ONLY DoD CAN REVISE EFFECTIVE DATES FOR EDUCATION BENEFITS

Garza v. McDonald, docket no. 14-2711 (Aug. 11, 2016)

HELD: Under 38 C.F.R. 21.9625(j), the effective date for the transfer of education benefits from a veteran to an eligible dependent “may not be earlier than the later of either the date the Secretary of the service department concerned approved the transfer or the date the transferor specified in his or her designation.” 

SUMMARY: The appellant in this case is the adult son of the veteran. Mr. Garza attended ITT Technical Institute and was notified April 2010 of a $15,000 tuition payment. On April 16, 2010, the veteran, who was deployed at the time, submitted an online application to transfer his education benefits to Mr. Garza.

The Department of Defense (DoD) subsequently notified the veteran that the service department had approved the transfer of five months of benefits to his son, effective April 16, 2010, the date of his online application.

In October 2010, Mr. Garza’s mother asked VA to backdate the application for benefits to August 1, 2009. She explained that they would have applied for benefits earlier, but ITT did not inform her son until April 2010 that “no financing had been done . . . dating back to August 2009.” She stated that had she known earlier, they would have applied earlier.

The RO then notified Mr. Garza that he had five months of educational benefits, starting April 16, 2010. In a subsequent letter, the RO stated that “DoD makes this determination not the VA.” Mr. Garza submitted a Notice of Disagreement for an August 2009 effective date. The RO issued a Statement of the Case, stating that benefits could not be paid prior to the April 16, 2010 eligibility date and that the “veteran should contact DoD directly for possible resolution.”

Mr. Garza appealed to the Board, arguing that his benefits should go back to August 1, 2009 because “ITT erred in handling his financing.” The Board denied the appeal, finding that “DoD approves the transfer of entitlement to educational assistance” and that “VA has no authority to revise such a DoD determination.”

The Court reviewed the relevant statutes and regulations, specifically 38 U.S.C. § 3319 and 38 C.F.R. §§ 21.9500-9770. The Court found that 38 U.S.C. § 3319(a)(1) authorizes the Secretary of the relevant service department to approve the transfer of educational assistance benefits to eligible dependents, but the statute was “silent as to whether DoD or VA assigns the eligibility dates.” Because of this “gap” in the statute, the Court looked to the relevant regulations.

The Court recognized that 38 C.F.R. § 21.9570(d)(2) “states that VA will accept the transferor’s designations” and that § 21.9570(g) allows “a transferor to modify the designations . . . ‘at any time’” by submitting written notice to both VA and DoD. However, the Court found that these subsections “must be read in light of § 21.9625(j), which provides that the beginning date of an award for educational assistance to an eligible child will be no later than the latest of either the date the DoD approves the transferor to transfer entitlement or the date the transferor specified.” In this case, the Court found that both of these dates were April 16, 2010. The Court concluded that, “as a matter of law, Mr. Garza’s beginning eligibility date cannot be earlier than April 16, 2010.”

The Court found that this interpretation was further supported by the regulatory history. The Court rejected Mr. Garza’s argument that the Board erred by not addressing 38 C.F.R. § 21.9570(g), regarding written requests for modification – because “this regulation speaks only of the transferor’s rights to modification and . . . nothing in the record shows that the veteran (the transferor) submitted any modification.”

The Court stated that while it was sympathetic to Mr. Garza’s frustrations with ITT for not informing him of his financial status earlier, it could not grant the “equitable relief” that he sought.

Advocacy note: While the Court cannot grant “equitable” relief, VA can. And VA may have granted such relief in this case had the veteran – Mr. Garza’s father – submitted a written request for modification under 38 C.F.R. § 21.9570(g).  

FULL DECISION

38 C.F.R. § 3.156(c)(1) REQUIRES RECONSIDERATION EVEN IF VA HAS ALREADY GRANTED SERVICE CONNECTION

Emerson v. McDonald, docket no. 14-2968 (August 10, 2016)

HELD: Even if a veteran is granted service connection on the basis of a liberalizing regulation, 38 C.F.R. § 3.156(c)(1) still requires VA to reconsider the veteran’s initial claim on the basis of its receipt of newly associated service records. 

SUMMARY: The veteran was denied service connection for PTSD in 2003 based on the lack of a verified stressor. In July 2010, VA amended 38 C.F.R. § 3.304(f) “to eliminate the requirement for corroborative evidence of a stressor where a VA mental health expert has diagnosed PTSD and the stressor is related to the veteran’s fear of hostile military or terrorist activity.” The following month, Mr. Emerson requested to reopen his claim. A VA Compensation and Pension (C&P) examiner noted his reports of combat as a helicopter door gunner. In June 2011, the Regional Office (RO) awarded service connection for PTSD, noting the change in 38 C.F.R. § 3.304(f). The RO assigned a 30% rating, effective August 2010, the date of his request to reopen.

Mr. Emerson appealed the evaluation and the effective date. In 2012, he underwent another C&P examination, and the RO subsequently continued the 30% rating and denied an earlier effective date. In July 2012, he testified at a Board hearing and his then-attorney explicitly raised the issue of the applicability of 38 C.F.R. § 3.156(c) for an earlier effective date. Later that month, Mr. Emerson’s attorney submitted additional argument to the Board regarding § 3.156(c), along with service department records listing “the date and duration of completed helicopter missions, with the letter ‘C’ written next to each ‘Mission Type.’” He also submitted an Army Form 20, listing assignments and campaigns, that included the Tet Counter Offensive.

The Board granted a 50% disability rating, but denied the earlier effective date. The Board did not address the applicability of 38 C.F.R. § 3.156(c).

The CAVC first noted that the applicability of § 3.156(c) was expressly raised, and that the Board was required to address it, citing Robinson v. Peake, 21 Vet.App. 545, 552 (2008, aff’d sub nom. Robinson v. Shinseki, 557 F.3d 1355, 1361 (Fed. Cir. 2009) and Brannon v. West, 12 Vet.App. 32, 35 (1998). The Court next examined the language of § 3.156(c), stating that even though the Board failed to address its applicability, the issue was raised below and the Court has the authority to consider this legal question in the first instance, citing Butts v. Brown, 5 Vet.App. 532, 539 (1993) and Blubaugh v. McDonald, 773 F.3d 1310, 1312 (Fed. Cir. 2014).

The Court noted that while Mr. Emerson was seeking an earlier effective date under 38 C.F.R. § 3.156(c)(3), the issue in this appeal was whether he was entitled to reconsideration under § 3.156(c)(1), which “requires the VA to reconsider only the merits of a veteran’s claim whenever it associates a relevant service department record with his [or her] claims file.” The Court determined that the regulation “requires that official service department records received or associated with the claims file (1) be relevant to the claim, (2) have been in existence when VA first decided the claim, and (3) not have been associated with the claims file when VA first decided the claim” – and that if those requirements are met, the plain language of § 3.156(c)(1) “mandates that ‘VA will reconsider the claim.’”

The Court rejected the Secretary’s argument that § 3.156(c)(1) did not apply since Mr. Emerson had already been awarded service connection when the new service department records were submitted to VA, stating that “nothing in the plain language of (c)(1) states that, for the provision to be applicable, the claim at issue must have been denied immediately prior to the submission of official service department records.” The Court further rejected the Secretary’s argument that § 3.156(c)(1) must be read in context with § 3.156(a), noting that paragraph (c)(1) “begins and ends with two ‘nullifying clauses’” (i.e., “notwithstanding any other section of this part” and “notwithstanding paragraph (a) of this section’). The Court added that the Federal Circuit observed that “§ 3.156(c) requires . . . 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).’”

The Court determined that it would be a “substantial injustice” to Mr. Emerson to hold that § 3.156(c) did not apply to his case just because he was already awarded service connection based on the amendment to § 3.304(f)(3). The Court added “it would be odd if § 3.304(f)(3), whose ‘main goal’ is ‘[i]mprove[d] timeliness, consistent decision-making, and equitable resolution of PTSD claims,’ . . . were to prevent application in this case of § 3.156(c), an otherwise pertinent regulation that is premised on the notion that “a claimant should not be harmed by an administrative deficiency of the government.” (internal citations omitted). The Court thus held that “based on the plain language of § 3.156(c)(1), upon receiving official service department records in 2012, VA was required to ‘reconsider the claim’ for service connection for PTSD that was denied in February 2003, notwithstanding the fact that service connection for PTSD was granted in 2011.”

The Court also considered Mr. Emerson’s arguments regarding the Board’s rationale for denying a disability rating greater than 50%, and agreed that the Board’s statement of reasons or bases was inadequate.

The Court noted the rating criteria for the 50% and 70% ratings, and stated that assessing whether a 70% evaluation is warranted requires (1) the “initial assessment of the symptoms displayed by the veteran, and if they are of the kind enumerated in the regulation, [(2)] an assessment of whether those symptoms result in occupational and social impairment with deficiencies in most areas.” Mr. Emerson pointed out several pieces of favorable evidence that relate to the 70% criteria that the Board did not discuss. Because of this – and because VA was now required to reconsider this claim under § 3.156(c)(1) – the Court agreed that the Board’s rationale for not assigning a 70% disability rating was inadequate. 

FULL DECISION

RIGHT TO REVIEW PAPER RECORDS

Robinson v. McDonald, docket no. 15-0715 (per curiam order) (July 14, 2016)

HELD: VA’s refusal “to allow an appellant’s representative access to the paper source documents is contrary to the requirements under 38 U.S.C. § 7252(b) and Rule 10 [of the Court’s Rules of Practice and Procedure] that the Court’s review be on the record before the Secretary and the Board and that the appellant be permitted to inspect and copy any original material from that record.”

SUMMARY: The issue in this case is “whether the appellant or his representative has a right to review and compare the existing paper source documents with the electronic documents contained in VBMS [the Veterans Benefits Management System] and VVA [Virtual VA] and whether the Secretary is obligated to preserve those paper source documents.

After filing a Notice of Appeal to the Court and receiving a copy of the Record Before the Agency (RBA) from VA, the appellant noticed that several documents were missing. His representative thus filed a motion under Rule 10 of the Court’s Rules of Practice and Procedure, disputing the contents of the RBA. In that motion, he noted that he had asked to examine the original paper claims file.

The Secretary asserted that the records contained in VBMS and VVA “officially comprise [the appellant’s] claims file” and that the RBA “is a true and accurate copy of the documents contained therein.” The Secretary proposed that the parties enter into a joint motion to remand based on a duty-to-assist violation, but the appellant declined.

In response to a Court order to explain his refusal to allow the appellant to view the paper file, the Secretary acknowledged that “some paper source materials may still exist,” but they are not the “claims file and are now considered duplicates or non-records.” The Secretary noted that the scanning of paper documents was handled by a third-party vendor and that the average accuracy rate “exceeds 99 percent.” He added that VA’s scanning, digitizing, and subsequent destruction process “comported with the law” and that VA had “no obligation to produce the paper originals.”

The appellant then filed a motion under Rule 8, “asking the Court to enjoin the Secretary from destroying any original paper documents related to his claims” and to turn over those “non-records” to the appellant. The Court issued a temporary injunction.

In briefing and at oral argument, the appellant argued that Rule 10 required the Secretary to make the paper copies available, and that the Federal Records Act required the Secretary to keep a paper copy after scanning. The Secretary argued that the appellant has “no absolute ‘right’ to inspect or copy these source documents on appeal to this Court,” and that the Federal Records Act and related laws “require VA to dispose of ‘paper duplicates’ in accordance with established procedures, regardless of any pending litigation before this Court.”

The Veterans Court held that “the Secretary’s refusal in this case to allow an appellant’s representative access to the paper source documents is contrary to the requirements under 38 U.S.C. § 7252(b) and Rule 10 that the Court’s review be on the record before the Secretary and the Board and that the appellant be permitted to inspect and copy any original material from that record.”

In reaching this conclusion, the Court pointed to the relevant statutory language stating that “[r]eview in the Court shall be on the record of proceedings before the Secretary and the Board,” which is “mirrored in Rule 10(a) of the Court’s Rules.” The Court noted that even though the Secretary is an adversarial party in Court proceedings, he is “both the adjudicator and records custodian in lower proceedings, tasked with administrating a system ‘that Congress wished to be as informal and nonadversarial as possible.’” The Court emphasized the importance of review based on an accurate record, noting that “a veteran’s entitlement to disability benefits is a property interest protected by the Due Process Clause of the Fifth Amendment.” (citing Cushman v. Shinseki, 576 F.3d 1290 (Fed. Cir. 2009)).

The Court noted that, in this case, the Secretary compiled the RBA exclusively from the electronic file, even though the original records still existed. The Court rejected the Secretary’s argument that he did not have to allow access to the original file since those records were already maintained in electronic form at the time of the Board decision, stating that “Rule 10(a) requires the RBA to include the claims file at the time of the Board decision and any other relevant documents from the record before the Secretary.”

The Court also rejected the Secretary’s argument that he did not have to provide access to the original documents because his digitization of the material complied with the Federal Records Act, as implemented by the National Archives and Record Administration (NARA). The Court found that the Secretary had not even shown how these laws were applicable to the records in this case, adding that the statute cited by the Secretary “governs the ‘admissibility in evidence before the Court’” of digitized records. The Court stated that the appellant was not challenging the admissibility of anything – and that Rule 10 has nothing to do with “admissibility.” The purpose of the rule “is to help ensure that the Court’s review is based on the record of proceedings that was actually before the agency with respect to its prior adjudication of the benefit on appeal, as mandated by section 7252(b).”

The Court further rejected the Secretary’s argument that he is required to destroy the “duplicates” once the paper file has been digitized, noting that the Secretary’s cited authority actually states that “‘VA may destroy’ original materials after conversion to electronic records is ‘verified’ and ‘when no longer needed for legal or audit purposes, or to support the reconstruction of or serve as a backup to the electronic records.”

The Court found that the facts of this case demonstrate the value of Rule 10 – particularly noting that “the very fact that pages are missing from [the appellant’s initial claims form] suggests that it may have been improperly scanned.” Further support is found in the fact that VA medical records from 1992 were not in the file, even though they were cited as having been reviewed in a rating decision that was in the file.

While the Court did not make a determination with respect to VA’s current records management policies were compliant with federal laws, it did hold that “pursuant to Rule 10(d), the appellant is entitled to inspect the paper source documents and compare them with the electronic records.” The Court thus ordered the Secretary to provide the source documents to the appellant within 15 days.

Finally, while the Court did not “resolve any constitutional due process arguments arising from VA’s records management policies,” it did “express concern with the Secretary’s digitization process.” As an example, the Court noted that a 99% accuracy in a 5,000-page claims file “means that 50 pages will either be scanned incorrectly or will not be scanned” – and that some of those pages might include handwritten buddy statements from a now-deceased veteran or old private medical records that cannot be replaced. The Court also noted the “troubling” findings from the VA Office of Inspector General regarding the disorganized and improper handling of veterans’ documents by contractor facilities.

FULL DECISION

THAILAND, AGENT ORANGE

Parseeya-Picchione v. McDonald, docket no. 15-2124 (July 11, 2016)

HELD: Even if the Board determines that a veteran’s testimony is not credible, it must still review the other evidence of record and provide an adequate statement of reasons or bases for rejecting it.

Advocacy note: Evidence relevant to this appeal – and to other Thailand veterans with appeals related to herbicide exposure – includes (1) third-party evidence showing that most flights from the U.S. to Thailand stopped in Vietnam en route to Thailand; (2) VA’s C&P Bulletin stating that “some evidence that the herbicides used on the Thailand base perimeters may have been either tactical, procured from Vietnam, or a commercial variant of much greater strength and with characteristics of tactical herbicides”; and (3) the Project CHECO report, describing the air base locations.

SUMMARY: The veteran in this case served in the U.S. Army from 1966 to 1977, including a deployment to Thailand from January 1968 to January 1970. In Thailand, he was assigned Camp Friendship at Korat Royal Thai Air Base.

In 2005, he filed a claim for service connection for diabetes based on exposure to herbicides. He testified that he was in Vietnam in January 1968 during a layover between Hawaii and Thailand. He also asserted that he was exposed to herbicides when he was stationed at Camp Friendship. VA denied his claim, and he appealed up to the Veterans Court, which remanded the appeal in 2011.

Two months after the Court’s remand, the veteran died, and his wife substituted for him in his appeal. She provided a copy of the Project CHECO report, a declassified Air Force report, which described Camp Friendship as “bordering the perimeter of the Korat Air Force base.” She also provided evidence of flight paths from the U.S. to Thailand, showing that these flights had to make several stops, including in Vietnam. The Board continued to deny benefits, and she appealed to the Court. The Court remanded again because the Board failed to provide any explanation for its determination that the evidence did not show that the veteran was exposed to herbicides.

In May 2015, the Board denied the claim again, finding that the preponderance of the evidence was against the veteran’s assertion that he “had set foot in Vietnam.” The Board rejected the veteran’s statements as inconsistent and rejected the evidence regarding the flight paths because it did not corroborate that the veteran spent time in Vietnam. The Board also noted that while Camp Friendship was located “near the outer edge of [Korat]” it was “not located on the perimeter” of the base, as required by VA policy. The Board added that the veteran’s military occupational specialty (MOS) as “clerk” would not require his presence on or near the perimeter of the base.

The veteran’s widow appealed to the Court again. The Court first determined that there was no error in the Board’s determination that the veteran’s testimony was not credible regarding his layover in Vietnam. However, the Court noted that the Board is required to review and explain its rejection of the other evidence of record.

Specifically, the Court noted that the appellant submitted third-party evidence stating that “it would be the exception [rather] than the rule where a flight [from a base not in Southeast Asia to a base in Thailand] would bypass [Ton Son Nhut Air base in Vietnam, where the veteran’s alleged layover took place].” Also in the record: “An email from James S. Howard, an archivist from the Air Force Historical Research Agency, reports that ‘[a]s a general rule, military cargo aircraft, especially those engaged in “airlines” would stop over at Ton Son Nhut Air Base, Republic of Vietnam en[]route to bases in Thailand. Very few of this sort of flight were made “direct” to bases in Thailand from bases outside Southeast Asia.’” In addition, the record contained a letter from a retired Air Force major, asserting that “[b]ased on my experience, it was common for military aircraft flying to and from airbases in Thailand to land at Ton Son Nhut [Air Base] and other Vietnam airbases.” Id.

The Board had rejected this evidence because it was only “general information” and did not support the claim “that the veteran himself stopped in Vietnam over-night during his trip to Thailand.” The Court found that this was not an adequate statement of reasons or bases because “[t]he Board failed to specifically discuss any of this evidence.”

Advocacy note: I believe this portion of the decision is important because it strengthens the requirement that the Board expressly discuss favorable evidence before rejecting it. I believe this is also important because advocates can now use THIS Court decision to point to evidence of layovers in Vietnam.  

The Court rejected the Board’s reasons or bases for its determination that the veteran was not exposed to herbicides in Thailand because the Board acknowledged that Camp Friendship “was located near the perimeter of Korat,” yet found that “Camp Friendship is not located on the perimeter as contemplated by the M21-1MR.” The Court determined that “[t]his discussion of the two locations conflicts with how both the Project CHECO report and the veteran described the locations.”

Advocacy note: I believe this portion of the decision is important because the Court is forcing the Board to reconcile its inconsistent statements with the Project CHECO report. Advocates can now cite to THIS decision to show that the Court has recognized the validity of the Project CHECO report and that the Board has to explain its determinations that conflict with this report.

Finally, the Court rejected the Board’s determination that “the only tactical herbicides used in Thailand were used four years before the veteran arrived and in a wholly separate location than where the veteran served.” The Court found this determination to be in conflict with the C&P Bulletin that acknowledged that there was “some evidence that the herbicides used on the Thailand base perimeters may have been either tactical, procured from Vietnam, or a commercial variant of much greater strength and with characteristics of tactical herbicides.” The Court found this error prejudicial because “[a] VA finding that the veteran did serve near the perimeter of the base may be significant because the perimeter was the only area where herbicides of a type similar to Agent Orange may have been used.”

Advocacy note: I believe this language is important because it forces the Board to comply with the findings in VA’s C&P Bulletin. Advocates can now cite to THIS decision, in addition to the C&P Bulletin, to support the use of tactical-strength herbicides – as opposed to your garden-variety weed killer – on Thailand base perimeters.

FULL DECISION

RANGE-OF-MOTION TESTING REQUIREMENTS

Correia v. McDonald, docket no. 13-3238 (July 5, 2016)

HELD: “[T]o be adequate, a VA examination of the joints must, wherever possible,[] include the results of the range of motion testing described in the final sentence of § 4.59.” This includes tests for both passive and active motion, in both weight-bearing and non-weight-bearing circumstances, and testing of the opposite, undamaged joint. 

SUMMARY: The veteran in this case appealed the denial of increased ratings for his knees. He argued that the VA examination report on which the Board relied to deny the increased ratings was inadequate because the examiner did not perform all the range-of-motion testing required by 38 C.F.R. § 4.59. To support this argument, the appellant’s attorney submitted two nonprecedential Court decisions showing the Secretary’s position in those cases.

The Secretary first moved to strike the portions of the appellant’s brief that cited to the nonprecedential cases. The Court denied this motion, finding that the decisions were not used for “precedential effect,” but rather to show the factual circumstances and the Secretary’s position in those cases. In a footnote, the Court noted that the rule regarding citation to nonprecedential authority was revised after the Secretary filed his motion, adding that the Court could have taken judicial notice of the Secretary’s contrary positions.

Regarding the regulation, the Secretary argued that it does not establish “a rigid set of protocols” for examinations, and alternatively argued that the regulation was ambiguous and therefore the Court should defer to VA’s interpretation of it.

The Court examined the plain language of the regulation and noted that it describes “ways in which painful motion can be discerned” and “the kind of test results that ‘should’ be obtained to permit an adjudicate to assess the effect of painful motion – range of motion tests for both passive and active motion, and in both weight-bearing and non-weight-bearing circumstances.” (emphasis in original). In addition, the regulation states that, if possible, the same tests should be obtained for the undamaged joint. The Court thus narrowed its analysis here to what the word “should” means.

The Court found that, in the context of § 4.59, the word “should” was ambiguous, and next questioned whether it should defer to the Secretary’s interpretation. The Court concluded that no deference was due to the Secretary’s “interpretation that the regulation creates no requirement that particular kinds of range of motion testing be performed” because the Secretary has previously conceded remand in “at least two cases” (nonprecential) “where the Board relied on medical evidence that did not comport with the final sentence of § 4.59.”

On its own, the Court found several additional cases where the Secretary previously interpreted § 4.59 “in accordance with Mr. Correia’s position” – and only found one other case where the Secretary argued that the regulation “does not create a testing requirement with which VA examiners must comply.” The Court thus stated that “given that the Secretary appears to ordinarily concede before this Court that § 4.59 creates a requirement for VA examiners to conduct the range of motion testing listed in the final sentence where such testing can be performed, the Court cannot conclude that the Secretary’s proffered interpretation in this case represents ‘the agency’s considered view on the matter.’” 

The Court thus held that “the final sentence of § 4.59 creates a requirement that certain range of motion testing be conducted whenever possible in cases of joint disabilities.” The regulation identifies “three things examiners ‘should’ do” – “(1) carefully note facial expression or wincing on pressure or manipulation and relate that to the affected joint; (2) carefully note crepitation in the soft tissues or joint structures; and (3) test for pain throughout range of motion in various ways.” 

NOTE: On July 26, 2016, the Secretary filed a motion for reconsideration and/or full court review. 

FULL DECISION

MISLEADING NOTICE VIOLATES DUE PROCESS

Noah v. McDonald, docket no. 15-0334 (June 10, 2016)

HELD: When VA sends “affirmatively misleading notice” to a claimant, that notice does not “satisfy the requirements of procedural due process guaranteed by the Fifth Amendment to the U.S. Constitution.”

SUMMARY: In December 1981, Mr. Noah filed a claim for service connection for PTSD. In January 1982, VA sent him a letter regarding additional information that was needed. The letter stated “Please reply within 30 days. If we have no reply within 60 days, we will assume that you have with[]drawn your claim.” Mr. Noah did not respond to this request.  

In December 2007, Mr. Noah filed another claim for service connection for PTSD. The RO granted the claim in 2009, effective the date of the 2007 claim. Mr. Noah appealed the effective date.

In an October 2011 statement, Mr. Noah explained that he had attempted to get medical evidence to support his 1981 claim, but he believed – based on VA’s letter – that if he did not submit the evidence within 60 days, VA would close his file. He was not able to get a medical appointment for approximately 90 days and could not afford to see a private psychiatrist – so he became discouraged and gave up. He stated that had he known that he actually had one year to submit the evidence, he would have waited for the appointment with the psychiatrist and would have been able to submit that evidence.

Mr. Noah later submitted a letter from a private psychiatrist stating that he was suffering from PTSD in 1981 and 1982. VA denied the earlier effective date and Mr. Noah appealed to the Board. At the Board, Mr. Noah’s counsel conceded that he had “abandoned” his 1981 claim, but argued that he “had a constitutional right not to be misled by VA’s letter.”

The Board acknowledged that in 1981, 38 C.F.R. § 3.158 provided that a claim will be considered abandoned if requested evidence is not submitted within one year after the date of the request. The Board acknowledged that VA’s letter was “misleading,” but concluded that “even though Mr. Noah might have believed he had no more than 60 days to submit medical evidence . .  . , he remained subject to the 1-year abandonment provision in effect at the time.”

At the Court, Mr. Noah first argued that he was entitled to equitable tolling of the one-year period to submit evidence, and that equitable tolling might apply in situations such as his where a due process violation is alleged. The Court disagreed and held that “the one-year period in 38 U.S.C. § 3003(a) to submit evidence following VA’s notification of the evidence necessary to complete the application [for benefits] cannot be construed as a statute of limitations and, therefore, is not subject to equitable tolling.”

With respect to Mr. Noah’s due process argument, the Court held that VA’s act of providing the claimant with misleading notice violated his due process right to accurate notice and the “right to be heard,” which the Court described as his “right to have his claim for disability benefits adjudicated.” The Court held that VA’s 1982 notice letter “failed to satisfy the requirements of procedural due process guaranteed by the Fifth Amendment to the U.S. Constitution.”

However, the Court also found that in order to prevail in an argument for an earlier effective date based on the due process violation, the claimant must “demonstrate that he relied to his detriment on the misleading notice.” The Court acknowledged that Mr. Noah did not apply for benefits for PTSD again until 2007, but also noted his explanation for why he stopped pursuing benefits back in 1982. The Court remanded this appeal to the Board to determine whether Mr. Noah relied to his detriment on the misleading notice. If so, then his 1981 claim is “pending and unadjudicated,” and he may be entitled to an earlier effective date for an award of benefits.

FULL DECISION

CHAMPVA, 38 U.S.C. § 1781

Holle v. McDonald, docket no. 14-1235 (June 10, 2016)

HELD: Eligibility for CHAMPVA requires enrollment in Medicare Part B, subject to only one exception, and the enrollment requirements cannot be construed as a statute of limitations that would be subject to equitable tolling.

SUMMARY: The appellant in this case is the spouse of a veteran who was in receipt of a total disability rating based on individual unemployability for his service-connected PTSD. In 2002, she applied for benefits through the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA). The following month, she received a letter informing her of her eligibility and explaining how to apply. In 2005, she was awarded Social Security disability benefits. She was enrolled in Medicare Part A as of December 1, 2004, and Part B as of June 1, 2009. She was subsequently informed by VA that she was not eligible for CHAMPVA during the period that she was not enrolled in Medicare Part B – and that she would receive an invoice for any benefits received during that ineligibility period.

She appealed that decision, asserted that she had had a stroke that caused memory loss and impacted her daily living, and that her husband could not assist her because of his PTSD. While sympathetic to her situation, the Board denied the appeal because the eligibility criteria for CHAMPVA require enrollment in Medicare Part B.

On appeal to the Veterans Court, Mrs. Holle argued that she is entitled to “equitable tolling” of the 2004 deadline to enroll in Medicare Part B. The Court examined the language of the statute authorizing the CHAMPVA program, 38 U.S.C. § 1781, noting that it requires enrollment in Medicare Part B unless the applicant was 65 years old as of June 5, 2001, and was not enrolled in Medicare Part B as of that date. Mrs. Holle did not satisfy this exception to the requirement – and the Court thus held that the Board properly interpreted the statute regarding CHAMPVA eligibility.

Regarding the equitable tolling argument, the Court noted that “equitable tolling is a tool used to grant relief when a potential appellant fails to file suit within a statutory limitations period.” Because this situation did not involve the question of a timely appeal to a court – but instead dealt with enrollment requirements – the Court held that equitable tolling did not apply. The Court stated that it “may not award equitable relief,” but noted that “the Secretary, in appropriate cases, may provide equitable relief,” which is entirely discretionary and not reviewable by the Court. 

FULL DECISION

EQUAL ACCESS TO JUSTICE ACT (EAJA)

Butts v. McDonald, docket no. 14-3019(E) (June 3, 2016)

HELD: VA's compliance with existing Court precedent "does not relieve the Court of its duty to evaluate the reasonableness of the Secretary’s regulatory interpretation and his conduct at the administrative level.” therefore, “the Secretary may be required to pay EAJA fees despite following [Court] precedent.” 

SUMMARY: In Johnson v. Shinseki (Johnson I), 26 Vet.App. 237 (2013) (en banc), the Court held that 38 C.F.R. § 3.321(b)(1) was ambiguous and deferred to the Secretary’s interpretation that limited extraschedular consideration to individual disabilities, as opposed to multiple conditions. The Federal Circuit reversed this decision in Johnson v. McDonald (Johnson II), 762 F.3d 1362 (Fed. Cir. 2014), concluding that the plain language of the regulation was unambiguous and that it “provides for referral for extra-schedular consideration based on the collective impact of multiple disabilities.” Johnson II, 762 F.3d at 1365-66.

While Johnson I was on appeal to the Federal Circuit, the Board of Veterans’ Appeals issued the decision in Mr. Butts’ case, denying referral for extraschedular consideration for his service-connected disabilities. Mr. Butts filed his Notice of Appeal in September 2014 – after the Federal Circuit issued Johnson II. The parties subsequently agreed to a joint motion for partial remand (JMPR) because the Board’s adverse extraschedular determination did not comply with 38 C.F.R. § 3.321. The Court granted the JMPR and Mr. Butts’ attorney filed an application for fees under the Equal Access to Justice Act (EAJA).  

The Secretary disputed the EAJA application, arguing that Mr. Butts was “not a prevailing party because the JMPR was based on a change in precedent, rather than Board error.” Mr. Butts argued that “he is a prevailing party because the JMPR was implicitly based on the Board’s failure to properly apply § 3.321(b)(1), as Johnson II ‘did not create a new interpretation of the regulation, but simply explained what the regulation has always said.’”

The Court first noted that it is the appellant’s burden to show “prevailing-party status under the EAJA,” and that a joint motion for remand “may confer prevailing-party status if the JMR contains an explicit or implicit admission of error.” *4 (citing Thompson v. Shinseki, 24 Vet.App. 176, 178 (2010)). It is the Secretary’s burden to show “that his position was substantially justified at both the administrative and litigation stages.” *5 (citing Locher v. Brown, 9 Vet.App. 535, 537 (1997)).

The Court found that the language of the JMPR “explicitly concedes error” because it stated that the Board’s decision did not comply with § 3.321. Because of this language, the Court determined that Mr. Butts was a prevailing party for EAJA purposes. *7.

The Secretary argued that his position was substantially justified because the Board was bound to comply with Johnson I when it issued its decision. *8. The Court rejected this argument, noting that the Board never mentioned Johnson I in its decision. The Court added that the fact that the Court had previously upheld the Secretary’s “erroneous interpretation” of the regulation in Johnson I did not resolve the substantial-justification question. *9. Instead, the Court must examine the “totality of the circumstances” surrounding the government’s position and assess “the reasonableness of the Secretary’s regulatory interpretation and his conduct at the administrative level.” *9. The Court found that, in Johnson I, the majority had “simply erred when it deferred to the Secretary’s interpretation” – and that the majority’s error did not make the Secretary’s error “reasonable . . . under the totality of the circumstances.” Id. The Court thus held that “under the EAJA’s totality-of-the-circumstances analysis, the Secretary may be required to pay EAJA fees despite following precedent.” *10.

The Court found further support for its holding in the Federal Circuit’s determination “that there was ‘no logic’ and no policy support for [the Secretary’s] interpretation that § 3.321(b)(1) applied only to service-connected disabilities on a disability-by-disability basis ‘and not also on the collective impact of all of the veteran’s disabilities.’” *11.

The Court reiterated the Federal Circuit’s finding that the plain language of the regulation was consistent with 38 U.S.C. § 1155, which authorizes the Secretary to adopt and apply a rating schedule, adding that the Secretary’s interpretation was not supported by the regulation’s history. *12.

The Court also noted that while VA was bound by Johnson I, the Secretary could have sought a stay in any cases that would involve the application of Johnson I while that decision was on appeal to the Federal Circuit. *14-15. The Court concluded that the only factor in favor of substantial justification was the Board’s obligation to comply with Johnson I. That factor was outweighed by

(1) the Secretary’s failure to abide by the plain wording of § 3.321(b)(1) … (2) the fact that the Secretary had no policy basis for his proffered interpretation; (3) the fact that [Johnson I] was a mixed decision and on appeal while the Secretary continued to misapply § 3.321(b)(1); and (4) the fact that the Secretary had the option of staying the case pending a decision on appeal. *15.

FULL DECISION

TDIU, "MARGINAL EMPLOYMENT"

Ortiz-Valles v. McDonald, docket no. 14-2540 (May 20, 2016)

HELD: the plain language of 38 C.F.R. § 4.16(a) does not allow VA “to limit consideration of marginal employment to only currently employed veterans.”

SUMMARY: In determining whether a claimant is entitled to a total disability rating based on individual unemployability (TDIU), the plain language of 38 C.F.R. § 4.16(a) does not allow VA “to limit consideration of marginal employment to only currently employed veterans.” The regulation defines “marginal employment” as one example “of what is not substantially gainful employment.” Therefore, “when the facts of the case reasonably raise the issue of whether the veteran’s ability to work might be limited to marginal employment,” VA must address this issue and “explain why the evidence does not demonstrate that the veteran is incapable of more than marginal employment.”

FULL DECISION

PARTIAL & TOTAL KNEE REPLACEMENT

Hudgens v. McDonald, docket no. 2015-7030 (Fed. Cir. May 18, 2016)

HELD: Diagnostic Code 5055 provides for a 100% rating for partial as well as total knee replacements. 

SUMMARY: The Federal Circuit reversed the CAVC’s determination that DC 5055, which provides for a 100% disability rating for “[p]rosthetic replacement of knee joint . . . [f]or 1 year following implantation of prosthesis” applies only to total knee replacements and not partial knee replacements. (Note: While this appeal was pending, VA amended its regulation to clarify that language referring to “Prosthetic Implants” refers to replacement of the whole joint, unless otherwise stated in DC 5054.)

FULL DECISION

EQUITABLE TOLLING

Threatt v. McDonald, docket no. 15-0835 (May 17, 2016) (per curiam order)

HELD: A veteran’s correspondence to his congressional representative expressing disagreement with a 2003 Board decision was a “timely misfiled” Notice of Appeal. Because this correspondence was submitted to the RO within the 120-day appeal period, the Court found that the appellant “has satisfied all the requirements of circumstance and diligence to warrant the application of equitable tolling.”

FULL DECISION

"SYSTEMIC THERAPY" DEFINED

Warren v. McDonald, docket no. 13-3161 (May 10, 2016)

HELD: "Systemic therapy" includes both oral and parenteral medication. 

SUMMARY: The Court in this case considered the term "systemic therapy," as used in 38 C.F.R. § 4.118, and found that “the types of systemic treatment that are contemplated under Diagnostic Code 7806 are not limited to ‘corticosteroids or other immunosuppressive drugs.’ Compensation is available for all systemic therapies that are like or similar to corticosteroids or other immunosuppressive drugs.” The Court found further support for this holding in the M21-1MR, VA’s adjudication manual, which defines “systemic therapy” as “any oral or parenteral medication prescribed by a medical professional to treat the underlying skin disorder.”

FULL DECISION

NO ATTORNEY ABANDONMENT ABSENT REPRESENTATION AGREEMENT

Sneed v. McDonald, 819 F.3d 1347 (Fed. Cir. Apr. 22, 2016)

HELD: Although attorney abandonment may, in certain circumstances, justify equitable tolling of the filing deadline in an appeal to the CAVC, there is no attorney abandonment absent a representation agreement between the parties.

Even if the claimant in this case had been able to show that there was attorney abandonment, she would still not be entitled to equitable tolling because “she failed to demonstrate that she diligently pursued her rights.”

FULL DECISION

REIMBURSEMENT OF EMERGENCY MEDICAL COSTS

Staab v. McDonald, docket no. 14-0957 (Apr. 8, 2016)

HELD: VA is required to reimburse the costs for emergency medical treatment “when coverage by a third party [including Medicare] is less than total.”

In other words, partial Medicare reimbursement does not bar VA reimbursement for the uncovered medical expenses. VA’s regulation stating that VA will only reimburse when a “veteran has no coverage under a [third-party] health-plan contract” is invalid because it is inconsistent with the 2009 amendment to 38 U.S.C. § 1725. 

FULL DECISION

STANDARD FORMS

Veterans Justice Group, LLC v. Sec’y of Veterans Affairs, 818 F.3d 1336 (Fed. Cir. Apr. 7, 2016)

HELD: VA’s final rule requiring standard claims and appeals forms is valid. 

FULL DECISION

ENTITLEMENT TO EAJA FEES

Dover v. McDonald, 818 F.3d 1316 (Fed. Cir. Apr. 7, 2016)

HELD: Where a remanding court does not retain jurisdiction over a case and the remand order contemplates and/or precipitates additional agency proceedings on the merits – even if the order just leaves open “the possibility of attaining a favorable merits determination through further agency proceedings” – the appellant is a “prevailing party” for purposes of being entitled to EAJA fees.

FULL DECISION

McKinney: HEARING LOSS, PRESUMPTION OF SOUNDNESS

McKinney v. McDonald, 28 Vet.App. 15 (Mar. 11, 2016)

HELD: If the degree of hearing loss noted on a veteran’s enlistment medical examination does not meet VA’s definition of “disability” for hearing loss under 38 C.F.R. § 3.385, the veteran is entitled to the presumption of soundness.

The Court also rejected the Secretary’s argument that hearing loss that is not considered a “disability” for VA compensation purposes under § 3.385 should be considered a “defect” and, therefore, ineligible for disability compensation

FULL DECISION

Dixon: CAVC CANNOT DISMISS UNTIMELY APPEAL WHEN SECRETARY WAIVES TIMELINESS DEFENSE

Dixon v. McDonald, 815 F.3d 799 (Fed. Circ. 2016)

HELD: The CAVC does not have the sua sponte authority to dismiss an untimely appeal when the Secretary has waived a timeliness defense. 

The veteran filed his Notice of Appeal to the CAVC late – sixty days beyond the 120-day filing deadline. The Court dismissed the appeal, based on lack of jurisdiction. After the Court’s dismissal, the U.S. Supreme Court issued Henderson v. Shinseki, 562 U.S. 428, 431 (2011), holding that the 120-day deadline was a procedural rule that was subject to equitable tolling. Following Henderson, the CAVC informed Mr. Dixon that he could ask the court to recall mandate based on an equitable tolling argument. He filed this motion, which the CAVC then denied. He appealed to the Federal Circuit, but passed away while the appeal was pending. The Federal Circuit reversed the CAVC’s decision, finding that the denial had prevented the veteran’s new pro bono counsel access to evidence he would need to prove the claim.

On remand back at the CAVC, Mr. Dixon’s wife substituted in the appeal. She submitted evidence and argument in support of the equitable tolling argument to excuse her husband’s late filing. The Secretary responded by waiving his objection to the late filing, stating that “it appears the criteria [for equitable tolling] has been satisfied” and that “the Secretary is unopposed to the application of equitable tolling.” Despite this waiver, the CAVC nevertheless rejected Mrs. Dixon’s equitable tolling arguments and again dismissed the appeal – essentially “granting the Secretary relief he had explicitly declined to seek on a defense he had waived.”

Mrs. Dixon appealed to the Federal Circuit again. The Federal Circuit discussed Henderson, stating that the Supreme Court “found Congress’s purpose in creating the Veterans Court – to ‘place a thumb on the scale in favor of veterans’ – to imply that Congress could not have intended this time bar to subject veterans to the ‘harsh consequences that accompany the jurisdiction tag.’” The Federal Circuit noted that after Henderson, the CAVC issued Bove v. Shinseki, 25 Vet.App. 136 (2011), in which it discussed how to implement the Supreme Court’s decision. In Bove, the CAVC had held that because the 120-day deadline was “non-jurisdictional, equitable tolling may excuse a veteran’s failure to comply with it.” The CAVC also considered whether it had two types of sua sponte authority – first, the authority to raise the time bar at the start of proceedings and second, the authority to resolve the issue even if it is waived by the Secretary. The CAVC “recognized that, as a general rule, courts lack the authority to raise or resolve non-jurisdictional timeliness defenses sua sponte.” However, the CAVC noted that there was an exception to this rule for habeas cases – and that policy concerns, specifically “the court’s own interest in managing its docket,” allowed it to benefit from an exception to the general rule.

The Federal Circuit had previously determined that the CAVC did have the authority to raise the timeliness issue early on in proceedings. Checo v. Shinseki, 748 F.3d 1373 (Fed. Cir. 2014). In this present case, however, the Federal Circuit determined that the CAVC did not have the sua sponte “authority to resolve timeliness in the face of the Secretary’s waiver by granting him relief that he explicitly declined to seek.” In deeming itself an “exception” to the general rule, the Federal Circuit found that the CAVC failed to account for statutory limits to its jurisdiction, misread the precedent that created the exception to the general rule, and misapprehended the relevant policy considerations. The Court stated: “We are aware of no other court that has the sua sponte authority to resolve a deliberately waived non-jurisdictional timeliness defense.”

The Secretary added an argument to support the CAVC’s authority to resolve the timeliness issue – by pointing to the Court’s “broad discretion to prescribe, interpret, and apply its own rules.” The Federal Circuit rejected this argument, stating that the rules do not suggest that the CAVC “has a special power to enforce their time bar” and that “the rules merely rephrase the statutory time bar in nearly identical language.” The Federal Circuit thus reversed the CAVC’s “determination that it had the authority to dismiss this appeal as time-barred” in the face of the Secretary’s waiver of the timeliness defense. 

FULL DECISION

Sullivan: DUTY TO OBTAIN VA MEDICAL RECORDS

Sullivan v. McDonald, 815 F.3d 786 (Fed. Cir. Mar. 8, 2016)

HELD: VA's duty to assist includes the duty to obtain VA medical records - regardless of the relevancy of those records.

SUMMARY: 38 C.F.R. § 3.159(c)(3) identifies four categories of records that VA will help a claimant obtain in connection with a compensation claim: (1) service medical records, if relevant to the claim; (2) other relevant service records that are held by a government entity; (3) VA medical records; and (4) any other relevant records held by any federal agency. (emphasis added). 

Based on the plain language of the regulation, the Federal Circuit found that VA clearly knew how to impose a relevancy standard on three of the four categories of records – and that it did not impose that same requirement on VA medical records. The Federal Circuit found that the CAVC erred in its interpretation of 38 C.F.R. § 3.159(c)(3) when it concluded that VA’s duty to assist extended only to “potentially relevant” VA records, including VA medical records.

Thompson: RATING FUNCTIONAL LOSS DUE TO PAIN ON MOTION

Thompson v. McDonald, 815 F.3d 781 (Fed. Cir. Mar. 8, 2016)

HELD: Section 4.40 does not provide for a rating separate from 38 C.F.R. § 4.71a.

SUMMARY: Section 4.40 “speaks generally in terms of disability of the musculoskeletal system, and explains what may cause a functional loss,” but does not explicitly provide a rating for any disability. Instead, “§ 4.40 must be viewed in light of the explicitly listed disability ratings for the musculoskeletal system in § 4.71a.” The guidance provided in § 4.40 “is intended to be used in understanding the nature of a veteran’s disability, after which a rating is determined based on the § 4.71a criteria.”

In this case, the veteran was rated 20% for his back condition and appealed for a higher rating. The Board determined that he was not entitled to a higher rating because his pain did not limit his flexion to 30 degrees or less, which is what is required for the higher rating. The Veterans Court agreed, noting that the Board had conceded that Mr. Thompson had additional functional loss due to pain – but that functional loss still did not restrict his motion to 30 degrees or less, such as to warrant a higher rating. 

The Federal Circuit affirmed the CAVC’s decision, stating that 38 C.F.R. § 4.40 “makes clear that functional loss may be due to pain and that pain may render a part seriously disabled.” Nevertheless, the Court maintained that “an applicant for disability benefits is rated based on the criteria set forth in § 4.71a.”

FULL DECISION