Barry v. Bowen

• Decision Date: 19 August 1987
• Docket Number: No. 86-1802,86-1802
• Parties: , 18 Soc.Sec.Rep.Ser. 700 George L. BARRY, Plaintiff-Appellee, v. Otis R. BOWEN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1324

825 F.2d 1324

8 Fed.R.Serv.3d 967, 18 Soc.Sec.Rep.Ser. 700

George L. BARRY, Plaintiff-Appellee, v. Otis R. BOWEN, Defendant-Appellant.

No. 86-1802.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Feb. 9, 1987.

Decided Aug. 19, 1987.

Harvey P. Sackett, San Jose, Cal., for plaintiff-appellee.

John F. Daly, Washington, D.C., for defendant-appellant.

Appeal from the United States District Court for the Northern District of California.

Before SCHROEDER, WIGGINS and THOMPSON, Circuit Judges.

SCHROEDER, Circuit Judge:

The government appeals an award of attorney's fees under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. Sec. 2412, in a supplemental security income case.

In the underlying action, the claimant, George Barry, sought district court review after the Appeals Council reversed an Administrative Law Judge's decision allowing his claim. The Appeals Council had reviewed the matter on its own motion pursuant to the Secretary's program of reviewing the decisions of certain Administrative Law Judges. In the district court, plaintiff Barry contended that the review program violated his due process rights.

The district court held in Barry's favor, Barry v. Heckler, 620 F.Supp. 779 (N.D.Cal.1985), and the Secretary did not appeal. Barry then requested attorney's fees under the EAJA. The district court found, in Barry v. Heckler, 638 F.Supp. 444 (N.D.Cal.1986), that the Secretary's position had not been substantially justified and awarded fees in the amount of $150 per hour, twice the standard $75 rate provided for in the statute. The government appeals this decision. We hold that the award of attorney's fees was proper but reduce the amount to $75 per hour.

I BACKGROUND

In 1980, Congress passed the Social Security Disability Amendments of 1980, including the provision known as the Bellmon Amendment. The amendment provided that:

The Secretary of Health and Human Services shall implement a program of reviewing, on his own motion, decisions rendered by administrative law judges as a result of hearings under section 221(d) of the Social Security Act....

Social Security Disability Amendments of 1980, Pub.L. 96-265, Sec. 304(g), 94 Stat. 441, 456 (1980) (codified at 42 U.S.C. Sec. 421 (1982)).

Following enactment of the Bellmon Amendment, the Social Security Administration ("SSA") put into effect in October 1981 the "Bellmon Review Program." The SSA described the contours of the program as follows:

[I]n accordance with the statutory mandate, [the Office of Hearings and Appeals] will conduct a comprehensive, ongoing program under which a prescribed percentage of administrative law judge decisions involving the issue of disability, particularly those allowing previously denied claims for disability benefits, will be evaluated prior to their effectuation, even though there is no request for review. When appropriate, the decision will be referred for possible review by the Appeals Council.

SSR 82-13 (1982).

This program was to be implemented, as stated in the Bellmon Amendment, by the Secretary's use of "own motion" review. See Pub.L. No. 96-265, Sec. 304(g), 94 Stat. 441, 456 (1980). The SSA announced that four categories of cases would be considered for possible own motion review:

(1) A national random sample of cases;

(2) allowance decisions of new ALJs;

(3) decisions referred by the SSA's Office of Disability Operations; and

(4) decisions of particular ALJs.

See AALJ v. Heckler, 594 F.Supp. 1132, 1134 (D.D.C.1984). Barry's underlying case concerned only the fourth category and questioned the validity of a policy in which the SSA targeted ALJs with high allowance rates.

When Bellmon Review was initiated, the SSA targeted for review those ALJs having an allowance rate of 66 2/3% or higher. Barry v. Heckler, 620 F.Supp. at 781. By April 1983, the Bellmon Review Program had been expanded to target ALJs not only on the basis of their allowance rate but also on the basis of their Appeals Council reversal rate. The ALJ who heard Barry's case had been targeted for own motion review. Id. at 781. When the ALJ granted Barry's claim, the decision was reviewed by the Appeals Council. The Appeals Council reversed, concluding that Barry was not entitled to disability benefits.

Barry sought review of this decision in the district court, claiming that the Review Program's targeting of certain ALJs had denied him due process. In defending against Barry's due process claim, the Secretary took essentially three positions: (1) that the district court could not hear plaintiff's constitutional claim because its jurisdiction is limited to an inquiry into whether the Appeals Council decision was supported by substantial evidence, (2) that a due process analysis was irrelevant so long as the Appeals Council decision was supported by substantial evidence, and (3) that Barry lacked standing because he had won his case before the ALJ.

The district court rejected all of these arguments and found in Barry's favor in a carefully reasoned opinion. See Barry, 620 F.Supp. 779. The district court noted that Bellmon Review "put pressure on selected ALJs to reduce their precentage of benefit allowances, thereby denying claimants of their right to an impartial ALJ" and, in addition, sent a message that "impermissibly affected the Appeals Council." Id. at 782-83.

Barry then petitioned for attorney's fees under the EAJA, claiming that the government's position lacked substantial justification. The district court agreed and awarded fees in the amount of $150 per hour, finding that the presence of special factors justified an award in excess of the $75 per hour limit that the statute says is to be followed "unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee." 28 U.S.C. Sec. 2412(d)(2)(A)(ii).

The Secretary now raises three issues on appeal: (1) that Barry's petition for fees was not timely, (2) that the Secretary's position was substantially justified, and (3) that even if the Secretary's position lacked substantial justification, the district court erred in awarding attorney's fees in excess of $75 per hour. We reject the first two contentions but agree with the third.

II TIMELINESS

Under section 2412(d)(1)(B) of the EAJA, a petition for attorney's fees in an action against the government must be filed "within thirty days of final judgment in the action." The judgment is final when it is no longer appealable, 28 U.S.C. Sec. 2412(d)(2)(G), and this occurs when the government's sixty-day period in which to appeal has elapsed, see Fed.R.App.P. Rule 4(a)(1).

The question of whether Barry's petition for attorney's fees was timely filed therefore entails determining the date when the government's time for appeal began to run. The issue arises because the district court first entered an original judgment and then an amended judgment. The fee petition was timely if the entry of the amended judgment, rather than the original judgment, started the time for appeal.

The government argues that its 60 days in which to appeal began to run on June 13, 1985, when the original judgment was entered, and that the petition for attorney's fees filed October 18, 1985 was thus untimely. Barry contends that we should compute the time for appeal from the date that the court, responding to a government post-judgment motion for clarification, entered an amended judgment. That occurred on August 20, 1985.

The procedural chronology requires closer scrutiny. On June 13, 1985, the court entered an order granting Barry's motion for summary judgment and denying the Secretary's motion for summary judgment. The order concluded: "The determination of the Secretary is reversed and remanded."

On Monday, June 25, 1985, the Secretary filed a "Motion for Clarification," which purported to be under both Rule 59(e) and Rule 60(b). The motion sought clarification of the court's order "in regard to whether benefits are to be awarded at this time or whether additional administrative proceedings are to be conducted."

Motions under Rule 60(b) do not toll the time for appeal, but timely motions under 59(e) do. See Fed.R.App.P. 4(a)(4); 6A J. Moore, Federal Practice and Procedure p 59.12. The motion in this case was for the type of relief contemplated by Rule 59(e) rather than Rule 60(b). ¹ It was, however, filed one day after the expiration of the ten-day period in which a party may bring a Rule 59(e) motion. Ironically, the Secretary's motion would have been timely under amendments that went into effect later in the year to exclude intermediate Saturdays, Sundays, and legal holidays from the computation of time periods of less than 11 days. See Fed.R.Civ.P. 6(a) (as amended 1985). ²

An untimely Rule 59(e) motion ordinarily would not affect the running of the time for appeal, and that time would have expired on August 12. Computing the time for the filing of the petition for attorney's fees from the June 13 order, Barry would have had to file the request by September 11.

On August 20, however, the court modified the judgment in the case pursuant to the government's motion. The court entered an order which stated: "For the sake of clarification, IT IS HEREBY ORDERED that the case is remanded to the Secretary for the limited purpose of effectuating the payment of Social Security disability insurance benefits to the plaintiff." By its entry of the order, the district court indicated that it did not regard the judgment entered in June as the appropriate final disposition of the case.

The government argues, however, that assuming its motion was for relief under Rule 59(e), it was without effect because it was untimely and did not toll the time for appeal. The general rule is that only a timely Rule 59(e) motion tolls the time for appeal. See, e.g., Whittaker v. Whittaker Corp., 639 F.2d 516, 520 (...