Flint Wood v. Sylvia Burwell, 2016 U.S. App. LEXIS 16801

Arizona operated a Medicaid demonstration project (covering low-income childless adults) that included increased copayments and allowed providers to refuse non-emergency services for inability to pay.
Plaintiffs (the Wood class) challenged the Secretary of DHHS’s 2011–2016 approval of the project, alleging the Secretary failed to consider plaintiffs’ evidence (Dr. Ku’s report) and thus acted arbitrarily and capriciously under the APA.
The district court granted summary judgment in part, found an APA procedural violation, and remanded to the Secretary for reconsideration but declined to vacate the project, retaining jurisdiction to avoid disrupting beneficiary coverage.
On remand the Secretary reapproved the project; the district court then granted summary judgment for the Secretary on the merits and denied Wood’s EAJA fee request, ruling the plaintiffs were not "prevailing parties."
The Ninth Circuit reversed, holding that the February 6, 2013 remand order constituted a judicially-sanctioned, material alteration in the parties’ legal relationship and therefore conferred prevailing-party status under the EAJA.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Wood are "prevailing parties" under EAJA after a remand for procedural APA defects	Wood: remand order finding APA violation and requiring agency reconsideration is judicially sanctioned relief that materially altered legal relations → qualifies as prevailing party	Gov: plaintiffs only obtained procedural/interim relief; later loss on the merits and remand without vacatur mean they did not prevail	Held: Remand for agency reconsideration based on an APA procedural violation is a judicially-sanctioned material alteration → Wood are prevailing parties
Whether remand without vacatur or district-court retention of jurisdiction negates prevailing-party status	Wood: equitable remand without vacatur was to avoid disrupting benefits and does not negate the procedural victory	Gov: retention of jurisdiction and continuation of the project makes the proper benchmark the post-remand merits ruling for defendant	Held: Retention of jurisdiction to avoid disruption does not undermine prevailing-party status; remand based on agency error is analogous to a sentence-four style remand and suffices for EAJA purposes

Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Human Res., 532 U.S. 598 (2001) (establishes "prevailing party" requires judicially sanctioned material alteration in legal relationship)
Sole v. Wyner, 551 U.S. 74 (2007) (transient/interim victories undone on final judgment do not make a prevailing party)
CRST Van Expedited, Inc. v. EEOC, 136 S. Ct. 1642 (2016) (reiterates Buckhannon framework for prevailing-party analysis)
Newton–Nations v. Betlach, 660 F.3d 370 (9th Cir. 2011) (Ninth Circuit finding Secretary’s approval invalid for failing to consider required §1315 factors)
Idaho Farm Bureau Fed’n v. Babbitt, 58 F.3d 1392 (9th Cir. 1995) (agency action can be left in place during remand when equity demands)
Tobeler v. Colvin, 749 F.3d 830 (9th Cir. 2014) (remand to correct an agency’s failure to consider evidence can confer prevailing-party status)