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DERBY v. BOWEN

June 10, 1986

RICHARD DON DERBY, Plaintiff,
v.
OTIS R. BOWEN, Secretary of Health and Human Services, Defendant


Robert J. McNichols, United States District Judge.


The opinion of the court was delivered by: MCNICHOLS

ROBERT J. McNICHOLS, United States District Judge

 By order entered May 24, 1985 this matter was remanded to the Secretary for further administrative proceedings on the alternative bases that: (1) plaintiff appeared to be a member of the Smith class and thereby entitled to reconsideration of his claim without application of the "non-severity" rule found at 20 C.F.R. § 404.1520(c); *fn1" and (2) the Secretary accorded too much weight to the testimony of several "long distance" experts who had never seen claimant, and too little weight to the conclusion of one of the agency's own experts who did examine Mr. Derby. *fn2"

 At the conclusion of supplemental administrative proceedings, the Appeals Council affirmed the ALJ's recommended decision that Mr. Derby be found disabled. Plaintiff thereafter renewed his request for attorney fees. By order entered March 4, 1986 the Court requested additional briefing in light of the 1985 Amendments to the EAJA; P.L. 99-80. *fn4" That order also directed defendant to file any additional decisions or supplemental transcripts which may have developed during the course of the administrative process on remand. *fn5" The matter is now fully briefed and is ripe for disposition.

 The threshold inquiry is whether the Court has authority to enter a final judgment when a previously-remanded action has resulted in a litigant obtaining all of the relief sought at the administrative level. The government argues that if a final order is to be entered at all, it should be an order dismissing the action as moot. In light of the extensive legislative history accompanying the 1985 Amendments to the EAJA, however, it would appear that plaintiff has the better position:

 
The court will usually decline to make an award upon the remand decision because the remand order did not yet make the applicant a "prevailing party" and therefore eligible under the EAJA. But see, MacDonald v. Schweiker, 553 F. Supp. 536 (E.D. N.Y. 1982). In Guthrie v. Schweiker, 718 F.2d 104 (4th Cir. 1983), the Court pointed to the provision of 42 U.S.C. 405(g) providing that after the HHS review upon remand the agency must file its findings with the reviewing court. Thus the remand decision is not a "final judgment," nor is the agency decision after remand. Instead, the District Court should enter an order affirming, modifying, or reversing the final HHS decision, and this will usually be the final judgment that starts the thirty days running. See also, Brown v. Secretary of Health and Human Services, 747 F.2d 878 (3rd Cir. 1984). In addition, as the Brown court points out, the remanding courts are vested with full equity powers and need not simply wait for the agency to act if that would be inappropriate. Brown at 885.

 H. Rep. No. 99-120, Part I at 19-20, reprinted in, [1985] U.S. Code Cong. & Ad. News 132, 148; *fn6" see also, Taylor v. Heckler, 778 F.2d 674, 678 n.4 (11th Cir. 1985).

 As plaintiff succinctly framed the issue in briefing, any other construction would "permit governmental agencies to err once, but always once." Thus, the Court concludes that it has authority to affirm the decision of the Secretary and judgment will be entered accordingly. *fn7"

 That brings us to the merits of the instant motion. Plaintiff argues alternatively that: (1) application of the non-severity regulation coupled with defendant's failure to apprise plaintiff of his membership in Smith rendered the government's position not substantially justified; and/or (2) improper balancing of expert testimony was likewise not substantially justified.

 During the initial administrative proceedings, the ALJ's decision issued on December 27, 1983 and became the final decision of the Secretary upon affirmance by the Appeals Council on February 15, 1984. Smith was not decided until June 6, 1984. It is true that there were a smattering of published decisions containing veiled criticism of the non-severity rule prior thereto. See, e.g., Delgado v. Heckler, 722 F.2d 570, 574 (9th Cir. 1983), but the Court is unable to conclude that the Secretary was on fair notice that § 1520(c) was in serious trouble as of February 15, 1984 when the administrative decision became final. Accordingly, it cannot be said that reliance on the subject regulation was unreasonable.

 Defendant's failure to timely advise plaintiff of his membership in Smith is unfortunate, but the worst that can be said is that his ultimate success was delayed for a period of a few months. The Court cannot conclude that this delay so infected the entire process as to render the overall position of the government unjustified.

 Finally, there is the question of improper balancing. Standing as a formidable hurdle to plaintiff's position is Albrecht v. Heckler, 765 F.2d 914 (9th Cir. 1985):

 
When the ALJ is reversed for a failure to weigh conflicting medical evidence properly, an award ...

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