Lead Opinion
Concurring opinion filed by Circuit Judge PROST, in which Chief Judge RADER joins. Opinion concurring in the judgment filed by Circuit Judge DYK.
ON APPLICATION FOR ATTORNEY FEES
ORDER
Thomas O. Ward applies for an award of attorney’s fees and expenses under the Equal Access to Justice Act, 28 U.S.C. § 2412. Because Mr. Ward qualifies as a “prevailing party,” we grant his request.
I
On August 19, 2008, Mr. Ward, a maintenance mechanic for the U.S. Postal Service (“Agency”), was involved in an incident with a supervisor in which he shouted, acted in a manner perceived as threatening, and disobeyed instructions to remain in the supervisor’s office. After this incident, the Agency asserted an “Improper Conduct” charge against Mr. Ward and issued a Notice of Proposed Removal letter. The letter referenced no other misconduct aside from that associated with the August 19, 2008 event.
A deciding official subsequently issued a final decision letter removing Mr. Ward from his position as a maintenance mechanic. Mr. Ward appealed from this decision to the Merit Systems Protection Board (“Board”). At a hearing before the administrative judge, it became clear for the first time that the deciding official, in issuing his removal penalty, relied on other instances of misconduct by Mr. Ward not associated with the August 19, 2008 incident. In particular, the deciding official testified that he had ex parte communications with three of Mr. Ward’s supervisors and one manager, learning from
While the Board found error in the deciding official’s consideration of the past instances of misconduct, it ultimately sustained the removal penalty. In particular, the Board performed an independent Douglas factor analysis in its final decision without considering the past misconduct, concluding that the removal penalty was still reasonable. Mr. Ward appealed the Board’s final decision to this court, arguing that because the Notice of Proposed Removal letter only addressed the August 19, 2008 incident, he was not provided an opportunity to rebut the other misconduct allegations.
On appeal, this court vacated, concluding that the Board committed two errors. “First, the Board erred in failing to address the due process concerns arising out of the Deciding Official’s ex parte communications regarding Ward’s alleged prior instances of misconduct, which ... played a role in [the] penalty determination.” Ward v. U.S. Postal Serv.,
The Board committed its second error when it attempted to cure an underlying Agency procedural error (i.e., an error committed by the U.S. Postal Service). Specifically, the Agency initially erred by improperly considering Ward’s alleged past instances of misconduct without referencing those incidents in the Notice of Proposеd Removal. Id. at 1281. “Despite recognizing this procedural error, the Board erred in concluding that it could ‘remedy the error’ by performing an independent analysis of the Douglas factors to determine whether the ‘removal [was] within the bounds of reasonableness.’ ” Id. “Instead, the Board was required to run a harmless error analysis to determine whether the procedural error required reversal.” Id. On remand we instructed the Board to analyze whether the Agency’s procedural error was harmful, but only if the Board first found that the deciding official’s reliance on the ex parte communications caused a due process violation. Id. at 1282-83.
After our remand, the Board remanded the case to the administrative judge for further factual findings. The proceedings were subsequently suspended because the parties entered into settlement discussions.
Under our legal system, parties ordinarily bear their own attorney’s fees (i.e., the prevailing party is not automatically entitled to collect from the loser). Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Human Res.,
Specifically, § 2412(d) states: [ejxcept as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses, in addition to any costs awarded pursuant to subsection (a), 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). Thus, fees can only be awarded to “prevailing part[ies]” under EAJA if the government’s position in the case was not “substantially justified,” if no “special circumstances make an award unjust,” and if the party seeking the award timely files its application for fees to the court. Comm’r, INS v. Jean,
The Supreme Court provided guidance on the meaning of the “prevailing party” term in Buckhannon,
In reaching the conclusion that it did, Buckhannon explicitly overruled what had become known as the “catalyst theory.” Id. at 610,
Notably, EAJA was not specifically at issue in Buckhannon, as that case involved the “prevailing party” term from a different attorney’s fees statute. This court has concluded, however, that Buckhannon applies with equal force in the EAJA context. Brickwood Contractors, Inc. v. United States,
Under Buckhannon, a remand contained entirely within the federal judicial system (e.g., a remand from a federal appellate court to a district court) “at least in most circumstances, does not constitute relief on the merits for the purposes of the fee-shifting statutes.” Former Employees,
We addressed whether an agency remand can result in prevailing party status under EAJA in Former Employees,
In analyzing whether the remand to the DOL constituted relief on the merits, we distinguished remands to administrative agencies from remands contained entirely within the federal court system. Id. at 1364-65. We relied on two Supreme Court cases in doing so: Sullivan v. Hudson,
In summarizing Hudson, we explained that
a district court ordered a remand to the Secretary of Health and Human Services for reconsideration of a Social Security benefits claim, and retained jurisdiction. On remand the claimant was successful in obtaining bеnefits. The Supreme Court held that that claimant was a prevailing party because it succeeded before the agency after the remand. The Court explained that because there would be no final judgment until the case was decided on remand “for purposes of EAJA,” the claimant’s status as “prevailing party” was “dependent on the successful completion of the remand proceedings before the Secretary. Moreover, the remanding court continues to retain jurisdiction over the action within the meaning of EAJA and may exercise that jurisdiction to determine if its legal instructions on remand have been followed by the Secretary.” The Court therefore held that “where administrative proceedings are intimately tied to the resolution of judicial action and necessary to the attainment of the results Congress sought tо promote by providing for fees, they should be considered part and parcel of the action for which fees may be awarded.”
Former Employees,
when a “final judgment” had been entered for the purposes of starting EAJA’s 30-day time period for filing an attorneys’ fees application. The district court had remanded the case for reconsideration by the Secretary of Health and Human Services but had not retained jurisdiction. When the district court retains jurisdiction, the Supreme Court held, the time period begins after the district court dismisses. When it does not retain jurisdiction, the time period begins to run with the remand order itself. The Court emphasized that when a district court “reverses] the Secretary’s denial of benefits” and remands without retaining jurisdiction, the claimant is a “prevailing party” for the purposes of EAJA because “the plaintiff has succeeded on a[ ] significant issue in litigation which achieved some of the benefit sought in bringing suit.”
Former Employees,
Relying on Hudson and Schaefer, we formulated the following rule in Former Employees:
where the plaintiff secures a remand requiring further agency proceedings because of alleged error by the agency, the plaintiff qualifies as a prevailing party (1) without regard to the outcome of the agency proceedings where there has been no retention of jurisdiction by the court, or (2) when successful in the remand proceedings where there has been a retention of jurisdiction.
Former Employees,
The first prong of the test articulated in Former Employees was not directly applicable to the facts of that case. Thereafter, however, prong one was applied by our court in Kelly v. Nicholson.
After obtaining his remand, the veteran applied for attorney’s fees. Id. at 1352. Prong one of the Former Employees rule was at issue because the Veterans Court did not retain jurisdiction over the remand. Id. at 1353. Therefore, the ultimate outcome of the veteran’s case was irrelevant in the attorney’s fees analysis; the focus was solely on whether agency error caused the remand. We concluded that the VA’s failure to consider the ataxia evidence was a sufficient agency error to qualify the veteran for prevailing party status under EAJA. Id. at 1355.
Notably, our precedent does not characterize every agency remand as a grant of relief on the merits under Former Employees. Indeed, we have held that remands not rooted in agency error do not result in prevailing party status. Such remands include: a remand to address the impact of a newly-enacted statute on a
Ill
In the present matter, since we did not retain jurisdiction over our remand of Mr. Ward’s case to the Merit Systems Protection Board, prong one of the Former Employees rule applies. See Former Employees,
Mr. Ward’s remand was clearly caused by administrative error. As we explained in our previous opinion, the Merit Systems Protection Board failed to analyze the deciding official’s ex parte communications under the Stone framework, an analysis intended to determine whether Mr. Ward’s due process rights were violated. Ward,
IV
For the foregoing reasons, we hold that Mr. Ward is a “prevailing party” under EAJA and is therefore entitled to the attorney’s fees incurred during his Federal Circuit appeal.
The court, PER CURIAM determines as follows:
It Is Ordered That:
Mr. Ward is a “prevailing party” under EAJA and is therefore entitled to the attorney’s fees incurred during his Federal Circuit appeal.
Notes
. The Douglas factors, which apply in adverse action cases, focus the decision maker on the relevant facts when deciding the penalty. See Douglas v. Veterans Admin.,
. Mr. Ward ultimately settled his case.
Concurrence Opinion
with whom RADER, Chief Judge joins,
I agree with the majority that Thomas O. Ward must be awarded attorney’s fees pursuant to the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412, because he qualifies as a “prevailing party” under Former Employees of Motorola Ceramic Products v. United States,
Under the first prong, if a plaintiff secures a remand because of an agency error, and the remanding court does not retain jurisdiction over the case during remand, the plaintiff automatically qualifies as a “prevailing party” under EAJA regardless of the outcome of the remand proceedings. Former Employees,
I
The Supreme Court has consistently explained that some level of success on the merits must be achieved before a plaintiff can qualify as a “prevailing party” under a fee-shifting statute. See, e.g., Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Human Res.,
As noted by the majority, however, our court has applied a special “prevailing party” rule for remands to administrative entities. Specifically,
where the plaintiff secures a remand requiring further agency proceedings because of alleged error by the agency, the plaintiff qualifies as a prevailing party (1) without regard to the outcome of the agency proceedings where there has been no retention of jurisdiction by the court, or (2) when successful in the remand proceedings where there has been a retention of jurisdiction.
Id. at 1366; see also Kelly,
According to Former Employees, support for its rule comes from Sullivan v. Hudson,
In the first of these cases, Hudson, the SSA denied the plaintiffs application for benefits.
The Supreme Court initially commented that “[a]s provisions for judicial review of agency action go, [the Social Security Act] is somewhat unusual.” Id. at 885,
Next, the Hudson Court explained how this unique SSA procedural framework meshed with EAJA. In particular, the Court explained that “in a case such as this one, where a court’s remand to the agency for further administrative proceedings does not necessarily dictate the receipt of benefits, the claimant will not normally attain ‘prevailing party’ status ... until after the result of the administrative proceedings is known.” Id. at 886,
The Hudson Court thus concluded 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.” Hudson,
The second Supreme Court case involving a remand to the SSA is Schaefer,
In addressing whether the Schaefer plaintiff qualified as a “prevailing party” under EAJA, the Court explained that the case involved a “Sentence 4” remand under the Social Security Act, “which terminates the litigation with victory for the plaintiff.” Id. at 301,
Schaefer, in contrast to Hudson, was a Sentence 4 remand case where no jurisdiction was retained. See Schaefer,
In sum, Hudson and Schaefer focused their analyses on the extent to which the remands to the SSA constituted a victory on the merits. This approach squares with the Supreme Court precedents mentioned above, which require a “prevailing party” to succeed on the merits. See Buckhannon,
This conclusion is supported by Judge Rader’s dissent in Former Employees. See Former Employees,
II
As the majority explains, Mr. Ward obtained his remand because of agency error. Regarding the first error, the Board failed to analyze the deciding official’s ex parte communications under the Stone framework. See Ward v. U.S. Postal Serv.,
DYK, Circuit Judge, concurring in the judgment.
While I agree with the result reached by the majority, I write separately to respond to Judge Prost’s concurrence, which argues that Former Employees of Motorola Ceramic Products v. United States,
Moreover, denying prevailing-party status to appellants and petitioners in veterans and government employment cases who secure a remand based on agency error would make it more difficult for those individuals to secure counsel. The prospect of EAJA fees is designed to encourage counsel to undertake such representation. Under Judge Prost’s view, EAJA fees would rarely be available because our decisions in those cases, even when favorable to the claimant, typically result in a remand that does not mandate ultimate relief in his or her favor.
I
The reason that an appellant is a prevailing party when he secures a remand (without retention of jurisdiction) is that judicial review proceedings are considered to be separate proceedings from the underlying agency proceeding. EAJA’s statutory text recognizes this, stating that a “prevailing party” shall receive fees “incurred by that party in any civil action ... including proceedings for judicial review of agency action.” 28 U.S.C. § 2412(d)(1)(A) (emphasis added). This text in no way suggests that prevailing party status depends upon a direction from the reviewing court to enter judgment in the appellant’s favor.
Since the Supreme Court’s decision in Shalala v. Schaefer,
In awarding attorneys’ fees and expenses undеr EAJA, the inquiry is whether [appellant] was a prevailing party in his ‘civil action,’ not whether he ultimately prevails on his service connection claim. [Appellant] prevailed in his civil action by securing a remand requiring consideration of his ataxia diagnosis.
Id. at 1354 (citations omitted) (citing Former Employees,
Contrary to Judge Prost’s suggestion, see Prost Concurring Op. at 1303, nothing in Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health & Human Resources,
Significantly, shortly after Buckhannon, the Supreme Court in Scarborough v. Principi,
The Court once again made it clear that a remand is sufficient for prevailing-party status in Astrue v. Ratliff, —U.S.-,
II
Other circuits have also concluded that a remand resulting from agency error (without retention of jurisdiction) is sufficient for prevailing-party status in Social Security cases even if the remand does not direct an award of relief. See, e.g., Hackett v. Barnhart,
Circuits that have considered remands outside the Social Security context have recognized that the Schaefer rule applies to all agency review proceedings where the court does not retain jurisdiction. In Ruedar-Menicucci v. INS,
Although Schaefer was a Social Security case, we can perceive no difference between a “sentence four” remand under § 405(g) and a remand to the BIA for further proceedings. In both cases, the remand terminates judicial proceedings and results in the entry of a final judgment. We conclude that Schaefer effec*1309 tively overrules [prior Ninth Circuit cases that had held] that the entry of judgment remanding a case to the BIA for further consideration does not constitute a final judgment in favor of the petitioner.
The Seventh Circuit reached the same conclusion in Muhur v. Ashcroft,
The Third Circuit also followed the same approach in another asylum case, Johnson v. Gonzales,
As these other circuits have recognized, the rule we reached in Former Employees is clearly supported by the statutory text and is mandated by Supreme Court precedent.
. The first of the Board’s two errors was its holding that improper ex parte communications in connection with the penalty phase of the proceedings did not amount to a denial of due process; we held that the same due process standards applied in the context of the penalty determination and the merits determination of the charge. Id. at 1279-80. We required the Board on remand to apply the proper standard, and to set аside the penalty if the ex parte communications amounted to a denial of due process. Id. at 1280. The Board’s second error lay in applying an erroneous harmless error standard. Id. at 1281-82. We held that the agency could not prop
. For other cases applying the Former Employees rule, see Gurley v. Peake,
. The definition of "disability” for Social Security benefits purposes has not changed since Schaefer: "the term 'disability' means (A) inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months, or (B) blindness....” 42 U.S.C. § 416(i)(l).
. Sentence four of 42 U.S.C. § 405(g) states: "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 Commissioner of Social Security, with or without remanding the cause for a rehearing.” In contrast, where the remanding court retains jurisdiction (known as' a "sentence six” remand in the Social Security context), the entitlement to fees does depend on the ultimate outcome of the agency proceeding.