Frazier: Substituted Parties and Limitations on What Can be Received

Frazier v. McDonough, Case Number 22-4670, decided May 23, 2024 is a decision by the Veterans Court discussing substitution of an adult child related to the veteran’s claims for specially adapted housing (SAH) or special home adaption grant (SHA) and automobile adaptive benefits.

The adult child was substituted into the claim after the veteran died, but the Board dismissed the appeals concerning claims for SAH, SHA and automobile benefits because a claimant is eligible for substitution only for claims for periodic monetary benefits, and not for claims for personal benefits administered through the Veterans Health Administration."  The Board concluded it lacked jurisdiction over those claims as a result of the veteran's death.  Id. at *1-2.

The adult child appealed arguing “that as a qualified accrued benefits recipient under 38 U.S.C. § 5121(a), she is permitted to be substituted to continue the appeal of the veteran's claim under 38 U.S.C. § 5121A for "any benefit," which includes any non-accrued (or non-periodic) benefits like SAH or SHA or for automobile adaptive equipment. And to the extent the regulation the Board cited, 38 C.F.R. § 3.1010(a), provides otherwise, appellant argues that it is invalid.”  Id. at *2.

The Court concluded: “under section 5121A (with our emphasis added), an eligible accrued benefits recipient may request substitution "[i]f a claimant dies while a claim for any benefit under a law administered by the Secretary, . . . is pending[.]" Congress provided no restriction on the type of benefit at issue, other than it is one the Secretary administers. Restricting substitution requests for an eligible accrued benefits recipient to only those cases involving a "claim for periodic monetary benefits," as the Secretary urges, inappropriately imposes a limitation Congress did not. Therefore, we hold that section 5121A unambiguously provides that an eligible accrued benefits recipient can be substituted in a claim for any benefit, including non-accrued benefits. But that is not without limitation. We also hold that an accrued benefits recipient under section 5121(a)(6) is limited to reimbursement for last expenses of sickness and burial and nothing more, even if substituted under section 5121A. And, to the extent the Secretary's implementing regulation, § 3.1010(a), provides otherwise, it is unlawful and we invalidate it. Because the Board clearly erred when it dismissed the veteran's claims for SAH or SHA and automobile adaptive benefits, we will reverse that portion of the Board's decision. We will then remand those matters for the Board to adjudicate the merits of the veteran's claims for SAH, SHA, and automobile adaptive benefits, with appellant as the substituted claimant.”  Id. at *1-2.

Importantly, for substituted parties, the question of what can be gained by a substituted party has been answered by the Court.  It states that “Section 5121(a)(6) allows payment of accrued benefits but "only so much of the accrued benefits may be paid as may be necessary to reimburse the person who bore the expense of last sickness and burial."75 The language plainly places a cap on the amount that an accrued benefits recipient could receive if they are only eligible on the basis of the one who "bore the expense of last sickness and burial."76 The question is whether the limitation set forth in § 5121(a)(6) applies when a person in that category is pursuing a substitution claim under section 5121A.”  Id. at *16-17.

The Court concluded this discussion of the cap by stating: “So, we read section 5121A to require that a person who is allowed to substitute on the grounds that they bore the expense of a veteran's last sickness and burial is limited by the amount of such expense when allowed to substitute into a deceased veteran's claim.”  Id. at *18.

Decision by Judge Allen and joined by Chief Judge Bartley and Judge Jaquith. 

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Smith: The CAFC Does Not Find CUE

Smith v. McDonough, Case Number 2022-2169, decided May 20, 2024 is a decision by the Federal Circuit that discusses CUE and affirms a finding by the Veterans Court that found no error in the interpretation of 38 CFR 20.1403.

The veteran developed a deep vein thrombosis (DVT) in service and discharged as no longer fit for duty.  Subsequently he applied for service connection of the DVT but was denied in a decision that said the DVT had resolved.  The decision was affirmed by the Board in 1996 and the decision was appealed.

In 2016, the veteran filed a motion to revise the 1996 Board decision arguing “there was enough evidence in front of the 1996 Board that showed extant DVT, including Physical Evaluation Board (“PEB”) reports, to have overcome the well-grounded threshold. He thus asserted that his claim should have been allowed to proceed aided by the VA’s duty to assist.”  Id. at *3.

The Board denied the motion but an appeal to the Veterans Court led to a remand to consider whether PEB reports from 1991 and 1994 were probative of a diagnosis of DVT.  On remand, the Board determined there was some evidence to support his claim and the 1996 dismissal of the claim as not well grounded was incorrect.  However, the Board held the error was not enough to support a finding of CUE.  It determined: “Given the presence of evidence on both sides of the question, the Board could not conclude “that it was absolutely clear that the Veteran did have a diagnosis of DVT.””  Id. at *4.

The Veterans Corut affirmed saying the “error did not constitute CUE because the record was not “manifestly clear that the veteran had a current disability” at the time of the 1996 Board Decision.”  Id. at *4.

The veteran argued “the Veterans Court legally erred in interpreting 38 C.F.R. § 20.1403 by limiting CUE-eligible errors to those that manifestly changed the outcome “with respect to the merits of the underlying claim” and, specifically, limiting CUE-eligible errors to those in which “but for an alleged error, service connection would have been awarded.” Veterans Court Decision.”  Id. at *4.

First, the Federal Circuit found it had jurisdiction to consider the issue as it was one of regulatory interpretation.  Id. at *6.

Then, the Federal Circuit turned to the merits.  It noted:

“Smith contends that the Veterans Court incorrectly interpreted 38 C.F.R. § 20.1403 to require that but-for the error, the veteran would have been awarded service connection. See Veterans Court Decision at *1. Smith argues that the regulation does not limit the outcomes affected by CUE to changes to the ultimate determination of service connection. He contends that a change in the course of proceedings that may change the ultimate award of service connection may suffice as a manifest change in the outcome. Smith therefore argues that allowing his claim to proceed to a merits determination after triggering the VA’s duty to assist would have met the only test set forth in the regulation.”  Id. at *7.

The Court disagreed and determined: “the “manifestly different” outcome standard of 38 C.F.R. § 20.1403 cannot be met by correcting an error that leads only to continued litigation with an uncertain result on the merits of the claim. We therefore conclude that the Veterans Court properly interpreted the regulation in affirming the 2020 Board’s Decision.”  Id. at *8.  The Court pointed to Bustos v. West, 179 F.3d 1378 (Fed. Cir. 1999) as similar if not controlling. 

This case demonstrates the Court’s have interpreted the CUE standard strictly so that a winning CUE is difficult.

Decision by Judge Linn and joined by Judges Lourie and Stoll. 

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Barry: Special Monthly Compensation Half Steps

Barry v. McDonough, Case Number 2022-1747, decided May 16, 2024 is a decision by the Federal Circuit and discusses special monthly compensation (SMC) and how it is impacted by multiple SMC increases.

Factually, the Court explained: “The Department of Veterans Affairs (“VA”) initially gave Mr. Barry a 100% disability rating and awarded him SMC. After receiving several subsequent rating decisions, Mr. Barry received the rating decision at issue here in December 2014. His compensated disabling conditions include the amputation of his right leg above the knee, rated at 100%, the loss of use of his left foot, the loss of use of his left leg, and a constellation of other conditions related to his legs and feet. Based on these ratings, Mr. Barry received SMC at the rate specified in 38 U.S.C. § 1114(m) and received an intermediate-rate increase in his SMC under 38 C.F.R. § 3.350(f)(3). Mr. Barry does not receive SMC, however, for his many other disabling conditions: post-traumatic stress disorder, rated at 70%; right shoulder arthritis, rated at 60%; left shoulder arthritis, rated at 50%; left eye injury with glaucoma, rated at 30%; left eye disfigurement, rated at 30%; bilateral hearing loss, rated at 20%; lumbar spine injury, rated at 10%; right hand injury, rated at 10%; left and right hip joint disease, rated at 10% each; hypertension, rated at 10%; and tinnitus, rated at 10%.”  Id. at *5.

The Court explained “Mr. Barry appealed the Board’s determination to the Veterans Court. Mr. Barry principally argued that the Board erred by not considering whether he would be entitled to an additional SMC increase under 38 C.F.R. § 3.350(f)(3). Since Mr. Barry had already received one SMC increase under § 3.350(f)(3), the Veterans Court framed the question as whether § 3.350(f)(3) entitled a veteran to only one SMC increase or whether a veteran could increase his SMC under § 3.350(f)(3) more than once.”  Id. at *6.  The majority of the Veterans Court determined a veteran could only receive one SMC increase under 3.350(f)(3). 

The Court began with the text but determined “the plain language of § 3.350(f)(3) standing alone does not conclusively resolve the issue dividing the parties.” Decision, 35 Vet. App. at 122. Having elicited all we can from the isolated text of § 3.350(f)(3), then, we turn to context.”  Id. at *11.

When the Court turned to the context, they determined: “The broader statutory and regulatory context unambiguously shows that 38 C.F.R. § 3.350(f)(3) can provide for more than one SMC increase.”  Id. at *11.

The Court dug into the surrounding statutory language and stated: “Taken together, these provisions describe an SMC program that has: (1) eligibility requirements to show entitlement to SMC or SMC increases; (2) mandatory SMC awards or increases; and (3) an SMC cap. At least for 38 U.S.C. § 1114(p), insofar as it relates to our interpretation of 38 C.F.R. § 3.350(f)(3) here, Congress did not add additional limitations or requirements, nor should we. We do not add limitations to the statutory scheme that are not reflected in the text of the law Congress passed.”  Id. at *13. 

The Court concluded: “In sum, as long as Mr. Barry is entitled to an intermediate-rate SMC increase under 38 C.F.R. § 3.350(f)(3), he shall receive it, subject to the explicit cap. Thus, § 3.350(f)(3), in the context of other statutory and regulatory provisions, unambiguously allows for more than one intermediate-rate SMC increase. We decline the government’s invitation to read in new requirements that Congress and the Secretary did not create.”  Id. at *13.

Judge Lourie dissented, arguing that “38 C.F.R. § 3.350(f)(3), when examined in the context of the regulation’s surrounding subsections and the statute that they implement, has only a single reasonable meaning: that a veteran is limited to a single half-step increase in SMC benefits, irrespective of how many additional single service-connected disabilities or combinations of service-connected disabilities the veteran may have that are independently ratable at 50 percent or higher.”  Id. at *32.

This decision is both a careful example of contextually reading a statute.  But, also important in unlocking SMC increases that were otherwise denied by the VA.

Decision by Judge Prost and joined by Judge Reyna with a dissent by Judge Lourie. 

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Hamilton: Constructive Possession in the Context of a Section 1151 Claim

 

Hamilton v. McDonough, case no 22-3726, decided May 23, 2024 comes just two months after the Federal Circuit’s decision in Varad v. McDonough and concerns the doctrine of constructive possession in the context of a section 1151 claim. 

The case concerned a claim for Section 1151 benefits after a Federal Tort Claim Act claim had been filed.  The veteran asked that the file from the administrative FTCA claim be associated with his Section 1151 claim.  The Board acknowledged the administrative FTCA claim and the ultimate settlement of the claim, but denied the 1151 claim and noted the veteran had not submitted any evidence in connection with the administrative FTCA claim.

The veteran argued the FTCA claim file was constructively part of the VA claims file and thus should have been discussed by the Board.  The Secretary argued the entirety of the FTCA claim file was shielded from disclosure to the veteran under the attorney work-product doctrine.

The Court concluded:

“the FTCA claim file satisfies the traditional elements for constructive possession. But the attorney work-product doctrine recognizes that at least some of the information generated by members of the legal profession on behalf of their clients in preparation for litigation is protected from disclosure, and the Privacy Act makes clear that this principle applies even when individuals are seeking Federal records related to themselves. The protections of the work-product doctrine and the Privacy Act are relevant to this case. And yet neither the doctrine nor the Privacy Act grants the Secretary a blanket absolution from disclosure of all documents within a folder labeled "FTCA claim file" based on his own say-so. What they protect from disclosure is specific information rather than classes of documents. Thus, when the Secretary invokes the work-product doctrine or the Privacy Act's related exemption to shield an FTCA claim file from disclosure, the Board must assess what information in that file is protected and what information is not protected.

Unprotected information must be associated with the VA claims file according to the duty to assist. As a rule, as explained below, facts are disclosable, opinions are not. Because the Agency never attempted—even in a manner consistent with the work-product doctrine or the Privacy Act—to associate Mr. Hamilton's FTCA claim file with his VA claims file, the Board failed to ensure that VA satisfied its duty to assist.”

Id. at *2.

This decision is a unique application of the law on constructive possession to a Section 1151 claim.  It also spells out the manner in which the Board should have determined what materials were made a part of the records.  However, it also represents a further use of the constructive possession doctrine to expand what should have been considered by the VA.

Decision by Judge Toth and joined in by Judges Greenberg and Allen. 

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McCauley: The Burden in a Severance Case

McCauley v. McDonough, Opinion Number 23-1692, was decided May 20, 2024 by the Veterans Court and concerns a proposed severance of service connection.

The veteran was granted service connection for diabetes, coronary artery disease and other associated residuals.  However, the VA subsequently found CUE in the grants and sought to sever the rating.  This case presented a unique question to the Veterans Court: “if service connection was granted on one theory that was later found to be clearly and unmistakably erroneous, must the Board address alternative theories of entitlement that are raised by the claimant or reasonably raised by the record before upholding severance of service connection? As we explain, we hold that it must. This means that the severance standards of 38 C.F.R. § 3.105(d) require that the Secretary prove that service connection cannot be granted or maintained under any reasonably raised theory for severance of service connection to be proper.”  Id. at *1. 

The Court then applied this to the facts of the case and determined the Secretary did not meet his burden.  It noted the VA specifically flagged the need to address Camp Lejeune with regard to this appeal, but never did and the Board found the severance proper. 

The Court then framed the issue as: “must the Board address alternative theories of entitlement before upholding severance of service connection? In other words, what is the extent of the Secretary's burden in severance cases—must he prove only that service connection on the theory under which it was granted is erroneous, or must he also prove that service connection cannot be granted based on any theory raised by the claimant or the record?”  Id. at *4.  It also noted when service connection is severed despite the Secretary not meeting its burden, the severance is void ab initio—a legal nullity and the proper remedy is for the Court to reverse with instructions to reinstate service connection retroactive to the date of severance.  Id. at *4-5.

The Court then addressed the VA’s burden and noted

“Unlike CUE, severance is anchored in the present. As the regulation says, "service connection will be severed only where evidence establishes that it is clearly and unmistakably erroneous." 38 C.F.R. § 3.105(d) (emphasis added). This means that the Secretary must prove that it is currently clearly and unmistakably erroneous for the claimant to be service connected.  This means that the Secretary's job is not done if he only shows that the theory on which service connection was originally granted was erroneous—that would not necessarily prove that maintaining service connection is clearly erroneous. To prove that service connection is currently clearly erroneous, the Secretary needs to show that service connection cannot be granted or maintained under any theory. After all, if unresolved theories could maintain service connection, the Secretary cannot show that service connection "is clearly and unmistakably erroneous." 38 C.F.R. § 3.105(d).”

Id. at *5-6.

The Court noted the VA is not required to consider every conceivable alternative theory, but those raised by the veteran or the record.  Id. at *6.  In other words, “Tying this all together, we see that in considering whether severance of service connection is proper, the Board must address alternative theories of entitlement that are raised by the claimant or reasonably raised by the record. If the Board upholds a severance decision without doing so, it has failed to satisfy the severance standards of § 3.105(d). And this means that the severance is void ab initio.”  Id. at *6.

This is a case that fully explains the Secretary’s burden in a severance case.  What is most interesting is that the Secretary argued so hard for remand as opposed to reversal with instructions to reinstate service connection.  The VA seems to still not understand that an improper severance (or for that matter reduction) is a legal nullity—it is as if it hadn’t happened.  Also interesting is that Judge Falvey who is typically solicitous to the VA appeared to have reached his end point with the VA with this case.

Opinion by Judge Falvey and joined in by Judges Meredith and Jaquith.

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Stiles: No Appeal from a Board Remand

Stiles v. McDonough, Opinion Number 20-3523, was dismissed on May 15, 2024 by the Veterans Court.  The veteran sought to appeal a remand, but the appeal was dismissed.  The veteran sought reconsideration and oral argument was held, but the appeal was still dismissed.

The Secretary argued the Board did decision was not a final decision and because the veteran had not exhausted his administrative remedies the Court could not hear the appeal.  The veteran argued that prior to the Board’s decision, he submitted correspondence to the Board noting the claims for service connection for sleep apnea and vertigo remained pending and the Board was required to refer those to the AOJ for development and adjudication.  He then asserted “the Board is required to adjudicate all issues expressly raised, and the Board's refusal to acknowledge his request for referral "at best[] impliedly denied jurisdiction of these claims or at wors[t] impliedly denied the claims themselves.”  Id. at *3.

He also argued: “in his motion for reconsideration that the Board's failure to refer the claims contravenes what he characterizes as the Board's regulatory duty under 38 C.F.R. § 20.904(b) to refer unadjudicated claims to the AOJ for initial adjudication.”  Id. at *3.

He “concedes that the Board did not have jurisdiction to adjudicate the merits of the vertigo and sleep apnea claims, but he asserts that the Board's failure to follow this mandatory requirement and to address the jurisdictional issue that he directly raised to the Board is an implied adverse determination as to Board jurisdiction to refer the sleep apnea and vertigo claims. MFR at 3-4. He maintains that the Board's refusal to comply with § 20.904 is a legal error over which the Court may assume jurisdiction.”  Id. at *3.

The Court dismissed the action saying: “In sum, because the November 2019 Board remand did not grant or deny the claims appealed to the Board, and it did not otherwise purport to address, explicitly or implicitly, the question of whether the appellant had unadjudicated pending claims, the Court concludes that it is not a final decision over which we may exercise jurisdiction.”  Id. at *10-11.

For a successful challenge to a remand order by the Board see the Federal Circuit’s decision in Chavez.

Opinion by Chief Judge Bartley and joined in by Judges Pietsch and Meredith.

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Varad: Court Filings and Constructive Possession

Varad v. McDonough, Case Number 2021-4616, decided March 15, 2024 concerns the doctrine of constructive possession and represents an application of the Federal Circuit’s recent case in Conyers v. McDonough, 91 F.4th 1167 (Fed. Cir. 2024).

The facts involved whether a child of a deceased veteran should receive DIC as she alleged she was permanently incapable of self support prior to turning 18 years old.  However, the facts are less important than the procedure.  Here, the pro se litigant had already appealed to the Court and received a remand.  The Board again denied her claim, but the question before the Court now was whether a private medical record that the litigant had submitted to the Court in the first appeal was constructively before the Board following the Court remand.

After remand from the first Court appeal, the VA told the litigant that copies of the Court’s remand order and other pertinent pleadings and filing with the Court would be associated with her file for review and consideration.  The Board then made a decision that did not mention April 2019 or January 2021 medical records that had been filed with the Court during her first appeal. 

She filed a motion for reconsideration and included the report.  The motion was denied by the Board because the report while new did not warrant reconsideration. 

She also appealed the Board decision requesting suspension of secretarial acton or voiding the December 2020 decision and denial of motion for reconsideration for the failure to comply with the Court’s decision.  She argued the Board erred because it ignored the April 2019 and January 2021 medical evidence.

The Court then shifted the concept of constructive possession and noted: “The constructive possession doctrine provides a safeguard that ensures all record documents reasonably expected to be part of a veteran's claim are included in the administrative record." Conyers v. McDonough, 91 F.4th 1167, 1171 (Fed. Cir. 2024) (citing Euzebio, 989 F.3d at 1325- 26). "The Court assesses constructive possession as part of its role to ensure that the Board bases its decision on the evidence properly within the administrative record and, thus, that its decision is not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”  Id. at *6.

The elements of constructive possession are that the evidence must pre-date the date of the Board decision; the evidence must be within the Secretary’s control; and the evidence must be relevant and reasonably connected to the claim.  Id. at *6.

The question centered around whether the April 2019 medical record was within the Secretary’s control.  The question was whether filing with the Court met the requirement.  The Court found “so long as the claimant's intent is clear with respect to a particular filing, the precise location within VA does not matter. As noted above, under the Court's E-Rules, the Secretary was provided notice and a copy of the August 2019 evidence. And it was clear from that evidence that Ms. Varad's intent was to have that evidence considered as demonstrating her entitlement to DIC benefits.  Therefore, the Court concludes that the April 2019 evidence, a copy of which was served on VAOGC, was within the Secretary's control, satisfying the second element of constructive possession.”  Id. at *12.

This decision is an interesting explication of recent case law and helps to clarify the doctrine of constructive possession while specifically explaining that materials filed with the Court are within the control of the Secretary.

Decision by Chief Judge Bartley and joined in by Judges Greenberg and Jaquith. 

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Perciavalle: When Attorney Fees are Allowed

Perciavalle v. McDonough, Opinion Number 2023-1117, was decided May 9, 2024 by the Federal Circuit and discussed the application of Section 5904 to attorney fee decisions.

In 2006, the veteran was granted service connection for PTSD with a 30 percent rating (among other ratings).  The veteran filed an NOD.  Subsequent filings included a request for TDIU, and a 2009 NOD.  In 2016, the appellant entered into a withholding agreement to represent the veteran.  The VA ultimately increased the PTSD rating to 100 percent in March 2017, effective to 2008, and awarded SMC benefits.

The VA granted the 20-percent fee for the SMC amount of the award based on the 2009 NOD, but denied fees for PTSD.  The VA concluded the pre-Act version of section 5904 applied because the first NOD was filed before the 2007 effective date of the amendments and there had been no final BVA decision as required by the pre-Act version.  The Board and Veterans Court affirmed.

The Federal Circuit noted: “The sole issue on appeal pertains to 38 U.S.C. § 5904, which permits veterans to retain accredited agents or attorneys to present and prosecute VA benefit claims and sets forth restrictions on, among other things, when agents and attorneys may charge for their services. That provision changed over time. The dispute before us relates to which version of this fee statute applies.”  Id. at *3.

The Federal Circuit explained that from 1988 until 2007, veteran’s agents and attorneys could not charge a fee before the Board made a final decision in a case.  In 2006, Congress modified the rule so that fees were allowed after a NOD was filed (which occurs prior to the Board’s actual decision).  The Court then explained that there was no final Board decision in the case therefore if the pre-Act version of 5904 applies, the veteran’s agent was not entitled to fees.  However, if the post-Act version applies, the bar against fees at this stage did not apply.

The Court looked carefully at the statute and determined “as long as a notice of disagreement was filed on or after June 20, 2007, in the same “case” in which counsel is seeking fees as the term is defined in Jackson, the post-Act version of 38 U.S.C. § 5904(c)(1) applies.”  Id. at *11.  Thus, the Court concluded the Veterans Court applied the incorrect standard in deciding which version of 5904 applied.

The Federal Circuit explained:

“the Veterans Court took an approach that reflects a search for what the Secretary labels the single “operative NOD” for fee purposes.  Specifically, it approved the Board’s focus on identifying “which NOD precipitated the claim stream” that “led to grant of benefits.” But that approach departs from the statute. The language of § 101(h) states that the amended version of the statute shall apply “with respect to cases in which notices of disagreement are filed on or after” June 20, 2007. § 101(h), 120 Stat. at 3408. It does not presuppose that there is only one notice of disagreement in a case. It does not call for identifying a notice of disagreement for a particular “element” in a case. It does not call for disregarding all notices of disagreement except one (or perhaps more than one) that can be identified as initiating an appeal that led to the grant of benefits. It simply asks if there was any (cognizable) notice of disagreement filed on or after June 20, 2007, in the case for which the veteran’s agent or attorney seeks fees.”

Id. at *13 (internal citations omitted).

This is an important case.  A goal of the last 20 years of Congressional action has been to allow veteran’s increased access to legal assistance.  The VA’s willingness to try to thwart that access by illegally denying an attorney fee threatened to undermine the ability for veteran’s agents and attorneys to continue to do this type of work.

Opinion by Judge Taranto and joined in by Judges Stoll and Stark.

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Love et al: Reductions and Writs of Mandamus

Love v. McDonough, Opinion Number 2022-2285, was decided May 3, 2024 by the Federal Circuit and actually represented four consolidated cases that had requested for a writ of mandamus related to  halting the impact of a rating reduction.

The issue at hand was whether the veteran’s had a right to a writ of mandamus where a veteran whose rating was reduced sought to have the original rating continued pending the final resolution of the validity of the reduction. 

The veterans argued the Veterans Court has jurisdiction to “compel action of the Secretary unlawfully withheld,” 38 U.S.C. § 7261(a)(2), and contended that when “an agency acts incorrectly, the All Writs Act provides authority for the appellate court to issue relief.” The veterans sought a writ of mandamus at the Veterans Court to prohibit the reduction of benefits temporarily until a final decision is rendered.  The Veterans Court denied the writ and it was appealed to the Federal Circuit.

The Court began by noting that in three of the cases, the veteran made no claim to the VA or Board for entitlement to interim payments.  In another case, a request was made but the matter was not pursued further when the agency failed to act.  The veterans argued further action was not possible because the Board in the one case  refused to rule on the request for interim relief until it decided the merits of the reduction.

The Federal Circuit determined:

“The appellants fail to recognize that the Board is not the last word. The very purpose of the statutory provisions providing for appeal to the Veterans Court, 38 U.S.C. § 7252(a), and to this court, 38 U.S.C. § 7292(c), is to correct error by the VA. The veterans in the Love case could request relief from the VA. In both the Love and Lindgren cases, the failure of the VA to act or refuse to rule would support the petitions for mandamus to compel the agency to decide the case so that an appeal could be pursued. Indeed, we have routinely approved this approach in the veterans context, and the Veterans Court in these cases advised the appellants of the availability of this very process.”

Id. at *9.  It then determined no request was made to compel a decision by the Board, but noted: “If a decision had been obtained from the Board denying the requested relief, a remedy by appeal would have been available to the veterans.”  Id. at *10.

The Court then helpfully explained:

“Any argument that the lack of a final judgment on the underlying disability claim would preclude an appeal from the denial of a request for interim relief would necessarily fail. Finality is assessed on a claim-by-claim basis, and the question of entitlement to interim payments as a discrete benefit is a separate legal claim from the merits of an underlying rating reduction.… A decision from the Board denying interim relief would be a final decision within the Veterans Court’s jurisdiction….  A decision by the Veterans Court denying relief would also be appealable. 38 U.S.C. § 7292(a).”

Id. at *10.

The Court then noted:

“Even if the request for interim relief were not treated as a separate claim, review in this court would be available. Although we have “generally declined to review non-final orders of the Veterans Court,” there are exceptions in limited and rare circumstances…. An appeal is available if three conditions are satisfied: (1) there must have been a clear and final decision of a legal issue that (a) is separate from the remand proceedings, (b) will directly govern the remand proceedings or, (c) if reversed by this court, would render the remand proceedings unnecessary; (2) the resolution of the legal issues must adversely affect the party seeking review; and, (3) there must be a substantial risk that the decision would not survive a remand, i.e., that the remand proceeding may moot the issue.”

Id. at *10-11.  

The Court then explicitly stated that the issue of interim payments while the merits of the underlying reduction decision was still pending is an exception and could have been appealed explaining: “The proper implementation date is a legal question separate from the proceedings, the resolution would adversely affect the veterans, and, as the veterans point out, “any relief issued once the decisions are final [would] be meaningless.”  Id. at *11.  The Court also said that Rule 8(a) of the CAVC Rules of Practice and Procedure might also come into play, Rule 8 addresses suspension of Secretarial Action.

This is a fascinating opinion.  While the writ was ultimately denied, the Federal Circuit created a clear pathway toward a grant and possible application of Rule 8 to halt the impact of a reduction.  Any veteran or attorney handling a reduction, should be aware of this case.

Opinion by Judge Dyk and joined in by Judges Schall and Hughes.

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Chavez: The Federal Circuit Considers a Remand Order

Chavez v. McDonough, Opinion Number 2022-1942, was decided April 19, 2024 by the Federal Circuit and attacks a Veterans Court remand.

In 2005, the veteran had been granted service connection for PTSD at a 100% rating.  In 2007, the veteran sought to have the rating be made permanent and total.  After a new examination, his disability was reduced to 50%.

Many attorneys are looking for ways to end the hamster wheel of DENY-REMAND-DENY-REMAND-DENY that the VA is so effective at using until a veteran misses a deadline or just gives up.  This was a case attacking those endless remands by attempting to force the Veterans Court to make a decision.  After a NOD was filed, the VA increased his rating to 70%.

The Board upheld the reduction from 100% to 70%.  The Veterans Court agreed the Board had improperly relied on evidence developed after the rating reduction but simply remanded the claim as opposed to reversing as was requested by the veteran.

Initially, the VA argued the Federal Circuit did not have jurisdiction over the appeal because the remand was not a final order within the Federal Circuit’s jurisdiction.  The VA argued the Veterans Court did not make any “clear and final decision on a legal issue,” but merely remanded for further consideration of the issues by the Board as a predicate to further review of those issues by the Veterans Court.  However, the Federal Circuit rejected this argument saying:

“That characterization of Mr. Chavez’s argument is inaccurate. His argument is not simply that the Veterans Court erred in remanding the case to the Board; instead, he argues that when the Board fails to provide adequate reasons or bases in support of its decision that a disability rating was reduced in accordance with law, the Veterans Court is legally compelled to reverse the Board outright and may not remand the case to the Board for further proceedings. That is a legal argument, and the Veterans Court has given a “clear and final decision” in response to that argument. That is, the Veterans Court has squarely rejected Mr. Chavez’s argument that the court lacks the authority to remand under those circumstances. Mr. Chavez’s legal argument may be meritless; indeed, we ultimately conclude that it is. But it is a legal argument nonetheless, and it is one that Mr. Chavez raised before the Veterans Court and that the Veterans Court squarely rejected.”

Id. at *5-6. It then summarized by saying: “Mr. Chavez argues that there is a legal prohibition against remanding the case once the Veterans Court finds that the Board has failed to apply the proper standards in a rating reduction case. Because that legal issue is properly before us, we deny the government’s request that we dismiss Mr. Chavez’s appeal.”  Id. at *8.

The Federal Circuit then turned to the merits and affirmed the Veterans Court.  The court explained the remand was because the Board noted some improvement in his ordinary life, but it was unclear from the Board’s decision whether the veteran attained material improvement under the ordinary conditions of life and work.  The Federal Circuit noted the Veterans Court found the Board’s explanation confusing and prevents effective judicial review and explained: “It is well settled that in federal appellate courts, the power to remand extends to cases in which “the reviewing court simply cannot evaluate the challenged agency action on the basis of the record before it.”  Id. at *10.

Despite the ultimate remand, this case demonstrates that a remand by the Veterans Court does not necessarily prevent the Federal Circuit from considering it.

Opinion by Judge Bryson and joined in by Judges Lourie and Stark.

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Thomas (Issues Not Addressed by the Board and Harmless Error)

Thomas v. McDonough, Opinion Number 2022-1504, was decided March 27, 2024 by the Federal Circuit and involves an earlier effective date for the veteran’s PTSD and what happens when the Board simply does not address an issue raised by the veteran.

In 1961, the veteran was on a plane that crashed and he was one of the few survivors.  He was discharged three years later after being diagnosed with an emotionally unstable personality.  He submitted a claim to the VA in 1971 seeking service connection for “depressive mania” associated with the plane crash.  “Based on solely the medical records, the VA denied service connection and concluded that an emotionally unstable personality was not a disability under the law. In reaching this decision, the VA did not consider Mr. Thomas’ service department records.”  Id. at *2.

The veteran reapplied in 2014 and submitted service department records abou the plane crash as well as changes in his personality and performance evaluations after the crash.  PTSD was granted with an effective date of the 2014 application.  He sought an earlier effective date, but the “VA found that the service department records would not have changed the 1971 denial of service connection because they did not counter the determination that Mr. Thomas’ in-service psychiatric problems were due to an “emotionally unstable personality,” which was not considered a disability for VA compensation purposes. J.A. 99. The VA also concluded that the service department records “were not a factor in the grant of benefits at this time.””  Id. at *4. 

The Board affirmed and did not address the 3.156(c) argument or the newly added service department records.  Before the Veterans Court, the veteran argued the Board erred in not addressing his 3.156(c) argument.  The Veterans Court affirmed finding: “the Board did not err in failing to discuss Section 3.156(c)(1) because this regulation only applies to “relevant” service records. The Veterans Court noted that Mr. Thomas “offer[ed] no argument that his service records were in any way relevant” to the VA’s denial of his 1971 claim. For this reason, the VA concluded that Mr. Thomas had not shown that the Board committed prejudicial error in failing to discuss Section 3.156(c)(1).”  Id. at *5.  “The Veterans Court also determined that the Board did not err in failing to discuss Mr. Thomas’ service department records. The Veterans Court explained that “Mr. Thomas has neither shown nor argued that the service department records . . . were ‘favorable’ evidence and that the Board was thus required to discuss them.”  Id. at *5.

Before the Federal Circuit, the veteran argued: “Veterans Court erroneously applied a more stringent legal standard than what is required under 38 U.S.C. § 7104. Section 7104(d) governs the Board’s statutory duty to consider “applicable” regulations and provide a written statement on “all material issues of fact and law.” Specifically, Mr. Thomas argues that the Veterans Court improperly read into this provision a new and limiting requirement—that the Board need only address “favorable” or “relevant” evidence in its written decision.”  Id. at *6. 

The Federal Circuit explained the Board must include a written statement of the Board’s findings and conclusions, and the reasons or bases for those findings and conclusions, on all material issues of fact and law presented on the record.  Id. at *6.  It then explained “At the Veterans Court, this provision means that the Board must address in its written statement all regulations that are “made potentially applicable through the assertions and issues raised in the record.”  Id. at *6.  It then explained: “We see no reason to depart from the Veterans Court’s “potentially applicable” standard, which supports 38 U.S.C § 7104(d)’s goal of providing veterans with a fulsome and clear decision of their claims. In doing so, we are not eliminating or even modifying the Veterans Court’s obligation to place the burden of proof for showing prejudicial error on appeal on the appellant, as the Veterans Court here correctly did.”  Id. at *6-7.

As to the facts of the case, the Federal Circuit then explained: the veteran raised Section 3.156(c) and his service records before the Board and it was not addressed and the Board did not address this issues, but the Veterans Court excused the failure because the veteran did not argue the “relevance” of Section 3.156(c) or the service department records in his brief.  The Federal Circuit then noted the Veterans Court also faulted the veteran for failing to show how his service department records were favorable evidence and explained: “These statements indicate that the Veterans Court erroneously applied a standard considerably more stringent than required under 38 U.S.C. § 7104. As explained above, Section 7104 requires the Board to consider all “potentially applicable” regulations raised in the record, not merely those that the veteran has shown to be relevant or favorable in his briefing before the Board.”  Id. at *7-8.

The Federal Circuit then explained: “the Board never made a finding of fact as to the relevancy of Mr. Thomas’ service department records to his denied 1971 claim, as required under Section 3.156(c) and Kisor II. Because the Board has not made this factual determination in the first instance, the Veterans Court is statutorily prohibited from doing so.”  Id. at *8.

This is an important case that demonstrates the Board must address arguments and issues raised by the veteran, but it also provides a way to attack an argument at the Veterans Court that error is harmless.  It says underlying decision of relevancy (at least in this case) must be made by the Board and not the Veterans Court. 

Opinion by Judge Reyna and joined in by Judges Lourie and Cunningham.

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Brack (Time to Submit Argument to the Board)

Brack v. McDonough, Case Number 22-3957, decided April 24, 2024 involves how much time a veteran has to submit additional evidence when they select the additional evidence lane before the Board.

Historically claimants were advised they should submit argument, if any, during the 90-day period for submitting evidence following certification of appeals to the Board. That submission period was codified formerly at 38 C.F.R. § 20.1304(a). Relying on § 20.1304(a), the Court held in Bryant v. Wilkie, 33 Vet.App. 43 (2020), that the fair process doctrine prohibited the Board from issuing a decision before the expiration of that 90-day period when a claimant states an intention to submit argument (unless argument is, in fact, submitted sooner).  However, Bryant was in the legacy system, the Court now considered the same question in the AMA.

Here, the veteran requested 90 days until after his non-attorney representative received a copy of his claims file so the latter could submit evidence.  However, the veteran also filed a formal appeal to the Board and chose the direct review lane. The Board didn't wait the 90 days. “The question before the Court is whether the Board failed to liberally construe Mr. Brack’s delay request as stating an intention to submit argument and, if so, whether Bryant's fair process holding required the Board to honor the request in these circumstances for an exception to the expedited procedures of the direct review lane.  We conclude that, even if the Board did misconstrue the veteran's request, fair process didn’t require the Board to delay issuing its decision. The appellate procedures and options provided by the AMA ensure that a claimant in Mr. Brack's circumstances has ample opportunity to present argument to the Board, thereby affording all the procedural rights the fair process doctrine is meant to protect. That Mr. Brack chose the one appellate option ill-suited to his circumstances is not a proper basis for the Court, in the name of fair process, to alter the essential nature of that option.”  Id. at *2.

The Court explained Bryant was rooted on then Section 20.1304, which was amended by the AMA and represents a key difference from the legacy and AMA systems.

The Court explained:

“In the modernized system governing Mr. Brack's appeal, certification no longer occurs and an NOD is filed directly with the Board. 38 C.F.R. § 20.203(a) (2023). Most relevant here, there is no longer a general 90-day period for submitting additional evidence provided by § 20.1304. See 38 C.F.R. § 20.1304 (2023) (now covering only requests for changes in representation). Instead, the AMA introduced a key reform, allowing claimants to "choose from three procedural lanes to obtain review of their claim within one year of the initial decision." MVA, 7 F.4th at 1119. "The AMA's three-lane system was intended to alleviate the legacy system's growing appeals backlog by allowing claimants to choose from new and more efficient administrative review pathways specifically tailored for their needs."”

Id. at *7.

First, the Court rejected the notion of tension between the direct lane NOD request and request for additional time.  The Court explained: “Permitting claimants to choose the direct review lane and then demand individualized adjudication timelines would introduce procedural complexity and alter the fundamentally expeditious nature of the direct review lane, potentially causing delays for other claimants who chose the direct review lane precisely for its quickness.”  Id. at *11.

The Court explained the NOD was due in July 2022 and his representative received a copy of the claims file in January 2022, meaning if he had waited, he would have had 6 months to collect the new evidence and submit a NOD.  Id. at *11.  The Court concluded: “Thus, because there were procedural options open to Mr. Brack that would have provided him a reasonable opportunity to submit argument to the Board before it issued a decision, the Court is not persuaded that the fair process doctrine entitled him to a 90-day delay in the context of the direct review lane, which was designed to produce a Board decision as quickly as possible.”  Id. at *12.

Judge Jaquith wrote a concurrence explaining he believed the veteran failed to show prejudicial error and thus agrees with the result, but could not agree with the majority’s take on fair process under the AMA because it may weaken a commitment to fairness.  In terms of fair process, he noted: “To start, it is undisputed that fair process is required in both legacy and AMA cases. The Secretary specifically said that he "acknowledges that claimants have a general right to fair process in the development and adjudication of their claims and appeals before VA, including under the modernized system." Secretary's Supplemental (Supp.) Br. at 4. The Secretary agreed with the veteran that "even in situations where no particular procedural process is required by statute or regulation, the principle of fair process may nonetheless require additional process if it is implicitly required when 'viewed against [the] underlying concepts of procedural regularity and basic fair play' of the VA benefits adjudicatory system."”  Id. at *13. 

Judge Jaquith was concerned the majority’s language might undermine the commitment to fair process and instead argued: “Fair process is part of the soil in which the AMA system was planted. In the brave new AMA world, as in legacy days of yore, we consider what the fair process principle requires when no particular procedural process is prescribed by statute or regulation. Bryant, 33 Vet.App. at 46-47. I read the majority opinion as a commendable effort to do just that—to determine what the fair process principle requires in the sloppy circumstances of this case—and the Court's decision should not be read or used to subvert the fair process principles on which the system for adjudicating veterans claims rests. To that end, I cannot endorse statements that can be read to suggest that fair process principles are foreclosed by the direct review lane's fast pace.”  Id. at *15.  He then found error by the Board, but pivoted to the question of whether the error was prejudicial and determined “the veteran has not identified or developed any argument relating to that decision [the denial of an earlier effective date based on onset of the disability rather than the date of his claim] that the Board's unresponsiveness to his August 2021 request stymied.”  Id. at *19.

Decision by Judge Toth and joined in by the Judge Laurer with a concurrence by Judge Jaquith.

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