1st Circuit: “Persistence” On the Part of Injured Employee’s Attorney Results in Attorney Being Sanctioned With Almost $35,000 in Attorney’s Fees

The First Circuit Court of Appeals recently affirmed sanctions in the form of $34,908.12 in attorney’s fees against a Massachusetts attorney representing a plaintiff in a civil suit filed against the plaintiff’s former employer and supervisor [see McCarthy v. Verizon New England, Inc., 2012 U.S. App. LEXIS 6100 (1st Cir., Mar. 23, 2012)]. 

Underlying Facts

On May 23, 2006, a Verizon employee crashed a Verizon truck into a highway abutment while driving to his first job of the day. Sustaining injuries, the employee was taken to a hospital emergency room in Worcester, Massachusetts. The employee eventually admitted to snorting heroin earlier in the morning and a urine sample taken at the hospital tested positive for opiate use. The employee remained out of work following the accident. His supervisor tried numerous times to contact the employee and approximately one week after the incident, drove to the employee’s parent’s house, ostensibly to get some papers signed in connection with the incident. While the facts were disputed, all parties agree that an argument broke out and the police were called.

Verizon later terminated the employee, citing his operation of a Verizon truck while under the influence of drugs. The employee filed a Massachusetts workers’ compensation claim, seeking compensation for the injuries he suffered in the accident itself and also for alleged psychological harm based on two different causes: (1) alleged on-the-job harassment by the supervisor before the accident and (2) the supervisor’s harassing visit to his parent’s house.

The ALJ denied the claim for harm suffered in the accident, finding that the accident was caused by the employee’s drug use, an example of serious, willful misconduct. The ALJ also found that the alleged pre-accident harassment claim failed because the supervisor was not engaged in harassment but was acting as a diligent supervisor by following up on the employee as a consistently poor worker. As to the part of the claim related to the confrontation at the employee’s parent’s house, the ALJ accepted the employee’s version of what had occurred and deemed the supervisor’s conduct a “potentially compensable incident.” But the ALJ found that the employee had failed to prove injury to himself or the causation of any resulting disability, so no compensation was awarded. The review board rejected the employee’s administrative appeal and the Massachusetts Appeals Court affirmed.

Employee’s Appeal of Worker’ Comp Claim Found to Be Frivolous–Double Costs Assessed

While the administrative appeal was pending, the employee filed a second workers’ compensation claim pertaining solely to the incident at his parents’ home. This claim was rejected by the ALJ as res judicata. The ALJ’s decision was affirmed by the review board and again upheld by the Massachusetts Appeals Court, with a state court award of double costs against the employee “as the appeal [was] frivolous.”

State Tort Action Filed by Employee Against Employer and Supervisor

Roughly a week after the second workers’ compensation claim was filed, the employee filed suit against Verizon and the supervisor in state court, charging the supervisor with intentional infliction of emotional distress, negligent infliction of emotional distress, and trespass; the complaint also alleged respondeat superior liability for Verizon. Verizon and the supervisor removed the suit to federal court and asserted that the claims were preempted by Section 301 of the Labor Management Relations Act (“LMRA”), 29 U.S.C. ß 185(a) (2006), and barred by the exclusivity provision of the Compensation Act, Mass. Gen. L. ch. 152, § 24.

After removal, the district judge expressed “serious reservations about whether this case should have been brought at all.” The employee did not withdraw his suit but it was ultimately dismissed by the district court on summary judgment based on both federal LMRA preemption and the state exclusivity provision. In dismissing, the district court ruled that sanctions might be warranted.

Sanctions Assessed Personally Against Employee’s Attorney

The district court concluded that “no reasonable attorney–particularly one with [the plaintiff’s attorney’s] experience with Workers’ Compensation Act claims–would have failed to recognize the exclusivity provision as an absolute bar.” The district court then reduced Verizon’s requested award of attorneys’ fees to $34,908.12 to reflect only the fees incurred after the district court’s December 2009 warning about the lawsuit’s viability. The sum was awarded against the attorney personally. The attorney appealed the award of sanctions against him. The employee, represented by new counsel, voluntarily withdrew his appeal of the summary judgment decision.

The First Circuit indicated that the attorney never coherently explained how he had any chance of overcoming the exclusivity provision of the Compensation Act. The First Circuit noted that the attorney conceded on appeal that the ALJ’s decision in the first claim could be easily interpreted to have found that the psychiatric claim resulting from the supervisor’s trespass conduct was compensable under the Compensation Act and that the employee merely failed to provide “sufficient evidence to support causality.” Indeed, on summary judgment, the employee argued again that the supervisor’s actions were clearly motivated at least in part to serve Verizon.

The First Circuit concluded that the employee’s tort was not only hopeless but aggravated by two further factors. One was that two workers’ compensation claims had already been filed by the attorney–the second being itself virtually hopeless–making the tort suit what the district judge called “an indigestible third bite at the apple,” [731 F. Supp. 2d at 134]; the other was the district court’s explicit warning to counsel which was then ignored even after the state appeal had failed. The court added that “[p]ersistence on the part of counsel is often an admirable virtue; but in this instance it was overdone.”

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