                                                                           FILED
                           NOT FOR PUBLICATION
                                                                            FEB 13 2017
                    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS


                            FOR THE NINTH CIRCUIT


RICHARD TRUMAN SUTTON,                           No.   15-35722

              Plaintiff-Appellant,               D.C. No. 2:14-cv-01734-JPD

 v.
                                                 MEMORANDUM*
NANCY A. BERRYHILL, Acting
Commissioner of Social Security,

              Defendant-Appellee.


                   Appeal from the United States District Court
                     for the Western District of Washington
                 James P. Donohue II, Magistrate Judge, Presiding

                           Submitted February 9, 2017**


Before: GOODWIN, LEAVY, and SILVERMAN, Circuit Judges.

      Richard Sutton appeals the district court’s order affirming the Commissioner

of Social Security’s decision that he had been overpaid disability insurance

benefits (“DIB”) and was not entitled to a waiver of overpayment. Sutton

         *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
         **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
concedes that his DIB was properly offset by a state workers’ compensation benefit

for the period from January through April 2011 but challenges an offset for the

period from January through November 2010. We have jurisdiction under 28

U.S.C. § 1291. The Commissioner “bears the burden of proving the fact and

amount of overpayment.” McCarthy v. Apfel, 221 F.3d 1119, 1124 (9th Cir. 2000).

We review the Commissioner’s determination for substantial evidence. Id. at

1125. We reverse and remand.

      Sutton’s lump-sum Washington state permanent partial disability award was

not a periodic benefit subject to offset. See 42 U.S.C. § 424a(a) (an individual’s

DIB must be offset by any “periodic benefits on account of his or her total or

partial disability (whether or not permanent) under a workmen’s compensation law

or plan of the United States or a State” if the total of the two benefits exceeds a

certain amount); see also id. § 424a(b) (a lump-sum benefit is excluded from this

requirement “except to the extent that it is a commutation of, or a substitute for,

period payments”). This court has held that where state law provided that a lump-

sum award was intended to compensate for the economic loss of earning capacity,

the award was a periodic benefit subject to offset. Hodge v. Shalala, 27 F.3d 430,

432-33 (9th Cir 1994). Under Washington law, however, an award of workers’

compensation benefits for permanent partial disability is not wage compensation


                                           2
intended to cover a claimant’s lost earning capacity. See Willoughby v. Dep’t of

Labor & Indus. of the State of Wash., 57 P.3d 611, 616-17 (Wash. 2002); McIndoe

v. Dep’t of Labor & Indus., 26 P.3d 903, 908 (Wash. 2001). We therefore reverse

the district court’s judgment and remand with instructions to remand to the

Commissioner for a recalculation and refund of any offset against Sutton’s DIB.

      REVERSED and REMANDED.




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