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Coup v. Heckler

argued: September 28, 1987.


On Appeal from the United States District Court for the Western District of Pennsylvania-Pittsburgh (D.C. Civil Action No. 85-939).

Author: Gibbons


GIBBONS, Chief Judge:

Jack E. Coup, an applicant for Social Security Act disability benefits, and his attorney, appeal from orders of the district court: 1) approving the determination of the Secretary of Health and Human Services that he should be awarded disability benefits from January, 1983 rather than from January, 1980; 2) denying Coup's application for an award of fees from the government under the Equal Access to Justice Act; and 3) fixing the amount of the fee to be paid by Coup to his attorney at $1,470. Coup contends that the Secretary reopened a 1980 application, and thus that disability payments should run from the January 1980 onset date of his disability. He also contends that there should be a fee award against the government because its position was not substantially justified. Finally Coup, or more precisely his attorney, contends that the district court erred in limiting the attorney's recovery from Coup to $1,470. We will reverse the district court's order fixing January 1983 as the date from which disability payments should be paid as well as the order denying Coup's claim under the Equal Access to Justice Act. We will vacate the order limiting the amount of the attorneys fee to be paid to Coup's attorney, and remand for a reconsideration in light of (a) the amount of the fee awarded under the Equal Access to Justice Act, and (b) this opinion.


The Date from Which Payments Are Due

In early 1980 Mr. Coup, a school teacher, applied for Social Security disability benefits, alleging a disability as of January 18, 1980. His application was denied in June of 1980 and he did not pursue it through the administrative process. In June of 1982 Coup filed a new application, again alleging an onset date in January, 1980. Coup's 1982 application was denied, after reconsideration, in November, 1982, and he did not appeal that denial. In January of 1984 Coup filed his last application for benefits, once again alleging disability as of January, 1980. After a hearing in which evidence was submitted and considered respecting his condition back to January of 1980, the Administrative Law Judge concluded that Coup was not disabled, since he could return to work as a teacher. Coup appealed that ruling to the Appeals Council of the Social Security Administration, submitting to that body evidence of a further injury since the hearing before the Administrative Law Judge. The Appeals Council considered both the new evidence and that before the Administrative Law Judge, but denied Coup's request for review. Thus the Administrative Law Judge's order became the final order of the Secretary.

Coup then commenced a civil action, pursuant to 42 U.S.C. § 405(g), for review in the district court of the decision denying benefits. The district court denied the Secretary's motion for summary judgment, and granted Coup's motion. The court concluded that the agency record was fully developed and, on the basis of that record, that Coup is entitled to disability benefits. The judgment, dated March 4, 1986, provided that the Secretary's decision is reversed, and that Coup "is found eligible for disability insurance benefits in accordance with the January 19, 1980. Coup then moved in the district court, under the same docket number as his original complaint, for an order directing that, in accordance with the court's judgment, benefits be paid from January 18, 1980.

The Secretary opposed Coup's motion on the ground that limitation of retroactive benefits to January 1983 was consistent with section 223(b) of the Social Security Act, 42 U.S.C. § 423 (b), and the implementing regulation, 20 C.F.R. § 404.621(a)(1)(i). That statute and regulation limit the payment of retroactive benefits to a 12-month period prior to the date of the application. It was the Secretary's position, accepted by the district court despite its prior final judgment, that the relevant application date was in January of 1984.

We disagree. Section 223(b) does provide that an applicant for benefits for any month "shall be entitled to such benefit for such month if such application is filed before the end of the 12th month immediately succeeding such month." 42 U.S.C. § 423(b). Coup contends, however, that in adjudicating his 1984 application the Secretary reopened his 1980 and 1982 applications. The Secretary has discretion to reopen prior applications within four years of notice of the initial determination for "good cause." 20 C.F.R. §§ 404.987, 404.988(b) (1987). Good cause includes the furnishing of "new and material evidence." 20 C.F.R. § 404.989(a)(1)(1987). Beyond four years, a claim may be reopened on narrower grounds. 20 C.F.R. § 404.988(c). The initial adverse determination on Coup's 1980 application was made in June of 1980; his January 1984 application was within four years of that date. Thus the 1980 application could properly be reopened upon the furnishing of new and material evidence.

A decision of the Secretary declining to reopen a claim is not judicially reviewable. Califano v. Sanders, 430 U.S. 99, 51 L. Ed. 2d 192, 97 S. Ct. 980 (1977). This court has held, however, that we will examine the record to determine whether or not a reopening has occurred. A reopening, and thus a waiver of any claim of administrative res judicata, will be found "where the administrative process does not address an earlier decision, but instead reviews the entire record in the new proceeding and reaches a decision on the merits..." Kane v. Heckler, 776 F.2d 1130, 1132 (3d Cir. 1985). See also Purter v. Heckler, 771 F.2d 682 (3d Cir. 1985). It is not our role to determine whether the Secretary had good cause for reopening, for in that respect his decision is not judicially reviewable. Rather, we look at the administrative record to determine whether an explicit or a de facto reopening has occurred. See Cleaton v. Secretary, Dept. of Health and Human Services, 815 F.2d 295 (4th Cir. 1987); Jelinek v. Heckler, 764 F.2d 507 (8th Cir. 1985); Taylor v. Heckler, 738 F.2d 1112 (10th Cir. 1984); McGowan v. Harris, 666 F.2d 60 (4th Cir. 1981).

Plainly there was a de facto reopening here. Both the Administrative Law Judge and the Appeals Council considered evidence that Coup became entitled to disability benefits in January of 1980. That evidence was relied upon extensively by the district court in its holding that Coup was disabled as of January 18, 1980. At no point in the administrative proceeding after Coup's January 1984 application did the agency rely on administrative res judicata, or state that it was not considering Coup's claim of disability prior to a particular date. Thus this is not case where the agency explicitly considered such earlier evidence solely for the purpose of determining whether the claimant was disabled within the twelve months preceding the most recent application. When the case was first before the district court, the Secretary did not object that principles of administrative res judicata precluded consideration of the claim that Coup was entitled to disability benefits going back to 1980. When a judgment was entered directing payment of benefits from January 18, 1980 forward, the Secretary took no appeal. Such an appeal, on administrative res judicata grounds, would have been unavailing, since the judgment is entirely consistent with the de facto reopening which occurred at the agency level.

Thus the district court erred in relying on 42 U.S.C. § 423(b) to deny Coup's motion to enforce the judgment. Indeed the Secretary does not in this court defend the district court ruling on the ground advanced to that court. Instead, it claims here, for the first time, that the district court lacked jurisdiction to consider Coup's motion, because he failed to exhaust administrative remedies with respect to the claimed error in limiting benefits to January 1983 forward. Since this exhaustion argument was not made in the district court, it should not be considered here. This is not a case in which an alternative ground for affirmance, not relied on in the trial court, is advanced in support of a judgment. Since the district court considered the merits of Coup's claim, its order denying the claim would have to be vacated, not affirmed, if the Secretary's exhaustion argument were to prevail. The Secretary urges that because the exhaustion rule is "jurisdictional" it can be raised at any time. See Fed. R. Civ. P. 12(h)(3). In Social Security Act cases, however, while presentation of the claim to the Social Security Administration may go to the subject matter jurisdiction of the district court, exhaustion of administrative remedies rule is not jurisdiction and may be waived. Mathews v. Eldridge, 424 U.S. 319, 328, 47 L. Ed. 2d 18, 96 S. Ct. 893 (1976); Weinberger v. Salfi, 422 U.S. 749, 767, 45 L. Ed. 2d 522, 95 S. Ct. 2457 (1975). The Secretary's decision to litigate Coup's motion on the merits in the district court should, for the sake of orderly judicial administration, which cannot be withdrawn after a ruling on the merits.

Alternatively, assuming that the exhaustion of administrative remedies contention is properly before us, we note that it is without merit. Coup exhausted available administrative remedies once. He properly sought relief under 42 U.S.C. § 405(g), and obtained a final judgment. Enlarging the exhaustion rule so as to require exhaustion of internal agency remedies when the agency fails to obey a final judgment would made a mockery of the judicial review scheme provided by Congress. The district court had subject matter jurisdiction by virtue of Coup's original petition, and authority under the All Writs Act to enter an appropriate order making effective its final judgment on this petition. 28 U.S.C. § 1651 (1982); see also 5 U.S.C. § 706(1) (1982); United Steelworkers of America v. Pendergrass, 819 F.2d 1263 (3d Cir. 1987).

It is thus clear that the order denying Coup's motion to enforce the original judgment directing that benefits be paid from January 18, 1980 must be reversed.


Attorneys Fees Under the Equal Access to Justice Act

Coup applied for an award of attorneys fees against the government under the Equal Access to Justice Act. The district court denied that application on the ground that the position of the Secretary in this proceeding was substantially justified. Obviously our reversal of the court's ruling with respect to the date from which benefits should be paid requires a reconsideration of that ruling, at least with respect to the claims for benefits from January, 1980 to January, 1983. The ruling also applied, however, to Coup's successful recovery of benefits for the twelve months thereafter. Thus we must address it.

The district court's discussion of Coup's motion for a fee award is cryptic:

The government opposes this motion arguing that the Government's position in defending this case was substantially justified. The Government carefully distinguishes between the reversal of a decision by the Secretary which is not based on substantial evidence of record, and an award of attorneys fees under EAJA because the Government's position in defending the Secretary's decision lacks substantial justification. After a careful review of the arguments, we cannot find that the Government's position in this action warrants an award of fees under EAJA. Therefore we DENY plaintiff's Motion for Attorney's Fees under EAJA.

To the extent that the quoted language suggests that the court need only evaluate the justification for the government's litigation position, it is clear error. The statute defines the "position of the United States" to mean, "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. . . ." 28 U.S.C. § 2412(d)(2)(D) (Supp. III 1985). Thus the court was required to evaluate both he justification for the agency's denial of benefits, including retroactive benefits, and the justification of its resistance, in litigation, to Coup's complaint and his motion to enforce the judgment. As the quoted ruling discloses, the district court did no more than evaluate the legal arguments asserted in court on behalf of the Secretary.

Our review of the district court's denial of attorneys fees under the Equal Access to Justice Act is plenary. Stokes v. Bowen, 811 F.2d 814, 816 (3d Cir. 1987); Washington v. Heckler, 756 F.2d 959, 963 (3d Cir. 1985). Thus the fact that the district court failed to evaluate the government's legal position at the agency level, or its ...

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