Petition for Writ of Certiorari — Manarite v. United States

Sere I ere —_

Supreme Court, u.S.

FILED

1)

9 41 6 42 apr - 6 1995

OFFICE OF THE CLERK

In The

Supreme Court of the United States

October Term, 1994

=@

PETE STOLLINGS,

Petitioner,

VS.

DIRECTOR, UNITED STATES DEPARTMENT

OF LABOR, OFFICE OF WORKERS’

COMPENSATION PROGRAMS,

Respondent.

+

Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Fourth Circuit

+

PETITION FOR WRIT OF CERTIORARI

.

Rocer D. ForMAN, Esa.

FoRMAN & CRANE, L.C.

105 Capitol Street

Charleston, WV 25301

(304) 346-6300

Attorney of Record

for Pete Stollings

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED FOR REVIEW

1) Is contingency enhancement of an attorney's

lodestar rate appropriate under the Black Lung Benefits

Reform Act and applicable regulations?

2) If enhancement of the lodestar for risk is not

appropriate in Black Lung cases, is it appropriate to fac-

tor risk into the lodestar itself?

1)

2)

LISTING OF PARTIES

Petitioner - Pete W. Stollings

Rocky Branch Road, Box 297

Chapmanville, WV 25508

By Counsel - Roger D. Forman, Esq.

Forman & Crane, L.C.

105 Capitol Street

Charleston, West Virginia 25301

Respondent! — Director, United States Department

of Labor, Office of Workers’

Compensation Programs

By Counsel - Christian P. Barber, Esq.

Elizabeth A. Goodman, Esq.

Black Lung Division

Office of the Solicitor

United States Department of Labor

200 Constitution Avenue, N.W.,

Room N-2605

Washington, DC 20210

1 There are no corporate affiliations for any of the parties.

Pete Stollings is an individual and the United States Depart-

ment of Labor is a government agency.

iii

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW ........... i

Ps | OR a. ey 6 5: \. Sn ee enna ii

pr 8 Oe Bee yy. |) ee iii

TABLE OF AUTHORITIES ... 2... cece ccc encccnese Vv

REFERENCE TO OFFICIAL AND UNOFFICIAL

REPORTS OF OPINIONS DELIVERED IN THE

CASE BY OTHER COURTS OR ADMINISTRATIVE

EE Peer rar er Te ee ee Tee 1

JURISDICTIONAL STATEMENT............----+++-- 2

REGULATIONS INVOLVED...............-.-0--0-- 3

STATEMENT OF THE CASE.........2-2ccececeece 3

ET Fico decd keane ven es ede eaeveranceasces +

APPENDIX:

OPINION OF U.S. COURT OF APPEALS FOR THE

FOURTH CIRCUIT AFFIRMING BENEFITS

REVIEW BOARD’S DECISION IN STOLLINGS V.

DIRECTOR DATED DECEMBER 15, 1994 ........ la

DECISION AND ORDER ENTERED BY USS.

DEPARTMENT OF LABOR, BENEFITS REVIEW

BOARD, MODIFYING ADMINISTRATIVE LAW

JUDGE EDITH BARNETT’S ATTORNEY FEE

AWARD IN STOLLINGS V. DIRECTOR DATED

eB ei pbuh en sdbestwowesscnyeserses 4a

U.S. DEPARTMENT OF LABOR, OFFICE OF

ADMINISTRATIVE LAW JUDGES, SUPPLEMEN-

TAL DECISION AND ORDER AWARDING

ATTORNEY FEES IN STOLLINGS V. DIRECTOR

DATED AUGUST 27, 1993........ PR ale dig aon 9a

iv

TABLE OF CONTENTS - Continued

Page

ORDER ENTERED BY U.S. COURT OF APPEALS

FOR THE FOURTH CIRCUIT DENYING PETI-

TIONEK’S PETITION FOR REHEARING AND

SUGGESTION FOR REHEARING IN BANC

DASER? IANGUARY 30, B50 ios vad cv eeaceeceaanes l4a

MILBURN COLLIERY COMPANY V. CHARLIE R.

WOODSON; DIRECTOR, OFFICE OF WORKERS

COMPENSATION PROGRAMS, U.S. DEPART-

MENT OF LABOR, NO. 89-3318, DATED DECEM-

ee as SE cake tlh can h eed pug ee ana erdeses 17a

BENEFITS REVIEW BOARD DECISION REGARD-

ING JOHN RISDEN V. DIRECTOR, OFFICE OF

WORKERS’ COMPENSATION PROGRAMS,

UNITED STATES DEPARTMENT OF LABOR, 2 BLR

1-823, 828, DECISION AND ORDER DATED FEB-

ar, a ere rere rer re yr ere fee 23a

BENEFITS REVIEW BOARD DECISION REGARD-

ING HAYES E. BROWNING V. DIRECTOR, OFFICE

OF WORKERS’ COMPENSATION PROGRAMS,

UNITED STATES DEPARTMENT OF LABOR, BRB

NO. 92-1144 BLA, OWCP NO. 232-16-3250, DECI-

SION AND ORDER DATED JANUARY 25, 1994 35a

TABLE OF AUTHORITIES

Page

CASES:

Broyles v. Director, OWCP, 974 F.2d 508 (4th Cir.

NE agate sy ase heen Vs boos ad Rees Oo e he eee 4,9

City of Burlington v. Dague, 112 S.Ct. 2638 (1992).. 4, 8, 10

Hayes E. Browning v. Director, OWCP, BRB No.

92-1144 BLA, OWCP No. 232-16-3250 .............. 8

McKittrick v. Gardner, 378 F.2d 872 (4th Cir. 1967)..... 5

Milburn Collieries v. Charlie R. Woodson, et al., No.

69-3318 (4th Cir. 1998)... 2. ccc ccc cccecceereseceee 6

Pennsylvania v. Delaware Valley Citizens Council for

Clean Air, 483 U.S. 711, 97 L. Ed. 2d 585, 107

EU, Se COD cece dwnndsvarenseweasseesarereuccs 7

Risden v. Director, OWCP, 2 BLR 1-823 (1980)......... :

U.S. Department of Labor v. Triplett, 494 U.S. 715

| Serer err err er reer Et ee 7, 8,9

STATUTES:

, Bik Coe |) err ee rr rrr ere ere rr errr for 2

BE TTA. MR) on be voto heccc twa eneneesseciaceaeenns 4

FEDERAL REGULATIONS:

Re. 9g or. &””. Ge rr ee ee ee 4

20 C.E.R. G725.S6G(D). 0. ccc ccc cee cere csccecccees >» *

ou, fe deeuginiessnvisce¥us 9

+

In The

Supreme Court of the United States

October Term, 1994

*

PETE STOLLINGS,

Petitioner,

vs.

DIRECTOR, UNITED STATES DEPARTMENT

OF LABOR, OFFICE OF WORKERS’

COMPENSATION PROGRAMS,

Respondent.

¢

Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Fourth Circuit

€

PETITION FOR WRIT OF CERTIORARI

+

REFERENCE TO OFFICIAL AND

UNOFFICIAL REPORTS OF OPINIONS DELIVERED

IN THE CASE BY OTHER COURTS OR

ADMINISTRATIVE AGENCIES

There are no official reports in this case. The unoffi-

cial reports are all contained in the appendix to this

petition as follows:

OPINION OF U.S. COURT OF APPEALS FOR

THE FOURTH CIRCUIT AFFIRMING BENE-

FITS REVIEW BOARD’S DECISION IN STOLL-

INGS V. DIRECTOR DATED DECEMBER 15,

1994

DECISION AND ORDER ENTERED BY USS.

DEPARTMENT OF LABOR, BENEFITS REVIEW

BOARD, MODIFYING ADMINISTRATIVE LAW

JUDGE EDITH BARNETT’S ATTORNEY FEE

AWARD IN STOLLINGS V. DIRECTOR DATED

APRIL 25, 1994

U.S. DEPARTMENT OF LABOR, OFFICE OF

ADMINISTRATIVE LAW JUDGES, SUPPLE-

MENTAL DECISION AND ORDER AWARDING

ATTORNEY FEES IN STOLLINGS V. DIRECTOR

DATED AUGUST 27, 1993

ORDER ENTERED BY U.S. COURT OF

APPEALS FOR THE FOURTH CIRCUIT DENY-

ING PETITIONER’S PETITION FOR REHEAR-

ING AND SUGGESTION FOR REHEARING IN

BANC DATED JANUARY 10, 1995

¢

JURISDICTIONAL STATEMENT

This is a Black Lung case. The United States Court of

Appeals for the Fourth Circuit entered its order affirming

the fee reduction to the undersigned on December 15,

1994. The order denying rehearing was entered on Janu-

ary 10, 1995. This Court has jurisdiction to review the

judgment of the United States Court of Appeals pursuant

to 28 U.S.C. §1254(1).

REGULATIONS INVOLVED

This case involves the following regulation:

20 C.F.R. §725.366(b) Any fee approved under

paragraph (a) of this section shall be reasonably

commensurate with the necessary work done

and shall take into account the quality of the

representation, the qualifications of the repre-

sentative, the complexity of the legal issues

involved, the level of proceedings to which the

claim was raised, the level at which the repre-

sentative entered the proceedings, and any

other information which may be relevant to the

amount of fee requested.

No fee approved shall include payment for

time spent in preparation of a fee application.

No fee shall be approved for work done on

claims filed between December 30, 1969, and

June 30, 1973, under part B of title IV of the act,

except for services rendered on behalf of the

clairnant in regard to the review of the claim

under section 435 of the Act and part 727 of this

subchapter.

STATEMENT OF THE CASE

Pete Stollings applied for Black Lung benefits. He

was awarded after a hearing by Administrative Law

Judge Edith Barnett after which the undersigned filed for

and was awarded a fee at a rate of $250.00 per hour. An

appeal was taken and the fee was cut in half by the

Benefits Review Board, which decision was affirmed by

ee eee

the U.S. Court of Appeals for the Fourth Circuit, which

had jurisdiction pursuant to 33 U.S.C. §921(c).

a

ARGUMENT

I. Is contingency enhancement of an attorney’s lode-

star rate appropriate under the Black Lung Benefits

Reform Act and applicable regulations?

This Court in City of Burlington v. Dague, 112 S.Ct.

2638 (1992) ruled that enhancement of the lodestar is not

permissible in contingent fee cases under environmental

and similar fee shifting statutes. Based upon a misreading

of Dague, supra, the Department of Labor and the U.S.

Court of Appeals for the Fourth Circuit, in this case and

previously in Broyles v. Director, OWCP, 974 F.2d 508 (4th

Cir. 1992) have concluded that Dague, supra, prohibits fee

enhancement in Black Lung cases before the agency and

the Courts, despite a history of approving enhancements

since 1980.

Fees for representing Black Lung victims are by law

and regulation, not by choice of attorney contingent and

based upon the following factors which are encoded at 20

C.F.R. §725.366(b):

a) The quality of representation

b) The qualifications of the representative

c) The complexity of the legal issue involved

d) The level of the proceeding to which the

claim was raised

e) The level of proceedings at which the repre-

sentative entered the case

f) Any other information which may be rele-

vant to the amount of fee requested.

Prior to Dague, supra, contingency was considered as

other relevant information. As the Benefits Review Board

ruled in Risden v. Director, OWCP, 2 BLR 1-823, 828 (1980):

“Although the Department of Labor has

refused to recognize contingency fees, 20 C.F.R.

§720.226(b), it would be unrealistic for this

Board to shut its eyes to the fact that claimants’

counsel are paid only when their clients are

found entitled to benefits. In this context we

note with approval a statement from the Court

of Appeals for the Fourth Circuit that:

[t]he effective lawyer will not win all of his

cases, and any determination of the rea-

sonableness of his fee in those cases in

which his client prevails must take account

of the lawyer’s risk of receiving nothing for

his services. Charges on the basis of a mini-

mal hourly rate are surely inappropriate for

a lawyer who has performed creditably

when payment of any fee is so uncertain.

McKittrick v. Gardner, 378 F.2d 872, 875 (4th

Cir. 1967). McKittrick, we note, is a Social Secu-

rity case which is in no way binding upon the

Board. We stress that our approval of this case

relates to policy considerations applicable to

both Social Security and Department of Labor

evaluations of attorney’s fee applications. The

actual process of evaluation differs because

Social Security recognizes contingency fees

based on a percentage of benefits actually

awarded, 42 U.S.C. §406(a), while we now rec-

ognize the risk of loss under the Black Lung Act

ST TS

as one factor of many in determining an appro-

priate hourly rate.

We therefore hold that the deputy commis-

sioner, when fixing an hourly rate for an attor-

ney’s fee, may consider the attorney’s risk of

going unpaid.”

As late as December 21, 1990, the U.S. Court of

Appeals was recognizing the appropriateness of enhance-

ment in Black Lung cases in Milburn Collieries v. Charlie R.

Woodson, et al., No. 89-3318 (copy attached), where the

Court supported and applied a multiplier, which was

supported by the same party, the Director, Office of

Workers’ Compensation Programs of the Department of

Labor who now opposes enhancement and the Woodson

decision states as follows:

“Milburn Colliery Company opposes any

enhancement of claimant’s attorneys’ fees

beyond counsel’s customary hourly rate. The

Director has responded in support of fee

enhancement. The use of the contingency fee

system in black lung cases has rendered such

claims unappealing to attorneys for several rea-

sons. First, the success rate is low. The over-

whelming majority of black lung cases are

denied. Second, settlements are not allowed in

black lung cases. Thus, attorneys handling black

lung cases know that if they pursue a claim,

they will likely have to go through every stage

of the legal process, with the strong likelihood

of ultimately losing. Third, the cases move

through the system slowly - most take many

years to resolve, resulting in a delay in the pay-

ment of attorney’s fees. Attorneys who are

unsuccessful in obtaining a benefit award for

— their client are precluded from charging fees.

re LOL LT) Re ee

Finally, contingency fees in black lung cases do

not operate the same way as traditional contin-

gency fee systems outside of a statutory scheme.

Black lung attorneys cannot, like personal injury

attorneys, offset the loss of many cases with a

large award in another case. If they win, they

collect payment at an hourly rate which may be

lower than the rate most other attorneys charge

for work which is not compensated on a contin-

gency basis. Clearly the contingent nature of

black lung fees is a factor to be considered in

arriving at a reasonable fee. Consideration of

this factor should not stop at simply accounting

for the fact that the attorney may sometimes not

recover any fees, but should account for all the

effects of using a contingency fee system within

the unique context of the black lung program.”

Black lung is indeed different in its fee process than

any other program like those covered by Dague, supra.

This Court in U.S. Department of Labor v. Triplett, 494

U.S. 715 (1990), opined:

“And we note that the Benefits Review

Board has construed the regulations of the Sec-

retary of Labor governing the award of attor-

ney’s fees to permit consideration of the

attorney’s risk of going unpaid. See Risden v.

Director, OWCP, 11 BRB 819, 824 (1980)”, 494

U.S. 715, 726, 108 L. Ed. 2d 701, 717 (1990).

Triplett was decided after Pennsylvania v. Delaware

Valley Citizens Council for Clean Air, 483 U.S. 711, 97 L. Ed.

2d 585, 107 S.Ct. 3078 (1987) (Delaware Valley II) in which

the principal opinion was opposed to enhancement. The

Court therefore recognized (after Delaware Valley II) that

enhancement of the lodestar was still appropriate in black

lung cases.

Enhancement is still appropriate and necessary in

black lung cases under the black lung regulations and

this Court must say so. The reasoning of Woodson, supra,

is ever important to assure that the fee process does not

further erode the quality and availability of representa-

tion available to black lung claimants so that due process

is not denied to claimants by their inability to get repre-

sentation as was feared by Justice Marshall in his concur-

rence in Triplett, supra.

It is truly unreasonable to expect competent counsel

to work for the reduced fee in this case. A reasonable fee |

as authorized by the Black Lung Act cannot possibly be

based upon the same lodestar amount charged for

straight non-contingent quick paying work. That is not a

reasonable fee as defined by the Black Lung Act, the

Black Lung regulations, the Fourth Circuit or this Court.

In this case, the Benefits Review Board applied

Dague, supra, and Triplett, supra, as the governing law. In

the case of Hayes E. Browning v. Director, OWCP, (copy

attached), an unpublished decision, in Footnote 3, the

Benefits Review Board notes that Dague, supra, is distin-

guishable. It appears that the Department of Labor has no |

concrete position on such an important issue but flip-

flops for the circumstances.

The decision of the Fourth Circuit in Broyles, supra, is

likewise wrong. It ignores the law as enunciated by this

Court in Triplett, supra, which cited favorably to the

history of fee enhancement under the black lung regula-

tions. One could posit that the behavior of the attorneys

seein atest

in Broyles, supra, which the Court called obscene, caused

them to jump on Dague, supra, as a rationale for denying

enhancement of attorney fees. Bad lawyers and bad fact

situations make bad law.

The decision of the United States Court of Appeals

for the Fourth Circuit conflic, with this Court’s decisions

in Triplett, supra, and Dague, supra, to a degree that this

Court must exercise its authority and review this case in

order to assure that this Court’s legal direction is mani-

fest and supreme.

II. If enhancement of the lodestar for risk is not appro-

priate in Black Lung cases, is it appropriate to fac-

tor risk into the lodestar itself?

Even if this Court does find that Dague, supra,

applies to Black Lung Act cases, the Court should take

this case and reverse the decisions below because they do

not allow this attorney to properly establish his lodestar.

The documents which are part of the record below show

that this attorney has been granted a fee of $250.00 per

hour by the Judge in this case and in seven other cases,

and that three other attorneys bill and receive awards of

the same range. No fee agreement can be negotiated with

a client in a black lung case, see Triplett, supra, and 20

C.F.R. §725.365, 20 C.F.R. §802.203(f). The rate for black

lung cases certainly must be higher than the range

charged for non-contingent hourly work, so in establish-

ing a lodestar, I account for contingency and delay and

double my normal hourly rate of $125.00 for other cases

which have no risk or delay. The approvals by the various

10

Administrative Law Judges recognize the appropriate-

ness of this practice.

The Administrative Law Judge in her decision

awarding the attorney fee in question in this case prop-

erly found that the incorporation of risk into the lodestar

was appropriate in this case and so she awarded a fee at

the rate of $250.09 per hour.

This Court recognized in Dague, supra, 120 L. Ed. 2d

at 456, that risk of loss is ordinarily reflected in the

lodestar — “either in the higher number of hours

expended to overcome the difficulty, or in the higher

hourly rate of the attorney skilled and experienced

enough to do so.” This is further reason why this Court

should hear this case and reverse the illogical decisions

below. The decisions below clearly conflict with the deci-

sions of this Court.

Respectfully submitted,

Rocer D. Forman, Esa.

FoRMAN & CRANE, L.C.

105 Capitol Street

Charleston, WV 25301

(304) 346-6300

Counsel for Petitioner,

Pete Stollings

APPENDIX

A cs tiene

la

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

Pete W. STOLLINGS,

Petitioner, No. 94-1640

V.

Director, OFFICE OF WoRrKERS’

COMPENSATION PROGRAMS, UNITED

STATES DEPARTMENT OF LABOR,

Respondent.

On Petition for Review of an Order

of the Benefits Review Board.

(93-2527-BLA)

Argued: October 31, 1994

Decided: December 15, 1994

Before ERVIN, Chief Judge, HAMILTON, Circuit

Judge, and MACKENZIE, Senior United States District

Judge for the Eastern District of Virginia, sitting by desig-

nation.

Affirmed by unpublished per curiam opinion.

COUNSEL

ARGUED: Roger Daniel Forman, FORMAN & CRANE,

L.C., Charleston, West Virginia, for Petitioner, Elizabeth

Ann Goodman, Office of the Solicitor, UNITED STATES

2a

DEPARTMENT OF LABOR, Washington D.C., for

Respondent. ON BRIEF: Thomas S. Williamson, Jr., Solici-

tor of Labor, Donald S. Shire, Associate Solicitor for Black

Lung Benefits, Christian P. Barber, Counsel for Appellate

Litigation, Jill M. Otte, Office of the Solicitor, UNITED

STATES DEPARTMENT OF LABOR, Washington, D.C.,

for Respondent.

Unpublished opinions are not binding precedent in this

circuit. See I.0.P. 36.5 and 36.6.

OPINION

PER CURIAM:

Pete W. Stollings was awarded benefits under the

Black Lung Benefits Act by Administrative Law Judge

(ALJ) Edith Barnett in a decision and order issued May

18, 1993. On May 25, 1993, Stollings’ counsel, Roger D.

Forman, filed a petition for attorney’s fees in the amount

of $4,875.00, representing 19.5 hours of legal work com-

pensated at the rate of $250.00 per hour, and $381.43 in

miscellaneous expenses. The Director, Office of Workers’

Compensation Programs objected to the hourly rate.

The ALJ rejected the Director’s objections and

awarded Forman the total requested fee. The ALJ found

that Forman’s hourly rate of $250.00 was permissibly

calculated by incorporating a risk factor into a base rate

of $125.00 per hour. The Director appealed the ALJ's

decision to the Benefits Review Board which modified the

ALJ's attorney’s fee award. The Benefits Review Board

ee ea . =

ed

3a

fixed Forman’s lodestar fee amount at $2,437.50, repre-

senting 19.5 hours of legal services compensated at the

rate of $125.00 per hour, plus $381.43 in miscellaneous

expenses.

The Benefits Review Board found that Forman had

increased his base hourly rate of $125.00 by a contingency

multiplier of 2, achieving the same result he would have,

had he improperly multiplied his lodestar fee by a factor

of 2. The Benefits Review Board held such a contingency

enhancement of the base hourly rate violated the princi-

ples set forth by the United States Supreme Court in City

of Burlington v. Dague, 112 S.Ct. 2638 (1992), and by this

Court in Broyles v. Director, OWCP, 974 F.2d 508 (4th Cir.

1992.* Specifically, in Broyles, this Court prohibited the

use of contingency multipliers to compensate attorneys

for the risk of loss in claims arising under the Black Lung

Benefits Act. Broyles, 974 F.2d at 509. Since we expressly

rejected the increase of hourly rates based on the risk of

loss in Broyles, the ALJ erred in its assessment and the

Benefits Review Board’s decision must be affirmed.

AFFIRMED

* Forman argues that this Court’s decision in Broyles is

wrong and should be overruled. However, Broyles was based

upon a clear interpretation of the Supreme Court’s decision in

Dague, and this panel finds no reason to suggest that it be

overturned.

4a

U.S. DEPARTMENT OF LABOR

Benefits Review Board

800 K Street N.W.

Washington, D.C. 20001-8001

BRB No. 93-2527 BLA |

OWCP No. 233-46-4900 |

PETE W. STOLLINGS

lai -

Claimant-Respondent DATE ISSUED:

V. APR. 25, 1994

DIRECTOR, OFFICE OF

WORKERS’ COMPENSATION

PROGRAMS, UNITED STATES

DEPARTMENT OF LABOR

Petitioner

DECISION and

ORDER

ee i

Appeal of the Supplemental Decision and Order

Awarding Attorney Fees of Edith Barnett,

Administrative Law Judge, United States

Department of Labor.

Roger D. Forman (Forman & Crane, L.C.),

Charleston, West Virginia, for claimant.

Robert P. Hines (Thomas S. Williamson, Jr.,

Solicitor of Labor; Donald S. Shire, Associate

Solicitor; Rae Ellen Frank James, Deputy Associ-

ate Solicitor; Richard A. Seid and Michael J.

Rutledge, Counsel for Administrative Litigation

and Legal Advice), Washington, D.C., for the

Director, Office of Workers’ Compensation Pro-

grams, United States Department of Labor.

i

i

;

;

i

5a

Before: SMITH and BROWN, Administrative

Appeals Judges, and SHEA, Administrative Law

Judge.*

PER CURIAM:

The Director, Office of Workers’ Compensation Pro-

grams (the Director), appeals the Supplemental Decision

and Order Awarding Attorney Fees (91-BLA-1679) of

Administrative Law Judge Edith Barnett on a claim filed

pursuant to the provisions of Title IV of the Federal Coal

Mine Health and Safety Act of 1969, as amended, 30

U.S.C. §901 et seq. (the Act). The administrative law judge

awarded claimant’s counsel a total fee ot $5,256.43 for

19.5 hours of legal services at an hourly rate of $250.00

plus $381.43 in miscellaneous expenses. On appeal, the

Director contends that the administrative law judge erred

in approving an attorney fee award that was based upon

an hourly rate enhanced to account for the contingent

nature of the fee. Claimant’s counsel responds in support

of the administrative law judge’s attorney fee award.

The award of an attorney’s fee is discretionary and

will be upheld on appeal unless shown by the challeng-

ing party to be arbitrary, capricious, or an abuse of discre-

tion. Abbott v. Director, OWCP, 13 BLR 1-15 (1989); Marcum

v. Director, OWCP, 2 BLR 1-894 (1980).

The Director’s sole contention on appeal is that the

administrative law judge erred in approving claimant’s

counsel’s requested hourly rate because it improperly

* Sitting as a temporary Board member by designation pur-

suant to the Longshore and Harbor Workers’ Compensation

Act, as amended in 1984, 33 U.S.C. §921(b)(5)({1988).

6a

incorporated a contingency multiplier. When a claimant

wins a contested case, the Act provides that the employer,

his insurer, or the Black Lung Disability Trust Fund shall

pay a “reasonable attorney’s fee” to claimant’s counsel.

30 U.S.C. §932(a), incorporating 33 U.S.C. §928(a). On

May 18, 1993, the administrative law judge awarded

claimant benefits. On May 27, 1993, claimant’s counsel

filed a “Notion for Attorney’s Fee,”

Support of Motion for Attorney’s Fee” (Memorandum)

with supporting documents and a fee petition. In the

Memorandum, claimant’s counsel indicated that his base

a “Memorandum in

hourly rate for handling a case of this nature before the

Office of Administrative Law Judges was $125 an hour.!

Memorandum at 1. Claimant’s counsel, however,

explained that his base hourly rate did not account for

the contingent nature of the fee. Id. After the contingent

nature of the fee was factored into his $125.00 base hourly

rate, claimant’s counsel indicated that his hourly rate for

handling federal black lung cases at the administrative

law judge level was $250.00 an hour. Id. at 5.

In determining the amount of attorney’s fees to

award under a fee-shifting statute, a court must deter-

mine the number of hcurs reasonably expended in pre-

paring and litigating the case and then multiply those

hours by a reasonable hourly rate. This sum constitutes

the “lodestar” amount. See Pennsylvania v. Delaware Valley

1 Claimant’s counsel explained that his $125.00 hourly rate

was based on his specialized expertise in federal black lung law,

the level of the proceeding and the fact that federal black lung

claims raise complex factual and legal issues. Memorandum at

1.

7a

Citizens’ Council for Clean Air, 478 U.S. 546 (1986). The

United States Supreme Court has held that fee-shifting

statutes do not permit enhancement of a fee award

beyond the lodestar amount to reflect the fact that a

party’s attorneys were retained on a contingent-fee

basis.? See City of Burlington v. Dague, 112 S.Ct. 2638 (1992)

(no contingency enhancement whatever is compatible

with the fee-shifting statutes at issue); see also Broyles v.

Director, OWCP, 974 F.2d 508, 17 BLR 2-1 (4th Cir. 1992).

Because claimant’s counsel indicated that his hourly

rate for handling a case of this nature at the administra-

tive law judge level was $125.00 an hour, the lodestar

amount in the instant case is $2437.50 [19.5 hours multi-

plied by $125.00]. We disagree with the administrative

law judge’s statement that claimant’s counsel’s standard

hourly rate of $250.00, which incorporated a 50% risk

factor, was proper under City of Burlington and consistent

with the lodestar method of determining attorney fee

awards. See Supplemental Decision and Order Awarding

Attorney Fees at 2-3. By increasing his base hourly rate of

$125.00 by a cuntingency multiplier of 2, claimant’s coun-

sel has achieved the same result he would have, had he

improperly multiplied his lodestar fee by a factor of 2.

Because claimant’s counsel’s requested attorney fee

2 The Supreme Court explained that the lodestar amount

incorporates any compensable risk of loss as it is reflected in the

increased amount of hours expended to overcome the difficulty

of winning or in the higher hourly fee of the more skilled

attorney needed to win the case. City of Burlington v. Dague, 112

S.Ct. 2638, 2641 (1992).

8a

reflects an hourly rate adjusted to account for the contin-

gent nature of the fee, his requested hourly rate is exces-

sive and in violation of the principles set out in City of

Burlington and Broyles. We, therefore, modify the adminis-

trative law judge’s attorney fee award to reflect a total fee

of $2818.93 for 19.5 hours of legal services at an hourly

rate of $125.00 plus $381.43 in miscellaneous expenses.

Accordingly, the administrative law judge’s Supple-

mental Decision and Order Awarding Attorney Fees is

modified.

SO ORDERED.

/s/ RPS

ROY P. SMITH

Administrative Appeals Judge

/s/ James F. Brown

JAMES F. BROWN

Administrative Appeals Judge

/s/ Robert J. Shea

ROBERT J. SHEA

Administrative Law Judge

9a

U.S. Department of Labor [SEAL]

Office of Administrative Law Judges

800 K Street, N.W.

Washington, D.C. 20001-8002

COREE EE EEO EEE EEE EEE EEE EEE EEE EEEEEEEEEEEEEEEEEEEEEEESESOS

In the Matter of ‘ DATE ISSUED:

PETE W. STOLLINGS "August 27, 1993

Claimant | CASE NO.

V. . 91-BLA-1679

DIRECTOR, OFFICE OF OWCP NO.

WORKERS’ COMPENSATION 233-46-4900

PROGRAMS,

Party in Interest

CEO EEE EEE EEE EE EEE EEE EEE EEE EEE EEE HEHEHE EEEEEEEEEHEEHEHOEHOES

SUPPLEMENTAL DECISION AND ORDER

AWARDING ATTORNEY FEES

On May 18, 1993, I issued a decision and order

awarding benefits, and ordered the claimant to file an

application for attorney fees within thirty days. On May

25, 1993, claimant’s counsel, Roger D. Forman, Esq,., filed

his motion for an award of fees, a detailed supporting

memorandum with several exhibits, and a properly docu-

mented petition seeking a total amount of $5,256.43. This

amount represents 19.5 hours of attorney time at a rate of

$250.00 per hour plus $381.43 in expenses. The director,

OWCP, filed a response on June 8, 1993, objecting only to

the hourly rate requested and to an expense item of

$111.00 for office runner travel expenses. On June 14,

1993, Mr. Forman responded with an explanation of the

10a

office runner travel expense item. I consider each objec-

tion in turn.

Counsel’s Hourly Rate

The Director argues that the $250 hourly rate

requested by claimant’s counsel represents a 200% “mul-

tiplier” of his standard hourly rate of $125 per hour and

is therefore foreclosed by the decisions of the Supreme

Court in City of Burlington v. Dague, __ U.S. __, 112 S.

Ct. 2638 (1992), and the Fourth Circuit Court of Appeals

in Broyles v. Director, OWCP, 974 F.2d 508, 17 BLR 2-1

(1992) (applying City of Burlington to black lung cases). In

City of Burlington, the Court refused to permit a 25%

enhancement for contingency (a “multiplier” of $125%) to

the plaintiffs’ “lodestar” attorney’s fee. The Court

observed that, in determining fee awards under fee-shift-

ing statutes, it has moved away from the contingent fee

model (fee awards as a percentage of the value of the

relief awarded) to the “lodestar” model (fee awards as

“the product of reasonable hours times a reasonable

rate”). The Court concluded that contingency enhance-

ments would engraft a feature of the contingent fee

model onto the lodestar model and, by making the setting

of fees more complex and arbitrary, would encourage

satellite fee litigation. The Court further observed that

part of the risk of loss in a particular case, i.e. that

attorney’s contingent risk, is already “reflected in the

lodestar — either in the higher number of hours expended

to overcome the difficulty [of establishing the legal and

factual merits of the claim], or in the higher nourly rate of

the attorney skilled and experienced enough to do so.” Id.

At 2640-2643.

lla

Despite some equivocal language in his brief, as I

understand his argument, claimant’s counsel is not seek-

ing a “multiplier” here, i.e. an arbitrary enhancement for

the contingency of this particular case like the type

requested in City of Burlington and Broyles. Rather, he

asserts that his established hourly rate for all black lung

cases is $250. He supports this assertion by his submis-

sion of several decisions issued by other Department of

Labor administrative law judges since 1990 awarding him

attorney fees in black lung cases at his requested rate of

$250. Most recently, Administrative Law Judge Lawrence

E. Gray issued orders in two cases on December 16, 1992

(Nos. 91-BLA-0808, 85 BLA-5644) awarding Mr. Forman

fees at a rate of $250 per hour in both; no objection to this

rate was offered by any of the parties, including the

Director, although both City of Burlington and Broyles had

been decided earlier that year.

Claimant’s counsel has also submitted affidavits of

attorneys Grant Crandall and Thomas H. Zerbe which

indicate that hourly rates of $250 per hour for black lung

cases, while once considered high, are becoming the

norm in West Virginia, because of the need to reflect the

marked risk of loss in these cases. The economic risk to

attorneys in this type of litigation in Mr. Forman’s area is

further documented by the affidavit of Jane Moran, chair-

person of the West Virginia State Bar’s subcommittee on

Black Lung representation. She states that attorneys who

were once willing to represent claimants no longer find

such work profitable because of the high risk of loss,

resulting in a critical problem of underrepresentation of

claimants in federal black lung cases. This evidence of the

12a

high risk of loss in these cases stands uncontroverted by

the Director.

Claimant’s counsel has explained that the figure of

$125 per hour is a base amount that takes into account the

specialized expertise required in federal black lung law, |

the level of the proceeding, and the fact that federal black

lung claims raise complex factual and legal issues. His

standard hourly rate of $250 then incorporates a 50% risk

factor into this base, a calculation which appears to be

perfectly proper under City of Burlington and consistent

with the lodestar method of determining attorney fee

awards. The lodestar amount Mr. Forman seeks is his

established rate of $250 per hour for black lung cases

multiplied by the 19.5 hours spent on this case, for a total

of $4,8750 [sic]. The Director has not objected to the

number of hours spent on this case, which appear to be

quite reasonable in view of the results achieved. Accord-

ingly, I conclude that the amount requested is reasonable

and must be allowed.

Office Runner Travel Expenses

The Director objects to claimant’s charge for office

runner travel expenses of $111.00 on the grounds that the

fee petition did not include pertinent information such as {

the dates and purpose of the trips and how they relate to

the claim. In his response, counsel for the claimant has

explained that the runner had to deliver and pick up

medical records and X-rays for re-reading, and the charge

represents mileage and tolls between Beckley and Char-

leston, West Virginia. The charge is reasonable and is

therefore allowed.

13a

ORDER

IT IS HEREBY ORDERED that the Director, OWCP,

shall pay the sum of $5,256.43 directly to Roger D. For-

man, attorney for the claimant.

/s/ Edith Barnett

EDITH BARNETT

Administrative Law Judge

EB:bdw

NOTICE OF APPEAL RIGHTS: Pursuant to 20 C.FR.

Section 725.481, any party dissatisfied with this decision

and order may appeal it to the Benefits Review Board

within 30 days from the date of this Decision and Order by

filing a Notice of Appeal with the Benefits Review Board,

800 K. Street, N.W., Suite 500, Washington, DC

20001-8001. A Copy of a notice of appeal must also be served

on Donald S. Shire, Esq., Associate Solicitor for Black Lung

Benefits. His address is Frances Perkins Building, Room

N-2605, 200 Constitution Avenue, N.W., Washington, DC

20210.

14a

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

1100 EAST MAIN STREET

U.S. COURT HOUSE ANNEX

RICHMOND, VIRGINIA 23219

BERT M. MONTAGUE TELEPHONE

CLERK (804) 771-2213

January 10, 1995

Elizabeth Ann Goodman, Esq.

U.S. DEPARTMENT OF LABOR

Office of the Solicitor - BL

Room N2605

200 Constitution Avenue, NW

Washington, D.C. 20210

Christian P. Barber, Esq.

U.S. DEPARTMENT OF LABOR

Office of the Solicitor

Suite N-2605

Frances Perkins Building

200 Constitution Avenue, NW

Washington, DC 20210

Paul V. Trayers, Esq.

BENEFITS REVIEW BOARD

United States Department of Labor

Suite 500

800 K Street, NW

Washington, DC 20001

Robert Daniel Forman, Esq.

FORMAN & CRANE

105 Capitol Street

Charleston, WV 25301

Re: 94-1640 Stollings v. DOWCP

93-2527-BLA

- ie

15a

Dear Counsel:

Enclosed is a copy of an order filed 1/10/95 in this

case.

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

FILED

January 10, 1995

No. 94-1640

93-2527-BLA

PETE W. STOLLINGS

Petitioner

Vv.

DIRECTOR, OFFICE OF WORKERS’

COMPENSATION PROGRAMS, UNITED STATES

DEPARTMENT OF LABOR

Respondent

On Petition for Rehearing with Suggestion

for Rehearing in Banc

The petitioner’s petition for rehearing and sugges-

tion for rehearing in banc were submitted to this Court.

As no member of this Court or the panel requested a poll

on the suggestion for rehearing in banc, and

l6a

As the panel considered the petition for rehearing

and is of the opinion that it should be denied,

IT IS ORDERED that the petition for rehearing and

suggestion for rehearing in banc are denied.

For the Court,

/s/ Bert M. Montague

CLERK

17a

FILED: December 21, 1990

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 89-3318

MILBURN COLLIERY COMPANY,

Petitioner,

versus

CHARLIE R. WOODSON; DIRECTOR, OFFICE OF

WORKERS COMPENSATION PROGRAM, UNITED

STATES DEPARTMENT OF LABOR,

Respondents.

ORDER

Respondent Charlie R. Woodson filed a motion for an

award of attorneys’ fees. Petitioner Milburn Colliery

Company and the Director, Office of Workers’ Compensa-

tion Program, United States Department of Labor, filed

responses to the motion. Respondent Woodson also filed

a reply in support of the motion. Respondent moved this

court for an order granting attorneys’ fees in the amount

of $22,181.25 plus expenses of $297.37 against Milburn

Colliery Company.

This case involves a petition for review by Milburn

Colliery Company from a decision and order of the Bene-

fits Review Board, United States Department of Labor

which affirmed an award of benefits to former coal miner

a sn wa erat

18a

Woodson under the Black Lung Benefits Act, 30 U.S.C.

§§901 et seq. On May 9, 1990, this Court issued its deci-

sion in which it affirmed the BRB’s order, finding the

employer’s argument to be without merit. The mandate

of the Court issued and took effect on May 30, 1990. '

Attorney’s fees may be awarded in black lung cases

under the authority of 30 U.S.C. §932(a), which incorpo-

rates 33 U.S.C. §928(a) and Longshoreman’s and Harbor

Worker’s Compensation Act. Under 20 C.F.R. §725.366(a),

a representative seeking a fee for services performed on

behalf of a claimant must make separate applications at

each administrative or appellate level at which services

were performed, itemizing the services which were per-

formed at such level. All the services itemized on respon-

dent’s fee application were performed while this case was

pending before the United States Court of Appeals for the

Fourth Circuit. The expenses listed on the fee application

do not include the cost of printing respondent Woodson’s

brief which could have been taxed as costs by this Court

under Rule 39(a) of the Federal Rules of Appellate Pro-

cedure.

Respondent's attorneys have itemized 84.25 hours of

time and request an hourly rate of $250 an hour with an

increase of 5% to account for the delay in payment. The

$250 requested hourly rate is twice the amount counsel

normally charge for work at the federal circuit court

level, and counsel justify the double raie on the contin-

gent nature of the fee and high loss rate in federal black

lung cases.

Under 20 C.F.R. §725.366(b), a representative’s fee

shall be reasonably commensurate with the necessary

—————————————eE(o''''

19a

work done and shall take into account the quality of the

representation, the qualifications of the representative,

the complexity of the legal issues involved, the level of

proceedings to which the claim was raised, the level at

which the representative entered the proceedings and any

other relevant information.

In terms of the quality of representation, respon-

dent’s counsel wrote a 40-page brief in this case and

participated vigorously in oral argument before this

Court on March 5, 1990. Counsel represented Woodson in

the case below and has an established expertise in federal

black lung litigation. One of respondent’s attorneys has

fourteen years of litigation experience, the last six of

which involved the regular handling of federal black lung

claims. In addition, counsel conducted a seminar in fed-

eral black lung litigation. In the instant case the question

presented was whether the coal operator had a proper

opportunity to rebut a presumption of claimant’s total

disability under the Black Lung Interim Regulation, 20

C.F.R. §727.203(b)(2). There was an extensive amount of

lay and medical evidence in this case and the proper

interpretation of the applicable regulations have been

extensively litigated in this circuit and in the Supreme

Court. See e.g., Mullins Coal Co. v. Director, OWCP, 484 U.S.

135 (1987); Sykes v. Director, OWCP, 812 F.2d 890 (4th Cir.

1987).

Milburn Colliery Company opposes any enhance-

ment of claimani’s attorneys’ fees beyond counsel’s cus-

tomary hourly rate. The Director has responded in

support of fee enhancement. The use of the contingency

fee system in black lung cases has rendered such claims

unappealing to attorneys for several reasons. First, the

20a

success rate is low. The overwhelming majority of black

lung cases are denied. Second, settlements are not

allowed in black lung cases. Thus, attorneys handling

black lung cases know that if they pursue a claim, they

will likely have to go through every stage of the legal

process, with the strong likelihood of ultimately losing.

Third, the cases move through the system slowly - most

cases take many years to resolve, resulting in a delay in

the payment of attorney’s fees. Attorneys who are unsuc-

cessful in obtaining a benefit award for their client are

precluded from charging fees. Finally, contingency fees in

black lung cases do not operate the same way as tradi-

tional contingency fee systems outside of a statutory

scheme. Black lung attorneys cannot, like personal injury

attorneys, offset the loss of many cases with a large

award in another case. If they win, they collect payment

at an hourly rate which may be lower than the rate most

other attorneys charge for work which is not compen-

sated on a contingency basis. Clearly the contingent

nature of black lung fees is a factor to be considered in

arriving at a reasonable fee. Consideration of this factor

should not stop at simply accounting for the fact that the

attorney may sometimes not recover any fees, but should

account for all the effects of using a contingency fee

system within the unique context of the black lung pro-

gram.

Although the Court will approve the use of a multi-

plier in increasing counsel’s hourly rate, the request for

double counsel’s customary hourly rate is too high. A

multiplier of 60% for a $200 hourly rate is consistent with

recent awards by this Court in black lung appeals. See

i a a i

2la

Virginia Crews Coal Co. v. Director, OWCP, No. 89-2355;

Martin v. E&S Coal Company, No. 89-3288.

Counsel has itemized 84.25 hours for services ren-

dered while representing the claimant before this Court.

Respondent Woodson inad prevailed both before the

Administrative Law Judge and before the Benefits

Review Board. This Court quickly determined the coal

operator’s appeal to be without merit and affirmed the

Board by a one-page unpublished per curiam opinion.

Although there was nothing lacking in the quality of legal

representation of Woodson, the issues presented by this

case do not support the amount of time that counsel

expended on appeal. Counsel has itemized 62.5 hours of

review, research and writing. Travel to locate records and

to come to this Court to present oral argument accounted

for 17.25 billable hours. Correspondence and telephone

calls each accounted for 2.25 billable hours. Respondent’s

brief was almost twice the size of the coal operator’s

opening brief and much of the factual analysis and legal

argument presented to this Court was fully developed in

the case below. It appears appropriate to reduce counsel’s

review, research and writing time by 1/3 to make the

total number of awardable hours 63.41.

Awarding $200 an hour for 63.41 billable hours plus a

5% enhancement for delayed payment results in a total

award of attorneys’ fees of $13,316.10. The total expenses

of $297.37 appear to be reasonable and the Court hereby

i i ll

22a

awards respondent Woodson a total of $13,613.47 in attor-

neys’ fees and expenses.

For the Court — By Direction

JOHN M. GREACEN

CLERK

JOHN RISDEN

Claimant-Petitioner

23a

BRB No. 78-488 BLA

2a OWCP No.

DIRECTOR, OFFICE OF 404-12-1818

WORKERS’ COMPENSATION

PROGRAMS, UNITED STATES ) DECISION

and ORDER

DEPARTMENT OF LABOR

Respondent

Digest

Section

103

108

Syllabus

In a case where a substantial reduction in

requested fees was appealed, the Board held

that neither the adjudication officer nor the

attorney provided enough specific information

upon which to base a review. The deputy com-

missioner had not explained his reasons for

disallowing part of the claimed hours or for

reducing the requested hourly rate, and the

attorney had not provided an adequate itemiza-

tion of services rendered or time spent on each

type of service.

Since an attorney is only awarded a fee for

black lung litigation when the claimant pre-

vails, the Board found that the risk of loss

under the Black Lung Act should be recognized

as one factor of many to be considered “other

information” in determining an appropriate

hourly rate.

Appeal from the Decision and Order of John M.

Bodley, Hearing Officer, United States Depart-

ment of Labor.

Steven Horenstein (Legler, Lang & Kuhns), Day-

ton, Ohio, for the claimant.

24a

Judith E. Wolf, Co-Counsel for Black Lung Bene-

fits (Carin A. Clauss, Solicitor of Labor, Laurie

M. Streeter, Associate Solicitor), Washington,

D.C., for the Director, Office of Workers’ Com-

pensation Programs, United States Department

of Labor.

Before: SMITH, Chief Administrative Appeals

Judge, MILLER and KALARIS, Administrative

Appeals Judges.

SMITH, Chief Administrative Appeals Judge:

This is an appeal, by the claimant’s attorney, from the

Decision and Order (78-BLA-91) of Hearing Officer John

M. Bodley,! awarding an attorney’s fee pursuant to the

provisions of Title IV of the Federal Coal Mine Health

and Safety Act of 1969, as amended by the Black Lung

Benefits Act of 1972, 30 U.S.C. §901 et seq. (hereinafter, the

Act).

The claim for black lung benefits in this case was

filed on October 18, 1973 and was informally denied on

May 25, 1976. On September 29, 1976 the claimant

retained Mr. Steven Horenstein as his attorney. Lay evi-

dence of the claimant’s coal mine employment dating

back to 1919 as well as medical evidence of pneu-

moconiosis procured by the attorney resulted in an award

by the deputy comissioner [sic] of $12,269.10 in accrued

benefits and continuing benefits in the amount of $308.10

per month. Award of Benefits, May 6, 1977.

1 Mr. John M. Bodley is currently an administrative law

judge with the Department of Labor. At the time the Decision

and Order appealed from was filed, however, Mr. Bodley was a

hearing officer and will therefore be referred to by that title

throughout this decision.

2 I te AAA SE NS a Sn atSR t N ae a a

25a

Claimant’s attorney filed a fee petition requesting

$3,000.00, as well as $20.00 in expenses, for 41.25 hours

devoted to his successful prosecution of the claim. In a

letter dated August 8, 1977 the deputy commissioner

awarded a fee of $1,000.00 based on 20 compensable

hours at an hourly rate of $50.00.

When the attorney requested that the deputy com-

missioner reconsider the fee, the case was referred to the

Office of Administrative Law Judges for a hearing. Letter

of Steven B. Horenstein, December 14, 1977; Letter of

Hearing Officer, March 21, 1978. The attorney agreed that

the only issue was the reasonableness of the fee award or

the value of the services rendered. He did not object to

having the issue decided on the record without a hearing.

Letter of attorney, March 24, 1978. The hearing officer

without a hearing issued a decision on April 28, 1978,

concluding that “a fee of $1,000.00 is reasonable and

appropriate.” Decision & Order, p. 4.

On appeal to the Board, the attorney maintains that

this fee is unreasonable considering the time spent on the

case, the skill required, and excellent result achieved. He

states also that because his office policy is not to charge

fees in black lung claims unless claimant prevails, a rate

of $50.00 per hour is unreasonable in light of “the small

percentage of black lung claims that were allowed under

the old regulations.” Petition for Review, p. 1.

The Director, Office of Workers’ Compensation Pro-

grams, argues that the hearing officer’s decision should

be affirmed because it is legally correct, does not consti-

tute an abuse of discretion, and is not arbitrary or capri-

cious. Director’s Letter, September 28, 1978, p. 3. The

26a

Director submits also that the amount of the fee awarded

in this case would not be altered by the promulgation of

superseding regulations after the hearing officer’s deci-

sion.? See 20 C.F.R. §725.417 (1977) and 20 C.F.R. § 725.366

(1979).

Although the hearing officer entered a Decision and

Order finding that the deputy commissioner’s award was

appropriate, we treat it as null and void. It is well estab-

lished that review of a deputy commissioner’s discretion-

ary act is properly undertaken by the Board rather than

by a hearing officer or administrative law judge. Mazzella

v. United Terminals, Inc., 8 BRBS 755, BRB No. 78-173

(Aug. 31, 1978). A deputy commissioner’s award of an

attorney’s fee is a discretionary act and therefore review-

able only by the Board. The hearing officer thus lacked

jurisdiction to review an attorney’s fee approved or

awarded by the deputy commissioner. Ellis v. Blake Con-

struction Co., 8 BRBS 650, BRB No. 78-331 (July 31, 1978);

2 The Board on its own motion consolidated, for oral argu-

ment only, the instant case with Thomas v. Director, BRB Nos.

77-688 BLA and 79-162 BLA, and 21 other cases which presented

issues concerning the Black Lung Disability Trust Fund’s lia-

bility for attorney’s fees. Board Order, Thomas, August 10, 1979.

The Director subsequently conceded Trust Fund liability for

attorney’s fees in the instant case and 22 other cases in which no

responsible operator was identified. Director’s Motion to Dis-

miss Appeal and Response to Order of August 10, 1979, Thomas,

August 24, 1979. The Board granted this Motion and gave Direc-

tor 30 days to make further comments upon the other issues left

undecided by Director’s concession of August 24, 1979. Board

Order, Thomas, September 27, 1979. The Director responded that

he would stand by his original Response in the instant case.

Director’s Response and Request for Enlargement of Time, Will-

iamson v. Director, BRB No. 79-115 BLA, November 1, 1979.

ee rr ee

27a

Mazzella, supra.? We will accordingly treat the case as an

appeal to the Board from the deputy commissioner’s

award.

Where substantial reductions in requested attorney’s

fees are appealed, the Board has held that the challenging

party must demonstrate that the reduction was arbitrary,

capricious, or an abuse of discretion. Hicks v. Clinchfield

Coal Co., 5 BRBS 120, BRB No. 76-111 BLA (Nov. 26, 1976);

Perry v. Lueking Coal Co., 5 BRBS 620, BRB No. 76-179 BLA

(March 28, 1979). The adjudication officer must set forth

specific, detailed findings concerning the factors upon

which the award was based. Without such discussion,

there is insufficient information upon which to base a

review. Beacham v. Atlantic & Gulf Stevedores, Inc., 7 BRBS

940, BRB No. 77-139 (Feb. 13, 1979); Bednarek v. I.T.O.

Corp. of Baltimore, 7 BRBS 708, BRB No. 77-140 (Feb. 15,

1978). See also Collins v. United States Steel Corp., 8 BRBS

942, BRB No. 77-390 BLA (Aug. 17, 1978), for a case in

which a reduction in requested attorney’s fees was

upheld on review. These standards are binding upon

deputy commissioners. Ellis v. Blake Construction Co.,

supra.

The deputy commissioner’s fee award falls short of

these standards. The text of the fee award is as follows:

° This principle has been included in the Secretary of

Labor’s regulations implementing the Act as amended by the

Black Lung Benefits Reform Act of 1977 (1977 Reform Act), Pub.

L. No. 95-239, 92 Stat. 95 (1978) (to be codified at 30 U.S.C. §901

et seq.). Section 725.366(b), 43 Fed. Reg. 36774, 89 (1978) (cod-

ified at 20 C.F.R. §725.366(b)) provides that “[i]f a fee awarded

by a deputy commissioner is disputed, such award shall be

appealable directly to the Benefits Review Board.”

28a

Your application for approval of a represen-

tative’s fee on the claim of John Risden for Fed-

eral Black Lung Benefits has been received and

reviewed. The time and activity indicated on

your itemized statement has been adjusted and

we shall approve an hourly rate of $50.00 per

hour on this case. We approve 20 hours as being

reasonable for this case and $50.00 per hour as a

reasonable rate, or the total sum of $1,000.

Letter of Deputy Commissioner, August 8, 1978

The regulations applicable to the instant case are

those which were in effect at the time this fee application

was filed, i.e., May 20, 1977.4 See 20 C.F.R. §§720.266 and

4 The claim in this case was filed on October 18, 1973. It is

thus a so-called transition period claim, governed by Section

415 of the Act, 30 U.S.C. §925. The implementing regulations

took effect on June 27, 1973 and are found at 20 C.F.R. Part 720.

The attorney fee provisions thereof are at 20 C.F.R. §720.226 and

720.227 (1977).

On August 18, 1978 the regulations at 20 C.F.R. Part 720

were superseded by the Secretary’s regulations published at 43

Fed. Reg. 36772 (1978) (codified at 20 C.F.R. §725). These regula-

tions implement the Black Lung Benefits Reform Act of 1977,

Pub. L. No. 95-239, 92 Stat. 95 (1978) (codified at 30 U.S.C. §901

et seq.) (hereinafter, 1977 Reform Act). Although newly enacted

law, if relevant, is normally applied in the decision of pending

cases, the United States Court of Appeals for the Fourth Circuit

has held that the Black Lung Benefits Reform Act of 1977 “is an

exception to the rule.” Treadway v. Califano, 584 F.2d 48, (4th Cir.

1978). See also United States Steel Corp. v. Gray, 588 F.2d 1022 (5th

Cir. 1979).

The attorney’s obligations under the old and new regula-

tions differ slightly. The superseding regulations require, for the

first time, that a fee petition indicate “the professional status

(e.g., attorney, para-legal, law clerk, lay representative or cleri-

cal) of the person performing such work, and the customary

anion tite.

29a

720.227 (1977). The regulatory standards for evaluating

fee applications set forth there provide that:

[i]n evaluating a request for approval of a fee

the following factors will be considered:

(1) The services performed (including

types of services);

(2) The complexity of the case;

(3) The level of skill and competence

required in rendition of the services;

(4) The amount of time spent on the case

to the nearest quarter hour;

(5) The level of administrative proceedings

to which the claim was carried and the level at

which the attorney entered the proceedings;

(6) The amounts of any fees or reimburse-

ment for expenses previously authorized, paid,

or requested; and

(7) Any other information or data which

may be relevant to the amount of fee requested.

20 C.F.R. §720.227(a).

The attorney fee application requested $3,000.00 for

41.25 hours of work, which is a rate of approximately

$73.00 per hour. The deputy commissioner disallowed

21.25 hours of the 41.25 hours which the attorney claimed

billing rate for each such person.” 20 C.F.R. §725.366(a). To

apply the provisions of the superseding reguiations in our

review would therefore hold the attorney to a standard which

did not exist when he filed his petition. We think that this would

be unjust, and inconsistent with the decisions in Treadway, supra;

Gray, supra.

30a

for work on this case, but did not specify which hours

were disallowed or why. The hourly rate was reduced

from the requested $73.00 to $50.00, but, again, no expla-

nation was given. Since there is no indication of the

factors on which the award was based, we are unable to

determine whether the award is reasonable and accords

with law. Bednarek, supra. We must therefore vacate the

deputy commissioner’s award and remand for issuance

of a new award. Upon remand, the deputy commissioner

must review the fee application according to the regula-

tory criteria at 20 C.F.R. §720.227(a) (1977).

Claimant’s attorney next argues, in effect, that

because he undertakes the risk of not getting paid at all

for his work on a black lung case, he should be allowed a

somewhat higher hourly rate for his work on successful

black lung cases than he would earn from other work.

Petition for Review, p. 1. We find this point well taken.

The regulations do not list the attorney’s risk of not

being paid as a factor to be considered in awarding a fee

for successful work. Nothing, however, prohibits consid-

eration of this risk, and we think that it should, in fact, be

considered as “other information” relevant to the amount

of the fee requested. See 20 C.F.R. §720.227(a)(7) (1977).

Such risk may justify a higher hourly rate than an attor-

ney would earn for work for which he is paid regardless

of the outcome. Cf. Lindy Bros. Builders, Inc. of Philadelphia

v. American Radiator & Standard Sanitary Corp., 487 F.2d

161 (3d Cir. 1973); Johnson v. Georgia Highway Express, Inc.,

488 F.2d 714 (5th Cir. 1974).

Although the Department of Labor has refused to

recognize contingency fees, 20 C.F.R. §720.226(b), it

3la

would be unrealistic for this Board to shut its eyes to the

fact that claimants’ counsel are paid only when their

clients are found entitled to benefits. In this context we

note with approval a statement from the Court of

Appeals for the Fourth Circuit that:

[t]he effective lawyer will not win all of his

cases, and any determination of the reasonable-

ness of his fees in those cases in which his client

prevails must take account of the lawyer’s risk

of receiving nothing for his services. Charges on

the basis of a minimal hourly rate are surely

inappropriate for a lawyer who has performed

creditably when payment of any fee is so uncer-

tain.

McKittrick v. Gardner, 378 F.2d 872, 875 (4th Cir. 1967).

McKittrick, we note, is a Social Security case which is in

no way binding upon the Board. We stress that our

approval of this case relates to policy considerations

applicable to both social Security and Department of

Labor evaluations of attorney’s fee applications. The

actual process of evaluation differs because Social Secu-

rity recognizes contingency fees based on a percentage of

benefits actually awarded, 42 U.S.C. §406(a), while we

now recognize the risk of loss under the Black Lung Act

as one factor of many in determining an appropriate

hourly rate.

We therefore hold that the deputy commissioner,

when fixing an hourly rate for an attorney’s fee, may

consider the attorney’s risk of going unpaid.

The deputy commissioner’s award is deficient in

another respect. The attorney requested $20.00 in

expenses for a report by Dr. Jerome F. Wiot which was

32a

submitted in connection with the claim. It is provided in

20 C.F.R. §720.227(b) that

[i]Jn awardeing [sic] a fee the appropriate adjudi-

cation officer shall consider and shall add

thereto the amount of reasonable and unreim-

bursed expenses incurred in establishing the

claimant’s case.

The deputy commissioner did not consider this request,

or award the stated amount. This issue should be dealt

with on remand.

We observe, however, that the fee application itself

does not comply with the aprlicable regulations. It is not

“on a form provided for this purpose by the Office... .”

20 C.F.R. §720.226(c). This application is on a United

States Department of Health, Education and Welfare

form, with the printed words “Social Security” and

“Social Security Administration” crossed out and

replaced by “Black Lung” and “U.S. Dept. of Labor.” In

addition, the attorney lumped together all of the services

rendered in this case on a given day and noted only a

daily total of time spent. A typical entry is the one for

September 21, 1976, which details a total of 2.5 hours

spent in

[rleview of Black Lung Law and Regulation

dealing with Black Lung claims before the

department of Labor; investigation into claim-

ant’s medical history and coal mine employ-

ment; discussions with claimant.

It is provided in 20 C.F.R. §720.226(c) that a fee applica-

tion “shall be supported by a complete itemized state-

ment describing the services rendered” and that the

toc ehh NaN es

33a

itemization shall contain “a description of services ren-

dered in any proceeding under the Act, with the amount

of time spent on each type of service.” (Emphasis added).

The fee request itemization does not conform with this

requirement.

An attorney fee award involves the valuation of the

attorney’s services. If the attorney does not report the

amount of time spent in each type of service, there is

insufficient information to support an award. Lindy Bros.

Builders, Inc., supra. The attorney ought to have listed

separately the time he spent in legal research, discussions

with claimant, and factual investigations, specifying for

instance his: telephone calls ‘to investigate employment

records of coal mine operators and to contact the claim-

ant’s co-workers from his coal mining years. We must

therefore vacate the fee award and remand for entry of a

new award upon proper application by the attorney. Phi-

llips v. Director, 10 BRBS 765, BRB No. 79-121 BLA (July

31, 1979). A copy of this application should be served on

the Director so that he has an opportunity to comment

upon it.

The record does not indicate whether the deputy

commissioner’s fee award was made a lien upon the

claimant’s benefits. No amount is withheld from the

Award of Benefits to cover an attorney’s fee. The hearing

officer, in the Decision and Order we have held to be null,

states only that “the payment of any attorney’s fee is the

Claimant’s obligation which may be made a lien upon

[his] benefits.” Decision and Order, p. 2.

The Director, however, as trustee of the Black Lung

Disability Trust Fund has recently conceded the Trust

34a

Fund’s liability for attorney fees in the instant case and 22

others in which no responsible coal mine operator has

been identified. See fn. 1, supra. Upon remand of the

instant case, therefore, the attorney’s fee petition should

be served on the Director for his comment, and the fee

awarded should be made an additional obligation of the

Trust Fund.

The attorney fee award of the deputy commissioner

is accordingly vacated, and the case is remanded to the

Office of the Deputy Commissioner for issuance of a new

attorney’s fee award, consistent with this decision, upon

proper application of the attorney under the provisions of

20 C.F.R. §720.226.

SO ORDERED.

Dated this 6th day of

February 1980

HAYES E. BROWNING

DIRECTOR, OFFICE OF

WORKERS’ COMPENSATION

PROGRAMS, UNITED STATES

DEPARTMENT OF LABOR

35a

Benefits Review Board

800 K Street N.W.

Washington, D.C. 20001-8001

[SEAL]

BRB No. 92-1144 BLA

OWCP No. 232-16-3250

Claimant-Respondent

V.

Jan. 25, 1994

DATE ISSUED:

Petitioner ORDER

eee eee eee eee eo

Appeal of the Decision and Order of G. Marvin

Bober, Administrative Law Judge, United States

Department of Labor.

Ray E. Ratliff, Jr., Charleston, West Virginia, for

claimant.

Edward Waldman (Thomas S. Williamson, Jr.,

Solicitor of Labor; Donald S. Shire, Associate

Solicitor; Rae Ellen Frank James, Deputy Associ-

ate Solicitor; Richard A. Seid and Michael J.

Rutledge, Counsel for Administrative Litigation

and Legal Advice), Washington, D.C., for the

Director, Office of Workers’ Compensation Pro-

grams, the United States Department of Labor.

DECISION and

36a

Before: DOLDER, Chief Administrative Appeals

Judge, McGRANERY, Administrative appeals

Judge, and SHEA, Administrative Law Judge.*

PER CURIAM:

The Director, Office of Workers’ Compensation Pro-

grams (the Director), appeals the Supplemental Decision

and Order and the Order Denying Motion for Recon-

sideration (84-BLA-3605) of Administrative Law Judge G.

Marvin Bober awarding attorney’s fees on a claim filed

pursuant to the provisions of Title IV of the Federal Coal

Mine Health and Safety Act of 1969, as amended, 30

U.S.C. §901 et seq. (the Act). The administrative law judge

awarded counsel a total of $4,995 for 27.75 hours of legal

services at the rate of $180 per hour. Supplemental Deci-

sion and Order at 4.

In his Order Denying Motion for Reconsideration, the

administrative law judge found that the Director’s

Motion for Reconsideration was untimely filed. Order at

p.2 (unpaginated). Considering the merits alternatively,

the administrative law judge again found the hourly rate

of $180 appropriate. Order at p.3 (unpaginated).

On appeal, the Director contends that the Board has

jurisdiction to hear this appeal inasmuch as his Motion

for Reconsideration was timely filed and, therefore, his

Notice of Appeal to the Board was timely filed.! Direc-

tor’s Brief at 6-8. The Director asserts that the administra-

tive law judge’s findings on reconsideration are properly

* Sitting as a temporary Board member by designation pur-

suant to the Longshore and Harbor Workers’ Compensation Act

as amended in 1984, 33 U.S.C. §921(b)(5)(1988).

1 The Board issued an order dated December 9, 1993, stat-

ing that the Director’s Motion for Reconsideration and Notice of

37a

before the Board. Director’s Brief at 8-10. The Director

also contends that the administrative law judge failed to

comply with the Administrative Procedure Act (APA),

Director’s Brief at 11-12, and erroneously relied upon The

1990 Survey of Law Firm Economics, Altman & Weil, Inc.

(1990) [hereinafter 1990 Survey], Director’s Brief at 12-15.

Claimant’s counsel has filed a response brief,2 and the

Director has filed a reply brief.?

Appeal to the Board were timely filed. Order at p.2. (unpagi-

nated).

* In his response brief, counsel requests a five percent inter-

est enhancement and asserts that he may raise this issue without

filing a cross-appeal, citing Dalle Tezze v. Director, OWCP, 814

F.2d 129, 10 BLR 2-62 (3d Cir. 1987). Claimant’s Brief at 7-8.

Counsel is incorrect in stating that he may raise this issue in a

response brief inasmuch as cross-appeals are required where, as

in this case, the prevailing party seeks to alter or amend the final

order below. See Dalle Tezze, supra; King v. Tennessee Consolidated

Coal Co., 6 BLR 1-87 (1983); see also Whiteman v. Boyle Land and

Fuel Co., 15 BLR 1-11 (1991) (en banc). Nonetheless, we note that

the regulations prohibit the payment of interest by the Black

Lung Disability Trust Fund on attorney’s fees. See 20 C.ER.

§725.608(d); Bennett v. Director, OWCP, 17 BLR 1-72 (1992); see

also Library of Congress v. Shaw, 478 U.S. 310 (1986); Greene v.

Director, OWCP, 889 F.2d 794, 13 BLR 2-150 (8th Cir. 1989),

amended, 892 F.2d 1385 (8th Cir. 1990).

* The Director asserts in his reply brief that City of Bur-

lington v. Dague, 112 S.Ct. 2638 (1992) prohibits the risk of loss

being considered when determining a reasonable hourly rate.

Director’s Reply Brief at 2-3. The Dague case is distinguishable

inasmuch as it holds that fee enhancement through use of a

contingency multiplier is not permitted under the fee-shifting

statutes of the Solid Waste Disposal Act and the Clean Water

Act. Dague, 112 S.Ct. at 2643-44.

We affirm the administrative law judge’s findings regarding

the number of hours for legal services as unchallenged on

38a

The award of attorney’s fees pursuant to Section 28

of the Longshore and Harbor Workers’ Compensation

Act, 33 U.S.C. §928, as incorporated into the Act by 30

U.S.C. §932(a), is discretionary and will be sustained on

appeal unless shown by the challenging party to be arbi-

trary, capricious, an abuse of discretion, or not in accor-

dance with law. Abbott v. Director, OWCP, 13 BLR 1-15

(1989), citing Marcum v. Director, OWCP, 2 BLR 1-894

(1980). Marcum requires a two-tier analysis; the adminis-

trative law judge must first determine whether the ser-

vice was necessary to the proper conduct of the case, then

he must decide whether the time expended performing

the service was excessive or unreasonable. Lanning v.

Director, OWCP, 7 BLR 1-314, 1-316 (1984).

The Director contends that the administrative law

judge failed to explain fully, in accordance with the APA,

his rationale for awarding claimant’s counsel an hourly

rate of $180. Director’s Brief at 11-12. The Director also

contends that the administrative law judge erroneously

relied upon the 1990 Survey to determine the appropriate

hourly rate for legal services rendered prior to 1990.

Director’s Brief at 12-15.

The Administrative law judge stated that the $250

hourly rate seemed unreasonable in view of the estab-

lished criteria outlined in Section 725.366(b). Supplemen-

tal Decision and Order at 3-4. In a footnote, the

administrative law judge took judicial notice of the 1990

Survey. Supplemental Decision and Order at 4 n.2. In his

appeal. See Coen v. Director, OWCP, 7 BLR 1-30 (1984); Skrack v.

Island Creek Coal Co., 6 BLR 1-710 (1983).

39a

Order Denying Motion for Reconsideration, the adminis-

trative law judge stated that he used the information in

the 1990 Survey “in conjunction with all of the other

mentioned factors to determine the appropriate hourly

rate. ...%” Order at 3.

\

Although the administrative law judge did not fully

set forth the grounds for his reduction of counsel’s

requested hourly rate from $250 to $180, he did consider

all the factors listed in Section 725.366(b), see Blankenship

v. Schweiker, 676 F.2d 116 (4th Cir. 1982); see also Gillman v.

Director, OWCP, 9 BLR 1-7, 1-9 (1986), and, therefore,

provided an adequate rationale, as required by the APA,

see 5 U.S.C. §557(c)(3)(A), as incorporated into the Act by

30 U.S.C. §932(a) by means of 33 U.S.C. §919(d) and 5

U.S.C. §554(c)(2); McGinnis v. Freeman United Coal Mining

Co., 10 BLR 1-4 (1987); see also Wojtowicz v. Duquesne Light

Co., 12 BLR 1-162 (1989); Tenney v. Badger Coal Co., 7 BLR

1-589, 1-591 (1984).

Additionally, as the administrative law judge

explained, he did not rely on the 1990 Survey, as the

Director contends, but simply noted the survey’s figures

in considering a reasonable hourly rate. Order at p.2

(unpaginated). Therefore, we affirm the administrative

law judge’s findings regarding the hourly rate inasmuch

as they are neither arbitrary nor capricious. See Abbott,

supra, citing Marcum, supra; Broyles v. Director, OWCP, 974

F.2d 508, 17 BLR 2-1 (4th Cir. 1992); Blankenship, supra;

Gillman, supra; see also U.S. Dept. of Labor v. Triplett, 110

S.Ct. 1428, 13 BLR 2-364 (1990); Craig v. Secretary, Dept. of

Health & Human Services, 864 F.2d 324 (4th Cir. 1989).

40a

Accordingly, the administrative law judge’s Supple-

mental Decision and Order and Order Denying Motion

for Reconsideration are affirmed.

SO ORDERED.

/s/ Nancy S. Dolder

NANCY S. DOLDER,

Acting Chief Administrative

Appeals Judge

/s/ Regina C. McGranery

REGINA C. MCGRANERY

Administrative Appeals Judge

/s/ Robert J. Shea

ROBERT J. SHEA

Administrative Law Judge