# Reply Brief — Sullivan v. Finkelstein > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_0677%3A4 ## Record - **Collection:** Supreme Court brief - **Document type:** Reply Brief - **Published:** January 1, 1990 - **Citation:** 496 U.S. 617 ## Text - _% - 7 wt pbb Cope vu, Ve FILED (% \ JAN S 199 , . } R. No. 89-504 ect am rs 3n the Supreme Court of the Hnited States OcToser TERM, 1989 Louis W. SULLIVAN, SECRETARY OF HEALTH AND HUMAN SERVICES, PETITIONER v. MARILYN FINKELSTEIN ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT REPL\ “RIEF FOR THE PETITIONER KENNETH W. STARR Solicitor General Department of Justice Washington, D.C. 20530 (202) 633-2217 TABLE OF AUTHORITIES Page Cases: Cohen v. Beneficial Industrial Loan Corp., 337 U.S. a 7 Cohen v. Perales, 412 F.2d 44 (Sth Cir. 1969), rev'd, EE ene ene ceeeesaseeenet 4,7,9 Colon v. Secretary of HHS, 877 F.2d 148 (ist Cir. SNES a 8 Coopers & Lybrand v. Livesay, 437 U.S. 463 DED duendaddesasbsanetonedesecconceeess 5 Davidson v. Secretary of HHS, No. 88-1472 (10th iit i en eeceeuaauese 8 Daviess County Hospital v. Bowen, 811 F.2d 338 (7th ei oe eee ecceees ~ Edgewater Hospital, Inc. v. Bowen, 857 F.2d 1123 EE . Edmond v. Secretary of HHS, No. 89-3161 (6th Cir. EE . Ensey v. Richardson, 469 F.2d 664 (Mh Cir. 1972) .. . FCC v. Pottsville Broadcasting Co., 309 U.S. 134 DT sibdunaeuusedacesoosessesooeceesoocs 5 Gardner v. Moon, 360 F.2d 556 (8th Cir. Di) jih ted detebeneneaeneeenecees 8 Jamieson v. Folsom, 311 F.2d $06 (7th Cir.), cert denied, 374 U.S. 487 (1963) ................ . Lopez Lopez v. Secretary of HEW, S\2 F.2d 1155 inn cceaseennseeeneess 8,9 Mitchell v. Forsyth, 472 U.S. S11 (1985S) ....... 6 Newpark Shipbuilding & Repair, Inc. v. Roundtree, 723 F.2d 399 (Sth Cir.), cert. denied, 469 U.S. 818 TEEPE TTTTCTTTTTTT ITT TTT TTT Tee 7 Occidental Petroleum Corp. v. SEC, 873 F.2d 325 Sie GE EEE coccccecccccccccsccccecccs 9 Paluso v. Mathews, $73 F.2d 4 (0th Cir. PEERS TT TTTTT TTT TTT TTT TTT 8,9 Cases — Continued: Page Pickett v. Bowen, $33 F.2d 263 (1 1th Cir. 1987) . . . 8 Souch v. Califano, 399 F.2d 577 (4th Cir. SRUED cccoccoccesosoeseoosessnnntt 7 Stone v. Heckler, 722 F.2d 464 (Sh Cir. GREED ccccoccocecscecessesennnat 8 Sullivan v. Hudson, 109 S. Ct. 2248 (1989) .... 4 Statutes and rule: Equal Access to Justice Act, 28 U.S.C. GC 4 Se 7 UBC. GB ccccccocccosceens 1, 2, 4,6 > GEG. Gee coccccococesousnnsnann 7 @ UBC. GRD .ccocccesoceesse 2, 3, 4, 6,7 Pee. B. Gan F. SED ccccccocosoceseunanan 2 In the Supreme Court of the Gnited States OCTOBER TERM, 1989 No. 89-504 Louis W. SULLIVAN, SECRETARY OF HEALTH AND HUMAN SERVICES, PETITIONER Vv. MARILYN FINKELSTEIN ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT REPLY BRIEF FOR THE PETITIONER Respondent's defense of the court of appeals’ jurisdictional rul- ing (see Br. in Opp. 12-38) entirely ignores one of the two alter- native theories under which the district court’s order is appealable pursuant to 28 U.S.C. 1291 and fails to recognize the distinct nature of judicial review of agency action that underlies the other theory. Respondent's further contention (Br. in Opp. 42-56) that the jurisdictional issue does not in any event warrant review is fatally undermined by her concession that the decision below con- flicts with the decisions of five other courts of appeals. 1. a. The district court order in this case is appealable under either of two alternative theories. First, the order is a “final deci- sion” for purposes of 28 U.S.C. 1291 because it constitutes a final rejection of the particular decision of the Secretary before the (1) 2 district court and therefore terminated the relevant judicial pro- ceedings. The administrative decision before the court denied respondent’s application for benefits on the ground that her im- pairment did not meet or equal the Listing of Impairments, as required by the regulations governing claims for widow’s disability benefits. The district court sustained, as supported by substan- tial evidence, the Secretary’s finding that respondent does not have such an impairment. Pet. App. 16a. But instead of affirm- ing the Secretary’s decision, the court remanded the cause to the Secretary to inquire into whether respondent is in fact unable to perform any gainful activity. /d. at 17a-18a, 25a. Respondent does not dispute that the court’s order effectively invalidated the regulation requiring a claimant for widow’s benefits to show that she has an impairment that meets or equals the Listing and directed the Secretary to render a new decision under a different legal standard. A district court order having that effect is a “final decision” for purposes of 28 U.S.C. 1291. The text of 42 U.S.C. 405(g) confirms this conclusion. The fourth sentence of Section 405(g) provides that the district court “shall have power to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying, or reversing the decision of the Secretary, with or without remanding the cause for a rehearing.” This language aptly describes what the district court did here: the court “affirm[ed]” the Secretary’s decision in- sofar as he found that respondent does not have an impairment that meets or equals the Listing; it “modif[ied]” or “revers[ed]” the Secretary’s decision insofar as it denied respondent’s claim on that basis; and it “remand[ed] the cause for a rehearing,” at which the Secretary must apply a different legal standard than the one set forth in the governing regulations. Congress’s use of the term “judgment” indicates in itself that such an order is ap- pealable, because the word “judgment” is a term of art that “in- cludes a decree and any order from which an appeal lies.” Fed. R. Civ. P. 54(a). But however that may be, the eighth sentence of 42 U.S.C. 405(g) provides that “[t}he judgment of the court shall be final except that it shall be subject to review in the same manner as a judgment in other civil actions.” Respondent ignores the fourth and eighth sentences of 42 U.S.C. 405(g), which speak directly to the appealability issue, 3 and focuses instead (Br. in Opp. 22-27, 29-31, 52-55) on the sixth sentence. In her view, the sixth sentence suggests that essentially all orders that include a remand to the Secretary are interlocutory and nonappealable because that sentence provides for the Secretary to file amended findings and decision with the court after a remand. Respondent misapprehends the statutory scheme. The sixth sentence of Section 405(g) authorizes the court to order a remand to the Secretary in certain circumstances other than those addressed by the fourth sentence —i.e., other than those in which the court remands the cause as part of its ruling on the merits. The sixth sentence provides: The court may, on motion of the Secretary made for good cause shown before he files his answer, remand the case to the Secretary for further action by the Secretary, and it may at any time order additional evidence to be taken before the Secretary, but only upon a showing that there is new evidence which is material and that there is good cause for the failure to incorporate such evidence into the record in a prior pro- ceeding; and the Secretary shall, after the case is remanded, and after hearing such additional evidence if so ordered, modify or affirm his findings of fact or his decision, or both, and shall file with the court any such additional and modified findings of fact and decision, and a transcript of the addi- tional record and testimony upon which his action in modi- fying or affirming was based. The sixth sentence requires the Secretary to file with the court any additional or modified findings of fact or decision he makes on remand because that sentence furnishes a mechanism for con- ducting further administrative proceedings before the court passes on the validity of the Secretary's decision. Thus, it is only after the Secretary reconsiders his own decision in light of the “new evidence” (or in light of other circumstances that prompted a pre- answer remand) that the court can properly pass on the validity of that decision and affirm, modify or reverse it.' An order ' Respondent's quotation and discussion of the sixth sentence of Section 405(g) (Br. in Opp. 21-24, 28-30) omit any reference to the critical requirement that there be “new evidence” to justify a remand other than one requested by the Secretary prior to filing his answer. It is consistent with the Secretary's 4 remanding the case for this limited purpose is not appealable under 28 U.S.C. 1291, because it does not constitute a final rul- ing by the court that the Secretary’s decision is erroneous. Cohen v. Perales, 412 F.2d 44, 48-49 (Sth Cir. 1969), rev’d on other grounds, 402 U.S. 389 (1971). Contrary to respondent’s contention, the order in the instant case was not governed by the limited remand authority in the sixth sentence of Section 405(g), because: (i) it was not entered on the motion of the Secretary (either before or after he filed his answer), and (ii) it was not made on the basis of a showing or finding that there was “new evidence” material to the Secretary’s decision. Instead, the district court remanded the case to the Secretary only as a consequence of its holding that his decision denying respondent’s claim was legally erroneous because it was based solely on the finding that her impairment did not meet or equal the Listing. As we have explained, a remand made only as an incident to the court’s ruling on the merits is governed by, and is appealable under, the fourth and eighth sentences of Sec- tion 405(g). Respondent argues (Br. in Opp. 22-23, 29-32, 39-40) that our submission in this regard is inconsistent with Sullivan v. Hud- son, 109 S. Ct. 2248 (1989). That case, however, involved the availability of attorney’s fees under the Equal Access to Justice Act, 28 U.S.C. 2412(d)(1)(B), following a remand to the Secretary. The Court did not discuss the appealability of a re- mand order of the sort at issue here or the specific language in the fourth and eighth sentences of Section 405(g) that refers to such an order as a “judgment” that is “final” and “subject to review in the same manner as a judgment in other civil actions.” b. In the alternative, the order at issue here is appealable under principles analogous to those underlying the “collateral order” doctrine that the Court has applied to certain orders entered in primary jurisdiction to require the Secretary to receive and weigh ali evidence bearing on the claim. And it would be inconsistent with the requirement under 42 U.S.C. Section 405(g) that the district court's judgment be entered “upon the pleadings and transcript of [the administrative] record,” for the court to receive and weigh newly discovered evidence in the first instance. 5 the course of on-going proceedings in a district court. See Pet. 15-16, 21. Respondent does not dispute that the district court decided an important legal issue concerning the validity of the regulations governing applications for widow’s disability benefits. She argues, however, that the order is not appealable because that issue is not “completely separate” from the merits of her claim for benefits. Br. in Opp. 18-19, 20-21, quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 468 (1978). Respondent disregards the significant legal and practical distinctions, for ap- pealability purposes, between an order remanding a matter to an agency for a new round of administrative proceedings and an order entered in on-going proceedings in the district court itself. As this Court has observed (FCC v. Pottsville Broadcasting Co., 309 U.S. 134, 141 (1940)): A review by a federal court of the action of a lower court is only one phase of a single unified process. * * * The technical rules derived from the interrelationship of judicial tribunals forming a hierarchical system are taken out of their environment when mechanically applied to determine the extent to which Congressional power, exercised through a delegated agency, can be controlled within the limits of the “judicial power” conferred by Congress under the Constitution. The district court’s order in this case was not merely one step toward an adjudication of the merits of respondent's claim for benefits by the court itself. To the contrary, the order removed the claim from the immediate cognizance of the court and re- turned it to the jurisdiction of the officer of a coordinate Branch in whom Congress has vested the power to adjudicate claims for Social Security benefits, subject only to limited review by the courts. Moreover, the legal issue resolved by the district court cannot be reconsidered by the Secretary in the rehearing on re- mand, which will address the distinct question whether respon- dent is in fact unable to perform any gainful activity. The district court’s order therefore finally determined the legal issue of the validity of the Secretary's regulation, and that issue is sufficiently distinct from the factual issues that would be resolved on semand 6 to render the order a “final decision” within the meaning of 28 U.S.C. 1291. Compare Mitchell v. Forsyth, 472 U.S. 511, 527-528 (1985). That is especially so since entertaining the Secretary's ap- court or the Secretary, while refusing to entertain the appeal would require new and unwarranted proceedings before the Secretary. Respondent’s related assertion (Br. in Opp. 28-36) that the Secretary should not be permitted to take an appeal now because appellate consideration of the validity of the widow’s disability regulations might not be entirely foreclosed following the remand likewise ignores the distinct nature of judicial review of ad- ministrative action. As an initial matter, nothing in Section 405(g) expressly provides for the Secretary to obtain judicial review (in- cluding appellate review) of his own decision if he determines on remand that he must award benefits under the legal standards imposed by the district court. See Pet. 17 n.10. But even if respon- dent is correct (Br. in Opp. 28-33) that the Secretary nevertheless may obtain court of appeals review by filing his new decision on remand with the district court, requesting the court to enter a judgment affirming that decision, and then appealing the judg- ment that affirms his own decision, certainly nothing in Section 405(g) requires the Secretary to pursue that awkward course, and thereby to accept the burden of a remand before obtaining ap- pellate review on a dispositive legal issue that underlies his own carefully considered decision denying a claim for benefits. To the contrary, the fourth and eighth sentences of Section 405(g) expressly contemplate that the Secretary may take an immediate appeal from a district court order holding the Secretary's deci- sion denying a claim for benefits legally erroneous, even though the court has remanded the cause to the Secretary for a rehear- ing and even though the same claim for benefits therefore might be brought back before the district court following the remand. Respondent’s proposal to postpone all appellate review until the Secretary has rendered a new decision on remand thus both fails to accord the respect due the official of a coordinate Branch who is charged with administering the Act and conflicts with the text of Section 405(g). 7 2. Respondent’s contention (Br. in Opp. 42-56) that the jurisdictional issue does not in any event warrant review is without merit. We have shown (Pet. 19-25) that the decision below con- flicts with the Fifth Circuit’s seminal holding in Cohen v. Perales, supra, and with similar holdings by a number of other courts of appeals. a. In Perales, the district court remanded the case to the Secretary for a rehearing under different evidentiary principles. The Fifth Circuit held that it had jurisdiction over the Secretary's appeal on both of the theories discussed above —i.e., that the fourth and eighth sentences of Section 405(g) rendered the re- mand order an appealable final judgment, and that the order was appealable under principles of practical finality derived from the collateral order doctrine of Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541 (1949). 412 F.2d at 48-49. As we have ex- plained (Pet. 22-23), and as respondent does not dispute, the jurisdictional ruling in Perales has special significance because it was not disturbed by this Court when it reversed the Fifth Cir- cuit on the evidentiary issue, even though the Court’s own jurisdic- tion under 28 U.S.C. 1254(1) depended on whether the case was properly “in” the court of appeals. Respondent questions (Br. in Opp. 55-56) the continuing precedential force of Perales as a result of the Fifth Circuit's en banc decision in Newpark Shipbuilding & Repair, Inc. v. Round- tree, 723 F.2d 399, cert. denied, 469 U.S. 818 (1984). That case, however, involved the distinct question whether the court of ap- peals had jurisdiction under 33 U.S.C. 921(c) over an order of the Benefits Review Board that remanded a claim to an ad- ministrative law judge for further proceedings. In holding that it did not have jurisdiction, the en banc Fifth Circuit did not even cite, much less overrule, Perales. Respondent also attempts (Br. in Opp. 52-55) to distinguish Perales on the ground that this case involves only a remand for the taking of additional evidence, whereas in Perales the Fifth Circuit also made an evidentiary rul- ing adverse to the Secretary. But as we have explained above, the district court in this case did not simply remand to allow the Secretary to consider newly discovered evidence, while reserv- ing judgment on the validity of the decision of the Secretary that was before the court on judicial review. Instead, like the Fifth Circuit in Perales, it found the Secretary’s decision legally er- roneous, resolved a distinct legal issue in the process, and re- manded to the Secretary for further proceedings under different legal standards. Respondent's attempt to cistinguish Perales therefore is without merit. b. We also have shown (Pet. 23-24) that the decision below squarely conflicts with holdings by the First, Sixth, Seventh, Ninth and Tenth Circuits that the Secretary may appeal a district court order holding the Secretary’s decision legally erroneous and remanding for further proceedings under different legal standards or evidentiary principles. See Colon v. Secretary of HHS, 877 F.2d 148, 149-151 (ist Cir. 1989); Lopez Lopez v. Secretary of HEW, $12 F.2d 1155, 1156 (ist Cir. 1975); Edmond v. Secretary of HHS, No. 89-3161 (6th Cir. Apr. 19, 1989); Daviess County Hospital v. Bowen, 811 F.2d 338, 341-342 (7th Cir. 1987); Edgewater Hospital, Inc. v. Bowen, 857 F.2d 1123 (7th Cir. 1988); Jamieson v. Folsom, 311 F.2d 506, 507 (7th Cir.), cert. denied, 374 U.S. 487 (1963); Stone v. Heckler, 722 F.2d 464, 466-468 (9th Cir. 1983); Ensey v. Richardson, 469 F.2d 664 (Mh Cir. 1972); Paluso v. Mathews, $73 F.2d 4, 7-8 (10th Cir. 1978) (Black Lung case).? Indeed, the Secretary's appeal in Edmond presents the same issue on the merits as his appeal in the instant case (the validity of the widow’s disability regulations), and the Sixth Cir- cuit, in contrast to the court below, held that it has jurisdiction over the Secretary’s appeal from the district court’s order reman- ding the cause to the Secretary to determine whether the claimant can engage in any gainful activity. See also Davidson v. Secretary of HHS, No. 88-1472 (10th Cir. Oct. 12, 1989) (making a “preliminary determination” in favor of jurisdiction over Secretary's appeal in similar widow’s case). 2 The Fourth, Eighth, and Eleventh Circuits also have heid such orders ap- pealable (Souch v. Califano, $99 F.2d $77, $78 a.1 (4th Cir. 1979), Gardner v. Moon, 160 F.2d 956, 558 n.2 (8th Cir. 1966); Pickett v. Bowen, $33 F.2d 288, 290-291 (11th Cir. 1987)), although, without mentioning those rulings, the Fourth and Eleventh Circuits have recently heid (and the Eighth Circus has recently stated im dictum) that such an order is not appealable. See Pet. 24 & 0.19. Respondent points out (Br. in Opp. 47-49) that several of the cases upon which we rely involved challenges to the jurisdiction of the district court or a requirement that the Secretary redeter- mine the claim under different evidentiary standards. But re- spondent does not explain why this distinguishes the cases for purposes of appellate jurisdiction, since her contention that a legal issue resolved by the district court in remanding the cause should be raised in an appeal following the remand would apply equal- ly to those issues. Moreover, even if we assume, arguendo, that the distinctions respondent identifies in these cases are material, she does not even attempt to distinguish the other cases upon which we rely. She merely refers to them as a “small number” of decisions that have allowed appeal without extended discus- sion. Br. in Opp. 49-50 & n.10. This effort to minimize the clear circuit conflict is unavailing, because the contrary decisions she attempts to dismiss in this manner were rendered dy no less than five other circuits. Moreover, two of those five decisions were rendered prior to and were cited in support of the jurisdictional ruling in Perales itself (see 412 F.2d at 48, citing Jamieson and Gardner), two others expressly relied upon Perales, which did extensively discuss the appealability issue (see Lopez Lopez, $12 F.2d at 1156; Paluso, $73 F.2d at 8); and the fifth (and most recent) was rendered only after the Sixth Circuit specifically re- quested the Secretary to brief the jurisdictional issue (Edmond). Finally, although the question of the appealability of remand in Social Security cases, the right of the agency concerned to ap- peal a remand order has been sustained in other contexts as well. See Occidental Petroleum Corp. v. SEC, 873 F.2d 325, 329-330 (D.C. Cir. 1989); Pet. 23-25. This important and recurring jurisdictional issue therefore warrants resolution by this Court. For the foregoing reasons and the additional reasons stated in the petition, it is respectfully submitted that the petition for a writ of certiorari should be granted. KENNETH W. STARR Solicitor General JANUARY 1990 & US GOVERNMENT PRINTING OFFICE 1988 262 20200887 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_0677%3A4. Public record. Not legal advice.