Director, Office of Workers' Compensation Programs, U.S. Dept. of Labor v. Robertson

• Decision Date: 04 August 1980
• Docket Number: No. 78-1741,78-1741
• Citation: 625 F.2d 873
• Parties: DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, U. S. DEPARTMENT OF LABOR, Petitioner, v. Kenneth ROBERTSON, Respondent.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 873

625 F.2d 873

DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, U. S DEPARTMENT OF LABOR, Petitioner, v. Kenneth ROBERTSON, Respondent.

No. 78-1741.

United States Court of Appeals Ninth Circuit.

Submitted May 22, 1980.

Decided Aug. 4, 1980.

George M. Lilly, Washington, D. C., on briefs, for petitioner.

C. Conrad Green, Green, Roof & Krucker, Poulsbo, Wash., on briefs, for respondent.

Petition for Review of a Decision of the Benefits Review Board, U. S. Department of Labor.

Before CHOY and FERGUSON, Circuit Judges, and BARTELS, ^* District Judge.

FERGUSON, Circuit Judge:

The government appeals a decision and order of the Benefits Review Board ("BRB") requiring the claimant's attorney's fee to be paid from the special fund established pursuant to § 44 of the Longshoremen's and Harbor Workers' Compensation Act ("the Act"), as amended 33 U.S.C. § 944. ¹ We reverse.

FACTS

The facts of this case are undisputed. Kenneth Robertson was injured in January, 1969 in the course of his employment. His employer, Todd Shipyards, voluntarily paid $24,275 compensation for temporary total disability from the date of injury until October, 1976. Todd Shipyards then ceased making these voluntary payments because it had exceeded the statutory maximum of $24,000 for temporary total disability incurred prior to the 1972 amendments to the Act. ² Robertson then filed a claim seeking compensation for permanent total disability. A formal hearing, as provided in § 19 of the Act, 33 U.S.C. § 919, was held on November 18, 1976. The administrative law judge ("ALJ") found that Robertson was permanently totally disabled as of October 28, 1976, the date on which Todd Shipyards had terminated payments. The ALJ awarded compensation accordingly and Robertson sought reconsideration, arguing that his disability had commenced much earlier than October, 1976. The ALJ law judge thereafter amended his decision and order to show that Robertson's disability commenced on September 30, 1976, the date on which the $24,000 statutory maximum had been reached. The remaining $275 was credited against the award for permanent total disability.

ordered that Todd pay Robertson's attorney's fee.

The determination of the date of permanent total disability was critical, since § 10(h) of the Act, a provision added by the 1972 amendments, entitles a claimant who was permanently disabled prior to the date of the amendments to an initial adjustment in the applicable compensation rate and to annual adjustments in compensation. Robertson therefore appealed to the BRB, claiming that the ALJ's determination of the date of Robertson's disability was arbitrary and erroneous.

Robertson and the Director, Office of Workers' Compensation Programs, filed a joint stipulation to the BRB in which they agreed that the ALJ had erred and that Robertson was permanently totally disabled prior to the enactment of the 1972 amendments. They requested that the judge's amended order be vacated and the case remanded for entry of an order finding that Robertson's disability occurred prior to the enactment of the amendments.

The BRB declined to accept the stipulations, denied the motion to remand, and required Robertson to file a brief on the merits of his case. In its decision, the BRB explained that it is not empowered to reweigh the evidence and cannot review an ALJ's findings of fact without being briefed.

On the basis of briefs filed by both parties, the BRB concluded that the ALJ's finding was erroneous, ³ and modified it to find that Robertson's permanent total disability commenced prior to the enactment of the 1972 amendments. The Director's response brief had concurred on this point, but the Director had opposed Robertson's request that his attorney's fee on appeal to the BRB be paid from the special fund. The BRB concluded that the fee was to be paid from the fund because burdening the claimant with his attorney's fee would violate the purpose of the Act.

The Director appeals the fee award. ⁴

DISCUSSION

Ordinarily, our standard of review in BRB cases is quite limited: we must affirm unless the BRB's decision is unsupported by substantial evidence on the record considered as a whole or is contrary to applicable law. Cardillo v. Liberty Mutual Co., 330 U.S. 469, 478, 67 S.Ct. 801, 806, 91 L.Ed. 1028 (1947); Cordero v. Triple A Machine Shop, 580 F.2d 1331, 1333 (9th Cir. 1978), cert. denied, 440 U.S. 911, 99 S.Ct. 1223, 59 L.Ed.2d 459 (1979). While we may undertake a more searching review where, as here, the Director opposes the BRB's decision, Director, etc. v. National Van Lines, Inc., 613 F.2d 972, 986 (D.C. Cir. 1979), we find it unnecessary to do so in this case because the BRB's decision is clearly contrary to applicable law.

I.

It is well established under the American Rule that a party may not generally recover attorney's fees absent statutory authorization or a contract providing for an award. Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 257, 95 S.Ct. 1612, 1621, 44 L.Ed.2d 141 (1975); Reiser v. Del Monte Properties Co., 605 F.2d 1135, 1137 (9th Cir. 1979). In the instant case, the statute does not provide for the payment of counsel fees from the fund and there is no applicable contract. Nor does this case fall within one of the established exceptions to the American Rule. Consequently, the BRB erred as a matter of law in ordering the payment of counsel fees from the fund, and we must reverse.

Contrary to claimant's assertions, the Act does not provide for the payment of attorneys' fees to all successful claimants. Section 28 of the Act, 33 U.S.C. § 928, ⁵ limits the award of attorneys' fees to those cases in which the employer or carrier disputes the existence or extent of an obligation to pay compensation. It is the employer or carrier who must pay the claimant's attorney's fee in those cases, and not the special fund. Section 44(j) of the Act, 33 U.S.C. § 944(j), provides that the proceeds of the fund shall be available for (1) payment of the initial and subsequent annual adjustments in compensation for total and permanent disability or death which occurred prior to the effective date of the 1972 amendments, (2) payment of additional compensation for injury increasing disability, assistance for employees undergoing vocational rehabilitation and payment for medical treatment where the employer defaults, (3) reimbursement to the Treasury, and (4) defraying the expenses of medical examinations. It does not provide for the payment of attorneys' fees. ⁶ Congress clearly recognized that the responsibility for fees would occasionally fall on claimants, since it provided that approved ⁷ attorneys' fees, ". . . in cases in which the obligation to pay the fee is upon the claimant, may be made a lien upon the compensation due under an award . . . ." § 28(c) of the Act, 33 U.S.C. § 928(c). Thus, although the intent of Congress in passing the Act was to aid longshoremen, Reed v. S.S. Yaka, 373 U.S. 410, 415, 83 S.Ct. 1349, 1353, 10 L.Ed.2d 448 (1963), Congress did not intend that aid to extend to the payment of attorneys' fees in other than limited circumstances. ⁸

Moreover, this court has previously recognized the limitations on counsel fee awards under § 28. In Portland Stevedoring Co. v. Director, 552 F.2d 293 (9th Cir. 1977), we reversed the BRB's order for fees on appeal against the employer when the BRB's order had not established the existence or extent of the employer's liability. We held that § 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." Id. at 294. Similarly, in National Steel & Shipbuilding Co. v. U.S. Dept. of Labor, 606 F.2d 875 (9th Cir. 1979), we held that Congress intended to limit liability for counsel fees to cases in which the parties disagreed on the existence or extent of liability. Id. at 882. The case before us simply did not involve such a dispute.

The claimant also points to § 44(j)(2) of the Act, 33 U.S.C. § 944(j)(2), in support of his contention that awarding him his attorney's fee from the special fund is not repugnant to the purposes of the fund. His reliance on that provision is misplaced. That subsection, in part, provides that the proceeds of the fund shall be available for payments under § 39(c) of the Act. Section 39(c)(1), 33 U.S.C. § 939(c)(1), grants the Secretary of Labor discretion to provide "legal assistance in processing a claim." Robertson, however, is not requesting assistance in processing his claim ; rather, he is requesting an award for fees after he has himself obtained legal assistance and has fully processed his claim.

This interpretation ⁹ of the language of § 39(c)(1) is supported by the legislative history of the 1972 amendments, which indicates that Congress intended the provision to empower the Secretary to provide legal counsel in needy cases:

The bill also makes legal assistance in processing the claim for benefits under this Act available in needy cases upon request subject to the Secretary's discretion. It is the committee's desire that the Secretary construe this provision as liberally as possible so as to provide any worker in need of legal assistance such counsel . . . .

H.R.Rep. No. 92-1441, supra at 13, reprinted in (1972) U.S.Code Cong. & Admin.News, pp. 4698, 4710 (emphasis supplied). ¹⁰

II.

As the foregoing discussion demonstrates, the Act does not provide for the payment of attorney's fees from the special fund, and the American Rule therefore operates to preclude an award of attorney's fees from the fund in the usual case. Alyeska Pipeline Service Co. v. Wilderness Society, supra, 421 U.S. at 247, 95 S.Ct. at 1616. Several exceptions to the American Rule have developed, however, based on the "equitable powers of the court . . . to award attorneys' fees when 'overriding...