IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
JAMES J. FLANAGAN STEVEDORES, INCORPORATED;
SIGNAL MUTUAL INDEMNITY ASSOCIATION, LIMITED,
JOHN C. GALLAGHER; DIRECTOR, OFFICE OF WORKER'S
PROGRAMS, U.S. DEPARTMENT OF LABOR,
Petition for Review of an Order of the Benefits
July 14, 2000
Before REYNALDO G. GARZA, HIGGINBOTHAM, and
BENAVIDES, Circuit Judges.
BENAVIDES, Circuit Judge.
James J. Flanagan Stevedores, Incorporated
(employer), and Signal Mutual Indemnity Association, Limited,(1)
petition for review of a final order of the Benefits Review Board (BRB)
affirming an order by an administrative law judge (ALJ) awarding additional
benefits to John C. Gallagher (Gallagher) pursuant to the Longshore and
Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. § 901 et seq.
(1994). The issues on appeal are Gallagher's entitlement to two periods
of temporary partial disability benefits, the proper calculation of Gallagher's
weekly wage used in determining the disability award, the award of attorney's
fees, and the imposition of a penalty under 33 U.S.C. § 914. Finding
no error, we deny the petition for review.
I. FACTUAL AND PROCEDURAL HISTORY
Gallagher is a longshoreman who worked intermittently
on the waterfront since 1959, and continuously since 1973. On January 20,
1995, while performing his duties as a longshoreman, he fell when he began
to climb a ladder. He sustained injuries to his left foot, back, and neck.
After receiving treatment at a hospital emergency room, Gallagher sought
further treatment from an orthopedic surgeon, who released him to return
to work on February 21, 1995. Meanwhile, the employer had begun voluntarily
paying compensation benefits to Gallagher on January 31, 1995. Those payments
were suspended when Gallagher was released to work.
Gallagher resumed working as a longshoreman.
On June 27, 1995, Gallagher sought treatment from another surgeon, Dr.
Swann, who immediately instructed Gallagher to stop working. A few days
later, Dr. Swann performed surgery on Gallagher's heel to repair a ruptured
Achilles tendon. Gallagher then began a regimen of physical therapy.
Gallagher filed a claim for compensation on
August 22, 1995, and the employer again paid compensation benefits to him
until he was released to light duty work on August 27, 1996. In November
of 1996, Gallagher sought the care of another orthopedic surgeon, who provided
him with a brace.
On December 6, 1996, the District Director
of the Department of Labor held an informal conference. According to the
employer, the following issues were discussed but not resolved at the informal
conference: "average weekly wage, temporary total disability, and medical
management." It is undisputed that there was a recommendation made by the
District Director's office.
On February 14, 1997, while working, Gallagher's
ankle "rolled over," causing him to fall. After that accident, Gallagher
never again attempted to work as a longshoreman.(2)
A hearing was held before an ALJ on October
6, 1997, at which time the employer stipulated to all contested issues
except Gallagher's entitlement to both temporary partial and temporary
total disability benefits during two periods of time,(3)
the amount of Gallagher's weekly wage, penalties under 33 U.S.C. §
914(e), and interest under 28 U.S.C. § 1961. On February 18, 1998,
the ALJ issued a decision and order finding that Gallagher had a 17.5 percent
partial disability in his left foot and awarding him compensation for a
temporary partial disability for the two disputed periods of time based
upon an average weekly wage of $929.29 and a residual earning capacity
of $346.75.(4) Additionally, the ALJ awarded
Gallagher a penalty for late payment of benefits due under 33 U.S.C. §
914(e). In September of 1998, the ALJ entered a supplemental decision awarding
attorney's fees to Gallagher's counsel. The employer filed an emergency
motion to produce or preserve evidence of counsel's billing records, which
the ALJ denied. The employer appealed the ALJ's decisions and orders to
the BRB, which affirmed the award.(5) The
employer now petitions this Court for review.
A. Substantial Evidence
Our review of BRB decisions is limited to
considering errors of law and whether the BRB properly concluded that the
ALJ's factual findings were supported by substantial evidence on the record
as a whole. See Darby v. Ingalls Shipbuilding, Inc., 99 F.3d 685,
688 (5th Cir. 1996); see also 20 C.F.R. § 802.301(a) (setting
forth BRB's scope of review of ALJ's decision). "Substantial evidence is
that relevant evidence--more than a scintilla but less than a preponderance--that
would cause a reasonable person to accept the fact finding." Director,
OWCP v. Ingalls Shipbuilding, Inc., 125 F.3d 303, 305 (5th Cir. 1997).
The employer argues that the ALJ's finding
that Gallagher was entitled to temporary partial disability benefits during
the two specified periods of time is not supported by substantial evidence
because the ALJ failed to discuss and consider(6)
much of the relevant evidence in violation 5 U.S.C. § 557(c)(3)(A)
of the Administrative Procedures Act, which provides, in relevant part,
All decisions . . . are a part of the record
and shall include a statement of--
(A) findings and conclusions, and the reasons
or basis therefor, on all the material issues of fact, law, or discretion
presented on the record . . . .
This Court has declined to adopt the rule
followed in the Third Circuit(7) "that an
ALJ must articulate specifically the evidence that supported his decision
and discuss the evidence that was rejected." Falco v. Shalala, 27
F.3d 160, 163 (5th Cir. 1994).(8)
The employer challenges the ALJ's acceptance
of Gallagher's testimony that the work he performed during the two periods
of time was all that he was capable of doing. However, the ALJ is a fact
finder and is entitled to weigh all credibility inferences. Avondale
Shipyards, Inc. v. Kennel, 914 F.2d 88, 91 (5th Cir. 1990). When reviewing
this determination, we must be mindful not to substitute our judgment for
that of the ALJ, "nor may we reweigh or reappraise the evidence, instead
we inquire whether there was evidence supporting the ALJ's factual findings."
Boland Marine & Manufacturing Co. v. Rihner, 41 F.3d 997, 1002
(5th Cir. 1995) (citation and internal quotation marks omitted).(9)
In regard to the first disputed period of
temporary partial disability, the ALJ considered the medical evidence and
found that Dr. Snook, the physician who released Gallagher to work, "either
mis-diagnosed [Gallagher's] condition or the condition greatly worsened
with [his] efforts to work between February 20, 1995, and June 27, 1995."
There is substantial evidence to support this finding in that on June 27,
1995, when Gallagher sought treatment from another surgeon, Dr. Swann,
he was immediately advised to stop working because surgery was needed to
repair a severed Achilles tendon.
In regard to the second disputed period of
temporary partial disability, although Dr. Swann released Gallagher to
work on August 27, 1996, the ALJ credited Gallagher's continued complaints
of pain after that date. The ALJ expressly recognized that another physician,
Dr. Wilk, found Gallagher "to be restricted in his activities and felt
that if he persisted on longshoring he should take no jobs that required
him to be on his feet for long periods." Additionally, Dr. Wilk equipped
Gallagher with an air brace. Dr. Wilk also found that Gallagher's ankle
was not at maximum medical improvement until January of 1997. We are satisfied
that there is substantial evidence in the record to support the ALJ's finding
that Gallagher was temporarily partially disabled during the two periods
of time in question.
The employer next argues that the ALJ erred
by including a container royalty benefit (CRB)(10)
distribution as part of the calculation of Gallagher's average weekly wage
pursuant to 33 U.S.C. § 902(13). Section 902(13) provides as follows:
The term "wages" means the money rate at which
the service rendered by an employee is compensated by an employer under
the contract of hiring in force at the time of the injury, including the
reasonable value of any advantage which is received from the employer and
included for purposes of any withholding of tax under subtitle C of the
Internal Revenue Code of 1954 . . . . The term wages does not include fringe
benefits, including (but not limited to) employer payments for or contributions
to a retirement, pension, health and welfare, life insurance, training,
social security or other employee or dependent benefit plan for the employee's
or dependent's benefit, or any other employee's dependent entitlement.
As the employer acknowledges, the Fourth Circuit
has held that CRB payments are wages under § 902(13) if earned through
work but not if earned by disability credit. Universal Maritime Service
Corp. v. Wright, 155 F.3d 311 (4th Cir. 1998).(11)
Our research indicates that this Court has yet to address this issue; however,
we recently had the occasion to interpret the meaning of "wages" under
§ 902(13) in a different context. See H.B. Zachry Company v. Quinones,
206 F.3d 474 (5th Cir. 2000). In Quinones, the question was
whether the value of meals and lodging which was exempt from withholding
of federal income tax constituted "wages" under § 902(13) of the LHWCA.
We rejected the argument that "any advantage" received from the employer
is included as wages because that would render the phrase "and included
for purposes of any withholding of tax" superfluous. We concluded that
§ 902(13) was clear on its face inasmuch as "[i]t provides that `wages'
equals monetary compensation plus taxable advantages." Therefore, we held
that § 902(13) excluded from its definition of "wages" the value of
tax-exempt meals and lodging. Id. at 479. The rule we glean from
to apply here is that for a CRB to constitute a wage, it must be considered
either monetary compensation or a taxable advantage. Ultimately, we conclude
that a CRB is a wage.
The employer argues that a CRB is a fringe
benefit and thus does not constitute a wage under § 902(13). As set
forth in the statute itself, the term "wages" does not include fringe benefits,
including (but not limited to) employer payments for or contributions to
a retirement, pension, health and welfare, life insurance, training, social
security or other employee or dependent benefit plan for the employee's
or dependent's benefit, or any other employee's dependent entitlement.
§ 902(13). In Universal, the Fourth Circuit determined that
the "bare language" of the statute was ambiguous as to where "wages" end
and "fringe benefits" begin:
If we were to read "fringe benefits" to mean
all benefits given to an employee in addition to regular monetary pay,
"wages" would necessarily be defined to exclude all nonmonetary compensation.
This would make Congress's use of the phrase "reasonable value of any advantage"
155 F.3d at 320. The Fourth Circuit
then addressed the legislative history and concluded that "wages" include
"any advantage" that is not "too speculative to be readily converted into
a cash equivalent." Id. at 321.
The Court noted that by 1981, the BRB had
consistently interpreted "wages" as including "advantages" when the advantage's
value to the employee was readily identifiable and calculable. Id.
was aware of this broad interpretation of "advantages" when it introduced
bills to amend Section 902(13) in 1981. Instead of narrowing the definition
of advantages, Congress broadened the illustration of "advantages" encompassed
by the statutory definition by including "any advantage" received from
an employer which requires employment tax withholding. Id. at 322.
Before the bill could pass both the House and the Senate, the Supreme Court
addressed the meaning of the language of the original § 902(13), which
defined wages as including the "value of board, rent, housing, lodging,
or similar advantage received from the employer." Morrison-Knudsen Construction
Co. v. Director, OWCP, 461 U.S. 624 (1983). The Supreme Court concluded
that as benefits received from pensions or health and welfare plans are
not "similar advantages" to board and rent, in that they are not "benefits
with a present value that can be readily converted into a cash equivalent
on the basis of their market values." Id. at 630. In so concluding,
the Supreme Court reaffirmed the settled rule that benefits which are too
speculative to be readily converted into a cash equivalent are excluded
from the Act's definition of wages. After Morrison-Knudsen was decided,
Congress passed the afore-mentioned bills without significant change to
the definition of "wages." As the Fourth Circuit recognized, Congress likewise
was reaffirming the settled rule that while "wages" can include more than
regular monetary pay, "fringe benefits" refers only to a class of fringe
benefits whose value is too speculative to be readily converted into a
cash equivalent. Id. at 324. In conclusion, the Fourth Circuit interpreted
§ 902(13) as defining "wages" as compensation paid by an employer
for services rendered by an employee, the value of which may be readily
converted into a cash equivalent. Finding the Fourth Circuit's thoughtful
analysis persuasive, we adopt their definitions of "wages" and "fringe
benefits." Accordingly, as a CRB is paid in dollars and cents, and, thus,
its value is apparent on its face, a CRB is not a fringe benefit
under § 902(13).
Nevertheless, the employer argues that a CRB
is not a wage because it is a payment for services not rendered.
Moreover, argues the employer, the Port of Corpus Christi, where Gallagher
worked as a longshoreman, "has very little, if any, container traffic."
Because Gallagher has not lost work as a result of containerization, he
receives a windfall in the form of a CRB distribution check annually. The
employer contends that this was not the original purpose of the trust fund.
Of course, the precise issue before us is
not whether the original purpose of the container royalty trust fund has
been thwarted, but, rather, whether a CRB falls within the definition of
wages under § 902(13). The employer in the Fourth Circuit case raised
a similar contention, i.e., that the CRB payments must reflect a
fixed rate of pay in order for them to be compensation for services. 155
F.3d at 325. There, the Court recognized that the local contract specified
that the container royalty fund was to be used only for cash disbursements
to longshoremen and that traditionally the trustees had paid royalties
to those who worked 700 or more hours in the contract year. Id.
at 325. Relying on the hours-worked requirement, the court reasoned that
"[i]f these payments are paid for services, regardless of the quantity
of services, they meet the first requirement." Id.
Similarly, in the instant case, the agreement
that created the royalty trust fund provides that it was created to receive
contributions from employers and to administer, accumulate and/or distribute
such contributions in accordance with specific provisions. The trust agreement
further specifies that an employee must work a certain number of hours
per year to receive such payments. Thus, Gallagher had to work a certain
number of hours to be eligible to receive the CRB payments. In other words,
pursuant to the terms of the contract, Gallagher was paid for his services.(12)
To reiterate, § 902(13) defines wages, in part, as "the money rate
at which the service rendered by an employee is compensated by an employer
under the contract of hiring in force at the time of the injury, including
the reasonable value of any advantage which is received from the employer
and included for purposes of any withholding of tax . . . ." Here, the
employer(13) paid Gallagher a CRB pursuant
to the contract of hiring at the time of his injury. Thus, we are persuaded
that the ALJ properly included a CRB as a wage in the calculation of Gallagher's
average weekly wage.
C. Calculation of Average Wage under 33 U.S.C.
The ALJ calculated Gallagher's average weekly
wage pursuant to § 910(c), which provides that average annual earnings
shall be determined with "regard to the previous earnings of the injured
employee in the employment in which he was working at the time of the injury
. . ., [and] shall reasonably represent the annual earning capacity of
the injured employee." We have recognized that the main objective of §
910(c) "is to arrive at a sum that reasonably represents a claimant's annual
earning capacity at the time of the injury." Empire United Stevedores
v. Gatlin, 936 F.2d 819, 923 (5th Cir. 1991) (citation and internal
quotation marks omitted).
To determine Gallagher's average weekly wage,
the ALJ added the following amounts from 1994 (the year prior to his injury):
$35,761.66 (gross earnings); $707.56 (vacation pay); and $8,136.85 (CRB
distribution). The sum total is $44,606.07. The ALJ then divided Gallagher's
$44,606.07 by 48 weeks, instead of by 52 weeks.
The employer argues that using the number
48 as a divisor violated the mandate of § 910(d)(1). Section 910(d)(1)
provides that the "average weekly wages of an employee shall be one fifty-second
part of his average annual earnings." The ALJ chose the number 48 as a
divisor because Gallagher had allegedly lost 4 weeks of work in 1994 due
to a previous injury.
Gallagher responds that, at most, this is
harmless error. To be technically correct, Gallagher asserts, the ALJ could
have divided the above sum total ($44,606.07) by 48 and obtained a weekly
average ($929.29), taken that figure and added four more weeks' worth of
wages (4 X $929.29 = $3,717.17) to the original sum total ($3,717.17 +
$44,606.07 = $48,323.24), and finally, divided the revised total by the
statutorily mandated divisor of 52 ($48,323.24 ÷ 52 = $929.29).
Obviously, this calculation results in the same average weekly wage as
the original calculation.
We do not read the employer's argument as
challenging the factual finding that Gallagher lost four works of week
in 1994 due to a previous injury. In light of the discretion given the
ALJ under § 910(c),(14) we believe
that the ALJ's decision to carve out the four-week period of lost work
facilitated the goal of "mak[ing] a fair and accurate assessment" of the
amount that Gallagher "would have the potential and opportunity of earning
absent the injury." Gatlin, 936 F.2d at 823. As such, we are persuaded
by Gallagher's argument that the apparent violation of § 910(d)(1)
D. Attorney's Fees
1. 33 U.S.C. § 928(b)
"An award of attorney's fees by the BRB is
reversed only if it is arbitrary, capricious, an abuse of discretion, or
not in accordance with law." H.B. Zachry Co. v. Jose B. Quinones,
206 F.3d 474, 481 (5th Cir. 2000). Section 928(b) prescribes when attorney's
fees may be awarded in the context of an employee's successful prosecution
for additional compensation.(15) The employer
argues that the ALJ erred in awarding attorney's fees because the prerequisites
outlined in 33 U.S.C. § 928(b) were not satisfied. Section 928(b)
of the "LHWCA provides for an award of attorney's fees when the employer
tenders partial compensation but refuses to pay the total amount claimed
by the claimant, and the claimant uses the services of an attorney to successfully
recover the total amount claimed." Boland Marine & Manufacturing
Co. v. Rihner, 41 F.3d 997, 1006 (5th Cir. 1995) (citation and internal
quotation marks omitted). We have recognized that an award of attorney's
fees under § 928(b) "is appropriate only if the dispute has been the
subject of an informal conference with the Department of Labor." FMC
Corporation v. Perez, 128 F.3d 908, 910 (5th Cir. 1997). More specifically,
an employee may be awarded attorney's fees under § 928(b) "if, after
an informal conference the employer rejects the recommendations of the
Board or commissioner; the employer tenders an amount in lieu of the recommendation;
the employee rejects the amount tendered by the employer; the employee
hires an attorney; and the employee obtains an amount greater than the
amount tendered." Id. at 909-911.
The employer concedes, as it must, that there
was an informal conference but contends that the conference was not held
with respect to the issues that were ultimately tried before the ALJ. During
the administrative proceedings, the employer and Gallagher jointly stipulated
that an informal conference was held on December 6, 1996. The employer's
unsupported assertion does not overcome the force of the joint stipulation
with its implicit yet obvious implication that the informal conference
involved one or more of the disputed issues before the ALJ. Moreover, the
employer further concedes that the following issues were discussed during
the informal conference but not resolved: "average weekly wage, temporary
total disability, and medical management."(16)
Of course, Gallagher's average weekly wage was one of the disputed issues
at the hearing before the ALJ.
Additionally, the employer acknowledges that
there was a recommendation issued after the informal conference. The employer
asserts, however, that the recommendation, which was complied with, was
for the employer to reinstate temporary total disability benefits. Thus,
the employer contends, there was no rejection as required under
section 928(b). Although the record indicates that the employer did, in
fact, reinstate the payment of temporary total disability benefits, the
employer offers no record evidence with respect to the substance of the
recommendation.(17) In any event, the record
does establish that at least the following unresolved issues remained after
the informal conference: (1) Gallagher's average weekly wage rate; and
(2) Gallagher's entitlement to temporary partial disability benefits from
February 21, 1995, to June 26, 1995, and from August 27, 1996, to February
14, 1997. After presiding over a hearing on these issues, the ALJ ordered
the employer to, among other things, pay Gallagher temporary partial disability
benefits for the periods in dispute. In other words, after an informal
conference and a recommendation, Gallagher used the services of an attorney
to successfully recover an award of additional compensation. Under these
particular circumstances, we find that the employer has failed to demonstrate
that the ALJ erred in finding the conditions of § 928(b) satisfied.(18)
Accordingly, we conclude that the employer has not shown that the awarding
of attorney's fees constituted an abuse of discretion or was not in accordance
with the law.
The employer further asserts that the ALJ's
determination of the attorney's hours, fee rate, and expenses used in calculating
the award were unreasonable. In support of this assertion, the employer
refers us to previously filed briefs, presumably before the ALJ and BRB.
By failing to include these arguments in the body of their brief, the employer,
in effect, has abandoned them. Yohey v. Collins, 985 F.2d 222, 224-225
(5th Cir. 1993); see also Fed. R. App. P. 28(a)(9) (requiring the
argument section of the appellant's brief to contain "contentions and the
reasons for them, with citations to the authorities and parts of the record
. . . .").(19)
The employer's final argument is that the
ALJ clearly erred in finding that it was liable for penalties under 33
U.S.C. § 914. Section 914(e)(20) provides
that when an installment of compensation is not paid within 14 days of
when it is due, a 10 percent penalty will be added unless an employer files
a notice that it controverts the employee's right to compensation pursuant
to the terms of section 914(d).(21) Section
914(d) provides that:
If the employer controverts the right to compensation
he shall file with the deputy commissioner on or before the fourteenth
day after he has knowledge of the alleged injury or death, a notice, in
accordance with a form prescribed by the Secretary, stating that the right
to compensation is controverted, the name of the claimant, the name of
the employer, the date of the alleged injury or death, and the grounds
upon which the right to compensation is controverted.
In his decision and order, the ALJ expressly
recognized that the parties had stipulated that the employer filed a "notice
of controversion" on August 22, 1995. The employer now argues that the
ALJ clearly erred when he failed to recognize that the employer filed an
earlier notice of controversion on February 22, 1995. This argument
fails in light of certain stipulations that the parties made during the
proceedings before the ALJ. In a joint exhibit, the parties stipulated
that, among other things, (1) "the Employer was notified or had knowledge
of the injury [on] January 20, 1995;" and a (2) "Notice of Controversion
(LS-207) was filed on August 22, 1995." Under the stipulated facts, the
employer clearly failed to file a notice that it controverted compensation
within 14 days of having notice of Gallagher's injury, rendering the imposition
of penalties under § 914(e) appropriate. The employer does not
argue that the ALJ's conclusion is wrong based on the stipulated facts--but
rather argues that the ALJ either "disregarded" or "overlooked" the evidence.
The employer is bound by its stipulations. See Deffenbaugh-Williams
v. Wal-Mart Stores, Inc., 188 F.3d 278, 281 n.1 (5th Cir. 1999).
The employer nevertheless asserts that the
LS-208 form(22) it filed on February 22,
1995 satisfied the notice of controversion requirement under section 914.
In response, Gallagher asserts that the employer did not raise this particular
argument before the BRB. Our review of the record indicates that Gallagher
is correct, and the employer did not file a reply brief informing us otherwise.
We therefore may not consider it. See Ingalls Shipbuiding v.
Director, OWCP, 976 F.2d 934, 938 (5th Cir. 1992) (rejecting employer's
argument that another form was the equivalent of a "notice of controversion"
because the employer failed to present that argument in the administrative
proceedings). As such, the employer has failed to show that the ALJ erred
in finding it liable for penalties and interest under § 914.
For the above reasons, the petition for review
1. For ease of reference,
the petitioners collectively will be referred to as employer throughout
2. Gallagher subsequently
entered a Department of Labor retraining program at a community college.
3. Those periods are from
February 21, 1995, to June 26, 1995, and from August 27, 1996, to February
4. Also, due to other injuries,
the ALJ found that Gallagher remained temporarily totally disabled for
various periods of time. The temporary total disability compensation benefits
were also based on the average weekly wage of $929.29 found by the ALJ.
5. The BRB affirmed the
ALJ's decision and order awarding benefits in all respects and affirmed
the award of attorney's fees in all respects except with regard to the
award of expenses, which was vacated and remanded to the ALJ for further
6. We note that, in the
instant case, the ALJ expressly stated that his decision was based on "the
7. See Cotter v. Harris,
642 F.2d 700, 705 (3rd Cir. 1981).
8. Falco involved
a challenge to an ALJ's failure to make and articulate credibility findings
regarding a social security claimant's subjective complaints of pain. We
found the Third Circuit's rigid approach unnecessary, explaining that this
Circuit had its own strictures. For example, we require an ALJ to articulate
reasons for rejecting a claimant's subjective complaints of pain when the
evidence clearly favors the claimant. Id.
9. The employer also argues
that the ALJ failed to give due consideration to the testimony of Peter
Duffy (Duffy), an expert witness on the subject of stevedore jobs available
at the Port of Corpus Christi. An ALJ may "accept any part of an expert's
testimony; he may reject it completely." Kennel, 914 F.2d at 91.
Here, the ALJ expressly considered Duffy's testimony:
Peter Duffy testified for [the] Employer.
He stated that he worked as a longshoreman for 30 years and in his opinion
there was work available to [Gallagher] which he was capable of performing.
Mr. Duffy pointed out that grain boats are loaded by spouts and while this
is occurring the gangs do very little if any physical work. Mr. Polinard
was called in rebuttal to explain there was more to the task of loading
a grain boat than Mr. Duffy described.
The ALJ clearly considered Duffy's testimony;
however, he reasonably concluded that the testimony of Polinard, a working
longshoreman, rebutted Duffy's testimony.
10. The container royalty
trust fund was established to pay longshoremen for work that historically
had been done by them. Payments from that fund are called CRB's. More specifically,
such payments are compensation paid by shipping companies in lieu of work
lost by longshoremen due to the technological innovation of "containerized
cargo." Universal Maritime Corp. v. Wright, 155 F.3d 311, 315-16
(4th Cir. 1998). A CRB distribution is paid annually and based on the employee's
seniority and hours worked that year.
11. Cf. NYSA-ILA Container
Royalty Fund v. Commissioner of Internal Revenue Service, 847 F.2d
50, 52-53 (2nd Cir. 1988) (holding that payments to longshoreman from a
containerization fund were wages within the meaning of FICA and FUTA);
STA of Baltimore--ILA Container Royalty Fund v. U.S., 621 F.Supp.
1567 (D.Md. 1985)(holding that CRB distributions are wages under 26 U.S.C.
§ 3121, which defines wages as all remuneration for any service, because
a longshoreman is not eligible for the payments until he had worked the
requisite number of hours), aff'd, 804 F.2d 296 (4th Cir. 1986).
12. At oral argument,
the employer stated that there are exceptions to the hours-worked requirement,
such as when an employee is disabled. However, there is no contention that
Gallagher failed to work the amount of hours needed for the relevant year(s).
We therefore do not express our opinion with respect to whether a CRB payment
would constitute a wage if the employee had not earned the payment from
13. Although the trustees
of the royalty fund actually distribute the payments, the employers endow
the royalty trust fund, and, thus, the employers are the source of the
CRB payments. See Universal Maritime Service Corporation, 155 F.3d
at 326 (explaining that "the true source of the payment is the employer").
14. Gatlin, 936
F.2d at 823.
15. Section 928(b) provides
If the employer or carrier pays or tenders
payment of compensation without an award pursuant to section 914(a) and
(b) of this title, 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 commissioner 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 reasonable attorney's fee based
solely upon the difference between the amount awarded and the amount tendered
or paid shall be awarded in addition to the amount of compensation. . .
. If the claimant is successful in review proceedings before the Board
or court in any such case an award may be made in favor of the claimant
and against the employer or carrier for a reasonable attorney's fee for
claimant's counsel in accord with the above provisions. In all other cases
any claim for legal services shall not be assessed against the employer
16. The only reference
we found with respect to the subject matter of the informal conference
was made during the hearing before the ALJ. The employer's attorney on
the record stated that the "topic of that informal conference . . . was
the exam that the [Department of Labor] had ordered from Dr. Christensen."
The ALJ then stated on the record as follows:
Just so the record understands what we're
talking about, the district director had ordered an IME a couple of weeks
before this hearing here today and the claimant felt like he didn't have
to go and he did not go and there was a dispute about it. But now that
dispute has been resolved by agreement among the counsel that he's going
to have an [examination] post hearing here in Corpus Christi.
17. There was a LS-206
form filed indicating that the employer reinstated the total temporary
disability payments but we have found no indication that it was pursuant
to a recommendation after the informal conference. The conference was held
on December 6, 1996, and the LS-206 form is dated April 21, 1997.
18. Although acknowledging
that an initial reading of the language of § 928(b) supports the proposition
that a written recommendation is required and that such recommendation
be refused before an employer or carrier may be liable for attorney's fees,
we note that the Ninth Circuit has indicated otherwise. See National
Steel & Shipbuilding Co. v. United States Dept. of Labor, 606 F.2d
875, 882 (9th Cir. 1979) (explaining that a claimant is entitled to attorney's
fees if the extent of liability is controverted and the claimant successfully
obtains additional compensation regardless whether the employer rejects
the administrative recommendation);
Matulic v. Director, Office of Workers
Compensation Programs, 154 F.3d 1052, 1061 (9th Cir. 1998) (same).
In the instant case, we express no opinion as to whether we agree with
the Ninth Circuit's interpretation of the requirements of § 928(b)
inasmuch as the employer has failed to offer (and we to find) any record
evidence supporting their allegations regarding the substance of the recommendation.
19. The employer further
contends that the ALJ erred in denying its motion to produce or preserve
evidence with respect to Gallagher's attorney's billing and time records.
Because the employer has abandoned the argument regarding the reasonableness
of the attorney's fees award, we need not reach this contention.
20. Section 914(e) states:
If any installment of compensation payable
without an award is not paid within fourteen days after it becomes due,
as provided in subdivision (b) of this section, there shall be added to
such unpaid installment an amount equal to 10 per centum thereof, which
shall be paid at the same time as, but in addition to, such installment,
unless notice is filed under subdivision (d) of this section, or unless
such nonpayment is excused by the deputy commissioner . . . .
21. The employer also
argues that the ALJ erred in awarding "interest under § 914(e)." The
ALJ's order awarded interest under 28 U.S.C. § 1961, the general statute
that allows district courts to award interest on any money judgment in
a civil case. The employer has not shown that the ALJ erred in awarding
interest on the judgment to Gallagher.
22. The stipulation, however,
was that a LS-207 form was filed. We note that § 914(d) provides
that an employer controverts the employee's right to compensation by filing
"a notice, in accordance with a form prescribed by the Secretary
. . . ." (emphasis added). Although it is not clear, it appears that the
LS-207 is the form prescribed by the Secretary for an employer to file
notice that it controverts an employee's right to compensation.