Fed. Cir. and CAVC on Auer Deference . . . What’s the Hubbub, Bub?

“The work of a judge is in one sense enduring and in another ephemeral. . . .   In the endless process of testing and retesting, there is a constant rejection of the dross and a constant retention of whatever is pure and sound and fine.” B. Cardozo, The Nature of the Judicial Process, 178-79 (1921).

At least two judges handling issues under Title 38 have considered Justice Cardozo’s judicial philosophy and have recently questioned the application of  judicial deference to the Department of Veterans Affairs’ interpretation of its own regulations.  In short, those judges have raised the question of the continued application of Auer v. Robbins, 519 U.S. 452 (1997) (deference due to an agency’s construction of its own regulations), in the context of regulatory interpretation under Title 38.  I’m confident that many veterans are now asking what another great legal philosopher once posited, “What’s the Hubbub, Bub?” Falling Hare, Bugs Bunny, 1943.

The holdings of the opinions below are relatively straightforward and will likely have minimal impact on most veteran’s claims.  Broader issues, however, of how the courts will consider questions of regulatory interpretation in future cases will impact both VA rule-making and the adjudicative process under Title 38.  Further, to the extent that Congress has created a statutory rule — which is of significant question — of interpretative doubt in favor of the veteran, how does this impact judicially-created interpretive rules of construction under Auer and even Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984) (In the absence statutory clarity, reviewing courts will defer to an agency’s construction of an ambiguous statute if the agency’s interpretation is reasonable)?

In Johnson v. McDonald, August 6, 2014, the Court of Appeals for the Federal Circuit (Fed. Cir.) held that “the plain language of § 3.321(b)(1) provides for referral for extra-scheduler consideration based on the collective impact of multiple disabilities.”  The majority, therefore, disagreed with the Agency’s interpretation of the plain meaning of the regulation that “the term ‘disability picture’ in the regulation must be construed as limited to the impact of a single disability rather than multiple disabilities.”    Judge O’Malley concurred with the majority decision; however, then questioned whether the VA is entitled to a level of deference for interpretation of its own regulation in light of “[the[ long applied [] canon that provisions for benefits to members of the Armed Services are to be construed in the beneficaries’ favor.”  Henderson v. Shinseki, 131 S. Ct. 1197, 1206 (2011) (citation and quotation marks omitted).

In Pacheco v. Gibson, dated July 17, 2014, the Court of Appeals for Veterans Claims (CAVC), decided a complex issue of regulatory interpretation of 38 C.F.R. § 3.157(b) (allowing for an earlier effective date based upon the submission of certain medical reports) and 38 C.F.R. § 3.156(c) (earlier effect date of award based on newly discovered service department records).  In relation to Section 3.157(b), the majority agreed with the Agency’s interpretation, citing to Auer, that, “a previous allowance of pension can result in an earlier effective date for claims for increased benefits, but not for claims to reopen—which require a previous disallowance for the service-connected disability not being compensable in degree.”  The majority, otherwise, remanded because the Board did not consider whether service records located in 2008 entitled Mr. Pacheco to an earlier effective date under Section 3.156(c)(1).

Judge Greenberg, a retired Army Judge Advocate General, concurred in part (remanded for consideration of Section 3.156(c)(1)) and dissented in part (interpretation of 38 C.F.R. § 3.157(b)).  Judge Greenberg found that the VA is not entitled to deference for “writing an ambiguous, and unintelligible, regulation.”  Judge Greenberg, however, did not simply stop at questioning the validity of Auer.  Judge Greenberg also questioned a more fundamental jurisdictional question of the CAVC of whether that court has equitable powers to redress matters of unfairness.  The CAVC is an Article I court created by Congress, and Judge Greenberg noted, “[nothing] indicates that Congress intended to preclude this Court from granting equitable relief.”

Judge Greenberg concluded:  “We must provide equitable remedies to deserving veterans and harmonize our jurisprudence with the veterans cannon, applying the full extent of our powers when appropriate.  It is right that after 70 years of pain and suffering, and 40 years of pursuit of an adequate administrative remedy, the time has come for equity to aid the diligent.  Let right be done, at last.”

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Seth Director

About Seth Director

Over nine years of trial and appellate litigation experience at the Department of Justice and the Army Judge Advocate General Corps where I frequently handled high profile, complex litigation before various federal courts. I am now an associate in the Veterans’ Law section at the law firm of Fink Rosner Ershow-Levenberg, LLC, and a Department of Veterans Affairs accredited attorney. The Veterans’ Law section at Fink Rosner Ershow-Levenberg offers nationwide representation at all levels of the VA administrative process, as well as in the Federal court system, at the U.S. Court of Appeals for Veterans Claims, and the U.S. Court of Appeals for the Federal Circuit. I focus solely on Veterans’ law and Veteran-related issues, claims and benefits and can offer a unique perspective as a veteran of Operation Iraqi Freedom.

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