First, apologies for the lack of new content over the past few months. There’s been relatively few precedential decisions issued in black lung claims, and at the same time, my workload in individual black lung claims has been increasing as the Office of Administrative Law Judges tries to reduce its backlog. There have been some unpublished Courts of Appeals decisions, some interesting medical research, and then all of the news out of Australia that I hope to eventually catch up on. But, excuses aside, to the content…
On June 17, 2016, the Department of Labor’s Benefits Review Board issued one of its rare “published” decisions—which are designated so to make clear that they should be given precedential weight—in a dispute regarding attorneys’ fees.
The issue was whether an attorney can seek an additional fee award for time spent defending her fee petition. That is, the attorney was successful on the merits of the black lung claim, filed a petition for attorney’s fees, was opposed by the party responsible for payment, responded to the opposition by defending her fee petition, and was successful—receiving an award for the fees requested in the petition. The attorney then files a request for additional fees for the time spent defending her petition. The request for additional fees is sometimes referred to as “fees on fees.”
The general answer to this question under fee-shifting statutes (including the Longshore Act whose fee-shifting provisions are incorporated into the Black Lung Benefits Act) is that these “fees on fees” are proper. See, e.g., Noxell Corp. v. Firehouse No. 1 Bar-B-Que Rest., 771 F.2d 521, 528 (D.C. Cir. 1985).
Last year, the U.S. Supreme Court raised some doubts about this through its decision in Baker Botts v. ASARCO LLC, 135 S. Ct. 2158 (2015). In Baker Botts, the Supreme Court held under the Bankruptcy Code, an attorney is not entitled to fees for time spent defending their fee petition. The question after Baker Botts was whether this decision was limited to the Bankruptcy Code’s unique context, or whether it affected general fee-shifting statutes as well.
The Board definitively answered this question last month in Clisso v. Elro Coal Co., No. 15-0010 BLA (BRB June 17, 2016) (en banc) (available here). In Clisso, the parties disagreed about $300 that Mrs. Clisso’s attorney sought for defending his fee petition. The employer’s objection was based purely on Baker Botts, an objection that the Board overruled in awarding the requested $300 on September 17, 2015. In response to this award, the attorneys for Elro Coal and Old Republic Insurance requested reconsideration and en banc review, which the Board granted.
In the en banc decision in Clisso, the meat of the Board’s analysis consisted of two paragraphs:
The decision in Baker Botts clearly distinguishes Section 330(a)(1) of the Bankruptcy Code from statutes that explicitly provide for fee-shifting, such as the Longshore Act. Baker Botts, 135 S.Ct. at 2165. Its application to other fee-shifting statutes also has been rejected. Moreover, the limited nature of the Baker Botts holding has been recognized thusly: “Baker Botts is binding only for the proposition that § 330(a)(1) of the Bankruptcy Code does not permit a bankruptcy court to award attorney’s fees for work performed in defending a fee application in court.” Shammas v. Lee, No. 1:12-cv-1462, 2016 WL 2726639 at * 4 (E.D. Va. May 9, 2016).
Based on the foregoing, we hold that Baker Botts is not applicable to Section 28(a) of the Longshore Act because it is a fee-shifting provision that abrogates the American Rule to the extent that the statutory requirements are satisfied, as in this case. Therefore, we reject employer’s contention that Baker Botts precludes its liability for claimant’s counsel’s fee for defending his fee petition.
The Board reached the right conclusion.
First, as the Board explained, Baker Botts itself distinguishes the Bankruptcy Code from fee shifting statutes such as 42 U.S.C. § 1988 (which the Black Lung Benefits Act’s provision is analogous to).
Second, the bankruptcy situation is entirely different, especially when a debtor-in-possession is involved as in Baker Botts. In that situation, the debtor hires the attorney and the fees are paid out of the debtor’s pockets making it very similar to a private attorney-client fee relationship (in which an attorney is unlikely to ask for additional time for defending their invoice, because that would be bad for business). The bankruptcy situation is similar enough to the normal private attorney-client arrangement that it makes sense to say that the default applies and that a debtor shouldn’t have to pay extra because they disagree with their attorney’s request. In the black lung context, the prohibition on private fee arrangements and the requirement of success takes us well beyond the norm. Because the Black Lung Benefits ACt already disrupts the American Rule then, the default should not apply.
Third, in addition to the caselaw, the preamble to the 2001 regs addresses this in a way that should get Seminole Rock/Auer deference. The preamble says:
[20 C.F.R. § 725.366(b)]’s current language does not prohibit an attorney from receiving a fee for time spent litigating the amount of his attorney’s fees . . . . The Benefits Review Board has held that time spent by an attorney defending a fee represents ‘‘necessary work done,’’ so as to entitle the attorney to an additional fee under 20 CFR 802.203(c) (1999), see Workman v. Director, OWCP, 6 Black Lung Rep. (MB) 1–1281, 1–1283 (Ben Rev. Bd. 1984), and the Department believes that §§ 725.366 and 725.367 require the same result. The prohibition in § 725.366 on fees for time spent filling out a fee application presents an entirely different question from whether it is reasonable to require an employer who unsuccessfully challenges that application to pay a fee for the necessary additional time that the attorney was required to spend defending his fee request. . . . [T]he Department believes that the current regulations permit an award of attorneys’ fees
in the latter case . . . .
Regulations Implementing the Federal Coal Mine Health and Safety Act of 1969, as Amended, 65 Fed. Reg. 79, 920, 79,980 (Dec. 20, 2000).
But thanks to the Board’s published decision, in future cases, successful attorneys won’t have to explain all of this, they’ll just need to cite Clisso.