FMC Corporation v. DOWCP

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. §§ 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, § 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. § 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. § 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. §

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. § 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. § 904(a)

with id. § 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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review and reverse the award of attorney's fees.

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