Archives for April 2010

Longshore Claimants Must Follow Administrative Scheme

The United States Court of Appeals for the Fifth Circuit issued a published Longshore and Harbor Workers’ Compensation Act (“LHWCA”) opinion wherein it dismissed a claimant’s appeal for lack of subject matter jurisdiction.  A longshore claim has three stages: “1) informal mediation before the district director; 2) formal hearings and fact-findings by an ALJ; and 3) appellate review by the [Benefits Review] Board (potentially followed by a circuit court).”  In Craven v. Director, OWCP, the claimant bypassed the ALJ stage and tried to appeal a district director’s informal recommendations directly to the Benefits Review Board.   This is “particularly problematic because the LHWCA grants the ALJ the exclusive authority to create an evidentiary record upon which an appeal must be based.”  If there is no evidentiary record, then there is nothing for the BRB to review.  And, if the BRB does not issue a final order, then the Court of Appeals lacks subject matter jurisdiction.

The Supreme Court Addresses Attorneys Fees and the Lodestar

On April 21, 2010, the Supreme Court of the United States released a significant attorney fee decision: Perdue v. Kenny A.  This decision, which addresses the calculation of attorney fees under a federal fee shifting statute, may be one of the most significant attorney fee decisions in some time.  Further, Perdue is applicable to the shifting of attorney fees under Section 28(a) and 28(b) of the Longshore and Harbor Workers’ Compensation Act, and by extension the Defense Base Act.   See, e.g., Newport News Shipbuilding & Cry Dock Co. v. Holiday, 591 F.3d 219, 227-28 (4th Cir. 2009); Jeffboat, LLC v. Director, OWCP, 553 F.3d 487, 489 (7th Cir. 2009); B & G Mining, Inc. v. Director, OWCP, 522 F.3d 657, 662-63 (6th Cir. 2008) (Black Lung Benefits Act).

The “lodestar” method is favored in federal courts for determining fees.  It “roughly” approximates the prevailing market value of an attorney had the attorney been billing on an hourly basis.  The question presented to the Court was “whether the calculation of an attorney’s fee…may be increased due to superior performance and results.” 

The Court provided six “rules” in support of its decision that while an enhancement is possible, there is a “strong presumption” that the lodestar calculation is reasonable in and of itself: (1) “a ‘reasonable’ fee is a fee sufficient to induce a capable attorney to undertake the representation of a meritorious…claim”; (2) “the lodestar method yields a fee that is presumptively sufficient to achieve” the objective identified in the first rule; (3) “enhancements [to the lodestar calculation] may be awarded in ‘rare’ and ‘exceptional’ circumstances”; (4) “an enhancement may not be awarded based on a factor that is subsumed in the lodestar calculation”; (5) “the burden of proving that an enhancement is necessary must be borne by the fee applicant”; and, (6) “a fee applicant seeking an enhancement must produce ‘specific evidence’ that supports an award.”

To be sure, the Court provides a few examples of situations in which an enhancement may be warranted, but the tenor of the decision is clear: enhancements to the lodestar calculation of a reasonable attorney fee must be few and far between, and there is a “strong presumption” that the lodestar calculation is reasonable. 

Annual GNOBFA Seminar

The Greater New Orleans Barge and Fleet Association’s annual River and Marine Industry Seminar will be held April 18-20, 2010. Information about the seminar can be found on GNOBFA’s website.

Vicarious Liabilty Not Extended to Accidental Shooting of Son’s Friend

A seventeen year old was accidentally shot by his friend while visiting the friend’s home.  The handgun belonged to the friend’s father, who normally kept the gun in his work truck.  The work truck was used in connection with the family businesses.  Plaintiffs filed suit and alleged that the handgun at issue was a “business tool” used for protection when the father travelled to and from job sites.  As a result, plaintiffs contended that the businesses were vicariously liable for the shooting.  The district court disagreed, and granted defendants’ Motion for Summary Judgment, dismissing the claims against the companies.

On appeal, plaintiffs alleged that even though the shooting occurred inside the home and not in the work truck, defendants’ liability nonetheless extended to inside the premises because the father regularly conducted business activities for the companies there.  Plaintiffs further argued that the father acted in the course and scope of his employment when he removed the loaded gun from his work truck and negligently left it in an unsafe place, where it was accessible to minors.

The father testified that he always carried a gun with him for personal protection, even on personal vacations.  He further stated that the gun belonged to him individually, and not the business.  He also denied having a home office, testifying that “sometimes” he would review business-related paperwork after his family went to bed.

In rejecting plaintiffs’ arguments, the Louisiana First Circuit held that the facts and circumstances did not warrant a conclusion that the negligent storage of the handgun in the residence was imputable to the gun owner’s employer.  The accident did not occur withing normal working hours, nor did it occur on business property.  The court concluded that because the handgun was personally owned by the father and because it was kept in the father’s personal residence for several days, any negligence in the handgun’s storage was likewise personal to the father only.

Drummond v. Fakouri,  — So. 3d —-, 2009 WL 4980378 (La. App. 1 Cir. 12/23/09).