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January 28, 1992

LOUIS W. SULLIVAN, M.D., Secretary of Health and Human Services, Defendant.

The opinion of the court was delivered by: VAUGHN R. WALKER

 The Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d), authorizes an award of attorney fees to a prevailing party in certain civil litigation against the United States. This case requires the court to consider when an applicant for supplemental social security income benefits becomes a "prevailing party" in light of the Supreme Court's recent decision in Melkonyan v. Sullivan.

 This matter is before the court on defendant's motion for reconsideration of the court's August 29, 1991 order awarding attorney fees to plaintiff under the EAJA. The court received briefs from both parties on this matter, and ordered counsel to appear on November 15, 1991, to discuss the content of the court's order. The court has now heard arguments from counsel, and has also considered the briefs and other documents filed in this matter.

 For the reasons stated below, the court VACATES both the August 29 order awarding attorney fees and the stipulated order of remand entered July 22, 1991. Furthermore, upon review of the pleadings in this case and the record of the administrative proceeding, the court, pursuant to 42 U.S.C. § 405(g) sentence four, REVERSES the decision of the Secretary and REMANDS the matter to the Secretary for a supplemental hearing and vocational expert testimony.


 In October 1988, one day after his release from the California State Department of Corrections, plaintiff James Spurlock applied for supplemental security income ("SSI") benefits. Spurlock has previously been awarded SSI benefits in 1974, but these benefits were terminated when he entered prison.

 Spurlock's application was denied, and, in May 1989, Spurlock sought a hearing before an administrative law judge ("ALJ"). That hearing was held on March 13, 1990. Spurlock appeared without representation. At the hearing, the only evidence presented to the ALJ was testimony from Spurlock himself and Dr. Daniel Beittel, a psychiatrist. Dr. Beittel reviewed the medical evidence in Spurlock's case. Spurlock declined an opportunity to cross-examine Dr. Beittel. In July 1990, the ALJ denied Spurlock's application.

 In March 1991, Spurlock filed suit in this court seeking relief from a final decision of the Secretary of the Department of Health and Human Services denying Spurlock's application for disability benefits. The Secretary answered the complaint by denying that Spurlock was entitled to benefits and alleging that "the findings of fact of the Secretary are supported by substantial evidence and are conclusive." Answer at 2. In July 1991, after Spurlock had moved for summary judgment on the grounds that the ALJ's decision was not supported by substantial evidence, the parties stipulated that the action be remanded to the Secretary for further administrative proceedings, including a supplemental hearing and the taking of vocational expert testimony. The court entered a stipulated order of remand on July 22, 1991.

 Following the remand, Spurlock moved for an award of EAJA attorney fees. The court awarded attorney fees in the amount requested on August 29, 1991. Defendant then filed this motion to reconsider, on the grounds that Spurlock could not be a "prevailing party" as required by the EAJA for an award of attorney fees.

 Defendant's argument in support of the motion to reconsider is premised in part on the recent Supreme Court ruling in Melkonyan v. Sullivan, 115 L. Ed. 2d 78, U.S. , 111 S. Ct. 2157 (1991), that a district court may remand a claim for social security benefits only in accord with sentence four or sentence six of 42 U.S.C. § 405(g). Because the stipulated remand entered by the court on July 22 was not in accord with either of these two provisions of § 405(g), defendant argued that the "remand" ordered by the court could not be a "final judgment," but was instead a "voluntary dismissal" which could not create a "prevailing party" for purposes of the EAJA. Furthermore, under Ninth Circuit precedent predating Melkonyan, a party who wins from the district court merely a remand for further administrative proceedings cannot be a "prevailing party" entitled to EAJA attorney fees. Swenson v. Heckler, 801 F.2d 1079 (9th Cir. 1986).

 Following defendant's motion for reconsideration, the court, in an order to show cause, directed Spurlock to respond to defendant's arguments. Spurlock's timely-filed response argued that the parties had stipulated to a "remand," not a "voluntary dismissal," that after Melkonyan this remand must be under either sentence four or sentence six of 42 U.S.C. § 405(g), that it was not clear which type of remand was ordered by the court, and that if there were no basis in the July 22 order to choose between the two types of remands the July 22 order should be withdrawn and replaced with a more clear order of remand under the appropriate provision of 42 U.S.C. § 405(g). Spurlock further argued that the pre-Melkonyan Ninth Circuit precedent relied upon by defendant would defeat the ability of a party to receive EAJA attorney fees following any sentence four remand, and therefore makes no sense in light of Melkonyan.


 District courts, on motion and upon such terms as are just, may relieve parties from an order or final judgment on the grounds of mistake. Fed. R. Civ. P. 60(b)(1). The court has carefully considered the arguments by the parties and has studied the Supreme Court's unanimous opinion in Melkonyan v. Sullivan. The court determines that a remand order, even a remand stipulated by the parties, must comply with the instructions of the Supreme Court in Melkonyan. Because the July 22 stipulated order does not comply with Melkonyan, the court now VACATES the July 22 order. Of course, ...

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