Holliday v. Todd Shipyards Corp.

Citation654 F.2d 415
Decision Date28 August 1981
Docket NumberNo. 80-1507,80-1507
PartiesM. C. HOLLIDAY, Petitioner, v. TODD SHIPYARDS CORPORATION, The Travelers Insurance Company, and Director, Office of Workers' Compensation Programs, United States Department of Labor, Respondents. . Unit A
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

James B. Eaton, Houston, Tex., for petitioner.

G. Wesley Urquhart, Houston, Tex., for Todd Shipyards et al.

Marianne D. Smith, Div. of Employee Benefits, Washington, D. C., for respondents.

Petition for Review of an Order of the Benefits Review Board.

Before CHARLES CLARK and GEE, Circuit Judges, and SPEARS, * District Judge.

GEE, Circuit Judge:

Appellant was seriously injured in the course of his employment and subsequently sought benefits under the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. §§ 901-950 (1976) ("Act"). His employer, Todd Shipyards Corporation, and its carrier, Travelers Insurance Company, commenced payment of temporary total disability benefits. The case was tried before an administrative law judge ("ALJ"), who determined that appellant was temporarily totally disabled from May 30, 1975, the day after he sustained the injury, to February 1, 1978, the date he attained maximum medical recovery, and that he was permanently totally disabled thereafter. The Benefits Review Board ("BRB") affirmed the ALJ's decision. In brief and oral argument before this court on March 19, 1981, the appellant sought to have the date of his permanent total disability made retroactive to the date of his injury, some two years and eight months earlier. Appellant's request was made in order to obtain certain annual inflation adjustments in his rate of permanent total disability compensation under section 10(f) of the Act, 33 U.S.C. § 910(f). Under that section, inflation adjustments to benefit levels are available only for claimants who are permanently totally disabled. The appellant challenged the administrative rule relied upon by the ALJ and the BRB by which a total disability becomes permanent only when maximum medical improvement is attained. At oral argument appellee, the director of the Office of Workers' Compensation Programs, United States Department of Labor, supported the appellant's entitlement to section 10(f) adjustments but contended that appellant's method for obtaining those adjustments was incorrect under the Act. Neither the appellant's employer, Todd Shipyards, nor the employer's carrier, Travelers, participated in the appeal before this court or before the BRB. At the suggestion of this court, the parties produced a "Proposal for Determining Permanent Total Disability under the Longshoremen's and Harbor Workers' Compensation Act," which is appended to this opinion. We agree with and adopt the director's proposed alternative method for computing permanent total disability compensation, and we remand to the ALJ for computation of the correct compensation rate in accordance with the parties' proposal.

An issue remaining before this court is appellant's counsel's motion for attorneys' fees. Counsel argues that he is entitled to attorneys' fees under section 28 of the Act, 33 U.S.C. § 928, because counsel was "successful in his appeal against the defendants, Benefits and Review Board, the U.S. Department of Labor, Todd Shipyard and Travelers Insurance Company." In the alternative, counsel argues that he is entitled to be paid attorneys' fees from the special fund authorized by section 44 of the Act, 33 U.S.C. § 944.

At the outset, we note that counsel's request suffers from certain irregularities. Counsel requests a fee award extending to attorney services before the BRB. As we recently pointed out, however, attorneys' fees for services relating to matters before the BRB "must be set in the first instance by the Board and not by this court." Hole v. Miami Shipyards Corp., 640 F.2d 769, 773 (5th Cir. 1981). This court has stated that it has "neither the authority nor the competence" to ascertain what fees should have been awarded by the BRB. "The statute, in our view, intends each body the hearing examiner, the Board, and the reviewing court separately to assess the worth of the claimant's representation before it." Ayers Steamship Co. v. Bryant, 544 F.2d 812, 814 (5th Cir. 1977). In addition, counsel's motion contains mathematical as well as legal errors. 1 Finally, counsel's petition is not a complete statement of the extent and character of necessary work done. While the Act does not establish standards for the courts of appeals to follow in the award of attorneys' fees, this court has followed the lead of the Third Circuit in accepting as guidelines those regulations followed by the BRB. See 20 C.F.R. § 802.203 (1980); Atlantic & Gulf Stevedores, Inc. v. Director, OWCP, 542 F.2d 602, 610 (3d Cir. 1976); Ayers Steamship Co. v. Bryant, 544 F.2d at 814. Counsel's petition does not specify the professional status of the persons doing each category of work; indeed, the character of the work done is scarcely particularized at all. Are we to assume that an attorney commanding an hourly rate of $150 did all of the work involved, including the printing or reproducing of briefs? This is particularly troubling here, given the arguably inflated nature of counsel's fee request. 2 Counsel should bear in mind that, to be approved, fees should be "reasonably commensurate with the necessary work done and shall take into account the quality of the representation, the complexity of the legal issues involved, (and) the amount of benefits awarded...." 20 C.F.R. § 802.203(d). These irregularities, however, need not trouble us further, given our determination that counsel is not entitled to attorneys' fees from either the employer under section 28 of the Act or from the United States government under the special fund.

Attorneys' fees cannot be assessed against the employer or carrier in this case. Section 28 does not provide for attorneys' fee awards in every case in which the claimant is successful. 3 In Hole v. Miami Shipyards Co., 640 F.2d at 774, this court clarified under what circumstances an employer or carrier may be responsible for attorneys' fees:

From this comprehensive scheme regulating attorney's fees we discern a congressional intent that when an employer contests its liability for compensation in whole or in part and the claimant is ultimately successful, the employer and not the claimant must pay the claimant's attorney's fees for services necessary to that success "regardless of how close a case might be which is litigated but finally lost by (the employer)."

(emphasis added and citation omitted). As we pointed out in Savannah Machine & Shipyard Co. v. Director, OWCP, 642 F.2d 887, 889 (5th Cir. 1981), section 28 authorizes attorneys' fees in two situations only: (a) where the employer refuses to pay any compensation for a work-related injury, and (b) where the employer tenders partial compensation but refuses to pay the total amount claimed. In either case, the claimant must, of course, obtain the services of an attorney to prosecute his claim successfully. Neither situation exists here. The employer and carrier were actively involved only before the ALJ, and the ALJ awarded attorneys' fees against them. Neither the employer nor its carrier participated in the claimant's appeal before the BRB or before this court. They have not contested the claim here or there within the meaning of sections 28(a) or (b).

Counsel's claim for fees to be assessed against the special fund also fails for the reasons elaborated by the Ninth Circuit in Director, OWCP v. Robertson, 625 F.2d 873 (9th Cir. 1980). This circuit has not heretofore passed on the question whether the special fund may ever be required to pay attorneys' fees. Savannah Machines & Shipyard Co., 642 F.2d at 890 n.8. After consideration, we are convinced that the Ninth Circuit has given a fair and reasonable interpretation to the question, and we adopt its opinion in Robertson.

Under the American Rule, adopted by the federal courts, even successful litigants cannot recover attorneys' fees unless a statute imposes liability or some other exceptional circumstance warrants a departure from the rule. Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975); Noritake Co. v. M/V Hellenic Champion, 627 F.2d 724, 730 (5th Cir. 1980). As the Ninth Circuit pointed out in Robertson, 625 F.2d at 876-77, the statute does not provide for the payment of attorneys' fees from the special fund. Here, as in the Robertson case, none of the established nonstatutory exceptions 4 to the American Rule are applicable, and there is no contract between the parties to enforce.

The statutory exceptions to the American rule are, as the Supreme Court affirmed in Alyeska, "specific and explicit provisions for the allowance of attorneys' fees under selected statutes granting or protecting various federal rights." 421 U.S. at 260, 95 S.Ct. at 1623. There is no specific and explicit provision for the assessment of attorneys' fees against the special fund under the Act. The list of expressly authorized payments in section 44(j) of the Act, 33 U.S.C. § 944(j), does not include attorneys' fees and makes no mention of section 28. 5

The Ninth Circuit also drew an important distinction between cases arising under the Longshoremen's Act and the Black Lung Benefits Act, 30 U.S.C. §§ 901-945:

Several circuits have held the Black Lung Disability Trust Fund liable for attorney's fees incurred by claimants of black lung benefits whose last coal mine employment terminated prior to 1970. The statute which created that fund, the Federal Coal Mine Health & Safety Act of 1969, 30 U.S.C. § 901 et seq., was amended in 1978, and § 28(a) of the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. § 928(a), ... was incorporated by reference. A separate section was added, however, providing that references to the...

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