Nasser Ex Rel. Dupree v. Director

FILED
NOT FOR PUBLICATION APR 26 2010

MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS

FOR THE NINTH CIRCUIT

VICTOR NASSER, to the Use of Eric A. No. 09-70706
Dupree, Phillip M. Cohen, and Joshua T.
Gillelan II, BRB No. 08-0357

Petitioner,
MEMORANDUM *
v.

DIRECTOR, OFFICE OF WORKERS
COMPENSATION PROGRAMS; et al.,

Respondents.

On Petition for Review of an Order of the
Benefits Review Board

Submitted April 16, 2010 **
San Francisco, California

Before: TASHIMA and THOMAS, Circuit Judges, and STAFFORD, Senior
District Judge.***

*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable William Stafford, United States District Judge for the
Northern District of Florida, sitting by designation.
 Victor Nasser, solely for the benefit of his attorneys, Eric A. Dupree and

Joshua T. Gillelan II, petitions for review of the Department of Labor Benefits

Review Board’s decision affirming two orders issued by the administrative law

judge (“ALJ”), awarding attorneys’ fees and supplemental attorneys’ fees,

respectively, to Nasser’s attorneys pursuant to the Longshore and Harbor Workers’

Compensation Act (“LHWCA”), 33 U.S.C. §§ 901-950, as extended by the

Defense Base Act (“DBA”), 42 U.S.C. §§ 1651-1654. The ALJ approved a

settlement of the underlying claim and thereafter awarded fees to Nasser’s

attorneys in an amount significantly less than requested. Nasser seeks review of

the fees awarded to Dupree and Gillelan.

Nasser first argues that the Benefits Review Board (“BRB”) erred by

affirming the ALJ’s use of an improper methodology for calculating fees. In

particular, Nasser contends that the ALJ erred when he based his lawyers’ fee

awards on past awards made by the BRB to LHWCA attorneys in other cases,

which past awards were not themselves based on any evidence of prevailing

market rates in the relevant community. Nasser contends that such

methodology—long approved by the BRB and used by ALJs in awarding

attorneys’ fees—was and is inconsistent with the Supreme Court’s case law

holding that “reasonable fees” under the LHWCA are to be calculated “according

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to the prevailing market rates in the relevant community.” Blum v. Stenson, 465

U.S. 886, 895, 104 S. Ct. 1541, 79 L. Ed. 2d 891 (1984).

One month after the BRB affirmed the ALJ’s decisions in this case, we

decided two cases that disapproved the hourly-rate-setting practice that had long

prevailed at the administrative level. Van Skike v. Dir., Office of Workers’ Comp.

Programs, 557 F.3d 1041 (9th Cir. 2009); Christensen v. Stevedoring Servs. of

Am., 557 F.3d 1049 (9th Cir. 2009). As noted in both Van Skike and Christensen,

attorneys representing LHWCA claimants are forbidden by law from negotiating or

entering into private fee agreements with their clients, which means that there is no

private competitive market for LHWCA attorney’s fees. Van Skike, 557 F.3d at

1046-47; Christensen, 557 F.3d at 1053. Accordingly, for purposes of awarding

fees under the LHWCA, the “relevant community” must be defined more broadly

than the LHWCA bar, and a “prevailing market rate” cannot be determined by

looking solely at previous LHWCA rate-settings that, in turn, were based on

previous LHWCA rate-settings. Van Skike, 557 F.3d at 1047; Christensen, 557

F.3d at 1053-54.

Nasser’s attorney, Dupree, submitted rate surveys and attorney affidavits as

evidence of market rates for similarly-experienced attorneys doing work of

comparable complexity. The respondents countered with no evidence of prevailing

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market rates; instead, they submitted copies of six reported LHWCA cases wherein

ALJs had awarded fees to attorneys in the Western United States based not on

marketplace rates but on ALJ-determined hourly rates ranging from $225 to $300.

Rejecting Dupree’s evidence of market rates, the ALJ selected an hourly

rate—$285 per hour—from within the range of rates reported in the six LHWCA

cases submitted by the respondents.1 The ALJ thus used the very methodology that

was invalidated in Van Skike and Christensen.

Nasser also argues that the ALJ erred by denying fees on fees for all of the

attorney time spent challenging the ALJ’s and BRB’s entrenched hourly-rate

methodology. The ALJ reduced the hours requested by Dupree in his

supplemental application from 136.7 hours to 4.05 hours, explaining that the

“severe” discount was “due to lack of success on the major issue argued, the hourly

rate sought.” Because Dupree has now unquestionably prevailed on the issue

regarding the BRB’s hourly-rate methodology, the ALJ’s rationale for the

reduction in hours is no longer valid.

1
In selecting $285 rather than a higher rate within the range, the ALJ
explained that “none of the work performed herein appears to be so complex as to
warrant a higher rate.” Complexity of issues, however, does not factor into the
selection of a market rate. Instead, case complexity is reflected in the number of
billable hours recorded by counsel. Blum, 465 U.S. at 898-99; Van Skike, 557
F.3d at 1048.

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 Because the ALJ in this case awarded—and the BRB affirmed—attorneys’

fees based on an hourly rate methodology that has been invalidated by this court,

we VACATE the BRB’s decision and REMAND for the agency decisionmaker to

re-evaluate the fee awards to Nasser’s attorneys. On remand, the agency

decisionmaker is directed (1) to make appropriate findings regarding the relevant

community and the prevailing market rate in accordance with our opinions in Van

Skike and Christensen; (2) to reconsider whether the hours requested in Dupree’s

supplemental fee application were reasonable under the circumstances; and (3) to

recalculate the fee awards based on the foregoing factors.

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