Last week, the Federal Circuit held an en banc session to hear oral argument in National Organization of Veterans Advocates, Inc. v. Secretary of Veterans Affairs. In this case, the court considered two questions posed by NOVA in its petition: (1) whether the Federal Circuit has jurisdiction to review a generally applicable interpretive rule promulgated by the Department of Veterans Affairs through its Adjudication Procedures Manual, and (2) whether a Federal Circuit Rule impermissibly supersedes a statute of limitations. Additionally, as a preliminary matter, the court heard argument as to whether NOVA has Article III standing in this case. This is our argument recap.
The court first addressed the issue of standing. It allotted ten minutes for each side for the standing argument, and in the interest of time the court permitted only judges Dyk, Taranto, and Chen to ask questions.
Roman Martinez argued for NOVA. He argued that NOVA has associational standing based on three of its veteran members who all satisfy the injury in fact requirement. Further, he argued, NOVA satisfies the germaneness requirement under the court’s ruling in Disabled American Veterans v. Gober.
Judge Taranto called into question whether the fact that veteran status is not required for NOVA membership creates a germaneness problem for associational standing. Martinez responded that the germaneness requirement applied by the Supreme Court simply requires that a member have standing, and thus, he argued, there is no standing problem here.
Eric P. Bruskin argued for the Secretary of Veterans Affairs. He contended that allowing an organization of advocates (rather than veterans) to claim associational standing would permit such an organization to challenge any procedures or rules “that might conceivably affect their pocketbooks.” He further argued that none of the veterans themselves met the standing requirement because they did not satisfy the injury in fact requirement at the time of NOVA’s initial petition.
Notably, Judge Taranto asked what overcomes the simple logic that standing is met because one of the purposes of NOVA is to increase benefits for veterans. Bruskin maintained that such a catch-all approach does not cure the germaneness problem. He argued that the purpose of NOVA’s bylaws is to promote advocacy. He maintained that any catch-all approach relating advocacy to veterans law does not satisfy the germaneness requirement.
Martinez in his rebuttal reaffirmed that NOVA satisfies the germaneness requirement under Gober, which he urged should not be called into question in this case.
Next, the court turned to the merits of the parties’ dispute. The court provided each side with three uninterrupted minutes of argument before allowing two rounds of questions from the court in order of seniority.
Martinez argued that 38 U.S.C. § 502 “provides an essential check when VA issues illegal rules that hurts veterans” in that it “authorizes this court’s pre-enforcement review both of legislative rules and interpretive rules and policy statements.” Further, he maintained, because Section 502 is subjected to 28 U.S.C. § 2401(a)’s six year statute of limitations, the court’s sixty day limit expressed in Federal Circuit Rule 47.12(a) is invalid.
Chief Judge Prost noted that around 94% of the decisions made by the Regional Offices (ROs) are subject to the manual in question yet do not get appealed to the Board of Veterans Appeals (BVA). This fact presumably supports pre-enforcement review of legal interpretations in the manual. But, she asked, if the numbers were flipped and 94% of the decisions by ROs were appealed, would this change NOVA’s stance? Martinez responded that NOVA would not change its position because ROs are authorized to issue legally final decisions on behalf of the VA by statute.
Judges O’Malley and Chen both posed questions related to the finality of RO decisions when veterans can appeal interpretations of the VA manual to the BVA. Martinez argued that the decisions are final because the ROs are required to follow the manual, and the right of appeal does not undermine finality any more than a right to appeal would undermine the finality of a district court’s decision.
Judges Reyna and Chen also expressed concerns that a decision allowing review would result in a flood of cases into the court challenging various agency manuals. Martinez maintained that Congress provided a mechanism to alleviate this burden by allowing agencies to avail themselves of “incorporation by reference.” This, he argued, allows agencies to file rules in the federal register that merely reference another document so long as it is reasonably available. According to Martinez, this mechanism would prevent a flood of cases every time a manual provision is changed, and he argued it is already used by some agencies, including the U.S. Patent and Trademark Office with its patent examiner’s manual.
Judge Hughes notably asked whether a manual provision would be separately reviewable under Section 502 if it did no more than incorporate a rule from the federal register by a mere reference. After some confusion over the hypothetical, Martinez conceded that if the manual provision were no more than a mere reference to the federal register, then perhaps the manual provision would not be separately reviewable. He maintained, however, that the VA manual provision in question here is more than that because the manual instructs the RO to ignore the court’s decision in Hudgens v. McDonald. He argued this is an application of what is in the federal register, not a reference to the federal register.
Regarding the statute of limitations issue, Judge Taranto pointed out that Section 2401 merely says that a filing beyond six years is untimely, not that everything before is timely. So, he pointed out, NOVA’s argument goes beyond the words of the statute to imply a congressional intent that conflicts with a sixty-day limit. In response to Judge Taranto’s question of why NOVA’s characterization of Section 2401 is proper, Martinez argued that Congress was legislating against the background of six-year statutes of limitations in Administrative Procedure Act actions and suits against the government.
Judges Wallach and Lourie notably asked no questions in either of NOVA’s argument rounds.
In Bruskin’s three minutes of uninterrupted argument, he maintained that, “because veterans may obtain de novo review of their claims from the Board, which is not bound by the provisions in the manual, manual provisions are only the starting point for the agency and veterans alike.” He argued that NOVA’s interpretation of Section 502, moreover, leads to “silly results.” According to Bruskin, it is because of these absurd results that courts have generally held that unpublished documents cannot affect a person of the public. The determinative issue, he argued, should be whether or not the action binds the agency and can therefore, as an objective matter, affect a person of the public.
Judge Newman asked how Bruskin understands what Congress intended when it providing for limited exceptions to normal procedures with respect to regulations and precedential general counsel opinions. Bruskin asserted that pre-enforcement review is proper for those situations, in distinction to the situation at hand, because in those situations the BVA is bound by its own interpretation of the law and therefore argument before the BVA would be a waste of time. He emphasized that, in this case, the BVA has de novo review of RO decisions interpreting the manual.
Judge Dyk focused on the question of finality. In particular, he asked whether the Supreme Court’s decision in United States Army Corps of Engineers v. Hawkes Co., which he characterized as taking a pragmatic approach to the issue of finality, weighed in favor of RO decisions being final because 94% of cases stop at the RO level. Bruskin answered, “no,” because, he argued, this would allow a policy concern to creep into what Congress had in mind in 1988 when setting up the review mechanism. He maintained that the fact that 94% of cases stop after the RO decision gives no insight into why the majority of veterans do not appeal.
Judge Dyk also asked whether Congress imposing a sixty-day time limit in other statutes, but not this statute, means that Congress meant to maintain the general six-year statute of limitations. Bruskin said this would be reading too much into Congressional silence. Notably, Judge O’Malley later said that her concerns were covered by Judge Dyk’s questions.
With regard to the sixty-day limit set forth in the Federal Circuit Rule, Judge Wallach asked if the Department of Justice would object to the court simply repealing its own internal rule. Bruskin responded that there are processes that the court typically goes through that allow the public to weigh in, and that the court should do so if it plans on changing the rule.
Similarly, Judge Taranto asked if there were any examples of other courts adopting a limit that was shorter than the six-year statute of limitations, which would be possible by interpreting the six-year limit to be the upper bound. Bruskin answered, “no,” but he maintained that the Federal Circuit being a specialized court is in a unique position with respect to VA procedure and should not base its decision on this fact. He conceded, however, that there was no precedent that necessarily permits it or precludes this approach.
Judge Chen raised the question of whether the BVA are “officers” of Veterans Affairs because they are not bound by the manual as interpreted by the BVA. Bruskin noted that mechanisms such as general counsel opinions allow the VA to exercise control over the BVA, and thus, he argued, the members of the BVA are employees not officers.
Notably Judges Prost, Lourie, O’Malley, and Stoll did not ask Bruskin any questions.
We will report on the Federal Circuit’s disposition of this case.