McKinney v. McDonald

• Decision Date: 11 August 2015
• Docket Number: No. 2014–7093.,2014–7093.
• Citation: 796 F.3d 1377
• Parties: Michael L. McKINNEY, The National Veterans Legal Services Program, The Military Order of the Purple Heart, Vietnam Veterans of America, The American Legion, Petitioners v. Robert A. McDONALD, Secretary of Veterans Affairs, Respondent.
• Court: U.S. Court of Appeals — Federal Circuit

796 F.3d 1377

Michael L. McKINNEY, The National Veterans Legal Services Program, The Military Order of the Purple Heart, Vietnam Veterans of America, The American Legion, Petitioners

v.Robert A. McDONALD, Secretary of Veterans Affairs, Respondent.

No. 2014–7093.

United States Court of Appeals, Federal Circuit.

Aug. 11, 2015.

Danielle Christine Doremus, Paul Hastings LLP, San Francisco, CA, argued for petitioners. Also represented by Stephen Blake Kinnaird, Washington, DC; Patrick Aaron Berkshire, Barton F. Stichman, National Veterans Legal Services Program, Washington, DC.

Martin F. Hockey, Jr., Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for respondent. Also represented by Joyce R. Branda, Robert E. Kirschman, Jr. ; Martie Adelman, David J. Barrans, Office of General Counsel, United States Department of Veterans Affairs, Washington, DC.

Before: O'MALLEY and WALLACH, Circuit Judges, and GILSTRAP, District Judge.^*

Opinion

O'MALLEY, Circuit Judge.

Michael L. McKinney, National Veterans Legal Services Program, Military Order of the Purple Heart, Vietnam Veterans of America, and The American Legion (collectively, “Petitioners”) petition this court under 38 U.S.C. § 502 to review the effective date that the Department of Veterans Affairs (“VA”) assigned to 38 C.F.R. § 3.307(a)(6)(iv) (“the 2011 regulation”), a regulation that provides a presumption of herbicide exposure for certain veterans who served in or near the Korean demilitarized zone (“DMZ”) during the Vietnam era. Petitioners challenge the VA's decision to make the regulation effective prospectively, rather than assigning a retroactive effective date. Petitioners also challenge the VA's denial of their petition for rulemaking to amend the effective date of the 2011 regulation. Because the VA's decision to assign the 2011 regulation a prospective effective date was not arbitrary, capricious, or contrary to law, we deny the petition for review.

Background

A. Veterans Benefits Act of 2003

During the Vietnam War, herbicides were applied near the Korean DMZ from April 1968 to July 1969. In 2003, Congress passed the Veterans Benefits Act, which authorized benefits for children with spina bifida

born to certain Korean service veterans. Veterans Benefits Act of 2003, Pub.L. No. 108–183, 117 Stat. 2651 (2003) (codified at 38 U.S.C. § 1821 ). In relevant part, the Act defines “a veteran of covered service in Korea” as “any individual” who: (1) served “in or near” the Korean DMZ as determined by the Secretary of the VA, in consultation with the Department of Defense (“DoD”), between September 1, 1967 and August 31, 1971; and (2) is determined by the Secretary, in consultation with the DoD, “to have been exposed to a herbicide agent during such service in or near the Korean [DMZ].” 38 U.S.C. § 1821(c). Although Congress knew that herbicide use near the Korean DMZ ended in 1969, it extended the covered period through August 1971 to account for residual exposure. See 149 Cong. Rec. S15133–01 (daily ed. Nov. 19, 2003) (“[E]ven though herbicide use in or near the Korean DMZ ended in 1969, the Committees believe it is appropriate to extend the qualifying service period beyond 1969 to account for residual exposure.”).

B. VBA Manual Rules

In 2003, the Veterans Benefits Administration amended its Adjudication Procedure Manual (“VBA Manual”) to state that “[h]erbicide agents were used along the southern boundary of the [DMZ] in Korea between April 1968 and July 1969,” and that the DoD “has identified specific units that were assigned or rotated to areas along the DMZ where herbicides were used.” Historical VBA Manual M21–1, part VI, ch. 7, para. 7. 20.b.2. The VBA Manual indicated that herbicide exposure would be conceded for veterans who served in the units DoD identified between April 1968 and July 1969 (“the 2003 manual rule”). Id.

On November 1, 2004, VBA revised the VBA Manual to implement the provisions of the Veterans Benefits Act of 2003 providing benefits for “individuals born with spina bifida

who are the children of veterans who served with specific units in or near the DMZ in Korea between September 1, 1967 and August 31, 1971.” VBA Manual Rewrite M21–1MR, part VI, ch. 2, § B (Nov. 1, 2004); Joint Appendix (J.A.) 69. Like the 2003 manual, the 2004 revision continued to provide that the VA would concede that certain veterans who served in areas along the Korean DMZ when the herbicides were applied—between April 1968 to July 1969—were exposed to herbicides for purposes of their personal claims for benefits connected to such exposure. J.A. 74.

C. Proposed 38 C.F.R. § 3.307(a)(6)(iv)

In 2009, the VA published a proposed rule in the Federal Register to amend its regulations to incorporate relevant provisions of the Veterans Benefits Act of 2003. Herbicide Exposure and Veterans with Covered Service in Korea, 74 Fed.Reg. 36,640 (proposed July 24, 2009) (to be codified at 38 C.F.R. pt. 3). The VA explained that 38 U.S.C. § 1821 “authorizes recognition of herbicide exposure for ‘certain Korean service veterans' for purposes of providing benefits to a child born to them with spina bifida

.” Id. at 36,641. Based on information received from DoD, the VA proposed to “presume herbicide exposure for any veteran who served between April 1968 and July 1969 in a unit determined by VA and DoD to have operated in an area in or near the Korean DMZ in which herbicides were applied.” Id. The VA also proposed that, if a veteran “served in or near the Korean DMZ during the period between September 1, 1967, and August 31, 1971, but not within the time periods and geographic locations that would qualify for a presumption of exposure under this proposed rule, such service would qualify for benefits under 38 U.S.C. § 1821 only if VA determines that the veteran was actually exposed to herbicides during such service.” Id. at 36,642.

In the notice of proposed rulemaking, the VA explained that there “is currently no specific statutory authority for providing a presumption of exposure to herbicide agents to veterans who served in Korea.” Id. Although the Veterans Benefits Act of 2003 is silent with respect to creating a presumption for the veterans themselves, as distinct from their children, the VA stated that it would be “illogical to conclude that the children with spina bifida

of the covered veterans have the disability due to the veteran's exposure to herbicide agents, but not to presume that the veteran himself was exposed to herbicide agents and merits VA benefits for any disabilities associated with that exposure.” Id. The VA found that “such a presumption would comport with known facts and congressional intent and is within VA's general rulemaking authority under 38 U.S.C. 501.” Id.

D. Final 38 C.F.R. § 3.307(a)(6)(iv)

After receiving comments regarding the proposed rules, the VA published a final rule notice on January 25, 2011, extending the time period in which herbicide exposure is presumed from April 1, 1968 to July 31, 1969 to April 1, 1968 to August 31, 1971. Herbicide Exposure and Veterans with Covered Service in Korea, 76 Fed.Reg. 4245, 4245–46 (Jan. 25, 2011). In adopting this change, the VA explained that “it is reasonable and consistent with the intent of Congress to concede exposure for veterans who served in or near the Korean DMZ after herbicide application ceased, because of the potential for exposure to residuals of herbicides applied in that area.” Id. at 4245 (citing 149 Cong. Rec. H11705–01 (2003) (noting that “it is appropriate to extend the qualifying service period beyond 1969 to account for residual exposure”), see also 149 Cong. Rec. S15133–01 (2003)). Accordingly, the VA revised 38 C.F.R. § 3.307(a)(6)(iv) “to presume herbicide exposure for veterans who served in or near the Korean DMZ between April 1, 1968, the earliest date of potential exposure indicated by DoD, and August 31, 1971, the date identified by Congress” in the Veterans Benefits Act of 2003 as a reasonable outside date for residual exposure. Id. at 4246.

The final rule was effective February 24, 2011, and made applicable “to all applications for benefits that are received by VA on or after February 24, 2011 and to all applications for benefits that were pending before VA, the United States Court of Appeals for Veterans Claims, or the United States Court of Appeals for the Federal Circuit on February 24, 2011.” Id. at 4245.

E. McKinney's Claim for Benefits

Petitioner Michael McKinney filed a claim in 2010 for service connection based on exposure to Agent Orange during his service along the DMZ, which began in August 1969. The VA Regional Office (“RO”) denied his claim based on the applicable VBA manual rule, which established a presumption of exposure to Agent Orange for those who served in the DMZ between April 1, 1968 to July 31, 1969. Notably, that period of presumed exposure expired one month prior to McKinney's service in the DMZ. While McKinney's claim was still pending, the VA finalized the 2011 regulation, which extended the presumed exposure period to and including August 31, 1971.

In March 2012, the RO granted McKinney's 2010 claim for service connection pursuant to the 2011 regulation, but denied him an effective date earlier than the regulation's February 24, 2011 effective date. McKinney v. Shinseki, No. 12–3639, 2013 WL 2902799, at *1 (Vet.App. June 14, 2013). As a result, McKinney received benefits for the post–2011 portion of his claim based on the 2011 regulation's presumption of exposure, but was denied pre–2011 benefits based on a lack of evidence of service connection. Petitioners' Br. 11.

In December 2012, McKinney filed with the United States Court of Appeals for Veterans Claims (“Veterans Court”) a “petition for an order to eliminate the inequity in the law that would permit the Secretary to avoid applying a favorable precedential decision in Mallory v. Shinseki, No. 11–0401, to the claims of petitioner and other similarly situated claim...