Administrative – ‘Market Rate’ Debate in Black Lung Fee Award

Eastern Associated Coal Corp. v. Director, OWCP (Lawyers Weekly No. 13-01-0785, 34 pp.) (Keenan, J.) No. 11-2038, July 31, 2013; On Petition for Review; 4^th Cir.

Holding: In this black lung benefits case, claimant’s lawyers had sufficient market-based evidence to support their hourly rates of $175 to $300 and their quarter-hour billing did not lead to billing excessive hours, but the 4^th Circuit said the record did not support some fees for legal assistants; the court affirms the award of over $32,000.

Miner Harold Gosnell sued Eastern Associated Coal Corporation and won benefits in 2010. His lawyers filed a fee petition seeking $35,953.75. Claimant’s counsel asserted it knew of “no other firms in Virginia and very few across the nation” that accept new black lung cases. Counsel represented that black lung claimants ultimately are awarded benefits in only five percent of cases.

Claimant’s counsel submitted to the administrative law judge a list of 21 prior fee awards issued in black lung cases handled by their firm, made by seven different ALJs, all within several years of the present fee awards. Counsel also submitted the Altman Weil Survey of Law Firm Economics, which showed hourly rates for attorneys with varying degrees of experience in the “South Atlantic” and “Middle Atlantic” regions. It claimed hourly billing rates of $100 for legal assistants; $300 for a lawyer with over 30 years’ experience; $250, $200 and $175 for three lawyers with lesser years’ experience.

The ALJ disallowed certain clerical tasks and duplicative charges, subtracted 30 billed hours, and awarded $31,628.75. The Benefits Review Board awarded an additional $2,950 in attorney’s fees.

The determination of a traditional “market rate” is especially problematic in the context of claims brought under the Black Lung Benefits Act and the Longshore and Harbor Workers Compensation Act, in view of their general prohibition of fee agreements between counsel and prospective claimants. Under our precedent, prior fee awards constitute evidence of a prevailing market rate that may be considered in fee-shifting contexts, including those prescribed by the BLBA and the LHWCA. Prior fee awards do not “set” the market rate, but provide “inferential evidence” of the prevailing market rate. And the ALJ and BRB were not limited to considering prior fee awards in black lung cases. Although this court reversed a fee award for the same claimant’s counsel in Westmoreland Coal Co. v. Cox, 602 F.3d 276 (4^th Cir. 2010), counsel has remedied the major evidentiary deficiency identified in Cox, with information regarding fee awards from prior black lung cases. The better practice would be to also include the actual awards reflecting such rates in submissions to the ALJ and BRB.

We conclude, however, the agency adjudicators abused their discretion in determining a prevailing market rate of $100 per hour for legal assistants, and we reduce the hourly rate to $50, based on evidence supplied by Eastern.

We have already recognized in Broyles v. Dir., OWCP, 974 F.2d 508 (4^th Cir. 1992), that quarter-hour billing may lead to overbilling. But here, the ALJ and the BRB did not abuse their discretion merely by considering a fee petition with quarter-hour billing, which is authorized by applicable federal regulations. Eastern argues there is no “proof that it took 15 minutes to perform each and every task alleged.” In all, the ALJ subtracted about 30 hours from the fee request, and we hold the award resulted from careful and thoughtful consideration of the fee petition and Eastern’s objections.

We reduce the award of legal assistant fees from $3,800 to $1,900, upon applying the $50 hour rate.

Affirmed as modified.