[00:00:51] Speaker 04:
Our next case is Sean Raven versus the Department of Veterans Affairs, 2019-1532, Mr. Carpenter.

[00:00:59] Speaker 04:
Thank you, Your Honor.

[00:01:02] Speaker 00:
May it please the Court, Count Carpenter appearing on behalf of Mr. Raven.

[00:01:07] Speaker 00:
The Veterans Court misinterpreted the plain language of sections 14, 636, G3, and H4 when it concluded that if an attorney fails to file an otherwise valid direct pay fee agreement with the agency of original jurisdiction within 30 days of the date of execution, then the VA is no longer responsible for withholding the fees

[00:01:31] Speaker 00:
for passive benefits and paying them directly to the practitioner.

[00:01:35] Speaker 00:
There is nothing in the plain language of either of those two provisions that takes the VA's responsibility, the Secretary's responsibility, under 38 USC 5904D from doing precisely what the Veterans Court said that they were relieved of under the

[00:01:54] Speaker 00:
plainly revealed language of these statutes and their structure, or these regulations and their structures.

[00:02:02] Speaker 01:
What about the permissive nature of the statute, looking at 5904D3, where it says the Secretary may pay the attorney fees directly?

[00:02:15] Speaker 01:
That's right.

[00:02:17] Speaker 01:
Since that's permissive, why wouldn't it be permissive in this circumstance where the regulations were not confide with?

[00:02:24] Speaker 00:
The permissive nature of the statutory language was interpreted by the Veterans Court in Snyder, cited in our brief in support of the fact that it is mandatory and not permissive

[00:02:38] Speaker 00:
and that this is an obligation of the Secretary, as intended by Congress.

[00:02:43] Speaker 00:
Congress wrote a unique statute in 5904D.

[00:02:48] Speaker 00:
As far as I am aware, there is no other comparable statute in which the Congress directs the agency to withhold and pay fees from a grant of an award.

[00:03:00] Speaker 00:
and does so upon a specific condition or conditions that the fee must be limited to an amount of 20 percent and that the fee agreement for representation of the veteran must be on a contingent basis.

[00:03:16] Speaker 01:
And it has to be at least according to the regulation filed within a certain amount of time.

[00:03:21] Speaker 00:
That's right.

[00:03:22] Speaker 00:
And that is mandated by Congress under 5904C, a separate subsection of the statute in which Congress specifically delegated to the Secretary the authority to promulgate regulations.

[00:03:35] Speaker 00:
And amongst those regulations were the two regulations at issue here.

[00:03:40] Speaker 00:
What the Secretary did not do was to provide a consequence.

[00:03:45] Speaker 00:
They parroted the language of the statute and said that there must be a filing within, or that there must be a filing.

[00:03:52] Speaker 01:
So your view is the agency can't provide the consequence.

[00:03:56] Speaker 01:
I'm sorry?

[00:03:56] Speaker 01:
Your view is that the agency cannot provide the consequence.

[00:04:00] Speaker 00:
That's correct, Your Honor.

[00:04:03] Speaker 00:
And if they're going to provide a consequence, they need to do so plainly to put the attorney or the agent on notice that there is a consequence.

[00:04:13] Speaker 00:
So, presupposing for a moment that there is a basis for the Secretary to provide a consequence, they must do so plainly and expressly so that the agent is on notice.

[00:04:25] Speaker 00:
And factually what occurred here, I understand.

[00:04:27] Speaker 03:
So, just curious, why does the regulation even say 30 days?

[00:04:33] Speaker 00:
I'm sorry?

[00:04:34] Speaker 03:
Why does the regulation call out the 30-day time limit?

[00:04:38] Speaker 03:
As I understand it, your position is there should be no consequence if that 30-day limitation is not met.

[00:04:46] Speaker 03:
So therefore, we should just, I guess, assume that it has no consequence, no value, no meaning.

[00:04:54] Speaker 00:
No, no, Your Honor.

[00:04:55] Speaker 00:
I – that is not our position.

[00:04:57] Speaker 03:
Our position is – So then why is it there in the regulation?

[00:05:00] Speaker 00:
to put the agents and attorneys on notice that that is the expectation of the secretary.

[00:05:07] Speaker 00:
That they get that fee agreement so that they can have that fee agreement available to determine in a withholding context whether or not they do or do not meet the requirements of the statute for withholding and payment purposes.

[00:05:22] Speaker 00:
It is entirely appropriate for them to put that in there.

[00:05:25] Speaker 00:
The problem here is is that what the Veterans Court did is to take it another step.

[00:05:30] Speaker 00:
and to say that there is a consequence that the VA is no longer responsible.

[00:05:37] Speaker 00:
If the Secretary had said, if you do not submit it within 30 days, then we are putting you on notice that we are no longer responsible under 5904.

[00:05:48] Speaker 04:
Well, according to the regulation, it's contingent.

[00:05:52] Speaker 04:
that they will pay directly if certain requirements are met.

[00:05:59] Speaker 04:
And the regulation says must be filed, must be filed within 30 days.

[00:06:04] Speaker 04:
Correct.

[00:06:04] Speaker 04:
And if that didn't happen, then their permissive opportunity for direct payment simply doesn't come into effect.

[00:06:14] Speaker 00:
Well, except that, Your Honor, there's several problems with that in the facts of this particular case.

[00:06:20] Speaker 00:
In the facts of this particular case, Mr. Raven did provide the fee agreement within 30 days to the Board of Veterans' Appeals.

[00:06:28] Speaker 00:
And from 1988 until 2007, approximately, the obligation to provide your fee agreement was to the board.

[00:06:35] Speaker 04:
The board is not the agency.

[00:06:37] Speaker 00:
I'm sorry, Your Honor?

[00:06:38] Speaker 04:
The board is not the agency.

[00:06:39] Speaker 00:
No, the board is not the agency.

[00:06:41] Speaker 00:
But that was the mandate of the statute

[00:06:44] Speaker 00:
prior to 2007.

[00:06:46] Speaker 00:
This happened within a couple of years of that enactment that changed the requirement as to where the fee agreement should be filed.

[00:06:55] Speaker 04:
Mr. Raven is not without a remedy.

[00:06:59] Speaker 04:
Will his client not pay him what he owes him for services rendered?

[00:07:06] Speaker 00:
Well, Your Honor, respectfully, I don't believe that's the issue in this case.

[00:07:10] Speaker 00:
And yes, there is a potential remedy there, but the obligation under 5904D, if the Veterans Court is correct, is mandatory, then it is required that the Secretary comply with his mandatory obligation.

[00:07:26] Speaker 03:
What mandatory obligation do you see in 5904D?

[00:07:30] Speaker 00:
to withhold and pay the fee when the fee agreement... It says May.

[00:07:35] Speaker 00:
It does say May, Your Honor.

[00:07:36] Speaker 03:
The Secretary may direct that payment.

[00:07:39] Speaker 03:
And the veteran... To an agent or attorney.

[00:07:42] Speaker 03:
So I guess I don't understand why you think May means shall.

[00:07:46] Speaker 00:
Because the Veterans Court said so in Snyder.

[00:07:50] Speaker 00:
And that was the law that the panel in this case was required to file.

[00:07:55] Speaker 03:
I thought Snyder said only when all of the statutory and regulatory requirements are actually fulfilled, then the secretary must actually fulfill its end of the bargain, which is to then directly pay the fee to the attorney.

[00:08:13] Speaker 00:
And Snyder was decided at a time in which this regulation... Are you saying that Snyder didn't say what I just said?

[00:08:20] Speaker 00:
I am not, Your Honor.

[00:08:21] Speaker 00:
Snyder did say that.

[00:08:22] Speaker 03:
Okay, so the Veterans Court in Snyder did not interpret 5904D when 5904D said may.

[00:08:30] Speaker 03:
The Veterans Court didn't say, oh, we should read that statute to say shall, not may.

[00:08:36] Speaker 03:
The Veterans Court didn't say that, did it?

[00:08:39] Speaker 00:
Well, that's my understanding of their holding, Your Honor, with the condition that you meet the statutory and regulatory requirements.

[00:08:46] Speaker 00:
Right.

[00:08:46] Speaker 03:
And with the regulatory requirement met here?

[00:08:51] Speaker 00:
The regulatory requirement was not met here.

[00:08:53] Speaker 00:
However, Your Honor, at the time in which Snyder was written, Snyder was speaking only to the regulation that required compliance with the provisions of 5904.

[00:09:04] Speaker 00:
The requirements of this regulation require compliance with 5904C, not 5904D.

[00:09:13] Speaker 00:
And therefore, we're dealing with a situation in which the veteran – excuse me – the attorney is confronted with having performed services with the expectation that the Secretary was going to withhold and pay his fee.

[00:09:28] Speaker 00:
What occurred here was the Secretary refused to consider

[00:09:33] Speaker 00:
whether or not he was obligated to withhold and pay under 5904D and they made that decision before they had in fact received the fee agreement from Mr. Raven on April the 27th and in fact

[00:09:49] Speaker 00:
The agency had possession of it in the claims file for Mr. Cook, the veteran, of this fee agreement that had been submitted to the board.

[00:10:00] Speaker 03:
There is one agent... Why was it Mr. Raven hadn't submitted the fee agreement to the correct department, you know, for five years after the fact, then came in and said, aha, I did it, and

[00:10:12] Speaker 03:
The regulation doesn't say that I forfeited the benefit of a direct payment, so now it's time for you to pay me.

[00:10:20] Speaker 03:
Would that be okay?

[00:10:22] Speaker 00:
No, I don't believe it would be, Your Honor, but those are not the facts of this case, and that's not the holding of... What makes the facts here different from the hypothetical I just raised?

[00:10:34] Speaker 00:
the the time period in in your uh... circumstance the fee agreement was not attempted to be submitted until five years thereafter in this case the fee agreement was actually submitted to the agency there's only one agency here you're talking about when it was submitted to the board to the board okay so now you need to rely on that i don't believe i do your honor

[00:11:00] Speaker 03:
additional argument that you're making now is an argument that it was timely filed, that it did comply with the regulation.

[00:11:08] Speaker 03:
Is that your argument?

[00:11:10] Speaker 00:
Well, we made that argument below.

[00:11:11] Speaker 00:
That is not the argument that we chose to bring here because of the decision made by the Veterans Court that expressly said that the agency was relieved of its obligation under 5904.

[00:11:25] Speaker 03:
So then you, on the facts of this case, for purposes of this appeal, you concede that you did not comply with the requirements of the regulation.

[00:11:32] Speaker 03:
I do, Your Honor.

[00:11:33] Speaker 03:
To submit the fee agreement to the right place within 30 days.

[00:11:37] Speaker 00:
I do, Your Honor.

[00:11:37] Speaker 03:
The question... Okay, so outside the 30 days that ultimately got filed.

[00:11:41] Speaker 00:
That's correct.

[00:11:42] Speaker 03:
And so what's the difference between your fact pattern and the fact pattern I raised in my hypothetical?

[00:11:47] Speaker 00:
The five years, Your Honor, and that there was ample opportunity for the Secretary... So five years, not good, but what?

[00:11:55] Speaker 03:
A year is okay?

[00:11:56] Speaker 00:
No.

[00:11:57] Speaker 00:
Within 30 days of the decision that implemented, that put both the agency, the veteran, and the attorney on notice that there was going to be an award of past due benefits.

[00:12:09] Speaker 00:
Within that 30-day window, from April 7th, when the... What regulation says this 30-day window is the critical

[00:12:18] Speaker 00:
There is no regulation that says that, Your Honor.

[00:12:21] Speaker 00:
And the point is, is that this regulation says 30 days, but doesn't say what the Veterans Court said was, that then the agency would be relieved of its responsibility.

[00:12:34] Speaker 00:
And I'm saying that the intent of Congress in 5904 was to compensate the attorney, to ensure that the attorney was paid for his services by the secretary, by the affirmative act of the secretary withholding his fee.

[00:12:49] Speaker 00:
I see that I'm into my rebuttal time, and I'd like to reserve the balance.

[00:12:53] Speaker 04:
We will save it for you, Mr. Carpenter.

[00:12:54] Speaker 04:
Mr. Bruskin?

[00:12:59] Speaker 05:
May it please the Court, before I address my friend's attempt to rewrite the VA's regulation, I'd like to respond to something he said to you, which was that the Secretary refused to consider whether or not it was required to pay fees to Mr. Raven.

[00:13:15] Speaker 05:
That is factually incorrect and I think gets at a bigger point I want to draw the Court's attention to.

[00:13:21] Speaker 05:
At Appendix 67, on April 13th,

[00:13:24] Speaker 05:
There's a note from the fee coordinator in the Muskegee regional office saying that they checked to see if there was a direct pay fee agreement in the record in Mr. Cook's case and did not find one because he had not filed one with the regional office.

[00:13:40] Speaker 05:
So the idea that they refused to consider payment is factually correct.

[00:13:45] Speaker 05:
It also gets, I think, at an underlying argument that is in Mr. Raven's brief, which is that

[00:13:51] Speaker 05:
The VA here somehow erred by moving quickly to provide Mr. Cook with his past two benefits.

[00:13:58] Speaker 05:
The suggestion is that the regional office used with unusual rapidity and that somehow they had a bad faith motive in doing so.

[00:14:07] Speaker 05:
And I think given the number of times a veteran bar accuses the VA of dragging its heels in making sure that veterans get their payment, it rings rather hollow for Mr. Raven to now accuse the VA of moving quickly, but doing so somehow to deprive him of his benefits.

[00:14:25] Speaker 05:
Atturning to the regulation itself, the regulation, as the court said, is plain as day.

[00:14:31] Speaker 05:
It has a requirement that attorneys who are accredited by the VA to represent veterans know the difference between the board and the agency of original jurisdiction, and that they file their direct pay fee agreements with the agency of original jurisdiction within 30 days of the date of execution of the agreement.

[00:14:50] Speaker 04:
What about the Veterans Court opinion that Mr. Carpenter cites?

[00:14:55] Speaker 04:
Of course, we recognize we're not bound by it.

[00:14:59] Speaker 04:
What is the holding?

[00:15:00] Speaker 05:
Judge Chen was correct.

[00:15:01] Speaker 05:
The holding in that case was where the Secretary has elected under 5904D to promulgate regulations that allow for direct pay and the attorneys have satisfied all the requirements in the regulation to receive direct pay, then the VA is obligated to follow the regulations.

[00:15:19] Speaker 05:
and paid direct pay.

[00:15:21] Speaker 05:
In that case, the VA had mistakenly paid the veteran or veterans 100% of their past due benefits despite the attorneys having correctly filed a valid agreement with the correct VA office.

[00:15:35] Speaker 05:
And the argument there was, well, if the VA has paid out all of the money,

[00:15:39] Speaker 05:
nothing remains to be paid to the veteran.

[00:15:42] Speaker 05:
The veterans court in Snyder said, no, if you've elected to provide through the regulations for direct pay and the attorney or agent satisfies the regulations, then it's a mandatory obligation.

[00:15:53] Speaker 05:
But only if and when, not based on turning the May and 5904D into a shall.

[00:16:03] Speaker 03:
I have a question, hypothetical.

[00:16:06] Speaker 03:
What if Mr. Raven submitted a copy of this fee agreement outside the 30-day regulatory requirement, but maybe got it in at day 32, or day 42, or day 92?

[00:16:22] Speaker 03:
Is there some kind of regulation that

[00:16:26] Speaker 03:
Mr. Raven could then petition the waiver of that regulatory requirement, that 30-day regulatory requirement, and say, please, I know I'm a little late, but just accept this fee agreement.

[00:16:40] Speaker 03:
And then please, if and when my client gets awarded benefits, direct pay me my contingency fee amount.

[00:16:49] Speaker 05:
So two responses.

[00:16:50] Speaker 05:
One, I don't think there's a direct to the RO sort of waiver request you can make through the regulations.

[00:16:56] Speaker 05:
He would have to file a notice of disagreement and go through that process.

[00:17:01] Speaker 05:
But my understanding from the VA is that they don't impose this H4 filing requirement when it serves no purpose.

[00:17:10] Speaker 05:
So that if Mr. Raven had provided his fee agreement on day 32 and it was in the record and there was no prejudice to the veteran from Mr. Raven's failure to file it,

[00:17:20] Speaker 05:
within the 30 days, they would have paid him his 20% fee.

[00:17:26] Speaker 05:
The problem here is that when they went to pay the fees to...

[00:17:32] Speaker 05:
Well, it's a practice, but it's not in the regulation.

[00:17:36] Speaker 05:
And it reflects a certain level of flexibility, recognizing that they're not trying to impose this just for the sake of trying to undercut fees to attorneys, recognizing that it is important for attorneys to be able to represent veterans.

[00:17:51] Speaker 05:
It is important, though, that the attorneys provide the office that pays the money with the agreement in sufficient time.

[00:17:58] Speaker 05:
30 days certainly seems sufficient.

[00:18:01] Speaker 01:
Otherwise, you have to pay extra, right?

[00:18:03] Speaker 01:
I mean, you have fees that you could be providing to veterans who need it, or not fees, but payments.

[00:18:09] Speaker 01:
that would instead be going for attorney fees for attorneys who haven't properly filed their papers, right?

[00:18:15] Speaker 05:
Right.

[00:18:15] Speaker 05:
That's exactly right.

[00:18:16] Speaker 05:
And in this case, it shows that the problem is that they paid Mr. Cook on April 19th, and then eight days later, Mr. Raven shows up.

[00:18:23] Speaker 05:
And so what he's requiring either is that the VA double pay those 20 percent and then either

[00:18:29] Speaker 05:
pay 120 percent or seek to recover costs from veterans despite the failure to follow the requirement.

[00:18:36] Speaker 05:
Or he suggests in his reply that the court rewrite the regulation to require VA to hold on to veterans' money for 30 days when they find there's no fee agreement in the record and provide notice to the attorney that they've failed to file their fee agreement with the regional office and allow them to correct that problem.

[00:18:53] Speaker 05:
That's obviously not allowed under 5904, which says that the VA can't withhold money like that.

[00:19:00] Speaker 05:
It also serves no purpose.

[00:19:02] Speaker 05:
The 30-day requirement is not onerous on an attorney to simply submit a copy of their fee agreement with the correct office within the VA.

[00:19:11] Speaker 04:
The Veterans Court decided this case by a panel of three judges.

[00:19:15] Speaker 04:
Are they doing that more often these days, or does this signal that it's an especially important case in terms of the law?

[00:19:22] Speaker 05:
I think the argument that there is no penalty written into the regulation the court noted was at least somewhat novel, and so I believe they wanted to give additional consideration to that argument.

[00:19:39] Speaker 05:
Of course, the requirement that there be no direct pay need not appear as a penalty in the regulation, because the regulation says, obviously, unless and until attorney agent you do these things, we have to pay the money to the veteran.

[00:19:57] Speaker 04:
And so there's no offense here, which, if not complied with, requires a penalty.

[00:20:04] Speaker 04:
It's a benefit with conditions.

[00:20:07] Speaker 04:
That's exactly right.

[00:20:10] Speaker 05:
That's exactly right.

[00:20:13] Speaker 05:
Unless the court has any further questions, we'd ask the court to affirm the veterans' court.

[00:20:16] Speaker 05:
Thank you.

[00:20:18] Speaker 04:
Mr. Coppenter has three minutes for public.

[00:20:21] Speaker 00:
Thank you.

[00:20:22] Speaker 00:
I'd like to direct the panel's attention to Appendix 67.

[00:20:25] Speaker 00:
This is a memorandum dated April 13th of 2010 by the station attorney fee coordinator involving this case and indicates that after

[00:20:40] Speaker 00:
Thoroughly reviewing a check made in vacals for the existence of an attorney fee agreement in the record in this case, the review finds that there was no attorney fee agreement of record.

[00:20:51] Speaker 00:
Therefore, no attorney fee decision is required.

[00:20:54] Speaker 00:
This clearly reflects their intention not to proceed with a determination to review that attorney fee to determine compliance with 5904D.

[00:21:05] Speaker 00:
But more importantly, this was done six days before they paid Mr. Cook on a decision that had been made ten days earlier.

[00:21:14] Speaker 00:
The fact of the matter is that this memorandum was not served on Mr. Cook.

[00:21:22] Speaker 00:
Raven, he was not given an opportunity to respond, yet within 14 days on the 27th of April, he submitted his fee agreement to get the opportunity, not knowing that this memorandum had existed, for this attempted waiver to get consideration of his fee agreement, having been submitted in less than 30 days from the date of the decision that implemented the board's decision.

[00:21:49] Speaker 00:
So Mr. Raven made every effort to do this, filing his fee agreement initially with the board, realizing that there was not compliance with the regulation, even though there wasn't notice, and going ahead and giving his fee agreement to the secretary.

[00:22:05] Speaker 00:
Now, at this point in time, the secretary had more than ample opportunity to stay payment to Mr. Cook of the fees that should have been withheld under 5904.

[00:22:20] Speaker 00:
The argument of the government that this is not something that they do to impede the attorney is simply betrayed by the facts in this case.

[00:22:33] Speaker 00:
There was ample opportunity to comply with 5904 as was understood at that time to be mandatory.

[00:22:40] Speaker 00:
Obviously, this panel can decide whether the language of 5904 that says may is mandatory or not.

[00:22:47] Speaker 00:
But regardless, in this case, this is about what the regulations provide for.

[00:22:53] Speaker 00:
And the regulations simply did not put Mr. Raven or any other attorney or agent on notice of the consequence.

[00:23:02] Speaker 01:
Can I ask you something?

[00:23:03] Speaker 01:
You said this court could re-decide.

[00:23:05] Speaker 01:
I'm sorry?

[00:23:07] Speaker 01:
You said this court could re-decide.

[00:23:09] Speaker 01:
Yeah.

[00:23:10] Speaker 01:
Just to make sure I understand, Schneider was not decided by this court, right?

[00:23:14] Speaker 00:
no agreed we decide the interpretation i'm sorry i didn't mean to decide the case but read reinterpret or interpret anew in the context of this case and of course it's possible that we could conclude that veterans court snyder doesn't say anything

[00:23:31] Speaker 02:
inconsistent with the idea that it's 5904 is in fact permissive.

[00:23:37] Speaker 02:
It's not mandatory.

[00:23:38] Speaker 00:
Yes, you could.

[00:23:39] Speaker 00:
Absolutely.

[00:23:41] Speaker 00:
I see that my time is up.

[00:23:42] Speaker 00:
Thank you very much.

[00:23:42] Speaker 04:
Thank you, Council.

[00:23:43] Speaker 04:
The case is submitted.