Stetzer v. Logistec of Connecticut, Inc.

07-3196-ag
Stetzer v. Logistec of Connecticut, Inc.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term, 2008
(Argued: September 8, 2008 Decided: October 28, 2008)
Docket No. 07-3196-ag
RICHARD STETZER,
Claimant-Petitioner,
v.
LOGISTEC OF CONNECTICUT, INC ., SIGNAL MUTUAL INDEMNITY ASSOCIATION ,
DEPARTMENT OF LABOR - BENEFITS REVIEW BOARD ,
Respondents.
Before: CABRANES, POOLER, and KATZMANN , Circuit Judges.
Appeal from a final decision of the Benefits Review Board regarding an award of workers
compensation under the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. §§ 901 et seq.
(2003). The prior award of benefits was unenforceable because the amount of compensation could not
be determined without an additional ruling on disputed evidence that was not before the original
administrative law judge. Under these circumstances, a second administrative law judge properly
modified the original benefits award pursuant to 33 U.S.C. § 922. Because the Board’s decision on
attorney’s fees is not final, we do not review it.
Affirmed.
DAVID A. KELLY, Montstream & May, LLP, Glastonbury, CT,
for petitioner.
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PETER D. QUAY , Taftville, CT, for respondents Logistec of Connecticut
and Signal Mutual Indemnity Association.
JOSÉ A. CABRANES, Circuit Judge:
Petitioner Richard Stetzer challenges a final decision of the Benefits Review Board (the “BRB”)
affirming in part and reversing in part a decision and order of Administrative Law Judge Colleen A.
Geraghty. Judge Geraghty’s order (1) denied petitioner’s request for enforcement of a previous
benefits award pursuant to section 914(f) of the Longshore and Harbor Workers’ Compensation Act,
33 U.S.C. §§ 901 et seq. (2003) (the “Act”), because the previous award required additional findings
before it could be final and enforceable; (2) modified the previous award under 33 U.S.C. § 922; (3)
denied petitioner’s request to include three payments to a “comparable employee” in his benefits
calculation because petitioner could not show that those payments were wages; and (4) granted
attorney’s fees and costs to petitioner’s counsel. The BRB affirmed all but the fourth ruling and
vacated the grant of attorney’s fees with instructions for a recalculation on remand. We affirm the
BRB’s decision in all respects except for the attorney’s fees, for which the BRB has not issued a final
order. We write to clarify the proper legal standard for an administrative law judge (“ALJ”) to apply in
determining whether a previous benefits award is enforceable.
BACKGROUND
In July 2000, petitioner sustained injuries that arose out of and in the course of his employment
at respondent Logistec of Connecticut, Inc. (“Logistec”). After approximately ten months of total
disability, petitioner returned to work on May 13, 2001 and filed a claim for partial disability
compensation under the Act. On August 11, 2003, Administrative Law Judge Daniel F. Sutton
awarded petitioner $5,834.17 in temporary partial disability benefits for the period “of May 31, 2001
[sic] through March 28, 2002.” Judge Sutton also awarded petitioner ongoing temporary partial
disability benefits from March 29, 2002 for a period not to exceed five years. Daniel Haggerty,
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petitioner’s co-worker, was designated as the “comparable employee.” Petitioner appealed Judge
Sutton’s award on grounds unrelated to the questions before this Court and won additional
compensation before the BRB.1 The BRB noted that Judge Sutton’s order was “[i]n all other respects .
. . affirmed.” On June 23, 2004, while that appeal was pending before the BRB, Logistec paid
petitioner $14,998.30 in workers compensation.
On September 20, 2004, one month after the BRB ruled on petitioner’s first appeal, petitioner
filed notice of an enforcement claim pursuant to 33 U.S.C. § 914(f) with the District Director of the
United States Department of Labor, Office of Workers Compensation Programs alleging that Logistec
had not complied with Judge Sutton’s order as modified by the BRB. The District Director transferred
the enforcement claim to an administrative law judge pursuant to 33 U.S.C. § 918(a) because the claim
involved a disputed issue of fact—whether three payments to Haggerty, the “comparable employee,”
totaling $15,750, should have been included in the benefits calculation.
For reasons not stated in the record, the case was reassigned to Judge Geraghty, who treated
petitioner’s request for an enforcement order under 33 U.S.C. § 914(f) as a request for modification
pursuant to 33 U.S.C. § 922. Although Judge Geraghty noted that administrative law judges lack the
authority to “enforce” decisions, see 33 U.S.C. § 918(a), she nonetheless concluded that “a penalty [wa]s
not appropriate” because “it was not possible to determine the amount of compensation due without
consideration of extra record facts.” Citing case law from the Fifth Circuit, Judge Geraghty noted that
in order to constitute an enforceable “final decision and order,” an order “must at a minimum specify
the amount of compensation due or provide a means of calculating the correct amount without resort
to extra-record facts which are potentially subject to genuine dispute between the parties.” See Severin v.
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Petitioner argued that Judge Sutton had mistakenly used 33 U.S.C. § 10(c) instead of § 10(a) to determine
petitioner’s weekly wage; the BRB agreed with petitioner and increased the weekly wage.
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Exxon Corp., 910 F.2d 286, 289 (5th Cir. 1990); see also Ledet v. Phillips Petroleum Co., 163 F.3d 901, 905
(5th Cir. 1998). Judge Geraghty also ruled against petitioner on his request to include the three
disputed payments to Haggerty totaling $15,750 because petitioner had not shown that the payments
were part of Haggerty’s wages. Finally, Judge Geraghty awarded attorney’s fees to petitioner’s counsel.
Both petitioner and respondent appealed to the BRB, which upheld Judge Geraghty’s order
except for the award of attorney’s fees. See Stetzer v. Logistec, BRB No. 06-0537 (unpublished decision
and order, Jan. 31, 2007). Applying the Fifth Circuit’s rule that “[a]n administrative law judge’s award is
not enforceable if it does not adequately state the amount of compensation owed to a claimant,” id. at 5
(citing Severin, 910 F.2d at 289), the BRB agreed with Judge Geraghty that Judge Sutton’s award provided
inadequate instruction for the calculation of future benefits because it required the parties to consult
extra-record facts that were in dispute. The previous order was therefore unenforceable. The BRB also
upheld Judge Geraghty’s modification of the previous award under 33 U.S.C. § 922, concluding that (1)
Judge Geraghty was required to resolve the question of whether the three payments totaling $15,750
were wages, a question that was not resolved by Judge Sutton, and (2) that Judge Geraghty correctly
found that Stetzer had not established that the payments were wages. Regarding the attorney’s fees,
Logistec cross-appealed Judge Geraghty’s award of $10,096.93, which was granted in a supplemental
decision and order on May 23, 2006. The BRB found that Judge Geraghty did not consider counsel’s
limited success in light of the amount previously paid to petitioner and therefore vacated the award and
remanded to Judge Geraghty for further findings.
On appeal, petitioner argues that Judge Sutton’s original opinion was enforceable and that
Judge Geraghty’s modification was legally erroneous. Petitioner further contends that Judge Geraghty
erred in excluding the three disputed payments to the “comparable employee” in the benefits
calculation, and that the BRB erred in vacating the award of attorney’s fees in light of counsel’s limited
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success at achieving additional compensation.
DISCUSSION
The Act grants jurisdiction to the Courts of Appeals to “give a decree affirming, modifying, or
setting aside, in whole or in part, [an] order of the Board and enforcing same to the extent that such
order is affirmed or modified.” 33 U.S.C. § 921(c). However, “[o]ur review is limited to whether the
BRB made any errors of law and whether substantial evidence supports the ALJ’s findings of fact.”
Rainey v. Dir., Office of Workers’ Comp., 517 F.3d 632, 634 (2d Cir. 2008). Decisions of law by the BRB
are reviewed de novo. Universal Mar. Serv. Corp. v. Spitalieri, 226 F.3d 167, 172 (2d Cir. 2000). The
“substantial evidence” standard applied to an ALJ’s findings requires us to affirm if “[i]f the decision of
the ALJ is supported by substantial evidence, is not irrational, and is in accordance with the law.”
Pietrunti v. Dir., Office of Workers’ Comp., 119 F.3d 1035, 1040 (2d Cir. 1997).
Petitioner argues that Judge Geraghty erred in modifying the previous benefits award under 33
U.S.C. § 922 when the petitioner sought enforcement under 33 U.S.C. § 914(f). We have previously
held, and the parties do not dispute, that section 922 of the Act bestows broad power to modify a prior
award. See Jensen v. Weeks Marine, Inc., 346 F.3d 273, 276-77 (2d Cir. 2003) (discussing an ALJ’s “broad”
authority to modify previous benefit awards and holding that an “ALJ is not bound by any previous
fact-findings”); see also O’Keeffe v. Aerojet-General Shipyards, Inc., 404 U.S. 254, 256 (1971) (noting
Congressional intent to provide a deputy commissioner with “broad discretion to correct mistakes of
fact, whether demonstrated by wholly new evidence, cumulative evidence, or merely further reflection
on the evidence initially submitted”). Further, the parties do not dispute that claimants have a statutory
right to bring an enforcement action under section 14(f) of the Act, which states: “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
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the same time as, but in addition to, such compensation . . . .” 33 U.S.C. § 914(f). The parties’
disagreement lies at the intersection of these two provisions—whether an ALJ may modify a prior
award where a party seeks enforcement of that award. This is a matter of first impression in this circuit.
Both Judge Geraghty and the BRB cited case law from the Fifth Circuit to support the
modification of Judge Sutton’s previous award. In Severin, an Exxon employee on an offshore drilling
platform was injured while on the job. 910 F.2d at 287. A dispute arose when Exxon stopped paying
workers compensation benefits after the company decided that the employee was well enough to return
to work. An ALJ found that the employee was entitled to additional compensation, but ordered that
Exxon would receive credit for “all compensation previously paid [and] any wages paid to claimant
during the period specified.” Id. at 287-88. The ALJ’s order noted the amount of compensation Exxon
had previously paid, but assigned the remaining calculations to an employee of the Department of
Labor without specifying “the amount of Exxon’s wage credit or the manner in which to calculate it.”
Id. at 288. Exxon filed a motion for reconsideration on the grounds that the ALJ’s order was
“indefinite and therefore frustrated Exxon’s ability to comply.” Id. The parties then agreed on the
amount owed and filed a stipulation with the ALJ, who accepted it and dismissed Exxon’s motion for
reconsideration. Severin then sued Exxon in federal district court under 33 U.S.C. § 918(a) for failure
to pay the full amount owed within ten days of the ALJ’s original order. The district court ruled for
Exxon, holding that the original compensation order was not “final and enforceable.” Id.The Fifth Circuit affirmed, holding that the ALJ’s original compensation was not “due,” 33
U.S.C. § 914(f), until the compensation order becomes “final,” as defined in an agency regulation, 20
C.F.R. 702.348, which provides:
Within 20 days after the official termination of the hearing as defined by § 702.347, the
administrative law judge shall have prepared a final decision and order . . . making an award to
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the claimant or rejecting the claim. The compensation order shall contain appropriate
findings of facts and conclusions of law with respect thereto, and shall be concluded with one
or more paragraphs containing the order of the administrative law judge, his signature, and
the date of issuance. (Emphasis added.)
See Severin, 910 F.2d at 289. The Fifth Circuit reasoned that an order is not “final” if it does not “at a
minimum specify the amount of compensation due or provide a means of calculating the correct
amount without resort to extra-record facts which are potentially subject to genuine dispute between
the parties.” Id. The court noted that even if an order is “filed in the office of the deputy
commissioner,” 33 U.S.C. § 921(a), it is unenforceable if the terms of payment are left undefined.
Severin, 910 F.2d at 288. In Severin, the Fifth Circuit found that Exxon’s wage credit was genuinely in
dispute, such that it was “impossible for the deputy commissioner to calculate the compensation
owed to Severin and for Exxon to comply with the compensation order.” Id. at 289. Therefore,
Exxon could not be penalized under 33 U.S.C. § 914(f) for failure to pay compensation benefits.
Nonetheless, the Fifth Circuit noted that the “class of compensation orders that are not ‘final
decision[s] and order[s]’ of the ALJ is a narrow one.” Id. at 290.
Several Fifth Circuit opinions have reaffirmed Severin. See Ledet, 163 F.3d at 905 (finding that
ALJ’s decision was not “final” where ALJ remanded to a Department of Labor administrator for
additional fact finding regarding post-injury wages); Lazarus v. Chevron USA, Inc., 958 F.2d 1297, 1303
(5th Cir. 1992) (holding that ALJ’s decision was unenforceable where ALJ remanded to a
Department of Labor administrator for calculating “[t]he specific dollar computations” for medical
expenses related to the injury without providing a method for determining this amount); cf. Connors v.
Amax Coal Co., 858 F.2d 1226, 1228-1229 (7th Cir. 1988) (holding that, under the Black Lung
Benefits Act, 30 U.S.C. § 901 et seq., “a claimant . . . does not possess a compensation order making
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an award [ ] that has become final . . . until that party obtains a final administrative determination
resolving any dispute as to whether particular expenses are covered expenses” (internal quotation
marks omitted)).
We now adopt the Fifth Circuit’s test for determining the finality and enforceability of an
ALJ’s order under 33 U.S.C. § 914(f) and hold that an ALJ’s order is not final and enforceable if it
does not “specify the amount of compensation due or provide a means of calculating the correct
amount without resort to extra-record facts which are potentially subject to genuine dispute between
the parties.” Severin, 910 F.2d at 289.
Under the circumstances of this case, Judge Geraghty properly determined that Judge
Sutton’s original award was not final and enforceable under 33 U.S.C. § 914(f) because a significant
amount of compensation was in dispute and could not be resolved without additional proceedings.
Specifically, none of the evidence regarding the three disputed payments to petitioner’s “comparable
employee”—dated September 17, 2003, February 5, 2004, and October 14, 2004—was part of the
record considered by Judge Sutton, who issued his decision and order on August 11, 2003. [JA at F1]
Therefore, Judge Geraghty properly used the broad power under 33 U.S.C. § 922 to modify the
previous award based on her findings regarding the three disputed payments. See O’Keeffe, 404 U.S. at
256 (approving of the use of section 922 “to correct mistakes of fact . . . demonstrated by wholly new
evidence”); Jensen, 346 F.3d at 277 (holding that an “ALJ is not bound by any previous
fact-findings”).
Regarding petitioner’s claim that Judge Geraghty should have included the disputed payments
to the “comparable employee” in the benefits calculation, we find no basis in the record to reverse
Judge Geraghty’s conclusion that the disputed payments were not wages and should not have been
included in the benefits calculation. Judge Geraghty identified “substantial evidence,” Rainey, 517
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F.3d at 634, that prior to April 4, 2004—when two of the three disputed payments were
made—Logistec’s payroll system records “include[d] payments that [were] not associated with hours
worked.” After Logistec changed its payroll system in April 2004, there were multiple payments to
both petitioner and the “comparable employee” listed as “Other” instead of “Reg Hours.” Judge
Geraghty also found that none of the disputed payments to the “comparable employee” had hours
associated with them, and that on or around each of the days that the “comparable employee”
received a disputed payment, he also received a payment that was linked to a certain amount of hours
worked. Judge Geraghty considered the deposition of a Logistec employee who testified that the
“comparable employee” served as an officer of Coastline Terminals, an employee-owned company
that leased property to Logistec. The witness posited that the disputed payments to the “comparable
employee” may have been related to his position on Coastline’s board of directors. Based on these
findings and the lack of additional evidence from petitioner, Judge Geraghty determined that
petitioner had not shown that the disputed payments were wages that should have been included in
petitioner’s benefits calculation. Under these circumstances, we cannot say that Judge Geraghty’s
decision lacked substantial evidence, was irrational, or was not in accordance with the law. See
Pietrunti, 119 F.3d at 1040.
Finally, we turn to the BRB’s decision to vacate the award of attorney’s fees under 33 U.S.C. §
928(a), which authorizes attorney’s fees to a claimant’s attorney where “the employer . . . declines to
pay any compensation . . . on the ground that there is no liability for compensation . . . and the person
seeking benefits shall thereafter have utilized the services of an attorney at law in the successful
prosecution of his claim.” See also 20 C.F.R. § 702.132 (An attorney’s fee must be “reasonably
commensurate with the necessary work done and shall take into account the quality of the
representation, the complexity of the legal issues involved, and the amount of benefits awarded.”). At
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the time of the hearing before Judge Geraghty, Logistec had already paid petitioner $14,998.30 in
temporary partial disability benefits for the period between March 29, 2002 and June 10, 2004
pursuant to Judge Sutton’s original benefits award. That payment exceeded the total benefits owed to
petitioner under Judge Geraghty’s calculations—$12,720.98. Therefore, the BRB determined that
petitioner “gained no additional benefits for the period between March 29, 2002, and January 15,
2005.” The BRB acknowledged that petitioner’s counsel achieved an increase in the amount of
weekly benefits of $2 to $4 per week, but found that this amount was “minimal” and did not support
the award of $10,096.93 in attorney’s fees. Consequently, the BRB remanded the matter to Judge
Geraghty for further findings.
In light of the remand, the BRB’s disposition is not final regarding the attorney’s fees and, to
date, Judge Geraghty has not issued a revised order. We therefore do not reach the question put
before us regarding the appropriateness of the BRB’s remand for further consideration.2 See Honeywell
Int’l, Inc. v. Purolator Prods. Co., 468 F.3d 162, 164 (2d Cir. 2006) (holding that an order awarding
attorney’s fees and costs is not final until the amount of fees and costs has been set by the district
court); Abrams v. Interco, Inc., 719 F.2d 23, 27 (2d Cir. 1983) (holding that “a judgment on the merits in
favor of a plaintiff is a final judgment under 28 U.S.C. § 1291 even though statutory attorney’s fees
remain undetermined”); accord Nacirema Operating Co. v. Lynn, 577 F.2d 852, 853 n.1 (3d Cir. 1978) (per
2
We note that, although this Court has not addressed the issue of whether attorney’s fees may be discounted by
the amount of compensation benefits previously paid by an employer, other Courts of Appeals have upheld the BRB’s
requirement that prior payments should not be included as part of the “amount of benefits awarded,” 20 C.F.R. §
702.132. See Ingalls Shipbuilding, Inc. v. Dir., Office of Workers’ Comp. Programs, 991 F.2d 163, 166 (5th Cir. 1993) (holding
that, under 33 U.S.C. § 928(a), attorney’s fees are payable only where “claimant’s attorney successfully prosecutes a
claim,” and determining that “a fee award tailored to [a claimant’s] limited success should be set”); Dir., Office of Workers’
Comp. Programs v. Baca, 927 F.2d 1122, 1124 (10th Cir. 1991) (“The clear and unambiguous language of [33 U.S.C. §
928(a) and 30 U.S.C. § 932(a)] compels only one interpretation: attorneys fees may be recovered only if the claimant
receives increased compensation or other benefit from the action.”); Gen. Dynamics Corp. v. Horrigan, 848 F.2d 321,
324-325 (1st Cir. 1988) (interpreting 33 U.S.C. § 928(a) in light of legislative history indicating that “[a]ttorneys fees . . .
are to be based on the amount by which the compensation payable is increased as a result of the litigation”) (internal
citations omitted).
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curiam) (concluding that where remaining issues were settled but attorney’s fees were remanded for
reconsideration, an order of the BRB was otherwise final).
CONCLUSION
For the reasons stated above, we AFFIRM the final decision of the BRB.
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