[Federal Register Volume 75, Number 153 (Tuesday, August 10, 2010)]
[Rules and Regulations]
[Pages 48274-48276]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-19633]


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DEPARTMENT OF JUSTICE

28 CFR Part 79

[CIV Docket No. 111; AG Order No. 3185-2010]
RIN 1105-AB33


Radiation Exposure Compensation Act: Allowance for Costs and 
Expenses

AGENCY: Civil Division, Department of Justice.

ACTION: Final rule.

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SUMMARY: By this rule the Department of Justice (``the Department'') 
amends its existing regulations implementing the Radiation Exposure 
Compensation Act (``RECA'' or ``the Act'') to conform to the decision 
of the Tenth Circuit in the case of Hackwell v. United States, 491 F.3d 
1229, 1241 (10th Cir. 2007). The Tenth Circuit held that the plain 
meaning of ``services rendered'' in section 9(a) of the Act revealed 
Congress' unambiguous intent to exclude ``costs incurred'' from the 
attorney fee limitation. Consequently, the court invalidated 28 CFR 
79.74(b) as ``contrary to the RECA's plain language.'' Accordingly, the 
Department is amending its regulation at Sec.  79.74(b) to strike the 
language ``including costs incurred'' from the agency's limitation on 
payments to attorneys representing claimants under RECA.

DATES: This rule is effective on: September 9, 2010. This final rule 
will apply to all claims pending with the Radiation Exposure 
Compensation Act Program (``the Program'') as of this date.

FOR FURTHER INFORMATION CONTACT: Gerard W. Fischer (Assistant 
Director), (202) 616-4090, and Dianne S. Spellberg (Senior Counsel), 
(202) 616-4129.


Background

    On October 5, 1990, Congress passed the Radiation Exposure 
Compensation Act. The Act offers an apology and monetary compensation 
to individuals (or their survivors) who have contracted certain cancers 
and other serious diseases following exposure to radiation released 
during above-ground atmospheric nuclear weapons tests or following 
their employment in the uranium production industry during specified 
periods. On July 10, 2000, the RECA Amendments of 2000 (``the 2000 
Amendments'') were enacted, providing expanded coverage to individuals 
who developed one of the compensable diseases in the Act, adding two 
new claimant categories (uranium millers and ore transporters), and 
lowering the amount of attorney's fees from 10% of the lump sum 
compensation award to 2% of the award in connection with the filing of 
an initial claim.
    On April 22, 2004, the Department promulgated revised regulations 
implementing the 2000 Amendments (codified as amended at 42 U.S.C. 2210 
note (2006)). Among other changes, the 2000 Amendments revised section 
9 of the Act to limit attorneys representing claimants before the 
program from receiving, ``for services rendered in connection with the 
claim,'' more than 2 percent of the final award for the filing of an 
initial claim, and more than 10 percent of the final award with respect 
to any claim filed prior to July 10, 2000, or resubmission of a denied 
claim. The Department implemented this statutory provision at 28 CFR 
79.74(b). Specifically, the Department interpreted ``services 
rendered'' to include ``costs incurred'' within the statutory 
percentage limit on the amount an attorney may receive from a 
successful claim.

The Hackwell Litigation

    On April 21, 2004, plaintiff Kim Hackwell alleged that her co-
plaintiff, a law firm, had refused to represent her because of Sec.  
79.74(b) of the Department's regulation. The plaintiffs challenged the 
regulation as contrary to section 9(a) of the RECA statute limiting 
attorney compensation for ``services rendered.'' In addition, 
plaintiffs argued the regulation was an invalid preemption of state 
law, and a violation of the Fifth and Tenth Amendments. The district 
court dismissed the suit for failure to state a claim, holding that the 
regulation was a ``reasonable interpretation'' of the statute and that 
the Department ``did not exceed its statutory authority in implementing 
Congress's compensation limitation.'' Hackwell v. United States, No. 
04-cv-00827-EWN (D. Colo. Sept. 28, 2005).
    On appeal, the Tenth Circuit held that the plain meaning of 
``services rendered'' in section 9(a) of the Act revealed Congress's 
unambiguous intent to exclude ``costs incurred'' from the attorney fee 
limitation. Consequently, the court invalidated Sec.  79.74(b) as 
``contrary to the RECA's plain language.'' Hackwell v. United States, 
491 F.3d 1229, 1241 (10th Cir. 2007). The case was remanded to the 
district court for further proceedings. In its July 23, 2008 remand 
decision, the district court enjoined the Department from enforcing 
Sec.  79.74(b) and directed that attorneys may recover expenses and 
costs from their clients even in regard to claims under the Act that 
are unsuccessful. Hackwell v. United States, No. 04-cv-00827-EWN, 2008 
WL 2900933, at *9 (D. Colo. July 23, 2008).
    The Department issued a Notice of Allowance for Costs and Expenses 
in the Federal Register on October 23, 2008, to announce its policy 
consistent with the decision in Hackwell. See Notice of Allowance for 
Costs and Expenses, 73 FR 63196 (Oct. 23, 2008). Accordingly, the 
Department no longer enforces its regulatory provision, 28 CFR 
79.74(b), prohibiting attorneys from receiving reimbursement for 
expenses and costs from their clients in connection with claims filed 
under the Act, in addition to the statutory attorney's fee. Moreover, 
attorneys may collect expenses and costs regardless of whether a claim 
is approved or denied.

Discussion of Changes Made by This Rule

    This rule finalizes the Department's announced intentions to revise 
the regulation published in its Notice of Allowance. Also, this rule 
conforms the Department's regulation at Sec.  79.74(b) with the Tenth 
Circuit's decision in Hackwell and the policy statement promulgated in 
the Department's October 23, 2008 Notice. Further, this rule strikes 
the language ``including costs incurred'' found in 28 CFR 79.74(b)(1), 
(2) and (3), and affirmatively excludes costs from the limitation on 
attorney reimbursement for ``services rendered.'' Finally, the rule 
permits attorneys to recover costs and expenses regardless of whether 
the claim is approved or denied.

Administrative Procedure Act

    This rule merely conforms Department regulations to the opinion of 
the Tenth Circuit and does not expand upon that opinion or the 
provisions of the Act. In addition, this rule complies with the 
injunction imposed by the District of Colorado and codifies the 
Department's intention to permit attorneys to receive reimbursement for 
expenses and costs

[[Page 48275]]

from their clients in connection with claims filed under the Act, in 
addition to the statutory attorney's fee. For the foregoing reasons, 
the Department finds that it would be unnecessary and contrary to the 
public interest to provide for notice and comment on this rule. 
Accordingly, the Department finds that good cause exists for exempting 
this rule from the provisions of the Administrative Procedure Act 
requiring notice of proposed rulemaking (5 U.S.C. 553(b)) and the 
opportunity for public comment (5 U.S.C. 553(d)).

Regulatory Flexibility Act

    The Attorney General, in accordance with the Regulatory Flexibility 
Act (5 U.S.C. 605(b)), has reviewed this regulation and by approving it 
certifies that this regulation will not have a significant economic 
impact on a substantial number of small entities for the following 
reasons: The rule affects claimants or beneficiaries in their 
individual capacity only. It does not affect small entities as that 
term is defined under 5 U.S.C. 601(6).
    Further, although the vast majority of claimants successfully file 
claims under the Act without the assistance of counsel, in the small 
number of claims where claimants desire the services of an attorney, 
this regulation will allow attorneys to recover expenses, which was 
previously prohibited.

Executive Order 12866

    This regulation has been drafted and reviewed in accordance with 
Executive Order 12866, ``Regulatory Planning and Review,'' section 
1(b), Principles of Regulation. Permitting attorneys representing 
claimants under RECA to recoup costs and expenses in addition to the 
statutory fee limitation will not lead to an annual effect of greater 
than $100,000,000 or have an adverse material effect on the economy or 
public welfare. Neither does this rule present any conflict with other 
federal law or regulation. This rule does not materially alter the 
budgetary impact of RECA entitlements because awards under RECA are set 
by statute and the Department of Justice does not anticipate a 
significant fluctuation in claim intake as a result of the revision. 
Moreover, the rule does not materially alter the rights and obligations 
of recipients of a RECA award because claimants retain the option to 
proceed with their RECA claim pro se. Finally, this action brings 
Department regulations into compliance with the Tenth Circuit's 
decision in Hackwell and does not raise novel legal issues arising out 
of legal mandates.
    Accordingly, the Department has determined that this rule is not a 
``significant regulatory action'' under Executive Order 12866, section 
3(f), Regulatory Planning and Review and therefore this rule has not 
been reviewed by the Office of Management and Budget.

Executive Order 13132

    This regulation will not have a substantial direct effect on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with Executive 
Order 13132, it is determined that this rule does not have sufficient 
federalism implications to warrant the preparation of a Federalism 
Assessment.

Executive Order 12988

    This regulation meets the applicable standards set forth in 
sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice 
Reform.

Unfunded Mandates Reform Act of 1995

    This regulation will not result in the expenditure by state, local, 
and tribal governments, in the aggregate, or by the private sector, of 
$100,000,000 or more in any one year, and it will not significantly or 
uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a ``major rule'' as defined by the Small Business 
Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 804 (2006). This 
rule will not result in an annual effect on the economy of $100,000,000 
or more, or significant adverse effects on competition, employment, 
investment, productivity, innovation, or on the ability of United 
States-based companies to compete with foreign-based companies in 
domestic and export markets. Moreover, this rule will not result in a 
significant increase in costs or prices for consumers, individual 
industries, government agencies or geographic regions because potential 
consumers of legal counsel for RECA claims retain the right to file pro 
se. In addition, to the extent the rule enables attorneys representing 
claimants or beneficiaries to provide more effective counsel, the rule 
may reduce costs or prices for consumers by enabling claimants to 
submit successful claims more efficiently on first filing.

Paperwork Reduction Act

    No additional information collection is associated with this 
regulatory revision.

List of Subjects in 28 CFR Part 79

    Administrative practice and procedure, Authority delegations 
(Government agencies), Cancer, Claims, Radiation Exposure Compensation 
Act, Radioactive materials, Reporting and recordkeeping requirements, 
Underground mining, Uranium mining, Uranium.

0
Accordingly, for the reasons set forth in the preamble, 28 CFR part 79 
is amended as follows:
0
1. The authority citation for part 79 continues to read as follows:

    Authority: Secs. 6(a), 6(i) and 6(j), Pub. L. 101-426, 104 Stat. 
920, as amended by secs. 3(c)-(h), Pub. L. 106-245, 114 Stat. 501 
and sec. 11007, Pub. L. 107-273, 116 Stat. 1758 (42 U.S.C. 2210 
note; 5 U.S.C. 500(b)).

0
2. In section 79.74, revise paragraph (b) to read as follows:


Sec.  79.74  Representatives and attorney's fees.

    (a) * * *
    (b) Fees. (1) Notwithstanding any contract, the attorney of a 
claimant or beneficiary, along with any assistants or experts retained 
by the attorney on behalf of the claimant or beneficiary, may not 
receive from a claimant or beneficiary any fee for services rendered in 
connection with an unsuccessful claim. The attorney of a claimant or 
beneficiary may recover costs incurred in connection with an 
unsuccessful claim.
    (2) Notwithstanding any contract and except as provided in 
paragraph (b)(3) of this section, the attorney of a claimant or 
beneficiary, along with any assistants or experts retained by the 
attorney on behalf of the claimant or beneficiary, may receive from a 
claimant or beneficiary no more than 2% of the total award for all 
services rendered in connection with a successful claim, exclusive of 
costs.
    (3)(i) If an attorney entered into a contract with the claimant or 
beneficiary for services before July 10, 2000, with respect to a 
particular claim, then that attorney may receive up to 10% of the total 
award for services rendered in connection with a successful claim, 
exclusive of costs.
    (ii) If an attorney resubmits a previously denied claim, then that 
attorney may receive up to 10% of the total award to the claimant or 
beneficiary for services rendered in connection with that subsequently 
successful claim, exclusive of costs.

[[Page 48276]]

Resubmission of a previously denied claim includes only those claims 
that were previously denied and refiled under the Act.
    (4) Any violation of paragraph (b) of this section shall result in 
a fine of not more than $5,000.
* * * * *

    Dated: August 2, 2010.
Eric H. Holder, Jr.,
Attorney General.
[FR Doc. 2010-19633 Filed 8-9-10; 8:45 am]
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