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United States Court of Appeals,
Fifth Circuit.
No. 96-60664.
FMC CORPORATION, Employer; National Union Fire Insurance
Company, Petitioners,
v.
Rodrigo J. PEREZ; Director, Office of Worker's Compensation
Programs, U.S. Department of Labor, Respondents.
Nov. 24, 1997.
Petition for Review of an Order of the Benefits Review Board.
Before REYNALDO G. GARZA, KING and BENAVIDES, Circuit Judges.
BENAVIDES, Circuit Judge:
This appeal involves whether an Administrative Law Judge
("ALJ") properly awarded attorney's fees to a claimant under
Section 28 of the Longshore and Harbor Workers' Compensation Act,
33 U.S.C. งง 901-50. The ALJ's award was affirmed as a matter of
law by the United States Department of Labor Benefits Review Board
(the "Board") when the Board did not act on the petitioners' appeal
within one year. See Omnibus Appropriations for Fiscal Year 1996,
Pub.L. No. 104-134, ง 101(d), 110 Stat. 1321-219 (1996). Because
we conclude that the award of attorney's fees was not authorized by
statute, we grant the petition for review.
I.
On April 25, 1989, Rodrigo J. Perez injured his right knee and
lower back while working for FMC Corporation ("FMC") on an offshore
platform. In June 1989, FMC voluntarily began paying Perez medical
benefits and weekly compensation under the Texas workers'
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compensation regime. The weekly compensation was made retroactive
to the date of injury. In August 1989, FMC began paying Perez
temporary total disability benefits under the LHWCA. Not until two
years later, on August 14, 1991, did Perez file a formal claim for
compensation under the LHWCA. In that claim, he asserted that he
was entitled to a higher weekly compensation rate than the rate
paid by FMC, and also that he was permanently disabled. FMC did
not formally controvert the claim, but continued its voluntary
payments to Perez under the LHWCA.
From 1991 through December of 1993, Perez attended a
vocational rehabilitation program sponsored by the Texas
Rehabilitation Commission and adopted and funded by the United
States Department of Labor's Office of Workers' Compensation
Programs. Perez reached maximum medical improvement, and his
disability status became permanent, in February 1993. FMC
continued to pay disability benefits after Perez's injury became
permanent.
A dispute developed between the parties regarding whether
Perez's vocational rehabilitation training would enable him to
achieve his pre-injury income levels. The company maintained that
because of Perez's post-injury training, he would eventually regain
his pre-injury income levels. Nevertheless, the company continued
to pay weekly benefits for total disability until the parties
settled Perez's weekly benefit claim.
On October 29, 1993, the parties signed a written settlement
agreement, which resolved Perez's weekly benefit claims. FMC
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agreed to pay Perez a lump sum of $70,000 and $10,000 per year for
the following seven years. In the settlement agreement, the
parties stipulated that "[a]ll benefits due have been paid." The
settlement agreement did not dispose of Perez's claim for
attorney's fees. The district director approved the settlement
pursuant to Section 8(I) of the LHWCA, 33 U.S.C. ง 908(I). The
following day, counsel for Perez submitted a fee petition to the
district director, asking for an award of $16,800. The district
director awarded counsel $9,712.50.
II.
Our review is limited to determining "whether the Board
correctly concluded that the ALJ's order was supported by
substantial evidence on the record as a whole and is in accordance
with the law." Avondale Indus., Inc. v. Director, Office of
Workers' Compensation Programs, 977 F.2d 186, 189 (5th Cir.1992).
We conclude that the ALJ committed an error of law by making an
attorney's fees award without statutory authorization.
That a dispute existed as to the appropriate amount of weekly
benefits or the claimant's disability status does not alone trigger
the LHWCA's attorney's fees provisions. Rather, the LHWCA provides
for the award of attorney's fees to an LHWCA claimant in only two
circumstances. Under Section 28(a), the claimant is entitled to
attorney's fees if the employer "declines to pay any
compensation...." 33 U.S.C. ง 928(a). An employee may be entitled
to attorney's fees under Section 28(b) if, after an informal
conference, the employer rejects the recommendations of the Board
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or commissioner; the employer tenders an amount in lieu of the
recommendation; the employee rejects the amount tendered by the
employer; the employee hires an attorney; and the employee
obtains an amount greater than the amount tendered. 33 U.S.C. ง
928(b). Thus, Section 28(b) gives an employer an opportunity to
avoid the payment of attorney's fees by either (1) accepting the
Board's or Commissioner's recommendations or (2) refusing those
recommendations but tendering a payment that is accepted by the
claimant. The statute expressly states that "In all other cases
any claim for legal services shall not be assessed against the
employer or carrier." 33 U.S.C. ง 928(b).
Neither of the express statutory provisions entitles Perez to
an award of attorney's fees in this case. The employer did not
refuse to pay any compensation, but voluntarily initiated temporary
total disability benefits. When Perez reached maximum medical
improvement in February 1993, the employer continued to pay total
disability benefits. These payments continued until the
settlement. The parties state in the settlement agreement that
"all benefits due have been paid."
Perez argues that although FMC voluntarily paid temporary
total disability benefits, it declined to pay "any compensation"
for permanent total disability. He relies on cases suggesting that
if the employer pays one kind of disability benefit, but refuses to
pay another type, this may be the equivalent of not paying "any
compensation" within the meaning of Section 28(a). See National
Steel & Shipbuilding Co. v. United States Dep't of Labor, Office of
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Workers' Compensation Programs, 606 F.2d 875 (9th Cir.1979);
Presley v. Tinsley Maintenance Serv., 529 F.2d 433 (5th Cir.1976);
Baker v. Todd Shipyards Corp., 12 Ben.Rev.Bd.Serv. (MB) 309 (May
14, 1980). Unlike the employers in those cases, however, FMC
continued to pay total disability benefits after Perez's disability
status became permanent, and even thereafter, throughout the period
of his vocational rehabilitation. See Louisiana Ins. Guar. Ass'n
v. Abbott, 40 F.3d 122, 128 (5th Cir.1994) (continuation of total
disability benefits during full-time rehabilitation was proper).
In other words, FMC never altered its course in making payments
consistent with those due to a worker with a permanent total
disability. If a claimant is entitled to a "total" disability
payment, the amount of the weekly benefit is the same whether the
disability is temporary or permanent. Compare 33 U.S.C. ง 904(a)
with id. ง 904(b). FMC did not refuse to pay permanent benefits
but in effect made such payments through the date of settlement.
An award of attorney's fees under Section 28(b) is
appropriate only if the dispute has been the subject of an informal
conference with the Department of Labor. See Todd Shipyards Corp.
v. Director, Office of Workers' Compensation Programs, 950 F.2d
607, 610-11 (9th Cir.1991). The present dispute settled before the
parties resorted to the Department of Labor's informal dispute
resolution mechanism.
Because neither Section 28(a)'s nor Section 28(b)'s
requirements were satisfied, the attorney's fees award was not
authorized by statute. Accordingly, we grant the petition for
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