Butts: EAJA Award for a JMR Resulting from a Federal Circuit Decision

Butts v. McDonald, Case Number 14-3019(E), decided June 3, 2016 involved an attorney fee request under EAJA.

This case involved a JMR that resulted after the Federal Circuit issued an opinion overturning a CAVC decision regarding 38 CFR 3.321(b)(1) and reference to multiple or individual disabilities when evaluating for a higher rating pursuant to 3.321.  The appealed from Board decision was issued between the CAVC decision and the CAFC decision reversing the CAVC decision.

The parties to Butts agreed the CAFC decision applied and entered into a JMR.  The veteran’s attorney then sought fairly modest attorney fees.  The question centered on whether the Secretary’s position was substantially justified.

The decision was a barnburner.  It was an en banc decision with multiple dissenting opinions.  The majority awarded EAJA fees.

The majority noted the Secretary bore the burden of demonstrating its position was substantially justified.  It noted the Secretary’s seeming only argument in favor its position was that the general scheme of the rating schedule assigns scheduler ratings on a disability by disability basis.  The majority also notes the Board decision does not explicitly reference the CAVC decision, however, it counts in terms of substantial justification the fact the Board was acting in accord with existing judicial precedent.  The majority then notes that compliance with precedent does not relieve the Court of its duty to evaluate the reasonableness of the Secretary’s position.  The majority focuses on the totality of the circumstances.  It noted the the dissent argues the CAVC decision demonstrates the Secretary’s position was reasonable, but notes a CAVC error in deferring to the Secretary’s interpretation of a regulation does not end the matter and that cannot be the dispositive factor.  The majority also expresses the profound opinion that if compliance with precedent was a bar to EAJA fees, veterans with limited means would face even greater difficulty obtaining counsel to bring valid challenges to existing case law.

Judge Kasold wrote a concurring and dissenting opinion that focused on the right to appeal to the CAFC and stated the a decision by the CAVC should not operate to prevent EAJA fees.

Various dissenting opinions were written.  Perhaps the most academic and vigorous was by the Judge Bartley who is concerned the Board’s reliance on a CAVC decision could be considered not substantially justified.  Judges Lance and Moorman also wrote a powerful dissent that seemed at its base to be truly antagonistic to EAJA fee awards in general.

This decision is important because it defends EAJA fees and thus preserves the ability for veterans to obtain counsel.  If EAJA fees were not available or seriously curtailed, then the simple truth is that attorneys could not afford to take these cases and veterans would  be left making pro se arguments.  However, this decision also shows a deep split in the judges of the CAVC and an apparent dislike of EAJA fees by some members of the dissenting group.

Decision by Judge Davis, joined by Judge Hagel, Schoelen and Greenberg.  A concurring and dissenting opinion by Judge Kasold.  Dissenting were Judges Lance, Pietsch, Bartley, and Moorman.

Noah: Earlier Effective Dates and Constitutional Due Process Arguments

Noah v. McDonald, Case Number 2015-0334, decided June 10, 2016 is a decision involving the request for an earlier effective date based on a misleading VA letter to the veteran and the related constitutional Due Process arguments implicated. 

The veteran applied for service connection of PTSD in 1981 and sent a misleading notice of the time required to submit evidence necessary to complete his PTSD application. The letter stated more information was needed about his Vietnam experiences and that the VA “must have postservice medical evidence to support your claim.”  It also stated “Please reply within 30 days.  If we have no reply within 60 days, we will assume that you have withdrawn your claim.”

The veteran did not respond to the VA’s letter.  He submitted a new claim in 2007, was granted service connection for PTSD, and assigned a rating of 2007.  He appealed the effective date.  He argued he understand the 1982 letter has requiring him to send in medical evidence showing he had PTSD and that if he didn’t within 60 days they would close his file.  Due to financial issues, he was unable to find and submit the “required” evidence within 60 days.  He stated if he had known he really had 1 year, he could have gotten the required evidence by using a medical clinic.  A 2011 private psychologist opined he had PTSD in 1981 and 1982.

The veteran argued the Court should find the Board erred in not considering whether his claim should be equitably tolled.  He also, after urging by the Court, that there was a due process failure by the government. 

The Court found it lacked authority to equitably toll the deadline to submit evidence by the veteran, but they reached farther and issued a decision that did consider the Constitutional due process implications of the VA’s misleading notice to the veteran.

Initially, the Court reiterated that a veteran’s entitlement to disability benefits is a property interest protected by the Due Process Clause.  The Court then considered whether Due Process Clause factors enunciated in Matthews v. Eldridge by the U.S. Supreme Court applied to this case.  First, the Court found the “special beneficence afforded to our nation’s veterans cannot tolerate notice that misleads the potential receipt of benefits”.  Second, the Court found the the erroneous deprivation of the veteran’s right to benefits was great as a result of the VA’s practices.  The Court noted, “This is not a matter of whether a claimant is properly charged with knowledge of the relevant law.  Rather, VA provided Mr. Noah inaccurate and misleading notice that gave him significantly less time than the law allowed to respond to VA’s request for information.”  Finally, the Court noted the government’s interest and burdens and stated “once VA assumed the responsibility of providing notice of the time to submit evidence, it is unclear to the Court how any requirement that VA provide accurate information imposes a fiscal or  claimant with accurate information.”

The Court then considered whether the veteran detrimentally relied on the VA’s misleading notice.  The Court noted the Board disregarded the evidence on detrimental reliance because they found the veteran was subject to the one year abandonment provision in statute 38 CFR 3.158.  The Court found because the 1982 notice letter failed to satisfy procedural due process requirements and thus if the veteran was successful in demonstrating he relied to his detriment on the notice, his December 1981 claim remained pending and unadjudicated.  As a result, the Court vacated the Board’s decision and remanded the case to the Board to weigh the evidence and assess the evidence and determine whether the veteran relied to his detriment on the misleading notice. 

Judge Lance wrote a concurring opinion stating he agreed the case should be remanded for assessment of detrimental reliance, but stated he would exercise judicial restraint and not discuss the Due Process arguments until further appeal.

This case is a nice explication and application of a Constitutional Due Process argument to a misleading notice by the VA.  It is likely many such old notices exist and can be used to argue an earlier effective date.  Special review of the veteran’s efforts to show detrimental reliance should be used as a template for future advocates.

Decision written by Judge Schoelen and joined in by C.J. Hagel.  Concurring opinion by J. Lance.