Stanley v. Principi, 01-7017.

• Decision Date: 14 March 2002
• Docket Number: No. 01-7017.,01-7017.
• Citation: 283 F.3d 1350
• Parties: James W. STANLEY, Jr., Claimant-Appellant, v. Anthony J. PRINCIPI, Secretary of Veterans Affairs, Respondent-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

283 F.3d 1350

James W. STANLEY, Jr., Claimant-Appellant, v. Anthony J. PRINCIPI, Secretary of Veterans Affairs, Respondent-Appellee.

No. 01-7017.

United States Court of Appeals, Federal Circuit.

March 14, 2002.

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James W. Stanley, Jr., of North Little Rock, Arkansas, pro se.

J. Reid Prouty, Attorney, Civil Division, Commercial Litigation Branch, Department of Justice, of Washington, DC, argued for respondent-appellee. On the brief were Stuart E. Schiffer, Acting Assistant Attorney General; David M. Cohen, Director; Bryant G. Snee, Assistant Director; and Marian E. Sullivan, Trial Attorney. Of counsel on the brief were Donald E. Zeglin, Deputy Assistant General Counsel; and Michael J. Timinski, Attorney, Department of Veterans Affairs, of Washington, DC.

Before MAYER, Chief Judge, RADER, and DYK, Circuit Judges.

DYK, Circuit Judge.

This case involves a claim for attorneys' fees pursuant to 38 U.S.C. § 5904(c), which limits fees to services provided after the "Board of Veterans' Appeals first makes a final decision in the case." 38 U.S.C. § 5904(c)(1). We conclude that the statute was designed to allow attorneys' fees, after the initial claims proceeding, in connection with proceedings to reopen a claim on the grounds of new and material evidence, 38 U.S.C. § 5108, or clear and unmistakable error, 38 U.S.C. § 5109(A). We also hold that under 38 U.S.C. § 5904(c), there has been another final decision in connection with proceedings to reopen a claim after there has been a final Board of Veterans' Appeals ("Board" or "BVA") decision on a particular issue in the course of the reopening proceeding. We accordingly vacate the decision of the Court of Appeals for Veterans Claims and remand to that court for further proceedings.

BACKGROUND

Kenneth Thurman, a veteran, filed a claim with the Veterans' Administration ("VA")¹ for service connection of a cervical spine disability. The Regional Office ("RO") in New Orleans, Louisiana denied this claim in August 1986. Because Mr. Thurman did not appeal this decision, it became final one year later. See 38 U.S.C. § 7105(b)(1) and (c) (2000); 38 C.F.R. § 20.302(a) (2001). In a January 1990 rating decision, the Little Rock, Arkansas RO denied Mr. Thurman's application to reopen his claim for the cervical spine injury on the ground of no new and material evidence, leading Mr. Thurman to file a notice of disagreement with that decision in July 1990.

In August 1994, Mr. Thurman employed appellant, James W. Stanley, Jr., to represent him in his claims for veterans' benefits. Mr. Thurman and Mr. Stanley signed a retainer agreement in August 1994, which was also filed with the Board. This retainer agreement provided:

Client agrees to pay a fee of 25% retroactive benefits in connection with the Client's claim with the Department of Veterans Affairs. It is understood this is a contingent fee and Client will only owe James W. Stanley, Jr. in the event [he] receives a favorable decision on the claim at any level of the proceedings.²

A hearing was held before the RO in Little Rock, Arkansas on May 1, 1995, where Mr. Stanley presented evidence in connection with a request to reopen Mr. Thurman's previously denied claim for service connection of his cervical spine injury. Mr. Thurman appealed the January 1990 RO rating decision denying his application to reopen his cervical spine injury claim. In March 1996, the Board concluded that "new and material evidence has been submitted to reopen a claim for service connection" for the cervical spine injury, and remanded in order to allow Mr. Thurman's claim to be further reviewed by the RO after Mr. Thurman had been examined by a neurosurgical specialist. The Board did not address the claim for total disability for unemployability ("TDIU").

To comply with the Board's remand order, on June 12, 1996, there was another hearing before the Little Rock, Arkansas RO reviewing the evidence associated with Mr. Thurman's cervical spinal disorder. At this hearing, Mr. Stanley also indicated that he was "fil[ing] today a claim for total disability for unemployability [TDIU] purposes contending that all of [Mr. Thurman's] disabilities that he contends or that have already been found to be service connected render him unemployable." On September 10, 1996, the RO granted service connection for the cervical spine injury effective July 27, 1989, and entitlement to individual unemployability or TDIU effective June 12, 1996.

On October 22, 1996, Mr. Stanley and Mr. Thurman signed a second fee agreement, which they filed with the Board in November 1996. This fee agreement provided for a contingent fee of $13,821, which equaled 25% of the past-due benefits awarded to Mr. Thurman in September 1996 for residuals of his cervical spine injury. In a December 1996 letter, Mr. Stanley indicated that "[t]here was a final BVA decision on Mr. Thurman's claim for cervical disorder dated [March 1996]," and that he was "not going to charge a fee for the issue of ... TDIU unless and until [the] BVA renders a final ruling."

In May 1997, the Board raised the issue of Mr. Stanley's eligibility for payment of attorneys' fees sua sponte and noted that 38 C.F.R. § 20.609(h) requires attorneys' fees be paid out of "past-due benefits awarded as a result of a successful appeal to the Board ... or an appellate court or as a result of a reopened claim before [the Department of Veterans Affairs] following a prior denial of such benefits by the Board ... or an appellate court." In re Fee Agreement of Stanley, No. 97-08-640, slip op. at 4 (Bd.Vet.App. May 12, 1997) ("Stanley I"). Relying on 38 U.S.C. § 5904(c)(1) and 38 C.F.R. § 20.609(c), the Board stated that there also needed to be a final decision on the issue involved in the case. The Board concluded that although "the Board's March 1996 decision was favorable as to [reopening of a prior unappealed denial of service connection for a cervical spine disorder], it cannot be deemed to constitute a successful appeal to the Board on ... the issue of entitlement to service connection for a cervical spine disability, nor can it be deemed to constitute a `final decision' on the `issue ... involved' by the Board...." Id. Accordingly, the Board decided that Mr. Stanley had not satisfied the criteria for payment of attorneys' fees from past-due benefits.

Mr. Stanley summarized his claim for attorneys' fees in his February 26, 1998, letter to the Department of Veterans Affairs, Office of the Chief Counsel. In this letter, Mr. Stanley urged that he could charge fees on the cervical spine disorder beginning with the work he completed after the March 1996 BVA decision. He further claimed that the failure of the Board to adjudicate the TDIU issue constituted a de facto final decision on the TDIU issue, allowing him to charge fees on this claim from the time it was first raised on June 12, 1996. He reiterated these contentions in a May 1998 letter.

In October 1998, the Board found that there had been no final Board decision in March 1996 on either the cervical spine or TDIU claims. In re Fee Agreement of Stanley, No. 98-10 383, slip op. at 10, 12 (Bd.Vet.App. Oct. 27, 1998) ("Stanley II"). Consequently, no fee could be charged for Mr. Stanley's representation of Mr. Thurman. Id. at 15.

Mr. Stanley appealed to the Court of Appeals for Veterans Claims. The Court of Appeals for Veterans Claims identified the issue for review as whether there had been a final Board decision in March 1996 with respect to Mr. Thurman's claims for a cervical spine disorder and TDIU. The Court of Appeals for Veterans Claims concluded that there had been no final decision in March 1996 with respect to either claim because the Board had remanded Mr. Thurman's claim for a cervical spine disorder to the RO, and "[a] remand by the Board to the RO does not constitute a final decision by the BVA." Stanley v. Gober, No. 98-2322, slip op. at 4 (Vet.App. Aug.29, 2000) ("Stanley III"). The Court of Appeals for Veterans Claims further stated:

The TDIU issue was dependent on and inextricably intertwined with the appellant's claim regarding his cervical spine disability, and was decided by the RO along with that claim. Since we have held that there is no final BVA decision regarding the cervical spine claim, there is also no final BVA decision regarding the TDIU claim.

Id. at 5. Accordingly, the Court of Appeals for Veterans Claims affirmed the Board's denial of legal fees for the cervical spine disability and TDIU claims.³ Mr. Stanley filed this timely appeal.

DISCUSSION

I

This court has jurisdiction over this appeal pursuant to 38 U.S.C. § 7292. We review an interpretation of statutory provisions by the Court of Appeals for Veterans Claims without deference. Howard v. Gober, 220 F.3d 1341, 1343 (Fed.Cir.2000).

II

The award of attorneys' fees in veterans cases is governed by 38 U.S.C. § 5904, which provides in pertinent part:

(c)(1) ... [I]n connection with a proceeding before the Department with respect to benefits under laws administered by the Secretary, a fee may not be charged, allowed, or paid for services of agents and attorneys with respect to services provided before the date on which the Board of Veterans' Appeals first makes a final decision in the case. Such a fee may be charged, allowed, or paid in the case of services provided after such date only if an agent or attorney is retained with respect to such case before the end of the one-year period beginning on that date. The limitation in the preceding sentence does not apply to services provided with respect to proceedings before a court.

38 U.S.C. § 5904(c)(1) (2000) (emphases added).⁴

The concept of "finality" with respect to judicial decisions does not have a single meaning applicable in all contexts. In the veterans' law area alone, we have had occasion to consider its meaning with respect to the appealability of decisions from the Court of Appeals for Veterans Claims to this...