Caseflicks

Supreme Court of the United States • 1991

Melkonyan v. Sullivan

501 U.S. 89 | 111 S. Ct. 2157 | 115 L. Ed. 2d 78 | 1991 U.S. LEXIS 3322

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Takeaway

In short, Melkonyan holds that EAJA’s fee deadline is triggered by a final, unappealable court judgment—not by a favorable agency decision after remand—and that Social Security remands under § 405(g) must fit sentence four or sentence six.

Background

Zakhar Melkonyan applied for Supplemental Security Income disability benefits in 1982. An ALJ denied the application, and the Appeals Council declined review. Melkonyan then sought judicial review in federal district court under 42 U.S.C. § 405(g).

While that case was pending, Melkonyan filed a second benefits application with new evidence. The agency approved the second application from its filing date. The Secretary then sought a remand so that the agency could reconsider Melkonyan’s first application in light of the new evidence. Melkonyan ultimately agreed, and the District Court entered an order granting the joint remand request and remanding the matter to the Secretary for further proceedings.

A month later, the Appeals Council vacated the earlier denial and found Melkonyan disabled as of his original application date. More than a year after that administrative decision, Melkonyan sought attorney’s fees under the Equal Access to Justice Act (EAJA). The District Court denied fees because it found the Secretary’s original position substantially justified.

The Ninth Circuit vacated on another ground. It held that the Appeals Council’s favorable decision effectively constituted EAJA’s “final judgment,” so Melkonyan’s fee application, filed more than a year later, was untimely. The Supreme Court vacated and remanded for clarification of the nature of the District Court’s original remand order.

Issues

Issue #1

Whether a favorable administrative decision issued after a district-court remand is a “final judgment” that starts EAJA’s 30-day deadline for seeking fees.

Holding

No. A “final judgment” under EAJA is a court judgment that terminates the civil action, and the 30-day period begins only after the time to appeal that judgment has expired.

Reasoning

EAJA authorizes fees to a prevailing party in a “civil action . . . in any court,” and requires the fee application within 30 days of “final judgment in the action.” Read together, those provisions make the relevant judgment one entered by the court in which the civil action was brought, not a later decision of an administrative agency.

The statutory structure confirms that distinction. Another EAJA provision, 5 U.S.C. § 504, governs administrative adjudications and uses the phrase “final disposition in the adversary adjudication.” Congress therefore knew how to refer to an agency’s final action when it meant to do so, but used “final judgment” for judicial proceedings under § 2412.

The 1985 amendment defining final judgment as a judgment that is “final and not appealable” did not expand the term to include agency decisions. Congress added that language to resolve a circuit conflict about whether the EAJA clock began upon entry of a district-court judgment or only after the appeal period expired. Nothing indicates that Congress also meant silently to transform an administrative decision into a court judgment.

Sullivan v. Hudson did not require a different result. Hudson permits fees for certain post-remand administrative work when those proceedings remain closely connected to a pending civil action and the district court retains jurisdiction to enter a final judgment. It does not mean that every agency decision on remand itself becomes a final judgment for all EAJA purposes.

Issue #2

Whether § 405(g) permits Social Security remands beyond the remands authorized by its fourth and sixth sentences.

Holding

No. In a § 405(g) action, a district court may remand only under sentence four or sentence six.

Reasoning

A sentence-four remand accompanies a judgment affirming, modifying, or reversing the Secretary’s decision, with or without a rehearing. A sentence-six remand occurs without a substantive ruling on the agency decision, either on the Secretary’s timely motion before answering or on a showing that material new evidence exists and that good cause justified the earlier failure to present it.

The Court had previously identified these two types of remands in Sullivan v. Finkelstein. Here, it made explicit that they are exclusive. Section 405(g)’s detailed enumeration of the circumstances authorizing remand shows Congress intended to limit district courts’ remand authority in Social Security cases.

The 1980 amendment and its legislative history reinforce that conclusion. Congress specifically restricted remands for new evidence to cases involving material evidence and good cause, responding to concern that courts were remanding too freely. Sentence four still permits remands tied to a judicial judgment reversing, modifying, or affirming the agency decision.

This two-category rule also aligns § 405(g) with EAJA. After a sentence-four remand, the court’s judgment triggers the EAJA period once it is no longer appealable. After a sentence-six remand, the agency must return to court after the additional proceedings, and the court then enters the final judgment that triggers EAJA’s deadline.

Issue #3

Whether the District Court’s particular remand order was a sentence-six remand that preserved jurisdiction for a later final judgment and potential EAJA fees.

Holding

The Court could not determine the remand’s character from the record and remanded for the District Court to clarify its order.

Reasoning

The order was not a sentence-four remand because the District Court did not affirm, modify, or reverse the Secretary’s decision. It made no substantive ruling at all; it simply granted the parties’ request to remand for further administrative proceedings.

There was substantial reason to view the order as a sentence-six remand because newly acquired evidence prompted the remand and ultimately led the Appeals Council to award benefits on the original claim. But the District Court did not expressly find the required good cause for failing to submit that evidence earlier, and its order did not clearly indicate that it expected the parties to return after the agency proceedings.

The order might instead have functioned as a voluntary dismissal under Federal Rule of Civil Procedure 41(a), even though the procedural record was unclear. If it was a sentence-six remand, the Secretary must return to the District Court, which must enter a final judgment; Melkonyan could then seek EAJA fees, subject to whether the Secretary’s position was substantially justified. If it was effectively a dismissal, the court’s jurisdiction ended and Melkonyan would not qualify as a prevailing party in a civil action for EAJA purposes.