Roby: Liquid defined in Relation to DC 7203, Auer and Skidmore Deference Applied

Roby v. Wilkie, Case Number 17-0528, decided March 19, 2019 considers the definition of liquids in relation to DC 7203.

The veteran suffers from a narrowing of the esophagus which is rated under DC 7204 or 7203.  DC 7203 provides a 30% rating for moderate severity stricture, 50% for a stricture defined as “severe, permitting liquids only” and 80% for a stricture so severe it results in “permitting passage of liquids only, with marked impairment of general health.”  The veteran is rated at 30% and sought a higher rating.

The veteran argued he was entitled to a higher rating because “his diet is limited to foods that meet the ordinary definition of liquid, including applesauce, baby food, yogurt, and mashed potatoes.”  Id. at *5. 

The Court noted:

This case primarily involves answering two questions regarding the regulatory language of DC 7203: (1) Does "permitting" and "[p]ermitting passage," as used in the 50% and 80% evaluation criteria of DC 7203, refer to passage through the esophagus or passage into the mouth and oral cavity? and (2) What does "liquids" mean as used in the 50% and 80% evaluation criteria in DC 7203?

Id. at *6.  First, the court determined DC 7203 clearly refers to the state when the substance passes through the esophagus. Therefore, the Court concludes that the meaning of "permitting" and "[p]ermitting passage" is clear from the plain language of DC 7203 and refers to passage through the esophagus.”  Id. at *7. 

Second, the Court turned to the meaning of liquid.  It determined it could not discern a plain meaning for the term liquid from the text of the regulation, structure of purpose of DC 7203 and thus it was ambiguous.  Id. at *9.  Noting “There is no indication from the plain language of DC 7203 whether the definition of liquids should be interpreted as broadly as Mr. Roby argues or as narrowly as the Secretary argues.”  Id. 

The Court then noted the Secretary’s interpretation would be afforded deference as long as it is not plainly erroneous or inconsistent with the regulation and when there

is no reason to suspect that it does not reflect fair and considered judgment on this matter.  Id.  The Court concluded deference was due.  Id. at *10.  It determined:

The Secretary's interpretation—that the ordinary definition of "liquids" does not include

foods that have a textural quality like purees, soft solids, semisolids, or chewed solids—is neither plainly erroneous nor inconsistent with DC 7203. His interpretation comports with the ordinary definition of "liquids"; is consistent with the regulatory scheme of DC 7203, which provides higher evaluations based on greater difficulty swallowing; and aligns with the aim of the regulation.

Id. at *10.  And, the Secretary's interpretation appears to reflect his fair and considered judgment.  “Notably, his interpretation is consistent with other instances when he has interpreted "liquid" as it relates to food.”  Id.

The Court then went a step further and stated:

We stress that Auer deference is not necessary to our conclusion. Even under a less

deferential standard, the Court finds the Secretary's interpretation of "liquids" persuasive.

Here, the Secretary's interpretation was based on thorough consideration and valid

reasoning and is consistent with other interpretations of "liquid." Accordingly, deference to the Secretary's interpretation is warranted.

Id. at *11 (internal citations omitted).

The veteran argued any ambiguity should be resolved in his favor, but the Court concluded without real explanation that “the Secretary's interpretation of how the term "liquids" should be applied is not plainly erroneous, is not inconsistent with the regulation, reflects his fair and considered judgment in this matter, and is consistent with prior interpretations.  Accordingly, the Court will defer to the Secretary's interpretation.  Id. at *12.

This is a textbook case dealing with the issue of agency deference.  The Court determined terms were ambiguous, but deferred to the VA’s reasoning and persuasiveness.  It is probably emblematic of the reasoning of cases in what is likely a post-Kisor v. Wilkie legal landscape.  A discussion of both Auer and Skidmore deference.  What is most troubling to me is the way the Court failed to truly grapple with the impact of Gardner and the pro-veteran interpretative canon.

Decision was drafted by Judge Bartley and joined in by Judges Schoelen and Meredith.

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Ray: Substantial Gainful Employment Defined

Ray v. Wilkie, Case Number 17-0781, decided March 14, 2019 is an important decision that considers and defines the term substantial gainful employment in relation to TDIU claims.

The definition of “substantial gainful employment,” which comes into play with TDIU claims is an important issue.  For decades the VA has taken the position that the term should not be defined so as to preserve a maximum freedom to assess on a case by case basis whether a veteran should receive TDIU.  From an attorney’s perspective, the result has been we often do not have a good idea about why the VA has deemed the veteran able to obtain and maintain substantial gainful employment.  In fact, the Court has essentially agreed that the open ended definition of the term by the VA is problematic and in its decision the Court noted:

Despite this issue's appearance before the Court so often, the Court's repeated

encouragement, and the GAO findings, the Court again recently declined to define "substantially gainful employment" "without first allowing VA to take a position on the matter,"62 noting that "[i]t is VA's responsibility to define the terms contained within its regulations and the Court encourages it do so." Yet, from Ferraro in 1991 to Ortiz-Valles in 2016 to the matter before us today, VA has refused to provide an adequate definition. The lack of any articulable standards by which veterans' extraschedular TDIU claims are judged renders the Board's reasons or bases here inadequate.

Id. at *10.

The Court then stated that due to the VA’s inaction, it “step in and interpret the meaning of being ‘unable to secure and follow substantially gainful employment.’  This isn't a revolutionary exercise. Indeed, unless they must defer to the promulgating agency, courts regularly define regulatory terms when they're ambiguous.”  Id. at *11.

The Court then notes the regulation is ambiguous and provides at best an incomplete definition.  The Court then refuses to defer to the VA’s proferred interpretation (employment producing income exceeding the poverty threshold for one person).  The Court notes among other things the VA had traditionally refused to provide a definition and only did so in this case in a supplemental brief and did not explicitly ask for deference.  The Court also rejected Skidmore deference (a less binding form of deference owed to agencies) saying the proffered interpretation seemed to be inconsistent with its long advocated position and the VA failed to explain the basis of its guidance.  Id. at *12-13.

The Court then determined “Ideally, VA, with its expertise, would have interpreted the phrase at some point after this Court first encouraged it to do so in 1991, but it hasn't. So, we provide guiding principles to frame the proper inquiry for extraschedular TDIU.”  Id. at *15.

The Court then examined the language of the regulation as well as relevant case law and determined

Thus, after canvassing this Court's TDIU caselaw, relevant Social Security regulations, and the parties' arguments, we interpret the phrase "unable to secure and follow a substantially gainful occupation" in § 4.16(b) to have two components: one economic and one noneconomic. The economic component simply means an occupation earning more than marginal income (outside of a protected environment) as determined by the U.S. Department of Commerce as the poverty threshold for one person. As for the noneconomic component, the Secretary himself states that "determining eligibility for TDIU requires more than determining the presence or absence of employment producing income exceeding any particular threshold," and "the ultimate inquiry is instead on the individual claimant's ability to secure or follow that type of employment.

Id. at *16.

The Court then noted it also had to consider the meaning of the veteran’s ability to secure and follow substantial gainful employment.  It determined that while this was not a checklist that had to be rigidly followed, the VA should pay attention to:

• the veteran's history, education, skill, and training;
•  whether the veteran has the physical ability (both exertional and nonexertional) to perform the type of activities (e.g., sedentary, light, medium, heavy, or very heavy) required by the occupation at issue. Factors that may be relevant include, but are not limited to, the veteran's limitations, if any, concerning lifting, bending, sitting, standing, walking, climbing, grasping, typing, and reaching, as well as auditory and visual limitations; and

• whether the veteran has the mental ability to perform the activities required by the

occupation at issue. Factors that may be relevant include, but are not limited to,  the veteran's limitations, if any, concerning memory, concentration, ability to adapt to change, handle work place stress, get along with coworkers, and demonstrate reliability and productivity.

Id. at *17.

A concurring and dissenting opinion by Judge Toth agreed with the notion the case needed to be remanded due to reasons and bases, but declined to join in the defining of the term substantial gainful employment.  Judge Toth agreed the lack of a VA definition was problematic and noted “One cannot help notice a recurring theme: VA promulgates broad, open-ended regulations containing undefined terms and then ignores this Court's entreaties to develop working definitions for such terms.”  Id. at *22.  It even noted: when an agency makes no attempt over the course of decades to define specific terms, the usual interplay between court and agency breaks down. Rather than treating its regulations as closely held property, VA would do well to recognize that this Court retains not only the authority to provide the final interpretation of its regulations, but the obligation to do so.

Id. at *23.  He even agreed that Auer deference should not be given to the VA’s profferred definition of substantial gainful employment.  Id.  But, disagrees about the proffered definitions persuasiveness under Skidmore deference.  Id.  He argues the VA’s interpretation is a natural reading cohering to the overall structure and context of Section 4.16 and is a clear definition.  Ultimately, he takes a conservative view of Court authority and states:

I believe that it goes beyond interpreting the text of a regulation drafted by a separate branch of government and instead grafts on substantive factors that do not derive from

the regulation itself.  To me, this falls closer to an exercise of legislative than judicial authority.  Because courts possess no such legislative authority, we cannot impose on agencies our own notions of what laws and procedures we deem best.

Id. at *25.

The decision was by Judge Allen, joined in by Judge Schoelen with the concurrence and dissent by Judge Toth.  I suspect this case will result in an appeal to the Federal Circuit.  But, it is still important to all veterans seeking TDIU.  In many ways, it probably formalizes what many attorneys were already doing—using vocational rehabilitation experts to discuss the issues raised by the Court.  The case also reveals that while the newer Judge Toth seems to recognize the VA’s dysfunction, his conservative judicial philosophy makes him more willing to defer to the VA’s interpretations.  It will be interesting to see how this philosophy plays out over years on the bench and is a factor advocates should consider when framing issues that will appear before him. 

Again, it is likely the VA will appeal this decision; however, the truth is that it really just creates a basic framework by which they should render TDIU decisions.  Rather than spending energy appealing it, they should probably just start the work of following it.

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