Milton v. ShalalaMilton v. Shalala
Jerry Milton and Hopsey Reado appeal from the judgments of the district court denying their petitions for attorneys’ fees under the Equal Access to Justice Act (“EAJA“).
While Appellants were seeking judicial review of denial of their social security disabili
The sole issue before us is whether Appellants are entitled to costs and attorneys’ fees pursuant to EAJA as “prevailing parties” in their civil actions.1 A party prevails by succeeding on “any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.” Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 1939, 76 L.Ed.2d 40 (1983) (quoting Nadeau v. Helgemoe, 581 F.2d 275, 278-79 (1st Cir.1978)). Some circuit courts have concluded that fees should be awarded a claimant who obtains benefits in a case remanded under the Reform Act either because his law suit played a role in causing the reinstatement of benefits or because he would have won in distriсt court if his claim had not been remanded. We have not previously addressed this issue. We examine each of these rationales in turn.
The “Necessary Cause” Theory: Did the Law Suits Cause Appellants’ Victory?
The Sixth Circuit has held that such a claimant‘s law suit was a necessary cause of
Perket‘s case (like Appellants’ cases) was remanded under the Reform Act. His suit wаs indeed necessary to his eventual receipt of benefits: had the suit appealing the agency action not been pending when the Reform Act was enacted, the final agency decisiоn denying benefits would have been res judicata. See Reform Act, § 2(d)(2),
Though the suits are a necessary cause of Appellants’ success, we do not think their suits are a sufficient cause of success to characterize the Appellants as prevailing parties. Rather, we agree with Guglietti v. Secretary of Health & Human Services, 900 F.2d 397 (1st Cir.1990), and Hendricks v. Bowen, 847 F.2d 1255 (7th Cir.1988). “[T]he mere obtaining of a remand directed by Congress is not reflective of success on any issue in plaintiff‘s suit.... Certainly, the mere temporal coincidence between passage of the Reform Act and the pendency of [a claimant‘s] appeal, standing alone, sеems too frail a link between bottom-line success and litigation.” Guglietti, 900 F.2d at 400; accord Hendricks, 847 F.2d at 1259 (Easterbrook, J., concurring) (“If the award sprang from new legal standards then [the claimant] was a fortuitous beneficiary, and serendipity is not а reason for rewarding lawyers.“).
The majority in Hendricks also rejected the hypertechnical argument that “but for” causation was adequate to show a sufficient causal connection between the litigation and the favorable redetermination of benefits. Hendricks, 847 F.2d at 1258. Hendricks concluded that the “proximate cause of [the claimant‘s] victory was the congressional enactment of a standard under which he was entitled to relief.” Id. The court recognized that the reason for reinstatement of benefits was not that the Secretary realized that he was wrong or decided to compromise, but rather that “Congress mandated reconsideration of all such currently pending claims under a newly enacted standard.” Id.; accord Petrone v. Secretary of Health & Human Servs., 936 F.2d 428, 430 (9th Cir.1991) ([“claimant] did not win reinstatement in the courtroom; she won because Congress changed the law.“), cert. denied, --- U.S. ----, 112 S.Ct. 1161, 117 L.Ed.2d 409 (1992); Guglietti, 900 F.2d at 400 (“but for” аrgument confuses a condition of recovery with a cause of recovery); Shepard v. Sullivan, 898 F.2d 1267, 1272 (7th Cir.1990) (change in governing law causing Secretary to change his initial determination breaks the chain of causation and deprives plaintiff of prevailing party status); Truax v. Bowen, 842 F.2d 995, 997 (8th Cir.1988) (“but for” argument does not establish causal connection between litigation and Secretary‘s remedial action). In the present cases the Appellants won because of a change in the law; we therefore reject their argument that they prevailed because of their law suits.
The Catalyst Theory: Did the Suits Cause the Law to Change?
A second causation theory rationalizing a fee аward under EAJA is the “catalyst” theory. This theory recognizes that though
The mere possibility that Congress acted beсause of an individual claimant‘s suit (or reacted to a large number of similar suits) is too speculative in our view considering the many influences upon members of Congress in casting their votes. We agree with thе cases that have refused to credit the change in law to a claimant‘s individual law suit and found the nexus between Congress‘s action and the law suit too attenuated. E.g., Petrone, 936 F.2d at 430; Guglietti, 900 F.2d at 401-02; Hendricks, 847 F.2d at 1258; Truax, 842 F.2d at 997.
The “Inevitable Victory” Theory: If Merits Had Been Reached
Perket also held that the claimant was the prevailing party because of his “inevitable victory.” Perket, 905 F.2d at 133 (alternate holding). Under this theory, the court surmised that, absent the fortuitous passage of the Reform Act and the remand it compelled, the clаimant‘s benefits would have been restored by the district court. Id.; see also Hendricks, 847 F.2d at 1260-61 (Easterbrook, J., concurring) (claimant should recover fees under EAJA if he would have prevailed in quest for benefits and recovered fees hаd the Reform Act never existed).
We reject this argument because of its “essential fallacy” of confusing two separate requirements for imposition of fees under EAJA, namely, that the private litigant prevail and that the government‘s position lack substantial justification.3 See Guglietti, 900 F.2d at 402. “Divining hypothetical error is in our estimation more properly to be considered on the ‘substantial justification’ furculum of the standard. Using it tо overcome the prevailing party hurdle double counts and also blurs the distinction between the two prongs in a way which frustrates Congress’ careful draftsmanship.” Id. Where an intervening change in the law and nоt the litigation causes the award, we need not inquire into whether the claimant would have prevailed under the old standards to determine whether the claimant is a prevailing party. See Shepard, 898 F.2d at 1273. Because Appellants are not prevailing parties, we do not review the relative merits of the parties’ litigation positions.
We conclude that the filing of the complaints in these cases was necessary but not sufficient for the favorable redetermination of Appellants’ benefits. The enactment of the Reform Act was the real reason for the awards on remand. We also reject Appellants’ contentions that their law suits prompted remedial action by Congress. The purpose of EAJA is to encourage private litigants to seek review of unreasonable government conduct or to vindicate their rights by challenging agency action that they would otherwise comply with to avoid litigation costs. Herron v. Bowen, 788 F.2d 1127, 1129 (5th Cir.1986). Rewarding private parties for being the fortuitous beneficiary of a change in stаtutory rights does not meet that purpose.
AFFIRMED.