Todd Shipyards Corp. v. Director, Office of Workers' Compensation Programs, U.S. Dept. of Labor
| Decision Date | 15 October 1976 |
| Docket Number | Nos. 75-1251,75-1828,s. 75-1251 |
| Citation | 545 F.2d 1176 |
| Parties | TODD SHIPYARDS CORPORATION and The Travelers Insurance Company, Petitioners, v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, and Forest T. Hilton, Respondents. Forest T. HILTON, Petitioner, v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, Respondent. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Robert H. Madden (argued), of Howard, LeGros, Buchanan & Paul, Seattle, Wash., for petitioners in 75-1251.
Robert C. Nickels (argued), Seattle, Wash., for petitioner in 75-1828.
Harry L. Sheinfeld, Atty. (argued), of U. S. Dept. of Labor, Washington, D. C., for respondents in 75-1251.
Robert H. Madden (argued), Seattle, Wash., for respondent in 75-1828.
Before WRIGHT and ANDERSON, Circuit Judges, and WOLLENBERG, * District Judge.
These consolidated cases are petitions for review of an order of The Benefits Review Board, United States Department of Labor, affirming a compensation order issued by Edwin S. Bernstein, Administrative Law Judge, United States Department of Labor, pursuant to the provisions of the Longshoremen's and Harbor Workers' Compensation Act, 44 Stat. 1424, as amended, 33 U.S.C.A. 901, et seq.
In his order, the Administrative Law Judge found that the claimant, Forest T. Hilton, hereinafter "claimant," was permanently disabled as a result of a respiratory disease arising out of and in the course of employment with Todd Shipyards Corporation, hereinafter "employer." The Administrative Law Judge determined the amount of benefits to be awarded based on a finding that claimant's average weekly wage was his actual earnings for the year immediately preceding his injury, as shown by his W-2 form, divided by 52 weeks. He also ordered employer to pay an attorney's fee of $2,150.00 to Maurice Kadish, attorney of record for claimant. This fee was to include remuneration to Mr. Larry Meyers, a nonlawyer who acted as claimant's "representative."
Claimant contests the weekly wage as being inadequate and employer contests the award of attorney fees as being improper as a matter of law.
We affirm the findings of the Administrative Law Judge and The Benefits Review Board as to the award of the weekly wage. However, we remand the award of the attorney fees for reconsideration.
Jurisdiction rests on 33 U.S.C. 921(c).
The Administrative Law Judge found that the claimant's average weekly wage was $174.36 and The Benefits Review Board found the record supported such a determination.
The Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C.A. 921(b) (3), as amended October 27, 1972, provides that:
On appeal here these findings will not be disturbed unless it can be shown that they are unsupported by substantial evidence Banks v. Chicago Grain Trimmers Ass'n 390 U.S. 459, 467, 88 S.Ct. 1140, 20 L.Ed.2d 30 (1968), Walker v. Rothschild Intern. Stevedoring Co., 526 F.2d 1137, 1138 (9th Cir. 1975), or that they are not in accord with the law, Cardillo v. Liberty Mut. Ins. Co., 330 U.S. 469, 67 S.Ct. 801, 91 L.Ed. 1028 (1947), or that they are irrational, O'Keefe v. Smith, Hinchman & Grylls Associates, 380 U.S. 359, 85 S.Ct. 1012, 13 L.Ed.2d 895 (1965).
The question here is whether there is "substantial evidence" to justify the award of $174.36. We find there is.
The only evidence admitted by the Administrative Law Judge relevant to the determination of wages was a W-2 form of the claimant's which set out his gross wages for the previous year as $9,066.72. Both the claimant and his representative at the proceedings agreed that this was a correct figure for W-2 gross wages. Claimant himself agreed that this figure for one year's wages was "reasonable."
From this W-2 figure the Administrative Law Judge then computed the average weekly wage by dividing the yearly figure by 52 as provided under the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C.A. 910(c) and (d). A question arises as to whether the Administrative Law Judge correctly used 910(c) and (d) instead of the computation methods under 910(a) or 910(b) which compute out the average weekly wage based on a differing formula using an average daily wage. The rule is that 910(c) is to be employed ". . . whenever (a) or (b) cannot reasonably and fairly be applied." Marshall v. Andrew F. Mahoney Co., 56 F.2d 74, 78 (9th Cir. 1932).
The Administrative Law Judge correctly applied the computation formula in 910(c) and (d). There was no fair or reasonable way to apply the "daily wage" formulas of 910(a) or 910(b) because no evidence was introduced which could clearly determine the claimant's average daily wage. Therefore, the only competent evidence the Administrative Law Judge could use was the yearly wage and 910(c) and (d) are the sections which reduce this figure to the average weekly wage.
Claimant contends that the award of $174.36 was inadequate and instead should have been $243.00 per week. The burden is on the claimant in this case to show that there was no substantial evidence to support the compensation order complained of here. Southern Stevedoring Co. v. Henderson,175 F.2d 863 (5th Cir. 1949). Claimant has shown no evidence on the record which would contradict the finding of the Administrative Law Judge. Claimant argues that certain evidence was submitted to the Administrative Law Judge, but that it was excluded from evidence and ignored by the judge in making his decision as to the weekly wage. Not only was the evidence submitted ex parte with no notice to opposing counsel, but it was submitted untimely as well. The Administrative Law Judge correctly exercised his discretion and excluded the evidence.
The Administrative Law Judge's determination of the average weekly wage was based upon substantial evidence, was rational, and was in accordance with law. Therefore, we affirm this decision.
To determine the award of attorney fees, the Administrative Law Judge requested the attorney of record, Maurice Kadish, to submit a fee application stating time and effort spent on the case. He also requested that Mr. Kadish serve a copy of this fee application upon counsel for the employer. This application was never served. The first notice that employer's counsel received regarding the award of attorney fees was the actual order which required that employer pay $2,150.00 in attorney fees. This fee was computed by taking the number of hours worked and multiplying this figure times $45.00, the "customary fee" of Mr. Kadish's office. In his order the Administrative Law Judge indicated that this attorney fee to Mr. Kadish included payment to the nonlawyer, Larry Meyers, who was acting throughout the proceedings as claimant's lay "representative."
We find that two problem areas exist in regard to this award of attorney fees. The first is lack of notice to opposing counsel of the fee application claiming attorney fees. The second is the possible award of attorney fees at attorney rates to a lay representative.
Claimant contends that under the Longshoremen's Act there is no requirement that the opposing counsel be given notice of the claim for attorney fees. The Benefits Review Board agreed and found that the regulations under the Longshoremen's Act do not require notice or that opposing counsel be consulted before fixing the amount of attorney fees to be awarded.
This is a correct statement of the law before the 1972 amendments to the Longshoremen's Act. Before 1972 the award of attorney fees came out of the claimant's compensation award and was not a separate liability for the employer. Therefore, the employer's only interest would be in the actual award of compensation to the claimant. Once this amount was settled, the employer had no further interest in the award. Any award of attorney fees then was a matter solely between the claimant and his attorney and could not increase the employer's liability. Associated Indemnity Corporation v. Marshall, 71 F.2d 235 (9th Cir. 1934).
After 1972, however, awards of attorney fees in cases such as this are a separate liability of the employer and are paid directly from the employer to the attorney. No longer are they merely a part of the claimant's award. See 33 U.S.C. 928 and the regulations thereunder, 20 C.F.R. 702.131-134.
We also disagree with The Benefit Review Board's reading of the statutes that no notice is required.
Section 19 of the Longshoremen's Act (33 U.S.C. 919), as amended October 27, 1972, governs the procedures under the Act. This section provides:
"(d) Notwithstanding any other provisions of this Act (33 U.S.C. §§ 901-950), any hearing held under this Act (33 U.S.C. §§ 901-950) shall be conducted in accordance with the provisions of Section 554 of Title 5 of the United States Code . . ."
The pertinent portions of 5 U.S.C. 554 (Administrative Procedure Act) provide that:
"(b) Persons entitled to notice of an agency hearing shall be timely informed of
(1) the time, place, and nature of the hearing;
(1) the submission and consideration of facts, arguments, offers of settlement, and proposals of adjustment . . .
(2) to the extent that the parties are unable so to determine a controversy by consent, hearing and decision on notice and in accordance with Sections 556 1 and 557 of this title.
(d) . . . Except to the extent required for the disposition of ex parte matters as...
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