Fuller: A Veteran’s Ability to Challenge an Effective Date for Spousal Apportionment for the Spouse

Fuller v. McDonough, Case Number 18-7000, decided February 23, 2022 discusses the ability for a veteran to challenge an effective date for spousal apportionment for the spouse.

The veteran filed an appeal asking for an earlier effective date for apportion of VA benefits to his spouse.  It specifically considered whether California community property law conferred standing on Mr. Fuller to pursue this appeal.  The Court determined: “that as a consequence of his intact marriage to Ms. Fuller, the lack of evidence of planned marital dissolution, the fact that the claim at issue will benefit both spouses, their mutually expressed unity of interest in the pursuit and outcome of the earlier effective date claim, and the economic injury to their community property sustained by VA's denial of an earlier effective date for the apportioned benefits, Mr. Fuller has standing to pursue the appeal.”

Mr. Fuller was married and was granted a disability rating, but a portion was withheld because he was incarcerated.  The 2004 notification letter informed him his dependents may be entitled to apportionment of the withheld portion. The veteran than filed a declaration of status of dependents resulting in the VA sending a letter to his wife and notifying her of the right to file an apportionment claim and seeking verification of her income and expenses.  It appears she did not respond to the VA’s letter.

Approximately 5 years later, the veteran provided the VA with an updated address for his  the wife, which indicated his belief she was receiving apportionment of his benefits.  Meanwhile, within days of that letter, his wife expressed her desire to file for apportion from any benefits due.

The VA sent the veteran a letter acknowledging the request for apportionment and asking for further information.  The veteran responded by a letter expressing his belief apportionment had occurred already.  Finally, the VA established an apportionment in 2009 with a 2009 effective date.  The veteran filed a NOD requesting an earlier effective date.  The claim was remanded by the Board because it was not apparent the wife had received a copy of the SSOC or been told of the hearing.  Notice was given to the wife and then the Board remanded again for the RO to address whether the veteran had standing to file a NOD on behalf of the spouse.  The RO and Board next determined the veteran did not have such standing.  The result was a Court appeal and remand for the RO to address whether the veteran was authorized to file an NOD as to the apportionment effective date.

The Board ultimately admitted the veteran’s standing but said a claim for apportionment was not submitted until 2009.

On appeal, the Court agreed with the issue of standing based on the fact California is a community property state.  “Put plainly, in a community property system spouses jointly own all property created or acquired during the marriage, regardless of which spouse earned that property.”  The Court distinguished this case from separation or divorce cases:  “Simply put, the USFSPA, Mansell, and Howell do not apply in this case. Mr. and Ms. Fuller were married at the time that Mr. Fuller was first awarded benefits; married when Mr. Fuller first identified Ms. Fuller as a dependent eligible for an apportionment of his benefits during his incarceration; and their marriage has continued, including the period during which Mr. Fuller appealed to this Court.  Unlike in Mansell and Howell, where veterans in the context of divorce proceedings asserted a property interest that was diametrically opposed to their former spouses' financial interest, the Fullers have an intact marriage, they have jointly asserted entitlement to an earlier effective date for apportionment, and Mr. Fuller is not asserting a property interest in opposition to Ms. Fuller's.” 

After determining the veteran had standing, the Court turned to the merits (proper effective date).   This portion turned on the presumption of regularity.  The Court explained: “The Board considered the Fullers' assertion that Ms. Fuller did not receive the April 2004 VA letter, as well as her statement that she had no contact from VA until 2009. However, the Board applied the presumption of regularity, concluded that VA in April 2004 properly sent Ms. Fuller notice of her right to apportionment, and determined that the presumption was not rebutted by clear evidence to the contrary.”

The veteran essentially argued he erroneously gave the VA an incorrect address for his wife due to his incarceration.  The Court accepted this argument finding a reasons and bases error and explained: “The Board considered the Fullers' assertion that Ms. Fuller did not receive the April 2004 VA letter, as well as her statement that she had no contact from VA until 2009. However, the Board applied the presumption of regularity,  concluded that VA in April 2004 properly sent Ms. Fuller notice of her right to apportionment, and determined that the presumption was not rebutted by clear evidence to the contrary.”

The Court even noted “the troubling opportunities for error in the establishment and development of apportionment claims, as evinced by the Fullers' experience.”  The Court focused on the fact the VA relies on the veteran to provide an address for the person who might seek apportionment and noted “Such a system evokes fair process concerns.”

This decision is a blueprint for challenging a failure to apportion earlier. 

Judge Allen dissented explaining based on a lack of standing focusing on a lack of statutory right to appeal to the Board and a lack of a legally cognizable interest in his wife’s apportioned benefits.

Decision by Chief Judge Bartley and Greenberg.  Dissent by Judge Allen.

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Veterans Legal Advocacy Group: Writs regarding Mailing addresses and Sanctions

Veterans Legal Advocacy Group v. McDonough, Case Number 20-8291, decided February 14, 2022 involved a writ sought to require the VA to correct the mailing address of the petitioner.

The Petitioner was a law firm that had sought to change or update its mailing address with the VA, but the VA continued to mail materials the old address.  The law firm filed a writ requesting that the Court intervene to force the VA to correct the problem. Initially, this is a big problem for attorneys that move.  The VA has for years simply been unable to update mailing address for the attorneys, resulting in some correspondence being sent to the correct address and others going to the old address.

The Court asked for a response from the VA and the VA ultimately fixed the problem with this attorney and submitted affidavits saying all files had been updated. 

The Court declined to sanction the VA because the Secretary had not violated a court order and not further action is necessary.  It noted sanctions are reserved for situations in which (1) there is a Court order that is clear and unambiguous, (2) there is clear and convincing proof of noncompliance with that Court order, and (3) it is clear that the party at fault was not reasonably diligent in trying to abide by the Court order.

This decision might strike some as unnecessary, but shows the lack of competence of the VA to do something as simple as update the address for an attorney and fact that we sometimes have to fight the VA to do something that should be obvious and easy. 

Order by Judges Greenberg, Meredith, and Laurer.

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Stover: Thailand and Agent Orange Exposure

Stover v. McDonough, Case Number 20-5580, decided July 11, 2022 discusses how Thailand veterans prove exposure to Agent Orange.

The Court begins by noting that Congress has created a presumptive for Vietnam veterans, but not Vietnam Era Thailand veterans.  However, it also notes that the VA’s Adjudication Procedures Manual (M21-1) speaks to the question of Thailand Agent Orange exposure.

The veteran served at Takhli Royal Thai Air Base during the Vietnam war and sought service connection for diabetes mellitus due to exposure to tactical herbicides during his service in Thailand.

This case concerned the Board’s interpretation of the M21-1, which provides “under certain circumstances, veterans who establish that they served "on or near the perimeter[]" of an RTAFB may show, through performance of their duties, that they were exposed to herbicides.”  The Court noted the manual does not provide a true presumption of exposure, but “eases the burden of proving exposure, which is highly significant to a claimant.”

The Court “conclude[d] that the Board erred by failing to explain what it understood "near the perimeter[]" to mean when it denied appellant's claim in large measure because appellant had not established that his duties regularly placed him "near the perimeter[]" of the Takhli RTAFB. Because the Board's approach to this issue put appellant in the untenable position of not knowing what he needed to prove to satisfy the rule of decision the Board adopted.”

This veteran served as an electronics warfare systems repairman.  He stated he worked many hours every day on the flight line, which was close to the base perimeter.  He also submitted photographs of his living quarters and location of the flight line.  The Secretary began by arguing the M21-1 might not be binding on the Board, but that in any case the veteran’s military occupation (working on flight line) is so different from security jobs listed in the M21-1 that any special consideration does not apply and the Secretary argued the statements of being within 500 meters of the perimeter were insufficient.  The Secretary also argued that “on or near” the perimeter meant being close enough to physically tough the perimeter.

The Court dodged the question of whether the M21-1 is binding on the Board, but did determine that the Board adopted the M21-1 provision as the rule of decision in the case by employing the language of the provision.

The Court then pivoted to the question of the Board’s application of the M21-1 provision and determined the Board failed to give an adequate reasons or bases for its decision because it failed to define the term “near the perimeter.”  The Court’s larger point is that a Board determination based on undisclosed standards is error.

Judge Greenberg wrote a concurrence stating he would have gone further and reversed and found the veteran served near the perimeter.

This is a helpful case for any Vietnam era veteran who served in Thailand.

Decision by Judge Allen and joined by Meredith.  Concurrence by Judge Greenberg.

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Barry: Special Monthly Compensation and Half-Steps

Barry v. McDonough, Case Number 20-3367, decided February 3, 2022 discusses the ability to gain half-steps for SMC ratings.

Special Monthly Compensation (SMC?) is a system that provides for compensation at a disability rate above that provided in the rating schedule.

The case involves intermediate or half-step rating increase in SMC under certain circumstances.  “The specific question we address today is whether § 3.350(f)(3) may be used more than once to provide for such an intermediate or half-step rating increase for SMC.   In other words, does § 3.350(f)(3) provide for only one intermediate rating or may it be used to provide multiple intermediate ratings subject only to the maximum rate payable for SMC?  Because we hold that § 3.350(f)(3) entitles a claimant to receive only one half-step rating increase in SMC benefits, we conclude that the Board did not err when it failed to discuss the possibility of entitlement to any additional half-step ratings under § 3.350(f)(3).”

Essentially the veteran argued that multiple half-step SMC ratings could accrue to an entire step increase.  The Court characterized the veteran argument as:

“the plain language of the regulation provides for as many intermediate increases as a claimant's condition can justify, subject only to the maximum SMC rate Congress has set. In that regard, he provides an example of how he believes § 3.350(f)(3) should have been applied in his case. His application goes like this: we start with appellant's entitlement to SMC(m) based on the loss of use of his legs; then VA should consider that he has a 70% rating for PTSD that allows him to go up one intermediate step to receive  compensation at the SMC(m 1/2) level; then VA should consider that he has two 30% ratings for left eye conditions that combine to make a 50% rating, which entitles him to another intermediate step to receive compensation at the SMC(n) level; then combining his left and right shoulder ratings, he would get another intermediate increase up the SMC(n 1/2) level; and finally, the remainder of his disabilities combine to a 50% rating that entitles him to obtain the maximum rate for SMC benefits, provided for at the SMC(o) level.”

The veteran also argued some alternative bases for an increase, which led to a discussion about issue exhaustion.  The Court noted that though the veteran argued the invalidity of a regulation for the first time before the Court, it was appropriate for the Court to consider the argument because the Board is bound by VA regulations and it would have been futile to make such an argument before the Board.  The Court also focused on the purely legal nature of the question.

As to the statutory review, the Court admitted the plain language of regulation 3.350(f) does not resolve the question.  Id at *12.  Instead, the Court pointed to the statutory language of 1114(p), in which “Congress provides that "the Secretary may allow the next higher rate or an intermediate rate."  The use of the terms "the" and "an" in conjunction with the singular term "rate" in the authorizing statute indicates that one singular "rate" would be provided through any regulation the Secretary adopted to implement the statute.”

Ultimately, the Court determined:

“In sum, we hold that § 3.350(f)(3) can only be used once to increase a claimant's SMC rate.  As explained above, there are indications pointing to that interpretation even if we confined ourselves to the language of (f)(3) standing alone. In addition, Congress purposefully omitted language concerning repeated use in section 1114(p), on which (f)(3) is based, despite permitting repeated use in other sections of the statute. And, reading § 3.350(f)(3) as we do, provides purpose for its subsequent subsection (f)(4). Because we can use the tools of interpretation to assess the regulation's meaning, we need not resort to other canons of construction, including deference to the Agency's interpretation of the regulation were it "genuinely ambiguous" or the pro-veteran rule of construction from Brown v. Gardner. Therefore, we hold that the Board did not err when it failed to consider the application of § 3.350(f)(3) more than once in its assessment of whether appellant was entitled to a higher SMC rate.”

Judge Jaquith concurred and dissented in part.  He argued the plain meaning of the statute and regulation do provide for “two half-step increases—to the intermediate rate and, for the veteran already there, to the next higher statutory rate.”  Id. at *18.  Judge Jaquith leaned on the plain meaning of the statute and regulation as well as the duty to maximize benefits and the pro-veteran canon.

This decision blocks off the full compensation allowed by multiple half-step SMC ratings.  It has been appealed to the Federal Circuit and I look forward to its resolution.

Decision by Judge Allen and joined by Falvey.  Dissent by Judge Jaquith.

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Wilson: The Scope of the Claim before the Board

Wilson v. McDonough, Opinion Number 19-3791, was decided January 26, 2022 and involves what happens when the VA performs minimal or inadequate VA examiantions.

The veteran was granted a 10% tinnitus rating and 0% hearing loss rating.  However, the veteran filed a Form 9 to the Board noting the VA had not tested for peripheral vestibular disorder (PVD) and noting his PVD caused dizziness and staggering.   

The VA responded by sending a form letter stating his claims had to be submitted on a standardized form.  The form letter said “nothing about whether the veteran's PVD would be included in his appeal, and it does not indicate that a separate claim for that disorder was required or that PVD would not be considered based on what he had already submitted. The veteran acknowledged the correspondence and, having "no further claims to submit," asked "that the appeal process continue."

The Board then rendered a decision which did not address the veteran’s PVD or dizziness or staggering.  The veteran appealed and focused on the need for a new examination.  The Secretary took the position that the Form 9 indicated an informal intent to seek benefits for PVD, dizziness and staggering, but the Board was under no obligation to discuss these issues because the veteran never filed a formal claim as instructed.

The Court began with Bailey v. Wilkie, 33 Vet.App. 188, 199 (2021), and noted "VA is obligated to develop and adjudicate claims for secondary service connection that are reasonably raised during the processing of a properly initiated claim as to the primary service-connected disability's evaluation level.”  The Court in Bailey reasoned "the ordinary meaning of 'complications' in § 3.155(d)(2) encompasses disabilities caused or aggravated by treatment for a service connected disability," the regulation imposes a duty n the Agency to consider claims for secondary service connection if they are raised during the course of adjudicating a complete claim concerning a related, primary disability.”

The Court then found the Secretary had conceded the Form 9 request was for service connection on a direct or secondary basis.  The Court then noted the Board is required to consider all issues raised by a veteran and to construe the arguments in a liberal manner for purposes of determining whether they raise issues on appeal. 

The Court found the Form 9 was directed to the Board and the response from the VA contained boilerplate and did not address the actual issue (PVD) in the letter.  The Court actually characterized the VA’s letter as an “uninformative form letter.”  The Court then determined a remand was necessary because:

“no one told the claimant in an understandable way that what he'd submitted was insufficient or notified him "of the information necessary to complete the appropriate application form prescribed by the Secretary." 38 C.F.R. § 3.155(b)(3) (setting forth the Secretary's responsibility "[u]pon receipt of an intent to file a claim"). Moreover, the Board did not state any reasons or bases for not addressing the veteran's February 2017 Form 9 claims.”

This is an important case that pushes back against the VA’s increasingly narrow definition of a claim and unwillingness of the Board to address issues that were not specifically addressed by the RO.  Since the AMA, the VA has become chained to forms rather than reason to the detriment of veteran.  This case should help push back against that ignorance.

Decision by Judge Jaquith and joined in by Judges Pietsch and Greenberg.

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Constantine: Nehmer and Korean Veterans

Constantine v. McDonough, Case Number 18-7044, decided January 14, 2022 discusses the expansion of the Nehmer class to allow for an earlier effective date for the veteran. 

Nehmer is a class action suit related to VA regulations as to Agent Orange exposure that resulted in a class action order in the US District Courts, which has been overseen by the U.S. District Court of Northern California.

In this case, the Board determined the veteran was not a member of the class identified in Nehmer and thus does not receive the earlier effective date allowed by the class settlement.  The Veterans Court noted it had jurisdiction over the appeal and the authority to decide whether the veteran was/should be a class member, but declined to exercise jurisdiction for risk two federal courts could arrive at conflicting outcomes and thus unnecessarily complicate litigation.

The veteran in this case did not serve in Vietnam, but Korea in the DMZ.  The veteran argued he should receive the effective date allowed by Nehmer because the Nehmer class definition was not limited based on geographic location of herbicide exposure. 

The Court declined to exercise jurisdiction and explained:

“Congress transferred exclusive subject-matter jurisdiction over veterans benefits cases to our Court in 1988. Nehmer remains a vestige of the pre-VJRA judicial system—a historical anachronism—and that fact and the factors discussed herein weigh in favor of declining to exercise jurisdiction over the only argument raised by the veteran in this case. But we stress, however, the unique and extraordinarily rare situation that this case presents. Our decision to decline exercising jurisdiction in Mr. Constantine's appeal comports with general principles of comity and judicial economy that counsel against courts exercising jurisdiction in such a way that might interfere with the order of another court. See, e.g., Zambrana v. Califano, 651 F.2d 842, 844 (2d Cir. 1981) (citing Bergh v. State of Washington, 535 F.3d 505, 507 (9th Cir. 1976), Torquay Corp. v. Radio Corp. of America, 2 F. Supp. 841, 844 (S.D. N.Y. 1932) ("[A]s a matter of comity and of the orderly administration of justice, [a] court should refuse to exercise its jurisdiction to interfere with the operation of a decree of another federal court.")). Accordingly, we decline to exercise jurisdiction in this case. To the extent that Mr. Constantine believes that he is wrongfully being excluded from the Nehmer class, he is not without recourse; he can seek enforcement with the District Court.”

This decision is a novel attack on the class member definition found in Nehmer and has already been appealed to the Federal Circuit.  The result will be interesting.

Decision by Chief Judge Bartley and joined by Judge Meredith.  Judge Greenberg dissented saying he would exercise jurisdiction.

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Page: Adding to the RBA

Page v. McDonough, Case Number 19-0865, decided January 14, 2022 discusses an addition to the RBA. 

This case involves the Record Before the Agency, constructive possession by the Board, and the interaction with Euzebio v. McDonough (Euzebio II), 989 F.3d 1305 (Fed. Cir. 2021), vacating, remanding Euzebio v. Wilkie (Euzebio I), 31 Vet.App. 394 (2019).

The Court noted “the appellant argues that there are references in the record of proceedings (ROP) to fee-basis treatment records that had been scanned into VistA, but because VistA records are not automatically included in the claims file, those records were "not before the Board as required." As a result, the Secretary attempted to add the records to the RBA and continue the case before the Court.  The Veteran argued instead . “where the Board has actual notice of the existence of records missing from the claims file, the Board errs in not obtaining and reviewing those records, and the Court must remand for the Board to do so.”

The Court held:

“where a party in the context of a record dispute proffers for inclusion in the RBA documents that were constructively before the Board, those records should be included in the RBA.  Based on the appellant's concession that the VistA Imaging documents at issue here were constructively part of the record before the Board, the Court will grant the Secretary's motions and allow him to amend the RBA to include the January 2015 and May 2018 VistA Imaging documents.  Furthermore, because those documents are properly part of the RBA, the Court will deny the appellant's motion to strike portions of the Secretary's brief referencing those records. To the extent the appellant argues that the Court may not review these records in the first instance, those arguments pertain to the merits of the appeal and are separate considerations from what must be included in the RBA.”

This decision affirms that documents referenced by other documents should be part of the RBA and should lead a careful advocate to look for these documents.

Decision by Judges Pietsch, Meredith, and Falvey.

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