In the Matter of the Complaint Against ) June 25, 1996
)
JAMES L. DANIELS )
3674 Silsby Road )
)
at )
)
University Heights, OH 44118-3658 ) P.S. Docket No. PF 96-187
APPEARANCE FOR POSTAL SERVICE: Geoffrey A. Drucker, Esq.
Enforcement Division
United States Postal Service
475 L'Enfant Plaza, SW
Washington, DC 20260-1148
APPEARANCE FOR RESPONDENT: James L. Daniels
3674 Silsby Road
University Heights, OH 44116-3658
INITIAL DECISION
This proceeding arises out of a Complaint issued by the Reviewing Official of the United States Postal Service under the Program Fraud Civil Remedies Act of 1986, Pub. L. 99-509, 31 U.S.C. §§3801-3812, and 39 C.F.R. Parts 273 and 962. The Complaint was sent by certified mail to Respondent at the above address, and was receipted for on April 19, 1996. Respondent failed to file a Petition for Hearing within thirty (30) days, as required by 39 C.F.R. §962.3.
On June 6, 1996, the Postal Service moved for Judgment on the Merits and, by Order dated June 6, 1996, the Judicial Officer referred the Complaint to the undersigned Administrative Law Judge for processing in accordance with 39 C.F.R. §962.4.
Ruling on Motion to Accept Late Filing of Petition
On June 12, 1996, Mr. Daniels called the Recorder's Office to ask that he be allowed to file a late Petition. He was instructed to submit his explanation immediately and that I would decide whether to accept a late Petition. Mr. Daniels' Petition, with a letter of explanation, was received on June 20, 1996. The Postal Service has filed a Response To Motion To File Untimely Petition , in opposition.
Mr. Daniels acknowledges that he received the Complaint and letter of instruction by certified mail on April 19, 1996. The letter of instruction is less than one-half page long, and includes the following:
If you do not file a petition opposing the complaint within
30 days, you may lose your right to contest the complaint,
and the Judicial Officer of the Postal Service may issue
default judgment against you. In other words, IF YOU
FAIL TO RESPOND ON TIME, YOU MAY BE ORDERED
TO PAY THE POSTAL SERVICE A SUBSTANTIAL
AMOUNT OF MONEY AND MAY NOT HAVE ANY
BASIS FOR CONTESTING THE ORDER.
The procedures you must follow to file a petition are set
forth in the complaint and in the enclosed regulations (39
C.F.R. Part 962).
On April 29, 1996, Mr. Daniels wrote to Congressman Louis Stokes of Ohio. He discussed his employment history with the Postal Service, and various employee/management problems he has had since his original work-related injury in 1983. These include removal from employment by the Postal Service in 1992, which was upheld on appeal to the Merit Systems Protection Board (MSPB), and a ruling by the Department of Labor that he would be required to repay some $17,000 found to be an overpayment of workers' compensation. On page 4 of his letter, he referred to an "enclosed" letter he had received from the Postal Service (presumably the April 16, 1996 letter noted above, or possibly the Complaint itself), and asked the Congressman's help. Congressman Stokes' office sent an inquiry to the Postal Service, and received a reply dated May 14, 1996 stating that the inquiry had been referred to the Postal Inspection Service. A copy of this reply was sent to Mr. Daniels by the Congressman's office on May 16, 1996.
In accordance with the instructions provided to him, and the Rules of Practice, 39 C.F.R. §962.3, Respondent's Petition for Hearing was due by May 20, 1996, but he took no action until June 12, 1996, after he received notice of the General Counsel's request for a default judgment. In his June 12 letter, he states that he "put my trust" in the Congressman's office to "assist me in resolving this matter," but that has received no further response from them.
Late filing may be permitted on the basis of "excusable neglect," but it is Respondent's burden to show that the facts justify such a request. Park Corp. v. Lexington Insurance Co., 812 F.2d 894, 897 (4th Cir. 1987); ViAids Laboratories v. United States Postal Service, 464 F. Supp. 976, 982 (S.D.N.Y. 1979); Caruso v.
Drake Motor Lines, Inc., 78 F.R.D. 586, 588 (E.D. Pa. 1978); George Llama, P.S. Docket No. PF 94-119 (P.S.D. August 31, 1995). Respondent has not made such a showing.
It could hardly be stated more clearly in the April 16, 1996 certified letter, or in the Complaint itself, that Respondent must file his Petition for Hearing within thirty days. Mr. Daniels was certainly within his rights to request help from his Congressman, but he offers no persuasive reason why he could reasonably believe that this relieved him of the requirement to file a timely Petition. He says that he called the Congressman's office on May 6, 1996 to follow up on his letter, and was told by an assistant that "I should not do anything until I hear from her." He does not name this assistant, and provides no statement from anyone in the Congressman's office supporting his excuse for not filing a Petition. Even assuming someone on the Congressman's staff may have made such a statement, there is no reason to believe that she was speaking in reference to anything beyond Mr. Daniels' request to the Congressman, or that she was even aware of the requirement to file a Petition.
Respondent's Petition was filed more than three weeks late, and I find that
Respondent has not demonstrated that his failure to meet the filing deadline should
be excused.(1)
INITIAL DECISION
In the Complaint, the Reviewing Official alleges that Respondent is liable to the Postal Service for an assessment equal to twice the amount of twenty-two false claims (total - $26,891.28), and a civil penalty of $22,000 ($1,000 per false claim) under 31 U.S.C. §3802(a)(1). In accordance with 39 C.F.R. §962.4(a), this Initial Decision is based on the information contained in the Complaint.
FINDINGS OF FACT
General
1. Postal Service employees receive compensation for work-related injuries pursuant to the Federal Employees' Compensation Act (FECA). 5 U.S.C. Chapter 81; 39 U.S.C. §1005(c). This program is administered by the Office of Workers' Compensation Programs (OWCP), U.S. Department of Labor. 20 C.F.R. Part 10.
2. A postal employee who is injured on the job completes a Department of Labor Form CA-1, describing the accident and extent of injury, and submits the form to the employee's official superior. 20 C.F.R. §10.100(a). If the injury is likely to result in absence from work beyond one day, the official superior submits a report to OWCP. 20 C.F.R. §10.102.
3. To apply for disability compensation, the employee submits Department of Labor Form CA-7, with appropriate medical evidence. 20 C.F.R. §§10.104 and
10.106. The OWCP determines what benefits will be awarded. 20 C.F.R. §10.110.(2)
4. If the OWCP believes the disability to be temporary, the employee will be required to submit a Form CA-8 every two weeks. 20 C.F.R. §10.122. This form requires the employee to report any other employment, or self-employment, that he or she engaged in during the time period for which workers' compensation benefits are sought. If an employee "knowingly omits or understates any earnings or remuneration, the employee shall forfeit the right to compensation with respect to any period for which the affidavit or report was required." 20 C.F.R. §10.125(a);
5 U.S.C. §8106(b).
5. The Postal Service must reimburse the OWCP for any benefits paid to postal employees. 5 U.S.C. §8147.
Mr. Daniels' Case
6. Respondent James L. Daniels is an individual who resides at 3674 Silsby Road, University Heights, Ohio. He became a mail handler in the Cleveland, Ohio, Post Office on August 23, 1980.
7. On January 13, 1983, Mr. Daniels suffered an on-the-job shoulder injury, and filed a Department of Labor Form CA-1. Since that time, the OWCP has found Mr. Daniels, at various times, to be totally disabled, partially disabled, fit for limited duty, or fit for regular duty. The OWCP has paid him workers' compensation payments in accordance with its determination of his physical status.
8. From November 1989 to October 1991, the OWCP considered Mr. Daniels able to work for the Cleveland Post Office part-time, which he did. He was paid workers' compensation for the hours he allegedly could not work. Between these dates, Mr. Daniels submitted thirty-two (32) Forms CA-8. The last twenty-two of these forms, dated May 22, 1990 through October 8, 1991, were submitted within the six-year statute of limitations applicable to the Program Fraud Civil Remedies Act. 31 U.S.C. §§3808(a); 3803(d)(2)(B). These are the claims alleged in the Complaint to be false.
9. During the time period covered by all these forms, November 1989 through October 1991, Mr. Daniels was self-employed as a barber, but did not disclose this on any of the forms.
10. For the period not barred by the statute of limitations, the Postal Service paid $13,445.64 for the workers' compensation benefits paid by OWCP to Mr. Daniels.
11. Effective August 2, 1992, the Postal Service removed Respondent from its employ, based on his falsification of the workers' compensation claim forms.
Respondent appealed this action to the Merit Systems Protection Board (MSPB), but the removal was upheld by an MSPB Administrative Judge on December 12, 1992, and by the MSPB on May 3, 1993.
12. On March 12, 1993, an OWCP Hearing Representative determined that Respondent was required to repay $17,042.89 of the amount received by him during the period covered by the false Forms CA-8, and ordered that this amount be repaid at the rate of $150.00 per month.
CONCLUSIONS OF LAW
1. The definition of a "claim" under the Program Fraud Civil Remedies Act includes, "[a]ny request, demand, or submission -. . . made to an authority for . . . money . . .." 31 U.S.C. §3801(a)(3).
2. Submission of a Form CA-8 constitutes a claim for money, and each of the twenty-two forms covered by this Complaint constitutes a separate claim. Neldie E. Nelson, P.S. Docket No. PF-3 at 22 (I.D. November 16, 1990), a'ffd (P.S.D. August 19, 1992); Ronald W. Stuart, P.S. Docket No. PF-3 (I.D. May 17, 1990); Nina D. Newborn, P.S. Docket No. PF-64 at 6 (I.D. April 28, 1994).
3. Because Respondent is presumed to have been aware of his self-employment as a barber, and because the forms clearly require that this be reported on the forms, Respondent knew, or had reason to know, that he was submitting false claims. The claim forms were materially false because the information provided is used by the OWCP to determine whether workers' compensation benefits should be adjusted or terminated. 20 C.F.R. §10.303.
4. Respondent is, therefore, subject under the Statute, 31 U.S.C. §3802(a)(1), to a penalty of $5000 for each false claim. In the Complaint, the General Counsel has requested a $1,000 penalty for each claim. The statute also provides for an assessment up to twice the amount of the false claims. The amount of the claims in this case is the amount of workers' compensation payments made to Respondent during the time period covered by the false Forms CA-8 listed in the Complaint - $13,445.64. The General Counsel has requested the maximum assessment - $26,891.28.
5. Because Respondent failed to file a timely Petition in opposition to the Complaint, he is deemed to have admitted liability. 39 C.F.R. §962.4(a) and §962.15(a)(2) and (d).
6. The principal purposes of the statute are to allow government agencies to recover monetary losses resulting from false claims, including the costs of investigating and prosecuting, and to deter the filing of false claims against the Government. To have deterrent value, a penalty must go meaningfully beyond making the individual repay money that was wrongfully obtained.
7. In determining an appropriate penalty and assessment, it is permissible to consider, as a matter in aggravation, that the full amount of a false claim was more than is alleged in the Complaint, as in this case when the time period is cut off by the statute of limitations. Orfanos v. Department of Health and Human Services, 896 F. Supp. 23 (D.D.C. 1995).
8. It is also appropriate in this case to consider that Respondent has already
been ordered to repay $17,042.89 by the OWCP.
CONCLUSION
I find a penalty of $200.00 for each false claim, and an assessment equal to
the amount of the claims, for a total liability of $17,845.64, to be appropriate.
Bruce R. Houston Acting Chief Administrative Law Judge
2. If certain conditions are met, the Postal Service may continue to pay the employee normal wages and benefits ("Continuation of Pay") for not more than 45 days. 5 U.S.C. §8118; 20 C.F.R. §10.200. If this occurs, disability compensation from OWCP will begin once the period for Continuation of Pay expires.