author: WARREN, District Judge.

text:
    Michael J. HUTCHINSON, Plaintiff, v. Margaret M. HECKLER, Secretary of Health and Human Services, Defendant.
    No. 82-C-593.
    United States District Court, E.D. Wisconsin.
    June 26, 1985.

      Thomas E. Bush, Milwaukee, Wis., for plaintiff.
    Melvin K. Washington, Asst. U.S. Atty., Milwaukee, Wis., for defendant.
   MEMORANDUM AND ORDER

WARREN, District Judge.

By its Order of July 16, 1984, the Court remanded this matter to the Secretary for further consideration of her decision that the plaintiff is no longer entitled to receive disability insurance benefits. The Court’s decision was based principally on its finding of no substantial evidence of the plaintiffs ability to perform a wide range of sedentary work and its concomitant conclusion that the Administrative Law Judge had erred in applying a Medical-Vocational Guideline Rule. On remand, the Administrative Law Judge determined that the plaintiff is, indeed, entitled to continuing disability insurance benefits under the Social Security Act—a finding adopted by the Appeals Council on December 10, 1984, thus constituting the Secretary’s final decision in this matter.

By its Order of April 30, 1985, the Court directed the Clerk of Court to enter final judgment that the plaintiff continues to be entitled to a period of disability and to the disability insurance benefits for which he had applied. The principal justification for the Court’s directive was its “[strong feeling] that such a practice is entirely appropriate if the plaintiff, as in this case, seeks to recover attorney’s fees pursuant to the Equal Access to Justice Act, 28 U.S.C. § 2412(d)(1)(A).” Court’s Order at 2 (April 30, 1985).

Presently before the Court in this matter are the plaintiff’s companion motions for authorization of attorney’s fees pursuant to 42 U.S.C. § 406(b) and for an award of attorney’s fees pursuant to the Equal Access to Justice Act, 28 U.S.C. § 2412. In support of his request for authorization under 42 U.S.C. § 406(b), counsel acknowledges the legitimate interest of the federal trial courts in scrutinizing authorization requests such as this but argues that the sum of $14,635.20 which he seeks in fees is wholly justified under the circumstances of the present case, as follows:

... I believe that it is a reasonable fee since this case was taken on a contingent fee basis, since more than one hundred hours of attorney time went into Mr. Hutchison’s federal court representation, since this fee is commensurate with some fees received for Social Security disability representation before the agency, and since Mr. Hutchison feels very strongly that his attorneys should be compensated in this amount____
Here, I don’t think that there can be any question but that my briefs and other submissions to the Court directly resulted in the remand decision. In my initial brief I focused on the fact that the evidence as summarized by the ALJ did not support a conclusion that Michael Hutchison was capable of a “full range of sedentary work.” Within a few months after my brief was submitted, the Social Security Administration itself issued Social Security Rulings 83-10 and 83-12 which were precisely on point. I immediately provided copies of these to the Court. These rulings formed the basis of the Magistrate’s recommendation to [the Court] in this case.

Letter Brief of Thomas E. Bush at 1 & 2 (May 8, 1985).

In addition, counsel notes that the present request for approval of full attorney’s fees in the amount of 25% of past due benefits is undertaken with the approval and encouragement of his client; in this context, counsel has provided the Court, under his affidavit of May 7, 1985, with a letter from the plaintiff, describing the tortuous procedural history of this case and offering his full support for authorization of the requested amount. In the body of his affidavit itself, plaintiff's attorney describes the nature and scope of his expertise in Social Security disability representation, itemizes those services provided in representing his client in this action, and explains the nature of the attorney-client relationship pursuant to which this action has been prosecuted. Finally, counsel has provided the Court with an accounting of those fees and services rendered by the attorney who initiated but did not complete the prosecution of the plaintiff’s claims.

Section 206(b)(1) of the Social Security Act, 42 U.S.C. § 406(b)(1), provides as follows:

Whenever a court renders a judgment favorable to a claimant under this title who was represented before the court by an attorney, the court may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of the total of the past due benefits to which the claimant is entitled by reason of such judgment, and the Secretary may, notwithstanding the provisions of section 205(i) [42 USC § 405(i) ], certify the amount of such fee for payment to such attorney out of, and not in addition to, the amount of such past due benefits. In case of any such judgment, no other fee may be payable or certified for payment for such representation except as provided in this paragraph.

The Court has carefully reviewed the fee petition submitted by plaintiff’s counsel in support of authorization under § 406(b) and concludes that all services rendered are both reasonable and justifiable in terms of the expenditures of time and resources necessary to the successful prosecution of this case.

Admittedly, the requested fee of $14,-635.20 is substantial and might, under other circumstances, be viewed as downright exorbitant. Nonetheless, as fully demonstrated by the materials submitted in support of the authorization request, the procedural and substantive history of this lawsuit has been both long and colorful. The Court feels strongly that present counsel— and, to the extent appropriate, the attorney responsible for initiating this action— should be fully compensated for the considerable, unrelenting efforts they undertook to ensure a successful prosecution of this matter. The wholehearted support given the present request by the plaintiff himself only serves to underscore the Court’s conclusion in this regard. Accordingly, the Court will direct the Clerk of Court to amend the judgment of April 30, 1985, in this matter, to permit plaintiff’s counsel to recover a reasonable fee for his services in this matter, not in excess of 25% of the total past due benefits to which the claimant is entitled—that is, $14,635.20—pursu-ant to 42 U.S.C. § 406(b).

In support of his companion petition for an award of fees under the Equal Access to Justice Act, 28 U.S.C. § 2412, the plaintiff notes that he is, indeed, the prevailing party pursuant to the judgment entered by the Clerk of Court on April 30, 1985, and that, at the time this action was initiated, his net worth was less than one million dollars. Most importantly, however, the plaintiff contends that the position adopted and argued by the Secretary in this litigation was not “substantially justified” as that phrase is used in 28 U.S.C. § 2412(d)(1)(A). The plaintiff s argument in this context is articulated as follows:

... At issue in this case was a defective administrative law judge’s decision which did not follow the Secretary’s own regulations in arriving at the conclusion that Michael Hutchison’s disability had ceased. The ALT found that Michael Hutchison was capable of “a full range of sedentary work.” With this finding the AU then applied the Medical-Vocational Guidelines and found Mr. Hutchison not disabled.
All of the medical evidence, however, even the summary of that evidence in the AU’s decision, indicated that Michael Hutchison did not have the capacity for prolonged sitting contemplated by the Social Security Administration’s definition of sedentary work. See 20 CFR § 404.1567(a). (See also the definition of light work in 20 CFR § 404.1567(b) which states that one found capable of light work also should be capable of doing sedentary work unless there is an “inability to sit for long periods of time.”) Despite this rather clear definition of “sedentary work”, the Secretary’s Memorandum in Support of Defendant’s Motion for Summary Affirmance of September 30,1982, stated on page 7 that sedentary work “involves alternative sitting and standing positions____” It is difficult for me to see how the Secretary’s misstatement of her own definition of “sedentary work” in this proceeding can be substantially justified____

Letter Brief of Thomas E. Bush at 4 (May 7, 1985).

The plaintiff further characterizes as obfuseatory two subsequent memoranda of law filed by the Secretary in support of summary affirmance of her position; in fact, plaintiff’s attorney finds it “difficult to imagine a private attorney familiar with the Social Security disability decision-making process and regulations advising fighting this case on any basis other than ‘maybe the other side won’t notice the problem with the ALJ’s decision.’ ” Letter Brief of Thomas E. Bush at 5 (May 7, 1985). In the end, it is the movant’s position that the government’s defense of the Secretary’s decision on that basis was wholly inappropriate and, as such, lacks any substantial justification.

Significantly, although she has been afforded fourteen days from the date of receipt of the plaintiff’s motion in which to file an answering brief, as prescribed by Local Rule 6.01, the Secretary has failed to interpose any responsive memorandum. Accordingly, the Court today resolves this pending matter based solely on the extensive record compiled to date and the numerous materials submitted by plaintiff's counsel in support of his client’s fee request.

The Equal Access to Justice Act provides, in pertinent part, as follows:

Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses, in addition to any costs awarded pursuant to subsection (a), incurred by that party in any civil action (other than cases sounding in tort) 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.

28 U.S.C. § 2412(d)(1)(A). At the time the statute was enacted, it was clearly experimental in nature—an attempt to extend application of existing common law and statutory exceptions to the American Rule on attorney’s fees to the Government and, in addition, to require the award of fees in those circumstances described in § 2412(d)(1)(A). Alspach v. District Director of Internal Revenue, 527 F.Supp. 225, 227 (D.Md.1981). The Court of Appeals for the Seventh Circuit has described the several purposes of the Act this way:

The EAJA was enacted largely to encourage individuals and small businesses to litigate against the government adverse determinations in administrative proceedings and civil actions, regardless of the cost of such litigation. In view of the traditional American Rule regarding attorneys’ fees, however, Congress concluded that, if it were to facilitate a prevailing private party’s obtaining reimbursement for his or her legal expenses, then individuals and small businesses would be less likely to be deterred from challenging government action due to the high cost of civil litigation____
The EAJA also has a parallel objective of deterring the government from pursuing litigation—either in initiating it or defending against it—when the government’s position is not substantially justified. According to House Report 1418, the prevailing bill—S. 265—“rests on the premise that a party who chooses to litigate an issue against the Government is not only representing his or her own vested interest but is also refining and formulating public policy.” H.R.Rep. No. 1418, 96th Cong., 2nd Sess. 9, 10, reprinted in 1980 U.S.Code Cong. & Admin.News 4984. Litigation against the government, for example, can correct an erroneous agency rule or “provide a vehicle for developing or announcing more precise rules.” H.R.Rep. No. 1418, supra, at 10.
House Report 1418 also indicates that Congress intended the EAJA to apply to appeals to the federal courts under the Social Security Act, although attorneys’ fees are not available in administrative proceedings under that Act. H.R.Rep. No. 1418, supra, at 12 [additional citations omitted]____
The EAJA accordingly was enacted to establish a general statutory exception for awarding attorneys’ fees to parties who prevail against the government. This was intended to be accomplished by “permit[ting] a court in its discretion to award attorneys’ fees and other expenses to prevailing parties in civil litigation involving the United States to the same extent it may award fees in cases involving other parties.” H.R.Rep. No. 1418 supra, at 9.

Berman v. Schweiker, 713 F.2d 1290, 1295-1296 (7th Cir.1983).

Because the statute thus represents a limited waiver of sovereign immunity, its several limitations and conditions must be strictly observed and exceptions are not to be implied. Rhode Island Committee on Energy v. General Services Administration, 561 F.2d 397, 405 (1st Cir.1977) (quoting Soriano v. United States, 352 U.S. 270, 276, 77 S.Ct. 269, 1 L.Ed.2d 306 (1957)). Accordingly, despite the Government’s silence in the wake of the plaintiff’s present request, the Court is obliged to determine on its own initiative whether the movant qualifies for an award of attorney’s fees under the Equal Access to Justice Act.

As a threshold matter, the Court must find that the movant is “a prevailing party”—a phrase broadly construed and not limited to a victor only after the entry of final judgment following a full trial on the merits. United States for Heydt v. Citizens State Bank, 668 F.2d 444, 447 (8th Cir.1982). In the wake of the Secretary’s decision of December 10, 1984, that the claimant continues to be entitled to disability insurance benefits under the Social Security Act, it is clear the plaintiff in this action is the “prevailing party.” See McGill v. Secretary of Health & Human Services, 712 F.2d 28, 30 (2d Cir.1983), cert. denied, — U.S. -, 104 S.Ct. 1420, 79 L.Ed.2d 745 (1984) (“claimant prevails where it is determined that claimant is entitled to benefits”); cf., Andino v. Heckler, 609 F.Supp. 293, 295 (E.D.Wis.1985) (Reynolds, C.J.) (“[A] claimant who is awarded and receives benefits after remand from the district court is entitled to the entry of final judgment as the prevailing party”). The plaintiff’s prevailing status was further confirmed by this Court’s Order of April 30, 1985.

As an additional threshold requirement, the Court must find that the movant is “an individual whose net worth did not exceed $1,000,000 at the time the civil action was filed”—a prerequisite to recovery embodied in subsection (d)(1)(B) & (2)(B) of the statute. To meet this prerequisite, the plaintiff has provided the Court with an affidavit, pursuant to the filing requirements of subsection (d)(1)(B), establishing his net worth of less than $1,000,000 at the time he filed his complaint.

The critical issue to be considered by the Court is, as the plaintiff recognizes in his motion papers, whether “the position of the United States was substantially justified or ... special circumstances make an award unjust.” 28 U.S.C. § 2412(d)(1)(A). The test for determining substantial justification is essentially one of reasonableness; if the Government can demonstrate a reasonable basis for litigating the dispute, both in law and in fact, no award of attorneys’ fees can be made. Ellis v. United States, 711 F.2d 1571, 1575-76 (Fed.Cir.1983).

In the application of this test, the Government bears the burden of proving substantial justification for its position. Dougherty v. Lehman, 711 F.2d 555, 561 (3rd Cir.1983). While there is no presumption that the Government’s position is not substantially justified simply because it lost the case, it must nonetheless make a “strong showing” regarding the viability of its position if it is to overcome a motion for an award of fees. Watkins v. Harris, 566 F.Supp. 493, 498 (E.D.Pa.1983).

Under the circumstances of the present case—and absent any showing at all regarding the viability of the Government’s position—the Court must conclude that there was no substantial justification for the defense of the Secretary’s decision. As the parties to this action acknowledged in their briefs in support of their petitions for summary judgment, the central issue presented by this challenge to the Secretary’s finding of nondisability was whether the plaintiff did, in fact, regain the residual functional capacity for a full range of sedentary work. Based on that pivotal finding, the first administrative law judge to hear this case applied a Medical-Vocational Guideline Rule to determine that the plaintiff was no longer entitled to the disability insurance benefits he had been receiving.

Nonetheless, there was uncontested medical evidence in the record to indicate that the claimant was unable to engage in sustained sitting, standing, or walking on a prolonged basis absent some change in physical activity—evidence upon which the claimant principally relied in arguing for summary reversal. As the plaintiff accurately noted in his Rule 56 motion and again in his supplemental submission to the Court, the Secretary’s finding of nondisability in this matter was discredited significantly by her own regulations defining both sedentary work and the process for evaluating claims of individuals who must alternatively sit and stand. See 20 C.F.R. § 404.1567(a) & (b); Social Security Ruling 83-10 & 83-12. The considerable factual and legal difficulty with the position adopted by the Secretary and pursued throughout this litigation was explicitly recognized by Magistrate Robert L. Bittner in his Recommendation of April 24, 1984, concluding that the Secretary had failed to meet her burden of proof that the plaintiff had regained the residual functional capacity to engage in a full range of sedentary work.

The unequivocal nature of the evidence in this matter was most recently underscored by the decision of the Administrative Law Judge on remand, finding that the claimant is, indeed, entitled to a continuing period of disability and to disability insurance benefits. Among other things, the Administrative Law Judge concluded, as follows, that the claimant does suffer from an impairment that severely restricts his ability to engage in work-related functions:

... In particular, Exhibits 20 and 32, which include reports of examinations by the Curative Workshop and Dr. David Shapiro, dated July 10, 1980 and August 27, 1981, respectively, demonstrate the limitations in the claimant’s residual functional capacity as a result of the residuals from his lumbar laminectomy, such that the claimant would not be able to perform any work which would involve excessive lifting, stooping, or bending, or work which would not allow a change in position after a short period. Specifically, the Curative Workshop assessment noted that the claimant would be able to stand, sit, or walk, but only for short periods of time in any one position. Also, the assessment noted the claimant’s variation in periods of tolerance of given activities, as well as his variable range of motion. Dr. Shapiro’s assessment was essentially a confirmation, in that it indicated that the claimant’s abilities to stand, walk, bend, squat, kneel, sit, or walk up or down stairs would not be particularly limited, if they were performed “on an intermittent basis.” ...
Based on the forgoing, the undersigned concludes and finds that the claimant suffers from a severe impairment, but that it does not meet the requirements of any impairment listed in Appendix 1 to Subpart P of Regulations No. 4, nor does it approach the level of severity contemplated by Appendix 1. However, the claimant suffers recurrent extended periods of intense pain of disabling severity, such that he would be incapable of performing even sedentary work on a regular, sustained basis. Such a residual functional capacity would preclude the performance not only of the claimant’s past relevant work, but also of any other jobs, of either a skilled, semiskilled, or unskilled nature, which exist in significant numbers in the regional or national economy.

Decision of Administrative Law Judge at 5-6 (September 10, 1984). In short, the record as a whole provides strong support for the conclusion that this plaintiff remains unable to perform sedentary work and, accordingly, that the Secretary’s attempt to justify her decision in the post-administrative stage of this case was, indeed, substantially unjustified.

Although the arguments articulated by the Government in support of their motion for summary affirmance were not wholly without merit, the Court concurs in the view advanced by the plaintiff that the Secretary’s attempt to explain and justify her decision denying benefits cannot be squared with her own regulations defining sedentary work and the process for evaluating an individual unable to sit, stand, or walk without intermittent changes in position or activity. Nothing in the unpublished decision of the United States Court of Appeals for the Seventh Circuit in Marlow v. Schweiker, 714 F.2d 148 (7th Cir.1983), provides any gloss on those definitional prerequisites that might reasonably be understood to support the Secretary’s finding of nondisability in this matter. As an aside, the Court notes its inclination to believe that the Secretary’s decision not to respond to the present motion for an award of attorney’s fees under the Equal Access to Justice Act, 28 U.S.C. § 2412, represents some tacit acknowledgment that the position adopted by the Government at the administrative level and pursued through this litigation was, indeed, largely unsupported by the relevant legal standards and the medical evidence adduced in support of the plaintiff’s claim of disability.

Because it concludes that the Secretary’s position in this case was not sufficiently “solid” to justify the proffered defense, see McDonald v. Schweiker, 726 F.2d 311, 316 (7th Cir.1983) (“... [T]h'e government must have a solid though not necessarily correct basis in fact and law for the position that it took in this action”), the Court will grant the motion for an award of attorney’s fees in the amount of $5,047.50, pursuant to the Equal Access to Justice Act, 24 U.S.C. § 2412.

CONCLUSION

For the reasons articulated above, the Court hereby DIRECTS the Clerk of Court to amend the judgment of April 30,1985, in this matter, to authorize the payment of attorney’s fees in the total amount of $14,-635.20, pursuant to 42 U.S.C. § 406(b). The Court further DIRECTS the Clerk of Court to amend the judgment of April 30, 1985, to grant attorney’s fees in the amount of $5,047.50, pursuant to 24 U.S.C. § 2412.

      . Incorporated in the extensive 1980 amendments to the Equal Access to Justice Act was a so-called "sunset" provision, repealing subsection (d) of the statute effective October 1, 1984, "except that the provisions of that subsection shall continue to apply through final disposition of any action commenced before the date of repeal.” On October 11, 1984, the Congress attempted to rescue the Equal Access to Justice Act from oblivion in a form which would have substantially broadened the scope of the Government’s potential liability. Among other things, H.R. 5479, in the version with which the Senate finally concurred, would have established clearly the standard for determining whether the Government's position is "substantially justified": The "position" to be considered would include the prior administrative action that led to the adversary adjudication—not merely the Government’s litigation posture.
      On November 8, 1984, however, the President effected a pocket veto of the legislation by issuing a memorandum of disapproval of certain statutory changes incorporated in H.R. 5479. At the same time, the President expressed his commitment to the policies underlying the Equal Access to Justice Act and announced that he would support its prompt reauthorization by the new Congress, retroactively effective to October 1, 1984.
      While 28 U.S.C. § 2412(d) is thus presently unavailable as to actions initiated on or after October 1, 1984, it is clear that the "sunset” provision does not preclude an award of attorneys’ fees in this case, commenced on May 14, 1982.

      . For purposes of clarity, the Court notes that the effect of today’s order, granting attorney’s fees under both 42 U.S.C. § 406(b) and 28 U.S.C. § 2412, is to require the payment of $14,635.20 to plaintiffs attorney, Thomas E. Bush, from the total amount of the past due benefits to which the plaintiff is entitled. Pursuant to the terms of the Equal Access to Justice Act, the sum of $5,047.50 will be paid directly to the plaintiff, effectively reimbursing him for some portion of the fees authorized for payment to his attorney under 42 U.S.C. § 406(b).


source: Caselaw Access Project

author: PETTINE, Senior District Judge.

license: Public Domain

text:
    Horace ALEXANDER v. Margaret M. HECKLER, Secretary of Health and Human Services.
    Civ. A. No. 81-0778 P.
    United States District Court, D. Rhode Island.
    June 26, 1985.
    David B. Green, Providence, R.I., for plaintiff.

      Everett C. Sammartino, Asst. U.S. Atty., Providence, R.I., for defendant.
   MEMORANDUM AND ORDER

PETTINE, Senior District Judge.

The plaintiff in this action has moved this Court to award him attorney’s fees under the Equal Access to Justice Act (E.A.J.A.), 28 U.S.C. § 2412. The matter was referred to the United States Magistrate pursuant to 28 U.S.C. § 636(b)(1)(B). After considering the parties’ respective arguments, the magistrate issued a recommendation to this Court to grant the plaintiff’s motion. The defendant filed a timely objection and supporting memorandum. I must now decide whether or not to accept the magistrate’s recommendation.

The plaintiff’s motion for attorney’s fees raises two principal issues. Under the E.A. J.A., a prevailing party in a civil action brought by or against the United States or any agency thereof shall be entitled to fees after a final judgment has been rendered if the position the United States asserted in that action was not substantially justified. 28 U.S.C. § 2412. The party seeking the fee award must submit its application to the court “within thirty days of the final judgment in the action.” Id. The defendant in the instant action objects to the plaintiff’s request for fees on the grounds that (1) the plaintiff’s application was not timely filed; and (2) in any event, the United States’ position was substantially justified. For reasons that shall become apparent through my disposition of this motion, I find it necessary and appropriate to address only the timeliness issue at this juncture.

BACKGROUND OF THE CASE

A brief chronology of the procedural history of this case is warranted in order to adequately understand the timeliness issues it raises. Horace Alexander, the plaintiff here, applied to the Social Security Administration for disability benefits on August 14,1980. The Administration originally denied his request, and the decision was reconsidered and upheld on November 30, 1980. A hearing on the matter was conducted before an Administrative Law Judge (A.L.J.) in Providence, Rhode Island on May 14, 1981. On May 18, 1981, the A.L.J. held that Alexander was not entitled to benefits prior to June, 1979 because the record lacked evidence that his impairment was sufficiently severe before that date to preclude him from engaging in gainful employment. On October 26, 1981, the Appeals Council affirmed the A.L.J.’s decision, thereby rendering it the final decision of the Secretary of Health and Human Services (Secretary).

On December 23, 1981, the plaintiff filed the instant action in this Court pursuant to the Social Security Act, 42 U.S.C. § 405(g), seeking judicial review of the Secretary’s decision. On January 20, 1983, I accepted a recommendation of the United States Magistrate to affirm the administrative disposition. The plaintiff appealed my ruling, and on August 9, 1983, the United States Court of Appeals for the First Circuit reversed the court order and remanded the cause to the Secretary for further proceedings consistent with its opinion. The court found that A.L.J. erroneously based his conclusions on the absence of a medical report, even though the plaintiff's treating physician testified at the hearing as to its contents and affirmatively indicated that the disability existed prior to the date in question. The court noted that the A.L.J., “if he had doubts concerning the 1978 report, should have specifically requested the claimant to produce it before relying on its absence as a reason for denying benefits.” Alexander v. Heckler, No. 83-1132, slip op. (1st Cir. Aug. 9, 1983).

On remand, the Secretary entered a decision favorable to the plaintiff and the plaintiff was notified of that decision on March 19, 1984. Accordingly, on May 2, 1984, the United States Attorney’s office communicated with plaintiff’s counsel to request that the district court action be dismissed. The plaintiff refused. Instead, he filed a motion in early January of 1985 to compel the Secretary to file with this Court notice and a transcript of the most recent administrative decision, purportedly in accordance with the requirements of the Social Security Act. That motion was denied. Finally, on January 30, 1985, the plaintiff made the fees application which is the subject of the immediate controversy.

The plaintiff argues that his fee request is not untimely since a final judgment in this action was never entered by this Court. The defendant argues that a final judgment has indeed been rendered, although she has not definitively specified when and how. She apparently contends that the final judgment was the August 9 Circuit Court order remanding the case to the Secretary or, in the alternative, it was the March 16 decision of the Administration on remand. Under either circumstance, she argues, the plaintiff requested fees long after the thirty days limitations period expired.

DISCUSSION

After examining the procedural history of this case, I concur with the plaintiffs conclusion that a final order has not, as yet, been issued in this case. The government’s contention that the decision of the Social Security Administration on remand constituted a final judgment within the meaning of E.A.J.A. is erroneous. First, a decision of the Social Security Administration is simply not a judgment within the common definition of the term, and as such, cannot logically be construed as a “final judgment” necessary to trigger the E. A.J.A. filing limitation. See Guthrie v. Schweiker, 718 F.2d 104, 106 (4th Cir.1983); Baily v. Heckler, 580 F.Supp. 33, 34 (W.D.N.C.1984). Second, the scope of the E.A.J.A. itself compels the conclusion that only a judicial order can constitute a final judgment. The Act, while it allows for fee awards in civil actions to review Social Security Administration decisions, does not cover expenses incurred incident to the administrative proceedings themselves. Guthrie, 718 F.2d at 107; Berman v. Schweiker, 713 F.2d 1290, 1295-1296, nn. 12 and 25 (7th Cir.1983); McGill v. Secretary of Health & Human Services, 712 F. 2d 28, 30 (2d Cir.1983), cert. denied, — U.S. -, 104 S.Ct. 1420, 79 L.Ed.2d 745 (1984). It is axiomatic, therefore, that the final judgment referred to in the Act must be a judicial and not an administrative order. Cf. McDonald v. Schweiker, 726 F.2d 311 (7th Cir.1983) (final judgment should be construed as either the order of the district court or the judgment of the appellate court).

I also reject the government’s assertion that the August 9 order to remand the case to the Secretary for further proceedings was a final judgment of the district court. As the First Circuit has recently noted, a remand order is generally “an interlocutory order that does not divest a court of jurisdiction.” Avery v. Secretary of Health and Human Services, 762 F.2d 158, 163 (1st Cir.1985). A district court order which neither grants nor denies the relief a plaintiff seeks under § 405(g), but instead remands the case to the Secretary for further consideration, is indeed an interlocutory ruling. Zambrana v. Califano, 651 F.2d 842, 844 (2d Cir.1981), citing Dalto v. Richardson, 434 F.2d 1018 (2d Cir.1970), cert. denied, 401 U.S. 979, 91 S.Ct. 1211, 28 L.Ed.2d 330 (1971). But cf. Burt v. Heckler, 593 F.Supp. 1125, 1132 (D.N.J.1984) (holding that certain remand orders, while not technically final judgments, should trigger entitlement to fees).

In addition to the fact that a remand order is not a final judgment in a technical sense, to deem it such for purposes of initiating the filing deadline for a fees request under E.A.J.A. would place worthy plaintiffs in an untenable position. The Act allows fees only for prevailing parties. A plaintiff will have prevailed on his claim only if the Administration awards his requested benefits on remand. See Brown v. Secretary of Health and Human Services, 747 F.2d 878, 881 (3rd Cir.1984); McGill, supra, 712 F.2d at 32; Miller v. Schweiker, 560 F.Supp. 838, 840 (M.D.Ala.1983); Roman v. Schweiker, 559 F.Supp. 304, 305 (E.D.N.Y.1983). Since a rehearing typically would not be held within thirty days of the district court’s remand order, if that order were deemed the final judgment of the court, the plaintiff would be effectively precluded from making a timely request for fees.

Since the remand order was not a final judgment and because this Court has entered no additional orders affirming, modifying, or reversing the Secretary's decision on remand, it is clear that a final judgment has not yet been entered in this case. The plaintiff’s petition for fees under the E.A. J.A., therefore, cannot possibly be time barred. Ironically, however, the second administrative decision in which the plaintiff prevailed, and which the government apparently does not intend to contest, was rendered fifteen months ago. I am thus faced with the obvious and problematic question of when and how, in a case such as the one now before me, a final judgment is to be entered so the plaintiff may properly make his application for fees.

The proper order constituting a final judgment in a review of the Secretary’s decision under the Social Security Act is an order affirming, modifying, or reversing the original administrative decision, or if the case is remanded, the decision on remand. Even if, as here, a Social Security claimant receives benefits on remand, the case must still return to the district court. In that case, the final judgment would most likely be entered in the form of an affirmance of the administrative decision. Indeed, the Secretary herself has argued in another case that these are the proper procedural steps to be taken pursuant to a remand order. See Brown, supra, 747 F.2d at 884.

In order for this Court to enter a final judgment after remand, however, it must have some notification of the Secretary’s subsequent disposition of the case. Such information has not been filed with this Court in the instant action. Accordingly, I order the Secretary, consistent with the directives of 42 U.S.C. § 405(g), to file its decision and findings of fact on remand, as well as a transcript of the record of those proceedings.

The government points out that the provision of § 405(g) to which I refer does not specifically apply to the instant case, but rather requires a filing by the Secretary only when the case is remanded by the district court either on the Secretary’s motion or for the express purpose of hearing additional evidence. The relevant portion of the Social Security Act is as follows:

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 there is good cause for failure to incorporate such evidence into the record in the 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 modifying or affirming was based.

42 U.S.C. § 405(g).

Although the statutory language does not explicitly address the scenario presented by the instant ease, it is not necessary that Congress have anticipated every procedural variation of a remand order. It is irrelevant that a district court may have independently ordered a case remanded for reconsideration while retaining jurisdiction, rather than remanded it for consideration of new evidence as specifically discussed in § 405(g). The requirement that the Secretary file a record of the subsequent proceedings with the district court is, in either case, equally necessary to enable to court to render a final judgment. Accordingly, I hold that the requirements of § 405(g) are applicable by virtue of a simple analogy to all remand orders. Accord Brown, supra, 747 F.2d at 884 (holding that provisions govern all remand orders at the behest of the Secretary).

Having determined that a final order has not yet been entered in this action, I must dismiss the plaintiffs petition for fees as premature. The motion shall be dismissed without prejudice, however, and the plaintiff may reinstitute his request within 30 days of a final judgment. I hereby order the Secretary of Health and Human Services to file with this Court a notice of the March 16 administrative decision and the record of that proceeding within 30 days. After the filing, the plaintiff may make appropriate motions to this Court for entry of a final judgment in the matter.

      . I recognize that other federal courts have adopted the position that a plaintiff is a prevailing party if he merely achieves a remand. See e.g., Gartner v. Soloner, 384 F.2d 348, 355 (3d Cir.1967), cert. denied, 390 U.S. 1040, 88 S.Ct. 1633, 20 L.Ed.2d 302 (1968). For example, in Burt v. Heckler, supra, 593 F.Supp. at 1132, the district court for the district of New Jersey considered a plaintiff to be a "prevailing" party upon the issuance of a remand order because the order embodied specific instructions to the Secretary which would inevitably yield an administrative decision favorable to the plaintiff. Although this approach may well be appropriate under particular circumstances, I would not endorse it as a general rule for fees entitlement.

      . Citing McDonald, supra, 726 F.2d at 311, plaintiff asserts that this claim is not premature because a claimant may apply for fees before an ultimate decision is rendered. McDonald is inapposite to the plaintiff’s case however, since that decision merely held that fairness and judicial economy require that a plaintiff be allowed to seek fees within 30 days of either a district court judgment or the judgment on appeal, regardless of which is technically the final judgment. Id.


author: BUA, District Judge.

text:
    P-K TOOL & MFG. CO., Plaintiff, v. GENERAL ELECTRIC COMPANY, Defendant.
    No. 85 C 1297.
    United States District Court, N.D. Illinois, E.D.
    June 26, 1985.

      Robert E. Zeitner, Chicago, 111., for plaintiff.
    Joseph J. Hasman, Ernest W. Irons, Jack Daulton, Peterson, Ross, Schloerb & Seidel, Chicago, 111., for defendant.
   MEMORANDUM ORDER

BUA, District Judge.

Defendant, General Electric Company (“G.E.”), has moved this Court for an order dismissing Count II of plaintiff’s, P-K Tool & Mfg. Co. (“P-K”), complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Plaintiff has moved for leave to file an amended complaint. For the reasons stated below, P-K’s motion for leave to file an amended complaint is granted. G.E.’s motion, considered as a motion to dismiss Count II of the amended complaint, is granted.

I. FACTS

In considering a motion to dismiss under Rule 12(b)(6), a complaint should not be dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim that would entitle him to the relief requested. Cruz v. Beto, 405 U.S. 319, 322, 92 S.Ct. 1079, 1081, 31 L.Ed.2d 263 (1972). The following facts are alleged by P-K in its amended complaint. For purposes of this motion, the Court assumes they are true. City of Milwaukee v. Saxbe, 546 F.2d 693, 704 (7th Cir.1976).

In 1974 G.E. sought to obtain a second source for the purchase of a metal stamping referred to as “the blade.” The same year P-K quoted G.E. tooling and production prices for the blade. P-K alleges that G.E. accepted the terms and conditions of P-K’s quotation, including the condition that G.E. leave the tooling with P-K for the first 3,000,000 pieces of the blade. P-K alleges that it furnished the necessary tooling work in 1976 under a G.E. purchase order. During 1977 and early 1978, P-K further alleges that it performed purchasing, manufacturing and testing services for G.E. As a result of these services, G.E. changed its material specifications, which led to an improved manufacturing process and greater uniformity in the blade. P-K claims that the reasonable value of these services is $5,000, and that G.E. would be unjustly enriched if it was allowed to retain this benefit, without being required to pay for them.

P-K also alleges that to produce the blade, G.E. required P-K to purchase raw material in billets of steel which met specific G.E. standards. A billet produces approximately 400,000 to 460,000 pieces of the blade. P-K alleges that in 1978, G.E. authorized P-K to purchase a billet of steel. Furthermore, in May of 1978, October of 1979 and March of 1981, P-K made purchases of raw materials pursuant to releases on open ended purchase orders placed by G.E. P-K alleges that in December of 1983, G.E., without prior notice, notified P-K that no further releases for the blade would be issued, and in doing so breached their contract. In Count II of the amended complaint, P-K seeks payment for the services furnished in 1977 and early 1978 on a quantum meruit basis.

In support of its motion to dismiss Count II, G.E. argues that P-K’s quantum meruit claim, being a claim on an implied contract, is subject to the five-year statute of limitations period within Section 13-205 of the Illinois Code of Civil Procedure, which governs “actions on unwritten contracts, expressed or implied.” G.E. further argues that because P-K’s complaint was filed in February of 1985, more than six years after the services were completed, the claim is barred.

In response, P-K argues that its claim did not accrue until December of 1983, because the services were performed under one continuous contract, which was not breached until that December of 1983. P-K therefore contends that the complaint was filed within the required statutory period. G.E., however, argues that when services are performed to gain a business advantage or enhance an already existing contract, quantum meruit recovery is not possible. Accordingly, G.E. argues that not only does the amended complaint fail to cure the statute of limitations problem, but it also destroys the substantive merits of P-K’s quantum meruit claim.

II. DISCUSSION

Recovery predicated on a quantum meruit theory is a claim “on a contract implied by law.” Edens View Reality & Investment, Inc. v. Heritage Enterprises, Inc., 87 Ill.App.3d 480, 42 Ill.Dec. 360, 408 N.E.2d 1069, 1075 (1st Dist.1980). Section 13-205 of the Illinois Code of Civil Procedure, Ill.Rev.Stat. ch. 110, § 13-205 (1983), provides:

“actions on unwritten contracts, expressed or implied, or on awards of arbitration, or to recover damages for an injury done to property, real or personal, or to recover the possession of personal or damages for the detention or conversion thereof, and all civil actions not otherwise provided for, shall be commenced within 5 years next after the cause of action accrued.”

A quantum meruit claim based on a contract implied by law is therefore subject to the five-year statute of limitation period under Section 13-205 of the Illinois Code of Civil Procedure.

A cause of action on an oral contract or on a quantum meruit theory accrues when the services are completed. Schmidt v. Desser, 81 Ill.App.3d 940, 37 Ill.Dec. 206, 401 N.E.2d 1299 (1st Dist.1980). The services for which P-K seeks payment were performed in 1977 and early 1978. P-K filed its complaint in February of 1985, more than six years from the time when the services were completed. Therefore, without more, P-K’s quantum meruit claim is barred by Section 13-205 because the complaint was not filed within the required five-year period.

P-K, however, argues that its cause of action accrued in December of 1983, and not in early 1978. P-K bases this argument on the theory that the services were performed under one continuous contract which was not breached until December of 1983. For this reason, P-K contends that the complaint was filed within the required statutory period.

The Court finds that this argument not only fails to cure the statute of limitations problem, but it also destroys the substantive merit of the claim. Quantum meruit relief cannot be obtained where the benefit is conferred officiously or gratuitously or where the services were rendered to gain a business advantage or where the defendant could not have reasonably believed that the plaintiff expected a fee. Euramca Ecosystems v. Roediger Pittsburgh, Inc., 581 F.Supp. 415 (1984). Also, “as a general rule, quasi contractual claims such as quantum meruit cannot arise when a contract exists between the parties concerning the identical subject matter upon which the quasi-contractual claim rests.” Euramca Ecosystems v. Roediger Pittsburgh, Inc., 581 F.Supp. 415 (1984); Industrial Lift Truck v. Mitsubishi International Corp., 104 Ill.App.3d 357, 60 Ill.Dec. 100, 432 N.E.2d 999 (1982). In Industrial, the plaintiff sought recovery for services it performed not expressly covered under the contract between the parties. The plaintiff in that case developed design changes to the defendant’s benefit. There, the court stated that “[pjarties to a contract often perform services not expressly demanded by the contract. They do so to enhance their position under the contract and not because they expect a different renumeration for those services from what they could receive under the contract.” Industrial, supra, 432 N.E.2d at 1002. That court further stated that “the benefit received by defendant can hardly be considered unjust.” Id. at 1003. In this case, P-K performed the services under an existing contract with G.E. The services were not expressly covered by the contract between the parties. Since P-K furnished the services to enhance its position under the contract, relief is not available under a quantum meruit claim. Industrial Lift Truck v. Mitsubishi International, Corp., 104 Ill.App.3d 357, 60 Ill.Dec. 100, 432 N.E.2d 999 (1982). P-K, by amending its complaint, not only failed to overcome the statute of limitations defense, but also destroyed the substantive merit of its quantum meruit claim. Therefore, G.E.’s motion to dismiss Count II of the amended complaint is granted.

III. CONCLUSION

P-K is granted leave to file its amended complaint. G.E.’s motion, considered as a motion to dismiss Count II of the amended complaint, is granted.

IT IS SO ORDERED.

      . The amended complaint does not add new factual allegations but rather incorporates by reference paragraphs 12 through 22, inclusive, of Count I into Count II. Plaintiffs Answering Memorandum, at ¶ 10.


author: GERALD J. WEBER, District Judge.

text:
    McKEESPORT HOSPITAL, Plaintiff, v. Margaret M. HECKLER, Secretary of Health and Human Services, and Carolyne K. Davis, Ph.D., Administrator, Health Care Financing Administration, Department of Health and Human Services, Defendants. GREENE COUNTY MEMORIAL HOSPITAL, Plaintiff, v. Margaret M. HECKLER, Secretary of Health and Human Services, Defendant.
    Civ. A. Nos. 82-897, 82-1609.
    United States District Court, W.D. Pennsylvania.
    June 26, 1985.

      Jack Mumford, Duane Morris & Hecksher, Harrisburg, Pa., Seymour Schafer, Markel Schafer Means, Pittsburgh, Pa., for plaintiff in Civ. A. No. 82-897.
    J. Alan Johnson, U.S. Atty., Pittsburgh, Pa., for defendant in both eases.
    Diane Moskal, Asst. Regional Counsel, Philadelphia, Pa., for defendant in Civ. A. No. 82-897.
   INTRODUCTION

GERALD J. WEBER, District Judge.

These cases grew out of the Secretary’s denial of Medicare reimbursement to many hospitals around the country for certain expenses. In the interim between the time plaintiffs filed these cases and the present, the primary issue has been aired before four circuits of the Court of Appeals, various district courts, and review boards. During this time, both parties have worked diligently to keep the court abreast of the latest developments by submitting voluminous briefs and updates. Thus prepared to consider the matter, we will address the parties’ cross-motions for summary judgment. There is no dispute over relevant facts.

In these cases we face two types of claims for reimbursement. The first involves both plaintiffs and focuses on the Secretary’s revised consideration of the expenses attributed to mothers about to give birth, the labor/delivery patients. The second issue applies only to Greene Hospital and concerns the Secretary’s refusal to reimburse certain expenses of Greene’s employee sick leave program.

I. THE LABOR/DELIVERY ISSUE.

A. Regulatory Background.

The Medicare program subsidizes the medical care of elderly and disabled citizens. Medicare beneficiaries obtain treatment from health care providers, primarily hospitals, which participate in the program by choice. The Government typically reimburses these providers through “fiscal intermediaries” such as Blue Cross. The fiscal intermediaries function under contract with the Department of Health and Human Services (“HHS”). 42 U.S.C. § 1395.

As one might expect of a national program with a budget in the tens of billions, Medicare reimbursement is controlled by a complex system of regulations. In reimbursing health care providers, the Secretary generally pays the reasonable cost of services rendered to Medicare patients. Section 1395f(b)(l). Reasonable cost is defined as “the cost actually incurred excluding therefrom any part of incurred cost found to be unnecessary in the efficient delivery of needed health services and shall be determined in accordance with regulations establishing the method or methods to be used.” Section 1395x(v)(l)(A). In further breaking down reasonable cost, the regulations distinguish the respective costs of “routine services” and “ancillary services.” Routine services are those for which no additional charge above the customary fee is made and which every inpatient uses; room, food, and nursing care, for example. 42 C.F.R. § 405.452(d)(2). Ancillary services are those involving discrete added costs which are specific to each patient, such as blood tests, x-rays, and CAT scans. 42 C.F.R. § 405.452(d)(3). The Secretary follows a two-step formula in reimbursing reasonable costs which perhaps is best understood when expressed mathematically.

1. Total cost of routine services _ average cost
Total number of inpatient days ~ per diem
2. (Average cost per diem) x (number of Medicare beneficiary inpatient days) = amount reimbursed.

See Saint Mary of Nazareth Hospital Center v. Schweiker, 718 F.2d 459, 462 n. 7 (D.C.Cir.1983).

B. Factual Background.

Labor/delivery services are considered to be ancillary, not routine; that is, such services are not customarily rendered to each inpatient. Plaintiffs thus never included labor/delivery patients in their calculations when they sought Medicare reimbursement for routine services. For accounting periods beginning on or after September 1, 1976, however, the Secretary revised the applicable reimbursement formula through section 2345 of the Provider Reimbursement Manual. The new formula required that patients in ancillary areas at the census-taking hour be counted in the routine inpatient population when calculating average costs per diem for routine inpatient care. Reimbursement for ancillary costs, however, continued to be made separately.

The hospitals felt that including labor/delivery patients in the reimbursement formula without including attendant costs unfairly diluted their Medicare reimbursement. See p. 280 infra, denominator of part 1. They argue simply that women in labor/delivery areas of the hospital are not generating routine costs; they are receiving the specialized care accorded delivering mothers for which a separate charge is made. They also contend that extremely few Medicare beneficiaries—the rare exception of an elderly or disabled woman— require labor/delivery care.

1. Administrative History.

Faced with what they considered an inequitable Medicare requirement, both plaintiffs took the same course of action. Contrary to section 2345 of the Provider Reimbursement Manual, they excluded labor/delivery patients from the inpatient count for calculating routine services. Their fiscal intermediary, the Blue Cross Association of Western Pennsylvania, chose to follow section 2345 and modified plaintiffs’ reimbursement request by including labor/delivery patients in the tally. The hospitals appealed this decision to the Provider Reimbursement Review Board (“PRRB”). After an extensive hearing the PRRB reversed Blue Cross and allowed the hospitals to exclude labor/delivery patients in calculating reimbursement for routine services. The Deputy Administrator for the Health Care Financing Administration reversed the PRRB’s decisions for the plaintiffs; both hospitals were required to include labor/delivery patients in calculating reimbursement for routine services. McKeesport Hospital was denied $26,000 reimbursement for the years 1978-79. Greene Hospital was denied $8,800 for 1978 and $12,670 for 1979.

The Deputy Administrator reversed an additional claim for reimbursement which affects only Greene Hospital. Under its collective bargaining agreement, Greene was obligated to pay its employees for sick leave that these employees had accrued but not taken. This claim followed the same path as the labor/delivery issue in ascending through the administrative appeals process: the fiscal intermediary rejected Greene’s claim and the PRRB reinstated it. The Deputy Administrator then reversed the PRRB in finding that Medicare would not reimburse Greene for the costs of accrued, unused employees’ sick leave.

All of the appeals in this case are brought pursuant to section 1395oo(f).

C. Discussion

1. Jurisdiction over Greene’s 1978 claim.

Before we reach the merits of the labor/delivery issue, we must address the Secretary’s argument that we have no jurisdiction over Greene’s reimbursement claim for 1978. The Secretary asserts that under the statutory provision for review of Medicare reimbursement decisions, section 1395oo, any claim for reimbursement for less than $10,000 can be appealed to no higher authority than the Secretary. Greene’s reimbursement claim for 1978 amounts to $8,800, and the hospital admits that this amount is clearly less than the minimum jurisdictional amount for obtaining PRRB review. Brief of March 15, 1985 at 8. Because both the fiscal intermediary and the Secretary have denied Greene’s claim for 1978, the Secretary contends that Greene has exhausted its last opportunity for review.

Greene nevertheless argues that stronger interests lie behind affording judicial review of administrative decisions than in strictly construing the jurisdictional statute. Otherwise, private organizations such as the fiscal intermediaries will have final authority to adjudicate these disputes. Indeed, the court recognizes a presumption favoring judicial review of administrative decisions unless we are faced with the clear command of a statute. See Barlow v. Collins, 397 U.S. 159, 166-67, 90 S.Ct. 832, 837-38, 25 L.Ed.2d 192 (1969).

While we are sympathetic to Greene’s position and recognize the plausibility of its arguments, we are bound by a clear statutory limitation to our authority. Under section 1395oo(f), our review extends only to “any final decision of the [Provider Reimbursement Review] Board or [to] any reversal, affirmance or modification by the Secretary.” The PRRB’s jurisdiction is itself limited to disputes where the amount in controversy is $10,000 or more. Section 1395oo(a)(2). The PRRB did not in fact review Greene’s 1978 claim, and obviously had no jurisdiction to do so; Greene took a final appeal to the Secretary pursuant to the statute, and the Secretary upheld the fiscal intermediary.

Congress further defines our limited jurisdiction over this issue at section 405(h) in stating that “the findings and decision of the Secretary after a hearing shall be binding upon all individuals who were parties to such hearing. No findings of fact or decision of the Secretary shall be reviewed by any person, tribunal, or governmental agency except as herein provided.” We thus follow a simple formula in deciding whether to exercise jurisdiction over Greene’s claim: we first determine whether the PRRB has made a final decision. If not, we have no jurisdiction. Here, the PRRB has no jurisdiction because Greene cannot satisfy the amount-in-eontroversy requirement. Under these conditions and where the Secretary has held a hearing, we may not disturb her decision.

Greene next attempts an end run around the PRRB’s jurisdictional requirements by contending that the Secretary’s action constitutes a final decision under section 405(g) which is subject to review. The senseless alternative, as stated by Greene, is being forced to file a claim with the PRRB which would automatically be dismissed for lack of jurisdiction. Thus, in the interest of judicial economy we are asked to exercise jurisdiction over the 1978 claim now.

Greene overlooks the practical results of its scenario. We admit that the PRRB likely would dismiss the 1978 claim for lack of jurisdiction, and such appeal could very well be characterized as futile. Nonetheless, Greene still would not be entitled to have the merits of its claim reviewed here. If the PRRB hears a case and decides that it has no jurisdiction, we would review only one issue pursuant to section 1395oo(f): whether the PRRB’s denial of jurisdiction was appropriate. If the PRRB does not hear a case because a provider decides it does not meet the jurisdictional requirements, we cannot review the claim without invading the Secretary’s authority under section 405(h). In sum, Greene has shown no basis for our jurisdiction over its 1978 claim because of Congress’ limitation that only claims over $10,000 are entitled to judicial review.

Finally, Greene asserts that we should transfer its 1978 claim to the United States Claims Court should we refuse jurisdiction. Greene cites one case which the Claims Court decided involving an amount less than $10,000. Milford Memorial Hospital, Inc. v. United States, 675 F.2d 270 (Ct.Cl.1982) . The opinion indicates that plaintiff there had a hearing before the fiscal intermediary and review by the Secretary, but makes no mention of jurisdiction. Id. at 271. Contrasting the ambiguity of this authority against the relative clarity with which Congress defines the scope of our jurisdiction, we are not convinced that Greene’s 1978 claim is properly transferable to the United States Claims Court.

2. The Merits of the Labor/Delivery Claims.

Our path in considering the merits of the labor/delivery issue has been smoothed since the Court of Appeals for the District of Columbia handed down its benchmark opinion on the issue in Saint Mary of Nazareth Hospital Center v. Schweiker, 718 F.2d 459 (D.C.Cir. Sept. 23, 1983) . Although the Court of Appeals for the Third Circuit has not had the opportunity, three other circuits have explicitly followed Saint Mary of Nazareth Hospital in deciding the labor/delivery issue. Beth Israel Hospital v. Heckler, 734 F.2d 90 (1st Cir. May 18, 1984); Baylor University Medical Center v. Heckler, 730 F.2d 391 (5th Cir. April 23, 1984); and International Philanthropic Hospital Foundation v. Heckler, 724 F.2d 1368 (9th Cir. Jan. 31, 1984) . This authority is not only unified, it hinges on an opinion that is thorough and well-reasoned. We also are compelled to adopt the opinion of the Court of Appeals for the District of Columbia. We, therefore, will reverse the Secretary’s decision to include labor/delivery patients in the formula for calculating Medicare reimbursement for routine inpatient care. We do so according to the scope of our review as outlined by the Administrative Act, 5 U.S.C. § 706(2)(a), that the Secretary’s decision is unsupported by substantial evidence.

In reversing the Secretary’s labor/delivery reimbursement policy in Saint Mary of Nazareth Hospital, the court also remanded the case to the district court “with instructions to remand to the PRRB for the limited purpose of taking evidence on the issue of whether the use of other ancillary services by Medicare beneficiaries at the census-taking hour suffices to compensate for the dilution of Medicare reimbursement caused by including labor/delivery area patients in the calculation of average general routine costs per diem.” 718 F.2d at 474. That is, although the Secretary had no supportable reason at the time, she was permitted another opportunity to submit evidence before the PRRB showing why labor/delivery patients should be counted in calculating costs of routine services. “One such factor,” for example, “is that maternity patients create greater routine costs once they are transferred to a routine care area than the average routine costs of other patients.” Beth Israel Hospital, 734 F.2d at 92. We likewise will order this case remanded to the PRRB. The Secretary may then, if she chooses, set forth other possible accounting considerations that may support her inclusion of labor/delivery patients in the formula for calculating routine costs.

II. GREENE’S SICK-LEAVE CLAIM.

The final issue in this case concerns reimbursement for Greene’s payments to its employees in lieu of unused sick leave. Under their collective bargaining agreements, Greene’s employees could accrue sick leave days that they had earned but not taken. Upon leaving the hospital’s employment for any reason other than being fired, Greene was obligated to pay these employees a specified rate for each unused day of sick leave. Greene sought reimbursement for its total liability for unused sick leave for 1979, but the fiscal intermediary reduced its claim by $54,711. The PRRB reversed this decision and permitted Greene’s claim for its full liability. The Deputy Administrator of the Health Care Financing Administration then reversed the PRRB.

As stated above, health care providers such as Greene are entitled to reimbursement for their reasonable costs pursuant to the established regulatory procedure. Section 1395x(Y)(l)(A). The regulation at issue here is the one requiring accrual basis accounting.

Providers receiving payment on the basis of reimbursable costs must provide adequate cost data ____ the cost data must be based on an approved method of cost finding and on the accrual basis of accounting. ... under the accrual basis of accounting, revenue is reported in the period when it is earned, regardless of when it is collected, and expenses are reported in the period in which they are incurred, regardless of when they are paid.

42 C.F.R. § 405.453(a) and (b)(2).

The Secretary argues that Greene’s sick leave plan is a form of deferred compensation that is not certain enough to be reimbursed. There is no specified future time when the employees will receive these payments. The Secretary finds this same uncertainty in the amount payable, since this figure depends upon the amount of forfeitures and the rate of payment set by the collective bargaining agreements. The Medicare program, in the Secretary’s opinion, requires greater certainty before HHS will agree to reimburse providers. Both parties have stated the decisive issue in similar terms: we must determine whether Greene’s sick leave costs were “actually incurred”.

We believe the Secretary’s own regulation requiring accrual basis accounting resolves this almost metaphysical problem. Using the accrual basis to report its Medicare-reimbursable expenses, Greene must report those expenses in the period in which they are incurred. We will assume that incurred means the first period when it foresees it will have a debt in any later period.

We do not find any fatal lack of certainty in Greene's claim that cannot be expected under this system. Greene’s payment rates for unused sick leave days are set by contract. This rate may change from contract to contract, but all parties know exactly which rates apply to each employee during any specified contract period. The date the employees actually receive payment is much less predictable, but this aspect loses relevance when we consider that Greene must use accrual basis accounting, which specifies when to report a debt as existing. At a given point, we think Greene can easily calculate its sick leave liability by multiplying three figures: the number of eligible employees, the number of unused sick days, and the applicable rates.

The Secretary does not so much dispute this calculation as she does the time of payment. She approved McKeesport’s sick leave plan because “in that case the provider’s employees could accumulate a limited number of sick days and demand cash payment for the accumulation at the end of the year.” Hearing Record at 14. Thus the decisive factor for the Secretary apparently is when the hospital employees actually receive payment. This emphasis seems ill-founded in light of the principle of accrual basis accounting that the actual time of payment is insignificant.

We think the Secretary’s other objections to Greene’s sick leave plan are meritless, The fact that Greene’s sick leave rates are fixed by contract causes no appreciable uncertainty. Any employee’s rate can be ascertained for any period by referring to his labor contract for that period. As to the forfeiture of sick leave for employees who are fired, the court finds no evidence that the amount forfeited reaches any significance relative to the amount claimed. This absence of evidence is consistent with our experience of the frequency of employee discharges for cause.

We find further support for our conclusions in the district court’s opinion in Medical Society of South Carolina d/b/a Roper Hospital v. Heckler, [1984-1 Transfer Binder] Medicare & Medicaid Guide (CCH) ¶ 33,651 (D.S.C. Feb. 27, 1984), where the parties positions were virtually identical to the positions of the parties here. The court there concluded that the hospital’s contractual obligations justified finding that it had actually incurred a debt to its employees for their unused sick days.

SUMMARY

On the labor/delivery issue, we will assume no jurisdiction over Greene’s 1978 claim because of the clear command of Congress which limits our jurisdiction to appeals from the PRRB. We will follow the wisdom of the Court of Appeals in Saint Mary of Nazareth Hospital, supra, in invalidating the Secretary’s inclusion of labor/delivery patients in the routine inpatient count, but likewise remanding to the PRRB to give the Secretary an opportunity to prove her assertions with other accounting data if she chooses. On the sick leave issue, the Secretary’s refusal to reimburse Greene’s 1979 sick leave claim is not supported by substantial evidence. The calculations made under Greene’s sick leave plan are as definite as the required form of accounting allows.

ORDER

On the labor/delivery issue in Civil Action No. 82-897 and Civil Action No. 82-1609, the plaintiffs’ motions for summary judgment are GRANTED and the defendants’ motions for summary judgment are DENIED. These cases are hereby REMANDED to the Provider Reimbursement Review Board for further findings on the issue in accordance with the opinion of the Court of Appeals for the District of Columbia Circuit in Saint Mary of Nazareth Hospital Center v. Schweiker, 718 F.2d 459 (D.C.Cir.1983).

On the sick leave issue in Civil Action No. 82-1609, plaintiff’s motion for summary judgment is GRANTED and defendant’s motion for summary judgment is DENIED. The Secretary’s decision is REVERSED and JUDGMENT is ENTERED in favor of Greene County Memorial Hospital and against the Secretary in the amount of $54,711.

      . All citations to statutes refer to Title 42 of the United States Code unless otherwise stated.

      . The census-taking hour is midnight.

      . Section 1395oo; see also 42 C.F.R. § 405.1835.

      . The Secretary has authority to affirm, modify or reverse decisions of the PRRB, and this authority has been delegated to the Deputy Administrator for the Health Care Financing Administration. Section 1395oo(f)(l).

      . The denial of $8,800 in reimbursement was never reviewed by the PRRB. The question was made part of this action by an amendment to Greene's complaint.

      . Section 1395Ü incorporates section 405(h) into the Medicare subchapter (XVIII) to the same extent it applies to the old age, survivors, and disability subchapter (II).

      . Section 1395oo(f) incorporates the standards of review from the Administrative Procedure Act.

      . As stated above, employees who are fired forfeit their right to sick leave payments.


author: BRIMMER, District Judge.

text:
    ST. PAUL FIRE AND MARINE INSURANCE COMPANY, a Minnesota corporation, Plaintiff, v. CAMPBELL COUNTY SCHOOL DISTRICT NO. 1, Defendant.
    No. C85-0002-B.
    United States District Court, D. Wyoming.
    June 26, 1985.

      Dan B. Riggs, Lonabaugh & Riggs, Sheridan, Wyo., for plaintiff.
    Dan R. Price, II, Morgan, Brorby, Price & Roberts, Gillette, Wyo., for defendant.
   ORDER ON CROSS MOTIONS FOR . SUMMARY JUDGMENT

BRIMMER, District Judge.

The above entitled matter came before the Court pursuant to cross motions for summary judgment. The Court, having reviewed the pleadings and the evidence offered, and being fully advised in the premises, FINDS and ORDERS as follows:

This is a declaratory judgment action initiated by plaintiff St. Paul Fire and Marine Insurance Company (St. Paul) seeking a declaration by the Court that it has no duty to defend or pay out on a case involving a civil rights suit against the insured, Campbell County School District No. 1 (School District). Both sides ask for summary judgment on the issue of liability and duty to defend regarding the civil rights suit instituted against the School District by Judy Worth.

Judy Worth, a teacher for the School District, while sponsor of the school newspaper, became entangled in a battle over publication of a certain satirical cartoon. When the school principal refused to let the cartoon be published, Ms. Worth called in outside help, including the American Civil Liberties Union (ACLU). Ms. Worth contends that because of her activities she was demoted, harassed, and in general subjected to emotional suffering. Ms. Worth sued the School District for violation of her First Amendment rights, and seeks damages for, inter alia, emotional suffering. The School District informed plaintiff St. Paul that it expected the insurance company to defend and cover this lawsuit, and St. Paul now seeks a declaration from this Court that the policies in question do not invoke either a duty to defend or cover any losses arising from the Worth lawsuit.

Three separate policies are involved in this matter, and although they are partially interrelated, the Court will deal with them one at a time. The first policy, a Comprehensive General Liability Insurance Policy, effective from October 13, 1983 through July 1, 1984, provides in part that the company will pay for all damages because of “bodily injury ... caused by an occurrence, “and the company shall have the right and the duty to defend any (such) suit____” The policy goes on to define “bodily injury” as “bodily injury, sickness or disease sustained by any person which occurs during the policy period____” Finally, the policy defines “occurrence” as “an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured.”

Given the policy language, the crux of the matter is whether or not the events causing Ms. Worth’s alleged emotional suffering constitute an occurrence. The alleged events in question include such matters as harassment by her superiors for calling in the ACLU, failure to be reinstated as journalism sponsor, etc. None of these events can be construed as unintentional, and the School District admits as much. However, the District contends that since the outcome of the events, namely Ms. Worth’s emotional distress, was unintentional, the events should be considered an occurrence.

There is no clear Wyoming law on this question. Although in Wyoming an “insurer is obligated to defend if there is potentially a case under the complaint within the coverage of the policy,” “potential” has not been given an expansive reading. Boston Insurance Company v. Maddux Well Service, 459 P.2d 777, 779 (Wyo.1967). In Action Ads, Inc. v. Great American Ins. Co., 685 P.2d 42 (Wyo.1984), the Wyoming Supreme Court recently declined to give an expansive reading to a similar insurance clause defining occurrence. Although the injury itself could be construed within the clause, because the employee in question only sued the insured for breach of contract, the Court found that the insurance company had no duty to defend or cover the losses. The Court acknowledged that this was “a narrow reading of the liability-coverage clause”, but reasoned that an “occurrence” referred to tortious conduct, and that “Action Ads’ potential liability in this case stemmed not from its own negligent behavior, but from a contractual obligation.” Id. at 45 (emphasis added).

The Court is faced with a similar situation. The School District’s potential liability also stems not from negligence, but from intentional acts on the part of its agents. St. Paul argues that intentional acts do not fit within the policy definition of occurrence, which speaks in terms of an accident. The Court agrees. In construing a near identical clause, the District Court for the District of North Dakota held:

This standard definition limits coverage to “fortuitous losses", that is damages arising from “mistake or carelessness” on the part of insured rather than from “intentional or reckless acts”. Rolette County v. Western Cas & Sur. Co., 452 F.Supp. 125, 130 (D.N.D.1978).

Since it is clear that any emotional damages to Ms. Worth were caused by intentional acts, and were not the result of an accident, the Court must conclude that the incidents in question were not an “occurrence” as defined by the policy. See also Pendergraft v. Commercial Standard Fire & Marine Co., 342 F.2d 427, 429 (10th Cir.1965); and Service Welding & Mach. Co. v. Michigan Mutual Liability Co., 311 F.2d 612, 617 (6th Cir.1962).

Moreover, even if the existence of an occurrence were assumed, the type of damage alleged, i.e. emotional suffering, does not constitute “bodily injury”. In Bituminous Fire & Marine Ins. Co. v. Izzy Rosen’s, Inc. 493 F.2d 257, 261 (6th Cir.1974), the court concluded, in discussing a policy obligation to pay for damages because of bodily injury, that “such a policy contemplates some injury to the body of a physical nature in order to come within the definition of ‘bodily injury’ ”. See also Rolette County v. Western Cas. & Sur. Co., 452 F.Supp. 125 (D.N.D.1978), holding that mental anguish and emotional distress caused by an unconstitutional search do not constitute “bodily injury”. Since Ms. Worth is not suing for a physical injury or disease, the Court concludes that plaintiff insurance company has no duty to defend or cover any losses under the Comprehensive General Liability Policy.

The second policy is one for Employer’s Liability. Under the pertinent language, St. Paul agreed:

To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury by accident or disease ... (To) defend ... any suit against the insured alleging such injury and seeking damages on account thereof ...
(And that) this policy applies only to injury (1) by accident occurring during the policy period, or (2) by disease caused or aggravated by exposure of which the last day of the last exposure, in the employment of the insured, to conditions causing the disease occurs during the policy period.

As the Court has already noted, from her complaint it is clear that Ms. Worth is not seeking damages for a bodily injury caused by accident. However, the School District also contends that Ms. Worth’s emotional distress constitutes bodily injury by disease, relying on her psychiatrist’s statement that she is suffering from a “depressive neurosis”. Even if the Court could be convinced that a neurosis with no accompanying physical changes constitutes a bodily injury, St. Paul would still have no duty to defend or provide coverage. The Wyoming Supreme Court has held that “where terms of an insurance policy are clear and unambiguous, they will be enforced the same as are the terms of other contracts.” Alm v. Hartford Fire Insurance Co., 369 P.2d 216, 217 (Wyo.1962).

The Court concludes that the limiting language of the policy is quite clear. “This policy applies only to injury ... by disease caused or aggravated by exposure of which the last day of the last exposure, in the employment of the insured, to conditions causing the disease occurs during the policy period.” (Emphasis added). The policy in question terminated on July 1, 1984. Ms. Worth’s problems stemming from the cartoon have been a continuous matter from December of 1983 running through at least August 31, 1984 when she filed her complaint and asked this Court to enjoin certain behavior on the part of the School District, to reinstate her as a journalism sponsor, and to award her damages for continuing loss of income, damage to career and reputation, and emotional suffering. Therefore, by its very terms the Employer’s Liability Policy does not provide coverage because Ms. Worth’s last exposure to the conditions causing her neurosis may not have occurred yet, but certainly occurred after July 1, 1984.

The final policy is a Voluntary Compensation Endorsement policy. Again, following the Aim court’s admonition to apply the clear and unambiguous language of the policy the Court concludes that St. Paul has no duty to defend or cover losses, because Ms. Worth sued the School District in this Court. The Voluntary Compensation Endorsement policy is quite clear that “if any person entitled to payment under Coverage ‘C’ (this policy) ... shall commence any proceedings at law ... seeking damages from the insured or the company on account of such injury, the company’s liability under Coverage ‘C’ with respect to such injury is thereupon terminated.” Thus, since Ms. Worth chose to sue instead of seeking a worker’s compensation-type payment under this policy, the Voluntary Compensation Endorsement does not provide coverage.

The Court concludes that plaintiff St. Paul is entitled to a declaratory judgment that it need not pay for any damages suffered by Ms. Worth under any of the three policies discussed in this Order. Furthermore, the Court concludes that St. Paul was correct in assuming that, just as the Great American Insurance Company had no duty to defend for breach of contract, it had no duty to defend for any “potential” liability arising from an intentional, constitutional tort. Action Ads, Inc. v. Great American Ins. Co., 685 P.2d 42 (Wyo.1984). Therefore, it is

ORDERED and DECLARED that the rights of the parties are as follows:

1. Plaintiff has no duty to defend or indemnify defendant for any liability incurred by it as a result of the civil rights action initiated by Judy Worth, under either the General Liability Insurance Policy, the Employer’s Liability Policy, or the Voluntary Compensation Endorsement Policy.

2. Defendant has no right to collect under said policies for intentional, non-bodily damages caused to Judy Worth by its agents. It is further

ORDERED that plaintiff St. Paul Fire and Marine Insurance Company’s motion for summary judgment be, and the same hereby is granted. It is further

ORDERED that defendant Campbell County School District No. l’s motion for summary judgment be, and the same hereby is, denied, and that this matter be, and the same hereby is, dismissed with prejudice. It is further

ORDERED that plaintiff recover of the defendant its costs of action.


author: CURTIN, Chief Judge.

text:
    Donald WOLF, Plaintiff, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant.
    No. CIV-84-86C.
    United States District Court, W.D. New York.
    June 27, 1985.

      Wattenberg & Isaac (Mark H. Wattenberg, of counsel), Olean, N.Y., for plaintiff.
    Salvatore R. Martoche, U.S. Atty. (C. Donald O’Connor, Asst. U.S. Atty., of counsel), Buffalo, N.Y., for defendant.
   CURTIN, Chief Judge.

Plaintiff Donald Wolf worked as a truck driver for 21 years until he stopped working in October of 1971. He has not been employed since that time. Plaintiff has an eighth-grade education and was 54 years old at the time of the hearing.

Plaintiff filed an application for disability insurance benefits on October 16, 1974. That application was granted for a period of disability beginning in September of 1974. Plaintiff’s benefits were later terminated by the Secretary as of January of 1982, at which time he was said to have recovered from his disability caused by cirrhosis of the liver, pancreatitis, and chronic alcoholism. The date of the Secretary’s decision terminating plaintiff’s benefits was September 27, 1982. There is no evidence that plaintiff ever appealed the decision beyond the Appeals Council, which declined to review it. Instead, plaintiff made the instant application on January 28, 1983. He also applied for supplemental security income benefits on that date.

The decision of the Secretary that plaintiff was no longer disabled from January of 1982 through September 27, 1982, is res judicata. The decision of this court applies only to plaintiff’s condition after September 27, 1982.

With regard to plaintiff’s most recent application, the Administrative Law Judge [AU] found on September 30, 1983, that plaintiff had not been engaged in substantial activity since October of 1971. He found that plaintiff was not suffering from an Appendix 1 impairment but that plaintiff could not resume his former work. However, the AU concluded that plaintiff had the residual functional capacity to do light work and was not disabled under Appendix 2, Rule 202.11, Subpart P, 20 C.F.R. Part 404.

The sole issue raised by plaintiff on this appeal is the failure of the AU to determine whether plaintiff is addicted to alcohol and whether he can control its use.

From the record, it is apparent that plaintiff is an alcoholic. Both doctors so diagnosed him (Tr., pp. 260, 319, 324, 333, 350). Alcoholism in and of itself, however, is not necessarily disabling. Under the Social Security Administration regulations, an addiction to alcohol or drugs does not automatically indicate a finding of disability:

(e) Addiction to alcohol or drugs. If you have a condition diagnosed as addiction to alcohol or drugs, this will not, by itself, be a basis for determining whether you are, or are not, disabled. As with any other medical condition, we will decide whether you are disabled based on symptoms, signs, and laboratory findings.

20 C.F.R. § 404.1525(e).

Addiction to alcohol can, in certain circumstances, be of such severity as to meet the listings of Appendix 1. See 20 C.F.R. Part 404, Subpart P, Appendix 1, § 12.04. The requirements of section 12.04 are quite specific and are not met by the evidence in this record. Although the AU did not elaborate on his finding that plaintiff had no Appendix 1 impairment, this finding is supported by substantial evidenee. Even when an addiction to alcohol does not meet the listings of Appendix 1, it can still be disabling if it, alone or combined with other causes, prevents a person from engaging in substantial gainful activity. Ferguson v. Schweiker, 641 F.2d 243, 248 (5th Cir.1981).

Physical damage caused by prior alcohol abuse can be so severe as to be disabling under the Act. Singletary v. Secretary of Health, Education and Welfare, 623 F.2d 217, 220 (2d Cir.1980). Serious alcohol-induced personality disorders, as described in Appendix 1, can be disabling. Rutherford v. Schweiker, 685 F.2d 60, 62 (2d Cir.1982). Other alcohol-related mental impairments, even if they do not equal an Appendix 1 impairment, can be disabling if they preclude gainful activity.

Once a person is found to have an alcohol-related condition which prevents him from engaging in substantial gainful activity, he cannot be denied benefits simply because he continues to drink. Adams v. Weinberger, 548 F.2d 239, 242-43 (8th Cir.1977). “[E]mphasis should be placed on whether the claimant is addicted to alcohol and as a consequence has lost the voluntary ability to control its use.” Id. at 244.

When a person is found to have a disability related to alcohol abuse, the AU must go a step further:

[I]f there is a continuing interrelationship between the excess consumption of alcohol and the disability, such that termination of the former will end the latter, the issue for the Secretary is whether the claimant has lost the voluntary ability to control his drinking.

Rutherford at 62.

In this ease, the AU found that plaintiff was not under a disability and was able to engage in substantial gainful activity. In urging remand based solely on the failure of the AU to address plaintiffs ability to control his drinking, plaintiff bypasses the first step in the analysis. It must first be determined whether, in spite of plaintiffs alcoholism, the AU’s finding that he is not disabled is supported by substantial evidence. In this case, the court concludes that further clarification and consideration is required, and remands for the purpose.

The majority of plaintiffs physical impairments are related to plaintiff’s alcohol consumption. In addition to alcoholism, he has been diagnosed as suffering from chronic pancreatitis, possible cirrhosis of the liver, arteriosclerotic heart disease, coronary insufficiency, angina, and anxiety neurosis.

Plaintiff’s pancreatitis is a severe condition. He has had acute attacks in the recent past, and he now displays chronic pancreatitis (Tr., pp. 319, 354). His pancreas shows considerable calcification (Tr., p. 358). Additionally, his platelet count and his white cell count were far below normal, presumably due to liver damage (Tr., p. 358). Both these conditions were, as can be gleaned from the record, caused by alcohol abuse and are made worse by alcohol consumption.

The AU stated that plaintiff’s chest x-rays and EKGs were normal. He then added the cryptic comment: “[H]is pancreatitis is associated with his drinking.” (Tr., p. 13.) He nowhere discussed any limitations which plaintiff’s pancreatitis (and liver damage) impose. From this comment, the court has considerable doubt as to whether the AU found that plaintiff’s pancreatitis was not, alone or in combination with his other impairments, a disabling condition or whether he considered this to be a disabling condition but found plaintiff not disabled due to its relationship to plaintiff’s continued drinking.

If the AU did the latter, as seems likely, he was then under a duty to determine whether plaintiff could control his drinking, which he did not do. Adams, 548 F.2d at 242-44.

Furthermore, the AU failed to consider the effect of plaintiff’s repeated hospitalizations on his ability to engage in substantial gainful activity. The AU found plaintiff capable of “light work.” No explanation is given for this conclusion. In any event, a classification of “light work” is clearly a classification limited to exertional limitations and does not account for his repeated hospital stays.

According to the record, plaintiff was hospitalized at least six times between November of 1982 and August of 1983. He was in the hospital November 3-10, 1982 (Tr., p. 324); sometime in January, 1983 (Tr., p. 46); February 4-7, 1983 (Tr., p. 316); February 23-March 2, 1983 (Tr., p. 319); May 13-21, 1983 (Tr., p. 343); and July 25-August 5, 1983 (Tr., p. 354).

It seems evident to the court that six hospitalizations, most for more than one week at a time, within a nine-month period would have a severe impact on plaintiffs ability to perform substantial gainful activity, if not altogether preclude it (Tr., p. 50).

This is especially true for plaintiff, who was already 54 years old at the time of the hearing and has only an eighth-grade education. This last relevant work was in 1971, until which time he had worked for 21 years as a truck driver.

On remand, the Secretary shall consider the effects of plaintiffs pancreatitis and frequent hospital stays on his ability to engage in substantial gainful activity.

It may be that plaintiff is disabled, in any event, whether he drinks or not. Of course, if the Secretary determines that plaintiff has a disability and there is a continuing interrelationship between the consumption of alcohol and the disability, such that termination of the alcohol consumption will end the disability, the issue is whether plaintiff has lost the ability to control his drinking. Rutherford, 685 F.2d at 62.

The Secretary urges that plaintiffs own testimony demonstrates that he has not lost the voluntary ability to stop drinking. For instance, plaintiff testified that he last drank the Tuesday before the hearing, and that only two bottles of beer had made him ill (Tr., p. 32). Plaintiff also stated that while he used to drink heavily, he now only takes a few drinks and usually does not get drunk (Tr., p. 47). Although the AU referred to some of this testimony, he did not comment upon it.

Simply because a claimant denies the severity of his drinking problem and has had a period of recovery in the past does not indicate that he can control his drinking. Ferguson, 641 F.2d at 249. Even when a person claims he likes to drink and declines help, such as plaintiff has (Tr., p. 323), the inquiry is not at an end. An alcoholic’s denials often betray his addiction. It must be determined whether he has lost the voluntary ability to stop drinking. Adams, 548 F.2d at 245.

Dr. Hwang found that plaintiff had a history of alcohol abuse and diagnosed plaintiff as a chronic alcoholic. He noted that plaintiff had alcohol on his breath during his March 15, 1983, office visit (Tr., p. 333). Treating physician Shaffer consistently diagnosed plaintiff as suffering from alcoholism (Tr., pp. 319, 324, 350). At least three of plaintiff's hospitalizations were for bouts of alcoholism (Tr., pp. 319, 341, and 354). In the most recent episode, plaintiff again had the DTs and was placed on Haldol, after which he “quieted down and was manageable.”

A review of the record in this case indicates that the Secretary equates alcoholism with the amount of alcohol ingested or the frequency with which a person drinks. Since plaintiff claims he now only occasionally drinks a few beers, the Secretary seems to conclude that he is no longer an alcoholic. As discussed earlier, a conclusion that someone is not an alcoholic and is in control of his drinking must be based on more than his own assessment of his problem. Moreover, even if plaintiff’s own assessment of his drinking habits were accepted, this in itself does not mean that plaintiff can control his drinking. During argument before this court, the Secretary stressed that plaintiff's hospitalizations resulted from his drinking only one or two beers. As the Secretary noted, his physical condition has so deteriorated from years of drinking that even small amounts of alcohol can lead to disaster. Most of his many hospitalizations were related to his consumption of alcohol.

If a man cannot avoid alcohol, even when it causes stomach pain and nausea so severe that it frequently necessitates hospitalization for several days, there is a strong basis for concluding that he cannot control his drinking. A man need not be regularly intoxicated to be an alcoholic. That he may not drink daily or in great quantity does not mean his addiction is under control.

On remand, the Secretary shall, if such a finding is necessary, determine whether plaintiff has lost the ability to voluntarily stop drinking. In this regard, plaintiff has requested that a consultive psychiatric examination be obtained. This may prove useful in making a proper determination on remand. See Rutherford, 685 F.2d at 61. Under 20 C.F.R. § 404.1517, the Secretary has the power to order a physical or mental examination. If either party wants a psychiatric examination, the Secretary shall order one.

This case is remanded for proceedings consistent with this decision.

So ordered.

      . In an earlier examination of plaintiff performed January 22, 1982, Dr. Hwang took plaintiff's word that he had quit drinking in 1979 (Tr., p. 313). Again, plaintiff’s own report of his condition is, by itself, not necessarily reliable. In a hospital report for plaintiffs November 3-10, 1982, stay, Dr. Shaffer noted that plaintiff had admitted to drinking again, and the doctor speculated that he had been drinking for a long period of time. When Dr. Hwang next examined plaintiff in March of 1983, chronic alcoholism was his primary diagnosis (Tr., p. 333).