Opinion
EP-21-CV-00142-DCG-RFC
03-17-2023
ALBERTO CARDONA, Plaintiff, v. COMMISSIONER OF SOCIAL SECURITY, Defendant.
REPORT AND RECOMMENDATION
ROBERT F. CASTANEDA, UNITED STATES MAGISTRATE JUDGE.
Pursuant to United States District Judge David Guaderrama's Standing Order Referring Social Security Cases, the Court considers Plaintiff Alberto Cardona's (“Plaintiff” or “Cardona”) motion for attorney's fees (“Motion”) (ECF No. 22) and supporting documents (ECF No. 23), filed on February 3, 2023. On February 15, 2023, Defendant Commissioner of Social Security (“Defendant” or “Commissioner”) responded to the Motion (“Response”). (ECF No. 24.) For the following reasons, the Court RECOMMENDS that the Motion be GRANTED IN PART and DENIED IN PART.
See also Fed.R.Civ.P. 54(d)(2)(D) (“[T]he court . . . may refer a motion for attorney's fees to a magistrate judge under Rule 72(b) as if it were a dispositive pretrial matter.”).
On November 14, 2022, Judge Guaderrama remanded this case for further administrative proceedings and issued a final judgment. (ECF Nos. 20:11; 21.) Cardona now seeks an award of $5,219.69 in attorney's fees, $17.58 in expenses, and $402 in costs, pursuant to the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412. (ECF No. 22:1.) On June 9, 2021, Cardona signed an “Affirmation and Waiver of Direct Payment of EAJA Fees” (“Assignment”). (ECF No. 23-1.) Cardona's attorney, Howard D. Olinsky, states that under the Assignment, “if Plaintiff owes a debt that qualifies under the Treasury Offset (31 U.S.C. § 3716 (West)), any [EAJA award] payment shall be made payable to Plaintiff and delivered to Plaintiff's attorney,” but “[i]f the United States Department of Treasury determines [that] Plaintiff owes no debt that is subject to offset, the government may accept the assignment of EAJA fees and pay such fees directly to Plaintiff's attorney.” (ECF No. 23:1-2) (citing Astrue v. Ratliff, 560 U.S. 586 (2010)). Therefore, Cardona asks that the EAJA award be made payable to Olinsky if Cardona “has no debt registered with the Department of Treasury subject to offset.” (ECF No. 22:1.)
The Commissioner does not object to an EAJA award in the amount requested by Cardona, but objects to Cardona's request that the EAJA award be made payable “to Plaintiff's attorney if Plaintiff has no debt registered with the Department of Treasury subject to offset.” (ECF No. 24:1); see (id. at 2.) Instead, the Commissioner states, payment should be made directly to Cardona, “regardless of any assignment.” (Id. at 1) (citing Ratliff, 560 U.S. 586 and 28 U.S.C. § 2412(a)(1)). The Commissioner also argues that the Assignment fails to comply with the AntiAssignment Act, 31 U.S.C. § 3727. (Id. at 2.) Neither party states whether Cardona owes any debt to the federal government.
First, Cardona is entitled to an EAJA award. 28 U.S.C. § 2412(d); Shalala v. Schaefer, 509 U.S. 292, 296-98, 303 (1993); see (ECF Nos. 20; 21; 23-8). Moreover, Cardona's request for $5,219.69 in attorney's fees, $17.58 in expenses, and $402 in costs, is reasonable. 28 U.S.C. § 2412(a), (d)(2)(A); see (ECF Nos. 23:2-3; 23-2-23-7); see, e.g., Lopez v. Saul, No. EP-17-CV-367-MAT, 2019 WL 13193250, at *3 (W.D. Tex. July 23, 2019). The Court next considers to whom the EAJA award should be made payable.
In Astrue v. Ratliff, the Supreme Court held that plaintiffs, rather than their attorneys, are the true “prevailing parties” who are entitled to EAJA awards. 560 U.S. at 589-96 (interpreting 28 U.S.C. § 2412(d)). Accordingly, an EAJA award may be “offset to satisfy a pre-existing debt that the litigant owes the United States.” Id. at 589; see id. at 590. The Court noted that its holding did not necessarily conflict with the practice of making an EAJA award payable to an attorney when the prevailing litigant agreed to such payment arrangement and owed no debts to the federal government. Id. at 589-90, 597 (discussing the Treasury Offset Program).
Following Ratliff, the Fifth Circuit held that “whereas [42 U.S.C.] § 406(b) fees are paid directly to the successful claimant's attorney, EAJA fees are paid to the claimant, who may or may not tender the award to counsel.” Jackson v. Astrue, 705 F.3d 527, 531 (5th Cir. 2013); see also id. at n.11 (citing Ratliff, 560 U.S. 586 and McGraw v. Barnhart, 450 F.3d 493, 503 (10th Cir. 2006)). Subsequently, district courts in the Fifth Circuit have often ordered EAJA awards payable to the plaintiff, even if the plaintiff assigned his or her rights to the award to the attorney. See, e.g., Carpenter v. Kijakazi, No. 21-328, 2022 WL 16961122, at *1-2 (E.D. La. Nov. 16, 2022) (ordering EAJA award payable to plaintiff despite assignment agreement); McCullough v. Saul, No. SA-18-CV-00128-ESC, 2019 WL 2774336, at *2 (W.D. Tex. July 2, 2019) (same); Dieckow v. Saul, No. 5-19-CV-796-RBF, 2020 WL 13441547, at *3 (W.D. Tex. July 17, 2020) (“Whether the Commissioner pays the fees award to [plaintiff] directly or in care of her counsel is left to the Commissioner's discretion. [The plaintiff's] assignment of an award to her attorney is a matter left for her and her attorney to resolve.”); Bickel v. Comm'r, Soc. Sec. Admin., No. 2:14-CV-00041, 2015 WL 296088, at *2 (E.D. Tex. Jan. 21, 2015) (“Plaintiff[']s payment of fees owed [to] his attorney is a matter of the retainer agreement between them.”).
At least one district court in the Fifth Circuit has ordered payment of an EAJA award to the attorney rather than the litigant. Bolden v. Colvin, 114 F.Supp.3d 397, 399-400 (N.D. Miss. 2015). The court emphasized that “Ratliff's use of the phrase ‘payable to the litigant' has no bearing on to whom the payment may be directed” and “[t]hus, Ratliff cannot be construed to deny attorneys from acquiring beneficial interests in, or contractual rights to, any awards or fees directly payable to their clients.” Id. at 399. The court elaborated:
Any eligible federal payments, which include EAJA awards, are checked against the Treasury Offset Program's delinquent debtor database prior to disbursement. Thus, allowing EAJA awards to be paid directly to attorneys, less any offsets, poses no threat to the government's interest in debt collection. On the other hand, honoring fee assignments would alleviate collection problems for attorneys who are already statutorily limited to a relatively low fee, thereby serving the EAJA's policy aims of reducing the “disincentives for those who would defend against unjustified governmental action.”Id. at 400 (footnotes omitted) (quoting United States v. Claro, 579 F.3d 452, 466 (5th Cir. 2009)).
This Court recognizes the logic of the Bolden court's reasoning. However, consistent with Ratliff, Jackson, and the majority approach of Fifth Circuit district courts, the Court recommends an EAJA award payable to Cardona. This recommendation is especially appropriate here because the record does not show that the Assignment complies with the Anti-Assignment Act. That Act establishes requirements for “a transfer or assignment of any part of a claim against the United States Government or of an interest in the claim” or “the authorization to receive payment for any part of the claim.” 31 U.S.C. § 3727(a). At minimum, Cardona fails to show that the Assignment was attested to by two witnesses. Id. § 3727(b); see (ECF Nos. 22-23; 23-1; 23-8); see, e.g., Thomas v. Colvin, No. 1:16-01017, 2018 WL 2294080, at *2 (W.D. La. May 18, 2018). Further, the Commissioner has not waived the Anti-Assignment Act. (ECF No. 24:2); see Murkeldove v. Astrue, 635 F.3d 784, 794 (5th Cir. 2011) (holding that the Anti-Assignment Act “serves as a defense that the Government can raise against a claim and not . . . an ex ante bar to forming a contingency-fee agreement”).
For the foregoing reasons, the Court RECOMMENDS that Plaintiff's Motion for Attorney's Fees be GRANTED IN PART and DENIED IN PART. The Motion should be GRANTED as to the requested $5,219.69 in attorney's fees, $17.58 in expenses, and $402 in costs, but DENIED to the extent that Plaintiff requests direct payment of the award to his attorney. The Court FURTHER RECOMMENDS that the aforementioned award be made payable to Plaintiff and mailed to Plaintiff's attorney at the attorney's address on record.
NOTICE
FAILURE TO FILE WRITTEN OBJECTIONS TO THE PROPOSED FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS CONTAINED IN THE FOREGOING REPORT, WITHIN FOURTEEN DAYS OF SERVICE OF SAME, MAY BAR DE NOVO DETERMINATION BY THE DISTRICT JUDGE OF AN ISSUE COVERED HEREIN AND SHALL BAR APPELLATE REVIEW, EXCEPT UPON GROUNDS OF PLAIN ERROR, OF ANY UNOBJECTED-TO PROPOSED FACTUAL FINDINGS AND LEGAL CONCLUSIONS AS MAY BE ACCEPTED OR ADOPTED BY THE DISTRICT COURT.