A Cautionary Tale to Attorneys Prosecuting Cases Under the Defense Base Act

A recent decision should serve as a cautionary tale to attorneys prosecuting cases under the Defense Base Act and as a roadmap for defense counsel determining whether to object to Claimant counsel’s fee itemization.

LHWCA Section 28: Attorney’s Fees

Section 28 of the Longshore and Harbor Workers’ Compensation Act is the authority for an award of an attorney’s fees to a practitioner prosecuting a case under the Defense Base Act. Generally, Section 28(a) applies when an employer denies a claimant’s entitlement to any compensation or continued compensation or when there is a controversy as to the nature and extent of the claimant’s disability. In order for a fee to be awarded pursuant to Section 28(a), claimant’s attorney must engage in a “successful prosecution” of the claim, which most commonly includes, but is not limited to:

  • establishing jurisdiction under the Act;
  • establishing the claimant’s right to past, present, or future medical benefits;
  • obtaining benefits in a controverted claim subsequent to an informal hearing;
  • and/or prosecuting claim for penalties and interest.

However, attorney fees may only be incurred after 30 days from the date the employer received notice of the claim or from the date the employer declined to pay benefits, whichever date occurred first.

Practically speaking, in order to recoup attorney’s fees, Claimant’s counsel must submit:

  • a fee application providing a written statement of the extent and character of the work performed;
  • an hourly breakdown of that work;
  • a description of the professional statusof each person performing the work (in other words, whether the work was performed by an attorney, paralegal, law clerk, or other legal assistant);
  • and the normal billing rate of the attorney and staff.

The presiding Judge when reviewing a fee application takes the following factors into account: the quality of the representation, the complexity of the issues involved, and the amount of benefits awarded to the claimant.

While attorney fee petitions are regularly approved when the parties have come to an agreement prior to their submission for approval, on occasion, the requested fee by Claimant’s counsel is disputed. On those instances when an administrative law judge reduces the attorney’s fee from the amount requested, the judge is required to provide sufficient explanation of the reasons for the reduction.

ALJ Rules When Claimant Counsel’s Fee is Disputed

District Chief Administrative Law Judge Paul C. Johnson, Jr. did just that in an Order issued earlier this year. In that matter, Claimant’s counsel requested a billable rate of $500.00 per hour for his services, which Judge Johnson agreed to be consistent with his prevailing market rate finding. However, Judge Johnson noted that the fee petition in question did not describe the professional status of the person performing the work on the case. Accordingly, Judge Johnson reduced the attorney’s hourly rate to $385.00 an hour, which was the midpoint between the rate earned by partners in the comparable legal market.

With regard to the amount of hours expended in successfully prosecuting the case, Judge Johnson was also critical. More particularly, Judge Johnson noted that “[t]he petition is very heavy on communications between attorney and client and quite light on actual legal work.” In addition, Judge Johnson found that the hourly entries were “more often than not excessive, redundant, and unnecessary.” For instance, Judge Johnson challenged and declined to award fees for the following:

  • A dozen entries reviewing e-mails from the client thanking counsel for his time and work equating to $950.00 at the attorney’s requested billable rate and reduced time spent on attorney-client communications by 75%.
  • Time billed on an emergency motion for summary decision, which Judge Johnson expressed had “non-existent” chances of success in view of the fact that discovery had not been initiated.
  • The hours spent on preparation of a reply to Employer’s objections to the fee petition as a result of the fact that the arguments set forth in the reply were duplicative of the arguments contained in the attorney’s brief that accompanied the fee petition.
  • Claimant counsel’s request for triple attorney’s fees to deter the frivolous denial of claims due to the fact that the request was not supported by any statutory or regulatory authority, was essentially a request for punitive damages, and would provide counsel with an “extraordinary, unearned windfall.”

In conclusion, Judge Johnson reduced a requested fee and costs in the amount of $332,145.00 to $44,119.50.

The Upshot

This decision should serve as a cautionary tale to attorneys prosecuting cases under the Defense Base Act and as a roadmap for defense counsel determining whether to object to Claimant counsel’s fee itemization.

Of some note, Judge Johnson held that prior attorney fee decisions are not indicative of the prevailing market billable rate for a Claimant’s attorney and made clear that the fee petition must delineate the professional status of the individual billing/working on the case. In addition, Judge Johnson refused to award fees for attorney-client communications that appeared inflated and work performed on a “meritless motion” that frivolously expended finite judicial resources. Finally, Judge Johnson refused to award fees for work performed that was, in his view, duplicative and unnecessary.