Hutchins v. U.S. Department of Labor, No. 11-1375

Decided:  June 21, 2012

On appeal to the Fourth Circuit, Gwyniece Hutchins challenged the district court’s determination that federal law required her to reimburse the Department of Labor (“DOL”) for compensation that she received after she was awarded a monetary judgment in a state court proceeding against the Town of Ninety Six, South Carolina (the “Town”) for the same underlying injury.  The Fourth Circuit affirmed the district court’s decision in favor of the Town, and against Hutchins.

This case arose out of an injury Hutchins sustained while carrying out her duties as a U.S. Postal Service employee.  In August 2004, Hutchins stepped on an improperly fitted manhole cover maintained by the Town, the manhole flipped up, and Hutchens fell into the manhole and sustained serious injuries.  Hutchins was awarded lost wages and medical benefits under the Federal Employees’ Compensation Act (“FECA”) and later accepted a judgment of $275,000 in a state court action that she brought against the Town.  The DOL, the federal agency that awarded Hutchins’ benefits under FECA, then asserted a claim to recover a portion of this judgment, but Hutchins argued that the Town was not a “person,” and therefore allowing the Town’s claim would be unconstitutional pursuant to 5 U.S.C. §§ 8131, 8132.  The DOL’s Office of Workers’ Compensation (“OWC”) rejected Hutchins’ arguments and determined that the DOL was entitled to reimbursement based on Hutchins’ state court judgment.  Hutchins paid the amount requested by DOL but appealed the OWC’s decision to the Employees’ Compensation Appeals Board, which affirmed the OWC’s decision.  Hutchins then filed the claim underlying this case in the U.S. District Court for the District of South Carolina.

After Hutchins filed her complaint pursuant to the Administrative Procedures Act, both Hutchins and the DOL filed cross-motions for summary judgment, and the district court granted the DOL’s motion, finding that Hutchins was required to reimburse the DOL.  The district court denied Hutchins’ motion, and Hutchins appealed the decision to the Fourth Circuit.

On appeal, Hutchins first argued that because the Town is not a “person” as used in 5 U.S.C. § 8132, the statute does not require her to reimburse the DOL.  In the alternative, Hutchins argued that if the Town, as a political subdivision, is determined to be a “person,” then § 8131 is unlawful.   The Fourth Circuit began by analyzing the text of § 8132, the statute that requires a person who receives compensation for an injury to reimburse the U.S. for any compensation paid under FECA for the same injury.  The Court determined the issue to be “whether the Town qualifies as a ‘person other than the United States,’ such that Hutchins is liable to reimburse the [DOL] out of her state court judgment.”

The Court first interpreted § 8132 and found that its language makes it clear that “person” includes political bodies, such as the Town.  To further support this finding, the Court also looked to the Dictionary Act’s definitions of “person,” as well as to Supreme Court precedent indicating that “person” includes municipal corporations unless a more limited use is indicated by the context of the statute.  Next, the Court declined to address Hutchins’ second argument that if “person” is construed broadly, the statute would allow the DOL to sue states, and such action would violate the Constitutional principles of federalism.  The Court found that such circumstances were not present in Hutchins’ case.  In sum, the Court found that “the statutory language and Supreme Court precedent indicate that a municipality such as the Town constitutes a ‘person’ for purposes of reimbursement under 5 U.S.C. § 8132,” and held that the district court correctly determined that Hutchins’ recovery from the Town for her injuries was properly subject to refund under FECA.

Full Opinion

– Allison Hite

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