1 United States Court of Appeals

Fifth Circuit



## FILED

October 21, 2003

Charles R. Fulbruge III

Clerk IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

__________________________

No. 02-60468

__________________________

AVONDALE INDUSTRIES, INC.,

Petitioner,

versus

CHARLENE DAVIS; DIRECTOR, OFFICE OF WORKER’S

COMPENSATION PROGRAMS, U.S. Department of Labor; JOSEPH G. ALBE,

Respondents.

___________________________________________________

Petition for Review of a Decision and Order

of a Benefits Review Board

___________________________________________________

Before REAVLEY, JONES, and CLEMENT, Circuit Judges.

EDITH BROWN CLEMENT, Circuit Judge:

Avondale In dust ries (“Avondale”) petitions this Court for review of a judgment of the

Benefits Review Board (“BRB”) awarding $15,500 in attorney’s fees to respondent Charlene Davis

(“Davis”) pursuant to the Longshoreman and Harbor Workers’ Compensation Act (“LHWCA”) §

28(b), 33 U.S.C. § 928(b).2 I. FACTS AND PROCEEDINGS

Davis injured her back during the course of her employment with Avondale in February 1993.

Avondale voluntarily paid temporary total disability benefits. When Davis’s physician released her

to light duty, Avondale offered her several light duty positions, which she refused to accept. Thus,

Avondale terminated her benefits, and Davis filed a claim.

The administrative law judge (“ALJ”) held a hearing on March 26, 1998, and i ssued an

opinion on March 9, 1999. The ALJ found that Davis reached her maximum medical improvement

in August 1995, and that Avondale properly terminated her benefits. The ALJ ordered Avondale to

pay for all future psychiatric treatment that was necessary to treat the severe depression Davis had

developed as a result of the accident. In addition, the ALJ assessed penalties against Avondale in the

amount of $736.50 because it had changed Davis’s compensation rate without providing sufficient

information to the Secretary of Labor when it made the change. Avondale did not appeal.

Davis’s attorney filed for attorney’s fees in the amount of $30,000 for the work he performed

on Davis’s claim pursuant to the LHWCA § 28(b), 33 U.S.C. § 928(b). Avondale objected, arguing

that Davis’s attorney did not work on the issues upon which Davis had prevailed, and that the limit ed

issues upon which she succeeded related only to issues raised by the ALJ. The ALJ agreed that the

fees were excessive, reduced several ex cessive entries, and tailored the fee award to $15,500 in

proportion to the limited success of Davis’s claims.

Avondale appealed to the BRB, again contending that Davis’s attorney had little or no effect

on the ALJ’s decision to award compensation to Davis. The BRB remanded to the ALJ for further

consideration of three issues: (1) the extent to which counsel’s efforts affected the award of future3

psychiatric treatment; (2) the extent to which counsel’s efforts affected the award of penalties and

interest; and (3) the rationale for reducing the fee by one-third.

The ALJ rendered its decision on April 10, 2001, finding that counsel’s efforts were

“intimately related” to Davis’s success. Further, he explained that, after reducing several excessive

entries, he further reduced the award by one-third because Davis had prevailed on two-thirds, or four

of six, of the issues present ed. Applying a deferential standard of review, the BRB affirmed.

Avondale pe t it io ned for reconsideration of the decision e n banc

. Finding that the fee award was

supported by substantial evidence on the record, and that the ALJ applied the correct legal standard,

the BRB again affirmed. Avondale now appeals the BRB’s decision.

II. STANDARD OF REVIEW

When reviewing decisions of the BRB, this Court examines “whether [the BRB] correctly

concluded that the Administrative Law Judge’s order was supported by substantial evidence on the

record as a whole and is in accordance with the law.” Conoco v. Dir., OWCP

, 194 F.3d 684, 687

(5th Cir. 2000) (qu o ting Ingalls Shipbuilding, Inc. v. Dir., OWCP

, 991 F.2d 163, 165 (5th Cir.

1993)).

III. DISCUSSION

On appeal, Avondale urges this Court to vacate the BRB’s decision to affirm the ALJ’s award

of attorney’s fees because: (1) the ALJ’s decision to award Davis coverage of her future psychiatric

treatment was based upon the ALJ’s own rationale; and (2) the ALJ’s decision to assess the $736.50

penalty against Avondale only required the ALJ to apply facts to law.

The applicable provision of the LHWCA § 28(b), provides in pertinent part:1 As noted in George Hyman Construction v. Brooks , 963 F.2d 1532, 1535-36 (D.C. Cir.

1992), although the analysis applied in Hensley v. Eckerhart , 461 U.S. 424, 434 (1983), originally

applied in the 42 U.S.C. § 1988 attorney’s fees context, the Hensley Court explicitly stated that

the standards set forth in the opinion were “generally applicable in all cases in which Congress has

authorized an award of fees to a prevailing party.” Hensley , 461 U.S. at 433 n.7 (internal

quotations omitted); see Ingalls Shipbuilding , 991 F.2d at 166.

4 [I]f the compensation

. . . awarded is greater than the amount paid or tendered by the

employer or carrier, a reasonable attorney’s f ee based solely upon the difference

betw een the amount aw arded and the amount tendered or paid shall be awarded.

33 U.S.C. § 928(b) (emphasis added). 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 1 in

determining whether an award of attorney’s fees is warranted

. See George Hyman Constr. v. Brooks

,

963 F.2d 1532, 1535 (D.C. Cir. 1992) (applying Hensley v. Eckerhart

, 461 U.S. 424, 434 (1983),

in reviewing a BRB’s affirmance of an award of attorney’s fees under 33 U.S.C. § 928(b)).

Hensley prescribes a two-step analysis with regard to the award of attorney’s fee s to a

prevailing party. First, the ALJ should confine the fee award only to work done on the successful

claims. I d. Second, the success obtained on the remaining claims should be proporti onal to the

efforts expended by counsel. Accordingly, “[w]hen a party achieves only partial or limited success

. . . then compensation for all of the hours reasonably expended on the litigation as a whole

. . . may

be an excessive amount.” Id. (internal quotations omitted).

To some extent, the ALJ in this case applied t he proper legal framework, determining that

counsel’s work was “intimately related” to the claims on which Davi s was successful, and then

reducing the entire fee in light of the fact that she was only successful on four of her six claims. After

a review of the record, it is clear that Davis’s counsel exp ended a great deal of effort presenting

evidence of Davis’s psychological condition and entitlement t o future coverage of treatm ent. As5

such, the ALJ did not err in finding that Davis’s counsel’s work was interrelated with the claims on

which Davis was successful. See id. at 1538.

Where the ALJ’s analysis falls short, however, is his failure to further take into account the

fact that D avis o nly recovered the limited amount of $736.50 in penalties and interest, plus future

medical costs, when reducing t he fees in light of the success obtained. Section 28(b) specifically

requires that an ALJ base attorney’s fees “solely upon the difference between the amount awarded

and the amount tendered or paid.” 33 U.S.C. § 928(b). The ALJ did not apply this provision. Here,

the difference between the amount awarded and the amount tendered equals future medical costs for

psychiatric care, plus $736.50 and interest. Yet, the ALJ made no attempt to quantify the award and

take it into consideration when determining the amount of the attorney’s fees award. Given the fact

that this limit

ed recovery is the sole basis for recovery of attorney’s fees unde r LHWCA § 28(b),

$15,500 in attorney’s fees may be excessive.

IV. CONCLUSION

For the foregoing reasons, we conclude that the BRB erred by not remanding Davis’s award

of attorney’s fees to the ALJ for further examination. Thus, we GRANT Avondale’s petition for

review, VACATE the BRB’s decision, and REMAND for proceedings consistent with this opinion.