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Subject: 90-5538 -- OPINION, MELKONYAN v. SULLIVAN




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. 90-5538


ZAKHAR MELKONYAN, PETITIONER v. LOUIS
W. SULLIVAN, SECRETARY OF HEALTH
AND HUMAN SERVICES
on writ of certiorari to the united states court of appeals for the ninth
circuit [June 10, 1991]


    Justice O'Connor delivered the opinion of the Court.
    A party that prevails against the United States in a civil action is
entitled, in certain circumstances, to an award of attorney's fees, court
costs, and other expenses.  Equal Access to Justice Act (EAJA), 28 U. S. C.
MDRV 2412.  Among other requirements, the prevailing party must submit to
the court an application for fees and expenses "within thirty days of final
judgment in the action."  MDRV 2412(d)(1)(B).  This case requires us to
decide whether an administrative decision rendered following a remand from
the District Court is a "final judgment" within the meaning of EAJA.
I
    In May 1982, petitioner Zakhar Melkonyan filed an application for
disability benefits under the Supplemental Security Income (SSI) program
established by Title XVI of the Social Security Act, 42 U. S. C. MDRV 1381
et seq.  Following a hearing, an Administrative Law Judge (ALJ) concluded
that petitioner was not disabled within the meaning of the Act.  The
Appeals Council denied review of the ALJ's decision.  In June 1984,
petitioner timely filed a complaint in the United States District Court for
the Central District of California seeking judicial review pursuant to 42
U. S. C. MDRV 1383(c)(3), which incorporates the review provisions of 42 U.
S. C. MDRV 405(g).
    On May 30, 1984, shortly before filing the complaint, petitioner filed
a second application for SSI disability benefits accompanied by new
evidence of disability.  In August 1984, petitioner's second application
was approved as of the date it was filed.  He then sought summary judgment
in his action to review the administrative decision denying his first
application for benefits.  The Secretary cross-filed for summary judgment.
    While the summary judgment motions were pending, the Secretary
requested that the case be remanded to the Appeals Council so the first
application could be reconsidered in light of the new evidence.  Petitioner
initially opposed the Secretary's remand request, arguing that evidence
already in the record amply established his disability.  Three months
later, however, citing failing health and the prospect of increased medical
expenses, petitioner moved the court to "either issue [the decision] or
remand the cause to the Secretary."  App. 9-10.  In response, on April 3,
1985, the District Court entered a "judgment" which read in its entirety:
    "Defendant's motion to remand, concurred in by plaintiff, is granted.
The matter is remanded to the Secretary for all further proceedings."  App.
11.
    One month after the remand the Appeals Council vacated the ALJ's prior
decision and found petitioner disabled as of the date of his original SSI
application.  That decision granted petitioner all the relief he had
initially requested.
    More than a year later, petitioner applied to the District Court for
attorney's fees under EAJA.  The Magistrate recommended that the fee
application be denied, concluding that the Secretary's decision to deny the
first application was "substantially justified" at the time because the
original record did not establish that petitioner was disabled.  App.
20-21.  The District Court agreed and denied the fee request.
    The Court of Appeals for the Ninth Circuit vacated the District Court's
judgment.  It agreed that petitioner was not eligible for attorney's fees
under EAJA, but for a different reason.  Melkonyan v. Heckler, 895 F. 2d
556 (1990).  The Court of Appeals noted that EAJA requires an application
for fees to be filed within 30 days of the "final judgment in the action,"
a term defined in the statute as a "judgment that is final and not
appealable.' "  Id., at 557 (citing 28 U. S. C. MDRV 2412(d)(2)(G)).  In
the court's view, its task was to determine when that "final and not
appealable" judgment was rendered.  895 F. 2d, at 557..
    The Court of Appeals recognized that the District Court's order
remanding the case to the Secretary was not a "final judgment" because both
parties anticipated further administrative proceedings.  Id., at 557-558.
On remand, the Appeals Council reversed itself and held for petitioner;
having won all he had asked for, there was no reason to return to the
District Court.  Under those circumstances the Court of Appeals concluded
that the Appeals Council's decision to award benefits was, in effect, a
"final judgment" under EAJA, thereby commencing the 30-day period for
filing the fee application.  Id., at 558-559.  Because petitioner waited
more than a year after the Appeals Council's decision, his application was
untimely.  Id., at 559.  We granted certiorari, 498 U. S. --- (1991), and
now vacate the judgment of the Court of Appeals.
II
    The language of the relevant EAJA statute, MDRV 2412, provides:
    "(A) 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 (other
than cases sounding in tort), 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.
    "(B) A party seeking an award of fees and other expenses shall, within
thirty days of final judgment in the action, submit to the court an
application for fees and other expenses which shows that the party is a
prevailing party and is eligible to receive an award under this subsection
. . . ."  42 U. S. C. 15 2412(d)(1)(A), (B) (emphasis added).
    Petitioner argues that this provision is most naturally read to mean
that it is the court before which the civil action is pending that must
render the "final judgment" that starts the running of the 30-day EAJA
filing period.  Brief for Petitioner 13.  We agree.  As the highlighted
language indicates, subsections (d)(1)(A) and (d)(1)(B) work in tandem.
Subsection (d)(1)(A) authorizes the awarding of fees to parties that
prevail against the United States in nontort civil actions, subject to
qualifications not pertinent here.  Subsection (d)(1)(B) explains what the
prevailing party must do to secure the fee award.  The requirement that the
fee application be filed within 30 days of "final judgment in the action"
plainly refers back to the "civil action . . . in any court" in (d)(1)(A).
The plain language makes clear that a "final judgment" under MDRV 2412 can
only be the judgment of a court of law.  This reading is reinforced by the
contrast between MDRV 2412 and 5 U. S. C. MDRV 504(a).  Section 504 was
enacted at the same time as MDRV 2412, and is the only part of the EAJA
that allows fees and expenses for administrative proceedings conducted
prior to the filing of a civil action.  The pertinent language of MDRV
504(a)(2) largely mirrors that of MDRV 2412(d)(1)(B), with one notable
exception: it states that a "party seeking an award of fees and other
expenses shall, within thirty days of a final disposition in the adversary
adjudication," file an application for fees.  5 U. S. C. MDRV 504(a)(2).
Clearly Congress knew how to distinguish between a "final judgment in [an]
action" and a "final disposition in [an] adversary adjudication."  One is
rendered by a court; the other includes adjudication by an administrative
agency.
    The Secretary's sole argument to the contrary rests on the 1985
amendments to EAJA, which added a definition of "final judgment" to MDRV
2412.  Traditionally, a "final judgment" is one that is final and
appealable.  See Fed. Rule Civ. Proc. 54(a) (" `Judgment' as used in these
rules includes a decree and any order from which an appeal lies"); Sullivan
v. Finkelstein, 496 U. S. ---, --- (slip op. 10) (1990) (" `final
judgments' are at the core of matters appealable under MDRV 1291").  Under
MDRV 2412 as amended, however, a "final judgment" is one that is "final and
not appealable."  28 U. S. C. MDRV 2412(d)(2)(G) (emphasis added).  In the
Secretary's view, "[t]his significant departure from the usual
characteristi[c] of a `judgment' entered by a court" dictates a different
understanding of how the phrase "final judgment" is used in MDRV
2412(d)(1)(B).  Brief for Respondent 20.  The Secretary argues that under
the revised statute, a "final judgment" includes not only judgments
rendered by a court, but also decisions made by administrative agencies.
Ibid.
    We reject this argument.  Section 2412(d)(1)(B) does not speak merely
of a "judgment," it speaks of a "final judgment in the action."  As we have
explained, the "action" referred to in subsection (d)(1)(B) is a "civil
action . . . in any court" under subsection (d)(1)(A).  The Secretary's
suggested interpretation of "final judgment" does not alter this
unambiguous requirement of judgment by a court.
    As for why Congress added the unusual definition of "final judgment,"
the answer is clear.  "The definition . . . was added in 1985 to resolve a
conflict in the lower courts on the question whether a `judgment' was to be
regarded as `final' for EAJA purposes when it was entered, or only when the
period for taking an appeal had lapsed."  Brief for Respondent 20 (footnote
omitted).  The Ninth Circuit had held that the 30-day EAJA filing period
began to run when the District Court entered judgment.  McQuiston v. Marsh,
707 F. 2d 1082, 1085 (1983).  The Seventh Circuit rejected this view,
holding that the EAJA filing period should be deemed to begin only after
the time for taking an appeal from the District Court judgment had expired.
McDonald v. Schweiker, 726 F. 2d 311, 314 (1983).  Accord, Massachusetts
Union of Public Housing Tenants, Inc. v. Pierce, 244 U. S. App. D. C. 34,
36, 755 F. 2d 177, 179 (1985).
    Congress responded to this split in the federal courts by explicitly
adopting and ratifying the McDonald approach.  S. Rep. No. 98-586, p. 16
(1984) ("The Committee believes that the interpretation of the court in
[McDonald] is the correct one").  See also H. R. Rep. No. 98-992, p. 14
(1984) ("The term `final judgment' has been clarified to mean a judgment
the time to appeal which has expired for all parties"); H. R. Rep. No.
99-120, p. 18 (1985).  There simply is no evidence to support the argument
the Secretary now advances -- that, in defining "final judgment" so as to
resolve an existing problem, Congress also intended, sub silentio, to alter
the meaning of the term to include a final agency decision.  We conclude
that, notwithstanding the 1985 amendment, Congress' use of "judgment" in 28
U. S. C. MDRV 2412 refers to judgments entered by a court of law, and does
not encompass decisions rendered by an administrative agency.  Accordingly,
we hold that a "final judgment" for purposes of 28 U. S. C. MDRV
2412(d)(1)(B) means a judgment rendered by a court that terminates the
civil action for which EAJA fees may be received.  The 30-day EAJA clock
begins to run after the time to appeal that "final judgment" has expired.
    Our decision in Sullivan v. Hudson, 490 U. S. 877 (1989), is not to the
contrary.  The issue in Hudson was whether, under MDRV 2412(d), a "civil
action" could include administrative proceedings so that a claimant could
receive attorney's fees for work done at the administrative level following
a remand by the District Court.  We explained that certain administrative
proceedings are "so intimately connected with judicial proceedings as to be
considered part of the `civil action' for purposes of a fee award."  Id.,
at 892.  We defined the narrow class of qualifying administrative
proceedings to be those "where `a suit has been brought in a court,' and
where `a formal complaint within the jurisdiction of a court of law'
remains pending and depends for its resolution upon the outcome of the
administrative proceedings."  Ibid (emphasis added).  Hudson thus stands
for the proposition that in those cases where the district court retains
jurisdiction of the civil action and contemplates entering a final judgment
following the completion of administrative proceedings, a claimant may
collect EAJA fees for work done at the administrative level.  Ibid.  "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 . . . ."
Sullivan v. Finkelstein, supra, at --- (slip op. 12).
III
    Having decided that EAJA requires a "final judgment" entered by a
court, it is obvious that no "final judgment" was entered in this case
before petitioner initiated his appeal.  Petitioner filed a civil action in
District Court under 42 U. S. C. MDRV 405(g), seeking review of the
Secretary's decision that he was not entitled to disability benefits.
Without ruling on the correctness of the Secretary's decision, the District
Court remanded the case for further administrative proceedings.  On remand,
the Appeals Council awarded petitioner the disability benefits he sought.
Neither petitioner nor the Secretary returned to District Court for entry
of a final judgment.  The question we must decide now is whether either
party is entitled to do so.
    The answer depends on what kind of remand the District Court
contemplated.  In Finkelstein, we examined closely the language of MDRV
405(g) and identified two kinds of remands under that statute: (1) remands
pursuant to the fourth sentence, and (2) remands pursuant to the sixth
sentence.  See 496 U. S., at --- (slip op. 5-9).  The fourth sentence of
MDRV 405(g) authorizes a court to enter "a judgment affirming, modifying,
or reversing the decision of the Secretary, with or without remanding the
cause for a rehearing."  The parties agree that the remand order in this
case was not entered pursuant to sentence four, as the District Court did
not affirm, modify, or reverse the Secretary's decision.  We concur.  The
District Court did not make any substantive ruling; it merely returned the
case to the agency for disposition, noting that both parties agreed to this
course.
    The sixth sentence of MDRV 405(g), as we explained in Finkel stein,
"describes an entirely different kind of remand."  Id., at --- (slip op.
8).  The District Court does not affirm, modify, or reverse the Secretary's
decision; it does not rule in any way as to the correctness of the
administrative determination.  Rather, the court remands because new
evidence has come to light that was not available to the claimant at the
time of the administrative proceeding and that evidence might have changed
the outcome of the prior proceeding.  Ibid.  The statute provides that
following a sentence six remand, the Secretary must return to the District
Court to "file with the court any such additional or 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."  42 U. S. C.
MDRV 405(g). {1}
    Petitioner argues, plausibly, that the court contemplated a sentence
six remand.  Indeed, it is undisputed that it was consideration of
later-acquired evidence that led the Appeals Council ultimately to reverse
its earlier decision and declare petitioner eligible for benefits from the
date of his original application.  Petitioner further argues that this must
have been a sentence six remand because MDRV 405(g) authorizes only two
kinds of remands -- those pursuant to sentence four and those pursuant to
sentence six -- and the Secretary concedes that this was not a sentence
four remand.
    The Secretary maintains that this was not a sentence six remand.  While
acknowledging that the remand request was prompted by the discovery of new
evidence of disability, see Brief for Respondent 27-28, the Secretary
observes correctly that the sixth sentence of MDRV 405(g) requires a
showing of "good cause" for the failure to present the additional evidence
in the prior proceeding and that the District Court did not rule explicitly
that such a showing had been made.  The Secretary also notes that the
District Court did not manifest any intent to retain jurisdiction, as would
be the case under sentence six, but rather remanded to the agency "for all
further proceedings."
    The Secretary also disputes petitioner's assumption that

sentences four and six set forth the only kinds of remands that

are permitted under MDRV 405(g), arguing that the District Court has
inherent authority to enter other types of remand orders.  Id., at 28-29,
n. 23.  On this point, we think petitioner has the better of the argument.
As mentioned, in Finkelstein we analyzed MDRV 405(g) sentence-by-sentence
and identified two kinds of possible remands under the statute.  While we
did not state explicitly at that time that these were the only kinds of
remands permitted under the statute, we do so today.  Under sentence four,
a district court may remand in conjunction with a judgment affirming,
modifying, or reversing the Secretary's decision.  Under sentence six, the
district court may remand in light of additional evidence without making
any substantive ruling as to the correctness of the Secretary's decision,
but only if the claimant shows good cause for failing to present the
evidence earlier. {2}  Congress' explicit delineation in MDRV 405(g)
regarding the circumstances under which remands are authorized leads us to
conclude that it intended to limit the district court's authority to enter
remand orders to these two types.  Cf. United States v. Smith, 499 U. S.
--- (1991) (expressly enumerated exceptions presumed to be exclusive).
    This reading of the statute is dictated by the plain language of MDRV
405(g) and is supported by the legislative history.  In amending the sixth
sentence of MDRV 405(g) in 1980, Congress made it unmistakably clear that
it intended to limit the power of District Courts to order remands for "new
evidence" in Social Security cases.  Pub. L. 96-265, MDRV 307, 94 Stat.
458.  The Senate Report accompanying the amendments explained:
"[U]nder existing law the court itself, on its own motion or on motion of
the claimant, has discretionary authority `for good cause' to remand the
case back to the ALJ.  It would appear that, although many of these court
remands are justified, some remands are undertaken because the judge
disagrees with the outcome of the case even though he would have to sustain
it under the `substantial evidence rule.'  Moreover, the number of these
court remands seems to be increasing.
    . . . . .


The bill would continue the provision of present law which gives the court
discretionary authority to remand cases to the Secretary, but adds the
requirement that remand for the purpose of taking new evidence be limited
to cases in which there is a showing that there was good cause for failure
to incorporate it into the record in a prior proceeding."  S. Rep. No.
96-408, pp. 58-59 (1979) (emphasis added).  See also H. R. Rep. No. 96100,
p. 13 (1979) (same).
    Congressman Pickle, one of the Floor managers of the bill, echoed this
explanation when he noted in a Floor statement that with the amendment "we
have tried to speed up the judicial process so that these cases would not
just go on and on and on.  The court could remand [them] back down to the
ALJ without cause or other reason which was weakening the appeal process at
that level."  125 Cong. Rec. 23383 (1979).
    The amendment to sentence six, of course, was not intended to limit a
District Court's ability to order remands under sentence four.  The House
Report explains that "[t]his language [amending sentence six] is not to be
construed as a limitation of judicial remands currently recognized under
the law in cases which the Secretary has failed to provide a full and fair
hearing, to make explicit findings, or to have correctly apply [sic] the
law and regulations."  H. R. Rep. No. 96-100, supra, at 13.  Thus, under
sentence four, a District Court may still remand in conjunction with a
judgment reversing in part the Secretary's decision.
    It is evident from these passages that Congress believed courts were
often remanding Social Security cases without good reason.  While normally
courts have inherent power, among other things, to remand cases, see United
States v. Jones, 336 U. S. 641, 671 (1949), both the structure of MDRV
405(g), as amended, and the accompanying legislative history show Congress'
clear intent to limit courts to two kinds of remands in these cases.  Cf.
Chambers v. Nasco, Inc., 500 U. S. --- (1991) (finding no congressional
intent to limit a court's inherent authority to impose sanctions).
    In light of the foregoing, we conclude that in MDRV 405(g) actions,
remand orders must either accompany a final judgment affirming, modifying,
or reversing the administrative decision in accordance with sentence four,
or conform with the requirements outlined by Congress in sentence six.
Construing remand orders in this manner harmonizes the remand provisions of
MDRV 405(g) with the EAJA requirement that a "final judgment" be entered in
the civil action in order to trigger the EAJA filing period.  28 U. S. C.
MDRV 2412(d)(1)(B).  In sentence four cases, the filing period begins after
the final judgment ("affirming, modifying, or reversing") is entered by the
court and the appeal period has run, so that the judgment is no longer
appealable.  See MDRV 2412(c)(2)(G).  In sentence six cases, the filing
period does not begin until after the postremand proceedings are completed,
the Secretary returns to court, the court enters a final judgment, and the
appeal period runs.
    Although we agree with petitioner that the District Court's remand
authority is confined to those circumstances specifically defined in MDRV
405(g), we cannot state with certainty that the remand in this case was, as
petitioner contends, a sentence six remand.  As the Secretary points out,
the District Court did not make a finding that "good cause" had been shown,
nor did the court seem to anticipate that the parties would return to court
following the administrative proceedings.  Indeed, it may be that the court
treated the joint request for remand as a voluntary dismissal under Fed.
Rule Civ. Proc. 41(a), although the parties did not file a signed
stipulation, as required by the Rule.  Because the record before us does
not clearly indicate what the District Court intended by its disposition,
we vacate the judgment and remand the matter to enable the District Court
to clarify its order.  If petitioner is correct that the court remanded the
case under sentence six, the Secretary must return to District Court, at
which time the court will enter a final judgment.  Petitioner will be
entitled to EAJA fees unless the Secretary's initial position was
substantially justified, a question which was not addressed by the Court of
Appeals.  If, on the other hand, this was not a sentence six remand, it may
be that petitioner is not entitled to EAJA fees at all.  For example, if
the court's order was, in effect, a dismissal under Fed. Rule Civ. Proc.
41(a), the District Court's jurisdiction over the case would have ended at
that point, and petitioner would not have been a prevailing party "in [a]
civil action."  28 U. S. C. MDRV 2412(d)(1)(A).  Under those circumstances,
the Secretary would not return to the District Court and petitioner would
not be eligible to receive EAJA fees.
IV
    At oral argument the parties discussed the timeliness of petitioner's
fee application.  EAJA requires prevailing parties seeking an award of fees
to file with the court, "within thirty days of final judgment in the
action," an application for fees and other expenses.  MDRV 2412(d)(1)(B)
(emphasis added).  Petitioner claims that this language permits him to
apply for fees at any time up to 30 days after entry of judgment, and even
before judgment is entered, as long as he has achieved prevailing party
status.  Tr. of Oral Arg. 16-18.
    This case is not an appropriate vehicle for resolving the issue.  If
petitioner is correct that this was a sentence six remand, the District
Court may determine that the application he has already filed is
sufficient.  Alternatively, petitioner can easily reapply for EAJA fees
following the District Court's entry of a final judgment.  In either case,
petitioner will not be prejudiced by having filed prematurely.  On the
other hand, if this was not a sentence six remand, we have already
explained that petitioner would not be entitled to fees, so the timeliness
of the application will not be an issue.
    The judgment of the Ninth Circuit Court of Appeals is vacated, and the
case is remanded to the Court of Appeals with instructions to remand to the
District Court for further proceedings consistent with this opinion.
It is so ordered.







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1
    Sentence six of MDRV 405(g) provides in full:

"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."
2
    Sentence six also authorizes the District Court to remand on motion by
the Secretary made before the Secretary has filed a response in the action.
That subcategory of sentence six remands is not implicated in this case.