Splane v. West Jr.

Page 1058

216 F.3d 1058 (Fed. Cir. 2000)

EDWARD T. SPLANE and PARALYZED VETERANS OF AMERICA, Petitioners, v. Togo D. West, Jr., SECRETARY OF VETERANS AFFAIRS, Respondent.

99-7078

United States Court of Appeals for the Federal Circuit

DECIDED: June 23, 2000

Appealed from: Department of Veterans Affairs

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

Linda E. Blauhut, Paralyzed Veterans of America, of Washington, DC, argued for petitioners. With her on the brief was Michael P. Horan.

Elizabeth M. Hosford, Trial Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC, argued for respondent. On the brief were David W. Ogden, Acting Assistant Attorney General; David M. Cohen, Director; Kathryn A. Bleecker, Assistant Director; and Paul M. Faver, Attorney. Of counsel on the brief were Richard J. Hipolit, Acting Assistant General Counsel; and David J. Barrans, Staff Attorney, Department of Veterans Affairs, Washington, DC.

Before MICHEL, CLEVENGER, and RADER, Circuit Judges.

CLEVENGER, Circuit Judge.

Petitioners, Edward T. Splane and the Paralyzed Veterans of America, seek review of a precedential opinion issued by the Department of Veterans Affairs ("DVA") general counsel on October 2, 1998 ("VAOPGCPREC 14-98"). In that opinion, the general counsel responded to a request from the Chairman of the Board of Veterans' Appeals ("Board") for guidance concerning three questions of law presented in an appeal filed by Mr. Splane. Petitioners seek to have VAOPGCPREC 14-98 declared invalid on the grounds that the opinion suffers from a number of procedural and substantive defects. We disagree with Petitioners that VAOPGCPREC 14-98 is procedurally defective under either the Administrative Procedure Act ("APA") or the Freedom of Information Act ("FOIA"). However, because we agree that VAOPGCPREC 14-98 contains a statutory interpretation that is not in accordance with law, we vacate that portion of the opinion.

I

Splane, a veteran, appealed his claim for service connection for multiple sclerosis ("MS") to the Board. As part of his substantive case, Splane relied on 38 U.S.C. § 1112(a) (1994), which states that:

in the case of any veteran who served for ninety days or more during a period of war . . . multiple sclerosis developing a 10 percent degree of disability or more within seven years from the date of separation from such service . . . shall be considered to have been incurred in or aggravated by such service, notwithstanding there is no record of evidence of such disease during the period of service.

Accordingly, Splane sought to show that he had developed an MS-related disability of at least 10 percent within 7 years of being discharged from the service.

On April 7, 1995, the Board denied Splane's claim, finding that Splane had exhibited symptoms of MS in high school, before entry into service. The Board concluded that, although MS was present to a compensable degree within the 7-year presumptive period following discharge, Splane was not entitled to the statutory presumption of incurrence or aggravation because his condition predated his entry into the service and was not aggravated thereby. Splane appealed the Board's decision to the Court of Appeals for Veterans Claims ("CAVC").

On May 7, 1997, Splane and counsel for the DVA filed a joint motion for remand for further evidentiary development and a supplemental opinion. The joint motion for remand requested that the Board order a new independent medical expert ("IME") opinion with regard to the severity of Splane's MS during the 7-year presumptive period. The remand motion also requested that the Board remove, temporarily, a previous Board medical advisor's opinion ("BMAO") from Splane's record during the IME's evaluation, or provide an explanation as to why Splane would not be prejudiced by the IME's knowledge of the earlier BMAO. Finally, the Board was requested to consider whether the presumption of aggravation, provided under 38 U.S.C. § 1112(a)(4), is applicable where the facts show that a veteran exhibited symptoms of MS before entering the service. The joint remand motion was granted on May 8, 1997.

On remand, and before any arguments were heard, the Chairman of the Board requested an opinion from DVA's general counsel on legal issues involved in Splane's case. In response to the Board's request, the DVA general counsel issued precedential opinion VAOPGCPREC 14-98, dated October 2, 1998, a synopsis of which was published in the Federal Register on October 22, 1998. See 63 Fed. Reg. 56,705 (Oct. 22, 1998). The opinion concluded that 38 U.S.C. § 1112(a) does not establish a presumption of aggravation for a chronic disease that existed before entry into the service. It further concluded that a document in a veteran's file could be temporarily removed for the purpose of obtaining an "untainted" IME opinion. Finally, it concluded that the requirement of 38 U.S.C. § 7109(c), that the Board "furnish the claimant with a copy of [an IME] opinion when it is received by the Board," is satisfied if a copy of the opinion is delivered to the claimant's authorized representative.

On March 5, 1999, Splane's counsel requested in writing that the DVA general counsel withdraw VAOPGCPREC 14-98, arguing that it was not contemplated by the joint remand agreement. The general counsel denied this request. Thereafter, Splane filed the present petition for review, joined by the Paralyzed Veterans of America. In the meantime, Splane petitioned the CAVC for a writ of mandamus to reinstate his appeal to that court pending the outcome of the present challenge; however, that petition was denied.

We have jurisdiction over this petition pursuant to 38 U.S.C. § 502 (1994), which states: "An action of the Secretary to which section 552(a)(1) or 553 of title 5 (or both) refers . . . is subject to judicial review [which] may be sought only in the United States Court of Appeals for the Federal Circuit." The action now being challenged is the creation and publication of an agency rule--in the form of a precedential general counsel opinion--which falls under the ambit of sections 552(a)(1) and 553. Accordingly, our jurisdiction in this case is proper.

II

Petitioners challenge the procedural correctness of the general counsel's opinion, as well as its substance. Procedurally, Petitioners argue that VAOPGCPREC 14-98 is a "legislative rule," subject to the notice and comment rulemaking requirements of 5 U.S.C. § 553 (1994), rather than an interpretative rule that is exempt from notice and comment rulemaking procedures. Petitioners also argue that the DVA failed to comply with 5 U.S.C. § 552(a)(1) by not publishing the entire text of VAOPGCPREC 14-98 in the Federal Register.¹ Finally, Petitioners argue that the Board lacked statutory authority to request an opinion of the DVA general counsel that was determinative in a pending individual case. Substantively, Petitioners argue that VAOPGCPREC 14-98 contradicts the statutes it purports to interpret, particularly 38 U.S.C. §§ 1112(a)(4) and 7109.

A

Petitioners first argue that VAOPGCPREC 14-98 is procedurally defective because it was not issued in accordance with APA notice and comment rulemaking procedures. See 5 U.S.C. § 553 (1994). This argument is based on the assumption that VAOPGCPREC 14-98 is a "legislative" rule rather than an "interpretive" rule. The distinction is important because the APA exempts from notice and comment rulemaking any "interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice." 5 U.S.C. § 553(b)(A) (1994).

We have explained the distinction between substantive (i.e., legislative) rules and interpretive rules as follows:

"[S]ubstantive rules" [are] those that effect a change in existing law or policy or which affect individual rights and obligations. "Interpretive rules," on the other hand, clarify or explain existing law or regulation and are exempt from notice and comment under section 553(b)(A). . . . "[A]n interpretive statement simply indicates an agency's reading of a statute or a rule. It does not intend to create new rights or duties, but only reminds affected parties of existing duties."

Paralyzed Veterans of America v. West, 138 F.3d 1434, 1436 (Fed. Cir. 1998) (quoting Orengo Caraballo v. Reich, 11 F.3d 186, 195 (D.C. Cir. 1993)) (other citations omitted). With this guidance in mind, we must decide whether VAOPGCPREC 14-98 is essentially legislative or interpretive in nature. We conclude that the opinion is essentially interpretive because it represents the agency's reading of statutes and rules rather than an attempt to make new law or modify existing law.

Each section of the opinion begins with the text of the relevant statute, e.g., 38 U.S.C. § 1112(a), and the DVA's corresponding regulation, e.g., 38 C.F.R. §§ 3.307(a), (c). The opinion then proceeds to interpret the meaning of the statute with respect to the specific question presented, invoking the traditional rules of statutory interpretation, including textual and contextual analysis and a study of the legislative history. Notably, the opinion does not engage in the type of "policy analysis" one would expect in the rulemaking context, such as weighing the pro's and con's of one course of action versus another. Finally, the opinion makes clear, throughout its text, that the agency is engaging in statutory interpretation, rather than "gap filling" or an exercise of its rulemaking power. See, e.g., VAOPGCPREC 14-98 at 3 ("we conclude that the regulation represents a proper interpretation of section 1112(a)" (emphasis added)). The D.C. Circuit has recognized that "an agency's characterization of its own action, while not decisive, is a factor [to] consider . . . ." American Hosp. Ass'n v. Bowen, 834 F.2d 1037, 1047 (D.C. Cir. 1987).

Petitioners argue, however, that VAOPGCPREC 14-98 must be deemed legislative in nature because it was...