Sugrue v. Derwinski

Decision Date17 May 1994
Docket NumberNos. 483,D,686,s. 483
PartiesDaniel SUGRUE, Plaintiff-Appellant, v. Edward J. DERWINSKI, Secretary of Veterans Affairs, and S. Wohl, Robert J. Schmidt, John Does 1-X and Mary Does 1-X, the true names of the said Doe defendants being unknown to the plaintiff at this time, Defendants-Appellees. ockets 93-6137, 93-6139.
CourtU.S. Court of Appeals — Second Circuit

Kevin P. Quill, Long Island City, NY, for plaintiff-appellant.

Jennifer C. Boal, Asst. U.S. Atty. E.D.N.Y., Brooklyn, NY (Zachary W. Carter, U.S. Atty., E.D.N.Y., Robert L. Begleiter, Deborah B. Zwany, Asst. U.S. Attys., E.D.N.Y., of counsel), for defendants-appellees.

Before: MAHONEY and WALKER, Circuit Judges, and METZNER *, District Judge.

MAHONEY, Circuit Judge:

Plaintiff-appellant Daniel Sugrue appeals from a judgment entered January 4, 1993 in the United States District Court for the Eastern District of New York, I. Leo Glasser, Judge, that dismissed Sugrue's actions against the Department of Veterans Affairs 1 for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1), and against several named and unnamed employees of the VA (the "VA Employees") for failure to state a claim upon which relief can be granted pursuant to Fed.R.Civ.P. 12(b)(6). See Sugrue v. Derwinski, 808 F.Supp. 946 (E.D.N.Y.1992) (opinion supporting judgment), as amended by Sugrue v. Derwinski, No. CV-90-1972, slip op. at 7 (E.D.N.Y. Mar. 26, 1993). Sugrue's complaints against the VA and the VA Employees alleged that the defendants had violated his rights under the Fifth Amendment to the Constitution, the Privacy Act, 5 U.S.C. Sec. 552a, and the Freedom of Information Act (the "FOIA"), 5 U.S.C. Sec. 552, in determining his disability benefit award.

We affirm.

Background

This dispute stems from long term injuries sustained by Daniel Sugrue when he was held as a prisoner of war. During the Korean War, Sugrue, then a soldier in the United States Army (the "Army"), was a prisoner of war from April 1951, when he was taken captive, to August 1953, when he was released at the conclusion of that conflict. Sugrue was honorably discharged from the Army in 1953. At that time, an Army medical examination revealed that Sugrue suffered from "Parkinsonism" and "Anxiety Reaction." In that connection, a VA adjudication division rated him as thirty percent disabled.

In 1981, the VA advised former prisoners of war of legislation enabling them to obtain medical care at VA facilities. Id. On February 14, 1983, Sugrue availed himself of this service and underwent a medical examination at a VA facility by a neurologist retained by the VA. According to Sugrue, the neurologist determined that Sugrue, a lawyer, suffered from a neurological disorder resulting in near "total disability for work as an attorney."

Sugrue filed a claim with the VA based upon this diagnosis. By letter dated April 6, 1983, S. Wohl, one of the VA Employees, rejected Sugrue's claim on the ground that "the evidence d[id] not warrant any change" in the prior disability determination.

On April 5, 1984, Sugrue initiated an administrative appeal of this finding by filing with the VA a notice of disagreement challenging the VA's failure to raise his disability rating. See 38 U.S.C. 4005 (1988) (recodified as 38 U.S.C. Sec. 7105 (Supp. III 1991)). By letter dated April 11, 1984, Robert J. Schmidt (another of the VA Employees), a regional VA adjudication officer, invited Sugrue to undergo a neuropsychiatric examination. Following examinations by a psychiatrist and a neurologist, the VA increased Sugrue's disability rating to fifty percent. Sugrue continued to disagree with his disability rating, and pursued his case before the Board of Veterans Appeals (the "BVA"). After a hearing at which Sugrue's claim was presented by counsel, however, the BVA affirmed his fifty percent disability rating.

Sugrue then filed the instant actions, contending that the VA and the VA Employees violated (1) the Privacy Act, 5 U.S.C. Sec. 552a, as a result of the VA's failure to maintain its record regarding Sugrue "with accuracy, relevance, timeliness, and completeness, necessary to assure fairness to [Sugrue] in reaching its determination;" (2) the FOIA, 5 U.S.C. Sec. 552, in that "[Sugrue's] claim and defendants [sic] adverse determination thereof was [sic] affected by matter required to be published in the Federal Register and not so published;" (3) the Fifth Amendment guarantee of due process; and (4) the Fifth Amendment prohibition against the taking of private property for public use without just compensation.

The district court dismissed the complaints, for lack of subject matter jurisdiction as to the complaint against the VA, see Sugrue, 808 F.Supp. at 950, and for failure to state a claim as to the complaint against the VA Employees. See id. at 951. The district court also denied Sugrue's motion to amend his complaint against the VA to add the VA Employees as individual defendants. See id.

This appeal followed.

Discussion

38 U.S.C. Sec. 511 (Supp. III 1991) provides in pertinent part that:

(a) The Secretary [of Veterans Affairs] shall decide all questions of law and fact necessary to a decision by the Secretary under a law that affects the provision of benefits by the Secretary to veterans.... Subject to subsection (b), the decision of the Secretary as to any such question shall be final and conclusive and may not be reviewed by any other official or by any court, whether by an action in the nature of mandamus or otherwise.

(b) The second sentence of subsection (a) does not apply to--

(1) matters subject to section 502 of this title;

(2) matters covered by sections 1975 and 1984 of this title;

(3) matters arising under chapter 37 of this title; and

(4) matters covered by chapter 72 of this title.

Section 502 relates to judicial review of rules and regulations to which reference is made by 5 U.S.C. Sec. 552(a)(1) or 553 (regarding rules and regulations that federal agencies are required to promulgate by FOIA), but Sec. 502 review is available only in the Court of Appeals for the Federal Circuit. Sections 1975 and 1984 relate to civil actions regarding life insurance. Chapter 37 relates to housing and small business loans.

Chapter 72 relates to the United States Court of Veterans Appeals, an Article I court established in 1988 that has "exclusive jurisdiction to review decisions of the [BVA]." 38 U.S.C. Sec. 4052(a) (1988) (recodified as 38 U.S.C. Sec. 7252(a) (Supp. III 1991)). However, that jurisdiction is available only as to "any case in which a notice of disagreement is filed under section 4005 [now Sec. 7105] of title 38 ... on or after the enactment of [Public Law No. 100-687; i.e., November 18, 1988]." Veterans' Judicial Review Act--Veterans' Benefits Improvement Act of 1988, Pub.L. No. 100-687, Sec. 402, 102 Stat. 4105, 4122; see also Prenzler v. Derwinski, 928 F.2d 392, 393-94 (Fed.Cir.1991). As indicated earlier, Sugrue filed his notice of disagreement on April 5, 1984.

Accordingly, none of the exceptions stated in Sec. 511(b) apply in this case, and the governing rule is provided by Sec. 511(a)'s bar of review of the VA's determination of Sugrue's benefit level "by any court, whether by an action in the nature of mandamus or otherwise." As Judge Glasser correctly ruled, this language prevented the district court from exercising subject matter jurisdiction over Sugrue's claims against the VA. See Sugrue, 808 F.Supp. at 949-50.

Section 511(a) is designed to (1) ensure that benefits claims will not burden the courts and the VA with litigation, and (2) promote the adequacy and uniformity of complex veterans' benefits decisions. Johnson v. Robison, 415 U.S. 361, 369-70, 94 S.Ct. 1160, 1166-67, 39 L.Ed.2d 389 (1974). 2 In Johnson, the Court distinguished between suits challenging the constitutionality of the statutes underlying veterans programs, to which Sec. 511(a) does not apply (over which courts thus have jurisdiction), and actions of the VA under those statutes in determining qualification for benefits, to which Sec. 511(a) does apply (over which courts therefore lack jurisdiction). See Johnson, 415 U.S. at 367-74, 94 S.Ct. at 1165-69; Larrabee, 968 F.2d at 1500.

Sugrue's claims against the VA challenge the VA's denial of a certain level of benefits to Sugrue based upon a disputed disability rating. His complaints seek "to place plaintiff in the position he would have occupied but for the ... unlawful acts and conduct [of the VA and the VA employees] and mak[e] him whole for all entitlements and benefits he would have received but for [said] unlawful acts and conduct."

Although Sugrue's complaints invoke provisions of the Fifth Amendment and are styled in part as constitutional actions, the courts do not acquire jurisdiction to hear challenges to benefits determinations merely because those challenges are cloaked in constitutional terms. See Pappanikoloaou v. Administrator of Veterans Admin., 762 F.2d 8, 9 (2d Cir.) (per curiam) ("one may not circumvent Sec. 11(a) by seeking damages on a constitutional claim arising out of a denial of benefits") (collecting cases), cert. denied, 474 U.S. 851, 106 S.Ct. 150, 88 L.Ed.2d 124 (1985); see also Larrabee, 968 F.2d at 1500 (Sec. 511(a) "precludes judicial review of non-facial constitutional claims") (collecting cases). Similarly, neither the Privacy Act nor the FOIA may be used as a rhetorical cover to attack VA benefits determinations.

We turn to Sugrue's claims against the VA Employees. In accordance with Bush v. Lucas, 462 U.S. 367, 103 S.Ct. 2404, 76 L.Ed.2d 648 (1983), and Schweiker v. Chilicky, 487 U.S. 412, 108 S.Ct. 2460, 101 L.Ed.2d 370 (1988), we decline, as did the district court, to find that a cause of action lies against the VA Employees in their individual capacities.

In Bush, an employee of the National Aeronautics and Space Administration sued the Director of the George C. Marshall...

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