Mastrio v. Sebelius, Secretary of Health and Human Services , 768 F.3d 116 ( 2014 )

13-2529-cv
Mastrio v. Sebelius, Secretary of Health and Human Services
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
_____________________
August Term, 2013
(Argued: April 24, 2014 Decided: September 17, 2014)
Docket No. 13-2529-cv
_____________________
EILEEN MASTRIO, Administrator for EILEEN PRENDERGAST, deceased,
Plaintiff-Appellee,
-v.-
KATHLEEN SEBELIUS, SECRETARY OF HEALTH AND HUMAN SERVICES,
Defendant-Appellant.
_______________________
Before: WALKER, HALL, Circuit Judges, and MURTHA, District Judge. 
_______________________
On appeal from a judgment of the United States District Court for the District of
Connecticut (Arterton, J.) awarding $78,914.54 in attorneys’ fees and costs to Plaintiff-
Appellee under the Equal Access to Justice Act. We hold that the TRO in this case effected
only a return to the status quo and plaintiff was therefore not a prevailing party. We further
hold that the TRO was not a determination on the merits of the Plaintiff’s case. The
judgment is REVERSED.
_______________________
GIL DEFORD, (ALICE BERS, on the brief), Center for Medical Advocacy, Inc.,
Willimantic, Connecticut, for Plaintiff-Appellee.

The Honorable J. Garvan Murtha, of the United States District Court for the District of
Vermont, sitting by designation.
MICHAEL E. ROBINSON, (STUART F. DELERY, Deputy Assistant Attorney
General for the District of Connecticut and MICHAEL JAY SINGER, on the brief),
Civil Division, Office of Immigration Litigation, Washington, D.C. for
DEIRDRE M. DALY, United States Attorney for the District of Connecticut,
New Haven, Connecticut, for Defendant-Appellant.
_______________________
PER CURIAM:
Defendant-Appellant Kathleen Sebelius, the Secretary of Health and Human Services
(“the government”), appeals the May 2, 2013 judgment of the district court awarding
attorneys’ fees and costs in favor of Plaintiff-Appellee Eileen Mastrio, as administrator for
Eileen Prendergast (deceased) (“Plaintiff”).1 Specifically, the government appeals the
determination of the District Court for the District of Connecticut (Arterton, J.) that the
issuance of a temporary restraining order (“TRO”), reinstating Prendergast’s home health
care benefits, conferred on her “prevailing party” status for purposes of the Equal Access to
Justice Act (“EAJA”), 28 U.S.C. § 2412(d). For the reasons that follow, we reverse the
judgment of the district court.
BACKGROUND
Eileen Prendergast (“Prendergast”), now deceased, was suffering from Amyotrophic
Lateral Sclerosis and receiving home health care services under a Medicare Advantage
insurance policy offered by Aetna Life Insurance Company (“Aetna”), when in June 2008,
despite physicians’ signed orders to the contrary, Aetna concluded that her medical
condition had stabilized and thus terminated her home health care benefits. The following
1 Although the district court did not issue a separate order indicating that its May 2, 2013
order was a final judgment, it effectively ended adjudication on the merits of plaintiff’s
attorneys’ fees request, and thus provided jurisdiction for the Secretary’s appeal. See Fed. R.
App. P. 4(a)(7)(B).
2
month, on July 31, 2008, Prendergast brought an action for emergency relief in the district
court to enjoin the government from continuing to deny coverage of her home health care
services under Medicare Part C. The next day, the district court (Nevas, J.) held a TRO
hearing during which it acknowledged the government’s inability to contest the merits at that
time yet expressed its strong view that Prendergast would suffer irreparable harm without
the imposition of the relief sought. The district court further concluded that “it would make
more sense . . . to base the granting of the TRO” on the movant’s ability to identify
“sufficiently serious questions going to the merits, to make them a fair ground for litigation”
as opposed to “a likelihood of success on the merits.” Immediately after the hearing, the
district court issued a TRO enjoining the government until August 18, 2008 from continuing
to deny coverage of Prendergast’s home health care services, on the grounds that she “will
suffer irreparable harm if she continues to be deprived of the home health care coverage”
and that she had shown “sufficiently serious questions going to the merits to make them a
fair ground for litigation.” That order also stated:
[T]he skilled nursing care available through the home health services
authorized by defendant’s Medicare Part C program is medically
reasonable and necessary and . . . she is eligible for that care. Her eligibility
is demonstrated both because the Secretary is incorrect to view her
condition as stable and because the strict [stability] standard applied by the
Secretary is contrary to Medicare policy and, in judging her need for skilled
nursing care for her unique situation, it is apparent, as her doctors have
shown, that she needs skilled nursing care.
JA 38-39.2 As a result, the government reinstated Prendergast’s benefits and later extended
her coverage through September 4, 2008.
2 The actual order mistakenly used the word “liability” instead of “stability,” but the parties
agree that “stability” was intended.
3
As Prendergast’s physical condition continued to decline, she moved on August 22
for an extension of the TRO and for a preliminary injunction. The government agreed to an
extension of coverage until September 18, and the hearing scheduled for September 4
concerning a pending motion for extension of the TRO was removed from the district
court’s calendar. The government then filed a motion to dismiss the case on September 2.
On September 12, prior to the preliminary injunction hearing scheduled for that date, the
parties met with Judge Nevas, and the government agreed to extend coverage until October
10, 2008. The hearing on the preliminary injunction motion, therefore, was also removed
from the court’s calendar.
During the following month, more discussions between the parties led to an
indefinite extension of coverage. Although there was no formal, written, or binding
settlement, an October 17 e-mail “report” written by one of Prendergast’s attorneys reflects
that, as agreed by the parties, Prendergast found a doctor at Aetna who was willing to
continue to authorize the home health care services. The email also thanked the Assistant
U.S. Attorney for “all [his] efforts in helping us reach this settlement.” Dist. Dkt. No. 55.
As a result of the continuation of coverage, the pending motions were temporarily set aside.
The Joint Statement of Counsel, filed at the district court’s direction on December 30, also
summarized an agreement that Prendergast’s care would continue. Finally, during a January
13, 2009 status conference, the “[p]arties and court agreed to postpone ruling on [the]
pending motions.” Dist. Dkt. No. 30.
In February 2009, the case was reassigned to Judge Arterton. Following the
reassignment, the parties agreed to withdraw their pending motions, without prejudice to
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renewal at any time. The parties also agreed that the case would be administratively
dismissed but could be reopened as of right upon motion of either party. Prendergast’s
counsel continued to monitor the situation to ensure that Prendergast received the coverage
and care that was authorized by her doctor. Coverage continued until her death on
December 14, 2010.
After Prendergast died, the case was restored to the court’s active docket via a motion
to reopen that was granted over the government’s objection. Eileen Mastrio (“Mastrio”),
Prendergast’s daughter and the administrator of her estate, was substituted as Plaintiff.
After the district court granted the parties’ consent motion to dismiss, Mastrio moved, on
August 19, 2011, for an award of fees, expenses and costs under the EAJA. The district
court referred Mastrio’s motion to Magistrate Judge Margolis who determined that Mastrio
was entitled to her reasonable attorneys’ fees and costs in the amount of $33,552.54 as a
prevailing party under the EAJA. Mastrio ex rel Prendergast, JBA-08-1148, 2011 WL 5078240,
at *16 (D. Conn. Oct. 26, 2011). Both parties filed timely objections.
On March 29, 2013, the district court granted Mastrio’s motion for attorneys’ fees in
part, and adopted a modified version of Judge Margolis’s ruling. Mastrio v. Sebelius, JBA-08-
1148, 2013 WL 1336838 (D. Conn. Mar. 29, 2013). Specifically, the district court awarded
Mastrio $74,245.64 in attorneys’ fees and $835.50 in costs, for a total of $75,081.14. In
reaching this decision, the district court held that Mastrio was a prevailing party under the
EAJA for two reasons: (1) Judge Nevas assessed the merits of her claims in granting the
TRO, and (2) because the TRO compelled the government to restore Prendergast’s benefits,
it necessarily altered the relationship between the parties. The district court further
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concluded that the government could not have met its burden of showing that its underlying
position was “substantially justified.” Mastrio moved for reconsideration, arguing that the
district court failed to account for the total number of hours worked by one of Prendergast’s
attorneys in 2011 and 2012, as well as the total amount of Mastrio’s costs. The motion was
unopposed and, on May 2, 2013, the district court, recognizing that it had “inadvertently
excluded” the amounts referenced, granted Mastrio’s motion for a total award of $78,914.54
in attorneys’ fees and costs. The government filed a timely appeal.
DISCUSSION
On appeal, the government challenges the district court’s judgment awarding EAJA
attorneys’ fees and costs to Plaintiff on the ground that a TRO can never be the basis for
prevailing party status. Further, even if a TRO could have that effect, the government
contends that the TRO in this case would not meet the necessary standard. Conversely,
Plaintiff argues that, under this Court’s precedent, entry of a preliminary injunction or a
TRO in favor of a party is a basis for determining that the party is a prevailing party for
purposes of the EAJA. Because a TRO did issue in this case, Plaintiff contends that she is a
prevailing party and therefore entitled to an award of attorneys’ fees and costs under the
EAJA.
In general, we review a trial court’s decision to award attorneys’ fees to a prevailing
party under an abuse of discretion standard. See Pierce v. Underwood, 487 U.S. 552, 571 (1988);
Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). A district court abuses its discretion “when (1)
its decision rests on an error of law (such as application of the wrong legal principle) or a
clearly erroneous factual finding, or (2) its decision—though not necessarily the product of a
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legal error or a clearly erroneous factual finding—cannot be located within the range of
permissible decisions.” In re Holocaust Victim Assets Litig., 424 F.3d 158, 165 (2d Cir. 2005)
(quoting Zervos v. Verizon N.Y., Inc., 252 F.3d 163, 169 (2d Cir. 2001)). Because it is a legal
question, we review de novo a district court’s determination that a plaintiff is a “prevailing
party” under the EAJA. Vacchio v. Ashcroft, 404 F.3d 663, 672 (2d Cir. 2005).
The EAJA provides that “a court shall award to a prevailing party other than the
United States fees and other expenses, in addition to any costs awarded . . . 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 . . . .” 28 U.S.C.
§ 2412(d)(1)(A). In this case, therefore, “[t]he attorneys’ fees question [first] turns . . . on . . .
whether plaintiff is a ‘prevailing party.’” LaRouche v. Kezer, 20 F.3d 68, 75 (2d Cir. 1994)
(quoting Doe v. Marshall, 622 F.2d 118, 120 (5th Cir. 1980)).
A plaintiff receiving interim injunctive relief may be a prevailing party where she
“prevailed on the merits at the interim stage.” Id. But where “the relief [does] not result
from a determination on the merits . . . plaintiff[ ] [does] not prevail.” Id. Making this
“determination . . . ‘requires close analysis of the decisional circumstances and reasoning
underlying the grant of preliminary relief.’” Haley, 106 F.3d at 483 (quoting LaRouche, 20
F.3d at 72). With respect to TROs, we have stated that “[t]he standard for granting [such
relief] requires a finding of immediate and irreparable injury but not a specific determination
as to the merits. Thus, . . . ‘the procurement of a TRO in which the court does not address
the merits of the case but simply preserves the status quo to avoid irreparable harm to the
plaintiff is not by itself sufficient to give a plaintiff prevailing party status.’” LaRouche, 20
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F.3d at 74 (quoting Christopher P. v. Marcus, 915 F.2d 794, 805 (2d Cir. 1990)) (citation
omitted).
In this case, the district court’s TRO neither altered the status quo nor resulted from
a determination on the merits of Prendergast’s claims. Plaintiff argues that the TRO did not
preserve the status quo because it compelled the government to reinstate Prendergast’s
home health care benefits. This does not comport with our understanding of the term
“preserve the status quo” in the preliminary injunction or TRO context. The “‘[s]tatus quo’
to be preserved by a preliminary injunction is the last actual, peaceable uncontested status
which preceded the pending controversy.” Id. at 74 n.7 (alteration in original) (quoting
Black’s Law Dictionary 1410 (6th ed. 1990)) (internal quotation marks omitted). Preserving the
status quo is not confined to ordering the parties to do nothing: it may require parties to take
action:
To preserve the status quo a court may require the parties to act or to refrain
from acting. For example, in Christopher P., the TRO that “simply preserve[d]
the status quo” directed the State of Connecticut to readmit plaintiff to its
school for mentally disturbed children after having discharged him.
[Christopher P., 915 F.2d at 805.] Likewise, in Bly v. Mcleod, 605 F.2d 134 (4th
Cir. 1979) . . . , a TRO requiring the State of South Carolina to allow plaintiffs
to vote by absentee ballot was considered merely a preservation of the status
quo.
LaRouche, 20 F.3d at 74 (first alteration in original) (footnote omitted). If Plaintiff’s theory
were correct—that ordering the reinstatement of recently terminated benefits altered the
status quo—then the TROs in Christopher P. and Bly should have been treated as changing
the status quo because the school and the state, respectively, were required to alter the
positions they had taken that led to the controversies before the court. The rationales of
Christopher P. and Bly, however, are fatal to Plaintiff’s argument.
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Plainly the status quo–the last peaceable uncontested status preceding the present
controversy–was Aetna’s payment of benefits to Prendergast. The TRO here restored the
status quo; it did not alter it. Garcia v. Yonkers School District, 561 F.3d 97, 99-101 (2d Cir.
2009), is illustrative. In Garcia, students were suspended for five days by their school after
staging a walk-out in protest of recent budget cuts. Id. at 99. After the students had “served
two of the five days’ suspension,” the district court ordered the school to reinstate them.
Id. at 100-01. In light of this ruling, plaintiff students later sought an award of attorneys’ fees
and costs as prevailing parties under 42 U.S.C. § 1988(b). Id. at 102-03. The district court
granted the motion. We reversed, however, and held that, assuming arguendo that a TRO3
had been granted, such order was issued “only to preserve the status quo—i.e., permit the
[s]tudents to continue attending school—until after the presentment of further evidence on
the merits of the [s]tudents’ claims.” Id. at 107.
Thus, we hold here that while the TRO caused the Prendergast’s coverage to be
reinstated shortly after it had been terminated, the effect was simply a return to the status
quo—the last peaceable status prior to the controversy over Plaintiff’s coverage. The
issuance of the TRO in this case, therefore, is an insufficient basis on which to find that
Plaintiff was a prevailing party entitled to an award of fees and costs under the EAJA.
Apart from preserving the status quo, the district court’s TRO involved no
determination on the merits of Prendergast’s claims. In granting the TRO, the district court
explicitly stated only that Plaintiff raised “sufficiently serious questions going to the merits to
3 Even though the district court was “unclear [as to] whether [it] intended to grant [a]
temporary restraining order” or a preliminary injunction, this Court determined that the record
did not support the conclusion that the district court granted a preliminary injunction. See
Garcia, 561 F.3d at 103, 106-07.
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make them a fair ground for litigation” and that “plaintiff has demonstrated that she will
suffer irreparable harm.” At the hearing, the district court specifically avoided deciding
whether Prendergast had shown that she had a likelihood of success on the merits because
the government had not had a chance to review the filings or prepare its opposition. In
sum, the court “did not determine that plaintiff[ ] had a legal right or entitlement to the relief
granted, only that [she] would suffer irreparable injury in the absence of relief. Therefore, an
award of fees . . . [is] not justified.”4 LaRouche 20 F.3d at 75.
CONCLUSION
For the foregoing reasons, we REVERSE the order and judgment of the district
court awarding attorneys’ fees and costs in favor of Plaintiff-Appellee.
4 It is worth noting that most TROs are designed to preserve the status quo and do not
properly address the merits. A TRO is typically issued on the strength of the plaintiff-
movant’s papers with little or no notice to the non-movant. Due process is sacrificed to the
exigencies of the emergency prompting this very preliminary relief. It is not at all surprising,
therefore, that courts generally do not view one who obtains a TRO as a “prevailing party.”
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