MICHAEL A. HUDGENS, Claimant-Appellant v. ROBERT A. MCDONALD, SECRETARY OF VETERANS AFFAIRS, Respondent-Appellee
2015-7030
United States Court of Appeals for the Federal Circuit
May 18, 2016
THOMAS EDWARD ANDREWS III, Andrews Law Office LLC, Columbia, SC, argued for claimant-appellant.
IGOR HELMAN, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for respondent-appellee. Also represented by BENJAMIN C. MIZER, ROBERT E. KIRSCHMAN, JR., MARTIN F. HOCKEY, JR., COURTNEY D. ENLOW; DAVID J. BARRANS, AMANDA BLACKMON, Office of General Counsel, United States Department of Veterans Affairs, Washington, DC.
Before O‘MALLEY, PLAGER, and WALLACH, Circuit Judges.
O‘MALLEY, Circuit Judge.
Mr. Hudgens appeals from the judgment of the Court of Appeals for Veterans Claims (“Veterans Court”). That court (1)
BACKGROUND
Mr. Hudgens injured his right knee while serving on active duty in the U.S. Army. Joint Appendix (“JA”) 2. In 2003, Mr. Hudgens had partial knee replacement surgery on his right knee. Id. On August 16, 2006, Mr. Hudgens sought benefits with the Department of Veterans Affairs (“VA” or “Secretary”) for his service-connected knee injury. JA 105.
A. Regional Office Decisions
Mr. Hudgens filed claims for (1) degenerative joint disease in the right knee; (2) instability in the right knee; and later (3) an evaluation for his prosthetic knee replacement. On December 29, 2006, the VA Regional Office (“RO”) granted Mr. Hudgens‘s claim for benefits based on his degenerative joint disease of the right knee and assigned a 10 percent evaluation. JA 105. On September 28, 2007, Mr. Hudgens filed a claim for an increased evaluation for instability in his right knee. JA 260. On November 21, 2007, the RO assigned an additional 10 percent evaluation for Mr. Hudgens‘s instability in his right knee. JA 260, 263.
On February 3, 2009, after receiving the results of Mr. Hudgens‘s then-recent VA orthopedic exam, the RO reduced the rating for Mr. Hudgens‘s right knee instability from 10 to 0 percent. JA 267. The RO still continued the previously assigned 10 percent evaluation for degenerative joint disease. JA 266. After filing a second claim for increased evaluation of his knee instability and having it denied by the RO on April 22, 2009, Mr. Hudgens filed a Notice of Disagreement. JA 275. Mr. Hudgens underwent another VA orthopedic exam, but the RO again found that the 0 percent evaluation for right knee instability was warranted. JA 288.
On March 16, 2010, Mr. Hudgens filed a second Notice of Disagreement, this time arguing that he should be awarded 100 percent evaluation for his prosthetic knee replacement under DC 5055. Under the heading “Prosthetic Implants” DC 5055 states:
5055 Knee replacement (prosthesis).
Prosthetic replacement of knee joint:
For 1 year following implantation of prosthesis....................................................................................100
With chronic residuals consisting of severe painful motion or weakness in the affected extremity......................................................................................60
With intermediate degrees of residual weakness, pain or limitation of motion rate by analogy to diagnostic codes 5256, 5261, or 5262.
Minimum rating............................................................30
B. Board Decision
Mr. Hudgens appealed the RO‘s rating decisions to the Board. JA 70. On December 26, 2012, the Board denied Mr. Hudgens: (1) a disability rating of greater than 10 percent for degenerative joint disease of the right knee; (2) a disability rating of greater than 10 percent for instability in the right knee; and (3) entitlement to a compensable disability rating for instability in the right knee for the time period between the two VA orthopedic exams. JA 79. The Board additionally concluded that DC 5055 does not apply to Mr. Hudgens because he “underwent only a ‘partial’ knee replacement, and not the total prosthetic replacement of the knee joint contemplated [by DC 5055].” JA 77. The Board did not address whether DC 5055 can be applied to Mr. Hudgens by analogy. Id.
C. Veterans Court Decision
On January 30, 2013, Mr. Hudgens appealed the Board‘s decision to the Veterans Court. JA 16. Mr. Hudgens argued that the Board erred in finding that DC 5055 does not apply to partial knee replacements. Hudgens, 26 Vet. App. at 560. The Veterans Court disagreed. Id. at 565. In rendering its decision, the Veterans Court considered the plain meaning of the term “knee joint” in DC 5055. Id. at 561. After looking to a medical dictionary for guidance, the Veterans Court concluded that DC 5055 is unambiguous and applies to the prosthetic replacement of the whole knee joint, which must include all three components of the knee. Id. The Veterans Court also concluded that such a definition was “consistent with the overall statutory scheme.” Id. In particular, the Veterans Court looked to a related regulation, DC 5054, which addresses prosthetic hip replacements. Hudgens, 26 Vet. App. at 561. The Veterans Court reasoned that, since DC 5054 explicitly includes language relating to a partial hip replacement, the VA Secretary “knew how to provide benefits for a prosthesis replacing part of a joint, as opposed to the entire joint, when he intended to.” Id. Finally, because the Veterans Court found DC 5055 to be unambiguous, it was not swayed by the fact that the majority of prior Board decisions were inconsistent with the Veterans Court‘s current interpretation of this regulation. Id. at 562-63.
After disposing of this interpretive issue, the Veterans Court remanded several of Mr. Hudgens‘s other claims to the Board. Id. at 565. The Veterans Court asked the Board to address whether Mr. Hudgens‘s partial knee replacement can be rated by analogy to DC 5055.1 Id. at 564. The Veterans Court also vacated the Board‘s decision on the issues of right knee instability and degenerative joint disease, remanding these matters to the Board for further adjudication. Hudgens, 26 Vet. App. at 565. Specifically, the Veterans Court found that the Board “failed to address the evidence of right knee dislocation, swelling, and pain or explain why they are not evidence of ‘cartilage, semilunar, removal of, symptomatic.‘” Id. at 564-65 (citing DC 5259).
Chief Judge Kasold dissented with respect to the majority‘s holding that DC 5055 does not apply to partial
knee replacements, finding the regulation to be ambiguous. Id. (Kasold, C.J., dissenting).
On July 17, 2014, Mr. Hudgens filed a motion for reconsideration regarding the Veterans Court‘s interpretation of DC 5055. Hudgens v. McDonald, No. 13-0370, 2014 U.S. App. Vet. Claims LEXIS 1769, at *1 (Vet. App. Oct. 20, 2014). On October 20, 2014, the Veterans Court denied the motion, with Chief Judge Kasold again dissenting. Id. at *3. Mr. Hudgens timely appealed to this court.
D. New Agency Interpretation of DC 5055
On July 16, 2015, twelve days before the Secretary‘s final brief was due with this court, the VA published a final informal rule relevant to this litigation. Appellant Reply Br. at 1 (citing Agency Interpretation of Prosthetic Replacement of Joint, 80 Fed. Reg. 42,040 (Dep‘t of Veterans Affairs July 16, 2015) [hereinafter Agency Interpretation]). The regulation explains that “[i]n view of the . . . VA‘s longstanding interpretation, VA is amending its regulations to clarify that the language of § 4.71a, Prosthetic Implants, which refers to replacement of the named joint, refers to replacement of the joint as a whole, except where it is otherwise stated under DC 5054.” Agency Interpretation at 42,040–41.
STANDARD OF REVIEW
“We have the authority to decide all relevant questions of law and can set aside a regulation or an interpretation of a regulation relied upon by the Court of Appeals for Veterans Claims when we find it to be arbitrary, capricious, and an abuse of discretion, or otherwise not in accordance with law; contrary to constitutional right, power, privilege, or immunity; in excess of statutory jurisdiction, authority, or limitations, or in violation of a statutory right; or without observance of procedure required by law.” Bustos v. West, 179 F.3d 1378, 1380 (Fed. Cir. 1999); see
DISCUSSION
Mr. Hudgens asks that we reverse the Veterans Court‘s judgment that an evaluation for DC 5055 is limited to instances in which a claimant undergoes a full knee replacement. The VA argues that we do not have jurisdiction to hear Mr. Hudgens‘s appeal, and that, if we do, the Veterans Court‘s judgment should be affirmed. We first address the parties’ jurisdictional dispute before turning to the merits of Mr. Hudgens‘s appeal.
A. Jurisdiction
Mr. Hudgens argues that, although the Veterans Court‘s remand order means that its decision is not final as to all issues presented, this court has jurisdiction because this appeal satisfies the Williams standard for finality on discrete and separable
This court‘s review of Veterans Court decisions is governed by
[W]e will depart from the strict rule of finality when the Court of Appeals for Veterans Claims has remanded for further proceedings only if three conditions are satisfied: (1) there must have been a clear and final decision of a legal issue that (a) is separate from the remand proceedings, (b) will directly govern the remand proceedings or, (c) if reversed by this court, would render the remand proceedings unnecessary; (2) the resolution of the legal issues must adversely affect the party seeking review; and, (3) there must be a substantial risk that the decision would not survive a remand, i.e., that the remand proceeding may moot the issue.
275 F.3d at 1364 (footnotes omitted).
There is no question that Mr. Hudgens meets factors (1)(a) and (2) of the Williams test. The Veterans Court‘s interpretation of DC 5055 was a clear and final decision that is separable from the remanded issues, which relate to separate claims for relief. And, Mr. Hudgens will be harmed because the Board on remand will not address his rating under DC 5055, and “rather than receiving the automatic minimum rating under DC 5055 for having a knee replacement, he [will have] to seek a rating under Section 4.20 [rating by analogy] and meet the requirements called for by it.” Appellant Reply Br. at 13. The parties dispute, however, whether Mr. Hudgens meets the third Williams factor.
Mr. Hudgens argues that his case meets the third factor of Williams, asserting that “the applicability of Diagnostic Code 5055 will not be addressed in the remand,” and there is a substantial risk that the resolution of the remaining issues will moot the currently-appealed issue. Appellant Br. at 10. The VA disagrees, contending that this case is akin to Myore, Donnellan, and Joyce, where this court held that it lacked jurisdiction over the appealed remand orders of the Veterans Court. See Myore v. Principi, 323 F.3d 1347 (Fed. Cir. 2003); Donnellan v. Shinseki, 676 F.3d 1089 (Fed. Cir. 2012); Joyce v. Nicholson, 443 F.3d 845, 850 (Fed. Cir. 2006). We briefly review these cases.
In Myore, a widow of a deceased veteran claimed veterans benefits under
may seek review of that court‘s interpretation of [the statute] on what will then be a final judgment.” Id.
Likewise, in Donnellan, the Veterans Court remanded the case to the Board after finding that Mr. Donnellan was not entitled to a statutory presumption of aggravation. 676 F.3d at 1091. Mr. Donnellan appealed to this court, arguing that this remand order was final because “he may be able to meet the burden imposed by the Veterans Court and prevail on his claim; if he does, the legal issue [of the statutory presumption] he seeks to present to this court will not reach this court in his case.” Id. This court rejected Mr. Donnellan‘s argument, holding that “[t]he risk that a decided issue will not survive a remand does not include the possibility that the appellant will prevail on remand and therefore will not need to take another appeal.” Id. at 1092. In particular, we noted in Donnellan that the “test for whether [an] issue may evade review is whether, if the claimant loses on remand, the claimant will not be able to raise the issue on appeal from an adverse final judgment.” Id. (citing Myore, 323 F.3d at 1352).
Finally, in Joyce, we clarified that there is a distinction between veterans cases in which a single claim is being adjudicated and cases in which multiple claims are being adjudicated. 443 F.3d at 850. In cases involving a single veteran‘s claim, if a claimant loses on remand and the Veterans Court upholds the Board, the claimant will be able to “raise any objections to the judgment that was entered [on appeal], whether the errors arose from the original Court of Appeals for Veterans Claims decision or the second and final decision.” Id. (emphases added). On the other hand, if a veteran‘s case involves separate claims for relief, “under some circumstances review is available for a claim for which final judgment has been entered even if other, separate claims have been remanded.” Id. at 850 (discussing Elkins v. Gober, 229 F.3d 1369, 1376 (Fed. Cir. 2000)). In particular, in Elkins, we held
that “[b]ecause . . . each ‘particular claim for benefits’ may be treated as distinct for jurisdictional purposes, a veteran‘s claims may be treated as separable on appeal.” Elkins, 229 F.3d at 1376 (quoting Maggitt v. West, 202 F.3d 1370, 1376 (Fed. Cir. 2000)). We cautioned, however, that “we will not review final judgments on separable claims where other claims are still pending if our review would ‘disrupt the orderly process of adjudication‘—for example, where the appealed claim is ‘inextricably intertwined’ with the remanded claim.” Joyce, 443 F.3d at 850.
Here, we conclude that Mr. Hudgens‘s case is distinguishable from those at issue in Myore and Donnellan, each of which involved appeals from remand orders in cases involving a single claim for veterans’ benefits. Instead, Mr. Hudgens‘s case falls within the jurisdictional exception for separate remanded claims, as explained in Joyce. Here, the claims remanded by the Veterans Court are separate claims for right knee disability distinct from the non-remanded claim of whether Mr. Hudgens is entitled to an evaluation for prosthetic knee replacement under DC 5055. Mr. Hudgens‘s path to achieving a rating under DC 5055 is thus a separate claim that cannot be reviewed by the Board on remand. Nor does Mr. Hudgens‘s appeal
B. Whether DC 5055 Covers Partial Knee Replacement
We now address whether the Veterans Court erred in holding that DC 5055 is limited to instances where a claimant has undergone a full knee replacement. The VA argues that the Veterans Court did not err in concluding that DC 5055 unambiguously applies only to full knee replacements, and if ambiguous, the Secretary‘s interpretation of DC 5055 is entitled to deference under Auer v. Robbins, 519 U.S. 452 (1997). Appellee Br. at 40. Mr. Hudgens argues that the Veterans Court‘s interpretation of DC 5055 must be reversed. He contends that the rule unambiguously does apply to all knee replacements, even partial ones, and that, under Gardner any “interpretive doubt is to be resolved in the veteran‘s favor.” Appellant Br. at 45 (citing Gardner, 513 U.S. at 118). Mr. Hudgens argues that Auer deference is not warranted in this case and, thus, cannot displace the rule of Gardner.
While we are not prepared to say that DC 5055 unambiguously includes partial knee replacements, we agree with Mr. Hudgens that (1) DC 5055 does not unambiguously exclude such replacements; (2) the VA‘s interpretation of DC 5055 is not entitled to deference under Auer; and (3) Gardner compels the conclusion that the Veterans Court erred in its judgment that DC 5055 is limited to instances of full knee replacement. With respect to the first point, it is undisputed that the regulation does not expressly state that the only prosthetic implants covered are those for full knee replacements. While the Veterans Court in this case cited a dictionary for the proposition that the “knee joint” is generally considered to be made up of a number of component parts, there is nothing in the regulation that expressly states that all of those component parts must be replaced by a prosthesis before DC 5055 applies. And, the government does not seem to dispute Mr. Hudgens‘s contention that even total knee replacements rarely replace or alter all of
the components of the knee referenced in the Veterans Court‘s cited dictionary definition, such that the practical effect of reliance on that definition would exclude almost all knee replacements from the reach of DC 5055.2 It is notable, moreover, that 11 out of 14 of the Board‘s decisions regarding DC 5055 found that DC 5055 is applicable to partial knee replacements, largely because it does not expressly exclude that form of prosthetic implant. Indeed the Veterans Court itself previously has held that DC 5055 applies to partial knee replacements because it does not unambiguously state the contrary. Taylor v. Shinseki, No. 10-2588, 2012 U.S. App. Vet. Claims LEXIS 1219 (June 18, 2012)
Turning to the second question—whether Auer deference requires that we accept the Secretary‘s current
interpretation of DC 5055—we conclude it does not. Under Auer, an agency‘s interpretation of its own regulation controls, unless the interpretation is “plainly erroneous or inconsistent with the regulation.” Auer, 519 U.S. at 461. Auer itself explained, however, that in order for this deference to apply, the interpretation must “reflect the agency‘s fair and considered judgment on the matter in question.” Id. at 462. In Christopher v. Smithkline Beecham, the Supreme Court further clarified that deference to an agency‘s interpretation is “unwarranted” when “the agency‘s interpretation conflicts with a prior [agency] interpretation, or when it appears that the interpretation is nothing more than a ‘convenient litigating position,’ or a ‘post hoc rationalizatio[n]’ advanced by an agency seeking to defend past agency action against attack.” 132 S. Ct. 2156, 2166 (2012) (citations omitted).
First, we reject the VA‘s argument that “the Secretary has consistently interpreted DC 5055 as applying only to total knee replacements.” VA Br. at 36. In advancing this argument, the VA cites to the Secretary‘s arguments in Taylor v. Shinseki and to the Agency Interpretation. VA Br. at 37. The Secretary asks that we disregard the numerous inconsistent rulings by the Board, stating that “they are not synonymous with the VA‘s position on an issue” and that “if the Secretary disagrees with a board decision, he is unable to assert this position because he cannot appeal [it].” VA Br. at 31. These arguments are unpersuasive. As Chief Judge Kasold explained, “[t]he Board renders the final decision for the Secretary on all questions in matters affecting the provision of benefits, subject only to the statutes governing such benefits and related judicial rulings, as well as VA regulations, instructions of the Secretary, or VA General Counsel opinions.” Hudgens, 26 Vet. App. at 566 (Kasold, C.J., dissenting) (citing
If the Secretary is dissatisfied with the Board‘s interpretation of a regulation, the Secretary may instruct the
Board regarding what the Secretary believes is the correct interpretation, and such instructions are binding on the Board.
Second, we cannot ignore that, during the pendency of this appeal, the agency found the need to clarify the language of a regulation that it now argues has always been clear on its face. In these circumstances, it is difficult to avoid the conclusion that the regulation is sufficiently ambiguous to lead to conflicting rulings and that current agency interpretation of DC 5055 was conveniently adopted to support the Veterans Court‘s interpretation in this case. Such “post hoc rationalization” does not warrant deference under Auer, particularly when the agency‘s interpretation conflicts with the Veterans Court‘s prior decision in Taylor. See Christopher, 132 S. Ct. 2156
(finding “strong reasons for withholding the deference that Auer generally requires”).4 We accordingly decline to apply Auer deference to the VA‘s interpretation of DC 5055 in this case.
Mr. Hudgens argues that we are bound to apply the Gardner presumption to resolve any doubt in the interpretation of DC 5055 in his favor. Appellant Br. at 45 (citing Gardner, 513 U.S. at 118). In these circumstances, we agree.5 “[E]ven if the government‘s asserted interpretation of [DC 5055] is plausible, it would be appropriate under Brown [v. Gardner] only if the statutory language unambiguously [supported the government‘s interpretation].” Sursely v. Peake, 551 F.3d 1351, 1357 (Fed. Cir. 2009). Here, we find that Mr. Hudgens‘s interpretation of DC 5055 is permitted by the text of the regulation. DC 5055 is under the heading “Prosthetic Implants” and
merely lists a schedule of ratings for the condition “Knee replacement (prosthesis),” without elaboration or limitation of the condition. See
We therefore reverse the judgment of the Veterans Court holding that Mr. Hudgens is not entitled to an evaluation for his prosthetic knee replacement under DC 5055. In light of our decision, it is unnecessary for the Board to determine whether Mr. Hudgens‘s partial knee replacement can be rated by analogy to DC 5055. Our decision today leaves intact the judgment
CONCLUSION
For the above reasons, we reverse the judgment of the Veterans Court on the issue of whether DC 5055 covers partial knee replacements, and we remand for further proceedings consistent with this opinion.
REVERSED AND REMANDED