Scott v. McDonald

• Decision Date: 18 June 2015
• Docket Number: No. 2014–7095.,2014–7095.
• Citation: 789 F.3d 1375
• Parties: Curtis SCOTT, Claimant–Appellant v. Robert A. McDONALD, Secretary of Veterans Affairs, Respondent–Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

789 F.3d 1375

Curtis SCOTT, Claimant–Appellant

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

No. 2014–7095.

United States Court of Appeals, Federal Circuit.

June 18, 2015.

Jennifer Librach Nall, Baker Botts, LLP, Austin, TX, argued for claimant-appellant. Also represented by Christopher Granaghan, David B. Weaver, Jeffrey S. Gritton, Vinson & Elkins LLP, Austin, TX.

William James Grimaldi, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for respondent-appellee. Also represented by Joyce R. Branda, Robert E. Kirschman, Jr., Claudia Burke ; Y. Ken Lee, Amanda R. Blackmon, Office of General Counsel, United States Department of Veterans Affairs, Washington, DC.

Before DYK, MAYER, and REYNA, Circuit Judges.

Opinion

DYK, Circuit Judge.

Curtis Scott appeals from the decision of the United States Court of Appeals for Veterans Claims (“Veterans Court”) denying his claim for service connection for hepatitis C

. We affirm.

Background

Scott served on active duty for training in the United States Marine Corps Reserve from January to July 1972. On November 18, 1999, Scott tested positive for hepatitis C

. He applied for disability benefits on February 4, 2005, alleging that he contracted hepatitis C in service. His primary theory was that he was infected with hepatitis C when he received air-gun inoculations during his military service. The Department of Veterans Affairs (“VA”) regional office (“RO”) denied Scott's claim for service connection on September 20, 2005.

On April 24, 2006, Scott appealed to the Board of Veterans' Appeals (“Board”) and requested an evidentiary hearing before the Board. See 38 C.F.R. § 20.700(a) (right to a hearing). Scott was incarcerated at the time of his appeal to the Board. On December 6, 2007, the RO sent a letter to Scott, “acknowledg[ing] [his] request for a Video Conference hearing before the Board,” and “request[ing] that [Scott] provide us with the date [Scott is] expected to be released from [his] incarceration so we may schedule [his] video conference hearing accordingly.” J.A. 575. Scott responded to the RO on December 13, 2007, reiterating his request for a hearing and informing the Board that his “minimum expiration parole date for release is January 13, 2017,” and his “next parole review date is scheduled for March of 2009.” J.A. 573. On January 14, 2008, the RO notified Scott that his hearing had been scheduled for March 14, 2008, in Houston, Texas. Scott, who was still incarcerated on the scheduled hearing date, failed to appear for the hearing.

On March 23, 2008, Scott requested a rescheduled hearing because he “could not appear for [his] hearing because of [his] incarceration.” J.A. 826. The Board denied Scott's request, finding that Scott had “not shown good cause for failing to appear for [his] hearing,” but made no mention of Scott's incarceration. J.A. 683. The Board subsequently denied Scott's claim for service connection, noting that Scott “failed to report for his scheduled hearing in March 2008” and that the Board denied his request to reschedule it. J.A. 677.

On appeal to the Veterans Court, Scott, who by this time was represented by counsel, did not raise the hearing issue. The Veterans Court vacated and remanded to the Board due to an inadequate medical examination, without mentioning the hearing issue. In remanding to the RO, the Board noted the hearing issue but that Scott “has not renewed his request” for a hearing. J.A. 221. On November 18, 2011, the RO continued the service connection denial without mentioning the hearing issue. Scott again appealed to the Board via a re-certification of appeal form which checked “YES” in answer to “WAS HEARING REQUESTED?”, but Scott did not raise the hearing issue with the Board. J.A. 183. The Board affirmed, again noting that Scott “has not renewed his request” for a hearing. J.A. 16.

On appeal to the Veterans Court, on July 26, 2013, Scott raised the hearing issue for the first time since his March 23, 2008, request for a rescheduled hearing. The Veterans Court affirmed, holding that Scott “did not raise this [hearing] issue in either proceeding,” referring to Scott's prior appeal to the Veterans Court and his current appeal before the Board. J.A. 1–2. The Veterans Court held that raising the hearing issue at this late stage “amounts to an effort to engage in undesirable piecemeal litigation, and [Scott] provides no compelling basis to permit it.” J.A. 2. Scott appeals. We have jurisdiction pursuant to 38 U.S.C. § 7292(a). We review legal determinations of the Veterans Court de novo. Moffitt v. McDonald, 776 F.3d 1359, 1364 (Fed.Cir.2015).

Discussion

I

The Supreme Court has recognized the importance of issue exhaustion with respect to administrative tribunals. In United States v. L.A. Tucker Truck Lines, Inc., 344 U.S. 33, 73 S.Ct. 67, 97 L.Ed. 54 (1952), the Court held that “orderly procedure and good administration require that objections to the proceedings of an administrative agency be made while [the agency] has opportunity for correction in order to raise issues reviewable by the courts,” such that “as a general rule ... courts should not topple over administrative decisions unless the administrative body not only has erred but has erred against objection made at the time appropriate under its practice.” Id. at 37, 73 S.Ct. 67.¹ But Scott argues that the Supreme Court's decision in Sims v. Apfel, 530 U.S. 103, 120 S.Ct. 2080, 147 L.Ed.2d 80 (2000), precludes application of the issue exhaustion doctrine in the context of veterans benefits because proceedings before the VA are non-adversarial in nature.

We addressed this issue even before the Supreme Court's decision in Sims, in Maggitt v. West, 202 F.3d 1370 (Fed.Cir.2000). We articulated a case-by-case balancing test for issue exhaustion in the VA system: “The test is whether the interests of the individual weigh heavily against the institutional interests the doctrine exists to serve.” Id. at 1377 (citing McCarthy v. Madigan, 503 U.S. 140, 146, 112 S.Ct. 1081, 117 L.Ed.2d 291 (1992) ). We remanded to the Veterans Court to determine, inter alia, “whether invocation of the exhaustion doctrine [was] appropriate” with respect to the veteran's request to reopen his claim for service connection based on constitutional and statutory arguments that he had not raised before the Board. Id. at 1378–79.

Thereafter, in Sims, the Supreme Court addressed issue exhaustion in the context of Social Security Administration (“SSA”) benefits. The Court noted that “SSA regulations do not require issue exhaustion.” 530 U.S. at 108, 120 S.Ct. 2080. When that is so, “the desirability of a court imposing a requirement of issue exhaustion depends on the degree to which the analogy to normal adversarial litigation applies in a particular administrative proceeding.” Id. at 109, 120 S.Ct. 2080. A plurality of the Court concluded that “[t]he differences between courts and agencies are nowhere more pronounced than in Social Security proceedings,” such that “a judicially created issue-exhaustion requirement is inappropriate.” Id. at 110, 112, 120 S.Ct. 2080. But the majority also recognized that “it is common for an agency's regulations to require issue exhaustion in administrative appeals. And when regulations do so, courts reviewing agency action regularly ensure against the bypassing of that requirement by refusing to consider unexhausted issues.” Id. at 108, 120 S.Ct. 2080 (citations omitted). Justice O'Connor's concurrence also made clear that Sims does not apply, and exhaustion is required, where applicable statutes or regulations impose an exhaustion requirement. See id. at 113, 120 S.Ct. 2080 (O'Connor, J., concurring). Thus, in light of Sims, we must determine the extent to which statutes or agency regulations require issue exhaustion in the veterans benefits context.

In previous veterans' cases we have considered issue exhaustion in three specific contexts and have held that the statutes and regulations require issue exhaustion in appropriate circumstances. First, in an appeal from the RO to the Board, 38 C.F.R. § 20.202 specifically requires that the errors by the RO be identified either by stating that all issues in the statements of the case are being appealed or by specifically identifying the issues being appealed.² See Robinson v. Shinseki, 557 F.3d 1355, 1361 (Fed.Cir.2009) (“We ... do not suggest that under the regulations the veteran is entirely relieved of his or her obligation to raise issues in the first instance before the VA where the record is being made. The regulations quite clearly impose such an obligation even in direct appeals....” (citing 38 C.F.R. § 20.202 )).

Second, where the alleged error was made by the Board, we have held that the statute, 38 U.S.C. § 7252(a), requires issue exhaustion before the Board in appropriate circumstances.³ See Ledford v. West, 136 F.3d 776, 779–80 (Fed.Cir.1998) (Under § 7252, “the [Veterans C]ourt's jurisdiction is premised on and defined by the Board's decision concerning the matter being appealed,” and “while the doctrine of exhaustion of administrative remedies is not jurisdictional,” exhaustion is normally required.). Thereafter, in Maggitt, we held that exhaustion was not required in all cases, distinguished Ledford, and concluded that “[n]othing in the statutory scheme providing benefits for veterans mandates a jurisdictional requirement of exhaustion of remedies which would require the Veterans Court to disregard every legal argument not previously made before the Board.” See 202 F.3d at 1376–77. As noted above, “the test is whether the interests of the individual weigh heavily against the institutional interests the doctrine exists to serve.” Id. at 1377 (citing McCarthy, 503 U.S. at 146, 112 S.Ct. 1081 ).

In Bernklau v. Principi, 291 F.3d 795 (Fed.Cir.2002), decided after Sims, we upheld the Veterans Court's application of issue exhaustion to arguments that the...