Lerwick v. Secretary of Health and Human Services ( 2014 )

In the United States Court of Federal Claims
OFFICE OF SPECIAL MASTERS
*********************
SHERRY LERWICK, legal *
representative of a minor child, *
B.L., * No. 06-847V
* Special Master Christian J. Moran
Petitioner, *
*
v. * Filed: April 16, 2014
*
SECRETARY OF HEALTH *
AND HUMAN SERVICES, * damages, award of compensation
* on interim basis, reconsideration
Respondent. *
*********************
Curtis Webb, Twin Falls, ID, for petitioner;
Darryl R. Wishard, United States Dep’t of Justice, Washington, DC, for
respondent.
PUBLISHED DECISION, AFTER RECONSIDERATION,
AWARDING COMPENSATION ON AN INTERIM BASIS1
Sherry Lerwick established that a dose of the diphtheria-tetanus-acellular
pertussis (DTaP) vaccine harmed her son, B.L. As such, she is entitled to
compensation through the National Childhood Vaccine Injury Compensation
Program (42 U.S.C. § 300aa-10 through 34 (2006)). Lerwick v. Sec’y of Health &
Human Servs., No. 06-847V, 2011 WL 4537874 (Fed. Cl. Spec. Mstr. Sept. 8,
2011) (Ruling on Entitlement).
1
Pursuant to a February 24, 2014 order, the child’s name has been redacted. The parties
may request additional redactions pursuant to 42 U.S.C. § 300aa-12(d)(4)(B); Vaccine Rule
18(b). In the absence of an additional request for redaction, the decision will be posted in
accordance with the E-Government Act of 2002, Pub. L. No. 107-347, 116 Stat. 2899, 2913
(Dec. 17, 2002).
Although the parties have agreed upon the amount of compensation for some
items, the parties have not reached an agreement on everything. Ms. Lerwick,
preferring not to wait until all issues are resolved, has requested an award of
compensation on an interim basis. See Pet’r’s Mot. for Decision Awarding Interim
Compensation (Pet’r’s Mot.), filed Oct. 24, 2013. The Secretary opposed this
motion.
A decision, originally issued on February 7, 2014, and re-issued in redacted
form on February 24, 2014 (“original decision”), granted Ms. Lerwick’s motion.
She was awarded $325,000.00 as compensation on an interim basis.
The Secretary filed a motion for reconsideration of the original decision.
This motion was granted to the extent that the motion requested that the original
decision be vacated. Whether the Secretary was entitled to any additional relief (a
substantive change in outcome) was deferred until Ms. Lerwick responded to the
motion for reconsideration. Order, filed Mar. 4, 2014.
Ms. Lerwick submitted her response. The parties’ additional arguments
have been considered. For reasons explained below, the original decision is re-
instated and Ms. Lerwick is awarded $325,000.00 in compensation on an interim
basis.2 This award is intended to deliver some compensation to Ms. Lerwick as
quickly as possible in accord with one purpose of the Vaccine Act: “quickly,
easily, and with certainty and generosity.” H.R Rep’t 99-908 at 3, quoted in Cloer
v. Sec'y of Health & Human Servs., 675 F.3d 1358, 1362 (Fed. Cir. 2012) (en
banc), aff’d sub nom., Sebelius v. Cloer, 133 S. Ct. 1886 (2013).
Background3
B.L. was born in April 2004. In August 2004, he received a set of
vaccinations including the DTaP vaccine. Within a few days, B.L. started having
seizures. He was diagnosed as suffering from acute disseminated
encephalomyelitis (ADEM). The ADEM has caused B.L. to be “profoundly
2
The March 4, 2014 order made the original decision “void for all purposes.” Vaccine
Rule 10(e)(3)(A). Thus, this decision addresses all the Secretary’s arguments, regardless of
whether she made them in her response to Ms. Lerwick’s motion or in the Secretary’s motion for
reconsideration.
3
The Secretary’s motion for reconsideration did not challenge the material set forth in the
“Background” section. Thus, it is repeated, with minor changes, from the original decision.
2
delayed in all areas. He has problems taking nourishment. He has little ability to
communicate. He cannot sit up or walk. He continues to have seizures.” Ruling on
Entitlement, 2011 WL 4537874, at *10. The limits of B.L.’s abilities are vividly
depicted in a video filed as exhibit 126.
B.L. receives much more assistance than a typical nine-year-old. “He is
dependent on others for all of his daily living needs.” Exhibit 107 at 5. He uses “a
multi-position seating chair, a walker, stroller, crawler, . . . and a bath chair.” Id.
He requires a number a daily medications. See id. at 9. The State of California,
through a program called Medi-Cal Early Periodic Screening, Diagnosis, and
Treatment, provides a licensed vocational nurse for 170 hours per month. A
different program, the Inland Regional Center, provides another 30 hours per
month of care by a licensed vocational nurse. The California Department of Social
Services also funds a person (in this case, Ms. Lerwick, herself) to provide 195
hours of non-licensed care to B.L. Id. at 1. B.L.’s school system also assists in
B.L.’s care when he attends school.
Ms. Lerwick claimed that the DTaP vaccine caused B.L.’s ADEM. See
Petition, filed Dec. 12, 2006. The Secretary disagreed and the case went to a
hearing on entitlement. Ms. Lerwick was found to have established causation.
Ruling on Entitlement, 2011 WL 4537874 at *1. The parties began to determine
the amount of compensation to which Ms. Lerwick is entitled. See 42 U.S.C. §
300aa-15(a) (listing five categories of compensation).
The process for quantifying damages is often laborious, especially in cases
with a brain-injured child. A starting step is obtaining updated documents
describing the child’s status. Typical sources include medical records and
individualized education plans. Both parties also retain life care planners, either
jointly or separately. A significant task of life care planners is to obtain
information from the treating doctors about the child’s future abilities and future
needs. Those factors, in turn, influence the amount of compensation awarded for
impaired earning capacity, future pain and suffering, and future unreimbursed
expenses.
Projecting a person’s abilities, their medical needs, and their anticipated
emotional distress decades into the future is not easy. Nevertheless, the parties
routinely overcome the difficulties in making those estimates. In the vast majority
of cases in which special masters find the petitioner is entitled to compensation, the
parties reach an agreement regarding the amount of compensation. The frequency
of settlement is a great accomplishment of the Vaccine Program.
3
For B.L., the parties followed the same process and nearly reached the same
result, a complete resolution. For medical expenses incurred but not reimbursed
through August 30, 2013, the parties agreed to $75,000.00. For pain and suffering
(both past and future), the parties agreed to $250,000.00. For B.L.’s lost earning
capacity, the parties agreed to $635,424.00. These three agreed-upon items are the
subject of Ms. Lerwick’s pending motion for compensation on an interim basis.
The parties have not agreed to the amount of unreimbursable future medical
expenses. Within this category, two items remain unresolved. Ms. Lerwick claims
B.L. currently needs 24-hour supervision of a licensed nurse. The Secretary argues
that 24-hour care is not necessary. Additionally, the Secretary proposes that
funding for future expenses should assume that when B.L. is 25 years old and his
mother is 65, he will live in a residential facility. Ms. Lerwick prefers that he live
at home. See Pet’r’s Mot. for Partial Summary Judgment, filed July 12, 2013;
Resp’t’s Opp’n to Pet’r’s Mot. for Partial Summary Judgment, filed July 29, 2013.
Because of the dispute over future medical expenses, a hearing in damages
was held across three days in September 2013. The witnesses included Dr. Ramon
Sankar, B.L.’s treating neurologist, and Dr. Perry Lubens, a neurologist whom the
Secretary retained to examine B.L.
After the hearing, Ms. Lerwick filed the pending motion. She requests a
decision awarding compensation for the three undisputed items. A reason for Ms.
Lerwick’s request is that she expects to lose funding from California. She testified
that after her divorce from B.L.’s father becomes final and he pays child support,
the child support will limit (or disqualify) her receiving funds from California.4
Pet’r’s Mot. at 5. The Secretary opposes her request. Resp’t’s Resp. to Pet’r’s
Mot. for Decision Awarding Interim Compensation (Resp’t’s Opp’n), filed Dec. 9,
2013; Resp’t’s Mot. for Reconsideration, filed Feb. 24, 2014.
Analysis
Although not framed precisely in these terms, the parties’ submissions raise
two issues. First, whether special masters possess the authority to award
compensation on an interim basis. Second, assuming that special masters have this
authority, whether exercising this authority for Ms. Lerwick is appropriate. The
4
The Secretary has not challenged the accuracy of this testimony.
4
Secretary’s motion for reconsideration has focused on the former question, an issue
about legal authority.
I. Authority
In advancing her argument that special masters have the authority to award
compensation on an interim basis, Ms. Lerwick draws on two sets of cases from
the Federal Circuit. In the first set of cases, the Federal Circuit stated that the
Vaccine Act authorizes special masters to issue decisions awarding attorneys’ fees
and costs on an interim basis. Shaw v. Sec’y of Health & Human Servs., 609 F.3d
1372 (Fed. Cir. 2010); Avera v. Sec’y of Health & Human Servs., 515 F.3d 1343
(Fed. Cir. 2008). Ms. Lerwick maintains that since special masters may issue more
than one decision awarding attorneys’ fees and costs, special masters may issue
more than one decision awarding compensation.
The other set of cases from the Federal Circuit presents examples in which
the Federal Circuit instructed the Court of Federal Claims to issue judgments
awarding compensation on an interim basis. In both cases, the Federal Circuit
issued its ruling in a non-precedential order. Order, filed May 16, 2013, at 7,
Tembenis v. Sec’y of Health & Human Servs., No. 2013-5029 (Fed. Cir.), ECF #
28; Order, filed June 13, 2012, at 2, Heinzelman v. Sec'y of Health & Human
Servs., No. 2011-5127 (Fed. Cir.), ECF # 28.
In her original response to Ms. Lerwick’s motion, the Secretary contended
special masters lack this authority. “The Vaccine Act does not contemplate
multiple decisions and multiple judgments. Legal authority for interim awards of
any kind does not exist in the statute.” Resp’t’s Opp’n at 2. The problem, as the
Secretary recognized, is “these arguments have largely been rejected in the two
non-precedential Federal Circuit orders that petitioner cites.” Id.
The Secretary’s motion for reconsideration takes a different tact. The
Secretary argues that the decision should identify a statutory basis for awarding
compensation on an interim basis. Resp’t’s Mot. for Recons. at 2-3 (citing, among
other cases, Patton v. Sec'y of Health & Human Servs., 25 F.3d 1021, 1027 (Fed.
Cir. 1994)).
The relevant portion of the Vaccine Act provides that a special master shall
issue “a decision on such petition with respect to whether compensation is to be
provided under the Program and the amount of such compensation.” Section
12(d)(3). The Secretary emphasizes that the use of the indefinite article “a” in the
5
phrase “a decision” means that Congress intended that special masters issue only a
single decision. Resp’t’s Mot. for Recons. at 3.
This argument misses its mark. In a statute, the use of an indefinite article
(“a” or “an”) can mean “one or more.” In contrast, the use of the definite article
(“the”) usually suggests a single item. See Colorado v. Sunoco, Inc., 337 F.3d
1233, 1241 (10th Cir. 2003) (interpreting the Comprehensive Environmental
Response, Compensation and Liability Act). The Federal Circuit has used the
same guideline in construing patents. See Sandisc Corp. v. Kingston Technology
Co., Inc., 695 F.3d 1348, 1360 (Fed. Cir. 2012). The Court of Federal Claims has
also distinguished indefinite articles from the definite article when interpreting a
contract provision. See Boeing Co. v. United States, 75 Fed. Cl. 34, 43 (2007) (“If
more than one such official were contemplated, the indefinite articles ‘an’ or ‘a’
should have been used.”). While neither Colorado, Sandisc, nor Boeing considered
the specific language found in section 12(d)(3) of the Vaccine Act, these cases are
persuasive precedents for rejecting the Secretary’s argument that a special master
may issue one, and only one, decision awarding compensation on an interim basis.
Since section 12(d)(3) does not resolve the question of whether special
masters are authorized to issue two or more decisions awarding compensation,
guidance can be sought from the four Federal Circuit decisions mentioned above.
Figueroa v. Sec'y of Health & Human Servs., 101 Fed. Cl. 696, 697 (2011) (“this
court must refrain from a de novo interpretation of the statutory text if binding
precedent has already provided an interpretation of this section of the Vaccine
Act”), rev’d on other grounds, 715 F.3d 1314 (2013). In two precedential cases,
Avera and Shaw, the Federal Circuit has stated that special masters have the
authority to award attorneys’ fees and costs on an interim basis. In two other
cases, Heinzelman and Tembenis, the Federal Circuit endorsed multiple decisions
awarding compensation, albeit in non-precedential orders.
To start with the precedential decisions, the genesis of interim decisions was
the Federal Circuit’s ruling in Avera. The Federal Circuit stated “[t]he statute
permits . . . awards” of attorneys’ fees and costs on an interim basis. 515 F.3d at
1352.
After Avera opened the door to awards of attorneys’ fees and costs on an
interim basis, the next issue was the appealability of those decisions. The Court of
Federal Claims held that decisions awarding only part of the requested fees were
not final decisions that could be subject to a motion for review. Shaw v. Sec'y of
Health & Human Servs., 88 Fed. Cl. 463 (2009). Mr. Shaw appealed the Court’s
6
holding that it lacked jurisdiction to entertain his motion for review to the Federal
Circuit.
The Secretary’s position was that the Court correctly held that the Vaccine
Act authorized a motion for review only after the special master issued a “final”
decision and a decision awarding attorneys’ fees and costs on an interim basis was
not a final decision. In support of this position, the Secretary raised the possibility
of multiple decisions and multiple appeals: “Vaccine Act cases already have two
potentially appealable decisions – one on the issue of entitlement to compensation,
if any, and another on final fees and costs. Shaw’s position here, if adopted, would
result in at least three – if not more – potentially appealable decisions in every
Vaccine Act case.” Brief for Respondent-Appellee at 15 n.9, Shaw v. Sec'y of
Health & Human Servs., 609 F.3d 1372 (Fed. Cir. 2010) (No. 2009-5117), 2010
WL 341595. The Secretary also presented arguments that allowing appeals of
decisions awarding attorneys’ fees and costs on an interim basis would interfere
with the quick and efficient processing of cases within the Vaccine Program. Id. at
17-20, 2010 WL 341595; see also Shaw, 609 F.3d at 1374 (summarizing the
government’s arguments).
The Federal Circuit rejected the Secretary’s arguments. It held a “Special
Master’s grant or denial of interim attorneys’ fees is a decision on compensation
and as such it is reviewable by the Court of Federal Claims.” Shaw, 609 F.3d at
1376. The Federal Circuit also disagreed with the Secretary’s contention regarding
delaying the processing of cases, stating this assertion “seems to be more of an
attack on the availability of interim fees than their reviewability.” Id. at 1377.
Thus, special masters have consistently interpreted Avera and Shaw to
authorize them to issue decisions awarding attorneys’ fees and costs on an interim
basis. See Crutchfield v. Sec'y of Health & Human Servs., No. 09-39V, 2011 WL
3806351, at *5 (Fed. Cl. Spec. Mstr. Aug. 4, 2011) (collecting cases); see also
Decision, issued May 26, 2010, 2010 WL 2594109 (awarding interim attorneys’
fees and cost in amount which respondent did not object). Although the Secretary
acknowledges this binding precedent, the Secretary argues that decisions awarding
attorneys’ fees are different from decisions awarding compensation. The primary
difference is that petitioners must file an election, accepting or rejecting a
judgment awarding compensation for injuries, but they do not need to submit an
election for judgments awarding attorneys’ fees and costs. See Mot. for Recons. at
3-7; Resp’t’s Resp. at 2-3.
7
The process for electing to accept or to reject a judgment is an unusual
aspect of Vaccine Program procedure. A special master issues a decision awarding
compensation. 42 U.S.C. § 300aa--12(d)(3). Each party possesses the right to file
a motion for review, which, if filed, is assigned to a judge of the Court of Federal
Claims. 42 U.S.C. § 300aa-12(e)(1). If neither party files a motion for review, the
clerk enters a judgment in accord with the special master’s decision. Id. § 12(e)(3).
Once there is a judgment, there are two options available. If, and only if, a
party has filed a motion for review, a party may appeal to the Federal Circuit. Id.
§ 12(f); Mahaffey v. Sec’y of Health & Human Servs., 368 F.3d 1378 (Fed. Cir.
2004) (denying request for direct appeal to Federal Circuit). An appeal to the
Federal Circuit is unusual.
The second alternative is more common. The petitioner, and only the
petitioner, possesses an option to accept the judgment or to reject the judgment
regarding the petitioner’s compensation.5 The petitioner’s election to accept or to
reject the judgment determines whether the petitioner may pursue a lawsuit against
either the vaccine manufacturer or administrator in civil court. Accepting the
judgment prevents further litigation and rejecting a judgment permits a lawsuit
against the vaccine manufacturer or administrator. 42 U.S.C. § 300aa-21(a).
The process for an award of attorneys’ fees and costs is largely the same.
The special master issues a decision. The decision is subject to a motion for
review. The combined effect of the special master’s decision and the review by a
judge of the Court of Federal Claims, if any, is the basis for a judgment. Provided
there was a motion for review, this judgment may be appealed to the Federal
Circuit. For an example of a case demonstrating this procedural sequence, see
Masias v. Sec'y of Health & Human Servs., 634 F.3d 1283, 1285 (Fed. Cir. 2011).
However, once there is a judgment, the similarities between judgments awarding
compensation and judgments awarding attorneys’ fees and costs end. Petitioners
are not required to file an election to accept or to reject the judgment awarding
them attorneys’ fees and costs. Saunders v. Sec'y of Health & Human Servs., 25
F.3d 1031, 1034-35 (Fed. Cir. 1994).
In arguing that special masters lack the authority to issue decisions awarding
compensation on an interim basis, the Secretary emphasizes the petitioner’s
5
If there were an appeal to the Federal Circuit, the petitioner files the election “after the
appellate court’s mandate is issued.” 42 U.S.C. § 300aa—21(a).
8
obligation to elect to accept or to reject judgment, particularly in her motion for
reconsideration. The Secretary suggests that a petitioner may accept a judgment
awarding compensation on an interim basis but may reject a subsequent judgment
awarding compensation on a final basis. Such a divided result, the Secretary seems
to maintain, would permit the petitioner to pursue additional compensation from a
vaccine manufacturer or administrator. Resp’t Mot. for Recons. at 4-6.
Despite additional consideration, the Secretary’s arguments regarding the
need for an election remain unpersuasive. The Secretary has cited no authority that
a petitioner may (a) accept a judgment awarding compensation on an interim basis,
(b) reject a judgment awarding compensation on a final basis, and, then, (c)
proceed to recover additional compensation from a vaccine administrator or
manufacturer in a separate litigation. The lack of authority is understandable
because the situation has never occurred --- a petitioner has never received an
interim award of compensation. Nevertheless, it is easy to imagine a judicial
official holding, as a matter of law, that a petitioner’s acceptance of a judgment
awarding compensation on an interim basis automatically carries with it an implied
acceptance of a judgment awarding compensation on a final basis.6
The Secretary’s arguments about the obligation for an election repeat
arguments that the Secretary unsuccessfully presented to the Federal Circuit in
Heinzelman and Tembenis. In Heinzelman, the special master had found that the
petitioner was entitled to compensation, which includes compensation for her lost
earning capacity. See 42 U.S.C. § 300aa—15(a)(3)(A). The Secretary had
requested an offset of $316,000.00, because Ms. Heinzelman would receive
payments from Social Security Disability Insurance (SSDI). The special master
held that an offset was not required and the Court of Federal Claims agreed.
Heinzelman v. Sec'y of Health & Human Servs., 98 Fed. Cl. 808, 815-17 (2011).
The Secretary appealed the (one) judgment of the Court of Federal Claims to
the Federal Circuit. At the Federal Circuit, the single issue concerned the SSDI
offset. Heinzelman v. Sec'y of Health & Human Servs., 681 F.3d 1374 (Fed. Cir.
2012).
Shortly before oral argument was scheduled, Ms. Heinzelman filed a motion
requesting partial summary affirmance. She wanted to receive a judgment for the
6
As discussed below, Ms. Lerwick has disclaimed any intent to reject the forthcoming
judgments awarding her compensation.
9
amount of damages that the SSDI offset did not affect. The Secretary opposed this
request, saying “Petitioner identifies no apposite authority for providing relief in
these circumstances, and no such authority exists.” Resp’t-Appellant’s Opp’n to
Pet’r’s Mot. for Partial Summary Affirmance at 2, Heinzelman v. Sec'y of Health
& Human Servs., No. 2011-5127 (Fed. Cir.), ECF # 23. The Secretary referred
specifically to the need for an election:
Petitioner is asking the Court to construe these provisions
to permit multiple judgments, and potentially multiple
elections of remedies --- something the Vaccine Act does
not contemplate. . . . Under petitioner’s approach, an
individual could conceivably elect to accept a partial
compensation award embodied in one judgment but
reject a subsequent judgment and attempt to pursue a
civil action against the vaccine administrator or
manufacturer for damages associated with the rejected
judgment. This fractured and convoluted process is
inconsistent with the Vaccine Act’s scheme for a single
election of remedies after final judgment is entered.
Id. at 3-4.
In regard to the merits of the appeal, the Federal Circuit held that an offset
was not required and affirmed the judgment of the Court of Federal Claims. The
Federal Circuit did not address Ms. Heinzelman’s pending motion for partial
affirmance in its reported opinion. Heinzelman, 681 F.3d 1374.
The Federal Circuit’s ruling on Ms. Heinzelman’s motion occurred in a non-
precedential order issued on the same day as its opinion. The Federal Circuit
granted the motion and ordered that “[t]he Court of Federal Claims shall enter a
final judgment in Heinzelman’s favor consistent with its June 28, 2011 judgment,
but less the $316,000 at issue in this appeal. Given our decision on the merits of
Petitioner’s appeal, . . . judgment with respect to the contested amount will become
final upon issuance of the mandate.” Order, filed June 13, 2012, at 2, Heinzelman
v. Sec'y of Health & Human Servs., No. 2011-5127 (Fed. Cir.), ECF # 28. Later,
the Federal Circuit clarified this order, stating “it is our intention to affirm the
entire monetary award in the Petitioner’s favor, to be finalized in stages.” Order,
filed July 18, 2012, at 2, Heinzelman v. Sec'y of Health & Human Servs., No.
2011-5127 (Fed. Cir.), ECF # 31.
10
In accord with these instructions, the Clerk’s Office of the Court of Federal
Claims issued two judgments in her case: one on July 23, 2012, for the undisputed
amounts and the other on August 7, 2012, for $316,000.00. Docket Sheet,
Heinzelman v. Sec'y of Health & Human Servs., No. 07-01V (Fed. Cl.), ECF #
123, 126. Therefore, the outcome of Heinzelman shows that the Court of Federal
Claims may issue two judgments awarding compensation to a petitioner, despite
the petitioner’s need to elect to accept those judgments.
A similar, but not identical, process happened in Tembenis. Once again, the
parties disputed one item of compensation, specifically, whether the estate of a
child who died from a vaccine-related injury was entitled to recover compensation
for the money that the child would have earned if the child had not died. After the
Court of Federal Claims awarded this compensation, the government appealed to
the Federal Circuit. And again, the petitioners-appellees at the Federal Circuit
filed a motion requesting a summary affirmance of the uncontested amounts.
In opposing the Tembenis’ motion, the Secretary again referred to obligation
to make an election pursuant to section 21(a). The Secretary argued the Vaccine
Act “contemplates a single choice of compensation award made by the [Court of
Federal Claims] or a civil action for damages. It does not contemplate some
combination of the two.” Resp. to Pet’rs-Appellees’ Mot. for Partial Summary
Affirmance, filed Feb. 12, 2013, at 2, Tembenis v. Sec'y of Health & Human
Servs., No. 2013-5029 (Fed. Cir.), ECF # 13.
The Federal Circuit granted the motion for partial summary affirmance. The
Federal Circuit did not see the obligation for an election as an impediment. The
order stated:
The language of § 21(a) is consistent with the ability to
make an election accepting the judgment prior to the
completion of the government’s appeal. Section 21(a)’s
only operative limitation is that the election must be
made “after judgment has been entered by the United
States Court of Federal Claims,” but not more than 90
days after the date of the final decision in the case.
Order, filed May 16, 2013, at 5, Tembenis v. Sec'y of Health & Human Servs., No.
2013-5029 (Fed. Cir.), ECF # 28. The Federal Circuit also rejected the possibility
of inconsistent elections, stating “once a petitioner has elected to accept the
judgment, he or she has accepted it for all compensation purposes relating to that
11
petition.” Id. at 6. Moreover, to advance the payment for the undisputed portions
of compensation, the Federal Circuit shortened the amount of time for any petition
for rehearing “so that the matter may promptly be transmitted back to the Court of
Federal Claims.” Id. at 7. Consequently, the reasoning in Tembenis further
supports a holding that special masters may issue two decisions awarding
compensation to a petitioner.7
The Federal Circuit’s orders in Tembenis and Heinzelman, as non-
precedential rulings, do not bind special masters. See Fed. Cir. Rule 32.1.
However, the orders represent the conclusions of five judges of the appellate
tribunal responsible for establishing the binding interpretation of the Vaccine Act.
See Althen v. Sec’y of Health and Human Servs., 418 F.3d 1274, 1280 (Fed. Cir.
2005). Additionally and importantly, the reasoning in the orders – particularly
Tembenis – retains an ability to persuade. See Griffey’s Landscape Maintenance,
LLC v. United States, 51 Fed. Cl. 667, 673 (2001).
Beyond pointing out that Heinzelman and Tembenis are non-precedential
orders, the Secretary puts forward other reasons for not following them. Many of
these complaints suggest that the Secretary maintains that the Federal Circuit
decided those cases wrongly. For example, the Secretary asserted she “stands by
those arguments” made in opposition to interim awards both previously and in this
case. Resp’t’s Opp’n at 2. As such, many of the Secretary’s arguments in this case
resemble the arguments she made in Shaw that were “more of an attack on the
availability of interim fees.” 609 F.3d at 1376.
As discussed above, the Federal Circuit in Avera and Shaw stated that
special masters possess the authority to issue decisions awarding attorneys’ fees on
an interim basis. While the Secretary may continue to dislike that outcome, a
special master must follow them. Friedman v. Sec'y of Health & Human Servs., 94
Fed. Cl. 323, 332 (2010). A question that ensued from Avera and Shaw is given
7
In Tembenis, a second judgment was not entered because of the Federal Circuit’s
resolution of the appeal. Before the Federal Circuit appeal, the Court of Federal Claims had
issued a judgment for $1,084,955.61 on October 22, 2012, in accord with an order of the
presiding judge. Following the Federal Circuit’s May 16, 2013 order affirming the non-disputed
aspects of the judgment and a series of orders by the judge, the Clerk of the Court of Federal
Claims modified the October 22, 2012 judgment on September 12, 2013. Because the
September 12, 2013 judgment awarded all the compensation to which the petitioners were
entitled after the Federal Circuit held against them, the Court of Federal Claims did not issue a
second judgment regarding compensation.
12
that special masters have the authority to issue decisions awarding attorneys’ fees
and costs on an interim basis, do special masters also possess the authority to issue
decisions awarding compensation on an interim basis?
The Secretary has identified one potential basis for distinguishing decisions
on compensation from decisions on attorneys’ fees, the need for an election. The
Secretary has argued this point to the Federal Circuit two times. But, the
Secretary’s arguments have not persuaded the Federal Circuit to limit the
availability of interim decisions. If interim awards for attorneys’ fees and costs are
permitted, then there seems to be no persuasive reason for not allowing interim
awards of compensation. One reason Congress created the Vaccine Program was
to speed awards of compensation to families whose children were injured by a
vaccine. Awarding compensation to those families on an interim basis is in accord
with this Congressional purpose.
Consequently, for all these reasons, special masters possess the legal
authority to award compensation on an interim basis.8
II. Discretion
Assuming special masters have the authority to award compensation on an
interim basis, the next question is whether a special master should make such an
award in a particular case. Here, in her original response, the Secretary raised
several factors arguably weighing against an award. These include: (1) a
8
The original decision stated that if the Secretary wanted to maintain arguments against
awards of compensation on an interim basis,
[I]t is incumbent on the Secretary to file a motion for review and, if
necessary, to file an appeal so that judges can resolve the issue.
Consistently raising an argument before special masters without
taking the steps to obtain a definitive interpretation wastes
resources of litigants and special masters. See Nuttall v. Sec’y of
Health & Human Servs., No. 07-810V, 2011 WL 5926131, at *2
(Fed. Cl. Spec. Mstr. Nov. 4, 2011) (noting the Secretary’s
arguments against the award of attorneys’ fees and costs on an
interim basis).
While the pending motion for reconsideration advances the argument, the present
decision does not bind other special masters. Thus, the need for appellate guidance remains.
13
petitioner’s requirement to elect to accept a judgment, (2) a possible change in
B.L.’s condition, (3) potential complications in processing Vaccine Act cases, and
(4) the possibility of an appeal. Resp’t’s Resp. at 3-7.
These issues are discussed below after an examination of Ms. Lerwick’s
right to compensation. It is almost a foregone conclusion that she will receive
some compensation for B.L.’s ADEM.
The basis for an award of compensation is the September 8, 2011 ruling,
which found Ms. Lerwick established that the DTaP vaccination caused B.L.’s
ADEM. The September 8, 2011 ruling, although very important to the outcome of
Ms. Lerwick’s case, is only an interim ruling and one that could be the subject of
appellate review.
Appellate review of special master’s decisions begins after the special
master issues a “decision.” “Decisions,” as the Vaccine Act uses that term, are
actions by judicial officials that either award or deny compensation. 42 U.S.C.
§ 300aa-12(d)(3)(A); Currie v. Sec’y of Health and Human Servs., No. 02-838V,
2003 WL 23218074 (Fed. Cl. Spec. Mstr. Nov. 26, 2003).9 By this definition, the
September 8, 2011 ruling was not a decision.10 Although the outcome favored Ms.
Lerwick, it did not award her compensation. When Ms. Lerwick is actually
awarded some amount of compensation, there will be a “decision.” Once there is a
decision, the Secretary may exercise her right to challenge the September 8, 2011
ruling by filing a motion for review. See 42 U.S.C. § 300a-12(e); Heinzelman, 98
at 812 (denying the Secretary’s motion for review and holding the special master
did not err in allocating the burdens of proof), aff’d in non-relevant part, 681 F.3d
1374 (Fed. Cir. 2012).
Although the Secretary possesses this right, the likelihood of her actually
filing a motion for review of the September 8, 2011 ruling is remote. The
Secretary has filed motions for review of a special master’s decision finding
9
Sometimes Currie is cited as Hamilton v. Sec’y of Health & Human Servs. See, e.g.,
Hippo v. Sec’y of Health & Human Servs., No. 10-642V, 2012 WL 1658252, at *3 n.7 (Fed. Cl.
Spec. Mstr. Apr. 18, 2012).
10
In addressing the motion for reconsideration, Ms. Lerwick describes the September 8,
2011 ruling finding entitlement as a “decision.” Pet’r’s Resp. at 3. This characterization is
erroneous because the September 8, 2011 ruling does not fit the definition of a decision. It
neither awarded nor denied compensation.
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entitlement extremely rarely.11 Apparently, the Secretary’s position is that findings
regarding causation, regardless of outcome, are fact-intensive conclusions that
should not be appealed. If the Secretary follows this principle, she will not
challenge the finding of entitlement. Alternatively, if the Secretary intends to file a
motion for review of the September 8, 2011 entitlement ruling, there may be
advantages to having entitlement issues resolved now before more effort is
invested into resolving the amount of compensation.
As noted above, the Secretary argues the award of compensation should be
later. The Secretary advocates that special masters should issue a single (final)
decision adjudicating all issues regarding entitlement. She has presented four
factors arguing against an interim award.
A. Election about Judgment
An important reason for the Secretary’s argument regarding the special
master’s authority to issue decisions awarding compensation on an interim basis is
the obligation to file an election. This argument is not persuasive for the reasons
explained above.
In addition to arguments that special masters lack authority to issue
decisions awarding compensation on an interim basis generally, the Secretary’s
original response brought out concerns specific to Ms. Lerwick. The Secretary
comments that Ms. Lerwick cannot know her total compensation because the
element for future medical expenses remains disputed. The Secretary postulates
that since Ms. Lerwick will need to accept the judgment following this decision
awarding compensation, she may regret her choice after the next decision awarding
compensation for future unreimbursable medical expenses. Resp’t’s Resp. at 3-4.
Ms. Lerwick appears not to share the Secretary’s concern. Ms. Lerwick is
aware that the amount of compensation for future unreimbursable medical
expenses has not been determined. Ms. Lerwick knows that she does not know
everything. Nevertheless, she stated she intends to accept the judgment(s). She
does not intend to pursue a civil action against the doctor who administered B.L.’s
11
When the court (not special master) has found a petitioner entitled to compensation, the
Secretary has appealed to the Federal Circuit infrequently. See, e.g., Bazan v. Sec’y of Health &
Human Servs., 539 F.3d 1347 (Fed. Cir. 2008); Paterek v. Sec’y of Health & Human Servs., No.
2012-5078, 527 Fed. App’x 875 (Fed. Cir. June 19, 2013).
15
vaccine or the company that manufactured it. See Pet’r’s Reply to Resp’t’s Opp’n
(Pet’r’s Reply), filed Dec. 24, 2013, at 2.12
B. Possible Change in B.L.’s Condition
In her original opposition, the Secretary argued an award of compensation
on an interim basis is not appropriate because the amount of the award, despite an
ostensible agreement, is subject to change. Resp’t’s Resp. at 4-5. This argument
rests in understanding how special masters award compensation in the Vaccine
Program.
Until now, special masters have awarded compensation at a single point in
time. The special master’s decision is based upon projections about the injured
person’s future ability and future medical needs. In the damages phase, the injured
person’s health may change, making previous projections less reliable and causing
updated projections. See, e.g., Sarver v. Sec’y of Health & Human Servs., No.
07-307V, 2009 WL 8589740, at *8 (Fed. Cl. Spec. Mstr. Nov. 16, 2009). These
changes, typically, constitute relatively minor alterations in the amount of
compensation for projected unreimbursable medical expenses.
However, the death of the injured person during the damages phase affects
the type of compensation (and, therefore, the amount of compensation) available.
The estate of a person who dies after a vaccine-related injury cannot recover both
the death benefit and an award for diminished earning capacity. Tembenis, 733
F.3d 1190, petition. for cert. filed, 2014 WL 325699 (U.S. Jan. 24, 2014) (No. 13-
902). Citing Tembenis, the Secretary asserted “[i]f an award of future damages is
made as part of an interim damages award, and [B.L.] then dies, respondent would
be placed in the awkward position of seeking the repayment of that portion of the
interim award to the Trust Fund from the petitioner’s estate.” Resp’t’s Opp’n at 5.
12
Ms. Lerwick’s promise to accept the interim judgment and the final judgment
forecloses the possibility of divided elections and the further possibility of litigation against
vaccine manufacturer or vaccine administrator. This representation is in accord with the Federal
Circuit’s non-precedential order in Tembenis that “once a petitioner has elected to accept the
judgment, he or she has accepted it for all compensation purposes relating to that petition.”
Order, filed May 16, 2013, at 6, Tembenis, No. 2013-5029, (Fed. Cir.), ECF # 28.
16
The Secretary’s argument that Ms. Lerwick should not receive any
compensation on an interim basis because B.L.’s condition might change is very
narrow. It concerns only awards for “future damages.” It also concerns a problem
that would occur only if B.L. died.
“Future damages” are included in just one part of the three categories of
compensation for which Ms. Lerwick seeks an interim award. To review, she
seeks $75,000.00 for past unreimbursed medical expenses, $250,000.00 for past
and future emotional distress, and $635,424.00 for diminished earning capacity.
Pet’r’s Mot. at 5.
For the first element, the past unreimbursed medical expenses, even B.L.’s
death would not affect the interim award. The estate of a person who suffers a
vaccine-related injury may recover compensation for unreimbursed medical
expenses. Zatuchni v. Sec'y of Health & Human Servs., 516 F.3d 1312 (Fed. Cir.
2008).
For the second element, an award for past and future pain and suffering,
B.L.’s death again would not affect the amount of compensation. Zatuchni also
authorizes a special master to award compensation for a decedent’s pain and
suffering caused by a vaccine. 516 F.3d at 1318.
The Vaccine Act limits the amount of compensation for emotional distress to
$250,000.00 in total (both past emotional distress and future emotional distress).
See 42 U.S.C. § 300aa-15(a)(4); Graves v. Sec’y of Health & Human Servs., 109
Fed. Cl. 579 (2013) (discussing statutory cap). The portion of future emotional
distress is subject to a reduction to net present value. 42 U.S.C. § 300aa-15(f)(4);
Youngblood v. Sec’y of Health & Human Servs., 32 F.3d 552 (Fed. Cir. 1994).
Here, although the parties have agreed that the amount of compensation for
past and future emotional distress is $250,000.00, they have not explicitly divided
the award into a portion for past and a portion for future. Such
compartmentalization is not necessary because the undersigned finds that
$250,000.00 is a reasonable amount of compensation for B.L.’s nine years of
emotional distress. It is not necessary to consider his future pain and suffering to
reach the statutory cap. Thus, this aspect of compensation does not implicate the
Secretary’s concern about “future damages.”
However, the third category of compensation included in Ms. Lerwick’s
motion, an award of $635,424.00 for diminished earning capacity, does involve
future damages. As mentioned previously, if B.L. were to die before the final
17
resolution of the case, the administrator of his estate could not be awarded
compensation for his diminished earning capacity. Tembenis, 733 F.3d at 1195.
Tembenis, therefore, suggests that an interim award for diminished earning
capacity could cause complications for Ms. Lerwick. She cannot argue that it
would be impossible for B.L. to die unexpectedly. Although B.L. is expected to
live for several decades, see Tr. 1317-18 (Dr. Lubens), a random tragic accident
could happen.
The Secretary’s motion for reconsideration did not raise any specific
challenges to an award for past unreimbursed medical expenses and emotional
distress, as opposed to an award for diminished future earning capacity. The
Secretary cites McAllister v. Sec'y of Health & Human Servs., 70 F.3d 1240, 1243
(Fed. Cir. 1995), for the proposition that “compensation in a Vaccine Act case is
ordinarily calculated as of the time of the special master’s decision that leads to the
final judgment in the case.” Mot. for Recons. at 3. The interim award is consistent
with McAllister because, for the reasons explained above, the two components
(past unreimbursed medical expenses (through August 2013) and emotional
distress) will not change. Whenever there is a decision awarding Ms. Lerwick
compensation, the decision will include those two aspects.
Furthermore, not awarding Ms. Lerwick compensation for B.L.’s diminished
earning capacity on an interim basis does not prejudice her significantly. She will
receive compensation for the remaining two items (past unreimbursed expenses as
well as past pain and suffering) and this award exceeds $300,000.00. This amount
of compensation should allow her to care for B.L.’s needs until the final decision
regarding compensation is issued.
C. Complicated Processing
The Secretary also contended that a system in which petitioner receives two
or more decisions awarding compensation would complicate the Vaccine Program.
The Secretary particularly identified potential problems with obtaining annuity
contracts for smaller awards as a concern. Resp’t’s Resp. at 5.
The Secretary’s concerns about case processing are one factor to consider in
balancing whether to issue an order awarding compensation on an interim basis. If
the Department of Justice and the Department of Health and Human Services
devoted more resources to Ms. Lerwick’s additional (that is, interim) award of
compensation, then the resources available for other cases would be slightly
diminished.
18
As discretionary matter, the potential burden of processing decisions
awarding compensation on an interim basis imposed upon the government should
be compared with the potential benefits. Ms. Lerwick has established that the
DTaP vaccine harmed B.L. and he, indisputably, suffers significant medical
problems. Ms. Lerwick’s unchallenged testimony is that she anticipates losing a
large portion of the assistance the State of California provides to her after B.L.’s
father pays child support to her. This interim award will alleviate some of her
difficulties. Speedily delivering assistance to a needy family is worth the
additional inconvenience to the government.
Finally, the Secretary’s concern about an annuity would fit more closely in a
case involving an annuity as part of an interim award. The present decision for
Ms. Lerwick does not contemplate the use of an annuity. She is being awarded
compensation for two items (past unreimbursed expenses and emotional distress)
that are typically paid in a lump sum. Therefore, an interim award to Ms. Lerwick
will not impair the Secretary’s ability to purchase an annuity contract for future
payments to her.
D. Subject to Appeal
The respondent’s final argument was an argument that an award of
compensation on an interim basis will be self-defeating. Ms. Lerwick has
requested an award on an interim basis to speed her receipt of money. The
Secretary contends that an interim award to her will actually delay her receipt of
compensation because the Secretary could file a motion for review. Resp’t’s Resp.
at 5-6.
In the Secretary’s view, a motion for review would delay the case in two
respects. The first is that a motion for review challenging this decision, which
awards compensation on an interim basis, would preclude an immediate entry of
judgment in Ms. Lerwick’s favor. The judgment would not be issued until a judge
of the Court of Federal Claims acted on the motion for review. And following that
order, the aggrieved party could appeal to the Federal Circuit.
The additional procedure to confirm the availability of compensation on an
interim basis presents a very real concern. Each party’s determination to pursue a
stage or two stages of appellate review will affect how quickly Ms. Lerwick
actually receives money. It may turn out that Ms. Lerwick would have received
money more quickly if she had not asked for an interim award. But, as long as
there is no precedential ruling from the Federal Circuit, this concern will always be
19
present. In replying to the Secretary’s arguments, Ms. Lerwick seems to indicate
that she is willing to take the risk that a motion for review and an appeal may delay
her receiving compensation on an interim basis. Moreover, even after the
Secretary filed a motion for reconsideration, a submission that evidences some
dissatisfaction on the government’s part and may hint at the increased likelihood of
a motion for review, Ms. Lerwick maintained her desire for an award of
compensation on an interim basis.
The second part of her case that could be delayed, in the Secretary’s view, is
the final award of compensation. The Secretary asserted that if she were to file a
motion for review contesting the interim award, then the special master would
“lose jurisdiction to continue working on other damages issues.” Resp’t’s Opp’n at
5. For this argument, the Secretary cited no cases in support.
Also without citing any cases, Ms. Lerwick responded. She argued that a
motion for review challenging a decision awarding attorneys’ fees and costs on an
interim basis does not deprive special masters from jurisdiction “to resolve issues
not resolved in the decision which is the subject of the motion for review.” Pet’r’s
Reply at 4.
The Secretary’s argument remains based upon an event that may or may not
happen. If the Secretary were to file a motion for review and if she were intent
upon slowing adjudication of the attendant care and residential placement issues,
she could file a motion with the judge to whom the motion for review is assigned.
(Such a motion, presumably, would cite to legal authorities discussing the
relationship between appellate and trial tribunals.) Consequently, the suggestion
that a motion for review may delay resolution of all the damages issues is still not a
persuasive reason for denying Ms. Lerwick compensation on an interim basis.
Conclusion
Ms. Lerwick established that she is entitled to compensation in the
September 8, 2011 Ruling on Entitlement. She has further established that
compensation for two items, unreimbursed medical expenses through August 30,
2013 and pain and suffering, totals $325,000.00. She also has established that
future events will not affect the amount of the awards for these two items.
20
There is no just reason to delay the entry of judgment on these two items.
Therefore, in the absence of a motion for review filed under RCFC
Appendix B, the clerk of court shall enter judgment in Ms. Lerwick’s favor
for $325,000.00 in interim compensation.
IT IS SO ORDERED.
s/ Christian J. Moran
Christian J. Moran
Special Master
21