Contingent Attorneys’ Fees Recognized as an Important Mechanism to Incentivize the Bar to Represent Clients Who Otherwise Would Not Have Representation

Today, a unanimous Supreme Court handed down its long-awaited decision in Astrue v. Ratliff, 2010 U.S. LEXIS 4763 (June 14, 2010), available here.  Justice Thomas wrote the opinion for the unanimous Court and I will discuss it momentarily.  Justice Sotomayor wrote an interesting concurrence joined only by Justices Stevens and Ginsburg.  Interestingly, Justice Souter did not join the concurrence.  The question at issue was whether the federal government could obtain an offset against a Social Security claimant’s award of attorneys’ fees in order to satisfy the claimant’s pre-existing debt to the federal government.  All Justices agreed with Justice Thomas’s textual analysis, which concluded that the fee award belongs to the litigant, not the lawyer, and thus the Equal Access to Justice Act (EAJA) fee award to a prevailing party, is an award to the claimant; is the property of the claimant; and may be monies that the government can secure to offset a debt that claimant has to it.

Nowhere in Justice Thomas’s opinion is there any mention of what effect the Court’s opinion may have on the willingness of lawyers to represent Social Security claimants going forward.  It is that matter that engages Justice Sotomayor who, in her concurring opinion, comes close to advocating that the Congress legislatively overrule the Court’s decision.  She decried the fact that “today’s decision will make it more difficult for the neediest litigants to find attorneys to represent them in cases against the Government.”  And, goes on to state:  “I ‘find it difficult to ascribe to Congress an intent to throw’ an EAJA litigant ‘a lifeline that it knew was a foot short . . . Given the anomalous nature of this result, and its frustrations of the very purposes behind the EAJA itself, Congress cannot lightly be assumed to have intended it.’”   

It is noteworthy that Justice Sotomayor’s sentiments regarding the need to incentivize attorneys to represent individuals who otherwise could not obtain representation, has quite recently been echoed by Judge Wilkinson of the Fourth Circuit, a judge whom many on the left have pilloried for years because of his judicial philosophy.  In In re Abrams & Abrams, P.A.; St. Martin, Williams and Bourque, 2010 U.S. App. LEXIS 10071 (4th Cir. May 18, 2010), available here, Judge Wilkinson, in reversing a district judge who had slashed a one-third contingency fee to “a mere 3%” of an $18 million personal injury settlement, stated that “contingency fees provide access to counsel for individuals who would otherwise have difficulty obtaining representation.”  Further, Judge Wilkinson states:  “As an advocate before the Kentucky Supreme Court noted as early as 1823, in the absence of contingency fees a client ‘may not have anything else to give, and without the aid of the matter in the contest, he can never sue for his right, not having otherwise the means to employ counsel’ (Rust v. Larue, 14 Ky. (4 Litt.) 411, 421 (1823) (quoted in Peter Karsten, Enabling the Poor to Have Their Day in Court:  The Sanctioning of Contingency Fee Contracts, a History to 1940, 47 DePaul L. Rev. 231, 238 (1998))).”

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