The Equal Access to Justice Act (EAJA) was enacted by Congress to improve access to the courts for small business and some individuals by paying their attorneys' fees when the federal government is determined to have acted unreasonably. The EAJA allows attorneys’ fees and costs only when the government is found to have acted unreasonably.
The EAJA allows private parties of modest means to recover the costs of litigation, which they might not otherwise be able to do, and therefore without which they would not likely be able to challenge unreasonable government actions. This is a departure from the usual practice in American law, which dictates that each party bears its costs of litigation.
But recently the federal government (Department of the Treasury) began seizing the EAJA attorney fee awards to pay back taxes and other federal debts owed by the party disputing a denial of Supplemental Security Income (SSI) or Social Security benefits.
The Commissioner of Social Security found Ruby Willow Kills Ree entitled to XVI Supplemental Security Income (SSI) disability benefits, based on diabetes, arthritis, reactive airway disease and other illnesses. Ree hired Catherine Ratliff, who sued the Commissioner on Ree's behalf in federal district court alleging that Ree was entitled to additional benefits.
The district court ruled that Ree was entitled to two months’ additional benefits. Pursuant to the EAJA, Ratliff moved for attorneys’ fees in the amount of $2,112.60. The Commissioner did not oppose the motion, and the district court entered judgment accordingly. Two weeks later, the Department of the Treasury wrote Kills Ree that it had taken the entire amount to apply to an unrelated tax debt that Ree owed the federal government, leaving her attorney with nothing.
Federal law makes it illegal for an attorney who represents a client in a Social Security case in federal court to charge or receive a fee, except in two circumstances. One is if the court awards an EAJA fee, to be paid by the Commissioner. The other is if the plaintiff wins benefits, either awarded by the court, or after a court remand; in such cases, the Commissioner can pay the attorney up to 25 percent of the plaintiff’s past-due benefits under the Social Security Act. An attorney cannot receive fees under both the EAJA and the Social Security Act. For SSI claimants, it is preferable that their attorney be paid an EAJA fee since the fee is not taken from their award.
Ratliff filed suit and it came to the U.S. Supreme Court to determine whether or not EAJA attorney fee awards may be retained by the federal government to pay back taxes and other debts owed to the government by the party receiving the award.
AARP, along with other legal services providers, joined the National Organization of Social Security Claimants' Representatives in filing a “friend of the court” brief in Astrue v. Ratliff.
The brief pointed out that allowing the federal government to seize EAJA fees is counter to the explicit language as well as the intent of the EAJA. Designed to provide people the ability to attract and secure competent legal help, the EAJA would be eviscerated by an interpretation that withheld compensation of that help. “Congress never intended the EAJA to provide a way for the Government to collect debts it is owed, but intended it to provide attorney’s fees and costs to make it easier for individuals harmed by unjustified Government actions to challenge those actions,” argued the brief.
The brief pointed out that if the government was allowed to keep the fees to pay unrelated debts and attorneys had no assurance of collecting their fee, as a practical matter most attorneys would stop taking indigent people’s SSI and other critical benefit cases. If these fees go unpaid, it will become increasingly difficult for poor people to challenge the denial of SSI and Social Security benefits.
The majority of the Court held that court-awarded EAJA fees belong to litigants and not their attorneys. As a result, the government could seize attorneys' fees to pay back taxes and other federal debts.
Justice Sotomayor in her concurrence (joined by Justices Stevens and Ginsburg) agreed with the majority’s narrow statutory construction based on the plain language of the statute and precedents, but noted that she believed that Congress intended a broader reading — an intent Congress did not incorporate in the language of the statute. Citing heavily from the brief filed by AARP and others, she articulated the real-life effects of the ruling.
“Today’s decision will make it more difficult for the neediest litigants to find attorneys to represent them in cases against the Government,” she wrote. “While I join the Court’s opinion and agree with its textual analysis … the practical effect of our decision severely undermines the EAJA’s estimable aim,” and she invited Congress to correct the result.
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