The opinion of the court was delivered by: Honorable Richard J. Arcara Chief Judge United States District Court
Plaintiff Dawn M. Thompson has made a motion for attorney fees in this action under the Equal Access to Justice Act (the "EAJA"), 28 U.S.C. § 2412. Defendant, the Commissioner of Social Security ("Commissioner"), opposes the motion only to the extent that Ms. Thompson seeks to have the Commissioner pay EAJA attorney fees to her attorney, the Law Offices of Kenneth R. Hiller (Kenneth R. Hiller, Esq., of counsel), and not to her personally. Oral argument was held on March 18, 2008. The parties having resolved all other issues in this action by stipulation, only one issue remains for this Court to resolve: Can a plaintiff entitled to attorney fees under the EAJA designate her counsel as payee of those fees, or must she receive those fees personally? For the reasons below, Ms. Thompson's motion is granted.
This action arose in connection with Ms. Thompson's application to the Commissioner for Social Security disability benefits. After the Commissioner denied Ms. Thompson's claim, she filed her complaint in this action on April 7, 2006. The parties subsequently stipulated to remand Ms. Thompson's claim to the Commissioner for further proceedings, and this Court issued an Order on May 16, 2006 approving the stipulation and remanding Ms. Thompson's claim.
Upon remand, the Commissioner made a finding on October 26, 2006 that Ms. Thompson was entitled to Social Security disability benefits. The parties filed a stipulation on July 3, 2007 acknowledging that this action could be dismissed as moot. The Court issued an Order on July 5, 2007 approving the stipulation. The Clerk of the Court formally dismissed this action in a judgment dated July 16, 2007.
On August 16, 2007, Ms. Thompson made the pending motion for attorney fees in connection with the resolution of her Social Security disability claim. In general, Ms. Thompson set forth reasons for believing that she met the criteria for reimbursement of attorney fees under the EAJA, including her contention that the initial denial of her claim was not supported by substantial evidence and thus not "substantially justified" under 28 U.S.C. § 2412(d)(1)(B). In response, the Commissioner does not contest that Ms. Thompson should receive attorney fees under the EAJA, and asserts further that the parties have agreed to an amount of $2,989.06 plus $250.00 in costs. The Commissioner also does not oppose delivering payment to Ms. Thompson, care of her counsel. The Commissioner, in fact, has gone as far as to state that he would not oppose paying Ms. Thompson's attorney directly (i.e., making Mr. Hiller the payee) "pursuant to a valid assignment of fees executed by plaintiff." The Commissioner objects to the pending motion only to the extent that Mr. Hiller would be payee of the stipulated legal fees without an explicit assignment. The Commissioner argues that the plain language of the EAJA requires that compensation for legal fees go only to Ms. Thompson personally, because only she is the "prevailing party" within the meaning of the EAJA.
There is a split among the courts of this District as to whether a plaintiff awarded attorney fees under the EAJA must receive those fees personally. Compare Blackwell v. Astrue, No. 06-CV-860, 2008 WL 4145523 (W.D.N.Y. 2008) (Skretny, J.) (directing payment to plaintiff's attorney) and Garner v. Astrue, No. 06-CV-769, 2008 WL 2357409 (W.D.N.Y. 2008) (Curtin, J.) (same) with Hogan v. Astrue, 539 F. Supp. 2d 680 (W.D.N.Y. 2008) (Larimer, J.) (directing payment to plaintiff personally). The split within this District mirrors the split that has developed among circuit and district courts across the country. See, e.g., Hogan, 539 F. Supp. 2d at 683 (citing a number of circuit and district court decisions that have reached opposite conclusions). This Court will begin by assessing the EAJA's operation and purpose, and then will evaluate whether the EAJA directs a plaintiff receiving an award of attorney fees to receive it by any particular method.
The EAJA's Operation and Purpose
The plain language of the EAJA operates to reimburse Ms. Thompson for the actual costs that she incurred and must repay for her successful legal action against the Commissioner. "Our first step in interpreting a statute is to determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case. Our inquiry must cease if the statutory language is unambiguous and the statutory scheme is coherent and consistent. The plainness or ambiguity of statutory language is determined by reference to the language itself, the specific context in which that language is used, and the broader context of the statute as a whole." Robinson v. Shell Oil Co., 519 U.S. 337, 340-41 (1997) (internal quotation marks and citations omitted). Here, the EAJA states that
Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses, in addition to any costs awarded pursuant to subsection (a), incurred by that party in any civil action (other than cases sounding in tort), including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.
28 U.S.C. § 2412(d)(1)(A).
Subsection (d)(2)(A) defines "fees and other expenses" to include "reasonable attorney fees." There is some uncertainty as to whether an attorney fee awarded under the EAJA in a Social Security case would constitute gross or taxable income. See Comm'r v. Banks, 543 U.S. 426, 439 (2005) (declining to address whether attorney fees awarded under federal fee-shifting statutes constitute gross or taxable income). Regardless, any attorney fees that Ms. Thompson receives under the EAJA will not be a benefit to her as, for example, her underlying Social Security disability award is. EAJA attorney fees are not available to all prevailing parties; pro se litigants do not qualify, even if they are attorneys. SEC v. Price ...