Rodriguez v. Peake

• Citation: 511 F.3d 1147
• Decision Date: 07 January 2008
• Docket Number: No. 2006-7023.,2006-7023.
• Parties: Maria R. RODRIGUEZ, Claimant-Appellee, v. James B. PEAKE, M.D., Secretary of Veterans Affairs, Respondent-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

511 F.3d 1147

Maria R. RODRIGUEZ, Claimant-Appellee, v. James B. PEAKE, M.D., Secretary of Veterans Affairs, Respondent-Appellant.

No. 2006-7023.

United States Court of Appeals, Federal Circuit.

January 7, 2008.

Kenneth M. Carpenter, Carpenter, Chartered, Topeka, KS, argued for claimant-appellee.

Kyle E. Chadwick, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for the respondent-appellant. With him on the brief was Peter D. Keisler, Acting Attorney General. Of counsel was Todd M. Hughes. Of counsel on the brief was Joshua S. Blume, Attorney, United States Department of Veterans Affairs, of Washington, DC.

Before BRYSON, Circuit Judge, FRIEDMAN, Senior Circuit Judge, and KEELEY,^* Chief District Judge.

KEELEY, Chief District Judge.

James B. Peake, M.D., Secretary of Veterans Affairs ("the Secretary"), appeals from a decision of the United States Court of Appeals for Veterans Claims ("Veterans Court"), permitting a survivor of a deceased veteran to proceed with a claim for dependency and indemnity compensation ("DIC"). Rodriguez v. Nicholson, 19 Vet. App. 275 (2005). That decision overturned a ruling by the Board of Veterans' Appeals ("the Board") and held that application of 38 C.F.R. § 3.22, as amended in January 2000, to a DIC claim pending prior to the amendment, took away a substantial right. The Veterans Court held that the Board's application of amended § 3.22 to Appellee Maria R. Rodriguez's ("Rodriguez") case had an unlawful "retroactive effect." Because amended § 3.22 does not have an unlawful "retroactive effect," we reverse.

I. BACKGROUND

As we have done in similar cases, we find it useful to briefly review the statutes governing the award of DIC benefits to survivors of deceased veterans before discussing the facts of this particular case.

DIC is a monthly benefit paid to certain survivors, such as a spouse, of certain deceased veterans. 38 U.S.C. § 1311 (2000). A veteran's surviving spouse may receive DIC benefits if the veteran died from a service-connected disability. 38 U.S.C. § 1310 (2000). A veteran dies from a "service-connected" disability when the disability was a principal or a contributory cause of the death. 38 C.F.R. § 3.312(a) (1989).

Alternatively, if a veteran's death is not "service-connected," 38 U.S.C. § 1318 provides that a surviving spouse may still receive DIC benefits if the veteran had received, or was entitled to receive, compensation at the time of his or her death for a service-connected disability that had been continuously rated totally (100%) disabling for a period of 10 or more years immediately preceding death. 38 U.S.C. § 1318(b) (2000).¹

In 1990, the General Counsel of the United States Department of Veterans Affairs ("the Department") announced an interpretation of § 1318 that precluded survivors of veterans from bringing claims for DIC benefits using a "hypothetical entitlement" approach. VA Gen. Coun. Prec. 68-90 (July 18, 1990). Under this approach, if the survivor of a deceased veteran can prove that a veteran would have been entitled to receive compensation for a 100% disabling service-connected disability for ten years prior to death, then the survivor may claim DIC benefits under § 1318, even though the deceased veteran did not actually receive such compensation. A survivor could meet this evidentiary burden by showing, for example, that (1) the veteran actually was 100% disabled for ten or more years prior to death, but did not file a claim and, therefore, did not receive compensation for that period of time, or (2) the veteran actually did file a claim, but the claim was improperly denied by the Board.

With this background, we now turn to the facts of the case at hand.

Rodriguez is the widow of Feliz Estremremera-Acevedo, a veteran who served three years with the Army National Guard, and then served on active duty in the U.S. Army for twenty years. Mr. Estremremera-Acevedo concluded his service in 1974. In 1975, he applied to the Department for a determination of "service-connection" for a variety of physical ailments. The Department determined that three of his conditions, including diabetes mellitus, were service-related and listed them as 10% disabling.

By 1991, Mr. Estremremera-Acevedo's diabetes had worsened and, as a result, his left leg was amputated below the knee. In 1992, the Veteran Affairs Regional Office ("VARO") raised Mr. Estremremera-Acevedo's disability rating to 100%, effective from April 22, 1991. Two years later, the VARO ruled on two additional claims by Mr. Estremremera-Acevedo. First, the VARO declined to increase his disability ratings for various other ailments, and second, it refused to assign an earlier effective date for the 100% disability rating for his diabetes. Mr. Estremremera-Acevedo ultimately died from complications associated with liver cancer in August 1996.

In September 1996, Rodriguez filed a claim seeking DIC benefits under both 38 U.S.C. § 1310 and § 1318. At that time, we had not yet interpreted the "entitled to receive" language of § 1318. For approximately six years prior to the time Rodriguez filed her claim, however, the Department had been refusing to recognize claims using the "hypothetical entitlement" approach.

In November 1996, the VARO found that Mr. Estremremera-Acevedo's death was not service-related, and that he had only been listed as 100% disabled for five years prior to his death. It thus concluded that Rodriguez had failed to meet either of the conditions required to be eligible for DIC. Rodriguez appealed these findings to the Board.

While Rodriguez's appeal was pending before the Board, the Veterans Court issued several decisions interpreting § 1318 and its implementing regulation, § 3.22. These decisions interpreted the "entitled to receive" language to permit a DIC claimant to pursue a "hypothetical entitlement" approach. Green v. Brown, 10 Vet. App. 111 (1997); Carpenter v. West, 11 Vet.App. 140 (1998); Wingo v. West, 11 Vet.App. 307 (1998).

In Green, the Veterans Court held that a surviving spouse could use any evidence available at the time of applying for DIC to "attempt to demonstrate that the veteran hypothetically would have been entitled to receive a different decision" on a prior benefits claim, and that the "different decision" would have resulted in the veteran's receiving a 100% disability rating for at least ten years prior to death. 10 Vet.App. at 118; accord Carpenter, 11 Vet.App. at 146-47. Similarly, in Wingo, the Veterans Court held that a surviving spouse could argue "hypothetical entitlement" where the Department of Defense had rated a veteran 100% disabled more than ten years prior to his death, but the veteran had only applied for benefits one month before his death. 11 Vet.App. at 309-12.

In July 1998, the Board remanded Rodriguez's claims for additional development and re-adjudication. In January 2000, the Secretary promulgated a final rule amending § 3.22 to preclude reading a "hypothetical entitlement" approach into § 1318. See 65 Fed. Reg. 3388 (Jan. 21, 2000). The amendment defined "entitled to receive" to mean that the deceased veteran had actually been rated 100% disabled for at least ten years prior to death, but, for one of several enumerated reasons,² was not receiving compensation. 38 C.F.R. § 3.22.³

In October 2002, the VARO again denied Rodriguez's claims, and in December 2002, the Board affirmed the VARO's decision that Mr. Estremremera-Acevedo's death was not related to a service-connected disability. The Board deferred consideration of Rodriguez's § 1318 claim, however, pursuant to a stay issued by this Court in National Organization of Veterans' Advocates, Inc. v. Secretary of Veterans Affairs, 260 F.3d 1365, 1380 (Fed.Cir. 2001) ("NOVA I").

In NOVA I, we held that the phrase "entitled to receive," as used in § 1318, is ambiguous. Id. at 1377. We deferred deciding whether the Secretary's 2000 amendment to § 3.22 was valid, however, in order to give the Department an opportunity to explain why it had interpreted the same phrase differently in another regulation.⁴ Id. at 1380. In reaching this result, we agreed with the Department that the amendment to § 3.22 was interpretive rather than substantive, which alleviated the notice and comment period requirements that otherwise would have attached under the Administrative Procedures Act. Id. at 1377.

In January 2003, in National Organization of Veterans' Advocates, Inc., v. Secretary of Veterans Affairs, 314 F.3d 1373, 1380 (Fed.Cir.2003) ("NOVA II"), we found that, in attempting to comply with NOVA I, the Department had decided to continue to interpret the language of § 3.22 as "excluding new claims filed posthumously by a veteran's survivor, that is, claims where no claim had been filed during the veteran's life or the claim had been denied and was not subject to reopening." Finding it reasonable, we deferred to the Department's interpretation, thus upholding the Department's decision to interpret "entitled to receive" as barring the "hypothetical entitlement" approach. Id. We remanded the case on the ground that the Department had failed to bring its interpretation of § 1311 into conformity with its interpretation of § 1318, but we lifted the stay on claims such as Rodriguez's § 1318 claim. Id. at 1381-82.

In June 2003, the Board affirmed the VARO's decision to deny Rodriguez's § 1318 DIC claim. In making this decision, the Board relied on the amended version of § 3.22 that barred a claimant's use of the "hypothetical entitlement" approach. On a separate issue, the Board also found that the Department had complied with its notice obligations under the Veterans Claims Assistance Act of 2000 ("VCAA"). The VCAA requires that the Department advise claimants of any information that the claimant will need to provide the Department in order to substantiate the claim. Pub.L. No. 106-475, § 3(a), 114 Stat....