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SCOTUS: EAJA Attorney Fee Award Payable to Litigant, Not Attorney

June 15, 2010 | Posted in : Fee Award, Fee Issues on Appeal, Fee Jurisprudence, Fee Shifting, Prevailing Party Issues

A recent NLJ story, “High Court Lets Government Take Fee Awards for Clients’ Debts” reports that the U.S. Supreme Court, in an unanimous decision, ruled in Astrue v. Ratliff (No. 08-1322) that attorney fee awards under the Equal Access to Justice Act (EAJA) are payable to the client, not the attorney, and can be offset to pay a client’s debt to the federal government.  This decision will affect primarily lawyers and law clinics who successfully represent clients seeking Social Security or veterans benefits who earn attorney fee awards under EAJA.

In Astrue, Justice Clarence Thomas, writing for the Court, rejected Ratliff’s argument that language in the EAJA supported payment of attorney fees directly to the prevailing party’s attorney, thus protecting the fees from a government offset.  “We have long held that the term ‘prevailing party’ in fee statutes is a ‘term of art’ that refers to the prevailing litigant,” wrote Thomas, adding that other sections in the fee-shifting law underscore the “usual and settled” meaning of prevailing party.  Although it is true, he said that the Social Security Act makes attorney fee awards under the law directly payable to a prevailing party’s attorney, Thomas wrote, that contrasts with the EAJA and shows “that Congress knows how to make fee awards payable directly to attorneys where it desires to do so.”

In her concurrence, Justice Sotomayor expressed concern that the Court’s ruling would undermine the purpose of EAJA, whose attorney 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.