Durand v. U.S. Department of Labor

A FECA beneficiary must deduct litigation costs from the gross recovery of a judgment received under 5 U.S.C. § 8132.

Steve Durand was an employee of the Federal Aviation Administration when injured on the job as a result of third-party negligence. Durand filed a claim and received over $400,000 in benefits under the Federal Employee Compensation Act ("FECA"). The Secretary of Labor ordered Durand to prosecute a civil suit against the third-party tortfeasor as permitted under the FECA. Durand filed suit and was awarded a judgment of 2.3 million dollars. Under FECA Durand was authorized to deduct the costs incurred by the lawsuit from the gross recovery. Durand appeals the Department of Labor's requirement that he deduct the costs of litigation from the gross recovery and argues that the litigation costs should be deducted from the amount owed to the United States. Durand argues that if the Secretary of Labor had chosen to prosecute the civil case herself, which was an option she had under FECA, then Durand would never have incurred any costs associated with the suit. The Ninth Circuit held that a plain reading of 5 U.S.C. § 8132 results in the costs of the lawsuit being deducted from the gross recovery and not the refund to the United States. The Ninth Circuit noted that this was a fair statutory scheme since no employee is required to file a FECA claim and may prosecute their action independently and receive their entire award, however Durand chose to file a FECA claim and therefore is bound by its requirements. AFFIRMED.