The opinion of the court was delivered by: ROBERT F. PECKHAM
Plaintiff applies for an award of attorney's fees against the Secretary of Health and Human Services ("Secretary") pursuant to the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d)(1)(A).
In March, 1990, plaintiff filed his complaint pursuant to 42 U.S.C. § 405(g) for judicial review of the Secretary's decision that he did not become disabled until January 1989. In June, defendant answered the complaint, and in August the parties and this Court signed a Stipulation and Order of Remand, the effect of which was a remand of the case to the Secretary for expert medical opinion and expert vocational testimony if needed. The Secretary agreed in the stipulation that the hearing would be expedited. On remand, the administrative law judge issued his decision in November 1991, again finding that plaintiff did not become disabled until January 1989. Plaintiff filed exceptions to that decision, and on January 15, 1992, the Appeals Council issued its decision that plaintiff had been disabled since 1987, as plaintiff had originally alleged. This Court entered judgment in plaintiff's favor on February 26, 1992.
Plaintiff submitted his request for attorney's fees on February 28, 1992. Defendant opposes his request on several grounds. First, he asserts that the application is untimely. Second, he claims that the stipulation to remand constituted a voluntary dismissal under Fed. R. Civ. Proc. 41(a), and, as such, plaintiff can not claim "prevailing party" status as required to be eligible to apply for EAJA fees, thus, no fees should be awarded. Defendant further asserts that even if plaintiff has timely filed and is a "prevailing party" under the EAJA statute, the position of the government was substantially justified, thereby establishing under the EAJA statute that no fees should be awarded. Finally, defendant claims that even if the government's position is found not to be substantially justified, plaintiff's EAJA petition should be dismissed or reduced because he has unreasonably protracted litigation.
Plaintiff filed an application for benefits on March 15, 1979, which resulted in entitlement to a Period of Disability and Benefits effective November 10, 1976 and terminating June 1978. The termination was upheld on April 21, 1980 by agency decision, a decision for which the Appeals Council declined review. Plaintiff refiled applications for benefits in March, 1982, and was denied his application for a Period of Disability and Disability Insurance Benefits, from which no reconsideration was requested. His application for Supplemental Security Income was denied initially and upon reconsideration. His request for hearing was denied for failure to appear at a scheduled hearing. Plaintiff filed subsequent applications for a Period of Disability, Disability Insurance Benefits and Supplemental Security Income on March 7, 1986, all of which were denied initially and upon reconsideration. Plaintiff requested a hearing in April 1987 regarding the Supplemental Security Income claim. The request was dismissed, as was the request for review by the Appeals Council. The Period of Disability and Disability Insurance Benefits claim was denied initially, and, after reapplication for Supplemental Security Income in October 1987, the agency consolidated the claims and then denied them. Plaintiff requested a hearing on July 20, 1988. The SSA granted the claim for Supplemental Security Income with an onset date of disability established on January 9, 1989. The other two claims were denied. The Appeals Council denied the request for review of the decision, and plaintiff filed suit in this Court, which, upon stipulation by the parties, remanded the case pursuant to 42 U.S.C. § 405(g) on August 10, 1990 to the Secretary for further proceedings. A hearing was held wherein the ALJ found again that plaintiff's disability commenced on January 19, 1989 for Supplemental Security Income. He dismissed the other claims upon application of plaintiff. The Appeals Council vacated the ALJ's decision, finding that the onset of plaintiff's disability was September 1, 1987. This Court granted plaintiff's motion for entry of final judgment on February 26, 1992. Currently before the Court is plaintiff's application for attorney's fees pursuant to 28 U.S.C. § 2412(d)(1)(A).
I. Harmonizing 42 U.S.C. § 405(g) and The Equal Access to Justice Act, 28 U.S.C. § 2412
Plaintiff is applying for attorney's fees under the Equal Access to Justice Act, 28 U.S.C. § 2412(d)(1), which states, in relevant part:
§ 2412 (d)(1)(A) [A] court shall award to a prevailing party . . . fees and costs . . . incurred by that party in any civil action . . . including proceedings for judicial review of agency action, brought by or against the United States . . . unless the court finds that the position of the United States was substantially justified. . . .
(B) A party seeking an award of fees . . . shall within 30 days of final judgment in the action submit to the court an application for fees . . . which shows that the party is a prevailing party and is eligible to receive an award under this subsection. . . .
28 U.S.C. § 2512 (d)(1)(A),(B)(West 1991)(emphasis added). This statute requires that before the prevailing party applies for fees there must be a "final judgment" in the action; without such judgment any application for attorney's fees would be premature. The application must be made within thirty days from the time that the "final judgment" becomes a final, unappealable order, or the application will not be timely. Thus, this Court must determine when "final judgment" occurred in this case, and whether plaintiff applied for fees within the specified time after that judgment was no longer appealable.
The determination of when a judgment is final in this case requires the interpretation of 42 U.S.C. § 404(g), under which the parties in this case stipulated that the case be remanded, and pursuant to which this Court ordered the remand. The statute sets out two types of remands: (1) those termed a "sentence four" remand, in which the court enters a judgment affirming, modifying or reversing the decision of the Secretary, with or without remanding the case for a rehearing, and (2) those termed a "sentence six" remand in which the court, on the Secretary's motion and showing of good cause, remands the case to the Secretary for further action at the agency level to hear additional evidence which was previously unavailable, which may have, had it been available, influenced the Secretary's decision. In the case of a sentence six remand, the Secretary, after the proceedings are completed, returns to the court to file the additional findings, and the court enters judgment on those findings.
Three recent Supreme Court cases discuss the interaction between the EAJA and 42 U.S.C. § 405(g): Sullivan v. Hudson, 490 U.S. 877, 109 S. Ct. 2248, 104 L. Ed. 2d 941 (1989); Sullivan v. Finkelstein, 496 U.S. 617, 110 S. Ct. 2658, 110 L. Ed. 2d 563 (1990); and Melkonyan v. Sullivan, 111 S. Ct. 2157, 115 L. Ed. 2d 78 (1991).
Essential to the discussion in each of the above cases, as well as this Court's resolution of the instant case, is the relationship between the EAJA requirement that a prevailing party have attained a "final judgment", and the significance a remand under 42 U.S.C. § 405(g) is given in terms of the EAJA requirement. It is crucial to note that in order to qualify for attorney's fees under the EAJA, a prevailing plaintiff must apply for fees within 30 days after a final judgment has been entered and is no longer appealable. Unless a final judgment has been entered, any application for attorney's fees under the EAJA would be premature, and would have to be rejected. Thus, determining that a remand under § 405(g) constitutes a "final judgment" for EAJA purposes will also determine the time period in which the plaintiff must apply for fees.
In Sullivan v. Hudson, the Supreme Court addressed the issue whether a social security claimant is entitled to attorney's fees under the EAJA for representation provided after remand at the administrative proceedings. Hudson, 490 U.S. at 879. The Court determined that "where a court finds that the Secretary has committed a legal or factual error in evaluating a particular claim, the district court's remand order will often included detailed instructions concerning the scope of the remand, the evidence to be adduced, and the legal or factual issues to be addressed." Id. at 885.
Furthermore, the Court recognized that "in many remand situations, the court will retain jurisdiction over the action pending the Secretary's decision and its filing with the court." Id. at 886. The district court, in that instance, retains the power "to assure that its prior mandate is effectuated." Id.
Significantly, the Court also recognized that such a remand would not confer "prevailing party" status on the plaintiff, as such a remand does not determine whether or not the claimant will actually obtain benefits. Id. Thus, any application for fees under the EAJA at the time of the remand in this type of situation would be premature, as the requirement that an applicant for such fees be the "prevailing party" would not be met.
Given the above factors as well as the policy behind the EAJA "'to diminish the deterrent effect of seeking review of or defending against, governmental action'" id. at 890 (citing 94 Stat 2325), the Court concluded that "where a court orders a remand to the Secretary in a benefits litigation and retains continuing jurisdiction over the case pending a decision from the Secretary which will determine the claimant's entitlement to benefits, the proceedings on remand are an integral part of the 'civil action' for judicial review, and thus attorney's fees for representation on remand are available. . . ." Id.
While the Court in Hudson did not state under which sentence of § 405(g) the District Court remanded the case, it is clear that the remand in Hudson did not meet the "new evidence" and "good cause" standards of sentence six, as the Court of Appeals remanded the case to the Secretary, citing her violation of her own regulations in coming to the disability determination. Id. at 880-881. Thus, as will be discussed later, by process of elimination the remand in Hudson must have been a sentence four remand, even though the Court retained jurisdiction over the case after the remand.
B. Sullivan v. Finkelstein: A "Final Judgment" For EAJA Purposes is Different From a "Final Decision" Under 28 U.S.C. § 1291
In Sullivan v. Finkelstein, the Supreme Court addressed the issue of whether the Secretary may immediately appeal a district court order which had the effect of invalidating certain agency regulations and requiring the Secretary, on remand, to reconsider his decision in light of the Court's action. Finkelstein, 496 U.S. at 619. The ...