Kerr Ex Rel. Kerr v. Commissioner of Social Security
874 F.3d 926
6th Cir.2017Background
- Hope Kerr sued for judicial review of the Social Security Administration’s denial of disability benefits for her deceased husband and obtained a sentence-four remand.
- Kerr moved for EAJA attorney’s fees ($3,206.25) and executed a pre-award assignment directing payment of any EAJA fee award to her counsel.
- The district court awarded the EAJA fees but refused to honor the pre-award assignment, concluding the Anti-Assignment Act (AAA) voided assignments made before a claim is allowed and payment issued; it awarded fees to Kerr as the prevailing party.
- The Commissioner initially argued the AAA barred the assignment but then exercised discretion to waive application of the AAA and paid the EAJA fees directly to Kerr’s attorney.
- Kerr filed a Rule 59(e) motion asking the court to rule the AAA did not apply and to order direct payment to counsel; the district court denied the motion as moot after the Commissioner paid counsel.
- The Sixth Circuit (per Judge Moore) held the case was not moot under the capable-of-repetition-yet-evading-review exception and proceeded to decide the purely legal questions on the merits, ultimately affirming that EAJA fees are payable to the prevailing party and that the AAA can bar pre-award assignments unless the government waives it.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Mootness of Rule 59(e) motion | Commissioner’s waiver did not extinguish the controversy; court erred to dismiss as moot | Commissioner paid counsel and thus rendered the motion moot | Case not moot because government’s prior assertion-and-waiver of AAA was capable of repetition yet evading review; appellate court reaches merits |
| Applicability of the Anti-Assignment Act to EAJA fee assignments | AAA cannot reach client-to-counsel assignments of judicial EAJA awards (Hobbs-based argument) | AAA can apply to EAJA assignments because EAJA awards are claims against the U.S. | AAA can apply; assignments made before claim allowance/payment may be void, though government may waive the AAA |
| Who is the proper recipient of EAJA fees | Kerr: assignment should permit direct payment to counsel | Commissioner: EAJA awards are payable to prevailing party and subject to offset; not directly to counsel absent waiver | EAJA awards are payable to the prevailing party (not automatically to counsel); assignments do not change that unless the government honors/waives AAA |
| Whether Commissioner must pay counsel when client assigns fees | Kerr: assignment obligates payment to counsel | Commissioner: discretion to honor or waive application of the AAA; not obligated to pay counsel directly | Commissioner may honor the assignment by waiver, but is not compelled by EAJA to pay counsel directly; district court may award to party |
Key Cases Cited
- Astrue v. Ratliff, 560 U.S. 586 (statutory EAJA fees are payable to the prevailing litigant and subject to government offset)
- Bryant v. Comm’r of Soc. Sec., 578 F.3d 443 (6th Cir. 2009) (EAJA fee awards belong to the prevailing party, not automatically to counsel)
- Turner v. Comm’r of Soc. Sec., 680 F.3d 721 (6th Cir. 2012) (contemplated AAA can render pre-award EAJA assignment void; fees paid to claimant absent waiver)
- United States v. Kim, 806 F.3d 1161 (9th Cir. 2015) (Anti-Assignment Act can invalidate assignment of statutory attorney-fee awards against the United States; government may waive the Act)
- Hobbs v. McLean, 117 U.S. 567 (1886) (defining a claim against the United States as a right to demand money from the United States)