Newport News Shipbuilding and Dry Dock v. Brown

• Decision Date: 19 July 2004
• Docket Number: No. 03-1480.,03-1480.
• Citation: 376 F.3d 245
• Parties: NEWPORT NEWS SHIPBUILDING AND DRY DOCK COMPANY, Petitioner, v. Beverly Anita BROWN; Director, Office of Workers' Compensation Promams, United States Department of Labor, Respondents.
• Court: U.S. Court of Appeals — Fourth Circuit

376 F.3d 245

NEWPORT NEWS SHIPBUILDING AND DRY DOCK COMPANY, Petitioner, v. Beverly Anita BROWN; Director, Office of Workers' Compensation Promams, United States Department of Labor, Respondents.

No. 03-1480.

United States Court of Appeals, Fourth Circuit.

Argued: May 6, 2004.

Decided: July 19, 2004.

COPYRIGHT MATERIAL OMITTED

ARGUED: Christopher Roland Hedrick, Mason, Mason, Walker & Hedrick, P.C., Newport News, Virginia, for Petitioner. Gregory Edward Camden, Montagna, Breit, Klein & Camden, L.L.P., Norfolk, Virginia, for Respondent Brown; Joshua Thomas Gillelan, II, Office of the Solicitor, United States Department of Labor, Washington, D.C., for Director, Office of Workers' Compensation Programs.

ON BRIEF: Howard M. Radzely, Solicitor of Labor, Donald S. Shire, Associate Solicitor, Mark A. Reinhalter, for Longshore, Washington, D.C., for Director, Office of Workers' Compensation Programs.

Before NIEMEYER, MICHAEL, and GREGORY, Circuit Judges.

Petition for fees granted by published opinion. Judge MICHAEL wrote the opinion, in which Judge NIEMEYER and Judge GREGORY joined.

OPINION

MICHAEL, Circuit Judge:

We have before us an employee's petition for attorney's fees under § 28 of the Longshore and Harbor Workers Compensation Act (LHWCA), 33 U.S.C. § 928. Section 28 allows reasonable attorney's fees to an employee who successfully prosecutes a claim for compensation. The main question today is whether an award to an employee under § 14(f) for her employer's late payment of compensation is also compensation. If it is, the fee provision is triggered. We hold that an award for late payment under § 14(f) is compensation, and we grant the employee's petition for attorney's fees incurred in defending the § 14(f) award in this court.

I.

Beverly A. Brown and her employer, Newport News Shipbuilding and Dry Dock Company (Newport News), settled her workers' compensation claim for a lump sum of $17,500, and the district director entered an order approving the compensation award on December 18, 2000. See 33 U.S.C. § 908(i). Newport News paid Brown her award eighteen days later, on January 5, 2001. Thereafter, Brown asserted an additional claim under § 14(f), which requires an employer to pay "an amount equal to 20 per centum" of any compensation "payable under the terms of an award [that] is not paid within ten days after it becomes due." Id. § 914(f). Newport News opposed Brown's additional claim, arguing that it had made a good faith attempt to deliver the compensation check to Brown in a timely manner, but she had intentionally evaded delivery. The District Director of the U.S. Department of Labor's Office of Workers' Compensation Programs initially denied the claim for late payment. Brown then requested a hearing before an administrative law judge, and the ALJ, after over-seeing discovery, remanded the case to the district director. After reviewing the evidence gathered during discovery, the district director determined that Newport News had not paid the settlement within ten days as required by § 14(f); Brown was therefore awarded an additional $3500. Newport News appealed the district director's order to the Benefits Review Board (the Board), which dismissed the appeal on March 21, 2003. The company then petitioned this court for review of the Board's March 21, 2003, dismissal order. On June 19, 2003, before briefs were filed, we granted Newport News's unopposed motion to withdraw its petition for review. The company then paid Brown the § 14(f) award on June 23, 2003.

On July 7, 2003, Brown filed a petition to recover $2068.80 in attorney's fees for work performed by her counsel in opposing the petition for review filed in this court by Newport News to set aside the $3500 late payment award. Newport News objected to the fee petition, arguing that the LHWCA's fee-shifting provisions, see id. § 928, cannot be used to recover legal fees incurred in obtaining a § 14(f) late payment award. Newport News also objected to the size of the requested fee. The parties filed supplemental briefs on the fee issue, and we then heard oral argument.

II.

Brown argues that because her award for late payment under § 14(f) is compensation under the relevant provisions of the LHWCA, she is entitled to attorney's fees for obtaining the award. Newport News disagrees, arguing that the § 14(f) payment is a penalty, which prevents Brown from shifting her fees to the company. We start with the language of the Act. If it is plain, we apply it "according to its terms." United States v. Ron Pair Enter., Inc., 489 U.S. 235, 241, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989). To determine whether the language is plain, we consider "the language itself, the specific context in which that language is used, and the broader context of the statute as a whole." Robinson v. Shell Oil Co., 519 U.S. 337, 341, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997) (quotation marks and citations omitted). If the language is ambiguous, "in that it lends itself to more than one reasonable interpretation, our obligation is `to find that interpretation which can most fairly be said to be imbedded in the statute, in the sense of being most harmonious with its scheme and the general purposes that Congress manifested.'" United States ex rel Wilson v. Graham County, 367 F.3d 245, 248 (4th Cir.2004) (quoting Comm'r v. Engle, 464 U.S. 206, 217, 104 S.Ct. 597, 78 L.Ed.2d 420 (1984)).

According to § 28 of the LHWCA, if an employer "declines to pay any compensation ... after receiving written notice of a claim," and the employee uses an attorney "in the successful prosecution of [her] claim, there shall be awarded ... a reasonable attorney's fee." 33 U.S.C. § 928(a). Section 28 thus authorizes attorney's fees only after the successful prosecution of a claim for compensation. Brown had a claim for an additional award under § 14(f) when she did not receive payment of her basic award (the settlement) within ten days after it became due. She used a lawyer in the successful prosecution of her § 14(f) claim for the late payment award. This brings us to the question presented today: is a § 14(f) late payment award compensation under the LHWCA.

Section 14(f) says:

If any compensation, payable under the terms of an award, is not paid within ten days after it becomes due, there shall be added to such unpaid compensation an amount equal to 20 per centum thereof, which shall be paid at the same time as, but in addition to, such compensation.

33 U.S.C. § 914(f). The twenty percent addition fits within the LHWCA's definition of compensation, which is "the money allowance payable to an employee or [her] dependents as provided for in this [Act]." Id. § 902(12). Specifically, the amount due for late payment satisfies the definition because it is a "money allowance payable" to the employee who is due the basic compensation award.

In arguing that the amount payable under § 14(f) is not compensation, Newport News ignores the definition of compensation and focuses on just the section itself (and only a few words at that). A § 14(f) award is not compensation, the company says, because it is a payment "in addition to [ ] such compensation." This argument leaves out § 14(f)'s triggering language which says that if compensation due "under ... an award" is not paid within ten days, "there shall be added to such unpaid compensation an amount equal to 20 per centum thereof, which shall be paid ... in addition to [ ] such compensation." Id. § 914(f). A look at all of the relevant language in § 14(f) reveals that the term "such compensation" simply refers to "unpaid compensation," which in turn refers to the amount due under the original award. Thus, the term "such compensation" at the end of § 14(f) does not distinguish the amount payable under that section from compensation.

After ignoring the Act's broad definition of compensation and focusing on only the last few words in § 14(f), Newport News argues that the assessment for late payment is a penalty, not compensation. This argument overlooks the nine different LHWCA provisions (§ 14(f) is not among them) that expressly characterize their assessments as penalties or fines. See Ingalls Shipbuilding, Inc. v. Dalton, 119 F.3d 972, 977 (Fed.Cir.1997) (listing the nine provisions, which include, for example, the monetary penalty for failing to send an injury report to the Secretary of Labor, see 33 U.S.C. § 930(e)). Moreover, § 44(c)(3) says that "all amounts collected as fines and penalties under the [LHWCA] shall be paid into" a special LHWCA fund. Id. § 944(c)(3). Section 14(f), on the other hand, does not contain the word fine or penalty, and it directs payment to the injured employee. This leads us to agree with the Federal Circuit's conclusion: "[i]f Congress had intended that [late payment awards] under [§ 14] be treated as fines or penalties, it would surely have done so by referring to them as such or would have directed these payments to the special fund." Ingalls Shipbuilding, 119 F.3d at 977-78. But see Burgo v. General Dynamics Corp., 122 F.3d 140, 145 (2d Cir.1997) (holding that payments under § 914(f) are "properly characterized as penalties" but failing to take into account either the Act's definition of compensation or its separate treatment of compensation and penalties). In sum, Congress created a simple system for categorizing payments made by employers under the LHWCA: payments going directly to an employee are compensation, see 33 U.S.C. § 902(12), while payments going to the LHWCA special fund are penalties or fines, see id. § 944(c)(3).

When the LHWCA's broad definition of compensation is read with the language of § 14(f), and the Act's structural differentiation between compensation and penalties is taken into account, it is reasonably clear that a § 14(f) late payment award to an employee is compensation. If, however, we assume for the sake of argument that the Act is ambiguous on this point, and we investigate further, we still...