STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MIRIAM LARA, M.D., )

)

Petitioner, )

)

vs. ) Case No. 02-2768F

)

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Respondent. )

)

SUMMARY FINAL ORDER

This case is before Administrative Law Judge John G.

Van Laningham on Respondent’s Motion for Summary Final Order on Petition for Attorney’s Fees (the “Motion”).

APPEARANCES

For Petitioner: Gonzalo Alberto Gayoso, Esquire

1050 Spring Garden Road Miami, Florida 33136

For Respondent: L. William Porter II, Esquire

Agency for Health Care Administration 2727 Mahan Drive, Building 3

Tallahassee, Florida 32308-5403 STATEMENT OF THE ISSUE

Whether, under the Florida Equal Access to Justice Act, Petitioner is entitled to recover from Respondent a so-called “fees for fees” award——that is, an award of attorney’s fees and costs in compensation for the litigation expenses incurred in

successfully prosecuting her entitlement to an earlier fees award.

PRELIMINARY STATEMENT

Petitioner Miriam Lara, M.D. (“Lara”) initiated this proceeding by filing an application for attorney’s fees and costs with the Division of Administrative Hearings (“DOAH”) on June 17, 2002. She seeks to recover from Respondent Agency for Health Care Administration (the “Agency”) an award of attorney’s fees and costs pursuant to Section 57.111, Florida Statutes, which is also known as the Florida Equal Access to Justice Act (“FEAJA”). Specifically, Lara is requesting an award for the fees and costs she incurred in an earlier FEAJA proceeding in which the Agency was ordered to pay Lara $15,000.

On August 27, 2002, the Agency filed its Motion, arguing therein that Lara cannot prevail in this action as a matter of law based on the undisputed facts. Lara timely filed a memorandum in opposition to the Motion. (She also had submitted, with her fees application, a substantial memorandum of law in support of the request, and this earlier paper has been considered.) The Motion is ripe for adjudication on the papers.

Upon consideration, for the reasons given below, it is ORDERED that the Motion is granted.

UNDISPUTED FACTS

1. In May 2001, Lara timely filed with the Agency a request for hearing to challenge the Agency’s decision, communicated to her in a letter dated April 13, 2001, to terminate Lara’s participation in the Florida Medicaid Program. The Agency referred the matter to DOAH, initiating Case No. 01- 2789 (the “Underlying Proceeding).

2. On September 18, 2001, the Agency voluntarily “withdrew” its April 13, 2001, letter, effectively rescinding the preliminary agency action against Lara. Upon receiving notice of this development, DOAH’s file in the Underlying Proceeding was closed. (Much later, on May 23, 2002, the Agency entered a Final Order formally rescinding the action taken against Lara.)

3. On November 26, 2001, having prevailed in the Underlying Proceeding, Lara filed with DOAH an application for attorney’s fees and costs pursuant to FEAJA, wherein she alleged that the Agency’s action against her had not been substantially justified. Thus was Case No. 01-4669F (the “First FEAJA Suit”) opened.

4. On April 2, 2002, a Final Order was issued in the First FEAJA Suit in which Lara was awarded $15,000——the maximum amount recoverable under FEAJA.

5. On June 17, 2002, Lara filed another application for attorney’s fees and costs, giving rise to the instant proceeding (the “Second FEAJA Suit”). In the Second FEAJA Suit, Lara seeks an award of attorney’s fees and costs for having successfully prosecuted the First FEAJA Suit. Lara is hoping, in other words, to obtain a so-called “fees for fees” award.

   CONCLUSIONS OF LAW

   
   

6. The Division of Administrative Hearings has personal and subject matter jurisdiction in this proceeding pursuant to Sections 57.111(4), 120.569, and 120.57(1), Florida Statutes.

7. The Administrative Law Judge has final order authority in cases brought under FEAJA. See Section 57.111(4)(d), Florida Statutes. Thus, a summary final order should be issued, upon motion, when the “administrative law judge determines from the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, that no genuine issue as to any material fact exists and that the moving party is entitled as a matter of law to the entry of a final order.” Section 120.57(1)(h), Florida Statutes.

8. Under FEAJA, unless otherwise provided by law, a reasonable sum for “attorney’s fees and costs”1 shall be awarded to a private litigant when all five of the following predicate findings are made:

   1. An adversarial proceeding was “initiated by a state agency.”2

   2. The private litigant against whom such proceeding was brought was a “small business party.”3

   3. The small business party “prevail[ed]” in the proceeding initiated by a state agency.4

   4. The agency’s actions were not substantially justified.

   5. No special circumstances exist that would make the award unjust.

      See Section 57.111(4), Florida Statutes.

      
      

9. The purpose of FEAJA is to “diminish the deterrent effect” exerted by the expense of legal proceedings, which discourages “certain persons” from challenging “unreasonable governmental action.” Section 57.111(2), Florida Statutes (emphasis added). Emphasis should be placed on the verb “diminish” to highlight the fact that the legislature clearly did not intend to remove the impediment of attorney’s fees and costs from the path of resistance to unjustified governmental action. Consonant with the legislature’s modest goal, FEAJA provides that “[n]o award of attorney’s fees and costs for an action initiated by a state agency shall exceed $15,000.” Section 57.111(4)(d)2., Florida Statutes (the “Cap”).

10. In a FEAJA suit for fees, the private party bears the burden of proving elements 1 through 3 (as enumerated in paragraph 9 above). If he succeeds, then the burden shifts to the state agency to disprove either element 4 or element 5 by affirmatively demonstrating that its actions were substantially justified or that an award of fees would be unjust under the circumstances. See Helmy v. Department of Business and Professional Regulation, 707 So. 2d 366, 368 (Fla. 3d DCA 1998).

11. At the outset, it will be seen that, for Lara to prevail, the First FEAJA Suit must be determined to have been a separate and distinct proceeding——an action, in other words, which began with an event independent of the clear point of entry that triggered the Underlying Proceeding.5 Were this not so——that is, if the First FEAJA Suit were merely an indivisible component of the Agency-initiated Underlying Proceeding6——then Lara’s present attempt to recover fees would be legally untenable, because even assuming (without deciding7) that an award of “fees for fees” is permissible under FEAJA, the total award of attorney’s fees and costs for a single action initiated by a state agency cannot exceed $15,000, and it is undisputed that Lara has received the maximum award available under the Cap for the Underlying Proceeding.8

12. But even if the First FEAJA Suit were determined to be a separate and distinct proceeding, Lara still would need to

    establish that the Agency initiated the First FEAJA Suit. Thus, a negative answer to a relatively narrow question would dispose of this case. That question is: Assuming (without deciding9) that the First FEAJA Suit was an independent proceeding, did the Agency initiate such proceeding?

13. In deciding this potentially dispositive issue, the starting point is the statute, which (as previously mentioned) defines the term “initiated by a state agency” to mean that the agency:

    1. Filed the first pleading in any state or federal court in this state;

       
       

    2. Filed a request for an administrative hearing pursuant to chapter 120; or

       
       

    3. Was required by law or rule to advise a small business party of a clear point of entry after some recognizable event in the investigatory or other free-form proceeding of the agency.

       
       

       Section 57.111(3)(b), Florida Statutes.

       
       

14. Because the first two categories are clearly inapplicable,10 the First FEAJA Suit could be considered an Agency-initiated proceeding only if the Agency were required to provide Lara with a clear point of entry into a FEAJA proceeding. For three reasons, it is concluded that the Agency was not so required.

15. First, FEAJA itself imposes no such burden upon the Agency. Presumably, if the legislature had intended to require

    agencies to advise their victorious small business opponents of the right to seek fees and costs under FEAJA, it would have said so explicitly in FEAJA; the statutory silence suggests a contrary legislative intent.11

16. Second, Lara has not cited——and the undersigned is not aware of——any other law or rule that requires an agency specifically to provide a prevailing small business party with a clear point of entry into a FEAJA proceeding.

17. Third, and finally, general clear-point-of-entry principles did not require the Agency to notify Lara of her right to pursue an award of fees and costs under FEAJA.

18. The purpose of requiring a clear point of entry is to ensure that a person whose substantial interests are to be determined by an agency is afforded a meaningful opportunity to be heard, either formally (when material facts are disputed) or informally (when the material facts are not in dispute) before final agency action is taken. Thus, as a general rule, an agency must give an affected party timely notice of the right to request a hearing and the time limits for doing so. E.g. Florida League of Cities, Inc. v. Administration Commission, 586 So. 2d 397, 413 (Fla. 1st DCA 1991).

19. Here, once the Agency rescinded its proposed decision to terminate Lara’s participation in the Florida Medicaid Program, thereby making her a prevailing small business party,12

    the Agency could take no further action adverse to Lara’s substantial interests in that particular matter. More important, the Agency had no jurisdiction to award Lara attorney’s fees and costs, the authority to do that having been delegated to DOAH exclusively.13

20. General principles regarding the provision of a clear point of entry do not require an agency having no jurisdiction in a matter to notify a party of its right to initiate administrative proceedings before another agency that does. Thus, when the Agency surrendered to Lara in the Underlying Proceeding, it was not required to inform her of the right under FEAJA to file an application for attorney’s fees and costs with DOAH.

21. Thus, it is concluded that, assuming for argument’s sake the First FEAJA Suit was an independent proceeding, such suit was not “initiated by a state agency” but by Lara.

22. Accordingly, no factual circumstances exist under which Lara could be awarded attorney’s fees and costs for prosecuting the First FEAJA Suit. As a matter of law, the Second FEAJA Suit is doomed to fail.14

CONCLUSION

Based on the foregoing undisputed material facts and legal conclusions, it is ORDERED that Lara take nothing by this proceeding, and that the Agency shall go hence without day.

It is further ORDERED that: (a) the final hearing scheduled for September 10, 2002, is canceled; and (b) Lara’s Motion to Strike Affidavit of Agency Attorney William Porter is denied as moot.

DONE AND ORDERED this 6th day of September, 2002, in Tallahassee, Leon County, Florida.

JOHN G. VAN LANINGHAM

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 6th day of September, 2002.

ENDNOTES

1/ Under FEAJA, “[t]he term ‘attorney's fees and costs’ means the reasonable and necessary attorney's fees and costs incurred for all preparations, motions, hearings, trials, and appeals in a proceeding.” Section 57.111(3)(a), Florida Statutes.

2/ FEAJA provides that “[t]he term ‘initiated by a state agency’ means that the state agency” did (or was required to do) one of three things: (1) “[f]iled the first pleading in any state or federal court in this state; (2) “[f]iled a request for an administrative hearing pursuant to chapter 120;” or (3) “[w]as required by law or rule to advise a small business party of a clear point of entry after some recognizable event in the investigatory or other free-form proceeding of the agency.” Section 57.111(3)(b), Florida Statutes.

3/ “The term ‘small business party’ means:

1.a. A sole proprietor of an unincorporated business, including a professional practice, whose principal office is in this state, who is domiciled in this state, and whose business or professional practice has, at the time the action is initiated by a state agency, not more than 25 full-time employees or a net worth of not more than $2 million, including both personal and business investments; or

b. A partnership or corporation, including a professional practice, which has its principal office in this state and has at the time the action is initiated by a state agency not more than 25 full-time employees or a net worth of not more than $2 million; or

2. Either small business party as defined in subparagraph 1., without regard to the number of its employees or its net worth, in any action under s. 72.011 or in any administrative proceeding under that section to contest the legality of any assessment of tax imposed for the sale or use of services as provided in chapter 212, or interest thereon, or penalty therefor.” Section 57.111(3)(d), Florida Statutes.

4/ “A small business party is a ‘prevailing small business party’ when:

1. A final judgment or order has been entered in favor of the small business party and such judgment or order has not been reversed on appeal or the time for seeking judicial review of the judgment or order has expired;

2. A settlement has been obtained by the small business party which is favorable to the small business party on the majority of issues which such party raised during the course of the proceeding; or

3. The state agency has sought a voluntary dismissal of its complaint.” Section 57.111(3)(c), Florida Statutes.

5/ Lara argues that the Agency initiated “these proceedings” by initiating the Underlying Proceeding. If, however, Lara were correct in this regard (an issue that need not be decided herein), then the First FEAJA Suit would need to be viewed as an event within the Underlying Suit——and subject to the same

$15,000 Cap, which has been reached. Her argument, in short, is self-defeating. (The suggestion, if any, that the Agency initiated multiple independent proceedings by providing the clear point of entry that led to the Underlying Proceeding is rejected out of hand. As a matter of law, when, on April 13, 2001, the Agency afforded Lara a clear point of entry with respect to the decision to terminate her from the Medicaid Program (as it was legally required to do), the Agency initiated

one action. While an action such as the Underlying Proceeding might, perhaps, someday be deemed to include a subsequent FEAJA claim so that the two interrelated proceedings may be considered “an [i.e. a single] action initiated by a state agency” for purposes of Section 57.111 (and, especially, the Cap), it is impossible to conceive of the clear point of entry into the underlying action as being also an invitation to launch another, separate action under FEAJA (for which a separate Cap would apply). After all, since the outcome is unknown when the underlying action is initiated, it would be premature, if not preposterous, for the state agency simultaneously to provide a clear point of entry into a FEAJA proceeding.)

6/ There is no dispute that the Agency initiated the Underlying Action. See Section 57.111(3)(b)3., Florida Statutes.

7/ Because Lara recovered $15,000 in the First FEAJA Suit without reference to the fees and costs she incurred in that proceeding, it is not necessary to decide here whether a “fees for fees” award may be made when the attorney’s fees and costs associated with the litigation on the merits amount to less than

$15,000.

8 / Lara asserts that “[a]s a matter of statutory construction, the use of the singular article ‘a’ [in the definition of the term “attorney’s fees and costs”] means that the legislature intended to limit the [$15,000] cap to each proceeding, not all proceedings that arise from one set of facts.” Pet. Mem. of Law. in Support at 3 (emphasis in original). This statement is only partially true——and wholly irrelevant. The Cap indeed does not apply to all proceedings that arise from one set of facts; FEAJA says nothing about cases stemming from common factual predicates. But this does not mean (as Lara suggests) that a separate Cap applies to each proceeding that happens to arise from one set of facts. The right of recovery under FEAJA obtains (and hence the Cap applies) only in a proceeding “initiated by a state agency”——and these last five words make a world of difference. Thus, when multiple proceedings arise from the same facts, the agency is potentially liable for fees and costs only in the proceeding(s) that it initiated——and then only for a maximum of $15,000 in each such proceeding.

9/ As just discussed in the preceding text, Lara cannot prevail in the Second FEAJA Suit unless the First FEAJA Suit is deemed a separate and distinct proceeding. If she also cannot prevail should the First FEAJA Suit be deemed a separate and distinct

proceeding, then Lara simply cannot win here, regardless whether the First FEAJA Suit is considered a part of, or a matter apart from, the Underlying Proceeding.

10/ No pleading was filed in any state or federal court in connection with the First FEAJA Suit, and it was Lara’s application for attorney’s fees, which she filed with DOAH, that constituted a request for an administrative hearing in that matter (assuming that that matter was an independent proceeding). See Section 57.111(4)(d), Florida Statutes (hearing shall be conducted upon application for attorney’s fees).

11/ Reinforcing this straightforward presumption is that FEAJA requires the private litigant to file an application for fees “within 60 days after the date [of becoming] a prevailing small business party,” see Section 57.111(4)(b)2., Florida Statutes—— not, tellingly, within 60 days after being notified by the defeated state agency of the winner’s FEAJA rights, as would likely be the case were the agency required to give such notice.

12/ See Section 57.111(3)(c)3., Florida Statutes.

13/ See 57.111(4)(d), Florida Statutes. In civil cases, exclusive jurisdiction to determine a request for fees under FEAJA is vested in the court that conducted the underlying action.

14/ Lara’s reliance on cases interpreting the federal Equal Access to Justice Act is misplaced. The federal EAJA may be analogous to FEAJA, but it is not identical to Florida’s law. The federal statute, in fact, differs in at least two significant respects that render it inapposite for present purposes. First, the federal EAJA does not impose an absolute cap on awards (although it does generally limit the hourly rate upon which an attorney’s fees award may be based, to $125). 28

U.S.C. § 2412(d)(2)(A)(ii). Second, federal law does not restrict the availability of relief to proceedings “initiated by” the government but instead permits the recovery of fees and other expenses in civil actions “brought by or against the United States.” 28 U.S.C. § 2412(d)(1)(A).

COPIES FURNISHED:

Gonzalo Alberto Gayoso, Esquire 1050 Spring Garden Road

Miami, Florida 33136

L. William Porter, II, Esquire

Agency for Health Care Administration 2727 Mahan Drive, Suite 3431

Tallahassee, Florida 32308-5403

Virginia A. Daire, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Suite 3431

Tallahassee, Florida 32308-5403

William Roberts, Acting General Counsel Agency for Health Care Administration 2727 Mahan Drive, Suite 3431

Tallahassee, Florida 32308-5403

Rhonda M. Medows, M.D., Secretary Agency for Health Care Administration 2727 Mahan Drive, Suite 3116

Tallahassee, Florida 32308-5403

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is entitled to judicial review pursuant to Section 120.68, Florida Statutes. Review proceedings are governed by the Florida Rules of Appellate Procedure. Such proceedings are commenced by filing the original notice of appeal with the Clerk of the Division of Administrative Hearings and a copy, accompanied by filing fees prescribed by law, with the District Court of Appeal, First District, or with the District Court of Appeal in the Appellate District where the party resides. The notice of appeal must be filed within 30 days of rendition of the order to be reviewed.

Docket for Case No: 02-002768F

Orders for Case No: 02-002768F