Martin v. Secretary of Health and Human Services

In the United States Court of Federal Claims
OFFICE OF SPECIAL MASTERS
******************** *
JESSICA R. MARTIN, *
On behalf of KM, *
* No. 16-318V
Petitioner, * Special Master Christian J. Moran
v. *
* Filed: January 22, 2019
SECRETARY OF HEALTH AND *
HUMAN SERVICES, * Attorneys’ Fees and Costs,
* Guardianship Costs.
Respondent. *
*
******************** *
Dan W. Bolton, III, Bolton Law, PLLC, Cary, NC, for Petitioner;
Voris E. Johnson, Jr., United States Dep’t of Justice, Washington, DC, for
Respondent.
PUBLISHED DECISION AWARDING FINAL
ATTORNEYS’ FEES AND COSTS 1
Jessica Martin brought a successful petition for compensation from the
National Childhood Vaccine Compensation Program. She originally sought
$67,049.37 in attorneys’ fees and costs. An October 31, 2018 decision awarded
her the “irreducible minimum” in attorneys’ fees, and left controversial issues for
another day. At bar now are those controversial items, which include her request
1
Because this decision contains a reasoned explanation for the action in this case, the
undersigned is required 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). This means the decision will
be available to anyone with access to the internet. In accordance with Vaccine Rule 18(b),
petitioners have 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 before posting the decision.
for costs and attorneys’ fees incurred since judgment entered. For these, she seeks
an award of $33,549.37. She is awarded $26,542.85.
* * *
Represented by Dan Bolton, Ms. Martin filed her petition, on behalf of KM,
for compensation on March 11, 2016. Ms. Martin claimed that various vaccines,
which are contained in the Vaccine Injury Table, 42 C.F.R. §100.3(a), and which
KM received on August 23, 2013, caused KM to suffer transverse myelitis. The
parties were able to resolve the case informally, entering a joint stipulation that
was then adopted. The stipulation provided for one lump sum payment for the
benefit of KM via a “check payable to petitioner as court-appointed
guardian/conservator of the estate of KM,” one lump sum payment to petitioner for
past unreimbursed expenses, and the purchase of an annuity in which the life
insurance company promised to pay a certain amount per month for KM’s life “to
petitioner, as the court-appointed guardian/conservator of the estate of KM.”
Decision, issued Oct. 23, 2017, 2017 WL 6522406 (quotations from stipulation ¶ 8
and ¶ 10). Judgment entered on Oct. 31, 2017.
The stipulation adopted in the decision provided that Ms. Martin would be
established as the guardian of KM’s estate before any payments pursuant to the
stipulation were made. Stipulation at ¶ 16.2 Under North Carolina law, a guardian
of an estate must provide a surety. N.C. GEN. STAT. §35A-1230. 3 This
requirement is reinforced in the next sequential statute: “Before issuing letters of
appointment to a general guardian of the estate the clerk shall require the guardian
to give a bond payable to the State.” N.C. GEN. STAT. §35A-1231(a). The amount
2
This paragraph provides: “Petitioner represents that she presently is, or within 90 days
of the date of judgment will become, duly authorized to serve as guardian/conservator of KM’s
estate under the laws of the State of North Carolina. No payments pursuant to this Stipulation
shall be made until petitioner provides the Secretary with documentation establishing her
appointment as guardian/conservator of KM’s estate. If petitioner is not authorized by a court of
competent jurisdiction to serve as guardian/conservator of the estate of KM at the time a
payment pursuant to this Stipulation is to be made, any such payment shall be paid to the party or
parties appointed by a court of competent jurisdiction to serve as guardian(s)/conservator(s) of
the estate of KM upon submission of written documentation of such appointment to the
Secretary.”
3
In pertinent part, this statute states: “[N]o general guardian or guardian of the estate
shall be permitted to receive the ward's property until he has given sufficient surety, approved by
the clerk, to account for and apply the same under the direction of the court.” N.C. Gen. Stat.
§35A-1230.
2
of this bond is determined by statute. Id. Ms. Martin has paid this bond. See
Pet’r’s Mot., filed Mar. 8, 2018, appd’x 3 at 9.
On February 19, 2018, Ms. Martin filed a motion to amend the October 31,
2017 judgment. Ms. Martin requested the judgment include the cost of securing
this bond, which totals approximately $1,000 per year. 4
The Secretary responded to petitioner’s motion in two parts. First, the
Secretary argued that it was custom in the Vaccine Program to consider costs
associated with maintaining a guardianship as part of the attorneys’ fees and costs
process. Resp’t’s Resp., filed Feb. 27, 2018, at 3 (citing four cases where
guardianship costs were considered as part of that process). The Secretary
continued that amending the judgment was an unnecessary difficulty since the
undersigned could award the guardianship fee as part of the petitioner’s request for
attorneys’ fees and costs. Id. (“if the Special Master were to award any amount
for the guardianship bond fee, it would not be necessary (and in fact would be
more complicated) to amend the October 31, 2017 Judgment”). The second part of
the Secretary’s argument was a “prospective[]” objection to petitioner’s not yet
filed motion for the guardianship costs to be included in petitioner’s attorneys’ fees
and costs award. Id. at 3-7.
Through informal communication between the parties and the undersigned,
the petitioner was advised to include the request for guardianship costs as part of
her motion for attorneys’ fees and costs based on the Secretary’s request. Shortly
thereafter, the petitioner moved to strike her motion to amend the judgment.
Pet’r’s Mot., filed Mar. 5, 2018. The motion to strike was granted. Order, issued
Mar. 8, 2018.
On March 8, 2018, Ms. Martin filed a motion for reimbursement of
attorneys’ fees and costs. As expected, the motion included a request for
compensation of costs associated with creating and maintaining the guardianship
for KM. The motion comprised of the following:
Costs Not Related to Guardianship 14,984.37
Guardianship Costs 12,965.00
Attorney Fees 39,100.00
Total 67,049.37
4
The cost of the bond is a function of the amount bonded. This amount will decrease
each year. The first year of the bond cost the petitioner $1,315 and the last year of the bond cost
the petitioner $410. See Pet’r’s Mot., filed Mar. 8, 2018, appd’x 3 at 7.
3
The Secretary responded to petitioner’s motion. Aside from the objections
to the guardianship costs raised in his February 27, 2018 response, the Secretary
did not object to petitioner’s request. Resp’t’s Resp., filed March 19, 2018, at 2.
Specifically, the Secretary stated that he is “satisfied that the statutory and other
legal requirements for an award of attorneys’ fees and costs are met” and
recommended that the undersigned exercise his discretion in determining “a
reasonable award for attorneys’ fees and costs.” Id. at 2-3.
Because of the complexity of some of the issues presented by the
petitioner’s fees motion, the undersigned issued an order scheduling a status
conference, to be held on July 24, 2018. See order, issued June 28, 2018. In this
order, the undersigned requested that the parties be prepared to answer several
questions relating to the statutory basis for Ms. Martin’s request that guardianship
costs be included in the motion for attorneys’ fees and costs. During the July 24,
2018 status conference, the Secretary requested additional time to formulate his
position on the statutory authority for a special master to award guardianship costs
because he was still formulating his opinion on that very question in a different
case. Order, issued July 26, 2018. This request was granted, and the Secretary
was ordered to submit a brief after his position in the related matter was
formulated. Id. The Secretary filed his brief on August 27, 2018, and the
petitioner replied on September 10, 2018.
On October 23, 2018, the petitioner amended her motion for fees to include
$3,600 in attorney’s fees incurred subsequent to the original fees motion as well as
$2,000 spent on establishing a special needs trust. These trusts are set up to ensure
that injured children can maintain Medicaid benefits since, if the award passed
directly to the petitioner, KM may become ineligible for Medicaid. See, e.g.,
Torres v. Sec'y of Health & Human Servs., No. 09-867V, 2013 WL 2256136, at *3
(Fed. Cl. Spec. Mstr. Apr. 30, 2013) (discussing the benefit of a special needs trust
for injured minors who receive compensation).
On November 2, 2018, the Secretary responded to the petitioner’s
supplemental fees request. The Secretary stated that he left it to the “discretion of
the Special Master to determine the reasonableness of petitioner’s counsel’s
supplemental fee request.” Resp’t’s Resp., filed Nov. 2, 2018, at 1. However, the
Secretary objected to any award of fees or costs relating to the establishment of a
special needs trust, arguing that the creation of the trust is not related to a
proceeding on the petition. Id. at 1-2.
4
On October 31, 2018, the undersigned awarded Ms. Martin interim fees in
the amount of $39,100. This amount represented an “irreducible minimum” of her
fees request and covered all attorney and paralegal fees incurred prior to the March
8, 2018 motion. Interim Fees Decision, issued October 31, 2018, 2018 WL
6241543.
The remaining portions of Ms. Martin’s fees request are now ripe for
adjudication.
* * *
Because Ms. Martin received compensation, she is entitled to an award of
reasonable attorneys’ fees and costs. 42 U.S.C. § 300aa–15(e). Thus, the
questions are (1) whether Ms. Martin can be reimbursed for fees her attorney
incurred in the dispute over attorney’s fees, (2) whether Ms. Martin seeks a
reasonable amount of costs for her life care planner, (3) whether Ms. Martin can be
reimbursed for the costs of maintaining a guardianship, and (4) whether Ms.
Martin can be reimbursed for the costs of establishing a special needs trust. Ms.
Martin’s fees and costs are addressed in turn.
I. Attorneys’ Fees
The Federal Circuit has approved the lodestar approach for evaluating the
content of fee requests. Calculating the lodestar is a two-step process. Avera v.
Sec’y of Health & Human Servs., 515 F.3d 1343, 1348 (Fed. Cir. 2008). 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
make an upward or downward departure from the initial calculation of the fee
award based on specific findings. Id. at 1348.
A. Reasonable Hourly Rate
The petitioner requested the same hourly rate for her attorney, Mr. Bolton, as
was found reasonable in the interim fees decision. The undersigned continues to
find the requested rate reasonable for the reasons set forth in the interim decision.
See Interim Fees Decision, issued Oct. 31, 2018, at 5.
5
B. Reasonable Number of Hours
The second factor in the lodestar formula is a reasonable number of hours.
Reasonable hours are not excessive, redundant, or otherwise unnecessary. See
Saxton v. Sec’y of Health & Human Servs., 3 F.3d 1517, 1521 (Fed. Cir. 1993).
While the vast majority of Ms. Martin’s fee request was addressed in the
October 31, 2018 decision awarding interim fees, Ms. Martin has supplemented
her initial request with a request for $3,600 in fees incurred during the pendency of
the present motion, but subsequent to the judgment on the merits. See Pet’r’s
Mot., filed Oct. 23, 2018. These fees are often referred to as “fees on fees.”
Relying, in part, on Vaccine Rule 10, the Secretary seemed to suggest that
special masters cannot award fees for litigating fees. Resp’t’s Resp., filed Aug. 27,
2017, at 2-4 and 6-7. But, after Ms. Martin filed her October 23, 2018 motion for
supplemental fees, including fees incurred for litigating fees, the Secretary did not
interpose any objection to awarding those fees. In light of the Secretary’s lack of
objection to any specific entries in Mr. Bolton’s bill, the undersigned has reviewed
the billing statement for its reasonableness. See McIntosh v. Sec’y of Health &
Human Servs., 139 Fed. Cl. 238 (2018).
The Federal Circuit has endorsed awards of attorneys' fees for litigation fee
disputes. Schuenemeyer v. United States, 776 F.2d 329, 333 (Fed. Cir.
1985). Special Masters have generally allowed “fees for fees,” albeit with
reductions consistent to maintain the reasonableness of any particular request.
See Turkupolis v. Sec'y of Health & Human Servs., No. 10-351V, 2015 WL
393343, at *4-5 (Fed. Cl. Spec. Mstr. Jan. 9, 2015) (reducing fees for duplicative
and excessive work); Sucher v. Sec'y of Health & Human Servs., No. 07-58V,
2013 WL 5532179, at *18 (Fed. Cl. Spec. Mstr. Sept. 17, 2013) (not compensating
petitioners for time spent litigating an issue for which there was no basis to
litigate); Brown v. Sec'y of Health & Human Servs., No. 09-426V, 2013 WL
2350541, at *2-3 (Fed. Cl. Spec. Mstr. May 6, 2013) (reducing fees for fees by
two-thirds based on two out of three of the primary issues in petitioner's filings
being unreasonable); Garcia v. Sec'y of Health & Human Servs., No. 07-286V,
2011 WL 6941702, at *10 (Fed. Cl. Spec. Mstr. Dec. 13, 2011) (not compensating
an attorney for work necessitated by a problem the attorney created).
A review of the billing entries indicate that all of the individual entries and
the total number of hours billed are reasonable. Accordingly, petitioner is awarded
$3,600 in attorneys’ fees.
6
II. Costs
Ms. Martin seeks reimbursement for $33,549.37 in costs. This includes
routine costs of $400.00 for the filing fee, $81.47 for obtaining medical records,
$193.57 in postage, and $5.00 for the notary. These costs are reasonable and
awarded in full.
The balance of costs comes from (A) an invoice of $14,304.33 for a life care
planner (Nancy Bond), (B) $12,965.00 for costs associated with establishing and
maintaining a guardianship for KM, and (C) $2,000 for costs associated with
creating a special needs trust. These three are evaluated below.
A. Life Care Planner
Like attorneys’ fees, a request for reimbursement of costs must be
reasonable. Perreira v. Sec’y of Health & Human Servs., 27 Fed. Cl. 29, 34 (Fed.
Cl. 1992), aff’d, 33 F.3d 1375 (Fed. Cir. 1994). Reasonable expert fees—such as
the fee for a life care planner—are determined using the lodestar method, in which
a reasonable hourly rate is multiplied by a reasonable number of hours. Caves v.
Sec'y of Health & Human Servs., 111 Fed. Cl. 774, 779 (2013).
The hourly rate charged by petitioner’s life care planner appears reasonable.
However, the number of hours billed for this case does not. In the undersigned’s
experience, a typical life care planner may charge approximately $4,000-$5,000 for
a case of this complexity. Thus, the $14,304.33 invoiced here raises eyebrows.
The life care planner’s entries are often quite vague and make examining the
reasonableness of the number of hours difficult. Professionals who are seeking
reimbursement through the judicial system are expected to create invoices that
contain sufficient detail to allow an effective review of reasonableness. See
Avgoustis v. Shinseki, 639 F.3d 1340, 1344-45 (Fed. Cir. 2011). Although the
professional in Avgoustis was an attorney, who had claimed that the attorney-client
privilege overrode the expectation for detailed invoices, this same standard should
govern invoices life care planners create. However, in this case, Ms. Bond created
very unspecific entries for nearly all of the entries relating to the correspondence.
Representative examples are: “Email from Nancy,” “Emails from and to Dan,” and
“Spoke with Ms. Martin.” As this sample suggests, none of the entries describe the
subject of the communication.
Without knowing the subject of the communication, assessing the
reasonableness of the time spent is challenging. Nevertheless, some insights can
7
be gained by a quick perusal. Ms. Bond’s invoice contains over two hundred
entries, approximately 80% of which refers to correspondence. For this
correspondence, it appears that, with a handful of exceptions, the minimum entry
duration is 0.2 hours. As an example, Ms. Bond charged 12 minutes for leaving a
voicemail “for Dan [Bolton] to call me.” This was not the only such entry, the life
care planner also charged 12 minutes to leave a message for two other people to
call her as well. These time estimates appear excessive and indicate that the life
care planner relied on a minimum time increment that resulted in excessive billing.
See Rasmussen v. Sec'y of Health & Human Servs., No. 91-1566V, 1996 WL
752289, at *2 (Fed. Cl. Spec. Mstr. Dec. 20, 1996) (noting that counsel’s practice
of billing in increments not smaller than a quarter hour could result in overbilling).
Other entries indicate that the life care planner billed for secretarial work,
including the time it took to purchase airfare, to reserve a hotel room, to confirm
the address for the site visit, to seek directions via MapQuest, and to conduct even
more research for her own flights. It is well-established that secretarial work
should not be reimbursed at professional rates. Cf. Bratcher v. United States, 136
Fed. Cl. 786, 796, reconsideration denied, 137 Fed. Cl. 645 (2018) (declining to
reimburse attorneys for work even at paralegal rates when plaintiffs failed to
demonstrate that the work was not “largely clerical or secretarial in nature”).
Furthermore, Ms. Bond expended a non-insubstantial amount of time
researching commonplace costs (e.g., skilled nursing providers, cleaning, hand
controls, and a Bruno seat). The amount of time spent researching these costs
appears excessive. See Manis v. Sec'y of Health & Human Servs., No. 13-732V,
2016 WL 4437959, at *3 (Fed. Cl. Spec. Mstr. Apr. 12, 2016) (finding a $5,580
life care plan excessive, noting that “given life care planners' professional
expertise, the projected costs for certain relatively common items (such as
medications, physical therapy, neurology appointments, and high deductibles)
should be readily available to them, and thus quickly accessible. Life care planners
are expected to have familiarity with such commonplace costs”).
Life care planning contributes to a process by which the parties reliably
estimate future medical expenses that the Vaccine Act authorizes. See Glaser v.
Sec'y of Health & Human Servs., No. 06-764V, 2016 WL 4491493, at *11 (Fed.
Cl. Spec. Mstr. June 6, 2016) (“as the Vaccine Program has matured, the role of
life care planners in assisting parties calculate damages awards has grown, and
made their jobs more complex as well—resulting in their services becoming more
expensive”), decision vacated on reconsideration in non-pertinent part, No. 06-
764V, 2016 WL 4483022 (Fed. Cl. Spec. Mstr. June 29, 2016). However, the
importance, prevalence, and expense of life care planners to the Vaccine Program
8
only emphasizes the importance of a careful review of the billed expenses. Here,
the life care planner’s invoice does not support the conclusion that the number of
hours billed was appropriate. In the undersigned’s estimation, a 35% reduction in
the compensated hours is appropriate and results in a reasonable, if not generous,
award.
B. Guardianship Costs
Ms. Martin also requests $12,965.00 in costs associated with establishing
and maintaining the guardianship for KM. As will be discussed below, the
Secretary does not contend that costs associated with establishing a guardianship
are not reimbursable under the Act. However, the Secretary does argue that all
costs associated with maintaining a guardianship are ineligible. Furthermore, the
Secretary argues that all guardianship costs, regardless of whether they pertain to
establishing or maintaining the guardianship, must be incurred prior to the entry of
judgment to be compensable under the Act.
1. Background Law Regarding Guardianship Requirement
The question of whether costs associated with establishing and maintaining a
guardianship can be compensated under the Vaccine Act has been a lingering
question in the Vaccine Program. As discussed below, different special masters
and judges of the Court of Federal Claims have come to different answers on this
very question. In addition, a recent case decided by Judge Lettow of the Court of
Federal Claims also offers another approach as to how the Vaccine Program may
address the question of guardianship costs going forward. See McCulloch v. Sec'y
of Health & Human Servs., No. 09-293V, 2018 WL 1868584, at *4 (Fed. Cl. Apr.
3, 2018), appeal docketed, no. 2018-2046 (June 6, 2018). In McCulloch, the
special master had awarded petitioner’s attorneys’ fees request, which included
funds for the preparation of an annual guardianship plan, the annual accounting of
the estate, an annual audit fee, and the annual bond premium. Respondent objected
on the basis that these costs were not reimbursable under the terms of the Act.
Judge Lettow agreed with respondent, finding that “the Vaccine Act's terms
specify that reimbursement of attorneys' fees and costs is proper only for those
“incurred in any proceeding on [a Vaccine Act] petition” and that the state
guardianship proceedings were “not themselves proceedings upon a Vaccine Act
9
petition.” 5 Judge Lettow did find, however, that the guardianship costs were
appropriate under 42 U.S.C. § 300aa–15(a)(1)(A) as “reasonable projected
unreimbursable expenses” resulting from the vaccine-related injury. 6
McCulloch will provide a vehicle for the Federal Circuit to interpret this
provision of the Vaccine Act for the first time. Once the Federal Circuit issues a
precedential decision, its interpretation will be binding. See Guillory v. Sec'y of
Health & Human Servs., 59 Fed. Cl. 121, 124 (2003), aff'd, 104 Fed. Appx. 712(Fed. Cir. 2004). Until the Federal Circuit speaks, other previous adjudications by
special masters and judges of the Court of Federal Claims serve as persuasive
authority for deciding the case here. See Hanlon v. Sec'y of Health & Human
Servs., 40 Fed. Cl. 625, 630 (1998), aff'd, 191 F.3d 1344 (Fed. Cir. 1999).
As the respondent notes, judges of the Court of Federal Claims have found
the statutory language to preclude awards for attorneys’ fees and costs for the
“myriad legal implications of establishing or administering an estate.” Siegfried v.
Sec'y of Health & Human Servs., 19 Cl. Ct. 323, 325 (1990). In another case
concerning guardianship costs, a judge of the claims court made clear that just
because an expense was incurred but for a vaccine injury did not make the expense
compensable. Mol v. Sec'y of Health & Human Servs., 50 Fed. Cl. 588, 591
(2001); see also Lemon v. Sec'y of Dep't of Health & Human Servs., 19 Cl. Ct.
621, 623 (1990) (disallowing fees related to the administration of the estate of
petitioner’s child).
Part of the confusion arises out of the ambiguity as to whether creating a
guardianship is statutorily required. The Vaccine Act notes that petitions relating
to an alleged vaccine injury suffered by a minor or disabled person must be
brought by their legal representatives. 42 U.S.C. § 300aa-11(b)(1)(a). The statute
defines a legal representative as “a parent or an individual who qualifies as a legal
guardian under State law.” 42 U.S.C. § 300aa-33(2). As noted by Judge Bruggink
in Spates v. Sec'y of Health & Human Servs., there is some apparent ambiguity as
to “whether a parent is a legal representative per se, irrespective of state law, or
whether a parent must simultaneously qualify as a legal guardian under state law to
5
As noted previously, the Secretary appears to take a different position here, arguing that
the establishment of the guardianship was a proceeding on the petition. Resp’t’s Br., filed Aug.
27, 2018, at 5.
6
With amazing prescience, Ms. Martin originally attempted to modify the merits
judgment. See Pet’r’s Mot., filed Feb. 19, 2018. However, she later filed a motion to strike her
motion. Pet’r’s Mot., filed Mar. 5, 2018. Ms. Martin has not renewed her motion to amend the
merits judgment.
10
be a legal representative under the Act.” 76 Fed. Cl. 678, 681 (2007). While some
cases have wrestled with this question, the Federal Circuit has not offered any
guidance on this specific issue. See, e.g., Taylor v. Sec'y of Health & Human
Servs., No. 16-1382V, 2017 WL 6523675, at *3 (Fed. Cl. Spec. Mstr. Oct. 30,
2017).
This ambiguity is not necessarily bad. Because one interpretation of section
33(2) permits a parent of a minor to prosecute a petition without first being
appointed a guardian under state law, special masters have adjudicated many cases
with a parent as a petitioner. For example, in the vast majority of the more than
4,000 autism cases, the petitioner was a parent who had not gone to probate court
to be appointed guardian. Because the autism cases were not successful, the
thousands of parents avoided the time, trouble, and expense of bringing a probate
court action.
However, in cases in which parents receive compensation for their child, the
alternative interpretation of section 33(2) comes into play. Because it is at least
arguable that parents can act as petitioners only when a process under state law
recognizes them as guardians, the Secretary requires, as part of a stipulation, that
parents agree to be appointed guardians whom courts supervise. 7 (For the
language of the stipulation in the present case, see footnote 2 above.) The
involvement of the state probate court makes much more sense in compensated
cases. The probate court can oversee the actions of the parents / guardians to
ensure funds are used for the benefit of the injured child / ward. Importantly, for
the purpose of this proceeding, the Secretary has taken the position that the Act
requires the establishment of legal guardianship to bring the claim. Resp’t’s Br.,
filed Aug. 27, 2018, at 5-6.
Since the Secretary has chosen to impose these guardianship costs as a
condition to an award based upon a stipulation, special masters have awarded
guardianship costs in the form of attorneys’ fees over the years. In doing so,
special masters have often stated that doing so was mere common sense. See, e.g.,
Finet v. Sec'y of Health & Human Servs., No. 03-348V, 2011 WL 597792, at *3
(Fed. Cl. Spec. Mstr. Jan. 31, 2011) (“This trend of using common sense to award
guardianship costs when they are mandated as a sine qua non of receiving a
7
Like typical litigation, most cases in the Vaccine Program, including this one, resolve
via an informal resolution between the parties. In the context of negotiations, the parents /
petitioners might conceivably object to the Secretary’s demand that they agree to be appointed
guardians. However, the undersigned is not aware of any instances in which the Secretary has
bargained away a demand for guardianship.
11
vaccine damages award should continue”); Cansler v. Sec'y of Health & Human
Servs., No. 09-596V, 2011 WL 597791, at *3 (Fed. Cl. Spec. Mstr. Feb. 2, 2011)
(“it is unconscionable to request, negotiate or demand [a guardianship] for the
recipient of the vaccine funds and then shift the costs to the parent. . . .
[R]espondent's position on this close issue is shortsighted and threatens their stated
policy, a very good policy, of protecting the minor's vaccine award”) (citing
Ceballos v. Sec'y of Health & Human Servs., No. 99-97V, 2004 WL 784910 (Fed.
Cl. Spec. Mstr. Mar. 25, 2004)).
While the Secretary states that a guardianship is required “to bring the
claim,” Resp’t’s Br., filed Aug. 27, 2018, at 5, the Secretary has not, in the
undersigned’s experience, often filed a motion to dismiss a Vaccine Petition for
lack of standing. Cf. Bernhardt v. Secʼy of Health & Human Servs., 82 Fed. Cl.
287 (2005) (the Secretary questioned whether a non-custodial parent could file a
petition). The Secretary’s inaction has contributed to a “practice [in which] this
requirement is not strictly enforced.” Resp’t’s Br. at 5. This is not necessarily a
bad thing; the Secretary’s exercise of discretion in not filing motions to dismiss
seems sensible insofar as a motion to dismiss would probably prompt petitioners to
file state court actions to create guardianships, incur fees, and ultimately recoup
those fees from the Vaccine Injury Trust Fund.
Here, Ms. Martin’s case followed a typical pattern in that she became her
child’s guardian only after she was awarded compensation from the Vaccine
Program, and she now seeks reimbursement for the attorneys’ fees and costs
associated with the guardianship. The undersigned ordered the parties to brief this
issue. The parties’ arguments are summarized in turn.
2. The Secretary’s Arguments
The Secretary urges the undersigned to construe narrowly the portion of the
Vaccine Act that authorizes reimbursement of fees and costs. In support of his
argument, the Secretary relies heavily on the Supreme Court’s instruction that fee-
shifting statutes and statutes waiving sovereign immunity must be narrowly
construed in favor of the presumption that Congress did not intend to waive
sovereign immunity and that parties will pay their own attorney’s fees. Resp’t’s
Br., filed Aug. 27, 2018, at 2 (citing Baker Botts L.L.P. v. ASARCO LLC, 135 S.
Ct. 2158, 2164 (2015); Lane v. Pena, 518 U.S. 187, 192 (1996); and Nantkwest,
Inc. v. Iancu, 898 F.3d 1177, 1186 (Fed. Cir. 2018)). Accordingly, the Secretary
asks the undersigned to interpret the language of the Vaccine Act strictly and to
find as compensable only those costs that have been “necessarily incurred in
connection with resolving the merits of a petition for compensation filed under the
12
Act, through entry of final judgment on the underlying claim.” Resp’t’s Br., filed
Aug. 27, 2018, at 3.
Applying the statutory interpretation offered by the Secretary to the issue of
guardianship costs and Ms. Martin’s case specifically, the Secretary acknowledges
that, generally speaking, costs associated with establishing a guardianship are
reimbursable since the state guardianship proceeding would be part of the
proceedings on the petition. Resp’t’s Br., filed Aug. 27, 2018, at 5. 8 However, the
Secretary argues that, to the extent Ms. Martin incurred costs associated with
establishing the guardianship after the date judgment entered, those costs would
not be reimbursable since entry of judgment marks a point at which costs
subsequently incurred are not compensable under the Vaccine Act. Id. at 6(“However, insofar as the final judgment on the underlying merits concludes the
proceedings on the petition, any guardianship costs incurred after that point in time
would not be reimbursable”). 9 Accordingly, the Secretary’s position appears to be
that costs associated with establishing a guardianship are compensable so long as
those costs were incurred prior to judgment.
8
By recognizing that costs associated with establishing an estate are reimburseable, the
Secretary has taken a position different from holdings from judges of the Court of Federal
Claims (or its predecessor). For example, in Siegfried, the Claims Court stated: “The [Vaccine]
Act does not provide attorney fee awards to cover the myriad legal implications of establishing
or administering an estate.” 19 Cl. Ct. at 325. Siegfried, in turn, was the primary reason that
Mol disallowed costs associated with establishing a guardianship. 50 Fed. Cl. at 588. However,
neither Siegfried nor Mol discussed the significance of sections 11(b)(1)(a) (requiring legal
representatives to bring actions for injuries a minor suffers) and 33(2) (defining a legal
representative).
Although the Secretary’s position in Ms. Martin’s case differs from the outcome of
Siegfried and Mol, the Secretary’s current argument is consistent with how he argued the motion
for review in McCulloch. There, “the reimbursement of guardianship costs already incurred
[was] not challenged by the government.” McCulloch, 137 Fed. Cl. at 600.
9
It appears that Ms. Martin may have incurred some of the costs associated with
establishing the guardianship after the entry of judgment for Ms. Martin’s petition. See Pet’r’s
Mot., filed Mar. 8, 2018, appd’x 3 at 3 (noting costs in November 2017 when judgment entered
October 31, 2017). Even though the Secretary took the position that costs incurred following
the entry of judgment are not compensable, he did not specifically make the argument that Ms.
Martin’s costs for establishing the guardianship were thus not compensable, leaving it to the
undersigned to make this inference. As a result, the factual question of when Ms. Martin
incurred costs in relation to the date of judgment is underdeveloped in the record. However,
because the decision here does not turn on this question, additional fact-finding is not necessary
at this time.
13
However, the Secretary also argues that costs paid either before or after the
entry of judgment cannot be reimbursed under the Act when those costs are related
to maintaining the guardianship in future years. The Secretary takes the position
that Ms. Martin’s prepayment of future years’ guardianship costs—costs required
to maintain the guardianship going forward—have not been “incurred” since they
are speculative future costs. Accordingly, the Secretary argues, they are not
appropriate for compensation under his reading of 42 U.S.C. § 300aa-15(e). Id.
3. Ms. Martin’s Arguments
Ms. Martin contends that, as an initial matter, the Secretary’s reliance on
Baker Botts to narrowly construe the language of the Vaccine Act ignores the fact
that the Vaccine Act provides a compensation program wherein all reasonable
attorneys’ fees and costs are reimbursable. Pet’r’s Br., filed Sept. 10, 2018, at 6-7.
In other words, the petitioner contends that a default towards the American Rule
when interpreting the language of the Vaccine Act is inapposite since the Vaccine
Act did not contemplate petitioners shouldering the burden of any of their
reasonable costs related to bringing petitions with a reasonable basis and good
faith. In this way, comparing the Vaccine Act to other areas of federal law would
be, in the petitioner’s opinion, a mistake.
Ms. Martin also rebuts the Secretary’s contention that the costs in question
have not been “incurred.” The petitioner argues that the decision and judgment
entered into this case specifically directed her to establish a conservatorship for
KM and that that is exactly what she did. Id. at 7-8. By prepaying the costs for the
guardianship bond, she claims that she attempted to guarantee that KM would
receive her compensation, uninterrupted, as provided in the decision and judgment.
Id.
4. Analysis
A foundational question in this case is whether the undersigned should give
effect to the plain meaning of the Vaccine Act or whether, as the Secretary argues,
canons of statutory construction require that the Act be construed strictly in the
Secretary’s favor.
The Secretary offers two arguments in support of his position that the statute
must be narrowly construed. The first is based on the principle that the sovereign
is immune and the second recognizes the longstanding tradition of the American
Rule regarding attorneys’ fees. The Secretary argues that, as a matter of well-
established canons of statutory construction, the Vaccine Act must be interpreted
14
by the undersigned with a presumption in favor of each of these default rules.
However, neither is persuasive.
The Secretary is correct that “a waiver of the Federal Government’s
sovereign immunity must be unequivocally expressed in statutory text.” Lane, 518
U.S. at 192. Put another way, absent clear language, waivers of sovereign
immunity are construed narrowly. United States v. Williams, 514 U.S. 527, 531
(1995).
On the other hand, courts should not narrow Congress’s waiver of sovereign
immunity beyond Congress’s objectives. Ed A. Wilson, Inc. v. Gen. Servs.
Admin., 126 F.3d 1406, 1408 (Fed. Cir. 1997) (holding that once it has been
established that Congress has waived immunity, the courts should not assume the
authority to limit the waiver that Congress has established); Jones v. Brown, 41
F.3d 634, 638 (Fed. Cir. 1994) (quoting United States v. Kubrick, 444 U.S. 111,
117–18 (1979)). In Jones, the Federal Circuit declined to narrowly construe a
statute authorizing fees, the Equal Access to Justice Act, because the statute
constituted an “unequivocal expression of the government’s consent to be sued”
with respect to the contested fees and costs. 41 F.3d at 634. Instead, Jones relied
on the plain meaning of the statute, though in doing so it considered the context
surrounding the passage of the disputed Act. Id. at 640. Accord Brown v.
Gardner, 513 U.S. 115, 118 (1994) (“the meaning of statutory language, plain or
not, depends on context”). 10
The Vaccine Act creates a compensation program that waives sovereign
immunity. See 42 U.S.C. § 300aa-12(b) (identifying the Secretary of Health and
Human Services as the respondent); cf. Schumacher v. Secʼy of Health & Human
Servs., 2 F.3d 1128, 1135 n.6 (Fed. Cir. 1993) (indicating that Congress intended
the government to pay compensation to parents who had filed a lawsuit against the
manufacturer of a drug that allegedly made their child susceptible to adverse
reactions to other chemical substances). Thus, Congress has made the appropriate
waiver and to narrow it beyond the plain meaning of the Vaccine Act, by
construing the Act in favor of the Secretary, would require the undersigned to
intrude on Congress’s prerogatives.
The Secretary also argues that the Vaccine Act must be construed with a
presumption towards the longstanding tradition of the American Rule for
10
While Jones interpreted a fee-shifting statute, the Equal Access to Justice Act, Jones
did not discuss the American rule that requires litigants to pay their own attorneys’ fees and
costs.
15
attorneys’ fees and costs. Under the American Rule, parties pay their own
attorneys’ fees and costs. Similarly, any shift from the default of the American
Rule must be the result of “specific and explicit provisions” contained in the statute
that demonstrate Congress intended to deviate from the default state of affairs.
Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 260 (1975). As the
Supreme Court recently noted, statutes that invade the common law should be read
with a presumption favoring the retention of long-established and familiar legal
principles. Baker Botts, 135 S. Ct. at 2169.
However, as the Federal Circuit recently restated en banc, in passing the
Vaccine Act, “Congress specifically and explicitly authorized the award of
attorneys' fees.” Nantkwest, 898 F.3d at 1186. By doing so, the Federal Circuit
noted, the Vaccine Act “displace[d] the American Rule.” Id. (citing Sebelius v.
Cloer, 569 U.S. 369, 380 (2013)). Accordingly, the only question here is whether
prepayment of future guardianship costs is compensable under a plain reading of
the statute. Cf. Nantkwest, 898 F.3d at 1186 (interpreting Cloer to hold that once it
was determined that Congress displaced the American Rule, “the only question for
the Court was whether attorneys' fees could be recovered for untimely petitions”).
Proceeding in this manner, as with any question of statutory interpretation,
the analysis begins with the language of the statute itself. See, e.g., United States
v. Ron Pair Enterprises, Inc., 489 U.S. 235, 241 (1989). The Act provides that
compensation for attorneys’ fees must be limited to “reasonable attorneys’ fees,
and . . . other costs, incurred in any proceedings on such petition.” 42 U.S.C. §
300aa-15(e)(1). Thus, after petitioners are found entitled to an award of their
attorneys’ fees and costs, the Vaccine Program will award those costs that are (1)
incurred, (2) in a proceeding on the petition, and (3) are reasonable. 42 U.S.C. §
300aa-15(e). The question at bar is whether the costs associated with KM’s
guardianship meet these three requirements.
5. Application
The present question is complicated by the different costs in consideration as
well as by the fact that the Secretary’s position regarding those costs are a function
of when the costs were incurred. For the purposes of clarification, the various
costs and the Secretary’s position are restated here:
16
Item Amount Respondent’s Position
on Compensability
Fee for Attorney Abigail Peoples for Compensable, as long
establishing the guardianship $875.00 as incurred prior to
judgment
Fee for filing for guardianship Compensable, as long
$120.00 as incurred prior to
judgment
Cost for the first year of the Compensable, as long
guardianship bond $1,315.00 as incurred prior to
judgment
Cost for future years’ guardianship Not compensable
bond $10,655.00 under any
circumstances.
These costs can be divided into those costs related to establishing the
guardianship (the first three) and maintaining the guardianship (the fourth). The
costs can also be analyzed to the extent that it was paid prior to or after judgment.
For each of these costs, the undersigned will evaluate whether the cost meets the
three statutory requirements for compensation.
Incurred. As exhibited by the check entered into the record, Ms. Martin has
paid the costs for establishing and maintaining the guardianship until KM reaches
the age of 18. See Pet’r’s Mot., filed Mar. 8, 2018, appd’x 3 at 9. Thus, the issue
turns on the legal question of what “incur” means.
In a case interpreting a since repealed section of the Vaccine Act, the
Federal Circuit defined “incur.” “To ‘incur’ expenses means to pay or become
liable for them.” Black v. Sec'y of Health & Human Servs., 93 F.3d 781, 785 (Fed.
Cir. 1996). Thus, since Ms. Martin has paid the expense, it appears that she has
incurred it.
Despite the seemingly clear language of the Federal Circuit in Black, the
Secretary argues here that Ms. Martin has not incurred an expense with regards to
these guardianship costs because when she made the payment she was not yet,
according to the Secretary, legally liable for that cost. Resp’t’s Br., filed Aug. 27,
17
2018, at 2-3. To support this interpretation of what it means to “incur” an expense,
the Secretary cites the Black decision, but from the Court of Federal Claims. In
this decision, the judge noted that an expense is incurred “at the moment one
becomes legally liable, not at the moment when one pays off the debt, nor at the
moment when one decides that an expense will become necessary one day in the
future.” Black v. Sec'y of Health & Human Servs., 33 Fed. Cl. 546, 550 (1995),
aff'd, 93 F.3d 781 (Fed. Cir. 1996). While this passage offers some support to the
Secretary’s argument, the Secretary has not explained why the Federal Circuit’s
definition of incurred should not control. 11
In addition, the parties must have contemplated that Ms. Martin would
maintain her status as guardian of KM. The Secretary promised to purchase an
annuity that would provide a monthly benefit to KM and these payments from the
insurance company would be made payable to Ms. Martin “as the court-appointed
guardian/conservator of the estate of KM.” Stipulation ¶ 10.
On the petition. A compensable cost must also be incurred “on the petition.”
The Secretary’s briefs appear to conceive of this requirement as having two parts.
First, the Secretary argues that a cost incurred on a petition must be clearly
contemplated by both the Vaccine Act and the Vaccine Rules. Resp’t’s Br., filed
Aug. 27, 2018, at 5-6. Second, the Secretary argues that a cost incurred on a
petition must be incurred prior to the date judgment enters. Id. at 6. These two
components of the Secretary’s argument, as they relate to Ms. Martin’s motion, are
addressed in turn.
As the Secretary concedes, “both the Act and the Rules clearly contemplate
that a legal guardianship will need to be established at some point during the
proceedings on the petition” and, accordingly, the costs associated with
establishing that guardianship are reimbursable. Id. at 5. Nonetheless, the
Secretary still argues that future guardianship costs are not proceedings on the
petition.
Once the Secretary concedes that establishing the guardianship is a
proceeding on the petition, it seems to follow that maintaining the guardianship is
11
The Secretary’s reliance on a somewhat misleading quote from the Court of Federal
Claims while omitting the binding language from the Federal Circuit that appears to be adverse
to the Secretary’s position is concerning, especially because the undersigned alerted the
Secretary’s counsel about the Federal Circuit’s opinion in Black in a status conference held on
July 24, 2018.
18
also part of the petition. After Ms. Martin places herself under the jurisdiction of
probate court to become KM’s guardian, the law in North Carolina requires her to
do certain things, such as obtain an annual bond. “Before issuing letters of
appointment to a . . . guardian of the estate the clerk shall require the guardian to
give a bond payable to the State.” N.C. Gen. Stat. 35A-1231(a). 12 Ms. Martin also
presented a letter from the attorney who represented them in the guardianship
proceeding, Abigail E. Peoples, and who cited relevant law from North Carolina.
Attorney People concluded that “Since the North Carolina courts have made this
bond a requirement in order for the guardianship to exist, I believe it is only proper
for HHS to pay the bond premium.” Pet’r’s Mot., filed Mar. 8, 2018, appd’x 3
at 2. North Carolina’s requirement for a bond makes this case distinguishable from
Barrett v. Sec'y of Health & Human Servs., No. 09-389V, 2014 WL 2505689, at
*6-7 (Fed. Cl. Spec. Mstr. May 13, 2014), in which a special master found that a
petitioner had failed to demonstrate that expenses associated with periodic filings
to the Pennsylvania Orphans’ Court were legally required. Accordingly, the
special master in Barrett declined to reimburse the petitioner for the associated
expenses.
The Secretary has not presented any argument as to how Ms. Martin could
avoid complying with the law requiring the bond. Moreover, it would seem that
the Secretary would want Ms. Martin, as a matter of policy and as a matter of her
compliance with the terms of the judgment, to comply with the state laws
surrounding guardianship. The Secretary does not reconcile how the same exact
expense can be “on the petition” on the day before judgment but not be the day
after.
As for the Secretary’s argument that any expense following the date of
judgment is, per se, not a cost “incurred on the petition,” the argument is
inconsistent with the stipulation. The stipulation stated: “Petitioner represents that
she presently is, or within 90 days of the date of judgment will become, duly
authorized to serve as guardian/conservator of KM’s estate under the laws of the
State of North Carolina.” Stipulation ¶ 16. By allowing Ms. Martin 90 days to
become KM’s guardian, the parties anticipated that Ms. Martin might take some
actions after the date of judgment that are part of the process for receiving
compensation through the Vaccine Program. Ms. Martin should not be penalized
12
Congress, presumably, was aware that state law required guardians to post bonds when
it enacted the Vaccine Act. See Fitzgerald v. Dep’t of Homeland Security, 837 F.3d 1346, 1355
(Fed. Cir. 2016).
19
for doing something the stipulation permitted her to do — become guardian after
the judgment.
The date of judgment has not been used to identify costs “incurred on the
petition.” During briefing, the undersigned directed the Secretary to address
whether attorneys’ fees relating to a motion for fees and costs that were incurred
after the date of judgment were compensable based on the Secretary’s proffered
interpretation of what constitutes a cost “on the petition.” In response, the
Secretary took the position that “a narrow construction of Section 15(e), as
required by Baker Botts, would not authorize reimbursement of fees and costs
incurred in connection with a motion for fees and costs, either before or after entry
of judgment on the merits.” Resp’t’s Br., filed Aug. 27, 2018, at 6-7. In other
words, the Secretary’s interpretation of the Act forecloses reimbursement of fees
incurred by petitioners on motions for fees and costs. As the Secretary
acknowledged, and as reviewed in section I.B, above, fees on fees have been
awarded in the Vaccine Program since its inception and the Secretary has not even
taken the step of challenging Ms. Martin’s request for these fees here. See
Resp’t’s Resp., filed Nov. 2, 2018, at 1-2. The undersigned is disinclined to
interpret the words of the Vaccine Act in a matter that runs contrary to decades of
practice in this Program including the Secretary’s own practice in this proceeding.
In addition, the Secretary’s argument that the date of judgment marks a
bright line by which all subsequent costs are now “off the petition” seems to
require the conclusion that costs incurred prior to filing the petition are similarly
“off the petition,” regardless whether those costs were clearly contemplated by the
Act and relate to the proceeding. However, the Secretary finds these types of costs
to be compensable when they are reasonable. Resp’t’s Br., filed Aug. 27, 2018, at
6-7. The Secretary does not explain how a cost that is incurred prior to filing of a
petition can be “on the petition” when costs incurred after the entry of judgment
are, according to the respondent, necessarily, “off the petition.”
In short, the undersigned agrees with the Secretary’s interpretation that for a
cost to be “on a petition,” the Vaccine Act or the Vaccine Rules must contemplate
the item. Because Ms. Martin’s establishment of the guardianship clearly meets
that statutory requirement, the undersigned finds that, necessarily, the costs
associated with maintaining the guardianship are similarly “on the petition.”
Furthermore, the undersigned declines to adopt the Secretary’s argument that the
cost must also occur, by law, prior to the entry of judgment. For these reasons, the
undersigned finds that the costs of establishing and maintaining Ms. Martin’s
guardianship are costs incurred on her Vaccine Program petition.
20
Reasonable. Of course, to incur a cost on a proceeding is not sufficient to
establish that the cost is compensable by the Vaccine Program. Before any cost is
reimbursed from the Vaccine Trust Fund, a special master or judge of the Court of
Federal Claims must conclude that the cost was reasonable. See McIntosh, 139
Fed. Cl. at 248. This requirement of the statute provides a robust line of protection
against petitioners abusing the Vaccine Program by incurring excessive expenses
or expenses not appropriate under the Act.
Ms. Martin’s request for costs she incurred to maintain the guardianship
totals $10,655.00. Interestingly, the Secretary does not appear to contest the
reasonableness of the expense explicitly. The Secretary describes the cost as
“modest,” Resp’t’s Br., filed Feb. 27, 2018, at 7, essentially conceding that they
are not excessive.13
It is true, as the Secretary argues, that these prepayment costs are speculative
insomuch as they may never be necessary. They are prepayments of a cost. KM
may move out of North Carolina to a state that does not require a guardianship
bond. 14 KM may also die before she reaches the age of 18. In opposing payments
for guardianships, the Secretary has argued that the speculative nature of the cost
creates the potential for a windfall for the petitioner in the case she moves or dies.
Resp’t’s Br., filed Feb. 27, 2018, at 7 (“if petitioner ever moves outside of North
Carolina, the alleged future costs may no longer be necessary, resulting in a
windfall for petitioner”); McCulloch v. Sec'y of Health & Human Servs., No. 09-
293V, 2017 WL 7053992, at *12 (Fed. Cl. Spec. Mstr. Dec. 19, 2017), aff'd in part
on other grounds, 137 Fed. Cl. 598 (2018) (“Respondent argues that if A.M. passes
away before the estimated date, it would potentially create a windfall for
petitioner.”) In this way, Ms. Martin’s decision to prepay the costs may be argued
to be an unreasonable expense that is, thusly, not compensable.
However, the undersigned does not find that the fact that these costs were a
prepayment makes the expense unreasonable. As an initial matter, the undersigned
13
Even more, he notes that Ms. Martin can pay for these costs out of the money received
in her award for compensation. Id. This, of course, is not what the compensation KM received
was for. Arguing that the compensation be used to pay for the guardianship expense is a
somewhat callous line of reasoning that discredits KM’s need and entitlement for the
compensation she was awarded. It treats the award as somehow granting more to Ms. Martin
than she was legally entitled to, something the undersigned sees no evidence to support.
14
The Secretary has not identified states that do not require a guardian to post a bond.
21
recognizes that there is some risk that KM may not require the guardianship bonds
due to the “vagaries of life.” Barrett, 2014 WL 2505689, at *5. But, it makes little
sense that the answer to these low probability events is to shift the cost of the high
probability event—KM’s need for the guardianship—entirely onto the petitioner.
Even more, the petitioner has taken reasonable steps to try to prevent any
such “windfall” from occurring.15 The monies for the future years’ guardianship
bond costs have been paid to the Bar Plan Surety and Fidelity Company with a
note that any overages in the bond fee, due to KM’s death or relocation, be
remitted to the Secretary. Pet’r’s Mot., filed Mar. 8, 2018, appd’x 3 at 8. While
the Secretary protests that he does not have an effective way of enforcing this
arrangement, see Resp’t’s Mot., filed Aug. 27, 2018, at 6, it seems that the
Secretary could be considered a third-party beneficiary of the existing contract or
the Secretary could have participated in the process by which Ms. Martin became
the guardian. Nonetheless, Ms. Martin’s attempt to address the Secretary’s
concern constitutes a reasonable effort. While this arrangement may not be
perfect, the perfect should not be the enemy of the good.
For the aforementioned reasons, the undersigned finds that those costs for
establishing and maintaining KM’s guardianship that were actually paid by the
petitioner are costs incurred by her on the petition and that they were reasonable
expenditures. Based on the plain meaning of the Vaccine Act, they are thus
compensable costs.
Although the undersigned finds that the costs of maintaining a guardianship
are reimbursable without consideration of the statutory and legislative context of
the Vaccine Act, consideration of this context is nonetheless an important element
of the analysis. Cloer, 569 U.S. at 380. In Cloer, all but two members of the
Supreme Court found that the Secretary’s position in the case was “inconsistent
with the goals of the fees provision itself.” Id. More specifically, the Court found
that the Secretary had failed to explain why Congress would have intended to
promulgate a statute that would have discouraged counsel from representing
certain difficult cases, which would have been the result of the Secretary’s
proffered interpretation of the Act. Id. Based on the consideration given to the
purposes of the Act in Cloer, the undersigned also finds it appropriate to visit
briefly that issue here to the extent it may inform the present question. See also
Saunders v. Sec'y of Health & Human Servs., 25 F.3d 1031, 1036 (Fed. Cir. 1994)
15
The amount of the bond for maintaining the guardianship is $10,655.00. Even if Ms.
Martin were to avoid the costs of paying the bond, her apparent “windfall” would remain, in the
Secretary’s word, “modest.”
22
(noting, in the context of the Vaccine Act, that a court should try to construe the
Act in a way which is consistent with the intent of Congress).
The Vaccine Act was enacted to provide generous compensation to
meritorious claimants. See Bruesewitz v. Wyeth LLC, 562 U.S. 223, 247 (2011)
(“Congress sought to provide generous compensation to those whom vaccines
injured.”) (citing H.R. Rep., at 5, 24, U.S. Code Cong. & Admin. News, 1986, at p.
6346, 6365); see also Cloer v. Sec'y of Health & Human Servs., 654 F.3d 1322,
1326 (Fed. Cir. 2011) (“the Vaccine Program was intended to provide relative
certainty and generosity of compensation awards in order to satisfy petitioners in a
fair, expeditious, and generous manner”) (internal citations omitted), aff’d, 569
U.S. 369 (2013). To achieve this objective, Congress also recognized the
importance of effective legal representation, which is why reasonable attorneys’
fees and costs are awarded when a claim is supported by reasonable basis and is
brought in good faith. See 42 U.S.C. § 300aa-15(e); Saunders, 25 F.3d at 1036(noting that a secondary purpose of the Act is to ensure that claimants have access
to a readily available and competent bar to prosecute their claims).
Of course, this generosity is not unbound and remains limited by the
restrictions imposed by the statute itself. Griglock v. Sec'y of Health & Human
Servs., 687 F.3d 1371, 1376 (Fed. Cir. 2012) (“Thus, the Vaccine Act provides a
generous compensation program, but with limits, including the statute of
limitations, to that generosity”). Nonetheless, within the bounds of the statutory
scheme laid out by Congress, it appears Congress’s objective was to provide
compensation generously, to shift the petitioners’ costs of obtaining compensation
onto the government, and to recognize and account for the importance of effective
representation in bringing these challenging cases.
In case any ambiguity exists regarding Congress’s intentions for what costs
associated with a petition the petitioners themselves would be personally
responsible for, the Vaccine Act explicitly prohibits attorneys from charging
petitioners any fees for services in connection with a petition in excess of that
amount awarded through the Program. 42 U.S.C. § 300aa-15(e)(3) (“no attorney
may charge any fee for services in connection with a petition filed under section
300aa-11 of this title which is in addition to any amount awarded as compensation
by the special master or court”). Thus, it would appear that Congress did not
intend for meritorious petitioners to be responsible for any of their reasonable fees
or costs related to services provided in connection with a petition. In the
undersigned’s opinion, the creation of the guardianship and the prepayment of the
bond costs for that guardianship are services provided to KM in connection with
her petition. Accordingly, the interpretation of the Vaccine Act proffered by the
23
Secretary appears directly at odds with the overall objectives of the Program as
well as the statutory context of the section in dispute.
C. Special Needs Trust
In her supplemental fees petition, Ms. Martin also requested reimbursement
of $2,000 associated with creating a special needs trust for KM. As noted before,
these trusts are created for the purpose of allowing petitioners to retain certain
Medicaid benefits. However, in contrast to guardianship costs, neither the Vaccine
Act, the stipulation to which the parties had agreed, nor the undersigned’s decision
on that stipulation, contemplated the creation of a special needs trust. Accordingly,
the cost is not compensable under Section 15(e) of the Vaccine Act since it is not a
proceeding on the petition. See also J.R. v. Sec’y of Health and Human Servs.,
No. 16-0813V, 2018 WL 5629723, at *2 (Fed. Cl. Spec. Mstr. Sept. 28, 2018)
(finding costs associated with the creation of a special needs trust to be
unreimbursable for these same reasons and noting two other decisions coming to
the same conclusion).
* * *
For the aforementioned reasons, petitioner is awarded:
A lump sum of $26,542.85 in the form of a check made payable to
petitioner and petitioner’s attorney, Dan Bolton, III.
These amounts represents reimbursement attorneys’ fees and other litigation
costs available under 42 U.S.C. § 300aa-15(e). In the absence of a motion for
review filed pursuant to RCFC Appendix B, the clerk of the court is directed to
enter judgment herewith.
s/Christian J. Moran
Christian J. Moran
Special Master
24