Within the specific context of the statute, the language can be interpreted as requiring
a comparison of work performed. Section 206 of the EAJA contemplates attorney’s fees for
the same work under both § 406(b) of the SSA and 42 U.S.C. § 2412(d). Pub. L. No. 99-80,
§ 3, 99 Stat. 183 (1985). However, awards granted under § 406(b) of the SSA are for all of
the work performed before a court, while awards granted under the EAJA are for work
performed only on litigation that is not substantially justified. Thus, there could be some
overlap between the SSA award and the EAJA award when the SSA award is granted for
work on litigation that is not substantially justified. This would require a court to parse out
what amount of fees goes to the work performed on litigation that is not substantially
justified and what amount of fees goes to the work performed on appropriate litigation.

Such an interpretation is inconclusive, however, because of the clearly expressed
legislative intention to the contrary. See Consumer Prod. Safety Comm’n v. GTE Sylvania,
Inc., 447 U.S. 102, 108 (1980). The legislative intent is clear:

It is the Committee’s intent that when fee awards are made in social security

or SSI cases under the EAJA, and provision is also allowed under the Social

Security Act for recovery of attorney fees of up to 25% of the claimant’s

benefits, that the EAJA award should be used as a set off to reduce the

payment which the claimant would otherwise owe the attorney. Thus, under

the amendment an attorney for a social security or SSI claimant would be

precluded from receiving both EAJA and Social Security Act fees. Without

this amendment it was argued, “double dipping” was possible. Such double

payments are inappropriate and deprives the plaintiff of the benefits intended

by EAJA. Because the Committee is aware of the important function served

by counsel in these cases, the Committee permits the attorney to seek recovery

under both authorizations. The attorney, however, may keep the larger fee, but
must return the amount of the smaller fee to the claimant.

19


D. SOCIAL SECURITY CASES

It is clear that courts uniformly have held that when an attorney has received fees
under both the EAJA and the SSA for the “same work,” the attorney must reimburse the
claimant for the amount of the EAJA award, but not more than the amount of the SSA award.
Jackson v. Sec’y of the Dep’t of Health & Human Servs., No. 85-5180, 1989 WL 83493, at
*4 (E.D. Pa. July 21, 1989). However, the courts, including the United States Supreme
Court, have glossed over the proper interpretation of “same work.” See Gisbrecht, 535 U.S.
at 796 (stating, “the claimant’s attorney must ‘refun[d] to the claimant the amount of the
smaller fee,” but ignoring the term “for the same work”).

Typically, the issue of an EAJA award off-setting a SSA award arises when, upon
remand by one court after an initial unfavorable decision, the Administration awards benefits.
For example, in Hearn v. Barnhart, 262 F. Supp. 2d 1033, 1035 (N.D. Cal. 2003), the
claimant, who was represented by counsel, received a partially unfavorable decision from the
Administration after a hearing before an Administrative Law Judge. The claimant’s counsel,
on behalf of the claimant, filed a civil action in federal district court arguing for an earlier
onset date. Jd. The court remanded the case to the Administration for further proceedings
and awarded the claimant’s attorney’s fees under the EAJA. Jd. Upon remand, the
Administration ruled in favor of the claimant and awarded benefits. Jd. The Administration
set aside 25% of the claimant’s past-due benefits for the payment of attomey’s fees. Id. The

attorney then moved the same court for attorney’s fees pursuant to 42 U.S.C. § 406(b). Id.

13


awarded under the SSA. Therefore, the Court orders the Commissioner to pay
Petitioner Frederick J. Daley, Jr., fees pursuant to 42 U.S.C. § 406(b) and consistent
with this opinion.

SO ORDERED THIS 14th DAY OF MAY, 2004.

Merde, Ke hou

MORTON DENLOW
UNITED STATES MAGISTRATE JUDGE

Copies mailed to:

Frederick J. Daley, Jr. Kathryn A. Beverly
DALEY, DEBOFSKY & BRYANT SPECIAL ASSISTANT
One N. LaSalle Street, Suite 3800 UNITED STATES ATTORNEY
Chicago, IL 60602 200 West Adams
30" Floor
Counsel for Plaintiff Chicago, IL 60606

Counsel for Defendant

23



requires that the analysis begin with the language of the statute. Barnhart v. Sigmon Coal
Co., Inc., 534 U.S. 438, 450 (2002). A court must “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). The determination ceases if the
language at issue is unambiguous and there is a coherent and consistent statutory scheme.
Id. Whether statutory language is plain or ambiguous “is determined by reference to the
language itself, the specific context in which that language is used, and the broader context
of the statute as a whole.” Jd. at 341.

To interpret the language itself, the language must be given its most natural reading
and a commonsense view of its normal meaning. See Dole, 494 U.S. at 35-36. “{S]trict
construction of statutory language ‘is to be avoided when the result would be senseless or
clearly at odds with the evident purpose of the statute.’ ” United States v. Sanapaw, No. 03-
2786, 2004 WL 885723, at *2 (7th Cir. Apr. 27, 2004). When viewing the language within
its specific context, the words surrounding it should be considered, but a single sentence or
clause does not outweigh the law as a whole or its object and policy. Jd. When looking at
the broader context of the statute, the legislative history of the statute should be considered,
but absent a clearly expressed legislative intention to the contrary, the language must be
regarded as conclusive. Consumer Prod. Safety Comm’n v. GTE Sylvania, Inc., 447 U.S.

102, 108 (1980).


H.R. Rep. No, 99-120(I), at 20, reprinted in 1985 U.S.C.C.A.N. 132, 148-49. Thus, it is
clear that Congress made a choice to make the claimant the primary beneficiary of the EAJA
award by providing for the offset. Therefore, the Court holds that all EAJA awards granted
for work performed on a claim must off-set the SSA fees awarded for worked performed on
the same claim.

This result is consistent with the original purpose of the EAJA, which was to remove
any deterrence for individuals to defend themselves against unjustifiable actions of the
Government by allowing for the compensation of their advocates. Attorneys who do work
in the social security field and obtain EAJA fees may be entitled to keep those fees. This
provides an incentive for attorneys to undertake difficult cases even if they are not ultimately
successful on the merits because they may retain the EAJA fees. Furthermore, the attorneys
possibly could receive more than 25% of the amount of the claimant’s past-due benefits
when the EAJA fees exceed the SSA award. Congress was faced with the question of who
should benefit from an EAJA fee when a social security fee is also awarded in connection
with the same claim. The amendment to EAJA was intended to provide the claimant with
a credit for EAJA fees received by the attorney. Gisbrecht, 535 U.S. at 796. Thus, the
benefit of EAJA goes to the claimant.

Petitioner argues that interpreting “same work” as “same claim” adversely affects the
incentives for attorneys to take social security cases. When a court remands a social security

claim to the Commissioner under sentence four of 42 U.S.C. § 405(g), the civil action is

20


SSA fees while still potentially retaining more than 25% of the amount of past-due benefits.
Furthermore, Congress was aware of the possibility of diminishing returns for attorneys in
cases in which there are multiple appeals and remands because it acknowledged the
possibility of EAJA awards upon remand under exceptional circumstances. H.R. Rep. No.
99-120(1), at 19, reprinted in 1985 U.S.C.C.AN. 132, 148 (citing MacDonald, 552 F. Supp.
at 536 (awarding EAJA fees on remand because of the exceptional nature of the case).

Therefore, the Court finds that Petitioner must refund the entire amount of $14,853.00
in EAJA fees awarded to him against the $21,151.00 in SSA fees hereby granted by the
Court.

Ill, CONCLUSION

The Court awards Petitioner Frederick J. Daley, Jr., $21,151.00 in attorney’s fees
for work performed before this Court pursuant to § 206(b) of the Social Security Act,
42 U.S.C. § 406(b)(1). The Court further finds that the award is reasonable because it
is consistent with the Contract entered into between Petitioner and Plaintiff, it is
consistent with the 25% statutory cap for SSA fees, and the Commissioner has no
objection to the amount of the SSA award. Petitioner, however, shall refund both the
$5,000.00 and the $9,853.00 EAJA awards previously granted for this claim, pursuant

to § 206 of the EAJA, 28 U.S.C. § 2412, because they are for the same work as the fees

22


work to secure the joint remand before the court was entirely different from his work
performed at the BVA on remand and that as a matter of law the work before the BVA is not
and can not be considered the same work as that performed before the court. Jd. at 68.

The court rejected that argument, taking issue with the fact that the contingency
agreement did not provide for an offset of EAJA fees when a court remanded the case prior
to an award of benefits. Jd. at 76. The court found that there exists a proscription of double
payments for the same work, a policy divined from the legislative history of § 206 of the
EAJA, the language of which mirrors the FCAA § 506(c) language that creates the same
proscription in the context of veterans benefits. Jd. at 73. Thus, an attorney may not collect
and retain both an EAJA fee and a contingent fee for the same work on a veteran’s claim.
Id.

Over the objections of Judge Steinberg, who feared that the majority was reading
“same work” out of the statute, the court then concluded that “the representation of a
claimant in pursuit of a claim at all stages of the adjudication process is the ‘same work,’
regardless of the tribunal before which it is performed.” Jd. at 76. The court reached this
conclusion because the purpose of the EAJA is to remove any financial deterrents to
individuals defending themselves against unjustified government action. Id. at 75.
Additionally, the court found that because standing is granted to claimants to pursue an
EAJA cause of action, EAJA awards belong to a claimant and not to an attorney. Jd. The

purpose of the EAJA is to reimburse the claimant for fees paid out of the claimant’s benefits,

17


decline making an EAJA award upon a remand decision because the remand order does not
yet make the claimant a “prevailing party.” Vascera, 624 F. Supp. at 1200-01. There were,
however, two potential exceptions to the general rule. First, a claimant may be entitled to
EAJA fees when the civil suit, though resulting in a remand, “worked a systemic change
which redounded to the benefit of a large number or present and future persons.” Jd. at 1203-
04 (citing MacDonald, 552 F. Supp. at 356). Second, a claimant may be entitled to EAJA
fees when the remand resulting from a civil suit was for mere “housekeeping” purposes, such
that the Administration’s “liability for the benefits in issue has been effectively determined
in the judicial proceedings, though the court, in deference to the orderly management of the
administrative scheme, mandates a remand for, say, the calculation of the payments due.”
Id. at 1204 (citing, inter alia, McKenzie v. Heckler, 589 F. Supp. 1152 (N.D. Ill. 1984)).
Confusion also existed as to whether and to what extent attorney’s fees under both the
EAJA and § 406(b) could be awarded. The court in Meyers v. Heckler, 625 F. Supp. 228,
231 (S.D. Ohio 1985), explicitly explored the confusion. The concern was that granting
attorney’s fees under both the EAJA and the SSA seemed to effect double recovery. Jd.
There was, however, a fundamental difference between the two awards. Jd. Awards under
§ 406(b) come out of the claimant’s past-due benefits, while awards under the EAJA come
out of the public fisc. d. (citing Eustache v. Sec’y of Dep’t of Health & Human Servs., 601
F, Supp. 176, 178 (E.D.N.Y. 1985)), Furthermore, motions for awards under the EAJA are

made on behalf of the claimant by the attorney, while motions for awards under § 406(b) are



96. The combination of § 406(a) and § 406(b) can never exceed 25% of the retroactive
benefits. Jd. In fact, it is a criminal offense to collect or even to demand from a claimant
anything more than the authorized allocation of past-due benefits. 42 U.S.C. §§ 406(a)(5),
(b)(2); 20 C.F.R. §§ 404.1740-1799; Gisbrecht, 535 U.S. at 796. Essentially, the fees are to
be charged to the claimant, subject to the statutory maximum of 25% of the retroactive
benefits. Watford v. Heckler, 765 F.2d 1562, 1566 (11th Cir. 1985). The fees are not an
award against the government. Jd.
C. ATTORNEY’S FEES UNDER THE EQUAL ACCESS TO JUSTICE ACT

The EAJA, Pub. L. No. 96-481, Tit. II, 94 Stat. 2325, was enacted in 1980 for the
primary purpose of eliminating “the barriers that prohibit small businesses and individuals
from securing vindication of their rights in civil actions and administrative proceedings
brought by or against the Federal Government.” Scarborough v. Principi, 124 8. Ct. 1856,
1861 (2004). Thus, the EAJA ensures that certain individuals would not be “deterred from
seeking review of, or defending against, unjustified governmental action because of the
expense involved in securing the vindication of their rights.” H.R. Rep. No. 99-120(1), at 4
(1985), reprinted in 1985 U.S.C.C.A.N. 132, 132-133. Encouraging parties to vindicate their
rights is superior to the Government’s general interest in protecting the federal fisc.
Commissioner, INS v. Jean, 496 U.S. 154, 164-65 (1990).

The EAJA departs from the general rule that each litigant pays his or her own legal

fees. Scarborough, 124 S. Ct. at 1860. Under the EAJA, a claimant may be awarded fees


This case presents an issue of first impression in the Seventh Circuit on the meaning
of the term “same work” within the interplay between the SSA and the EAJA.
A. ATTORNEY’S FEES UNDER THE SOCIAL SECURITY ACT

Attorney’s fees for representing individuals in social security cases are governed by
42 U.S.C. § 406. Section 406(a) governs fees for representation in administrative
proceedings; § 406(b) controls fees for representation in federal district court. Gisbrecht v.
Barnhart, 535 U.S. 789, 794 (2002). For representation of a benefits claimant at the
administration level, an attorney may file a fee petition or a fee agreement. 42 U.S.C. §
406(a); 20 C.F.R. § 404.1725(b). As an alternative to fee petitions, the Social Security Act,
as amended in 1990, permits contingent-fee agreements filed with the agency in advance of
a ruling on the claim for benefits. 42 U.S.C. §§ 406(a)(2)-(4). There are limits on the
amounts that can be awarded. Jd. § 406(a)(2)(A)(ii).

For proceedings in court, Congress provided for fees in the event of a “judgment
favorable to a claimant.” Jd. § 406(b)(1)(A). As part of its judgment, a court may allow “a
reasonable fee . . . not in excess of 25 percent of the . . . past due benefits” awarded to the
claimant. /d. Benefit amounts figuring in the fee calculation are limited to those past-due.
Attorneys may not receive additional fees based on a claimant’s continuing entitlement to
benefits. Gisbrecht, 525 U.S. at 795.

The limits set out in § 406(a) and § 406(b) establish the exclusive method for

obtaining fees for successful representation of social security benefits claimants. Jd. at 795-


not to enhance the attorney’s fees to an amount above the fees contemplated in the
contingency agreement. Jd. Consequently, the court refused to consider the attorney’s
representation of the claimant before the BVA on remand as different “work” than that
performed before the court. The court reasoned that doing so would improperly allow the
EAJA fee to enhance the contingent-fee rather than properly allow the EAJA fee to
reimburse the claimant for the contingent fees paid from the claimant’s past-due benefits.
Id. at 76; see also Carpenter v. Principi, No. 00-2300, 2002 WL 31770013, at *2 (Vet. App.
Sept. 10, 2002) (upholding Carpenter v. Principi, 15 Vet. App. 64, 74-76 (2001)).

This Court agrees with the Carpenter court’s analysis of the term “same work.”
However, the difference between Carpenter and this case is that Carpenter did not involve
more than one EAJA award. Although this case involves two EAJA awards, the reasoning
in Carpenter applies.

F. THE MEANING OF “SAME WORK”
The term “same work” is ambiguous on its face. It is unclear whether the term refers

29 €¢,

to “same claim,” “same civil action,” or the “same” effort or activity directed toward a goal.
Even whether that goal is an over-arching goal or a very specific goal is unclear. The
ambiguity exists because the language does not indicate whether “work” should be read
narrowly so that an item by item comparison must be performed for all of the work done, or

whether “work” should be read broadly so as to include all of the work performed in

connection with a particular social security claim.

18


Whether the EAJA applied to civil litigation in the social security context was quickly
resolved by the courts. For example, the court in Ocasio v. Schweiker, 540 F. Supp. 1320,
1321 (S.D.N.Y. 1982), held that although “the EAJA does not apply to administrative
proceedings under the Social Security Act, it does cover civil actions to review social
security decisions of the [Social Security] Agency.” See also Berman v. Schweiker, 531 F.
Supp. 1149, 1153 (N.D. Ill. 1982) (holding that the EAJA applies to social security cases).
The court found that “(nJothing in the EAJA expressly excludes its application to social
security cases.” Ocasio, 540 F. Supp. at 1321. It supported its conclusion with comments
within the House Report and the House floor debates. Jd. (citing H.R. Rep. No. 1418, 96th
Cong,, 2d Sess. 12, reprinted in (1980) U.S.C.C.A.N. 4991; 17 Cong. Rec. H10,220 (Oct.
1, 1980)).

This resolution, however, led to confusion as to the meaning of “prevailing party”
under the EAJA. The question became whether a social security claimant could be a
prevailing party for the purposes of the EAJA when a district court remands the claim to the
Administration for further proceedings. See, e.g., MacDonald v. Schweiker, 553 F. Supp.
536, 539-40 (E.D.N.Y. 1982). The “contemporary legal context” at the time the EAJA
expired in 1984 is laid out in Vascera v. Heckler, 624 F. Supp. 1198 (D.R.I. 1986). When
the EAJA expired, a trilogy of cases, McGill v. Secretary of Health and Human Services, 712
F.2d 28 (2d Cir. 1983), Brown v. Secretary of Health and Human Services, 747 F.2d 878 (3d

Cir. 1984), and Cook v. Heckler, 751 F.2d 240 (8th Cir. 1984), held that courts should



« AQ 450(Rev. 5/85)Judgment in a Civil Case

United States District Court

Northern District of Mlinois
Eastern Division

Frances A. Kopulos JUDGMENT IN A CIVIL CASE
Vv. Case Number: 01 C 4881

Jo Anne Barnhart

Oo Jury Verdict. This action came before the Court for a trial by jury. The issues have been
tried and the jury rendered its verdict.

a Decision by Court. This action came to hearing before the Court. The issues have
been heard and a decision has been rendered.

IT IS HEREBY ORDERED AND ADJUDGED the the Court awards Petitioner Frederick J.
Daley, Jr., $21,151.00 in attorney fees for work performed before this Court pursuant to
Section 206(b) of the Social Security Act, 42 U.S.C. Section 406(b)(1). The Court further
finds that the award is reasonable because it is consistent with the Contract entered into
between Petitioner and Plaintiff, it is consistent with the 25% statutory cap of SSA fees, and
the Commissioner has no objection to the amount of SSA award, Petitioner, however, shall
refund both the $5,000.00 and the $9,853.00 EAJA awards previously granted for this claim
pursuant to Section 206 of the EAJA, 28 U.S.C. Section 2412, because they are for the same
work as the fees awarded under the SSA. Therefore, the Court orders the Commissioner to
pay Petitioner Frederick J. Daley, Jr. fees pursuant to 42 U.S.C. Section 406(b) consistent with
this Court’s opinion.

Michael W. Dobbins, Clerk of Court
(oy J
Date: 5/14/2004 V badXcw

Donna Kuempel, Depity/ Clerk



Minute Ordey Form (06/97)

United States District Court, Northern District of Dlinois

Name of Assigned Judge Morton Denlow Sitting Judge if Other
or Magistrate Judge than Assigned Judge
CASE NUMBER 01 C 4881 DATE 5/14/2004
CASE Frances A. Kopulos vs. Jo Anne B. Barnhart
TITLE

[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
of the motion being presented.]

MOTION:

DOCKET ENTRY:

qd) Qo Filed motion of [ use listing in “Motion” box above.]

(2) Oo Brief in support of motion due

(3) a Answer brief to motion due___. Reply to answer briefdue__

(4) a Ruling/Hearingon set for at

(5) ao Status hearing[held/continued to] [set for/re-set for]on__setfor___—_att

(6) oOo Pretrial conference{held/continued to] [set for/re-set for]on__—ssetfor__——sat_—s
(7) Oo Trial{set for/re-set for] on___— at.

(8) Oo [Bench/Jury trial] [Hearing] held/continued to at

(9) Oo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

COFRCP4(m) OLocal Rule 41.1 CFRCP41(a\(1)_ 0 FRCP41(a)(2).

(0) of (Other docket entry] Plaintiff’s petition for attorneys fees [33-1] is granted. Enter Memorandum Opinion
and Order. The Court awards Petitioner Frederick J. Daley, Jr., $21,151.00 in attorney fees for work performed
before this Court pursuant to Section 206(b) of the Social Security Act, 42 U.S.C. Section 406(b)(1). The Court
further finds that the award is reasonable because it is consistent with the Contract entered into between Petitioner
and Plaintiff, it is consistent with the 25% statutory cap of SSA fees, and the Commissioner has no objection to
the amount of SSA award. Petitioner, however, shall refund both the $5,000.00 and the $9,853.00 EAJA awards
previously granted for this claim pursuant to Section 206 of the EAJA, 28 U.S.C. Section 2412, because they are
for the same work as the fees awarded under the SSA. Therefore, the Court orders the Commissioner to pay
Petitioner Frederick J. Daley, Jr. fees pursuant to 42 U.S.C. Section 406(b) and consistent with this opinion.

(il) of [For further detail see order attached to the original minute order.]

No notices required, advised in open court.

No notices required, umber of notices,

o | Notices mailed by judge’s staff. MAY 17 2004

Nolified counsel by telephone. date dockeled

Docketing to mail notices.

Mail AO 450 form. deputy tials

Copy to judge/magistrate judge.
sivaroos

date mated notice
courtroom

DK deputy's
initials

DK6

Date/time received in ""”
central Clerk’s Office ‘tailing deputy initials



claimants, extended and amended the EAJA to permit attorneys to collect both EAJA awards
and SSA awards under certain circumstances. H.R. Rep. No. 99-120(1), at 4, 20 (1985),
reprinted in 1985 U.S.C.C.A.N. 132, 132, 149. The result was a harmonization of fees
payable by the Government under the EAJA with fees payable out of a claimant’s past-due
social security benefits under § 406(b) that permitted fee awards under both prescriptions so
long as the attorney refunds to the claimant the amount of the smaller fee. Gisbrecht, 535
US. at 796. The amendment to § 206 of the EAJA, which has not been codified, reads:
(b) — Section 206(b) of the Social Security Act (42 U.S.C. 406(b)(1)) shall

not prevent an award of fees and other expenses under section 2412(d)

of title 28, United States Code. Section 206(b)(2) of the Social Security

Act shall not apply with respect to any such award but only if, where

the claimant’s attorney receives fees for the same work under both

section 206(b) of that Act and section 2412(d) of title 28, United States

Code, the claimant’s attorney refunds to the claimant the amount of the

smaller fee.
Pub. L. No. 99-80, § 3, 99 Stat. 183 (1985) (emphasis added).

Attorneys who represent claimants in social security proceedings thus are permitted
to seek recovery under both the EAJA and the SSA and to keep the larger fee so long as the
smaller fee for the “same work” is refunded to the claimant. H.R. Rep. No, 99-120(0, at 20,
reprinted in 1985 U.S.C.C.A.N. 132, 149. Under the amendment, an attorney is precluded
from retaining both EAJA fees and SSA fees. Id. at 148.

“<Thus, an EAJA award offsets an award under Section 406(b), so that the [amount
of the total past-due benefits the claimant actually receives] will be increased by the. . .

ony

EAJA award up to the point the claimant receives 100 percent of the past-due benefits.

ll


made by the attorney on his or her own behalf “against” the claimant. Jd. Accordingly, most
courts concluded that “any funds awarded pursuant to the EAJA serve as a reimbursement
to the claimant for fees paid out of his or her disability award to his or her counsel.” Jd.; see
also Steffy v. Heckler, No. 83 C 3319, 1985 WL 1899, at *1-2 (N.D. Ill. June 17, 1985);
Ouellette v. Heckler, No. 84-0129-P, 1984 WL 2214, at *2 (D. Me. Nov. 28, 1984); cf
Taylor v. Heckler, 608 F. Supp. 1255 (D.N.J. 1985) (holding that lawyers must proceed under
the EAJA where appropriate rather than under the SSA alone so as not to create situations
of conflicts with clients). Contra Guthrie v. Schweiker, 718 F.2d 104, 108 & n.11 (4th Cir.
1983) (granting EAJA fees to a social security claimant, but noting that the attorney
“properly has disclaimed any intention to seek a double award of attorney’s fees for work in
the courts under the EAJA and 42 U.S.C. § 406(b)(1)”). The Meyers court observed,
however, that although the maximum amount typically awarded under § 406(b) usually far
exceeds the maximum amount typically awarded under the EAJA for the same case, a
problem arises when the opposite is true because 42 U.S.C. § 406(b)(2) prohibits an attorney
from collecting more than the 25% of the claimant’s past-due benefits under penalty of a
misdemeanor. 625 F. Supp. at 231 n.4. The question, therefore, was whether an attorney
would be in jeopardy of criminal prosecution if he or she accepted an EAJA fee amount
greater than the 25% cap mandated in § 406(b)(1). Jd.

It was within this “contemporary legal context” that the EAJA expired in 1984.

Congress, recognizing the important function served by attorneys for social security

10


payable by the United States if the Government’s position in the litigation was not
“substantially justified” and if such award would not be unjust. 28 U.S.C. § 2412(d)(1)(A).
Although the Government’s various positions in litigation may be more or less
justified, the EAJA treats a case “as an inclusive whole, rather than as atomized line-items.”
Jean, 496 U.S. at 161-62. In cases in which “administrative proceedings are intimately tied
to the resolution of the judicial action and necessary to the attainment of the results Congress
sought to promote by providing for fees, they should be considered part and parcel of the
action for which fees may be awarded.” Sullivan v. Hudson, 490 U.S. 877, 888 (1989).
D. 1985 AMENDMENT TO THE EAJA, PUB. L. 99-80: FROM CONFUSION TO
THE CREATION OF THE CURRENT INTERPLAY BETWEEN THE EAJA
AND THE SSA
Initially, the EAJA was adopted for a three-year trial period. Pub. L. 96-481, § 204(c),
94 Stat. 2321 (1980). From its inception, the EAJA did not apply to legal representation
before the Social Security Administration. 131 Cong. Rec. $9991-02 (July 24, 1985)
(statement of Sen. Heflin). However, several questions arose regarding the application of
the EAJA to civil litigation in social security cases. Among the issues were (1) whether the
EAJA applied to civil litigation in the social security context; (2) whether a social security
claimant could be a prevailing party for the purposes of the EAJA when a district court

remands the claim to the Administration for further proceedings; and (3) whether and to what

extent attorney’s fees under both the EAJA and § 406(b) could be awarded.


terminated before that court, which does not retain jurisdiction, and any subsequent review
of the Commissioner’s final decision results in the filing of a new civil action. Sullivan v.
Finkelstein, 110 8, Ct. 2658, 2664 (1990). Therefore, if'a social security claim requires the
filing of multiple civil actions before its ultimate resolution (a circumstance that is not
outside the realm of possibility, see Rohan v. Barnhart, No. 03 C 3029, 2004 USS. Dist.
LEXIS 2871 (N.D. Ill. Feb. 24, 2004) (a social security claim requiring three separate federal
cases and one federal appeal)), then the rate of the attorney’s compensation is reduced each
time.

Although the Court acknowledges Petitioner’s concerns, such a result is part of the
risk knowingly undertaken by the attorney. Moreover, the Court is bound by the intent of
Congress. Petitioner’s concerns focus on the effect upon attorneys of defining “same work”
as “same claim.” These concerns, however, are misplaced because the intent of the EAJA
focuses on benefitting claimants over attorneys. When it amended the EAJA in 1985,
Congress conferred a benefit on attorneys by protecting them from criminal sanctions when
their recovery under the EAJA exceeded the 25% maximum recovery permitted under
§ 406(b) of the SSA. Congress directly addressed this concern with the amendment to EAJA,
indicating that the ramifications of § 406(b)(2) are avoided if “the claimant’s attorney refunds
to the claimant that amount of the smaller fee.” Pub. L. No. 99-80, § 3, 99 Stat. 183 (1985);
see also Meyers, 625 F. Supp. at 228. The benefit to attorneys is clear: they can avoid

criminal sanctions by refunding to their clients the smaller amount of the EAJA fees or the

21


Petitioner succeeded in securing a remand from this Court, which ordered further
proceedings because the ALJ made an improper credibility determination. Kopulos y.
Barnhart, 215 F. Supp. 2d 996 (N.D. Ill. 2002). For his work before this Court, Petitioner
requested EAJA fees in the amount of $9,906.38. Of the requested amount, Petitioner was
awarded $5,000.00 in EAJA fees, pursuant to a settlement worked out between Petitioner and
the Commissioner. Kopulos v. Barnhart, 01 C 4881 (N.D. Ill. minute order entered Nov. 14,
2002).

Following the second remand, the ALJ found Plaintiff and her children eligible for
social security benefits commencing March 1, 1992, in the amount of $84,604.00 in past-due
benefits and $720.00 a month prospectively. The Commissioner has notified Plaintiff that
she has withheld $21,151.00, that is 25% of those past-due benefits, for direct payment of
any approved attorney fee under the SSA. Petitioner has agreed to refund the $5,000.00
EAJA award granted by this Court. The Commissioner, however, submits that Petitioner
should also refund the additional $9,853.00 EAJA award granted as a result of the first
remand in 1999. The question is whether the first EAJA award in this claim was granted for
the “same work” as the SSA fees being requested in this petition.

il. LEGAL ANALYSIS
A. STATUTORY CONSTRUCTION STANDARDS
On a question of statutory construction, a court must determine congressional intent.

Dole v. United Steel Workers of Am., 494 U.S. 26, 35 (1990). Proper statutory construction


at 1034. The court awarded the SSA fees. Jd. at 1038. The parties did not dispute that the
SSA award required an offset by the amount of the EAJA award. Jd. The court, without
discussing whether the two awards were for the “same work,” ordered the offset. Id. (citing
28 U.S.C. § 2412; Gisbrecht, 122 S. Ct. 1817, 1822 (2002)).

Likewise, in a case factually similar to this case, the court, without determining what
constitutes “same work” and without a dispute amongst the parties, ordered that previously
awarded EAJA fees must off-set an SSA award under § 406(b). In Roark v. Barnhart, 221
F, Supp. 2d 1020, 1021 (W.D. Mo. 2002), the claimant, who was represented by counsel, was
denied disability benefits and filed a civil action before a federal district court. The judge
in that civil action remanded the case and awarded EAJA fees. Jd. On remand, the
Administration once again denied the claimant’s benefits. Jd. The claimant then filed a civil
action in federal court before a different judge. Id. The second district judge reversed the
Administration’s decision and remanded for an award of benefits. Jd. That judge also
awarded additional EAJA fees. Jd. The claimant’s counsel then moved the court for
attorney’s fees pursuant to 42 U.S.C. § 406(b). Jd. The court awarded the SSA fees for the
attorney’s work and off-set those fees by the total amount of both EAJA fees previously
awarded for the attorney’s work. Jd. at 1026. The court did not explicitly discuss the
meaning of “same work” but rather made a general statement that an EAJA award off-sets

an award under § 406(b), to which neither party objected. Jd. at 1022.

14



and recognizing the proscription against double-payment for the “same work,” those courts
found that an attorney generally may retain an entire contingency-fee amount if the
representation before the Board of Veterans’ Appeals (“BVA”) subsequent to the attorney’s
work before the court involves obtaining more relief from the BVA than from the court. Id.

The Court of Appeals for Veterans Claims in Carpenter v. Principi, 15 Vet. App. 64,
74-76 (2001), appeal dismissed 327 F.3d 1371 (Fed. Cir. 2003), overruled both Shaw and
Fritz, finding that the interpretation of the term “same work” in those cases was too narrow
and left open the opportunity for subverting the purpose of the EAJA. In Carpenter, the
claimant’s attorney performed work before the Veterans Administration (“VA”) on behalf
of the claimant, securing benefits for the claimant and requesting reconsideration of an earlier
denial on the basis of clear and unmistakable error. Jd. at 66-67. When the VA determined
that there was no clear and unmistakable error and the BVA affirmed, claimant’s attorney
appealed the decision to the Court of Appeals for Veterans Claims, which granted the parties’
joint motion for remand and awarded EAJA fees. Id. at 67-68. On remand, the VA awarded
the claimant past-due benefits. Jd. at 68. The BVA, however, refused to allow the attorney
to retain the EAJA award for work performed before the court in addition to the fees to be
awarded under the contingency agreement entered into between the attorney and the
claimant, which stated that if the court remands the case no offset of EAJA fees will be made
against the contingent fee arising from a successful recovery of past-due benefits. Jd. at 67-

69. The attorney appealed the BVA’s refusal to award both sets of fees, arguing that his

16



The first EAJA fee totaled $9,853.00. The second EAJA fee totaled $5,000.00. Petitioner
now petitions for an interim SSA award of $21,151.00. Petitioner contends that he must
refund only $5,000.00 in EAJA fees against the SSA award. Defendant Jo Anne B. Barnhart,
Commissioner of Social Security (“Commissioner”), contends that Petitioner must refund
$14,853.00, the total amount of EAJA fees awarded throughout the existence of this claim.
For the following reasons, this Court grants Petitioner’s petition for fees in the amount of
$21,151.00, but holds that a $14,853.00 refund to Plaintiff is required.
I. BACKGROUND FACTS

Plaintiff applied for disability insurance benefits (“DIB”) in 1994. Petitioner has
represented Plaintiff throughout the entire course of the proceedings. Def. Resp. at 1.
Plaintiff entered into a Social Security Contingent Fee Contract (the “Contract”) with
Petitioner. Pet. Ex. A.

In 1999, after administrative denials of her DIB application, Petitioner secured a
remand order from the district court solely for the Administrative Law Judge (“ALJ”) to
consider the findings of state agency physicians. Kopulos v. Apfel, No. 98 C 4115, 1999 WL
33251456, at *1 (N.D. Ill. Aug. 4, 1999). For work performed by Petitioner in that action,
the district court awarded $9,853.00 pursuant to the EAJA. Kopulos v. Apfel, No. 98 C 4115,
1999 WL 1565201, at *1-3 (N.D. Ill. Nov. 15, 1999).

Following that remand, in 2001 a different ALJ conducted a hearing and found

Plaintiff ineligible for DIB. Plaintiff then filed the present civil action before this Court.


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
FRANCES A. KOPULOS, ) CHETED
Plaintiff, } Case No. 01 C 4881 MAY 17 2004
vy. } Magistrate Judge Morton Denlow
JO ANNE B. BARNHART, ‘
Commissioner of Social Security, )
Defendant. }

MEMORANDUM OPINION AND ORDER

This case arises at the intersection of the Equal Access to Justice Act (“EAJA”) and
the Social Security Act (“SSA”). Caught at the crossroads of these two important pieces of
legislation are those attorneys who sacrifice the greater monetary gains available in certain
areas of the law in order to advocate on behalf of those less fortunate both in wealth and in
health. The EAJA was amended in 1985 to prevent claimants’ attorneys from receiving a
double recovery for the “same work.” Consequently, an attorney must refund EAJA fees
against fees received under the SSA for the “same work.” The issue presented is to define
the meaning of the term “same work.”

This issue is raised in the Petition for Attorney Fees Pursuant to § 206(b)(1) of the
SSA, 42 U.S.C. § 406(b)(1), filed by Petitioner Frederick J. Daley, Jr. (“Petitioner”), the
attorney for Plaintiff Frances A. Kopulos (‘Plaintiff’), requesting $21,151.00 in fees.

Petitioner received two EAJA fees in connection with the prosecution of Plaintiff's claim.

2


Gisbrecht, 535 U.S. at 796 (alterations in original). The intent of this amendment was to
prevent “double dipping” because it deprives claimants of the benefits intended by the EAJA.
H.R. Rep. No. 99-120(1), at 19-20, reprinted in 1985 U.S.C.C.A.N. 132, 148-49, Thus,
Congress sought to deter the Government from substantially unjustified litigation, to
encourage individuals to defend against such litigation should it arise, and to reward
attorneys for representing claimants against such litigation while simultaneously benefitting
the claimant.

The claimant is to be the primary beneficiary of the EAJA award. Thus, ifa claimant
is entitled to past-due benefits in the amount of $10,000, the attorney under the SSA would
be entitled to 25% of that amount, or $2,500, and the claimant would receive $7,500 in net
benefits. However, if the attorney had secured an EAJA award of $1,000 “for the same
work,” the claimant would receive the benefit of that award in the form of a credit, which
would be paid by the Government, against the $2,500 owed to the attorney. Therefore, the
attorney would net $2,500 and the claimant would net $8,500 (as opposed to $7,500).
Similarly, if the EAJA award had been $3,000, the attorney would net the entire $3,000 and
the claimant would net the entire $10,000. See Kimball v. Shalala, 826 F. Supp. 573, 578 (D.
Me. 1993). The cap on SSA awards under § 406(b)(1) is not a ceiling on the amounts of

attorney’s fees that can be awarded under the EAJA. Watford, 765 F.2d at 1564.

12


Consequently, these cases create the presumption that the EAJA award and the SSA
fee granted in the same claim arise from the “same work.” However, the term “same work”
has not been defined explicitly within the social security context.

E. VETERANS’ CLAIMS CASES

The term “same work” has been defined within the context of veterans claims, and
that definition supports the conclusion that the entire EAJA fee should be off-set against the
award of fees arising out of the same social security claim. In the context of Veterans
Claims, attorneys and claimants enter into fee agreements requiring contingent-fee payments
to the attorneys out of past-due benefits as compensation for the work performed in securing
those past-due benefits. As in the social security context, attorneys handling veterans’ claims
in federal court are entitled to EAJA awards, However, § 506(c) of the Federal Courts
Administration Act of 1992 (“FCAA”), which employs substantially the same language as
§ 206 of the EAJA, requires that, when an attorney receives fees for the “same work” under
both a qualifying fee arrangement and the EAJA, the EAJA fees go first to reimburse the
claimant what was paid under the fee agreement. Pub. L. No. 102-572, Tit. V, § 506(c), 106
Stat. 4506, 4513. The interpretation of these statutes has been the subject of vigorous debate
and the conclusions reached have changed over time.

Initially, the Court of Appeals for Veterans Claims held that'“same work” does not
mean “same claim” in Shaw v. Gober, 10 Vet. App. 498, 504 (1997), and in Fritz v. West,

13 Vet. App. 190, 194 (1999), After reviewing the legislative history of § 206 of the EAJA

4S