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Subject: 89-504, OPINION, SULLIVAN v. FINKELSTEIN




NOTICE: This opinion is subject to formal revision before publication in
the preliminary print of the United States Reports.  Readers are requested
to notify the Reporter of Decisions, Supreme Court of the United States,
Washington, D. C. 20543, of any typographical or other formal errors, in
order that corrections may be made before the preliminary print goes to
press.

SUPREME COURT OF THE UNITED STATES


No. 89-504



LOUIS W. SULLIVAN, SECRETARY OF HEALTH
AND HUMAN SERVICES, PETITIONER v.
MARILYN FINKELSTEIN


on writ of certiorari to the united states court of appeals for the third
circuit

[June 18, 1990]



    Justice White delivered the opinion of the Court.
    We granted certiorari to decide whether the Secretary of Health and
Human Services may immediately appeal a district court order effectively
declaring invalid regulations that limit the kinds of inquiries that must
be made to determine whether a person is entitled to disability insurance
benefits and remanding a claim for benefits to the Secretary for
consideration without those restrictions.  We hold that the Secretary may
appeal such an order as a "final decision" under 28 U. S. C. 1291. {1}

I
    Respondent Finkelstein is the widow of a wage earner who died in 1980
while fully insured under Title II of the Social Security Act, 49 Stat.
622, as amended, 42 U. S. C. 401 et seq. (1982 ed.).  In 1983, respondent
applied to the Social Security Administration for widow's disability
benefits, claiming that her heart condition made her disabled within the
meaning of the section of the Social Security Act providing for surviving
spouses' disability insurance benefit payments, 223, as added, 70 Stat.
815, and as amended, 42 U. S. C. 423(d)(1)(A), (d)(2)(B) (1982 ed. and
Supp. V).
    Section 423(d)(2)(B) states that a widow shall not be determined to be
disabled unless her impairment is of a level of severity which, "under
regulations prescribed by the Secretary [of Health and Human Services]," is
deemed sufficient to preclude an individual from engaging in any gainful
activity.  Under regulations promulgated by the Secretary, 20 CFR 404.1577,
404.1578(a)(1) (1989), a surviving spouse is deemed disabled only if the
spouse suffers from a physical or mental impairment meeting or equaling the
severity of an impairment included in the Secretary's Listing of
Impairments located at Appendix 1 to 20 CFR pt. 404, subpt. P (1989).  If
the surviving spouse's impairment does not meet or equal one of the listed
impairments, the Secretary will not find the spouse disabled; in
particular, the Secretary will not consider whether the spouse's impairment
nonetheless makes the spouse disabled, given the spouse's age, education,
and work experience.
    The Secretary's practice for spouses' disability insurance benefits
thus differs significantly from the regulations for determining whether a
wage earner is entitled to disability insurance benefits.  For wage
earners, the Secretary has established a "five-step sequential evaluation
process for determining whether a person is disabled."  Bowen v. Yuckert,
482 U. S. 137, 140 (1987).  Under that five-step process, even if a wage
earner's impairment does not meet or equal one of the listed impairments,
the wage earner may nonetheless be entitled to disability insurance
benefits if the Secretary determines that his "impairment in fact prevents
him from working."  Sullivan v. Zebley, 493 U. S. ,  (1990).  The Secretary
maintains that the difference between the wage earner regulations and the
surviving spouse regulations is supported by a difference between the two
pertinent statutory definitions of disability.  Compare 42 U. S. C.
423(d)(2)(A) with 423(d)(2)(B).
    Respondent's application for benefits was denied on the ground that her
heart condition did not meet or equal a listed impairment.  After
exhausting administrative remedies, respondent sought judicial review of
the Secretary's decision in the United States District Court for the
District of New Jersey, invoking 205(g) of the Social Security Act, as
amended, 53 Stat. 1370, 42 U. S. C. 405(g) (1982 ed.). {2}  The District
Court sustained the Secretary's conclusion that respondent did not suffer
from an impairment that met or equaled a listed impairment.  See App. to
Pet. for Cert. 16a.  The District Court nonetheless concluded that "the
case must be remanded to the Secretary," id., at 17a, because the record
was "devoid of any findings" regarding respondent's inability to engage in
any gainful activity even though her impairment was not equal to one of the
listed impairments, see ibid.
    The Court of Appeals for the Third Circuit dismissed the Secretary's
appeal for lack of jurisdiction.  869 F. 2d 215 (1989).  The Court of
Appeals relied on its past decisions holding that "remands to
administrative agencies are not ordinarily appealable."  Id., at 217
(citation omitted).  Although the Court of Appeals acknowledged an
exception to that rule for cases "in which an important legal issue is
finally resolved and review of that issue would be foreclosed `as a
practical matter' if an immediate appeal were unavailable," ibid. (citation
omitted), that exception was deemed inapplicable in this case because the
Secretary might persist in refusing benefits even after consideration of
respondent's residual functional capacity on remand, and the District Court
might thereafter order that benefits be granted, thereby providing the
Secretary with an appealable final decision.  Id., at 220.  The Court of
Appeals conceded that the Secretary might not be able to obtain review at a
later point if he concluded on remand that respondent was entitled to
benefits based on her lack of residual functional capacity, but it believed
this argument for immediate appealability to be foreclosed by a prior
decision of the Circuit.  Ibid.  We granted certiorari, 493 U. S.  (1990).

II
    We begin by noting that the issue before us is not the broad question
whether remands to administrative agencies are always immediately
appealable.  There is, of course, a great variety in remands, reflecting in
turn the variety of ways in which agency action may be challenged in the
district courts and the possible outcomes of such challenges. {3}  The
question before us rather is whether orders of the type entered by the
District Court in this case are immediately appealable by the Secretary.
It is necessary therefore to consider precisely what the District Court
held and why it remanded this case to the Secretary.
    Although the District Court sustained the Secretary's conclusion that
respondent did not suffer from an impairment that met or equaled the
severity of a listed impairment, it concluded that the Secretary's ultimate
conclusion that respondent was not disabled could not be sustained because
other medical evidence suggested that respondent might not be able to
engage in any gainful activity. {4}  Considering it "anomalous" that an
impairment actually leaving respondent without the residual functional
capacity to perform any gainful activity could be insufficient to warrant
benefits just because it was not equal to one of the listed impairments,
the District Court directed the Secretary "to inquire whether [respondent]
may or may not engage in any gainful activity, as contemplated by the Act."
App. to Pet. for Cert. 18a.  The District Court's order thus essentially
invalidated, as inconsistent with the Social Security Act, the Secretary's
regulations restricting spouses' disability insurance benefits to those
claimants who can show that they have impairments with "specific clinical
findings that are the same as . . . or are medically equivalent to" one of
the listed impairments, 20 CFR 404.1578(a)(1) (1989).  Cf. Heckler v.
Campbell, 461 U. S. 458, 465-466 (1983).  The District Court stated that it
was "remand[ing]" the case to the Secretary because the record contained no
findings about the functional impact of respondent's impairment; in effect
it ordered the Secretary to address respondent's ailment without regard for
the regulations that would have precluded such consideration.  The District
Court's order thus reversed the Secretary's conclusion that respondent was
not disabled and remanded for further consideration of respondent's medical
condition.
    Once the nature of the District Court's action is made clear, it
becomes clear how this action fits into the structure of 405(g).  The first
sentence of 405(g) provides that an individual denied benefits by a final
decision of the Secretary may obtain judicial review of that decision by
filing "a civil action" in federal district court.  The use of the term "a
civil action" suggests that at least in the context of 405(g), each final
decision of the Secretary will be reviewable by a separate piece of
litigation. {5}  The fourth and eighth sentences of 405(g) buttress this
conclusion.  The fourth sentence states that in such a civil action, the
district court shall have the power to enter "a judgment affirming,
modifying, or reversing the decision of the Secretary, with or without
remanding the cause for a rehearing."  (Emphasis added.)  This sentence
describes the action that the District Court actually took in this case.
In particular, although the fourth sentence clearly foresees the
possibility that a district court may remand a cause to the Secretary for
rehearing (as the District Court did here), nonetheless such a remand order
is a "judgment" in the terminology of 405(g).  What happened in this case
is that the District Court entered "a judgment . . . reversing the decision
of the Secretary, with . . . remanding the cause for a rehearing."  The
District Court's remand order was unquestionably a "judgment," as it
terminated the civil action challenging the Secretary's final determination
that respondent was not entitled to benefits, set aside that determination,
and finally decided that the Secretary could not follow his own regulations
in considering the disability issue.  Furthermore, should the Secretary on
remand undertake the inquiry mandated by the District Court and award
benefits, there would be grave doubt, as the Court of Appeals recognized,
whether he could appeal his own order.  Thus it is that the eighth sentence
of 405(g) provides that "[t]he judgment of the court shall be final except
that it shall be subject to review in the same manner as a judgment in
other civil actions."  (Emphasis added.)
    Respondent makes several arguments countering this construction of
405(g) and of the District Court's order, none of which persuades us.
First, respondent argues that the remand in this case was ordered not
pursuant to the fourth sentence of 405(g), but under the sixth sentence of
that section, which states in pertinent part that the District Court may
"at any time order additional evidence to be taken before the Secretary,
but only 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 in a prior proceeding."  Respondent points out that the District
Court stated that it was ordering a remand because the evidence on the
record was insufficient to support the Secretary's conclusion and that
further factfinding regarding respondent's ailment was necessary.  We do
not agree with respondent that the District Court's action in this case was
a "sixth-sentence remand."  The sixth sentence of 405(g) plainly describes
an entirely different kind of remand, appropriate when the district court
learns of evidence not in existence or available to the claimant at the
time of the administrative proceeding that might have changed the outcome
of that proceeding. {6}
    For the same reason, we reject respondent's argument, based on the
seventh sentence of 405(g), that the district court may enter an appealable
final judgment upon reviewing the Secretary's postremand "additional or
modified findings of fact and decision."  The postremand review conducted
by the District Court under the seventh sentence refers only to cases that
were previously remanded under the sixth sentence.  The seventh sentence
states that the district court may review "[s]uch additional or modified
findings of fact," a reference to the second half of the sixth sentence of
405(g), which requires that "the Secretary shall, after the case is
remanded, and after hearing such additional evidence if so ordered, modify
or affirm his findings of fact or his decision, or both, and shall file
with the court any such additional and modified findings of fact and
decision . . . ."  The phrase "such additional evidence" refers in turn to
the "additional evidence" mentioned in the first half of the sixth sentence
that the district court may order the Secretary to take in a sixth-sentence
remand.  See supra, at .  But as the first half of the sixth sentence makes
clear, the taking of this additional evidence may be ordered only upon a
showing that there is material new evidence.  The postremand judicial
review contemplated by the seventh sentence of 405(g) does not fit the kind
of remand ordered by the District Court in this case.
    Respondent also argues that the eighth sentence of 405(g), providing
that the judgment of the district court "shall be final except that it
shall be subject to review in the same manner as a judgment in other civil
actions," does not compel the conclusion that a judgment entered pursuant
to the fourth sentence is immediately appealable.  In respondent's view,
Congress used the the term "final" in the eighth sentence only to make
clear that a court's decision reviewing agency action could operate as law
of the case and res judicata.  Cf. City of Tacoma v. Taxpayers of Tacoma,
357 U. S. 320, 336 (1958).  But even if it is true that Congress used the
term "final" to mean "conclusively decided," this reading does not preclude
the construction of "final" to include "appealable," a meaning with which
"final" is usually coupled.  Nor does respondent consider the significance
of Congress' use of the term "judgment" to describe the action taken by the
District Court in this case. {7}  Although respondent argues that the words
"final decisions," as used in 28 U. S. C. 1291, encompass no more than what
was meant by the terms "final judgments and decrees" in the predecessor
statute to 1291, respondent recognizes that "final judgments" are at the
core of matters appealable under 1291, and respondent does not contest the
power of Congress to define a class of orders as "final judgments" that by
inference would be appealable under 1291.  Cf. Sears, Roebuck & Co. v.
Mackey, 351 U. S. 427, 434 (1956).  This is what Congress has done in the
fourth sentence of 405(g). {8}
    More generally, respondent argues that a power in the district court to
remand to an agency is always incident to the power to review agency action
and that 405(g) only expanded the district courts' equitable powers;
therefore, she insists, it is improper to construe 405(g) as a limit on the
district courts' power to remand.  This argument misapprehends what
Congress sought to accomplish in 405(g).  The fourth sentence of 405(g)
does not "limit" the district courts' authority to remand.  Rather, the
fourth sentence directs the entry of a final, appealable judgment even
though that judgment may be accompanied by a remand order.  The fourth
sentence does not require the district court to choose between entering a
final judgment and remanding; to the contrary, it specifically provides
that a district court may enter judgment "with or without remanding the
cause for a rehearing."
    Finally, respondent argues that we already decided last Term, in
Sullivan v. Hudson, 490 U. S.  (1989), that a remand order of the kind
entered in this case is not appealable as a final decision.  Although there
is language in Hudson supporting respondent's interpretation of that case,
we do not find that language sufficient to sustain respondent's contentions
here.  In Hudson, we held that under the Equal Access to Justice Act
(EAJA), 28 U. S. C. 2412(d)(1)(A), a federal court may award a Social
Security claimant attorney's fees for representation during administrative
proceedings held pursuant to a district court order remanding the action to
the Secretary.  We were concerned there with interpreting the term "any
civil action" in the EAJA, {9} not with deciding whether a remand order
could be appealed as a "final decision" under 28 U. S. C. 1291.  We noted
in Hudson that the language of 2412(d)(1)(A) must be construed with
reference to the purpose of the EAJA and the realities of litigation
against the Government.  The purpose of the EAJA was to counterbalance the
financial disincentives to vindicating rights against the Government
through litigation; given this purpose, we could not believe that Congress
would "throw the Social Security claimant a lifeline that it knew was a
foot short" by denying her attorney's fees for the mandatory proceedings on
remand.  Hudson, supra, at .  We also recognized that even if a claimant
had obtained a remand from the district court, she would not be a
"prevailing party" for purposes of the EAJA until the result of the
administrative proceedings held on remand was known.  490 U. S., at .  We
therefore concluded that for purposes of the EAJA, the administrative
proceedings on remand "should be considered part and parcel of the action
for which fees may be awarded."  Id., at .  We did not say that proceedings
on remand to an agency are "part and parcel" of a civil action in federal
district court for all purposes, and we decline to do so today.
Accordingly, the judgment of the Court of Appeals is reversed, and the case
is remanded for further proceedings consistent with this opinion.
It is so ordered.









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1
    Title 28 U. S. C. 1291 provides that "[t]he courts of appeals . . .
shall have jurisdiction of appeals from all final decisions of the district
courts . . . except where a direct review may be had in the Supreme
Court."

2
    Title 42 U. S. C. 405(g) (1982 ed.) provides:

    "Any individual, after any final decision of the Secretary made after a
hearing to which he was a party, irrespective of the amount in controversy,
may obtain a review of such decision by a civil action commenced within
sixty days after the mailing to him of notice of such decision or within
such further time as the Secretary may allow.  Such action shall be brought
in the district court of the United States for the judicial district in
which the plaintiff resides, or has his principal place of business, or, if
he does not reside or have his principal place of business within any such
judicial district, in the United States District Court for the District of
Columbia.  As part of his answer the Secretary shall file a certified copy
of the transcript of the record including the evidence upon which the
findings and decision complained of are based.  The court shall have power
to enter, upon the pleadings and transcript of the record, a judgment
affirming, modifying, or reversing the decision of the Secretary, with or
without remanding the cause for a rehearing.  The findings of the Secretary
as to any fact, if supported by substantial evidence, shall be conclusive,
and where a claim has been denied by the Secretary or a decision is
rendered under subsection (b) of this section which is adverse to an
individual who was a party to the hearing before the Secretary, because of
failure of the claimant or such individual to submit proof in conformity
with any regulation prescribed under subsection (a) of this section, the
court shall review only the question of conformity with such regulations
and the validity of such regulations.  The court may, on motion of the
Secretary made for good cause shown before he files his answer, remand the
case to the Secretary for further action by the Secretary, and it may at
any time order additional evidence to be taken before the Secretary, but
only 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 in a prior proceeding; and the Secretary shall, after the case is
remanded, and after hearing such additional evidence if so ordered, modify
or affirm his findings of fact or his decision, or both, and shall file
with the court any such additional and modified findings of fact and
decision, and a transcript of the additional record and testimony upon
which his action in modifying or affirming was based.  Such additional or
modified findings of fact and decision shall be reviewable only to the
extent provided for review of the original findings of fact and decision.
The judgment of the court shall be final except that it shall be subject to
review in the same manner as a judgment in other civil actions.  Any action
instituted in accordance with this subsection shall survive notwithstanding
any change in the person occupying the office of Secretary or any vacancy
in such office."

3
    For example, a district court may on occasion order a remand to an
agency even though the district court action was filed by the agency, not
someone seeking judicial review, e. g., United States v. Alcon
Laboratories, 636 F. 2d 876 (CA1), cert. denied, 451 U. S. 1017 (1981).  In
other cases the district court may order a remand to the agency but the
person seeking judicial review may seek to appeal on the ground that
broader relief should have been granted by the district court, e. g., Bohms
v. Gardner, 381 F. 2d 283 (CA8 1967), cert. denied, 390 U. S. 964 (1968).
None of these situations is presented in this case, and we express no
opinion about appealability in those circumstances.

4
    Specifically, the District Court noted that an Administrative Law Judge
"found that the `medical findings shown in the medical evidence of record
establish the existence of mitral valve prolapse,"' App. to Pet. for Cert.
17a, which does not meet or equal one of the listed impairments but might,
in the District Court's view, prevent respondent from engaging in any
gainful activity, ibid.

5
    Neither party suggests that the Secretary's decision denying respondent
benefits without considering her mitral valve prolapse was not a "final
decision of the Secretary" within the meaning of 405(g).

6
    See, e. g., Caulder v. Bowen, 791 F. 2d 872 (CA11 1986); Borders v.
Heckler, 777 F. 2d 954, 955 (CA4 1985); Newhouse v. Heckler, 753 F. 2d 283,
287 (CA3 1985); Booz v. Secretary of Health and Human Services, 734 F. 2d
1378, 1381 (CA9 1984); Dorsey v. Heckler, 702 F. 2d 597, 604-605 (CA5
1983); Cagle v. Califano, 638 F. 2d 219, 221 (CA10 1981).  Although all the
Circuits recognize that new evidence must be "material" to warrant a
sixth-sentence remand, it is not clear whether the Circuits have
interpreted the requirement of materiality in the same way.  See Dorsey,
supra, at 605, n. 9 (criticizing "stricter position" of Fourth and Tenth
Circuits); Godsey v. Bowen, 832 F. 2d 443, 444 (CA7 1987) (expressing
skepticism about existence of conflict); Borders, supra, at 956 (also
skeptical).  We express no opinion on the proper definition of materiality
in this context.

7
    It is true, as respondent maintains, that the District Court did not
caption its order as a "judgment," much less a "final judgment."  The label
used by the District Court of course cannot control the order's
appealability in this case, any more than it could when a District Court
labeled a non- appealable interlocutory order as a "final judgment."  See
Liberty Mutual Ins. Co. v. Wetzel, 424 U. S. 737 (1976).

8
    Respondent also makes two arguments based on subsequent legislative
history to counter the conclusion that Congress intended orders entered
under the fourth sentence of 405(g) to be appealable final judgments.
First, she relies on a committee print prepared by the Social Security
Subcommittee of the House Ways and Means Committee which, in summarizing
amendments to the Social Security Act, stated that under prior law, a
district court could remand a case to the Secretary on its own motion and
that the judgment of the district court would be final after the Secretary
filed any modified findings of fact and decision with the court, and that
no change had been made by the amendments.  See Subcommittee on Social
Security of the House Committee on Ways and Means, The Social Security
Amendments of 1977: Brief Summary of Major Provisions and Detailed
Comparison With Prior Law, WMCP No. 95-72, p. 26 (Comm. Print 1978) (Brief
Summary).  The committee print's observations are entirely consistent with
the construction we have placed on remands ordered under the sixth sentence
of 405(g).  Moreover, leaving aside all the usual difficulties inherent in
relying on subsequent legislative history, see, e. g., United States v.
Mine Workers, 330 U. S. 258, 281-282 (1947), we note that the print
specifically warned that it was prepared by the subcommittee staff for
informational purposes only and was not considered or approved by the
subcommittee, and that it was designed not to be a section-by-section
analysis of the amendments but only a "narrative synopsis."  Brief Summary,
at I, V.  We therefore cannot assign this committee print any significant
weight.
    Second, respondent relies on a House Judiciary Report on amendments to
the Equal Access to Justice Act (EAJA), stating that a district court's
remand decision under 405(g) is not a "final judgment."  H. R. Rep. No.
99-120, p. 19 (1985).  Again, we cannot conclude that this subsequent
legislative history overthrows the language of 405(g).  In the first place,
this part of this particular committee report concerned the proper time
period for filing a petition for attorney's fees under EAJA, not
appealability.  Second, the committee relied in particular on Guthrie v.
Schweiker, 718 F. 2d 104 (CA4 1983), for the proposition that a remand
order is not a final judgment, but Guthrie also concerned the time for
filing an attorney's fee petition, and it is far from clear that Guthrie
did not involve a sixth- sentence remand.  Guthrie, in turn, relied on
Gilcrist v. Schweiker, 645 F. 2d 818, 819 (CA9 1981), which, quite unlike
the present case, involved an appeal from a district court remand order
that did "no more than order clarification of the administrative
decision."

9
    Title 28 U. S. C. 2412(d)(1)(A) provides in pertinent part:

    "Except as otherwise specifically provided by statute, a court shall
award to a prevailing party other than the United States fees and other
expenses . . . incurred by that party in any civil action . . . including
proceedings for judicial review of agency action, brought by or against the
United States in any court having jurisdiction of that action, unless the
court finds that the position of the United States was substantially
justified or that special circumstances make an award unjust."