[00:00:00] Speaker 03:
Our next case is Percival versus McDonough, case number 20-1653.

[00:00:06] Speaker 03:
Mr. DeHawkis, are you ready?

[00:00:10] Speaker 01:
Yes, Your Honor, I am.

[00:00:11] Speaker 03:
Yes, you may proceed, please.

[00:00:13] Speaker 01:
Thank you.

[00:00:13] Speaker 01:
May it please the court.

[00:00:15] Speaker 01:
On behalf of Mr. Percivali, I want to thank the court for the opportunity to present his case today.

[00:00:21] Speaker 01:
This appeal primarily asked the court to consider first the proper interpretation of 38 USC 5904C,

[00:00:29] Speaker 01:
and its requirement that a notice of disagreement is filed with respect to the case before an agent is entitled to charge and earn a fee.

[00:00:36] Speaker 01:
However, to interpret this phrase, we must first look at and consider exactly what under Section 7105 a notice of disagreement is.

[00:00:48] Speaker 01:
Pursuant to 5904C, a fee may not be charged, allowed, or paid for services with respect to services provided before the date

[00:00:58] Speaker 01:
on which a notice of disagreement is filed.

[00:01:01] Speaker 03:
Counsel, this is Judge Raina.

[00:01:03] Speaker 03:
It seems to me that the central question that we're dealing with here is, how specific does the NOD have to be?

[00:01:11] Speaker 03:
Can you address that issue?

[00:01:14] Speaker 01:
Yes, Your Honor.

[00:01:15] Speaker 01:
Looking at the structure of the statute as well as case law, the specificity of the notice of disagreement should not be read to have

[00:01:28] Speaker 01:
or a precise pleadings requirement.

[00:01:32] Speaker 01:
The sole purpose of the Notice of Disagreement is to initiate an appeal.

[00:01:37] Speaker 01:
And it must be remembered that a Notice of Disagreement is not an appeal.

[00:01:42] Speaker 01:
What it does under the statute is it triggers specific actions by the agency of original jurisdiction to review the record anew, applying all relevant laws, and make a new decision in response to the disagreement.

[00:01:59] Speaker 01:
In Hamilton v. Brown, site 39, F3rd, 1574, this court held that the NOD has no other function but to initiate appellate review.

[00:02:10] Speaker 01:
And in Gallegos v. Principi, the court said, and I'm quoting, although initiating the appeal process in NOD may or may not actually lead to an appellate review.

[00:02:20] Speaker 03:
After receiving the NOD... How does the court know that it even has jurisdiction?

[00:02:28] Speaker 03:
over a particular issue unless there's some sort of specificity as to what's at dispute, especially if we're talking about a point of law.

[00:02:38] Speaker 01:
Your Honor, the jurisdiction on these specific issues is derived from the substantive appeal.

[00:02:45] Speaker 01:
When a notice of disagreement is filed, as I said, the statute triggers specific actions by the agency that must be performed.

[00:02:55] Speaker 01:
One of those is a mandatory development or review action where the AOG identifies and applies all applicable laws to effectuate the VA stated policy, which as we pointed out in our briefing under 38 CFR 3.103A is to render a decision which grants every benefit that can be supported by law.

[00:03:18] Speaker 01:
And so the agency either will grant the benefit or issue a supplemental statement of the case

[00:03:25] Speaker 01:
which under 7105D1 requires it to set out the specific allegations of error, relate this to the specific items, and then clearly identify, I'm sorry, that was the, and to issue a new decision on each issue with a summary of the reasons for such decision.

[00:03:52] Speaker 01:
From that statement of the case,

[00:03:54] Speaker 01:
The claimant then identifies the specific issues that he or she wishes to appeal to the board.

[00:04:00] Speaker 01:
And the board's decision is where the courts derive their jurisdiction, not from the agency.

[00:04:09] Speaker 02:
Mr. DeHoggins, is Judge Clevinger?

[00:04:12] Speaker 02:
Yes, Your Honor.

[00:04:13] Speaker 02:
As you pointed out, I mean, in order for your client to be able to prevail, you have to satisfy the test in 5904C1, right?

[00:04:22] Speaker 02:
Yes, Your Honor.

[00:04:24] Speaker 02:
And that test says he has to file a nod, quote, with respect to the case.

[00:04:30] Speaker 02:
And so with respect to the case seems to me to be the key language.

[00:04:35] Speaker 02:
The CAVC held that the nod that the lawyer filed was not with respect to the TDIU case.

[00:04:47] Speaker 02:
So if the CAVC was correct in that regard, then

[00:04:52] Speaker 02:
It's fine that he filed a nod, but the nod with a nod that just to say that raised the question asked for review, but it was not quote with respect to the case.

[00:05:03] Speaker 02:
And so it was an insufficient nod for purposes of allowing your client to be able to have access to his share of the attorney fee, the share of the veterans fee reward.

[00:05:17] Speaker 02:
So it seems to me that

[00:05:19] Speaker 02:
the language with respect to the cases where you should be focusing to try to convince us that the CABC was wrong.

[00:05:27] Speaker 02:
The CABC recognized that SMC is affiliated with, but they felt that SMC, in this case, the board was not obligated to consider SMC.

[00:05:43] Speaker 01:
Correct, Your Honor.

[00:05:44] Speaker 01:
That is the... I'm just looking for what is basically

[00:05:49] Speaker 02:
of the fulcrum or where the point, the decisional, the decision tree here is, that unless you can convince us that the April 30th letter was with respect to SMC as opposed to with respect to TDIU, you can't prevail, correct?

[00:06:11] Speaker 01:
Yes, Your Honor.

[00:06:12] Speaker 01:
I would agree with that.

[00:06:13] Speaker 01:
However, I would disagree.

[00:06:15] Speaker 02:
I can't tell you how to argue it.

[00:06:18] Speaker 02:
But it seems to me that you should need to focus on why it is you think that a nod with respect to SNC was a nod with respect to the case in front of the agency, which was only TDIU.

[00:06:36] Speaker 02:
The agency was trying to decide whether to continue TDIU for the veteran, correct?

[00:06:46] Speaker 01:
Generally speaking, yes, correct, your honor.

[00:06:49] Speaker 02:
However, the actual action that the trigger here was the request, the questionnaire that was sent to the veteran asking the veteran if he was still unemployed.

[00:07:02] Speaker 02:
He had, if he checked the box that he was employed, he would lose his TDIU.

[00:07:08] Speaker 02:
So the car was doing housekeeping.

[00:07:11] Speaker 02:
The TDIU that he'd been granted for a limited period was running out.

[00:07:15] Speaker 02:
And so the RO was, as it should, sends the letter to the veteran saying, please answer this questionnaire.

[00:07:24] Speaker 01:
Yes, Your Honor.

[00:07:25] Speaker 01:
But that interpretation only works if the secretary is allowed to ignore two very important binding laws, one of which is 38 USC 5107B, which requires the VA to consider all information and lay in medical evidence of record

[00:07:44] Speaker 01:
in a case before the secretary with respect to benefits.

[00:07:48] Speaker 01:
Furthermore, as I mentioned, 38 CFR 3.103A requires the VA each time he makes a decision to grant every benefit supported by the law.

[00:07:59] Speaker 01:
So when we are looking at what is the case, we have to consider it within the context of those two, primarily those two laws that require a thorough review

[00:08:11] Speaker 01:
each and every time a decision is made to the veteran or claimant and also requires the VA to grant every single benefit supported in the law.

[00:08:20] Speaker 01:
And that is where the basis of the entitlement to additional benefits for his already service-connected conditions derives its authority.

[00:08:31] Speaker 02:
And so when the... Now, in this discussion that we've been having thus far, Mr. Johakis, if one read the opinion of the CAVC,

[00:08:41] Speaker 02:
And then set it aside and listen to this discussion.

[00:08:44] Speaker 02:
We've been having none of this discussion is reflected in any way, shape, or form in the CABC decision.

[00:08:52] Speaker 02:
And the reason for that, according to your adversary, is that you have not raised these issues to the CABC.

[00:09:01] Speaker 02:
And the CABC is raising them in a minute.

[00:09:09] Speaker 01:
They are raised for the first time here before this court, but as we explained in our briefing, the court's ruling was based upon an interpretation of what is the NOD with respect to the case, where they interpreted the notice of disagreement adding a qualifier or a descriptor of a valid NOD

[00:09:36] Speaker 01:
as opposed to what 5904C really states is that just a notice of disagreement is required.

[00:09:44] Speaker 02:
Right.

[00:09:44] Speaker 02:
But as you clearly know, our ability to hear an argument raised to us for the first time on appeal is a matter of discretion for us to decide whether to exercise that discretion.

[00:10:04] Speaker 02:
It seems to me that a number of these things you're raising with us are interesting arguments, but it might have been better if they'd been vetted first by the CAVC so that we had its point of view on these issues before we are being asked to decide them as a matter of first impression.

[00:10:26] Speaker 02:
I'm interested in knowing why you think it's a matter and what's

[00:10:31] Speaker 02:
How do you counter the argument that it might not be a good exercise of discretion for us to proceed on these points?

[00:10:38] Speaker 01:
Well, primarily, Your Honor, as I said and in the briefings, the Veterans Court did interpret the statute in a way that is inconsistent with the plain meaning and the structural and the structure of the statute story scheme.

[00:10:57] Speaker 02:
The statute story analysis by the CAVC was not with respect

[00:11:01] Speaker 02:
really at all to 59L4C1, it was with respect to the statute, the regulation that provides for responding to the questionnaire.

[00:11:14] Speaker 02:
And that on response to the questionnaire, the VA will rearrange all benefits.

[00:11:24] Speaker 01:
Yes, Your Honor.

[00:11:25] Speaker 01:
And they did that.

[00:11:26] Speaker 01:
But they started with a premise that the NOD must in some way

[00:11:31] Speaker 01:
be limited to whatever determination was in the decision letter mailed to the claimant.

[00:11:41] Speaker 01:
And the correct interpretation, which they glossed over honestly and failed to really explain why, but the correct interpretation of both 5904C and 7105 is that the notice of disagreement is derived in large part

[00:12:00] Speaker 02:
Can you cite that decision in the record, cite me to that decision letter you just mentioned?

[00:12:09] Speaker 01:
Yes, Your Honor, the decision letter.

[00:12:16] Speaker 01:
The proposal to reduce was at page 40 of the appendix.

[00:12:23] Speaker 01:
Page 40.

[00:12:29] Speaker 02:
Yes.

[00:12:30] Speaker 02:
And then that's all TDIU.

[00:12:34] Speaker 02:
And that's a request.

[00:12:35] Speaker 02:
And they say we're going to send a questionnaire, right?

[00:12:40] Speaker 01:
Yes, Your Honor.

[00:12:41] Speaker 01:
And then on page 42 of the appendix, the response to his questionnaire saying that they have reconsidered the proposal and have decided not to make the proposed change.

[00:12:52] Speaker 02:
However.

[00:12:53] Speaker 02:
Because he responded saying that he was still unemployed.

[00:12:58] Speaker 02:
And therefore, he was entitled to continue receiving TEIU.

[00:13:04] Speaker 01:
Yes, Your Honor.

[00:13:06] Speaker 04:
Counsel, this is Judge Stoll.

[00:13:08] Speaker 04:
I have a quick question for you.

[00:13:09] Speaker 04:
My understanding is that the certification of no employment sought here was not required for the establishment of the special monthly compensation.

[00:13:24] Speaker 04:
My understanding is correct, right?

[00:13:27] Speaker 01:
That is correct, Your Honor.

[00:13:29] Speaker 01:
Thank you.

[00:13:38] Speaker 01:
Your Honor, I am out of time, so I will try to... I will continue my argument in my rebuttal time.

[00:13:48] Speaker 03:
All right, let's hear from the other side, please.

[00:13:51] Speaker 03:
Ms.

[00:13:51] Speaker 03:
Zakers.

[00:13:53] Speaker 00:
Thank you, Your Honor, and may it please the court

[00:13:56] Speaker 00:
First, Mr. Percival's argument on appeal that the Veterans Court's alleged misinterpretation of 5904 and 7105 are waived and therefore the court need not consider them.

[00:14:08] Speaker 00:
Here today on an argument, counsel admitted that these issues are raised for the first time on appeal.

[00:14:15] Speaker 00:
And as Your Honor noted, it's a well-established general rule that arguments raised on appeal that were not previously argued below are not considered.

[00:14:23] Speaker 00:
and counsel has provided no reason that the court should not apply that well-established rule here.

[00:14:29] Speaker 00:
Even if the court were to consider the 5904 and 7105 arguments, the plain language of these statutes resolve this argument.

[00:14:39] Speaker 00:
We all agree that a notice of disagreement is a prerequisite to attorney's fees.

[00:14:44] Speaker 00:
And to Judge Raina's question, what is actually required in that notice of disagreement

[00:14:50] Speaker 00:
We should start with 7105, which says that appellate review is initiated by a notice of disagreement and it must be submitted in a form prescribed by the secretary.

[00:15:02] Speaker 00:
So if we look to 38 CFR 20.201, the secretary provides that a notice of disagreement is a written statement that expresses disagreement or dissatisfaction with an adjudicated determination.

[00:15:18] Speaker 00:
And it must be reasonably read to express disagreement with that determination.

[00:15:25] Speaker 00:
And that's consistent with 5904, which provides that a notice of disagreement must be filed with respect to the case.

[00:15:34] Speaker 00:
So here, Mr. Percival filed this notice of disagreement.

[00:15:38] Speaker 00:
It concerned SMC.

[00:15:40] Speaker 00:
And it was in response to the April 2014 rating decision for TDIU.

[00:15:45] Speaker 00:
But there was nothing in the April 2014 determination for which Mr. Percival could have disagreed with.

[00:15:53] Speaker 00:
And so the document, although it was titled a notice of disagreement, was actually not a notice of disagreement as provided in 20.201.

[00:16:01] Speaker 00:
And therefore, even if the court were to consider this argument that was waived

[00:16:06] Speaker 00:
There was no notice of disagreement filed that triggered eligibility for fees.

[00:16:12] Speaker 03:
Would it be sufficient for the NOD to just refer back to the decision of the agency of such-and-such date?

[00:16:27] Speaker 00:
I think no, Your Honor, under 20.201 because it requires

[00:16:33] Speaker 00:
and express a written dissatisfaction or disagreement with an adjudicative determination, a desire to contest the result.

[00:16:43] Speaker 00:
Perhaps, Your Honor, if it could be reasonably construed as a disagreement, if it were facially obvious, then perhaps the VA could make that determination.

[00:16:53] Speaker 00:
But 38 CFR 20.201 prescribes these three steps.

[00:16:58] Speaker 00:
And so the veteran has to follow those.

[00:17:05] Speaker 00:
To Mr. Percival's second argument under Section 3.652, the Veterans Court correctly found that VA was not required to adjudicate all of the veteran's benefits during this reduction proceeding.

[00:17:20] Speaker 00:
The reduction proceeding is limited to the veteran recertifying eligibility for benefits, and then the VA makes any necessary adjustments based on that certification.

[00:17:31] Speaker 00:
And to your honor,

[00:17:32] Speaker 00:
There's nothing in that certification that relates to the SMC award or eligibility at all.

[00:17:42] Speaker 00:
And there's no textual basis in Section 3.562 that the VA must reexamine all of the benefits in a reduction proceeding.

[00:17:51] Speaker 00:
It's not a regulation about the general adjudication of benefits.

[00:17:55] Speaker 00:
And as Judge Clevenger noted, the central issue here is whether the April TDIU determination involved SMC.

[00:18:03] Speaker 00:
It plainly did not.

[00:18:05] Speaker 00:
For those reasons, Your Honor, unless Your Honor has any further questions.

[00:18:09] Speaker 02:
Sure.

[00:18:10] Speaker 02:
Yes, Ms.

[00:18:10] Speaker 02:
Akers.

[00:18:11] Speaker 02:
Well, you have to come to grips with the clear statement by the CABC that if the RO had been obligated to consider SMC,

[00:18:24] Speaker 02:
The April 30 letter would have been a sufficient nod.

[00:18:30] Speaker 02:
I agree, Your Honor.

[00:18:33] Speaker 02:
You understand.

[00:18:34] Speaker 02:
You agree with me, don't you, that the CABC made that point?

[00:18:40] Speaker 00:
That's correct, Your Honor.

[00:18:42] Speaker 00:
OK.

[00:18:43] Speaker 02:
So let me finish before you carry on.

[00:18:47] Speaker 02:
Why wasn't the board obligated to consider SNC?

[00:18:57] Speaker 00:
First, the certification that was requested of the veteran was in the context of a reduction proceeding.

[00:19:07] Speaker 00:
And on pages 18 to 19 of our brief, we explained the difference between a reduction proceeding and a claims proceeding.

[00:19:16] Speaker 00:
A reduction proceeding is not a general adjudication of benefit.

[00:19:22] Speaker 00:
It's for a particular purpose on a particular benefit.

[00:19:27] Speaker 00:
The benefit was already being experienced by the veteran.

[00:19:31] Speaker 00:
He nearly had to provide information regarding his employment to recertify the eligibility.

[00:19:37] Speaker 02:
Right.

[00:19:38] Speaker 02:
I appreciate that point, but is true is it not that the RO would have been obligated to look at DEA in connection with a TDIU extension?

[00:19:52] Speaker 02:
That's correct, Your Honor.

[00:19:54] Speaker 02:
That's been... Wait, wait, wait.

[00:19:56] Speaker 02:
I'm not finished.

[00:19:57] Speaker 02:
They don't go quite so fast.

[00:19:59] Speaker 02:
So if the RO was obligated to look at DEA, why wasn't it obligated to look at SMC?

[00:20:07] Speaker 02:
That has nothing to do... That has nothing to do whether it's a renewal or an extension.

[00:20:14] Speaker 00:
Understood, Your Honor.

[00:20:16] Speaker 00:
DEA is derivative from the TDIU, and the court noted that, and I believe it was footnote one.

[00:20:22] Speaker 00:
SMC is not derivative or related to the TDIU certification at all.

[00:20:29] Speaker 00:
If this were a situation where SMC had the same elements or... What about SMC for housing?

[00:20:38] Speaker 02:
What about statute 1114S?

[00:20:45] Speaker 02:
Doesn't 31 U.S.C.

[00:20:46] Speaker 02:
114S say that SMC for housing is derivative from TDIU?

[00:20:58] Speaker 00:
I will pull up that statute right now, Your Honor, but I believe that the point here is that there's nothing in a TDIU proceeding

[00:21:09] Speaker 00:
reduction proceeding, not even just an adjudicatory proceeding.

[00:21:13] Speaker 00:
There's nothing in this reduction proceeding that is derivative of or relates to SMC at all.

[00:21:21] Speaker 00:
And Appel hasn't made an argument on appeal that there was some necessary component of TDIU that implicated SMC.

[00:21:31] Speaker 02:
The only argument... I'm basically exploring this with you primarily for my own benefit to understand the case because

[00:21:39] Speaker 02:
Your opposing counsel doesn't get into this discussion about the obligation to have looked at SMC at all.

[00:21:46] Speaker 02:
So I don't view it as central to the decision of the case.

[00:21:50] Speaker 02:
I'm just curious because I do my homework and try to figure out why the SMC, why the board, pardon me, the CABC felt that there was no obligation to look at SMC.

[00:22:08] Speaker 00:
Right.

[00:22:09] Speaker 00:
And, Your Honor, I would point you to perhaps Appendix 15 and our brief on pages 25 and 26 that talks about when the VA is required to look at SMC.

[00:22:24] Speaker 00:
It's true that SMC benefits are inferred, but that doesn't mean that the VA must consider SMC whenever it makes any determination.

[00:22:34] Speaker 02:
And so in this TDIU reduction proceeding... Most SMC doesn't have any relation to TDIU at all.

[00:22:42] Speaker 02:
I mean, you get SMC if you've lost both arms, both legs, your eyes.

[00:22:47] Speaker 02:
That relates to and derives from readings for other disabilities, not TDIU.

[00:22:57] Speaker 02:
Right.

[00:22:58] Speaker 02:
The only SMC benefit that I think and think of that is tied in any way to TDIU is in 114S, which is housing.

[00:23:10] Speaker 02:
I don't want to take away the rest of your time from argument, so.

[00:23:17] Speaker 00:
I'm sorry.

[00:23:18] Speaker 00:
I just know, okay, there's no basis in law that the VA has an affirmative obligation to assess eligibility for SMC

[00:23:28] Speaker 00:
whenever a claimant submits a certification form in the VA-initiated rating reduction proceeding or in every proceeding.

[00:23:35] Speaker 00:
So our position here is that the court need not consider that because one, appellant didn't raise it, and two, there's no authority that we've identified.

[00:23:48] Speaker 00:
If your honors have no further questions, we respectfully request that the court affirm the Veterans Court's decision.

[00:23:54] Speaker 00:
Thank you.

[00:23:56] Speaker 03:
Thank you.

[00:23:59] Speaker 03:
Okay, Mr. DeHarkes.

[00:24:02] Speaker 01:
Thank you, Your Honor.

[00:24:05] Speaker 01:
I want to start first by talking briefly about why the court does have jurisdiction.

[00:24:11] Speaker 01:
As we mentioned in our reply brief, Forshee says that 7292A does not require that the issue have been raised or contested, only that the decision depended on a particular statute or regulation.

[00:24:27] Speaker 01:
And I would also like to point out, as we did in our reply brief, that the Veterans Court did have an opportunity to address this argument in our motion to reconsider, but chose not to.

[00:24:38] Speaker 01:
And I don't believe that that would be an appropriate reason for not deciding the issue here today.

[00:24:50] Speaker 01:
Central to this decision, relating back to the questioning just before the Secretary ended,

[00:24:57] Speaker 01:
is whether special monthly compensation is required in every decision.

[00:25:03] Speaker 01:
The secretary is trying to differentiate between this and any other decision issued by the secretary, but SMC, special monthly compensation, is the exact same issue as entitlement to TDIU.

[00:25:16] Speaker 01:
We did not go into it in the briefs here because the focus of it was explaining in our briefs

[00:25:23] Speaker 01:
why the law requires the VA to review the entire record.

[00:25:27] Speaker 01:
Did you make this argument below?

[00:25:30] Speaker 01:
Not to the Veterans Court, Your Honor.

[00:25:32] Speaker 01:
Well, obliquely, we did in arguing that 3.652B required the VA to consider special monthly compensation.

[00:25:41] Speaker 01:
And the basis for that is, and you asked about 38 USC 1114, if you look at the entire structure,

[00:25:51] Speaker 01:
I hear that my time's up.

[00:25:53] Speaker 03:
Go ahead and conclude, sir.

[00:25:55] Speaker 01:
Okay.

[00:25:55] Speaker 01:
So the entire structure of 1114 is to determine the correct amount of compensation to be paid.

[00:26:02] Speaker 01:
It starts at a 10% rating up to 100%, whether it's TDIU or otherwise.

[00:26:07] Speaker 01:
And then beyond J, you have K, L, M, N, O, P, R, S, and T. So all of them are actually just the ratings that Congress has directed.

[00:26:17] Speaker 01:
When you meet the qualifications, VA will pay

[00:26:20] Speaker 01:
the specified amount of money.

[00:26:22] Speaker 01:
And it makes no difference whether the veteran who, by the way, had suffered a service-connected stroke, which served as the basis for his special monthly, and was also required a fiduciary because of his dementia, and I'll refer you to the joint appendix at page 24 to 33, whether somebody in that state raised the issue or not does not alleviate the VA's obligation or 5107 and 3.103A.

[00:26:48] Speaker 01:
All right.

[00:26:48] Speaker 01:
I believe we have your argument.

[00:26:50] Speaker 03:
Thank you very much.

[00:26:51] Speaker 03:
This case is now submitted.