Tadlock: Harmless Error Limited by the CAFC

Tadlock v. McDonough, Case Number 2020-1762, decided July 15, 2021 discusses the Veterans Court frequent application of harmless error to deny an appeal, and determined: “[b]ecause the Veterans Court’s jurisdiction to consider prejudicial error does not give it the right to make de novo findings of fact or otherwise resolve matters that are open to debate, we vacate the Veterans Court’s determination.”  Id. at *2.

The veteran served from 1982-2003 including service in the Persian Gulf.  He suffered a pulmonary embolism (PE) resulting in a heart attack in 2010.  He sought service connection for the PE and heart attack pursuant to 38 USC 1117, which creates a presumptive status for qualifying chronic disabilities, which include those resulting from an undiagnosed illness, a medically unexplained chronic multi symptom illness, or a diagnosed illness that the Secretary determines by regulation warrants presumption of service connection.  Id. at *2-3.  In the subsequent regulation, the Secretary defined a “qualifying chronic disability” as on that by history, physical examination and laboratory tests cannot be attributed to a known clinical diagnosis.  Id. at *3.

The veteran was diagnosed with a PE and the VA examiner noted it was a diagnosed illness and not medically unexplained.  The Board relied on this examination to deny service connection, holding because the PE was diagnosed and has a known etiology it is not a undiagnosed illness warranting a Persian Gulf presumption.  The Federal Circuit noted: “Neither the Board nor the examiner made any finding of fact that Tadlock’s condition was not a “medically unexplained chronic multisymptom illness . . . defined by a cluster of signs or symptoms,” colloquially referred to as a “MUCMI.””  Id. at *4.

The veteran argued the regulation conflicts with the statute because the statute “includes not only “an undiagnosed illness” but also a “medically unexplained chronic multisymptom illness,” examples of which include diagnosed illnesses, “such as chronic fatigue syndrome, fibromyalgia, and irritable bowel syndrome.””  Id. at *4.

The Veterans Court agreed with the regulatory challenge, but found the error was not prejudicial.  It found the acute PE suffered by the veteran nearly 10 years ago is not characterized by overlapping signs and symptoms and unique features such as pain, fatigue, and disproportional disabilities when compared with physical findings, thus the Veterans Court held any error was harmless.  Id. at *5.  Judge Pietsch dissented noting: “the Court, under a prejudicial error analysis, applied a provision that the Board did not apply and made factual findings that the Board did not make,” characterizing this case as “the latest in a recent string of aggressive prejudicial error analyses” by the Veterans Court.”  Id. at *5.

Initially, the U.S. argued when the Veterans Court has undertaken a review for prejudicial error and determined that an error is harmless, the Federal Circuit lacks jurisdiction to disturb that determination.  However, the Federal Circuit expressly rejected that argument, stating the veteran’s challenge is not to the factual determination but to the Veteran’s Court’s authority to make the fact-determination in the first instance in its consideration of prejudicial error.  Id. at *6.

As to the merits, the Federal Circuit noted that:

a determination by the Veterans Court that the Board clearly erred in making a fact finding is quite different from the Veterans Court finding facts in the first instance. The former is statutorily authorized by § 7261(a)(4). The latter is statutorily foreclosed by § 7261(c).

Id. at *8.

After reviewing the case law and how the Veterans Court had begun to focus on harmless error, the Federal Circuit ultimately concluded:

the Veterans Court may affirm on a ground not considered by the Board and the VA if it is clear that the factual basis for such conclusion is not open to debate and the Board on remand could not have reached any other determination on that issue.

Id. at *12.

It further reasoned:

When questions of fact are open to debate, veterans are entitled to present whatever evidence and arguments they have to the agency charged with administering veterans’ benefits and possessed with the expertise to render informed judgments and to have that evidence and those arguments considered by that agency in the first instance. “The rule of harmless error cannot be invoked to allow the Court of Appeals for Veterans Claims to decide a matter that is assigned by statute to the [VA] for the initial determination,” nor can the rule be invoked to support an affirmance that “may [] have required it to make improper de novo findings of fact.”

 

***

For the above reasons, we hold that § 7261(b)’s command that the Veterans Court “give due account of the rule of prejudicial error” does not give it the right to make de novo findings of fact or otherwise resolve matters that are open to debate. Affirmance in the face of an error may be made by the Veterans Court only if the record already contains findings made previously by the VA or the Board that support affirmance or the entire record makes evident that the Board could not have reached any other decision. Where additional findings of fact are necessary regarding matters open to debate, the proper action for the Veterans Court is to remand to the Board for consideration of those facts in the first instance.

Id. at *14.

In the case at hand, the Federal Circuit determined neither the Board nor the VA had ever considered whether the veteran’s condition was characterized by overlapping symptoms or signs.  Id. at *15.  It noted the Veterans Court found harmless error by determining that “Tadlock has not identified, any overlapping symptoms or signs related to his PE or any other features of his condition that would suggest it as a MUCMI.”  Id. at *16.

The Federal Circuit noted the Veterans Court did not cite any fact finding by the VA or Board the record does not show such a determination.  It determined:

the Veterans Court here sought to consider in the first instance whether Tadlock’s symptoms constituted a MUCMI, an inquiry delegated to the VA. As noted above, the Veterans court did not cite to anything in the record to support its determination, nor did it contend that its determination was the only possible outcome within the discretion of the VA and the Board. The proper course for the Veterans Court here was thus to vacate and remand for consideration by the VA or the Board in the first instance about whether Tadlock’s illness might be “defined by a cluster of signs or symptoms” characteristic of a MUCMI.

Id. at *18.

As Judge Pietsch noted in her Veterans Court dissent, the rule of harmless error has been used many times over the last several years to affirm a decision where there is otherwise a reason to remand.  This reliance on harmless error always was used against veterans.  The Federal Circuit has not entirely eviscerated the rule, but has circumscribed it.  This is a good victory for veterans.

Decision by Judge Linn, joined in by Judges Newman and Chen.

To know more about whether Thomas Andrews can help you, please visit my website.

Arline: Protected Work Environment and Rejecting Vocational Experts

Arline v. McDonough, Case Number 18-0765, was decided July 1, 2021 and involves what is a protected work environment for the purposes of TDIU.

In Cantrell v. Shulkin, 28 Vet. App. 382 (2017) the Veterans Court grappled with the definition of the term “employment in a protected environment” and encouraged the VA to define the phrase through regulations.  However, as noted in this decision, that has never occurred.  Still, the Veterans Court found the Board did not clearly err in finding the veteran’s descriptions of workplace accommodations not credible and that he was no unemployable.  Id. at *1.

The veteran has a 50% mental health rating and the court did remand as to the issues of a higher rating, however, the veteran also sought TDIU.  The veteran was working but argued he was in a protected work environment.

The veteran worked at the U.S. Defense Logistics Agency (DLA) at the Defense Supply Center of Columbus (DSCC)—first as a janitor, then as a machine specialist, and finally as a parts expediter.  Id. at *3.  He eventually retired.  He explained his anxiety had become overwhelming and stated his employer told him he needed to retire or be terminated.  This was disputed by the employer.  Id. at *3.  After retirement, the veteran volunteered for approximately 20 hours per week at a local VA facility, he explained the lack of a set schedule or expectations made his volunteerism possible.

The Board denied TDIU because it concluded the veteran’s schizophrenia did not preclude substantially gainful employment and his employment was not marginal. The Board found the veteran’s employment did not qualify as "in a protected environment" given his employment history and found a vocational opinion less probative because it was based, in part, on the veteran’s non-credible statements.  Id. at *3-4.

TDIU is available despite work if the work is marginal employment, which is defined as earned income that does not exceed the poverty threshold for one person established by the Department of Commerce.  Id. at *5.  The Court then explained:

The regulation further provides that "[m]arginal employment may also be held to exist, on a facts found basis (includes but is not limited to employment in a protected environment such as a family business or sheltered workshop), when earned annual income exceeds the poverty threshold." Id. The issue here is the meaning of "employment in a protected environment" in § 4.16(a).

Id. at *4-5.  The Court noted the term in question was ambiguous and the Secretary had declined to define the term and wanted the fact finder to engage in a case by case analysis. 

The veteran argued the only competent evidence was from a vocational expert that said the veteran was engaged in a protected work environment.  However, the Court found the Board had a plausible basis for its credibility and employability determinations.  Id. at *9.  “Reading the decision as a whole, the Board determined that Mr. Arline's workplace accommodation descriptions were not credible because they lacked facial plausibility and were inconsistent with other independent evidence.”  Id. at *9.

The Court noted:

In denying TDIU, the Board weighed Mr. Arline's lay statements against his stable 37- year, full-time DLA career, during which he spent 23 years in the same position ordering parts for the U.S. Department of Defense (DOD); his "regular retirement" from that job; and the September 2015 VA examiner's assessment that he could complete simple repetitive tasks in an environment that did not require more than superficial social interactions because he had done so for decades at his DLA job and was now volunteering at a local VA facility.

Id. at *9.

The Court also rejected the argument that the Board substituted its own opinion for a vocational expert saying the veteran “does not explain how vocational expertise is equivalent to medical expertise so that the Court should extend the reasoning in Kahana to encompass vocational opinions. Vocational matters do not involve the same complex issues as medical matters.”  Id. at *13. 

Chief Judge Bartley wrote a powerful dissent.  She explained the veteran’s:

lay statements indicate that his schizophrenia worsened late in his long-term career with a federal agency, causing increasing occupational impairment that his employer, supervisor, and co-workers admirably attempted to accommodate. The Board essentially found this narrative facially implausible, reasoning that no employer would tolerate, and no employee would help, an underperforming disabled veteran as he ended the last stage of a long career. But to be facially implausible, testimony must be so unbelievable that no reasonable factfinder would credit it.

Id. at *22.

She argued:

To put it bluntly, the Board went out of its way to impeach the veteran's lay testimony rather than accepting his plausible description of his declining psychiatric state, the corresponding problems it caused with his employment, and the significant accommodations that he received from his employer. Contrary to the Board's finding, there is nothing facially implausible about Mr. Arline's coherent narrative, and the Board in support cites nothing other than its own unsupported view of how workplaces should operate.

Id. at *23.

As to the majority’s rejection of the vocational assessment, she argued:

Moreover, I disagree with the majority that Board members should be able to discount TDIU evidence based on their own abstract conceptions, without a foundation in the record, of what is "common" or "general" in a given work environment. Nor, without further explanation, should they be able to rely on written workplace policies that advance procedures counter to a veteran's description of their specific work environment. TDIU determinations must be made on the evidence of record, and although the majority states that credibility determinations may not be based solely on extrarecord evidence, the remainder of their discussion comes dangerously close to permitting Board members to do just that. Given the importance of employment questions in TDIU cases, I cannot join the majority in allowing Board members to gainsay favorable unemployability evidence based on unsupported beliefs and policies about how a particular workplace should operate.

She continued by saying she believes protected work environment is ambiguous and no deference is owed to the VA’s interpretation and then offered a list of non-exclusive factors to consider in a protected work environment situation:

The first group of factors focuses on the employee in the job itself. As Mr. Arline asserts, the type and extent of accommodations that a veteran receives from an employer may be relevant to determining whether employment is in a protected environment. Evidence that a veteran requires substantial accommodations to effectively perform duties suggests a protected environment; evidence of few or less extensive accommodations may weigh against such a finding. Similarly, the magnitude of job responsibilities may bear on that analysis, since some employment is by its very nature inconsistent with a finding of a protected employment.

 

The second group of factors relates to the employer. The Secretary is correct that employer behavior or intent toward the veteran and employer classification of the position may be relevant considerations. Employer behavior, for example, may indicate that the veteran is shielded from consequences of nonperformance or poor performance of job duties. So, too, an employer's benevolent intent in hiring and promoting a veteran may be relevant. But because there may be reasons other than benevolence for providing a protected environment, employer intent is not dispositive. In addition, evidence that the veteran works for an institutional employer who traditionally provides sheltered employment may indicate a protected environment. For example, an employer like a hospital, VA domiciliary, or long-term care institution, where the goal of employment is principally charitable or rehabilitative, is more likely to offer employment in a protected environment than other enterprises that are profit-motivated.

 

The third factor is economic. As noted above, although income above the poverty threshold is not determinative, high income may counter against a protected environment while income that only marginally exceeds the poverty threshold may indicate a protected environment.

Id. at *25-26.

The facts of this case at first might suggest TDIU is not appropriate, but fellow employees helping a troubled veteran whose work performance has slipped toward the end of his career seems exceedingly normal.  What is most troublesome is the Court’s allowance of the apparent rejection of the expert vocational opinion because vocational opinions are not as expert as a medical opinion.  At the same time, the VA moving target definition of a protected work environment is maddening.  I see this case as crying out to be appealed and hopefully resolved in favor of the veteran.

Decision by Judge Falvey and joined in by Judge Pietsch with dissent by Chief Judge Bartley.

To know more about whether Thomas Andrews can help you, please visit my website.

Swanagan and Turman (Attorney Fees for Out of Country Attorneys)

Swanagan and Turman v. McDonough, Opinion Number 19-1350(E) and 19-3258(E), was decided June 23, 2021 and involves the appropriate hourly fee for attorney work under the Equal Access for Justice Act.

Veterans know that for successful work done before the Court of Appeals for Veterans Claims or Federal Circuit Court of Appeals, their attorney can be paid by the government under the EAJA (Equal Access for Justice Act) statute and this amount is not paid by the veteran.  The EAJA hourly rate changes every year based on the cost of living and also factors in where the work was performed (i.e., the South, North, etc).

These cases involve an attorney that had won a case and sought EAJA fees.  The veteran had moved to Ecuador and done a portion of the work in Ecuador and the result was wrangling over the appropriate amount of the EAJA fee.   The veteran’s attorney sought a locality increase similar to the DoD and UN’s indices for cost of living in Ecuador, which would have led to a rate of approximately $196 per hour.

The Court determined:

nothing in the EAJA statute or this Court's jurisprudence bars consideration of a COL increase to the statutory maximum for attorney work performed outside the United States. However, as with any attorney fee request, appellants bear the burden of demonstrating the reasonableness of their proposed method for calculating the appropriate hourly rate for work.

Id. at *10.  The Court then explained the appellant did not identify what other potential indices were available or explain why the selected the DoD and UN indices over others, no evidence the comparison U.S. cities were adequately representative, or why an average of the UN and DoD indices was appropriate.  Id. at *12.  It determined the appellant had not carried his burden and then cut his rate to $125 per hour.

EAJA cases really only concern attorneys (though they should be of consideration of veterans who want to make sure they can obtain good attorneys), but I have to admit this case really does not grab even my attention.  I frankly just don’t see too many out of country attorneys practicing veteran’s law.

Decision by Chief Judge Bartley and joined in by Judge Allen and Falvey.

To know more about whether Thomas Andrews can help you, please visit my website.

Andrews: How to Gain Service Connection for Hepatitis C and the Benefit of the Doubt

Andrews v. McDonough, Opinion Number 19-0352, was decided June 22, 2021 and involves what triggers the benefit of the doubt.

This is a Hepatitis C case where the veteran sought service connection and argued to the Court reversal is the proper remedy because the evidence of record met the benefit of the doubt standard and the Secretary argued reversal would require the Court to act as a fact finder in the first instance and instead urged a remand.  Ultimately, the Court did reverse but on narrow grounds.  Id. at *1-2.

The veteran said his Hepatitis C came from various in-service risk factors including: air gun immunization, dental work and a STD.  In 2010 a VA examiner said air guns were not a risk factor as to Hepatitis C and this resulted in a denial.  This ultimately led to a Board remand that ordered a new examination to discuss sexual activity.  This led to a new negative examination which discussed dental work, STD, and air gun injections and ultimately a denial of service connection.  Id. at *3. 

The Court began by acknowledging: “while the Court's authority to reverse Board findings is firmly established, it's not entirely clear what this means in practice.”  Id. at *4.  However, “it has proven difficult to identify absolute markers as to when reversal is the appropriate remedy rather than remand for further development or adjudication.”  Id. at *5.

The Court noted existing case law  “makes clear that reversal is appropriate provided that it doesn't require the Court to exceed its scope of review by engaging in improper fact finding. On a practical level, however, the line often proves blurry between judicial review—that is, reviewing, under the clearly erroneous standard, discrete findings of the Board in light of the entire factual record—and first-instance fact finding.”  Id. at *7. 

The Court explained the difficulty is that 1) “evidentiary rulings are not zero-sum affairs but often involve a complex interplay between several different factors”, 2) the Court’s “ability to evaluate evidence can be complicated when there isn't a statute or regulation spelling out precise criteria or relevant factors that bear on a given question. Often the relevant adjudicatory standard is set out in an agency manual such as the M21-1, whose provisions are mandatory for adjudicators at VA regional offices, but whose relationship with the Board and this Court is less than straightforward.” Id. at *8.

The Court then noted the Board had incorporated the M21-1 into its prior remand of the claim and stated it recognized various risk factors for hepatitis C and instructs to resolve reasonable doubt in favor of the veteran.  Id. at *9-10.  The Court noted it could not independently turn to the M21-1 to inform its decision, but could int his case because the Board’s remand order adopted its guidance.  Id. at *10.  It effectively noted that once the Board relied on the M21-1 for a remand, the veteran had an interest in the M21-1 due to his reliance on it to develop his case (even if the reliance is more fiction than fact).  

The Court then stated:

As for in-service risk factors, the Board did not dispute their occurrence; it merely discounted the likelihood that the veteran's hepatitis C originated from some of them. But the medical evidence the Board relied on to do so has been conceded as inadequate, since the opinions either failed to understand the theory of service connection at issue or rejected—contrary to VA policy—the possibility that certain risk factors could lead to hepatitis C. Put simply, no matter how diminished the Board thought the likelihood that Mr. Andrews's in-service risk factors caused his hepatitis C, this must be weighed against the absence of extra-service risk factors.

 

At the very least, in this case "the evidence favoring risk factor(s) in service is equal to the evidence favoring risk factor(s) before or after service," requiring resolution of reasonable doubt in the veteran's favor. M21-1, Pt. III, sbpt. iv, ch. 4, sec. H.2.e. Reasonable doubt exists when there is "an approximate balance of positive and negative evidence which does not satisfactorily prove or disprove the claim. It is a substantial doubt and one within the range of probability as distinguished from pure speculation or remote possibility." 38 C.F.R. § 3.102 (2020). To the extent that the Board found the risk factor evidence in favor of the claim didn't meet this standard, this finding was clearly erroneous. Nor, based on this record, can we see any point in remanding for additional development on the question of nexus.

Id. at *11.

The Court then granted service connection and explained:

VA obtained two medical examinations and the veteran submitted numerous private treatment records and lay statements. Yet despite all this development, VA has not suggested, much less identified, the existence of preor postservice risk factors necessary to deny service connection under the standard outlined in the M21-1. Even if another examiner once more discredits the notion that Mr. Andrews's in-service risk factors led to his hepatitis C, that still puts the likelihood of an in-service etiology at least on par with the likelihood of an extra-service etiology. In short, it's not clear what remedial value would lie in requiring VA to obtain a new examination, since that examiner would have no warrant to reject the fact that no non-service risk factors exist. Regardless of the relative probative value of the evidence supporting Mr. Andrews in-service risk factors, this much is clear: it at least matches the zero evidence suggestive of pre- or postservice risk factors. Which brings us to the final point: Whatever the quality of the evidence surrounding the risk factors, it's at least sufficient to allow VA to discern whether service connection is warranted. It's been nine years since VA began assisting Mr. Andrews to develop his case. Despite formally recognizing the M21-1 risk factors, the Board relied on a medical examination that was not only inadequate for failing to address the in-service risk factors but failed to identify any viable nonservice-related etiology for the veteran's condition. Based on the circumstances of this case—the adoption of the M21-1 standard, the conceded presence of in-service risk factors, the absence of any non-service risk factors, and the lack of any reasonable basis to believe that additional development could alter the approximate balance of evidence—the Court reverses and orders VA to award service connection to Mr. Andrews for hepatitis C.

This case is a primer on how to win an Hepatitis C case, but also is interesting in how the court really resisted reversal and only did so after saying the VA had relied on the helpful M21-1 and thus the helpful language from the M21-1 could be imported into is decision.  While the case will be helpful in all Hepatitis C cases, it seems to do little (and perhaps even harm) in the larger battle to get the Court to grant more cases themselves.

Decision by Judge Toth and joined in by Judge Allen and Falvey.

To know more about whether Thomas Andrews can help you, please visit my website.

Taylor: Human Experiments, Secrecy Oaths and Equitable Estoppel Applied by the CAFC

Taylor v. McDonough, Case Number 2019-2211, decided June 30, 2021 discusses a set of tragic effects and finds equitable estoppel applied to result in an earlier effective date. 

The veteran had been the subject of chemical agent exposure studies at the Edgewood Arsenal during the Vietnam era.  He had specifically signed an oath of secrecy related to those tests and ultimately suffered severe psychological harm as a result of the testing.

“In 2006, the Department of Defense (DOD) declassified the names of the servicemen and women who had volunteered for the Edgewood Program and, in June of that year, VA sent the appellant a letter advising him that DOD had given permission for those identified to disclose to health care providers information about their involvement in the Edgewood Program that affected their health.”  Id. at *2.  In fact, the DOD had recommended telling participants of likely health consequences in 1979.

The veteran applied for benefits in February 2007 related to PTSD and submitted stressor statements related to the testing and additional stressors occurring in Vietnam.  A VA examiner determined there was PTSD resulting from “cumulative response” to the Edgewood experiments and Vietnam experiences.  The veteran was ultimately service connected for PTSD and granted TDIU with an effective date of his application date.

This appeal concerned whether an effective date prior to his application should be granted.  Section 5110 says the effective date of an award is the date of facts or found, but not earlier than the date of the receipt of application for benefits.  Mr. Taylor had signed a secrecy oath stating he would not disclose the testing and he did not apply for benefits until the DoD and VA sent a letter to veterans of the experiments that they could apply for benefits based on those experiments.  The veteran agreed normally an earlier effective date would not be allowed, but argued under the unusual facts of this case—i.e., the secrecy oath related to the testing—that an earlier effective date should be granted. 

The Veterans Court upheld the effective date finding their ability to grant equitable relief was so limited as to prevent is application under these facts. Judge Greenberg wrote a masterful dissent.

The Federal Circuit determined the Court erred in finding equitable estoppel was unavailable.  The Federal Circuit explained: “the Veterans Court may exercise such equitable powers, within the scope of its statutory jurisdiction, to ensure that “all veterans entitled to benefits receive[] them.”” Id. at *18.  The Court then explained “concluding otherwise would be contrary to the Veterans Court’s statutory mandate. Congress created the Veterans Court, through the VJRA, “for the [express] purpose of ensuring that veterans were treated fairly by the [G]overnment and to see that all veterans entitled to benefits received them[.]”  Id. at *21.

The Federal Circuit also addressed the Veterans Court’s argument that it could not use equitable estoppel to authorize payment outside of the requirements set forth in 38 U.S.C. Section 5110.  The Court explained this was error because 5110 is not jurisdiction and therefore is subject to equitable considerations.  Id. at *22.

The Court did explain that Section 5110(a)(1) does have importance and that “[i]n nearly all cases challenging the effective date of a veteran’s disability benefits, 38 U.S.C. § 5110(a)(1) and its enumerated exceptions will be dispositive.”  Id. at *29.  However, in this case, the Court found the government was estopped from using Section 5110(a)(1) from precluding the veteran from getting an earlier effective date because essentially the government had prevented him from making a claim by telling him he would be subject to criminal prosecution if he talked about the testing.

This is a monumental victory for the veteran and his advocates, but also based on particularly sympathetic facts, which necessarily led to the conclusion reached by the Federal Circuit.  It will be interesting to see in the years to follow how it is pushed to gain earlier effective dates.  It also serves as a repudiation of a Veterans Court decision that seemed focused on limiting its ability to review cases and grant relief rather than giving justice to those who deserve it.

Decision by Judge Wallach and joined in by Judges Newman and O’Malley.

To know more about whether Thomas Andrews can help you, please visit my website.