“Greater Compensation” and a Higher AWW Calculation

Recently, the Fifth Circuit again addressed Section 28(b) attorneys fees under the Longshore and Harbor Workers Compensation Act.  In Carey v. Ormey Primary Aluminum Corp., an average weekly wage (“AWW”) dispute led to an award of attorneys fees.  The district director determined that the claimant’s AWW was calculated at a rate higher than the employer’s calculations.  The employer voluntarily paid the amount recommended by the district director but also referred the claim to an Administrative Law Judge (“ALJ”) for a formal hearing.  The ALJ calculated the claimant’s AWW as an amount falling between the employer’s calculations and the district director’s calculations.  With respect to Section 28(b) attorneys fees, the employer argued that fees should not shift to the employer because no greater compensation was ever received after the informal conference.  The Fifth Circuit disagreed.

Before attorneys fees shift under Section 28(b), four elements must be satisfied: “(1) an informal conference, (2) a written recommendation for 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 recommendations.” Va. Int’l Terminals, Inc. v. Edwards, 398 F.3d 313, 318 (4th Cir. 2005); Andrepont v. Murphy Exploration & Prod. Co., 566 F.3d 415, 421 (5th Cir. 2009).

The court noted that while the employer did pay the amount recommended by the district director, it also sought to overturn the recommendation through litigation at a formal hearing. Despite its contentions, the employer’s actions amount to a refusal of the director’s recommendations. Therefore, the third element of a Section 28(b) claim was satisfied.  The crux of the decision, however, depended upon the fourth element: “greater compensation.” Here, the court found that the employee secured greater compensation based upon the fact that the ALJ’s AWW calculation was higher than the employer’s calculation.

Carey v. Ormey Primary Aluminum Corp., — F.3d —- (5th Cir. 2010).