National Organization of Veterans' Advocates, Inc. v. Secretary of Veterans AffairsNational Organization of Veterans' Advocates, Inc. v. Secretary of Veterans Affairs
National Organization of Veterans’ Advocates, Inc., (“NOVA”), Disabled American Veterans (“DAV”), and Paralyzed Veterans of America (“PVA”) (collectively, “petitioners”), challenge the validity of a regulation promulgated by the Department of Veterans Affairs,
BACKGROUND
Initially it is useful to briefly review the statutory scheme governing the award of DIC benefits to survivors of deceased veterans.
Under chapter 13 of title 38, United States Code, the Department of Veterans Affairs is authorized to pay DIC benefits to survivors of a deceased veteran whose death is due to a disability incurred during the veteran’s military service (“service-connected disability”).
[I]n the case of the death of a veteran who at the time of death was in receipt of or was entitled to receive ... compensation for a service-connected disability that was rated totally disabling for a continuous period of at least eight years immediately preceding death.
A different statute is involved here.
In 1978, however, Congress, by enacting
Benefits ... shall be paid to a deceased veteran’s surviving spouse ... or children in the same manner as if the veteran’s death is service-connected when the following conditions are met:
(1) The veteran’s death was not caused by his or her own willful misconduct; and
(2) The veteran was in receipt of (or but for the receipt of military retired pay was entitled to receive) compensation at time of death for service-connected disability that either:
(i) Was continuously rated totally disabling ... for a period of 10 or more years immediately preceding death; or
(ü) Was continuously rated totally disabling ... from the date of the veteran’s discharge or release from active duty for a period of not less than 5 years immediately preceding death.
In 1981 the General Counsel of the Department of Veterans Affairs issued an opinion that concluded, in pertinent part, that “
In response to that General Counsel opinion, Congress in 1982 amended
[N]ot as the result of the veteran’s own willful misconduct, and who was in receipt of or entitled to receive ... compensation at the time of death for a service-connected disability rated totally disabling if
(1) the disability was continuously rated totally disabling for a period of 10 or more years immediately preceding death; [or]
(2) the disability was continuously rated totally disabling for a period of not less than five years from the date of such veteran’s discharge or other release from active duty.
In sum,
The Language and Judicial Interpretations of
As noted above,
[I]n the case of the death of a veteran who at the time of death was in receipt of or was entitled to receive ... compensation for a service-connected disability that was rated totally disabling for a continuous period of at least eight years immediately preceding death.
In Hix v. Gober,
We affirmed, noting that the requirements of
The Language and Judicial Interpretations of
In 1983, the Department of Veterans Affairs revised
Following these revisions, the Court of Appeals for Veterans Claims in several cases involving the eligibility of survivors for DIC benefits, broadly interpreted the “entitled to receive” language of
The Court of Appeals for Veterans Claims disagreed, concluding that
[A]s we interpret the applicable law and regulation insection 1318(b) and§ 3.22(a)(2) , a ,. claim [of clear and unmistakable error by the Department of Veterans Affairs] is not the sole way for a survivor to show the veteran’s entitlement as of the time of the veteran’s death. Rather, the survivor is given the right to attempt to demonstrate that the veteran hypothetically would have been entitled to receive a different decision on a service-connection-related issue ... based on evidence in the veteran’s claims file or [Department of Veterans Affairs’] custody prior to the veteran’s death and the law then or subsequently made retroactively applicable.
Id. at 118; see also, e.g., Wingo v. West,
The 2000 Revisions to
On January 21, 2000, the Department of Veterans Affairs promulgated a final rule in the Federal Register (that became effective that same day) captioned “DIC Benefits for Survivors of Certain Veterans Rated Totally Disabled at Time of Death.” See 65 Fed.Reg. 3,388 (Jan. 21, 2000) (“Final Rule”). This Final Rule is challenged here.
The Final Rule revised
Second, it revised subsection (b) to expressly define “entitled to receive” as effectively limited to a situation where the veteran’s failure to receive benefits is “due solely to clear and unmistakable error” by
[A]t the time of death, the veteran had service-connected disability rated totally disabling by VA but was not receiving compensation because: ... (3) The veteran had applied for compensation but had not received total disability compensation due solely to clear and unmistakable error in a VA decision concerning the issue of serviсe connection, disability evaluation, or effective date....
The Department of Veterans Affairs made clear in the explanatory text accompanying the Final Rule that it had revised
As noted above, this Final Rule became effective on January 21, 2000. NOVA filed a timely petition for review with this court on March 17, 2000, challenging the validity of
DISCUSSION
I
We have jurisdiction to directly review the validity of both the rulemaking process and the regulation challenged here pursuant to
We conduct this review, as stated above, in accordance with the standards set forth in the Administrative Procedure Act (“APA”),
II
Before considering the merits of the statutory construction reflected in the
The petitioners seriously misunderstand the decision in Bankers Trust and, more importantly, the nature of the judicial function. A final decision of an Article III court binds the parties to that particular controversy as a matter of res judicata. Section 34 of the Restatement (Second) of Judgments, for example, makes clear that “[a] party [to an action] is bound by and entitled to the benefits of the rules of res judicata with respect to determinations made while he was a party,” subject to certain exceptions not applicable here. Restatement (Second) of Judgments § 34(2) (1982).
But that final judiсial decision is not binding on parties in a future case, except in those circumstances where the earlier case would be entitled to collateral estoppel effect. The petitioners here do not assert that the agency in this case is collaterally estopped from re-litigating the issue of statutory construction. Nor could they colorably assert such a claim. Section 28 of the Restatement (Second) of Judgments (1982) makes clear, for example, that “[although an issue is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment,” id., that issue may be re-litigated when it is “one of law and ... the two actions involve claims that are substantially unrelated.” Id. at § 28(2). An accompanying comment emphasizes that this rule applies with particular force when the issue to be re-litigated involves, as herе, “the formulation or scope” of a statute or applicable legal rule:
[I]f the issue is one of the formulation or scope of the applicable legal rule, and if the claims in the two actions are substantially unrelated, the more flexible principle of stare decisis is sufficient to protect the parties and the court from unnecessary burdens. A rule of law declared in an action between two, parties should not be binding on them for all time, especially as to claims arising after the first proceeding has been concluded, when other litigants are free to urge that the rule should be rejected.
Id. at § 28, cmt. b, at 275-76. Thus the only effect of the Court of Appeals for Veterans Claims’ decisions in Green and the subsequent cases is as a matter of stare decisis.
But stare decisis is a doctrine that binds courts to follow their own earlier decisions or the decisions of a suрerior tribunal. As we have previously noted, stare decisis “in essence makes each judgment a statement of the law, or precedent, binding in future cases before the same court or another court owing obedience to its decision.” Mendenhall v. Cedarapids, Inc.,
Thus, it was perfectly appropriate for the Department of Veterans Affairs to attempt to re-litigate the Court of Appeals for Veterans Claims’ construction of
Ill
The petitioners also claim that we should invalidate the regulation because it is a substantive rule (otherwise known as a “legislative rule”) that was not promulgated in accordance with the notice and comment rulemaking procedures of the Administrative Procedure Act. In contrast, the Department of Veterans Affairs stated in the explanatory text accompanying that Final Rule that it had “dispensed” with those statutory requirements because it considered the rule to be interpretive rather than substantive. Final Rule, 65 Fed.Reg. at 3,391.
A determination of whether the Final Rule is substantive or interpretive is significant. The APA provides in pertinent part that when an agency proposes to promulgatе a substantive rule, it must give notice to interested parties and allow them
(b) General notice of proposed rule making shall be published in the Federal Register, unless persons subject thereto are named and either personally served or otherwise have actual notice thereof in accordance with law....
(c) After notice required by this section, the agency shall give interested persons an opportunity to participate in the rule making through submission of written data, views, or arguments.
We have previously explained the distinction between substantive and interpretive rules as follows:
“[S]ubstantive rules” [are] those that effect a change in existing law or policy or which affect individual rights and obligations. “Interpretative rules,” on the other hand, clarify or explain existing law or regulation and are exempt from notice and comment undersection 553(b)(A) .... “[A]n interpretative statement simply indicates an agency’s reading of a statute or a rule. It does not intend to create new rights or duties, but only reminds affected pаrties of existing duties.”
Paralyzed Veterans of Am. v. West,
Petitioners argue that the January 2001 revisions are substantive because they “modify existing law,” id., namely, the decisions of the Court of Appeals for Veterans Claims in Green, Carpenter, and Win-go. We do not agree. Those decisions rested in large part on the Court of Appeals for Veterans Claims’ interpretation of the earlier version of
This conclusion finds support in decisions of at least four of our sister courts of appeals, namely, the Second, Seventh and Ninth Circuits and the District of Columbia Circuit.
The Second, Seventh and Ninth Circuits have concluded that an interpretive rule may change or clarify an agency’s interpretation of its governing statute. In White v. Shalala,
To be sure, if the earlier interpretation is contained in a substantive rule, a change may also have to be made in the same manner. In Orengo Caraballo v. Reich,
In light of the decisions of our sister courts of appeals on this point, we con-
IV
Turning then to the merits, each side claims that
As noted аbove, the statute provides, in pertinent part, that DIC benefits will be awarded to survivors of a deceased veteran where that veteran died:
[N]ot as the result of the veteran’s own willful misconduct, and who was in receipt of or entitled to receive ... compensation at the time of death for a service-connected disability rated totally disabling if
(1) the disability was continuously rated totally disabling for a period of 10 or more years immediately preceding death; [or]
(2) the disability was continuously rated totally disabling for a period of not less than five years from the date of such veteran’s discharge or other release from active duty.
The phrase “entitled to receive ... compensation,” standing alone, provides no guidance as to whether the statute allows a hypothetical claim of total disability.
On the one hand, the legislative history of
[T]o provide that the requirement that the veteran have been in receipt of compensation for a service-connectеd disability ... is met if the veteran would have been in receipt of such compensation for such period but for a clear and unmistakable error regarding the award of a total-disability rating.
Explanatory Statement of Compromise Agreement, 128 Cong. Rec. H7777 (1982), reprinted in 1982 U.S.C.C.A.N. 3012, 3013 (emphasis added). Given the difficulties of adjudicating initial or reopened claims many years after the relevant events, it may be unlikely that Congress intended to adopt the hypothetical claim approach adopted by the Court of Appeals for Veterans Claims in Green, Wingo, and Carpenter.
On the other hand, it is a well-established rule of statutory construction that when a statute is ambiguous, “interpretive doubt is to be resolved in the veteran’s favor.” Brown v. Gardner,
V
Ordinarily at this juncture in the analysis where application of the usual canons of statutory construction push in opposite directions we would resort to the Chevron principle, which mandates that we defer to an agency’s reasonable interpretation of an ambiguous statute. Chevron,
[An] administrative implementation of a particular statutory provision qualifies for Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority. Delegation of such authority may be shown in a variety of ways, as by an agency’s power to engage in adjudication or notice-and-comment rulemak-ing, or by sonie other indication of a comparable congressional intent.
Id. at 2171; see also Martin v. Occupational Safety & Health Review Comm’n,
It is, of course, true that, while the revised regulation at issue is not entitled to Chevron deference, it is entitled to some deference under Skidmore v. Swift & Co.,
As noted above, both section 1311 and its counterpart,
Under these circumstances, the agency is required to explain the rationale for its interpretation of
To overcome this presumption that Congress intended the phrase “entitled to
It may be that the agency can provide a reasonable explanation for its decision to interpret the virtually identical language of seсtions 1311 and 1318 in inconsistent ways. But it has not yet done so. We therefore remand
We further decide that the regulation will remain in effect during the Department of Veterans Affairs’ further consideration of the January, 2001, revisions to
When “deciding whether to vacate an agency’s decision pending further explanation,” the District of Columbia Circuit considers “the seriousness of the order’s deficiencies ... and the disruptive consequences of an interim change that may itself be changed.” A.L. Pharma, Inc. v. Shalala,
But even though we do not now invalidate the regulation, its validity is at this point open to question. Under these circumstances, we conclude that it would be inappropriate for the agency to further process claims under
CONCLUSION
For the foregoing reasons,
REMANDED.
COSTS
No costs.
Notes
. Unless otherwise indicated, all references to regulations are to regulations as set forth in the 2000 version of the Code of Federal Regulations.
. "Survivors” is defined by statute as "the surviving spouse and ... children of a deceased veteran.”
. Unless otherwise indicated, all statutory references are to the 1994 version of the United States Code.
. A veteran’s death is due to a service-connected disability when "such disability was either the principal or a contributory cause of death.”
. On March 1, 1999, the name of the United States Court of Veterans Appeals was changed to the United States Court of Appeals for Veterans Claims pursuant to enactment of the Veterans Programs Enhancemеnt Act of 1998, Pub.L. No. 105-368, § 511, 112 Stat. 3315, 3341 (1998). We refer throughout this opinion to the court by its new name.
. Subsection (b) of the regulation further provides that the veteran was also "entitled to receive” compensation where, inter alia, (1) the Department of Veterans Affairs "was paying the compensation to the veteran’s dependents,” and (2) "[t]he veteran had not waived retired or retirement pay in order to receive compensation.”
. Bankers Trust made clear that our obligation to follow earlier decisions of this court need not apply at all when those earlier decisions are “based on deference to the agency.” Bankers Trust,
. Even the cases cited by petitioners make clear that an agency is bound to follow higher authority only when it acts as an adjudicator, and not when it litigates. See Kirkland v. R.R. Ret. Bd.,
.In Century Steel Erectors, Inc. v. Dole,
. See Green,
. Petitioners direct our attention to Amen-can Mining Congress v. Mine Safety & Health Administration, 995 F.2d 1106 (D.C.Cir.1993), wherein the District of Columbia Circuit held in pertinent part that a rule is "legislative,” (i.e., substantive) if any one of these conditions are satisfied: (1) that without the rule, the agency lacks an "adequate legislative basis” for its action, i.e., its refusal to be bound by the decisions in Green, Wingo, and Carpenter; or (2) that the agency published the rule in the Code of Federal Regulations, or (3) that "the rule effectively amends a prior legislative rule.” Id. at 1112. Petitioners urge thаt these three conditions are met here, and thus the January, 2001, revisions are substantive.
Even if we were bound by American Mining Congress, we could not agree with petitioners. The rule here merely clarifies
. The government contends that the language of
The government also urges that
.
We do not agree. It is one thing to say that survivors may not pursue CUE claims to obtain a deceased veteran’s accrued benefits. It is another to say that survivors lack standing to file CUE claims for new benefits, namely, the DIC benefits explicitly afforded to survivors under
. See also, e.g., Motor Vehicle Mfrs. Assoc. v. State Farm Auto. Ins. Co.,