Youngblood: Multiple Service Connected Disorders And SMC

Youngblood v. Wilkie, Case Number 18-0378, decided September 12, 2019 a veteran seeking SMC at the housebound level based on an argument that multiple servicec connected disorders defined as “one disability” under 38 C.F.R. Section 4.16(a).  The Court ruled against the veteran.

The veteran was service connected for the left and right knees and initially granted a combined rating of 70%.  Subsequently, it was increased to a rating of 60% and 20% with a combined rating of 80% and TDIU was granted.  Later, the RO granted service connection for renal insufficiency and kidney disease with a staged rating of 60%, followed by 80%, and then 100%.  The veteran was also granted SMC (housebound) with an effective date of the 100% kidney disease rating.  The veteran sough an effective date of 2001 for SMC (housebound) and the Board denied.

38 U.S.C. § 1114(s) states:

If the veteran has a service-connected disability rated as total, and (1) has additional service-connected disability or disabilities independently ratable at 60 percent or more, or, (2) by reason of such veteran's service-connected disability or disabilities, is permanently housebound, then the monthly compensation shall be $2,993. For the purpose of this subsection, the requirement of "permanently

housebound" will be considered to have been met when the veteran is substantially confined to such veteran's house (ward or clinical areas, if institutionalized) or

immediate premises due to a service-connected disability or disabilities which it is reasonably certain will remain throughout such veteran's lifetime.

Id. at *1.  The Court then defined the issue as:

The only part of section 1114(s) at issue in this case is the opening clause. VA concluded that on September 4, 2012, the appellant became eligible for section 1114(s) benefits because the 3 RO assigned a 100% disability rating to his polycystic kidney disease effective on that date, causing it to become "a service-connected disability rated as total." 38 U.S.C. § 1114(s); R. at 1409. The appellant believes that he became eligible for section 1114(s) benefits on July 31, 2001, because the TDIU award that became effective on that date also is "a service-connected disability rated as total." The Secretary does not dispute the appellant's assertion that he met the other criteria for section 1114(s) benefits in July 2001. If, therefore, the appellant's argument is correct, then he will be entitled to receive the effective date that he requests.

The parties do not question the general meaning of the phrase "a service-connected disability rated as total." They agree that it means one single disability to which the agency has assigned a 100% disability rating. See VA Gen. Coun. Prec. 66-91 (Aug. 15, 1991); Guerra v. Shinseki, 642 F.3d 1046, 1049-50 (Fed. Cir. 2011). Multiple, separately rated disorders do not suffice, even if the combined disability rating of those disorders reaches 100%. Bradley v. Peake, 22 Vet.App. 280, 290-91 (2008). The appellant does not dispute that he was not entitled to a 100%

schedular disability rating for a single service-connected disability during the period under consideration

Id. at *2.

The Court then noted that caselaw plainly states TDIU based on a single service connected disorder is sufficient to meet the “a service-connected disability rated as total” requirement in section 1114(s) even if the VA assigned that disorder a rating less than 100%.  Id. at *2-3.  But, the Court noted the RO based the TDIU award in this case on the left and right knees.  Whereas 1114(s) has a single disability requirement.  The veteran attempted to satisfy the single disability requirement by reference to 4.16(a) (the one disability clause). 

The Court explained that 4.16(a) allows for a grant of TDIU by a rater (and does not require higher agency action) if certain requirements are met, if those requirements are not met, TDIU has to be gained through 4.16(b).  However, 4.16(a) only applies if the veteran’s assigned disability ratings reach certain baseline thresholds (namely a single disability of 60% or a ratable disability at 40% with a combined rating of 70%).  Id. at *5.  The Court then stated:

We conclude that, because the Secretary plainly stated that the purpose of the "one disability" phrase was to assist certain veterans in reaching the baseline disability rating

requirements to benefit from § 4.16(a), then no other purpose can be read into the regulation, including retaining the "one disability" designation to establish "a service-connected disability rated as total" for SMC eligibility. The unambiguous specificity of the Secretary's purpose clause is decisive and excludes all uses for the phrase "one disability" as it appears in § 4.16(a) other than the one provided.

Id. at *5.  The Court acknowledged the veteran argued application of that clause means that his service-connected disorders "are to be considered one disability for purposes of TDIU" and that he was "entitled to TDIU based on his single service-connected disability."  Id. at *6.  But rejected this position because it adds more to the regulation than its plain meaning can bear explain the one disability clause exists to determine whether a TDIU request is eligible to adjudicated under 4.16(a) as opposed to 4.16(b).  The Court determined “[d]eciding whether to aggregate disability ratings is the one and only purpose for considering disorders to be ‘one disability’ in Section 4.16(a).”  Id. at *6. 

As applied to this case, the Court stated that while the RO could deem the veteran’s bilateral leg disability one disability for purposes of entitlement to proceed under Section 4.16(a), “once the RO reached the adjudication phase of the appellant's TDIU request, the

‘one disability’ phrase had served its purpose and faded from view.”  Id. at *6.

In this case, the Court foreclosed the opportunity to use multiple disabilities used under 4.16(a) as “one disability” for purposes of SMC.  The conclusion is a limiting one for veterans.

This was a decision by Judge Pietsch and joined in by Judges Bartley and Meredith.

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Wolfe and Boerschinger: Class Actions for ER Costs

Wolfe and Boerschinger, Case Number 18-6091, decided September 9, 2019 granted class action to a class of veterans who had treatment at the ER and were requesting the VA to refund the costs.

In Staab v. McDonald, 28 Vet. App. 50 (2016), the Court found the VA had wrongly denied claims for reimbursement of non-VA emergency care whenever a veteran had any insurance covering the service.  Staab held the VA had erroneously interpreted 38 U.S.C. Section 1725.  However, after Staab, the VA adopted a new regulation purporting to implement Staab, but actually

VA excluded from reimbursement nearly every type of expense a veteran could have incurred if he or she had insurance covering the non-emergency VA medical service at issue. So, after Staab, VA adopted a regulation that functionally creates a world indistinguishable from the world Staab authoritatively held impermissible under the statute. As the petitioners put it, "post-Staab, insured veterans are in exactly the same monetary position with respect to insured claims as they were pre-Staab."

Id. at *2.

The Court continued in its concern for VA action and stated:

It's difficult to conceive how an agency could believe that adopting a regulation that mimics the result a Federal court held to be unlawful is somehow appropriate when the statute at issue has not changed.  But there is more. Even after we decided Staab, and after VA dropped its appeal of Staab, VA was affirmatively informing veterans that they were not entitled to reimbursement for non-VA emergency medical care if they had any insurance covering the service at issue. In other words, the Agency was telling veterans that the law was exactly opposite to what a Federal court had held the law to be. Who knows how many veterans relied on such a misrepresentation—for that is what it was—in deciding not to appeal VA decisions that denied reimbursement for non-VA emergency

medical care 

All of this is unacceptable.

Id. at *2.

The Court engaged in a careful analysis of the Staab statutory, then certified the class (all claimants whose reimbursement of emergency medical expenses incurred at non-VA facilities VA has or will deny, in whole or in part, on the grounds that they expenses are part of the deductible or coinsurance payments for which the veteran is responsible.).  Id. at *28. 

The Court then looked at the merits of the petition and determined it had the right to issue extraordinary writs in aid of its jurisdiction according to the All Writs Act.  The Court noted the statute (38 U.S.C. Section 1725(c)) says "The Secretary may not reimburse a veteran under this section for any copayment or similar payment that the veteran owes the third party or for which the veteran is responsible under a health-plan contract."  It further explains the regulation (38 C.F.R. Section 17.1005(a)(5) states: "VA will not reimburse a veteran under this section for any copayment, deductible, coinsurance, or similar payment that the veteran owes the third party or is obligated to pay under a health-plan contract."  Id. at *29.  The Court then determines

The question is whether VA's inclusion of "deductibles" and "coinsurance" (but not "balance billing"197) in the list of non-reimbursable items is a permissible construction of section 1725. No matter what standard of review we use, it's not. We hold § 17.1005(a)(5) is not based on a permissible construction of section 1725(c)(4)(D) for two related, but distinct, reasons: (1) It's inconsistent with Staab's interpretation of section 1725, and (2) deductibles and coinsurance aren't "similar" to a copayment (and VA didn't explain—to defeat arbitrariness—how they're "similar" to a copayment).

Id. at *29.  After discussing the merits, the Court determined the veteran has shown she lacks adequate alternative legal channels to obtain relief.  The Secretary wanted the veteran to argue the issue to the Board of Veterans’ Appeals, but the Court determined that “would be futile because the Board doesn't have jurisdiction to invalidate the regulation. Thus, petitioner lacks an adequate alternative legal channel because

the Board can't provide the relief she seeks.”  Id. at *34.  The Court also determined it would exercise discretion under the All Writs Act in this case. 

The Court then ordered that the regulation (17.1005(a)(5)) is invalid, deemed VA decisions that denied reimbursement for medical expenses deemed deductibles or coninsurance to be invalid, and ordered the VA to readjudicate those claims.  It also ordered the VA to stop sending letters that contained incorrect statements about the law.  It also gave the VA 45 days to prepare and submit to the Court for approval a plan to provide notice to veterans who had been sent the incorrect notice.

Judge Falvey dissented principally saying the All Writs Act requires writs to be in aid of the Court’s jurisdiction and further determining that because the Court’s appellate jurisdiction is defined in 38 U.S.C. Section 7252 and 7261 as reviewing decisions of the Board, the Court cannot use the AWA without a foundational Board decision to review.  He also believes the VA made good arguments for the language in the amended regulation issued as a result of Staab and that since the issue has not been decided by the Court, the right to a writ is not clearly and indisputably correct.  Finally, Judge Falvey wrote that a Board decision is not a futile action and could find helpful facts.

This case, in combination with Godfrey, provides a template for further class actions.  It is also an amazingly well researched and put together statement.  I have no doubt the VA will ask for a stay of the order, seek an en banc decision or appeal the decision, but believe Judge Greenberg’s reasoned opinion will be affirmed.  The result will be the VA cannot undue Staab through a regulation and veteran’s will receive more money in their pocket from ER expenses that have been denied.  This decision also shows that at least two judges of the Court are deeply offended by the VA’s attempts to avoid Court decisions by re-writing regulations.

The decision was masterfully written by Judge Greenberg and joined in by Judge Allen.  Judge Falvey wrote the dissent.

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Euzebio: Constructive Possession of National Academy of Sciences Reports

Euzebio v. Wilkie, Case Number 17-2879, decided August 22, 2019 affirmed a Board decision finding against service connection for a benign thyroid nodule.  The case concerned whether a National Academy of Sciences report, Veterans and Agent Orange: Update 2014 (herein 2014 Update) was constructively before the VA.

Specifically, the veteran argued the Board should have considered the 2014 Update, which states benign thyroid nodules "may be associated with . . . service," and as a result afforded him a medical examination.

The Court acknowledged the 2014 Update:

(1) was created for VA pursuant to a congressional mandate, which directed the Secretary to enter into an agreement with the NAS to review and summarize scientific evidence concerning the association between exposure to herbicides used in Vietnam during the Vietnam era and diseases suspected to be associated with such exposure; (2) was  published in 2016, prior to the Board decision on appeal; and (3) reflects that there is "limited or suggestive evidence of an association between exposure to [herbicides] and hypothyroidism.

Id. at *5 (internal citations omitted). However, the Court noted that it was precluded from statute from considering material not contained in the record before the Secretary and the Board.  Id. at *5.  The Court then acknowledged case law supports the idea of finding that records are constructively before the Board “because the Court could not accept

the Board being "unaware" of certain evidence, especially when such evidence is in possession of . . . VA, and the Board is on notice as to its possible existence and relevance.”  Id. at *6.  The Court then summarized the law on constructive possession as:

In sum, as the constructive possession doctrine developed, the requirement that the document not relate too tenuously to the appellant's claim grew in significance, to the point where, today, an appellant must show that there is a direct relationship between the document and his or her claim to demonstrate that the document was constructively before the Board, even if the document was generated for and received by VA under a statutory mandate.  The document must bear a closer relationship to the appellant beyond providing general information related to the type of disability on appeal, or merely being referenced in other evidence of record or relied upon by appellants in similar cases.

Id. at *7-8.

In this case, the veteran did not submit the 2014 Update, but argued the Secretary knew about it and that it was potentially relevant because it addressed a relationship between a thyroid condition and AO exposure.  “However, our caselaw is clear that, even if VA is aware of a report and the report contains general information about the type of disability on appeal, that is insufficient to trigger the constructive possession doctrine; there must also be a direct relationship to the claim on appeal. Moreover, as in Monzingo, the requirement for a direct relationship is not satisfied simply because the report at issue was obtained by VA pursuant to a statutory mandate.”  Id. at *8.

Judge Allen wrote a blistering dissent that dissected the majority opinion as to whether the 2014 Update had a direct relationship to the veteran’s claim.

Judge Allen wrote:

The majority is certainly correct that Congress did not require VA to consider the reports in individual adjudications, see ante at 9, but that recognition does not mean that the congressional mandate to create those Updates is irrelevant to whether the Board should consider them under applicable law in certain individual cases.  And for me, the congressional directive is critical in terms of the significance of these reports more generally.  These are not the type of documents that are located somewhere in the bowels of VA, tucked away in the desk of some bureaucrat never to be read. They are documents that are important for the Agency because Congress made them so, expressly and unequivocally.  

Id. at *9.  Judge Allen then noted that we are aware the Board actually knows the 2014 Update exists: “the Secretary made clear during oral argument that the Board knows

about the NAS Updates. This fact is quite significant. This is not something obscure

or something that one could say only that the Board should have known. It is undisputed that the Board actually knows the Updates exist and that it knows what they are meant to do–provide scientific information about connections between Agent Orange exposure and certain medical conditions.”  Id. at *19.  Judge Allen also pointed out the Board actually referenced the 2014 Update in its opinion and The Purple Book (a Board summary of law) discusses the 2014 Update. 

Finally, Judge Allen writes that

In the end, I believe the NAS Updates are constructively before the Board because they have a "direct relationship" to all claims based on Agent Orange exposure…. Moreover, I am cognizant of the burden on the Board that decisions of this Court can impose. I do not mean to open the floodgates for what the Board must consider and I don't believe my position would do so. Not all evidence is the same….  The NAS Updates are unique–more equal than other government reports. We need not decide whether other things could also fall in this special category of animal. But to not recognize the special place of the NAS Updates in the VA benefits process turns a blind eye to reality. I respectfully dissent from the majority's decision in this matter.

Id. at *21.

Legally, Judge Allen’s dissent is powerful and ultimately I think this one will be appealed and possibly overturned.  To find that a report referenced by the Board is not before the Board is a perversion of logic.  However, even if the case is overturned as to the NAS Update, I believe it represents an attack on how cases are typically presented to the Board.  The Court wants to narrowly construe constructive possession and thus reduce the VA’s obligation with regards to a duty to assist (or simply look up a medical treatise).  I can’t believe the VA or Court actually wants advocates or attorneys to start sending in reams of medical treatises to the VA rather than simply giving a citation.  But, until this case is clarified, it appears we are now forced to do just that.

The decision was by Judge Meredith and joined in by Judge Falvey.  Judge Allen wrote a powerful dissent.

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McGee: Late Notices of Appeal and Miscellaneous Order Number 09-19

McGee v. Wilkie, Case Number 18-6853, decided August 20, 2019 concerned a late notice of appeal to the Court.

The veteran received a Board decision on October 19, 2015 and within 120 days of that decision asked the Board of Veterans’ Appeals reconsideration.  Reconsideration denied the motion on August 7, 2018.  The veteran filed a notice of appeal on December 7, 2019, which is 122 days after the issuance of the denial of reconsideration.

As the Court noted:

Board decisions must be appealed to this Court within 120 days of the decision's mailing.  If a claimant files a motion for Board reconsideration within that 120-day period, the finality of the Board decision is abated and a new 120-day appeal period begins to run on the date the Board mails the claimant notice that the Board Chairman denied reconsideration.  An NOA filed within that new 120-day period initiates an appeal of the underlying Board decision.  Where an appellant files such an NOA, the NOA may also initiate review of the Board Chairman's denial of reconsideration, but the Court's review of that denial is limited.

Id. at *1.

The veteran argued he actually sent the notice of appeal in the mail on December 4, 2018, which would be timely, but it was not actually received by the Court.  The Court noted it could wade into a discussion of whether the notice was actually mailed or whether equitable tolling applied, but instead could potentially rely upon the Court’s Miscellaneous Order Number 09-19, which revised Rule 4 of the Court’s Rules of Practice and Procedure.  The Court described the order:

In its revised form, the rule provides that NOAs "received within 30 days after the expiration of the filing deadline" are considered timely if "the appellant demonstrates good cause or excusable neglect for failure to file" within the 120-day window.  The revised rule also provides that NOAs "received more than 30 days after the expiration of the filing deadline" can be considered timely if equitable tolling is warranted.  Misc. Order 09-19 provides that this rule was "published and [] effective" on June 21, 2019.13 But the order did not state whether the rule change was intended to apply only to NOAs filed after that date or, should a motion to dismiss be filed, to all claims pending as of that date.

Id. at *2-3.

The Court formed a panel to consider and determine whether the provision applies only to NOAs filed after the Order or those pending before and ultimately “the Court interpret[ed] Misc. Order 09-19 to apply to all appeals pending at the Court as of June 21, 2019, regardless of when the NOA itself was filed.”  Id. at *3-4.

The Court then considered the issue of good cause or excusable neglect to determine if the filing should be allowed pursuant to the Order.  I take a moment to note the Order does not eliminate the possibility that equitable tolling could apply to a late NOA, but offers another path—note the Court states the Order provides that NOA received more than 30 days late may be considered timely if equitable tolling is warranted.  Id. at *3.

In terms of good cause or excusable neglect, the Court essentially accepted the veteran’s explanation and messy procedural history of this case and noted:

Appellant alleges he "received duplicate(s) of the Board's [decision] at three junctures with two different dates and three different time stamps." On appeal to this Court, the Secretary himself was confused about what decision was on appeal as he initially filed a December 7, 2018, Board decision, later correcting the record with an October 19, 2015, Board decision. In a nonlegal sense, the administrative record here is "messy."

The Secretary hasn't given the Court any reason to doubt appellant's assertion that he "received duplicate(s) of the Board's [decision] at three junctures with two different dates and three different time stamps." And there's no question the sequence of events involving multiple decisions and repeated mailings was confusing. Given this, and considering both the revisions to Rule 4 and "the need for flexibility" when enforcing procedural bars in Federal courts when equity is in play, the Court holds appellant had good cause for filing his NOA 2 days late.

Id. at *4.

This is an interesting early application of the Court rule about late filings that demonstrates a pro-veteran slant.  It will be likely be used as the template for such cases in the future, though I believe the term “good cause or excusable neglect” will likely need to be fleshed out by future cases.

The was a per curium decision was by Judges Bartley, Greenberg, and Allen.

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