The appellants, veteran Danny Bowles and his counsel, attorney James W. Stanley, Jr., appeal a July 18, 1994, Board of Veterans’ Appeals (BVA or Board) decision denying the counsel’s motion for a formal order finding that the fees charged (but not yet paid) under the October 1993 fee agreement between the two were for services rendered after a final decision by the Board. Record (R.) at 9-10. For the reasons that follow, the Court will affirm the Board decision.
I. Background
The veteran had active service in the U.S. Army from August 1970 to December 1971. R. at 15. In December 1989, a Department of Veterans Affairs (VA) regional office (RO) granted him service connection for post-traumatic stress disorder (PTSD) and assigned a 30% disability rating, effective from July 24, 1989. R. at 41-42. In February 1991, the VARO continued the 30% rating. R. at 44. In February 1992, VA received notice from the veteran of his appointment of James Stanley, Esq., as his authorized representative. R. at 67, 71. That same month, the veteran filed a Notice of Disagreement (NOD). See R. at 46,191.
After a hearing at the RO, in May 1992 the hearing officer denied a PTSD rating greater than 30%. See R. at 128-29, 191. In June and July 1992 decisions, the RO continued the December 1989 rating. R. at 133, 175. In an August 1992 Substantive Appeal to the Board, the appellant veteran contended that he was entitled to a 70% rating for PTSD and a 100% rating for total disability based on individual unemployability (TDIU). R. at 184-85.
In December 1992, the Board found that “additional assistance” (R. at 192) and “clarifying evidence” (R. at 194) were required and remanded the case to the RO for the following actions: (1) to obtain and associate with the claims folder any VA vocational rehabilitation folder; (2) to have the veteran complete and return an up-to-date employment information statement; (3) to conduct a VA social and industrial survey which assesses “the impact of the veteran’s psychiatric disorder on his ability to secure and follow substantially gainful employment”; (4) to obtain all relevant records from the Social Security Administration; (5) to schedule an examination by a VA specialist in psychology; and (6) to consider the veteran’s TDIU claim and whether an extra-schedular rating is warranted. R. at 192-93.
The Board stated:
Following completion of these actions, the RO should review the evidence and determine whether the veteran’s claims may now be granted. If not, he and his representative should be provided with a supplemental statement of the case [ (SSOC) ].... Thereafter, the case should be returned to the Board for further appellate review.
R. at 193-94. The decision also notified the veteran as follows: “Under 38 U.S.C.G § 7252 ... only a decision of the [Board] is appealable to the United States Court of Veterans Appeals. This remand is in the
In the August 1993 RO decision on remand from the Board, the RO granted entitlement to a 100% schedular rating for PTSD, effective from January 14, 1991, and stated: “Entitlement to [TDIU] is not a factor as a total 100% evaluation was granted.” R. at 255-56. An RO letter dated September 2, 1993, notified the veteran of the August 1993 RO decision, provided the monthly rates of his benefit payment, enclosed a copy of the decision and a statement of his appeal rights, and stated: “This action constitutes a full grant of the benefits sought by you, and your appeal has been withdrawn.” Supplemental R. at 1.
In December 1993, the veteran sent the RO a letter disagreeing with the effective date assigned by the RO in its August 1993 decision. R. at 265. The letter also stated: “It is further error by the Board of Veterans’ Appeals not to recognize [the veteran’s 1989 informal claim] in its final decision of September 2,1993.” Ibid.
As to the issue of the attorney’s fee, in November 1993 the veteran’s counsel submitted to VA a copy of their October 1993 retainer agreement. R. at 258-60. The contract provided, inter alia: “Client retains the firm of James W. Stanley, Jr., to provide legal services at any time after the first denial decision by the [Board; and c]lient agrees to pay a fee of 25% retroactive benefits in connection with the Client’s claim with [VA]” in the event of a favorable decision on the claim. R. at 259. That same month, in a letter from Mary Gallagher, Counsel to the BVA Chairman, the BVA notified the counsel that the Board’s December 1992 remand was not a final decision by the Board and that fees could not be authorized “for any services ... perforated] before the date that the Board enters a final decision”. R. at 262. In response, the counsel stated in a December 23, 1993, letter that he agreed that the December 1992 remand by the Board was a “preliminary order and not a final decision”; however, he also stated that “the [RO], on behalf of the BVA, issued a final decision on September 2, 1993”, that that decision is a final Board decision because the BVA retained jurisdiction over the appeal while it was remanded to the RO, and that that decision was “partially favorable to the veteran”. R. at 267. A January 1994 letter from the counsel clarifies that the retainer agreement seeks only “to charge [the veteran] for services [rendered] after the [Board’s] final decision — the September 2, 1993[,] award.” R. at 273.
In February 1994, the veteran’s counsel submitted a letter to the BVA wherein he stated that he was “asking the Board ... to enter a formal order finding [that a final Board decision was made]”. R. at 278. He also stated that if the Board finds that there was no final BVA decision and that he is unable to charge a fee, then he contended that “38 U.S.C. [§ ] 5904(c)(1) and 38 C.F.R. [§ ] 20.609(c)(1) are unconstitutional in that they deny the right of counsel and to due process of law”. R. at 278.
In the July 1994 BVA decision here on appeal, the Board denied entitlement to a fee under the October 1993 retainer agreement. The Board found that it had not rendered a final decision on any claim in which the attorney had represented the veteran. R. at 9-10. As to the constitutional arguments raised in the counsel’s letter, the Board concluded that them resolution “exceeded] the jurisdiction of this Board”. R. at 7.
II. Analysis
A. Lack of a Final Board Decision
In the brief submitted on appeal in this Court, the appellants concede that the Board’s December 1992 remand of the case to the RO for further development was a “preliminary order” (Brief (Br.) at 10), but contend that the August 1993 RO decision “was, in fact, a ‘final decision’ by the [Board] for purposes of 38 U.S.C. § 5904” because the RO “merely issued an order as a surrogate of the BVA upon remand” (Br. at 11) when the Board had “continuing jurisdiction [over] the case” (Br. at 10) under Hamilton v. Brown,
The appellants argue that once the August 1993 decision had been issued, the veteran was “free to retain the services of his counsel
Contrary to the Secretary’s arguments, the issue before the Court is not whether the Board’s December 1992 decision remanding the case to the RO constituted a final decision of the Board. It clearly did not, and the appellants so conceded in their brief. Rather, the issue is whether the RO’s August 1993 decision on remand from the Board constitutes a “final decision” made by the Board under 38 U.S.C. § 5904(e)(1). See also 38 C.F.R. § 20.609(c)(1) (1995).
Section 5904 of title 38, United States Code, provides:
(c)(1) Except as provided in paragraph (3), in connection with a proceeding before the Department with respect to benefits under laws administered by the Secretary, a fee may not be charged, allowed, or paid for services of agents and attorneys with respect to services provided before the date on which the Board of Veterans’ Appeals fírst makes a fínal decision in the case. Such a fee may be charged, allowed, or paid in the case of services provided after such date only if an agent or attorney is retained with respect to such ease before the end of the one-year period beginning on that date. The limitation in the preceding sentence does not apply to services provided with respect to proceedings before a court.
38 U.S.C. § 5904(c)(1) (emphasis added). The Court’s decision in In the Matter of the Fee Agreement of William G. Smith in Case Number 91-4,88 [hereinafter Matter of Smith II] explained some history with respect to this provision:
Prior to the enactment of the Veterans’ Judicial Review Act (VJRA), Pub.L. No. 100-687, Div. A, 102 Stat. 4105 (1988), an attorney or agent was proscribed from charging a claimant more than $10 for representation before the VA or the [Board] on a veteran[s’] benefits claim. See Act of July 14, 1862, §§ 6, 7, 12 Stat. 566, 568 (imposing $5 fee limitation); Act of July 4,1864, §§ 12, 13, 13 Stat. 387, 389 (raising $5 fee limitation to $10, the prevailing limit until implementation of the VJRA in 1988).... The objective of the fee limitation was to maintain the informality of the VA’s claims adjudication process. See Walters v. National Association of Radiation Survivors [ (NARS) ],473 U.S. 305 , 323-27,105 S.Ct. 3180 , 3190-92,87 L.Ed.2d 220 (1985). Recognizing that claimants seeking judicial review of the denials of claims for veterans benefits needed qualified representation at reasonable costs (see Matter of Smith,1 Vet.App. 492 , 502 (1991) (Steinberg, J. concurring)), Congress repealed the $10 fee limitation; revised subsection (c) of 38 U.S.C.A. § 5904 (formerly § 3404); and added a new subsection (d) which permitted claimants to enter into fee agreements with attorneys and agents to represent them in benefits proceedings before the VA, BVA, and this Court, under certain specified circumstances. See VJRA, Pub.L. No. 100-687, §[§ ] 104(a), [ ] 401, 403,102 Stat. at 4108, 4122 .
Matter of Smith II,
Pursuant to section 5904(c)(1), “[a] fee agreement may be entered into between a claimant and an attorney for services provided only after the BVA makes a final decision on the issue or issues involved in the case”. Matter of Smith II,
For the reasons that follow, the Court holds that the August 1993 RO decision in the present case was not a final Board decision. Pursuant to 38 C.F.R. § 19.38:
When a ease is remanded by the [Board,] the [AOJ] will complete the additional development of the evidence or procedural development required. Following completion of the development, the case will be reviewed to determine whether the additional development, together with the evidence which was previously of record, supports the allowance of all benefits sought on appeal. If so, the Board and the appellant and his or her representative, if any, will be promptly informed. If any benefits sought on appeal remain denied following this review, the [AOJ] will issue a[n SSQC] ... [and] the case will be returned to the Board for further appellate processing
38 C.F.R. § 19.38 (1995) (emphasis added). In its opinion in Hamilton, swpra, the U.S. Court of Appeals for the Federal Circuit suggested that an RO can act as either an agency of original jurisdiction or as “an arm of the Board”:
According to 38 C.F.R. § 19.182(c) [now 38 C.F.R. § 19.38], a case which has been remanded to the unit which made the initial determination [ (the RO) ] is automatically returned to the Board for further processing if full relief is not awarded by the [RO] on remand. As the regulation puts it, “[u]nless the benefits at issue on appeal are awarded upon review by the [RO], the records will be returned to the [Board] for completion of appellate review. ” It is thus apparent that the Agency on remand is acting as an arm of the Board and not as an “agency of original jurisdiction” [ (AOJ) ].
Hamilton,
Neither this Court nor the Federal Circuit held in Hamilton that an RO decision made on remand from the Board was a final decision of the Board. And, consistent with applicable law and regulation, it seems inconceivable that an RO decision could ever be a decision of the Board for purposes of a fee agreement under section 5904(e)(1) even if the RO completed the Board’s appellate review function by awarding all benefits sought on appeal (see 38 C.F.R. § 19.38), or even if the claimant withdrew his or her NOD (see 38 C.F.R. § 20.204(c) (1995) (only a claimant or his or her representative may withdraw NOD)) or otherwise acquiesced in the RO’s decision. See Hamilton,
The RO here was thus acting on behalf of the Board only in the sense that that decision “facilitated the Board’s appellate review”, and the appellants must fail in their quest to have the Court treat that RO decision as a BVA decision. Hamilton,
B. Constitutionality of Fee Limitation
The appellants contend that if the Court holds that the August 1993 RO decision was not a final BVA decision, then 38 U.S.C. § 5904(c)(1) “impermissibly restricts the right of a veteran ... to hire, pay, retain, employ, and utilize the services of an attorney in violation of the due process clause of the 5th Amendment of the U.S. Constitution” and the ability of veterans to retain counsel to prosecute their appeals to this Court. Br. at 12-13. They assert that a restriction of such a right at the administrative level effectively precludes later representation on appeal and that the “current lack of representation before this [C]ourt and the high number (80%) of pro se appeals can be attributed in large part to the inability of veteran litigants to retain attorneys and other representatives and to be able to pay them at the outset of their cases when the most meaningful development of the claim may take place.” Br. at 14. The Secretary responds that the constitutionality of the fee limitation has previously been upheld by the Supreme Court in Walters v. NARS,
Although the Board did not issue a final decision on the appellants’ constitutional issues, they were raised to the Board and require no further factual development by the Board. See Saunders v. Brown,
1. Law on Standing. Under 38 U.S.C. § 7266(a), in order to seek review in this Court, an individual must be “adversely affected” by the BVA decision appealed. 38 U.S.C. § 7266(a). As stated by the Court in Landicho v. Brown, “[t]his requirement of aggrievement echoes the standing requirement that a party must ‘show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the [appellee]’.” Landicho,
3. Standing of appellant attorneg. We turn next to the standing of the appellant attorney. For the reasons set forth below, the Court concludes that he also lacks standing to bring this appeal.
a. Article III standing: Although the appellant counsel provided representation to the veteran and thus cannot show that there has been a denial of attorney representation, he nonetheless has basic Article III standing to bring a constitutional challenge with respect to 38 U.S.C. § 5904(e)(1) because he suffers a loss of fees (a concrete injury) from the operation of the challenged statute. He has performed legal services for the veteran at the administrative level prior to a final Board decision. If counsel prevails in his suit to remove the fee limitation, he will benefit because he will then receive payment for such legal services. See Singleton,
b. Third-party-rights standing; prudential factors: As to the second inquiry—the prudential one—regarding standing to assert a third party’s potential rights, the appellant attorney does not raise his own legal rights and interests, but those of the appellant veteran and all veterans. He contends that the fee limitation in section 5904(c)(1) contravenes third-party veterans’ due process rights because, by prohibiting attorney compensation at the administrative level prior to the issuance of a final Board decision, the limitation renders veterans unable to obtain legal representation for their VA claims at the outset of their cases which then prevents them from obtaining counsel in prosecuting appeals in this Court. “Ordinarily, of course, a litigant ‘must assert his [or her] own legal rights and interests, and cannot rest his [or her] claim to relief on the legal rights or interests of third parties.’” U.S. Dept. of Labor v. Triplett,
In answering the prudential inquiry involved in questions of third-party-rights standing, the Supreme Court has held that three factors are to be examined in determining whether an exception to the general rule should be made: (1) The “relationship of the litigant to the person whose rights are being asserted”; (2) “the ability of the person to advance his own rights”; and (3) “the impact of the litigation on the third-party interests”. Caplin & Drysdale, supra (citing numerous cases, including Singleton,
The U.S. Courts of Appeals for the Third and D.C. Circuits have noted an apparent inconsistency in the application of the prudential factors by the Supreme Court. See FEC,
i. First prudential factor: In analyzing the first factor (the relationship of the litigant to the person whose rights are being asserted), the Supreme Court has espoused the following guiding principle: “When ... enforcement of a restriction against the litigant prevents a third party from entering into a relationship with the litigant (typically a contractual relationship), to which the third party has a legal entitlement (typically a constitutional entitlement), third-party[rights] standing has been held to exist.” Triplett,
Further as to the first factor, the petitioner in Triplett challenged the constitutionality of the Department of Labor’s administration of a provision of the Black Lung Benefits Act of 1972 that prohibited the acceptance of attorney fees for the representation of claimants, except such fees as are approved by the Department. Triplett,
In this case, the appellant attorney seeks to challenge a direct restriction on his own activity (charging a fee prior to the. issuance of a final Board decision) on the ground that enforcement of the restriction against him would essentially prevent VA claimants in general from entering into a relationship with him. Such circumstances would appear to satisfy the first factor; however, the third party here has not been identified as consisting of a particular individual whose rights have actually been affected. Rather, the appellant attorney is attempting to assert the rights of all veterans in general and the rights of the appellant veteran. Unlike the facts in Caplin & Drysdale and Triplett, the appellant veteran here has not, as discussed above, alleged that he, and counsel is not asserting that any particular veteran (including the appellant veteran), has experienced any adverse effect as to VA benefits as a result of the application of section 5904(e)(1), and the appellant attorney has thus not shown that a due process right to representation has been placed at issue here. In the instant case, although there is a concrete restriction on legal fees, such restriction did not impair the ability of the particular appellant veteran to hire an attorney and the willingness of this particular appellant attorney to represent him. Counsel here represented the veteran at the VA administrative level, prior to the issuance of a final Board decision.
Moreover, this is not a ease where a VA claimant or the appellant veteran obtained counsel after a final Board decision and is asserting that if they had had counsel before that final Board decision, they would have a better case on appeal to this Court. The requirement of a final Board decision under section 5904 has thus not been alleged or shown to have interfered with the appellant attorney’s representation of the appellant veteran in this case or of any other particular VA claimant. Moreover, unlike the situation in Walters and Triplett, there is no assertion that the government is seeking to take away a benefit previously provided. Walters,
As to counsel’s claim on behalf of the appellant veteran and all VA claimants, we hold that although the first prudential factor (relationship of the litigant to the person whose rights are being asserted) weighs in favor of standing in view of the Supreme Court’s finding that the attorney-client relationship “is one of special consequence”, the weight to be accorded this factor is quite weak in the instant case. Unlike the representation at stake in Caplin & Drysdale and Triplett, as discussed above, the attorney-client relationship being asserted does not, as to the appellant veteran, involve an interference with any due process right to representation and, as to all VA claimants, any such relationship is purely speculative. The Court notes that the first factor would have been sufficient to allow standing in this case if there had been at interest the right to representation of an actual, tangible person, see FEC,
ii. Second prudential factor: The second factor (the ability of the person to advance his own rights) weighs against finding standing because VA claimants do not face the type of obstacles to bringing their own challenges that ordinarily weigh in favor of finding third-party-rights standing. For example, VA claimants do not face a fear of being prosecuted for asserting a constitutional right such as in the ease of a patient who may “be chilled from such assertion by a desire to protect the very privacy of her decision [to an abortion] from the publicity of a court suit”; nor is there the presence of an imminent mootness such as in the case of an individual patient whose right is “irrevocably lost” because of the elapse of time if her finances preclude procuring a medical procedure. Singleton,
VA claimants are also not forced to forgo their rights in order to assert them, as the members in National Association for the Advancement of Colored People v. Alabama,
iv. Balance of prudential factors: Accordingly, the Court is of the view that, at most, one of the prudential factors tends to “counsel[ ] for review here”. In light .of the above discussion of the caselaw and the ambiguity in it, the Court believes that if only one factor favors review, that factor should apply unequivocally, that is, its weight should be strong and clear. Here, as described above, the first factor’s weight on the facts before us is quite weak and speculative. The Court thus concludes that in this case the appellant attorney lacks third-party-rights standing because the prudential factors do not outweigh the policies behind the general rule that a party may not attack governmental action on the ground that it infringes the rights of some third party.
2. Merits. The Court acknowledges that the question whether the attorney appellant lacks standing to assert the third-party-potential rights of all VA claimants is a close one in this case and notes that no clear precedent exists which is dispositive of the issue presented. In light of this, the Court will consider the merits of the claim on the assumption that the attorney appellant has standing to bring this third-party constitutional challenge. For the reasons discussed below, the Court holds, alternatively, that no showing has been, made that the fee limitation in 38 U.S.C. § 5904(c) for representation before VA violates a Fifth Amendment right to due process or a First Amendment right to freedom of speech and to petition the government.
a. Due process: In Walters, the Supreme Court held that the pre-VJRA $10.00 fee limit was not unconstitutional as violative of due process. Walters,
Following the enactment of the VJRA and the establishment of this Court, the U.S. Court of Appeals for the Ninth Circuit stated that Walters “left open the possibility of a constitutional attack on the fee limit as applied to particular classes of veterans” and held that there was no due process violation in the case before it. NARS,
Given our findings as to the government and private interests at stake in this case, and given that the issue is whether the presence of attorneys would “sharply diminish” the probability of error in the adjudication of [claims based on exposure to ionizing radiation during service], we conclude that the evidence presented does not satisfy the extraordinarily strong showing standard set forth in Walters, and we find no due process violation.
NARS,
Similarly, we conclude that the appellant attorney here has not shown by evidence that the limit on fees for representation in VA’s administrative process reduces the availability of representation in this Court or that representation before the Court makes a significant difference in the outcome (the Court is not making negative findings in these respects, but is deciding only that the appellant has not carried the burden of demonstrating any such effects). The appellant attorney’s arguments regarding such impact are purely speculative. Accordingly, the Court holds that there has been no Fifth Amendment constitutional violation.
b. Freedom of speech; petition. In Walters, the Supreme Court concluded that the analysis of the First Amendment argument also raised there by the veteran claimants was essentially the same as that under the Due Process Clause. Walters,
III. Conclusion
Upon consideration of the record and the briefs and in view of the foregoing analysis, the Court holds that the appellants have not demonstrated that the BVA committed error in its July 18,1994, decision, and thus affirms that decision.
AFFIRMED.