In Success Is Not Enough to Obtain a Fee Under § 28(b),1 Paul B. Howell addresses old and new jurisprudence on the conditions for employer liability for claimants’ attorneys’ fees under § 28(b) of the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. § 928(b). He concludes that “a torrent of [recent] case law . . . denies an employer-paid fee . . . where [even] a successful claimant [has] fail[ed] to meet the mandatory requirements for a fee under § 28(b).”2 Not so fast.
Not Enough takes too little account of the history of the judicial implementation of the 1972 amendment that added the fee-shifting provision to § 28 of the Longshore Act. A closer look reveals that that history, and the changes in administrative practice that have grown up in the intervening decades, are more important than the few judicial decisions whose correctness Not Enough takes for granted have recognized. The fat lady hasn’t sung just yet.
As Not Enough describes it, “The left coast had looked to the purpose of this statute and consistently held” that the employer was liable for the claimant’s attorney fees and costs whenever it lost after contesting the claimant’s rights at least to the ALJ level. Not Enough at 2, citing National Steel & Shipbuilding Co. v. U.S. Dep’t of Labor, 606 F.2d 875, 882, 11 BRBS 68(CRT) (9th Cir. 1979), and Matulic v. Director, OWCP, 154 F.3d 1052, 1060, 32 BRBS 148(CRT) (9th Cir. 1998). But it concludes that as a result of recent developments that began with FMC Corp. v. Perez, 128 F.3d 908, 910, 31 BRBS 162(CRT) (5th Cir. 1997), and “turned to a torrent” in the last several years culminating in Pittsburgh & Conneaut Dock Co. v. Director, OWCP, 473 F.3d 253, 40 BRBS 73(CRT) (6th Cir. 2007) (2 to 1 decision), “everywhere except [in] the Ninth Circuit, a claimant must now meet the . . . mandatory elements for the award of an employer-paid attorney fee under § []28(b).” Not Enough at 2-3, citing decisions of the Fourth, Fifth, and Sixth Circuits discussed infra.
This, however, is an incomplete history of the issue. Except as an account of the Board’s current view on the subject, its assertions that “the courts have consistently held” several things turn out to be supported by at most two circuits’ recent authority – or by nothing but a Board decision designated not for publication.
Phase One: Peace and Justice and the Disappearing OWCP
First, “the left coast,” as Not Enough refers to the U.S. Court of Appeals for the Ninth Circuit, was not alone in holding in the first decade after enactment of amended § 28 that the critical factor under § 28(b) was simply that the claimant prevailed in formal proceedings. From the inception, the Board, agreeing with the administrative position of the Director, OWCP, had treated an OWCP recommendation unfavorable to the claimant (relatively rare at that time in comparison with the agency’s current practice, particularly in some district offices), or an OWCP decision to forego an informal conference because it would obviously be futile, as irrelevant to fee-shifting; if the employer, after having acknowledged and discharged some liability so that § 28(a) was inapplicable, disputed some further aspect of the claimant’s asserted rights and lost before an ALJ, it owed his or her attorney’s fees. Both the Senate and House committees that reported the bills that became the 1972 Amendments to the Act, which included the present form of § 28, stated in the summaries of “Major Provisions of the Bill” in their reports that the new § 28 would
. . . authorize assessment of legal fees against employers 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. Attorney fees may only be awarded against the employer where the claimant succeeds, and the fees to be awarded are to be based on the amount by which the compensation payable is increased as a result of litigation.
S. Rep. No. 92-1125, 92d Cong., 2d Sess. 8 (1972); H.R. Rep. No. 92-1441, 92d Cong., 2d Sess. 9 (1972), reprinted in 1972 Code Cong. & Admin. News 4698, 4706 (emphases added). The administrative construction gave effect to this intent. It treated the third sentence of § 28(b) – “If the employee refuses to accept [the employer’s] payment 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, 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” – as the critical one. The preceding sentences, concerning informal-conference recommendations, and the following sentence, concerning impartial evaluations of scheduled impairments, were treated as escape clauses – opportunities for the employer to avoid liability for fees by agreeing to the claimant’s entitlement without the need for formal proceedings – rather than as prerequisites to fee-shifting, in addition to the basic requirement that the claimant prevail in formal proceedings.
All the courts of appeals that addressed the matter in the first decade after the 1972 amendments recognized that amended § 28 and its legislative history demonstrate “what is clearly a congressional preference that attorneys’ fees not diminish the recovery of a claimant regardless of how close a case might be which is litigated but finally lost by a carrier.” Overseas African Construction Corp. v. McMullen, 500 F.2d 1291, 1298 (2d Cir. 1974). In cases in which the circumstances of successful legal services on behalf of a claimant did not fit closely with the particular subparts of the statute, courts accordingly avoided “a resolution that appears to run counter to the legislative intent that ‘attorneys’ fees not diminish the recovery of a claimant.’” Hensley v.
Washington Metropolitan Area Transit Authority, 690 F.2d 1054, 1057 (D.C. Cir. 1982). Accord, e.g., Oilfield Safety & Machine Specialties, Inc. v. Harman Unlimited, Inc., 625 F.2d 1248, 1257 (5th Cir. 1980) (§ 28 “ensures that an employee will not have to reach into the statutory benefits to pay for legal services, thus diminishing the ultimate recovery”). As the Fifth Circuit more fully explained:
Prior to 1972 an award of attorney’s fees in a case under the Act reduced the claimant’s compensation award; no statutory provision imposed liability upon the employer for a separate award of attorney’s fees. In 1972 Section 28 of the Act was amended to provide a claimant payment for legal fees in cases in which the existence or extent of liability is controverted and the claimant employs legal counsel and successfully prosecutes his or her claim. Hence, under current Section 28 a successful claimant receives the total amount of compensation due, and the employer must bear the expense of the litigation that resulted from its denial of the claim.
. . . Section 28(b) provides for attorney’s fees in situations in which the employer tenders partial compensation but refuses to pay the total amount claimed by the claimant, and the claimant uses the services of an attorney to successfully recover the total amount claimed.
Savannah Machine & Shipyard Co. v. Director, OWCP, 642 F.2d 887, 888-89 (5th Cir. 1981) (citations and footnotes omitted; emphases added).
This description of the general statutory plan matched other courts’ initial opinions addressing amended § 28. “[F]ees are awarded against an employer only in cases where the claim has been resisted and the claimant prevails.” Atlantic & Gulf Stevedores, Inc. v. Director, OWCP, 542 F.2d 602, 610 (3d Cir. 1976).3 As the Supreme Court described it in the context of the Black Lung Benefits Act,4 which incorporates § 28 (and most other procedural provisions) of the Longshore Act,5 “the Act provides that when the claimant wins a contested case the employer [or] his insurer . . . shall pay a ‘reasonable attorney’s fee’ to claimant’s lawyer.” United States Dep’t of Labor v. Triplett, 494 U.S. 715, 717 (1990) (emphasis added).
The Benefits Review Board early held, in accordance with the universally recognized legislative intent and the interpretation of the new § 28 by the Director, OWCP, that the reference in the second sentence of § 28(b) to an employer’s ill-founded rejection of a district director’s informal recommendation did not establish a precondition to employer fee liability. Rather, fees were also recoverable from the employer under the third sentence where the employer had made some payments; a dispute arose over what, if any, further compensation was due; and either the recommendation of the district director’s office went against the claimant, or the district director recognized the futility of a recommendation for informal resolution of the dispute and merely recommended that the case be resolved through formal proceedings before an ALJ, after which the claimant prevailed in formal litigation of the claim. E.g., Barber v. Tri-State Terminals, Inc., 3 BRBS 244, 251 (1976). Two courts of appeals were presented with direct challenges to this interpretation; each rejected the employer’s argument. Universal Terminal & Stevedoring Corp. v. Parker, 587 F.2d 608, 612 (3d Cir. 1978) (OWCP recommendation against claimant, who persisted and prevailed before ALJ); National Steel & Shipbuilding Co. v. United States Dep’t of Labor, 606 F.2d 875, 881-82 (9th Cir. 1979) (OWCP referred claim for ALJ disposition without informal-conference recommendation; “We do not believe that the statute contemplates the making of a written recommendation by the deputy commissioner as a precondition to the imposition of liability for attorney’s fees.”); see also Matulic v. Director, OWCP, 154 F.3d 1052, 1060-61 (9th Cir. 1998) (same; the intent of § 28 “to authorize the assessment of legal fees against employers in cases where the existence or extent of liability is controverted and the employee-claimant succeeds in establishing liability or obtaining increased compensation in formal proceedings in which he or she is represented by counsel” is applicable even if the employer did not reject an OWCP recommendation before the formal litigation in which the claimant prevailed, whether because OWCP made no recommendation or because the recommendation erroneously failed to recognize the claimant’s rights as subsequently established). That rule prevailed without further challenge – or change to the relevant provisions when Congress extensively amended the Act in 1984 – for more than two decades. See also Boland Marine & Mfg. Co. v. Rihner, 41 F.3d 997, 1006-07 (5th Cir. 1995) (approving fee award under § 28(b) without mention of existence or substance of OWCP recommendation).
Of course limits on the availability of fee-shifting under § 28(b) were always recognized. In the many cases in which the employer acknowledges continuing liability and it is only the appropriate rate of compensation (as determined by the worker’s “average weekly wage” and the extent of disability) that is disputed, only § 28(b) can apply, and the employer can avoid fee liability if it does not litigate unsuccessfully beyond the informal-conference stage. Where, for example, the employer continued to pay total-disability benefits but disputed only the claimant’s assertion that such disability had become permanent, and conceded even that point at the OWCP informal conference, the employer could not be held liable for a fee. Todd Shipyards Corp. v. Director, OWCP, 950 F.2d 607, 610-11 (9th Cir.1991). Likewise, where the attorney’s services were devoted to reaching a settlement with the employer without even invoking the OWCP informal-conference proceedings or formal litigation before an ALJ, the employer was not liable for a fee. FMC Corp. v. Perez, 128 F.3d 908, 910 (5th Cir. 1997).
It was thus established without continuing controversy before 1984, when Congress extensively amended the Act, and for over a decade thereafter, that where the claimant prevailed before the ALJ, the employer was liable for fees under § 28(b) without inquiry into what went on before the district director’s office. Although the 1984 amendments in several respects undid constructions of the 1972 amendments that had been announced since 1972 but which Congress judged contrary to its intentions, they made no change in § 28. In the twenty-five years that this simple principle governed, the OWCP’s exercise of a role of proactive enforcement of claimants’ rights withered. Informal conferences (and even more often recommendations for full dispositions) were often dispensed with as a futile waste of increasingly scarce OWCP resources where it appeared obvious that the parties were not going to reach agreement without the matter being settled by formal litigation. Further, the conference-and-recommendation process was more and more often delegated by the district directors to claims examiners. In cases that went forward to hearing, the recommendations were not determinative of anything, including fee liability, and the administrative structure did not treat them as of the same importance it would have if they had affected ultimate liability.
Phase 2: Turmoil (Forget Stare Decisis)
In James J. Flanagan Stevedores, Inc. v. Gallagher, 219 F.3d 426 (5th Cir. 2000), the court acknowledged the authority of the Ninth Circuit in National Steel and Matulic that an employer’s rejection of an informal recommendation is not a strict prerequisite to a fee award under § 28(b), but found that it need not reach the question. The employer had introduced “no record evidence with respect to the substance of the recommendation” to substantiate its contention that “the recommendation was complied with.” 219 F.3d at 435. The court reasoned that
[i]n any event, the record does establish that . . . after an informal conference and a recommendation, Gallagher used the services of an attorney to successfully recover an award of additional compensation. Under these particular circumstances, we find that the employer has failed to demonstrate that the ALJ erred in finding the conditions of § 928(b) satisfied.
Id. (emphasis added).
The first contrary ruling, however, came a few days later, in Staftex Staffing v. Director, OWCP, 237 F.3d 404, 408-09 (5th Cir. 2000), modified on reh’g, 237 F.3d 409 (2001). There another panel of the same court reasoned not only that an informal-conference recommendation, rejected by the employer, is a strict prerequisite to an award under § 28(b), but further (without analysis) that the informal conference and recommendation must have concerned the very issue that was successfully litigated before the ALJ. Thus, the employer could avoid fee liability for the claimant’s attorney’s services required by the employer’s unsuccessful litigation before the ALJ (and the Board and the court) if it conceded before the ALJ on the issue it had theretofore contested (in that case, continuing permanent total disability), but litigated a different issue that it had never raised before (there, the appropriateness of the wage-basis on which it had been paying, and belatedly agreed it was liable to continue, compensation). Only the court’s recognition on rehearing that the OWCP claims examiner had (fortuitously and atypically) included an indirect reference to the theretofore agreed average wage and consequent compensation rate in the informal recommendation saved the claimant from having to bear his own attorney’s fees for the employer’s extended litigation of the wage-basis issue that it had belatedly raised. 237 F.3d at 410.
In view of that recognition on rehearing, the court’s original statements that such an issue-specific recommendation was a prerequisite to § 28(b) fee liability was unnecessary to the decision, and obiter dictum rather than binding precedent. The issue-specificity requirement announced in the original opinion would require the claimant to add many months of delay before resolution of a disputed claim, by having the case remanded by the ALJ to the district director for another conference, in order to avoid having to bear his own legal expenses, whenever the employer added some new issue to the mix after the informal conference. In any event, in that case it was not the claimant, as the court said, but the employer who “failed to submit the average weekly wage dispute to informal conference and thus did not obtain a recommendation.” The unexplained issue-specificity rule suggested by Staftex would obviously be subject to abuse by employers seeking to pressure claimants faced with loss of their homes, cars, and families to accept settlements for less than the full value of their rights under the Act by injecting further delays into the already leaden-footed process of adjudication of disputes. The supposed requirement has no basis in the terms of the statute that the court otherwise insisted must be given full and literal effect. Staftex should not be regarded as binding precedent on the point.
The Fourth Circuit performed an abrupt about-face similar to that between Flanagan Stevedores and the original opinion in Staftex. In Newport News Shipbuilding & Dry Dock Co. v. Brown, 376 F.3d 245 (4th Cir. 2004), that court was faced with the question whether a claimant’s attorney could be awarded fees payable by the employer under § 28 for seeking twenty-percent augmentation of the compensation due under an ALJ’s award with which the employer did not timely comply, under § 14(f) of the Act, 33 U.S.C. § 914(f). Without any particularized analysis of which part of § 28 applied, the court held the employer liable:
Section 14(f)’s award for late payment is thus an integral part of the compensation package that the LHWCA provides for injured employees. As a result, if a claimant is forced to pay legal fees out of her own pocket to obtain a § 14(f) award, her compensation is diminished. Section 28’s fee-shifting provisions are designed to avoid that outcome. As the Fifth Circuit has said, § 28 “ensures that an employee will not have to reach into the statutory benefits to pay for legal services, thus diminishing the ultimate recovery.” Oilfield Safety and Mach. Specialties, [supra]. Denying attorney’s fees to an employee for obtaining a § 14(f) award would conflict with the Act’s basic purpose of compensating the employee for work-related injury in a timely manner.
Also, denying attorney's fees for collecting a § 14(f) award would no doubt discourage many claimants from ever seeking the benefit – full and timely compensation for injury – that § 14(f) was designed to provide. In many cases the additional twenty percent entitlement for late payment will be relatively small (it was $3500 here). If the employee has to pay her own legal fees to obtain the additional amount, she might well forgo the effort, for fees would soon eat up the award. Furthermore, without fee-shifting, an employer with cash flow problems or with a tendency to skirt the rules, would have less incentive to pay basic compensation awards on time.
376 F.3d at 250 (emphasis added).
Yet seven months later, the stated statutory design and purposes were deemed irrelevant in Virginia Int’l Terminals v. Edwards, 398 F.3d 313 (4th Cir.), cert. denied, 546 U.S. 960 (2005). The claimant there filed a formal claim within a week after his injury; the employer promptly instituted payments for temporary total disability, starting three days after the injury,6 and continued them until he was medically cleared for return to work. Several months later his attorney wrote the district director, asserting that he was entitled to compensation for the first three days following the injury, which had never been paid, and requesting that an informal conference be convened to address that issue alone. The OWCP claims examiner did not schedule a conference, but required the claimant to submit medical evidence documenting disability on those days. The attorney then requested that the case be referred for adjudication by an ALJ, but the employer paid the disputed benefits rather than engage in such litigation.7 The attorney then sought a $117 fee against the employer. The Board held that the employer was liable for the fee under § 28(a), treating the attorney’s letter as a “claim” which the employer entirely denied until more than thirty days after it was filed.
The court reversed, holding first that § 28(a)’s reference to a “claim for compensation having been filed” had a “narrow and unambiguous meaning,” viz., “a formal action that initiates a legal proceeding.” 398 F.3d at 316-17.8 It buttressed this reading with the observation that to apply § 28(a) to a dispute that arose after the employer had already paid some benefits would leave the “detailed conditions for fee awards” in § 28(b) with “no effect whatsoever.” Id. at 317.9 It also addressed the attorney’s alternative contention that the fee award was proper under § 28(b), holding (without acknowledging the authority directly to the contrary) that it could not because “[t]he failure to hold an informal conference or issue a written recommendation is fatal to a claim for attorney’s fees under the plain terms of section 928(b).”
Id. at 318. It was unmoved by “the fact that [under that reading] the District Director has power to determine whether the conditions of section 928(b) are satisfied,” id., because as it read the subsection the employer’s potential fee liability depends on both the fact and the content of an informal recommendation.
A divided court in Pittsburgh & Conneaut Dock Co. v. Director, OWCP (Bordeaux), 473 F.3d 253 (6th Cir. 2007), “adopt[ed] the approach taken by the Fourth and Fifth Circuits” in Edwards and Staftex. In
Bordeaux , unlike Edwards, there was an OWCP informal conference, but the claims examiner, in derogation of the duty imposed by the applicable regulation, failed to provide “recommendations and rationale[s] for resolution of [the outstanding] issues,” 20 C.F.R. § 702.316. Instead, she merely recommended that the parties attempt to settle the case, in a recommended range which was a small fraction of the compensation for permanent total disability to which the claimant asserted entitlement. The employer made no settlement offer in response to the recommendation, and the claimant then recovered the award he had sought before an ALJ. The majority nevertheless held, consistently with the original opinion in Staftex and the Fourth Circuit’s decision in Edwards, that the claimant must bear his own fees because § 28(b) provides no basis for fee-shifting unless each aspect of the procedures set forth has occurred – including not only an informal conference and a recommendation, but a recommendation favorable to the claimant, which the employer “refuse[s] to accept” before the claimant prevails in formal proceedings. 473 F.3d at 262-67. It reasoned that the statute “plainly states that in order for fees to be assessed under its terms there must be a written recommendation containing a suggested disposition of the controversy,” and rejected the Ninth Circuit’s reference to the provision’s legislative history both because such reference was not “appropriate” where the statutory terms were clear, and also because
. . . the legislative history cited by the Ninth Circuit does not support the proposition for which it is cited. The Ninth Circuit asserts that according to the legislative history “[t]he purpose of the statute is to authorize the assessment of legal fees against employers in cases where the existence or extent of liability is controverted and the employee-claimant succeeds in establishing liability or obtaining increased compensation in formal proceedings in which he or she is represented by counsel.” Nat’l Steel, 606 F.2d at 882. However, the document cited actually states that subsection (b) deals with “cases where payment of compensation is tendered and an unresolved controversy develops about the amount of additional compensation, despite the written recommendation of the deputy commissioner.” H.R. Rep. No. 92-1441 (1972), reprinted in 1972 U.S.S.C.A.N. 4698, 4717 (emphasis added). Since there is little, if any, support for the Ninth Circuit’s position, even in the legislative history, we reject the Ninth Circuit’s approach[.]
Id. at 267.
The court’s assertion that the legislative history cited by the Ninth Circuit did not support its statement of the legislative purpose is simply wrong. The Ninth Circuit cited to the descriptions of the amended § 28 in both the House committee’s “Summary of Major Provisions of the Bill,” H.R. Rep. at 9, 1972 U.S. Code Cong. & Admin. News 4698, 4706, quoted at p.3 supra, and its “Section-by-Section Description,” id. at 20, Code Cong. & Admin. News at 4717; the
Bordeaux majority appears merely to have overlooked the former, which supports the National Steel description verbatim. The Senate committee’s report contains an identical description in its “Major Provisions” section, and a similar description in its “Section-by-Section Analysis,” to those in the House report. S. Rep. No. 92-1125, p.3 supra, at 8, 22-23.
There the matter stands, at the court-of-appeals level. The Board has, as Not Enough says, held that it will apply the construction of § 28(b) adopted in the Fourth and Sixth Circuits – if § 28(a) is inapplicable, there can be no fee award against the employer unless OWCP held an informal conference and made a recommendation on the issue thereafter adjudicated by an ALJ and the employer refused to accept that recommendation – in all circuits except the Ninth. Davis v. Eller & Co., 41 BRBS 58 (2007) (“given the recent trend in the case law”). Overlooking the Third Circuit’s contrary precedent directly on point in Universal Terminal, it has even applied the “four prerequisites” reading in a case arising in that circuit. Devor v. Department of the Army, 41 BRBS 77 (2007).
The sudden burst of self-styled literalism with respect to § 28(b) thus has not advanced nearly so far as Not Enough describes the current status of the issue. Even counting Staftex as authoritative Fifth Circuit precedent, and not counting the general statements of other circuits in cases that did not present procedural facts requiring them to decide the precise issue of a claimant who prevails before an ALJ after having had either no OWCP recommendation or an unfavorable one, the supposed strict literalist view commands only the slimmest of margins over the original view – three courts to two (the Third and Ninth Circuits), with one of the three (the most recent to date) having been decided over a strong dissent. Contra Not Enough at 4 (“the courts have consistently maintained that no fee can be assessed against the employer where it does not reject the recommendation of the claims examiner,” citing two Board decisions).
No one has stopped to ask what conceivable purpose there might be for the four-prerequisites rule. Under that rule, where the claimant uses the services of an attorney before an ALJ to secure his or her rights that have been erroneously denied by the employer, the employer has to pay his or her fees if there was a claimant-favorable OWCP recommendation, but the claimant must bear the costs of establishing his or her rights if OWCP did not bother with a predictably futile informal conference or recommendation, or made a recommendation in favor of the employer (that turns out to have been wrong, or indeed was simply contrary to law). There is no view of the relevant policies underlying the fee-shifting provisions that justifies this disparity in results. The terms of § 28(b) actually do not compel the conclusion that anything except the third sentence of the subsection establishes a precondition to fee liability, and its qualification by the fourth sentence – “The foregoing sentence shall not apply if . . .” – suggests that only that sentence is critical. If the “four prerequisites” reading broadly frustrates the stated and long-recognized purposes of the overall provision, and a distinction among claimants between those who prevailed after receiving a favorable recommendation from OWCP and those who prevailed despite an unfavorable one could not have been based on any articulable legislative policy, the view that prevailed without dissent for the first quarter-century of the provision’s existence should not lightly be jettisoned.
The rule of stare decisis has special force in the area of statutory construction for two reasons. First, if the courts have misunderstood Congress’s intent, Congress can correct it, so courts should not revisit issues of statutory construction they have resolved; and second, “reliance” on an established rule presents special dangers that unfairness will result from changing it. Both grounds for sticking with an established reading even if it might have been wrong according to current principles of statutory construction are fully applicable: Congress did not make any change in § 28 in 1984, by which time the simple requirement that the claimant prevail in formal proceedings to qualify for fee-shifting under § 28(b) was broadly recognized and more-or-less uniformly practiced;10 and OWCP practices that have developed in contemplation of that construction make the four-prerequisites reading highly unfair in application. Unless the terms of the statute truly compel the change, the established view should be adhered to unless and until Congress changes it.
In the absence of correction of the supposed “torrent” of authority hostile or indifferent to the purposes of the fee-shifting provisions, it will be incumbent upon OWCP to get its claimant-protective, rights-enforcing hat on straight. The results in many cases under the four-prerequisites reading are travesties. In Andrepont v. Murphy Exploration, supra note 10, the claims examiner made a recommendation that “overlooked” the fact that, even accepting the employer’s labor-market survey, the claimant was entitled to more than $50,000 more than he had been paid; even once that additional compensation was awarded by the ALJ and paid, the claimant was in no financial condition to pay any part of the reasonable fees to his attorney for the services necessary to establish that entitlement, so under the Board’s application of the four-prerequisites reading the attorney cannot be paid for his successful services.11 In the recent unreported Board decision that Not Enough cites for the proposition that § 28(b) allows “no equitable exceptions” to the four-prerequisites reading, OWCP’s failure to make a written recommendation resulted from the employer’s failure to comply with the direction that it submit some evidence to support its position; after substantial delays, OWCP referred the case for formal litigation without making a recommendation – and the Board held that as a result, the employer could not be held liable for the claimant’s attorney fee. K.C. v. Northrop Grumman Ship Systems, Inc., BRB No. 08-0210 (Sept. 10, 2008), cited, Not Enough at 4.
Such frustrations of the statutory purposes can readily be avoided. OWCP must now take far more seriously its mission to ensure full enforcement of claimants’ rights, and claimants cannot be required to “prove their cases” at informal conferences in order to secure favorable recommendations; rather, under Longshore Act § 20(a), the recommendation should always be in the claimant’s favor unless the employer produces “substantial evidence to the contrary” and that evidence is convincing. The district directors’ offices are not now in a position (if they ever were) to develop claimants’ cases for them over employer opposition, so as to make the services of an attorney unnecessary except in cases where the employer continues to resist the claim after OWCP has developed evidence in support of it and formal litigation is required, and the Director has fairly forthrightly so admitted (in supporting the unsuccessful rehearing petitions in Bordeaux and Day). But as matters presently stand, for most claimants in the Fourth and Sixth Circuits – and everywhere else except the Ninth Circuit, unless an attorney plans on pursuing a fee-shifting claim all the way to the court of appeals – an unfavorable OWCP recommendation will be a death knell for the claim. It will mean there can be no employer fee liability, and even complete success before the ALJ often does not put a claimant in a financial position to be able to pay reasonable fees without serious hardship, so such fees will not be awarded against him or her (see 20 C.F.R. §§ 702.132(a) (penultimate sentence), 802.203(e)). With reasonable fees unavailable even in the event of success, no attorney is likely to pursue a claim, so the OWCP claims examiner will effectively be the Supreme Court for many cases.
In any event, the fat lady has not sung the final aria. Several major circuits have yet to address the issue; as of this writing the Fifth Circuit’s position is unclear and its authorities are in serious tension; OWCP has not yet fully determined how it will respond to the challenge presented by the grave responsibility the Fourth and Sixth Circuits’ decisions place upon it; and Congress has not yet convened any oversight hearings to see how the “torrent” affects claimants’ ability to enforce their rights or the availability of skilled attorneys to represent claimants under the Act, or to consider an amendment to make the fee-shifting provision a simpler “prevailing [claimant]” statute like nearly all other federal fee-shifting provisions. The opera is not over.
ADDENDUM
On March 17, 2009, the Fifth Circuit affirmed the Board’s decision denying fee-shifting – and therefore, since the claimant was not in a financial position to bear the costs of establishing his entitlement, denying fees altogether for the claimant’s attorneys’ work securing an award of more than $50,000 before an ALJ – in Andrepont v. Murphy Exploration and Production Co., — F.3d —, No. 08-60251 (5th Cir. Mar. 17, 2009). The fact that the employer’s payments for scheduled PPD continued after the claim (the first one filed on the claimant’s behalf, explicitly for permanent total disability) was filed and the district director's notice was sent to the employer was held fatal to fee-shifting under § 28(a), even though the payments were not on that claim. And the district director's claims examiner's recommendation that the claimant had been paid all he was entitled to, which the employer "accepted," was held to foreclose fee-shifting under § 28(b) (despite the claimant’s recovery of a substantial additional sum before the ALJ). Two of the three members of the panel acknowledged that this "might seem odd" and that the "practical effect . . . seems to be adverse to the purpose of the statute," but profess to be unable to "elevate the purpose of the statute above the plain text reading," which "includes [the employer] refusing to accept [an OWCP recommendation] as an element," "notwithstanding th[e] seeming anomaly" of the result. Judge Garwood was unwilling even to acknowledge that much.12
Footnotes
1 Paper presented to the 2008 Loyola Annual Longshore Conference, and included in February 2009 release to Volume A of the BRBS Longshore Reporter and in the LexisNexis “Workers’ Compensation Law Blog” under the title Trickle Turns into Torrent of Attorney Fee Denials (hereinafter Not Enough).
2 Other important recent jurisprudence under § 28 is beyond the scope of the present discussion. See Day v. James Marine, Inc., 518 F.3d 411, 416, 42 BRBS 15(CRT) (6th Cir. 2008), concerning shifting “pre-controversion” fees under § 28(a), mentioned in passing in Not Enough (at 2, 4, 5); Christensen v. Director, OWCP, — F.3d —, 2009 U.S. App. LEXIS 4032 (9th Cir. Mar. 2, 2009), rev’g B.C. v. Cenex Harvest States Cooperative, 41 BRBS 107 (2007), and Van Skike v. Director, OWCP, — F.3d —, 2009 U.S. App. LEXIS 4040 (9th Cir. Mar. 2, 2009), rev’g D.V. v. Stevedoring Services of Am., 41 BRBS 84 (2007), in which the court disapproved the solipsistic hourly-rate-setting practice that has prevailed at all administrative levels and been approved by the Benefits Review Board.
3 Accord, e.g., Ayers S.S. Co. v. Bryant, 544 F.2d 812, 813-814 (5th Cir. 1977) (“Attorney’s fees can only be assessed against the employer, then, when the claimant has successfully claimed coverage which the employer has either totally or partially denied.”); Portland Stevedoring Co. v. Director, OWCP, 552 F.2d 293, 294 (9th Cir. 1977) (§ 28 “provides for direct payment of attorney’s fees by an employer only when a claim involving the existence or extent of liability is resisted by an employer and is subsequently successfully prosecuted by claimant’s attorney.”); Davis v. U. S. Dep’t of Labor, 646 F.2d 609, 613 (D.C. Cir. 1980) (Ginsburg, J.) (§ 28(a) “provides that if an attorney assists an employee ‘in the successful prosecution of [a] claim,’ the attorney shall receive a reasonable attorney’s fee”).
4 30 U.S.C. §§ 901-44.
5 30 U.S.C. § 932(a).
6 See Longshore Act § 6(a) (no compensation for first three days’ disability unless disability lasts longer than fourteen days).
7 A fuller, and somewhat different, account of the procedural course of the dispute appeared in the Board’s decision holding the attorney entitled to the fee in Edwards. The claims examiner and the employer apparently made it clear that the claimant’s own testimony would not “carry the day” at the informal-conference level (even though, if credible, it would before an ALJ), and so would have required the attorney to develop theretofore non-existent medical evidence with respect to the three days in question. See Edwards v. Virginia Int’l Terminals, http://www.dol.gov/brb/decisions/lngshore/unpublished/Nov03/03-0244.pdf (last visited Mar. 4, 2009), Slip op. at 2. The attorney’s conduct, and the Board’s decision, seem far more understandable in view of this fuller account.
8 Never mind that it has long been established that, for example, even an injured worker’s telephone inquiry to the district director’s office, of which a note is made for the file established by the employer’s report of the injury, is enough to constitute a “claim” satisfying the § 13 time limitation, without the need for any “formal” “filing.” E.g., McKinney v. O’Leary, 460 F.2d 371 (9th Cir. 1972); Fireman’s Fund Insurance Co. v. Bergeron, 493 F.2d 545, 547 (5th Cir 1974); Avondale Industries v. Alario, 355 F.3d 848, 852 (5th Cir. 2003) (“A claim requires only a writing disclosing an intention to assert a right of compensation.”).
9 This is manifestly in error in multiple respects, but, again, the applicability of § 28(a) is beyond the scope of the present paper.
10 Administrative Appeals Judge Hall made this point forcefully in dissenting from the Board’s application of the four-prerequisites rule in a case arising in the Fifth Circuit, Andrepont v. Murphy Exploration & Production Co., 41 BRBS 1, 4-6, reh’g denied, 41 BRBS 73 (2007), pet. for review pending, 5th Cir. No. 08-60251.
11 The author represents the claimant’s attorney in the pending review proceeding before the Fifth Circuit in Andrepont.
12 The opinion mistakenly describes "the practical effect here [as] to cut into [the claimant]'s recovery" for the legal costs of securing it. This overlooks that the Board had remanded to the ALJ and the district director to consider an attorney-fee award payable by the claimant, but each found without dispute that the claimant's financial circumstances were such that he could not pay any reasonable fees. The practical effect for any claimant who will not be in a position, even in the event of success before the ALJ, to bear the costs of recovery is that legal representation will be entirely unavailable (unless from someone who can afford to provide it pro bono) any time the OWCP recommendation is against the claimant.
© Copyright 2009 by Joshua T. Gillelan II. All rights reserved. Reprinted with permission.
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