An astute reader who happens to be a practicing attorney (and who occasionally advertises on this website) alerted us to an issue that will interest others in the federal community.
As with many complex legal issues, there are various nuances, twists and turns as to when and how a law is to be applied and which parties will win and which will lose in the final analysis. The Equal Access to Justice Act (EAJA) is no exception. In general, this law provides for an award of reasonable attorney fees and expenses to eligible prevailing parties (other than the United States) in agency adjudications. Under the act, the prevailing party is entitled to an award unless the adjudicative officer of the agency finds that the position of the agency as a party to the proceedings was substantially justified or that special circumstances make an award unjust.
This law has its supporters and detractors. To be cynical, disagreements or statements of position for or against it may reflect a potential for economic gain or loss more than a philosophical statement of position.
The law has been around for some time and has generally been supported by lawmakers. President Ronald Reagan, when signing a law renewing the law, stated in 1985 that “I support this important program that helps small businesses and individual citizens fight faulty government actions by paying attorneys’ fees in court cases or adversarial agency proceedings where the small business or individual citizen has prevailed and where the government action or position in the litigation was not substantially justified.” There are voluminous regulations issued by federal agencies implementing the law as it applies to the missions of different agencies.
But there is now a new twist. Who should actually get the money awarded under the EAJA?
In some cases, the money actually goes back to the government even if the government did not win the case. Here’s an example.
In Dewey v. Astrue (Michael Astrue is the Commissioner of the Social Security Administration), the court considered the issue of whether it should set aside an order “which granted plaintiff’s motion for payment of attorney’s fees and expenses in the amount of $7500.00 and costs in the amount of $150.00.” There was also a motion to the court “that the EAJA fee should be made payable to plaintiff’s attorney.”
The Treasury Department issued a check for $7500.00 directly to the plaintiff on January 22, 2007 rather than to the attorney in the case. But, because of an outstanding delinquent debt to Child Support Enforcement, the Department of Treasury reduced the check by $7500.00. What the bureaucratic sounding legalese really means is that the final result was that no money was paid out by the government because of an outstanding debt. In effect, the federal government kept the money.
The crux of the decision that will be the most important to some readers is that the fee awarded under the EAJA act was not paid directly to the lawyer but to the “prevailing party.” And, since the “prevailing party” had not paid a debt, did not get the money. If the money had been paid directly to the lawyer, the attorney representing his client would presumably have been paid and Uncle Sam would not have kept the $7500.
The court in Dewey wrote that “Under the EAJA statute, the fees and expenses awarded under the statute properly belongs to a “prevailing party,” as opposed to the prevailing party’s attorney….The Federal Circuit has also addressed the issue of payment of fees under the EAJA: “[A]s the Statute requires, any fee award is made to the ‘prevailing party,’ not the attorney. Thus [the prevailing party’s] attorney could not directly claim or be entitled to the award; it had to be requested on behalf of the party.” Phillips v. General Servs. Admin., 924 F.2d 1577, 1582 (Fed.
Cir. 1991)” And, said the court, “Plaintiff cites no precedent or statutory authority for the court to conclude that the offset should be set aside….”
In this case, the result was that the attorney did not get paid under the EAJA. And, ruled that court, that result is not contrary to law. The SSA Commissioner is not liable “for the amount of the administrative offset on the basis that the underlying obligation, represented by the payment before the administrative offset was taken, was not satisfied.”
The EAJA is applicable to agencies throughout government. It remains to be seen how the evolving change in applying the law will impact the federal system. No doubt, most lawyers representing clients who prevail in a legal proceeding would prefer to have the fees paid directly to the attorney who has done the work to win the case. And, as in the Dewey case, many in government would like to have debts repaid by the winner in a legal proceeding rather than have the money go to the lawyer representing the person.
If money awarded under the EAJA is paid directly to the winning party and not to the attorney, and if debts can be withheld from the fee, there is a stronger likelihood the attorney will not get paid for the time and effort spent on a case. That could mean that fewer cases are taken into court because there is a bigger risk that lawyers will not get paid–even if they win a case.
To some readers, fewer lawsuits and less money for lawyers is a favorable result, especially if the person being represented already owes money to the government and the government gets some of that money back. Other readers will conclude this is not what the law intended because it will result in a lawyer not taking a case when the person with a complaint can’t afford to pay the necessary legal fees.
How it will play out in the various legal proceedings in which the federal government is involved, and who wil get more and who will get less in legal fights over fee payment, remains to be seen.