IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_______________

No. 95-50512

_______________

UNITED SERVICES AUTOMOBILE ASSOCIATION,

Plaintiff-Appellee,

VERSUS

WILLIAM J. PERRY,

Secretary of United States Department of Defense,

and

UNITED STATES OF AMERICA,

Defendants-Appellants.

Appeal from the United States District Court

for the Western District of Texas

December 13, 1996

Before SMITH, DUHÉ, and DeMOSS, Circuit Judges.

PER CURIAM:

The opinion originally issued in this case, 92 F.3d 295 (5th

Cir. 1996) (per curiam), is hereby withdrawn, and the following

opinion is substituted for purposes of clarification:

In this case of first impression, we are called upon to

interpret the meaning of Congress’s 1990 amendment to 10 U.S.C.
 

1 The defendants-appellants in this action are William J. Perry, Secretary

of Defense, and the United States of America. Both parties will collectively be

referred to as the “government.”

 

2 It would appear that all of these accidents occurred in states which have

retained tort theories as the basis for recovery for injuries in automobile

accidents and have not adopted a comprehensive scheme of “no-fault insurance” for

dealing with injuries arising out of automobile accidents. It would also appear

that these accidents occurred after 1990.

2

§ 1095 (Supp. 1995), which allows the military to be reimbursed by

insurance carriers for medical expenses it incurs in treating

soldiers whom the carriers insure. We determine that the term

“no-fault insurance carrier,” as it appears in the statute, is

ambiguous. We therefore defer to the interpretation of that term

by the agency entitled to administer the statute, the Department of

Defense (“DOD”), reverse the summary judgment in favor of United

Services Automobile Association (“USAA”), and render summary

judgment for the government.1

I.

This case arises from twelve separate automobile accidents2

involving members of the military who were entitled to receive and

did receive medical care in a military hospital and who were also

insured by USAA. The service members were treated for their

injuries at military hospitals at no cost to the soldiers.

10 U.S.C. §§ 1074, 1076 (Supp. 1995). Each soldier had an

individually-owned automobile insurance policy issued by USAA that

contained liability coverage, uninsured motorist coverage, coverage

for damage to the insured’s vehicle and medical payments coverage
3

(“Medpay”), which covered the insureds for medical costs arising

from automobile accidents.

The government filed claims with USAA, seeking reimbursement

for costs incurred in treating USAA’s insureds. The government

based its claim on 10 U.S.C. § 1095(a)(1), which provides that “the

United States shall have the right to collect from a third-party

payer the reasonable costs of health care services incurred by the

United States on behalf of such person through a [military

hospital]. . . .” The statute defines a “third-party payer” as “an

entity that provides an insurance, medical service, or health plan

by contract or agreement, including an automobile liability

insurance or no-fault insurance carrier.” § 1095(h)(1).

USAA refused to pay, and instead filed a declaratory judgment

action against the government, seeking a determination that it did

not owe reimbursement. Specifically, USAA sought a determination

that it was not a third-party payer under § 1095.

The parties stipulated that there were no disputed facts and

filed cross-motions for summary judgment. The district court ruled

in USAA’s favor, holding that Medpay is not no-fault insurance and

USAA is therefore not a third-party payer liable to the government

under § 1095. The government timely appealed.

II.

The government contends that USAA is a “third-party payer”
 

3 We take no position as to whether the prior case against USAA was decided

correctly. We merely conclude that, because the parties and the issues are the

same, the government is precluded from arguing that USAA was a “third-party

payer” under the pre-1990 version of the statute.

4

under § 1095, required to reimburse the government for health care

the military provides its insureds. We must determine whether USAA

is a “third-party payer” because of the inclusion of its Medpay

coverage in its automobile policy.

Before 1990, § 1095 defined “third-party payer” as “an entity

that provides insurance, medical service or health plan by contract

or agreement.” Congress amended the statute in 1990, adding the

words “including an automobile liability insurance or no-fault

insurance carrier.” The government and USAA have already litigated

the issue of whether USAA is a third-party payer because of Medpay

under § 1095 as it was prior to 1990. In United States v. USAA,

5 F.3d 204 (7th Cir. 1993), the court held that USAA was not such

a third-party payer.

We are, of course, not bound by the Seventh Circuit’s

decision. Principles of estoppel, however, preclude the government

from re-litigating against the same party an issue upon which

another circuit has ruled against the government. United States v.

Stauffer Chem. Co., 464 U.S. 165, 171 (1984). Thus, if the

government is to prevail in its view that USAA is now a third-party

payer, it must do so under the 1990 amendments.3 We must, therefore, determine whether USAA is an “automobile liability insurance

or no-fault insurance carrier.”
5

We conclude that USAA is a no-fault insurance carrier because

Medpay is a form of no-fault insurance. DOD is entrusted to

administer § 1095, and it has issued regulations interpreting the

term “no-fault insurance” as

an insurance contract providing compensation for health

and medical expenses relating to personal injury arising

from the operation of a motor vehicle in which the

compensation is not premised on who may have been

responsible for causing such injury. No-fault insurance

includes personal injury protection and medical payments

benefits in cases involving personal injuries resulting

from operation of a motor vehicle.

32 C.F.R. § 220.12(I) (1995). USAA urges us to reject this

definition, arguing that “no-fault insurance” refers only to a

state-adopted regime of automobile insurance that pays without

regard to fault.

When an agency has issued an interpretation of a statute it is

entitled to administer, our own interpretation of the statute is

not entirely de novo. The Supreme Court has given us guidance, in

Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc.,

467 U.S. 837, 842-43 (1984), in reviewing such agency regulations:

When a court reviews an agency’s construction of the

statute which it administers, it is confronted with two

questions. First, always, is the question whether

Congress has directly spoken to the precise question at

issue. If the intent of Congress is clear, that is the

end of the matter; for the court, as well as the agency,

must give effect to the unambiguously expressed intent of

Congress. If, however, the court determines Congress has

not directly addressed the precise question at issue, the

court does not simply impose its own construction, as

would be necessary in the absence of administrative

interpretation. Rather, if the statute is silent or

ambiguous with respect to the specific issue, the
6

question for the court is whether the agency’s answer is

based on a permissible construction of the statute.

[Footnotes omitted.]

Accordingly, our first task is to apply the “traditional tools

of statutory construction,” id. at 843 n.9, and determine whether

the statute is ambiguous. If we decide that Congress has spoken

directly to the precise issue, our job is done; we will “give

effect to the unambiguously expressed intent of Congress.” Id.

at 843. If, however, we find that Congress has not spoken plainly

to the issue and the statute is ambiguous, we then will determine

whether the agency’s construction of the statute is a permissible

one.

A statute is ambiguous if it is susceptible of more than one

accepted meaning. See MCI Telecommunications Corp. v. American

Tel. & Tel. Co., 512 U.S. 218, ___, 114 S. Ct. 2223, 2230 (1994);

National R.R. Passenger Corp. v. Boston & Maine Corp., 503 U.S.

407, 418-19 (1992); see also NORMAN J. SINGER, 2A SUTHERLAND STATUTORY

CONSTRUCTION § 45.02 (5th ed. 1992). In interpreting a statute, we

begin with its plain language. White v. INS, 75 F.3d 213, 215 (5th

Cir. 1996); Phillips v. Marine Concrete Structures, Inc., 895 F.2d

1033, 1035 (5th Cir. 1990). Our attempt to ascertain plain meaning

requires us to look not only to “the particular statutory language

at issue,” but also to “the language and design of the statute as

a whole.” K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291 (1988)

(citing Bethesda Hosp. Ass'n v. Bowen, 485 U.S. 399, 403-05 (1988);
7

Offshore Logistics, Inc. v. Tallentire, 477 U.S. 207, 220-21

(1986)). It is only when traditional methods of statutory

construction fail to reveal a provision’s meaning that we conclude

that it is ambiguous. Chevron, 467 U.S. at 843 & n.9.

At first glance, either USAA’s or the government’s interpretation of § 1095 seems plausible. Recourse to dictionaries does not

clarify the issue but only serves to prove that the term “no-fault

insurance carrier” is ambiguous. One authority defines no-fault as

“[o]f or indicating a system of automotive insurance in which

accident victims are compensated by their insurance companies

without assignment of blame.” WEBSTER’S II NEW RIVERSIDE UNIVERSITY

DICTIONARY 797 (1988). This definition supports USAA’s position, as

it considers “no-fault” as referring to a system of insurance.

Another source supports the government’s view by defining “nofault” as “of, or relating to, or being a motor vehicle insurance

plan under which an accident victim is compensated . . . by his own

insurance company regardless of who is responsible for the

accident.” WEBSTER’S NINTH NEW COLLEGIATE DICTIONARY 801 (1989).

Both parties can (and do) claim assistance from a third

reference, which defines “no-fault auto insurance” as the

[t]ype of automobile insurance in which claims for

personal injury . . . are made against the claimant's own

insurance company (no matter who was at fault) rather

than against the insurer of the party at fault. Under

such state 'no-fault' statutes only in cases of serious

personal injuries and high medical costs may the injured

bring an action against the other party or his insurer.

No-fault statutes vary from state to state in terms of
8

scope of coverage, threshold amounts, etc.

BLACK’S LAW DICTIONARY 723 (5th ed. 1979). Still another authority

defines “no-fault” as “designat[ing] a form of motor vehicle

insurance.” OXFORD ENGLISH DICTIONARY 462 (2d ed. 1989). In its

examples of usage, however, it leans toward USAA’s definition. Id.

at 462 (“[A] no-fault compensation system in being discussed

. . . . [a] strong no-fault insurance bill.”). A final source

lends credence to the government’s position, defining “no-fault” as

“a form of automobile insurance enabling the policyholder in case

of an accident to collect a certain basic compensation . . . from

his own insurance company without determination of liability.”

RANDOM HOUSE COLLEGE DICTIONARY 902 (1982).

Based on this review of definitions of “no-fault,” we

determine that the word is commonly used in both ways, to denote

either (1) an insurance policy or (2) a state-imposed insurance

system that pays regardless of fault. Thus, the “battle of the

dictionaries” does not resolve the ambiguity. 

Because “no-fault” is an insurance term and can be a term of

art, we also consider how the word is used in the insurance field.

A leading insurance treatise uses “no-fault” to refer to a state

system of insurance without regard to fault. 12A COUCH ON INSURANCE

§§ 45:661-678 (2d ed. 1981); see also R. LONG, THE LAW OF LIABILITY

INSURANCE § 27.01 at 27-3 (1994). Another treatise, however, refers

to insurance policies paying without regard to fault as “nonfault
 

4 The dissent concludes that the statute’s legislative history renders the

term “no-fault insurance” unambiguous, although it concedes that the text of the

statute is ambiguous. It is a rare case indeed in which legislative history alone

will permit us to find that “Congress has . . . directly addressed the

precise question at issue.” Chevron, 467 U.S. at 843. This is not such a case.

The dissent acknowledges that the committee reports of the House and Senate merely

restate the text of the amendment. See H. REP. No. 923, 101st Cong., 2d Sess.,

reprinted at 1990 U.S.C.C.A.N. 3110; H. REP. No. 665, 101st Cong., 2d Sess.,

reprinted at 1990 U.S.C.C.A.N. 2931; S. REP. No. 521, 101st Cong., 2d Sess. 

The “legislative history” relied upon by the dissent is not really legislative

history at all, but a general background history of the statute drawn from nonlegislative sources. This is an even less reliable basis than legislative history

from which to conclude that a statute, ambiguous on its face, is unambiguous in

fact. Indeed, we conclude from the general background history of § 1095 that the

purpose of the statute is to prevent a windfall to insurers who happen to be liable

to members of the armed forces, and that purpose is furthered by DOD’s

interpretation of the statute. In any event, we respectfully do not believe that

the dissent’s sources are adequate to allow us to find that “Congress has directly

addressed the precise question at issue.”

9

insurance.” ROBERT E. KEETON, BASIC TEXT OF INSURANCE LAW, § 4.10 at 246

(1971). Therefore, we can see that while “no-fault” is more

commonly used in the insurance area to mean a state system paying

regardless of fault, it can also be used to refer to a policy that

pays regardless of fault.

This analysis leads us to conclude that, as used in § 1095,

the term “no-fault insurance” is susceptible of two distinct

meanings. Moreover, a review of the design of the statute as a

whole, as well as of its relationship with other laws, does not

clarify its meaning. Therefore, the statute is ambiguous.4 Cf.

MCI Telecommunications, 512 U.S. at ___, 114 S. Ct. at 2230 (“Most

cases of verbal ambiguity in statutes involve . . . a selection

between accepted alternative meanings shown as such by many

dictionaries.”). As Congress has not “directly addressed the

precise question at issue” here, it remains for us to determine
10

whether DOD’s construction of that term is a permissible one.

Chevron, 467 U.S. at 843. We have no difficulty concluding that it

is. DOD’s construction is consistent with the language of the

statute, dictionaries, and insurance treatises. It is not, of

course, the only permissible construction, but it is one permissible construction, and that is enough. We are Chevron-bound to

conclude that Medpay is a form of no-fault insurance within the

meaning of § 1095, and USAA is liable to the government for

reimbursement of medical expenses.

The judgment is REVERSED, and summary judgment is RENDERED for

the government on the cross-motion for summary judgment.

ENDRECORD 
 

5 Finding that Medpay is no-fault insurance, the majority does

not address the issue of whether USAA is a third-party payer

because it is “an automobile liability insurance . . . carrier.”

I would hold that, for 10 U.S.C. § 1095 purposes, USAA is not an

automobile liability insurance carrier and, thus, not a third-party

payer.

According to Department of Defense regulations, “automobile

liability insurance” is “insurance against legal liability for

health and medical expenses resulting from personal injuries

arising from operation of a motor vehicle.” 32 CFR § 220.12(a)

(1993). This liability coverage protects the insured from

liability for injuries sustained by third parties in automobile

accidents involving the insured as operator of the insured’s

automobile. Medpay, on the other hand, is coverage that provides

medical benefits for the insured when she is injured in an

accident. It is not insurance against legal liability. Therefore,

the Medpay coverage in the USAA’s policy is not automobile

liability insurance.

The government contends that § 1095 imposes liability for

reimbursement on any company which provides automobile liability

insurance, regardless of whether the policy in question is

automobile liability insurance. It is undisputed that USAA

provides automobile liability insurance, and thus could be

considered, in a general sense, an automobile liability insurance

carrier. I do not read § 1095 as expansively as the government.

I do not read § 1095 as imposing a duty to reimburse on either a

liability insurance carrier or a no-fault insurance carrier simply

because the insurer issues those types of policies to other

insureds; rather I read the statute as applying to the particular

carrier who has issued a specific policy to an individual who is

both an “insured” under such policy and is also simultaneously “a

covered beneficiary” entitled to medical care in a military

facility as contemplated by § 1095. The right of reimbursement, if

any, in favor of the government is dependent upon the terms and

provisions of a particular policy. 

DeMOSS, Circuit Judge, dissenting:

I agree with the majority that the controlling issue in

this case is “whether USAA is an ‘automobile liability insurance5

or no-fault insurance carrier.’” Majority Opinion at 4. I,

however, come to a different conclusion than that reached by the

majority.
12

I read 10 U.S.C. § 1095, influenced by the legislative

history, to clearly and unambiguously state that medical payment

plans such as Medpay are not no-fault insurance. The legislative

history makes clear that Congress used the phrase “no-fault

insurance” to refer to state adopted systems of automobile

insurance that pay regardless of fault. Congress did not use the

term to describe any automobile insurance policy that contains one

aspect of coverage which pays without regard to fault. Because

Congress has clearly spoken to the issue, we must “give effect to

the unambiguously expressed intent of Congress.” Chevron, U.S.A.

v. Natural Resources Defense Counsel, 467 U.S. 837, 843 (1984). I

would hold that Medpay is not no-fault insurance and USAA is not a

third-party payer under § 1095. Accordingly, I respectfully

dissent from the majority’s opinion.

I.

The government argues that, under the regulations, USAA

is a no-fault insurance carrier with respect to Medpay. No-fault

insurance, the government maintains, is any insurance policy which

pays regardless of fault. Department of Defense regulations define

“no-fault insurance” as: 

an insurance contract providing compensation for health and medical expenses

relating to personal injury arising from

the operation of a motor vehicle in which

the compensation is not premised on who

may have been responsible for causing

such injury. No-fault insurance includes

personal injury protection and medical
13

payments benefits in cases involving

personal injuries resulting from operation of a motor vehicle.

32 CFR § 220.12(I). USAA argues that the regulations are incorrect. USAA contends that no-fault insurance in § 1095 refers to a

state adopted regime of automobile insurance that pays without

regard to fault. It is the second sentence of this regulation

which is the critical issue in this case.

The Supreme Court has given us guidance in reviewing

agency regulations which interpret statutes. Chevron, 467 U.S.

837. “[T]he Supreme Court established a two-step method for

judicial review of an agency’s interpretation of a statute that it

administers.” Mississippi Poultry Ass’n, Inc. v. Madigan, 31 F.3d

293, 299 (5th Cir. 1994) (en banc). The court first must use the

“traditional tools of statutory construction” to determine “whether

Congress has directly spoken to the precise question at issue.”

Chevron, 467 U.S. at 842-43 & n.9 (1984). If so, the court and the

agency “must give effect to the unambiguously expressed intent of

Congress.” Id. at 842-43. However, “[i]f the statute is silent or

ambiguous” on the particular issue, the court must determine

“whether the agency’s answer is based on a permissible construction

of the statute.” Id. at 843. 

“In determining whether Congress has directly spoken to

the issue, the court may consider not only the plain meaning of the

statute, but also any pertinent legislative history.” Doyle v.
14

Shalala, 62 F.3d 740, 745 (5th Cir. 1995) (citing Chevron, 467 U.S.

at 845). The Supreme Court has made clear that the judiciary

retains its right “to say ‘what the law is,’ that is, to interpret

statutes.” Mississippi Poultry, 31 F.3d at 299 (quoting Chevron,

467 U.S. at 843 n.9). 

Accordingly, our first task is to determine whether the

statute is ambiguous. If we determine that Congress has spoken to

the issue, then our job is done; we will “give effect to the

unambiguously expressed intent of Congress.” Chevron, 467 U.S. at

843. If, however, we find that Congress has not clearly spoken to

the issue and the statute is ambiguous on its face, we then will

look to legislative history to clarify the purpose. If legislative

history is ambiguous, we will defer to the agency’s interpretation

if it is “based on a permissible construction of the statute.” Id.

at 843. 

II.

I agree with the majority that the statute is susceptible

to more than one reasonable meaning and, thus, is ambiguous on its

face. Therefore, we must consider the legislative history of the

1990 amendment. The committee reports of the House and Senate

provide no additional guidance, as they merely restate the text of

the amendment. See H. REP. No. 923, 101st Cong., 2d Sess.,

reprinted at 1990 U.S.C.C.A.N. 3110; H. REP. No. 665, 101st Cong.,

2d Sess., reprinted at 1990 U.S.C.C.A.N. 2931; S. REP. No. 521,
15

101st Cong., 2d Sess. 

In construing an amendment to a statute, however, it is

important to understand the reason behind the amendment, or, as the

Second Circuit has explained it, the “mischief” Congress sought to

remedy with the amendment. United States v. Clemente, 608 F.2d 76,

79 (2d Cir. 1979) (“The amendment must be interpreted in terms of

the mischief it was intended to rectify.”) (citing In re Letters

Rogatory, 385 F.2d 1017, 1020 (2d Cir. 1967)); 2A SUTHERLAND STATUTORY

CONSTRUCTION § 45.09. A review of the history of the military’s

attempts to collect from third-parties in general, and of § 1095 in

particular, clarifies Congress’ intent. After such a review, it is

apparent that the problem Congress was trying to remedy was the

thwarting of the military’s collection efforts caused by the

passage of no-fault automobile insurance systems in many states.

Members of the United States military and their dependents are entitled to free medical care in military hospitals. 10

U.S.C. §§ 1074, 1076. Occasionally a service member will be

injured due to the fault of another (often in an automobile

accident) and the soldier will be treated in a military hospital.

During World War II the military began seeking reimbursement from

tort-feasors for the cost of treating injured soldiers. The

authority for these actions was Army Regulation 25-220. See Capt.

Dominique Dillenseger and Capt. Milo H. Hawley, Sources of Medical

Care Recovery in Automobile Accident Cases, ARMY LAW. 50, 51
 

6 In some circumstances, the government can also recover under

state law as a third-party beneficiary to the insurance contract.

(continued...)

16

(October 1991) (hereinafter, “Medical Care Recovery”). The

military continued to bring such claims until 1947 when the Supreme

Court held that the federal government could not impose liability

on tort-feasors who injure soldiers because Congress had not passed

legislation authorizing the government to do so. United States v.

Standard Oil of California, 332 U.S. 301, 315-16 (1947).

For 15 years Congress declined the Court’s invitation to

create liability for tort-feasors injuring soldiers. In 1960,

however, a Comptroller General report revealed that the United

States was losing significant sums of money due to unreimbursed

healthcare expenditures provided to injured soldiers. COMPTROLLER

GENERAL OF THE UNITED STATES, REVIEW OF THE GOVERNMENT’S RIGHTS AND PRACTICES

CONCERNING RECOVERY OF THE COST OF HOSPITAL AND MEDICAL SERVICES IN NEGLIGENT

THIRD PARTY CASES (1960) (cited in Medical Care Recovery at 51).

Responding to the report, Congress in 1962 passed the Federal

Medical Care Recovery Act (“FMCRA”), 42 U.S.C. § 2651, et seq. The

FMCRA allows the government to recover from tort-feasors for

medical expenses it provides to service members. The FMCRA allows

recovery when the injury occurs “under circumstances creating a

tort liability upon some third person.” 42 U.S.C. § 2651(a). The

law of the state where the injury takes place determines whether a

tort has occurred. Medical Care Recovery at 51.6 
(...continued)

See, e.g., United States v. Allstate Ins. Co., 910 F.2d 1281, 1283-

84 (5th Cir. 1990). This is separate from the FMCRA and § 1095.

United States v. State Farm Mutual Automobile Ins. Co., 936 F.2d

206, 209 (5th Cir. 1991). Neither party raises this issue, so we

do not address it.

 

7 In 1990, 21 states, the District of Columbia and Puerto Rico

had some version of no-fault insurance applicable to automobile

collision injuries. 

 

8 Medical payment coverages (such as Medpay) differ from

policies under no-fault insurance systems in two key respects.

First, Medpay is not required by statute; it is a voluntary add-on.

Second, Medpay does not alter tort liability; it merely compensates

the insured for any medical expenses he has incurred due to an

automobile accident. 

 

9 Specifically, the report was addressed to the Chairman,

Subcommittee on Readiness, Committee on Armed Services, House of

Representatives.

17

Because tort liability is required for FMCRA recovery,

the government could not recover in states which adopted no-fault

automobile insurance laws. In states where no-fault automobile

insurance laws have been adopted,7 there is no tort liability for

injuries sustained in automobile accidents. Instead, all individuals have insurance which pays regardless of who is at fault. 12A

Couch on Insurance § 45:661, at 245-46 (2d ed. 1981).8

In 1990 the General Accounting Office (GAO) provided a report

to Congress.9 GAO, MILITARY HEALTH CARE: RECOVERY OF MEDICAL COSTS FROM

LIABLE THIRD PARTIES CAN BE IMPROVED, GA1.13:NS1AD-40-49 (April 1990)

(hereinafter, the “GAO report”). The GAO report noted that since

the passage of the FMCRA:

[S]ome states have . . . passed no-fault

insurance laws that generally allow for
 

10 I recognize that the majority does not consider my

discussion of the GAO report to be legitimate legislative history

because it is not a committee report or a statement from a

congressman. Majority Opinion at 8 n.4. I do not share the

majority’s narrow view of legislative history. I consider quite

instructive the

agency report which, all parties agree, provided the impetus for

Congress to act. A leading treatise on statutory construction

notes that reports of non-legislative committees or commissions

suggesting particular legislation “are considered valuable aids.”

SUTHERLAND STATUTORY CONSTRUCTION § 48.11 at 347. I consider the report

of the GAO suggesting legislation to be similarly helpful.

 

11 It appears, however, that the DOD misinterpreted the GAO

report. The DOD described the GAO report as “recommend[ing]

expanding [the government’s] authority to cover no-fault automobile

insurance policies. . . .” 57 Fed. Reg. at 41096 (emphasis added).

(continued...)

18

recovery by individuals from their own

insurance companies irrespective of

fault. Since no-fault laws by definition

do not establish an at-fault or liable

party, [the government’s] legal ability

to conduct recoveries under [the FMCRA]

varies according to the no-fault statutes

in these states.

GAO report at 4. The GAO report recommended “that the Congress

enact legislation to enable recovery by the government in states

with no-fault automobile insurance laws.”10 Id.

The Department of Defense (“DOD”), when it promulgated

its regulations to amended § 1095, recognized that the GAO report

was what prompted Congress to amend § 1095 to include no-fault

insurance carriers. 57 Fed. Reg. 41096 (1992) (“based on the GAO

report, Congress supplemented current legal authority to collect in

tort liability cases with new authority to also collect from nofault insurance carriers”).11 
(...continued)

The GAO report did not refer to insurance policies, but instead

recommended that “Congress enact legislation to enable recovery by

the government in states with no-fault automobile insurance laws.”

GAO report at 4 (emphasis added).

19

Thus, we see that Congress (1) was given a report

detailing problems with collecting reimbursements in states with

no-fault insurance systems; (2) was given a recommendation that the

law be changed to allow the government to obtain reimbursements in

states with no-fault insurance systems; and (3) then passed a law

providing that the government can collect from “no fault insurance

carriers.” Based on these facts, it is clear that by the phrase

“no fault insurance carriers,” Congress meant insurance companies

providing coverage in states with no-fault systems of automobile

insurance. Congress was not referring to insurance companies

providing automobile liability policies which contain coverages

that pay regardless of fault. I found nothing in the legislative

history which refers to the “medpay” coverage involved in the

policies in this case.

In passing the 1990 amendments to § 1095, Congress

provided that “[i]n cases in which tort liability is created upon

some third person, collection from a third-party payer that is an

automobile liability insurance carrier shall be governed by the

provisions of [the FMCRA].” 10 U.S.C. § 1095(i)(2). Stated

differently, when a third-party tortiously injures a service member

in a state which uses traditional tort liability, the government
 

12 As discussed above, in a state with a no-fault system there

is no tort liability, so the situation described in § 1095(i)(2)

(the creation of tort liability upon a third party) will not occur.

20

must recover through the FMCRA, rather than § 1095. This provision

shows that Congress was concerned with state systems of fault or

no-fault based insurance, rather than with individual insurance

plans. The fact that Congress was concerned with state insurance

systems in § 1095(i)(2) is further evidence that Congress was

referring to state systems of insurance when it used the term “no

fault insurance carrier” in § 1095(h)(1). 

Additional evidence that Congress was referring to nofault systems when it amended § 1095 is found in a 1991 technical

amendment to the statute. Section 1095(i)(2) originally provided

that “[i]n cases in which tort liability is created upon some third

person, collection from a third-party that is an automobile

liability or no fault insurance carrier shall be governed by the

[FMCRA].” (Emphasis added). Congress quickly realized that the

language “or no fault insurance” was out of place in a section

concerning tort liability, so the phrase was deleted. Pub.L. 102-

190, § 714. The House Report makes clear that this change is a

“technical amendment” and that no substantive change is intended.

H.Rep. No. 60, § 717, reprinted in 1991 U.S.C.C.A.N. 918, 971.

Section 1095(i)(2) concerns states which have retained traditional

tort liability.12 If the term “no fault insurance carrier” refers

to particular policies, then it would properly be included in §
 

13 For example, the tort-feasor could have insufficient

insurance, so the no-fault policy would be needed to cover the

medical expenses.

21

1095(i)(2), as there can be no-fault coverages in auto liability

policies when there is tort liability.13 If, however, “no fault

insurance carrier” refers to systems, then it is out of place in a

section discussing tort liability. 

Based on the foregoing, it is apparent that the harm

Congress sought to remedy with its 1990 amendments to § 1095 was

the government’s inability to get reimbursement for medical

payments in states with no-fault insurance systems. Considering

the legislative history and the 1991 technical amendments, I find

that § 1095 is not ambiguous. Congress clearly intended “no fault

insurance carrier” to refer to state systems that have eliminated

tort as a theory of recovery and substituted insurance requirements

that pay without regard to fault. Congress has clearly spoken to

the issue, and we, as well the executive branch, must defer to

Congress. Mississippi Poultry, 31 F.3d at 299 (“core democratic

principle of congressional primacy” requires that we defer to

Congress’ clearly expressed intent). Therefore, I would not follow

the Department of Defense regulation defining no-fault insurance,

32 CFR §220.12(I), because it is contrary to Congress’ clearly

expressed intent. 
22

III. 

Medpay is not no-fault insurance. Therefore, USAA is not

a “third-party payer” under § 1095 and, thus, is not required to

reimburse the government for the medical expenses that the

government incurred. I would affirm the district court’s grant of

summary judgment in favor of USAA and, therefore, I respectfully

dissent.