Argument Recap / En Banc Activity

Yesterday, the Federal Circuit held an en banc session to hear oral argument in Arellano v. Tran. In this case, the court is considering the availability of equitable tolling in the context of a statutory provision addressing veterans who request disability benefits by filing an application within one year from the date of the their discharge or release. This is our argument recap.

Chief Judge Prost began the oral argument by addressing the change in the name of the appellee in the case. Since the resignation of Robert Wilkie as the Secretary of Veterans Affairs, Dat Tran has been serving as the Acting Secretary. As a result, until a successor is confirmed by the Senate, the case will be known as Arellano v. Tran.

James R. Barney argued for Arellano. He began by asserting that “the question of this appeal is simple: is 38 U.S.C. § 5110(b)(1) amenable to equitable tolling.” According to Barney, “the answer to that question is not simple, but the Supreme Court has set forth a clear roadmap which consists of two inquiries: (1) does the [Irwin v. Department of Veterans Affairs] presumption apply; (2) and if so, can the government rebut it.”

On the first inquiry, Barney argued “5110(b)(1) meets all the criteria necessary to warrant the Irwin presumption.” According to Barney, “it is a statutory time limit set forth in a statute for which Congress has waived sovereign immunity.” Barney contended that, “unlike the statutory provision in Sebelius v. Auburn [Regional Medical Center], 5110(b)(1) is not aimed at sophisticated institutional litigants represented by counsel.” Instead, Barney argued, 5110(b)(1) “is aimed at military veterans who have just been discharged from service, who are unrepresented by counsel, and who may be suffering from the very physical or mental disabilities that 5110(b)(1) was meant to address.” Therefore, according to Barney, “the Irwin presumption clearly applies.” In response to the government’s argument that 5110(b)(1) is not a statute of limitations, Barney argued “the Supreme Court has never held that the Irwin presumption only applies to statutes of limitations.”

On the second inquiry, Barney asserted that the government cannot rebut the Irwin presumption. According to Barney, the government’s main argument is that “5110(b)(1) is the default rule, and therefore cannot be equitably tolled for the reasons set forth in TRW [Inc. v. Andrews].” Barney argued the “provision in TRW involved a two year limitations period with a built in tolling provision that automatically stopped the clock in certain circumstances, and that the court found that applying a discovery accrual rule on top of this would make the built in tolling provision wholly superfluous.” Barney contended that that is not the case here. He explained that “there is nothing in section 5110 that stops the one year clock of (b)(1) for any reason.” Therefore, Barney asserted, “nothing in the statute would be rendered superfluous if this court held that 5110(b)(1) is amenable to equitable tolling.”

Chief Judge Prost asked whether “VA [has] been granted a court’s power to equitably toll deadlines” and, if so, “how is that supposed to work?” She explained that VA has “50 or so regional offices, with hundreds of adjudicators, and under your view, each of them would have the authority to decide the equitable tolling question.” Continuing this line of thought, she referenced that, “under the recent Modernization Act, [38 U.S.C. §] 5104(a) speaks to the binding nature of favorable rulings.” In particular, she suggested that “if an individual adjudicator finds that [the deadline] should be equitably tolled, then no other adjudicator could bring that into question except in the extraordinary circumstances possibly of a CUE [(clear and unmistakable error)].” Barney first responded that, in his opinion, the agency itself has the power to apply equitable tolling. According to Barney, however, “the court really doesn’t have to answer that question, because the legal question we are trying to decide here is whether the [Court of Appeals for Veterans Claims] has the power and should have considered Mr. Arellano’s equitable argument.” As to the relevant question, he asserted that he didn’t “think there is any question that the CAVC has the equitable power to toll a deadline.”

Judge Newman asked about the impact of the requested legal holding when considering the facts of this case. She asked: “Will this veteran be entitled to 30 years of retroactive benefits?” Yes, according to Barney: “If the veteran would be able to prevail on equitable tolling . . . he would be entitled to potentially 30 years of benefits.”

Judge Reyna asked a question regarding the pro veterans canon. He explained that the pro veterans canon “is the statutory interpretation principle that [statutory] provisions [relating] to benefits for members are to be construed in the beneficiaries’ favor.” Barney responded that he agreed there is a “long-standing canon that statutes are to be construed in the veteran’s favor,” and he argued that this canon should apply in this case.

Barbara E. Thomas argued for the government. She began her argument by contending that “the availability of equitable tolling to alter a statutorily prescribed time period is determined solely by congressional intent.” She argued that, “in appropriate contexts where Congress has provided no affirmative evidence of its intent, the presumption applied in Irwin may be deployed to help fill that gap.” In this case, however, she asserted, “the Irwin presumption can’t be properly applied to section 5110(b)(1).”

She argued that “Congress has provided unmistakable evidence of its intent of tolling the time period” because of “the text of the statute itself.” According to Thomas, “tolling the one year period described in section (b)(1) would not involve implying an exception to the rule set forth in that particular section—that rule only controls what the effective date would be for claims submitted within one year of discharge, and not for claims submitted after that one year period.” She argued that (1)(a) already specifies what happens to claims submitted after the 1 year period. Under the statute, Thomas asserted, “there is no express statutory exception to that rule, and that is why Mr. Arellano asks this court to create an unwritten exception to that rule.”

Moreover, Thomas argued, equitable concerns over unfair results are alleviated here “because Congress specifically accounted for equitable concerns by adopting the numerous express exceptions contained within the statute itself.” Therefore, she maintained, the “statutory framework makes clear that Congress did not intend to allow for open-ended equitable tolling at the discretion of judges.”

Judge Newman posed a hypothetical. She asked Thomas to “assume that [Mr. Arellano] was in fact totally disabled for a long period of time and that it is now established beyond debate that it was service connected.” According to Judge Newman, “if we were dealing with the private sector, my sense is the court would be interested in and permitted by equities to consider [whether to permit tolling] in a particular case.” Judge Newman, however, expressed concern over applying the same approach to this case: “What troubles me is if we remove a limitation that Congress has set by saying that you could argue the equities, how in the world could the VA handle this because of all of the veterans in the nation.” Judge Newman then asked: “Why shouldn’t equity always be a factor when you eventually end up in court?”

In response, Thomas argued “the problem [with this approach] is that the court’s first obligation is to follow the law as embodied by the statutes that Congress has passed, and the Constitution, of course, that governs our entire system of law.” Moreover, according to Thomas, “equitable tolling as a doctrinal principle, as the Supreme Court makes clear, is available only if Congress wanted it to be—the determinative factor is what Congress’s intent was, not whether the court may feel in a given case that equity gives a certain result.”

Judge Reyna repeated his question that he asked to Barney regarding the pro veterans canon, but this time asking Thomas about the canon’s applicability. Thomas explained that the government’s position is there is no “ambiguity that would warrant availability of the veterans canon.”

Notably, Judge Wallach responded to this answer by asking Thomas the government’s view of how this argument would apply to the disturbing facts of the Taylor v. Wilkie case. That case involved a veteran who had been subject to Department of Defense experiments that involved being subjected to chemical warfare agents in the 1970s. That veteran was unable to apply for benefits until 2006. Judge Wallach asked Thomas, “under our current law, what is the earliest effective date available for the soldier volunteer?” Thomas responded that the earliest available effective date was the “date of receipt of the claim.” Later, she explained that, while “obviously the scenario, the facts you’re describing, are deeply disturbing, and would warrant as a policy matter some kind of relief, . . . those are the kind of circumstances that are appropriate for Congress to address.”

In her conclusion, Thomas argued that, “while we are aware there may be pressing equitable considerations in certain cases that would suggest as a policy matter that tolling might be desirable, it remains that Congress, and Congress alone, under the Appropriations Clause, has the authority to determine under what conditions the government is obliged to pay out money to the claimant.” And, according to Thomas, “Congressional intent is clear that equitable tolling is not available under this statutory scheme.”

In rebuttal, Barney asserted that, “if the status quo is left in place, and  Andrews [v. Principi] continues to be construed as a complete bar to equitable tolling of 5110(b)(1), then situations such as Raybine [v. Wilkie], Taylor, and many others situations that you can imagine that are truly deserving of equitable tolling would be completely barred.” In response to the government’s contention that the situation is best resolved by Congress, Barney argued that the situation “has already been addressed by Congress because when it legislates it is presumed to do so against the background principles of equitable tolling.” Barney concluded by urging the court to “overrule Andrews, make clear that equitable tolling is available to 5110(b)(1), and let the lower court apply the existing jurisprudence on equitable tolling.”

We will report on the Federal Circuit’s disposition of this case.