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Longshore Act: Deciphering Section 28(b) After Andrepont

October 19, 2012 (10 min read)
By Paul B. Howell, Esq., Franke & Salloum, PLLC, Gulfport, Mississippi
In 1822, a sweaty scientist in a dimly-lit room looked at a rock from Egypt and discovered the key to decoding Egyptian hieroglyphics. 175 years later, a Fifth Circuit Court of Appeals judge with a cup of coffee in his hand staring blankly at the virtually indecipherable verbiage of Section 28(b) of the Longshore and Harbor Workers’ Compensation Act, discovered four “shalls” which would become the key to finally translating this section of the Act (33 U.S.C.S. § 928(b)). See FMC Corp. v. Perez, 128 F.3d 908, 31 BRBS 162(CRT) (5th Cir. 1997).
The Longshore and Harbor Workers’ Compensation Act provides two exceptions to the American rule that a litigant must pay his or her own attorney (33 U.S.C.S. § 901 et seq.). Section 928(a) provides that the employer shall pay the claimant’s attorney’s fees if no compensation is paid within 30 days of receiving notice from the Deputy Commission that a claim has been filed and the claimant’s attorney is successful in the claim. 33 U.S.C.S. § 928(a); Pool Co. v. Cooper, 274 F.3d 173, 186, 35 BRBS 109(CRT) (5th Cir. 2001). Section 928(b) provides that the employer shall pay the claimant’s attorney’s fees as follows:
If the employer or carrier pays or tenders payment of compensation without an award pursuant to section 14(a) and (b) of this Act, and thereafter a controversy develops over the amount of additional compensation, if any, to which the employee may be entitled, the deputy commissioner or Board shall set the matter for an informal conference and following such conference the deputy commissioner or Board shall recommend in writing a disposition of the controversy. If the employer or carrier refuse to accept such written recommendation, within fourteen days after its receipt by them, they shall pay or tender to the employee in writing the additional compensation, if any, to which they believe the employee is entitled. If the employee refuses to accept such 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 or carrier, 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.
33 U.S.C.S. § 928(b) (Emphasis added.)
For 30 years, no one was able to decipher this section, the mere reading of which was known to cause headaches, blurred vision, and daydreams. In fact, everyone assumed that the linguistically-challenged Congress merely intended to require that the claimant’s attorney be successful in order to recover attorney fees from the employer. See, e.g., National Steel & Shipbuilding Co. v. U.S. Dep’t of Labor, OWCP, 606 F.2d 875, 883, 11 BRBS 68 (9th Cir. 1979); Matulic v. Director, OWCP, 154 F.3d 1052, 1060-1061, 32 BRBS 148(CRT) (9th Cir. 1998). However, with the discovery of four “shalls” (the strongest word in the English language), the Fifth Circuit was able to decode Section 28(b). They interpreted it as including mandatory requirements in order for a claimant’s attorney to obtain an employer-paid attorney fee under Section 28(b). FMC Corp. v. Perez, supra, at 910; see also Staftex Staffing v. Director, OWCP (Loredo), 237 F.3d 404, 408-409, 34 BRBS 44(CRT) (5th Cir. 2000), mod. in part on reh'g, 237 F.3d 409, 35 BRBS 26(CRT) (5th Cir. 2000); Pool Co. v. Cooper, supra, at 186.
It wasn’t long before other circuits joined in the chorus from the Fifth Circuit and interpreted the statute similarly. See, e.g., Virginia International Terminals, Inc. v. Edwards, 398 F.3d 313, 317-318, 39 BRBS 1(CRT) (4th Cir. 2005), cert. denied, 546 U.S. 960, 163 L. Ed. 2d 362, 126 S. Ct. 478 (2005); Pittsburgh and Conneaut Dock Co. v. Director, OWCP, 456 F.3d 616, 627-629 (6th Cir. 2006). However, this set up a fight with the claimant’s bar which was clinging desperately to the guns and religion of the Ninth Circuit Court of Appeals which merely required success. The battle lines were drawn as the Fifth Circuit heard oral arguments in Andrepont v. Murphy Exploration & Production Co., 566 F.3d 415, 43 BRBS 27(CRT) (5th Cir. 2009). This case strongly came down in favor of employers and laid out the following bare-bones requirements for a claimant’s attorney’s recovery of an employer-paid fee:
1. An informal conference addressing the disputed additional compensation;
2. A subsequent written recommendation suggesting a disposition of the controversy;
3. The employer’s rejection of the recommendation; and
4. The claimant’s use of an attorney to secure an award of compensation greater than the amount the employer was willing to pay.
The case law since Andrepont has put the following meat on these bones:
1. Informal Conference
There must be an informal conference which generally is a meeting between a representative of the District Director, OWCP, and the parties wherein an attempt is made to informally resolve the disputes. 20 C.F.R. § 702.311. An informal conference is sufficient to meet this requirement for a Section 28(b) attorney fee even where the employer fails to attend. H.T. v. Knight’s Marine and Industrial Services, Inc., BRB No. 06-0673 (unpublished) (2007). However, it is clear that correspondence between the District Director’s office and the parties is equivalent to an informal conference. Davis v. Eller & Co., 41 BRBS 58 (2007). The conference must be held with the District Director. The Benefits Review Board does not have authority to conduct an informal conference, despite some still-undeciphered language in Section 28(b). J. R. v. Northrup Grumman Ship Systems, BRB No. 09-0656 (unpublished) (2009).
2. Written Recommendation on the Issues
A suggestion that the parties consider settlement is not a recommendation on the issues as required to shift liability to the employer for payment of fees. Devor v. Dep’t. of the Army, 41 BRBS 77 (2007). Likewise, a statement that the parties cannot reach a settlement is without substance and cannot meet claimant’s burden. C.G. v. Wallenius Wilhelmsen Lines, BRB No. 08-0413 (unpublished) (2008). A recommendation that the parties submit agreed stipulations is not a recommendation. D. M. v. Main Repair Services, BRB No. 08-0310 (unpublished) (2008). A promise of future recommendations as needed is not a recommendation. Coney v. Holt Cargo Systems, Inc., BRB No. 10-0393 (unpublished) (2010). However, a substantive specific written recommendation is not necessary so long as a general recommendation is made. E. E. v. Danos Curole Marine Contractor, BRB No. 08-0270 (unpublished) (2008). A written recommendation on the extent of disability issue is not a recommendation on the compensability of a separate condition. R. S. v. Virginia International Terminals, BRB Nos. 07-0664 and 0664(a) (unpublished) (2008). The failure to render a recommendation may not be excused on equitable grounds in the absence of extreme bad faith on behalf of the employer. Craven v. Director, OWCP, 407 Fed. Appx. 854, 858 (unpublished) (5th Cir. 2011). Finally, a failure to recommend Section 10(f) adjustments is irrelevant where the District Director recommended payment of permanent and total disability which necessarily includes Section 10(f) adjustments (33 U.S.C.S. § 910(f)). Wilson v. Service Employees Int’l, Inc., 44 BRBS 81 (2010).
3. Employer Rejection of the Recommendation
The failure to agree with a recommendation in writing is not the equivalent of a rejection of a recommendation. Avalos v. U.S. Joiner, LLC, 10-0633 (unpublished) (2011). Likewise, an employer’s indifference is not a rejection. Simmons v. Northrup Grumman, BRB Nos. 11-0424 and 11-0536 (unpublished) (2012). An employer’s agreement to authorize medical care as recommended is not a rejection even where the employer delays in paying the bills. Rochelle v. East Coast Crane & Electric, Inc., BRB No. 11-0451 (unpublished) (2012). A recommendation to either authorize surgery or schedule a second opinion has not been rejected where the employer only schedules the second opinion. Gautreaux v. Tesco Corp., BRB No. 09-0778 (unpublished) (2010). Similarly, a recommendation agreeing with employer that further surgery is not necessary is not a rejected recommendation. S. B. v. B&B Interiors, Inc., BRB No. 08-0341 (unpublished) (2009). However, an employer’s lengthy inaction may constitute a rejection. Hedberg v. Marine Terminals Corp., BRB No. 10-0195 (unpublished) (2010). Likewise, a failure to provide wage information may constitute a rejection of the recommendation. W. J. v. Northrup Grumman Ship Systems, BRB No. 08-0848 (unpublished) (2009). Arguing that claimant is limited to permanent partial disability after receiving a recommendation for permanent total disability is a rejection of the claim. See Wilson v. Service Employees Int’l, Inc., supra. Finally, an unfavorable recommendation from the claims examiner cannot be appealed directly to the Benefits Review Board by the claimant even though it may ultimately deprive the claimant of an employer-paid fee. Craven v. Director, OWCP, 604 F.3d 902, 905-907, 44 BRBS 31(CRT) (5th Cir. 2010).
4. Award of Greater Compensation
A claimant’s attorney obtains a greater award where he or she obtains more than the employer alleges is owed, even though the employer is voluntarily paying more pending the decision, than is eventually awarded. Carey v. Ormet Primary Aluminum Corp., 627 F.3d 979, 983-984, 44 BRBS 83(CRT) (5th Cir. 2010). Likewise, an award of permanent and total disability with Section 10(f) increases is a greater award than the employer’s voluntary payment of temporary total disability. Wilson v. Service Employees Int’l, Inc., supra. C. W. v. Northrup Grumman Ship Systems, BRB No. 08-0163 (unpublished) (2008). However, an award of temporary partial disability is not a greater award where the employer is voluntarily paying temporary total disability. McAllister v. Service Employees Int’l, Inc., BRB No. 10-0441 (unpublished) (2011). Likewise, the adoption of a stipulation continuing employer’s voluntary payment of compensation is not the receipt of a greater award. D. M. v. Marine Repair Service, BRB No. 08-0310 (unpublished) (2008). Where a claimant abandons a claim for a higher average weekly wage and recovers no more than was voluntarily being paid, the claimant did not receive a greater award. Ferro v. Northrup Grumman Ship Systems, BRB No. 10-0373 (unpublished) (2010). Finally, where the administrative law judge grants employer’s modification reducing an award of temporary total disability, the claimant’s attorney has not achieved a greater award. N. W. v. Northrup Grumman Ship Systems, BRB No. 08-0222 (unpublished) (2008).
In conclusion, the Andrepont case has definitively decoded the four mandatory requirements for obtaining an employer-paid fee under Section 28(b). The case law is still working its way through the system in applying these requirements to different fact scenarios. Suffice it to say, the case law so far has been largely in favor of employers and therefore the claimant’s bar should beware.
© Copyright 2012 Paul Howell. All rights reserved. Reprinted by permission. This article will appear in an upcoming issue of the Benefits Review Board Service – Longshore Reporter (LexisNexis).
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