During its last conference meeting before Thanksgiving, the U.S. Supreme Court on Tuesday added takings and attorney’s fee cases to its argument calendar. 

In Sebelius v. Cloer, the government is challenging a ruling by a deeply divided U.S. Court of Appeals for the Federal Circuit on when attorney’s fees can be awarded under the National Childhood Vaccine Injury Act of 1986.

The circuit, splitting 7-6, held that a person whose claim under the National Vaccine Injury Compensation Program is dismissed as untimely may recover a fee award and costs from the United States.

The Vaccine Act does not require success on the merits of a claim in order to award fees. So long as a special master or the court finds that a petition under the compensation program was brought in good faith and had a reasonable basis, the special master or court may award fees and costs.

Dr. Melissa Cloer filed a petition under the compensation program in 2005 alleging a link between her multiple sclerosis and three Hepatitis-B immunizations in 1996 and 1997. The Vaccine Act states that petitions for compensation must be filed before “the expiration of 36 months after the date of the occurrence of the first symptom or manifestation of onset or of the significant aggravation of” the alleged injury. She allegedly experienced her first symptom in mid-1997.

Although a special master dismissed her claim as untimely, a panel of the Federal Circuit reversed. The panel held that the Vaccine Act’s limitations period does not begin to run until there is objective medical recognition of a link between the claimed injury and the vaccine. In Cloer’s case, the panel concluded, such recognition had occurred no earlier than 2004. The en banc Federal Circuit reversed, but did hold that the statute of limitations is subject to equitable tolling, but not in Cloer’s case.

Cloer sought an award of $118,792.95 in attorneys’ fees and costs for proceedings in the Federal Circuit. The 7-6 majority, holding for Cloer, said the “[t]he good faith and reasonable basis requirements apply to the claim for which the petition was brought; this applies to the entire claim, including timeliness issues.”

The government contends the Federal Circuit ruling threatens the efficient functioning of the compensation program and will require “shadow trials” by special masters. Cloer’s counsel, Mari Bush of Denver’s Kaye and Bush counters that the award was consistent with the act’s plain language and the purpose of fee and cost awards.

Attorneys who represent Vaccine Act claimants are prohibited by the law from collecting fees apart from the fees paid from the Trust Fund created by the act.

In the takings case, Horne v. U.S. Dept. of Agriculture (USDA), a group of California grape vineyard operators was charged by the USDA with failing to set aside reserve-tonnage raisins during the 2002-2003 and 2003-2004 years. The Agricultural Marketing Agreement Act of 1937, and accompanying regulations, requires “handlers” of raisins to set aside a specified portion of their yearly raisin crop—known as “reserve-tonnage” raisins.

The reserve raisins are used in federal school lunch and other nutritional programs. The USDA determines compensation for the raisins. Horne’s counsel, Michael McConnell of Kirkland & Ellis, writes in the petition that in 2002-2003 and 2003-2004, handlers were required to set aside 47 percent and 30 percent of the crop, respectively, as reserve-tonnage raisins. For the 2003- 2004 year, the government determined that compensation for reserve-tonnage raisins was zero dollars—”i.e., petitioners received no compensation for the USDA’s appropriation of almost one-third of their crop.” For the 2002-2003 year, the government set a compensation price that was well below the cost of producing raisins, he writes. The USDA sought and recovered the dollar equivalent of the raisins that the group failed to give.

McConnell’s clients unsuccessfully raised the takings clause among other defenses in administrative proceedings and in federal district court. A Ninth Circuit panel ruled that it lacked jurisdiction over the takings issue. The panel ruled that the takings defense was premature and must be brought as a freestanding claim for compensation in a subsequent Tucker Act action in the Court of Federal Claims.

The raisin handlers ask the justices whether the Ninth Circuit was wrong in holding that a party may not raise the takings clause as a defense to a “direct transfer of funds mandated by the Government,” but instead must pay the money and then bring a separate, later claim requesting reimbursement of the money under the Tucker Act in the Court of Federal Claims.

The justices’ next conference is scheduled for Nov. 30.

Marcia Coyle can be contacted at mcoyle@alm.com.