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Supreme Court upholds use of attorney's fees to offset debt to government

The US Supreme Court [official website; JURIST news archive] on Monday ruled [opinion, PDF] unanimously in Astrue v. Ratliff [Cornell LII backgrounder; JURIST report] that an award of attorney's fees and expenses under the Equal Access to Justice Act (EAJA) [28 USC § 2412] is payable to the prevailing party rather than to the party's attorneys and can therefore be used to satisfy a preexisting debt owed to the government. The US Court of Appeals for the Eighth Circuit ruled [opinion, PDF] that the fees are awarded to the attorneys, shielding them from government debt offset. Justice Clarence Thomas, delivering the opinion of the court, reversed the circuit court's ruling, holding that the term "prevailing party" under EAJA clearly refers to the litigant through both statutory provisions and practice:

Nothing in EAJA contradicts this Court's longstanding view that the term "prevailing party" in attorney's fees statutes is a "term of art" that refers to the prevailing litigant. Congress knows how to create a direct fee requirement where it desires to do so. ... [T]he Court is reluctant to interpret [EAJA] to contain a direct fee requirement absent clear textual evidence that such a requirement applies. Such evidence is not supplied by ... EAJA. ...The fact that the Government, until 2006, frequently paid EAJA fees awards directly to attorneys in [social security] cases in which the prevailing party had assigned the attorney her rights in the award does not alter the Court's interpretation of the Act's fees provision. That some such cases involved a prevailing party with outstanding federal debts is unsurprising, given that it was not until 2005 that the Treasury Department's Offset Program was modified to require offsets against attorney's fees awards. And, ... the Government has since discontinued the direct payment practice except in cases where the plaintiff does not owe a federal debt and has assigned her right to fees to the attorney.
Justice Sonia Sotomayor filed a concurrence, joined by Justices John Paul Stevens and Ruth Bader Ginsburg.

The case was file by Catherine Ratliff, a lawyer who represented Ruby Kills Ree in a successful suit against the US Social Security Administration for Social Security benefits. Ratliff was awarded fees by the court under EAJA, but the government did not give her the full amount of fees owed. Instead, the government reduced the award to offset debts owed by the her client to the federal government. Ratliff filed suit claiming that the reduced fee were an illegal seizure under the Fourth Amendment [text].

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