Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-88-02495/USCOURTS-ca10-88-02495-0/pdf.json

Nature of Suit Code: 863
Nature of Suit: Social Security - DIWC/DIWW (405(g))
Cause of Action: 

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PUBLISH 

UNITED STATES COURT OF. APPEALS 

FOR THE TENTH CIRCUIT 

ALONZO P. LOPEZ, ) 

FI LED 

Uoitcd Stat~ ('.uμ,rc Qt Appeals 

Tenth Cir::uit 

AUG 1 7 1989 

ROBERT L. HOECKER 

Clerk 

) 

Plaintiff/Appellant, ) 

) No. 88-2495 

V • ) 

) 

LOUIS W. SULLIVAN, Secretary of ) 

Health & Human Services of the ) 

United States, ) 

) 

Defendant/Appellee. ) 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF NEW MEXICO 

(D.C. NO. 84-1684BB) 

Submitted on the Briefs: 

James A. Burke, Santa Fe, New Mexico, Attorney for Plaintiff/ 

Appellant. 

William L. Lutz, U.S. Attorney and Ronald F. Ross, Assistant U.S. 

Attorney, Albuquerque, New Mexico; and Gayla Fuller, Chief 

Counsel, Region VI, John M. Gough, Principal Regional Counsel, 

Social Security Disability Litigation Branch, and Joseph B. Liken, 

Assistant Regional Counsel, Office of the General Counsel, U.S. 

Department of Health & Human Services, Dallas, Texas, Attorneys 

for Defendant/Appellee. 

Before MOORE, ANDERSON, and BROR~Y, Circuit Judges 

ANDERSON, Circuit Judge. 

Appellate Case: 88-2495 Document: 01019841887 Date Filed: 08/17/1989 Page: 1 
Alonzo Lopez, recipient of disability benefits under Title II 

of the Social Security Act, appeals from a decision of the 

district court denying his motion for attorney's fees under the 

Equal Access to Justice Act, 28 u.s.c. § 2412 (d)(l)(A) (''EAJA") 

and the Social Security Act, 42 u.s.c. § 406(bf. We conclude that 

the district court made an incorrect legal ruling with respect to 

the effect on Lopez' situation of the Social Security Disability 

Benefits Reform Act of 1984, and we REMAND to the district court 

for a determination of whether, had his appeal been decided on the 

merits, Lopez would have been a "prevailing party" under the EAJA 

and would have received a "favorable judgment" under 42 u.s.c. 

§ 406(b). 1 

BACKGROUND 

The dates of Lopez' administrative proceedings before the 

Social Security Administration ("SSA") are critical to an 

understanding of our disposition in this case. Lopez' most recent 

application for disability benefits was on February 28, 1984. The 

initial determination to disapprove that application was made on 

May 21, 1984. On May 23, Lopez filed for reconsideration. His 

reconsideration was reviewed unfavorably on June 6, 1984. He 

thereafter sought a hearing before an administrative law judge 

("ALJ"), and on Septembet 12, 1984 the ALJ issued a decision that 

Lopez was ineligible for benefits. On November 9, 1984 the 

1 After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); 10th Cir. R. 34.1.9. The cause is therefore ordered 

submitted without oral argument. 

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Appellate Case: 88-2495 Document: 01019841887 Date Filed: 08/17/1989 Page: 2 
Appeals Council formally declined to review the ALJ's decision, 

and therefore the decision of the ALJ remained binding. Lopez 

filed a civil action on November 13, 1984 seeking reversal of the 

Secretary's decision for lack of substantial evidence. A year 

later, on November 25, 1985, Lopez filed a motion to remand the 

case for reevaluation of his claim under section 5 of the Social 

Security Disability Benefits Reform Act of 1984, Pub. L. 98-460, 

98 Stat. 1794 ("Reform Act")(codified in scattered sections of 42 

u.s.C.). The Secretary did not oppose the motion, and the court 

granted it. Upon reevaluation under the new criteria, Lopez was 

found eligible for disability benefits dating back to January 6, 

1982, the date of onset of his disabling mental impairment. 

After succeeding at the reevaluation stage, Lopez filed his 

request for attorney's fees, which was denied. He argues on 

appeal that the original SSA decision lacked substantial evidence 

and that, on remand, he was a prevailing party under the preReform Act standards. He also asserts that the remand entitled 

him to prevailing party status because the Secretary would not 

have reevaluated. his ~ase had he not had an appeal pending. 

Finally, he argues that he should receive attorney's fees for 

court representation under 406(b) because the Secretary did not 

oppose them. The SSA, in turn, argues that, at the time of 

remand, the pre-Reform Act standards had been superseded and the 

possible outcome under those standards is irrelevant. It also 

argues that Lopez' remand was required under section 5(c)(l) of 

the Reform Act, and that, therefore, he was ineligible for 

prevailing party status. Finally, it asserts that its decision to 

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Appellate Case: 88-2495 Document: 01019841887 Date Filed: 08/17/1989 Page: 3 
take no position on the 406(b) fee award is irrelevant, as the 

district court properly exercised its discretion in ruling that 

the lawsuit had little or nothing to do with Lopez' ultimate 

success in obtaining benefits. 

LEGAL ANALYSIS 

The district court ruled that section S(c)(l) of the Reform 

Act applied to Lopez' situation. It, therefore, held that Lopez' 

success in obtaining benefits was due to a legally required remand 

for an SSA reevaluation rather than to success on the merits of 

his original appeal. After reviewing de novo the court's 

interpretation of section S(c)(l), as is our prerogative, we 

determine that application of the statutory provision to Lopez was 

error. 2 We, therefore, need not consider whether a mandatory 

remand would have precluded prevailing party status for Lopez. 

Section S(c)(l) provides in pertinent part: 

"Any initial determination that an individual is not 

under a disability by reason of a mental impairment and 

any determination that an individual is not under a disability by reason of a mental impairment in a reconsideration .of or hearing on an initial disability 

determination, made or held ••• after the date of the 

enactment of this Act [Oct. 9, 1984] and prior to the 

date on which revised criteria are established by 

regulation [August 28, 1985) .•. shall be redetermined 

by the Secretary as soon as feasible after the date on 

2 The Secretary's reference to the EAJA abuse of discretion 

standard in Pierce v. Underwood, 487 U.S. , 108 S.Ct. 2541, 

2347-49 (1988), is not directly on point. The abuse of discretion 

standard invoked therein applied to a review of the court's 

determination as to whether the government's position had been 

substantially justified under the EAJA. 

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Appellate Case: 88-2495 Document: 01019841887 Date Filed: 08/17/1989 Page: 4 
which such criteria are so estab~ished, applying such 

revised criteria (emphasis added)." 

The district court erred in concluding that the Appeals Council's 

denial of review on November 9, 1984 is included in the three 

types of determinations referred to in the above quotation. The 

determinations specified include the initial determination and a 

determination upon reconsideration or at a hearing on the initial 

determination. In fact, all three types of determinations were 

made, in this case, prior to October 9, 1984--the date of passage 

of the Reform Act. The initial determination was made on May 21, 

1984, the reconsideration determination on June 6, 1984, and the 

hearing decision on September 12, 1984. Under the express terms 

of the above provision, the Secretary is not obligated to reevaluate initial determinations and reconsiderations or hearing 

determinations made prior to October 9th. See Mazzola v. Sec'y of 

Health & Human Servs., 795 F.2d 222, 224 (1st Cir. 1986); Cook v. 

Heckler, 783 F.2d 1168, 1172 n.11, (4th Cir. 1986); Conley v. 

Bowen, 781 F.2d 143, 147 (8th Cir. 1986). 4 

3 The text of section 5 of the Reform Act can be found after 42 

u.s.c. § 421 under the heading "Moratorium on Mental Impairment 

Reviews." 

4 A Sixth Circuit case holding that section 5(c)(l) requires 

the Secretary "to reexamine any case receiving a final 

administrative determination after October 9, 1984" and concluding 

that the decision of the Appeals Council is the final 

administrative decision seems to us to be clearly wrong. See 

Daley v. Sec'y of Health and Human Servs., 819 F.2d 619, 620 (6th 

Cir. 1987). Section 5(c}(l} does not refer to a final 

administrative decision finding a claimant not disabled, but even 

if it did, the decision of the ALJ is final if the Appeals Council 

declines to review it, as was the case in Daley and is the case 

here. See 20 C.F.R. § 404.981. 

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Appellate Case: 88-2495 Document: 01019841887 Date Filed: 08/17/1989 Page: 5 
The district court confused the review process of the Appeals 

Council, which is not mentioned in the quoted provision, with the 

determinations that are specified in the provision. Yet the 

statutory omission of the Appeals Council review is not illogical 

when one considers that the Council's role is, as its title 

indicates, an appellate one. The Council may dismiss, deny, or 

accept a request for review. 20 C.F.R. § 404.967. If it accepts 

a request, it does not apply new standards adopted after the decision but instead reviews the decision on the basis of the evidence 

and the law as of the date of the decision. See 20 C.F.R. 

§ 404.967-81. In the case at hand, the Appeals Council found no 

factual or legal basis for reviewing the ALJ decision and denied 

the request. R. Vol. II at 5-6. Therefore, the ALJ decision 

stood as the final decision of the SSA. 

Further support for our interpretation of the above quotation 

is provided by the remainder of statutory section 5(c}(l), which 

reads in pertinent part: 

"[A]ny determination that an individual is not under a 

disability by reason of a mental impairment made ... 

in a reconsideration of, hearing on, review ~ the 

Appeals Council of, or judicial review of~ decision 

rendered in any continuing eligibility review to which 

subsection (b)(l) applies shall be redetermined by the 

Secretary as soon as feasible after the date on which 

such criteria are so established, applying such revised 

criteria (emphasis added)." 

This portion of the section 5(c)(l) reveals that Congress knew how 

to include Appeals Council reviews in its mandate for reevaluation 

when it chose. It chose to do so only in the context of 

continuing eligibility reviews, i.e., where an individual had 

previously been determined to be disabled, but it did not so 

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Appellate Case: 88-2495 Document: 01019841887 Date Filed: 08/17/1989 Page: 6 
choose in the context of a previous determination of no disability. Section 5(c)(l) of the Reform Act thus applies to two 

different groups: (1) those who had applied for disability 

benefits but who had not received SSA determinations before 

October 9, 1984, and (2) those previously found disabled whose 

initial eligibility reviews had not been completed before October 

9th or whose appeals were filed or pending on or after June 7, 

1983. See also Reform Act, § 5(b)(l). In other words, while 

those who previously had been declared disabled were not to lose 

their eligibility if they met the new standards, those previously 

found not disabled were not to gain the opportunity to be reevaluated automatically under the new standards. Their recourse lay 

with review by the Appeals Council and courts under the old 

standards or with a reapplication for benefits under the new 

standards. 5 

Given the district court's misreading of the statute to 

require a remand for reevaluation of Lopez' eligibility, the 

court's conclusion that Lopez was not entitled to attorney's fees 

is flawed. Since the reason for the SSA acquiescence to Lopez' 

remand motion is unclear, however, and since the court did not 

rule on the merits, we are unable to make a determination of 

whether Lopez' lawsuit was the reason for his success in obtaining 

benefits upon remand. If the SSA acquiesced in the remand as a 

way to settle or avoid losing the suit, then one might conclude 

5 Applicants rejected between March 1, 1981 and October 9, 1984 

whose reapplications were successful could receive disability 

benefits for "the period considered in the most recent prior 

determination." Reform Act, § 5(c)(3). They had to file, 

however, by October 9, 1985. 

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Appellate Case: 88-2495 Document: 01019841887 Date Filed: 08/17/1989 Page: 7 
that the lawsuit was a catalyst for or causally linked to Lopez' 

ultimate success and he was, therefore, a prevailing party. See 

Hendricks v. Bowen, 847 F.2d 1255, 1258 (7th Cir. 1988); Truax v. 

Bowen, 842 F.2d 995, 997 (8th Cir. 1988); Supre v. Ricketts, 792 

F.2d 958, 962 (10th Cir. 1986); Martin v. Heckler, 773 F.2d 1145, 

1149 (11th Cir. 1985) (en bane); Cruz v. Bowen, 668 F. Supp. 669, 

673 (D. Ut. 1987). If, on the other hand, the SSA acquiesced 

either (1) because it knew that Lopez had missed the reapplication 

deadline and was generously offering an alternative, or (2) 

because of a mistaken belief that the Reform Act compelled the 

reevaluation, then it was acting gratuitously, and the lawsuit did 

not meet the test for Lopez' establishment of prevailing party 

status. See Nadeau v. Helgemoe, 581 F.2d 275, 281 (1st Cir. 1978) 

("If it has been judicially determined that defendants' conduct, 

however beneficial it may be to plaintiffs' interests, is not 

required by law, then defendants must be held to have acted 

gratuitously and plaintiffs have not prevailed in a legal 

sense."). See also Supre v. Ricketts, 792 F.2d at 962; J. & J. 

Anderson, Inc. v. Town of Erie, 767 F.2d 1469, 1475 (10th Cir. 

1985); Operating Eng'rs. Loe. Union No. 3 of the Int'l Union v. 

Bohn, 737 F.2d 860, 863 (10th Cir. 1984); 6 Cruz v. Bowen, 668 F. 

Supp. 669, 671-72 (D. Ut. 1987). That is, even assuming the suit 

catalyzed the SSA to reevaluate the case, it nonetheless did not 

6 Although Nadeau and the three cited 10th Circuit cases 

interpreted the meaning of prevailing party under civil rights 

statutes, the Nadeau test adopted by the 10th Circuit is applied 

under other fee-shifting statutes such as the EAJA. See,~, 

Cruz v. Bowen, 668 F. Supp. at 671. Cf. McGill v. Sec'y of Health 

& Human Servs., 712 F.2d 28, 30-31 (2d Cir. 1983), cert. denied, 

465 U.S. 1068 (1984). 

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Appellate Case: 88-2495 Document: 01019841887 Date Filed: 08/17/1989 Page: 8 
have the effect of inducing the SSA to comply with section S(c)(l) 

of the Reform Act because the SSA was not, in fact, in 

ance. Although ironically, on appeal, the SSA 

supported the court's view that the Reform Act 

noncomplinecessarily 

compelled a 

reevaluation of the ALJ's decision against Lopez, the record 

before the district court is silent as to the reason for the SSA's 

choice not to oppose Lopez' motion. We conclude that on the basis 

of the record before us, we have no way of determining who was the 

prevailing party. 

An alternative ground is available for determining whether 

Lopez is entitled to attorney's fees under the EAJA and section 

406(b) of the Social Security Act. That is to determine whether 

substantial evidence was lacking to support the original ALJ decision that Lopez was not disabled. This issue is not properly 

before us on appeal, however, because the district court never 

made a ruling on the merits of this argument and we are not privy 

to the full briefs submitted below. We find ourselves in the 

awkward position of remanding to the district court the question 

of whether Lopez would have prevailed on the merits of his 

original appeal. We do so with full knowledge that the original 

appeal has been dismissed and has been mooted in most respects by 

the award of disability benefits dating back to January 1982. 

Nonetheless, we conclude that the question of attorney's fees cannot be resolved without consideration of the factual evidence and 

pre-Reform Act law on which the original denial of disability was 

predicated. Although it appears from the record that substantial 

evidence may have been lacking to support the ALJ's original 

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Appellate Case: 88-2495 Document: 01019841887 Date Filed: 08/17/1989 Page: 9 
determination, we deem it proper to ask the district court to make 

this initially fact-laden determination rather than undertake it 

ourselves.7 

In summary, it is premature to determine whether or not Lopez 

should receive attorney's fees, under EAJA, the Social Security 

Act, or both. We remand for a determination of whether Lopez 

would have received a favorable judgment and prevailed on his 

original appeal and, if so, whether the SSA position lacked 

substantial justification or whether there were any special 

circumstances which would make an award unjust. See 28 U.S.C. 

§ 2412 (d)(l)(A). See generally the discussion of what 

constitutes substantial justification in Pierce v. Underwood, 487 

U.S. , 108 S. Ct. 2541 (1988). If the court determines that 

attorney's fees are available, it should then determine for which 

stages of representation the attorney should be reimbursed and at 

7 Lopez argues on appeal that the readjudication of his 

disability application was based on nothing more than pre-Reform 

Act standards correctly applied and, in particular, on the use of 

a vocational expert, who should have been used in the first place. 

Appellant's Brief at 12. Since new standards were in place, and 

there is no evidence that they were not used, the testimony of a 

vocational expert on remand would not necessarily mean that such 

an expert, if used at the original hearing, would have ruled out a 

significant number of jobs for plaintiff on the basis of the preReform Act law. We accept the position of the SSA that "[t]he 

change in the law governing the evaluation of mental impairments 

doubtless affected the nature of the ALJ's hypothetical 

questioning of the vocational expert, as well as his analysis of 

the existence of a significant nonexertional impairment." 

Appellee's Brief at 5. 

Lopez' assertion, in his reply brief at 2, that a vocational 

expert was not used upon remand is mystifying. Lopez' brief at 4-

5 and 12 acknowledges that a vocational expert testified at the 

second hearing, and the second ALJ's decision includes an 

assessment of the vocational expert's testimony. We caution the 

attorney to read his briefs- more carefully in the future for such 

(cont'd on next page) 

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Appellate Case: 88-2495 Document: 01019841887 Date Filed: 08/17/1989 Page: 10 
what rate. 8 Of course, there is to be no double recovery by the 

attorney of his attorney's fees, and, in effect, any amount due 

him under the Social Security Act would be reduced by the amount 

coming from any EAJA award. See Weakley v. Bowen, 803 F.2d 575, 

580 (10th Cir. 1986). 

REMANDED for further action in accordance with the 

instructions herein. 

(cont'd from previous page) 

contradictions and for mechanical errors as well, including 

misquotations. 

8 Should Lopez be eligible for an EAJA award, we offer no 

opinion as to whether attorney's fees under EAJA should be 

available for his representation on remand before the SSA. Cf. 

Sullivan v. Hudson, 109 s. Ct. 2248 (1989) (federal court may 

award attorney's fees under EAJA for representation provided 

during SSA administrative proceedings held pursuant to remand). 

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