MELISSA CLOER, M.D., Petitioner-Appellant, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Respondent-Appellee.
2009-5052
United States Court of Appeals for the Federal Circuit
April 11, 2012
Appeal from the United States Court of Federal Claims in 05-VV-1002, Judge Lawrence J. Block. ON APPLICATION FOR ATTORNEYS’ FEES AND COSTS
ANISHA S. DASGUPTA, Attorney, Appellate Staff, Civil Division, United States Department of Justice, of Washington, DC, filed an opposition for respondent-appellee.
Before RADER, Chief Judge, NEWMAN, LOURIE, CLEVENGER, BRYSON, GAJARSA,1 LINN, DYK, PROST, MOORE, O‘MALLEY, REYNA, and WALLACH, Circuit Judges.
Opinion for the Court filed by Circuit Judge REYNA, in which Circuit Judges NEWMAN, LINN, DYK, MOORE, O‘MALLEY, and WALLACH join.
Dissenting opinion filed by Circuit Judge BRYSON, in which Chief Judge RADER and Circuit Judges LOURIE, CLEVENGER, GAJARSA, and PROST join.
REYNA, Circuit Judge.
ORDER
Dr. Melissa Cloer sought compensation under the National Childhood Vaccine Injury Act of 1986,
The court must now decide whether Dr. Cloer is eligible to receive an award of reasonable attorneys’ fees and costs in connection with her appeal. The Vaccine Act
I. BACKGROUND
Dr. Cloer was vaccinated for Hepatitis B in 1996 and 1997. Soon thereafter, she developed symptoms of MS. At that time, the medical literature was silent as to any connection between the Hepatitis B vaccination and MS. Several years later, Dr. Cloer learned of such a potential connection for the first time. By then her MS had significantly progressed.
Dr. Cloer filed a petition for compensation under the Vaccine Act. The Chief Special Master dismissed her petition as untimely because it was filed more than 36 months after her first symptom of MS had occurred, and the Court of Federal Claims affirmed. Cloer v. Sec‘y of Health & Human Servs., 85 Fed. Cl. 141 (2008). Dr. Cloer appealed, and a panel of this court reversed and remanded, ruling that her petition was not time-barred. Cloer v. Sec‘y of Health & Human Servs., 603 F.3d 1341 (Fed. Cir. 2010), vacated, 399 F. App‘x 577 (Fed. Cir. 2010).
Due to the importance of the issues raised by Dr. Cloer, we granted the government‘s petition for rehearing en banc to determine the applicability of the statute of
Dr. Cloer requested an award of reasonable attorneys’ fees and costs incurred in her appeal. The government opposed her request on the ground that the Vaccine Act does not permit such an award in connection with a time-barred claim.
II. DISCUSSION
The Vaccine Act establishes the criteria to be considered in determining whether a petitioner is eligible for attorneys’ fees.
(1) In awarding compensation on a petition filed under section 300aa-11 of this title the special master or court shall also award as part of such compensation an amount to cover—
(A) reasonable attorneys’ fees, and
(B) other costs,
incurred in any proceeding on such petition. If the judgment of the United States Court of Federal Claims on such a petition
does not award compensation, the special master or court may award an amount of compensation to cover petitioner‘s reasonable attorneys’ fees and other costs incurred in any proceeding on such petition if the special master or court determines that the petition was brought in good faith and there was a reasonable basis for the claim for which the petition was brought.
(emphasis added). In sum, attorneys’ fees are available where the petition was brought in good faith and there was a reasonable basis for the claim for which the petition was brought.
This court has not conducted a good faith and reasonable basis analysis of Dr. Cloer‘s claim; nor did it require the Special Master or Court of Federal Claims to conduct such an analysis. Dr. Cloer asserted a reasonable limitations argument, and absent a determination that her Vaccine Act petition was not brought in good faith or that the claim for which the petition was brought lacked a reasonable basis, she should be eligible to receive an award of reasonable attorneys’ fees and costs incurred in proceedings related to her petition.
The statutory language of the Vaccine Act supports our holding.
The plain language of the statute indicates that Congress chose not to tie the right to attorneys’ fees to compliance with
Other statutory provisions support this interpretation.
[O]ne 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. Denying interim fee awards would clearly make it more difficult for claimants to secure competent counsel because delaying payments decreases the effective value of awards. . . . Interim fees are particularly ap-
propriate in cases where proceedings are protracted and costly experts must be retained.
Id. (emphasis added) (citation omitted); see also H.R. Rep. No. 99-908, at 22 (1986) (“the Committee does not intend . . . to limit petitioners’ ability to obtain qualified assistance and intends . . . that the court exercise its discretion to award fees [resulting from] non-prevailing, good faith claims.“).
The overarching purpose of the Vaccine Act and the National Childhood Vaccine Injury Compensation Program it created is to award compensation “to vaccine-injured persons quickly, easily, and with certainty and generosity.” H.R. Rep. No. 99-908, at 3. Remedial legislation like the Vaccine Act should be construed in a manner that effectuates its underlying spirit and purpose. See Atchison, Topeka, & Santa Fe Ry. Co. v. Buell, 480 U.S. 557, 561-62 (1987). Our interpretation of the statute fulfills congressional intent and the Act‘s legislative purpose. Congress acknowledged that “[l]awsuits and settlement negotiations can take months and even years to complete. Transaction costs – including attorneys’ fees and court payments – are high. And in the end, no recovery may be available. Yet futures have been destroyed and mounting expenses must be met.” H.R. Rep. No. 99-908, at 6. Congress recognized that having to shoulder attorneys’ fees could deter victims of vaccine-related injuries from seeking redress.
Congress did not intend for only prevailing petitioners to receive an award of reasonable attorneys’ fees and costs. To the contrary, compensation on a petition should include “an amount to provide for reasonable attorneys’ fees and other costs incurred in proceedings on the petition. But even where the court does not award compensation on a petition, it may, in its discretion, make such an
The statutory language requiring a reasonable basis for the claim for which the petition was brought is broad enough to encompass the statute of limitations issue as well as the underlying merits of the claim. It is beyond dispute that Congress intended attorneys’ fees to be awarded only in cases brought in good faith and where there was a reasonable basis for the claim underlying the petition, even where the petitioner does not prevail. The good faith and reasonable basis requirements apply to the claim for which the petition was brought; this applies to the entire claim, including timeliness issues. Attorneys’ fees should be denied if on remand, it is determined that the petition was not brought in good faith or there was no reasonable basis for the claim for which the petition was brought.
Finally, Dr. Cloer deserves a determination as to whether she is eligible to receive attorneys’ fees because her appeal inspired a shift in vaccine jurisprudence. Indeed, the government does not dispute the reasonableness of Dr. Cloer‘s underlying claim or allege that it was not brought in good faith, which is generally presumed. The confines of the Vaccine Act make clear that a petitioner need not prevail to receive attorneys’ fees.
The dissent contends that Dr. Cloer is not entitled to attorneys’ fees as a matter of law and creates a rigid rule applicable to requests for attorneys’ fees in vaccine cases where the petitioner‘s claim is rejected solely on limitations grounds. Cloer overruled our precedent treating the statute of limitations as jurisdictional and did not endorse the underlying statutory interpretation of such cases.
The dissent, primarily in footnote one, argues that
The dissent also contends that Dr. Cloer is not entitled to attorneys’ fees because the Vaccine Act requires an evaluation of the reasonableness of the claim for which the petition was brought, which indicates that Congress did not contemplate awarding attorneys’ fees in a case that never reached a merits determination. See Dis. Op. at 4. However, as explained above,
The dissent claims that “the legislative history of the Vaccine Act is silent as to the reason for the Act‘s highly unusual attorney fee provision” and goes on to speculate on Congress‘s motivation for departing from the typical American Rule of fee awards. See Dis. Op. at 5 (“It may well be that Congress concluded . . .“); id. (“Congress could well have concluded . . .“). Such speculation is unnecessary, however, in light of the remedial nature of the Vaccine Act and Congress‘s intent to facilitate awards to injured parties.
The dissent advocates adoption of a strict rule that strips discretion from the court and in so doing disregards the Vaccine Act‘s spirit and purpose. The dissent‘s interpretation would discourage potential Vaccine Act petitioners from pursuing claims and ignores that potential petitioners will likely be reluctant to bring claims under the Vaccine Act for fear of significant financial risk even when strong arguments exist to challenge the applicability of the statute of limitations.
III. CONCLUSION
This Order recognizes that issues relating to the award of attorneys’ fees in connection with challenges brought on limitations grounds will frequently arise in vaccine injury cases. Under Cloer, the Vaccine Act does not incorporate a discovery rule, and the statute of limitations begins to run on “the calendar date of the occurrence of the first medically recognized symptom or manifestation of onset of the [claimed] injury,” subject to the doctrine of equitable tolling. Cloer, 654 F.3d at 1325, 1340, 1344-45. If a discovery rule were adopted, as Dr. Cloer now urges in the Supreme Court, the limitations inquiry
A petitioner who asserts an unsuccessful but non-frivolous limitations claim should be eligible for a determination of whether reasonable attorneys’ fees and costs incurred in proceedings related to his or her petition should be awarded. Therefore, we remand for a determination as to whether Dr. Cloer‘s petition was brought in good faith and whether the claim for which her petition was brought had a reasonable basis.
Accordingly,
IT IS ORDERED THAT:
Dr. Cloer‘s application for reasonable attorneys’ fees and costs be remanded to the Court of Federal Claims. The Court of Federal Claims is directed to make a determination consistent with this Order.
FOR THE COURT
April 11, 2012
Date
/s/ Jan Horbaly
Jan Horbaly
Clerk
MELISSA CLOER, M.D., Petitioner-Appellant, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Respondent-Appellee.
2009-5052
United States Court of Appeals for the Federal Circuit
The question whether a party who has filed an untimely Vaccine Act petition is entitled to an award of attorneys’ fees under section 15(e)(1) of the Act,
1. In Brice v. Secretary of Health & Human Services, 358 F.3d 865, 869 (Fed. Cir. 2004), this court held that the attorneys’ fees provision of the Vaccine Act makes fees available only “in connection with a petition filed under section 300aa-11,” and that a petition dismissed on grounds of untimeliness is not “a petition filed under section 300aa-11,” as required by section 15(e). Similarly, in Martin v. Secretary of Health & Human Services, 62 F.3d 1403, 1406 (Fed. Cir. 1995), the court explained that in order for an attorneys’ fee award to be permitted under section 15(e)(1), “there must first be a judgment ‘on such a petition‘—that is, ‘on a petition filed under section 300aa-11.‘” While this court‘s en banc decision in Cloer v. Secretary of Health & Human Services, 654 F.3d 1322 (Fed. Cir. 2011), overruled Brice and Martin insofar as they were based on lack of subject matter jurisdiction, see id. at 1341 & n.9, the en banc court did not disavow the analysis of the statutory structure in those cases, and that analysis is still sound. In substance, as modified by the en banc decision in Cloer, Brice and Martin stand for the following principles: (1) section 16(a) of the Vaccine Act directs that “no petition may be filed for compensation under the Program“—and thus under section 11—after the expiration of the applicable time period,
Besides the reference to a petition filed under section 11, section 15(e)(1) provides for an award of attorneys’ fees to an unsuccessful petitioner “if the judgment . . . on such a petition does not award compensation.” Although that language, standing alone, could be understood to refer either to a judgment on the merits or to a dismissal for untimeliness, the statutory context indicates that it does not refer to a judgment dismissing the petition for untimeliness. The same language is used in section 21 of the statute, where it clearly refers only to a judgment on the merits. That section provides that if “the judgment did not award compensation,” the petitioner is required to file “an election in writing to accept the judgment or to file a civil action for damages for such injury or death.”
Finally, section 16(c) of the Act reinforces the view that the phrase “a petition filed under section 300aa-11” in section 15(e) refers to a timely petition. Section 16(c) provides that if a petition is filed under section 11, state statutes of limitations shall be stayed for any civil action brought for the vaccine-related injury, beginning on the date the petition is filed and ending on the date that an election is made under section 21 to file the civil action.
The Vaccine Act evolved from a series of bills that were introduced over a three-year period. All of the bills that featured compensation proceedings contained attorney fee provisions, and all of them, until the very end of the legislative process, required the claimant to be a prevailing party in order to be eligible for a fee award. See S. 2117 (Nov. 17, 1983); H.R. 5810 (June 7, 1984); H.R. 1780 (Mar. 27, 1985); S. 827 (Apr. 2, 1985). Several of the early proposals would have allowed claimants to elect to proceed either through the compensation program or by way of a civil tort remedy. The bill that was ultimately enacted, however, required that claimants exhaust their remedies through the Vaccine Act compensation program before filing a tort action. H.R. 5546 (Sept. 18, 1986) (incorporated into S. 1744, which became P.L. 99-660, Title III of which is the Vaccine Act). The proposed exhaustion requirement was controversial and sparked strong opposition from those who did not wish to see any impediments placed in the way of plaintiffs’ ability to pursue traditional civil tort remedies. See Vaccine Injury Compensation: Hearing on H.R. 1780, H.R. 4777, and H.R. 5184 Before the H. Subcomm. on Health and the Env‘t of the H. Comm. on Energy and Commerce 187, 191, 216 (1986) (statements of Jeffrey H. Schwartz, President, Dissatisfied Parents Together).
It may well be that Congress concluded that because it was imposing an additional burden on claimants, it
3. In attempting to discern Congress‘s purpose in drafting the attorney fee provision at issue in this case, it is important to keep in mind some general principles governing fee-shifting statutes. The background rule applied by American courts is the “American rule,” under which each party pays its own fees. See Alyeska Pipeline Serv. Co. v. Wilderness Soc‘y, 421 U.S. 240, 245 (1975). Some statutes permit or direct a departure from that rule, allowing prevailing parties to obtain an award of attorneys’ fees from the losing party under certain circumstances. But it is almost unknown in American practice for a statute to provide that the prevailing party will pay the losing party‘s attorneys’ fees. The Supreme Court put that point succinctly in Ruckelshaus v. Sierra Club, 463 U.S. 680, 683-84 (1983), where it noted (emphasis in original):
Our basic point of reference is the “American Rule,” see Alyeska Pipeline Co. v. Wilderness Society, 421 U.S. 240, 247 (1975), under which even “the prevailing litigant is ordinarily not entitled to collect a reasonable attorneys’ fee from the loser.” It is clear that generations of American judges,
lawyers, and legislators, with this rule as the point of departure would regard it as “quite inappropriate” to award the “loser” an attorney‘s fee from the “prevailing litigant.”
The Supreme Court in Ruckelshaus was able to identify only one federal statute that, as of that time, permitted fee awards to a party whose views were rejected. That statute applied not to litigation, but to the promulgation of rules regarding the regulation of hazardous chemical substances. Ruckelshaus, 463 U.S. at 685 n.7, citing
The statute at issue in this case plainly allows losing parties to obtain a fee award from the prevailing party in some circumstances. But because Congress departed from the governing principles applied in virtually every other federal fee-shifting statute, we should be cautious in interpreting the statutory mandate to extend beyond those cases in which fee-shifting was clearly intended. See Robert C. Herd & Co. v. Krawill Mach. Corp., 359 U.S. 297, 304-05 (1959) (a rule of law “in derogation of the common law . . . must be strictly construed“); In re Crescent City Estates, 588 F.3d 822, 826 (4th Cir. 2009) (“Because fee-shifting statutes are ‘in derogation of the common law,’ courts are obligated to construe them strictly.“).
That is particularly true in light of the practical effect of requiring the government to pay attorneys’ fees to persons who both fail to file a timely petition and then fail in their effort to show that their untimeliness was excused by equitable tolling—which is the only class of persons potentially affected by the resolution of the fee issue before us.
In a case that has gone to judgment on the merits and the petitioner has lost, it is fairly easy for the special master and the court to determine whether the petitioner‘s position on the merits was reasonable. In that setting, the special master and the court will have the entire record of the case before them to enable them to make that determination. It is an entirely different matter for the special master to have to conduct a sort of shadow trial to determine whether, if the claimant had made a timely filing, the petition would have had a reasonable chance of succeeding. Quite apart from the burden on the special masters and the court, the amount of attorney time (and thus the accumulating fees) that would be consumed by such a proceeding would likely exceed the fees expended on the typically much simpler
For these reasons, I respectfully dissent.