Appeal from an order of the United States District Court for the Eastern District of New York, Joseph M. McLaughlin, Judge, awarding plaintiff attorney's fees pursuant to the Equal Access to Justice Act, 28 U.S.C. § 2412(d).
Kaufman, Pratt and Gibson,*fn* Circuit Judges.
On this appeal, we confront the question of whether a social security claimant whose case is remanded to the Secretary for the taking of additional evidence on her disability claim is entitled to an award of attorney's fees under the Equal Access to Justice Act, 28 U.S.C. § 2412(d) (Supp. V 1981)(EAJA). The district court awarded fees to plaintiff, finding that she was a prevailing party within the meaning of the EAJA and that the Secretary's position in opposing the remand was not substantially justified. Because we conclude that plaintiff has not yet prevailed on her claim on the merits, we reverse.
After the Secretary denied her application for social security benefits, plaintiff sought review in the district court pursuant to 42 U.S.C. §§ 405(g) and 1383(c). Plaintiff and the Secretary cross-moved for judgment on the pleadings. After examining the administrative record, the district judge concluded that the administrative law judge (ALJ) had failed to fulfill his duty toward pro se claimants to "'scrupulously and conscientiously probe into, inquire of, and explore all relevant facts'", Gold v. Secretary Health, Education and Welfare, 463 F.2d 38, 43 (2d Cir. 1972) (quoting Hennig v. Gardner, 276 F. Supp. 622, 624-25 (N.D. Tex. 1967)); see Echevarria v. Secretary, Health and Human Services, 685 F.2d 751, 755 (2d Cir. 1982); Hankerson v. Harris, 636 F.2d 893, 895 (2d Cir. 1980). Specifically, he found that the ALJ had failed to obtain additional medical records necessary to complete the medical evidence and had prevented plaintiff's lay witness from testifying. Accordingly, he remanded the case to the Secretary to remedy these defects.
After the remand plaintiff's counsel moved for an award of attorney's fees pursuant to the EAJA. The district judge found that the plaintiff, who had sought only a remand and not an award of benefits at the district court level, was a "prevailing party" within the meaning of the statute and that the Secretary's position was not "substantially justified". His award of $562.50 in attorney's fees precipitated this appeal.
At the outset, we note that the award of attorney's fees, although not a final order within the meaning of 28 U.S.C. § 1291, falls within the "collateral order" doctrine of Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S. Ct. 1221, 93 L. Ed. 2d 1528 (1949), and thus is appealable. Under Cohen, orders determining issues independent of the rights asserted in the action, and "separable from, and collateral to" those rights, are appealable under § 1291 before final judgment is entered. Id. at 546. In Coopers & Lybrand v. Livesay, 437 U.S. 463, 468, 98 S. Ct. 2454, 57 L. Ed. 2d 351 (1978), the Supreme Court noted that the order "must conclusively determine the disputed question, resolve an important issue completely separate from the merits of the action, and be effectively unreviewable on appeal from a final judgment." (footnote omitted).
The order meets those requirements. In Hastings v. Maine-Endwell Central School District, 676 F.2d 893 (2d Cir. 1982), we recognized that an award of attorney's fees is separate and independent from the cause of action on the merits, id. at 896; see White v. New Hampshire Department of Employment Security, 455 U.S. 445, 102 S. Ct. 1162, 71 L. Ed. 2d 325 (1982), although we held that the attorney's fee award there was not properly before us because, as an interim award for services, it was neither a final nor a conclusive determination of the disputed question (the availability of attorney's fees in a suit alleging claims under the Education for All Handicapped Children Act and 42 U.S.C. § 1983), and it would be reviewable on an appeal from the final judgment. Hastings v. Maine-Endwell Central School District, 676 F.2d at 896.
The award here, however, unlike that in Hastings, does conclusively determine the disputed issue (whether a social security claimant who obtains a remand to the Secretary for a new hearing has prevailed within the meaning of the EAJA) and may later prove to be unreviewable on appeal from a final judgment because, if plaintiff is awarded benefits at the administrative level or chooses not to seek review of a denial of benefits, there will be no further judicial proceedings on which to base a later appeal. Cf. Gold v. Weinberger, 473 F.2d 1376, 1378 (5th Cir. 1973) (court had appellate jurisdiction because district court's ruling that vocational expert had to meet personally with plaintiff would be unappealable at later date); Cohen v. Perales, 412 F.2d 44, 48 (5th Cir. 1969), rev'd on other grounds sub nom. Richardson v. Perales, 402 U.S. 389, 91 S. Ct. 1420, 28 L. Ed. 2d 842 (1971) (because district court's ruling that hearsay evidence was not substantial evidence would be virtually unreviewable after remand, order fell within Cohen doctrine). Accordingly, we conclude that we have jurisdiction to entertain this appeal.
We turn, then, to the merits. The EAJA, enacted by Congress in 1980 as Title II of Public Law 96-481, 94 Stat. 2325, authorizes both courts and federal agencies that conduct adversary adjudications to award attorney's fees to parties who prevail against the federal government, unless the government's position was "substantially justified" or there are special circumstances which make a fee award unjust. 28 U.S.C. § 2412(d)(1)(A) (judicial proceedings); 5 U.S.C. § 504(a)(1) (administrative proceedings). Briefly stated, the purpose of the statute was to lessen the likelihood that challenges to bureaucratic action would be deterred by the high cost of litigating against the government. Section 202(c)(1), Pub. L. No. 96-481, 94 Stat. 2325; H.R. Rep. No. 1418, 96th Cong., 2d Sess. 9-10, reprinted in 1980 U.S. Code Cong. & Ad. News 4984, 4988 (House Report). Although social security administrative proceedings, which are not adversary adjudications, are excluded from EAJA coverage, id. at 12, reprinted in 1980 U.S. Code Cong. & Ad. News at 4991, the statute has been found applicable to judicial review actions brought under the Social Security Act, see, e.g., Hornal v. Schweiker, 551 F. Supp. 612 (M.D. Tenn. 1982); Moholland v. Schweiker, 546 F. Supp. 383 (D.N.H. 1982); Ocasio v. Schweiker, 540 F. Supp. 1320 (S.D.N.Y. 1982); Wolverton v. Schweiker, 533 F. Supp. 420 (D. Idaho 1982); Berman v. Schweiker, 531 F. Supp. 1149 (N.D. Ill. 1982), and counsel for the Secretary conceded at oral argument that a plaintiff who is awarded disability benefits by the court would be eligible for attorney's fees under the EAJA, Tr. at 17.
Narrowly at issue on this appeal is whether plaintiff became a "prevailing party" when she obtained from the district court a remand to the Secretary to take further evidence. The Secretary argues that the award of fees to plaintiff was premature because obtaining benefits, not just a remand, is the object of a social security claimant's litigation. Plaintiff's counterargument, which the district court accepted, is that all she sought from the district court was a remand for additional evidence, and that on this she did prevail.
Congress intended that "the interpretation of the term [prevailing party] * * * be consistent with the law that has developed under existing [fee-shifting] statutes", and that a party need not necessarily litigate a case to final judgment to be "prevailing" within the meaning of the act:
The phrase "prevailing party" should not be limited to a victor only after entry of a final judgment following a full trial on the merits. A party may be deemed prevailing if he obtains a favorable settlement of his case, Foster v. Boorstin, 561 F.2d 340 (D.C. Cir. 1977); if the plaintiff has sought a voluntary dismissal of a groundless complaint, Corcoran v. Columbia Broadcasting System, Inc., 121 F.2d 575 (9th Cir. 1941); or even if he does not ultimately prevail on all issues, Bradley v. School Board of the City of Richmond, 416 U.S. 696, 94 S. Ct. 2006, 40 L. Ed. 2d 476 (1974).
In cases that are litigated to conclusion, a party may be deemed "prevailing" for purposes of a fee award in a civil action prior to the losing party having exhausted its final appeal. A fee award may thus be appropriate where the party has prevailed on an interim order which was central to the case, Parker v. Matthews, 411 F. Supp. 1059, 1064 (D.D.C. 1976), or where an interlocutory appeal is "sufficiently significant and ...