Fourth Circuit Concludes Fees Are Payable to Claimant.
Here is an interesting issue that has drawn a split among federal courts of appeals: whether attorney’s fees payable under the Equal Access to Justice Act, 28 U.S.C. section 2812 (EAJA), in Social Security Act benefit cases go to the claimant or the attorney. The importance of the answer to this issue may have a wide-ranging impact on the claimant--if the fees go to the claimant, the government can take the position they are subject to administrative offset for the collection of other debts (such as child support or state income taxes). See 31 U.S.C. section 3716.
The Fourth Circuit, in Stephens v. Astrue, 565 F.3d 131 (4th Cir. 2009), decided that the plain meaning of section 2412(d)(1)(A) of the EAJA shows that fees go to the “prevailing party,” namely the claimant. It observed that, in other areas, Congress has directed payments of fee awards to attorneys, when this result was desired. (See SSA section 206(b).) A contrary award to an attorney by a magistrate judge was vacated.
Stephens is in conflict with decisions to the contrary in the Sixth, Eighth, and Eleventh Circuits, which hold that attorney’s fees are payable directly to the attorney.
This issue appears one that may be reviewed and resolved by the U.S. Supreme Court at some point in time, given that the result in Stephens might provide a disincentive for attorneys to take on SSA benefit cases if fees go to the claimant and could be offset by other debts in entirety.