Sabo v. United States, 08-899C

CourtCourt of Federal Claims
Writing for the CourtSWEENEY, Judge
PartiesMICHAEL SABO, NICHOLAS WELLS, JUAN PEREZ, ALAN PITTS, BILLY J. TALLEY, AIMEE SHERROD, and TYLER EINARSON on behalf of themselves and all other individuals similarly situated, Plaintiffs, v. THE UNITED STATES, Defendant.
Docket NumberNo. 08-899C,08-899C
Decision Date26 July 2016

Application for Attorneys' Fees and Expenses Under the EAJA; Antiassignment Act; Prevailing Party; Substantial Justification; Application of VASRD § 4.129 to Service Members Discharged With PTSD; 10 U.S.C. Chapter 61; Adequacy of Supporting Documentation

Brad Fagg and Barton F. Stichman, Washington, DC, for plaintiffs.

Douglas K. Mickle, United States Department of Justice, Washington, DC, for defendant.



Plaintiffs, and the members of the class they represent, were medically separated from the United States military due to posttraumatic stress disorder ("PTSD") resulting from their service in Iraq and Afghanistan during Operation Iraqi Freedom and Operation Enduring Freedom. In conjunction with their separations, the military assigned them disability ratings for their PTSD of less than 50%. Contending that they were entitled to disability ratings of 50% for their PTSD under federal law, plaintiffs filed suit to obtain the higher disability rating and the benefits that would flow from that higher rating. The parties ultimately reached a settlement. Now before the court are plaintiffs' applications for attorneys' fees and expenses. As explained below, the court grants plaintiffs' applications in their entirety and awards plaintiffs attorneys' fees and expenses in the amount of $3,862,924.53.


To place the issues raised in plaintiffs' applications for attorneys' fees and expenses in the proper context, the court provides the following pertinent background information, beginning with an overview of the military's disability evaluation system.1

A. The Military's Disability Evaluation System

When a physical disability renders a member of the military unfit to perform his or her duties, the member may be separated or retired from service. 10 U.S.C. ch. 61 (2000). A service member's fitness for duty and eligibility for separation or retirement is governed by regulations promulgated by the Secretary of the military department to which the service member belongs.2 Id. § 1216. Specifically, these regulations are issued by the Secretaries of the United States Department of the Air Force, the United States Department of the Army ("Army"), and the United States Department of the Navy. See Air Force Instruction 36-3212, Physical Evaluation for Retention, Retirement, or Separation (Sept. 30, 1999); Army Regulation 635-40, Physical Evaluation for Retention, Retirement, or Separation (Aug. 15, 1990); Secretary of the Navy Instruction 1850.4E, Department of the Navy (DON) Disability Evaluation Manual (Apr. 30, 2002).

The military's disability evaluation process begins with a medical evaluation by a Medical Evaluation Board ("MEB").3 DoDI 1332.38, ¶¶ E3.P1.1.1, E3.P1.2. The MEB documents the service member's medical condition, id. ¶ E3.P1.2.3, and then, if the service member has a duty-related impairment, refers the service member to a Physical Evaluation Board ("PEB"), id. ¶ E3.P1.2.7.

PEBs conduct physical disability evaluations to determine "the fitness of Service members with medical impairments to perform their military duties[.]" Id. ¶ E3.P1.3.1. If a PEB determines that a service member is unfit for duty, it must document, among other things, "[t]hecode and percentage rating assigned an unfitting physical disability in accordance with the [Schedule for Rating Disabilities ("VASRD") promulgated by the United States Department of Veterans Affairs ("VA")]."4 Id. ¶ E3.P1.; accord id. ¶ E3.P4.6 ("When a disability is established as compensable, the disability shall be rated according to the VASRD, as implemented by [DoDI] 1332.39 . . . and federal law."). The PEB must also determine an unfit service member's "entitlement to benefits under Chapter 61 of 10 U.S.C." Id. ¶ E3.P1.3.1.

A case referred by an MEB is considered first by an informal PEB. Id. ¶ E3.P1.3.2. Upon receiving an informal PEB's findings and recommendations, a service member is counseled by a PEB liaison officer, who is charged with advising the service member "of the significance and consequences of the determinations made and the associated rights, benefits, and entitlements." Id. ¶ E3.P1.4.1. A service member may either accept the informal PEB's findings and recommendations or demand a formal PEB. Id. ¶¶ E3.P1.3.3, E3.P1. If a service member accepts the decision of the informal PEB and waives a formal PEB, that decision must be documented by the PEB liaison officer. Id. ¶ E3.P1.3.3.

Once the PEB documents its findings and recommendations, a service member's case is referred to the final reviewing authority within the relevant military department for a final determination. Id. ¶¶ E3.P1.5.2.1, E3.P1.6.3; accord id. ¶ E3.P7.1. The case is then sent to the military department's personnel office for final disposition. Id. ¶ E3.P1.5. Final dispositions include permanent retirement, placement on the temporary disability retirement list ("TDRL"), and separation. Id. ¶ E3.P7.5 (citing 10 U.S.C. §§ 1201-1206).

B. The VASRD and PTSD Disability Ratings in the Military's Disability EvaluationSystem
1. The Pre-2008 Statutory and Regulatory Framework

Prior to 2008, a service member with at least thirty days of active duty service who was deemed unfit for duty could be permanently retired pursuant to 10 U.S.C. § 1201, placed on the TDRL pursuant to 10 U.S.C. § 1202, or separated pursuant to 10 U.S.C. § 1203. If the Secretary of the relevant military department determined that the service member's "disability [was] at least 30 percent under the standard schedule of rating disabilities in use by the [VA] at the time of the determination," the service member could be permanently retired, 10 U.S.C. § 1201(b)(3)(B), or placed on the TDRL, id. § 1202 (incorporating the standards set forth in 10 U.S.C. § 1201). If the relevant Secretary determined that the service member's "disability [was] less than 30 percent under the standard schedule of rating disabilities in use by the [VA] at the time of the determination," the service member could be separated. Id. § 1203(b)(4)(A)-(B); see also id. § 1203(b)(4)(C) (noting that separation was possible in certain circumstances if asoldier's "disability [was] at least 30 percent under the standard schedule of rating disabilities in use by the [VA] at the time of the determination"). In short, the military was statutorily required to use the VASRD to determine the disability ratings of service members with medical conditions rendering them unfit for duty.5 Accord DoDI 1332.39, Application of the Veterans Administration Schedule for Rating Disabilities ¶ 4.2 (Nov. 14, 1996) ("Chapter 61 of [10 U.S.C.] establishes the [VASRD] as the standard for assigning percentage ratings.").

The VASRD contains two provisions that specifically address PTSD. VASRD § 4.129 provides:

Mental disorders due to traumatic stress
When a mental disorder that develops in service as a result of a highly stressful event is severe enough to bring about the veteran's release from active military service, the rating agency shall assign an evaluation of not less than 50 percent and schedule an examination within the six month period following the veteran's discharge to determine whether a change in evaluation is warranted.

38 C.F.R. § 4.129 (2002).6 And, VASRD § 4.130 sets forth the schedule for rating mental disorders, including PTSD; in other words, it provides guidance for assigning 10%, 30%, 50%, 70%, and 100% disability ratings. Id. § 4.130.

Although the military was statutorily required to use the VASRD to determine disability ratings, the Department of Defense recognized that some of the provisions of the VASRD were not applicable to the military's performance of this task. Specifically, it noted:

[N]ot all the general policy provisions in Sections 4.1 - 4.31 of the VASRD are applicable to the Military Departments. . . . [DoDI 1332.39] replaces these sections of the VASRD. The remainder of the VASRD is applicable except those portions that pertain to [VA] determinations of Service connection, refer tointernal [VA] procedures or practices, or are otherwise specifically identified in Enclosure 2 [of DoDI 1332.39] as being inapplicable.

DoDI 1332.39, ¶ 4.2.

One of the "general policy provisions" that the Department of Defense deemed inapplicable to the military concerned convalescent ratings. VASRD § 4.30 provides:

Convalescent ratings.
A total disability rating (100 percent) will be assigned without regard to other provisions of the rating schedule when it is established by report at hospital discharge (regular discharge or release to non-bed care) or outpatient release that entitlement is warranted under paragraph (a) (1), (2) or (3) of this section effective the date of hospital admission or outpatient treatment and continuing for a period of 1, 2, or 3 months from the first day of the month following such hospital discharge or outpatient release. . . .
(a) Total ratings will be assigned under this section if treatment of a service-connected disability resulted in:
(1) Surgery necessitating at least one month of convalescence. . . .
(2) Surgery with severe postoperative residuals . . . .
(3) Immobilization by cast, without surgery, of one major joint or more.

38 C.F.R. § 4.30. In addition, convalescent ratings related to mental disorders are addressed in VASRD § 4.128:

Convalescence ratings following extended hospitalization.
If a mental disorder has been assigned a total evaluation due to a continuous period of hospitalization lasting six months or more, the rating agency shall continue the total evaluation indefinitely and schedule a mandatory examination six months after the veteran is discharged or released to nonbed care.

Id. § 4.128. The ...

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