Williams: How Long Do You Have to Change Board Appeal Lanes?

Williams v. McDonough, Case Number 21-7363, decided June 21, 2024 involves the question of what happens when the Board decides an appeal prior to the expiration of time to change the appeal lane.

The question was whether the Board erred by deciding his case before his deadline to modify his choice of Board appeal lane under 38 C.F.R. § 20.202(c)(2). 

The veteran filed a NOD and selected the direct review docket.  The VA notified him it had received the NOD and then “[t]racking the text of § 20.202, this notice told Mr. Williams that he could not submit more evidence, but if wished to switch dockets, he could file a request within 60 days of the date that the Board received his NOD, "or within one year of the VA decision being appealed, whichever date is later," and that he could request an extension of time to submit such a "docket switch request."”  Id. at *2.

Importantly, “Despite what the letter said, VA didn't give Mr. Williams the promised time to change his NOD and switch dockets. Instead, on July 16, 2021, the Board issued the decision on appeal denying a rating higher than 10%. This was less than 60 days from when the Board received his NOD and far short of a year since the December 2020 AOJ decision.”  Id. at *2-3.

The veteran argued “that the time to switch lanes in § 20.202(c)(2) is illusory if the Board can issue a decision within 60 days of NOD submission. To make the case that the Board's error prejudiced him, Mr. Williams tells us that he would have modified his NOD (electing the submission of additional evidence lane) and submitted evidence— some of which is already in the record but post-dates the AOJ decision.”  Id. at *3.

The Court concluded: “we agree with Mr. Williams that the Board cannot issue a decision until the time to modify an NOD under § 20.202(c)(2) has run.”  Id. at *6.

The Court then considered the issue of harmless error and specifically the VA’s point that the veteran could always just submit additional evidence in a supplemental claim and explained: “In simple terms, with a supplemental claim, you can't just submit any evidence to have VA consider the merits of your claim; the evidence has to be new and relevant….  This means that a claimant has an easier time getting VA merits review of the claim based on evidence submitted through one of the Board lanes than through the supplemental claim option. This also means that we must reject the Secretary's argument that the option of a supplemental claim means the Board's failure to give Mr. Williams a chance to submit evidence is harmless.”  Id. at *8.

This is an interesting case.  Frankly, the court is right in focusing on the fact that supplemental claim requires new and relevant evidence and that the VA should wait until the 60 days or one year after a NOD filing is up before a decision, but I can’t wonder about the negative impacts of these and how they might just lead to further delays.

Decision by Judge Falvey and joined by Judge Jaquith and Senior Judge Greene.

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Frantzis: Board Hearing Before the Person to Decide the Case

Frantzis v. McDonough, Case Number 2022-2210, was decided on June 4, 2024 and concerns whether under the AMA a veteran is entitled to a Board hearing before the Board member who will ultimately decide their appeal.

This was an appeal from a panel decision by the Veterans Court which had answered in the negative that noted there was a requirement in the Legacy Appeals system for the Board member who conducted the hearing to decide the case whereas there is nosuch requirement in the AMA.  Judge Jaquith wrote a dissent saying fair process requires the Board member who held a hearing to decide the case because it allows them to properly access the credibility of the witnesses.

The Federal Circuit affirmed the decision agreeing with the Veterans Court stating: “The statutory scheme and its history are clear—the same judge is not required to both conduct the hearing and author the final determination under the AMA.”  Id. at *6.

As for the due process argument, the Court noted “The fair process doctrine is a recognition that due process applies in the claimant process.  For example, we explained the fair process doctrine requires the Board to “provide a claimant with reasonable notice of [new] evidence . . . and a reasonable opportunity for the claimant to respond to it.”  To the extent Mr. Frantzis argues the fair process doctrine creates a procedural right, the argument was not presented below and is thus forfeited.”  Id. at *6.

Thus, it appears the AMA does not require a hearing before the Board member who will make a decision.  However, the Federal Circuit seemed to at least leave a crack in the door to the fair process doctrine argument, but found the argument was forfeited because it was not presented to the Veterans Court.  I imagine some attorney will look for the right Board decision to make these arguments and fully brief the issue and see how the Veteran Court and Federal Circuit responds.

Decision by Chief Judge Moore and joined in by Judges Clevenger and Chen.

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Greenidge: EAJA Fees and Prevailing Party Status

Greenidge v. McDonough, Opinion Number 20-7820(E), was decided May 31, 2024 by the Veteran Court and concerns attorney fees.

The case concerns when attorney fees can be granted on an appeal.  The Court had held it lacked jurisdiction to award attorney fees and expenses pursuant to the Equal Access to Justice Act (EAJA) after it had set aside a Board decision for lack of jurisdiction.  That decision was appealed to the Federal Circuit which led to a remand for the Veterans Court to reconsider in light of Halpern v. Principi II, which had held the authority to award EAJA fees was tied to the exercise of appellate jurisdiction and not contingent upon whether the Board properly exercised its own jurisdiction in the underlying decision.

On reconsideration, the Veterans Court concluded its prior decision was error and the Corut possessed jurisdiction to entertain the challenge to the Board’s exercise of its jurisdiction and thus had authority to consider the EAJA application.  However, the Court found the veteran was not a prevailing party and thus denied the application.

Factually, the veteran was granted a 10% PTSD rating in 1993 which was not appealed.  Subsequently, he filed a CUE motion and the RO denied the motion.  Before the veteran could file a NOD, the Board adjudicated the CUE motion on its own volition and denied revision of the underlying decision.  The veteran ultimately filed a NOD, after the Board issued a decision on the matter.  Before the NOD was filed, the veteran also appealed the Board’s decision to the Veterans Court.  The parties agreed the Board lacked jurisdiction to adjudicate the CUE motion because a NOD had not yet been filed and thus the Board did not have jurisdiction.  The veteran then sought EAJA fees and was denied.

Initially, it is helpful the Court reaffirmed Halpern II that “our EAJA jurisdiction isn't defeated by a conclusion that the Board issued an unauthorized, or "ultra vires," decision. Rather, when our review is properly invoked to consider whether the Board stayed within its own jurisdictional bounds, we are exercising the "jurisdiction" over a "civil action" that section 2412(d)(1)(A) says is necessary before we are authorized to award EAJA fees and expenses.”  Id. at *4.  In other words, “Taken together, the Federal Circuit's decisions in Hudson and Halpern II make clear that the "jurisdiction" required by section 2412(d)(1)(A) before an EAJA application can be considered is not confined to the Court's jurisdiction over the merits of a Board decision but encompasses the Court's jurisdiction to assess the propriety of the Board's exercise of jurisdiction.”  Id. at *9.

Then, the Court pivoted to prevailing party status and denied EAJA fees on that basis.  The Court determined: “he most immediate obstacle for the veteran is that there was no remand to the Board in this case; instead, the Court simply vacated the Board decision and dismissed the appeal. Indeed, the whole basis of the veteran's appeal was that the Board reached out and prematurely adjudicated the CUE motion before he had decided to file an NOD and invoke the Board's jurisdiction. Since there was no matter properly before the Board at the time it rendered its decision, there was nothing for the Court to remand….  More importantly, the absence of a remand order here means perforce that there was "no remand order clearly call[ing] for further agency proceedings." Blue, 30 Vet.App. at 67. That is a critical consideration in this case. In the Halpern litigation, the Federal Circuit ultimately concluded that this Court's disposition of the appeal—vacating the Board decision (for lack of original jurisdiction to determine an attorney's eligibility for a contingent fee award) and remanding the case to the Board with instructions to dismiss—did not confer prevailing party status.”  Id. at *10.

Judge Jaquith dissented on the prevailing party issue.  He roots his idea of a prevailing party in the actual definition of “prevail” and the facts at hand.  He explained: “Prevail is precisely what the veteran did in his underlying case, in which he appealed the Board's October 2022 decision prematurely denying his CUE motion—which was not yet before the Board—the Secretary agreed that the Board had erred, and the Court vacated the Board's decision and dismissed the appeal so the veteran's later appeal of the regional office's denial of his CUE motion could move forward.”  Id. at *12.  He argued the requirement of a remand is misplaced and that instead stated in the context of a CUE motion, “vacating an improper decision is a pivotal prevailment because denial of a CUE motion may foreclose any further attempt at revision.”  Id. at *15.

I would expect this case to again go to the Federal Circuit as Judge Jaquith’s explanation of a prevailing party is persuasive.

Opinion by Judge Toth and Greenberg with a dissent by Judge Jaquith.

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Ferko: An Untimely NOD and 38 CFR 3.109(b)

Ferko v. McDonough, Case Number 21-3467, decided May 28, 2024 concerns whether a NOD was timely.

Typically a NOD must be submitted within one year from the date of mailing of notice of the decision.  The veteran missed the date by 2 weeks after he had had emergency open heart surgery.  At the time he requested an extension based on good cause citing his surgery.

The VA determined the NOD was untimely but never addressed the extension request.  It then found it did not have jurisdiction.

The Court determined:

“The one-year deadline in section 7105(b) to file an NOD in the legacy system is not a jurisdictional bar to Board review. It is an important and mandatory claim-processing rule, but it does not deprive the Board of the authority to consider the merits of an appeal simply because the NOD is received late. As a nonjurisdictional claim processing rule, section 7105(b)'s one-year period is amenable to an appropriate exception. Indeed, this is exactly what a current VA regulation allows, as our caselaw has long held that 38 C.F.R. § 3.109(b) applies to NODs. That regulation permits extensions to VA's internal deadlines for good cause. It is under this governing regulatory standard that the Board should have considered and adjudicated Mr. Ferko's extension request. But despite the lengthy passage of time, VA has still not issued a decision evincing a proper understanding of § 3.109(b)'s role in permitting it to accept the veteran's untimely NOD.”

Id. at *2. 

Critically, the Court found 38 CFR Section 3.109(b) applies to NODs and states:

“Extension of time limit. Time limits within which claimants or beneficiaries are required to act to perfect a claim or challenge an adverse VA decision may be extended for good cause shown. Where an extension is requested after expiration of a time limit, the action required of the claimant or beneficiary must be taken concurrent with or prior to the filing of a request for extension of the time limit, and good cause must be shown as to why the required action could not have been taken during the original time period and could not have been taken sooner than it was. Denials of time limit extensions are separately appealable issues.”

Thus, the Court sidestepped the issue of equitable tolling and simply relied on Section 3.109.

A concurrence also wrote: “The evidence makes a viable case for reversal: Mr. Ferko submitted treatment notes attesting to his open-heart surgery and convalescence that seem sufficient to excuse a 12-day delay in filing his NOD.  Let's face it, if open-heart surgery is not good cause, it's hard to imagine what is. That said, the Board looked at the case through the lens of equitable tolling. R. at 9. It did not grapple with this question as it is framed by the requirements of the regulation. See 38 C.F.R. § 3.109(b) (requiring the claimant to show good cause "as to why the required action could not have been taken during the original time period and could not have been taken sooner than it was"). Stinson and Tadlock counsel that it would be impermissible factfinding for this Court to conclude that Mr. Ferko met the good cause requirement of § 3.109(b). Therefore, mindful of limiting precedent, this case returns to the Board for it to consider the matter of good cause under § 3.109(b).”  Id. at *11.

Another concurrence wrote that it would have decided the case on the basis of equitable tolling because the veteran specifically disclaimed the statutory argument and instead sought to rely on equitable tolling.

This was a full panel decision with the opinion by Judge Toth and several concurring opinions. 

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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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