New Orleans Director changes intepretation regarding 20% penalty -- pay within 10 calendar days

Posted on October 27th, 2010

Section 14(f) of the Longshore & Harbor Workers' Compensation Act provides that compensation payable under an award must be paid within 10 days or a 20% penalty will be assessed. This has been strictly interpreted -- there are no excuses for late payment. In the 5th Circuit, employers and carriers have had the fallback of providing payment within 10 business days. Quave v. Progress Marine, 912 F.2d 798 (5th Cir. 1990). In that 1990 opinion, the Fifth Circuit relied on the Federal Rule of Civil Procedure 6(a) that allowed exclusion of non-business days for periods of 10 days or less. Rule 6(a) was changed last December. As a result, the District Director, OWCP, in New Orleans announced his interpretation in a October 25, 2010, email that a formal award of compensation (including awards issued as a result of 8(i) settlements) should be received by a claimant within 10 calendar days of the award being filed with the OWCP. This applies unless the 10th day falls on a non-business day, in which case the deadline carries over to the next business day. If the claimant does not receive the payment in time, a 20% penalty will be assessed.

This is the Director's interpretation of Rule 6 and is relevant only in the 5th Circuit (TX, LA, MS). Every other circuit that has decided this issue concludes that the deadline is 10 calendar days -- period -- without reliance on Rule 6. See, e.g., Reid v. Universal Maritime Serv. Corp., 41 F.3d 200, 201 (4th Cir. 1994). The bottom line: the best practice is to make sure the claimant receives the sum awarded under a compensation order within 10 calendar days to avoid risking a 20% penalty.

THE FULL TEXT OF THE DISTRICT DIRECTOR'S EMAIL IS BELOW:

From: Duhon, David A - OWCP <Duhon.David@dol.gov>
Subject: 10 Day Rule - Section 14(f)
Date: Monday, October 25, 2010, 10:51 AM

Please be advised that effective December 1 , 2009 , Federal Rules of Civil Procedure Rule 6(a) was revised. It no longer has any special provision for time periods of less than eleven days and also includes “intermediate Saturdays , Sundays , and legal holidays” for computation periods “stated in days or a longer unit of time.” FRCP R. 6(a)(1) provides that: the day of the event that triggers the period (here that would be the day that the DD files and serves the compensation order) is excluded; every day thereafter is counted including intermediate Saturdays , Sundays , and legal holidays; and the last day of the period is included “but if the last day is a Saturday , Sunday , or legal holiday , the period continues to run until the end of the next day that is not a Saturday , Sunday , or legal holiday.”

This means that the counting of the 10 days to pay benefits per an order starts the day after the service date from my office and counts weekends and holidays , except that if the 10th day is a Saturday , Sunday , or federal holiday the payment is due the day after the weekend or federal holiday.

As most of you know , we have followed the Quave v. Progress Marine , 912 F.2d 798 (1990) for cases in the U.S. 5th Circuit Court of Appeals over the past couple of decades. That ruling stated that weekends and federal holidays were not to be counted in the 10 day period under Section 14(f) of the Longshore Act using the Federal Rules of Civil Procedure , Rule 6. Since that rule has changed , payments made under an order need to be paid within 10 calendar days starting with the day after this office’s service date. Weekends or holidays that fall after we serve the order must now be counted. This office will assess the 20% penalty pursuant to §14(f) in accordance with the latest version of the FRCP R. 6(a)(1) effective immediately and I wanted to give you notice. Please pass this information on to any of your colleagues who handle claims under the Longshore Act or any of its extensions in states covered by the U.S. 5th Circuit Court of Appeals.

David A. Duhon
District Director
7th Compensation District
P.O. Box 30728
New Orleans, LA 70190-0728
(504)589-2671 Fax (504)589-3969


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