The opinion of the court was delivered by: CHARLES RONALD NORGLE, SR.
Before the court is plaintiff Jo Ann DeFrancesco's motion for attorney's fees.
For the reasons that follow, the motion is granted and plaintiff is awarded $ 26,421.60 in fees, $ 2,106 in expenses, and $ 120 in costs.
This case involves lengthy administrative and court proceedings over plaintiff's claim for social security disability benefits for which she now seeks attorney's fees under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412. Plaintiff's husband, Donald P. DeFrancesco ("DeFrancesco"), a former truck driver who suffered from diabetes and heart disease, applied for Social Security disability benefits on October 16, 1985, claiming he was disabled as of February 21, 1984. Defrancesco's claim was first rejected on November 13, 1986 by an administrative law judge ("ALJ"), who found that DeFrancesco retained the ability to do light work. DeFrancesco then lost appeals to the Secretary of Health and Human Services (the "Secretary") and a district court. DeFrancesco v. Bowen, 679 F. Supp. 785 (N.D. Ill. 1988) (J. Bua). Unlike his prior two appeals, Defrancesco's third appeal proved successful; the Seventh Circuit reversed the ALJ's decision and remanded the case for a new hearing. DeFrancesco v. Bowen, 867 F.2d 1040 (7th Cir. 1989).
On remand, an ALJ again rejected DeFrancesco's claim, but this decision was reversed by the Secretary's Appeals Council, which ruled on August 22, 1991, that DeFrancesco had been disabled from his fiftieth birthday, March 1, 1986, until his death on December 1, 1988. Plaintiff then sought reconsideration, upon which the Appeals Council, on March 10, 1992, affirmed its prior ruling while including additional factual findings. Plaintiff and the Secretary subsequently sought review of the Appeals Council's ruling, filing with this court cross motions for summary judgment. Plaintiff's motion requested reversal of the Appeals Council's decision and asked this court to find that DeFrancesco was entitled to benefits beginning in February 1984 -- not March 13, 1986 -- until his death. The Secretary's motion sought affirmance of the Appeals Council's March 10 decision. This court found that the Secretary failed to demonstrate that DeFrancesco was not disabled at his claimed February 1984 onset date and, accordingly, reversed the Secretary's March 10 ruling and entered summary judgment in favor of plaintiff.
On September 12, 1991, while the reconsideration motion was pending in the Appeals Council, plaintiff filed a motion before Judge Nicholas J. Bua for attorney's fees as a prevailing plaintiff under the Equal Access to Justice Act, 28 J.S.C. § 2412 ("EAJA"). Plaintiff sought a total of $ 38,798.07 -- $ 36,572.07 in fees, $ 2,106 in expenses, and $ 120 in costs -- but offered to settle the total claim for $ 32,200.35. Additionally, Plaintiff filed a motion with the district court to retain jurisdiction for purposes of awarding the EAJA fees. By an order dated October 25, 1991, Judge Bua agreed to retain jurisdiction pending the outcome of the reconsideration motion. On November 14, 1991, after Judge Bua's retirement from the bench, the case was transferred to this court. Plaintiff subsequently filed the instant amended motion for EAJA fees on December 6, 1991, seeking an additional $ 6,959.17 in attorneys' fees, for a total award of $ 45,757.25.
The Secretary opposes Plaintiff's motion, arguing that under the Supreme Court's decision in Melkonyan v. Sullivan, 115 L. Ed. 2d 78, 111 S. Ct. 2157 (1991), the time for petitioning for fees under the EAJA has long since expired and that the Secretary's position in this case was substantially justified. In the alternative, the Secretary argues that the amount of fees requested is unreasonable and should be reduced.
In order to invoke the subject matter jurisdiction of the district court for attorney fees under the EAJA, the party seeking fees must file its application "within 30 days of the final judgment in the action . . . ." 28 U.S.C. 2412(d)(1)(B). Citing Melkonyan v. Sullivan, 115 L. Ed. 2d 78, 111 S. Ct. 2157 (1991), the Secretary argues that the appellate court's decision of February 8, 1989, remanding Plaintiff's claim to the Secretary for further proceedings, was the "final judgment" for § 2412(d)(1)(B) purposes and that Plaintiff's EAJA fee motion, having been filed September 12, 1991, is untimely. Whether the judgment remanding a case to the Secretary is a "final judgment" depends upon the nature of the remand pursuant to 42 U.S.C. § 405(9). As the Supreme Court held in Melkonyan, there are only two types of remands permissible under § 405(g):
Under sentence four, a district court may remand in conjunction with a judgment affirming, modifying, or reversing the Secretary's decision. Under sentence six, the district court may remand in light of additional evidence without making any substantive ruling as to the correctness of the Secretary's decision, but only if the claimant shows good cause for failing to present the evidence earlier. Congress' explicit delineation in § 405(g) regarding the circumstances under which remands are authorized leads us to conclude that it intended to limit the district court's authority to enter remand orders to these two types.
Melkonyan, 111 S. Ct. at 2164 (footnote omitted). The Melkonyan Court interpreted § 405(g) to mean that a remand to the Secretary under sentence four of 42 U.S.C. § 405(g) becomes a final judgment for EAJA purposes when the appeal period has run, but a remand under sentence six cannot be a final judgment. Id. at 2165. Melkonyan overruled Seventh Circuit precedent which had provided a plaintiff with "prevailing party" status -- a prerequisite to an EAJA award -- only after completion of successful post-remand proceedings before the Secretary. Singleton v. Bowen, 841 F.2d 710, 711 (7th Cir. 1990). Melkonyan also overruled the Seventh Circuit holding that an administrative body, such as the Secretary's Appeals Council, could render a "final judgment" triggering the EAJA filing period. Jabaay v. Sullivan, 920 F.2d 472, 475 (7th Cir. 1990), vacated, 946 F.2d 897 (7th Cir. 1991); see Cummings v. Sullivan, 950 F.2d 492, 495 n. 4 (7th Cir. 1991) (noting effect of Melkonyan on Jabaay).
The Secretary argues that the appellate court's remand was a "sentence four" remand, which authorizes the reviewing court to remand the cause to the Secretary in conjunction with a judgment "affirming, modifying, or reversing" the decision of the Secretary. Although the 7th Circuit did not identify the sentence of § 405(g) under which it was remanding the case to the Secretary, the remand could only arise under sentence four. The remand was not for the purpose of taking additional, newly discovered evidence, nor was it based upon a showing of good cause. The appellate court simply held that the administrative record did not support the Secretary's denial of Plaintiff's claim and sent the case back for further proceedings. Since the remand was not a "sentence six" remand, the Secretary correctly argues that it falls under the fourth sentence, one made in conjunction with a judgment "affirming, modifying, or reversing" the decision of the Secretary.
Having established that the appellate court's 1989 order was a "sentence four" remand, the Secretary argues that, pursuant to Melkonyan, Plaintiff must have filed her application within 30 days after the remand order became unappealable in order to recover EAJA attorney's fees. Although many district courts have reiterated the Secretary's position, every appellate court to confront the issue has rejected it, albeit on widely disparate grounds.
See Hafner v. Sullivan, No. 91-1634, 1992 U.S. App. WL 188996 (8th Cir. Aug. 11, 1992) (district court retained jurisdiction to enter dispositive "sentence four" judgment after Secretary's reevaluation of application); Gutierrez v. Sullivan, 953 F.2d 579, 583-584 (10th Cir. 1992) (district court retained jurisdiction despite "sentence four" remand); Luna v. Department of H.H.S., 948 F.2d 169 (5th Cir. 1991) (applies equitable tolling); Sargent v. Sullivan, 941 F.2d 1207 (4th Cir. 1991) (unpublished) (Melkonyan not retroactive). The obvious practical problem with the Secretary's position in the present case is that the appellate court's 1989 remand did not direct the award of benefits to plaintiff; the Secretary's position would require plaintiff to have filed an anticipatory ...