81,7('67$7(6&28572)$33($/6)259(7(5$16&/$,06 12( 0$77+(:6+($/(<-5$33(//$17 9 3(7(52 5285.( $&7,1*6(&5(7$5<2)9(7(5$16$))$,56$33(//(( 0(*+$1*(17,/($1'+$52/'++2))0$1,17(59(1256 %HIRUH3,(76&+%$57/(<DQG$//(1Judges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ee86&G$%%Scarborough v. Principi86Owens v. Brown9HW$SS7KHVHIRUPDO UHTXLUHPHQWVDUHDOOPHWKHUH%XWWKHUHLVPRUHWRWKHVWRU\ &ULWLFDOO\LPSRUWDQW²LQGHHGGLVSRVLWLYH²IRUWKHUHVROXWLRQRIWKLVPDWWHU($-$IHHVDUH SD\DEOHWRDQGWKHSURSHUW\RIWKHYHWHUDQQRWDYHWHUDQ VDWWRUQH\VSee Astrue v. Ratliff86 Carpenter v. Principi9HW$SS($-$DZDUGVEHORQJWRWKH FODLPDQWQRWKLVRUKHUDWWRUQH\$VVXFKDWWRUQH\VGRQRWKDYHLQGHSHQGHQWVWDQGLQJHYHQWR DSSO\IRU($-$IHHVSee, e.g.Oguachuba v. I.N.S.)GG&LU 'HVSLWHWKHFODULW\RIWKH6XSUHPH&RXUW VKROGLQJLQRatliff WKDW($-$IHHVDUHWKHSURSHUW\ RIWKHFOLHQWWKHLQWHUYHQRUVPDLQWDLQWKDWWKH&RXUWVKRXOGJUDQWWKHLUDSSOLFDWLRQGHVSLWHWKHLU IRUPHUFOLHQW VFOHDUREMHFWLRQV 7KHLQWHUYHQRUVDUJXHWKDWWKH\DUHHQWLWOHGWRFODLP($-$IHHV IRUWKHLUZRUNLQUHSUHVHQWLQJWKHDSSHOODQWEHFDXVHWKHIHHDJUHHPHQWKHVLJQHGDXWKRUL]HG WKHPWRFODLPIHHVDQGKLVVLJQDWXUHRQWKHFRQWUDFWUHIOHFWHGKLVFRQVHQWWRWKHDSSOLFDWLRQWKH DSSHOODQWZRXOGEHXQMXVWO\HQULFKHGLIWKH&RXUWGHQLHVDQ($-$DZDUGDQGSROLF\FRQFHUQV QHFHVVLWDWH D UXOLQJ LQ WKHLU IDYRU See generally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ee 0HJKDQ*HQWLOH V)HE1RWLFHRI$SSHDUDQFHDW 7KHLQWHUYHQRUVDUJXHWKDWWKHDSSHOODQW VREMHFWLRQVWRWKH($-$DSSOLFDWLRQDUHDQDWWHPSW WRFLUFXPYHQWKLVREOLJDWLRQVXQGHUWKH$JUHHPHQWDQGKLVVXEVHTXHQWRSSRVLWLRQWR>WKH($-$ DSSOLFDWLRQ@ UHSUHVHQW>V@ ZLOOIXO PLVFRQGXFW DQG IDLOXUH WR FRPSO\ ZLWK WKH WHUPV RI WKH $JUHHPHQW,QWHUYHQRUV 5HVSDW7KH\FRQWHQGWKDWWKH$JUHHPHQWDOORZVWKHPWRVHHNIHHV DQG UHFRJQL]HV >WKHLU@ DELOLW\ WR FROOHFW IHHV HYHQ DIWHU ZLWKGUDZDO RI UHSUHVHQWDWLRQ Id. (VVHQWLDOO\ WKH\ LQWHUSUHW WKH IHH DJUHHPHQW WR UHSUHVHQW WKH DSSHOODQW V FRQVHQW WR WKH ($-$ DSSOLFDWLRQPDNLQJKLVSUHVHQWREMHFWLRQVPHULWOHVV 7KH LQWHUYHQRUV PD\ YHU\ ZHOO EH FRUUHFW WKDW WKH $JUHHPHQW UHSUHVHQWV WKH DSSHOODQW V H[SOLFLW RU LPSOLHG FRQVHQW IRU WKHLU VHHNLQJ RI ($-$ IHHV 7KH\ PD\ DOVR EH FRUUHFW WKDW KLV REMHFWLRQWRWKH($-$DSSOLFDWLRQLVZLOOIXOPLVFRQGXFWDQGIDLOXUHWRFRPSO\ZLWKWKHWHUPVRI WKH$JUHHPHQWId.,QRWKHUZRUGVWKH\PD\EHFRUUHFWWKDWWKHDSSHOODQWLVLQEUHDFKRIFRQWUDFW ,WPD\DOVREHWKDWWKHDSSHOODQWZLOOEHXQMXVWO\HQULFKHGLIZHGRQRWJUDQWWKHDSSOLFDWLRQId. 2QWKHLQWHUYHQRUV YLHZRIWKHIDFWVWKHODZVKRXOGSUHFOXGHVXFKDUHVXOW 7KHSUREOHPZLWKWKHLQWHUYHQRUV DUJXPHQWVKRZHYHULVWKDWWKHSURSHUUHPHG\IRUVXFK FODLPV LV D FRPPRQODZ EUHDFK RI FRQWUDFW RU XQMXVW HQULFKPHQW DFWLRQ FDXVHV RI DFWLRQ RYHU ZKLFKWKLV&RXUWODFNVMXULVGLFWLRQSee In re Fee Agreement of Cox (In re Cox)9HW$SS vacated on other grounds, Cox v. West)G)HG&LU7KH&RXUW V MXULVGLFWLRQLVSUHGLFDWHGRQD%RDUGGHFLVLRQ86&$VSDUWRIWKDWUHYLHZZHPD\ DOVRDGMXGLFDWHDSSOLFDWLRQVXQGHUWKH($-$86&G$)%XWWKDWLVQRW ZKDWLQWHUYHQRUVFDOORQXVWRGR7KHLUDVVHUWHGULJKWWRSD\PHQWDULVHVQRWIURPWKH($-$EXW 7KHLQWHUYHQRUVDUHFRUUHFWDERXWRQHSRLQW7KHODZLVFOHDUWKDWLIWKH($-$UHTXLUHPHQWVDUHRWKHUZLVH VDWLVILHGFRXQVHOZKRKDYHEHHQGLVFKDUJHGEHIRUHUHVROXWLRQRIDFDVHPD\VWLOOUHFHLYHDIHHSee, e.g.Bowling v. Principi9HW$SS7KLVOHJDOSULQFLSOHGRHVQRWDVVLVWWKHLQWHUYHQRUVKRZHYHUEHFDXVHLWGRHV QRWPHDQWKDWIRUPHUFRXQVHOPD\REWDLQDIHHXQGHUWKH($-$RYHUWKHLUIRUPHUFOLHQW VREMHFWLRQ7KHLQWHUYHQRUV FRQVLVWHQWO\PLVVWKHLPSRUWDQFHRIWKDWIDFW)RUH[DPSOHZKHQDWWHPSWLQJWRH[SODLQZK\WKHSULQFLSOHIURPRatliff LVQRWIDWDOWRWKHLUFODLPWKHLQWHUYHQRUVQRWHWKDWWKHRQO\GLIIHUHQFHEHWZHHQWKLVVLWXDWLRQDQGDQ\RWKHUVLWXDWLRQ XQGHUWKH($-$LVWKDWWKHLUIRUPHUFOLHQWFRPSODLQHGWRWKH&RXUWDERXW>WKHDSSOLFDWLRQ@,QWHUYHQRUV 5HVSDW 7KDWGLIIHUHQFHLVGLVSRVLWLYHEHFDXVHWKH($-$IHHEHORQJVWRWKHFOLHQWRatliff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olden v. Peake9HW$SS DQGMartins v. Principi9HW$SSDVH[DPSOHVRIVLWXDWLRQVLQZKLFKWKH&RXUW KDVVXVSHQGHGFHUWDLQUHTXLUHPHQWVRURYHUORRNHGGHIHFWLYH($-$DSSOLFDWLRQVZKHUHDYHWHUDQ ZRXOGEHILQDQFLDOO\KDUPHGRWKHUZLVH,QWHUYHQRUV 5HVSDW 7KHLUDUJXPHQWPLVVHVWKHIXQGDPHQWDOQDWXUHRI($-$IHHV7KHVLPSOHIDFWLVWKDW($-$ IHHV EHORQJ WR OLWLJDQWV QRW WKHLU DWWRUQH\V Ratliff 86DW 7KH 6L[WK &LUFXLW DSWO\ H[SODLQHG WKLV FRQFHSW LQ Bryant v. Commissioner of Social Security 1RWKLQJ LQ WKH ($-$ VXJJHVWVWKDWDOOSHUVRQVSHUIRUPLQJVHUYLFHVIRUWKH SUHYDLOLQJSDUW\ PD\VHSDUDWHO\DVVHUWFODLPV IRU FRPSHQVDWLRQ IURP WKH *RYHUQPHQW 5DWKHU &RQJUHVV DSSHDUV WR KDYH LQWHQGHG WKDW WKHVH SHUVRQV²LQFOXGLQJWKHSDUW\ VDWWRUQH\²UHFHLYHWKHLUFRPSHQVDWLRQIURPWKHSDUW\ZKRXWLOL]HV WKHLUVHUYLFHV)GWK&LU7KHBryantFRXUWDOVRQRWHGWKDWDFWVRI&RQJUHVV RWKHU WKDQ WKH ($-$ H[SOLFLWO\ SURYLGH IRU WKH GLUHFW SD\PHQW RI DWWRUQH\V IHHV WR D OLWLJDQW V DWWRUQH\UDWKHUWKDQWKHOLWLJDQWFRQFOXGLQJWKDW>L@I&RQJUHVVKDGLQWHQGHGIRU($-$IHHVWREH DZDUGHGWRWKHSDUW\ VDWWRUQH\LWFRXOGKDYHH[SOLFLWO\GRQHVRId. :KLOHLWLVWUXHWKDWWKHDSSHOODQWPD\EHILQDQFLDOO\GLVDGYDQWDJHGE\KDYLQJWROLWLJDWHD EUHDFKRIFRQWUDFWRUXQMXVWHQULFKPHQWFODLPKHKDVDIILUPDWLYHO\DQGFOHDUO\GHFLGHGWRSUHYHQW WKHDZDUGLQJRIDWWRUQH\V IHHVZKLFKLVKLVULJKWWRGR 1RSROLF\FRQFHUQVFDQRYHUULGHDYHWHUDQ VFOHDUULJKWWRUHIXVHWRDSSO\IRU($-$IHHV ,QGHHGDVWKH6XSUHPH&RXUWVWDWHGLQRatliff>W@KHIDFWWKDWWKH>($-$@VWDWXWHDZDUGVWRWKH SUHYDLOLQJSDUW\IHHVLQZKLFKKHUDWWRUQH\PD\KDYHDEHQHILFLDOLQWHUHVWRUDFRQWUDFWXDOULJKW GRHVQRWHVWDEOLVKWKDWWKHVWDWXWH DZDUGV WKHIHHVGLUHFWO\WRWKHDWWRUQH\>,QIDFW@WKHVWDWXWH V 7KLVLVQRWWRVD\WKDWWKH&RXUWKDVQRMXULVGLFWLRQWRFRQVLGHUDIHHDJUHHPHQW:HGREXWWKDWDXWKRULW\LV OLPLWHG7KLV&RXUWRQO\KDVWKHDXWKRULW\WRLQWHUSUHWIHHDJUHHPHQWVVRWKDWZHPD\SROLFHIHHVWKDWDUHH[FHVVLYHRU XQUHDVRQDEOH86&G:HODFNWKHSRZHUWRHQIRUFHRUHYHQLQYDOLGDWHIHHDJUHHPHQWVSee In re Cox 9HW$SSDWQRWLQJWKDWLI&RQJUHVVLQWHQGHGIRUWKH&RXUWWRKDYHVXFKDXWKRULW\WKH&RXUWDSSHDUVWRODFN WKHPHDQVWRHIIHFWXDWHVXFKFRQWUDU\LQWHQWsee also In the Matter of Fee Agreement of Wick)G )HG&LU ,QGHHGZHODFNWKHmeansWRKHDUVXFKDFODLPSee In re Cox9HW$SSDW)RUH[DPSOHXQGHUWKH &RQVWLWXWLRQERWKWKHDSSHOODQWDQGLQWHUYHQRUVZRXOGEHHQWLWOHGWRDWULDOE\MXU\86&2167$0(1'9,,DQGWKH DSSHOODQWZRXOGKDYHWKHULJKWWRUDLVHFRXQWHUFODLPVsee, e.g.,)(' 5 &,9 37KLV&RXUWFDQQRWSURYLGHVXFK SURWHFWLRQVDQGSURFHGXUHV 7KHLQWHUYHQRUVDOVRDUJXHWKDWWKHLUILUPVKRXOGEHDZDUGHGWKHIHHVEHFDXVHWKH\DUHDUDUHQRQSURILW ODZILUPWKDWUHSUHVHQWVLWVFOLHQWVRQUHPDQGHGRUUHYHUVHGFODLPVIRUIUHH>@,QWHUYHQRUV 5HVSDW7KH\FRQWHQG WKDWLIWKH&RXUWZHUHWRGLVPLVVWKH($-$DSSOLFDWLRQ($-$ZRXOGEHFRPHPHDQLQJOHVVDQGLQFUHDVLQJQXPEHUVRI YHWHUDQVZRXOGEHXQUHSUHVHQWHGDWWKLV&RXUWId.DW7KHLQWHUYHQRUV QRQSURILWVWDWXVLVLUUHOHYDQWSee Froio v. McDonald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