Joan PETRONE, Plaintiff-Appellant, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant-Appellee

O’SCANNLAIN, Circuit Judge,

dissenting:

I respectfully dissent.

I

As a general rule, disability benefits may be terminated when evidence shows that the disability has ceased. See 42 U.S.C. § 423(f). Prior to 1980, the Secretary of the Department of Health and Human Services employed the “medical improvement” standard to make this determination; under this standard, the Secretary would not find that a disability had ceased unless the claimant’s condition had improved since the last determination of disability. Rhoten v. Bowen, 854 F.2d 667, 668 (4th Cir.1988). In 1980, the Secretary announced that he had abandoned the medical improvement standard and, in its place, established a “current disability” standard pursuant to which benefits were terminated if it was found, on the basis of new evidence, that the person was not presently disabled. Id.

Many Social Security disability benefit recipients filed suit in federal courts challenging the new regulations. See, e.g., Johnson v. Heckler, 606 F.Supp. 82 (S.D.N.Y.1984); Turner v. Heckler, 592 F.Supp. 599 (N.D.Ind.1984); Graham v. Heckler, 573 F.Supp. 1573 (N.D.W.Va.1983); Lopez v. Heckler, 572 F.Supp. 26 (C.D.Cal.1983). Thereafter, prompted at least partially by these numerous district court actions, Congress enacted the Social Security Disability Benefits Reform Act of 1984 (“Reform Act”). See Rhoten, 854 F.2d at 669 & n. 1. The Reform Act did not establish a presumption of continuing disability. However, it did provide that terminations must be based on substantial evidence of medical improvement. In addition, the Reform Act specifically provided for automatic remand *431of all requests for judicial review pending on September 19, 1984. See id.

Unfortunately, Congress apparently did not consider the relationship between this automatic remand provision and the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412. Needless to say, claimants whose benefits were restored upon remand sought attorney’s fees under the EAJA. Courts have since grappled with the question of whether such claimants are “prevailing parties” within the meaning of the EAJA.1 Three theories have been proposed. Under the first theory, claimants who received benefits as a result of the Reform Act’s automatic remand provision can never be prevailing parties, as the “clear causal relationship” between the lawsuit and the relief is lacking. In addition to the majority here, this reasoning has been endorsed by the First Circuit, see Guglietti v. Secretary of HHS, 900 F.2d 397 (1st Cir.1990), the Seventh Circuit, see Hendricks v. Bowen, 847 F.2d 1255 (7th Cir.1988), and the Eighth Circuit, see Truax v. Bowen, 842 F.2d 995 (8th Cir.1988).

The second theory is the obverse of the first; under this view, a claimant may be a prevailing party for purposes of the EAJA simply by bringing the lawsuit that enabled retroactive application of the Reform Act. See Perket v. Secretary of HHS, 905 F.2d 129 (6th Cir.1990); Guglietti, 900 F.2d at 405-08 (Breyer, J., dissenting). The rationale for this viewpoint was encapsulated by Judge Breyer:

In my view, the following circumstances make it proper, as a matter of ordinary English usage, as well as a matter of law, to say that the claimant “prevailed” in her legal action. First, she did get the relief she wanted. Second, her legal action was a necessary condition for her obtaining it.... Third, the outside event — the Congressional action — was' not an unrelated, extra-judicial event. Rather, Congress acted, in part, because this claimant, and other claimants similarly situated, had filed lawsuits.

Guglietti, 900 F.2d at 405 (Breyer, J., dissenting) (citations omitted).

The third theory is an intermediate approach, aptly entitled as the “inevitable victory” theory. See Perket, 905 F.2d at 133. Under this theory, a claimant is a prevailing party under the EAJA if she would have otherwise prevailed in the absence of the Reform Act. Id.; see also Lopez v. Sullivan, 882 F.2d 1533, 1537 (10th Cir.1989); Rhoten, 854 F.2d at 670; Hendricks, 847 F.2d at 1259 (Easterbrook, J., concurring) (“An award is both appropriate and necessary when the claimant would have prevailed in his quest for benefits, and would have recovered fees, had the Reform Act never existed.”).

It is this latter approach which I believe we should adopt today. This approach avoids the problem of rewarding lawyers for mere “serendipity.” See Hendricks, 847 F.2d at 1259 (Easterbrook, J., concurring). However, it also avoids the equally unfortunate result of failing to compensate claimants who have brought meritorious lawsuits. See id. at 1261 (“When the EAJA otherwise would have required the government to pay, ... the creation of a new entitlement in the Reform Act should not make the claimants worse off.”). Indeed, this approach best harmonizes Congress’s objectives in both the Equal Access to Justice Act and the Disability Benefits Reform Act.

II

In the present case, the district court concluded that a disability claimant who received benefits as a result of passage of the Reform Act could not be a prevailing party under the EAJA. Applying the “inevitable victory” theory, I would remand this case to the district court to determine whether Petrone would have prevailed in the absence of the Reform Act. If so, the district court should next determine whether the government’s position was not sub*432stantially justified. If both of these inquiries are resolved in Petrone’s favor, I believe she should be entitled to attorney’s fees under the Equal Access to Justice Act.

. In order to receive attorney’s fees under the EAJA, the requester must be a prevailing party, the government’s position cannot be substantially justified, and no special circumstances may exist that would make such an award unjust. See Bay Area Peace Navy v. United States, 914 F.2d 1224, 1230 (9th Cir.1990).