Sabo v. United States
16-2693
| Fed. Cir. | Dec 15, 2017Background
- Plaintiffs are former service members diagnosed with PTSD who were medically separated and rated below 50% for PTSD under pre-2008 DoD policy.
- The 2008 NDAA directed service branches to, to the extent feasible, utilize the VA Schedule for Rating Disabilities (VASRD) and not deviate unless it increased disability percentages; VASRD §4.129 prescribes a 50% evaluation where certain PTSD-related conditions lead to release from service.
- DoD previously declined to adopt some VASRD provisions (including certain convalescent ratings); the Army had policies rejecting the §4.129 50% convalescent characterization.
- Plaintiffs sued in December 2008 alleging DoD improperly ignored VASRD §4.129; parties settled in a 2011 Agreement requiring the services to amend records to reflect 50% ratings and providing for staggered implementation and continued court jurisdiction until individual records were changed and joint status reports filed.
- Plaintiffs filed an EAJA fee application; the Claims Court held the EAJA filing was timely because the settlement approval was not a final judgment under 28 U.S.C. §2412(d)(2)(G) until the court dismissed all claims in October 2016, and awarded fees finding the government’s positions not substantially justified.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Claims Court’s 2011 approval of settlement was a "final judgment" starting EAJA’s 30‑day clock | Agreement approval was not final because implementation and dismissal required further court action | Approval of settlement = final judgment for EAJA timing | Approval was not final; finality occurred when last claim dismissed in Oct 2016, so EAJA filing was timely |
| Whether the government’s positions (pre- and post-settlement) were "substantially justified" under EAJA | Government’s characterization of VASRD §4.129 as a convalescent rating was unreasonable; thus not substantially justified | Government claims reasonable basis to characterize §4.129 as convalescent and to deviate from VASRD pre-NDAA | Claims Court did not abuse discretion: government’s overall positions were not substantially justified; EAJA award affirmed |
| Proper scope of VASRD application to military disability ratings pre‑NDAA | Statutory text required use of the VA schedule without carve-outs; §4.129 applied prior to NDAA | DoD’s prior policy legitimately excluded certain VASRD provisions (e.g., convalescent ratings) | Court agreed with Claims Court that statutory language did not support DoD’s selective exclusion of §4.129 |
| Standard of review for EAJA award and government burden | Plaintiffs asked deference to Claims Court findings | Government argued its positions were reasonable as a matter of law | Reviewed for abuse of discretion; government bears burden to show substantial justification; district court's factual/legal conclusions sustained |
Key Cases Cited
- Levernier Const., Inc. v. United States, 947 F.2d 497 (Fed. Cir. 1991) (EAJA award after court judgment based on settlement upheld)
- Melkonyan v. Sullivan, 501 U.S. 89 (U.S. 1991) (30‑day EAJA clock begins after time to appeal expires)
- Catlin v. United States, 324 U.S. 229 (U.S. 1945) (final judgment ends litigation and leaves nothing for the court but execution)
- Silicon Image, Inc. v. Genesis Microchip Inc., 395 F.3d 1358 (Fed. Cir. 2005) (trial court must dismiss all claims before appellate jurisdiction; finality depends on settlement terms)
- Patrick v. Shinseki, 668 F.3d 1325 (Fed. Cir. 2011) (government bears burden to show its position was substantially justified in EAJA context)
- Libas, Ltd. v. United States, 314 F.3d 1362 (Fed. Cir. 2003) (EAJA awards reviewed for abuse of discretion)