Peña Garcia v. Department of Labor

23-8066

Peña Garcia v. Department of Labor

In the

United States Court of Appeals

for the Second Circuit

August Term 2025

No. 23-8066

LUIS PEÑA GARCIA,

Petitioner,

v.

DIRECTOR, OFFICE OF WORKERS’ COMPENSATION PROGRAMS, UNITED

STATES DEPARTMENT OF LABOR, IMS INSURANCE COMPANY OF PUERTO

RICO, CALZADILLA CONSTRUCTION CORPORATION,

Respondents.

On Petition for Review from the United States Department of Labor

Benefits Review Board.

ARGUED: NOVEMBER 12, 2025

DECIDED: MARCH 5, 2026

Before: WALKER, CARNEY, and NARDINI, Circuit Judges.

Petitioner Luis Peña Garcia is a resident of Puerto Rico who

sustained work-related injuries in May 1994 that rendered him

permanently disabled. The United States Department of Labor found

that Peña’s former employer and its insurance carrier were required

to provide him with medical care and treatment pursuant to Section

7 of the Longshore and Harbor Workers’ Compensation Act, as

extended by the Defense Base Act. In March 2019, consistent with

Puerto Rico’s regulatory scheme for physician-recommended medical

marijuana, a doctor licensed in Puerto Rico suggested “edibles such

as cookies infused with specific dosage of medical cannabis” as

treatment for Peña’s chronic pain. Peña subsequently sought

reimbursement for these cannabis-infused products, but his request

was denied. He then petitioned the Department of Labor’s Office of

Administrative Law Judges for an order stating that doctor-

recommended medical cannabis treatments are covered under

Section 7, but he was again rebuffed on the ground that marijuana’s

classification as a Schedule I substance under the Controlled

Substances Act meant that the drug had no accepted medical use

under federal law. Peña appealed this denial to the Department of

Labor’s Benefits Review Board, which again declined to order

reimbursement of his cannabis-infused edibles. We agree with this

determination, and thus DENY Peña’s petition for review.

EMILIO F. SOLER, ESQ., San Juan, Puerto

Rico, for Petitioner.

WILLIAM M. BUSH, Attorney, Office of the

Solicitor (Jonathan L. Snare, Jennifer

Feldman Jones, and Sean Bajkowki on the

brief), U.S. Department of Labor,

Washington, DC, for Respondent Director,

Office of Workers’ Compensation Programs,

U.S. Department of Labor.

2

Manuel Porro Vizcarra, San Juan, Puerto

Rico, for Respondents IMS Insurance Company

of Puerto Rico and Calzadilla Construction

Corporation.

WILLIAM J. NARDINI, Circuit Judge:

Petitioner-Appellant Luis Peña Garcia (Peña) initiated the

present action to obtain an order from the United States Department

of Labor (“DOL”) requiring his former employer and its insurance

carrier to reimburse the costs of medicinal cannabis-infused edibles

under Section 7 of the Longshore and Harbor Workers’

Compensation Act (“LHWCA”), 33 U.S.C. § 907, as extended by the

Defense Base Act (“DBA”), 42 U.S.C. §§ 1651–1654. This Section

requires employers to “furnish” eligible workers injured on the job

with “medical, surgical, and other attendance or treatment . . . for such

period as the nature of the [covered] injury . . . may require.” 33 U.S.C.

§ 907(a). The DOL denied this request on the ground that marijuana

is classified as a Schedule I substance under the Controlled

Substances Act (“CSA”), 21 U.S.C. § 812, and thus cannot have any

accepted medical use as a matter of federal law. By a 2-1 vote, the

DOL’s Benefits Review Board affirmed this decision. We agree with

the determination of the Benefits Review Board, and therefore DENY

Peña’s petition for review.

3

I. Background

Peña is a resident of Puerto Rico who sustained work-related

injuries to his neck, back, and upper and lower extremities in May

1994, resulting in permanent total disability. On December 29, 1998,

the DOL found that Peña’s former employer and its insurance carrier

were required to provide him with medical care and treatment

pursuant to Section 7 of the LHWCA, as extended by the DBA. 1

On March 23, 2019, Dr. Michael Soler, a physician licensed to

practice in Puerto Rico, observed the following:

[Peña] has steadily responded well and with no

complications to edibles such as cookies infused with a

specific dosage of medical cannabis for over one year.

This seems to be one of the only treatments that best

works for [Peña] at night time due to its absorption and

dose doubling effect. Please expedite approval in order

to avoid discontinuation and patient’s decompensation.

App’x at 2. Dr. Soler’s request was consistent with Puerto Rican law,

which provides that “medical use of cannabis” can be recommended

to treat certain conditions established by the Commonwealth’s

Medical Cannabis Regulatory Board. 2017 P.R. Laws Act 42 (July 9,

2017); see also P.R. Regs. SALUD Reg. 9038.

On October 22, 2019, Peña asked IMS Insurance Company of

Puerto Rico (“IMS”), the insurance carrier for his former employer

The DBA extends the LHWCA to United States territories, including the

1

Commonwealth of Puerto Rico. See 42 U.S.C. § 1651(a).

4

Calzadilla Construction Corporation, to reimburse him for “payment

of medical cannabis-infused cookies and edibles as treatment for [his]

[chronic] pain and anxiety.” App’x at 2. IMS denied this request.

Peña then requested a hearing before the DOL’s Office of

Administrative Law Judges, seeking a determination that doctor-

recommended medical cannabis treatments are reimbursable under

the LHWCA. On September 15, 2020, an Administrative Law Judge

(“ALJ”) ruled that marijuana’s classification as a Schedule I substance

under the CSA necessarily entailed that the drug had no accepted

medical use under federal law. Consequently, the ALJ concluded,

marijuana could not be a “reasonable and necessary medical

treatment” under the LHWCA, and Peña’s employer and insurance

carrier were not obligated to reimburse him for his cannabis-infused

edibles. App’x at 3.

Peña appealed this denial to the DOL’s Benefits Review Board.

By a 2–1 vote, the Board affirmed the ALJ’s decision on the same

grounds. It also rejected Peña’s argument that Congressional

appropriations riders prohibiting the United States Department of

Justice (“DOJ”) from interfering with state laws facilitating marijuana

use rendered the drug a reasonable and necessary medical treatment.

A dissenting member of the Benefits Review Board reached the

opposite conclusion, reasoning that Dr. Soler’s recommendation that

Peña use marijuana products to treat his chronic condition created a

prima facie case for a compensable medical treatment, and that the

reference to “medical marijuana” in the appropriations riders was an

5

implicit acknowledgement that marijuana can have medical use. This

appeal followed. 2

II. Standard of Review

On this petition for review from the Benefits Review Board,

this Court reviews questions of law de novo and the ALJ’s findings of

fact for substantial evidence. G4S Int’l Emp. Servs. (Jersey), Ltd. v.

Newton-Sealey, 975 F.3d 182, 185–86 (2d Cir. 2020).

III. Discussion

Section 7 of the LHWCA requires employers to “furnish”

injured workers with “medical, surgical, and other attendance or

treatment . . . for such period as the nature of the [covered] injury . . .

may require.” 33 U.S.C. § 907(a). This Section and its implementing

regulations require reimbursement of “all reasonable and necessary

medical expenses” for eligible work-related injuries. Amerada Hess

2 Peña initially filed this petition for review in the U.S. Court of Appeals for

the First Circuit. See Dkt. No. 1 at 5–12. However, because review of DBA

decisions lies in “the judicial district wherein is located the office of the deputy

commissioner whose compensation order is involved,” Serv. Emps. Int’l, Inc. v.

Dir., Off. of Workers Comp. Program, 595 F.3d 447, 452 (2d Cir. 2010) (quoting 42

U.S.C. § 1653(b)), and the DOL’s Office of Workers’ Compensation Programs’

suboffice in New York adjudicated Peña’s claim, jurisdiction over Peña’s appeal

was proper in this Court. Accordingly, the First Circuit transferred the case to the

Second Circuit. See Dkt. No. 1 at 1–2.

6

Corp. v. Dir., Office of Worker’s Comp. Programs, 543 F.3d 755, 761 (5th

Cir. 2008). 3

However, the CSA makes it “unlawful knowingly to

manufacture, distribute, or possess with intent to distribute

controlled substances.” McFadden v. United States, 576 U.S. 186, 188

(2015) (citing 21 U.S.C. § 841(a)(1)). “[C]ontrolled substances,” for

purposes of the CSA, are divided into five schedules. See 21 U.S.C.

§ 812. A drug is classified in Schedule I if (1) it “has a high potential

for abuse,” (2) it “has no currently accepted medical use in treatment

in the United States,” and (3) “[t]here is a lack of accepted safety for

use of the drug or other substance under medical supervision.” Id. at

§ 812(b)(1). Congress currently lists marijuana as a Schedule I drug.

Id. at § 812(c), sched. I (c)(10).

Peña argues that medical marijuana is a reasonable and

necessary treatment for pain management and that he is thus entitled

to reimbursement for the drug under the LHWCA. However, this

argument is foreclosed by the plain text of the CSA, which states that

Schedule I substances, like marijuana, have “no currently 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). Indeed, in Gonzales v. Raich, the

Supreme Court held that marijuana’s classification as a Schedule I

substance amounts to an express Congressional finding that the drug

3 Other circuits and the Benefits Review Board itself have also adopted the

“reasonable and necessary” standard. See Bath Iron Works Corp. v. Preston, 380 F.3d

597, 610–11 (1st Cir. 2004); M. Cutter Co. v. Carroll, 458 F.3d 991, 993–94 (9th Cir.

2006); Romeike v. Kaiser, 22 BRBS 57, at *3 (1989).

7

has “no acceptable medical uses.” 545 U.S. 1, 27 (2005). Federal law

thus categorically bars marijuana from being deemed a reasonable

and necessary medical expense for purposes of the LHWCA.

Peña’s arguments to the contrary are unavailing. To start, Peña

contends that annual appropriations riders prohibiting the DOJ from

preventing states from implementing laws authorizing the use,

distribution, possession, or cultivation of medical marijuana amount

to congressional recognition of marijuana’s medicinal value. We

disagree. These riders govern the manner in which the DOJ spends

funds that Congress allocates; they amount only to a constraint on the

DOJ’s exercise of enforcement discretion. See, e.g., Consolidated and

Further Continuing Appropriations Act, 2015, Pub. L. No. 113-235

§ 538, 128 Stat. 2130, 2217 (2014). They do not change federal law with

respect to controlled substances and cannot be interpreted as having

implicitly repealed Congress’s statutory classifications of controlled

substances in the CSA. See Me. Cmty. Health Options v. United States,

590 U.S. 296, 315 (2020) (“This Court’s aversion to implied repeals is

especially strong in the appropriations context.”) (internal quotation

marks omitted). Further, the term “medical marijuana” is used in the

riders only to describe the nature of state laws, not to alter existing

federal law with respect to controlled substances. And finally, the

riders say nothing about marijuana’s classification as a reasonable

and necessary medical expense for purposes of federal workers

compensation programs like the LHWCA.

Peña also cites recent actions taken by both the President and

Congress as evidence of a more permissive federal policy with respect

8

to marijuana. However, these actions are unrelated to whether

marijuana can be reimbursed under the LHWCA. Specifically,

former-President Biden’s pardons of individuals convicted of

marijuana possession have no effect on statutory provisions

regarding the medical value vel non of marijuana. See Proclamation

No. 10467, 87 Fed. Reg. 61441 (Oct. 6, 2022). Similarly, Congress’s

enactment of a statute that facilitates research into medical marijuana

does not amount to a congressional finding of marijuana’s medical

value; at most, it signals a willingness to explore whether such

medical value exists. See Medical Marijuana and Cannabidiol

Research Expansion Act, Pub. L. No. 117–215, 136 Stat. 2257 (2022). In

addition, former-President Biden’s directive that the Secretary of the

Department of Health and Human Services and the Attorney General

initiate a review process for marijuana’s classification under federal

law, falls far short of a decision to actually reschedule marijuana

under the CSA. See Statement on Marijuana Reform, Administration

of Joseph R. Biden, Jr. (Oct. 6, 2022). So too does President Trump’s

December 18, 2025, Executive Order directing the Attorney General

to “take all necessary steps to complete the rulemaking process

related to rescheduling marijuana to Schedule III of the CSA in the

most expeditious manner in accordance with Federal law.” Exec.

Order No. 14370, 90 Fed. Reg. 60541, 60542 (Dec. 18, 2025). As the

Executive Order indicates, removing marijuana from Schedule I

cannot be done by executive fiat; it requires either an Act of Congress

or a duly completed administrative rulemaking proceeding. Neither,

to date, has occurred.

9

Peña argues that state law has trended toward reimbursement

of claims for medical marijuana in state worker’s compensation

regimes. Perhaps so. But state policies on medical marijuana bear no

relation to whether medical marijuana can be reimbursed under

federal law. The Supreme Court in Gonzalez acknowledged that

where federal regulations of controlled substances are more stringent

than state analogs, the restrictions imposed by federal law govern.

545 U.S. at 27−29. The mere existence of more permissive state

policies regarding medical marijuana therefore does not constrain

federal law. See id. at 29 (“The Supremacy Clause unambiguously

provides that if there is any conflict between federal and state law,

federal law shall prevail.”).

Finally, Peña argues that the CSA’s criminal prohibition on

aiding and abetting the distribution of controlled substances does not

implicate his request for reimbursement under the LHWCA. But

whether or not the CSA imposes criminal penalties for the

reimbursement of medical marijuana is irrelevant. All that matters is

marijuana’s classification as a Schedule I substance under the CSA,

which unequivocally provides, for purposes of federal law, that it has

no accepted medical use.

It may very well be the case that the federal government will at

some point—perhaps even in the near future—remove marijuana

from Schedule I of the CSA. But that is a decision for the political

branches of the federal government, not for the judiciary. This Court

is obliged to apply the law as it currently stands.

10

IV. Conclusion

Because marijuana is presently classified as a Schedule I

substance under the CSA, it cannot be treated as reimbursable

medical treatment for purposes of Section 7 of the LHWCA. We

therefore DENY Peña’s petition for review.

11