[00:00:00] Speaker 02: Our second case this morning is number 23, 1749, Smith v. Hunter. [00:00:06] Speaker 02: Okay, Mr. Carpenter. [00:00:08] Speaker 00: May it please the court, Kenneth Carpenter appearing on behalf of Mr. Josiah Smith. [00:00:13] Speaker 00: Mr. Smith is a substituted appellant [00:00:16] Speaker 00: under the provisions of 38 USC 5121A and was substituted by the agency in a pending board appeal that was dismissed following the death of his father. [00:00:35] Speaker 00: Issue that this case presents is a legal question of whether or not there is a legal difference, a substantive legal difference, between the regulatory requirements of 38 CFR 3.156C and the reopening requirements of 3.156A. [00:00:54] Speaker 02: But there's a predicate question as to whether it's moot. [00:00:57] Speaker 02: Maybe you should address that. [00:00:59] Speaker 00: I was about to say, before we get into the substantive matters, I will address both the mootness and the harmlessness arguments of the government. [00:01:11] Speaker 00: below argued in a case called Frazier versus McDonough. [00:01:17] Speaker 00: After the briefing was done, that case was completed, and the secretary persuaded the lower court that the expenses of a person as a substitute appellant, such as Mr. Joshua Smith in this case, who paid the last expenses of his father, [00:01:36] Speaker 00: was an accrued benefit beneficiary under 5121A6 was not entitled to be paid the full amount of a award under 5121A. [00:01:50] Speaker 00: The secretary has now appealed that decision, but on different grounds. [00:01:55] Speaker 00: Ms. [00:01:55] Speaker 00: Frazier [00:01:56] Speaker 00: a similar substituted appellant to Mr. Smith in this case has cross appealed and that matter is currently pending before this court and therefore the issue of mootness is simply not possible until there is a resolution of that legal question either by the panel that's been assigned or if this panel wishes to address the issue. [00:02:18] Speaker 02: Okay so but why doesn't 5121A which is the substitution provision [00:02:24] Speaker 02: that was in play here require that you be eligible under 5121 parensae? [00:02:34] Speaker 00: That's not the issue, Your Honor. [00:02:36] Speaker 00: The issue is whether or not, having been substituted, [00:02:42] Speaker 00: VA itself substituted Joshua Smith in the case in order to complete the appeal that was pending at the time of his father's death, and that was dismissed. [00:02:55] Speaker 02: I don't understand what you're saying. [00:02:56] Speaker 02: 5121 specifically refers over to eligibility under 5121. [00:03:03] Speaker 00: It does, Your Honor, but that's all it says, that that is an eligibility requirement. [00:03:08] Speaker 00: And there are something like six different eligibility requirements, the last of which is that a individual bore the expenses of the veteran, and that those expenses can be reimbursed under 5121 small a as an accrued benefit. [00:03:28] Speaker 02: That is a separate- I don't understand. [00:03:30] Speaker 02: There's no question that the funeral expenses, which is the only thing your client is now entitled to, [00:03:38] Speaker 02: are far less than the amount that has already been recovered, right? [00:03:44] Speaker 00: And that's the issue in phrase URRA. [00:03:46] Speaker 02: It's also the issue here. [00:03:49] Speaker 00: It is URRA. [00:03:51] Speaker 00: And therefore, if this panel wishes to reach that question, I believe that this panel needs to have supplemental briefing on that [00:03:58] Speaker 00: issue because this matter was not briefed other than the veteran, excuse me, the secretary making that assertion in his brief on a case that had yet to be decided. [00:04:10] Speaker 00: And so there was not a dispositive legal determination. [00:04:13] Speaker 02: What's the answer to the secretary's contention? [00:04:17] Speaker 02: What's the legal answer to the secretary's contention that this is moot because the amount that your client can recover is less than has already been allocated to them? [00:04:28] Speaker 00: Because the proceeding that was before the Veterans Court that was disposed of by the decision on appeal was a decision on a pending appeal. [00:04:36] Speaker 00: And that pending appeal has not been fully resolved. [00:04:40] Speaker 00: It was partially resolved by the board and resulted in an earlier effective date being assigned [00:04:46] Speaker 00: which the VA then treated incorrectly as accrued benefits. [00:04:51] Speaker 00: Those are not accrued benefits. [00:04:53] Speaker 02: Mr. Kermit, I'm baffled. [00:04:55] Speaker 02: I don't understand what you're saying. [00:04:56] Speaker 02: I'm sorry. [00:04:57] Speaker 02: I just don't understand. [00:04:58] Speaker 02: Why is it that your client can recover more than the funeral expenses? [00:05:05] Speaker 00: Because the secretary interpreted 5121A's language at 38 CFR 3.1010A [00:05:14] Speaker 00: and said any benefits ultimately awarded or payable to a substitute shall be paid to the substitute. [00:05:21] Speaker 00: It doesn't have any qualifying language relative to A6. [00:05:26] Speaker 00: That is because the secretary correctly interpreted 5121A as a separate cause of action, which is to complete a pending claim or appeal before the agency when the veteran dies during the pendency of that claim. [00:05:43] Speaker 00: or appeal. [00:05:45] Speaker 00: That is a separate cause of action from the pre-existing statutory cause of action for an accrued benefit under 5121A. [00:05:53] Speaker 00: And that statute has a limitation on the recovery for the A6 category, and those individuals are limited to the amount of expenses. [00:06:06] Speaker 02: Which happens to include your client. [00:06:09] Speaker 00: But includes my client as an already substituted [00:06:13] Speaker 00: claimant. [00:06:14] Speaker 00: He has been recognized by the VA. [00:06:16] Speaker 00: This is not a case of whether they should or should not be recognized. [00:06:20] Speaker 00: The VA recognized Joshua Smith as the substituted appellant. [00:06:26] Speaker 00: The board made an unfavorable decision. [00:06:29] Speaker 00: He appealed that decision. [00:06:30] Speaker 00: He got a decision. [00:06:32] Speaker 00: That decision was adverse to Joshua Smith as the substituted appellant because he was entitled to get a full recovery of all of those benefits, which was not decided by the Veterans Court because they determined that [00:06:52] Speaker 00: based upon a misinterpretation of 3.156C that the board could merely allude to or reassess, in the words of the Veterans Court at Appendix A in their decision, [00:07:06] Speaker 00: regardless of whether they made a specific finding. [00:07:09] Speaker 00: But a specific finding is required by the plain language of 3.1561. [00:07:13] Speaker 00: 3.1561 is a threshold regulation that has three parts to it. [00:07:23] Speaker 00: In part one, the secretary must decide whether the service department records are relevant. [00:07:32] Speaker 00: If they are relevant, then and only then is reconsideration undertaken. [00:07:39] Speaker 00: That C1 step was never made by the secretary. [00:07:43] Speaker 01: That's the legal argument to bring it up. [00:07:45] Speaker 00: That's correct. [00:07:46] Speaker 01: Give back to Moodness, because I don't think you resolved that. [00:07:50] Speaker 01: Are you saying that the case Frazier-McConnor, that that helps you? [00:07:54] Speaker 00: as written by the Veterans Court, no. [00:07:57] Speaker 00: But it is pending before a panel of this court. [00:08:00] Speaker 01: In that case, the Veterans Court interprets 5121A6 to say that when the crude benefits recipients, that's your client, [00:08:14] Speaker 01: They're limited to reimbursement for the last expenses of sickness and burial and nothing more. [00:08:21] Speaker 00: And, Your Honor, respectfully, that is not correct. [00:08:26] Speaker 00: That is not what the statute says. [00:08:28] Speaker 00: That statute says that for an accrued benefit claim. [00:08:31] Speaker 01: That's what the Veterans Court has ruled, correct? [00:08:33] Speaker 01: The Veterans Court has ruled that. [00:08:36] Speaker 00: Yes, but they were interpreting the accrued benefit statute, not the substitution statute. [00:08:43] Speaker 00: Under the correct interpretation of the substitution statute, as the secretary has correctly interpreted at 3.1010A. [00:08:51] Speaker 01: Does this not address the extent of benefits that your client is entitled to? [00:08:57] Speaker 01: It limits them. [00:08:58] Speaker 01: It's not saying your client's not entitled to benefits. [00:09:02] Speaker 00: Respect. [00:09:03] Speaker 01: It is entitled to benefits, but it's limited. [00:09:06] Speaker 00: And that is true only for accrued benefit claimants. [00:09:11] Speaker 00: He is not an accrued benefit claimant. [00:09:13] Speaker 00: He is a substituted claimant. [00:09:15] Speaker 00: And the VA has refused to recognize that Congress created a new category of claimants. [00:09:22] Speaker 00: Those claimants are the survivors who are able to be substituted under the statute that Congress wrote for a separate cause of action. [00:09:34] Speaker 00: And that separate cause of action [00:09:36] Speaker 00: contains no limitation. [00:09:38] Speaker 02: That is the issue in Frasier. [00:09:51] Speaker 02: that the benefits allowed are to be governed by the other statute, 5121. [00:09:55] Speaker 00: Respectfully, Your Honor, it does not say that. [00:09:57] Speaker 00: What 5121A says is in order to qualify as a substitute, you must be eligible under 5121A. [00:10:08] Speaker 00: He was eligible. [00:10:10] Speaker 00: They found him eligible. [00:10:11] Speaker 00: But then they adjudicated, following the board decision on appeal, a determination that he was entitled to accrued benefits. [00:10:20] Speaker 00: He's not an accrued benefit claimant. [00:10:24] Speaker 00: His claim is on behalf of his deceased father [00:10:27] Speaker 00: under a statutory provision that Congress added to modify and extend the ability of qualified accrued benefit claimants to proceed to complete a pending appeal. [00:10:42] Speaker 00: I see that I'm into my rebuttal time. [00:10:44] Speaker 00: I'd like to reserve a message for the questions from the panel. [00:10:47] Speaker 02: OK. [00:10:50] Speaker 02: Mr. Pierce? [00:10:56] Speaker 03: Thank you, Your Honors, and may it please the Court. [00:11:24] Speaker 03: This Court should dismiss this appeal because it is moot. [00:11:27] Speaker 03: Alternatively, this Court should affirm the Veterans Court's decision. [00:11:32] Speaker 03: With respect to the mootness conversation that we just had, Your Honors, I think it's important to remember the context of the relationship between Section 5121, Capital A, and Section 5121, Lower Case A. Congress, as a general rule, when a veteran dies, the veteran's claim for benefits also terminates. [00:11:50] Speaker 03: Section 5121, lowercase a, is an exception to that general rule for accrued benefits claimants. [00:11:58] Speaker 03: Then, in 2008, Congress enacted a law that adopted Section 5121, capital A, to allow for substitution of one of the individuals who's eligible under Section 5121, lowercase a, within the six subsections listed below that, in order for claim processing. [00:12:17] Speaker 01: Section 5121, [00:12:25] Speaker 01: Plaintiffs? [00:12:27] Speaker 03: Section 5121, capital A, yes, permits the substitution of plaintiffs. [00:12:32] Speaker 03: But if you look at this court's, the language of the statute, this court's precedent, and the legislative history, they all indicate that the purpose of section 5121, capital A, was for claims processing so that people who were accrued benefits claimants under section 5121, lower case A, would not have to start at the back of the line when processing, or making, and then having claims processed [00:12:55] Speaker 03: Instead, they could stand in for the veteran who had a case that had been developed and then be allowed to proceed from there. [00:13:03] Speaker 03: This court has decided in multiple cases that that was the purpose of Section 5121A. [00:13:09] Speaker 03: For example, in Cruz, the court said, but in 2008, to remedy the inefficiencies and delays from restarting the process, Congress enacted Section 5121A to allow there a surviving spouse to be substituted as a claimant. [00:13:24] Speaker 03: In Rusek v. Gibson, this court also said Section 5121A was meant to address the problem of survivors who were not allowed to substitute on a veteran's pending claim and were thereby forced to restart the claim at the back of the line. [00:13:36] Speaker 03: This case is also set to the House report at issue, which also, again, just discussed the timing. [00:13:40] Speaker 03: Section 5121A was not intended to be a drastic extension of rights. [00:13:45] Speaker 03: And we were discussing earlier. [00:13:47] Speaker 02: I don't understand why you have to talk in generalities. [00:13:50] Speaker 02: The specific language of 5121 capital A says that you refer to 5121 lowercase to determine the extent of the benefits to which they can claim. [00:14:04] Speaker 03: Agreed, Your Honor. [00:14:05] Speaker 03: And as the Veterans Court in Frayser, where there has been a notice of appeal but briefing has not yet occurred, the Veterans Court in that case specifically said that to adopt, they were speaking with respect to Ms. [00:14:20] Speaker 03: Frayser, but here Mr. Smith, which is a similar reasoning, to adopt that reasoning would allow a pay for profit scheme whereby an individual would be able to just spend a minimal amount of money assisting with perhaps less funeral expenses [00:14:34] Speaker 03: And then, according to Mr. Smith's reasoning, be entitled to proceed and get the benefits to the entirety of a veteran's potential claim. [00:14:41] Speaker 03: There's no support for that within the court's history regarding Section 5121A. [00:14:48] Speaker 03: And as Your Honor just mentioned, Section 5121A refers back to Section 5121A. [00:14:52] Speaker 02: We're supposed to look at the language. [00:14:55] Speaker 02: You look at the language. [00:14:56] Speaker 02: The language is clear, isn't it? [00:14:58] Speaker 03: Yes, your honor. [00:14:59] Speaker 03: And in fact, right at the end of section 5121, capital A, subsection A1, that says, to file a request to be substituted as a claimant for the purposes of processing the claim to completion. [00:15:11] Speaker 03: And then section B limits it to those who are eligible under the section in accordance with 5121 of this title. [00:15:18] Speaker 03: It's referring, it's simply a substitution provision, and refers back to section 5121, lower case A. And notably, [00:15:27] Speaker 03: Congress did not repeal Section 5121, lower case A, either. [00:15:32] Speaker 03: There are not two independent provisions which would entitle an individual to seek benefits. [00:15:40] Speaker 03: There's been the language, the legislative history, the House report, and this court's precedent. [00:15:46] Speaker 03: I'll make that point clear. [00:15:49] Speaker 03: Now, Mr. Smith did not address the merits of his claim. [00:15:55] Speaker 03: The government is content to rely on its briefing with respect to that as well, unless Your Honors has any further questions. [00:16:02] Speaker 02: OK. [00:16:03] Speaker 02: OK. [00:16:04] Speaker 02: Thank you, Mr. Pierce. [00:16:06] Speaker 02: Thanks. [00:16:06] Speaker 02: Mr. Carpenter, you've got a little over four minutes left. [00:16:18] Speaker 00: And I believe that the government has mischaracterized the difference between the two causes of action that Congress created. [00:16:25] Speaker 00: The first cause of action is what this court has called a derivative claim, so that a qualifying accrued benefit beneficiary under 5121A is able to start a new action based upon the monies that were due and owing at death. [00:16:47] Speaker 00: under substitution for the first time in the history of VA law, there is a statutory provision to substitute [00:16:59] Speaker 00: into an appeal or claim that was pending a time of death. [00:17:04] Speaker 00: That creates a new and separate cause of action based upon those who are eligible under 5121 small a. There is no reference by Congress to subsection a six. [00:17:20] Speaker 00: Congress, if they had intended to limit substitution recovery for a six, [00:17:28] Speaker 00: eligible accrued benefit beneficiaries, then Congress would have said that. [00:17:34] Speaker 00: They have demonstrated the ability to impose a limitation on the pre-existing statute at 5121A6. [00:17:41] Speaker 00: I would point out to this court further that the appeal in this case was for the denial of entitlement to both special monthly compensation, which is separate from [00:17:58] Speaker 00: accrued benefit case as well as the effective date of the grant of PTSD. [00:18:17] Speaker 01: a petitioner who were to accept it. [00:18:20] Speaker 01: That doesn't change the amount that he can recover, right? [00:18:23] Speaker 00: Yes, it does, Your Honor, because a substituted claimant under the Secretary's own regulation is entitled to receive any benefits. [00:18:34] Speaker 00: There is no qualification on the Secretary's interpretation of 5121A in his regulatory interpretation [00:18:49] Speaker 00: 3.1010. [00:18:51] Speaker 00: And 3.1010 specifically addresses the amount of recovery to be paid. [00:18:57] Speaker 00: And it says, any benefits. [00:18:59] Speaker 00: There is no qualification in that language. [00:19:03] Speaker 00: Now, I recognize that this is a fundamental shift in the way in which the VA has operated for decades. [00:19:13] Speaker 00: But the fact is that this case is dependent, as is the Frazier case, on the proper interpretation of 5121. [00:19:21] Speaker 00: And I believe that it would be unfair to Mr. Smith for this court to make a determination on an issue that is currently pending in front of another panel. [00:19:32] Speaker 00: I would also like to point out in the time I have remaining that in Frazier, the appeal made by the government is because the Veterans Court in Frazier [00:19:42] Speaker 00: decided that the board was incorrect, that substituted claimants could recover for non-periodic monetary benefits. [00:19:55] Speaker 00: And that was specifically automobile and housing benefits as a special monthly compensation benefit. [00:20:04] Speaker 00: That is the appeal that is being taken by the government in Frasier. [00:20:08] Speaker 00: The appeal being taken by Ms. [00:20:10] Speaker 00: Frasier in the cross-appeal is the adverse decision, which we believe quite candidly was dicta, that that is the way to interpret the statute. [00:20:20] Speaker 00: That issue was not before the panel. [00:20:23] Speaker 00: It was not briefed by the parties. [00:20:25] Speaker 01: And yet the... You say this is a major shift in VA law. [00:20:30] Speaker 00: It is most certain. [00:20:31] Speaker 00: It is a seismic shipyard. [00:20:32] Speaker 01: What exactly caused the ship? [00:20:34] Speaker 01: What is it? [00:20:35] Speaker 01: The cases pending before this court now? [00:20:38] Speaker 00: Well, cases pending before this court, but the cases that were previously decided by this court in a whole series of cases in which this court said that the right to proceed after death was covered by 5121 small a. [00:20:55] Speaker 00: And that is now the law. [00:20:58] Speaker 02: If it's covered by 5121 small a, that has limits about how much you can recover. [00:21:06] Speaker 02: How do you get around those limits? [00:21:08] Speaker 02: When specifically, 5121 large a refers you over to the other statute. [00:21:15] Speaker 00: But it only does so for the a portion for eligibility purposes. [00:21:23] Speaker 00: That's exactly what happened here. [00:21:25] Speaker 00: That's exactly what happened in Frazier, is that these persons were substituted to complete an appeal. [00:21:32] Speaker 00: Mr. Smith is now being denied the opportunity to complete an appeal on the basis that this case is now moot. [00:21:39] Speaker 00: And that simply cannot be true based upon the intent of Congress in creating that statute. [00:21:44] Speaker 00: I thank you very much. [00:21:45] Speaker 00: OK. [00:21:46] Speaker 00: Thank you, Mr. Carpenter. [00:21:47] Speaker 00: Thank both counsel. [00:21:47] Speaker 00: The case is submitted.