SULLIVAN v. HUDSON
Legal provision: Equal Access to Justice
ORAL ARGUMENT OF EDWIN S. KNEEDLER ON BEHALF OF PETITIONER
Chief Justice William H. Rehnquist: We'll hear argument first this morning in No. 88-616, Louis W. Sullivan, Secretary of Health and Human Services v. Elmer Hudson.
Mr. Kneedler: Thank you.
Mr. Chief Justice, and may it please the Court:
The question presented in this case is whether a Social Security claimant has a right under the Equal Access to Justice Act to recover from the United States the attorney's fees and expenses she incurred in administrative proceedings following a remand from a federal district court.
Before summarizing the facts in this case, I will briefly describe the two provisions of each of the Equal Access to Justice Act that have been discussed in connection with the fee award in this case.
EAJA waives the sovereign immunity of the United States to fees and expenses in certain circumstances specified in the Act itself.
EAJA contains two basic provisions, one applicable to administrative proceedings, the other to judicial proceedings.
The provision of EAJA applicable to administrative proceedings is contained in Section 504 of Title 5 of the United States Code.
It provides that an agency that conducts what the Act refers to as an adversary adjudication shall award to the prevailing party in such an adjudication the fees and expenses that were incurred unless the adjudicative officer of the agency finds that the position of the United States was substantially justified or special circumstances would make an award unjust.
The term adversary adjudication is precisely defined in EAJA to mean circumstances in which the position of the government is represented by counsel or otherwise in the adjudication.
The other provision of EAJA concerning the award of attorney's fees and expenses in court is contained in Section 2412(d) of Title 28.
It authorizes a court to award a prevailing party fees and expenses incurred by that party
"in any civil action, including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of the action. "
It is the position of the United States in this case that neither of these provisions of EAJA waives the sovereign immunity of the United States to the award of fees and expenses on remand in this case.
Section 504 is inapplicable because administrative proceedings under the Social Security Act are non-adversarial.
The government does not take a position in those hearings and is not represented by counsel or otherwise in them.
Unidentified Justice: Mr. Kneedler, what does the phrase "or otherwise" mean?
Mr. Kneedler: Well, the model rules promulgated by the Administrative Conference of the United States and followed by federal agencies, including HHS, have given content to that.
Those model rules defined "represented by counsel or otherwise" to refer to situations in which there is another sort of representative, such as a paralegal, who might represent the government in the proceedings.
The model rules define the phrase "represented by counsel or otherwise" to refer to situations in which the position of the United States is presented by an attorney or other representative who enters an appearance and then actually participates in the administrative proceedings.
The Administrative Conference was given authority to coordinate the implementation of EAJA in the administrative context under Section 504(c)(1) of the Act, and these model rules were in effect... were promulgated in 1981 and have been in effect ever since, and were in effect when Congress reenacted EAJA in 1985.
Unidentified Justice: Has that ever happened, Mr. Kneedler?
I'm unfamiliar with proceedings where there is somebody representing the government who is not counsel?
What kind of proceedings would they be?
Mr. Kneedler: Well, I'm informed, for example, as particularly relevant here, the legislative history of the 1985 Reenactment refers to a special experimental program set up by HHS in the Social Security context in five regional offices whereby the Agency was represented in ALJ hearings.
I'm informed that in a number of occasions in those hearings non-lawyers appeared to represent the government in those proceedings.
These were program officers who were very familiar with the way in which the Social Security program operated but were not lawyers.
Unidentified Justice: How come you can say the United States doesn't take a position in passing on the claim?
Mr. Kneedler: Well, there is no advocate for the government, from the perspective of the government seeking to deny a claim in an administrative hearing.
The only government official, the only SSA official, present at a hearing is the ALJ.
Unidentified Justice: And you don't think... you don't think in denying a claim the United States has taken a position?
Mr. Kneedler: Well, I suppose that the ALJ as a judicial officer could be said to be rendering a decision that the claimant is not entitled.
But EAJA refers to the... to advocacy before the decision-maker.
The advocates for the claimant, and if there should be one for the government.
Someone advocating that the claim should be denied.
The ALJ does not, as this Court recognized in Richardson v. Perales, does not act as an advocate or an adversary.
The ALJ is an adjudicator.
And, in fact, under governing regulations, the Administrative Law Judge has an obligation to inquire fully into all the circumstances and facts of the case.
Unidentified Justice: And so the proceeding really isn't adversary unless the United States is separately represented?
Mr. Kneedler: That's correct.
Through a lawyer or otherwise.
Unidentified Justice: Mr. Kneedler, the adjudicative agency proceeding that is being considered here for purposes of attorney's fees is one that occurred on remand as a result of the civil litigation.
Is that correct?
Mr. Kneedler: That's... that's right.
Unidentified Justice: And I take it there is no final judgment for purposes of determining the attorney's fees under EAJA until the district court finally enters the judgment at the conclusion of the proceedings on remand?
Mr. Kneedler: Yes.
Unidentified Justice: Is that right?
Mr. Kneedler: --A final judgment for purposes of awarding the fees.
Unidentified Justice: Yes?
Mr. Kneedler: Not a final judgment for purposes of appeal.
We believe the remand order was appealable at the time that it was sent back to the Secretary.
Unidentified Justice: But for purposes of awarding fees, am I correct?
Mr. Kneedler: That's correct.
But that's only for fees in the judicial proceedings.
Unidentified Justice: Well, why... why isn't it the case then that the court in the civil action retains jurisdiction and why isn't this remand proceeding in essence part of the civil action?
I think that point troubles me most.
Mr. Kneedler: Okay.
Two separate answers.
The district court can retain jurisdiction for purposes of awarding attorney's fees.
But the... when the claimant first seeks judicial review, the question before the court is whether the Secretary's decision denying the claim for benefits is correct or not.
In this case, the district court affirmed the Secretary's decision, but the Eleventh Circuit reversed and said the Secretary should... and remanded back to the Secretary to consider other circumstances.
When the case was sent back to the Secretary, the district court's review of that decision was completed.
The court of appeals had concluded that that decision was erroneous.
The district court could retain jurisdiction for purposes of awarding fees if the claimant should ultimately prevail on remand.
Unidentified Justice: Oh, and presumably to make sure that the proceedings on remand were in accordance with the court's view of the overall relief that should be granted.
Mr. Kneedler: But the way the procedure operates is that when the case goes back to the agency... for example, what happened in this case.
The Appeals Council receives the remand from the court and then the Appeals Council, in this case, vacated its prior decision denying the claim for benefits.
From that point on there was no outstanding position of the Agency that Respondent should be denied benefits.
And then there was the... the Appeals Council ordered a hearing.
There was no representative of the government at that hearing.
The government did not take a position before the Appeals Council or the ALJ.
Unidentified Justice: Yes, but it's very easy to consider this thing as just part of the civil action.
Mr. Kneedler: But both EAJA and the Social Security Act clearly distinguish between civil actions and proceedings before the Secretary.
EAJA itself carefully divides the circumstances for the award of attorney's fees into two categories.
One under Section 504 for fees performed for services before an agency.
That's only when the proceedings are an adversary adjudication.
Section 2412 governs... requires that the fees be incurred in the civil action in court.
Now, a remand proceeding is not part of the civil action.
The Social Security Act itself divides the responsibilities in a directly parallel fashion between the Agency and the court.
Under Title II, for example, Section 405(b) specifically directs the Secretary to conduct hearings and to find facts.
Section 405(b) applies both in the initial hearings and on any hearings on remand.
The same standards, the same procedures apply, and they are non-adversarial in the same way as before.
Section 405(g), on the other hand, is the provision of the Social Security Act that deals with judicial review, and it deals with the responsibilities of the court, not the Secretary.
In fact, 405(g) uses the same phrase, civil action, that EAJA does.
So, the attorney's fees that are authorized under Section 2412 under EAJA in a civil action are only those fees incurred in the action for a judicial review.
If the court concludes that the case should go back to the Secretary, it is then returning the matter back to the officer of the government having primary and distinct responsibility for the claim, which is the Secretary of HHS.
Unidentified Justice: Mr. Kneedler, did the Eleventh Circuit here, when it remanded to the Agency, make any special statement saying this Court is retaining jurisdiction over this case, or is whatever retention of jurisdiction it had simply the normal retention of jurisdiction that occurs by operation of law, if any?
Mr. Kneedler: The latter.
There was no specific reservation of jurisdiction in this case.
Unidentified Justice: So this is no different from a court of appeals, let's say the D.C. Circuit remanding an agency rulemaking, reversing the rule and remanding for further proceedings before the agency?
Mr. Kneedler: I think that's essentially correct.
And the proceedings back before the Agency then are within the primary jurisdiction of the Agency and, therefore, within the ambit of Section 504 and fees can be awarded only if Section 504 applies to them.
Unidentified Justice: Are there... are there any instances to your knowledge... I seem to recollect some... in which a court doesn't just remand, but remands with some special indication that it intends to oversee further developments in the case?
Mr. Kneedler: I suppose that could happen.
There have been... there have been district court decisions under the Social Security Act where the court sends the case back to the Agency and purports to retain jurisdiction.
I mean, in particular for the award of attorney's fees.
But I think that doesn't render the court's review non-final, as is true in an appeal under 1291 if there is still an outstanding attorney fee question, as there might be here.
That doesn't render the court's review non-final.
Unidentified Justice: Do you think courts can retain jurisdiction and in effect have the Executive Branch operate under the court's supervision thereafter?
Mr. Kneedler: I think not.
And, in fact, I think when you read Section 405(g) closely... and we discuss this at the conclusion of our reply brief... Section 405(g) makes it pretty clear that that's not supposed to happen here.
Section 405(g) addresses the question of remands in circumstances such as this where the court reverses the Secretary's decision on the merits and sends it back to the agency for what the statute refers to as a rehearing under what the court regarded to be the proper standards.
Section 405(g) provides that that's a judgment, when the court reverses the Secretary's decision and sends it back for a rehearing.
That is a judgment even though there will be further proceedings before the Agency.
And Section 405(g)... sentence eight of Section 405(g) in fact designates that as a final judgment.
So, it seems to us to be particularly clear under Section 405(g) that the court's reviewing job is completed when the case is sent back to the Secretary.
And at that point, once the Appeals Council vacates its prior decision denying the claim for benefits, the claimant is back exactly where she was during the time of her first hearing.
Unidentified Justice: Well, certainly her attorney was needed on remand to accomplish the ultimate goal of the litigation.
Mr. Kneedler: First of all, in this case it's not at all clear that an attorney was required because it's particularly vivid that the proceedings on remand in this case were non-adversarial.
Not only did the Appeals Council vacate the ALJ's prior decision, but the Appeals Council took note of the fact that after the time the ALJ rendered her decision the first time around Congress had ordered the Secretary to revise the standards for mental impairments.
The Appeals Council ordered the ALJ to review Respondent's case under the new standards and suggested that the ALJ receive the advise of a medical advisor.
All of those are clearly non-adversarial undertakings by the government, and in fact were for the benefit of the claimant.
And it was in response to those actions taken by the Appeals Council on its own that Respondent was awarded benefits.
So, it seems to us to be particularly vivid in this case that the proceedings were non-adversarial.
The only... the only thing that counsel did in this case that Respondent has pointed to is to correct the typographical error at the conclusion of the ALJ's decision identifying the onset date of the period of disability as May 15th, 1982 rather than 1981.
But it was perfectly evident from the prior portions of the ALJ's decision that that was an error, and there is no reason to think that the Appeals Council would have overlooked that onset date on its own.
But, more importantly, that error was not in any way due to adversarial representation by the government.
Once again, whatever one might think should be the proper rule here, Congress has specified that before an agency, fees may be awarded only when the agency proceedings themselves satisfy the statutory definition of being an adversary adjudication.
Unidentified Justice: Mr. Kneedler, could I interrupt to get your help on one part of the 2412(d)(3).
The government agrees, does it not, that there are fees payable for the proceedings in court?
Mr. Kneedler: Yes.
Unidentified Justice: But those proceedings, under the statute, had to be judicial review of an adversary adjudication, did they not?
Mr. Kneedler: No, No. 2412(d)(3) refers to circumstances in which a court may award fees for services performed before the agency; 2412(d)(1)(A) is the section that provides for fees awarded in the judicial proceedings themselves.
Unidentified Justice: Oh, I see.
Because in your brief... or, your petition, rather... you quoted 2412(d)(3).
But you really should have quoted 2412(d)(1).
Mr. Kneedler: Yes.
Well, in our brief we add 2412(d)(1)(A).
This is on page 2 of our brief.
Unidentified Justice: Oh, I see.
Mr. Kneedler: But 2412(d)(3) is significant in our view because it is a provision of the Act that specifically addresses the circumstances in which a court may award fees... in which a court may award fees for services performed before an agency.
And 2412(d)(3) is specifically limited to those cases in which the party seeks judicial review of an adversary adjudication.
In other words, the only case in which a court may award fees for work done before an agency, the very relief that Respondent seeks in this case, is, once again, when the agency itself has conducted an adversary adjudication in which the agency is represented by counsel.
Unidentified Justice: In the program, the pilot program that you described to Justice Scalia, would the attorney's fees... could attorney's fees be awarded in that instance, where these representatives of the government weren't present assuming other conditions are satisfied that the government's position is not substantially justified?
Mr. Kneedler: If there had been an attorney present in the experimental program?
Unidentified Justice: Well, yes.
Or one of these non-attorneys--
Mr. Kneedler: Non-attorneys.
Unidentified Justice: --representing the government.
Mr. Kneedler: Well, there is a separate threshold question which we identify in a footnote in our brief.
And that is whether... the definition of adversary adjudication is not only where the government is represented by counsel, but also another requirement is that the adjudication be undertaken under Section 554 of Title 5, which is the APA.
And it's been the position of the government for many years that the APA does not apply of its own force to Social Security proceedings.
And this Court left that question open in Richardson v. Perales.
So, there is that threshold question.
But here there is no need to reach that because we think it's so clear from the statutory text that absent the sort of experimental program to which you're referring these are simply not adversary proceedings because the government doesn't take a position before the ALJ on the claim, and what's more, it does not appear through counsel or other representative.
Unidentified Justice: Although the government does use ALJs in all those proceedings, it's not confident enough about its position on that point that it doesn't decline to use ALJs who are usable only for 554 proceedings.
Mr. Kneedler: Well, at least for the--
Unidentified Justice: If it was not a 554 proceeding, you could have any agency officer conduct the hearing, right?
Mr. Kneedler: --Yes.
But I believe there is--
Unidentified Justice: And the government always uses ALJs.
Mr. Kneedler: --I believe there is separate statutory authorization for the use of Administrative Law Judges in Social Security programs.
Congress converted prior hearing examiners under Title 16.
I'm not sure about Title 2.
Unidentified Justice: Mr. Kneedler, going back to the text... and I thank you for calling my attention to the right provision on page 2 of your brief... 2412(d)(1)(A), including proceedings for a judicial review of agency action.
In the government's submission, when did the proceedings for judicial review of the Agency action in this case terminate?
Mr. Kneedler: They terminated when the case was remanded back to the Secretary.
Unidentified Justice: And the... and the filing the order later on and getting fees for the work during the judicial, that was not part of the judicial proceeding?
Mr. Kneedler: Well, it was part of the judicial proceedings only for purposes of the award of--
Unidentified Justice: Well--
Mr. Kneedler: --attorney's fees.
Unidentified Justice: --when did they terminate for all purposes?
Mr. Kneedler: Well, for all purposes, including attorney's fees, it terminated when the fees were awarded.
Unidentified Justice: Which was after the remand proceedings had taken place?
Mr. Kneedler: --Yes.
Unidentified Justice: But you say that part of the proceeding is kind of carved out because it was before the Agency rather than before a court?
Mr. Kneedler: The proceedings on remand, yes.
Unidentified Justice: Yes.
Mr. Kneedler: Not... not carved out.
They're just separately dealt with under both the EAJA and the Social Security Act.
Unidentified Justice: Well, that's the issue, I guess.
Mr. Kneedler: Right.
But... but it... there's no suggestion whatever in the text or legislative history of this Act that proceedings on remand before the Agency are somehow part of the civil action in court.
Congress, again, quite separately dealt with the two different types of proceedings.
And, again, in the administrative proceedings, the purposes that Congress was trying to serve by making attorney's fees available in certain adversary adjudications, again, demonstrate why attorney's fees should not be available.
And Congress didn't contemplate that they would be in proceedings on remand.
What Congress was trying to do, as the word equal access to justice suggests, was to level the playing field.
Where the government is represented by a lawyer in an administrative proceeding, or other representative, Congress determined that attorney's fees should be available for the claimant in appropriate circumstances.
And by the same token, the legislative history of the 1980 Act makes it particularly clear that it would be unfair to award the... to require the government to pay for the claimant's attorney when the government itself wasn't represented by an attorney.
Unidentified Justice: Well, there is no claim in this case for a fee on the initial administrative proceeding.
Mr. Kneedler: That's... that's correct.
But the same rule... the same rule applies to the proceedings on remand because they... because those proceedings on remand are governed by exactly the same regulations, the same standards.
And, in fact, after the remand, as I mentioned earlier, the claimant is in exactly the same position as she was in before.
Unidentified Justice: Well, really... really, the claimant is in a much stronger position.
The United States' position, if it ever had one, had been overruled.
Mr. Kneedler: Yes.
Unidentified Justice: So, the result is preordained.
Mr. Kneedler: --It's not preordained because--
Unidentified Justice: Well, it's close.
Mr. Kneedler: --The court... the court may have... the court may have disagreed with the Secretary on certain legal issues--
Unidentified Justice: Yes.
Mr. Kneedler: --as was true here in considering several impairments.
But the court sends it back to the ALJ for a fresh adjudication under the correct legal standards.
And then the parties start all over again, with the government not represented by counsel.
And the purposes of the Act that are reflected both in the statement of purposes in Section 202 of EAJA, plus the legislative history, indicate that Congress didn't intend the fees to be available there because there is no disparate... if there is any disparity in the representation, it's in favor of the claimant since the claimant has a lawyer and the government does not.
And it would, in the judgment of Congress in 1980, be unfair to require the government to pay the claimant's attorney's fees when the government itself is not represented by counsel.
Unidentified Justice: Well, the claimant has got a judgment too.
Mr. Kneedler: The claimant has a judgment and the issues have been narrowed on remand.
As this case demonstrates, the adjudication on remand was facilitated.
Unidentified Justice: But the way the issues have been narrowed is they have to... further proceedings have to be in accordance with the opinion of the court of appeals or the district court.
So, there is... you've got a little different set of ground-rules.
Mr. Kneedler: They are, but that's no different from the fact that the ALJ has to conduct the hearing under certain legal rules at--
Unidentified Justice: Yes, but the difference, I suppose, is that the... I think if you were a lawyer representing a client in that position, you'd really have a professional duty to be sure that the standards that you fought for in the litigation were carried out and were interpreted properly.
Mr. Kneedler: --Well, and--
Unidentified Justice: It's kind of strange for the lawyer to just go home and sit around.
Mr. Kneedler: --No, no one is suggesting that.
But a lawyer would have the same sort of duty in an initial proceeding before the case had ever gotten to court to make sure that the ALJ obeyed whatever legal standards governed that proceeding.
Whether it be regulations or a prior court of appeals decision that didn't apply to the claimant's case.
Unidentified Justice: But are the claimants in all these proceedings, these vast number of proceedings, in the initial stages typically represented by counsel?
Mr. Kneedler: The figures that the Social Security Administration gave me is that in about 65 percent of hearings the claimant is represented by counsel, and about another 18 percent represented by some other form of representative other than counsel.
Unidentified Justice: Those are in claims that go to hearing, of course.
Mr. Kneedler: Claims that go to hearings, yes.
Unidentified Justice: Before an ALJ?
Mr. Kneedler: Before an ALJ.
Unidentified Justice: So there would be an awful lot of them denied before that, or granted before that, and I suppose that in most of those there probably would not be counsel.
Those that are just processed at the administrative level.
Mr. Kneedler: Before the ALJ, yes.
Unidentified Justice: Yes.
Mr. Kneedler: A lot of them are not represented by counsel--
Unidentified Justice: Yes.
Mr. Kneedler: --in that.
Again, Respondent bases her entire submission in this case on a supposed distinction between administrative proceedings that precede judicial review and proceedings on remand from the court.
But, there is nothing in the Act and nothing in the legislative history of the Act that draws such a distinction or furnishes any statutory or textual basis for the award of a claim.
Administrative proceedings before the Secretary are just that, whether they're in the initial proceedings or on remand.
But if there were any question about it, I would like to refer the Court's attention to the legislative history on page 26 of our opening brief, where Congress was specifically addressing the question of the award of attorney's fees in the context of where a case is remanded by the district court back to the Secretary.
Congress was there discussing, in the indented quote, the arrangements that certain courts had made to provide for the award of attorney's fees in those cases before--
Unidentified Justice: So, this was a House Committee discussing it?
Mr. Kneedler: --Yes.
The... when a case is sent back to the Secretary, the claimant is not yet a prevailing party and so the arrangement several courts arrived at was that the district court could retain jurisdiction over the attorney's fee question to see whether the claimant prevailed on remand.
If she did, then the court could award fees for what occurred in the judicial proceedings.
But, as the italicized sentence says, as the courts have found, the only fees which will be available will be for those activities undertaken in connection with the initial or judicial proceedings, and not those associated with the administrative proceeding.
And since this quotation was in the specific context of remands, we think it's quite clear from the legislative history that Congress intended the text of the Act to mean what it said.
Unidentified Justice: Let me just make sure I understand one other thing, Mr. Kneedler, about the scheme.
Supposing the claimant wins in the judicial proceeding in the sense that he or she gets a new hearing but ultimately does not get any money out of the case because on remand they decide the claim is no good for some other reason; that person is not a prevailing party within the meaning of the statute?
Mr. Kneedler: That's correct.
There were judicial decisions to that effect and Congress ratified those when it passed the--
Unidentified Justice: So that the status of the claimant as a prevailing party in the last analysis depends on what happens in the administrative proceedings on remand?
Mr. Kneedler: --That's correct.
Unidentified Justice: Yeah.
Mr. Kneedler: But that's just to determine whether he's a prevailing party for fees in the judicial proceedings themselves.
Unidentified Justice: Yes, but that is not part of the judicial proceeding in which--
Mr. Kneedler: That is... what happens on remand is not part of the judicial proceeding.
Unidentified Justice: --in which they become a prevailing party.
Chief Justice William H. Rehnquist: Thank you, Mr. Kneedler.
ORAL ARGUMENT OF JAMES E. COLEMAN, JR. ON BEHALF OF RESPONDENT
Mr. Coleman: Mr. Chief Justice, may it please the Court:
Mr. Kneedler referred to the purpose of the Equal Access to Justice Act as leveling the playing field.
But there is another equally important purpose of the Act, and that was to shift to the Federal Government the cost of litigation caused by a federal agency or official that took a position against a person such as Mrs. Hudson without substantial justification.
In this case, the government does not contest that the position it took in 1982 when it initially denied the benefits to Mrs. Hudson was without substantial justification.
Unidentified Justice: Excuse me, but the Act does not provide compensation in that situation so long as there is no attorney.
It's clear that for the initial Social Security determination, even though the ALJ who is an employee of the Agency and a government official, wrongly decides against an applicant... arbitrarily takes an unreasonable position... there would be no fees available for that--
Mr. Coleman: That's correct, and we don't dispute that at all.
Unidentified Justice: --Well, but doesn't that cast some doubt on... on what you're saying?
Mr. Coleman: --No.
Because the Equal Access to Justice Act is really two statutes.
One statute is a provision in which the government is permitted to pay attorney's fees in adversarial adjudicatory proceedings.
And we don't contest that.
The second part of the Act is where the government is involved in civil proceedings, in court proceedings, and takes a position that's not substantially justified.
Fees are also available in that circumstance.
And it's our position in this case that it is Title 28 that governs, and not Title 5.
There is no dispute in terms of what happens in the initial proceedings.
That the government can take any position it likes.
It can be arbitrary, it can protract the proceedings, and when the Secretary makes a final decision the claimant is not entitled to attorney fees.
But, what the Act says is, that if there is a civil action initiated to review that, the government gets only one chance to do that.
It's already had its chance in a case such as this.
Then we have a civil proceeding and we never go back to the administrative proceedings that are governed by Section 504 of Title 5.
Unidentified Justice: Mr. Coleman, the court below relied instead on the Agency adversary adjudication section.
But you don't seem to be defending that now.
You are urging us to affirm, but on a different ground, that it is part of the civil action.
Is that basically right?
Mr. Coleman: That's correct, Justice O'Connor.
Unidentified Justice: So, you agree essentially with Mr. Kneedler, then, that the United States was not represented otherwise within the meaning of the adversary adjudication provision before the Agency?
Mr. Coleman: Well, not exactly because our position is that Section 504 is not relevant to the remand proceedings.
If it is relevant, if this Court determines that Section 504 and Section 2412 together... determine whether a fee is awarded in a case to review a decision of the Secretary, then the Eleventh Circuit's decision would be correct and we would defend it on that basis.
But, in our view, the way in which the statute was enacted makes it very clear that the administrative proceedings are what precedes the judicial review, and that after the final Agency decision in the administrative proceedings, the only thing that you have left is a judicial proceeding.
And that's true whether it was an adversarial proceeding below or whether it was a non-adversarial proceeding.
Unidentified Justice: And how do you respond to the language in the House report that is cited on page 26 of the government's opening brief?
Mr. Coleman: That report is cited... first of all, it's edited in the government's brief in a way that distorts the meaning.
For example, the portion of the report that is emphasized in the government's brief refers to "as the courts" and they replace "these" with "the".
This sentence referred to cases that were cited in the Brown v. Secretary of HEW case which they deleted right before the sentence that they emphasized.
In Brown, the court noted that there were a number of decisions in which courts had awarded fees for obtaining a remand, without waiting to see what happened in the remand proceedings.
And what the Congressional Report, what the House Report says, is that as these courts found in those cases where the remand proceedings had not even occurred... and none of the cases reflect what happened on remand... that the judges awarded fees for the judicial portion leading up to the remand but not for the administrative proceedings, which--
Unidentified Justice: Mr.--
Mr. Coleman: --can only refer to the administrative proceedings that--
Unidentified Justice: --Mr. Coleman--
Mr. Coleman: --came first.
Unidentified Justice: --Mr. Coleman, are you paraphrasing now the language of a House Report or are you quoting directly?
Mr. Coleman: Well, I can quote it directly.
Unidentified Justice: No, I was just curious.
Mr. Coleman: --I was paraphrasing.
Unidentified Justice: You were paraphrasing.
Mr. Coleman: I was paraphrasing.
But what the government also did in its brief was to... there was a typographical error in the original House Report which said "initial".
It should have been "judicial".
And that was corrected in a supplemental report.
But, because it said i.e., judicial proceedings> ["] when in fact all it referred to were the judicial proceedings that led to the remand, and not... it did not intend to indicate any relationship in time between the administrative proceedings and the judicial proceedings.
Unidentified Justice: How do we know that was a typographical error in the House Report?
Mr. Coleman: We... we cite in our brief the supplemental House Report which makes the correction.
Unidentified Justice: Oh.
That proves that it was a typographical error?
Mr. Coleman: Well, I assume what it proves is that the initial word... that the word "initial" was intended to be judicial.
Unidentified Justice: Or, at least, the later House Committee thought it should have been "judicial".
Mr. Coleman: No, it was... I'm sorry... it was the same committee.
Unidentified Justice: The same committee--
Mr. Coleman: It was a supplemental--
Unidentified Justice: --later?
Mr. Coleman: --Yes.
It was simply issued a few weeks, I think, later.
Unidentified Justice: Uh-huh.
Mr. Coleman: Section 504 of Title--
Unidentified Justice: Mr. Coleman, can I ask you about the... what seems to me to be the logical basis for your case is that everything that happens until the judicial proceeding is terminated, is part of the judicial proceeding.
Since the case was not over until the remanded proceedings were completed, everything that occurred had to be part of the judicial proceeding.
But it seems to me those are two different questions: when the proceeding ends and what constitutes part of the proceeding while it is still continuing.
When we remand something to a lower court or when a court of appeals remands something to the district court, you may well say... and explicitly says, "we retain jurisdiction" or something of that sort... you may well say that the case doesn't end until it's completed below.
But you would not say that the proceedings below are part of the court of appeals proceeding.
That seems to me a very strange way to think.
And that's what you're saying here.
You're saying the proceedings below are part of the judicial proceeding.
They haven't been completed yet, but that doesn't make them part of the judicial proceeding.
Mr. Coleman: --Well, that is what we're saying, but I don't think the analogy with what happens when this court or a court of appeals remands a case.
There are some circumstances where there is a limited remand by a court of appeals, for example, in which the court of appeals retains jurisdiction in order to enter an order pending further proceedings in the district court.
That is more analogous.
But in this case, Section 405 of the Social Security Act itself makes the remand proceedings a part of the judicial proceedings because the Secretary does not have the authority in the remand proceedings to issue a final decision that would terminate the proceedings.
It's very clear.
And the government took the position in this case and has taken the position in all of these cases.
And that also is reflected in the House Report that the government cites on page 26, that a remand, a limited remand in a Social Security case is for the purpose of the Secretary to take some action in accordance with the court's decision.
The Secretary then files the transcript, to the extent that there was a transcript developed in the remand proceedings, plus any new decision or modified decision that the Secretary makes on the basis of the remand proceedings.
All of that is then filed in the federal district court, and the district court then, upon review of that, issues a final decision... the final decision... either affirming, reversing, or modifying.
What happened in this court and what the Eleventh Circuit did... what happened in this case and what the Eleventh Circuit did was to say that in the initial proceedings, which we acknowledge... we concede... Mrs. Hudson was not entitled to claim attorney's fees for.
But in those proceedings the government took a position that was contrary to its regulations, which was that Mrs. Hudson suffered from various impairments, none of which taken alone was sufficient to render her disabled.
But the Eleventh Circuit had decided in a number of cases, going back to 1980, that in a situation like that, the Agency is to consider the impairments in combination.
And that's what the Agency failed to do in this case, and it litigated that position in the judicial action to review its decision.
The Eleventh Circuit said... you should have done it that way, now do it that way.
And then under 405 you file the transcript and any decision, and the district court enters the final judgment.
Unidentified Justice: Mr. Coleman, I'm a little troubled by the consequences of the rule that you're urging for as far as the governmental fiske is concerned.
Let's assume a lot of Social Security attorneys realize that the Agency has been taking a position that things in combination don't count, that it has to be individually.
They figure this is wrong on the law and they figure they can win that on an appeal.
Even those who have clients who... even though they know that their clients can't prove a disability even in combination, those attorneys could bring a suit on behalf of those clients before the Social Security Administration, lose there, go up on appeal, win on appeal on the issue of law, get remanded to the Agency.
Fight before the Agency on the issue of fact, whether there is any disability even in combination, on the issue of fact that they know they can't win on.
And then they can go home with attorney's fees for both their work in the court of appeals and their work before the Agency.
Wouldn't they be able to?
Mr. Coleman: --That's not the case.
And that's a very significant point because in order to obtain attorney fees in these cases, the claimant must receive benefits.
Unidentified Justice: You acknowledge that they have to win when they get back?
Mr. Coleman: Yes.
And that is why it is important that the remand proceedings be considered a part of the judicial proceeding.
Because in order to get attorney fees under 2412 the claimant must win in the remand proceedings or must establish a record that will permit him or her to win in the judicial proceedings.
So, the case that you suggest would--
Unidentified Justice: Couldn't happen.
Mr. Coleman: --not result in attorney's fees.
Section 504 of Title 5... I think by its terms it's clear that it was intended to deal with administrative proceedings that occurred prior to judicial review and that were concluded prior to judicial review.
There are three provisions of Section 504, I think, that are relevant in that respect.
First, the party must prevail in the adversary adjudication, and that's Section 504(a).
Second, the fee sought must be sought within 30 days of a final disposition in the adversary adjudication.
Then, finally, Section 504(c) provides that if there is judicial review sought of the final decision following the adversary adjudication, then fees can be awarded only by the court that reviews the final action.
That is Section 504(c), and fees in that case would be awarded under Section 2412(d)(3).
There is no other circumstance, even in Section 504, where the Agency makes a final decision, a final determination, and then that is reviewed by a court in which you go back to the Agency to recover fees.
The notion is that the action is terminated on judicial review for purposes of the administrative proceeding as well.
In this... In this case, the government for the first time in its reply brief takes the position that the... that the judicial proceeding terminated with the remand order.
That is contrary to the position that it took earlier in the case and is contrary to the position that it has taken in all of these cases.
And, it's contrary to the house report that specifically referred to cases decided in the Fourth Circuit and the Third Circuit dealing with this issue.
The remand proceedings... first of all, in order to recover attorney fees the party must prevail.
In other words, in a Social Security case, the party must obtain benefits.
That happens only after the remand proceedings have been concluded and the findings of the Secretary and a decision is filed back with the court which has jurisdiction under Section 405(g) to enter the final order.
In addition, the 30-day time period for filing the application begins to run from the time of a final judgment.
And the cases have consistently interpreted that requirement to mean the time that the district court enters an order terminating the proceeding, the judicial proceeding.
In the section of the legislative history cited by the government at page 26 of its brief that talks about remand proceedings, first of all, it's important to note that that section of the legislative history dealt only with whether or not fees would be available at the point that a remand order is obtained, as opposed to whether they are available as cases have held following the receipt of benefits on remand.
But in that section of the legislative history, the House Report says that the remand decision is not a final judgment nor is the Agency decision after remand.
Instead, the district court should enter an order affirming, modifying, or reversing the final Agency decision, and this will usually be the final judgment that starts your 30 days for filing the EAJA petition.
That is the position that the government has taken throughout in this case until the reply brief.
For the first time in the reply brief the government suggests that the final judgment in this case came at the time that a remand order issued, as opposed to the time, December 1, 1987, when the district court entered an order dismissing this case but retaining jurisdiction to entertain a petition for attorney fees.
Unidentified Justice: If the government had given up after the... after the decision on appeal and just paid the claim, they could have done that.
Mr. Coleman: They could have done that.
Unidentified Justice: And there would have been a final judgment.
Mr. Coleman: There would have been a final judgment in that instance and we wouldn't have this case.
And that is the... that is the point of the--
Unidentified Justice: Well, there was a final judgment of the court of appeals on the law.
Mr. Coleman: --That's correct.
But what the court of appeals finally determined... the effect of the Secretary's regulations.
And that was final.
But what the Eleventh Circuit did not finally determine was whether or not the respondent was entitled to--
Unidentified Justice: Was entitled to benefits.
Mr. Coleman: --benefits.
And that was the point of the complaint in the first instance, was to reverse the Secretary's decision that she was not disabled and not entitled to benefits.
Unidentified Justice: Could the government, in your view of the thing, have taken an appeal on the merits from the court of appeals immediately without--
Mr. Coleman: I'm not--
Unidentified Justice: --going through the remand?
Mr. Coleman: --I'm not sure that the government could have.
In other words, whether the government could have sought cert in this court following the decision in the Eleventh Circuit... I'm not sure whether the government could have done that from the Eleventh Circuit.
But I don't think--
Unidentified Justice: A court of appeals judgment doesn't have to be a final judgment.
Mr. Coleman: --Yes.
Unidentified Justice: I mean, it's appealable.
They can seek cert from a court of appeals judgment.
Mr. Coleman: --That's correct.
And that's why I'm not sure that it's relevant to this issue.
Because at that point, just as they did here where the Eleventh Circuit determined that the government's position had been without substantial justification and remanded to the district court, the government sought cert in this case.
And so the civil case, obviously, continues in that circumstance.
The remand would then have waited until this court either denied cert or granted cert and reviewed and issued a decision.
So, there is no circumstance where if an appeal had been taken, the remand proceedings would have gone on simultaneously.
This Court... or, at least Justice Brennan in a concurrent opinion in the case of Webb v. Dyer County Board of Educations referred in interpreting Section 1988 of Title 42 of the U.S. Code... referred to an analogous situation in which the district court in a civil rights case abstains in order to permit the parties to litigate a state law issue in a civil rights action.
And then, once the state law issue is litigated, then the district court proceeds with a determination of the civil rights claim.
Justice Brennan referred to that as a taking the ancillary proceedings and making them a part of the civil rights litigation for purposes of Section 1988.
I think that what happened in this case is analogous to that situation where the remand proceedings were for purposes of establishing a record on which the district court could then make a determination of whether Mrs. Hudson was entitled to benefits whether or not the Secretary issued a decision that she was.
Unidentified Justice: But the district court doesn't make the initial determination of whether she's entitled to benefits.
That's for the Secretary, is it not?
Mr. Coleman: That's correct.
Unidentified Justice: And what's the standard of review in the district court?
Mr. Coleman: Whether or not it's supported by substantial evidence.
And that's also... that also is the standard with respect to what happens in the remand proceedings as well.
But the remand proceedings are limited remand proceedings only for the purpose of the Secretary taking an action that she should have taken in the initial proceedings.
Unidentified Justice: Well, you use the term "limited remand".
Are you suggesting that there are some remands involved in Social Security cases which are not limited remands?
Mr. Coleman: Yes.
Unidentified Justice: What would be an example of one of those?
Mr. Coleman: For example, where the Secretary makes a ruling of law that terminates the proceeding prior to a final decision.
In other words, terminates it and says that the claimant, for example, does not qualify under the statute without regard to what the facts are.
That is litigated; The Secretary has reversed.
Then that would terminate the judicial review.
The proceedings would then resume before the Secretary to a conclusion.
But that's not what happened in this case.
In this case there was a final decision by the Secretary.
The administrative proceedings went through to their conclusion.
And the only thing that happened following the Eleventh Circuit's decision was that the court decided that the Secretary had failed without substantial justification to consider the impairments in combination.
Unidentified Justice: So, in your first example of the unlimited remand... there, would the decision of the Secretary have been final on remand?
Mr. Coleman: It would be a... It would be a final decision, but it would not be a final decision with respect to the claim that the claimant is disabled.
The Secretary doesn't reach that decision because she rules on an issue of law that she doesn't have to reach that decision.
If she's wrong about that, I think that the party who seeks judicial review is the prevailing party under the Equal Access to Justice Act, and the administrative proceeding simply continues.
In this case, the remand was solely for the purpose of the Secretary considering the impairments in combination.
That's reflected in the recommended decision of the Administrative Law Judge on remand, which is a part of the appendix to the petition for cert in this case, beginning at page 21 of the Appendix.
Unidentified Justice: Mr. Coleman, may I interrupt you because I'm not sure I follow part of your argument?
You say there are two kinds of proceedings.
One where there is a threshold legal objection that is sustained by the Secretary, and no facts.
And the other, the case like this.
In the threshold legal determination kind of case, supposing you went on appeal and the court says, go ahead and have a full hearing.
Do you take the position that before that hearing you would become a prevailing party?
Mr. Coleman: I think so, because the relief that you... the relief that you sought--
Unidentified Justice: But now would the district judge be allowed to give you that award of fees without waiting to see if you prevail at the actual hearing?
Mr. Coleman: --Yes.
And that has been done.
That was one of the decisions that was cited in the Brown v. Secretary of HEW case cited in the House Report.
One of the cases involved just that, where the administrative proceedings were terminated because the Secretary determined that the claimant had not met a requirement for seeking an appeal to the Appeals Council.
Unidentified Justice: But then, conversely, you are agreeing with the government, I guess, that in that sort of case you would not be entitled to fees in the remand proceedings before the Agency?
Mr. Coleman: That's correct because the remand proceeding then is simply a continuation of the one that had begun but in which the Secretary had not reached a final decision on the question of whether the person was disabled.
Unidentified Justice: And then one other question.
Do you think all of these cases fall neatly into one or the other of these two categories?
Mr. Coleman: I think that they probably fall neatly within one or the other.
I think that there may be some circumstances where... in the instance that I've just described, where there's sort of an interlocutory appeal or interlocutory review in federal court under... in an administrative proceeding that would be governed by Section 504 where the remand proceedings would continue and they would be governed by Section 504.
It's simply that the two ends would be put together.
In this case, what the government, by its position, is attempting to do is to carve out the remand proceedings and treat them as if they sort of exist out in space independently of anything.
The remand proceedings exist only for purposes of the further consideration ordered by the district court to permit the district court to issue a final judgment in the case.
And that's without regard to the Equal Access to Justice Act.
That's the purpose of it.
It simply is a part of the judicial proceedings that the district court has ordered in order to give the Secretary an opportunity first to, as in this case, consider the impairments in combination.
Once that was done, then the judicial proceedings will continue.
Unidentified Justice: Do you think it's critical that we consider the proceedings that went on after remand to be part of the judicial proceedings?
Mr. Coleman: Well, it's--
Unidentified Justice: Or are you... I understood your brief to say that once the government has ever taken a legal position, then any administrative proceeding that occurs after that, whether the government is represented or not, is... is subject to a fee award.
That's... That's the alternative ground that we argue.
And that is the... that's the ground on which the Eleventh Circuit awarded fees in this case, which was, the Eleventh Circuit determined that the remand proceedings were proceedings in which the government had taken a position because of its relationship to the civil case.
But you are defending that decision on that ground, I guess.
Mr. Coleman: --Well, we think the--
Unidentified Justice: But you think you have a better ground?
Mr. Coleman: --That's correct.
We think the better ground is to view the remand proceedings as part of the civil action and... and not have to reach the question of whether 504 applies at all.
Unidentified Justice: Mr. Coleman, all of this argument has assumed that you can't get fees just from the court... just for the court proceeding until you get your award.
Have we said anything that makes that clear?
I mean, it seems to me... let's assume the government takes on the appeal, on your appeal, a position that is not substantially justified.
And you win the appeal, ever though you later lose back in the court.
The government has still made you jump over a lot of obstacles that you shouldn't have had to jump over.
Have we ever said whether... whether you can get your court attorney's fees?
Mr. Coleman: This... This Court has not addressed the question of at what point do you become a prevailing party in a Social Security case.
Unidentified Justice: Well, how we come out in this case very much depends on how we would come out in the other one, doesn't it?
I mean, if we were to say that you are entitled to your attorney's fees in the court right away, as soon as you won the appeal, then there would be less reason to say that you're entitled to attorney's fees back at the Agency, wouldn't there?
Mr. Coleman: Well, there wouldn't be less reason.
That portion of the fees are not in dispute in any event.
The government doesn't contest that for the work done to obtain the remand order we're entitled to fees.
Unidentified Justice: Well, the appeal wouldn't be over.
The appeal wouldn't be over.
You wouldn't have to await the remand in order to determine whether you could award attorney's fees.
Mr. Coleman: That's correct.
And that still would not... that still would not foreclose the argument, the position that we take in this case.
Unidentified Justice: It would make it a lot weaker.
Mr. Coleman: --In effect it would... it would be in the nature of interim award of fees, such as is done under the Civil Rights Act where fees can be obtained on an interim basis for significant successes short of actually winning on the merits.
Chief Justice William H. Rehnquist: Thank you, Mr. Coleman.
Mr. Kneedler, do you have rebuttal?
REBUTTAL ARGUMENT OF EDWIN S. KNEEDLER ON BEHALF OF PETITIONER
Mr. Kneedler: Thank you, Mr. Chief Justice.
Respondent's primary submission here is that the proceedings before the Agency on remand are somehow part of the judicial proceeding.
First of all, we think that stretches the common sense notion of what a civil action is beyond recognition.
But there is not... there is not a need to focus just on the word "civil action" here.
The whole structure of EAJA is to treat administrative proceedings separately from judicial proceedings.
When a case is remanded back to the Agency, they are, again, Agency, or administrative proceedings--
Unidentified Justice: Mr. Kneedler--
Mr. Kneedler: --not judicial proceedings.
Unidentified Justice: --would you respond to Justice Scalia's question about... would it be open to this Court, given the statutory scheme, to hold that your opponent became a prevailing party when the case was remanded?
Mr. Kneedler: No, it would not.
The legislative history on page 26 of our brief that we cite discusses--
Unidentified Justice: Say, if we don't... if we don't look at legislative history, as some of us don't like to, and just looked at the text of the statute.
Is there anything that would prohibit us from doing that?
Mr. Kneedler: --Yes, there--
Unidentified Justice: You say--
Mr. Kneedler: --is the statutory phrase "prevailing party".
The person may have prevailed on one issue, but until you know whether he prevails in any substantial way in terms of his entitlement--
Unidentified Justice: --But he's prevailed on the only issue that was adjudicated in the judicial proceeding.
Mr. Kneedler: --But he has filed a claim for benefits and he hasn't prevailed on his claim for benefits.
And the legislative history on page 26... I'm sorry to refer to it, but it's discussing cases that have construed the language "prevailing party", and Congress is essentially saying,
"We agree with those cases that give meaning to prevailing party as not including the situation where the party simply prevails in one legal issue in the case and gets sent back to the Agency. "
Unidentified Justice: Well, that's sort of an argument that the judicial proceedings are part of the administrative proceeding.
Mr. Kneedler: No, it's not.
Because it's a condition subsequent to the entitlement to benefits for the judicial proceedings.
That the person not only prevail on his legal issue, but also prevail on his overall claim for benefits.
Section 2412(d)(1)(A) itself distinguishes between judicial and administrative proceedings, and I think it's important to focus on that language.
It refers to the authorization for a court to award fees in any civil action, including proceedings for judicial review of agency action.
What's encompassed in the term "civil action" is only the judicial review of the agency action.
The agency action is something else.
And when a case gets remanded back to the Secretary, in this case the Secretary vacated the first administrative decision denying the claim, held further proceedings, and then entered a new decision on the remand.
That new decision on remand was Agency action, taken by the Secretary pursuant to statutory authority.
Unidentified Justice: I agree with all that.
But somebody who talks that way, when he says "prevailing party" probably means prevailing party in the separate civil action.
I mean, you ask us to regard them as separate for one purpose and not to regard them as separate for another purpose.
Mr. Kneedler: Well, Congress, in our view, did precisely that because the administrative proceedings are separately dealt with in Section 504, and the word "prevailing" carries two meanings here.
Prevailing on the particular issue in court and on the overall claim for benefits.
And, as I said, it's a condition subsequent, that you not only have to prevail on the legal issue the first time around in court, but also have to prevail on the claim for benefits in the main to be entitled to benefits.
Also, I'd like to point out that in Section 405(g), it does not require that the record get sent back to the court in all proceedings as if the Secretary were just a special master for the court.
The provision for certifying the record back to the court is only in a narrow sort of pre-judgment remand by the court where the case gets sent back to the Secretary to receive new evidence.
And, far from making the Secretary an agent of the court in those circumstances, that provision for sending it back to the Secretary demonstrates that the Secretary is a separate entity, not part of the court.
Chief Justice William H. Rehnquist: Thank you, Mr. Kneedler.
The case is submitted.