Kisor: To be "relevant," under 38 C.F.R. § 3.156(c)(1), a record must relate to a disputed issue

Kisor v. Wilkie, docket no. 2016-1929 (Fed. Cir. August 12, 2020)

HELD: “[I]n the context of § 3.156(c), the term ‘relevant’ has only ‘one reasonable meaning’ … [and] under the regulation, in order to be ‘relevant’ a record must speak to a matter in issue, in other words, a matter in dispute.” 

SUMMARY: Mr. Kisor filed an initial claim for service connection for PTSD in 1982 and submitted a supporting medical opinion from his Vet Center counselor. VA obtained a negative medical opinion in which the examiner noted the veteran’s participation in “Operation Harvest Moon” in Vietnam, but determined that he did not have PTSD. Because there was no PTSD diagnosis, the RO denied the claim. In 2006, Mr. Kisor submitted a request to reopen and submitted new service records showing his receipt of the Combat Action Ribbon and documenting his participation in Operation Harvest Moon. The RO obtained a favorable medical opinion and granted service connection for PTSD, effective 2006. He appealed for an earlier effective date, which the Board denied, under 38 C.F.R. § 3.156(c), finding that the newly received service records were not “outcome determinative” because they did not relate to the relevant issue of the lack of a PTSD diagnosis.

Mr. Kisor appealed to the CAVC, the Federal Circuit, and the Supreme Court. In the Federal Circuit’s first decision, it found that the term “relevant” in the regulation was ambiguous and deferred to the agency’s reasonable interpretation, which was the Board’s interpretation that required the record to be “outcome determinative.” The Supreme Court held that the Federal Circuit was “too quick to extend Auer [v. Robbins, 519 U.S. 452 (1997)] deference to the Board’s interpretation of ‘relevant’ as it appears in § 3.156(c)(1)” and remanded the appeal back to the Federal Circuit to “decide whether Auer deference ‘applies to the agency interpretation at issue’” and “‘whether the regulation really has more than one reasonable meaning.’” 

On remand, the same three-member panel of the Federal Circuit now determined that the term “relevant” in § 3.156(c)(1) “has only ‘one reasonable meaning,’ the meaning the Board attributed to it.” The Court first found that the term “relevant” in the regulation was “not genuinely ambiguous” – and agreed with the Secretary that “the term has only one reasonable meaning.” The Court held: “To be relevant, a record must address a dispositive issue and therefore affect the outcome of the case.” Because the reason for the prior denial was the lack of a PTSD diagnosis and the new service did not address that issue, the Court determined that they were not “relevant” under § 3.156(c)(1). 

In a thorough and thoughtful dissent, Judge Reyna outlined a strong argument for Mr. Kisor to deploy in appealing this decision. Specifically, Judge Reyna noted that there is nothing in the regulation that requires “relevant” records to “speak to the basis for the VA’s prior decision” or to “affect the outcome.” Rather, in the context of veterans’ benefits, records are relevant if they “help to establish unestablished facts that are necessary for substantiating the veteran’s claim.” 

Judge Reyna pointed out that the initial VA examiner who provided the negative medical opinion described Mr. Kisor’s combat experiences “with palpable skepticism” – something that the majority failed to address. This is particularly relevant to claims for service connection for PTSD because that diagnosis relies on the establishment of a stressor event or events. 

Judge Reyna argued that “when a veterans’ benefit provision is ambiguous on its face, the pro-veteran canon must be weighed alongside the other traditional tools in resolving interpretive doubt.” He stated that “while we have held that the pro-veteran canon applies only to ambiguous statutes and cannot override plain text, that rule does not render the canon a tool of last resort, subordinate to all others.” He added: “The majority wrongly assumes that the Supreme Court’s ‘genuine ambiguity’ criterion for Auer deference applies to the pro-veteran canon” and that if “we can set aside the pro-veteran canon unless and until all other considerations are tied, then the canon is dead because there is no such ‘equipoise’ in legal arguments.”

Kisor: 38 C.F.R. § 3.156(c), EARLIER EFFECTIVE DATE

Kisor v. Shulkin, 869 F.3d 1360 (Fed. Cir. Sept. 7, 2017)

HELD: When newly received service records do not “remedy the defects” of a prior claim, those records are not “‘relevant’ for purposes of § 3.156(c)” and thus will not warrant an earlier effective date.

SUMMARY: Mr. Kisor was a Vietnam combat veteran. In 1982, he filed a claim for service connection for PTSD. His Vet Center therapist submitted a letter with a diagnosis of PTSD. However, a 1983 VA (C&P) psychiatrist diagnosed a personality disorder. The RO denied the claim due to the lack of a PTSD diagnosis. Mr. Kisor did not appeal this decision and it became final.

In 2006, he filed a request to reopen his previously denied claim. He subsequently submitted a psychiatric evaluation showing a diagnosis of PTSD. He also submitted service records showing his combat history. The RO obtained an opinion from a VA examiner who confirmed the diagnosis of PTSD. The RO then made a Formal Finding of Information Required to Document the Claimed Stressor and verified his combat service. The RO granted service connection for PTSD, rated 50%, effective June 5, 2006, the date it received his request to reopen. The grant was based on the PTSD diagnosis and the Formal Finding of Information.

Mr. Kisor appealed for a higher rating and an earlier effective date. The RO granted a higher rating, but denied an earlier effective date.

Mr. Kisor appealed to the Board, arguing that there was clear and unmistakable error (CUE) in the 1983 RO decision. The Board rejected his arguments, but identified an alternative argument for an earlier effective date – via 38 C.F.R. § 3.156(c), which requires the VA to reconsider a veteran’s claim when relevant service department records are newly associated with the veteran’s claims file, whether or not they are ‘new and material’ under § 3.156(a).” (quoting Blubaugh v. McDonald, 773 F.3d 1310, 1313 (Fed. Cir. 2014)). The Board considered whether the new evidence warranted reconsideration of his claim such that he would be entitled to a 1982 effective date. The Board determined that the new records were not “relevant” for purposes of § 3.156(c) because the 1983 decision denied service connection due to a lack of a PTSD diagnosis – and there was no dispute as to his combat status or in-service stressor.  

Mr. Kisor appealed to the CAVC, arguing that the Board failed to apply § 3.156(c). The Court rejected this argument, noting that the newly submitted service records did not contain a diagnosis of PTSD – and that the lack of such diagnosis was the basis for the 1983 denial. The Court found no error in the Board’s application of § 3.156(c).

Mr. Kisor appealed to the Federal Circuit, arguing that the Veterans Court misinterpreted § 3.156(c)(1). He argued for a broad interpretation of the word “relevant” based on the Federal Rules of Evidence, which would find a service record “relevant” if it has “any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.”

The Secretary argued for a narrower interpretation of “relevant” that “depends upon the particular claim and the other evidence of record.” The Secretary stated that Mr. Kisor’s newly submitted service records only relate to the existence of an in-service stressor – not to a diagnosis of PTSD – and that the “issue of an in-service stressor was never disputed in the 1983 claim.” The Secretary stated that neither the Board nor the Veterans Court “required that the evidence relate to the basis for the prior denial in all cases.” However, in Mr. Kisor’s case, the evidence relating to the in-service stressor “could not be relevant without a medical diagnosis for PTSD at the time of the previous claim.”

The Federal Circuit first determined that the term “relevant” in 38 C.F.R. § 3.156(c)(1) was ambiguous, and found that the Board’s interpretation was not “plainly erroneous or inconsistent with VA’s regulatory framework.” The Court found that the newly submitted service records were “superfluous” and determined that since they “did not remedy the defect of his 1982 claim and contained facts that were never in question,” there was no error in the Board’s conclusion that they were not “relevant” for purposes of § 3.156(c)(1).

In response to Mr. Kisor’s argument that the Veterans Court construed § 3.156(c)(1) too narrowly, the Federal Circuit held that their interpretation did not require “that relevant records must relate to the basis of a prior denial,” but rather that “on the facts and record of this case, Mr. Kisor’s later-submitted materials were not relevant to [the] determination of his claim.” The Court thus affirmed the CAVC’s decision.

FULL DECISION

Snyder: DISPUTED ATTORNEY FEE RECOVERABLE AFTER VETERAN'S DEATH

Snyder v. Sec’y of VA, 858 F.3d 1410 (Fed. Cir. June 8, 2017)

HELD: A veteran’s surviving spouse can seek to recover a disputed attorney fee after the veteran’s death pursuant to 38 U.S.C. § 5121.

SUMMARY: Attorney Keith Snyder began representing veteran Larry Beck pursuant to a February 2001 fee agreement that called for the payment of 20% of any past-due benefits awarded. Less than a year after entering into the agreement, Attorney Snyder asked the Board of Veterans’ Appeals to revoke his representation, stating that “irreconcilable differences” made his “continued representation of Mr. Beck . . . not possible,” and asked the Board to cancel his fee agreement immediately.

Two years later, VA granted the veteran’s appeal, and awarded past-due benefits at the 100% disability rate, retroactive to June 1992. Despite the fact that Attorney Snyder had terminated representation two years earlier, he still sought attorney fees pursuant to the fee agreement. He presented a copy of that fee agreement to the VA Regional Office (RO), which determined that he was entitled to an attorney fee of over $41,000 and withheld that fee from the past-due benefits award.

The veteran appealed this decision and sought to recover the withheld attorney fee. In November 2005, the Board remanded this matter back to the RO to readjudicate the issue of whether Mr. Snyder was entitled to the attorney fee. In December 2006, while the appeal was still pending, Mr. Beck passed away.

His widow filed an accrued benefits claim, seeking to recover the disputed fee. The RO denied the accrued benefits claim, and Mrs. Beck appealed to the Board. In 2008, the Board dismissed the veteran’s appeal pursuant to 38 C.F.R. § 20.1302 (extinguishing appeal upon veteran’s death) and remanded Mrs. Beck’s claim back to the RO.

The RO again determined that Mrs. Beck “could not recover the disputed attorney fee because her husband’s claim ceased to exist upon his death.” Mrs. Beck again appealed this decision, and the Board requested a VA General Counsel precedent opinion.

In December 2015, VA’s Office of the General Counsel issued an opinion, stating:

A claim, pending at the time of a veteran’s death, challenging an attorney’s entitlement to payment of attorney fees . . . may provide a basis for an accrued benefits claim under [38 U.S.C. §] 5121, because such a claim concerns entitlement to periodic monetary benefits allegedly due and unpaid to the veteran at the time of death.

While this appeal was pending at the Board, Attorney Snyder petitioned the Federal Circuit to review the General Counsel Precedent Opinion pursuant to 38 U.S.C. § 502, which authorizes the Federal Circuit to review agency actions that must be published in the Federal Register and VA’s rulemaking under the Administrative Procedures Act (APA), unless “such review is sought in connection with an appeal” to the Board. If that is the case, then the laws under chapter 72 – relating to Board appeals – apply.

The Secretary argued that the Federal Circuit lacked jurisdiction over this petition “because Mr. Snyder seeks review of VA action in connection with his case before the Board.” The Secretary also argued that the Federal Circuit lacked jurisdiction to review General Counsel Precedent Opinions issued in response to a Board request.

The Court rejected both arguments – yet denied the petition.

The Federal Circuit first noted that General Counsel Precedent Opinions must be published in the Federal Register and are binding on the Board. The fact that this opinion was issued in response to a Board request did not change the Court’s conclusion, since there is nothing in the relevant statute that limits the Court’s “review to only some precedential General Counsel opinions.” The only limitation would be “if Mr. Snyder sought review of the opinion in connection with his appeal.” However, the Court determined that Mr. Snyder sought review under 38 U.S.C. § 502, which applies to the General Counsel Precedent Opinion.

The Secretary argued that this position would be inconsistent with the Federal Circuit’s holding in Paralyzed Veterans of Am. v. Sec’y of Veterans Affairs, 308 F.3d 1262 (Fed. Cir. 2002). The Court rejected this argument, citing an earlier case, Splane v. West, 216 F.3d 1058 (Fed. Cir. 2000), which held that the Court had jurisdiction to review precedential opinions issued in response to a Board request. The Court stated that “[w]hen two cases decided by our court are in apparent conflict, we adopt the first in time and follow it.”

Turning its review to the General Counsel Precedent Opinion, the Court determined that it would have reached the same conclusion as the General Counsel. The Court explained that 38 U.S.C. § 5904 “provides for the payment of attorney fees from ‘past-due benefits awarded on the basis of the claim’ in which the attorney represented the veteran” and which are deducted from veteran’s past-due benefits award. Section 5121 “provides for the recovery of ‘[p]eriodic monetary benefits … due and unpaid’ at the time of a veteran’s death based on ‘existing ratings or decisions or those based on evidence in the file at date of death.’” Because attorney fees are deducted from a past-due benefits award, a dispute over such fees constitutes a dispute over the award. An accrued benefits claimant can seek to recover those fees because her clam is one “of entitlement to periodic monetary benefits allegedly due and unpaid to the veteran.” The fact that 38 C.F.R. § 20.1302 requires an appeal to be dismissed upon a veteran’s death is irrelevant to a claim for accrued benefits.

The Court upheld the General Counsel Precedent Opinion, stating: “If the evidence on file at the date of the veteran’s death shows entitlement to due and unpaid periodic monetary benefits, an accrued benefits claimant can pursue those benefits under § 5121.”

FULL DECISION

EQUITABLE TOLLING

Aldridge v. McDonald, docket no. 2015-7115 (Fed. Cir. Sept. 9, 2016)

HELD: Equitable tolling is not warranted when veteran failed to demonstrate how the multiple deaths in his family “directly or indirectly affected the timely filing of his appeal.” 

SUMMARY: In December 2013, the Board of Veterans’ Appeals denied Mr. Aldridge’s claims for increased ratings for his service-connected knee conditions. He had until April 23, 2014 to submit a Notice of Appeal to the U.S. Court of Appeals for Veterans Claims. He did not file his appeal until October 27, 2014 – more than six months past the deadline.

He asked the Court to equitably toll the deadline, explaining that there were multiple deaths in his family and that the “resulting depressive state had prevented him from timely filing his notice of appeal.” The CAVC denied his request, finding that he “had failed to demonstrate how the deaths of his mother and sister and stillborn birth of his grandchild ‘themselves directly or indirectly affected the timely filing of his appeal.’” The Court based this determination on the findings that during the relevant period, he had closed the estates of his deceased mother and sister, became his father’s primary caregiver, continued to work as a desk clerk at a VA hospital, and attempted to hire a law firm to represent him. Because of this, the Court was “unconvinced” that his depression “directly or indirectly prevented his appeal from being timely filed.”

The Federal Circuit, sadly, agreed. Mr. Aldridge argued that the CAVC applied a legal standard that was inconsistent with Holland v. Florida, 560 U.S. 631 (2010), a decision in which the Supreme Court determined that equitable tolling is appropriate when an appellant demonstrates “(1) that he has been pursuing his rights diligently, and (2) that some extraordinary circumstance stood in his way.” Mr. Aldridge argued that the CAVC’s “causation analysis” placed a heavier burden on the veteran than what was intended by the Supreme Court in Holland. He asserted that the legal standard in Holland – a showing that “some extraordinary circumstances stood in [the] way and prevented timely filing” – “focuses on whether the extraordinary circumstances created a roadblock to timely filing as opposed to a metaphorical chain of causation that links events through time.”

The Federal Circuit agreed with the CAVC and determined that the requirement “that an appellant demonstrate that ‘some extraordinary circumstance stood in his way’ and prevented timely filing . . . necessarily carries with it an element of causation.” The Court noted that the Supreme Court recently reaffirmed this aspect of Holland, when it stated that “the second prong of the equitable tolling test is met only where the circumstances that caused a litigant’s delay are both extraordinary and beyond its control.” The Federal Circuit held that the CAVC “did not apply an incorrect legal standard when it determined that Mr. Aldridge had failed to demonstrate that the deaths in his family ‘themselves directly or indirectly affected the timely filing of his appeal.’”

In a passionate dissent, Judge Newman stated: “This case puts judicial humanity to the test; the Federal Circuit and the Court of Appeals for Veterans Claims fail the test.” This dissent is powerful – and useful for its language regarding equity and the unfortunately adversarial nature of what is supposed to be a solicitous veterans’ benefits scheme.  

This court has been assigned the responsibility for assuring that the legislative purpose of establishing a veteran-friendly regime is implemented. This case should never have come this far. On the undisputed circumstances that existed in this veteran’s family, the VA could readily have allowed the tardy appeal from the BVA to the Veterans Court. Instead, we see the government in uncompromising litigation to prevent this veteran from appealing the BVA decision on his percentage disability, straining precedent to its equivocal limits. What happened to the recognition that “the veterans benefit system is designed to award ‘entitlements to a special class of citizens, those who risked harm to serve and defend their country. This entire scheme is imbued with special beneficence from a grateful sovereign.’”

Dissent at *5. 

FULL DECISION

FED CIRCUIT DECLINES TO REVIEW PRESUMPTION OF COMPETENCY OF VA EXAMINERS

Mathis v. McDonald, docket no. 2015-7094 (Fed. Cir. Aug. 19, 2016)

HELD: The Federal Circuit denied the veteran’s petition for en banc rehearing of its prior (non-precedential) decision that declined to disavow the presumption of competence afforded to VA examiners. 

In a single-judge memorandum decision, the CAVC rejected the appellant’s arguments regarding the competency of the VA examiner who had provided a negative medical nexus opinion. See Mathis v. McDonald, docket no. 13-3410 (J. Lance, May 21, 2015) (Mathis I). The CAVC held that while the presumption of competency is rebuttable, the first step in doing so is to challenge the examiner’s competency. Because the veteran did not challenge the competency of the examiner at the Board or RO levels, the Court found that he had not met his burden to rebut the presumption. Id.

The veteran appealed to the Federal Circuit, arguing that the Court should “disavow the presumption of competency as it applies to VA medical examiners,” asserting that “VA’s procedure for selecting qualified examiners is inherently unreliable because the VA broadly recommends assigning generalists except in unusual, ill-defined cases.” See Mathis v. McDonald, docket no. 2015-7094 (Apr. 1, 2016) (Mathis II). The Court, somewhat reluctantly, declined to reassess the presumption of competency, although it did discuss the line of relevant cases (Rizzo v. Shinseki, 580 F.3d 1288 (Fed. Cir. 2009); Bastien v. Shinseki, 599 F.3d 1301 (Fed. Cir. 2010); Sickels v. Shinseki, 643 F.3d 1362 (Fed. Cir. 2011); and Parks v. Shinseki, 716 F.3d 581 (Fed. Cir. 2013)), and noted that the appellant’s argument “presents some legitimate concerns.” Nevertheless, the Court found that it lacked “jurisdiction to make factual findings on appeal regarding the competency” of the VA examiner and “are bound by clear precedent to presume” the examiner’s competency.

In a separate opinion, one of the Federal Circuit judges concluded that “the entire court should review the case law concerning the presumption of competence with the objective of eliminating it.” The judge based his conclusion on VA’s general practice of not providing evidence of an examiner’s qualifications; the appearance that the presumption renders the competency of a VA examiner “unreviewable”; the due process problem in requiring a veteran to challenge an examiner’s qualifications; VA’s “unknown” process in selecting examiners; and, most troubling, VA’s actions since the presumption has been applied. Specifically, since the presumption has been applied, VA has emphasized the use of non-specialists. VA has eliminated the requirement that reports be signed by a physician – now only requiring the signature of a “health care provider.” This judge also highlighted the recent evidence of the “irregularity” in VA’s process for selecting examiners as shown in the controversy surrounding TBI examinations being conducted by unqualified examiners.

Despite this well-crafted opinion, the Federal Circuit declined to rehear this appeal en banc. However, while the order declining en-banc review was only two pages long, the opinion includes an additional 29 pages of separate concurring and dissenting opinions questioning the ongoing validity of applying the presumption of administrative regularity in this context.

Advocacy note: The burden is still on the veteran to challenge the adequacy of an examination and/or the qualifications of the examiner. If the veteran feels that the examination was not adequate and/or the examiner was not qualified to be conducting the examination, the veteran must notify VA of these concerns in writing. 

FULL DECISION