Argument Recap / Panel Activity

Yesterday, the Federal Circuit heard oral argument in Buffington v. McDonough, a case presenting the question of whether the Secretary of Veterans Affairs exceeded his statutory authority when promulgating a regulation related to the timing of resumption of disability benefits payments following a period of active military service. Judges Lourie, Moore, and O’Malley heard the argument. This is our argument recap.

Doris Johnson Hines argued for Buffington. She began her argument with her bottom line: she argued that what she called a one year forfeiture provision in VA’s regulations is inconsistent with the governing statute. The statute, she maintained, mandates disability payments absent the situation of dual compensation, which is defined as when the veteran is receiving active duty pay. In other words, any regulation requiring forfeiture of benefits payments based on filing an application more than one year following the end of active service is inconsistent with the statute.

Judge Lourie interjected to ask whether the statute includes general language and the regulations simply fill the gaps. Hines disagreed . She indicated the statute includes a single exception to the requirement to pay disability benefits: a bar on dual compensation. She argued the bar on dual compensation implies that disability compensation will resume when there are not dual payments.

Judge O’Malley asked Hines what to make about the fact that Congress set a very specific date to discontinue benefits (on return to active duty), but no countering statement on when to resume benefits. Hines responded that the statute indicates the bar on dual compensation is the shortest period of time. Hines focused on the statutory language, “any period of active duty service.” Hines argued, moreover, that the regulation in question is inconsistent with the purpose for which the statutory language was enacted, which was to bar dual compensation.

Hines next faced the question of whether she would agree the statute in question does not prevent VA from requiring a new application to resume benefits after the period of active service. Or, she was asked, does the statute require that, whatever the benefits were before the period of active service, the benefits should resume immediately upon the end of the active duty service. Hines responded that, in her view, VA can require re-application and indeed require the veteran to appear for another medical exam so that VA can reconsider the amount of compensation the veteran is entitled to. Judge Moore responded that, if the government can require re-application, inherent in that view seems to be the idea that the statute does not just terminate benefits for an intermediate period, but rather some action must be taken to resume the benefits. Hines responded that the argument here is solely that the government cannot effect a forfeiture based on a timing requirement that is not in the statute. Judge Moore, however, maintained that, in her view, the position that the statute allows VA to require a re-application to resume benefits is inconsistent with the interpretation of the “any period” language in the statute as mandating only a temporary pause in benefits based on active service.

Judge Moore went on to point out that some disabilities get better with time, and so, she asked, how is VA to know unless a re-application is filed that the veteran is still entitled to benefits after the period of active service? Hines responded that the Veterans Court recognized that the veteran will continue to be service connected for the disability for which he or she received compensation prior to the period of active duty. What the government can require, she argued, is for the veteran go in for additional medical exams to determine whether the level of compensation to which the veteran was entitled is still appropriate. Judge Moore, however, indicated that Hines was assuming continued entitlement, with the only question being level of compensation. Judge Moore again highlighted that not every disability is permanent, and so, she asked, might there not be continued entitlement? Hines maintained that a determination of service connection remains in place after active service ends. What the government can require, Hines argued, is additional information and medical exams.

Judge O’Malley asked whether the government disputed continuing disability in this case. Hines responded that there was no dispute over continued entitlement, but only a dispute over the date when compensation would resume. Since the veteran did not file a request for resumption of payments within one year of the end of active service, VA did not resume his payments from the date of the end of his active service.

Judge Moore later asked Hines to assume that a veteran did not reapply for ten years after the end of active service, but when the re-application occurred the underlying condition was different, either better or worse. What, she asked, would the government do in terms of the retroactive payment of benefits? Hines responded that VA encounters this situation all the time; it is not at all uncommon, she argued, for VA to go back a substantial period of time to determine whether a disability existed and its level. VA, she argued, collects medical evidence and reaches medical conclusions in these situations.

Shari A. Rose argued for the Secretary. She began by arguing that the statute is silent as to when benefits recommence. This was an intentional gap in the statute, she argued, for VA to fill. Highlighting that the statute says there are to be no dual payments during the “period of active service,” Rose was asked what the word “period” means. Rose responded that “period” identifies the time when dual payments are not allowed. It does not, however, define when disability payments restart, she maintained. She argued that what is unanswered in the statute is when the recommencement of disability benefits starts.

Rose was then asked a series of questions about the fact that the provision in question covers not only benefits payments but also pensions. If a retiree is called back to active duty, she was asked, when should the pension benefits resume? Shouldn’t the pension resume immediately after the end of active service? Rose responded by arguing that there is a difference between a pension and a disability payment, because disability benefits depend on interference with the ability to be employed. A return to active duty service may suggest a change to a disability, she maintained. At least one of the judges, however, indicated she was still “troubled” because the government’s interpretation would seemingly impact pension payments, in particular to allow regulations that prohibit resumption of pension payments absent satisfying a series of new hurdles.

Rose returned to her argument that the statute specifies when disability payments end, but does not specify when disability arguments resume. She argued that VA’s filling of this gap was reasonable, and in particular she contended it is reasonable to require veterans to file an application within one year of the end of active duty service.

Rose also argued that there is no forfeiture unless the veteran fails to file an application within a year. In response to the suggestion that benefits may be taken away for an arbitrary time frame, Rose responded that the time frame is not arbitrary, but instead based on the end of active service and the timing of the application for the resumption of disability payments.

In response to a question from Judge Moore of whether VA’s position is that any time the statute is silent that there is a gap for the agency to fill, Rose indicated that she was not prepared to take that position given how broad it is.

At the end of her time, Rose returned to the question of pensions. She argued there may not be practical significance with respect to pensions because there may not be many situations where there is a return to active duty service after retirement.

In her rebuttal time, Hines focused on the earlier question to Rose related to statutory silence. Hines highlighted that there is another statutory provision including forfeiture provisions with respect to missing filing deadlines. But, she pointed out, there is no such forfeiture provision with respect to the bar on dual compensation and any requirement to refile an application.

Hines, however, was interrupted with the statement that she was not addressing “the most difficult argument” for her position: that the definition Hines wants for “period” would render another statutory provision entirely superfluous. Hines responded that her interpretation would allow for overlapping statutory language and not create superfluous language.

Hines concluded by arguing that the regulations are not necessary and appropriate to avoid the duplication of benefits and instead represent an unnecessary and inappropriate impediment to veterans obtaining benefits.

We will keep track of the court’s disposition of this case.