United States District Court of the Eastern District of Michigan; Docket No. 77-72519; Published
Judge James P. Churchill; Written Opinion
Official Federal Reporter Citation: 479 F Supp 200; Link to Opinion 
STATUTORY INDEXING:
Standards for Deductibility of State and Federal Governmental Benefits [§3109(1)]
Federal Workers Compensation Benefits [§3109(1)]
TOPICAL INDEXING:
Federal Workers Compensation Benefits
CASE SUMMARY:
In a lengthy written Opinion, Judge James Churchill held that under the reimbursement provisions of the Federal Workers' Compensation Act (FECA, 5 USC §8132) a federal employee who obtains a tort recovery for noneconomic losses under Michigan's No-Fault Act can be validly and constitutionally required to pay back the federal government for economic losses which were compensated by federal compensation benefits. Judge Churchill reasoned that §8132 of the Federal Comp Act contains no language which delineates two classes of damages - one which gives rise to a duty to reimburse and one which does not. On the contrary, by its terms, the duty to reimburse the federal government encompasses all damages recovered from third parties. Judge Churchill noted that FECA, like other workers' compensation statues, involves a "tradeoff" between the respective rights of the employee and employer. The employee gains the right to prompt payment of benefits without the burden of establishing the employer's fault or meeting common law defenses. However, the recovery of the employee from his employer is limited to the terms of the compensation statute, even if this prevents the employee in a particular case from receiving benefits for each element of recovery specially allowable otherwise. Such a trade-off is constitutional. Furthermore, by requiring a payback in all tort recovery situations, the administration of the statute is made easier.
Finally, Judge Churchill rejected arguments that the payback provisions of §8132 violated equal protection requirements. The Judge noted that the federal statute does not make any classification whatsoever between tortfeasors or tort recoveries. Those classifications are the products of various state laws. To ameliorate the harshness of some of these laws, Judge Churchill intimated that provisions which permit no-fault benefits to be reduced by, governmental benefits "provided or required to be provided" [such as the setoff provisions of §3109(1) of the Michigan Act], should be limited to only those benefits which are paid and not subjected to mandatory reimbursement provisions like §8132 of FECA.
[Author's Comment: It is our understanding that the Ostrowski case is presently on appeal.]
