Booth v. United States ( 2023 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 Renee Booth, et al., No. 2:19-cv-01612-KJM-CKD 12 Plaintiffs, ORDER 13 v. 14 United States of America, 1S Defendant. 16 17 Plaintiffs Renee Booth and Bradley Converse allege K.C., their minor child, received 18 | negligent medical care at a federally operated clinic. The parties have reached a settlement 19 | agreement and seek approval of that agreement and the creation of a trust. As explained in this 20 | order, the court grants the motions to approve the settlement agreement and create the trust. 21 | I. BACKGROUND 22 According to the complaint, K.C.’s health and measurements were normal soon after his 23 | birth but then deteriorated. See Compl. 5.2-5.16, ECF No. 1. He and his parents claim his 24 | doctors and others at the clinic should have recognized the signs of hydrocephalus, id. §{§ 5.17— 25 | 5.18, a “condition marked by an excessive accumulation of cerebrospinal fluid,” which can lead 26 | to “atrophy of the brain,” Stedman's Medical Dictionary § 418840 hydrocephalus (Nov. 2014). 27 | K.C. and his parents allege he “did not receive appropriate pediatric care and developed 28 | permanent brain damage and cerebral palsy.” Compl. 45.18. K.C.’s condition now “requires 1 constant care and frequent weekly appointments.” Id. ¶ 5.16. He “continues to suffer pain from 2 the spasticity of cerebral palsy, has decreased hearing in his right ear, and continues to receive 3 weekly OT [occupational therapy] and PT [physical therapy] to improve his muscle tone.” Id. 4 ¶ 5.18. 5 K.C.’s parents filed this medical malpractice action on their own and K.C.’s behalf against 6 the United States under the Federal Tort Claims Act. See id. ¶¶ 2.1, 6.1. (citing 28 U.S.C. 7 § 2674). They allege the United States was negligent in several respects, from treatment and care 8 to diagnosis and evaluation to referrals and operations. See id. ¶ 6.1. They seek damages for a 9 variety of harms, including pain and suffering, physical impairments, loss of income and earning 10 capacity, and past and future medical expenses. See id. ¶¶ 7.1–7.2. 11 The United States answered the complaint in November 2019, ECF No. 10, and the case 12 entered discovery, see generally Scheduling Order, ECF No. 14. After the deadline for 13 dispositive motions passed, the parties negotiated a settlement agreement, and plaintiffs moved to 14 appoint a guardian ad litem to review the agreement. ECF Nos. 31, 36. The court granted their 15 request and appointed their proposed guardian, an experienced personal injury attorney who has 16 served in the same capacity in several cases, including in many against the United States. See 17 Evans Decl. ¶¶ 2–3, ECF No. 36-1; Order (Sept. 16, 2022), ECF No. 37. 18 In the settlement agreement, the United States agrees to allocate $3 million to an annuity, 19 a special needs trust, and the plaintiffs’ fees and costs: 20  Half of the total ($1.5 million) will fund an annuity that will pay at least $7,080 21 per month to K.C. beginning in December 2037, when he will be 25 years old, 22 continuing for his life. See Settlement Agreement ¶ 3.b.1, ECF No. 40-1. 23  A quarter of the total payment ($750,000) will be paid to plaintiffs’ counsel as an 24 attorneys’ fee. Guardian Ad Litem Report at 3, ECF No. 39. 1  About $150,0001 will cover the plaintiffs’ costs and expenses in this action. See 2 id. at 3 & n.1. 3  The remainder, approximately $600,000, will fund a special needs trust 4 administered by the Capital First Trust Company. See id. at 3; Mot. Establish 5 Trust, ECF No. 41; Trust Agreement, ECF No. 41-1. “A special needs trust is a 6 form of discretionary spendthrift trust designed to preserve public assistance 7 benefits for a disabled beneficiary.” 15 Witkin Sum. Cal. Law Wills § 1164; see 8 also 42 U.S.C. § 1396p(d)(4)(A); Cal. Prob. Code § 3604. 9 K.C.’s guardian ad litem reviewed the pleadings, the settlement agreement, and K.C.’s 10 medical history, and he spoke to K.C.’s parents and attorneys. See Evans Report at 5–6, ECF No. 11 39. He believes the proposed settlement is in K.C.’s best interest. Id. at 5. 12 Plaintiffs move for approval of the settlement agreement and to create the proposed 13 special needs trust. See generally Approval Mot., ECF No. 40; Trust Mot., ECF No. 41. Both 14 motions are unopposed. The court took them under submission without hearing oral arguments. 15 II. SETTLEMENT AGREEMENT 16 District courts have a duty to protect the interests of minor litigants. See Fed. R. Civ. P. 17 17(c)(2). When an agreement would settle a minor’s claims, a district court must “conduct its 18 own inquiry to determine whether the settlement serves the best interests of the minor.” Robidoux 19 v. Rosengren, 638 F.3d 1177, 1181 (9th Cir. 2011) (quoting Dacanay v. Mendoza, 20 573 F.2d 1075, 1080 (9th Cir. 1978)). This District’s local rules similarly require the court’s 21 approval of any agreement to settle a minor’s claims. E.D. Cal. L. R. 202(b). 22 The Ninth Circuit has instructed district courts reviewing settlement agreements under 23 Rule 17 to consider only “whether the net amount distributed to each minor plaintiff in the 24 settlement is fair and reasonable, in light of the facts of the case, the minor’s specific claim, and 25 recovery in similar cases.” Robidoux, 638 F.3d at 1181–82. The court must “evaluate the 1 The guardian ad litem’s report refers to two different expense totals. See id. at 3 (“The expenses total $152,429.46. . . . Expenses: $142,807.27”). The court’s decision does not depend on which total is correct. 1 fairness of each minor plaintiff’s net recovery without regard to the proportion of the total 2 settlement value designated for adult co-plaintiffs or plaintiffs’ counsel—whose interests the 3 district court has no special duty to safeguard.” Id. at 1182. 4 The court is satisfied the proposed settlement agreement meets this standard. The 5 proposed annuity will ensure funds are steadily distributed to K.C. The proposed special needs 6 trust will help to remediate the harms alleged in the complaint. As noted above, K.C’s appointed 7 guardian ad litem also has evaluated the proposed agreement, has reviewed the pleadings and 8 K.C.’s medical records, and has spoken to plaintiff’s counsel and K.C.’s parents. Guardian’s 9 Report at 5–6. He believes the agreement is fair and serves K.C.’s best interests. Id. at 5. Based 10 on his experience, the guardian ad litem believes “the likelihood of an appreciably higher verdict 11 in this case is minimal.” Id. He reports K.C.’s family “wants the case closed and is ready to 12 move on.” Id. 13 Although the Ninth Circuit has held that the amount or proportion of an award allocated to 14 others, such as an attorney, is essentially irrelevant to Rule 17(c), see Robidoux, 638 F.3d at 1182, 15 federal district courts, including this court, have often specifically approved fee allocations to 16 counsel, sometimes citing the Medical Injury Compensation Reform Act of 1975, see, e.g., M.S. 17 v. United States, No. 19-00728A, 2020 WL 526102, at *5 (E.D. Cal. Feb. 3, 2020) (citing 18 Brewington v. United States, No. 13-07672, 2015 WL 4511296, at *7 (C.D. Cal. July 24, 2015)); 19 see also, e.g., J.J. by & through Tyler A. v. Rocklin Unified Sch. Dist., No. 19-01404, 2020 WL 20 363908, at *3 (E.D. Cal. Jan. 22, 2020) (collecting authority). The court therefore notes for 21 purposes of completeness and certainty that it finds the amount of attorneys’ fees and costs to be 22 appropriate for this case, given its complexity and duration. That is, the court’s decision to 23 approve the settlement agreement does not depend on whether the attorneys’ fee and cost 24 allocations are taken into account. 25 ///// 26 ///// 1 III. SPECIAL NEEDS TRUST 2 Under the California Probate Code, a special needs trust may be created if the court 3 determines: 4 (1) That the minor or person with a disability has a disability that 5 substantially impairs the individual’s ability to provide for the 6 individual’s own care or custody and constitutes a substantial 7 handicap. 8 (2)That the minor or person with a disability is likely to have special 9 needs that will not be met without the trust. 10 (3) That money to be paid to the trust does not exceed the amount 11 that appears reasonably necessary to meet the special needs of the 12 minor or person with a disability. 13 Cal. Prob. Code § 3604(b). 14 These requirements are satisfied in this case. When hydrocephalus is not correctly treated, 15 it can lead to serious brain injuries, as in K.C.’s case. According to K.C.’s guardian ad litem, 16 K.C.’s condition was not treated before it caused brain damage, cerebral palsy and hearing loss. 17 Guardian’s Report at 2. K.C. requires ongoing physical and occupational therapy. Id. at 3. For 18 these reasons, the court finds the amount of the money proposed to be paid into the trust is not 19 greater than necessary to meet K.C.’s needs. 20 IV. CONCLUSION 21 For the reasons above, the court grants the motions to approve the settlement agreement 22 and create a special needs trust (ECF Nos. 40 and 41). The court adopts the parties’ proposed 23 orders, which it will issue in separate filings concurrently with this order. 24 IT IS SO ORDERED. 25 DATED: January 11, 2023.