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BURR v. BOWEN

January 16, 1992

GLENDINE BURR, Plaintiff, -vs- OTIS R. BOWEN, M.D., Secretary of Health and Human Services, Defendant.


The opinion of the court was delivered by: GEORGE W. LINDBERG

 Claimant, Glendine Burr, petitions this court to enter a final order, adopting a decision of the Secretary of the Department of Health and Human Services (Secretary), rendered following a remand of this cause by this court to the Secretary. Claimant also petitions for attorney fees pursuant to the Equal Access to Justice Act (EAJA), 28 U.S.C.A. § 2412 (West Supp. 1991). Claimant's petition for entry of a final order is granted, and her petition for attorney fees is granted in part and denied in part.

 FACTS:

 On June 20, 1985, claimant filed an application for supplemental security income, alleging inability to work due to seizures and pain in her right leg and ankle. The claim was denied by a hearing decision dated March 19, 1987. Claimant filed a request for review with the Appeals Council. On July 21, 1987, the Appeals Council affirmed the hearing decision. This was the final decision of the Secretary.

 On December 17, 1987, claimant filed a complaint with this court seeking review of the Secretary's final decision that claimant was not entitled to disability benefits. A Magistrate Judge found that the record was devoid of substantial evidence to support either a finding of disability or nondisability because of the Secretary's admitted failure to follow his own regulations and because of his failure to fully and fairly develop the administrative record.

 Claimant now petitions the court to enter a final order adopting the Secretary's decision and for attorney fees pursuant to the EAJA.

 DISCUSSION:

 A. Jurisdiction

 The first issue that the court must resolve is whether or not it has jurisdiction to enter final judgment.

 In order to resolve this issue the court must determine whether it has already entered a final judgment and what type of remand it contemplated in its July 23, 1990, order. This is due to the interplay of the two statutes that control the issue raised.

 The first of these statutes is the EAJA, which requires a prevailing party, seeking an award of attorney fees, to submit an application for fees to the court within thirty days of final judgment in the action. 28 U.S.C.A. § 2412 (West 1991 Supp.). This requirement is jurisdictional. See Jabaay v. Sullivan, 920 F.2d 472, 476 (7th Cir. 1990). Thus, if this court entered final judgment on July 23, 1990, then claimant's petition for fees is untimely. If the court has not yet entered final judgment, then claimant has thirty days from the date of final judgment to submit a fee application.

 The second of these statutes is 42 U.S.C.A. § 405(g) (West 1983) (§ 405(g)). Section 405(g) authorizes two types of remands. Sentence four of § 405(g) provides that the court shall have power to enter a judgment affirming, modifying, or reversing the decision of the Secretary, with or without remanding the cause for a rehearing (sentence four). In a sentence four remand, by either affirming, modifying, or reversing the Secretary's decision, the court substantively rules on the correctness of the administrative determination. Also, the court does not manifest any intent to retain jurisdiction, but rather remands to the agency for all further proceedings. Melkonyan v. Sullivan, 115 L. Ed. 2d 78, U.S. , 111 S. Ct. 2157, 2164 (1991). Thus, a sentence four remand is a remand following a final judgment. For this reason, in sentence four cases the filing period for attorney fees under the EAJA begins to run after the court enters final judgment ("affirming, modifying, or reversing") and the appeal period has run, without consideration of post-remand proceedings over which the court does not retain jurisdiction. See Melkonyan, 111 S. Ct. at 2165.

 Sentence six of § 405(g) provides for another type of remand.

 Sentence six provides that 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 that 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[.]

 42 U.S.C. § 405(g) (sentence six). "In a sentence six remand the court remands because new evidence has come to light that was not available to the claimant at the time of the administrative proceeding and that evidence might have changed the outcome of the prior proceeding." Melkonyan, 111 S. Ct. at 2163. In a sentence six remand the court manifests an intent to retain jurisdiction. Melkonyan, 111 S. Ct. at 2164. A sentence six remand is a remand without entry of a final judgment, and, therefore, in sentence six cases the filing period for attorney fees under the EAJA does not begin until after the post-remand proceedings have been completed, the Secretary has returned to court, the court has entered a final judgment, and the appeal period has run. See Melkonyan, 111 S. Ct. at 2165.

 The parties disagree over what kind of remand was ordered and, consequently, over whether there was a final judgment. The Secretary argues that this court remanded this cause pursuant to sentence four and that there was a final judgment. Claimant argues that the remand was ordered pursuant to sentence six and, therefore, there was no final judgment.

 After reviewing the record in light of the arguments of the parties, the court finds that the cause was remanded pursuant to sentence six. The court notes, however, that the remand pursuant to sentence six may have been erroneous.

 1. SENTENCE FOUR

 The court did not remand pursuant to sentence four. The Magistrate Judge's recommendation noted that neither side presented substantial evidence to support their respective positions. The Magistrate Judge stated that no sound determination of disability or non-disability could be made on the record and that both sides should be permitted to introduce evidence on all issues.

 "The fourth sentence does not require the district court to choose between entering a final judgment and remanding; to the contrary, it specifically provides that a district court may enter judgment 'with or without remanding the cause for a rehearing.'" Sullivan v. Finkelstein, U.S. , 110 S. Ct. 2658, 2666, 110 L. Ed. 2d 563 (1990). The court did not substantively rule on the correctness of the Secretary's determination. The court specifically retained jurisdiction pending final resolution of the action by requiring the Secretary to report his findings and conclusions to the court within 120 days. Thus, there was no final judgment, and no sentence four remand.

 The Secretary cites to Finkelstein to support his position. While some language in Finkelstein supports the Secretary's position, Finkelstein, overall, actually supports claimant's position. In Finkelstein the court resolved the issue of whether the remand order issued by the district court was immediately appealable. Finkelstein, 110 S. Ct. at 2663. In Finkelstein the District Court entered a judgment reversing the decision of the Secretary and remanding the cause for a rehearing. The United States Supreme Court ruled that the District Court's remand order was unquestionably a "judgment," because it terminated the civil action challenging the Secretary's final determination that respondent was not entitled to benefits and set aside that determination. See Sullivan, 110 S. Ct. at 2664.

 By contrast in the instant case the court's order did not terminate the civil action challenging the Secretary's final determination. The court expressly declined to rule substantively on the Secretary's determination and required the Secretary to return to the court.

 The United States Supreme Court's decision in Melkonyan also supports the conclusion that the remand at bar was not a sentence four remand after a final judgment. The Melkonyan court stated:

 The parties agree that the remand order in this case was not entered pursuant to sentence four, as the District Court did not affirm, modify, or reverse the Secretary's decision. We concur. The District Court did not make any substantive ruling; it merely returned the case to the ...


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