Oliver W. Eifler v. Peabody Coal Company, Old Republic Insurance Company, and Director, Office of Workers' Compensation Programs, U.S. Department of Labor

Citations: 13 F.3d 236; 1993 U.S. App. LEXIS 34395Docket: 90-1924

Court: Court of Appeals for the Seventh Circuit; December 29, 1993; Federal Appellate Court

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Oliver W. Eifler petitioned against Peabody Coal Company, Old Republic Insurance Company, and the Director of the Office of Workers' Compensation Programs regarding attorney's fees under the Longshoremen's and Harbor Workers' Compensation Act and the Black Lung Benefits Act. The court previously modified the denial of Eifler's black lung benefits and remanded the case for further proceedings. Eifler's attorney sought over $13,000 in fees for her work on his behalf but faced opposition from the employer, which claimed her request was both too late and too early, arguing that the compensation award was not final due to an ongoing appeal. The court found the employer's assertion that the request was late incorrect but agreed that it was premature since the compensation order had not yet become final. The court cited case law indicating that a party must be a prevailing party to be entitled to fees, and simply keeping a claim alive does not qualify. Approximately a month after filing for fees, Eifler's attorney decided to withdraw the motion after the parties reached a settlement for around $13,000 in fees.

Approval of attorney's fees in disputes between an employer and a claimant's lawyer requires administrative or judicial review under 33 U.S.C. Sec. 928(a). Although the employer and the claimant's attorney believe approval may not be necessary, they acknowledge that if it is required, the proposed fee is reasonable. The Director of the Office of Workers' Compensation Programs contends that approval is needed but refrains from commenting on the specific settlement.

The court asserts that it holds the authority to grant approval, given that the fee application pertains to services rendered in the court of appeals. The necessity for approval is underscored by concerns about potential collusion between claimants' attorneys and employers, which could result in inflated fees at the expense of injured workers. This concern is reinforced by various statutory provisions indicating that attorney fees must receive official approval.

The court concludes that approval is mandated regardless of whether the fee amount is disputed and determines that the timing of the settlement—prior to a final compensation award—does not warrant disapproval. If the employer's appeal is successful, the claimant remains unaffected, and the attorney's motivation for settlement suggests it serves the interests of claimants. Thus, approving the fee aligns with the statutory goal of ensuring access to legal representation for claimants.

The timing of the settlement is deemed appropriate, as jurisdiction to award fees would not exist without it. The settlement ensures that no compensation awarded to Eifler will be affected, meaning he has no financial risk. While it could be suggested that Eifler's lawyer may not advocate as vigorously due to partial payment, this is considered unlikely. The settlement pertains only to fees for services related to the appeal that led to the 1991 decision. Should Eifler secure a final compensation award, his lawyer can claim additional fees for her work with the administrative bodies, thereby maintaining her incentive to pursue Eifler's claim. Concerns that the settlement might deplete the employer's resources to the extent of hindering compensation payments are dismissed as unfounded. The Office of Workers' Compensation Programs is expected to have identified any potential issues with the settlement. Consequently, the fee settlement is approved, and the motion to withdraw the fee request is granted.