Longshore Attorney's Fees Under Section 28(a): A New Battleground?

Longshore Attorney's Fees Under Section 28(a): A New Battleground?

An unpublished Benefits Review Board opinion in March 2008 reflected the continuing turmoil in interpreting the attorney's fee provisions of the Longshore Act (33 U.S.C.S. § 901 et seq.).  A year ago a divided Board interpreted § 28(b) (33 U.S.C.S. § 928(b)) in Andrepont v. Murphy Exploration & Production Company, 41 BRBS 1 (2007). There, the majority parsed the words of the statute carefully and literally. It held that claimant, although successful in obtaining additional benefits at trial before the ALJ, could nevertheless not have his attorney's fees assessed against the employer, since the District Director, OWCP, had recommended no compensation beyond what had already been paid.

In R. K. v. Fraser Shipyards, Incorporated, et al., BRB No. 07-0679 (3/27/2008) (unpublished), the District Director had denied fees under the other section of the Act imposing liability for claimant's fees on the employer, § 28(a) (33 U.S.C.S. § 928(a)).  The Board reversed in an unpublished opinion.

The Board found section 28(b) was inapplicable because the employer had timely accepted the District Director's recommendation of permanent partial disability benefits. But the District Director also denied fees under § 28(a), reasoning that the employer had voluntarily paid some (temporary total disability) benefits before receiving notice of the formal claim, and so could not be held liable for fees.

The Board disagreed. Again reading the words of the statute literally, it held that the employer was liable for claimant's attorney's fees "pursuant to 28(a) in this case because it declined to pay any [additional] compensation on or before the thirtieth day after its receipt of claimant's claim for permanent partial disability compensation." R. K.

The most recent circuit case law cited by the Board was Day v. James Marine, Inc., 518 F.3d 411, 42 BRBS 15(CRT) (6th Cir. 2008). There a divided court addressed two contentious aspects of the "who-pays-the-fee" issue. The court reversed the Board's holding, first quoting the Board's holding that an employer's liability "ceases on the date [it] pays benefits pursuant to the [deputy commissioner's] written recommendations." (518 F.3d at 421)

The court continued and again quoted the BRB: "regardless of whether the parties continue to dispute liability -- 'and any fee liability ... thereafter is governed by [§ 928(b)].' " (quoted at 518 F.3d at 420, brackets added by court)

The majority in James Marine noted that the Board itself had already reversed course in W.G. v. Marine Terminals Corp., 41 BRBS 13 (2007). The Board in W.G. held that the ``plain language'' of § 28(a) requires that, when an employer fails to pay any benefits to claimant within thirty days of receipt of notice of the claim from the District Director, "its liability for an attorney's fee for work involving all benefits due on the claim must be determined pursuant to Section 28(a)." 41 BRBS at 15.

The Sixth Circuit reached the same conclusion in James Marine, agreeing fees must be paid under § 28(a) where a) employer paid some benefits before claimant filed his claim, but b) declined to pay additional benefits after it received written notice of the claim. This was so, despite the fact that the employer actually paid some benefits after the 30-day "window" following written notice. (518 F.3d at at 420)

The majority's other main holding in James Marine is equally interesting: It said the Benefits Review Board "correctly determined that the Act does not allow an employee to collect attorneys fees incurred before the employer has rejected the employee's claim." The majority did not adopt the dissent's suggestion that reference be made to other fee-shifting statutes where pre-controversy fees may be permitted.  Rather, it chose to look to § 928(a)'s "neighbor," § 928(b), where, it said, pre-controversion fees are not permitted. (518 F.3d at 419)

The dissenting judge disagreed with the majority in James Marine on two counts. First, he disagreed with the majority's reading of § 28(a) to mean that pre-controversion fees could not be assessed against the employer.  In the majority opinion, the disagreement centered on the word "thereafter" as used in each section. The dissent, however, looked also to the "policies underlying the Act," and agreed with the Director's position that pre-controversion fees should be assessable under § 928(a). (518 F.3d at 422-423)

The dissent points out that, among the reasons for permitting an award of pre-controversion fees are that it is consistent with the Act's policy to "encourage the prompt and efficient administration of compensation claims," (518 F.3d at 423, quoting the U.S. Supreme Court in Rodriguez v. Compass Shipping Co., 451 U.S. 596, 68 L. Ed. 2d 472, 101 S. Ct. 1945 (1981)). If pre-controversion fees are assessable, then it will be more cost-effective for employees to obtain legal representation during the claims-filing stage, by permitting an earlier proper assessment of the claim's merits. Further, the dissent cites several appeals court decisions from the 1980s which point to § 928's purpose and design to ensure that compensation will not be diminished by attorney fees. Aside: It seems certain that many attorneys, like the author of this note, are now turning away cases (or providing limited counsel on a volunteer basis) where claimants could well use some advice, simply because no dispute has arisen yet and the claimant would have to pay the fee until a dispute does arise.

Secondly, the dissenter in James Marine disagreed with the majority's holding that pre-controversion fees could not be assessed under § 28(b). He argued there was no need to address § 28(b), since "reasonable pre-controversion fees are permitted by § 928(a)." (518 F.3d at 425)

It appears the courts are currently interpreting the words of the statute literally rather that liberally in favor of the injured worker. We may have witnessed in James Marine the opening skirmishes in a judicial battle over the meaning and appropriate context of words like "thereafter."' The lesson may be that even literal readings do not always point in a single direction, and that some resort to policy and history may yet be useful.