Holt v. Shalala
| Decision Date | 02 February 1994 |
| Docket Number | No. 92-36707,92-36707 |
| Citation | 35 F.3d 376 |
| Parties | , Unempl.Ins.Rep. (CCH) P 14110B Virginia L. HOLT, Plaintiff-Appellee, v. Donna E. SHALALA, * Secretary, Department of Health and Human Services, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
E. Roy Hawkins, U.S. Dept. of Justice, Washington, DC, for defendant-appellant.
Drew L. Johnson, Johnson, Cram & Associates, Eugene, OR, for plaintiff-appellee.
Appeal from the United States District Court for the District of Oregon.
Before: GOODWIN, SCHROEDER and NORRIS, Circuit Judges.
The government appeals a district court order granting attorney's fees under the Equal Access to Justice Act ("EAJA") in a Social Security benefits case. The only issue is whether the district court correctly exercised jurisdiction over Virginia Holt's EAJA petition. The merits of the fee application are not disputed. We hold that the court had jurisdiction to consider the petition, because the Supreme Court's decision in Shalala v. Schaefer, --- U.S. ----, 113 S.Ct. 2625, 125 L.Ed.2d 239 (1993) does not apply retroactively. We therefore affirm the decision granting Holt attorney's fees.
On March 1, 1991, Virginia Holt brought suit in federal district court alleging that the Secretary of Health and Human Services had erroneously denied her 1988 application for disability benefits. On June 18, 1991, the district court reversed and remanded the case pursuant to sentence 4 of 42 U.S.C. Sec. 405(g). 1 A final judgment was entered at that time. On remand, the Secretary awarded Holt benefits.
Holt then returned to district court on February 4, 1992, seeking attorney's fees under the Equal Access to Justice Act. 28 U.S.C. Sec. 2412(d). In filing for fees at that time, Holt was following the established procedure for obtaining attorney's fees in Social Security cases. Prior to the Supreme Court's decision in Shalala v. Schaefer, --- U.S. ----, 113 S.Ct. 2625, 125 L.Ed.2d 239 (1993), the lower courts generally had held that the time for applying for fees under the EAJA, which authorizes fees only for "prevailing parties," did not begin to run until the claimant actually received benefits. See, e.g., Papazian v. Bowen, 856 F.2d 1455, 1456 (9th Cir.1988) ().
The Secretary opposed Holt's petition, relying on Melkonyan v. Sullivan, 501 U.S. 89, 111 S.Ct. 2157, 115 L.Ed.2d 78 (1991), in which the Court suggested that the remand judgment rather than the award of benefits might trigger the time to file for attorney's fees. 2 The government therefore contended that Holt should have filed her EAJA petition within 30 days of the district court's June 18, 1991 final remand. Because Holt had not filed her petition until February 4, 1992, the Secretary argued that the district court lacked jurisdiction to consider her petition.
The district court agreed with the Secretary that Melkonyan requires that EAJA petitions be filed within 30 days of the time that a remand order becomes final. The court declined, however, to apply its decision to applicants who had relied upon the prevailing practice of filing EAJA petitions after benefits had been obtained. The court therefore granted Holt's petition.
After the government filed notice of its appeal, the Supreme Court decided Shalala v. Schaefer, --- U.S. ----, 113 S.Ct. 2625, 125 L.Ed.2d 239, holding for the first time that the time for filing an application for fees in most Social Security review cases begins to run from the time that the district court enters a judgment remanding the case for further administrative proceedings, rather than after a claimant has obtained benefits. The government relies upon Schaefer in its briefs to this court.
The Equal Access to Justice Act provides that a "prevailing party" other than the United States may seek attorney's fees within 30 days of final judgment in the civil action in which that party prevails. See 28 U.S.C. Sec. 2412(d)(1)(A), (B). Prior to the Supreme Court's decision in Schaefer, it was commonly understood that a Social Security claimant became a "prevailing party" at the time that he or she actually obtained benefits from the Secretary, and that EAJA's 30-day time limit began to run when the successful claimant returned to federal court after a favorable post-remand decision and obtained a "final judgment" from the district court.
In a leading Supreme Court decision in this area, Sullivan v. Hudson, 490 U.S. 877, 109 S.Ct. 2248, 104 L.Ed.2d 941 (1989), the Court emphasized that "where a court orders a remand to the Secretary in a benefits litigation and retains continuing jurisdiction over the case pending a decision from the Secretary which will determine the claimant's entitlement to benefits, the proceedings on remand are an integral part of the 'civil action' for judicial review." Id. at 892, 109 S.Ct. at 2258. The Court therefore recognized that the district court's remand order in that case, which had been entered pursuant to sentence 4 of Sec. 405(g), could not constitute a "final judgment" in that action. Id. at 887-88, 109 S.Ct. at 2255-56. Rather, the final judgment did not occur until after the claimant had returned to federal court following the post-remand proceedings, at which time he could obtain a "final judgment" and file a petition for reasonable attorney's fees. As the Court noted, "where a court's remand to the agency for future administrative proceedings does not necessarily dictate the receipt of benefits, the claimant will not normally attain 'prevailing party' status within the meaning of Sec. 2412(d)(1)(A) until after the result of the administrative proceedings is known." Id. at 886, 109 S.Ct. at 2255.
This decision appeared to approve the federal courts' then-prevailing practice. See Papazian, 856 F.2d 1455; Allen v. Secretary of Health and Human Services, 781 F.2d 92, 94 (6th Cir.1986) (); Swenson v. Heckler, 801 F.2d 1079 (9th Cir.1984) (); McGill v. Secretary of Health and Human Services, 712 F.2d 28 (2d Cir.1983), cert. denied, 465 U.S. 1068, 104 S.Ct. 1420, 79 L.Ed.2d 745 (1984) (same); see also Skip Kirchdorfer, Inc. v. United States, 803 F.2d 711, 712 (Fed.Cir.1986) ().
In its decision in Melkonyan v. Sullivan, 501 U.S. 89, 111 S.Ct. 2157, 115 L.Ed.2d 78, the Supreme Court cast the first shadow of doubt over the continuing validity of this procedure. In Melkonyan, the claimant had appealed a decision of the Secretary denying him benefits in federal court. The district court remanded the case to the Secretary upon stipulation of both parties. The Secretary eventually awarded the claimant benefits. More than a year later, the claimant returned to the district court seeking attorney's fees under the EAJA. The Secretary argued, and the Ninth Circuit agreed, that Melkonyan's EAJA petition was untimely, because it had been filed more than 30 days after the administrative decision awarding him benefits. The Supreme Court reversed, holding that an administrative decision cannot be a "final judgment" for EAJA purposes. Although the facts of Melkonyan itself did not involve a remand pursuant to sentence 4 of Sec. 405(g), the Court noted in dicta that in a sentence 4 remand, "the filing period [for an EAJA petition] 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." Id. at 102, 111 S.Ct. at 2165.
This dicta had troubling implications; namely, that disability benefits claimants who prevailed only after a sentence 4 remand from a federal court would effectively be precluded from ever seeking attorney's fees under the EAJA, because they would be required to file petitions for attorney's fees before they were "prevailing parties," as the EAJA requires. Moreover, this dicta seemed incompatible with the Supreme Court's decision in Hudson, which, in the context of a sentence 4 remand, had held that the remand order was not "final" until the claimant had obtained benefits and the award had been affirmed by the district court.
In an effort to reconcile the seemingly contradictory language in Melkonyan and Hudson, a majority of the federal courts of appeals held that when remanding a case pursuant to sentence 4 of Sec. 405(g), a district court retained jurisdiction and discretion to enter final judgment for EAJA purposes after the post-remand administrative proceedings had been completed, and the claimant had obtained benefits. See Gray v. Secretary of Health and Human Services, 983 F.2d 954 (9th Cir.), vacated on rehearing, 3 F.3d 1584 (9th Cir.1993); Persichetti v. Secretary of Health and Human Services, 990 F.2d 80 (3d Cir.1993); Bertrand v. Sullivan, 976 F.2d 977 (5th Cir.1992); Labrie v. Secretary of Health and Human Services, 976 F.2d 779 (1st Cir.1992); Hafner v. Sullivan, 972 F.2d 249 (8th Cir.1992); Gutierrez v. Sullivan, 953 F.2d 579, 582-83 (10th Cir.1992), cert. denied, --- U.S. ----, 113 S.Ct. 3064, 125 L.Ed.2d 746 (1993); Welter v. Sullivan, 941 F.2d 674, 675 (8th Cir.1991). The Seventh Circuit reached essentially the same result, by holding that an order vacating and remanding a case to the Secretary for further administrative proceedings was simply not a "final judgment," but rather contemplated a...
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