Depena v. Secretary of Health and Human Services

In the United States Court of Federal Claims

OFFICE OF SPECIAL MASTERS

*********************

BO DEPENA and NATALIE *

DEPENA, legal representatives * No. 13-675V

of a minor child, RHONE DEPENA, * Special Master Christian J. Moran

*

Petitioners, *

* Filed: March 30, 2017

v. *

*

SECRETARY OF HEALTH * Attorneys’ fees and costs on interim

AND HUMAN SERVICES, * basis, expert’s reasonable hourly

* rate, expert’s reasonable number of

Respondent. * hours

*********************

Michael A. Baseluos, Baseluos Law Firm, San Antonio, TX, for Petitioners;

Heather L. Pearlman, United States Dep’t of Justice, Washington, DC, for

Respondent.

DECISION AWARDING ATTORNEYS’

FEES AND COSTS ON AN INTERIM BASIS1

On September 12, 2013, Bo and Natalie DePena filed a petition for

compensation on behalf of their son, Rhone, alleging that he developed pneumonia

as a result of the administration of measles-mumps-rubella vaccine on September

15, 2010. The DePenas seek compensation pursuant to the National Childhood

Vaccine Injury Act, 42 U.S.C. §§ 300aa–10 through 34 (2012). The case remains

pending as they have filed a motion for review. For the reasons set forth below,

1

The E-Government Act, 44 U.S.C. § 3501 note (2012) (Federal Management and

Promotion of Electronic Government Services), requires that the Court post this decision on its

website. Pursuant to Vaccine Rule 18(b), the parties have 14 days to file a motion proposing

redaction of medical information or other information described in 42 U.S.C. § 300aa-12(d)(4).

Any redactions ordered by the special master will appear in the document posted on the website.

petitioners are entitled to an interim award of attorneys’ fees and costs in the

amount of $148,586.81.

Procedural History

Represented by Michael Baseluos, the DePenas filed their petition on

September 12, 2013, with gathering and filing of medical records completed about

two months thereafter. The Secretary reviewed the record and indicated that some

medical records remained outstanding. Resp’t’s Status Rep. filed Dec. 12, 2013.

The DePenas investigated the availability of the records requested by the Secretary

for several months. On May 28, 2014, the Secretary filed her report pursuant to

Vaccine Rule 4. The Secretary asserted that the DePenas failed to establish that

the MMR vaccine caused a vaccine-related injury and that the DePenas failed to

satisfy their burden under any of the Althen prongs. Ultimately, the Secretary

recommended that compensation be denied. Resp’t’s Rep., filed May 28, 2014, at

10-11.

During the ensuing status conference, the DePenas stated that they would

retain an expert to opine on the case. Order, issued June 12, 2014. The process of

locating an expert and obtaining a report took some time, with the first expert

report of Boris Lokshin, a pediatric pulmonologist, being filed on February 28,

2015. Exhibit 21. The DePenas subsequently filed five additional expert reports

from Dr. Lokshin. Exhibits 22, 23, 25, 30, and 31. The Secretary filed three

expert reports from Neil Romberg, a pediatric immunologist. Exhibits A, P, FF.

A hearing was scheduled for February 11, 2016, in San Antonio, Texas. The

parties submitted pre-hearing briefs. During the hearing, Dr. Lokshin testified but

did not complete his testimony. Dr. Romberg also testified, providing a response

to a portion of Dr. Lokshin’s testimony. The hearing was then suspended to be

resumed at a later date.

Following the first session of the hearing, the DePenas filed several

additional articles from Dr. Lokshin as well as a demonstrative exhibit created

during the hearing. With this record, another hearing was held, via

videoconference, on April 12, 2016. During the second hearing, both Dr. Lokshin

and Dr. Romberg completed their oral testimony.

On May 16, 2016, the DePenas filed their first motion for attorneys’ fees and

costs on an interim basis. The Secretary filed a response. While not stating any

specific objections, she made observations. The Secretary noted that the total

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amount requested was $176,078.72, which included $77,981.00 in attorneys’ fees

and costs (apart from the costs associated with Dr. Lokshin), $8,268.31 in costs

supposedly incurred personally by the petitioners, and $87,950.00 for expert fees.

The Secretary proposed that a reasonable award would fall between $80,000.00

and $100,000.00, suggesting that the undersigned “exercise his discretion” in

determining a reasonable award of attorneys’ fees and costs within the range she

provided. Resp’t’s Resp., filed June 2, 2016, at 4.

On September 8, 2016, the DePenas filed their second motion for attorneys’

fees and costs, providing a more detailed application that accounted for briefs filed

after the hearing. The total requested amount is $194,402.41. The individual

components are:

Attorneys’ Fees $76,308.10

Costs:

Personally Incurred: $2,150.00

Attorneys’ Costs (exclusive of Dr. Lokshin) $4,240.62

Dr. Lokshin’s Fees $109,825.00

Dr. Lokshin’s Expenses $1,878.69

The Secretary responded, incorporating her previous response and

recommending that the undersigned award fees and costs within the range

provided. Resp’t’s Resp., filed Sept. 19, 2016, at 1.

During a status conference held on November 15, 2016, the undersigned

discussed the fee application with the parties. With respect to the attorneys’ fees,

the undersigned stated that a preliminary review suggested that a handful of

attorney tasks appeared to take an excessive amount of time. After a discussion,

Mr. Baseluos volunteered that a small reduction might be acceptable.

With respect to the costs associated with Dr. Lokshin, the undersigned

expressed some concern regarding Dr. Lokshin’s proposed hourly rate and number

of hours billed. Dr. Lokshin billed $500 per hour for a total of 221.70 hours. Mr.

Baseluos defended the amount requested as well-founded due to the number of

reports filed, the number of articles filed, and the complexity of the case. Mr.

Baseluos’s defense of Dr. Lokshin’s invoice did not prevent him from indicating a

willingness to discuss Dr. Lokshin’s fees to reach a compromise. However, the

Secretary maintained her position of not negotiating attorneys’ fees and costs. See

Dorego v. Sec’y of Health & Human Servs., No. 14-337V, 2016 WL 1635826

(Fed. Cl. Spec. Mstr. May 16, 2016).

3

Another status conference to discuss Dr. Lokshin’s invoice was held on

February 17, 2017. There, the undersigned suggested that the Secretary present

invoices that Dr. Romberg created. However, the Secretary resisted this

suggestion, arguing that Dr. Romberg’s invoice would not provide information that

would help the undersigned evaluate the reasonableness of Dr. Lokshin’s request.

The DePenas for their part were ambivalent. In their view, the information already

presented was sufficient to establish the reasonableness of Dr. Lokshin’s work, but,

if the special master wanted Dr. Romberg’s invoices, then the DePenas were not

opposed to the Secretary producing them.

The DePenas more formally presented their views in an amended motion for

an award of attorneys’ fees and costs, filed on February 20, 2017. “Counsel for

petitioner has indicated that if the [special master] is contemplating a significant

reduction in Dr. Lokshin’s fees (the definition of ‘significant’ being more than

20%), then petitioner asks the [special master] to demand respondent produce Dr.

Romberg’s invoices.” Pet’rs’ Updated App’n, filed Feb. 20, 2017, at 5. With this

brief, the DePenas also took the opportunity to submit a request for additional

compensation for Mr. Baseluos to reflect his efforts regarding attorneys’ fees and

costs.

In addition to the motions for an award of attorneys’ fees and costs on an

interim basis, the DePenas claim for compensation for Rhone’s pneumonia

remained pending. On February 22, 2017, a decision found that the DePenas failed

to meet their burden of proof. 2017 WL 1075101. This decision did not end the

case as the DePenas, on March 21, 2017, filed a motion for review.

The motion for review of the entitlement decision does not affect the

outcome of the pending motions for an award of attorneys’ fees and costs on an

interim basis. The September 8, 2016 motion for attorneys’ fees and costs is ready

for adjudication and is resolved in this decision.2

2

To be clear, this decision adjudicates the September 8, 2016 motion for attorneys’ fees

and costs only. The undersigned is aware that the DePenas have recently updated their request.

However, the September 8, 2016 motion is a more expeditious vehicle for providing an award to

the DePenas. The DePenas may request compensation for the work Mr. Baseluos performed that

was not included in their September 8, 2016 motion in a separate motion for attorneys’ fees and

costs.

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Analysis

Broadly speaking, resolving a motion for an award of attorneys’ fees and

costs on an interim basis requires consideration of three issues. The first is

whether the petitioner is eligible for attorneys’ fees and costs. If the petitioner is

eligible, then the second issue is whether the petitioner should receive any

attorneys’ fees and costs at this time. The third question is, assuming that some

award is appropriate, what constitutes a reasonable amount in this case. See Rehn

v. Sec’y of Health & Human Servs., 126 Fed. Cl. 86, 91 (2016).

1. Have Petitioners Satisfied the Requirements for an Award of

Attorneys’ Fees and Costs?

To be eligible for any award of attorneys’ fees and costs, petitioners must

satisfy the standards of good faith and reasonable basis. See 42 U.S.C. § 300aa—

15(e) (2012). Dr. Lokshin’s reports fulfill the reasonable basis standard in this

case. Moreover, the Secretary does not contend the DePenas brought the claim

without a reasonable basis or in bad faith.

2. Should an Award of Attorneys’ Fees and Costs Be Awarded on an Interim

Basis?

The next question is whether an award of attorneys’ fees and costs should be

made now, that is, on an interim basis. This issue involves consideration of

various factors, including protracted proceedings, costly experts, and undue

hardship. Avera v. Sec’y of Health & Human Servs., 515 F.3d 1343, 1351-52;

McKellar v. Sec’y of Health & Human Servs., 101 Fed. Cl. 297, 300-01 (2011)

(discussing Avera factors).

The DePenas satisfy these factors. Their attorney, Mr. Baseluos, gathered

and filed medical records, obtained expert reports, attended two hearings, and the

case has been pending for over three years without any previous award of interim

fees and costs. Additionally, the DePenas have personally incurred costs, and there

seems to be little reason to force petitioners to wait for reimbursement of these

costs. Moreover, the Secretary did not raise any objection to an interim award

during the November 15, 2016 status conference.

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3. What Is A Reasonable Amount of Attorneys’ Fees and Costs?

The last issue is determining a reasonable amount for attorneys’ fees and

costs. In the September 8, 2016 motion, the DePenas seek an award of

$194,402.41 in attorneys’ fees and costs. The Secretary maintained that the

reasonable amount would not exceed $100,000.00.

A. Attorneys’ Fees

The process of determining a reasonable amount of attorneys’ fees involves

the lodestar value. Avera, 515 F.3d at 1347-48.

Here, the DePenas request $76,308.10 in attorneys’ fees. Mr. Baseluos has

billed $251 per hour in 2013, $255 per hour in 2014, $257 per hour in 2015, and

$265 per hour in 2016. When Mr. Baseluos performed tasks that a paralegal could

perform, he billed $90 per hour.

The DePenas have not stated that they are requesting that Mr. Baseluos be

compensated at rates prevailing in the forum. See McCulloch v. Sec’y of Health &

Human Servs., No. 09-293V, 2015 WL 5634323, at *17 (Fed. Cl. Spec. Mstr. Sept.

1, 2015) (setting forum rates), reconsideration denied, No. 09-293V, 2015 WL

6181910 (Fed. Cl. Spec. Mstr. Sept. 21, 2015). Regardless, the proposed rates are

accepted as reasonable as appropriate for attorney in San Antonio, Texas with an

amount of experience similar to Mr. Baseluous. See 2015 Hourly Fact Sheet, State

of Texas Bar (Mar. 24, 2017),

https://www.texasbar.com/AM/Template.cfm?Section=Demographic and Econo

mic Trends.

For the number of hours, although not required, the undersigned has

conducted a line-by-line review of the application for reasonableness. See Shea v.

Secʼy of Health & Human Servs., No. 13-737V, 2015 WL 9594109, at *2 (Fed. Cl.

Spec. Mstr. Dec. 10, 2015) (“special masters are not obligated to evaluate an

attorney’s billing records on a line-by-line basis in making the reasonableness

determination . . . and certainly need not do so when Respondent has not attempted

to highlight any specific alleged inefficiencies”). The undersigned was impressed

with Mr. Baseluos’s billing judgment and the thoroughness of his time entries.

Nevertheless, in the undersigned’s experience (see Saxton v. Sec’y of Health &

Human Servs., 3 F.3d 1517, 1521 (Fed. Cir. 1993)), the charge associated with a

small number of tasks was excessive. See, e.g., entry for March 5, 2014:

6

“Draft/revise status report and enlargement of time. 0.40 hours.” Consequently,

the attorneys’ fees are reduced to $73,000.00.

B. Attorneys’ Costs

Attorneys’ costs are those incurred in pursuit of the litigation. In this case,

there are three categories of costs, those related to Mr. Baseluos, the DePenas, and

the expert, Dr. Lokshin.

(1) Mr. Baseluos’s Costs

Mr. Baseluos is awarded $4,240.62 for incurred costs such as the transcript,

videoconference room, etc. These are reasonable and well-documented, and,

therefore, awarded in full.

(2) The DePenas’ Costs

The DePenas are awarded $2,150.00 for costs personally incurred in pursuit

of this litigation. These costs are reasonable and adequately documented.

(3) Costs Related to Dr. Lokshin’s Fee

The remainder of costs concerns amounts billed by Dr. Lokshin. Like

attorneys’ fees, reasonable expert fees are determined using the lodestar method in

which a reasonable hourly rate is multiplied by a reasonable number of hours. The

DePenas request an award for Dr. Lokshin in the amount of $110,850.00 . This

amount represents 221.70 hours at a rate of $500 per hour. See Pet’rs’ Fee Mot.,

filed May 16, 2016, exhibit D at 8; Pet’rs’ Second Fee Mot., filed Sept. 8, 2016,

exhibit G at 1.3

A reasonable hourly rate for an expert takes into account multiple factors.

For example, experts who are experienced in the Vaccine Program work relatively

quickly, and this efficiency translates to a relatively high hourly rate.

Qualifications like board certification in a relevant discipline also support a

relatively high hourly rate. A doctor’s expertise can also be demonstrated by

teaching medical school students as a professor of medicine and writing articles

3

The petitioners’ September 8, 2016 updated motion for attorneys’ fees and costs appears

to contain an error in calculating the amount Dr. Lokshin has requested.

7

published in peer-reviewed journals. See Simon v. Sec’y of Health & Human

Servs., No. 05–941V, 2008 WL 623833, at *3 (Fed. Cl. Spec. Mstr. Feb. 21, 2008).

In this case, petitioners have not established that Dr. Lokshin is entitled to

$500 per hour. Preliminarily, this case was Dr. Lokshin’s first time as an expert in

the Vaccine Program. His newness to the Vaccine Program means that Dr.

Lokshin must learn about the procedures in the Vaccine Program and this learning

brings a certain inefficiency that does not affect the work of more experienced

experts, who have been awarded $500 per hour.

Additionally, Dr. Lokshin’s expertise does not match the relevant subject

matter. As explained in the entitlement decision, Dr. Lokshin’s theory was based

on how the immune system (particularly B cells and T cells) responds to a

pneumococcus infection. Thus, the relevant discipline was immunology.

Decision, 2017 WL 1075101. However, Dr. Lokshin’s background and experience

focus on allergy, asthma, and pulmonology. Exhibit 19 (curriculum vitae); Tr. 62.4

His board certification in pediatric pulmonology similarly speaks to Dr. Lokshin’s

expertise in that field, not immunology.

Finally, even in pulmonology, Dr. Lokshin seems not to occupy a position

that suggests that he is leading doctor, who would merit the highest hourly rate.

He does not teach large classes of medical students. He is not conducting any

research. He has not written any articles published in peer-reviewed journals since

1993. He does not serve as an editor on any medical journals. Exhibit 19; Tr. 75-

80. The experts in the Vaccine Program who are compensated at a rate of $500 per

hour typically, such as Dr. Steinman, have all these qualifications.

For these reasons, the petitioners have not established the reasonableness of

compensating Dr. Lokshin at $500 per hour. Based on the undersigned’s

experience, a rate of $325 per hour is more commensurate with Dr. Lokshin’s

experience. See Barclay v. Sec’y Health & Human Servs., No. 07-605V, 2014 WL

2925245 (Fed. Cl. Spec. Mstr. Feb. 7, 2014) (reducing number of hours for an

attorney who charged a relatively high hourly rate).

4

Dr. Lokshin’s most relevant experience was completing a joint fellowship in

immunology / allergy and pediatric pulmonology. But, this fellowship ended in 1990, and after

that Dr. Lokshin appears not to have practiced immunology.

8

After a determination about a reasonable hourly rate, the next factor to

consider is a reasonable number of hours. Here, Dr. Lokshin seeks compensation

for 221.70 hours.5 At first glance, this amount of time shockingly exceeds the

amount of time that experts usually spend on a case that included two days of

hearing. Even in the absence of a specific objection from the Secretary, the

undersigned could not endorse an expert’s spending more than 200 hours without

some review of the supporting materials.

Dr. Lokshin, like Mr. Baseluos, submitted timesheets with thorough entries.

Each entry contains a detailed description of the activity for which Dr. Lokshin has

charged time. Dr. Lokshin summarized the medical records, wrote six reports,

reviewed more than 70 articles, assessed the Secretary’s expert reports, prepared

for two days of hearing, and attended the two hearings. Pet’rs’ Fee Mot., exhibit

D. With one exception, the details in the invoices persuasively establish the

reasonableness of Dr. Lokshin’s efforts.

The finding that Dr. Lokshin spent a reasonable amount of time is premised

upon the previous finding that reduced Dr. Lokshin’s proposed hourly rate. Dr.

Lokshin’s proposed hourly rate was reduced because, in part, he did not have the

requisite experience in immunology to work efficiently. Once Dr. Lokshin’s

hourly rate is modified to account for the time required to get up to speed on

immunology, an additional reduction in the time spent on the case is not required.

Simon, 2008 WL 623883, at *5; Kuperus v. Sec’y of Health & Human Servs., No.

01–60V, 2006 WL 3499516, at *3 (Fed. Cl. Spec. Mstr. Nov. 17, 2006) (stating

“While it is reasonable to award higher hourly rates to well-qualified experts, that

is, in part, with the understanding that such expert will expend fewer hours on the

case”). In other words, Dr. Lokshin is not being penalized twice for his relative

lack of experience.6 For the time that Dr. Lokshin spent through the completion of

the hearing (175.9 hours), the petitioners are awarded $57,167.50 (175.9 hours

times $325.00 per hour).7

5

Through completion of the second day of hearing, Dr. Lokshin spent 175.9 hours.

Pet’rs’ Mot., exhibit D. As explained below, after the hearing ended, Dr. Lokshin spent an

additional 45.8 hours.

6

In a future case, if Dr. Lokshin were to demonstrate increased efficiency by spending

fewer hours, his hourly rate might rise.

7

Because the undersigned is finding that all the time Dr. Lokshin spent through the end

of the hearing was reasonable, obtaining invoices from Dr. Romberg is not necessary.

9

The only task that was not reasonable for Dr. Lokshin to perform was

submitting additional reports after the hearing concluded. At the end of the

hearing, the parties expressed an interest in filing “briefs.” See order, issued Apr.

15, 2016. Ordinarily, an attorney (here, Mr. Baseluos) would draft a brief.

Unexpectedly, Mr. Baseluos directed Dr. Lokshin to prepare another report.

Exhibit 30. Then, after the Secretary had commented that the special master

ordered briefs not expert reports (Resp’t’s Br., filed July 27, 2016, at 1 n.1), Mr.

Baseluos again instructed Dr. Lokshin to prepare another report. Exhibit 31. For

his work in preparing these two reports, Dr. Lokshin has requested compensation

for 45.8 hours. Pet’rs’ Second Fee Mot., filed Sept. 8, 2016, exhibit G.

Because the undersigned did not ask for additional reports from an expert, it

was not reasonable to obtain more reports. A paying client would be unlikely to

pay for work that the presiding special master did not request. Riggins v. Sec’y of

Health & Human Servs., No. 99-382V, 2009 WL 3319818, at *12 (Fed. Cl. Spec.

Mstr. June 15, 2009) (setting forth the paying client test), mot. for rev. denied (Fed.

Cl. Dec. 10, 2009), aff’d, 406 Fed. App’x 479 (Fed. Cir. 2011); see also Sabella v.

Sec’y of Health & Human Servs., 86 Fed. Cl. 201, 222 (2009) (ruling the special

master was not arbitrary in awarding no compensation for unnecessary work).

On the other hand, the April 15, 2016 order did instruct the parties to file

briefs. If Mr. Baseluos had interpreted the term “briefs” to mean an argument

summarizing existing evidence, then Mr. Baseluos would have spent time writing

the briefs. So, in a way, Dr. Lokshin performed work that Mr. Baseluos should

have performed. The work, therefore, is compensable. See Valdes v. Sec’y of

Health & Human Servs., 89 Fed. Cl. 415, 425 (2009) (ruling that special master

should have compensated an attorney, who performed paralegal work, at paralegal

rates rather than not compensating the attorney at all). Therefore, for the work

after trial through August 26, 2016 (the date petitioners filed their reply brief), the

petitioners are awarded $10,600.00 This represents 40 hours of Mr. Baseluos’s

time at his usual rate of $265.00 per hour.

Dr. Lokshin also incurred costs. Most are reasonable. However, he has

charged $900.92 for a first-class airline ticket. Pet’rs’ Fee Mot., exhibit E at 3.

There is no persuasive evidence that a hypothetical paying client would agree to

incur the expense of a first-class airline ticket. Therefore, the undersigned reduces

this charge by $450. All other expenses incurred are reasonable, adequately

documented, and paid in full.

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C. Summary of Attorneys’ Fees and Costs

The petitioners have established the reasonableness of the following items:

Attorneys’ Fees $73,000.00

Attorneys’ Costs exclusive of Dr. Lokshin $4,240.62

Costs of Petitioners, personally $2,150.00

Dr. Lokshin’s Fee $57,167.50

Dr. Lokshin’s Costs $1,428.69

Work on Post-Hearing Submissions $10,600.00

TOTAL $148,586.81

Conclusion

Petitioners are entitled to an award of interim attorneys’ fees and costs

totaling $148,586.81.

The award shall be paid as follows:

a. A lump sum of $146,436.81 in the form of a check made payable to

petitioners, and petitioners’ counsel, Michael Baseluos, of Baseluos Law

Firm, for interim attorneys’ fees and other litigation costs available under

42 U.S.C. § 300aa-15(e).

b. A lump sum of $2,150.00, payable to petitioners, Bo and Natalie DePena,

for costs they incurred in pursuit of their petition.

There is no just reason to delay the entry of judgment on interim attorneys’

fees and costs. The Clerk shall enter judgment accordingly.8

IT IS SO ORDERED.

S/Christian J. Moran

Christian J. Moran

Special Master

8

Pursuant to Vaccine Rule 11(a), entry of judgment can be expedited by the parties’ joint

filing of notice renouncing the right to seek review.

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