Court Opinion

ID: 9489118
Source: CourtListenerOpinion
Date Created: 2023-08-05 13:06:11.821574+00
Date Added: 2024-06-11T17:53:19.587209
License: Public Domain

*1312WILLIAMS, Senior District Judge,
concurring and dissenting:
I respectfully dissent. This case presents the question of whether the Secretary of Labor, when confronted with a statute which allows him to exercise broad discretion in reviewing requests to change the method of previously awarded benefit payments, may instead decree by mere regulation that he will exercise no discretion and will never undertake a review specified by Congress in a detailed statute. The Secretary, and now the majority, believes that such abdication of statutory role is “prospective discretion” and does not clearly conflict with the express language of FECA. Because I believe that the Secretary’s action violates the clear mandate of the statute, and because this type of prospective discretion can only be defined as a euphemism for abuse of discretion, I would affirm the district court. I join the majority’s opinion in sections I, II and III but dissent from sections IV and V.
Two separate analyses demonstrate that the district court should be affirmed. The first, created by the Secretary’s regulation and pressed unintentionally in his argument on appeal, characterizes the request for lump sum benefits as a new claim. The Secretary must make detailed findings of fact under 5 U.S.C. § 8124 when presented with a new claim but has not done so in this case. The second, using the rubric of the majority, characterizes the lump sum petition as merely a request for modification of benefits under § 8135. While the Secretary may deny lump sum awards even when the conditions of § 8135 are met, the clear mandate of the statute indicates that he may only do so after an actual, case-specific determination of the merits of the request. I address each argument in turn.
I.
Was the plaintiff-respondent’s lump sum request a new claim? Section 8121, entitled “Claim,” only dictates the form in which the claim shall be presented, and a claim under FECA is nowhere otherwise defined. Therefore one must extrapolate from the treatment of claims in other sections, and, because subsection 8121(1) dictates that claims must be submitted according to § 8122, it becomes necessary to review that section.
Subsection 8122(a) begins by stating that “[a]n original claim for compensation for disability or death must be filed within three years after the injury or death” (emphasis added). One must interpret statutes to avoid redundancy and superfluous language; therefore, the adjective “original” must have some meaning. See, e.g., Westfarm Associates v. Washington Suburban Sanitary Commission, 66 F.3d 669, 678 (4th Cir.1995), citing Ratzlaf v. United States, 510 U.S. 135, -, 114 S.Ct. 655, 659, 126 L.Ed.2d 615 (1994). Redundancy exists unless an original claim is not the only species of claim available. Although subsection (b) refers to claims for latent disability, such claims are still original claims, i.e., claims in the first instance. The drafters of § 8122 distinguished original claims and directed that the limitation periods of that section apply to original claims only. Non-original claims must therefore exist.
Following the logic of the statute and of the Secretary’s arguments, a petition for a lump sum payment must be an archetypal non-original claim. As counsel for the Secretary admitted at oral argument, the Secretary would be required to process a lump sum claim through § 8124, with attendant findings of fact, if the lump sum claim were made as part of the original claim. Counsel believes that such findings were not required under the former regulation, which allowed § 8135 requests, and that belief was never challenged in the courts; apparently, so long as the Secretary treated lump sums as a permissible method of paying original claims, his interpretation was respected. However, the Secretary has changed his view on lump sums. In so doing, he reinforced the argument that a lump sum is sufficiently distinct to constitute a new claim.
The Secretary’s proffered reason for his regulatory flip-flop is that lump sum awards require long term borrowing which has now become cost prohibitive. It is significant that § 8135 does not mention cost to the Department of Labor as an appropriate factor for the Secretary’s discretionary determi*1313nation; rather, it is “the best interest of the beneficiary” and not of the government for which Congress was concerned. The Secretary formerly considered the appropriateness of lump sums a mere accounting issue: more money over time versus less money in one payment, a choice which should be neutral to the Secretary after time-value calculations and the averaging effect of the Secretary as a repeat player. When the Secretary held the position that the choice was to him a mere accounting concept, basically a wash, his non-claim position deserved some respect. No longer.
The Secretary has in effect made the argument that a lump sum is not a mere allocation issue but an issue of whether to increase benefits in some fashion. He argues that a lump sum leaves the Secretary with less, and the beneficiary with more; otherwise, his purportedly increased costs would not be prohibitive. Any request for lump sums is thus a request for increase in benefits. The request is a fundamentally different animal from the first claim and becomes, by the Secretary’s own logic, a new claim. Where a request for benefits in the first instance is an original claim, then, a request for lump sum must be a non-original claim. Hanauer has therefore filed a claim and deserves a full § 8124 review; since the Secretary failed to perform one, his action should be reversed and the judgment of the district court affirmed.
II.
Does the majority’s analysis survive dear-mandate scrutiny? In the only pertinent statement of regulatory powers, FECA provides that “[t]he Secretary of Labor may prescribe rules and regulations necessary for the administration and enforcement of this subchapter.” 5 U.S.C. § 8149 (emphasis added). By its decision, the majority allows the Secretary to add two words to the highlighted Congressional language: “or repeal.”
A discussion of Hicks v. Cantrell is necessary. The statute in Hicks, the Federal Supplemental Compensation Act (“FSCA”), provided:
In the case of individuals who have received amounts of Federal supplemental compensation to which they were not entitled, the State is authorized to require such individuals to repay the amounts of such Federal supplemental compensation to the State agency, except that the State agency may waive such repayment if it determines that—
(i) the payment of such Federal compensation was without fault on the part of any such individual, and
(ii) such repayment would be contrary to equity and good conscience.
See 803 F.2d at 791. Despite noting that the judiciary “must reject administrative constructions that are contrary to clear Congressional intent,” the Court upheld the Secretary’s decision. Id. at 792-93. The majority believes that Hicks controls this case because in Hicks as here, the statute used the permissive term “may” instead of the directive language “shall.” Even the Secretary does not argue, however, that “may” unambiguously allows his action. The task of interpreting federal benefits statutes, which are always passed in the form of multiple subsections, requires a global understanding of the whole statute and not a narrow focus on a single word. With such an understanding of FECA, Hicks is instructive to but distinguishable from this case.
There are two key factors to distinguish the FSCA from FECA: the general focus of the statutes and the eras in which they were passed. The age of the statutes is a simple point but telling: whereas FSCA in Hicks was passed in 1982, a time in which vast power and great deference to federal agencies was well understood by the drafters, § 8135 of FECA became law in 1916, when agency supremacy was unanticipated. See Act of Sept. 7, 1916, Pub.L. No. 64-266, § 14, 39 Stat. 742, 746 *. The clear meaning of “may” in the 1916 statute is discretion after full review of a lump sum request, not discretion to avoid review altogether. To believe otherwise would require unrealistic prescience of the drafters.
*1314The discretionary overtones of “may” “can be defeated by indications of legislative intent to the contrary or by obvious inferences from the structure or purpose of the statute.” United States v. Rodgers, 461 U.S. 677, 706, 103 S.Ct. 2132, 2149, 76 L.Ed.2d 236 (1983). The structure and purpose of FECA distinguish this ease from Hicks. FECA is about fair, efficient compensation for federal employees’ injuries — FECA is a remedial statute, which should be interpreted broadly in favor of beneficiaries in order to give the statute full effect. The Internal Revenue Code, of which FSCA was a part, focuses instead on payments to the government; i.e., FSCA is remedial, if at all, in favor of the state. The “may” language in the cited FSCA subsection was also a clause which provided a narrow exception to what, even in that subsection, was the general rule. FECA’s § 8135, in contrast, is a free-standing subsection which deals only with lump sums. And finally, the discretionary overtone of “may” is not reinforced by the use of “shall” in various other places in FECA, including § 8135 itself. To switch “may” for “shall” in § 8135 would remove all discretion from the decision but do so in favor of the claimant, which Congress just as clearly did not mean to do. As § 8135 is currently structured, “may” merely means that the Secretary need not apply the section’s factors robotically. “May” does not, as the Secretary believes, entitle him to robotically use no discretion at all — if Hicks stands for that proposition, the case is in error and should be overturned.
In the end, a elear-mandate analysis comes down to the impact of the statute, in subsection or entirely, on the judge. The statute clearly mandates an individualized review. Although the language alone sustains that view, the language is doubly strong when considered in light of agency power in 1916. Because the Secretary violated the clear mandate of the statute, the district court should be affirmed.
III.
Some general observations about the case are in order. First, this Court has already proven that Hicks is not an impenetrable rule. See Malcomb v. Island Creek Coal Co., 15 F.3d at 369 (no deference to agency interpretation reversing, without explanation, a definition used for 60 years). While the Secretary’s about face on lump sum regulations is not as egregious as the agency flip-flops of Malcomb, the fact that he has changed his interpretation surely adds to the argument against Hicks applicability here. Second, fundamental fairness suggests that where Congress has created a mechanism for benefits and a claimant meets the test, he should at least be entitled to some form of review. If the Secretary merely increased stinginess toward lump sums tenfold, he might be within his discretion; however, the Secretary has gone beyond stinginess to arbitrariness. If the one-in-a-million, perfect candidate for lump sum payments were suddenly to appear, the Secretary would never know the injustice of applying his policy to that ideal claimant — even perfect evidence would never be reviewed. And third, it is remarkable that a mere regulation could in effect repeal an eighty year old statute. Conservative judicial principles would never elevate a regulation above a Congressional act, even were the regulation not questioned by the litigants. See Thomasson v. Perry, 80 F.3d 915, 934 (4th Cir.1996) (Luttig, J., concurring) (validity of regulation is before the Court even when not raised by the parties).
Section 8149 permits the Secretary to regulate only to enforce and administer FECA, and enforcement of § 8135 by its regulatory repeal is a nonsensical result. The “prospective discretion” of 20 CFR 10.311 is no discretion, and abuse of discretion could have no clearer name. Regulatory repeal of § 8135 is a violation not only of § 8135 but of § 8149 as well. Whether considered from sound equitable principles or the coldest parsing of the statute, the Secretary’s action is simply wrong.
As phrased by Hanauer’s counsel at oral argument, this appeal may well be “tilting at windmills” in a certain sense. It is undisputed that were this court to remand the case for an individual review, and after doing so the Secretary still denied lump sum benefits to the claimant, the Court would have no jurisdiction under § 8128 to review his indi*1315vidual case. But that fact only raises a larger point. Were a bevy of Hanauers to return to district court with proof that the Secretary was performing pro forma individual review under § 8135, but actually meant to and did deny all requests, the Court’s jurisdiction would reattach. The Secretary cannot do sotto voce by perfunctory denials what this dissent would deny him the power to do outright by regulatory fiat. If individual review is meaningless, as Congress’s § 8135 has now been made meaningless, the clear mandate of FECA is violated.
I therefore dissent and would affirm the district court.

 While the statute has been updated to modem form with subsection numbers and increased dollar amounts, the key language and phrasing is unchanged.