LOUIS W. SULLIVAN, SECRETARY OF HEALTH AND HUMAN SERVICES, PETITIONER V. MARILYN FINKELSTEIN No. 89-504 In the Supreme Court of the United States October Term, 1989 The Solicitor General, on behalf of the Secretary of Health and Human Services, respectfully petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the Third Circuit in this case. Petition for a Writ of Certiorari to the United States Court of Appeals for the Third Circuit TABLE OF CONTENTS Question Presented Opinions below Jurisdiction Statutory provisions involved Statement Reasons for granting the petition Conclusion OPINIONS BELOW The opinion of the court of appeals, as amended by order dated May 19, 1989 (App., infra, 1a-12a), and the opinion of Judge Becker dissenting from the denial of rehearing en banc (App., infra, 23a-24a), are reported at 869 F.2d 215, 220. The opinion of the district court (App. infra, 13a-18a) is unreported. JURISDICTION The judgment of the court of appeals (App., infra, 19a-20a) was entered on March 3, 1989, and a petition for rehearing was denied on May 24, 1989 (App., infra, 21a-22a). By order dated August 9, 1989, Justice Brennan extended the time within which to file a petition for a writ of certiorari to and including September 21, 1989. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). STATUTORY PROVISIONS INVOLVED 1. Section 1291 (28 U.S.C.) provides in relevant part: The court of appeals (other than the United States Courts of Appeals for the Federal Circuit) shall have jurisdiction of appeals from all final decisions of the district courts of the United States * * * except where a direct review may be had in the Supreme Court. * * * 2. Section 1292(a) (28 U.S.C.) provides in relevant part: Except as provided in subsections (c) and (d) of this section, ( /1/ ) the courts of appeals shall have jurisdiction of appeals from: (1) Interlocutory orders of the district courts of the United States, * * * or of the judges thereof, granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions, except where a direct review may be had in the Supreme Court; * * * * * 3. Section 205(g) of the Social Security Act, as codified at 42 U.S.C. 405(g), provides (bracketed numbers added): (1) 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. (2) 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. (3) 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. (4) 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. (5) 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 the conformity with such regulations and the validity of such regulations. (6) 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. (7) Such additional or modified findings of fact and decision shall be reviewable only to the extent provided for review of the orginal findings of fact and decision. (8) 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. (9) 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. QUESTION PRESENTED Whether, in an action under 42 U.S.C. 405(g) for judicial review of the final decision of the Secretary of Health and Human Services denying a claim for Social Security disability benefits, the Secretary may appeal an order of the district court that rejects the Secretary's legal basis for the denial of benefits and remands the cause to the Secretary for a rehearing under a different legal standard. STATEMENT 1. Respondent is the widow of a wage earner who died on August 27, 1980, fully insured under Title II of the Social Security Act, 42 U.S.C. 401 et seq. (1982 & Supp. IV 1986). On November 25, 1983, she applied for widow's disability benefits under Title II, based on coronary heart disease. The statutory standard of disability for widows, widowers, and surviving divorced spouses /2/ is different from and more stringent than that for wage earners. In the case of a wage earner, the Social Security Act provides that the term "disability" means the "inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months" (42 U.S.C. 423(d)(1)(A)). The Act further provides that a wage earner shall be determined to be under a disability only if his impairment is "of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy" (42 U.S.C. 423(d)(2)(A) (1982 & Supp. IV 1986)). By contrast, under 42 U.S.C. 423(d)(2)(B) (1982 & Supp. IV 1986), which was enacted in 1968, /3/ 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 is deemed to be sufficient to preclude an individual from engaging in any gainful activity." The regulations implementing the latter statutory section, which were promulgated soon after passage of Section 423(d)(2)(B) in 1968, /4/ provide that a widow's impairment is deemed to be of sufficient severity to preclude gainful activity only if it meets or equals the severity of an impairment included in the Listing of Impairments in Appendix 1 to 20 C.F.R. Part 404, Subpart P. 20 C.F.R. 404.1577, 404.1578(a). Thus, under the regulations prescribed by the Secretary, a widow's impairment is evaluated on the basis of medical factors alone. The Secretary does not consider any further limitations on the widow's ability to work that may result from the adverse effects of her age, education, and work experience, as he would in the case of an adult wage earner. 20 C.F.R. 404.1577, 404.1578(a); see Bowen v. Yuckert, 482 U.S. 137, 140-142, 149 n.7 (1987); id. at 163-164 & n.3(Blackmun, J., dissenting). 2. The Secretary denied respondent's application for widow's disability benefits under Section 423(d)(2)(B), concluding that respondent's coronary condition did not meet or equal an impairment contained in the section of the Listing that identifies presumptively disabling impairments of the cardiovascular system (App., infra, 16a). After respondent exhausted her administrative remedies through the Appeals Council, she sought judicial review of the Secretary's final decision, pursuant to 42 U.S.C. 405(g), in the United States District Court for the District of New Jersey. The district court held that the Secretary's decision that respondent's coronary impairment did not meet or equal a listed impairment was supported by substantial evidence (App., infra, 17a). It further held, however, that the Secretary may not deny widow's disability benefits on that basis alone, but instead must make an individualized determination of the functional impact of the impairment on the claimant in order to determine whether she in fact retains sufficient residual functional capacity to perform any gainful activity (ibid.). /5/ The effect of this ruling was to invalidate the Secretary's longstanding regulations to the extent they require an applicant for widow's disability benefits to have an impairment that meets or equals a listed impairment. /6/ The court therefore remanded the cause to the Secretary with directions "to inquire whether (respondent) may or may not engage in any gainful activity, as contemplated by the Act" (id. at 18a). See also id. 25a (ordering "that the matter be remanded to the Secretary for further proceedings in accordance with (the) Court's opinion."). 3. The Secretary appealed the district court's remand order. He argued that the regulations requiring an applicant for widow's disability benefits to show that she has an impairment that meets or equals the Listing are valid, and that the district court therefore should have affirmed the Secretary's final decision because it correctly concluded that his finding that respondent did not have such an impairment was supported by substantial evidence. On March 3, 1989, the court of appeals dismissed the Secretary's appeal for lack of jurisdiction, holding that the district court's order was an interlocutory order, not a "final decision," for purposes of 28 U.S.C. 1291. App., infra, 1a-12a, 19a-20a. The court of appeals first noted that it previously had articulated a general rule that "'remands to administrative agencies are not ordinarily appealable under section 1291,'" because "(s)uch a remand is typically an interlocutory step in the adjudicative process and, therefore, not a final order" (App., infra, 4a, quoting United Steelworkers, Local 1913 v. Union R.R., 648 F.2d 905, 909 (3d Cir. 1981)). The court acknowledged that its prior cases did recognize an exception to that general 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" (App., infra, 4a-5a). But after reviewing its prior cases (id. at 5a-9a), the court found that exception inapplicable here, because "'it is not inexorably so'" that the legal ruling on which the district court's order was based would escape appellate review (id. at 9a, quoting Bachowski v. Usery, 545 F.2d 363, 373 (3d Cir. 1976)). See generally App., infra, 9a-12a. The court reasoned that whether the district court properly invalidated the Listing requirement would be subject to review by the court of appeals if events after the district court's remand order unfolded in a particular way, namely: (a) if the Secretary, after considering respondent's residual functional capacity on remand, made an individualized determination that respondent is not precluded from engaging in any gainful activity; (b) if respondent sought judicial review of that decision of the Secretary; (c) if the district court reversed the Secretary's new decision and ordered an award of benefits; and (d) if the Secretary appealed that subsequent order of the district court to the court of appeals. Id. at 9a-10a, 11a. The court acknowledged that the Secretary may be denied any appellate review of the district court's legal ruling if events did not unfold in the manner just described -- specifically if, on remand, the Appeals Council was required to find respondent disabled and awarded her benefits under the district court's view of the statutory standards governing widow's disability benefits. App., infra, 9a-10a, 11a. But the court concluded that this possible preclusion of any opportunity for the Secretary to obtain appellate review of the central legal issue in the case was "of no more significance" than it was in several prior Third Circuit cases (id. at 11a). The court of appeals also acknowledged that, in prior cases, it had found appellate jurisdiction over district court orders that required an agency to hold a hearing or to conduct further proceedings on remand, on the theory that the order constituted a final rejection of the agency's position that no hearing or other further proceedings were required (App., infra, 7a-9a, 12a). But the court found that rationale inapposite here, because, in its view, the legal issue presented here was not whether the governing statute or regulations required a hearing, but whether an additional factor (respondent's residual functional capacity) must be considered by the Secretary before he makes a final administrative adjudication of the benefit claim (id. at 12a). 4. The Secretary's petition for rehearing en banc was denied, with three judges dissenting (App., infra, 21a-22a). Judge Becker, who was a member of the panel, explained his vote for rehearing en banc in a statement that was joined by Judges Sloviter and Stapleton (id. at 23a-24a). Judge Becker stated that he had joined the panel's opinion because he felt bound to do so by the Third Circuit's decision in Bachowski v. Usery, 545 F.2d 363 (1976), even though Bachowski "seems inconsistent at least with the spirit of (the Third Circuit's) later jurisprudence" (App., infra, 23a). But if free to do so, Judge Becker explained, he would hold that the court of appeals had appellate jurisdiction in this case, following the reasoning of the District of Columbia Circuit's recent decision in Occidental Petroleum Corp. v. SEC, 873 F.2d 325, 328-332 (1989). Judge Becker elaborated (App., infra, 23a): In (Occidental Petroleum), Judge Ginsburg, speaking for the court, expressed the view that Congress did not intend that the final order rule place an agency in a position of dependence upon the self-interest of others in order to get review of a legal decision that dictates the standards and procedures to be applied by the agency in making its decisions. Here, as in Occidental, the Secretary is between the proverbial rock and a hard place. If the Secretary, bound by the district court's opinion, grants benefits on remand to (respondent), he cannot appeal. If the Secretary does not grant benefits on remand, whether or not the legal issue will be reviewed depends on whether (respondent) decides to press an appeal. ( /7/ ) REASONS FOR GRANTING THE PETITION The court of appeals has held that the Secretary of Health and Human Services may not appeal a district court order that rejects the legal basis for the Secretary's decision denying benefits and remands the cause for a rehearing by the Secretary under different legal standards. Contrary to the view of the court of appeals, such an order is a "final decision" of the district court within the meaning of 28 U.S.C. 1291, because it finally determines that the decision of the Secretary that is before the court on judicial review is contrary to law and because the Secretary may be deprived of an opportunity for appellate review of the district court's legal ruling if he is required to award benefits on remand under the legal standards imposed by the district court. The text of 42 U.S.C. 405(g) confirms this conclusion, because it deems the judgment of a district court that affirms, modifies or reverses the Secretary's decision, "with or without remanding the cause for a rehearing" by the Secretary, to be a "final judgment," subject to appellate review like any other final judgment in a civil action. Such an order also is appealable pursuant to 28 U.S.C. 1292(a)(1), because it enjoins the Secretary to conduct a new hearing under different legal standards. The question whether the Secretary may appeal an order remanding the cause to him for redetermination under different legal standards is one of substantial and recurring importance in litigation arising under the Social Security Act, and it has generated conflicting holdings among the courts of appeals in cases arising under that Act. The question of the appealability of remand orders also is of substantial importance outside the Social Security context. Review by this Court therefore is clearly warranted. 1. a. The court of appeals erred in concluding that it did not have jurisdiction over the Secretary's appeal. Under 28 U.S.C. 1291, the courts of appeals have jurisdiction of appeals from all "final decisions" of the district courts. A party ordinarily may not take an appeal under Section 1291 "until there has been a decision by the District Court that 'ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.'" Van Cauwenberghe v. Biard, 108 S. Ct. 1945, 1949 (1988), quoting Catlin v. United States, 324 U.S. 229, 233 (1945). This general rule avoids the disruption of ongoing proceedings in the trial court that would be occasioned by "piecemeal appellate review," and thus promotes the "efficient administration of justice" (Flanagan v. United States, 465 U.S. 259, 264 (1984)). In addition, the rule "'emphasizes the deference that appellate courts owe to the trial judge as the individual initially called upon to decide the many questions of law and fact that occur in the course of a trial,'" thereby respecting the "'independence of the district judge, as well as the special role that individual plays in our judicial system.'" Van Cauwenberghe v. Biard, 108 S. Ct. at 1949 n.3, quoting Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 374 (1981). By the terms of Section 1291, however, "it is a final decision that Congress has made reviewable," not a final judgment. Stack v. Boyle, 342 U.S. 1, 12 (1951) (opinion of Jackson, J.). As a result, "'a decision "final" within the meaning of Section 1291 does not necessarily mean the last order possible to be made in (the) case.'" Mitchell v. Forsyth, 472 U.S. 511, 524 (1985), quoting Gillespie v. United States Steel Corp., 379 U.S. 148, 152 (1964). And in determining whether a particular type of order is immediately appealable under Section 1291, the requirement of finality must be given a "practical rather than a technical construction." Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546 (1949). Heretofore, the Court has considered the application of 28 U.S.C. 1291 in the context of orders entered during or at the conclusion of unitary proceedings in the district court itself. In that setting, the practical construction of Section 1291 has been most evident in the "collateral order" doctrine, which recognizes a small class of decisions that are immediately appealable under Section 1291 even though they do not terminate the proceedings in the district court. That class consists of decisions "which finally determine claims of right separate from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated." Cohen v. Beneficial Industrial Loan Corp., 337 U.S. at 546. See, e.g., Midland Asphalt Corp. v. United States, 109 S. Ct. 1494, 1497 (1989). Under the common formulation of the collateral order doctrine, an order, to be immediately appealable, must (1) "conclusively determine the disputed question," (2) "resolve an important issue completely separate from the merits of the action," and (3) "be effectively unreviewable on appeal from a final judgment." Coopers & Lybrand v. Livesay, 437 U.S. 463, 468 (1978). See, e.g., Lauro Lines S.R.L. v. Chasser, 109 S. Ct. 1976, 1978 (1989); Richardson-Merrill, Inc. v. Koller, 472 U.S. 424, 431 (1985). b. This case differs from the Court's prior cases applying the finality requirement of Section 1291. The order at issue here was not entered in ordinary civil or criminal litigation in district court, in which adjudication of all legal and factual issues takes place in unitary proceedings before the court. The order was entered in the quite different context of judicial review of final agency action, which in turn was the product of distinct administrative proceedings and embodied the agency's considered determination of all issues of fact and law bearing on respondent's claim for benefits. The district court's order in this case was a "final decision" for purposes of 28 U.S.C. 1291 because it finally determined that a particular decision of the Secretary was contrary to law and remanded the matter to the Secretary to conduct a fresh round of administrative proceedings under different legal standards. Although the district court might have occasion to consider respondent's claim for benefits again at a later date -- if respondent sought judicial review of the new decision rendered by the Secretary on remand -- the focus of the judicial proceedings at that point would be on the Secretary's second decision. Moreover, if the factual record before the Secretary on remand should require him to find respondent disabled and award her benefits under the legal standards imposed by the district court, the Secretary could not ordinarily seek judicial review of his own decision in favor of the claimant. The court of appeals in fact acknowledged that in those circumstances, its construction of 28 U.S.C. 1291 would require the Secretary to forgo all opportunity for appellate review of the district court's invalidation of the Listing approach. But see note 10, infra. The foregoing considerations have led the courts of appeals to apply the principles of finality under Section 1291 with a practical regard for the unique aspects of a civil action for judicial review of agency action. They have held that, as a general rule, an order remanding a matter to an administrative agency for further proceedings is interlocutory, not final, and therefore may not be immediately appealed under 28 U.S.C. 1291. See Occidental Petroleum Corp. v. SEC, 873 F.2d 325, 329-330 (D.C. Cir. 1989) (collecting cases from every circuit). But as the District of Columbia Circuit further explained in Occidental Petroleum, the courts have recognized an exception to that rule where the remand order finally disposes of a legal issue on which the agency's decision was based, and the agency may not have an effective opportunity to appeal at a later date. See id. at 330-332. The order in the instant case falls within this exception, as Judge Becker recognized in urging the Third Circuit to follow Occidental Petroleum. Indeed, as we explain below (see pages 23-24, infra), the courts of appeals have long recognized the right of the Secretary to take an appeal in circumstances such as those presented here. c. The district court's order in this case was a "final decision" for purposes of 28 U.S.C. 1291 under either of two alternative theories. On the one hand, if the proceedings before the court are regarded as largely distinct from those before the agency, the remand order is appealable because it effectively terminated the relevant judicial proceedings. The order represented a final rejection of a particular decision of the Secretary (which denied respondent's application for benefits on the ground that her impairment did not meet or equal the Listing), and returned the claim for benefits to the Executive Branch officer charged with administering the disability program. On the other hand, if the proceedings before the Secretary and those before the court are regarded as separate components of one broader controversy regarding respondent's claim for benefits, /8/ the district court's order is appealable under principles analogous to those underlying the "collateral order" doctrine that the Court has recognized for certain orders entered in the course of on-going proceedings in the district court. This is so because the order finally resolves an important legal issue concerning the validity of the Secretary's regulations governing widow's disability claims; that issue is separate from the factual issues (concerning respondent's ability to perform gainful activity) that will be considered in further administrative proceedings on remand and in any subsequent judicial review of the Secretary's second decision in the district court; /9/ and the Secretary may not have an effective opportunity for appellate review of that legal issue at a later date. /10/ Moreover, under either theory, the balance of considerations that have informed the development of finality principles under 28 U.S.C. 1291 supports the Secretary's right of appeal here. Because the order constitutes a final rejection of the Secretary's reliance on the Listing as a basis for rejecting respondent's claim -- and because the rehearing of the claim mandated by the district court will take place before the Secretary, not the court -- an appeal by the Secretary would not interfere with on-going proceedings in the district court or undermine the independence or special role of the district judge. Conversely, a refusal to allow the Secretary to appeal the order invalidating his longstanding regulatory requirement for widow's disability claims would undermine the special role and distinct responsibilities of the Secretary, the Executive Branch officer entrusted with responsibility for implementing the Social Security Act and rendering decisions on claims arising under it. Such a rule of non-appealability also would impose an unwarranted burden on "an already overburdened agency" (Heckler v. Campbell, 461 U.S. 458, 468 (1983)), because it would require the Secretary to conduct additional proceedings that would prove to be unnecessary and wasteful of scarce resources if (as the Secretary firmly believes) the regulations governing widow's disability claims are ultimately found to be valid. See Occidental Petroleum, 873 F.2d at 329; Stone v. Heckler, 722 F.2d 464, 467 (9th Cir. 1983); cf. Palmer v. City of Chicago, 806 F.2d 1316, 1318-1319 (7th Cir. 1986), cert. denied, 481 U.S. 1049 (1987). Thus, recognition of the Secretary's right to appeal the order at issue here would promote, not undermine, the "efficient administration of justice" (Flanagan, 465 U.S. at 264). d. For similar reasons, if the remand order is not regarded as a final judgment that effectively terminated the relevant proceedings in the district court, the court of appeals also had jurisdiction in this case under 28 U.S.C. 1292(a)(1). Section 1292(a)(1) vests the courts of appeals with jurisdiction of appeals from interlocutory orders granting or denying injunctions. The district court's orders in this case had the effect of granting an injunction, because it did more than simply remand the cause; it "directed" the Secretary to conduct further proceedings to inquire whether respondent can engage in any gainful activity (App., infra, 18a). See Avery v. Secretary of HHS, 762 F.2d 158, 160 (1st Cir. 1985); but see United States v. Louisiana-Pacific Corp., 846 F.2d 43, 45 (9th Cir. 1988). The order did not merely govern the conduct of the parties in connection with proceedings before the district court itself on matters unrelated to substantive issues in the case. See Gulfstream Aerospace Corp. v. Mayacamas Corp., 108 S. Ct. 1133, 1138 (1988); International Products Corp. v. Koons, 325 F.2d 403, 406-407 (2d Cir. 1963). Rather, it granted partial relief on the merits and ordered further proceedings in a different forum. Compare Switzerland Cheese Ass'n v. E. Horne's Market, Inc., 385 U.S. 23, 25 (1966); Baltimore Contractors, Inc. v. Bodinger, 348 U.S. 176, 183 (1955); Morgantown v. Royal Insurance Co., 337 U.S. 254, 257-258 (1949); Hunt v. Bankers Trust Co., 799 F.2d 1060, 1066-1067 (5th Cir. 1986). /11/ 2. a. Both of the alternative theories of appealability under 28 U.S.C. 1291 discussed above were articulated in Cohen v. Perales, 412 F.2d 44, 48-49 (5th Cir. 1969), rev'd on other grounds, 402 U.S. 389 (1971), the seminal decision confirming an agency's right of appeal in circumstances such as these. In Perales, the district court reversed the Secretary's decision denying the claim for benefits and remanded for a new hearing on the ground that the written reports of medical experts, on which the administrative law judge relied, did not constitute substantial evidence to support the Secretary's decision denying the claim for benefits. The court of appeals held that it had jurisdiction over the Secretary's appeal from the district court's order under 28 U.S.C. 1291. /12/ In holding that the order was "final" in the usual sense of concluding the judicial proceedings, the Fifth Circuit in Perales relied on the fourth and eighth sentences of 42 U.S.C. 405(g). See 412 F.2d at 48. The fourth sentence provides that on judicial review, a district court "shall have power to enter * * * a judgment affirming, modifying, or reversing the decision of the Secretary, with or without remanding the cause for a rehearing." The eighth sentence 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." These two sentences make it clear that a district court order that sets aside the Secretary's decision on the merits because of legal error is not deprived of its finality -- at least insofar as the Secretary's right of appeal is concerned -- simply because the district court also remands the cause for a rehearing by the Secretary. /13/ Whether or not it remands the cause, the district court's ruling constitutes a final rejection of the first decision of the Secretary. If the Secretary again finds the claimant not disabled in the proceedings on remand, it would be that second decision of the Secretary that would be the subject of any subsequent application for judicial review. For this reason, the Fifth Circuit in Perales correctly relied on 42 U.S.C. 405(g) in finding jurisdiction over the Secretary's appeal because the district court's order effectively terminated the relevant judicial proceedings. The Fifth Circuit in Perales also relied on "collateral order" principles in finding the district court's remand order appealable. 412 F.2d at 48-49. It noted that the district court not only had denied the motions for summary judgment and reversed the Secretary's decision on the merits, but also had established standards for the admission of hearsay evidence in the administrative proceedings on remand. Following this Court's admonition to give Section 1291 a practical rather than a technical construction, the Fifth Circuit concluded that such an order fit the rationale of Cohen v. Beneficial Industrial Loan Corp. The court reasoned that "(u)nless the Secretary is allowed to appeal from this order, he will never be able to reach the questions involved, because on the next appeal, if there is one, the sole question may be the substantiality of the evidence, and not its admissibility." 412 F.2d at 48. b. The Fifth Circuit stressed in Perales that not all remand orders in Social Security cases are immediately appealable. The court specifically referred in this regard to orders covered by the sixth sentence of Section 405(g), which allows a district court, before it reaches the merits of the Secretary's decision, to remand the cause to the Secretary for the receipt of additional evidence. 412 F.2d at 48. This procedure was included to provide a mechanism for the receipt of newly discovered evidence in a case in which judicial review of the Secretary's decision is based on the administrative record. /14/ By contrast, the order in this case (like that in Perales) did represent a final rejection of the Secretary's decision, which denied respondent's claim because her impairment did not meet or equal the Listing. c. This Court reversed the Fifth Circuit's ruling on the merits in Perales, without questioning the jurisdiction of the court of appeals over the Secretary's appeal from the district court's remand order. See Richardson v. Perales, 402 U.S. 389 (1971). Because the jurisdictional issue was discussed at length in the Fifth Circuit's opinion -- and because the jurisdiction of this Court under 28 U.S.C. 1254(1) depended on whether the case was properly "in" the court of appeals under 28 U.S.C. 1291 (see United States v. Nixon, 418 U.S. 683, 690, 692 (1974)) -- the Court presumably would have adverted to the jurisdictional issue if it had questioned the correctness of the Fifth Circuit's resolution of it. Since that time, a number of other courts of appeals have followed Perales. In fact, insofar as we have been able to ascertain, it was not until quite recently, long after 42 U.S.C. 405(g) was enacted in 1939, /15/ that any court has held that the Secretary may not appeal a remand order under Section 405(g) in circumstances such as those presented here. 3. The jurisdictional ruling by the Third Circuit in this case conflicts not only with the decision in Perales but also with the decisions of a number of other courts of appeals. The First, Sixth, Ninth and Tenth Circuits have followed Perales in finding jurisdiction over appeals by the Secretary from remand orders. See Colon v. Secretary of HHS, 877 F.2d 148, 149-151 (1st Cir. 1989); Lopez Lopez v. Secretary of HEW, 512 F.2d 1155, 1156 (1st Cir. 1975); Edmond v. HHS, No. 89-3161 (6th Cir. Apr. 19, 1989); /16/ Stone v. Heckler, 772 F.2d 464, 466-468 (9th Cir. 1983); Ensey v. Richardson, 469 F.2d 664 (9th Cir. 1972); Paluso v. Mathews, 573 F.2d 4, 7-8 (10th Cir. 1978) (Black Lung case); see also McGill v. Secretary of HHS, 712 F.2d 28, 29-30 (2d Cir. 1983) (dictum), cert. denied, 465 U.S. 1068 (1984). The Seventh Circuit has reached a similar result under the parallel judicial review provisions of the Medicare Act. See Daviess County Hospital v. Bowen, 811 F.2d 338, 341-342 (7th Cir. 1987); Edgewater Hospital, Inc. v. Bowen, 857 F.2d 1123 (7th Cir. 1988). /17/ Moreover, the District of Columbia Circuit, which apparently has not had occasion to address the appealability issue in the Social Security context, recently held in Occidental Petroleum, after a thorough examination of the issue in an analogous context, that an agency may appeal a remand order under 28 U.S.C. 1291. See also Bender v. Clark, 744 F.2d 1424, 1426-1428 (10th Cir. 1984). Other courts of appeals that also once held the Secretary may appeal a remand order have since expressed a contrary view, albeit without acknowledging their own contrary precedent. /18/ For example, although the Fourth Circuit previously had followed Perales in holding that the Secretary could appeal a remand order in a Black Lung case (see Souch v. Califano, 599 F.2d 577, 578 n.1 (1979)), it more recently held, without mentioning its prior ruling, that the Secretary may not appeal a remand order under similar circumstances. See Harper v. Bowen, 854 F.2d 678 (4th Cir. 1988). Similarly, although the Eighth Circuit had found jurisdiction over an appeal by the Secretary even prior to Perales (Gardner v. Moon, 360 F.2d 556, 558 n.2 (8th Cir. 1966)), it since has stated in dictum, without mentioning Moon, that the Secretary may not take an appeal under 28 U.S.C. 1291. McCoy v. Schweiker, 683 F.2d 1138, 1141 n.2 (8th Cir. 1982) (en banc). Most remarkably, the Fifth Circuit recently held in an unpublished order that the Secretary could not appeal a remand order, and it did so without even citing its own contrary precedent in Perales. See Haywood v. Bowen, No. 88-1280 (Nov. 30, 1988) (862 F.2d 873 (1988) (Table)). /19/ The jurisdictional issue presented by this case is of recurring importance in litigation arising under the Social Security Act, since claimants increasingly raise jurisdictional objections to appeals by the Secretary from remand orders, even in circuits that previously had sustained the Secretary's right of appeal. The jurisdictional issue also is one of recurring importance outside the Social Security context, where it has generated thoughtful analyses by several other courts of appeals that have sustained the agency's right of appeal. See Occidental Petroleum Corp. v. SEC, supra; Mall Properties, Inc. v. Marsh, 841 F.2d 440, 442-443 (1st Cir.), cert. denied, 109 S. Ct. 128 (1988); Bender v. Clark, supra. The decision of the Third Circuit conflicts with these jurisdictional rulings outside the Social Security context, as well as those, discussed above, in cases arising directly under that Act. Review by this Court therefore is plainly warranted. CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted. KENNETH W. STARR Solicitor General STUART E. SCHIFFER Acting Assistant Attorney General THOMAS W. MERRILL Deputy Solicitor General EDWIN S. KNEEDLER Assistant to the Solicitor General ROBERT M. LOEB Attorney SEPTEMBER 1989 /1/ Subsections (c) and (d) of 28 U.S.C. 1292 concern appeals to the United States Court of Appeals for the Federal Circuit, and they therefore have no application to this case. /2/ For convenience, we shall hereafter refer to this class of persons as "widows." /3/ Social Security Amendments of 1967, Pub. L. No. 90-248, Section 158(b), 81 Stat. 868. /4/ 33 Fed. Reg. 11,749, 11,751, 11,755 (1968), adding 20 C.F.R. 404.1504, 404.1506(a)(1). /5/ A claimant's "residual functional capacity" (RFC) is "what (the claimant) can do despite (his) impairment" (20 C.F.R. 404.1545). Under governing regulations, the Secretary measures a claimant's RFC only for the purpose of determining whether a wage-earner applicant can perform his past work or other work in the national economy, in light of his age, education, and work experience. 20 C.F.R. 404.1520(e) and (f), 404.1545(a), 404.1561; Bowen v. City of New York, 476 U.S. 467, 471 (1986). Because the Secretary does not make such a determination in the case of an applicant for widow's benefits, there is no need for him to measure a widow's RFC. /6/ A similar issue on the merits is before this Court in Sullivan v. Zebley, cert. granted, No. 88-1377 (May 15, 1989). Zebley involves the validity of the Secretary's regulations that require an applicant for child's disability benefits under the Supplemental Security Income Program established by Title XVI of the Social Security Act, 42 U.S.C. 1383 et seq. (1982 & Supp. IV 1986), to show that he has an impairment that meets or equals the severity of an impairment contained in the same adult Listing at issue here or in a special children's Listing. /7/ On September 8, 1989, the district court, with respondent's consent, stayed its order of remand pending this Court's disposition of the instant petition for a writ of certiorari. /8/ In Sullivan v. Hudson, 109 S. Ct. 2248, 2254-2257 (1989), the Court held that proceedings before the Secretary on remand from a district court are sufficiently related to the civil action for judicial review under 42 U.S.C. 405(g) to permit a court to award attorney's fees for services rendered before the Secretary on remand as part of its award under the Equal Access to Justice Act (EAJA), 28 U.S.C. 2412(d), for services rendered in judicial proceedings. /9/ In the familiar context of unitary proceedings in the district court, an order that invalidates governing regulations and sets the case for trial under a different legal standard would not satisfy the second prong of the three-prong test for collateral orders announced in Coopers & Lybrand, 437 U.S. at 468, because the legal issue regarding the validty of the regulations would not be "completely separate from the merits of the action." See Daviess County Hospital v. Bowen, 811 F.2d 338, 342 (7th Cir. 1987). However, neither the Cohen rule nor its particular requirement of a "separate" legal issue should be applied in precisely the same manner in the distinct context of judicial review of agency action. But see Harper v. Bowen, 854 F.2d 678, 681-682 (4th Cir. 1988). The second prong of the Coopers & Lybrand test, like the first prong (which requires that the legal issue be "conclusively determined"), prevents an appeal before all relevant legal and factual issues have been fully developed and resolved at trial; if the legal issue addressed by the district court's order is separate, there is much less chance that subsequent developments at trial will cast new light on the issue or prompt the court to reconsider it. In the instant case, however, there will be no further development of legal or factual issues by the district court at a trial, since the further proceedings ordered by the district court will be conducted in an administrative forum. Moreover, because any deviation by the Secretary from the legal standard imposed by the district court's remand order would itself be legal error (Sullivan v. Hudson, 109 S. Ct. at 2254), the validity of the widow's disability regulations will not be open for consideration in the administrative proceedings on remand (or, presumably, in proceedings in the district court on judicial review of the Secretary's new decision). Thus, the very nature of judicial review of agency action -- and of an order remanding a matter to the agency for further proceedings under different legal standards -- ensures that the legal issue resolved by the remand order will be sufficiently separate from the issues to be considered in further proceedings to satisfy the concerns underlying this Court's Coopers & Lybrand test. /10/ In Harper v. Bowen, 854 F.2d at 681, the court believed it was "possible" that the Secretary might be able to appeal the legal ruling embodied in the district court's remand order even if he was required to award benefits on remand under the different legal standards imposed by the district court. The court based that belief on its view that the Secretary must file the additional administrative record and decision on remand with the district court, and it suggested that the court could then enter a judgment in favor of the claimant on the basis of that additional record and decision and that the Secretary might be able to appeal from such a judgment. Contrary to the Fourth Circuit's view, however, nothing in 42 U.S.C. 405(g) requires the Secretary, after a remand based on legal error in the Secretary's first decision, to file with the district court a new decision in favor of the claimant. The only situation in which 42 U.S.C. 405(g) requires a further filing with the court is specified by the sixth sentence of Section 405(g), which applies where the district court remands the cause to the Secretary for the receipt of additional evidence before the court reaches the merits of the Secretary's decision. See Sullivan v. Hudson, 109 S. Ct. at 2254. It may also be appropriate for the Secretary to file his new decision with the district court following the distinct type of remand at issue here for the limited purose of enabling the district court to determine whether to award attorney's fees under the EAJA, since only then would the claimant be a prevailing party. Id. at 2254-2255. /11/ The Third and District of Columbia Circuits have construed Carson v. American Brands, Inc., 450 U.S. 79, 84-90 (1981), not to require a showing, in all circumstances, that an order granting an injunction must have serious and perhaps irreparable consequences in order to be appealable under 28 U.S.C. 1292(a)(1). See Cohen v. Board of Trustees of University of Medicine, 867 F.2d 1455, 1466-1468 (3d Cir. 1989); I.A.M. Nat'l Pension Fund v. Cooper Industries, Inc., 789 F.2d 21, 24 n.3 (D.C. Cir. 1986); see also Baltimore Contractors, 348 U.S. at 182 ("The appealability of routine interlocutory injunctive orders raised few questions."); P. Bator, D. Meltzer, P. Mishkin & D. Shapiro, The Federal Courts and the Federal System 1816-1817 (3d ed. 1988). But see Thompson v. Enomoto, 815 F.2d 1323, 1327 (9th Cir. 1987). /12/ See also Gold v. Weinberger, 473 F.2d 1376, 1378 (5th Cir. 1973). /13/ The term "judgment" is a term of art that "includes a decree and any order from which an appeal lies." Fed. R. Civ. P. 54(a). Accordingly, Congress's use of the term "judgment" in the fourth sentence of 42 U.S.C. 405(g) to encompass orders that remand the cause to the Secretary strongly supports the Secretary's right of appeal here. This conclusion is reinforced by the specification in the eighth sentence that the "judgment" of the district court (which necessarily includes those mentioned in the fourth sentence that remand the cause to the agency) "shall be final" and "shall be subject to review in the same manner as a judgment in other civil actions." /14/ We agree that such an order is not appealable, because it does not represent a final rejection of the Secretary's decision that is the subject of judicial review. See Perales, 412 F.2d at 48, citing Bohms v. Gardner, 381 F.2d 283 (8th Cir. 1967) (Blackmun, J.), cert. denied, 390 U.S. 964 (1968). The prior Third Circuit Social Security cases cited by the panel below were remands pursuant to the sixth sentence of 42 U.S.C. 405(g). See App., infra, 5a, citing Mayersky v. Celebrezze, 353 F.2d 89 (3d Cir. 1965); Marshall v. Celebrezze, 351 F.2d 467 (3d Cir. 1965). Moreover, in Bohms, Mayersky, and Marshall, the appeal from the remand order was taken by the claimant, not the Secretary. A number of courts have held that the claimant may not appeal a remand order under 28 U.S.C. 1291, since he may seek judicial review of any adverse decision of the Secretary on remand. See Dalto v. Richardson, 434 F.2d 1018 (2d Cir. 1970), cert. denied, 401 U.S. 979 (1971); Beach v. Bowen, 788 F.2d 1399 (8th Cir. 1986); Gilchrist v. Schweiker, 645 F.2d 818 (9th Cir. 1981); Farr v. Heckler, 729 F.2d 1426 (11th Cir. 1984); Howell v. Schweiker, 699 F.2d 524 (11th Cir. 1983); see also Occidental Petroleum, 873 F.2d at 331-332; Mall Properties, Inc. v. Marsh, 841 F.2d 440, 442-443 (1st Cir.), cert. denied, 109 S. Ct. 128 (1988); Memorial Hospital System v. Heckler, 769 F.2d 1043 (5th Cir. 1985). /15/ Act of Aug. 10, 1939, ch. 686, Section 201, 53 Stat. 1368. /16/ But cf. Whitehead v. Califano, 596 F.2d 1315, 1319 (6th Cir. 1979) (Secretary may not appeal remand order by magistrate where Secretary did not first appeal order to district court). /17/ The Seventh Circuit had expressed a similar view in dictum in an earlier decision under the Social Security Act that was cited in Perales. See 412 F.2d at 48, citing Jamieson v. Folsom, 311 F.2d 506, 507 (7th Cir.), cert. denied, 374 U.S. 487 (1963). /18/ Even the Third Circuit, in the Bachowski decision upon which the panel relied in this case, appeared to acknowledge the correctness of the Perales rule, while finding it inapplicable on the facts of Bachowski itself. 545 F.2d at 367 & n.16, 372-373. By contrast, the Third Circuit did not even cite Perales and its progeny in its decision in this case. /19/ The Eleventh Circuit, which is bound by Fifth Circuit precedents (see Bonner v. City of Prichard, 661 F.2d 1206, 1207 (11th Cir. 1981) (en banc)), has expressly followed the Fifth Circuit's Perales precedent in finding several remand orders appealable. See Pickett v. Bowen, 833 F.2d 288, 290-291 (11th Cir. 1987); Huie v. Bowen, 788 F.2d 698, 701-703 (11th Cir. 1986). In two other cases, however, it dismissed appeals by the Secretary in brief orders, without even citing Perales. See Jordan v. Heckler, 721 F.2d 349 (11th Cir. 1983); Biddle v. Heckler, 721 F.2d 1321 (11th Cir. 1983). Appendix