Heine v. Secretary of Health and Human Services

In the United States Court of Federal Claims
OFFICE OF SPECIAL MASTERS
No. 16-1241V
Filed: September 12, 2017
Unpublished
****************************
TARA HEINE, *
*
Petitioner, * Attorneys’ Fees and Costs;
* Reasonable Basis; Special
v. * Processing Unit (“SPU”)
*
SECRETARY OF HEALTH *
AND HUMAN SERVICES, *
*
Respondent. *
*
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Edward M. Kraus, Law Offices of Chicago Kent, Chicago, IL, for petitioner.
Lara A. Englund, U.S. Department of Justice, Washington, DC, for respondent.
DECISION 1
Dorsey, Chief Special Master:
On September 30, 2016, Tara Heine (“petitioner”) filed a petition for
compensation under the National Childhood Vaccine Injury Act, 42, U.S.C. §§ 300aa-
10, et seq., 2 alleging that she “suffered chronic severe right shoulder and neck pain” as
a result of receiving the influenza vaccine on October 1, 2013. See Petition at
preamble. The case was assigned to the Special Processing Unit (“SPU”) of the Office
of Special Masters. On May 31, 2017, the undersigned issued a decision denying
petitioner’s claim for compensation and dismissing the case for insufficient proof. (ECF
No. 17). Judgment entered on July 5, 2017. (ECF No. 18).
On March 24, 2017, petitioner’s counsel submitted an application for interim
attorneys’ fees and costs requesting $10,902.70 in attorneys’ fees and $672.77 in
1 Because this unpublished decision contains a reasoned explanation for the action in this case, the
undersigned intends to post it on the United States Court of Federal Claims' website, in accordance with
the E-Government Act of 2002. 44 U.S.C. § 3501 note (2012) (Federal Management and Promotion of
Electronic Government Services). In accordance with Vaccine Rule 18(b), petitioner has 14 days to
identify and move to redact medical or other information, the disclosure of which would constitute an
unwarranted invasion of privacy. If, upon review, the undersigned agrees that the identified material fits
within this definition, the undersigned will redact such material from public access.
2National Childhood Vaccine Injury Act of 1986, Pub. L. No. 99-660, 100 Stat. 3755. Hereinafter, for
ease of citation, all “§” references to the Vaccine Act will be to the pertinent subparagraph of 42 U.S.C. §
300aa (2012).
attorneys’ costs for a total amount of $11,575.47. 3 Motion for Attorneys’ Fees and
Costs (“Pet. Motion”) at 3 (ECF No. 13). In accordance with General Order #9,
petitioner’s counsel indicated in the motion for attorneys’ fees and costs that petitioner
incurred no out-of-pocket expenses. See Pet. Motion at ¶ 3. On April 6, 2017,
respondent filed a response to the motion. Resp., (ECF No. 14.). The motion will now
be considered an application for final attorneys’ fees and costs. For the reasons
discussed below, the undersigned reduces this amount and awards $8,722.16 in
attorneys’ fees and $672.77 in attorneys’ costs for a total of $9,394.93 in attorneys’ fees
and costs.
I. Procedural History
Following the filing of her petition, Ms. Heine untimely filed documentation in
support of her claim on October 17, 2016, submitting medical records, a Walgreens
informed consent form, an affidavit, and a relevant medical article. Pet’r’s Exs. 1-7
(ECF No. 7.); see also SPU Initial Order (ECF No. 5.). Over the next three months,
petitioner requested several extensions of time to file additional records and a statement
of completion; all requests were granted. See Orders, issued Oct. 17, 2016, Nov. 15,
2016, Dec. 15, 2016, and Jan. 13, 2017 (Non-PDF). Additional evidence, however, was
never filed.
On February 13, 2017, petitioner’s counsel filed an unopposed motion for status
conference which stated that additional medical records were not forthcoming and that
counsel, after many failed attempts to contact his client, intended to withdraw from the
case. Motion (ECF No. 12.). During the requested status conference, petitioner’s
counsel, Mr. Kraus, stated that he had still not made contact with petitioner despite
multiple attempts by telephone, e-mail, and FedEx. Order to Show Cause at 2 (ECF
No. 15.). Mr. Kraus acknowledged that additional evidence would be necessary for
petitioner to prevail on her claim, and stated that because such evidence had not
materialized, he intended to withdraw. 4 Id. Shortly thereafter, petitioner’s counsel
submitted an application for interim attorneys’ fees and costs. Pet. Motion, (ECF No.
13.); see also Resp. (ECF No. 14.).
On April 27, 2017, petitioner was ordered to show cause why her claim should
not be dismissed for insufficient proof and failure to prosecute. Order to Show Cause
(ECF No. 15.). The deadline expired without response. The undersigned dismissed
petitioner’s claim on May 31, 2017. Decision (ECF No. 17.).
Petitioner’s application attorney’s fees and costs is now ripe for adjudication.
3
Petitioner attached supporting documentation to her interim fees application including billing records
(Tab A) and information in support of her requested costs (Tab B). Because the attached documentation
is not paginated the court refers to the entire filing herein as “Pet. Motion” using the CM/ECF generated
pagination.
4 Mr. Kraus has not filed a motion to withdraw.
2
II. Legal Standards for Determining the Amount of Fees and Costs
Motivated by a desire to ensure that petitioners have adequate assistance from
counsel when pursuing their claims, Congress determined that attorneys’ fees and costs
may be awarded even in unsuccessful claims. H.R. REP. NO. 99-908, at 22 reprinted in
1986 U.S.C.C.A.N. 6344, 6363; see also Sebelius v. Cloer, 133 S. Ct. 1886, 1895 (2013)
(discussing this goal when determining that attorneys’ fees and costs may be awarded
even when the petition was untimely filed). As Judge Lettow noted in Davis, “the
Vaccine Program employs a liberal fee-shifting scheme.” Davis v. Sec’y of Health &
Human Servs., 105 Fed. Cl. 627, 634 (2012). It may be the only federal fee-shifting
statute that permits unsuccessful litigants to recover fees and costs.
However, “Congress did not intend that every losing petition be automatically
entitled to attorneys' fees.” Perriera v. Sec’y of Health & Human Servs., 33 F.3d 1375,
1377 (Fed. Cir. 1994). The Vaccine Act requires an unsuccessful litigant to establish
that their petition was brought in good faith and there was a reasonable basis for the
claim for which the petition was brought before attorneys’ fees and costs may be
awarded. § 15(e)(1) (emphasis added).
“[T]he ‘good faith’ requirement . . . is a subjective standard that focuses upon
whether petitioner honestly believed he had a legitimate claim for compensation.”
Turner v. Sec’y of Health & Human Servs., No. 99-544V, 2007 WL 4410030, at *5 (Fed.
Cl. Spec. Mstr. Nov. 30, 2007). Petitioners are entitled to a presumption of good faith.
Grice v. Sec’y of Health & Human Servs., 36 Fed. Cl. 114, 121 (1996); see also Di
Roma v. Sec’y of Health & Human Servs., No. 90-3277V, 1993 WL 496981, at *1 (Fed.
Cl. Spec. Mstr. Nov. 18, 1993).
This presumption does not extend to reasonable basis which must be
affirmatively demonstrated by the petitioner. McKellar v. Sec’y of Health & Human
Servs., 101 Fed. Cl. 297, 305 (2011). “In contrast to the subjective standard afforded
the ‘good faith’ requirement, the ‘reasonable basis’ requirement ‘is objective, looking not
at the likelihood of success [of a claim] but more to the feasibility of the claim.’” Turner,
2007 WL 4410030, at *6 (quoting Di Roma, 1993 WL 496981, at *1). “[R]easonable
basis is an objective standard determined by the “totality of the circumstances” inquiry.”
Chuisano v. Sec’y of Health & Human Servs., 116 Fed. Cl. 276, 286 (2014). It should
not be rigidly applied. Id. at 285; see also Silva v. Sec’y of Health & Human Servs., 108
Fed. Cl. 401, 405 (2012) (emphasizing that “[a] special master’s determination . . . is
entitled to deference”).
After it has been determined that an award of attorneys’ fees and costs is
appropriate, the special master must determine the amount to be awarded. As the
Federal Circuit noted, attorneys’ fees and costs were “not expected to be high” due to
the “no-fault, non-adversarial system” set forth in the Vaccine Act. Saxton ex rel. v.
Sec’y of Health & Human Servs., 3 F.3d 1517, 1520 (Fed. Cir. 1993) (quoting H.R. REP.
NO. 99-908, at 36 reprinted in 1986 U.S.C.C.A.N. 6344, 6377). Counsel must not
include in their fee request hours that are “excessive, redundant, or otherwise
unnecessary.” Id. at 1521 (quoting Hensley v. Eckerhart, 461 U.S. 424, 434 (1983)).
3
Reasonable attorneys’ fees are calculated by multiplying a reasonable hourly rate by a
reasonable number of hours expended on litigation, the lodestar approach. Avera v.
Sec’y of Health & Human Servs., 515 F.3d 1343, 1347-48 (Fed. Cir. 2008) (quoting
Blum v. Stenson, 465 U.S. 886, 888 (1984)); Saxton, 3 F.3d at 1521.
A petitioner’s counsel in the Vaccine Program is paid the forum rate unless the
bulk of the work is performed in a locale other than the forum (District of Columbia) and
the local rate is very significantly lower than the forum rate. Avera, 515 F.3d at 1349. If
these two requirements are met, the Davis exception applies, and petitioner’s counsel is
paid according to the local rate. Id.; see Davis County Solid Waste Management and
Energy Recovery Special Service District v. United States Environmental Protection
Agency, 169 F.3d 755 (D.C. Cir. 1999).
Although not explicitly stated in the statute, the requirement that only reasonable
amounts be awarded applies to costs as well as fees. See Perriera v. Sec’y of Health &
Human Servs., 27 Fed. Cl. 29, 34 (1992), aff’d, 33 F.3d 1375. Reasonable expert costs
are calculated using the same lodestar method as is used when calculating attorneys’
fees. Masias v. Sec’y of Health & Human Servs., No. 99-697V, 2009 WL 1838979, at
*37 (Fed. Cl. Spec. Mstr. June 12, 2009).
Special masters have “wide latitude in determining the reasonableness of both
attorneys’ fees and costs.” Hines v. Sec’y of Health & Human Servs., 22 Cl. Ct. 750,
753 (Fed. Cl. 1991). They are entitled to rely on their prior experience and, based on
experience and judgment, may reduce the number of hours to an amount reasonable
for the work performed. Saxton, 3 F.3d at 1521. A line-by-line evaluation of the billing
records is not required. Wasson v. Sec’y of Health & Human Servs., 24 Cl. Ct. 482, 483
(Fed. Cl. 1991) aff’d in relevant part, 988 F.2d 131 (Fed.Cir.1993) (per curiam).
The petitioner “bears the burden of establishing the hours expended, the rates
charged, and the expenses incurred.” Wasson, 24 Cl. Ct. at 484. She “should present
adequate proof [of the attorneys’ fees and costs sought] at the time of the submission.”
Id. at 484 n.1. Petitioner’s counsel “should make a good faith effort to exclude from a
fee request hours that are excessive, redundant, or otherwise unnecessary, just as a
lawyer in private practice ethically is obligated to exclude such hours from his fee
submission.” Hensley v. Eckhart, 461 U.S. 424, 434 (1983).
III. Good Faith and Reasonable Basis
“Good faith” is a subjective standard. Hamrick v. Sec’y of Health & Human
Servs., No. 99–683V, 2007 WL 4793152 at * 3 (Fed. Cl. Spec. Mstr. Nov. 19, 2007). A
petitioner acts in “good faith” if he or she holds an honest belief that a vaccine injury
occurred. Turner v. Sec’y of Health & Human Servs., No. 99–544V, 2007 WL 4410030,
at * 5 (Fed. Cl. Spec. Mstr. Nov. 30, 2007). Parties are “entitled to a presumption of
good faith.” Grice v. Sec’y of Health & Human Servs., 36 Fed. Cl. 114, 121 (Fed. Cl.
1996). There is nothing in the record to indicate petitioner lacked the requisite good
faith when filing her claim. Thus, the undersigned finds petitioner has satisfied the
statutory requirement of good faith and turns to the issue of reasonable basis.
4
It is well established that claims filed on the eve of the expiration of the Vaccine
Act's statute of limitations are subject to a more lenient standard when determining if
reasonable basis exists. Hamrick v. Sec'y of Health & Human Servs., No. 99–683V,
2007 WL 4793152, at *5 (Fed. Cl. Spec. Mstr. Nov. 19, 2007) (noting this “long
recognized” proposition). Petitioner's counsel in these cases often do not have the time
needed to properly research petitioner's claim prior to filing the petition. See McNett v.
Sec'y of Health & Human Servs., No. 99–684V, 2011 WL 760314, at *8 (Fed. Cl. Spec.
Mstr. Feb. 4, 2011) (finding a review of the billing records showed petitioner's counsel
“had no time to request medical record, let alone any time to review [them]”); Hamrick,
2007 WL 4793152, at *6 (emphasizing respondent's failure “to recognize that the
looming statute of limitations prevented a thorough examination of the case”); Turner,
2007 WL 4410030, at *5 (finding a claim filed on the eve of the running of the statute of
limitations “may be supported by less information than would be expected if counsel had
more time to conduct a pre-filing investigation of the factual underpinnings and the
medical basis for a vaccine claim”). Yet, “[a] looming statute of limitations does not
forever absolve a petitioner from his or her obligation to proceed with a reasonable
basis to support his claim, at least not if the petitioner hopes to recover any fees and
costs.” Chuisano, 116 Fed. Cl. at 287 (emphasis omitted).
In creating the Vaccine Act, “Congress clearly contemplated that petitioners
might not be able to meet the burden to demonstrate causation-in-fact by
preponderance at the time the petition is filed.” Cloer v. Sec'y of Health & Human
Servs., 654 F.3d 1322, 1331 n.3 (Fed. Ci r.2011). As the Federal Circuit expressed in
Avera, “one of the underlying purposes of the Vaccine Act was to ensure that vaccine
injury claimants have readily available a competent bar to prosecute their claims.” 515
F.3d 1343, 1352 (Fed. Cir. 2008) (citing Saunders v. Sec'y of HHS, 25 F.3d 1031, 1035
(Fed. Cir. 1994)). In medical and scientific cases, causation-in-fact is often difficult to
prove without expert testimony. Requiring attorneys to obtain medical opinion
supporting causation before filing would be expensive, time-consuming, and very likely
deter attorneys from pursuing a petitioner's claim. See Austin v. Sec'y of Health &
Human Servs., No. 10–362V, 2013 WL 659574, at * 10 (Fed. Cl. Spec. Mstr. Jan. 31,
2013).
Ms. Heine engaged Mr. Kraus just three months prior to the expiration of the
statute of limitations. Pet. Motion at 1 (ECF No. 13.). Nevertheless, counsel retrieved
and reviewed her relevant medical records before the filing of her petition for
compensation. See Petition passim (ECF No. 1.) (citing to all of petitioner’s medical
records (Pet. Exs 1-6)).
Respondent argues that these medical records compel a finding that no
reasonable basis existed at the time the petition was filed. Resp. at 6 (ECF No. 14.). 5
Respondent cites to Ms. Heine’s vaccination record which indicates that the vaccination
at issue was administered in Ms. Heine’s left shoulder, inapposite to her alleged right
5
The opposition filed by respondent also includes an alternative argument that an award of interim
attorneys’ fees is inappropriate in this case. The undersigned need not address respondent’s alternative
argument because petitioner’s interim fees application is now being considered as one for final fees.
5
shoulder injury. Id. Respondent asserts that Ms. Heine’s treating physician disclaimed
any relationship between her reported right shoulder pain and the vaccination in
question. Id. In light of this, as well as numerous inconsistencies in the record with
respect to how Ms. Heine reported the onset of her alleged injury, respondent requests
that the court find petitioner’s claim lacked reasonable basis and deny her application
for attorneys’ fees and costs. Id. at 8.
Mr. Kraus explains that on the eve of the statute of limitations expiration, Ms.
Heine insisted that the collected medical records were inaccurate or incomplete. Pet.
Motion at 2 (ECF No. 13.). According to Mr. Kraus, his client’s assertions warranted
investigation and a continued records search was not possible in the time remaining.
Id. Although “[t]he statute of limitations is a factor that may affect the reasonable basis
analysis in appropriate circumstances” petitioner's counsel is still required to perform
due diligence, given the available evidence and amount of time prior to the running of
the statute of limitations. Chuisano, 116 Fed. Cl. at 287. The billing records
demonstrate that Mr. Kraus consistently and diligently worked to retrieve and review
medical records before the filing of Ms. Heine’s petition. Pet. Motion at 6-8 (ECF No.
13.). Given the circumstances, the undersigned finds that reasonable basis existed at
the time the petition was filed.
However, even though reasonable basis may exist at the time the petition is filed,
it “may later come into question if new evidence becomes available or the lack of
supporting evidence becomes apparent.” Chuisano, 116 Fed. Cl. at 288; see also
Perriera, 33 F.3d at 1377 (affirming the special master's finding that reasonable basis
existed until the evidentiary hearing); Hamrick, 2007 WL 4793152, at *4 (observing that
“[p]etitioner's counsel must review periodically the evidence supporting petitioner's
claim”). In cases where attorneys ultimately withdrew after determining there was no
reasonable basis, special masters have awarded fees and costs up to the date when
counsel “should have known” that the claim was legally insufficient. Perreira v. Sec'y of
Health & Human Servs., No. 90–847V, 1992 W L 164436, at * 2 (Fed. Cl. Spec. Mstr.
June 12, 1992).
Although Mr. Kraus announced his intention to withdraw in February 2017, he
should have been aware that Ms. Heine’s claim was legally insufficient earlier. In the
two months following the petition filing, Mr. Kraus was unable to locate further evidence.
Pet. Motion at 8-9 (ECF No. 13.) (Oct. and Nov. 2016 billing). In that passage of time,
the claim lost reasonable basis. The undersigned takes this depreciation of reasonable
basis into account in the lodestar analysis below.
IV. Appropriate Amount of Attorneys’ Fees and Costs
The Federal Circuit has approved the lodestar approach to determine
“reasonable attorneys' fees” and costs under the Act. Avera v. Sec'y of Health & Human
Servs., 515 F.3d 1343, 1347 (Fed. Cir.2008). The lodestar approach involves a two-
step process. First, a court determines an “initial estimate ... by ‘multiplying the number
of hours reasonably expended on the litigation times a reasonable hourly rate.’ ” Id. at
1347–48 (quoting Blum v. Stenson, 465 U.S. 886, 888 (1984)). Second, the court may
6
make an upward or downward departure from the initial calculation of the fee award
based on specific findings. Avera, 515 F.3d at 1348.
The lodestar approach requires that the reasonable hourly rate be multiplied by
the number of hours “reasonably expended on the litigation.” Avera, 515 F.3d at 1347–
48 (quotation and citation omitted). It is “well within the special master's discretion to
reduce the hours to a number that, in [her] experience and judgment, [is] reasonable for
the work done.” Saxton, 3 F.3d at 1521. Furthermore, a special master may reduce
hours sua sponte, apart from objections raised by respondent and without providing
petitioner notice and opportunity to respond. See Sabella v. Sec'y of Health & Human
Servs., 86 Fed. Cl. 201, 208–09 (Fed. Cl. 2009); see also Savin, 85 Fed. Cl. at 315–19
(quoting Duncan v. Sec'y of Health & Human Servs., No. 99–455V, 2008 WL 4743493,
at * 1 (Fed. Cl. 2008) (finding that “the Special Master has an independent responsibility
to satisfy himself that the fee award is appropriate and not limited to endorsing or
rejecting respondent's critique”)).
The undersigned finds that counsel’s requested hourly rates are reasonable and
in conformance with previously established rates for Mr. Kraus’s firm. See DiCianni v.
Sec’y of Health & Human Servs., No 15-1548V, ___ WL ___ (Fed. Cl. Spec. Mstr. Aug.
3, 2017). Furthermore, the undersigned finds that the number of hours billed up to and
including the filing of the petition to be reasonable.
However, approximately 40% of Mr. Kraus’s billed fees occurred after the filing of
the petition, yet no further evidence was received or reviewed in that time. According to
Mr. Kraus’s billing records, only eighteen minutes of medical record research was
conducted between October 1, 2016 and March 21, 2017. Pet. Motion at 9 (Dec. 14,
2016 call to Walgreens). Furthermore, petitioner’s supporting evidence was untimely
filed. See SPU Initial Order (ECF No. 5.); see also Pet. Exs. 1-7 (ECF No. 7).
Considering this alongside petitioner’s repetitive motions for extension for time, and lack
of additional evidence, the undersigned finds the number of hours billed to be
excessive. Silva, 108 Fed. Cl. at 405 (Spec. Mstr. did not abuse his discretion by
considering counsel’s lack of due diligence as a factor for denying attorneys’ fees).
Since petitioner’s counsel could have determined and reported the legal
sufficiency of her claim more diligently, the undersigned finds that a 20% reduction in
the overall requested attorneys’ fees is reasonable and appropriate. This results in a
reduction in the amount of $2,180.54. Petitioner is therefore awarded attorneys’ fees in
the amount of $8,722.16. See Ericzon, 2016 WL 447770 (reducing fee award by 10
percent); Barry, 2016 WL 6835542 (reducing fee award by 10 percent); Raymo, 2016
WL 7212323 (reducing fee award by 20 percent), mot. for rev. denied, 129 Fed. Cl. 691
(2016); see also Wasson, 24 Cl. Ct. at 484 (a line-by-line evaluation is not required in
determining a reasonable number of hours expended), aff’d in relevant part, 988 F.2d
131 (Fed. Cir. 1993). This reduction roughly accounts for half of Mr. Kraus’s billing for
the period after the petition was filed and affords a generous amount of time in which
counsel could have confirmed the existence of any further evidence.
The undersigned finds that petitioner’s requested costs in the amount of $672.77
7
to be reasonable and awards them in full.
V. Conclusion
Accordingly, the undersigned awards a lump sum of $9,394.93,
representing reimbursement for attorneys’ fees and costs, in the form of a check
payable jointly to petitioner and petitioner’s counsel, Edward M. Kraus, Esq.
The clerk of the court shall enter judgment in accordance herewith. 6
IT IS SO ORDERED.
s/Nora Beth Dorsey
Nora Beth Dorsey
Chief Special Master
6 Pursuant to Vaccine Rule 11(a), entry of judgment can be expedited by the parties’ joint filing of notice
renouncing the right to seek review.
8