Manning v. Astrue

FILED
United States Court of Appeals
Tenth Circuit

December 20, 2007
PUBLISH Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

JANET C. MANNING,

Plaintiff-Appellant,
No. 06-7127
v.

MICHAEL J. ASTRUE, *
Commissioner, Social Security
Administration,

Defendant-Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF OKLAHOMA
(D.C. No. 04-CV-21-SPS)

Submitted on the briefs: **

Richmond J. Brownson, Timothy M. White, Tulsa, Oklahoma, for
Plaintiff-Appellant.

Peter D. Keisler, Assistant Attorney General; William Kanter, Michael E.
Robinson, Attorneys, Appellate Staff, Civil Division, Department of Justice,
Washington, D.C. (Sheldon J. Sperling, United States Attorney, Muskogee,
Oklahoma, of Counsel) for Defendant-Appellee.

*
Pursuant to Fed. R. App. P. 43(c)(2), Michael J. Astrue is substituted for
Jo Anne B. Barnhart as appellee in this appeal.
**
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument.
Before HENRY and ANDERSON, Circuit Judges, and BRORBY, Senior Circuit
Judge.

ANDERSON, Circuit Judge.

Janet C. Manning appeals the district court’s denial of a Fed. R. Civ. P. 60

motion requesting that the court either set aside an administrative offset to an

award of attorney’s fees the court made to her under the Equal Access to Justice

Act (EAJA), 28 U.S.C. § 2412(d), or, alternatively, amend the fee order to award

the EAJA fees to her counsel. The very narrow issues before us on appeal are

(1) whether the EAJA attorney’s fees award should have been paid to

Ms. Manning or to her attorney in the first instance and (2) if the fees were

properly paid to Ms. Manning, are those fees subject to administrative offset

under the Debt Collection Improvement Act of 1996, 31 U.S.C. § 3716, for

student loan debts owed by Ms. Manning to the United States Department of

Education. Because we conclude the district court properly made the attorney’s

fees award to Ms. Manning and that award was subject to administrative offset for

her unpaid student loan debts, we affirm.

-2-
 BACKGROUND

The district court 1 reversed the Commissioner’s denial of supplemental

security income (SSI) benefits to Ms. Manning and remanded for further

proceedings. Ms. Manning then moved in that court for an award of attorney’s

fees to her counsel of $5,958.30 under the EAJA. The Commissioner did not

object, and the district court awarded the fees, ordering payment to Ms. Manning

as the prevailing party. In addition, the court ordered that if Ms. Manning’s

attorney were awarded any fees pursuant to 42 U.S.C. § 406(b)(1), which permits

payment of fees to an attorney out of past due benefits, the attorney must refund

the smaller amount to her pursuant to Weakley v. Bowen, 803 F.2d 575, 580

(10th Cir. 1986).

Thereafter, the Social Security Office of the General Counsel notified

Ms. Mannings’ attorney that the district court had ordered the Social Security

Administration to pay attorney’s fees in the amount of $5,958.30 under the EAJA

and that he would “soon receive a check payable to Janet C. Manning and

Timothy White and Associates c/o Richmond Brownson, in accordance with the

[district court’s order].” Aplt. App. at 58. Counsel, however, received a United

States treasury check made payable to “Janet Manning c/o Timothy White &

1
The parties agreed that the magistrate judge would conduct all proceedings
in this case. Thus, we refer to the proceedings before and the decision of the
magistrate judge as before and by the district court.

-3-
Associates” in the amount of $3,992.18. Id. at 59. Under the authority of the

Debt Collection Improvement Act of 1996, the United States had administratively

offset the EAJA award by $1,966.12, an amount Ms. Manning owed to the United

States Department of Education on an outstanding school loan debt. 2

Ms. Manning’s counsel then moved the district court, on his own behalf,

either to set aside the alleged wrongful administrative offset or to correct, under

Fed. R. Civ. P. 60(a), the alleged clerical error of awarding attorney’s fees

directly to Ms. Manning rather than to her attorney. Aplt. App. at 38. Counsel

argued that the offset should be set aside because (1) EAJA fees are income to

counsel; (2) the Debt Collection Improvement Act permits administrative offset

from disability benefits, but does not specifically mention administrative offset

from EAJA fees; (3) counsel has a de facto lien against the fees that should

receive priority over any claim by the government; and (4) under Weakley,

803 F.2d at 580, if a claimant later receives disability benefits resulting in the

claimant’s attorney being awarded fees under § 406(b)(1), then the attorney must

refund the smaller of the EAJA or the § 406(b)(1) fees to the claimant, thereby

suggesting that the intent of the EAJA is to compensate counsel.

In addition to filing the motion, counsel contacted the Department of

Education to resolve this matter administratively. The Department initially

indicated that it was in the process of refunding the offset monies. Aplt. App. at

2
Ms. Manning has never disputed having an unpaid student loan debt.

-4-
63. Later, however, the Department changed course and determined it would not

refund the offset. After efforts to resolve the matter administratively failed, the

Commissioner stipulated that the district court’s order should be corrected to

award attorney’s fees to Ms. Manning’s attorney. The court declined to honor the

stipulation, however. The court first decided that the motion should have been

made pursuant to Rule 60(b)(1), rather than Rule 60(a), because there was no

clerical error as the court had intended to award attorney’s fees to Ms. Manning,

the prevailing party, and not to her attorney. Construing the motion as filed under

Rule 60(b)(1), the court denied relief, finding that under the clear language of

28 U.S.C. § 2412(d)(1)(A), the EAJA payment was properly made to

Ms. Manning, the prevailing party, and not to her attorney. The court reasoned

that to ignore the clear statutory language and to award fees directly to

Ms. Manning’s attorney to circumvent the offset would

summarily decide [unresolved] disputes not properly before the
Court: (i) whether the United States may legally assert an offset
against fees awarded to the Plaintiff under the EAJA; (ii) whether the
Plaintiff’s attorney has an enforceable lien on the EAJA fee award
arising out of his contract with the Plaintiff; and, (iii) whether any
attorney’s lien has priority over the government’s right of offset.

Aplt App. at 76-77 (citation omitted). Ms. Manning appealed.

-5-
 ANALYSIS

I. What is the Scope of this Appeal?

In this section, we set forth the issues that are the basis for this appeal and

discuss why we are not addressing other issues raised on appeal by Ms. Manning.

As indicated above, we confine our disposition to the following two issues:

(1) whether attorney’s fees under the EAJA are payable to Ms. Manning or to her

attorney and (2) if the attorney’s fees are payable to Ms. Manning, whether the

fees may be offset under the Debt Collection Improvement Act for an outstanding

student loan debt owed by Ms. Manning to the Department of Education. The

first issue was raised in the district court by Ms. Manning and later by her counsel

on his own behalf and by his own motion. The district court, as indicated above,

addressed this issue, ruling on it adversely to counsel. The second issue was not

ruled on by the district court. Ms. Manning raises the issue on appeal, however,

and the Commissioner responds, arguing that any EAJA award to Ms. Manning is

subject to offset. While technically we could avoid deciding this issue because it

was not ruled on by the district court, we choose to consider it for two reasons:

(1) because the district court held that the fee award was to Ms. Manning as the

prevailing party, the court effectively held that the debt could be offset and

(2) the first and second issues are intertwined, making it advisable to address the

second issue.

Ms. Manning also argues on appeal that counsel “probably” has an

-6-
enforceable lien on the EAJA fee award with priority over the government. Aplt.

Br. at 26. This argument was not adequately raised or briefed in the district court

and was not ruled on by that court. Due to the insufficient development in the

district court, the lack of an adequate record on appeal, and the lack of a district

court ruling, we do not address any issue concerning an attorney’s lien.

Specifically, we decline to address whether an attorney’s lien attached to the

award of attorney’s fees; if a lien attached, how that lien attached; how to enforce

an attached attorney’s lien; how to collect on the attorney’s lien; or whether a lien

would have priority. 3

II. Are the EAJA Attorney’s Fees Payable to Ms. Manning or to Her Attorney?

Ms. Manning does not dispute the district court’s finding that her motion

was properly filed under Rule 60(b). We review the denial of Rule 60(b) relief

for an abuse of discretion. See Zurich N. Am. v. Matrix Serv., Inc., 426 F.3d

1281, 1289 (10th Cir. 2005). Under Rule 60(b)(1), a court may relieve a party

from an order based on “mistake, inadvertence, surprise, or excusable neglect.”

Fed. R. Civ. P. 60(b)(1). A “mistake” may occur if the district court made a

substantive mistake of law in its order. Yapp v. Excel Corp., 186 F.3d 1222, 1231

(10th Cir. 1999).

3
Also, any debts other than student loans are not part of this appeal. For
example, we do not address any questions concerning unpaid child support
payments or creditors’ rights in intervening bankruptcy actions. The resolution of
these issues must be addressed when they arise in an appropriate case with a
proper record.

-7-
 Applying these standards, we conclude that there was no mistake

warranting Rule 60(b)(1) relief, and, therefore, the district court did not abuse its

discretion in denying Ms. Manning’s motion. In reaching this conclusion, we

first look to the EAJA statute.

When interpreting the language of a statute, the starting point is
always the language of the statute itself. If the language is clear and
unambiguous, the plain meaning of the statute controls. A statute is
ambiguous when it is capable of being understood by reasonably
well-informed persons in two or more different senses.

McGraw v. Barnhart, 450 F.3d 493, 498 (10th Cir. 2006) (quotation omitted).

The EAJA statute provides that “a court shall award to a prevailing party

other than the United States fees and other expenses . . . incurred by that party in

any civil action . . . , including proceedings for judicial review of agency action,

brought by or against the United States . . . , 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) (emphasis

added). As the district court found, this statutory language clearly provides that

the prevailing party, who incurred the attorney’s fees, and not that party’s

attorney, is eligible for an award of attorney’s fees. See Gisbrecht v. Barnhart,

535 U.S. 789, 796 (2002) (“Under EAJA, a party prevailing against the United

States in court, including a successful Social Security benefits claimant, may be

awarded fees payable by the United States if the Government’s position in the

litigation was not ‘substantially justified.’”); McGraw, 450 F.3d at 497, 503

-8-
(stating “EAJA award is to the claimant, while counsel receives [the § 406(b)]

award” and EAJA “award is to the claimant, who may or may not tender that

award to counsel, regardless of their agreement”); Phillips v. Gen. Servs. Admin.,

924 F.2d 1577, 1582 (Fed. Cir. 1991) (per curiam) (“As the statute requires, any

[EAJA] fee award is made to the ‘prevailing party,’ not the attorney.”); see also

City of Burlington v. Dague, 505 U.S. 557, 572 (1992) (Blackmun, J., dissenting)

(“The provisions at issue in this case, [the Clean Water Act and the Solid Waste

Disposal Act,] like fee-shifting provisions generally, authorize fee awards to

prevailing parties, not their attorneys.”); Venegas v. Mitchell, 495 U.S. 82, 87

(1990) (“Section 1988 [4] makes the prevailing party eligible for a discretionary

award of attorney’s fees. . . . [I]t is the party, rather than the lawyer, who is . . .

eligible . . . .”); id. at 89 (“[W]e have already rejected the argument that the

entitlement to a § 1988 award belongs to the attorney rather than the plaintiff.”);5

4
In part, 42 U.S.C. § 1988(b) states that “[i]n any action or proceeding to
enforce a provision of sections 1981, 1981a, 1982, 1983, 1985 and 1986 of [title
42], . . . the court, in its discretion, may allow the prevailing party, other than the
United States, a reasonable attorney’s fee as part of the costs.”

5
Congress has enacted numerous fee-shifting statutes awarding fees to
prevailing parties. See, e.g., W. Va. Univ. Hosps., Inc. v. Casey, 499 U.S. 83,
88-89 & n.4 (1991) (listing some fee-shifting statutes), superceded by statute,
Civil Rights Act of 1991, Pub. L. No. 102-166, § 113, 105 Stat. 1071, 1079
(amending § 1988 to permit recovery of expert witness fees). The Supreme Court
has held that legal principles from cases addressing other fee-shifting statutes,
such as § 1988, apply to EAJA cases. See, e.g., Buckhannon Bd. & Care Home,
Inc. v. W. Va. Dep’t of Health & Human Res., 532 U.S. 598, 603 n.4 (2001)
(continued...)

-9-
Evans v. Jeff D., 475 U.S. 717, 730, 731-32 (1986) (holding in § 1988(b) case that

Congress gave prevailing party statutory eligibility for discretionary award of

attorney’s fees and statute did not bestow fee award on attorney); Weeks v. Indep.

Sch. Dist. No. I-89, 230 F.3d 1201, 1213 (10th Cir. 2000) (relying on case law

addressing attorney’s fees under § 1988 and deciding that “prevailing party”

language in Fed. R. Civ. P. 54(d) refers to party and not to attorney); Turner v.

Sec’y of Air Force, 944 F.2d 804, 808 & n.2 (11th Cir. 1991) (relying on case law

dealing with § 1988 and holding in 42 U.S.C. § 2000e-5(k) case that “[i]t is clear

that the award of attorneys’ fees belongs to the prevailing party, not to the

attorney representing the party”); United States v. Adkinson, 256 F. Supp. 2d

1297, 1318 (N.D. Fla. 2003) (“[T]he [EAJA] fee award belongs to the client, and

an attorney has no independent right to a fee award under the EAJA.”), aff’d,

360 F.3d 1257 (11th Cir. 2004) (per curiam).

In addition to the “prevailing party” language, other parts of the EAJA

statute “affirmatively rule out the attorney as a recognized applicant for fees and

expenses.” Panola Land Buying Ass’n v. Clark, 844 F.2d 1506, 1511 (11th Cir.

5
(...continued)
(recognizing that Court has interpreted fee-shifting provisions consistently);
Indep. Fed’n of Flight Attendants v. Zipes, 491 U.S. 754, 758 n.2 (1989) (“We
have stated in the past that fee-shifting statutes’ similar language is ‘a strong
indication’ that they are to be interpreted alike.”); Hensley v. Eckerhart, 461 U.S.
424, 433 n.7 (1983) (deciding that interpretation of term “prevailing party” in
§ 1988 is “generally applicable in all cases in which Congress has authorized an
award of fees to a ‘prevailing party’”).

-10-
1988). In defining “fees and other expenses,” the EAJA treats attorneys in the

same manner as it treats “expert witnesses, engineers, scientists, analysts, or other

persons found by the court to be” needed to prepare the case. Id.; see also

28 U.S.C. § 2412(d)(2)(A). In addition, the EAJA requires that to apply for fees

and other expenses, the prevailing party must submit an itemized statement from

the attorney or expert stating the time expended and the fee rate. 28 U.S.C.

§ 2412(d)(1)(B). Lastly, the EAJA statute conditions eligibility for attorney’s

fees upon the prevailing party, not the attorney, not having a net worth exceeding

$2,000,000. Id. The EAJA therefore permits attorney’s fees reimbursement to

financially eligible prevailing parties, who make a proper application, and not to

their attorneys.

Although the statutory language alone makes it clear that the prevailing

party and not the attorney may recover an award of attorney’s fees, the legislative

history for the EAJA also makes it clear that certain prevailing parties, and not

their attorneys, may recover attorney’s fees when the government’s action was not

substantially justified. See H.R. Rep. No. 96-1418, at 5-6 (1980), reprinted in

1980 U.S.C.C.A.N. 4984, 4984. The EAJA

rests on the premise that certain individuals . . . may be deterred
from seeking review of . . . unreasonable governmental action
because of the expense involved in securing the vindication of their
rights. The economic deterrents to contesting governmental action
are magnified in these cases by the disparity between the resources
and expertise of these individuals and their government. The
purpose of the bill is to reduce the deterrents and disparity by

-11-
 entitling certain prevailing parties to recover an award of attorney
fees, expert witness fees and other expenses against the United
States, unless the Government action was substantially justified.

Id. This statement of purpose directly addresses the question whether the EAJA

fees are for the claimant or for the claimant’s attorney and clearly states that the

fees are for the claimant. See Panola Land Buying Ass’n, 844 F.2d at 1511

(noting that federal fee statutes were not “enacted for the benefit of the Bar” but

“for the benefit of the persons the statutes are designed to reach”). “[T]he

specific purpose of the EAJA is to eliminate for the average person the financial

disincentive to challenge unreasonable governmental actions.” Comm’r v. Jean,

496 U.S. 154, 163 (1990) The EAJA therefore was not enacted for the benefit of

counsel to ensure that counsel gets paid. Panola Land Buying Ass’n, 844 F.2d at

1511.

Ms. Manning, however, maintains that uncodified portions of the EAJA

anticipate that her attorney will receive the EAJA fee award. In particular, she

points to Pub. L. 99-80, § 3, 99 Stat. 186 (1985). This section, however, refers to

the fact that the attorney must return to the claimant the smaller of the two fee

awards under the EAJA or under 42 U.S.C. § 406(b)(1). It does not state that the

attorney is entitled to receive the full amount of the EAJA fees awarded. Rather,

the purpose is to ensure that the attorney does not receive double compensation.

The language of § 406(b)(1) further supports the conclusion that the EAJA

award is for the prevailing party and not her attorney. Under § 406(b), the

-12-
Commissioner “must withhold and pay a reasonable attorney’s fee directly to the

attorney out of the claimant’s past-due benefits, thus guaranteeing payment to the

attorney and avoiding collection problems, but the amount of the attorney’s fee

that must be withheld and directly paid to the attorney is limited to the maximum

of 25% of past-due benefits.” Burnett v. Heckler, 756 F.2d 621, 626 (8th Cir.

1985). Thus, unlike the EAJA, § 406(b) expressly provides for payment to the

attorney. Congress has not substantially amended § 406(b) since enacting the

EAJA. From this, we draw the conclusion that Congress knows what language to

use to award attorney’s fees to an attorney and what language to use when it

chooses to award the fees to the prevailing party. Congress could have worded

the EAJA statute to award attorney’s fees to the attorney, but it did not do so.

Further support for the conclusion that the EAJA award is for the prevailing

party and not for the attorney is the settled law that the attorney does not have

standing to apply for the EAJA fees; that right belongs to the prevailing party.

See Oguachuba v. INS, 706 F.2d 93, 97-98 (2d Cir. 1983). Just as a prevailing

party cannot assign her underlying substantive action, she cannot assign her right

to seek attorney’s fees, which is derivative of the underlying substantive action,

to her attorney. Cf. Pony v. County of Los Angeles, 433 F.3d 1138, 1140, 1142-44

(9th Cir.) (addressing attorney’s fees under § 1988 and rejecting as invalid under

California law plaintiff’s putative assignment of right to apply for attorney’s

fees), cert. denied, 126 S. Ct. 2864 (2006). Only after the prevailing party

-13-
exercises her right to seek an award of attorney’s fees under the EAJA and

obtains an award may her attorney pursue collection of the attorney’s fees. See

id. at 1142, 1144.

Citing Willis v. Government Accountability Office, 448 F.3d 1341, 1347

(Fed. Cir. 2006), cert. denied, 127 S. Ct. 1356 (2007), and United States ex rel.

Virani v. Jerry M. Lewis Truck Parts & Equipment, Inc., 89 F.3d 574, 577

(9th Cir. 1996), Ms. Manning argues that even though the EAJA statute gives her

the right to claim the fees, her attorney has the right to receive the awarded fees.

Because these cases are distinguishable, we reject this argument.

The Ninth Circuit has held that Virani, a qui tam action under the False

Claims Act, does not apply to fee awards under § 1988. Gilbrook v. City of

Westminster, 177 F.3d 839, 874 (9th Cir. 1999). The court noted that there are

significant differences between a fee award in a qui tam action and in a § 1988

action. Gilbrook, 177 F.3d at 874. Those differences are (1) that the Supreme

Court has held that fee awards under § 1988 are bestowed upon the prevailing

party and not the attorney; (2) that the governmental-harm concerns present in a

qui tam action are not present in a civil rights action; and (3) that denying direct

payment to attorneys is consistent with § 1988’s purpose of attracting counsel to

represent civil rights plaintiffs. Id. (citing Jeff D., 475 U.S. at 731-32). Gilbrook

therefore specifically held that “[i]n the absence of a contractual assignment [of

the fee award] to counsel, § 1988 requires that attorney fee awards be made

-14-
directly to the prevailing party.” 177 F.3d at 875. Based on our previous

discussion that legal principles from § 1988 cases apply to EAJA cases, we

conclude that Gilbrook’s analysis and holding are equally applicable in an EAJA

case.

Willis, a case under the Civil Service Reform Act, is distinguishable on the

ground that it addressed the issue whether the attorney had standing to claim

attorney fees under that Act. 448 F.3d at 1342, 1345. It cited Virani with

approval only to differentiate between the plaintiff’s right to seek the fees and the

attorney’s right to collect the awarded fees. Willis, 448 F.3d at 1347. But in a

footnote, Willis recognized that, in an EAJA context, the client, not the lawyer,

has the right to collect the fees. Id. at 1347 n.3 (citing FDL Techs., Inc. v. United

States, 967 F.2d 1578, 1580-81 (Fed. Cir. 1992), which addresses different EAJA

provision, 5 U.S.C. § 504(a)(1), but discusses 28 U.S.C. § 2412(d)(1)(A) and

determines they are comparable and that under both provisions prevailing party is

entitled to fee award).

Further, Ms. Manning argues that because pro se litigants are not eligible

for the award of EAJA attorney’s fees, see Demarest v. Manspeaker, 948 F.2d

655, 655-56 (10th Cir. 1991), the intention of the statute is to provide the attorney

with the award. But she fails to recognize that the purpose of the fee award is to

allow a claimant to present her claims without having to bear the cost of

-15-
litigation. See id. at 656. If one of the costs the successful claimant has borne is

attorney’s fees, then she may, if eligible, recover them under the statute.

Ms. Manning cites Dixon-Townsell v. Barnhart, 445 F. Supp. 2d 1283

(N.D. Okla. 2006), as authority for reversing an offset of the EAJA fee award. In

Dixon-Townsell, the Social Security claimant’s EAJA fee award was completely

offset under the Debt Collection Improvement Act of 1996 by an amount owed for

unpaid child support. Id. at 1284. The claimant moved either to set aside the

administrative offset or to correct under Rule 60(a) the clerical error of awarding

fees to the claimant. Dixon-Townsell, 445 F. Supp. 2d at 1284. The district court

granted Rule 60(a) relief, amending the order to state that the EAJA attorney’s

fees award should be paid to counsel, and not to the claimant. Dixon-Townsell,

445 F. Supp. at 1284-85. The court found that the offset could be set aside and

the Commissioner had the authority to retrieve the offset money pursuant to

31 C.F.R. § 285.4(h). Dixon-Townsell, 445 F. Supp. 2d at 1285. The court also

found that there was no authority to grant the EAJA fees to the claimant, because

the fees are intended to compensate counsel and not to generate income for the

claimant. Id. (citing Demarest, 948 F.2d at 656).

We reject the conclusions reached in Dixon-Townsell. First, it neither

discusses the plain language of the EAJA statute, nor considers the legislative

history or case law interpreting the statute. In Ms. Manning’s case, the award

was correctly made to her and not to her attorney based on the clear statutory

-16-
language that the award is to the prevailing party. See Reeves v. Barnhart,

473 F. Supp. 2d 1173, 1176-77 (M.D. Ala. 2007) (distinguishing and rejecting

Dixon-Townsell); see also McCarty v. Astrue, 505 F. Supp. 2d 624, 630-31

(N.D. Cal. 2007) (rejecting Dixon-Townsell as not persuasive). Dixon-Townsell’s

citation to Demarest was inapposite, because, as indicated above, that case set

forth the rule that pro se plaintiffs may not receive EAJA attorney’s fees awards,

and neither Mr. Dixon-Townsell nor Ms. Manning proceeded pro se. See Reeves,

473 F. Supp. 2d at 1177. And Demarest did not hold that the EAJA attorney’s

fees should be paid to counsel.

Continuing to argue that the EAJA award is for her attorney, Ms. Manning

contends that it is customary in the Tenth Circuit for the EAJA attorney’s fees to

be paid directly to counsel. It is true, as she points out, that this court in Weakley,

803 F.2d at 580, ordered the government to pay EAJA attorney’s fees to the

plaintiff’s attorney. But we did not address whether the Social Security claimant

or the claimant’s attorney was entitled to recover the fees under the EAJA statute.

We merely awarded attorney’s fees under § 406(b) and under the EAJA at the

same time. Weakley, 803 F.2d at 580. Because the EAJA fees were greater than

the § 406(b) fees, we ordered that counsel pay the smaller amount, represented by

the § 406(b) fees, to the claimant. Weakley, 803 F.2d at 580. We have, however,

more recently specifically stated in McGraw, based on analysis of the EAJA

-17-
language, that the EAJA award is to the claimant, whereas the § 406(b) award is

to counsel. 6 McGraw, 405 F.3d at 497. 7

Ms. Manning next argues that providing payment to her, instead of to

counsel, might result in counsel receiving no payment for the work he has

performed, thereby negating the purpose of the EAJA. She also contends that

paying all the EAJA fees to the claimant directly would have a chilling effect on a

claimant’s ability to obtain representation. Ms. Manning’s argument is purely

speculative. Even if it is true, the clear language of the statute provides that

attorney’s fees are paid to the prevailing party, not the attorney. And in Jeff D.,

475 U.S. at 741 n.34, the Supreme Court addressed and rejected a similar

argument:

6
The issue presented in McGraw was whether § 406(b)(1) “allows the
district court to award attorney’s fees to claimant’s counsel when the court
remands a Title II Social Security disability case for further proceedings and the
Commissioner ultimately determines that the claimant is entitled to an award of
past-due benefits.” McGraw, 450 F.3d at 495-96.
7
Other courts have ordered payment of the EAJA attorney’s fees directly to
attorneys. See, e.g., Garcia v. Sullivan, 781 F. Supp. 969, 974 (S.D.N.Y. 1991);
Price v. Sullivan, 756 F. Supp. 400, 405 (E.D. Wis. 1991); Barriger v. Bowen,
673 F. Supp. 1167, 1170 (N.D.N.Y. 1987). None of these cases addressed why
the fees were paid to counsel instead of to the claimant or whether the fee awards
belonged to counsel or to the claimant. The Seventh Circuit has noted that while
“[t]echnically the award of attorney’s fees under section 1988 is to the party, not
to his lawyer, . . . it is common to make the award directly to the lawyer where
. . . the lawyer’s contractual entitlement is uncontested.” Richardson v. Penfold,
900 F.2d 116, 117 (7th Cir. 1990).

-18-
 We are cognizant of the possibility that decisions by individual
clients to bargain away fee awards may, in the aggregate and in the
long run, diminish lawyers’ expectations of statutory fees in civil
rights cases. If this occurred, the pool of lawyers willing to represent
plaintiffs in such cases might shrink, constricting the “effective
assess to the judicial process” for persons with civil rights grievances
which the Fees Act was intended to provide. . . . We believe,
however, that as a practical matter the likelihood of this circumstance
arising is remote.

Ms. Manning argues that the district court ignored the taxation problems

that would occur to her if the EAJA fee award is paid directly to her. Like the

lien issues mentioned in the first section of this decision, the taxation issues were

not developed in the district court. But because, as discussed above, the EAJA

attorney’s fees belong to the prevailing party, we can easily conclude that

Ms. Manning is properly taxed on that income. Cf. Campbell v. Commissioner,

274 F.3d 1312, 1313-14 (10th Cir. 2001) (holding that award of attorney’s fees

under Title VII is income to former employee); Sinyard v. Commissioner,

268 F.3d 756, 757, 759 (9th Cir. 2001) (holding that attorney’s fees paid on

prevailing party’s behalf pursuant to court order approving settlement of Age

Discrimination in Employment Act class actions are income to prevailing party).

See generally Commissioner v. Banks, 543 U.S. 426, 438-39 (2005) (declining to

address argument that effectiveness of fee-shifting statutes is undermined by

treating statutory fee awards as income to plaintiff).

Although we conclude that the award of EAJA attorney’s fees is to

Ms. Manning and not to her attorney, we recognize that perhaps the answer is not

-19-
as clear as it would appear to be from the statutory language, legislative history,

and case law. Admittedly, it seems counter intuitive to hold that an award of

attorney’s fees does not go to the attorney, especially since the EAJA fees are

calculated based on the time spent by the attorney and based on the attorney’s

hourly rate, see 28 U.S.C. § 2412(d)(1)(B), (2)(A). Indeed, the answer to the

question “who do the fees go to” was not clear to the government, because it

switched positions during the course of this litigation. In the district court, it

consistently took the position that the award belonged to the attorney. But on

appeal, it took the position that the award belonged to Ms. Manning. 8 Despite the

government’s confusion, we are bound by the statutory language, legislative

history, and case law, which has been set forth in detail above.

8
On appeal, the Commissioner attempted to justify the stipulation as
follows.

Since district courts within the region from time to time have
ordered [the Social Security Administration] to pay EAJA fees
directly to counsel, see, e.g., Dixon-Townsell v. Barnhart,
445 F. Supp. 2d 1283, 1285 (N.D. Okla. 2006), the government
acquiesced in counsel’s belief that the magistrate judge might have
made a clerical error in awarding the EAJA fees here to the plaintiff
instead of her attorney. The magistrate judge, however, made clear
that he had not “committed a clerical error in awarding attorneys’
fees under the EAJA to the Plaintiff instead of awarding them to her
attorney.” Thus, the premise of the government’s stipulation was
invalid.

Aplee. Br. at 9 n.4 (appendix citation omitted).

-20-
III. Are the EAJA Fees Subject to Offset Under the Debt Collection Improvement
Act for Unpaid Student Loan Debts?

Under the Debt Collection Improvement Act, the Department of the

Treasury’s Financial Management Service has the authority to collect nontax

debts owed to the United States government by offsetting payments made by other

federal agencies. See 31 U.S.C. § 3716; 31 C.F.R. § 285.5(a)(1); see also Exec.

Order No. 13,019, 61 Fed. Reg. 51,763 (Sept. 28, 1996) (“[T]he primary purpose

of the Debt Collection Improvement Act is to increase the collection of nontax

debts owed to the Federal Government . . . .”). All federal payments, including

“fees,” are subject to administrative offset. 31 C.F.R. § 285.5(e)(1). The only

exceptions are for those payments specifically listed. Id. § 285.5(e)(2); see also

§ 285.5(e)(3)(i)(A) (noting that special rules apply to offset of Social Security

benefit payments, excluding SSI payments). One payment type excluded from

offset is payments for which a statute expressly prohibits offset. Id.

§ 285.5(e)(2)(v); see also 31 U.S.C. § 3716(e)(2). An EAJA award is not among

the listed exceptions in § 285.5(e)(2). Nor does the EAJA statute prohibit offset

of any fee award. See 28 U.S.C. § 2412. Furthermore, the Debt Collection

Improvement Act does not exempt an EAJA attorney’s fees award from offset.

See 28 U.S.C. § 3716. Thus, it is clear that the Debt Collection Improvement Act

is sufficiently broad to offset an EAJA fees award for an unpaid student loan debt

owed to the federal government.

-21-
 Ms. Manning argues that the district court abused its discretion by failing

to consider the holding in Lockhart v. United States, 546 U.S. 142 (2005), that the

United States may offset an outstanding school loan debt from Social Security

benefits beyond a ten-year statute of limitations period. She contends that

Lockhart did not make a similar holding with respect to an offset from the EAJA

attorney’s fees. Relying on McGraw, 450 F.3d at 497, she points out that the

EAJA fees are not paid out of Social Security benefits. This argument is without

merit, because the Higher Education Technical Amendments of 1991, Pub. L. No.

102-26, § 3, 105 Stat. 123, 124-25 (codified at 20 U.S.C. § 1091a(a)), which was

relied on in Lockhart, eliminated the statute of limitations for all student loan

collections. Thus, the district court did not abuse its discretion by failing to

consider that under Lockhart the government can recover outstanding student loan

debt from Social Security benefits.

Instead, the fact that Social Security benefits can be offset arguably

provides further support for the conclusion that the EAJA fees award can be

offset. The purpose of disability benefits is to provide “income required for

ordinary and necessary living expenses.” 20 C.F.R. § 404.508(a). To the extent

that the Debt Collection Improvement Act reaches Social Security disability

benefits, whose purpose is to provide income for living expenses, it certainly

follows that the Act includes EAJA fees. In comparison, attorney’s fees paid

-22-
directly to an attorney under § 406 are not subject to offset, simply because they

are paid directly to the attorney.

We conclude that the EAJA attorney’s fees award was properly paid to

Ms. Manning and that those fees were subject to administrative offset by the Debt

Collection Improvement Act for student loan debts she owed to the Department of

Education. The judgment of the district court is therefore AFFIRMED.

Ms. Manning’s unopposed motion to file an addendum of recent citations is

GRANTED.

-23-