Summary of the 1972 Amendment to the Longshore Act Regarding Attorneys’ Fees

It is sort of a slow news day, so here is a little slice of history.  In 1972, the Longshore and Harbor Workers’ Compensation Act underwent a substantial amendment.  Attorneys’ fees were one of the focuses of the amendments.  Here is what Mr. Thomas Eagleton (from the Committee on Labor and Public Welfare) said in his September 14, 1972 report about Longshore attorney’s fees:

S. 2318 amends section 28 of the Act to authorize assessment of legal fees against employers in cases where the existence or extent of liability is controverted and the claimant succeeds in establishing liability or obtaining increased compensation in formal proceedings or appeals.  Attorneys fees may only be awarded against the employer where the claimant succeeds, and the fees awarded are to be based on the amount by which the compensation payable is increased as a result of litigation.  Attorneys fees may not be assessed against employers (or carriers) in other cases.

In all cases, the amount of attorneys fees payable to the claimants lawyer (either by the employer or the claimant) is subject to approval by the deputy commissioner, hearing examiner, board or court, as the case may be.

Further explanation of the attorney fee shifting provision can be found later in the report:

Section 13 amends section 28.

Subsection (a) would require the award of an attorney’s fee payable by the employer if the employer had refused payment of compensation and the employee had hired an attorney to successfully prosecute the claim.  The fee would be approved by the deputy commissioner, Board, or Court, as applicable.

Subsection (b) would require an informal conference before the deputy commissioner if the employer offered to pay compensation without an award and there was a controversy over the amount of compensation.  The deputy commissioner would recommend a settlement.  If the employer refuses the settlement, he must offer to pay the amount he thinks is due.  If the employee refuses that offer, hires an attorney and obtains an award greater than that offer, he shall be awarded an attorney’s fee based on the amount of the increase payable by the employer.  The latter provision for attorneys’ fees shall not apply when the controversy relates to degree or length of disability and the employer or carrier agree to submit the case to doctors chosen as provided for in section 7(e) and offer to pay an amount based on the medical report.  However, if such an award is being reviewed by the Review Board or a court and there are findings favorable to the employee, the Review Board or court may award a reasonable attorney’s fee payable by the employer or carrier.  No attorney’s fee may be assessed against the employer in any other case.

Subsection (c) provides that in any proceedings before the Review Board or a court, the Board or the court shall approve the attorney’s fee for work done before it by the attorney for the employee.

Subsection (d) provides that where the employer or insurance carrier is required to pay an attorney’s fee, they may also be required to pay costs and fees for the attendance of witnesses: such fees must be approved by the deputy commissioner.

Subsection (e) provides that failure to obtain approval of an attorney’s fee for representation of employees is made an offense punishable by a fine of $1,000 or imprisonment for one year or both.

Chief Judge of Benefits Review Board to Retire

Hon. Nancy S. Dolder, Chief Judge of the Benefits Review Board, has announced her retirement effective April 30, 2014.  Judge Dolder was appointed as one of the five members of the BRB in 1985.  She served as Acting Chairman and Chief Judge from 1993 to 1994, and was appointed Associated Deputy Secretary for Adjudication in 1998, having management and administrative oversight of the three appellate adjudicatory boards in the Department of Labor.  She developed the strategy to reduce case backlogs in those agencies, long known for lengthy delays in deciding cases and issuing decisions.  Then Secretary of Labor Elaine Chao named her Chair and Chief Judge of the BRB in 2001.

Prior to her federal service, Judge Dolder was Chief Counsel for the California State Teachers Retirement System and the TEachers Retirement Fund, one of the largest public investment funds in the country.  She was in private practice in California for several years prior.

Judge Dolder was a strong proponent of legal education, serving for seventeen years on the Advisory Board of Loyola Law School’s Annual Longshore Conference.  She will be missed in the longshore community.  We wish her and her husband, Carl, a long and happy retirement.

The BRB Went on an Attorney Fee Tear in Early 2014

Did anyone else notice that the Benefits Review Board went on a tear in January and February 2014 with respect to Longshore attorney fee decisions?  See below:

Leffard v. Eagle Marine Servs., BRB No. 13-0199 (Jan. 17, 2014) (addressing hourly rate, fee petition evidence, and time spent preparing a response to employers’ objection to claimant’s counsel’s fee petition).

Richey v. Premiere, Inc., BRB No. 13-0216 (Jan. 17, 2014) (affirming award of Section 28(a) fees for failing to pay compensation within 30 days).

Modar v. Maritime Servs. Corp., BRB No. 13-0319 (Jan. 17, 2014) (affirming district director’s decision to “enhance counsel’s attorney’s fee for services performed in 2004 and 2005 by using 2008 hourly rates rather than 2012 hourly rates….”).

Huggins v. Massman Traylor Joint Venture, BRB N. 13-0223 (Jan. 28, 2014) (affirming ALJ’s reduction of fees by 30% based on claimant’s limited success in obtaining benefits.).

Keniston v. Crowley Marine Services, BRB No. 13-0197 (Jan. 31, 2014) (addressing hourly rate, fee petition supporting evidence, and “escalating routing discovery disputes with unnecessary filings that waste the time of both parties and the court.”).

Oleska v. CSX Transp., Inc., BRB No. 13-0400 (Feb. 18, 2014) (reversing award of Section 28(b) fees because claimant did not receive “greater compensation” as a result of the ALJ proceeding).

Petitt v. Sause Bros., BRB No. 13-0330 (Feb. 26, 2014) (affirming inter alia district director’s method for calculating claimant’s counsel’s hourly rate on a delayed payment claim).

And finally, the Sallyport Global Services claims, all of which are interrelated:

Khudhaier v. Sallyport Global Servs., BRB No. 13-0342 (Feb. 7, 2014) (vacating fee award based on procedural deficiencies at the ALJ level);

Kadim v. Sallyport Global Servs., BRB No. 13-0346 (Feb. 12, 2014) (same);

Al-Maliki v. Sallyport Global Servs., BRB No. 13-0343 (Feb. 18, 2014) (same);

Ali v. Sallyport Global Servs., BRB No. 13-0344 (Feb. 18, 2014) (same);

Younis v. Sallyport Global Servs., BRB No.13-0349 (Feb. 20, 2014) (same);

Yaseen v. Sallyport Global Servs., BRB No. 13-0345 (Feb. 27, 2014) (same); and

Shamkhi v. Sallyport Global Servs., BRB No. 13-0350 (Feb. 28, 2014) (same).

Fourth Circuit Denies LHWCA Attorney’s Fees Because Compensation Was Paid Within 30 Days

In a new, important Longshore and Harbor Workers’ Compensation Act (“LHWCA”) decision, the Fourth Circuit addressed Section 928(a) attorney’s fees and the meaning of “compensation” for that statute.

In Lincoln v. Dir., OWCP, the employee filed a hearing loss claim on May 24, 2011.  Two days later, the employer filed a notice of controversion explaining that it accepted the fact that the employee’s hearing loss was noise-induced, but that it need additional information to determine the correct disability payment.  The OWCP did not formally serve notice of the claim on the employer until June 14, 2011.  Then, on July 7, 2011, the employer voluntarily paid the employee $1,256.84, amounting to compensation for “0.5% [binaural] hearing loss” and the equivalent of one week of PPD pay under the maximum compensation rate.  Ultimately the claim settled for the value of a 10% binaural hearing loss.

The issue in this case arose when the employee’s attorney filed an attorney fee petition against the employer.  The employer opposed the petition saying that it paid disability benefits within 30 days of receiving official notice of the claim.  The district director agreed.  So did the BRB and the U.S. Court of Appeals for the Fourth Circuit.

The LHWCA’s attorney fee provision, 33 U.S.C. § 928, states in pertinent part:

(a) If the employer or carrier declines to pay any compensation on or before the thirtieth day after receiving written notice of a claim for compensation having been filed from the deputy commissioner, on the ground that there is no liability for compensation within the provisions of this Act, and the person seeking benefits shall thereafter have utilized the services of an attorney at law in the successful prosecution of his claim, there shall be awarded, in addition to the award of compensation, in a  compensation order, a reasonable attorney’s fee against the employer or carrier in an amount approved by the deputy commissioner, Board, or court, as the case may be, which shall be paid directly by the employer or carrier to the attorney for the claimant in a lump sum after the compensation order becomes final

(b) If the employer of carrier pays or tenders payment of compensation without an award pursuant to section 14(a) and (b) of this Act, and thereafter a controversy develops over the amount of additional compensation, if any, to which the employee may be entitled, the deputy commissioner or Board shall set the matter for an informal conference and following such conference the deputy commissioner or Board shall recommend in writing a disposition of the controversy.  If the employer or carrier refuse to accept such written recommendation, within fourteen days after its receipt by them, they shall pay or tender to the employee in writing the additional compensation, if any, to which they believe the employee is entitled.  If the employee refuses to accept such paymeent or tender of compensation, and thereafter utilizes the services of an attorney at law, and if the compensation thereafter awarded is greater than the amount paid or tendered by the employer or carrier, a reasonable attorney’s fee based solely upon the difference between the amount awarded and the amount tendered or paid shall be awarded in addition to the amount of compensation.

For Section 928(a), the term “any compensation” is unambiguous.  If the employer pays claimant some compensation, the employer is not liable for Section 928(a) fees.  Here, the Fourth Circuit recognized that “the medical evidence establishing the extent of the claimant’s injury, and thus the amount of his benefits, is often in flux and cannot be ascertained with any degree of certainty within 30 days.  Section 928 provides an employer a safe harbor: if it admits liability for the claim by paying some compensation to the claimant for a work-related injury and only contests the total amount of the benefits, it is sheltered from fee liability under § 928(a).”

Section 928(b) applies when the parties disagree as to the total amount of compensation.  The Fourth Circuit strictly construes Section 928(b) as requiring: “(1) an informal conference, (2) a written recommendation from the deputy or Board, (3) the employer’s refusal to adopt the written recommendation, and (4) the employee’s procuring of the services of a lawyer to achieve a greater award than what the employer was willing to pay after the written recommendation.”  Here, the employee failed to request an informal conference—thus, his claim failed to qualify for Section 928(b) attorney’s fees.

When read together, Sections 928(a) and 928(b) plainly do not provide fees for every case where the claimant is successful.  Instead, “the structure of § 928 establishes that, until the claimant has exhausted the non-adversarial avenues for resolving his claim, he cannot avail himself of the fee-shifting provisions.”  In Lincoln, the payment of one week’s compensation within 30 days of having received official written notice of the claim prevented the assessment of Section 928(a) fees.  The employee’s attorney can still recover fees, but he can only recover Section 928(c) fees paid by his client.

The court also addressed whether the employer’s one-week payment was true “compensation.”  There was a case not too long ago (Green v. Ceres Marine Terminals) where the employer paid $1 in compensation and it was held that this was not a “true” compensation payment.  The Lincoln court distinguished Green, finding that the $1 payment in Green was “untethered to the underlying claim,” but that the $1,256.84 payment in Lincoln was “directly tied to Lincoln’s alleged injury.”

Considering the foregoing, the Fourth Circuit affirmed the denial of employer-paid attorney’s fees.

Lincoln v. Dir., OWCP, — F.3d —- (4th Cir. 2014).

Note: This link will take you to my previous post about the BRB’s Lincoln decision.