7 F.4th 1110
Fed. Cir.2021Background
- Congress enacted the Appeals Modernization Act (AMA) in 2017 to replace the VA’s legacy appeals system with three review lanes: higher-level review, supplemental claim (new and relevant evidence), and direct Board appeal. Claimants may use only one lane at a time but may pursue lanes in succession within specified timeframes.
- The VA issued notice-and-comment regulations implementing the AMA (Final Rule, 2019). Multiple petitioners (veterans’ service organizations, a law firm, and an individual) filed § 502 petitions challenging thirteen implementing regulations.
- The court ordered supplemental briefing on standing and analyzed associational, organizational, third-party, and personal standing theories for the petitioners and their members.
- The court found that only two organizations (MVA and PVA) demonstrated associational standing on behalf of members to bring challenges to three regulations concerning supplemental claims: 38 C.F.R. § 14.636(c)(1)(i) (attorneys’ fees), § 3.2500(b) (bar on filing supplemental claims while federal-court appeal pending), and § 3.155 (exclusion of supplemental claims from intent-to-file).
- The court reviewed those three regulations under the APA and Chevron framework and held all three invalid: § 14.636(c)(1)(i) (contrary to 38 U.S.C. § 5904(c)(1)); § 3.2500(b) (contrary to 38 U.S.C. § 5104C); and the § 3.155 preamble exclusion (arbitrary and capricious because it conflicts with statutory provisions and inconsistent regulatory provisions).
- All other challenges in the petitions were dismissed for lack of standing; the petitions were granted-in-part and dismissed-in-part as to the companion appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge VA regulations (associational, organizational, personal, third-party) | Associations (MVA, PVA, NOVA) and other petitioners asserted associational standing for members (veteran and attorney), organizational injury, and third-party standing for attorneys/law firms | Government urged dismissal of several petitioners for lack of standing; noted independent court duty to ensure standing | Court held PVA and MVA have associational standing for three supplemental-claim rules (two on veteran members, one on attorney members). All other petitions/claims lack standing and were dismissed. |
| 38 C.F.R. § 14.636(c)(1)(i) — attorneys’ fees for supplemental claims | MVA: regulation unlawfully treats § 5104C(a) and § 5104C(b) supplemental claims differently and denies fees for § 5104C(b), contrary to § 5904(c)(1) which allows fees after AOJ’s initial decision in the case | VA: regulation reasonable, reflecting past practice treating reopenings as separate “cases” and justified by differences (effective date, notice duties) between § 5104C(a) and (b) claims | Held invalid: regulation conflicts with plain meaning of § 5904(c)(1); attorneys’ fees are available for all AMA review forms after AOJ initial decision, including § 5104C(b) supplemental claims. |
| 38 C.F.R. § 3.2500(b) — bar on filing supplemental claim while federal-court appeal pending | PVA: regulation imposes a prohibition not found in AMA, delays benefits, and forces claimants to choose between preserving effective date and pursuing federal appellate review | VA: interpretation fills a statutory gap; promotes systemic efficiency and avoids duplicative/contradictory proceedings | Held invalid: § 5104C unambiguously permits filing supplemental claims “in any case in which the Secretary renders a decision on a claim”; Congress barred concurrent administrative lanes but did not bar concurrent judicial and supplemental claim review. |
| 38 C.F.R. § 3.155 preamble — exclusion of supplemental claims from intent-to-file | PVA: exclusion is arbitrary and capricious because similar statutory language (§ 5110(a)(1) and (a)(3)) supports applying intent-to-file to supplemental claims; other regulatory provisions already permit incomplete supplemental filings to preserve dates | VA: (did not defend preamble on merits; advised proposed regulatory change and asked to remand) | Held invalid: VA offered no adequate explanation for treating initial and supplemental claims differently; exclusion conflicted with statutory scheme and internal regulatory text (arbitrary and capricious). |
Key Cases Cited
- Summers v. Earth Island Inst., 555 U.S. 488 (2009) (Article III standing and plaintiffs’ burden to show concrete injury)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (irreducible constitutional minimum of standing: injury in fact, causation, redressability)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (concreteness requirement for injury in fact)
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984) (two-step framework for reviewing agency statutory interpretation)
- National Org. of Veterans’ Advocates, Inc. v. Secretary of Veterans Affairs, 981 F.3d 1360 (Fed. Cir. 2020) (en banc) (associational-standing requirements for organizations challenging VA rules)
- Stanley v. Principi, 283 F.3d 1350 (Fed. Cir. 2002) (attorneys’ fees and interpretation of fee-triggering event)
- Carpenter v. Nicholson, 452 F.3d 1379 (Fed. Cir. 2006) (same; ‘‘case’’ concept includes reopenings and related claims)
- Caplin & Drysdale, Chartered v. United States, 491 U.S. 617 (1989) (economic injury to lawyers in certain third-party standing contexts)