PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

JAMES L. HANAUER,
Plaintiff-Appellee,

v.
                                                                    No. 95-2499
ROBERT B. REICH, SECRETARY OF
LABOR,
Defendant-Appellant.

Appeal from the United States District Court
for the Western District of Virginia, at Roanoke.
Jackson L. Kiser, Chief District Judge.
(CA-94-668-R)

Argued: March 8, 1996

Decided: May 6, 1996

Before HAMILTON and WILLIAMS, Circuit Judges, and
WILLIAMS, Senior United States District Judge for the
Eastern District of Virginia, sitting by designation.

_________________________________________________________________

Vacated and remanded by published opinion. Judge Hamilton wrote
the opinion, in which Judge Williams concurred. Senior Judge Wil-
liams wrote a concurring and dissenting opinion.

_________________________________________________________________

COUNSEL

ARGUED: Irene Marietta Solet, Civil Division, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C., for Appellant.
Charles Robinson Allen, Jr., Roanoke, Virginia, for Appellee. ON
BRIEF: Frank W. Hunger, Assistant Attorney General, Robert P.
Crouch, Jr., United States Attorney, Michael Jay Singer, Civil Divi-
sion, UNITED STATES DEPARTMENT OF JUSTICE, Washington,
D.C., for Appellant.

_________________________________________________________________

OPINION

HAMILTON, Circuit Judge:

James L. Hanauer, a former federal employee receiving benefits
under the Federal Employees' Compensation Act, 5 U.S.C. §§ 8101-
93 (FECA), brought this action against Secretary of Labor Robert
Reich (the Secretary) challenging the Secretary's refusal to consider
Hanauer's request to receive his remaining FECA benefits in a lump
sum. The district court determined that the Secretary violated a clear
statutory mandate in FECA requiring individual adjudications of
requests for lump-sum payment of benefits. Accordingly, the district
court remanded the case to the Secretary for an individualized adjudi-
cation of Hanauer's request. The Secretary appeals. Concluding that
FECA does not contain a clear statutory mandate requiring an individ-
ual adjudication of Hanauer's request for lump-sum payment of his
remaining benefits, we vacate the district court's decision and remand
for the district court to dismiss for lack of subject matter jurisdiction.

I.

On June 12, 1986, while acting in the course of his employment
with the National Park Service, Hanauer suffered a permanent and
disabling injury. Since that date, he has been receiving periodic FECA
wage-loss benefits.

In 1994, Hanauer requested that the Secretary pay his remaining
benefits in a lump sum pursuant to 5 U.S.C. § 8135(a), which gives
the Secretary discretion to order payment of wage-loss benefits and
other benefits in a lump sum if, inter alia, the beneficiary is about to
become a nonresident of the United States. Hanauer asserted that he
intended to move to Canada. The Secretary summarily denied the
request, relying on 20 C.F.R, § 10.311, which provides that lump-sum

                     2
payment of wage-loss benefits will no longer be made. Hanauer then
brought this action seeking a declaratory judgment that 20 C.F.R.
§ 10.311 is void because it violates 5 U.S.C.§ 8135(a). Hanauer also
sought an order requiring the Secretary to pay his remaining benefits
in a lump sum. The Secretary moved to dismiss for lack of subject
matter jurisdiction, or, in the alternative, for summary judgment.

The district court concluded that it had subject matter jurisdiction
and held that Hanauer was entitled to an individualized determination
of his request for lump-sum payment of his remaining benefits.
Accordingly, the district court remanded the case to the Secretary to
conduct such an individualized determination. The Secretary appeals.

II.

Before turning to the merits of this case, we pause briefly to con-
sider whether the district court's order is final and therefore subject
to appellate review. We have jurisdiction over appeals from final
decisions of district courts. 28 U.S.C. § 1291. A district court's order
remanding a case to an administrative agency is usually not a final,
appealable decision under 28 U.S.C. § 1291. See Culbertson v. Secre-
tary of Health & Human Servs., 859 F.2d 319, 323 (4th Cir. 1988).
But if a district court order remanding a case to an administrative
agency will be effectively unreviewable after a resolution of the mer-
its, the order is a final decision for purposes of 28 U.S.C. § 1291. See
Travis v. Sullivan, 985 F.2d 919, 922 (7th Cir. 1993); cf. Culbertson,
859 F.2d at 323 (holding that the court had jurisdiction over an appeal
from an order remanding a case to an agency because the order "oper-
ate[d] as a final denial of [a party's] claim").

The decision on appeal here is the district court's order remanding
this case to the Secretary for an individualized determination of Han-
auer's request for lump-sum payment of his remaining benefits. This
order will be unreviewable after the Secretary's decision on remand,
because the Secretary's decision "allowing or denying a payment
under [FECA] is . . . final and conclusive for all purposes" and "not
subject to review . . . by a court by mandamus or otherwise." 5 U.S.C.
§ 8128(b). Therefore, the district court's order remanding this case to
the Secretary is final and immediately appealable for purposes of 28
U.S.C. § 1291.

                    3
Having concluded that the district court's order is final and imme-
diately appealable, we proceed to consider the Secretary's argument
that the district court did not have jurisdiction to review the Secre-
tary's refusal to pay Hanauer his remaining benefits in a lump sum.

III.

Courts will decline to review agency actions only upon a showing
that Congress clearly intended to restrict access to judicial review. See
Lindahl v. Office of Personnel Management, 470 U.S. 768, 778
(1985). Here, the Secretary argues that 5 U.S.C.§ 8128(b) manifests
Congress' clear intent to bar judicial review. That section provides:

          The action of the Secretary or his designee in allowing or
          denying a payment . . . is--

          (1) final and conclusive for all purposes and with
          respect to all questions of law and fact; and

          (2) not subject to review by another official of the
          United States or by a court by mandamus or otherwise.

5 U.S.C. § 8128(b).

The Supreme Court has described § 8128(b) as an example of the
unambiguous and comprehensive language that Congress uses when
it "intends to bar judicial review altogether." Lindahl, 470 U.S. at
779-80 & n.13. But even when the statutory language bars judicial
review, courts have recognized that an implicit and narrow exception
to the bar on judicial review exists for claims that the agency
exceeded the scope of its delegated authority or violated a clear statu-
tory mandate. See, e.g., Staacke v. United States Secretary of Labor,
841 F.2d 278, 281 (9th Cir. 1988). This exception was first recog-
nized in Leedom v. Kyne, 358 U.S. 184 (1958).

In Kyne, the National Labor Relations Board certified a collective
bargaining unit consisting of both professional and nonprofessional
employees. This certification was in direct conflict with a provision
of the National Labor Relations Act (NLRA). The president of a labor

                      4
organization brought suit against members of the Board in district
court, asserting that the Board had exceeded its statutory authority.
The Board argued that the NLRA's provisions establishing judicial
review of certain Board actions in the court of appeals indicated Con-
gress' intent to bar review of any Board action in the district court.
The Supreme Court disagreed, holding that the district court had juris-
diction "to strike down an order of the Board made in excess of its
delegated powers and contrary to a specific prohibition in the
[NLRA]." Id. at 188.

Although we have relied on the Kyne exception to allow challenges
to agency actions on the ground that they exceeded the agency's dele-
gated authority, see, e.g., Champion Int'l Corp. v. United States EPA,
850 F.2d 182, 185-86 (4th Cir. 1988), we have not previously consid-
ered the applicability of the Kyne exception to § 8128(b). Other
courts, however, have recognized that the Kyne exception applies to
§ 8128(b). See, e.g., Staacke, 841 F.2d at 281 (citing Kyne and hold-
ing that "jurisdiction exists where [the Secretary of Labor] is charged
with violating a clear statutory mandate or prohibition"); see also
Brumley v. United States Dep't of Labor, 28 F.3d 746, 747 (8th Cir.
1994), cert. denied, 115 S. Ct. 734 (1995); Woodruff v. United States
Dep't of Labor, 954 F.2d 634, 639 (11th Cir. 1992); Owens v. Brock,
860 F.2d 1363, 1367 (6th Cir. 1988); but see Paluca v. Secretary of
Labor, 813 F.2d 524, 527-28 (1st Cir. 1987) (stating, without consid-
ering Kyne, that "[f]ederal employees have no right to appeal compen-
sation decisions on FECA statutory grounds"), cert. denied, 484 U.S.
943 (1987).

The district court held that the Kyne exception applies here. The
district court acknowledged that § 8128(b) generally bars judicial
review of any action by the Secretary denying a payment under
FECA. But the district court held that it had jurisdiction under the
Kyne exception to review the Secretary's denial of Hanauer's request
that his remaining benefits be paid in a lump sum, because Hanauer
claimed that this denial violated a clear statutory mandate in FECA.

The Secretary argues that the district court erred in holding that the
Kyne exception applies in this case. He relies principally on the deci-
sion of the Supreme Court in Board of Governors v. MCorp Finan-
cial, Inc., 502 U.S. 32 (1991). In MCorp, the plaintiff, a bank holding

                    5
company, sought to enjoin the Board of Governors of the Federal
Reserve System from prosecuting an administrative proceeding
against it for its alleged violation of a Board regulation. The applica-
ble banking regulatory statutes established a system for judicial
review of Board actions. Under this system, the court of appeals was
authorized to review final board orders. But no court had jurisdiction
to enjoin the Board's administrative proceedings. 1 Nevertheless, the
Fifth Circuit held that the district court had jurisdiction to enjoin the
administrative proceeding under the Kyne exception because the
plaintiff alleged that the Board's promulgation and enforcement of the
regulation exceeded its statutory authority. MCorp Fin., Inc. v. Board
of Governors, 900 F.2d 852, 857-58 (5th Cir. 1990).

The Supreme Court reversed, holding that the case differed from
Kyne in two ways. First, in Kyne, the Board's interpretation of the
NLRA "would wholly deprive the union of a meaningful and ade-
quate means of vindicating its statutory rights." MCorp, 502 U.S. at
43. In MCorp, however, the statutory scheme expressly provided the
plaintiff "with a meaningful and adequate opportunity for judicial
review of the validity [and application] of the . . . regulation" once the
Board issued a final order. Id. Second, in Kyne, the Board contended
that a statute providing for judicial review of certain board actions
implied, by its silence, a preclusion of review of the challenged
action. In MCorp, however, the statute clearly precluded judicial
review until the proceeding was completed. See id. at 44.

Like the statutory scheme at issue in MCorp,§ 8128(b) contains an
unambiguous preclusion of judicial review. But unlike the statutory
scheme at issue in MCorp, the statutory scheme at issue here does not
provide for judicial review of a final order of the Secretary.2 We con-
_________________________________________________________________
1 The applicable statute provided:

          [E]xcept as otherwise provided in this section no court shall have
          jurisdiction to affect by injunction or otherwise the issuance or
          enforcement of any notice or order under this section, or to
          review, modify, suspend, terminate, or set aside any such notice
          or order.

12 U.S.C. § 1818(i)(1).
2 Although FECA contains procedures for administrative review of
decisions denying the payment of benefits, see 5 U.S.C. § 8149, such

                     6
sider this distinction to be critical. Acceptance of the Secretary's
argument that § 8128(b) precludes district courts from considering
claims that the Secretary violated a clear statutory mandate would, in
the words of the Supreme Court, "wholly deprive[claimants] of a
meaningful and adequate means of vindicating [their] statutory
rights." See MCorp, 502 U.S. at 43. Mindful that we "cannot lightly
infer that Congress does not intend judicial protection of rights it con-
fers against agency action taken in excess of delegated powers,"
Kyne, 358 U.S. at 190, we conclude that MCorp does not compel us
to hold that § 8128(b) precludes district courts from considering
claims that the Secretary violated a clear statutory mandate.

This view of MCorp is in accord with the Ninth Circuit's interpre-
tation of MCorp. The Ninth Circuit has explicitly rejected the argu-
ment that under MCorp, a statute that generally precludes judicial
review necessarily precludes judicial review of claims that an agency
exceeded the scope of its delegated authority. See United States v.
Bozarov, 974 F.2d 1037, 1045 n.8 (9th Cir. 1992), cert. denied, 507
U.S. 917 (1993). Rather, when a claimant would have no other oppor-
tunity for meaningful and adequate judicial review of a claim that an
agency exceeded its statutory authority, a district court may still con-
sider such a claim, even if a statute precludes judicial review in gen-
eral. See id.

Our conclusion that the Kyne exception applies here does not end
our inquiry into whether the district court had jurisdiction over this
case. The Kyne exception allowed the district court to conduct a "cur-
sory review of the merits" of the case to determine whether the Secre-
tary violated a clear statutory mandate. See Champion, 850 F.2d at
186. When the statute in question is capable of two plausible interpre-
tations, the Secretary's decision to adopt one interpretation over the
_________________________________________________________________
procedures are not sufficient to allay the concerns that the Kyne excep-
tion is intended to address. In MCorp, the Court emphasized that the
plaintiff had a meaningful and adequate means of vindicating its claimed
statutory rights because it could eventually obtain judicial review in the
court of appeals. The purpose of the Kyne exception is to ensure that an
agency's violation of a clear statutory mandate is corrected. See Kyne,
358 U.S. at 190. The existence of administrative review within the
agency, while laudatory, cannot substitute for judicial review.

                     7
other does not constitute a violation of a clear statutory mandate.
Staacke, 841 F.2d at 282; cf. Chevron, U.S.A., Inc. v. Natural
Resources Defense Council, Inc., 467 U.S. 837, 843 & n.9 (1984)
(holding that when a statute is ambiguous, the court's inquiry is lim-
ited to determining whether the agency's interpretation of the statute
is reasonable, but recognizing that the judiciary is the final authority
on issues of statutory construction and that it must reject administra-
tive constructions that are contrary to clear congressional intent). If
a cursory review of the merits reveals that the Secretary did not vio-
late a clear statutory mandate, the case must be dismissed for lack of
subject matter jurisdiction. See Champion, 850 F.2d at 190. With
these principles in mind, we review the statutory framework of FECA
to determine whether the Secretary has violated a clear statutory man-
date.

IV.

FECA establishes a comprehensive and exclusive workers' com-
pensation program for federal employees. See 5 U.S.C. § 8116(c).
Pursuant to FECA, the government pays compensation for disability
or death of an employee resulting from personal injury sustained
while in the performance of official duty. 5 U.S.C.§ 8102(a). Benefits
provided under FECA include benefits for total or partial disability to
compensate for lost wages and "schedule awards" to compensate for
permanent loss, or loss of use, of a member or function of the body.3
See 5 U.S.C. §§ 8105-07. Under 5 U.S.C. § 8124(a), the Secretary:

          shall determine and make a finding of facts and make an
          award for or against payment of compensation . . . after--

          (1) considering the claim presented by the beneficiary
          and the report furnished by the immediate superior; and

           (2) completing such investigation as he considers neces-
           sary.
_________________________________________________________________
3 "Schedule awards" are paid pursuant to a compensation schedule,
which lists the compensation that will be awarded for loss of various
parts of the body, such as arms or legs, or for loss of various functions
of the body, such as hearing or vision. See 5 U.S.C. § 8107(c).

                    8
Claimants are entitled to hearings on their claims for compensation
before a representative of the Secretary. See 5 U.S.C. § 8124(b).

Once a decision to award benefits has been rendered, the amount
of benefits is calculated on the basis of the employee's monthly pay.
See 5 U.S.C. § 8105-07. These benefits ordinarily are paid in periodic
installments. See id. FECA provides, however, that the government's
obligation to pay permanent disability benefits:

          may be discharged by a lump-sum payment equal to the
          present value of all future payments . . . if--

          (1) the monthly payment to the beneficiary is less than
          $50 a month;

          (2) the beneficiary is or is about to become a nonresi-
          dent of the United States; or

          (3) the Secretary . . . determines that it is for the best
          interest of the beneficiary.

5 U.S.C. § 8135(a).

FECA authorizes the Secretary to promulgate rules and regulations
necessary for administration and enforcement of FECA. See 5 U.S.C.
§ 8149. Pursuant to this authority, the Secretary has promulgated reg-
ulations implementing the lump-sum payment provision of 5 U.S.C.
§ 8135(a). Before 1992, the regulation simply tracked the language of
the statute. See 20 C.F.R. § 10.311(a) (1992). But the Secretary
revised the regulation in 1992 to provide:

          (a)(1) In exercise of the discretion afforded by section
          8135(a), the Director has determined that lump-sum pay-
          ments [of wage-loss benefits] will no longer be made . . . .
          This determination is based on, among other factors:

          (i) The fact that FECA is intended as a wage-loss
          replacement program;

                      9
          (ii) The general advisability that such benefits be pro-
          vided on a periodic basis; and

          (iii) The high cost associated with the long-term bor-
          rowing that is necessary to pay out large lump sums.

20 C.F.R. § 10.311 (1995). The Secretary will continue to consider
requests for lump-sum payment of schedule awards. See 20 C.F.R.
§ 10.311(b) (1995).

Here, Hanauer was awarded FECA wage-loss benefits for a perma-
nent disability resulting from an injury that occurred in the course of
his employment. Subsequently, he decided to move to Canada and
sought payment of his remaining benefits in a lump-sum under
§ 8135(a)(2). The Secretary's delegate, a Department of Labor claims
examiner, see 20 C.F.R. § 10.130, summarily denied Hanauer's
request, stating that pursuant to 20 C.F.R. § 10.311, "lump-sum pay-
ments of wage-loss compensation are no longer considered." (J.A.
16). Hanauer then brought this action in the district court, alleging
that 20 C.F.R. § 10.311 is void because it conflicts with § 8135(a).

Referring both to § 8135(a) and to § 8124(a), the district court
determined that the summary denial of Hanauer's request for lump-
sum payment based on 20 C.F.R. § 10.311 violated a clear statutory
mandate in FECA requiring individualized adjudications of requests
for lump-sum payment of benefits. Our review of§ 8135(a) and
§ 8124(a) convinces us, however, that neither statute clearly mandates
individualized adjudications of requests for lump-sum payment of
benefits.

As Hanauer concedes, Congress' use of the word "may" in
§ 8135(a) confers discretion on the Secretary to decide whether to
grant a request for lump-sum payment of benefits. See Hicks v.
Cantrell, 803 F.2d 789, 794 (4th Cir. 1986). Hanauer argues, how-
ever, that § 8135(a), in conjunction with§ 8124(a), mandates that the
Secretary exercise his discretion by considering the merits of each
request for lump-sum payment. The Secretary, on the other hand,
argues that nothing in § 8135(a) or § 8124(a) prevents him from exer-
cising his discretion by promulgating a regulation providing for an

                    10
across-the-board denial of all requests for lump-sum payment of
wage-loss benefits.

The Secretary's argument constitutes an entirely plausible interpre-
tation of § 8135(a). See Fook Hong Mak v. INS, 435 F.2d 728, 730
(2d Cir. 1970) (Friendly, J.) ("The legislature's grant of discretion to
accord a privilege does not imply a mandate that this must inevitably
be done by examining each case rather than by identifying groups.").
Indeed, we have upheld the Secretary's similar interpretation of
another statute. See Hicks, 803 F.2d at 792-93. Hicks involved a pro-
vision of the Federal Supplemental Compensation Act, which created
a federally funded, state-administered benefit program for ex-service
members. The statute provided that a state "may" waive the recoup-
ment of overpayments from beneficiaries if it determined that speci-
fied conditions were met. Id. at 792. The Secretary of Labor
interpreted this statute to allow states to make individual waiver deter-
minations on a case-by-case basis, or to choose not to consider
requests for waivers and to require repayment from all individuals
who were overcompensated. We held that this interpretation of the
statute was reasonable, even though it allowed states to refuse to con-
sider all requests for waivers. Hicks, 803 F.2d at 792-93.4 Accord-
_________________________________________________________________
4 In Hicks, the Secretary had changed his interpretation of the statute
several times. We nevertheless concluded that under Chevron, "we must
accord his interpretation deference so long as that interpretation is rea-
sonable." 803 F.2d at 793-94. Subsequent to our decision in Hicks, the
Supreme Court clarified that courts should accord less deference to an
agency's statutory interpretation that conflicts with the agency's previous
interpretation of the same statute. See Pauley v. BethEnergy Mines, Inc.
501 U.S. 680, 698 (1991); INS v. Cardoza-Fonseca , 480 U.S. 421, 446
n.30 (1987). Accordingly, we have noted that to the extent Hicks holds
that we must accord "normal" Chevron deference to an agency's statu-
tory interpretation that conflicts with the agency's previous interpretation
of the same statute, "Hicks is no longer good law." Malcomb v. Island
Creek Coal Co., 15 F.3d 364, 369 n.5 (4th Cir. 1994).

The limitation on Hicks' holding does not affect our reliance on Hicks
in this case. Although the Secretary's refusal to consider requests under
§ 8135(a) for lump-sum payment of wage-loss benefits on a case-by-case
basis marks a change in policy, the Secretary's application of § 8135(a)
has not been so inconsistent as to render his interpretation of the statute

                    11
ingly, the Secretary's interpretation of § 8135(a) to allow him to
refuse to consider all requests for lump-sum payment of wage-loss
benefits is a plausible interpretation. Because the Secretary's interpre-
tation of the statute is plausible, it does not violate a clear statutory
mandate. See Staacke, 841 F.2d at 282. The Secretary's interpretation
of § 8124(a) is also plausible. The Secretary argues that § 8124(a)
only requires individual adjudications of an employee's entitlement to
benefits, and not of requests for lump-sum payment of benefits made
after the employee's entitlement to benefits has been established.

The language of § 8124(a) supports the Secretary's argument.
Under the statute, the Secretary must "determine and make a finding
of facts and make an award for or against payment of compensation
. . . ." 5 U.S.C. § 8124(a) (emphasis added). This language arguably
refers to determinations of a claimant's entitlement to payment of
benefits, rather than to determinations regarding the method of pay-
ment of those benefits. Additionally, the Secretary must consider "the
claim presented by the beneficiary and the report furnished by the
[employee's] immediate superior . . . ." 5 U.S.C. § 8124(a)(1)
(emphasis added). The emphasized language refers to the report that
the employee's "immediate superior" must make"[i]mmediately after
an injury to [the] employee" under 5 U.S.C.§ 8120. A request for
lump-sum payment of benefits made after the claimant's entitlement
to benefits has been established does not involve such a report. Thus,
it is at least plausible that § 8124(a) does not apply to requests for
lump-sum payment of benefits made after the claimant's entitlement
to benefits has already been established. Because the Secretary's
interpretation of the statute is plausible, it does not violate a clear stat-
utory mandate. See Staacke, 841 F.2d at 282.

V.

In summary, FECA does not contain a clear statutory mandate
requiring an individual adjudication of Hanauer's request for lump-
_________________________________________________________________
implausible. See Rust v. Sullivan, 500 U.S. 173, 186 (1991) (rejecting
"the argument that an agency's interpretation`is not entitled to deference
because it represents a sharp break with prior interpretations'" because
"`the agency, to engage in informed rulemaking, must consider varying
interpretations and the wisdom of its policy on a continuing basis'")
(quoting Chevron, 467 U.S. at 862, 863-64).

                      12
sum payment of his remaining wage-loss benefits. Accordingly, we
vacate the district court's decision and remand for the district court
to dismiss for lack of subject matter jurisdiction.

VACATED AND REMANDED WITH INSTRUCTIONS

WILLIAMS, Senior District Judge, concurring and dissenting:

I respectfully dissent. This case presents the question of whether
the Secretary of Labor, when confronted with a statute which allows
him to exercise broad discretion in reviewing requests to change the
method of previously awarded benefit payments, may instead decree
by mere regulation that he will exercise no discretion and will never
undertake a review specified by Congress in a detailed statute. The
Secretary, and now the majority, believes that such abdication of stat-
utory role is "prospective discretion" and does not clearly conflict
with the express language of FECA. Because I believe that the Secre-
tary's action violates the clear mandate of the statute, and because this
type of prospective discretion can only be defined as a euphemism for
abuse of discretion, I would affirm the district court. I join the majori-
ty's opinion in sections I, II and III but dissent from sections IV and
V.

Two separate analyses demonstrate that the district court should be
affirmed. The first, created by the Secretary's regulation and pressed
unintentionally in his argument on appeal, characterizes the request
for lump sum benefits as a new claim. The Secretary must make
detailed findings of fact under 5 U.S.C. § 8124 when presented with
a new claim but has not done so in this case. The second, using the
rubric of the majority, characterizes the lump sum petition as merely
a request for modification of benefits under § 8135. While the Secre-
tary may deny lump sum awards even when the conditions of § 8135
are met, the clear mandate of the statute indicates that he may only
do so after an actual, case-specific determination of the merits of the
request. I address each argument in turn.

I.

Was the plaintiff-respondent's lump sum request a new claim? Sec-
tion 8121, entitled "Claim," only dictates the form in which the claim

                     13
shall be presented, and a claim under FECA is nowhere otherwise
defined. Therefore one must extrapolate from the treatment of claims
in other sections, and, because subsection 8121(1) dictates that claims
must be submitted according to § 8122, it becomes necessary to
review that section.

Subsection 8122(a) begins by stating that "[a]n original claim for
compensation for disability or death must be filed within three years
after the injury or death" (emphasis added). One must interpret stat-
utes to avoid redundancy and superfluous language; therefore, the
adjective "original" must have some meaning. See, e.g., Westfarm
Associates v. Washington Suburban Sanitation Commission, 66 F.3d
669, 678 (4th Cir. 1995), citing Ratzlaf v. United States, 510 U.S. ___,
114 S.Ct. 655, 659 (1994). Redundancy exists unless an original
claim is not the only species of claim available. Although subsection
(b) refers to claims for latent disability, such claims are still original
claims, i.e., claims in the first instance. The drafters of § 8122 distin-
guished original claims and directed that the limitation periods of that
section apply to original claims only. Non-original claims must there-
fore exist.

Following the logic of the statute and of the Secretary's arguments,
a petition for a lump sum payment must be an archetypal non-original
claim. As counsel for the Secretary admitted at oral argument, the
Secretary would be required to process a lump sum claim through
§ 8124, with attendant findings of fact, if the lump sum claim were
made as part of the original claim. Counsel believes that such findings
were not required under the former regulation, which allowed § 8135
requests, and that belief was never challenged in the courts; appar-
ently, so long as the Secretary treated lump sums as a permissible
method of paying original claims, his interpretation was respected.
However, the Secretary has changed his view on lump sums. In so
doing, he reinforced the argument that a lump sum is sufficiently dis-
tinct to constitute a new claim.

The Secretary's proffered reason for his regulatory flip-flop is that
lump sum awards require long term borrowing which has now
become cost prohibitive. It is significant that§ 8135 does not mention
cost to the Department of Labor as an appropriate factor for the Secre-
tary's discretionary determination; rather, it is"the best interest of the

                     14
beneficiary" and not of the government for which Congress was con-
cerned. The Secretary formerly considered the appropriateness of
lump sums a mere accounting issue: more money over time versus
less money in one payment, a choice which should be neutral to the
Secretary after time-value calculations and the averaging effect of the
Secretary as a repeat player. When the Secretary held the position that
the choice was to him a mere accounting concept, basically a wash,
his non-claim position deserved some respect. No longer.

The Secretary has in effect made the argument that a lump sum is
not a mere allocation issue but an issue of whether to increase benefits
in some fashion. He argues that a lump sum leaves the Secretary with
less, and the beneficiary with more; otherwise, his purportedly
increased costs would not be prohibitive. Any request for lump sums
is thus a request for increase in benefits. The request is a fundamen-
tally different animal from the first claim and becomes, by the Secre-
tary's own logic, a new claim. Where a request for benefits in the first
instance is an original claim, then, a request for lump sum must be a
non-original claim. Hanauer has therefore filed a claim and deserves
a full § 8124 review; since the Secretary failed to perform one, his
action should be reversed and the judgment of the district court
affirmed.

II.

Does the majority's analysis survive clear-mandate scrutiny? In the
only pertinent statement of regulatory powers, FECA provides that
"[t]he Secretary of Labor may prescribe rules and regulations neces-
sary for the administration and enforcement of this subchapter." 5
U.S.C. § 8149 (emphasis added). By its decision, the majority allows
the Secretary to add two words to the highlighted Congressional lan-
guage: "or repeal."

A discussion of Hicks v. Cantrell is necessary. The statute in Hicks,
the Federal Supplemental Compensation Act ("FSCA"), provided:

          In the case of individuals who have received amounts of
          Federal supplemental compensation to which they were not
          entitled, the State is authorized to require such individuals
          to repay the amounts of such Federal supplemental compen-

                    15
          sation to the State agency, except that the State agency may
          waive such repayment if it determines that --

          (i) the payment of such Federal compensation
          was without fault on the part of any such individ-
          ual, and

          (ii) such repayment would be contrary to equity
          and good conscience.

See 803 F.2d at 791. Despite noting that the judiciary "must reject
administrative constructions that are contrary to clear Congressional
intent," the Court upheld the Secretary's decision. Id. at 792-93. The
majority believes that Hicks controls this case because in Hicks as
here, the statute used the permissive term "may" instead of the direc-
tive language "shall." Even the Secretary does not argue, however,
that "may" unambiguously allows his action. The task of interpreting
federal benefits statutes, which are always passed in the form of mul-
tiple subsections, requires a global understanding of the whole statute
and not a narrow focus on a single word. With such an understanding
of FECA, Hicks is instructive to but distinguishable from this case.

There are two key factors to distinguish the FSCA from FECA: the
general focus of the statutes and the eras in which they were passed.
The age of the statutes is a simple point but telling: whereas FSCA
in Hicks was passed in 1982, a time in which vast power and great
deference to federal agencies was well understood by the drafters,
§ 8135 of FECA became law in 1916, when agency supremacy was
unanticipated. See Act of Sept. 7, 1916, Pub. L. No. 64-266, § 14, 39
Stat. 742, 746*. The clear meaning of "may" in the 1916 statute is dis-
cretion after full review of a lump sum request, not discretion to avoid
review altogether. To believe otherwise would require unrealistic pre-
science of the drafters.

The discretionary overtones of "may" "can be defeated by indica-
tions of legislative intent to the contrary or by obvious inferences
_________________________________________________________________
*While the statute has been updated to modern form with subsection
numbers and increased dollar amounts, the key language and phrasing is
unchanged.

                    16
from the structure or purpose of the statute." United States v. Rodgers,
461 U.S. 677, 706 (1983). The structure and purpose of FECA distin-
guish this case from Hicks. FECA is about fair, efficient compensa-
tion for federal employees' injuries - FECA is a remedial statute,
which should be interpreted broadly in favor of beneficiaries in order
to give the statute full effect. The Internal Revenue Code, of which
FSCA was a part, focuses instead on payments to the government;
i.e., FSCA is remedial, if at all, in favor of the state. The "may" lan-
guage in the cited FSCA subsection was also a clause which provided
a narrow exception to what, even in that subsection, was the general
rule. FECA's § 8135, in contrast, is a free-standing subsection which
deals only with lump sums. And finally, the discretionary overtone of
"may" is not reinforced by the use of "shall" in various other places
in FECA, including § 8135 itself. To switch"may" for "shall" in
§ 8135 would remove all discretion from the decision but do so in
favor of the claimant, which Congress just as clearly did not mean to
do. As § 8135 is currently structured, "may" merely means that the
Secretary need not apply the section's factors robotically. "May" does
not, as the Secretary believes, entitle him to robotically use no discre-
tion at all - if Hicks stands for that proposition, the case is in error
and should be overturned.

In the end, a clear-mandate analysis comes down to the impact of
the statute, in subsection or entirely, on the judge. The statute clearly
mandates an individualized review. Although the language alone sus-
tains that view, the language is doubly strong when considered in
light of agency power in 1916. Because the Secretary violated the
clear mandate of the statute, the district court should be affirmed.

III.

Some general observations about the case are in order. First, this
Court has already proven that Hicks is not an impenetrable rule. See
Malcomb v. Island Creek Coal Co., 15 F.3d at 369 (no deference to
agency interpretation reversing, without explanation, a definition used
for 60 years). While the Secretary's about face on lump sum regula-
tions is not as egregious as the agency flip-flops of Malcomb, the fact
that he has changed his interpretation surely adds to the argument
against Hicks applicability here. Second, fundamental fairness sug-
gests that where Congress has created a mechanism for benefits and

                     17
a claimant meets the test, he should at least be entitled to some form
of review. If the Secretary merely increased stinginess toward lump
sums tenfold, he might be within his discretion; however, the Secre-
tary has gone beyond stinginess to arbitrariness. If the one-in-a-
million, perfect candidate for lump sum payments were suddenly to
appear, the Secretary would never know the injustice of applying his
policy to that ideal claimant - even perfect evidence would never be
reviewed. And third, it is remarkable that a mere regulation could in
effect repeal an eighty year old statute. Conservative judicial princi-
ples would never elevate a regulation above a Congressional act, even
were the regulation not questioned by the litigants. See Thomasson v.
Perry, ___ F.3d ___, 1996 WL 157451, *20 (April 5, 1996) (Luttig,
J., concurring) (validity of regulation is before the Court even when
not raised by the parties).

Section 8149 permits the Secretary to regulate only to enforce and
administer FECA, and enforcement of § 8135 by its regulatory repeal
is a nonsensical result. The "prospective discretion" of 20 CFR 10.311
is no discretion, and abuse of discretion could have no clearer name.
Regulatory repeal of § 8135 is a violation not only of § 8135 but of
§ 8149 as well. Whether considered from sound equitable principles
or the coldest parsing of the statute, the Secretary's action is simply
wrong.

As phrased by Hanauer's counsel at oral argument, this appeal may
well be "tilting at windmills" in a certain sense. It is undisputed that
were this court to remand the case for an individual review, and after
doing so the Secretary still denied lump sum benefits to the claimant,
the Court would have no jurisdiction under § 8128 to review his indi-
vidual case. But that fact only raises a larger point. Were a bevy of
Hanauers to return to district court with proof that the Secretary was
performing pro forma individual review under § 8135, but actually
meant to and did deny all requests, the Court's jurisdiction would
reattach. The Secretary cannot do sotto voce by perfunctory denials
what this dissent would deny him the power to do outright by regula-
tory fiat. If individual review is meaningless, as Congress's § 8135
has now been made meaningless, the clear mandate of FECA is vio-
lated.

I therefore dissent and would affirm the district court.

                     18
