Crews: Blue Water Act and Effective Dates

Crews v. McDonough, Case Number 21-0226, decided April 17, 2023 involves the impact of the Blue Water Act on an effective date.

The veteran sought service connection for ischemic heart disease in 2013 asserting the condition began in 1991 and was caused by Agent Orange.  The claim was initially denied.  In that denial, stated the evidence does not show an event, disease, or injury in service; service treatment records did not reflect complaints, treatment or diagnosis of the condition; and the condition did not develop to a compensable degree within he presumptive period of discharge.  The RO also stated there are some presumptive conditions including IHD, but denied because “the evidence does not show a diagnosis of a condition for which VA has found a positive association to herbicide exposure.” 

The veteran submitted a supplemental claim in 2019 and stated he served off the coast of Vietnam and went ashore.  Evidence developed showed he had undergone a coronary artery bypass graft in 1991.  As a result of this supplemental claim, the RO granted benefits.  However, the RO also explained that while service connection was granted due to a presumption, the veteran’s original claim was denied because of no evidence of a diagnosis and as a result an earlier effective date cannot be applied.

The veteran argued his 2013 claim had been denied "only due to the fact that Agent Orange exposure at that time was interpreted to mean 'on land/inland waterway exposure'" and arguing that his effective date should be retroactive to the date of that claim.  The RO effectively denied explaining:

“To allow entitlement to an earlier effective date based on a previously denied claim, the [Blue Water Act] requires that you were denied because a diagnosed presumptive disability was of record[ but] exposure to herbicide was not conceded. As you were denied because there was no evidence of a diagnosed presumptive disability, not because herbicide exposure was[ not] conceded, entitlement to an earlier effective date prior to September 5, 2018[,] is denied.”  Id. at *3.

The Board also denied and in part explained (1) the prior denial was premised on a lack of a diagnosis and (2) the denial was premised on a prior more restrictive definition of service in Vietnam; and (3) private treatment records showing CAD were not associated with the claims file in 2013.

Before the Court, the veteran argued “in determining that the retroactive effective date provision in the Blue Water Act did not apply, the Board overlooked that the RO in July 2014 denied his claim "for multiple reasons, and not only because of a lack of a current disability.”  Id. at *8.   The veteran next argued the plain language of the Blue Water Act makes clear that for the effective date exception to apply the only requirement for the prior denial is the claim was denied by reason of the claim not establishing the disease was incurred in or aggravated by the service of the veteran. 

The Court noted the denial of a retroactive effective date was premised on its conclusion that the prior claim was denied "on the basis that the evidence of record did not show that he had a current disability" and, secondarily, on its determination that the prior denial was not based on a more restrictive definition of service in Vietnam.”  Id. at *14. 

The Court began it analysis by noting “the Blue Water Act permits the effective date for an award of benefits under that Act to be based on "the date on which [an] individual filed [a] prior claim" if, as pertinent here, the individual "is a veteran . . . who meets the following criteria": (i) The veteran . . . submitted a claim for disability compensation on or after September 25, 1985, and before January 1, 2020, for a disease covered by this section, and the claim was denied by reason of the claim not establishing that the disease was incurred or aggravated by the service of the veteran.  (ii) The veteran . . . submits a claim for disability compensation on or after January 1, 2020, for the same condition covered by the prior claim under clause (i), and the claim is approved pursuant to this section.

Id. at *16-17.

The Court then noted based on the language of the Act, “after identifying when the prior claim was filed, the singular focus is the condition for which the claimant sought benefits.  Importantly, for purposes of the arguments before the Court, nothing in subsection 1116A(c)(2)(B)(i) mandates that the prior claim for benefits must have been based on a particular theory, such as direct or presumptive service connection, nor does it require that the veteran have alleged herbicide exposure in the prior claim.”

Id. at *18.

The Court then analyzed the statute’s phrase “by reason of” and stated: “In sum, the best reading of "by reason of" is that it does not signal the only cause for the prior denial. Taking all this into account, the language thus far indicates that the veteran must have previously sought benefits for a condition that is now considered presumptively related to herbicide exposure, and VA must have denied the claim, at a minimum, because the claimant did "not establish[]" that "the disease was incurred or aggravated by . . . service.””  Id. at *21-22.

The Court also noted as to the prior denial “More importantly, as explained above, section 1116A does not require the veteran to have previously sought presumptive service connection or even to have alleged herbicide exposure; rather, the only requirement is that the veteran sought benefits for a condition that is now considered presumptively related to herbicide exposure.”  Id. at *23.  It further explained “although subsection (B)(i) identifies at least one required reason for the prior denial, it does not identify the sole cause and thus leaves open the possibility that other grounds were present. In sum, the specific criteria that Congress enumerated for a retroactive effective date simply do not include a prohibition on the prior denial having been based in part on the lack of evidence of a current disability.”  Id. at *24.

To summarize all, the Court stated: “Based on the foregoing, the Court concludes that the plain language of the Blue Water Act reflects that Congress established five exclusive criteria for a veteran to receive a retroactive effective date for an award of benefits under that Act. As pertinent here, the veteran must have previously filed a claim for a condition that is now considered presumptively related to herbicide exposure, and VA must have denied that claim, at a minimum, because the appellant did not establish that the claimed disease was "incurred or aggravated by . . . service." However, those criteria do not prohibit a retroactive effective date when the prior denial was based in part on the lack of evidence of a current disability, and they do not include a requirement that the denial was predicated on the pre-Procopio understanding of service in the Republic of Vietnam.”

Id. at *25. 

The Court ended up remanding to the Board for a new decision in light of the case. 

This is an impactful case that potentially helps many Blue Water Vietnam Veteran’s get an earlier effective where they had previously be denied for a now presumptive condition.

The case did a dissent by Judge Falvey where he argued Congress did not allow an earlier effective date in case like this because he read the term “by reason of the claim not establishing that the disease was incurred or aggravated by the service of the veteran” as narrowly limiting the exception to exclude those veterans who were denied at least in part because they did not have a disability.  Interestingly, Judge Jaquith so disliked Judge Falvey’s dissent and the way the Board had framed the case that he took the time to write a powerful concurrence.

Decision by Judge Meredith.  Concurrence by Judge Jaquith.  Dissent by Judge Falvey. 

While the VA does not as a matter of course appeal decisions to the Federal Circuit, I would anticipate an appeal in this case.

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Hairston: Non-Service Connected Pension and a Spouse’s Income

Hairston v. McDonough, Case Number 20-4692, decided April 20, 2023 involves whether the VA can consider a spouse’s income when calculating income for the purposes of a Non-Service Connected Pension.  The Court answered yes.

The veteran argued the spouse’s income should not be counted toward the veteran annual income for purposes of a non-service connected pension and focused on the authorizing statute.  The veteran argued (1) the Board misunderstood or misapplied § 3.23(b) by including his wife's income in its calculation of his countable income; (2) § 3.23(d)(4), which defines a veteran's annual income, is invalid because it does not comport with its authorizing statute, 38 U.S.C. § 1521, and (3) §§ 3.274 and 3.275, which impose a net worth limit on pension eligibility, superseded § 3.23's pension rate reduction scheme such that both the net worth and income limits cannot be applied to a single veteran.

The Court found “38 U.S.C. § 1521(c) clearly requires that the payable pension rate be reduced by a spouse's income because it is countable as part of a veteran's annual income. Because § 3.23(d)(4) simply makes this clear statutory mandate pellucid, it is a valid regulation and fully applicable to Mr. Hairston's pension claim.”  Id. at *7.  The Court also found §§ 3.23, 3.274, and 3.275 operate together to implement the pension program Congress established, and the Board didn't err in applying the relevant aspects of those rules here.”  Id. at *9. 

Decision by Judge Toth and joined in by Judges Pietsch and Meredith.

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Hatfield: Informed Consent and CUE

Hatfield v. McDonough, Case Number 21-5125, decided March 28, 2023 involves a claim for an earlier effective date based on CUE in a prior Board hearing.

This is a continuation of a precedential decision where in “Hatfield I, we held that the reasonable person exception to informed consent–which allows defects in informed consent that are minor and immaterial if a reasonable person in similar circumstances would have proceeded with treatment even if informed of a foreseeable risk–does not apply when no consent is obtained at all.”  Id. at *1.

After the decision, the veteran argued for CUE in a prior Board denial and that the result should be an earlier effective date.  The Court decided:

In a nutshell, the language of the statute then–as today–does not contain any reference to informed consent, and the legislative history of the statute reinforces the conclusion that the failure to obtain a patient's informed consent did not support compensation under the provision. Moreover, the regulation implementing section 351 underscores the point that a lack of informed consent did not undebatably provide a basis for compensation. Indeed, the concept of informed consent forming a basis upon which compensation was warranted does not appear in relevant regulations until the mid-1990s. Finally, we are not persuaded by appellant's argument that the common law of medical malpractice supports a finding that the only reasonable interpretation of section 351 in 1980 was that the statute provided for an award of compensation where VA did not obtain a patient's informed consent. The bottom line is that appellant fails to show that the Board's June 2021 decision finding no CUE in the October 1980 Board decision was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. Therefore, we will affirm.”

Id. at 2-3.

The Court further explained:

“In sum, and leaving aside for the moment VA's implementing regulations, to which we will turn next, appellant's CUE allegations fail to establish that the only reasonable interpretation of section 351 in 1980 included a failure to obtain a patient's informed consent before treatment or other care as a ground for the award of compensation. It certainly is not undebatable that informed consent was a ground for section 351 compensation under the law in effect at the time of the 1980 Board decision as is required to establish CUE.96 And the 2021 Board's conclusion that appellant's allegation of error did not constitute CUE is not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”

Id. at 18.

The Court summarized by stating:

“Section 351 in 1980 did not contain any reference to informed consent, nor did it

incorporate the informed-consent provisions found at section 4131 and § 17.34. Appellant fails to point to any authority indicating that a failure to obtain a patient's informed consent supported an award of compensation under section 351 in October 1980. She points to nothing to show that it is undebatable that a failure to obtain informed consent was a basis upon which the October 1980 Board could award compensation under section 351. Therefore, the Board decision on appeal finding no CUE in the October 1980 decision was not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”

Id. at page 23-24.

Decision by Judge Allen and joined in by Judges Meredith and Falvey.

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