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Kerr v. Commissioner of Social Security

United States Court of Appeals, Sixth Circuit

November 1, 2017

Hope Kerr, for Hank W. Kerr, Deceased, Plaintiff-Appellant,
v.
Commissioner of Social Security, Defendant-Appellee.

          Argued: June 15, 2017

         Appeal from the United States District Court for the Western District of Kentucky at Louisville. No. 3:15-cv-00313.

         ARGUED:

          Mahesha P. Subbaraman, SUBBARAMAN PLLC, Minneapolis, Minnesota, for Appellant.

          Michael Jason Scoggins, SOCIAL SECURITY ADMINISTRATION, Chicago, Illinois, for Appellee.

         ON BRIEF:

          Mahesha P. Subbaraman, SUBBARAMAN PLLC, Minneapolis, Minnesota, Gregory T. Marks, GREG MARKS, P.S.C., Louisville, Kentucky, for Appellant.

          Meghan O'Callaghan, SOCIAL SECURITY ADMINISTRATION, Chicago, Illinois, for Appellee.

          Before: NORRIS, MOORE, and STRANCH, Circuit Judges.

          OPINION

          KAREN NELSON MOORE, Circuit Judge.

          Plaintiff-Appellant Hope Kerr (on behalf of her deceased husband Hank W. Kerr) appeals the judgment of a United States Magistrate Judge denying as moot her motion under Federal Rule of Civil Procedure 59(e). In April 2015, Kerr sought judicial review of the final decision of the Acting Commissioner of the Social Security Administration ("Commissioner") that Mr. Kerr was not entitled to disability benefits prior to his death. After the district court granted a joint motion to remand for further administrative proceedings, Kerr moved for attorney fees under the Equal Access to Justice Act ("EAJA"). Kerr specifically requested that any fee award be made payable directly to her attorney pursuant to an assignment between Kerr and the attorney. The district court concluded that it could not award fees directly to Kerr's lawyer because it concluded that the fee assignment violated the Anti-Assignment Act ("AAA"). Kerr subsequently filed a motion to amend or alter the district court's judgment pursuant to Rule 59(e) of the Federal Rules of Civil Procedure requesting that the court reverse the application of the AAA to her assignment with her lawyer, honor the fee award assignment, and order payment of the fees directly to Kerr's counsel. Before the district court could rule on the Rule 59(e) motion, the Commissioner paid the fee award to Kerr's counsel. The district court subsequently denied as moot Kerr's Rule 59(e) motion. For the reasons stated below, we AFFIRM the district court's judgment.

         I. BACKGROUND

         On April 27, 2015, Hope Kerr filed a civil action seeking judicial review of the final determination of the Acting Commissioner of the Social Security Administration that Kerr's husband was not disabled and therefore not entitled to any disability insurance benefits prior to the time of his death. R. 1 (Compl. at 1) (Page ID #1). Because Kerr was living with her husband at the time of his death, she was due to receive any payment owed to Mr. Kerr and was a proper substitute party for Mr. Kerr in any proceedings before the Social Security Administration. 20 C.F.R. §§ 404.503(b)(1), 416.542(b)(1).

         The parties consented to have the case heard by a United States Magistrate Judge. R. 11 (Consent Order at 1) (Page ID #617). The Commissioner did not oppose Kerr's request for a remand and the parties stipulated to reversal and remand of the Commissioner's decision pursuant to 42 U.S.C. § 405(g). R. 20 (Order at 1) (Page ID #652). Subsequent to the remand, Kerr moved in the district court for an award of $3, 206.25 in attorney fees pursuant to the Equal Access to Justice Act. R. 22 (Fee Mot. at 2) (Page ID #656); 28 U.S.C. § 2412(d). Kerr specifically requested that any fees awarded "be made payable to Plaintiff's counsel . . . ." Id. Kerr attached to her motion an "Affidavit and Assignment of EAJA Fee, " that was signed on March 23, 2016. R. 23 (EAJA Assignment) (Page ID #661-62). The assignment document stated that, "I assign any right or interest I may have in the award of an EAJA fee and understand that the EAJA award shall be paid to my attorney, Greg Marks, to compensate counsel for the work performed on this case in the U.S. District Court." Id. Kerr specifically "ask[ed] that the EAJA award be made payable to Greg Marks and not to me as Plaintiff." Id. at Page ID #661. The Commissioner responded to Kerr's EAJA fee motion by stating that she "does not oppose [Kerr's] motion for attorney fees in the amount of $3, 206.25, " and that "[a]fter the Court enters the above award, if . . . [Kerr] owes no pre-existing debt subject to offset, " then the Commissioner would "direct that the award be made payable to [Kerr's] attorney pursuant to the EAJA assignment duly signed by [Kerr]." R. 24 (Comm'r Resp. at 1) (Page ID #663).

         On April 29, 2016, the district court granted Kerr's motion for attorney fees in the amount of $3, 206.25. R. 25 (Order at 3) (Page ID #669). The district court declined to honor Kerr's assignment and concluded that it was required to order payment of the award to Kerr as the prevailing party. Id. Specifically, the district court concluded that it could not "ignore the Anti-Assignment Act, " which prohibits "an assignment of a claim against the United States that is executed before the claim is allowed, before the amount of the claim is decided, and before a warrant for payment of the claim has been issued." Id. at 4 (Page ID #670) (internal quotation marks omitted). After sua sponte invoking the AAA, the district court noted that "[w]hile the Sixth Circuit has not directly spoken on this issue, district courts within the Sixth Circuit have agreed that any assignment of an EAJA award that predates the actual award of fees is void." Id. (internal quotation marks omitted). The district court therefore declared Kerr's assignment of her EAJA award to her counsel void because "the assignment predate[d] the [district court's] award of fees." Id. at 5 (Page ID #671). Finally, the district court "le[ft] it to the Commissioner's discretion to determine whether to waive the Anti-Assignment Act and make the fee payable to Mr. Marks." Id. at 6 (Page ID #672).

         Kerr responded to the district court's order by filing a motion pursuant to Federal Rule of Civil Procedure 59(e) seeking: (1) to "reverse the [district court's] application of the Anti-Assignment Act"; and (2) to issue an order requiring payment of the fee award directly to Kerr's counsel. R. 26 (Mot. at 25) (Page ID #698). The Commissioner responded that she would "exercis[e] her discretion to accept [Kerr's] assignment" and "make the EAJA award payable to counsel." R. 27 (Response at 1) (Page ID #760). The Commissioner further suggested that the district court should deny as moot the Rule 59(e) motion because the Commissioner had "deci[ded] to waive compliance with the [Anti-Assignment Act], [and] granting [Kerr's] motion would not provide h[er] with any additional relief." Id. at 1-2 (Page ID #760-61). Additionally, the Commissioner argued that "[w]hether the Anti-Assignment Act (AAA) applies to the assignment of EAJA fees would only be relevant to the outcome of this matter if the Commissioner declined to waive the AAA in this particular case." Id. at 760. Kerr filed a reply to the Commissioner's response and argued that: (1) the district court incorrectly ruled that the AAA applied in EAJA cases; and (2) Kerr's rule 59(e) motion was not moot in light of the "capable of repetition yet evading review" and "voluntary cessation" exceptions to mootness. R. 28 (Reply at 4) (Page ID #767).

         On October 17, 2016, the district court issued a memorandum opinion and order denying as moot Kerr's motion to amend pursuant to Rule 59(e). The district court concluded that "Kerr asked for the award to be made payable to counsel. The Commissioner made the award payable to counsel." R. 29 (Rule 59(e) Order at 2) (Page ID #773). Because the district court concluded that Kerr's motion was moot, it did "not consider whether it clearly ...


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