Atilano v. McDonough, 12 F.4th 1375

Jesus G. Atilano, a Vietnam veteran with service‑connected PTSD, sought increased disability compensation and TDIU; he perfected an appeal to the Board and requested an in‑person Board hearing with live expert testimony.
On the scheduled hearing day, Atilano was physically unable to attend; his counsel and the medical expert (Dr. Tripi) appeared but the Veterans Law Judge refused to take the expert’s live testimony because the appellant himself was absent.
The Board processed the absence as a withdrawal under 38 C.F.R. § 20.702(d), denied the increased rating and earlier effective dates, and found the expert’s written opinion inconsistent with objective findings.
The U.S. Court of Appeals for Veterans Claims affirmed, holding 38 U.S.C. § 7107 unambiguously requires the appellant’s in‑person participation (or equivalent electronic participation) for a hearing and that relevant VA regulations reasonably interpret the statute.
The Federal Circuit vacated and remanded: it held § 7107 is not unambiguous on whether an appellant must be physically present to permit witnesses to testify, and it instructed further consideration of the statute, the agency’s regulations, and Chevron deference issues; the court did not resolve harmless‑error or arbitrary‑and‑capricious challenges to the regulations.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether 38 U.S.C. § 7107 unambiguously requires the appellant to personally participate in a Board hearing (to allow counsel to elicit sworn witness testimony)	Atilano: § 7107 does not require the veteran’s personal presence; counsel may obtain witness testimony for an absent but represented veteran; requiring presence would deny hearings to severely disabled veterans	Government: § 7107’s text and structure require appellant participation (in‑person or electronic) unless good cause is shown; regs implement that requirement	Court: § 7107 is not unambiguous on that point; the Veterans Court’s plain‑meaning holding was legal error; vacated and remanded for further regulatory analysis
Whether VA regulations are a permissible (Chevron) interpretation that requires appellant presence	Atilano: regulations do not and should not bar a represented, absent veteran from having witnesses testify; denying live testimony to the homebound is unreasonable	Government: VA regulations reasonably require appearance or treat absence as withdrawal except for good cause; regulations support Veterans Court	Court: Did not resolve; remanded for consideration whether the regulations actually demand presence, whether Chevron deference applies, and whether any regulatory interpretation is reasonable

Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984) (two‑step framework for reviewing agency statutory interpretations)
United States v. Eurodif S.A., 555 U.S. 305 (2009) (agency interpretations must not conflict with unambiguous statutory language and must be reasonable when statute is ambiguous)
Cook v. Wilkie, 908 F.3d 813 (Fed. Cir. 2018) (statutory and historical context of veterans’ hearing rights and limits on Chevron where agency did not purport to interpret statute)
Gazelle v. Shulkin, 868 F.3d 1006 (Fed. Cir. 2017) (de novo review standard for statutory and regulatory interpretation by Veterans Court)
Heino v. Shinseki, 683 F.3d 1372 (Fed. Cir. 2012) (tools of statutory construction include text, structure, legislative history, and interpretive canons)