Sargent v. Director, Office of Workers' Compensation Programs, U.S. Dept. of Labor
| Decision Date | 04 January 1988 |
| Docket Number | No. 86-3890,86-3890 |
| Citation | 836 F.2d 1348 |
| Parties | Unpublished Disposition NOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit. Isaac SARGENT and Anna Sargent, Petitioners, v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, United States Dept. of Labor, Respondent. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Before LIVELY, Chief Judge, WELLFORD, Circuit Judge, and ROBERT M. McRAE, Senior District Judge. *
Claimant, Isaac Sargent (Sargent) filed a black lung claim for benefits under 30 U.S.C. 901, et seq. in 1973 which was denied in 1976. A second application was filed with the benefit of counsel, Robert K. Roeller, in June of 1977. Roeller had the Sargents enter into a contingent fee agreement that Roeller receive 25% of any benefits received from the black lung disability claim. Sargent died on May 2, 1979 and his wife, Anna, has been substituted as claimant. Shortly afterward, benefits were approved after submission by attorney Roeller of additional medical evidence coupled with the passage of the Black Lung Benefits Reform Act of 1977, which greatly liberalized award of benefits. Anna Sargent received her first check of $25,869.70 of which Roeller allegedly placed $6,609.87 in an escrow account, representing what he conceived to be the agreed arrangement. 1
On August 24, 1979, Roeller filed an application for approval of attorney fees with the Department of Labor requesting the $6,609.86 withheld for 73 claimed hours of legal services. Claims examiner Chaffins determined that the Black Disability Trust Fund was wholly liable for attorney fees and ordered release only of $500.00 to Sargent. On July 25, 1983, in a supplemental award, deputy commissioner Ratliff ordered a fee of $1,337.50 for Roeller based upon 26 3/4 hours of work at $50 per hour. He disallowed the balance of hours claimed as excessive or as irrelevant to the claim. The deputy commissioner further ordered Roeller to refund the money in escrow because the Black Lung Disability Trust Fund, not the claimant, was liable for the attorney fees. The net effect was to allow Roeller a total of $1,837.50 for his services.
Roeller requested reconsideration of the supplemental award, which was denied on September 7, 1983. On appeal to the Benefits Review Board, Roeller argued that the deputy commissioner's reduction in the hours submitted for legal services was arbitrary, capricious and an abuse of discretion and that he had no authority to set aside the fee agreement reached in 1976. The Board affirmed the deputy commissioner's decision on August 19, 1986. This appeal followed.
Roeller argues that the deputy commissioner has illegally voided his valid agreement in determining to pay fees based on an arbitrary hourly rate and based on an arbitrary and capricious disallowance of some of his claimed hours. He claims this is an abuse of discretion and illegal. See Marcum v. Director, OWCP, 2 BLR 1-894 (1980). He also challenges what he claims is a retroactive application of the Black Lung Act rules and regulations to this 1976 contract. He asserts that this is a due process denial and also an abrogation of his contract rights under the Constitution, because he had already completed his part of the contract.
The respondent concedes that Roeller may properly pursue the appeal since the case concerns attorney fees to be awarded for services provided to a federal benefits claimant, but respondent relies on Paul v. United States, 687 F.2d 364 (Ct.Cl.1982), cert. denied, 641 U.S. 927 (1983) for the proposition that the federal government can legitimately set limits upon the amount of fees an attorney receives for services rendered in assisting a client in securing a federal benefit. This principle applies, according to respondent, regardless of a prior private contract between the attorney and his client. Furthermore, respondent argues that the law governing Roeller's fee has remained the same during the pendency of the claim throughout counsel's representation. See 20 C.F.R. 720.226 (1973) and 20 C.F.R. 725.365 (1978).
The 1978 regulation, Sec. 725.365 states in part:
No fee charged for representation services rendered to a claimant with respect to any claim under this part shall be valid unless approved under this subpart. No contract or prior agreement for a fee shall be valid.
The regulation directs that an application for the fee sought should be made to the deputy commissioner or official before whom the services were performed and should itemize the work done and expenses incurred as well as the billing rate. This was the procedure which Roeller was directed to follow.
The principle urged by respondent has been applied in the award of fees under 42 U.S.C. Sec. 406 concerning social security benefits. See Gardner v. Mitchell, 391 F.2d 582 (5th Cir.1968); Robinson v. Gardner, 374 F.2d 949 (4th Cir.1967); Redden v. Celebrezze, 361 F.2d 815 (4th Cir.1966); Lambert v. Celebrezze, 361 F.2d 677 (4th Cir.1966); and, Blankenship v. Gardner, 256 F.Supp. 405 (W.D.Va.1966).
The Paul decision relied upon by respondent concerned attorney fees under the Alaska Native Claims Settlement Act. The Court of Claims there held that legislation placing limitations on attorney fees can apply to preexisting attorney fee contracts for contingent fees as well as those made subsequent to the legislation's passage. The court noted that there "is a long history of legislation...
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