Peña Garcia v. Department of Labor - Workers' Compensation

23-8066 Peña Garcia v. Department of Labor In the United Sta tes Co urt o f App eals f or the S econ d Circu it August Term 2025 No. 23-8066 L UIS P EÑA G ARCIA, Petitioner, v. D IRE CT OR, O FFICE OF W ORKERS ’ C OM PEN SAT IO N P ROGRA MS, U NITED S TATES D EPA RTMENT O F L A BOR, IMS I NS URANCE C OMPANY OF P UERTO R ICO, C ALZADIL LA C ONSTRUCTION C ORPOR AT ION, Respondents. On Petition for Rev iew from the United St ates Departmen t of Labor Benefits Review B oard. A RGUED: N O VEMBE R 12, 2025 D ECIDED: M AR CH 5, 2026 Before: W ALK ER, C AR N EY, and N AR DI NI, Circuit Ju dges. Petitione r Luis Peña Garc ia is a resident of Puerto Rico who su stained work - related inju ries in May 1994 that rendered him

2 permanently disabled. The United Sta tes Department of Labor found that Peña ’s former empl oyer and its insurance carrie r were required to provide h im with medical care and tre atment pursu ant to Section 7 of the Longshore and Harb or Workers’ Compen sation Act, as extended by t he Defense Base Act. I n March 2019, consiste nt with Puerto Rico’s regu latory scheme for physi cian - recommende d medical marijuana, a doc tor l icensed i n Puerto Rico suggeste d “edib le s su ch as cookies infused with spec ific dosage of medica l cannabis” as treatment for Peña’s chronic pain. Peña subseque ntly sought reimburs ement for these cannabis - infused products, but his request was deni ed. He then p etit ioned the Department of Labor’s O ffice of Administrative Law Judges for an orde r stating that doctor- recommen ded medical canna bis treatments are co vered under Section 7, but he was again re buffed on th e ground that marijuana’s classification as a Sch edule I substance under the Co nt ro lled Substances Act meant tha t the drug ha d no accepted med ical use under federal law. Peña appealed this denial to the Depart ment of Labor’s Benefits Review Board, w hich again declined to order reimburs ement of his cannabi s - inf use d edib les. We agree with this determination, and thus DENY Peña ’s petition for review. E MILIO F. S OL ER, E SQ., San Juan, Puerto Rico, fo r Petitioner. W ILLIAM M. B USH, Attorney, Office of th e Solic itor (Jonathan L. Snare, Jennifer Feldman Jones, and Sean Bajkow ki on t he brief), U.S. Depar tment of Labor, Washington, DC, for Respondent Director, Office of Workers’ C ompensation Program s, U.S. Department of La bor.

3 Manuel Porro Vizca rra, San Juan, Puert o Rico, for Respo ndents IMS In surance Co mpany of Puerto Rico a nd Calzadilla Constr uction Corporation. W ILLIAM J. N ARDINI, Circuit Judge: Petitione r - Appel lant Luis Peña Garc ia (Peña) initia ted the present action to obtain an order f rom the United States Department of Labor (“DOL”) requiring his fo rmer employer and i ts insurance carrier to reimburse the costs of med icin al cannab is - infu sed edible s under Section 7 of the Longsh ore and Har bor Worke rs’ Compensation Act (“LHWCA”), 33 U.S. C. § 907, as ex tended b y the Defense Base Act (“D BA”), 42 U.S.C. §§ 1651 – 16 54. Th is Se ction requires emp loyers to “furn ish” e ligib le wor ker s in jure d on t he job with “medical, s urgical, an d other at tendance or treatment. . . f or such period as the n ature of the [covered] injury. . . ma y require.” 33 U.S.C. § 907(a). The DOL denied th is request on the ground that marijuana is clas sif ied as a Schedule I substance under the Cont rolled Substances Act (“CS A”), 21 U.S.C. § 812, an d thus cannot ha ve any accepted med ical us e as a matter of fe deral law. By a 2 - 1 vo te, th e DOL’s Benefits Re view Boar d affir med thi s decision. We agree with the determi nation of the Be nefit s Review Board, and there fore DENY Peña ’s pet ition for re view.

4 I. Background Peña is a resident of Puerto Rico who su stained work - related injuries to his neck, back, and upper and lower extre mities in May 1994, resulting in per manent total disa bili ty. O n December 29, 1998, the DOL found that Peña’s for mer emplo yer and its insuran ce carrier w ere required to provide him with medical care an d treatment pursuant to Section 7 of the LHWC A, as e xtended by the D BA. 1 On March 23, 2019, Dr. Michael So ler, a physician licensed to practice in Puerto R ico, obser ved the following: [Peña] has steadi ly responde d well and with no complications to edi bles such as cookies infused w ith a specific dosage of medical cannabis for over one year. This seems to be one of the only treatm ents tha t best work s for [Peñ a ] at night t ime du e to its absorption and dose doubling effe ct. Please e xpedite app roval in order to avoid discont inuation and p atient’s dec ompensation. App’x at 2. Dr. Soler’s request was consis tent with Puerto R ica n law, which provide s th at “medi cal use of c ann abis” can be recommended to treat certain conditions established by the Commonw ealth’s Medica l Ca nnab is Regula tory Board. 2 0 17 P.R. Laws Act 42 (July 9, 2017); see also P.R. Regs. S ALUD Reg. 9038. On October 22, 2019, Pe ña asked IMS Ins urance Company of Puerto Rico (“I MS”), the insuran ce carrier for his former employer 1 The DBA extends the L HWCA to United States territor ies, inc lud ing the Commonwealth of Puerto Ri co. Se e 42 U.S.C. § 16 51(a).

5 Calzadilla Construc tion Corpor ation, to reimburse him for “pa yment of medical cannabis - infused cook ies and edibles as tr eatment fo r [his ] [chronic] pain and anxiety.” App’x at 2. IMS denied this request. Peña then re quested a hearing before the DOL’s Office of Administrative Law Judge s, seekin g a determin ation that docto r - recommen ded medical canna bis treatments are reim bursable under the LHWCA. On Se ptember 15, 20 20, an Administra tive Law Judge (“ALJ”) ruled that m arijuana’s class ification as a Schedule I sub stance under the CSA necessarily entailed t hat the drug had no acc epted medical use under f ederal law. Consequently, the ALJ concluded, marijuana could n ot be a “reason able and necessary medical treatm ent ” un der th e LHWCA, an d Peña’s employe r and insurance carrier w ere not obligated to reimbur se him for his cannab is -infuse d edible s. A pp’x at 3. Peña appealed this d enial to the DO L’s Benefits Revie w Board. By a 2 – 1 vote, the B oard affirmed the A LJ’s decision on the same grounds. It also rejected Peña’s ar gument that Congr essional appropriations riders pr ohibiting the U nited S tates Department of Justic e (“D OJ”) from interfering with state laws faci litat ing marijuana use rendered the d rug a reaso nable and necessary medical treatm ent. A d issenting member of the B enefits Rev iew Board reache d the opposite conclusion, reasoning that Dr. So ler’s recommenda tion that Peña use marijuana pr oducts to treat his chronic condition cr eated a prima facie c ase for a compensable med ical treatment, and th at the reference to “medic al marijuana” in the appr opriations riders w as an

6 implicit acknowledgement that marijuana can have medical use. Th is appeal followed. 2 II. Standard of Review On this pet itio n for review from the Be nefits Review Board, this Court reviews questions of law de no vo and the ALJ’s findings of fact for substantial evidence. G4S Int’ l Emp. Servs. (J ersey), Ltd. v. Newton-Sealey, 975 F. 3d 182, 185–86 (2 d Cir. 2020). III. Discussion Section 7 of the LHWCA requires employ ers to “furnish” injured workers wit h “medical, surgical, and other attendance or treatment . . . for such per iod as the nature of the [cove red] injury . . . may require.” 33 U. S.C. § 907(a). Th is Section and its imp lementing re gulati ons require reim bursement of “all reasonable and n ecessary medical expenses” for eligible work - related inj uries. Amera da Hess 2 Peña initially filed this petitio n for review i n the U.S. Cou rt of Appeals for the First Circuit. See Dk t. No. 1 at 5 – 12. However, because revie w of DBA decisio ns lies in “the jud icial distr ict wh erein is locat ed the o ffice o f the d eputy commissioner whose compensation or der is inv olved,” Serv. E mps. I nt’ l, In c. v. Dir., Off. o f Workers C omp. Prog ram, 595 F.3d 447, 452 (2d Cir. 2010) (quoting 42 U.S.C. § 1 65 3(b)), and the DO L’ s Office of Workers’ Compe nsati on Programs’ su b off ic e i n Ne w Yo rk adj u di ca te d Peña’s claim, jurisdictio n over Pe ñ a’s ap pe al was proper in this Court. Accordingly, the First C ircuit trans f err ed the c ase to th e Second Circuit. See Dkt. No. 1 at 1 – 2.

7 Corp. v. Dir., Off ice of Worker’ s Comp. Programs, 5 43 F.3d 7 55, 761 (5th Cir. 2008). 3 However, the CSA ma kes it “unla wful knowin gly t o manufac ture, d istr ibute, or poss ess with inte nt t o dis tribute controlled substance s.” McFadden v. Uni ted States, 576 U.S. 1 86, 188 (2015) (citing 21 U.S.C. § 841(a)(1)). “[C ]ontrolled substance s,” for purposes of the CSA, ar e divided into fiv e schedules. See 21 U.S.C. § 812. A drug is classified in Sche d ule I if (1) it “has a high potentia l for abuse, ” (2) it “has no currently accep ted medical use in treatment in the U nited S tates, ” and (3) “[t]her e is a lack of accep ted safe ty for use of the drug or ot her substance under medic al supervision. ” Id. at § 812(b)(1). Congress curr ently lis t s marijuana as a Schedule I drug. Id. at § 812(c), sched. I (c)(10). Peña argues that medical marijuana is a r easonable an d necessary t reatment for pain managem ent and that he is thus ent itled to reim bursement for the drug under the LH WCA. However, this argument is foreclos ed by the pla in text o f the CSA, which s tates that Schedule I substances, like marijuana, have “no current ly accepted medical use in treatment in the United States.” Id. at § 812(b)(1)(B); see also id. at § 812(c), sched. I (c)(10). In deed, in Gonzales v. Raic h, the Supreme Court hel d that marij uana’s class ification as a Schedule I substance amounts t o an express C ongressional finding that the drug 3 Other circuits a nd the Benefits Rev iew Board itself have also adopted the “reasonable and necessary” standard. See Bath Iro n Works Corp. v. Preston, 380 F.3d 597, 610 – 11 (1st Cir. 2004); M. C utter Co. v. Ca rroll, 458 F.3d 991, 993 – 94 (9th Cir. 2006); Romei ke v. K ais er, 22 BRBS 57, at *3 (198 9).

8 has “ no acceptable medic al use s.” 545 U.S. 1, 27 (2005). Federal law thus categorical ly ba rs marijuana from b eing deemed a reas onable and necessary medical expense for purposes of the LHWCA. Peña’s argument s to the contrary are unavailing. To star t, Peña contends that annual appropriations r iders prohibiting the DOJ from preventing state s fr om implementing laws authoriz ing the use, distribution, posses sion, or cultivation of medical mar ijuana amo unt to congressional recognit ion of marijuana’s medicinal va lue. We disagree. These ride rs govern the manner in which the DOJ spends funds that Congre ss allocates; they amount only to a constrain t on the DOJ’s exercise of enforcem ent discretion. See, e.g., Consolidated and Further Continuing Appropriations Act, 2015, Pub. L. No. 113 -235 § 538, 128 Stat. 2130, 2217 (20 14). They do not change federal la w with respect to controlled substances and cann ot be interpreted as having implic it ly repealed Congress’s statutory class ific atio ns of co ntrolle d substances in the CSA. See Me. Cmty. Health Optio ns v. Unite d States, 590 U.S. 296, 315 (20 20) (“This Court’s av ersion to implied re peals is especially strong in the appropriations context.”) (internal quo tation marks omitted). Furth er, the term “medic al marijuana” is used in the riders only to descri be the nature of state laws, not to alter e xistin g federal law with respect to contro lled substances. And f inally, the riders say no thing about marijuana’s cla ssification as a re asonable and necessary medical ex pense for purpose s of federal workers compensation pro grams like the LH WCA. Peña also ci tes recent actions taken by both the Pres ident and Congress as evi dence of a more permissive federal policy with respect

9 to marijuana. However, these ac tions are unrelat ed to wheth er marijuana can be reimbursed under the LHWCA. S pecifically, former- President Bi den’s pardons of indi viduals convict ed of marijuana possession have no effect on statutory pro visions regarding the medical value vel non of marijuana. See Procla mation No. 10467, 87 Fed. Reg. 61441 (Oct. 6, 2022). Similarl y, Congre ss’s enactment o f a sta tute th at facilita te s research int o medical marij uana does not amoun t to a congressional f inding of marijuana’s medical value; at most, it signals a willingness to explore whether such medic al va lue e xist s. See Medical M arijuana and Can nabidiol Research Expansion Act, Pub. L. No. 117 – 215, 136 Stat. 2257 (2022). In addition, former - President Bid en’s directive that the Secretary of the Department of Hea lth and Human Servi ces and the Attorney G eneral initiate a rev iew process for marijuana’s classification under fe deral law, falls far short of a dec ision to act ually reschedu le mar ijuana under the CSA. See Statement on Mar ijuana Reform, Admini stration of Joseph R. B iden, J r. (Oct. 6, 2 022). So t oo does President Trump’s December 18, 2025, Executive Order di recting the Attorney General to “take all necess ary steps to complete the rulemaking process related to reschedu ling marijuana to Sch edule III of the C SA in the most e xpe dit io u s m anner in accor dance wi th Federal law.” Ex ec. Order No. 14 370, 90 Fed. Reg. 60541, 60542 (D ec. 18, 2025). As the Executi ve Order indicat es, removing mari juana from Schedul e I ca nnot be done by executi ve fiat; it requires either an Act of Congress or a dul y completed administ rative rulemakin g proceeding. Neithe r, to date, has occurred.

10 Peña argues that state law has trended toward reimbu rsement of claims for medical marijuana in state wor ker’s compen sation regimes. Perhaps so. But state policies on medical marijuana bear no relati on to whether medical marijuana can be reimburse d under federal law. The Supreme Court in Gonzalez acknowled ge d that where federal regulatio ns of controll ed substances are mo re stringent than sta te ana logs, the restrictions im posed by federal law govern. 545 U.S. at 27 −29. The mere existence of mo re per mis siv e s tate policies regard ing medical mar ijuana th erefore does n ot constrain federal l aw. See id. at 29 (“The Supr emacy C lause un ambig uously provides that if there is any c onflict bet ween feder al and state la w, federal law shall pre vail.”). Fina lly, Peña argues that the CSA’s criminal prohibition o n aiding and abet ting the distribution of con trolled subst ances does not impli cate his request for rei mbursement under th e LHWCA. But whether or no t the CSA im poses criminal penalties for the reimbursement of medical mar ijuana is ir relevant. Al l that ma tters is marijuana’s classif ication as a Sche dule I substance un der the C SA, which unequivocally provides, for purpos es of feder al law, that it has no accepted medical use. It may very well be the case that the federal governm ent will at some point — perhaps even in t he near future — remove m arijuana from Schedule I of the CSA. But that is a de cision for the political branches of the fede ral government, not f or the judiciary. T his Co urt is obliged to app ly the law as it c urrently stands.

11 IV. Conclusion Because marijuana is presently classified as a Schedule I substance under th e CSA, it cannot be treated as reimbursable medical treatm ent for purpose s of Secti on 7 of t he LHWC A. We therefore DENY Peña ’s petition f or revie w.