United States Court of Appeals 

for the Federal Circuit ______________________ 

 NATIONAL ORGANIZATION OF VETERANS 

ADVOCATES, INC.,

Petitioner,

v.

SECRETARY OF VETERANS AFFAIRS,

Respondent.

______________________ 

2011-7191

______________________ 

On petition for review pursuant to 38 U.S.C. Section 

502.

______________________ 

 ROMAN MARTINEZ, Latham & Watkins, LLP, of Washington, DC, argued for petitioner. 

 JOHN J. TODOR, Trial Attorney, Commercial Litigation 

Branch, Civil Division, United States Department of 

Justice, of Washington, DC, argued for respondent. With 

him on the brief were STUART F. DELERY, Acting Assistant 

Attorney General, JEANNE E. DAVIDSON, Director, and 

TODD M. HUGHES, Deputy Director. Of counsel on the 

brief were MICHAEL J. TIMINSKI, Deputy Assistant General Counsel, and JONATHAN TAYLOR, Attorney, United 

States Department of Veterans Affairs, of Washington, 

DC, 
2 NATIONAL ORG OF VET ADV v. SHINSEKI

Before O’MALLEY, PLAGER, AND REYNA, Circuit Judges. 

PLAGER, Circuit Judge. 

______________________ 

O R D E R

______________________ 

The National Organization of Veterans’ Advocates, 

Inc. (NOVA) petitioned us to review a rule promulgated 

by the Department of Veterans Affairs (VA). The rule 

eliminated certain procedural and appellate rights for 

veterans appearing before the agency’s Board of Veterans’ 

Appeals (Board). During the briefing process before this 

court, it became clear to all parties involved that the 

promulgated rule was invalid. In spite of this—and 

contrary to express promises from VA to NOVA and this 

court—the Board in subsequent decisions was allowed to 

continue to follow the invalid rule.

Because we find the Government’s conduct in this 

case to be potentially sanctionable, this is an Order for 

the Government to show cause why sanctions should not 

be imposed on the responsible officials. So there will be 

no misunderstanding, we explain in detail the conduct we 

consider sanctionable. We also identify the harms we 

consider to have resulted from the Government’s conduct, 

and suggest ways these harms could be alleviated; the 

Government’s showing in response to this Order will bear 

on whether sanctions are imposed, and the nature and 

extent of any such sanctions.

BACKGROUND

The Department of Veterans Affairs administers the 

laws providing benefits and other services to veterans. 

See 38 U.S.C. § 301 (2006); see also Henderson v. Shinseki, 

131 S. Ct. 1197, 1200 (2011). A veteran seeking benefits 
 NATIONAL ORG OF VET ADV v. SHINSEKI 3

may submit a claim to a VA regional office, which processes the claim and decides whether to grant benefits to 

the veteran. If the veteran disagrees with the regional 

office’s decision, the veteran may request that the Board 

of Veterans’ Appeals review the regional office’s determination. See 38 U.S.C. § 7104.

The veterans’ benefits system has been calibrated 

with uniquely pro-claimant principles. Hodge v. West, 155 

F.3d 1356, 1362 (Fed. Cir. 1998) (“This court and the 

Supreme Court both have long recognized that the character of the veterans’ benefits statutes is strongly and 

uniquely pro-claimant.”). Consistent with these proclaimant principles, and pursuant to statute, the VA 

regulations in 38 C.F.R. § 3.103 provide for certain procedural due process and appellate rights for veterans involved in VA adjudications. 

These procedural and appellate rights require VA officials to “explain fully the issues and suggest the submission of evidence which the claimant may have overlooked 

and which would be of advantage to the claimant’s position.” § 3.103(c)(2). They also require the VA “to assist a 

claimant in developing the facts pertinent to [his or her] 

claim” and “to render a decision which grants every 

benefit that can be supported in law while protecting the 

interests of the Government.” § 3.103(a). Importantly, 

the VA has consistently applied the § 3.103 rights both to 

hearings conducted at the regional offices level and in 

appellate hearings conducted before the Board of Veterans’ Appeals. See, e.g., Douglas v. Derwinski, 2 Vet. App. 

435, 440–42 (1992), aff’g on this ground Douglas v. Derwinski, 2 Vet. App. 103, 110 (1992); Costantino v. West, 12 

Vet. App. 517, 520 (1999).

On August 23, 2011, VA issued an immediatelyeffective new rule (the “2011 Rule”) that eliminated some 

of the rights previously provided under § 3.103. See Rules 

Governing Hearings Before the Agency of Original Juris-
4 NATIONAL ORG OF VET ADV v. SHINSEKI

diction and the Board of Veterans’ Appeals, Clarification, 

76 Fed. Reg. 52,572-01 (Aug. 23, 2011). The 2011 Rule 

limited the provisions governing hearings under § 3.103 

so that they applied “only to hearings conducted before 

the VA office having original jurisdiction over the claim.” 

Id. at 52,574 (emphasis added). In other words, veterans 

would no longer have the previously available procedural 

due process and appellate rights during board appeals. 

Despite this significant departure from the pro-claimant 

procedures espoused by § 3.103, VA stated that the 

change “merely clarifie[d] current procedures” and therefore was excepted from the notice-and-comment and 

delayed effective date requirements of the Administrative

Procedure Act, 5 U.S.C. § 500 et seq. (APA). Id. at 52,573.

On September 9, 2011, NOVA petitioned us to review 

the 2011 Rule, arguing that VA promulgated the 2011 

Rule without following the mandatory notice-andcomment requirements of the APA set forth in 5 U.S.C. § 

553. NOVA subsequently argued that VA’s written 

explanation for the 2011 Rule also contained significant 

errors of fact and logic, rendering it arbitrary and capricious under 5 U.S.C. § 706(2)(A). 

While NOVA initially petitioned us to review the validity of the 2011 Rule, VA’s conduct during the briefing 

process before this court quickly generated another dispute. NOVA submitted its opening brief to us on December 22, 2011. Several days before VA’s responsive brief 

was due, VA petitioned for a first enlargement of time to 

file its brief due to “other important matters.” Resp’t’s 

Mot. at 2, January 27, 2012. We granted VA’s petition, 

stating that no further extensions should be expected.

On March 5, 2012, VA petitioned for a second enlargement of time. VA stated in its petition that it 

planned to publish a repeal of the 2011 Rule in the Federal Register. In discussions with VA regarding the petition, NOVA had indicated that it would not oppose VA’s 
 NATIONAL ORG OF VET ADV v. SHINSEKI 5

petition, but only if VA promised not to apply the invalid 

2011 Rule moving forward. VA agreed. VA represented 

to both NOVA and to this court that “the Department of 

Veterans Affairs (including the Board of Veterans’ Appeals) will not apply the provisions of the August 23, 2011 

amendment between now and when the repeal of that 

amendment takes effect,” and thus, “the requested extension would not create any prejudice to petitioner.” 

Resp’t’s Second Mot. at 3. In light of these representations, we once again granted VA’s petition, indicating that 

no further extensions should be anticipated. 

Having already received two extensions of time, on 

April 27, 2012, VA petitioned for a third enlargement of 

time. VA stated that it wanted to allow the then published repeal to become effective prior to submitting its 

brief.1 VA’s third petition was prefaced upon and reconfirmed the Government’s commitment not to apply the 

provisions of the 2011 Rule—which VA by that point had 

publicly admitted was a violation of the APA. NOVA 

opposed the extension of time with well-founded concerns 

that any additional delay would result in more cases 

becoming final—making it significantly harder, and 

perhaps impossible, for some veterans harmed by the 

invalid rule to obtain relief. In response, VA stated that it 

was not aware of “any instances” in which the 2011 Rule 

was applied after March 5, 2012, but if NOVA identified 

any cases, the cases would be “investigated and dealt with 

by the VA Office of the General Counsel.” Reply Supp. 

Resp’t’s Third Mot. at 5, May 3, 2012. In light of these 

1 The VA issued a repeal on April 18, 2012, stating 

that the VA “should have followed the notice-andcomment procedure of the Administrative Procedure Act 

(APA).” Rules Governing Hearings Before the Agency of 

Original Jurisdiction and the Board of Veterans’ Appeals; 

Repeal of Prior Rule Change, 77 Fed. Reg. 23,128-01, 

23,128 (April 18, 2012). 

 
6 NATIONAL ORG OF VET ADV v. SHINSEKI

representations, we ignored our twice stated unwillingness to allow further extensions and granted this third 

extension of time.

Despite VA’s repeated commitment not to apply the 

invalid 2011 Rule, NOVA has submitted papers to this 

court indicating that the Board relied upon the 2011 Rule 

in a substantial number of cases after March 5, 2012. 

NOVA provided a list of the cases to VA in hopes that the 

VA would live up to its word to investigate and deal with 

the cases; VA has declined to do so.

Jurisdiction to review this case arose under 38 U.S.C. 

§ 502. We also have jurisdiction to review the Government’s misconduct as a collateral issue, regardless of any 

concession VA now makes regarding the continued vitality of the 2011 Rule. See Cooter & Gell v. Hartmarx Corp., 

496 U.S. 384, 395–96 (1990) (noting that proceedings 

relating to costs, attorneys’ fees, contempt(s), and other 

sanctions are collateral to the original proceeding and 

may be heard even after the original proceeding has been 

terminated).

DISCUSSION

I.

We first address the validity of the 2011 Rule. In its 

brief, NOVA argued that VA promulgated the 2011 Rule 

without following the mandatory notice-and-comment 

requirements set forth in 5 U.S.C. § 553 of the APA. 

NOVA argued that the 2011 Rule was a substantive rule 

and VA’s actions ran afoul of our decision in Military 

Order of Purple Heart of USA v. Sec’y of Veterans Affairs, 

580 F.3d 1293 (Fed. Cir. 2009).

We find NOVA’s arguments regarding VA’s violations 

of the APA compelling, and ultimately, so did the Government. In fact, to its credit the Department of Justice 

refused to defend the procedural validity of the 2011 Rule, 

and VA issued a repeal of the Rule. This court also noted 
 NATIONAL ORG OF VET ADV v. SHINSEKI 7

from the bench at oral argument—and Government 

counsel agreed—that the 2011 Rule was void ab initio. 

After oral argument, VA issued an addendum to its repeal 

of the 2011 Rule confirming that the repeal is retroactive 

and “appl[ies] to decisions issued by the Board on or after 

August 23, 2011,” the date that the Rule at issue was first 

promulgated. Rules Governing Hearings Before the 

Agency of Original Jurisdiction and the Board of Veterans’ Appeals; Repeal of Prior Rule Change, 77 Fed. Reg.

70,686-01, 70,686 (November 27, 2012). The official 

repeal of the 2011 Rule and the concessions made at oral 

argument confirm the invalidity of the 2011 Rule, and 

render any further discussion regarding the validity of the 

Rule unnecessary.

II.

The issue remaining before us is what action we 

should take in response to VA’s conduct, including its 

failure to abide by its commitments. We first address why 

we believe that action on our part is appropriate. 

A.

The VA’s conduct in this matter troubles the court on 

multiple levels. First, VA’s conduct did not involve an 

isolated mistake. Starting on March 5, 2012, VA began 

representing in court filings and in other communications 

with NOVA that it would immediately stop applying the 

2011 Rule. VA also made various representations implying that the Board was not applying the Rule. In spite of 

these representations, NOVA identified sixty cases in 

which the invalid 2011 Rule may have been applied—and 

that was just in the month of March. Thirty of these 

cases expressly refer to the invalid 2011 Rule, and many 

if not all of these thirty cases declare that the Rule renders § 3.103 inapplicable.2 We are only left to wonder 

2 For purposes of this Order we accept NOVA’s data, although the Government is entitled to challenge the 

 
8 NATIONAL ORG OF VET ADV v. SHINSEKI

how VA was able to represent to us in its May Supplemental Reply that it was not aware of “any instances” in 

which the Board applied the 2011 Rule after March 5th. 

In more than one instance, VA said that it would investigate and rectify or deal with any application of the 

invalid 2011 Rule that occurred after March 5, 2012. 

Indeed, the Government concedes that it “repeatedly” told 

NOVA that if NOVA found any mistakes, then the Government would “inform the VA Office of the General 

Counsel to rectify the matter.” Reply Supp. Resp’t’s Third 

Mot. at 5, May 3, 2012. NOVA identified cases to VA, and 

from the record before us, it appears that VA has failed to 

honor its commitments.3

As a consequence, VA’s conduct resulted in harm to 

NOVA, its attorneys, and this court. Each has been 

required to divert resources from other important activities in order to address conduct that should never have 

occurred in the first place. Worse yet, VA’s conduct has 

potentially harmed not just plaintiff NOVA’s organization 

but the very individuals it represents and that VA is 

tasked with assisting. At least as early as March 5, 2012, 

the Government acknowledged that the 2011 Rule was 

invalid under the APA, but VA allowed the Rule to be 

applied well beyond that date. Applying the invalid 2011 

Rule stripped veterans of assistance that the Board would 

have otherwise been required to provide. Given this 

context, VA’s failure promptly to stop the Board from 

using the 2011 Rule is entirely unacceptable. 

numbers in its response. We are mindful that the exact

number of affected veterans is not the issue—if one of the 

injured veterans represented by NOVA was denied the 

benefits the law provides, it would be one too many. 

3 Apparently VA started analyzing cases but that 

effort was not carried out.

 
 NATIONAL ORG OF VET ADV v. SHINSEKI 9

Finally, VA’s conduct troubles the court because, rather than remedy harm caused by its broken promises, 

VA attempted to shift the burden to others such as 

NOVA, attorneys assisting veterans (oftentimes on a probono basis), or to the harmed veterans themselves. In 

particular, VA indicated in a letter to NOVA dated November 5, 2012,4 that the routine appellate (or postdecisional, in the case of Board reconsiderations) process 

was the most appropriate venue for resolving affected 

cases. VA indicated in its 2011 Rule addendum that 

motions for reconsideration and appeals provided “adequate avenues of relief to any claimants who may have 

been adversely affected by the repealed rule.” Rules 

Governing Hearings Before the Agency of Original Jurisdiction and the Board of Veterans’ Appeals; Repeal of 

Prior Rule Change, 77 Fed. Reg. 70,686-01, 70,687 (November 27, 2012). The usual procedural processes, initiated by the claimant, for relief from erroneous decisions 

may be appropriate under usual circumstances; here they 

are not. 

VA attempted to justify its conduct at oral argument, 

arguing that it did not intentionally violate its commitments and that its actions were not in bad faith. But the 

petitions for extension of time were not based upon representations of intent to perform certain actions, but rather 

were based upon representations that those actions were 

actually being performed. VA’s commitments required 

VA to ensure that its statements to NOVA and this court 

were true and that the invalid Rule was not being applied; only by doing so could VA avoid harming the parties 

involved. The unwarranted denial of benefits means real4 Letter from John J. Todor, Senior Trial Counsel, 

U.S. Dep’t of Justice, to Roman Martinez, Esq., counsel 

for NOVA (November 5, 2012) (submitted in Notice of 

Supplemental Authority Pursuant to Rule 28(j)).

 
10 NATIONAL ORG OF VET ADV v. SHINSEKI

world consequences to veterans. Promises of hypothetical 

relief do not pay for food or provide needed medical care.

Additionally, VA’s conduct and written communications refute its assertions that its violations were unintentional. For example, VA effectively stated that it 

would not investigate and deal with illegal application of 

the 2011 Rule because it would burdensome.5 In other 

words, VA was well aware of this commitment and intentionally elected not to fulfill it.

VA also alleges that it instructed the Board to cease 

applying the Rule. VA went as far as to label NOVA’s 

concerns unfounded because the Board had supposedly 

been instructed to cease applying the rule on March 5, 

2012. See Reply Supp. Resp’t’s Third Mot. at 5, May 3,

2012. However, the only communication that VA confirms actually reached the Board members and their staff 

was a memorandum circulated on April 4, 2012, one 

month after the promised date. VA also alleged that the 

Board’s Principal Deputy Vice Chairman had stated that 

her office would instruct the Board to cease applying the 

amendments to § 3.103.6 The record VA presented to the 

court, however, never confirms if (or when) this instruction actually occurred. And the Board’s extensive reliance 

on the invalid 2011 Rule throughout the month of March 

2012 confirms that—irrespective of what VA alleges that 

it did—VA failed to ensure that the 2011 Rule was not 

being applied by the Board.

5 “Upon review, the VA Office of General Counsel 

concluded that your request that VA identify and remedy 

any cases of prejudice due to the Board’s application of 

the August 23 amendments since March 5, 2012, would 

involve extensive review and would be likely to identify 

very few, if any, cases of specific and remediable prejudice.” Letter from John J. Todor, supra note 4. 

6 See Letter from John J. Todor, supra note 4. 

 
 NATIONAL ORG OF VET ADV v. SHINSEKI 11

B.

VA’s failure to abide by its commitments to this court 

and opposing counsel raises the question of whether we 

should exercise our inherent or statutory powers to issue 

sanctions against the agency and the responsible officials. 

Courts of justice are vested by their very creation with 

power “to impose silence, respect, and decorum, in their 

presence, and submission to their lawful mandates.” 

Anderson v. Dunn, 19 U.S. 204, 227 (1821). These powers 

include the power to “manage their own affairs so as to 

achieve the orderly and expeditious disposition of cases.” 

Link v. Wabash R. Co., 370 U.S. 626, 630–31 (1962). A 

court may rely on its inherent powers to award monetary 

sanctions when a party has acted in “bad faith, vexatiously, wantonly, or for oppressive reasons.” Chambers v. 

NASCO, Inc., 501 U.S. 32, 45–46 (1991). 

Courts of justice also have the ability to “fashion an 

appropriate sanction for conduct which abuses the judicial 

process.” Id. at 44–45. And while sanctions must be 

fashioned with restraint and discretion, courts of justice 

can fashion appropriate monetary and nonmonetary 

sanctions to rectify misbehavior. Examples of sanctions 

fashioned by courts include: awarding attorneys’ fees (see

id. at 55–58); barring a criminal defendant who disrupts a 

trial from the courtroom (see Illinois v. Allen, 397 U.S. 337 

(1970)); ordering a new trial on all issues (see Schreiber 

Foods, Inc. v. Beatrice Cheese, Inc., 402 F.3d 1198, 1206 

(Fed. Cir. 2005)); and issuing reprimands (see In re Bailey, 

182 F.3d 860, 864–65 (Fed. Cir. 1999)). 

Given the Government’s conduct in this case, the 

court orders the Government to show cause why it should 

not be sanctioned under this court’s inherent authority. It 

seems that sanctions may be needed to motivate VA in 

the future to treat its commitments and representations 

to this court and opposing counsel with the seriousness to 

which they are entitled. 
12 NATIONAL ORG OF VET ADV v. SHINSEKI

While the court is prepared to consider sanctions for 

misconduct by the Government and its responsible officials, we recognize that doing so imposes additional 

burdens on all the parties as well as this court. As an 

alternative to entering into sanctions proceedings, we are 

willing to first receive and review a submission from the 

Government that 1) provides a plan for how VA intends to 

identify and rectify harms caused by VA’s failure to abide 

by its representations, and 2) explains why VA’s plan 

renders sanctions proceedings unnecessary. VA may 

already be undertaking such a plan due to VA’s emphasis 

on accountability.7 

In preparing a plan for submission to this court, the 

Government may wish to address the following concerns: 

1. Does the VA propose to provide individual notice 

of the problem to every veteran who, during the 

relevant time period, may have had a case affected by the Board’s erroneous application of the 

2011 Rule?8

7 VA proclaims to “perform in a manner at all times 

that makes [VA] accountable, responsible, and answerable to veterans and their families . . . .” Mission, Vision, 

Core Values & Goals, U.S. Dep’t of Veterans Affairs 

(October 3, 2011) http://www.va.gov/about va/mission.asp. 

8 The relevant time period ends the last date the 

Board may have applied the invalid Rule to cases before 

it. At a minimum it includes all cases heard or acted 

upon beginning March 5, 2012. Further, VA may wish to 

explain its intentions with regard to cases heard or acted 

upon from the date the invalid Rule was first promulgated, August 2011; the Government has acknowledged that 

the Rule was void ab initio, and has publically declared 

that the repeal of the Rule “appl[ies] to decisions issued 

by the Board on or after August 23, 2011.” See supra. 

 
 NATIONAL ORG OF VET ADV v. SHINSEKI 13

2. Does the VA intend to conduct reviews of the cases heard or decided by the Board during the relevant time period, and take appropriate corrective 

action? 

3. Does the VA’s proposed plan satisfy or remedy 

each of its broken commitments to this court and 

to NOVA, including its commitments not to apply 

the 2011 Rule and to rectify harm caused thereby?

4. Does the plan address any procedural and timeliness hurdles that may impact affected veterans 

who seek redress for the harms caused by the invalid Rule, including those who seek redress directly from the VA?

We expect that the Government will choose to confer 

with NOVA regarding its proposed plan so that any plan 

submitted to the court fully addresses the harms caused 

by the Government’s conduct and minimizes the need for 

further orders by this court. 

CONCLUSION

Accordingly, we grant the Government a period of sixty (60) days to respond to this Order To Show Cause. If 

necessary, NOVA will have a period of thirty (30) days 

following the Government’s submission in which to file a 

formal response with its comments and recommendations.

SO ORDERED

 FOR THE COURT

 

 March 21, 2013 /s/ S. Jay Plager 

 Date S. Jay Plager 

 Circuit Judge