Perciavalle: When Attorney Fees are Allowed

Perciavalle v. McDonough, Opinion Number 2023-1117, was decided May 9, 2024 by the Federal Circuit and discussed the application of Section 5904 to attorney fee decisions.

In 2006, the veteran was granted service connection for PTSD with a 30 percent rating (among other ratings).  The veteran filed an NOD.  Subsequent filings included a request for TDIU, and a 2009 NOD.  In 2016, the appellant entered into a withholding agreement to represent the veteran.  The VA ultimately increased the PTSD rating to 100 percent in March 2017, effective to 2008, and awarded SMC benefits.

The VA granted the 20-percent fee for the SMC amount of the award based on the 2009 NOD, but denied fees for PTSD.  The VA concluded the pre-Act version of section 5904 applied because the first NOD was filed before the 2007 effective date of the amendments and there had been no final BVA decision as required by the pre-Act version.  The Board and Veterans Court affirmed.

The Federal Circuit noted: “The sole issue on appeal pertains to 38 U.S.C. § 5904, which permits veterans to retain accredited agents or attorneys to present and prosecute VA benefit claims and sets forth restrictions on, among other things, when agents and attorneys may charge for their services. That provision changed over time. The dispute before us relates to which version of this fee statute applies.”  Id. at *3.

The Federal Circuit explained that from 1988 until 2007, veteran’s agents and attorneys could not charge a fee before the Board made a final decision in a case.  In 2006, Congress modified the rule so that fees were allowed after a NOD was filed (which occurs prior to the Board’s actual decision).  The Court then explained that there was no final Board decision in the case therefore if the pre-Act version of 5904 applies, the veteran’s agent was not entitled to fees.  However, if the post-Act version applies, the bar against fees at this stage did not apply.

The Court looked carefully at the statute and determined “as long as a notice of disagreement was filed on or after June 20, 2007, in the same “case” in which counsel is seeking fees as the term is defined in Jackson, the post-Act version of 38 U.S.C. § 5904(c)(1) applies.”  Id. at *11.  Thus, the Court concluded the Veterans Court applied the incorrect standard in deciding which version of 5904 applied.

The Federal Circuit explained:

“the Veterans Court took an approach that reflects a search for what the Secretary labels the single “operative NOD” for fee purposes.  Specifically, it approved the Board’s focus on identifying “which NOD precipitated the claim stream” that “led to grant of benefits.” But that approach departs from the statute. The language of § 101(h) states that the amended version of the statute shall apply “with respect to cases in which notices of disagreement are filed on or after” June 20, 2007. § 101(h), 120 Stat. at 3408. It does not presuppose that there is only one notice of disagreement in a case. It does not call for identifying a notice of disagreement for a particular “element” in a case. It does not call for disregarding all notices of disagreement except one (or perhaps more than one) that can be identified as initiating an appeal that led to the grant of benefits. It simply asks if there was any (cognizable) notice of disagreement filed on or after June 20, 2007, in the case for which the veteran’s agent or attorney seeks fees.”

Id. at *13 (internal citations omitted).

This is an important case.  A goal of the last 20 years of Congressional action has been to allow veteran’s increased access to legal assistance.  The VA’s willingness to try to thwart that access by illegally denying an attorney fee threatened to undermine the ability for veteran’s agents and attorneys to continue to do this type of work.

Opinion by Judge Taranto and joined in by Judges Stoll and Stark.

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