SCOTUS Attorney Fee-shifting Case Could Have Ramifications for Legal Aid Offices that Sue Government Entities

[2/25/10 Update: the Pennsylvania Legal Aid Network, one of the signatories to an amicus brief in Astrue v. Ratliff,  has blogged about the Supreme Court argument.]

Yesterday, the National Law Journal reports, the Supreme Court heard arguments in Astrue v. Ratliff, a case that asks, essentially, whether attorney fees that are awarded through the Equal Access to Justice Act to a party that prevails in suing the government should go directly to the client or to their attorney in a circumstance when the client owes an unrelated debt to the government, which the government tries to recoup through the EAJA award.  This article aptly summarizes the arguments, but does not focus on a potential side-effect of a ruling – the fallout for public interest attorneys who often represent, for instance, social security claimants in appeals at no charge and who rely on EAJA attorney fees to finance their litigation costs.

What happened in Astrue is that a woman in South Dakota challenged a denial of benefits by the Social Security Administration.  She prevailed – with the assistance of her attorney, Ratliff – which meant that under the circumstances of the case not only would she be eligible for benefits, but that the government was obligated under the EAJA to relinquish attorney fees to the “prevailing party.”  But when it came time for the government to award attorney fees under the EAJA, rather than giving the fees to the attorney, Ratliff, the government said that the fees go to the client herself.  And this, in turn, meant that the government could recoup from that fee amount an unrelated debt owed by the client to the government.  Ratliff, needless to say, disagreed.

The case ultimately wound its way to the Supreme Court to clear up a circuit split on who – the client or their attorney – should receive attorneys fees under EAJA in these circumstances.  A handful of public interest organizations – which rely on EAJA fee awards to finance their activities – filed as Amici on the side of Ratliff.  (As noted above, some public interest organizations routinely sue the government on behalf of low-income clients whom they represent at no charge.  The public interest lawyers rely on EAJA fee awards as the funding source for the work they put in on the front end.)  Here’ s a great summary on SCOTUSWiki, and here’s a link to an amicus brief filed by the public interest organizations.  Philadelphia’s Community Legal Services noted in the brief that:

CLS has a long history of litigating class actions brought on behalf of [Supplemental Security Income] claimants and beneficiaries.  CLS concentrates its representation on those who find it most difficult to find other representation, including the homeless, the mentally ill and those whose primary language is other than English …  CLS pursues EAJA fees in order to defray the costs of its advocacy.  All EAJA fees that are collected are used for the costs of representation and are a significant part of CLS’ yearly budget.  Without such fees, the ability of CLS to represent low income clients alleging disability would be significantly affected. 

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