Gonzalez v. Department of Labor

• Decision Date: 26 March 2009
• Docket Number: Civil Action No. 07-0593 (RBW).
• Citation: 603 F.Supp.2d 137
• Parties: Richard GONZALEZ and Rachel Gonzalez, Plaintiffs, v. DEPARTMENT OF LABOR, et al., Defendants.
• Court: U.S. District Court — District of Columbia

Page 137

603 F.Supp.2d 137

Richard GONZALEZ and Rachel Gonzalez, Plaintiffs, v. DEPARTMENT OF LABOR, et al., Defendants.

Civil Action No. 07-0593 (RBW).

United States District Court, District of Columbia.

March 26, 2009.

J. Michael Hannon, Hannon Law Group, LLP, Washington, DC, for Plaintiffs.

Alan Burch, U.S. Attorney's Office, Washington, DC, for Defendants.

Memorandum Opinion

REGGIE B. WALTON, District Judge.

This matter is before the Court on the parties' cross-motions for summary judgment ("Pls.' Mot." and "Defs.' Mot.," respectively) pursuant to Federal Rule of Civil Procedure 56.¹ The plaintiffs bring this lawsuit against the Department of Labor ("Labor") and its Secretary seeking declaratory and injunctive relief. After careful review of the several filings submitted by the parties, the Court concludes that the Department of Labor properly concluded that the plaintiffs received a joint award to which the regulatory framework within the Federal Employees Compensation Act ("FECA"), 5 U.S.C. §§ 8101 (2006), applies, but that this determination did not create a debt obligation prior to the resolution of this lawsuit. Therefore, the defendants' motion for summary judgment is granted with regard to Mrs. Gonzalez's FECA claim, but denied with regard to the debt collection claim under the Federal Debt Collection Procedures Act ("FDCPA"), 28 U.S.C. §§ 3001-3308 (2006). Furthermore, the plaintiffs' motion for summary judgment is denied as to the FECA claim.

I. Factual Background

The following facts are undisputed by the parties. On June 11, 1997, Rachel Gonzalez was injured in an elevator while performing her duties at the United States Embassy in Mexico City, Mexico. Pls.' Stmt. ¶ 1; Defs.' Stmt. ¶ 1. As a result of her injuries, Labor granted workers' compensation benefits to Mrs. Gonzalez under the FECA. Pls.' Stmt. ¶ 4; Defs.' Stmt. ¶ 2. Mrs. Gonzalez was still receiving these benefits when this case was filed. Pls.' Stmt. ¶ 4; Defs.' Stmt. ¶ 4.

The legal history of this case dates back to March 21, 2000, when Mrs. Gonzalez and her husband, Richard Gonzalez, filed a third-party lawsuit in the Superior Court of the District of Columbia against ABM Industries, Incorporated ("ABM Industries"), Amtech Elevator Services ("Amtech"), and International de Elevadores S.A., de C.V. ("International"), the companies that serviced the elevator that malfunctioned, causing Mrs. Gonzalez to sustain multiple injuries. Pls.' Stmt. ¶¶ 1-2, 5; Defs.' Stmt. ¶¶ 1, 5; Defs.' Mem., Exhibit ("Ex.") B (Superior Court Complaint) ¶¶ 7-8, 10-11, 15-16. In the Superior Court lawsuit, Mrs. Gonzalez sought damages for her injuries, and Mr. Gonzalez sought damages for loss of consortium. Pls.' Stmt. ¶ 5; Defs.' Stmt. ¶ 5.

On September 25, 2002, the Superior Court dismissed the claims against International, a Mexican company, for lack of personal jurisdiction. Pls.' Stmt. ¶ 8; Defs.' Mem., Ex. C (Superior Court Memorandum and Order); see also Gonzalez v. International de Elevadores, S.A., 891 A.2d 227, 241 (D.C.2006) (affirming the dismissal). The Gonzalezes then engaged in settlement negotiations with ABM Industries and Amtech, which resulted in a settlement agreement being entered into on May 8, 2003. Pls.' Stmt. ¶ 12; Defs.' Stmt. ¶ 6; Defs.' Mem., Ex. D (Settlement Agreement). Pursuant to the settlement agreement, the Gonzalezes dismissed all of their claims against ABM Industries and Amtech, in consideration for $625,000. Pls.' Stmt. ¶ 12; Defs.' Stmt. ¶ 6. Despite this joint dismissal, the Gonzalezes directed that the entire settlement award be made to Mr. Gonzalez. Pls.' Stmt. ¶¶ 12-13; Defs.' Mem., Ex. D (Settlement Agreement) at 10, ¶ 13. Specifically, Paragraph 13 of the settlement agreement states:

Defendants understand that Plaintiffs as between themselves and in consultation with their attorneys have allocated the consideration paid under this Agreement to Richard Gonzalez whose claims will be dismissed in their entirety with prejudice. Rachel Gonzalez shall continue to prosecute her claim for damages only against IDESA. . . . This decision is entirely the responsibility of Plaintiffs and their attorneys and shall not otherwise affect their promises contained herein.

Defs.' Mem., Ex. D (Settlement Agreement), ¶ 13.

Following the settlement agreement, Labor contacted the Gonzalezes' counsel and explained that under 5 U.S.C. § 8132 (2006), Mrs. Gonzalez was required to remit a specified amount of the settlement funds to Labor.² Pls.' Stmt. ¶¶ 14-19; Defs. Mem., Exs. J-M. Despite Labor's position, the Gonzalezes claimed that the language of Paragraph 13 in the settlement agreement provided that the settlement funds would be paid exclusively to Mr. Gonzalez, precluding any reimbursement obligations by Mrs. Gonzalez. Pls.' Stmt. ¶¶ 14-15; Defs.' Mem., Exs. J-M. Alternatively, Labor claimed that the settlement agreement satisfied both of the Gonzalezes' claims, thereby entitling them to retain only a portion of the award. Pls.' Stmt. ¶ 19; Defs.' Mem., Ex. M. To resolve the matter, Mrs. Gonzalez requested a formal determination by the Office of Workers' Compensation Program ("OWCP or Workers' Comp. Program"), an administrative body within Labor, concerning how much she was obligated to pay Labor from the funds received pursuant to the settlement agreement and for a determination of what amount of the award was attributable to Mr. Gonzalez's lose of consortium claim. Pls.' Stmt. ¶ 20; Defs.' Stmt. ¶ 8; Defs.' Mem., Ex. L.

On January 3, 2005, the Workers' Comp. Program determined that the entire amount of the settlement funds had been jointly awarded to the Gonzalezes. Pls.' Stmt. ¶ 21; Defs.' Stmt. ¶ 8; Defs.' Mot., Ex. Q (Formal Decision). Pursuant to the FECA regulations that structure the allocation of joint third-party settlements, the Workers' Comp. Program limited Mr. Gonzalez's recovery from the settlement agreement to $156,250, which represented twenty-five percent of the total settlement award. Pls.' Stmt. ¶ 21; Defs.' Stmt. ¶ 8; Defs.' Mot., Ex. Q (Formal Decision). Mrs. Gonzalez appealed the Workers' Comp. Program's decision to the Employees' Compensation Appeals Board ("Appeals Board"), which affirmed the Workers' Comp. Program determination. Pls.' Stmt. ¶¶ 24-25; Defs.' Stmt. ¶ 10. The Gonzalezes then challenged the Appeals' Board's decision with the filing of this lawsuit. The defendants answered the plaintiffs' complaint and filed a counterclaim seeking a declaration that Mrs. Gonzalez is liable to the United States for the sum of $152,091.16, plus interest, which represents the total amount of FECA benefits Mrs. Gonzalez had received at the time of filing of this lawsuit.³ Defs.' Mem. at 19.

II. Standard of Review

Rule 56 provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R.Civ.P. 56(c). A material fact is one that is capable of affecting the outcome of the litigation. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A genuine issue of material fact exists if "a reasonable jury could return a verdict for the nonmoving party." Id. The party moving for summary judgment may not rely solely on conclusory allegations but must set forth facts that are significantly probative. Id. at 249-50, 106 S.Ct. 2505. "Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge...." Id. at 255, 106 S.Ct. 2505. Thus, when considering a motion for summary judgment, a court must "view the evidence in the light most favorable to the nonmoving party and draw all reasonable influences in [that party's] favor." Galvin v. Eli Lilly & Co., 488 F.3d 1026, 1031 (D.C.Cir.2007) (internal quotation and citation omitted). Nevertheless, "[t]he mere existence of a scintilla of evidence in support of the [nonmoving party's] position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff." Anderson, 477 U.S. at 252, 106 S.Ct. 2505.

III. Discussion

The Federal Employees Compensation Act, 5 U.S.C. §§ 8101-8152 (2006), provides compensatory benefits to federal employees who are injured in the course of performing their official duties. 5 U.S.C. § 8102. The Secretary of Labor ("Secretary") has the authority to "decide all questions arising under [the FECA]," 5 U.S.C. § 8145, and to promulgate regulations to administer and enforce the FECA program, 5 U.S.C. § 8149.

"[T]o minimize the cost of the FECA program to the Federal Government," United States v. Lorenzetti, 467 U.S. 167, 177, 104 S.Ct. 2284, 81 L.Ed.2d 134 (1984), the Secretary may require employees who were injured by third parties to pursue personal injury claims against those third parties. 5 U.S.C. § 8131. However, regardless of whether the Secretary requires the filing of a lawsuit, a FECA beneficiary who receives compensation through a third-party lawsuit must reimburse Labor for federal funds already paid to the beneficiary as compensation for an injury. 5 U.S.C. § 8132. If that compensation exceeds the cost of the federal funds already paid to the employee, the employee must provide a credit for future FECA expenses, except that a minimum of one-fifth of the net award plus reasonable attorney's fees may be retained by the beneficiary. Id. If the third-party claim results in a joint settlement that does not allocate the award among several plaintiffs, the Workers' Comp. Program and the Secretary reserve the right to "determine the appropriate amount of the FECA beneficiary's gross recovery." 20 C.F.R. § 10.712(b) (2008).

Although the FECA precludes judicial review of benefit determinations made by Labor, it does not preclude...