Kershaw v. Shalala ( 1993 )

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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No. 92-5308
Summary Calendar
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DEBORAH A. KERSHAW,
Plaintiff-Appellant,
versus
DONNA E. SHALALA
Secretary, Department of
Health and Human Services,
Defendant-Appellee.
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Appeal from the United States District Court for the
Western District of Louisiana
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(November 23, 1993)
Before GARWOOD, SMITH and DEMOSS, Circuit Judges.
GARWOOD, Circuit Judge:
Plaintiff-appellant Deborah Kershaw (Kershaw) filed in
district court a motion for attorneys' fees and expenses under the
Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d), after the
district court had remanded her suit challenging the denial of her
application for Social Security disability benefits. The district
court entered an order staying the application for fees pending the
resolution of the administrative proceedings on remand. Because we
conclude we are without appellate jurisdiction, we dismiss the
appeal.
Facts and Proceedings Below
Kershaw sought judicial review of a final decision by the
Secretary of Health and Human Services (the Secretary) denying her
application for disability benefits under the Social Security Act,
42 U.S.C. § 401 et seq. The Secretary had ruled that Kershaw
failed to satisfy step four of the sequential evaluation because
she was capable of returning to her prior work as a waitress.1 On
November 6, 1991, the district court ruled that the record did not
contain substantial evidence to sustain the Secretary's decision
and entered an order reversing her determination as to step four
and remanding the case for further proceedings to determine if
Kershaw was capable of performing other employment. On January 17,
1992, Kershaw filed an EAJA motion to recover attorneys' fees and
expenses incurred in successfully challenging the Secretary's
determination of step four. On April 7, 1992, ruling that Kershaw
was not a "prevailing party" because any benefits she might receive
were contingent on the administrative proceedings on remand, the
magistrate judge ordered that the application for fees be held in
1
The Secretary evaluates disability claims under the Social
Security Act through a five-step process: (1) Is the claimant
currently working? (2) Can the impairment be classified as
severe? (3) Does the impairment meet or equal a listed impairment
in Appendix One of the Secretary's regulations? (in which case,
disability is automatic) (4) Can the claimant perform her
previous relevant work? and (5) Is there other work available in
the national economy that the claimant can perform? 20 C.F.R.
404.1520, 416.920 (1992). In the present case, the Secretary
determined that (1) Kershaw had not engaged in substantial
gainful activity since 1986; (2) she had severe polymyositis; (3)
she did not have an impairment listed in Appendix One; but (4)
she was able to perform her previous relevant work. Once the
Secretary determined that Kershaw did not satisfy step four, she
terminated her review and denied benefits without the need to
consider step five. 20 C.F.R. 404.1520(a).
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abeyance pending the step five determination. On December 16,
1992, the district court adopted the magistrate's ruling and
entered an order staying the application for attorneys' fees until
the outcome on remand. Kershaw now appeals the district court's
order staying her application for attorneys' fees. We dismiss the
appeal for want of jurisdiction.
Discussion
At the time the district court ruled that Kershaw was not a
"prevailing party", its decision followed then-existing precedent
in this Circuit. Bertrand v. Sullivan, 976 F.2d 977, 979 (5th Cir.
1992). See also Sullivan v. Hudson, 109 S. Ct. 2248, 2254-55 (1989)
("[W]here a court's remand to the agency for further administrative
proceedings does not necessarily dictate the receipt of benefits,
the claimant will not normally attain 'prevailing party' status
within the meaning of § 2412(d)(1)(A) until after the result of the
administrative proceedings is known."). The Supreme Court,
however, has since ruled that a party obtaining a "sentence four"
judgment reversing the Secretary's denial of benefits is a
"prevailing party" under sentence four of 42 U.S.C. § 405(g)
regardless of the outcome on remand.2 Shalala v. Schaefer, 113
S. Ct. 2625, 2631-32 (1993). Although Schaefer likely renders the
district court's stay order improper, we are without jurisdiction
to entertain this appeal because the order is interlocutory and is
2
Sentence four of section 405(g) provides: "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." 42 U.S.C. § 405(g).
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not within a recognized exception.3
I. Finality
For this Court to exercise appellate jurisdiction, we must
first determine whether the district court's order staying
Kershaw's EAJA motion was a final appealable judgment for purposes
of 28 U.S.C. § 1291. An order staying judicial proceedings is
ordinarily not considered final and is hence not appealable. Moses
H. Cone Memorial Hospital v. Mercury Construction Corp., 103 S. Ct.
927, 934 n.10 (1983). Kershaw argues that the district court's
order is appealable under the exception stated in Moses Cone for
situations in which the "stay order amounts to a dismissal of the
suit" because it will put the party "effectively out of court."
Id. at 934. The narrow holding in Moses Cone, however, does not
encompass the present stay order. In Moses Cone, the Court held
that "a stay order is final when the sole purpose and effect of the
3
In Bertrand this Court reviewed a similar appeal of a
district court order staying an EAJA motion for attorneys' fees
pending resolution of the administrative proceedings on remand.
We do not consider our exercise of jurisdiction in Bertrand to
constitute a binding precedent, however, because the
jurisdictional issue was neither raised by the parties nor
addressed by the Court. See, e.g., United States v. L.A. Tucker
Truck Lines, 73 S. Ct. 67, 69 1952) (. . . "this Court is not
bound by a prior exercise of jurisdiction in a case where it was
not questioned and it was passed sub silentio" (footnote omitted,
citing numerous cases)); Todd Shipyards Corp. v. Auto Transp.,
S.A., 763 F.2d 745, 750 n.10 (5th Cir. 1985); Clifton v. Heckler,
755 F.2d 1138, 1145 n.14 (5th Cir. 1985). See also United States
v. Mitchell, 46 S. Ct. 418, 419-20 (1926). Cf. Norton v. Mathews,
96 S. Ct. 2771, 2775 (1976) (stating that "there is no need to
decide the theoretical question of jurisdiction . . . when the
case alternatively could be resolved on the merits in favor of
the same party"); Texas Employers' Ins. Ass'n v. Jackson, 862
F.2d 491, 496-97 n.8 (5th Cir. 1988) (en banc) (electing not to
resolve a difficult issue of jurisdiction because the same result
would be reached on the merits).
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stay are precisely to surrender jurisdiction of a federal suit to
a state court."4 Id. at 934 n.11 (emphasis added). Because
"arbitrability was the only substantive issue present in the
federal suit . . . a stay of the federal suit pending resolution of
the state suit meant that there could be no further litigation in
the federal forum; the state court's judgment on the issue would be
res judicata." Id. at 934. This result would not occur, and hence
the Moses Cone exception should not apply, where a district court
enters an order staying its own proceedings in favor of other
proceedings within the same federal judicial system. See Equal
Employment Opportunity Comm'n v. Neches Butane Products Co., 704
F.2d 144, 151 (1983) ("Moses Cone was unique because the district
court's Colorado River stay order put the plaintiff 'effectively
out of court' and kept the means for returning to court entirely
beyond the plaintiff's control."). The eventual decision of the
Secretary will be fully reviewable by the district court, and that
court's decision will be fully reviewable by this Court. Thus,
unlike certain abstention stay orders, the present order does not
deprive the plaintiff of an effective appeal in a federal forum.
4
The lower court in Moses Cone issued the stay pursuant to
the abstention doctrine first announced in Colorado River Water
Conservation Dist. v. United States, 96 S. Ct. 1236 (1976). This
Circuit has also found the Moses Cone exception to apply to cases
involving Burford-type abstention, Bernhardt Marine Ins. v. New
England Int'l Surety of America, Inc., 961 F.2d 529, 531 (5th
Cir. 1992), as well as federal court abstention under the Younger
doctrine. Allen v. Louisiana State Board of Dentistry, 835 F.2d
100 (5th Cir. 1988). Each of these abstention doctrines leads to
a common resultSQthe resolution of the state case necessarily
terminates the federal case.
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II. Collateral Order Doctrine
We also consider whether the district court's order is
appealable under the collateral order doctrine despite its lack of
finality. In order to be reviewable under this doctrine, an order
must meet four requirements: (1) The order must finally dispose of
an issue so that the district court's decision may not be
characterized as tentative, informal or incomplete; (2) the
question must be serious and unsettled; (3) the order must be
separable from, and collateral to, the merits of the principle
case; and (4) there must be a risk of important and irreparable
loss if an immediate appeal is not heard because the order will be
effectively unreviewable on appeal from final judgment. Coopers &
Lybrand v. Livesay, 98 S. Ct. 2454, 2458 (1978); Equal Employment
Opportunity Comm'n. v. Kerrville Bus Co., Inc., 925 F.2d 129, 134
(5th Cir. 1991); Acosta v. Tenneco Oil Co., 913 F.2d 205, 207-08
(5th Cir. 1900).5
Absent a Moses Cone situation, stay orders rarely satisfy
these requirements, and therefore, are usually not reviewable as
collateral orders. The present stay order is no exception. First,
the district court's order could certainly be characterized as
tentative and incomplete. In Coopers v. Lybrand, for instance, the
Court characterized a district court's order as "inherently
tentative" where the order could be "altered or amended before the
5
There may be some question whether the second requirement is
still viable. See Marler v. Adonis Health Products, 997 F.2d
1141, 1143 (5th Cir. 1993). We need not resolve that issue here,
as we do not rely on this requirement in holding the order in
question not within the collateral order doctrine.
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decision on the merits." Coopers & Lybrand, 98 S. Ct. at 2458 n.11.
The present order does not prevent Kershaw from recovering her fees
for the charges incurred in gaining the sentence four remand;
rather it directs her to "file an updated application for
attorney's fees within 30 days of the final decision of the
Secretary if the plaintiff is a 'prevailing party' on remand."
Given that the Supreme Court's subsequent ruling in Schaefer
indicates that Kershaw may already qualify as a "prevailing party",
a motion for reconsideration (accompanying an updated application
for fees) may be appropriate to allow the district court to "alter
or amend" its order in light of Schaefer. In addition, there is no
risk of irreparable loss because the Secretary's final decision on
remand will be reviewable as a final order. The only harm Kershaw
could claim is a delay in the recovery of her fees. Such a loss is
insufficient to warrant interlocutory review. Cf. Shipes v.
Trinity Indus. Inc., 883 F.2d 339 (5th Cir. 1989) (finding that an
order granting interim attorneys' fees did not satisfy the
collateral order doctrine because the order could be effectively
reviewed upon entry of final judgment); Kerrville Bus, 925 F.2d at
135 (finding that the added expense of litigation does not
constitute an irreparable harm). See also Marler v. Adonis Health
Products, 997 F.2d 1141 (5th Cir. 1993).
III. Mandamus
When a district court for a legally erroneous reason refuses
to act on a matter properly before it, mandamus is generally the
appropriate remedy. Here, however, the district court's stay of
the fee application was in accord with the law of this circuit at
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the time, and the court did not have the benefit of Schaefer.
There is no reason to believe that the district court, on proper
application, will not reconsider its earlier stay in light of
Schaefer. In such circumstances, mandamus at this stage would
appear inappropriate. In any event, no application for mandamus
has been filed. See Neches Butane, 704 F.2d at 151-52.
Conclusion
This Court lacks jurisdiction of the instant appeal and the
appeal is accordingly
DISMISSED.
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