United States District Court, N.D. Illinois
May 14, 2004.
FRANCES A. KOPULOS, Plaintiff,
JO ANNE B. BARNHART, Commissioner of Social Security, Defendant
The opinion of the court was delivered by: MORTON DENLOW, Magistrate Judge
MEMORANDUM OPINION AND ORDER
This case arises at the intersection of the Equal Access to Justice Act
("EAJA") and the Social Security Act ("SSA"). Caught at the crossroads of
these two important pieces of legislation are those attorneys who
sacrifice the greater monetary gains available in certain areas of the
law in order to advocate on behalf of those less fortunate both in wealth
and in health. The EAJA was amended in 1985 to prevent claimants'
attorneys from receiving a double recovery for the "same work."
Consequently, an attorney must refund EAJA fees against fees received
under the SSA for the "same work." The issue presented is to define the
meaning of the term "same work."
This issue is raised in the Petition for Attorney Fees Pursuant to §
206(b)(1) of the SSA, 42 U.S.C. § 406(b)(1), filed by Petitioner
Frederick J. Daley, Jr. ("Petitioner"), the attorney for Plaintiff
Frances A. Kopulos ("Plaintiff"), requesting $21,151.00 in fees.
Petitioner received two EAJA fees in connection with the prosecution of
Plaintiff's claim. The first EAJA fee totaled $9,853.00. The second EAJA fee totaled
$5,000.00. Petitioner now petitions for an interim SSA award of
$21,151.00. Petitioner contends that he must refund only $5,000.00 in
EAJA fees against the SSA award. Defendant Jo Anne B. Barnhart,
Commissioner of Social Security ("Commissioner"), contends that
Petitioner must refund $14,853.00, the total amount of EAJA fees awarded
throughout the existence of this claim. For the following reasons, this
Court grants Petitioner's petition for fees in the amount of $21,151.00,
but holds that a $14,853.00 refund to Plaintiff is required.
I. BACKGROUND FACTS
Plaintiff applied for disability insurance benefits ("DIB") in 1994.
Petitioner has represented Plaintiff throughout the entire course of the
proceedings. Def. Resp. at 1. Plaintiff entered into a Social Security
Contingent Fee Contract (the "Contract") with Petitioner. Pet. Ex. A.
In 1999, after administrative denials of her DIB application,
Petitioner secured a remand order from the district court solely for the
Administrative Law Judge ("ALJ") to consider the findings of state agency
physicians. Kopulos v. Apfel, No. 98 C 4115, 1999 WL 33251456, at * 1
(N.D. Ill. Aug. 4, 1999). For work performed by Petitioner in that
action, the district court awarded $9,853.00 pursuant to the EAJA.
Kopulos v. Apfel, No. 98 C 4115, 1999 WL 1565201, at * 1-3 (N.D.Ill.
Nov. 15, 1999).
Following that remand, in 2001 a different ALJ conducted a hearing and
found Plaintiff ineligible for DIB. Plaintiff then filed the present
civil action before this Court. Petitioner succeeded in securing a remand from this Court, which ordered
further proceedings because the ALJ made an improper credibility
determination. Kopulos v. Barnhart, 215 F. Supp.2d 996 (N.D. Ill. 2002).
For his work before this Court, Petitioner requested EAJA fees in the
amount of $9,906.38. Of the requested amount, Petitioner was awarded
$5,000.00 in EAJA fees, pursuant to a settlement worked out between
Petitioner and the Commissioner. Kopulos v. Barnhart, 01 C 4881 (N.D.
Ill. minute order entered Nov. 14, 2002).
Following the second remand, the ALJ found Plaintiff and her children
eligible for social security benefits commencing March 1, 1992, in the
amount of $84,604.00 in past-due benefits and $720.00 a month
prospectively. The Commissioner has notified Plaintiff that she has
withheld $21,151.00, that is 25% of those past-due benefits, for direct
payment of any approved attorney fee under the SSA. Petitioner has agreed
to refund the $5,000.00 EAJA award granted by this Court. The
Commissioner, however, submits that Petitioner should also refund the
additional $9,853.00 EAJA award granted as a result of the first remand
in 1999. The question is whether the first EAJA award in this claim was
granted for the "same work" as the SSA fees being requested in this
II. LEGAL ANALYSIS
A. STATUTORY CONSTRUCTION STANDARDS
On a question of statutory construction, a court must determine
congressional intent. Dole v. United Steel Workers of Am., 494 U.S. 26,
35 (1990). Proper statutory construction requires that the analysis begin with the language of the statute.
Barnhart v. Sigmon Coal Co., Inc., 534 U.S. 438, 450 (2002). A court must
"determine whether the language at issue has a plain and unambiguous
meaning with regard to the particular dispute in the case." Robinson v.
Shell Oil Co., 519 U.S. 337, 340 (1997). The determination ceases if the
language at issue is unambiguous and there is a coherent and consistent
statutory scheme. Id. Whether statutory language is plain or ambiguous
"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." Id. at 341.
To interpret the language itself, the language must be given its most
natural reading and a commonsense view of its normal meaning. See Dole,
494 U.S. at 35-36. "[S]trict construction of statutory language `is to be
avoided when the result would be senseless or clearly at odds with the
evident purpose of the statute.' " United States v. Sanapaw, No,
03-2786, 2004 WL 885723, at *2 (7th Cir. Apr. 27, 2004). When viewing the
language within its specific context, the words surrounding it should be
considered, but a single sentence or clause does not outweigh the law as
a whole or its object and policy. Id. When looking at the broader context
of the statute, the legislative history of the statute should be
considered, but absent a clearly expressed legislative intention to the
contrary, the language must be regarded as conclusive. Consumer Prod.
Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 108(1980). This case presents an issue of first impression in the Seventh Circuit
on the meaning of the term "same work" within the interplay between the
SSA and the EAJA.
A. ATTORNEY'S FEES UNDER THE SOCIAL SECURITY ACT
Attorney's fees for representing individuals in social security cases
are governed by 42 U.S.C. § 406. Section 406(a) governs fees for
representation in administrative proceedings; § 406(b) controls fees for
representation in federal district court. Gisbrecht v, Barnhart,
535 U.S. 789, 794 (2002). For representation of a benefits claimant at
the administration level, an attorney may file a fee petition or a fee
agreement. 42 U.S.C. § 406(a); 20 C.F.R. § 404.1725(b). As an alternative
to fee petitions, the Social Security Act, as amended in 1990, permits
contingent-fee agreements filed with the agency in advance of a ruling on
the claim for benefits. 42 U.S.C. § 406(a)(2)-(4). There are limits on
the amounts that can be awarded. Id. § 406(a)(2)(A)(ii).
For proceedings in court, Congress provided for fees in the event of a
"judgment favorable to a claimant." Id. § 406(b)(1)(A). As part of its
judgment, a court may allow "a reasonable fee . . . not in excess of 25
percent of the . . . past due benefits" awarded to the claimant. Id.
Benefit amounts figuring in the fee calculation are limited to those
past-due. Attorneys may not receive additional fees based on a claimant's
continuing entitlement to benefits. Gisbrecht, 525 U.S. at 795.
The limits set out in § 406(a) and § 406(b) establish the exclusive
method for obtaining fees for successful representation of social
security benefits claimants. Id. at 795-96. The combination of § 406(a) and § 406(b) can never exceed 25% of the
retroactive benefits. Id. In fact, it is a criminal offense to collect or
even to demand from a claimant anything more than the authorized
allocation of past-due benefits. 42 U.S.C. § 406(a)(5), (b)(2);
20 C.F.R. § 404.1740-1799; Gisbrecht, 535 U.S. at 796. Essentially, the
fees are to be charged to the claimant, subject to the statutory maximum
of 25% of the retroactive benefits. Watford v. Heckler, 765 F.2d 1562,
1566 (11th Cir. 1985). The fees are not an award against the government.
C. ATTORNEY'S FEES UNDER THE EQUAL ACCESS TO JUSTICE ACT
The EAJA, Pub.L. No. 96-481, Tit. II, 94 Stat 2325, was enacted in 1980
for the primary purpose of eliminating "the barriers that prohibit small
businesses and individuals from securing vindication of their rights in
civil actions and administrative proceedings brought by or against the
Federal Government." Scarborough v. Principi, 124 So. Ct. 1856, 1861
(2004). Thus, the EAJA ensures that certain individuals would not be
"deterred from seeking review of, or defending against, unjustified
governmental action because of the expense involved in securing the
vindication of their rights." H.R. Rep. No. 99-120(1), at 4 (1985),
reprinted in 1985 U.S.C.C.A.N. 132, 132-133. Encouraging parties to
vindicate their rights is superior to the Government's general interest
in protecting the federal fisc. Commissioner, INS v. Jean, 496 U.S. 154,
The EAJA departs from the general rule that each litigant pays his or
her own legal fees. Scarborough, 124 S.Ct. at 1860. Under the EAJA, a
claimant may be awarded fees payable by the United States if the Government's position in the
litigation was not "substantially justified" and if such award would not
be unjust. 28 U.S.C. § 2412(d)(1)(A).
Although the Government's various positions in litigation may be more
or less justified, the EAJA treats a case "as an inclusive whole, rather
than as atomized line-items." Jean, 496 U.S. at 161-62. In cases in which
"administrative proceedings are intimately tied to the resolution of the
judicial action and necessary to the attainment of the results Congress
sought to promote by providing for fees, they should be considered part
and parcel of the action for which fees may be awarded." Sullivan v.
Hudson, 490 U.S. 877, 888 (1989).
D. 1985 AMENDMENT TO THE EAJA, PUB. L. 99-80: FROM CONFUSION TO THE
CREATION OF THE CURRENT INTERPLAY BETWEEN THE EAJA AND THE SSA
Initially, the EAJA was adopted for a three-year trial period. Pub.L.
96-481, § 204(c), 94 Stat. 2321 (1980). From its inception, the EAJA
did not apply to legal representation before the Social Security
Administration. 131 Cong. Rec. S9991-02 (July 24, 1985) (statement of
Sen. Heflin). However, several questions arose regarding the application
of the EAJA to civil litigation in social security cases. Among the
issues were (1) whether the EAJA applied to civil litigation in the
social security context; (2) whether a social security claimant could be
a prevailing party for the purposes of the EAJA when a district court
remands the claim to the Administration for further proceedings; and (3)
whether and to what extent attorney's fees under both the EAJA and §
406(b) could be awarded. Whether the EAJA applied to civil litigation in the social security
context was quickly resolved by the courts. For example, the court in
Ocasio v. Schweiker, 540 F. Supp. 1320, 1321 (S.D.N.Y. 1982), held that
although "the EAJA does not apply to administrative proceedings under the
Social Security Act, it does cover civil actions to review social
security decisions of the [Social Security] Agency." See also Berman v.
Schweiker, 531 F. Supp. 1149, 1153 (N.D. Ill. 1982) (holding that the
EAJA applies to social security cases). The court found that "[n]othing
in the EAJA expressly excludes its application to social security cases."
Ocasio, 540 F. Supp. at 1321. It supported its conclusion with comments
within the House Report and the House floor debates. Id. (citing H.R.
Rep. No. 1418, 96th Cong., 2d Sess. 12, reprinted in (1980) U.S.C.C.A.N.
4991; 17 Cong. Rec. H10, 220 (Oct. 1, 1980)).
This resolution, however, led to confusion as to the meaning of
"prevailing party" under the EAJA. The question became whether a social
security claimant could be a prevailing party for the purposes of the
EAJA when a district court remands the claim to the Administration for
further proceedings. See, e.g., MacDonald v. Schweiker, 553 F. Supp. 536,
539-40 (E.D.N.Y. 1982). The "contemporary legal context" at the time the
EAJA expired in 1984 is laid out in Vascera v. Heckler, 624 F. Supp. 1198
(D.R.I. 1986). When the EAJA expired, a trilogy of cases, McGill v.
Secretary of Health and Human Services, 712 F.2d 28 (2d Cir. 1983), Brown
v. Secretary of Health and Human Services, 747 F.2d 878 (3d Cir. 1984),
and Cook v. Heckler, 751 F.2d 240 (8th Cir. 1984), held that courts
should decline making an EAJA award upon a remand decision because the remand
order does not yet make the claimant a "prevailing party." Vascera, 624
F. Supp. at 1200-01. There were, however, two potential exceptions to the
general rule. First, a claimant may be entitled to EAJA fees when the
civil suit, though resulting in a remand, "worked a systemic change which
redounded to the benefit of a large number or present and future
persons." Id. at 1203-04 (citing MacDonald, 552 F. Supp. at 356). Second,
a claimant may be entitled to EAJA fees when the remand resulting from a
civil suit was for mere "housekeeping" purposes, such that the
Administration's "liability for the benefits in issue has been
effectively determined in the judicial proceedings, though the court, in
deference to the orderly management of the administrative scheme,
mandates a remand for, say, the calculation of the payments due." Id. at
1204 (citing, inter alia, McKenzie v. Heckler, 589 F. Supp. 1152 (N.D.
Confusion also existed as to whether and to what extent attorney's fees
under both the EAJA and § 406(b) could be awarded. The court in Meyers
v. Heckler, 625 F. Supp. 228, 231 (S.D. Ohio 1985), explicitly explored
the confusion. The concern was that granting attorney's fees under both
the EAJA and the SSA seemed to effect double recovery. Id. There was,
however, a fundamental difference between the two awards. Id. Awards
under § 406(b) come out of the claimant's past-due benefits, while awards
under the EAJA come out of the public fisc. Id. (citing Eustache v. Sec'y
of Dep't of Health & Human Servs., 601 F. Supp. 176, 178 (E.D.N.Y.
1985)). Furthermore, motions for awards under the EAJA are made on behalf
of the claimant by the attorney, while motions for awards under § 406(b)
are made by the attorney on his or her own behalf "against" the claimant.
Id. Accordingly, most courts concluded that "any funds awarded pursuant
to the EAJA serve as a reimbursement to the claimant for fees paid out of
his or her disability award to his or her counsel." Id.; see also Steffy
v. Heckler, No. 83 C 3319, 1985 WL 1899, at * 1-2 (N.D. Ill. June 17,
1985); Ouellette v. Heckler, No. 84-0129-P, 1984 WL 2214, at *2 (D. Me.
Nov. 28, 1984); cf. Taylor v. Heckler, 608 F. Supp. 1255 (D.N.J. 1985)
(holding that lawyers must proceed under the EAJA where appropriate
rather than under the SSA alone so as not to create situations of
conflicts with clients). Contra Guthrie v. Schweiker, 718 F.2d 104, 108
& n.11 (4th Cir. 1983) (granting EAJA fees to a social security
claimant, but noting that the attorney "properly has disclaimed any
intention to seek a double award of attorney's fees for work in the
courts under the EAJA and 42 U.S.C. § 406(b)(1)"). The Meyers court
observed, however, that although the maximum amount typically awarded
under § 406(b) usually far exceeds the maximum amount typically awarded
under the EAJA for the same case, a problem arises when the opposite is
true because 42 U.S.C. § 406(b)(2) prohibits an attorney from collecting
more than the 25% of the claimant's past-due benefits under penalty of a
misdemeanor. 625 F. Supp. at 231 n.4. The question, therefore, was
whether an attorney would be in jeopardy of criminal prosecution if he or
she accepted an EAJA fee amount greater than the 25% cap mandated in §
It was within this "contemporary legal context" that the EAJA expired
in 1984. Congress, recognizing the important function served by attorneys
for social security claimants, extended and amended the EAJA to permit attorneys to collect
both EAJA awards and SSA awards under certain circumstances. H.R. Rep.
No. 99-120(1), at 4, 20 (1985), reprinted in 1985 U.S.C.C.A.N. 132, 132,
149. The result was a harmonization of fees payable by the Government
under the EAJA with fees payable out of a claimant's past-due social
security benefits under § 406(b) that permitted fee awards under both
prescriptions so long as the attorney refunds to the claimant the amount
of the smaller fee. Gisbrecht, 535 U.S. at 796. The amendment to § 206 of
the EAJA, which has not been codified, reads:
(b) Section 206(b) of the Social Security Act (
42 U.S.C. § 406(b)(1)) shall not prevent an award
of fees and other expenses under section 2412(d)
of title 28, United States Code. Section 206(b)(2)
of the Social Security Act shall not apply with
respect to any such award but only if, where the
claimant's attorney receives fees for the same
work under both section 206(b) of that Act and
section 2412(d) of title 28, United States Code,
the claimant's attorney refunds to the claimant
the amount of the smaller fee.
Pub.L. No. 99-80, § 3, 99 Stat. 183 (1985) (emphasis added).
Attorneys who represent claimants in social security proceedings thus
are permitted to seek recovery under both the EAJA and the SSA and to
keep the larger fee so long as the smaller fee for the "same work" is
refunded to the claimant. H.R. Rep. No. 99-120(1), at 20, reprinted in
1985 U.S.C.C.A.N. 132, 149. Under the amendment, an attorney is precluded
from retaining both EAJA fees and SSA fees. Id. at 148.
"`Thus, an EAJA award offsets an award under Section 406(b), so that
the [amount of the total past-due benefits the claimant actually
receives] will be increased by the . . . EAJA award up to the point
the claimant receives 100 percent of the past-due benefits.'" Gisbrecht, 535 U.S. at 796 (alterations in original). The intent of this
amendment was to prevent "double dipping" because it deprives claimants
of the benefits intended by the EAJA. H.R. Rep. No. 99-120(1), at 19-20,
reprinted in 1985 U.S.C.C.A.N. 132, 148-49. Thus, Congress sought to
deter the Government from substantially unjustified litigation, to
encourage individuals to defend against such litigation should it arise,
and to reward attorneys for representing claimants against such
litigation while simultaneously benefitting the claimant.
The claimant is to be the primary beneficiary of the EAJA award. Thus,
if a claimant is entitled to past-due benefits in the amount of $10,000,
the attorney under the SSA would be entitled to 25% of that amount, or
$2,500, and the claimant would receive $7,500 in net benefits. However,
if the attorney had secured an EAJA award of $1,000 "for the same work,"
the claimant would receive the benefit of that award in the form of a
credit, which would be paid by the Government, against the $2,500 owed to
the attorney. Therefore, the attorney would net $2,500 and the claimant
would net $8,500 (as opposed to $7,500). Similarly, if the EAJA award had
been $3,000, the attorney would net the entire $3,000 and the claimant
would net the entire $10,000. See Kimball v. Shalala, 826 F. Supp. 573,
578 (D. Me. 1993). The cap on SSA awards under § 406(b)(1) is not a
ceiling on the amounts of attorney's fees that can be awarded under the
EAJA. Watford, 765 F.2d at 1564. D. SOCIAL SECURITY CASES
It is clear that courts uniformly have held that when an attorney has
received fees under both the EAJA and the SSA for the "same work," the
attorney must reimburse the claimant for the amount of the EAJA award,
but not more than the amount of the SSA award. Jackson v. Sec'y of the
Dep't of Health & Human Servs., No. 85-5180, 1989 WL 83493, at *4 (E.D.
Pa. July 21, 1989). However, the courts, including the United States
Supreme Court, have glossed over the proper interpretation of "same
work." See Gisbrecht, 535 U.S. at 796 (stating, "the claimant's attorney
must `refun[d] to the claimant the amount of the smaller fee," but
ignoring the term "for the same work").
Typically, the issue of an EAJA award off-setting a SSA award arises
when, upon remand by one court after an initial unfavorable decision, the
Administration awards benefits. For example, in Hearn v. Barnhart,
262 F. Supp.2d 1033, 1035 (N.D. Cal. 2003), the claimant, who was
represented by counsel, received a partially unfavorable decision from
the Administration after a hearing before an Administrative Law Judge.
The claimant's counsel, on behalf of the claimant, filed a civil action
in federal district court arguing for an earlier onset date. Id. The
court remanded the case to the Administration for further proceedings and
awarded the claimant's attorney's fees under the EAJA. Id. Upon remand,
the Administration ruled in favor of the claimant and awarded benefits.
Id. The Administration set aside 25% of the claimant's past-due benefits
for the payment of attorney's fees. Id. The attorney then moved the same
court for attorney's fees pursuant to 42 U.S.C. § 406(b). Id. at 1034. The court awarded the SSA fees. Id. at 1038. The parties did not
dispute that the SSA award required an offset by the amount of the EAJA
award. Id. The court, without discussing whether the two awards were for
the "same work," ordered the offset. Id. (citing 28 U.S.C. § 2412;
Gisbrecht, 122 S.Ct. 1817, 1822 (2002)).
Likewise, in a case factually similar to this case, the court, without
determining what constitutes "same work" and without a dispute amongst
the parties, ordered that previously awarded EAJA fees must off-set an
SSA award under § 406(b). In Roark v. Barnhart, 221 F. Supp.2d 1020, 1021
(W.D. Mo. 2002), the claimant, who was represented by counsel, was denied
disability benefits and filed a civil action before a federal district
court. The judge in that civil action remanded the case and awarded EAJA
fees. Id. On remand, the Administration once again denied the claimant's
benefits. Id. The claimant then filed a civil action in federal court
before a different judge. Id. The second district judge reversed the
Administration's decision and remanded for an award of benefits. Id. That
judge also awarded additional EAJA fees. Id. The claimant's counsel then
moved the court for attorney's fees pursuant to 42 U.S.C. § 406(b). Id.
The court awarded the SSA fees for the attorney's work and off-set those
fees by the total amount of both EAJA fees previously awarded for the
attorney's work. Id. at 1026. The court did not explicitly discuss the
meaning of "same work" but rather made a general statement that an EAJA
award off-sets an award under § 406(b), to which neither party objected.
Id. at 1022. Consequently, these cases create the presumption that the EAJA award
and the SSA fee granted in the same claim arise from the "same work."
However, the term "same work" has not been defined explicitly within the
social security context.
E. VETERANS' CLAIMS CASES
The term "same work" has been defined within the context of veterans
claims, and that definition supports the conclusion that the entire EAJA
fee should be off-set against the award of fees arising out of the same
social security claim. In the context of Veterans Claims, attorneys and
claimants enter into fee agreements requiring contingent-fee payments to
the attorneys out of past-due benefits as compensation for the work
performed in securing those past-due benefits. As in the social security
context, attorneys handling veterans' claims in federal court are
entitled to EAJA awards. However, § 506(c) of the Federal Courts
Administration Act of 1992 ("FCAA"), which employs substantially the same
language as § 206 of the EAJA, requires that, when an attorney receives
fees for the "same work" under both a qualifying fee arrangement and the
EAJA, the EAJA fees go first to reimburse the claimant what was paid
under the fee agreement. Pub.L. No. 102-572, Tit. V, § 506(c), 106 Stat.
4506, 4513. The interpretation of these statutes has been the subject of
vigorous debate and the conclusions reached have changed over time,
Initially, the Court of Appeals for Veterans Claims held that "same
work" does not mean "same claim" in Shaw v. Gober, 10 Vet. App. 498, 504
(1997), and in Fritz v. West, 13 Vet. App. 190, 194 (1999). After
reviewing the legislative history of § 206 of the EAJA and recognizing the proscription against double-payment for the "same
work," those courts found that an attorney generally may retain an entire
contingency-fee amount if the representation before the Board of
Veterans' Appeals ("BVA") subsequent to the attorney's work before the
court involves obtaining more relief from the BVA than from the court.
The Court of Appeals for Veterans Claims in Carpenter v. Principi, 15
Vet. App. 64, 74-76 (2001), appeal dismissed 327 F.3d 1371 (Fed. Cir.
2003), overruled both Shaw and Fritz, finding that the interpretation of
the term "same work" in those cases was too narrow and left open the
opportunity for subverting the purpose of the EAJA. In Carpenter, the
claimant's attorney performed work before the Veterans Administration
("VA") on behalf of the claimant, securing benefits for the claimant and
requesting reconsideration of an earlier denial on the basis of clear and
unmistakable error. Id. at 66-67. When the VA determined that there was
no clear and unmistakable error and the BVA affirmed, claimant's attorney
appealed the decision to the Court of Appeals for Veterans Claims, which
granted the parties' joint motion for remand and awarded EAJA fees. Id.
at 67-68. On remand, the VA awarded the claimant past-due benefits. Id.
at 68. The BVA, however, refused to allow the attorney to retain the EAJA
award for work performed before the court in addition to the fees to be
awarded under the contingency agreement entered into between the attorney
and the claimant, which stated that if the court remands the case no
offset of EAJA fees will be made against the contingent fee arising from
a successful recovery of past-due benefits. Id. at 67-69. The attorney
appealed the BVA's refusal to award both sets of fees, arguing that his work to secure the joint remand before the court was entirely different
from his work performed at the BVA on remand and that as a matter of law
the work before the BVA is not and can not be considered the same work as
that performed before the court. Id. at 68.
The court rejected that argument, taking issue with the fact that the
contingency agreement did not provide for an offset of EAJA fees when a
court remanded the case prior to an award of benefits. Id. at 76. The
court found that there exists a proscription of double payments for the
same work, a policy divined from the legislative history of § 206 of the
EAJA, the language of which mirrors the FCAA § 506(c) language that
creates the same proscription in the context of veterans benefits. Id. at
73. Thus, an attorney may not collect and retain both an EAJA fee and a
contingent fee for the same work on a veteran's claim. Id.
Over the objections of Judge Steinberg, who feared that the majority
was reading "same work" out of the statute, the court then concluded that
"the representation of a claimant in pursuit of a claim at all stages of
the adjudication process is the `same work,' regardless of the tribunal
before which it is performed." Id. at 76. The court reached this
conclusion because the purpose of the EAJA is to remove any financial
deterrents to individuals defending themselves against unjustified
government action. Id. at 75. Additionally, the court found that because
standing is granted to claimants to pursue an EAJA cause of action, EAJA
awards belong to a claimant and not to an attorney. Id. The purpose of
the EAJA is to reimburse the claimant for fees paid out of the claimant's
benefits, not to enhance the attorney's fees to an amount above the fees
contemplated in the contingency agreement. Id. Consequently, the court
refused to consider the attorney's representation of the claimant before
the BVA on remand as different "work" than that performed before the
court. The court reasoned that doing so would improperly allow the EAJA
fee to enhance the contingent-fee rather than properly allow the EAJA fee
to reimburse the claimant for the contingent fees paid from the
claimant's past-due benefits. Id. at 76; see also Carpenter v. Principi,
No. 00-2300, 2002 WL 31770013, at *2 (Vet. App. Sept. 10, 2002)
(upholding Carpenter v. Principi, 15 Vet. App. 64, 74-76 (2001)).
This Court agrees with the Carpenter court's analysis of the term "same
work." However, the difference between Carpenter and this case is that
Carpenter did not involve more than one EAJA award. Although this case
involves two EAJA awards, the reasoning in Carpenter applies.
F. THE MEANING OF "SAME WORK"
The term "same work" is ambiguous on its face. It is unclear whether
the term refers to "same claim," "same civil action," or the "same"
effort or activity directed toward a goal. Even whether that goal is an
over-arching goal or a very specific goal is unclear. The ambiguity
exists because the language does not indicate whether "work" should be
read narrowly so that an item by item comparison must be performed for
all of the work done, or whether "work" should be read broadly so as to
include all of the work performed in connection with a particular social
security claim. Within the specific context of the statute, the language can be
interpreted as requiring a comparison of work performed. Section 206 of
the EAJA contemplates attorney's fees for the same work under both §
406(b) of the SSA and 42 U.S.C. § 2412(d). Pub.L. No. 99-80, § 3, 99
Stat. 183 (1985). However, awards granted under § 406(b) of the SSA are
for all of the work performed before a court, while awards granted under
the EAJA are for work performed only on litigation that is not
substantially justified. Thus, there could be some overlap between the
SSA award and the EAJA award when the SSA award is granted for work on
litigation that is not substantially justified. This would require a
court to parse out what amount of fees goes to the work performed on
litigation that is not substantially justified and what amount of fees
goes to the work performed on appropriate litigation.
Such an interpretation is inconclusive, however, because of the clearly
expressed legislative intention to the contrary. See Consumer Prod.
Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980). The
legislative intent is clear:
It is the Committee's intent that when fee awards are
made in social security or SSI cases under the EAJA,
and provision is also allowed under the Social
Security Act for recovery of attorney fees of up to
25% of the claimant's benefits, that the EAJA award
should be used as a set off to reduce the payment
which the claimant would otherwise owe the attorney.
Thus, under the amendment an attorney for a social
security or SSI claimant would be precluded from
receiving both EAJA and Social Security Act fees.
Without this amendment it was argued, "double dipping"
was possible. Such double payments are inappropriate
and deprives the plaintiff of the benefits intended by
EAJA. Because the Committee is aware of the important
function served by counsel in these cases, the
Committee permits the attorney to seek recovery under
both authorizations. The attorney, however, may keep
the larger fee, but must return the amount of the
smaller fee to the claimant. H.R. Rep. No, 99-120(1), at 20, reprinted in 1985 U.S.C.C.A.N. 132,
148-49. Thus, it is clear that Congress made a choice to make the
claimant the primary beneficiary of the EAJA award by providing for the
offset. Therefore, the Court holds that all EAJA awards granted for work
performed on a claim must off-set the SSA fees awarded for worked
performed on the same claim.
This result is consistent with the original purpose of the EAJA, which
was to remove any deterrence for individuals to defend themselves against
unjustifiable actions of the Government by allowing for the compensation
of their advocates. Attorneys who do work in the social security field
and obtain EAJA fees may be entitled to keep those fees. This provides an
incentive for attorneys to undertake difficult cases even if they are not
ultimately successful on the merits because they may retain the EAJA
fees. Furthermore, the attorneys possibly could receive more than 25% of
the amount of the claimant's past-due benefits when the EAJA fees exceed
the SSA award. Congress was faced with the question of who should benefit
from an EAJA fee when a social security fee is also awarded in connection
with the same claim. The amendment to EAJA was intended to provide the
claimant with a credit for EAJA fees received by the attorney.
Gisbrecht, 535 U.S. at 796. Thus, the benefit of EAJA goes to the
Petitioner argues that interpreting "same work" as "same claim"
adversely affects the incentives for attorneys to take social security
cases. When a court remands a social security claim to the Commissioner
under sentence four of 42 U.S.C. § 405(g), the civil action is terminated before that court, which does not retain jurisdiction, and any
subsequent review of the Commissioner's final decision results in the
filing of a new civil action. Sullivan v. Finkelstein, 110 S.Ct. 2658,
2664 (1990). Therefore, if a social security claim requires the filing of
multiple civil actions before its ultimate resolution (a circumstance
that is not outside the realm of possibility, see Rohan v. Barnhart, No.
03 C 3029, 2004 U.S. Dist. LEXIS 2871 (N.D. Ill. Feb. 24, 2004) (a social
security claim requiring three separate federal cases and one federal
appeal)), then the rate of the attorney's compensation is reduced each
Although the Court acknowledges Petitioner's concerns, such a result is
part of the risk knowingly undertaken by the attorney. Moreover, the Court
is bound by the intent of Congress. Petitioner's concerns focus on the
effect upon attorneys of defining "same work" as "same claim." These
concerns, however, are misplaced because the intent of the EAJA focuses
on benefitting claimants over attorneys. When it amended the EAJA in
1985, Congress conferred a benefit on attorneys by protecting them from
criminal sanctions when their recovery under the EAJA exceeded the 25%
maximum recovery permitted under § 406(b) of the SSA, Congress directly
addressed this concern with the amendment to EAJA, indicating that the
ramifications of § 406(b)(2) are avoided if "the claimant's attorney
refunds to the claimant that amount of the smaller fee." Pub.L. No. 99-80,
§ 3, 99 Stat. 183 (1985); see also Meyers, 625 F. Supp. at 228. The
benefit to attorneys is clear: they can avoid criminal sanctions by
refunding to their clients the smaller amount of the EAJA fees or the SSA fees while still potentially retaining more than 25% of the amount of
past-due benefits. Furthermore, Congress was aware of the possibility of
diminishing returns for attorneys in cases in which there are multiple
appeals and remands because it acknowledged the possibility of EAJA awards
upon remand under exceptional circumstances. H.R. Rep. No. 99-120(1), at
19, reprinted in 1985 U.S.C.C.A.N. 132, 148 (citing MacDonald, 552 F.
Supp. at 536 (awarding EAJA fees on remand because of the exceptional
nature of the case).
Therefore, the Court finds that Petitioner must refund the entire
amount of $14,853.00 in EAJA fees awarded to him against the $21,151.00
in SSA fees hereby granted by the Court.
The Court awards Petitioner Frederick J. Daley, Jr., $21,151.00 in
attorney's fees for work performed before this Court pursuant to § 206(b)
of the Social Security Act, 42 U.S.C. § 406(b)(1). The Court further
finds that the award is reasonable because it is consistent with the
Contract entered into between Petitioner and Plaintiff, it is consistent
with the 25% statutory cap for SSA fees, and the Commissioner has no
objection to the amount of the SSA award. Petitioner, however, shall
refund both the $5,000.00 and the $9,853.00 EAJA awards previously
granted for this claim, pursuant to § 206 of the EAJA, 28 U.S.C. § 2412,
because they are for the same work as the fees awarded under the SSA. Therefore, the Court orders the Commissioner to
pay Petitioner Frederick J. Daley, Jr., fees pursuant to 42 U.S.C. § 406(b)
and consistent with this opinion.
JUDGMENT IN A CIVIL CASE
? Jury Verdict. This action came before the Court for a trial by
jury. The issues have been tried and the jury rendered its verdict.
? Decision by Court. This action came to hearing before the Court. The
issues have been heard and a decision has been rendered.
IT IS HEREBY ORDERED AND ADJUDGED the the Court awards Petitioner
Frederick J. Daley, Jr., $21,151.00 in attorney fees for work performed
before this Court pursuant to Section 206(b) of the Social Security Act,
42 U.S.C. § 406(b)(1). The Court further finds that the award is
reasonable because it is consistent with the Contract entered into
between Petitioner and Plaintiff, it is consistent with the 25% statutory
cap of SSA fees, and the Commissioner has no objection to the amount of
SSA award. Petitioner, however, shall refund both the $5,000.00 and the
$9,853.00 EAJA awards previously granted for this claim pursuant to
Section 206 of the EAJA, 28 U.S.C. § 2412, because they are for the
same work as the fees awarded under the SSA. Therefore, the Court orders
the Commissioner to pay Petitioner Frederick J. Daley, Jr. fees pursuant
to 42 U.S.C. § 406(b) consistent with this Court's opinion.
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