Reply Brief — Sullivan v. Finkelstein

Supreme Court, U.S. )

* FILED

7 APR 17 1998

No. 89-504 JOSEPH F. SPANIOL, JR,

In the Supreme Court of the United States

OCTOBER TERM, 1989

Louis W. SULLIVAN, SECRETARY

OF HEALTH AND HUMAN SERVICES, PETITIONER

* *

MARILYN FINKELSTEIN

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

REPLY BRIEF FOR THE PETITIONER

KENNETH W. STARR

Solicitor General

Department of Justice

Washington, D.C. 20530

(202) 633-2217

EST AVAILABLE COP

.

om ee |

TABLE OF AUTHORITIES

Cases: Page

Abney v. United States, 431 U.S. 651 (19777 4,9

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

1T—„—»„çß½. 6

Budinich v. Becton Dickinson & Co., 486 U.S. 196

EE 8, 9, 18

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

ES 3 3, 4, 7, 8, 9, 15

Cohen v. Perales, 412 F.2d 44 (5th Cir. 1969),

I 2, 15, 18

Coopers & Lybrand v. Livesay, 437 U.S. 4

. x . 6, 7-8

Cox Broadcasting Corp. v. Cohn, 420 US. 469

(1975) ........ ... et Ee 5

CSX Transportation, Inc. v. Brotherhood of Rail-

way Carmen, cert. granted, No. 89-1028 (Mar.

lacie arcane eens erteriennsinmnmnenmne 13

Dickinson v. Petroleum Conversion Corp., 338

TITS LTA ——— 5

Eisen v. Carlisle & Jacquelin, 417 U.S. 156

lla ES W̃-n 222 22 ———— 4. 5

FTC v. Standard Oil Co., 449 U.S. 232 (1980) 7

Forga v. Conrad, 47 U.S. (6 How.) 201 (1848) 6

Gulfstream Aerospace Corp. v. Mayacamas Corp.,

D x ——e 8

Harrington v. Haller, 111 U.S. 796 (1884) 5

Heckler v. Campbell, 461 U.S. 458 (1983 10

Huie v. Bowen, 788 F.2d 698 (11th Cir. 1986) 3

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

ß x x —— 4

Mitchell v. Carlson, No. 89-1377 (5th Cir. Mar. 15,

EE a ᷑ . ——-ͤĩ—4 16

Mitchell v. Forsyth, 472 U.S. 511 (1985) 4,9

Moses H. Cone Memorial Hosp. v. Mercury Constr.

Corp., 460 U.S. 1 (1983)... 6,8

Newpark Shipbuilding & Repair, Ine. v. Round

tree, 723 F.2d 399 (5th Cir.), cert. denied, 469

ß 3

Cases—Continued : Page

Norfolk & Western Ry. v. American Train Dis-

patchers Ass'n, cert. granted, No. 89-1027 (Mar.

North Broward Hosp. Dist. v. Bowen, 808 F.2d

1405 (11th Cir. 1987), vacated, 485 U.S. 1018

. » 3

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

Gl, 3 .. 2. 7, 17

Pickett v. Bowen, 833 F.2d 288 (11th Cir. 1987) 3

Richardson v. Perales, 402 U.S. 389 (19717 2

Sears, Roebuck & Co. v. Mackey, 351 U.S. 427

| | een 5

Seatrain Shipbuilding Corp. v. Shell Oil Co., 444

ee ge 7

Stack v. Boyle, 342 U.S. 1 (19817 4

Sullivan v. Hudson, 109 S. Ct. 2248 (19899 11, 17, 18

Taylor v. Heckler, 778 F.2d 674 (11th Cir. 1985) 3,15

Tiffany, Ex parte, 252 U.S. 32 (1920 5

United States v. MacDonald, 435 U.S. 850 (1978) 9

Waco v. United States Fidelity & Guaranty Co.,

Re eS OF) ee 16

Wilson v. Heckler, 609 F. Supp. 120 (W.D. Mo.

| ee —̃ x 11

Statutes and rule:

Hobbs Administrative Orders Review Act, 28

UE. SCR ED ß 13, 14

208. ( ͤ 13, 14

Equal Access to Justice Act, 28 U.S.C. 2412 11,17

Social Security Act, Tit. II. 42 U.S.C. 401 et seq.:

42 U.S.C. 405 (g)) 1, 3, 11, 12, 14, 15, 16, 17, 18

42 U.S.C. 423(d)(2)(B) (1982 & Supp. V

| ũ r 10

28 U.S.C. 128804 . —̃ — 14

II — 14

ll 2 ᷑ ]ĩð⁊ꝭͥ0½éẽ- 5

39 ..!üñ1ͤö — passim

ye Coe) | .—X(ĩ(ñçl:ů: 19

— —

III

Statutes and rule Continued: Page

r ̃ . ssesumesncnenssnacacs 16

r ̃ ... 5, 6

Miscellaneous:

P. Bator, D. Meltzer, P. Mishkin & D. Shapiro,

Hart & Wechsler’s The Federal Courts and the

Federal System (3d ed. 1988 5

55 Fed. Reg. 1012 (Jan. 11,1990) 19

H.R. Rep. No. 120, 99th Cong., Ist Sess. (1985) 18

In the Supreme Court of the United States

OCTOBER TERM, 1989

No. 89-504

Louis W. SULLIVAN, SECRETARY

OF HEALTH AND HUMAN SERVICES, PETITIONER

V.

MARILYN FINKELSTEIN

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

REPLY BRIEF FOR THE PETITIONER

In our opening brief, we set forth two approaches to

this case, each of which is, in our view, independently

sufficient to support jurisdiction of the Secretary’s ap-

peal under 28 U.S.C. 1291. Under the narrower ap-

proach, whether or not the district court’s order was

final in the sense of completely terminating all judicial

proceedings on the merits, it does come within the special

class of cases in which a right of appeal nevertheless has

been recognized in furtherance of the practical con-

siderations underlying the finality principle. Gov't Br.

36-45. Second, and more broadly, under the express

terms of 42 U.S.C. 405(g)—as well as under general

principles of finality and judicial review of agency ac-

tion developed by this Court—the district court’s decision

was final in the fullest sense of the jurisdiction granted

to appellate courts by 28 U.S.C. 1291. Gov’t Br. 12-36.

(1)

2

Neither of these arguments has been refuted by re-

spondent. Indeed, respondent’s effort, by brute force, to

transpose into the administrative-review context prece-

dents of this Court that cannot sensibly be translated

verbatim to that setting ignores the distinct and im-

portant question of appealability raised in this case.

This question—of how the finality rule applies to the

right of an Executive Branch agency to appeal a dis-

trict court order that both invalidates an administra-

tive decision and remands the matter to the agency for

further proceedings under different legal standards—

has not been definitively addressed by this Court. But

as we have shown (Pet. 23-25; Reply Br. Pet. Stage

8-9; Gov’t Br. 28-29 & n.21), the great weight of au-

thority in the lower courts over the past several decades

firmly supports the agency’s right of appeal in these cir-

cumstances—a right that has been recognized in cases

arising under the Social Security Act as well as other

federal statutes. See generally Occidental Petroleum

Corp. v. SEC, 873 F.2d 325, 328-332 (D.C. Cir. 1989).

And significantly, in the leading lower court case on

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

Cir. 1969), this Court granted review and reversed the

Fifth Circuit’s ruling on the merits, without question-

ing the Fifth Circuit’s holding (and supporting ration-

ale) that it had jurisdiction over the Secretary’s ap-

peal. Richardson v. Perales, 402 U.S. 389 (1971). See

Gov’t Br. 27-28.' Respondent now asks this Court to

Since this Court’s jurisdiction depended on the correctness of

the Fifth Circuit’s ruling, respondent’s attempt (Br. 42 n.36) to

minimize the significance of Cohen v. Perales by characterizing the

Court’s decision as not “reaching” the threshold jurisdictional issue

is without merit. Moreover, although respondent also attempts (Br.

42 n.36) to discount Cohen v. Perales on the ground that the Fifth

Circuit there did not have the benefit of the Court’s more recent

decisions under 28 U.S.C. 1291, those decisions in fact support the

correctness of the jurisdictional ruling in Perales. See pages 3-12,

infra.

Respondent’s related assertion (Br. 42 n.36) that “Perales is

questionable even within the Fifth and Eleventh Circuits” is equally

sweep this past practice and precedent aside, and she

does so without pointing to any adverse consequences that

have resulted to date from recognition of an agency’s

right of appeal in circumstances such as these.

1. The narrower of the two approaches suggested in

our opening brief builds upon Cohen v. Beneficial In-

dustrial Loan Corp., 337 U.S. 541 (1949). The question

before the Court under that approach is whether the

rationale and underlying principles of Cohen and its

progeny support appealability here, not, as respondent

seems to argue Br. 32-36), whether that result is com-

pelled by mechanical application of the precise terminol-

ogy used in the very different context of Cohen and

other cases involving on-going proceedings in a district

without merit. As support for this proposition in the Fifth Circuit,

respondent cites Newpark Shipbuilding & Repair, Inc. v. Roundtree,

723 F.2d 399 (en banc), cert. denied, 469 U.S. 818 (1984), but that

case involved the distinct question of the finality of an administra-

tive decision, and the court there did not even cite, much less over-

rule, Perales. As support for this proposition in the Eleventh Cir-

cuit, respondent cites Taylor v. Heckler, 778 F.2d 674, 677 (1985).

Subsequent Eleventh Circuit decisions, however, have recognized

the Secretary’s right of appeal, despite the inclusion of a remand

in the district court’s order. See Pickett v. Bowen, 833 F.2d 288,

290-291 (1987); Huie v. Bowen, 788 F.2d 698, 701-703 (1986)

North Broward Hosp. Dist. v. Bowen, 808 F.2d 1405, 1408 n.3

(1987), vacated on other grounds, 485 U.S. 1018 (1988). Moreover,

in Taylor v. Heckler itself, the panel unequivocally expressed the

view that under the provisions of 42 U.S.C. 405(g) upon which we

rely, an order holding the decision of the Secretary unlawful and

remanding for a new round of proceedings is an appealable final

judgment, but the panel felt bound by a prior Eleventh Circuit deci-

sion to the contrary that was itself a departure from Perales. See

778 F.2d at 676-677.

Finally, respondent fails in her attempt to distinguish Perales by

relying on the Fifth Circuit’s statement there that “‘an order sua

sponte by the court for the taking of additional evidence’ is not

immediately appealable.” Resp. Br. 42 n.36 (quoting 412 F.2d at 48).

The remand in this case was not an interlocutory remand for the re-

ceipt of additional evidence as a prelude to review; rather, the

remand followed the district court’s review of the Secretary’s deci-

sion on the merits.

4

court.“ In our view, the question whether Cohen sup-

ports appealability here must be answered in the

affirmative.

a. Section 28 U.S.C. 1291 grants the courts of appeals

jurisdiction of appeals from all “final decisions” of the

district courts. Ordinarily, there is no “final decision”

until the district court has entered a final judgment in

the case—“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 the judgment.“

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

1497 (1989). As we explain below (see pages 13-20, in-

fra), the district court’s order in this case was final in

this sense because it ended the relevant litigation con-

cerning the validity of the particular agency action be-

fore the court on judicial review. But even if we as-

sume, arguendo, that the order was not a final judgment,

it nevertheless was a “final decision” for purposes of

Section 1291.

As the Court has explained, Section 1291 does] not

uniformly limit appellate jurisdiction to ‘those final judg-

ments which terminate an action.“ Abney v. United

States, 431 U.S. 651, 658 (1977) (quoting Cohen, 337

U.S. 545). Rather, “[I]t is a final decision that Con-

gress has made reviewable. . . . While a final judg-

ment always is a final decision, there are instances in

which a fina! decision is not a final judgment.” Abney,

431 U.S. at 658 (quoting Stack v. Boyle, 342 U.S. 1, 12

(1951) (Jackson, J., concurring) ). See also Mitchell v.

Forsyth, 472 U.S. 511, 524 (1985) (“a decision ‘final’

within the meaning of § 1291 does not necessarily mean

the last order possible to be made in a case”). The stat-

utory reference to “final decisions” thus suggests a flex-

ibility that is harder to read into the term “final judg-

2 As the Court explained in Eisen v. Carlisle & Jacquelin, 417 U.S.

156, 170 (1974): “No verbal formula yet devised can explain prior

finality decisions with unerring accuracy or provide an utterly re-

liable guide for the future.”

5

ment.“ And the Court has repeatedly emphasized that

the inquiry into finality requires an evaluation of the

“eompeting considerations” underlying questions of ap-

pealability. Eisen v. Carlisle & Jacquelin, 417 U.S. 156,

171 (1974); see also Dickinson v. Petroleum Conversion

Corp., 338 U.S. 507, 511 (1950). Cohen and its progeny

thus do not represent an “exception” to the general prin-

ciple of finality under 28 U.S.C. 1291, but rather an ap-

plication of that principle to a discrete category of cases

involving orders entered in the course of on-going pro-

ceedings in the district court.*

3 Respondent’s reliance (Br. 34 n.28) on Ex parte Tiffany, 252 U.S.

32, 36 (1920), for the proposition that the term “final decision” in

what is now Section 1291 means the same thing as “final judgment”

therefore is inconsistent with the Court’s more recent understand-

ing. Harrington v. Haller, 111 U.S. 796, 797 (1884), also cited by

respondent (Br. 34 n.28), involved a different jurisdictional statute

governing this Court’s jurisdiction to review decisions of a terri-

torial court.

On a similar point, respondent also miscites P. Bator, D. Meltzer,

P. Mishkin & D. Shapiro, Hart & Wechsler’s The Federal Courts

and the Federal System (3d ed. 1988). That work does not, as

respondent implies (Br. 34 n.28), argue that “final decision” (in

Section 1291) is a more restrictive term than “final judgment” (in

28 U.S.C. 1257). To the contrary, in the discussion cited by re-

spondent, the work simply proposes several possible bases for dis-

tinguishing between the sections, several of which—including

the language of the two statutes”"—cut in favor of a broader

reading of Section 1291. P. Bator et al., supra, at 1812.

In any event, the term “final judgment” in 28 U.S.C. 1257, which

governs this Court’s jurisdiction to review the decisions of state

courts, also has been given a practical construction. That construc-

tion permits review by this Court of a distinct federal issue re-

solved by a state appellate court in certain circumstances, even

where further proceedings, including a trial, remain to be con-

ducted in a lower state court on remand. See generally Cox Broad-

casting Corp. v. Cohn, 420 U.S. 469, 477-485 (1875). It is signifi-

cant that in those cases, as here, there was no interference with

on-going proceedings in the court whose decision was deemed

final.“

A similar application of, rather than exception to, the finality

requirement in Section 1291 is embodied in Fed. R. Civ. P. 54(b).

In Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 436-437 (1956),

6

Of course, Cohen does represent an exception to the

general rule under Section 1291 that ordinarily there

is no “final decision” until the district court has entered

a final judgment that terminates the entire litigation.

But the Court has not held that orders satisfying the

precise terminology used in Cohen and its progeny ex-

haust the category of orders that qualify for appeal

prior to entry of a judgment formally terminating the

litigation. To the contrary, the Court has held that

(quite aside from the “collateral order” doctrine) an

order staying proceedings pending resolution of state-

court proceedings on the same issue was a “final de-

cision” because, although no final judgment had been

entered, the order meant that as a practical matter there

would be no further litigation on the issue in the dis-

trict court. Moses H. Cone Memorial Hosp. v. Mercury

Constr. Corp., 460 U.S. 1, 9-10 (1983). See also Forgay

v. Conrad, 47 U.S. (6 How.) 201, 203 (1848); Brown

Shoe Co. v. United States, 370 U.S. 294, 307-311 (1962);

cf. Coopers & Lybrand v. Livesay, 437 U.S. 463, 467-

468 (1978) (because order refusing to certify a class

did not terminate the litigation, it could be appealed

under Section 1291 only if it came within “an appro-

priate exception” to the final-judgment rule; respond-

ents relied solely on the “collateral order” exception ar-

ticulated in Cohen).

b. There is no need here, however, for the Court to

articulate any new or distinct exception to the final-

judgment rule. Taking into account the structurally

different character of the present case—the fact that

the action alleged to preclude “finality” is the remand

to a different Branch—it is clear that the principles

underlying Cohen and its progeny fully support the Sec-

retary's right of appeal. Those principles, like the

the Court explained that Rule 54(b) is not in derogation of the

finality requirement; rather, it is an authorization to release for

appeal “final decisions” on one or more, but less than all, claims in

7

finality requirement itself, must be given a “practical

rather than a technical construction.” 337 U.S. at 546.

Ultimately, the inquiry must be whether allowing an

appeal is consistent with the purposes of the finality

requirement, and each prong of the Cohen formulation

should be interpreted in light of those purposes.“

i. The first requirement under the Cohen doctrine—

that the district court’s order “conclusively determine

the disputed question,” Coopers & Lybrand, 437 U.S.

5 Respondent's assertion (Br. 33) that the precise articulation of

the factors in Coopers & Lybrand is “fully applicable in the context

of judicial review of administrative agency action’—and requires

dismissal of the Secretary’s appeal here—is incorrect. Respondent

principally relies for this assertion upon FTC v. Standard Oil Co.,

449 U.S. 232 (1980), but that case involved the completely different

issue of the finality of an administrative decision.

Ironically, respondent also cites (Br. 33) Occidental Petroleum

Corp. v. SEC, 873 F.2d 325, 328-332 (D.C. Cir. 1989), for the same

point. In Occidental Petroleum, the court of appeals in fact sus-

tained the agency’s right of appeal, despite the inclusion of a

remand in the district court’s order, and it specifically recognized

the need for a practical application of the Cohen factors in that

setting. 873 F.2d at 330-331. The court observed: “At least in the

present context, the distinction between a final order and an inter-

locutory order that is nonetheless appealable under the collateral

order doctrine is, as a practical matter, purely terminological.” Id.

at 331.

Finally, respondent errs in citing (Br. 33) Seatrain Shipbuilding

Corp. v. Shell Oil Co., 444 U.S. 572 (1980) (Br. 33) in support of

her argument that the Secretary could not appeal in this case

under the principles of Cohen. The Court in Seatrain did not reach

the question whether the district court’s order was final in all

respects, because it found that the district court had properly

exercised its authority to release for appeal a “final decision” relat-

ing to one aspect of the case. See note 4, supra. The sentence

quoted by respondent (444 U.S. at 583 n.21) emphasizes the finality

of the decision being appealed, even assuming (though the Court

clearly did not decide, see id. at 581 n.17) that the disposition of

the case as a whole was not “final” for purposes of 28 U.S.C. 1291.

Moreover, in Seatrain, the appeal in question was not taken by the

agency (as in this case), but by the private party who had success-

fully urged the district court to set aside the agency action.

at 468—is clearly satisfied. Respondent reduces her an-

swer on this point to a foctnote, observing (Br. 40-41

n.33) that “there is nothing to prevent the district court

from reconsidering its prior decision following a return

to the district court by either party.” This aspect of the

Cohen test, however, was intended to exclude orders

that are “inherently tentative,” such as the order denying

class certification in Coopers & Lybrand. See Moses H.

Cone, 460 U.S. at 12 n.14 (quoting 437 U.S. at 469 n.11).

Accord Gulfstream Aerospace Corp. v. Mayacamas Corp.,

485 U.S. 271, 277-278 (1988); see also Cohen, 337

U.S. at 546 (statute “disallow[s] appeal from any de-

cision which is tentative, informal or incomplete“). Con-

trary to respondent’s contention, the mere possibility,

which is present in virtually every case, that a prior

ruling might be altered for cause shown prior to entry

of a final judgment does not render all such orders “ ‘in-

herently tentative’ in the sense of that phrase in Coop-

ers & Lybrand.” Moses H. Cone, 460 U.S. at 12-13 n.14.

It is therefore sufficient here that the district court’s rul-

ing regarding the legal insufficiency of the Secretary’s

reliance on the Listing was made “with the expectation

that [it] will be the final word on the subject addressed.”

Ibid.

ii. With respect to the second factor articulated in

Cohen and related cases, the point, as emphasized in our

opening brief (Gov’t Br. 40-41), is that the issue on

appeal is functionally separate from the rest of the case

in two critical respects. First, because the cause is no

longer before the district court, but rather has been

remanded in its entirety to the Secretary, there can be

no disruption of an ongoing trial process in the district

court—a principal danger that underlies this aspect of

the Cohen limitation of appellate jurisdiction. See Bud-

inich v. Becton Dickinson & Co., 486 U.S. 196, 202

(1988) (inquiring whether appeal will be “disruptive of

ongoing proceedings”); Moses H. Cone, 460 U.S. at 31

(Rehnquist, J., dissenting) (Section 1291 “is a con-

gressional command to the federal courts of appeals not

to interfere with the district courts’ management of

ongoing proceedings”) .°

Second, since the agency on remand is governed by

the district court’s ruling on the matter sought to be

appealed in this case, that matter cannot be reconsidered

by the agency or affected by its new decision. Nor will it

be an issue in the district court if and when a later ac-

tion for review is brought by the claimant, except in the

sense that any court has the power to reverse itself

on an earlier ruling in the same proceeding—a bare pos-

sibility that, as we have already shown (see page 8,

supra), is insufficient to preclude appealability. See

Abney, 431 U.S. at 660 (quoting Cohen, 337 U.S. at 546

(matter appealed “will not ‘affect, or ... be af-

fected by,” subsequent proceedings in district court) ).

Nor, contrary to respondent’s contention (Br. 43-44),

does the existence of some factual overlap between the

issue being appealed and the proceedings on remand fore-

close the Secretary’s right of appeal. See Mitchell v.

Forsyth, 472 U.S. at 528-529 & n. 10.“

The Court has observed that the second requirement under the

Cohen formulation—the separability of the issue to be appealed— is

“(e}losely related to the ‘threshold requirement of a fully consum-

mated decision.“ United States v. MacDonald, 435 U.S. 850, 859

(1978). Because a district court order holding the Secretary's de-

cision unlawful and remanding for further proceedings under dif-

ferent legal standards constitutes a final rejection of the particular

decision of the Secretary that is before the court, an appeal by the

Secretary is not “likely to eliminate a trial judge's opportunity for

reconsideration.” Budinich, 486 U.S. at 202.

7 Respondent also argues (Br. 41-43) that an appeal should not be

allowed because the district court did not resolve an “important

issue.” Yet it is hard to see how a decision effectively invalidating a

policy of the Secretary embodied in forma] regulations can be

regarded as anything less. Respondent disputes (Br. 41 n.34) that

the district court’s order had that effect. But the district court

affirmed the Secretary's finding that respondent did not establish

that she had an impairment that met or equalled a listed impair-

ment. Pet. App. l5a-léa. If the district court had respected the

10

iti. With respect to the third factor—the “effective

unreviewability” of the ruling at a later stage—we

strongly disagree with both of respondent’s arguments.

The fact that the claimant may return to the district

court if she loses in the rehearing at the administrative

level (see Resp. Br. 37-38) is and should be analytically

irrelevant. The notion of reviewability as developed in

Cohen and its progeny is one that turns on whether the

decision now being appealed will be subject to later re-

view if the other party to the litigation ultimately pre-

vails. After all, reviewability (in the court of appeals)

if the claimant loses at the administrative level depends

entirely on facts beyond the Secretary’s control—

whether the claimant seeks judicial review of the Sec-

retary’s new decision and whether, if she does, she pre-

vails in the district court.

Respondent argues in the alternative (Br. 38-40) that

the district court’s decision at this stage will be review-

statutory text (42 U.S.C. 423(d)(2)(B) (1982 & Supp. V 1987))

and the Secretary's implementing regulations, that finding would

have compelled affirmance of the Secretary's decision denying re-

spondent’s claim. See Gov't Br. 5 n.7. The district court's insistence

on a distinct, individualized assessment of residual functional capac-

ity therefore effectively invalidated the statutory and regulatory

limitation on eligibility. Compare Heckler v. Campbell, 461 U.S. 458,

465-466 (1983) (lower court’s requirement that additional evidence

be introduced on particular types of jobs available for claimant im-

plicitly calls into question validity of medical-vocational guidelines

that dictate answer to that question).

Despite respondent’s protestations (Resp. Br. 41, 48), the fact

that the same question may arise in some o* ser case that may reach

a court of appeals is irrelevant both to tie issue of the importance

of the district court’s determination and to the issue, discussed

below, of the effective unreviewability of that determination. That

the question may arise in another case is a fortuity that has never

entered into the calculus and should not. And indeed the matter of

appealability in dispute here is at least as likely to arise in the

context of district court review of administrative regulations that

would not be subject to review in any other forum or any other

case. Compare Gov't Br. 39 n.30.

11

able if the claimant prevails before the Secretary be-

= — — may file the decision in district

court for purposes of determining attorney’s fees under

the Equal Access to Justice Act (EAJA), 28 U.S.C. 2412.

This is an argument we think the Court can accept only

by severely straining statutory provisions governing ju-

dicial review that were enacted long before the EAJA.

Although we agree that it is appropriate for the Sec-

retary to notify the district court of a decision in the

claimant’s favor on remand so that EAJA fees may be

awarded, the limited, essentially ministerial purpose of

that notification does not extend to a review of the

merits, either in the district court or the court of ap-

peals. See point 2(b), infra.* Indeed, if it did, what

would prevent the Secretary from disagreeing with the

judgment of his own Appeals Council and asking the

district court not to affirm (as respondent apparently be-

lieves the Secretary must do) but to reverse, because the

Appeals Council made an error on remand? The Secre-

tary has no such authority as a general matter (see

All but one of the cases cited by respondent (Br. 23-24, 39 n.31)

that refer to the Secretary's filing with the court any decision on

remand that is favorable to the claimant were concerned only with

providing a realistic mechanism for the award of attorney’s fees

at that point. In each of those cases, the claimant was not yet a

“prevailing party” within the meaning of the EAJA at the time of

the court’s order setting aside the Secretary’s first decision (which

denied benefits) and remanding for further p ings. See Sulli-

van v. Hudson, 109 8. Ct. 2248, 2255 (1989 hae poe infra. None

of the cases suggested that the court would take any further action

on the merits beyond the essentially ministerial act of entering an

order on the basis of the Secretary's filing in order to trigger the

court's authority to award attorney’s fees under the EAJA. In the

remaining case, Wilson v. Heckler, 609 F. Supp. 120 W. D. Mo.

1985), the court expressly stated that the sixth sentence of 42

U.S.C. 405(g) requires a subsequent filing in court only where the

court has provided for reopening of the administrative proceedings

“before making any decision on the merits.” 609 F. Supp. at 122.

12

Gov’t Br. 42 & n.33), and he does not seek it here.“ But

we do not see how it can be denied if the district court’s

jurisdiction is as expansive as respondent now argues.

2.a. Our broader submission in this case is that the

district court’s order was “final,” in the fullest sense of

that term, because it constituted a final rejection of the

particular administrative decision before the court on

judicial review and therefore ended the relevant litiga-

tion on the merits. The finality of the court’s order in

this regard is not destroyed by the fact that the court,

as relief, then remanded the cause to the Secretary for

a fresh round of administrative proceedings and the

rendering of a new decision. To the contrary, the re-

o Respondent errs in relying (Br. 23-24, 38-39) on the sixth sen-

tence of 42 U.S.C. 405(g) as requiring the Secretary to file the new

decision on remand with the court in a case such as this. As we

have explained (Gov't Br. 21-24), the sixth sentence (including the

filing requirement) applies only to a special category of remands

initiated by the Secretary or ordered by the court for the receipt

of newly discovered evidence. But even if the sixth sentence re-

quirement extended to the present situation, it would not follow

that the Secretary would thereby be authorized to challenge the

decision of his own Appeals Council awarding benefits. The Secre-

tary lacks a right to judicial review even where he believes that

the Appeals Council has committed an error of law. We see no

statutory basis for an exception to this preclusion where the Ap-

peals Council's legal error was dictated by a judicial order in pro-

ceedings for judicial review of the Secretary's original decision.

To the contrary, the seventh sentence of 42 U.S.C. 405(g), which

respondent properly insists (Br. 38-39) must be read in tandem with

the filing requirement in the sixth sentence, provides that the new

findings and decision filed with the court after a remand “shall be

reviewable only to the extent provided for review of the original

findings of fact and decision.”

If the Secretary cannot challenge the decision of his own Appeals

Council in the district court, it would seem to follow that he cannot

appeal a district court order affirming the Appeals Council’s deci-

sion. Thus, the Secretary’s ministerial district court filing, for pur-

poses of the EAJA, of a remand decision favorable to the claimant

does not furnish a suitable procedure for the Secretary to challenge

the district court's prior legal ruling in the court of appeals.

13

mand underscores the finality of the judicial order be-

cause it removed all matters concerning respondent’s

claim for benefits from the court and returned them to

the official of another Branch who is responsible for ad-

ministering the Social Security Act.

In a case such as this, the district court’s mandate is

fully satisfied, and the claimant receives all the relief

to which she is entitled under the court’s order, when the

Secretary completes the rehearing pursuant to the re-

mand and renders a new decision on the claim for bene-

fits. The possibility of subsequent proceedings for judi-

cial review on the distinct question of the validity of the

Secretary’s second decision therefore does not detract

from the finality, for purposes of 28 U.S.C. 1291, of the

court’s order holding the Secretary’s first decision un-

lawful.

As explained in our opening brief (Gov’t Br. 30-36),

this conclusion is supported by general principles gov-

erning judicial review of agency action under the Ad-

ministrative Procedure Act, as well as principles of final-

ity under 28 U.S.C. 1291 and similar statutes.” We

1% We have cited in our opening brief (Gov't Br. 29-30) several

of this Court’s decisions in cases arising under the Hobbs Ad-

ministrative Orders Review Act, 28 U.S.C. 2341-2350, which (in

Section 2350) limits this Court’s review to orders granting or

denying interlocutory injunctions and to “final” judgments. (Just

last month, this Court granted certiorari in two other such cases in

which the court of appeals remanded to the agency, and no jurisdic-

tional question was raised in the petitions or responses or suggested

by the Court. See Norfolk & Western Ry. v. American Train Dis-

patchers Ass’n, No. 89-1027 (Mar. 26, 1990); CSX Transportation,

Inc. v. Brotherhood of Railway Carmen, No. 89-1028 (Mar. 26,

1990).)

The purpose of those citations was not to show that the precise

jurisdictional issue raised here has already been addressed and

resolved by the Court, but rather to indicate that in a closely analo-

gous context, the litigants and this Court have—quite properly in

our view—assumed the existence of jurisdiction. Respondent, how-

ever, argues that the cases are not in point because this Court is

not limited by the “final judgment” language in Section 2350: in

respondent’s view (Br. 33-34 n.28), the Court also has jurisdiction

14

further explained (Gov’t Br. 15-21, 27) that those gen-

eral principles are given expression in the precise con-

text of this case in the statutory provision governing

judicial review of agency action under the Social Secur-

ity Act, 42 U.S.C. 405(g). The fourth and eighth sen-

tences of Section 405(g) expressly contemplate (i) that

a judicial order affirming, modifying, or reversing the

Secretary’s decision is a “final” “judgment,” whether or

not the court “remand[s] the cause for a rehearing” by

the Secretary, and (ii) that any such judgment (i. e.,

whether “with or without” a remand) “shall be subject

to review in the same manner as a judgment in other

civil actions.“ Contrary to respondent’s assertion (Br.

13 & n.9, 16), this is not a novel interpretation of 42

U.S.C. 405(g). It was relied upon by the Fifth Circuit

in its leading decision rendered more than 20 years ago,

under 28 U.S.C. 1254(1) to grant certiorari in such cases in the

absence of a final judgment. That cannot be. The Hobbs Act makes

the courts of appeals the point of entry into the federal judicial

system in cases subject to its terms, and Section 2350 is plainly

designed to put this Court, as the first reviewing court, in the

same relation to the courts of appeals that those courts normally

bear to the district courts. Thus, the specific provisions of Section

2350 must prevail over the more general provisions of Section 1254.

In her only effort to grapple with the controlling statutory

text, respondent views (Br. 25) the quoted language as merely

suggesting that, in determining the appealability of district court

orders entered under 42 U.S.C. 405(g), appellate courts should look

to the appropriate jurisprudence under Section 1291. But that is

not what the fourth and eighth sentences gay. They provide that

an order such as that at issue here is both a judgment“ and final“

—terms strongly indicative of appealability—and that the judgment

“shall be subject to review” in the same “manner” (ie, subject to

the same procedures) as the judgment in other civil actions. There

is no suggestion that the judgment, deemed final, might not be

subject to appeal at all. Respondent’s extended discussion (Br. 20-

23) of the source of the district court’s remand authority—.e.,

whether it is conferred by Section 405(g) or an inherent equitable

power—is irrelevant to the question whether a remand precludes

an appeal of an otherwise appealable order.

15

Cohen v. Perales, 412 F.2d at 48. See also Taylor v.

Heckler, 778 F.2d 674, 676-677 (11th Cir. 1985).

b. In her effort to reply to our argument, respondent

wholly misconceives it. She states (Br. 13-15) that we

are claiming a right to appeal from a “fourth sentence”

remand order, although we concede that there can be

no appeal from a “sixth sentence” remand order under

42 U.S.C. 405 (g). Thus, she concludes (Br. 30-31), we

are asking courts to enter an intricate thicket of dis-

tinguishing among remand orders, a task whose diffi-

culty, in her view, is demonstrated by our disagreement

about what type of remand order is involved here.

Respondent is correct that we disagree about whether

the remand in this case was issued under the sixth sen-

tence of Section 405(g); we think it clear that it was

not.“ But that disagreement is irrelevant to our argu-

ment. The point remains that we are appealing not

from the remand itself, but from the district court’s

antecedent decision—unquestionably made under the au-

thority granted by the fourth sentence of Section 405(g)

12 To be sure, most decisions sustaining the Secretary's right of

appeal in circumstances such as these have relied on the rationale

of Cohen v. Beneficial Industrial Loan Corp., which also was relied

upon in Perales, 412 F.2d at 48.

18 Respondent’s contention (Br. 28-29) that the district court’s

remand in this case was governed by the sixth sentence of 42 U.S.C.

405(g), and for this reason could not be appealed by the Secretary

even under our theory, is wholly without merit. The case was not

remanded for the receipt of “new” and “material” evidence to

facilitate the court’s own review of the Secretary’s decision; it was

remanded only after, and as a consequence of, such review by the

court, which found the Secretary’s decision unlawful because of its

reliance on the Listing of Impairments. As explained in our open-

ing brief (Gov’t Br. 23-24), the courts of appeals have uniformly

recognized that such a remand is not governed by the sixth sentence

of Section 405(g). Contrary to respondent’s suggestion (Br. 28,

29), the fact that the district court's order contains the phrase “for

good cause shown”—a phrase also contained in the sixth sentence

of Section 405(g)—does not alter the fundamental character of the

order.

16

—reversing the Secretary for an error of law in his

reliance on the Listing of Impairments in the govern-

ing regulations. That is the decision we contend is made

“final” both by the explicit terms of Section 405(g) and

by general principles of finality. And since the re-

spondent’s action for judicial review has been effectively

terminated for present purposes (though not for pur-

poses of an award of attorney’s fees) by the remand,

an appeal properly lies. Because the remand itself is

not the subject of the Secretary’s appeal in a case such

as this, there is no need to distinguish between different

types of remands as a precondition to entertaining his

appeal.

The point, we believe, is well illustrated by the closely

analogous ruling of this Court in Waco v. United States

Fidelity & Guaranty Co., 292 U.S. 140 (1934). In that

case, a third party who had been impleaded in a state

court removed the action to a federal court; the federal

court in “a single decree” (id. at 142) dismissed the ac-

tion against the third party and, there being no remain-

ing diversity of citizenship, remanded the case to the

state court. One of the defendants then sought to appeal

not from the order of remand, but from that dismissing

its action against [the third party].” Jbid. Although

recognizing that then (as now, see 28 U.S.C. 1447(d))

no appeal lay from an order of remand, this Court up-

held the defendant’s right to appeal the dismissal of its

action against the third-party defendant. If the appeal

was sustained, even though it might not affect the order

of remand, it would restore the third-party defendant to

the action. So here, if the appeal is sustained, it will

restore the decision of the Secretary and the regulatory

policy that was effectively invalidated by the district

court. Accord, Mitchell v. Carlson, No. 89-1377 (5th Cir.

Mar. 15, 1990), slip op. 2659-2663.“

14 Because the subject of the Secretary’s appeal was not the re-

mand itself, but the district court’s overturning of the Secretary’s

decision (and the legal ruling on which it was based), the Secre-

tary’s right of appeal is fully consistent with the general rule, cited

17

c. Respondent’s reliance (Br. 14, 17-20, 35) on the

decision last Term in Sullivan v. Hudson, 109 S. Ct. 2248

(1989), is misplaced. The issue the government argued

and lost in Hudson is whether attorney’s fees may be

awarded under the EAJA (28 U.S.C. 2412) for services

rendered in proceedings before the agency on remand—

an issue that is quite distinct from the question of ap-

pellate jurisdiction under a statute enacted long before

the EAJA. Under the EAJA, no fees can be awarded

for work done at any level (administrative or judicial)

until it is determined whether the claimant is a “pre-

vailing party” on his or her underlying claim for bene-

fits. Sullivan v. Hudson, 109 S. Ct. at 2255. When a

court sets aside the Secretary’s initial decision denying

benefits and remands the entire cause to the Secretary,

that determination must await the outcome of the re-

hearing on remand and any further action for judicial

review. To accommodate this feature of the EAJA, it

is appropriate for the record on remand to be filed with

the court if the claimant has prevailed, so that a fee de-

termination may be made. Thus, as the Court noted in

Hudson, “for purposes of the EAJA,” finality must

await the outcome of proceedings on remand. 109 S. Ct.

by respondent, that “a [district court’s] remand order [to any ad-

ministrative agency] is ‘interlocutory’ rather than ‘final,’ and thus

may not be appealed immediately” under 28 U.S.C. 1291. See Resp.

Br. 12-13 (quoting Occidental Petroleum Corp. v. SEC, 873 F.2d

at 329). In fact, Occidental Petroleum sustained the agency’s right

of appeal where, as here, the district court’s order resolved a legal

issue on which effective appellate review might be foreclosed at a

later date.

The fact that the Secretary’s appeal is from the district court's

ruling on the merits (not the resulting remand) also serves to

distinguish this case from those in which the courts have not per-

mitted a claimant to appeal a pure remand order. Thus, the result

we believe Section 405(g) requires would not impose a burden on

the courts of appeals of entertaining appeals by claimants who chal-

lenge the court’s separate decision to remand for further pro-

ceedings.

18

at 2255. But the proposition that the absence of final-

ity with respect to attorney’s fees does not affect finality

for purposes of appeal is one well recognized by this

Court. See Budinich v. Becton Dickinson & Co., supra.

Thus, respondent is in error in suggesting that the deci-

sion in Hudson somehow resolves the issue here.“

10 The passage in the House Report on the 1985 amendments to

the EAJA quoted by respondent (Br. 18 n.13, 27) has no bearing

on the proper interpretation of 28 U.S.C. 1291 and 42 U.S.C.

405(g), which were enacted many years earlier. In any event, that

passage was part of a discussion about the practical application of

the EAJA in the particular context of remand orders that do not

in themselves render a claimant a “prevailing party” on his under-

lying benefits claim; it did not express any view on the appeal-

ability question. See H.R. Rep. No. 120, 99th Cong., Ist Sess. 19-20

(1985).

16 Respondent contends that we made a crucial concession in

Hudson that a remand order from a district court to the agency is

not a final determination of the civil action and that the district

court “retains jurisdiction to review any determination rendered on

remand.” Resp. Br. 14, 19, quoting Hudson, 109 S. Ct. at 2255

(quoting Hudson Pet. Br. at 16-17). The single sentence in our

opening brief in Hudson (at 16-17) upon which respondent appar-

ently relies stated: “Respondent asserts that since the reviewing

court retains jurisdiction to review any decision rendered on remand

[footnote quoting sixth sentence of Section 405(g) omitted], the re-

mand order does not terminate the judicial action, and the proceed-

ings on remand must therefore be treated as part of the civil action

for purposes of EAJA.” This sentence essentially recited the re-

spondent’s position as articulated in her brief in opposition; it did

not concede that a remand does not terminate the judicial action, and

& did not purport to be a definitive of explication 42 U.S.C. 405(g)

in all respects, especially as regards appealability under 28 U.S.C.

1291, which was not mentioned.

Any doubt on this score is dispelled by our reply brief on the

merits in Hudson (at 14-17). There, we answered at length the

respondent’s reliance on the sixth sentence of Section 405(g). We

argued (Reply Br. 16), citing Cohen v. Perales, supra, that an

order modifying or reversing the Secretary’s decision on the merits

and remanding for a rehearing under different legal standards “is

a ‘final judgment’ that effectively terminates the proceedings for

judicial review of the particular decision of the Secretary that was

modified or reversed.” Moreover, in both our opening brief (at 17)

sult of the prompt appellate holding to that effect. Un-

der the Secretary’s announced policy concerning acquies-

cence in the adverse rulings of a circuit court of appeals

within that circuit, the Secretary will either seek further

review of the court of appeals’ ruling or will promptly

publish his acquiescence in it. See 55 Fed. Reg. 1012

(Jan. 11, 1990). But until and unless such a definitive

ruling by the court of appeals is obtained, no acquies-

cence can be forthcoming with respect to an issue on

which district court holdings (and even the holdings of

other circuits) conflict with the Secretary’s view. Such

and reply brief ‘at 15), we urged that whether or not the particular

district court decision was “final,” attorney’s fees should not be

awarded for work done at the administrative level. We of course

do not challenge the Court's contrary holding in Hudson regarding

the availabiilty of attorney’s fees, but the Secretary cannot fairly

be taken to have made any concessions there that undermine his

right of appeal here.

17 Respondent suggests (Br. 35-36 n.29) that we are relying on

Section 1292(a)(1) as an independent basis of jurisdiction. Al-

though such reliance was indicated in our certiorari petition (Pet.

18-19), we did not press it in our opening brief. Rather, we sought

(Gov’t Br. 33-34 n.27) to support our finality argument by showing

that, in the absence of specific statutory review provisions, an ac-

tion such as this would have been brought as an independent action

for mandamus or an injunction, and the court’s order setting aside

the agency's decision and ordering the Executive Branch official to

a ruling by the court of appeals will also serve the public

interest by relieving the district courts in the circuit of

the burden of further litigation on the legal issue. More-

over, in many instances involving an important adminis-

trative policy, allowing an appeal from a district court

ruling that the policy is invalid will eliminate the wide-

spread uncertainty created by the district court's

opinion.

For the foregoing reasons and those stated in our

opening brief, it is respectfully submitted that the judg-

ment of the court of appeals should be reversed.

KENNETH W. STARR

Solicitor Generai

APRIL 1990

conduct a new round of administrative proceedings would unques-

tionably have been subject to an immediate appeal.

Contrary to respondent’s suggestion (Br. 48-50), the availability

of interlocutory appeals under 28 U.S.C. 1292(b) should not affect

has authorized as of right would be replaced by an appeal that is

wholly within the unreviewable and absolute discretion of both the

district and appellate courts.

Ä 1990 262203 654