On August 6 the Federal Circuit issued its opinion in Buffington v. McDonough, a case we have been following because it attracted an amicus brief. The case was argued before Chief Judge Moore as well as Judges Lourie and O’Malley. These judges considered whether the Secretary of Veterans Affairs exceeded his statutory authority when he promulgating a regulation related to the timing of resumption of disability benefits payments following a period of active military service. Chief Judge Moore authored the majority opinion in the case, affirming the U.S. Court of Appeals for Veterans Claims. Judge O’Malley dissented. This is our opinion summary.
Chief Judge Moore summarized the relevant background:
Mr. Buffington served on active duty in the United States Air Force from September 1992 until May 2000. After leaving active duty service, Mr. Buffington sought disability benefits. The Department of Veterans Affairs (VA) . . . awarded him disability compensation. In 2003, Mr. Buffington was recalled to active duty in the Air National Guard . . . serving until July 2005. It was not until January 2009, however, that Mr. Buffington sought to recommence his disability benefits. The VA determined Mr. Buffington was entitled to compensation effective on February 1, 2008—one year before he sought recommencement. . . . Mr. Buffington filed a Notice of Disagreement, challenging the VA’s effective-date determination. The VA Regional Office issued a Statement of the Case rejecting his challenge and providing further reasoning for the February 1, 2008 effective date. Mr. Buffington then appealed to the Board of Veterans Appeals, which affirmed the VA’s decision. He next appealed to the Veterans Court. That court held that § 3.654(b)(2) was a valid exercise of the Secretary of Veterans Affairs rulemaking authority and was not inconsistent with 38 U.S.C. § 5304(c).
Chief Judge Moore began by highlighting that the “appeal requires us to interpret VA-administered statutes to determine the effective date for recommencing (as opposed to awarding or discontinuing) service-connected disability benefits once a veteran leaves active service.” In particular, the case called upon the court to review related regulations that were created through notice and comment rulemaking. In this situation, she explained, the court must “apply the two-step framework set forth in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.”
At step one of the Chevron analysis, the court felt there was “a gap in the statutory scheme” because “Congress did not establish when or under what conditions compensation recommences once a disabled veteran leaves active service.” The court indicated that Congress did not speak to the issue anywhere in the “plain terms or in the broader statutory structure.” Also, the court noted Mr. Buffington’s concessions that the government can require “‘reapplication[,] . . . can require a veteran to appear for an additional medical exam[, and] . . . can reconsider the amount of disability compensation.’”
At step two of the Chevron analysis, the court determined that the Secretary of Veterans Affairs “promulgated 38 C.F.R. § 3.654(b)(2),” which is the regulation for determining “the effective date for any recommencement of benefits after a disabled veteran leaves active service.” While Mr. Buffington challenged the Secretary’s authority to create the regulation, Chief Judge Moore explained that “the Secretary was within the scope of his authority ‘to prescribe all rules and regulations which are necessary or appropriate to carry out the laws administered by the Department and are consistent with those laws.’” As a result, Chief Judge Moore went on, the Secretary was able to fill the gap with a “reasonable regulation” that “incentivizes early filing.” And, she said, the court “must defer to that regulation.” As a result, the majority affirmed the judgement of the Court of Appeals for Veterans Claims.
Judge O’Malley dissented. She did not endorse “the Department of Veterans Affairs’ treatment of Mr. Buffington.” Moreover, she “disagree[d] on both steps” of the required analysis.”
For step one, Judge O’Malley argued that “a plain reading of the relevant portions of the governing statute and careful consideration of the context in which they appear demonstrate that there is no statutory gap to fill.” She also contended that, “to the extent there is any silence, it is our job to interpret what that silence means in the first instance, not the VA’s.” Also, she maintained, the court should “resolve any ambiguity about what Congress meant in Mr. Buffington’s favor.”
For step two, Judge O’Malley argued that “requiring veterans to reapply for benefits to which they previously were entitled seems anything but efficient.” She also argued that “enacting a pause in benefits for ‘any period’ during which a veteran returns to active duty better achieves” the relevant goal. She further argued that “the ‘reasonable’ functions served by ‘reapplication’ for benefits involve modifying the amount of benefits according to the severity of the veteran’s disability,” but noted that “several other regulatory and statutory mechanisms . . . serve these functions.” In the end, she argued the regulation in question “serves no purpose other than to deny disability benefits (and other critical retirement benefits) to veterans entitled to them solely because these men and women answered the call to return to active duty.”