MacDonald v. Schweiker

• Decision Date: 01 November 1982
• Docket Number: No. CV 81-1314.,CV 81-1314.
• Citation: 553 F. Supp. 536
• Parties: Mary MacDONALD, Plaintiff, v. Richard SCHWEIKER, Secretary of the Department of Health and Human Services, Defendant.
• Court: U.S. District Court — Eastern District of New York

553 F. Supp. 536

Mary MacDONALD, Plaintiff, v. Richard SCHWEIKER, Secretary of the Department of Health and Human Services, Defendant.

No. CV 81-1314.

United States District Court, E.D. New York.

November 1, 1982.

Robert & Schneider by Ira S. Schneider, Hempstead, N.Y., for plaintiff.

Raymond J. Dearie, U.S. Atty. by Ben Wiles, Asst. U.S. Atty., Brooklyn, N.Y., for defendant.

MEMORANDUM AND ORDER

GEORGE C. PRATT, Circuit Judge.^*

On May 3, 1982, the court denied defendant's motion to dismiss the complaint in this action and granted plaintiff's motion to remand the case to the Appeals Council for review. Counsel for plaintiff now moves for an award of costs and attorneys' fees pursuant to the Equal Access to Justice Act, 28 U.S.C. § 2412 (EAJA).

Plaintiff commenced this action after the Appeals Council refused to review two decisions of the administrative law judge (ALJ) denying plaintiff's application for benefits prior to March 23, 1979. On May 22, 1980, plaintiff, who was not represented by counsel at that time, was granted disability insurance benefits retroactive to March 23, 1979, but was denied benefits before that date. Accompanying the notice of decision was a letter containing directions for plaintiff to follow if she wished to appeal the decision. The directions, in summary, stated that plaintiff had the right to request the Appeals Council to review the decision within 60 days, and that she could do so by filing a request for review at the social security office or the hearing office, or by writing or telephoning those offices and indicating her intent to request review. Plaintiff called the ALJ's secretary within the appropriate time period to make inquiry concerning the steps she should take to appeal the decision with respect to the date of the onset of her disability. The secretary told her that an appeal was unnecessary because the ALJ would reopen the decision and consider plaintiff's additional evidence.

Plaintiff then retained an attorney to represent her in this matter. The attorney requested that the ALJ reopen the decision so that plaintiff could present additional evidence to establish the date of disability earlier than March 23, 1979. The ALJ conducted a hearing at which plaintiff appeared personally and testified as did a doctor. On November 25, 1980, the ALJ denied the request to reopen his decision.

On January 9, 1981, plaintiff requested the Appeals Council to review the ALJ's decision of November 25, 1980, and was advised that the denial of a request to reopen the hearing decision was not appealable. Further, plaintiff was told that no good cause had been shown for extending the time to file a request for review of the ALJ's decision of May 22, 1980.

Defendant moved to dismiss the claim in this court on the ground that the court lacked subject matter jurisdiction because there was no "final decision" of the secretary for judicial review as required by 42 U.S.C. § 405(g).

After a careful examination of the record, the court determined that the Appeals Council had been incorrect in refusing to review the ALJ's decision of November 25, 1980, because the ALJ had in fact reopened the hearing decision, taken new testimony, and made new findings of fact and credibility based on new evidence relating to plaintiff's physical condition prior to March 1979. Plaintiff had filed a timely request to appeal that decision and, therefore, the court held that she was entitled to review on the merits by the Appeals Council pursuant to 20 CFR § 404.970. Thus, plaintiff's claim was remanded for review by the Appeals Council.

The court also noted that, with respect to the ALJ's original decision of May 22, 1980, plaintiff, in telephoning the ALJ's office to ask how she could appeal the decision, was following the directions which were supplied on defendant's form notice to plaintiff concerning her right to appeal. While the court did not rely upon this fact as a basis for the decision to remand, it did suggest that the wording of the notice was misleading, especially for pro se litigants.

Plaintiff's application for counsel fees followed this decision.

The Equal Access to Justice Act provides in relevant part:

(a) except as otherwise specifically provided by statute, a judgment for costs, as enumerated in Section 1920 of this title, but not including the fees and expenses of attorneys, may be awarded to the prevailing party in any civil action brought by or against the United States or any agency and any official of the United States acting in his or her official capacity in any court having jurisdiction of such action. A judgment for costs when taxed against the United States shall, in an amount established by statute, court rule, or order, be limited to reimbursing in whole or in part the prevailing party for the costs incurred by such party in the litigation.

* * * * * *

(d)(1)(A) except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses, in addition to any costs awarded pursuant to subsection (a), incurred by that party in any civil action (other than cases sounding in tort) brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the decision of the United States was substantially justified or that special circumstances make an award unjust.

Defendant argues that counsel for plaintiff was not entitled to an award of fees because (1) there is no entry of final judgment since the case was remanded, (2) plaintiff is not a prevailing party within the meaning of the statute, and (3) that even if she were a prevailing party, fees cannot be awarded because the secretary's position was substantially justified. Defendant also challenges the amount of the hourly rate sought, and argues that no fee may be awarded for services rendered prior to the effective date of the Act.

Because the statute became effective on October 1, 1981, few reported cases have interpreted its provisions. At least two courts have held, or recognized implicitly, that the EAJA is applicable to cases such as this one arising under Title II of the Social Security Act. Wolverton v. Schweiker, 533 F.Supp. 420, 423 (D.Idaho 1982); see Berman v. Schweiker, 531 F.Supp. 1149 (N.D.Ill.1982). Since the secretary does not raise the issue in this case, it is sufficient merely to note that the court agrees with the reasoning of Wolverton which leads to the conclusion that an award of fees and other expenses incurred under Title II of the Social Security Act is available under the EAJA.

Since attorneys' fees and other expenses may be awarded in suits brought under Title II of the Social Security Act, the court turns to the issues raised by defendant in opposition to plaintiff's motion.

The lack of a "final judgment"

Defendant's first argument is that costs and fees may not be awarded under the EAJA because of the absence of a final judgment. He argues that an order of remand has repeatedly been held to be nonfinal and thus not reviewable by an appellate court, see, e.g., Gilcrist v. Schweiker, 645 F.2d 818 (9th Cir.1981), Dalto v. Richardson, 434 F.2d 1018 (2d Cir.1970), cert. denied, 401 U.S. 979 (1971). Because of the interlocutory nature of an order of remand, defendant argues that plaintiff has not met the requirement of § 2412(d)(1)(B) that the application for fees and expenses be submitted "within 30 days of final judgment in the action."

Defendant is correct in his argument that an order of remand does not constitute a final judgment. However, an examination of the EAJA's legislative history indicates that the availability of a fee award under the EAJA is not limited to cases where there has been a final judgment in an action. The House Report notes that "a fee award may * * * be appropriate where the party has prevailed on an interim order which was central to the case * * * or where an interlocutory appeal is `sufficiently significant and discrete to be treated as a separate unit'". H.R.1418, 96th Cong., 2d Sess. 11, reprinted in 1980 U.S.Code Cong. & Ad.News 4953, 4984, 4990 (citations omitted). Thus, while the court recognizes the nonfinal nature of an order of remand, it concludes that there may be cases, including social security remands, where an award of fees might be appropriate although final judgment has not been entered.

Plaintiffs as prevailing parties under the EAJA

Defendant's position concerning the absence of a final judgment is intertwined with his position that plaintiff is not entitled to fees under the statute because she is not a prevailing party within the meaning of the EAJA. The legislative history is clear that the term prevailing party is not to be limited to "a victor * * * after entry of a final judgment following a full trial on the merits." House Report at 4990. The committee that reported the bill in the House indicated that "it is the committee's intention that the interpretation of the term * * * consistent with the law that has developed under existing statutes." Id. Thus, a prevailing party may be one who has obtained a favorable settlement, Foster v. Boorstin, 561 F.2d 340 (D.C.Cir.1977) or one who has prevailed on an interim order central to the case, Parker v. Matthews, 411 F.Supp. 1059 (D.D.C.1976). A person has been held to be a prevailing party where, although unsuccessful on his own claim, he has acted as a "catalyst" in ending discrimination against others similarly situated. Parham v. Southwestern Bell Telephone Co., 433 F.2d 421 (8th Cir.1970). It follows, therefore, that a party need not necessarily have litigated to final judgment and have been awarded the ultimate relief he or she seeks in order to be entitled to an award of costs and/or fees under the EAJA.

The problem in the instant case, however, is that not only has plaintiff not litigated to a final judgment but also has not prevailed through a settlement or...