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Longshore Insider
When is an Employer Required to Pay a Claimant’s Attorney Fees?
Nov 16, 2020 - Jack Martone, The American Equity Underwriters, Inc.

It’s surprising how cases and controversies continue to arise under the provisions of the Longshore and Harbor Workers’ Compensation Act (the Longshore Act) outside of the big, basic, broad issues such as situs, status, arising out of and in the course of employment, and the “Uncertainty Zone” of coverage between the Longshore Act and the Jones Act/General Maritime Law. 

Sometimes you think that an issue has been pretty much sorted out, and then it surfaces again.

Two recent cases in which entitlement to an employer-paid attorney fee under Section 28(a) (33 U.S.C. 928(a)) provide an example. In these cases, U.S. Department of Labor (DOL) District Director (DD) attorney fee Orders denied an employer-paid fee to the claimant’s attorney. These Orders were reversed by the Benefits Review Board (BRB).

 

Attorney Fees and Section 28(a) of the Longshore Act

First, here is some context. Section 28(a) of the Longshore Act provides for an attorney fee paid by the employer to the claimant’s attorney under certain circumstances. It states,

“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…”

The words used in Section 28(a) have been extensively parsed. Words and phrases such as “declines to pay”, “any compensation”, “thirtieth day”, “written notice of a claim”, “compensation”, “thereafter”, “successful prosecution”, “reasonable”, etc. have been litigated.

 

General Principles Surrounding of the Longshore Act Pertaining to Section 28(a)

Nothing in the Longshore Act requires a claimant to submit evidence of disability or impairment when he or she files a claim. The employer’s knowledge of the extent of disability being claimed is not a factor under Section 28(a). Receipt of the notice of the claim from the DD triggers the commencement of the thirty-day period. Period

In the view of the BRB, “The 30-day period allows an employer sufficient time to have a claimant examined and to determine whether to pay or controvert.” The BRB’s position is that it does not matter that the employer does not (and for that matter cannot) know what to pay within the 30-day period following receipt of a claim with no supporting documentation.

Responses by the employer, such as a request for information or beginning an investigation, constitute “declines to pay” within the 30-day period. This is regardless of whether a controversion has been filed.

 

Jon Davis v. SSA Terminals LLC; Homeport Insurance Company: and Director, Office of Workers’ Compensation Programs, U.S. Department of Labor, BRB No. 20-0038, 4/23/20

In this case, the pertinent facts were undisputed.

In March 2019, the claimant filed a claim for hearing loss benefits under the Longshore Act. The employer received written notice of the claim from the DOL’s DD on March 18, 2019. The employer requested the claimant’s audiogram on April 2. The employer received the claimant’s audiogram (dated January 19, 2019) in July 2019. On June 15, 2019, the employer paid an “advance” of $1,500, and on July 24, 2019, it paid an additional $7,000.

The claimant’s attorney submitted a fee petition and the DD issued an Order denying a fee based on the reasoning that no controversy existed until July 2019 when the employer received the claimant’s audiogram.

NOTE: Discretionary or solely legal issues raised in a DD’s Order can be appealed directly to the BRB (where there are no disputed facts requiring adjudication at the Office of Administrative Law Judges).

Not surprisingly, the BRB reversed the DD’s Order. The BRB has previously rejected the argument that the employer cannot be expected to pay within 30 days when it does not know what to pay because there was no evidence presented with the claim. The employer did not pay any compensation within 30 days of receiving the claim from the DD and thus was liable for the claimant’s attorney’s fee under Section 28(a).

 

James Doherty v. Electric Boat Corporation; Director, Office of Workers’ Compensation Programs, U.S. Department of Labor, BRB No. 20-0103, 4/30/2020

In this case, the claimant filed a claim for hearing loss benefits and requested a copy of his audiogram from the employer on May 10, 2018. The employer received written notice of the claim from the DD on May 22, 2018. The employer requested the claimant’s medical records on June 5, 2018. After this back-and-forth requesting of medical records, the employer authorized hearing aids on March 22, 2019.

The DD initially awarded an attorney fee under Section 28(a) and then reversed this decision on Reconsideration. He found that the employer had “responded” to the claim by requesting medical records.

Again, not surprisingly, the BRB reversed the DD’s denial of an employer-paid attorney fee under Section 28(a). This desultory handling of the claim by the employer clearly invited the application of Section 28(a). Requesting medical evidence while making no payment or authorization for medical treatment (depending on what is being claimed – see note below) constitutes a “declines to pay” under Section 28(a).

NOTE: In Taylor v. SSA Cooper L.L.C., 51 BRBS 11 (2017), the BRB held that the term “compensation” in Section 28(a) is read as “disability and/or medical benefits”. The term “declines to pay” can apply to either indemnity or medical benefits, depending on what is claimed.

NOTE: Not at issue in these two cases is the employer practice to make an initial minimal – but not nominal – payment within 30 days of receiving written notice of the claim from the DD in order to negate employer liability under Section 28(a). This was approved in Lincoln v. Director, Office of Workers’ Compensation Programs, U.S. Department of Labor, 744 F.3d 911 (4th Cir., 2014) where the employer made a payment of 0.5% of the compensation rate against potential liability under Section 8(c)(13) of the schedule, which the Court found was an amount “directly tied to the claim” which satisfied the requirement of “any compensation” in Section 28(a).

NOTE: In Green v. Ceres Marine Terminals, 656 F. 3d 235 (4th Cir. 2011) the payment of $1 was not good enough to avoid the application of Section 28(a).

Somewhere between an initial payment directly tied to the claim and a sham payment intended only to avoid liability under Section 28(a) is the dividing line for an employer to avoid fee liability under Section 28(a).

We have not heard the last of Section 28(a).

 


ABOUT THE AUTHOR

John A. (Jack) Martone served for 27 years in the U.S. Department of Labor, Office of Workers’ Compensation Programs, as the Chief, Branch of Insurance, Financial Management, and Assessments and Acting Director, Division of Longshore and Harbor Workers’ Compensation. Jack joined The American Equity Underwriters, Inc. (AEU) in 2006, where he serves as Senior Vice President, AEU Advisory Services and is the moderator of AEU's Longshore Insider.


The opinions and comments expressed in this article are those of the authors and do not reflect the opinion of ALMA, AEU or AmWINS. None of ALMA, AEU, AmWINS or the authors are responsible for any inaccuracy of content or for any loss or damages incurred by any party as a result of reliance on information contained in this article. Content may not be published or reproduced without the written consent of the authors. Prior articles may not be updated for accuracy as pertinent information changes over time. The Longshore Insider is intended to provide general information about the industry and should not be construed as legal advice under any circumstances. For legal advice, please consult a licensed attorney.
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