TOPIC 31

Topic 31         Generally

[ED. NOTE: The following is provided for informational value only.]

St. Bernard Parish Police Jury and Travelers Property Casualty Corp. v. Duplessis, 831 So. 2d 955 (La. Supreme Ct. 2002).

            The Louisiana State Supreme Court held that a claimant's willful misrepresentation of mileage reimbursement subjected him to the forfeiture of his workers' compensation benefits, pursuant to LSA-R.S. 23:1208. The statute, in pertinent parts, states that it is unlawful for any person, for the purpose of obtaining or defeating any workers' compensation benefit or payment, to willfully make a false statement or representation. "Any employee violating this Section shall, upon determination by workers' compensation judge, forfeit any right to compensation benefits under this Chapter." Claimant had submitted a request for reimbursement for 4,354 miles when he was only entitled to 1,114.2 miles for doctors' visits.

            Although noting that the claimant was "not a workers' compensation neophyte," the hearing officer, found that the forfeiture of all benefits was "too harsh" and ordered the forfeiture of the requested mileage and referral of the matter to the Fraud Section. On appeal the court affirmed the ruling. Noting the intent of the state legislature, the Louisiana State Supreme Court has now overturned the prior rulings and denied all future benefits.

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Topic  31.2     Penalty For Misrepresentation--Prosecution of Claims--Claimant's Conduct

[ED. Note: The following case is included for informational value only.]

United States of America v. Somsamouth,     F.3d     (Nos. 02-50453 and 02-50461)(9th Cir. Dec. 18, 2003).

            This is an unsuccessful appeal of a husband and wife's convictions for making false representations of material facts to the Social Security Administration for the purpose of retaining Supplemental Security Income benefits. The couple challenged the convictions on the grounds that the term "work" was not defined for the jury in the jury instructions. They also argue that their statements about working were not materially false.

            The Ninth Circuit found that the "simple word" "work" needed no jury instruction definition: "We start with the obvious, almost banal proposition that the district court cannot be expected to define the common words of everyday life for the jury." "[W]ork is not an arcane concept in this context, and there was no need for the district court to define it further. If the court had defined it and done so correctly, that would not have been helpful to [the couple]." They had argued that the average person might believe that "work" does not necessarily require substantial gainful activity of the sort that generates wages or other economic benefits." The Ninth Circuit found that if the average person believed this, the average person was correct. The court noted that during the interview process, the couple was asked if they did any work, including volunteer work.

            Next the couple argued that their falsehoods about work cannot have been material because it has not been shown that their working was also substantial gainful activity. The Ninth Circuit stated that "In so arguing, they ask us to take an overly crabbed view of materiality." The court noted that it has previously addressed the meaning of the general statute covering false statements of ‘material fact' to government agencies and have defined the concept as follows-- "A statement is considered material if it has the propensity to influence agency action; actual influence on agency action is not an element of the crime."

            The Ninth Circuit explained that the issue was not whether the couple was performing substantial gainful activity; it was whether their false statements had a propensity to influence agency action. "Even if the extensive work activities in which the [couple] were engaged were not actually generating income for them, it is pellucid that truthful answers to the SSA's questions about their activities would have led to further investigation at least. [Their] lies were designed to influence the agency into not investigating them or giving further consideration to whether they were, in fact, engaging in substantial gainful activities." Importantly, the court noted that had the agency known they were doing some work, even if not "gainful," the agency would have inquired into their capabilities to do further work, rendering them not disabled.

Topic  31.2     Penalty For Misrepresentation–Prosecution of Claims–Claimant’s Conduct

A-Z International v. Phillips, 323 F.3d 1141 (9th Cir. 2003).

            Section 27(b) of the LHWCA does not authorize a federal district court to sanction a claimant for contempt for filing a false claim for benefits under the LHWCA.  The term “lawful process” is not broad enough to include the filing of a complaint that misrepresents the jurisdictional facts.  The Ninth Circuit found that in enacting the LHWCA, Congress expressly provided mechanisms other than contempt sanctions to deal with fraudulent claims before an ALJ.  “In interpreting a statute, courts must consider Congress’s words in context “with a view to their place in the overall statutory scheme.” Citing Davis v. Mich. Dep’t of Treasury, 489 U.S. 803, 809 (1989).  The Ninth Circuit went on to note, “The LHWCA has specific provisions that deal with fraud before the ALJ, such as 33 U.S.C. §§ 931(a) and 948.

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