Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-07-02317/USCOURTS-ca8-07-02317-0/pdf.json

Parties Involved:
Michael J. Astrue
Appellee
Catherine G. Ratliff
Appellant

Document Text:

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

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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

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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 thirdparty 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”). 

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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

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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

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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.

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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

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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,

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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.

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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.

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