarded to the prevailing parties’ attorneys, rather than to the parties themselves.”
The Court in turn reversed the Eighth Circuit. Emphasizing longstanding precedent holding that the term “prevailing party” in fee statutes is a “term of art” referring to the prevailing litigant, the Court found nothing in EAJA to the contrary. Indeed, the Court reasoned, other provisions in the statute clearly distinguish the party who receives the fee award (the litigant) from the attorney: Section 2412(d)(1)(B), for example, treats attorneys on par with other service providers in a manner that foreclosed the possibility that attorneys have a right to the awarded fee.
Moreover, the statute’s use of the verb “award” does not render fees payable to the prevailing party’s attorney. In rejecting Ratliff’s argument to the contrary, the Court explained that in a litigation context the transitive verb “award” had a well-settled meaning of “giving or assigning” by judicial decree. Thus, its plain meaning in subsection (d)(1)(A) is that the court shall “give or assign” attorney’s fees by judicial determination to the prevailing party. The fact that the prevailing party’s attorney may have a beneficial interest or contractual right in the fees, the Court added, did not alter the meaning of “prevailing party.”
Nor was the Court persuaded by the argument that the EAJA fee provision is at least ambiguous in light of other provisions in the statute, the Social Security Act (SSA), and the government’s practice of paying some EAJA fees awards directly to attorneys in other cases. Rather, the Court emphasized, the fact that SSA provisions granting fee awards are directly payable to attorneys merely demonstrates that Congress “knows how” to create a direct fee requirement when it wants.
In her concurrence, Justice Sotomayor agreed with the Court that its holding was supported by its precedents and the EAJA’s text. However, she believed that had it considered the question, Congress would “not have wanted EAJA fee awards to be subject to offset.” In particular, she expressed concern that the Court’s ruling would undermine the purpose of EAJA, whose fee awards were created by Congress to reduce the financial barriers associated with challenging unreasonable government actions. Thus, she warned, by subjecting EAJA awards to administrative offsets for litigants with debts, the Court’s ruling will inevitably make it more difficult for persons of limited means to obtain legal representation.
[edit] Oral Argument Recap
Matt Sundquist originally wrote the following for SCOTUSblog:
Under the Equal Access to Justice Act, a court can award to a party who prevails in an action against the United States the “fees and other expenses…incurred by” that party if the position of the United States was not “substantially justified.”
Representing the federal government, Assistant to the Solicitor General Anthony Yang fielded numerous hypothetical questions that were intended to test the government’s position. Justice Alito asked whether the government’s claim on attorney’s fees should be given priority over another creditor who would otherwise be repaid; if so, why? Yang responded that when another creditor has a claim on a fee, it can seek the fee as well. In response to Justice Ginsburg, who wondered whether the fee would be awarded to the prevailing party even if the party were in prison, Yang answered that it would be.
In a subsequent hypothetical, posed by Justice Breyer, Yang retreated from a position he briefly adopted. Justice Breyer asked whether – before making a claim against the government – a lawyer could reach an agreement with his or her client and an agency in which the agency would agree “that if I [the lawyer] get an EAJA fee, then I get to keep it and I don’t have to give it to my client.” Yang indicated that he was unaware of such a scenario ever actually occurring but he acknowledged that it was possible. Keeping in mind that EAJA fees are only awarded when the government has taken a position which is not “substantially justified,” Chief Justice Roberts observed that if he were a lawyer, and the government agreed to pay him if he prevailed in a case, his first action in the case would be to submit the agreement as evidence, as the agreement is the equivalent of the government admitting that it has taken a position which is not substantially justified. Yang thus retreated from his earlier position, suggesting instead that a lawyer could, in advance of a case, negotiate a debt-repayment agreement between his client and the government. Justice Sotomayor then postulated that requiring a lawyer to do the work and negotiate a debt repayment agreement for his client before a case even begins would discourage lawyers from taking on Social Security cases. This, said Sotomayor, is illogical.
Arguing on behalf of respondent Catherine Ratliff, James Leach quickly faced questions from Justice Kennedy, who repeated a theory premised on what he termed “the law of offsets.” The government does not benefit by reclaiming EAJA fees through the debt offset program “because the money is [not] created to offset the debt,” suggested Justice Kennedy, because “it’s just being paid from one account to the other.” Ratliff’s position, Justice Kennedy continued, “is just contrary to the standard law of offsets.” The Court also discussed who should benefit from EAJA fees, and what it would mean to benefit. Although Leach asserted that the statute “is subject to the regulation which looks to who’s entitled to the benefit,” and that attorneys should be considered the beneficiaries, Justice Scalia countered that even when the government withholds the money to compensate outstanding debts, the plaintiff has in effect benefitted by avoiding a financial obligation to her lawyer. In response, Leach noted that in veterans and Social Security cases, which account for ninety percent of EAJA claims, lawyers are prohibited from receiving fees in the form of pay-as-you-go payments. This, he explained, would mean that “the attorney has never been paid” if the EAJA fee is withheld, and thus cannot benefit from the fee.
Leach also returned to Justice Breyer’s hypothetical: whether a lawyer could enter into a repayment agreement before taking a case, thereby ensuring that he would be compensated for his services. Leach countered that such agreements are fanciful. First, Supplemental Security Income benefits are limited to “aged, blind, and disabled people who have little or no money.” A claimant who met these criteria would have difficulty producing the money to enter a debt-repayment agreement. Second, the attorney only has sixty days from when the agency acts to file a case in federal court – in Leach’s view, not enough time for an attorney to meet with his client, review the case, and enter an agreement with the government.[edit] Pre-Argument Articles
[edit] Argument Preview
Matt Sundquist originally wrote the following for SCOTUSblog:
Under the Equal Access to Justice Act, a court in a civil action against the United States shall “award to a prevailing party other than the United States fees and other expenses . . . incurred by that party” if the position of the United States was not “substantially justified.” On February 22, in No. 08-1322, the Court will consider whether an EAJA fee award is payable to the prevailing party, rather than that party’s attorney, so that the federal government may use that award to satisfy a debt owed by the prevailing party to the United States.
In 2006, after Ruby Willow Kills Ree prevailed in her suit challenging the denial of her Social Security benefits, the district court granted her motion for EAJA fees and awarded her $2112.60. However, because Kills Ree owed a debt to the United States, the Department of the Treasury (Treasury) notified her that the EAJA award had been applied to that debt, and she would not receive any of the funds.
Respondent Catherine Ratliff, who represented Kills Rees in her suit, filed suit against the Social Security Commissioner (currently petitioner Michael Astrue) to recover the fees. She argued that the EAJA fees were awarded directly to her as Kills Rees’s attorney. The district court rejected that argument. In its view, the text of the EAJA required awards to be made to the “prevailing party” rather than the party’s attorney, and Ratliff therefore lacked standing to challenge the offset.
On appeal, the Eighth Circuit reversed. While acknowledging a conflict with the decisions of other circuits, the court of appeals deemed itself bound by its own precedent and thus held that “attorneys’ fees awarded under the EAJA are awarded to the prevailing parties’ attorneys, rather than to the parties themselves.” Judge Gruender filed an opinion concurring in the judgment. In his view, although Eighth Circuit precedent dictated a contrary conclusion, both Supreme Court precedent and the text of the EAJA indicated that EAJA fees are awarded to the prevailing party. The federal government filed a petition for certiorari, which the Court granted on September 30, 2009.
In its opening brief on the merits, the government begins with the plain text of the EAJA – which, the government emphasizes, instructs courts to award fees and other expenses “to a prevailing party,” rather than to the party’s attorney. That interpretation is, in the government’s view, further supported by the requirement that the prevailing party’s fee application “includ[e] an itemized statement from any attorney,” complete with the attorney’s hourly rate and time expended: this distinction reflects Congress’s intention that EAJA fees go to reimburse the prevailing party, who could then pay her attorney’s fee. Moreover, the distinction also has a sound policy basis: if the EAJA fees go directly to the prevailing party directly, courts can avoid having to mediate disputes over fees.
The government next turns to Congress’s 1985 amendments to the EAJA. When it enacted those amendments, the government argues, Congress would have been aware of other statutes requiring that fees be paid directly to an attorney, but it nonetheless opted to provide in the EAJA that fees be awarded “to a prevailing party.” Finally, the government criticizes the Eighth Circuit’s interpretation as lacking any “textual analysis or other reasoning that might provide a sound basis for [its] judgment.” Instead, the court of appeals “self-consciously departed from what it recognized was a ‘literal interpretation of the EAJA.’”
Respondent Catherine Ratliff also relies on the plain text of the EAJA. In her view, the plainest reading of the phrase “attorney’s fee” is money meant for an attorney, rather than money to pay the client or her debts. This reading is, in her view, bolstered by a 1985 amendment to the EAJA providing that when a Social Security “ claimant’s attorney receives fees,” the attorney should refund the smaller fee to the claimant. Moreover, Ratliff argues, the attorney’s interest in the fees should exempt the fees from any offset.
Ratliff next argues that her interpretation is consistent with the Court’s precedents, which hold that “attorney’s fees awarded under fee-shifting statutes are paid to attorneys”; the decisions on which the government relies do not resolve the question of “who ultimately receives attorney’s fees.” Nor, Ratliff continues, is the government’s interpretation necessary to avoid embroiling courts in disputes regarding to the allocation of fees and expenses, as there are already state ethics rules that “work well” at regulating the handling of funds.
Finally, Ratliff cautions that the government’s approach would undermine EAJA and other similar fee-shifting statutes. Attorneys might be reluctant to take on a case, she explains, if they are concerned that they will not be reimbursed even if they win a case.
