SSR 94-3c: SECTIONS 205(g) AND 223 OF THE SOCIAL SECURITY ACT (42 U.S.C. 405(g) AND 423) TIMELY FILING FOR ATTORNEY'S FEES UNDER THE EQUAL ACCESS TO JUSTICE ACT

SSR 94-3c

EFFECTIVE/PUBLICATION DATE: 01/28/94

Shalala v. Schaefer , _____ U.S. _____, 113 S.Ct. 2625 (1993)

SCALIA, Supreme Court Justice:

This case concerns the proper timing of an application for attorney's

fees under the Equal Access to Justice Act (EAJA) in a Social Security

case. Under 42 U.S.C. § 405(g), a claimant has the right to seek judicial

review of a final decision of the Secretary of Health and Human Services

denying Social Security benefits. One possible outcome of such a suit is

that the district court, pursuant to sentence four of § 405(g), will enter

"a judgment ... reversing the decision of the Secretary ... [and]

remanding the cause for a rehearing." The issue here is whether the 30-day

period for filing an application for EAJA fees begins immediately upon

expiration of the time for appeal of such a "sentence-four remand order,"

or sometime after the administrative proceedings on remand are

complete.

I

In 1986, respondent Richard Schaefer filed an application for disability

benefits under Title II of the Social Security Act, 49 Stat. 622, as

amended, 42 U.S.C. § 401 et seq . (1988 ed. and Supp. III). He was

denied benefits at the administrative level, and sought judicial review by

filing suit against the Secretary as authorized by § 405(g). Schaefer and

the Secretary filed cross-motions for summary judgment. On April 4, 1989,

the District Court held that the Secretary had committed three errors in

ruling on Schaefer's case and entered an order stating that "the

Secretary's decision denying disability insurance benefits to [Schaefer]

is reversed, that the parties' cross-motions for summary judgment are

denied, and that the case is remanded to the Secretary for further

consideration in light of this Order." App. to Pet. for Cert. 27a.

that the Secretary had committed three errors in

ruling on Schaefer's case and entered an order stating that "the

Secretary's decision denying disability insurance benefits to [Schaefer]

is reversed, that the parties' cross-motions for summary judgment are

denied, and that the case is remanded to the Secretary for further

consideration in light of this Order." App. to Pet. for Cert. 27a.

In accordance with this order, Schaefer's application for benefits was

reconsidered at the administrative level, and was granted. On July 18,

1990, Schaefer returned to the District Court and filed an application for

attorney's fees pursuant to EAJA. In response, the Secretary noted that

Schaefer was required to file any application for EAJA fees "within thirty

days of final judgment in the action," 28 U.S.C. § 2412(d)(1)(B), and

argued that the relevant "final judgment" in the case was the

administrative decision on remand, which had become final on April 2,

1990. The District Court stayed action on Schaefer's EAJA application

pending this Court's imminent ruling in Melkonyan v. Sullivan , 501

U.S. ____, 111 S.Ct. 2157, 115 L.Ed.2d 78 (1991).

Melkonyan was announced shortly thereafter, holding that a final

administrative decision could not constitute a "final judgment" for

purposes of § 2412(d)(1)(B). Id ., at ____, 111 S.Ct., at 2162. In

light of Melkonyan , the Secretary changed positions to argue that

EAJA's 30-day clock began running when the District Court's April 4, 1989

order (not the administrative ruling on remand) became final, which would

have occurred at the end of the 60 days for appeal provided under Federal

Rule of Appellate Procedure 4(a). Thus, the Secretary concluded,

Schaefer's time to file his EAJA application expired on July 3, 1989, over

a year before the application was filed. The District Court, however,

found Schaefer's EAJA application timely under the controlling circuit

precedent of Welter v

which would

have occurred at the end of the 60 days for appeal provided under Federal

Rule of Appellate Procedure 4(a). Thus, the Secretary concluded,

Schaefer's time to file his EAJA application expired on July 3, 1989, over

a year before the application was filed. The District Court, however,

found Schaefer's EAJA application timely under the controlling circuit

precedent of Welter v. Sullivan , 941 F.2d 674 (CA8 1991), which

held that a sentence-four remand order is not a final judgment where "the

district court retain[s] jurisdiction ... and plan[s] to enter dispositive

sentence four judgmen[t]" after the administrative proceedings on remand

are complete. Id ., at 675. The District Court went on to rule that

Schaefer was entitled to $1,372.50 in attorney's fees.

The Secretary fared no better on appeal. The Eighth Circuit declined the

Secretary's suggestion for en banc reconsideration of Welter , and

affirmed the District Court in an unpublished per curiam opinion. The Secretary filed a petition for certiorari, urging us to

reverse the Court of Appeals summarily. We granted certiorari, 506 U.S.

____, 113 S.Ct. 594, 121 L.Ed.2d 532 (1992), and set the case for oral

argument.

II

The first sentence of 28 U.S.C. § 2412(d)(1)(B) provides:

In Melkonyan v. Sullivan , we held that the term "final judgment" in

the highlighted phrase above "refers to judgments entered by a court of law , and does not encompass decisions rendered by an

administrative agency." See 501 U.S., at ____, 111 S.Ct., at 2162. Thus,

the only order in this case that could have resulted in the starting of

EAJA's 30-day clock was the District Court's April 4, 1989 order, which

reversed the Secretary's decision denying disability benefits and remanded

the case to the Secretary for further proceedings.

and does not encompass decisions rendered by an

administrative agency." See 501 U.S., at ____, 111 S.Ct., at 2162. Thus,

the only order in this case that could have resulted in the starting of

EAJA's 30-day clock was the District Court's April 4, 1989 order, which

reversed the Secretary's decision denying disability benefits and remanded

the case to the Secretary for further proceedings.

In cases reviewing final agency decisions on Social Security benefits,

the exclusive methods by which district courts may remand to the Secretary

are set forth in sentence four and sentence six of § 405(g), which are set

forth in the margin. [1] See Melkonyan, supra , at ____-____, 111 S.Ct., at 2163-2164. Schaefer

correctly concedes that the District Court's remand order in this case was

entered pursuant to sentence

four. [2] He argues, however,

that a district court proceeding under that provision need not enter a

judgment at the time of remand, but may postpone it and retain

jurisdiction pending completion of the administrative proceedings. That

argument, however, is inconsistent with the plain language of sentence

four, which authorizes a district court to enter a judgment "with or

without" a remand order, not a remand order "with or without" a judgment.

See Sullivan v. Finkelstein , 496 U.S. 617, 629, 110 S. Ct. 2658,

2666, 110 L.Ed.2d 563 (1990). Immediate entry of judgment (as opposed to

entry of judgment after postremand agency proceedings have been completed

and their results filed with the court) is in fact the principal feature

that distinguishes a sentence-four remand from a sentence-six remand. See Melkonyan , 501 U.S. at ____-____, 111 S.Ct., at 2164-2165.

, 496 U.S. 617, 629, 110 S. Ct. 2658,

2666, 110 L.Ed.2d 563 (1990). Immediate entry of judgment (as opposed to

entry of judgment after postremand agency proceedings have been completed

and their results filed with the court) is in fact the principal feature

that distinguishes a sentence-four remand from a sentence-six remand. See Melkonyan , 501 U.S. at ____-____, 111 S.Ct., at 2164-2165.

Nor is it possible to argue that the judgment authorized by sentence

four, if it includes a remand, does not become a "final judgment" -- as

required by § 2412(d) -- upon expiration of the time for appeal. If that

were true, there would never be any final judgment in cases reversed and

remanded for further agency proceedings (including those which suffer that

fate after the Secretary has filed the results of a sentence-six remand).

Sentence eight of § 405(g) states that "[t]he judgment of the court" --

which must be a reference to a sentence-four judgment, since that is the only judgment authorized by § 405(g) -- "shall be final except that

it shall be subject to review in the same manner as a judgment in other

civil actions." Thus, when the time for seeking appellate review has run,

the sentence-four judgment fits squarely within the term "final judgment"

as used in § 2412(d), which is defined to mean "a judgment that is final

and not appealable." 28 U.S.C. § 2412(d)(2)(G). We described the law with

complete accuracy in Melkonyan , when we said:

review in the same manner as a judgment in other

civil actions." Thus, when the time for seeking appellate review has run,

the sentence-four judgment fits squarely within the term "final judgment"

as used in § 2412(d), which is defined to mean "a judgment that is final

and not appealable." 28 U.S.C. § 2412(d)(2)(G). We described the law with

complete accuracy in Melkonyan , when we said:

Schaefer raises two arguments that merit further discussion. The first is

based on our decision in Sullivan v. Hudson , 490 U.S. 877, 892, 109

S.Ct. 2248, 2257, 104 L.Ed.2d 941 (1989), which held that fees incurred

during administrative proceedings held pursuant to a district court's

remand order could be recovered under EAJA. In order "to effectuate Hudson ," Schaefer contends, a district court entering a

sentence-four remand order may properly hold its judgment in abeyance (and

thereby delay the start of EAJA's 30-day clock) until postremand

administrative proceedings are complete; otherwise, as far as fees

incurred during the yet-to-be-held administrative proceedings are

concerned, the claimant would be unable to comply with the requirement of

§ 2412(d)(1)(B) that the fee application include "the amount sought" and

"an itemized statement ... [of] the actual time expended" by attorneys and

experts. In response, the Secretary argues that Hudson applies only

to cases remanded pursuant to sentence six of § 405(g), where there is no

final judgment and the clock does not begin to run. The difficulty with

that, Schaefer contends, is that Hudson itself clearly involved a

sentence-four remand.

sought" and

"an itemized statement ... [of] the actual time expended" by attorneys and

experts. In response, the Secretary argues that Hudson applies only

to cases remanded pursuant to sentence six of § 405(g), where there is no

final judgment and the clock does not begin to run. The difficulty with

that, Schaefer contends, is that Hudson itself clearly involved a

sentence-four remand.

On the last point, Schaefer is right. Given the facts recited by the

Court in Hudson , the remand order there could have been authorized

only under sentence four. See 490 U.S., at 880-881, 109 S.Ct., at 2252;

cf. n. 2, supra . However, the facts in Hudson also show that

the District Court had not terminated the case, but had retained

jurisdiction during the remand. And that was a central element in our

decision, as the penultimate sentence of the opinion shows:

We have since made clear, in Finkelstein , that that retention of

jurisdiction, that failure to terminate the case, was error: Under §

405(g), "each final decision of the Secretary [is] reviewable by a separate piece of litigation," and a sentence-four remand order

"terminate[s] the civil action" seeking judicial review of the Secretary's

final decision. 496 U.S., at 624-625, 110 S.Ct., at 2663 (emphases added).

What we adjudicated in Hudson , in other words, was a hybrid: a

sentence-four remand that the District Court had improperly (but without

objection) treated like a sentence-six

remand. [3] We specifically noted

in Melkonyan that Hudson was limited to a "narrow class of

qualifying administrative proceedings" where "the district court retains

jurisdiction of the civil action" pending the completion of the

administrative proceedings. 501 U.S., at ____, 111 S.Ct., at 2162. We

therefore do not consider the holding of Hudson binding as to

sentence-four remands that are ordered (as they should be) without

retention of jurisdiction, or that are ordered with retention of

jurisdiction that is

challenged. [4]

istrict court retains

jurisdiction of the civil action" pending the completion of the

administrative proceedings. 501 U.S., at ____, 111 S.Ct., at 2162. We

therefore do not consider the holding of Hudson binding as to

sentence-four remands that are ordered (as they should be) without

retention of jurisdiction, or that are ordered with retention of

jurisdiction that is

challenged. [4]

Schaefer's second argument is that a sentence-four remand order cannot be

considered a "final judgment" for purposes of § 2412(d)(1)(B) because that

provision requires the party seeking fees to submit an application

"show[ing] that [he] is a prevailing party." That showing, Schaefer

contends, cannot be made until the proceedings on remand are complete,

since a Social Security claimant does not "prevail" until he is awarded

Social Security benefits. The premise of this argument is wrong. No

holding of this Court has ever denied prevailing-party status (under §

2412(d)(1)(B)) to a plaintiff who won a remand order pursuant to sentence

four of § 405(g). Dicta in Hudson stated that "a Social Security

claimant would not, as a general matter, be a prevailing party within the

meaning of the EAJA merely because a court had remanded the action to the

agency for further proceedings." 490 U.S., at 887, 109 S.Ct., at 2255. But

that statement (like the holding of the case) simply failed to recognize

the distinction between a sentence-four remand, which terminates the

litigation with victory for the plaintiff, and a sentence-six remand,

which does not. The sharp distinction between the two types of remand had

not been made in the lower-court opinions in Hudson , see Hudson

v. Secretary of Health and Human Services , 839 F.2d 1453 (CA11 1988);

App. to Pet. for Cert. in Sullivan v. Hudson , O.T.1988, No. 616,

pp

tence-four remand, which terminates the

litigation with victory for the plaintiff, and a sentence-six remand,

which does not. The sharp distinction between the two types of remand had

not been made in the lower-court opinions in Hudson , see Hudson

v. Secretary of Health and Human Services , 839 F.2d 1453 (CA11 1988);

App. to Pet. for Cert. in Sullivan v. Hudson , O.T.1988, No. 616,

pp. 17a-20a (setting forth unpublished District Court opinion), was not

included in the question presented for

decision, [5] and was mentioned

for the first time in the closing pages of the Secretary's reply brief,

see Reply Brief for Petitioner in Sullivan v. Hudson , O.T.1988, No.

616, pp. 14-17. It is only decisions after Hudson -- specifically Finkelstein and Melkonyan -- which establish that the

sentence-four, sentence-six distinction is crucial to the structure of

judicial review established under § 405(g). See Finkelstein , 496

U.S., at 626, 110 S.Ct., at 2664; Melkonyan , 501 U.S., at

____-____, 111 S.Ct., at 2162-2163.

Hudson's dicta that remand does not generally confer

prevailing-party status relied on three cases, none of which supports that

proposition as applied to sentence-four remands. Hanrahan v.

Hampton , 446 U.S. 754, 758-759, 100 S.Ct. 1987, 1990, 64 L.Ed.2d 670

(1980), rejected an assertion of prevailing-party status, not by virtue of

having secured a remand, but by virtue of having obtained a favorable

procedural ruling (the reversal on appeal of a directed verdict) during

the course of the judicial proceedings. Hewitt v. Helms , 482 U.S.

755, 107 S.Ct. 2672, 96 L.Ed.2d 654 (1987), held that a plaintiff does not

become a prevailing party merely by obtaining "a favorable judicial

statement of law in the course of litigation that results in judgment

against the plaintiff ," id ., at 763, 107 S.Ct., at 2677

(emphasis added). (A sentence-four remand, of course, is a judgment for the plaintiff.) And the third case cited in Hudson, Texas

Teachers Assn. v

d.2d 654 (1987), held that a plaintiff does not

become a prevailing party merely by obtaining "a favorable judicial

statement of law in the course of litigation that results in judgment

against the plaintiff ," id ., at 763, 107 S.Ct., at 2677

(emphasis added). (A sentence-four remand, of course, is a judgment for the plaintiff.) And the third case cited in Hudson, Texas

Teachers Assn. v. Garland Independent School Dist ., 489 U.S. 782, 109

S.Ct. 1486, 103 L.Ed.2d 866 (1989), affirmatively supports the proposition

that a party who wins a sentence-four remand order is a prevailing party. Garland held that status to have been obtained "[i]f the plaintiff

has succeeded on any significant issue in litigation which achieve[d] some

of the benefit ... sought in bringing suit." I d ., at

791-792, 109 S.Ct., at 1493 (citation and internal quotation marks

omitted). Obtaining a sentence-four judgment reversing the Secretary's

denial of benefits certainly meets this description. See also Farrar v.

Hobby , 506 U.S. ____, 113 S.Ct. 566, 121 L.Ed.2d 494 (1992).

III

Finally, Schaefer argues that, even if the District Court should

have entered judgment in connection with its April 4, 1989 order

remanding the case to the Secretary, the fact remains that it did not. And

since no judgment was entered, he contends, the 30-day time period for

filing an application for EAJA fees cannot have run. We agree.

S. ____, 113 S.Ct. 566, 121 L.Ed.2d 494 (1992).

III

Finally, Schaefer argues that, even if the District Court should

have entered judgment in connection with its April 4, 1989 order

remanding the case to the Secretary, the fact remains that it did not. And

since no judgment was entered, he contends, the 30-day time period for

filing an application for EAJA fees cannot have run. We agree.

An EAJA application may be filed until 30 days after a judgment becomes

"not appealable" -- i.e ., 30 days after the time for appeal has

ended. See §§ 2412(d)(1)(B), (d)(2)(G); see also Melkonyan , 501

U.S., at ____, 111 S.Ct., at 2165. Rule 4(a) of the Federal Rules of

Appellate Procedure establishes that, in a civil case to which a federal

officer is a party, the time for appeal does not end until 60 days after

"entry of judgment," and that a judgment is considered entered for

purposes of the rule only if it has been "entered in compliance with

Rul[e] 58 ... of the Federal Rules of Civil Procedure." Fed. R. App. Proc.

4(a)(1), (7). Rule 58, in turn, requires a district court to set forth

every judgment "on a separate document" and provides that "[a] judgment is

effective only when so set forth." See United States v. Indrelunas ,

411 U.S. 216, 220, 93 S.Ct. 1562, 1564, 36 L.Ed.2d 202 (1973) (per

curiam) .

Since the District Court's April 4 remand order was a final judgment, see ante , at 2630, a "separate document" of judgment should have been

entered. It is clear from the record that this was not done. The Secretary

does not dispute that, but argues that a formal "separate document" of

judgment is not needed for an order of a district court to become appealable. That is quite true, see 28 U.S.C. § 1291; Bankers Trust Co.

v. Mallis , 435 U.S. 381, 98 S.Ct. 1117, 55 L.Ed.2d 357 (1978) (per

curiam); Finkelstein, supra , 496 U.S., at 628, n. 7, 110 S.Ct., at

2665, n. 7, but also quite irrelevant

cretary

does not dispute that, but argues that a formal "separate document" of

judgment is not needed for an order of a district court to become appealable. That is quite true, see 28 U.S.C. § 1291; Bankers Trust Co.

v. Mallis , 435 U.S. 381, 98 S.Ct. 1117, 55 L.Ed.2d 357 (1978) (per

curiam); Finkelstein, supra , 496 U.S., at 628, n. 7, 110 S.Ct., at

2665, n. 7, but also quite irrelevant. EAJA's 30-day time limit runs from

the end of the period for appeal, not the beginning . Absent

a formal judgment, the District Court's April 4 order remained

"appealable" at the time that Schaefer filed his application for EAJA

fees, and thus the application was timely under §

2412(d)(1). [6]

* * *

For the foregoing reasons, the judgment of the Court of Appeals is

Affirmed .

Justice Scalia delivered the opinion of the Court, in which Chief Justice

Rehnquist, and Justices White, O'Connor, Kennedy, Souter, and Thomas

joined. Justice Stevens filed an opinion concurring in the judgment, in

which Justice Blackmun joined.

[1] Sentences four and six of §

405(g) provide:

"[4] The [district] court shall have power to enter, upon the pleadings

and transcript of the record, a judgment affirming, modifying, or

reversing the decision of the Secretary, with or without remanding the

cause for a rehearing.... [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 additional evidence to be taken before the Secretary, but only upon

a showing that there is new evidence which is material and that there is

good cause for the failure to incorporate such evidence into the record in

a prior proceeding; and the Secretary shall, after the case is remanded,

and after hearing such additional evidence if so ordered, modify or affirm

his findings of fact or his decision, or both, and shall file with the

court any such additional and modified findings of fact

nce 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 additional evidence if so ordered, modify or affirm

his findings of fact or his decision, or both, and shall file with the

court any such additional and modified findings of fact and decision, and

a transcript of the additional record and testimony upon which his action

in modifying or affirming was based."

[2] Sentence-six remands may be

ordered in only two situations: where the Secretary requests a remand

before answering the complaint, or where new, material evidence is adduced

that was for good cause not presented before the agency. See § 405(g)

(sentence six); Melkonyan v. Sullivan , 501 U.S. ____, ____, and n.

2, 111 S.Ct. 2157, 2163-2164, and n. 2, (1991); cf. Sullivan v.

Finkelstein , 496 U.S. 617, 626, 110 S.Ct. 2658, 2664, 110 L.Ed.2d 563

(1990). The District Court's April 4, 1989 remand order clearly does not

fit within either situation.

[3] The Secretary not only

failed to object to the District Court's retention of jurisdiction, but

affirmatively endorsed the practice as a means of accommodating the lower

court cases holding that a § 405(g) plaintiff does not become a prevailing

party until Social Security benefits are actually awarded. Reply Brief for

Petitioner in Sullivan v. Hudson , O.T. 1988, No. 616, pp. 12-13.

Those precedents were highly favorable to the Government, of course,

because they relieved the Secretary of liability for EAJA fees in all

cases where Social Security benefits were ultimately denied. But they were

also at war with the view -- expressed later in the Secretary's Hudson reply brief -- that a sentence-four remand order is a "final

judgment" in the civil action. Id ., at 16

.

Those precedents were highly favorable to the Government, of course,

because they relieved the Secretary of liability for EAJA fees in all

cases where Social Security benefits were ultimately denied. But they were

also at war with the view -- expressed later in the Secretary's Hudson reply brief -- that a sentence-four remand order is a "final

judgment" in the civil action. Id ., at 16. Essentially, the

Secretary in Hudson wanted it both ways: He wanted us to regard

retention of jurisdiction as proper for purposes of determining

prevailing-party status, but as improper for purposes of awarding fees on

remand.

[4] Justice STEVENS says that

our holding "overrul[es]" Sullivan v. Hudson , 490 U.S. 877, 109

S.Ct. 2248, 104 L.Ed.2d 941, (1989). Post , at 2633, 2636. We do not

think that is an accurate characterization. Hudson remains good law

as applied to remands ordered pursuant to sentence six. And since the

distinction between sentence-four and sentence-six remands was neither

properly presented nor considered in Hudson, see supra , at 2630 and

n. 3, and infra , at 2631, limiting Hudson to sentence-six

cases does not "overrule" the decision even in part. See Brecht v.

Abrahamson , 507 U.S. ____, ____, 113 S.Ct. 1710, 1718, 123 L.Ed.2d 353

(1993). We agree with Justice STEVENS that until today there has been some

contradiction in our case law on this subject. In resolving it, however,

we have not simply chosen Melkonyan's dicta over Hudson , but

have grounded our decision in the text and structure of the relevant

statutes, particularly § 405.

[5] As formulated in the

Secretary's petition, the question on which the Court granted certiorari

in Hudson was: "Whether Social Security administrative proceedings

conducted after a remand from the courts are 'adversary adjudications' for

which attorney fees are available under the [EAJA]." Pet. for Cert. in Sullivan v. Hudson , O.T.1988, No. 616, p. I.

nt

statutes, particularly § 405.

[5] As formulated in the

Secretary's petition, the question on which the Court granted certiorari

in Hudson was: "Whether Social Security administrative proceedings

conducted after a remand from the courts are 'adversary adjudications' for

which attorney fees are available under the [EAJA]." Pet. for Cert. in Sullivan v. Hudson , O.T.1988, No. 616, p. I.

[6] We disagree with Justice

STEVENS' assertion that "the respondent has prevailed precisely because the District Court in this case did enter a remand order

without entering a judgment." Post , at 2633, n. 2 (emphasis in

original). By entering a sentence-four remand order, the District Court

did enter a judgment ; it just failed to comply with the formalities

of Rule 58 in doing so. That was error but, as detailed in the text, the

relevant rules and statutes impose the burden of that error on the party

seeking to assert an untimeliness defense, here the Secretary. Thus,

contrary to Justice STEVENS' suggestion, see post , at 2633, n. 2,

our ruling in favor of respondent is not at all inconsistent with the

proposition that sentence four and sentence six provide the exclusive

methods by which district courts may remand a § 405 case to the

Secretary.