Longshore and Harbor Workers’ Compensation Act and Fair Debt Collection Practices Act: Practitioners Should Get Higher Hourly Rates Based On Two Companion Ninth Circuit Decisions

Federal Court of Appeals Determines That A Broader Relevant Market Study, Not Just Past LHWCA Awards, Is In Order.

     The Ninth Circuit recently decided two decisions that will likely result in higher hourly rates in the lodestar analysis for practitioners submitting fee recovery requests in LHWCA cases, a result that follows from a past decision that seems to countenance a boost in hourly rates for FDCPA practitioners.

     In the companion cases of Christensen v. Stevedoring Services of America, Case No. 07-70247 and Van Skike v. Director, Office of Workers’ Compensation Programs, Case No. 07-73886 (9^th Cir. Mar. 2, 2009) (for publication), some longshoremen challenged fee awards to their attorneys at the hourly rate of $235-$250 based on the Benefits Review Board’s past awards at these rates to practitioners specializing in LHWCA cases, which at 33 U.S.C. sec. 928(a) provides for a “reasonable attorney’s fees” in regard to services performed before the BRB. The attorneys had sought higher rates in the $350 per hour range. On appeal, the Ninth Circuit vacated and remanded so that the fee award could be evaluated under a “market rate” test that likely will lead to awards at higher hourly rates for the LHWCA attorneys.

     Eschewing the adopted test of looking at lower past awards in contemporaneous LHWCA cases, the federal appeals court decided the proper calculation of reasonable fees is to be based on “the prevailing market rates in the relevant community (the forum in which the district court sits), regardless of whether plaintiff is represented by private or nonprofit counsel.” Blum v. Stenson, 465 U.S. 886, 895 (1984); City of Burlington v. Dague, 505 U.S. 557, 562 (1992). In adopting this prevailing market test, the Ninth Circuit followed a result it had reached for Fair Debt Collection Practices Act plaintiffs earlier in Camacho v. Bridgeport Financial, Inc., 523 F.3d 973, 979-980 (9^th Cir. 2008). The result was bolstered by the fact LHWCA attorneys face criminal penalties for negotiating or entering into private fee agreements with their clients. 33 U.S.C. sec. 928(e). The Ninth Circuit also rejected a narrower definition of “relevant community” reached by the Fourth Circuit in Newport News Shipbuilding & Dry Dock Co. v. Brown, 376 F.3d 245, 251 (4^th Cir. 2004), which used a comparable case fee award methodology (which would have followed the lower hourly rate approach).

     These two cases now infuse a “market rate” approach into LHWCA cases, bringing them in line with past precedents relating to FDCPA and civil rights (42 U.S.C. sec. 1983) cases. This now means that plaintiffs can introduce market studies and use the Laffey matrix to lobby for higher rates. (Future posts will discuss the Laffey matrix, which is derived from Laffey v. Northwest Airlines, Inc., 572 F. Supp. 354 (D.D.C. 1983), affid in part, rev’d in part on other grounds, 746 F.2d 4 (D.C. Cir. 1984), cert. denied, 472 U.S. 1021 (1985).)