Fifth Circuit’s Ruling Clarifies Rules for Fee Shifting Provisions of LHWCA

The Fifth Circuit’s ruling in Ramon Rivera v. Ameri-Force, Inc. has clarified the Circuits’ rules for the fee shifting provisions of 33 U.S.C. § 928(b) under the Longshore and Harbor Worker’s Compensation Act (“LHWCA”). This decision should be considered by employers and carriers when responding to informal conference recommendations. The Court again cautioned strict adherence to the statute and held that subsequent recommendations by a claims examiner do not excuse the failure to accept initial recommendations to the parties.

Ramon Rivera v. Ameri-Force, Inc. – Background

Ramon Rivera sustained occupational hearing loss while employed by Ameri-Force. After filing a claim with the Office of Workers’ Compensation Programs of the U.S. Department of Labor, an informal conference was held. The Claims Examiner issued a recommendation on July 28, 2016 that Claimant be paid compensation, among other issues. Counsel for Employer and Carrier notified the Claims Examiner by letter on August 5, 2016 that it accepted the recommendation with regard to being the last responsible employer and carrier, but raised the unresolved issue of the correct average weekly wage (“AWW”) and compensation rate. In addition, Employer and Carrier expressed that it “would appreciate the opportunity to present its choice of doctor’s findings before any final recommendations are made…” A second medical opinion (“SMO”) was scheduled following the informal conference.

Two weeks later, counsel sent another letter to the Claims Examiner arguing that Claimant’s AWW should not include per diem payments and suggesting an AWW figure different from the recommendation of the Claims Examiner.

On August 24, 2016, a newly assigned Claims Examiner issued a new recommendation finding that per diem payments should be considered in the calculation of AWW. Employer and Carrier requested reconsideration until they could submit their SMO report, which they did three days later. The SMO physician concluded Claimant suffered a less severe binaural hearing loss than his choice of audiologist found. On September 7, 2016 the Claims Examiner issued the supplemental recommendation that Claimant suffered a binaural hearing loss amount based on the averages of the competing rates proposed by the parties.

Employer and Carrier offered to settle the claim if Claimant would waive his claim for attorney fees. Claimant rejected the offer and Employer and Carrier paid benefits in accordance with the September 7 recommendation. Claimant then filed a petition for attorney fees, which was approved by the District Director. He found Employer and Carrier failed to timely accept the August 24 recommendation, which is required within 14 days of the recommendation being issued. The Benefits Review Board (“BRB”)reversed, finding that the September 7 recommendation rendered the August 24 recommendation moot.

Fifth Circuit Ruling

The Fifth Circuit held that Claimant was entitled to attorney’s fees under the plain language of 33 U.S.C. § 928(b) under the LHWCA. It stated: “An employee may collect attorney’s fees under § 928(b) if: (1) an informal conference is held; (2) the BRB or a deputy commissioner issues a written recommendation; (3) the employer refuses to adopt the redocumentation within 14 days; and (4) the employee procures a lawyer’s services to achieve an award greater than that which the employer was willing to pay after the written recommendation was issued.”

The Fifth Circuit found that the BRB erred when it concluded that the August 24, 2016 recommendation did not apply for the purposes of fee shifting under § 928(b) because the September 7, 2016 recommendation rendered it moot. Employer and Carrier argued that requiring it to accept the August 24 recommendation after the September 7 recommendation rendered the earlier recommendation moot would “lead to absurd consequences and glaringly unjust results.” The Fifth Circuit rejected this argument and stated differing recommendations do not have the same effect as conflicting orders from a court. “So, whereas two conflicting orders cannot operate simultaneously without forcing a party into contempt, two active recommendations can overlap without creating a Catch-22.”

Decisions Highlights Challenges of Defending Claims Under LHWCA

This decision highlights the challenges in defending claims under the Act. Informal conferences are frequently scheduled prior to an Employer or Carrier being able to conduct an SMO. Claims Examiners are required to issue recommendations within ten days of an informal conference, so often are issuing recommendations to allow medical care or pay compensation based solely on the Claimant’s medical evidence. The Fifth Circuit, however, held that the possibility of later correcting the Claims Examiner’s recommendation based on additional medical evidence is not enough. “…under the statute the employer cannot avoid attorney’s fees liability by delaying the claims examiner’s recommendation simply because the employer thinks the claims examiner got it wrong.” The Fifth Circuit found that the request for reconsideration in light of the later SMO report is simply an objection to the recommendation.

This highlights the importance of preparing a defense to a claim as quickly as possible in order to avoid fee shifting under Section 28. SMO opinions should be obtained before an informal conference whenever possible. Otherwise, an Employer and Carrier are left with the option of either accepting the recommendation and paying benefits on a potentially incorrect basis to avoid fee shifting, or continuing the controversion of benefits and risk incurring liability for attorney fees to Claimant’s counsel.

Read the full opinion here >