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BUTTS v. BOWEN

October 4, 1991

JAMES BUTTS, Plaintiff,
v.
OTIS R. BOWEN, Secretary of Health and Human Services, Defendant



The opinion of the court was delivered by: HART

 WILLIAM T. HART, UNITED STATES DISTRICT JUDGE

 Plaintiff James Butts is a disabled worker entitled to social security disability benefits effective January 1, 1980. Although disabled more than a decade ago, it was not until June 21, 1991 that defendant Secretary of Health and Human Services finally determined that Butts was entitled to disability benefits beginning in 1980. This award of benefits was based on an application for benefits submitted nearly a decade ago on April 8, 1982. Now pending before the court is plaintiff's petition for attorney's fees under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412. Defendant opposes the petition on three grounds, one of which is timeliness.

 The earlier proceedings in this case need not be detailed. As of May 1988, when plaintiff filed his complaint in federal court, the Secretary had determined that plaintiff was disabled as of September 29, 1984. On review by this court, it was held that a remand for further proceedings was required. As stated in this court's March 31, 1989 memorandum opinion:

 
Both the ALJ's failure to fully take into consideration the combined effect of plaintiff's impairments and his failure to properly apply SSR 83-20 by not conferring with a medical advisor in making the necessary inferences in selecting the onset date are independently sufficient grounds for remand. This case will be remanded to the Secretary for a redetermination of the onset date of plaintiff's disability in accordance with SSR 83-20, taking into consideration the combined effect of all impairments.

 March 31, 1989 Order at 12. The following order was entered which was incorporated on a judgment order form entered on April 3, 1989.

 
Pursuant to Memorandum Opinion and Order, IT IS ORDERED that plaintiff's motion for summary judgment is granted in part and denied in part. Defendant's motion for summary judgment is denied. The Clerk of the Court is directed to enter a judgment in favor of plaintiff and against defendant vacating the decision of the Secretary and remanding this case to the Secretary for further proceedings consistent with this opinion.

 On remand, a new hearing was held and the Administrative Law Judge ("ALJ") issued a decision dated December 29, 1989 in which it was determined that the onset date of plaintiff's disability was January 1, 1982. Plaintiff sought review before the Appeals Council. Plaintiff also filed a petition for EAJA fees with this court. Defendant opposed consideration of the fee petition on the ground that it was premature. In an order dated July 27, 1990, the petition was denied without prejudice as premature. Although only plaintiff had sought review, it was still possible for the Appeals Council to determine an onset date later than the date found by the ALJ. Therefore, as of July 1990, it was not yet determined that plaintiff was a prevailing party for purposes of the EAJA. July 27, 1990 Order at 2-3. On June 21, 1991, the Appeals Council issued a decision finding that plaintiff had been disabled since January 1, 1980. On July 19, 1991, plaintiff filed his present petition for attorney's fees.

 Citing Melkonyan v. Sullivan, 115 L. Ed. 2d 78, 111 S. Ct. 2157 (1991), the Secretary now argues that plaintiff's fee petition is untimely. The Secretary now argues that plaintiff's fee petition had to be filed within 30 days after the March 31, 1989 remand order was no longer appealable. *fn1" In other words, defendant now argues that the petition was due by July 3, 1989, whereas in July 1990 he argued that the petition was premature. The basis for this inconsistency is defendant's view that Melkonyan overruled existing precedents.

 Whether plaintiff's petition is timely depends on the construction of two statutes. The EAJA provides that 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, . . . ." 28 U.S.C. § 2412(d)(1)(B). Under the EAJA, "'final judgment' means a judgment that is final and not appealable, and includes an order of settlement." Id. § 2412(d)(2)(G). The Social Security Act provides for judicial review of social security disability determinations. 42 U.S.C. § 405(g). The fourth sentence of § 405(g) provides: "The court shall have power to enter, upon the pleadings and transcript of the record a judgment affirming, modifying, or reversing the decision of the Secretary, with or without remanding the cause for a rehearing." The sixth sentence of that statute provides:

 
The court may, on motion of the Secretary made for good cause shown before he files his answer, remand the case to the Secretary for further action by the Secretary, and it may at any time order additional evidence to be taken before the Secretary, but only upon a showing that there is new evidence which is material and that there is good cause for the failure to incorporate such evidence into the record in a prior proceeding; and the Secretary shall, after the case is remanded, and after hearing such additional evidence if so ordered, modify or affirm his findings of fact or his decision, or both, and shall file with the court any such additional and modified findings of fact and decision, and a transcript of the additional record and testimony upon which his action in modifying or affirming was based.

 In Melkonyan, Melkonyan was denied disability benefits and sought judicial review of that denial. While that case was pending, Melkonyan pursued a second application for disability benefits on which he ultimately succeeded, but not beginning at as early a date as he had sought in the first application. With cross-motions for summary judgment pending, the Secretary moved for a remand to the Appeals Council for consideration of the new evidence submitted with the second application. Melkonyan initially opposed that motion. Three months later, however, citing failing health and financial needs, Melkonyan moved the district court to either issue a decision on the summary judgment motions or remand the cause to the Secretary. The district court then entered the following order: "Defendant's motion to remand, concurred in by plaintiff, is granted. The matter is remanded to the Secretary for all further proceedings." One month after the remand, the Appeals Council found Melkonyan was entitled to benefits effective the date of his first application. Melkonyan did not file his petition for EAJA fees for another year thereafter. See Melkonyan, 111 S. Ct. at 2160.

 The Supreme Court held that "final judgment in the action," as used in the EAJA, only means court judgments; it does not include decisions in administrative proceedings. *fn2" Id. at 2161-62. Therefore, an EAJA petition must be filed within 30 days of a court judgment; the thirty days are not measured by the date of an administrative decision such as that of the Appeals Council. On the facts before the Supreme Court in Melkonyan, it was clear that the remand order was not a judgment. Id. at 2162-63. The facts, however, were insufficient to determine if the order was a remand under the sixth sentence of § 405(g) or a voluntary dismissal under Fed. R. Civ. P. 41(a). See Melkonyan, 111 S. Ct. at 2165. The Court apparently determined that the remand could not be considered one under the fourth sentence of § 405(g). See id. If a voluntary dismissal, then the civil action ended at that point and Melkonyan could not have been a prevailing party for purposes of the EAJA. Id. If a sixth sentence remand, though, then the case should have continued in the district court in accordance with that provision and a judgment could still be entered from which Melkonyan still could have filed a timely petition. See id. at 2165-66. Although dictum (since the case did not involve a fourth sentence remand), the Court authoritatively stated: "In sentence four cases, the filing period begins after the final judgment ("affirming, modifying, or reversing") is entered by the court and the appeal period has run, so that the judgment is no longer appealable." Id. at 2165.

 Two terms earlier, in Sullivan v. Hudson, 490 U.S. 877, 109 S. Ct. 2248, 2257, 104 L. Ed. 2d 941 (1989), the Supreme Court had held that administrative proceedings following a remand could be considered part of the "civil action" for purposes of awarding EAJA fees. Hudson also holds that a claimant must prevail on remand in order to be considered a prevailing party for purposes of the EAJA; simply obtaining a remand does not make ...


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