Rosinski: Payment of Attorney Fees Based on Amount Awarded Not Actually Recieved

Rosinski v. Wilkie, Case Number 17-3293, decided January 30, 2020 discusses a line of cases involving what happens when an attorney is to be paid 20% of past-due benefits owed the veteran, but what the veteran would be owed is reduced for other reasons, in this case military retirement pay.

The Court framed the issue as:

The discrete question is whether section 5904 requires VA to pay fees to an attorney who obtains a disability rating of less than 50 percent for a veteran receiving military retirement pay—or, whether section 5304 forecloses such payments to attorneys. In Snyder v. Nicholson, 489 F.3d 1213 (Fed. Cir. 2007), the Federal Circuit held that 38 U.S.C. § 5313, a statutory limitation on payments to incarcerated veterans, did not alter VA's obligation to pay attorneys fees under section 5904(d)(1) because section 5313 did not purport to change the monthly compensation awarded on the basis of the veteran's claim but merely served as a withholding device for full payment of benefits otherwise lawfully established. Because Snyder's reasoning—as explained in subsequent cases—applies equally to section 5304, the Court reverses the Board's ruling and directs the Secretary to pay Mr. Rosinski the fees to which he is entitled under section 5904(d)(1).

Id. at *1-2.

The Court noted:

This case marks the fourth in a line of attorneys fees decisions examining VA's obligations to pay attorneys fees under section 5904. The first and most significant of these cases is Snyder, in which the Federal Circuit defined various terms within section 5904 and examined whether VA's obligation to pay attorneys fees was countermanded by a separate statute, section 5313, which limited the monthly compensation payments that an incarcerated veteran could receive on a successful claim. 489 F.3d 1213. The next two decisions, Jackson v. McDonald, 635 F.App'x 858 (Fed. Cir. 2015), and Gumpenberger v. Wilkie, 31 Vet.App. 33 (2019), refined Snyder's interpretation of section 5904 and applied it to other scenarios.

Framed in the most general terms, the question on appeal is whether Snyder's reasoning applies equally to section 5304 and obligates VA to pay attorneys fees even where the veteran receives a rating below fifty percent and hasn't waived retirement pay. Insofar as this question involves interpretation of section 5904, our task is made easier by the fact that Snyder already set out what various terms mean, with Jackson and Gumpenberger providing an assist.

Id. at *4.

In summary, Snyder dealt with incarcerated veterans (finding attorneys were owed the amount that would have been paid if the veteran was not limited to a lesser amount by reasons or incarceration); Jackson dealt with a recently deceased veteran; Gempenberger dealt with a fugitive felon. 

The Court hashed through the Snyder and related analysis and ultimately determined:

What follows here is largely a restatement of our earlier analysis. Snyder established that

VA renders an award on a veteran's claim when it completes the non-mechanical  judgments of assigning a disability rating and effective date. Snyder clearly established that VA's obligations under section 5904 to pay attorneys fees are not affected by additional statutory limitations on a particular veteran's ability to receive payment as those do not affect the amount "awarded on the basis of the claim." VA, for example, may run afoul of the Appropriations Clause if it decided to disregard section 5304 and pay a veteran who hasn't waived retirement pay an award of less than 50 percent. However, the Snyder line of cases establishes that VA's obligations to attorneys under

section 5904 are to be determined by the amount awarded, not by the amount the veteran is actually entitled to receive. Under such reasoning, payment to attorneys does not fall afoul of the Appropriations Clause even where a separate provision limits payment to the claimant.

Id. at *16.

Judge Meredith dissented largely focusing on the fiscal impact on the Treasury.  She wrote:

by finding generally that "VA's obligations to attorneys under section 5904 are to be determined by the amount awarded, not by the amount the veteran is actually entitled to receive," the majority fails to give due meaning to the term "past-due." Ante at 16. The result here is that the veteran was paid 100% of the benefits that he was awarded and entitled to receive (albeit in the form of retirement pay) and VA must pay an additional 20% to the appellant—i.e., the United States will pay 120% for the period from May 2011 to January 2014.

Id. at *22-23. 

Both parties have asked for an en banc ruling in this case.  However, I cannot see how the case is not governed by the Federal Circuit decision in Snyder and do not foresee any change in the result.

Decision by Judge Toth and joined in by Judge Bartley with a dissent by Judge Meredith.

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