Eastern Associated Coal Corp. v. DOWCP, No. 11-2038

Decided: July 31, 2013

The Fourth Circuit Court considered a former employer’s challenges to attorneys’ fees and other related fees awarded under the Black Lung Benefits Act (the BLBA), 30 U.S.C § 901 through 945. The court affirmed the attorneys’ fee awards entered in this case and modified the fees awarded for legal assistant services.

In 2005, the claimant filed a claim for benefits under the BLBA against his former employee, Eastern Associated Coal Corporation (Eastern). The claimant, who was a coal miner for seventeen years, had developed a mass on his right lung that required medical treatment. In 2010, the Administrative Law Judge (ALJ) found that the claimant suffered from complicated coal workers’ pneumoconiosis and awarded him benefits under the BLBA. The law firm representing the claimant later filed a petition for attorneys’ fees from work relating to the proceedings before the ALJ. The firm stated the years of experience and the hourly rates of the various attorneys who had worked on the case. Claimant’s counsel stated that few other firms accept new black lung cases and that few black lung claimants are ultimately awarded benefits. Claimant’s counsel also submitted a list of twenty-one prior fee awards issued in black lung cases handled by claimant’s counsel, as well as the hourly rates for attorneys with varying degrees of experience in the South Atlantic and Middle Atlantic regions. In the petition, claimant’s counsel similarly sought fees for work done by certain legal assistants at an hourly rate of $100. However, although counsel stated that $100 per hour was the firm’s “customary billing rate,” in black lung cases, they did not provide any information regarding market rates for legal assistants, as they did for attorneys’ fees.  Eastern raised two challenges to the fee awards: (1) that claimant’s counsel did not provide sufficient market-based evidence of an hourly rate, which was necessary for calculation of an applicable lodestar figure; and (2) that claimant’s counsel requested an excessive number of hours as a result of its practice of quarter-hour billing.

The court noted that an award of attorneys’ fees and related fees under the BLBA will be upheld unless they are “arbitrary, capricious, [or] an abuse of discretion, or contrary to law.” Counsel for a successful black lung claimant is entitled to an award of attorneys’ fees under the BLBA. An award of attorneys’ fees is “mandatory” in such cases. Here, the claimant was successful and the attorney was therefore entitled to reasonable fees. The party seeking attorneys’ fees has the burden of proving reasonableness. The “lodestar” analysis is the starting point for calculating an award of reasonable attorneys’ fees, determined by multiplying “a reasonable hourly rate” by “the number of hours reasonably expended on the litigation.” After the lodestar amount is calculated, however, the court may adjust that figure based on consideration of other factors provided by the Department of Labor for black lung benefits cases. The BLBA also allows for legal assistant fees, which claimant’s counsel also has the burden of proving. The regulations provide that the rate awarded by the BRB for such services “shall be based on what is reasonable and customary in the area where the services were rendered for a person of that particular professional status.”

The court then addressed Eastern’s challenge to the first element of the lodestar amount, the reasonableness of the hourly rates. The court concluded that the agency adjudicators properly determined reasonable hourly rates for claimant’s counsel. Although Eastern challenged the reliability of prior fee awards as evidence of a prevailing market rate, the court’s precedent plainly permits consideration of such documentation. Although prior fee awards do not themselves actually set the market rate, they do provide inferential evidence of the prevailing market rate. However, the court also concluded that the agency adjudicators abused their discretion by determining a prevailing market rate of $100 per hour for the services rendered by the legal assistants. While claimant’s counsel provided evidence of the legal assistants’ training, education, and experience, counsel did not submit any evidence to support a prevailing market rate for the work of those legal assistance, nor the hourly rates that were awarded to legal assistants in those prior cases. Because the court was left only with the evidence of an hourly rate of $50 provided by Eastern, it reduced the hourly rate for the legal assistants from $100 to $50 per hour. The court then addressed Eastern’s challenge to the second element of the lodestar amount, the number of hours reasonably expended. The court found that Eastern failed to cite any contrary authority prohibiting the use of quarter-hour billing in black lung cases. However, the use of quarter-hour billing does not relieve agency adjudicators of their obligation under the lodestar method to ensure that “excessive, redundant, or otherwise unnecessary” fees are not awarded. Even so, the court found that Eastern’s argument that the present fee awards were excessive lacked merit because, essentially, it was grounded on Eastern’s blanket objection that “there was no proof that it took fifteen minutes to perform each and every task alleged.” Such a requirement improperly would escalate a fee applicant’s present burden to show that the rate claimed and the hours worked were reasonable. Further, it would create a disincentive for attorneys to participate in black lung cases.

Full Opinion

– Sarah Bishop

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