Right to Choose Doesn’t Always Mean Your Choice Will Be Covered

Peña-Garcia v. Dir., OWCP, 917 F.3d 61 2019 U.S. App. LEXIS 6368*; 917 F.3d 61; 2019 WL 987887

By: Mary Taliancich

Employee, Luis Peña-Garcia, suffered a disabling back injury while working for his employer, Calzadilla Construction Corporation, in Puerto Rico in 1994. The employer’s insurance company, IMS Insurance Company of Puerto Rico, agreed to pay for surgery in Puerto Rico, where a surgeon was willing and able to perform. Peña-Garcia  rejected the offer because he wanted to have his spinal surgery at the Beth Israel Spine Institute in New York due to a record of being the best institution.

Under the Longshore Harbor Worker’s Compensation Act (hereinafter “LHWCA”), Peña-Garcia submitted a claim for attorney’s fees and costs asserting that his employer’s insurer refused to pay for spinal surgery in New York. An LHWCA administrative law judge (hereinafter “ALJ”) rejected the claim that it was necessary to perform the surgery in New York because the employer and its insurance company never refused to pay for the surgery. Consequently, the ALJ held the Peña-Garcia was not entitled to attorney’s fees and costs. The U.S. Department of Labor Benefits Review Board (hereinafter “the Board”) affirmed the denial of attorney’s fees and costs. Peña-Garcia petitioned the United States Court of Appeals for the First Circuit to review the final order of the board.

It is not disputed that the employee is entitled to medical benefits from his employer due to the spinal injury, but rather whether “any compensation” as provided in 33 U.S.C. § 907(a) includes compensation for Peña-Garcia’s proposed surgery in New York.

The ALJ decided that the employee had the right to choose where he had his surgery but the employer was liable only for the costs of the agreed care and treatment in Puerto Rico. Peña-Garcia would be responsible for any additional expenses he incurred should he choose not to have the surgery in Puerto Rico.

Under LHWCA, attorney’s fees are granted in two situations where an attorney’s services are utilized. 33 U.S.C.S.§ 928(a)-(b).

Subsection (a) addresses instances where the employer declines to pay on the basis that it is not liable, when: (1) the employer declines to pay “any compensation” and (2) the claimant is granted a “successful prosecution” of his claim.

Subsection (b) addresses instances where the employer accepts liability but the parties dispute the amount of compensation. In this instance, attorney fees are granted if the claimant is awarded compensation greater than the amount tendered by his employer.

The ALJ further denied the employee’s request for attorney’s fees and costs because, unlike what the employee argues, the right to choose the location of his surgery was not a “successful prosecution” as required to recover attorney’s fees under subsection (a). The employer’s insurance provider never refused to pay any portion of the surgery, but rather only to cover the cost of the surgery performed in Puerto Rico and was paying compensation to Peña-Garcia prior to the hearing.

The employee’s argument under subsection (b) also failed because he was not awarded compensation greater than that given by his employer through administrative proceedings. Without a greater award, the employee could not confirm his entitlement to LHWCA benefits because there was no evidence that the insurer refused to pay for surgery at the Puerto Rico cost.

The United States Court of Appeals for the First Circuit denied the employee’s petition for review and thus upheld the denial of attorney’s fees and costs.