Supreme Court to Determine EAJA Payee

The U.S. Supreme Court has granted the government's petition for certiorari in Ratliff v. Astrue, 540 F.3d 800 (8th Cir. 2008). The question presented by the government in the petition for cert. is "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." The Court rejected Ratliff's arguments that the Eighth Circuit's decision was interlocutory, not final; that its unique procedural characteristics made it a poor choice for review; and that the Supreme Court should wait until additional conflicts between the Circuits arise.

In Ratliff, the Eighth Circuit reversed the judgment of the district court and held that Eighth Circuit precedent requires a finding that attorneys' fees under EAJA are awarded to the prevailing parties' attorneys, rather than to the parties themselves. The Eighth Circuit panel noted that, had this been a case of first impression in the court, it likely would have held differently, as in Manning v. Astrue, 510 F.3d 1246 (10th Cir. 2007), and Reeves v. Astrue, 526 F.3d 732 (11th Cir. 2008). These two cases held that the EAJA fees belong to the "prevailing party" and, as a result, may be offset by federal debts owed by the plaintiff.

Ratliff differs from the other Circuits, which had held that the clear statutory language of the Equal Access to Justice Act requires that the fee be paid to the plaintiff, who can then pay his/her legal fees. In many other types of litigation, EAJA fees act as reimbursement to plaintiffs who have already paid their attorney legal fees. In the Social Security claims world, however, EAJA fees have historically been paid directly to the attorney, who thus does not have to rely on the plaintiff to pay the fee.

Interim Advice: If your client has a federal debt incurred for reasons such as nonpayment of child support or back taxes, then the government is likely to offset the EAJA award by the amount of the debt.

We continue to advise attorneys to have their clients sign an assignment of EAJA fees and costs from the plaintiff to the attorney. The assignment may be as simple as language added to the fee agreement that says: "I agree to assign any and all attorney's fees and expenses, including filing fees, awarded by the Court in my federal court action under the Equal Access to Justice Act to my attorney [name]." It can be a separate document or incorporated in the fee contract. Most district courts have honored an assignment, and will order the EAJA fee to be made payable to the attorney.

Ms. Ratliff is represented by NOSSCR member James Leach, Esq. Rapid City, SD, and Scott Nelson and Brian Wolfman of Public Citizen Litigation Group, Washington, DC. NOSSCR will be filing an amicus brief. We expect that oral argument will be held in early 2010.