Buffington: Effective Date after a Period of Active Duty

Buffington v. Wilkie, Case Number 17-4382, decided July 12, 2019 considers 38 C.F.R. 5304(c) and how it governs the effective date for a service connected veteran after his rating has been discontinued after a period of active duty.

Several years after multiple periods of active duty, the veteran requested his benefits be reinstated.  The benefits were reinstated, but the VA determined by law it was only permitted to make payments retroactive to 1 year prior to the date we receive such a request.

The veteran argued “38 U.S.C. § 5304(c) is clear—VA must ‘withhold

or suspend a veteran's benefits only 'for any period for which such person receives active service pay.’”  Id. at *3. 

However, 38 C.F.R. Section § 3.654(b)(2) provides:

Payments, if otherwise in order, will be resumed effective the day following release from active duty if claim for recommencement of payments is received within 1 year from the date of such release: otherwise payments will be resumed effective 1 year prior to the date of receipt of a new claim. Prior determinations of service connection will not be disturbed except as provided in [38 C.F.R.] § 3.105.

Compensation will be authorized based on the degree of disability found to exist at the time the award is resumed. Disability will be evaluated on the basis of all facts,

including records from the service department relating to the most recent period of active service. If a disability is incurred or aggravated in the second period of service, compensation for that disability cannot be paid unless a claim therefor is filed.

Id. at *6.

The Court followed a Chevron analysis.  First asking "whether Congress has directly

spoken to the precise question at issue."  And, only secondarily asking whether the agency's interpretation is based on a permissible construction of the statute.  The Court

determined the statutory language of Sections 1110 and 5304 do “not address the effective date for the discontinuation of benefits or, as relevant here, the effective date and terms for the recommencement of benefits.”  Id. at *8.  “In sum, Congress did not

speak to the precise question at issue: Whether the Secretary may predicate the effective date for the recommencement of benefits on the date of the veteran's claim.”  Id.

It then determined “[b] ecause there is a gap in the statute, the Court must now turn to step two of the Chevron analysis, "whether the agency's answer is based on a permissible construction of the statute." Id. at *8.  The Court then reasoned:

the Secretary promulgated § 3.654(b)(2) pursuant to Congress's express delegation to establish "forms of application." 38 U.S.C. § 501(a)(2). Although Congress chose to govern the date that VA benefits shall be discontinued upon a veteran's return to active duty, 38 U.S.C. § 5112(b)(3), Congress was silent regarding when and how VA shall resume the payment of benefits after a veteran's release from active duty. The Secretary filled the gap left by Congress and, therefore, contrary to the appellant's contention, his regulation is necessary and appropriate to carry out the laws administered by the Department. See 38 U.S.C. § 501(a).

Id. at *11.

The Court also determined equitable tolling based on misleading notice as to the 1- year period is not relevant in this case because  

§ 3.654(b)(2) is not a bar to VA benefits and does not contain a statute of limitations that may be equitably tolled. Rather, the  regulation governs the date VA benefits may be resumed following release from active duty, which is dependent on when the veteran files a claim to recommence payment of benefits. In that regard, it operates similar to effective-date provisions for awards of VA benefits, which the Federal Circuit in Andrews unequivocally held may not be equitably tolled.

Id. at *13.

 Judge Greenberg wrote a succinct dissent in which he stated

The Secretary may only prescribe rules and regulations that are "necessary and appropriate to carry out the laws administered by the Department." 38 U.S.C. § 501(a). The statute already delineates the period for which veterans may not receive VA benefits – while they are on active duty. 38 U.S.C. § 5304(c). Section 3.654(b) does not merely "create a mechanism by which VA manages compensation benefits when veterans return to active duty," as the majority states, ante at 9, it also creates an unnecessary and inappropriate impediment to a veteran receiving benefits he has already established entitlement to. The fact that VA could have adopted a regulation that prescribed the procedure of reinstating benefits without including an effective date provision is dispositive of whether 38 C.F.R. § 3.654(b) is a "necessary or appropriate" regulation. The Secretary has exceeded his statutory authority here at the expense of service-connected veterans who were called back to active duty.

Id. at *17.

The decision was by Judge Meredith and joined by Falvey.  It will be interesting to see if the case is appealed and, if so, how Judge Greenberg’s dissent influences the Federal Circuit.

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