Argument Recap / En Banc Activity

Last week, the Federal Circuit held an en banc session to hear oral argument in Taylor v. McDonough. In this case, the court is considering whether equitable estoppel may be used against the government with respect to establishing the effective date of awards of veterans’ benefits. This is our argument recap.

Luke McCloud argued for Taylor. Judge Wallach immediately asked whether the government actually threatened to jail Taylor, noting both that the government denies that claim in its brief but the record indicates otherwise. McCloud asserted that the Government’s “secrecy oath” included a threat of criminal prosecution. He also contended that, if such an oath did not exist, then the government would not have released people from this very oath in 2006.

Judge Prost asked about the future impact of a holding for Taylor in this case with regard to national security. McCloud argued there are no real future implications because current procedures exist for similar situations, but those procedures did not exist during Taylor’s time.

Judge Dyk then inquired as to why Taylor did not seek an informal claim for benefits based on his symptoms without disclosing any confidential information. McCloud argued that Taylor could not have established service connection without disclosing any information, and that Taylor then would have needed to show a clear and unmistakable error on the part of the VA in denying his application. McCloud further argued that Taylor was operating under military orders and held a reasonable belief that he could not pursue benefits because he was explicitly told he could not tell anyone about his situation.

Judge Hughes then asked, assuming the government violated Taylor’s rights, what authority existed for the Federal Circuit to tell Veterans Affairs to set aside 38 U.S.C. § 5110. McCloud argued that 38 U.S.C. § 7261 provides the Veterans Court necessary authority when the Secretary violates someone’s rights. In response, Judge Hughes asked whether there was any other authority, because he did not view § 7261 as sufficient. McCloud argued that certain precedent stands for the proposition that, when there is no right of access to the court, the relevant statute or regulation is invalid. Judge Dyk responded, asking if it was unconstitutional for Congress to foreclose access to court in this case. McCloud indicated that, when there is no compelling interest and the government never narrowly tailored the relevant restriction, then the restriction is unconstitutional. Judge Dyk followed up, asking whether it would be too broad to apply the principle of holding the government responsible for violating the right of access to court based on government action delaying the filing of a claim. McCloud emphasized that this case has extraordinary circumstances, that there was affirmative misconduct on the government, and that the severity of the government’s actions set this case apart.

Judge Chen asked why Taylor did not file a placeholder claim that would have given him an earlier effective filing date. McCloud argued that Taylor’s plain text interpretation of the secrecy oath precluded him from applying for benefits at all. McCloud explained that the government’s briefs indicate that Taylor would not been able to establish service connection. Moreover, he pointed out, Taylor could not reasonably foresee that the information would be declassified eventually.

William J. Grimaldi argued on behalf of the Secretary of the VA. Judge Wallach immediately asked what the government’s compelling interest is here, since treaties have banned the usage and possession of the nerve gases that were injected into Taylor and information about the Edgewood program was eventually released. Grimaldi argued that the operation of the Edgewood Program is still classified. Moreover, he continued, this court, if permitted to inquire into why the government classified the program in the 1970s, would step into the role of the executive and violate the principle of separation of powers. Judge Wallach continued questioning Grimaldi, however, asking why Taylor would be precluded from his claims here. Grimaldi argued that it is an objective question of whether Taylor was completely foreclosed from going to court, and the government, he pointed out, does not read the oath as a complete bar. At this point, Judge Moore expressed concern. Grimaldi, after conceding that Taylor would have hard a hard time obtaining any benefit in the 1970s, argued he could have filed a minimal claim without revealing confidential information and also get retroactive benefits later.

Judge O’Malley continued this line of questioning, asking how a veteran would have known about the existence of the minimal claim procedure and how he could have applied, considering the minimal claim was codified in 2006. Grimaldi argued that the 2006 regulation codified a prior practice, and that this procedure was available to claims originating before 2006. Grimaldi emphasized that this procedure was available regardless of Taylor’s subjective knowledge, thus not completely barring his right of access.

Judge Hughes shifted the discussion to estoppel, asking whether the Supreme Court could modify estoppel to apply when the government rightfully exercises its national security powers, but that exercise leads to unnecessary and unfair effects on its citizens. Grimaldi argued that this approach would violate the separation of powers because this case concerns appropriations and the power of the purse belongs to the legislative branch of the government.

Judge Hughes then asked why § 5110(a)(1) is not unconstitutional as applied if its enforcement bars the right of access. Grimaldi responded by arguing that, while the Federal Circuit can find a veterans benefits statute unconstitutional as applied, the Veterans Court cannot do so under 38 U.S.C. § 7292(c). Grimaldi further argued that, while Taylor in his brief complained that the oath and VA processes violate his constitutional rights, he did not apply strict scrutiny to § 5110(a)(1). In that regard, Grimaldi maintained, the minimal claim process allows the statute to survive strict scrutiny.

Judge Reyna asked why Taylor’s original claims, which were denied, did not function as a minimal claim and, moreover, why the Secretary not fulfill his obligation to assist the veteran in pursuing his claims. Grimaldi argued that Taylor’s claim did not qualify as a minimal claim because he was still in active service at that time and not a veteran. Grimaldi further argued that adopting the suggested approach would create a snowball where every circumstance would count as a minimal claim.

Judge Dyk asked whether the Secretary has any discretion to provide relief here. Grimaldi argued that the Secretary can provide relief when there is an administrative error. But, he maintained, no administrative error has been alleged in this case.

In rebuttal, McCloud explained that Taylor did not allege an administrative error or seek relief directly with the Secretary due to the secrecy oath. He further argued that the standard for right of access is meaningful access. Moreover, he maintained, a right of access claim should not be invalidated by a change in the law, since this would cause problems in both forward- and backward-looking cases. Finally, McCloud argued, both the Federal Circuit and the Veterans Court can invalidate a veterans benefit statute.

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