MEMORANDUM AND ORDER
One of the definitions of “settlement” is “[t]o fix or resolve conclusively; to make or arrange for final disposition.” Black’s Law Dictionary 713 (abridged 5th ed. 1983). The “settlement” reached in these cases defies that definition. This Court is being asked, post-settlement, to resolve conclusively how the final disposition of this suit should appear. The problem is not the parties to the settlement disputing the meaning of settlement terms. Instead, the problem is a third party, previously unheard from, who now claims a right to the settlement proceeds. Because this Court believes this untimely claim would deny the plaintiffs to the original suit rights created by federal law, the lien imposed by the third party on the settlement proceeds is ordered to be removed.
TRAVEL OF THE CASE
Plaintiff, William Benders, a seaman, was injured in two separate accidents in 1985 aboard a research vessel, the Endeav- or, belonging to, or leased by, the University of Rhode Island (URI). Mr. Benders received medical services from URI and compensation from the Rhode Island Employees’ Compensation Fund. In 1988 Mr. Benders brought two suits in this Court against the Board of Governors for Higher Education (as the entity invested with legal title to all property under the control or custody of the University of Rhode Island) seeking damages for pain and suffering, lost wages, and medical expenses. Brought under admiralty and maritime laws, Mr. Benders’ claims asserted that his injuries were caused by URI’s negligence, the vessel’s unseaworthiness, and URI’s breach of obligation to provide prompt medical services. Plaintiff, Jean Benders, the wife of William Benders, brought a third suit for loss of consortium. Upon motion by the plaintiffs, with no objection from the defendant, the three suits were consolidated.
Following full discovery, the parties settled. Under the terms of settlement, the defendant was to pay the plaintiffs a lump sum of $200,000. After settlement, but before the funds were disbursed to the Benders, Frank Knight, as Administrator of the Rhode Island Employees’ Compensa*841tion Fund, placed a lien on the entire proceeds of the settlement, seeking, under R.I. Gen.Laws § 28-35-58,1 the value of medical benefits, as well as the compensation paid to William Benders. The Administrator asserts that Mr. Benders was in the employ of the state2 at the time of the accidents, and that URI and/or its liability insurer is a “third party” under R.I.Gen. Laws § 28-35-58; as the settlement was made with a “third party,” the Administrator claims the statutory right of reimbursement. The basis of Administrator Knight’s claim that URI is a “third party” is unclear. His Memorandum of Law does not indicate whether he is claiming that Mr. Benders was not an employee of URI (and thus the Board of Higher Education) at all, or whether because Mr. Benders’ workmen’s compensation was paid from the state fund for state employees, Mr. Benders is an employee of the state and not URI only for purposes of workmen’s compensation claims.
The plaintiffs moved to interplead Administrator Knight so that this Court could determine whether the Administrator is entitled to the lien, and if so, what portion of the settlement is subject to lien. The motion was granted by a United States Magistrate. The State of Rhode Island then appeared specially to object to the interpleader motion. The state asserted that it would not consent to be brought in as a party defendant and that the Eleventh Amendment to the United States Constitution3 barred the involuntary inclusion of the state in this suit. In a letter to counsel for Administrator Knight, this Court expressed its opinion that because the Administrator’s actions threatened to undo a settlement in federal court of a case brought under federal law, the Administrator could be inter-pled without violating the Eleventh Amendment. This Court offered the Administrator a chance to reply to the substance of the plaintiffs’ claims that the state had no right to a lien on the settlement funds.4 The Administrator then filed a Memorandum of Law.
ELEVENTH AMENDMENT
As the United States Supreme Court has indicated that questions of Eleventh Amendment immunity are jurisdictional and thus can be raised at any time during a lawsuit, Edelman v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974), the power of this Court to assert *842jurisdiction over Administrator Knight will again be explained.5
The settlement reached between the original plaintiffs and defendant was based on a federal law, the Jones Act, 46 U.S.C.App. § 688.6 The purpose behind the passage of the Jones Act is to “benefit and protect[ ] seamen who are peculiarly the wards of admiralty. Its purpose being to enlarge that protection, not to narrow it. Its provisions ... are to be liberally construed to attain that end.” The Arizona v. Anelich, 298 U.S. 110, 123, 56 S.Ct. 707, 711, 80 L.Ed. 1075 (1936) (citations omitted). By seeking to place a lien on this settlement, Administrator Knight potentially takes away federally granted rights from Mr. Benders. The jurisdiction of this Court reaches state officials when the vindication of federal rights is at issue. See Ex Parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908); Worcester County Trust Co. v. Riley, 302 U.S. 292, 58 S.Ct. 185, 82 L.Ed. 268 (1937). It is fully within this Court’s jurisdiction to determine whether Administrator Knight’s actions infringe on a seaman’s federally created rights. As relief sought by the plaintiffs is only declaratory and prospective, and if granted, will not have a direct impact on the State of Rhode Island (the workmen’s compensation having already been paid), the limits placed on this Court’s jurisdiction by Pennhurst State School & Hospital v. Halderman, 465 U.S. 89, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984), are not relevant.7 VALIDITY OF LIEN
If allowed to prevail, the lien and post-settlement assertion of right by Administrator Knight will, in this case, defeat the purposes behind the Jones Act. The Supremacy Clause of the Constitution will not permit this result. As the United States Supreme Court stated, “While states may sometimes supplement federal maritime policies, a state may not deprive a person of any substantial admiralty rights as defined in controlling acts of Congress or by interpretive decisions of this Court.” Pope & Talbot, Inc. v. Hawn, 346 U.S. 406, 409-10, 74 S.Ct. 202, 204-05, 98 L.Ed. 143 (1953). The lien would deprive Mr. and Mrs. Benders of their federally created right to damages for lost wages.
Denial of the Administrator’s lien will not, as claimed by the Administrator, “permit double recovery and place the plaintiff *843William Benders in a better position than he was in on the date of his injury.” Administrator Knight’s Memorandum of Law at 2. Just the opposite is true. Full recovery of the settlement award will ensure that Mr. and Mrs. Benders are compensated only for injuries they suffered as a result of the accidents aboard the Endeav- or for which URI, and thus the Board of Governors for Higher Education, are responsible. The workmen’s compensation payments to Mr. Benders were taken into account when the parties settled this suit several months ago.8 Therefore, the lien represents the threat that Mr. Benders will not recover his losses for lost wages and medical expenses.9 The lien would force Mr. Benders to pay from his settlement that which has already been deducted from the settlement.
Federal courts in the context of the Jones Act have ordered that an employer who had paid workmen’s compensation is entitled to recover those payments from an employee who obtains a damage award against a third party. See Skipper v. Amerind Shipping Corp., 230 F.Supp. 253 (E.D.La.1964). However, when federal courts have reduced or set off awards under the Jones Act, these actions were taken in order to apply equitable principles, not because a state law dictated the result.10 See Schellenger v. Zubik, 170 F.Supp. 92 (W.D.Pa.1953) (if plaintiff recovers a verdict, court is free to apply equitable principles and set off compensation payments); see also Gypsum Carrier, Inc. v. Handelsman, 307 F.2d 525 (9th Cir.1962) (where employer found negligent, court should not set off for workmen’s compensation paid because workmen’s compensation fund supported by employees, not employers). Of course, there is room for state action and the enforcement of state-created rights in admiralty and maritime regulation. But the state action, as used here, denies the Benders their full recovery. Equity dictates that the lien not be allowed to stand.
The Benders had no reason to believe that URI and the Board of Governors for *844Higher Education would be considered anything other than Mr. Benders’ employer. Administrator Knight has not brought forth any evidence that should have indicated to Mr. Benders that URI was not his employer, nor does the plain language of the state workmen’s compensation laws give any indication that URI would not be considered Mr. Benders’ employer for purposes of workmen’s compensation payments. Further, the Board of Governors for Higher Education sought to defend themselves against the plaintiffs’ claims by asserting that Mr. Benders was receiving workmen’s compensation payments from URI. Defendant’s Amended Answer to Plaintiff’s Verified Complaint. The plaintiffs and original defendant apparently relied on these facts and settled the suit. Now, another agency of the state attempts to come forward and say, “No, your employer was not the first agency, and therefore you owe this state agency the money you essentially paid to the first state agency.” 11
All of this confusion and dissention could have been avoided if Administrator Knight had simply notified the parties, before settlement, that he claimed a right to be reimbursed from any award or settlement received by Mr. Benders. Notification of intent to claim a right of reimbursement played a pivotal role in the decision of the First Circuit to uphold a workmen’s compensation insurer’s right of indemnity. Matteson v. Travelers Insurance Co., 738 F.2d 619 (1st Cir.1984). Although Rhode Island’s workmen’s compensation law has been amended since that decision,12 the issue of fairness, as represented by notification of claim, is still very relevant. In Matteson, the Court placed particular emphasis on the fact that the compensation insurer had notified the parties to the negligence suit as soon as the suit was instigated. Although the case turned upon the fact that the insurer was claiming indemnity from the tortfeasor, not the employee, the Court still emphasized the equitable issue of notification — that the parties knew before they settled the suit that the claim of indemnity existed. And in Matteson, no federal law restricted the reach of state law. Id., 738 F.2d at 622. Again, in the Benders’ suit, there was no notification. If the Benders knew of the reimbursement claim, it is unlikely that they would have settled their claim for $200,000. Mr. and Mrs. Benders believed when they decided to consolidate their claims13 and when they agreed to the settlement that the monies received would be free of strings and claims. So, apparently, did the Board of Governors for Higher Education and their liability insurer. This claim by Administrator Knight is too late. A fair settlement for Mr. and Mrs. Benders has been reached. Perhaps the Board of Governors for Higher Education benefited from the workmen’s compensation payments being used to reduce the settlement, but the Benders should not be penalized for this. ORDER
Because Administrator Knight’s lien would take away Seaman Benders’ right to damages received under the admiralty and *845maritime laws of the United States and because no equitable principles exist that dictate otherwise, IT IS ORDERED that Frank Knight, in his capacity as Administrator of the Rhode Island Employees’ Compensation Fund, is not entitled to a lien on the proceeds of the settlement made in this ease. Also, IT IS ORDERED, that the proceeds of the settlement be released as specified in the settlement agreement.