# United States **Court of Appeals**  **for the Federal Circuit**

______________________ DONALD L. MULDER, Claimant

- Appellant

v.

ROBERT A. MCDONALD, SECRETARY OF VETERANS AFFAIRS, Respondent

- Appellee

______________________

2014

- 7137

______________________ Appeal from the United States Court of Appeals for Veterans Claims in No. 12

- 1222, Judge Lawrence B. Hagel, Judge Margaret C. Bartley, Judge William A. Moorman.

______________________

Decided: November 1 2 , 2015

______________________

T RAVIS J AMES W EST , Pia Anderson Dorius Reynard & Moss, Milwaukee, WI, argued for claimant

- appellant.

E MMA B OND , Commercial Litigation Branch, Civil D ivision, United States Department of Justice, Washington, DC, argued for respondent

- appellee. Also represented by J OYCE R. B RANDA , R OBERT E. K IRSCHMAN , J R ., M ARTIN F. H OCKEY , J R .; Y. K EN L EE , A MANDA B LACKMON , Office of General Counsel, United States Department of Veterans Affairs, Washin gton, DC.MULDER v. MCDONALD 2

______________________

Before N EWMAN , O’M ALLEY , and C HEN , Circuit Judges.

C HEN , Circuit Judge.
This case arises from a decision by the Department of Veterans Affairs (VA) reducing the disability compens ation of Donald L. Mulder (Mr. Mulder) after he was incarcerated as a result of a felony conviction. The Board of Veterans’ Appeals (Board) found that, under 38 U.S.C. § 5313(a)(1), the VA properly determined the date on which Mr. Mulder’s benefits should be reduced. The United States Court o f Appeals for Veterans Claims (Veterans Court) affirm ed, Mulder v. Gibson , 27 Vet. App. 10 (2014), and Mr. Mulder appealed. For the reasons set forth below, w e agree with the Veterans Court that the VA should use the date on which Mr. Mulder pleaded guilt y and was convicted when calculating the date on which to reduce his benefits

. B ACKGROUND

I
Mr. Mulder served in the United States Army for three separate periods between 1982 and 1994, collectiv ely accumulating approximately two years of honorable servi ce. In 1998, the VA issued a decision assigning Mr. Mulder a 50% disability rating for two service -connected conditions.
In 2005, Mr. Mulder was arrested and charged with two felony counts. On July 11, 2005, at his initial a ppearance in Wisconsin Circuit Court for Milwaukee County , the judge set Mr. Mulder’s bail at $750,000.00. Because Mr. Mulder was unable to post bail, he remained in custody pending trial.
On May 19, 2006, Mr. Mulder pleaded no contest to

one of the two felony charge s and the State of WisconsinMULDER v. MCDONALD 3

dismissed the second

. That same day, the court found him guilty and ordered that judgment of conviction be entered on the record. The court then remanded Mr. Mulder into custody and scheduled his sentencing hea ring.
On June 16, 20 06, the court sentenced Mr. Mulder to

a prison term of fourteen years

, six months . The court ordered that Mr. Mulder would serve an initial term of confinement of eight years

, six months , followed by six years of supervised release

. In addition, the court gave Mr. Mulder credit for the 384 days he was in custody awaiting the conclusion of his criminal proceedings. The court then entered judgment of conviction list ing this sentence and specif ying May 19, 2006

, as the “Date(s) Convicted.” Joint Appendix (J.A.) 198.

II

The VA has a statutory obligation to reduce benefits payments if the recipient is “incarcerated in a Federal, State, local, or other penal institution or correctional facility for a period in excess of sixty days for conviction of a felony .” 38 U.S.C. § 5313 (a)(1)

. If the recipient’s dis ability rating exceeds 20%, § 5313(a)(1)(A) require s that the compensation is reduced to 10%. See 38 U.S.C. § 1114(a). The reduction in compensation “begin[s] on the sixty

- first day of such incarceration a nd end[s] on the day such incarceration ends.” 38 U.S.C. § 5313(a)(1).
In July 2007, as required by § 5313(a)(1)

, the VA sent a letter to Mr. Mulder explaining that his felony convi ction and resulting incarceration required the VA to reduce
t he amount of Mr. Mulder’s disability compensation. The letter notified Mr. Mulder that th e reduction would be effective on July 19, 2006, the sixty

- fir st day following his May 19, 2006 felony conviction. The letter also stated that Mr. Mulder ’s disability benefits could be restored to his original 50% rating after he was no longer incarce rated.MULDER v. MCDONALD 4

Mr. Mulder responded to the VA by object ing to the reduction and assert ing that his sentence had been vaca ted. In fact

, while Mr. Mulder had pursued various forms of post

- conviction relief

, these proceedings r esult ed only in minor re

- calculations of his sentence. Although each re

calculation required his sentence to be vacated and re

imposed, Mr. Mulder’s no contest plea and corresponding conviction were ne ither reversed n or vacated , and he was not released from incarceration

. Accordingly, the VA implemented the proposed rating reduction.

III
Mr. Mulder filed a Notice of Disagreement and ult imately appealed to the Board. The Board found that July 19, 2006

, was the sixty

- first day after Mr. Mulder entered his no contest ple a and was found guilty , and thus was the correct date for the VA to reduc e Mr. Mulder’s benefits.
Mr. Mulder appealed to the Veterans Court

, arguing that the causal link between his incarceration and his felony conviction did not exist until he was sentenced to a term of imprisonment. According to Mr. Mulder, before his sentence was imposed , he was incarcerated under the Wisconsin bail statute, Wis. Stat. § 969.01

, rather than “for convictio n of a felony,” as required by § 5313(a)(1). In other words, Mr. Mulder argued that between his 2005 arrest and his June 16, 2006 sentencing hearing , he was incarcerated solely because he was unable to post bail. Mr. Mulder thus asserted that his compens ation should not have been reduced until the sixty

- first day after the June 16, 2006 sentencing hearing, which was twenty

eight days after he pleaded guilty.

The Veterans Court rejected this argument . S pecifically, the Veterans Court determined that § 5313(a)(1) imposed four elements that must be met before the VA
must reduce a veteran’s compensation: “(1) incarceration in a penal institution; (2) for a period in excess of 60 days;MULDER v. MCDONALD 5

(3) a conviction; and (4) a felony.” Mulder v. Gibson , 27 Vet. App. at 14

. The Veterans Court concluded that when Mr. Mulder pleaded no contest, each of these four el ements was present. The Veterans Court therefore rejec ted Mr. Mulder’s argument s and affirmed the VA ’s decision to base the effective date for the reduction of Mr. Mulder’s benefits on the date of his no contest plea. M r. Mulder appeal ed to this court.

D ISCUSSION Our review of appeals from the Veterans Court is li mited by statute to determining “the validity of a decision of the [Veterans Court] on a rule of law or of any statute or regulation . . . or any interpretation thereof

. . . .” 38 U.S.C. § 7292(a). We review the Veterans Court’s inte rpretation of a statute de novo. Sursely v. Peake , 551 F.3d 1351, 1354 (Fed. Cir. 2009). We must also decide “al l relevant questions of law” and will “set aside any regul ation or any interpretation thereof (other than a determ ination as to a factual matter)” relied upon in the decision of the Veterans Court that we find “(A) arbitrary, capr icious, an abuse of discretion, or otherwise not in accor dance with law; (B) contrary to constitutional right, power, privilege, or immunity; (C) in excess of statutory jurisdi ction, authority, or limitations, or in violation of a statut ory right; or (D) without observance of procedure required by law.” 38 U.S.C. § 7292(d)(1).

I
Statutory interpretation begins with the words of the
statute. Barnhart v. Sigmon Coal Co., Inc. , 534 U.S. 438, 450 (2002). “The first step is to determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case.” Id. (internal quotation marks omitted). This inquiry “ceases if the statutory language is unambiguous and the statut ory scheme is coherent and consistent.” Id. (internal quotati on marks omitted).MULDER v. MCDONALD 6

The VA r educe d Mr. Mulder’s disability compensation pursuant to 38 U.S.C. § 5313(a)(1), 1 which provides that
any person who is entitled to compensation or to dependency and indemnity compensation and who is incarcerated in a Federal, State, local, or other penal institution or correctional facility for a per iod in excess of sixty days for conviction of a felony shall not be paid such compensation or depende ncy and indemnity compensation, for the period b eginning on the sixty

- first day of such incarceration and ending on the day such incarceration ends, in an amount that exceeds . . . in the case of a vete ran with a service

- connected disability rated at 20 percent or more, the rate of compensation payable [for a service

- connected disability rated ten pe rcent] . . . .
Thus, according to the plain language of the statute the VA must reduce a veteran’s compensation when the veteran is (1) “incarcerated in a . . . penal institution” ; (2) “for a period in excess of sixty days”; (3) “for convict ion of”; (4) “a felony.” Mr. Mulder concedes that the offense to which he pleaded no contest was a felony under Wisconsin law. Mr. Mulder also does not dispute that h is no contest

1 The VA implemented this statute in 38 C.F.R. § 3.665. Because we rely only on the plain language of the statute, we need not consider whether this regulation is entitled to deference. See Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc. , 467 U.S . 837, 842

– 43 (1984). Further, a s both parties recognize, however, the regul ation essentially “parrots” the statutory language; it does nothing to interpret or elaborate. As such, any interpr etation of this regulation by the VA is not entitled to deferen ce. See Haas v. Peake , 525 F.3d 1168, 1186

– 87 (Fed. Cir. 2008). We therefore refer only to the statutory language appearing in 38 U.S.C. § 5313(a)(1).MULDER v. MCDONALD 7

plea constitutes a convict ion

. Instead, Mr. Mulder argues that the VA erroneously calculated the date on which his benefits should be reduced based on his conviction date, rather than using the date of his sentencing. To that end, Mr. Mulder contends that the necessary causal link betw een his incar ceration and felony conviction wa s not present until he was actually sentenced to a term of i mprisonment exceeding sixty days

. Thus, to resolve this appeal, we need determine only whether Mr. Mulder was “incarcerated . . . for conviction of a felony,” beginning on the date he pleaded guilty , as the VA contends, or whet her the requisite causal link was absent until the date of his sentencing, as Mr. Mulder contends.
In considering whether we should read the word “co nviction” in § 5313(a)(1) to mean “sentencing,” we must examine the statutory language. Because the word “sentencing” does not appear in the statutory language, we must determine whether it should be implied here. We recently considered a similar argument in Wilson v. Gibson , 75 3 F.3d 1363, 1366

– 67 ( Fed. Cir. 2014), where an incarcerated veteran argued that his benefits could not be reduced until the sixty

- first day after his “final” conviction— i.e. , the date when he had exhausted his appellate and habeas corpus rights. I n Wilson , we observed that the statute use d the word “conviction,” not “final convi ction.” We then concluded that this distinction required us
to reject the appellant’s contention that § 5313(a)(1)’s reduction of disability compensation could proceed only

a fter “the conviction bec[ame] final in state courts, or after complete exhaustion of post

- conviction review oppo rtunities.” Id. at 1367. Similarly, in the present case, we decline to equate the word “sentencing” with the statutory term “conviction,” and reject Mr. Mulder’s interpretation of the statute.
Supporting our reading is the fundamental canon of statutory construction that, “unless otherwise defined, words will be interpreted as taking their ordinary, co n-MULDER v. MCDONALD 8

temporary common meaning.” Perrin v. Uni ted States

, 444 U.S. 37, 42 (1979). T he language of § 5313(a)(1) plainly specifies the “conviction” date i s the date on which the statutory sixty

- day clock begins. As we recognized in Wilson , t he word “conviction” is understood as “[t]he act or process of judicial ly finding someone guilty of a crime; the state of having been proved guilty.” 753 F.3d at 1367 (quoting Black’s Law Dictionary 358 (8 th ed. 20 0 4) ). The Supreme Court has also equated a guilty plea, such as Mr. Mulder’s no contest plea, with a conviction: “A plea of guilty differs in purpose and effect from a mere admission or an extrajudicial confession; it is itself a conviction. Like a verdict of a jury it is conclusive. More is not r equired; the court has nothing to do but give judgment and sentence.” Dickerson v. New Banner Inst., Inc. , 460 U.S. 103, 112

– 13 (1983) (quotation marks and citation omi tted). 2 A “s entence,” on the other hand, is ordinarily understood as “[t]he judgment that a court formally pronounces after finding a crimina l defendant guilty ” or

“ the punishment imposed on a criminal wrongdoer.” Black’s Law Dictionary 1485 (9th ed. 2009 ). Thus, accor ding to its ordinary meaning, a “conviction” occurs when the accused is found

— or pleads

— guilty; the convicted felon’s “sentencing ” is separate and distinct from the

2 In Dickerson , the Supreme Court concluded that a state’s expungement of a felony conviction had no bearing on the underlying conviction’s effect on an individual’s ability to maintain a federal license to manufacture or sell firearms under 18 U.S.C. § 922( g ). 460 U.S. at 119

– 20. Congress overruled this outcome in the Fir earms Owners’ Protection Act, Pub. L. 99

- 308, 100 Stat. 449, by providing that a conviction expunged under state law would not prevent an individual from maintaining such a license under § 922(d) or from possessing a firearm under § 922(g). See Logan v. United States , 552 U.S. 23, 27

– 28 (2007).MULDER v. MCDONALD 9

determination of guilt. Just as in Wilson , where we held the plain language of § 5313(a)(1) did not support reading “conviction” as a final, post

- exhaustion of appeals convi ction, here, there is likewise no basis for interpreting “conviction” to mean conviction and sentencing. Co ngress, could have, but did not, draft § 5313(a)(1) to reduce benefits post

- sentencing or post

- exhaustion of appeals. See, e.g. , 10 U.S.C. § 12312(a)(2) (providing for involu ntary release fr om military service if a service

- member “is convicted and sentenced to confinement . . . and the se ntence has become final” (emphasis added) ). Such specifi city is absent here.

A

To overcome th e plain meaning of § 5313(a)(1) , Mr. Mulder relies on W isconsin ’s b ail s tatute. E ntitled “[e]ligibility for release,” section 969.01 of the Wisconsin Statutes authorizes a court to release a criminal defen dant from custody under certain conditions. Mr. Mulder argues that from the time he was arrested until the day he received a sentence including a term of imprisonment, he was incarcerated solely pursuant to section 969.01. Namely, when Mr. Mulder was first arrested, he was unable to pay the $750,000.00 bail set by the judge

, and thus remained in custody under sect ion 969.01. After the judge accepted his no contest plea and found him guilty, he remained in custody pending sentencing because he still was unable to make bail

. Therefore, according to Mr. Mulder, until he was sentenced to a term of impriso nment , he wa s not incarcerated based on his felony conviction , but was in fact incarcerated because of his inability to post bail

. We disagree. Mr. Mulder’s explanation of how Wi sconsin’s bail statute operat es is insufficient to persuadeMULDER v. MCDONALD 10

us to abandon the plain lan guage of § 5313(a)(1). 3 The statutory language does not require that the conviction be the sole reason that the individual is incarcerated. We recognize that, under section 969.01, Mr. Mulder could have been released with conditions while awaiting se ntencing for his felony conviction

. 4 The fact remains

, however, that without Mr. Mulder’s May 19, 2006 conviction , there would be no authority for his continued inca rceration and his inability to make bail would be irrelevant. In this way, Mr. Mulder’s Ma y 19, 2006 co nviction is certainly one of the reasons, even if not the sole reason, for his remaining in custody. The mere possibility of release does not break the causal link between Mr. Mulder’s immediate incarceration f ollowing his convi c3 The parties dispute whether Wisconsin law a pplies to determine whether incarceration and the felony convi c tion are adequately linked. We doubt that Congress intended the causation analysis to turn on state law. See Miss. Band of Choctaw Indians v. Holyfield , 490 U.S. 30, 43 (1989) (“We start, however, with the general assum ption that in the absence of a plain indication to the co ntrary, . . . Congress when it enacts a statute is not making the application of the federal act dependent on state law.” (internal quotation marks omitted) ). Nevertheless, b ecause we conclude that even the Wisconsin bail statute cannot alter the plain meaning of § 5313(a)(1), we need not decide whether Congress intended us to look to sta te law.

4 We also note that, if Mr. Mulder had been r eleased pending sentencing under section 969.01(2), we would be confronted with a different question that we need not decide today. Under those facts, we would need to dete r mine whether the “incarcerat ion” element of § 5313(a)(1) was met and whether the VA was therefore required to wait until Mr. Mulder was later incarcerated after se n tencing to begin the sixty

- day clock.MULDER v. MCDONALD 11

tion . In fac t, after accepting Mr. Mulder’s guilty plea, the court immediately “ordered defendant REMANDED into
cust ody . . . .” J.A. 194.

B
Even though the statutory language is unambiguous and we need not consult the legislative history, th at history nevertheless confirms our conclusion. Congress enacted § 5313 as part of the Veterans’ Disability Co mpensation and Housing Benefits Amendments of 1980. At that time, the principal sponsor of the bill explained that
the purpose of compensation is to replace the lost earning capability of a disabled veteran where the impairment is caused by a service

- connected co ndition. I do not consider it unreasonable to reco gnize that individuals who are confined by our judicial system for commission of a serious offense against society are no longer available to the labor market. An economic detriment caused by a dis ability is not felt by such individuals during long period s of confinement.
126 Cong. Rec. 26,118 (1980) (statement of Rep. Mon tgomery). In light of the purpose behind providing disabi lity compensation

, Congress did not “see the wisdom” in providing substantial benefits to disabled veterans “when at the same time the taxpayers of this country are spen ding additional thousands of dollars to maintain these same individuals in penal institutions.” Id. ; see also 126 Cong. Rec. 26,122 (1980) (statement of Rep. Wylie) (“In the case of imprisonment, when a prisoner is b eing fully supported by tax dollars that fund the penal institution, it becomes ludicrous to continue payment of benefits d esigned to help him maintain a standard of living.”).
Indeed, b oth this c ourt and the Veterans Court have previously acknowledged t his congressional purpose. See Snyder v. Nicholson , 489 F.3d 1213, 1215 (Fed. Cir. 2007)MULDER v. MCDONALD 12

(“Congress recognized that [incarcerated] veterans were receiving benefits that were not offset to account for expenses, such as room and board, that were provided by the prisons.”); Wanless v. Shinseki , 23 Vet. App. 143, 148 (2009)

, aff’d , 618 F.3d 1333 (Fed. Cir . 2010) ( “Congress has explicitly concluded that if taxpayers are financing a veteran’s incarceration, it is contrary to the public good to also pay him full VA disability benefits.”).
These congressional statements further demonstrate that Congress’s intent is best served by using the date on which the veteran was found guilty as the start date for the VA to calculate when the veteran’s benefits will be reduced. Assuming the veteran is placed in custody after being found guilty of a felony , using th e conviction date

, rather than the later sentencing date, best achieves Congress’s objective of preventing taxpayers from paying twice for such a veteran’s living expenses.
C

Mr. Mulder also asserts that our interpretation of § 5313(a)(1 ) unfairly p enalizes those veterans who lack the financial means to post bail

. Mr. Mulder overlooks the fact that a criminal defendant who is later sentenced to a term of imprisonme nt will receive credit towards this term of imprisonment for incarceration during the crim inal proceedings

. See Wis. Stat. § 973.155(1)(a) (“A co nvicted offender shall be given credit toward the service of his or her sentence for all days spent in custody in conne ction with the course of conduct for which sentence was imposed.”); 18 U.S.C. § 3585(b) (“A defendant shall be given credit toward the service of a term of imprisonment for any time spent in official detention prior to the date the sentence commen ces . . . .”). Accordingly, a veteran who is incarcerated prior to sentencing will generally be released earlier than if the veteran was not incarcerated until after sentencing. Any perceived inequity is rem edied by the earlier resumption of benefits tha t accomp a-MULDER v. MCDONALD 13

nies an earlier release from incarceration. See § 5313(a) (1) (providing that the reduction in disability benefits “end[s] on the day such incarceration ends”).

II
Finally, Mr. Mulder asserts that the VA violated its Duty to Notify and Assist by failing to adequately invest igate Mr. Mulder’s assertions that his sentence has been vacated

. Although Mr. Mulder did inform the VA that his sentence was repeatedly vacated during his post

conviction proceedings , he never claimed

— nor could he have

— tha t his conviction had been overturned or that he had been released from custody

. In fact , each of his letters to the VA originated from a correctional facility. In any event, changes in sentence do not warrant resum ption of benefits under § 5313(a) (1) . A veteran’s compens ation reduction does not end until the incarceration ends. The VA therefore had no obligation to conduct any further investigation. See Robinson v. Shinseki , 557 F.3d 1355, 1361 (Fed. Cir. 2009) (holding that the VA’s obligation to assi st and read filings in a liberal manner does not extend to “claims which have no support in the record”).

C ONCLUSION We have considered the remaining arguments and find them without merit. F or the reasons stated above, the plain language of § 5313(a)(1) c annot support Mr. Mulder’s proposed interpretation. T hus, the judgment of the Veterans Court is affirmed.

AFFIRMED

C OSTS

No costs.