Lincoln v. Director, Office of Workers' Compensation Programs

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-1594
STEVEN LINCOLN,
Petitioner,
v.
DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED
STATES DEPARTMENT OF LABOR; CERES MARINE TERMINALS, INC.,
Respondents.
On Petition for Review of an Order of the Benefits Review Board.
(12-0418)
Argued: January 28, 2014 Decided: March 11, 2014
Before WILKINSON, KEENAN, and DIAZ, Circuit Judges.
Petition denied by published opinion. Judge Wilkinson wrote the
opinion, in which Judge Keenan and Judge Diaz joined.
Gregory Edward Camden, MONTAGNA, KLEIN, CAMDEN, LLP, Norfolk,
Virginia, for Petitioner. Lawrence Philip Postol, SEYFARTH
SHAW, LLP, Washington, D.C., for Respondent Ceres Marine
Terminals, Inc.
WILKINSON, Circuit Judge:
Petitioner Steven Lincoln seeks attorney’s fees from Ceres
Marine Terminals, Inc. (Ceres) for his pursuit of a claim for
disability benefits under the Longshore and Harbor Workers’
Compensation Act (LHWCA). Lincoln contends that he is entitled
to attorney’s fees because Ceres did not pay “any compensation”
within the meaning of the fee-shifting mechanism in 33 U.S.C.
§ 928(a) or, in the alternative, because Ceres’s notice of
controversion irrevocably triggered the same provision. We
reject his arguments and deny his petition.
I.
A.
On May 24, 2011, Lincoln filed a claim with the District
Director of the Office of Workers’ Compensation Programs (OWCP)
for benefits under the LHWCA, alleging that he had sustained
binaural hearing loss (hearing loss in both ears) as a result of
his work as a longshoreman in Charleston, South Carolina. The
basis of Lincoln’s claim was an April 11, 2011 audiogram.
Lincoln, like many longshoremen, worked for several different
companies over the course of his career, but he alleged that he
was employed by Ceres at the time of his injury. Therefore, on
May 26, Ceres responded by filing forms with the OWCP, one of
which was a notice of controversion.
2
In the notice, Ceres explained that it was controverting
Lincoln’s claim because, while it accepted the fact that
“claimant’s hearing loss [was] noise-induced,” J.A. 5,
additional information was needed before Ceres could determine
what it believed was the correct disability payment. The
information Ceres sought included whether Ceres was the last
employer before Lincoln’s audiogram and the amount of Lincoln’s
average weekly wage (calculated from wage records collected from
the various employers for which Lincoln had worked). On June 2,
Lincoln gave Ceres a copy of his April 11 audiogram along with a
paystub from his time working for Ceres. Several days later, on
June 6, Ceres submitted subpoenas requesting wage records from
the other companies for which Lincoln had worked and medical
records from the doctor who had conducted Lincoln’s April 11
audiogram.
The OWCP formally served notice of Lincoln’s claim on Ceres
on June 14. After receiving the official notice of the claim,
on July 7, Ceres “voluntarily paid” Lincoln $1,256.84, amounting
to compensation for “0.5% [binaural] hearing loss” and the
equivalent of one week of permanent partial disability pay under
the maximum compensation rate. J.A. 25. Ceres also requested
that Lincoln submit to an independent medical examination. In
accordance with that request, Lincoln completed a second
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audiogram on July 15 that demonstrated he had sustained a 10%
binaural hearing loss.
On October 4, after negotiations, the District Director of
the OWCP entered a settlement compensation order agreed to by
both Lincoln and Ceres. The settlement acknowledged that
Lincoln allegedly sustained a 10% binaural hearing loss and
awarded benefits to Lincoln totaling $23,879.96 in compensation
and $4,000 in medical benefits. Ceres did not pay any money to
Lincoln between the July 7 disability payment and the October 4
settlement.
B.
Lincoln filed a petition with the OWCP on August 18, 2011,
requesting that the Director award him $3,460 in attorney’s fees
under § 928(a) of the LHWCA, which shifts fees from a successful
claimant to the employer when the employer “declines to pay any
compensation on or before the thirtieth day after receiving
written notice of a claim.” 33 U.S.C. § 928(a). Ceres opposed
the petition, and on April 24, 2012, the Director notified both
parties that, because Ceres had paid Lincoln one week’s worth of
disability benefits within 30 days of receiving official notice
of his claim, it was not liable for Lincoln’s attorney’s fees
under § 928(a). He also found that Ceres was not liable for
attorney’s fees under § 928(b), the LHWCA’s alternative fee-
shifting provision.
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On May 15, 2012, the Director entered a Compensation Order
ruling Ceres not liable for Lincoln’s attorney’s fees and
denying the petition. Lincoln appealed to the Benefits Review
Board (BRB), which found that the Director acted within his
discretion in denying Lincoln’s petition under §§ 928(a) and
(b). Lincoln thereafter filed this timely petition for review.
II.
Lincoln maintains that the Director erred in denying his
fee petition under § 928(a) for three independent reasons: (1)
Ceres’s July 7 payment was only a partial payment and thus not
“any compensation”; (2) the payment did not technically
constitute “compensation” for the purposes of that provision;
and (3) Ceres’s notice of controversion automatically triggered
fee-shifting. We review the BRB’s decision both for errors of
law and to determine whether it properly found that the District
Director’s relevant factual findings were supported by
substantial evidence. Sidwell v. Va. Int’l Terminals, Inc., 372
F.3d 238, 241 (4th Cir. 2004). Our review of the BRB’s
interpretation of the LHWCA is de novo. Wheeler v. Newport News
Shipbuilding & Dry Dock Co., 637 F.3d 280, 283 (4th Cir. 2011).
A.
Lincoln first claims that the term “any compensation” in
§ 928(a) means all compensation due, and therefore cannot
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include Ceres’s payment of a mere one week of disability
benefits to Lincoln. To interpret this provision, we begin by
examining the statutory text. If the language is plain, “we
apply it according to its terms.” Newport News Shipbuilding &
Dry Dock Co. v. Brown, 376 F.3d 245, 248 (4th Cir. 2004)
(internal quotation marks omitted). When determining whether or
not statutory 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.” Holland v. Big
River Minerals Corp., 181 F.3d 597, 603 (4th Cir. 1999)
(internal quotation marks omitted).
The LHWCA establishes a reticulated scheme providing for
fee-shifting in two specific contexts. “In all other cases any
claim for legal services shall not be assessed against the
employer or carrier.” 33 U.S.C. § 928(b). Section 928(a)
covers the first of these situations:
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 . . . .
33 U.S.C. § 928(a).
6
In Lincoln’s view, the phrase “any compensation” means “all
compensation,” to the effect that an employer that fails to pay
the entire claim within 30 days is liable for attorney’s fees
under § 928(a). We do not agree. The term “any compensation”
is unambiguous and plainly encompasses an employer’s partial
payment of compensation. Thus, the most natural reading of the
provision is that an employer that pays the claimant something
by way of compensation is not liable for attorney’s fees.
The surrounding context of § 928(a) buttresses this
interpretation. It states that the employer’s refusal to pay
must be “on the ground that there is no liability for
compensation within the provisions of this chapter.” 33 U.S.C.
§ 928(a). This language is unequivocal, and demonstrates that
an employer’s refusal to pay compensation must be absolute in
order for it to face possible fee liability under § 928(a).
To construe “any compensation” in § 928(a) as “all
compensation” would mean that employers must pay the full claim
within 30 days of receiving the official notice to avoid
potential fee liability. But, as Lincoln’s claim demonstrates,
the medical evidence establishing the extent of the claimant’s
injury, and thus the amount of his benefits, is often in flux
and cannot be ascertained with any degree of certainty within 30
days of his claim. Section 928 provides an employer a safe
harbor: if it admits liability for the claim by paying some
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compensation to the claimant for a work-related injury and only
contests the total amount of the benefits, it is sheltered from
fee liability under § 928(a). Andrepont v. Murphy Exploration &
Prod. Co., 566 F.3d 415, 418-19 (5th Cir. 2009); Day v. James
Marine, Inc., 518 F.3d 411, 419 (6th Cir. 2008). Therefore,
fee-shifting under § 928(a) may not occur if the employer agrees
that some amount is due the claimant for a work-related injury
and “tenders any compensation.” Andrepont, 566 F.3d at 418.
This safe harbor provision serves to protect “the employers’
interest in having their contingent liabilities identified as
precisely and as early as possible.” Brown, 376 F.3d at 250
(internal quotation marks omitted).
But the safe harbor is not permanently safe, because
§ 928(b) provides a mechanism by which the claimant could still
recover attorney’s fees. Andrepont, 566 F.3d at 419 (finding
that § 928(b) applies when “the employer and claimant agree that
some compensation is due but disagree as to what amount”)
(internal quotation marks omitted); Va. Int’l Terminals, Inc. v.
Edwards, 398 F.3d 313, 317-18 (4th Cir. 2005). This alternative
provision is only operative when “the employer initially pays
voluntary compensation and a subsequent dispute arises about
total amount of compensation due” and, additionally, four
requirements are satisfied. Id. at 316. These requirements
are: “(1) an informal conference, (2) a written recommendation
8
from the deputy or Board, (3) the employer’s refusal to adopt
the written recommendation, and (4) the employee’s procuring of
the services of a lawyer to achieve a greater award than what
the employer was willing to pay after the written
recommendation.” Newport News Shipbuilding & Dry Dock Co. v.
Dir., OWCP, 477 F.3d 123, 126 (4th Cir. 2007) (internal
quotation marks omitted).
When taken together, §§ 928(a) and (b) mandate fee-shifting
in certain defined circumstances, but plainly do “not provide
for attorneys’ fee awards in every case in which the claimant is
successful.” Andrepont, 566 F.3d at 420 (internal quotation
marks omitted). This interpretation is consistent with the
purposes of the LHWCA, one of which is to lessen the occasions
where attorney’s fees are incurred by encouraging claimants to
resolve their disputes “without the necessity of relying on
assistance other than that provided by the Secretary of Labor.”
Kemp v. Newport News Shipbuilding & Dry Dock Co., 805 F.2d 1152,
1153 (4th Cir. 1986) (per curiam). Therefore, the structure of
§ 928 establishes that, until the claimant has exhausted the
non-adversarial avenues for resolving his claim, he cannot avail
himself of the fee-shifting provisions. Day, 518 F.3d at 416-
17.
In sum, § 928(a)’s plain language requires fee-shifting
only when an employer has paid no compensation within 30 days of
9
receiving the official claim. Applying this interpretation to
Lincoln’s case shows that his claim under § 928(a) fails. Ceres
voluntarily paid Lincoln one week’s compensation on July 7,
which was within 30 days of receiving his claim, “thereby
admitting to liability for the injury” for the purposes of
§ 928(a). Andrepont, 566 F.3d at 419. Ceres met the
requirement of § 928(a), moving the dispute to § 928(b).
Lincoln then had the right to request an informal conference,
see Pittsburgh & Conneaut Dock Co. v. Dir., OWCP, 473 F.3d 253,
264 (6th Cir. 2007), but he did not and instead proceeded to
settlement negotiations that ultimately produced an agreement.
Lincoln was entitled to the services of an attorney but, under
the LHWCA’s fee-shifting scheme, he is not entitled to have that
attorney paid for by Ceres.
B.
Lincoln’s second contention is that Ceres’s July 7 payment
was not “compensation” in any true sense under § 928(a) because
it was merely an attempt by Ceres to avoid fee liability. To
support his argument, he relies on Green v. Ceres Marine
Terminals, Inc., 43 BRBS 173 (2010), rev’d on other grounds, 656
F.3d 235 (4th Cir. 2011). In Green, the BRB reviewed a ruling
by an administrative law judge (ALJ) finding that the employer’s
$1 payment to the claimant did not constitute “compensation” for
the purposes of § 928(a). Id. at 177. The BRB affirmed and
10
found § 928(a) applicable because the ALJ “rationally found that
employer’s payment of $1 was merely an attempt to avoid fee
liability rather than the payment of compensation for claimant’s
injury.” Id.
Lincoln contends that Ceres’s payment of $1,256.84,
corresponding to an injury of 0.5% binaural hearing loss,
constitutes a “farce to avoid paying attorney’s fees” in the
same vein as in Green. Appellant’s Br. at 10. However,
Lincoln’s case differs dramatically from Green, and we
consequently do not find it applicable here. Ceres’s counsel
noted at oral argument that Ceres based its calculation of the
July 7 payment on Lincoln’s alleged disability. That is in
stark contrast to the $1 payment in Green, which was clearly
untethered to the underlying claim and therefore was not
“compensation” at all. See Andrepont, 566 F.3d at 419 (holding
that an employer’s partial benefits payment constituted
“compensation” under § 928(a)); Pittsburgh & Conneaut Dock Co.,
473 F.3d at 263-64 (ruling that an employer’s initial payments
of temporary disability benefits were sufficient to meet
§ 928(a)’s “compensation” requirement). *
*
We likewise find unavailing Lincoln’s reference to Roberts
v. Sea-Land Services, Inc., 132 S. Ct. 1350 (2012). Nowhere in
Roberts did the Supreme Court analyze the meaning of “any
compensation” in § 928(a), the central issue in this case.
11
We hold that Ceres’s payment of one week’s benefits at the
maximum compensation rate, being directly tied as it was to
Lincoln’s alleged injury, qualifies as “compensation” within the
meaning of § 928(a).
C.
Lastly, Lincoln maintains that, when Ceres filed a notice
of controversion prior to the July 7 payment, it signaled that
it was controverting his claim and, by doing so, irrevocably
triggered § 928(a). Lincoln cites to the controversion
procedure in § 914(d) of the LHWCA, which requires that an
employer seeking to challenge an employee’s benefits claim file
a notice “on or before the fourteenth day after [it] has
knowledge of the alleged injury or death.” 33 U.S.C. § 914(d).
Lincoln did not raise this issue before the BRB, and thus
the BRB did not have the opportunity to consider or rule on it.
But even if we were to address the merits of his claim, we would
find it wanting. Section 928(a) nowhere incorporates § 914(d)
or its 14 day time limit specifically, or references notices of
controversion generally. Rather, § 928(a) contains only one
explicit trigger: the payment of “any compensation” within 30
days of the employer’s receipt of official notice of the claim.
Ceres met this requirement and consequently was entitled to the
protections afford by § 928(a).
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III.
The LHWCA is one of those statutes that adjust employer and
employee interests through multiple tradeoffs and compromises.
Far be it from courts to disturb the balance. The petition for
review is hereby denied.
PETITION DENIED
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