ISSUE: Exemption for Small Vessel Facilities

Jack_crop 72dpiBased on telephone calls and e-mails that I’ve received, there has been renewed interest in a topic I discussed back in November 2013. This involves section 3(d) of the Longshore Act (33 U.S.C. 903(d)).

There is a provision in the Longshore Act that allows certain small vessel facilities to be certified by the U.S. Department of Labor as exempt from Longshore Act workers’ compensation coverage. Please read the AEU Longshore blog dated November 21, 2013 for a full discussion.

I would like to stress that this provision has been around since the 1984 amendments, and there are good reasons why certification has been sparingly requested and granted. Brokers and employers should understand the qualifications and conditions that attach to the small vessel facility exemption.

I don’t want to repeat the entire previous discussion, so I’ll just reiterate a few points that I think should be emphasized.

The facility must build, repair, or dismantle “exclusively” small vessels, as “small” is defined in section 3(d):

“3(d)(3) For purposes of this subsection, a small vessel means –

   (A) a commercial barge which is under 900 lightship displacement tons; or
   (B) a commercial tugboat, towboat, crew boat, supply boat, fishing vessel, or other work vessel which is under 1,600 tons gross.”

Exclusively means 100%, no exceptions.

If the facility works on any military or Coast Guard vessels then it does not meet the requirements for exemption.

The exemption does not cover injuries that occur over the navigable waters of the United States or upon any adjoining pier, wharf, dock facility over land for launching vessels, or facility over land for hauling, lifting, or drydocking vessels. So even in a section 3(d) certified facility there will be work that is covered by the Longshore Act.

The exemption does not apply to facilities that receive Federal maritime subsidies (the construction differential subsidy (CDS) or operating differential subsidy under the Merchant Marine Act of 1936, 46 U.S.C. section 1101 et seq.).

The facility’s employees must be covered by state workers’ compensation law as a condition of the exemption.

Most importantly, you should be aware of this language from the U.S. Department of Labor’s regulations implementing section 3(d), “When a vessel other than a small commercial vessel enters a facility which has been certified as exempt from coverage, the exemption shall automatically terminate as of the date such vessel enters the facility. The exemption shall also terminate on the date a contract for a Federal maritime subsidy is entered into, and in the situation where the facility undertakes to build a vessel other than a small vessel, when the construction first takes on the characteristics of a vessel, i.e., when the keel is laid. All duties, obligations, and requirements imposed by the Act, including the duty to secure compensation liability as required by sections 4 and 32 of the Act, and to keep records and forward reports, are effective immediately.” (20 C.F.R. 702.175)

An exempt facility can become an uninsured facility without the owners realizing it. Or if it has USL&H coverage in place based on the activities excluded by the terms of the exemption, then it still faces a serious situation. If the facility unknowingly loses its exemption, it can begin to accumulate penalties for failing to timely report injuries to the Department of Labor on Form LS-202. The penalty for failing to timely report injuries is up to $11,000 per occurrence.

Make sure that you are fully informed with regard to the requirements and conditions that apply to a section 3(d) small vessel facility exemption.

ISSUE: Concurrent Jurisdiction

Jack_crop 72dpiI’ve discussed the so-called “concurrent jurisdiction” problem on previous occasions. This refers to the inequitable state of affairs confirmed by the U.S. Supreme Court in Sun Ship v. Pennsylvania, 447 U.S. 715 (1980). The decision held that the Longshore and Harbor Workers’ Compensation Act (33 U.S.C. 901 et seq.) does not supplant state workers’ compensation laws, it supplements them. This means that maritime workers covered by the Longshore Act are often simultaneously covered by state act compensation laws. The workers have the benefit of double coverage, and the maritime employers have the burden of redundant exposure.

When the Longshore Act was extensively amended in 1984, Sun Ship was not overruled, so concurrent jurisdiction was preserved.

While all state workers’ compensation laws are “concurrent” with the Longshore Act under Sun Ship, many states have expressly provided in their insurance laws words to the effect that if you are covered by a federal liability or compensation statute then you are not covered by that state’s workers’ compensation law.

Slowly, but in what may be an inexorable trend, states are moving from “concurrent” Longshore Act/state act status, to “exclusive” status, whereby workers covered by the Longshore Act are not covered by state act.

Virginia did it, effective July 1, 2012.

Pennsylvania has now done it. The State’s General Assembly Bill No. 2081 was signed into law on June 18, 2014. It amends the State’s workers’ compensation law by adding straightforward language to the definition of employee:

“Section 104. The term ‘employe’, as used in this act is … exclusive of persons subject to coverage under the Longshore and Harbor Workers’ Compensation Act or the Merchant Marine Act of 1920 ….”

So add another state to the list of “exclusive” states. Here’s my unofficial list:

Concurrent States: AL, AK, CA, CT, GA, IL, MA, MI, MN, MO, NC, NY, RI, SC, TN, WV, WI

Exclusive States: FL, HI, IN, KY, LA, ME, MD, MS, NJ, OH, OK, OR, PA, TX, VA, WA

No state, to my knowledge, has gone from “exclusive” back to “concurrent”.

It remains my opinion that this action in Pennsylvania takes nothing unfairly away from maritime workers. It redresses an inequity by fairly placing Pennsylvania maritime employers on an even playing field with other employers in the State, and importantly, with other maritime employers in several neighboring states, with regard to workers’ compensation coverage. Maritime workers remain properly covered by what is considered to be the most liberally interpreted workers’ compensation law in the country. The workers are simply no longer in the uniquely privileged position of having double coverage.

It’s curious to me that workers with such a unique, unearned privilege somehow convince themselves that this fortuitous benefit of double coverage is their due while they overlook the competitive disadvantage in which this places their employers in the industry that provides their livelihood.

At any rate, this is another step in the right direction.

ISSUE: AEU Safety and Claims Forum

Safety Forum May 2014The American Equity Underwriters, Inc. (AEU) conducted its latest Safety & Claims Forum in St. Louis on May 7th and 8th, 2014. Following each previous semi-annual Forum I’ve devoted space here to discussions of the events. These Forums provide important opportunities for education and professional growth for ALMA Members.

The growth trend continued for the AEU Forum, and this latest event was the best attended yet, with over 100 participants, comprised of ALMA Members, their brokers, and invitees.

The Keynote Speaker was Joseph White with Dupont Sustainable Solutions. His presentation was entitled, “Reaching the Heart: The Art & Science of Persuasion”. It reviewed cognitive and affective intellect as they relate to injury avoidance, rewards and anticipated outcomes.

The closing speaker was Julio Malera. His presentation was entitled, “It Only Takes Everything You’ve Got”. He discussed how to develop and practice the skills needed to fully develop potential.

In between Mr. White’s and Mr. Malera’s presentations, this Forum featured presentations to the entire group as well as a large number of breakout sessions, offering more than enough for everyone. Here is simply a list of the subjects covered.

Effective Environmental Inspections

“Beat The Drum: Leadership’s Role in Building a Safety Culture”, discussing the roles of leading versus managing, how to avoid unintentional consequences and build and continually reinforce the safety culture that you want.

Training and Developing Your Safety Professionals

Machine Guarding: Point of Operations Guards

Claims – ADA Accommodations vs. Permanent Light Duty presented by attorney Robert Nienhuis

Incentive Programs

Marine Chemist: Effective Closed Space Safety Program

Jones Act Versus Longshore Act: The Uncertainty Zone

Completing the LS-202, Employer’s First Report of Injury

Communications Between the Employer and the AEU Claims Specialist

Q & A Claims Panel Discussion

Marine Cargo Handling and Health Breakout Agenda

Crane and Gear Certifications

New Safety Related Ideas & Technology

Members Helping Members

OSHA Website Resources for Marine Cargo Handling

Becoming SHARP Certified

Marine Cargo Handling Lessons Learned and Solutions

Shipyard Safety and Health Breakout Agenda

Electronic Inspections

Fire Safety Plans

Revisit Past Safety Solutions

Lessons Learned: Sharing Ideas for Improvement

Speakers were comprised of industry experts, ALMA Members offering their own actual experience, and AEU subject matter experts. If all of this seems like an extraordinarily comprehensive and ambitious program, you’re right, it was. And judging from the unanimous feedback, it was an extraordinary success.

The next AEU Safety and Claims Forum will be held in Baltimore in October 2014.

Issue: Photographs and Subrogation

Royce sm head shotThis is a guest blog, provided by Royce Ray. Royce is the Director, Subrogation Recovery Unit, with The American Equity Underwriters, Inc. He is a Certified Subrogation Recovery Professional (CSRP), with over 20 years experience in the area of personal injury law. He is an expert.

Here’s Royce 

In my August 2010 Blog article, I emphasized the importance of an early investigation to successful subrogation. One element of such an investigation should be photographs (and plenty of them!). Indeed, photographs can add significant value to a third party claim and consequently, make a subrogation claim more valuable, which will save you money on your comp insurance.

When I think about the critical parts of a good investigation, the old adage “a picture is worth a thousand words” immediately comes to mind. Few things are more persuasive to a jury in an injury case than graphic depictions of what happened. It is one thing for a jury to hear a witness’ description of a scene or event. It is entirely different for a jury to see a picture. Which one do you think would be more persuasive, vivid color photographs or witness testimony?

The time to take plenty of photos is during the initial subrogation investigation. The incident scene will rapidly change as time passes. Consequently, the quicker that you can document with photographs the better.

You should take many pictures, even of items that you think are not important. Often things that appear unimportant during the initial incident investigation will be important later. Once that happens, if you do not have a photo of the item in controversy it is too late and you will be at a disadvantage. The best way to prevent that is to get photos showing lots of different perspectives, distances, heights, views, angles, close-ups, surfaces, and conditions. A yard stick, tape measure or other object can help demonstrate distances and relative sizes. If possible, you should get pictures of the employee’s injuries. If a product liability claim is possible, detailed pictures of the product and all of its components (including all labels) should be taken as well.

Video footage of the area being investigated must be strongly considered as video can be even more powerful at conveying information than pictures. Sometimes you will face circumstances where you need to take photographs or video but do not have time to retrieve a quality camera. Many cell phones and blackberries have decent cameras or video recorders. These applications will suffice in an emergency.

An important word of caution before taking videos, especially before using any device with audio recording capability: you should thoroughly familiarize yourself with any applicable Federal and state criminal laws that govern electronic eavesdropping (preferably you should consult with an attorney).

Be sure to create a log that details who took the photos, the date, time, and place that they were taken, a description of what each photo shows and why they were taken. This information will come in handy months or years later because as time passes you can demonstrate the intent of the photo without having to rely on memory. And, generally testimony from the person who took the photos is needed to lay the proper foundation for getting the photographs admitted into evidence for consideration by a jury.

It is a mistake to assume that taking a few pictures here and there is adequate. You can never have enough photographs. In the computer age, there is no reason not to have lots of good photographs, for taking, storing and organizing large numbers of quality digital photographs is inexpensive and easy.

 

ISSUE: Periodic Update on Recent Events

Jack_crop 72dpiThis is an update regarding recent significant events involving the Longshore Act.

The good news is that, considering “recent” to be from January 1, 2013, to the present, there hasn’t been too much new of national significance. The exception has been some personnel changes and new administrative procedures implemented by the U.S. Department of Labor, which administers the Longshore Act.

The Division of Longshore and Harbor Workers’ Compensation is under new management at the National Office in Washington, DC. The new Longshore Director is Antonio Rios. The new Chief, Branch of Insurance, Financial Management, and Assessments is Rich Stanton, and the new Chief, Branch of Policies, Procedures, and Regulations is Jennifer Valdivieso.

Also, the DOL issued Industry Notice No. 144 on November 14, 2013. It contained important new instructions for mailing injury reports, claims forms, and correspondence in Longshore cases effective December 2, 2013. The New York Longshore District Office is designated the “Central Case Create” site. All new reports of injury and claim forms are to be mailed to: U.S. Department of Labor, OWCP, Division of Longshore and Harbor Workers’ Compensation, 201 Varick Street, Room 740, P. O. Box 249, New York, NY 10014-0249.

After a case has been created, the Jacksonville, FL district office is designated as the “Central Mail Receipt” site. All case specific mail is to go to the following address: U.S. Department of Labor, OWCP, Division of Longshore and Harbor Workers’ Compensation, 400 West Bay Street, Suite 63A, Box 28, Jacksonville, FL 32202.

All checks (for deposit to the Special Fund or in response to penalties), as well as inquiries, forms, and other documents concerning self-insurance authorization, security deposits, and Special Fund assessments are to go to the following address: U.S. Department of Labor, OWCP, Division of Longshore and Harbor Workers’ Compensation, Branch of Financial Management, Insurance, and Assessments, 200 Constitution Avenue, NW, Room C-4319, Washington, DC 20210.

There have been no Longshore cases decided at the U.S. Supreme Court since January 2013.

There have been some interesting cases at the various federal circuit courts of appeals and at the DOL’s Benefits Review Board.

In the federal Fifth Circuit (states of TX, LA, MS), the case of New Orleans Depot Services, Inc. v. Director, Office of Workers’ Compensation Programs, et al. (Zepeda), (April 2013) was a major event. The en banc Fifth Circuit reinterpreted language in section 903(a) of the Longshore Act with regard to situs. Now in the Fifth Circuit, “adjoining”, as in “other adjoining area customarily used by an employer in loading, unloading, repairing, dismantling, or building a vessel” no longer means “neighboring” or “in the vicinity of” navigable waters. Now in the Fifth Circuit, the interpretation of “adjoining” means, “to lie next to” or “to be in contact with”. The Fifth Circuit has thus adopted the interpretation of “adjoining” as used in the Fourth Circuit (states of MD, VA, WV, NC, SC). The Fourth and Fifth Circuits are the only two federal circuits so far that interpret “adjoining” in this restrictive way.

The Fifth Circuit, in Gary Chenevert v. Travelers Indemnity Company, (March 2014) confirmed that an insurance company which makes voluntary LHWCA payments to an injured worker on behalf of the employer acquires a subrogation lien on any recovery by the worker in a Jones Act suit against the employer based on the injuries for which the LHWCA benefits were paid. The key is that the Longshore insurance company was not the same insurance company that insured the employer for Jones Act liability, so it was not a case of the employer subrogating against itself.

Back on December 30, 2011, the DOL issued Industry Notice No. 137 regarding the DOL’s new regulations for Recreational Vessels. The new Regulations (20 C.F.R. 701.301-701.505) were effective January 30, 2012. The Regulations implement the February 17, 2009 amendment to section 2(3)(F) (33 U.S.C. 902(3)(F)) which removed the sixty five foot limitation for the exclusion from Longshore Act coverage for workers employed to repair or dismantle in connection with repair any recreational vessel. Under the amendment, all workers employed to repair recreational vessels are excluded from Longshore Act coverage.

A primary issue is the interpretation of what is meant by “recreational vessel”. The case law so far has been sparse by way of interpretation, but on January 28, 2014, the Benefits Review Board issued its decision in Luis E. DeJesus v. Viking Yacht Company, Inc. and SeaBright Insurance Company, and Director, Office of Workers’ Compensation Programs, BRB No. 12-0581. The Administrative Law Judge had found that the claimant was covered by the Longshore Act because some of the boats that he worked on were company owned “stock vessels”, used for boat shows, sales demos, and sea trials for prospective buyers, and so in his opinion the boats were commercial rather that recreational. The Benefits Review Board reversed the decision and excluded the claimant from Longshore Act coverage under the recreational vessel exclusion and implementing regulations.

The Board focused on the type of work that the claimant was performing and the use of the vessels at the time of the repair, and it found that the use of the stock vessels for sales demos and sea trials did not convert the vessels to commercial use under the Regulations.

More litigation will be necessary before we can be confident as to how the courts will interpret the section 2(3)(F) recreational vessel exclusion.

The Fifth Circuit again, in the case of Larry Naquin, Sr. v. Elevating Boats, L.L.C., (March 2014) issued a surprising (to me) decision affirming a district court’s jury based finding that a vessel repair supervisor was a Jones Act seaman. There was a strong dissent in the case to the effect that the plaintiff was a land based worker not entitled to the Jones Act negligence remedy, but nevertheless this case is another example of the chronic uncertainty in determining coverage issues between the Jones Act and the Longshore Act.

The Benefits Review Board issued a coverage decision in the case of Anne M. Smith v. Huntington Ingalls Industries, Inc. – Newport News Shipbuilding, BRB No. 13-0331, March 19, 2014) in which it analyzed the duties of a mail room worker. The claimant worked in the mail services department of Newport News Shipbuilding and the issue was whether the Longshore Act’s clerical exclusion (section 2(3)(A)) applied. The Board held that the claimant meets Longshore Act status and that the clerical exclusion did not apply. In addition to paper documents and mail the claimant also regularly handled parts and tools, both incoming and outgoing, and thus her duties were integral to the employer’s shipbuilding operations.

The federal Ninth Circuit Court of Appeals (states of WA, OR, MT, ID, CA, NV, AZ, AK, HI) issued two decisions regarding claims for survivor’s benefits under circumstances involving a suicide and an attempted suicide (Schwirse and Kealoha). The court indicated that the “irresistible suicidal impulse” analysis was incorrect, and instead the analysis should be focused on a test for a direct chain of causation between working conditions, a workplace injury, and the suicide. The court also indicated that section 3(c) of the Act did not place the burden of proving willful intent on the employer as an affirmative defense, but rather that the claimant had to prove compensability based on a preponderance of the evidence on the record as a whole.

The Fifth Circuit issued a situs decision involving a multi-use facility in the case of BPU Management, Inc./Sherwin Alumina Co. v. Director, OWCP (Martin), 732 F.3d 457 (5th Cir. 2013). The court traced the movement of ore as it was unloaded and moved through several stages and locations at the employer’s facility from the dock to the manufacturing processes. The case offers a good discussion of how to fix the point at which maritime cargo handling ends and manufacturing begins in this type of facility.

I was going to mention that the Fifth Circuit held that a modification under section 22 of the Longshore Act based on a mistake of fact does not require that the mistake involve new or previously unknown facts.   This was the case of Island Operating Co., Inc. v. Director, OWCP, but the Fifth Circuit has already monopolized this list.

ISSUE: Survivor’s Benefits in the Case of an Injured Worker’s Suicide

Jack_crop 72dpiThe 1984 amendments to the Longshore Act changed the provision for survivors’ benefits. Following the 1972 amendments and up to the date of the 1984 amendments, survivors of workers who were entitled to permanent total disability benefits at the time of death were automatically entitled to benefits regardless of the cause of death, the so-called unrelated death benefit. This was changed. The 1984 amendments require that the death of the injured worker must be caused by a work-related injury (caused, contributed to, hastened, or accelerated, at least in part) in order for survivors to be eligible for benefits.

Currently, section 9 of the Longshore Act (33 U.S.C. 909) states, “If the injury causes death, the compensation therefore shall be known as a death benefit ….” The section goes on to list the various classes of survivors and the amount of survivor’s benefits that each class may qualify for. So, following the 1984 amendments, survivor’s benefits are based on “related death” rather than on “unrelated death”.

If the death of the injured worker is the result of suicide, then the difficult circumstances lead to challenging issues of causation.

First, there are presumptions available to the claimant, and there is a defense available for the employer.

Section 20(a) states, “In any proceeding for the enforcement of a claim for compensation under this Act it shall be presumed, in the absence of substantial evidence to the contrary –

(a)    That the claim comes within the provisions of this Act.

This section 20(a) presumption applies to the issue of whether an injury is causally related to employment, including whether death arises out of employment, once the prima facie case is established, i.e., that the claimant suffered harm, and that working conditions existed or an accident occurred which could have caused the harm.

The employer can rebut the presumption by producing substantial evidence that the deceased’s death was not caused by his employment. If the employer rebuts the presumption, the presumption drops out of the case and the issue of causation must be resolved on the evidence of record as a whole, by a preponderance of the evidence.

Section 20(d) provides a presumption that the injury was not occasioned by the willful intent of the employee to injure or kill himself or another. This presumption may also be rebutted by producing substantial evidence to the contrary, and you’re back to proving causation on the record as a whole by a preponderance of the evidence, including the section 3(c) defense.

Section 3(c) states, “No compensation shall be payable if the injury was occasioned … by the willful intention of the employee to injure or kill himself or another.” If the employer rebuts the section 20(d) presumption and prove willful intent then there is no entitlement to survivor’s benefits.

So, in simple terms, the survivor who files a claim for benefits under the Longshore Act and can establish a prima facie case has two presumptions in his/her favor: 1) that the injury/death is related to work, and 2) that the injury/death was not the result of willful intent on the part of the injured worker to injure or kill himself or another.

The employer may rebut either of the section 20 presumptions by producing substantial evidence to the contrary. If the presumptions are rebutted, they drop out of the case, and the issue is then decided on the record as a whole by a preponderance of the evidence. The employer may then successfully defend the claim under section 3(c), by establishing that, in the event of suicide, that the suicide was the result of willful intent on the part of the worker.

Thus, in cases where the facts establish that the employee committed suicide, the primary issue is the part that the employment related condition played in causing the death and specifically whether the employee had the willful intent to commit suicide.

The first question that may arise is, can suicide not be the result of willful intent, especially where there is a “suicide note” left behind, or there are other indications of pre-planning? The mere fact of suicide, however, does not establish willful intent.

One concept that has evolved in cases of suicide is that of “irresistible suicidal impulse”. If the decedent’s suicide was caused by an “irresistible suicidal impulse” resulting from an employment related condition then this overcomes willful intent and the survivors are entitled to related death benefits.

Interestingly, the federal Ninth Circuit Court of Appeals has issued two recent decisions which change the focus of the causation analysis away from the question of “irresistible impulse” resulting from employment related conditions, into an analysis more in terms of a chain of causation based on whether the work injury and its effects precluded the formation of a rational and willful intent to commit suicide.

The Ninth Circuit states that a survivor’s claim in the case of suicide is compensable where there is, “a direct and unbroken chain of causation” between a compensable work related injury and the suicide where the injury and its consequences directly result in the claimant’s loss of normal judgment, observing that this test better comports with modern psychiatry and the no-fault aspect of the Longshore Act (Kealoha v. Director, Office of Workers’ Compensation Programs, 713 F.3d 521 (2013)).

In my opinion, this “psychiatric” test for causation to be applied to cases involving suicide arising in the Ninth Circuit may have the effect of weakening the section 3(c) defense, because it lends itself to such a potentially broad inquiry. In a broad sense, suicide is often the result of “loss of normal judgment”.   It may also lead to more emphasis on an analysis based on whether there was an intervening cause, that is, a “new and independent agency” or set of circumstances that are not related to the employment and that break the chain of causation and causes the suicide. In other words, was the suicide due to a non work related supervening set of circumstances and not the natural or unavoidable result of the decedent’s original work injury.

As you can see, claims involving suicide can be quite complex.

ISSUE: Attorney Fees, Part Two

Jack_crop 72dpiTwo weeks ago I discussed sections 28(a), (b), (c), and (e) of the Longshore Act. We considered under what circumstances liability to pay the claimant’s attorney’s fee is shifted to the employer and when the fee is payable by the claimant as a lien on compensation.

Now it’s time to discuss the manner in which the amount of the approved fee is derived. The first thing we notice is that the word “reasonable” figures prominently in the discussion. The approved fee must be “reasonable”, based on consideration of a number of factors, all of which are based on reasonableness.

So, what is a reasonable fee based on? And how do you approve an hourly rate in the “relevant market”, for “necessary” work, to come up with a “reasonable” fee award?

It’s not as easy as it used to be. Up until just a few years ago all that was necessary in approving a fee award under the “abuse of discretion” standard of review was for the adjudicator to cite hourly rates in fee awards in recent Longshore Act cases and the job was pretty much done. Not anymore. Attorney fees have been hotly contested in recent years, and the “relevant market” is no longer simply prior Longshore cases.

First, the burden of proof to support a fee request is on the fee applicant (claimant’s lawyer), and the employer has a reasonable (that word again) time to respond and file objections. The adjudicator, whether the District Director, administrative law judge, Benefits Review Board, or court must then determine a “reasonable” fee that is in line with the prevailing hourly rate in the relevant community for similar services by lawyers of reasonably comparable skill, experience and reputation, that is reasonably commensurate with the necessary work done, and that takes into account the quality of the representation, the complexity of the legal issues involved, and the amount of benefits awarded.

Although the standard for review is “abuse of discretion” and, in fact, there is wide discretion in considering the various factors in evaluating the fee application, the adjudicator must specifically consider all of the evidence submitted by the fee applicant, as well as all objections filed by the employer. As I said, it’s no longer simply a matter of referring to fees awarded in prior Longshore cases.

The question of hourly rates has been a contentious issue in recent years, and the subject of its own “cottage industry” of litigation. As a result, hourly rates have risen for successful claimant attorneys under the Longshore Act over the past five years, mostly due to the broadening of the concept of relevant community.

Remember, fee shifting under the Longshore Act uses the Lodestar method, i.e., hourly rate times work done usually expressed in quarter hour increments. The Supreme Court has identified twelve factors that are relevant to setting reasonable hourly rates under the Lodestar method. Some of the relevant factors are the attorney’s customary fee, the rate he would be paid in non-Longshore cases, the experience, reputation, and ability of the attorney, the novelty and difficulty of the issues in the case, and the amount involved and the recovery obtained. The point is that skilled attorneys must be willing to take on Longshore cases on behalf of claimants, so the hourly rates must be competitive for legal services in the market and commensurate with the attorney’s reputation and ability.

A fee applicant may submit local, regional, or otherwise appropriate, relevant surveys of legal fees, as well as affidavits of other attorneys in the relevant community who are familiar with his skill and experience, affidavits attesting to the prevailing rates in the community for comparable attorneys for similar services, as well as his own affidavit of what fees he charges in other Longshore cases, as well as information with regard to fees he receives in non-Longshore cases. The burden is on the fee applicant to produce evidence that his rates are in line with those prevailing in the relevant community for similar services by lawyers of comparable skill and experience.

If the fee applicant does not provide sufficient evidence to establish his desired market rate, the adjudicator may derive an appropriate market hourly rate based on fee awards in other Longshore Act cases.

Miscellaneous:

In evaluating a fee application, the adjudicator will consider the novelty of the case and the complexity of the issues in relation to the number of hours expended, not the hourly rate.

The prohibition against fee agreements, the use of the Lodestar method as opposed to a percentage of the recovery method, and the specialization of the Longshore market all result in making it difficult to establish a prevailing market rate and to judge the reasonableness of the work done.

There is no uniform standard among the federal circuits as to what constitutes the relevant community or what a reasonable hourly rate is.

Filing a Notice of Controversion, Form LS-207, does not trigger section 28(a) fee liability; the only trigger is “declining” to pay “any” compensation within 30 days of receiving the notice of the claim.

Traditional clerical type duties performed by clerical employees are not compensable (they are considered to be overhead built into the hourly rate), but work done by paralegals and law clerks, travel time, and time spent preparing, and defending if necessary, the fee application, are compensable if reasonably necessary.

The attorney fee is not payable until the case is finally adjudicated, i.e., all appeals are concluded. So the successful attorney sometimes has to wait quite a while to be paid. If it’s an “unreasonably” long time, the fee may be enhanced. The courts have agreed that an adjustment in the amount is an appropriate factor to consider for a reasonable fee in cases of delayed payment. The measure is the delay between the date that the services were rendered and the date that the fee order is issued. Of course, there is no consensus as to how long the delay must be to trigger enhancement. Two years is probably not long enough, seven years is, and somewhere in between is when you start to consider fee enhancement.

The District Directors, Administrative Law Judges, and the Benefits Review Board are not required to do a full blown analysis with regard to each and every fee petition in each and every case, but the analysis will have to be done frequently enough so that the hourly rate is current for each relevant market.

So, anyway, you get the idea, although we’ve barely scratched the surface. The idea is that there should be reasonable fees paid to successful claimant attorneys in Longshore cases, in accordance with the going rates for comparable work in the relevant market and in view of the results achieved. In this way, skilled attorneys will be willing to take on Longshore cases.

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