Petition for Writ of Certiorari — Petrone v. Sullivan

U.S.

preme Court,

wie ; LED

Nov? 1991

IN THE

Supreme Court of the United Statgeicc of we oom

OCTOBER TERM, 1991

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JOAN PETRONE,

Petitioner,

V.

LOUIS W. SULLIVAN, SECRETARY

OF HEALTH AND HUMAN SERVICES,

Respondent.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Ninth Circuit

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Brian Wolfman

(Counsel of Record)

Alan B. Morrison

Leslie A. Brueckner

Public Citizen Litigation Group

Suite 700

2000 P Street, N.W.

Washington, DC 20036

(202) 833-3000

John Ohanian

Suite 765

6381 Hollywood Blvd

Los Angeles, CA 90028

(213) 462-5540

November 7, 1991

QUESTION PRESENTED

In a disability case that was remanded to the Social Security

Administration because of a change in the law favorable to the

claimant, did the court err in denying attorney’s fees under the

Equal Access to Justice Act on the ground that the claimant had

not “prevailed” in the litigation, even if (1) the claimant ultimately

received disability benefits; (2) such benefits could not have been

obtained without the lawsuit; and (3) the government’s position

was not substantially justified?

TABLE OF CONTENTS

TABLE OF AUTHORITIES .nccccsscssccscsccscrsssoese dbcksnmelade peel iil

COPTITIOOING BIO ossssecccsssisessscescsscsocicssansonssnassnsssstnosisenassennesiasanes l

FUT IN ccsonniissnssensessssessesssnesoossnssssniosacsnisonsreansinansesssanassansne 2

STATUTORY PROVISION INVOLVED ...........:ccccceeseteeeeteees 2

STATEMENT OF THE CASE ..........ccccccccsccosccssorsasscercsessssessnsesees 2

REASONS FOR GRANTING THE WRIT ..........cccceeeceeeteeeteees 6

A. THERE IS A DEEP SPLIT IN THE

CIRCUIT COURTS ON AN IMPORTANT

AND RECURRING ISSUE. .............scscsccssssssssseseesees 6

B. THE DECISION BELOW IS AT ODDS

WITH THE PURPOSES OF THE EAJA

AND OTHER FEE-SHIFTING STATUTES

AND WITH PRIOR DECISIONS OF THIS

COORTIRT « scocssscssunisasccessindsupsatsishaaincnimsnddntacneponasdiaatie 10

COIN on sseiscsctnsnesenencessascsensisnnsenssonnilinmacsssniasammaeiannsaiites 14

TABLE OF AUTHORITIES

Cases: Page:

Andrew v. Bowen, 837 F.2d 875 (9th Cir. 1988) ..........cccccccceeesees 4

Brouwers v. Bowen, 823 F.2d 273 (8th RUSE D cicsaccemvsiinidbinsiaic 9

Commissioner, INS v. Jean, 110 S. Ct. 2316 (1990) .........cccceseeee 11

Goodro v. Bowen, 854 F.2d 313 (8th Cir. 1988) .0..........cccccccceeeee 8

Gowen v. Bowen, 855 F.2d 613 (8th Cir. 1988) ..........0.cccccccsceseeoes 8

Guglietti v. Sec'y of HHS, 900 F.2d 397 (1st Cir.

ESE ESE 6, 7, 10, 13

Hagans v. Lavine, 415 U.S. 528 (1974) .......ccccsccssssesessesessesessesesees 13

Hendricks v. Bowen, 847 F.2d 1255 (7th Cir.

gO EES AS TCT AD 6, 7, 8, 11, 12

Hensley v. Eckerhart, 461 U.S. 424 (1983) ....c.ccccccccccccsesseseseeceeeees 13

Hewitt v. Helms, 482 U.S. 755 (1987) .........ccccscessesessessesesseeee 10, 13

Hyatt v. Heckler, 807 F.2d 376 (4th Cir. 1986) ........0..c.ccscese0e-. 7,8

Kelly v. Bowen, 862 F.2d 1333 (8th Cir. 1988) ........0...cceccsseeceseeeees 8

Lopez v. Sullivan, 882 F.2d 1533 (10th Cir. 1989) 02.0... 8

Maher v. Gagne, 448 U.S. 122 SENSES eo 13

Mosely v. Hairston, 765 F. Supp. 915 (S.D. Ohio 1991) ............ 10

Nadeau v. Helgemoe, 581 F.2d 275 (Ast Cir. 1978) .........cccccccoee. 11

Patti v. Schweiker, 669 F.2d 582 (9th Cir. 1982) .........cc.ccccecces0e0 12

iv

Perket v. Sec'y of HHS, 905 F.2d 129 (6th Cir. 1990) ....... 7, 8, 10

Pierce v. Underwood, 487 U.S. 552 (1988) ........:.:c:sssseeseseseseeeeees 11

Rhoten v. Bowen, 854 F.2d 667 (4th Cir. 1988)... 8

Robinson v. Bowen, 867 F.2d 600 (10th Cir. 1989), affg

RF Tre Ci I ID iccsetitecicsccicttchenetseninsccinn 7

Sullivan v. Zebley, 110 S. Ct. 885 (1990) .......c.cccccecesseeseeseeeeeseeeeeeees 9

Texas State Teachers Association v. Garland Independent

School District, 489 U.S. 782 (1989) .........:cccceceseeeseees 11, 13

Truax v. Bowen, 842 F.2d 995 (8th Cir. 1988) 2.0.0.0... 7,8

Wells v. Bowen, 855 F.2d 37 (2d Cir. 1988) ..........ccccccceseeeeseeeeees 12

Zebley by Zebley v. Bowen, 855 F.2d 67 (3d Cir. 1988) ............... 9

Statutes, Laws, and Regulations:

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a UN secs tecenicensincaiitecea Sohcleiapieetcslalensaebcciniaheniadiniapanainot 3

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A i EE ceiticaitsesantsicansncscntanenragaeiesenenbiiaignbianincancabinabanestccins 3

A a setietecisciscarietinscniniaienaeeenidpctdeiatanichsanbitachsdenianiioaabsaniecs 5

Pub. L. No. 99-80, 99 Stat. 186 (1980)(28 U.S.C. § 2412

SO ssaldasclieicniceeceasesitieinsedoaliiicteespeiapnesentinepplaiiotindianiecibiosidssensininds 12

The Equal Access to Justice Act, 28 U.S.C. § 2412(d) ....... 2, 11

Social Security Disability Reform Act of 1984, 98 Stat.

1794 (1984)(42 U.S.C. § 423 note)... eeeeeeeseeeeeee 3, 4,5

20 C.F.R. §§ 416.924-924f (1991)

Miscellaneous:

H. Rep. No. 98-618, 98th Cong., 2d Sess. ( 1984), reprinted

in 1984 U.S. Code Cong. & Admin. News 3038

IN THE

Supreme Court of the United States

OCTOBER TERM, 1991

No. 91-

JOAN PETRONE,

Petitioner,

Vv.

LOUIS W. SULLIVAN, SECRETARY

OF HEALTH AND HUMAN SERVICES,

Respondent.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Ninth Circuit

PETTTION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

OPINIONS BELOW

The opinion of the United States Court of Appeals for the

Ninth Circuit is reported at 936 F.2d 428 (9th Cir. 1991), and is

reproduced in the appendix at 1a-7a. The recommendation of the

magistrate and the order of the United States District Court for

the Central District of California concerning attorney’s fees are

reproduced in the appendix at 8a-19a, and 20a-21a, respectively,

and are not reported. The district court’s judgment on the merits

is reproduced in the -_ 24a-29a, and is not reported.

tv

JURISDICTION

The judgment of the court of appeals was entered on June 14,

1991. The decision of the court of appeals denying rehearing and

the suggestion for rehearing en banc was entered on August 12,

1991 (22a-23a). This Court has jurisdiction under 28 U.S.C. §

1254(1).

STATUTORY PROVISION INVOLVED

The Equal Access to Justice Act, 28 U.S.C. § 2412(d),

provides in pertinent part:

(1)(A) Except as otherwise specifically provided by

statute, a court shall award to a prevailing party other

than the United States fees and other expenses, in

addition to any costs awarded pursuant to subsection

(a), incurred by that party in any civil action (other than

cases sounding in tort), including proceedings for jud)-

cial review of agency action, brought by or against the

United States in any court having jurisdiction of that

action, unless the court finds that the position of the

United States was substantially justified or that special

circumstances make an award unjust.

STATEMENT OF THE CASE

The issue in this case is whether a plaintiff who has obtained

disability benefits under the Social Security Act, as a direct result

of her federal court lawsuit challenging the termination of those

benefits, may be denied attorney’s fees under the Equal Access to

Justice Act (“EAJA”) on the ground that she is not a “prevailing

party” solely because there was an intervening change in the law

that was favorable to her. That precise issue -- and, more

generally, the important question of whether, and in what circum-

stances, a change in the law can prevent a victorious plaintiff from

obtaining attorney’s fees under federal fee-shifting legislation --

has divided the circuit courts and, therefore, warrants this Court’s

attention.

a |

On February 16, 1966, petitioner Joan Petrone applied for

Social Security disability insurance benefits under 42 U.S.C. §

423(d) and was found to be disabled as of July 31, 1963, on the

basis of schizophrenia, depression, paranoia, and other psychotic

disorders, including a history of nervous breakdowns (Adminis-

trative Record (“AR”) 76). Petitioner also applied for, and

received, Supplemental Security Income (“SSI’’) disability bene-

fits in 1976, shortly after that program became law (2a).

In 1982, respondent Secretary of Health and Human Serv-

ices (the “Secretary”) reviewed petitioner’s disability case and

determined that her disability had ceased in October 1982 be-

cause of improvements in her medical condition (id). Petitioner

appealed the Secretary’s decision to an administrative law judge

(“ALJ”), who upheld the Secretary’s decision (AR 9-14). The

Appeals Council affirmed the ALJ’s decision, thus making the

ALJ’s decision the final decision cf the Secretary (AR 3-4).

On March 27, 1984, petitioner filed a complaint in the

United States District Court for the Central District of California,

pursuant to 42 U.S.C. § 405(g), seeking judicial review of the

decision to terminate her disability benefits. After the Secretary

filed an answer and the administrative record, petitioner filed a

motion for summary judgment and supporting brief. Without

ruling on that motion, the district court, with the consent of the

parties, remanded the case to the Secretary for further review

pursuant to section 2(d)(2) of the Social Security Disability

Reform Act of 1984 (“Reform Act”), 98 Stat. 1794, 1797 (1984)(42

U.S.C. § 423 note)(see 2a). That section required that all pending

cases concerning cessation of disability benefits, in a category

known as “medical improvement” cases, be remanded to the

Secretary for reevaluation.

On November 2, 1988, nearly four years after the remand,

the Secretary informed petitioner that she was entitled to disabil-

ity benefits for the period from December 1982 until November

1984, but that after that date no benefits were payable because of

petitioner’s work and earnings, not because of any improvement

in her medical condition (26a). Thereafter, the district court

entered judgment in favor of petitioner (24a-25a) for 28 addi-

tional months of benefits, amounting to an award in excess of

$10,000 (26a).

On November 28, 1988, petitioner filed an application for an

award of EAJA attorney’s fees in the district court. The Secretary

opposed the application on the ground that petitioner was not a

“prevailing party” because it was Congress that had altered the

situation by enacting the Reform Act and that no claimant could

be a prevailing party if his or her case had been remanded under

that Act. The Secretary also contended that, even if petitioner was

not automatically prevented by the Reform Act from being a

prevailing party, the agency’s position had been “substantially

justified,” and she was not entitled to EAJA fees for that reason.

The matter was referred to a magistrate who recommended that

petitioner’s fee application be denied for the sole reason that the

petitioner was not a “prevailing party” within the meaning of the

EAJA (8a-18a). The magistrate noted a split in authority among

district courts, but sided with the only two circuit courts of appeals

that had then addressed the issue. Those courts had held that

claimants whose benefits were restored after having their cases

remanded under the Reform Act had not prevailed in the litiga-

tion (13a). The district court noted its agreement with the recom-

mendation and denied fees in a one-line order (20a).

The court of appeals affirmed in a split decision, holding that

“a plaintiff whose victory results from a change in the law is [not]

a prevailing party within the meaning of the EAJA” (2a). The

opinion began by looking to the standard set out in Andrew v.

Bowen, 837 F.2d 875 (9th Cir. 1988), where the Ninth Circuit held

that a plaintiff who settles a lawsuit favorably has prevailed under

the EAJA if there is a “clear causal relationship” between the

lawsuit and the settlement (3a).

Petitioner argued that this test had been satisfied because,

had she not filed her lawsuit, she would not have obtained a court

remand and reinstatement of her disability benefits (id). The

court recognized that this was true (id., citing Reform Act, 98 Stat.

at 1797), but held that petitioner had not prevailed because her

victory came from Congress, not in the courtroom (3a). The court

of appeals also declined to accept the “catalyst” theory, /e., that

petitioner’s lawsuit, along with many others pending around the

nation, motivated Congress to enact the Reform Acct (id. ), on the

ground that such a theory was too speculative and that “no clear

causal relationship can be shown to this particular suit” (id). The

majority recognized that its ruling, whose effect is automatically

to deny fees to any claimant whose case was remanded, no matter

how meritorious the claim may have been, was at odds with recent

decisions in three circuits, but sided with what it termed “the

earlier and better view” of three other circuits (3a-4a).

Judge O’Scannlain dissented. He began by reviewing the

background to the Reform Act, noting that, as a general rule,

disability benefits may be terminated if there is substantial evi-

dence that the disability no longer exists (4a). See 42 U.S.C. §

423(f). The Secretary’s interpretation of the law prior to 1980, the

dissent explained, was that disability benefits could only be termi-

nated if the Secretary showed that the beneficiary’s condition had

improved since the prior finding of disability (4a). In 1980,

however, the Secretary administratively abandoned this “medical

improvement” standard, opting instead for a “current disability”

standard, thereby shifting the burden onto the recipient to show

that he or she continued to be disabled (id).

This new policy was challenged in many lawsuits nationwide,

prompting Congress to enact the provisions of the Reform Act at

issue here (id). The Reform Act took a middle ground, placing the

burden neither on the recipient to prove continued disability nor

on the Secretary to show medical improvement, but providing that

terminations must be based on substantial evidence of medical

improvement (id). See 98 Stat. 1794-95. In addition, in recogni-

tion of the fact that the Secretary had imposed what many courts,

and now Congress, had determined to be an impermissible

burden on recipients, the Reform Act required that all “medical

improvement” cases pending on September 19, 1984, both class

actions and individual cases such as petitioner’s, be remanded to

the Secretary for further consideration (4a-Sa). See 98 Stat. at

1797.

Judge O’Scanniain explained that, in addition to the majority

here, three circuits had held that an individual who won reinstate-

ment after a remand under the Reform Act may never be said to

have “prevailed” in the litigation for EAJA purposes (5a). A

second view, endorsed by two circuit courts and by Judge Breyer,

dissenting in Guglietti v. Sec'y of HHS, 900 F.2d 397 (1st Cir. 1990),

is that, by bringing the lawsuit “that enabled retroactive applica-

tion of the Reform Act,” the plaintiff has prevailed under the

EAJA (6a). Finally, Judge O’Scannlain described and embraced

the “inevitable victory” approach, adopted by three circuit courts

and by Judge Easterbrook, concurring in Hendricks v. Bowen, 847

F.2d 1255 (7th Cir. 1988), under which the plaintiff has “pre-

vailed” if benefits would have been restored even if the Reform

Act had not been enacted (6a). The dissent noted that this

approach avoids both rewarding lawyers because of a chance

event -- the Reform Act -- and “the equally unfortunate result of

failing to compensate claimants who have brought meritorious

lawsuits” (id).

Judge O’Scannlain thus would have remanded the case to

the district court for a determination of whether petitioner would

have prevailed in the absence of the Reform Act and, if so,

whether the position of the government had been substantially

justified (id). If both questions were resolved in petitioner’s favor,

he noted, she should be awarded fees (7a).

REASONS FOR GRANTING THE WRIT

A. THERE ISA DEEP SPLIT IN THE CIRCUIT

COURTS ON AN IMPORTANT AND RECURRING

ISSUE.

As the dissent recognized, there is a deep split in the courts

of appeals concerning whether a successful plaintiff in a disability

action must automatically be denied EAJA fees if that plaintiff's

case was sent back to the Secretary pursuant to the mandatory

remand provisions of Section 2 of the Reform Act. In itself, this

ever-widening split on this important issue calls for resolution by

this Court. Moreover, the question presented here is more

fundamental: whether a party, who has obtained exactly what she

sought in her lawsuit, may be denied fees solely on the ground that

there has been a change in the law favorable to her, although she

would have been successful even if the law had never changed and

even though she would have won nothing at all if she had not filed

her lawsuit.

1. In addition to the majority here, two courts of appeals

have held that, under no circumstances, may a plaintiff “prevail”

for EAJA purposes if that plaintiff's disability case was remanded

under Section 2 of the Reform Act. See Guglietti v. Sec'y of HHS,

900 F.2d 397, 400-03 (1st Cir. 1990); Hendricks v. Bowen, 847 F.2d

1255, 1258 (7th Cir. 1988). These cases hold that it is necessary to

prove a causal relationship between the plaintiff's suit and the

reinstatement of disability benefits, and that, because the Reform

Act intervened, such a causal relationship can never be estab-

lished.

Other judges have rejected this per se denial approach,

relying on two different theories. The Sixth Circuit has held that

the filing of a successful lawsuit for disability reinstatement,

because it is a necessary predicate for winning such reinstate-

ment, itself bestows prevailing party status. Perket v. Sec'yof HHS,

905 F.2d 129, 134-35 (6th Cir. 1990); accord Guglietti, 900 F.2d at

405-08 (Breyer, J., dissenting); Truax v. Bowen, 842 F.2d 995, 997-

99 (8th Cir. 1988)(Heaney, J., dissenting); see also Hyatt v. Heckler,

807 F.2d 376, 382 (4th Cir. 1986)(in class action challenging

“medical improvement” standard, Secretary’s argument that

Reform Act barred EAJA fees rejected because filing of case was

“but-for” cause of relief for named plaintiffs and class). The

judges espousing this view have also noted that the filing of the

lawsuit and the enactment of the Reform Act were not unrelated

events, but that the Reform Act wasa reaction to the filing of many

lawsuits nationwide, which would include the particular case in

which fees were being sought. E.g., Guglietti, 900 F.2d at 405; see

H. Rep. No. 98-618, 98th Cong., 2d Sess. 9-13 (1984), reprinted in

1984 U.S. Code Cong. & Admin. News 3038, 3046-3050.

Alternatively, four circuits have held that a claimant who has

achieved reinstatement, and would have done so absent the

Reform Act, has prevailed within the meaning of the EAJA.

Perket, 905 F.2d at 133-34; Robinson v. Bowen, 867 F.2d 600 (10th

Cir. 1989)(per curiam), aff, 679 F. Supp. 1011, 1014-15 (D. Kan.

1988); Gowen v. Bowen, 855 F.2d 613, 617 n.3 (8th Cir. 1988);

Rhoten v. Bowen, 854 F.2d 667, 670 (4th Cir. 1988); accord Lopez

v. Sullivan, 882 F.2d 1533, 1537 (10th Cir. 1989); Hendricks, 847

F.2d at 1259 (Easterbrook, J., concurring).

2. While the merits of most Reform Act cases have by now

wended their way through the administrative process and the

federal courts, and even the fees portion of many of those cases

is complete, this Court should resolve the deep split among the

circuits to clarify the law for the Secretary and those fee applicants

who have yet to have their applications finally adjudicated. The

fact that some circuits have just recently decided this issue, see, e.g.

Perket, supra, and that five circuits have yet to weigh in, suggests

that there are Reform Act cases for which fee applications are still

pending or have yet to be filed. See, e.g., Brief for Appellee

[Secretary], at 8-10, Marquez v. Sullivan, No. 91-3703 (filed 6th

Cir. Oct. 18, 1991)(Secretary urging court of appeals to deny fees,

despite Perket, because of intervention of Reform Act). More-

over, the problem here is not only that many Reform Act plaintiffs

who have won their benefits have lost any chance for a fee,

although that is an important problem worthy of this Court’s

attention. More generally, the split that divides the courts of

appeals is, as the Ninth Circuit correctly framed it, whether a

plaintiff whose victory coincides with a favorable change in the law

can ever be considered a “prevailing party” under this or any other

fee-shifting statute (2a).

That issue arises not infrequently and will continue to do so

in many contexts. A recent change in disability law, although one

% As indicated in the text, the Sixth Circuit in Perket has endorsed both theories for

potential EAJA recovery, 905 F.2d at 133-35, as has the Fourth Circuit in Hyatt and

Rhoten. In Truax v. Bowen, 842 F.2d 995 (8th Cir. 1988), the Eighth Circuit

appeared to embrace the same approach taken by the court of appeals here. See

also Goodro v. Bowen, 854 F.2d 313 (8th Cir. 1988). However, in Gowen v. Bowen,

855 F.2d 613 (8th Cir. 1988), that court clearly endorsed the “inevitable victory”

theory, and distinguished Truax on the ground that the claimant in Gowen would

have won “irrespective of the Reform Act of 1984.” 855 F.2d at 617 n.3; accord

Kelly v. Bowen, 862 F.2d 1333, 1337 n.4 (8th Cir. 1988). Thus, the decision below

seems to be in error in suggesting that the Eighth Circuit denies fees to Reform Act

plaintiffs in all circumstances (4a).

prompted by a lawsuit, not Congressional action, illustrates our

point. In Sullivan v. Zebley, 110 S. Ct. 885 (1990), this Court

declared invalid the Secretary’s regulations that had required

applicants for children’s SSI disability benefits to show that their

conditions met a specific impairment, based on medical evidence

alone, rather than allowing them to present evidence similar to

the vocational evidence that can be used to support an adult’s

disability claim. /d. at 892-95. The Secretary has now agreed to

a remand in every children’s disability case for reassessment

under new regulations promulgated in the wake of Zebley. Stipu-

lation and Order, 11 C., page 3, Zebley v. Sullivan, No. 83-3314

(E.D. Pa. March 14, 1991); see 20 C.F.R. §§ 416.924-924f (1991).

Under the Ninth Circuit’s approach here, EAJA fees will be

denied in all of the individual actions pending nationwide --

because there is no “clear causal relationship” between the

individual action and the victory in Zebley -- even if the chiiuren

in those individual cases win their benefits on remand, even if they

would have done so in the absence of the new regulations, and

even if the Secretary’s position was totally unreasonable in those

cases. Under an “inevitable victory” theory, however, the court

must look to whether a child’s claim would have been successful

regardless of the remand, for instance, where victory was preor-

dained by precedent rejecting the Secretary’s pre-Zebley

interpretation, see Zebley by Zebley v. Bowen, 855 F.2d 67, 75 n.4

(3d Cir. 1988)(listing cases), or because the claim met the stan-

dards of the pre-Zebley children’s disability regulations.

We use the Zebley example primarily because of its magni-

tude: numerous individual pending actions will be remanded

under the stipulation for reconsideration in light of the new

regulations. Unless resolved by this Court, the EAJA question in

those cases will confound the courts in precisely the same way that

the Reform Act has in deciding whether to award attorney’s fees

here. This example is only illustrative of the broader issue that

divides the circuit courts -- an issue which will inevitably recur

whenever an intervening change in the law arguably forms the

basis for a court’s decision in a plaintiffs favor. Compare Sa (no

fees where there has been intervening change in law), with

Brouwers v. Bowen, 823 F.2d 273, 275 (8th Cir. 1987)(where some

10

intervening events contributed to plaintiffs’ victory, prevailing

party status may be denied only where intervening event was sole

cause of victory). Cf. Mosely v. Hairston, 765 F. Supp. 915 (S.D.

Ohio 1991)(no fees where court of appeals held case moot

because of favorable change in law, even though district court had

entered judgment for plaintiffs). This Court should grant review

to resolve this important question.

B. THE DECISION BELOW IS AT ODDS WITH THE

PURPOSES OF THE EAJA AND OTHER FEE-SHIFT-

ING STATUTES AND WITH PRIOR DECISIONS OF

THIS COURT.

Both of the theories that permit EAJA fees following Re-

form Act remands are preferable to the strict non-recovery rule

endorsed by the court of appeals. The Ninth Circuit’s approach,

which requires a fee applicant to prove that his or her suit, in itself,

was the catalyst for Congressional action, will almost invariably

result in a denial of fees because, as the majority noted (3a), the

pendency of one suit among many will almost never cause Con-

gress tow hange the law. Such arule runs counter to Congressional

intent in enacting fee-shifting statutes such as EAJA andis at odds

with the teachings, if not the actual holdings, of this Court’s prior

decisions.

1. As we have indicated, Perket v. Sec'y of HHS, 905 F.2d at

134-35, holds that a claimant whose case was remanded under the

Reform Act has prevailed by filing the lawsuit that ultimately

resulted in the reinstatement of benefits. See also Hyatt, 807 F.2d

at 382. As Judge Breyer remarked in dissent in Guglietti, “as a

matter of ordinary English usage” such a claimant has “‘pre-

vailed,’” because “she did get the relief that she wanted... [and]

her legal action was a necessary condition for obtaining it.” 900

F.2d at 405; see Hewitt v. Helms, 482 U.S. 755, 761 (1987).

We believe that this view best comports with EAJA’s pur-

poses since it accords prevailing party status to a plaintiff who has

opposed faulty government action and achieved the desired

result. A contrary rule places all the costs on the winning party,

even where the government's position has been unreasonable, thus

OO

11

diminishing the value of the plaintiff's “victory” and defeating

EAJA’s purposes of “‘curbing excessive regulation and the unrea-

sonable exercise of Government authority.’” See Comm’, INS v.

Jean, 1108. Ct. 2316, 2322 (1990)(quoting H. Rep. No. 96-1418, p.

12(1980)). Moreover, Judge Breyer’s reasoning is consistent with

this Court’s “‘generous formulation” of the “prevailing party”

rule asa general matter. Texas State Teachers Ass'n v. Garland In-

dependent School Dist., 489 U.S. 782, 792 (1989)(quoting Nadeau

v. Helgemoe, 581 F.2d 275, 279 n.3 (1st Cir. 1978)). See discussion

infra at 13.

At first blush, this approach appears to be very generous to

a fee applicant such as petitioner, because she would have “pre-

vailed” for fees purposes even if she were merely “a fortuitous

beneficiary” of Congressional action, ie. she won only because of

such action. Hendricks, 847 F.2d at 1259 (Easterbrook, J., concur-

ring). But since fees will not be awarded if the government can

show that its position was substantially justified, 28 U.S.C. §

2412(d)(1)(A), fortuitous beneficiaries will be weeded out be-

cause a lack of substantial justification presupposes that the

government would have lost its case. See Pierce v. Underwood, 487

U.S. 552, 564-66 (1988); Hendricks, 847 F.2d at 1261. Thus, in

practice, there will be little if any difference in outcome between

the Perket approach and that which requires a plaintiff to show

that victory was inevitable without the change in law.

However, Judge Easterbrook’s “inevitable victory” analysis

aptly illustrates the arbitrariness of the result reached below. For

instance, a medical improvement case decided favorably to a

claimant on the day prior to the effective date of the Reform Act

could well result in an award of fees, while, under the Ninth

Circuit’s decision, an otherwise identical case decided the next

day would not result in a fee award under any circumstances. 847

F.2d at 1260. Indeed, this is precisely what happened to many

claimants. /d. (citing cases). More arbitrary still is the example of

two disability cases filed on the same day in, say, 1983, that could

have different results on the fees question, solely because one case ~

had been decided by a “prompt” judge prior to the Reform Act’s

effective date, while the other had drawn a judge whose docket

was Clogged, thus allowing the Reform Act to intervene. See id. In

12

the former situation a victorious claimant’s attorney might well

obtain a fee from the government, but in the latter situation the

claimant would expend a good portion of her hard-won benefits

on attorney’s fees even though “[i]t was to prevent this sort of

diminution by unreasonable governmental action that the EAJA

was enacted.” /d.

For many claimants, such as petitioner, fees are withheld

from the claimant’s past-due benefits for payment to his or her

attorney by the Secretary pursuant to 42 U.S.C. § 406, although

that fee must be returned to the claimant to the extent that an

EAJA fee is awarded. Pub. L. No. 99-80, § 3, 99 Stat. 186 (28

U.S.C. § 2412 note). See Wells v. Bowen, 855 F.2d 37, 42 (2d Cir.

1988). Therefore, the Ninth Circuit would give a “medical im-

provement” plaintiff, whose victory arrived prior to the Reform

Act, a greater net benefit than an otherwise identically-situated

plaintiff who won after a Reform Act remand. This is more than

a little ironic since “[i]t was because Congress suspected that

many of the terminations of disability benefits had been unrea-

sonable that the Reform Act was enacted.” Hendricks, 847 F.2d

at 1260 (Easterbrook, J., concurring). Thus, the purposes of both

the Reform Act and the EAJA have been harmed by the Ninth

Circuit’s decision.

2. The facts of petitioner’s case epitomize the unfairness of

the Ninth Circuit’s approach. Petitioner challenged the Secre-

tary’s termination on numerous grounds, not the least of which

was the ALJ’s plainly erroneous conclusion that petitioner had

returned to substantial gainful employment. Compare ALJ’s

Decision, AR 13, with AR 125-26. Most of the reasons presented

by petitioner in the district court for outright reversal -- which we

believe was warranted -- had nothing to do with the Secretary’s

standard in medical improvement cases. See generally Memoran-

dum of Points and Authorities in Support of Plaintiff's Motions,

Petrone v. Heckler, No.CV 84 2000 ER(T)(C.D. Cal. filed Sept. 21,

1984). Petitioner also argued that the Secretary had ordered a

cessation of benefits in violation of Patti v. Schweiker, 669 F.2d 582

(9th Cir. 1982), a case not inconsistent with the balance ultimately

struck in the Reform Act. Thus, under Patti alone, it appears

almost certain that petitioner would have obtained an outright

13

reversal, or at least a remand, regardless of whether the Reform

Act had been enacted.

In fact, the Secretary has conceded that the ALJ’s decision

was probably erroneous and would have required a remand under

binding case law that pre-dated the Reform Act. See Brief for

Appellee [Secretary] at 6 n.6, Petrone v. Sullivan, No. 89-55732

(9th Cir. filed Dec. 27, 1989). The Secretary has also made clear

that petitioner’s reinstatement resulted from consideration of her

age and her many years out of the work force (id. at 13) -- factors

that petitioner had argued required reversal, and that have

nothing to do with the standards set out in the Reform Act. The

point here, of course, is not so much that petitioner would have

won absent the Reform Act -- although that is her position -- but

that the court of appeals did not even consider that possibility,

thus undermining the beneficent purposes of both the Reform

Act and the EAJA.

3. The court of appeals’ decision is also inconsistent with the

prior rulings of this Court defining a “prevailing party” for fee-

shifting purposes. In Hensley v. Eckerhart, 461 U.S. 424, 440

(1983), the Court made clear that a plaintiff is considered a pre-

vailing party whenever he or she succeeds on any significant issue

in the litigation that achieves some of what was sought in bringing

the suit. Having received more than two years of disability

benefits that petitioner would have lost had she not filed suit, this

standard has been met here, as it was in the other Reform Act

cases. See also Texas State Teachers Ass'n, 489 U.S. at 792-93

(plaintiff has prevailed if material relationship between parties

altered); Guglietti, 900 F.2d at 405 (Breyer, J., dissenting). The

$10,000 award in petitioner’s favor was surely the “stuff of which

legal victories are made.” Hewitt, 482 U.S. at 760.

This Court has also considered the effect of events outside

the courtroom on this traditional “prevailing party” formulation.

In Maher v. Gagne, 448 U.S. 122 (1980), the Court held that a

plaintiff prevails for attorney’s fees purposes when a case is settled

favorably, provided that his or her claims were sufficiently sub-

stantial to support federal jurisdiction. /d at 131 (citing Hagans

v. Lavine, 415 U.S. 528 (1974)); accord Maher, 448 U.S. at 134

14

(Powell, J., concurring). It would be ironic indeed if a settled case

could result in fees simply where the underlying claim is non-

frivolous, but that a clearly meritorious claim, such as petitioner’s,

could never result in an award of fees, as the Ninth Circuit has held

here.

CONCLUSION

For the reasons stated above, the petition for writ of certio-

rari should be granted.

Respectfully submitted,

Brian Wolfman

(Counsel of Record)

Alan B. Morrison

Leslie A. Brueckner

Public Citizen Litigation Group

Suite 700

2000 P Street, N.W.

Washington, DC 20036

(202) 833-3000

John Ohanian

Suite 765

6381 Hollywood Blvd

Los Angeles, CA 90028

(213) 462-5540

November 7, 1991

la

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JOAN PETRONE,

Plaintiff-Appellant, No. 89-55732

D.C. No.

CV-84-2000-ER

V.

SECRETARY OF HEALTH AND

HUMAN SERVICES,

Defendant-Appellee.

OPINION

ee ee

Appeal from the United States District Court

for the Central District of California

Edward Rafeedie, District Judge, Presiding

Argued and Submitted

December 4, 1990-Pasadena, California

Filed June 14, 1991

Before: J. Clifford Wallace, Chief Judge,

Diarmuid F. O’Scannlain and Pamela Ann Rymer, Circuit

Judges.

Per Curiam

CPINION

PER CURIAM:

Petrone timely appeals from a district court order denying his

[sic] petition for attorney fees under the Equal Access to Justice

2a

Act, 28 U.S.C. § 2412 (EAJA). The district court had jurisdiction

pursuant to 42 U.S.C. § 405(g). We have jurisdiction pursuant to

28 U.S.C. § 1291. Because we find Petrone is nota prevailing party

within the meaning of the EAJA, we affirm.

I

In 1966 and again in 1976, Petrone applied for disability

insurance benefits and supplemental security income benefits.

She was awarded these benefits and received them until Decem-

ber 1982, when the Secretary of Health and Human Services (Sec-

retary) determined her eligibility had ceased. Petrone appealed

to an administrative law judge, who affirmed the Secretary’s de-

termination. The appeals council also affirmed, and Petrone then

sought judicial review in the district court.

While her case was pending in the district court, Congress

enacted the Social Security Disability Benefits Reform Act of

1984, Pub. L. No. 98-460, 98 Stat. 1794 (Reform Act). The Reform

Act required the district court to remand Petrone’s case to the

Secretary for reconsideration in light of new eligibility standards.

See id. at 1797-98 (mandating the remand of all actions seeking

judicial review of termination decisions relating to “medical

improvement” pending on September 19, 1984). Applying the

new standards on remand, the Secretary reinstated Petrone’s

benefits through August 1984. Petrone then timely filed a petition

for attorney fees pursuant to the EAJA.

I]

The EAJA provides for an award of attorney fees to a pre-

vailing party in a civil action brought against the United States,

unless the position of the United States was substantially justified

or unless special circumstances make an award unjust. 28 U.S.C.

§ 2412(d)(1)(A). The question presented by Petrone’s appeal is

whether a plaintiff whose victory results from a change in the law

is a prevailing party within the meaning of the EAJA. Although

an order granting or denying attorney fees under the EAJA is

reviewed for an abuse of discretion, the question before us is

solely legal, subject to de novo review. See Kali v. Bowen, 854 F.2d

3a

329, 331 (9th Cir. 1988).

The question has been previously open in this circuit. How-

ever, in Andrew v. Bowen, 837 F.2d 875 (9th Cir. 1988), we

considered a similar issue: whether a plaintiff who settles before

final judgment can be a prevailing party. We required a “clear

causal relationship” between the litigation and the settlement. /d.

at 877, quoting McQuiston v. Marsh, 790 F.2d 798, 800 (9th Cir.

1986). We therefore require a clear causal relationship between

Petrone’s lawsuit and her reinstatement of benefits.

[1] Two theories have been suggested to fulfill the causation

requirement. First, Petrone asserts, correctly, that she would not

have qualified for mandatory remand if her lawsuit had not been

filed. See Reform Act, 98 Stat. at 1797. But Petrone did not win

reinstatement in the courtroom; she won because Congress

changed the law. “[Petrone] was a fortuitous beneficiary, and

serendipity is not a reason for rewarding lawyers.” Hendricks v.

Bowen, 847 F.2d 1255, 1259 (7th Cir. 1988) (Hendricks) (Easter-

brook, J., concurring).

[2] Second, she asserts that her lawsuit, and others like it,

provided a “catalyst” for congressional action. This contention is

far too speculative to receive recognition. There is no record in

this case from which we could divine congressional motivations.

Even if we assumed that lawsuits such as this one catalyzed the

Congress, no clear causal relationship can be shown to this

particular suit. Accordingly, we hold Petrone is not a prevailing

party within the meaning of the EAJA.

[3] Petrone argues that attorney fees may be awarded because,

but for the intervention of the Reform Act, she would have been

awarded fees; therefore, we should remand for a fee determina-

tion hearing. We disagree. We recognize this holding may be

inconsistent with Perket v. Secretary of Health and Human Services,

905 F.2d 129, 133-34 (6th Cir. 1990), Rhoten v. Bowen, 854 F.2d

667, 670 (4th Cir. 1988), and Robinson v. Bowen, 679 F.Supp. 1011,

1014-15 (D. Kan. 1988), aff'd per curiam, 867 F.2d 600 (10th Cir.

1989). We are persuaded, however, by the earlier and better view

of the First, Seventh, and Eighth Circuits, rejecting an award of

4a

attorney fees in these circumstances. See Guglietti v. Secretary of

Health and Human Services, 900 F.2d 397, 400-03 (1st Cir. 1990);

Hendricks, 847 F.2d at 1258; Truax v. Bowen, 842 F.2d 995, 997 (8th

Cir. 1988).

AFFIRMED.

O’SCANNLAIN, Circuit Judge, dissenting:

I respectfully dissent.

I

As a general rule, disability benefits may be terminated when

~ evidence shows that the disability has ceased. See 42 U.S.C. §

423(f). Prior to 1980, the Secretary of the Department of Health

and Human Services employed the “medical improvement” stan-

dard to make this determination; under this standard, the Secre-

tary would not find that a disability had ceased unless the claim-

ant’s condition had improved since the last determination of

disability. Rhoten v. Bowen, 854 F.2d 667, 668 (4th Cir. 1988). In

1980, the Secretary announced that he had abandoned the medi-

cal improvement standard and, in its place, established a “current

disability” standard pursuant to which benefits were terminated

if it was found, on the basis of new evidence, that the person was

not presently disabled. Jd.

Many Social Security disability benefit recipients filed suit in

tederal courts challenging the new regulations. See, e.g., Johnson

v. Heckler, 606 F. Supp. 82 (S.D.N.Y. 1984); Turner v. Heckler, 592

F. Supp. 599 (N.D. Ind. 1984); Graham v. Heckler, 573 F. Supp.

1573 (N.D. W. Va. 1983); Lopez v. Heckler, 572 F. Supp. 26 (C.D.

Cal. 1983). Thereafter, prompted at least partially by these

numerous district court actions, Congress enacted the Social

Security Disability Benefits Reform Act of 1984 (“Reform Act”).

See Rhoten, 854 F.2d at 669 & n. 1. The Reform Act did not

establish a presumption of continuing disability. However, it did

provide that terminations must be based on substantial evidence

of medical improvement. In addition, the Reform Act specifically

provided for automatic remand of all requests for judicial review

Sa

pending on September 19, 1984. See id.

Unfortunately, Congress apparently did not consider the rela-

tionship between this automatic remand provision and the Equal

Access to Justice Act (““EAJA”), 28 U.S.C. § 2412. Needless to

say, Claimants whose benefits were restored upon remand sought

attorney’s fees under the EAJA. Courts have since grappled with

the question of whether such claimants are “prevailing parties”

within the meaning of the EAJA.! Three theories have been

proposed. Under the first theory, claimants who received benefits

as a result of the Reform Act’s automatic remand provision can

never be prevailing parties, as the “clear causal relationship”

between the lawsuit and the relief is lacking. In addition to the

majority here, this reasoning has been endorsed by the First

Circuit, see Guglietti v. Secretary of HHS, 900 F.2d 397 (1st Cir.

1990), the Seventh Circuit, see Hendricks v. Bowen, 847 F.2d 1255

(7th Cir. 1 988), and the Eighth Circuit, see Truax v. Bowen, 842

F.2d 995 (8th Cir. 1988).

The second theory is the obverse of the first; under this view,

a claimant may be a prevailing party for purposes of the EAJA

simply by bringing the lawsuit that enabled retroactive application

of the Reform Act. See Perket v. Secretary of HHS, 905 F.2d 129

(6th Cir. 1990); Guglietti, 900 F.2d at 405-08 (Breyer, J., dissent-

ing). The rationale for this viewpoint was encapsulated by Judge

Breyer.

In my view, the following circumstances make it proper,

as a matter of ordinary English usage, as well as a

matter of law, to say that the claimant “prevailed” in

her legal action. First, she did get the relief she wanted.

Second, her legal action was a necessary condition for

her obtaining it... . Third, the outside event - the

Congressional action - was not an unrelated, extra-

lIn order to receive attorney's fees under the EAJA, the requester must be a

prevailing party, the government’s position cannot be substantially justified, and

no special circumstances may exist that would make such an award unjust. See Bay

Area Peace Navy v. United States, 914 F.2d 1224, 1230 (9th Cir. 1990).

6a

judicial event. Rather, Congress acted, in part, because

this claimant, and other claimants similarly situated,

had filed lawsuits.

Guglietti, 900 F.2d at 405 (Breyer, J., dissenting) (citations omit-

ted).

The third theory is an intermediate approach, aptly entitled as

the “inevitable victory” theory. See Perket, 905 F.2d at 133. Under

this theory, a claimant is a prevailing party under the EAJA if she

would have otherwise prevailed in the absence of the Reform Act.

Id.;see also Lopez v. Sullivan, 882 F.2d 1533, 1537 (10th Cir. 1989);

Rhoten, 854 F.2d at 670; Hendricks, 847 F.2d at 1259 (Easterbrook,

J., concurring) (“An award is both appropriate and necessary

when the claimant would have prevailed in his quest for benefits,

and would have recovered fees, had the Reform Act never

existed.”). |

It is this latter approach which I believe we should adopt today.

This approach avoids the problem of rewarding lawyers for mere

“serendipity.” See Hendricks, 847 F.2d at 1259 (Easterbrook, J.,

concurring). However, it also avoids the equally unfortunate

result of failing to compensate claimants who have brought

meritorious lawsuits. See id. at 1261 (““When the EAJA otherwise

would have required the government to pay, ... the creation of a

new entitlement in the Reform Act should not make the claimants

worse off.”). Indeed, this approach best harmonizes Congress’s

objectives in both the Equal Access to Justice Act and the

Disability Benefits Reform Act.

I]

In the present case, the district court concluded that a disability

claimant who received benefits as a result of passage of the

Reform Act could not be a prevailing party under the EAJA.

Applying the “inevitable victory” theory, I would remand this case

to the district court to determine whether Petrone would have

prevailed in the absence of the Reform Act. If so, the district court

should next determine whether the government’s position was not

substantially justified. If both of these inquiries are resolved in

Ta

Petrone’s favor, I believe she should be entitled to attorney’s fees

under the Equal Access to Justice Act.

8a

FILED

APR 10, 1989

CLERK, S. DISTRICT

CENTRAL

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

JOAN PETRONE,

Plaintiff, No. CV 84-2000-ER(T)

¥.

REPORT AND RECOMMEN-

DATION RE MOTION FOR

ATTORNEY’S FEES UNDER

THE EAJA

OTIS R. BOWEN, M.D.,

Secretary of Health and

Human Services,

Defendant.

— ee ee ee ee ee ee ee ee ee” ee ee” Se”

This Report and Recommendation is submitted pursuant to

the provisions of 28 U.S.C. §636(b)(1)(B) and General Order No.

194 of the United States District Court for the Central District of

California.

Plaintiff, through counsel, has filed a Motion for Attorney’s

Fees seeking an award under the Equal Access to Justice Act

9a

(hereinafter “EAJA”), 28 U.S.C. § 2412(d). Defendant, the

Secretary of Health and Human Services, has filed an opposition

to the plaintiff's motion.

Oral argument in the matter was held before the Magistrate

on March 20, 1989.

BACKGROUND

Plaintiff applied for disability insurance benefits in Febru-

ary, 1966 and was found disabled. (Administrative Record,

hereinafter “A.R.,” pages 76-81). Plaintiff applied for Supple-

mental Security Income (hereinafter “SSI””) benefits in Decem-

ber, 1976 and was, again, found disabled and entitled to benefits.

(A.R. 11-82). Based upon a continuing disability review, the

Secretary found that plaintiff's disability had ceased as of Octo-

ber, 1982 and her benefits were terminated at the close of

December, 1982. (A.R. 106). Plaintiff appealed the Secretary’s

decision. An administrative Searing was conducted in April,

1983. After the hearing, but prior to the issuance of the decision

of the Administrative Law Judge (hereinafter “ALJ”), plaintiff

was advised of her options to seek another review of her case as

10a

required by this District Court’s decision regarding continuing

disability reviews. (A.R. 15-16). Plaintiff elected to continue with

the hearing process. (A.R. 120). By decision dated October 19,

1983, the ALJ found that plaintiff's condition had improved and

that her disability had ceased as of October, 1982. (A.R. 13-14).

Plaintiff sought review of the ALJ’s decision and the Social

Security Appeals council affirmed the ALJ by decision dated

February 27, 1984. (A.R. 3-4). Plaintiff then sought judicial

review of the Secretary’s decision.

Plaintiff filed a Complaint in this Court seeking review of the

Secretary’s unfavorable decision and defendant answered the

Complaint. The Court ordered the parties to submit motions for

summary judgment. Plaintiff filed a Motion for Summary Judg-

ment arguing that the Secretary’s decision was not supported by

substantial evidence. Defendant requested and received an

extension of time to determine the effect of the Social Security

Disability Benefits Reform Act of 1984, Pub.L. No. 98-460, 98

Stat. 1794 (1984), (hereinafter “the Reform Act”). The Secretary

determined that the case was affected by the Act and required

lla

review of plaintiff's case under new medical improvement stan-

dards. Defendant submitted a proposed stipulation to remand

the case for further proceedings to plaintiff's counsel. Plaintiff's

counsel agreed to the remand of the case, and the court ordered

the case remanded.

Upon remand, plaintiff's claim to benefits was not only

reviewed under the provisions concerning medical Speen,

but also under Section 5(c) of the Reform Act, providing for new

mental impairment regulations. (See Defendant’s Opposition,

Exh. A.) The Secretary issued a partially favorable decision on

November 2, 1988. Plaintiff's disability benefits were resumed

effective December, 1982. However, no benefits were payable

after November, 1984 because of plaintiff's work activity and

earnings. Plaintiff's disability benefits were terminated, effective

May, 1985, because the Secretary determined that plaintiff was

able to work. As to plaintiff's recovery, a prior overpayment of Six

Thousand Five Hundred and Eleven Dollars ($6,511.00) was

recovered and plaintiff received a check for Two Thousand Six

Hundred and Ninety-Two Dollars and Fifty Cents ($2,692.50).

12a

(See Judgment, Exh. A). The District Court entered a Judgment

for plaintiff on February 9, 1989, reflecting the disposition of the

case.

Plaintiff, through counsel, now moves this Court for an

attorney’s fee award of Five Thousand Six Hundred and Thirty-

Five dollars and Fifty Cents (5,635.50) under the EAJA. Plain-

tiff's counsel, petitioner herein, alleges that the requested award

represents 47.56 hours at an hourly rate of One Hundred Twelve

dollars and Fifty Cents ($112.50); Sixty Dollars ($60.00) for

payment of the Court’s filing fee; and, Two Hundred Twenty-Five

Dollars ($225.00) for the two hours needed for preparation of the

instant motion. Defendant opposes plaintiff's Motion for Attor-

ney’s Fees under the EAJA.

DISCUSSION

Under the EAJA, the Court must award fees to a prevailing

party unless the government can demonstrate that its position was

“substantially justified” or that special circumstances would make

a fee award unjust. 28 U.S.C. § 2412(d)(1)(A).

A. Prevailing Party Status

13a

The threshold inquiry in any claim to attorney’s fees under

the EAJA is whether the party seeking fees is a prevailing party.

That inquiry is particularly difficult in the instant case because

olaintiff succeeded in this action, not because of the issues raised

in her Motion for Summary Judgment, but because her case was

remanded at the request of the defendant and reviewed under the

new standards established by the Reform Act.

The Ninth Circuit Court of Appeals has not addressed the

specific issue of whether a successful remand mandated by the

Reform Act qualifies a plaintiff as a prevailing party. Other

federal courts of appeals decisions, using a “catalyst” or causa-

tion” theory, have found that a plaintiff who is successful on

remand due to review under the Reform Act is not a prevailing

party. See Hendricks v. Bowen, 847 F.2d 1255, 1258 (7th Cir.

1988); Truax v. Bowen, 842 F.2d 995, 997 (8th Cir. 1988). The

decisions of the district courts on this issue have varied. Compare

Cruz v. Bowen, 668 F.2d 669, 673-74 (Utah 1987) (litigant not

prevailing party); McCarroll v. Bowen, 661 F.Supp. 1163, 1164

(N.J. 1987) (same); Mathus v. Bowen, 661 F.Supp. 241, 242 (N.D.

l4a

Ill. 1987) (same) with Robinson v. Bowen, 679 F.Supp. 1011, 1014-

15 (Kan. 1988) (litigant was prevailing party); Gruber v. Bowen,

673 F.Supp. 970, 973-74 (W.D. Wis. 1987) (same); Vitale v.

Secretary of Health and Human Services, 673 F.Supp. 1171, 1177

(N.D. N.Y. 1987) (same).

The only Ninth Circuit cases to discuss prevailing party

status under the EAJA within the social security benefits context

have been those cases where the case has not yet gone to final

judgment. See Escobar v. Bowen, 857 F.2d 644 (9th Cir. 1988);!

Andrew v. Bowen, 837 F.2d 875 (9th Cir. 1988);? Swensen v.

Escobar concerned an overpayment allegation where plaintiff was successful in

obtaining a remand of the case based upon her allegation that she was deprived of

her right to counsel at the administrative hearing. However, she was not yet

successful on the merits of the action. The court found that she was not a successful

party because “even a significant procedural victory which implicates substantive

rights is not sufficient to make a party a prevailing party under EAJA.” Escobar,

857 F.2d at 646, relying on NLRBv. Doral Guilding Services, Inc. 680 F.2d 647 (9th

Cir. 1982).

2 In Andrew, plaintiffs filed a class action seeking to enjoin the Secretary from

utilizing his procedural manuals which operated to deny Supplemental Security

Income (“SSI”) benefits to individuals owning Alaskan commercial fishing per-

mits. The District Court granted a preliminary injunction. Since the Secretary then

published regulations which found that commercial fishing licenses were explicitly

excluded from a determination of income, the plaintiffs in Andrew requested that

the Court dismiss the action. The District Court dismissed their action and

plaintiffs sought EAJA fees. Reversing the District Court’s decision denying the

fee request on substantial evidence grounds, the Ninth Circuit found that the

plaintiffs were prevailing parties because they secured the relief they sought in

bringing suit and because there was a legal basis for plaintiffs’ claims. Andrew, 837

F.2d at 875.

1Sa

Heckler, 801 F.2d 1079 (9th Cir. 1986.3

While these cases are not directly on point since there has

been a final judgment in plaintiff's case, the Court’s analysis in

Andrew is instructive. In Andrew, the Court found that a two-part

test for determining prevailing party status when a case has not yet

gone to final judgment was acceptable. A party seeking to

establish prevailing party status must demonstrate that: (1) asa

factual matter, the relief sought by the lawsuit was in fact obtained

as a result of having brought the action; and, (2) there was a legal

basis for the plaintiff's claim. Andrew, 837 F.2d at 877, citing

California Association of Physically Handicapped, Inc. v. FCC,

721 F.Sd 667, 671-72 (9th Cir. 1983), cert. denied, 469 U.S. 832,

105 S.Ct. 121, 83 L.Ed.2d 63 (1984).

Under the first level of inquiry, the Court must identify what

the lawsuit originally sought to accomplish and what relief was

actually obtained. Id. The Court must then determine whether

> In Swenson, plaintiff had secured a remand from the District Court to allow the

Secretary an opportunity to rebut plaintiff's prima facie case of disability. Before

the remand process was completed, plaintiff applied for EAJA fees. Relying on

the Ninth Circuit's decision in Escobar Ruiz v. INS, 787 F.2d 1284 (9th Cir. 1986),

the Court found that plaintiff was not a prevailing party. Swenson, 801 F.2d at 1080

l6a

there exists a “clear causal relationship between the litigation

brought and the practical outcome realized.” McQviston_v.

Marsh (““McQuiston II’), 790 F.2d 798, 800 (9th Cir. Cir. 1986)

(citing American Constitutional Party v. Munro, 650 F.2d 184, 188

(9th Cir. 1981)). Andrew, 837 F.2d at 877.

Under the second inquiry, the Court determines whether

there was a legal basis for the claim. This inquiry requires a

limited review of the merits to determine whether the claims

asserted are “frivolous, unreasonable, or groundless, or [whether]

the plaintiff continued to litigate after [they] became so. Andrew,

837 F.2d at 878, quoting Ortiz de Arroyo v. Barcelo, 765 F.2d 275,

282 (1st Cir. 1985).

The first inquiry, requiring a causal relationship, is consis-

tent with other Ninth Circuit decisions where the case had gone

to final judgment but some intervening act put into question

whether the party seeking fees was a prevailing party. See Oregon

Environmental Council v. Kunzman, 817 F.2d 484, 497 (9th Cir.

1987) (inquiry whether suit was “at least a material factor or

played a catalytic role in bringing about the desired result”); Ward

17a

v. County of San Diego, 791 F.2d 1329, 1334 (9th Cir. 1986) (a

clear, causal relationship between the litigation brought and the

practical outcome realized required).

The standard used by the Ninth Circuit is nearly identical to

the standard used by those federal courts of appeals decisions

which have decided the issue of prevailing party status after a

successful remand based on the Reform Act. See Hendricks, 847

F.2d at 1258 (lawsuit must play “provactive role” in securing

result); Truax, 842 F.2d at 997 (“catalyst approach”).4

In the instant case, remand was ordered on request of the

Secretary pursuant to the mandate of the Reform Act and not

pursuant to the relief plaintiff had originally requested. The

Court did not make even a preliminary determination of the

adequacy of the Secretary’s denial of plaintiff's benefits or the

substantiality of the evidence supporting the Secretary’s decision.

4-The standard established by the various circuit courts of appeals is not so far afield

from the ordinary determination of prevailing party status in a non-social security

case context. In Hensley v. Eckerhart, a case involving a fee request under 42 U.S.C.

§ 1988, the United States Supreme Court noted that a typical formulation of the

“prevailing party” standard is that “plaintiffs may be considered ‘prevailing parties’

for attorney’s fee purposes if they succeed on any significant issue in litigation

which achieves some of the benefit the parties sought in bringing suit.” 461 U.S.

424, 433, 103 S.Ct. 1933, 1939, 76 L.Ed.2d 40 (1938) [sic: 1983].

18a

In fact, a review of the issues raised by the plaintiff's Motion for

Summary Judgment reveals no challenge to either the Secretary’s

standards for finding medical improvement or the Secretary’s

mental health regulations. Plaintiff requested remand of her case

but not for review under new standards. Rather, she requested

remand for consideration of new and material evidence.

Under such circumstances, it cannot be found that plaintiff's

suit has played a catalytic role, was a material factor, or even

established a causal relationship with plaintiff's receipt of benefits

after remand. As defendant has noted, the Secretary’s decision

that plaintiff had improved was eventually enforced. Therefore,

under the circumstances of this case, the Magistrate finds that

plaintiff is not a prevailing party as required by the EAJA.

B. Substantial Justification, Special Circumstances, and Exces-

sive Fees

Because the Magistrate finds that plaintiff has not estab-

lished that she is a prevailing party, it is unnecessary to address the

other issues presented by the Motion for Attorney’s Fees, ie., the

19a

substantial justification of the government’s position, special

circumstances making an award unjust, and plaintiffs counsel’s

request for an hourly fee of One Hundred Twelve Dollars and

Fifty Cents ($112.50).

CONCLUSION

The Magistrate concludes that plaintiff is not a prevailing

party and is not, therefore, entitled to attorney’s fees under the

EAJA.

Accordingly, the Magistrate recommends that the plaintiff's

Motion for Attorney’s Fees under the EAJA be denied.

DATED: April 10, 1989

ls/

VENETTA S. TASSOPULOS

United States Magistrate

20a

LODGED

APR 10 1989 FILED

CLERK, U.S. District MAY 18 1989

CENTRAL DISTRICT OF C

wal CLERK, U.S. DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

BY DEPUTY

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

JOAN PETRONE,

Plaintiff No. CV 84-2000-ER(T)

a

SECRETARY OF HEALTH ) ORDER RE ATTORNEY’S

AND HUMAN SERVICES, FEES

)

)

Defendant. )

)

The Court has reviewed the Motion for Attorney’s Fees

under the Egual Access to Justice Act, the attached Report and

Recommendation of Magistrate, and the objections thereto.

IT IS ORDERED that the Motion for Attorney’s Fees

under the Equal Access to Justice Act is denied.

IT IS FURTHER ORDERED that the Clerk shall serve

2la

copies of this Order and the Report and Recommendation of

Magistrate by United States mail on counsel for the parties

herein.

DATED:_May 18, 1989

/s/

EDWARD RAFEEDIE

United States District Judge

THIS CONSTITUTES NOTICE OF ENTRY

AS REQUIRED BY FRCP, RULE 77(d)

ENTERED

MAY 24 1989

CLERK, U.S. DISTRICT COURT

CENTRAL DISTRICT OF CAL

FILED

AUG 12 1989

CATHY A. CATTERSON, CLERK

U.S. COURT OF APPEALS

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JOAN PETRONE, ) No. 89-55732

)

Plaintiff-Appellant, _) D.C. No.

) CV-84-2000-ER

VS. )

)

SECRETARY OF HEALTH )

AND HUMAN SERVICES, ) ORDER DENYING

) PETITION FOR

Defendant-Appellee. _ ) REH ING

)

Appeal from the United States District Court

for the Central District of California

Before: WALLACE, Chief Judge, O'SCANNLAIN and RY-

MER, Circuit Judges.

Judges Wallace and Rymer have voted to deny the

23a

petition for rehearing. Judge O’Scannlain has voted to grant the

petition for rehearing. The panel has voted unanimously to reject

the suggestion for rehearing en banc.

The full court has been advised of the suggestion for

rehearing en banc, and no judge of the court has requested a vote

on the suggestion for rehearing en banc. Fed. R. App. P. 35(b).

The petition for rehearing is denied, and the sugges-

tion for rehearing en banc is rejected.

24a

ROBERT C. BONNER ENTERED

United States Attorney CLERK, U.S. DISTRICT COURT

FREDERICK M. BROSIO, JR.

Assistant United States Attorney FEB 9 1989

Chief, Civil Division alates

BRIAN C. KIPNIS ee omnane

Assistant United States Attorne

1100 United States Courthouse

312 North Spring Street

Los Angeles, California 90012

Telephone: (213) 894-2439

Attorneys for Defendant

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

JOAN PETRONE, )

) No. CV 84-2000-ER(T)

Plaintiff, )

) JUDGMENT;

v. ) RECOMMENDATION OF

) MAGSTRATE; AND

OTIS R. BOWEN, M.D., ) ORDER THEREON

Secretary of Health )

and Human Services, )

)

Defendant. )

)

The Court, having remanded this matter to the Secretary of

Health and Human Services for further proceedings; and it

appearing to the Court that the Secretary has issued a determina-

tion partially favorable to plaintiff, a copy of which is attached

hereto as Exhibit A; now, therefore, IT ISHEREBY ORDERED

that Judgment is entered in favor of plaintiff affimring the

Secretary’s determination that plaintiff's disability ceased in

August 1984 and that her eligibility for benefits ceased effective

25a

November 1985, upon expiration of her reentitlement period,

under the provisions of sections 216(i) and 223 of the Social

Security Act, as amended.

DATED: This __30 _ day of _ January _, 1989

ROBERT C. BONNER

United States Attorney

FREDERICK M. BROSIO, JR.

Assistant United States Attorney

Chief, Civil Division

By J/s/

BRIAN C. KIPNIS

Assistant United States Attorney

RECOMMENDATION OF MAGISTRATE

IT Is SO RECOMMENDED this 31st day of January , 1989.

/s/ Vanetta S. Tassopulos

UNITED STATES MAGISTRATE

ORDER

IT IS SO ORDERED this 7. day of February , 1989.

/s/ Edward Rafeedie

UNITED STATES DISTRICT

JUDGE

26a

[EXHIBIT A]

SOCIAL SECURITY STRATION

Northeastern Program Service Center

Flushing, New York 11368

Date: November 2, 1988

Claim Number : 083-20-2602 HA

Joan Petrone

9001 Rangely Av

Los Angeles CA 90048

Your disability benefits have been resumed effective December

1982. Your rates are as follows:

December 1982 $432.70

December 1983 447.80

December 1984 483.40

Effective November 1984 no benefits are payable due to your

work and earnings. Effective May 1985 your disability benefits

have been stopped because we have decided you are now able to

work.

Your prior overpayment of $6,511.00 has been recovered from

benefits due you.

You will receive a check for $2,692.50 which represents all

benefits due you through October 1984.

When a lawyer wants to charge for helping with a Social Security

claim, we must first approve the fee. We usually withhold 25

percent of past due benefits in order to pay the approved lawyer’s

fee. We withheld $897.50 from your past due benefits in case we

need to pay your lawyer.

27a

* If all the work on this case for you and your family is

finished, and your lawyer wants to charge a fee, a request

to have it approved should be sent to us right away.

* If all work is not finished in this case, the lawyer should let

us know that a fee will be charged. This must be done

within 60 days of the date of this letter.

* If the lawyer will not charge a fee, a statement saying so,

signed and dated by the lawyer, should be sent to us

instead.

SEE NEXT PAGE

Encl: SSA 10153

SOCIAL SECURITY ADMINISTRATION

November 2, 1988

083-20-2602 HA

PAGE 2

When the amount of the fee is decided, we will let you and the

lawyer know how much of this money will be used to pay the fee.

We will send any remainder to you. If the approved fee is more

than the money we have withheld, the Social Security Administra-

tion is not involved in paying the rest of the fee.

Any petition for a fee should be sent to:

Attorney Fee Staff

OHA, SSA

P O Box 3200

Arlington VA 22203

We are sending a copy of this letter to: John O’Hanian, Inc.

If you think we are wrong, you have the right to appea!. We will

correct mistakes. We will look at any new facts you have. Then

28a

a person who did not make the first decision will decide your case

again.

* You have 60 days to ask for an appeal.

* The 60 days start the day after you get this letter.

* You will have to have a good reason for waiting more

than 60 days to ask for an appeal.

If you have any questions, you should call, write or visit any Social

Security Office. Ifyou visit an office, please bring this letter. It will

help us answer your questions.

Martin Taffet

Director

Northeastern Program Service Center

L690

M27/rf

cc: Attorney Fee Staff John O’Hanian Inc

OHA, SSA 548 S Spring St

P O Box 3200 Suite 1034

Arlington VA 22203 Los Angeles CA

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