This section contains the nature of the case and procedural background.

Lorenzetti (D) was a special agent for the F.B.I. and was injured in an auto accident while on official duties. Under FECA, federal employees are entitled to compensation for medical expenses, lost wages, and vocational rehabilitation. D received $1,970.81 from the FECA fund for his medical expenses and lost wages. D then sued the driver of the other car under Pennsylvania's no-fault Act. The trial court indicated that D was confined to recovering damages for noneconomic losses. D settled the case for $8,500, and the United States (P) sued D to be reimbursed for its FECA payments under a subrogation agreement. D refused to pay over the sums and commenced a declaratory action that the right to recovery and subrogation was to settlements for economic losses and not for losses recovered for pain and suffering. The district court granted summary judgment and the Court of Appeals held that P could not recover.

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