Veteranclaims’s Blog

January 16, 2017

Single Judge Application, Sanchez-Benitez v. Principi, 13 Vet.App. 282, 285 (1999); section 1117(a)(1); Not Applicable to Persian Gulf veteran; “totality of the circumstances” test;

Excerpt from decision below:

a. Consistency with Judicial Precedent
“Under the “totality of the circumstances” test, the Court must also determine whether the Secretary’s interpretation of a statute is “wholly unsupported by . . . its plain language.” Patrick v. Shinseki, 668 F.3d 1325, 1333 (Fed. Cir. 2011). Even where this Court has “previously upheld the VA’s erroneous interpretation of [a statute, that] does not . . . resolve the substantial justification inquiry.” Butts, __ Vet.App. at __, 2016 WL 3165786 at *6 (quoting Patrick, 668 F.3d at 1332). The Federal Circuit held that, where “the government interprets a statute in a manner that is contrary to its plain language . . . , it will prove difficult to establish substantial justification.” Patrick, 668 F.3d at 1330-31. Moreover, the Secretary’s position will not be substantially justified when he fails to apply applicable, existing law. Groves v. Shinseki, 23 Vet.App. 90, 95 (2009).
The Secretary avers that the Board’s October 2012 decision was based on existing law, specifically, Sanchez-Benitez v. Principi, which held that “pain alone, without a diagnosed or identifiable underlying malady or condition, does not in and of itself constitute a disability for which service connection may be granted.” 13 Vet.App. 282, 285 (1999), dismissed in part, vacated in part, and remanded, 259 F.3d 1356 (Fed. Cir. 2001). Although, the Board did rely on Sanchez-Benitez to deny Mr. Smith’s claim, Mr. Sanchez-Benitez was not a Persian Gulf veteran and, therefore, was not eligible for consideration under section 1117(a)(1). Accordingly, Sanchez-Benitez is not controlling precedent in the case of a Persian Gulf veteran. Because Mr. Smith is, the Board erred by failing to consider all “applicable provisions of law and regulation,” namely section 1117. See 38 U.S.C. §§ 7104(a), (d)(1). The Court finds the Secretary’s argument unpersuasive. ”

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Designated for electronic publication only
UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS

DAVID W. SMITH, APPELLANT,
v.
ROBERT A. MCDONALD, SECRETARY OF VETERANS AFFAIRS, APPELLEE.
Before HAGEL, Chief Judge.
O R D E R
Note: Pursuant to U.S. Vet. App. R. 30(a), this action may not be cited as precedent.
Before the Court is David W. Smith’s November 26, 2014, application 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 $11,139.77. The Court has jurisdiction pursuant to 28 U.S.C. § 2412(d)(2)(F) to award reasonable attorney fees and expenses. In this case, Mr. Smith filed his EAJA application within the 30-day time period set forth in 28 U.S.C. § 2412(d)(1)(B), and his application satisfies that section’s content requirements. See Scarborough v. Principi, 541 U.S. 401, 408 (2004). The Secretary filed a response in which he argues that Mr. Smith is not a prevailing party under 28 U.S.C. § 2412(d)(1)(A) and, therefore, is not entitled to EAJA fees. Also, the Secretary argues that his position was substantially justified.
On May 22, 2015, the Court stayed proceedings in this matter pending the en banc Court’s decision in Butts v. McDonald, No. 14-3019. On June 3, 2016, the Court issued its decision in Butts. __ Vet.App. __, No. 14-3019E, 2016 WL 3165786 (June 3, 2016) (en banc). Accordingly, the Court will lift the stay of proceedings in this case and consider Mr. Smith’s EAJA application.
Because the Court concludes that Mr. Smith is a prevailing party and the Secretary’s position was not substantially justified, and because the Secretary does not contest any other aspect of Mr. Smith’s application, the Court will grant Mr. Smith’s EAJA application in full.
I. BACKGROUND
On October 18, 2012, the Board of Veterans’ Appeals (Board) issued a decision denying Mr. Smith entitlement to benefits for a lumbar spine disability for lack of a diagnosed disorder. Mr. Smith appealed that decision to the Court. The parties submitted their briefs, and the case was
submitted to a panel of the Court for decision. On July 24, 2014, the Court granted Mr. Smith’s unopposed motion to stay proceedings in the matter pending the disposition of Joyner v. McDonald, 766 F.3d 1393 (Fed. Cir. 2014), at the United States Court of Appeals for the Federal Circuit (Federal Circuit). On September 12, 2014, the Federal Circuit issued its decision in Joyner and, shortly thereafter, the Court lifted the stay of proceedings in Mr. Smith’s case.
On September 18, 2014, the parties filed a joint motion to stay proceedings pending a joint resolution, which the Court granted. On October 30, 2014, the parties filed a joint motion for remand. The parties agreed that the October 2012 Board decision should be vacated and remanded because the “Board’s decision does not comply with the law, insofar as it did not address whether [Mr. Smith] had an undiagnosed illness under 38 U.S.C. § 1117 and whether he satisfies the remaining elements under that section.” Joint Motion for Remand at 1. Specifically, the parties agreed that the Board failed to consider whether Mr. Smith’s low back pain could be an undiagnosed illness under section 1117. The parties stated that “[section] 1117 affords compensation to a claimant who exhibits objective indications of a qualifying chronic disability, which include both objective evidence and ‘other non-medical indicators.'” Id. at 3 (quoting Joyner, 766 F.3d at 1395). The following day, the Court granted the parties’ joint motion for remand. Mr. Smith’s EAJA application followed.
II. PARTIES’ ARGUMENTS
Mr. Smith asserts that he is a prevailing party because the Court vacated and remanded the October 2012 Board decision based on the parties’ joint motion for remand in which “the Secretary conceded that the Board’s decision did not comply with the law.” EAJA Application at 8. He also asserts that the Secretary’s administrative position was not substantially justified based on the Secretary’s concession of the Board’s noncompliance with law in the joint motion for remand. He further asserts that the Secretary’s litigation position was not substantially justified because the Secretary chose to defend the Board’s decision, which had no reasonable basis in fact or law.
The Secretary responded, arguing that Mr. Smith is not a prevailing party because the joint motion for remand “was not based on a concession of error, but rather was based on the [Federal Circuit’s] holding in Joyner, which brought about a change in law.” Secretary’s Response at 5. The Secretary further argues that his position was substantially justified because “the change in law which brought about the remand occurred subsequent to the Board’s decision.” Id. at 6.
In reply, Mr. Smith argues that the joint motion for remand was plainly based on a concession of error, namely, that the parties “agreed that ‘the Board’s decision does not comply with the law.'” Appellant’s Reply at 3 (quoting Joint Mot. for Remand at 1). He further argues that the Secretary’s position is not substantially justified because the Joyner decision “did not create new law; rather, it simply restated the plain language of the statute.” Id. at 6.
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III. ANALYSIS
A. Prevailing Party Status
1. Concession of Error
EAJA fees may be awarded only when the applicant is a prevailing party. See 28 U.S.C. §§ 2412(d)(1)(A)-(B), (2)(B); Comm’r, INS v. Jean, 496 U.S. 154, 160 (1990) (“In EAJA cases, the court first must determine if the applicant is a ‘prevailing party’ by evaluating the degree of success obtained.”); see also Scarborough, 541 U.S. at 407-08. To qualify as a prevailing party, the appellant must “receive at least some relief on the merits of his claim.” Sumner v. Principi, 15 Vet.App. 256, 261 (2001) (en banc) (quoting Buckhannon Bd. and Care Home, Inc. v. W. Va. Dep’t of Health and Human Res., 532 U.S. 598, 603 (2001)). “[W]here the plaintiff secures a remand requiring further agency proceedings because of alleged error by the agency, the plaintiff qualifies as a prevailing party . . . without regard to the outcome of the agency proceedings where there has been no retention of jurisdiction by the court.” Thompson v. Shinseki, 682 F.3d 1377, 1381 (Fed. Cir. 2012) (quoting Former Employees of Motorola Ceramic Prods. v. United States, 336 F.3d 1360, 1366 (Fed. Cir. 2003)) (emphasis added). However, the remand must be “either explicitly or implicitly predicated upon administrative error.” Gurley v. Peake, 528 F.3d 1322, 1327 (Fed. Cir. 2008) (quoting Davis v. Nicholson, 475 F.3d 1360, 1364 (Fed. Cir. 2007)); Zuberi v. Nicholson, 19 Vet.App. 541, 546-547 (2006).
A joint motion for remand is predicated on administrative error when it “contains an explicit or implicit admission of error” and may be sufficient to confer prevailing-party status on the appellant. Butts, __ Vet.App. at __, 2016 WL 3165786 at *3; Thompson v. Shinseki, 24 Vet.App. 176, 177 (2010), aff’d, 682 F.3d 1377 (Fed. Cir. 2012); see also Sumner, 15 Vet.App. at 261. The Court “must look to the words of the motion” to determine whether a joint motion for remand contains an admission of error. Butts, __ Vet.App. at __, 2016 WL 3165786 at *3 (quoting Briddell v. Principi, 16 Vet.App. 267, 272 (2002)). Moreover, despite an “artfully worded” remand that omits the word “error,” Kelly v. Nicholson, 463 F.3d 1349, 1355 (Fed. Cir. 2006), the Court will find that remand is “predicated upon administrative error” when the Secretary concedes that a Board decision failed to apply or comply with an applicable regulation. Butts, __ Vet.App. at __, 2016 WL 3165786 at *5 (discussing Zuberi, 19 Vet.App. at 546-47); Schafrath v. Derwinski, 1 Vet.App. 589, 593 (1991); see 38 U.S.C. § 7104(a).
Here, the parties explicitly stated in their joint motion for remand that “the Board’s decision does not comply with the law, insofar as it did not address whether [Mr. Smith] had an undiagnosed illness under 38 U.S.C. § 1117 and whether he satisfies the remaining elements under [section] 1117.” Joint Mot. for Remand at 1 (emphasis added). Because the joint motion for remand contains an explicit admission of error, the Court finds, contrary to the Secretary’s assertion, that the remand was “predicated on administrative error” on the part of the Board. See Butts, __ Vet.App. at __, 2016 WL 3165786 at *5.
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2. Change in the Law
The Secretary also argues that Mr. Smith is not a prevailing party because the joint motion for remand was based on an intervening change in law, articulated in Joyner. Akers v. Nicholson, 409 F.3d 1356, 1359 (Fed. Cir. 2005) (holding that a remand due to an intervening Court decision does not render the appellant a prevailing party for EAJA purposes).
Here, as in Butts, the basis for the joint motion for remand was not a subsequent change in the law, such that Akers would control, but an expressly conceded administrative error. See Butts, __ Vet.App. at __, 2016 WL 3165786 at *5 (stating that a joint motion for remand explicitly concedes error when it “specifically states that remand is warranted because the Board decision ‘does not comply with the requirements of'” an applicable regulation, despite the motion discussing a similar case (quoting Joint Mot. for Remand at 2) (emphasis omitted)). In Akers, the remand was based on an intervening change in the law, specifically Gordon v. Principi, 15 Vet.App. 124 (2001), which offered the appellant new ways to settle her debt.
Here, however, the Federal Circuit held that “the plain language of [section] 1117 makes clear that pain . . . may establish an undiagnosed illness that causes a qualifying chronic disability.” Joyner, 766 F.3d at 1395 (emphasis added). In other words, the Federal Circuit was not setting forth a new interpretation, but merely stating what section 1117 has always meant. See Patrick v. Nicholson, 242 Fed. App’x 695, 698 (Fed. Cir. 2007) (“[O]ur interpretation of a statute is retrospective in that is explains what the statute has meant since the date of enactment . . . [t]hus, our interpretation . . . did not change the law but explained what [the statute] has always meant.”); see also Rivers v. Roadway Express, 511 U.S. 298, 312-12 (1994).
Moreover, the Secretary’s position before this Court that Joyner represents a change in the law is belied by his concession before the Federal Circuit “that pain as a manifestation of an undiagnosed illness can constitute a disability under [section] 1117.” Joyner, 766 F.3d at 1395. Therefore, the Court concludes that the Secretary’s assertion that the remand was based on a change in law in Joyner is unpersuasive.
In light of this discussion, the Court finds that Mr. Smith is a prevailing party. See Butts, __ Vet.App. at __, 2016 WL 3165786 at *5; Thompson, 24 Vet.App. at 178.
B. Substantial Justification
1. Administrative Stage
The Court will award attorney fees to a prevailing party “unless the Court finds that the position of the United States was substantially justified” or that the other statutory requirements were not met. 28 U.S.C. § 2412(d)(1)(A); Cycholl v. Principi, 15 Vet.App. 355, 359 (2001). In this case, Mr. Smith has alleged, pursuant to 28 U.S.C. § 2412(d)(l)(B), that the Secretary’s position was not substantially justified; therefore, the Secretary “has the burden of proving that [his] position was
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substantially justified [at both the administrative and litigation stages] . . . to defeat the appellant’s EAJA application.” Vaughn v. Gober, 14 Vet.App. 92, 95 (2000) (citing Stillwell v. Brown, 6 Vet. App. 291, 301 (1994)); see Locher v. Brown, 9 Vet.App. 535, 537 (1996); ZP v. Brown, 8 Vet.App. 303, 304 (1995).
To determine whether the Secretary’s position was substantially justified, the Court must determine whether the Secretary’s position was, in fact and law, reasonable based upon the “totality of the circumstances.” Stillwell, 6 Vet.App. at 302. The Court must consider, among other factors, the “state of the law at the time the position was taken” and “consistency with judicial precedent and VA policy.” Smith v. Principi, 343 F.3d 1358, 1363 (Fed. Cir. 2003); see Butts, __ Vet.App. at __, 2016 WL 3165786 at *5 (citing Stillwell, 6 Vet.App. at 302). Under the “totality of the circumstances” test, the Secretary may be substantially justified when the basis for the remand arises from a change of law brought about by a precedential decision of the Court. See Olney v. Brown, 7 Vet.App. 160, 162 (1994).
a. Consistency with Judicial Precedent
Under the “totality of the circumstances” test, the Court must also determine whether the Secretary’s interpretation of a statute is “wholly unsupported by . . . its plain language.” Patrick v. Shinseki, 668 F.3d 1325, 1333 (Fed. Cir. 2011). Even where this Court has “previously upheld the VA’s erroneous interpretation of [a statute, that] does not . . . resolve the substantial justification inquiry.” Butts, __ Vet.App. at __, 2016 WL 3165786 at *6 (quoting Patrick, 668 F.3d at 1332). The Federal Circuit held that, where “the government interprets a statute in a manner that is contrary to its plain language . . . , it will prove difficult to establish substantial justification.” Patrick, 668 F.3d at 1330-31. Moreover, the Secretary’s position will not be substantially justified when he fails to apply applicable, existing law. Groves v. Shinseki, 23 Vet.App. 90, 95 (2009).
The Secretary avers that the Board’s October 2012 decision was based on existing law, specifically, Sanchez-Benitez v. Principi, which held that “pain alone, without a diagnosed or identifiable underlying malady or condition, does not in and of itself constitute a disability for which service connection may be granted.” 13 Vet.App. 282, 285 (1999), dismissed in part, vacated in part, and remanded, 259 F.3d 1356 (Fed. Cir. 2001). Although, the Board did rely on Sanchez-Benitez to deny Mr. Smith’s claim, Mr. Sanchez-Benitez was not a Persian Gulf veteran and, therefore, was not eligible for consideration under section 1117(a)(1). Accordingly, Sanchez-Benitez is not controlling precedent in the case of a Persian Gulf veteran. Because Mr. Smith is, the Board erred by failing to consider all “applicable provisions of law and regulation,” namely section 1117. See 38 U.S.C. §§ 7104(a), (d)(1). The Court finds the Secretary’s argument unpersuasive.
b. Reliance on Then-current Law
The Secretary further asserts that the issue of whether pain could be evidence of a qualifying chronic disability under section 1117 had not yet been addressed by the Court when the Board rendered its decision in Mr. Smith’s case. Secretary’s Resp. at 6-7. In support of that argument, the
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Secretary cites Sanchez-Benitez, which appears to the Court to contradict the Secretary’s use of Sanchez-Benitez in his earlier argument that his position at the Board level was substantially justified because it was consistent with judicial precedent. The Court, however, need not reconcile this apparent contradiction because, regardless of whether the Court had addressed the question, the Board failed to follow a 1998 VA General Counsel opinion, by which it was bound, that clearly explains how and to whom section 1117 applies. VA Gen. Coun. Prec. 8-98, ¶¶ 3-4 (Aug. 3, 1998) (explaining that the plain language of section 1117, along with 38 C.F.R. § 3.317, “mandates compensation to a Persian Gulf veteran” with a disability that “cannot be attributed to any known clinical diagnosis,” including “joint pain”); see 38 U.S.C. § 7104(c). The General Counsel opinion makes clear that the Board was required to consider and apply section 1117 in Mr. Smith’s case, but the Board failed to do so.
In sum, the Court finds that the Secretary’s position during the administrative stage was not substantially justified because, under the “totality of the circumstances” test, the relevant factors weigh heavily against the Secretary. Indeed, the Secretary’s arguments do not overcome the fact that the Board failed to apply an applicable, existing law, section 1117, despite binding guidance from the VA General Counsel. The Court finds that the Secretary has not met his burden of demonstrating that he was substantially justified at the administrative stage. See Olney, 7 Vet.App. at 162.
2. Litigation Stage
Because the Secretary has not met his burden of demonstrating that he was substantially justified at the administrative stage, the Court need not address whether he was substantially justified at the litigation stage. See Cycholl, 15 Vet.App. at 361.
C. Reasonableness of Fees
The Secretary does not contest the reasonableness of the fees requested in Mr. Smith’s EAJA application, and the Court does not find the fees unreasonable on their face. Accordingly, the Court will grant Mr. Smith’s EAJA application in full.
IV. CONCLUSION
Upon consideration of the foregoing, it is
ORDERED that the stay of proceedings is lifted. It is further
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ORDERED that Mr. Smith’s November 26, 2014, EAJA application is GRANTED in full, in the amount of $11,139.77.
DATED: July 7, 2016 BY THE COURT:
/s/ Lawrence B. Hagel
LAWRENCE B. HAGEL Chief Judge
Copies to:
Patrick Berkshire, Esq.
VA General Counsel (027)

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