Collins v. Donovan, s. 81-1330
| Decision Date | 15 October 1981 |
| Docket Number | 81-1358 and 81-1359,Nos. 81-1330,s. 81-1330 |
| Citation | 661 F.2d 705 |
| Parties | Lila COLLINS, Individually and for all others similarly situated, Appellee, v. Raymond J. DONOVAN, Secretary of the Department of Labor, John R. Igoe; HerbertL. Ford and Charles B. Fain, Commissioners of the Labor and IndustrialRelations Commission of the Department of Labor and Industrial Relations of theState ofMissouri, and Terry Allen, Director of the Missouri Division of EmploymentSecurity of the Department of Labor and Industrial Relations of the State ofMissouri, Appellants. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Michael Huff, argued, Merrick, Beamer, Wells & Slagg, Dana Kaiser, argued, Legal Aid of Western Missouri, Kansas City, Mo., for appellee.
Thomas S. Martin, Acting Asst. Atty. Gen., Washington, D. C., J. Whitfield Moody, U. S. Atty., Larry D. Coleman, Asst. U. S. Atty., Kansas City, Mo., Robert Greenspan, Margaret E. Clark, argued, Attys., Civ. Div., Dept. of Justice, Washington, D. C., for appellant Raymond J. Donovan.
John Ashcroft, Atty. Gen., Jan Bond, Asst. Atty. Gen., argued, Jefferson City, Mo., for appellants Terry Allen, John R. Igoe, Herbert L. Ford and Charles B. Fain.
Before LAY, Chief Judge, and HEANEY and ROSS, Circuit Judges.
Donovan 1 is the Secretary of the United States Department of Labor. Igoe, Ford and Fain are the commissioners of the Missouri Labor and Industrial Relations Commission. Allen is the director of the Missouri Division of Employment Security. The governor of Missouri, pursuant to the Trade Act of 1974 (19 U.S.C. §§ 2101 et seq.) and in accordance with an agreement with the Secretary of Labor administers payments to workers in industries affected by import competition as readjustment allowances (TRA benefits). Such payments are financed from a federal fund and any recovered overpayments return to that fund.
In March 1980 Collins applied and in April qualified for TRA benefits for a period of two years, ending October 21, 1980. She received benefits totaling $1,627 in April or May of 1980. Later in May, the Division of Employment Security notified Collins that she had received an overpayment of $1,584. The overpayment was caused by an error in the Division's computation and was in no way the fault of Collins.
At various times after May 1980 Collins again became eligible for TRA benefits; those benefits were not paid to her but were withheld and credited toward restitution of the overpayment pursuant to 29 C.F.R. § 91.58(b). Only a portion of the $1,584 had been recouped at the time of this law suit. Collins challenges the regulation promulgated by the Secretary which allowed recoupment of the overpayment. On October 17, 1980, Collins filed suit seeking declaratory and injunctive relief.
On January 30, 1981, the district court 2 issued a memorandum opinion and order granting summary judgment for Collins and denying the state defendants' motion to dismiss them as defendants. Collins v. Marshall, 507 F.Supp. 83 (W.D.Mo.1981). The district court declared 29 C.F.R. § 91.58(b) invalid as exceeding the scope of the Secretary's authority under the Trade Act and enjoined the state defendants from enforcing the regulation. Donovan appeals from the determination that § 91.58(b) is invalid and the state defendants appeal from the determination that they were proper defendants.
The issue raised on appeal is whether the Secretary of Labor acted within the authority granted by the Trade Act of 1974 in promulgating 29 C.F.R. § 91.58(b) which allows recoupment of erroneous overpayments of TRA benefits to the extent allowed by state law. We hold that the recoupment of the TRA benefits pursuant to the regulation was proper.
DISCUSSION.
The Secretary recouped the overpayments pursuant to 29 C.F.R. § 91.58(b) 3 which allows recovery of overpayments not caused by fraud, to the extent allowed by state unemployment compensation laws. Collins argued that the Secretary in promulgating this regulation exceeded the authority granted by Congress under the Trade Act. She argued that by expressly providing in 19 U.S.C. § 2315 4 for the recoupment only of fraudulent overpayments Congress meant to exclude nonfraudulent overpayments from the recoupment provision.
The district court stated that the Secretary would have been authorized at common law to recover the overpayment if Congress had been silent on the subject. However, the court stated that through section 2315
Congress did, in this instance, recognize the possibility of overpayments and the administrative desirability of recoupment, and tailored statutory liability and recoupment procedures in explicit terms, reaching only those overpayments caused by fraud or resulting from an intent to defraud.
Collins v. Marshall, supra, 507 F.Supp. at 85. Thus, the district court held that section 91.58(b) was invalid and "recoupment in cases of mistaken overpayment of TRA benefits (was) forbidden by law." Collins v. Marshall, supra, 507 F.Supp. at 86. We disagree.
The standard we apply in reviewing the validity of the recoupment regulation was set forth in T. L. Hunt, Inc. of Texas v. Commissioner, 562 F.2d 532, 535-36 (8th Cir. 1977) (T)he contemporaneous construction of a statute by those charged with its administration is entitled to great respect and should be held invalid only if the regulations are unreasonable and inconsistent with the statute.
We hold that section 91.58(b) is not unreasonable, nor is it inconsistent with the provisions of the Trade Act.
The basis for our decision is the principle that a statute is not required to authorize the government to "recover funds which its agents have wrongfully, erroneously, or illegally paid." United States v. Wurts, 303 U.S. 414, 415, 58 S.Ct. 637, 638, 82 L.Ed. 932 (1938). The government has a recognized common law right to recover overpayments. Stone v. United States, 286 F.2d 56, 58-59 (8th Cir. 1961); Jacquet v. Westerfield, 569 F.2d 1339, 1342 (5th Cir. 1978); United States v. Mead, 426 F.2d 118, 124 (9th Cir. 1970).
4 C.F.R. § 102.3, passed pursuant to 31 U.S.C. § 952, provides that agencies will collect by offset "claims which are liquidated or certain in amount in every instance in which this is feasible." That the Secretary's claim against Collins is "liquidated and certain in amount" is undisputed. 5 It was the intent of Congress that such claims be disposed of at the agency level and without resort to litigation. S. Rep. No. 1331, 89th Cong., 2d Sess., reprinted in 1966 U.S. Code Cong. & Ad. News 2532, 2539. Thus section 91.58(b) allowing the recoupment of...
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... ... 6 Other federal courts have entertained similar Trade Act cases without regard to section 2311(d). See Collins v. Marshall, 507 F.Supp. 83 (N.D.Mo.1981), rev'd sub nom. on other grounds, Collins v. Donovan, 661 F.2d 705 (8th Cir.1981); U.A.W. v. Donovan, ... ...
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... ... See Bechtel , 781 F.2d at 906-07 ; Collins , 661 F.2d at 708 ; Wilson Clinic & Hosp., Inc. , 494 F.2d at 51-52 ; DiSilvestro , 405 F.2d ... Donovan , 661 F.2d 705, 708 (8th Cir. 1981) (holding that an agency could recoup erroneous overpayments ... ...
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Modoc Lassen Indian Hous. Auth. v. U.S. Dep't of Hous. & Urban Dev.
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