Shaw v. Secretary of Health & Human Services , 93 Fed. Cl. 1372 ( 2010 )

United States Court of Appeals
for the Federal Circuit
__________________________
MICHAEL STEPHEN SHAW,
Petitioner-Appellant,
v.
SECRETARY OF HEALTH AND HUMAN
SERVICES,
Respondent-Appellee.
__________________________
2009-5117
__________________________
Appeal from the United States Court of Federal
Claims in 01-VV-707, Judge Mary Ellen Coster Williams.
___________________________
Decided: June 24, 2010
___________________________
KEVIN P. CONWAY, Conway, Homer & Chin-Caplan,
P.C., of Boston, Massachusetts, argued for petitioner-
appellant. On the brief was RONALD C. HOMER.
DARRYL R. WISHARD, Trial Attorney, Torts Branch,
Civil Division, United States Department of Justice, of
Washington, DC, argued for respondent-appellee. On the
brief were TONY WEST, Assistant Attorney General,
TIMOTHY P. GARREN, Director, MARK W. ROGERS, Deputy
Director, and CATHARINE E. REEVES, Assistant Director.
SHAW v. HHS 2
__________________________
Before MOORE and PLAGER, Circuit Judges. ∗
MOORE, Circuit Judge.
Mr. Michael Shaw applied for interim attorneys’ fees
and costs while pursuing a cause of action for compensa-
tion under the Vaccine Act, 42 U.S.C. § 300aa-1 et seq.
The Special Master awarded Mr. Shaw the undisputed
portion of his request and deferred consideration of the
remaining fees and costs until the submission of a final
petition for fees and costs. Shaw v. Sec’y of HHS, No. 01-
707, 2009 WL 1010058, at *3 (Fed. Cl. Mar. 27, 2009).
Mr. Shaw sought review in the United States Court of
Federal Claims, and that court dismissed, concluding that
it lacked jurisdiction to review an interim fee award. For
the reasons discussed below, we reverse.
BACKGROUND
Mr. Shaw petitioned for compensation under the Vac-
cine Act, asserting that he suffered an inflammatory
polyneuropathy as a result of the Hepatitis B vaccine.
Although Mr. Shaw filed his petition in 2001, his case was
stayed pending an omnibus proceeding involving numer-
ous Hepatitis B cases. The stay was lifted in 2006, at
which point the parties filed “a substantial volume of
medical records.” Shaw v. Sec’y of HHS, 88 Fed. Cl. 463,
463 (2009). On March 12, 2008, the Special Master
conducted an entitlement hearing. The Special Master
heard testimony from three witnesses, including Dr.
∗
Paul R. Michel, who retired from the position of
Chief Judge on May 31, 2010, did not participate in this
decision.
3 SHAW v. HHS
Sherri Tenpenny, whom Mr. Shaw had retained as an
expert.
After the entitlement hearing, but before the Special
Master rendered a decision on the merits, Mr. Shaw filed
an Application for Interim Fees and Costs, seeking
$142,778.50 for attorneys’ fees and $32,311.45 in costs.
Shaw, 2009 WL 1010058, at *1. The government chal-
lenged many of Mr. Shaw’s requests as “outrageously
excessive and unreasonable.” Id. at *2. The Special
Master awarded Mr. Shaw the undisputed portion of his
request, which amounted to $12,632.59, about 7% of the
total amount requested. Id. at *3. The Special Master
deferred consideration of the disputed fees and costs
“until a final petition for fees and costs is submitted.” Id.
Mr. Shaw moved for reconsideration of the decision.
The Special Master denied the motion, explaining that
she was preparing a ruling on entitlement and that the
reasonableness of certain requests would be best consid-
ered in connection with her evaluation of the merits of the
case. Specifically, the Special Master explained that a
“significant issue in the entitlement ruling is whether Dr.
Tenpenney, as an osteopathic doctor and one of peti-
tioner’s many treating physicians, was qualified to opine
on the cause of petitioner’s neurologic injury.” Shaw, No.
01-707V, D.I. 93, *2 (Fed. Cl. May 1, 2009). The Special
Master stated that “[t]he transcript of the entitlement
hearing and the interim fee petition reflect many hours of
research by Dr. Tenpenney in preparing an opinion letter
in this case.” Id. The Special Master concluded that
“[t]he reasonableness of Dr. Tenpenney’s extensive re-
search is best considered in connection with the under-
signed’s evaluation of the petitioner’s entitlement claim.”
Id. at *2-3.
SHAW v. HHS 4
Mr. Shaw petitioned for review of the Special Master’s
decision. The Court of Federal Claims concluded that it
lacked jurisdiction to review an interim decision on attor-
neys’ fees and costs. Shaw, 88 Fed. Cl. 463. The court
reasoned that under 42 U.S.C. § 300aa-12, it only had
jurisdiction to review a “final decision” of the Special
Master. Shaw, 88 Fed. Cl. at 465. The court stated that
“[b]oth the Federal Circuit and the Court of Federal
Claims have interpreted Section 12(e)(3) to mean that
only a ‘final decision’ by the Special Master—a decision
that resolves the ultimate issues in the case—is appropri-
ate for review by this court.” Id. Because there was no
final decision on the underlying merits of the petition, the
court concluded it did not have jurisdiction to review the
Special Master’s decision on attorneys’ fees. Id. There-
fore, the Court of Federal Claims dismissed the petition
for lack of jurisdiction. Mr. Shaw appeals. We have
jurisdiction under 42 U.S.C. §§ 300aa-12(f).
DISCUSSION
We review de novo a decision by the Court of Federal
Claims concerning its jurisdiction to review a decision of
the Special Master. Widdoss v. Sec’y of HHS, 989 F.2d
1170, 1174 (Fed. Cir. 2003).
On appeal, Mr. Shaw argues that the plain language
of the Vaccine Act establishes jurisdiction. Specifically,
Mr. Shaw cites 42 U.S.C. § 300aa-12(e), which provides
the Court of Federal Claims with jurisdiction to review
“decisions” by special masters. Mr. Shaw asserts that it
would be improper to read the word “final” into the stat-
ute. Moreover, Mr. Shaw argues that holding that in-
terim fee denials are not reviewable would effectively
eliminate the right to interim fees recognized by this
court in Avera v. Secretary of the Department of Health
5 SHAW v. HHS
Human Services, 515 F.3d 1343, 1352-53 (Fed. Cir. 2008).
Finally, Mr. Shaw asserts that Vaccine Rule 13 expressly
provides for review of interim fee awards and thus estab-
lishes jurisdiction. See Vaccine Rules of the United States
Court of Federal Claims, app. B, R. 13(b) (as amended
July 13, 2009) (Vaccine Rules).
The government asserts that the Vaccine Act only
provides jurisdiction to review final decisions and that a
decision on interim fees is not final and appealable. The
government argues that this lack of review does not
render Avera meaningless because special masters will
continue to award interim fees, regardless of whether
interim decisions are appealable. The government fur-
ther argues that allowing appeals of interim fee awards
would impede the goal of efficient resolution of claims.
Finally, it asserts that Vaccine Rule 13 cannot create
jurisdiction where none otherwise exists.
In Avera, we held that the Vaccine Act permits the
award of interim fees and costs, rejecting the govern-
ment’s argument that a fee award is only permissible
after judgment under § 300aa-15. Avera, 515 F.3d at
1350-51. As this court explained, there is even more
reason to award interim fees in vaccine cases because
there is no prevailing party requirement. Id. at 1352.
“[T]he Vaccine Act merely requires parties who do not
prevail to show that their claim was brought ‘in good
faith’ and ‘with a reasonable basis.’” Id. (quoting 42
U.S.C. § 300aa-15(e)(1)). We further explained:
A special master can often determine at an early
stage of the proceedings whether a claim was
brought in good faith and with a reasonable basis.
Moreover, as we noted in Saunders, one of the un-
derlying purposes of the Vaccine Act was to en-
SHAW v. HHS 6
sure that vaccine injury claimants have readily
available a competent bar to prosecute their
claims. 25 F.3d at 1035. Denying interim fee
awards would clearly make it more difficult for
claimants to secure competent counsel because de-
laying fee payments decreases the effective value
of awards. . . . Interim fees are particularly ap-
propriate in cases where proceedings are pro-
tracted and costly experts must be retained.
Id. at 1352. Where the claimant establishes that the cost
of litigation has imposed an undue hardship and that
there exists a good faith basis for the claim, it is proper
for the special master to award interim attorneys’ fees.
For purposes of jurisdiction under 42 U.S.C. § 300aa-
12, a decision on attorneys’ fees and costs is a decision on
compensation. Subsection 12(d)(3)(A) provides the Court
of Federal Claims with jurisdiction to review decisions
under the Vaccine Act. 42 U.S.C. § 300aa-12(d)(3)(A).
Specifically, this subsection provides that “[a] special
master to whom a petition has been assigned shall issue a
decision on such petition with respect to whether compen-
sation is to be provided under the Program and the
amount of such compensation,” and it further provides
that “[t]he decision of the special master may be reviewed
by the United States Court of Federal Claims in accor-
dance with subsection (e) of this section.” Id. Thus, the
Court of Federal Claims has jurisdiction to review a
decision by the special master concerning compensation.
The Vaccine Act indicates that compensation includes
attorneys’ fees and costs:
7 SHAW v. HHS
In awarding compensation on a petition filed un-
der section 300aa-11 of this title the special mas-
ter 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 Fed-
eral Claims on such a petition does not award
compensation, the special master or court may
award an amount of compensation to cover peti-
tioner’s reasonable attorneys’ fees and other costs
incurred in any proceeding on such petition if the
special master or court determines that the peti-
tion was brought in good faith and there was a
reasonable basis for the claim for which the peti-
tion was brought.
42 U.S.C. § 300aa-15(e)(1). Thus, the Vaccine Act uses
the term compensation to refer both to compensatory
damages (such as payment for injury) and attorneys’ fees
and costs. See Saunders v. Sec’y of HHS, 25 F.3d 1031,
1034-35 (Fed. Cir. 1994) (noting the dual use of the term
“compensation” in the Vaccine Act and determining that
42 U.S.C. § 300aa-15(f) prohibits the payment of compen-
satory damages when the petitioner declines to accept the
judgment, but it allows the payment of attorneys’ fees).
Consistent with this interpretation, this court and the
Court of Federal Claims have recognized their jurisdiction
to review a decision on fees, independent from a decision
on the merits, where the decision on fees issued along
with or after a decision on the merits. See, e.g., Avera,
SHAW v. HHS 8
515 F.3d 1343; Rodriguez v. Sec’y of HHS, 91 Fed. Cl. 453(2010); Doe v. Sec’y of HHS, 89 Fed. Cl. 661 (2009).
The sole question on appeal is whether the Court of
Federal Claims has jurisdiction to review an interim fee
decision prior to the decision on the merits of the underly-
ing claim. We conclude that it does. The government
asserts that we previously interpreted § 300aa-12(e) to
“apply only to ‘final’ decisions of the special master that
conclude the proceeding,” citing Widdoss, 989 F.2d at
1175. Gov’t Br. at 4, 12. On the contrary, we have never
interpreted § 300aa-12(e)(3) to require a final decision
concluding the proceedings or resolving the ultimate issue
in the case. In Widdoss, we concluded that the 30-day
time period in which to file for review in 42 U.S.C.
§ 300aa-12(e) was jurisdictional in nature. 989 F.2d at
1175, 1177. We further concluded that the clock began to
run on the date that the special master issued its deci-
sion, rather than on the date that a 14-day temporary
suspension of the proceeding ended. Id. We did not
restrict jurisdiction to decisions resolving the ultimate
issues of the case.
The Special Master’s grant or denial of interim attor-
neys’ fees is a decision on compensation and as such it is
reviewable by the Court of Federal Claims under § 12(e).
Moreover, the Special Master’s decision on interim attor-
neys’ fees is a final decision on the issue of interim fees.
There will be no subsequent decision on “interim fees.”
And if the interim fee denial cannot be reviewed until
after a decision on the merits, it is no longer an interim
fee. Foreclosing review of a denial of interim fees is
tantamount to a denial of such fees.
The Special Master’s interim fee decision in this case
indicates: “in the absence of a motion for review filed
9 SHAW v. HHS
under Appendix B of the Rules of the United States Court
of Federal Claims, the Clerk of the Court shall enter
judgment in petitioner’s favor for $12,632.59 in interim
attorney’s fees, attorney’s costs, and petitioner’s costs.” If
motion for review of the interim decision had not been
filed within 30 days, judgment would have been entered
in the amount of $12,632.59 for petitioners, and review
would no longer exist under § 12(e) at the Court of Fed-
eral Claims for the judgment. It would seem strange
indeed to conclude that the government had to seek
review of a grant of interim fees in the Court of Federal
Claims within 30 days of the decision of the Special
Master, but claimants could not seek review for denials
until after the decision on the merits.
Consistent with our holding today, the Vaccine Rules
recognize that a decision on interim fees constitutes a
separate and appealable decision. The Vaccine Rules are
adopted by the Court of Federal Claims and “govern all
proceedings before the United States Court of Federal
Claims pursuant to the National Childhood Vaccine
Injury Act, as amended, 42 U.S.C. §§ 300aa-1 to -34
(Vaccine Act).” Vaccine Rules, app. B, R. 1(a) (as revised
and reissued May 1, 2002, and as amended July 13, 2009).
The government is certainly correct that the Court of
Federal Claims’ Vaccine Rules cannot create jurisdiction
where none exists. However, Vaccine Rule 13(b), which
was amended following our decision in Avera, recognizes
that “[t]he decision of the special master on the fee re-
quest—including a request for interim fees—constitutes a
separate decision for purposes of the Vaccine Rules 11, 18,
and 23.” Rule 23 explains that “[t]o obtain review of the
special master’s decision, a party must file a motion for
review with the clerk within 30 days after the date the
decision is filed.” Our treatment of the interim fee deci-
sion as reviewable seems at least consistent with these
SHAW v. HHS 10
Vaccine Rules acknowledging that the interim fee decision
is a separate decision for which review must be sought
within 30 days of the decision. In fact, these rules could
be interpreted as foreclosing review of the “separate
decision” on interim fees if it is not sought within 30 days
after the decision is filed.
In concluding that it lacked jurisdiction, the Court of
Federal Claims referred to “numerous appellate decisions
holding that a tribunal’s decision on interim attorney’s
fees is not ‘final’ or appealable except under very limited
circumstances not present here.” Shaw, 88 Fed. Cl. at
465. However, the cases cited by the court involved
causes of action in which only the prevailing party may
receive attorneys’ fees. See In re Diet Drugs Prods. Liab.
Litig., 401 F.3d 143 (3d Cir. 2004) (interim fee award in
products liability action); Nosik v. Singe, 40 F.3d 592 (2d
Cir. 1994) (attorneys’ fees governed by 42 U.S.C. § 1988);
Rosenfeld v. United States, 859 F.2d 717 (9th Cir. 1988)
(attorneys’ fees governed by 5 U.S.C. § 552(a)(4)(e)); Ruiz
v. Estelle, 609 F.2d 118 (5th Cir. 1980) (attorneys’ fees
governed by 42 U.S.C. § 1988). 1 In these cases, the
party’s ultimate entitlement to fees was tied to the out-
come of the case. 2 In contrast, under the Vaccine Act,
1 The court also cited Banks v. Office of the Senate
Sergeant-at-Arms and Doorkeeper of the United States
Senate, 471 F.3d 1341 (D.C. Cir. 2006), in which the court
awarded fees as a discovery sanction under Federal Rule
of Civil Procedure 37.
2 Notably, in all but one of the cases cited by the
court, the lower court awarded attorneys’ fees to the
plaintiff prior to deciding the merits of the case. Banks,
471 F.3d at 1342; In re Diet Drugs, 401 F.3d at 145;
Rosenfeld, 859 F.2d at 719; Ruiz, 609 F.2d 118. Only one
case involved the denial of a request for interim fees. In
that case, the court determined that the plaintiff “failed to
pose a serious question on the merits of her claim for a
11 SHAW v. HHS
there is no prevailing party requirement. A petitioner for
compensation under the Vaccine Act is entitled to attor-
neys’ fees as long as he or she brings the action in good
faith and with a reasonable basis, regardless of the ulti-
mate outcome of the case. 42 U.S.C. § 300aa-15(e)(1). “A
special master can often determine at an early stage of
the proceedings whether a claim was brought in good
faith and with a reasonable basis.” Avera, 515 F.3d at
1352. We note, however, that “[t]he determination of the
amount of reasonable attorneys’ fees is within the special
master’s discretion.” Saxton v. Sec’y of HHS, 3 F.3d 1517,
1520 (Fed. Cir. 1993). The special master may determine
that she cannot assess the reasonableness of certain fee
requests prior to considering the merits of the vaccine
injury claim. We determine today only that the Court of
Federal Claims has jurisdiction to review the merits of
the interim fee decision. We leave to the Court of Federal
Claims in the first instance the determination of whether
the special master abused her discretion in deferring the
decision on the disputed fees in this case.
The government argues that appellate review of in-
terim fee awards is “wholly inconsistent with the legisla-
tive intent of resolving Vaccine Act petitions quickly and
efficiently.” Gov’t Br. 17-18. The government explains
that “time consuming appeals from interim fee decisions
would only add to the delay already caused by the special
master’s initial resolution of the request for interim fees.”
Id. at 18. The government’s argument seems to be more
of an attack on the availability of interim fees than their
reviewability. The Court of Federal Claims’ review of an
interim fee award in no way delays the Special Master’s
resolution of the merits of the Vaccine Act claim. There
permanent injunction, let alone that she will likely pre-
vail on that claim.” Nosik, 40 F.3d at 596.
SHAW v. HHS 12
would be no stay of the merits pending review of the
interim fee decision.
The government acknowledges that interim fees and
costs amounting to more than $5,750,000 have been
awarded in at least 30 cases since Avera was decided in
2008. Id. at 21. The government argues that there is no
need for review because substantial interim fees are being
awarded even in the absence of immediate review of those
awards. Id. at 22. We do not agree. Because this court
has not yet ruled on whether there exists jurisdiction to
review interim fees, we cannot know the impact review, or
lack thereof, would have on interim fee decisions. More-
over, the magnitude and frequency of the awards actually
support the notion that review ought to exist. Review
would, of course, exist for both parties. The government
could seek review of the grant of an award which it be-
lieves was improper in much the same way a claimant
could seek review of a denial.
Here, the Special Master awarded Mr. Shaw the un-
disputed portion of his request for attorneys’ fees and
costs and deferred consideration of the disputed portion of
his request. Deferring consideration of attorneys’ fees
and costs until a decision on the merits is effectively a
denial of interim fees. We agree with Mr. Shaw that if
interim fee awards are not independently reviewable, our
holding in Avera, 515 F.3d 1343, would be rendered
meaningless. We conclude that 42 U.S.C. § 12(e) confers
jurisdiction on the Court of Federal Claims to review
interim attorney fee decisions. An interim attorney fee
decision is a separate decision on compensation and as
such is reviewable even when that decision issues prior to
a decision on the merits.
13 SHAW v. HHS
CONCLUSION
For the foregoing reasons, we reverse.
REVERSED