Beck by Beck v. Secretary of Dept. of Health and Human Services

• Decision Date: 29 January 1991
• Docket Number: No. 90-5082,90-5082
• Citation: 924 F.2d 1029
• Parties: Amanda BECK, a minor, by her father, Henry J. BECK, Petitioner-Appellant, v. SECRETARY OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES, Respondent-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1029

924 F.2d 1029

Amanda BECK, a minor, by her father, Henry J. BECK Petitioner-Appellant, v. SECRETARY OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES Respondent-Appellee.

No. 90-5082.

United States Court of Appeals Federal Circuit.

Jan. 29, 1991.

Norman J. Lerum, Carponelli, Krug & Lerum, Chicago, Ill., argued, for petitioner-appellant. With him on the brief was Stephen P. Carponelli, Carponelli & Krug, Chicago, Ill.

Thomas M. Bondy, Dept. of Justice, Washington, D.C., argued, for respondent-appellee. With him on the brief were Stuart M. Gerson, Asst. Atty. Gen. and Barbara C. Biddle.

Before MARKEY, MICHEL, and LOURIE, Circuit Judges.

MICHEL, Circuit Judge.

Amanda Beck appeals from the March 8, 1990 Order of the United States Claims Court denying her counsel's request for an award of costs he advanced in earlier district court litigation in this suit under the National Childhood Vaccine Injury Act, 42 U.S.C.A. Secs. 300aa-1 through 300aa-34 (West Supp.1990), denying approval of the agreement to pay part of his fees and costs from the compensation awarded to her, denying an attorney fees award under the Equal Access to Justice Act (EAJA), 28 U.S.C. Sec. 2412(d) (1988), and denying attorney fees as sanctions under Rule 11 of the Rules of the United States Claims Court (RUSCC). Beck v. Secretary of the Dep't of Health and Human Servs., No. 88-51V (Cl.Ct. March 8, 1990). Because the Claims Court correctly interpreted and applied the attorney fees provisions of the Vaccine Act and the EAJA, did not err in refusing to approve the fee agreement, and did not abuse its discretion in denying sanctions under RUSCC 11, we affirm the order appealed from.

BACKGROUND

Amanda Beck was born December 18, 1978, in Honolulu, Hawaii, where her parents, Gail and Henry Beck, were serving on active duty in the U.S. Navy. Amanda was a healthy baby at birth and showed normal growth and development during her first six weeks. On January 26, 1979, Amanda's parents took her to the Tripler Army Medical Center for a routine checkup, in the course of which she was given a diphtheria-pertussis-tetanus (DPT) inoculation. Following this injection, Amanda began to show signs of illness--fever, lethargy, and seizures. She was given a second DPT shot on April 20, 1979, after which the seizures became more frequent. After a series of visits to various military medical facilities, she was diagnosed as probably suffering from pertussis encephalopathy, characterized by permanent severe brain damage. Amanda's mental development virtually ceased, such that by March 1981, when she was over two years old, she was described as having a developmental level less than that of a one year old child.

Amanda Beck today remains profoundly retarded. She requires constant care and attention, ongoing medical monitoring, physical and speech therapy, and will probably be required to wear diapers for the rest of her life.

In 1985, Henry Beck, on behalf of himself and Amanda, filed a lawsuit against the United States under the Federal Tort Claims Act, 28 U.S.C. Secs. 2671-2680 (1982), alleging malpractice by the military medical personnel who administered the DPT vaccine. Beck v. United States, No. 86 C 10134, 1987 WL 17154 (N.D.Ill. Sept. 11, 1987) (reinstating case). The Becks had the civil action dismissed on November 14, 1988 in order to file a petition in the United States Claims Court for compensation under the National Vaccine Injury Compensation Program (the "Vaccine Program"), which was established pursuant to the National Childhood Vaccine Injury Act of 1986 (the "Vaccine Act"), Pub.L. No. 99-660, title III, 100 Stat. 3755 (codified as amended at 42 U.S.C.A. Secs. 300aa-1 through 300aa-34 (West Supp.1990)). The Vaccine Program, which took effect October 1, 1988, provides a no-fault compensation scheme for certain persons who die or are injured in connection with the administration of a vaccine. After an initial decision by a special master on Beck's petition, as required in Vaccine Act proceedings, 42 U.S.C.A. Sec. 300aa-12(d), the Claims Court reviewed and largely adopted the special master's report, and awarded Beck $1,276,017 in compensation and $30,000 for attorney fees and costs. Beck v. Secretary of the Dep't of Health and Human Servs., No. 88-51V (Cl.Ct. Dec. 7, 1989).

Beck moved for an additional award of attorney fees and costs under the Vaccine Act, or alternatively, under the EAJA, and for approval of the agreement to pay attorney fees and costs exceeding the $30,000 fee award out of the $1.2 million compensation award. The special master issued a Supplemental Report on January 16, 1990, ruling that while no additional fees were recoverable under the EAJA, the Vaccine Act's $30,000 cap applies only to attorney fees, per se, so that additional expenses, characterized as "advanced costs," could and would be awarded. Noting that the Claims Court would lack jurisdiction to enforce a ruling on the propriety of a fee agreement between the Becks and their lawyer, the special master declined to approve or disapprove the agreement, on the ground that such a ruling would merely be an advisory opinion.

The Claims Court adopted the special master's report in part, declining to award additional attorney fees under the EAJA, and rejected the report in part, holding that advanced costs are included in the $30,000 cap so that no additional award could be made under the Vaccine Act, and explicitly denying the request for approval of the fee agreement between the Beck family and their counsel. Beck v. Secretary of the Dep't of Health and Human Servs., No. 88-51V, slip op. at 8 (Cl.Ct. March 8, 1990). The court also denied Beck's motion, made after the issuance of the special master's report, requesting sanctions under RUSCC 11. Id.

We have exclusive jurisdiction to hear Beck's appeal pursuant to 28 U.S.C. Sec. 1295(a)(3) (1988).

DISCUSSION

This appeal presents five distinct issues, which will be addressed in the following order: 1) whether the Vaccine Act's prohibition on counsel's seeking payment in excess of the $30,000 cap on attorney fees includes "advanced costs" as well as fees; 2) whether the Act prohibits counsel's seeking payment, from the compensation award, of attorney fees and costs associated with the prior civil action; 3) whether the Claims Court has jurisdiction to disapprove a private fee agreement between a petitioner and the attorney providing for the payment of additional attorney fees and costs beyond the statutory cap from the victim's compensation award; 4) whether the EAJA can be used to award such additional attorney fees in such cases; and 5) whether the Claims Court abused its discretion in denying Rule 11 sanctions in this case.

I

In addition to awarding compensation, the Vaccine Act provides for awards of attorney fees in "retrospective" cases (where the vaccine was administered prior to the October 1, 1988 effective date of the Vaccine Program), up to a limit of $30,000:

(b) Vaccines administered before effective date

Compensation awarded under the Program ... may also include an amount not to exceed a combined total of $30,000, for--

(1) lost earnings ...,

(2) pain and suffering ..., and

(3) reasonable attorneys' fees and costs (as provided in subsection (e) of this section).

42 U.S.C.A. Sec. 300aa-15(b) (West Supp.1990). Subsection (e) in turn details what is included in the "reasonable attorneys' fees and costs" and limits attempts to collect additional amounts:

(e) Attorneys' fees

(1) In awarding compensation on a petition filed under [42 U.S.C.A. Sec. 300aa-11] 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....

(2) If the petitioner, before the effective date of this subpart, filed a civil action for damages for any vaccine-related injury or death for which compensation may be awarded under the Program, and petitioned ... to have such action dismissed and to file a petition for compensation under the Program, in awarding compensation on such petition the special master or court may include an amount limited to the costs and expenses incurred by the petitioner and the attorney of the petitioner before the effective date of this subpart in preparing, filing, and prosecuting such civil action (including the reasonable value of the attorney's time if the civil action was filed under contingency fee arrangements).

(3) No attorney may charge any fee for services in connection with a petition filed under [42 U.S.C.A. Sec. 300aa-11] which is in addition to any amount awarded as compensation by the special master or court under paragraph (1).

42 U.S.C.A. Sec. 300aa-15(e) (West Supp.1990). The Vaccine Act thus puts a combined limit of $30,000 on the amount awarded for lost earnings, pain and suffering, and "reasonable attorneys' fees and costs." Therefore, in a case such as this one, where no award for lost earnings or pain and suffering was made, the attorney fees award is limited to $30,000. Moreover, the Act expressly forbids an attorney from charging his or her client any "fee for services" in connection with the Vaccine Act proceedings in addition to that awarded under the Act. But Beck's counsel draws a distinction between "fees" and "costs," and argues that the prohibition in section 15(e)(3) on collecting "fees for services" does not prevent him from charging and collecting additional money for "advanced costs" in connection with the Vaccine Act proceedings.

The interpretation of section 15(e) urged by Beck's counsel is at least superficially plausible. At first glance, "attorneys' fees" could reasonably be understood to mean hourly charges for a lawyer's services, while "costs" might refer to the out-of-pocket expenses incident to litigation--filing fees, expert witness reimbursement, travel, etc. But a careful reading of the complete text of subsect...