Author: WorkCompAcademy

In this Longshore and Harbor Workers’ Compensation Act (LHWCA) case, Rick Carter injured his back and neck at work in 1991, and he has been permanently totally disabled since October 1, 1993. In 1996, the parties entered stipulations, and the ALJ awarded Carter disability and medical benefits based on those stipulations. In this protracted case, litigation has continued over disputes involving post award issues.

In the current dispute, Rick Carter appeals to the 9th Circuit Court of Appeals in California from the district court’s order awarding him $14,268.50 in attorneys’ fees and costs on his fee petition in the amount of $22,585.The district court’s selection of a blended hourly rate of $400, combined with its reduction in the number of compensable hours by almost half, from 60.9 to 35 hours, resulted in Carter receiving a 27 percent reduction in fees: from $22,585 to $14,268.50. Carter contends on appeal that the district court erred as a matter of law by reducing the fee award without sufficiently explaining its rationale for the reduction.

The panel in the published opinion of Carter v Caleb Brett LLC held that the district court erred as a matter of law by reducing the fee award without sufficiently explaining its rationale for the reduction. The panel vacated the district court’s order awarding attorneys’ fees and costs, and remanded for the district court to articulate the basis for its fee determination with greater specificity.

When determining a reasonable fee award under a federal fee-shifting statute such as the Longshore Act, a district court must first calculate the lodestar by multiplying the “number of hours reasonably expended . . . by [the] reasonable hourly rate.” This Circuit requires that courts reach attorneys’ fee decisions by considering some or all of twelve relevant criteria set forth in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67 (9th Cir. 1975). The Kerr factors are (1) the time and labor required; (2) the novelty and difficulty of the questions involved; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the “undesirability” of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.

A mere statement that a court has considered the Kerr guidelines does not make a decision within the court’s discretion. Rather, the court must “articulate with sufficient clarity the manner in which it makes its determination.” While detailed calculations are not mandated, “something more than a bald, unsupported amount is necessary” to affirm an award of attorneys’ fees. As a general rule, a fee-awarding court that makes a substantial reduction in either documented time or authenticated rates should offer reasonably explicit findings.” The district court must also “explain how it arrived at its determination with sufficient specificity to permit an appellate court to determine whether the district court abused its discretion in the way the analysis was undertaken.”

The district court’s selection of a blended hourly rate of $400, combined with its reduction in the number of compensable hours by almost half, from 60.9 to 35 hours, resulted in Carter receiving a 27 percent reduction in fees: from $22,585 to $14,268.50. In its fee order, the district court identified the twelve Kerr factors and mentioned two that it considered most relevant: (1) “the disproportionate relationship between the amount of fees incurred($22.585.00) and the amount at stake in the litigation ($3,220.20)”; and (2) that “Carter [did] not bear primary responsibility for the fact that this matter became considerably more protracted than the ‘quick and inexpensive mechanism’ envisioned by the statute.” Beyond that very brief discussion, however, the district court offered no other analysis before concluding that “[u]nder the circumstances here, for purposes of fee-shifting, 35 hours of attorney time at a blended hourly rate of $400 is reasonable.”

The Court concluded that the district court did not explain its decision to reduce Carter’s fee request with sufficient specificity to allow it to review the reasonableness of the fee award.

Last fall, the National Football League scored a huge victory in California, helping push through a new law barring most professional athletes from filing workers’ compensation claims in the state. The NFL, successfully lobbied the state legislature to pass AB 1309, which prohibits athletes who spent most of their careers playing for teams outside California from filing claims in the state. The leagues believed the law could save them from exposure to countless claims from injured athletes. But that win has come at a cost.

The Los Angeles Times reports that publicity from a high-profile battle over the legislation prompted players from around the country to file more than 1,000 injury claims just prior to a September deadline – a huge influx that could cost the nation’s top professional sports leagues hundreds of millions of dollars to resolve. In the first two weeks of September, current and retired players filed 569 claims against NFL franchises, 283 claims against Major League Baseball clubs, 113 against National Hockey League teams and 79 against NBA squads. Nearly 70% of the filings include allegations of head or brain injuries caused by repetitive trauma. Most of these athletes appeared to have never played for a California team; they filed claims based on repetitive injuries they say were sustained in part during road games played in the state. It is those claims that are now barred under the new California law.

Among the athletes rushing to beat the deadline were sports legends such as Miami Dolphins quarterback Dan Marino, Baltimore Orioles pitcher Jim Palmer and Houston Rockets center Hakeem Olajuwon, as well as many lesser-known retirees, some suffering serious physical impairment. A number of active players, including San Francisco 49ers standouts Michael Crabtree and Frank Gore, also filed claims.

The six sports leagues affected by the new law – a group that includes Major League Soccer and the Women’s NBA – had predicted a jump in filings before the deadline. Still, the size of the increase was surprising. The volume of claims in September was about 10 times higher than average monthly levels since 2011. The workers’ compensation data highlights the huge scale of the injury legacy that confronts American professional sports franchises. More than a third of the final batch of claims lodged before the new statute became effective Sept. 15 wouldn’t have been affected by the new law, the Times analysis found. Advocates for injured athletes say that the months-long fight over the bill, which drew national attention, helped alert athletes who otherwise wouldn’t have known they could seek benefits.

More than three-quarters of the claims filed against NFL teams in the first two weeks of September alleged head or brain injury. Half of baseball players and just over 90% of hockey players made similar claims. An NFL study of past filings found that the average California claim cost teams $215,000 to resolve, a number that could be far higher for players with debilitating brain disease. Unlike other states, California long permitted claims from players who did not play for in-state teams so long as they participated in at least one game or practice here. California also recognizes cumulative injuries incurred over time. And although California has a one-year statute of limitations for claims, that restriction is waived when workers aren’t properly notified of their right to file, which was the case with many players for decades. As a result, many athletes with slow-to-develop disease such as dementia turned to California when legal doors in other states had long been shut.

In anticipation of that deadline, workers’ compensation attorneys scrambled to find players and file on their behalf. San Diego lawyer Ron Mix squeezed in almost 300 athlete cases in the final month, according to state data. To get through the mountain of paperwork, he said he paid his staff triple overtime and hired numerous temp workers. “We were working 12 to 16 hours a day, seven days a week,” said Mix, a former Hall of Fame lineman for the San Diego Chargers.

The Times analysis showed that 363 of the 1,064 claims made in the first two weeks of September listed a California-based team as the employer, indicating they likely didn’t need to beat the Sept. 15 deadline. In addition, a number of still-active players filed injury claims, something that rarely occurred in the past because players feared being cut by their teams.

“Everyone wanted to beat the deadline,” said Mel Owens, a Laguna Hills attorney and former Los Angeles Ram linebacker. He filed more than 250 claims for athletes in the final push, according to the analysis.

Overall, between February, when the bill was introduced, and Sept. 15, a total of 1,980 athlete claims were filed in California – compared to 1,170 in all of 2012. More claims were filed in that nine-month period than any other year, by far, the analysis found. Although it’s impossible to determine how many athletes will be barred from filing under AB 1309, attorney Mix estimates it could top 4,000. In recent months, he said he’s gotten calls from about 150 athletes that he had to turn away because they missed the deadline.

While working as a deputy sheriff for the Nevada County Sheriff’s Department in mid-August 2011, David Lade injured his right shoulder. At the time of his injury, Lade was working a night shift schedule that entitled him to 5 percent shift differential pay. He had been earning the shift differential since 2004, and the differential was paid regardless of whether he worked, took vacation, used sick leave, or received holiday pay.

He was returned to regular work, but in late January 2012 Lade was placed on modified duty at the direction of his physician. From then until he had surgery in early March, Lade worked light duty on the day shift. From the date of his surgery Lade was again off work. In late April, he returned to work full time but remained on modified duty. Sheriff’s deputies on light duty are typically assigned to the day shift, and Lade was no exception.

While Lade was off work, he apparently received his regular full pay, including the 5 percent shift differential. While he was working on the day shift, however, Lade was not paid the differential. In November 2012, the parties went to trial on whether section 4850 entitled Lade to the shift differential while he was working modified duty on the day shift. As relevant here, section 4850 provides that whenever a sheriff’s deputy “who is employed on a regular, full-time basis, and is disabled, whether temporarily or permanently, by injury or illness arising out of and in the course of his or her duties, he or she shall become entitled, regardless of his or her period of service . . . to a leave of absence while so disabled without loss of salary in lieu of temporary disability payments . . . , if any, that would be payable under this chapter, for the period of the disability, but not exceeding one year, or until that earlier date as he or she is retired on permanent disability pension, and is actually receiving disability pension payments, or advanced disability pension payments pursuant to Section 4850.3.” (§ 4850, subds. (a), (b)(4).)

The WCJ decided that Lade was entitled to the shift differential. Relying on Johnson v. Contra Costa County Fire Protection Dist. (1972) 23 Cal.App.3d 868, the WCJ reasoned that the county “could not change Officer Lade’s status [from night shift to day shift] for purposes of [section] 4850 so as to avoid indemnification for the shift pay.” The county petitioned the board for reconsideration, arguing (among other things) that the WCJ erred “in granting Labor Code [section] 4850 ‘leave of absence’ benefits while [Lade] was not on a leave of absence and in fact [was] working modified duty.” Adopting the report and recommendation of the WCJ, the board denied reconsideration.

The Court of Appeal reversed the WCAB in the published opinion of County of Nevada v WCAB and David Lade.

The Court of Appeal rejected Lade’s argument stating “We do not believe section 4850 is reasonably susceptible to the interpretation Lade advances” citing Collins v. County of Los Angeles (1976) 55 Cal.App.3d 594. “Here, the Legislature provided that a public safety worker like Lade, when disabled, is entitled to a leave of absence at full salary instead of temporary disability payments. There is nothing in section 4850 that guarantees a worker anything when he is no longer on a leave of absence and is instead back at work. Moreover, there is nothing in section 4850 that can be reasonably understood to mean that a leave of absence is anything less than being absent from one’s employment.”

The WCAB order denying reconsideration was annulled, and the matter was remanded.

The San Diego County District Attorney announced charges against four businesses, their owners and several employees who were indicted on various types of insurance fraud including workers compensation fraud, unemployment fraud and tax evasion

Owners of A1 Patio and Remodeling Experts in Encinitas, Christina Engineering in Escondido, Quality Way Building Maintenance in National City and Rufino’s Landscaping of Escondido were all indicted by the grand jury in December for their roles in bilking insurance companies and the state tax board out of $1.5 million. Fourteen defendants were indicted in December. Of those, four were arraigned on January 6, and the remainder is scheduled to be arraigned this week in San Diego Superior Court . They include Joshua Swarthout, James Hooper, Andrew Curtis, Billy Ray Alsbrook, George Norton, Jacob Kuhn, Pat Gee, Tim Mountney, and Tom Jarvis . If the defendants fail to appear for arraignment, warrants will be issued for their arrest.

When an employee of Russ E. Kubart of A1 Patio and Remodeling Experts.injured himself after falling from a deck at a jobsite, Kubart told the employee to tell medical staff he injured himself at home because Kubart did not have workers ’ compensation insurance. Loss to known victims is $160,000. Ten employees of Christina Engineering were indicted for their roles in receiving unemployment benefits at the same time they were being paid cash to work, which they were encouraged to do by their employer. Loss to known victims is $350,000 .  Marcos Castaneda , of Quality Way Building Maintenance was indicted on four counts of felony insurance fraud for his role in intentionally lying about his payroll in order to receive reduced workers compensation premiums. Loss to know victims is $133,921. Rufino Aguiluz and his wife, Maria Foulk of Rufino’s Landscaping , were indicted on several counts of insurance fraud, payroll tax evasion and income tax evasion for their roles in failing to report payroll to various workers’ compensation insurance carriers and tax collectors. Loss to known victims is $952,202.

“These are excellent examples of the variations found within the underground economy that continues to negatively impact the California Workers’ Compensation system” said Donald Marshal, Chair of the California Workers’ Compensation Fraud Assessment Commission . “We can see that the victims of these alleged crimes include injured workers and the citizens of the State who must absorb the costs paid for this criminal activity. Congratulations to the San Diego District Attorney’s Office and the California Department of Insurance for their hard work in disrupting the activities of these suspected criminal enterprises.”

John Larkin, a police officer for the City of Marysville, sustained injuries to his neck, right shoulder, left upper thigh, face, right biceps, and nose. He had less than maximum earnings.

At an expedited hearing on the issue of his appropriate earnings rate and his claim for temporary disability, he claimed that he should be entitled to the benefit of the earnings rates established by Labor Code sections 4458.2 and 3362 which specify maximum earning for volunteer police officers. He claimed that the “plain language” of these statutes supported this conclusion. As relevant to this case, section 4458.2 provides: “If an active peace officer of any department as described in Section 3362 suffers injury or death while in the performance of his or her duties as a peace officer, . . . then, irrespective of his or her remuneration from this or other employment or from both, his or her average weekly earnings for the purposes of determining temporary disability indemnity and permanent disability indemnity shall be taken at the maximum fixed for each, respectively, in Section 4453.” Section 3362 provides: “Each male or female member registered as an active policeman or policewoman of any regularly organized police department having official recognition and full or partial support of the government of the county, city, town or district in which such police department is located, shall, upon the adoption of a resolution by the governing body of the county, city, town or district so declaring, be deemed an employee of such county, city, town or district for the purpose of this division and shall be entitled to receive compensation from such county, city, town or district in accordance with the provisions thereof.”

Following an expedited hearing, the workers’ compensation judge (WCJ) found that sections 4458.2 and 3362 applied only to active volunteer peace officers, not regularly sworn, salaried peace officers, and therefore did not apply to Larkin. Larkin petitioned the Board for reconsideration of the decision, contending the plain language of the statutes entitled industrially injured peace officers to temporary disability payments at the maximum rate. The Board agreed with the reasoning of the WCJ and denied the petition for reconsideration.

The Court of Appeal affirmed the WCAB in the published case of John Larkin v WCAB and the City of Marysville. In doing so, the Court stated that the outcome of Larkin’s interpretation “would be an absurd result..”

The policy underlying these statutes is to encourage public service to these agencies by providing maximum benefits to volunteers injured in providing such service. With respect to volunteer firefighters, the Supreme Court recognized these fictitious earnings were created by the Legislature as it was ” ‘[c]ognizant of the public service provided by the volunteer civilian firefighter and the potential loss of his earnings from other employment [and] determined that the usual benefit schedules should not apply but that a fictitious earnings component should be used. The liberal disability compensation program not only serves to counterbalance any sacrifice of earning power made to engage in firefighting activity, but also provides an incentive to engage in an important public service.’ ” The same policy considerations apply to providing these fictitious earnings for volunteer peace officers.

The Court of Appeal concluded “to give effect to the statutory policy underlying these statutes, we find that sections 4458.2 and 3362 apply to volunteer peace officers only.”