Late last month the Federal Circuit issued its opinion in Freund v. McDonough, a veterans case that attracted two amicus briefs. In this case, the Federal Circuit reviewed whether the Court of Appeals for Veterans Claims erred in dismissing the case as moot and denying Freund’s request for class certification. In an opinion authored by Judge Dyk that was joined by Judges Hughes and Stoll, the Federal Circuit vacated the judgment and remanded the case to the Court of Appeals for Veterans Claims. The Federal Circuit held that the case was not moot as to the class claims because it “satisfie[d] the inherently transitory standard” and that the lower court “abused its discretion in finding that the adequacy and commonality requirements for class certifications were not met.” This is our opinion summary
Judge Dyk began by highlighting the procedural and factual background of the case:
The VA currently operates two adjudicatory systems two adjudicatory systems for benefits claims . . . the so-called legacy system is relevant to this appeal . . . . To manage legacy appeals and to determine whether legacy appeals have been timely filed, the VA operates an electronic database known as the Veterans Appeals Control and Locator System (“VACOLS”). . . . If no timely Substantive Appeal is filed, VACOLS ‘automatically closes legacy appeals’ . . . . The problem here is that the system erroneously closed timely appeals, at least approximately 3,000 in number, and then the VA withheld action on such appeals. . . . That is what happened to U.S. Army veterans J. Roni Freund and Marvin Mathewson. . . . In June 2021 Ms. Freund and Mrs. Mathewson filed a mandamus petition in Veterans Court. . . . The same day, the petitioners filed a request for class certification and class action. . . . Following the mandamus petition . . . the VA . . . resumed considerations of their claims. . . . The Secretary argued to the Veterans Court that this action mooted the case. . . . The Veterans Court held that the case was moot as to the petitioners and did not decide whether it was moot as to the class in view of the ‘inherently transitory’ exception. . . . Instead of resolving the mootness issue, the Veterans Court considered whether the proposed class met requirements of the Veterans Court’s version of Rule 23, which were . . . (2) there are questions of law or fact common to the class . . . (4) the representative parties will fairly and adequately protect the interests of the class. . . . The Veterans Court denied class certification, finding that the named petitioners failed to satisfy the Rule 23 requirements of commonality and adequacy. . . . The petitioners appealed.
Judge Dyk began his analysis by explaining how the panel reviews “legal determinations of the Veterans Court de novo” and “[q]uestions of class certifications under Rule 23 are reviewed for abuse of discretion.”
On the merits, Judge Dyk considered the lower court’s class certification ruling. He noted that, “[o]n appeal, the Secretary does not defend the Veterans Court’s holdings as to standing, commonality, or adequacy.” Agreeing with the Secretary, Judge Dyk found the lower court “erred in its standing analysis and abused its discretion in determining that the commonality and adequacy requirements of Rule 23 were not met.”
Addressing the commonality requirement, Judge Dyk found it “clear that there [was] a common answer to a common question” in the case because “[t]he proposed class members have all suffered the same injury––the Secretary closed their appeals . . . despite their timely filed Substantive Appeals.” If the petitioners prevailed, he wrote, “the VA would be ordered to develop a process to identify the class members and reactivate their appeals.”
Judge Dyk then addressed the adequacy requirement. Unlike the lower court, he found that “[t]he petitioners suffered the same injury as the other proposed class members” and could “conceive of no conflict of interest that would prevent them from serving as class representatives.” He rejected the lower court’s belief that “the class definition included an implied requirement that the . . . closure occur[] without notice.” But he further found that, “[e]ven if the class definition did include a no-notice factor, the petitioners . . . satisfied it because . . . at the time of the complaint they had received no communication from the VA concerning the closure of their appeals.”
Judge Dyk next turned to the Secretary’s argument on appeal that the “proposed class [did] not satisfy requirements of Rule 23 because . . . it [would] be ‘potential[ly] impossibl[e] to identify class members.” He rejected the argument because “the class [was] defined by objective criteria––whether a claimant timely filed a Substantive Appeal yet had their appeal closed.” He concluded “there is no basis for finding a lack of ascertainability because it is difficult to identify the class members.”
As to potential mootness, Judge Dyk concluded that the inherently transitory exception to mootness applied. After noting that “normally the class action become moot” when claims become moot “before class certification,” Judge Dyk highlighted how the “‘inherently transitory’ exception ‘address[es] circumstances in which the challenged conduct was effectively unreviewable’ and focuses on the ‘fleeting nature of the challenged conduct giving rise to the claim.'” Applied here, Judge Dyk found that the speedy reactivation of appeals “make it possible, indeed likely, that an individual claim will become moot before the court can rule on the class certification.” Thus, he concluded, the exception applied.
Judge Dyk finally addressed the appellants’ request to reverse the lower court’s ruling and order that a class be certified. He explained that the Federal Circuit would not do so because the “question of superiority [had] not yet been resolved.”
As a result of Judge Dyk’s analysis, the Federal Circuit vacated the judgment and remanded the case for further adjudiction.