Newport News Shipbuilding v. DOWCP

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

NEWPORT NEWS SHIPBUILDING AND 

DRY DOCK COMPANY,

Petitioner,

v.

 No. 05-2406

DIRECTOR, OFFICE OF WORKERS’

COMPENSATION PROGRAMS; DAVID

HASSELL,

Respondents.



On Petition for Review of an Order of

the Benefits Review Board.

(05-260)

Argued: September 20, 2006

Decided: February 7, 2007

Before WILLIAMS and TRAXLER, Circuit Judges,

and Henry F. FLOYD, United States District Judge for the District

of South Carolina, sitting by designation.

Petition denied by published opinion. Judge Floyd wrote the opinion,

in which Judge Williams and Judge Traxler joined.

COUNSEL

ARGUED: Jonathan Henry Walker, MASON, MASON, WALKER

& HEDRICK, P.C., Newport News, Virginia, for Petitioner. Rita A.

Roppolo, UNITED STATES DEPARTMENT OF LABOR, Office of

2 NEWPORT NEWS SHIPBUILDING v. DOWCP

the Solicitor, Washington, D.C.; Gregory Edward Camden, MONTA-

GNA, KLEIN, CAMDEN, L.L.P., Norfolk, Virginia, for Respon-

dents. ON BRIEF: Charlene Parker Brown, MONTAGNA, KLEIN,

CAMDEN, L.L.P., Norfolk, Virginia, for Respondent David Hassell;

Howard M. Radzely, Solicitor of Labor, Allen H. Feldman, Associate

Solicitor, Mark A. Reinhalter, Counsel for Longshore, UNITED

STATES DEPARTMENT OF LABOR, Office of the Solicitor,

Washington, D.C., for Federal Respondent.

OPINION

FLOYD, District Judge:

Newport News Shipbuilding and Dry Dock Company (Newport

News) petitions this Court for review of a decision and order of the

Benefits Review Board (BRB), which granted attorney’s fees to

David Hassell under the Longshore and Harbor Workers’ Compensa-

tion Act (LHWCA). For the reasons stated below, we deny the peti-

tion for review.

I.

Hassell was injured on April 21, 2002, while working as an

employee of Newport News. Newport News paid temporary total dis-

ability benefits to Hassell for the period from April 22, 2002, to

August 4, 2002. On May 6, 2003, Hassell’s treating orthopedic physi-

cian opined that Hassell had reached his maximum medical improve-

ment and assigned a nineteen percent permanent partial disability

rating. (J.A. at 40.) Hassell’s counsel sent a letter to Newport News

on May 18, 2003, inquiring as to its position concerning the payment

of benefits to Hassell. (J.A. at 39.) In response, on May 27, 2003,

Newport News submitted proposed stipulations to Hassell. (J.A. at

41-43.) Included in the proposed stipulations, at paragraph seven, was

the statement, "That the parties are aware of no other outstanding

compensation issues as of the date of execution of these Stipulations."

(J.A. at 43.) Hassell’s counsel returned the stipulations on June 6,

2003, having deleted the above-referenced statement at paragraph

seven. (J.A. at 47-49.) Newport News responded, stating that it could

NEWPORT NEWS SHIPBUILDING v. DOWCP 3

not endorse the modified stipulations and requesting that Hassell sign

the original stipulations, including the statement at paragraph seven.

(J.A. at 52-54.)

After resubmitting the original stipulations, Newport News filed a

notice of controversion on June 17, 2003, noting as the reason a chal-

lenge to the extent of permanent disability pending a second opinion.

(J.A. at 5.) Thereafter, on June 22, 2003, and June 23, 2003, Hassell’s

counsel wrote to the Department of Labor, requesting an informal

conference on the issue of Hassell’s entitlement to a nineteen percent

permanent partial disability rating. (J.A. at 6-7.) The District Director

responded on June 25, 2003, stating that the position of the Office of

Workers’ Compensation Programs was that 1) Newport News should

begin payments of the rating with which it had no disagreement and

2) Hassell was not required to sign the stipulations as a condition to

receive compensation. (J.A. at 8.) On July 3, 2003, Hassell’s counsel

submitted his LS-18 pre-hearing statement for a rating. (J.A. at 9-10.)

Newport News filed a motion to compel Hassell to disclose what

issues remained on October 24, 2003. (J.A. at 11-15.) The Adminis-

trative Law Judge (ALJ) granted the motion to compel on November

21, 2003. (J.A. at 35.) Hassell responded to the ALJ’s order, stating

that there were no other outstanding issues. (J.A. at 56.) At the sched-

uled formal hearing on January 14, 2004, the parties agreed to the

stipulations without the questionable language, and the ALJ entered

an order based on these stipulations. (J.A. at 61-62.)

Hassell’s counsel subsequently submitted a fee petition to the ALJ.

(J.A. at 68.) Newport News objected to the petition, arguing that it

had tendered compensation under the statute. Additionally, Newport

News challenged specific entries, the hourly rate, and the specificity

of the petition. The ALJ found that Newport News could not avoid

liability for the fees because the "tender" did not demonstrate a will-

ingness to pay compensation. (J.A. at 69-70.) The ALJ, however,

reduced the hourly rate, reduced certain entries and disallowed other

entries. (J.A. at 71.) Thereafter, Newport News appealed and Hassell

cross-appealed the order of the ALJ. (J.A. at 74.) The BRB affirmed

the ALJ’s decision. (J.A. at 74-78.) Newport News now petitions this

Court for review of the BRB’s award of attorney’s fees.

4 NEWPORT NEWS SHIPBUILDING v. DOWCP

II.

We review the BRB’s interpretation of the LHWCA de novo. Poto-

mac Elec. Power Co. v. Dir., OWCP, 449 U.S. 268, 279 n.18 (1980).

The BRB is not a policymaking agency; thus, its interpretation of the

LHWCA is not entitled to any special deference from the Court. Id.

A.

Section 928(b) provides, in relevant part:

If the employer or carrier pays or tenders payment of com-

pensation 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 such conference the deputy com-

missioner or Board shall recommend in writing a disposition

of the controversy. If the employer or carrier refuse to

accept such written recommendation, within fourteen days

after its receipt by them, they shall pay or tender to the

employee in writing the additional compensation, if any, to

which 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 rea-

sonable attorney’s fee . . . shall be awarded in addition to the

amount of compensation.

33 U.S.C. § 928(b). Newport News argues that Hassell is not entitled

to a fee award under this provision because Hassell failed to obtain

greater compensation by litigating the case. We disagree.

B.

As threshold requirements under § 928(b), an employer must pay

or tender payment of compensation without an award and a contro-

versy must develop over the amount of additional compensation to

NEWPORT NEWS SHIPBUILDING v. DOWCP 5

which the employee may be entitled. Once these thresholds are satis-

fied, § 928(b) requires all of the following before attorney’s fees may

be awarded: "(1) an informal conference, (2) a written recommenda-

tion from the deputy or Board, (3) the employer’s refusal to adopt the

written recommendation, and (4) the employee’s procuring of the ser-

vices of a lawyer to achieve a greater award than what the employer

was willing to pay after the written recommendation." Va. Int’l Ter-

minals, Inc. v. Edwards, 398 F.3d 313, 318 (4th Cir. 2005). Here,

each of these events has occurred.

1.

The threshold requirements of § 928(b) are satisfied: Newport

News paid temporary total disability benefits without an award for the

period from April 23, 2002, through August 4, 2002, and, thereafter,

a controversy developed over the amount of additional compensation

to which Hassell was entitled for permanent partial disability. After

Hassell’s treating orthopedic physician opined that Hassell had

reached maximum medical improvement, Hassell requested addi-

tional compensation based on a nineteen percent permanent partial

disability rating. Although Newport News did not initially dispute the

amount of compensation, it included in its proposed stipulations the

statement, "That the parties are aware of no other outstanding com-

pensation issues as of the date of execution of these Stipulations." A

controversy developed over the inclusion of this statement in the stip-

ulations.

Hassell deleted the statement, signed the stipulations and returned

them to Newport News. Newport News then refused to endorse this

modification to the stipulations and again requested Hassell to sign

the stipulations, with the original statement included. Thereafter,

Newport News filed a notice of controversion, challenging the extent

of permanent disability pending a second opinion. Therefore, a con-

troversy developed not only over the inclusion of the language in the

stipulations, but also over the amount of compensation.

2.

The remaining requirements of § 928(b) are also met. First, the let-

ters between Newport News and Hassell and to the District Director

6 NEWPORT NEWS SHIPBUILDING v. DOWCP

serve as the "functional equivalent of an informal conference."

Matulic v. Dir., OWCP, 154 F.3d 1052, 1060 (9th Cir. 1998) (stating

that the issuance of a written recommendation, alone, is the "func-

tional equivalent of an informal conference" for purposes of determin-

ing a claimant’s entitlement to attorney’s fees). This Court was

previously presented with a similar situation in which the employee’s

counsel argued that the District Director’s communications with the

parties by telephone and letter could be treated collectively as an

informal conference and that the District Director’s letter could be

treated as a written recommendation. Va. Int’l Terminals, Inc. v.

Edwards, 398 F.3d 313, 318 n.* (4th Cir. 2005). The Court rejected

that argument, without deciding whether written communication

could be treated as an informal conference, because the District

Director’s letter did not constitute a written recommendation. Id.

Here, however, the District Director did issue a written recommenda-

tion after receiving the request for an informal conference. Thus, we

must revisit whether written communication may be treated as an

informal conference.

The Code of Federal Regulations affords the District Director

much discretion for handling claims and conducting informal confer-

ences. 20 C.F.R. § 702.314 states that such conferences should gener-

ally be held at the District Director’s office; however, they may be

held at any place which will be of greater convenience to the parties.

In fact, 20 C.F.R. § 702.311 provides that some cases may be handled

by written correspondence. Thus, in Hassell’s case, the letters consti-

tute an informal conference.

Second, the District Director’s June 25, 2003, letter was a written

recommendation. As noted above, after receiving the letter requesting

an informal conference, the District Director responded, stating that

the position of the Office of Workers’ Compensation Programs was

that Newport News should begin payments of the rating with which

it had no disagreement and that Hassell was not required to sign the

stipulations as a condition to receive compensation. Thus, we find that

the District Director issued a written recommendation.

Third, Newport News refused to adopt the District Director’s rec-

ommendation. Newport News never changed its initial offer, which

included the challenged language in the stipulations. Finally, Hassell

NEWPORT NEWS SHIPBUILDING v. DOWCP 7

refused to sign the stipulations with that language included and uti-

lized the services of a lawyer to receive an award "greater than the

amount paid or tendered" by Newport News. Id.

Newport News argues that Hassell failed to obtain greater compen-

sation by litigating this case because Newport News tendered pay-

ment of compensation at a nineteen percent rating and Hassell

ultimately was awarded compensation at a nineteen percent rating.

However, Newport News refused to adopt the written recommenda-

tion and continued to condition its offer of payment on Hassell’s sign-

ing a stipulation he was not required to sign. Thus, Newport News

failed to make a valid tender because its offer was conditional.* See

Black’s Law Dictionary 1507 (8th ed. 2004) (defining "tender" as "an

unconditional offer of money or performance to satisfy a debt or obli-

gation"). In the end, after litigating the issue, Hassell obtained com-

pensation at a nineteen percent rating, but without the inclusion of the

challenged stipulation. Accordingly, he obtained a greater award than

he was able to achieve prior to litigating this case.

III.

In sum, because Hassell satisfied all of the requirements of

§ 928(b), he is entitled to an award of attorney’s fees. Accordingly,

the petition for review is denied.

PETITION DENIED

*Our case law establishes that a tender of additional compensation is

not required for an employer to be liable for attorney’s fees if the

employee uses an attorney to obtain additional compensation. See Va.

Int’l Terminals, Inc. v. Edwards, 398 F.3d 313, 318 (4th Cir. 2005 (stat-

ing that after satisfaction of the threshold requirements, payment of fees

under § 928(b) is dependent upon "all of the following: (1) an informal

conference, (2) a written recommendation from the deputy or Board, (3)

the employer’s refusal to adopt the written recommendation, and (4) the

employee’s procuring of the services of a lawyer to achieve a greater

award than what the employer was willing to pay after the written recom-

mendation").