×
You have 2 more free articles available this month. Subscribe today.
U.S. Supreme Court Holds Government May Offset Attorney Fees to Collect Litigant’s Debt
On June 14, 2010, the U.S. Supreme Court held that “fees and other expenses” awarded to a prevailing party are “payable to the litigant and ... therefore subject to a Government offset to satisfy a pre-existing debt that the litigant owes the United States.”
After attorney Catherine Ratliff prevailed in a Social Security benefits claim for her client, she moved for an attorney fee award of $2,112.60. The unopposed motion was granted, but before the fees were paid federal officials discovered that Ratliff’s client owed the United States a debt that predated the award.
The government then used its statutory authority to impose an administrative offset to recover the debt from the attorney fee award. The district court held Ratliff lacked standing to intervene to challenge the proposed offset. On appeal, the Eighth Circuit accepted Ratliff’s argument that attorney fees awarded under the Equal Access to Justice Act (EAJA) are awarded to a prevailing party’s lawyer and may not be used to offset or otherwise satisfy a litigant’s federal debt.
In rejecting that ruling, the Supreme Court found the plain language of 28 U.S.C. § 2412(d)(1)(A) does the opposite – “it ‘awards’ the fees to the litigant, and thus subjects them to a federal administrative offset if the litigant has outstanding federal debts.”
While the Social Security Act allows for direct payments to attorneys, subsection (d)(1)(A) contains no such language. The Court noted that the textual language of that subsection is virtually identical to 42 U.S.C. § 1988, the law that provides for attorney fees and costs in civil rights cases.
It was noted that until 2006, the government “frequently paid EAJA fees in Social Security cases directly to attorneys.” The policies for the administrative offset program changed in January 2005 to prohibit such payments when a litigant has an existing debt. Nonetheless, the Supreme Court found the plain language of the statute imposed duties on the federal government to collect the debt.
The Eighth Circuit’s opinion was therefore reversed and the case remanded for further proceedings. This ruling may affect prisoners’ civil rights cases when they are represented by counsel and have pre-existing debts owed to the federal government. See: Astrue v. Ratliff, 130 S.Ct. 2521 (2010).
After attorney Catherine Ratliff prevailed in a Social Security benefits claim for her client, she moved for an attorney fee award of $2,112.60. The unopposed motion was granted, but before the fees were paid federal officials discovered that Ratliff’s client owed the United States a debt that predated the award.
The government then used its statutory authority to impose an administrative offset to recover the debt from the attorney fee award. The district court held Ratliff lacked standing to intervene to challenge the proposed offset. On appeal, the Eighth Circuit accepted Ratliff’s argument that attorney fees awarded under the Equal Access to Justice Act (EAJA) are awarded to a prevailing party’s lawyer and may not be used to offset or otherwise satisfy a litigant’s federal debt.
In rejecting that ruling, the Supreme Court found the plain language of 28 U.S.C. § 2412(d)(1)(A) does the opposite – “it ‘awards’ the fees to the litigant, and thus subjects them to a federal administrative offset if the litigant has outstanding federal debts.”
While the Social Security Act allows for direct payments to attorneys, subsection (d)(1)(A) contains no such language. The Court noted that the textual language of that subsection is virtually identical to 42 U.S.C. § 1988, the law that provides for attorney fees and costs in civil rights cases.
It was noted that until 2006, the government “frequently paid EAJA fees in Social Security cases directly to attorneys.” The policies for the administrative offset program changed in January 2005 to prohibit such payments when a litigant has an existing debt. Nonetheless, the Supreme Court found the plain language of the statute imposed duties on the federal government to collect the debt.
The Eighth Circuit’s opinion was therefore reversed and the case remanded for further proceedings. This ruling may affect prisoners’ civil rights cases when they are represented by counsel and have pre-existing debts owed to the federal government. See: Astrue v. Ratliff, 130 S.Ct. 2521 (2010).
As a digital subscriber to Prison Legal News, you can access full text and downloads for this and other premium content.
Already a subscriber? Login
Related legal case
Astrue v. Ratliff
| Year | 2010 |
|---|---|
| Cite | 130 S.Ct. 2521 (2010) |
| Level | Supreme Court |
| Injunction Status | N/A |