"Where a court's remand to the agency for further administrative proceedings does not necessarily dictate the receipt of benefits, the claimant will not normally attain 'prevailing party' status within the meaning of § 2412(d)(1)(A) until after the result of the administrative proceedings is known." Id. at 886.
"The Court's holding in Melkonyan suggests that a different rule must apply when a district court orders a sentence four remand." Spurlock v. Sullivan, 783 F. Supp. 474, 479 (N.D.Cal. 1992). In Spurlock, the court explained that in the case of a sentence six remand, the remand itself does not constitute a final judgment because the Secretary must return to the district court, upon completion of post-remand proceedings, for entry of final judgment. Id. at 479. "But where, as here, a plaintiff succeeds in obtaining a sentence four remand, the district court enters judgment only on the matter of remand. There will not be a judgment by the district court following the Secretary's determination on the merits, and there is no opportunity for the district court to retain jurisdiction . . . ." Spurlock at 479.
The Spurlock court, having established that sentence four remands terminate the civil action before a district court, thereby terminating jurisdiction over the matter, concluded as follows:
This leads to the obvious conclusion that where a plaintiff succeeds in obtaining a sentence four remand, the plaintiff must be considered eligible for EAJA attorney fees as a 'prevailing party' even though there is not yet a final determination on the merits of the plaintiff's SSI application. This rule advances the purpose implicit in the EAJA fee provisions . . . . This Congressional purpose is frustrated if parties who prevail on a sentence four remand are unable to obtain EAJA fees because no final administrative determination is reached before the thirty day filing period expires.
Id. at 479-480.
In Melkonyan, the Supreme Court addressed the question of when a "final judgment" is entered, given a sentence four remand by a district court. The Court held:
We conclude that . . . Congress' use of 'judgment' in 28 U.S.C. § 2412 refers to judgments entered by a court of law, and does not encompass decisions rendered by an administrative agency. Accordingly, we hold that a 'final judgment' for purposes of 28 U.S.C. § 2412(d)(1)(B) means a judgment rendered by a court that terminates the civil action for which EAJA fees may be received.
Melkonyan at 2162 (emphasis in original).
This Court finds, in light of the above, that Plaintiff is a prevailing party for purposes of the EAJA. Upon Plaintiff's request for review by this Court of Defendant Secretary's decision, this Court reversed the Secretary's decision and remanded the case. The Court's sentence four remand order resulted in Plaintiff attaining the status of "prevailing party," as defined by the EAJA and as clarified by the judicial opinions outlined above.
2. The Position of the United States Was Not Substantially Justified.
In Pierce v. Underwood, 487 U.S. 552, 101 L. Ed. 2d 490, 108 S. Ct. 2541 (1988), the Supreme Court held that the term "substantiallY justified," for the purpose of district court review of motions for attorney fees pursuant to EAJA, should be interpreted as follows:
We are of the view, therefore, that as between the two commonly used connotations of the word 'substantially,' the one most naturally conveyed by the phrase before us here [in the EAJA] is not 'justified to a high degree,' but rather 'justified in substance or in the main' - that is, justified to a degree that could satisfy a reasonable person.
Id. at 565.
The Ninth Circuit has also defined a standard for review by district courts when considering EAJA attorney fee motions. In Cardwell v. Kurtz, 765 F.2d 776 (9th Cir. 1985), the Court held:
The government's position is 'substantially justified' within the meaning of the EAJA if it 'has a reasonable basis both in law and fact.' Timms v. United States, 742 F.2d 489, 492 (9th Cir. 1984). We consider both 'the underlying agency action and the legal position of the United States during litigation' in analyzing the substantial justification issue. Id.. . . . The government bears the burden of proving its position was substantially justified. Id. at 492.
Cardwell at 781. A more recent Ninth Circuit holding states: "In making a determination of substantial justification, the court must consider the reasonableness of both 'the underlying government action at issue' and the position asserted by the government 'in defending the validity of the action in court.' [citations omitted]" Bay Area Peace Navy v. U.S., 914 F.2d 1224, 1227 (9th Cir. 1990).
The Court notes that Defendant Secretary fails to address the question of substantial justification. Defendant states only that because this Court granted Defendant's motion for summary judgment on August 6, 1991, then the Secretary's position with respect to affirming the ALJ's ruling was substantially justified. Def.['s] Opp'n to Pl.['s] Mot. for EAJA Att'y Fees at 3.
This argument fails to recognize this Court's subsequent order of May 27, 1992, wherein the Court vacated the August 6, 1991 order and remanded the case for further proceedings. In particular, the Court stated clearly that the basis for the order to vacate and remand was the ALJ's need to bring the administrative proceedings into conformity with a recent decision by the Ninth Circuit. The Court's order stated:
The Secretary contends that the ALJ made the requisite specific findings discrediting Plaintiff's 'subjective' complaints of pain. The record indicates otherwise. The ALJ's findings do not provide any reason for discrediting Plaintiff's pain testimony . . . . The record indicates that Plaintiff's testimony may have been arbitrarily discredited. When the ALJ has not adequately explained his or her evaluation and made the requisite specific findings, as in this case, the Court has discretion to remand for further proceedings. [citation omitted]
Afanador v. Sullivan, No. C-90-20346-JW, slip op. at 3 (N.D.Cal. May 27, 1992).
The legal standard applied by the ALJ was improper, as was subsequently determined by the Ninth Circuit's decision in Bunnell v. Sullivan, 947 F.2d 341 (9th Cir. 1991)(en banc). The Defendant Secretary's affirmation of the ALJ's ruling, and the Secretary's argument to the Court on review, were necessarily premised on an improper legal standard as well. Because "both 'the underlying agency action and the legal position of the United States during litigation'" were thus tainted by an improper legal basis, the Court finds that the Defendant Secretary's position was not substantially justified. Cardwell at 781.
3. Plaintiff's Application for Fees is Timely
As noted above, the EAJA requires that an application for attorney fees be filed "within thirty days of final judgment in the action . . . ." 28 U.S.C. § 2412. "The requirement that the fee application be filed within 30 days of 'final judgment in the action' plainly refers back to the 'civil action . . . in any court' in (d)(1)(A). The plain language makes clear that a 'final judgment' under § 2412 can only be the judgment of a court of law." Melkonyan at 2161.
The Court's remand order was issued on May 27, 1992. Plaintiff filed the instant motion for attorney fees on June 10, 1992. Accordingly, the motion was filed within 30 days of a final judgment, and the motion is timely.
4. The Amount of Fees Requested is Reasonable
The EAJA defines "reasonable" fees at § 2412(C)(2)(A), cited in a footnote above. Plaintiff's motion seeks a cost of living adjustment, as permitted by the EAJA. "[Applicants for fees] are entitled to an adjustment of the $ 75 cap to reflect inflation between October 1981 and the present as measured by the Consumer Price Index for All Urban Consumers (CPI-U)." Animal Lovers Volunteer Ass'n, Inc. v. Carlucci, 867 F.2d 1224, 1227 (9th Cir. 1989). The Ninth Circuit's formula used to calculate the adjustment for cost of living increases is found in Ramon-Sepulveda v. I.N.S., 863 F.2d 1458, 1463, n.4 (9th Cir. 1988).
Applying the Ramon-Sepulveda formula, the Court finds that Plaintiff is entitled to an hourly rate of $ 107.83 for the 22.3 hours of work performed by Plaintiff's attorney.
The Court also finds that Plaintiff is entitled to an hourly rate of $ 50 for the 9.5 hours of work performed by Plaintiff's law clerk. In total, the Court finds Plaintiff is entitled to $ 2,879.61 in attorney fees.
The Court finds that Plaintiff is a prevailing party under the EAJA; that the position of the United States was not substantially justified; that Plaintiff's application for fees was timely filed; and that the amount of fees requested is reasonable. Accordingly, Plaintiff's motion for attorney fees, pursuant to 28 U.S.C. § 2412(d) is GRANTED.
IT IS SO ORDERED.
HONORABLE JAMES WARE
United States District Judge