UNITED STATES OF AMERICA, PETITIONER V. PAUL B. LORENZETTI No. 83-838 In the Supreme Court of the United States October Term, 1983 The Solicitor General, on behalf of the United States of America, petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the Third Circuit in this case. Petition for a Writ of Certiorari to the United States Court of Appeals for the Third Circuit TABLE OF CONTENTS Opinions below Jurisdiction Constitutional, statutory and regulatory provisions involved Statement Reasons for granting the petition Conclusion Appendix A Appendix B Appendix C Appendix D Appendix E OPINIONS BELOW The opinion of the court of appeals (App. A, infra, 1a-11a) is reported at 710 F.2d 982. The opinion of the district court (App. C, infra, 13a-18a) is reported at 550 F. Supp. 997. JURISDICTION The judgment of the court of appeals (App. B, infra, 12a) was entered on June 22, 1983. On September 13, 1983, Justice Brennan extended the time within which to file a petition for a writ of certiorari to and including November 19, 1983. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). CONSTITUTIONAL, STATUTORY AND REGULATORY PROVISIONS INVOLVED The relevant constitutional, statutory and regulatory provisions are reproduced in App. E, infra, 20a-25a. QUESTION PRESENTED Whether a federal employee who has received Federal Employees' Compensation Act benefits for injuries suffered in the course of his employment is obligated by 5 U.S.C. 8132 to reimburse the United States out of damages recovered from a negligent third party when a state no-fault automobile insurance statute allows such tort recovery for pain and suffering but not for medical expenses and lost wages. STATEMENT 1. a. The Federal Employees' Compensation Act (FECA, or the Act), 5 U.S.C. 8101 et seq., establishes a comprehensive program of benefits for government employees injured in work-related accidents. If an employee is injured "while in the performance of his duty" (5 U.S.C. 8102(a)), he is entitled to compensation for expenses of medical and related services (5 U.S.C. 8103, 8111) and vocational rehabilitation (5 U.S.C. 8104) and for a percentage of his lost wages (5 U.S.C. 8105-8107, 8110). Benefits may be paid to an employee's survivors in the case of death (5 U.S.C. 8133, 8134). The FECA was designed to give injured federal employees a speedy and certain recovery for work-related injuries, regardless of fault or contributory negligence and without the need for litigation or expense. See Lockheed Aircraft Corp. V. United States, No. 81-1181 (Feb. 23, 1983), slip op. 4; Johansen V. United States, 343 U.S. 427, 439-441 (1952); Dahn V. Davis, 258 U.S. 421, 431 (1922). The FECA provides that the government is entitled to receive reimbursement for benefits paid in connection with an injury if an employee succeeds in recovering from a third-party tortfeasor. When an employee receives FECA benefits for an injury "creating a legal liability in a person other than the United States to pay damages," the Secretary of Labor may require the employee to bring a third-party action or assign the cause of action to the United States (5 U.S.C. 8131(a)). If the action is assigned to the United States, the Secretary may prosecute or compromise the action, and any recovery must first satisfy the FECA compensation fund for the amount of benefits already paid to the employee. However, the Act provides that the employee must receive at least one-fifth of the net amount of the settlement or recovery (after deduction of the costs of settlement or recovery). 5 U.S.C. 8131(c). If the employee refuses to assign or prosecute his cause of action, he is not entitled to receive FECA compensation (5 U.S.C. 8131(b)). If the employee himself receives "money or other property" in satisfaction of the legal liability of a third party to pay damages, he may deduct the cost of recovery, including a reasonable attorney's fee, and may retain one-fifth of the net amount. Following those deductions, the employee must reimburse the FECA compensation fund for any FECA benefits already paid to him and must credit the surplus to future compensation payments for the same injury. 5 U.S.C. 8132. The Act provides that "(n)o court, insurer, attorney, or other person shall pay or distribute to the beneficiary or his designee the proceeds of such suit or settlement without first satisfying or assuring satisfaction of the interest of the United States" (ibid.). Pursuant to 5 U.S.C. 8149, the delegation of rulemaking authority to the Secretary of Labor, the Secretary has promulgated 20 C.F.R. 10.503, which sets out procedures for reimbursement of the FECA compensation fund from third-party recoveries. b. The Pennsylvania No-Fault Motor Vehicle Insurance Act (No-Fault Act), Pa. Stat. Ann. tit. 40, Sections 1009.101 et seq. (Purdon Cum. Supp. 1983), became effective in 1975. The primary purpose of the No-Fault Act is to provide, at reasonable cost, prompt and adequate basic loss benefits to victims of motor vehicle accidents and their survivors. See id. Section 1009.102(b). To accomplish this goal, the No-Fault Act provides for the payment of benefits for basic economic losses on a first-party basis, i.e., an accident victim's own insurance company pays for basic losses (including an unlimited amount of medical expenses and lost wages up to $15,000), regardless of fault (id. Sections 1009.104, 1009.106, 1009.202). The No-Fault Act defines "basic loss benefits" that must be paid by the no-fault insurer as "net loss sustained by a victim, subject to any applicable limitation (or) exclusions * * *" (id. Section 1009.103). In computing "net loss" a no-fault insurer may deduct any government benefits, including workers' compensation, that the victim receives or is entitled to receive because of his injury, "unless the law authorizing or providing for such benefits or advantages makes them excess or secondary to the benefits in accordance with this act * * *" (id. Section 1009.206(a)). Thus, a no-fault insurer in Pennsylvania is not required to pay benefits for losses that also are covered by a program such as the FECA. The No-Fault Act partially abolishes tort liability for injuries in Pennsylvania that arise out of the use and maintenance of a motor vehicle. A victim may not obtain a tort recovery for economic losses (e.g., medical expenses and lost wages), except to the extent they are not compensated because they exceed statutory no-fault coverage limits. Pa. Stat. Ann. tit. 40, Section 1009.301(a)(4) (Purdon Cum. Supp. 1983). Thus, a tortfeasor is not liable for medical expenses or the first $15,000 in lost wages, since the No-Fault Act requires the no-fault insurer to pay all such expenses; however, a tortfeasor would be liable for any lost wages over and above the $15,000 statutory ceiling on no-fault coverage for that category of loss. A tortfeasor remains liable for damages for noneconomic losses (e.g., pain and suffering) if an accident results in death or serious and permanent injury, if the reasonable value of necessary medical and dental services exceeds $750, or if the victim is disabled for more than 60 days or suffers serious and permanent disfigurement (id. Section 1009.301(a)(5)). 2. Respondent is a special agent for the Federal Bureau of Investigation. He was injured in Pennsylvania in November 1977 when the automobile he was driving was struck by another vehicle. At the time of the accident, respondent was performing duties in the scope of his employment. Accordingly, he received FECA benefits covering his medical expenses and a percentage of his lost wages. App. A, infra, 2a. In 1979 respondent filed a tort action in the Court of Common Pleas of Philadelphia County against the driver of the vehicle that had struck his automobile. Based on the FECA benefits it had paid, the federal government asserted a subrogation lien against any recovery by respondent. The driver of the other vehicle moved to exclude proof of medical expenses and lost wages, on the ground that, under the terms of the No-Fault Act, damages for such losses may not be recovered from a tortfeasor. The Court of Common Pleas agreed that respondent should not be permitted to prove such amounts, including $1,600.24 paid by the United States in the form of FECA benefits. Respondent ultimately settled the tort action for $8,500. The settlement figure represented compensation only for noneconomic losses, i.e., pain and suffering. App. A, infra, 6a; App. C, infra, 14a. Pursuant to 5 U.S.C. 8132, the United States asserted its right to be reimbursed from respondent's settlement in the amount of the FECA benefits he had received. /1/ Respondent then filed this declaratory judgment action in the United States District Court for the Eastern District of Pennsylvania to prevent the government from recovering the amount of the FECA benefits. Respondent contended that because the No-Fault Act precluded him from recovering damages for medical expenses and lost wages from the tortfeasor, the government should not be permitted to obtain reimbursement for the benefits it had paid to compensate for such losses. 3. The district court granted summary judgment for the United States. The court held that the government was entitled to seek reimbursement from respondent's third-party tort recovery, even though that recovery represented compensation only for his noneconomic losses, not for his medical expenses and lost wages. App. C, infra, 13a-18a. In concluding that all third-party recoveries give rise to a duty to reimburse the government, the district court relied in large part on the decision in Ostrowski V. Dep't of Labor, OWCP, 653 F.2d 229 (6th Cir. 1981), which involved the identical issue in the context of the Michigan no-fault statute. The Sixth Circuit held in Ostrowski that the FECA unambiguously subjects all damages recovered from third parties to the obligation to reimburse the FECA compensation fund. 4. The court of appeals reversed (App. A, infra, 1a-11a), expressly rejecting the Sixth Circuit's decision in Ostrowski (App. A, infra, 5a). The court of appeals recognized that one of the primary purposes of the FECA reimbursement provision was to reduce the costs of the compensation program (ibid.). It concluded, however, that requiring reimbursement in cases in which an employee could not recover tort damages for medical expenses and lost wages would be "manifestly unfair" to federal employees who are subject to state no-fault statutes (id. at 7a). The court also concluded that reimbursement in such circumstances would not serve to prevent double recovery or to foster ease of administration and would be inconsistent with Congress's perceived intent to make the federal government a "model employer" (id. at 8a). REASONS FOR GRANTING THE PETITION This case presents an important and recurring question concerning interpretation and administration of the Federal Employees' Compensation Act in states that have no-fault automobile insurance schemes. The court of appeals has held that a state no-fault statute eliminating tort liability for medical expenses and lost wages abrogates the obligation of a federal employee who obtains a third-party tort recovery to reimburse the federal government for FECA benefits he has received. The effect of that holding is to read the reimbursement provision, 5 U.S.C. 8132, out of the Act in an entire class of cases. The court of appeals' decision is contrary to both the plain language of the FECA and the consistent interpretation of the Secretary of Labor. Unless reversed, the decision below will impose a substantial unwarranted drain on the FECA compensation fund and will generate administrative difficulties and considerable litigation for the Secretary. Moreover, the court of appeals' interpretation of the FECA conflicts with a decision of the Sixth Circuit. Review by this Court is plainly warranted. 1. The decision of the court of appeals conflicts with the Sixth Circuit's decision in Ostrowski V. Dep't of Labor, OWCP, 653 F.2d 229 (1981). In Ostrowski the Sixth Circuit held that the FECA requires that a federal employee reimburse the United States from his third-party tort recovery, despite the fact that (because of the limitation of tort liability imposed by the Michigan no-fault statute) the tort recovery did not include damages for economic losses covered by the FECA benefits he had received. /2/ The district court opinion in Owstroski, on which the Sixth Circuit relied in large part, explained that a construction of 5 U.S.C. 8132 that would immunize the third-party recovery from the duty to reimburse "contradicts the plain language of the statute, the plain language of the regulations adopted to administer and enforce the statute, analogous case law, and the congressional purpose in enacting Section 8132, which was to reduce the cost of providing benefits under the Act by maximizing the amount of reimbursements while minimizing the costs of administering FECA." Ostrowski V. Roman Catholic Archdiocese, 479 F. Supp. 200, 203 (E.D. Mich. 1979). The Sixth Circuit noted in addition that the Secretary's regulation providing that the employee may retain a minimum of one-fifth of his net tort recovery, 20 C.F.R. 10.503, was designed to prevent injustice to federal employees in cases in which FECA reimbursement otherwise would wipe out the tort recovery. 653 F.2d at 230-231. The court of appeals in this case recognized the relevance of Ostrowski, but squarely rejected its holding (App. A, infra, 5a). This conflict creates serious practical problems for the Secretary of Labor, who is charged with administration of the FECA. The conflict makes it impossible to administer uniformly the reimbursement provisions of the Act. Federal employees within the Sixth Circuit must reimburse the FECA compensation fund from their third-party tort recoveries, regardless of the operation of any no-fault statute, while federal employees within the Third Circuit may reduce or eliminate their duty to reimburse the fund by pleading the effect of a no-fault statute. Even apart from the conflict among the circuits, the decision below is certain to produce confusion in the administration of the FECA program and to precipitate further litigation. Sixteen states currently have some form of full-fledged no-fault recovery scheme for automobile accidents. /3/ Each no-fault state has its own peculiar no-fault scheme; moreover, it is not unusual for states to amend their no-fault laws, and additional states may enact no-fault statutes in the future. /4/ The Secretary would be required to study the statutory scheme and developing case law in each no-fault state in order to determine how they affect the federal government's right to reimbursement under the FECA in that state. For example, within the Third Circuit, New Jersey, like Pennsylvania, is a no-fault state. But the no-fault statutes of the two states differ in various respects, and it is unclear whether the court of appeals would conclude that the FECA should be construed to bar reimbursement of the United States in the case of automobile accidents in New Jersey. /5/ As a result, the government might be obliged to litigate the issue not simply on a circuit-by-circuit basis, but on a state-by-state basis within each circuit. /6/ This result is intolerable as applied to a nationwide federal program affecting almost three million persons. The court of appeals' decision will have a substantial impact on the federal Treasury. The Department of Labor informs us that there are now 48 pending third-party claims involving automobile accidents in Pennsylvania, with over $405,000 at stake. In addition, the Department is aware of 650 potential third-party claims involving automobile accidents in Pennsylvania, with more than $6 million at stake. The court of appeals' decision will preclude the government from recovering much of these amounts. /7/ The potential for lost reimbursement within the Third Circuit could be even higher, depending on how the court of appeals applies its decision in the context of the New Jersey and Delaware no-fault statutes. The fiscal effect also would increase if the holding of the court of appeals were adopted in other circuits. 2. The practical difficulties that would result from the court of appeals' decision need not be suffered, because that decision is incorrect. a. The starting point in construing a statute is the language of the statute itself. Consumer Product Safety Commission V. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980). The reimbursement provision of the FECA, 5 U.S.C. 8132, states in pertinent part: If an injury or death for which compensation is payable under this subchapter is caused under circumstances creating a legal liability in a person other than the United States to pay damages, and a beneficiary * * * receives money or other property in satisfaction of that liability * * * the beneficiary * * * shall refund to the United States the amount of compensation paid * * *. The Act unequivocally provides that when a FECA beneficiary has suffered an injury for which a third party is legally liable to pay damages, and the beneficiary recovers "money or other property" in satisfaction of that liability, the beneficiary must (after making certain deductions) apply that recovery to reimburse the compensation fund for the amount of FECA benefits received. Section 8132 does not indicate that the employee's duty to reimburse depends on whether the third-party recovery includes damages for medical expenses and lost wages. As the Sixth Circuit noted in Ostrowski, "(t)here is no language in Section 8132 delineating two classes of damages-- one of which gives rise to a duty to reimburse and one of which does not. On the contrary, by its terms the duty to reimburse encompasses all damages recovered from third parties." 653 F.2d at 230, quoting 479 F. Supp. at 208. /8/ The legislative history of the FECA also does not suggest that Congress intended to require employees to reimburse the compensation fund only from amounts representing damages for medical expenses and lost wages. The predecessor of 5 U.S.C. 8132 was enacted in 1916, long before the advent of state no-fault statutes. But even then Congress recognized that the right of reimbursement would exist in the case of third-party recoveries with noneconomic components, such as punitive damages and "damages brought about by reason of mental pain and suffering." 53 Cong. Rec. 10909-10910 (1916) (remarks of Rep. Barkley). Congress surely was aware that there would be cases in which the government would not receive the full amount of benefits paid unless its right of reimbursement extended to the non-economic components of damages, perhaps because an employee would be unsuccessful in persuading a jury of the full measure of his economic losses, because his recovery was reduced based on the doctrine of comparative negligence, or because he settled for less than the full amount of his claim. Reimbursement of the United States from an employee's third-party recovery, whether or not it includes damages for economic losses, is consistent with the purposes underlying 5 U.S.C. 8132. The court of appeals itself recognized (App. A, infra, 5a) that a major purpose of the reimbursement provision is to keep the compensation fund solvent and to minimize the overall cost of the FECA program. /9/ That purpose clearly is served by requiring reimbursement from any element of an employee's damages award. The reimbursement provision also facilitates administration of the FECA program. As the district court in Ostrowski explained (479 F. Supp. at 205), "by having only one standard for establishing the obligation to reimburse, Congress has eased the burden of administering FECA by avoiding the difficulties of distinguishing between the numerous statutory and common law causes of action found in the various states." Application of a uniform federal reimbursement requirement is certainly less burdensome than interpretation of the FECA reimbursement provision to accommodate each variation of no-fault law on a state-by-state basis. See pages 8-10, supra. The court of appeals found it significant that a third purpose of the reimbursement provision-- prevention of double recovery by FECA beneficiaries-- would not mandate reimbursement in the circumstances of this case (App. A, infra, 7a-8a). But the court recognized that Congress allowed the government to calculate reimbursement in light of an employee's total recovery in order to avoid confusion about the portion of an award or settlement figure that would be allocated to medical expenses and lost wages, as opposed to pain and suffering, and that courts had permitted reimbursement from all parts of an employee's damages award prior to the advent of no-fault statutes. See id. at 6a. /10/ Thus, the court of appeals implicitly acknowledged that the government's right to reimbursement is not necessarily dependent on the need to avoid double recovery in a given situation. The Secretary of Labor has long construed 5 U.S.C. 8132 to require reimbursement of the FECA compensation fund from any third-party recovery, regardless of the elements of damages that make up the recovery. The Secretary's regulation, 20 C.F.R. 10.503, promulgated to implement the reimbursement provision, provides that all damages a beneficiary recovers on account of an injury are available for reimbursement of the fund. That construction by the official responsible for administration of the FECA is entitled to considerable deference. See Morrison-Knudsen Construction Co. V. Director, OWCP, No. 81-1891 (May 24, 1983), slip op. 10; Miller V. Youakim, 440 U.S. 125, 144 & n.25 (1979); Udall V. Tallman, 380 U.S. 1, 16 (1965). b. The reasoning of the court of appeals in support of its construction of 5 U.S.C. 8132 cannot withstand scrutiny. The court in effect concluded that the reimbursement provision must be read out of the FECA in cases like this one in order to accommodate the operation of the Pennsylvania no-fault scheme. The court of appeals explained that it rejected the Secretary's interpretation of 5 U.S.C. 8132 "(i)n light of the recent growth of no-fault laws throughout the country and in view of the inherent hardship that will evolve upon those federal employees who, per chance, are subject to no-fault statutes" (App. A, infra, 7a). The court of appeals' "reinterpretation" of the FECA is at odds with this Court's admonition that comprehensive federal statutory compensation schemes are "not to be judicially expanded because of 'recent trends.'" Morrison-Knudsen Construction Co. V. Director, OWCP, slip op. 11, quoting Potomac Electric Power Co. V. Director, OWCP, 449 U.S. 268, 279 (1980). In Morrison-Knudsen, the Court rejected the contention that employer contributions to union trust funds should be considered "wages" for purposes of computing compensation benefits under Section 2(13) of the Longshoremen's and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. 902(13). Although the Court recognized that such fringe benefits have come to constitute a significant percentage of compensation costs, it nevertheless held that alteration of the reasonable expectations of employers and their insurers is "a task for Congress." Morrison-Knudsen, slip op. 12, citing J.W. Bateson Co. V. United States ex rel. Board of Trustees, 434 U.S. 586, 593 (1978). The Court noted that the LHWCA "was designed to strike a balance between the concerns of the longshoremen and harborworkers on the one hand, and their employers on the other" and that reinterpretation of the term "wages" would significantly "alter the balance achieved by Congress." Morrison-Knudsen, slip op. 11. Likewise, the reimbursement provision plays a significant role in the balance Congress created under the FECA, and any "reinterpretation" of that provision to accommodate recent no-fault trends is the responsibility of Congress. There is no support for the court of appeals' conclusion (App. A, infra, 8a) that Congress intended the result the court reached. The court of appeals cited a passage from the legislative history of the 1974 amendments to the FECA, in which the Senate committee indicated that enactment of those amendments would help the government achieve the position of "a model employer." S. Rep. 93-1081, 93d Cong., 2d Sess. 2(1974), cited in App. A, infra, 8a. /11/ But that rhetorical statement hardly suffices to support the conclusion that a court (as opposed to Congress) should revise the FECA to remedy what it perceives as an unfair result of the operation of the federal statute in the context of a state no-fault scheme. Congress itself did not choose in 1974 to eliminate the reimbursement provision in connection with automobile accidents in no-fault states, despite the fact that a number of no-fault statutes had been enacted by that time. /12/ Rather, Congress chose a more general approach to the problem of potential unfairness that employees might experience as a result of reimbursement. In order to mitigate any such unfairness, Congress amended 5 U.S.C. 8132 to provide that a FECA beneficiary is entitled to retain at least one-fifth of any net tort recovery (following deduction for costs and attorney's fees). /13/ That amendment presumably was meant to remedy all sorts of unfairness, including any that might result from the operation of state no-fault laws; it seems quite inappropriate for the court of appeals to have invoked the legislative history of that amendment as support for creation of a different remedy. It should be noted that, to the extent there is any unfairness to federal employees in cases like this one, it results not from the FECA reimbursement provision, which predates by more than half a century all state no-fault schemes, but from the operation of the state laws themselves. As the district court in Ostrowski stated (479 F.Supp. at 206): Any discrepancy between the net recovery of an employee whose injury is covered by a no-fault statute and an employee whose injury is covered by common law or statute using only traditional tort concepts results not from a classification made by the Congress in FECA, but rather from the decisions of the individual states regarding the proper means of compensating personal injuries. Of course, states are free to change the relationships among various parties subject to state control, but they clearly cannot directly alter the rights of the federal government under a federal statute without running afoul of the Supremacy Clause of the Constitution, Art. VI, Cl. 2. It is likewise inappropriate for the courts to justify reading a provision out of a federal statute on the ground that a subsequently-enacted state statute does not mesh perfectly with the federal statutory scheme, as the court of appeals did here. /14/ Any alteration of the FECA reimbursement provision to accommodate the effects of state no-fault schemes is a task for Congress alone. CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted. REX E. LEE Solicitor General J. PAUL MCGRATH Assistant Attorney General KENNETH S. GELLER Deputy Solicitor General CAROLYN F. CORWIN Assistant to the Solicitor General WILLIAM KANTER FREDDI LIPSTEIN Attorneys NOVEMBER 1983 /1/ The district court stated that the government actually claimed only $1,044.38, following deduction of an attorney's fee from total benefits of $1,600.24, pursuant to 5 U.S.C. 8132 (App. C, infra, 13a n.1). In fact, the figure of $1,600.24 already reflects the deduction of an attorney's fee. /2/ The Michigan statute resembles the Pennsylvania statute in the key respect pertinent to this case; it eliminates tort liability for all medical expenses and for some lost wages (up to a ceiling amount) arising from use or maintenance of a motor vehicle within the state. Mich. Stat. Ann. Section 24.13135 (Callaghan 1982) (Mich. Comp. Laws Section 500.3135). /3/ Our review of state statutes indicates that the following jurisdictions have mandatory no-fault automobile insurance schemes under which tort liability is limited in certain respects: Colorado, Connecticut, the District of Columbia, Florida, Georgia, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah. /4/ We are advised that the Governor of New Jersey recently signed several bills significantly amending that state's no-fault statute. The District of Columbia no-fault statute went into effect earlier this year. D.C. Code Ann. Sections 35-2101 et seq. (Cum. Supp. 1983). /5/ The New Jersey statute does not provide expressly for broad abolition of tort liability, as does the Pennsylvania statute. However, it includes a provision that evidence of amounts collectible or paid under no-fault coverage is inadmissible in a civil action for recovery of damages for bodily injury by an injured person. N.J. Stat. Ann. Section 39:6A-12 (West 1976). The New Jersey Supreme Court has held that this provision prevents the injured person from recovering from a tortfeasor for amounts collectible or paid under the no-fault program and that the no-fault insurer may not be subrogated with respect to those amounts. Aetna Insurance Co. V. Gilchrist Brothers, Inc., 85 N.J. 550, 428 A.2d 1254 (1981). It is unclear whether the New Jersey courts would reach a similar conclusion in a case in which an employee had received workers' compensation benefits. Cf. Sanner V. Government Employees Insurance Co., 150 N.J. Super. 488, 491, 494-495, 376 A.2d 180 (App. Div. 1977) (per curiam), aff'd, 75 N.J. 460, 383 A.2d 429 (1978) (per curiam) (dictum suggesting that the federal government could pursue a subrogation right against the tortfeasor to recoup benefits paid to military personnel under the Medical Care Recovery Act). Recent amendments to the New Jersey no-fault statute further complicate the task of determining how the court of appeals would apply the decision below in the case of an automobile accident in New Jersey. It is unclear whether the court of appeals' decision would affect the interpretation of the FECA in connection with an automobile accident in Delaware. Although Delaware has what is sometimes referred to as a no-fault statute, Del. Code Ann. tit. 21, Section 2118 (Cum. Supp. 1982), it is generally viewed as having retained the traditional tort system of recovery. See Burke V. Elliott, 606 F.2d 375, 377 (3d Cir. 1979). But see Del. Code Ann. tit. 21, Section 2118(g) (Cum. Supp. 1982) (any person eligible for no-fault benefits may not plead in an action for damages against a tortfeasor those damages for which benefits are available, whether or not such benefits are actually recoverable). /6/ Michigan and Kentucky are within the Sixth Circuit and thus presumably would be governed by the Ostrowski decision. Other states might be unaffected by the rationale of the court of appeals' decision in this case because of the manner in which the state courts have construed their no-fault statute. However, we believe further litigation would be necessary in most no-fault states before this could be determined with any certainty. Other states that have partial no-fault systems, such as Delaware, might be affected by the court of appeals' decision, depending on the features included in the statute in question. See note 5, supra. /7/ The government might be able to obtain reimbursement for some portion of FECA compensation it has paid in connection with Pennsylvania automobile accidents, but only to the extent of lost wages in amounts over $15,000, the required no-fault coverage level under the Pennsylvania No-Fault Act (and thus the point above which tort liability is preserved). Since the No-Fault Act provides for unlimited coverage of medical expenses, the government would be unable to recover any amount of FECA compensation it has paid for such expenses. /8/ The court of appeals here failed to note that the language of 5 U.S.C. 8132 differs from that of the reimbursement provision of the Medical Care Recovery Act, 42 U.S.C. 2651(a), construed by that court in Heusle V. National Mutual Insurance Co., 628 F.2d 833 (1980). Section 2651(a) refers to reimbursement from a third-party tort recovery of "damages therefor," a term the court in Heusle thought referred back to expenses for medical care, mentioned earlier in Section 2651(a). 628 F.2d at 837. We believe that the court in Heusle misconstrued Section 2651(a), but that in any event Heusle is distinguishable from this case because of the difference in wording of the FECA provision. /9/ See also Dahn V. Davis, 258 U.S. 421, 430 (1922); Galimi V. Jetco, Inc., 514 F.2d 949, 953 & n.4 (2d Cir. 1975); Ostrowski V. Dep't of Labor, OWCP, 653 F.2d at 231. /10/ Prior to the no-fault cases, the only federal court that had addressed an argument that reimbursement under the FECA does not extend to portions of a recovery that represent non-economic losses had rejected the argument. In United States V. Hayes, 254 F. Supp. 849 (W.D. Ky. 1966), cited by the court of appeals (App. A, infra, 6a), the employee contended that his settlement with a third-party tortfeasor represented only damages for pain and suffering. The court stated that the language of the provision (then 5 U.S.C. 777) "is clear and unambiguous, and makes no provision for the segregation or division of damages." 254 F. Supp. at 851. The courts have reached the same result in interpreting the reimbursement provision of the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. (& Supp. V) 933. See, e.g., Haynes V. Rederi A/S Aladdin, 362 F.2d 345, 350 (5th Cir. 1966), cert. denied, 385 U.S. 1020 (1967); Ballwanz V. Jarka Corp. 382 F.2d 433, 436-437 (4th Cir. 1967); Chouest V. A&P Boat Rentals, Inc., 321 F. Supp. 1290, 1292-1293 (E.D. La. 1971), rev'd on other grounds, 472 F.2d 1026 (5th Cir.), cert. denied, 412 U.S. 949 (1973). Under state workers' compensation statutes, the prevailing rule (in the absence of any express provision to the contrary) permits workers' compensation carriers to seek reimbursement from the entire judgment recovered by an employee, whether or not part of the judgment represents damages for pain and suffering. See 2A A. Larson, Workmen's Compensation Law Section 74.35, at 14-474 to 14-479 (1982), and cases cited therein. /11/ The court of appeals appears to have erred in citing the Senate report. The court referred to "S. Rep. No. 1124, 93rd Cong., 1st Sess., reprinted in (1974) U.S. Code Cong. & Ad. News 5341." App. A, infra, 8a. However, it is S. Rep. 93-1081 that is reproduced at page 5341 of 1974 U.S. Code Cong. & Ad. News. /12/ By 1974, no-fault statutes had been enacted in Colorado, Connecticut, Florida, Hawaii, Massachusetts, Michigan, New Jersey, New York, and Utah. /13/ The question of respondent's retention of one-fifth of the net tort recovery does not even arise in this case, since the federal government is seeking reimbursement of only a small percentage of respondent's settlement. /14/ In the absence of congressional action, any accommodation must be made through interpretation or alteration of state law. See, e.g., Perez V. Campbell, 402 U.S. 637, 649-650 (1971); Sperry V. Florida, 373 U.S. 379, 384 (1963). Here, the Pennsylvania no-fault statute might reasonably be construed by the state courts not to require deduction of benefits paid under FECA (or other programs with mandatory repayment provisions over which the state has no control) from the no-fault insurers' obligation, to the extent the federal statute requires reimbursement from third-party recoveries for noneconomic losses. See Ostrowski V. Roman Catholic Archdiocese, 479 F. Supp. at 206. Appendix Omitted