Emmanuel Stallworth v. Northrop Grumman Ship Systems, et al

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Emmanuel Stallworth v. Northrop Grumman Ship Systems, et al

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Case: 09-60865

Document: 00511178909

Page: 1

Date Filed: 07/20/2010

IN THE UNITED STATES COURT OF APPEALS United States Court of Appeals FOR THE FIFTH CIRCUIT Fifth Circuit FILED
July 20, 2010 N o . 09-60865 S u m m a r y Calendar Lyle W. Cayce Clerk

E M M A N U E L STALLWORTH, P e titio n e r, v. N O R T H R O P GRUMMAN SHIP SYSTEMS, INC.; DIRECTOR, OFFICE OF W O R K E R 'S COMPENSATION PROGRAMS, US DEPARTMENT OF LABOR, Respondents.

P e tit io n for Review of an Order of the U n it e d States Department of Labor Case No. 09-0303

B e fo r e BENAVIDES, PRADO, and SOUTHWICK, Circuit Judges. P E R CURIAM:* T h is is an appeal from a final order of the Benefits Review Board ("Board") a ffir m in g the District Director's reduction of Petitioner's counsel's attorney fees fo r services performed while Petitioner's case was pending before the District D ir e c t o r . For the reasons that follow, we AFFIRM the Board's decision.

Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

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Case: 09-60865

Document: 00511178909

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Date Filed: 07/20/2010

No. 09-60865

F ACTS AND PROCEDURAL BACKGROUND E m m a n u e l Stallworth, a painter, injured his shoulder at work on July 18, 2005. Subsequently, Stallworth filed a claim for disability compensation

p u r s u a n t to the Longshore and Harbor Workers' Compensation Act ("LHWCA"), 3 3 U.S.C. §§901-50. Before the District Director, Stallworth's attorney largely fo c u s e d his argument on the assertion that Stallworth's average weekly wage (" A W W " ) was $682.12. The ALJ, however, determined that Stallworth's AWW is now $581.76. Prior to this determination, Respondent Northrop Grumman h a d voluntarily been paying Stallworth an AWW of $588.07. A fte r the ALJ issued his Decision and Order, Stallworth's attorney s u b m i t t e d a fee petition to the District Director seeking an attorney's fee of $ 4 ,8 7 1 .2 5 , representing 21.25 hours of legal services at $225.00 per hour, plus $ 9 0 .0 0 of expenses. After considering the Respondent's objections, the District D ir e c t o r reduced the hourly rate to $200, disallowed one of the itemized entries, a n d reduced the award by one-half to reflect the fact that "very little [was] g a in ed by claimant and/or that there was limited success on the disputed issues." The District Director noted that Stallworth's attorney's argument and p r e s e n t a t io n before the District Director focused mostly on the issue of AWW, a n issue that Stallworth eventually lost since the ALJ awarded him an AWW lo w e r than that he was already receiving from his employer. Consequently, a p p ly in g this Court's decision in Ingalls Shipbuilding, Inc. v. Director, OWCP, 9 9 1 F.3d 163 (5th Cir. 1993), the District Director determined that Stallworth's a t t o r n e y 's fee award should be reduced to reflect the "limited success" S t a llw o r t h 's attorney had on the main issue he raised and litigated. Notably, the D is t r ic t Director reasoned as follows: I n the instant case, counsel for claimant admits that AWW was one o f 2 issues in dispute before this office and the O[ffice of the A]LJ. It was the only issue in the first conference held on May 8, 2007 2

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No. 09-60865 a n d was a part of the discussion about what claimant's entitlement t o loss of wage-earning capacity benefits should be in the second in fo r m a l conference held on August 28, 2007. Clearly, the claim for in c r e a s in g the AWW was lost. A c c o r d in g ly , the district director reduced Stallworth's counsel's fee award to $ 2 ,4 8 0 .6 3 . S t a llw o r t h appealed the District Director's reduction of the attorney fee t o the Board. In evaluating Stallworth's contention that the District Director h a d erred in reducing the fee, the Board observed that "[t]he district director n o te d claimant's success in obtaining an ongoing award of permanent partial d is a b ilit y , but found he was unsuccessful of the issue of increasing his average w e e k ly wage; in fact, it was decreased." The Board agreed with the District D ir e c t o r 's determination that AWW was the "major issu[e] in dispute" since " a v e r a g e weekly wage was the only issue discussed at the first informal c o n fe r e n c e and that it also was discussed at the second informal conference c o n c e r n in g claimant's entitlement to ongoing benefits." Accordingly, because S t a llw o r t h lost on the issue of AWW, the Board reasoned it should affirm the D is t r ic t Director's reduction of the attorney fee-award by half. S t a llw o r t h has timely filed his appeal of the Board's final order to this C ou rt. STANDARD OF REVIEW "Our review of Board decisions is limited." Ingalls, 991 F.2d at 165. "We in q u ir e only whether the Board correctly concluded that the ALJ's order was s u p p o r t e d by substantial evidence on the record as a whole and is in accordance w it h the law." Id. (internal quotations omitted). Furthermore, "an ALJ's

r e d u c t io n of attorneys' fees and costs will be affirmed on appeal unless it is a r b it r a r y , capricious, or an abuse of discretion." Hill v. Director, OWCP, 195 F .3 d 790, 794 (5th Cir. 1999).

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No. 09-60865 D IS C U S S IO N On appeal, Stallworth argues that the Board committed error in a ffir m in g the District Director's fee reduction since 1) the District Director's d e c is io n to reduce the fee award as a result of Stallworth's "losing on an issue" c o n t r a v e n e s the Supreme Court's decision in Hensley v. Echerhart, 461 U.S. 424 (1 9 8 3 ); and 2) the District Director's decision to use a "fractional multiplier to r e d u c e a fee award" was an act considered to be "arbitrary, capricious and/or a b u s e of discretion." Our review of the record and applicable law, however, leads us to conclude t h a t the District Director's order reducing the attorney's fee is supported by the s u b s t a n t ia l evidence in the record and is in accordance with the law. Accordingly, we conclude that the Board did not err in affirming the District D ir e c t o r 's fee reduction. I. T HE SUPREME COURT'S DECISION IN HENSLEY

S t a llw o r t h 's contentions that the District Director's order contravened the S u p r e m e Court's decision in Hensley are without merit. In Hensley, the

S u p r e m e Court held that where "a plaintiff has achieved only partial or limited s u c c e s s , the product of hours reasonably expended on the litigation as a whole t im e s a reasonable hourly rate may be an excessive amount." Hensley, 461 U.S. a t 436. The Supreme Court reasoned that "[t]his will be true even where the p la in t iff's claims were interrelated, nonfrivolous, and raised in good faith." Id. Consequently, the adjudicator "may simply reduce the award to account for the [a t t o r n e y 's ] limited success." Id. at 436-37.1

The Fifth Circuit has determined that the Supreme Court's decision in Hensley is applicable to a District Director's consideration of fee awards requested pursuant to the LHWCA. See Avondale Indus., Inc. v. Davis, 348 F.3d 487, 490 (5th Cir. 2003) ("Because § 28(b) requires a showing of success by the claimant for the award of attorney's fees, an ALJ must apply the factors set forth in Hensley v. Eckerhart in determining whether an award of attorney's fees is warranted.").

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Case: 09-60865

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No. 09-60865 I n the present case, the substantial evidence in the record supports the B o a r d 's conclusion that Stallworth's attorney only achieved partial or very l i m i t e d success. In his order, the District Director noted that AWW "was the o n ly issue in the first conference held on May 8, 2007 and was a part of the d i s c u s s io n about what claimant's entitlement to loss of wage-earning capacity b e n e fits should be in the second informal conference held on August 28, 2007." Consequently, the District Director determined that because the ALJ awarded S t a llw o r t h a lower AWW than what Respondent Northrop Grumman was a lr e a d y paying Stallworth, Stallworth's attorney failed to succeed on the major is s u e presented to the District Director. Accordingly, he reduced the fee by oneh a lf to account for the attorney's limited success. As a result, we cannot conclude that the District Director's decision c o n t r a d ic t s the Supreme Court's decision in Hensley. II. A RBITRARY, CAPRICIOUS, AND/OR ABUSE OF DISCRETION

I n his second issue on appeal, Stallworth argues that the District D ir e c t o r 's decision to simply reduce the fee award by one-half--instead of m e t ic u lo u s ly calculating the exact number of hours Stallworth's attorney spent o n the "successful" versus the "non-successful" issue--constitutes a decision that is arbitrary, capricious, and/or an abuse of discretion. We do not agree. I n regards to how the District Director must go about calculating the exact a m o u n t of a fee reduction, the Supreme Court has held that "[t]here is no precise r u le or formula for making these determinations." Hensley, 461 U.S. at 436. Consequently, "[t]he [adjudicator] may attempt to identify specific hours that s h o u ld be eliminated, or it may simply reduce the award to account for the lim it e d success." Id. at 436-37. In the present case, the District Director reasoned that although S t a llw o r t h 's attorney argued two issues, he lost on the main issue he litigated b e fo r e the District Director. As such, a reduction of the fee award by one-half is 5

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No. 09-60865 fu lly supported by the substantial evidence in the record and cannot be c o n s id e r e d arbitrary or capricious. To conclude otherwise would undermine the H e n s le y Court's edict that "[t]here is no precise rule or formula for making these d e t e r m in a t io n s ." Id. at 436. CONCLUSION F o r the aforementioned reasons, we conclude that the final order of the B o a r d affirming the District Director's fee reduction is supported by the s u b s t a n t i a l evidence in the record and is in accordance with the law. The d e c is io n of the Board is AFFIRMED.

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