VALLES-PRIETO v. United States, 1:20-cv-00589

Alver Valles-Prieto served in the USAF from 2005 to his active-duty separation on January 31, 2015; he was diagnosed with a depressive disorder following clinical evaluation in February 2013.
In January 2014 his security clearance was terminated; in January 2015 he was denied reenlistment and transferred to the Air Force Reserve, and ultimately separated from the Reserve in January 2018 with an honorable discharge.
Medical records show episodic mental-health treatment in 2013–2015, missed psychotherapy follow-ups, medication management, and VA treatment after transfer; VA assigned a 30% disability rating effective February 1, 2015, and an overall 50% rating based on other conditions.
Valles-Prieto applied to the Air Force Board for Correction of Military Records (AFBCMR) in 2018, arguing he should have been referred to the Integrated Disability Evaluation System (IDES) prior to separation and thereby found eligible for medical retirement.
AFBCMR denied relief twice after obtaining advisory opinions (medical, mental-health, and AFPC); the Court of Federal Claims granted a voluntary remand, and on second review the AFBCMR again denied relief.
The Court concluded the AFBCMR’s decision was unsupported by substantial evidence, failed to consider the full record (including the veteran’s statements and VA rating), and remanded for a referral to IDES within three months; the Court retained jurisdiction and stayed further proceedings pending the remand.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether plaintiff should have been referred to IDES before separation	Valles-Prieto: DoD and Air Force rules required IDES referral because his depressive disorder caused duty-impairing limitations expected to persist >1 year	Government: AFBCMR's factual findings (relying on advisory opinions) show no basis for IDES referral	Court: AFBCMR record review was deficient; remand ordered for IDES referral
Whether AFBCMR considered all relevant evidence (plaintiff's statements, VA rating, timing of clearance loss)	Valles-Prieto: Board ignored his sworn statements, VA disability ratings, deterioration in performance and timing of clearance loss	Government: Board reasonably relied on advisory opinions and AF records showing non-retention for command decision factors	Court: Board failed to consider plaintiff's testimony and VA rating and improperly cherry-picked evidence; decision unsupported by substantial evidence
Whether AFBCMR's decision was supported by substantial evidence and free of impermissible speculation	Valles-Prieto: Board's conclusion was speculative and omitted key record evidence	Government: Board's decision is entitled to deference and supported by advisors	Court: Decision arbitrary and capricious in parts; lacked objective evidentiary basis for denying IDES referral; remand required

Chambers v. United States, 417 F.3d 1218 (Fed. Cir. 2005) (standard for reviewing military disability/retirement decisions)
United States v. Testan, 424 U.S. 392 (1976) (Tucker Act does not create substantive money-mandating rights)
Fisher v. United States, 402 F.3d 1167 (Fed. Cir. 2005) (plaintiff must identify a separate source of substantive law for Tucker Act relief)
Walls v. United States, 582 F.3d 1358 (Fed. Cir. 2009) (review of military corrections board decisions on administrative record)
Bannum, Inc. v. United States, 404 F.3d 1346 (Fed. Cir. 2005) (RCFC 52.1 judgment on the administrative record standard)
Advanced Data Concepts, Inc. v. United States, 216 F.3d 1054 (Fed. Cir. 2000) (courts sustain agency decisions showing rational reasoning and consideration of relevant factors)
Heisig v. United States, 719 F.2d 1153 (Fed. Cir. 1983) (all competent evidence must be considered under substantial-evidence review)
Armstrong v. United States, 205 Ct. Cl. 754 (1974) (presumption of regularity favors official military acts)
Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (substantial-evidence and arbitrary-and-capricious review principles)
Richardson v. Perales, 402 U.S. 389 (1971) (definition of substantial evidence)
Consol. Edison Co. v. NLRB, 305 U.S. 197 (1938) (substantial-evidence standard)
Hassay v. United States, 150 Fed. Cl. 467 (2020) (expectation that corrections board consider mental-health-related accession/fitness findings)