Bacon v. Secretary of Health and Human Services, Civ. A. No. 85-4685.

• Decision Date: 13 March 1992
• Docket Number: Civ. A. No. 85-4685.
• Citation: 786 F. Supp. 434
• Parties: Marie BACON, Plaintiff, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant.
• Court: U.S. District Court — District of New Jersey

786 F. Supp. 434

Marie BACON, Plaintiff, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant.

Civ. A. No. 85-4685.

United States District Court, D. New Jersey.

March 13, 1992.

Abromson & Carey, by Glenn B. Carey, Newark, N.J., for plaintiff.

Michael Chertoff, U.S. Atty. by Susan J. Steele, Special Asst. U.S. Atty., Newark, N.J., for defendant.

OPINION

BISSELL, District Judge.

This case involves an application for attorney's fees under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d). The defendant, the Secretary of Health and Human Services ("the Secretary"), maintains that the application should be denied because the plaintiff's motion was untimely.

I. FACTS AND PROCEDURAL HISTORY

Plaintiff filed applications for Supplemental Security Income ("SSI") and disabled widow's insurance benefits. Following a final decision of the Secretary denying her claim, plaintiff commenced an action in the district court pursuant to Section 205(g) of the Social Security Act, as amended, 42 U.S.C. § 405(g). On March 23, 1988, this Court remanded the case to the Secretary for further administrative proceedings. (Defendant's Br. at 1). On remand, following further proceedings, the Secretary entered a final decision dated December 20, 1989, denying plaintiff's applications. (Id.) Plaintiff reopened the matter before this Court.

On January 1, 1991, pursuant to the Omnibus Budget Reconciliation Act of 1990, the new standard for determining disabled widow's insurance benefits went into effect. (See 42 U.S.C. § 423(d) (no distinction between the standard for widow, surviving divorced wife, widower, or surviving divorced husband and the standard for wage earners)). In addition, on January 23, 1991, the Third Circuit invalidated the standard used by the Secretary for adjudicating disabled widow's claims. (See Finkelstein v. Sullivan, 924 F.2d 483 (3d Cir.1991)).

Thereafter, the Secretary re-examined his final decision in the instant matter and determined that further defense of the case in its present posture was untenable. (Defendant's Br. at 2). Therefore, with consent of the parties, this Court remanded the matter to the Secretary for: (1) the issuance of a decision finding plaintiff was disabled as of August 31, 1983, for the purpose of calculating Supplemental Security Income benefits, and as of January 1, 1991, for the purpose of calculating widow's benefits; and (2) further proceedings under Finkelstein to determine eligibility for disabled widow's benefits prior to January 1, 1991. On June 10, 1991, this consent order to remand was entered and the docket was marked closed.

On August 30, 1991, following remand, the Secretary entered a decision fully favorable to plaintiff with respect to both the SSI and disabled widow's claims. (Defendant's Br. at 2). The defendant submitted a proposed order of dismissal along with the final decision of the Secretary, as required by Brown v. Secretary of Health and Human Services, 747 F.2d 878 (3d Cir.1984), which was received and signed by the Court on October 8, 1991.¹ Plaintiff then filed a motion for attorney's fees under the EAJA on October 14, 1991.

II. DISCUSSION

It is the Secretary's position that, based on a recent Supreme Court case, Melkonyan v. Sullivan, ___ U.S. ___, 111 S.Ct. 2157, 115 L.Ed.2d 78 (1991), the plaintiff's application is untimely. It is the plaintiff's position that: (1) the time limit imposed by the EAJA is merely a statute of limitations and therefore subject to tolling, estoppel and other equitable doctrines; and (2) Melkonyan should not be applied retroactively in the present case.

A. Timeliness of Application

The EAJA, 28 U.S.C. § 2412(d)(1)(A), provides that attorney's fees should be awarded to a "prevailing party," unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust. The statute further provides that the party seeking an award of fees shall submit an application within thirty days of "final judgment" in the action. 28 U.S.C. § 2412(d)(1)(B).²

The plaintiff herein made her application four months after the consent order, forty-five days after the Secretary's final decision and six days after this Court dismissed the action. Thus, the running of the thirty-day limit depends on the construction of the words "prevailing party" and "final judgment."

Recently, the Supreme Court of the United States had the opportunity to address this problem. In Melkonyan v. Sullivan, ___ U.S. ___, 111 S.Ct. 2157, the plaintiff applied for attorney's fees under the EAJA. The district court had entered a "judgment" remanding the matter to the Secretary for all further proceedings. (Id. 111 S.Ct. at 2160). Subsequently, the Appeals Council granted the petitioner all the relief he had requested. The issue was whether the "final judgment" for the purposes of EAJA was measured from the date of the district court remand or the date of the relief granted.

The Supreme Court stated that traditionally "final judgment" meant any decree or order from which an appeal lies. (Id. at 2161 (citing Fed.R.Civ.P. 54(a)). However, under § 2412(d)(2)(G), a "final judgment" is one that is "final and not appealable." (Id., citing 28 U.S.C. § 2412(d)(2)(G)). The Court concluded that "not appealable" simply meant that the time for taking an appeal from the court judgment had expired. (Id. at 2162). Thus, there is no conflict between the traditional definition and the definition found in § 2412. Furthermore, "section 2412(d)(1)(B) ... speaks of a `final judgment in the action.'" (Id.) (emphasis in original). "The plain language of the statute makes clear that a `final judgment' under § 2412 can only be the judgment of a court of law." (Id. at 2161) Accordingly, the Court held "that a `final judgment' for purposes of 28 U.S.C. § 2412(d)(1)(B) ... means a judgment rendered by a court that terminates the civil action for which EAJA fees may be received." (Id.) (Citations omitted). Thus, it would not be the decision of the Secretary which triggers the thirty-day EAJA clock, but the action of the district court terminating the civil action.

In Melkonyan, although the Court speaks in terms of the "judgment rendered by a court that terminates the civil action," it does not address the situation in which a matter is remanded but not dismissed by the court until after the post-remand proceedings are complete. (Id. at 2162) (emphasis added). Instead, the Court refers to either of two situations, depending on the type of remand under § 405(g). Sentence four of § 405(g) states that "the court shall have the power to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying, or reversing the decision of the Secretary, with or without remanding the cause for a rehearing." (42 U.S.C. § 405(g) (sentence four)). Sentence six involves remands based on new or additional evidence. (42 U.S.C. § 405(g) (sentence six)). (See also Melkonyan, ___ U.S. at ___, 111 S.Ct. at 2162-63; Sullivan v. Finkelstein, 496 U.S. 617, 110 S.Ct. 2658, 110 L.Ed.2d 563 (1990)).

The Melkonyan Court stated that "in sentence four cases, the filing period begins after the final judgment (`affirming, modifying or reversing') is entered by the court and the appeal period has run, so that the judgment is no longer appealable." (___ U.S. ___, 111 S.Ct. at 2165). In sentence six cases, "the filing period does not begin until after the postremand proceedings are completed...." (Id.) Thus, sentence four remands are "final judgments" for the purposes of EAJA attorney's fee awards despite the fact that plaintiffs are not yet technically "prevailing parties."

This is a significant change from the procedure which existed in the Third Circuit prior to the Melkonyan decision. The appropriate time for filing a petition for EAJA fees was after final judgment by the district court, following positive resolution on the merits, including the post-remand administrative proceedings. (Miller v. Sullivan, No. 90-2408, 1991 WL 165067 at 1, 1991 U.S. Dist. Lexis 11919 at 4 (E.D. Pa. August 23, 1991) (citing Taylor v. United States, 749 F.2d 171, 174 (3d Cir.1984); Brown v. Secretary of Health and Human Services, 747 F.2d 878, 883, 883 n. 8 (3d Cir.1984)). In Brown, an applicant for attorney's fees whose case was remanded by the court was specifically found not to be a "prevailing party" for the purposes of an EAJA fee award. (747 F.2d at 885). Thus, prior to Melkonyan, the time limit in the present matter would have been triggered by this Court's dismissal order dated October 8, 1991. Only then would there have been both a "prevailing party" as well as a determination by a court of law.

In the present matter, the defendant contends, and the plaintiff does not refute, that this Court's remand falls under the fourth sentence of § 405(g). This Court made a substantive ruling in the consent order specifically requiring the Secretary to issue a decision finding plaintiff disabled for a portion of the period for which she sought benefits. (Consent Order to Remand dated June 10, 1991). As there are only two possible types of remands, and there is no new evidence involved in this case, the remand order does indeed fall under the fourth sentence. (See Melkonyan, ___ U.S. ___, 111 S.Ct. at 2163-65). Thus, as in the Miller case, Mrs. Bacon's application period under Melkonyan has expired, although under prior law her application would have been timely.

There are alternative approaches to the Melkonyan decision as it applies to the present case. The first is to determine whether the thirty-day limit set out in the statute is a jurisdictional bar affecting this Court's ability to hear the issue, or whether the period is merely a statute of limitations that is subject to tolling or similar doctrines. The second is to determine whether the principles of retroactivity apply.

The defendant contends that the time period is a...