SULLIVAN v. FINKELSTEIN
Legal provision: 28 U.S.C. 1291
Argument of David L. Shapiro
Chief Justice Rehnquist: We'll hear argument now in Number 89-504, Louis W. Sullivan, Secretary of Health and Human Services v. Marilyn Finkelstein.
Mr. Shapiro: Thank you, Mr. Chief Justice, and may it please the Court:
This case raises an important question of the appealability of the district court decisions.
It is a question of importance not only in the administration of the Social Security Act, but over a wide range of administrative, rule making and adjudicatory activity.
Although this Court has never addressed this question in an administrative setting before, the question has been considered in that setting for some four decades by every court of appeals, and the vast majority of the court of appeals' decisions support appealability in the context that it is presented in this case.
In addition, in very analogous situations this Court has addressed the question of appealability in the exercise of its own jurisdiction.
And in those contexts, appealability has been upheld explicitly in the review of state court decisions under Section 1257 and implicitly in the review of court of appeals' decisions under the Hobbs Administrative Review Act, Section 2350, as in the famous Vermont Yankee decision.
Unknown Speaker: Does that section require a final judgment?
Mr. Shapiro: Yes, it does, Your Honor, with the exception of decisions granting or denying preliminary injunctive relief.
Unknown Speaker: Well, the... the regular section providing for appeal... certiorari to this Court from the Federal courts of appeals does not require a final--
Mr. Shapiro: That's correct, Your Honor.
The respondent argues in answer to our argument that the court under the Hobbs Administrative Review Act not only has jurisdiction to review final judgments under 2350 but also has general jurisdiction under 1254.
We believe that's clearly not so from the structure and language of 2350.
2350 indeed specifically adds to this Court's jurisdiction the ability to review a certified question under 1254.
We do not believe that 2350 contemplates a general authority to this Court to review a judgment of a court of appeals before or after judgment.
What it does is it puts this Court in a relationship to the court of appeals, which is the entry court of the Federal system in a situation that is very analogous to the ordinary relationship between a court of appeals and a district court.
Indeed, for this Court to grant certiorari before judgment we believe would be an exercise of original jurisdiction in violation of Article 3.
This particular case that arises before this Court involves a claim for survivor's disability benefits by the respondent.
When that claim was finally denied at the administrative level, the respondent sought judiciary review in a Federal district court.
The Federal district court held that the Secretary has made an error of law in relying solely on the listing of the impairments in the Secretary's regulations.
The district court then decided that since there had been no individualized determination of Respondent's residual functional capacity to do gainful work, the matter had to go back to the administrative agency for further proceedings.
At that point, the Secretary sought review in the court of appeals, and the court of appeals dismissed for lack of jurisdiction.
After rehearing en banc had been denied by the court of appeals over three dissents, the case was brought here for a review.
The sole question before this Court on certiorari is the appealability of the district court's decision.
We submit, in accordance with those courts... on the majority of those courts that have reviewed on the problem below, that this decision is appealable, and we believe its appealability may be upheld on either of two alternative grounds.
Unknown Speaker: --May... may I interrupt you before you go into your legal argument?
Do I correctly understand that under the direction of the district court, the administrative law judge could have made the findings that were demand... ordered by the district court and nevertheless said that the... that under the Secretary's rule, the failure to meet the... one of the listing requirements makes me deny relief, and therefore, made the findings and still ruled against the claimant?
Mr. Shapiro: I don't believe so, Your Honor, except that--
Unknown Speaker: Well what is there in the district court's opinion would have precluded that?
Mr. Shapiro: --The district court, I believe, squarely held that the... the respondent's individual residual functional capacity must be considered in order to determine whether she... whether or not she's entitled to benefits.
Unknown Speaker: Well--
Mr. Shapiro: That is, the district court--
Unknown Speaker: --Well, it's clear... it's clear, under that reasoning, the district court would have reversed the ALJ if that had been found.
But then, why couldn't you have then gone ahead and reviewed?
I don't see anything in the mandate or the order of the district court that would have foreclosed the... the Secretary from following that course of action and thus preserving his right to review.
Mr. Shapiro: --I think that the district court's decision at order was sufficiently clear, that it might be argued, although we don't rest on that branch of... of the finality doctrine.
It might even be argued that such a disregard of the district court's decision agreement could be a contempt of the district court's findings.
Unknown Speaker: Well, he didn't enter an order saying you must grant review if you make the appropriate findings... grant relief if you--
Mr. Shapiro: He... well, he directed the--
Unknown Speaker: --He didn't say that.
Mr. Shapiro: --court to hold further proceedings--
Unknown Speaker: And make findings.
Mr. Shapiro: --Yes, with respect to the residual--
Unknown Speaker: Right.
Mr. Shapiro: --functional capacity.
Unknown Speaker: Right.
Mr. Shapiro: I mean, I do think it would perhaps have been theoretically possible, although it might have subjected the agency to... or the administrative law judge to some form of contempt.
It would have involved, I take it, an automatic reversal by the district court--
Unknown Speaker: Yes.
Mr. Shapiro: --unless... and then a possibility of review.
Unknown Speaker: Correct.
And then on a--
Mr. Shapiro: That's true.
Unknown Speaker: --fuller record the court of appeals would be able to assess the... the--
Mr. Shapiro: But the record... the record--
Unknown Speaker: --the... the debate over whether the listings are an adequate response to the statutory requirements.
Mr. Shapiro: --But the record would not have added anything to the underlying question of whether the Secretary can, under his own policy and regulations, stop with the listings of the agency as it--
Unknown Speaker: Well, it would have answered this question, that the Secretary in some of these cases argues that there is no possibility of total functional... I don't have the right phrases in my... no possibility if you don't meet the listing requirement.
And this would... you'd have a specific factual determination.
But whether or not there are cases that the listings just don't... don't account for.
Mr. Shapiro: --At the agency, I think in this case, as agencies I think do in all cases, they regard themselves, and I think quite properly, as governed by the terms of the remand.
So that the agency never has contemplated the possibility.
To my mind, an agency has never deliberately undertaken to disregard a court's remand and to say, well, you told us that the listing of impairments is not enough, but we still think it is so we're coming out the same way.
Because, after all, I suppose if it happens a second time, it could happen a third time.
The case goes back to the district court.
The district court says, well, perhaps you didn't understand me, I said you must make it--
Unknown Speaker: Yeah, but there would be an appeal at that point because the district--
Mr. Shapiro: --Well, but he would... at that point, I take it, the--
Unknown Speaker: --The district court would then say, the findings having been made, you now must enter judgment allowing the claim.
Mr. Shapiro: --Oh, if the findings--
Unknown Speaker: And then... then there would be an appeal directly to the court of appeals.
Mr. Shapiro: --Yes.
Unknown Speaker: So, the first case in which the findings were favorable to the claimant, would... would do it.
There may never be such a case.
Now, your basic position on the merits is those cases will never arise.
But you're never going to let the facts be found--
Mr. Shapiro: Yes, indeed, there are--
Unknown Speaker: --to determine whether they will rise.
Mr. Shapiro: --There are two problems, Your Honor, I believe, with that approach.
The first problem is that administrative agencies do, and I think properly do, regard themselves as bound by the mandate--
Unknown Speaker: Well, I understand that argument.
But the mandate, that... that--
Mr. Shapiro: --But the... but the second point, it seems to me is that that whole process would add nothing to the consideration of--
Unknown Speaker: --Well, it will... it will answer the question whether there is the possibility of such a hypothetical ever really existing.
Because the Secretary's position is there really aren't any such cases, so if we send it back we're going to win on the facts anyway.
That's your basic legal position on the merits as I understand it.
Mr. Shapiro: --Yes, it is.
Unknown Speaker: But your... but your position on the law is that, well, we don't have... we don't have to put that to a factual test.
Mr. Shapiro: Well, I... our position is that it really is an inappropriate relationship between an administrative agency and a court for the administrative agency in effect to be required to disregard the remand in order to--
Unknown Speaker: No, merely to be required to do exactly what the remand ordered, namely make some findings of fact.
That's the only thing the remand order really required.
Mr. Shapiro: --But it was clearly remanded for further proceedings consistent with the opinion of the court.
And the court said it is not adequate to rely on the listing of impairments.
Unknown Speaker: It doesn't say for the proceedings consistent... it says for remands for further proceedings.
He's directed to make this particular inquiry and these findings.
That's all the order requires.
Mr. Shapiro: I think the agency has properly understood that it was proceedings consistent with the opinion of the court.
Unknown Speaker: Well, Mr. Shapiro, I take it that if... that if... if the... your position is that if the case goes back, it's very likely that the... and the agency lives up to the remand order, that there will be a... the... the benefits will be granted.
Mr. Shapiro: That's a distinct possibility, Your Honor.
Unknown Speaker: Well, let's assume that the Secretary, following the remand order, grants... there's benefits granted.
That's the end of the case, isn't it?
Mr. Shapiro: That's our position.
Unknown Speaker: And you can never get... you can never have it reviewed then?
Mr. Shapiro: That's right, Your Honor.
That... that has been our position consistently.
And, indeed, that is not a position that the Third Circuit questioned at all.
The Third Circuit was following a line a little bit like that of Justice Stevens, although not quite.
I think the Third Circuit said that what might happen is that the claimant would lose on remand because she would be found to have residual functional capacity.
She might then go to court and win and at that point the Secretary could appeal.
But I think the Third Circuit assumed, as we have argued, that if the case goes back on remand and findings are made in her favor with respect to her residual functional capacity, then the Secretary is not in a position to return to court for judicial review.
Unknown Speaker: Mr. Shapiro--
Mr. Shapiro: And the thing I think... excuse me... just... Justice Stevens, your question assumes that the... an agency would have to regard any findings with respect to her residual functional capacity as irrelevant to the outcome.
In order to--
Unknown Speaker: --Which is your legal position?
Mr. Shapiro: --It is our legal position.
Unknown Speaker: They say that you only look at the listing.
Mr. Shapiro: But it is not a legal--
Unknown Speaker: That's what... all the... all the Secretary would have to do is adhere to the legal position that he maintains on the merits.
Mr. Shapiro: --We believe he is not free to do that on remand--
Unknown Speaker: Well, that's--
Mr. Shapiro: --until and unless--
Unknown Speaker: --That's what, you know--
Mr. Shapiro: --the district court's decision--
Unknown Speaker: --That depends on how one reads the district court's language.
Mr. Shapiro, does the Secretary have a statutory right of appeal to the district court from a decision of an agent... of the agency board or ALJ awarding benefits?
Mr. Shapiro: --No, Your Honor.
We believe it's clear under Section 405(g) that only the claimant who is denied benefits in whole or in part, may seek review.
The first sentence of Section 405(g) says, any individual after any final decision of the Secretary, and so on, may seek judicial review of the action.
There is nothing in the statute that authorizes the Secretary to seek review from a decision in favor of the claimant and--
Unknown Speaker: Mr. Shapiro, you've said you've been consistent here.
Is it... is it the government's position that if the claimant had lost before the district court... if the district court had agreed with the Secretary... the claimant would have been able to take an appeal immediately?
Mr. Shapiro: --Your Honor, on one branch of our argument... that is, on one theory on which we support appealability... the claimant would not have been able to appeal.
Unknown Speaker: Well, pick the branch.
I mean what's... what's the government's position?
Can the claimant appeal or can the claimant not appeal?
Mr. Shapiro: With respect to the narrower argument we're making based on Cohen against Beneficial Loan, the claimant could not appeal because there is no doubt that down the line an adverse decision against the claimant would be--
Unknown Speaker: Well, but you say... you say this is a final judgment for... for purposes of appealability anyway.
So, what's the government's real position?
Can the claimant appeal or not?
Mr. Shapiro: --If the Court agrees with our argument that this is a final judgment in the fullest sense of the word that a claimant... a claimant can appeal from an adverse decision of law underlying that judgment.
Unknown Speaker: And has the government acted contrary to that position?
Mr. Shapiro: The government, as we... as we concede in brief, has not always taken that position, Your Honor.
Unknown Speaker: And... and I take it that... that answer applies to the circumstances in this case, so that if we accepted your argument on finality, she did lose in this case because--
Mr. Shapiro: Yes.
Unknown Speaker: --she was confined to the listed impairments.
Mr. Shapiro: Yes.
Unknown Speaker: So she could have appealed in this case.
Mr. Shapiro: She could have appealed the determination that she was unable to show that she had a listed impairment.
That was the determination that was adverse to her.
Just to clarify, Justice Scalia, if I may, my answer to your question, we are making two alternative arguments.
Under one of them, the Fullers' argument about finality, if that is accepted, we believe she could appeal from an adverse determination.
Unknown Speaker: Mr. Shapiro, is it possible that the statutes could be construed here to provide that the district court retains jurisdiction at the conclusion of the remand so that the government would be able to file a motion for reconsideration on the point that it's interested in at the conclusion of the remand with the district court?
Mr. Shapiro: Your Honor, we believe that that is a tenable construction of the statute, but one which we believe is quite strained and involves a very forced and, we think, unnatural reading of the statute.
Unknown Speaker: Well, it might be somewhat consistent with Sullivan against Hudson, though.
Mr. Shapiro: With respect to Sullivan against Hudson, Your Honor, which is relied thereon very heavily by the respondent, we believe that case has to be understood as a case which is quite clearly directed to the problem of finality under the Equal Access to Justice Act.
Indeed, in Sullivan and Hudson the Court specifically said that its holding with respect to the definition of a civil action and with respect to the definition of finality was addressed to EAJA.
And, indeed, EAJA contains its own definition of final judgment.
EAJA says a final judgment is a judgment that is not subject to appeal.
The concept of finality under EAJA is intimately tied to the concept of who is a prevailing party.
And this Court that has held that for EAJA purposes a claimant is not a prevailing party until her claim has been fully resolved.
So, for that purpose the Court held that the court... the district court does retain jurisdiction, that the judgment is not truly final until the case has come to an end after remand.
Unknown Speaker: Well, in... in your view was the Hudson remand under the sixth sentence of 405(g)?
Mr. Shapiro: There has been a very substantial argument between the parties about whether either this case or the Hudson case involved a sixth sentence remand.
Our view has been that this case clearly is not a sixth sentence remand case whatever the remand was--
Unknown Speaker: Well, what about the... what is your position as to the proper characterization of the remand in the Hudson case?
Mr. Shapiro: --Our view was that the remand in the Hudson was not a sixth sentence remand either.
Unknown Speaker: Well, then it was under the eighth... eighth sentence?
Mr. Shapiro: --The remand?
Well, the fourth sentence says with or without remand.
The fourth sentence refers to the possibility of a remand.
But, Your Honor, it really is not critical to our position, because, in the first place, we are not seeking to appeal the remand order as such.
And, in the second place, in response to Justice O'Connor's question even a sixth sentence remand, in our view, is not appealable by the Secretary if the remand results in a judgment for the claimant, because the seventh sentence of 405(g) specifically limits review to the review that could be given to an original determination.
And as I indicated earlier, the Secretary has no authority to appeal an original determination in favor of a claimant.
So, even if this... even if this case involves a sixth sentence remand, we don't believe that affects the ultimate outcome on the issue of finality.
And, as we explained in our reply brief and in our original brief, we don't think it's a sixth sentence remand in any event because it is not a remand either at the instance of the Secretary or because there is new material evidence.
Unknown Speaker: Mr. Shapiro, you've been talking about the... the... you know, the special application of... of 405(g).
What about under the Administrative Procedure Act generally?
And I gather you think this case has implications across the board.
Mr. Shapiro: Yes, I do.
Unknown Speaker: Is there any need for a court to remand?
Must a district court remand?
I... I... you know, the... the residual review provision of the APA says that if there's not statutory provision for review, such as exists here in 405, the action for review shall be whatever other action is available.
And traditionally, injunction mandamus, the declaratory judgment, in the district... in... whatever district court would normally have jurisdiction for those traditional actions.
In such a traditional action, would the court have to remand to the agency?
Couldn't it just issue a mandamus telling the agency head to do the thing right--
Mr. Shapiro: Yes.
Unknown Speaker: --and then the matter would--
Mr. Shapiro: Yes.
Unknown Speaker: --I always thought it was really sort of... I never knew... when I was on the court of appeals and... and we had statutory review coming to the court of appeals, I never really knew whether we should say, you know, reversed and remanded or not.
What if we didn't say remanded, what would happen?
Mr. Shapiro: I think the same proceedings would follow.
Indeed, we suggested in our opening brief that what is now frequently done in the form of remand was historically done in an action for mandamus or injunction.
And the fact that the... that the disposition now takes the form of a remand does not, in our view, affect the finality of the judgment.
Historically, it seems to be remand finds its origins in the kinds of actions you're describing, actions for mandamus or actions for injunctive relief, that clearly come to an end.
Unknown Speaker: Which... which are still referred to in the APA--
Mr. Shapiro: --Yes.
Unknown Speaker: --explicitly.
Mr. Shapiro: Yes, Your Honor.
And our position is that this case... our position we believe is buttressed by 405(g).
But it's also buttressed by the history of judicial review of administrative actions even before the APA.
And it's buttressed by the APA itself.
We would be here, I think, making exactly the same argument if this were an action under the APA and if 405(g) were not there.
We think 405(g) supports our position, but we don't believe it's essential to that position.
I would like, if I may, to address some other aspects of what I have described as our narrower argument for appealability.
That is, the argument that is based on the practical considerations of finality that were first articulated by this Court in Cohen against Beneficial Loan and since in a series of cases, including Coopers and Lybrand.
As I indicated at the outset, we agree with the vast majority of the courts of appeal--
Unknown Speaker: Is this... is this argument, Mr. Shapiro, also the one that is... is analogous to our handling of appeals from state courts in the treatment of finality there, or is this an alternate to that argument?
Mr. Shapiro: --I believe that it, in truth, it's quite analogous.
That is, to take a case, for example, like ASARCO, which was decided last term, or like Mercantile Bank against Lagdo, which was decided some years ago, these cases involved review of state court decisions in which a state court had finally adjudicated some Federal question.
And then the state supreme court had remanded it to the lower courts for further proceedings.
It was possible, of course, that when the case came back to the state supreme court, it might reconsider the Federal question it had passed on before.
But the state supreme court, as far as it was concerned, had disposed of that Federal question.
And so this Court in these cases... Lagdo and these other cases... held that for purposes of the final judgment requirement of 1257 the underlying purposes of finality had been met.
Our argument here is comparable to that and, indeed, it seems to us that the Cohen doctrine is a recognition of the applicability of that line of reasoning in the context of court of appeals review of district court decisions.
The particular requirements of the Cohen doctrine we believe are all met here.
Indeed, we don't think there can be much argument about some of them.
For example, we think it's clear that the district court was not in its own mind making a tentative decision about the error of law that the Secretary had committed.
The decision was, in the judge's mind, a conclusive one.
With respect to the second Cohen criterion, Respondent vigorously contests our argument that it does apply... the criterion that the decision in whose review is sought be separable from the merits.
We think it is undoubtedly true, indeed, as it was true, I think, in some other context like Mitchell and Forsythe... we think it is undoubtedly true that the error of law that we believe the district court made is an error that goes to the merits of the respondent's claim for benefits.
But the rationale of that separability requirement we believe is fully met here.
As we understand the Court's discussion of that requirement, it is designed to prevent courts of appeals from interfering unduly with the ongoing process of trying the case.
The trial court judge has a special role to fulfill, and premature consideration would interfere with that role.
Moreover, the Court recognizes, I think, that where the question is not separable from the merits, that what happens in the later stages may affect the view of the question for which review is now sought.
We believe that neither of those factors exists here.
In this case, the case is no longer in the trial court at all; there is no problem of interfering with the trial court's ongoing discretion; and, as I tried to indicate an answer to Justice Stevens earlier, I think the administrative agency properly views itself as bound by what the district court did.
So that nothing that happens on remand can affect the nature of the question on which review is sought.
Unknown Speaker: If your view prevails, Mr. Shapiro, and in some other case the government does not appeal, and there is a remand and the claimant then comes back, are you barred?
Mr. Shapiro: Again, Your Honor, I believe that depends on which branch of our argument is accepted.
If you accept our narrower approach that this is appealable under the Cohen doctrine, then I think under this Court's decisions, for example, Corey and the United States, the government would have the option of reserving the point for later appeal, if a fortuitous series of events made that possible.
If the Court accepts our broader argument that this is final in the truest sense... the sense that I think I was suggesting in response to Justice Scalia... then I believe that the time for appeal would have expired and the only question would be whether there is issue preclusion in a later action.
And I suspect that there very well might be.
Unknown Speaker: If we... if we accept your interpretation that it's controlled simply by the language of 405(g), the eighth sentence, is that the first alternative of which you spoke?
Mr. Shapiro: Number the 405... our argument based on 405(g), like the argument based on general principles of finality on the Administrative Procedure Act, is that the proceeding for judicial review has terminated in the fullest sense, that the judgment is truly final.
Unknown Speaker: So... so you would be barred if we accepted that rationale?
Mr. Shapiro: That's right, Your Honor.
I'd like, if I may, to reserve the rest of my time for rebuttal.
Unknown Speaker: Very well, Mr. Shapiro.
Argument of Kenneth V. Handal
Mr. Handal: Mr. Chief Justice, and may it please the Court:
Your Honor, I want to make one thing clear here.
The Secretary's original theory in this case was stated in his petition and in his opening brief.
He asked the Court to hold that a remand order under Section 405(g) was appealable as a final decision.
In his reply brief and... and now the Secretary has... has stated basically a new theory that he should be able to appeal a legal issue that accompanies a remand order in an Social Security case while the case is still within the jurisdiction of the district court.
Not only is that idea of appealing a legal issue pretty much unprecedented in... in the Court's finality jurisprudence, but, as we point out in our brief, the Secretary has no need for this overall and... and no need for it in the context of this particular case.
And most importantly, Mr. Shapiro says that Section 405(g) is not necessary to his case.
The problem with that is that what is being proposed to be done here under Section 405(g) is totally contrary to the statutory scheme that... that is laid out there.
And... and this Court last term in Sullivan v. Hudson dealt quite extensively with the statutory scheme under Section 405(g).
And I'll get to that.
The... the Secretary's new theory about appealing a legal issue here, Mr. Shapiro said that... that it is--
Unknown Speaker: Is that the Cohen v. Beneficial Loan theory?
Mr. Handal: --Well, not so much, Your Honor.
As the theory is set out in the reply brief and I believe that what Mr. Shapiro is suggesting here is simply that he can peel off the legal issue from this remand order and separate this situation out... the remand order... into two separate proceedings and thereby appeal the legal issue while the remand proceedings go back to the... to the agency.
He says that very clearly at page 19 of his reply brief.
Mr. Shapiro added that... that the vast majority of the court of appeals' decisions support the government's theory here.
There were... the courts of appeals were probably evenly split over the old theory that he should be able to appeal the remand order.
There is not a court of appeals' decision cited by the Secretary, and none that we can find, that supports the Secretary's new theory about peeling off this legal issue and... and appealing just the legal issue.
And we think clearly it's contrary to this Court's decisions, and we particularly note Chief Justice Rehnquist's opinion in the Liberty Mutual case in 1976 which--
Unknown Speaker: Well, but that--
Mr. Handal: --is cited in our brief.
Unknown Speaker: --that's entirely consistent with his position that the remand order is superfluous, that's it's really unnecessary, that the only judgment that the court made is the legal judgment here, that that's the only thing that was at issue.
And the remand is... is automatic.
What would happen, the Court finding this way, is that the agency would automatically be seized with the case once again.
Mr. Handal: Your Honor, that's what... what happens under this statute and... and... and, first of all, a reading of this district court's opinion here clearly indicates, as Justice Stevens pointed out, that the district court sent it back for the taking of additional evidence.
And... and that's what the statutory scheme is here.
Unknown Speaker: Well, suppose it hadn't?
Even if it hadn't, wouldn't... wouldn't the claimant have been entitled, given the ruling of law that the district court had made, to have the Secretary make that finding of evidence?
Mr. Handal: Under... under the new... yes, to go back.
Unknown Speaker: Even without the remand?
Mr. Handal: I don't see how... oh, if... if they--
Unknown Speaker: Suppose the court had just simply said... you know, reversed.
You know, the Secretary's decision is reversed.
And it didn't say "and remanded".
Wouldn't... you mean, this claimant would not be able to pursue her claim before the Secretary?
Mr. Handal: --No, Your Honor, the court here simply remanded the case.
They didn't reverse anything.
They sent the case back to the agency for a redetermination of benefits.
Unknown Speaker: I understand that.
Suppose instead of saying remanded it had said reversed?
The Secretary's decision is hereby set aside.
Mr. Handal: I'm not sure that would have been a final judgment either unless the court had actually entered final judgment.
The point is--
Unknown Speaker: But that's not my question.
The question is do you think the claimant would have had the right to have further proceedings before--
Mr. Handal: --Certainly, Your Honor.
Unknown Speaker: --Of course.
Mr. Handal: Yes, Your Honor.
Unknown Speaker: So, the remand is really superfluous.
Mr. Handal: But what the--
Unknown Speaker: It's... it's what happens anyway.
Mr. Handal: --But what the Secretary is claiming here is that there are somehow two separable proceedings.
And the Secretary is suggesting that the district court in this case actually affirmed the Secretary's decision on whether Mrs. Finkelstein was entitled to benefits under the listing of impairments.
And then he is suggesting that the Secretary... that the district court made another ruling on the legal issue and that that legal ruling is... is... can be taken up.
That's just not what happened.
There was only one remand order here and... and it's not superfluous in the sense that we don't know what's going to happen on the remand.
Unknown Speaker: Mr. Handal, under your view how would the government be assured of getting eventual appellate review of the issue that it's interested in... in having reviewed?
Mr. Handal: Your Honor, there are many ways.
And that is the importance of... of Section 405(g) and of the congressional scheme there.
Unknown Speaker: Well, if the claimant prevails on remand under the... the new theory of the district court, how can the government obtain review?
Mr. Handal: Your Honor, under the statute, the Secretary is actually required to go back to the district court and... and file the transcript of the proceedings on remand... after the remand proceedings before the Secretary.
And Your Honor recognized that in the Hudson opinion.
Your Honor recognized that... that the district court under this statute retains jurisdiction and... and waits for the Secretary to come back and advise the court of what happened.
And... and this gets to one of Justice White's questions.
There's... there's... the Secretary is then able to appeal from the district court's decision and can get consideration of... of the issues from the remand.
Unknown Speaker: Not... not at the time that the district court first issues its order, but after the remand proceedings are completed and the... as you say, the case is then back in the district court?
Mr. Handal: Yes, Your Honor.
Unknown Speaker: Is there a judgment entered then?
Mr. Handal: Presumably the--
Unknown Speaker: No.
Is there a judgment entered then or not?
Mr. Handal: --After the remand proceedings, yes, Your Honor.
Unknown Speaker: In the district court?
Mr. Handal: Yes, Your Honor.
Unknown Speaker: Is it... an actual judgment is filed just as--
--[inaudible] Rule 58?
Mr. Handal: Yes, Your Honor, and there's been no judgment entered so far in this case.
All the district court did was enter an order of remand, and that's something that happens quite often under this statute.
50 percent of all cases disposed of by district courts under this statute are remands.
And... and last year there were 5,000 remands alone.
It happens all the time.
Unknown Speaker: When you say there's been no order entered in this case that depends upon what you consider to be the case.
If you mean a judicial case, there was an order entered when the court reversed the agency.
Mr. Handal: Your Honor, I believe I said there--
Unknown Speaker: But if you choose to look upon it as this claimant's long battle to get money, then I suppose you're right.
There has been no order entered in the case in that sense.
Mr. Handal: --Your Honor, I believe I said that there was an order entered here.
It just wasn't a final order--
Unknown Speaker: A final order.
Mr. Handal: --or a judgment.
Unknown Speaker: Okay.
Mr. Handal: Clearly there was an order entered here, and--
Unknown Speaker: Okay.
Mr. Handal: --and that's what often happens.
Unknown Speaker: Okay.
So, then just change the word order to final judgment.
Mr. Handal: And... and Your Honor raises an interesting point about the... the claimant's entitlement to benefits.
The Secretary here is trying to make this case into some test of... of his legal theory.
That's not what this case is about.
It's about Mrs. Finkelstein trying to get her benefits.
And... and... the... the... according to the long-standing Social Security Administration policy, this district court opinion has no further reach than Mrs. Finkelstein's case.
Unknown Speaker: I... I find what you say just contrary to what... what our traditional manner of handling these cases has been.
Take a case, Abbott Laboratories v. Gardner, one of the landmark cases in administrative law which involved a rule making that was challenged under the Administrative Procedure Act, under the residual review provision of the APA.
That is, it was a suit brought for declaratory and injunctive relief.
The district court held that the FDA's rule went beyond its authority.
It was appealed to the Third Circuit and it was appealed all the way up here.
We didn't require the FB... the FDA to... to revise its rule and then the revised rule somehow to be appealed.
We allowed the appeal immediately.
And that's standard.
Mr. Handal: Your Honor--
Unknown Speaker: I find it amazing to think that... that all of these rule makings as well as adjudications have to go back to the agency and a revised rule or revised adjudication made before there can be an appeal.
It would... it would wipe off of the books an awful lot of cases that... that are already there.
Mr. Handal: --Your Honor, first of all, I'd note that in Califano v. Sanders, this Court held that there is very limited review under... under... under the APA for Social Security cases.
The statute we're dealing here is a very different animal, as this Court pointed out in Hudson.
It's a very, quote, unusual statute and we're not looking to the APA here.
Secondly, as provided in the statute in this case, Mrs. Finkelstein went to the district court seeking review of her denial of benefits, and that is specifically provided for under this statute.
She didn't seek declaratory relief.
She didn't seek injunctive relief.
She didn't try to invalidate any regulations.
And a reading of the district court's opinion and the court of appeals' opinion here clearly indicates that they didn't think any regulations were invalidated.
And then I go on to my further point that under SSA's policy this case has no further reach than Mrs. Finkelstein's benefits.
It's not going to be applied by SSA anywhere else.
This... this is a very peculiar statute and... and... it's... it's one that allows the district court to retain jurisdiction of the case.
Unknown Speaker: Why... I... you're arguing your case just on the bases of this statute and you say this statute is peculiar.
But why should we think that this statute is... is any different from what is applied elsewhere in... in judicial review of administrative action.
Mr. Handal: I... I--
Unknown Speaker: What... what indication is there that this is special?
Mr. Handal: --Your Honor, the Court said that for one thing in the Hudson case that is was, quote, an unusual statute... in that it took the district courts out of their ordinary role as, quote, administrative overseers and made them ground level participants in the administrative process.
These cases go back and forth between the district court and the agency all the time.
The... the statute is... is unusual in that in, for example, in the fourth sentence it... it gave the court the power to modify the agency decision.
The district court here, if it had wanted to, could simply have set Mrs. Finkelstein's benefits and... and then remanded the case for payment or for certification.
Unknown Speaker: What's... what's the authority for the... for that statement?
I mean, to me the word "modify" doesn't necessarily convey that.
Are there opinions from this Court saying so?
Mr. Handal: Your Honor, we... we set forth in our brief a discussion of the state of the law actually in 1939 when this statute was passed.
And the... the cases cited there indicated that when courts reviewed administrative actions they were pretty much limited to affirming or reversing the action, not to get really involved in the rate making or the setting of rates or whatever.
This statute, as the Court said in Hudson last term, allows the district courts to really get involved in the--
Unknown Speaker: Well, but I'm... I'm asking you, and I thought I had already asked you, are there cases from this Court saying that the word modify in that fourth sentence upon which you rely would give the district court the authority to simply fix Mrs. Finkelstein's benefits?
Mr. Handal: --Not specifically, Your Honor.
There are no such cases.
Unknown Speaker: Under your view of the statute under the sixth sentence, in every case of this kind the Secretary would come back and file a transcript with the district court?
Mr. Handal: Yes, Your Honor, that's the way the sixth sentence mechanism works.
Unknown Speaker: Well, but you said that this case is controlled by the sixth sentence.
At least I thought that's your position?
Mr. Handal: Yes, Your Honor, it is.
Unknown Speaker: And that in this case, and in every case like it, even of the... the claimant is the one that prevails, the Secretary goes back into the district court and files a transcript?
Mr. Handal: That's what is contemplated by the sixth sentence, and--
Unknown Speaker: But that's not what happens, is it?
Mr. Handal: --Your Honor, we understand it does happen in... in a lot of cases.
Unknown Speaker: Well, why would the Secretary go in and file a transcript in the hundreds of cases where there's a redetermination of benefits and he orders the benefits?
Mr. Handal: Your Honor, in--
Unknown Speaker: Unless it's something the district court wants to review further.
Mr. Handal: --Your Honor, the parties are able to ask for further review at that point.
In these cases what actually happens is the district court judge retains the case.
It's the same docket number.
And... and the parties often go back to the district court and the Secretary does file the transcript.
The Secretary has claimed in the lower courts--
Unknown Speaker: Well, this... under this sentence it says "shall", so I assume it's every case.
Mr. Handal: --It... it certainly does seem to require that, Your Honor.
And that's what the court... this Court said in the Hudson case, that it does require that.
Unknown Speaker: Well, that was because in the Hudson case there were further... the court retained jurisdiction.
Mr. Handal: Your Honor, we have that same situation here.
That the... automatically under this statute the case is sent back to the agency and the court retains jurisdiction.
The Secretary has agreed in this case that the sixth sentence does say it's appropriate for him to go back to the district court after the proceedings on remand.
In Hudson he conceded that he... that the district court retained jurisdiction and that he was required to do that, and so this Court held.
Unknown Speaker: Well, Mr. Handal, does the sixth sentence apply only when the Secretary makes a motion before filing an answer in the district court proceeding?
Mr. Handal: No, Your Honor.
The... clearly what we're most concerned with here is the second part of the sixth sentence which describes the remand mechanism and, as the Court said in Hudson, that mechanism applies to all remands, and it applied to the remand in that case.
The first part of the sixth sentence clearly where it says,
"and it may at anytime order additional evidence to be taken. "
that clearly applies to... to all remands.
And as Justice Stevens said, it certainly can be read as applying to this remand in this case, according to the district court's opinion.
Unknown Speaker: Excuse me.
I understand the first part of the sixth sentence to mean that the court may remand without having made a decision, which is unusual.
I mean, usually in order for this Court, for example, to remand a case we have to decide something, that there's something wrong.
We can't just remand because we don't want to decide.
And I think... isn't that what the first part of the sixth sentence allows the court to do... allows the court, upon that motion of the Secretary, to allow the Secretary to mend... mend his hold, so to speak.
Mr. Handal: That's correct.
Unknown Speaker: If the Secretary says, you know, I'm worried, I'm going to lose this case, before he files his answer, he can ask the court to send it back so he can take more evidence.
Mr. Handal: Yes, Your Honor.
That's what the first part--
Unknown Speaker: That's what the first part says.
And then the second part says, and it may at any time order... order additional evidence.
That, again, refers to pre-judgment order, right?
Mr. Handal: --That's not the way that's been interpreted, Your Honor.
It's been interpreted to mean that the Secretary... that the district court may at any time order additional evidence.
And that's what it did in this case.
Unknown Speaker: I think in its context, following after that first clause, it seems to me you... you don't think it... it only refers to ordering additional evidence to be taken before it makes its decision?
Mr. Handal: No, Your Honor.
Unknown Speaker: And there are provisions like that in rule making review statutes as well.
It's quite a common provision.
Mr. Handal: Perhaps, Your Honor.
But the way this statute has been interpreted, the second clause of that sentence refers to at any time ordering additional evidence to be taken.
In fact, Justice Blackmun, 20 years ago, in an opinion, Bohms v. Gardner on the Eighth Circuit, described all the different ways in which a district court might remand under that second clause.
I'm not sure that that's so important.
I think that the... the important thing here, though, is... is the... the mechanism that comes after the semicolon in this sentence that indicates that the parties shall... that the district court shall retain jurisdiction.
Unknown Speaker: But why... if... if it applies even to post-judgment remand, why... why is there that condition that says only upon a showing that there is new evidence which is material and that there is good cause for the failure to proceed?
Mr. Handal: Your Honor, as far as applying to post-judgment remands, I think Your Honor means remands after the claimant has answered.
Unknown Speaker: No, I mean after the court has found that the agency is wrong and it then remands.
It says, the Secretary should... should have allowed an individualized determination.
We, therefore, reverse the Secretary's decision and remand.
At that point, does clause... does sentence six apply in your view?
Mr. Handal: Yes, Your Honor.
Although the courts don't ordinarily reverse.
They simply remand the case, and that's what happened here.
In response to something that Justice White asked which is... is about how... how the Secretary could get appeal of the substantive issue in this case, I wanted to mention that the Secretary does have a number of ways in this case to get this issue considered.
What could happen is that after the proceedings on remand, the claimant may not be satisfied with... with what happened at the remand proceedings and the claimant can return to the district court.
The district court could then enter a final judgment, and the Secretary may be able to... it can then appeal all of the issues, including the issues from the remand order.
That's precisely what happened in the Second Circuit in October in Kier v. Sullivan when the Secretary had this specific issue that he's concerned about here decided after a final decision.
Unknown Speaker: Yes, but, Mr. Handal, supposing, as your opponent argues, that the... they make the additional findings in the ALJ decides there's total functional impairment or whatever the phrase... the lack of ability to engage in gainful employment and so forth... and gives the claimant the money she's finding, can the government then get review?
Mr. Handal: Yes, Your Honor, that's... that's the mechanism that I described earlier whereby the Secretary, under the statute, is... is required... if not required, the Secretary agrees that it's is appropriate... that he then go back to the district court, file the transcript of the proceedings.
A judgment could be entered, and then the--
Unknown Speaker: On what authority does he have to go back to the district court if he has ruled in favor of the claimant?
Mr. Handal: --The statute requires him to go back to the district court, Your Honor.
It does, as I believe Justice O'Connor pointed out, say shall go back to the district court.
In any event, the Secretary admits that he does in fact go back to the district court.
Unknown Speaker: You're talking about sentence six in 405(g), are you?
Mr. Handal: Yes, Your Honor.
Unknown Speaker: But supposing... supposing it was a remand under four.
You then definitely couldn't go back?
Is that right?
Mr. Handal: Your Honor, this whole idea of whether there is a remand under sentence six or sentence four is... is a phony issue.
It was an issue that the Secretary came up with when he was saying that he wanted to appeal from the remand order.
He... he interpreted the statute as though there were remands under sentence six and remands under sentence four.
Unknown Speaker: Well, let me just change the facts very slightly and see what your answer is.
Supposing the district judge... and I... it's a little ambiguous to me... had not said take additional evidence.
The district judge simply had said, make a factual finding on this particular issue that I regard as critical as a matter of law on the basis of the evidence already in the record, and that was done.
Would the Secretary then have power to review?
Could that... the sixth... sixth clearly would not apply then.
Six only applies when you take more evidence.
Is that not right?
Mr. Handal: Your Honor, the... the... it talks about the taking of additional evidence.
I think the mechanism in the second clause of the sixth sentence would clearly apply.
The Secretary would then, after the proceedings on remand, be able to go back to the district court, as would the claimant.
Unknown Speaker: xxx.
Mr. Handal: Yes, Your Honor.
Unknown Speaker: No... no provision for, in Justice Stevens' example, no new evidence.
Mr. Handal: Your Honor, the district courts have... have authority to remand aside from this statute.
This statute doesn't really give them power--
Unknown Speaker: I know it can remand.
Mr. Handal: --And... and--
Unknown Speaker: But that's exactly my question.
Is if the power to remand is exercised without supplementing it with an order to take additional evidence, just remand and make a finding on issue X.
Mr. Handal: --Yes, sir.
Unknown Speaker: And after you make the finding, enter an appropriate judgment.
And then the finding is made and the judgment... the appropriate judgment is the claimant shall... shall get her money.
Mr. Handal: We think that the second clause of the sixth sentence would apply.
Unknown Speaker: Why?
Mr. Handal: Excuse me?
Unknown Speaker: Why?
Mr. Handal: Your Honor, it says... there is a semicolon and then it says,
"and after the case is remanded. "
We... we think, and the court has indicated, that it applies to all remands.
Unknown Speaker: But it's talking about the case.
And as Secretary shall after the case is remanded.
It sounds like it is very much a continuation after the semicolon of the language in the first part of the sixth.
Mr. Handal: Your Honor, we... we don't think the first part of the sentence is exhaustive as to all the reasons that a court might remand.
Unknown Speaker: Well, but that may be so.
But surely the second part of the sentence, picking up after the semicolon, is dealing with the same material as the first unless there is some clear indication otherwise, isn't it?
Mr. Handal: Perhaps, Your Honor, but I don't see that it makes any difference.
Clearly that remand is still governed by this same mechanism.
In... in Hudson for example--
Unknown Speaker: Well, you keep saying that, but--
--You say that but the sentence simply doesn't support you.
Mr. Handal: --Your Honor, there's... there's no other place that a district court could remand under this statute but under authority of the sixth sentence.
In... in Hudson, that case--
Unknown Speaker: Well, what about four?
With or without... it says with or without remanding.
Mr. Handal: --Your Honor, that sentence clearly doesn't give the... the district court the power to remand.
Unknown Speaker: It says, the court shall have power to enter upon the pleadings and transcript or the record a judgment affirming, modifying, or reversing the decision of the Secretary with or without remanding the cause for rehearing.
You say that doesn't give the court the power to remand?
Mr. Handal: No, Your Honor, and I'm not sure it matters in these cases.
Unknown Speaker: But, you know, you're making some very technical arguments and the Solicitor General is making some very technical... but it turns out that when you're pressed on the arguments and... you offer a very literal interpretation until it doesn't support you.
And then all of a sudden, it doesn't make any difference.
You know, it could be done this way or that way.
Mr. Handal: Your Honor, what the... the fourth sentence of this statute does is it gives the district courts the power to enter a judgment.
There was no judgment entered here.
The court simply remanded.
And in... what the Solicitor General is suggesting is that the fourth sentence applies to legal error remands and the sixth sentence applies to fact remands.
It doesn't matter.
The point is that the... the mechanism in... in sentence six for the district court retaining jurisdiction applies to all remands.
And in Hudson the... what the... in Hudson--
Unknown Speaker: xxx.
Mr. Handal: --In Hudson, Your Honor.
That's what the court said.
And in Hudson the court was dealing--
Unknown Speaker: Did it say that this applies to all remands?
Mr. Handal: --Yes, Your Honor.
In... in Hudson it said--
Unknown Speaker: It said sentence six governed all remands?
Mr. Handal: --Basically, Your Honor.
Unknown Speaker: Well, when you say basically--
Mr. Handal: Yes, sir.
Unknown Speaker: --what does that mean?
Mr. Handal: Yes, Your Honor, that's what the court said.
Unknown Speaker: Did it say that in haec verba?
Mr. Handal: I'd have to look back at the opinion, Your Honor.
In sentence six--
Unknown Speaker: Do you have a page cite for that?
We have a few copies of the U.S. reports up here.
Let us have that later.
Mr. Handal: --Yes, Your Honor.
Your Honor, in... in... also in the Hudson case, it was an improper application of the vocational guidelines.
That's why the case was remanded in that case, and the court indicated that the remand mechanism applied to that case.
Just two other points, Your Honor.
On the collateral order doctrine, it's interesting that the Secretary refers to Cohen rather than this Court's decision in 1978 in Coopers and Lybrand and the decisions since that which have seriously narrowed the application of that doctrine.
We don't think that at least two of the requirements there are met.
And... and the... we think that this is not an important issue in the context of important issues as this Court has determined that.
This issue is not completely separate from the merits.
It's just a purely legal issue apart from Mrs. Finkelstein's benefits.
And also for the reasons we've pointed out, this district court order is not effectively unreviewable later on.
The Secretary can appeal it.
The Claimant can appeal it.
And the Secretary in the last six months has gotten consideration and decision of the First Circuit and the Second Circuit on the substantive issue he purported to appeal here.
And he's gotten consideration in the Fourth and the Tenth Circuits.
Your Honor, if I may,--
Unknown Speaker: Surely.
Mr. Handal: --that language is at page 2255 and the court said... quote...
"as in this case, there will often be no final judgment in a claimant's civil action for judicial review until the administrative proceedings on remand are complete. "
The court cites a Fourth Circuit decision in 1983 and then quotes from it that the procedures set forth in 42 U.S.C., Section 405(g), contemplates additional action both by the Secretary and a district court before a civil action is concluded following a remand.
The Secretary concedes that a remand order from a district court to the agency is not a final determination of the civil action and that the district court retains jurisdiction to review any determination rendered on remand.
And that's in the words of the sixth sentence.
Unknown Speaker: Thank you, Mr. Handal.
Mr. Shapiro, you have two minutes remaining.
Rebuttal of David L. Shapiro
Mr. Shapiro: Thank you, Mr. Chief Justice.
The respondent, we submit, is grossly overreading the Hudson decision and in doing so is making an argument that would allow the EAJA tail to wag a very large dog, is doing so in a way which we submit is flatly inconsistent with the language in Section 405(g) and is not in the interest of claimants at all.
The Secretary's position is that if a decision is rendered for the claimant on remand, it is necessary to file the necessary... the papers in court in order that a determination of fees may be made under EAJA.
The Secretary believes that there is no right on his part to obtain judicial review of a decision--
Unknown Speaker: In every case where there's been a remand, must the Secretary file something in the... in the district court?
Mr. Shapiro: --Under 405(g), Your Honor, we believe that only in those cases covered by sixth sentence, however,--
Unknown Speaker: All right.
So, your answer is no, it's not in every case.
Mr. Shapiro: --Not under 405(g).
But under EAJA it may be necessary where the claimant prevails in order--
Unknown Speaker: Well, I understand that.
Mr. Shapiro: --Yes, that's right.
Unknown Speaker: I understand that.
But in a case that's not governed by the sixth sentence, must the Secretary--
Mr. Shapiro: No.
Unknown Speaker: --before the case is over must the Secretary file something and get a judgment of the court?
Mr. Shapiro: No, Your Honor.
We think that--
Unknown Speaker: Well, your opponent says that in every case that is the case.
Mr. Shapiro: --Well, I think he's wrong.
Unknown Speaker: Plain and simple.
Mr. Shapiro: Not only that, but I think the position he's taking is not in the interest of claimants because he is suggesting a much broader ability of the Secretary to obtain review of a decision in favor of the claimant than the Secretary believes he has under the Act.
Moreover, I think it clearly is in the interest of claimants to allow an appeal at this stage because if the court of appeals agrees with the district court and upholds the district court's decision that will establish the law of the circuit.
And the Secretary's acquiescence policy will then be that either the Secretary will seek further review in this Court or will acquiesce in the Third Circuit's decision and all future decisions will be governed by that holding.
Chief Justice Rehnquist: Thank you, Mr. Shapiro.
The case is submitted.