Hall v. Secretary of Health and Human Services

United States Court of Appeals

for the Federal Circuit

__________________________

ESTHER HALL,

Petitioner-Appellant,

v.

SECRETARY OF HEALTH AND HUMAN

SERVICES,

Respondent-Appellee.

__________________________

2010-5126

__________________________

Appeal from the United States Court of Federal

Claims in case no.02-VV-1052, Judge Lynn J. Bush.

__________________________

Decided: April 1, 2011

__________________________

RICHARD GAGE, Richard Gage, P.C., Cheyenne, Wyo-

ming, argued for petitioner-appellant.

ANN D. MARTIN, Trial Attorney, Torts Branch, Civil

Division, United States Department of Justice, of Wash-

ington, DC, argued for respondent-appellee. With her on

the brief were TONY WEST, Assistant Attorney General,

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

Director, and CATHARINE E. REEVES, Assistant Director.

__________________________

HALL v. HHS 2

Before BRYSON, GAJARSA, and MOORE, Circuit Judges.

GAJARSA, Circuit Judge.

Esther Hall appeals from a final decision from the

United States Court of Federal Claims (“Claims Court”),

which affirmed the special master’s award of attorneys’

fees under 42 U.S.C. § 300aa-15 of the National Childhood

Vaccine Injury Act of 1986 (“Vaccine Act”). The issue

before us is whether the special master erred in awarding

attorneys’ fees at the local hourly rate instead of the

forum hourly rate. For the reasons discussed below, we

hold that the special master properly awarded attorneys’

fees at the local hourly rate, and we affirm the Claims

Court’s decision.

BACKGROUND

Hall was awarded compensation under the Vaccine

Act for an injury to her shoulder caused by a hepatitis B

vaccination. Hall v. Sec’y of Health & Human Servs., 93

Fed. Cl. 239, 241 (2010) (“CFC Op.”). The Vaccine Act

“established a Federal ‘no-fault’ compensation program

under which awards can be made to vaccine-injured

persons quickly, easily, and with certainty and generos-

ity.” H.R. Rep. No. 99-908, at 3 (1986), reprinted in 1986

U.S.C.C.A.N. 6344. Where, as here, the petitioner obtains

compensation, she is entitled to attorneys’ fees and costs

pursuant to § 300aa-15(e), the amount of which is deter-

mined by the special master. 1

Generally, attorneys’ fees are awarded at the forum

hourly rate. This court, however, created an exception to

this general rule in Avera v. Secretary of Health & Human

1 Even if the petitioner does not prevail, the special

master may still award attorneys’ fees and costs so long

as there was a reasonable basis for the suit and the suit

was brought in good faith. 42 U.S.C. § 300aa-15(e).

3 HALL v. HHS

Services, 515 F.3d 1343 (Fed. Cir. 2008), for cases arising

under the Vaccine Act. In Avera, this court held that

where the bulk of the work is performed outside the forum

and there is a “very significant difference” between the

local hourly rate and the forum hourly rate, attorneys’

fees should be awarded at the local hourly rate. Id. at

1349 (quoting Davis Cty. Solid Waste Mgmt. & Energy

Recovery Special Serv. Dist. v. U.S. Envtl. Prot. Agency,

169 F.3d 755, 758 (D.C. Cir. 1999)). Applying this excep-

tion ensures that attorneys are awarded reasonable

compensation for their work and more appropriately

reflects the purpose of a fee-shifting statute, especially in

cases arising under the no-fault Vaccine Act. This excep-

tion is known as the “Davis County exception,” as it was

adopted from a case having the same name issued by the

United States Court of Appeals for the District of Colum-

bia. See Davis Cty., 169 F.3d at 758. The dispute in this

appeal arises from the special master’s application of the

Davis County exception.

In the present case, Hall initially requested

$83,400.34 in attorneys’ fees and costs for the work per-

formed by her attorney Richard Gage, who practices in

Cheyenne, Wyoming. CFC Op. at 242. Hall arrived at

this calculation based on Mr. Gage’s hourly rate from

August 2002 until April 2009, when her case terminated.

For legal work performed by Mr. Gage between August

2002 and December 2005, Hall requested fees based on an

hourly rate of $175 to $200. Id. at 242 n.4. For Mr.

Gage’s work from January 2006 until April 2009, Hall

requested fees based on an hourly rate of $360 to $410.

Id. at 242.

The special master awarded Hall interim attorneys’

fees in the amount of $51,854.55. Id. The special master

calculated the interim attorneys’ fees using the lodestar

method, which requires “multiplying the number of hours

HALL v. HHS 4

reasonably expended on the litigation times a reasonable

hourly rate,” and then adjusting that number up or down

based on other specific findings. Avera, 515 F.3d at 1347-

48 (internal citation and quotation marks omitted).

The special master used an hourly rate of $175 to

$200 for August 2002 to December 2005 to calculate an

attorneys’ fees award of $28,393.95 for that time period.

Hall v. Sec’y of Health & Human Servs., Case No. 02-VV-

1052, 2009 WL 3094881, at *4 (Fed. Cl. Spec. Mstr. July

28, 2009) (“Interim Special Master Op.”). Although the

parties disputed the appropriate hourly rate for Mr.

Gage’s work between January 2006 and April 2009, the

special master awarded attorneys’ fees based on an hourly

rate of $219 to $239—the lowest amount that would be

awarded—for a total of $23,461.30 in fees. Id.

In his final decision, the special master awarded Hall

an additional $22,018 in attorneys’ fees, which were

calculated using the local, instead of forum, hourly rates.

Hall v. Sec’y of Health & Human Servs., Case No. 02-VV-

1052, 2009 WL 3423036, *1 (Fed. Cl. Spec. Mstr. Oct. 6,

2009) (“Final Special Master Op.”). The special master

applied the Davis County exception because Mr. Gage did

not perform any work related to this case in Washington,

D.C. and the local and forum hourly rates were very

significantly different. Id. at *20, *28. The special mas-

ter compared Mr. Gage’s local hourly rate of $220 to $240

with his forum hourly rate of $350; the forum hourly rate

was 59 percent greater than the local hourly rate. Id. at

*20-21, *26. The special master found that this was a

very significant difference based on three Vaccine Act

cases and one Clean Air Act case. In those cases, the

difference between the local and forum hourly rates

ranged from 46 to 60 percent. Id. at *20-21. Because the

difference here—59 percent—was within that range, the

5 HALL v. HHS

special master found that these rates, too, were very

significantly different. 2 Id.

Hall was dissatisfied with this award, however, and

appealed the special master’s final decision to the Claims

Court. She requested an additional $11,477.20 in attor-

neys’ fees for work performed from January 2006 to April

2009, but the Claims Court denied the request. 3 CFC Op.

at 250. The Claims Court rejected Hall’s argument that

Richlin Security Service Co. v. Chertoff, 553 U.S. 571

(2008), overruled the use of the Davis County exception.

The court upheld the special master’s determination that

“there is a very significant difference between local mar-

ket rates in Cheyenne and forum rates in Washington,

D.C.” CFC Op. at 245. The Claims Court also denied

Hall’s subsequent motion for reconsideration, which

claimed that the court had established a new rule of law

and had miscalculated the difference between the forum

hourly rate and the local hourly rate. Id. at 252-54. Hall

appeals, and we have jurisdiction pursuant to 28 U.S.C.

§ 1298(c).

2 The special master relied on the decision in Ma-

sias v. Secretary of Health & Human Services, Case No.

06-VV-559, 2009 WL 1838979 (Fed. Cl. Spec. Mstr. June

12, 2009), which upheld a determination that local and

forum hourly rates differing by 59 percent were “very

significantly different.” This court recently affirmed the

Claims Court’s decision in Masias v. Secretary of Health &

Humans Services, 2010-5077, slip op. at 3 (Fed. Cir. Mar.

15, 2011).

3 After the special master’s final decision, the par-

ties filed a joint motion requesting that the amount of the

award in the special master’s final decision be reduced to

$2,231.70 because the fee award failed to take into ac-

count his previous interim award of $23,461.30 for the

same time period. CFC Op. at 242.

HALL v. HHS 6

STANDARD OF REVIEW

This court “review[s] an appeal from the Court of Fed-

eral Claims in a Vaccine Act case de novo, applying the

same standard of review as the Court of Federal Claims

applied to its review of the special master’s decision.”

Broekelschen v. Sec’y of Health & Human Servs., 618 F.3d

1339, 1345 (Fed. Cir. 2010) (citation omitted). Under 42

U.S.C. § 300aa-12, the Claims Court may “set aside any

findings of fact or conclusion of law of the special master

found to be arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with law . . . .” Thus, we

review fact findings under the arbitrary and capricious

standard, discretionary rulings under the abuse of discre-

tion standard, and legal questions de novo under the “not

in accordance with the law” standard. Saunders v. Sec’y

of Health & Human Servs., 25 F.3d 1031, 1033 (Fed. Cir.

1994). Generally in cases under the Vaccine Act, “[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

Health & Human Servs., 940 F.2d 1518, 1528 (Fed. Cir.

1991).

DISCUSSION

The essence of Hall’s appeal is to eliminate the Davis

County exception to the general rule that forum hourly

rates are used to calculate attorneys’ fees. First, she

reiterates her claim that the Supreme Court’s decision in

Richlin overruled the application of the Davis County

exception. Hall’s second attempt at eliminating the Davis

County exception is more circumspect. She asserts that

the very significant difference determination is a question

of law and that this court should set a percentage or

absolute dollar amount that constitutes such a difference.

7 HALL v. HHS

She then makes the leap that the forum hourly rate

should be reduced so that it does not exceed the threshold

set by the court, thus ensuring counsel would never be

awarded attorneys’ fees at the local hourly rate. As

discussed below, neither of these arguments have merit.

I.

Our recent decision in Masias v. Secretary of Health &

Humans Services, 2010-5077, slip op. at 8 (Fed. Cir. Mar.

15, 2011) disposes of Hall’s argument that Richlin pre-

vents the application of the Davis County exception to

Vaccine Act cases. In Masias, this court held that Rich-

lin’s “adoption of market rates for paralegal fees is not

contrary to Avera.” Id. Indeed, the statute in Richlin, 5

U.S.C. § 504(a)(1), specifically requires that attorneys’

fees be calculated at “prevailing market rates.” Neither

42 U.S.C. § 7607(f), the statute in Davis County, nor the

Vaccine Act have a similar limitation on the calculation of

attorneys’ fees. Thus, until Avera is overturned by the

Supreme Court or by this court sitting en banc, it remains

binding precedent. See Masias, slip op. at 8 (citing Bar-

clay v. United States, 443 F.3d 1368, 1373 (Fed. Cir.

2008); McAllister v. Sec’y of Health & Human Servs., 70

F.3d 1240, 1242 (Fed. Cir. 1995)).

II.

Hall’s next attempt to eliminate the Davis County ex-

ception in Vaccine Act cases similarly fails. She alleges

that one part of the Davis County exception—the deter-

mination of whether the local and forum hourly rates are

very significantly different—is a question of law. Based

on this allegation, Hall urges the court to set a bright line

rule for what constitutes a very significant difference.

Hall then asks the court to establish a new requirement

that the forum hourly rate should be reduced so that the

forum hourly rate falls below the threshold of what consti-

HALL v. HHS 8

tutes a very significant difference. 4 Thus, in Hall’s world,

the Davis County exception would never apply.

As an initial matter, Hall essentially asks this court

again—albeit in a less direct manner—to overturn Avera’s

adoption of the Davis County exception by reducing

reasonable forum hourly rates to eliminate a very signifi-

cant difference. As explained supra, a panel of this court

cannot overturn another panel. See Barclay, 443 F.3d at

1373. This court declines to do so.

More broadly, Hall’s assertion that the determination

of whether there is a very significant difference between

the local and forum hourly rates should be a question of

law is erroneous. Of the three categories of judicial

decisions—questions of law, questions of fact, and matters

of discretion, see Pierce v. Underwood, 487 U.S. 552, 558

(1988)—the standard of review for the determination of

reasonable attorneys' fees is abuse of discretion. See

Saxton ex. rel. Saxton v. Sec’y of Health & Human Servs.,

3 F.3d 1517, 1520 (Fed. Cir. 1993) (citation omitted) (“The

determination of the amount of reasonable attorneys’ fees

is within the special master’s discretion.”). Of course, a

special master’s failure to apply the Davis County excep-

tion where he or she has found that the bulk of the work

was performed outside the forum and the difference

4 Hall provides the following example, see Pet’r’s Br.

14: assume the bright line rule states that local and forum

hourly rates are very significantly different if they are

more than $100 apart. Further assume that the local rate

is $240 and the forum rate is $350 per hour. Under Hall’s

proposal, the court should reduce the forum rate to $340

per hour so that it falls within the $100 threshold for

what constitutes a very significant difference. Thus,

attorneys’ fees would be awarded at the $340 per hour

rate.

9 HALL v. HHS

between local and forum hourly rates is very significantly

different would be incorrect as a matter of law.

This court’s decision to apply an abuse of discretion

standard is guided by the principles enunciated in Pierce,

where the Supreme Court found that the abuse of discre-

tion standard was appropriate for reviewing a district

court’s determination of attorneys’ fees under 28 U.S.C.

§ 2412(d)(1)(A). 487 U.S. at 559-63. The Court explained

that in deciding the appropriate standard of review, a

court should consider the language of the applicable law

and principles of “sound judicial administration.” Id. The

Court focused on the statutory language in 28 U.S.C.

§ 2412(d)(1)(A) that said attorneys’ fees must be awarded

“unless the court finds that the position of the United

States was substantially justified.” Id. (quoting 28 U.S.C.

§ 2412(d)(1)(A)). The Court reasoned that this language

“emphasizes [that] the fact determination is for the dis-

trict court to make, and thus suggests some deference to

the district court.” Id. Furthermore, the district court was

better positioned than the appellate court to decide

whether the Government’s position was “substantially

justified” because it was intimately familiar with all the

facts before it. Id. at 560; see Hensley v. Eckerhart, 461

U.S. 424, 437 (1983) (finding that the district court had a

“superior understanding of the litigation”). Finally, the

Court found that determining whether a position was

“substantially justified” is a “multifarious and novel

question” that would “likely profit from the experience

that an abuse-of-discretion rule will permit to develop.”

Pierce, 487 U.S. at 562. The Court concluded that based

on these considerations, an abuse of discretion standard

was appropriate. Id. at 563.

Application of the Pierce factors to this case requires a

similar result. First, both 42 U.S.C. § 300aa-15(e) and the

Davis County exception require a detailed multi-

HALL v. HHS 10

component determination by the special master. See

Pierce, 487 U.S. at 559. Section 300aa-15(e) states that

“the special master or court shall also award as part of

such compensation an amount to cover . . . reasonable

attorneys’ fees.” Thus, the statute leaves it to the special

master’s discretion to find what constitutes reasonable

fees. The Davis County exception requires a further

application of the special master’s findings to determine

whether or not there is a very significant difference

between local and forum hourly rates.

The special master is also intimately familiar with the

facts necessary to make the very significant difference

determination. See Pierce, 487 U.S. at 560. In calculating

the local and forum hourly rates, the special master

assesses the reasonable hourly rate “prevailing in the

[forum or locally] for similar services by lawyers of rea-

sonably comparable skill, experience, and reputation.”

Avera, 515 F.3d at 1348 (quoting Blum v. Stenson, 465

U.S. 886, 896 n.11 (1984)). In making his determination,

the special master relies on declarations, previous compa-

rable litigation, and his or her own experience in similar

cases. See Saxton, 3 F.3d at 1521. Once the special

master determines the local and forum hourly rates, he

must compare them. The special master is better

equipped to decide whether or not there is a difference

between the two rates and the degree of that difference,

as his or her “superior understanding of the litigation”—

something an appellate court lacks—is essential to this

determination. See Hensley, 461 U.S. at 437 (explaining

that attorneys’ fees determinations are “essentially fac-

tual matters”).

Relatedly, setting a rule as to what constitutes a very

significant difference between local and forum hourly

rates would be stifling and impractical. See Pierce, 487

U.S. at 562. As explained above, making this determina-

11 HALL v. HHS

tion is multifaceted and the experience of the special

master is invaluable to it. Special masters should, as in

this case, continue to rely on the evidence before them

and their own trial experience in similar litigations in

making such a determination.

Here, the special master undertook a detailed analy-

sis of reasonable local and forum hourly rates in Vaccine

Act cases and other similar litigation. He also examined

previous Vaccine Act cases and a Clean Air Act case that

found the local and forum hourly rates were very signifi-

cantly different. The following chart lists the local and

forum hourly rates from those cases and the percentage

difference between them:

HALL v. HHS 12

Case Local Percentage

Forum

Hourly Difference

Hourly

Rate Rate

Sabella v. Sec’y of $300 $440 46%

Health & Human

Servs., Case No. 02-

VV-1627, 2008 WL

4426040 (Fed. Cl.

Spec. Mstr. Sept. 23,

2008) rev’d on other

grounds, 86 Fed. Cl.

201 (Fed. Cl. 2009)

WL $220 $350 59%

Masias, 2009

1838979

Rodriguez v. Sec’y of $450 $275 60%

Health & Human

Servs., Case No. 06-

VV-0559, 2009 WL

2568468 (Fed. Cl.

Spec. Mstr. July 27,

2009)

Mountain $225 $360 60%

Rocky

Clean Air Action v.

Johnson, Case No.

05-CV-1992, 2008

WL 1885333 (D.D.C.

Jan. 28, 2008)

As the chart shows, the local and forum hourly rates in

those cases ranged from 46 to 60 percent. Here, the

difference between Mr. Gage’s local hourly rate of $220 to

13 HALL v. HHS

$240 and his forum hourly rate of $350 was 59 percent,

which the special master found to be very significant. The

special master’s attorneys’ fees decision was within the

parameters of the cases on which he relied and was not an

abuse of discretion.

CONCLUSION

For the foregoing reasons, we affirm the decision of

the Claims Court.

AFFIRMED

COSTS

No costs.