Avondale Industries Inc. v. Davis

The administrative law judge made no attempt to quantify the award and take it into consideration when determining the amount of the attorney's fee award. Given the fact that this limited recovery is the sole basis for recovery of attorney's fees under LHWCA �28(b), $15,500 in attorney's fees may be excessive.

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Click here for the full text of this decision The administrative law judge made no attempt to quantify the award and take it into consideration when determining the amount of the attorney’s fee award. Given the fact that this limited recovery is the sole basis for recovery of attorney’s fees under LHWCA �28(b), $15,500 in attorney’s fees may be excessive. FACTS:Charlene Davis injured her back while working for Avondale Industries. Avondale paid her temporary disability benefits, but stopped when Davis’ physician released her to light duty and Davis refused to accept any light-duty positions offered her. An administrative law judge found that Avondale had properly terminated Davis’ benefits, but ordered Avondale to pay for the psychiatric treatment Davis would need for the depression she developed over her injury. The ALJ also assessed Avondale $736.50 because it changed Davis’ compensation rate without providing sufficient information to the Secretary of Labor, as required under the Longshoreman and Harbor Workers’ Compensation Act. Davis’ attorney applied for $30,000 in attorney’s fees under LHWCA �28(b), which says, “[I]f the compensation . . . awarded is greater than the amount paid or tendered by the employer or carrier, a reasonable attorney’s fee based solely upon the difference between the amount awarded and the amount tendered or paid shall be awarded.” Avondale said the attorney was not entitled to fees because the issues Davis prevailed on were ones raised sua sponte by the ALJ. Nonetheless, the ALJ awarded fees to the attorney in the reduced amount of $15,500. Avondale appealed to the Benefits Review Board, which remanded the case to the ALJ for consideration of: 1. the extent to which counsel’s efforts affected the award of future psychiatric treatment; 2. the extent to which counsel’s efforts affected the award of penalties and interest; and 3. the rationale for reducing the fee by one-third. On remand, the ALJ found that the attorney’s efforts were “intimately related” to Davis’ success. He also found that Davis had prevailed on two-thirds of her claims (i.e., she lost only one-third of her claims). The BRB affirmed. HOLDING:Vacated and remanded. To show whether a party has been successful for purposes of �28(b), the court explains, an ALJ should apply the factors announced in Hensley v. Eckerhart, 461 U.S. 424 (1983): “First, the ALJ should confine the fee award only to work done on the successful claims. . . . Second, the success obtained on the remaining claims should be proportional to the efforts expended by counsel.” The court notes that the ALJ applied this framework to some extend and approves of ALJ’s finding that Davis’ attorney expended “a great deal of effort” presenting the evidence of Davis’ psychological condition and her entitlement to future coverage for treatment. On the other hand, the court faults the ALJ for not considering Davis’ limited financial victory of $736.50 in penalties and interest, plus future medical costs, because it ignores �28′s directive to consider the difference between the amount awarded and the amount tendered or paid. Consequently, the award of $15,000 in attorneys’ fees “may be excessive,” the court rules. OPINION:Clement, J.; Reavley, Jones and Clement, JJ.

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