MacKlem: EAP Equals CUE

MacKlem: EAP Equals CUE

The decision in Leroy B. MacKlem v. Eric K. Shinkseki, Opinion Number 08-1409, decided August 10, 2010, involves a decision that was made through a now disallowed VA procedure, extraordinary award procedure (EAP). The Court initially denied the appeal by a single- judge memorandum decision but the decision was withdrawn and the Court found error in this panel decision.

The Veteran was a WWII veteran of the Occupation of Sicily. Prior to service he had been in a car wreck and injured his pelvis. He subsequently was discharged from the military with for a hip injury. He was initially granted a compensation rating but it was severed because the VA found the hip injury was a result of the car wreck and any aggravation was the natural progression of the injury.

The veteran claimed the VA had committed CUE in its decision. While the Court was downright antagonistic to the existence of actual CUE on the merits, the Court did find the VA erred in how it handled his case. After his allegations of CUE, the VA Regional Office proposed a decision that found CUE. However, this decision was changed through the extraordinary award procedure (EAP). EAP required certain awards by the Regional Office to be sent to the compensation and pension director for final determination. The directives creating EAP ordered the decisions granting extraordinary award shall not be disclosed to veterans or representatives and not that they were not to be told the original award had been reduced. EAP was invalidated by the Federal Circuit in Purple Heart v. Secretary of Veteran Affairs, 580 F.3d 1293 (1297 (Fed. Cir. 2009) in part because the procedure prevented a veteran from knowing what persuaded an unidentified decision-maker to reduce the award that was made by the persons before whom the hearing was held.

Here, because the Court found the VA applied an improper procedure the proper remedy was found to be to place the veteran in the position he was in before the EAP, in receipt of the favorable Regional Office decision.

Interestingly, the Court then went on to find the allegation of CUE was actually in error but that notwithstanding that fact, the veteran was entitled to the earlier favorable decision before the EAP process had intervened. The Court commented on the fact that many claims adjudicators are underqualified (26% do not have college degrees, 40% have college degrees, and only 34% have more than a college degree) and commented that the VA should be able to have some system to allow more experienced supervision to avoid mistakes. Id. at *12. Essentially, the Court took the Federal Circuit to school for its decision in Purple Heart and the VA to school for failing to correct the problem by finding a way to create an allowed system of reviews.

The short-term impact of this decision should be to open the way to a clear Court victory for any veteran that was denied under the EAP process. The long-term impact is that the opinion focuses on a real shortcoming in the claims process (inexperienced, undereducated, and undersupervised claims adjudicators). Unfortunately, I can imagine the result will be more pressure to deny all but the most simple claims at the Regional Office level while pushing more cases to the DRO and BVA level, which only exasperate those caseloads.

Decision by Judges Lance and Hagel with a concurrence by Judge Schoelen.

Breedlove: What Happens to a Case When a Veteran Dies?

Breedlove: What Happens to a Case when a Veteran Dies?

The decision in Charles L. Breedlove v. Eric K. Shinkseki, Opinion Number 08-3059, decided August 10, 2010, answers the question of what happens when a veteran dies during a case before the Court.

The obvious answer to the above question might be to allow the veteran’s surviving spouse or children to take the veteran’s place. But, that has not been the Court’s practice. Instead, the Court would only allow substitution of party after the case was submitted to the Court, which meant where the veteran’s death occurred after briefing of the case was complete.

However, in light of a new law passed by Congress, 38 U.S.C. Section 5121A the, Court reconsidered its practice and liberalized the ability to substitute a party. Section 5121A as read by the Court specifically applies to an appeal before the VA (as opposed to the Court) and allows substitution when a claimant dies while his appeal is pending before the VA. The Court held that while Section 5121A did not apply directly to the Court, it altered the underpinnings of the Court’s jurisprudence “because a claim for VA benefits no longer necessarily dies with the veteran. The legislation expressly recognizes that an accrued-benefits claimant, in appropriate cases, can continue the veteran’s claim.” Id. at *12. Thus, the Court concluded “no rationale now exists for foreclosing the opportunity for substitution on appeal at this Court based on the time of the death of the veteran.” Id. at *13. “Therefore, [the Court] now hold[s] that, based on enactment of section 5121A, a veteran’s chapter 11 disability benefits claim survives the death of the veteran, not for the purpose of providing VA benefits to a veteran, but for the purpose of furthering the claim of an eligible accrued-benefits claimant. Since Congress has now created an avenue for an accrued-benefits claimant to continue to pursue a veteran’s claim within VA after the veteran’s death, the Court henceforth will consider substitution, if requested, in all cases pending before the Court regardless of the stage of briefing at the time of veteran’s death.” Id. at *13.

The Court then clarified that an accrued-benefits claimant has two options: a) request substitution and carry on the appeal of a deceased veteran through the judicial process, or b) not request substitution and allow the Board decision on a deceased veteran’s claim to be vacated and pursue the accrued-benefits claim anew.

Practically speaking, the decision to substitute as a new party or allow the decision to be vacated and start anew is difficult. Starting anew will likely mean long wait times to go through the administrative levels whereas winning an appeal would start you out as an appealed case which means you should be afforded expeditious treatment. So, assuming you think you can win a decision at the Court level through a Joint Motion for Remand you might be better off taking that route. Additionally, of course, the issue of attorney’s fees is important. A prevailing party before the Court is awarded attorneys fees under the Equal Access to Justice Act. Assuming a claimant prevails before the Court and is awarded attorney’s fees under most fee agreements that will reduce any future attorney fee’s awarded from the back pay, meaning substituting as a party and continuing the case before the Court might also be the best financial option for the claimant.

Decision by Judges Moorman and Lance with a concurrence by Chief Judge Kasold.

Hamer: TDIU, Staging and Stabilization

Hamer: TDIU, Staging, and Stabilization[1]

The decision in Steven W. Hamer v. Eric K. Shinkseki, Opinion Number 07-3181, decided July 27, 2010, involved an appeal from a decision that found TDIU but staged the award.

The Veteran had been granted TDIU from 1978 until TDIU was terminated 1985 because of employment. In fact, the veteran was employed as a National Service Officer for a veteran’s service organization from 1989 until 2000. In 2000, Hamer filed a motion to revise the 1985 termination based on clear and unmistakable error and filed for a TDIU. The VA granted TDIU from April 2000 until the present while finding clear and unmistakable error in the prior decision and awarding TDIU from January 1990 through November 1990 while denying TDIU for the time from December 1990 through April 2000. The Board affirmed the decision and the veteran appealed arguing a partial restatement of a stabilized rating cannot be discontinued during a portion of the retroactive award period.

The Court affirmed the Board and found that because the VA decision finding clear and unmistakable error in the termination was accepted as if it had been made at the time of the original decision, than staging was proper and stabilization issues did not come into play.

The Court stated staging is appropriate for initial decisions and then found the 2007 Board decision was appealed from was essentially an initial decision because it substituted for the decision which was found to be clearly and unmistakably erroneous.

Regarding stabilization and another argument concerning protective rights for TDIU found at Section 5112 and 3.105, the Court found the veteran “entered into this appeal without an award or total disability based on individual employability. He was assigned staged disability ratings simultaneously and will leave the appeals process with more disability compensation than when he entered. In other words, at the time his benefits were restored in 2007, he had been living without VA benefits for over 15 years, and thus he did not need to ‘adjust to the diminished expectation,’ i.e., prior to 2007, he was not reliant upon benefits to which he was not in receipt of. Accordingly, the protective rights that prohibit VA from reducing a total disability are not applicable here.” Id. at *5-*6. The Court then found the procedural protections of 38 C.F.R. Section 3.344 (regarding stabilization) are inapplicable to retroactively assigned staged disability ratings.

This case is important because it allows for staging in cases that are being revised or rated because of CUE and found stabilization did not apply to retroactively assigned TDIU cases.

Decision by Judges Hagel, Moorman and Lance.

---

[1] The Court has found that because of stabilization a total disability rating cannot be reduced on the basis of a single examination unless all of the evidence of record establishes that a claimant’s condition has undergone sustained material improvement. A marked difference in employment may qualify as improvement.

Sperry: Attorney for the Secretary and Veteran-Conflict of Interest

Sperry: Attorney for the Secretary?

The decision in George H. Sperry v. Eric K. Shinkseki, Opinion Number 07-0607(E), decided July 27, 2010, involved an EAJA application.

Attorney Leonard had been a VA deputy assistant general counsel and in 2001 signed an unopposed motion to remand Mr. Sperry’s PTSD claim. In 2003 Attorney Leonard entered private practice and was hired by Mr. Sperry in March 2007 to represent him in his appeal of his VA denial of his PTSD claim. In January 2008 Attorney Leonard entered a brief in the case. In April 2008 a joint motion to stay was entered into regarding a potential conflict of interest and subsequently Attorney Twyford filed a notice of appearance in the case on behalf of Attorney Sperry. The Court reversed in part and remanded the case to the BVA. Subsequently, Attorney Twyford submitted an EAJA application that included work performed by Attorney Leonard. The Secretary filed a response arguing Attorney Leonard’s work should not be allowed because his representation of Mr. Sperry violated Model Rule 1.9(a) regarding a conflict of interest and that Attorney Twyford’s work was unproductive and duplicative.

The Court was unpersuaded of any conflict of interest in this case. First, the Court found the trigger regarding representing a party before it was the filing of a written notice of appearance and such was never filed with regard to Attorney Leonard in his role as VA deputy assistant general counsel. Second, the Court looked to Model Rule 1.11 for guidance and found the signing of the unopposed motion to remand was a merely ministerial act and was not substantial.

The Court ended up reducing by 1 hour the work of Attorney Twyford saying 1.6 hours were too much to prepare a client letter and representation agreement.

Decision by Chief Judge Greene with Moorman and Davis.

Patrick: For the Love of the Veteran (An EAJA Denial)

Patrick: For the Love of the Veteran (An EAJA Denial)

The decision in Carolyn J. Patrick v. Eric K. Shinkseki, Opinion Number 08-10899(E), decided July 19, 2010, was reconsideration of a single-judge decision which denied an EAJA application. The decision again denied the application.

A 1999 BVA decision denied that a prior decision contained clear and unmistakable error. In 2002 the Court of Veteran Appeals affirmed but this decision was vacated and remanded by the Court of Appeals for the Federal Circuit in 2004. The Court of Veteran Appeals then again affirmed the decision in 2006 and in 2007 the Court of Appeals for the Federal Circuit again vacated and remanded the case. The Federal Circuit noted the argument was based on whether the BVA had misapplied 38 U.S.C. Section 1111 in 1986 and directed that the BVA determine whether the government had rebutted the presumption of soundness found under section 1111 by providing clear and unmistakable evidence of no in-service aggravation of the claimed disability. In 2008, the Court of Appeals for Veteran Claims vacated the BVA decision and “determined that in accordance with the Federal Circuit’s Wagner holding that its interpretation of section 1111 applied even in the CUE context, in order to determine whether the presumption of soundness had been rebutted, the Board in May 1999 was then required to consider whether the Board in 1986 had been presented with clear and unmistakable evidence that either Mr. Patrick’s condition did not increase in severity during service or any increase was ‘due to the natural progress of the disease.’” Id. at *3.

The issue was whether the Secretary had met his burden of demonstrating the government’s position was substantially justified at both the administrative and litigation stages. Regarding the administrative stage, the Court noted “a failure to provide an adequate statement of reasons or bases does not in all cases negate a finding that the Secretary was substantially justified.” Id. at *5. “In the underlying case, the catalyst for the remand was the Federal Circuit’s holding that its interpretation of section 1111 set forth in Wagner applied even in a CUE context. Although the error found by the Court was termed a reasons-or-bases error, that error became apparently only after the Federal Circuit directed remand to the Board…. Thus, because the purpose of the Court’s remand was for the Board to comply with the Federal Circuit’s then-recent interpretation of section 1111, in light of the law as it was understood at the time of the 1999 Board decision (which required only clear and unmistakable evidence of preexistence to rebut the presumption of soundness), the Board’s failure to provide Mrs. Patrick with reasons or bases regarding whether the Secretary had rebutted the aggravation prong of the presumption of soundness under section 1111 was reasonable.” Id. at *5.

Regarding substantial justification at the litigation stage, the Court accepted the Secretary’s argument that his position was substantially justified because the Court had found the presumption of soundness as interpreted in Wagner does not have retroactive application in a CUE case. Effectively, the Court is using its previous (and incorrect decision in the same case) to say the Secretary’s position was justified. This is problematic to say the least. Also regarding the administrative stage, the problem is that the Federal Circuit stated in its decision that Wagner did not change the law but explained what section 1111 has always meant. Thus, it seems the denial of the EAJA application is set up for an appeal to the Federal Circuit.

Still, this is one of those cases that illustrates the perversity that being the first attorney to win a hard case might not be in your best short-term business interests.

Decision by Chief Judge Greene with Kasold and Hagel.

Easing the Stressor Requirement for PTSD

The following is taken from the N.Y. Times, July 7, 2010.

Veterans Affairs to Ease Claim Process for Disability

By JAMES DAO

The government is preparing to issue new rules that will make it substantially easier for veterans who have been found to have post-traumatic stress disorder to receive disability benefits for the illness, a change that could affect hundreds of thousands of veterans from the wars in Iraq, Afghanistan and Vietnam.

The regulations from the Department of Veterans Affairs, which will take effect as early as Monday and cost as much as $5 billion over several years according to Congressional analysts, will essentially eliminate a requirement that veterans document specific events like bomb blasts, firefights or mortar attacks that might have caused P.T.S.D., an illness characterized by emotional numbness,irritability and flashbacks.

For decades, veterans have complained that finding such records was extremely time consuming and sometimes impossible. And in the wars in Afghanistan and Iraq, veterans groups assert that the current rules discriminate against tens of thousands of service members — many of them women — who did not serve in combat roles but nevertheless suffered traumatic experiences.

Under the new rule, which applies to veterans of all wars, the department will grant compensation to those with P.T.S.D. if they can simply show that they served in a war zone and in a job consistent with the events that they say caused their conditions. They would not have to prove, for instance, that they came under fire, served in a front-line unit or saw a friend killed.

The new rule would also allow compensation for service members who had good reason to fear traumatic events, known as stressors, even if they did not actually experience them.

There are concerns that the change will open the door to a flood of fraudulent claims. But supporters of the rule say the veterans department will still review all claims and thus be able to weed out the baseless ones.

“This nation has a solemn obligation to the men and women who have honorably served this country and suffer from the emotional and often devastating hidden wounds of war,” the secretary of veterans affairs, Eric K. Shinseki, said in a statement to The New York Times. “This final regulation goes a long way to ensure that veterans receive the benefits and services they need.”

Though widely applauded by veterans’ groups, the new rule is generating criticism from some quarters because of its cost. Some mental health experts also believe it will lead to economic dependency among younger veterans whose conditions might be treatable.

Disability benefits include free physical and mental health care and monthly checks ranging from a few hundred dollars to more than $2,000, depending on the severity of the condition.

“I can’t imagine anyone more worthy of public largess than a veteran,” said Dr. Sally Satel, a psychiatrist and fellow at the American Enterprise Institute, a conservative policy group, who has written on P.T.S.D. “But as a clinician, it is destructive to give someone total and permanent disability when they are in fact capable of working, even if it is not at full capacity. A job is the most therapeutic thing there is.”

But Rick Weidman, executive director for policy and government affairs at Vietnam Veterans of America, said most veterans applied for disability not for the monthly checks but because they wanted access to free health care.

“I know guys who are rated 100 percent disabled who keep coming back for treatment not because they are worried about losing their compensation, but because they want their life back,” Mr. Weidman said.

Mr. Weidman and other veterans’ advocates said they were disappointed by one provision of the new rule: It will require a final determination on a veteran’s case to be made by a psychiatrist or psychologist who works for the veterans department.

The advocates assert that the rule will allow the department to sharply limit approvals. They argue that private physicians should be allowed to make those determinations as well.

But Tom Pamperin, associate deputy under secretary for policy and programs at the veterans department, said the agency wanted to ensure that standards were consistent for the assessments.

“V.A. and V.A.-contract clinicians go through a certification process,” Mr. Pamperin said. “They are well familiar with military life and can make an assessment of whether the stressor is consistent with the veterans’ duties and place of service.”

The new rule comes at a time when members of Congress and the veterans department itself are moving to expand health benefits and disability compensation for a variety of disorders linked to deployment. The projected costs of those actions are generating some opposition, though probably not enough to block any of the proposals.

The largest proposal would make it easier for Vietnam veterans with ischemic heart disease, Parkinson’s disease and hairy-cell leukemia to receive benefits.

The rule, proposed last fall by the veterans department, would presume those diseases were caused by exposure to Agent Orange, the chemical defoliant, if a veteran could simply demonstrate that he had set foot in Vietnam during the war.

The rule, still under review, is projected to cost more than $42 billion over a decade.

Senator Jim Webb, Democrat of Virginia and a Vietnam veteran, has asked that Congress review the proposal before it takes effect. “I take a back seat to no one in my concern for our veterans,” Mr. Webb said in a floor statement in May. “But I do think we need to have practical, proper procedures.”

More than two million service members have deployed to Iraq or Afghanistan since 2001, and by some estimates 20 percent or more of them will develop P.T.S.D.

More than 150,000 cases of P.T.S.D. have been diagnosed by the veterans health system among veterans of the two wars, while thousands more have received diagnoses from private doctors, said Paul Sullivan, executive director of Veterans for Common Sense, an advocacy group.

But Mr. Sullivan said records showed that the veterans department had approved P.T.S.D. disability claims for only 78,000 veterans. That suggests, he said, that many veterans with the disorder are having their compensation claims rejected by claims processors. “Those statistics show a very serious problem in how V.A. handles P.T.S.D. claims,” Mr. Sullivan said.

Representative John Hall, Democrat of New York and sponsor of legislation similar to the new rule, said his office had handled dozens of cases involving veterans who had trouble receiving disability compensation for P.T.S.D., including a Navy veteran from World War II who twice served on ships that sank in the Pacific.

“It doesn’t matter whether you are an infantryman or a cook or a truck driver,” Mr. Hall said. “Anyone is potentially at risk for post-traumatic stress.”

Bryant: The Board's Duty to fully explain the issues and suggest evidence

Bryant: The BVA’s Duty?

The case of Walter A. Bryant v. Eric K. Shinkseki, Opinion Number 08-4080, decided July 1, 2010, affirmed and reversed in part a denial of service-connection for various conditions.

The Court’s decision principally used the opportunity to further discuss the Board member’s duty to fully explain the issues as well as the duty to suggest the submission of evidence possibly overlooked. Here, the Board member began the hearing by noting four issues for appeal and identifying them. However, the Court found “Although this statement explained the issues in terms of the scope of the claim for benefits, it did not ‘explain fully’ the outstanding issues material to substantiate the claim, which in this instance were current disability and medical nexus.” Id. at *10. The Court continued, “Even though the hearing officer made inquiries during the hearing regarding whether any doctor had ever related the appellant’s claimed disabilities to service and the basis for asserting a disability, at no point did the Board member explain that these issues were material to substantiate the claim—i.e., that they were the reasons the appellant’s claims were denied by the RO. Accordingly, the Board member erred as to the first duty—to fully explain the issues”. Id. at *10.

The duty to suggest the submission of evidence possibly overlooked was more complicated. The Court looked at the allegations of frostbite, hearing loss and tinnitus first and found that a VA medical examination stated the appellant did not have a diagnosis for these conditions. The Court then found, “Under these circumstances, nothing gave rise to the possibility that evidence had been overlooked with regard to the appellant’s claim for benefits for frostbite, hearing loss, and tinnitus.” Id. at *11. However, regarding the claim for service connection for squamous cell carcinoma, the Court noted a diagnosis for a skin cancer that is a form of a squamous cell carcinoma and noted the lack of medical evidence addressing the nexus between the skin cancer and an in-service event or injury “gave rise to the possibility that evidence had been overlooked, and the Board hearing officer should have suggested that the appellant secure and submit this evidence if he could”. Id. at *11.

However, what the Court gives it can also take away in the form of its notice requirement. Remember the Court found a breach of the Board member’s duty to fully explain the issues and a duty to suggest the submission of evidence possibly overlooked with regard to the squamous cell carcinoma. First, the Court considered prejudice to the appellant. The Secretary had argued that section 5103(a) notice letters eliminated any possibility for prejudice but the Court refused this argument on the basis that these were two different notice requirements with different intents. However, when specifically considering frostbite, hearing loss, and tinnitus, the Court found that “although the Board hearing officer did not explicitly lay out the material issues of medical nexus and current disability, the record reflects that they were developed by the Secretary—to include medical examination reports on each of the disabilities and any nexus to service—and there was no indication that the represented appellant had any additional information to submit. Accordingly, the ‘clarity and completeness of the hearing record’ was intact with respect to these disabilities and the purpose of § 3.103(c)(2) was fulfilled.” Id. at *12-*13. Regarding the squamous cell carcinoma, the Court found prejudice because the failure to lay out the material issues combined with a failure to suggest medical evidecnce as to service-connection, “evidence that was lacking at the time of the hearing, and that remained lacking through final Board decision.” Id. at *13.

A separate opinion by Judge Lance make two suggestions to increase the effectiveness of the majority opinion. First, the Board should be required to look at the most recent Regional Office decision (i.e., the most recent Supplemental Statement of the Case) and clearly explain what elements of the claim were found deficient and what type of evidence would help the appellant prevail. Second, and perhaps most important, the dissent expressed concern the prejudice requirement essentially gutted the duty to fully explain the issues in many cases. The dissent believes the prejudice standard enacted by the Court (whether the error affected the clarity and completeness of the hearing record) destroys the opportunity for the appellant to have an opportunity to submit favorable evidence by failing to ensure the veteran understands what issues require the submission of favorable evidence.

The Case is important for clarifying the Board member’s duties and while it does not create any additionally duty, it certainly provides appellant’s before the Court of Appeals with another strong line of argument. However, a determination of a breach of these duties and possible requires a case by case that will likely result in more issues being argued before the Court.

Decision by Judge Kasold and Davis with a separate opinion by Judge Lance.