Jackson v. McDonough

Argued March 7, 2024

On Appeal from the Board of Veterans' Appeals

Zachary M. Stolz, with whom Jenna E. Zellmer was on the brief, both of Providence, Rhode Island, for the appellant.

Nathan P. Kirschner, with whom Richard J. Hipolit, Deputy General Counsel for Veterans Programs; Mary Ann Flynn, Chief Counsel; and Dustin P. Elias, Deputy Chief Counsel, all of Washington, D.C., were on the brief for the appellee.

Before ALLEN, LAURER, and JAQUITH, Judges.

LAURER, Judge, filed the opinion of the Court. JAQUITH, Judge, filed a dissenting opinion.

OPINION

LAURER, JUDGE

Appellant, Alexandra M. Jackson, is an attorney who represented United States Army and Navy veteran John A. Lovier before the Department of Veterans Affairs (VA) agency of original jurisdiction (AOJ).^[1] Ms. Jackson, through counsel, challenges a May 22, 2022, Board of Veterans' Appeals (Board) decision denying her attorney fees paid from past-due benefits awarded to Mr. Lovier. VA granted Mr. Lovier an increased rating for his left hip disability in a December 2021 rating decision that addressed his September 2021 filing with VA.^[2]

From afar, the case seems simple. The Court must decide which of two rating decisions is the "initial decision . . . with respect to the case."^[3] Is the initial decision the original grant of service connection in March 2008 or the more recent December 2021 decision granting an increase in benefits? How the Court categorizes the September 2021 submission controls. And that boils down

to whether the September 2021 submission is a supplemental claim. If the September 2021 submission is a supplemental claim, then the March 2008 decision is the initial decision with respect to the case, and appellant likely prevails and can recover attorney fees under § 5904(c)(1).

Congress overhauled the veterans benefits claims and appeal system when it passed the Veterans Appeals Improvement and Modernization Act of 2017 (AMA).^[4] Part of the overhaul included amendments to the law permitting fees for services performed by an agent or attorney before VA. Before the AMA, representatives could obtain fees for work performed after a Notice of Disagreement (NOD) was filed.^[5] Now, under the AMA, representatives can earn fees for work performed after the AOJ makes an "initial decision . . . with respect to the case ...."^[6] Congress didn't define the term "initial decision," and the term "with respect to the case" predates the AMA. So the Court will analyze Congress's overhaul and determine whether the AMA changes what's already settled.

The appeal focuses on how to interpret 38 U.S.C. § 5904(c). But to meaningfully decide the ultimate interpretive question, the Court must first answer an essential preliminary legal question. That question is: Did a new procedural review option under the AMA-the supplemental claim-displace the longstanding understanding of increased rating claims? Put another way: Under the AMA, is an increased rating claim a supplemental claim? Once we answer this question, we have ample legal guidance to answer whether the Board erred.

The parties each use the well-recognized steps from Chevron v. Natural Resources Defense Council, Inc., to support their arguments.^[7] They choose different paths on their way and arrive at different places. Appellant's thesis is straightforward: she argues that, under the plain language of the AMA, her client's September 2021 submission is a supplemental claim.^[8] And since it's a supplemental claim, she's entitled to a fee because her advocacy led to the grant of additional

benefits for her client.^[9] The Secretary argues that an increased rating claim is distinct from a supplemental claim-a point VA explained through its rulemaking. ^[10] He says that Chevron authorized VA to fill a legal gap and that his regulation-38 C.F.R. § 3.1-answers the legal question, and the Board's denial of past due fees was proper.^[11] We need not explore the Chevron paths the parties walk; we see no ambiguity in the statute. As explained below, the Court affirms the Board's decision because the plain statutory text shows that the September 2021 submission wasn't a supplemental claim-it was a new claim. ^[12] Moreover, this reading of the statute is supported by the relevant caselaw and a holistic reading of the AMA.

I. PROCEDURAL HISTORY

The Court reviews the procedural history first, which began when Mr. Lovier filed for service connection in April 2007 for a hip disability.^[13] In March 2008, VA granted him service connection for status post surgery avascular necrosis of femoral heads (bilateral hip disability), with a 0% rating.^[14] Appellant's law firm began representing Mr. Lovier and filed an NOD in March 2009, challenging the noncompensable rating.^[15] In November 2009, VA increased Mr. Lovier's rating to 10% for both his left and right hip, effective April 2007.^[16] Mr. Lovier continued to pursue a higher rating, and the Board remanded his claim in September 2013 and again in November 2017.^[17] Then in January 2018, appellant took over representing Mr. Lovier.^[18] The Board ultimately

denied Mr. Lovier's claim for a higher initial rating in December 2018.^[19] He didn't appeal, and the December 2018 decision became final.

Now jump forward a couple of years to where the legal questions at issue start to take shape. In February 2021, Mr. Lovier had hip surgery.^[20] In September 2021, appellant assisted Mr. Lovier in filing his Application For Disability Compensation and Related Compensation Benefits (VA Form 21-526EZ).^[21]

VA then scheduled Mr. Lovier for a VA compensation and pension (C&P) exam, which he attended in October 2021.^[22] Upon reviewing the evidence, VA determined that Mr. Lovier "filed a claim for increased evaluation that was received on September 20, 2021."^[23] In December 2021, VA granted a 100% rating for his left hip, effective from February to August 2021, based on his left hip replacement, and 30% afterward, leading to the award of $16,264.53 of past-due benefits to Mr. Lovier.^[24] VA notified appellant that it wasn't going to pay her any direct fees from Mr. Lovier's award because "VA never received a qualifying request to review [the December 2021 rating] decision."^[25] Appellant filed an NOD with that decision, and the Board's May 2022 decision followed.^[26]

II. LEGAL LANDSCAPE

A. Services of Agents and Attorneys Under 38 U.S.C. § 5904(c)(1)

Congress has consistently limited the fees that attorneys can charge when they represent veterans. Fee restrictions started with an 1862 law that prohibited attorneys from charging veterans more than $5 to help with their claims.^[27] That cap rose 2 years later, when Congress doubled the amount that an attorney could charge. This $10 fee limit remained the law for over a century, even

surviving a challenge at the Supreme Court in 1985 in Walters v. National Association of Radiation Survivors.^[28] The Walters decision said that "Congress' principal goal" with the fee limitation was "wanting the veteran to get the entirety of the award."^[29] The decision also confirmed that the fee limitation didn't violate the Due Process Clause of the Fifth Amendment.^[30]

At the time of the Walters decision, the sun was about to set on the so called "'splendid isolation'"^[31] between VA claims and judicial review. In 1988, Congress passed the Veterans' Judicial Review Act (VJRA)-which, on top of creating this Court-allowed attorneys to charge fees for work on a claim after the Board made a final decision in the case.^[32]

Then in 2006, Congress changed the rules again-this time permitting attorney fees for work performed before the Board's decision but after a claimant filed an NOD. ^[33] And most recently, under the AMA, Congress unlocked the gate earlier in the claims process with the newest version of § 5904-now prohibiting fees for work performed before the initial decision.^[34]

In updating the language of § 5904(c)(1), Congress altered the phrase "the date on which an [NOD] is filed with respect to the case" to instead say "the date on which a claimant is provided notice of the [AOJ's] initial decision . . . with respect to the case."^[35] But Congress didn't define or

elaborate on the term "initial decision" and retained the phrase "with respect to the case."^[36] The major difference to § 5904(c)(1) under the AMA is that an attorney can charge fees once a claimant receives notice of the initial decision.

The upshot: in incremental steps, Congress keeps altering the triggering event for when advocates can charge fees. Bit by bit, Congress has permitted advocates to charge fees earlier in the process, but it has retained limitations.^[37]

B. Caselaw Addressing "with respect to the case"

The Court doesn't interpret section 5904 fresh because there's a depth of legal understanding built into that statute. Although the AMA overhauled VA's claim and appeal system, it didn't overhaul the merits of all that came before it. Combined, there are a handful of cases from our Court and the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) that consider the language of section 5904 that predates the AMA. These cases help steer the Court's merits analysis into how to understand "with respect to the case" in section 5904. Recall that this phrase "with respect to the case" has remained a constant; it's one that Congress used both before and in the AMA. So given that decisive caselaw existed before the AMA, there was a settled understanding of what "with respect to the case" meant. And since there's a settled understanding of the phrase, the burden is on appellant to prove that it means something different under the AMA. In other words, since the language "with respect to the...