Hyatt v. Heckler

• Decision Date: 11 September 1985
• Docket Number: No. C-C-85-655-M.,C-C-85-655-M.
• Court: U.S. District Court — Western District of North Carolina
• Parties: Patrick H. HYATT; Herman O. Caudle and Mary P. Lovingood, on behalf of themselves and all others similarly situated, Plaintiffs, and North Carolina Department of Human Resources, Disability Determination Services, Plaintiffs-Intervenors, v. Margaret M. HECKLER, or her successors in office, Secretary of the United States Department of Health and Human Services, Defendant.

618 F. Supp. 227

Patrick H. HYATT; Herman O. Caudle and Mary P. Lovingood, on behalf of themselves and all others similarly situated, Plaintiffs and North Carolina Department of Human Resources, Disability Determination Services, Plaintiffs-Intervenors, v. Margaret M. HECKLER, or her successors in office, Secretary of the United States Department of Health and Human Services, Defendant.

No. C-C-85-655-M.

United States District Court, W.D. North Carolina, Charlotte Division.

September 11, 1985.

Charles McBrayer Sasser, Legal Services of Southern Piedmont, Inc., John Wester, Robinson, Bradshaw & Hinson, Independence Center, Charlotte, N.C., for plaintiffs.

Jeffrey L. Bishop, Charlotte, N.C., for plaintiff-intervenor.

Richard S. Poe, Asst. U.S. Atty., Charlotte, N.C., Jason Baron, Office of General Counsel, U.S. Dept. of Human Services, Baltimore, Md., for defendant.

ORDER

McMILLAN, District Judge.

This case is before the court on plaintiffs' second and third motions for attorney fees.

The background to this case is set out in this court's orders reported at 579 F.Supp. 985 (W.D.N.C.1984) and 586 F.Supp. 1154 (W.D.N.C., 1984), vacated and remanded, 757 F.2d 1455 (4th Cir.1985), and the order of remand filed June 25, 1985, and will not be repeated in detail here.

In its decision reported at 586 F.Supp. 1154, the court set in detail the Blum v. Stenson, 465 U.S. 886, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984) and Johnson v. Georgia Highway Express, 488 F.2d 714 (5th Cir. 1974) factors and their applicability to a fee award in this case. There is no need to repeat that litany once again. The issue presented to the court at this time is whether plaintiffs' fee award should be reduced to account for the issues on which the Appeals Court reversed this court's judgment and on which defendant might therefore be said to have prevailed.

Before addressing the specific issue of reduction of the award, the court will address the proposition advanced by defendant that plaintiffs are no longer prevailing parties as a result of the Fourth Circuit's decision. She argues that because the injunction against non-acquiescence was vacated, and because that was "all plaintiffs were asking for in bringing this suit," the plaintiffs are no longer prevailing parties and should be awarded no attorney fees. The court does not accept that contention. It defies the imagination to concoct an interpretation of this suit that would make plaintiffs anything but prevailing parties. Indeed, as discussed below, the court finds that, despite certain modifications of the original judgment, plaintiffs' achievements remain so substantial as to justify the court in finding that they have obtained excellent results and to award all but a small portion of the fees requested.

In vacating this court's injunction against the defendant's policy of non-acquiescence, the Fourth Circuit specifically stated that "the Secretary should not deem vacation of the injunction as approval of the policy of nonacquiescence" and that "we will not assume that the Secretary will disregard the views expressed in the Conference Report to the 1984 Social Security Disability Reform Act about the Secretary's policy of nonacquiescence in circuit law." (Hyatt v. Heckler, supra, 757 F.2d at 1460, 1461). The defendant appears to have taken the admonitions of the courts and Congress to heart. On June 3, 1985, defendant issued a news release announcing that the Social Security Administration was abandoning, in the overwhelming majority of cases, its "practice of routinely not applying a circuit court's interpretation beyond the decision in the particular case." In its Interim Circular No. 185, apparently issued simultaneously for inclusion in the Office of Hearings and Appeals Handbook, defendant states

SSA has been subject to increasing litigation in recent years involving a myriad of program issues. One of the most troubling questions which has been raised by Congress, the Courts, and by the public at large has been the issue of nonacquiescence. Recently, nonacquiescense has been the subject of various law suits challenging its legality. Moreover, Congress, in enacting the 1984 Disability Amendments, indicated in a Conference Report on that legislation that the Secretary should seek a resolution of the issue. These developments have led to a reexamination of the agency's practices. As a result, the Secretary has decided to modify the long-standing policy and has established a procedure described below. These procedures require that particular circuit court decisions will be considered prior to a final decision of the Secretary being rendered on the case.

The nexus between this suit and the modification of the Secretary's admittedly "long-standing policy" of nonacquiescence is thus admitted by the Secretary herself.

More fundamentally, plaintiffs have achieved the result for which the suit was originally filed and pursued. In order to be a prevailing party, "what always must occur is the establishment of a right or the proscription of a wrong." Smith v. University of North Carolina, 632 F.2d 316, 347 (4th Cir.1980). Plaintiffs have been granted the right to new hearings under lawful standards. This relief would not have been achieved for most of the plaintiffs benefited by the order on remand filed June 25, 1985, had the suit not been filed and prosecuted to this point. Although the intervening legislation made the remands of the Dotson class "automatic," the members of the class who were not already in federal court benefited only because a class action had been filed in their behalf. The Myers and Martin class members would not have been guaranteed new hearings at all. The scope of the reconsideration of the claims of the latter two classes' members is beyond that which would have been required by an individual remand in those cases already filed in federal court. Plaintiffs' filing of the Hyatt suit, the motions for class certification and injunctive and declaratory relief, were all necessary to bring to the plaintiffs' classes the relief obtained by the issuance of the June 25, 1985, order of remand.

Defendants' exclusive focus on the vacation of the injunction against nonacquiescence is misplaced. That approach attempts to trivialize what has been a more than significant effort on behalf of and victory for the rights of the plaintiffs.

Defendant further argues that plaintiffs are not prevailing parties because the classes gaining benefits from this suit have shrunk drastically because of the reversal by the Fourth Circuit of the inclusion in the Martin and Myers classes of persons who did not exhaust administrative remedies or received adverse decisions from the Appeals Council more than 60 days prior to the filing of this suit but did not file suit pursuant to the requirements of 42 U.S.C. § 405(g). The Secretary brings forward figures (not previously presented to the court) that the original Hyatt classes, in total, may have included over 60,000 persons entitled to receive review of their claims but that the class has now shrunk to "only" between 10,000 and 15,000 people.

Although this reduction might entitle defendant to some reduction in the amount of fees awarded should it be found that a substantial portion of counsel's time was spent solely on those individuals' claims, this development does not change plaintiffs' status as prevailing parties. The fact remains that at least 10,000 persons and probably more, in North Carolina now have the opportunity for reconsideration of their disability claims where they had no such opportunity before this suit was filed and won. Even those persons benefited by the Social Security Disability Reform Act of 1984 (the Dotson class in particular), except those persons whose cases were already pending in federal court, would not have had the benefit of review had the class not been certified in Hyatt prior to September 19, 1984. The Myers and Martin class members who remain in the suit had no provision made for re-review of their claims under the new act.

Furthermore, as will be set out more fully below, the Supreme Court has specifically stated that the number of persons benefited in a particular lawsuit is not a "consideration of significance in calculating fees," Blum v. Stenson, 465 U.S. 886, ___, n. 16, 104 S.Ct. 1541, 1549, n. 16, 79 L.Ed.2d 891, since, "presumably, counsel will spend as much time and will be as diligent in litigating a case that benefits a small class of people, or, indeed, in protecting the civil rights of a single individual." Id.

In conclusion, the court finds that plaintiffs remain the prevailing parties in this case and that the government's position has not been substantially justified for the reasons set out in the orders previously filed and the matters discussed herein. Therefore, plaintiffs are entitled to an award of attorney fees.

The court has already set out in its earlier attorney fee order the factors to be considered in determining the amount of fees to which plaintiffs are entitled and their applicability to this case. With a few minor adjustments, they remain applicable here. The central issue is whether, considering the Fourth Circuit's decision, the 1984 Disability Reform Act, and the final order entered in this case on June 25, 1985, a reduction in the award of fees is warranted.

Upon reviewing the pleadings, trial transcript and records of other hearings conducted in this case, the Fourth Circuit's decision and the final order of remand, the court finds that the plaintiffs achieved exceptional results, despite reductions in the size of the class because of the Fourth Circuit's ruling on the merits of the legal question of exhaustion and the applicability of the requirements of 42 U.S.C. § 405(g).

Defendant argues that the Supreme Court's decision in Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983), requires substantial reduction, if not elimination,...