REVISED, July 25, 2000
UNITED STATES COURT OF APPEALS
For the Fifth Circuit
___________________________
No. 99-60587
___________________________
STAFTEX STAFFING and HOUSTON GENERAL INSURANCE
COMPANY
Petitioners,
VERSUS
DIRECTOR, OFFICE OF WORKER'S COMPENSATION
PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, and RAMIRO LOREDO
Respondents.
___________________________________________________
Petition for Review of an Order of the
Benefits Review Board
___________________________________________________
July 18, 2000
Before REAVLEY, DAVIS and BARKSDALE, Circuit
Judges.
DAVIS, Circuit Judge:
In this appeal, Petitioner, Staftex Staffing,
challenges an order of the United States Department of Labor Benefits Review
Board, which affirmed an Administrative Law Judge's ("ALJ") order awarding
attorney's fees and compensation payments to Claimant, Ramiro Loredo, pursuant
to the Longshore and Harbor Worker's Compensation Act ("LHWCA"), 33 U.S.C.
§§ 901-950. Staftex argues that the ALJ erred in calculating
Claimant's average weekly wage and thereby awarded Claimant an excessive
compensation rate. Staftex also challenges the Board's award of attorney's
fees to Claimant. For the reasons that follow, we affirm the ALJ's wage
calculation and compensation rate but reverse his award of attorney's fees.
I.
Ramiro Loredo injured his back on October
11, 1990, while working as a welder for Staftex Staffing. Within thirty
days of receiving notice of Loredo's injury, Staftex began to pay voluntary
benefits to Loredo based upon an average weekly wage of $438.47. Several
months later, Staftex reduced its payments to Loredo, explaining that it
had previously overcalculated Loredo's wages by $12,934.14. In response,
Loredo filed an "Employee's Claim for Compensation" with the United States
Department of Labor, requesting that Staftex compensate him based upon
an average weekly wage of $490.24. Staftex acceded to this demand without
requiring an informal compensation conference.
Despite Staftex's agreement with Loredo on
the appropriate compensation rate, the parties could not agree as to the
nature, extent, or permanency of Loredo's injury. The parties referred
these disputes to the Department of Labor for an informal conference. The
Department issued a written recommendation on these issues and referred
the case to an ALJ for a formal hearing and resolution. Neither party requested,
either before or during the informal conference, that the Department address
the issue of average weekly wage.
At the formal hearing, however, the parties
agreed that Loredo was temporarily and totally disabled but could not agree
upon the average weekly wage for which Loredo would be compensated. Staftex
contended that it should compensate Loredo based upon his actual earnings
for the five years prior to his injury. Loredo contended that he was entitled
to an average weekly wage based upon his earnings in the year immediately
prior to his injury, excluding the twenty-five weeks during which he was
out of the labor market due to a different on-the-job injury and for which
he was compensated under the LHWCA.
The ALJ accepted Loredo's method of calculating
his average weekly wage and concluded that Loredo was entitled to compensation
based upon a weekly wage of $504.32. Furthermore, the ALJ held that Loredo's
counsel was entitled to $7,239.28 in attorney's fees plus expenses.
Staftex appealed to the United States Department
of Labor's Benefits Review Board, arguing that the ALJ erred both in calculating
Loredo's average weekly wage and in awarding an attorney's fee. The Board
affirmed the judgment of the ALJ and its decision to award attorney's fees.
This appeal followed.
II.
This Court gives "broad discretion to ALJs
in determining appropriate wage awards." Louisiana Ins. Guaranty Assoc.
v. Director, Office of Worker's Compensation Programs, U.S. Dept. of Labor,
211 F.3d 294, 297 (5th Cir. 2000). We review the decisions of
the Benefits Review Board using the same standard that the Board applies
to review a decision of the ALJ: whether the decision is supported by substantial
evidence and is in accordance with law. New Thoughts Finishing Co. v.
Chilton, 118 F.3d 1028, 1030 (5th Cir. 1997). We may neither
substitute our judgment for that of the ALJ nor "reweigh or reappraise
the evidence." SGS Control Serv. v. Director, Office of Worker's Compensations
Programs, US Dept. of Labor, 86 F.3d 438, 440 (5th Cir.
1996). The ALJ's decision need not "constitute the sole inference that
can be drawn from the facts." Avondale Industries v. Director, Office
of Worker's Compensations Programs, U.S. Dept. of Labor, 977 F.2d 186,
189 (5th Cir. 1992). Moreover, we must resolve all doubts "in
favor of the employee in accordance with the remedial purposes of the LHWCA."
Empire
United Stevedores v. Gatlin, 936 F.2d 819, 822 (5th Cir.
1991).
Both parties agree that 33 U.S.C. § 910(c)
provides the basic formula for determining the compensation to which Loredo
is entitled. Section 910(c), in relevant part, states that:
average annual earnings shall be such sum
as, having regard to the previous earnings of the injured employee in the
employment in which he was working at the time of the injury, and of other
employees in the same or most similar class working in the same or most
similar employment in the same or neighboring locality, or other employment
of such employee . . ., shall reasonably represent the annual earning capacity
of the injured employee.
33 U.S.C. § 910(c) (1999). Once a court
has determined the claimant's average annual wage, it must determine the
average weekly wage by dividing the average annual wage by fifty-two. 33
U.S.C. § 910(d)(1). The average weekly wage provides the basis for
the compensation rate. See 33 U.S.C. § 908.
In this case, the ALJ calculated Claimant's
compensation solely by considering his earnings in the year immediately
prior to his injury. The undisputed evidence established that Loredo earned
$13,616.53 in the year preceding his back injury. The evidence further
established that Loredo worked during only 27 weeks of that year due to
a knee injury for which he was compensated under the LHWCA. On this basis,
the ALJ concluded that section 910(c) entitled Loredo to compensation based
upon a weekly wage of $504.32 -- $13,616.53 divided by 27.
Staftex argues that the one-year period considered
by the ALJ misrepresented Claimant's earning capacity and that the ALJ
should have looked instead to a five year period preceding the injury.
Staftex notes that during the five years preceding Loredo's back injury
he never made more than $9896.56 in a single calendar year(1)
and that Loredo's average yearly earnings during that period amounted to
only $5617. Finally, Staftex explains that because it is a temporary staffing
company the duration of Loredo's employment is uncertain.
Based upon our review of the record, we conclude
that the ALJ acted well within his discretion in estimating Claimant's
average weekly wage. First, no case law supports Staftex's contention that
an ALJ cannot rely exclusively on the most recent year of employment. While
we have held that an ALJ should not randomly pick and choose certain years
from a period simply because the judge believes that the other years in
that period under-represented the claimant's earning capacity, seeChilton,
118 F.3d at 1031, we have never held that a court cannot base its calculation
on the claimant's most recent year of employment. In
Chilton, we
simply reaffirmed that if "the ALJ looks beyond the 52 weeks immediately
preceding the injury, 'he must take into account the earnings of all the
years within that period.'" Id., (quoting
Gatlin, 936 F.2d
at 823); accord Meehan Seaway Service Co. v. Director, Office
of Workers' Compensation Programs, U.S. Dept. of Labor, 125 F.3d 1163,
1170(8th Cir. 1997)(explaining that an ALJ may "calculate average
annual earnings under section 910(c) based on a claimant's earning pattern
over a period of years . . . where . . . all of the years within that period
are taken into account"). Indeed, "the prime objective of section 910(c)
is to arrive at a sum that reasonably represents a claimant's annual earning
capacity
at the time of the injury." SGS Control Serv., 86
F.3d at 441 (emphasis in original)(citations omitted). And as we explained
in
Hall v. Consolidated Employment Systems, 139 F.3d 1025 (5th
Cir. 1998), "[t]ypically, a claimant's wages at the time of injury will
best reflect the claimant's earning capacity at that time. It will be an
exceedingly rare case where the claimant's earnings at the time of injury
are wholly disregarded as irrelevant, unhelpful, or unreliable." Id.
at 1031.
Second, Staftex has failed to present any
evidence that Loredo's most recent year of employment does not accurately
reflect his current earning capacity. In calculating average weekly wage,
the ALJ must consider not simply the future of a claimant's employment
with a particular employer, but rather the future of his employment in
his chosen field. Hall, 139 F.3d at 1030. In this respect, the record
supports the ALJ's conclusion that the most recent year most accurately
reflected Loredo's current earning capacity.(2)
Staftex further argues that the district court
erred in giving Loredo credit for twenty-five weeks during which, due to
another on-the-job injury, Loredo did not work. Staftex argues that by
dividing Loredo's earnings by twenty-seven, which the district court did
to account for Loredo's twenty-five weeks on disability, the ALJ violated
33 U.S.C. § 910(d). This argument is without merit.
Although section 910(d) states that the ALJ
should divide annual earnings by fifty-two, the Board has frequently held
that, when calculating annual earnings, an ALJ may account for time lost
due to a claimant's job-related injury. See, e.g., Brien v. Precision
Valve, 23 BRBS 209 (1990); see also Hawthorne v. Director,
Office of Worker's Compensation Programs, U.S. Dept of Labor, 844 F.2d
318, 320 (8th Cir. 1988)(holding that ALJs should account for
time lost due to a strike or an injury caused by a strike). Thus, although
the ALJ should have increased its estimation of Loredo's annual wage, rather
than increased his weekly wage, in order to account for his knee injury,
this error was harmless. Either approach yields the same mathematical result.
As such, the Board did not err in affirming the wage calculations of the
ALJ.
III.
Staftex argues that 33 U.S.C. § 928(b),
which exclusively governs the award of attorney's fees in LHWCA cases,
did not authorize the ALJ to award attorney's fees in this case. According
to Staftex, section 928(b) authorizes the award of attorney's fees only
where the employer refuses to accept a written recommendation of compensation
that the Department of Labor issues following an informal conference. As
Staftex notes, although the parties brought other elements of their dispute
before an informal conference, they never submitted their wage dispute
to the conference and thus never received a written recommendation.
Section 928(b), in relevant part, provides
that:
If the employer or carrier pays or tenders
payment of compensation without an award . . . 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 the 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
. . . they shall pay or tender to the employee in writing the additional
compensation, if any, 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 a 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 fees 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.
33 U.S.C. § 928(b)(1999).
The plain wording of this section precludes
Loredo from obtaining attorney's fees in this case. Section 928(b) permits
claimants to obtain attorney's fees only where: (1) the board has held
an informal conference on the disputed issue; (2) the board issues a written
recommendation on that issue; and (3) the employer refuses to accept the
recommendation. Loredo failed to submit the average weekly wage dispute
to informal conference and thus did not obtain a recommendation for Staftex
to accept or reject.(3) As we explained
in FMC Corp. v. Perez, 128 F.3d 908, 910 (5th Cir. 1997),
"[a]n award of attorney's fees under section 928(b) is appropriate only
if the dispute has been the subject of an informal conference with the
Department of Labor." Accord Todd Shipyards Corp. v. Director,
Office of Worker's Compensation Programs, 950 F.2d 607,610 (9th
Cir. 1991)("Section 928(b) authorizes a payment of attorney's fees only
if the employer refuses to pay the amount of compensation recommended by
the claims examiner following an informal conference."). Because Loredo
failed to submit the question of average weekly wages to informal conference,
the ALJ could not, as a matter of law, award him attorney's fees. Accordingly,
we reverse the Board's award of attorney's fees.
IV.
For the reasons stated above, the Benefits
Review Board's affirmance of the ALJ's award of compensation under section
910(c) of the LHWCA is AFFIRMED and the ALJ's award of attorney's fees
under section 928(b) of the Act is REVERSED.
AFFIRMED in Part.
REVERSED in Part.
1. Although Loredo earned
$13,616.53 in the fifty-two-week period leading up to his injury, he never
made that much in any single calendar year.
2. Loredo presented evidence
to the ALJ suggesting that his current employment with Staftex was likely
to be more permanent than his past employment. Both he and his wife testified
that, but for the injury, Mr. Loredo would have continued his work as a
marine welder. Loredo explained that his previous low wages resulted from
a downturn in the ship-building industry, which forced him to find work
in other, less lucrative, fields. The ALJ was entitled to credit this testimony.
3. Apparently, the dispute
regarding Loredo's average weekly wage did not develop until after the
Board had completed its informal conference. Loredo does not allege that
Staftex waited to challenge Loredo's average weekly wage until after the
conference in a strategic attempt to avoid liability for attorney's fees
or that he attempted, without success, to obtain another conference after
the dispute arose.
Revised March 26, 2001
UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 99-60587
STAFTEX STAFFING AND HOUSTON
GENERAL INSURANCE COMPANY,
Petitioners,
VERSUS
DIRECTOR, OFFICE OF WORKERS' COMPENSATION
PROGRAMS, UNITED STATES DEPARTMENT
OF LABOR AND RAMIRO LOREDO,
Respondents.
Petition For Review of an Order
of the Benefits Review Board
November 1, 2000
ON PETITION FOR REHEARING
(Opinion November 1, 2000, 5th
Cir. 2000, ____F.3d____)
Before REAVLEY, DAVIS and BARKSDALE, Circuit
Judges.
PER CURIAM:
Claimant, Ramiro Loredo, seeks rehearing of
our order reversing the Benefits Review Board's (BRB) affirmance of an
award of attorney's fees to his counsel. Loredo argues that our opinion
is in conflict with an opinion of this court, James J. Flanagan Stevedores,
Inc. v. Gallagher, 219 F.3d 426 (5th Cir. 2000), which was filed just
days before the opinion in our case. Gallagher was decided under
a unique set of facts that we do not find helpful in this case. However,
on reconsideration and reexamination of the record, we conclude that the
ALJ did not err in granting attorney's fees to Loredo's counsel.
Loredo's employer voluntarily paid Loredo
compensation based on a $490.24 average weekly wage. The employee was satisfied
with his compensation rate and had no reason to raise it as an issue at
the informal conference. The claims examiner, following the informal conference,
recommended that the "parties agree to an order awarding permanent and
total disability benefits effective July 5, 1995 and continuing, subject
to annual adjustment." The rate of compensation which was to "continue"
is an essential part of the recommendation and the recommendation specifically
referenced both the average weekly wage of $490.24 and the compensation
rate of $326.83. The employer did not timely accept the recommendation
of the claims examiner, agreed with Loredo's statement of the issues to
be resolved at the formal hearing and raised no new issues until shortly
before the formal hearing was scheduled. At that time the employer agreed
to the total permanent disability aspect of the recommendation, but contended
for the first time that the average weekly wage was $108.02.
When the recommendation is viewed in this
light, it is clear to us that the employer did not accept the recommendation
of the Department of Labor. The claimant used the services of an attorney
to aid him in the resolution of the controversy over the payment of his
compensation and the formal hearing resulted in a larger award of compensation.
The BRB was therefore entitled to conclude that § 928(b) was satisfied
in awarding attorney's fees to Mr. Loredo.
We therefore grant panel rehearing on our
previous order reversing the Benefits Review Board's award of attorney's
fees and now affirm the BRB's award. In all other respects, we deny the
petition for rehearing.(1)
No member of the panel nor judge in regular
active service of the court having requested that the court be polled on
Rehearing En Banc (Fed. R. App. P. and 5th Cir. R. 35), the Petition for
Rehearing En Banc is DENIED.
1. We also withdraw from
the original opinion the following sentence: "Moreover, we must resolve
all doubts 'in favor of the employee in accordance with the remedial purposes
of the LHWCA.' Empire United Stevedores v. Gatlin, 936 F.2d 819
(5th Cir. 1991)." and any reference to the "true doubt" rule which was
rejected in
Director, OWCP v. Greenwich Collieries, 512 U.S. 267
(1994). |