UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF NEW YORK 

-------------------------------------------------------X 

STEPHEN J. FEIN, on behalf of himself and 

all other similarly situated, 

 Plaintiffs, 

 -againstELAINE CHAO, Secretary, United States 

Department of Labor and the UNITED 

STATES OF AMERICA, 

 Defendants. 

-------------------------------------------------------X 

07 Civ. 3312 (PAC) 

PLAINTIFFS’ MEMORANDUM OF LAW IN OPPOSITION 

TO DEFENDANTS’ MOTION TO DISMISS 

 Jacob Rollings, Esq. (JR-9247) 

Attorney for Plaintiffs 

57 Gramatan Avenue 

Mt. Vernon, NY 10550 

Phone: (914) 699-5220 

Fax: (914) 699-3740 

Case 1:07-cv-03312-PAC Document 9 Filed 09/28/2007 Page 1 of 14
 i 

TABLE OF CONTENTS 

PRELIMINARY STATEMENT .....................................................................................................1 

ARGUMENT...................................................................................................................................2 

 I. STANDARDS FOR A MOTION TO DISMISS.....................................................2 

 II. THIS COURT HAS SUBJECT MATTER JURISDICTION UNDER THE 

 KYNE DOCTRINE .................................................................................................3 

A. Application of the Kyne Doctrine................................................................3 

B. The Kyne Doctrine Applies to 5 U.S.C. § 8128(b)......................................4 

C. The Kyne Doctrine Applies to 5 U.S.C. § 5304 ..........................................6 

 III. PLAINTIFFS HAVE STATED A CLAIM UOPN WHICH RELIEF MAY 

 BE GRANTED ........................................................................................................6 

CONCLUSION................................................................................................................................7

Case 1:07-cv-03312-PAC Document 9 Filed 09/28/2007 Page 2 of 14
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PRELIMINARY STATEMENT 

 Plaintiff Stephen J. Fein, on behalf of himself and all similarly situated federal employees 

receiving federal employee’s (workers’) compensation, 5 U.S.C. § 8101, et seq., commenced this 

lawsuit against defendant Elaine Chao in her official capacity as the United States Secretary of 

Labor. Plaintiffs recently amended the complaint to include the United States of America as a 

party defendant. The amended complaint is annexed hereto. 

The complaint alleges that plaintiffs, as federal employees, as defined by 5 U.S.C. § 5102 

are entitled to locality-based pay increases pursuant to 5 U.S.C. § 5304. As the documents 

annexed to defendants’ moving papers show, Mr. Fein, through his attorney’s office, followed 

the procedures set forth in 5 U.S.C. § 8128(a) and wrote a letter to Secretary Chao’s designee, 

Hon. Shelby Hallmark, Director of the Office of Workers’ Compensation Programs for the 

United States Department of Labor (Def. Exh. F) formally requesting that Secretary Chao review 

his award on the ground stated: as a federal employee, he is entitled to a locality-based increase. 

After several letters back and forth between plaintiff and representatives of Secretary Chao (Def. 

Exh. G-I), on February 8, 2007, Mr. Zev C. Sapir, District Director of the Employment Standards 

Administration of the Office of Workers’ Compensation Programs in New York, NY stated 

conclusively that compensation recipients do not receive locality based increases, like “working” 

federal employees. (Def. Exh. J). 

Defendants argue that the complaint should be dismissed as § 8128(b) expressly bars 

judicial review of any action by the Secretary of Labor in allowing or denying a claim for 

benefits. Thus, this court does not have subject matter jurisdiction. Alternatively, defendants 

aver that even if this court were to review this matter as a violation of a clear statutory mandate 

no such violation can be shown and therefore the complaint should be dismissed for failure to 

state a claim. 

Case 1:07-cv-03312-PAC Document 9 Filed 09/28/2007 Page 3 of 14
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Plaintiffs submit that this determination violated a “clear statutory mandate.” That is, 

federal compensation recipients are federal employees (as defined in § 5102). They should, 

therefore, receive locality based increases as all federal employees do pursuant to § 5304. 

As shown more fully below, plaintiffs will show that the Kyne Doctrine, Leedom v. Kyne, 

358 U.S. 184, 79 S.Ct. 180 (1958) furnishes this court with subject matter jurisdiction, despite 

the language of § 8128(b). Further, plaintiffs have stated a claim that their rights as federal 

employees were violated in not providing them locality based pay increases. 

ARGUMENT 

I. STANDARDS FOR A MOTION TO DISMISS 

 When considering a motion to dismiss pursuant to rule 12(b)(1), the court must take all 

facts alleged in the complaint as true and draw all reasonable inferences in favor of plaintiff. 

Raila v. United States of America, 355 F.3d 118, 119 (2d. Cir. 2004)(citation omitted). 

Dismissal is inappropriate unless it appears beyond doubt that the plaintiff can prove no set of 

facts which would entitled him or her to relief. Ibid.

Similarly, in considering a Rule 12(b)(6) motion, the court accepts as true all factual 

allegations in the complaint and draws inferences from those allegations in the light most 

favorable to the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683 (1974); Bernheim 

v. Litt, 79 F.3d 318, 321 (2d Cir. 1996). Under 12(b)(6) dismissal is warranted only if, under any 

set of facts that the plaintiff can prove consistent with the allegations, it is clear that no relief can 

be granted. Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229 (1984); Cooper v. 

Parsky, 140 F.3d 433, 440 (2d Cir. 1988). In its review of a motion to dismiss the court may 

consider “only the facts alleged in the pleadings, documents attached as exhibits or incorporated 

by reference in the pleadings and matters of which judicial notice may be taken.” Samuels v. Air 

Transp. Local 504, 992 F.2d 12, 15 (2d Cir. 1993). 

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II. THIS COURT HAS SUBJECT MATTER JURSIDCTION UNDER THE 

KYNE DOCTRINE 

A. Application of the Kyne Doctrine

Courts have recognized that an implicit and narrow exception to the bar on judicial 

review exists for claims that the agency exceeded the scope of its delegated authority or violated 

a clear statutory mandate. See, e.g., Staacke v. United States Secretary of Labor, 841 F.2d 278, 

281 (9th Cir. 1988). This exception was first recognized in Leedom v. Kyne, 358 U.S. 184, 3 L. 

Ed. 2d 210, 79 S. Ct. 180 (1958). Kyne held district courts have jurisdiction "to strike down an 

order of the Board made in excess of its delegated powers and contrary to a specific prohibition 

in the [NLRA]." 

The United States Supreme Court noted 

we begin with the strong presumption that Congress intends judicial review of 

administrative action. From the beginning "our cases [have established] that 

judicial review of a final agency action by an aggrieved person will not be cut off 

unless there is persuasive reason to believe that such was the purpose of 

Congress.” 

Bowen v. Michigan Academy of Family Physicians, 476 U.S. 667, 670, 106 S. Ct. 2133 (1986) 

(citation omitted). Which “may be overcome ‘only by a showing of clear and convincing 

evidence of a contrary legislative intent.’” Traynor v. Turnage, 485 U.S. 535, 542, 108 S. Ct. 

1372 (1988) (citation omitted). 

 Even when Congress did not expressly provide for judicial review, it may nonetheless be 

available. Bowen, 476 U.S. at 672; Traynor, 485 U.S. at 545. As stated in Kyne “[the Supreme 

Court] cannot lightly infer that Congress did not intend judicial protection of rights it confers 

against agency action taken in excess of delegated powers.” 358 U.S. at 187, 188. Such judicial 

oversight is needed to protect against “freewheeling agencies meting out their brand of justice in 

a vindictive manner.” Oestereich v. Selective Serv. Sys. Local Bd. No. 11, 393 U.S. 233, 237, 89 

Case 1:07-cv-03312-PAC Document 9 Filed 09/28/2007 Page 5 of 14
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S.Ct. 414 (1968). Thus, where agency action contravenes a specific statutory prohibition and 

results in the overstepping of the agency’s delegated powers, judicial review is not barred. Boire 

v. Greyhound Corp., 376 U.S. 473, 480-81, 84 S.Ct. 894 (1964). 

 As defendants note, the High Court subsequently “refined” its holding in Kyne in Board 

of Governors v. MCorp Financial, Inc., 502 U.S. 32, 43-44, 112 S.Ct. 459 (1991). MCorp held 

that two “critical” factors distinguished the review provision at issue in Kyne: the lack of any 

alternative means of judicial review for plaintiffs and the lack of a clear statement of Congress’s 

preclusive intent. In the absence of such factors, the Kyne doctrine did not apply.” 

B. The Kyne Doctrine Applies to § 8128(b)

While it cannot be denied that § 8128(b) is an example of language that Congress 

employees when it “intends to bar judicial review altogether.” Lindahl v. Office of Personnel 

Mgmt., 470 U.S. 768, 780 n.13, 105 S.Ct. 1620 (1985). Nonetheless, as defendants have 

conceded 

§ 8128(b) is silent as to claims that the Secretary acted outside the scope of her 

statutory authority, and as the Fourth Circuit pointed out in Hanauer v. Reich, 82 

F.3d 1304 (4th Cir. 1996), “unlike the statutory scheme at issue in MCorp, 

[FECA] does not provide for judicial review of a final order of the Secretary. 

Thus, “acceptance of the Secretary’s argument that § 8128(b) precludes district 

courts from considering claims that the Secretary violated a clear statutory 

mandate would, in the words of the Supreme Court, ‘wholly deprive [claimants] 

of a meaningful and adequate means of vindicating [their] statutory rights.” Id. at 

1308-09 (quoting MCorp, 502 U.S. at 43). 

Lepre v. Department of Labor, Employee Compensation Appeals Board, 275 F.3d 59, 73 (D.C. 

Cir. 2001) (emphasis supplied)(other citations omitted).

Defendants note that several circuit courts have weighed in on the issue of whether § 

8128(b) permits judicial review of a violation of a clear statutory mandate. The vast majority of 

the circuits have permitted such judicial review. The Fourth Circuit in Hanauer v. Reich, 82 

F.3d 1304, 1307 (4th Cir. 1996); the Sixth in Owens v. Brock, 860 F.2d 1363, 1367 (6th Cir. 

Case 1:07-cv-03312-PAC Document 9 Filed 09/28/2007 Page 6 of 14
 5 

1988); the Eighth in Brumley v. U.S. Dept. of Labor, 28 F.3d 746, 747 (8th Cir. 1994); the Ninth 

in Staacke v. United States Secretary of Labor, 841 F.2d 278, 282 (9th Cir. 1988); the Eleventh in 

Woodruff v. United States Department of Labor, 954 F.2d 634, 639-40 (11th Cir. 1992) (per 

curiam) and the D.C. Circuit in Lepre, supra. at 73 all held that judicial review of a decision by 

the Secretary of Labor that violates a clear statutory mandate is permitted. Only the First 

(Paluca v. Secretary of Labor, 813 F.2d 524 (1st Cir. 1987)) and Third Circuits (McDougalSaddler v. Herman, 184 F.3d 207, 213 (3d Cir. 1999)) held to the contrary. 

This brings us to the Second Circuit’s decision in Senerchia v. United States, 235 F.3d 

129 (2d Cir. 2000). It is respectfully submitted that the Senerchia Court did rule that judicial 

review of clear statutory violations are permitted. The Court “assumed” such an exception 

existed, id. at 132, and then proceeded to apply the Kyne Doctrine, i.e., determined whether a 

clear statutory mandate was violated. It is respectfully submitted that it would have made no 

sense for the Second Circuit to have carefully analyzed the relevant statutes at issue in that case 

if such “judicial review” were barred by the statute in the first instance. 

Significantly, the Southern District Judge Buchwald in Baik v. Potter, 2007 U.S. Dist. 

LEXIS 29497 at n. 11, observed: 

[t]here may be two narrow exceptions to the prohibition on judicial review of 

FICA claims: where a plaintiff alleges either that the government violated his 

constitutional rights or that it violated a clear statutory mandate. See e.g.

Senerchia v. United States [cit. omitted] (“Assuming an exception for clear 

statutory violation exists, judicial review of such violations is extremely limited.”) 

Thus, Judge Buchwald, in the only case found by plaintiffs citing Senerchia, albeit in dicta, cites 

it for the proposition that judicial review of clear statutory mandates is permitted. 

 Even if one were to assume that Senerchia did not set a Second Circuit precedent1

 on this 

 

1

 District courts in this Circuit have held that judicial review of FICA claims for violations of clear statutory 

violations are permitted. See, Wacks v. Reich, 950 F.Supp. 454, 459 n. 4 (D.Conn. 1996) (“[t]he reasoning employed 

by other federal courts in carving out exceptions for Constitutional violations and violations of clear statutory 

mandate is persuasive and those exceptions are hereby adopted.”); Senerchia v. United States, 2000 U.S. Dist. 

Case 1:07-cv-03312-PAC Document 9 Filed 09/28/2007 Page 7 of 14
 6 

issue, this court should hold that judicial review is available on the ground that § 8128(b) does 

not provide an alternative means of judicial review for plaintiffs. Thus, the Kyne Doctrine 

applies according to MCorp. 

C. The Kyne Doctrine Applies to 5 U.S.C. §§ 5102 and 5304

Defendant accurately notes: 

plaintiff points to a different statutory scheme in claiming that employees as 

defined by 5 U.S.C. § 5102 are entitled to locality based pay increases pursuant to 

5 U.S.C. § 5304. However, the Secretary of Labor does not administer the 

provisions at 5 U.S.C. § 5101 et seq. or 5 U.S.C. § 5301 et seq. 

(Def. Mem. of Law, p. 15). 

Plaintiffs have amended the complaint in recognition of this fact. That is, the amended 

complaint lists as defendants both the United States Secretary of Labor and the United States of 

America. Plaintiffs argue that they are federal employees as defined in § 5102(a)(2) “an 

individual employed in or under an agency.” They are, therefore, entitled to locality based pay 

under § 5304. While the Secretary of Labor may not administer these statutory schemes, 

certainly an agency within defendant “United States of America” does. 

A review of § 5101 et seq. and § 5301 et seq. reveals both a lack of any alternative means 

of judicial review for plaintiffs and the lack of a clear statement of Congress’s preclusive intent. 

Thus, the Kyne doctrine certainly applies, pursuant to the dicates of MCorp.

III. PLAINTIFFS HAVE STATED A CLAIM UPON WHICH RELIEF MAY 

BE GRANTED

The drastic remedy of dismissal of plaintiffs’ claims is not warranted here. Defendants 

argue that plaintiffs have not shown entitlement to locality based adjustments within the context 

of FECA. That is correct, however, defendants do not address plaintiffs’ claims as federal 

 LEXIS 92 (Griesa, J.), aff’d 235 F.3d 129 (2d Cir. 2000). 

Case 1:07-cv-03312-PAC Document 9 Filed 09/28/2007 Page 8 of 14
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employees, qua federal employees. 

It is respectfully submitted that the statutory schemes § 5101 et seq. or § 5301 et seq.

apply to plaintiffs in their capacity as federal employees. The schemes make no distinction 

between “working employees” and “compensation employees.” Compensation employees are 

not unemployed. As employees of the federal government, plaintiffs are entitled to be 

compensated as such. A recipient of federal employee compensation must still contend with the 

high cost of living in certain areas of the United States as do all residents thereof. 

 That is, the Kyne doctrine which the Second Circuit in Senerchia, 235 F.3d at 132-33 

held “applies only when the agencies interpretation is so egregious as to be clearly contrary to 

the statute” (Defs. Mem of Law, p. 13) applies here. There is no question that federal employees 

have a clear right to locality based pay increases. It is impossible to interpret the statute any 

other way. By denying this right, a clear statutory mandate is violated. As such, plaintiffs have 

stated a claim upon which relief can be granted. 

CONCLUSION 

 It is respectfully submitted that plaintiffs have shown that this Court has subject matter 

jurisdiction under the Kyne doctrine and that they have a colorable claim. For these reasons, 

defendants’ motion to dismiss should be denied in its entirety. 

Dated: Mt. Vernon, NY 

 September 28, 2007 

 Respectfully submitted, 

 ___________________________ 

 Jacob Rollings, Esq. (JR-9247) 

Case 1:07-cv-03312-PAC Document 9 Filed 09/28/2007 Page 9 of 14
 8 

JACOB ROLLINGS, ESQ. (JR- 9247) 

Attorney for Plaintiffs 

57 Gramatan Avenue 

Mount Vernon, NY 10550 

(914) 699-5220 

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF NEW YORK 

---------------------------------------------------X 

STEPHEN J. FEIN, on behalf of himself 

and all others similarly situated, 

 

 Plaintiffs, 

 

 -againstELAINE CHAO, Secretary, United States 

Department of Labor and the UNITED 

STATES OF AMERICA, 

 Defendants. 

---------------------------------------------------X 

07 Civ. 3312 (PAC) 

AMENDED 

CLASS ACTION 

COMPLAINT 

Jury trial requested 

 Plaintiff STEPHEN J. FEIN, by his attorney, JACOB ROLLINGS, ESQ., complaining of 

the defendants, alleges as follows: 

JURISDICTION 

1. This Court has subject matter jurisdiction under the Administrative Procedure 

Act, 5 U.S.C. § 704 and 28 U.S.C. § 1331, federal question jurisdiction, for review of this action 

pursuant to the Kyne doctrine2

 giving it the power to review clear violations of statutory 

mandate. The Kyne doctrine allows for judicial review of an agency action when the agency 

exceeds its statutory authority or violates a clear statutory mandate, even if Congress precluded 

judicial review in the Act. 

VENUE 

 

2 Leedom v. Kyne, 358 U.S. 184, 79 S.Ct. 180 (1958) 

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2. Venue is proper pursuant to 28 U.S.C. § 1391(b)(2) in that the events or 

omissions that gave rise to this action occurred in the U.S. Department of Labor, Employment 

Standards Administration, Office of Workers’ Compensation Programs, 201 Varick Street, 

Room 704, New York, NY 10014 in the Southern District of New York. 

PARTIES 

3. Plaintiff STEPHEN J. FEIN (“Mr. Fein”) is an employee of the United States 

under the definitions of these terms in 5 U.S.C. §§ 5102 and 8101(1). He is a recipient of federal 

employees compensation under the Federal Employees Compensation Act (“FECA”), 5 U.S.C. § 

8101, et seq. In particular, Mr. Fein was and is a civilian employee of the United States Navy 

who was injured on the job. 

4. Defendant ELAINE CHAO is sued in her official capacity as the United States 

Secretary of Labor. 

5. Defendant UNITED STATES OF AMERICA, through its Office of Personnel 

Management or other offices therein, is responsible for setting and administering the rate of pay 

of federal employees. 

ADMINISTRATIVE PROCEEDINGS 

6. On October 25, 2006, Mr. Fein, through this office, made an application to 

defendant, through Hon. Shelby Hallmark, Director, Office of Workers’ Compensation 

Programs, United States Department of Labor, for review of his Federal Employees’ 

Compensation award pursuant to 5 U.S.C. § 8128(a) for a locality-based comparability payment, 

pursuant to 5 U.S.C. § 5304, retroactive from the time he began receiving employees 

compensation. Specifically, Mr. Fein, as a resident of Long Island, New York is entitled to an 

increase due to the higher cost of living there vis-a-vis the national average. 

Case 1:07-cv-03312-PAC Document 9 Filed 09/28/2007 Page 11 of 14
 10 

7. On November 17, 2006, defendants, through Zev C. Sapir, District Director, 

Employment Standards Administration, Office of Workers’ Compensation Programs in New 

York, NY, in the Southern District of New York, responded to Mr. Fein’s letter. Mr. Sapir stated 

that Mr. Fein’s case file was protected under the Privacy Act and that Mr. Fein must provide a 

signed release in order to respond to his application. 

8. On December 19, 2006, Mr. Fein, again through this office, mailed to defendants’ 

representative Mr. Sapir, a signed release. 

9. On February 8, 2007, Mr. Sapir responded directly to Mr. Fein. Mr. Sapir stated 

that compensation recipients do not receive “locality pay” based on the state they reside like 

working federal employees. 

CLASS ACTION ALLEGATIONS 

10. Mr. Fein brings this action on his own behalf and behalf of all others similarly 

situated, pursuant to Rules 23(a) and 23(b)(2) of the Federal Rules of Civil Procedure. 

11. The class so represented by plaintiff in this action, of which he is a member, 

consists of all United States federal compensation recipients, under 5 U.S.C. § 8101, et seq. 

12. The exact number of members of the class, as hereinabove identified and 

described is not known, but the class is so numerous that joinder of individual members herein is 

impracticable. 

13. There are common questions of law and fact in the action the relate to and affect 

the rights of each member of the class and relief sought is common to the entire class, viz., a 

declaratory judgment that plaintiffs, federal compensation recipients, as federal employees are 

entitled to locality based pay adjustments, pursuant to 5 U.S.C. § 5304 and § 843 of Pub.L. 109-

115 (under 5 U.S.C. § 5303) as set forth in Schedule 9 of 5 U.S.C. § 5332 (locality based areas 

are set forth in 5 C.F.R. § 531.603). 

Case 1:07-cv-03312-PAC Document 9 Filed 09/28/2007 Page 12 of 14
 11 

14. The claims of Mr. Fein, as representative of the class herein, are typical of the 

claims of the class, in that the claims of all members of the class, including plaintiff, depend on a 

showing of the acts and omissions of defendant give rise to the right of plaintiffs to the relief 

sought herein. 

15. Mr. Fein is a representative party for the class and is able to, and will, fairly and 

adequately protect the interests of the class. The attorney for plaintiff is experienced and capable 

in litigation in the field of administrative and employment law and litigation, in general. The 

attorney for plaintiff will actively conduct and be responsible for plaintiffs herein. 

16. This action is properly maintained as a class action insasmuch as defendants who 

oppose the class has acted or refused to act on grounds applicable to the class and has, by reason 

of such conduct, made appropriate final injunctive relief or corresponding declaratory relief with 

respect to the entire class, as sought in this action. 

CAUSE OF ACTION 

17. Plaintiffs, federal compensation recipients, as federal employees under the 

definitions set forth in 5 U.S.C. §§ 5102 and 8101(1) are entitled to locality based pay increases, 

pursuant to 5 U.S.C. § 5304. 

18. Defendants refuse and continue to refuse to compensate plaintiffs as such. 

WHEREFORE, plaintiff prays, for himself and all other members of the class, for the 

following relief: (1) a declaratory judgment that all federal compensation recipients, as federal 

employees, are entitled to locality-based payment adjustments and raises.; (2) that said federal 

compensation recipients have their pay adjusted based on their localities from the time they first 

received federal compensation, together with interest; (3) payment of plaintiffs’ reasonable 

attorney’s fees and costs of this action; and (4) such other relief that this Court may deem just 

and equitable. 

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 12 

Dated: New York, NY 

 September 12, 2007 

Jacob Rollings, Esq. (JR- 9247) 

Attorney for Plaintiffs 

57 Gramatan Avenue 

Mount Vernon, NY 10550 

(914) 699-5220 

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