IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 99-60322
JAMES J. FLANAGAN STEVEDORES, INCORPORATED;
SIGNAL MUTUAL INDEMNITY ASSOCIATION, LIMITED,
Petitioners,
versus
JOHN C. GALLAGHER; DIRECTOR, OFFICE OF WORKER’S COMPENSATION
PROGRAMS, U.S. DEPARTMENT OF LABOR,
Respondents.
--------------------
Petition for Review of an Order of the Benefits Review Board
--------------------
July 14, 2000
Before REYNALDO G. GARZA, HIGGINBOTHAM, and BENAVIDES, Circuit
Judges.
BENAVIDES, Circuit Judge.
James J. Flanagan Stevedores, Incorporated (employer), and
Signal Mutual Indemnity Association, Limited,1 petition for review
of a final order of the Benefits Review Board (BRB) affirming an
order by an administrative law judge (ALJ) awarding additional
benefits to John C. Gallagher (Gallagher) pursuant to the Longshore
and Harbor Workers’ Compensation Act (LHWCA), 33 U.S.C. § 901 et
seq. (1994). The issues on appeal are Gallagher’s entitlement to
1
For ease of reference, the petitioners collectively will be
referred to as employer throughout this opinion.
two periods of temporary partial disability benefits, the proper
calculation of Gallagher’s weekly wage used in determining the
disability award, the award of attorney’s fees, and the imposition
of a penalty under 33 U.S.C. § 914. Finding no error, we deny the
petition for review.
I. FACTUAL AND PROCEDURAL HISTORY
Gallagher is a longshoreman who worked intermittently on the
waterfront since 1959, and continuously since 1973. On January 20,
1995, while performing his duties as a longshoreman, he fell when
he began to climb a ladder. He sustained injuries to his left
foot, back, and neck. After receiving treatment at a hospital
emergency room, Gallagher sought further treatment from an
orthopedic surgeon, who released him to return to work on February
21, 1995. Meanwhile, the employer had begun voluntarily paying
compensation benefits to Gallagher on January 31, 1995. Those
payments were suspended when Gallagher was released to work.
Gallagher resumed working as a longshoreman. On June 27,
1995, Gallagher sought treatment from another surgeon, Dr. Swann,
who immediately instructed Gallagher to stop working. A few days
later, Dr. Swann performed surgery on Gallagher’s heel to repair a
ruptured Achilles tendon. Gallagher then began a regimen of
physical therapy.
Gallagher filed a claim for compensation on August 22, 1995,
and the employer again paid compensation benefits to him until he
was released to light duty work on August 27, 1996. In November of
2
1996, Gallagher sought the care of another orthopedic surgeon, who
provided him with a brace.
On December 6, 1996, the District Director of the Department
of Labor held an informal conference. According to the employer,
the following issues were discussed but not resolved at the
informal conference: “average weekly wage, temporary total
disability, and medical management.” It is undisputed that there
was a recommendation made by the District Director’s office.
On February 14, 1997, while working, Gallagher’s ankle “rolled
over,” causing him to fall. After that accident, Gallagher never
again attempted to work as a longshoreman.2
A hearing was held before an ALJ on October 6, 1997, at which
time the employer stipulated to all contested issues except
Gallagher’s entitlement to both temporary partial and temporary
total disability benefits during two periods of time,3 the amount
of Gallagher’s weekly wage, penalties under 33 U.S.C. § 914(e), and
interest under 28 U.S.C. § 1961. On February 18, 1998, the ALJ
issued a decision and order finding that Gallagher had a 17.5
percent partial disability in his left foot and awarding him
compensation for a temporary partial disability for the two
disputed periods of time based upon an average weekly wage of
2
Gallagher subsequently entered a Department of Labor
retraining program at a community college.
3
Those periods are from February 21, 1995, to June 26, 1995,
and from August 27, 1996, to February 14, 1997.
3
$929.29 and a residual earning capacity of $346.75.4 Additionally,
the ALJ awarded Gallagher a penalty for late payment of benefits
due under 33 U.S.C. § 914(e). In September of 1998, the ALJ
entered a supplemental decision awarding attorney’s fees to
Gallagher’s counsel. The employer filed an emergency motion to
produce or preserve evidence of counsel’s billing records, which
the ALJ denied. The employer appealed the ALJ’s decisions and
orders to the BRB, which affirmed the award.5 The employer now
petitions this Court for review.
II. ANALYSIS
A. Substantial Evidence
Our review of BRB decisions is limited to considering errors
of law and whether the BRB properly concluded that the ALJ’s
factual findings were supported by substantial evidence on the
record as a whole. See Darby v. Ingalls Shipbuilding, Inc., 99
F.3d 685, 688 (5th Cir. 1996); see also 20 C.F.R. § 802.301(a)
(setting forth BRB’s scope of review of ALJ’s decision).
“Substantial evidence is that relevant evidence--more than a
scintilla but less than a preponderance--that would cause a
4
Also, due to other injuries, the ALJ found that Gallagher
remained temporarily totally disabled for various periods of time.
The temporary total disability compensation benefits were also
based on the average weekly wage of $929.29 found by the ALJ.
5
The BRB affirmed the ALJ’s decision and order awarding
benefits in all respects and affirmed the award of attorney’s fees
in all respects except with regard to the award of expenses, which
was vacated and remanded to the ALJ for further consideration.
4
reasonable person to accept the fact finding.” Director, OWCP v.
Ingalls Shipbuilding, Inc., 125 F.3d 303, 305 (5th Cir. 1997).
The employer argues that the ALJ’s finding that Gallagher was
entitled to temporary partial disability benefits during the two
specified periods of time is not supported by substantial evidence
because the ALJ failed to discuss and consider6 much of the
relevant evidence in violation 5 U.S.C. § 557(c)(3)(A) of the
Administrative Procedures Act, which provides, in relevant part,
that:
All decisions . . . are a part of the record
and shall include a statement of--
(A) findings and conclusions, and the
reasons or basis therefor, on all the
material issues of fact, law, or
discretion presented on the record . . .
.
This Court has declined to adopt the rule followed in the
Third Circuit7 “that an ALJ must articulate specifically the
evidence that supported his decision and discuss the evidence that
was rejected.” Falco v. Shalala, 27 F.3d 160, 163 (5th Cir.
1994).8
6
We note that, in the instant case, the ALJ expressly stated
that his decision was based on “the entire record.”
7
See Cotter v. Harris, 642 F.2d 700, 705 (3rd Cir. 1981).
8
Falco involved a challenge to an ALJ’s failure to make and
articulate credibility findings regarding a social security
claimant’s subjective complaints of pain. We found the Third
Circuit’s rigid approach unnecessary, explaining that this Circuit
had its own strictures. For example, we require an ALJ to
5
The employer challenges the ALJ’s acceptance of Gallagher’s
testimony that the work he performed during the two periods of time
was all that he was capable of doing. However, the ALJ is a fact
finder and is entitled to weigh all credibility inferences.
Avondale Shipyards, Inc. v. Kennel, 914 F.2d 88, 91 (5th Cir.
1990). When reviewing this determination, we must be mindful not
to substitute our judgment for that of the ALJ, “nor may we reweigh
or reappraise the evidence, instead we inquire whether there was
evidence supporting the ALJ’s factual findings.” Boland Marine &
Manufacturing Co. v. Rihner, 41 F.3d 997, 1002 (5th Cir. 1995)
(citation and internal quotation marks omitted).9
articulate reasons for rejecting a claimant’s subjective complaints
of pain when the evidence clearly favors the claimant. Id.
9
The employer also argues that the ALJ failed to give due
consideration to the testimony of Peter Duffy (Duffy), an expert
witness on the subject of stevedore jobs available at the Port of
Corpus Christi. An ALJ may “accept any part of an expert’s
testimony; he may reject it completely.” Kennel, 914 F.2d at 91.
Here, the ALJ expressly considered Duffy’s testimony:
Peter Duffy testified for [the] Employer.
He stated that he worked as a longshoreman for
30 years and in his opinion there was work
available to [Gallagher] which he was capable
of performing. Mr. Duffy pointed out that
grain boats are loaded by spouts and while
this is occurring the gangs do very little if
any physical work. Mr. Polinard was called in
rebuttal to explain there was more to the task
of loading a grain boat than Mr. Duffy
described.
The ALJ clearly considered Duffy’s testimony; however, he
reasonably concluded that the testimony of Polinard, a working
longshoreman, rebutted Duffy’s testimony.
6
In regard to the first disputed period of temporary partial
disability, the ALJ considered the medical evidence and found that
Dr. Snook, the physician who released Gallagher to work, “either
mis-diagnosed [Gallagher’s] condition or the condition greatly
worsened with [his] efforts to work between February 20, 1995, and
June 27, 1995.” There is substantial evidence to support this
finding in that on June 27, 1995, when Gallagher sought treatment
from another surgeon, Dr. Swann, he was immediately advised to stop
working because surgery was needed to repair a severed Achilles
tendon.
In regard to the second disputed period of temporary partial
disability, although Dr. Swann released Gallagher to work on August
27, 1996, the ALJ credited Gallagher’s continued complaints of pain
after that date. The ALJ expressly recognized that another
physician, Dr. Wilk, found Gallagher “to be restricted in his
activities and felt that if he persisted on longshoring he should
take no jobs that required him to be on his feet for long periods.”
Additionally, Dr. Wilk equipped Gallagher with an air brace. Dr.
Wilk also found that Gallagher’s ankle was not at maximum medical
improvement until January of 1997. We are satisfied that there is
substantial evidence in the record to support the ALJ’s finding
that Gallagher was temporarily partially disabled during the two
periods of time in question.
B. Wages
The employer next argues that the ALJ erred by including a
7
container royalty benefit (CRB)10 distribution as part of the
calculation of Gallagher’s average weekly wage pursuant to 33
U.S.C. § 902(13). Section 902(13) provides as follows:
The term “wages” means the money rate at
which the service rendered by an employee is
compensated by an employer under the contract
of hiring in force at the time of the injury,
including the reasonable value of any
advantage which is received from the employer
and included for purposes of any withholding
of tax under subtitle C of the Internal
Revenue Code of 1954 . . . . The term wages
does not include fringe benefits, including
(but not limited to) employer payments for or
contributions to a retirement, pension, health
and welfare, life insurance, training, social
security or other employee or dependent
benefit plan for the employee’s or dependent’s
benefit, or any other employee’s dependent
entitlement.
As the employer acknowledges, the Fourth Circuit has held that
CRB payments are wages under § 902(13) if earned through work but
not if earned by disability credit. Universal Maritime Service
Corp. v. Wright, 155 F.3d 311 (4th Cir. 1998).11 Our research
10
The container royalty trust fund was established to pay
longshoremen for work that historically had been done by them.
Payments from that fund are called CRB’s. More specifically, such
payments are compensation paid by shipping companies in lieu of
work lost by longshoremen due to the technological innovation of
“containerized cargo.” Universal Maritime Corp. v. Wright, 155
F.3d 311, 315-16 (4th Cir. 1998). A CRB distribution is paid
annually and based on the employee’s seniority and hours worked
that year.
11
Cf. NYSA-ILA Container Royalty Fund v. Commissioner of
Internal Revenue Service, 847 F.2d 50, 52-53 (2nd Cir. 1988)
(holding that payments to longshoreman from a containerization fund
were wages within the meaning of FICA and FUTA); STA of Baltimore--
ILA Container Royalty Fund v. U.S., 621 F.Supp. 1567 (D.Md. 1985)
8
indicates that this Court has yet to address this issue; however,
we recently had the occasion to interpret the meaning of “wages”
under § 902(13) in a different context. See H.B. Zachry Company v.
Quinones, 206 F.3d 474 (5th Cir. 2000). In Quinones, the question
was whether the value of meals and lodging which was exempt from
withholding of federal income tax constituted “wages” under §
902(13) of the LHWCA. We rejected the argument that “any
advantage” received from the employer is included as wages because
that would render the phrase “and included for purposes of any
withholding of tax” superfluous. We concluded that § 902(13) was
clear on its face inasmuch as “[i]t provides that `wages’ equals
monetary compensation plus taxable advantages.” Therefore, we held
that § 902(13) excluded from its definition of “wages” the value of
tax-exempt meals and lodging. Id. at 479. The rule we glean from
Quinones to apply here is that for a CRB to constitute a wage, it
must be considered either monetary compensation or a taxable
advantage. Ultimately, we conclude that a CRB is a wage.
The employer argues that a CRB is a fringe benefit and thus
does not constitute a wage under § 902(13). As set forth in the
statute itself, the term “wages” does not include fringe benefits,
including (but not limited to) employer payments for or
(holding that CRB distributions are wages under 26 U.S.C. § 3121,
which defines wages as all remuneration for any service, because a
longshoreman is not eligible for the payments until he had worked
the requisite number of hours), aff’d, 804 F.2d 296 (4th Cir.
1986).
9
contributions to a retirement, pension, health and welfare, life
insurance, training, social security or other employee or dependent
benefit plan for the employee's or dependent's benefit, or any
other employee's dependent entitlement. § 902(13). In Universal,
the Fourth Circuit determined that the “bare language” of the
statute was ambiguous as to where “wages” end and “fringe benefits”
begin:
If we were to read “fringe benefits” to mean all benefits
given to an employee in addition to regular monetary pay,
“wages” would necessarily be defined to exclude all
nonmonetary compensation. This would make Congress’s use
of the phrase “reasonable value of any advantage”
meaningless.
155 F.3d at 320. The Fourth Circuit then addressed the legislative
history and concluded that “wages” include “any advantage” that is
not “too speculative to be readily converted into a cash
equivalent.” Id. at 321.
The Court noted that by 1981, the BRB had consistently
interpreted “wages” as including “advantages” when the advantage’s
value to the employee was readily identifiable and calculable. Id.
Congress was aware of this broad interpretation of “advantages”
when it introduced bills to amend Section 902(13) in 1981. Instead
of narrowing the definition of advantages, Congress broadened the
illustration of “advantages” encompassed by the statutory
definition by including “any advantage” received from an employer
which requires employment tax withholding. Id. at 322. Before
the bill could pass both the House and the Senate, the Supreme
10
Court addressed the meaning of the language of the original §
902(13), which defined wages as including the “value of board,
rent, housing, lodging, or similar advantage received from the
employer.” Morrison-Knudsen Construction Co. v. Director, OWCP,
461 U.S. 624 (1983). The Supreme Court concluded that as benefits
received from pensions or health and welfare plans are not “similar
advantages” to board and rent, in that they are not “benefits with
a present value that can be readily converted into a cash
equivalent on the basis of their market values.” Id. at 630. In
so concluding, the Supreme Court reaffirmed the settled rule that
benefits which are too speculative to be readily converted into a
cash equivalent are excluded from the Act’s definition of wages.
After Morrison-Knudsen was decided, Congress passed the afore-
mentioned bills without significant change to the definition of
“wages.” As the Fourth Circuit recognized, Congress likewise was
reaffirming the settled rule that while “wages” can include more
than regular monetary pay, “fringe benefits” refers only to a class
of fringe benefits whose value is too speculative to be readily
converted into a cash equivalent. Id. at 324. In conclusion, the
Fourth Circuit interpreted § 902(13) as defining “wages” as
compensation paid by an employer for services rendered by an
employee, the value of which may be readily converted into a cash
equivalent. Finding the Fourth Circuit’s thoughtful analysis
persuasive, we adopt their definitions of “wages” and “fringe
11
benefits.” Accordingly, as a CRB is paid in dollars and cents,
and, thus, its value is apparent on its face, a CRB is not a fringe
benefit under § 902(13).
Nevertheless, the employer argues that a CRB is not a wage
because it is a payment for services not rendered. Moreover,
argues the employer, the Port of Corpus Christi, where Gallagher
worked as a longshoreman, “has very little, if any, container
traffic.” Because Gallagher has not lost work as a result of
containerization, he receives a windfall in the form of a CRB
distribution check annually. The employer contends that this was
not the original purpose of the trust fund.
Of course, the precise issue before us is not whether the
original purpose of the container royalty trust fund has been
thwarted, but, rather, whether a CRB falls within the definition of
wages under § 902(13). The employer in the Fourth Circuit case
raised a similar contention, i.e., that the CRB payments must
reflect a fixed rate of pay in order for them to be compensation
for services. 155 F.3d at 325. There, the Court recognized that
the local contract specified that the container royalty fund was to
be used only for cash disbursements to longshoremen and that
traditionally the trustees had paid royalties to those who worked
700 or more hours in the contract year. Id. at 325. Relying on
the hours-worked requirement, the court reasoned that “[i]f these
payments are paid for services, regardless of the quantity of
12
services, they meet the first requirement.” Id.
Similarly, in the instant case, the agreement that created the
royalty trust fund provides that it was created to receive
contributions from employers and to administer, accumulate and/or
distribute such contributions in accordance with specific
provisions. The trust agreement further specifies that an employee
must work a certain number of hours per year to receive such
payments. Thus, Gallagher had to work a certain number of hours to
be eligible to receive the CRB payments. In other words, pursuant
to the terms of the contract, Gallagher was paid for his services.12
To reiterate, § 902(13) defines wages, in part, as “the money
rate at which the service rendered by an employee is compensated by
an employer under the contract of hiring in force at the time of
the injury, including the reasonable value of any advantage which
is received from the employer and included for purposes of any
withholding of tax . . . .” Here, the employer13 paid Gallagher a
CRB pursuant to the contract of hiring at the time of his injury.
12
At oral argument, the employer stated that there are
exceptions to the hours-worked requirement, such as when an
employee is disabled. However, there is no contention that
Gallagher failed to work the amount of hours needed for the
relevant year(s). We therefore do not express our opinion with
respect to whether a CRB payment would constitute a wage if the
employee had not earned the payment from actual work.
13
Although the trustees of the royalty fund actually
distribute the payments, the employers endow the royalty trust
fund, and, thus, the employers are the source of the CRB payments.
See Universal Maritime Service Corporation, 155 F.3d at 326
(explaining that “the true source of the payment is the employer”).
13
Thus, we are persuaded that the ALJ properly included a CRB as a
wage in the calculation of Gallagher’s average weekly wage.
C. Calculation of Average Wage under 33 U.S.C. §910
The ALJ calculated Gallagher’s average weekly wage pursuant to
§ 910(c), which provides that average annual earnings shall be
determined with “regard to the previous earnings of the injured
employee in the employment in which he was working at the time of
the injury . . ., [and] shall reasonably represent the annual
earning capacity of the injured employee.” We have recognized that
the main objective of § 910(c) “is to arrive at a sum that
reasonably represents a claimant’s annual earning capacity at the
time of the injury.” Empire United Stevedores v. Gatlin, 936 F.2d
819, 923 (5th Cir. 1991) (citation and internal quotation marks
omitted).
To determine Gallagher’s average weekly wage, the ALJ added
the following amounts from 1994 (the year prior to his injury):
$35,761.66 (gross earnings); $707.56 (vacation pay); and $8,136.85
(CRB distribution). The sum total is $44,606.07. The ALJ then
divided Gallagher’s $44,606.07 by 48 weeks, instead of by 52 weeks.
The employer argues that using the number 48 as a divisor
violated the mandate of § 910(d)(1). Section 910(d)(1) provides
that the “average weekly wages of an employee shall be one fifty-
second part of his average annual earnings.” The ALJ chose the
number 48 as a divisor because Gallagher had allegedly lost 4 weeks
14
of work in 1994 due to a previous injury.
Gallagher responds that, at most, this is harmless error. To
be technically correct, Gallagher asserts, the ALJ could have
divided the above sum total ($44,606.07) by 48 and obtained a
weekly average ($929.29), taken that figure and added four more
weeks’ worth of wages (4 X $929.29 = $3,717.17) to the original sum
total ($3,717.17 + $44,606.07 = $48,323.24), and finally, divided
the revised total by the statutorily mandated divisor of 52
($48,323.24 ÷ 52 = $929.29). Obviously, this calculation results
in the same average weekly wage as the original calculation.
We do not read the employer’s argument as challenging the
factual finding that Gallagher lost four works of week in 1994 due
to a previous injury. In light of the discretion given the ALJ
under § 910(c),14 we believe that the ALJ’s decision to carve out
the four-week period of lost work facilitated the goal of “mak[ing]
a fair and accurate assessment” of the amount that Gallagher “would
have the potential and opportunity of earning absent the injury.”
Gatlin, 936 F.2d at 823. As such, we are persuaded by Gallagher’s
argument that the apparent violation of § 910(d)(1) was harmless.
D. Attorney’s Fees
1. 33 U.S.C. § 928(b)
“An award of attorney's fees by the BRB is reversed only if it
is arbitrary, capricious, an abuse of discretion, or not in
14
Gatlin, 936 F.2d at 823.
15
accordance with law.” H.B. Zachry Co. v. Jose B. Quinones, 206
F.3d 474, 481 (5th Cir. 2000). Section 928(b) prescribes when
attorney’s fees may be awarded in the context of an employee’s
successful prosecution for additional compensation.15 The employer
argues that the ALJ erred in awarding attorney’s fees because the
15
Section 928(b) provides that:
If the employer or carrier pays or tenders
payment of compensation without an award
pursuant to section 914(a) and (b) of this
title, and thereafter a controversy develops
over the amount of additional compensation, if
any, to which the employee may be entitled,
the deputy commissioner or Board shall set the
matter for an informal conference and
following such conference the deputy
commissioner or Board shall recommend in
writing a disposition of the controversy. If
the employer or carrier refuse to accept such
written recommendation, within fourteen days
after its receipt by them, they shall pay or
tender to the employee in writing the
additional compensation, if any, to which they
believe the employee is entitled. If the
employee refuses to accept such payment or
tender of compensation, and thereafter
utilizes the services of an attorney at law,
and if the compensation thereafter 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 in
addition to the amount of compensation. . . .
If the claimant is successful in review
proceedings before the Board or court in any
such case an award may be made in favor of the
claimant and against the employer or carrier
for a reasonable attorney’s fee for claimant’s
counsel in accord with the above provisions.
In all other cases any claim for legal
services shall not be assessed against the
employer or carrier.
16
prerequisites outlined in 33 U.S.C. § 928(b) were not satisfied.
Section 928(b) of the “LHWCA provides for an award of attorney’s
fees when the employer tenders partial compensation but refuses to
pay the total amount claimed by the claimant, and the claimant uses
the services of an attorney to successfully recover the total
amount claimed.” Boland Marine & Manufacturing Co. v. Rihner, 41
F.3d 997, 1006 (5th Cir. 1995) (citation and internal quotation
marks omitted). We have recognized that an award of attorney’s
fees under § 928(b) “is appropriate only if the dispute has been
the subject of an informal conference with the Department of
Labor.” FMC Corporation v. Perez, 128 F.3d 908, 910 (5th Cir.
1997). More specifically, an employee may be awarded attorney’s
fees under § 928(b) “if, after an informal conference the employer
rejects the recommendations of the Board 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.” Id. at 909-911.
The employer concedes, as it must, that there was an informal
conference but contends that the conference was not held with
respect to the issues that were ultimately tried before the ALJ.
During the administrative proceedings, the employer and Gallagher
jointly stipulated that an informal conference was held on December
6, 1996. The employer’s unsupported assertion does not overcome
17
the force of the joint stipulation with its implicit yet obvious
implication that the informal conference involved one or more of
the disputed issues before the ALJ. Moreover, the employer further
concedes that the following issues were discussed during the
informal conference but not resolved: “average weekly wage,
temporary total disability, and medical management.”16 Of course,
Gallagher’s average weekly wage was one of the disputed issues at
the hearing before the ALJ.
Additionally, the employer acknowledges that there was a
recommendation issued after the informal conference. The employer
asserts, however, that the recommendation, which was complied with,
was for the employer to reinstate temporary total disability
benefits. Thus, the employer contends, there was no rejection as
required under section 928(b). Although the record indicates that
16
The only reference we found with respect to the subject
matter of the informal conference was made during the hearing
before the ALJ. The employer’s attorney on the record stated that
the “topic of that informal conference . . . was the exam that the
[Department of Labor] had ordered from Dr. Christensen.” The ALJ
then stated on the record as follows:
Just so the record understands what we’re
talking about, the district director had
ordered an IME a couple of weeks before this
hearing here today and the claimant felt like
he didn’t have to go and he did not go and
there was a dispute about it. But now that
dispute has been resolved by agreement among
the counsel that he’s going to have an
[examination] post hearing here in Corpus
Christi.
18
the employer did, in fact, reinstate the payment of temporary total
disability benefits, the employer offers no record evidence with
respect to the substance of the recommendation.17 In any event,
the record does establish that at least the following unresolved
issues remained after the informal conference: (1) Gallagher’s
average weekly wage rate; and (2) Gallagher’s entitlement to
temporary partial disability benefits from February 21, 1995, to
June 26, 1995, and from August 27, 1996, to February 14, 1997.
After presiding over a hearing on these issues, the ALJ ordered the
employer to, among other things, pay Gallagher temporary partial
disability benefits for the periods in dispute. In other words,
after an informal conference and a recommendation, Gallagher used
the services of an attorney to successfully recover an award of
additional compensation. Under these particular circumstances, we
find that the employer has failed to demonstrate that the ALJ erred
in finding the conditions of § 928(b) satisfied.18 Accordingly, we
17
There was a LS-206 form filed indicating that the employer
reinstated the total temporary disability payments but we have
found no indication that it was pursuant to a recommendation after
the informal conference. The conference was held on December 6,
1996, and the LS-206 form is dated April 21, 1997.
18
Although acknowledging that an initial reading of the
language of § 928(b) supports the proposition that a written
recommendation is required and that such recommendation be refused
before an employer or carrier may be liable for attorney’s fees, we
note that the Ninth Circuit has indicated otherwise. See National
Steel & Shipbuilding Co. v. United States Dept. of Labor, 606 F.2d
875, 882 (9th Cir. 1979) (explaining that a claimant is entitled to
attorney’s fees if the extent of liability is controverted and the
claimant successfully obtains additional compensation regardless
whether the employer rejects the administrative recommendation);
19
conclude that the employer has not shown that the awarding of
attorney’s fees constituted an abuse of discretion or was not in
accordance with the law.
2. Reasonableness
The employer further asserts that the ALJ’s determination of
the attorney’s hours, fee rate, and expenses used in calculating
the award were unreasonable. In support of this assertion, the
employer refers us to previously filed briefs, presumably before
the ALJ and BRB. By failing to include these arguments in the body
of their brief, the employer, in effect, has abandoned them. Yohey
v. Collins, 985 F.2d 222, 224-225 (5th Cir. 1993); see also Fed. R.
App. P. 28(a)(9) (requiring the argument section of the appellant’s
brief to contain “contentions and the reasons for them, with
citations to the authorities and parts of the record . . . .”).19
E. Penalties
The employer’s final argument is that the ALJ clearly erred in
finding that it was liable for penalties under 33 U.S.C. § 914.
Matulic v. Director, Office of Workers Compensation Programs, 154
F.3d 1052, 1061 (9th Cir. 1998) (same). In the instant case, we
express no opinion as to whether we agree with the Ninth Circuit’s
interpretation of the requirements of § 928(b) inasmuch as the
employer has failed to offer (and we to find) any record evidence
supporting their allegations regarding the substance of the
recommendation.
19
The employer further contends that the ALJ erred in denying
its motion to produce or preserve evidence with respect to
Gallagher’s attorney’s billing and time records. Because the
employer has abandoned the argument regarding the reasonableness of
the attorney’s fees award, we need not reach this contention.
20
Section 914(e)20 provides that when an installment of compensation
is not paid within 14 days of when it is due, a 10 percent penalty
will be added unless an employer files a notice that it controverts
the employee’s right to compensation pursuant to the terms of
section 914(d).21 Section 914(d) provides that:
If the employer controverts the right to
compensation he shall file with the deputy
commissioner on or before the fourteenth day
after he has knowledge of the alleged injury
or death, a notice, in accordance with a form
prescribed by the Secretary, stating that the
right to compensation is controverted, the
name of the claimant, the name of the
employer, the date of the alleged injury or
death, and the grounds upon which the right to
compensation is controverted.
In his decision and order, the ALJ expressly recognized that
the parties had stipulated that the employer filed a “notice of
controversion” on August 22, 1995. The employer now argues that
20
Section 914(e) states:
If any installment of compensation payable
without an award is not paid within fourteen
days after it becomes due, as provided in
subdivision (b) of this section, there shall
be added to such unpaid installment an amount
equal to 10 per centum thereof, which shall be
paid at the same time as, but in addition to,
such installment, unless notice is filed under
subdivision (d) of this section, or unless
such nonpayment is excused by the deputy
commissioner . . . .
21
The employer also argues that the ALJ erred in awarding
“interest under § 914(e).” The ALJ’s order awarded interest under
28 U.S.C. § 1961, the general statute that allows district courts
to award interest on any money judgment in a civil case. The
employer has not shown that the ALJ erred in awarding interest on
the judgment to Gallagher.
21
the ALJ clearly erred when he failed to recognize that the employer
filed an earlier notice of controversion on February 22, 1995.
This argument fails in light of certain stipulations that the
parties made during the proceedings before the ALJ. In a joint
exhibit, the parties stipulated that, among other things, (1) “the
Employer was notified or had knowledge of the injury [on] January
20, 1995;” and a (2) “Notice of Controversion (LS-207) was filed on
August 22, 1995.” Under the stipulated facts, the employer clearly
failed to file a notice that it controverted compensation within 14
days of having notice of Gallagher’s injury, rendering the
imposition of penalties under § 914(e) appropriate. The employer
does not argue that the ALJ’s conclusion is wrong based on the
stipulated facts--but rather argues that the ALJ either
“disregarded” or “overlooked” the evidence. The employer is bound
by its stipulations. See Deffenbaugh-Williams v. Wal-Mart Stores,
Inc., 188 F.3d 278, 281 n.1 (5th Cir. 1999).
The employer nevertheless asserts that the LS-208 form22 it
filed on February 22, 1995 satisfied the notice of controversion
requirement under section 914. In response, Gallagher asserts that
the employer did not raise this particular argument before the BRB.
22
The stipulation, however, was that a LS-207 form was filed.
We note that § 914(d) provides that an employer controverts the
employee’s right to compensation by filing “a notice, in accordance
with a form prescribed by the Secretary . . . .” (emphasis added).
Although it is not clear, it appears that the LS-207 is the form
prescribed by the Secretary for an employer to file notice that it
controverts an employee’s right to compensation.
22
Our review of the record indicates that Gallagher is correct, and
the employer did not file a reply brief informing us otherwise. We
therefore may not consider it. See Ingalls Shipbuiding v.
Director, OWCP, 976 F.2d 934, 938 (5th Cir. 1992) (rejecting
employer’s argument that another form was the equivalent of a
“notice of controversion” because the employer failed to present
that argument in the administrative proceedings). As such, the
employer has failed to show that the ALJ erred in finding it liable
for penalties and interest under § 914.
For the above reasons, the petition for review is DENIED.
23