Opinion ID: 612077
Heading Depth: 2
Heading Rank: 2

Heading: The Federal Medical Care Recovery Act

Text: 21 The Government argues that the Federal Medical Care Recovery Act grants it priority to the disputed fund and, therefore, that we should affirm the district court's decision. According to the Government, the primary purpose of the [Act] is to enable the government to recoup some of the millions of dollars it expends annually providing medical care to federal employees. Brief for Appellees at 3. We find, however, that the Act does not speak to the issue of priority. 22 The statute distinguishes between two distinct categories of damages: the medical expenses incurred by the Government on behalf of the injured employee and the damages the employee is entitled to receive, net of those expenses. While the statute grants the United States the right to recover the former, there is nothing in its language to suggest that the Government's claim has a priority over the employee's. Section 2651(a) of the FMCRA provides, in relevant part, that 23 the United States shall have a right to recover from [third parties] the reasonable value of the care and treatment [paid for by the Government] and shall as to this right be subrogated to any right or claim that the injured or diseased person ... has against such third person to the extent of the reasonable value of the care and treatment so furnished or to be furnished. 24 42 U.S.C. § 2651(a) (emphasis added). The section's reference to subrogation, moreover, suggests that the two claims are to be treated alike. Subrogation is defined as[303 U.S.App.D.C. 39] [t]he substitution of one person in the place of another with reference to a lawful claim ... so that he who is substituted succeeds to the rights of the other in relation to the ... claim.... 25 Black's Law Dictionary 1279 (5th ed. 1979). The Government, as subrogee, does not secure rights superior to those of its employee; it merely steps into his shoes in order to assert a claim to that part of the total damages that is its due. 26 Finally, the Government's interpretation of the statute runs headlong into 42 U.S.C. § 2652(c), which provides that 27 No action taken by the United States in connection with the rights afforded under this legislation shall operate to deny to the injured person the recovery for that portion of his damage not covered hereunder. 28 42 U.S.C. § 2652(c). The Government was unable to square this section with its suggestion that the statute grants it priority. The Government asserted in its brief that the section protected the victim's legal right to recover damages, Brief for Appellees at 5, but at oral argument Government counsel could not articulate a single hypothetical situation in which the Government's initiation of a suit would serve to keep the individual claimant out of court. 29 Our reading of section 2651(a) is reinforced by section 2652(c)'s concern for protecting the injured employee's ability to recover that portion of his damage not covered by the FMCRA. As the Government's construction of the statute would render section 2652(c) useless, and our reading gives it meaning, the Government's version cannot stand. See In re Surface Mining Regulation Litig., 627 F.2d 1346, 1362 (D.C.Cir.1980) ([E]ffect must be given, if possible, to every word, clause and sentence of a statute ... so that no part will be inoperative or superfluous, void or insignificant.) (quoting 2A Sutherland, Statutory Construction § 46.06 (4th ed. 1973)) (internal quotation marks omitted). 30 The Government also invokes 42 U.S.C. § 2652(b), which provides that the head of the relevant agency may 31 waive any ... claim, in whole or in part, for the convenience of the Government, or if he determines that collection would result in undue hardship upon the person who suffered the injury or disease.... 32 42 U.S.C. § 2652(b)(2). The Government argues that there would be no need for this provision if its claim did not have a priority over the employee's, because the Government could constructively waive its claim by declining to bring suit. 33 Contrary to the Government's contention, section 2652(b) serves a purpose even though the statute does not establish priority. A review of the cases brought under the Act illustrates that a Government waiver is not the same as a decision not to sue. Because the FMCRA creates the possibility of multiple litigation, the waiver is necessary to encourage and/or allow settlements. A silent waiver cannot serve the same purpose or achieve the same results as an explicit one so long as the Government retains the authority to sue. 34 As courts applying the FMCRA have recognized, the statute gives the United States an independent right of recovery against the tortfeasor. United States v. Housing Auth. of Bremerton, 415 F.2d 239, 241 (9th Cir.1969). Further, they agree that section 2651(b) is permissive: [T]he statute authorizes the United States to enforce its independent right either by intervention in a suit brought by the injured party, or on its own if no such action is brought for six months. Id.; see also 42 U.S.C. § 2651(b). Finally, the United States may bring an independent action against the tortfeasor even where a suit is brought by the injured party within six months and the United States does not intervene. Housing Authority of Bremerton, 415 F.2d at 241-42. The courts have held, generally, that a settlement or judgment in the individual claimant's case does not prejudice the Government from later suing the tortfeasor. See United States v. Merrigan, 389 F.2d 21, 22 n. 1, 26 (3d Cir.1968) (permitting suit to be brought over a year after the victim's suit); see also United States v. York, 398 F.2d 582, 585-87 (6th Cir.1968) (holding that although the individual had settled within six months of treatment, [303 U.S.App.D.C. 40] the statute does not bar the Government from later exercising its independent right of recovery). Regardless of the course of action taken by the injured party, the Government's right to sue is limited only by the federal statute of limitations. See Housing Authority of Bremerton, 415 F.2d at 242. 35 These cases illustrate that an agency's decision not to sue is not the equivalent of an express waiver. Section 2651(b) leaves tortfeasors uncertain in the face of double liability, or at least daunted by the prospect of multiple litigation. Cf., e.g., Housing Authority of Bremerton, 415 F.2d at 242 (noting the possibility of multiple litigation under the Act); see also Leatherman v. Pollard Trucking Co., 482 F.Supp. 351, 353 (E.D.Okla.1978) (recognizing that statute creates prospect of multiple litigation and/or double liability and considering motion to join United States); Babcock v. Maple Leaf, Inc., 424 F.Supp. 428, 431 (E.D.Tenn.1976) (discussing motion to join the United States prompted by prospect of multiple litigation). Because the United States is bound only by the federal statute of limitations and may bring its own suit at any time prior to its running, only an express waiver by the Government will allow and encourage settlements in cases where the Government decides not to seek its share. Thus, section 2652(b) serves a vital purpose regardless of whether the Government has the superior claim. 36 Having found that the Government does not enjoy a priority, we face the question of how the fund is to be divided. Because the statute sheds no light on how to apportion the fund, we turn for guidance to the principles governing the distribution of funds in an interpleader. Cf. Cockerham v. Garvin, 768 F.2d 784, 787 (6th Cir.1985) (where government seeks recovery as beneficiary of limited fund, equitable principles apply). 37