Shorette: The VA's Stinking Fiduciary Process

Shorette v. McDonough, Case Number 23-7775, decided September 20, 2024 delves into the abuses of the VA Fiduciary Program.

The petitioner was the spouse of a veteran who had served as her husband’s VA fiduciary and was removed by the VA.  From 2008 until 2018 she had served and allocated approximately $3,000 per month toward family expenses for the veteran’s dependents.  However, she was removed after a medical record suggested she was misusing the veteran’s funds.  When a successor fiduciary was appointed, no benefits were allocated for his dependents and family expenses.

Three years later, in 2021, the VA determined their had been no misuse of funds and did not restore the wife as the fiduciary and ignored her appeal, as guardian under state court order, of VA’s appointment of a paid fiduciary.  Finally, the VA’s inaction resulted in a request that the Court order the VA to o (1) issue a decision regarding her entitlement to be reinstated as representative payee for Mr. Shorette, (2) address her complaints that his then-current fiduciary was violating a July 2010 fiduciary agreement in which VA approved monthly expenses to support the veteran's family, and (3) release the withheld funds.  Id. at *1.

After an oral argument, the Court ordered the VA to process the NOD.  Additionally, the petitioner tried to resolve the familial expenses issue with the VA.  Finally, in December 2023, the petitioner filed another petition because the VA ignored her requires for the VA’s fiduciary file, still had not process her 2018 NOD, and had not address the familial expenses issue.  As to the familial expenses issue, the VA argued that the paid fiduciary had all control. 

Next, the VA found the surviving spouse and veteran were estranged because they did not live together and thus could not be treated as a spouse fiduciary, which is less cumbersome.  In fact, they did not live together because the veteran was a nursing home.

At the same time the VA in response to one argument stated “the fiduciary must provide evidence that reimbursement is warranted before VA will authorize a reimbursement of funds.”

The Court then noted that at oral argument

“VA admittedly erred in 2018 when it determined that Mrs. Shorette misused the veteran's funds, and the undisputed facts reflect that VA compounded that error over the next 6 years by ignoring Mrs. Shorette's complaints and failing to ensure that the prior paid fiduciary was fulfilling his duties to assess the welfare and overall financial situation of the veteran's dependents. In that regard, counsel for the Secretary could not offer any reason why the fiduciary budget for familial expenses was reduced from roughly $3,200 per month to zero, other than an unfounded allegation that the petitioner refused to comply with a field examination, and counsel was unable or unwilling to say that VA will not investigate Mrs. Shorette if she reimbursed herself with those funds that would not have accumulated in the veteran's managed account but for VA's or the prior fiduciary's errors.”

Id. at *7.

The Court ordered the Secretary to file a memorandum explaining why the VA will not make a preemptive decision that it will not initiate a misuse determination or seek to remove the spouse as fiduciary if she reimburses herself the amount of familial expenses that was in the initial budget but was never paid.

While the entire VA claims process can be byzantine, the VA’s fiduciary program makes the rest of the VA look like quick and accurate justice.  The fiduciary program is simply the worst process I’ve ever heard of at the VA.  It should reiterate that any veteran who can, should avoid it if possible.  I am frankly shocked that the Veteran’s Court did not go further in its order and direct more forceful action.

Per Curiam decision by Chief Judge Bartley, Meredith and Laurer.

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Cooper: Appealing a Board Remand?

Cooper v. McDonough, Case Number 23-5963, decided September 18, 2024 is an opinion by the Court affirming prior case law stating a Board remand cannot be appealed to the Court.

The veteran’s claims were first remanded by the Court and then the Board so that the agency of original jurisdiction could obtain an addendum opinion from a medical provider. 

While case law made clear that typically remands could not be appealed, the veteran argued that the passage of the AMA dramatically changed the legal landscape and allowed for remands to be appealed. He essentially argued because under the AMA system RO decisions that were the result of a Board remand are not automatically returned to the Board, the Board decision itself represents a final decision, which confers jurisdiction onto the Court.

The Court determined that “[h]owever extensive the changes to VA's claims processing regime effectuated by the AMA may be, none directly implicates the factors governing how this Court assesses its jurisdiction, namely: (1) whether a ruling constitutes a decision per section 7252; (2) whether it is "final" per section 7266; and (3) whether it is adverse. Hence, although Mr. Cooper contends that we need to reframe our inquiry to assess finality solely through the veteran's right to "one review on appeal to the Secretary" under section 7104, it's not clear how even the most sweeping changes to VA's claims processing regime could transform the nature of an administrative remand order in such manner as to render it capable of satisfying those three requirements.”  Id. at *7.

The Court acknowledged a concern about excessive or unnecessary Board remands and stated “if a claimant believes that VA is unlawfully avoiding or unreasonably delaying issuing a final decision on a claim, the appropriate avenue for relief is to file a petition for extraordinary relief under the All Writs Act.”  Id. at *8.

This was a novel try to use the AMA to argue a larger change.  It appears the case will be appealed to the Federal Circuit.

Decision by Judge Toth and joined by Greenberg and Laurer.

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Laska: SMC(t), plain meaning, and the VA's attempt to impose a higher burden on veterans

Laska v. McDonough, Case Number 22-1018, decided September 6, 2024 concerned whether a veteran should receive SMC(t) for a traumatic brain injury and the VA’s attempt to read into the regulation a requirement for regular aid and attendance.  The Court rejected the VA’s attempt to make SMC(t) harder to get than was outlined in the statute passed by Congress.

Initially, special monthly compensation provide for compensation where service connected disabilities result in additional hardships above and beyond those contemplated by the VA’s rating schedule.  The veteran’s attorney provided both a PO box and street address on the appointment form.  The Board denied an appeal in a September 2021 decision and listed only the physical address and not the P.O. box.  The veteran appointed a VSO in January 2022 for another claim, which caused the attorney to lose access to the electronic claims file.  The attorney’s access was restored in September 2023 when the veteran appointed him again and counsel filed the NOA in December 2023. 

 The statute governing SMC(t) states it should be granted “when a veteran (1) is in need of regular aid and attendance for service-connected residuals of TBI; (2) is not eligible for compensation under subsection (r)(2); and (3) in the absence of such "regular aid and attendance," would require hospitalization, nursing home care, or other residential institutional care. 38 U.S.C. § 1114(t).”  Id. at *5. 

The regulation promulgated by the VA states that aa higher level of care is needed for "personal health-care services provided on a daily basis in the veteran's home by a person who is licensed to provide such services under the regular supervision of a licensed healthcare professional." 

 The veteran argued the VA erred in denying the claim for SMC(t) for a lack of a higher level of care because the plain language of the statute does not require it and the VA’s regulation exceeds the statute.  The VA argued that the statute was not clear on its face and the regulation was a valid definition of the level of care required for SMC(t).

 The Court was faced with statutory interpretation and determined:

 “Section 1114, as a whole, can logically be read to give the same meaning to "regular aid and attendance" in both subsection (l) and the first requirement of subsection (t), as modified with the third requirement of needing "hospitalization, nursing home care, or other residential institutional care" in the absence of regular aid and attendance. Unlike the Secretary's strained interpretation of the text and structure of section 1114(t), this reading comports with the plain language of subsection (t) and harmonizes that provision with the rest of the statute.”

Id. at *11.

The Court also stated that while the plain language was clear, the legislative history also supported their conclusion.  They noted “According to the Senate Committee, veterans with TBI not only need assistance with tasks they can no longer perform, but also someone to facilitate tasks they cannot keep up with. Id. And the Senate Committee made clear that such assistance can be provided by a family member rather than a licensed health-care professional.”  Id. at *12.  The also noted: “nothing in section 1114(t)'s legislative history reflects that Congress intended to impose a higher-level care requirement for SMC(t). To the contrary, that legislative history confirms our plain language and structural analysis that the level of care required for SMC(t) is the need for regular aid and attendance under (r)(1).”  Id

The Court concluded: “section 1114(t) specifies that the requisite level of care for entitlement to SMC(t) is the need for regular aid and attendance and the Secretary's implementing regulation, § 3.352(b)(2), requires the higher-level care described in 1114(r)(2). Thus, the regulation exceeds its authorizing statute and must be set aside as invalid.”

This is an important decision for anyone that has ever been denied a SMC(t) rating and should open the door to greater assistance.  It also demonstrates the VA’s willingness to impose higher burdens than those imposed by Congress.

Decision by Chief Judge Bartley and joined in by Judges Falvey and Laurer. 

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