Sebelius v. Cloer

Issue

Is a claimant who filed a petition under the National Childhood Vaccine Injury Act of 1986 eligible to receive an award of reasonable attorneys’ fees and costs in connection with her lawsuit, given that the statute provides for recovery of attorneys’ fees, if a petition was brought on a reasonable basis and in good faith?

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Facts

In September and November of 1996 and 1997, Respondent Dr. Melissa Cloer received three vaccinations of Hepatitis-B (“Hep-B”). Prior to receiving the vaccinations, Cloer had no significant medical issues and was in generally good health. Shortly after the vaccinations, Cloer experienced sensations similar to electric shocks in the center of her back extending to her feet; these electric shocks are commonly known in the medical profession as Lhermitte sign, a common symptom of multiple sclerosis (“MS”). Cloer eventually lost feeling in her arm and hand. Further testing showed that Cloer possibly had MS, and in November 2003, she was officially diagnosed with the disease. At the time of her vaccinations, the medical industry has not yet discovered that any connection between Hep-B vaccines and MS existed. Cloer finally learned of the connection several years later in 2004, and in 2005, she filed her petition for compensation.

Cloer claimed that the Hep-B vaccinations aggravated her latent MS and sought compensation from the Department of Health and Human Services under the National Childhood Vaccine Injury Act of 1986, 42 U.S.C. §§300aa-1 to -34 (“Vaccine Act”). Although the statute of limitations for the Vaccine Act requires that claimants file their vaccine-related injury claims no later than 36 months after the first symptom of MS manifests itself, Cloer argued that the statute of limitations should be equitably tolled, as she was unaware of the connection between Hep-B vaccines and MS until years after her vaccination. Cloer further contended that if equitable tolling is not possible, she should at least get a reward for her attorneys’ fees and costs.

The Chief Special Master in the trial court rejected Cloer’s lawsuit because she did not file her petition before the expiration of the statute of limitations. The U.S. Court of Federal Claims upheld the Chief Special Master’s decision. Cloer then appealed to the U.S. Court of Appeals for the Federal Circuit, which reversed and remanded the case and held that Cloer’s petition was not to be rejected for failure to meet the statute of limitations requirement. Subsequently, the Federal Circuit Court granted a petition to rehear the case en banc and held that the statute of limitations of the Vaccine Act begins to run on the date of occurrence of the first manifestation of symptoms of any vaccine-related injuries. Essentially, the Federal Circuit Court decided that equitable tolling is available for petitions under the Vaccine Act, but such tolling is not available to Cloer because unawareness of a causal link between an injury and the administration of a vaccine is not sufficient to circumvent the statute of limitations. The Federal Circuit Court also remanded Cloer’s case to determine if her petition was reasonably filed and, as such, entitled to a reward of attorneys’ fees, which she sought in her appeal. Pursuant to 28 U.S.C. 1254(1), the Petitioner Sebelius then filed a writ of certiorari to the Supreme Court on August 22, 2012, and the Court granted the writ on November 20, 2012.

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Discussion

Petitioner Sebelius believes that allowing payment of attorneys’ fees for claimants who failed to timely file their petitions would undermine the efficiency of providing compensation through the Vaccine Act and also expose the claimant’s personal medical record to undue scrutiny. Respondent Cloer contends that such inefficiencies or breach of privacy issues will not exist because adjudication of untimely claims does not require courts to go beyond a simple examination of threshold or procedural matters of a case.

EFFICIENT RESOLUTION OF PETITIONS FOR VACCINE-RELATED INJURIES

Petitioner Sebelius argues that permitting fee awards for petitions that have not been timely filed would create inefficiencies fundamentally inconsistent with the Act’s design. Specifically, courts would be forced to conduct an informal trial to determine whether or not a claimant’s petition would have been successful had it not been filed after the statute of limitations had run. Sebelius asserts that this informal trial process is a painful and complex waste of judicial resources; furthermore, this waste goes against the goals of the Act, which was enacted by Congress to provide faster and more informal resolution of injury claims related to vaccinations and to circumvent the problems associated with bringing claims through the regular civil tort system. Sebelius further worries that permitting untimely claims to be considered for fee awards increases the number of untimely petitions and impedes the prompt resolution of claims that were filed before the expiration of the statute of limitations.

Respondent Cloer contends that the Act was meant to create efficiency for resolving claims related to vaccination injuries, and to disallow a claim’s petition for attorneys’ fees, even if the original claim upon which the fees were based was ultimately dismissed, would undermine this efficiency. In particular, such disallowance would hinder the public good of the Act and force claimants to fight their claims through the regular civil tort system, which is a slow process and at times very ineffective for resolving personal injury matters.

As to Sebelius’s argument about untimely petitions impeding resolution of appropriately filed claims, Cloer asserts that judicial interpretation of cases has established an easy process for courts to determine if an untimely claim has been reasonably filed and thus eligible for reward of attorneys’ fees. This easy process is quick and leaves courts with enough time leftover to resolve timely filed claims. Cloer believes that courts can decide if a claimant has filed a reasonable claim in good faith simply by examining the procedural aspects of a petition without ever needing to look at its actual merit. Also, due to ethical rules of the legal industry, lawyers will be reluctant to file indiscriminately and knowingly petitions that have clearly run the statute of limitations.

BREACH OF PRIVACY AND CONFIDENTIALITY OF MEDICAL INFORMATION

Sebelius argues that permitting reward of attorneys’ fees for untimely petitions creates undue injury to claimants’ personal life and medical privacy. Sebelius asserts that to make an accurate determination regarding the question of whether a claimant’s attorneys’ fees should be paid by the opponent, expert witnesses will need to be called, and the claimant’s various medical records and history will have to be revealed and discussed. Moreover, Sebelius asserts that family members will be called to testify about the medical condition of the claimant, and such occurrences are too probing of a claimant’s personal information. Although claimants who make timely claims will have their medical records exposed and examined as well, at least such claimants may win on their claims and receive compensation for themselves—not just for their attorneys’ fees.

Cloer responds that the filing of a petition itself is enough to expose a claimant’s medical history and personal information; as such, the mere request for fee awards or payment of attorneys’ fees does not in itself lead to breach of privacy concerns. This is true because upon filing of his or her claim, the claimant must supply the court with various medical records including records associated with the injury alleged and documents pertaining to pre- and post-injury medical test results and reports. In rebuttal to the Sebelius’s arguments about increased complexity of the claims process if fees can be awarded for untimely filed claims, Cloer contends that there will not be such complexity because experts and family members will not have to testify in court.

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Analysis

Petitioner Sebelius, the Secretary of Health and Human Services, argues that a person who files a petition under the National Vaccine Injury Compensation Program (the “Program”), which is subsequently dismissed as untimely, is not entitled to attorneys' fees and costs. Sebelius argues that the text, structure, and purpose of the National Childhood Vaccine Injury Act and three canons of statutory construction prove that the United States should not award attorneys' fees and costs in this case. Respondent Cloer, contends that the text, structure, and purpose of the Vaccine Act support her claim that the United States should grant attorneys' fees and costs for untimely petitions. Moreover, Cloer argues that the canons of construction that Sebelius relies on do not prove that the Vaccine Act does not permit an award of attorneys' fees and costs for an untimely petitioner.

ANALYZING THE TEXT, STRUCTURE, AND PURPOSE OF THE VACCINE ACT

Sebelius contends that the text of the Vaccine Act supports the claim that a person who files an untimely petition under the Vaccine Act is not entitled to attorneys' fees and costs. According to Sebelius, the Vaccine Act only permits fees and costs when the judgment on a filed petition does not grant such an award. Sebelius states that the Act declares that a petition cannot be filed for compensation after the deadline for filing the petition has passed. Therefore, Sebelius argues that under the Vaccine Act a petition dismissed as untimely is not a petition because it was not actually filed.

Cloer argues however, that the language and structure of the Vaccine Act favors an award of attorneys' fees and costs to a person who filed an untimely petition. Cloer notes that the Vaccine Act offers attorneys' fees and costs to petitioners with only two exceptions: 1) if the petition was not brought in good faith and 2) if there was not a reasonable basis for the claim in the petition. Therefore, Cloer argues, the language of the Vaccine Act makes no reference to an exception for untimely petitions. Cloer attacks Sebelius’ argument that “petition” within the act means a timely filed petition. Specifically, Cloer claims that to be considered “filed” under the Vaccine Act, two requirements must be met and neither of them concerns the timeliness of the filing.

Sebelius asserts that the Program was intended to make evaluating a claim under the Vaccine Act easier and awarding attorneys' fees and costs for an untimely petition would complicate the Program. Specifically, Sebelius claims that by having a deadline to file a petition under the Vaccine act, a special master can simply determine claims that are filed too late by looking at the date of filing and thus will not have to consider the merits of the petition. If untimely petitions could potentially lead to an award of attorneys' fees and costs, a special master would waste time having a trial to determine whether the petition had any merits, which Sebelius contends would be inefficient and thus contrary to the purpose of the Vaccine Act.

In response, Cloer argues that the purposes of the Vaccine Act support her argument. Cloer contends that a special master only has to determine whether a petition was brought in good faith and with a reasonable basis and that both of these determinations are fairly easy. Furthermore, Cloer argues that a special master does not need to hold a separate trial to make these determinations but can simply determine the merits of a petition based on writing filings alone. Cloer asserts that the purpose of the Vaccine Act is to encourage people to file petition and Sebelius’ interpretation of the Act would actually undermine this purpose.

INTERPRETING CANONS OF CONSTRUCTION

Sebelius claims that three canons of statutory construction support her viewpoint that a person who filed an untimely petition should not receive attorneys' fees and costs. The first canon of construction that Sebelius considers is the principle of sovereign immunity. Sebelius argues that a claim under the Vaccine Act is a suit against the United States and thus sovereign immunity is waived in order to enable such claims. According to Sebelius, the principle of sovereign immunity should be construed so as to limit this waiver as much as possible. The second canon of construction that Sebelius analyzes is the presumption that an act does not contravene the common law. Specifically, Sebelius asserts that awarding persons who file untimely petitions compensation from the United States would be an extreme departure from the common law, which generally dictates that each party is responsible for its own fees. Finally, Sebelius contends that the canon of construction that promotes avoidance of extensive and complex fee litigation supports her argument. According to Sebelius the Supreme Court has previously construed ambiguous language in fee-shifting statutes so as to avoid extensive and complex fee litigation.

Cloer responds that Sebelius’s argument about the use of canons of construction do not prove that attorneys' fees and costs should not be awarded after an untimely petition. Cloer claims that the canons of construction that Sebelius relied on are not as relevant to this case as is the canon that remedial legislation should be construed liberally. Cloer claims that one purpose of the Vaccine Act is to encourage attorneys to represent petitioners who might not succeed on their claims and that only by construing the Vaccine Act liberally can this purpose be fulfilled. Cloer argues that the principle of sovereign immunity is unnecessary here because by interpreting the Vaccine Act according to its purpose, any ambiguity is resolved. Furthermore, Cloer does not believe that the sovereign immunity principle should even apply in this case because under the Vaccine Act, the United States is acting like a private entity providing insurance when the government pays a petitioner’s fees. Cloer then attacks Sebelius’s argument about the common law by noting that the Vaccine Act already departs from the common law by explicitly providing for the United States to award attorneys' fees and costs for petitions that are denied. Finally, Cloer reasserts that awarding a person who filed an untimely petition under the Vaccine Act would not lead to extensive and complex litigation.

Sebelius replies to Cloer’s claim that the principle of sovereign immunity does not apply by arguing that the United States is not acting as a commercial insurer because the funding comes from Congress’s power to collect taxes. In other words, the funding comes from an excise tax on certain vaccines and the United States is thus not acting as a private entity. Sebelius responds to Cloer’s comments about the common law by arguing that because the Vaccine Act departs from the common law in other areas, the Supreme Court should be careful about extending this departure to more areas of the act.

FUNCTION OF THE STATUE OF LIMITATIONS

Cloer asserts that Sebelius’s argument misconstrues the Vaccine Act’s statute of limitations. According to Cloer, Sebelius believes that the statute of limitations acts as a jurisdictional bar – meaning that the special master would be unable to assert jurisdiction over the Vaccine Act petitions because untimeliness would bar such jurisdiction – to the filing of an untimely petition because Sebelius argues that even if an untimely petition is actually filed the law does not recognize the petition as having been filed. Cloer contends that based on the Supreme Court’s precedent, the statute of limitations does not present a jurisdictional provision. She further argues that certain sections of the Vaccine Act also prove that the statute of limitations is not a jurisdictional provision based on the wording of the act and Congressional intent.

Sebelius responds by arguing that holding that an untimely petition is not actually filed does not implicate a jurisdictional issue. First, Sebelius contends that any court has the jurisdiction to resolve its own jurisdiction and decide if it has jurisdiction over the petition. Furthermore, she asserts that special masters have been granted broad jurisdiction to decide whether to grant or deny petitions, which enables them to determine whether a petitioner legally filed for attorneys' fees and costs.

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Conclusion

The Supreme Court's decision in this case will determine whether costs for attorneys' fees will be granted to claimants who file untimely petitions under the National Childhood Vaccine Injury Act. Based on the text, structure, and purpose of the Vaccine Act, as well as three canons of construction, Sebelius concludes that a person should not be awarded compensation for an untimely petition filed under the Vaccine Act. Cloer also examines the text, structure, and purpose of the Vaccine Act and argues that the Vaccine act does not create an exception preventing compensation for untimely petitions. The Court's decision will affect patients' privacy and the benefits and efficiency of resolving tort claims through the National Vaccine Injury Compensation Program.

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