McDonald v. Schweiker, S 81-153.

• Citation: 551 F. Supp. 327
• Decision Date: 12 November 1982
• Docket Number: No. S 81-153.,S 81-153.
• Parties: Sarah L. McDONALD, Plaintiff, v. Richard SCHWEIKER, Secretary of Health and Human Services, Defendant.
• Court: U.S. District Court — Northern District of Indiana

551 F. Supp. 327

Sarah L. McDONALD, Plaintiff, v. Richard SCHWEIKER, Secretary of Health and Human Services, Defendant.

No. S 81-153.

United States District Court, N.D. Indiana, South Bend Division.

November 12, 1982.

Gregory S. French, South Bend, Ind., for plaintiff.

R. Lawrence Steele, Jr., Hammond, Ind., for defendant.

MEMORANDUM OF DECISION AND ORDER

ALLEN SHARP, District Judge.

Plaintiff filed this action to obtain judicial review of a final decision of the Secretary of Health and Human Services pursuant to 42 U.S.C. § 405(g) as to when plaintiff first became entitled to old age insurance benefits under the Social Security Act, 42 U.S.C. §§ 402(a) and 414(a). On October 5, 1981, this Court granted plaintiff's motion for summary judgment and estopped the Social Security Administration from relying on the absence of a prescribed application form to deny plaintiff's claim for benefits beginning in November 1978. 537 F.Supp. 47. Judgment was entered accordingly on the same date.

On December 2, 1981, defendant filed its Notice of Appeal with this Court. In January and February 1982, defendant received extensions of time in which to file its appellant's brief, the last extension expiring on March 19, 1982. On March 24, 1982, defendant/appellant filed a motion to dismiss its appeal, which the Court of Appeals granted and dismissed the appeal with prejudice on March 30, 1982. In an award certificate dated April 22, 1982, defendant notified plaintiff that its previous determination to award plaintiff benefits beginning August 1979 was superseded by a determination to award her benefits beginning November 1978 in accordance with this Court's order of October 5, 1981.

On April 20, 1982, plaintiff filed an application for an order awarding attorney fees and costs pursuant to the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d). The government opposes the application on several grounds. First, the government contends that the application was not timely made. Second, the government maintains that no award of attorney fees and costs in this case may be based on the EAJA as the fee provision of the Social Security Act, 42 U.S.C. § 406(b)(1) is the sole authorization for fees in social security cases. The government's last argument against an award of attorney fees under the EAJA in this case is that its position was substantially justified and that special circumstances make an award unjust in this case.

I.

The EAJA became effective on October 1, 1981 and applies to any civil action "which is pending on, or commenced on or after, such date." Pub.L. No. 96-481, § 208, 94 Stat. 2330 (1980). Defendant's contention that neither the time necessary for the preparation of the plaintiff's case nor the time expended by plaintiff's attorneys prior to October 1, 1981 can be compensated under the EAJA are without merit. The language of EAJA and its intent indicate that the plaintiff is entitled to attorney fees for time expended on this case as it was pending on the effective date of the EAJA. See, Photo Data v. Sawyer, 533 F.Supp. 348 (D.D.C.1982); Berman v. Schweiker, 531 F.Supp. 1149 (N.D.Ill.1982).

Defendant's contention that plaintiff was required to file her application for attorney fees and costs within 30 days of this Court's order granting plaintiff's motion for summary judgment is also without merit, as it conflicts with both the purpose of the EAJA as well as its legislative history. As noted by the Supreme Court of the United States, "many final orders may issue in the course of a litigation," Bradley v. Richmond School Bd., 416 U.S. 696, 94 S.Ct. 2006, 2022, 40 L.Ed.2d 476 (1974), and "sometimes it may be unclear even to counsel which orders are and which are not `final judgment,'" White v. New Hampshire Department of Employment Security, 455 U.S. 445, 102 S.Ct. 1162, 1167, 71 L.Ed.2d 325 (1982). Observing that "the concept of finality is not easily defined," Sherman v. Jacobson, 247 F.Supp. 261, 268 (S.D.N.Y.1965), held that a judgment could be "final" in one legal context but "not final" in another legal context. Such reasoning is consistent with Mr. Justice Brandeis' famous phrase, "final" also is "a word of many meanings." Southwestern Bell Telephone Co. v. Public Service Comm'n, 262 U.S. 276, 43 S.Ct. 544, 554, 67 L.Ed. 981 (1923). Sherman holds that the meaning of final can only be determined by examining the purposes, policies, and considerations that make up the context in which the word "final" is used. 247 F.Supp. at 268. Consequently, "in determining the meaning of the term `final judgment' as used in the act, we must look to the act itself and ascertain the intent of Congress with reference thereto." Twin Ports Oil Co. v. Pure Oil Co., 26 F.Supp. 366, 368 (D.Minn.1939), aff'd, 119 F.2d 747 (8th Cir.1941), cert. den., 314 U.S. 644, 62 S.Ct. 84, 86 L.Ed. 516 (1941).

The purpose of EAJA is to remedy the problem that "for many citizens, the costs of securing vindication of their rights and the inability to recover attorney fees preclude resort to the adjudicatory process. When the cost of contesting a government order, for example, exceeds the amount at stake, a party has no realistic choice and no effective remedy." H.R.Rep. No. 96-1418, supra, U.S.Code Cong. & Admin.News 1980, p. 4953 at 4988. EAJA remedies this as follows:

By allowing a decision to contest Government action to be based on the merits of the case rather than the cost of litigating, EAJA helps assure that administrative decision reflect informed deliberation. In so doing, fee-shifting becomes an instrument for curbing excessive regulation and the unreasonable exercise of Government authority.

H.R.Rep. No. 96-1418, supra, at 4991.

In determining the intent of Congress with reference to the term "final," the courts have placed great weight upon whether Congress uses the words "final judgment" as opposed to merely "the judgment entered," Twin Ports Oil Co., 26 F.Supp. at 369, or whether "the statute explicitly requires a `final judgment or decree' and does not refer, for example, to a final decision — a point of contrast made recently in the Supreme Court with respect to appealable orders. Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949); Leonia Amusement Corp. v. Loew's, Inc., 117 F.Supp. 747, 761 (S.D.N.Y.1953). Given that Congress explicitly requires a "final judgment" rather than referring merely to the judgment entered or a final decision, the definition of "final" that fits within the context of the purposes, policies, and considerations of EAJA is the definition of "final" as used in § 5(a) of the Clayton Act, 15 U.S.C. § 16(a). In this context, Congress intended the word "final" to mean that "the time to appeal must have run or the judgment must have been affirmed by the court of last resort". Illinois v. Sperry Rand Corp., 237 F.Supp. 520, 523 (N.D.Ill.1965). Consequently, "a judgment appealed from is not a final judgment," Twin Ports Oil Co., 26 F.Supp. at 369, and the entry of a judgment becomes a final judgment only" upon expiration of the time to appeal." Skouras Theatres Corp. v. Radio-Keith-Orpheum Corp., 193 F.Supp. 401, 404 (S.D.N.Y.1961). The requirement in EAJA that an application for an award of fees be filed within thirty days of final judgment means that an application must be filed within thirty days of the expiration of the time to appeal or within thirty days of the terminating action in the court of last resort. This still permits an application for fees upon entry of final orders at earlier stages of the litigation. The court may award fees at such stages or defer its ruling until the final judgment on the merits. Referring to the 30 day requirement, the House Report states, "this language, however, should not be construed to require a final judgment on the merits before a court may award fees." H.R.Rep. No. 96-1418, supra, at 4997. Hence, "in cases that are litigated to conclusion, a party may be deemed `prevailing' for purposes of a fee award in a civil action prior to the losing party having exhausted its final appeal." H.R.Rep. No. 96-1418, supra, at 4990.

The legislative history in no way indicates that a fee application must be filed after every final order. Such a requirement would waste not only the time of attorneys for both the prevailing party and the government but also the increasingly valuable time of the court. Likewise, there is no evidence of an intent to preclude a prevailing party from filing one application for all fees arising during the entire litigation, from preparation of the complaint through final judgment on the merits, provided it is filed within thirty days of the expiration of the time to appeal or the termination of the litigation by the court of last resort. Such a definition of "final" satisfies Congress' concern that there be a time after which an application cannot be filed. At the same time it insures that in determining whether the government's position is substantially justified, the court can review the government's position from the onset of the litigation through the conclusion of the last appeal rather than bifurcating the court's review between the district court action and the appellate court action. Given EAJA's purpose of encouraging private individuals to challenge unreasonable government action without financial detriment, a definition of "final" that permits review of government conduct from the very beginning through the very end of litigation not only makes practical sense but satisfies Congress' ultimate purpose in enacting the Act. Accordingly, this Court finds that plaintiff's application for attorney fees and costs was timely and appropriately filed.

II.

The issues raised by the government regarding the application of the EAJA in this case were raised in Ocasio v. Schweiker, 540 F.Supp. 1320 (S.D.N.Y.1982). This Court believes that Judge Edward Weinfeld's opinion covers and correctly decides...