Gulf Coast Empl Leas v. Jacoby

UNITED STATES CxOURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 98-60389
_____________________
GULF COAST EMPLOYEE LEASING;
WAUSAU UNDERWRITERS INSURANCE
COMPANY,
Petitioners,
versus
GILBERT JACOBY, Director, OFFICE OF WORKER’S
COMPENSATION PRORAMS, U.S. DEPARTMENT OF LABOR,
Respondents.
____________________________________________
Petition for Review of an Order of the
Benefits Review Board
(94-2599)
____________________________________________
March 8, 2000
Before DAVIS, HALL,1 and SMITH, Circuit Judges.
PER CURIAM:2
Appellants Gulf Coast Employee Leasing and Wausau Underwriters
Insurance Company appeal the Benefits Review Board’s (“BRB’s”) award of legal
fees to Appellee Gilbert Jacoby under 33 U.S.C. § 928(b). Appellee prevailed on
some, but not all, of the issues considered by the administrative law judge (“ALJ”),
1
Circuit Judge of the Ninth Circuit, sitting by designation.
2
Pursuant to 5th CIR. R. 47.5, the court has determined that this opinion should
not be published and is not precedent except under the limited circumstances set
forth in 5th CIR. R. 47.5.4.
and the ALJ’s decision was automatically affirmed by the BRB. Appellee requested
attorney’s fees stemming from the appeal, claiming he was the prevailing party on
appeal. After Appellants failed to file a response and the Fifth Circuit affirmed the
BRB’s decision, the BRB granted Appellee’s request for fees. Appellant appealed,
asserting that by that time the BRB lacked jurisdiction to award fees, and that
Appellee was ineligible to recover fees because he was not the prevailing party. We
affirm the BRB’s award of fees.
Jurisdiction
Appellants argue that the BRB lost jurisdiction over the attorney’s fees issue
when Appellee filed its Petition for Review with the Fifth Circuit. That assertion is
incorrect. A decision on the merits is final and reviewable by a federal appeals
court even if the lower court has not yet decided whether to award a party attorney’s
fees. See Budinich v. Becton Dickinson & Co., 486 U.S. 196, 202-03 (1988). The
BRB waited until the Fifth Circuit had ruled on the appeal before awarding
attorney’s fees to Appellee. That was the correct course of action, because only
then could the BRB determine whether Appellee’s appeal or Appellants’ cross
appeal had been successful. See 20 C.F.R. § 802.203(d); Newpark Shipbuilding &
Repair, Inc. v. Roundtree, 698 F.2d 743, 747 (5th Cir. 1983) (noting that a lower
court could retain jurisdiction over attorney’s fees until after it has ruled on the
merits because “at that point, the record would not yet contain the factual material
needed to rule on the amount of the award.”). The BRB thus retained jurisdiction to
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award attorney’s fees.
Merits
Appellants argue that the BRB should not have awarded Appellee attorney’s
fees because Appellee was “totally unsuccessful” in its appeal. In fact, the result of
the appeal’s automatic affirmance was a split decision – Appellee prevailed in
defending against Appellants’ cross appeal, and Appellants prevailed in defending
against Appellee’s appeal. The BRB awarded attorney’s fees to Appellee because it
believed that Appellee prevailed on the most important issue – the cross appeal.
The BRB’s conclusion was sound.
The leading case on this question is Hensley v. Eckerhart, 461 U.S. 424(1983). There, the Supreme Court explains what it means to be a “prevailing party”
for the purpose of obtaining attorney’s fees under 42 U.S.C. § 1988(b). The Court
noted that “[w]here a plaintiff has obtained excellent results, his attorney should
recover a fully compensatory fee.” Id. at 435. Significantly, “excellent results”
meant something less than prevailing on every issue. “In these circumstances the
fee award should not be reduced simply because the plaintiff failed to prevail on
every contention raised in the lawsuit.” Id. The Supreme Court noted that “[t]here
is no precise rule or formula for making these determinations” about whether a party
has obtained “excellent results.” Id. at 436. Rather, the district “court necessarily
has discretion in making this equitable judgment.” Id. at 437.
The fees provision at issue here, 33 U.S.C. § 928(b), similarly mandates the
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award of attorney’s fees to a claimant who is “successful in review proceedings
before the Board.” The courts have interpreted § 928 to provide “an incentive for
employers to pay claims rather than contest them. That incentive consists of
assessing attorney’s fees against the employer when the employer denies a
legitimate claim and the employee uses the services of an attorney to obtain his
statutory benefits.” Oilfield Safety & Machine Co. v. Harman Unlimited, Inc., 625
F.2d 1248, 1257 (5th Cir. 1980). Here, had Appellants declined to cross-appeal
below, they would not have incurred the costs resulting from the appeal. But
because they chose to cross-appeal, they ran the risk of incurring liability for such
costs.
The record contains plenty of evidence to support the BRB’s determination
that Appellee had prevailed sufficiently on appeal to recover full costs. The ALJ in
this case, in awarding Appellee attorney’s fees, noted that “Employer/Carrier
contested Mr. Jacoby’s claim on almost every position. . . . [and] that the Claimant
prevailed to some extent on every issue other than his entitlement to permanent total
disability.” These results were automatically affirmed at the BRB level, meaning
that after appeal, Appellee continued to prevail on most of the issues. Appellants
had argued that no benefits were due, but in the end Appellants were forced to pay
rather substantial benefits to Appellee. The BRB’s implicit characterization of
Appellee’s appeal as “successful” was therefore appropriate, and the outcome
warranted a complete award of attorney’s fees to the prevailing party.
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For the foregoing reasons we AFFIRM the judgment of the BRB.
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