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ANDERSON v. SULLIVAN

September 9, 1992

HENRY ANDERSON, Plaintiff
v.
LOUIS W. SULLIVAN, M.D., Secretary of Health and Human Services, Defendant.



The opinion of the court was delivered by: HOWARD G. MUNSON

HOWARD G. MUNSON, Sr. J.

 MEMORANDUM-DECISION AND ORDER

 Presently before the court is plaintiff's application pursuant to the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d), for an award of attorney's fees and costs incurred by him in this civil action against the Secretary of Health and Human Services. The motion, returnable February 24, 1992 in Albany, New York, was taken on submission at the request of the parties. For the reasons stated below, the court shall hold plaintiff's motion in abeyance pending the Secretary's decision on remand.

 I. Background

 Briefly, plaintiff filed this action pursuant to the Social Security Act ("SSA"), 42 U.S.C. § 405(g), seeking review of the Secretary's final decision that he is not disabled for purposes of entitlement to disability insurance benefits and eligibility for Supplemental Security Income. Complaint, Document ("Doc.") 1. On December 5, 1991 the parties stipulated to remand this action to the Secretary for further administrative proceedings, and expressly designated the remand as a sentence four remand constituting a final judgment under Melkonyan v. Sullivan, 115 L. Ed. 2d 78, 111 S. Ct. 2157 (1991). The stipulation was so ordered by Magistrate Judge Ralph W. Smith and filed on December 13, 1991. Stipulated Order of Remand, Doc. 8.

 On January 14, 1992 plaintiff filed the instant application for attorney's fees, asserting that he is a prevailing party and that the Secretary's decision regarding his status was not substantially justified on procedural or substantive grounds. Tracking the language of § 2412(d)(1)(A), plaintiff also asserts that there are no special circumstances which make an award of attorney's fees unjust. Plaintiff's Motion, Doc. 9, at 5. Plaintiff contends that his counsel reasonably spent 25 hours and that an hourly rate of $ 153.93 is appropriate to reflect a 105% increase in the Consumer Price Index ("CPI") from October 1, 1981, when the statutory rate of $ 75.00 an hour was set, to July 1, 1991. Id. at 1-2. Therefore, plaintiff requests an award of $ 3,848.25 in attorney's fees and $ 37.00 in costs.

 The Secretary's opposition to the motion focuses on his contention that, although plaintiff's motion is timely filed under § 2412(d)(1)(B) and Melkonyan, the determination of whether plaintiff is a prevailing party must await the completion of the administrative proceedings on remand. Defendant's Memorandum of Law, Doc. 11, at 3. The Secretary argues that plaintiff does not attain "prevailing party" status merely because a court has remanded the action to the Secretary for further proceedings, particularly where the Secretary stipulates to the remand as in this case. If the court disagrees, however, the Secretary asserts that the hourly rate requested by plaintiff is excessive and must be reduced. The Secretary challenges plaintiff's use of the "Personal Expenses" and "Legal Services" indexes of the CPI rather than the "All Items" index to calculate the appropriate cost of living increase. Id. at 9. Citing extensive case law in support of the latter index as the proper index for adjusting the statutory rate of $ 75.00 an hour, the Secretary argues that if plaintiff's motion is granted counsel should be paid at an hourly rate of $ 108.89. Id.

 II. Discussion

 The definition of a prevailing party for purposes of an EAJA application for attorneys fees on a § 405(g) claim was well established in this Circuit and throughout the country prior to the Supreme Court's decision in Melkonyan. The Second Circuit held that "a social security claimant whose case is remanded to the Secretary for further evidence is not a prevailing party." McGill v. Secretary of Health and Human Services, 712 F.2d 28, 31 (2d Cir. 1983); see also Marziliano v. Heckler, 728 F.2d 151, 155 (2d Cir. 1984). Elaborating on this definitive ruling, the McGill court stated:

 Generally speaking, a social security claimant prevails when it is determined that she is entitled to benefits. . . . While it is true that a favorable ruling on plaintiff's procedural claim that the ALJ should have conducted a more thorough hearing may ultimately affect the outcome on the merits of plaintiff's disability claim, nevertheless, her procedural claim in not a matter on which plaintiff can be said to prevail for the purpose of shifting counsel fees.

 McGill, 712 F.2d at 31-32. The Supreme Court has also recognized that where "a court's § 405(g) remand to the Secretary for further proceedings does not necessarily dictate the receipt of benefits, the claimant will not normally attain 'prevailing party' status until after the result of the administrative proceeding is known." Sullivan v. Hudson, 490 U.S. 877, 886, 104 L. Ed. 2d 941, 109 S. Ct. 2248 (1989). Rather, "in order to be considered a prevailing party, a plaintiff must achieve some of the benefit sought in bringing the action." Id. at 887 (citing Texas State Teachers Ass'n v. Garland Independent School Dist., 489 U.S. 782, 791-93, 103 L. Ed. 2d 866, 109 S. Ct. 1486 (1989) (civil rights context)); see also Hewitt v. Helms, 482 U.S. 755, 760, 96 L. Ed. 2d 654, 107 S. Ct. 2672 (1987) (prisoner's civil rights context). The Hudson Court went on to rule that, once the result of the administrative proceeding is known, a successful claimant may receive attorney's fees both for the civil action in court and for the administrative proceeding on remand where such proceeding is "intimately tied to the resolution of the judicial action," thereby making it "part and parcel of the action for which fees may be awarded." Sullivan v. Hudson, 490 U.S. at 888. The Court noted that this is particularly so in the Social Security context where "'a formal complaint within the jurisdiction of a court of law' remains pending and depends for its resolution upon the outcome of the administrative proceedings." Id. at 892.

 In Sullivan v. Finkelstein, 496 U.S. 617, 110 L. Ed. 2d 563, 110 S. Ct. 2658 (1990), the Supreme Court only briefly mentioned the attorney's fee issue in holding that a § 405(g) remand under sentence four is immediately appealable as a final judgment. Distinguishing it's holding in Sullivan v. Hudson that the administrative proceeding on remand is "part and parcel of the action for which fees may be awarded," the Court in Finkelstein stated that this does not mean the administrative proceeding is "'part and parcel' of a civil action in federal court for all purposes." Finkelstein, 496 U.S. at 630-31. Rather, the district court's sentence four remand order is by statute a final judgment terminating the civil action, which makes it immediately appealable just as the final judgment is in any other civil action. Id. at 625, 630. Nonetheless, the Court reiterated that even if a Social Security claimant obtains a remand from the district court he "would not be a prevailing party' for purposes of the EAJA until the result of the administrative proceeding held on remand [is] known." Id. at 630 (citing Sullivan v. Hudson, 490 U.S. at 886).

 In yet another attempt to clarify the relationship between EAJA attorney's fees and remands under § 405(g), the Supreme Court last year decided Melkonyan v. Sullivan, 500 U.S. , 111 S. Ct. 2157 (1991). The Court ruled that there are only two types of remands under § 405(g), and that the correct time for filing an EAJA application depends upon the type of remand ordered by the district court. Specifically, the Court held:


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