Section 28(a) Fee Shifting is Precluded If Employer Pays “Actual Compensation” Within 30 Days

In Lincoln v. Ceres Marine Terminals, Inc., a new unpublished BRB decision, Claimant sought an attorney fee award against employer pursuant to Section 28(a).  Section 28(b) fees were not available because no informal conference ever occurred.

Section 28(a) states, in pertinent part:

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 [district director], 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, 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 . . . .

See 33 U.S.C. § 928(a) (emphasis added).

Claimant filed a claim for binaural hearing loss.  Within thirty days, Employer paid Claimant for a 0.5% binaural hearing loss in the amount of $1,256.84.  Employer made no other payments and did not authorize medical treatment until an Order was issued approving a Section 8(i) settlement that covered both indemnity and medical benefits.  Section 28(a) attorney’s fees were denied  after the district director found that the $1,256.94 payment was “actual compensation.”

This “actual compensation” language hearkens back to Green v. Ceres Marine Terminals, Inc., 43 BRBS 173 (2010), rev’d on other grounds, 656 F.3d 235, 45 BRBS 67 (4th Cir. 2011).  In the BRB’s original Green decision, the employer had paid only $1 within Section 28(a)’s time limit.  Ultimately, it was determined that the $1 payment in Green “was merely an attempt to avoid fee liability rather than the payment of compensation for claimant’s injury.”

The same was not true in Lincoln.  The district director acted within his discretion in finding that the $1,256.84 paid to Claimant constituted “actual compensation.”  Because the payment of “any compensation” within 30 days precludes Section 28(a) fee shifting, fees were not owed.

Lincoln v. Ceres Marine Terminals, Inc., BRB No. 12-0418 (2013) (unpublished).

Opinion: When comparing Green and Lincoln, it is clear that the intent behind the payment is the key, and not whether a $1 or $1,256.84 payment is a per se compensation payment.  Instead, the question is whether the employer and carrier made the payment with the intent to compensate the injured worker for their injury.  Further, I’m not ready to say that a $1 payment is precluded from being considered “actual compensation” because the Supreme Court specifically approved of the use of “nominal compensation.”  See Metropolitan Stevedore Co. v. Rambo, 521 U.S. 121 (1997) (“We therefore hold that a worker is entitled to nominal compensation when his work-related injury has not diminished his present wage-earning capacity under current circumstances, but there is a significant potential that the injury will cause diminished capacity under future conditions”).