BRB No. 99-921
CLAUDE O. WEAVER )
)
Claimant-Petitioner )
)
v. )
) DATE ISSUED: 06/01/2000
INGALLS SHIPBUILDING, )
INCORPORATED )
)
Self-Insured ) DECISION and ORDER
Employer-Respondent ) EN BANC
Appeal of the Compensation Order - Denial of Attorney's Fees of Jeana F.
Jackson, District Director, United States Department of Labor.
Mitchell G. Lattof, Sr. (Lattof & Lattof, P.C.), Mobile, Alabama, for
claimant.
Traci Castille (Franke, Rainey & Salloum), Gulfport, Mississippi, for
self-insured employer.
Before: HALL, Chief Administrative Appeals Judge, SMITH, BROWN, and
McGRANERY, Administrative Appeals Judges, and NELSON, Acting
Administrative Appeals Judge.
NELSON, Acting Administrative Appeals Judge:
Claimant appeals the Compensation Order - Denial of Attorney's Fees (6-143287)
of District Director Jeana F. Jackson rendered on a claim filed pursuant to the
provisions of the Longshore and Harbor Workers' Compensation Act, as amended, 33
U.S.C. §901 et seq. (the Act). The amount of an attorney's fee
award is discretionary and will not be set aside unless shown by the challenging
party to be arbitrary, capricious, an abuse of discretion or not in accordance with
the law. See Roach v. New York Protective Covering Co., 16 BRBS 114 (1984).
This case is on appeal to the Board for the second time. On February 4, 1992,
claimant filed a claim under the Act for occupational hearing loss benefits.
Employer filed a notice of controversion on February 11, 1992. On February 12,
1992, employer received formal notice of the claim from the district director. On
September 3, 1992, employer voluntarily paid $154.11 in back compensation and
initiated biweekly permanent partial disability compensation payments under Section
8(c)(23) of the Act, 33 U.S.C. §908(c)(23). By letter dated October 6, 1992,
employer offered claimant $1,200 to settle all issues, including medical benefits,
plus $250 for an attorney's fee. Claimant refused the offer. On October 29,
1992, employer notified claimant's attorney that the claim had been accepted as
compensable based on a two percent impairment of the whole man, that claimant would
continue to receive $9.34 bi-weekly pursuant to Section 8(c)(23), and that employer
would pay all of claimant's medical expenses related to the hearing loss.
On March 17, 1993, the case was referred to the Office of Administrative Law
Judges for a formal hearing. On November 17, 1993, the administrative law judge
issued a decision awarding claimant permanent partial disability compensation for
a 5.01 percent binaural hearing impairment under Section 8(c)(13) of the Act, 33
U.S.C. §908(c)(13), plus interest.[1]
Subsequent to the issuance of the administrative law judge's decision,
claimant's attorney submitted a fee petition for services rendered between March
31, 1992 and March 22, 1993, at the district director level, requesting $1,140,
representing 6.5 hours at $150 per hour, plus 1.5 hours at a rate of $110 per hour.
In her Compensation Order, the district director denied the fee application in its
entirety, finding that no basis existed for imposing fee liability on employer
because employer had tendered a settlement offer of $1,200 which claimant had
refused and claimant was ultimately successful only in obtaining an award of
$396.10, which the employer had previously paid on August 13, 1993. Claimant
appealed the district director's denial of an attorney's fee to the Board.
The Board held that the district director erred in not holding employer liable
for a portion of claimant's attorney's fee, as it is undisputed that employer did
not voluntarily pay any benefits to claimant prior to September 3, 1992, more than
30 days after employer received formal notice of the claim from the district
director. Inasmuch as claimant's counsel was successful in establishing employer's
liability for disability and medical benefits which employer had initially refused
to pay, the Board held that employer is liable for a reasonable attorney's fee for
those services performed before the district director prior to September 2, 1992,
pursuant to Section 28(a) of the Act, 33 U.S.C. §928(a). Weaver v. Ingalls
Shipbuilding, Inc., BRB No. 97-710 (Feb. 13, 1998)(unpublished). The Board
held that as employer initiated voluntary payments of compensation as of September
3, 1992, the issue of employer's liability for the remainder of the claimed fee was
governed by Section 28(b) of the Act, 33 U.S.C. §928(b), and that because
claimant received less compensation than if employer had continued its voluntary
payments under Section 8(c)(23), employer was not liable for a fee under Section
28(b) for work performed after September 3, 1992. Accordingly, the Board vacated
the district director's Compensation Order insofar as it concerned work performed
prior to September 3, 1992, and remanded the case for the district director to
enter a reasonable fee for this work.
Before the district director issued her decision on remand, claimant's counsel
filed an amended fee application on March 5, 1998, stating that in view of the
Board's holding in Liggett v. Crescent City Marine Ways & Drydock Co., 31
BRBS 135 (1997) (en banc) (Smith and Dolder, JJ., dissenting), he was
amending the fee application of December 3, 1993, which formed the basis for the
first appeal, to include services performed before employer controverted the
claim.[2] Claimant's attorney submitted a fee
petition for additional services rendered at the district director level beginning
on February 4, 1992, the date the claim was filed, requesting an additional $770,
representing 4.4 hours at $175 per hour. Employer filed objections and claimant
filed a response to employer's objections. In her Compensation Order, the district
director reduced the hourly rate requested to $100, and awarded a fee of $440, of
which $150 was to be paid by employer, and $290, representing 2.9 hours at $100 per
hour, by claimant. The fees payable by claimant were those incurred prior to March
12, 1992, the 30th day after the district director gave employer formal notice of
the claim. In holding claimant liable for these services, the district director
relied on the Board's decision in Jones v. Chesapeake & Potomac Tel. Co., 11
BRBS 7 (1979)(Miller, J., dissenting in part), aff'd mem., No. 79-1458 (D.C.
Cir. Feb. 26, 1980), amended, (D.C. Cir. March 31, 1980).
In the case presently before the Board, claimant appeals the district
director's Compensation Order after remand. On appeal, claimant argues that, based
on Liggett, employer, not claimant, is liable for the entire fee awarded.
Employer responds, urging affirmance of the fee award. Employer concedes that
Liggett would appear to support claimant's position and require a reversal
of the district director's fee assessment against claimant, but it contends that
the basis for the Board's holding was rejected by the United States Court of
Appeals for the Fourth Circuit in Clinchfield Coal Co. v. Harris, 149 F.3d
307, 21 BLR 2-479 (4th Cir. 1998), aff'g on other reasoning Jackson v.
Jewell Ridge Coal Corp., 21 BLR 1-27 (1997) (en banc) (Smith and Dolder,
JJ., dissenting).
Section 28 of the Act states:
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 . . . .
33 U.S.C. §928(a) (emphasis added). Prior to the decision in Jackson,
21 BLR at 1-27, the Board had interpreted Section 28(a) as providing that
employer is liable for claimant's reasonable attorney's fee only for services
rendered to claimant after 30 days from the date employer received written notice
of the claim from the district director or, within the 30-day period, from the date
it declined to pay benefits, whichever came first. Claimant was liable for a
reasonable fee for services performed prior to employer's controversion of the
claim, or before the 30th day after the employer received written notice of the
claim from the district director. See, e.g., Watkins v. Ingalls Shipbuilding,
Inc., 26 BRBS 179 (1993), aff'd mem., 12 F.3d 209 (5th Cir. 1993)
(table); Luter v. Newport News Shipbuilding & Dry Dock Co., 19 BRBS 103
(1986); Baker v. Todd Shipyards Corp., 12 BRBS 309 (1980)(Miller, J.,
concurring in part and dissenting in part); Jones v. Chesapeake & Potomac
Telephone Co., 11 BRBS 7 (1979)(Miller, J., dissenting in part), aff'd
mem., No. 79-1458 (D.C. Cir. Feb. 26, 1980), amended, (D.C. Cir. March
31, 1980). This holding was premised on the interpretation of the word
"thereafter" in Section 28(a).
Upon reconsideration of the Board's prior decisions on this issue, a
majority of the Board held in Jackson that employers in cases arising under
the Title IV of the Federal Coal Mine Health and Safety Act of 1969, as amended,
30 U.S.C. §901 et seq. (the Black Lung Act), are to be held liable
pursuant to Section 28(a) for a fee for work performed prior to employer's
controversion of the claim once the conditions for shifting the fee to employer are
met, i.e., once employer has controverted the claim. The Board held that
this result follows from the decisions of the United States Supreme Court
regarding the award of a reasonable fee under federal fee-shifting statutes in
Hensley v. Eckerhart, 461 U.S. 424 (1983), and City of Burlington v.
Dague, 505 U.S. 557 (1992), noting the applicability of these cases to the
awards of an attorney's fee under Section 28 of the Act. See Anderson v. Director,
OWCP, 91 F.3d 1322, 30 BRBS 67(CRT) (9th Cir. 1996); Ingalls Shipbuilding, Inc. v. Director, OWCP
[Baker], 991 F.2d 163, 27 BRBS 14(CRT) (5th Cir. 1993); George Hyman Constr. Co. v. Brooks, 963 F.2d
1532, 25 BRBS 161 (CRT) (D.C. Cir. 1992); General Dynamics Corp. v. Horrigan, 848 F.2d 321, 21 BRBS
73(CRT) (1st Cir.), cert. denied, 488 U.S. 992 (1988). The Board thus held that:
the provisions about notice of a claim and declination to pay, plus the
utilizing thereafter of an attorney, plus a successful
prosecution of the claim simply trigger the liability of the employer
for a reasonable fee for all services rendered in the successful
prosecution of the claim, not only for the services rendered after the
date of notice of the claim and declination to pay.
Jackson, 21 BLR at 1-32 (emphasis in original). In Liggett, a
majority of the Board held that this rationale is equally applicable to cases
arising under the Longshore Act. 31 BRBS at 137-138.
In its decision in Clinchfield Coal Co. v. Harris, 149 F.3d 307, 21
BLR 2-479 (4th Cir. 1998),[3] the United States
Court of Appeals for the Fourth Circuit affirmed the result of the Board's
decision in Jackson, but not its rationale. The Fourth Circuit held that
the Board's reliance on the Supreme Court's decisions in Hensley and
Dague was misplaced, as those cases are inapposite to the issue of the
statutory interpretation of the word "thereafter" in Section 28(a), but instead
interpret the word "reasonable" in federal fee-shifting statutes. The court held
that pursuant to the regulation at 20 C.F.R. §725.367, an employer is liable
for pre-controversion attorney's fees only in those cases in which the Office of
Workers' Compensation Programs (OWCP) makes an initial determination that a
claimant's claim for black lung benefits is denied.
In my opinion, there is a compelling equitable argument for holding employers
liable for all legal services, including pre-controversion services, when it
refuses to pay benefits and the claimant ultimately is successful in obtaining
benefits. However, for approximately 20 years prior to the Board's decisions
in Jackson and Liggett, the Board's interpretation of Section
28(a) was that employers are liable for claimant's reasonable attorney's
fees only for services rendered to claimant after 30 days from the date
employer received notice of the claim from the district director, or within
the 30-day period, from the date it declined to pay benefits, whichever came
first. Claimants were liable for a reasonable fee for those services
rendered prior to employer's controversion of the claim, or before the 30th
day after the employer received written notice of the claim from the
district director. See Watkins v. Ingalls Shipbuilding, Inc., 26 BRBS
179 (1993), aff'd mem., 12 F.3d 209 (5th Cir. 1993) (table); Luter v.
Newport News Shipbuilding & Dry Dock Co., 19 BRBS 103 (1986); Baker v. Todd
Shipyards Corp., 12 BRBS 309 (1980)(Miller, J., concurring in part and
dissenting in part); Jones v. Chesapeake & Potomac Telephone Co., 11 BRBS
7 (1979)(Miller, J., dissenting in part), aff'd mem., No. 79-1458 (D.C. Cir.
Feb. 26, 1980), amended, (D.C. Cir. March 31, 1980). I do not preclude the
possibility that there may come a time when it is necessary to revisit the
statutory interpretation of the word "thereafter" in Section 28(a). However, in
light of the Fourth Circuit's decision in Harris, I do not believe that the
decisions in Hensley and Dague compel that revisit, nor do they
compel a reversal of the district director's apportionment of the attorney's fee
award in the instant case. Therefore I would affirm the district director's fee
award.
_________________________________
MALCOLM D. NELSON, Acting
Administrative Appeals Judge
HALL, Chief Administrative Appeals Judge, concurring:
I concur in the decision to affirm the district director's fee award in this
case, although I do so on differing grounds. In my opinion, the holding in
Liggett v. Crescent City Marine Ways & Drydock Co., 31 BRBS 135 (1997)
(en banc) (Smith and Dolder, JJ., dissenting), that an employer is properly
held liable for reasonable pre-controversion attorney's fees once it is determined
that liability shifts to the employer, remains a sound proposition as demonstrated
by the holding of the United States Court of Appeals for the Fourth Circuit in
Clinchfield Coal Co. v. Harris, 149 F.3d 307, 21 BLR 2-479 (4th Cir.
1998). Nonetheless, as this case arises within the jurisdiction of the
United States Court of Appeals for the Fifth Circuit which has addressed this
issue, albeit in an unpublished decision, I believe the Board is compelled to
follow the law of that circuit.
In Watkins v. Ingalls Shipbuilding, Inc., 26 BRBS 179 (1993), aff'd
mem., 12 F.3d 209 (table), No. 93-4367 (5th Cir. 1993), the Board held that,
pursuant to Section 28(a) of the Act, only written notice of the claim from the
district director, pursuant to 33 U.S.C. §919(b), triggers employer's
liability for an attorney's fee, even when employer had actual notice of the claim
from the claimant. The Board thus rejected the claimant's contention that employer
could be liable for claimant's attorney's fees for services performed prior to the
employer's receipt of the claim from the district director. In affirming the
Board's decision, the Fifth Circuit, in an unpublished decision, rejected the
claimant's argument that, pursuant to the strict interpretation of Section 28(a)
rendered by the Board in that case, it would be unfair to hold him responsible for
the payment of pre-controversion legal fees where employer had not been notified
of the claim by the district director for nearly eight months. The court stated
that claimant's contention had "no legal foundation" and that the "statute
preclude[d]" an award of attorney's fees against the employer which were incurred
by claimant prior to employer's receipt of written notice of the claim.
Watkins, No. 93-4367, slip op. at 2. The Fifth Circuit's rule
regarding the precedential value of its unpublished decision is that "Unpublished
opinions issued before January 1, 1996 are precedent." 5th Cir. Local R. 47.5.3.[4] Thus, as Watkins precludes employer's
liability for pre-controversion attorney's fees, and as this decision is the
controlling precedent in this case, I would affirm the district director's fee
award on this basis.
_________________________________
BETTY JEAN HALL, Chief
Administrative Appeals Judge
SMITH, Administrative Appeals Judge, concurring:
I concur in my colleagues' decision to affirm the district director's
determination that claimant is responsible for the payment of attorney's fees for
legal services rendered prior to the 30-day period following notification to
employer that a claim was filed. For the reasons stated generally in my dissent
in Liggett v. Crescent City Marine Ways & Drydock Co., 31 BRBS 135, 140
(1997) (Smith and Dolder, JJ., dissenting), I would continue to hold that an
employer cannot be held liable for pre-controversion attorney's fees based on the
long-held interpretation that in order to give full effect to the word "thereafter"
in Section 28(a) of the Act, employer's liability under Section 28(a) cannot
commence until 30 days after employer receives written notice of the claim from the
district director, or within the 30-day period, from the date it declines to pay,
whichever comes first. Id. at 140-141.
Moreover, the decision of the United States Court of Appeals for the Fourth
Circuit in Clinchfield Coal Co. v. Harris, 149 F.3d 307, 21 BLR 2-479 (4th
Cir. 1998), provides additional reasoning for overturning Liggett. In that
case, the court affirmed the Board's holding in Jackson v. Jewell Ridge Coal
Corp., 21 BLR 1-27 (1997) (en banc) (Smith and Dolder, JJ.,
dissenting), that employers were liable for pre-controversion attorney's
fees, but not on the rationale upon which the Board based its holding. The Fourth
Circuit adopted the position of the Director, OWCP, and held that pre-controversion fees should be payable by an employer only in those cases in which
the OWCP makes an initial determination that a claimant be denied black lung
benefits. Harris, 149 F.3d at 311, 21 BLR at 2-488. The court held that the
Supreme Court cases upon which the Board's majority relied, Hensley and
Dague, flesh out the word "reasonable" in federal fee-shifting statutes, and
are inapposite to the determination of whether the Section 28(a) allows the award
of pre-controversion fees to be shifted to an employer. The Fourth Circuit adopted
what it termed the Director's "reasonable and common sense" interpretation of an
"ambiguous fee-shifting scheme," which was not inconsistent with the Black Lung
regulation at issue, 20 C.F.R. §725.367(a).
I note that the procedure adopted by the court for shifting pre-controversion
fees to an employer is not applicable in cases arising under the Longshore Act, as
the district director in a Longshore case does not enter either an initial finding
of eligibility or ineligibility for benefits as occurs in a black lung case, see
20 C.F.R. §725.410, and which subsequently requires action on the part of
an employer. See 20 C.F.R. §§725.412, 725.413. Rather, the
proceedings before the district director in cases arising under the Longshore Act
are aimed at resolving the case through informal means. See 20 C.F.R.
§702.311. In the event that an informal conference held by a district
director does not resolve the claim, his or her recommendation is not admissible
in the formal proceedings. See 20 C.F.R. §§702.315, 702.316,
702.318. More importantly to the issue at hand, the employer is not required to
take any action in response to a recommendation of the district director. Thus,
the Harris decision does not support the conclusion that the Board's
interpretation of Section 28(a) prior to Liggett was incorrect. I note,
moreover, the Harris court's discomfort with its departure from its
precedent in Kemp v. Newport News Shipbuilding & Dry Dock Co., 805 F.2d
1152, 19 BRBS 50(CRT) (4th Cir.1986), which affirmed the Board's prior
interpretation of Section 28(a).[5] See
Harris, 149 F.3d at 310-311, 21 BLR at 2-487.
In its decision in Harris, the Fourth Circuit stated that the
interpretation the Director presented to the court was inconsistent with proposed
changes in the regulation at Section 725.367(a) that would hold an employer liable
only for post-controversion attorney's fees. Subsequent to the court's decision,
the Director proposed a different regulation applicable to cases arising under the
Black Lung Act that would hold the employer liable for claimant's pre-controversion
attorney's fees where it "took action, or acquiesced in action, that created an
adversarial relationship between itself and the claimant." The regulation
continues that such a relationship can be created, inter alia, when the
employer responds to an initial finding of eligibility, or by failing to respond
to an initial denial of eligibility. 64 Fed. Reg. 55035. My dissenting
colleagues cite this proposed regulation as continued support for their adherence
to Liggett, and suggest that this represents the Director's interpretation
for attorney's fee awards under the Longshore Act. This position is untenable for
several reasons. First, as stated above, the procedures in the proposed
regulation for finding the creation of an adversarial relationship are not present
in cases arising under the Longshore Act. Secondly, a proposed black lung
regulation is entitled to no deference in a claim under the Longshore Act. The two
programs are administered by the Director of OWCP, under separate program
regulations. The interpretation of the Director for the black lung program is not
necessarily the interpretation of the Director for the longshore program. Lastly,
and critically, the Secretary is free to alter the provisions of the Longshore Act
by promulgating regulations applicable under the Black Lung Act. See 30
U.S.C. §§932, 957; see also West v. Director, OWCP, 896 F.2d 308
(8th Cir. 1990). Accordingly it simply does not follow that the Longshore Act, as
applied to longshore cases, should be reinterpreted every time the Director
proposes new regulations for the Black Lung Program.
Furthermore, even if the Director's interpretation of Section 28(a) by way of
a proposed black lung regulation were entitled to deference in this case, his
position could not overcome circuit precedent. The Board's former interpretation
of Section 28(a) was accepted by the United States Courts of Appeals for the Fifth
Circuit, whose law is controlling in the instant case. See 5th Cir. Local
R. 47.5.3.[6] According to the Fifth Circuit,
[the Board] . . . properly applied the law as it is written in
denying compensation for attorneys' fees that were incurred before the
formal notice of claim was filed upon the employer by the district
director. Like the BRB, this court has no power to rewrite the statute.
Watkins v. Ingalls Shipbuilding, Inc., No. 93-4367, slip op. at 2
(emphasis added). Critically, the court concluded that, despite the "equitable"
appeal of claimant's argument, his "position has no legal foundation." Id.
Thus, I would continue to hold, consistent with the pre-Liggett line
of cases cited in my dissent in Liggett, that employer's liability under
Section 28(a) cannot commence until it controverts the claim within 30 days of
receiving notice of the claim from the district director, or following the
expiration of 30 days, whichever occurs first. Under Section 28(a) employer
"thereafter" is liable for claimant's reasonable attorney's fee. For these
reasons, I believe Liggett should be overruled, and I join in affirming the
conclusion that the district director properly found that claimant bears
responsibility for the payment of the pre-controversion attorney's fees in this
case.
ROY P. SMITH
Administrative Appeals Judge
BROWN and McGRANERY, Administrative Appeals Judges, dissenting:
We respectfully dissent. We would apply the majority's holding in Liggett
v. Crescent City Marine Ways & Drydock Co., 31 BRBS 135 (1997) (en banc)
(Smith and Dolder, JJ., dissenting), which is consistent with the Director's
interpretation of the statute as reflected in the proposed regulation. As a
result, we would vacate the district director's order that claimant is liable for
the pre-controversion attorney's fees and hold that employer is liable for the
entire attorney's fee award, because after employer controverted the claim it
became liable for a reasonable attorney's fee for all necessary work performed.
Our colleagues have made much of the fact that in Liggett the Board
abandoned an interpretation of 33 U.S.C. §928(a), which it had applied for
many years. The Board did not do so lightly. Further reflection on the attorney's
fee provision in the Longshore Act compelled a majority of the Board to hold that
an employer who is liable for an attorney's fee is liable for a reasonable fee for
all necessary work performed. As we pointed out in Liggett, Section 28(a)
limits the amount of the fee by the term "reasonable" and not by the date on which
the services are rendered. Liggett, 31 BRBS at 138. From the Supreme
Court's teaching in Hensley v. Eckerhart, 461 U.S. 424, 434 (1983), we know
that an attorney's fee is payable when the plaintiff is successful on the central
issue, and that a reasonable fee compensates for all the necessary work performed
to achieve that success. Obviously, the legal assistance provided in connection
with filing the claim would be compensated in a reasonable attorney's fee, but
employer and the majority insist that because that work was performed pre-controversion, claimant must bear that burden. This determination is, as we
explained in Liggett, in direct conflict with Section 28(d) of the Act which
makes plain that claimant's compensation should not be reduced by payment of an
attorney fee or related expenses incurred to establish his claim. 33 U.S.C.
§928(d) provides in pertinent part:
The amounts awarded against an employer or carrier as attorney's fees,
costs, fees and mileage for witnesses shall not in any respect affect
or diminish the compensation payable under this chapter.
(emphasis added). See Liggett 31 BRBS at 138. As the United States Court
of Appeals for the Third Circuit observed in Bethenergy Mines, Inc. v. Director,
OWCP, 854 F.2d 632, 636 (3d Cir. 1988), the attorney's fee provision of the
Longshore Act seems to have been designed to prevent placement of the burden for
any attorney's fee on claimant. Because our prior construction of Section 28 was
in conflict with both the terms and spirit of the statute, we overruled it.
We believe that the majority's decision to return to the Board's prior holding
and to impose liability on longshore claimants for attorney's fee work performed
prior to controversion is misguided. The majority has discussed the decision of
the United States Court of Appeals for the Fourth Circuit in Clinchfield Coal
Co. v. Harris, 149 F.3d 307, 21 BLR 2-479 (4th Cir. 1998), in which the court
relied upon the deference owed the Director's reasonable interpretation of the
statute and regulation, to affirm the Board's decision in Jackson v. Jewell
Ridge Coal Corp., 21 BLR 1-27 (1997) (en banc) (Smith and Dolder, JJ.,
dissenting), and by extension, Liggett. The court and Board held that pre-controversion fees are properly the liability of the employer once an "adversarial
relationship" arises.[7] In the cases before it,
which were black lung cases, the court held that such an adversarial relationship
was created once OWCP made an initial determination of ineligibility, prior to the
time that employer controverted the claim because employer would inevitably concur
in that denial and its controversion is essentially a ratification of the
Director's denial. The court thus affirmed the Board's holding in those cases,
that the employers were properly liable for the pre-controversion attorney's fees,
but the court rejected the Board's rationale after observing that the Director's
interpretation was entitled to "substantial deference" and the Board's
interpretation was not entitled to special deference. Harris, 149
F.3d at 307, 21 BLR at 2-483, citing PEPCO v. Director, OWCP, 449 U.S. 268,
278 n. 18 (1980).
Since longshore cases do not follow a procedure comparable to the initial
decision by the district director in black lung cases, an adversarial relationship
between a longshore claimant and employer cannot arise until employer either
controverts the claim or fails to take any action on the claim within thirty days
after the district director notifies it of the claim. 33 U.S.C. §928(a).
See Harris, 149 F.3d at 310, 21 BLR at 2-486. In the case at bar,
employer controverted the claim, thus, at that time the adversarial relationship
was created. The majority's holding that employer is not liable for an attorney's
fee for work performed prior to controversion is consistent with the interpretation
which the Director argued to the Fourth Circuit two years ago.
Since then, however, the Director has again reconsidered his interpretation
of the attorney's fee provision of the Longshore Act and now proffers an
interpretation identical to the Board's in Liggett. Under the Director's
new interpretation, the creation of an adversarial relationship and claimant's
successful prosecution of the claim are prerequisites for establishing employer's
liability for an attorney's fee, but, "the date on which the adversarial
relationship commenced will no longer serve as the starting point for such
liability." Summary of Noteworthy Proposed Regulations. 64 Fed. Reg. 54987
(1999). The Director now asserts that successful attorneys should obtain
reasonable fees for all of the necessary work they perform. Id. The
Director has rewritten his attorney fee regulation, 20 C.F.R. §725.367, to
reflect his new interpretation of the statute: "the fees payable under this section
shall include fees for reasonable and necessary services performed prior to the
creation of the adversarial relationship." 64 Fed. Reg. 55035 (1999)(proposed
October 8, 1999).
In light of the Supreme Court's teaching in Chevron U.S.A. v. National
Resources Defense Council, Inc., 467 U.S. 837 (1984) and its progeny, that
deference is owed to the Director in his interpretation of the Act which he
administers, the Director's interpretation is controlling unless employer can
demonstrate that it is "plainly erroneous." Mullins Coal Co. v. Director,
OWCP, 484 U.S. 135, 159-160 (1987); Harris, 149 F.3d at 310, 21 BLR
at 2-488. It is noteworthy that the Fourth Circuit adopted the Director's
interpretation in Harris, even though that interpretation conflicted with
a prior published decision of that court.[8] The
court did so because, as in the instant case, the Director had changed his
interpretation since the prior decision. The court observed that "an agency is
allowed to change its interpretation as long as its position is reasonable and does
not conflict with Congressional intent." Harris, 149 F.2d at 310, 21 BLR
at 2-487, quoting De Osorio v. INS, 10 F.3d 1034, 1042 (4th Cir. 1993).
Hence, having considered the terms and spirit of the attorney's fee provision of
the Longshore Act, 33 U.S.C. §928, as well as the Director's interpretation
reflected in the proposed regulation, we would hold that employer is liable for a reasonable attorney's fee for work performed prior to controversion.
Accordingly, we would vacate the administrative law judge's denial of a fee for work
before controversion and remand the case for the district director to order the
full fee requested, payable by employer.
JAMES F. BROWN
Administrative Appeals Judge
REGINA C. McGRANERY
Administrative Appeals Judge
To Top of Document
Footnotes.
1)Claimant appealed this decision. BRB No. 94-0468.
September 12, 1996, this case was administratively affirmed by the Board as it had
been pending for more than one year on that date. Pub. L. No. 104-134.
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2)Claimant's counsel also amended the fee application to reflect
1/10th of an hour instead of 1/4 of an hour billing increments, and to reflect
current hourly rates.
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3)The decision was rendered upon three consolidated black lung
cases.
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4)The Fifth Circuit itself recently noted this rule with regard
to the precedential value of its fee orders in Ingalls Shipbuilding, Inc. v. Director (OWCP)
[Biggs], No. 94-40066 (5th Cir. Jan. 12, 1995) (unpublished), and Ingalls Shipbuilding, Inc. v. Director, OWCP
[Fairley], No. 89-4459 (5th Cir. July 25, 1990) (unpublished). See Conoco, Inc. v. Director, OWCP [Prewitt],
194 F.3d 684, 689 n.2, 33 BRBS 187, 190 n.2 (CRT) (5th Cir. 1999).
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5) In Kemp v. Newport News Shipbuilding & Dry Dock Co., 805 F.2d 1152,
19 BRBS 50(CRT) (4th Cir. 1986), the claimant challenged the Board's interpretation
of Section 28(a) which held him responsible for the payment of attorney's fees for
pre-controversion legal services, asserting that the Board's ruling "place[d] an
onerous burden on a claimant [and] diminish[ed] the compensation payable . . . ."
805 F.2d at 1153, 19 BRBS at 52(CRT). The Fourth Circuit declared that "[the
Board's construction of Section 28(a)] is consistent with congressional intent that
disputes be resolved in the first instance without the necessity of relying on
assistance other than that provided by the Secretary of Labor [under Section 39(c),
33 U.S.C. §939(c)]." Kemp is cited by the United States Court of
Appeals for the Ninth Circuit in Todd Shipyards Corp. v. Director, OWCP
[Watts], 950 F.2d 607, 25 BRBS 65(CRT) (9th Cir. 1991). In that case, the
Ninth Circuit reversed the Board's holding, inter alia, that employer was
responsible for an attorney's fees pursuant to Section 28(b). The Ninth Circuit
ruled that the employer was not liable for the claimant's attorney's fee under
Section 28(b) in that case because there was no dispute after the informal
conference at which employer agreed that the claimant is entitled to permanent
total disability benefits. The case was remanded for consideration of employer's
liability under Section 28(a). In citing Kemp, the Ninth Circuit noted by
way of a parenthetical that the Fourth Circuit's decision indicates that "Congress
intended that disputes first be resolved without the parties having to rely on
assistance other than that provided by the Department of Labor." Watts, 950
F.2d at 611, 25 BRBS at 70(CRT).
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6)The opinion of my dissenting colleagues regarding the
precedential value of Watkins cannot be accepted. While the Fifth
Circuit's rule concerning the precedential value of unpublished decisions is
prefaced with the word "normally," this certainly does not preclude unpublished
decisions from being cited in other instances. Moreover, the Fifth Circuit has
previously chided the Board for not following unpublished circuit precedent. In
Ingalls Shipbuilding, Inc. v. Director, OWCP [Biggs], No. 94-40066 (5th
Cir. Jan. 12, 1995)(unpubl.), the court stated that the Board may not "contravene
circuit precedent" in declining to follow Ingalls Shipbuilding, Inc. v. Director, OWCP
[Fairley], No. 89-4459 (5th Cir. July 25, 1990)(unpubl.) regarding the court's ruling on the quarter-hour minimum
billing method. In Conoco, Inc. v. Director, OWCP [Prewitt], 194 F.3d 684, 689 n. 2, 33 BRBS 187, 190
n.2 (CRT)(5th Cir. 1999), the court cited both decisions in noting that they had been followed by the Board.
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7)Although the court spoke in terms of the Director's reasonable
interpretation of the regulation at 20 C.F.R. §725.367, this regulation is
virtually identical to Section 28(a) of the Act.
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8)We believe our colleagues' reliance on Watkins v. Ingalls
Shipbuilding, Inc., 26 BRBS 179 (1993), aff'd mem., 12 F.3d 209 (5th
Cir. 1993) (table), is misplaced and their citation of Watkins is
inappropriate in view of Rule 47.5.3 of the United States Court of Appeals for the
Fifth Circuit. Rule 47.5.3 provides in relevant part:
Unpublished opinions issued before January 1, 1996 are precedent.
However, because every opinion believed to have precedential value is
published, such an unpublished opinion should normally be cited only
when the doctrine of res judicata, collateral estoppel or law of the
case is applicable (or similarly to show double jeopardy, abuse of the
writ, notice, sanctionable conduct, entitlement to attorney's fees, or
the like).
It is clear both that the Watkins panel did not consider the decision's
holding had precedential value and that the case does not fall within any of the
exceptions for citation of unpublished decisions provided in the rule. Thus,
consideration of Watkins is not relevant to the decision in the case at bar.
In any event, the Director has developed a new interpretation of the statute since
the court issued Watkins.
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NOTE: This is an UNPUBLISHED LHCA Document.
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