Lead Opinion
The Secretary of Health and Human Services (Secretary) asseverates that a fee award entered in the United States District Court for the District of Rhode Island pursuant to the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d), was improvident. We are persuaded that the Secretary is correct and therefore reverse.
I
Plaintiff-appellee Frances Guglietti received Social Security disability benefits from and after April 1978. The Secretary subsequently concluded that appellee was no longer disabled and, in October 1980, stopped paying her. Guglietti invoked her right of review under the Social Security Act. In succession, a departmental administrative law judge (AU), the Secretary’s Appeals Council, and the United States District Court for the District of Rhode Island (Boyle, Chief Judge), acting under 42 U.S.C. § 405(g), upheld the Secretary’s determination.
While Guglietti’s appeal was pending, Congress enacted the Social Security Disability Benefits Reform Act of 1984 (Reform Act), Pub.L. 98-460, 98 Stat. 1794 (1984). Section 2(d)(2)(C) thereof required that all cases undergoing judicial review as at September 19, 1984, in which the Secretary had terminated benefits, be returned to the Secretary for reevaluation and reconsideration in accordance with new “medical improvement” standards set forth in the Reform Act. Id.,
Following a reevaluation of plaintiff’s condition at the administrative level, the Secretary applied the neoteric standards, ruled that the requisite “medical improvement” was not evident, and reinstated benefits. Plaintiff thereupon returned to district court and filed a timely motion for counsel fees under EAJA. A different district judge heard and allowed the application. This appeal ensued.
II
The EAJA, with exceptions not here relevant, provides in material part that:
[A] court shall award to a prevailing party other than the United States fees and other expenses, ... incurred by that party in any civil action (other than cases sounding in tort), including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.
28 U.S.C. § 2412(d)(1)(A). To be entitled to an award of fees, a litigant must fulfill several conditions. First and foremost, she must be a “prevailing party” within the statute’s contemplation. In that connection, EAJA’s reference to prevailing party status must be read consistently with the phrase’s usage in other federal fee-shifting statutes. See McDonald v. Secretary of HHS,
In focusing the lens of inquiry, we look to isolate some “material alteration of
A. Proceedings Below.
In this instance, the district court ruled that plaintiff satisfied the prevailing party prong of the EAJA test. Ordinarily, we would view that determination through a deferential glass. See McDonald,
When first filed, the EAJA application in question was referred to the magistrate. He treated the matter of plaintiff’s status summarily, stating only: “It does appear as though plaintiff prevailed since her benefits were reinstated upon reexamination of her position.” The magistrate cited no cases and offered no further explication. The Secretary objected to the magistrate’s report on several grounds, the first of which asserted that plaintiff was “not a 'prevailing party’ within the meaning of EAJA.” The Secretary’s supporting memorandum amplified that thesis at some length.
Notwithstanding, the district court took the issue as conceded.
Having exposed the error and sidetracked the occasion for deference, we could, of course, remand for further consideration below. But, neither side has urged us to follow that course; in this instance, the subsidiary “prevailment” facts are not legitimately in dispute, making the prevailing party question largely one of law; and the district judge, who had not heard the underlying disability-termination case, enjoys no special familiarity with the matter’s provenance. Under these rather uncommon circumstances, we believe the issue is better decided here and now. Cf., e.g., M.O.N.T. Boat Rental Service, Inc. v. Union Oil Co.,
B. Litigatory Success.
In the more typical case, prevailing party status is conferred because a party has succeeded on a “significant issue in litigation which achieves some of the benefit ... sought in bringing suit.” Nadeau v. Helgemoe,
Moreover, the post-remand benefits which Guglietti ultimately received did not result from a by-the-numbers review of the issues raised in her complaint. Rather, reinstatement of benefits came about because of changes in the legal landscape and, perhaps, in the albedo of updated, newly received medical information about plaintiffs condition.
Plaintiff ruminates that, had she not brought her original complaint and thereafter appealed from the district court’s af-firmance of the Secretary’s decision, she would not have been in a position to take advantage of the Reform Act. That is so, see Reform Act, § 2(d)(2)(C),
C. Catalyst Theory.
The second path to prevailing party status involves what has come to be known as the “catalyst” test. See Exeter-West Greenwich,
To be regarded as a catalyst, a suit need not be the sole cause of the fee-target’s actions, but it must be a competent producing cause of those actions in at least some measurable, significant degree:
[N]o award is required if the court determines that plaintiff’s suit was completely superfluous in achieving the improvements undertaken by defendants on plaintiff’s behalf. ... [T]he plaintiff’s suit ... [must be] a necessary and important factor in achieving the improvements ....
Id.; see also Coalition for Basic Needs,
In Truax, a case squarely in point, the Eighth Circuit found the requisite causal connection lacking:
[E]ven granting that Congress’ enactment of the Reform Act was partly a result of the thousands of suits filed by terminated claimants against the Secretary, we believe that the causal link between Truax’s individual lawsuit and Congress’s action is too tenuous to satisfy the catalyst test.
Id. at 997 (citation omitted); see also Goodro v. Bowen,
The nexus between Congress’ action and [the social security claimant’s] suit is too attenuated to conclude that the latter played a “provocative role” in causing the former. The Secretary did not reinstate [claimant’s] benefits because the Secretary wanted to compromise a dispute or because he became convinced that his prior position was unprincipled. Rather, the Secretary reinstated [claimant’s] benefits because Congress mandated reconsideration of all such currently pending claims under a newly enacted standard. Admittedly, as the court noted in Truax, [such] claimants ... would not have been entitled to disability benefits if they had not pursued fully their legal remedies. But only in a hypertech-nical sense does this make [claimant’s] lawsuit the “cause” of his victory. The proximate cause of his victory was the congressional enactment of a standard under which he was entitled to relief. We simply do not believe that Congress envisioned the “prevailing party” lan*402 guage in the EAJA to be so broad as to encompass the instant circumstance.
Hendricks,
It is on this ground that our dissenting brother, with a stirring analogy to soldiers storming an enemy’s hill, takes his stand. Post at p. 406. And a few other cases have marched to the same drummer. See, e.g., Robinson v. Bowen,
We make one additional point. The EAJA environment is simply not the place to attempt to broaden prevailing party jurisprudence. The test of prevailing party status is itself “a generous formulation.” Hensley,
D. Another Approach.
There is yet another avenue which plaintiff urges us to explore. The alternative contemplates a case-specific method whereby the district court must review each disability-termination suit to see if, in its judgment, the claimant “was going to win anyway,” Hendricks,
The essential fallacy which underlies the case-specific approach is that it confuses EAJA’s two prongs. EAJA requires both that the private litigant prevail and that the government’s position lack substantial justification. See 28 U.S.C. § 2412(d)(1)(A), quoted supra at p. 398. Divining hypothetical error is in our estimation more properly to be considered on the “substantial justification” furculum of the standard. Using it to overcome the prevailing party hurdle double counts and also blurs the distinction between the two prongs in a way which frustrates Congress’ careful draftsmanship. Cf. Brown,
We acknowledge that, from a purely equitable standpoint, plaintiffs suggested alternative has some obvious appeal. But, hard cases make bad law. The Court has repeatedly warned against permitting fee disputes to “spawn a second litigation of significant dimension.” Texas Teachers,
Ill
We need go no further.
Reversed.
Notes
. In its bench decision, the district court’s only direct reference to the point was the following statement: "In order to recover counsel fees, Plaintiff must demonstrate first that she prevailed and not even defendant disputes that.” Although the record does not contain a transcript of the arguments below, appellee has not claimed that the Secretary waived the prevailment defense before the district court.
. Initially, Judge Boyle referred the matter to a magistrate who suggested that the Secretary's decision be set aside. The court thereafter considered the question de novo, see 28 U.S.C. § 636(b)(1)(B); Fed.R.Civ.P. 72(b), rejected the magistrate’s recommendation, and ruled in the Secretary's favor.
. Nadeau was a class action suit brought under 42 U.S.C. § 1983. Hence, its tenor emphasizes the plaintiff's burden. In an EAJA case, a successful defendant can as easily become a prevailing party. See 28 U.S.C. § 2412(d)(1)(A) (authorizing award of fees in "any civil action ... brought by or against the United States”) (emphasis supplied).
. Our remand order was entered on April 3, 1985. The record is absolutely silent as to what transpired from that time until the Secretary notified Guglietti that her "payments should have continued.” That notice, which we have annexed as an appendix, was sent over two years later. It says that the Secretary's decision to continue paying was “based on information we have now " (emphasis supplied), perhaps implying that more recent medical reports were considered. But, there is no way we can tell on the record as presented by the parties.
. In McDonald, a class action suit challenging the Secretary’s severity test, plaintiffs had won a court-ordered remand. The Secretary subsequently changed the applicable administrative standard. We affirmed a finding that plaintiffs were prevailing parties, distinguishing Truax because, in McDonald, "the remand resulted not from a change in the law [as in Truax], but from the courts’ concern that HHS had applied the severity test improperly.”
. We note, too, that under the catalyst theory a claimant's showing of causal relationship between suit and relief "is only half of [the] bat-tie.” Nadeau,
. We neither reach, nor take any view of, questions such as whether (1) the government’s original decision to terminate Guglietti’s benefits was "substantially justified,” or (2) "special circumstances" exist which would make a fee award "unjust.” See 28 U.S.C. § 2412(d)(1)(A).
Dissenting Opinion
(dissenting).
In 1978 the government began to pay the claimant social security disability benefits. In 1980 it terminated the benefits on the ground that the evidence showed she was not disabled. She sought judicial review, claiming that the termination was unlawful in the absence of a “medical improvement.” See Miranda v. Secretary of Health, Education & Welfare,
My basic disagreement with the court concerns the statutory words “prevailing party.” The majority believes this is a case in which one cannot say the plaintiff “prevailed,” but rather, at most, one might say she “would have prevailed” had she continued to press her legal action. That is to say, it may be a case in which this court would have remanded to the Social Security Administration for redetermination had the court decided the matter, but this court, in fact, did not decide the matter. It did not do so because an intervening outside act— indeed, an act of Congress itself — produced a remand (and eventual victory), the very result for which the claimant hoped.
In my view, the following circumstances make it proper, as a matter of ordinary English usage, as well as a matter of law, to say that the claimant “prevailed” in her legal action. First, she did get the relief she wanted. Second, her legal action was a necessary condition for her obtaining it.
That is to say, had she not filed her action when she did, the Social Security Administration’s termination would have become final; and Congress’s statute would not have resurrected her case. See Pub.L. 98-460, § 2(d)(2)(C), 98 Stat. 1794, 1797 (1984); Hendricks v. Bowen,
The “causal” role of such lawsuits (taken together) is suggested by expressed concern in Congress about the failure of the Social Security Administration to “follow U.S. Courts of appeals decisions with which it disagrees, either nationwide or within the circuit of the ruling.” H.R.Rep. No. 618, 98th Cong., 2d Sess. 23, reprinted in 1984 U.S.Code Cong. & Admin. News 3038, 3060. The particular decisions that the Social Security Administration failed to follow included cases such as Miranda — cases that had enunciated a form of “medical improvement” standard. Indeed, the House Report stated:
The committee is most concerned about the impact of this policy on beneficiaries and claimants, and on their relationship to the social security program. If a circuit court rules on a given issue such as medical improvement, it is a foregone conclusion that subsequent appeals to that court on that issue will be successful. By refusing to apply the circuit court ruling, SSA forces beneficiaries and applicants to relitigate the same issue over and over again in the circuit....
The committee can find no reason grounded in sensible public policy to force beneficiaries to sue in order to obtain what has been declared by the Federal court as justice in a particular area. Such a policy creates a wholly undesirable distinction between those beneficiaries with the resources and fortitude to pursue their claims, and those who accept the government’s original denial*406 in good faith or because they lack the means to appeal their case.
Id. at 3061-62 (emphasis added). See H.R. Conf. Rep. No. 1039, 98th Cong., 2d Sess. 37-38, reprinted in 1984 U.S.Code Cong. & Admin. News 3080, 3095-96 (although the conference version of the Benefits Reform Act contains no specific provision dealing with “non-acquiescence,” the conference committee nonetheless expressed concern that the Social Security Administration’s policy “forces beneficiaries to relitigate the same issue over and over again in the circuit, at substantial expense to both beneficiaries and the federal government.”)
Had all claimants in the same position as the one before us brought their challenges to disability benefit termination policies in one large, class action suit, the relation between suit, Congressional action, and relief, would seem close enough to bring their case within the rule enunciated by this circuit in Nadeau v. Helgemoe,
Of course, all identical claimants did not bring one large lawsuit. Rather, many of them filed individual lawsuits. As a result of their separate filings, one cannot say that any individual case acted as a “catalyst.” One cannot say that any individual legal filing led Congress to act. One cannot say that any individual case “caused” the ultimately favorable result. Yet, I do not think that fact makes a difference where the individual cases, combined with a host of other similar cases, did have a catalytic effect. One can say of a single soldier that he “prevailed in his military action” when he, along with five hundred other soldiers in the same unit, took the enemy hill. Similarly, I believe one can say that this claimant “prevailed in her legal action” when she, along with many other similar claimants, bringing virtually identical judicial actions, helped convince Congress to pass the statute. See H.R.Rep. No. 618, 98th Cong., 2d Sess. 11, reprinted in 1984 U.S.Code Cong. & Admin. News 3038, 3048 (“[T]he combination of an apparently more restrictive policy and reviews of large numbers of beneficiaries have resulted in widespread complaints about [the Social Security Administration’s] procedures. These policies have come under severe criticism in the Federal courts[;]” both the Ninth Circuit and other circuit courts have declared “[s]imilar ‘medical improvement’ standards_ [Sjection 101 of the bill establishes a clear ‘medical improvement’ standard.”)
To hold this does not threaten any significant expansion of the notion of “catalyst,” for the circumstance (no single lawsuit, but a group of virtually identical lawsuits, brings relief) would seem relatively rare. To hold this would seem consistent with the basic Congressional intent underlying the EAJA, namely to avoid discouraging “individuals ... from seeking review of ... unreasonable governmental action because of the expense involved in securing the vindication of their rights in civil actions.” Equal Access to Justice Act, Pub.L. No. 96-481, tit. 2, § 202(a), 94 Stat. 2321, 2325 (1980). To hold the contrary risks creating the anomaly mentioned above, namely that recovery of legal costs turns on whether claimants were, or were not, able to consolidate their separate claims into a single suit.
Were a majority of this panel to agree that the claimant is a “prevailing party,” we should then remand this case for reconsideration of whether or not the government’s legal position — both when it terminated the claimant’s benefits and when it chose to contest her appeal of the termination, see 28 U.S.C. § 2412(d)(2)(D) (“ ‘position of the United States’ means, in addition to the position taken by the United States in the civil action, the action or failure to act by the agency upon which the civil action is based”), — was “substantially
[OJnce having found a disability, the Secretary may not terminate the benefits without substantial evidence to justify so doing. This will normally consist of current evidence showing that a claimant has improved to the point of being able to engage in substantial gainful activity; but it might also consist of evidence that claimant’s condition is not as serious as was first supposed.*
Id. (emphasis added).
Of course, it is conceivable that, had Congress not acted, this court would have modified its Miranda standard in light of the Administration’s adoption of regulations that said that “eligibility for cash benefits and for a period of disability will end” when “the evidence in [the claimant’s] file shows that [he is] able to do substantial gainful activity.” 20 C.F.R. §§ 404.1594, 416.994 (1981). See Chevron U.S.A., Inc. v. NRDC,
Ultimately, the matter may come down to determining how obviously wrong the Administration was in terminating the claimant’s benefits. What had changed since the initial award? Was there any medical improvement? Had diagnostic or therapeutic techniques changed? Was there new evidence? To what extent did review of the initial decision to grant suggest that the initial decision was clearly wrong? These are matters in respect to which we should not second guess the district court. See Pierce v. Underwood,
Under the old standard, the Secretary had to find the plaintiff’s disability had ceased in order for disability benefits to be terminated. However, under the new standard, all the Secretary had to demonstrate was that there was some medical improvement. The Secretary could find no medical improvement thereby contradicting its previous decision.
Magistrate’s Memorandum and Order, Guglietti v. Bowen, No. 82-0369T (October 14, 1988). These three sentences do not seem directly related to what I believe to be the relevant questions.
I conclude that we should find that the claimant is a “prevailing party,” but we should also remand for reconsideration of the issue of “substantial justification.”
We reject the broad rule said by the district court to be established in Pedroza v. Secretary,
