The opinion of the court was delivered by: Moran, District Judge.
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 ...