Procopio: Bluewater Veterans and Agent Orange Exposure

Procopio v. Wilkie, Opinion Number 2017-1821, decided January 29, 2019 is a decision of the Court of Appeals for the Federal Circuit which explicitly rejects the VA’s foot on the ground with regard to Vietnam.  It holds that veterans who served in the 12 nautical mile territorial sea of the “Republic of Vietnam” are entitled to the Agent Orange presumption.

This has been a long fought battle between the advocates, Congress, and the VA.  The VA has long argued that a veteran was not entitled to a presumption of herbicide exposure if they had not set foot in Vietnam whereas advocates had argued the presumption should extend to bluewater veterans.  In fact, the Federal Circuit had considered this argument 10 years prior in Haas v. Peake, 525 F.3d 1168

(Fed. Cir. 2008) and accepted the VA’s position.

However, in this case, the Federal Circuit sat en banc (meaning all members of the Court heard the case rather than a three person panel) and explicitly overturned Haas and rejected the VA’s argument.

The VA had long sought to argue the law as to the presumption was ambiguous in terms of whether it applied to bluewater veterans and thus the courts should defer to their interpretation under a series of cases calling for deference to an agencies interpretation of law and regulations. 

The majority opinion sidestepped the question of agency deference by focusing on the term Republic of Vietnam and determined that based on international law, the term Republic of Vietnam should include the territorial waters of the country.

A concurring opinion by Judge Lourie argued the question should not be controlled by the international law concept of territorial waters, but determined the term “served in the Republic of Vietnam” is ambiguous.  It then determined the agency’s interpretation is not owed deference because the plain meaning of the regulation includes “service in the waters offshore” and “service in other locations if the conditions of service involved duty or visitation in the Republic of Vietnam.”  “Thus, a veteran who served in the “waters offshore” is included within the meaning of “service in the Republic of Vietnam” and

entitled to presumptive service connection.”

Another concurring opinion by Judge O’Malley agreed with the reading of “Republic of Vietnam” as unambiguously encompassing territorial waters.  However, she wrote separately to further to state she believes the pro-veteran canon of construction adds further support for that conclusion.  “Specifically, I write to explain that: (1) the pro-veteran canon, like every other canon of statutory construction, can and should apply at step one of Chevron to help determine whether a statutory ambiguity exists;

and, (2) even when a statute remains irresolvably ambiguous, when a choice between deferring to an agency interpretation of that statute—or particularly where that

interpretation is itself ambiguous—and resolving any ambiguity by application of the pro-veteran canon come to a head, traditional notions of agency deference must give

way.”  What follows is an exceptionally well-reasoned attacked against Auer deference, which will likely serve as assistance in the expected Supreme Court decision in Kisor.

Judge Chen wrote a dissent joined in by Judge Dyk which argued the statute was ambiguous.  However, it refused to reach a conclusion saying that information on bluewater veterans was in such a state of flux.

This case is powerful and will assist many Bluewater Vietnam veterans in obtaining service connection and earlier effective dates.  While the Secretary will likely seek review by the Supreme Court, I would expect for the writ to be denied as the Court has already agreed to hear another high profile case (Kisor v. Wilkie) and only has so much appetite and time for veterans law cases.

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George: CUE in Light of a Change in the Law as to the Presumption of Soundness

George v. Wilkie, Case Number 16-2174, decided January 4, 2019 considers CUE in a prior decision in light of a change in the law.

The veteran sought service connection for schizophrenia in 1975 and was denied service connection.  The denial stated it pre-existed service and there was no permanent aggravation during service. 

In 2014, the veteran filed a motion to revise the prior opinion on the basis of clear and unmistakable evidence (CUE).  Specifically, it was alleged the VA had filed to apply 38 USC 311 (the presumption of soundness) in the first decision as the VA had not rebutted the presumption of sound condition with clear and unmistakable evidence that the condition was not aggravated by service.  The VA admitted the Board did not discuss the soundness statute or explain how CUE existed that the veteran’s condition had pre-existed service and was not aggravated.  But, the Board determined the VA nonetheless considered the evidence and the allegation of evidence was really just a simple disagreement as to the weight of evidence.  Id. at *3. 

The Court discussed  CUE and the presumption of soundness especially in light of Wagner v. Principi, 370 F.3d 1089 (Fed. Cir. 2004).  Wagner determined the presumption of soundness must be rebutted solely by clear and unmistakable evidence and that the evidence must show both preexistence and no in-service aggravation of the condition.  Id. at *6. 

The Court then framed the issue as the competing theories of finality and retroactivity.  It then determined:

we find that the Federal Circuit's announcement in Wagner in 2004 of what section 1111 means cannot defeat the finality of a 1977 Board decision, see Harper, 509 U.S. at 97. This is so because consideration of CUE requires the application of the law as it was understood at the time of the 1977 decision, see Willsey, 535 F.3d at 1373; Russell, 3 Vet.App. at 314, and Wagner does not change how section 311 (now section 1111) was

interpreted or understood before it issued.

Id. at *10.  The Court explained that:

In 1977, the Board was required to apply the law as it existed at that time, including § 3.304(b), requiring the Secretary to rebut the presumption of soundness with only clear and unmistakable evidence that an injury or disease existed before service. See 38 C.F.R. § 19.1 (1977) ("In its decisions, the Board is bound by the regulations of the Veterans Administration, instructions of the Administrator and precedent opinions of the chief law officer."). Consequently, it is not clear how the Board could have ignored this regulation or why the Board would have been required to find clear and unmistakable evidence of aggravation in 1977. This regulatory interpretation of the statutory presumption of soundness, requiring the Secretary to rebut the presumption only with clear and unmistakable evidence that a disability preexisted service, prevailed until 2003.

Id. at *11.  Thus, the Court determined “Because we find that Wagner does not apply retroactively to final decisions, we conclude that the 2016 Board correctly stated the law as it existed in 1977.” Id. at *12.  It appears this might have been different if the decision in this case had been open for direct review when Wagner was decided.  Id. at *14. 

The Court then concluded that in the alternative “the 2016 Board did in fact assess Mr. George's CUE allegation as to both preexistence and aggravation and Mr. George fails to establish that the 2016 Board erred in concluding that the 1977 Board's errors as to each prong would not have manifestly changed the outcome of its 1977 decision.”  Id. at *15.  The Court relied on the evidence of conflicting evidence as to pre-existence and aggravation, and determined the veteran did not carry his burden of demonstrating a manifestly changed outcome.  Id. at *16

Judge Bartley wrote a persuasive dissent attacking the majorities understanding of Wagner as containing a new understanding or interpretation of the soundness statute and arguing the conclusion that there was no CUE was error because “had the Board properly

applied the statutory presumption of soundness in September 1977 and not analyzed Mr. George's claim as one for service connection based on aggravation of a preexisting mental disorder, it would have had no choice but to grant him service connection.”  Id. at *17.

Judge Bartley argued

Wagner did not, as my colleagues suggest, contain a new understanding or interpretation of section 1111 that would need to be applied retroactively in order for Mr. George to prevail on his CUE motion. Rather, the Federal Circuit's judicial construction of section 1111 in Wagner provided "an authoritative statement of what the statute meant before as well as after the decision of the case giving rise to that construction."  Although the Federal Circuit's statement of the law differed from VA's pre-2003 interpretation of section 1111 set forth in 38 C.F.R. § 3.304(b), Wagner's implicit rejection of that interpretation did not constitute a change in law. Instead, Wagner recognized that VA had "misinterpreted the will of the enacting Congress" and reaffirmed "what the statute has meant continuously since the date when it became law."

Id. at *17-18 (internal citations omitted).

As to the merits, Judge Bartley argued “the Board misapplied the law extant in 1977 because it did not afford Mr. George the presumption of soundness even though it failed to find a lack of in-service aggravation of schizophrenia by clear and unmistakable evidence” and, in fact, appears to have improperly applied the law regarding a claim for aggravation under 38 U.S.C. § 353, which places the burden to prove aggravation on the veteran.  Id. at *20.  Finally, she determined that had the Board properly applied the presumption of soundness in its first decision, it would have granted service connection for schizophrenia.  Id. at *21.  She also focused on the fundamental fairness of this case and reminded us that:

The language of section 311 in September 1977 was the same language in section 1111 in June 2004 that the Federal Circuit in Wagner described as "clear" and susceptible of only one interpretation. 370 F.3d at 1093. The only reason that Mr. George was deprived of the benefit of the presumption of soundness clearly envisioned and expressed by Congress was that a VA regulation, which was "inconsistent with the statute" and "impose[d] a requirement not authorized by [the statute]," dictated a different result. VA Gen. Coun. Prec. 3-2003 (July 16, 2003). Because, under Rivers and Patrick III and VI, the version of section 311 extant in September 1977 meant what the Federal Circuit in Wagner said that Congress clearly intended it meant, VA's failure to abide by that

statutory command constituted an undebatable and outcome-determinative misapplication of the law. Because CUE was designed to remedy precisely this type of error, see Joyce v. Nicholson, 19 Vet.App. 36, 48 (2005); Russell v. Principi, 3 Vet.App. 310, 313-14 (1992) (en banc), I cannot agree with my colleagues that, before the Wagner decision in 2004, VA's failure to rebut the statutory presumption of soundness by a showing of clear and unmistakable evidence that a condition both preexisted service and was not aggravated by service could not constitute CUE.

Id. at *23.

The majority opinion leads to a harsh result where CUE is ineffective to challenge a past decision where case law has since interpreted a statute as being broader than the VA’s interpretation.  I believe Judge Bartley’s dissent is persuasive and would expect that this case will be appealed to the Federal Circuit and would hope for a better result there.

As a side note, the majority argued secondarily that it was concerned about the impact of allowing such CUE claims:

The impact of allowing judicial decisions interpreting statutory provisions issued after final VA decisions to support allegations of CUE would cause a tremendous hardship on an already overburdened VA system of administering veterans benefits. Each judicial interpretation of a statute which changes a previously accepted meaning of the statute could spawn hundreds of allegations of CUE in prior final decisions. As a result of a deluge of CUE motions, VA's limited resources would be diverted from processing claims and hearing appeals to evaluating allegations of CUE based on new statutory interpretations.

Id. at *14.  Frankly, I would expect this argument from C.J. Davis.  However, I believe Judge Bartley persuasively argues

The circumstances of Wagner and this case are relatively narrow—both cases involve application of a plain language judicial interpretation of a statute to a claim that was denied on the basis of a VA regulation that clearly conflicted with that statute. But even if the Rivers's theory of judicial construction would apply more broadly in the veterans' benefits CUE context, I have no reservations about requiring VA to remedy decades-old

errors that prohibit otherwise deserving veterans and their dependents from receiving the benefits to which they are statutorily entitled. I simply cannot endorse a CUE regimen that is so willing to exchange justice for administrative efficiency.

Id. at *19-20.  This line of argument focused on the VA’s hardship is deeply troubling to me as a practitioner as it only supports VA conclusion and never cuts in favor of helping a veteran.  Furthermore, arguments to the Court for broader forms of class relief or specific writs in old cases (hardship faced by the veteran) are often not met with grants.  Thus, it appears the Court is more willing to weigh the VA’s hardship than the group the VA is supposed to serve.

Decision by Chief Judge Davis and joined in by Judge Meredith with Judge Bartley dissenting.

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Burkhart: Home Loan Guarantees Do Not Arise from Section 1151 Claims

Burkhart v. Wilkie, Case Number 16-1334, decided January 3, 2019 is an opinion that has limited application, but applies interesting concepts of statutory interpretation and equitable principles.

The case concerns a surviving spouse who obtained DIC benefits as a result of a Section 1151 claim after her husband died due to VA medical treatment.

In 2007, the widow sought a home loan guarantee form the VA and was issued a certificate of eligibility (COE), but she never purchased a home.  In 2013, she requested another home loan guarantee and was told she was not eligible for one and the 2007 COE was issued in error.  This appeal resulted.

The Court took a very deep dive into the language of Section 1151 claims and Chapter 37 of title 38 of the U.S. Code (which governs VA guaranteed home loans).  The widow made three arguments: 1) a surviving spouse under Section 1151 is entitled to ancillary home loan guarantee benefits; 2) whether 38 USC Section 3721 (the incontestability provision) found in the home loan guarantee chapter prevents the VA from contesting her eligibility after the first COE was issued; and 3) whether equitable principles apply such as the Court should compel the VA to grant the COE.  Id. at *1. 

The first point involved a close reading of the chapter governing home loan guarantees and a conclusion by the Court that “Based on section 3701’s plain language, the appellant is not eligible for chapter 37 benefits under section 3701’s definition of "veteran" because her husband lacked a service-connected disability and his death was not service connected.”   Id. at *6.  The Court then looked at a case related to this area of the law Kilpatrick v. Principi, 327 F.3d 1375 (Fed. Cir. 2003).  In Kilpatrick involved specially adapted housing benefits and determined:

Section 1151's predecessor statute listed benefits available to veterans who suffered disability or death resulting from VA care, with specially adapted housing benefits among them. Id. Decades later, Congress reorganized what is today title 38 but failed to include the specially adapted housing benefit among those provided to the veterans who suffered disability or death resulting from VA care. Id. at 1380-81. Because "where you end up depends on where you begin," the Federal Circuit determined that, because Congress had expressly conferred those benefits on veterans, mere reorganization of various statutory provisions did not evince congressional intent to deprive veterans of those benefits that Congress had previously conferred.

Id. at *7.

 

The Court then reviewed Section 1151 and Section 3701’s plain language and legislative history and determined nothing suggested Congress intended section 1151 beneficiaries to receive chapter 37 benefits.  Id. at *8. 

Next, the Court turned to the incontestability provision and determined that a fiar reading of Section 3721 was that “Congress clearly intended the incontestability provision to apply to the relationship between the Government and lending institutions such as banks, not the Government and COE recipients, and as to the documents guaranteeing the loan, not a COE.”  Id. at *9. 

Finally, the Court turned to the equitable doctrines of injunctive relief, equitable estoppel, laches and waiver.  Initially, the Court noted any equitable powers it has are constrained by the Court’s limited jurisdiction, but does point out that the Secretary has been granted equitable powers and thus sets up further arguments that the Secretary is not properly using its equitable powers.  The other arguments related to the specific equitable doctrines sought to be relied upon are summarized as 1) injunctive relief (the Appellant must establish an entitlement to prevail, which the injunction itself cannot do); 2) estoppel (the court reasoned the incontestability provision acted like estoppel and because “Congress uses explicit statutory grants to give private parties this privilege, we decide

that Congress's decision not to grant this privilege to others means that Congress intended to withhold this privilege from them”); laches and waiver (these are not affirmative theories of relief but defensive theories).  Id. at *16-17

Judge Greenberg wrote a concise dissent which pinpointed the problem: “Title 38 is an imperfect collage meant to organize decades of Congressional intent towards veterans

into a consumable statutory scheme.”  Id. at *18.  He argued: “The addition of section

1151(c) does not reflect the desire of Congress to limit ancillary benefits under this section to those in chapters 21 and 39. Such a position would suggest that Congress intended to provide specially adaptive housing and automotive benefits, but no other benefit, to a woman who is a widow solely because of improper VA care. There is no logical justification for this conclusion.” Id. at *18. 

I understand and appreciate Judge Allen’s opinion and focus on the words of the legislation, but believe Judge Greenberg points to the real problem—VA laws are a patchwork that have been added to and reorganized so often as to create inconsistencies that were likely not intended.  This case really serves as a call to Congress to fix an unintended problem.

Decision by Judge Allen and joined in by Judge Bartley.  Dissent by Judge Greenberg.

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Stewart: Medically Unexplained Chronic Multisymptom Illnesses (MUCMIs) Explained

Stewart v. Wilkie, Case Number 15-4458, decided December 20, 2018 considers the definition and exclusion of a MUCMI.

The veteran sought service connection for asthma as a MUCMI pursuant to 38 U.S.C. § 1117.  “Section 1117 of title 38 of the U.S. Code provides presumptive service connection to Persian Gulf War veterans who suffer from a ‘qualifying chronic disability.’  The statute states that a ‘qualifying chronic disability’ may result from (a) an undiagnosed illness; (b) a MUCMI ‘(such as chronic fatigue syndrome, fibromyalgia and irritable bowel syndrome) that is defined by a cluster of signs and symptoms’; or (c) any diagnosed illness that the Secretary determines by regulation warrants a presumption of service connection.”  Id. at *3.  The Board denied service connection, reasoning hat because the etiology of asthma is “partially understood” that it could not be considered a MUCMI.

The Court looked at the language regarding a MUCMIs and determined it is clear and unambiguous and “is a medically unexplained chronic illness.”  The Court then stated the term “medically unexplained” was not defined by Congress and in fact the authority to define it was delegated to the VA.  The Court then focused on the VA’s exercise of that authority, 38 C.F.R. § 3.317(a)(2)(ii).

Section 3.317(a)(2)(ii) states:

the term MUCMI is a diagnosed illness without conclusive pathophysiology or etiology, that is characterized by overlapping symptoms and signs and has features such as fatigue, pain, disability out of proportion to physical findings, and inconsistent demonstration of laboratory abnormalities. Chronic multisymptom illnesses of partially understood etiology and pathophysiology, such as diabetes and multiple sclerosis, will not be considered medically unexplained.

The Court then noted “It is clear that the regulation seeks to define the undefined statutory phrase ‘medically unexplained.’  To that end, VA has decided that  ‘pathophysiology’ and ‘etiology’ are decisive factors in determining whether an illness is ‘medically unexplained.’”  Id. at *4.

The Court then dissects the language of the regulation and explains:  “the Court

concludes that the plain meaning of the first sentence in the subsection is that a multisymptom illness is a MUCMI if either the etiology or the pathophysiology of the illness is inconclusive.”  Id. at *6.  And, “the plain meaning of the second sentence is that a multisymptom illness is not a MUCMI if both the etiology and the pathology of the illness are partly understood.”  Id.

Related to the case at hand,

Applying the plain meaning of § 3.317(a)(2)(ii) to this case, Mr. Stewart is correct that the Board misapplied the regulation. Under the proper interpretation of the law, an illness is a MUCMI where either the etiology or pathophysiology of the illness is inconclusive. Conversely, a multisymptom illness is not a MUCMI where both the etiology and the pathophysiology of the illness are partially understood. Here, the Board concluded that Mr. Stewart's asthma was not a MUCMI because asthma has a "partially understood etiology." R. at 8. The Board did not make a finding that the pathophysiology of asthma was also "partially understood," as it was required to do under the law.

Id. at *7. 

The veteran also argued “that if the etiology of his individual asthma is  unknown, it may qualify as a MUCMI, even though the etiology of asthma as it generally affects the public has a partially understood etiology or pathophysiology.”  Id. at *7.  The Court noted  “Essentially, the parties disagree on whether the term ‘medically unexplained’ requires VA to identify the cause of a specific veteran's illness or whether the question may be resolved by general knowledge in the medical community about the illness.”  Id. at *7.  The Court relied on Goodman v. Shulkin, 870 F.3d 1383, 1386 (Fed. Cir. 2017) to determine that whether an illness is medically unexplained is particular to the claimant in each case.  Id. at *8.

The Court then asked whether the evidence was adequate to decide the veteran’s case, and determined the VA medical examination was inadequate and remanded for the examiner to address: the etiology and pathophysiology of the veteran’s asthma.

This was a split decision with Chief Judge Davis writing a persuasive concurrence and dissent that essentially argued the VA’s regulation is more restrictive than the statute.  It begins by arguing medically unexplained is defined by reading the entire statute.    

Judge Schoelen also separately weighed in to write and challenge the notion that “The majority concludes that if the etiology of a veteran's specific illness is unknown, the

illness may be considered a MUCMI, even though the etiology of the disease as it generally affects the public is known.:  Id. at *22.  She argues that “had Congress intended that the defining characteristic of a MUCMI was whether the etiology of a veteran's specific illness was understood, it would have clearly stated this in the statute.”  Id.

This is an important decision if you have Southwest Asia service between August 1990 and December 2021 and a disability that is not easily explained.  It rejects the VA’s argument that the if either etiology or pathophysiology are partially understood than the illness can’t be a MUCMI.

The decision was by Judge Pietsch with concurrences and dissents by Chief Judge Davis and Judge Schoelen.

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Simon: CUE and Rating Reductions

Simon v. Wilkie, Opinion Number 17-1361, decided December 20, 2018 addresses CUE in a decade’s old rating reduction and specifically focuses on 38 C.F.R § 3.344. 

Section 3.344 concerns reductions and creates safeguards, but only applies “to ratings which have continued for long periods at the same level (5 years or more).”

In March 1968, the veteran received an initial rating for PTSD of 50%.  An October 1969 decision reduced the rating to 30% and that decision was not appealed.  In 1974 (but less than 5 years later), the RO reduced the rating again from 30% to 10%. 

In 2014, the Appellant alleged the reduction from 30% to 10% was CUE.  He argued that because he had a PTSD rating of 50% from 1968 to 1970 and a rating of 30% from 1970 to 1974, he had maintained a rating of at least 30% for longer than the 5-year period outlined in the regulation.   Therefore, the VA committed CUE when it did not apply the protections in Section 3.344.

The Board rejected this argument saying a veteran has to have the exact same disability rating for at least a 5 year period.  Interestingly, the Secretary argued “that combining different rating periods is permissible under the regulation, but asserts that the rating protection can be earned through such combination only when the disability rating has increased within the 5-year period, i.e., when the condition is worsening.”  Id. at *7.

However, the Court rejected both parties’ interpretations.  Id. at *8.  It held that “The plain language of the regulation makes clear that the 5-year requirement can't be met by combining 2 periods with different rating percentages no matter whether the ratings fluctuated upward or downward.  The Court holds that a rating becomes entitled to heightened procedural protections under § 3.344(c) only when it has existed at the exact same percentage for at least 5 years.”  Id.

The Court’s reasoning stuck closely to the plain meaning of the regulation and especially the term “same level” which it determined was clear and did not include the proffered interpretations.  The Court then stated that looking through the lens of CUE, the Board applied the regulation properly.   

This is a hard decision that highlights why a veteran needs to carefully weigh whether to challenge and appeal a reduction rather than just accepting it.  A veteran might especially challenge a rating when he is below the 5 year term.

Decision by Judge Allen and joined in by C.J. Davis and Judge Falvey.

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