Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-14-15356/USCOURTS-ca9-14-15356-0/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 

---

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

FLINT WOOD; PHONESAGNAM

SILIVONGXAY; CYNTHIA

ROBERTS; FLISHA MUMAW, on

behalf of themselves and all

others similarly situated,

Plaintiffs-Appellants,

v.

SYLVIA MATHEWS BURWELL,

Secretary of the United States

Department of Health and

Human Services,

Defendant-Appellee.

No. 14-15356

D.C. No.

3:12-cv-08098-DGC

OPINION

Appeal from the United States District Court

for the District of Arizona

David G. Campbell, District Judge, Presiding

Argued and Submitted March 17, 2016

San Francisco, California

Filed September 14, 2016

Before: M. Margaret McKeown, Kim McLane Wardlaw,

and Richard C. Tallman, Circuit Judges.

Opinion by Judge McKeown

 Case: 14-15356, 09/14/2016, ID: 10122668, DktEntry: 46-1, Page 1 of 19
2 WOOD V. BURWELL

SUMMARY*

Equal Access to Justice Act

The panel reversed the district court’s denial of plaintiffs’

motion for attorneys’ fees under the Equal Access to Justice

Act (“EAJA”); held that plaintiffs, who were members of a

class action suit against the Secretary of the Department of

Health and Human Services, were entitled to “prevailing

party” status; and remanded to the district court to consider

whether the government’s position was “substantially

justified” under EAJA.

Plaintiffs were recipients of health coverage under an

Arizona Medicaid demonstration project, and theychallenged

the Secretary’s approval of a new Arizona 2011–2016

demonstration project.

The panel applied the factors set out in Buckhannon Bd.

& Care Home, Inc. v. W. Va. Dep’t of Health & Human Res.,

532 U.S. 598, 604-05 (2001), and held that plaintiffs were the

“prevailing parties” for the purpose of attorneys’ fees under

EAJA. The panel held that the dispositive question was not

whether the plaintiffs ultimately obtained some form of

substantive relief, but rather whether there was a lasting

alteration in the legal relationship of the parties. The panel

concluded that there was a material alteration in the legal

relationship of the parties, to the benefit of plaintiffs. The

panel further held that although a district court’s decision to

remand without vacatur might weigh against awarding

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

 Case: 14-15356, 09/14/2016, ID: 10122668, DktEntry: 46-1, Page 2 of 19
WOOD V. BURWELL 3

prevailing party status in some cases, it did not do so in this

case, and the district court’s retention of jurisdiction for

practical and equitable reasons did not undermine the reality

that plaintiffs were a prevailing party.

COUNSEL

Richard Rothschild (argued), Western Center on Law and

Poverty, Los Angeles, California; Jane Perkins, National

Health Law Program, Carrboro, North Carolina; Ellen Sue

Katz, William E. Morris Institute for Justice; Phoenix,

Arizona; for Plaintiffs-Appellants.

Sushma Soni (argued) and Michael Jay Singer, Attorneys,

Appellate Staff; John S. Leonardo, United States Attorney;

Civil Division, United States Department of Justice,

Washington, D.C.; for Defendant-Appellee.

OPINION

McKEOWN, Circuit Judge:

This appeal is the latest in a decade-long conflict over the

cost of copayments and medication for low-income

Arizonans who qualify for a state Medicaid demonstration

project covering childless adults. The sole issue is whether

the members of a class action suit against the Secretary of the

Department of Health and Human Services (“DHHS” or the

“Secretary”) were the “prevailing part[ies]” for purposes of

attorneys’ fees under the Equal Access to Justice Act

(“EAJA”), 28 U.S.C. § 2412.

 Case: 14-15356, 09/14/2016, ID: 10122668, DktEntry: 46-1, Page 3 of 19
4 WOOD V. BURWELL

In many ways, this case reads like a classic victory for the

class (the “Wood plaintiffs”): The district court found that the

Secretary acted in a manner that was arbitrary and

capricious—in violation of the Administrative Procedure Act

(“APA”), 5 U.S.C. § 706(2)(A)—by approving the project

without considering the class members’ evidence and

objections. The court remanded the case to the agency for a

new decision consistent with its legal obligations and the

Secretary complied. See Wood v. Betlach, 922 F. Supp. 2d

836 (D. Ariz. 2013). After reconsideration, the Secretary

again approved the demonstration project, and the district

court then granted summary judgment in her favor. However,

during the remand the district court retained jurisdiction and

did not vacate the demonstration project. Following the

remand, the district court found that the Wood plaintiffs were

not entitled to attorneys’ fees because, after the case returned

from the agency, the plaintiffs did not prevail on their

substantive claims.

We disagree. Applying the factors set out in Buckhannon

Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Human

Res., 532 U.S. 598, 604–05 (2001), we hold that under the

EAJA, the Wood plaintiffs are the “prevailing party” in their

procedural APA challenge against the Secretary.

BACKGROUND

This appeal arises out of substantive and procedural

challenges to the Secretary’s approval of an Arizona

Medicaid demonstration project. In 2012, the Wood

plaintiffs, who were recipients of health coverage under that

project, filed suit against the Secretary. The complaint

challenged her approval of a new Arizona project that raised

copayments for medical visits and medications and that

 Case: 14-15356, 09/14/2016, ID: 10122668, DktEntry: 46-1, Page 4 of 19
WOOD V. BURWELL 5

permitted healthcare providers to refuse non-emergency

services based on an inability to pay.

UndertheMedicaid Act, a “demonstration project” allows

the Secretary to waive certain Medicaid requirements for

state projects that are “likely to assist in promoting the

objectives of” the Medicaid Act. 42 U.S.C. § 1315(a). 

Demonstration projects maycover populations that would not

otherwise be eligible under the state Medicaid plan, but for

whom the state can receive federal reimbursement. In

approving a project, the Secretarymust examine: (1) whether

the project is an experimental, pilot, or demonstration project;

(2) whether it is likely to assist in promoting the objectives of

the Medicaid Act; and (3) the “extent and period” necessary

for the project. Newton–Nations v. Betlach, 660 F.3d 370,

380 (9th Cir. 2011) (citing Beno v. Shalala, 30 F.3d 1057,

1071 (9th Cir. 1994)). Cost-saving is not a sufficient ground

for approving a demonstration project. Id. at 381 (citing

Beno, 30 F.3d at 1069).

In 2000, Arizona voters opted to expand the state

Medicaid program to cover low-income childless adults who

would not otherwise be eligible for Medicaid. Arizona

applied to DHHS to create a project for eligible adults to

receive health services with nominal copayments. Under this

plan, healthcare providers could not refuse services because

of an inability to pay. DHHS approved the demonstration

project in 2001.

With DHHS approval, Arizona modified the program in

2003 to include higher copays (the “Copayment Rule”) and

to permit healthcare providers to refuse services for inability

to pay. A group of affected individuals filed suit in federal

court challenging the modified program. See

 Case: 14-15356, 09/14/2016, ID: 10122668, DktEntry: 46-1, Page 5 of 19
6 WOOD V. BURWELL

Newton–Nations v. Rodgers, No. CV-03-2506-PHX-EHC,

2010 WL 1266827, at *2–*7 (D. Ariz. Mar. 29, 2010)

(summarizing the procedural history). On appeal, we

determined that the Secretary’s approval of the Copayment

Rule violated the APA: “There is little, if any, evidence that

the Secretary considered the factors § 1315 requires her to

consider before granting Arizona’s waiver. Thus, the

Secretary’s decision was arbitrary and capricious within the

meaning of the APA insofar as it entirely failed to consider an

important aspect of the problem.” Newton–Nations, 660 F.3d

at 381–82 (internal quotation marks omitted).

When the first demonstration project expired in 2011,

Arizona sought approval for a new demonstration project,

which also included the Copayment Rule. DHHS approved

the new project through 2016, although the Copayment Rule

expired in 2013. At around the same time that the new

project was approved, we remanded theNewton–Nations case

to the district court with an order to vacate and remand to the

Secretary for further consideration. 660 F.3d at 383. On

remand, the district court dismissed the case as moot because

of the intervening 2011–2016 demonstration project, a

dismissal that we affirmed on appeal. Newton–Nations v.

Betlach, 569 F. App’x 525, 526 (9th Cir. 2014). The

Newton–Nations plaintiffs were awarded attorneys’ fees

under the EAJA. Newton–Nations v. Betlach, No. CV-03-

02506-PHX-ROS, ECF No. 284, at 5 (D. Ariz. Aug. 22,

2014) (finding that the plaintiffs were the prevailing parties

because “the Ninth Circuit concluded the Secretary violated

the APA in connection with the increased copayments”).

The Wood plaintiffs filed suit on essentially the same

grounds as the Newton–Nations plaintiffs, but challenged the

new 2011–2016 demonstration project. The complaint

 Case: 14-15356, 09/14/2016, ID: 10122668, DktEntry: 46-1, Page 6 of 19
WOOD V. BURWELL 7

alleged that the Secretary once again failed to review or

analyze a number of issues related to the Copayment Rule,

such as whether it was justified by any ground other than

cost-saving. The plaintiffs sought declaratory and injunctive

relief under the Due Process Clause of the Fourteenth

Amendment, the APA, and the Social Security Act (“SSA”). 

They requested that the Secretary be enjoined from

implementing the Copayment Rule, but did not specifically

request a remand to the agency. The district court denied the

Wood plaintiffs’ motion for a preliminary injunction because

the court determined that it could not enjoin the Copayment

Rule without enjoining the entire demonstration project, a

remedy that the plaintiffs did not seek.

In 2013, the district court partially granted the plaintiffs’

motion for summary judgment and remanded for the

Secretary to address the deficiencies in her approval of the

2011 demonstration project. According to the district court,

the Secretary’s approval of the new demonstration project

was arbitrary and capricious in violation of the APA. 

Specifically, the Secretary had not considered the report of

Dr. Ku, the Wood plaintiffs’ expert. His report indicated that

cost-sharing measures, like the Copayment Rule, had already

been amply studied, such that there was minimal research or

experimental value to the new project. The report further

suggested that heightened costs for low-income individuals

did not, in fact, reduce medical costs, but rather resulted in

greater reliance on emergency care. The district court

determined that “the record contains no evidence that the

Secretary considered or responded to Plaintiffs’ substantive

objections during the administrative process,” and that “the

Secretary has not pointed to any expert opinion or evidence

in the administrative record that refutes the objections put

forth by Plaintiffs on the basis of Dr. Ku’s research.” Wood,

 Case: 14-15356, 09/14/2016, ID: 10122668, DktEntry: 46-1, Page 7 of 19
8 WOOD V. BURWELL

922 F. Supp. 2d at 847–48. The court ordered the Secretary

to “address the deficiencies” set forth in the order and to

complete a re-evaluation of the demonstration project within

sixty days. Id. at 857.

The district court took a practical approach to the

situation, reasoning that because the Copayment Rule was an

integral component of the whole project, it would be

impossible to vacate that rule without vacating the entire

demonstration project. Id. at 851–52. Instead, the district

court opted to retain jurisdiction, because

[v]acating the entire demonstration project

would . . . deny Plaintiffs and the class the

very health benefits they claim to require. A

remand of the Secretary’s decision without

vacating the project is the clearly preferable

alternative and comports with Ninth Circuit

precedent holding that agency action in

violation of the APA can be left in place

during remand ‘when equity demands.’

Id. (quoting Idaho Farm Bureau Fed’n v. Babbitt, 58 F.3d

1392, 1395 (9th Cir. 1995)).

Upon remand and reconsideration, the Secretary came to

the same conclusion as before and approved the 2011–2016

demonstration project in a letter dated April 8, 2013. 

Reasoning that in the letter “[t]he Secretary explained her

rationale for disagreeing with the substance of [the Wood

plaintiffs’] evidence” and “was not required to do more,” the

court granted the Secretary’s motion for summary judgment. 

Wood v. Betlach, No. CV-12-08098-PCT-DGC, 2013 WL

3871414, at *7 (D. Ariz. July 26, 2013).

 Case: 14-15356, 09/14/2016, ID: 10122668, DktEntry: 46-1, Page 8 of 19
WOOD V. BURWELL 9

The district court later denied the Wood plaintiffs’ motion

for attorneys’ fees under the EAJA on the ground that they

were not the “prevailing party.” In its order, the district court

noted that the plaintiffs cited “seemingly dispositive cases”

holding that remand to an agency can give rise to prevailing

party status. The court also acknowledged that “[t]he interim

success obtained by Plaintiffs rested on a premise that was

not later rejected by the Court.” However, the district court

noted that the “dispositive” Ninth Circuit cases pre-dated the

Supreme Court’s decision in Sole v. Wyner, 551 U.S. 74

(2007), which the district court interpreted as foreclosing

prevailing party status for a party that obtained only interim

relief.

ANALYSIS

As the Supreme Court recently reiterated, “[b]efore

deciding whether an award of attorney’s fees is appropriate

. . . a court must determine whether the party seeking fees has

prevailed in the litigation.” CRST Van Expedited, Inc. v. 

EEOC, 136 S. Ct. 1642, 1646 (2016). The Court went on to

note that: “Congress has included the term ‘prevailing party’

in various fee-shifting statutes, and it has been the Court’s

approach to interpret the term in a consistent manner.” Id. A

fee-seeking partymust show that (1) there has been a material

alteration in the legal relationship of the parties and (2) it was

judicially sanctioned. See Buckhannon, 532 U.S. at 604–05; 

Klamath Siskiyou Wildlands Ctr. v. U.S. Bureau of Land

Mgmt., 589 F.3d 1027, 1030 (9th Cir. 2009) (applying the

Buckhannon factors to the EAJA).

The Wood plaintiffs present the classic hallmarks of a

prevailing party. They alleged that the government acted

improperlyin notfollowing prescribed administrative review;

 Case: 14-15356, 09/14/2016, ID: 10122668, DktEntry: 46-1, Page 9 of 19
10 WOOD V. BURWELL

the district court agreed and ordered the agency to conform its

behavior to the law; and the Secretary complied. 

Nevertheless, the government points to two factors that it

contends alter the prevailing party analysis: (1) the Wood

plaintiffs obtained procedural relief, but not the substantive

relief they sought; and (2) the district court remanded to the

agency without vacatur, while retaining jurisdiction. We

disagree with the government’s claim that this “procedural

posture made all the difference.” Because the posture of this

case did not fundamentally affect the prevailing party inquiry

set out in Buckhannon, we conclude that the district court

erred as a matter of law in holding that the Wood plaintiffs

were not a prevailing party.

I. Judicially-Sanctioned Material Alteration

The district court determined that the Secretary’s initial

authorization violated the APA and compelled her to

reconsider the evidence. Even though the Secretary later reapproved the demonstration project (including theCopayment

Rule), she was obliged to consider the Wood plaintiffs’

objections and evidence, which she failed to do during the

first authorization. This posture resulted in a judiciallysanctioned material alteration in the parties’ relationship

because “the defendants were required to do something

directly benefitting the plaintiff[ ] that they otherwise would

not have had to do.” Carbonell v. INS, 429 F.3d 894, 900

(9th Cir. 2005) (alteration in original) (citations omitted)

(internal quotation marks omitted).

Procedural remedies can constitute a material alteration

in the parties’ legal relationship. See, e.g., Or. Nat. Res.

Council v. Marsh, 52 F.3d 1485, 1492 (9th Cir. 1995), as

amended on denial of reh’g (June 29, 1995) (awarding

 Case: 14-15356, 09/14/2016, ID: 10122668, DktEntry: 46-1, Page 10 of 19
WOOD V. BURWELL 11

prevailing party status to plaintiffs where the agency had

failed to “include an analysis of cumulative impacts” in its

Environmental Impact Statement as required by law); Role

Models Am., Inc. v. Brownlee, 353 F.3d 962, 964–65 (D.C.

Cir. 2004) (awarding attorneys’ fees under the EAJA where

the court “ordered the Secretary of the Army to correct

procedural errors” and enjoined agency action while

procedural errors were addressed). We have consistently

held, both before and after the Supreme Court’s 2007

decision in Sole, that when remand is based on a legal defect

in the agency’s decision, the remand order can be sufficient

to confer prevailing party status. See Tobeler v. Colvin,

749 F.3d 830, 833–34 (9th Cir. 2014) (stating that remand to

consider evidence that the agency had improperly ignored

was sufficient to award attorneys’ fees); Li v. Keisler,

505 F.3d 913, 917–18 (9th Cir. 2007) (“remand orders . . .

advanced the goals sought by petitioners, and constituted

material alterations of the parties’ legal relationships”);

Rueda–Menicucci v. INS, 132 F.3d 493, 495 (9th Cir. 1997)

(awarding prevailing party status based on an agency

remand).

Sole did not alter the landscape with respect to agency

remands. In Sole, the Supreme Court considered whether a

party that obtained a preliminary injunction, which was later

dissolved by a final order denying relief, was a “prevailing

party” under the EAJA. 551 U.S. at 82–83. The Court

observed that “[a] plaintiff who achieves a transient victory

at the threshold of an action can gain no award under that feeshifting provision if, at the end of the litigation, her initial

success is undone and she leaves the courthouse

emptyhanded.” Id. at 78. Unlike Wyner, the plaintiff in Sole

who ultimately left the courthouse with a ruling that vitiated

the legal ground upon which her injunction claim was based,

 Case: 14-15356, 09/14/2016, ID: 10122668, DktEntry: 46-1, Page 11 of 19
12 WOOD V. BURWELL

id. at 80–81, the Wood plaintiffs left the courthouse with an

order that the Secretary violated the APA and had to

undertake a “do over” of her administrative review—a victory

that can hardly be described as leaving “emptyhanded.”

Remand to an agency based on an APA procedural

violation differs markedly from a transitory preliminary

injunction. In Sole, the Court observed that the hearing prior

to the grant of a preliminary injunction was “hasty and

abbreviated” and that “[a]t the summary judgment stage, with

the benefit of a fuller record, the District Court recognized

that its initial assessment was incorrect.” Id. at 84–85. The

initial determination that Wyner had demonstrated a

likelihood of success on the merits was “tentative” and

“rested on a premise the District Court ultimately rejected.” 

Id. The Court’s reference to the “transient” nature of the

preliminary ruling comports with the view that a preliminary

injunction is, “by its very nature, intended to be temporary.”

Higher Taste, Inc. v. City of Tacoma, 717 F.3d 712, 716 (9th

Cir. 2013). In contrast, in a procedural challenge under the

APA, part and parcel of the relief sought is agency adherence

to administrative procedures, apart from any substantive

relief.

The district court’s reliance on the procedural versus

substantive remedy dichotomy misreads Sole. The

dispositive question is not whether the plaintiff ultimately

obtained some form of substantive relief, but rather whether

there is a lasting alteration in the legal relationship between

the parties. The preliminary ruling in Sole granting the

injunction, which included an assessment of the substantive

merits, was both “incorrect” and “undone.” 551 U.S. at 85,

78. In this case, the district court’s remand order finding the

Secretary’s actions arbitrary and capricious under the APA

 Case: 14-15356, 09/14/2016, ID: 10122668, DktEntry: 46-1, Page 12 of 19
WOOD V. BURWELL 13

was not “reversed, dissolved, or otherwise undone” by its

later summary judgment order. Id. at 83. Quite the opposite,

the district court noted that the remand order requiring reevaluation by the Secretary “rested on a premise that was not

later rejected by the Court.” (Emphasis added); cf. id.

Whatever the Secretary’s ultimate decision, she was

compelled to authorize the demonstration project in a manner

that conformed to the APA.

The result does not change simply because the complaint

did not specifically seek remand for agency reconsideration

of the demonstration project as a whole. By challenging the

process by which the Secretary approved the demonstration

project, the Wood plaintiffs essentially sought the remedy of

a remand. See Newton–Nations, 660 F.3d at 382 (remanding

for reconsideration based on a nearly identical claim to that

of the Wood plaintiffs). When assessing whether there has

been a material alteration in the legal relationship of the

parties, the order must grant “relief that the would-be

prevailing party sought,” Klamath, 589 F.3d at 1030, but the

relief need not be of “precisely the same character as the

relief sought in the complaint” so long as it “serves the goals

of the claim” and “require[s] defendants to do something they

otherwise would not have been required to do.” Saint John’s

Organic Farm v. Gem Cty. Mosquito Abatement Dist.,

574 F.3d 1054, 1059 (9th Cir. 2009). Although the district

court found that the Copayment Rule was not severable from

the rest of the demonstration project and thus equity

precluded the Wood plaintiffs’ preferred form of relief (i.e.,

vacating the Copayment Rule), this ruling did not undermine

the relief granted in the remand order. We conclude that

there was a material alteration in the legal relationship of the

parties, to the benefit of the Wood plaintiffs.

 Case: 14-15356, 09/14/2016, ID: 10122668, DktEntry: 46-1, Page 13 of 19
14 WOOD V. BURWELL

II. Remand Without Vacatur and Retention of

Jurisdiction

We have not previously addressed whether remand

without vacatur affects the prevailing party analysis set out in

Buckhannon. This gap is unsurprising given that remand

without vacatur is a remedy used sparingly in this circuit. See

Pollinator Stewardship Council v. EPA, 806 F.3d 520, 532

(9th Cir. 2015) (“We order remand without vacatur only in

‘limited circumstances.’” (citations omitted)). The

government argues that because the district court retained

jurisdiction during the remand, prevailing party status is

benchmarked against the post-remand grant of summary

judgment in favor of the defendants. We disagree. Although

a district court’s decision to remand without vacatur might

weigh against awarding prevailing party status in some cases,

it does not do so here.

The district court’s rationale for declining to vacate the

demonstration project supports the Wood plaintiffs’ victory. 

The court retained jurisdiction during the remand to allow the

demonstration project to continue uninterrupted. It found that

“remand of the Secretary’s decision without vacating the

project is the clearly preferable alternative and comports with

Ninth Circuit precedent holding that agency action in

violation of the APA can be left in place during remand

‘when equity demands.’” Wood, 922 F. Supp. 2d at 851–52

(quoting Idaho Farm Bureau, 58 F.3d at 1395). This

approach is consistent with the factors courts weigh when

deciding whether to remand to an agency without vacatur:

(1) “how serious the agency’s errors are” and (2) “‘the

disruptive consequences of an interim change that may itself

be changed.’” Cal. Cmtys. Against Toxics v. EPA., 688 F.3d

989, 992 (9th Cir. 2012) (quoting Allied–Signal, Inc. v. U.S.

 Case: 14-15356, 09/14/2016, ID: 10122668, DktEntry: 46-1, Page 14 of 19
WOOD V. BURWELL 15

Nuclear Regulatory Comm’n, 988 F.2d 146, 150–51 (D.C.

Cir. 1993)).

The district court rested its decision on the second

factor—“disruptive consequences”—because vacating the

demonstration project would be prejudicial and deny ongoing

benefits to the very individuals who sought procedural relief

through agency reconsideration.

Contrary to the government’s characterization, the

remand did not “simply provide[] the opportunity for the

Secretary to provide further information about the rationale

for her approval decision prior to the court rendering a

decision on the merits.” Instead, the district court found that

the agency violated the APA and ordered the Secretary to

“address the deficiencies set forth in th[e] order,” not just

provide further information. Wood, 922 F. Supp. 2d at 857. 

The remand was based upon agency error, and the district

court’s retention of jurisdiction was a by-product of its desire

to maintain the demonstration projection for equitable

reasons. Cf. Black Warrior Riverkeeper, Inc. v. U.S. Army

Corps of Engr’s, 781 F.3d 1271, 1289 (11th Cir. 2015)

(deciding not to vacate the agency’s decision during remand

in part because the court was “unable to discern whether that

error truly is significant” or if the agency’s “ultimate

conclusion” was unlawful).

The Wood plaintiffs’ prevailing party status should not be

denied simply because the district court chose to protect this

vulnerable class by allowing the Medicaid program to

 Case: 14-15356, 09/14/2016, ID: 10122668, DktEntry: 46-1, Page 15 of 19
16 WOOD V. BURWELL

continue uninterrupted.1 To hold otherwise would put

plaintiffs in the untenable position of foregoing procedural

relief or losing medical coverage, compounded by the

possible forfeiture of a claim for attorneys’ fees. Likewise,

it would force district courts to choose between exercising

their equitable power to retain jurisdiction during an agency

remand and maintaining plaintiffs’ potential eligibility for

attorneys’ fees. We see no reason to impose such a Hobson’s

choice on litigants or on the court.

The government urges that a Social Security remand

provides an analogous context to support its position and to

benchmark the circumstances of the Wood plaintiffs. To the

contrary, the Social Security analogy supports our holding

that the Wood plaintiffs were the prevailing party. Although

we need not rely on the Social Security comparison for our

rationale, we address it because this point was one of the

government’s central arguments on appeal.

1 We decline to adopt the Federal Circuit’s prevailing party analysis,

which requires the district court to relinquish jurisdiction unless the party

ultimately succeeds on the merits. See Former Emps. of Motorola

Ceramic Prods. v. United States, 336 F.3d 1360, 1366 (Fed. Cir. 2003);

see also Dover v. McDonald, 818 F.3d 1316, 1320 (Fed. Cir. 2016)

(granting attorney’s fees where the district court did not retain jurisdiction,

remanded to the agency, and ordered further agency proceedings);

Thompson v. Shinseki, 682 F.3d 1377, 1381 (Fed. Cir. 2012) (“[W]here

the plaintiff secures a remand requiring further agency proceedings

because of alleged error by the agency, the plaintiff qualifies as a

prevailing party . . . without regard to the outcome of the agency

proceedings where there has been no retention of jurisdiction by the

court.” (alterations in original) (citation omitted) (internal quotationmarks

omitted)). In cases where, as here, the retention of jurisdiction flows from

an equitable remand without vacatur, such a rule does not comport with

the purpose of the EAJA or with the district court’s equitable authority to

decline to vacate an illegal agency action during remand.

 Case: 14-15356, 09/14/2016, ID: 10122668, DktEntry: 46-1, Page 16 of 19
WOOD V. BURWELL 17

Sentence four and sentence six of 42 U.S.C. § 405(g) of

the Social Security Act delineate the exclusive avenues for

remand following judicial review of a decision by the

Commissioner of Social Security. See Shalala v. Schaefer,

509 U.S. 292, 296 (1993). Under sentence four, the court can

remand “a judgment affirming, modifying, or reversing the

decision of the Commissioner,” while a sentence six remand

arises from a “motion of the Commissioner of Social

Security” or “upon a showing that there is new evidence

which is material and that there is good cause for the failure

to incorporate such evidence into the record.” 42 U.S.C.

§ 405(g).

In Schaefer, the Supreme Court distinguished between

situations that give rise to a sentence four remand versus a

sentence six remand, stating that, regardless of whether the

claimant is ultimately awarded benefits, “a party who wins a

sentence-four remand order is a prevailing party.” 509 U.S.

at 300–02. However, based on the specific statutory language

of § 405(g), courts are not permitted to retain jurisdiction

during a sentence four remand. Id. at 297.

The government suggests that because the district court

retained jurisdiction here, the proper analogy is to a sentence

six remand, where the party can only be “prevailing” if it

ultimately obtains substantive relief. In focusing exclusively

on the retention of jurisdiction, the government misses a key

difference between sentences four and six, which is critical

for the purposes of analogy to the EAJA. The distinction

turns on the reason for the remand. In Flores v. Shalala, we

applied the Schaefer principle that a claimant becomes a

prevailing party after a sentence four remand regardless of

whether there was an ultimate award of benefits. 49 F.3d

562, 568–69 (9th Cir. 1995), as amended on denial of reh’g

 Case: 14-15356, 09/14/2016, ID: 10122668, DktEntry: 46-1, Page 17 of 19
18 WOOD V. BURWELL

(June 5, 1995). Distinguishing between the two kinds of

Social Security remand, we explained:

The district court reversed the Secretary’s

decision because the Secretary incorrectly

failed to consider all the evidence . . . . The

remand here was not a sentence-six remand

. . . [which] may be issued only in two

situations: ‘where the Secretary requests a

remand before answering the complaint, or

where new, material evidence is adduced that

was for good cause not presented before the

agency.’

Id. at 569 (citation omitted). In Rueda–Menicucci, we

extended this reasoning to BIA remands, because both BIA

remands and sentence four remands result in a final judgment

that the agency’s actions did not comply with the law, such

that “we can perceive no difference between a ‘sentence

four’ remand under § 405(g) and a remand to the BIA for

further proceedings.” 132 F.3d at 495.

This case does not fit into the sentence six box. Instead,

to the extent it is instructive, a sentence four remand provides

a closer analogy to the current case: the Wood suit was

remanded because of the Secretary’s failure to comply with

the APA—in effect reversing the decision for failure to

follow mandated procedures—not because of intervening

facts or on a motion by the agency.

2

2 Our reasoning does not change in light of this court’s recent opinion

in Ibrahim v. United States Department of Homeland Security, —F.3d—,

2016 WL 4527560 (9th Cir. 2016). There, we held that a district court

should make a holistic “single inquiry” as to whether the government’s

 Case: 14-15356, 09/14/2016, ID: 10122668, DktEntry: 46-1, Page 18 of 19
WOOD V. BURWELL 19

In sum, the retention of jurisdiction for practical and

equitable reasons did not undermine the reality that the Wood

plaintiffs were a prevailing party. The remand was not

interim relief, but rather represented success on the APA

challenge.

CONCLUSION

The Wood plaintiffs are entitled to prevailing party status

with respect to the February 6, 2013 order remanding the

approval of the Medicaid demonstration project to the

Secretary. We remand to the district court to consider

whether the government’s position was “substantially

justified” under the EAJA. Thangaraja v. Gonzales, 428 F.3d

870, 874–76 (9th Cir. 2005).

REVERSED AND REMANDED.

conduct was “substantially justified” under the EAJA instead of making

“discrete” findings regarding the government’s positions at specific stages

of litigation. We also noted there that this court has not extended beyond

the Social Security context the rule in Corbin v. Apfel, 149 F.3d 1051,

1053 (9th Cir. 1998), that the district court may consider at the remand

stage whether the government’s position was substantially justified for

purposes of the EAJA. See Ibrahim, at *5–6 (discussing Corbin). In

contrast, this case examines the prevailing party determination, not the

distinct inquiry into substantial justification as in Ibrahim. In Ibrahim,

there was no possibility that Ibrahim could be considered a prevailing

party prior to the ultimate resolution of her claims. But here the Wood

plaintiffs prevailed on their claim that the Secretary violated APA

procedures, a question that is not dependent on the ultimate success of

their substantive claims. Therefore, because this case does not address the

substantial justification inquiry of the EAJA and especially because our

ruling does not depend upon an extension of Corbin, Ibrahim does not

change the result.

 Case: 14-15356, 09/14/2016, ID: 10122668, DktEntry: 46-1, Page 19 of 19