Shalala v. Schaefer

• Decision Date: 24 June 1993
• Docket Number: No. 92-311,92-311
• Citation: 125 L.Ed.2d 239,509 U.S. 292,113 S.Ct. 2625
• Parties: Donna E. SHALALA, Secretary of Health and Human Services, Petitioner v. Richard H. SCHAEFER
• Court: U.S. Supreme Court

509 U.S. 292

113 S.Ct. 2625

125 L.Ed.2d 239

Donna E. SHALALA, Secretary of Health and Human Services, Petitioner

v Richard H. SCHAEFER.

No. 92-311.

Argued March 31, 1993.

Decided June 24, 1993.

Syllabus ^*

In 1986, respondent Schaefer filed a claim for Social Security disability benefits, which was denied by petitioner Secretary at the administrative level. Schaefer sought judicial review and, on April 4, 1989, the District Court reversed the administrative denial of benefits and remanded the case to the Secretary pursuant to the fourth sentence of 42 U.S.C. § 405(g). Schaefer was awarded benefits on remand and, in July of 1990, he returned to the District Court and filed for attorney's fees under the Equal Access to Justice Act (EAJA). In opposing the motion, the Secretary noted that the EAJA required Schaefer to file his application within 30 days of "final judgment" in the action, 28 U.S.C. § 2412(d)(1)(B), and argued that the 30-day clock began running when the District Court's sentence-four remand order of April 4, 1989 became final, which would have occurred at the end of the 60 days for appeal provided under Federal Rule of Appellate Procedure 4(a). The District Court awarded fees to Schaefer, holding that a sentence-four remand order is not a final judgment where a court retains jurisdiction and plans to enter a judgment after remand proceedings are complete. The Court of Appeals affirmed on the same basis.

Held:

1. The 30-day period for filing an application for EAJA fees begins immediately upon expiration of the time for appeal of a "sentence-four remand order." Pp. ____.

(a) A district court remanding a case pursuant to sentence four of § 405 must enter judgment in the case and may not retain jurisdiction over the administrative proceedings on remand. Sentence four's plain language authorizes a court to enter a judgment "with or without remanding the cause for a rehearing," not a remand order "with or without" a judgment. Pp. ____.

(b) The Court's decision in Sullivan v. Hudson, 490 U.S. 877, 892, 109 S.Ct. 2248, 2258, 104 L.Ed.2d 941—that fees incurred during administrative proceedings held pursuant to a district court's remand order may be recovered under the EAJA—does not apply where the remand is ordered pursuant to sentence four of § 405(g). Pp. ____.

(c) Contrary to dicta in Sullivan v. Hudson, a Social Security claimant who obtains a sentence-four judgment reversing the Secretary's denial of benefits meets the description of a "prevailing party" set out in Texas Teachers Assn. v. Garland Independent School Dist., 489 U.S. 782, 791-792, 109 S.Ct. 1486, 1493, 103 L.Ed.2d 866. Pp. ____.

2. Schaefer's application for EAJA fees was nonetheless timely under § 2412(d)(1) because the District Court failed to comply with Federal Rule of Civil Procedure 58 in entering its sentence-four remand order of April 4, 1989. The EAJA's 30-day time limit runs from the end of the period for appeal, and that period does not begin until a judgment is entered in compliance with the formalities of Rule 58. Because the District Court never entered formal judgment, neither the time for appeal nor the EAJA's 30-day clock had run when Schaefer filed his application. P. ____.

960 F.2d 1053 (CA8 1992) affirmed.

SCALIA, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, O'CONNOR, KENNEDY, SOUTER, and THOMAS, JJ., joined.

STEVENS, J., filed an opinion concurring in the judgment, in which BLACKMUN, J., joined.

William K. Kelley, Washington, DC, pro hac vice, by special leave of the Court for petitioner.

Randall J. Fuller, Anoka, MN, for respondent.

Justice SCALIA delivered the opinion of the Court.

This case concerns the proper timing of an application for attorney's fees under the Equal Access to Justice Act (EAJA) in a Social Security case. Under 42 U.S.C. § 405(g), a claimant has the right to seek judicial review of a final decision of the Secretary of Health and Human Services denying Social Security benefits. One possible outcome of such a suit is that the district court, pursuant to sentence four of § 405(g), will enter "a judgment . . . reversing the decision of the Secretary . . . [and] remanding the cause for a rehearing." The issue here is whether the 30-day period for filing an application for EAJA fees begins immediately upon expiration of the time for appeal of such a "sentence-four remand order," or sometime after the administrative proceedings on remand are complete.

I

In 1986, respondent Richard Schaefer filed an application for disability benefits under Title II of the Social Security Act, 49 Stat. 622, as amended, 42 U.S.C. § 401 et seq. (1988 ed. and Supp. III). He was denied benefits at the administrative level, and sought judicial review by filing suit against the Secretary as authorized by § 405(g). Schaefer and the Secretary filed cross-motions for summary judgment. On April 4, 1989, the District Court held that the Secretary had committed three errors in ruling on Schaefer's case and entered an order stating that "the Secretary's decision denying disability insurance benefits to [Schaefer] is reversed, that the parties' cross-motions for summary judgment are denied, and that the case is remanded to the Secretary for further consideration in light of this Order." App. to Pet. for Cert. 27a.

In accordance with this order, Schaefer's application for benefits was reconsidered at the administrative level, and was granted. On July 18, 1990, Schaefer returned to the District Court and filed an application for attorney's fees pursuant to EAJA. In response, the Secretary noted that Schaefer was required to file any application for EAJA fees "within thirty days of final judgment in the action," 28 U.S.C. § 2412(d)(1)(B), and argued that the relevant "final judgment" in the case was the administrative decision on remand, which had become final on April 2, 1990. The District Court stayed action on Schaefer's EAJA application pending this Court's imminent ruling in Melkonyan v. Sullivan, 501 U.S. ----, 111 S.Ct. 2157, 115 L.Ed.2d 78 (1991).

Melkonyan was announced shortly thereafter, holding that a final administrative decision could not constitute a "final judgment" for purposes of § 2412(d)(1)(B). Id., at ----, 111 S.Ct., at 2162. In light of Melkonyan, the Secretary changed positions to argue that EAJA's 30-day clock began running when the District Court's April 4, 1989 order (not the administrative ruling on remand) became final, which would have occurred at the end of the 60 days for appeal provided under Federal Rule of Appellate Procedure 4(a). Thus, the Secretary concluded, Schaefer's time to file his EAJA application expired on July 3, 1989, over a year before the application was filed. The District Court, however, found Schaefer's EAJA application timely under the controlling circuit precedent of Welter v. Sullivan, 941 F.2d 674 (CA8 1991), which held that a sentence-four remand order is not a final judgment where "the district court retain[s] jurisdiction . . . and plan[s] to enter dispositive sentence four judgmen[t]" after the administrative proceedings on remand are complete. Id., at 675. The District Court went on to rule that Schaefer was entitled to $1,372.50 in attorney's fees.

The Secretary fared no better on appeal. The Eighth Circuit declined the Secretary's suggestion for en banc reconsideration of Welter, and affirmed the District Court in an unpublished per curiam opinion. The Secretary filed a petition for certiorari, urging us to reverse the Court of Appeals summarily. We granted certiorari, 506 U.S. ----, 113 S.Ct. 594, 121 L.Ed.2d 532 (1992), and set the case for oral argument.

II

The first sentence of 28 U.S.C. § 2412(d)(1)(B) provides:

"A party seeking an award of fees and other expenses shall, within thirty days of final judgment in the action, submit to the court an application for fees and other expenses which shows that the party is a prevailing party and is eligible to receive an award under this subsection, and the amount sought, including an itemized statement from any attorney or expert witness representing or appearing in behalf of the party stating the actual time expended and the rate at which fees and other expenses were computed." (Emphasis added.)

In Melkonyan v. Sullivan, we held that the term "final judgment" in the highlighted phrase above "refers to judgments entered by a court of law, and does not encompass decisions rendered by an administrative agency." See 501 U.S., at ----, 111 S.Ct., at 2162. Thus, the only order in this case that could have resulted in the starting of EAJA's 30-day clock was the District Court's April 4, 1989 order, which reversed the Secretary's decision denying disability benefits and remanded the case to the Secretary for further proceedings.

In cases reviewing final agency decisions on Social Security benefits, the exclusive methods by which district courts may remand to the Secretary are set forth in sentence four and sentence six of § 405(g), which are set forth in the margin.¹ See Melkonyan, supra, at ---- ----, 111 S.Ct., at 2163-2164. Schaefer correctly concedes that the District Court's remand order in this case was entered pursuant to sentence four.² He argues, however, that a district court proceeding under that provision need not enter a judgment at the time of remand, but may postpone it and retain jurisdiction pending completion of the administrative proceedings. That argument, however, is inconsistent with the plain language of sentence four, which authorizes a district court to enter a judgment "with or without" a remand order, not a remand order "with or without" a judgment. See Sullivan v. Finkelstein, 496 U.S. 617, 629, 110 S.Ct. 2658, 2666, 110 L.Ed.2d 563 (1990). Immediate entry of judgment (as opposed to entry of judgment after postremand agency proceedings have been completed and their results filed with the court) is in fact the principal feature that distinguishes...