Petitioners Brief — Sullivan v. Finkelstein

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In the Supreme Court of the United States

OcToser TERM, 1989

Louis W. SULLIVAN, SECRETARY

or HEALTH AND HUMAN SERVICES, PETITIONER

MARILYN FINKELSTEIN

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

BRIEF FOR THE PETITIONER

QUESTION PRESENTED

Whether, in an action under 42 U.S.C. 405(g) for

judicial review of the final decision of the Secretary of

Health and Human Services denying a claim for Social

Security disability benefits, the Secretary may appeal an

order of the district court that rejects the legal basis for

the Secretary's decision and, as a consequence, remands

the cause to the Secretary for a rehearing under a dif-

ferent legal standard.

(1)

TABLE OF CONTENTS

Page

re 1

dian rncrnenceemnennnesenenemnensnmsenusesse 1

Statutory provisions involved ..........................2...-....----.00--- 2

EEE EEE 2

nae ae 9

Argument:

The court of appeals had jurisdiction of the Secre-

atari rrneepermengremenmnmenmeannnseats 12

I. The text and structure of 42 U.S.C. 405(g)

establish that the district court’s order is a

final judgment from which the Secretary may

appeal under 28 U.S.C. 1291 _............--.. 14

Il. The right of the Secretary to appeal is sup-

ported by general principles governing the con-

struction of 28 U.S.C. 1291 and the scope of

judicial review of agency action —........................ 27

a a 46

a la

TABLE OF AUTHORITIES

Cases:

Adams House Health Care v. Bowen, 817 F.2d 587

(9th Cir. 1987), vacated, 485 U.S. 1018 (1988) ..

ASARCO, Inc. Vv. Kadish, 109 8. Ct. 2087 (1989)..

Aubeuf Vv. Schweiker, 649 F.2d 107 (2d Cir. 1981).

Avery V. Secretary of HHS, 762 F.2d 158 (1st Cir.

1985)

Bachowski v. Usery, 545 F.2d 363 (8d Cir. 1976) ..

Badger-Powhattan v. United States, 808 F.2d 823

(Fed. Cir. 1986) ie

Baltimore Contractors, Inc. v. Bodinger, 348 U.S.

176 (1955) _ —

Bauzo V. Bowen, 803 F.2d 917 (7th Cir. 1986)...

Beach Vv. Bowen, 788 F.2d 1399 (8th Cir. 1986)...

Biddle v. Heckler, 721 F.2d 1821 (11th Cir. 1983) ..

(11)

gree 8 28 LSE

Cases—Continued: Page

Bohms v. Gardner, 381 F.2d 283 (8th Cir. 1967),

cert. denied, 390 U.S. 964 (1968)... 21

Bowen Vv. City of New York, 476 U.S. 467 (1986). 4,5

Bowen V. Owens, 476 U.S. 340 (1986) .................... 19

Bowen V. Yuckert, 482 U.S. 1387 (1987) ............... 3, 4, 15

Brotherhood of Maintenance of Way Employees V.

Consolidated Rail Corp., 864 F.2d 283 (3d Cir.

a a ae Seer we 7

Brown Shoe Co. Vv. United States, 370 U.S. 294

Ee Crseenee ena ee 30, 32, 37

Budinich v. Becton Dickinson & Co., 486 U.S. 199

EEE eee 26, 31, 36, 39, 41

Burlington Northern, Inc. Vv. United States, 459

fC LT 7] 35

Cabot Corp. v. United States, 788 F.2d 1539 (Fed.

SS ners elect naiesiatatiticaiaasiitiltaeieiaiianiiees — 39

Califano Vv. Yamasaki, 442 U.S. 682 (1979) .......... 18

Camp V. Pitts, 411 U.S. 138 (1973) .......... iis 34-35

Carroll v. United States, 354 U.S. 394 (1957)... 36

Carter v. Schweiker, 649 F.2d 937 (2d Cir. 1981).. 24

Catlin v. United States, 324 U.S. 229 (1945)... 12, 17

Chemical Leaman Tank Lines, Inc. v. United

States, 446 F. Supp. 721 (D.D.C. 1978) ............. 27, 36

Cobbledick v. United States, 309 U.S. 323 (1940). 30

Cohen Vv. Beneficial Industrial Loan Corp., 337

8 FO ee 10, 12, 30, 31

Cohen Vv. Perales, 412 F.2d 44 (5th C'r. 1969),

rev'd, 402 U.S. 389 (1971) .........00........... 23, 28, 29, 41

Colon v. Secretary of HHS, 877 F.2d 148 (ist

EE Ee en ae ARE 28

Columbia Insurance Co. Vv. Wheelwright, 20 U.S.

(7 Wheat.) 584 (1822) ooo cece 33

Community Hospital of Roanoke vy. HHS, 770 F.2d

I I aidan 29

Coopers & Lybrand v. Livesay, 4837 U.S. 463

EE ss eee 11, 31, 40, 42

Coz Broadcasting Corp. Vv. Cohn, 420 U.S. 469

aaa tna ae ot. $2, 44

Crowder V. Sullivan, No. 89-2681 (7th Cir. Mar. 5,

EITTEhccancentennearscnnieincsshasmentgtinsiliininitiatiaaasiaiiiaatiatsiitliaitabinad 28, 43

Cases—Continued :

Dalto v. Richardson, 434 F.2d 1018 (2d Cir. 1970),

cert. denied, 401 U.S. 979 (1971) -........................

Davidson Vv. Secretary of HHS:

Page

No. 88-1472 (10th Cir. Oct. 12, 1989) ........... 28

No. CIV-85-0420-C (D.N.M. Jan. 25, 1988),

appeal pending, No. 88-1472 (10th Cir.) .... 38

Daviess County Hospital v. Bowen, 811 F.2d 338

| a 29

Diorio Vv. Heckler, 721 F.2d 726 (11th Cir. 1983) 24

Dugas v. American Surety Co., 300 US. 414

ERS Ee ee nee 26

Edgewater Hospital, Inc. v. Bowen, 857 F.2d 1123

CE 29

Edmond Vv. Secretary of HHS:

No. 89-3161 (6th Cir. Apr. 19, 1989) ....... — 28

No. C87-2132 (N.D. Ohio Dec. 20, 1988), ap-

peal pending, No. 89-3161 (6th Cir.) ........ 38

Ensey Vv. Richardson, 469 F.2d 664 (9th Cir.

a re 28

Ewing V. Gardner, 185 F.2d 781 (6th Cir. 1950) .. 29

Farr V. Heckler, 729 F.2d 1426 (11th Cir. 1984). 21

FCC v. National Citizens Committee for Broad-

casting, 486 U.S. 775 (1978) ....................... 35

FCC Vv. Pottsville Broadcasting Co., 309 U. S. 134

ET 85, 40

Firestone Tire & Rubber Co. v. Risjord, 449 US.

EE NEN - een ee 37

FPC v. Idaho Power Co., 344 U.S. 17 (1952) ....... 35

Flanagan V. United States, 465 U.S. 259 (1984)... 37, 39

Fleming v. Nestor, 363 U.S. 603 (1960) ................. 19

Ford Motor Co. v. NLRB, 305 U.S. 364 (1939) ......

Forgay Vv. Conrad, 47 U.S. (6 How.) 201 (1848) .... 82

Gardner V. Moon, 360 F.2d 556 (8th Cir. 1966)... 28, 29

Garfield v. Schweiker, 732 F.2d 605 (7th Cir.

| ee Ee 24

Gillespie Vv. United States Steel Corp., 379 U.S. 148

(1964) ..... _cauUnESUSCUAanSCUSNGSSUSESISUISSISIDSCERIORERSTESEDSSD 12, 30

Gold vy. Weinberger, 473 F.2d 1376 (5th Cir. 1973) .. 28

Gueory Vv. Hampton, 510 F.2d 1222 (D.C. Cir.

a 29

Cases—Continued : Page

Gulfstream Aerospace Corp. V. Mayacamas Corp.,

I I eer 34

Harper V. Bowen, 854 F.2d 678 (4th Cir. 1988)... 28, 44

Hawood Vv. Bowen, No. A-85-CV-296 (W.D. Tex.

Feb. 19, 1988), appeal dismissed, No. 88-1280

(5th Cir. Nov. 30, 1988) (862 F.2d 873 (5th

CE SAL LL EO 28, 38

Heckler v. Campbell, 461 U.S. 458 (1983) .......... 13, 24, 38

Hobby v. Hodges, 215 F.2d 754 (10th Cir. 1954) .... 29

Howell v. Schweiker, 699 F.2d 524 (11th Cir.

LEE RS EEE ee 21

Huie Vv. Bowen, 788 F.2d 698 (11th Cir. 1988)... 28

ICC v. Brotherhood of Locomotive Engineers, 482

U.S. 270 (1987), rev’g 761 F.2d 714 (D.C. Cir.

ES a 29

ICC v. Clyde S.S. Co., 181 U.S. 29 (1901) ............. 35

Idlewild Liquor Corp. Vv. Epstein, 370 U.S. 713

ERE ES 82) 32, 36

Jamieson V. Folsom, 311 F.2d 506 (7th Cir.), cert.

denied, 374 U.S. 487 (1968) 0.0000. 28, 29

Jordan V. Heckler, 721 F.2d 349 (11th Cir. 1983).. 29

Kane V. Heckler, 731 F.2d 1216 (5th Cir. 1984)... 24

Kendall v. United States, 87 U.S. (12 Pet.) 524

ST ER a ee aE A Ne ee 33

Kier v. Secretary of HHS, No. H-85-830 (JAC)

(D. Conn. Feb. 27, 1989), aff'd, 888 F.2d 244

See 38

Lopez Lopez Vv. Secretary of HEW, 512 F.2d 1155

ETE CE ce 28

Marshall v. Celebrezze, 3561 F.2d 467 (3d Cir.

NEC So a ee 14

Mayersky Vv. Celebrezze, 83563 F.2d 89 (3d Cir.

EE oe 14

McCoy V. Schweiker, 683 F.2d 1188 (8th Cir.

EE ek Se 28

McGill Vv. Secretary of HHS, 712 F.2d 28 (2d Cir.

1983), cert. denied, 465 U.S. 1068 (1984)... 28

McKelvey Vv. Walters, 696 F. Supp. 1817 (D.D.C.

ES EET 28

Midland Asphalt Corp. v. United States, 109 S. Ct.

1494" (1989) ............. 12, 19, 31

VII

Cases—Continued : Page

Mitchell v. Forsyth, 472 U.S. 511 (1985) ............ 12, 30, 41

Moses H. Cone Memorial Hospital v. Mercury Con-

struction Corp., 460 U.S. 7 (1983) -................ 10, 32, 36

NLRB vy. Wilder Mfg. Co., 454 F.2d 995 (D.C. Cir.

TTI nxinssitinsstenitamenepatesianetesenbenseaeniasmiiasenemmnenainemiandiaienenn 36

North Broward Hospital District v. Bowen, 808

F.2d 1405 (11th Cir. 1987), vacated, 485 U.S.

fa 29

Occidental Petroleum Corp. v. SEC, 873 F.2d 325

(CI, EEE 8, 29, 38

Paluso v. Mathews, 573 F.2d 4 (10th Cir. 1978) . 28

Pickett v. Bowen, 833 F.2d 288 (11th Cir. 1987)... 28

Railroad Comm'n Vv. Pullman Co., 312 U.S. 496

nen oon 32

Republic Natural Gas Co. v. Oklahoma, 334 U.S.

A Se an 31

Richardson V. Perales, 402 U.S. 389 ———_ 27

Scripps-Howard Radio v. FCC, 316 U.S. 4 (1942). 33

Sibbach v. Wilson & Co., 312 U.S. 1 (1941)........... 18

Smith v. Schweiker, 671 F.2d 789 (3d Cir. 1982). x

Social Security Board v. Warren, 142 F.2d 974 (8th

EEE 29

Souch v. Califano, 599 F.2d 577 (4th Cir. 1979). 28

Stack v. Boyle, 342 U.S. 1 (1951)... ialaiaieeis 12

Stone v. Heckler, 722 F.2d 464 (9th Cir. 1983) . 28, 38

Sullivan v. Hudson, 109 S. Ct. 2248 (1989) _ 9, 25, 26, 41,

44, 45

Sullivan v. Zebley, No. 88-1377 (Feb. 20,1990)... 3,5

Traynor Vv. Turnage, 485 U.S. 535 (1988) .............. 28

United States v. Mendoza, 464 U.S. 154 (1984) 40

United States v. Monsanto, 109 S. Ct. 2657 (1989) . 80

United States v. Nizon, 418 U.S. 683 (1974)... 28

United Steelworkers, Local 1918 v. Union R.R.,

648 F.2d 905 (8d Cir. 1981) ....... 6

Van Cauwenberghe Vv. Biard, 108 s Ct. 1945

(1988) .. 12, 35

Vermont Yankee Nuclear Power Corp. v. -NRDC,

435 U.S. 519 (1978)........ lieientitiaaeneens Sintitaien 29

Weinberger v. Saifi, 422 U.S. 749 (1975)... 15

Statutes, regulations and rule: Page

Act of June 19, 1934, ch. 651, § 2, 48 Stat. 1064

gE Ea 18

Act of Aug. 24, 1937, § 2, ch. 754, 50 Stat. 752 (28

U.S.C. 1252 (1982) ) 19

Act of Aug. 10, 1939, ch. 666, § 201, 53 Stat. 1368. 17

Act of June 27, 1988, Pub. L. No. 100-352, § 1,

EN Te ee a 20

Equal Access to Justice Act:

Ee 9

28 U.S.C. 2412(d) (1) (A) ......... witsliimemniiaideiis 25

Hobbs Act, 28 U.S.C. 2341 et seg. 10, 29

38 U.S.C. S347 (e) ................................. meee 44

Te 29

EE cco K@, 29, 30

Judiciary Act of 1789, ch. 20, § 22, 1 Stat. 84... 12

Social Security Act, 42 U.S.C. 301 et seg. (1982 &

Supp. IV 1986):

Tit. II, 42 U.S.C. 401 et seq. 2,5

42 U.S.C. 402(b) (1) (1982 & Supp. IV

1986) . eS

42 U.S.C. 405(a) (§ 205(a)) 15

42 U.S.C. 405(b) (1) (1982 & Supp. IV

1986) ....... a

42 U.S.C. 405(g) (§ 205(g) ) ..................... passim

42 U.S.C. 405(g) (1976) 24

CS . 84

42 U.S.C. 423(d) (1) (A)................ alain 2

2,3

42 U.S.C. 423(d) (2) (A)

42 U.S.C. 423(d) (2) (B)

Tit. XVI, 42 U.S.C. 1381 et seg. . :

42 US.C. 1883c(a)(3)(A) (1982 &

NG ee 5

Social Security Amendments of 1967, Pub. L. No.

90-248, § 158(b), 81 Stat. 868 2

Social Security Amendments of 1977, Pub. L. No.

I 19

Social Security Disability Amendments of 1980,

Pub. L. No. 96-265, § 307, 94 Stat. 458. 24

caer a

en ”

ES aati

15 U.S.C. 78y (a) (5)... a

eno

15 U.S.C. 1394 (b) sumpentaicibememnsennmneenes

TEA RE

45 U.S.C. 355 (f)

28 U.S.C. 1254(1) .......... iielatalhetaaeaieinaiitaiiemmannsines

CC TL

eee ee ee eee eee eee eee eee

20 C.F.R. Pt. 404, Subpt. P:

Section 404.1506 (a) (1)...

Section 404.1520(e) & (f) EE.

Miscellaneous: Page

Administration of Social Security Disability Pro-

gram: Hearings Before the Subcomm. on the

Administration of the Social Security Laws of

the Hous: Comm. on Ways and Means, 86th

Cong., Ist Sess. (1959) . ener ee ee,

Center for Administrative Justice, Final Report:

Study of Social Security Administration Hear-

ne cisasiemaunsneneveienenesei .. 24, 45

33 Fed. Reg. (1968) :

SSC eae ne eee meee 3

9 SESE aeons ON eRe ee 3

eevee ee ee er Ny aOR 3

Horgan, The Impact of Interlocutory Judicial Deci-

sions Upon Anti-Dumping and Countervailing

Duty Proceedings, 3 Fla. Int'l L.J. 187 (1988)... 39

H.R. Rep. No. 100, 96th Cong., Ist Sess. (1979) ........ 24, 25

H.R. Rep. No. 728, 76th Cong., Ist Sess. (1939) ....... 19

Hunter & McInerney, What Happens When the

Court Reverses a Dumping or Countervailing

Duty Case? What Should Happen?, 3 Fila. Int'l

A casement 39

L. Jaffe, Judicial Control of Administrative Ac-

a 33

Layton, Interlocutory Appeal of Remand Orders

by the Court of International Trade Under 28

U.S.C. § 1292(d)(1),3 Fla. Int'l L.J. 167 (1988) .. 39

J. Mashaw, et al., Social Security Hearings and

PRES AERSEN S ST AS Nen9 SO 24, 45

6 J. Moore, W. Taggart & J. Wicker, Moore’s Fed-

eral Practice (2d ed. 1988) ........0.........cccccccccceeeees 17

S. Rep. No. 734, 76th Cong., Ist Sess. (1939)... 19

S. Rep. No. 744, 90th Cong., Ist Sess. (1967) ............ 3

Social Security Administration, Annual Report to

the Congress:

, REE eR As Sat ice ee emi eet 40

, NE Ree Ser AM eee nh oak ee 40

RE ET ER al eter feet det es 40

Miscellaneous—Continued :

Subcomm. on Social Security of the House Comm.

on Ways & Means, 95th Cong., 2d Sess., The So-

cial Security Amendments of 1977: Brief Sum-

mary of Major Provisions And Detailed Com-

parison With Prior Law (Comm. Print 1977)..

U.S. Dep’t Justice, Attorney General’s Report on

the Administrative Procedure Act (1947) .........

Page

In the Supreme Court of the United States

OCTOBER TERM, 1989

No. 89-504

Louis W. SULLIVAN, SECRETARY

OF HEALTH AND HUMAN SERVICES, PETITIONER

Vv.

MARILYN FINKELSTEIN

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

BRIEF FOR THE PETITIONER

OPINIONS BELOW

The opinion of the court of appeals, as amended by

order dated May 19, 1989 (Pet. App. la-1l2a), is re-

ported at 869 F.2d 215, and the opinion of Judge Becker

dissenting from the denial of rehearing en banc (Pet.

App. 23a-24a) is reported at 869 F.2d 220. The opinion

of the district court (Pet. App. 13a-18a) is unreported.

JURISDICTION

The judgment of the court of appeals was entered on

March 3, 1989 (Pet. App. 19a-20a), and a petition for

rehearing was denied on May 24, 1989 (Pet. App. 2la-

22a). By order dated August 9, 1989 Justice Brennan

extended the time within which to file a petition for a

writ of certiorari to and including September 21, 1989.

The petition was filed on that date and was granted on

January 22, 1990. The jurisdiction of this Court is in-

voked under 28 U.S.C. 1254(1).

(1)

STATUTORY PROVISIONS INVOLVED

28 U.S.C. 1291 and Section 205(g) of the Social Se-

curity Act, as codified at 42 U.S.C. 465(g), are set forth

in an Appendix to this brief. App., infra, la-2a.

STATEMENT

1. Respondent is the widow of a wage earner who died

on August 27, 1980, while fully insured under Title II

of the Social Security Act, 42 U.S.C. 401 et sea On No-

vember 25, 1983, respondent applied for widow’s disabil-

ity benefits under Title II.

The statutory standard of disability for the widow,

widower, or surviving divorced spouse of a wage earner '

is different from and more stringent than that for the

wage earner. In the case of a wage earner, the Social

Security Act provides that the term “disability” means

the “inability to engage in any substantial gainful ac-

tivity by reason of any medically determinable physical

or mental impairment which can be expected to result in

death or which has lasted or can be expected to last for

a continuous period of not less than 12 months.” 42

U.S.C. 423(d)(1)(A). The Act further provides that a

wage earner shall be determined to be under a disability

only if his impairment is “of such severity that he is not

only unable to do his previous work but cannot, consider-

ing his age, education, and work experience, engage in

any other kind of substantial gainful work which exists

in the national economy” (42 U.S.C. 423(d)(2)(A)).

By contrast, under 42 U.S.C. 423(d) (2) (B), which was

enacted in 1968,’ a surviving spouse shall not be deter-

mined to be disabled unless his or her impairment is “of

a level of severity which under regulations prescribed by

the Secretary is deemed to be sufficient to preclude an

individual from engaging in any gainful activity.” See

1 For convenience, we shall hereafter refer to this class of persons

as “surviving spouses.”

2?Social Security Amendments of 1967, Pub. L. No. 90-248,

§ 158(b), 81 Stat. 868.

Sullivan v. Zebley, No. 88-1377 (Feb. 20, 1990), slip op.

14-15.

The regulations implementing the latter statutory sec-

tion, which were promulgated soon after passage of 42

U.S.C. 423(d) (2) (B) in 1968," provide that a surviving

spouse’s impairment is deemed to be of sufficient severity

to preclude gainful activity only if it meets or equals the

severity of an impairment included in the Listing of Im-

pairments in App. 1 to 20 C.F.R. Pt. 404, Subpt. P. See

20 C.F.R. 404.1525(a), 404.1577, 404.1578(a). Thus,

under the regulations prescribed by the Secretary, a sur-

viving spouse’s impairment is evaluated solely on the

basis of the medical severity of that impairment. The

Secretary does not consider any further limitations on the

surviving spouse’s ability to work that may result from

the adverse effects of age, education, or work experience,

as he would in the case of a wage earner. 20 C.F.R.

404.1577, 404.1578(a); see Sullivan v. Zebley, slip op.

15: Bowen v. Yuckert, 482 U.S. 187, 149 n.7 (1987) ; id.

at 163-164 & n.3 (Blackmun, J., dissenting) .*

2. Respondent’s application for surviving spouse’s dis-

ability benefits under 42 U.S.C. 423(d)(2)(B) was

denied at all four levels of the administrative process on

the ground that her coronary condition did not meet or

equal an impairment contained in the Listing. Pet. App.

16a." After respondent exhausted her administrative

$33 Fed. Reg. 11,749, 11,751, 11,755 (1968), adding 20 C.F.R.

404.1504, 404.1506 (a) (1).

4 The Senate Report on the 1968 amendments that added 42 U.S.C

423(d)(2)(B) stated that “[t}he determination of disability in

the case of a widow or widower would be based solely on the level

of severity of the impairment”; that such a determination “would

be made without regard to nonmedical factors such as age, educa-

tion, and work experience, which are considered in disabled worker

cases”: and that “individuals whose impairments do not meet this

level of severity may not in any case be found disabled.” S. Rep.

No. 744, 90th Cong., Ist Sess. 49-50 (1967).

5 The initial determination of disability is made by a state agency

acting under the authority and supervision of the Secretary. 42

remedies through the Appeals Council, she sought ju-

dicial review of the Secretary's final decision, pursuant

to 42 U.S.C. 405(g), in the United States District Court

for the District of New Jersey.

The district court upheld, as supported by substantial

evidence, the Secretary’s decision that respondent's cor-

onary impairment did not meet or equal an impairment

contained in the Listing. Pet. App. 15a-l6a. It further

held, however, that the Secretary may not deny a sur-

viving spouse’s claim for disability benefits on that basis

alone, but instead must make an individualized deter-

mination of the functional impact of the impairment on

the claimant in order to determine whether she in fact

retains sufficient residual functional capacity to perform

any gainful activity. Jd. at 17a-18a. The effect of this

ruling was to invalidate the Secretary’s longstanding

regulations to the extent that they require an applicant

for surviving spouse’s disability benefits to show an im-

pairment that meets or equals a listed impairment." The

U.S.C. 421(a); 20 C.F.R. 404.1503. If the claimant is dissatisfied

with the initial determination, he may request a de novo reconsid-

eration by the state agency. 20 C.F.R. 404.909(a). If the claim is

denied on reconsideration, the claimant may then request a de novo

hearing before an administrative law judge (ALJ) in the Office

of Hearings and Appeals of the Social Security Administration.

42 U.S.C. 405(b) (1) (1982 & Supp. IV 1986); 20 C.F.R. 404.929.

Finally, the claimant may seek review by the Appeals Council. 20

C.F.R. 404.967. See Bowen v. Yuckert, 482 U.S. at 142: Bowen v.

City of New York, 476 U.S. 467, 472 (1986). If the Appeals Council

denies review, or grants review and affirms the denial of benefits,

the claimant may then seek judicial review of that “final decision”

pursuant to 42 U.S.C. 405(g). 20 C.F.R. 404.981. The Act contains

no provision for the Secretary to seek judicial review of a decision

by his own Appeals Council in favor of the claimant.

° A claimant’s “residual functional capacity” is “what [the claim-

ant] can still do despite [his] impairments” (20 C.F.R. 404.1545)

(emphasis added). Under governing regulations, the Secretary

measures this capacity only for the purpose of determining, at steps

four and five of the sequential evaluation process utilized for wage

earners, whether a claimant whose impairment does not meet or

court therefore “directed” the Secretary “to inquire

whether [respondent] may or may not engage in any

gainful activity, as contemplated by the Act” (id. at

18a), and ordered “that the matter be remanded to the

Secretary for further proceedings in accordance with

[the] Court’s opinion.” 7d. at 25a.

3. The Secretary appealed the district court's order.

He defended the validity of the regulations requiring an

applicant for surviving spouse’s disability benefits to

show an impairment that meets or equals the Listing,

and argued that the district court therefore should have

affirmed the Secretary’s final decision because the court

correctly upheld, as supported by substantial evidence,

the Secretary’s finding that respondent did not have such

an impairment. Pet. App. 2a-4a.7 On March 3, 1989, the

equal a listed impairment nevertheless is disabled because he can-

not perform his past work or other work in the national economy,

in light of his age, education, and work experience. 20 C.F.R.

404.1520(e) and (f), 404.1545(a), 404.1561; Bowen v. City of New

York, 476 U.S. at 471. Because the eligibility of a surviving spouse

is based on the severity of the impairment itself, and not on what

the claimant can do despite that impairment, the regulations do

not provide for an assessment of a surviving spouse’s residual func-

tional capacity.

TIn Sullivan v. Zebley, this Court considered the Secretary’s

regulations requiring a claimant for children’s disability benefits

(under Title XVI of the Social Security Act, 42 U.S.C. 1381 et seq.

(1982 & Supp. IV 1986)) to show an impairment that meets or

equals an impairment in the Listing. The Court held that the

regulations were inconsistent with the relevant statutory provision

governing children’s benefits, 42 U.S.C. 1883c(a)(3)(A) (1982 &

Supp. IV 1986). Slip op. 19. However, in so ruling, the Court ex-

press!y distinguished the statutory provision governing surviving

spouse’s benefits under Title II. See slip op. 14-15. Zebley thus in

no way moots the underlying legal issue that formed the basis of

the Secretary’s appeal in this case. Indeed, the decision in Zebley

reinforces our position on the merits in this case—that the district

court erred in holding invalid the Listing-only rule for surviving

spouses. ,

court of appeals dismissed the Secretary’s appeal for lack

of jurisdiction, holding that the district court’s order was

an interlocutory order, not a “final decision,” for pur-

poses of 28 U.S.C. 1291. Pet. App. la-12a, 19a-20.

The court of appeals first noted its previous articula-

tion of a general rule that “ ‘remands to administrative

agencies are not ordinarily appealable under sectioa

1291,’ because “[s|uch a remand is typically an inter-

locutory step in the adjudicative process and, therefore,

not a final order.”” Pet. App. 4a (quoting United Steel-

workers, Local 1913 v. Union R.R. 648 F.2d 905, 909

(3d Cir. 1981)). The court acknowledged that its prior

decisions established an exception to that general rule

for “cases in which an important legal issue is finally

resolved and review of that issue would be foreclosed ‘as

a practical matter’ if an immediate appeal were unavail-

able.” Pet. App. 4a-5a. But after reviewing those de-

cisions (id. at Ta-9a), the court found that exception

inapplicable here, because, in the court’s view, “ ‘it is not

inexorably so’” that the legal ruling on which the dis-

trict court’s order was based would escape appellate re-

view. /d. at 9a (quoting Bachowski v. Usery, 545 F.2d

363, 373 (3d Cir. 1976)). See generally Pet. App. 9a-

12a. The court reasoned that the question whether the

district court had made an error of law would be subject

to review by the court of appeals if events subsequent to

the district court’s order at issue here unfolded in a par-

ticular way, namely: (a) if the Secretary, after consid-

ering respondent’s residual functional capacity on re-

mand, made an individualized determination that re-

spondent is not precluded from engaging in any gainful

activity; (b) if respondent sought judicial review of that

decision of the Secretary; (c) if the district court re-

versed the Secretary’s new decision and ordered an

award of benefits; and (d) if the Secretary appealed

that subsequent order of the district court to the court

of appeals. 7d. at 9a-1la; see also id. at 7a.

The court candidly proceeded on the assumption that

the Secretary would be denied any opportunity for ap-

pellate review of the district court’s legal ruling if

events did not unfold in the manner just described—

specifically if, on remand, the ALJ or Appeals Council

was required to find respondent disabled and award her

benefits under the district court’s view of the controlling

standards. Pet. App. 9a-10a, lla. But the court con-

cluded that this possible preclusion of any opportunity

for the Secretary to obtain appellate review of the cen-

tral legal issue in the case was “of no more significance”

than it was in another Third Circuit case (Brotherhood

of Maintenance of Way Employees v. Consolidated Rail

Corp., 864 F.2d 283 (1988)) in which it had dismissed

an appeal even though the appellant might be deprived

of any opportunity to challenge the legal ruling that led

to the remand. Pet. App. lla.

The court of appeals also acknowledged that, in a

number of prior cases, it had found appellate jurisdiction

over similar district court orders on the theory that the

order constituted a final rejection of the agency’s posi-

tion that under the governing law, no further adminis-

trative hearing or other proceedings were required. Pet.

App. 7a-9a, 12a. But the court found that rationale in-

apposite in this case because, in its view, the legal issue

presented here is not whether the governing statute or

regulations require a hearing, but whether an additional

factor (respondent’s residual functional capacity) must

be considered by the Secretary before he makes a final

administrative adjudication of the benefits claim. Jd. at

12a. Finally, although the appeal in this case was taken

not by respondent but by the Secretary, who was seeking

reinstatement of his final decision, the court of appeals

found it significant that respondent “ha|d] no vested

right in anything” and that the district court’s order

therefore “did not take away something which she had

already been given,” but rather “postponed final disposi-

tion in her case until the Secretary had considered an

additional factor.” /bid.*

4. The Secretary’s petition for rehearing en bane was

denied, with three judges dissenting. Pet. App. 2la-22a.

Judge Becker, who was a member of the panel, explained

his vote for rehearing en banc in a statement joined by

Judges Sloviter and Stapleton. Jd. at 23a-24a. Judge

Becker stated that he had joined the panel’s opinion be-

cause he felt bound to do so by the Third Circuit’s de-

cision in Bachowski v. Usery, 545 F.2d 363 (1976), even

though Bachowski “seems inconsistent at least with the

spirit of {the Third Circuit’s] later jurisprudence.” Pet.

App. 23a. But Judge Becker explained that if free to do

so, he would follow the reasoning of the recent decision

in Occidental Petroleum Corp. v. SEC, 873 F.2d 325,

328-332 (D.C. Cir. 1989), and hold that the court of ap-

peals had appellate jurisdiction in this case. Judge

Becker elaborated (Pet. App. 23a):

In [Occidental Petroleum), Judge {Douglas] Gins-

burg, speaking for the court, expressed the view

that Congress did not intend that the final order

rule place an agency in a position of dependence

upon the self-interest of others in order to get re-

view of a legal decision that dictates the standards

and procedures to be applied by the agency in mak-

ing its decisions. Here, as in Occidental, the Secre-

tary is between the proverbial rock and a hard place.

If the Secretary, bound by the district court’s opin-

ion, grants benefits on remand to [respondent], he

cannot appeal. If the Secretary does not grant bene-

fits on remand, whether or not the legal issue will be

SIn light of its jurisdictional holding, the court of appeals did

not express an opinion on the district court’s ruling that “a widow

whose impairment does not meet or equal any in the listing is en-

titled to have her residual functional capacity considered.” Pet.

App. 3a-4a n.4. But the court did note its prior holding that “a

stricter standard does apply in widow’s disability cases.” Jd. at 4a

n.4 (citing Smith v. Schweiker, 671 F.2d 789, 790 (3d Cir. 1982) ).

reviewed depends on whether [respondent] decides

to press an appeal.'*!

SUMMARY OF ARGUMENT

The court of appeals had jurisdiction of the Secre-

tary’s appeal under 28 U.S.C. 1291. The district court’s

order in this case was a “final decision” for purposes of

that provision because it constituted a final rejection of

the particular decision of the Secretary that was before

the district court on judicial review.

1. The jurisdiction of the court of appeals is estab-

lished by the text and structure of 42 U.S.C. 405(g).

That provision makes it clear that the district court’s

decision here—which rejected on the merits the legal

standard underlying the Secretary’s decision—is a

“judgment” that is “final” and subject to appellate re-

view even though, as an aspect of its relief, the court

remanded the cause to the Secretary for rehearing under

a different legal standard. That conclusion is reinforced

by Congress’s identification in Section 405(g) of certain

other remands that are interlocutory in nature and that

do not constitute final judgments. This Court’s decision

in Sullivan v. Hudson, 109 S. Ct. 2248 (1989), relied on

by respondent, is not to the contrary, since it dealt only

with the very different question of an award of attor-

ney’s fees, under the Equal Access to Justice Act

(EAJA), 28 U.S.C. 2412, for legal services rendered to a

claimant on remand.

2. The conclusion that 42 U.S.C. 405(g) renders the

district court’s order appealable is strongly supported by

established principles governing judicial review of

agency action and the appealability of district court

orders under 28 U.S.C. 1291. Indeed, this Court has pre-

viously granted review on the merits of court of appeals

® On September 7, 1989, the district court, with respondent’s con-

sent, stayed its order of remand pending this Court’s disposition

of the instant petition for a writ of certiorari.

decisions in situations indistinguishable from that pre-

sented here. And it has itself reviewed decisions under

the Hobbs Act, 28 U.S.C. 2341 et seg., which authorizes

such review of “final” judgments of the courts of appeals,

28 U.S.C. 2350, in instances in which the court of ap-

peals’ judgment has included a remand to the agency for

further proceedings.

This Court has recognized in a variety of instances

that Section 1291 is addressed to the maintenance of a

healthy legal system, that it must be given a practical

and not a technical construction, and that it is therefore

not limited to orders that terminate the proceedings in

all respects. Instances in which appeals have been al-

lowed include cases involving “collateral orders,” e.¢.,

Cohen V. Beneficial Industrial Loan Corp., 337 U.S. 541

(1949), and cases in which, as a practical matter, there

would be no further litigation of the issue in the federal

system, e.g., Moses H. Cone Memorial Hospital v. Mer-

cury Construction Corp., 460 U.S. 7 (1983).

This case differs from prior cases in which the Court

has considered the appealability question because the

order at issue here was not entered in the course of

ordinary civil or criminal litigation. It was entered, in-

stead, in the context of judicial review of final agency

action. In that context, when a district court holds an

agency’s decision unlawful, a coordinate Branch of gov-

ernment is immediately aggrieved. Moreover, the nature

of judicial review of agency action is such that the dis-

trict court’s judgment effectively ends the judicial pro-

ceeding on the merits; in this case, the matter before the

district court was the agency decision under review, not

respondent’s underlying claim for benefits. The division

of functions between agency and reviewing court leaves

the resolution of that claim to the agency.

Even if the proceedings before the district court and

those before the Secretary are viewed as aspects of a

broader controversy over respondent’s claim to benefits,

the principles informing the “collateral order” doctrine

support appellate review here. The Secretary’s appeal

of the district court order does not interfere with any

on-going proceedings in the district court or undermine

the independence of the district judge. On the contrary,

allowance of an appeal is necessary to vindicate the spe-

cial role and distinct responsibilities of the Secretary, who

is the Executive Branch officer responsible fer adminis-

tering the Social Security Act.

Indeed, the Secretary’s right to appeal is consistent

with the three factors the Court has identified in apply-

ing the collateral order doctrine. See Coopers & Lybrand

v. Livesay, 437 U.S. 463, 468 (1978). First, the district

court has conclusively determined a disputed question of

law. Second, the district court order is “completely sep-

arate” from the merits in the relevant sense because

there will be no further development of legal or factuai

issues by the district court at a trial—the further pro-

ceeding contemplated will, instead, take place in another

Branch under a different legal standard—and because the

issue resolved by the district court cannot be reconsidered

by the Secretary on remand. Finally, the district court’s

ruling is not effectively reviewable on appeal from a later

judgment because, if respondent prevails on remand or

does not pursue her claim, the Secretary will be unable

to appeal from that decision.

ARGUMENT

THE COURT OF APPEALS HAD JURISDICTION OF

THE SECRETARY’S APPEAL

Section 1291 of Title 28 provides that “t]he courts of

appeals * * * shall have jurisdiction of appeals from all

final decisions of the district courts * * * except where

a direct review may be had in the Supreme Court.” This

provision is a descendant of Section 22 of the Judiciary

Act of 1789, ch. 20, 1 Stat. 84, which provided that

“final decrees and judgments” in civil actions in a dis-

trict court could be reexamined and affirmed or reversed

by the circuit court. For these purposes, a final judg-

ment is normally deemed not to have been entered

“‘until there has been a decision by the District Court

that “ends the litigation on the merits and leaves nothing

for the court to do but execute its judgment.”’” Mid-

land Asphalt Corp. v. United States, 109 S. Ct. 1494,

1497 (1989) (quoting Van Cauwenberghe v. Biard, 108

S. Ct. 1945, 1949 (1988), and Catlin v. United States,

324 U.S. 229, 233 (1945) ).

The Court has recognized, however, that under Section

1291, “it is a final decision that Congress has made re-

viewable,” not a final judgment. Stack v. Boyle, 342

U.S. 1, 12 (1951) (opinion of Jackson, J.). As a result,

“ ‘a decision ‘final’ within the meaning of § 1291 does not

necessarily mean the last order possible to be made in

a case.’”’ Mitchell v. Forsyth, 472 U.S. 511, 524 (1985)

(quoting Gillespie v. United States Stee! Corp., 379 U.S.

148, 152 (1964)). And in determining whether a par-

ticular type of order is immediately appealable under

Section 1291, the requirement of finality must be given

a “practical rather than a technical construction.”

Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541,

546 (1949).

The district court’s order in this case is a “final de-

cision” for purposes of 28 U.S.C. 1291 because it con-

stituted a final rejection of the particular decision of the

Secretary that was before the district court on judicial

review; the district court’s decision therefore terminated

the relevant judicial proceedings. The administrative de-

cision before the court denied respondent’s application for

surviving spouse’s disability benefits on the ground that

she had not satisfied the pertinent regulatory requirement

(that her impairment meet or equal an impairment in the

Listing). The district court sustained, as supported by

substantial evidence, the Secretary’s finding that respond-

ent had net satisfied that requirement. Pet. App. 16a.

But instead of affirming the Secretary’s decision based on

that determination, in accordance with governing regu-

lations, the court held that the Secretary must inquire

into whether respondent ‘s in fact unable to perform any

gainful activity. taking into account her residual func-

tional capacity. /d. at 17a-18a, 25a.

Neither the court of appeals nor respondent disputes

that the district court’s order effectively invalidated the

Secretary’s regulations in this case. Compare Heckler v.

Campbell, 461 U.S. 458, 465-466 (1983). A district court

order having that effect is a “tinal decision” from which

the Secretary may take an appeal pursuant to 28 U.S.C.

1291. The Secretary is net divested of his right to ap-

peal the order simply because the district court, in

addition to and as a consequence of those rulings, re-

manded the cause to the Secretary for a rehearing under

different legal standards that the court itself imposed.

The subject of the Secretary’s appeal is the district

court’s rejection of the final decision of the Secretar;

that was before the court on judicial review, not the

court’s further action in remanding the maiter to the

Secretary to render a new decision. This case therefore

differs from those in which a court remands a matter to

an agency for the receipt of new evidence before the

court addresses the merits of the particular administra-

tive decision that is pending on judicial review.” A re-

mand of the latter sort occurs at an interlocutory stage

of the judicial proceeding; it is nonappealable because

it precedes the court’s final adjudication of the subject

of the civil action (the validity of the administrative de-

cision). An appeal at that stage could challenge only the

remand itself, not any legal rulings by the court on the

merits 9f the administrative decision.

The Secretary’s right of appeal in circumstances like

those presented here is supported by the text and struc-

ture of 42 U.S.C. 405(g), as well as by the principles

that govern judicial review of agency action and inform

this Court’s construction of 28 U.S.C. 1291.

I. THE TEXT AND STRUCTURE OF 42 U.S.C. 405(g)

ESTABLISH THAT THE DISTRICT COURT'S OR-

DER IS A FINAL JUDGMENT FROM WHICH THE

SECRETARY MAY APPEAL UNDER 28 U.S.C. 1291

The text and structure of 42 U.S.C. 405(g) establish

that the court of appeals had jurisdiction of the Secre-

tary’s appeal in this case. Indeed, Congress has specified

in Section 405(g) that a district court decision such as

that at issue here is a “judgment” that is “final” and

subject to appellate review “in the same manner as the

judgment in other civil cases,” even though the court, as

an aspect of its relief, remands the cause to the Secretary

for a hearing under different legal or evidentiary stand-

ards. This conclusion is reinforced by Congress’s identi-

fication in Section 405(g) of certain other remands

that do not follow from the court’s ruling on the valid-

ity of the Secretary’s decision, but instead are intended

to furnish an opportunity for supplementation or clari-

©The prior Third Circuit cases cited by the panel below in

which jurisdiction under 28 U.S.C. 1291 was found lacking involved

appeals from such orders, which remanded the case to the Secretary

pursuant to the sixth sentence of 42 U.S.C. 405(@), discussed at

pages 21-22, infra. See Pet. App. 5a, citing Mayersky v. Crlebrezze,

353 F.2d 89 (3d Cir. 1965), and Marshall v. Celebrezze, 351 F.2d

467 (3d Cir. 1965).

fication of the administrative record and decision. The

Secretary, like the claimant, may not appeal the latter

type of order under 28 U.S.C. 1291 because it does not

dispose of the merits of the cause of action for judicial

review of the Secretary’s decision. The text of Section

405(g) thus furnishes a bright line between those district

court orders the Secretary may appeal and those he may

not. That bright line should be given effect in this case.

A. Section 405(g) establishes a simple, expeditious,

and carefully tailored procedure by which claimants may

invoke the jurisdiction of district courts in Social Secur-

ity cases. That procedure serves to circumscribe the role

of the courts in matters arising under the Social Secur-

ity Act and, correspondingly, to preserve and respect the

primary jurisdiction of the Secretary in administering

the massive benefit programs established by the Act—

both in the formulation of broad policies (see 42 U.S.C.

405(a); Bowen v. Yuckert, 482 U.S. at 145) and in the

adjudication of individual claims for benefits. Wein-

berger V. Salfi, 422 U.S. 749, 765-767 (1975).

Consistent with this legislative scheme, Section 405(g)

does not create an ordinary civil cause of action against

the United States for a money judgment in the amount

of benefits allegedly owing under the Socia! Security

Act. Nor does the statute authorize a trial de novo of the

sort that would be conducted in the adjudication of an

ordinary civil cause of action. To the contrary, Section

405(g) authorizes a special and limited form of civil

action: an action for judicial review of the Secretary's

final decision on the plaintiff’s claim for benefits. The

court’s review and decision must be based on the record

developed by and presented to the Secretary during the

four-stage administrative review process. It is during

that administrative process, not on judicial review, that

the claimant has an opportunity for a de novo eviden-

tiary hearing. 42 U.S.C. 402(b)(1) (1982 & Supp. IV

1986). As a result, the subject matter of the civil action

authorized by 42 U.S.C. 405(g) is not the plaintiff's

underlying monetary claim for benefits under the Social

Security Act, but rather the validity of the Secretary’s

final decision disposing of that claim.

This character of a civil action under Section 405(g)

is demonstrated by the statutory text in a number of

respects.'' The first sentence of Section 405(g) provides

that “[a)ny individual, after any final decision of the

Secretary made after a hearing to which he was a party,

* * * may obtain a review of such decision by a civil

action commenced within sixty days after the mailing to

him of notice of such decision or within such further

time as the Secretary may allow.” The third sentence

requires the Secretary, as part of his answer to the com-

plaint, to “file a certified copy of the transcript of the

(administrative] record including the evidence upon which

the findings and decision complained of are based.” These

two sentences confirm that (i) the subject of the civil

action is the “final decision” (and supporting findings)

of the Secretary that the plaintiff has “complained of,”

(ii) the scope of the civil action is limited to “a review of

such decision,” and (iii) the only record on which the

court may base its review is the record relied upon by

the Secretary and furnished by him to the court.'”

The fourth sentence of Section 405(g) both confers

adjudicatory power on the court and limits that power.

This sentence states that the district court “shall have

1! Section 405(g) is reproduced in an appendix to this brief. In

that appendix, we have numbered the sentences of Section 405(g)

sequentially, setting off by brackets the numerical designations we

have added. See App., infra, la-2a.

1 Consistent with these provisions and the language in the

fourth sentence of Section 405(g) authorizing a district court to

enter a judgment only “upon the pleadings and transcript of the

record,” the district courts typically decide cases under Section

405(g) on cross-motions for summary judgment or a substantially

equivalent procedure. See 4 Social Security Law and Practice

§§ 56 :26-56 :31 (1987).

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 in this case: the court “af-

firm{ed]” the Secretary’s decision insofar as it found

that respondent did not satisfy the requirement of the

governing regulations by showing an impairment that

meets or equals the Listing; the court “modif{ied]” or

“revers(ed]” the Secretary’s decision insofar as it denied

respondent’s claim on that basis; and the court then

“remand(ed] the cause for a rehearing,” in which the

Secretary must apply a legal standard other than the one

set forth in the regulations. The text and backgrcund

of Section 405(g) indicate that the Secretary may appeal

such an order.

As an initial matter, Congress’s use of the term “judg-

ment” in the fourth sentence of Section 405(g) to de-

scribe the disposition that the district court is em-

powered to make indicates in itself that the Secretary

may appeal such an order under 28 U.S.C. 1291. The

word “judgment” is a term of art that typically connotes

the final disposition of a case, see 6 J. Moore, W. Tag-

gart & J. Wicker, Moore’s Federal Practice § 54.02, at p.

54-22 & nn. 2, 3 (2d ed. 1988), and an order that so

“ends the litigation on the merits” may be appealed by

the party aggrieved, pursuant to 28 U.S.C. 1291. Catlin

v. United States, 324 U.S. at 233.

There is, moreover, particular reason to believe that

Congress understood when it enacted Section 405(‘g) in

1939 ** that the term “judgment” connotes an order from

which an appeal lies. Rule 54(a) of the Federal Rules

of Civil Procedure expressly provides that the term “judg-

ment” “includes a decree and any order from which an

appeal lies.” The Federal Rules, including Rule 54/a),

became effective in 1938 (Fed. R. Civ. P. 86(a); 308

18 Act of Aug. 10, 1939, ch. 666, § 201, 53 Stat. 1368.

U.S. at 653, 732, 766), less than one year before Congress

enacted Section 405(g). Rule 1 of the Civil Rules pro-

vides, as it did in 1938 (308 U.S. at 663), that the Rules

govern the procedure “in all suits of a civil nature,”

language necessarily encompassing the suits under the

Social Security Act that Congress authorized when it

enacted Section 405(g) in 1939. See Califano v. Yama-

saki, 442 U.S. 682, 700 (1979). Furthermore, under the

Rules Enabling Act, the Rules did not take effect until

the close of the 1938 Session of Congress, the Session in

which they had been reported to Congress by the Attor-

ney General. See Act of June 19, 1934, ch. 651 § 2, 48

Stat. 1064, codified as amended at 28 U.S.C. 2072-2074.

It is therefore reasonable to conclude that Congress in-

tended the term “judgment” in Section 405(g) to have

the same meaning as that term had recently and defini-

tively been given under the Rules governing procedure in

civil actions generally. See Sibbach v. Wilson & Co., 312

U.S. 1, 14-16 (1941). Thus, the straightforward reading

of the fourth sentence of Section 405(g) is that a district

court has power to enter a “judgment” modifying or

reversing the decision of the Secretary, and that the judg-

ment is an appealable order even if the court, as a con-

sequence of its legal ruling, also remands the cause to the

Secretary for a rehearing.

Any doubt on this question would appear to be elim-

inated by the eighth sentence of 42 U.S.C. 405(g). The

eighth sentence 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.” Because the fourth sentence of Section

405(g) makes clear that the term “judgment” encom-

passes an order modifying or reversing the Secretary’s

decision whether or not the court also remands the cause

to the Secretary, the existence of a remand does not

detract from the “final[ity]” of the ju¢gment for purposes

of the eighth sentence. As noted above, it is undisputed

that a final judgment is an appealable “final decision”

within the meaning of 28 U.S.C. 1291. See Midland

Asphalt Corp. v. United States, 109 S. Ct. at 1497.

In any event, the eighth sentence further states that a

judgment under 42 U.S.C. 405(g) “shall be subject to re-

view in the same manner as a judgment in other civil ac-

tions.” While the legislative history does not elaborate on

this provision,’* it apparently was intended only to clarify

where an appeal of the district court’s concededly final

judgment may be taken, not whether an appeal lies. At

the time Section 405(g) was enacted, the usual “manner”

in which a party obtained review of a judgment in a civil

action was by appeal to the court of appeals pursuant to

what is now 28 U.S.C. 1291. But when a district court

held a provision of the Social Security Act unconstitu-

tional, review was by direct appeal to this Court, pursuant

to the special jurisdictional statute passed in 1937, only

two years before 42 U.S.C. 405(g) was enacted. Act of

Aug. 24, 1937, § 2, ch. 754, 50 Stat. 752, 28 U.S.C. 1252

(1982); see, e.g., Fleming v. Nestor, 363 U.S. 603, 604

(1960); Bowen v. Owens, 476 U.S. 340, 345 (1986).

14 The House and Senate Reports on the 1939 amendments sum-

marized the provisions of Section 405(g) in identical terms, with-

out specific reference to the eighth sentence. The Reports explained

the need for Section 405(g) by noting that the then-present provi-

sions of the Act “[did] not specify what remedy, if any, is open to

a claimant in the event his claim to benefits is denied by the [Social

Security] Board,” and that “[t]he provisions of this subsection

are similar to those made for the review of decisions of many

administrative bodies.” H.R. Rep. No. 728. 76th Cong., Ist Sess.

43 (1939); S. Rep. No. 734, 76th Cong., Ist Sess. 52 (1939).

1 This interpretation of the eighth sentence as relating to the

court to which an appeal may be taken is supported by a section-

by-section analysis prepared by the responsible House Subcommittee

following enactment of the Social Security Amendments of 1977,

Pub. L. No. 95-216, 91 Stat. 1509. In describing Section 405(¢),

which was not amended by the 1977 amendments, the Subcommittee

stated: “The judgment shall be final except that it shall be subject

to review in the same manner as other civil actions; in a court

of appeals and in the Supreme Court under certain circum-

Thus, the eighth sentence of Section 405(g) preserved

the alternative avenues of appellate review,’* and, read in

connection with the fourth sentence, firmly establishes

that the Secretary may appeal the district court’s order

here.

This conclusion is supported by the other provisions of

Section 405(g) that describe the nature and scope of the

civil action it authorizes. As expiained above, those pro-

visions make clear that it is not the underlying claim for

benefits, but rather the particular final decision of the

Secretary that the claimant has “complained of” in his

action for judicial review, that is the subject of the civil

action. Accordingly, where, as here, the district court en-

ters an order holding that particular decision to have been

erroneous and then remands to the Secretary for a re-

hearing, the court’s order ends the relevant litigation on

the merits. After the further proceedings on remand, the

Secretary will render a new decision (based on new find-

ings), in conformity with the legal rulings in the district

court’s order, and it is that new decision, not the one the

district court previously set aside, that will be the sub-

ject of any further proceedings for judicial review that

the claimant may institute under Section 405(g). Be-

cause the two rounds of judicial proceedings are con-

ceptually and legally distinct (despite their relation to

the same underlying claim for benefits), it is not surpris-

ing that Congress, in enacting Section 405(g), deemed

the order that ends the first round to be a final judgment

stances.” Subcomm. on Social Security of the House Comm. on

Ways & Means, 95th Cong., 2d Sess., The Social Security Amend-

ments of 1977: Brief Summary of Major Provisions and Detailed

Comparison With Prior Law 26 (Comm. Print 1977).

16 Because the direct appeal statute was repealed by the Act of

June 27, 1988, Pub. L. No. 100-352, § 1, 102 Stat. 662, the exclusive

“manner” by which the Secretary now may obtain appellate review

of the district court’s order in a Social Security case is in the court

of appeals, pursuant to 28 U.S.C. 1291.

that is “subject to review in the same manner as a judg-

ment in other civil actions.”

B. Respondent ignores the fourth and eighth sentences

of 42 U.S.C. 405(g), which speak directly to the appeal-

ability issue, and focuses instead (Br. in Opp. 22-27, 29-

31, 52-55) on the sixth sentence. In her view, the sixth

‘7 A number of courts have held that a Social Security claimant

may not take an appeal under 28 U.S.C. 1291 even from an order

that remands the cause to the Secretary after reaching the merits

of the Secretary’s decision, since the claimant may seek judicial

review of the new decision rendered by the Secretary on remand

if that decision is adverse to him. Bohms v. Gardner, 381 F.2d

283 (8th Cir. 1967), cert. denied, 390 U.S. 964 (1968); Beach vy.

Bowen, 788 F.2d 1399 (8th Cir. 1986); Farr v. Heckler, 729 F.2d

1426 (lith Cir. 1984); Howell v. Schweiker, 699 F.2d 524 (11th

Cir. 1983). In doing so, the courts were agreeing with the govern-

ment’s position in those cases that no appeal would lie.

Under the rationale presented in this part of our brief, which

relies on the language of Section 405(g) deeming an order like

that entered here to be a final judgment subject to appeal in the

same manner as a judgment in other civil actions, such decisions

may well be appealable by a claimant who could show that he was

aggrieved by a ruling of law by the district court—e., that if

the court’s ruling was in error he was entitled to outright reversal

of the Secretary’s decision. Such appeals, however, would surely

be infrequent. (In this case, for instance, respondent did not cross-

appeal from the district court’s decision upholding the Secretary's

determination that she did not show an impairment that met or

equaled the Listing.) This is so for three reasons. First, the dis-

trict court’s order finding the Secretary’s decision to have been

legally erroneous and remanding the cause to the Secretary for

further proceedings generally represents a substantial victory for

a claimant. Second, any additional gains from a time-consuming ap-

peal are unlikely, because a district court’s conclusion that further

proceedings should be conducted by the Secretary before there is

a final resolution of the claim for benefits would be subject to only

the most limited review by a court of appeals. Third, and by way

of contrast, the claimant has a very good prospect of prevailing

in the proceedings on remand: we have been informed by the De-

partment of Health and Human Services that, following additional

development of the record on remand, benefits are awarded in

approximately 65% of Social Security cases that are remanded to

the Secretary.

sentence suggests that all orders including a remand to

the Secretary are interlocutory and nonappealable because

in any remand to the Secretary governed by that sentence,

the Secretary is required to file his amended findings and

decision with the court. Respondent misapprehends the

statutory scheme. In fact, the sixth sentence of Section

405(g) supports our position. It identifies district court

orders that (in contrast to the category of orders charar-

terized as a “judgment” and exemplified by that at issue

here) are not appealable under 28 U.S.C. 1291 because

they only remand the case to the Secretary (for the re-

ceipt of new evidence or for a comparably interlocutory

undertaking) and do not reach the validity of the Secre-

tary’s decision on the merits.

The sixth sentence of Section 405(g) contains two dis-

tinct authorizations for the district court to order a

remand to the Secretary in circumstances other than

those encompassed by the fourth sentence—i.e., other than

those in which the court reaches the merits of the validity

of the Secretary’s decision. The first permits the district

court, “on motion of the Secretary made for good cause

shown before he files his answers,” to remand the case to

the Secretary for “further action.” This mechanism af-

fords the Secretary an opportunity to respond to new

evidence or allegations that have come to light since the

Appeals Council rendered its decision denying the claim.

It also permits the Secretary to correct deficiencies in the

record or in his findings and decision that are noticed

during preparation of the defense of the administrative

decision. Compare Ford Motor Co. v. NLRB, 305 U.S.

364, 372-373 (1959).

The other authorization in the sixth sentence permits

the court, at any time, to order that “additional evidence”

be taken before the Secretary, but only if there is a show-

ing of “new” and “material” evidence and of good cause

for the failure to incorporate it into the record in a prior

proceeding. Because all evidence bearing on the claim for

benefits is received and weighed by the Secretary in the

first instance at all stages of the claims-adjudication

process, it is consistent with the statutory scheme for a

case pending on judicial review to be remanded to the

Secretary for any necessary supplementation of the record

-——and for the Secretary to make additional or modified

findings and to render a modified decision in light of

that evidence—rather than to have the court itself receive

and weigh the new evidence in the first instance.

The concluding portion of the sixth sentence of Section

405(g) requires the Secretary, on a remand covered by

that sentence, to file with the court any additional or

modified findings of fact or decision. Only after such re-

consideration can the court properly pass on the validity

of the Secretary’s decision (as so modified) and affirm,

modify, or reverse it. An order remanding a case to the

Secretary pursuant to the sixth sentence that is entered

before the court passes on the validity of the Secretary’s

decision is not a “final decision” and is therefore not sub-

ject to appeal by either the Secretary or the claimant

under 28 U.S.C. 1291. Cohen v. Perales, 412 F.2d 44, 48

(5th Cir. 1969), rev’d on other grounds, 402 U.S. 389

(1971); Dalto v. Richardson, 434 F.2d 1018 (2d Cir.

1970), cert. denied, 401 U.S. 979 (1971); see also cases

cited in note 10, supra.

Contrary to respondent’s contention (Br. in Opp. 25,

27, 52-53), the order in the instant case was not gov-

erned by the limited remand authority in the sixth sen-

tence of Section 405(g). Instead, the district court re-

manded the case to the Secretary only as a consequence of

its holding on the merits that the Secretary’s decision was

legally erroneous. The Secretary therefore was entitled

to appeal that order, as contemplated by the fourth and

eighth sentences of Section 405(g). Other courts of ap-

peals have consistently recognized the distinction between

those orders remanding the entire cause to the Secretary

as a consequence of the court’s ruling that the Secretary’s

decision was unlawful, and pure remand orders, which

are governed by and subject to the distinct limitations

in the sixth sentence of Section 405(g). Aubeuf Vv.

Schweiker, 649 F.2d 107, 115-116 (2d Cir. 1981) ; Carter

v. Schweiker, 649 F.2d 937, 942 (2d Cir. 1981); Kane v.

Heckler, 731 F.2d 1216, 1220 (5th Cir. 1984); Garfield

v. Schweiker, 732 F.2d 605, 610 n.8 (7th Cir. 1984);

Bauzo v. Bowen, 803 F.2d 917, 926 (7th Cir. 1986);

Diorio v. Heckler, 721 F.2d 726, 729 (11th Cir. 1983).

See also J. Mashaw, et al., Social Security Hearings and

Appeals 130 (1978) [hereinafter Social Security Hearings

and Appeals] (the fourth sentence of Section 405(z)

differs from the sixth sentence and “gives the court dis-

cretion to remand in cases where the Secretary’s decision

is found to be unsupported by substantial evidence or

where some legal error, substantive or procedural, has

been committed”); H.R. Rep. No. 100, 96th Cong., Ist

Sess. 13 (1979) (report on 1980 amendments to the sixth

sentence of Section 405 (g) )."*

18 The volume Social Security Hearings and Appeals, upon which

this Court has relied (see Heckler v. Campbell, 461 U.S. at 461 &

n.2), is essentially identical to a report on the claims-adjudication

process that led to the amendment of the sixth sentence of Section

405(g) in 1980. Center for Administrative Justice, Final Report:

Study of Social Security Administration Hearing System 262 (Oct.

1977). Prior to 1980, the sixth sentence did not require a showing

of good cause for a remand on the Secretary’s motion and did not

require a showing of materiality or good cause for the claimant’s

failure to introduce new evidence in a prior proceeding. See 42

U.S.C. 405(g) (1976). The report recommended (Center for Ad-

ministrative Justice, supra, at 263-273) that the sixth sentence

be amended to restrict such remands, in order to improve the

quality of decision-making by the ALJs and the Appeals Council and

to encourage timely production of evidence by claimants. Accord

Social Security Hearings and Appeals at 130-136.

Congress adopted this recommendation by amending the first

portion of the sixth sentence to read as it now does. Social Secu: ity

Disability Amendments of 1980, Pub. L. No. 96-265, § 307, 94 Stat.

458. The House Report explained that this amendment of the sixth

sentence was “not to be construed as a limitation of judicial re-

mands currently recognized under the law in cases in which the

In respondent’s view (Br. in Opp. 22-23, 29-32, 39-40),

our submission that the order in this case is a final judg-

ment subject to appeal by the Secretary is inconsistent

with Sullivan v. Hudson, 109 S. Ct. 2248 (1989). That

case, however, involved the award of a**orney’s fees un-

der the Equal Access to Justice Act (EAJA), 28 U.S.C.

2412(d)(1)(A), not appellate jurisdiction. The Court

held in Sullivan v. Hudson that proceedings before the

Secretary on remand from a district court are suffi-

ciently related to the civil action for judicial review

under 42 U.S.C. 405(g) to permit a court, as part of

an attorney’s fees award under EAJA, to award fees

for services rendered before the Secretary on remand.

The Court held that a claimant is not, as a general mat-

ter, a prevailing party when a district court remands

the matter to the Secretary, and it noted that under

EAJA, an application for attorney’s fees must be filed

“within thirty days of final judgment in the action.”

28 U.S.C. 2412(d)(1)(B). 109 S. Ct. at 2254-2255. In

these circumstances, the Court noted that “for purposes

of the EAJA,” the claimant’s status as a prevailing

party and the final judgment in the civil action would

often be dependent on the successful completion of the

proceedings on remand to the Secretary. Jd. at 2255.

The Court in Sullivan v. Hudson did not address the

distinct question whether an order effectively setting

aside the Secretary’s decision and remanding the cause

to the Secretary for redetermination is a final judgment

for purposes of appealability under 28 U.S.C. 1291. Nor

did it address the specific language in the fourth and

eighth sentences of Section 405(g) that refers to such

Secretary has failed to provide a full and fair hearing, to make

explicit findings, or to have correctly apply [sic] the law and regu-

lations.” H.R. Rep. No. 100, supra, at 13. In at least the first and

third of these examples, the district court has held the Secretary’s

decision unlawful, and those examples therefore would be covered by

the fourth sentence of Section 405(g).

an order as a “judgment” that is “final” and “subject

to review ip the same manner as a judgment in other

civil actions.” There is, accordingly, no inconsistency

between the holding in Sullivan v. Hudson that attorney’s

fees may be awarded after a remand and our submis-

sion here that the district court’s order is a final judg-

ment within the meaning of 42 U.S.C. 405(g) and is,

for that reason, appealable under 28 U.S.C. 1291. See

Budinich v. Becton Dickinson & Co., 486 U.S. 199 (1988)

(decision on merits is appealable under 28 U.S.C. 1291

even though recoverability of attorney’s fees remains to

be decided ) ."”

1 The Court took the Secretary to have conceded in Sullivan

v. Hudson (apparently on the basis of the sixth sentence of

Section 405(g)) that a district court order that includes a remand

to the Secretary is not a final determination of the civii action and

that the district court “ ‘retains jurisdiction to review any deter-

mination rendered on remand.’” 109 S. Ct. at 2255, quoting Pet.

Br. 16-17. The cited sentences of our opening brief, which essen-

tially restated the respondent’s position, were somewhat ambiguous.

But we specifically argued in our reply brief (at 14-16) that an

order holding the Secretary's decision unlawful and remanding for

new proceedings under a different legal standard is governed not

by the sixth sentence, but by the fourth and eighth sentences, which

render the order a “final judgment” that effectively terminates the

judicial proceedings for review of the particular decision of the

Secretary before the court. We also stated (Reply Br. 15-17 n.8)

our position that the Secretary may appeal such an order. As a

result, our submission in Su/livan v. Hudson, taken as a whole, did

not concede that an order such as that at issue here is a non-final

decision, especially fur purposes of the Secretary’s right of appeal.

Nor did it concede that, by operation of the sixth sentence of Sec-

tion 405(g), the district court automatically retains jurisdiction to

conduct plenary review of any new determination rendered by the

Secretary after a remand that is not governed by that sentence.

Although a district court may inherently retain some jurisdic-

tion for limited purposes after a remand—e.g., to assure that its

prior mandate is carried out or to award attorney's fees if the

claimant prevails in the proceedings on remand (109 S. Ct. at

2254-2255 )—that jurisdiction does not confer power on the court

to award relief “of a different kind or on a different principle.”

Dugas v. American Surety Co., 300 U.S. 414, 428 (1937); see

Il. THE RIGHT OF THE SECRETARY TO APPEAL IS

SUPPORTED BY GENERAL PRINCIPLES GOV-

ERNING THE CONSTRUCTION OF 28 U.S.C. 1291

AND THE SCOPE OF JUDICIAL REVIEW OF

AGENCY ACTION

The conclusion that 42 U.S.C. 405(g) renders the dis-

trict court's order in this case a final, appealable judg-

ment is strongly supported by established principles gov-

erning judicial review of agency action and the appeal-

ability of district court orders under 28 U.S.C. 1291

generally. Indeed, Section 405(g) is but a particular

statutory expression of those general principles. The

common and preferred practice, when a court finds

agency action unlawful and sets it aside, is for the court

to remand the matter to the agency for further proceed-

ings. That practice limits judicial intrusion into the ad-

ministrative process and assures respect for the autonomy

and distinct responsibilities of the agency charged by

Congress with administering the statute. I: would be a

perverse result if a court’s inclusion of a remand to the

agency in its order hoiding the agency’s action unlawful

were to divest the agency of its right to seek appellate

review of the court’s order, especially since such an or-

der may have seriously adverse consequences for the

agency and the public. Fortunately, although the Court

has not specifically addressed the jurisdictional issue, the

actual practice of the courts, including this Court, has

been to entertain appeals in such cases.

Of particular relevance here, the Court previously has

granted review and decided the merits in a Social Se

curity case in which the district court held erroneous

the Seeretary’s decision denying benefits and remanded

for a new hearing. See Richardson v. Perales, 402 U.S.

389 (1971). Although the Court recited the facts of the

Chemical Leaman Tank Lines, Inc. v. United States, 446 F. Supp.

721, 724 (D.D.C, 1978) (three-judge court). Any such retention of

jurisdiction therefore cannot cut off the Secretary's right to appeal

the order insofar as it held his prior decision unlawful.

district court’s ruling and remand, id. at 397-398, it did

not discuss the jurisdictional issue. But because this

Court’s jurisdiction under 28 U.S.C. 1254(1) depended on

whether the case was properiy “in” the court of appeals

under 28 U.S.C. 1291 (see United States v. Nixon, 418

U.S. 683, 690, 692 (1974))—and because the jurisdic-

tional issue was extensively discussed by the court of ap-

peals (Cohen v. Perales, 412 F.2d 44, 48-49 (5th Cir.

1969) )—the Court presumably would have felt obligated

to address the issue if it had reservations about the court

of appeals’ jurisdictional holding.” Consistent with

Perales, which is virtually indistinguishable from this

case, the courts of appeals have, until quite recently, been

unanimous in their view that the Secretary may appeal

such an order in an action under_42 U.S.C. 405(g).”

20 Similarly, in Traynor v. Turnage, 485 U.S. 535 (1988), one of

the appellate decisions before the Court was rendered on an appeal

by the Administrator of Veterans Affairs from a district court

order that held the Administrator’s order unlawful and remanded

to the Administrator for further proceedings. Jd. at 540; see

McKelvey Vv. Walters, 596 F. Supp. 1317, 1825 (D.D.C. 1984).

21 See Lopez Lopez v. Secretary of HEW, 512 F.2d 1155, 1156

(1st Cir. 1975); Colon v. Secretary of HHS, 877 F.2d 148, 149-151

(Ist Cir. 1989); McGill v. Secretary of HHS, 712 F.2d 28, 29-30

(2d Cir. 1983) (dictum), cert. denied, 465 U.S. 1068 (1984); Souch

v. Califano, 599 F.2d 577, 578 n.1 (4th Cir. 1979) (but see Harper

v. Bowen, 854 F.2d 678 (4th Cir. 1988) (dismissing appeal in par-

ticular circumstances)); Gold v. Weinberger, 473 F.2d 1376, 1378

(5th Cir. 1973) (but see Haywood v. Bowen, No. 88-1280 (Nov. 30,

1988), 862 F.2d 873 (1988) (Table) (dismissing appeal without dis-

cussing court’s own prior decision in Perales)); Edmond vy. Secre-

tary of HHS, No. 89-3161 (6th Cir. Apr. 19, 1989); Jamieson v.

Folsom, 311 F.2d 506, 507 (7th Cir.), cert. denied, 374 U.S. 487

(1963) ; Crowder v. Sullivan, No, 89-2681 (7th Cir. Mar. 5, 1990) ;

Gardner V. Moon, 360 F.2d 556, 558 n.2 (8th Cir. 1966) (but see

McCoy V. Schweiker, 683 F.2d 1138, 1141 n.2 (8th Cir. 1982) (en

banc) (dictum)); Stone v. Heckler, 722 F.2d 464, 466-468 (9th

Cir. 1983); Ensey v. Richardson, 469 F.2d 664 (9th Cir. 1972);

Paluso Vv. Mathews, 573 F.2d 4, 7-8 (10th Cir. 1978) (Black Lung

case); Davidson v. Secretary of HHS, No. 88-1472 (10th Cir.

Oct. 12, 1989); Pickett v. Bowen, 833 F.2d 288, 290-291 (11th Cir.

1987) ; Huie v. Bowen, 788 F.2d 698, 701-703 (11th Cir. 1988) (but

Equally significant are decisions involving judicial re-

view of agency action directly in a court of appeals un-

der the Hobbs Act, 28 U.S.C. 2341 et seg., which author-

izes this Court to review the “final judgment” of the

court of appeals, 28 U.S.C. 2350.** The Court, without

questioning the finality of the decision below or the

Court’s jurisdiction to review it, has on a number of oc-

casions granted review of decisions in which the court of

appeals held the particular agency action unlawful and

remanded the cause to the agency for further proceed-

ings. See, e.g., Vermont Yankee Nuclear Power Corp. V.

NRDC, 435 U.S. 519, 535-5386 (1978); ICC v. Brother-

hood of Locomotive Engineers, 482 U.S. 270 (1987), re-

see Jordan v. Heckler, 721 F.2d 349 (11th Cir. 1983) (dismissing

appeal without discussion of Perales, which was binding precedent

in Eleventh Circuit); Biddle v. Heckler, 721 F.2d 1321 (11th Cir

1983) (same)). Even prior to the earliest of these decisions—

Jamieson, Gardner and Perales—several courts of appeals, without

addressing the jurisdictional issue, entertained appeals in similar

circumstances. See Hobby v. Hodges, 215 F.2d 754 (10th Cir.

1954); Ewing v. Gardner, 185 F.2d 781 (6th Cir. 1950); Social

Security Board v. Warren, 142 F.2d 974 (8th Cir. 1944).

The courts of appeals also have entertained appeals in Medicare

cases in the identical situation under 42 U.S.C. 139500(f), where

the district court held erroneous the decision of the Provider Re-

imbursement Review Board and remanded the cause to the Board

for further proceedings. See, e.g., Community Hospital of Roanoke

v. HHS, 770 F.2d 1257 (4th Cir. 1985); Daviess County Hospital

Vv. Bowen, 811 F.2d 338, 341-342 (7th Cir. 1987); Edgewater Hos-

pital, Inc. v. Bowen, 857 F.2d 1123 (7th Cir. 1988); Adams House

Health Care Vv. Bowen, 817 F.2d 587, 589 (9th Cir. 1987), vacated

on other grounds, 485 U.S. 1018 (1988); North Broward Hospital

District Vv. Bowen, 808 F.2d 1405, 1408 n.8 (11th Cir. 1987), va-

cated on other grounds, 485 U.S. 1018 (1988). See also Gueory Vv.

Hampton, 510 F.2d 1222 (D.C. Cir. 1974) (following Perales in

case involving remand to Civil Service Comm'n), reaffirmed in Or-

cidental Petroleum Corp. v. SEC, 873 F.2d 325, 330-331 (D.C.

Cir. 1989).

2228 U.S.C. 2350 also permits this Court to review “faln order

granting or denying an interlocutory injunction” under 28 U.S.C.

2349(b).

versing 761 F.2d 714, 725 (D.C. Cir. 1985). The Court

should not “disregard the implications of an exercise of ju-

dicial authority assumed to be proper for |many] years.”

Brown Shoe Co. v. United States, 370 U.S. 294, 307

(1962). This Court’s practical experience in the exercise

of its authority to review “final judgment|s|” under 28

U.S.C. 2350 therefore weighs heavily in favor of recog-

nizing a comparable authority in the courts of appeals

under 28 U.S.C. 1291 to review district court decisions

holding agency action unlawful and remanding to the

agency for further proceedings. Moreover, the Court’s

articulation and application of the finality requirement of

28 U.S.C. 1291 and of similar statutes in other settings

firmly buttress that result.

A. By its terms, Section 1291 is not limited to orders

that constitute the final judgment in the case. It vests

the courts of appeals with jurisdiction of appeals from

“all final decisions” of the district courts, a category

that includes more than final judgments. Congress’s

use of the inclusive term “all” * manifests an intent to

reach every order that, in context, possesses the requisite

“indicia of finality” (Brown Shoe Co. v. United States,

370 U.S. 294, 308 (1962)) with respect to the party ag-

grieved and the matter disposed of by the order. Ac-

cordingly, the Court has made clear that “‘a decision

‘final’ within the meaning of § 1291 does not necessarily

mean the last order possible to be made in a case,’”

Mitchell v. Forsyth, 472 U.S. at 524 (quoting Gillespie

v. United States Steel Corp., 379 U.S. at 152) and that

the requirement of finality must be give a “practical

rather than a technical construction.” Cohen v. Bene-

ficial Industrial Loan Corp., 337 U.S. at 546. The prin-

ciple of finality, in short, “is not a technical concept of

temporal or physical termination,” but “the means for

achieving a healthy legal system.” Cobbledick v. United

States, 309 U.S. 323, 326 (1940). And “ ‘(t]he consider-

23 See United States v. Monsanto, 109 S. Ct. 2657, 2662 (1989).

ations that determine finality are not abstractions but

have reference to very real interests—not merely of the

immediate parties, but, more particularly, those that per-

tain to the smooth functioning of our judicial system.’ ”

Budinich v. Becton Dickinson & Co., 486 U.S. at 201

(quoting Republic Natural Gas Co. v. Oklahoma, 334

U.S. 62, 69 (1948) ).

Heretofore, the Court has considered the finality re-

quirement of 28 U.S.C. 1291 only in the context of or-

ders entered by a district court during or at the con-

clusion of ordinary civil or criminal litigation conducted

entirely before the district court itself. In that setting,

the “practical” rather than “technical” construction of

Section 1291 has been most evident in the “collateral

order” doctrine, which recognizes a small class of de-

cisions immediately appealable under Section 1291 even

though they do not terminate the proceedings in the

district court. The class consists of decisions that “finally

determine claims of right separate from, and collateral

to, rights asserted in the action, too important to be

denied review and too independent of the cause itself

to require that appellate consideration be deferred

until the whole case is adjudicated.” Cohen v. Bene-

ficial Industrial Loan Corp., 337 U.S. at 546. See, e.9.,

Midland Asphalt Corp. v. United States, 109 S. Ct. at

1497. Under the common formulation of the collateral

order doctrine, an order is immediately appealable if

it (1) “conclusively determine/s] the disputed question,”

(2) “resolve|s| an important issue completely separate

from the merits of the action,” and (3) is “effectively

unreviewable on appeal from a final judgment.” Coopers

& Lybrand v. Livesay, 437 U.S. at 468.

The Court has also made clear, however, that orders

satisfying the three specific requirements of the col-

lateral order doctrine do not constitute the only instances

in which the principle of practical finality permits an

appeal from an order that does not completely or for-

mally terminate the litigation. For example, in Mos-s

H. Cone Memorial Hospital v. Mercury Construction

Corp., 460 U.S. 1 (1983), the Court held that the court

of appeals had jurisdiction of an appeal from a district

court order staying proceedings pending resolution of a

state-court suit raising the identical issue. The Court

found the order to be a “final decision” because, as a

practical matter, it meant there would be no further liti-

gation of the issue in the federal forum, and the plain-

tiff therefore was “effectively out of court.” 460 U.S. at

9-10.%* The Court relied on its similar ruling in /dle-

wild Liquor Corp. v. Epstein, 370 U.S. 713, 715 n.2

(1962), that the court of appeals had jurisdiction over

a district court order granting a stay under the Pull-

man abstention doctrine,” even though such an order is

entered with the expectation that the federal litigation

will resume if the plaintiff does not obtain relief in state

court on state-law grounds. 460 U.S. at 9-10."*

B. This case differs from the cases just discussed. The

order at issue here was not entered in the course of

ordinary civil or criminal litigation, in which the courts

determine all legal and factual issues in the first in-

stance and in which the trial and reviewing bodies are

both components of the judicial system. Instead, the order

was entered in the different context of judicial review

of final agency action, in which the primary adjudicatory

proceedings take place before the agency, subject to

judicial review limited in both scope and time. The

formulation of principles of appellate jurisdiction in this

** The Court concluded, in the alternative, that the order was

appealable as a collateral order. 460 U.S. at 11-12.

% Railroad Comm'n V. Pullman Co., 312 U.S. 496 (1941).

2¢ See also Brown Shoe Co. v. United States, 370 U.S. at 307-

311; Forgay v. Conrad, 47 U.S. (6 How.) 201, 203 (1848); ef.

Coz Broadcasting Corp. Vv. Cohn, 420 U.S. 469, 477-485 (1975) (up-

holding this Court's jurisdiction ander 28 U.S.C. 1257 to review

a state appellate court judgment that remanded a case for trial or

other proceedings) ; ASARCO Inc. v. Kadish, 109 S. Ct. 2087, 2042

(1989) (same).

setting must, accordingly, respect the “division of function

which the legislature has made between the administra-

tive body and the court of review.” Scripps-Howard

Radio, Inc. v. FCC, 316 U.S. 4, 10 (1942).

The agency action under review in this case—-the “final

decision” of the Secretary (rendered through the ALJ

and Appeals Council) on respondent’s claim for bene-

fits—was itself the end product of distinct adjudicatory

proceedings, and it embodied the Social Security Ad-

ministration’s considered judgment on all issues of fact

and law bearing on respondent’s claim for benefits. When

a court holds such a decision unlawful, the agency is im-

mediately aggrieved, whether or not the court remands

the cause to the agency for further proceedings. Due re-

spect for a coordinate Branch—and for its formal and

considered decisions—calls for the agency to have a

correspondingly immediate right of appeal, so it may

seek reinstatement, affirmance, and effectuation of its

decision.** Standards of finality under 28 U.S.C. 1291,

27 The Secretary’s right to appeal the district court order at issue

here is consistent with the origins of judicial review of agency

action and the various procedures available for obtaining it. Judi-

cial review is most firmly rooted in the common law writ of man-

damus, by which a court could compel an executive officer to per-

form a duty. See L. Jaffe, Judicial Control of Administrative Ac-

tion 176-192, 320-326 (1965); see, e.g., Kendall v. United States,

37 U.S. (12 Pet.) 524 (1838). There is little doubt that an order

granting a writ of mandamus is immediately appealable, see Colum-

bia Insurance Co. v. Wheelwright, 20 U.S. (7 Wheat.) 534 (1822),

even if compliance by the officer requires performance of admin-

istrative duties similar to those conducted on “remand” under more

modern and familiar forms of judicial review.

The district court order at issue here also closely resembles—and

indeed had the effect of—an injunction, which is subject to imme-

diate appeal even at an interlocutory stage of the proceedings. 28

U.S.C. 1292(a)(1). The order did more than simply remand the

cause; it “directed” the Secretary to conduct further proceedings

to inquire whether respondent can engage in any gainful activity

(Pet. App. 18a). Cf. Avery v. Secretary of HHS, 762 F.2d 158,

160-161 (1st Cir, 1985) (class action). The order did not simply

as applied in conjunction with principles of judicial

review of agency action, require that result as well:

the district court’s order in this case is appealable both

because it terminates the proceedings for judicial re-

view of the particular decision of the Secretary, and

because recognition of the Secretary’s right of appeal is

consistent with the principles of practical finality under-

lying the collateral order doctrine and the Court’s hold-

ings in related contexts.

1. The subject of an action for judicial review under

42 U.S.C. 405(g) is the “final decision” of the Secre-

tary that the plaintiff has “complained of,” not the claim

for benefits that was disposed of by the Secretary’s de-

cision. See pages 15-16, 20, supra. The Administrative

Procedure Act (APA) embodies a similar principle with

respect to judicial review of agency action generally. The

APA, like 42 U.S.C. 405(g), does not create an ordinary

cause of action in which all relevant proceedings concern-

ing rates, licenses, benefit claims, rules, and other matters

within the jurisdiction of an Executive Branch agency

are conducted by the court itself as an original matter.

The APA only affords a right to judicial review of

“agency action” regarding those matters. 5 U.S.C. 702.

In defining the scope of review, the APA states that

“t]he reviewing court shall * * * hold unlawful and

set aside agency action, findings and conclusions” that

fail to satisfy the standards specified in the APA itself. 5

U.S.C. 706(2). It does not grant the courts authority to

reach and decide the merits of the controversy under-

lying the agency action that has been set aside. Camp

govern the ¢onduct of the parties in connection with proceedings

before the district court itself on matters unrelated to substantive

issues in the case. See Gulfstream Aerospace Corp. V. Mayacamas

Corp., 108 S. Ct. 1133, 1138 (1988). Rather, it granted partial

relief on the merits (by reversing the Secretary’s decision insofar

as it denied benefits in reliance on the Listing) and ordered fur-

ther proceedings in a different forum. Compare Baltimore Con-

tractors, Inc. v. Bodinger, 348 U.S. 176, 183 (1955).

v. Pitts, 411 U.S. 138, 142 (1978). See also Burlington

Northern, Inc. v. United States, 459 U.S. 131, 141 (1982)

(“federal court authority to reject Commission rate

orders for whatever reason extends to the orders alone,

and not to the rates themselves”) .

Consistent with this limited scope of judicial review,

the Court has repeatedly held in a variety of adminis-

trative law settings that “the function of the reviewing

court ends when an error of law is laid bare,’ because

“(alt that point the matter once more goes to the

[agency] for reconsideration.” FPC v. Idaho Power Co.,

344 U.S. 17, 20 (1952); accord FPC v. National Citizens

Committee for Broadcasting, 436 U.S. 775, 793 n.15

(1978); FCC v. Pottsville Broadcasting Co., 309 US.

134, 145 (1940); ICC v. Clyde S.S. Co., 181 U.S. 29,

32-33 (1901). A district court order faithful to this

command therefore “ends the litigation on the merits

and leaves nothing for the court to do but execute the

judgment.’” Van Cauwenberghe v. Biard, 108 S. Ct. at

1949 (citation omitted). Accordingly, general principles

of administrative law under the APA and of finality

under 28 U.S.C. 1291 reinforce the conclusion evident

from the text of 42 U.S.C. 405(g) standing alone—that

the district court’s order in this case was a “final de-

cision” for purposes of 28 U.S.C. 1291 because it finally

determined that the particular decision of the Secretary

before the court on review was contrary to law.

If respondent’s claim is again denied on remand and

she seeks judicial review of that new decision, the district

court may have occasion to consider issues bearing on

respondent’s claim for benefits again at a later date. But

there can be no assurance that events will unfold in that

manner. For one thing, respondent may be awarded bene-

fits on remand under the legal standards mandated by

the district court. And even if respondent’s claim is

again denied and she seeks judicial review of that denial,

the focus of the judicial proceedings at that point will be

on the validity of the Secretary’s second decision, not the

first (which the court previously held unlawful) ; nor will

it focus on respondent’s underlying monetary claim for

benefits. Any subsequent judicial proceedings will there-

fore be, in substance, a new civil action for judicial

review under 42 U.S.C. 405(g). And the result would

be no different if the district court, as a matter of ju-

dicial convenience, sought to keep the action open or even

to “retain jurisdiction” so that any request by respond-

ent for judicial review of the Secretary’s new decision

on remand would be treated as part of the prior ac-

tion.** The particular form in which a court chooses to

dispose of a case under 42 U.S.C. 405(g) and similar

statutes cannot control the rights of the parties. Ap-

pealability under 28 U.S.C. 1291 is defined “in terms of

categories,” Carroll v. United States, 354 U.S. 394, 405

(1957), and “operational consistency and predictability

in the overall operation of § 1291” require a “uniform

rule.” Budinich v. Becton Dickinson & Co., 486 U.S. at

202. Under 42 U.S.C. 405(g), as well as general prin-

ciples of administrative law, the category of judicial or-

ders that hold agency action unlawful and set it aside

end the relevant litigation for purposes of appeal. This.

is so even if the court then remands the matter to the

agency for further proceedings, because in that event,

the Secretary is “ ‘effectively out of court.’” Moses H.

Cone Memorial Hospital v. Mercury Construction Corp.,

460 U.S. at 9, 10 (quoting Idlewild Liquor Corp. v. Ep-

stein, 370 U.S. at 715 n.2).

2. The Secretary’s right to appeal remains clear even

if the proceedings before the Secretary and those before

the court are regarded as separate chapters in the

28 The district court’s order in this case does not manifest any

such intent. Pet. App. 25a. See NLRB v. Wilder Mfg. Co., 454

F.2d 995, 998 (D.C. Cir. 1971) (unless court otherwise states, re-

mand relinquishes jurisdiction); Chemical Leaman Tank Lines,

Irc. Vv. United States, 446 F. Supp. at 724 (same); see note 19,

supra.

broader controversy over respondent’s underlying claim

for benefits. Viewed from that perspective, the district

court’s order is appealable by reference to the factors the

Court has articulated in fashioning the “collateral or-

der” doctrine. Specifically, the district court’s order has

the requisite “indicia of finality” (Brown Shoe Co. v.

United States, 370 U.S. at 308) because (i) it finally

resolves the important legal issue of the validity of the

Secretary’s regulations governing surviving spouses’ dis-

ability claims; (ii) that issue is separate from the factual

issues (concerning respondent’s residual functional ca-

pacity to perform gainful activity) that will be consid-

ered in the administrative proceedings ordered by the

court; and (iii) there is no readily available and effective

opportunity for the Secretary to challenge the court’s

invalidation of his regulatory approach at a later date.

a. In elaborating upon the collateral order doctrine,

the Court has explained that the requirement of finality

avoids the disruption of on-going proceedings in the trial

court that would be occasioned by “piecemeal appellate

review,” and thereby promotes the “efficient administra-

tion of justice.” Flanagan v. United States, 465 US.

259, 264 (1984). In addition, the rule “emphasizes the

deference that appellate courts owe to the trial judge

as the individual initially calléd upon to decide the many

questions of law and fact that occur in the course of

a trial,” thereby respecting the “independence of the

district judge, as well as the special role that individual

plays in our judicial system.” Firestone Tire & Rubber

Co. V. Risjord, 449 U.S. 368, 374 (1981).

The weight of these considerations is different in the

context of judicial review of agency action. Because the

order in this case constitutes a final rejection of the Sec-

retary’s reliance on the Listing as a basis for rejecting

respondent’s claim—and because the rehearing mandated

by the district court will take place before the Secretary,

not the court—the Secretary’s appeal of the district

court’s order does not interfere with any on-going pro-

ceedings in the district court or undermine the inde-

pendence or special role of the district judge. Conversely,

a refusal to allow the Secretary to appeal the order in-

validating his longstanding regulatory requirement would

undermine the special role and distinct responsibilities of

the Secretary, the Executive Branch officer in whom Con-

gress has vested the primary responsibility for imple-

menting the Social Security Act. Such a refusal also

would impose an unwarranted burden on an “already

overburdened agency” (Heckler v. Campbell, 461 U.S. at

468) because it would require the Secretary to conduct

additional proceedings that are both unnecessary and

wasteful of scarce resources if (as the Secretary firmly

believes) the regulations governing surviving spouses’

disability claims are valid. See Occidental Petroleum

Corp. Vv. SEC, 873 F.2d 325, 329 (D.C. Cir. 1989) ; Stone

v. Heckler, 722 F.2d 454, 467 (9th Cir. 1983).

The governmental and public interests favoring a right

to an immediate appeal extend well beyond this particu-

lar claim, because the Secretary, claimants generally, and

the public would be served by prompt appellate resolu-

tion of the validity of longstanding regulations governing

the adjudication of thousands of claims annually.” The

2® These regulations have become the subject of numerous chal-

lenges in the district courts in recent years, and the Secretary has

taken appeals from a number of district court decisions that held

the Listing requirement unlawful and remanded the cause to the

Secretary. See Kier v. Secretary of HHS, No. H-85-830 (JAC) (D.

Conn. Feb. 27, 1989), aff’d, 888 F.2d 244 (2d Cir. 1989); Haywood

Vv. Bowen, No. A-85-CV-296 (W.D. Tex. Feb. 19, 1988), appeal

dismissed, No. 88-1280 (5th Cir. Nov. 30, 1988) (862 F.2d 873

(Table)); Edmond v. HHS, No. C87-2132 (N.D. Ohio Dec. 20,

1988), appeal pending, No. 89-3161 (6th Cir.) (order finding juris-

diction dated Apr. 19, 1989); Davidson v. Bowen, No. CIV-85-

0420-C (D.N.M. Jan. 25, 1988), appeal pending, No. 88-1472 (10th

Cir.) (order making preliminary determination of jurisdiction dated

Oct. 12, 1989).

interests favoring appeal also extend far beyond the Social

Security disability program: “operational consistency and

predictability” require a “uniform rule” governing the

appealability of district court orders holding agency

action unlawful and remanding for further proceed-

ings. Budinich v. Becton Dickinson & Cow 486 U.S. at

202. In many areas of regulatory, ratemaking, and

other administrative activity, the agency action may in-

volve an important rule or implicate an important policy

ef broad application in the conduct of private affairs. The

uncertainty occasioned by a lower court’s invalidation of

such a rule or policy would pose special difficulties for an

agency if it was forced in all instances to develop new

evidence and assess alternative measures under the re-

quirements of the court’s remand order, with only the

possibility that a second action for review might lead

to a definitive ruling from an appellate court on the

validity of the agency’s original approach.* Thus, recog-

nition of an agency’s right to appeal an order such as

that at issue here will promote, not undermine, the “effi-

cient administration of justice’ (Flanagan v. United

States, 465 U.S. at 264).™

b. The Secretary’s right of appeal is further illumi-

nated by consideration of the three factors the Court has

80 Three recent commentaries furnish instructive accounts of the

adverse consequences of several rulings by the Federal Circuit dis-

missing appeals from the Court of International Trade that invali-

dated decisions of the Department of Commerce and remanded to

the Department for further proceedings (Cabot Corp. v. United

States, 788 F.2d 1539, 1542 (Fed. Cir. 1986); Badger-Powhatan Vv.

United States, 808 F.2d 823 (Fed. Cir. 1986)). See Hunter & Mc-

Inerney, What Happens When the Court Reverses a Dumping or

Countervailing Duty Case? What Should Happen?, 3 Fila. Int’l

L.J. 151 (1988); Layton, Interlocutory Appeal of Remand Orders

by the Court of International Trade Under 28 U.S.C. § 1292(d)

(1), 3 Fla. Int’l LJ. 167 (1988); Horgan, The Impact of Inter-

locutory Judicial Decisions Upon Anti-Dumping and Countervail-

ing Duty Proceedings, 3 Fla. Int’! L.J. 187 (1988).

31 We do not perceive any risk that the courts will be flooded

with such appeals by the government, any more than they have been

to date, in view of the rigorous review required before the Solicitor

identified in applying the collateral order doctrine. First,

it is undisputed that the district court has “conclusively

determine({d] a disputed question” concerning the validity

of the Secretary’s regulatory approach to the evalua-

tion of claims for surviving spouse’s disability benefits.

Coopers & Lybrand v. Livesay, 437 U.S. at 468.

As to the second factor, respondent argues that the

district court’s order is not appealable because the issue

it resolves is not “completely separate” from the merits

of her claim for benefits. Br. in Opp. 18-19, 20-21 (quot-

ing Coopers & Lybrand v. Livesay, 437 U.S. at 468). But

respondent disregards the significant legal and practical

distinctions, for appealability purposes, between an order

remanding a matter to an agency for a new round of ad-

ministrative proceedings and an order entered in the

middle of on-going proceedings in the district court itself.

The district court order at issue here removed all matters

concerning respondent’s claim for benefits from the im-

mediate cognizance of the court and returned them to

the jurisdiction of the officer of a coordinate Branch. As

this Court has observed (FCC v. Pottsville Broadcasting

Co., 309 U.S. 134, 141 (1940) ):

General authorizes an appeal. See United States v. Mendoza, 464

U.S. 154, 160-161 (1984). Statistics maintained by HHS show that

appeals were taken by the Secretary in only 65 cases under Titles

II and XVI of the Social Security Act in fiscal year 1986, 44 cases

in 1987, and a combined total of 60 cases in 1988 and 1989. These

cases represented only a small percentage of decisions adverse to the

Secretary. In fiscal year 1988, for example, district courts reversed

the Secretary’s decision in 2255 cases (while affirming in 4700).

Social Security Administration, 1989 Annual Report to the Congress,

at 34, Table 1. Reversals of the Secretary’s decisions exceeded

2000 in preceding years as well. See 1988 Annual Report to the

Congress, at 23; 1987 Annual Report to Congress, at 33. SSA's

Annual Reports do not include statistics on how many cases were

actually remanded by district courts in each year. However, the

1989 Annual Report does state that during fiscal year 1988, SSA

processed 5840 cases that previously had been remanded by a dis-

trict court. Jd., Table 1, note 1. We have been informed by HHS

that this total includes all types of remands.

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 interrela-

tionship 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 dele-

gated agency, can be controlled within the limited

scope of “judicial power” conferred by Congress un-

der the Constitution.

The second factor in the Coopers & Lybrand test, like

the first, is designed to prevent an appeal before all

related legal and factual issues have been fully developed

and resolved at trial; if the legal issue addressed by the

district court’s order is separate, there is much less chance

that subsequent developments at trial will cast new light

on the issue or prompt the court to reconsider it. In the

instant case, there will be no further development of legal

or factual issues by the district court, since the fur-

ther proceedings ordered by that court will be conducted

in an administrative forum. Moreover, because any devi-

ation by the Secretary from the legal standard imposed

by the district court’s remand order would itself be legal

error (Sullivan v. Hudson, 109 S. Ct. at 2254), the va-

lidity of the surviving spouse’s disability regulations will

not be open for consideration in the administrative pro-

ceedings on remand (or, presumably, in any future pro-

ceedings in the district court on judicial review of the

Secretary's new decidion). See Cohen v. Perales, 412 F.2d

at 48. Thus, the very nature of judicial review of agency

action—and of an order remanding a matter to the agency

for further proceedings under a different legal standard

—ensures that the legal issue resolved by the court’s order

will be separate from the issues open for resolution on

remand to the Secretary. Compare Mitchell v. Forsyth,

472 U.S. at 527-528."

82 Cf. Budinich v. Becton Dickinson & Co., 486 U.S. at 199: “A

question remaining to be decided after an order ending litigation

With respect to the third Coopers & Lybrand factor,

respondent asserts (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 surviving

spouse’s disability regulations might not be entirely fore-

closed following the remand, and that the issue is there-

fore not “effectively unreviewable on appeal from a final

judgment.” 437 U.S. at 468. There can be no assurance,

however, that further judicial proceedings of substance in

the district court will follow the remand. It may be, for

example, that the factual record before the ALJ and

Appeals Council on remand will require them to find re-

spondent disabled and to award her benefits under the

legal standards imposed by the district court. Section

405(g) does not afford the Secretary a right to seek

judicial review of such a decision in favor of the claimant

by an ALJ or the Appeals Council.” And if, for this or

on the merits does not prevent finality if its resolution will not

alter the order or moot or revise decisions embodied in the order.”

83 In 1959, Harold Packer, the officer of the Department of Health,

Education, and Welfare who was responsible for Social Security

litigation matters, expressed this view of the statutory scheme in

his testimony during the first extensive oversight hearings concern-

ing the Title II disability program:

Mr. METCALF. Is there ever an instance when the Depart-

ment takes an appeal to the court?

Mr. PACKER. No, there cannot be in a title II case. There

cannot be any appeal by the Department because the decision

rendered by the Appeals Council is the decision of the Secre-

tary. If the decision is favorable to the claimant, of course,

there can be no further action. If it is adverse, it is the claim-

ant who appeals and he becomes the plaintiff in the action and

the Secretary is the defendant.

Mr. METCALF. So every appeal which is taken to the court

has been an appeal! from a denial or adverse decision?

Mr. PACKER. Yes; in the first instance, to the district

court. Of course, if the district court decision is adverse to

the Government, the Government then has the right to appeal

further to the appellate court.

Administration of Social Security Disability Program: Hearings

Before the Subcomm, on the Administration of the Social Security

any other reason, the matter does not return to the dis-

trict court on the merits at a later date, the Secretary will

not have an opportunity to seek review of the district

court’s ruling in the court of appeals. Indeed, the court

of appeals assumed that if respondent is awarded benefits

on remand, its construction of 28 U.S.C. 1291 will require

the Secretary to forgo all opportunity for appellate review

of the district court’s invalidation of his regulatory re-

quirement in this case. Pet. App. lla.

The court of appeals nevertheless sought to justify its

jurisdictional ruling by observing that “‘it is not in-

exorably so’” that the district court’s ruling will escape

appellate review. Pet. App. 9a. Presumably, the court

meant that review may be available if respondent’s claim

is denied on remand. That possibility is not only specu-

lative; it is also of little help to the Secretary, because

the district court’s ruling will have continuing force with

respect to respondent’s individual claim only if she is

awarded benefits on remand under the legal standards

mandated by the district court. Yet, it is in that very

situation that further review would be unavailable to the

Secretary. See Crowder v. Sullivan, No. 89-2681 (7th

Cir. Mar. 5, 1990), slip op. 2. In order for a district

court ruling to be effectively reviewable on appeal from

a subsequent judgment of the district court within the

meaning of the third Coopers & Lybrand factor, the

party aggrieved must at least be assured that, if the other

party prevails, a final judgment will be entered from

which the aggrieved party can appeal.

Respondent seeks to avoid this defect in her position

by suggesting (Br. in Opp. 28-33) thatthe Secretary

may obtain court of appeals review by filing his new de-

cision on remand with the district court, requesting the

court to enter a judgment affirming that decision, and

then appealing the judgment that affirms his own de-

cision. This argument is unavailing. In the first place,

Laws of the House Comm. on Ways & Means, 86th Cong., Ist Sess.

692 (1959).

nothing in Section 405(g) authorizes the Secretary to

seek judicial review (including appellate review) of

the decision of his own Appeals Council if the Council

determines on remand that the claimant must be awarded

benefits under the legal standards imposed hy the dis-

trict court. Cf. Cox Broadcasting Corp. v. Cohn, 420

U.S. at 481. As we have explained (see pages 21-23, su-

pra), the sixth sentence of Section 405(g) provides for

the Secretary to file his amended findings and decision

with the court only where the case has been remanded

for the limited purposes described in that sentence.”

*4In Harper Vv. Bowen, 854 F.2d 678, 681 (4th Cir. 1988), the

court considered it “possible” that the Secretary might be able to

obtain appellate review in this manner.

*° Of course, where the court has remanded the cause to the Sec-

retary for a rehearing because it has found the Secretary's first

decision denying benefits to have been unlawful, it is appropriate

for the Secretary to file any new decision awarding benefits with

the court so that the court can consider whether attorney's fees

should be awarded under the EAJA. See Sull*van v. Hudson, 109

8. Ct. at 2255.

Respondent also relies (Br. in Opp. 22-23) on the statement in

Hudson that the “detailed provisions for the transfer of proceedings

from the courts to the Secretary and for the filing of the Secre-

tary’s subsequent findings with the court suggest a degree of direct

interaction between a federa] court and an administrative agency

alien to traditional review of agency action under the Administra-

tive Procedure Act.” 109 S. Ct. at 2254. With all respect, we sub-

mit that those provisions of the sixth sentence of Section 405(g),

which are limited to interlocutory remands, are neither unusual nor

alien to traditional APA review of agency action. See U.S. Dep't of

Justice, Attorney General's Report on the Administrative Procedure

Act 93 (1947) (“many statutes provide that where the reviewing

court finds that the taking of new evidence would be warranted,

such evidence must be presented to the agency with opportunity to

modify its findings”; those provisions “continue in effect” after

enactment of the APA). Such provisions appear in the Hobbs Act,

28 U.S.C. 2347(c), and in a number of other statutes. See, ¢.g., 15

U.S.C, 45(c) (FTC); 15 U.S.C. T7i(a) (SEC); 15 U.S.C. 78y(a)(5)

(SEC); 15 U.S.C. 717r (FERC); 15 U.S.C. 1394(b) (NHTSA);

29 U.S.C. 160(e) (NLRB); 29 U.S.C. 660(a) (OSHRC): 45 U.S.C.

355(f) (Railroad Retirement Board). Some of those statutes are

At the very least, nothing in Section 405(g) requires

the Secretary to pursue the novel and awkward course

suggested by respondent, and thereby to accept the bur-

den of a remand in all cases before obtaining appellate

review on a dispositive legal issue. 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 Secre-

tary’s decision legally erroneous, even though the court

has remanded the cause to the Secretary for a rehear-

ing. Respondent’s proposal to postpone all appellate re-

view until the Secretary has rendered a new decision on

remand therefore fails to accord the respect due both

the Act itself and the official of a coordinate Branch who

is charged with its administration.

cited in footnote 14 to the chapter on judicial review in Social Secur-

ity Hearings and Appeals, at 130, 162.

The passage in Social Security Hearings and Appeals quoted by

the Court in Hudson, 109 S. Ct. at 2254, described the version

of the sixth sentence that was in effect prior to the 1980 amend-

ments (see note 18, supra), and it criticized that version on the

ground that it allowed courts more freedom than they had under

other judicial review statutes and thereby enmeshed the courts

too much in agency affairs. It was largely in response to that

criticism that Congress amended the sixth sentence in 1980 to

bring it into conformity with similar provisions in other statutes,

and thereby to diminish the degree of interaction to which the

Court referred in Hudson. See H.R. Rep. No. 100, supra, at 13

(quoting Center for Administrative Justice, note 18, supra, at 270)

(a provision similar to relevant portion of amended sixth sentence

“*ig contained in nearly all comparable review statutes’”). Fur-

thermore, the Committee Reports on the 1939 amendments in which

Section 405(g) was enacted make clear that Congress intended to

adopt judicial review provisions “similar to those made for the

review of decisions of many administrative bodies.” See note 14,

supra. There is, accordingly, no basis for fashioning a special rule

of appealability in Social Security cases based on the sixth sentence

of Section 405(g).

CONCLUSION

The judgment of the court of appeals should be re-

versed.

Respectfully submitted.

KENNETH W. STARR

Solicitor General

STUART M. GERSON

Assistant Attorney General

Davip L. SHAPIRO

Deputy Solicitor General

EDWIN S. KNEEDLER

Assistant to the Solicitor General

RoBertT M. Logs

Attorney

MARCH 1990

APPENDIX

STATUTORY PROVISIONS INVOLVED

1. 28 U.S.C. 1291 provides:

The courts of appeals (other than the United

States Court of Appeals for the Federal Circuit)

shall have jurisdiction of appeals from all final deci-

sions of the district courts of the United States, the

United States District Court for the District of the

Canal Zone, the District Court of Guam, and the

District Court of the Virgin Islands, except where a

direct review may be had in the Supreme Court. The

jurisdiction of the United States Court of Appeals for

the Federal Circuit shall be limited to the jurisdic-

tion described in sections 1292(c) and (d) and 1295

of this title.

2. Section 205(g) of the Social Security Act, as codi-

fied at 42 U.S.C. 405(g), provides (bracketed numbers

added) :

[1] Any individual, after any final decision of the

Secretary made after a hearing to which he was a

party, irrespective of the amount in controversy, may

obtain a review of such decision by a civil action

commenced within sixty days after the mailing to

him of notice of such decision or within such further

time as the Secretary may allow. [2] Such action

shall be brought in the district court of the United

States for the judicial district in which the plaintiff

resides, or has his principle place of business, or, if

he does not reside or have his principal place of

business within any such judicial district, in the

United States District Court for the District of

Columbia. [3] As part of his answer the Secretary

shall file a certified copy of the transcript of the

record including the evidence upon which the find-

ings and decision complained of are based. [4] The

court shall have power to enter, upon the pleadings

(la)

and transcript of the record, a judgment affirming,

modifying, or reversing the decision of the Secretary,

with or without remanding the cause for a rehear-

ing. [5] The findings of the Secretary as to any

fact, if supported by substantial evidence, shall be

conclusive, and where a claim has been denied by the

Secretary or a decision is rendered under subsection

(b) of this section which is adverse to an individual

who was a party to the hearing before the Secretary,

because of failure of the claimant or such individual

to submit proof in conformity with any regulation

prescribed under subsection (a) of this section, the

court shall review only the question of conformity

with such regulations and the validity of such regula-

tions. [6] 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 addi-

tional 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 proceeding; and the Secretary shall, after

the case is remanded, and after hearing such addi-

tional evidence if so ordered, modify or affirm his

findings of ~ decision, or both, and shall

file with the cou such additional and modified

findings of fact and decision, and a transcript of the

additional record and testimony upon which his action

in modifying or affirming was based. [7] Such addi-

tional or modified findings of fact and decision shall

be reviewable only to the extent provided for review

of the original findings of fact and decision. [8] The

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. [9] Any action insti-

tuted in accordance with this subsection shall survive

notwithstanding any change in the person occupying

the office of Secretary or any vacancy in such office.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.