Rodriguez Ex Rel. Estate of Rodriguez v. Secretary of Health & Human Services

United States Court of Appeals

for the Federal Circuit

__________________________

GABRIEL G. RODRIGUEZ, AS ADMINISTRATOR OF THE

ESTATE OF

GIAVANNA MARIA RODRIGUEZ FOR THE BENEFIT

OF

GABRIEL GENE RODRIGUEZ AND JENNIFER ANN

RODRIGUEZ,

Petitioners-Appellants,

v.

SECRETARY OF HEALTH AND HUMAN

SERVICES,

Respondent-Appellee.

__________________________

2010-5093

__________________________

Appeal from the United States Court of Federal

Claims in Case No. 06-VV-559, Judge Margaret M.

Sweeney.

___________________________

Decided: February 9, 2011

___________________________

GILBERT GAYNOR, Law Office of Gilbert Gaynor, of

Santa Barbara, California, argued for petitioners-

appellants. With him on the brief was JOHN FRANCIS

MCHUGH, Attorney at Law, of New York, New York.

RODRIGUEZ v. HHS 2

DARRYL R. WISHARD, Trial Attorney, Torts Branch,

Civil Division, United States Department of Justice, of

Washington, DC, argued for respondent-appellee. With

him on the brief were TONY WEST, Assistant Attorney

General, TIMOTHY P. GARREN, Director, MARK W. ROGERS,

Deputy Director, CATHARINE E. REEVES, Assistant Direc-

tor.

SHELIA A. BJORKLUND, Lommen, Abdo, Cole, King &

Stageberg, P.A., of Minneapolis, Minnesota for amicus

curiae Bar Association.

__________________________

Before RADER, Chief Judge, LOURIE, Circuit Judge, and

WHYTE, District Judge. ∗

WHYTE, District Judge.

This case involves a dispute over the reasonable

hourly rate used to calculate attorneys' fees awarded

under the National Childhood Vaccine Injury Act of 1986,

42 U.S.C. §§ 300aa-1 to -43 ("Vaccine Act"), as amended.

Petitioner Gabriel Rodriguez appeals from a decision of

the United States Court of Federal Claims, which af-

firmed the decision by a special master awarding fees

based on evidence of the reasonable hourly rates of Vac-

cine Act practitioners in the forum, rather than accepting

the Laffey Matrix as prima facie evidence of the forum

rate. This appeal followed. We affirm.

∗

The Honorable Ronald M. Whyte, United States

District Court for the Northern District of California,

sitting by designation.

3 RODRIGUEZ v. HHS

BACKGROUND

On July 31, 2006, Gabriel Rodriguez filed a petition

for compensation under the Vaccine Act alleging that his

infant daughter Giavanna Rodriguez had suffered from

encephalopathy and died as result of receiving a vaccina-

tion. The special master conducted an entitlement hear-

ing and ordered respondent Secretary of Health and

Human Services to show cause why she should not find

that Giavanna suffered from an encephalopathy table

injury claim entitling her estate to compensation. See

Walther v. Sec'y of Health & Human Servs., 485 F.3d

1146, 1149 (Fed. Cir. 2007) (describing table injury

claims). As a result, the parties negotiated a settlement

that was memorialized on November 27, 2007.

On February 28, 2008, petitioner filed an initial appli-

cation for an award of attorneys' fees and costs pursuant

to 42 U.S.C. § 300aa-15(e)(1), requesting, among other

things, $65,925 in fees for his attorney, John McHugh, a

solo practitioner in New York City. Petitioner initially

requested that McHugh be compensated at an hourly rate

of $450 but later amended his request to increase

McHugh’s hourly rate to $598 for work performed in May

2006, $614 for work performed between June 2006 and

May 2007, and $645 for work performed after May 2007—

increasing the total requested to $94,642.

The special master directed the parties to file "addi-

tional evidence focused on the negotiated hourly rates for

attorneys of Mr. McHugh's skill, experience, and reputa-

tion; fees paid to attorneys in the Washington, DC area;

and argument to assist in determining the relevant legal

community for purposes to determining the forum rate for

attorneys' fees." After the parties responded to the spe-

cial master's order, petitioner filed a supplemental fee

application, requesting $10,395 in fees incurred for ser-

RODRIGUEZ v. HHS 4

vices of Gilbert Gaynor, a California attorney retained by

McHugh to respond to the special master's July 17, 2008

order, at an hourly rate of $450 for 2008 and $475 for

2009.

The special master rejected petitioner's claim that the

District of Columbia Laffey Matrix, a schedule of rates

maintained by the Department of Justice to compensate

attorneys prevailing in "complex federal litigation," sets a

prima facie forum rate schedule for Vaccine Act attorneys'

fees. Laffey v. Nw. Airlines, Inc., 572 F. Supp. 354 (D.D.C.

1983), aff'd in part, rev'd in part on other grounds, 746

F.2d 4 (D.C. Cir. 1984), overruled by Save Our Cumber-

land Mountains, Inc. v. Hodel, 857 F.2d 1516 (D.C. Cir.

1988) ("We do not intend, by this remand, to diminish the

value of the fee schedule compiled by the District Court in

Laffey. Indeed, we commend its use for the year to which

it applies."). Instead, to determine the forum rate, the

special master analyzed the following evidence: (1) infor-

mation concerning the negotiated hourly rate of the one

Vaccine Act attorney who provides the bulk of his services

within the District of Columbia; (2) an order in another

case directing respondent to show cause why petitioner's

counsel, an experienced tort attorney and senior partner

at a Washington, DC law firm, should not receive fees

based on a $300 hourly rate for work performed between

2001 and 2003; (3) a cost of living index supplied by

petitioner; (4) information about a nationwide sample of

law firm billing rates supplied by petitioner, (5) the Laffey

Matrix and adjusted Laffey Matrix, and (6) rates charged

and received by other attorneys handling Vaccine Act

cases, including those negotiated by small firms in Bos-

ton, Massachusetts and Vienna, Virginia. The special

master reduced the hourly rate requested by petitioner for

McHugh's services to $310 for 2006, $320 for 2007, and

5 RODRIGUEZ v. HHS

$335 for 2009. She also reduced the hourly rate for

Gaynor's services to $270 for 2008 and $275 for 2009.

Petitioner timely sought review in the Court of Fed-

eral Claims. On January 22, 2010, the Court of Federal

Claims issued its decision affirming the decision of the

special master. Petitioner timely filed a notice of appeal.

We have jurisdiction pursuant to 42 U.S.C. § 300aa-12(f).

DISCUSSION

Under the Vaccine Act, this court reviews a decision

of the special master under the same standard as the

Court of Federal Claims and determines if it is "arbitrary,

capricious, an abuse of discretion, or otherwise not in

accordance with law." Avera v. Sec'y of HHS, 515 F.3d

1343, 1347 (Fed. Cir. 2008). "Arbitrary and capricious" is

a highly deferential standard of review: "[i]f the special

master has considered the relevant evidence of record,

drawn plausible inferences and articulated a rational

basis for the decision, reversible error will be extremely

difficult to demonstrate." Hines v. Sec'y of HHS, 940 F.2d

1518, 1528 (Fed. Cir. 1991). "Not in accordance with the

law" refers to the application of the wrong legal standard,

and the application of the law is reviewed de novo. See

Markovich v. Sec'y of HHS, 477 F. 3d 1353, 1356 (Fed.

Cir. 2007).

I

Under the Vaccine Act, a special master who has

awarded a petitioner compensation on a vaccine-related

claim "shall also award as part of such compensation an

amount to cover . . . reasonable attorneys' fees." 42 U.S.C.

§ 300aa-15(e)(1). We have endorsed the use of the lode-

star approach to determine what constitutes "reasonable

RODRIGUEZ v. HHS 6

attorneys' fees" under the Vaccine Act, which requires

that the court make an initial estimate of reasonable fees

by "multiplying the number of hours reasonably expended

on the litigation times a reasonable hourly rate," and then

adjust the product upward or downward based on other

specific findings. Blum v. Stenson, 465 U.S. 886, 888

(1984).

In Avera v. Sec'y of HHS, 515 F.3d 1343 (Fed. Cir.

2008), we held that attorneys' fees under the Vaccine Act

should in general be determined using the forum rate for

the District of Columbia in the lodestar calculation,

rather than the rate in the geographic area of the practice

of petitioner's attorney. Id. at 1349. In Avera, we went

on to apply a limited exception to the forum rule where

the bulk of the attorney's work is done outside the forum

jurisdiction, and where there is a very significant differ-

ence in the compensation rate between the place where

the work was done and the forum. Id. at 1349-1350

(citing Davis County Solid Waste Mgmt. & Energy Recov-

ery Special Serv. Dist. v. U.S. Envtl. Prot. Agency, 169 F.

3d 755 (D.C. Cir. 1999)). We, therefore, expressly did not

reach the question of "whether the so-called Laffey Matrix

should play any role in the determination of fees under

the Vaccine Act in those cases where forum rates are

utilized." Id. at 1350.

The issue presented in this appeal is whether the rea-

sonable hourly rate for attorneys handling Vaccine Act

cases in the District of Columbia should be determined by

applying the Laffey Matrix, or whether the rate should be

determined by considering a variety of factors, which may

or may not include the Laffey Matrix.

Petitioner sought attorneys' fees based on the Laffey

Matrix or Adjusted Laffey Matrix. Both the Laffey Matrix

7 RODRIGUEZ v. HHS

and the Adjusted Laffey Matrix are prepared by the U.S.

Attorney's Office for the District of Columbia and include

a chart of hourly rates for attorneys based on the number

of years in practice. Petitioner contends that the Laffey

Matrix or Adjusted Laffey Matrix provided prima facie

evidence of the forum rate for Vaccine Act cases, that the

special master incorrectly distinguished the litigation to

which the matrices have been applied from Vaccine Act

litigation, and that the special master improperly distin-

guished the Vaccine Act from other fee-shifting statutes.

He further argues that there are strong policy rationales

for using the Laffey and Adjusted Laffey matrices.

In Laffey, the District Court for the District of Colum-

bia approved a schedule of "the prevailing rates in the

community for lawyers of comparable skill, expertise and

reputation in complex federal litigation." 572 F. Supp. at

371-75. The court explained that the Title VII employ-

ment discrimination case brought on behalf of 3,300 flight

attendants was "an extraordinary undertaking in many

respects, consuming thirteen years and thousands of

personnel hours and raising numerous issues under both

[federal employment discrimination] statutes." Id. at 359.

Plaintiffs' counsel brought the case at an early stage in

the development of the law under Title VII and the Equal

Pay Act, and they had to conduct extensive investigation

and discovery against a large, well-financed corporate

defendant with a history of vigorously litigating cases

brought against it, all at a time when there were few legal

precedents and the relevant legal standards were largely

unsettled and uncertain. Id. at 378-79.

As the special master found, Vaccine Act litigation,

while potentially involving complicated medical issues

and requiring highly skilled counsel, is not analogous to

"complex federal litigation" as described in Laffey so as to

RODRIGUEZ v. HHS 8

justify use of the Matrix instead of considering the rates

charged by skilled Vaccine Act practitioners. The Vaccine

Act provides petitioners with an alternative to the tradi-

tional civil forum, applies relaxed legal standards of

causation, and has eased procedural rules compared to

other federal civil litigation. Vaccine Act proceedings,

which involve no discovery disputes, do not apply the

rules of evidence, and are tried in informal, streamlined

proceedings before special masters well-versed in the

issues commonly repeated in Vaccine Act cases, are

different from the complex type of litigation the Laffey

Matrix is designed to compensate. While some cases

under the Vaccine Act may present special challenges,

those difficulties are reflected and compensated in the

other half of the lodestar calculation--the reasonable

number of hours expended.

In addition, unlike the fee-shifting statues to which

the Laffey Matrix has been applied, a party need not

"prevail" under the Vaccine Act in order to receive an

award of attorneys' fees. In other words, 42 U.S.C. §

300aa-15(e)(1) does not require that a claimant prevail on

the merits in order to secure fees. Instead, section 300aa-

15(e)(1) allows for an award as long as the claim was

brought "in good faith" and with "a reasonable basis."

The Supreme Court has held that enhancement of a

calculated lodestar award based on contingency risk is not

permitted under prevailing-party fee-shifting statutes.

City of Burlingame v. Dague, 505 U.S. 557, 567 (1992).

But the Court noted:

[A]n enhancement for contingency would likely

duplicate in substantial part factors already sub-

sumed in the lodestar. The risk of loss in a par-

ticular case (and, therefore, the attorney's

contingent risk) is the product of two factors: (1)

9 RODRIGUEZ v. HHS

the legal and factual merits of the claim, and (2)

the difficulty of establishing those merits. The

second factor, however, is ordinarily reflected in

the lodestar-either in the higher number of hours

expended to overcome the difficulty, or in the

higher hourly rate of the attorney skilled and ex-

perienced enough to do so. . . . Taking account of it

again through lodestar enhancement amounts to

double counting."

Id. at 562-63.

Under Dague, in determining a reasonable rate to be

used in the lodestar calculation, it is appropriate to take

account of the fact that Vaccine Act attorneys are practi-

cally assured of compensation in every case, regardless of

whether they win or lose and of the skill with which they

have presented their clients' cases. If this were not true,

Vaccine Act attorneys would be more favorably compen-

sated than attorneys who take cases under fee-shifting

statutes and are only paid by the opposing side if their

clients' claims are meritorious and they skillfully prose-

cute those claims. The attorneys' fees provisions of the

Vaccine Act "were not designed as a form of economic

relief to improve the financial lot of lawyers." Id. at 563

(quoting Pennsylvania v. Del. Valley Citizens' Council for

Clean Air, 478 U.S. 546, 565 (1986)).

The special master did not apply an incorrect legal

standard nor was her rejection of the limited evidence

petitioner filed arbitrary, capricious, or an abuse of dis-

cretion. The special master considered appropriate evi-

dence, including the Laffey Matrix, and fully explained

the basis for determining the fee rates for petitioner's

attorneys.

AFFIRMED