Court Opinion

ID: 2682262
Source: CourtListenerOpinion
Date Created: 2014-07-08 16:00:54.443945+00
Date Added: 2024-06-11T13:12:42.129632
License: Public Domain

In the United States Court of Federal Claims
                           OFFICE OF SPECIAL MASTERS

*************************************
JAMES L. PATEREK,                         *
as best friend of his son,                *
JAMES L. PATEREK, JR.,                    *      No. 02-411V
                                          *      Special Master
                     Petitioner,          *      Christian J. Moran
                                          *
v.                                        *      Filed: June 12, 2014
                                          *
SECRETARY OF                              *
HEALTH AND HUMAN SERVICES,                *      Attorneys’ fees and costs;
                                          *      stipulation of fact; award in
                     Respondent.          *      the amount to which respondent
                                          *      does not object
*************************************
John F. McHugh, New York, NY, for petitioner;
Michael Patrick Milmoe, United States Dep’t of Justice, Washington, DC, for
respondent.

                   UNPUBLISHED DECISION ON FEES AND COSTS1

       Respondent filed a stipulation of fact concerning final attorneys’ fees and
costs in the above-captioned matter on May 20, 2014. Previously, petitioner
informally submitted a draft application for attorneys’ fees and costs to respondent
for review. Upon review of petitioner’s application, respondent raised objections
to certain items. Based on subsequent discussions, petitioner amended her
application to request $450,000.00, an amount to which respondent does not
object. The Court awards this amount, because of the complexity and duration of
this case as explained below.

       1
          The E-Government Act of 2002, Pub. L. No. 107-347, 116 Stat. 2899, 2913 (Dec. 17,
2002), 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.
I.    Procedural History
       On April 30, 2002, Mr. Paterek filed a petition seeking compensation for his
child’s injuries. Doe 21 v. Sec’y of Health & Human Servs., No. 02-0411V, WL
4679501, at *1 (Fed. Cl. Spec. Mstr. May 22, 2008). Mr. Paterek filed medical
records periodically from October 2002 through April 2004 and also presented
reports from expert witnesses. Id. at *10-11. The presiding special master held a
hearing during which five witnesses testified in October 2005. Id. at *1. The
October 2005 hearing did not conclude the evidentiary development of Mr.
Paterek’s case, and so a separate hearing was held on July 20, 2007. Id. On May
22, 2008, the presiding special master issued a decision denying compensation
because the petitioner was unable to demonstrate causation. Id. at *27.

       Mr. Paterek filed a Motion for Review of the May 22, 2008 decision with
the United States Court of Federal Claims. Doe 21 v. Sec’y of Health & Human
Servs., 84 Fed. Cl. 19, 44. (Fed. Cl. 2008). The Court concluded that “Petitioner’s
Counsel overlooked obvious legal errors made by” the special master. Id. at 49. In
addition, the Court said “Petitioner’s counsel failed to argue governing precedent
favoring his client’s position.” Id. Nevertheless, the Court vacated the May 22,
2008 decision and remanded the case with instructions to issue a decision within
90 days. Id. at 20, 50.

      On remand, a third hearing was held on December 2, 2008. Doe 21 v. Sec’y
of Health & Human Servs., 2009 WL 3288295, at *8 (Fed. Cl. Spec. Mstr. Jan. 16,
2009). On January 16, 2009, Mr. Paterek was again denied compensation, this
time because he had failed to satisfy the logical sequence and timing prongs of the
causation-in-fact test established in Althen v. Sec'y of Health & Human Servs., 418
F.3d 1274, 1278 (Fed. Cir. 2005). Id. at *34.

       On February 17, 2009, Mr. Paterek filed a second Motion for Review
challenging the December 2, 2008 decision. Doe 21 v. Sec’y of Health & Human
Servs., 88 Fed. Cl. 178, 196 (Fed. Cl. 2009). On July 17, 2009, the Court granted
the petitioner’s Motion for Review and reversed the January 16, 2009 decision. Id.
at 202. The Court also remanded the case to determine the amount of
compensation to Mr. Paterek, reasonable attorneys’ fees, and other costs. Id.

       The proceedings on remand were complicated. On March 29, 2011, Mr.
Paterek filed a motion seeking an award of attorneys’ fees and costs on an interim
basis. Doe 21 v. Sec’y of Health & Human Servs., No. 02-411V, 2011 WL

                                         2
6941671, at *2 (Fed. Cl. Spec. Mstr. Oct. 26, 2011). The Secretary objected to
several aspects of this motion, leading to multiple rounds of briefing. A focus of
the parties’ arguments was the reasonable hourly rate for Mr. Paterek’s attorney,
John McHugh. Some of the parties’ disputes were resolved in a decision awarding
Mr. Paterek $59,132.39 of his costs on an interim basis. Doe 21, 2011 WL
6941671, at *1. Costs were denied without prejudice for four individuals due to
lack of evidence. Id. at *8-9. The decision did not, however, resolve the greater
issue of attorneys’ fees or determine the reasonable hourly rate for Mr. McHugh.
Id. at *11.

       For damages, the process was more complicated than a typical case in the
Vaccine Program. Mr. Paterek followed the usual practice of retaining a life care
planner to project the costs of his child’s medical care, and the Secretary also
retained a life care planner. Id. at *2. This process, while not perfectly smooth,
worked well enough.

       However, Mr. Paterek also pursued a relatively uncharted course with
respect to the form of payment. For more than 15 years, in cases in which the
parties anticipated a relatively large amount of compensation would address future
medical needs, the special master has ordered the purchase of an annuity. In
accord with this practice, the Secretary proposed to purchase an annuity that would
pay for Mr. Paterek’s needs periodically. Mr. Paterek, however, challenged this
practice. He maintained that he should receive all compensation in a lump sum
because he could manage and invest a lump sum for his child’s benefit. The
parties spent an extensive amount of time developing evidence, including obtaining
reports from experts, and arguments about whether the form of payment should be
in a lump sum or in an annuity. A hearing was held on this issue.

      Before a formal ruling resolved the method of compensation, the parties
reached an agreement and submitted a proffer. A decision awarding Mr. Paterek
compensation was issued on January 4, 2012, 2012 WL 219343 at *1, and
judgment entered in accord with this decision on February 7, 2012.

       The government appealed the judgment to the Federal Circuit, which
docketed its case as number 2012-5078. Mr. Paterek filed a brief prepared by Mr.
McHugh and Ms. Helen Sturm. Oral arguments were held on April 5, 2013,
during which Mr. McHugh argued for Mr. Paterek. Recording of oral argument,
available at http://cafc.uscourts.gov/oral-argument-recordings/all/paterek.html.

                                         3
       On June 19, 2013, the Federal Circuit issued an opinion reversing the
judgment of the Court of Federal Claims and remanded the case with instructions
that the Court of Federal Claims affirm the undersigned’s decision that Mr. Paterek
is not entitled to compensation. Paterek v. Sec’y of Health & Human Servs., 527
Fed.Appx. 875, 884 (Fed. Cir. 2013). A rehearing was denied on August 16, 2013.

II.    Pending Motion for Attorneys’ Fees and Costs
       On January 13, 2014, Mr. Paterek filed the pending motion for attorneys’
fees and costs. Mr. Paterek seeks a total of $661,685.50 in attorneys’ fees and
$60,465.77 in costs.1 The attorneys’ fees and costs can be divided into the
following:

               Summary of Requested Attorneys’ Fees and Costs
               Phase                      Fees                                    Costs
First Entitlement                           $148,760.00                             $2,000.00
First Motion for Review                        $4,225.00                                $0.00
Second Entitlement                           $86,043.75                             $3,000.00
Second Motion for Review                     $36,328.00                             $1,155.47
Damages                                     $164,906.50                            $51,310.30
Interim Fees                                 $15,493.50                                 $0.00
Federal Circuit                             $175,701.00                                 $0.00
Final Fees                                   $30,277.75                                 $0.00
Total Requested Fees & Costs:               $661,685.50                            $60,465.77

        Several aspects of this fee request for attorneys’ fees and costs stand out.
First, the costs during the first entitlement stage are minimal because they were
already reimbursed in the October 26, 2011 Interim Fees Decision. Second, Mr.
Paterek has not requested compensation for all the work his attorney performed on
the first motion for review. Presumably, this omission reflects the “billing
judgment” of the attorney in light of the Court’s instruction for the special master
“to consider the court’s observations in any fee application submitted by
Petitioner’s counsel.” Doe 21, 84 Fed. Cl. at 50 n.57. Third, the amount of
attorneys’ fees requested for the damages phase exceeded what is typical in the
Vaccine Program. An estimated $60,000 to $70,000 in attorneys’ fees plus an
additional $30,000 to $40,000 in costs was incurred on resolving the issue of

       1
        Mr. Paterek submitted documentation to support his claim of costs for three of the four
people discussed in the Interim Fee Decision. He withdrew his claim with respect to the fourth.

                                               4
annuity versus lump sum compensation. Fourth, the amount requested for work at
the Federal Circuit also was more than normal. Fifth, the amount requested in
preparing the final application for attorneys’ fees was also quite high.

       Evidently, the Secretary also had concerns about the amount of the request
for fees and costs because the parties discussed the fee application for several
months. After these communications, Mr. Paterek amended his application to
request the reduced sum of $450,000.00. The Secretary did not object to an award
of attorneys’ fees in this amount.

       The reduced request is still among the largest awards of attorneys’ fees made
by this special master. Therefore, the undersigned has reviewed the request
notwithstanding the apparent concessions Mr. Paterek made to the Secretary. See
Savin v. Sec'y of Health & Human Servs., 85 Fed. Cl. 313, 318 (Fed. Cl. 2008)
(concluding that a special master can review fee applications sua sponte).

       As the abbreviated procedural history suggests, this case is unusual in
multiple respects. These factors contributed to the duration of the case and the
number of hours an attorney would reasonably spend litigating the case. In
addition, Mr. Paterek’s attorney (Mr. McHugh) practices in New York City and,
therefore, is compensated at the rate prevailing in the forum (Washington, D.C.).
See Rodriguez v. Sec'y of Health & Human Servs., 632 F.3d 1381 (Fed. Cir. 2011)
(ruling that the special master was not arbitrary in setting Mr. McHugh’s hourly
rate). Such factors contribute to the large amount of fees requested.

       Under these uncommon circumstances, the amount of fees and costs
requested in the amended application --- which Mr. Paterek reduced by nearly 40
percent --- is reasonable. Although a more searching inquiry of the original fee
request may have resulted in an amount different from (either higher than or lower
than) the negotiated amount, the compromise between the parties has achieved a
“rough justice” in the award of attorneys’ fees and costs that the Court finds to be
appropriate. Fox v. Vice, 131 S.Ct. 2205, 2210 (2011).

III.   Conclusion

       After reviewing the request, the Court awards a check jointly payable to
petitioner and his counsel, John F. McHugh, Esq, in the amount of $450,000.00,
for attorneys’ fees and other litigation costs. The Court thanks the parties for their
cooperative efforts in resolving this matter.

                                           5
       The Clerk shall enter judgment accordingly.2

       IT IS SO ORDERED.

                                                     s/Christian J. Moran
                                                     Christian J. Moran
                                                     Special Master

       2
          Pursuant to Vaccine Rule 11(a), the parties can expedite entry of judgment by each
party filing a notice renouncing the right to seek review by a United States Court of Federal
Claims judge.

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