Shealey: EAJA, discharged attorneys

Shealey v. Wilkie, docket no. 2019-1057 (January 6, 2020)

HELD: Discharged attorneys lacked standing to seek fees under the EAJA

SUMMARY: Veteran hired legal aid organization to represent him in his appeal to the CAVC. The two attorneys represented the veteran for three months and learned, at the Rule 33 conference, that the Secretary planned to file a motion to dismiss the appeal. Based on the prospect of a dismissal, the attorneys advised the veteran to file a new claim. The veteran disagreed with their advice – and discharged the attorneys. He was represented by new counsel for the remainder of the appeal. The Court ultimately vacated and remanded the Board’s decision. There was no dispute that the veteran was a “prevailing party” in the appeal. 

The two prior attorneys then filed an application for fees under the Equal Access to Justice Act (EAJA) for the work they had done prior to their discharge. The government did not oppose the fee award – but the veteran did. The Court allowed the two attorneys to intervene – but then dismissed the EAJA application because it determined that they lacked standing to seek fees under the EAJA. 

The attorneys appealed to the Federal Circuit, which first found that the statutory “right” to fees under the EAJA is limited to the “prevailing party” and the prevailing party is the veteran, not the attorney. The Court next found that they did not have a right to assignment of the veteran’s EAJA claim under their fee agreement – because their claim for fees is against the government and the law prohibits such assignment unless the government has waived its objection to the assignment. Finally, the Court rejected the notion that the attorneys had third-party standing because even though the attorneys did have a “relationship” to the claimant (the veteran), the veteran was free to assert the fee claim on his own and his interest in settling the fee claim (or not pursuing it at all) would be impaired if the attorneys had standing. The Court affirmed the CAVC’s decision.