01/14/2010 05:11:12 PM EST
Claimants' Attorneys' Fees and Expenses in LHWCA and Extension Act Cases: Understanding the Current Interpretation of 33 U.S.C.S. § 928(a) and (b) Everywhere but the 9th Circuit
In order for a Claimant's attorney to be paid for assisting with a claim brought under the Longshore and Harbor Workers' Compensation Act (33 U.S.C.S. § 901 et seq.) or an extension act, the Claimant's attorney must obtain an order for his or her fees as described in 33 U.S.C.S. § 928. Subsections (a) and (b) of Section 928 govern the situation where Claimant's attorney may collect his or her fees and expenses from the Employer and Carrier in addition to the benefits being received by the Claimant. Subsection (c) governs the Claimant's ability to collect his or her fees directly from a Claimant. Subsection (e) describes the penalties, including fines and imprisonment, that may be faced by a Claimant's attorney who collects a fee without first obtaining an order for that fee. This article focuses on the current interpretation and application of Section 928(a) and (b) (33 U.S.C.S. § 928(a), (b)).
Section 928(a) applies in the situation where an Employer and Carrier do not voluntarily initiate payment of the claim for benefits. While that sounds simple, applying the law requires a greater understanding of the wording of Section 928. When we focus on the details contained within Section 928(a) we see that Section 928(a) requires that after an Employer or Carrier receives written notice of the claim from the Deputy Commissioner (the District Director of the Office of Workers' Compensation Programs, United States Department of Labor), the Employer and Carrier not pay any compensation to the Claimant within thirty days of that notice and Claimant must utilize an attorney who successfully prosecutes the claim. Thus, before a Claimant may obtain his or her fees from the Employer and Carrier, he or she must file a claim with the Deputy Commissioner. This is generally done through the filing of a form LS-203 "Employee's Claim for Compensation." When the Department of Labor receives the LS-203 the District Director generally sends a notice to the Employer and Carrier regarding the filing of the claim. This is often done on a form LS-215a. While there is little precedent on what constitutes "written notice of the claim" from the Deputy Commissioner, the LS-215a appears to contain all of the "notice" requirements that are necessary to trigger the shifting of attorney's fees under Section 928(a). After receiving the LS-215a or some other written notice of the claim from the Deputy Commissioner the Employer and Carrier must refuse to pay any compensation benefits within thirty days.
Compensation benefits are generally understood to mean indemnity benefits such as temporary total disability benefits, temporary partial disability benefits or even permanent disability benefits. While an argument could be made that the provision of medical benefits satisfies this requirement to provide any compensation benefits within thirty days, the more determinative question is whether the Employer and Carrier provided indemnity benefits within thirty days.
Questions remain about the provisions in Section 928(a). For example, when does the thirty-day clock start? Per the statute, the clock starts upon notice from the Deputy Commissioner. While the LS-215a appears to require everything necessary for that notice, it is possible that other letters from the District Director or even a Claims Examiner at the United States Department of Labor could constitute this notice. Thus this issue should be considered upon receipt of not only the LS-215a but also upon receipt of other communications from the Department of Labor.
The Sixth Circuit case of Day vs. James Marine, Inc., 518 F.3d 411, 415, 42 BRBS 15(CRT) (6th Cir. 2008), provides an interesting example of the application of Section 928(a). In that case the Employer and Carrier voluntarily initiated the payment of benefits prior to the receipt of an LS-203. The Employer and Carrier had completed the payment of all benefits that they believed were due before the receipt of the notice from the Deputy Commissioner a year after they started paying benefits. After receiving the notice from the Deputy Commissioner the Employer and Carrier did not make any additional payments. With the assistance of an attorney the Claimant obtained additional benefits. Claimant's attorney then sought to collect his attorney's fees and expenses from the Employer and Carrier. The Sixth Circuit held that the Employer and Carrier were responsible for the Claimant's attorney's fees from the time of their receipt of the notice of the claim since Claimant's attorney obtained additional payments for the Claimant thereafter and the Employer and Carrier had not voluntarily made any payments of compensation to the Claimant within thirty days of receiving that notice. This case illustrates that the Section 928(a) shifting could occur not only at the beginning of a claim but also years into a claim.
What constitutes "any compensation" under Section 928(a) is also currently unclear. Some courts have interpreted this section as requiring that some compensation be paid but not necessarily all that the Claimant seeks. See, e.g., Day, supra, at 421, and Andrepont v. Murphy Exploration & Production Co., 566 F.3d 415, 418-419, 43 BRBS 27(CRT) (5th Cir. 2009) (per curium).
Section 928(b) applies in a situation where a dispute has arisen between the parties. The issue in dispute is heard at an Informal Conference at the OWCP. If the Deputy Commissioner through the Claims Examiner issues recommendations in favor of the Claimant, and if the Employer and Carrier refuse to comply with those recommendations within fourteen days, then the Claimant may shift the responsibility for his attorney's fees and expenses to the Employer and Carrier if the Claimant wins on the recommended issue at a Formal Hearing. Day, supra, at 415; Andrepont, supra, at 421; Pittsburgh & Conneaut Dock Co. v. Director, OWCP (Bordeaux), 473 F.3d 253, 255-266, 40 BRBS 73(CRT) (6th Cir. 2007) (no fees were due under Section 928(b) because there was no written recommendation); Virginia Int'l Terminals, Inc. v. Edwards, 398 F.3d 313, 317, 39 BRBS 1(CRT) (4th Cir. 2005), cert. denied, 546 U.S. 960, 163 L. Ed. 2d 362, 126 S. Ct. 478 (2005); Davis v. Eller & Co., 41 BRBS 58 (2007) (arising under the Eleventh Circuit, adopting the strict construction of the Fourth and Fifth Circuits, Employer not liable because there was no informal conference).
First, Section 928(b) requires that there be an Informal Conference. Understand that not all circuits require an Informal Conference. Most circuits and the Benefits Review Board do. Until the United States Supreme Court has its opportunity to address this issue it is best to simply understand that if there has been an Informal Conference then Section 928(b) must be considered. If there has not been an Informal Conference, but there has been an exchange of written communication with the Department of Labor over an issue in dispute which results in the issuance of recommendations, then it is possible that an Informal Conference may be deemed to have occurred. Next there must be a written recommendation from the Department of Labor. These recommendations are most often contained on the LS-280 Memorandum of Informal Conference sent by the Claims Examiner following an Informal Conference. Bear in mind that even if the LS-280 does not contain recommendations there may be other subsequent communications from the Department of Labor that contain the recommendations. For example, if at the time of the Informal Conference the parties were still trying to gather evidence on an issue in dispute, then a Claims Examiner might refrain from issuing a recommendation immediately after an Informal Conference. Upon receipt of additional evidence the Claims Examiner may issue a recommendation in the form of a letter to the parties. Thus all communications from the Department of Labor should be viewed in terms of the questions raised by Section 928(b). The third requirement of Section 928(b) is that the Employer and Carrier refuse to adopt the recommendations of the Department of Labor within fourteen days. Finally, a Claimant must utilize an attorney to win the recommended benefits that the Employer and Carrier had refused to pay. The Claimant does not have to win the exact amount recommended by the Claims Examiner, instead the Claimant just has to win on the issues that the Claims Examiner had addressed.
If the responsibility has been shifted to the Employer and Carrier then a question arises as to how much an Employer and Carrier must pay for the Claimant's attorney's fees and expenses. Under Section 928(a) an Employer and Carrier must pay a reasonable attorney's fee. Under Section 928(b) an Employer and Carrier must pay a reasonable attorney's fee based solely on the difference between the amount awarded and the amount tendered or paid. The Claimant's attorney starts the process by sending an application for his or her attorney's fees and expenses. The Employer and Carrier may respond to the application with objections and arguments. For example, the Employer and Carrier may object if the Claimant's attorney seeks an excessive amount. Consideration should be given to the complexity of the issues and the geographical area where the case was heard. See, e.g., Ross v. Ingalls Shipbuilding, Inc., 29 BRBS 42, 43-44 (1995); Smith v. Aerojet General Shipyards, 16 BRBS 49, 55 (1983). The parties may agree to settle the dispute. If a compromise cannot be reached then an amount will be determined by the person (ex. District Director or Administrative Law Judge) who has jurisdiction over the claim for the time period during which the attorney's fees and expenses were incurred.
In summary, after an injury a Claimant's attorney may turn to the Claimant for payment of his fees under Section 928(c). That responsibility may be shifted to the Employer and Carrier under Section 928(a) if the Employer and Carrier do not pay any compensation to the Claimant within thirty days of notice from the Deputy Commissioner. Once that responsibility is shifted it remains the responsibility of the Employer and Carrier throughout the life of the claim. If the responsibility has not yet been shifted to the Employer and Carrier under Section 928(a) then the responsibility may be shifted to the Employer and Carrier under Section 928(b) if Employer and Carrier refuse to comply with the recommendations of the Department of Labor within fourteen days after the issuance of those recommendations following an Informal Conference.