## Facts

- Paul B. Lorenzetti, an FBI agent, was injured in an automobile accident while acting within the scope of his federal employment.
- The United States paid Lorenzetti benefits under the Federal Employees’ Compensation Act (FECA) for medical expenses and lost wages.
- Lorenzetti sued the other driver in Pennsylvania state court; Pennsylvania’s no-fault scheme generally limited tort recovery to noneconomic losses, such as pain and suffering.
- Lorenzetti settled the state-court action for an amount characterized under state law as compensating noneconomic losses alone.
- The United States sought reimbursement from the settlement proceeds under 5 U.S.C. § 8132 for FECA benefits paid; Lorenzetti refused, arguing reimbursement is limited to third-party recoveries for the same economic losses FECA covers.

## Issues

1. Whether 5 U.S.C. § 8132 limits the United States’ reimbursement right to portions of a third-party recovery that correspond to FECA-compensable economic losses.
2. Whether § 8132 permits reimbursement from any third-party settlement or award satisfying a tortfeasor’s liability, including amounts allocated to noneconomic damages under state law.

## Decision

- The Supreme Court reversed the Third Circuit and reinstated summary judgment for the United States.
- Section 8132 entitles the United States to reimbursement of FECA compensation from any money or property an employee receives in satisfaction of a liable third party’s obligation, whether the recovery is for economic or noneconomic loss.
- The case was remanded for proceedings consistent with requiring reimbursement, subject to statutory deductions for reasonable attorney’s fees and costs.

## Legal Principles

- FECA § 8132 creates a general federal reimbursement right measured by FECA benefits paid and triggered by the employee’s receipt of any third-party recovery in satisfaction of liability; it is not limited to subrogation for particular elements of damages.
- Characterization of a settlement under state law (including allocation solely to pain and suffering) does not restrict the United States’ reimbursement right under § 8132.
- The reimbursement provision serves to prevent duplicative recovery and to protect the federal compensation fund; a rule turning on damage-element labeling would invite manipulation and undermine uniform administration.

## Conclusion

The Court held that when a federal employee receives FECA benefits and later obtains a settlement or judgment from a liable third party, § 8132 requires repayment to the United States from that recovery up to the amount of FECA compensation paid, even if state law limits the recovery to noneconomic damages.


United States v. Lorenzetti, 467 U.S. 167 (1984)