United States v. Eisenberg

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA,
Plaintiff,
Civil Action No. 13-1629 (BAH)
v.
Judge Beryl A. Howell
MICHAEL D.J. EISENBERG,
Defendant.
MEMORANDUM OPINION
The United States initiated this suit to recover funds under Section 8132 of the Federal
Employees’ Compensation Act (“FECA”), 5 U.S.C. § 8101 et seq., from defendant Michael D.J.
Eisenberg, who is an attorney licensed to practice law in the District of Columbia and is
proceeding pro se in this action. Eisenberg successfully obtained a settlement award for his
former client, and now-third-party defendant, Gregory Thompson, in a lawsuit captioned,
Thompson v. Wackenhut Corp., No. 1:09-cv-01113-GBL-TRJ (E.D. Va. Oct. 2, 2009)
(“Wackenhut suit”), for injuries Thompson suffered from a slip-and-fall accident. Eisenberg
failed, however, to refund to the government the amount of workmen’s compensation paid to
Thompson under the FECA. The United States alleges that, under 5 U.S.C. § 8132, Eisenberg
was required to refund to the United States funds totaling $96,295.15 prior to disbursing the
settlement funds obtained in the third-party suit. Pending before the Court are three motions: (1)
the United States’ Motion for Partial Judgment on the Pleadings and for Partial Summary
Judgment (“Pl.’s Mot.”), ECF No. 26; (2) Eisenberg’s Motion for Leave to File Counterclaim
Against the United States of America (“Def.’s Counterclaim Mot.”), ECF No. 62; and (3)
Eisenberg’s Opposed Motion to Amend Answer (“Def.’s Answer Mot.”), ECF No. 86. For the
1
reasons discussed below, Eisenberg’s motions are denied, and the United States’ motion is
granted in part and denied in part.1
I. BACKGROUND
The following facts derive from the whole record, including the parties’ various
statements of material facts, briefs, exhibits, and other evidence in the record.
A. FECA Claim
Gregory Thompson, an employee of the U.S. Department of the Navy, was injured in a
slip-and-fall accident on December 6, 2007. Pl.’s Statement Material Facts Supp. Mot. J.
Pleadings & Partial Summ. J (“Pl.’s SMF”) ¶ 7, ECF No. 26-1; Def.’s Material Facts (“Def.’s
SMF”) at 7, ECF No. 85; Def.’s Counterclaim Against the United States of America (“Def.’s
Proposed Counterclaim”) ¶ 10, ECF No. 62-2. After the accident, pursuant to the FECA,
Thompson filed a claim with the Department of Labor (“DOL”) Office of Workers’
Compensation Programs (“OWCP”) for medical benefits and lost wages related to the injuries
caused by the accident. Pl.’s SMF ¶ 8; Def.’s SMF at 7. 2 By letter dated February 19, 2008,
Thompson received notification from OWCP that his claim had been accepted. Def.’s Mem.
Supp. Opp’n Pl.’s Mot. Partial J. Pleadings & Partial Summ. J. (“Def’s Mem.”), Ex. A
1
Eisenberg has requested oral argument on his pending motions, see Def.’s Reply Pl.’s Opp’n Def.’s Mot.
Amend Answer (“Def.’s Reply”) at 1, ECF No. 89, but given the sufficiency of the parties’ written submissions to
resolve the pending motions, this request is denied, see Local Civil Rule 7(f) (allowance of oral hearing is “within
the discretion of the court”).
2
The United States repeatedly asserts as undisputed that Eisenberg represented Thompson with respect to his
initial FECA claim, see, e.g., Pl.’s Mem. Supp. Mot. Partial J. Pleadings & Partial Summ. J. (“Pl.’s Mem.”) at 1
(citing Compl. ¶¶ 6, 9; Answer ¶¶ 6, 9), ECF No. 26; Pl.’s Opp’n Def.’s Mot. File Counterclaim (“Pl.’s Opp’n
Counterclaim”) at 2 (same), ECF No. 64, but the record is not so clear, see Compl. ¶ 6 (“Mr. Thompson filed a claim
with the [OWCP] for compensation under the [FECA]. He sought medical benefits and lost wages related to the
injuries caused by the accident.”) (emphasis added); id. ¶ 9 (“Mr. Thompson brought suit against a third party,
Wackenhut Services, Inc., alleging that Wackenhut’s negligence caused the same slip-and-fall accident for which he
received FECA benefits. He retained Mr. Eisenberg as counsel to represent him in that action.”) (emphasis added);
Answer ¶ 6 (admitting plaintiff’s allegations in ¶ 6 of the Complaint); id. at 9 (admitting plaintiff’s allegations in ¶ 9
of the Complaint). Records submitted in the Wackenhut suit, however, do show that Eisenberg represented
Thompson in subsequent administrative actions involving his FECA claim. See Wackenhut, Def. United States’
Mot. Dismiss or Summ. J. (“Pl.’s Wackenhut Mot.”), Exs. E & F, ECF No. 8-2.
2
(“Thompson FECA Claim Acceptance Notice”), ECF No. 84-1. Over a year later, by letter dated
May 28, 2009, on which Eisenberg is copied as Thompson’s attorney, Thompson received notice
from OWCP that his “claim for medical and wage loss benefits has been terminated effective
06/07/2009.” Def.’s Mem., Ex. B (“Thompson FECA Claim Termination Notice”), ECF No. 84-
2. Thus, OWCP disbursed compensation to Thompson until at least June 7, 2009, when it
purportedly terminated his benefits. Id.; see also Compl. ¶ 8 (alleging OWCP disbursed
compensation to Thompson until June 7, 2009); Pl.’s SMF ¶ 9 (same). 3
Thompson, represented by Eisenberg, requested reconsideration of OWCP’s decision to
terminate his benefits, but OCWP denied this request on July 7, 2010. See Def.’s Mem., Ex. C
(“Thompson FECA Claim Reconsideration Notice”), ECF No. 84-3.
Notwithstanding OWCP’s notification of termination of Thompson’s benefits,
compensation was apparently paid on behalf of Thompson, at least to medical providers, after
June 7, 2009. For example, DOL payment history reports in the record reflect that while
Thompson’s lost wages compensation stopped after June 6, 2009, see Def.’s Mem., Ex. D
(“October 8, 2010 Letter”) at 2–6 (attached report of “Compensation Payment History”), ECF
No. 84-4; id., Ex. I (“October 4, 2011 Letter”) at 50–53 (attached “Payment History Inquiry
Report”), ECF No. 84-8; Pl.’s Opp’n Def.’s Mot. Amend Answer (“Pl.’s Opp’n Answer”), Ex. 8
at 46–49 (Wackenhut, Def. United States’ Mot. Dismiss or Summ. J. (“Pl.’s Wackenhut Mot.”),
Ex. D, ECF No. 8-2) (“Payment History Inquiry Report”), ECF No. 88-1, he continued to receive
3
To the extent that Eisenberg denies that Thompson received any compensation at all from OWCP, see, e.g.,
Answer ¶ 7 (“Defendant is uncertain as to the exact monies distributed, if any, by Plaintiff to Gregory Thompson.”)
(emphasis added); Def.’s SMF at 2, ¶ 1 (disputing Pl.’s SMF ¶ 9), his denial is “blatantly contradicted by the record,
so that no reasonable jury could believe it,” and the Court must “not adopt that version of the facts for the purposes
of ruling on [the United States’] motion for summary judgment,” Lash v. Lemke, 786 F.3d 1, 6 (D.C. Cir. 2015)
(quoting Scott v. Harris, 550 U.S. 372, 380 (2007)). Indeed, Eisenberg’s own proposed pleading asserts that “the
Thompsons applied for and received moneys through [DOL].” Def.’s Proposed Counterclaim ¶ 11 (emphasis
added); see also Answer ¶ 9 (admitting Eisenberg represented Thompson in a third party lawsuit related to the same
accident “for which he [Thompson] received FECA benefits”) (emphasis added).
3
medical benefits through February 10, 2011, see October 4, 2011 Letter at 40–49 (attached “Bill
Pay History Report” showing medical benefits disbursed through February 10, 2011); see also
Pl.’s Opp’n Answer, Ex. 8 at 40–45 (Pl.’s Wackenhut Mot., Ex. C, ECF No. 8-2) (“Bill Pay
History Report” showing medical benefits disbursed through August 27, 2009).
B. Third Party Lawsuit
On October 2, 2009, Thompson, represented by Eisenberg, filed suit in the U.S. District
Court for the Eastern District of Virginia against a third party, Wackenhut Services, Inc.
(“Wackenhut”), and the United States for negligence relating to Thompson’s December 6, 2007
slip-and-fall accident. Wackenhut, Compl., ECF No. 1;4 see also Pl.’s SMF ¶¶ 10–11; Def.’s
SMF at 7; Def.’s Proposed Counterclaim ¶ 10. On December 7, 2009, the United States filed a
Motion to Dismiss, or Alternatively, for Summary Judgment (“Pl.’s Wackenhut Mot.”),
Wackenhut, ECF No. 7, supported by a Declaration of Antonio A. Rios (“Rios Decl.”), id., ECF
No. 8-1, Deputy Director for OWCA, together with a detailed accounting, id., Exs. C & D. Rios
attested: “Thompson received a total of $94,261.33 disability compensation from January 22,
2008 until June 6, 2009. OWCP also paid $29,451.75 for medical treatment related to the
accepted conditions.” Rios Decl. ¶ 5; see Pl.’s Opp’n Answer at 13 n.9. The court granted the
United States’ motion on January 15, 2010, dismissing the United States from the suit without
prejudice. Wackenhut, Order, ECF No. 20.
Thompson and Wackenhut then settled the negligence action for $675,000. Pl.’s SMF ¶
12; Def.’s SMF at 7. On November 5, 2010, Eisenberg, on behalf of Thompson, filed a Notice
of Settlement in the Wackenhut suit, Wackenhut, ECF No. 234, which was followed by a joint
Stipulation of Dismissal With Prejudice, on November 16, 2010, id., ECF No. 235.
4
An Amended Complaint was later filed alleging the same claim for negligence against the United States
and Wackenhut. Id., Amended Compl., ECF No. 27; Pl.’s Opp’n Answer, Ex. 9-A, ECF No. 88-2.
4
The settlement award was issued jointly to Thompson and Eisenberg’s law firm. See
Def.’s Mem., Ex. E (“Third-Party Lawsuit Settlement Letter”) at 2, ECF No. 84-5. Eisenberg
admits that “[u]pon receiving the $675,000 from the settlement, [he] distributed the proceeds to
Mr. Thompson and paid himself an attorney’s fee.” Pl.’s SMF ¶ 14; Def.’s SMF at 7.
C. Government Refund-Related Correspondence
On October 7, 2010, at Eisenberg’s request, see Def.’s SMF ¶ 5 (asserting that
“[d]efendant did request, as a confirmation what, if any funds, were due through Mr.
Thompson”), Thompson wrote a letter to OWCP “requesting the total amount of compensation
paid” by OWCP for his case, October 8, 2010 Letter at 1. By letter dated October 8, 2010,
Gloria Watson, a Claims Examiner at OWCP, responded to Thompson, attaching “a copy of [his]
compensation payment history.” Id. 5 Handwritten on one copy of the October 8, 2010 letter
submitted by Eisenberg in this case, on the bottom right-hand corner, is the phrase, “Workers
Comp Payback $52,900.45,” along with a second handwritten number “52,900.45” a few lines
below the phrase. Id. The attached payment history printout of Thompson’s “Compensation
Payment History,” which appears to have been generated that day from the “Employment
Standards Administration Federal Employees’ Compensation System,” id. at 2, shows net total
payments of $94,261.33 from January 22, 2008 through June 6, 2009, id. at 6.
Thompson forwarded Eisenberg a copy of the October 8, 2010 letter without any
handwriting, via email on October 14, 2010. Def.’s Mem., Ex. U (“October 14, 2010 Email”),
ECF No. 84-19. Eisenberg replied to Thompson the same day, stating: “This appears to include
your paycheck as well. You need to contact HR and ask them what benefits you have to payback
5
Eisenberg submitted the October 8, 2010 letter in both Exhibit D and Exhibit U to his opposition to the
United States’ motion. See Def.’s Mem., Ex. D (“October 8, 2010 Letter”) at 1, ECF No. 84-4; id., Ex. U (“October
14, 2010 Email”) at 3, ECF No. 84-19.
5
[sic] (all of them or just medical and/or paycheck, etc) and an exact number of what you owe.”
Id.
Over six months after the settlement of the Wackenhut suit, Eisenberg submitted, by letter
dated June 9, 2011, a Long Form Statement of Recovery (“SOR”) notifying DOL, Office of the
Solicitor (“DOL-SOL”), that Thompson had “recently” received a third-party damage award in a
settlement against the third-party involved in Thompson’s OWCP claim. Pl.’s Mem. Supp. Mot.
Partial J. Pleadings & Partial Summ. J. (“Pl.’s Mem.”), Ex. 1 (“June 9, 2011 Letter”), ECF No.
26-2; Def.’s Mem., Ex. F (“June 9, 2011 Letter”), ECF No. 84-6. Despite being privy both to the
Wackenhut suit’s Rios Declaration, which indicated that compensation totaling $123,713.08 had
been paid to Thompson, and to DOL-SOL’s October 2010 letter, which stated that compensation
paid to Thompson through June 6, 2009 totaled $94,261.33, Eisenberg listed in the SOR an
amount of $70,533.93 in OWCP disbursements to Thompson and an amount of $17,633.48 for
the government-allowed attorney’s fee, reflecting a balance of $52,900.45 to be refunded to
OWCP. See June 9, 2011 Letter. According to Eisenberg, Thompson had “instructed [him] that
the amount to be used in the set-aside calculation was $70,533.93,” Answer ¶ 18(b); Def.’s First
Amended Answer (“Def.’s Proposed Answer”) at ¶ 18(b), ECF No. 86-3, and Thompson had
relied on the government “to provide him with accurate information to provide Mr. Eisenberg,”
Answer ¶ 18(c); Def.’s Proposed Answer ¶ 18(c); see also Def.’s Mem. at 6 n.8 (“Defendant
asserts that Mr. Thompson informed Defendant of this value after Mr. Thompson spoke with
DOL.”), ECF No. 83-2. The SOR triggered a lengthy series of communications between
Eisenberg and DOL.
A little over a month later, by letter dated July 19, 2011 to Eisenberg, Onetia J. Evans, a
DOL-SOL Paralegal Specialist, acknowledged the receipt of the SOR, but raised concern over
6
the computation of the amount to be refunded. Pl.’s Mem., Ex. 2 (“July 19, 2011 Letter”), ECF
No. 26-3; Def.’s Mem., Ex. G (“July 19, 2011 Letter”), ECF No. 84-7. Specifically, DOL
indicated that OWCP had disbursed additional benefits to Thompson in the interim between the
Wackenhut suit settlement and the receipt of the SOR, stating:
Since you did not timely file the required Statement of Recovery to compute the
Government’s statutory right of reimbursement and to establish the surplus, the
[OWCP] continued to pay benefits to and on behalf of your client. Current
disbursements total $128,393.53 as of June 29, 2011.
July 19, 2011 Letter. Consequently, the letter cautioned:
If you insist on paying the Government’s right of reimbursements in the amount
of $52,900.45 based on disbursement at the time of the settlement that you
computed at $70,533.93, there will be an overpayment of $57,859.60 which is
current disbursements of $128,393.53 minus $70,533.93 disbursements at the
time of settlement.
Id. In other words, because the SOR was not timely filed, OWCP had disbursed benefits for
Thompson after the October 2010 Wackenhut settlement, bringing the total amount of
disbursements to $128,393.93. The letter attached an amended SOR and demanded payment of a
refund to OWCP in the amount of $96,295.15 within thirty days. Id.
The next month, on August 16, 2011, Eisenberg spoke with Gertrude G. Gordon, DOL-
SOL’s Chief of Subrogation, and requested that she “explain how the numbers on the Statement
of Recovery were reached” in the July 19, 2011 letter. Pl.’s Mem., Ex. 3 (“August 16, 2011
Letter”) at 1, ECF No. 26-4. Gordon wrote back to Eisenberg “apologize[ing] for any
miscommunications between” Eisenberg and her staff, but reiterating that the SOR “was not
timely filed” and that OWCP “continued to pay benefits to and on behalf of your client,” with
“[c]urrent disbursements total[ing] $128,393.52 as of June 29, 2011.” Id. She further explained
that, “since the [OWCP] did not suspend your client’s benefits, current disbursements total
$128,393.53 which results in a refund of $96,295.15.” Id. Acknowledging that Eisenberg
7
“stated that [he had] $52,900.45 ready to pay the Government’s statutory right of
reimbursement,” Gordon asked him to “[p]lease submit this payment within thirty days of your
receipt of this letter.” Id. Eisenberg was cautioned, however, that “the total due is $96,295.15”
and, thus, “upon receipt of the $52,900.45, the balance due will be $43,394.70.” Id. In response
to Eisenberg’s request for “possible payment of the additional amount with monthly payments,”
Gordon agreed that DOL would “accept a monthly payment plan,” but that the balance of the
amount owed “must be paid in full within one year.” Id.
Two months later, by letter dated October 4, 2011, Evans, the Paralegal Specialist,
responded to Eisenberg’s “recent request for current disbursement information” for Thompson’s
FECA claim, stating that the United States had disbursed $98,792.13 in pay compensation and
$29,601.40 in medical compensation—a total of $128,393.53 in compensation—as of September
27, 2011. Pl.’s Mem., Ex. 4 (“October 4, 2011 Letter”), ECF No. 26-5; October 4, 2011 Letter at
1.
Subsequently, on October 23, 2011, Eisenberg advised DOL-SOL of “Mr. Thompson’s
family income and expenses.” Def.’s Mem., Ex. J (“October 23, 2011 Correspondence”), ECF
No. 84-9; see Pl.’s Mem., Ex. 5 (“November 17, 2011 Letter”), ECF No. 26-6; Def.’s Mem., Ex.
K (“November 17, 2011 Letter”), ECF No. 84-10. After complaining that DOL had failed to
timely contact him and Thompson or “to return [his] calls from nearly six weeks ago,”
Eisenberg explained that Thompson’s financial situation was “strained” such that making even a
$100 monthly payment “would create a financial hardship.” October 23, 2011 Correspondence.
He represented, “[h]owever,” that “as a matter of due course and act of good faith, the family is
prepared to pay the lump sum amount that was withheld back in November ($52,900.45) and
make monthly payments of $100.00.” Id. Eisenberg further stated,
8
A good faith effort was made to protect the financial interests of the government
when the settlement with the third-party contractor was made. As discussed
above, it appears that it was the Agency’s error that created the situation the
family now finds itself in. I would ask as a matter of compassion that the
remaining moneys, after the lump sum withheld back in November is paid
($52,900.45), be waived. If the Government is unwilling to assist this former
member of the United States military and nearly 20 year civil servant, the family
will agreed [sic] to the payment scheme discussed above. But, if the Government
is unwilling to agree to the aforementioned, then the moneys currently being held
will need to be used to start monthly payments.
Id.
DOL-SOL responded, by letter dated November 17, 2011, that, under section 8132 of the
FECA, the government had “no authority to waive or compromise the amount to be refunded”
and, consequently, “[t]he amount of compensation paid as of the date of third party settlement in
this case is $128,393.53. The Statement of Recovery must be computed based on this
disbursement amount which results in a refund owed to the United Sates in the of [sic]
$96.295.15. This amount must be paid.” November 17, 2011 Letter. DOL-SOL also rejected
Eisenberg’s offer of monthly payments because it would “clearly result in payment being
completed well beyond one year.” Id. The letter explained, “Payments are typically made
within 30 days of completion (see 20 C.F.R. §§ 10.715 & 10.716) but this office can allow an
installment plan of up to a year.” Id. The letter notified Eisenberg that he had two options: he
could (1) “submit payment of the $96,295.15 within thirty days,” or (2) “submit an initial
payment of $52,900.45 within 30 days with continuing monthly payment to pay the balance of
$43,394.70 within one calendar year.” Id. Lastly, the letter warned Eisenberg that “[f]ailure to
make payment in either of these two ways will result in this matter being forwarded to Treasury
for collection or referral to the U.S. Department of Justice to bring action against you, your firm
and your client.” Id.9
The following month, by letter dated December 19, 2011, Eisenberg requested “a formal
meeting” with Gordon and DOL-SOL “regarding the overpayment issue your office has caused
my client.” Def.’s Mem., Ex. L (“December 19, 2011 Letter”), ECF No. 84-11. In the letter,
Eisenberg accused the government of “nonfeasance” and alleged that any payments to Thompson
over the amount of $52,900.45—the amount which Eisenberg had set aside from the settlement
to pay the government—were “separate overpayment[s] caused by your office” that “have
nothing to do with our settlement notification.” Id. According to Eisenberg, the government had
failed to stop making payments to Thompson, who “had no reason due to your inaction to
believe that he was not entitled to these monies.” Id. Eisenberg thus alleged that any amount
over $52,900.45 fell outside the scope of Section 8132 and the government was not entitled to
recoup those funds. Id.On March 12, 2012, Eisenberg met with Alexandra A. Tsiros, Counsel for FECA
Subrogation at DOL-SOL, and the Deputy Associate Solicitor. See Pl.’s Mem., Ex. 6 (“July 31,
2012 Letter”), ECF No. 26-7; Def.’s Mem., Ex. N (“July 31, 2012 Letter”), ECF No. 84-12.
Tsiros memorialized the discussion during the March 12, 2012 meeting in a letter to Eisenberg,
dated July 31, 2012, making yet another demand for payment. Id. Notably, the letter reflected
that Eisenberg “stated during the meeting in our office that the settlement funds had already been
used to purchase an annuity for your client, and, as a consequence, your client does not have
sufficient income to reimburse the government.” Id. The letter warned that, “[b]ecause it is
apparent that you distributed funds to your client and paid yourself an attorney’s fee of
$101,250.00 without paying the refund due to the United States under § 8132, you have
established that you are liable to the government for the full amount of the refund.” Id.
10
On August 12, 2012, in an email to Tsiros, Eisenberg offered to settle the matter, on
behalf of Thompson, for the $52,000 retained from the settlement and $500 monthly payments
“until the rest is paid off.” Def.’s Mem., Ex. N(2), ECF No. 84-13. Tsiros responded that she
would review the offer, discuss it with the appropriate parties, and “get back to you as soon as
possible.” Id. The record does not reflect any follow-up communication between Eisenberg and
Tsiros.
On September 24, 2012, Eisenberg emailed Marcia Harris at DOL requesting “a sit-down
meeting with you and your supervisors” regarding “some new information [that] may have come
to light that needs to be properly addressed.” Def.’s Mem., Ex. O, ECF No. 84-14. The record
reflects no such meeting or further communication until December 14, 2012, on which date
Tsiros sent Eisenberg a letter representing DOL-SOL’s “final attempt to collect this debt before
referring the matter to the Department of the Treasury for collection.” Pl.’s Mem., Ex. 7
(“December 14, 2012 Letter”), ECF No. 26-8; Def.’s Mem., Ex. P (“December 14, 2012
Letter”), ECF No. 84-15. In response, on January 13, 2013, Eisenberg emailed Tsiros and
conceded that “send[ing] this matter to DOJ/IRS” “is the only remaining path based on your
correspondence.” Def.’s Mem., Ex. Q, ECF No. 84-16.
D. Instant Lawsuit
The United States filed the Complaint in this matter on October 24, 2013, seeking
recovery solely from Eisenberg of $96,295.15 under § 8132 of the FECA. Compl. ¶ 1. 6
Eisenberg then joined Thompson as a third-party defendant. Compl. & Mot. to Join Gregory
Thompson & Clarisse Thompson as Third-Party Defs. (“Third-Party Compl.”), ECF No. 10. 7
6
Eisenberg’s Answer asserts affirmative defenses of contributory negligence, mistake of fact, and failure to
join all relevant parties. See Answer, ¶¶ 18–20, ECF No. 8.
7
Thompson’s wife, Clarisse Thompson, who was also joined as a third-party defendant, was later dismissed
without prejudice. See Minute Order (Feb. 24, 2015).
11
On March, 12, 2014, Thompson answered the third-party complaint and counterclaimed against
Eisenberg for negligence and breach of contract, alleging that Eisenberg “negligently failed to
protect the lien asserted by the United States,” and “charged [him] a fee of more than
$200,000.00 for his services, . . . [which] included protecting and clearing any and all liens
claims by the United States.” Third-Party Def.’s Counterclaim Against Michael Eisenberg
(“Thompson’s Counterclaim”) at ¶¶ 4, 6, ECF No. 18.
After unsuccessful mediation of the dispute, 8 and at the request of the United States and
Thompson, see Joint Status Report, ECF No. 24, discovery was stayed until the resolution of any
pre-discovery dispositive motions, see Minute Order (June 3, 2014). The United States
subsequently filed, on June 11, 2014, its pending dispositive motion, ECF No. 26.
Eisenberg then took approximately nine months, until March 23, 2015, after multiple
extensions of time, see Minute Order (June 24, 2014); Minute Order (July 9, 2014); Minute
Order (March 6, 2015), to complete the submission of his opposition to the United States’
motion, see ECF Nos. 83-85. In the interim, he filed approximately twelve additional motions,
including motions to file cross-claims against three additional third-parties—a legal malpractice
insurance company and two insurance brokers, see ECF Nos. 31–32, a motion to stay the
dispositive motions schedule, see ECF No. 37, a motion for leave to file amended cross-claims
against Thompson and his wife, see ECF No. 63, five motions for extensions of time related to
those motions, see ECF Nos. 52–54, 67–68, and his pending motion to file counterclaims against
8
At the parties’ request, the Court referred the case to a Magistrate Judge for settlement negotiations during
April and May, 2014. Order (Apr. 2, 2014), ECF No. 21; see also Minute Entry (Apr. 15, 2014); Minute Entry
(May 28, 2014); Joint Status Report at 1, ECF No. 24.
12
the United States, ECF No. 62, for selective prosecution, per se discrimination, denial of due
process and notice, and civil conspiracy, see Def.’s Proposed Counterclaim ¶¶ 21–45. 9
Eisenberg withdrew two of those motions, see ECF Nos. 72, 78; Minute Order (Feb. 2,
2015); Minute Order (Feb. 23, 2015), and the Court held a hearing on the remaining substantive
motions on February 11, 2015, see Minute Entry (Feb. 11, 2015); Minute Order (Feb. 11, 2015).
Eisenberg then stipulated to the dismissal of the third-party insurance companies, see ECF No.
80, Minute Order (Feb. 23, 2015), and the Court denied his motion to stay, ordering that he
respond to the United States’ dispositive motion by March 11, 2015, see Minute Order (Feb. 26,
2015).
After yet another extension of time, see Minute Order (March 6, 2015), Eisenberg finally
submitted opposition papers, see ECF Nos. 83–85, and then, on March 29, 2015, filed his
pending motion to amend his Answer, ECF No. 86, to add two additional affirmative defenses—
estoppel and selective prosecution, see Def.’s Proposed Answer at ¶¶ 21–22. 10
II. DISCUSSION
The Court first discusses the applicable statutory and regulatory framework and then
addresses Eisenberg’s two motions to amend his pleadings before turning to the United States’
dispositive motion, for which the record is sufficient for a decision on the merits in favor of the
United States.
9
Eisenberg’s motions for extensions of time were granted. See Minute Order (Sept. 9, 2014); Minute Order
(Sept. 16, 2014); Minute Order (Sept. 22, 2014); Minute Order (Feb. 2, 2015).
10
Upon the parties’ request, the Court temporarily stayed the dispositive motions schedule pending resolution
of Eisenberg’s two remaining motions to amend his answer and file counterclaims against the United States. See
Minute Order (Apr. 8, 2015). Since Eisenberg’s two motions are resolved in this Memorandum Opinion, the Court
hereby lifts the stay.
13
A. Section 8132 Statutory and Regulatory Framework
Under the FECA, federal employees may receive compensation for injuries sustained
while performing their employment duties. See 5 U.S.C. § 8102; United States v. Lorenzetti, 467
U.S. 167, 168 (1984) (“The [FECA], 5 U.S.C. § 8101 et seq., provides a comprehensive system
of compensation for federal employees who sustain work-related injuries.”). When an employee
is entitled to receive compensation under the FECA but “a person other than the United States” is
legally liable for the employee’s injuries, “the Secretary of Labor may require” the employee to
“assign to the United States any right of action” he has to enforce the third-party liability or to
“prosecute the action in [the employee’s] own name.” 5 U.S.C. § 8131 (emphasis added).
Regardless of any action by the Secretary of Labor, however, a FECA beneficiary who “receives
money or other property” for third-party liability “as the result of suit or settlement by him or in
his behalf,” must refund to the United States, “after deducting therefrom the costs of suit and a
reasonable attorney’s fee,” the compensation that the United States paid to the beneficiary and
“credit any surplus on future payments of compensation payable to him for the same injury.” 5
U.S.C. § 8132; see Lorenzetti, 467 U.S. at 168 (“As part of [the FECA] system, an employee
who receives FECA payments is required to reimburse the United States for those payments, to a
specified extent, when he obtains a damages award or settlement from a third party who is liable
to the employee for his injuries.”); Gonzalez v. Dep’t of Labor, 603 F. Supp. 2d 137, 141 (D.D.C.
2009) (“[R]egardless of whether the Secretary requires the filing of a lawsuit, a FECA
beneficiary who receives compensation through a third-party lawsuit must reimburse Labor for
federal funds already paid to the beneficiary as compensation for an injury.”), aff’d, 609 F.3d
451 (D.C. Cir. 2010).
14
Section 8132, moreover, expressly directs that “[n]o court, insurer, attorney, or other
person shall pay or distribute to the beneficiary or his designee the proceeds of such [third-party]
suit or settlement without first satisfying or assuring satisfaction of the interest of the United
States.” 5 U.S.C. § 8132; see Lorenzetti, 467 U.S. at 171 n.2 (“Section 8132 . . . provides that no
person shall make distribution to an employee pursuant to a damages judgment or settlement
without first satisfying the United States’ reimbursement interest.”).11 The Eighth Circuit
explained that “this sentence was added to expedite reimbursement by granting the government a
lien on the proceeds of any third party recovery to the extent of the government’s reimbursement
rights” such that “[a]ny person who deals with funds against which the government has a lien
under section 8132 is thus liable to the United States for conversion.” Green v. U.S. Dep’t of
Labor, 775 F.2d 964, 970 (8th Cir. 1985). Consequently, this provision creates joint and several
liability for the FECA beneficiary and his attorney. Id.; see also United States v. Epstein, No.
2:06cv656, 2007 WL 2617174, at *9 (W.D. Pa. Sept. 6, 2007) (“In applying Lorenzetti, the
Court of Appeals for the Eighth Circuit held that the plain language of § 8132 creates joint and
11
Section 8132 provides, in full:
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 entitled to compensation from the United States for that injury or death receives
money or other property in satisfaction of that liability as the result of suit or settlement by him or
in his behalf, the beneficiary, after deducting therefrom the costs of suit and a reasonable
attorney’s fee, shall refund to the United States the amount of compensation paid by the United
States and credit any surplus on future payments of compensation payable to him for the same
injury. No 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. The amount refunded to the United States shall be credited to the
Employees’ Compensation Fund. If compensation has not been paid to the beneficiary, he shall
credit the money or property on compensation payable to him by the United States for the same
injury. However, the beneficiary is entitled to retain, as a minimum, at least one-fifth of the net
amount of the money or other property remaining after the expenses of a suit or settlement have
been deducted; and in addition to this minimum and at the time of distribution, an amount
equivalent to a reasonable attorney’s fee proportionate to the refund to the United States.
5 U.S.C. § 8132.
15
several liability on the part of the FECA recipient and his attorney.”). Similarly, the Ninth
Circuit recognized that “[t]he legislative history of the [provision] indicates that this language
creates a lien on the recovery.” United States v. Limbs, 524 F.2d 799, 803 (9th Cir. 1975).
Accordingly, “[a]n attorney . . . who receives settlement from a third party tortfeasor . . . has an
explicit duty to reimburse the federal government before paying his clients.” Id.The scope of § 8132 is broad: “it expressly creates a general right of reimbursement” and
should not “be construed to diminish the scope of the United States’ reimbursable interest when
a third-party action is maintained by the employee himself.” Lorenzetti, 467 U.S. at 174, 176.
As the Supreme Court explained:
Section 8132 imposes only two conditions precedent to an employee’s obligation
to “refund . . . the amount of compensation paid by the United States.” The first
is that the employee must have suffered an injury or death under circumstances
creating a legal liability in a third party to pay damages. The second is that the
employee or his beneficiaries must have received money or other property in
satisfaction of that liability.
Id. at 173–74; see Gonzalez, 609 F.3d at 456 (recognizing the “only two conditions precedent to
a FECA beneficiary’s reimbursement obligation”).
The governing regulations are consistent with the statute. Under the regulations, a FECA
claimant “can be required to take action,” by OWCP or DOL-SOL, against a third party who
wholly or partially caused the claimant’s injuries. 20 C.F.R. § 10.705 (emphasis added).
Regardless of whether the claimant is required by the agency to take action, however:
[a]ny person who has filed a FECA claim that has been accepted[,] . . . is required
to notify OWCP or [DOL-SOL] of the receipt of money or other property as a
result of a settlement or judgment in connection with the circumstances of that
claim . . . . in writing within 30 days of the receipt of such money or other
property or the acceptance of the FECA claim, whichever occurs later.
20 C.F.R. § 10.710. The regulations also prescribe the amount of money that the FECA
beneficiary is entitled to keep from any third-party recovery and explain, in detail, how the
16
amount that must be paid to the United States is to be calculated. See 20 C.F.R. §§ 10.711–
10.715.
B. Defendant’s Motions to Amend His Pleadings
Eisenberg seeks to file counterclaims against the United States for (1) selective
prosecution, (2) per se discrimination, (3) denial of due process and notice, and (4) civil
conspiracy, alleging that the United States “selectively enforced this pending action against him
because of his religion, race, gender and disability status,” conspired with the Thompsons to
collect funds from him, and failed to “follow its own regulations.” Def.’s Proposed
Counterclaim ¶¶ 1–3; see id. ¶¶ 21–28 (“Count I – Selective Prosecution of Defendant
Eisenberg”), 29–35 (“Count II – Per Se Discrimination”), 36–42 (“Count III – Denial of Due
Process and Notice”), 43–45 (“Count IV – Conspiracy to Make Mr. Eisenberg Solely Liable”).
He seeks both injunctive relief, in the form of “[a]n immediate dismissal (with prejudice) of the
pending lawsuit against” him, id. ¶ 46, and money damages of twelve million dollars, plus fees
and costs, id. at ¶ 47. Eisenberg similarly seeks to amend his answer to assert the affirmative
defenses of estoppel and selective prosecution. See Def.’s Proposed Answer ¶¶ 21–22. As
support for these additional defenses, Eisenberg alleges that the government is “estopped from
taking this action due to its failure to carry out its mandatory duties under the DOL’s guidelines,”
and is “selectively prosecuting the Caucasian, Jewish, Childless person who is not totally and
permanently disabled versus the non Caucasian, non Jewish, person with Children who is totally
and permanently disabled.” Id.
1. Legal Standard
The same legal standard applies to both of the defendant’s motions. Generally, a party
must assert in its responsive pleading any counterclaim against an opposing party when it “arises
17
out of the transaction or occurrence that is the subject matter of the opposing party’s claim.”
FED. R. CIV. P. 13(a). Courts have recognized, however, that “[t]wo rules govern adding a
counterclaim after the initial pleadings have been filed[,]” Rule 13(e) and Rule 15(a). United
States ex rel. Westrick v. Second Chance Body Armor, Inc., 893 F. Supp. 2d 258, 263 (D.D.C.
2012). Rule 13(e) governs counterclaims which arise after responsive pleadings have been filed,
see id. at 263–64, authorizing a court to “permit a party to file a supplemental pleading asserting
a counterclaim that matured or was acquired by the party after serving an earlier pleading,” FED.
R. CIV. P. 13(e). Rule 15(a)(2), on the other hand, governs counterclaims which a party should
have, but did not, file in its responsive pleadings. See Westrick, 893 F. Supp. 2d at 263; FED. R.
CIV. P. 15 advisory committee’s note to 2009 amendment (explaining Rule 15 “govern[s]
amendment of a pleading to add a counterclaim”).
Because of the timing and nature of the counterclaims that Eisenberg seeks to assert, the
Rule 15 standard applies to his motion to assert counterclaims. Eisenberg’s proposed
counterclaims arise from the United States allegedly targeting and prosecuting him in this matter,
see Def.’s Proposed Counterclaim ¶¶ 22, 26–27, 32–34, 45, and “fail[ing] to follow its own rules
of process prior to initiating this present suit,” id. ¶ 38. These claims had clearly already arisen
at the time he served his responsive pleading, and he was required to state them in his responsive
pleading. See FED. R. CIV. P. 13(a). Since he should have asserted his counterclaims in his
responsive pleading but failed to do so, Eisenberg’s instant motion is evaluated under Rule
15(a)(2) as a motion for leave to amend his responsive pleading. The same standard applies to
his motion to amend his answer.
While Rule 15(a), which generally governs all amendments to pleadings, authorizes
amendments to pleadings before trial “as a matter of course” within certain prescribed periods,
18
see FED. R. CIV. P. 15(a)(1), “[i]n all other cases, a party may amend its pleading only with the
opposing party’s written consent or the court’s leave,” FED. R. CIV. P. 15(a)(2). 12 “The court
should freely give leave [to amend] when justice so requires,” id., but “the grant or denial of
leave to amend is committed to a district court’s discretion,” Firestone v. Firestone, 76 F.3d
1205, 1208 (D.C. Cir. 1996); see Foman v. Davis, 371 U.S. 178, 182 (1962), and should be
determined “on a case by case basis,” Harris v. Sec’y, U.S. Dep’t of Veterans Affairs, 126 F.3d
339, 344 (D.C. Cir. 1997). The Supreme Court has explained:
In the absence of any apparent or declared reason—such as undue delay, bad faith
or dilatory motive on the part of the movant, repeated failure to cure deficiencies
by amendments previously allowed, undue prejudice to the opposing party by
virtue of allowance of the amendment, futility of the amendment, etc.—the leave
sought should, as the rules require, be “freely given.”
Foman, 371 U.S. at 182; Harris, 126 F.3d at 344.
While that standard is “generous,” Harris, 126 F.3d at 344, “[u]ndue delay, undue
prejudice to the defendant or futility of the proposed amendment are factors that may warrant
denying leave to amend,” Westrick, 893 F. Supp. 2d at 264 (citing Richardson v. United States,
193 F.3d 545, 548–49 (D.C. Cir. 1999)); see also Foman, 371 U.S. at 182; Hettinga v. United
States, 677 F.3d 471, 480 (D.C. Cir. 2012) (citing James Madison Ltd. ex rel. Hecht v. Ludwig,
82 F.3d 1085, 1099 (D.C. Cir. 1996)). When a party cannot allege adequate facts to state a
claim, or the amended pleading would not survive a motion to dismiss, a court acts within its
discretion in denying leave to amend a pleading as futile. See Rollins v. Wackenhut Servs., Inc.,
12
Eisenberg argues that he should be permitted to amend his Answer as a matter of course. Def.’s Mem.
Supp. Opposed Mot. Amend Answer (“Def.’s Answer Mem.”) at 7, ECF No. 86-1. He is wrong. Under Rule
15(a)(1), “[a] party may amend its pleading once as a matter of course within: (A) 21 days after serving it or, (B) if
the pleading is one to which a responsive pleading is required, 21 days after service of a motion under Rule 12(b),
(e), or (f), whichever is earlier.” FED. R. CIV. P. 15(a)(1). An Answer is a pleading to which no responsive pleading
is required. See FED. R. CIV. P. 7(a) (allowing a reply to an answer only “if the court orders one”). Thus, Eisenberg
was permitted under the rules to amend his pleading as a matter of course only within twenty-one days after serving
it. He filed the Answer, ECF No. 8, on January 27, 2014, and, consequently, was entitled to amend it as a matter of
course only until February 17, 2014.
19
703 F.3d 122, 131 (D.C. Cir. 2012); Hettinga, 677 F.3d at 480; In re Interbank Funding Corp.
Sec. Litig., 629 F.3d 213, 218 (D.C. Cir. 2010).
Here, both the undue delay and the futility of Eisenberg’s proposed counterclaims and
amendments warrant denial of his motions.
2. Undue Delay
Eisenberg was given over six months from the time he filed his Answer to amend his
pleadings, and he was on clear notice of the final deadline to do so. After the Complaint, ECF
No. 1, was filed on October 23, 2013, Eisenberg was granted a two-week extension to file his
answer, see Minute Order (Jan. 13, 2014), as well as permission to file a third-party claim against
Thompson, see Minute Order (Feb. 14, 2014). In an untimely Joint Meet and Confer Report
(“JMCR”), ECF No. 14, which was filed by the parties only after prompting by the Court’s order
to show cause why the parties failed to submit the report as required, see Minute Order (Feb. 28,
2014), the “parties recommend[ed] that all other parties shall be joined and the pleadings
amended by July 1, 2014,” JMCR ¶ 2. An order consistent with the parties’ recommendation
was entered. See Minute Order (Mar. 7, 2014). On April 2, 2014, the parties filed a
Supplemental Joint Meet and Confer Report, ECF No. 20, recommending the same July 1, 2014
deadline for amendments to pleadings, id. ¶ 2, which deadline gave the parties a generous six
months from the filing of the Complaint to amend their pleadings.
Despite this generous period of time for any amendments to pleadings, Eisenberg filed
his Motion for Leave to File Counterclaim Against the United States of America, ECF No. 62,
on November 13, 2014, over a year after the Complaint was filed, eleven months after he had
filed his Answer, and approximately five months after the deadline (of July 1, 2014) to submit
amended pleadings had passed. Eisenberg then filed his Motion to Amend Answer, ECF No. 86,
20
on March 29, 2015, over one and a half years after the Complaint was filed, fifteen months after
he had filed his Answer, and approximately nine months after the deadline (of July 1, 2014) to
submit amended pleadings had passed.
At the outset, Rule 16 of the Federal Rules of Civil Procedure provides that a court’s
scheduling order “may be modified only for good cause and with the judge’s consent.” FED. R.
CIV. P. 16(b)(4). Accordingly, courts have held parties to this higher “good cause” standard on
motions to amend pleadings where scheduling orders to amend pleadings were in place. See A
Love of Food I, LLC v. Maoz Vegetarian USA, Inc., 292 F.R.D. 142, 143–44 (D.D.C. 2013)
(citing cases). To determine whether good cause exists, courts consider, first and foremost, the
diligence of the moving party, “focus[ing] on the timeliness of the amendment and the reasons
for its tardy submission.” Id. at 144 (quoting Lurie v. Mid-Atl. Permanente Med. Grp., P.C., 589
F. Supp. 2d 21, 23 (D.D.C. 2008)). Eisenberg argues that his proposed affirmative defenses are
“essential for a just adjudication of this case,” and that he did not “become aware of the possible
discriminatory motives of the other parties” until after their settlement discussions, noting that
“as a solo-practitioner receiving a lawsuit from the might of the United States government, [he]
is at a slight disadvantage to his opposing counsel’s resources.” Def.’s Reply Pl.’s Opp’n Def.’s
Mot. Amend Answer (“Def.’s Reply”) at 2–3, ECF No. 89. Despite his numerous filings in this
case before ever seeking to amend his pleadings, Eisenberg also emphasizes that he has not filed
repeated motions to amend or acted in bad faith. Id. at 3. As discussed below, the Court can
discern no good reason to modify the July 1, 2014 deadline for the parties to amend pleadings,
see Minute Order (Mar. 7, 2014), or to excuse the delays in Eisenberg’s proposed amendments to
his pleadings.
21
Eisenberg offers absolutely no explanation, and the Court cannot infer any, for his delay
in filing his proposed counterclaims. With respect to the proposed amendments to his Answer,
Eisenberg posits that he learned the information related to the proposed affirmative defenses of
estoppel and selective prosecution only after he filed his Answer, Def.’s Mem. Supp. Opposed
Mot. Amend Answer (“Def.’s Mem. Answer”) at 6–7, ECF No. 86-1; Def.’s Reply at 3, but his
justification makes little sense. Eisenberg’s estoppel defense arises almost entirely from DOL’s
alleged failure to follow its own internal procedures before the United States filed the present
suit. See Def.’s Reply at 7–9. Likewise, the selective prosecution defense arises from the
prosecution of the present suit, see Def.’s Proposed Answer ¶ 22, which plainly occurred before
Eisenberg filed his Answer.
Eisenberg also attempts to justify the delay by indicating that during his settlement
discussions with the government, which occurred in April and May, 2014, he “became more
enlightened as to the possible discriminatory motives of the Parties,” Def.’s Mem. Answer at 4
(emphasis added); see also Def.’s Reply at 3 (asserting that “it was not until this mediation
process that [Eisenberg] became aware of the possible discriminatory motives of the other
parties”). Yet, even if this were true, he offers no explanation for why he waited another six
months, until November 2014, to seek leave to amend his answer. Delay alone would warrant
denial of Eisenberg’s motions to amend his answer and to assert counterclaims.
3. Futility of Amendments
Regardless of the delay, the defendant’s proposed amendments to his pleadings would be
futile. 13
13
To the extent that Eisenberg seeks monetary damages for his proposed counterclaims, “suits for damages
against the United States under the Civil Rights Act, the APA, and the Constitution are barred by sovereign
immunity and . . . suits for damages against the United States under the common law must be brought pursuant to
the limited waiver of sovereign immunity in the FTCA, which requires that the claimant have exhausted his
22
a. Selective Prosecution/Per Se Discrimination
Eisenberg seeks to add selective prosecution as an affirmative defense in his Answer, see
Def.’s Proposed Answer ¶ 22, and as a counterclaim, see Def.’s Proposed Counterclaim ¶¶ 21–
28, and to add per se discrimination as a counterclaim, see id. ¶¶ 29–35. The defendant’s
proposed counterclaims for selective prosecution and per se discrimination are substantively the
same: he alleges that the government prosecuted him, instead of and without including the
Thompsons as defendants, because he is “a Jewish, white male who is not totally and
permanently disabled, and childless” “[w]hile the Thompsons are non-Jewish, African American
individuals with dependents” and “Mr. Thompson is totally and permanently disabled due to a
Federal-Government work related injury.” Def.’s Proposed Counterclaim ¶ 25; see id. ¶ 32
(alleging that the government “discriminated against [him] by choosing solely to bring this
action against [him] based on his race, religious background, gender (childless) and disability
status even though the Thompsons are in a similar circumstance”). Additionally, “the relevant
case law makes no distinction between ‘selective’ and ‘discriminatory’ prosecution.” Office of
Foreign Assets Control v. Voices in the Wilderness, 329 F. Supp. 2d 71, 82 n.8 (D.D.C. 2004)
(citing United States v. Bass, 536 U.S. 862, 863 (2002); United States v. Diggs, 613 F.2d 988,
1003 (D.C. Cir. 1979)). Accordingly, the Court considers the defendant’s proposed selective
prosecution and per se discrimination counterclaims to be one single claim of selective
prosecution. Id.administrative remedy before filing suit.” Benoit v. U.S. Dep’t of Agric., 608 F.3d 17, 20 (D.C. Cir. 2010); see also
Lane v. Pena, 518 U.S. 187, 192 (1996) (“To sustain a claim that the Government is liable for awards of monetary
damages, the waiver of sovereign immunity must extend unambiguously to such monetary claims.”); Keene Corp. v.
United States, 700 F.2d 836, 845 n.13 (2d Cir. 1983) (explaining that “FECA does not constitute a waiver of
sovereign immunity as to third parties”). The United States correctly points out, see Pl.’s Opp’n Def.’s Mot. File
Counterclaim (“Pl.’s Opp’n Counterclaim”) at 6–11, ECF No. 64, that Eisenberg asserts no basis to overcome the
United States’ sovereign immunity to obtain the monetary damages relief sought on his proposed counterclaims.
23
The standard to prove a selective prosecution claim “is a demanding one,” United States
v. Armstrong, 517 U.S. 456, 463 (1996), as government prosecutors have “broad discretion” for
their prosecution decisions, id. at 464 (quoting Wayte v. United States, 470 U.S. 598, 607
(1985)). The Supreme Court has explained:
This broad discretion rests largely on the recognition that the decision to
prosecute is particularly ill-suited to judicial review. Such factors as the strength
of the case, the prosecution’s general deterrence value, the Government’s
enforcement priorities, and the case’s relationship to the Government’s overall
enforcement plan are not readily susceptible to the kind of analysis the courts are
competent to undertake.
Wayte, 470 U.S. at 607. To prove selective prosecution, a claimant must show that (1) the
prosecution “had a discriminatory effect,” and (2) “that it was motivated by a discriminatory
purpose.” Id. at 608; see Armstrong, 517 U.S. at 465. “To establish a discriminatory effect . . . ,
the claimant must show that similarly situated individuals of a different [protected class] . . .
were not prosecuted.” Armstrong, 517 U.S. at 465; see Fog Cutter Capital Grp. Inc. v. SEC, 474
F.3d 822, 826 (D.C. Cir. 2007) (“To prove selective prosecution, a claimant must be part of a
protected class . . . and show not only that prosecutors acted with bad intent, but also that
‘similarly situated individuals [outside the protected category] were not prosecuted.’” (alteration
in original) (quoting Armstrong, 517 U.S. at 465)); United States v. Blackley, 986 F. Supp. 616,
617–18 (D.D.C. 1997) (“[C]harges may be dismissed on the basis of selective prosecution if a
defendant is (1) singled out for prosecution from among others similarly situated and (2) the
prosecution is improperly motivated, i.e. based on an arbitrary classification.”).
Eisenberg fails to state a claim for selective prosecution because he does not allege
sufficient facts to show he was similarly situated to an individual who was not prosecuted.
Eisenberg compares himself to Thompson, his former client, asserting that the government
selectively prosecuted him instead of Thompson, despite the fact that both of them are subject to
24
liability under § 8132. See Def.’s Proposed Counterclaim ¶ 26 (“Plaintiff failed to bring in the
Thompsons into the core ‘Complaint’ even though they are jointly and severally liable for
collection of any relevant moneys . . . .”); Def.’s Reply at 6 (“In this case, Mr. Thompson and
Mr. Eisenberg were each parties that could be recovered from under statute.”). Eisenberg and
Thompson, however, are not similarly-situated for the simple reason that Eisenberg is an
attorney and Thompson is not.
Eisenberg argues that the law is not so stringent as to require that he show he is similarly
situated “in every relevant aspect to a comparator who was treated differently,” and urges the
Court to apply a less “demanding” standard and “common-sense inquiry.” Def.’s Reply at 4–5.
Common-sense, however, suggests that Eisenberg cannot prevail. Eisenberg has not alleged, nor
has he provided any indication that he could allege, that the United States declined to pursue any
other attorney, as opposed to beneficiary, under a similar obligation to repay the United States
after a FECA beneficiary’s recovery from a third party under 5 U.S.C. § 8132. Accordingly,
Eisenberg’s counterclaim for selective prosecution, or per se discrimination, would not survive a
motion to dismiss and granting him leave to file the counterclaim would be futile. For the same
reasons, granting Eisenberg leave to amend his Answer to include selective prosecution as an
affirmative defense would also be futile.
Moreover, and perhaps more significantly, Eisenberg can show no harm or damage
whatsoever from the United States’ decision to prosecute him and not Thompson. Eisenberg
recognizes that he and Thompson are “each parties that could be recovered from under the
statute,” Def.’s Reply at 6, and, thus, that he and Thompson are jointly and severally liable to the
United States. He therefore could, and did, join Thompson in the suit. Had the reverse
occurred—had the United States decided to prosecute only Thompson, Thompson could have,
25
and likely would have, joined Eisenberg. Since Eisenberg would be potentially liable for the
United States’ funds regardless of whether the United States sued Thompson, he cannot, as a
matter of law, have been harmed by the United States’ alleged “selective prosecution” of him.
Accord Green, 775 F.2d at 970 n.6 (“[A] party found jointly and severally liable . . . ‘cannot
compel the plaintiff [the government] to make others parties to the action, or complain because
they have not been joined.’” (alteration in original) (quoting W.P. KEETON, PROSSER AND
KEETON ON THE LAW OF TORTS § 47, at 327 (5th ed. 1984))).
Eisenberg’s attempt to distinguish Green, see Def.’s Mem. at 24–25, which he asserts is
“simply wrong,” id. at 24, is unavailing. Eisenberg argues that Green “fails to follow
Congressional intent” because, in enacting § 8132, Congress intended to prevent “windfall[s]” or
double recoveries for FECA beneficiaries. Id. at 24. Eisenberg misreads Green. The Green
court concluded, based on “an examination of the legislative history of the United States’ right of
reimbursement under the FECA[,] . . . that Congress intended that a party held liable under the
lien language of section 8132 be entitled to reimbursement from the beneficiary of the FECA
payments and the third party recovery.” 775 F.2d at 972 n.9. Indeed, the court found that
“[c]learly, Congress intended that the beneficiary of the FECA payments and the third party
recovery must bear the ultimate burden of reimbursement.” Id. at 972. As a result, the court
held “that a party liable to the United States under the lien language of section 8132 is generally
entitled to indemnity from the ultimate beneficiary.” Id. Here, nothing is stopping Eisenberg
from seeking indemnity or contribution from Thompson, against whom he has already filed a
third-party complaint.
26
b. Denial of Due Process and Notice (“Accardi Claim”) and
Estoppel
Eisenberg seeks to bring a counterclaim for denial of due process and notice based on
allegations that DOL failed to comply with its internal procedures and guidelines, see Def.’s
Proposed Counterclaim ¶¶ 36–42, and seeks to add the affirmative defense of estoppel on the
same grounds, alleging that DOL’s failure to follow its internal procedures and guidelines bars
the government from recovering any money from him, see Def.’s Proposed Answer ¶ 21; see
also Def.’s Proposed Counterclaim at 19 ¶ m (“Failure to provide the required due process not
only violates Defendant’s rights but also bars the Government from any form of recovery from
Defendant.”); Def.’s Reply at 7–10 (arguing the government “did not comply” with the
“extensive list of processes and procedures that are to be followed when an OWCP claim is to be
reimbursed by a third party lawsuit”). Eisenberg’s claims are meritless.
Eisenberg’s proposed counterclaim is purportedly an “Accardi claim.” The Supreme
Court’s decision in United States ex rel. Accardi v. Shaughnessy, 347 U.S. 260 (1954)
(“Accardi”), “has come to stand for the proposition that agencies may not violate their own rules
and regulations to the prejudice of others.” Battle v. FAA, 393 F.3d 1330, 1336 (D.C. Cir. 2005).
Citing to various provisions of an internal DOL procedure manual, see U.S. DEP’T OF LABOR,
DIV. OF FED. EMP. COMP. PROCEDURAL MANUAL ch. 2-1100 (Mar. 2006) (“FECA Third Party
Subrogation Guidelines”), 14 Eisenberg makes numerous allegations that the United States “failed
to follow its own rules of process,” Def.’s Proposed Counterclaim at 9, ¶ 38. Eisenberg’s
allegations, see id. at 8–21, ¶ 38, can be grouped as follows: (1) the government’s failure to
communicate with and assist Eisenberg “prior to and during the third-party suit,” id. at 9; see
14
Available at http://www.dol.gov/owcp/dfec/regs/compliance/DFECfolio/FECA-PT2/group5.htm#21100
(last visited Nov. 25, 2015).
27
also id. at 13–14, 16–17; Def.’s Reply at 7–8, including by failing to use various prescribed
“templates in its communications,” Def.’s Proposed Counterclaim at 10–11; (2) the
government’s failure to follow internal procedures with respect to processing the SOR and
pursuing the collection of the debt after the third-party suit, see generally id. at 12–15, 18–19;
and (3) the government’s failure to advise the defendant of his “rights and responsibilities,” id. at
20.
“It has long been settled that a federal agency must adhere firmly to self-adopted rules by
which the interests of others are to be regulated.” Mass. Fair Share v. Law Enf’t Assistance
Admin., 758 F.2d 708, 711 (D.C. Cir. 1985) (emphasis added); see also Morton v. Ruiz, 415 U.S.
199, 235 (1974) (“Where the rights of individuals are affected, it is incumbent upon agencies to
follow their own procedures.” (emphasis added)). Where, however, “[t]he rules were not
intended primarily to confer important procedural benefits upon individuals in the face of
otherwise unfettered discretion,” and where a case does not involve an agency failing to exercise
required independent discretion, the agency may “relax or modify its procedural rules adopted
for the orderly transaction of business before it when in a given case the ends of justice require
it[;]” and, such an agency action “is not reviewable except upon a showing of substantial
prejudice to the complaining party.” Am. Farm Lines v. Black Ball Freight Serv., 397 U.S. 532,
539 (1970) (internal quotation marks omitted).
Here, none of the guidelines about which Eisenberg complains affect the rights of
individuals or were intended to protect individuals from agency discretion. Instead, the
procedures and guidelines that he cites involve the government’s processes and procedures for
pursuing and collecting claims from third parties for benefits disbursed to beneficiaries under
FECA. These are procedural rules intended to benefit the government, so that it may be
28
reimbursed for claims it has paid. See FECA Third Party Subrogation Guidelines, ch. 2-1100.1
(“Purpose and Scope. This subchapter outlines the procedures for administering the
government’s rights under §§ 8131 and 8132 of the FECA to require FECA claimants to seek
damages from third parties potentially liable for damages as a result of the FECA-covered
injuries, and to refund a portion of any money or other property recovered.” (emphasis added));
see also Lorenzetti, 467 U.S. at 176 (explaining that § 8132 “was adopted ‘not for the purpose of
increasing [FECA] compensation, but for the purpose of reimbursing the Government for
payments made and indemnifying it against other amounts payable in the future’” (alteration in
original) (quoting Dahn v. Davis, 258 U.S. 421, 430 (1922))); id. at 177 (“[T]he purpose of §
8132 is not simply to prevent double recoveries but to minimize the cost of the FECA program to
the Federal Government.”); Green, 775 F.2d at 969 (“The Supreme Court emphasized that the
primary purpose of section 8132 was to minimize the cost of the FECA program to the federal
government and that this policy was furthered by construing section 8132 to create a general
right of reimbursement, however harsh that result might be in a particular case.”). Thus, even
assuming arguendo that Eisenberg sufficiently alleges that the government violated some
internal rule or procedure relating to (1) assisting Eisenberg with the third-party suit, (2)
collecting the debt owed, or (3) advising Eisenberg of “his rights and responsibilities,” the
government’s actions in this case are not reviewable without a showing of substantial prejudice
to the defendant.
Eisenberg cannot show such substantial, if any, prejudice. First, Eisenberg can show no
harm at all from any failure on the part of the United States to communicate with or assist him in
prosecuting Thompson’s third party suit because that third party suit ultimately ended in a
substantial settlement recovery for Thompson and, consequently, substantial attorney’s fees for
29
Eisenberg. Thus, any allegations relating to the government’s actions before or during the third
party suit are unreviewable.
The defense of estoppel is also unavailable with respect to these allegations. See
Gonzalez, 609 F.3d at 459 (rejecting FECA beneficiaries’ estoppel defense in § 8132 suit
because “a requirement that Labor participate in litigation in order to preserve its reimbursement
rights would be inconsistent with one of the purposes of FECA’s reimbursement scheme, which
is to ‘minimize the cost of the FECA program to the Federal Government.’” (quoting Lorenzetti,
467 U.S. at 177)); see also Green, 775 F.2d at 970 (holding that “the government’s failure to
become involved” in the third-party suit did “not preclude it from seeking reimbursement from
[the beneficiary] or [his attorney]” because “the federal government has unfettered discretion to
determine whether to require an assignment of the beneficiary’s claim under section 8131 or to
seek reimbursement from the beneficiary under section 8132”); Mitchell v. Henderson, 128 F.
Supp. 2d 298, 306 (D. Md. 2001) (“[Section] 8132 does not provide that the government will
actively assist or facilitate an individual plaintiff’s lawsuit. Consequently, the fact that [the
agency] did not aid [the FECA beneficiary] does not adversely affect its claim for subrogation.”).
Second, Eisenberg can show no substantial harm from any failure on the part of the
United States to adhere to certain internal, discretionary debt collection procedures. Eisenberg
specifically complains that “the Agency misrepresented to the Parties that they only had one []
year,” as opposed to three years, to repay the United States after the third party suit ended.
Def.’s Proposed Counterclaim at 18, ¶ (g) (citing FECA Third Party Subrogation Guidelines, ch.
2-1100.11b(3)(a)). Indeed, internal procedures appear to permit DOL-SOL to collect debt
through periodic payments within three years, see FECA Third Party Subrogation Guidelines, ch.
2-1100.11.b(3)(a), but the agency is not required to allow three years in every given
30
circumstance. Thus, Eisenberg cannot show that he would be any better off had the government
represented to him that it could provide three years for repayment, since nothing mandates that
DOL-SOL, in fact, provide three years. As Eisenberg acknowledges, the parties have had ample
time to mediate this dispute and have failed to reach a settlement. See Def.’s Material Facts
(“Def.’s Answer Mot. SMF”) at ¶¶ 5, 8, ECF No. 86-2; Answer ¶ 14 (recognizing that attempts
have been made in the last five years to settle this matter); Def.’s Proposed Answer ¶ 14 (same).
DOL was not required, under its internal guidelines or otherwise, to enter a three-year payment
plan to recover funds it is owed.
Third, Eisenberg cannot show substantial, if any, prejudice from any purported failure on
the part of the United States to advise him of his “rights and responsibilities” as specifically
prescribed in the FECA Third Party Subrogation Guidelines. The record is replete with formal
letters from DOL-SOL to Eisenberg advising him of his rights and responsibilities over an
extensive period of time. See generally July 19, 2011 Letter; October 4, 2011 Letter; November
17, 2011 Letter; December 19, 2011; July 31, 2012 Letter; December 14, 2012 Letter.
Moreover, Eisenberg is himself an attorney and personally met with the Deputy Associate
Solicitor and counsel for DOL-SOL to discuss this matter. See July 31, 2012 Letter. Eisenberg
was clearly apprised of his rights and responsibilities with respect to the United States’ right of
recovery of FECA claims. See also Heckler v. Cmty. Health Servs. of Crawford Cty., Inc., 467
U.S. 51, 61–62 (1984) (holding, where the respondent’s “detriment [was] the inability to retain
money that it should never have received in the first place,” the “respondent lost no rights but
merely was induced to do something which could be corrected at a later time”). 15
15
The defendant relies on four cases in support of his proposed “Accardi claim,” see Def.’s Mem. at 20–21,
but those cases are inapposite. In each of those cases, the agency’s failure to follow its rules or regulations was
found to adversely affect a party’s entitlement, right, or vested property interest, which is not the case here. For
example, Morton involved the Bureau of Indian Affairs’ denial of general assistance benefits to needy Indians,
31
Lastly, the affirmative defense of estoppel does not “lie against the Government as it lies
against private litigants,” Millard Refrigerated Servs., Inc. v. Sec’y of Labor, 718 F.3d 892, 897
(D.C. Cir. 2013) (quoting OPM v. Richmond, 496 U.S. 414, 419 (1990)), and “the bar for
succeeding on such a claim is high,” id. at 897–98; see Heckler, 467 U.S. at 60 (“When the
Government is unable to enforce the law because the conduct of its agents has given rise to an
estoppel, the interest of the citizenry as a whole in obedience to the rule of law is undermined. It
is for this reason that it is well settled that the Government may not be estopped on the same
terms as any other litigant.”). Indeed, “[t]o apply equitable estoppel against the government, a
party must show that (1) there was a definite representation to the party claiming estoppel, (2)
the party relied on its adversary’s conduct in such a manner as to change his position for the
worse, (3) the party’s reliance was reasonable and (4) the government engaged in affirmative
misconduct.” Morris Commc’ns, Inc. v. FCC, 566 F.3d 184, 191 (D.C. Cir. 2009) (internal
quotation marks omitted).
Eisenberg asserts that the government’s “failure to properly participate in the FECA
Third Party Subrogation Process,” Def.’s Reply at 8, and, essentially, “assist[] [him] with
reimbursement calculations,” id. at 9 n.12, “confused” him and Thompson, id. at 8. He further
asserts that, “[b]ased on the Government action (or inaction),” he “changed his position and
attempted the calculations himself (even though Government’s lack of action gave the
appearance it was not even necessary),” and “[t]his was a reasonable determination.” Id. This
thereby depriving the plaintiffs of welfare. 415 U.S. at 204. Reuters Ltd v. FCC, 781 F.2d 946 (D.C. Cir. 1986),
involved the FCC’s rescission of properly granted radio station licenses, id. at 947, thereby depriving the plaintiff
“of a vested property interest,” Orange Park Fla. T.V., Inc. v. FCC, 811 F.2d 664, 674 (D.C. Cir. 1987). United
States v. Heffner, 420 F.2d 809 (4th Cir. 1969), involved the IRS’ use of incriminating statements obtained in
violation of internal IRS procedures in a criminal tax fraud prosecution, thereby affecting a defendant’s criminal
rights. Id. at 811–13. Lastly, Panhandle E. Pipe Line Co. v. FERC, 613 F.2d 1120 (D.C. Cir. 1979), involved an
agency’s decision affecting the plaintiff’s entitlement to revenues it obtained by transporting natural gas. Id. at
1122. By contrast, here, DOL’s action or inaction does not adversely affect any right, entitlement, or vested
property interest belonging to Eisenberg.
32
argument is entirely unpersuasive, particularly in light of “the general rule that those who deal
with the Government are expected to know the law and may not rely on the conduct of
Government agents contrary to law.” Heckler, 467 U.S. at 63.
Eisenberg cannot show any of the elements required to assert estoppel against the
government. First, he acknowledges that he did not contact the government regarding the
amount due to the United States before completing the SOR but, instead, obtained this
information through Thompson. See Def.’s SMF ¶ 5 (asserting that Eisenberg requested,
through Thompson “a confirmation what, if any funds, were due”); Answer ¶ 18(b)–(c); Def.’s
Proposed Answer ¶ 18(b)–(c); October 8, 2010 Letter; October 14, 2010 Email. Thus, Eisenberg
cannot show any representation made to him regarding the proper reimbursement calculation, let
alone a “definite representation,” before he disbursed the settlement proceeds. See United States
v. Honeywell Int’l, Inc., 841 F. Supp. 2d 112, 115 (D.D.C. 2012) (finding False Claims Act
defendant “ha[d] not pointed to any definite representation by the government” to support its
estoppel defense where the defendant had alleged “only a failure of the government to accept
[the defendant]’s offer of test results”). Second, since no representation was ever made to
Eisenberg directly, he could not have relied on such a representation. Third, any reliance of
Eisenberg’s on Thompson’s representation to him of the government’s representation to
Thompson was unreasonable. As an attorney representing a FECA beneficiary, Eisenberg had a
duty to familiarize himself with the legal requirements for third-party recovery and subrogation.
Cf. Heckler, 467 U.S. at 64 (“As a participant in the Medicare program, respondent had a duty to
familiarize itself with the legal requirements for cost reimbursement.”). Moreover, he was privy
to compensation amounts owed to the government under the FECA provided in both the Rios
Declaration in the Wackenhut suit and in the October 2010 letter from DOL-SOL that were
33
completely different from the amount allegedly communicated via Thompson and incorporated
into the SOR.
Fourth, the defendant does not sufficiently allege any affirmative misconduct on the part
of the United States. His allegations that the government “show[ed] extreme disregard for Mr.
Thompson’s claim” by “repeatedly fail[ing] to . . . assist with the third-party litigation,” Def.’s
Reply at 8, are of no import because, as discussed above, the defense of estoppel is unavailable
with respect to these claims. Moreover, the United States’ failure to act is not “affirmative
misconduct.” See Morris Commc’ns, 566 F.3d at 192 (holding that the agency’s “three-year
silence,” though “egregious,” “does not constitute ‘affirmative misconduct’”); Green, 775 F.2d
at 970 (holding that “the government’s delay in providing a breakdown of [the beneficiary’s]
FECA benefits” did not “support a claim of estoppel” because “[a]lthough this delay may
constitute negligence by the government, it does not rise to the level of ‘affirmative misconduct’
required” for an estoppel defense).
In sum, the statutes and regulations governing the United States’ right of reimbursement
under the FECA should have and did put Eisenberg on ample notice of the fact that he should not
disburse the settlement funds without first correctly calculating the amount due to the United
States and obtaining approval of the SOR. Cf. Heckler, 467 U.S. at 65–66.16
c. Civil Conspiracy
Lastly, the defendant cannot state a counterclaim for civil conspiracy. The law is “widely
accepted that a plaintiff [may] bring suit for civil conspiracy only if he ha[s] been injured by an
act that was itself tortious.” Beck v. Prupis, 529 U.S. 494, 501 (2000) (citing 4 RESTATEMENT
(SECOND) OF TORTS § 876, Comment b (1977) (“The mere common plan, design or even express
16
For these reasons, the defendant’s request for discovery, which he argues “would be the best means to
allow [him] to uncover whether there was, in fact, affirmative misconduct,” Def.’s Reply at 8–9, is denied.
34
agreement is not enough for liability in itself, and there must be acts of a tortious character in
carrying it into execution.”); W. PROSSER, LAW OF TORTS § 46, at 293 (4th ed. 1971) (“It is only
where means are employed, or purposes are accomplished, which are themselves tortious, that
the conspirators who have not acted but have promoted the act will be held liable.”)). Thus, a
civil conspiracy claim requires the “performance of some underlying tortious act.” Exec.
Sandwich Shoppe, Inc. v. Carr Realty Corp., 749 A.2d 724, 738 (D.C. 2000) (quoting
Halberstam v. Welch, 705 F.2d 472, 479 (D.C. Cir. 1983)). “Consistent with this principle,” the
Supreme Court observed that “a conspiracy claim was not an independent cause of action, but
was only the mechanism for subjecting co-conspirators to liability when one of their member
committed a tortious act.” Beck, 529 U.S. at 503; see also Nader v. Democratic Nat’l Comm.,
567 F.3d 692, 697 (D.C. Cir. 2009) (“[C]ivil conspiracy is not an independent tort but only a
means for establishing vicarious liability for an underlying tort.” (quoting Hill v. Medlantic
Health Care Grp., 933 A. 2d 314, 334 (D.C. 2007))); Halberstam, 705 F.2d at 479 (stating that
civil conspiracy requires “an overt tortious act in furtherance of the agreement that causes injury”
and, “[s]ince liability for civil conspiracy depends on performance of some underlying tortious
act, the conspiracy is not independently actionable; rather, it is a means for establishing vicarious
liability for the underlying tort”).
Consequently, to establish a civil conspiracy claim, a plaintiff must adequately show an
underlying tort and the following elements: “(1) an agreement between two or more persons; (2)
to participate in an unlawful act, or a lawful act in an unlawful manner; (3) an injury caused by
an unlawful overt act performed by one of the parties to the agreement; (4) which overt act was
done pursuant to an din furtherance of the common scheme.” Halberstam, 705 F.2d at 477.
35
In light of the fact that Eisenberg cannot make out any of the other claims he alleges, he
cannot make out a claim for a civil conspiracy. See Executive Sandwich Shoppe, Inc., 749 A.2d
at 738 (finding that a “civil conspiracy claim premised on” a rejected “tort theory fails as a
matter of law for lack of an underlying tortious act”). Thus, allowing him to amend his
pleadings to add a civil conspiracy counterclaim would be futile.
C. United States’ Dispositive Motion
The United States seeks (1) “partial judgment on the pleadings,” pursuant to Federal Rule
of Civil Procedure 12(c), on the grounds that “the uncontested facts establish [Eisenberg]’s
liability for failure to reimburse the United States for amounts owed” to it under the FECA, and
(2) partial summary judgment, pursuant to Federal Rule of Civil Procedure 56 and Scott v.
Harris, 550 U.S. 372 (2007), “in favor of the United States for the total amount due according to
the statutory formula, plus costs.” Pl.’s Mot. at 1. Though somewhat confusing, it appears that
the United States does not seek judgment as a matter of law as to the amount of money it is
owed. See Pl.’s Mem. at 11 (“Plaintiff respectfully requests that this Court order enter judgments
in its favor against Defendant for the full amount of the refund due to the United States, plus
costs, and that the Court order the matter into discovery on the issue of the calculation of the
refund owed to the United States . . . .” (emphasis added)), ECF No. 26. But see id. at 9
(asserting, in a heading, that “the Court Should Enter Summary Judgment On All Remaining
Issues In Favor of Plaintiff”). Instead, the United States asserts that “[a]lthough it cannot be
disputed that OWCP disbursed $128,393.53 to Mr. Thompson, corroborated by a print-out of
OWCP’s official record of the amount disbursed, there are other variables in the statutory
formula that may change based upon discovery taken during the course of this action.” Pl.’s
Mem. at 3 n.1. Thus, the United States requests judgment as a matter of law “as to the issue of
36
liability,” arguing that the defendant’s Answer “admits to facts demonstrating his liability for
failure to reimburse the United States for the amounts paid under FECA, but appears to dispute
only the actual amounts owed.” Pl.’s Mem. at 4. Similarly, the United States requests a finding,
as a matter of law, that Eisenberg “is liable to the United States in the amount determined by the
statute and regulations,” arguing that “the formula for determining the amount of the refund is set
forth in FECA” and “a detailed explanation of the calculation of damages is set forth in the
Federal Regulations governing FECA.” Id. at 5–6.
After setting out the applicable legal standards, each of the United States’ requests are
addressed, seriatim.
1. Legal Standards
Federal Rule of Civil Procedure 12(c) authorizes a party to move for judgment “[a]fter
the pleadings are closed—but early enough not to delay trial.” A motion for judgment on the
pleadings is resolved essentially in the same manner as a motion to dismiss under Rule 12(b)(6)
for failure to state a claim upon which relief can be granted. Rollins v. Wackenhut Servs., 802 F.
Supp. 2d 111, 116–17 (D.D.C. 2011) (citing cases), aff’d, 703 F.3d 122 (D.C. Cir. 2012). In
deciding a motion brought under Rule 12(c), a court may not consider matters “outside the
pleadings” without converting the motion to one for summary judgment. FED. R. CIV. P. 12(d).
Without triggering the conversion rule, a court may consider “only the facts alleged in the
complaint, any documents either attached to or incorporated in the complaint and matters of
which [the court] may take judicial notice.” Mpoy v. Rhee, 758 F.3d 285, 291 n.1 (D.C. Cir.
2014) (quoting EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C. Cir. 1997)).
“Because a Rule 12(c) motion would summarily extinguish litigation at the threshold and
foreclose the opportunity for discovery and factual presentation, the Court must treat [the]
37
motion with the greatest of care . . . [,]” Rollins, 802 F. Supp. 2d at 117 (quoting Baumann v.
District of Columbia, 744 F. Supp. 2d 216, 221 (D.D.C. 2010)), “accept as true the allegations in
the opponent’s pleadings and accord the benefit of all reasonable inferences to the non-moving
party,” Stewart v. Evans, 275 F.3d 1126, 1132 (D.C. Cir. 2002) (internal quotation marks
omitted) (quoting Haynesworth v. Miller, 820 F.2d 1245, 1249 n.11 (D.C. Cir. 1987)).
If, on a motion under Rule 12(c), “matters outside the pleadings are presented to and not
excluded by the court, the motion must be treated as one for summary judgment under Rule 56.”
FED. R. CIV. P. 12(d); see also Vest v. Dep’t of the Air Force, 793 F. Supp. 2d 103, 112 (D.D.C.
2011); Dormu v. District of Columbia, 795 F. Supp. 2d 7, 17 n.4 (D.D.C. 2011); Strong–Fischer
v. Peters, 554 F. Supp. 2d 19, 22 (D.D.C. 2008).
Federal Rule of Civil Procedure 56 provides that summary judgment shall be granted “if
the movant shows that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a). The moving party bears the
burden to demonstrate the absence of a genuine issue of material fact in dispute, while the
nonmoving party must present specific facts supported by materials in the record that would be
admissible at trial and that could enable a reasonable jury to find in its favor. See Anderson v.
Liberty Lobby, Inc. (“Liberty Lobby”), 477 U.S. 242, 256–57 (1986); Allen v. Johnson, 795 F.3d
34 (D.C. Cir. 2015) (noting that, on summary judgment, the appropriate inquiry is “whether, on
the evidence so viewed, a reasonable jury could return a verdict for the nonmoving party”)
(internal quotation marks omitted); see also FED. R. CIV. P. 56(c), (e)(2)–(3). “[C]ourts may not
resolve genuine disputes of fact in favor of the party seeking summary judgment[,]” Tolan v.
Cotton, 134 S. Ct. 1861, 1866 (2014), and “[t]he evidence of the nonmovant is to be believed,
38
and all justifiable inferences are to be drawn in his favor,” id. at 1863 (quoting Liberty Lobby,
477 U.S. at 255).
2. Judgment on the Pleadings as to Eisenberg’s Liability
Despite Eisenberg’s repeated assertions that the United States may not be owed any
money at all, see supra note 3, it is undisputed that Thompson received FECA benefits from the
United States and that Thompson received a settlement award from a third-party. 17 The United
States is, therefore, indeed, owed money under § 8132 and, based on the pleadings, no genuine
issue of material fact exists with respect to Eisenberg’s liability for the money that the United
States is owed.
Section 8132 makes clear that, in the event of a third-party settlement related to a FECA
claim, the United States is entitled to reimbursement of funds it paid to the beneficiary for the
FECA claim. See 5 U.S.C. § 8132; Lorenzetti, 467 U.S. at 168 (“[A]n employee who receives
FECA payments is required to reimburse the United States for those payments, to a specified
extent, when he obtains a damages award or settlement from a third party who is liable to the
employee for his injuries.”); Gonzalez, 603 F. Supp. 2d at 141 (“[A] FECA beneficiary who
receives compensation through a third-party lawsuit must reimburse Labor for federal funds
already paid to the beneficiary as compensation for an injury.”). The amount of the
reimbursement is specified in the statute: the United States must be refunded “the amount of
compensation paid by the United States,” minus “the costs of suit and a reasonable attorney’s
fee[;]” “[h]owever, the beneficiary is entitled to retain, as a minimum, at least one-fifth of the net
amount of the money or other property remaining after the expenses of a suit or settlement have
17
Eisenberg has also acknowledged that Thompson received FECA funds in asserting that he set aside money
from the settlement with which to pay the United States, see Answer ¶ 14(c) (admitting that he has been willing to
provide the United States with $52,900.45, which has been set aside in his “Trust Account”).
39
been deducted; and in addition to this minimum and at the time of distribution, an amount
equivalent to a reasonable attorney’s fee proportionate to the refund to the United States.” 5
U.S.C. § 8132.
Additionally, § 8132 is unambiguous: “No . . . 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.” 5 U.S.C. § 8132; see
Lorenzetti, 467 U.S. at 171 n.2 (“Section 8132 further provides that no person shall make
distribution to an employee pursuant to a damages judgment or settlement without first satisfying
the United States’ reimbursement interest.”). Courts have recognized that “this language creates
a lien on the recovery” such that “[a]n attorney . . . who receives settlement from a third party
tortfeasor . . . has an explicit duty to reimburse the federal government before paying his clients.”
Limbs, 524 F.2d at 803. Accordingly, “[a]ny person who deals with funds against which the
government has a lien under section 8132 is . . . liable to the United States for conversion.”
Green, 775 F.2d at 970 (citing Limbs, 524 F.3d at 803).
Indeed, Eisenberg admits, as asserted in the Complaint, that “Section 8132 . . . requires
that the beneficiary’s counsel ensure that the United States is reimbursed, in satisfaction of its
interest, before distributing any proceeds from the settlement to the beneficiary.” Compl. ¶ 12;
Answer ¶ 12 (“Admit.”). Eisenberg also admits that he was jointly and severally obligated, with
Thompson, “to refund” the United States “prior to the disbursement of any settlement funds to
Mr. Thompson and prior to the payment of any attorney’s fees,” as asserted in the Complaint.
Compl. ¶ 13; Answer ¶ 13 (disputing only the “amount owed”); see also id. ¶ 17 (admitting “in
part as to the definition of § 8132” the United States’ assertion that “[a] violation of Section 8132
establishes an attorney’s joint and several liability for reimbursement owed to the United States,”
40
Compl. ¶ 17); Def.’s Mem. at 24 (“Generally speaking, the Government is entitled to, by law,
seek remuneration from both Defendant and Third-Party Defendant.”); Def.’s Proposed
Counterclaim ¶ 18 (“5 U.S.C. § 8132 holds that both the attorney, e.g., Defendant Eisenberg, and
the OWCP recipient, e.g., Defendant Thompson, in these matters can be jointly and severally
liable for collection of any relevant moneys . . . .”).
While Eisenberg, generally, denies “that [he] failed to reimburse the United States in
satisfaction of its interest, either before or after the distribution of proceeds to Mr. Thompson,”
Answer ¶ 14, he does not directly dispute the United States’ assertion that, “[u]pon receiving the
$675,000 from the settlement, Mr. Eisenberg distributed the proceeds to Mr. Thompson, and
upon information and belief, paid himself an attorney’s fee,” Compl. ¶ 14; Answer ¶ 14. In an
answer to a complaint, “[a] denial must fairly respond to the substance of the allegation,” FED. R.
CIV. P. 8(b)(2), and “[a]n allegation—other than one relating to the amount of damages—is
admitted if a responsive pleading is required and the allegation is not denied,” FED. R. CIV. P.
8(b)(6). Additionally, Eisenberg “admits that he has not provided Plaintiff with any additional
funds,” Answer ¶ 15, or, for that matter, any funds at all, see id. ¶¶ 14–15 (asserting that the
“Plaintiff has frustrated Mr. Eisenberg’s attempts to pay Plaintiff’ and that he “is duty bound to
maintain the . . . funds [that have been set aside] in his Trust Account”); Def.’s Mem. at 6 n.7
(noting that “he [Eisenberg] did not send them [DOL-SOL] a check, i.e., payment”).
Accordingly, based on the pleadings, it is undisputed that Eisenberg is liable to the
United States for whatever amount of money the government is owed under the FECA, and the
United States is entitled to judgment as a matter of law on the issue of Eisenberg’s liability.
In opposition to the United States’ motion, aside from those arguments which the Court
has already rejected, Eisenberg argues that “[n]othing in § 8132 prohibits an attorney [from]
41
distributing moneys in a Third-Party Suit before it distributes said money to [the] Government; §
8132 only requires the assurance of satisfaction which Mr. Eisenberg he did [sic] in good faith
by placing it in his trust account.” Def.’s Mem. at 3 (emphasis in original). By Eisenberg’s own
admission in his papers, however, he did nothing to assure the satisfaction. Eisenberg asserts
that “it was not incumbent upon [him] to proactively reach out to DOL regarding a possible
subrogation payment,” Def.’s Mem. at 6 n.7, and claims that he relied on Thompson to inform
him of the proper amount of reimbursement due to the United States, based on Thompson’s oral
conversation with DOL, id. at 6 n.8. Eisenberg further admits that he and Thompson “were
concerned that the number [the amount of benefits paid to Thompson by DOL] was changing
given the continuing payment of OWCP benefits and the status of the various appeals Mr.
Thompson had with OWCP.” Id. Thus, despite his concern that “the number was changing,”
and his status as a FECA beneficiary’s attorney, Eisenberg nonetheless set aside an amount of
money allegedly told to him by his client, who had obtained this information orally from a DOL
representative. 18 This conduct does not establish assurance. Cf. Heckler, 467 U.S. at 65 (finding
respondent’s reliance on advice it received regarding the computation of its entitlement to federal
funds “undermined because the advice . . . was oral”).
Moreover, Eisenberg set aside a particular amount, calculated based on total OWCP
disbursements to Thompson of $70,533.93, see June 9, 2011 Letter, even though this amount
conflicted not only with evidence in the record of the third-party lawsuit, see Wackenhut, Rios
Decl. ¶ 5 (attesting to disbursement amounts of $94,261.33 in disability compensation and
$29,261.33 for medical treatments as of June 6, 2009), but also written evidence provided to him
18
Eisenberg appears to blame the agency for not “redirect[ing] Mr. Thompson, a beneficiary who is
represented by counsel, . . . [to] have him have Mr. Eisenberg contact the Agency.” Def.’s Mem. at 19–20. Any
fault in putting Thompson in the role of ascertaining the amount of reimbursement owed to the government rests
with Eisenberg rather than the government, however.
42
by Thompson, see October 14, 2010 Email (forwarding copy of October 8, 2010 letter and
attached payment history report); October 8, 2010 Letter (attached history report showing a total
disbursement amount of $94,261.33 as of June 6, 2009).19
Eisenberg’s additional arguments in opposition to the United States’ motion are also
unavailing. Eisenberg argues that, because he disbursed the settlement proceeds to Thompson,
collecting money now from Eisenberg amounts to (1) “an unconstitutional tax for representing”
Thompson in the third party lawsuit, (2) “a taking of personal property without compensation,”
and (3) “a taking of his liberty by enslaving Mr. Eisenberg to work for the Government to
prosecute the matter.” Def.’s Mem. at 25–26. The money in question belongs to the United
States and Eisenberg had a duty to preserve funds from the settlement to satisfy the United
States’ ownership interest. Therefore, the fact that Eisenberg is liable for the money is in no way
“fundamentally inequitable, unjust and unfair,” Def’s Mem. at 4, even though Eisenberg avers
that he no longer possesses the money.
3. Summary Judgment as to Calculation of Refund
For the foregoing reasons, the United States is also entitled to judgment as a matter of
law on the manner in which the amount owed is calculated. Section 8132 and the related FECA
regulations set forth exactly “[h]ow much of any settlement or judgment must be paid to the
United States,” 20 C.F.R. § 10.712, and how much the FECA beneficiary is entitled to keep, see
id. § 10.711. The amount of money owed to the United States must be determined by strict
adherence to the FECA statute and regulations.
19
Eisenberg argues that the information provided in Wackenhut “was not up-to-date as of November 11,
2010, the time of the settlement.” Def.’s Mem. at 21. He asserts that “[d]uring the course of the litigation with
Wackenhut, Mr. Thompson was attempting to appeal and obtain OWCP benefits,” and “[t]he parties were concerned
that the calculus had changed in the 11 months between these two events.” Id. These assertions indicate that, if
anything, the disbursement amount would have increased and, thus, in no way explains the fact that Eisenberg
calculated and reported a lower disbursement amount on the SOR.
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The specific amount owed, however, is disputed. While DOL has stated in multiple
letters that OWCP paid $128,393.53 in compensation to Thompson, see, e.g., July 19, 2011
Letter; August 16, 2011 Letter; October 4, 2011 Letter, a different amount was presented in the
Wackenhut suit and earlier correspondence from DOL, see Wackenhut, Rios Decl. ¶ 5; October
8, 2010 Letter at 2–6 (attached report of “Compensation Payment History”). Thus, discovery is
necessary to determine exactly how much money the government disbursed to Thompson for his
FECA claim and how exactly to calculate, under the applicable statutes and regulations, the
amount owed to the United States. 20 Additionally, a determination on costs is premature.
Accordingly, the parties will be directed to confer and submit to the Court a proposed
schedule for conducting the limited discovery necessary to resolve the issues remaining in the
Complaint and the Third-Party Complaint.
III. CONCLUSION
For the foregoing reasons, Eisenberg’s Motions for Leave to File Counterclaim Against
the United States of America, ECF No. 62, and Opposed Motion to Amend Answer, ECF No. 86,
are DENIED. The United States’ Motion for Partial Judgment on the Pleadings and for Partial
Summary Judgment, ECF No. 26, is GRANTED IN PART and DENIED IN PART.
Specifically, the government’s motion is granted as to the issue of Eisenberg’s liability under 5
U.S.C. § 8132 and as to how the amount of money owed to the United States is to be calculated.
20
Eisenberg’s assertion that a certain amount of the money “may relate to an ‘overpayment’ issue not a
‘subrogration’ matter,” see Def.’s Mem. at 25, appears to pertain to the amount owed and is best addressed after
discovery. Additionally, to the extent that Eisenberg suggests that any dispute over the amount should be resolved
first by the agency, rather than the Court, see Def.’s Mem. at 2–3 n.1, given the procedural posture of the case, the
availability of administrative review is uncertain. That said, the United States notes that “[t]he Employees’
Compensation Appeals Board[] . . . is the independent administrative review body within DOL that has the statutory
authority to review actions of OWCP under the FECA.” Pl.’s Mem. at 6. Thus, if the parties agree that an
administrative resolution of the issue is available and proper, they should file an appropriate motion with the Court.
44
This motion is denied to the extent that it seeks an entry of a judgment for the total amount of
money sought in the Complaint, and as to the request for costs.
An Order consistent with this Memorandum Opinion will be contemporaneously issued.
Date: December 15, 2015
Digitally signed by Hon. Beryl A. Howell
DN: cn=Hon. Beryl A. Howell, o=U.S. District Court for
the District of Columbia, ou=United States District
Court Judge,
email=howell_chambers@dcd.uscourts.gov, c=US
Date: 2015.12.15 12:03:27 -05'00'
__________________________
BERYL A. HOWELL
United States District Judge
45