Thursday, August 2, 2012
Mason v. Shinseki, No. 10-1554 (Argued April 10, 2012 Decided July 31, 2012); NOD Attorney Fees
UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS
NO. 10-1554
MARIELLA B.MASON, APPELLANT
V.
ERIC K. SHINSEKI,
SECRETARY OF VETERANS AFFAIRS, APPELLEE.
On Appeal from the Board of Veterans' Appeals
(Argued April 10, 2012 Decided July 31, 2012)
Kenneth M. Carpenter, of Topeka, Kansas, for the appellant.
Thomas E. Sullivan, Senior Appellate Attorney, with whom Will A. Gunn, General
Counsel, R. Randall Campbell, Assistant General Counsel, and Gayle E. Strommen, Deputy
Assistant General Counsel, were on the brief, all of Washington, D.C., for the appellee.
Before KASOLD, Chief Judge, and MOORMAN and DAVIS, Judges.
MOORMAN, Judge: On July 18, 2012, Mariella B. Mason, the surviving spouse of
Kenneth B. Mason, Esq., was granted leave by this Court to substitute as the appellant in this case.
She now continues, through counsel, Mr. Mason's appeal of a January 13, 2010, Board of Veterans'
Appeals (Board) decision that determined that Mr. Mason had failed to file a timely Notice of
Disagreement (NOD) with respect to VA's denial of his entitlement to attorney fees. See Record (R.)
at 3-8.
The fundamental issue in this case is whether VA may consider an attorney-fees
determination to be a "simultaneously contested claim" subject to a 60-day NOD filing period under
38 U.S.C. § 7105A. The Court holds that VA's application of section 7105A to an attorney-fees
determination is permissible under the Secretary's regulatory interpretation that an attorney-fees
determination constitutes a simultaneously contested claim.
I. FACTS
In July 1999, attorney Mason and veteran Phillip C. Corbin executed a representation
agreement that directed VA "to withhold twenty percent (20%) of past due benefits payable to
[veteran] and pay such amount to [Mr. Mason] as [an] attorney's fee." R. at 493-94. Mr. Mason sent
VA a copy of his fee agreement with veteran Phillip C. Corbin. R. at 495; see R. at 493-94 (fee
agreement also stating that VA "shall NEVER contact [the veteran] directly regarding attorney's fee
in general or regarding this fee agreement in particular"). In September 2005, the VA regional office
(RO) granted entitlement to individual unemployability, effective October 31, 2000, and sent notice
of its decision to Mr. Corbin. R. at 146-49, 150-57.
On November 8, 2005, and again on November 30, 2005, the RO sent letters to Mr. Corbin
and Mr. Mason (with a benefits audit correction in the second letter), providing notice that
Mr. Mason was not eligible for attorney fees, but that 20% of Mr. Corbin's past-due benefits award
for individual unemployability, in the amount of $11,806.39, had to be withheld until the appeal
period concluded. R. at 49-51, 75-78. Both notice letters stated:
If you disagree with this determination, you may file a notice of disagreement (NOD).
An NOD is a letter telling this office that you disagree with the decision. To initiate
appellate review, an NOD must be filed with this office within 60 days after the date
of this letter. Since there is more than one party who may claim entitlement to the
money being withheld as attorney fees in this case, the provisions relating to
simultaneously contested claims are being applied. See 38 USC § 7105A.
R. at 50, 76. In addition, an Attorney Fee Eligibility Decision was provided, stating that Mr. Mason
did not meet the first condition for attorney fees under the then-current 38 C.F.R. § 20.609(c)(1),
because there was no final Board decision regarding individual unemployability.1 R. at 77; see
38 C.F.R. § 20.609(c)(1)(i) (2005).
On February 6, 2006, Mr. Mason faxed his NOD to VA. R. at 134. On February 21, 2006,
VA informed Mr. Mason that his NOD was not being accepted because it was untimely and should
have been filed by January 30, 2006. R. at 132-33. Two days after VA's determination, Mr. Corbin
discharged Mr. Mason as his representative. R. at 131.
1 38 C.F.R. § 14.636(c)(2) (2012) includes the language of former § 20.609(c)(1)(i) and explains that such
language applies to "cases in which a Notice of Disagreement was filed on or before June 19, 2007."
2
On June 5, 2006, VA received a statement in support of claim from Mr. Corbin explaining,
in pertinent part:
My attorney Mr. Kenneth B. Mason knew nothing about me applying for
un[e]mployability until you (VA) informed him with the same letter you sent me,
dated [N]ovember 30, 2005. Your letter stated that a notice of disapproval [sic] must
be filed with your office within 60 days from the date of your letter. It has been 180
days since I received your letter. Please inform me why I have not received the rest
of my award. A copy of your letter is enclosed. Thank you for your time, work
and consideration.
R. at 101.
On January 7, 2008, VA sent a Statement of the Case (SOC) to Mr. Corbin and Mr. Mason,
explaining that an untimely NOD had been filed by Mr. Mason in response to the VA decision to
deny payment of attorney fees. R. at 52-73. Subsequently, the Board issued the decision on appeal,
concluding that, as a matter of law, Mr. Mason failed to file a timely NOD within 60 days of the VA
decision denying entitlement to attorney fees. R. at 4-5 (citing 38 U.S.C. § 7105A(a)). The Board
explained that
[w]hen appealing a simultaneously contested claim, the submission of notice of
disagreement must be within 60 days from the date that the agency mails notice of
the adverse action to the claimant. 38 U.S.C.A. § 7105A(a); 38 C.F.R. § 20.501(a).
A "simultaneously contested claim" is defined as a claim where one claim is allowed
and one is rejected. 38 U.S.C.A. § 7105A. A "simultaneously contested claim" is
further defined as the situation in which the allowance of one claim results in the
disallowance of another claim involving the same benefit or the allowance of one
claim results in the payment of a lesser benefit to another claimant. 38 C.F.R.
§ 20.3(p).
The appellant argues that his claim for attorney fees is not a "simultaneously
contested claim" because the November 8, 2005, and November 30, 2005,
notifications denying his entitlement to attorneys fees did not "allow one claim and
reject another claim." Rather, he argues that the determination of whether an attorney
meets the criteria for attorney fees is a matter that is purely administrative and does
not involve a contested claim for benefits. Therefore, the appellant argues that the
regulations under 38 U.S.C.A. § 7105, which allow for a notice of disagreement to
be filed within one year from the date of mailing of notice of the result of initial
review or determination, should instead apply. 38 U.S.C.A. § 7105(b)(1).
However, the Board finds that this case does present a simultaneously contested
claim, because the allowance of the appellant's claim could result in a loss of benefits
3
to the Veteran because the Veteran would not received [sic] any withheld portion of
retroactive benefits for TDIU [(total disability due to individual unemployability)].
The Board finds that this is a situation where one claim is allowed and one is
rejected, leading to the payment of a lesser benefits[sic] to the Veteran if the
appellant's claim is allowed. Therefore, the Board finds that the claim for attorney
fees constitutes a contested claim. 38 U.S.C.A. § 7105A[ ]; 38 C.F.R. § 20.3(p).
R. at 5-6.
II. ANALYSIS
The appellant argues that the Board erred as a matter of law when it applied 38 U.S.C.
§ 7105A—requiring an NOD to be filed within 60 days of the date notice of an adverse decision is
mailed in a simultaneously contested claim—instead of 38 U.S.C. § 7105, which allows a claimant
to file an NOD within one year from the date the notice of an initial review or determination is
mailed. Incorporating the facts of this case into the appellant's argument, she is asserting that the
Board incorrectly determined the appeal period for withholding 20% of a veteran's past-due benefits
should be 1 year instead of 60 days because her husband made no "claim" for the direct payment of
a contingency fee and the attorney-fees eligibility determination was not "simultaneously contested."
See Appellant's (App.) Brief (Br.) at 6-7. For the following reasons, the Court holds that VA
reasonably concluded that an attorney-fees determination constitutes a simultaneously contested
claim under section 7105A and VA regulations, and the Board's decision will be affirmed.
A. Statutory Interpretation
When a court reviews an agency's construction of a statute which it administers, it is
confronted with two questions. First, always, is the question whether Congress has
directly spoken to the precise question at issue. If the intent of Congress is clear, that
is the end of the matter; for the court, as well as the agency, must give effect to the
unambiguously expressed intent of Congress. . . . [I]f the statute is silent or
ambiguous with respect to the specific issue, the question for the Court is whether the
agency's answer is based on a permissible construction of the statute.
Chevron v. Nat'l Res. Def. Council, Inc., 467 U.S. 837, 842-43 (1984). "[W]here the meaning of a
statutory provision is ambiguous, we must take care not to invalidate otherwise reasonable agency
regulations simply because they do not provide for a pro-claimant outcome in every imaginable
case." Sears v. Principi, 349 F.3d 1326, 1331-32 (Fed. Cir. 2003) (considering Brown v. Gardner,
513 U.S. 115, 118 (1994)).
4
"The Court reviews the interpretation of statutes and regulations de novo." Bradley v. Peake,
22 Vet.App. 280, 290 (2008). "Determining a statute's plain meaning requires examining the
specific language at issue and the overall structure of the statute." Gardner v. Derwinski, 1 Vet.App.
584, 586 (1991) (citing Bethesda Hosp. Assn. v. Bowen, 485 U.S. 399, 403-405 (1988)), aff'd sub
nom. Gardner v. Brown, 5 F.3d 1456 (Fed. Cir. 1993), aff'd sub nom. Brown v. Gardner, 513 U.S.
115 (1994). The cardinal rule is to read the statute as a whole, because the meaning of statutory
language, plain or not, depends on context. King v. St. Vincent's Hosp., 502 U.S. 215, 221 (1991).
A statute should be construed to give effect to all its provisions, "'so that no part will be inoperative
or superfluous, void or insignificant.'" Corley v. U.S., 556 U.S. 303, 314 (2009) (quoting Hibbs v.
Winn, 542 U.S. 88, 101 (2004)). But, when the language of the statute is transparent and its meaning
is clear, there is nothing to construe. Lewis v. U.S., 92 U.S. 618, 621 (1875).
Under the statutory provisions of title 38 of the United States Code, only sections 7105 and
7105A dictate the timeliness of an NOD filed for Board review of an adverse VA determination.
Pursuant to 38 U.S.C. § 7105(b)(1):
Except in the case of simultaneously contested claims, notice of disagreement shall
be filed within one year from the date of mailing of notice of the result of initial
review or determination. Such notices, and appeals, must be in writing and be filed
with the activity which entered the determination with which disagreement is
expressed (hereinafter referred to as the "agency of original jurisdiction"). A notice
of disagreement postmarked before the expiration of the one-year period will be
accepted as timely filed.
The plain language of section 7105(b)(1) does not indicate whether an attorney-fees determination
is subject to the one-year NOD filing period or should be considered a simultaneously contested
claim. Nor does reading the statute as a 2 whole clarify its potential application to attorney-fees
determinations. Instead, the language suggests troubling results might be encountered if the Court
were to accept the appellant's argument that an attorney-fees determination should be construed
under section 7105. For instance, given that Mr. Mason was released as Mr. Corbin's representative
2 To the extent that the appellant asserts that an attorney-fees determination is not a "claim," her counsel fails
to provide any statutory support for such a contention. See App. Br. at 5-9; App. Reply Br. at 1-11. Instead the
appellant's counsel appears to interpret the United States Code using VA's regulatory definitions, while simultaneously
asserting that the plain language of 7105A "is not ambiguous as such." App. Br. at 3-12. The Court declines to
reinterpret the well-established canons of statutory and regulatory construction, which will be followed herein.
5
on February 23, 2006, if VA had been made aware of this change in representation and had applied
section 7105(d)(3) to the attorney-fees determination, Mr. Mason may not have been entitled to
receive the January 7, 2008, SOC and pursue an appeal, unless he were considered to be a claimant
himself. See 3 38 U.S.C. § 7105(d)(3); R. at 131. And if Mr. Mason had been considered a claimant,
under the facts of this case, section 7105(d)(3) would have provided that Mr. Mason, but not
necessarily Mr. Corbin, receive an SOC and have the opportunity to appeal the adverse Board
determination. Id. Although these incongruous hypothetical outcomes do not dictate the course of
the Court's de novo statutory review, they emphasize the lack of guidance in section 7105 in regard
to attorney-fees determinations.
Turning to the second statutory section, 38 U.S.C. § 7105A states:
(a) In simultaneously contested claims where one is allowed and one rejected, the
time allowed for the filing of a notice of disagreement shall be sixty days from the
date notice of the adverse action is mailed. In such cases the agency of original
jurisdiction shall promptly notify all parties in interest at the last known address of
the action taken, expressly inviting attention to the fact that notice of disagreement
will not be entertained unless filed within the sixty-day period prescribed by
this subsection.
The plain language of section 7105A(a) also fails to indicate whether an attorney-fees determination
is subject to the 60-day filing period, explaining only that simultaneously contested claims are
"where one is allowed and one rejected." 38 U.S.C. § 7105A(a). However, read as a whole, the
language of section 7105A suggests that its purpose is to allow for notice to be provided to all parties
3 Under 38 U.S.C. § 7105(d)(3):
Copies of the "statement of the case" prescribed in paragraph (1) of this subsection will be submitted
to the claimant and to the claimant's representative, if there is one. The claimant will be afforded a
period of sixty days from the date the statement of the case is mailed to file the formal appeal. This
may be extended for a reasonable period on request for good cause shown. The appeal should set out
specific allegations of error of fact or law, such allegations related to specific items in the statement
of the case. The benefits sought on appeal must be clearly identified. The agency of original
jurisdiction may close the case for failure to respond after receipt of the statement of the case, but
questions as to timeliness or adequacy of response shall be determined by the Board of Veterans'
Appeals.
6
in interest when a VA determination is contested. Compare 38 U.S.C. § 7105A(b), with 38 U.S.C.
§ 7105(d)(3).4
The appellant argues that Mr. Mason should have had one year to file his NOD under section
7105, because filing a copy of his fee agreement with VA did not constitute the filing of a "claim";
thus, the attorney fees eligibility determination cannot be considered a simultaneously contested
claim under section 7105A. App. Br. at 6-12. This argument is unpersuasive because section 7105
also was written to apply to a "claim" and section 7105A cannot be distinguished on that basis. For
example, section 7105(c) states: "If no notice of disagreement is filed in accordance with this chapter
within the prescribed period, the action or determination shall become final and the claim will not
thereafter be reopened or allowed, except as may otherwise be provided by regulations not
inconsistent with this title." (Emphasis added). Therefore, the statutory use of the word "claim" is
not dispositive in determining whether section 7105 should be applied to an attorney-fees
determination instead of section 7105A.
In sum, review of sections 7105 and 7105A indicates that Congress has not directly spoken
to the precise question of whether an attorney-fees determination constitutes a simultaneously
contested claim. Therefore, the Court holds that the language of sections 7105 and 7105A does not
provide clear guidance in regard to the filing of an NOD after an attorney-fees determination. The
broad language of section 7105A(a), considered in conjunction with section 7105(b)(1), results in
a statutory gap permitting VA to specifically determine which categories of disputes might constitute
simultaneously contested claims. See 38 U.S.C. §§ 7105(b)(1), 7105A(a); see also Chevron, supra.
B. Regulatory Interpretation
1. Plain Language
4 38 U.S.C. § 7105A(b) states:
Upon the filing of a notice of disagreement, all parties in interest will be furnished with a statement
of the case in the same manner as is prescribed in section 7105. The party in interest who filed a
notice of disagreement will be allowed thirty days from the date of mailing of such statement of the
case in which to file a formal appeal. Extension of time may be granted for good cause shown but with
consideration to the interests of the other parties involved. The substance of the appeal will be
communicated to the other party or parties in interest and a period of thirty days will be allowed for
filing a brief or argument in answer thereto. Such notice shall be forwarded to the last known address
of record of the parties concerned, and such action shall constitute sufficient evidence of notice.
7
When interpreting a VA regulation, the Court first reviews the plain language, and if it is
ambiguous, turns to consider the reasonableness of the Secretary's regulatory interpretation. Meedel
v. Shinseki, 23 Vet.App. 277, 280-81 (2009). The implementing regulation for section 7105A states:
"In simultaneously contested claims, the Notice of Disagreement from the person adversely affected
must be filed within 60 days from the date of mailing of the notification of the determination to him
or her; otherwise, that determination will become final." 38 C.F.R. § 20.501(a) (2012). Parroting
the language of section 7105A, this regulation understandably fails to resolve the question of whether
an attorney-fees determination should be considered a simultaneously contested claim. See
38 U.S.C. § 7105A(a); see also Sursley v. Peake, 551 F.3d 1351, 1354-55 (Fed. Cir. 2009) (noting
that the relevant portion of an implementing regulation that is indistinguishable from the statute does
not afford VA's interpretation of the regulation any deference); Sharp v. Shinseki, 23 Vet.App. 267,
275 (2009) ("Deference to the regulation that offers no additional clarity to the interpretive issue
would be inappropriate.").
However, § 20.501(a) is not the only relevant regulation in this case. See 38 C.F.R.
§ 14.636(k) (2012) (discussing the payment of fees for representation by agents and attorneys in
proceedings before agencies of original jurisdiction and the Board: "Notwithstanding provisions in
this section for closing the record . . . appeals shall be initiated and processed using the procedures
in 38 CFR Parts 19 and 20."). According to the Board's Rules of Practice under 38 C.F.R. § 20.3(p)
(2012), a simultaneously contested claim "refers to the situation in which the allowance of one claim
results in the disallowance of another claim involving the same benefit or the allowance of one claim
results in the payment of a lesser benefit to another claimant." See 38 U.S.C. § 501(a). The latter
language of this regulation—"the allowance of one claim results in the payment of a lesser benefit
to another claimant"—evidences VA's interpretation of section 7105A, in that it clarifies the types
of situations that may constitute simultaneously contested claims. Compare 38 C.F.R. § 20.3(p),
with 38 U.S.C. § 7105A(a).
The Court finds that § 20.3(p) is interpretative of section 7105A, and we discern no argument
or persuasive evidence that § 20.3(p) is arbitrary, capricious, or manifestly contrary to sections 7105
and 7105A(a). See Chevron, 467 U.S. at 843-44. Unfortunately, the definition provided under
§ 20.3(p) still leaves the pertinent inquiry unresolved on its face, in that the regulation does not
8
explicitly address attorney-fees determinations. Under such circumstances, the Court must determine
the reasonableness of the Secretary's interpretation of § 20.3(p). See 38 U.S.C. § 7261(a)(1);
Meedel, supra.
2. Secretary's Interpretation of Regulation
Deference is afforded to an agency's interpretation of its own regulation, as long as that
interpretation is not "'plainly erroneous or inconsistent with the regulation.'" Smith v. Nicholson,
451 F.3d 1344, 1349-50 (Fed. Cir. 2006) (quoting Bowles v. Seminole Rock & Sand Co., 325 U.S.
410, 415 (1945)); see Meedel, 23 Vet.App. at 281; Johnson v. Brown, 7 Vet.App. 95, 99 (1994).
An agency's interpretation of its regulations does not require the same observance of formalities as
when an agency interprets a statute; even if VA's fair and considered judgment on the matter in
question is only reflected in litigating documents, it must be afforded deference. See Reizenstein v.
Shinseki, 583 F.3d 1331, 1335 (Fed. Cir. 2009); Smith, 451 F.3d at 1351.
The Secretary argues that "a request for direct payment by the Secretary of attorney fees out
of a past due benefit award is indeed a claim for benefits," and that an attorney-fees eligibility
determination implicates a situation in which the "'allowance of one claim results in the payment of
a lesser benefit to another claimant.'" Secretary's Br. at 9 (quoting 38 C.F.R. § 20.3(p)). As applied
to the facts of this case, the Secretary's interpretation advances the notion that Mr. Mason's fee
agreement constituted an informal application for a percentage of any resulting past-due benefits
awarded to Mr. Corbin; thus, Mr. Mason met the requirements of filing a "claim" under
circumstances giving rise to a "simultaneously contested claim." 38 C.F.R. §§ 20.3(f), (p).
An attorney-fees determination begins with the filing of a fee agreement, which may provide
for the payment of attorney fees out of an award of past-due benefits. See 38 U.S.C. § 5904(c)(2)
(attorneys "shall file a copy of any fee agreement . . . with the Secretary"), (d); 38 C.F.R. § 14.363(e),
(h)(4). Thus, the Secretary's interpretation that a fee agreement filing constitutes a claim for benefits
is not inconsistent with the broad definition of a claim as an "application made under title 38, United
States Code, and implementing directives for entitlement to Department of Veterans Affairs benefits
or for the continuation or increase of such benefits, or the defense of a proposed agency adverse
action concerning benefits." 38 C.F.R. § 20.3(f); see 38 C.F.R. § 14.636(k). Indeed, the courts have
frequently referred to an attorney-fees determination as a "claim." See Stanley v. Principi, 283 F.3d
9
1350, 1359 (Fed. Cir. 2002) ("Since there had been no final decision in the initial proceedings with
respect to the TDIU claim, which would be appealable to the Court of Appeals for Veterans Claims,
there can be no claim for attorneys' fees for the period before such a final decision."); Snyder v.
Gober, 14 Vet.App. 154, 165 (2000) ("[T]he Court is directing the Board to send the direct-payment
claim back to the RO as to representation before both VA and the Court. Hence, that claim will then
be pending before the RO, as to both fee agreements." (emphasis in original)); Scates v. Gober,
14 Vet.App. 62, 65 (2000) ("The matter of attorney fees remains pending before the Secretary by
virtue of the fee agreement filed in this case. After notice to the appellant and intervenor, and an
opportunity to be heard, that claim should be decided by the RO."), aff'd as modified sub nom.,
Scates v. Principi, 282 F.3d 1362 (Fed. Cir. 2002).
The Secretary formalized his interpretation in the VA Adjudication Procedures Manual, M21-
1MR, pt. III, subpt. vi., ch. 6, § A.1.e ("Claims Involving Attorney Fee Withholding . . . The failure
to withhold 20 percent of past due benefits and the denial of payment of such claims . . . should be
handled as a contested claim due to the possibility that VA may be required to attempt to collect fees
paid to the attorney from the claimant."), and there is no doubt it reflects the agency's fair and
considered judgment on the matter in question. Further, the Secretary's regulatory interpretation is
not inconsistent with other VA regulations, including the definitions of "benefit," "claimant," and
"past-due benefits" under § 20.3, or the rules for the payment of fees by agents and attorneys in
proceedings before agencies of original jurisdiction and the Board under § 14.363. See 38 C.F.R.
§§ 14.363, 20.3(e), (f), (g), and (n); see also 38 U.S.C. §§ 7015, 7105A, 5904. Although the
appellant asserts that the definition of a claim under 38 C.F.R. § 3.1(p) is paramount when reviewing
the Secretary's regulatory interpretation, the Court disagrees, because the word "claim" is separately
defined under § 20.3(p) specifically for the Board's rule of practice. See App. Br. at 6; cf. 38 C.F.R.
§ 14.636(k); compare 38 C.F.R. § 3.1(p) ("Claim – Application means a formal or informal
communication in writing requesting a determination of entitlement or evidencing a belief in
entitlement, to a benefit."), with 38 C.F.R. § 20.3(p). Regardless, under either definition, it is not
plainly erroneous or inconsistent for the Secretary to interpret the filing of an attorney-fees
application as constituting a claim, whether formal or informal, for a portion of past-due
VA benefits.
10
Further, the Court notes the appellant's unsupported assertion that "[t]he process of
determining an attorney's eligibility to lawfully charge and receive a fee is a ministerial function of
the VA." App. Br. at 6-7. However, "[t]he agency of original jurisdiction's [attorney fees] eligibility
determination is a final adjudicative action and may be appealed to the Board." 38 C.F.R.
§ 14.636(c)(3) (emphasis added); see also 38 C.F.R. § 14.636(i). Therefore, the appellant's assertion
is unpersuasive. See Hilkert v. West, 12 Vet.App. 145, 151 (1999) (en banc) ("An appellant bears
the burden of persuasion on appeals to this Court."), aff'd per curiam, 232 F.3d 908 (Fed. Cir. 2000)
(table); see also Scates, 282 F.3d at 1365 ("According to Mason, only the 'ministerial' act of paying
him the withheld money remains to be done to complete the resolution of this attorney fee
dispute. . . . Mason's attorney fee claim cannot be disposed of so simply and easily.").5
Additionally, the Secretary's interpretation is most favorable to veterans, who should not have
any percentage of their past-due benefits withheld for an entire year merely to allow an
attorney—supposedly well-versed in veterans law—an additional 305 days to file an NOD. See
Gardner, supra; 38 C.F.R. § 20.3(p); compare 38 U.S.C. § 7105, with 38 U.S.C. § 7105A. Granted,
accepting the Secretary's interpretation also means that veterans disputing attorney-fees
determinations must adhere to the 60-day NOD filing period, but because a percentage of their pastdue
benefits is withheld until the appeal period passes, veterans have every impetus to act
expeditiously in this narrow exception to the one-year filing rule. Cf. 38 U.S.C. § 7105A(b); R. at
49-50, 52-53 (notice provided to both the veteran and Mr. Mason that they could appeal the attorney
fee eligibility decision within 60 days). By requiring fee disputes to be raised within 60 days, the
Secretary's regulation reduces uncertainty for both sides in the attorney-client relationship, which
encourages attorneys to offer their services to veterans and veterans to accept them. To the extent
that the appellant contends it is the Board's interpretation of an attorney-fees determination as a
simultaneously contested claim that diminishes the attorney-client relationship, such a contention
is unpersuasive, particularly given that the Federal Circuit previously explained to Mr. Mason:
5 For reasons unknown to this Court, the appellant's counsel failed to cite to the United States Court of Appeals
for the Federal Circuit's decision involving Mr. Mason as a party in that attorney fees determination case. Cf. U.S. VET.
APP.R.ADM.& PRAC. 4(a); MODEL RULES OF PROF'L CONDUCT R. 3.3(a) (Candor Toward the Tribunal) ("A lawyer shall
not knowingly . . . fail to disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be
directly adverse to the position of the client and not disclosed by opposing counsel; . . . ") (2009).
11
Mason contends that the Veterans Court improperly authorized his former client
Scates to participate in the Regional Office proceedings to determine Mason's right
to a fee. Scates, however, has a substantial, immediate and direct financial interest
in the attorney fee claim, since the Department's payments to Mason will be made
from the twenty percent of Scates' accrued benefits that the Department withheld for
that purpose. If less than the twenty percent is paid to Mason, presumably the
balance will be paid to Scates.
Scates, 282 F.3d at 1369.
III. CONCLUSION
After consideration of the appellant's and the Secretary's arguments and briefs, and a review
of the record, the Court holds that the Secretary's interpretation of an attorney-fees determination as
being "the allowance of one claim result[ing] in the payment of a lesser benefit to another claimant,"
is not plainly erroneous or inconsistent with VA regulations or the beneficent congressional intent
evidenced within the United States Code. See Chevron, Gardner, and Smith, all supra; 38 C.F.R.
§ 20.3(p). The Court concludes that the Board correctly determined that VA properly considered the
attorney-fees determination to constitute a simultaneously contested claim under 38 U.S.C. § 7105A.
Accordingly, the Board's January 13, 2010, decision is AFFIRMED.
12
Vazquez-Flores v. Shinseki, No. 05-0355(E) (Argued May 9, 2012 Decided July 31, 2012); EAJA
UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS
NO. 05-0355(E)
ANGEL VAZQUEZ-FLORES, APPELLANT,
V.
ERIC K. SHINSEKI,
SECRETARY OF VETERANS AFFAIRS, APPELLEE.
On Appeal from the Board of Veterans' Appeals
(Argued May 9, 2012 Decided July 31, 2012)
Kathy Lieberman, of Washington, D.C., for the appellant.
Debra L. Bernal, with whom Will A. Gunn, General Counsel; R. Randall Campbell, Assistant
General Counsel; and Carolyn F. Washington, Deputy Assistant General Counsel, were on the brief,
all from Washington, D.C., for the appellee.
Before KASOLD, Chief Judge, and HAGEL and GREENE, Judges.
KASOLD, Chief Judge: Veteran Angel Vazquez-Flores applies through counsel pursuant
to the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d), for an award of attorney fees and
expenses in the amount of $29,560.92 for 179.4 hours of attorney work and $865.40 in expenses.
The Secretary challenges Mr. Vazquez-Flores's EAJA application in part asserting substantial
justification and, alternatively, unreasonable fees. Single-judge disposition was rendered in a
December 16, 2011, memorandum decision; however, reconsideration was granted at Mr. Vazquez-
Flores's request, and this matter was assigned for panel decision. The panel heard oral argument on
May 9, 2012. The December 16 memorandum decision will be withdrawn and this decision issued
in its stead. For the reasons set forth below, Mr. Vazquez-Flores's EAJA application will be granted
in part.
I. FACTUAL AND PROCEDURAL HISTORY PRIOR TO EAJA APPLICATION
Mr. Vazquez-Flores appealed a February 1, 2005, Board of Veterans' Appeals (Board)
decision that denied benefits for his neuropsychiatric disorder, including as secondary to a serviceconnected
renal disability, because it was not service connected, and denied an increased disability
rating for his service-connected nephrolithiasis, including an extraschedular rating. On appeal, Mr.
Vazquez-Flores argued that the Board (1) provided an inadequate statement of reasons or bases with
regard to his claim for benefits for his neuropsychiatric disorder, (2) erred in finding that he was
adequately notified how to substantiate his claim for an increased disability rating for his
nephrolithiasis, and (3) provided an inadequate statement of reasons or bases with regard to its denial
of an increased disability rating, including an extraschedular rating, for his nephrolithiasis.
On January 30, 2008, the Court held that the Board (1) provided an inadequate statement of
reasons or bases for its decision with regard to Mr. Vazquez-Flores's claim for benefits for
neuropsychiatric disorder, and (2) clearly erred in finding that the Secretary had provided adequate
notice with regard to Mr. Vazquez-Flores's claim for an increased disability rating for his
nephrolithiasis because the notice lacked specificity tied to the requirements for a higher rating as
reflected in the assigned diagnostic code. Vazquez-Flores v. Peake, 22 Vet.App. 37 (2008). The
Board decision was set aside and the matters remanded for further adjudication. Id. The Court did
not address Mr. Vazquez-Flores's argument that the Board provided an inadequate statement of
reasons or bases with regard to its denial of an increased disability rating, including an
extraschedular rating, for his nephrolithiasis.
The Secretary appealed that part of the Court's decision that held that the Board clearly erred
in finding that the Secretary had provided adequate notice with regard to Mr. Vazquez-Flores's claim
for an increased disability rating for nephrolithiasis. On appeal, the U.S. Court of Appeals for the
Federal Circuit (Federal Circuit) determined that specific notice how to substantiate an increased
disability rating claim was not required – i.e., only general notice how to substantiate the claim was
required – and remanded the matter for further review. Vazquez-Flores v. Shinseki, 580 F.3d 1270
(Fed. Cir. 2009).
On remand, the Court clarified that its January 30, 2008, decision with regard to Mr.
Vazquez-Flores's claim for benefits for a neuropsychiatric disorder was not appealed by the Secretary
2
and remained the decision of the Court on that matter. Vazquez-Flores v. Shinseki, 24 Vet.App. 94
(2010). Applying the Federal Circuit's decision that the Secretary is required to provide only general
notice how to substantiate an increased disability rating claim, the Court found that the Secretary's
notice was incomplete. However, the Court also found that the notice error was harmless and
affirmed that part of the Board decision that denied an increased schedular rating for Mr. Vazquez-
Flores's neuropsychiatric disorder.
Although Mr. Vazquez-Flores argued in his initial brief that the Board provided an
inadequate statement of reasons or bases with regard to its denial of an increased disability rating,
including an extraschedular rating, for his nephrolithiasis, the Court did not address this issue in its
January 2008 decision. Moreover, this issue was not again briefed after remand from the Federal
Circuit and the Court again did not address this part of Mr. Vazquez-Flores's initial argument in its
final decision on the merits. Rather, the Court sua sponte noted that possible entitlement to an
extraschedular rating for nephrolithiasis was inextricably intertwined with the claim for benefits for
both disabilities. Thus, in light of the Court's remand of his claim for benefits for a neuropsychiatric
disorder, the Court also remanded the issue of Mr. Vazquez-Flores's possible entitlement to an
extraschedular rating for his nephrolithiasis. The Court also sua sponte found that the Board failed
to address entitlement to total disability based on individual unemployability (TDIU), which had not
been argued by Mr. Vazquez-Flores but reasonably had been raised by the record, and remanded this
matter for further adjudication. Id.
II. PARTIES' ARGUMENTS WITH REGARD TO THE EAJA APPLICATION
Mr. Vazquez-Flores argues that he is entitled to EAJA fees and expenses for all the time
reasonably spent on the case. He argues that he was a prevailing party because he prevailed before
the Court on his claim for benefits for his neuropsychiatric disorder. Moreover, he argues that when
the Court set aside part of the Board decision and remanded the matters on appeal, the legal
relationship of the parties was changed, making him a prevailing party. Additionally, he argues that
all his arguments before the Court and Federal Circuit were reasonable and deserving of attorney fees
and expenses, even though his arguments related to his claim for increased benefits for
nephrolithiasis were not the basis for a remand of that matter.
3
The Secretary agrees that Mr. Vazquez-Flores is a prevailing party, and does not contest the
EAJA application with regard to fees and expenses related to the claim for benefits for a
neuropsychiatric disorder. Although the Secretary initially argued that he was substantially justified
with regard to the claim for increased benefits for nephrolithiasis and incorporated that argument in
a supplemental memorandum of law, his overall position is that Mr. Vazquez-Flores's success (or
lack of success) in his arguments should be a significant consideration when assessing the
reasonableness of his EAJA application. More specifically, the Secretary argues that none of Mr.
Vazquez-Flores's arguments related to his claim for benefits for nephrolithiasis should be awarded
EAJA fees because none of his arguments were the basis for remand.
In response to a request for supplemental briefing, both parties argued that the "special
circumstances" exception for denying an EAJA application requires some degree of fraud or bad
faith on the part of the applicant, which each party also argued was not present in this case.
Additionally, prior to oral argument, the Secretary asked the Court to take judicial notice of an
alternative position taken in another case pending before the Court in which the Secretary argued that
the Court should extend the special circumstances exception to include situations where appellant's
success on the claim was independent of counsel's arguments. He did not, however, change his
argument in this case. Accordingly, other than to grant the Secretary's motion to take judicial notice
of an alternative position on the issue, the special circumstance exception will not be further
discussed.
III. DISCUSSION
A. Whether a Party is a Prevailing Party is a Threshold Determination.
EAJA fees may be awarded only when the applicant is a prevailing party. See 28 U.S.C. §
2412(d)(1)(A), (1)(B), (2)(B); Scarborough v. Principi, 541 U.S. 401, 407-08 (2004); Owens v.
Brown, 10 Vet.App. 65, 66 (1997). Prevailing party status is a threshold determination that bars any
and all EAJA awards if not met. See Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). An appellant
is considered a prevailing party upon either "(1) the ultimate receipt of a benefit that was sought in
bringing the litigation, i.e., the award of a benefit, or (2) a court remand predicated upon
administrative error." Zuberi v. Nicholson, 19 Vet.App. 541, 544 (2006); but see Buckhannon Bd.
4
& Care Home, Inc. v. W. Va. Dep't of Health & Human Res., 532 U.S. 598 (2001) ("catalyst theory"
– which pertains to a situation in which a defendant voluntarily acts in response to the litigation that
achieves the result sought by the plaintiff – is not basis for prevailing party status); Akers v.
Nicholson, 409 F.3d 1356, 1360 (Fed. Cir. 2005) (holding that a remand due to an intervening Court
decision did not render the appellant a prevailing party for EAJA purposes).
To be a prevailing party and to be brought across the threshold and be entitled to "reasonable"
attorney fees and expenses, the appellant need only prevail "on any significant issue in litigation
which achieves some of the benefit the parties sought in bringing suit". Hensley, 461 U.S. at 433
(stating that prevailing party status is a "generous formulation that brings the plaintiff only across
the statutory threshold"); Sumner v. Principi, 15 Vet.App. 256, 261 (2001) (en banc)("[I]n order to
attain prevailing-party status, a party is required to receive at least some relief on the merits of his
claim." (internal quotation marks omitted)). Thus, it is well settled that an appellant is considered
a "prevailing party" (1) when he prevails on a claim as a result of administrative error, but does not
prevail on unrelated claims within the same suit, see Hensley, 461 U.S. at 434, or (2) even when an
appellant's success in the suit was not related to the work of his attorney or not proportional to the
total number of attorney work hours expended, id. Otherwise stated, even when only a part of a
Board decision is remanded based on administrative error, an appellant meets the threshold
requirement for an EAJA award.
Here, Mr. Vazquez-Flores was a prevailing party in his appeal because the decision of the
Board was set aside and the matters on appeal remanded for further adjudication predicated, in part,
on administrative error. See Sumner, 15 Vet.App. at 261 (citing Buckhannon, 532 U.S. at 603 (a
"remand does not constitute some relief on the merits' unless that remand is predicated upon
administrative error")); see also Hensley, supra. Specifically, his claim for benefits for a
neuropsychiatric disorder was remanded because the Board provided an inadequate statement of
reasons or bases. Similarly, his claim for benefits for nephrolithiasis was remanded, in part, based
on the failure of the Board to address possible entitlement to TDIU.
B. Substantial Justification Depends on the Totality of Circumstances.
Once an EAJA applicant alleges that the Secretary's position was not substantially justified,
the burden shifts to the Secretary to demonstrate that his position was substantially justified at the
5
administrative and litigation stages. See Pierce v. Underwood, 487 U.S. 552, 565 (1988) ("[A]
position can be justified even though it is not correct, and . . . it can be substantially (i.e., for the most
part) justified if a reasonable person could think it correct, that is, if it has a reasonable basis in law
and fact.); Locher v. Brown, 9 Vet.App. 535, 537 (1996); Stillwell v. Brown, 6 Vet.App. 291, 301
(1994) (the Secretary's position is substantially justified "'if a reasonable person could think it
correct, that is, if it has a reasonable basis in law and fact'" (quoting Pierce v. Underwood, 487 U.S.
552, 566 n.2 (1988))). Substantial justification is based on the totality of circumstances, which
includes consideration of, inter alia, "merits, conduct, reasons given, and consistency with judicial
precedent and VA policy with respect to such position, and action or failure to act, as reflected in the
record on appeal and the filings of the parties before the Court." White v. Nicholson, 412 F.3d 1314,
1317 (Fed. Cir. 2005) ("The totality of circumstances, by its very description, does not exclude any
valid issue from consideration.").
The Secretary does not assert substantial justification with regard to Mr. Vazquez-Flores's
claim for benefits for neuropsychiatric disorder. And, to the extent he maintains that he was
substantially justified with regard to the increased rating claim for nephrolithiasis, that argument
fails. To be sure, the Secretary succeeded in demonstrating that inadequate notice was not
prejudicial such that he prevailed in his litigation position on that issue. Similarly, the Court's
remand of possible entitlement to an extraschedular rating associated with Mr. Vazquez-Flores's
service-connected nephrolithiasis was due to the fact it was inextricably intertwined with
readjudication of possible entitlement to benefits for a neuropsychiatric disorder, as opposed to
administrative or litigation error, or lack of substantial justification at either the administrative or
litigation stages.
Nevertheless, the Court sua sponte noted that the record reasonably raised the issue whether
Mr. Vazquez-Flores's nephrolithiasis rendered him unemployable and whether he was entitled to
TDIU, and further noted that the Board failed to address these issues, warranting remand. Vazquez-
Flores v. Shinseki, 24 Vet.App. 94 (2010); see also Roberson v. Principi, 251 F.3d 1378 (Fed. Cir.
2001) (Secretary must consider TDIU when a veteran makes a claim for the highest rating possible
and submits evidence of a medical disability and of unemployment); Carpenter v. West, 11 Vet.App.
140, 146-47 (1998) (Board must review all issues reasonably raised by liberal reading of appeal).
6
Thus, remand of Mr. Vazquez-Flores's claim for increased benefits for nephrolithiasis was
predicated, at least in part, on administrative error, defeating the Secretary's contention that he was
substantially justified at the administrative stage. See Stillwell, supra.
C. Reasonableness is Based in Part on Success of the Arguments Presented.
It is well settled that only reasonable fees and expenses may be awarded under EAJA,
28 U.S.C. § 2412(d); Ussery v. Brown, 10 Vet.App. 51, 53 (1997) ("Once it is determined that a
claimant is entitled to an EAJA award, the Court still must determine what is a 'reasonable' fee."),
and that an applicant has the burden of demonstrating the reasonableness of his request for an EAJA
award, Blum v. Stenson, 465 U.S. 886, 897 (1984). Although "[t]he Court [generally] has wide
discretion in the award of attorney fees under the EAJA," Chesser v. West, 11 Vet.App. 497, 501
(1998), there are limitations. For example, when an appellant is successful on one claim as a result
of administrative error, but not successful as to other, distinct claims involved in the same litigation,
work spent solely on the unsuccessful claims is not entitled to an EAJA award. Hensley, 461 U.S.
at 434-35. Similarly, in addition to general reasonableness of the hours spent, there are specific
factors for consideration when assessing the reasonableness of an EAJA award. See id. at 430 n.3
(listing factors); McDonald v. Nicholson, 21 Vet.App. 257, 263-64 (2007) (persuasive argument of
Secretary); Ussery, 10 Vet.App. at 53 (listing of factors). Moreover, even though an appellant is a
prevailing party and has presented arguments that are "interrelated, nonfrivolous, and raised in good
faith," it may "say little about whether the expenditure of counsel's time was reasonable in relation
to the success achieved." Id. at 436.
1. Reasonableness of Hours Billed on a Claim for Benefits for a Neuropsychiatric Disorder
Mr. Vazquez-Flores's briefing and argument with regard to his claim for benefits for
neuropsychiatric disorder were helpful, persuasive, and successful in demonstrating administrative
error below that warranted remand. Therefore, the Court will award reasonable attorney fees and
expenses directly incurred in his appeal of the Board's denial of benefits for a neuropsychiatric
disorder. See Blum, supra.
2. Reasonableness of Hours Billed on a Claim for Increased Benefits for Nephrolithiasis
In regard to his increased rating claim for nephrolithiasis, Mr. Vazquez-Flores originally
argued that the Board (1) erred by finding that he was adequately notified how to substantiate his
7
claim for an increased disability rating, and (2) provided an inadequate statement of reasons or bases
with regard to its denial of an increased disability rating, including an extraschedular rating. In its
January 2008 decision, the Court did not discuss Mr. Vazquez-Flores's reasons-or-bases argument,
and remanded his increased rating claim because of insufficient notice. Upon clarification by the
Federal Circuit as to the scope of notice the Secretary is required to provide, the Court determined
that the Board erred in finding the Secretary's notice adequate, but it further found that the error was
not prejudicial. However, the Court remanded the Board's denial of an increased rating for
nephrolithiasis because it found that entitlement to an extraschedular rating was inextricably
intertwined with the remand of the claim for benefits for neuropsychiatric disorder. The Court also
sua sponte found that the Board failed to address entitlement to total disability based on individual
unemployability (TDIU), which reasonably was not raised by Mr. Vazquez-Flores but had been raised
by the record, and remanded this matter for further adjudication.
Although Mr. Vazquez-Flores originally asserted a reasons-or-bases error in the Board's
denial of an increased schedular disability rating, including an extraschedular rating, for his
nephrolithiasis, this argument was not addressed in any of the judicial decisions on this case. With
regard to the Board's statement in support of its denial of an increased schedular disability rating for
nephrolithiasis, it is presumed that the Board's decision facilitated judicial review and otherwise was
adequate with regard to that matter. See Maggitt v. West, 202 F.3d 1370 at 1380-81 (Fed. Cir. 2000)
(in context of affirming Board decision on an issue, noting that argument not addressed is presumed
considered and rejected); Allday v. Brown, 7 Vet.App. 517, 527 (1995) (Board's statement "must be
adequate to enable a claimant to understand the precise basis for the Board's decision, as well as to
facilitate review in this Court").
However, because the Court sua sponte noted that the matter of entitlement to an
extraschedular rating was inextricably intertwined with the remand of the claim for benefits for a
neuropsychiatric disorder and remanded the matter on that basis, no determination – presumptive or
otherwise – was rendered with regard to the Board's statement regarding an extraschedular rating.
What is clear, is that the Court did not rely on Mr. Vazquez-Flores's argument that the Board's
statement on this issue was inadequate, and never found, implicitly or explicitly, that the Board
inadequately addressed this issue. Similarly, although the Court remanded the matter of entitlement
8
to TDIU based on administrative error, such error was found sua sponte by the Court. In effect,
remand of Mr. Vazquez-Flores's claim for benefits for nephrolithiasis is due solely to the intervening
decisions of the Court with regard to error and inextricable intertwining, which intervening decisions
– but for the fact Mr. Vazquez-Flores prevailed on his arguments with regard to his claim for benefits
for neuropsychiatric disorder, and therefore the litigation as a whole – would not warrant prevailing
party status or an EAJA award. Cf. Akers, 409 F.3d at 1360 (holding that a remand due to an
intervening Court decision did not render the appellant a prevailing party for EAJA purposes); see
also McCormick v. Principi, 16 Vet.App. 407, 411 (2002) (noting that the Court should not "revisit
at the EAJA stage the logic of the merits decision").
Under such circumstances, where the arguments presented by Mr. Vazquez-Flores with regard
to his claim for benefits for nephrolithiasis were either rejected or otherwise not the basis for remand,
and where the Court did not find administrative error with regard to this claim based on any of Mr.
Vazquez-Flores's arguments, we do not find an EAJA award for the arguments presented to be
reasonable. Hensley, McCormick, and Chesser, all supra.
D. Calculation of Hours and Expenses Spent on Each Claim on Appeal
On behalf of his primary attorney, Ms. Kathy Lieberman, Mr. Vazquez-Flores requests
$20,434.81 in EAJA fees for 130.1 hours spent on the case and $307.33 for expenses. Ms. Lieberman
billed 6.7 hours for work on the claim for benefits for a neuropsychiatric disorder. Both the hours and
expenses claimed are reasonable on their face and will be awarded. Another 40.1 hours were spent
on research, drafting, and preparing for the oral argument, but it is not clear what part of the effort
applied to Mr. Vazquez-Flores's argument related to his claim for benefits for a neuropsychiatic
disorder and what part applied to the argument related to his claim for benefits for nephrolithiasis.
The time billed will be apportioned equally, and 20.1 hours will be awarded. See Elcyzyn v. Brown,
7 Vet.App. 170, 177-78 (1994) (apportioning hours spent on argument and preparation thereof); see
also Blum and Chesser, both supra.
Ms. Lieberman also billed 30.2 hours for general case management. This time does not appear
unreasonable on its face, and the full time billed for this work will be awarded. See Elcyzyn, supra
(actions such as reviewing the record, interviewing the client and undertaking procedural tasks are
"inextricably linked to the preparation of the entire case and there is no basis for an equitable
9
apportionment"). Overall, 57 hours will be awarded for the time that can be attributed to work spent
on the arguments related to general case management and the claim for benefits for nephrolithiasis.
Additionally, Ms. Lieberman billed $307.33 in expenses, but failed to delineate the amount of
expenses related to Mr. Vazquez-Flores's unsuccessful argument to the Federal Circuit and the
amount of expenses charged following his appeal to the Federal Circuit. Consequently, half of the
requested expenses will be awarded: $153.66.
On behalf of his second attorney, Richard James, Mr. Vazquez-Flores requests $8,260.71 in
EAJA fees for 49.3 hours spent on the case and $558.07 for expenses. However, Mr. James's entire
billing is for work on the matter appealed to the Federal Circuit and for which the arguments were not successful. Consequently, no EAJA compensation shall be awarded. See Hensley and Blum, both supra.
IV. CONCLUSION
Upon consideration of the foregoing, the Secretary's motion for judicial notice is granted and
the appellant's EAJA application is GRANTED IN PART in the amount of $9,106.65 for 57 hours
of attorney work and $153.66 in expenses.
10
Acevedo v. Shinseki, No. 10-3402 (Argued April 25, 2012 Decided July 9, 2012); 38 C.F.R. § 3.304(f)(3) and (5)
Excerpt from decision below:
"Thus, if VA evaluates a veteran's claimed stressor under subsection (f)(3), her lay testimony alone may be sufficient to establish the occurrence of that stressor if the stressor is consistent with her service and a VA psychiatrist or psychologist opines that the stressor is adequate to support a diagnosis of PTSD. 38 C.F.R. § 3.304(f)(3) (2012). However, if VA evaluates a veteran's claimed stressor under subsection (f)(5), her lay testimony must be corroborated by other evidence to establish the occurrence of the stressor. § 3.304(f)(5); see Menegassi v. Shinseki, 638 F.3d 1379,
1382 (Fed. Cir. 2011)."
====================
UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS
NO. 10-3402
BERNADINE ACEVEDO, APPELLANT,
V.
ERIC K. SHINSEKI,
SECRETARY OF VETERANS AFFAIRS, APPELLEE.
On Appeal from the Board of Veterans' Appeals
(Argued April 25, 2012 Decided July 9, 2012)
Robert V. Chisholm, with whom Zachary M. Stolz, Myung Kim Reeder, and Alexandra O.
Lio were on the briefs, all of Providence, Rhode Island, for the appellant.
Bryan W. Thompson, with whom Will A. Gunn, General Counsel; R. Randall Campbell,
Assistant General Counsel; and Joan E. Moriarty, Deputy Assistant General Counsel, were on the
brief, all of Washington, D.C., for the appellee.
Before KASOLD, Chief Judge, and MOORMAN and LANCE, Judges.
LANCE, Judge: The appellant, Bernadine Acevedo, appeals through counsel that portion of
a September 9, 2010, decision of the Board of Veterans' Appeals (Board) that denied her claim for
entitlement to service connection for an acquired psychiatric disorder, to include post-traumatic
stress disorder (PTSD). The appellant does not present any argument concerning the denial of her
claims for entitlement to service connection for sickle cell trait; asbestosis; a right shoulder
disability; and arthritis of the arms, shoulder, ankles, and neck. Accordingly, the Court deems those
claims abandoned and will not review them. See Ford v. Gober, 10 Vet.App. 531, 535 (1997);
Bucklinger v. Brown, 5 Vet.App. 435, 436 (1993). The parties each filed briefs, and the appellant
filed a reply brief. Thereafter, the Court heard oral arguments. For the reasons that follow, that
portion of the Board's September 9, 2010, decision that is on appeal will be affirmed.
I. FACTS
The appellant served on active duty in the U.S. Army from October 1978 to September 1988,
when she was discharged for misconduct after testing positive for marijuana use. Record (R.) at 614,
1339-77. Before discharge from service, the appellant was treated for a suicide attempt after "taking
a handful of Atarax tablets." R. at 1901-02. Her service medical records (SMRs) indicate that,
following the suicide attempt, she was diagnosed with adjustment disorder associated with her
positive urinalysis, the stress of being a "snitch" for the Criminal Investigation Command, and her
impending discharge. R. at 1901-02; see also R. at 1812-13, 1816.
Over a decade later, in September 2000, the appellant filed an informal claim for service
connection for a psychiatric disorder. R. at 1273. In her informal claim, and in later-submitted
personal statements and medical examinations, the appellant asserted that during basic training, in
1978, she was sexually harassed by three drill sergeants and that, when she reported the harassment
to the senior drill sergeant, the senior drill sergeant seduced her into having a sexual relationship
with him in exchange for protection from the other drill sergeants. See, e.g., R. at 118-20, 917-25,
1262-64, 1273. The appellant asserted that, after post-service brain surgery in 1996, her memories
of sexual harassment and assault returned and, as a result, she suffers from depression, nightmares,
flashbacks, and intrusive thoughts. See, e.g., R. at 1235.
The record shows that the appellant received a VA mental disorders examination in February
2001 in which the examiner diagnosed her with major depressive disorder and PTSD but did not
provide a nexus opinion. R. at 1235-39. The record also contains a June 2008 letter from the
appellant's VA psychologist in which the psychologist diagnosed the appellant with PTSD as a result
of sexual harassment and assault by her basic training drill sergeants. R. at 151-52. The
psychologist stated that the appellant "indicates a history of symptoms consistent with a diagnosis
of [PTSD] and presents with those symptoms at this time" but did not describe the symptoms. R.
at 152.
The appellant received a second VA mental disorders examination in November 2008. R.
at 115-26. The examiner noted that he spent four hours reviewing the appellant's entire eight-inch
claims file, one hour reviewing the electronic medical records, and one-and-a-half hours interviewing
the appellant. R. at 116. The examiner recorded the appellant's assertions that her current
2
psychiatric condition did not develop until after her 1996 surgery, her description of her nightmares
as involving hand-to-hand combat with unknown people that did not correspond to any in-service
incident, and the lack of any reference to nightmares involving the sexual assaults. R. at 122-23.
The examiner concluded that a diagnosis of PTSD was not warranted because the appellant's
nightmares, as described to him, were not "thematically related to any perceived traumatic sexual
relationship" and did "not even include the alleged perpetrator." R. at 125.
The 2008 VA examiner diagnosed the appellant with major depressive disorder. R. at 124.
In a January 2009 addendum, the examiner clarified that it was "not at all likely that [the appellant's]
major depression that started many years after she was in the military service is causally or
specifically related to events that happened to her during . . . military service." R. at 114.
The Board concluded that the 2008 VA examination report was the most probative of the
examinations in the record because that examiner was the only one who indicated that he had
conducted a thorough review of the appellant's claims file and was a board-certified psychiatrist. R.
at 27, 29. The Board also acknowledged that the appellant, a nurse, had some medical training, but
concluded that the 2008 VA examiner had more expertise relevant to diagnosing the appellant's
condition and opining as to its etiology. R. at 29. The Board determined, based on the 2008 VA
examination and 2009 addendum (hereinafter "2008 VA examination"), that the appellant did not
have a current diagnosis of PTSD and that the appellant's diagnosed depression was not related to
service. R. at 27, 29. This appeal followed.
II. ARGUMENTS
The appellant argues that the Board should have applied 38 C.F.R. § 3.304(f)(3), which
lessens the evidentiary burden on claimants who allege entitlement to service connection for PTSD
based on a stressor "related to the veteran's fear of hostile military or terrorist activity," rather than
§ 3.304(f)(5), to her claim for PTSD as a result of military sexual trauma (MST). Appellant's (App.)
Brief (Br.) at 8-13.1 The appellant also argues that the 2008 VA examination was inadequate, that
1 At oral argument, counsel for the appellant stated that the appellant was abandoning any claim to benefits
through the application of § 3.304(f)(5).
3
the Board failed to develop a claim for service connection for her diagnosed depression, and that the
Board provided an inadequate statement of reasons or bases to support its analysis. Id. at 15-20.
The Secretary counters that the appellant's argument contradicts the plain language and
regulatory history of §§ 3.304(f)(3) and (5) and that the Board applied the correct standard to the
appellant's claim. Secretary's (Sec'y) Br. at 7-12. The Secretary also asserts that the 2008 VA
examination was adequate for rating purposes and that the Board's statement of reasons or bases was
adequate, and he requests that the Court affirm the Board's September 9, 2010, decision.
III. ANALYSIS
A. Application of 38 C.F.R. § 3.304(f)(3) to PTSD Claims Based on MST
The requirements for establishing service connection for PTSD are outlined in 38 C.F.R.
§ 3.304(f). In general, establishing service connection for PTSD requires (1) evidence of a current
medical diagnosis of PTSD, (2) credible supporting evidence that the claimed in-service stressor
actually occurred, and (3) medical evidence that establishes a nexus between the claimed in-service
stressor and the current symptomatology of the PTSD. Id. The regulation's subsections identify
when "the veteran's lay testimony alone may establish the occurrence of the claimed in-service
stressor" or when additional corroborating evidence is required. Id. Prior to July 13, 2010, a
veteran's lay testimony alone was potentially sufficient to establish a claimed stressor only when the
veteran was diagnosed with PTSD in service, alleged a stressor related to and consistent with
documented prisoner-of-war (POW) experience, or alleged a stressor related to and consistent with
documented engagement in combat. Id.
In 2009 VA proposed an amendment to this regulation that would "reduce the burden of
showing the occurrence of an in-service stressor if the claimed stressor is related to fear of hostile
military or terrorist activity, and is consistent with the places, types, and circumstances of the
veteran's service." Stressor Determinations for Posttraumatic Stress Disorder, 74 Fed. Reg. 42,617,
42,618 (Aug. 24, 2009) (proposed rule); see Nat'l Org. of Veterans' Advocates v. Sec'y of Veterans
Affairs, 669 F.3d 1340, 1344 (Fed. Cir. 2012). The proposed amendment was intended to address
findings from the National Academies' Institute of Medicine (IOM), which observed that allowing
only those service members who engaged in traditional combat to rely on their own lay testimony
4
was inconsistent with the increase in hostile military activities that deployed non-combat personnel
encounter as military conflicts have evolved away from defined front lines toward insurgent and
guerilla warfare. 74 Fed. Reg. at 42,618 (citing INST. OF MED. OF THE NAT'L ACAD.,GULF WAR AND
HEALTH, PHYSIOLOGIC, PSYCHOLOGIC, AND PSYCHOSOCIAL EFFECTS OF DEPLOYMENT-RELATED
STRESS, 2 (2008)). The IOM identified several potentially "potent stressors" that any military
personnel deployed to a war zone might face, regardless of combat status, such as "'constant
vigilance against unexpected attack, the absence of a defined front line, the difficulty of
distinguishing enemy combatants from civilians, [and] the ubiquity of improvised explosive
devices.'" Id.
The revision to 38 C.F.R. § 3.304(f), effective July 13, 2010, included a new subsection
(f)(3), which states:
If a stressor claimed by a veteran is related to the veteran's fear of hostile military or
terrorist activity and a VA psychiatrist or psychologist, or a psychiatrist or
psychologist with whom VA has contracted, confirms that the claimed stressor is
adequate to support a diagnosis of posttraumatic stress disorder and that the veteran's
symptoms are related to the claimed stressor, in the absence of clear and convincing
evidence to the contrary, and provided the claimed stressor is consistent with the
places, types, and circumstances of the veteran's service, the veteran's lay testimony
alone may establish the occurrence of the claimed in-service stressor. For purposes
of this paragraph, "fear of hostile military or terrorist activity" means that a veteran
experienced, witnessed, or was confronted with an event or circumstance that
involved actual or threatened death or serious injury, or a threat to the physical
integrity of the veteran or others, such as from an actual or potential improvised
explosive device; vehicle-imbedded explosive device; incoming artillery, rocket, or
mortar fire; grenade; small arms fire, including suspected sniper fire; or attack upon
friendly military aircraft, and the veteran's response to the event or circumstance
involved a psychological or psycho-physiological state of fear, helplessness,
or horror.
As part of the revision process, the subsection addressing personal assaults, including MST, was
renumbered as (f)(5), which states:
If a posttraumatic stress disorder claim is based on in-service personal assault,
evidence from sources other than the veteran's service records may corroborate the
veteran's account of the stressor incident. Examples of such evidence include, but
are not limited to: records from law enforcement authorities, rape crisis centers,
mental health counseling centers, hospitals, or physicians; pregnancy tests or tests for
sexually transmitted diseases; and statements from family members, roommates,
5
fellow service members, or clergy. Evidence of behavior changes following the
claimed assault is one type of relevant evidence that may be found in these sources.
Examples of behavior changes that may constitute credible evidence of the stressor
include, but are not limited to: a request for a transfer to another military duty
assignment; deterioration in work performance; substance abuse; episodes of
depression, panic attacks, or anxiety without an identifiable cause; or unexplained
economic or social behavior changes. VA will not deny a post-traumatic stress
disorder claim that is based on in-service personal assault without first advising the
claimant that evidence from sources other than the veteran's service records or
evidence of behavior changes may constitute credible supporting evidence of the
stressor and allowing him or her the opportunity to furnish this type of evidence or
advise VA of potential sources of such evidence. VA may submit any evidence that
it receives to an appropriate medical or mental health professional for an opinion as
to whether it indicates that a personal assault occurred.
Thus, if VA evaluates a veteran's claimed stressor under subsection (f)(3), her lay testimony
alone may be sufficient to establish the occurrence of that stressor if the stressor is consistent with
her service and a VA psychiatrist or psychologist opines that the stressor is adequate to support a
diagnosis of PTSD. 38 C.F.R. § 3.304(f)(3) (2012). However, if VA evaluates a veteran's claimed
stressor under subsection (f)(5), her lay testimony must be corroborated by other evidence to
establish the occurrence of the stressor. § 3.304(f)(5); see Menegassi v. Shinseki, 638 F.3d 1379,
1382 (Fed. Cir. 2011).
The Court reviews VA's interpretation of statutes and regulations de novo. See Lane v.
Principi, 339 F.3d 1331, 1339 (Fed. Cir. 2003) ("[I]nterpretation of a statute or regulation is a
question of law . . . ."); Butts v. Brown, 5 Vet.App. 532, 539 (1993) (en banc) (stating that the Court
reviews "questions of law de novo without any deference to the [Board's] conclusions of law").
"'Statutory interpretation begins with the language of the statute, the plain meaning of which we
derive from its text and its structure.'" Myore v. Nicholson, 489 F.3d 1207, 1211 (Fed. Cir. 2007)
(quoting McEntee v. Merit Sys. Prot. Bd., 404 F.3d 1320, 1328 (Fed. Cir. 2005)). Statutory terms
are interpreted "'in their context and with a view to their place in the overall statutory scheme.'"
Tyler v. Cain, 533 U.S. 656, 662 (2001) (quoting Davis v. Mich. Dep't of Treasury, 489 U.S. 803,
809 (1989)).
6
1. The Plain Meaning of Subsection (f)(3)
The appellant contends that her in-service stressors are "related to her fear of hostile military
activity" because (f)(3) defines that phrase to mean "that a veteran experienced, witnessed, or was
confronted with an event or circumstance that involved actual or threatened death or serious injury,
or a threat to the physical integrity of the veteran or others . . . ." App. Br. at 11 (quoting
§ 3.304(f)(3)). She argues that the sexual harassment and assault she experienced in service satisfy
this definition. However, this interpretation of § 3.304(f)(3) contradicts the plain meaning of
§§ 3.304(f)(3) and (5).
First, § 3.304(f)(3) defines "fear of hostile military or terrorist activity" as deriving from "an
event or circumstances . . . such as . . . an actual or potential improvised explosive device;
vehicle-imbedded explosive device; incoming artillery, rocket, or mortar fire; grenade; small arms
fire, including suspected sniper fire; or attack upon friendly military aircraft." While it is well
established that "such as" indicates that the subsequent examples are not an exhaustive list, the Court
finds it significant that the examples provided all involve actions originating from individuals who
commit hostile military or terrorist acts toward the U.S. military, not nefarious, or even criminal, acts
of one service member directed at another service member. See Mauerhan v. Principi, 16 Vet.App.
436, 442 (2002).
In addition, the list of examples provides some context in which to understand the plain
meaning of the phrase "hostile military or terrorist activity." See Tyler, supra. Here, although every
assault, regardless of the participants or the context, could be labeled "hostile," the list of examples
clearly indicates that the term carries a more limited definition here. See, e.g., 38 C.F.R. § 3.1(y)(5)
(defining "hostile force" as an entity "whose actions are taken to further or enhance anti-American
military, political or economic objectives or views, or to attempt to embarrass the United States").
Hostile criminal actions, like the sexual assault asserted here, of U.S. military personnel
directed against other U.S. military personnel are contemplated under the in-service personal assault
provisions of subsection (f)(5). Thus, the Court discerns no merit in the argument that, despite no
language plainly supporting such an interpretation, subsection (f)(3) should be interpreted to
accommodate the circumstances asserted here. See Glover v. West, 185 F.3d 1328, 1332 (Fed. Cir.
1999) (noting that regulatory interpretation should "attempt to give full effect to all words contained
7
within that statute or regulation, thereby rendering superfluous as little of the statutory or regulatory
language as possible").
2. The Regulatory History of Subsection (f)(3)
Although the plain language of the regulation does not support the appellant's proposed
interpretation, the Court will review the regulatory history to determine whether it reveals an intent
that is inconsistent with the plain language of the regulation and the agency's interpretation thereof.
Cf. Glaxo Operations U.K. Ltd. v. Quigg, 894 F.2d 392, 395 (Fed. Cir. 1990) ("[E]ven when the
plain meaning of the statutory language in question would resolve the issue before the court, the
legislative history should usually be examined at least 'to determine whether there is a clearly
expressed legislative intention contrary to the statutory language.'" (quoting and adding emphasis to
Madison Galleries, Ltd. v. United States, 870 F.2d 627, 629 (Fed. Cir. 1989))).
An agency's interpretation of its own regulations is controlling unless it is "'plainly erroneous
or inconsistent with the regulations.'" Auer v. Robbins, 519 U.S. 452, 461 (1997) (quoting Robertson
v. Methow Valley Citizens Council, 490 U.S. 332, 359 (1989)). Furthermore, "[d]eference to an
agency's interpretation of its own regulations is broader than deference to the agency's construction
of a statute, because in the latter case the agency is addressing Congress's intentions, while in the
former it is addressing its own." Cathedral Candle Co. v. U.S. Int'l. Trade Comm'n, 400 F.3d 1352,
1363-64 (Fed. Cir. 2005).
The comments accompanying the regulatory revision proposal specify that it was VA's intent
to liberalize the stressor occurrence confirmation requirements for military personnel who are
deployed to war zones and who, although not assigned to or engaging in actual front-line combat,
nonetheless are faced with significant combat-like stressors in an era of increased insurgent and
guerilla warfare. 74 Fed. Reg. 42,617; see Nat'l Org. of Veterans' Advocates, 669 F.3d at 1344 ("The
VA explained that the rule was 'intended to acknowledge the inherently stressful nature' of serving
where 'hostile military or terrorist activities [are] ongoing.'"). Additionally, the comments
accompanying the final rule clearly note that "VA also received comments suggesting that the rule
should cover stressors such as MST" before concluding that "[t]hese comments are outside the scope
of this rule" and that MST is instead addressed in 38 C.F.R. § 3.304(f)(5). Stressor Determinations
for Posttraumatic Stress Disorder, 75 Fed. Reg. 39,843 (July 13, 2010) (Final rule). The Secretary's
8
interpretation of his revised regulation and expressed intent in promulgating § 3.304(f)(5) is
consistent with the regulation's plain language. See Glaxco, supra.
To the extent that the appellant argues that the comments to the final rule regarding the
requirement that the stressor be consistent with the places, types, and circumstances of the claimant's
service support her interpretation, that argument is likewise unavailing. App. Br. at 11. While it is
true that VA declined to limit the application of the rule to veterans who served in a combat zone
and declined to limit the application "to events or circumstances perpetrated by a foreign enemy,"
it nevertheless remains a requirement that the underlying stressor be related to a fear of hostile
military or terrorist activity.
The appellant's proposed interpretation of paragraph (f)(3) is opposed by both the plain
meaning of the regulation and the agency's interpretation and expressed intent in promulgating it.
Furthermore, the appellant's interpretation—which only requires that a veteran be confronted with
a threat to her physical integrity—essentially reads out the requirement that the veteran's fear be
based on hostile military or terrorist activity.
Neither the language of § 3.304(f) nor its regulatory history suggests that VA is precluded
from evaluating a claimed stressor, such as the appellant's MST, under either subsection (f)(3) or
(f)(5). Simply because subsection (f)(5) was designed to address in-service personal assaults does
not preclude VA from evaluating in-service personal assaults under subsection (f)(3) as long as the
circumstances are such that the veteran's claimed stressor is related to her "fear of hostile military
or terrorist activity." 2 See Glover, supra. Because the appellant's proposed interpretation of
paragraph (f)(3) is contrary to the plain meaning of the regulation and the agency's interpretation and
express intent in promulgating it, the Court concludes that the reduced evidentiary burden of
subsection (f)(3) is not applicable to the appellant's claim based on her bare assertion that her
stressors are related to her fear of hostile military activity.
2 The Court does not reach the question of whether assault by one service member upon another could ever
qualify for application of subsection (f)(5), although an example of circumstances that might raise such a question was
the shooting of fellow service members and bystanders by an Army major at Fort Hood, Texas.
9
B. Adequacy of 2008 VA Examination
The appellant argues that the 2008 VA examination inadequately addressed whether there
is a nexus between her major depression and her military service. "Whether a medical opinion is
adequate is a finding of fact which this Court reviews under the 'clearly erroneous' standard of
review." D'Aries v. Peake, 22 Vet.App. 97, 104 (2008). Moreover, there is no reasons or bases
requirement imposed on examiners. Rather, an adequate medical report must rest on correct facts
and reasoned medical judgment so as inform the Board on a medical question and facilitate the
Board's consideration and weighing of the report against any contrary reports. See Nieves-Rodriguez
v. Peake, 22 Vet.App. 295, 304 (2008) (holding in the context of weighing one medical opinion with
another that "[i]t is the factually accurate, fully articulated, sound reasoning for the conclusion . . .
that contributes probative value to a medical opinion"); D'Aries, 22 Vet.App. at 104 ("An opinion
is adequate where it is based upon consideration of the veteran's prior medical history and
examinations and also describes the disability in sufficient detail so that the Board's 'evaluation of
the claimed disability will be a fully informed one.' " (quoting Ardison v. Brown, 6 Vet.App. 405,
407 (1994))); Stefl v. Nicholson, 21 Vet.App. 120, 124 (2007) (holding that a medical opinion "must
support its conclusion with an analysis that the Board can consider and weigh against
contrary opinions").
To the extent that the summary and conclusion section of the 2008 VA examination report
regarding the appellant's major depression might be viewed as concise, the report nevertheless must
be read as a whole, and the Board is permitted to draw inferences based on the overall report so long
as the inference does not result in a medical determination. See Kahana v. Shinseki, 24 Vet.App.
428, 435 (2011). Here, the Board noted from the 2008 VA examination report that the appellant's
in-service psychiatric condition, including her suicide attempt, was related to her discharge from
service and diagnosed as something other than depression and that her depression, a separate
condition, did not start until many years after service, after her 1996 surgery. Based on the record
of proceedings, the Board's view of and assignment of weight to this report are plausible and not
clearly erroneous. See D'Aries, supra; see also R. at 114, 117, 122, 125-26.
10
C. Reasons or Bases
Finally, the appellant argues that the Board provided inadequate reasons or bases when it
failed to discuss service connection for her depression under theories of chronicity and continuity
of symptomatology, failed to consider the favorable evidence of her in-service suicide attempt and
psychiatric treatment, failed to apply 38 C.F.R. § 3.304(f)(3) to her claim, and accepted as adequate
the 2008 VA examination. App. Br. at 13-15, 20-23; App. Reply Br. at 3-4.
The appellant cites 38 C.F.R. § 3.303 for the proposition that she need merely show that her
condition had its inception during service, but that is an incomplete paraphrase of the regulation.
App. Br. at 17. Section 3.303(b) provides for the establishment of service connection when a disease
or injury documented in service manifests again after service through a theory of either chronicity
or continuity of symptomatology. Chronicity is established if the evidence demonstrates the
existence of a chronic disease in service and present manifestations of that same disease. Savage v.
Gober, 10 Vet.App. 488, 495-97 (1997). Alternatively, continuity of symptomatology may be
established if the evidence demonstrates that a condition was "noted" during service; evidence of
post-service continuity of the same symptomatology; and medical or, in certain circumstances, lay
evidence of a nexus between the present disability and the post-service symptomatology. 38 C.F.R.
§ 3.303(b) (2012); see Savage, 10 Vet.App. at 495.
The appellant argues that a suicide attempt necessarily indicates that she suffered from
"serious psychological issues" during service. App. Br. at 22. Even assuming, arguendo, that the
appellant's in-service diagnosis was of a chronic condition, the record reflects that that condition was
diagnosed as an adjustment disorder while her current diagnosis—and the disability for which she
seeks benefits—is depression.
Furthermore, the appellant does not now identify—nor has she ever in the record before the
Court—evidence of post-service continuity of the same symptomatology as noted in service. Indeed,
the appellant has consistently asserted that her current psychiatric symptoms did not manifest until
after her 1996 surgery, that is, over eight years after her discharge from service. See, e.g., R. at 122,
1235. Because she did not raise these theories of service connection below and they were not
reasonably raised by the record, the Board did not err by not addressing them. See Robinson v.
11
Peake, 21 Vet.App. 545, 552 (2008), aff'd sub nom. Robinson v. Shinseki, 557 F.3d 1355 (Fed. Cir. 2009).
The Board specifically addressed the favorable evidence highlighted by the appellant and,
thus, the appellant's argument that such a discussion did not occur is meritless. R. at 23. The Court
has already determined that the Board's findings with respect to the remaining allegations of error
were supported by the record and now concludes that the Board's analysis was supported by an
adequate statement of reasons or bases. See 38 U.S.C. § 7104(d)(1); Allday v. Brown, 7 Vet.App.
517, 527 (1995); Gilbert v. Derwinski, 1 Vet.App. 49, 56-57 (1990).
III. CONCLUSION
After the Court's consideration of the appellant's and the Secretary's briefs, its review of the
record, and its consideration of the parties' positions advanced at oral argument, that portion of the
September 9, 2010, decision of the Board that is on appeal is AFFIRMED.
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