Sixth Circuit Weighs in On Circuit Split Re: Employer Fee Liability Under 33 U.S.C. § 928(b)

Per Pittsburgh & Conneaut Dock Co. v. Director, Office of Workers' Comp. Programs, 473 F.3d 253 (6th Cir. Jan. 4, 2007):

33 U.S.C. § 928(b): Subsection (b) sets forth the requirements for fee liability when an employer voluntarily pays some compensation but a dispute arises concerning additional compensation. That provision states that the following circumstances must occur in order for an employer to be liable for attorney's fees: (1) an informal conference addressing the disputed additional compensation; (2) a subsequent written recommendation suggesting a disposition of the controversy; (3) the employer's rejection of the recommendation; and (4) the claimant's use of an attorney to secure an award of compensation greater than the amount the employer was willing to pay. See § 928(b). Bordeaux claims that all of these elements were met. . . . The BRB acknowledged that in this case there was no written recommendation regarding the disposition of the controversy as required by the plain language of subsection (b). Nevertheless, the BRB went on to claim that "the absence of a written recommendation by the district director following the informal conference ... does not preclude liability." The BRB went on to note that since P & C Dock voluntarily paid compensation and Bordeaux was awarded additional compensation by the ALJ, that was sufficient to make P & C Dock liable for attorney's fees under subsection (b). The Ninth Circuit precedent relied upon by the BRB does support its ruling. See, e.g., Nat'l Steel & Shipbldg. Co. v. U.S. Dep't of Labor, Office of Workers' Comp. Programs, 606 F.2d 875, 882 (9th Cir.1979) However, the BRB did not adequately address the circuit split that exists on this issue. The Fifth Circuit has consistently required that each of the requirements set forth in subsection (b) be met before an employer incurs liability for attorney's fees. Pool Co. v. Cooper, 274 F.3d 173, 186 (5th Cir.2001); Staftex Staffing v. OWCP, 237 F.3d 404, 408-09 (5th Cir.2000); FMC Corp. v. Perez, 128 F.3d 908, 910 (5th Cir.1997). Two days after the BRB issued its ruling, the Fourth Circuit weighed in on this issue, agreeing with the Fifth Circuit. Virginia Int'l Terminals, Inc. v. Edwards, 398 F.3d 313, 318 (4th Cir.2005). Whether the lack of a written recommendation (or any recommendation at all) for the disposition of the controversy precludes fee liability under subsection (b) is an issue of first impression in this circuit.

The Ninth Circuit has routinely held employers liable for attorney's fees under subsection (b) even when the literal terms of the statute have not been met. This approach is based on the assessment that "[t]he purpose of the statute is to authorize the assessment of legal fees against employers in cases where the existence or extent of liability is controverted and the employee-claimant succeeds in establishing liability or obtaining increased compensation in formal proceedings in which he or she is represented by counsel." Nat'l Steel, 606 F.2d at 882. Therefore, fee liability is imposed where these general circumstances are present even if all of the specific events listed in subsection (b) have not occurred. Fee liability has been imposed where there was a recommendation after an informal conference was held, but the recommendation was not in writing. Id. The Ninth Circuit has also assessed attorney's fees under subsection (b) where there was a written recommendation, but no informal conference had been held. Matulic v. OWCP, 154 F.3d 1052, 1060 (9th Cir.1998); see also Caine v. Washington Metro. Area Transit Auth., 19 BRBS 180 (1986).

The Fourth and Fifth Circuits have rejected the approach taken by the Ninth Circuit and have strictly enforced the specific terms of subsection (b). They have emphasized that the requirements set forth in the plain language of the statute must be met. Therefore, the lack of an informal conference and the lack of a written recommendation have been held to preclude the assessment of attorney's fees under subsection (b). Edwards, 398 F.3d at 318 ("The failure to hold an informal conference or issue a written recommendation is fatal to a claim for attorney's fees under the plain terms of section 928(b)."); Pool Co., 274 F.3d at 186 (holding that where no informal conference took place "that fact poses an absolute bar to an award of attorney's fees under § 28(b)"); Staftex, 237 F.3d at 408-09; FMC Corp., 128 F.3d at 910.

We adopt the approach taken by the Fourth and Fifth Circuits. "In all cases of statutory construction, the starting point is the language employed by Congress." Appleton v. First Nat'l Bank of Ohio, 62 F.3d 791, 801 (6th Cir.1995). "Moreover, where the statute's language is plain, the sole function of the courts is to enforce it according to its terms." Chapman v. Higbee Co., 319 F.3d 825, 829 (6th Cir.2003) (en banc) (quoting United States v. Ron Pair Enterprises, 489 U.S. 235, 241, 109 S.Ct. 1026, 103 L.Ed.2d 290(1989)). The language of subsection (b) plainly states that in order for fees to be assessed under its terms there must be a written recommendation containing a suggested disposition of the controversy.


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