This case compels us to enter the fray which has arisen in the wake of
Melkonyan v. Sullivan,
— U.S.-,
I.
The facts are straightforward. Joseph Labrie (claimant) filed an application for Supplemental Security Income benefits in December 1985. The Administrative Law Judge (ALJ) denied the claim at step five of the sequential evaluation, the Appeals Council denied review, and claimant filed a timely appeal. A magistrate-judge, to whom the case was referred, determined that the Secretary’s deсision was unsupported by substantial evidence. In particular, he found that the Secretary failed adequately to consider claimant’s subjective complaints of pain. The magistrate-judge recommended that the case be remanded for further proceedings. On January 9, 1990, neither party having filed an objection, the district court entered an order adopting the magistrate-judge’s report and recommendation, vacating the Sеcretary’s decision, and remanding for further agency action.
On remand, the AU conducted a new hearing and, on September 17, 1991, issued a decision awarding benefits to claimant. Following the prevailing practice, claimant then submitted to the district court, on October 22, 1991, a proposed final order and application for attorney’s fees under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d). Among the prerequisites to an EAJA award is that the party file an application “within thirty days of final judgment in the action.” Id. § 2412(d)(1)(B). Relying on Melkonyan, the district court determined that its January 9, 1990 remand order constituted the final judgment, such that claimant’s application needed to have been filed within ninety days of that date. 1 The application was thus denied, on November 5, 1991, as being over eighteen months late. Claimant thereafter filed motions for relief under Fed.R.Civ.P. 59(e) and 60(b), which were denied on January 3, 1992. The district court acknowledged that its ruling “may be perceived as an unfair result,” 2 but considered such an outcome mandated by the intervening Melkonyan decision. This appeal followed.
II.
A trio of Supreme Court decisions involving claims for disability benefits informs the analysis here. In
Sullivan v. Hudson,
The detailed provisions for the transfer of proceedings from the courts to the Secretary and for the filing of the Secretary’s subsequent findings with the court suggest a degree of direct interaction between a federal court and an administrative agency alien to traditional review of agency action under the Administrative Procedure Act.
The following term,
Sullivan v. Finkelstein,
In finding the remand order to be an appealable final decision, the Court distinguished between remands ordered pursuant to sentence four of 42 U.S.C. § 405(g) аnd those pursuant to sentence six. Claimant argued that § 405(g), in sentence seven, contemplated an appealable final judgment to be entered by the district court following the remand proceedings. Yet the post-remand review called for under sentence seven, the Court held, referred only to cases that had been remanded under sentence six. And a sentence six remand was only “appropriate when the district court learns of evidence not in existence or available to the claimant at the time of the administrative proceeding that might have changed the outcome of that proceeding.”
In Melkonyan, the issue was what event constituted a “final judgment” for EAJA purposes, triggering the jurisdictional thirty-day filing period. Before the district court, the Secretary had requested a remand for consideration of new evidence; claimant eventually acceded to this request, and the court remanded “for all further proceedings.” Claimant was awarded benefits on remand, and neither party thereafter returned to district court for entry of final judgment. Over a year later, claimant applied for EAJA fees. The Ninth Circuit deemed thе application untimely, ruling that the Appeals Council’s decision to award benefits constituted the EAJA final judgment.
In its June 10, 1991 decision, the Supreme Court rejected this view. Congress’ use of the term “judgment” in EAJA, it held, “refers to judgments entered
by a court of law
and does not encompass decisions rendered by an administrative agency.” — U.S.-,
In sentence four cases, the filing period begins after the final judgment (“affirming, modifying, or reversing”) is entered by the court and the appeal period has run, so that the judgment is no longer appealable.... In sentence six cases, the filing period does not begin until after the postremand proceedings are completed, the Secretary returns to court, the court enters a final judgment, and the appeal period runs.
Id.
The Court and the parties agreed that the remand order there was not pursuant to sentence four; the district court hаd sent the case back without making “any substantive ruling” as to the correctness of the agency determination.”
Id.
— U.S. at -,
III.
Melkonyan appears to mandate that every sentence four remand constitutes a final judgment, depriving the district court of jurisdiction and triggering the EAJA filing period. So construed, the case creates a two-párt quandary. , First, such a rule appears at odds with the rationale of Hudson. As mentioned, the Court there specifically endorsed the retention of jurisdiction by the district court and the entry of final judgment following remand. If Hudson had involved a sentence six remand, of course, the two decisions would easily mesh. Yеt, as the Secretary here concedes (and as we now realize), the remand in Hudson was based on sentence four, not sentence six. 8 Second, in this as in most other circuits, the prevailing prac *784 tice prior to Melkonyan was for the district court in sentence four remands to retain jurisdiction and enter final judgment following remand, thereby triggering the EAJA filing period. To the extent Melko-nyan retroactively abrogates this practice, numerous prevailing parties under EAJA will be relegated to a “catch-22” situation.
Courts have endeavored, in a variety of ways, to reconcile
Hudson
and
Melkonyan
and/or to mitigate the рerceived hardship stemming from the latter. The result has been a welter of divergent, often conflicting, opinions. One school of thought recognizes a subcategory of sentence four remands in which a district court may retain jurisdiction and enter final judgment following the agency decision on remand. Applicable to cases where the court does not dictate an award of benefits but merely calls for further proceedings, such a practice is said to be consistent with
Hudson,
not inconsistent with
Melkonyan
(or at least not foreclosed by what is described, as dicta in that decision), and in line with accepted notions of when a party “prevails” for EAJA purposes. The Eighth and Tenth Circuits subscribe to this approach,
9
see Hafner v. Sullivan,
Other courts have reached the same result by an opposite route — construing sеntence four narrowly, and holding that an order that simply vacates and remands for further proceedings falls under sentence six. 12 This view holds that, notwithstanding the language in Melkonyan, see note 6 supra, such an order is not a “reversal” of the Secretary’s decision for purposes of sentence four. 13
A third approach, embraced by the Fourth Circuit,
see Sargent v. Sullivan,
A remaining alternative, of course, is the one adopted by the district court here— applying
Melkonyan
to deny thе EAJA application as untimely. As far as we are aware, this result has been reached in only a handful of cases.
See, e.g., Salvador v. Sullivan,
IV.
Petitioner relies on three of the approaches described above plus one additional basis for relief. Specifically, he argues (1) that the “retained jurisdiction” approach of the Eighth and Tenth Circuits should be adopted; (2) that Melkonyan should be applied prospectively only; (3) that the district court erred in denying his motion for equitable relief under Fed.R.Civ.P. 60(b); and (4) that no final judgment was ever entered here because no “separate document” was issued under Fed.R.Civ.P. 58. As we accept his first contention, the others need not be addressed.
In conformance with
Welter, Gutierrez
and
Hafner,
we agree that a district court may retain jurisdiction pending a sentence four remand and thereafter enter final judgment for EAJA purposes.
18
As mentioned, the Court in
Hudson
specifically endorsed such a situation. Neither
Finkel-stein
nor
Melkonyan
purported to overrule
Hudson;
to the contrary, they acknowledged its continuing validity.
See also Ardestani v.
INS,— U.S. -, -,
*786 We therefore adopt the conclusion reached in Hafner:
[W]hen a judicial remand order in Social Security disability cases contemplates additional administrative proceedings that will determine the merits of the claimant’s application for benefits, and thus will determine whether the claimant is a prevailing party, the district court retains discretion to enter a final judgment for EAJA purposes after the proceedings on remand have been completed. On the other hand, if the remand order directs the Secretary to award benefits, the claimant is a prevailing party and the remand order is the final judgment for EAJA purposes.
For these reasons, we conclude that no final judgment for EAJA purposes has been issued, and that claimant is entitled to return to district court for entry of such a judgment and for consideration of his fees application.
Reversed and remanded for further proceedings.
Notes
. As used in EAJA, final judgment “means a judgment thаt is final and not appealable, and includes an order of settlement.” 28 U.S.C. § 2412(d)(2)(G). Under Fed.R.App.P. 4(a)(1), the remand order was “not appealable” after 60 days — giving claimant a total of 90 days to file for fees.
. As the court realized,
pre-Melkonyan
case law in this circuit was to the contrary.
See, e.g., Guglietti v. Secretary of HHS,
. EAJA provides in pertinent part:
Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and оther expenses ... incurred by that party in any civil action ... 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) (emphasis added).
. The pertinent portions of § 405(g) (quoted separately, with sentence numbers added) are as follows:
[1] Any individual, after any final decision of thе Secretary made after a hearing to which he was a party, ... may obtain a review of such decision by a civil action....
[4] The court shall have the 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 for good cause shown before he files his answеr, 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 and decision, and a transcript of the additional record and testimony upon which his action in modifying or affirming was based.
[7] Such additional or modified findings of fact and decision shall be reviewable only to the extent provided for review of the original findings of fact and deсision.
42 U.S.C. § 405(g).
.The Court later elaborated somewhat on this point: "[T]he remanding court continues to retain jurisdiction over the action within the meaning of the EAJA, and may exercise that jurisdiction to determine if its legal instructions on remand have been followed by the Secretary.”
. The Court also indicated that sentence four was to be construed expansively. It quoted from a House Report stating that a 1980 amendment to sentence six was "not to be construed as a limitation of judicial remands currently recognized under the law in cases [in] which the Secretary has failed to provide a full .and fair ' hearing, to make explicit findings, or to have correctly apply
[sic
] the law and regulations.” — U.S. at-,
. The Court added that the first clause of sentence six was not implicated, — U.S. at-,
. In
Trinidad v. Secretary of HHS,
. In
Scanlon v. Sullivan,
.
See, e.g., Lenz v. Secretary of HHS,
.
See, e.g., Misciagno v. Secretary of HHS,
.
See, e.g., Hudson v. Sullivan,
. The Seventh Circuit embraced this narrow interpretation of sentence four in
Young v. Sullivan,
.
See, e.g., Sansano v. Sullivan,
.
See, e.g., Allbritton v. Secretary of HHS,
. This holding is rejected in
Allbritton v. Secretary of HHS,
. The Secretary argues that adopting this last alternative need not be inconsistent with accepted notions of when a claimant becomes a prevailing party. In his view, Hudson and Melko-nyan can be reconciled, at least in part, by (1) deeming all sentence four remands to be final judgments, triggering the EAJA filing period, and (2) thereafter holding the EAJA application in abeyance until it is determined whether claimant prevails on remand. '
As far as we are aware, this' argument has gained no judicial adherents. To the contrary, the proposal of holding EAJA applications in abeyance has been specifically rejected.
See Hafner v. Sullivan,
.Several courts adopting this position have gone on to indicate that, by analogy to § 405(g), a claimant has sixty days following notice of. a favorable administrative award to petition the court for the entry of final judgment.
See, e.g., Lenz v. Secretary of HHS,
. The Eighth Circuit added that a sentence four remand order would still be immediately ap-pealable under
Finkelstein,
explaining that "[a]s a matter of statutory construction and common sense, we see no reason why an appealable ‘final judgment' under § 405(g) must necessarily be a ‘final judgment’ for purposes of § 2412(d)(1)(B).”
