Day v. James Marine, Inc.

518 F.3d 411, 2008 A.M.C. 1600, 2008 U.S. App. LEXIS 5080, 2008 WL 612347
Court of Appeals for the Sixth Circuit·Decided March 7, 2008·No. 06-4004·Published·Cited by 22 cases

Opinions

SUTTON, J., delivered the opinion of the court, in which BERTELSMAN, D.J., joined. ROGERS, J. (pp. 421-25), delivered a separate opinion concurring in part and dissenting in part.

OPINION

SUTTON, Circuit Judge.

There is a little more to this dispute than the topic (attorney’s fees) and the amount at stake (less than $15,000) would suggest. Larry Day says that the Benefits Review Board erred in determining that a portion of the fees he incurred in seeking workers’ compensation did not shift to his employer, James Marine, under the Longshore and Harbor Workers’ Compensation Act. Because the Board correctly determined that the Act does not allow an employee to collect attorney’s fees incurred before the employer has rejected the employee’s claim, we affirm this aspect of the Board’s decision. But because the Act does allow — and indeed requires — fee shifting from the time the employer rejects the employee’s claim through the employee’s successful prosecution of that claim, we reverse the Board’s contrary ruling on this point.

I.

Larry Day, a 60-year-old welder, began working for James Marine, a boat-repair company, in 1985. In 2000, Day injured his neck while working for the company on the Tennessee River near Paducah, Kentucky, forcing Day to take disability leave. Over the next several years, Day developed additional complications from his neck injury and eventually was forced to stop working. As a result, he filed a claim for workers’ compensation under the Act, which ultimately succeeded.

After obtaining compensation, Day sought attorney’s fees. The Benefits Review Board allowed Day to obtain fees for two time periods: (1) from October 30, 2001 (when James Marine received the deputy commissioner’s notice of claim) until January 17, 2002 (when James Marine began paying disability compensation); and (2) from July 28, 2003 (when James Marine stopped paying disability compen[414]*414sation) until September 16, 2003 (when the case was transferred to an Administrative Law Judge). The end result left James Marine liable for $4,690 in fees and Day responsible for $9,415. Day and James Marine each appeal aspects of this award.

II.

Enacted in 1927, the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. § 901 et seq., provides compensation for employees injured while working on the navigable waters or adjoining land areas of the United States, id. § 903; see also Ne. Marine Terminal Co. v. Caputo, 432 U.S. 249, 256-57, 97 S.Ct. 2348, 53 L.Ed.2d 320 (1977). Since 1972, the Act, like several other federal statutes, has rejected the “American Rule,” which requires litigants to bear their own expenses, Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 247, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975), and has permitted claimants to obtain “a reasonable attorney’s fee” under certain circumstances, 33 U.S.C. § 928(a), (b); see also, e.g., 42 U.S.C. § 1988(b); id. § 2000e-5(k) (“Title VII”). Unlike fee-shifting statutes such as § 1988 and Title VII, however, the Act makes fee awards mandatory. It says that a reasonable attorney’s fee “shall” be paid, 33 U.S.C. § 928(a), (b), not that it “may” be paid, see, e.g., 42 U.S.C. § 1988(b); id. § 2000e-5(k). And unlike these other statutes, the Act establishes a highly reticulated process for determining when mandatory fees must be awarded.

Section 928(a) requires fee awards where the employer refuses to pay workers’ compensation after receiving notice of the claim:

If the employer or carrier declines to pay any compensation on or before the thirtieth day after receiving written notice of a claim for compensation having been filed from the deputy commissioner, on the ground that there is no liability for compensation within the provisions of this chapter and the person seeking benefits shall thereafter have utilized the services of an attorney at law in the successful prosecution of his claim, there shall be awarded, in addition to the award of compensation, in a compensation order, a reasonable attorney’s fee against the employer or carrier in an amount approved by the deputy commissioner, Board, or court, as the case may be, which shall be paid directly by the employer or carrier to the attorney for the claimant in a lump sum after the compensation order becomes final.

33 U.S.C. § 928(a).

Before an employee may obtain fees, in other words, (1) he must file a claim with the deputy commissioner; (2) the employer must receive written notice of the claim from the deputy commissioner; (3) the employer must decline to pay compensation or allow 30 days to lapse without paying compensation; and (4) the employee “thereafter” must use an attorney to prosecute his claim successfully.

Section 928(b) authorizes fees in a different setting — where the employer pays workers’ compensation but a dispute develops over the amount of compensation due. It says:

If the employer or carrier pays or tenders payment of compensation without an award pursuant to section 914(a) and (b) of this title, and thereafter a controversy develops over the amount of additional compensation, if any, to which the employee may be entitled, the deputy commissioner or Board shall set the matter for an informal conference and following such conference the deputy commissioner or Board shall recommend in writing a disposition of the controversy. If the employer or carrier refuse[s] to accept such written recommendation, [415]*415within fourteen days after its receipt by them, they shall pay or tender to the employee in writing the additional compensation, if any, to which they believe the employee is entitled. If the employee refuses to accept such payment or tender of compensation, and thereafter utilizes the services of an attorney at law, and if the compensation thereafter awarded is greater than the amount paid or tendered by the employer or carrier, a reasonable attorney’s fee based solely upon the difference between the amount awarded and the amount tendered or paid shall be awarded in addition to the amount of compensation. The foregoing sentence shall not apply if the controversy relates to degree or length of disability, and if the employer or carrier offers to submit the case for evaluation by physicians employed or selected by the Secretary, as authorized in section 907(e) of this title and offers to tender an amount of compensation based upon the degree or length of disability found by the independent medical report at such time as an evaluation of disability can be made.

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Day v. James Marine, Inc., 518 F.3d 411, 2008 A.M.C. 1600, 2008 U.S. App. LEXIS 5080, 2008 WL 612347 (6th Cir. 2008).

518 F.3d 411 (Day v. James Marine, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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