Eschelbacher v. Sullivan

Decision Date04 October 1990
Docket NumberNo. C83-3732.,C83-3732.
Citation746 F. Supp. 691
PartiesRonald J. ESCHELBACHER, Plaintiff, v. Louis W. SULLIVAN, M.D., Secretary of Health and Human Services, Defendant.
CourtU.S. District Court — Northern District of Ohio

Thomas M. Stroh, Lakewood, Ohio, for plaintiff.

Maureen Murphy, Asst. U.S. Atty., Cleveland, Ohio, for defendant.

MEMORANDUM AND ORDER DENYING PLAINTIFF'S APPLICATION FOR ATTORNEY'S FEES

KRENZLER, District Judge.

The above-captioned case was an appeal of the Secretary's decision terminating the plaintiff's disability benefits. On appeal, this Court determined that the Secretary used an improper standard in terminating plaintiff's benefits, and remanded the matter to the Secretary for a further evidentiary hearing on the issue. This Court ordered the Secretary to use the proper standard when reevaluating the issue. Upon remand, the plaintiff's benefits were restored. Plaintiff now seeks attorney's fees under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412.

The plaintiff's petition for attorney's fees was referred by this Court to a magistrate for a report and recommended decision. The Magistrate issued his Report, which recommended granting the petition for attorney's fees, and the defendant filed objections thereto. For the reasons discussed below, this Court departs from the Report and Recommended Decision of the Magistrate, and hereby denies the plaintiff's petition for fees.

FACTS

The plaintiff was awarded disability benefits by the Secretary in 1974, but his disability was regarded as one which might improve over time. In 1982, his disability was reviewed to see if he was still entitled to benefits. The Secretary, using a standard which treated the plaintiff as if he was an initial applicant for benefits, terminated the plaintiff's benefits. The plaintiff took an unsuccessful administrative appeal from this decision, and finally exhausted his administrative remedies before filing a complaint in this Court in 1983.

In August 1984, this Court found that an improper standard had been used by the Secretary in reviewing the plaintiff's disability, and remanded the case to the Secretary for a further hearing and review using the proper standard, namely, the medical improvement standard. Within a month after this Court's order of remand, but prior to any new decision by the Secretary, the plaintiff filed a motion for attorney fees under EAJA. This motion was overruled because it was prematurely filed.

In October 1984, the Social Security Disability Benefits Reform Act of 1984 (DBRA) was enacted. The DBRA codified the medical improvement standard and ordered that pending benefit termination cases be remanded for review under the new standard. Pursuant to the DBRA and this Court's order of remand, the Secretary reconsidered the plaintiff's case using the medical improvement standard. On December 24, 1986, the plaintiff was notified by letter that his disability benefits had been wrongfully terminated and were going to be reinstated, including payment of all past due benefits.

Approximately two years later, in December 1988, the plaintiff filed a motion with this Court for reconsideration of his previous motion for attorney's fees.

The Secretary believes that EAJA fees may not properly be awarded in this case for several reasons. The Secretary claims that (1) the plaintiff's motion of December 1988 was not timely filed; (2) the plaintiff was not a prevailing party as required by EAJA; and (3) the position of the Secretary in originally denying benefits was substantially justified.

LAW

With respect to the timeliness of motions for fees, EAJA requires that "a party seeking an award of fees ... shall, within thirty days of final judgment in the action, submit to the court an application for fees...." 28 U.S.C. § 2412(d)(1)(B). The issue in dispute is whether the December 24, 1986, notice from the Secretary to the plaintiff of the reinstatement of the plaintiff's benefits constitutes the final judgment in this case for EAJA purposes, or whether a final order of this Court is required. The resolution of this issue is significant, because the time requirement of EAJA is not merely a statute of limitations. Rather, it is a jurisdictional prerequisite to governmental liability. Thus, once the time period has expired, a court no longer has jurisdiction to entertain a subsequently filed motion for fees under EAJA. Allen v. Secretary, HHS, 781 F.2d 92, 94 (6th Cir.1986). Action on Smoking and Health v. C.A.B., 724 F.2d 211 (D.C.Cir. 1984).

The Secretary adopts the position that its decision to reinstate benefits, notice of which was sent to the plaintiff on December 24, 1986, was the final judgment in this case, and that the plaintiff's motion to reconsider attorney fees filed in December 1988 was clearly not within the thirty day period set forth in EAJA. The plaintiff's position is unclear. Although no final order of this Court was issued, the plaintiff chose to wait until December 1988 to renew its motion for attorney's fees. In this renewed motion, the plaintiff makes no reference to the issue of "final judgment" and appears not even to be aware of the controversy surrounding this issue.

The Magistrate, in his Report and Recommended Decision, adopts the position that a final order of the court is necessary for a final judgment under EAJA. Since such an order was never issued by this Court, the Magistrate believes that the plaintiff's renewed motion for attorney's fees cannot be barred for being filed beyond the thirty day limit. The Magistrate recommended that this Court issue a final judgment for the plaintiff and thereafter grant the plaintiff's motion for fees.

There is authority supporting the positions of both the Secretary and the Magistrate. In Guthrie v. Schweiker, 718 F.2d 104 (4th Cir.1983), the Fourth Circuit held that neither the final decision of the Appeals Council nor the district court's order of remand to the Secretary for an additional hearing constituted a "final judgment" for EAJA purposes. The rationale behind the court's decision was threefold. First, there was nothing in the language or legislative history of EAJA to suggest that "final judgment" meant anything other than the judgment of a court, as defined in Fed.R.Civ.P. 54. Since, according to Rule 54, a judgment includes "a decree and any order from which an appeal lies," and an order of remand is not an appealable order, it cannot constitute a final judgment. Id. at 106. Second, EAJA itself makes a distinction between final administrative actions and final judical actions. Id. Finally, 42 U.S.C. § 405(g), which sets forth the procedure for judicial review of the Secretary's decisions,

contemplates additional action both by the Secretary and a district court before a civil action is concluded following a remand. The Secretary must file any "additional and modified findings of fact and decision, and a transcript of the additional record and testimony...." The district court then may enter a judgment affirming, modifying, or reversing the Secretary's decision. Here, the Secretary did not file anything and the district court did not enter any order, after completion of the proceedings on remand.
Guthrie's application could not have been filed more than 30 days after final judgment in the action, because no final judgment was entered.

Id.

In 1985, after the Guthrie decision, EAJA was reenacted and amended to include a definition of "final judgment" as "a judgment that is final and not appealable, and includes an order of settlement." 28 U.S.C. § 2412(d)(2)(G) (1989). In doing so, Congress "sought to clarify its intent by defining final judgment in a manner that would avoid the `overly technical' approach previously taken by some courts." Papazian v. Bowen, 856 F.2d 1455 (9th Cir.1988). However, rather than clarifying the issue, this amendment merely sparked further controversy.

Some cases continued to follow Guthrie, stating that "the legislative history of the 1985 amendments to the EAJA explicitly follows the Fourth Circuit's holding in Guthrie." Gutierrez v. Sullivan, 734 F.Supp. 969, 971 (D.Utah 1990). Other cases have held that Guthrie was legislatively overruled by the 1985 amendments and should not be followed. Melkonyan v. Heckler, 895 F.2d 556 (9th Cir.1990).

In Melkonyan, the court was confronted with a dilemma very similar to that in the instant case. The court remarked,

In Papazian, after the Appeals Council awarded the claimant benefits, the district court adopted the decision and entered it as its own judgment.... Here, however, the district court entered no such judgment. We are faced with a problem not confronted by us in Papazian: If the remand order lacks finality, and there is no subsequent district court order, what event triggers the 30-day time limit prescribed by 28 U.S.C. § 2412(d)(1)(B)?"

Id. at 558. The court held that a decision of the Appeals Council awarding benefits after remand from the district court was the final judgment which started the running of the thirty day period, because it was final and not appealable. When the Secretary's decision upon remand is wholly favorable to the plaintiff, the plaintiff would have no reason to appeal it. And since § 405(g) entitles only an individual to appeal the Secretary's decision (citation omitted), "the Secretary would not have standing or reason to complain of his own final decision." Id. Finally, the court criticized the reasoning of the Fourth Circuit in Guthrie.

Guthrie's approach is troublesome. While section 405(g) requires the Secretary to file the new decision and findings after remand, it does not confer upon the district court any independent power to review the post-remand filing. The agency's decision may be reviewed by the district court only if a claimant appeals within the 60-day time limit.... If the Secretary's decision is wholly in favor of the claimant, we are hard
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2 cases
  • Hull v. Bowen, C87-1086.
    • United States
    • U.S. District Court — Northern District of Ohio
    • October 5, 1990
    ...thorough discussion of the time for filing an application for fees under the EAJA after a successful remand in Eschelbacher v. Sec'y., H.H.S., 746 F.Supp. 691 (N.D.Ohio 1990). VII. In the instant case, this Court previously ruled that during the period from October 1, 1985, through June 8, ......
  • Kling v. SECRETARY OF DHHS, C87-2649.
    • United States
    • U.S. District Court — Northern District of Ohio
    • April 20, 1992
    ...until after the result of the administrative proceedings is known." Hudson, 490 U.S. at 886, 109 S.Ct. at 2255. In Eschelbacher v. Sullivan, 746 F.Supp. 691 (N.D.Ohio 1990), this Court established a procedure which would resolve the apparent inconsistency between Melkonyan and Hudson by pro......

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