United States District Court, Northern District of Illinois, E.D
July 11, 1985
JOHN A. BOHN, SR., PLAINTIFF,
MARGARET HECKLER, SECRETARY OF HEALTH AND HUMAN SERVICES, DEFENDANT.
The opinion of the court was delivered by: Moran, District Judge.
MEMORANDUM AND ORDER
Plaintiff applied for disability benefits on October 31, 1980.
His application was rejected at the administrative level. On
September 26, 1984 this court reversed the decision of the
Secretary of Health and Human Services and remanded the case to
the Secretary because of two substantial errors made by the
Administrative Law Judge (ALJ) in evaluating plaintiff's case.
Plaintiff has now petitioned for $2,113.25 in attorneys' fees
under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412.*fn1
The EAJA provides that "a court shall award to a prevailing
party other than the United States" reasonable attorneys' fees
and expenses, in addition to costs, "incurred by that party in
any civil action . . . brought by or against the United States in
any court having jurisdiction of that action, unless the court
finds that the position of the United States was substantially
justified or that special circumstances made an award unjust."
28 U.S.C. § 2412(d)(1)(A). Thus, in order to recover attorneys' fees
and costs, plaintiff must be the prevailing party and the
government must fail to meet its burden of showing that its
position was substantially justified.
It is well established that the EAJA applies to suits in
federal court against the Secretary of Health and Human Services
by plaintiffs who have unsuccessfully pressed disability claims
at the administrative level. Berman v. Schweiker, 713 F.2d 1290,
1296 (7th Cir. 1983). The EAJA, however, does not apply to
administrative proceedings within the Social Security
Administration, either before or after action in federal court.
Rather, attorneys' fees for work done at the administrative level
are limited to 25% of the past due benefits collected and are
paid out of funds that would otherwise go to the client.
42 U.S.C. § 406(b)(1).
The most difficult question in this case is whether plaintiff
was a prevailing party. Some courts have awarded attorneys' fees
to plaintiffs who secure a remand. See e.g., Sizemore v. Heckler,
608 F. Supp. 911 (N.D.Ill. 1985); Burt v. Heckler, 593 F. Supp. 1125
(D.N.J. 1984); Coffman v. Heckler, 580 F. Supp. 67
(N.D.Calif., 1984); Knox v. Schweiker, 567 F. Supp. 959 (D.Del.
1983); Ceglia v. Schweiker, 566 F. Supp. 118 (E.D.N.Y. 1983);
Gross v. Schweiker, 563 F. Supp. 260 (N.D.Ind. 1983). Other
courts, however, including three circuit courts, have held that
a plaintiff is not a prevailing party simply by obtaining a
remand. See e.g. Cook v. Heckler, 751 F.2d 240 (8th Cir. 1984);
Brown v. Secretary of Health and Human Services, 747 F.2d 878 (3d
Cir. 1984); McGill v. Secretary of Health and Human Services,
712 F.2d 28 (2d Cir. 1983), cert. denied, ___ U.S. ___, 104 S.Ct.
1420, 79 L.Ed.2d 745 (1984). See also Steffens v. Heckler,
602 F. Supp. 754 (N.D.Ill. 1985). This court adopts the former
approach for a remand which is based upon a decision rejecting
the Secretary's rebuttal to a prima facie entitlement to
Congress intended that the definition of "prevailing party"
under the EAJA be consistent with the definition of the term
under existing fee-shifting statutes. H.R.Rep. No. 1418, 96th
Cong., 2d Sess., reprinted in 1980 U.S.Code Cong & Ad. News 4953.
A party need not litigate a case to final judgment in order to be
a prevailing party:
[T]he phrase "prevailing party" should not be limited
to a victor only after entry of a final judgment
following a full trial on the merits. A party may be
deemed prevailing if he obtains a favorable
settlement of his case, Foster v. Boorstin,
561 F.2d 340 (D.C.Cir. 1977); if the plaintiff has sought a
voluntary dismissal of a groundless complaint,
Corcoran v. Columbia Broadcasting System, Inc.,
121 F.2d 575 (9th Cir. 1941); or even if he does not
ultimately prevail on all issues, Bradley v. School
Board of the City of Richmond, 416 U.S. 696 [94 S.Ct.
2006, 40 L.Ed.2d 476] (1974).
In cases that are litigated to conclusion a party
may be deemed prevailing for purposes of a fee award
in the civil action prior to the losing party having
exhausted its final appeal. A fee award may thus be
appropriate where the party has prevailed on the
interim order which was central to the case. Parker
v. Matthews, 411 F. Supp. 1059, 1064 (D.D.C. 1976), or
where an interlocutory appeal is "sufficiently
significant and discrete to be treated as a separate
unit", Van Hoomissen v. Xerox Corp., 503 F.2d 1131,
1133 (9th Cir. 1974).
H.R.Rep. No. 1418 at 11, reprinted in 1980, U.S.Code Cong. & Ad.
News at 4990. In short, plaintiffs are prevailing parties for
attorney' fees purposes "`if they succeed on any significant
issue in litigation which achieves some of the benefit the
parties sought in bringing suit.'" Hensley v. Eckerhart,
461 U.S. 424, 433, 103 S.Ct. 1933, 1939, 76 L.Ed.2d 40 (1983), quoting
from Nadeau v. Helgemoe, 581 F.2d 275, 278-79 (1st Cir. 1978).
When the administrative procedures for determining disability
claims are considered and the limited purpose of the proceedings
before the district court recognized, it is evident that in some
circumstances a remand represents both success on a significant
issue and achievement of much of the benefit sought by plaintiff
in bringing the suit.
To make out a prima facie case of disability, claimants must
show that an impairment prevents the performance of past work.
Whitney v. Schweiker, 695 F.2d 784, 786 (7th Cir. 1982). Once a
claimant makes out a prima facie case of disability, the
Secretary has the burden of going forward with proof that there
is available some other kind of "substantial gainful employment"
the claimant can perform. Id.
Disability claims are evaluated at the administrative level
according to a five-step process. 20 C.F.R. § 404.1520.*fn2 A
finding of disabled or not disabled at any point in the
evaluation process is conclusive and terminates the analysis.
20 C.F.R. § 404.1520(a). First, a claimant who is currently working
is not disabled. 20 C.F.R. § 404.1520(b). Second, a claimant
whose impairments are not "severe" is not disabled.
20 C.F.R. § 404.1520(c).*fn3 Third, a claimant whose
impairments meet or equal an impairment listed in appendix 1 of
the regulations (the listed impairments) is presumptively disabled.
20 C.F.R. § 404.1520(d). Fourth, a claimant whose impairments
are severe but do not meet appendix 1 levels is not disabled if
the claimant's "residual functional capacity" permits performance
of past work. 20 C.F.R. § 404.1520(e). Fifth, a claimant
with severe but not listed impairments who is unable to do past
work is disabled if the claimant cannot do other work in light
of the claimant's age,
education and past work experience. 20 C.F.R. § 404.1520(f).*fn4
In administrative proceedings Bohn established a prima facie
case of disability. He convinced the ALJ that he was incapable of
performing his past work because of back problems. Thus the
burden of going forward shifted to the Secretary. At stage 5 of
the disability determination process the Secretary established to
the ALJ's satisfaction that plaintiff was capable of sedentary
work and was thus not disabled. When the ALJ's decision denying
benefits was adopted by the Appeals Council it became the final
decision of the Secretary.
The district court has four main options in a Social Security
disability appeal. It can uphold the ALJ's decision, modify the
decision, reverse the decision outright or reverse and remand the
case to the Secretary for rehearing. 42 U.S.C. § 405(g). Cases
can be remanded on motion of the Secretary for good cause shown
or upon a showing that there is new material evidence and good
cause for the claimant's failure to have incorporated the
evidence into the record. Most commonly, however, cases are
remanded on substantive grounds when an ALJ's decision is
reversed as unsupported by substantial evidence or because the
ALJ had improperly applied the law. See generally Aubeuf v.
Schweiker, 649 F.2d 107, 115-16 (2d Cir. 1981).
In this case the court reversed the ALJ's decision and ordered
a remand because of substantive defects in the ALJ's evaluation.
Because claimant had already established a prima facie case of
disability, the unexpressed but very real holding of this court
was that the Secretary had not met her burden of going forward.
The remand order left intact plaintiff's prima facie entitlement
to benefits but invalidated the Secretary's rebuttal. As might be
expected, a remand of this kind substantially increases
plaintiff's chances of ultimately securing benefits. Figures show
that over half the claimants who obtain a remand of any type from
the district court ultimately secure benefits. See Burt, 593
F. Supp. at 1130 n. 1.
Courts that have held that plaintiffs who have secured a remand
are not prevailing parties have relied heavily upon Hanrahan v.
Hampton, 446 U.S. 754, 100 S.Ct. 1987, 64 L.Ed.2d 670 (1980) (per
curiam). In Hanrahan the civil rights plaintiffs claimed that
they were prevailing parties because the court of appeals, inter
alia, had reversed the district court's directed verdicts against
them. The Court, in denying fees, found that Congress intended to
permit the interim award of attorneys' fees under 42 U.S.C. § 1988
"only when a party had prevailed on the merits of at least
some of his claims." Id. at 758, 100 S.Ct. at 1989. The Court
noted "[a]s a practical matter [plaintiffs] are in a position no
different from that they would have occupied if they had simply
defeated the defendants' motion for a directed verdict in the
The present case, however, differs markedly from Hanrahan for
three closely-related reasons. First, as a result of this court's
de facto reversal of the Secretary's decision plaintiff has
prevailed on the merits of his claim to the extent of making out
a prima facie entitlement to benefits that have survived an
assault by the Secretary in rebuttal. Second, this case is
bifurcated between administrative proceedings, where the
entitlement to benefits is properly determined, and the district
court, which has a review function. Because the court's role here
is much narrower than in Hanrahan and most other lawsuits, the
definition of prevailing party in this proceeding must be
adjusted accordingly. Third, "as a practical matter" plaintiff is
in a markedly better position than before this court reversed and
remanded the case. His chances of recovering benefits have
increased from zero to, in the sense of statistical experience,
over fifty per cent.
The claimant who has established a prima facie case of
disability at the administrative
level comes to the federal court in order to prove that the
Secretary has failed to meet its burden of producing evidence
rebutting the prima facie case. In some circumstances the record
is so clear and the plaintiff's case is so compelling that an
outright reversal of the Secretary's denial of benefits is
warranted. There is no question that such claimants are
Courts, however, often remand cases where the entitlement to
benefits is clear but certain housekeeping matters remain. See
e.g. McKenzie v. Heckler, 589 F. Supp. 1152, 1162 (N.D.Ill. 1984).
More importantly, courts tend to avoid outright reversals in
recognition of their limited role in the disability determination
process. The admonition that courts are not to try disability
cases de novo, McNeil v. Califano, 614 F.2d 142, 145 (7th Cir.
1980), and the substantial evidence standard of review, Whitney
v. Schweiker, 695 F.2d 784, 786 (7th Cir. 1982), strongly
influence courts to show deference to the Secretary by remanding
rather than reversing.*fn5 Moreover, where the ALJ has failed to
develop the record the district court will hesitate to reverse
outright. See Gross v. Schweiker, 563 F. Supp. 260 (N.D.Ind.
The cramped view of the EAJA adopted by some courts may alter
the balance of decisionmaking between the Secretary and the
federal courts. District courts are sensitive to the difficulties
of representing often indigent clients over protracted periods.
They know of the statutory cap on attorneys' fees under section
206 of the Social Security Act, 42 U.S.C. § 406(b)(1), and that
such awards must come from back benefits awarded the client.
District courts are also aware that the majority of claimants
ultimately prevail on remand. Consequently, if district courts
are unable to award attorneys' fees when plaintiffs obtain a
remand on substantive grounds, they may be more likely to perform
an extended analysis of the evidence and reverse more decisions
Remands on substantive grounds often and outright reversals
always rest upon a rejection of the Secretary's rebuttal to a
prima facie entitlement to benefits. That is decisive. The EAJA
does not require a party to succeed on all elements of his claim
after a full trial in order to be a prevailing party. The proper
approach is a flexible one tailored to the type of proceeding in
federal court. In the context of Social Security disability,
invalidation of the Secretary's rebuttal position is not just a
limited tactical gain; rather, it is the very prerequisite to
receiving benefits. The opportunity to refute the Secretary's
rebuttal is what brings the claimant to federal court in the
first place. There is thus no compelling reason for
distinguishing remands on substantive grounds from outright
reversals for purposes of the EAJA.
The approach adopted here is also consistent with the purposes
of Congress in enacting the EAJA. See generally Berman v.
Schweiker, 713 F.2d 1290, 1295-96 (7th Cir. 1983). Congress
for many citizens, the cost of securing vindication
of their rights and the inability to recover
attorneys' 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. In these cases, it is more practical to
endure an injustice than to contest it.
H.R.Rep. No. 1418, 96th Cong., 2d Sess., 9, reprinted in 1980
U.S.Code Cong. & Ad. News, 4984, 4988.
The only forum where a disappointed claimant can challenge the
Secretary's decision is federal court. The prospects of success
for a claimant who can secure representation is relatively high,
both in federal court and thereafter on remand. A cramped
interpretation of the EAJA will make disability appeals less
attorneys by doubling the risk that such work will go
uncompensated. Even in cases where the claimant ultimately
prevails on remand, a narrow interpretation of the EAJA will
force attorneys who represent claimants in federal courts to go
uncompensated for many months until the remand proceedings are
In contrast, the approach adopted here ensures that disability
claimants will not be foreclosed from challenging the denial of
benefits because of their impecunity. By requiring claimants to
refute the Secretary's rebuttal position before fees are
recoverable, this approach is also consistent with the EAJA's
requirement of success on a significant issue.
By ensuring that persons adversely affected by a government
position that is not substantially justified can pursue
litigation, the EAJA also has an important public policy
The [EAJA] rests on the premise that a party who
chooses to litigate an issue against the government
is not only representing his or her own vested
interest but is also refining and formulating public
policy. An adjudication or civil action provides a
concrete, adversarial test of government regulation
and thereby ensures legitimacy and fairness of the
law. An adjudication, for example, may show that the
policy or factual foundation underlying an agency
role is erroneous or inaccurate, or it may provide a
vehicle for developing or announcing more precise
H.R.Rep. at 10, 1980 U.S.Code Cong. & Ad.News, 4988-4989.
This second purpose of the EAJA is especially operative in the
Social Security disability context. The explosion of disability
litigation in recent years,*fn6 the high rate at which the federal
courts have overturned the Secretary's determinations,*fn7 and the
institutional struggle between the federal courts and the
Secretary over the issue of "non-compliance"*fn8 reflect the useful
disciplinary function of legal challenges to the Secretary's
decisions and procedures by often impoverished, ill and
politically unorganized disability claimants. A cramped view of
the EAJA would slow this process. "Plaintiff should not be forced
to bear the costs necessarily incurred to secure [his] right to
have the administrative law process operate in its intended
fashion." Knox v. Schweiker, 567 F. Supp. 959, 964 (D.Del. 1983).
This court holds that plaintiffs who have refuted the
Secretary's rebuttal position and thus reestablished their prima
facie entitlement to benefits are prevailing parties even if
their cases are remanded to the Secretary rather than reversed
outright. Plaintiff is thus a prevailing party under the EAJA.*fn9
A prevailing party is entitled to attorneys' fees unless the
show that its litigation position was "substantially justified".
28 U.S.C. § 2412(d)(1)(A). This means that the Secretary's
position must have had a reasonable basis both in law and in
fact. McDonald v. Schweiker, 726 F.2d 311, 316 (7th Cir. 1983).
The government's position is not considered unreasonable solely
because it lost.
This case was not a difficult one because the ALJ so obviously
failed to consider the potentially disabling effect of the pain
suffered by claimant. The ALJ also overly relied on plaintiff's
failure to sit and squirm at the administrative hearing. The
government's point that plaintiff's pain is not disabling is well
taken. The fact remains, however, that the plaintiff was denied
benefits without sufficient consideration of the effects of his
pain. If the ALJ had properly evaluated plaintiff's pain, the
government's position in the litigation before this court might
have been substantially justified; but because the ALJ so clearly
failed to treat the issue of pain, the government's pursuit of
litigation was not substantially justified. Plaintiff has moved
for $2,113.25 in fees and costs. The government has not objected
to this amount. There are no special circumstances that would
make an award of fees unjust.
Plaintiff's petition for attorneys' fees and costs under the
Equal Access to Justice Act is granted.