Newport News Shipbuilding & Dry Dock Co. v. Brown , 376 F.3d 245 ( 2004 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
NEWPORT NEWS SHIPBUILDING AND 
DRY DOCK COMPANY,
Petitioner,
v.
BEVERLY ANITA BROWN; DIRECTOR,  No. 03-1480
OFFICE OF WORKERS’ COMPENSATION
PROGRAMS, UNITED STATES
DEPARTMENT OF LABOR,
Respondents.

On Petition for Review of an Order of
the Benefits Review Board.
(02-593)
Argued: May 6, 2004
Decided: July 19, 2004
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.
COUNSEL
ARGUED: Christopher Roland Hedrick, MASON, MASON,
WALKER & HEDRICK, P.C., Newport News, Virginia, for Peti-
tioner. Gregory Edward Camden, MONTAGNA, BREIT, KLEIN &
CAMDEN, L.L.P., Norfolk, Virginia, for Respondent Brown; Joshua
2 NEWPORT NEWS SHIPBUILDING v. BROWN
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, Counsel for Longshore, Washington, D.C., for
Director, Office of Workers’ Compensation Programs.
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 compen-
sation. 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’ com-
pensation 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 addi-
tional 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
NEWPORT NEWS SHIPBUILDING v. BROWN 3
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 addi-
tional $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 unop-
posed 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
(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 (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 inter-
pretation which can most fairly be said to be imbedded in the statute,
4 NEWPORT NEWS SHIPBUILDING v. BROWN
in the sense of being most harmonious with its scheme and the gen-
eral purposes that Congress manifested.’" United States v. Wilson,
367 F.3d 245, 248 (4th Cir. 2004) (quoting Comm’r v. Engle, 464
U.S. 206, 217 (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 compensa-
tion 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 allow-
ance payable to an employee or [her] dependents as provided for in
this [Act]." Id. § 902(12). Specifically, the amount due for late pay-
ment satisfies the definition because it is a "money allowance pay-
able" to the employee who is due the basic compensation award.
In arguing that the amount payable under § 14(f) is not compensa-
tion, 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
NEWPORT NEWS SHIPBUILDING v. BROWN 5
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 compen-
sation," 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 compensa-
tion.
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 con-
tain the word fine or penalty, and it directs payment to the injured
employee. This leads us to agree with the Federal Circuit’s conclu-
sion: "[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 penal-
ties). In sum, Congress created a simple system for categorizing pay-
ments 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 rea-
6 NEWPORT NEWS SHIPBUILDING v. BROWN
sonably 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
conclude that a § 14(f) payment is compensation. Section 914(f)
awards should be designated as compensation because this interpreta-
tion is "most harmonious" with the LHWCA’s scheme and purpose.
See Engle, 464 U.S. at 217. A conclusion that § 14 awards are not
compensation, which would foreclose attorney’s fees for their collec-
tion, would be inconsistent with the purpose and objectives of the
LHWCA. Specifically, it would detract from the objective of promot-
ing the prompt payment of compensation, and it could discourage
employees from seeking the full extent of their statutory benefits.
The LHWCA is a no-fault workers compensation scheme that pro-
vides "employees with the benefit of a more certain recovery for
work-related harms" while providing "employers with definite and
lower limits on potential liability than would have been applicable in
common-law tort actions for damages." Potomac Elec. Power Co. v.
Director, O.W.C.P., 449 U.S. 268, 281 (1980). The LHWCA is thus
designed to accommodate "employees’ interest in receiving a prompt
and certain recovery for their industrial injuries as well as . . . the
employers’ interest in having their contingent liabilities identified as
precisely and as early as possible." Id. at 282. Within this framework,
§ 14(f) serves two distinct purposes. First, it "encourage[s] employers
to provide prompt payment of compensation to injured workers."
Garvey Grain Co. v. Director, O.W.C.P., 639 F.2d 366, 372 (7th Cir.
1981). Second, when an employer violates the Act’s provisions
requiring prompt payment, § 14(f) serves to "compensate claimants
for their inconvenience and expense during the time when they did
not receive timely compensation." Ingalls Shipbuilding, 119 F.3d at
978. See also Watkins v. Newport News Shipbuilding & Dry Dock
Co., 8 B.R.B.S. 556, 560 (1978) (section 14 payments "do not exist
merely to give employers a financial incentive to pay compensation
voluntarily and promptly. They are, in fact, additional amounts paid
to the claimant to compensate for the inconvenience and expenses of
supporting herself during the time when her earning capacity was
reduced or destroyed and compensation was not being paid."),
vacated and remanded on other grounds sub nom., Newport News
Shipbuilding & Dry Dock Co. v. Director, O.W.C.P., 594 F.2d 986
(4th Cir. 1979). Section 14(f)’s award for late payment is thus an inte-
NEWPORT NEWS SHIPBUILDING v. BROWN 7
gral part of the compensation package that the LHWCA provides for
injured employees. As a result, if a claimant is forced to pay legal fees
out of her own pocket to obtain a § 14(f) award, her compensation is
diminished. Section 28’s fee-shifting provisions are designed to avoid
that outcome. As the Fifth Circuit has said, § 28 "ensures that an
employee will not have to reach into the statutory benefits to pay for
legal services, thus diminishing the ultimate recovery." Oilfield Safety
and Mach. Specialties, Inc. v. Harman Unlimited, Inc., 625 F.2d
1248, 1257 (5th Cir. 1980). Denying attorney’s fees to an employee
for obtaining a § 14(f) award would conflict with the Act’s basic pur-
pose of compensating the employee for work-related injury in a
timely manner.
Also, denying attorney’s fees for collecting a § 14(f) award would
no doubt discourage many claimants from ever seeking the benefit —
full and timely compensation for injury — that § 14(f) was designed
to provide. In many cases the additional twenty percent entitlement
for late payment will be relatively small (it was $3500 here). If the
employee has to pay her own legal fees to obtain the additional
amount, she might well forgo the effort, for fees would soon eat up
the award. Furthermore, without fee-shifting, an employer with cash
flow problems or with a tendency to skirt the rules, would have less
incentive to pay basic compensation awards on time.
Finally, we note that "the title of a statute and the head of a section
are tools available for the resolution of a doubt about the meaning of
a statute." Almendarez-Torres v. United States, 523 U.S. 224, 234
(1998) (quotation marks and citations omitted). The title of the entire
§ 14, which was inserted by Congress when the LHWCA was first
enacted in 1927, is "Payment of Compensation." See 44 Stat. 1432
(1927). The wording of the title indicates that payments to an
employee as required by the section are compensation. See Ingalls
Shipbuilding, 119 F.3d at 977 ("the title gives us the first clue that
[late payment awards] under [§ 14] are compensation, not penalties").
This interpretation is supported by the passage and later repeal of one
subsection of § 14. Until 1972 § 14 included subsection (m), which
placed a cap on the total amount of compensation an employee could
receive in a case of temporary total disability. Subsection (m), as
amended in 1956, see 70 Stat. 655 (1956), said that "in applying the
limitation there shall not be taken into account . . . any amount of
8 NEWPORT NEWS SHIPBUILDING v. BROWN
additional compensation required to be paid under this section for
delay or default in the payment of compensation." 33 U.S.C. § 914,
historical and statutory notes (emphasis added). This language illus-
trates that as early as 1956 Congress meant § 14(f) payments to be
additional compensation. And there is no reason to believe that Con-
gress intended to change the compensatory nature of § 14(f) payments
when it repealed subsection (m). Rather, as the legislative history
makes clear, subsection (m) was repealed only "to avoid any injustice
to injured workers who would reach [the] maximum payment but still
be suffering from disability." H.R. Rep. No. 92-1441 (1972),
reprinted in 1972 U.S.C.C.A.N. 4698, 4706.
In summary, when the language of § 14(f) is read together with the
LHWCA’s definition of compensation, and the Act’s structural dis-
tinction between compensation and penalties is taken into account, it
is plain that an award for late payment under § 14(f) is compensation.
Even if we assume that § 14(f) is ambiguous as to whether its allow-
ance is compensation or a penalty, the objectives and history of the
Act reveal that Congress intended for § 14(f) payments to be compen-
sation. Accordingly, we hold that a § 14(f) award is a form of com-
pensation under the LHWCA and that an employee who successfully
prosecutes a § 14(f) claim for late payment is entitled to attorney’s
fees under § 28.
III.
Our holding in part II means that Brown is entitled to recover her
reasonable attorney’s fees for defending against Newport News’s
petition in this court to set aside her § 14(f) award. Newport News
argues that the $2,068.80 fee requested is unreasonable, largely
because the attorney’s hourly rate of $225.00 is excessive. Brown’s
attorney asserts that this hourly rate is reasonable for the Port of
Hampton Roads area, and he cites several recent orders in which
administrative law judges and the Board have allowed him an hourly
rate of $225.00 in LHWCA cases. See Hinton v. Newport News Ship-
building & Dry Dock Co., BRB No. 02-576 (July 18, 2003); Brown
v. Newport News Shipbuilding & Dry Dock Co., BRB No. 02-593
(May 30, 2003); Alexander v. Newport News Shipbuilding & Dry
Dock Co., Case No. 2002-LHC-1470 (ALJ, Dep’t of Labor, June 25,
2003); Jackson v. Newport News Shipbuilding & Dry Dock Co., Case
NEWPORT NEWS SHIPBUILDING v. BROWN 9
No. 2002-LHC-02963 (ALJ, Dep’t of Labor, June 5, 2003). Evidence
of fee awards in comparable cases is generally sufficient to establish
the "prevailing market rates" in "the relevant community." See Spell
v. McDaniel, 824 F.2d 1380, 1402 (4th Cir. 1987) ("prevailing market
rate may be established through . . . information concerning recent fee
awards . . . in comparable cases"). Newport News has not offered any
counter evidence to show that the hourly rate charged by Brown’s
attorney is unreasonable within the relevant community. We therefore
grant the petition for fees in the amount requested.
IV.
We hold that an award under § 14(f) of the LHWCA is compensa-
tion and that an employee is entitled under § 28 to reasonable attor-
ney’s fees incurred in obtaining and defending such an award.
Beverly A. Brown is therefore entitled to attorney’s fees for opposing
the company’s petition for review, and we grant her fee request in the
amount of $2,068.80.
PETITION FOR FEES GRANTED