In view of the language, and the appellate court construction, of the Act as summarized in the preceding paragraph, the hearing judge concurs in the conclusion of Fontana v. Pennsylvania R. Co., supra, that there may be no deduction from the subrogation claim of the compensation insurer of any part of the attorney's fees and costs incident to the employee's recovery against the third party. In that case, the court said at pages 463, 464 of 106 F.Supp.:
'Thus, (under subsection (e)), the Act treats the recovery (by the employer) as a fund charged first with the expense of the litigation and then with the amounts paid for compensation and medical expenses and the employee becomes entitled only to any excess finally remaining. There is no reason why a recovery obtained against the third party by the employee rather than the employer should be distributed differently. The expense of securing the recovery is, as in equity it should be, a first charge against the fund itself. As such it is immaterial whether the fund was created in a suit brought by the employer or one brought by the employee.'
Cf. The Etna, supra, 138 F.2d at pages 40 and 41; Miranda v. City of Galveston, D.C.S.D.Tex.1954, 123 F.Supp. 889, 993.
The various state statutes cited by plaintiff which have been recently amended to provide for the deduction of the expenses of suit or attorney's fee from the subrogation claim of the employer or his insurance carrier, have no bearing on the intent of Congress in enacting the provisions of this Federal Act and such amendments emphasize that plaintiff's remedy lies in the power of Congress. See Travelers Insurance Company v. Cardillo, 2 Cir., 1955, 225 F.2d 137, 143.
And now, July 18, 1957, it is ordered that the Liberty Mutual Insurance Company, compensation carrier for Murphy-Cook & Company, third-party defendant herein, be paid the sum of $ 1012.40, deposited in this court pursuant to an order of September 13, 1956, without any deduction for counsel fees and costs as claimed by John C. Davis, plaintiff.
n1 In this case, the net amount to be retained by the plaintiff is over $ 6,487.60, less attorney's fees and costs of this suit, as shown by this computation:
Amount of settlement $7,500.00
Total amount paid by
compensation insurer 1,012.40
Net amount recovered by
plaintiff, less attorney's
fees and costs $6,487.60
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