Durand v. United States Department of Labor
662 F.3d 1106
9th Cir.2011Background
- FECA provides disability benefits to federal employees injured on the job; if a third party is liable, the Secretary may require suit and, upon recovery, the beneficiary must refund FECA benefits received; §8132 allows deduction of costs of suit and a reasonable attorney's fee from the recovery, with a 20% minimum retention and a separate attorney's fee proportionate to the refund; Durand settled with Era Aviation for $2.3 million, triggering a U.S. refund obligation of $881,237.39 after deductions; Durand's litigation costs and a 33.3% attorney fee were negotiated, reducing the refund payable to the United States by a portion of the fee; the dispute centers on whether Durand may also deduct litigation costs from the refund itself rather than only from the gross recovery.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §8132 allows deducting litigation costs from the refund amount. | Durand argues costs are deductible from the refund. | Secretary argues costs are deductible only from gross recovery, not the refund. | Costs not deductible from the refund; deduct only from gross recovery. |
Key Cases Cited
- Gross v. FBL Fin. Servs., Inc., 557 U.S. 167 (2009) (statutory interpretation principle; ordinary meaning controls)
- Arizona State Bd. for Charter Schools v. U.S. Dep't of Educ., 464 F.3d 1003 (9th Cir. 2006) (statutory interpretation framework on text and purpose)