LINCOLN V. DIRECTOR, OFFICE OF WORKERS’ COMPENSATION PROGRAMS, NO. 13-1594

Decided: March 11, 2014

The Fourth Circuit denied Petitioner’s petition for review of the District Director of the Office of Workers’ Compensation Programs’ decision to deny attorney’s fees under 33 U.S.C. § 928(a).

On May 24, 2011, Steven Lincoln (“Lincoln”) filed a claim with the District Director of the Office of Workers’ Compensation Programs (“OWCP”) for benefits under the Longshore and Harbor Workers’ Compensation Act (“LHWCA”), alleging that he sustained hearing loss in both ears as a result of his work as a longshoreman. Although Lincoln worked for several different companies over the course of his career, he alleged that he was employed by Ceres Marine Terminals, Inc. (“Ceres”) at the time of his injury. Ceres responded to Lincoln’s claim two days later by filing forms with the OWCP, one of which was a notice of controversion. In the notice, Ceres explained that it was controverting Lincoln’s claim because, while it accepted the fact that his hearing loss was noise-induced, additional information was needed before Ceres could determine the correct disability payment. The OWCP formally served Ceres with notice of Lincoln’s claim on June 14, 2011. Subsequently, on July 7, Ceres paid Lincoln $1,256.84, the equivalent of one week of permanent partial disability pay under the maximum compensation rate. Thereafter, the parties agreed to a settlement compensation order entered by the District Director of the OWCP on October 4. The settlement awarded benefits to Lincoln totaling $23,879.96 in compensation and $4,000 in medical benefits. Ceres did not pay any money to Lincoln between the July 7 disability payment and the October 4 settlement.

Lincoln, thereafter, filed a petition with the OWCP requesting that the Director award him $3,460 in attorney’s fees under Section 928(a) of the LHWCA, which shifts fees from a successful claimant to the employer when the employer declines to pay any compensation on or before the thirtieth day after receiving written notice of a claim. The Director denied the petition, ruling that Ceres was not liable for Lincoln’s attorney’s fees. Lincoln then appealed to the Benefits Review Board (“BRB”), which found that the Director acted within his discretion in denying Lincoln’s petition. This appeal followed.

On appeal to the Fourth Circuit, Lincoln contended that the Director erred in denying his fee petition for three independent reasons: (1) Cere’s July 7 payment was only a partial payment and thus not “any compensation”; (2) the payment did not technically constitute “compensation” for the purposes of Section 928; and (3) Ceres’s notice of controversion automatically triggered fee shifting. The Fourth Circuit quickly addressed these arguments in turn. Addressing Lincoln’s first contention, the court held that the term “any compensation” is unambiguous and plainly encompasses an employer’s partial payment of compensation. As explained by the court, Section 928 provides employers a safe harbor: if it admits liability for the claim by paying some compensation to the claimant and only contests the total amount of the benefits, it is sheltered from fee liability under Section 928(a). Thus, because Ceres provided partial payment within thirty days, Ceres was entitled to the safe harbor provided by Section 928(a).

Next, the court rejected Lincoln’s argument that Ceres’s July 7 payment was not “compensation” in any true sense under Section 928(a) because it was merely an attempt to avoid fee liability. In doing so, the court distinguished the facts in the record from the facts of a case where the employer paid the claimant $1 within the thirty day window. Here, because Ceres based its calculations of the July 7 payment on Lincoln’s alleged disability, the court held that it qualified as “compensation” within the meaning of Section 928(a). Lastly, the Fourth Circuit rejected Lincoln’s argument that, because Ceres filed a notice of controversion prior to the July 7 payment, it irrevocably triggered Section 928(a). In rejecting this contention, the court found that the only explicit trigger contained in Section 928(a) is the payment of “any compensation” within thirty days of receiving official notice of a claim. Because Ceres met this requirement, it was, therefore, entitled to the safe harbor afforded by Section 928(a). Accordingly, the court denied Lincoln’s petition for review.

Full Opinion

– W. Ryan Nichols

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