1.Whether claimant's average annual earnings, for purposes of determining his compensation rate under the Longshore and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. 901 et seq., should be computed under 33 U.S.C. 910(a), rather than under 33 U.S.C. 910(c), where the claimant worked more than 75% of the workdays available for a five-day worker, the employ ment in which he worked was not seasonal, and there is no practical difficulty in applying Section 910(a).
2.Whether the total amount of LHWCA com pensation benefits payable to respondent, who is entitled to a permanent partial disability compensation award for one injury and to a permanent total disability com pensation award for a second distinct injury, is limited to the amount specified in 33 U.S.C. 908(a) for a per manent total disability.
3.Whether 33 U.S.C. 906(b)(1), which provides that compensation for disability shall not exceed 200% of the national average weekly wage, applies separately to each of claimant's concurrent compensation awards, or instead applies to the awards in the aggregate.
The opinion of the court of appeals (Pet. App. 1-27) is reported at 382 F.3d 878. The decision and order of the Benefits Review Board (Pet. App. 28-48) is reported at 36 Ben. Rev. Bd. Serv. (MB) 56. The decision and order of the administrative law judge is unreported.
The judgment of the court of appeals was entered on May 11, 2004. A petition for rehearing was denied on August 27, 2004 (Pet. App. 5). The petition for a writ of certiorari was filed on November 24, 2004. The juris diction of this Court is invoked under 28 U.S.C. 1254(1).
1.The Longshore and Harbor Workers' Compen sation Act (LHWCA), 33 U.S.C. 901 et seq., requires covered employers to provide compensation for dis ability or death resulting from the work-related injury of covered employees. 33 U.S.C. 904, 908. The Act defines disability as "incapacity because of injury to earn the wages which the employee was receiving at the time of injury in the same or any other employment." 33 U.S.C. 902(10).
For certain "scheduled" injuries resulting in per manent partial disability, incapacity to earn wages is conclusively presumed, and the claimant is entitled to compensation at a rate of 66 2/3% of the claimant's average weekly wages for a fixed number of weeks. 33 U.S.C. 908(c)(1)-(19). For "all other cases" of injuries involving permanent partial disability, the compensation rate is "66 2/3 per centum of the difference between the average weekly wages of the employee and the employee's wage-earning capacity thereafter." 33 U.S.C. 908(c)(21). In cases of permanent total disability, the compensation rate is "66 2/3 per centum of the [employee's] average weekly wages." 33 U.S.C. 908(a).
Under the LHWCA, "the average weekly wage of the injured employee at the time of injury" is "the basis upon which to compute compensation," 33 U.S.C. 910, and an employee's average weekly wage is "one fifty- second part of his average annual earnings." 33 U.S.C. 910(d)(1). There are three alternative methods for determining an employee's average annual earnings. First, if the injured employee has worked in the same employment in which he suffered his injury "during substantially the whole of the year immediately preceding [the] injury," his average annual earnings are determined by ascertaining his average daily wage during that period and multiplying it by 300, in the case of a six-day worker, or 260, in the case of a five-day worker. 33 U.S.C. 910(a). Second, if the injured employee has not worked in such employment during substantially the whole of the year, the same calculation should be employed using the average daily wage of an employee of the same class engaged during the same period in the same or similar employment. 33 U.S.C. 910(b). Finally, if either of those methods "cannot rea sonably and fairly be applied," an employee's average weekly earnings is the sum that "reasonably repre sent[s] the annual earning capacity of the injured employee," taking into account his previous earnings in the employment in which he was working when injured or in other employment, and the earnings of other employees in similar employment. 33 U.S.C. 910(c).
The Act also provides a cap on the amount of com pensation that an employee may receive for a disability. "Compensation for disability * * * shall not exceed an amount equal to 200 per centum of the applicable national average weekly wage," as determined by the Secretary of Labor on an annual basis. 33 U.S.C. 906(b)(1) and (3).
2.Respondent Arel Price suffered a back injury in 1979 while employed by petitioner Stevedoring Services of America (SSA). Pet. App. 6. Price received a permanent partial disability award in the amount of $196.01 per week. Ibid. That award compensated him for a reduction in his wage-earning capacity from $627.88, his average weekly wage at the time of that injury, to $333.87, his residual weekly wage-earning capacity when, after back surgery, he returned to work and was restricted to lighter duty jobs. Id. at 6 & n.2 ($196.01 award equals 66 2/3% x ($627.88-$333.87)). In 1991, Price suffered another work-related back injury that required him to undergo additional surgery. Id. at 6. He returned to work in 1992, but his back pain gradually worsened, resulting in his retirement, on his physician's advice, in 1998. Id. at 6, 30.
Price then filed claims under the LHWCA seeking, inter alia, compensation for permanent total disability for the aggravation of his back condition that culminated in his 1998 retirement. Pet. App. 7. The administrative law judge (ALJ) granted Price benefits for his per manent total disability at the time of his 1998 retire ment, payable by petitioner Homeport Insurance Co., SSA's LHWCA insurance carrier at the time of this injury. Ibid. The ALJ concluded that Price's average annual earnings should be computed under 33 U.S.C. 910(a), because he worked 75% of the workdays avail able for a five-day worker and because his work was stable and continuous. Price v. Stevedoring Serv. of Am., Nos. 1992-LHC-2469 & 1999-LHC-1653 (Oct. 13, 2000), slip op. 29 (ALJ Decision). The ALJ then deter mined that Price's average weekly wage was $1156.15 and that compensation benefits should therefore be awarded at two-thirds of that amount. Id. at 31.
The ALJ also concluded that because Price's wage- earning capacity at the time of his 1998 injury was less than his wage-earning capacity in 1979 when he was first injured, he should continue to receive permanent partial disability benefits for his 1979 injury. ALJ Decision at 32. The ALJ further ruled, however, that Homeport was entitled to a credit for the amount of compensation being paid by SAIF Corporation for the 1979 injury, to the extent the combined amounts of the two awards would otherwise exceed the amount allowed by 33 U.S.C. 908(a) for total disability. ALJ Decision at 32, 34. The ALJ also held that if the combined total of Price's permanent partial disability award and of his total disability award exceeded the statutory maximum specified in 33 U.S.C. 906(b)(1), the benefits payable by petitioner Homeport should be adjusted so that the combined benefits do not exceed that maximum. ALJ Decision at 32.
3.The Benefits Review Board modified the award in part, and otherwise affirmed. Pet. App. 28-48. The Board affirmed the ALJ's determination that Price's average weekly wage should be computed under Section 910(a), rather than Section 910(c), because Price worked more than 75% of the available work days during the year preceding his 1998 injury and because his work was stable and continuous. Id. at 42-44. The Board also concluded, however, that the ALJ had not calculated Price's compensation correctly, because claimant's aver age weekly wage was $1525.90, rather than $1156.15. Id. at 44-45. The Board therefore modified the ALJ's award in that respect.
The Board affirmed the ALJ's ruling that petitioner Homeport's weekly liability for total disability com pensation should be reduced by the amount of weekly permanent partial disability benefits being paid by SAIF. Pet. App. 46. The Board also affirmed the ALJ's holding that the combined amounts of the concurrent awards may not exceed the statutory maximum specified in Section 906(b)(1). Id. at 47 n.12.
4.The court of appeals affirmed in part and reversed in part. Pet. App. 1-27. The court first held that Section 910(a), rather than Section 910(c), is the proper basis for computing Price's average weekly wage. The court noted that Section 910(c) applies only when Section 910(a) or 910(b) cannot be reasonably and fairly applied, and that this exception comes into play when employment in the industry is casual, irregular, seasonal, intermittent, and discontinuous; when apply ing Section 910(a) or 910(b) would result in excessive compensation in light of claimant's actual employment record; or when there is insufficient evidence in the record to enable the ALJ to make an accurate calcula tion under Section 910(a) or 910(b). Id. at 10; see id. at 12 (stating that, notwithstanding Price's satisfaction of the 75% rule, "[w]hen there are fixed, determinable periods of inactivity during the year, Section 910(a) or (b) cannot reasonably and fairly be applied").
The court concluded that because Price worked more than 75% of the days available for a five-day worker, application of the Section 910(a) formula would not ex cessively compensate him. Pet. App. 11. The court further concluded that the ALJ's finding that Price's employment was not intermittent and casual was supported by substantial evidence. Id. at 11-12. The court explained that employment in an industry is deemed casual, intermittent, or seasonal when there are fixed, determinable periods of inactivity during the year. Ibid. While Price did not obtain work the same number of days every week, there were no fixed periods of inactivity. Ibid.
The court of appeals also held that the Board and ALJ had erred in reducing petitioners' liability for permanent total disability compensation by the amount of Price's permanent partial disability award. Pet. App. 13-20. The court noted that concurrent awards that compensate a claimant for the respective reduction in the claimant's wage-earning capacity caused by each successive injury do not constitute "double dipping" in contravention of Section 908(a). The court explained that double dipping occurs only when an award com pensates an employee for a loss of wage-earning capacity that is already accounted for in an earlier award. Id. at 13-16. Because the ALJ found that Price's wage-earning capacity had not increased between his 1979 and 1998 injuries, the court concluded that the first award compensates Price for the initial diminution in earning capacity, while the second award compensates him for elimination of his residual earning capacity. Id. at 18. The court therefore held that "permitting Price to retain the full amount of both awards would not double-compensate him for any loss in wage-earning capacity." Id. at 20.
Contrary to the conclusions of the Board and the ALJ, the court of appeals also held that Section 906(b)(1) sets a maximum amount of compensation for each of the concurrent awards individually, not for the total amount of both awards combined. Pet. App. 20-21. The court reasoned that because the phrase "compensa tion for disability" as used elsewhere in the LHWCA refers to an award for each different type of disability, the same phrase in Section 906(b)(1) refers to the maximum weekly compensation allowed from an award for a particular disability, not from all awards to a claimant. Id. at 23.
1. Petitioners contend (Pet. 9) that the court of appeals erred in adopting a rule that requires the application of Section 910(a) and forbids the application of Section 910(c) when an employee has worked at least 75% of the workdays available for a five-day worker. Petitioner argues (Pet. 14) that such a rule conflicts with the statutory directive that Section 910(c), rather than Section 910(a), should be used when Section 910(a) cannot "reasonably and fairly be applied." 33 U.S.C. 910(c). That contention does not warrant review.
a.Initially, petitioner's contention reflects a mis reading of the court of appeals' decision. The court of appeals did not hold that Section 910(a) should be applied in all cases in which an employee has worked at least 75% of the available workdays. The court ex pressly recognized that it would be unfair and unrea sonable to apply Section 910(a) to such an employee if that employee's work is seasonal or intermittent, or if there is insufficient evidence in the record to enable the ALJ to make an accurate calculation under Section 910(a). Pet. App. 10.
Here, based on the ALJ's findings, the court of ap peals concluded that Price's employment was not sea sonal or intermittent, Pet. App. 11-12, and petitioners suggest no basis for overturning that fact-bound con clusion. Nor do petitioners argue that there was insufficient evidence in the record to enable the ALJ to make an accurate calculation under Section 910(a).
Petitioners principally object to the court of appeals' approach on the ground that it leads to overcom pensation in certain cases. Pet. 10. But the possibility of overcompensation is inherent in Section 910(a). A calculation under Section 910(a) results in a "theoretical approximation of what a claimant could ideally have been expected to earn" if the claimant had worked "every available work day in the year." Ingalls Shipbuilding, Inc. v. Wooley, 204 F.3d 616, 618 (5th Cir. 2000) (citation omitted). Yet Congress surely under stood that because of a variety of factors, such as illness and vacations, few claimants have worked every avail able workday in a year. Moreover, Congress expressly made Section 910(a) applicable not only when the claimant has worked the entire year preceding the injury, but also when the claimant has worked "sub stantially the whole of the year." 33 U.S.C. 910(a). Congress's retention of the Section 910(a) standard therefore necessarily reflects Congress's judgment that the administrative convenience of applying Section 910(a) justifies some degree of overcompensation. Accordingly, while Section 910(a) may produce some level of overcompensation, that fact alone is not a sufficient basis for concluding that it cannot "reasonably and fairly be applied." 33 U.S.C. 910(c). As the Fifth Circuit recently explained, "[o]ver-compensation alone does not usually justify applying § 910(c) when § 910(a) or (b) may be applied," because overcompensation "is built into the system institutionally." Gulf Best Electric, Inc. v. Methe, 396 F.3d 601, 606 n.1 (2004) (citation omitted).
Indeed, while applying Section 910(a) can lead to some degree of overcompensation, resorting to Section 910(c) creates problems of its own. Section 910(c) in vites uncertain inquiries into a worker's annual earning capacity. It is no easy matter to determine what "rea sonably represent[s] the annual earning capacity of the injured employee," taking into account his previous earnings in the employment in which he was working when injured or in other employment, and the earnings of other employees in similar employment. 33 U.S.C. 910(c). That does not suggest that there should be an invariable preference for calculating compensation under Section 910(a) rather than Section 910(c). But it reinforces the conclusion that the possibility that Sec tion 910(a) will result in some overcompensation is not a sufficient basis for invoking Section 910(c).
To the extent that petitioners are arguing that the LHWCA does not permit any percentage figure to be considered in determining when Section 910(a) should be preferred over Section 910(c), that contention is without merit. In order to determine whether it is unreasonable and unfair to apply Section 910(a), see 33 U.S.C. 910(c), it makes sense to give some consideration to the percentage of the available days that a claimant has worked. Cf. Chandris, Inc. v. Latsis, 515 U.S. 347, 371 (1995) (concluding, as an appropriate rule of thumb for the ordinary case, that a worker who spends less than about 30% of his time in the service of a vessel in navigation should not qualify as a seaman under the Jones Act (Merchant Marines Act of 1920, ch. 250, 41 Stat. 988)). To the extent that petitioners are arguing that the 75% figure is too low, petitioners have not explained why that is necessarily so. For example, petitioners have not shown that the 75% figure so far departs from the customary hours worked in the industry that it produces more overcompensation than Congress could have intended.
b. In any event, review of the first question pre sented is unwarranted because no other circuit has yet taken a position on whether the court of appeals' ap proach in this case best implements the LHWCA. The question of what approach best implements Congress's scheme would benefit from further ventilation in the circuits.
Petitioners err in contending (Pet. 10) that the decision below conflicts with decisions of the D.C. Circuit and the Seventh Circuit. Although those Cir cuits have not adopted a rule like that of the Ninth Circuit, neither have they rejected such a rule, and their rulings are consistent with the Ninth Circuit's decision.
In Johnson v. Britton, 290 F.2d 355 (D.C. Cir.), cert. denied, 368 U.S. 859 (1961), the claimant worked only 69% of the workdays during the year before his injury, and thus he falls outside of the Ninth Circuit's "75% rule." Id. at 356-357 (claimant was employed on a 5-day week basis and worked 180 days during the year preceding his injury). Johnson's conclusion that Sec tion 910(c), rather than Section 910(a), governed deter mination of the claimant's average annual earnings in that case is therefore consistent with the decision below.
The Seventh Circuit's decision in Strand v. Hansen Seaway Service, Ltd., 614 F.2d 572 (1980), also does not conflict with the Ninth Circuit's ruling in this case. The claimant in Strand appears to have worked 84% of the workdays in the year preceding his injury (252 out of 300, see Matulic v. Director, OWCP, 154 F.3d 1052, 1058 n.4 (9th Cir. 1998)), but the Seventh Circuit did not apply Section 910(a) because the port where he worked was open only 36 weeks a year and thus his employment was "seasonal." Strand, 614 F.2d at 573, 575. That ruling is consistent with that of the court below, which stated that the seasonal nature of employment would be an independent reason for departing from Section 910(a) and employing Section 910(c). Pet. App. 10; see id. at 11-12 (distinguishing Strand as case in which there were fixed determinable periods of inactivity in the em ployer's operation).
Based on the decision in New Thoughts Finishing Co. v. Chilton, 118 F.3d 1028 (5th Cir. 1997), petitioners predict (Pet. 11) that "[t]he Fifth Circuit is unlikely to follow the '75 percent rule.'" In that case, however, the "parties and the ALJ agree[d] that the computation of [claimant's] average annual earnings is governed by Section 10(c)" and thus the court did not address the factors governing when Section 910(c) applies instead of Section 910(a). 118 F.3d at 1030.
c. Petitioners also err in contending (Pet. 12-14) that the decision below is inconsistent with this Court's decision in Metropolitan Stevedore Co. v. Rambo, 521 U.S. 121 (1997). Rambo did not address the calculation of a claimant's pre-injury average weekly wage under 33 U.S.C. 910(a)-(d). Rather, it held that, under 33 U.S.C. 908(h), a nominal compensation award may be appro priate when there is a significant possibility that the worker's wage-earning capacity, although presently unaffected, may fall below the level of his pre-injury wages sometime in the future. 521 U.S. at 137-138.
Petitioners rely on Rambo's observation (521 U.S. at 133) that its interpretation of Section 908(h) promotes accuracy over finality. See Pet. 13. But this case does not involve the question of how Section 908 strikes the balance between accuracy and finality. Instead, it involves the question of how Section 910 strikes the balance between accuracy and administrative efficiency. As already discussed, the very existence of Section 910(a) reflects Congress's judgment that administrative efficiency justifies some degree of inaccuracy. And because Section 910(c) is more difficult to apply, it does not invariably lead to greater accuracy.
2.Petitioners next contend (Pet. 19-23) that the court of appeals erred in holding that Price's permanent total disability award should not be reduced by the amount of his concurrent permanent partial disability award. That contention is without merit and does not warrant review.
a. Price received a compensation award for the permanent partial disability caused by his 1979 injury and the corresponding diminution in his wage earning capacity. Nearly 20 years later, Price became totally disabled, depriving him of his residual wage earning capacity. The court of appeals correctly recognized that unless Price receives full concurrent compensation awards for each distinct loss of wage-earning capacity, his total loss of wage-earning capacity will not be fully compensated. Pet. App. 15; see Hastings v. Earth Satel lite Corp., 628 F.2d 85, 91 (D.C. Cir. 1980) ("Because compensation for [claimant's] original loss of earning capacity was already addressed in the permanent-partial award, logic and fairness require that the permanent- partial disability award continue concurrently with the permanent-total award.").
Price's receipt of both awards does not constitute "double-dipping" in violation of 33 U.S.C. 908. As the court of appeals explained, concurrent awards would overcompensate a claimant if they do not each remedy a distinct loss of wage-earning capacity. Pet. App. 13. The court noted that this could occur if the claimant's wage-earning capacity increased after his partial dis ability award had been fixed, so that his total disability award would be based, in part, on a loss of wage-earning capacity that was already accounted for in the partial disability award. Based on the ALJ's unchallenged finding, however, the court concluded that although Price's wages increased following his return to work, that increase did not reflect an increase in wage-earning capacity. Id. at 20; see Metropolitan Stevedoring Co. v. Rambo, 515 U.S. 291, 301 (1995) (noting that wage increase due to inflation would not reflect an increase in wage-earning capacity). Thus, each of the concurrent awards compensates for a distinct loss of wage-earning capacity, adding up to his entire wage- earning capacity, and no overcompensation results from their concurrent payment in full.
b.Petitioners contend (Pet. 19) that the court's concurrent award "is contrary to the uniform rule in four other judicial circuits." The cases on which peti tioners rely, however, involve multiple injuries from a single accident or time of employment, and are based on the principle that a permanent total disability award presupposes a loss of all earning capacity, subsuming any lesser earning-capacity losses from the same inci dent or time of employment. Rupert v. Todd Shipyards Corp., 239 F.2d 273, 276-277 (9th Cir. 1956) (claimant cannot obtain scheduled permanent partial disability award for facial disfigurement resulting from the same accident as other injuries which totally and permanently disabled him; total disability award "presupposes a permanent loss of all earning capacity"); Korineck v. General Dynamics Corp., 835 F.2d 42, 43-44 (2d Cir. 1987) (claimant who received permanent total disability award for back injury cannot also obtain scheduled permanent partial disability award for hearing loss that, although unrelated to the back injury, arose out of the same employment period; total disability award "serves as full replacement for lost earning capacity"); ITO Corp. v. Green, 185 F.3d 239, 242-243 (4th Cir. 1999) (combined amount of permanent partial disability awards for injury to ankle and to shoulder incurred in the same accident cannot exceed the compensation em ployee would receive on a permanent total disability claim; "[t]o hold otherwise would be to conclude that the whole may be less than the sum of its parts"). The court below correctly distinguished those cases as ones in which the permanent partial disability awards improp erly "compensate[d] an employee for a loss of earning capacity that is accounted for in another award." Pet. App. 13 (distinguishing Rupert, Korineck, and ITO Corp.). In contrast, in this case, respondent first suf fered a permanent partial disability and then suffered a permanent total disability, and each injury caused a distinct loss of wage-earning capacity.
c. Petitioners also cite Bunol v. George Engine Co., 996 F.2d 67 (5th Cir. 1993), as conflicting with the decision below. See Pet. 20. But Bunol merely stated that "a party cannot receive temporary total benefits and permanent partial benefits at the same time." 996 F.2d at 69. That statement has no bearing on the ques tion presented here-whether a claimant can receive compensation for successive injuries that cause distinct losses in earning capacity.
Contrary to petitioners' contention (Pet. 21-22), the decision below is also fully consistent with the D.C. Circuit's decision in Crum v. General Adjustment Bureau, 738 F.2d 474 (1984). In that case, the court of appeals rejected the employer's argument that awarding claimant a permanent total disability award after he received a permanent partial disability award "would result in compensation for more than 100 percent." Id. at 478. The court's statement, id. at 480, that the total disability award should be adjusted to take account of the prior award merely meant, as the court below rec ognized (Pet. App. 19), that a concurrent total disability award should compensate only for the loss of claimant's residual wage-earning capacity. Any such adjustment is unnecessary in this case because respondent's per manent total disability award is based solely on the residual earning capacity that he retained after his 1979 injury.
3.Finally, petitioner contends (Pet. 23-25) that the court of appeals erred in holding that the maximum compensation limit set forth in 33 U.S.C. 906(b) applies to each of claimant's concurrent awards individually, not to their combined totals. That contention is also without merit and does not warrant review.
a.Section 906(b)(1) limits the weekly amount of "[c]ompensation for disability" that an injured worker may receive equal to 200% of the national average weekly wage. 33 U.S.C. 906(b)(1). That limit applies to each award individually, not to the total compensation payable under both. As the court explained, the same phrase-"compensation for disability"-is used else where in the statute to refer to compensation for a single claim. Pet. App. 22-23; see 33 U.S.C. 908(a)-(c), 919(f). Moreover, the term "[d]isability" is defined as "incapacity because of injury to earn the wages which the employee was receiving at the time of injury." 33 U.S.C. 902(10) (emphasis added). That definition focuses on the loss of wage-earning capacity created by a particular injury and supports the conclusion that Sec tion 906(b)(1) applies to compensation liability created by a particular disability and injury, and not to all compensation liability emanating from all injuries.
In addition, as the court of appeals noted (Pet. App. 23-24), the House Report accompanying the 1972 Amendments to the Act stated that one purpose of adequate workmen's compensation is "to strengthen the employer's incentive to provide the fullest measure of on-the-job safety." H.R. Rep. No. 1441, 92d Cong., 2d Sess. 1 (1972). The court was therefore appropriately reluctant to adopt an interpretation of Section 906(b)(1) that would undercut Congress's intent to provide an incentive to employers to ensure the safety of previously injured workers who are already receiving compensation equal to the Section 906(b)(1) limit.
Furthermore, the Director of the Office of Worker's Compensation has interpreted Section 906(b)(1) to apply to compensation created by a particular disability. See Carpenter v. California United Terminals, No. 03-0213, 2003 WL 22866804, at *5 (DOL Ben. Rev. Bd. Nov. 25, 2003). The Director's interpretations of the LHWCA are entitled to weight. Rambo, 521 U.S. at 136.
Decisions interpreting a limitation-on-recovery pro vision formerly in the Act further support that inter pretation. Under 33 U.S.C. 914(m), in effect between 1927 and 1972, "[t]he total compensation payable under [the] Act for injury or death shall in no event exceed the sum of $7,500 [later increased to $24,000]." Act. of Mar. 4, 1927, ch. 509, § 14, 44 Stat. 1434. Courts interpreted that provision to apply to the compensation payable for each claim, not to the combined benefits payable for multiple claims. Pillsbury v. Liberty Mut. Ins. Co., 182 F.2d 743, 745 (9th Cir. 1950); International Mercantile Marine Co. v. Lowe, 93 F.2d 663, 665-666 (2d Cir.), cert. denied, 304 U.S. 565 (1938).
Finally, the court of appeals' holding that Section 906(b) applies separately to each award does not conflict with the view of any other circuit. The D.C. Circuit is the only other court to address the issue, and it has stated that Section 906(b)(1) operates to restrict each award individually, not the combined awards in the aggregate. Hastings, 628 F.2d at 91. Review of that issue is therefore unwarranted.


Plaintiff United States of America (the "United States" or "Government") moves pursuant to § 2(b) of the Antitrust Procedures and Penalties Act (the "Tunney Act"), 15 U.S.C. § 16(b )-(h) for entry of a final judgment (the "Consent Decree") settling its antitrust claims against Defendant Keyspan Corporation ("Keyspan"). This application presents a novel issue of law: whether the Department of Justice can seek disgorgement for a Sherman Act violation. This Court answers that question in the affirmative. For the following reasons, the Government's motion for entry of the Consent Decree is granted.
On June 11, 2010, the Government filed its Response to Public Comments. On July 20, 2010, the Government moved for entry of the Consent Decree. On August 12, 2010, this Court permitted the Public Service Commission of the State of New York ("PSCNY") to file a reply to the Government's Response to Public Comments. On October 12, 2010, this Court held a hearing (the "October Hearing"), posed questions to the parties, and directed the Government to provide a declaration concerning its calculations of Keyspan's net revenues under the Swap. On October 26, 2010, the Government submitted the declaration of Oliver M. Richard, Assistant Chief in the Economic Litigation Section of the Antitrust Division of the Department of Justice, which described those calculations.
"While the Tunney Act was designed to prevent 'judicial rubber stamping' of proposed Government consent decrees, the Court's role in making the public interest determination is nonetheless limited. The Court's function is not to determine whether the proposed [d]ecree results in the balance of rights and liabilities that is the one that will best serve society, but only to ensure that the resulting settlement is 'within the reaches of the public interest. '" United States v. Alex. Brown & Sons, Inc., 963 F. Supp. 235, 238 (S.D.N.Y. 1997) (quoting United States v. Microsoft Corp., 56 F.3d 1448, 1460 (D.C. Cir. 1995)). In making this determination, "[t]he [c]ourt is not permitted to reject the proposed remedies merely because the court believes other remedies are preferable. [Rather], the relevant inquiry is whether there is a factual foundation for the government's decisions such that its conclusions regarding the proposed settlement are reasonable." United States v. Abitibi-Consolidated Inc., 584 F. Supp. 2d 162, 165 (D.D.C. 2008); see also Massachusetts v. Microsoft Corp., 373 F.3d 1199, 1236 (D.C. Cir. 2004) ("Under the Tunney Act, the district court's 'public interest' inquiry into the merits of the consent decree is a narrow one .... "). A court must limit its review to the issues in the complaint and give "due respect to the [government's] perception of ... its case .... " Microsoft, 56 F.3d at 1459-60; see also United States v. Bleznak, 153 F.3d 16,20 (2d Cir. 1998) ("The range of materials that are 'determinative' under the Tunney Act is fairly narrow."). "A court may, in its discretion, invoke additional procedures when it determines such proceedings may assist in the resolution of issues raised by the comments." United States v. Enova Corp., 107 F. Supp. 2d 10, 17 (D.D.C. 2000).
The Government submits that it has never pursued disgorgement as a remedy for a Sherman Act violation,2 but contends that disgorgement of Keyspan's revenues will best remedy its anticompetitive conduct.
Disgorgement is an equitable, as opposed to legal, remedy derived from the court's equity powers. "The primary purpose of disgorgement is not to compensate [victims] ... [but rather to] forc[e] a defendant to give up the amount by which he was unjustly enriched. The emphasis on public protection, as opposed to simple compensatory relief, illustrates the equitable nature of the remedy." Sec. & Exchange Comm'n v. Cavanagh, 445 F.3d 105, 119 (2d Cir. 2006). There are no decisions concerning a district court's power to order disgorgement to remedy a Sherman Act violation. However, because the Court of Appeals squarely addressed whether disgorgement is available to remedy violations of the securities laws, this Court begins there.
In Cavanagh, the Court of Appeals upheld the equitable disgorgement of profits earned from an illegal "pump and dump" scheme. 445 F.3d at 109-10, 119-20. The Court of Appeals held that a district court's power to compel disgorgement turns on whether the "remedy survives the Supreme Court's teachings in Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc. .... [regarding] the proper scope of equitable remedies in the federal courts." Cavanagh, 445 F.3d at 116-17. In Grupo Mexicano, the Supreme Court held that the equity jurisdiction of the federal courts derives from the Judiciary Act of 1789 and therefore is the same as "the jurisdiction in equity exercised by the High Court of Chancery in England at the time of the adoption of the Constitution and the enactment of the original Judiciary Act .... " 527 U.S. 308, 318 (1999) (quotations omitted). Accordingly, in Cavanagh, the Court of Appeals held that the question of "whether the [d]istrict [c]ourt acted beyond its equitable powers requires an inquiry into whether the remedies available at chancery in 1789 included disgorgement .... " Cavanagh, 445 F.3d at 118.
However, Cavanagh does not end the analysis because limitations may still exist under traditional equity and antitrust principles. As to equity jurisdiction, "[u]nless otherwise provided by statute, all the inherent equitable powers of the District Court are available for the proper and complete exercise of that jurisdiction." Porter v. Warner Holding Co., 328 U.S. 395, 398 (1946); see Mitchell v. Robert DeMario Jewelry, Inc., 361 U.S. 288, 291 (1960) ("'Unless a statute in so many words, or by a necessary and inescapable inference, restricts the court's jurisdiction in equity, the full scope of that jurisdiction is to be recognized and applied.'" (quoting Porter, 328 U.S. at 398)); Fed. Trade Comm'n v. Mylan Labs., Inc., 62 F. Supp. 2d 25, 37 (D.D.C. 1999) ("The comprehensiveness of this equitable jurisdiction is not to be denied or limited in the absence of a clear and valid legislative command." (quoting Porter, 328 U.S. at 398)). Section 1 of the Sherman Act prohibits "[e]very contract, combination ... or conspiracy, in restraint of trade or commerce." 15 U.S.C. § 1. Section 4 invests a district court with "jurisdiction to prevent and restrain" § 1 violations, and charges "the Attorney General [with the duty] to institute proceedings in equity to prevent and restrain such violations." 15 U.S.C. § 4 (emphasis added). These provisions are broad and contain no language divesting a court of its "inherent equitable powers." See Porter, 328 U.S. at 398.
Moreover, disgorgement comports with established principles of antitrust law. When fashioning a consent decree in an antitrust action, district courts "are invested with large discretion to model their judgments to fit the exigencies of the particular case." Int'l Boxing Club of N.Y., Inc. v. United States, 358 U.S. 242, 253 (1959) (quotations omitted). A consent decree should, among other things, "deprive the antitrust defendants of the benefits of their conspiracy." Int'l Boxing Club, 358 U.S. at 253 (quotations omitted); see also United States v. Grinnell Corp., 384 U.S. 563, 577 (1966) ("[A]dequate relief in a monopolization case should put an end to the combination and deprive the defendants of any of the benefits of the illegal conduct .... "); United States v. E. I. du Pont de Nemours & Co., 366 U.S. 316, 368 (1961) ("Those who violate the Act may not reap the benefits of their violations .... " (quotations omitted)). Disgorgement accomplishes that goal. In fact, there appears to be little disagreement among commentators about the propriety of disgorgement as an antitrust remedy. See Phillip E. Areeda et al., Antitrust Law ¶ 325a (3d ed. 2007) ("[E]quity relief may include, where appropriate, the disgorgement of improperly obtained gains."); Einer Elhauge, Disgorgement as an Antitrust Remedy, 76 Antitrust LJ. 79, 79 (2009) ("One's first reaction might well be that perhaps the rare usage reflects some underlying insecurity about whether disgorgement really is a permissible antitrust remedy. But there is surprisingly little doubt that equitable antitrust remedies include requiring violators to disgorge any illegally obtained profits.").
Disgorgement is particularly appropriate where, as here, the anticompetitive conduct in question has ceased. As discussed below, this Court defers to the Government's conclusion that restitution—i.e., making New York City consumers whole—is likely unavailable. Further, the Swap has expired and, unlike many other antitrust actions, there are no assets to be divested. Thus, "the exigencies of [this] case" are that, absent disgorgement, the Government is without recourse to remedy Keyspan's anticompetitive conduct. Int'l Boxing Club, 358 U.S. at 253; accord Ford Motor Co. v. United States, 405 U.S. 562, 573 (1972) ("The District Court is clothed with large discretion to fit the decree to the special needs of the individual case." (quotations omitted)). A rejection of disgorgement could incentivize other generators to manipulate the electricity markets using derivative instruments that expire in the short term, with the understanding that they will be permitted to retain their earnings because restitution for consumers is unavailable. Accordingly, given a sufficient factual undergirding for the Government's calculations, this Court has the power to order disgorgement of Keyspan's revenues.
[t]he district courts of the United States shall have jurisdiction to prevent and restrain [RICO] violations . . . including, but not limited to: ordering any person to divest himself of any interest, direct or indirect, in any enterprise; imposing reasonable restrictions on the future activities or investments of any person, including, but not limited to, prohibiting any person from engaging in the same type of endeavor as the enterprise engaged in, the activities of which affect interstate or foreign commerce; or ordering dissolution or reorganization of any enterprise, making due provision for the rights of innocent persons.
18 U.S.C. § 1964. The D.C. Circuit held that "[t]his language indicates that [RICO] jurisdiction is limited to forward-looking remedies that are aimed at future violations" and that disgorgement "is a quintessentially backward-looking remedy focused on remedying the effects of past conduct to restore the status quo." United States v. Philip Morris USA, Inc., 396 F.3d 1190, 1198 (D.C. Cir. 2005). The Second Circuit adopted a less restrictive approach, holding that disgorgement is available to remedy a RICO violation only if its purpose is forward-looking. See United States v. Carson, 52 F.3d 1173, 1182 (2d Cir. 1995) ("Ordinarily, the disgorgement of gains ill-gotten long in the past will not serve the goal of preventing and restraining future violations unless there is a finding that the gains are being used to fund or promote the illegal conduct, or constitute capital available for that purpose." (internal quotations omitted)).
These decisions are not controlling. First, the Sherman Act does not contain the same limiting provisions found in RICO. See United States v. Lane Labs-USA Inc., 427 F.3d 219,233 (3d Cir. 2005) (distinguishing RICO from the Federal Food, Drug and Cosmetic Act because the latter "gives blanket authority to district courts to restrain violations" whereas RICO "listed several specific types of relief aimed at [preventing] ... future violations"). Moreover, Philip Morris and Carson do not evaluate disgorgement in the antitrust context.5 Antitrust law is both forward- and backward-looking. See Int'l Boxing Club, 358 U.S. at 252 ("The decree should (1) put an end to the combination or conspiracy when that is itself the violation; (2) deprive the antitrust defendants of the benefits of their conspiracy; and (3) break up or render impotent the monopoly power which violates the Act" (quotations omitted)). Accordingly, disgorgement is available to remedy a Sherman Act violation.
As to the factual basis for the Government's revenue calculation, at the Court's request, the Government submitted the declaration of Dr. Oliver M. Richard, an economist responsible for supervising analyses performed by Department of Justice staff economists. In his declaration, Richard outlines the formulas set forth in the Swap for determining the parties' respective payment obligations, applies those formulas to the market prices established in the relevant electricity capacity auctions, and provides a month-by-month breakdown of payments made by Keyspan and the Bank under the Swap. (Richard Decl. at 2-3.) Based on that analysis, Richard concluded that Keyspan earned net revenues of $48,960,000. Notably, the PSCNY—which initially objected to the lack of support for the Government's calcu1ations-"now concurs in the determination of Keyspan's net Swap revenues." (United States's Submission of Decl of Oliver M. Richard in Supp. of Its Mot. To Enter Final J.) This Court has no reason to question the Government's calculations. See Abitibi-Consolidated, 584 F. Supp. 2d at 165-66 (relying on the declaration of a Department of Justice economist in ordering divestiture); United States v. SBC Commc'ns, Inc., 489 F. Supp. 2d 1, 19-24 (D.D.C. 2007) (same). Thus, the Government's revenue calculations are adequately supported by the record.
The adequacy of the disgorgement amount must be evaluated in view of the Government's decision to settle its claims and seek entry of the Consent Decree. When a litigant chooses to forgo discovery and a trial in favor of settlement, full damages cannot be expected. See In re Linerboard Antitrust Litig., 321 F. Supp. 2d 619,633 (E.D. Pa. 2004) (compiling decisions approving settlements for a fraction of the total damages sought); see also In re Mi1ken and Assocs. Sec. Litig., 150 F.R.D. 46, 54 (S.D.N.Y. 1993) (Pollack, J.) ("[T]he Second Circuit has held that a settlement can be approved even though the benefits amount to a small percentage of the recovery sought."). The issues raised in the Complaint are complex and discovery would have been extensive. Thus, the Government is entitled to deference in choosing to pursue settlement in this action. See Alex. Brown, 963 F. Supp. at 239.
$12 million in disgorgement is also an adequate deterrent. It represents 25% of Keyspan's net revenues under the Swap. Moreover, disgorgement for a Sherman Act violation was never judicially sanctioned prior to this action. Future manipulators of electricity markets or those who seek to leverage derivative products in the restraint of trade now face the prospect of disgorgement in addition to other remedies. This case is an important marker for enforcement agencies and utility regulators alike. Approving disgorgement as part of the Government's arsenal tilts incentives back in favor of competitive bidding and deters the use of derivatives as tools to manipulate a market.
Finally, this Court rejects the notion that the Consent Decree should only be approved if the disgorged proceeds are returned to New York City consumers. While such relief might be optimal, payment of the disgorged proceeds to the Treasury is nevertheless "within the reaches of the public interest." Alex. Brown, 963 F. Supp. at 238 (quotations omitted). It can be effectuated without incurring transaction costs and inures to the public benefit. See Sec. & Exchange Comm'n v. Bear, Steams & Co. Inc., 626 F. Supp. 2d 402, 419 (S.D.N.Y. 2009) (answering "the question of how [disgorged money] can be used to do 'the greatest good for the greatest number of people'" by ordering its transfer to the "Treasury to be used by the Government for its operations").
Moreover, the Government raises valid concerns regarding potential violation of the filed-rate doctrine.
"The filed rate doctrine bars suits against regulated utilities grounded on the allegation that the rates charged by the utility are unreasonable. Simply stated, the doctrine holds that any 'filed rate'—that is, one approved by the governing regulatory agency— is per se reasonable and unassailable in judicial proceedings brought by ratepayers."
Wegoland Ltd. v. NYNEX Corp., 27 F.3d 17,18-19 (2d Cir. 1994); see also Keogh v. Chi. & Northwestern Ry. Co., 260 U.S. 156, 163 (1922) (holding that the filed rate doctrine bars recovery for antitrust damages against carriers colluding to set artificially high shipment rates). In view of that prohibition, return of the disgorged proceeds to New York City electricity customers could circumvent the filed-rate doctrine. A court must extend "deference to the Government's evaluation of the case and the remedies available to it." Alex. Brown, 963 F. Supp. at 239.
For the foregoing reasons, the Government's motion for entry of the final judgment is granted. The Clerk of the Court is directed to terminate the motions pending at Docket Nos. 25 and 27.
3. Some courts have recognized limitations on Grupo Mexicano's scope. See, e.g., United States ex rel. Rahman v. Oncology Assocs., 198 F.3d 489,496 (4th Cir. 1999) (Grupo Mexicano's holding limited to actions at law because it did not involve "a situation in which equitable remedies were claimed"); see also In re Focus Media Inc., 387 F.3d 1077, 1085 (9th Cir. 2004) ("Grupo Mexicano does not prohibit a preliminary injunction in this case. [Plaintiff] has pleaded a cause of action for fraudulent conveyance, and ... for constructive trust, which is equitable in nature."); Quantum Corporate Funding, Ltd. v. Assist You Home Health Care Servs. of Va., 144 F. Supp. 2d 241,250 (S.D.N.Y. 2001) ("[C]ourts since Grupo Mexicano have found that where plaintiffs seek both equitable and legal relief ... , a court retains its equitable power to freeze assets."). However, Cavanagh is silent on these limitations and appears to accept Grupo Mexicano's applicability to any exercise of a federal court's equity powers. This Court need not examine this issue further because an analysis under traditional equity and antitrust principles is required.
4.To the extent that disgorgement of wrongly obtained assets due to securities fraud differs from the relief sought here—i.e., disgorgement of revenues earned under a lawful agreement executed for the purpose of restraining trade—Cavanagh's analysis is broad and applies with equal force in the antitrust context.
5. Carson is also distinguishable because the plaintiff sought disgorgement of funds earned long in the past, more than eight years prior to the filing of the action. 52 F.3d at 1182.


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Clifford Darton is recommended in both Chambers UK and the Legal 500 which have previously described him as a “razor-sharp intellect”, “a force to be reckoned with” and “one of those rare advocates who is as strong on his feet as in drafting advice and pleadings”.
Specialising in commercial/chancery work and in property cases, Clifford is particularly well known for his expertise in relation to the Water Industry and Environmental Law including its criminal provisions. He has appeared in over 40 reported cases in the High Court and in the Court of Appeal and is instructed to appear in the Supreme Court as lead counsel in the much followed case of MWB Business Exchange Centres Ltd v Rock Advertising Ltd  3 WLR 1519.
Clifford acts in most types of commercial and insolvency litigation including Pre-emptive remedies, Minority Shareholder Actions, claims against Directors for breach of duty, claims for Unjust Enrichment or for Breach of Fiduciary duties, Shareholder Disputes, Partnership Disputes, claims under the Commercial Agents Directive, Directors’ Disqualifications, actions for Breach of Confidence and Database Rights and proceedings to enforce Restraint of Trade Covenants. He is particularly sought after in claims arising out of guarantees and indemnities having appeared in the landmark case of Johnson v. Davis (1999) Ch.117 CA.
MWB Business Exchange Centres Ltd v Rock Advertising Ltd  3 WLR 1519 CA, Times, July 22, 2016 (anti-oral variation clauses and the rule in Foakes v Beer).
Hniazdzilau v Vajgel, Enriquez and Bronovets  EWHC 15 (Ch) (Acting as leading junior for the successful Belarusian claimant in a 12 day trust action to recover ownership of a $6 million property in Minsk).
Wilson & Sharp Investments v Harbourview Developments  EWCA Civ 1030 (Injunction to restrain a winding up petition on a £1.2 million interim certificate under a JCT Contract.
Intellimedia Systems Ltd v. Doyle  EWHC 1200 (Ch) (acting for the successful Hong Kong claimant in a 7 day action to rectify a company’s register and recover shares).
Earp v Kurd (costs)  EWCA Civ 1482 (Recovery of Mortgagee’s costs).
Earp v Kurd  BPIR 965 (ChD) (Established that a (circa (£800,000) legal charge over a bankrupt’s property was not a sham after a 7 day trial in the Chancery Division brought by a trustee in bankruptcy).
Costello v. MacDonald & Otrs  EWCA Civ 930 CA (Claim in restitution for unjust enrichment against the directors of a building company).
County Garages (Birmingham) Ltd v. Manton  EWCA Civ 950 (six week trial in Birmingham Mercantile Court of a claim for rectification of a Shareholders Agreement and attendant damages).
Johnson v EBS Trustees  Lloyd’s Rep. 309 CA (Abuse of confidence and rescission for breach of fiduciary duties on the part of a solicitor trustee).
In the Matter of Simon Box Diamonds (2002), LTL 25/6/2002 Ch.D (Appeal against a director’s disqualification).
Greene King Plc v. Stanley  B.P.I.R 491 CA (Guarantees, IVA’s and undue influence).
Stimpson v. Smith (1999) Ch 340 CA (The rights of contribution between co-sureties on settlement with their joint creditor).
Johnson v. Davis  3 WLR 1299 CA (Whether an IVA under Insolvency Act 1986 released a co-debtor).
With a background in chancery work Clifford Darton deals with almost all aspects of real and leasehold property but particularly mortgages, restrictive covenants, easements, claims in proprietary estoppel and disputes arising out of the sale of land. He continues to practice in some areas of more traditional chancery work such as Probate Disputes, Inheritance Act claims and Co-ownership of property disputes and is currently defending (as leading junior) a £2.2 million breach of trust/tracing claim brought by the Estate of a German National.
Hogg v Eddery  EWHC 942 (Ch) (Successful appeal against summary judgment on a £900,000 plus claim on a contract for the sale of land).
Bushan v Chand  EWHC 1298 (Ch) (Four week trial in the Chancery Divisions of constructive trust claim to some 40 commercial and residential properties in Birmingham).
Dibble v. Pfluger  1 FLR 659 CA (constructive trust and the application of the dicta in Oxley v. Hiscock).
Walters v. Smee  EWHC 2902 Ch (Testamentary disposition and undue influence).
Jones v. Cleanthi  1 WLR 1604 CA (The statutory extinguishment of an easement under the provisions of the Housing Act 1985).
Horn v. Phillips  EWCA Civ, 1877 CA (The exclusion of extrinsic evidence in a boundary dispute where the terms of the conveyance were clear).
West Sussex Properties Ltd v. Chichester District Council (2000) AER (D) 887 CA (Rescission in equity for mutual mistake and equitable relief).
Crewe Services & Investment Corporation v. Silk  2 EGLR 1 CA (assessment of damages for diminution in the value of a lessor’s reversion during the continuance of a lease).
Clifford Darton regularly acts in environmental cases in both the civil and criminal courts. He is an acknowledged expert in the field of environmental permits and in the regulatory framework that governs the Water Industry.
Clifford acts for both claimants and defendants in claims for damages arising out of surface water flooding, damaged sewers and wayward watercourses particularly in respect of claims brought before the Technology and Construction Court. He most recently acted for the successful defendant in the test case of Oldcorn v Southern Water  EWHC 15 TCC.
Clifford’s clients include Water Companies, Local Authorities and private landowners, in fact anyone who finds themselves the victim of flooding.
Oldcorn v Southern Water  EWHC 15 TCC (Successfully defended, as leading junior, a seven day trial of a test claim for damages for flooding) .
Raglan Housing Association v. Southampton C.C  2 AER 44 CA (The definition of a watercourse).

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Craig Robertson, Partner-in-Charge of Wyatt's Lexington office, is a member of the Firm's Litigation & Dispute Resolution Service Team and he leads Wyatt's Equine & Gaming Service Area. He concentrates his practice in the areas of commercial litigation, construction, equine, banking, intellectual property, professional malpractice, insurance and appellate law.
Lexmark International, Inc. v. Static Control Components, Inc., United States District Court, Eastern District of Kentucky. Mr. Robertson served as counsel for Static Control Components, Inc. in a suit brought by Lexmark involving patent, copyright, antitrust and numerous other contract and tort claims. Lexmark sought damages of approximately 100 million dollars. Following a 5 week trial, the jury returned a complete defense verdict and Lexmark took nothing on its claims.
Forcht Bank, N.A. v. Fox Trot Corporation, Fayette Circuit Court, Lexington, KY. Mr. Robertson represented Forcht Bank in a 2.8 million dollar loan default and a 50 million dollar lender liability counterclaim. Summary Judgement was granted in favor of Forcht Bank on all claims.
Joseph Pope v. Kentucky School Boards Insurance Trust, Franklin Circuit Court, Frankfort, KY. Mr. Robertson currently represents the Board of Trustees of the Kentucky School Boards Insurance Trust in a 50 million dollar breach of fiduciary duty claim related to workers compensation and property/liability self-insurance funds. The case is on-going.
Fifth Third Bank v. Stone*Wall Farm, LLC, et. al., Fayette Circuit Court, Lexington, KY. Mr. Robertson represented Fifth Third Bank in a 15 million dollar loan default case. The trial court granted summary judgment in favor of Fifth Third for the full amount of its claims.
United States Achievement Academy v. Pitney Bowes, Inc. and Pitney Bowes Credit Corporation, United States District Court, Eastern District of Kentucky. Mr. Robertson represented Pitney Bowes, Inc. and Pitney Bowes Credit Corporation in an action brought by the United States Achievement Academy. The Plaintiff claimed that it leased certain printing equipment that proved defective and resulted in damages exceeding $1,000,000. The Plaintiff asserted claims for breach of contract, breach of warranty, fraud and negligence. The Trial Court granted summary judgment in favor of Pitney Bowes, Inc. and Pitney Bowes Credit Corporation on all claims.
H. Eugene Melton v. KEMSAC, Inc., et al., Clinton Circuit Court, Albany, KY. Mr. Robertson served as counsel for KEMSAC, Inc. and its four principal officers. Mr. Melton alleged that the company and its officers fraudulently induced him to purchase stock shortly before the company became insolvent. The claims asserted included securities fraud, corporate mismanagement, misrepresentation and negligence. The jury returned a complete defense verdict and awarded the plaintiff nothing on his claims.
John and Susan Moore v. William Landes, Fayette Circuit Court, Lexington, KY. Mr. Robertson served as counsel for William Landes in a suit brought by John and Susan Moore. The Moores alleged that they had been defrauded in the purchase of the thoroughbred colt TIGER. The matter was arbitrated and a decision was rendered in favor of Mr. Landes. As a result, the Plaintiffs took nothing on their claims.
Dr. David Lambert v. Ken Ramsey, Fayette Circuit Court, Lexington, Ky. Mr. Robertson served as counsel for Dr. David Lambert in an action brought against Ken Ramsey for breach of an oral contract to pay $250,000 worth of bonuses due to the racing success of the thoroughbred colt ROSES IN MAY. The jury returned a verdict in favor of Dr. Lambert for the full amount of his claim.
AGC Flat Glass North America, Inc. v. Pilkington, PLC and Saint-Gobain Ceramics and Plastics, Inc., Madison Circuit Court, Richmond, KY. Mr. Robertson represented Saint-Gobain Ceramics and Plastics, Inc. in a suit involving claims brought by AGC Flat Glass North America, Inc. AGC claimed that a NOx reduction technology created by Pilkington caused a premature failure of refractory products manufactured by Saint-Gobain and used by AGC in its Richmond, Kentucky glass manufacturing plant. AGC sought approximately 20 million dollars in damages. The case was resolved favorably prior to trial.
Fifth Third Bank v. Zayat Stables, LLC, Fayette Circuit Court, Lexington, KY. Mr. Robertson represented Fifth Third Bank in a 30 million dollar loan default case. Zayat Stables asserted numerous lender liability counterclaims. The matter was ultimately resolved in bankruptcy court.
H&R Mechanical Contractors, Inc. v. Codell Construction Co., Knox Circuit Court, Barbourville, KY. Mr. Robertson was counsel for Codell Construction Company in a construction dispute where the Plaintiff claimed that Codell had improperly performed its duties as construction manager, resulting in delay damages of approximately $350,000. The Trial Court dismissed the Complaint and Kentucky's Court of Appeals affirmed.
University of Kentucky v. Midland Engineering, Franklin Circuit Court, Frankfort, KY. Mr. Robertson served as counsel for the University of Kentucky in a suit brought by the University against Midland Engineering Company for a fire which occurred during remodeling of the University's Administration Building. The claims were for breach of contract and negligence. The case was settled favorably for the University.
Rodney Love v. Kern's Bakeries, Johnson Circuit Court, Paintsville, KY. Mr. Robertson defended Kern's Bakeries in a personal injury action involving a motor vehicle accident in which the Plaintiff claimed a brain injury and over $800,000 in damages. At trial, a directed verdict was entered in favor of Kern's Bakeries.
Stone*Wall Farm v. Ronald J. Bamberger, Fayette Circuit Court, Lexington, KY. Mr. Robertson served as counsel for Ron Bamberger in an action brought by Stone*Wall Farm concerning the thoroughbred colt LAWYER RON. Stone*Wall Farm alleged breach of contract and breach of fiduciary duty with regard to the racing career of LAWYER RON. Mr. Bamberger prevailed on Stone*Wall's claim that it was entitled to direct LAWYER RON's racing career. Following this favorable ruling, the remaining aspects of the case were settled.
JRN, Inc. v. CGU Insurance Co., United States District Court, Eastern District of Kentucky. Mr. Robertson represented JRN, Inc. in a breach of contract claim against CGU over $200,000 worth of damages to a JRN owned Kentucky Fried Chicken Restaurant. The issue was whether the damages were caused by a covered loss under a policy of insurance. The jury returned a verdict in favor of JRN.
Jeffrey Isham v. ABF Freight System, Inc., Fayette Circuit Court, Lexington, KY. Mr. Robertson defended ABF in an employment case where the Plaintiff claimed civil rights violations, conspiracy, malicious prosecution and abuse of process. The trial court granted summary judgment in favor of ABF.
Highest Professional AV Rating by Martindale-Hubbell Law Directory. Peer references stated that, "Craig is an excellent attorney and a zealous advocate for his clients. Top notch." "One of the most prepared attorneys I have ever practiced with or against." "One of the finest lawyers in Kentucky."
Best Lawyers® 2019 Lexington Litigation-Construction "Lawyer of the Year"
Best Lawyers® 2016 Lexington Litigation-Banking and Finance "Lawyer of the Year"

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Plaintiff-Appellant Jerry Goetz ("Goetz") appeals the district court's May 23, 2000 Order affirming the Secretary of Agriculture's order to pay assessments, late charges and civil penalties under the Beef Promotion and Research Act ("BPA"), 7 U.S.C. § 2901 et seq. Our jurisdiction arises under 28 U.S.C. § 1291 and we affirm.
In 1986, Congress passed the BPA to establish a procedure for financing a beef promotion and research program. The BPA authorized the Secretary of Agriculture ("Secretary") to issue a beef promotion and research order requiring that "each person making payment to a producer for cattle purchased from the producer shall . . . collect an assessment and remit the assessment to the [Cattlemen's Beef Promotion and Research] Board." 7 U.S.C. § 2904(8).
The Secretary thereafter issued the Beef Promotion and Research Order ("Order"), 7 C.F.R. § 1260.101 et seq. providing for an assessment of $1.00 per head of cattle sold. 7 C.F.R. § 1260.172(a). The assessment shall be collected by a "collecting person" meaning "the person making payment to a producer for cattle, or any other person who is responsible for collecting and remitting an assessment pursuant to the Act." 7 C.F.R. § 1260.106.
The Kansas Beef Council has been informed by producers selling cattle to you that you have collected from them a $1.00 per head assessment on cattle sold to you. The Kansas Beef Council has not received remittance of those dollars from you.
Aplt. App. at 998. The letter also informed Goetz that he was required to remit a $1.00 assessment on all cattle purchased from a producer and that his failure to do so might result in a civil penalty. A similar letter was sent in February and June 1992. Despite these warnings, Goetz never submitted any assessments from 1986 until October 29, 1993 when the Acting Administrator of the Agricultural Marketing Service filed a Complaint against Goetz.
The Complaint alleged willful violations of the BPA by Goetz. On September 25 and 26, 1996, a hearing was held before an Administrative Law Judge ("ALJ"). On February 26, 1997, the ALJ issued a Decision and Order finding Goetz liable for violating the BPA and ordering Goetz to pay past due assessments, late payment charges, and a civil penalty. On April 7, 1997, Goetz appealed the ALJ's decision to the Judicial Officer to whom the Secretary had delegated authority to act as a final deciding officer. On November 3, 1997, the Judicial Officer issued a Decision and Order modifying the ALJ's order.
Both parties filed motions for reconsideration of the Judicial Officer's order and on April 3, 1998, the Judicial Officer filed an order on the motions for reconsideration. The Judicial Officer's final order (1) ordered Goetz to cease and desist from violating the BPA; (2) assessed a civil penalty of $69,804.49; and (3) required payment of past due assessments and late payment charges of $66,913.00. Goetz appealed the Judicial Officer's order to the United States District Court for the District of Kansas. The district court affirmed the Judicial Officer's order in all respects.
Goetz now appeals to this Court and raises the following issues: (1) Did the district court err in affirming the Judicial Officer's decision that Goetz is liable for past due assessments, late payment charges, and civil penalties in the amount of $71,788.89 for the period of October 1, 1986 through December 31, 1989; (2) Did the district court err in affirming the Judicial Officer's decision that the Collection - Compliance Reference Guide did not establish a three year statute of limitations under the BPA; (3) Did the district court err in affirming the Judicial Officer's decision that Goetz is liable for past due assessments, late payment charges, and civil penalties on cattle which Goetz sold at sale barns; (4) Did the district court err in affirming the Judicial Officer's decision that Goetz is liable for past due assessments, late payment charges, and civil penalties on the cattle purchases listed on page 1032 of Appellant's Appendix in which Goetz had signed a non-producer status form; (5) Did the district court err in affirming the Judicial Officer's decision that Goetz is liable for past due assessments, late payment charges, and civil penalties on private treaty sales; and (6) Did the district court err in affirming the Judicial Officer's assessment of civil penalties.
"When reviewing a district court's decision affirming an agency action, we employ the identical standard of review utilized by the district court." American Colloid Co. v. Babbitt, 145 F.3d 1152, 1154 (10th Cir. 1998) (citation omitted). While the district court's decision is not given any deference, we do give deference to the agency's decision. Id. The agency's decision will be set aside "only if it is arbitrary, capricious, otherwise not in accordance with law, or not supported by substantial evidence." Id. (citing 5 U.S.C. § 706). "The court's function is exhausted where a rational basis is found for the agency action taken." Sabin v. Butz, 515 F.2d 1061, 1067 (10th Cir. 1975).
Goetz first challenges the Judicial Officer's determination of liability for past due assessments, late payment charges, and civil penalties for the period of October 1, 1986 through December 31, 1989. The amount of assessments, late payment charges, and civil penalties levied during this period were based on an auditor's estimates of the number of cattle Goetz had purchased during that period. The auditor estimated "these numbers based upon the average numbers for the period January 1, 1999 through June 30, 1994." Aplt. App. at 1005.
Goetz claims a regular business practice of keeping records for only three years. As a result, Goetz claims there is no relevant evidence which shows to what extent, if any, Goetz may be liable for unpaid assessments under the BPA prior to January 1, 1990. He contends that the auditor's estimation is only a speculative inference and is therefore not "substantial evidence" which could support the agency's determination. See 5 U.S.C. § 706(2)(E).
Goetz's arguments fail to take into account the other evidence considered by the Judicial Officer. In particular, the Kansas Beef Council notified Goetz in a June 1, 1987 letter of his failure to remit the $1.00 assessments that he had collected from various producers. A similar letter was sent again in February 1992. In addition, the auditor testified that he arrived at his estimates after comparing Goetz's tax returns for the 1986 to 1989 period with those from 1991 to 1994. The auditor found that "[b]ased upon income tax records, there was no significant difference in [Goetz's] operations for these periods." Aplt. App. at 1005.
We find substantial evidence to support the Judicial Officer's determination of Goetz's liability for past due assessments, late payment charges, and civil penalties for the period of October 1, 1986 through December 31, 1989. The June 1987 and February 1992 letters provide substantial evidence of Goetz's failure to remit the $1.00 assessments. Further, in light of the auditor's review of Goetz's tax records and upon his finding that there was no significant difference in Goetz's operations during the years of 1986 through 1994, the auditor's estimation is more than a speculative inference.
We also find that the Judicial Officer's reliance upon the auditor's estimation was not arbitrary or capricious. See Michigan Dept. of Educ. v. United States Dept. of Educ., 875 F.2d 1196, 1205-06 (6th Cir. 1989) (concluding that agency's use of a statistical sample as a basis for its findings of fact was not arbitrary or capricious). "[M]athematical and statistical methods are well recognized as reliable and acceptable evidence in determining adjudicative facts." Id.
Goetz also contends that allowing this estimation to shift the burden to Goetz violates his right to Due Process under the Fifth Amendment. Goetz offers only the following to support this proposition: "[d]ue process is ordinarily absent if a party is deprived of his or her property or liberty without evidence having been offered against him or her in accordance with established rules." 16B Am. Jur. 2d Constitutional Law § 960 (1998). However, the Court has already found substantial evidence to support the Judicial Officer's determination. Further, Goetz has failed to establish that reliance upon such evidence violated any established rules. Therefore, this Court finds no violation of due process.
Goetz next contends that the district court erred in affirming the Judicial Officer's decision that the Collection - Compliance Reference Guide ("Guide") did not establish a three year statute of limitations. The Guide requires that a collecting person "maintain records and documentation pertaining to the [assessment] for at least three years following each transaction." Aplt. App. at 1129. Goetz argues that this provision should be deemed to establish a three year statute of limitations.
"An action on behalf of the United States in its governmental capacity is subject to no time limitation, in the absence of congressional enactment clearly imposing it." United States v. Telluride Co., 146 F.3d 1241, 1244 (10th Cir. 1998) (citation omitted). Goetz does not direct the Court to any congressional enactment which establishes a statute of limitations on collection of assessments under the BPA. Goetz only points to the above provision of the Guide. However, as the Judicial Officer and the district court noted, the Guide is not a regulation which is binding upon the Secretary, collecting persons, or producers. Instead, it is merely a reference designed to assist the state beef councils in their collection procedures. The Court concludes there is no "congressional enactment clearly imposing" a statute of limitations concerning collection of assessments under the BPA. See id. Therefore, we find no error in the Judicial Officer's determination that the Guide does not establish a statute of limitations.
Goetz also argues that allowing enforcement proceedings to extend beyond three years violates his equal protection rights under the Fifth Amendment. Goetz claims he is being punished for not keeping records longer than the Guide required and therefore more is required of him than of other producers. In order to show an equal protection violation, Goetz would first have to show that he was treated differently than other "similarly situated persons." Jurado-Gutierrez v. Greene, 190 F.3d 1135, 1152 (10th Cir. 1999). However, Goetz offers no evidence that he was treated differently than anyone else. Therefore, we must reject Goetz's equal protection claim.
Goetz next claims the district court erred in affirming the Judicial Officer's decision that Goetz is liable for past due assessments, late payment charges, and civil penalties on cattle which Goetz sold at sale barns. While Goetz's characterization of the issue is limited to cattle sold at sale barns, he first argues that he is never required to collect assessments on cattle which he buys at sale barns. Goetz then contends that his cattle "swapping" operations, resulting in the sale of cattle at sale barns, qualify for an exemption from the BPA. The first argument addresses Goetz's liability for collecting assessments under the BPA as a collecting person. The second argument, however, asserts an exception under the BPA which relieves a seller from having to pay an assessment to the collecting person. We will address the issue of cattle purchased at sale barns before addressing the cattle swapping operations.
Goetz argues that whenever he purchases cattle from a sale barn, he is never the collecting person, as the sale barn is always the designated collecting person. Goetz's only support for this assertion is a portion of the Guide providing that sale barns "can be collecting persons." Aplt. App. at 1127. As stated above, the Guide is not part of the regulations, and it is not binding on the Secretary, collecting persons, or producers. However, even if the Guide were held to create a binding rule, the language quoted cannot fairly be construed to mean that sale barns are always the collecting persons. The language itself only provides that a sale barn can be a collecting person. In addition, as discussed below, the Judicial Officer found at least one occasion where Goetz certified that he was collecting the assessment despite the fact that he was purchasing cattle at a sale barn. Therefore, we find no error in the Judicial Officer's failure to deem all purchases from sale barns as exempt from collection responsibilities.
(i) Certifies that the person acquired ownership of cattle to facilitate the transfer of ownership of such cattle from the seller to a third party, (ii) Establishes that such cattle were resold not later than 10 days from the date on which the person acquired ownership; and (iii) Certifies that the assessment levied upon the person from whom the person purchased the cattle, if an assessment was due, has been collected and has been remitted, or will be remitted in a timely fashion.
7 C.F.R. § 1260.314(a)(2). Here, Goetz claims his cattle swapping operations always qualify for this exemption. He refers to evidence in the record suggesting that such cattle are never brought to his feed lots, but are immediately transferred to another sale barn. In support of his claim, he contends that holding the cattle for a longer period of time would be far too costly.
Even assuming Goetz's claims regarding his cattle swapping operations as true, we would still not be persuaded by his arguments. The regulation is clear that three requirements must be met before one achieves the exemption of 7 C.F.R. § 1260.314(a)(2). Goetz's claim that the mere resale within ten days achieves the exemption is simply not supported by the plain language of the regulation. Therefore, the Court declines to write a wholesale exemption from assessment for those sale barn transactions involving Goetz's swapping business.
Goetz also contends the district court erred in affirming the Judicial Officer's decision that Goetz is liable for past due assessments, late payment charges, and civil penalties on certain cattle purchases where Goetz signed a Certification of Non-Producer Status form.(1) In this case, the auditor obtained from the Kansas Beef Council several non-producer status forms signed by Goetz and submitted to various sale barns. On these forms, Goetz certified that he had collected $1.00 per head. Goetz claims that this was the sole basis for the Judicial Officer's determination of liability for these purchases.
Goetz challenges the Judicial Officer's findings on several grounds. First, he offers his own testimony that he did not collect the $1.00 assessment and that the forms had been erroneously completed by someone at the sale barn to show that an assessment had been collected. However, the ALJ and the Judicial Officer both rejected Goetz's argument denying collection of the $1.00 assessment and asserting the forms had been erroneously completed. The ALJ's decision was based on a credibility finding. The ALJ was in a far better position than this Court to judge the credibility of Goetz on this point. Therefore, it is proper to defer to the ALJ's judgment of credibility on this issue. See Webco Indus., Inc. v. NLRB, 217 F.3d 1306, 1311 (10th Cir. 2000) ("The ALJ's credibility resolutions deserve great weight to the extent they are based on testimonial evidence of live witnesses and the hearing judge has had the opportunity to observe their demeanor." (citation and quotation omitted)).
Goetz also contends that the auditor admitted that all of the cattle referred to in this section were resold within ten days of Goetz's purchase and should therefore be exempt from the BPA assessments. Goetz's arguments fail to address the issue at hand. The issue is not whether Goetz failed to pay assessments on the cattle he sold, but whether he failed to remit assessments collected on cattle he had purchased. Reselling cattle within ten days does not obviate the need to collect or remit assessments on cattle purchased from a producer. See 7 C.F.R. § 1260.314(a)(2)(iii). Rather, the non-producer exemption of 7 C.F.R. § 1260.314(a)(2) only means that Goetz would not be required to pay a collecting person an assessment upon Goetz's subsequent resale of the cattle. 7 C.F.R. § 1260.314(a). Here, the Judicial Officer, found that Goetz had collected the assessment on cattle he purchased, and that he failed to remit it to the proper beef council. The Judicial Officer found Goetz liable for these collections despite the fact that Goetz had resold the cattle within ten days. We find that the Judicial Officer's ruling was based upon a correct view of the regulation and Goetz's argument on this point is unpersuasive.
Next, Goetz argues that the cattle referred to in this section were part of his cattle swapping operations and he reargues the points asserted in the previous section. The Court has already fully addressed Goetz's arguments on this issue. For the reasons stated above, we reject this argument.
Finally, Goetz contends the purchase invoices for the cattle at issue do not indicate any deduction was withheld for the assessments. However, this evidence is not sufficient for this Court to alter the Judicial Officer's findings on this issue. It is not our duty to reweigh the evidence, our review is limited to determining whether substantial evidence exists to support the Judicial Officer's decision. N. Coal Co. v. Dir., Office of Workers' Comp. Programs, 100 F.3d 871, 873 (10th Cir. 1996). We hold that the certification of non-producer status provides substantial evidence to support the Judicial Officer's conclusion that Goetz had collected, but failed to remit, the assessments.
Private treaty sales are defined by the Guide as a sale between producers. Aplt. App. at 1133. Goetz argues there is never a designated collecting person in a private treaty sale and therefore he cannot be held liable for unpaid assessments from such a sale until the Secretary proves that the seller failed to remit the proper assessments for these transactions.
(a) A $1.00 per head assessment on cattle sold shall be paid by the producer of the cattle in the manner designated in § 1260.311.
(c) Failure of the collecting person to collect the assessment on each head of cattle sold as designated in § 1260.311 shall not relieve the producer of his obligation to pay the assessment to the appropriate qualified State beef council or the Cattlemen's Board as required in § 1260.312.
7 C.F.R. § 1260.310. According to the Guide, "[f]or private treaty sales, either the buyer or the seller may be the collecting person." Aplt. App. at 1129. However, "both are responsible for ensuring that the [assessment] is collected and remitted. Id.
[W]e must give substantial deference to [the agency's] interpretation of its own regulations. Our task is not to decide which among several competing interpretations best serves the regulatory purpose. Rather, the agency's interpretation must be given controlling weight unless it is plainly erroneous or inconsistent with the regulation.
Rocky Mountain Radar, Inc. v. F.C.C., 158 F.3d 1118, 1123 (10th Cir. 1998) (citation omitted).
Under the BPA, the buyer is generally regarded as the collecting person. See 7 C.F.R. § 1260.172(a) ("Except as prescribed by regulations approved by the Secretary, each person making payment to a producer for cattle purchased from such producer shall be a collecting person"); 7 C.F.R. § 1260.311 ("Collecting persons for purposes of collecting and remitting the $1.00 per head assessment shall be . . . each person making payment to a producer for cattle purchased").
The provisions of the Guide providing that the buyer or the seller can be a collecting person do not change the general provisions found in the regulations. The fact that either may be a collecting person does not affect the notion that buyers are generally regarded as the collecting person.
Nor does the Guide's statement that both the buyer and seller are responsible for the collection and remission of assessments alter the general assumption. The regulations provide that the collecting persons failure to remit the assessments does not alter the liability of the producer for paying the assessment. See 7 C.F.R. § 1260.310. Therefore, the Guide's provision that both the buyer and seller in private treaty sales are responsible for the unpaid checkoffs until they are remitted does not alter the regulations as Goetz suggests.
Goetz, as the person making payment for the cattle, is reasonably considered to be a collecting person. See 7 C.F.R. § 1260.172(a). In light of the deference we must give to the agency's interpretation of its regulations, we find that the Judicial Officer's finding that Goetz was the collecting person in these private treaty sales was not plainly erroneous or inconsistent with the regulations. See Rocky Mountain Radar, 158 F.3d at 1123.
Finally, Goetz challenges the assessment of penalties in the amount of $69,804.49. The statute provides: "If the Secretary believes that the administration and enforcement of this chapter or an order would be adequately served by such procedure, following an opportunity for an administrative hearing on the record, the Secretary may . . . (2) assess a civil penalty of not more than $5,000 for violation of such order." 7 U.S.C. § 2908(a)(2). Goetz argues that this allows only one $5,000 penalty after any administrative hearing. The Judicial Officer and the District Court held that this allowed a $5,000 penalty for each violation of the statute.
In interpreting a statute, the starting point is the statutory language. Absent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive. In other words, unless the statutory language is ambiguous or would lead to absurd results, the plain meaning of the statute must control.
Long v. Bd. of Governors of the Fed. Reserve Sys., 117 F.3d 1145, 1157 (10th Cir. 1997).
We find that the statutory penalty provision is not ambiguous. Goetz correctly perceives that a penalty may be assessed only after an administrative hearing. However, the statute does not say that only one $5,000 fine is allowed per hearing. On the contrary, it allows a penalty of not more than $5,000 for violation of an order.
Neither do we believe this interpretation would lead to absurd results. Allowing a $5,000 fine for each violation of the order helps to ensure that purposes of the BPA are attained, namely organizing "an orderly procedure for financing . . . a coordinated program of promotion and research." 7 U.S.C. § 2901(b). Goetz's interpretation (allowing only one $5,000 fine after any administrative hearing) would have little effect in deterring prospective violators of the BPA who, like Goetz buy and sell up to 200 cattle per day.
In sum, we hold that the judgment of the Judicial Officer should not be set aside. Therefore, the district court's Memorandum and Order is AFFIRMED.
1. These forms allow a buyer to obtain the 7 C.F.R. § 1260.314 exemption referred to above.