A recent Law 360 story, “Vets Get $3.9M Fee Award After Previous PTSD Benefit Deal,” reports that the U.S. Court of Federal Claims on awarded nearly $3.9 million in attorneys’ fees to a class of more than 2,000 veterans who had previously settled with the Pentagon over allegations it wrongly downplayed their post-traumatic stress disorder-related disabilities.

The veterans, led by Michael Sabo, met all the necessary terms of the Equal Access to Justice Act, or EAJA, with the government having misapplied relevant laws and thus having failed to adequately justify its position both within and prior to the case, Judge Margaret M. Sweeney ruled, granting the veterans $3.86 million in fees and expenses.

“After duly evaluating the government’s positions, the court finds that the military’s failure to apply [the relevant disability rating schedule] to service members deemed unfit for duty due to PTSD ... despite the statutory requirement to do so was sufficiently unreasonable as to outweigh defendant’s fully justified decision to pursue a settlement with plaintiffs," Judge Sweeney said.

The Afghanistan and Iraq War veterans were all medically separated from the military between 2003 and 2008 due to PTSD, and each given disability ratings of less than 50 percent.  They sued in 2008, arguing the military had ignored statutory requirements when it failed to give them at least a 50 percent disability rating and related benefits.

The class was certified in 2009, and a settlement eventually reached in July 2011, with the government agreeing to give each class member the requested PTSD-related disability rating and related benefits, including retroactive reimbursement of their medical expenses.

As they worked to hash out the details of determining the final class and implementing the settlement, the veterans moved for attorneys’ fees and expenses under EAJA, which allows prevailing parties to claim fees against the government in certain circumstances.

The government had argued that the request was improper under the Antiassignment Act, questioning the language in a deal between Morgan Lewis & Bockius LLP attorneys working pro bono on the case — who had stated their intention to give any fees to “charitable and legal services organization” — and the veterans.

But, in addition to several examples of case law supporting the assignment of EAJA fees to attorneys, the government had previously acquiesced to the fee assignment in a joint notice of class action, effectively waiving that argument, and the veterans were otherwise entitled to recover fees and expenses under EAJA, Judge Sweeney ruled.

Having effectively received the relief they had asked for on their claims as part of the settlement deal, and with that deal having been approved by the court in December 2011, they can be considered the prevailing parties in the case, according to the opinion.  The fact that the settlement was voluntarily entered into by the government is irrelevant, the judge ruled.

And the government’s position in the case was not “substantially justified,” which could otherwise prevent the awarding of fees under EAJA, Judge Sweeney found.

For instance, the U.S. Department of Veterans Affairs’ Schedule for Rating Disabilities, or VASRD — which requires that a separation of service due to traumatic stress should result in an at least 50 percent disability rating — was in effect prior to the litigation and should been applied when assessing the class members, she said.

She added that once the case was actually being litigated, although the government's decision to settle the case was justified, it had dragged its feet on processing class members’ applications, despite saying it would do so expeditiously, which was not justified, and there was no other special circumstances that would otherwise block the award of attorneys’ fees.

Having decided a fee award was appropriate, Judge Sweeney rejected the government’s argument that the requested fee award should be reduced by 93 percent because it had largely acted properly throughout the period of the suit.

She awarded just under $2 million for work carried out through to approval of the settlement, and $1.875 million for supplemental work up through January 2015, after which the veterans agreed to waive any fee claim.

Morgan Lewis partner and class counsel Brad Fagg told Law360 they were pleased with the “correct and well reasoned” fee decision, while also expressing his thanks for the support of the firm — and many of its attorneys — in the pro bono case and reiterating the importance of the underlying settlement.

“We’re grateful for the court’s underlying assistance in getting the substantive relief for the more than 2,100 veterans who suffer from PTSD who are more deserving than words can describe for the benefits that they’re entitled to,” he said.

The case is Sabo et al. v. U.S., case number 1:08-cv-00899, in the U.S. Court of Federal Claims.