Tufa Iuvale v. Coastal Marine Services ( 2021 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS NOV 5 2021
MOLLY C. DWYER, CLERK
FOR THE NINTH CIRCUIT U.S. COURT OF APPEALS
TUFA IUVALE, No. 19-71172
Petitioner, BRB Nos. 18-0159
18-0159A
v.
COASTAL MARINE SERVICES, MEMORANDUM*
Employer; SEABRIGHT INSURANCE
COMPANY, Carrier; DIRECTOR, OFFICE
OF WORKERS’ COMPENSATION
PROGRAMS,
Respondents.
On Petition for Review of an Order of the
Benefits Review Board
Submitted September 3, 2020**
Seattle, Washington
Before: TASHIMA, BYBEE, and COLLINS, Circuit Judges.
Memorandum joined by Judge BYBEE and Judge COLLINS;
Dissent by Judge TASHIMA
Tufa Iuvale petitions for review of the decision of the Benefits Review
Board (“BRB”) affirming the amount of attorney’s fees and costs awarded to his
*
This disposition is not appropriate for publication and is not precedent except as
provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes that this case is suitable for decision without
oral argument. See FED. R. APP. P. 34(a)(2)(C).
attorney, Jeffrey Winter, by the Administrative Law Judge (“ALJ”) under § 28 of
the Longshore and Harbor Workers’ Compensation Act (“LHWCA”), 33 U.S.C.
§ 928. Winter sought fees based in part on a $445 hourly rate, but the ALJ
awarded him only a reduced amount of fees, using hourly rates ranging from $373
in 2012 to $396 in 2016. The BRB affirmed the award, and Iuvale petitioned for
review. We have jurisdiction under § 21(c) of LHWCA, 33 U.S.C. § 921(c). “‘We
review the [BRB’s] decisions for errors of law and adherence to the substantial
evidence standard.’” Seachris v. Brady-Hamilton Stevedore Co., 994 F.3d 1066,
1076 (9th Cir. 2021) (citation omitted). The BRB was required to “‘accept the
ALJ’s findings unless they are contrary to law, irrational, or unsupported by
substantial evidence,’” and we “‘independently evaluate the evidence in the
administrative record to ensure the BRB adhered to the correct standard’” in
reviewing the ALJ’s decision. Id. (citations omitted). We deny the petition.
I
Because Winter, in seeking fees in this case, presented essentially the very
same evidence that he had presented to the same ALJ in a prior case, coupled with
a few new items of evidence supporting the current application, the ALJ properly
framed the analysis of the fee-rate issue by (1) considering whether the new
evidence or other changed circumstances required a different conclusion from the
ALJ’s analysis in the prior case; and (2) otherwise adopting his analysis from the
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prior case.1 In such a situation, we review both the prior decision that was adopted
by reference, as well as the ALJ’s analysis of the new evidence offered in support
of the current application.
A
We reject Winter’s contention that the referenced prior decision—Zumwalt
v. National Steel & Shipbuilding Co., OALJ Nos. 2011-LHC-00806, -01935 (Sept.
20, 2016)—applied incorrect legal standards or is otherwise not supported by
substantial evidence.
In contrast to Seachris, in which the ALJ wrongly concluded that the
attorney had not carried his initial burden of production, see 994 F.3d at 1077, the
ALJ in Zumwalt properly held that Winter had presented sufficient evidence to
“establish[] a reasonable hourly billing rate,” albeit at a lower rate of $385 for
work performed in 2014. The Zumwalt decision properly focused the analysis on
1
This situation thus differs from one in which an agency relies on its prior hourly
rate rulings that, although involving the same attorney, may involve a potentially
different supporting record. Cf. Christensen v. Stevedoring Servs. of Am., 557 F.3d
1049, 1055 (9th Cir. 2009) (agency is not required “in every fee award decision” to
“make new determinations of the relevant community and the reasonable hourly
rate,” but “must make such determinations with sufficient frequency that it can be
confident—and we can be confident in reviewing its decisions—that its fee awards
are based on current rather than merely historical market conditions”). Where, as
here, the attorney submits essentially the very same materials to the very same
ALJ, we can hardly fault that ALJ for adopting by reference his prior decision
analyzing in detail those very same materials, and then considering what additional
evidence or changed circumstances are presented in the new application.
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“whether the rates charged” by litigators in other lines of practice “are relevant
comparators—i.e., whether the rates involve ‘similar services by lawyers of
reasonably comparable skill, experience, and reputation.’” Id. at 1078 (emphasis
added) (citation omitted). Specifically, the detailed analysis in Zumwalt carefully
considered each item of evidence and took account of what the ALJ considered to
be relevant differences in the geographic markets reflected in that evidence as well
as relevant differences in the litigation-related tasks at issue. Id. at 1078–79
(explaining that, in evaluating whether rates involving another area of practice
involve “similar services,” it “is reasonable . . . to distinguish between complex
and non-complex litigation” and to take account of differences between other types
of litigation and “LHWCA work”).
Although Winter disagrees with some of the task-based and geographic-
based distinctions that the ALJ drew, and with the ALJ’s assessment of the
potential bias of a declarant, we cannot say that these judgments reflect an
impermissible view of the record evidence. The ALJ’s decision reflects that he
understood that his task was to determine, using the evidence presented, a market-
based rate for the work Winter had performed, and we therefore disagree with the
dissent’s suggestion that the ALJ was relying on his “own subjective assessment of
the relative value of LHWCA work.” See Dissent at 5. Even if we might not have
weighed the evidence the same way ourselves, the ALJ’s explanations are cogent
4
and internally consistent, and we see no indication of an “improper purpose of
holding down [Winter’s] hourly rate.” Seachris, 994 F.3d at 1082; see also id. at
1079–80 (holding that the distinctions drawn by the ALJ, in weighing the evidence
of rates involving other practice areas, must be adequately explained based on
rational and consistently-applied distinctions that are supported by the evidence in
the record, including the evidence concerning the skills and experience of the
attorney at issue).
B
We also find no grounds for disturbing the ALJ’s assessment of the new
evidence that Winter submitted with the current application.
First, the ALJ permissibly concluded that the additional evidence of
Winter’s professional awards and accolades was cumulative, given that the ALJ
had already determined in Zumwalt that Winter displayed “among the highest
levels of skill, experience, and reputation for quality Longshore Act representation
in the San Diego legal community.” Second, the ALJ reasonably concluded that
the deposition-specific rates recommended for California state workers’
compensation attorneys were not inconsistent with the overall hourly rates that he
had determined in Zumwalt. Third, the ALJ properly explained why he discounted
Winter’s evidence concerning rates awarded to several attorneys in an ERISA case.
In addition to noting that there was not enough evidence to determine “the skills,
5
experience, and reputations of the lawyers” at issue in the ERISA case, the ALJ
concluded that ERISA law “is a highly specialized, arcane area that commands
considerably higher hourly rates than workers’ compensation.” Even if the record
might also have supported a different conclusion, the ALJ’s determinations are
supported by substantial evidence and are not contrary to law.
II
Finally, we hold that the BRB did not abuse its discretion by declining to
adjust Winter’s rates to account for a delay in payment. See Christensen, 557 F.3d
at 1056. Enhancement is not warranted for an “ordinary delay,” but it may be
appropriate in cases involving unanticipated delays that are “extraordinary” or
“extreme.” Anderson v. Director, OWCP, 91 F.3d 1322, 1325 (9th Cir. 1996).
Here, the BRB properly noted that “the majority of counsel’s work took place in
2016 for which he was awarded 2016 rates” in 2017. It was not an abuse of
discretion to conclude that the modest amount of work performed in 2012, 2013,
and 2015 did not present the sort of lengthy delay that would warrant an
enhancement.
The petition for review is DENIED.
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FILED
Iuvale v. Coastal Marine Services, No. 19-71172
NOV 5 2021
TASHIMA, Circuit Judge, dissenting: MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
Under the Longshore and Harbor Workers’ Compensation Act (“LHWCA”),
33 U.S.C. § 928(a), hourly rates “are to be calculated according to the prevailing
market rates in the relevant community.” Seachris v. Brady-Hamilton Stevedore
Co., 994 F.3d 1066, 1076 (9th Cir. 2021) (quoting Blum v. Stenson, 465 U.S. 886,
895 (1984)). Calculating hourly rates in accordance with market rates ensures that
LHWCA attorneys are “awarded fees commensurate with those which they could
obtain by taking other types of cases,” Christensen v. Stevedoring Servs. of Am.,
557 F.3d 1049, 1053 (9th Cir. 2009) (quoting Camacho v. Bridgeport Fin., Inc.,
523 F.3d 973, 981 (9th Cir. 2008)), which in turn ensures that fee awards are
“sufficient to induce a capable attorney to undertake the representation of a
meritorious . . . case,” Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 552 (2010).
Accordingly, an administrative law judge (“ALJ”) errs by failing to base an
hourly rate determination on prevailing market rates. In Van Skike v. Director,
Office of Workers’ Compensation Programs, 557 F.3d 1041, 1046–47 (9th Cir.
2009), for instance, we held that the ALJ “committed legal error when he rejected
in their entirety the market indicators submitted by [claimant’s attorney] and
instead relied on other decisions in previous cases, when the judges in those
previous cases failed to base their fee awards on market rates.” Similarly, in
Christensen, 557 F.3d at 1054, we held that the Benefits Review Board (“BRB”)
erred by basing hourly rate determinations on “what has been awarded by ALJs
and the BRB” in other cases. We emphasized that “Blum requires the BRB to
consider the relevant market rate when it awards attorney’s fees.” Id. We have
also held that an ALJ may not rely on “billing rates reported by workers’-
compensation lawyers” if those rates are “capped by state law” and “thus not
reflective of market rates.” Shirrod v. Dir., OWCP, 809 F.3d 1082, 1090 (9th Cir.
2015),
The ALJ strayed from these principles here. The ALJ reasoned that, because
LHWCA work involves less skill than other types of litigation, he could not rely on
prevailing market rates for other types of litigation to calculate an attorney’s hourly
rate. Instead, the ALJ concluded that these prevailing market rates would have to
be discounted “significantly to reflect the difference in needed skills.” As the ALJ
explained:
When evaluating market rates in other areas of legal
practice, I take into account that legal representation under
the Longshore Act does not require skills needed for jury
trials; includes a number of legal presumptions that benefit
claimants and ease the task of their attorneys; does not
require mastery (or even familiarity) with formal rules of
evidence; does not require claimants’ attorneys to manage
relationships with large corporate clients; does not involve
lengthy, complex litigation in which an attorney must
2
manage over years a changing cadre of associate attorneys,
paralegals, and other staff; and allows attorneys who make
mistakes an almost unlimited entitlement to
reconsideration. . . . Thus, for example, hourly rates for
employment lawyers who try cases to juries or litigate
complex class actions might give useful data when
determining a market rate for a Longshore Act claimant’s
lawyer, but the employment lawyer’s hourly rate would
have to be reduced significantly to reflect the difference in
needed skills.
The ALJ then broadly applied this principle to reject attorney Jeffrey
Winter’s evidence of prevailing market rates. The ALJ accorded “little weight” to
Winter’s evidence of prevailing market rates in ERISA cases because “ERISA is a
highly specialized, arcane area” of the law. “To the extent [the ALJ could] draw an
inference, it would be by reducing the rates paid to the ERISA lawyers to account
for the greater skill their work requires.” The ALJ applied the same reasoning to
counsel’s evidence of prevailing market rates for uncapped workers’ compensation
work. Because the uncapped work involved depositions, and “[w]ork at deposition
. . . requires skills that are more highly compensated than most other tasks
litigation attorneys do,” “that rate must be adjusted downward to make it
applicable to all the kinds of work Mr. Winter performed.” The ALJ applied the
same principle to Winter’s evidence of prevailing market rates in maritime
litigation (“[E]ven if Longshore work is viewed as maritime, it requires less skill
3
than most maritime litigation,” business litigation (“For the general reasons stated
above, I would expect Longshore Act attorneys working in the same geographical
area to bill at rates somewhat lower than business litigators.”), employment
litigation (“[An] employment lawyer’s hourly rate would have to be reduced
significantly to reflect the difference in needed skills,” civil rights litigation
(“[C]ivil rights litigators command higher fees than [Longshore Act] attorneys for
the reasons I discussed.”), and civil litigation generally (“[C]ivil . . . litigators
command higher fees than [Longshore Act] attorneys for the reasons I discussed.”
It is difficult to see how, under the ALJ’s approach, Winter could ever
satisfy his burden to “produce satisfactory evidence” of prevailing market rates.
Christensen, 557 F.3d at 1053. Because the ALJ concluded that LHWCA work
involves less skill than every other type of litigation (with the possible exception of
uncapped workers’ compensation work not involving depositions or other highly
skilled tasks), any evidence of prevailing market rates Winter could offer would
have been subject to the same objection. The ALJ would have rejected the
evidence for the same reason.
The problems with the ALJ’s approach are twofold. First, as discussed, the
law is clear that hourly rates must be calculated according to prevailing market
rates—rates established by supply and demand and reflecting economic conditions.
4
Blum, 465 U.S. at 895; Seachris, 994 F.3d at 1076; Christensen, 557 F.3d at 1054.
Here, the ALJ rejected Winter’s evidence of prevailing market rates and instead
calculated Winter’s hourly rate based on the ALJ’s own subjective opinion about
what LHWCA work is worth. The ALJ may have noted Winter’s evidence of
prevailing market rates as a reference point, but the hourly rate the ALJ ultimately
awarded was based entirely on the ALJ’s personal view about how much less
LHWCA work is worth compared to other types of litigation. The ALJ discounted
prevailing market rates, not based on objective, market-based criteria, but based
solely on the ALJ’s own subjective assessment of the relative value of LHWCA
work. This was error. The ALJ’s “function is to award fees that reflect economic
conditions” in the relevant community, Moreno v. City of Sacramento, 534 F.3d
1106, 1115 (9th Cir. 2008), not the ALJ’s subjective assessment of the value of
LHWCA work.
Second, the ALJ’s methodology undermines “the underlying purpose of
relying on the marketplace: to calculate a reasonable fee sufficient to attract
competent counsel.” Christensen, 557 F.3d at 1054 (quoting Student Pub. Interest
Rsch. Grp. of N.J., Inc. v. AT & T Bell Labs., 842 F.2d 1436, 1446 (3d Cir. 1988)).
The ALJ’s approach ensures that attorneys are paid less for LHWCA work than for
handling other types of cases. This dual rate structure, in turn, ensures that
5
workers with meritorious claims will struggle to attract capable counsel: an
attorney such as Winter can either handle LHWCA cases, at below market rates, or
he can handle other types of cases, at higher market rates.1
the ALJ’s departure from prevailing market rates may have been well-
intentioned. Nonetheless, the case law is clear that hourly rates should be “in line
with those prevailing in the community for similar services by lawyers of
reasonably comparable skill, experience, and reputation.” Blum, 465 U.S. at 896
n.11 (emphasis added). Because the ALJ perceived LHWCA work as dissimilar
from virtually all other types of litigation, the ALJ was understandably cautious
about calculating Winter’s hourly rate in accordance with prevailing market rates
applicable to those other practice areas. The law is clear, however, that hourly
rates must be set by market conditions: An ALJ must rely on market rates. Thus,
even if an ALJ is persuaded that LHWCA work is dissimilar from other types of
litigation, his task is to calculate an hourly rate based on the most similar and
appropriate market-rate comparators available. See Seachris, 994 F.3d at 1077–78
(noting that ALJs must rely on the best prevailing market rate information
1
The ALJ observed that “Winter has among the highest levels of skill,
experience, and reputation for quality Longshore Act representation in the San
Diego legal community.” But it is also clear that Winter is capable of handling
other types of cases. He has over thirty years of legal experience, has conducted
over forty trials, and has handled a number of Ninth Circuit appeals.
6
available). Abandoning market rates, and substituting the ALJ’s own subjective
valuation of the lawyer’s services, is not an option.
Because the ALJ failed to follow the proper procedure, I would grant
Iuvale’s petition for review. Accordingly, I respectfully dissent.
7