Damato v. Sullivan

• Citation: 945 F.2d 982
• Decision Date: 06 January 1992
• Docket Number: No. 90-1402,90-1402
• Parties: , Unempl.Ins.Rep. (CCH) P 16290A Ralph DAMATO, Plaintiff-Appellant, v. Louis W. SULLIVAN, M.D., Secretary of Health and Human Services, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 982

945 F.2d 982

35 Soc.Sec.Rep.Ser. 181, Unempl.Ins.Rep. (CCH) P 16290A

Ralph DAMATO, Plaintiff-Appellant, v. Louis W. SULLIVAN, M.D., Secretary of Health and Human

Services, Defendant-Appellee.

No. 90-1402.

United States Court of Appeals, Seventh Circuit.

Argued Sept. 19, 1990.

Decided Oct. 10, 1991.

As Amended Jan. 6, 1992.

Frederick J. Daley (argued), Chicago, Ill., for plaintiff-appellant.

Ann L. Wallace, Asst. U.S. Atty., Office of the U.S. Atty., Criminal Div., Gary A. Sultz (argued), Dept. of Health and Human Services, Region V, Office of the Gen. Counsel, Nancy K. Needles, Asst. U.S. Atty., Office of the U.S. Atty., Civil Div., Appellate Section, Chicago, Ill., for defendant-appellee.

Before CUMMINGS, CUDAHY, and COFFEY, Circuit Judges.

COFFEY, Circuit Judge.

Damato brought this action seeking attorney fees pursuant to 28 U.S.C. § 2412(d)(1) as the prevailing party in an action against the United States. The district court rejected the request for attorney fees, finding that the position of the United States was substantially justified. We affirm.

I. BACKGROUND

Claiming an inability to work as a result of emphysema and bronchitis as well as poor circulation in his legs, Ralph Damato filed an application for Supplemental Security Income disability benefits pursuant to Title XVI of the Social Security Act, 42 U.S.C. § 1381 et seq. on September 27, 1983. Upon denial of his application as well as a denial of his request for reconsideration, Damato petitioned for an administrative hearing. After a hearing, the Administrative Law Judge ("ALJ") determined that:

"[t]he claimant's past relevant work as a bartender was performed in a standing position and required lifting up to 2 pounds. His residual functional capacity permits the performance of this activity and he thus has the residual capacity to return to that work. Accordingly, the claimant is not disabled within the meaning of the Social Security Act."

Damato requested that the Social Security Administration's Appeals Council review the ALJ's decision. As additional evidence of permanent disability, Damato submitted a letter from the Illinois Department of Rehabilitation Services, dated one week after the ALJ's decision, which informed him that:

"It appears that your disability would cause you to have to miss too many days and would not allow you to be able to function for any real length of time during the day.

"After our interview with you on June 1, 1984, our Medical Consultant reviewed the case again and feels that you would not be capable of handling competitive employment.

"I am therefore closing your case with our agency."

The claimant further submitted two medical reports dated prior to the ALJ's decision. Upon considering the administrative record, the additional evidence and Damato's attorney's arguments to the Council, the Appeals Council rejected Damato's request for review:

"Social Security Administration regulations provide that the Appeals Council will grant a request for review where: (1) there appears to be an abuse of discretion by the Administrative Law Judge; (2) there is an error of law; (3) the Administrative Law Judge's action, findings, or conclusions are not supported by substantial evidence; or (4) there is a broad policy or procedural issue which may affect the general public interest. The regulations also provide that where new and material evidence is submitted with the request for review, the entire record will be evaluated and review will be granted where the Appeals Council finds that the Administrative Law Judge's action, findings, or conclusion is contrary to the weight of the evidence currently of record....

"The Appeals Council has concluded that there is no basis under the above regulations for granting your request for review. Accordingly, your request is denied and the Administrative Law Judge's decision stands as the final decision of the Secretary in your case."

Thereafter Damato filed an action in the district court alleging that the decision of the ALJ was not supported by substantial evidence, and thus, the Appeals Council erred in denying the request for review. After both Damato and the Secretary filed their motions (fully briefed) for summary judgment, the case was assigned to a magistrate for a Report and Recommendation. The magistrate's Report and Recommendation stated that there was substantial evidence to support the Administrative Law Judge's decision. Nonetheless, the magistrate recommended that the claim be remanded on a ground not argued by Damato--that Damato was entitled to an explanation of why the Appeals Council rejected the state agency's determination that Damato was unemployable. The magistrate acknowledged that "the Secretary is presumably not bound by the determination of the state agency," yet the magistrate believed that the Appeals Council was required to evaluate the factors upon which the state relied and articulate its reasoning for rejecting the same. The magistrate suggested that a remand was proper "for the limited purpose of determining whether plaintiff's impairments prevent him from meeting normal attendance requirements in the workplace." Neither party objected to the Report and Recommendation, and the district judge adopted it and remanded the claim "to the Secretary for further proceedings in accordance with the report and recommendation."

On remand, the ALJ held a supplemental hearing and received in evidence additional medical and vocational testimony. Upon review and after considering the new evidence, the ALJ found

"that the claimant has been continuously disabled within the meaning of the Social Security Act since September 27, 1983 because his medical conditions prevented him from working regularly or on a sustained basis. This was the exact testimony of the medical advisor....

"The medical advisor went on to say that the claimant should not be exposed to any smoking or alcohol. Even considering the prior hearing decision's exertional finding that the claimant could do light work and taking into further consideration these restrictions set forth by [the medical advisor], the vocational expert testified that the claimant would not be able to do his past job as a bartender or any other work. The medical advisor testified that in pulmonary diseases, alcohol aggravates the asthma. According to the vocational expert a bartender is regularly exposed to smoking. Thus, even if the claimant's pulmonary impairment [were not disabling], the claimant would still be precluded from engaging in substantial gainful activity.

* * * * * *

"... Temporary disabling symptoms can make it impossible for a claimant to hold a job, if these symptoms can be expected to recur frequently disrupting work or forcing absences. This is the importance of the report from a rehabilitation counselor from the State of Illinois who wrote on August 7, 1984, that the claimant's disability would appear to cause him to miss too many days and would not allow him to be able to function for any real length of time during the day....

"In closing, the undersigned Administrative Law Judge wishes to comment on the fact that had this evidence, as discussed in this decision, been available at the time of the prior hearing decision in July, 1984, it is likely that the delay in reaching a favorable ruling would never have happened."

The Appeals Council adopted the ALJ's recommended decision on December 19, 1988. Almost two months later on February 16, 1989, Damato filed a motion in the district court for attorney fees under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d)(1)(A) on the ground that the Appeals Council erred as a matter of law in failing to articulate its reasons for not accepting the Illinois Department of Rehabilitation Services' conclusion that Damato was permanently disabled. The government objected to awarding attorney fees, arguing that the Appeals Council was substantially justified in refusing to review the ALJ's initial decision without specifically articulating its reasoning. The district court rejected Damato's request for attorney fees, as it found that "the position taken by the Secretary throughout both the administrative and judicial proceedings was substantially justified."

II. ISSUES

The two issues presented upon review are: 1) Whether Damato's motion for attorney fees under the EAJA was untimely filed, thus depriving the district court of jurisdiction; and 2) Did the district court abuse its discretion in holding that the Appeals Council need not articulate its reasoning for finding additional evidence unpersuasive when denying a request for review of an ALJ's decision.

III. JURISDICTION

In order to invoke the subject matter jurisdiction of the district court for attorney fees under the EAJA, the party seeking fees must file its application "within 30 days of the final judgment in the action...." 28 U.S.C. § 2412(d)(1)(B). Cf. United States v. J.H.T. Inc., 872 F.2d 373, 375 (11th Cir.1989); Olson v. Norman, 830 F.2d 811, 821 (8th Cir.1987); Allen v. Secretary of Health & Human Services, 781 F.2d 92, 94 (6th Cir.1986). Citing Melkonyan v. Heckler, 895 F.2d 556, 559 (9th Cir.1990), the Secretary argued in his brief that the Appeals Council's decision of December 19, 1988, granting benefits to Damato was the "final judgment" for purposes of the EAJA, and therefore, the February 16, 1989 request for attorney fees was untimely. This Court recently followed the Ninth Circuit's decision in Melkonyan to hold that a decision of the Appeals Council granting the benefits a claimant sought was a final judgment as defined in Section 2412(d)(2)(G) ¹ in Jabaay v. Sullivan, 920 F.2d 472, 473 (7th Cir.1990). After the Supreme Court granted certiorari in Melkonyan, we entered an order February 12, 1991, holding Damato's appeal in abeyance pending the Supreme Court's disposition. On June 10, 1991, the Supreme Court held that:

"Congress' use of 'judgment' in 28...