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Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 18, 2010 Decided June 22, 2010

No. 09-5195

RICHARD F. GONZALEZ AND 

RACHEL GONZALEZ, HIS WIFE,

APPELLANTS

v.

DEPARTMENT OF LABOR AND 

HILDA L. SOLIS, SECRETARY, DEPARTMENT OF LABOR,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:07-cv-00593)

Joseph M. Hannon Jr. argued the cause for the appellant.

Alan Burch, Assistant United States Attorney, argued the

cause for the appellee. R. Craig Lawrence, Assistant United

States Attorney, was on brief.

Before: SENTELLE, Chief Judge, HENDERSON and BROWN,

Circuit Judges.

Opinion for the Court filed by Circuit Judge HENDERSON.

KAREN LECRAFT HENDERSON, Circuit Judge: Rachel

Gonzalez (Rachel) was injured in the course of federal

employment. She received compensation for her injuries from

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2

the Department of Labor (Labor or DOL) under the Federal

Employees’ Compensation Act (FECA), 5 U.S.C. §§ 8101 et

seq. She and her husband Richard Gonzalez (Richard) later

brought suit against allegedly liable private third parties,

ultimately reaching a settlement. Labor demanded

reimbursement from the settlement proceeds. The Gonzalezes

challenged Labor’s demand in the district court and the district

court granted summary judgment to Labor. We affirm. 

I.

On June 11, 1997 an elevator’s sudden stop injured Rachel

at the United States Embassy in Mexico, where she was

working. She filed a claim under FECA for injuries including

“abdominal laceration, pelvic cyst, aggravation of pelvic

adhesions, bilateral pulmonary embolism, left kidney infection,

intracranial hematoma, emergency laparatomy and prolonged

post-traumatic stress disorder.” R.G. v. Dep’t of State, Decision

and Order, Docket No. 06-369, at 1-2 (U.S. Dep’t of Labor

Employees’ Comp. App. Bd. Dec. 13, 2006). Labor accepted

the claim and paid her benefits, which continued as of this

appeal’s outset. 

On March 21, 2000 the Gonzalezes brought suit in the

District of Columbia Superior Court (Superior Court), alleging

two companies’ negligence in servicing the elevator caused

Rachel’s injuries and Richard’s loss of consortium. The

defendants were Amtech Elevator Services, Inc. (Amtech) and

Internacional de Elevadores, S.A. de C.V. (IDESA). Throughout

the relevant period Amtech was a subsidiary of an American

company named ABM Industries, Inc. (ABM). IDESA, a

Mexican company, was also an ABM subsidiary from 1990 until

1996.

If a federal employee receives FECA benefits as the result

of an injury for which a third party is liable, Labor is entitled to

share in recovery from the third party. 5 U.S.C. § 8132; 20

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3

C.F.R. § 10.710; see United States v. Lorenzetti, 467 U.S. 167,

168, 173-74 (1984). With that in mind, after filing suit against

the elevator companies, J. Michael Hannon, the Gonzalezes’

lawyer, wrote a letter to Labor proposing that it join the

litigation. He suggested that, rather than relying on its

reimbursement rights under FECA, Labor should invoke a

preexisting indemnity agreement between the United States and

the elevator companies. According to him, “By asserting its

indemnity rights, the United States would recover every dollar

paid [to Rachel]; whereas, as a subrogee under FECA that would

not likely be the outcome.” Letter from Hannon to Jeffrey

Nesvet, Deputy Associate Solicitor, Labor, at 2 (Mar. 23, 2000). 

Labor did not join the lawsuit. Instead, it directed Rachel

to continue pursuing her own action against the elevator

companies. See 5 U.S.C. § 8131(a)(2) (authorizing Secretary of

Labor to require FECA beneficiary to prosecute action against

third party in his own name). It also requested that the

Gonzalezes’ lawyer “contact [its] office prior to accepting any

settlement in order to obtain current information on the amount

of compensation paid by the United States and to obtain [its]

approval of any settlement where such approval is required.”

Letter from Augustus Banks, III, Paralegal Specialist, Labor, to

Hannon, at 1 (June 7, 2002); see 5 U.S.C. § 8132 (“No court,

insurer, attorney, or other person shall pay or distribute to the

beneficiary or his designee the proceeds of such suit or

settlement without first satisfying or assuring satisfaction of the

interest of the United States.”). 

The litigation proceeded and, on September 25, 2002, the

Superior Court dismissed all of the Gonzalezes’ claims against

IDESA for acts and omissions occurring after ABM sold IDESA

in 1996; the court held that it did not have personal jurisdiction

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over IDESA post-sale. The Gonzalezes appealed that decision1

while also pursuing settlement negotiations with Amtech and its

parent company, ABM. 

During the negotiations the Gonzalezes’ lawyer consulted

Labor to discuss the effect of Rachel’s FECA-beneficiary status

on a possible settlement. On February 20, 2003 he wrote to

Labor to “request that any settlement obtained from [ABM and

Amtech] be treated as a payment to Mr. Gonzalez for his loss of

consortium claim,” leaving Labor’s reimbursement from Rachel

herself entirely contingent on a future recovery from post-sale

IDESA, whose dismissal they were appealing. Letter from

Hannon to Catherine P. Carter, Counsel, Labor, at 1. A Labor

lawyer responded eight days later, writing, “I am not aware of

any case in which we have allowed an entire recovery against

one defendant to be allocated to loss of consortium” and

concluding that such an approach “is not in the interests of the

United States.” E-mail from Catherine Carter, Counsel for

Claims and Compensation, Labor, to Hannon, at 1-2 (Feb. 28,

2003). She made clear that Labor “must approve any proposed

deduction from the gross recovery attributing a portion of the

settlement or judgment to damages for loss of consortium.” Id.

at 1. She also made clear that Labor’s typical practice was to

allocate twenty-five per cent of a joint settlement to a loss of

consortium claimant, but that Labor would entertain arguments

for a higher allocation and would honor a different allocation

prescribed by a judge or jury. 

Approximately two months later the Gonzalezes executed

a “Confidential Settlement and Joint Tortfeasor Release and

Indemnity Agreement” (Settlement Agreement or Agreement)

with ABM and Amtech. Settlement Agreement at 1 (May 8,

1

The D.C. Court of Appeals ultimately affirmed the Superior

Court’s decision. Gonzalez v. Internacional de Elevadores, S.A., 891

A.2d 227 (D.C. 2006).

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2003). The Agreement stated that it is “by and between Richard

F. Gonzalez and Rachel Gonzalez (‘Plaintiffs’)” on the one hand

and ABM and Amtech on the other. Id. It recited that

“Plaintiffs and Defendants ABM and Amtech wish[ed] to settle

fully and finally all Plaintiffs’ claims against ABM and

Amtech.” Id. at 2. It also recited that the Gonzalezes “wish[ed]

to” release all claims against IDESA arising before ABM sold

it in 1996. Id. at 3. In return, ABM and Amtech agreed to pay

“Plaintiffs” $625,000 in the form of a check payable to their

lawyer’s escrow account. Id. ¶ 1. The Agreement also provided

that the Gonzalezes did not release their claims against IDESA

arising post-sale. But post-sale IDESA was not a party to the

Agreement, having been dismissed from the case for lack of

personal jurisdiction. 

The Settlement Agreement also addressed Rachel’s duty to

reimburse Labor for her workers’ compensation benefits. It

provided that “Plaintiffs shall have sole responsibility for . . .

determining whether any amount of the settlement is owed to the

Department of Labor.” Id. ¶ 10. Then, in paragraph 13, it

stated:

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 for post-sale claims. This

decision is entirely the responsibility of Plaintiffs and

their attorneys and shall not otherwise affect their

promises contained herein.

After the settlement Labor told the Gonzalezes’ lawyer that

Rachel was required to reimburse it for some or all of the

$216,266.86 it had disbursed to her by that time. It requested

that he file the necessary paperwork to calculate the exact

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amount owed. He refused, asserting that the applicable laws and

regulations do “not allow the Department to claim any of the

$625,000 settlement that satisfies Richard Gonzalez’s

consortium claim.” Letter from Hannon to Jeffrey Nesvet,

Deputy Associate Solicitor for Employment Benefits, Labor, at

3 (June 19, 2003). According to him, “Only recovery later

obtained from IDESA . . . would be available in satisfaction of

the lien.” Id. In response, Labor reviewed the Settlement

Agreement and concluded that the defendants had paid the

settlement proceeds jointly to Richard and Rachel in exchange

for both Gonzalezes releasing their respective claims. Thus, it

concluded, Rachel was required to reimburse Labor with some

of the proceeds. It repeatedly requested that the Gonzalezes’

lawyer file FECA paperwork on her behalf in order to determine

the required reimbursement. He repeatedly failed to do so.

Then, on October 28, 2004, he requested that Labor issue a final,

appealable determination as to her reimbursement obligation.

On February 10, 2005 the Office of Workers’

Compensation Programs (OWCP) issued a Notice of Decision,

deciding (1) the settlement proceeds had been jointly paid to

Rachel and Richard and (2) pursuant to Labor’s regulations and

procedures regarding allocation of joint settlements, Richard

was entitled to retain twenty-five per cent, and no more, of the

settlement proceeds as compensation for his loss of consortium.

The OWCP allocated the remaining seventy-five per cent of the

settlement proceeds—$468,750—to Rachel. It then calculated

that, from that amount, Rachel was required to pay Labor

$152,091.16.2

 Rachel appealed the OWCP’s decision to the

2

This amount was less than the benefits Labor had paid Rachel

because, by statute, Rachel was entitled to keep a substantial portion

of the recovery regardless of the FECA compensation she had

received. See 5 U.S.C. § 8132; 20 C.F.R. § 10.711 (calculating

amount beneficiary retains). This framework provides an incentive for

FECA beneficiaries to pursue claims against third parties.

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Employees’ Compensation Appeals Board, which affirmed it on

December 13, 2006. Approximately three months later, on

March 28, 2007, the Gonzalezes filed the instant lawsuit

challenging Labor’s final decision. The district court granted

summary judgment to Labor on March 26, 2009. Gonzalez v.

Dep’t of Labor, 603 F. Supp. 2d 137 (D.D.C. 2009).3

 This

appeal timely followed. Our review is de novo. See Chao v.

Day, 436 F.3d 234, 235 (D.C. Cir. 2006). 

II.

As the United States Supreme Court has explained, “an

employee who receives FECA payments is required to

reimburse the United States for those payments, to a specified

extent, when he obtains a damages award or settlement from a

third party who is liable to the employee for his injuries.”

Lorenzetti, 467 U.S. at 168 (citing 5 U.S.C. § 8132).4 There are

3

In addition, the district court granted summary judgment to the

Gonzalezes on Labor’s claim that it was entitled to impose a surcharge

on the Gonzalezes’ reimbursement obligation. Gonzalez, 603 F. Supp.

2d at 147. That decision is not at issue here.

4

5 U.S.C. § 8132 provides,

If an injury or death for which compensation is payable

under this subchapter is caused under circumstances creating

a legal liability in a person other than the United States to

pay damages, and a beneficiary entitled to compensation

from the United States for that injury or death receives

money or other property in satisfaction of that liability as the

result of suit or settlement by him or in his behalf, the

beneficiary, after deducting therefrom the costs of suit and

a reasonable attorney’s fee, shall refund to the United States

the amount of compensation paid by the United States and

credit any surplus on future payments of compensation

payable to him for the same injury. No court, insurer,

attorney, or other person shall pay or distribute to the

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only two conditions precedent to a FECA beneficiary’s

reimbursement obligation: (1) she “must have suffered an injury

or death under circumstances creating a legal liability in a third

party to pay damages” and (2) she “must have received money

or other property in satisfaction of that liability.” Lorenzetti,

467 U.S. at 173-74 (citing 5 U.S.C. § 8132). 

While FECA makes clear a beneficiary’s reimbursement

obligation, it does not explain how Labor should handle a joint

recovery by a beneficiary and her spouse. Instead, FECA

authorizes the Secretary of Labor (Secretary or SOL) to “decide

all questions” regarding FECA reimbursement. 5 U.S.C. §

8145; see also Chevron, U.S.A. Inc. v. Natural Res. Def.

Council, Inc., 467 U.S. 837, 843 (1984) (if statute is silent or

ambiguous with respect to specific issue, court will uphold

agency’s reasonable interpretation); Abington Crest Nursing &

Rehab. Ctr. v. Sebelius, 575 F.3d 717, 719 (D.C. Cir. 2009)

(same). Further, section 8149 authorizes the Secretary to

“prescribe rules and regulations necessary for [FECA’s]

administration and enforcement.” 

beneficiary or his designee the proceeds of such suit or

settlement without first satisfying or assuring satisfaction of

the interest of the United States. The amount refunded to

the United States shall be credited to the Employees’

Compensation Fund. If compensation has not been paid to

the beneficiary, he shall credit the money or property on

compensation payable to him by the United States for the

same injury. However, the beneficiary is entitled to retain,

as a minimum, at least one-fifth of the net amount of the

money or other property remaining after the expenses of a

suit or settlement have been deducted; and in addition to this

minimum and at the time of distribution, an amount

equivalent to a reasonable attorney’s fee proportionate to the

refund to the United States.

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Labor regulations fill the gap as to joint recoveries. 

Specifically, 20 C.F.R. § 10.712 provides,

(a) . . . . If a settlement or judgment is paid to or

for more than one individual . . . , such as a joint

payment to a husband and wife for personal injury and

loss of consortium . . . , the gross recovery to be

reported is the amount allocated to the injured

employee. If a judge or jury specifies the percentage

of a contested verdict attributable to each of several

plaintiffs, OWCP or SOL will accept that division.

(b) In any other case, where a judgment or

settlement is paid to or on behalf of more than one

individual, OWCP or SOL will determine the

appropriate amount of the FECA beneficiary’s gross

recovery and advise the beneficiary of its

determination. FECA beneficiaries may accept

OWCP’s or SOL’s determination or demonstrate good

cause for a different allocation. Whether to accept a

specific allocation is at the discretion of SOL or

OWCP.

Also, Labor’s FECA Procedure Manual describes the allocation

of joint proceeds between a loss of consortium claim and a

personal injury claim. It provides that, “absent unusual

circumstances, an allocation of a joint settlement or judgment to

loss of consortium in an amount of 25% or less for the spouse

. . . will be approved.” FECA Procedure Manual Ch. 2-1100-

9(c)(1)(b). It also permits a FECA beneficiary to show cause for

a higher allocation. Id. 

The Gonzalezes challenge Labor’s demand that Rachel use

the settlement proceeds to reimburse it for her FECA

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compensation. Although they frame it several ways,5

 their

primary argument is that the demand is improper because

Richard, not Rachel, recovered in the settlement. Alternatively,

they contend that, even if the Settlement Agreement entailed a

joint recovery, it nonetheless allocated the proceeds entirely to

Richard and Labor must respect that allocation instead of

imposing its own. Next, they argue Labor should be estopped

from seeking reimbursement because it did not take an active

role in the Superior Court litigation. Finally, they argue Labor

arbitrarily denied their lawyer recovery of certain litigation

costs. 

A. Joint Settlement

We start with the Gonzalezes’ argument that theirs was not

a joint settlement—an argument they base on the face of the

Settlement Agreement. We interpret a settlement agreement

under contract law. T Street Dev., LLC v. Dereje & Dereje, 586

F.3d 6, 11 (D.C. Cir. 2009). Hence, we aim to “give effect to

the mutual intentions of the parties.” NRM Corp. v. Hercules,

Inc., 758 F.2d 676, 681 (D.C. Cir. 1985). In the Settlement

Agreement, Rachel and Richard agreed to “forever irrevocably

and fully remise, release, acquit and discharge” the defendants

from liability “[i]n exchange for” $625,000. Settlement

Agreement ¶¶ 2-3; see id. at 1 (naming both Rachel and Richard

as “Plaintiffs”). It is hard to imagine a clearer indication that the

parties’ mutual intent was to have both spouses release their

respective claims against the defendants as consideration for

5

Specifically, they say that Labor (1) misapplied FECA by

requiring reimbursement from Richard; (2) unconstitutionally applied

FECA to Richard; (3) violated the Fifth Amendment by requiring

reimbursement from Richard; (4) impermissibly interpreted a nonbeneficiary’s, i.e., Richard’s, private settlement and (5) impermissibly

“preempted” state law by limiting Richard’s recovery for loss of

consortium. 

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compensation. In other words, pursuant to the Settlement

Agreement, Rachel and Richard jointly settled.

Paragraph 13 doesn’t change things. It says, “Defendants

understand that Plaintiffs as between themselves and in

consultation with their attorneys have allocated the

consideration paid under this agreement to Richard Gonzalez

. . . .” Settlement Agreement ¶ 13 (emphasis added). It adds

that this provision “is entirely the responsibility of Plaintiffs and

their attorneys and shall not otherwise affect their promises

contained herein.” Id. Put simply, this paragraph does not

affect the agreement between the Gonzalezes and the

defendants. The defendants have still agreed to pay the

Gonzalezes $625,000 in exchange for the Gonzalezes dismissing

their claims. This paragraph merely reflects a decision by the

Gonzalezes (and their lawyer) to channel Rachel’s share of the

settlement proceeds to Richard in a vain attempt to avoid

reimbursing Labor for Rachel’s workers’ compensation benefits.

Indeed, if Rachel were not entitled to settlement proceeds under

the Agreement, she and Richard would not have anything to

allocate “as between themselves.”6

 Id. 

6

The Gonzalezes also assert that, through the Agreement, “Rachel

gained nothing but the right to continue to pursue her claim for

compensation against IDESA.” Appellants’ Br. 41-42. This is absurd.

Rachel settled her claims against pre-sale IDESA (which was owned

by ABM) in the Settlement Agreement. Settlement Agreement ¶ 3.

Post-sale IDESA was not a party to the Agreement, having been

dismissed from the litigation for lack of personal jurisdiction.

Obviously, ABM and Amtech could not convey to Rachel the right to

pursue her claim against post-sale IDESA as consideration for her

releasing her claims against them. In reality, that Rachel did not settle

her claims against post-sale IDESA in the Settlement Agreement is not

even relevant; it in no way affects the fact that Rachel and Richard

settled their claims against the defendants in exchange for $625,000. 

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In essence, the Gonzalezes want to argue that Rachel settled

her claims with the defendants for no money or property but

instead only to benefit her husband. That sounds like an

interesting case. See Lorenzetti, 467 U.S. 173-74 (beneficiary

not required to reimburse Labor unless she “received money or

other property in satisfaction of [third-party] liability”); Smith v.

Mallick, 514 F.3d 48, 52 (D.C. Cir. 2008) (“‘[A] release, like

any other contract, must be supported by sufficient

consideration, and the consideration is not sufficient unless the

releasor receives something of value to which he or she had no

previous right.’” (quoting Interdonato v. Interdonato, 521 A.2d

1124, 1134 (D.C.1987))) (alteration in Smith). But that is not

this case. In this case, the defendants paid the

“Plaintiffs”—Rachel and Richard Gonzalez—$625,000 in

exchange for “Plaintiffs” releasing their claims. This was a joint

settlement.7

B. Allocation

The Gonzalezes alternatively argue that, even if theirs was

a joint recovery, Labor must adhere to the allocation of proceeds

set forth in the Settlement Agreement, which provides that

Richard should receive everything and Rachel nothing. They try

to prop this argument up with 20 C.F.R. § 10.712(a), which

states that, in the case of a joint settlement, the “recovery to be

reported is the amount allocated to the injured employee.”

According to them, because the regulation is silent as to who

7

Incredibly, the Gonzalezes also argue that this was not a joint

settlement because “the settlement check” was made out to Richard

and not Rachel. Appellants’ Br. 27. But the only check in the record

was from the Gonzalezes’ lawyer, not from the defendants. The

Settlement Agreement itself dictated that ABM and Amtech were to

convey payment to the Gonzalezes “in the form of a check payable to

the ‘Escrow Account of Thompson, O’Donnell, Markham, Norton &

Hannon.’” Settlement Agreement ¶ 1.

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allocates, Labor must honor the allocation in the Settlement

Agreement.

The problem with this argument is that 20 C.F.R. § 10.712

is not silent as to who allocates; it addresses that issue

specifically and comprehensively. Subsection (a) provides, “If

a judge or jury specifies the percentage of a contested verdict

attributable to each of several plaintiffs,” Labor applies that

allocation. Subsection (b) provides, “In any other case, where

a judgement is paid to or on behalf of more than one individual,”

Labor allocates the proceeds but also allows beneficiaries to

show cause for adjustments to Labor’s allocation. Because no

judge or jury allocated the Gonzalezes’ proceeds, this is an

“other case,” controlled by subsection (b). Thus, it was for

Labor to determine how much of the Gonzalezes’ settlement

proceeds should be allocated to Richard’s loss of consortium

claim. Therefore, the Gonzalezes’ attempt to unilaterally

allocate the proceeds in their Settlement Agreement was without

effect and their argument along this line fails. 

Relatedly, the Gonzalezes argue that Labor “exceeded its

statutory authority in determining that [Richard] could only

retain 25% of the settlement” and that Labor arrived at that

allocation “arbitrarily.” Appellants’ Br. 36. As explained

above, however, FECA authorizes the Secretary of Labor to

“decide all questions” relating to the FECA reimbursement

scheme, 5 U.S.C. § 8145, and to “prescribe rules and regulations

necessary for [its] administration and enforcement,” id. § 8149. 

See also Chevron, 467 U.S. at 843; Abington Crest, 575 F.3d at

719. Labor regulations take up that call, explicating the

allocation of joint recoveries. See 20 C.F.R. §§ 10.711-12. And

Labor’s FECA Procedure Manual indicates that, “absent unusual

circumstances,” the maximum Labor allocates to a loss of

consortium claim is twenty-five per cent of the proceeds. Ch. 2-

1100-9(c)(1)(b). In this case, Labor allocated the customary

twenty-five per cent to Richard’s claim. It also provided several

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opportunities for Richard to submit evidence and argument

justifying a higher allocation. He failed to do so. Thus, Labor’s

allocation was neither unauthorized nor arbitrary; it was by the

book.

C. Estoppel

The Gonzalezes also argue that, because Labor did not take

an active role in the Superior Court litigation and settlement

negotiations, it may not now assert its reimbursement rights.

This argument clashes with 5 U.S.C. § 8131(a), which

authorizes Labor to either require a FECA beneficiary to assign

her right of action to the United States or require the beneficiary

to “prosecute the action in h[er] own name.” The Gonzalezes

have shown no reason why Labor’s right to reimbursement

should disappear when it exercises the latter option. Cf.

Lorenzetti, 467 U.S. at 175-76 (respondent failed to show “why

[FECA] should be construed to diminish the scope of the United

States’ reimbursable interest when a third-party action is

maintained by the employee himself”). Further, a requirement

that Labor participate in litigation in order to preserve its

reimbursement rights would be inconsistent with one of the

purposes of FECA’s reimbursement scheme, which is to

“minimize the cost of the FECA program to the Federal

Government.” Id. at 177. 

More troubling than the legal insufficiency of their estoppel

argument, however, is that it is based on a misrepresentation of

the underlying facts. In their opening brief, the Gonzalezes

write that “Richard was not given ‘fair warning’ that should he

settle his claim, DOL would assert rights to it.” Appellants’ Br.

40. According to them, “It was only after DOL realized that

only Richard had settled that it swooped in and attempted to

force the percentage it would allow him to keep of his

settlement.” Id. at 24. In reality, however, Labor made clear to

the Gonzalezes’ lawyer, before the settlement, that the scheme

he was contemplating was not going to fly. On February 20,

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2003 Hannon wrote to Labor to “request that any settlement

obtained from [ABM and Amtech] be treated as a payment to

Mr. Gonzalez for his loss of consortium claim.” Letter from

Hannon to Catherine P. Carter, Counsel, Labor, at 1. On

February 28, 2003 a Labor lawyer rejected that approach. She

explained, thoroughly, that Labor must approve any allocation

of settlement proceeds to Richard’s loss of consortium claim and

that Labor’s “longstanding general policy” was to allocate

twenty-five per cent of a recovery to such a claim. E-mail from

Catherine P. Carter, Counsel for Claims and Compensation, to

Hannon (Feb. 28, 2003). Undeterred, the Gonzalezes (and their

lawyer)8

 decided to go forward with their scheme and executed

the Settlement Agreement. Now they say that Labor should be

estopped from reimbursement because it did not warn them

about how it would proceed and because it “was just as willing

to accept the risk of Rachel’s strategy as she was.” Reply Br.

12. That is plainly not so.

D. Costs

Finally, the Gonzalezes argue that Labor “arbitrarily”

denied recovery of $8,970.55 in costs.9 Appellants’ Br. 52;

Reply Br. 15. This argument relies on 5 U.S.C. § 8132 and 20

C.F.R. § 10.711, which allow a FECA beneficiary to deduct the

costs of suit from settlement proceeds before reimbursing Labor. 

8

The Gonzalezes’ lawyer’s dogged pursuit of this plainly

ineffectual strategy calls to mind Thoreau’s observation that “[t]he

lawyer’s truth is not Truth, but consistency or a consistent

expediency.” 

9

Although the Gonzalezes also seem to challenge Labor’s

accounting of their attorney’s fees in their opening brief, see

Appellants’ Br. 51-53, they subsequently abandon that challenge, see

Reply Br. 15. 

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The sole record document the Gonzalezes cite on this issue is a

letter from a Labor lawyer, stating,

This office requires further explanation of the

following costs, corp. research $1,500.00, information

provider $151.00, and internet searches $1,500.00.

Please provide this office with a detailed explanation

of these costs. Please be advised that the in-house

copying charge of $5,819.55 is denied.

Letter from Catherine P. Carter, Counsel for Claims and

Compensation, to Hannon, at 2 (June 8, 2004). 

Labor’s denial of copying charges was based on its FECA

Procedure Manual, which views such costs as “normal overhead

costs of a firm” as opposed to litigation costs. Ch. 2-1100-9(h)

(“Examples of costs which are not permitted are normal

overhead costs of a firm, e.g., in-house record copying,

secretarial or paralegal services, and co-counsel fees.”). The

denial was not arbitrary and we will not reverse it. As for the

remaining costs in dispute, the Gonzalezes have not provided

any information regarding their response to Labor’s request for

further information. Given this documentary void, we reject

their argument for costs. 

For the foregoing reasons, we affirm the district court’s

grant of summary judgment to Labor.

So ordered.

 

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