Freund and Mathewson v. McDonough, Case Number 21-4168, decided October 20, 2022 concerned the VA’s wrongful closing out of legacy appeals to the Court and the request for a class action. The Court acknowledged the VA had a problem illegally closing out legacy appeals, but refused to grant class certification.
After the passage of the AMA, the result was two appeals processes before the Board. The first is the older or legacy cases. The second are those from the AMA process. This case involved legacy cases.
In legacy cases, the VA responds to a notice of disagreement by issuing a statement of the case. The SOC triggers a requirement that the veteran file a Form 9 usually within 60 days (though that date can be longer, 1 year after the mailing of the notification of the VA decision being appealed). The VA system is automated and called VACOLS. VACOLS automatically flags and closes all legacy appeals on the first day of the month following 65 days after the SOC was failed or following one year after the notice of the AOJ decision was mailed if the veteran has not submitted a Form 9. The VA does not give notice that the appeal is closed out.
At issue, the veterans did submit a Form 9, but the case was still closed out due to the VACOLS automated closure function. The Court stated:
“The problem is that it became clear during the course of these proceedings that VA knew that there were claimants whose claims had been erroneously closed through the use of the VACOLS sweeping function. VA maintained that this was not really a problem because as soon as VA learned of an erroneous closing, it would automatically reactivate the appeal at issue. But there did not appear to be any comprehensive plan for identifying such claimants, a problem magnified by the lack of notice of the closing in the first place. And, as we will discuss below, the Secretary came perilously close to misleading the Court by suggesting that he was engaged in proactive steps to address the problem such that it negated any need for the Court's intervention. That was clearly not so, but it took the Court's sustained efforts over many months of inquiries as to whether this action is moot to have the Secretary admit as much. To the Secretary's credit, and as we also describe below, after oral argument the Secretary informed the Court of plans to address the issue, suggesting that the Agency had finally begun to meaningfully grapple with the serious problem this action had brought to light. We trust the Secretary will continue to follow through with the plans he presented to the Court.”
Id. at *3. Despite this finding, the Court dismissed the case!
The Court again noted that VACOLS did not capture or notice the timely Form 9 and automatically terminated an appeal without notice to the veteran. The petitioners asked for a class certification of all similarly situated veterans (those whose legacy appeal was closed despite a timely Form 9).
After oral argument of the case, the Court asked the VA to present more facts and in fact it turned out that “69.8% of 5,456 closed legacy appeals with which a Substantive Appeal was filed were improperly closed.” Id. at *11.
The Court then determined it had jurisdiction over the case. It then turned to mootness and standing. As to mootness, the Court found the claims were moot because the VA had since the filing reactivated the appeals. The Court also recognized the “inherently transitory” exception to mootness and noted
“we are bound by Godsey, which means that the inherently transitory exception to mootness could possibly allow us to reach the merits of the petition on a class basis if we could certify a class. And we will assume, without deciding, the class-claims here would qualify as ones that are inherently transitory. But we stress that petitioners can only benefit from this exception to mootness if the Court certifies a class. That is, if a class is not appropriate, an exception to mootness based on the existence of a class is irrelevant, but found it was not applicable because the certification of the class was not appropriate.”
Id. at *18.
As to the question of class certification, the Court denied for two reasons.
“The first proceeds on the basis that petitioners' proposed class definition includes an implicit requirement that a class member have been subject to the closure of an administrative appeal without notice. In that case, the Court concludes that the named petitioners are not members of the class they seek to represent and are therefore inadequate representatives of such a class. The second ground takes the class definition literally—meaning there is no requirement that class members have been subject to no-notice closure. Proceeding under that assumption, the Court concludes that petitioners have not met their burden to present common questions capable of class-wide resolution. Under either view of the class definition, certification is not appropriate.”
Id. at *19.
The Court ends by flippantly concluding that the Secretary has taken some action and it is “better late than never.” Id. at *23
I find this decision inexplicable. It denies in part because the named parties represent people who could not be in the class because they ultimately discovered the appeals had been wrongfully closed. This seems to require the identification of a class representative that cannot exist. This case will be appealed to the Federal Circuit; meanwhile it is clear the Veteran’s Court both recognizes “the Secretary came perilously close to misleading the Court” and yet remains unwilling to do anything about it or illegally closed cases.
Meanwhile, if you have a legacy appeal to the Board and are still waiting, you should find out if it was illegally closed by VACOLS. The Secretary will correct it, but only if you mention it to them.
Decision by Judge Allen and joined in by Judges Meredith and Laurer.
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