The opinion of the court was delivered by: JOHN F. GERRY
The parties are presently before the court upon plaintiff's motion for reargument pursuant to New Jersey District Court Local Rule 12-I. The motion is granted and the prior judgment entered in the above captioned matter is vacated and reversed.
In November 1987, plaintiff filed a civil action under 42 U.S.C. § 405(g) in this court to review a final decision by the Secretary of Health and Human Services that had denied plaintiff's application for disability insurance benefits. This court issued an opinion on March 1, 1990, reversing the Secretary's decision. The case was remanded to the agency for further proceedings consistent with that opinion. On January 1, 1991, the Secretary rendered a decision favorable to the plaintiff, and the civil action was dismissed by this court on September 26, 1991. On October 31, 1991, plaintiff filed a motion for attorney's fees pursuant to the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412 (d). On August 19, 1992, this court denied the motion as untimely.
I. Retroactivity of Melkonyan with Respect to Filing Deadline.
Prevailing plaintiffs in a civil action against the United States are entitled to EAJA fees if the position of the United States was not substantially justified and if the application for fees is made within thirty days of the final judgment in the civil action. 28 U.S.C. § 2412(d)(1)(A) and (B). Final judgment occurs when the Government's right to appeal has expired. Id. § 2412(d)(2)(G). The Government has sixty days to file an appeal. Fed. R. App. P. 4(a)(1). Accordingly, an EAJA application must be filed within ninety days after entry of final judgment.
Our denial of plaintiff's EAJA application was based on Melkonyan v. Sullivan, 115 L. Ed. 2d 78, 111 S. Ct. 2157, 2162 (1991), which held that a remand that reverses, modifies, or affirms the Secretary's decision is a final appealable judgment, and the filing period for EAJA fees must be measured from the date of the remand. Finding that our remand of March 1, 1990 fell in that category, we held that plaintiff's motion, having been filed more than ninety days from that date, was untimely. Plaintiff argues that Melkonyan should not have been applied retroactively.
Whether to allow reargument under Rule 12-I is a matter within the court's discretion. See De Long Corp. v. Raymond Intern., Inc., 622 F.2d 1135, 1140 (3d Cir. 1980). Reargument should be granted, however, only in those instances where facts or legal issues had been presented to the court but overlooked in the court's decision. See Rule 12-I; Pelham v. United States, 661 F. Supp. 1063, 1065 (D.N.J. 1987); see also Student Public Interest Res. Group. v. Monsanto Corp., 727 F. Supp. 876, 878 (D.N.J.), aff'd mem., 891 F.2d 283 (3d Cir. 1989). Here, the issue of Melkonyan's retroactive application was addressed in the Government's opposition brief. Our opinion, however, applied Melkonyan without discussing the issue of retroactivity. We exercise our discretion to do so now and reverse our former opinion.
The Chevron Court stated that judicial decisions should be given retroactive effect unless: 1) the decision establishes a new principle of law that overrules clear past precedent or that decides an issue of first impression that was not clearly foreshadowed; 2) retroactive operation of the new decision will retard operation of the rule in question in light of its prior history, purpose, and effect; and 3) retroactive application would create an inequitable result. Chevron, 404 U.S. at 106-07.
Under this standard, the rule announced in Melkonyan regarding the proper time to file for EAJA fees should not be applied to cases arising before Melkonyan was decided. First, Melkonyan overruled clear past precedent. Before Melkonyan, a district court's order to remand was not considered a final judgment and therefore did not trigger the thirty-day filing period. The appropriate time to file for attorney's fees was after the post-remand administrative proceedings and final judgment of the district court. Taylor v. United States, 749 F.2d 171, 174 (3d Cir. 1984); Brown v. Secretary of Health and Human Servs., 747 F.2d 878, 885 (3d Cir. 1984). Thus, plaintiff followed clear Third Circuit precedent at the time by waiting until he became a prevailing party on remand before filing this fee application.
Second, time-barring plaintiff's application would retard the operation of EAJA. The purpose of EAJA was to eliminate "the harsh reality that in many cases" litigants with valid claims against the Government found it "more practical to endure an injustice than to contest it." Brown, 747 F.2d at 880 (citing H.R. Rep. No. 1418, 96th Cong., 2d Sess. 9, reprinted in, 1980 U.S.C.C.A.N. 4953, 4984, 4988). EAJA was enacted to ensure fair treatment of citizens by government agencies. Id. These principles would be undermined if plaintiff's application was retroactively ...