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Employer’s Notice of Controversion (LS-207) Does Not Eviscerate Holding of Andrepont

Posted in LHWCA

The United States Court of Appeals for the Fourth Circuit, in Lincoln v. Director OWCP (Ceres Marine Terminals, Inc.) No. 13-1594 (March 11, 2014), was recently asked to address the effect of the employer filing a notice of controversion (LS-207) on the employer’s responsibility, vel non, for the payment of the claimant’s attorney’s fees pursuant to 33 U.S.C. § 928(a). The Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. § 901 et seq., provides for fee shifting in certain circumstances where the employer can be cast for the liability of the employee’s attorney’s fees. § 928(a) provides, in part:

If the employer or carrier declines to pay any compensation on or before the thirtieth day after receiving written notice of a claim for compensation having been filed from the Deputy Commissioner, on the ground that there is no liability for compensation within the provisions of this Act, and the person seeking benefits shall thereafter have utilized the services of an attorney at law in the successful prosecution of a claim, there shall be awarded . . . a reasonable attorney’s fee against the employer or carrier . . .

Lincoln filed a claim with the District Director of the Office of Workers’ Compensation Programs on May 24, 2011, alleging that he sustained binaural hearing loss as a result of his work as a longshoreman with Ceres Marine Terminals, Inc. (Ceres). On May 26, Ceres responded by filing a LS-207, notice of controversion, with the District Director’s office claiming additional information was needed before it could determine what it believed was the correct disability payment. The information Ceres sought also included whether it was the last responsible exposing employer before Lincoln’s hearing loss was discovered. The District Director’s office formally served the notice of Lincoln’s claim on Ceres on June 14. On July 7, within 30 days of receipt of notice, Ceres made a voluntary payment to Lincoln amounting to one week of permanent partial disability payment under the maximum compensation rate applicable to the date of injury.

The parties eventually settled Lincoln’s hearing loss claim, leaving the issue of attorney’s fees and the liability therefore to be decided by the District Director. On May 15, 2012, the District Director entered a compensation order finding that Ceres was not liable for Lincoln’s attorney’s fees since it had made payment of “any compensation” within 30 days of receipt of notice of the claim from the District Director’s office. This ruling was affirmed by the BRB and appealed to the Fourth Circuit.

The Fourth Circuit in citing Andrepont vs. Murphy Exploration & Production Co., 566 F .3d 415 (5th Cir. 2009), a decision obtained by this author from the Fifth Circuit, reiterated that fee shifting under § 928(a) may not occur if the employer agrees that some amount is due the claimant for work related injury and “tenders any compensation.”

Lincoln’s attorneys argued that the filing of the controversion (LS 207) contradicted the payment made by Ceres and asserted that the payment made was therefore a mere sham to avoid fee liability. The Fourth Circuit rejected this argument indicating that § 928(a) did not address the employer’s obligation for filing a notice of controversion and contained only one explicit trigger, that being the payment of “any compensation” within 30 days of the employer’s receipt of official notice of a claim. Since Ceres met this requirement, it was entitled to the protections afforded under § 928(a).