United States v. Lorenzetti

Paul B. Lorenzetti (defendant) was a special agent for the Federal Bureau of Investigation (FBI) and employed by the United States (plaintiff). Lorenzetti was injured on the job on November 21, 1977. Federal employees injured on the job were entitled to compensation for medical expenses, lost wages, and vocational rehabilitation under the Federal Employees’ Compensation Act (FECA). Under § 8131 of FECA, if an accident for which the United States was liable also created liability in a third party, the secretary of labor required the employee to bring a claim against the third party or to assign his right to bring an action to the United States. Under § 8132, an employee who receives payments from FECA must reimburse the United States if the employee receives damages from a third party liable for the injuries. Lorenzetti received compensation from FECA for medical expenses and lost wages. Lorenzetti brought a claim in Pennsylvania state court against the other driver involved in the accident, pursuant to the Pennsylvania No-Fault Motor Vehicle Insurance Act. Under this state statute, the victim of a motor vehicle accident is only entitled to damages for noneconomic losses, such as pain and suffering. Lorenzetti recovered damages for noneconomic losses from the third party, and the United States sought reimbursement under FECA. Lorenzetti sought a declaratory judgment in the United States District Court for the Eastern District of Pennsylvania, asserting that the United States was limited to reimbursement for economic losses. The United States argued that § 8132 created a general right of reimbursement, independent of the type of loss for which the employee received payment. The district court granted summary judgment to the United States, but the Third Circuit reversed, holding that Congress had not contemplated no-fault statutes when FECA was enacted and, therefore, the reimbursement provision was not applicable. The United States appealed to the United States Supreme Court.