[00:00:27] Speaker 01:
Next case is George Vaughan versus the Department of Veterans Affairs, 2018-1073.

[00:00:32] Speaker 01:
Mr. Carpenter.

[00:00:35] Speaker 02:
May it please the court, Kenneth Carpenter on behalf of Mr. Vaughan.

[00:00:42] Speaker 02:
Let's begin directly with the question of jurisdiction.

[00:00:46] Speaker 02:
The Board of Veterans Appeals in this decision made a clear, unambiguous conclusion of law that a valid debt had been created.

[00:00:54] Speaker 02:
That conclusion of law relies upon an interpretation of 38 USC 5313 that the statute authorizes the VA to create a debt.

[00:01:05] Speaker 02:
The Veterans Court affirmed the board's conclusion of law and in so doing necessarily relied upon the same interpretation of 5313 that the statute authorizes the creation of a debt.

[00:01:19] Speaker 02:
If, as Mr. Vaughan contends, that Section 5313 does not

[00:01:24] Speaker 02:
authorized the creation of the debt by the VA, then that interpretation controls the outcome, which means that this court has jurisdiction.

[00:01:33] Speaker 03:
So this argument, it seems to me, Mr. Carpenter, that you have a waiver problem here.

[00:01:41] Speaker 03:
And I'm not sure, and you're going to have to convince me that you made this argument below.

[00:01:45] Speaker 02:
No, this argument was not made below.

[00:01:48] Speaker 02:
The argument made below relied strictly on a question of due process.

[00:01:53] Speaker 02:
And the question of due process was based upon the assumption, the incorrect assumption, that 5113 was creating a lawful debt and that the right to a hearing on the question of waiver was relevant to the due process consideration for the implementation of the creation of that debt.

[00:02:16] Speaker 02:
In other words, that the hearing was part and parcel of the creative process of creating the debt.

[00:02:21] Speaker 03:
So in that argument, the statute that you mentioned was referenced.

[00:02:28] Speaker 02:
Yes.

[00:02:29] Speaker 03:
The question is whether 38 USC 5313 allows a VA to create a valid debt.

[00:02:36] Speaker 02:
That's correct.

[00:02:36] Speaker 03:
To an employment for overpayment of benefits, correct?

[00:02:39] Speaker 03:
Correct.

[00:02:40] Speaker 03:
That's the argument you've raised and that you're now addressing.

[00:02:45] Speaker 02:
That's correct.

[00:02:45] Speaker 03:
I don't see.

[00:02:46] Speaker 03:
Where did you address that specific argument?

[00:02:49] Speaker 02:
I did not, Your Honor.

[00:02:50] Speaker 02:
I was not counseled below.

[00:02:51] Speaker 02:
but that previous counsel.

[00:02:53] Speaker 03:
Isn't it a wig, then?

[00:02:55] Speaker 02:
Because this court's jurisdiction is implicated based upon an interpretation of a statute that was relied upon by the Veterans Court.

[00:03:05] Speaker 02:
And in order to get to the Veterans Court affirmance of the board's decision, even against a due process assertion, it's necessarily... Okay, so perhaps you can argue those positions, but you can't argue

[00:03:19] Speaker 03:
this position, the one I just laid out.

[00:03:23] Speaker 03:
If you didn't raise it below, I'm having a hard time understanding how you can address it now.

[00:03:30] Speaker 03:
And I do, you're like piggybacking this argument onto something that you did argue below.

[00:03:37] Speaker 02:
Well, what was argued below was a due process argument that was predicated upon the validity of the debt.

[00:03:45] Speaker 03:
Okay, set that aside.

[00:03:47] Speaker 03:
You did not argue that 5313 allows a VA to create a valid debt.

[00:03:53] Speaker 02:
No, Your Honor.

[00:03:54] Speaker 02:
But that was the decision of the board that was appealed by the veteran.

[00:03:59] Speaker 02:
And that was the decision that was affirmed by the Veterans Court.

[00:04:04] Speaker 02:
This court's jurisdiction is derived from any interpretation of any statute that was relied upon by the Veterans Court in making its decision.

[00:04:16] Speaker 02:
The decision of the Veterans Court was that Mr. Vaughan had failed to carry his burden to demonstrate an error by the Veterans Court.

[00:04:24] Speaker 03:
For a second, let's lay the jurisdiction issue aside, and let's just address whether this particular issue, whether that was raised below or not, and you're saying it wasn't.

[00:04:35] Speaker 02:
It was not, Your Honor.

[00:04:36] Speaker 03:
Okay, so perhaps you can argue other positions, other arguments that were raised below,

[00:04:42] Speaker 03:
And you have jurisdiction before this court.

[00:04:45] Speaker 03:
We can listen to that.

[00:04:46] Speaker 03:
But it seems to me that by your statement, you agree that you waived this particular argument that you're raising now.

[00:04:55] Speaker 02:
Your Honor, I agree that it was not raised.

[00:04:57] Speaker 02:
I do not agree that it was waived.

[00:04:59] Speaker 02:
I do not believe that under this court's jurisdictional statute that it can be waived when the jurisdiction of this court is predicated upon whether or not the lower court

[00:05:10] Speaker 02:
did or did not rely upon an interpretation statute.

[00:05:13] Speaker 02:
Now, Your Honor, I may very well be wrong.

[00:05:16] Speaker 02:
I accept that as a reality.

[00:05:18] Speaker 02:
But I believe that that is a correct statement of the law and is consistent with this court's jurisprudence relative to the exercise of this court's jurisdiction when the interpretation of a statute goes to the ultimate outcome and disposition of the appeal below.

[00:05:39] Speaker 02:
I may proceed from the jurisdictional question to the merits.

[00:05:45] Speaker 02:
On the merits of the question of whether or not there was a misinterpretation of this statute, Congress enacted the provisions of 5313 for a singular and limited purpose in which Congress directed and authorized the VA to limit the amount of compensation

[00:06:06] Speaker 02:
that is received by a person who is incarcerated for a felony.

[00:06:10] Speaker 02:
Congress did not, in any way, shape, or form, authorize the VA to do anything other than to limit the amount of the full compensation to which the veteran was entitled to during the period of incarceration.

[00:06:27] Speaker 02:
Congress expressly did not.

[00:06:29] Speaker 01:
Well, the limitation is to zero, isn't it, during the period of incarceration?

[00:06:34] Speaker 02:
I'm sorry, Your Honor?

[00:06:34] Speaker 01:
Isn't the limitation to zero?

[00:06:36] Speaker 02:
No, it is not.

[00:06:37] Speaker 02:
It is to 10%.

[00:06:39] Speaker 02:
So it is a functional reduction from whatever it was.

[00:06:43] Speaker 02:
In this case, it was a total rating.

[00:06:45] Speaker 02:
But if it had been a 30%, 40%, or 50% rating, the veteran under this statute is entitled to retain 10% of his or her benefits.

[00:06:55] Speaker 02:
And that 10% remains untimely.

[00:06:59] Speaker 02:
I'm sorry?

[00:07:00] Speaker 01:
Where is that provided for?

[00:07:02] Speaker 01:
10%?

[00:07:03] Speaker 02:
in the statute, Your Honor.

[00:07:05] Speaker 02:
It says that it shall be reduced to 10%.

[00:07:07] Speaker 02:
I don't have the statute right in front of me here.

[00:07:12] Speaker 01:
5313?

[00:07:13] Speaker 02:
Yes, Your Honor.

[00:07:21] Speaker 01:
All right.

[00:07:22] Speaker 01:
If you say it's there, I'll find it.

[00:07:24] Speaker 02:
OK.

[00:07:24] Speaker 02:
I'm sorry.

[00:07:24] Speaker 02:
It is within one of the subsections, Your Honor.

[00:07:28] Speaker 02:
And I don't believe that that fact is disputed by the government.

[00:07:33] Speaker 02:
In this case, the VA had the sole responsibility to determine whether or not there was an incarcerated veteran who had served 61 days.

[00:07:46] Speaker 02:
And after that 61 days, the direction of 51 or 53-13 was blocked.

[00:07:52] Speaker 03:
Did Mr. Vaughn share any type of responsibility?

[00:07:55] Speaker 02:
No, Your Honor, he does not.

[00:07:57] Speaker 02:
And the government has suggested

[00:07:58] Speaker 03:
Was he required to notify the Veterans Administration of a change of address?

[00:08:06] Speaker 02:
Only if that change of address affected the payment of his benefits that he received.

[00:08:11] Speaker 03:
No, it's a change of address.

[00:08:13] Speaker 03:
He was supposed to notify the VA if his address changed, and he gets sent to prison for a felony murder, his address is changed.

[00:08:21] Speaker 03:
He's going to be there for quite a while.

[00:08:24] Speaker 02:
He changed his address with the VA to his sister.

[00:08:28] Speaker 02:
And he has the right to do that.

[00:08:29] Speaker 02:
But he didn't change it to his prison address.

[00:08:33] Speaker 02:
No, he did not, Your Honor.

[00:08:34] Speaker 02:
And there is nothing in any statute that explicitly directly requires an incarcerated veteran to do that.

[00:08:41] Speaker 02:
Now, the VA would prefer that they do that so that they will know that the veteran is incarcerated.

[00:08:47] Speaker 02:
But Congress did not put any burden on any incarcerated veteran to give direct notice to the VA of their incarceration.

[00:08:57] Speaker 02:
Clearly, if that was a provision within the statute, there'd be no argument here, because there would be no basis for Mr. Vaughn to evade the fact that he was responsible for notifying them.

[00:09:14] Speaker 02:
And as a result of the failure to notify, the overpayment resulted.

[00:09:20] Speaker 02:
But the way in which the statute is actually written, if we stay within the four corners of the statute,

[00:09:27] Speaker 02:
The statute only imposes a burden on the secretary.

[00:09:31] Speaker 02:
And that burden is to limit or reduce the amount of compensation received during the period of incarceration.

[00:09:39] Speaker 03:
What about VA form 21-8764?

[00:09:44] Speaker 02:
That form, Your Honor, simply makes passing reference to the things that the VA describes as conditions affecting the right to benefits.

[00:09:56] Speaker 02:
And the right to benefits is definitely affected by being incarcerated.

[00:10:02] Speaker 02:
It does not say, at the bottom of what is Appendix 102 of the record, that there is any obligation on the part of the incarcerated veteran to inform the VA of that benefit, excuse me, of their being in... I don't have that in front of me, but I think it says,

[00:10:24] Speaker 03:
quote, please notify this office immediately in writing or your signature of any change of address, end of quote, says, quote, benefits will be reduced upon incarceration, end of quote.

[00:10:36] Speaker 03:
Monthly payments of your award may be stopped if you fail to furnish evidence as requested, if you furnish the VA or cost to be furnished any false or fraudulent evidence.

[00:10:49] Speaker 02:
Yes, Your Honor, but they are in two separate sections.

[00:10:52] Speaker 02:
The section that I was referring to is the explanation of the benefit reduction, and that is under a capitalized header, conditions affecting rights to benefits.

[00:11:04] Speaker 02:
Under that condition, or excuse me, above that header is the direction the change of address notice, and it says, please notify the office immediately in writing over your signature of any change in address, which is what he did.

[00:11:20] Speaker 02:
He changed his address.

[00:11:22] Speaker 02:
to his sister's address.

[00:11:24] Speaker 02:
Now, the VA is willing to... But that was not his address.

[00:11:29] Speaker 02:
The address is where he wants his benefits sent to.

[00:11:33] Speaker 02:
There is no requirement in any statute or any regulation that requires the veteran's benefits to be sent directly to the veteran's residence or where the veteran is residing.

[00:11:47] Speaker 02:
For years, I was guardian for a number of veterans

[00:11:50] Speaker 02:
and their benefits were sent to my office.

[00:11:53] Speaker 02:
And that is a permissible direction by the veteran for where they want their benefits sent.

[00:12:00] Speaker 02:
Sometimes they have them sent to other relatives.

[00:12:03] Speaker 02:
Sometimes they have them sent to spouse or other family members.

[00:12:06] Speaker 01:
So what do you want from us, Mr. Coppin?

[00:12:09] Speaker 02:
I want this decision reversed and set aside.

[00:12:15] Speaker 02:
I want it sent back to the Veterans Court for

[00:12:20] Speaker 02:
return to the board with instructions that under the correct interpretation of 5313 the VA exceeded its authority by creating this debt.

[00:12:32] Speaker 02:
There was no lawful basis within the statute to create the debt.

[00:12:37] Speaker 02:
I'm sorry, I see that I'm into my rebuttal time.

[00:12:39] Speaker 01:
That's fine, Mr. Carpenter, we'll save it for you.

[00:12:42] Speaker 01:
Mr. Rosenberg.

[00:12:54] Speaker 00:
Thank you, Your Honor.

[00:12:55] Speaker 00:
May it please the Court.

[00:12:57] Speaker 00:
The sole issue raised on appeal concerns the validity of Mr. Vaughn's debt under Section 5313.

[00:13:04] Speaker 00:
And Mr. Carpenter has acknowledged that that issue was not disputed below.

[00:13:08] Speaker 00:
And consequently, the Veterans Court found that the matter was not disputed and had no opportunity or reason to interpret the statute before moving on to later issues concerning the amount of the debt, the collection of the debt,

[00:13:23] Speaker 00:
and the propriety of denial of a waiver.

[00:13:26] Speaker 00:
And because the issue is not disputed, and because the Veterans Court did not interpret the statute in rendering its decision on those other issues, there has been no interpretation of Section 5313, which this Court would have jurisdiction to review.

[00:13:43] Speaker 00:
The issues presented below concerning, again, the amount of the debt, the VA's actions in collecting the debt, any fault on the part of the parties,

[00:13:53] Speaker 00:
and the denial of the waiver are fact-bound questions which this court has held in prior decisions, it does not have jurisdiction to review.

[00:14:02] Speaker 00:
So it appears that a lot of the focus concerning fault and relative fault of the parties in the validity of the creation of the debt are an indirect or oblique attempt to litigate issues that are fact-bound which this court does not have jurisdiction to review.

[00:14:20] Speaker 01:
You're saying we should dismiss rather than affirm.

[00:14:23] Speaker 00:
Correct, Your Honor.

[00:14:24] Speaker 00:
The court does not have jurisdiction to review any interpretation of Section 5313 because there was no such interpretation by the Veterans Court below.

[00:14:36] Speaker 00:
But if the court did go beyond this jurisdictional argument or overlooks the waiver, an apparently conceded waiver of the issue, the court should affirm the decision below because the Veterans Court correctly conclude what

[00:14:53] Speaker 00:
with the board correctly concluded and the Veterans Court affirmed that Mr. Vaughn's debt took effect on the 61st day of his incarceration by operation of the plain language of the statute itself.

[00:15:06] Speaker 00:
The premise of Mr. Vaughn's brief is that the statute imposes a duty on the VA alone to reduce the payments on the 61st day of incarceration.

[00:15:17] Speaker 00:
If the court looks carefully at the language of 5313A1,

[00:15:21] Speaker 00:
It is not couched in terms of a limitation on what the secretary should do or a mandate to the secretary to do anything.

[00:15:29] Speaker 00:
Instead, it is worded as a prohibition on the payment.

[00:15:34] Speaker 00:
It says that the person who receives the benefits shall not be paid.

[00:15:38] Speaker 00:
It doesn't say that the secretary shall not pay.

[00:15:41] Speaker 00:
It says that that person shall not be paid.

[00:15:44] Speaker 00:
And the focus on the word payment is what animated the court's analysis in Snyder.

[00:15:50] Speaker 00:
distinguishing between payments and awards of compensation.

[00:15:57] Speaker 00:
So under the plain language of Section 5313A1, it contains the date on which the reduction in payments takes effect and the date on which the debt becomes effective.

[00:16:10] Speaker 00:
So when Mr. Vaughan wants this court or directs the court to apply Section 5112, which is a statute of general application,

[00:16:21] Speaker 00:
In spite of the specific commands of 5313A1, there's no way to square the application of the 5112 to the clear command of 5313A1.

[00:16:34] Speaker 01:
Well, how does 5313 authorize the creation of the debt?

[00:16:39] Speaker 01:
Is it simply that it says compensation shall not be paid?

[00:16:43] Speaker 01:
And if it was erroneously paid because of the fault of the veteran,

[00:16:50] Speaker 01:
then ipso facto that creates a debt?

[00:16:53] Speaker 00:
5313 does not contain an express authorization to create a debt.

[00:17:00] Speaker 00:
What it does create is the facts necessary to determine when an overpayment is made.

[00:17:05] Speaker 00:
And all that is needed to turn an overpayment into a debt is determined by the agency that there's been an overpayment and the money is owed.

[00:17:15] Speaker 00:
Issues concerning fault of the veteran, fault of the VA,

[00:17:19] Speaker 00:
All of those issues concerning fault can be resolved in reviewing the recovery of the debt and the denial of a waiver if a waiver is sought.

[00:17:28] Speaker 03:
And those are factual issues?

[00:17:30] Speaker 00:
Those are factual issues.

[00:17:31] Speaker 03:
How does the administration become aware that a veteran has been incarcerated?

[00:17:37] Speaker 00:
Today, the VA has information sharing agreements with both the Federal Bureau of Prisons and the Social Security Administration.

[00:17:45] Speaker 00:
If you're in federal prison,

[00:17:48] Speaker 00:
The Federal Bureau of Prisons will forward your identifying information to the VA.

[00:17:52] Speaker 00:
They will cross-reference it.

[00:17:53] Speaker 00:
And the VA should be able to identify if you are in jail and receiving benefits.

[00:17:58] Speaker 00:
The Social Security Administration serves that function for state court.

[00:18:03] Speaker 03:
So the Bureau of Prisons, as part of the information collected either at a guilty plea, a plea of guilty or a verdict of guilty by a jury,

[00:18:19] Speaker 03:
The Bureau of Prison has information like the pre-sentencing report and things like that that would indicate that the defendant is a veteran.

[00:18:28] Speaker 00:
My understanding is that personally identifying information such as a social security number, which would be, I presume, part of the information conveyed to the Federal Bureau of Prisons, is cross-referenced against a list of social security numbers or other identifying information for veterans receiving benefits and then

[00:18:46] Speaker 00:
If there is a reason to suspect that there is a veteran in jail who is receiving benefits in spite of the commands of 5313, then communication will be made by the VA to the prison to confirm that the person is incarcerated and then the benefits would be reduced at that point.

[00:19:03] Speaker 00:
In the early 1990s, we understand that there was no information sharing agreement that would have captured Mr. Vaughn's incarceration because he was in state prison and there was no information sharing agreement in place at that time.

[00:19:16] Speaker 00:
But to the extent that there's any concern about inequity or injustice, if the VA commits an error in collecting a debt in spite of its own error under 5313, any such inequity can be handled and resolved by application of the statute and the regulations providing for the waiver of indebtedness.

[00:19:35] Speaker 00:
And the regulation provides that if it is against equity and good conscience to collect the debt, that the VA shall not do so.

[00:19:45] Speaker 00:
If the panel does not have any other questions, we would ask that the court dismiss this appeal for lack of jurisdiction or on the alternative to affirm the decision below.

[00:19:53] Speaker 01:
Thank you, counsel.

[00:19:55] Speaker 00:
Thank you.

[00:19:56] Speaker 01:
Mr. Coppenter has some rebuttal time if he needs it.

[00:19:59] Speaker 02:
Thank you very much, your honor.

[00:20:01] Speaker 02:
The government says that all that is needed to create a debt is what the government describes.

[00:20:09] Speaker 02:
Absent from that, is any citation to this court in their briefs or in their arguments

[00:20:13] Speaker 02:
as to where the statute is or the regulation that authorizes them to create a debt.

[00:20:20] Speaker 02:
There is no such statute.

[00:20:24] Speaker 02:
Most importantly, there is no such statute, excuse me, no such provision within 5313.

[00:20:29] Speaker 01:
Well, Mr. Rosenberg says the statute limits the payment.

[00:20:36] Speaker 01:
And if payment was made improperly, it's in fact a visit.

[00:20:42] Speaker 01:
It has to be paid back.

[00:20:45] Speaker 02:
Except that, Your Honor, ipso facto is not how debt is created.

[00:20:49] Speaker 02:
Debt is created when there is a process to identify how the debt was created.

[00:20:57] Speaker 02:
And that is what is missing within the confines of the statute.

[00:21:03] Speaker 02:
There is nothing in 5313 that makes reference to a debt, makes reference to overpayment, and says how that will happen.

[00:21:13] Speaker 02:
This only happened because the VA did not know that Mr. Vaughn was incarcerated.

[00:21:21] Speaker 02:
Yet when Mr. Vaughn made application for his dependents to have those dependents paid while he was incarcerated, his benefit, less than 10%, the VA processed that application and all of his benefits, less than 10%,

[00:21:42] Speaker 02:
were paid to his dependents.

[00:21:44] Speaker 02:
There was only the five-year period in which the government failed to act.

[00:21:49] Speaker 02:
How is their failure to act an ipso facto creation of a debt?

[00:21:56] Speaker 02:
There must be some affirmative action on the part of the veteran to create a debt.

[00:22:04] Speaker 03:
If we disagree with your statement that you just made, what does that do to the rest of your argument?

[00:22:13] Speaker 03:
There's nothing left, right?

[00:22:14] Speaker 02:
I'm not sure which part you're referring to.

[00:22:19] Speaker 03:
We find a waiver on the issue that you and I discussed.

[00:22:21] Speaker 02:
Yes.

[00:22:22] Speaker 03:
Then what's left of your argument here on appeal?

[00:22:26] Speaker 02:
If you find that there was a waiver?

[00:22:28] Speaker 02:
Yes.

[00:22:28] Speaker 02:
Oh, then the case is over, Your Honor.

[00:22:30] Speaker 02:
I don't dispute that at all.

[00:22:32] Speaker 02:
And clearly, that's within your discretion to make that determination.

[00:22:36] Speaker 02:
I simply suggest to you that the way in which this court's jurisprudence reads, this court's jurisprudence

[00:22:42] Speaker 02:
or this court's jurisdiction is derived when the lower court relies necessarily upon an interpretation.

[00:22:49] Speaker 02:
And if that interpretation were different, the outcome below would be different.

[00:22:54] Speaker 02:
That implicates your jurisdiction, which then gets us to the question of what 53.13 does or does not provide in terms of the authority to create a debt or an overpayment.

[00:23:05] Speaker 02:
Thank you very much, Your Honors.

[00:23:06] Speaker 01:
Thank you, Mr. Coffinup.

[00:23:08] Speaker 01:
I'll take the case under revised.