Opposition Brief — Pittman v. Sullivan

Suprema Court, U.S

EILED

Y FEB 15 1991

petaenss | OFFICE OF THE CLERK |

Jn the Supreme Court of the United States

OCTOBER TERM, 1990

Loui§t V. PITTMAN, ET AL.. PETITIONERS

Vv.

Louis W. SULLIVAN,

SECRETARY OF HEALTH AND HUMAN SERVICES

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

KENNETH W. STARR

Solicitor General

STUART M. GERSON

Assistant Attorney General

WILLIAM KANTER

MICHAEL E. ROBINSON

Attorneys

Department of Justice

Washington, D.C. 20530

202) 514-2217

QUESTIONS PRESENTED

a Whether the court of appeals correctly held that

a litigant may not, through the mechanism of a contempt

proceeding, obtain reconsideration of an order that has

become final and non-appealable.

2. Whether the court of appeals correctly held that a

district court has no authority to order the Secretary of

Health and Human Services (HHS) to pay from general

funds an attorney’s fee award in disability benefits cases

under Section 206(a)(1) of the Social Security Act, 42 U.S.C.

406(a)(1), for services performed by an attorney before the

agency.

TABLE OF CONTENTS

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A. Facts relating to petitioner Ziegenhorn ....

B. Facts relating to petitioner Pittman ........

C. Proceedings on appeal ...................

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TABLE OF AUTHORITIES

X ases:

Alexander v. Hill, 707 &.2d 780 (4th Cir.), cert.

CO EE yt

Berger vy. Heckler, 771 F.2d 1556 (2d Cir.

ER ee ey eke ahem Aa

Copuken \. Secretary of HEW, 590 F.2d 729 (8th

IR Sdn co's os Wane ae SR Oke s.6

Cornella \. Schweiker, 728 F.2d 978 (8th Cir.

ne gs a de hoy dele 04 CeO

Gardner \. Menendez, 373 F.2d 488 (Ist Cir.

Ea aL SS Se ee,

Gowen vv. Bowen, 855 +.2d 613 (8th Cir.

en a nee ba eee see a

Guido \. Schwetker, 775 F.2d 107 (3d Cir.

TN a rn a alg “bie As Sc

Local 28 of the Sheet Metal Workers’ Int'l Ass'n \.

Oe ORR og: | rn

Maggio v. Zeitz, 333 U.S. 56 (1948) ...........

McComb v. Jacksonville Paper Co., 336 U.S. 187

EE MS ied SER ge oe

Ruckelshaus . Sierra Club, 463 U.S. 680

EC Ue ie a a ree

Sauth v. Bounds, 813 F.2d 1299 (4th Cir.), cert.

denied, 488 U.S. 869 (1987) ..............

(111)

Page

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Cases — Continued:

United States v. Millstone Enters., Inc. , 864 F.2d 21

(3d Cir. 1988) .. enema ape

United States v. Ryan, 402 U.S. 530 (1971) .

United States v. Rylander, 460 U.S. 752 (1983) ..

Webb vy. Richardson, 472 F.2d 529 (6th Cir.

EE ee Cs aa be Pe ke TR ne ie oes

Whitt v. Califano, 601 F.2d 160 (4th Cir.

Mane

Statutes and rule:

Social Security Act, 42 U.S.C. 301 ef seq.:

42 U.S.C. 404 .. aa

SP U.S. Mee once,

42 U.S.C. 404(b)

42 USC. @ ...

42 U.S.C. 406(a) .. a

42 U.S.C. 406(a)(1)

42 U.S.C. 406(b)(1) ............---. 2.4,

42 U.S.C. 423(f) ...

42 U.S.C. 423(g)

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

Social Security Disability Benefits Reform Act of

1984. Pub. L. No. 98-460, 98 Stat. 1794

18 U.S.C. 4013) ......

Fed. R. App. P. 4(a)

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Jn the Supreme Court of the United States

OCTOBER TERM, 1990

No. 90-858

Loule V. PITTMAN, ET AL., PETITIONERS

Vv.

Louis W. SULLIVAN,

SECRETARY OF HEALTH AND HUMAN SERVICES

ON PETITION FOR A WRIT OF CERTIORARI

10 THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

OPINIONS BELOW

[he opinion of the court of appeals (Pet. App. A33-A55)

is reported at 911 F.2d 42. The opinions of the district court

in Pittman v. Secretary of Health & Human Services (Pet.

App. B56-B72) and Ziegenhorn v. Bowen (Pet. App.

(73-C93) are unreported.

JURISDICTION

[he judgment of the court of appeals was entered on

August 1, 1990. A petition for rehearing was denied on

September 19, 1990. Pet. App. D94-D95. The petition for

cerulorarl was filed on November 30, 1990. The jurisdic-

tion of this Court is invoked under 28 U.S.C. 1254(1).

(1)

to

STATEMENT

A. Facts Relating to Petitioner Ziegenhorn

1. Petitioner Ziegenhorn had received disability in-

surance benefits prior to February 28, 1984, when the Social

Security Administration (SSA) determined that his disability

had ceased and terminated his benefits. Ziegenhorn then

filed a complaint in the district court challenging the ter-

mination of his benefits. While the case was pending, Con-

gress enacted the Social Security Disability Benefits Reform

Act of 1984 (the 1984 Reform Act), which, among other

things, provided a new standard to be used in determining

whether a beneficiary’s disability had ceased. 42 U.S.C.

423(f). On the Secretary’s motion, the district court re-

manded the case for further review under the new standard.

See Pet. App. C73.

2. While the case was on remand, Ziegenhorn elected

to receive interim disability benefits under 42 U.S.C. 423(g).'

See Pet. App. A34. In October 1986, the Secretary reinstated

Ziegenhorn’s benefits. Excluding interim benefits already

paid, Ziegenhorn’s past-due benefits totaled $3,958.70. /d.

at A36.

3. The Social Security Act authorizes a court to award

an attorney’s fee of up to 25% of past-due benefits awarded

by the court. 42 U.S.C. 406(b)(1). This fee is to be paid

“out of, and not in addition to, the amount of such past-

due benefits.” Jbid. Accordingly, the Secretary withheld

25% of the past-due benefits, for payment of authorized

42 U.S.C. 423(g)(2)(A) provides that where “the final decision ot

the Secretary atfirms the determination that [a claimant] is not entitled

to such benefits, any benefits paid * * * pursuant to such election

shall be considered overpayments.” Such “overpayments” are subject

recoupment by the SSA pursuant to 42 U.S.C. 404(a)(1} unless

very would defeat the purpose of [the Act] or would be against

ty and good conscience.” 42 U.S.C. 404(b)

x * %

3

attorney’s fees, and released the remainder to the claimant.

Pet App. A36.

4. In April 1987, the district court awarded Ziegenhorn’s

attorney (Anthony Bartels) a fee of $1,015, or 25% of

Ziegenhorn’s past-due benefits, whichever was less, for his

representation of Ziegenhorn in the district court. Pet. App.

A36. As the district court subsequently noted, the order “was

silent on the question of how the Secretary was (o calculate

attorney fees from the claimant’s past due benefits * * *

[although,] as Mr. Bartels [was] aware, it had been previous-

ly the opinion of this court that interim benefits could be

excluded from attorney fee calculations.” Pet. App. C77.

Bartels did not appeal this order.

5. The Social Security Act similarly authorizes the

Secretary to make an award of a reasonable attorney fee

of up to 25% of past-due benefits awarded by the agency

in administrative proceedings. 42 U.S.C. 406(a). As with

fees awarded by the district court, the fee for representa-

tion of the claimant before the agency is to be paid “out

of such past-due benefits.” /bid. In July 1987, the Secretary

determined reasonable attorney’s fees for Bartel’s services

at the administrative level would be $1,618.17. The Secretary

then released to Bartels the $989.67 withheld, representing

25% of Ziegenhorn’s past-due benefits. Pet. App. A36-A37.

6. In 1988, the Eighth Circuit held in Gowen v. Bowen,

855 F.2d 613 (1988), that, for the purpose of calculating

attorney’s fees under 42 U.S.C. 406, the term “past-due

benefits” includes “interim benefits.” In December 1988,

several months after Gowen was decided, and over a year

after the district court decision in Ziegenhorn became final

and nonappealable, Bartels filed a motion in the district

court to hold the Secretary in contempt for failure to com-

ply with the court’s April 1987 order awarding fees. Bartels

claimed that the Secretary had disobeyed the order by not

including “interim benefits” as part of “past-due benefits.”

4

The motion also stated that Ziegenhorn had refused to pay

the balance of the attorney’s fees owed.

7. Because its April 1987 order did not require the

Secretary to include interim: benefits as part of past-due

benefits, however, iiie court denied the contempt motion.

Nonetheless, the court ruled that Gowen should apply

retroactively and, on that basis, ordered the Secretary to

pay Bartels the administrative fee authorized by the

Secretary plus the balance remaining on the court-ordered

fee ($25.33), or 25% of Ziegenhorn’s past-due benefits as

defined by Gowen, whichever was less. Pet. App. A37-A38.

B. Facts Relating To Petitioner Pittman

8. The SSA terminated the disability benefits of Louie

V. Pittman and, after exhausting ~his administrative

remedies, Pittman filed suit in district court. Following

enactment of the 1984 Reform Act, his case was remanded

and, on remand, his disability benefits were restored. The

total benefit to the plaintiff from the final administrative

decision was $12,903.60, of which $8,040.20 had already

been paid as interim benefits, $4,187.00 constituted the un-

paid past-due benefits and $676.40 represented benefits paid

erroneously following the initial termination.

9. Under 42 U.S.C. 406(b)(1), the district court awarded

Pittman’s attorney, Bartels, a fee of $1,782.16 or 25% of

Pittman’s “past-due benefits,” whichever was less, for

representing Pittman at the district court level. The district

court expressly held, however, that “past-due benefits” did

not include “interim benefits” for the purpose of calculating

the fees to be paid to Bartels. Pet. App. A38.

10. In July 1987, the Secretary released $1,046.82 to

Bartels. This amount represented 25% of Pittman’s “past-

due benefits,” not including “interim benefits.” Bartels then

filed an appeal from the fee award, which the Eighth

Circuit consolidated with Gowen v. Bowen, supra. The

court of appeals ultimately held that, for purposes of Sec-

tion 406(b)(1), “past-due benefits” included “interim

benefits,” and it remanded Pittman for recalculation of the

fees due plaintiff's counsel. Pet. App. A38-A39.

11. On February 2, 1989, following the remand, SSA

authorized Pittman’s attorney to charge a fee of $1,254.16

under 42 U.S.C. 406(a) for representing Pittman at the ad-

ministrative level. The Secretary advised Bartels that, pur-

suant to the district court order, the agency had released

10 Pittman all amounts beyond the $1,046.82 already

transferred to Bartels and that Bartels would therefore have

to look to Pittman for the remainder of his fee. Pet. App.

A39.

12. Bartels responded by filing a motion in district court

to hold the Secretary in contempt for failing to withhold,

and pay to Bartels, 25% of the “interim benefits” as part

of the plaintiff's “past-due benefits.” He sought the addi-

tional $735.34 ($1,782.16 less $1,046.82) awarded by the

district court based on interim benefits. He also requested

that the Secretary be required to pay him the $1,254.16

awarded by the Secretary for counsel’s representation dur-

ing administrative proceedings. Bartels argued that Pittman

was unable and unwilling to pay these fees and that the

Secretary should be responsible for recouping this amount

from the plaintiff by withholding future amounts from the

plainutt’s benefits, as authorized by 42 U.S.C. 404(a)(1).

Pet. App. A39-A40.

13. The district court denied the contempt motion. The

court, however, ordered the Secretary to pay Bartels the

balance owing on the court-ordered fee ($72.34), as well

as the administrative fee authorized by the Secretary. The

court further ordered the Secretary to recoup these amounts

from Pittman’s future disability benefits. Pet. App.

A39-A40.

€. Proceedings On Appeal

14. On the consolidated appeal, the court of appeals

held that the district court properly had declined to hold

the Secretary in contempt in both Ziegenhorn and Pittman,

because the Secretary was never in violation of the district

court’s order. Pet. App. A40, A43. In Ziegenhorn,

moreover, the court of appeals held that Bartels’ attempt

to seek retroactive application of the Gowen decision

through a contempt proceeding constituted an impermissi-

ble collateral attack on the district court’s April 1987 order,

which had long since become final and non-appealable. Pet.

App. A40-A41.

15. Although Bartels’ request for relief in Pittman did

not constitute a collateral attack (since the case was on re-

mand (rom the first appeal), the court of appeals concluded

that the district court erred in ordering the Secretary to pay

Bartels the authorized administrative fee and in directing

the Secretary to recoup thet amount from Pittman, because

the Secretary’s author: » .o award administrative fees under

42 U.S.C. 406(a) is exclusive and unreviewable. Pet. App.

A43-A44. The court of appeals further held that the district

court lacked authority io order the Secretary to pay the

balance remaining on its fee award out of general social

security funds because of the government’s sovereign im-

munity. Pet. App. A4S.

16. The court of appeals further concluded in Pittman,

however, that the district court could direct the Secretary

to pursue recoupment of the erroneously paid-out interim

benefits for purposes of an award of fees for services at the

district court level under 42 U.S.C. 406(b)(1), except to the

extent the Secretary musi waive recoupment as against equi-

ts and good conscience under 42 U.S.C. 404(b). Pet. App.

A47-AS50.,

—~

ARGUMENT

1. The petition arising from the Ziegenhorn case should

be denied. Petitioner claims (Pet. 27-32) that an order that

had been final for more than a year could be collaterally

attacked and modified on Ziegenhorn’s application for con-

tempt. Petitioner Ziegenhorn sought to have the Secretary

held in contempi for failure to comply with the district

court’s April 1987 order awarding attorney’s fees. But, as

both the district court (Pet. App. C77-C78) and the court

of appeals (Pet. App. A40) held, the Secretary fully com-

plied with both the express terms and the intent of the April

1987 order. Accordingly, the district court properly denied

petitioner’s motion for contempt.

The illogic of petitioner’s position is apparent. Contempt

punishes disobedience of an existing order or rule (18 U.S.C.

401(3)). If the order had to be amended to reach the result

petitioner sought, it could not have been contemptuous to

oppose the amendment. Quite obviously, a district court

does not abuse its discretion in denying a motion for con-

tempt where the party against whom contempt is sought has

not violated a lawful writ, order, rule, decree or command

of the court. See McComb vy. Jacksonville Paper Co. , 336

U.S. 187, 191 (1949).

The court of appeals also correctly held (Pet. App.

A40-A41) that once the district court had denied Bartels’

motion for contempt it should not have gone on to award

him other reliet. As the court of appeals held, Bartels’ ef-

fort through the contempt proceeding to amend the final

judgment to obtain retroactive application of Gowen con-

stituted an impermissible collateral attack on the district

courts April 1987 order. As this Court has held, “a con-

lemnpt proceeding does not open to reconsideration the legal

or tactual basis of the order alleged to have been disobeyed.”

Local 28 of the Sheet Metal Workers’ Intl Assnv. EEOC,

478 U.S. 421, 441 n.21 (1986), quoting Maggio v. Zeitz,

333 U.S. 56, 69 (1948); United States v. Rylander, 460 U.S.

752, 756 (1983).

Moreover, contrary to petitioner’s suggestion «Pet. 28),

reopening the final judgment was not “the only relief

available to him.” As he had in both the Pittman and Gowen

cases, Bartels was free to file an appeal from the district

court’s April 1987 order in Ziegenhorn if he believed the

order denied him all the relief to which he was entitled.

Having failed to appeal the order, however, petitioner is

not entitled to another opportunity to challenge that order

by way of a motion for contempt. As the Third Circuit has

observed, “any other rule would set to nought the time limits

for seeking appellate review set forth in Fed. R. [App.] P.

4(a).” United States v. Millstone Enters., Inc., 864 F.2d 2).

23 (3d Cir. 1988). Cf. United States v. Ryan, 402 U.S. 530,

532 n.4 (1971) (the validity of an order may not be chal-

lenged in a contempt proceeding if the opportunity for ef-

fective review of the order was available at an earlier stage).

The authorities cited by petitioner for the proposition that a district

vourt has inherent authority to punish for contempt and, in appropriate

vircumstances, to fashion an equitable remedy (Pet. 27-31) do not sup-

port the proposition that a court may exercise its contempt power in

the absence of contemnible conduct, or use its equitable powers to

reopen final and unappealable judgments. Rather, they demonstrate

that a court may fashion an equitable remedy to correct a continuing

violation of an outstanding order or duty, even if the same conduct

were sanctionable by way of contempt. See Smith v. Bounds, 813 F.2d

1299, 1303 (4th Cir.), cert. denied, 488 U.S. 869 (1987) (the contempt

power Gt a court does not limit its discretion to fashion equitable

remedies for a continuing constitutional violation); Berger v. Heckler.

“71 b.2d 1886, 1869 (2d Cir. 1985) (a court may fashion an equitable

remeds 10 prevent continued non-compliance with a previous order even

absent a tinding of contempt); Alevander v. Hill, 707 F.2d 780. 783

(4th Cir.) cert. denied, 464 U.S. 874 (1983),

4)

2. The petition in Pittman should also be denied. In Pitt-

man, petitioner challenges (Pet. 10-27) that portion of the

court of appeals’ decision holding that the district court

lacked authority to order the Secretary to pay Bartels the

full amount of administrative fees authorized by the

Secretary.’ The court of appeals correctly held (Pet. App.

A43-A44) that, under 42 U.S.C. 406(a),* the Secretary has

exclusive authority to award attorney’s fees for services per-

formed at the administrative level and that such awards are

not subject to judicial review. See Copaken v. Secretary of

HEW, 590 F.2d 729, 731 (8th Cir. 1979) (per curiam). See

also Guido v. Schweiker, 775 F.2d 107, 109 (3d Cir. 1985);

Whitt. Califano, 601 F.2d 160, 161-162 (4th Cir. 1979).°

Phe petition does not seek review of the court of appeals’ conclu

sion (Pet. App. A44) that the district court aiso lacked authority 10

direct the Secretary to recoup past-due benetits released to the claimant

for payment of the administratise fee award. Instead, the petition con

tends that the court erred by not directing respondent to pay the ad-

nimistrative attorney fee, regardless of the availability of recoupment,

on the theory that the government must stand good for the tees released

‘due to its own alleged ‘error.’ Pet. 13.

+ The court of appeals mistakenly referred to Section 406(b)(1). 11

siead of 406(a). in its opinion. Pet. App. A43

Webbs. Richardson, 472 F.2d 529 (6th Cir. 1972), cited bs pet:

tioner (Pet 22, 24-25), is not to the contrary. Although the court o!

appeals in Webb held that the courts have authority to determine an

appropriate attorney's tee for services at both the administrative and

district court levels, it does not suggest that a tee award established

by the Secretary would be subject to judicial review. In any event, Webp

stands alone among the circuits in holding that the district court has

authority to award counsel fees for representation before the agency.

See Guido v. Schweiker, 775 F.2d 107, 108-109 (3d Cir. 1985) (the Social

Security Act does not grant either court or agency the authority to sot

fees in the other’s jurisdiction); Wait y. Califano, 601 F.2d 160 (4th

Cir. 1979) (courts have no statutory adthority to award couns’l fees

for representation before the azeficy); Gardner... Menende:, 373 F.2d

488 (Ist Cir. 1967) (same).

10

Whether the district court can review and enforce ihe

Secretary's award, however. is not at issue here. See note

3. supra. Rather, the question on this petition is whethe:

a district court can enforce an administrative tee award that

the Secretary has authorized to be paid from past-due

benefits under 42 U.S.C. 406(a) by ordering the Secretary

tO pay such a tee directly out of general social security *unds.

See Pet. 24. The answer, correctly provided by the court

of appeals, is that a court may noi.

Under 42 U.S.C. 406(a), the Secretary may fix a

reasonable tee to compensate an attorney for services per-

formed by the attorney at the administrative level. If as a

result of a favorable determination the claimant is entitled

to past-due benefits, the Secretary may certify an attorney’s

fee for payment “out of” the “past-due benefits” in an

amount up to 25% of the claimant’s past-due benefits. 42

U.S.C. 406(a). As the court of appeals held (Pet. App. A45),

42 U.S.C. 406(a) contemplates payment of an attorney’s fee

award by the claunant—either out of the claimant’s past-

due benetits or out of the claimant’s own funds—and not

by the government out Of general social security funds.

Section 406(a) cannot be construed to waive the govern-

Mmene’s wninunity tor attormes’s fees. Cornella y. Schweiker,

728 F.2d 978, 987 (Sth Cir. 1984) (42 U.S.C. 404 does not

allow a claimant “to recover tees against the government”).

Absent such a waiver, the United States is not liable for the

payment of a tee award out of general funds. See

Rucxelshaus \. Sierra Club, 463 U.S. 680, 685 (1983). For

ihis reason, petitioner simply is wrong in suggesting that

merely because the Secretary “has already set an ad-

miistrative award for the petitioner in this case * * * [a]

iederal court [may] order the actual payment of that award”

(Pet. 24). The decision below correctly applies Ruckleshaus

and is not in conflict with decisions of other circuits. Fur-

ther review os therefore not warranted.

1]

CONCLUSION

Ihe petition for a writ of certiorarn sho iid be denied.

Respecifully submitted

KENNETT W. STARK

Soli {a Generu

Sit \RT Mi. GER

issistun! Attorney Cecneral

Wii i TAME NR ANTER

Nic tisth Eo RObinsor

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