UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS

NO. 01-970

WILLIAM H. WANLESS, JR., APPELLANT,

V.

ANTHONY J. PRINCIPI,

SECRETARY OF VETERANS AFFAIRS, APPELLEE.

Before KRAMER, Chief Judge, and STEINBERG and GREENE, Judges.

O R D E R

The appellant appeals pro se an April 16, 2001, Board of Veterans' Appeals (Board or BVA)

decision in which the Board denied him payment of full disability compensation during his period

of incarceration. Record at 3, 6. The appellant and the Secretary each filed a brief, and the appellant

filed a reply brief. The parties also each filed a supplemental memorandum and a response pursuant

to Court orders. For the reasons that follow, the Court will vacate the April 2001 Board decision and

remand the matter for proceedings consistent with this order.

In the instant case, the pivotal question is whether the appellant "is incarcerated in

a . . . State . . . penal institution." 38 U.S.C. § 5313(a)(1). Specifically, the issue to be addressed is

the relationship between the State of Oklahoma and the Davis Correctional Facility (DCF) or the

Corrections Corporation of America, i.e, whether based on that relationship the DCF is a

"State . . . penal institution" under 38 U.S.C. § 5313(a)(1). Although the Board concluded that the

appellant is "incarcerated at a [S]tate prison" (R. at 5), the Board has not yet addressed the material

issue whether DCF is a "State . . . penal institution" within the meaning of section 5313 and the issue

regarding the relationship between the entities involved. Given that the resolution of those issues

may involve very specific factual determinations regarding contracts and other documents that are

best for the Board to make in the first instance, the Court concludes that it is premature for the Court

to address this matter. See Hensley v. West, 212 F.3d 1255, 1263-64 (Fed. Cir. 2000) (court of

appeals may remand if it determines that lower tribunal failed to make finding of fact essential to

decision); see also 38 U.S.C. § 7104(d)(1); Fallo v. Derwinski, 1 Vet.App. 175, 177 (1991) ("[T]he

Board's finding[s] and conclusions in this case are so vague that it is impossible to review them.");

Sammarco v. Derwinski, 1 Vet.App. 111, 113-14 (1991) ("Whether the BVA's ultimate conclusions

are correct or not, . . . the incomplete nature of the decision below does not permit proper review by

this Court."). 

On consideration of the foregoing, it is
2

ORDERED that the April 16, 2001, Board decision is VACATED and the matter is

REMANDED for further proceedings consistent with this order.

DATED: September 13, 2004 PER CURIAM. 

STEINBERG, Judge, concurring: The pro se appellant appeals an April 16, 2001, Board of

Veterans' Appeals (Board or BVA) decision in which the Board denied the appellant's claim for

entitlement to the payment of full Department of Veterans Affairs (VA) disability compensation

while incarcerated. Record (R.) at 3, 6. For the reasons that follow, I concur in the Court's order

vacating the April 2001 Board decision and remanding the matter.

I. Background

The appellant served on active duty in the U.S. Army from September 1979 to November

1981. R. at 9. Subsequently, VA granted service connection to the appellant for enucleation of the

right eye, chronic lumbar strain with degenerative disc disease, tinnitus, high-frequency hearing loss,

and residuals of a cervical strain. R. at 15, 23. Since November 1981, he has been entitled to special

monthly compensation (SMC), under 38 U.S.C. § 1114(k), based upon the loss of one eye, and he

has had a 60% combined service-connected rating from December 1, 1986. R. at 15-16, 21-23; see

38 U.S.C. § 1114 (setting forth ratings for VA disability compensation and SMC); 38 C.F.R. § 4.25

(2003) (regarding computation of combined ratings). In January 1993, a VA regional office (RO)

received, inter alia, a copy of a January 15, 1993, Judgment and Sentence rendered by the District

Court of Payne County, Oklahoma (CountyDistrict Court). R. at 24-32. That document reflects that

the appellant had been convicted of a felony and that the County District Court had sentenced the

appellant to life imprisonment without parole. R. at 31. That document furtherreflects that the term

of the appellant's imprisonment was to "begin at and from the delivery of the [appellant] to the

[Oklahoma] Department of Corrections [(ODOC)] at the Lexington Assessment and Reception

Center." Ibid. The County District Court ordered the ODOC to "detain [the appellant] according

to [its] judgment, sentence[,] and order." Ibid. Based on this document, the RO, in February 1993,

notified the appellant that VA had proposed to reduce his benefits, effective March 16, 1993, in light

of his incarceration for the conviction of a felony committed after October 7, 1980. R. at 34. In June

1993, he was notified by the RO that his disability compensation had been reduced, effective

March 16, 1993. R. at 36-37. 

Since that time, the appellant several times has challenged the validity of VA's reduction of

his disability compensation and VA has continued to deny the appellant's entitlement to the amount

of monthly benefits he had received before March 16, 1993. See R. at 46-85; see also Wanless v.

Veterans Admin., No. 95-5177, 1995 U.S. App. LEXIS 32074 (10th Cir. Nov. 16, 1995). In a May

28, 1997, decision, the BVA rejected the appellant's argument that 38 U.S.C. § 5313 (reducing to

10% rate disability compensation payments for individuals incarcerated in excess of 60 days in

"Federal, State, or local penal institution" for felony conviction) was unconstitutional, and the Board

determined that the reduction ofthe appellant's benefits,from those concurrent with a 60% disability

rating to those concurrent with a 10% disability rating, effective from March 1993, based on his
3

incarceration for a felony conviction, was proper. R. at 79-85. (Neither the Court's docket nor the

record on appeal (ROA) reflects an appeal from that decision.) In April 1998, the RO received

correspondence from the appellant; he argued that he was then entitled to the entire amount of his

disability compensation because he was no longer incarcerated in a State penal institution in that he

had been transferred to the Davis Correctional Facility. R. at 87-89. He asserted that "[t]he Davis

Correctional Facility (DCF) is administered[] and owned[] by the Corrections Corporation of

America (CCA)." R. at 87. He further argued that "CCA is a large, for-profit company [that is] set

up to run prisons, [which are] not closely monitored by [S]tate officials." Ibid. Specifically, the

appellant contended that DCF is not a State penal institution and that the legislative intent of

38 U.S.C. § 5313 does not support reducing his disability compensation. R. at 87, 89. 

In March 1999, the RO disallowed the appellant's April 1998 claim for the reinstatement of

his "full service[-]connected disability compensation". R. at 91. He timely filed a Notice of

Disagreement in which he argued that 38 U.S.C. § 5313 does not apply to him because he is not

confined in a State penal institution. R. at 93. The ROA contains an internal memorandum with

both CCA and DCF on the letterhead, which memorandum reflects that the appellant is an inmate.

R. at 96. (It appears from the ROA and the parties' pleadings that February 27, 1998, is the date on

which the appellant was transferred to DCF. See R. at 87-89, 91, 98, 110-11, 124; Secretary's Brief

(Br.) at 5-7.) On appeal to the Board, the appellant reiterated his prior arguments and further argued

that "[h]istorydoes not reveal a tradition of 'like status' between private prisons and Federal and State

[f]acilities." R. at 118-25, 132-39.

In the decision on appeal, the Board found that the appellant, in January 1993, was sentenced

by the County District Court to life imprisonment without parole for the commission of a felony and

that he "is still in prison under the life sentence imposed." R. at 2. The Board concluded that the

appellant was not entitled to payment of the entire amount of his disability compensation while

incarcerated for the commission of a felony. R. at 5. In so concluding, the Board, inter alia,

reasoned:

The mere fact that the State of Oklahoma has decided to allow for the private

management of a penal facility under a contract does not serve to remove the

[appellant's] felony conviction, nor does it serve to alter his status as a prisoner of the

State of Oklahoma. It is this status as a convicted felon in a [S]tate prison that

absolutely prohibits the payment of full disability compensation.

R. at 5 (emphasis added). The ROA does not contain a copy of any such contract as referred to

above by the Board. The Board further stated: 

[The appellant's] claim requires determining whether or not he is still incarcerated as

the result of a felony conviction. If so, the law presents an absolute prohibition

against the payment of his full disability compensation. The evidence shows that he
4

is still incarcerated at a [S]tate prison as a result of his January 1993 conviction and

sentencing for a felony offense.

Ibid. (emphasis added).

On appeal to this Court, the appellant, in his brief and reply, further reiterates his contention

that section 5313 no longer applies to him. Appellant's Br. at 2-5. In support of his argument, the

appellant asserts that Oklahoma law provides that "'[c]orrectional facilities owned or operated by

private prison contractors shall not be deemed to be within the [ODOC] or other [S]tate agency.'"

Id. at 2 (quoting OKLA. STAT. tit. 57, § 563 (2002) (Correctional facilities–Creation or

construction–Approval of Legislature–Inmate work centers–Location)). He further argues that the

Board did not address fully his arguments. Id. at 4. With respect to that argument, the Secretary

concedes that the Board "did not appropriately note the facts in this case" but argues that the "Court

should take account of the rule of prejudicial error." Secretary's Br. at 12-13. The Secretary further

concedes the novelty of the issue raised in this case and argues:

[T]he fact [that] the [a]ppellant is no longer housed in a penal institution managed

by the State[ of Oklahoma] does not negate that the State has legal possession of the

[a]ppellant and public monies fund his maintenance. The contractual relationship

established between CCA and the State of Oklahoma essentially places CCA in the

position of a [S]tate facility, with respect to the intended purpose of § 5313. . . .

. . . .

The Secretary does not dispute that a private[-]management corrections

company manages the facility in which the [a]ppellant resides (as shown by the

[ROA]). . . . Hence, the Court has been called upon to resolve the issue of whether

by virtue of the contractual arrangement between CCA and the State of Oklahoma,

the [a]ppellant continues to be incarcerated in a State penal institution, as

contemplated by the controlling statute. 

. . . .

The Secretary respectfully submits that the [a]ppellant advocates a "literal"

reading of this statute that is inconsistent with congressional intent. The course the

[a]ppellant charts in this appeal would lead to an "absurd" result.

Secretary's Br. at 8-10 (emphasis added). He thus requests that the Court affirm the Board decision.

Id. at 14. The Secretary also requests that "the Court . . . take judicial notice of information available

on the CCA Web site, [which] . . . confirm[s] the contractual relationship between CCA and the

State of Oklahoma." Id. at 11 n.1. In his reply, the appellant argues, inter alia, that section 5313 is

ambiguous and that Congress enacted other similarly crafted statutes, such as 42 U.S.C. § 402(x)
5

(suspending Social Security benefits to prisoners confined, inter alia, in "jail, prison, or other penal

institution or correctional facility"), without such ambiguity. Appellant's Reply Br. at 5. Thus, the

appellant argues that the Court should resolve the ambiguity in section 5313 in his favor. Id. at 6.

The Court has issued two orders in this case for supplemental submissions from the parties.

On June 16, 2004, the Court directed the Secretary to file with the Court (1) any appropriate

document(s) reflecting the relationship between the State of Oklahoma and the DCF or the CCA and

(2) a supplemental memorandum addressing whether the Court may take judicial notice of any such

document(s). The Court further directed that the appellant may file a supplemental memorandum

addressing this issue. The parties each filed responses to the Court's order. Attached to his July 1,

2004, supplemental memorandum, the Secretary provided copies of certain pages of a contract

between CCA and the DCF and the ODOC. Secretary's Supplemental Memorandum, Exhibit E. In

a July 20, 2004, order, the Court noted that the contract was incomplete and did not cover the entire

period at issue. The Court, therefore, directed the Secretary to file with the Court "contracts, state

attorney general opinions, or other complete documents that reflect that, from the time of the

appellant's transfer to the DCF, the DCF has constituted a 'State . . . penal institution' within the

meaning of 38 U.S.C. § 5313(a)(1) or other arrangement." Order at 2 (quoting 38 U.S.C.

§ 5313(a)(1)). The Court further directed the Secretary alternatively to advise the Court that no such

documents exist. On July 26, 2004, the Secretary filed a response, attaching documents that he

asserts demonstrate that DCF constituted a "State . . . penal institution" from February 1998, when

the appellant was transferred to the DCF. Response at 2. On August 9, 2004, the appellant

submitted a reply to the Secretary's response.

 

II. Analysis

The appellant argues that the Court should interpret 38 U.S.C. § 5313 as inapplicable to him

because DCF assertedly is not a "Federal, State, or local penal institution", 38 U.S.C. § 5313(a)(1),

and because Congress' legislative intent in enacting this provision purportedly does not support the

reduction of his disability compensation. The Secretary contends that "the appellant continues to be

incarcerated in a State penal institution, as contemplated by the controlling statute" or, in the event

that it is not deemed a State penal institution, the appellant's reading of section 5313 as being

inapplicable to him is inconsistent with the provision's legislative intent and would lead to an absurd

result. Secretary's Br. at 9-10.

A. Plain Meaning of 38 U.S.C. § 5313(a)(1)

The Court reviews questions of statutory interpretation de novo; in interpreting a statute, the

Court examines the language of the statute and, "'if the intent of Congress is clear, that is the end of

the matter.'" Cacatian v. West, 12 Vet.App. 373, 376 (1999) (quoting Gardner v. Brown, 5 F.3d

1456 (Fed. Cir. 1993), aff'd, 513 U.S. 115 (1994)); see Trilles v. West, 13 Vet.App. 314, 321 (2000)

(en banc). "However, if 'it is clear that . . . the literal import of the text . . . is inconsistent with the

legislative meaning or intent, orsuch interpretation leads to absurd results,' the Court will not reach
 See also United States v. X-Citement Video, Inc., 513 U.S. 64, 68-69 (1994); Timex V.I., Inc. v. United 1

States, 17 F.3d 879, 886 (Fed. Cir. 1998); Simmons v. Principi, 17 Vet.App. 104, 114 (2003); Thayer v. Principi,

15 Vet.App. 204, 210 (2001);Cottle v. Principi, 14 Vet.App. 329, 334 (2001); Faust v. West, 13 Vet.App. 342, 350

(2000); Davenport v. Brown, 7 Vet.App. 476, 483-84 (1995); Conary v. Derwinski, 3 Vet.App. 109, 111-12 (1992) (per

curiam order) (Steinberg, J., concurring). 

6

that result." Trilles, supra (citation omitted); see Holliday v. Principi, 14 Vet.App. 280, 285 (2001)

(citing precedent regarding need to avoid absurd result when interpreting statute), overruled on other

grounds in part by Dyment v. Principi, 287 F.3d 1377, 1385 (Fed. Cir. 2002), and Bernklau v.

Principi, 291 F.3d 795, 806 (Fed. Cir. 2002). 

1

In pertinent part, section 5313 of title 38, U.S. Code, presently provides:

 

Limitation on payment of compensation and dependency and indemnity

compensation [(DIC)] to persons incarcerated for conviction of a felony.

(a)(1) To the extent provided in subsection (d) of this section, any person

who is entitled to compensation or to [DIC] and who is incarcerated in a Federal,

State, or local penal institution for a period in excess of sixty days for conviction of

a felony shall not be paid such compensation or [DIC], for the period beginning on

the sixty-first day of such incarceration and ending on the day such incarceration

ends, in an amount that exceeds–

(A) in the case of a veteran with a service-connected disability

rated at 20 percent or more, the rate of compensation payable

under section 1114(a) of this title; . . .

. . . .

(d) The provisions of subsection (a) of this section shall apply (1) with

respect to any period of incarceration of a person for conviction of a felony

committed after October 7, 1980, and (2) with respect to any period of incarceration

on or after October 1, 1980, for conviction of a felony of a person who on October

1, 1980, is incarcerated for conviction of such felony and with respect to whom the

action granting an award of compensation or [DIC] is taken on or after such date.

38 U.S.C. § 5313 (boldface-italic emphasis added); see 38 U.S.C. § 1114(a) (setting forth VA

disability compensation for 10% rating). In the instant case, the plain language of section 5313

provides that a person entitled to compensation who is incarcerated in a "Federal, State, or local

penal institution" in excess of 60 days (for conviction of a felony) is not entitled to the entire amount

of his or her compensation beginning on the 61st day of incarceration but is entitled only to the rate

payable for a 10% disability rating (if, as here, the veteran has a service-connected disability rated
7

at 20% or more). 38 U.S.C. § 5313(a)(1). On its face, this statutory reduction in compensation

applies only to those persons incarcerated in a "Federal, State, or local penal institution" and does

not apply to persons entitled to compensation who are not so incarcerated. Ibid. Accordingly, in my

view, the plain meaning of section 5313 does not require a reduction of compensation unless the

person entitled to compensation is incarcerated in a "Federal, State, or local penal institution". Ibid.;

see Cacatian, supra. 

B. Parties' Other Contentions

1. DCF as a State Penal Institution

Here, neither party has contended that the appellant is incarcerated in a Federal or local penal

institution. Thus, at issue is whether he is incarcerated in a State penal institution. The appellant

contends that DCF is a privately owned and operated institution and thus not a State penal

institution. The Secretary contends, echoed by our dissenting colleague, that DCF, which apparently

is owned and operated by CCA, is a State penal institution "by virtue of the contractual arrangement

between CCA and the State of Oklahoma" and that the BVA decision should be affirmed.

Secretary's Br. at 9, 14.

In that regard, the Board is required to provide a written statement of the reasons or bases for

its findings and conclusions on all material issues of fact and law presented on the record; the

statement must be adequate to enable a claimant to understand the precise basis for the Board's

decision, as well as to facilitate review in this Court. See 38 U.S.C. § 7104(d)(1) (Board "shall

include . . . a written statement of the Board's findings and conclusions, and the reasons or bases for

those findings and conclusions, on all material issues of fact and law presented on the record");

Allday v. Brown, 7 Vet.App. 517, 527 (1995); Simon v. Derwinski, 2 Vet.App. 621, 622 (1992);

Gilbert v. Derwinski, 1 Vet.App. 49, 56-57 (1990). To comply with this requirement, the Board

must analyze the credibility and probative value of the evidence, account for the evidence that it

finds persuasive or unpersuasive, and provide the reasons for its rejection of any material evidence

favorable to the claimant. See Caluza v. Brown, 7 Vet.App. 498, 506 (1995), aff'd per curiam,

78 F.3d 604 (Fed. Cir. 1996) (table); Gabrielson v. Brown, 7 Vet.App. 36, 39-40 (1994); Gilbert,

supra. A failure to comply with this requirement creates an inadequate record that generally will

frustrate effective judicial review of BVA decisions. See Gilbert, supra. 

In the instant case, the Board failed to address the appellant's arguments below as to whether

he currently is "incarcerated in a . . . State . . . penal institution." 38 U.S.C. § 5313(a)(1). Although

the Secretary, as well as our dissenting colleague, attempts to undertake the Board's obligation to

provide an adequate statement of reasons or bases, see Secretary's Br. at 11-13, this Court's

jurisdiction extends to "review[ing] decisions of the Board", 38 U.S.C. § 7252(a). Hence, the Court's

role is to review whether the Board in its decision, rather than the Secretary in his brief, provided an

adequate statement of reasons or bases. Although in its April 2001 decision the Board made an ipse

dixit conclusion twice that the appellant is "still incarcerated at a [S]tate prison" (R. at 5), such a

conclusion does not address the material issue, i.e., whether DCF (which is apparently a privately

owned and operated facility) is a "State . . . penal institution" within the meaning of section 5313.
8

Indeed, in reaching that conclusion, the Board did not discuss or analyze any state laws or any

contractual provisions that may bear on that determination. See Gilbert, 1 Vet.App. at 57 (noting

that "bare conclusory statement, without both supporting analysis and explanation, is neither helpful

to the veteran, nor 'clear enough to permit effective judicial review', nor in compliance with statutory

requirements"). 

In this regard, the appellant in his brief directs the Court to section 563 of title 57, Oklahoma

Statutes, to support his contention that DCF is not a "State . . . penal institution", 38 U.S.C.

§ 5313(a)(1). See Appellant's Br. at 2, 4 (asserting that DCF is privately owned and operated facility

and that OKLA. STAT. tit. 57, § 563, provides that "[c]orrectional facilities owned or operated by

private prison contractors shall not be deemed to be within the [ODOC] or other [S]tate agency").

However, in its entirety, that Oklahoma statutory section provides:

A. Except as otherwise authorized by [s]ection 183 of [t]itle 73 of the

Oklahoma Statutes, before any correctional facility other than an inmate work center

as authorized in subsection B of this section or an inmate drug offender work camp,

whether within the [ODOC] or within any other [S]tate agency, may be created or

any construction performed which may significantly increase, extend or expand the

present facility, such creation or construction shall be approved by the Legislature.

Correctional facilities owned or operated by private prison contractors shall not be

deemed to be within the [ODOC] or other [S]tate agency.

B. The [ODOC] is hereby authorized to establish inmate work centers in

locations where a need for labor to conduct public work projects is determined. The

[ODOC] shall select the inmate work center locations based on objective

comparisons of interested communities in accordance with procedures and criteria

established by the [ODOC]. The procedures, selection criteria and decision case

analysis shall be made available to the public upon request.

C. No [S]tate, county or municipal correctional facility including any inmate

work center, inmate drug offender work camp, inmate halfway house, inmate

transitional living center and any other place where [S]tate, county or municipal

inmates are housed shall be located within one thousand (1,000) feet of any public

or private elementary or secondary school nor within two thousand five hundred

(2,500) feet of any state training school. The provisions of this subsection shall not

apply to any inmate work center, inmate drug offender work camp, inmate halfway

house, inmate transitional living center and any other place where [S]tate, county or

municipal inmates are housed established prior to May 20, 1994. Provided[] that the

provisions of this subsection shall not apply to [S]tate, county, or municipal

correctional facilities that are granted permission to operate within the areas restricted

by this subsection by a majority vote of the following entities:
9

1. The district board of education of each school district with an

affected school; and

2. The governing body of each affected private school.

D. In any county with a population of two hundred fifty thousand (250,000)

or more, as determined by the latest Federal Decennial Census, the [ODOC] shall not

cause, permit or require any inmate in the custody of the [ODOC] or cause, permit

or require any offender under the supervision of the [ODOC] to enter, remain or be

present in any [ODOC] facility located within one thousand (1,000) feet of a private

or public elementary or secondary school, or on the grounds of such a facility, for any

activities involving or relating to processing, training, instructing, interviewing,

counseling, reporting, conferring, imposing discipline, reviewing or adjudicating or

any correctional function requiring or permitting the presence of the offender, except

offenders may be employed in construction, maintenance or janitorial activities in or

on the structures or grounds while under supervision of a correctional employee. The

provisions ofthis subsection shall not apply to any facility established or acquired by

the [ODOC] prior to May 20, 1994.

OKLA. STAT. tit. 57, § 563 (2003) (emphasis added). 

Although there is language in section 563(A) that may appear to support the appellant's

contention that DCF is not a "State . . . penal institution", 38 U.S.C. § 5313(a)(1), the crux of that

section as a whole appears to be that an Oklahoma State agency must obtain approval from that

State's legislature before building, renovating, or relocating a prison but that private prisons do not

require such approval. I note further that, for purposes of the State of Oklahoma's prohibition against

locating correctional facilities within specified distances of certain schools, subsection C of section

563 appears to suggest that a private prison may be deemed a State, county, or municipal correctional

facility depending on whether such facility houses "[S]tate, county, or municipal inmates", OKLA.

STAT. tit. 57, § 563(C), as contrasted with subsection D, which appears to be limited in its reach to

only certain ODOC facilities. 

Moreover, section 502 of title 57, Oklahoma Statutes, in pertinent part, defines "[p]rivate

prison contractor[s]" as follows:

a. [A] non[-]governmental entity or public trust which, pursuant to a

contract with the [ODOC], operates an institution within the [ODOC] other than a

halfway house or intermediate sanctions facility, or provides for the housing, care,

and control of inmates and performs other functions related to these responsibilities

within a minimum or medium security level facility not owned by the [ODOC] but

operated by the contractor . . . .
10

OKLA.STAT. tit. 57, § 502(7)(a) (2003) (emphasis added). I note that the Oklahoma Statutes provide

numerous standards to govern contracts between the State and private prison contractors. In this

regard, section 561(A) of title 57, Oklahoma Statutes, provides in pertinent part:

A. The [ODOC] is hereby authorized to provide for incarceration,

supervision, and residential treatment at facilities other than those operated by the

[ODOC]. Services offered for persons under the custody or supervision of the

[ODOC] are to include, but not be limited to, housing, alcoholism or drug treatment,

mental health services, nursing home care, or halfway house placement. Such

services must meet standards prescribed and established by the State Board of

Corrections for implementing such a program, including but not limited to standards

concerning internal and perimeter security, discipline of inmates, educational and

vocational training programs, employment of inmates, and proper food, clothing,

housing, and medical care.

OKLA. STAT. tit. 57, § 561(A) (2003). Further, subsection B of section 561.1 provides, in pertinent

part:

B. Any contract between the [ODOC] and a private prison contractor,

whereby the contractor provides for the housing, care, and control of inmates in a

nondepartmental facility operated by the contractor, shall contain, in addition to other

provisions, terms and conditions: 

1. Requiring the contractor to provide said services in a facility

which meets accreditation standards established by the American

Corrections Association [(ACA)]; 

2. Requiring the contractor to receive accreditation for said

facility from the [ACA] within three (3) years of commencement of

operations of the facility;

3. Requiring the contractor to obtain written authorization from

the governing board of any municipality in which the facility is to be

located, or if the facility is not to be located within a municipality,

written authorization from the board of county commissioners of the

county in which the facility is to be located; and

4. Granting the [ODOC] the option at the beginning of each fiscal

year pursuant to an agreement, to purchase any such facility, with or

without inventory or other personal property, at a predetermined

price, which shall be negotiated and included in a schedule or a

formula to be contained in the original agreement.
11

OKLA. STAT. tit. 57, § 561.1(B) (2003);see OKLA. STAT. tit. 57, § 561(M)(4) (2003) (private prison

contractors must demonstrate "ability to comply with applicable court orders and corrections

standards"). In addition, Oklahoma State courts have held that confinement in a privately owned

prison that has a contract with the ODOC "does not alter [a person's] status as a prisoner" for

purposes of relief pursuant to the Fair Labor Standards Act of 1938 (FLSA), ch. 676, § 1,

52 Stat. 1060 (codified as amended at 29 U.S.C. §§ 201, et seq.). Washington v. Cornell Corr., Inc.,

30 P.3d 1162, 1164 (2001) (inmate not entitled to FLSA protections because his relationship with

privately owned corrections facility located in Oklahoma was based on his status as prisoner; thus,

no employer-employee relationship existed). In connection with the remand directed by the Court

in its instant order, the Board, in determining whether DCF may be deemed a "Federal, State, or local

penal institution", 38 U.S.C. § 5313(a)(1), should consider the above-mentioned statutory provisions

and caselaw, as well as any other potentially applicable law. See Schafrath v. Derwinski,

1 Vet.App. 589, 593 (1991) (holding that Board is required to consider, and discuss in its decision,

all "potentially applicable" provisions of law and regulation).

Here, in regard to any relationship between the ODOC and DCF or CCA, the ROA does not

contain any contract or other document reflecting an agreement between any of these entities

addressing, inter alia, DCF's or CCA's status as a private prison contractor within the meaning of

OKLA. STAT. tit. 57, § 502(7)(a), or any contract or document authorizing the transfer of the

appellant to DCF. Although the Secretary requests that the Court take judicial notice of CCA's

Web site as "confirming the contractual relationship between CCA and the State of Oklahoma"

(Secretary's Br. at 11 n.1), any finding of fact as to the existence and/or significance of a contract

between ODOC and DCF or CCA "is the province of the BVA" in the first instance, because the

Court's scope of review is limited to the record of proceedings before the Secretary and the Board.

Falk v. West, 12 Vet.App. 402, 405 (1999); see 38 U.S.C. §§ 7104(a), 7252(b).

Regarding the issue of the contractual relationship between the entities involved, I note that

in response to this Court's July 20, 2004, order, the Secretary submitted, among other things, the

following documents: (1) "Annual Renewal Lease and Operation Agreement" dated "as of" July 1,

1996, between Holdenville Industrial Authority (which apparently owned DCF) and ODOC, for a

period of one year and providing for 18 one-year renewal periods beginning July 1, 1997, and ending

June 30, 2016; and (2) the "Lease and Operation Agreement" dated "as of" July 1, 1996, between

Holdenville Industrial Authority and ODOC; (3) the Correctional Service Contract, dated July 1,

1998, between CCA (which apparently was the operator of DCF) in Holdenville, Oklahoma, and

ODOC; and (4) extension agreements of the contract identified in (3) above. 

The Lease and Operation Agreement contains certain provisions that may be relevant to the

factual issues involved here regarding the relationship between the entities. For example, section

2.11 (entitled "Independent Contractor") of Article II states as follows:

The AUTHORITY [(Holdenville Industrial Authority)] is associated with the

Transferring Entity [(ODOC)] only for the purposes and to the extent set forth in this
12

Agreement, and in respect of the performance of the Operation and Management

Services, the AUTHORITY is and shall be an independent contractor and, subject to

the terms of this Agreement, shall have the sole right (which right may be delegated

to the Operator [(CCA)] pursuant to a management services agreement) to supervise,

manage, operate, control, and direct the performance of the details incident to its

duties under this Agreement either directly or through the Operator pursuant to the

Management Services Agreement. Nothing contained in this agreement shall be

deemed or construed to create a partnership orjoint venture, to create the relationship

of an employer-employee or principal-agent, or to otherwise create any liability for

the Transferring Entity whatsoever with respect to the Bond indebtedness, liabilities,

and obligations ofthe AUTHORITY. The AUTHORITY shall be solely responsible

for and the Transferring Entity shall not have any obligation with respect to payment

of all federal income, F.I.C.A., and other taxes owed or claimed to be owned by the

AUTHORITY, arising out of this Agreement.

Secretary's Response (Resp.), Exhibit (Exh.) 1 at 11. There may be other provisions in this

agreement relevant to this inquiry. See, e.g., id. at 13 (providing in Article II, section 2.20, entitled

"Taxes, Liens, Assessments, and Utilities", that the "AUTHORITY shall . . . pay . . . all lawful taxes

and assessments levied or assessed by the . . . State"); 29 (providing in Article V, section 5.2(A),

entitled "Representations and Warranties of the AUTHORITY", that "[t]he AUTHORITY is

organized and existing as a public trust created under the laws of the State as an agency of the State

and the duly constituted authority of the City"). I also note that although there are also subsequent

correctional services contracts between CCA and ODOC that state that CCA is the owner of DCF

and also appear to contain provisions entitled "Independent Contractor", the Secretary has not

provided those contracts in their entirety and those provisions were not among those provided. See,

e.g., Secretary's Resp., Exh. 3 ("Correctional Services Contract" between CCA and ODOC for the

period July 1, 2003, through October 31, 2003, Table of Contents showing Article 6, section 6.1,

entitled "Independent Contractor Status").

In any event, even if judicial notice were to be taken of the existence of a contract between

the ODOC and DCF or CCA, the fundamental inquiry, which the Board failed to address and to

which the answer is presently unknown, is whether any such contract provides that DCF constitutes

a "State . . . penal institution" within the meaning of 38 U.S.C. § 5313(a)(1). The Board thus failed

to consider adequately "all . . . applicable provisions of law" and to provide an adequate statement

of reasons or bases for its decision. 38 U.S.C. § 7104(a), (d)(1); see Allday and Gilbert, both supra.

Accordingly, remand is appropriate unless the Secretarywere to prevail on his alternative argument,

discussed below, which I believe that he does not. See Hicks v. Brown, 8 Vet.App. 417, 422 (1995)

(stating that remand rather than reversal is appropriate remedy when judicial review is frustrated by

inadequate record below); see also Pond v. West, 12 Vet.App. 341, 346 (1999) (stating that remand

is appropriate remedy when Board has failed to ensure proper development of claim); Block v.

Brown, 7 Vet.App. 343, 346 (1994). 
13

2. Secretary's Alternative Argument 

The Secretary further argues that, even assuming that DCF is not a State penal institution,

concluding that section 5313 is inapplicable to the appellant would be contrary to the legislative

intent underlying the provision and would produce an absurd result. If the Court were to conclude

that the Secretary was correct on this argument, such a conclusion would appear to obviate the need

for remand. See 38 U.S.C. § 7261(b)(2) (in conducting review of BVA decision, Court shall take

due account of rule of prejudicial error); Conway v. Principi, 353 F.3d 1369, 1373 (Fed. Cir. 2004)

(concluding that Court not obligated to address expressly "rule of prejudicial error in each and every

opinion"; however, Court cannot "flatly refuse[] to 'take due account of the rule of prejudicial

error'"); Soyini v. Derwinski, 1 Vet.App. 540, 546 (1991).

As discussed above, the "plain meaning must be given effect unless a 'literal application of

[the] statute will produce a result demonstrably at odds with the intention of its drafters.'" Gardner

v. Derwinski, 1 Vet.App. 584, 586-87 (1991) (quoting Griffin v. Oceanic Contractors, Inc., 458 U.S.

564 (1982)), aff'd sub nom. Gardner, supra. The "absurd result" exception to the plain meaning rule

is narrow and limited to situations "'where it is quite impossible that Congress could have intended

the result . . . and where the alleged absurdity isso clear as to be obvious to most anyone.'" Gardner,

1 Vet.App. at 587 (quoting Pub. Citizen v. U.S. Dep't of Justice, 491 U.S. 440, 470-71 (1989)

(Kennedy, J., concurring)). However, for the reasons that follow, I cannot conclude on the record

before us that a plain reading of section 5313, that is, a reading that finds that the statute does not

reduce the compensation of persons incarcerated in institutions other than "Federal, State, or

local . . . institution[s]", 38 U.S.C. § 5313(a)(1), would necessarily produce an absurd result. 

As a preliminary matter, I note that the current version of section 5313 is virtually unchanged

from the provision originally enacted by Congress in October 1980 in section 504 of the Veterans'

Disability Compensation and Housing Benefits Amendments of 1980, Pub. L. No. 96-385, § 504,

94 Stat. 1528, 1534 (Oct. 7, 1980). Compare id. with 38 U.S.C. § 5313 (2002). As set forth below

and explained in great detail in my concurring opinion in Bolton v. Brown, 8 Vet.App. 185, 194-97

(1995) (Steinberg, J., concurring), a review of the legislative history of that provision reveals that

it was the result of a compromise between the Senate and the House of Representatives. In this

regard, the Explanatory Statement prepared by the House and Senate Committees on Veterans'

Affairs reflects as follows regarding the details of the compromise agreement that became section

504 of Public Law 96-385:

Sec. 504. The House bill would amend chapter 55 of title 38, United States

Code, to provide that, during a service-connected disabled veteran's confinement in

a Federal, State, or local penal institution as the result of the veteran's conviction of

a felony or misdemeanor, the veteran's compensation may not exceed $60 per month

after the first 60 days. Under this provision, the reduction after 60 days of

incarceration would apply only to veterans rated 20 percent or more disabled, as long

as the 10-percent rate is less than $60 per month. Amounts not paid to the veteran
14

could be apportioned to the veteran's dependents. A similar limitation would apply

to incarcerated recipients of DIC and death compensation payments. This provision

would be effective with regard to payments for months after September 30, 1980.

The Senate amendment does not contain a comparable provision.

The compromise agreement provides for a limitation along the lines of the

House bill with the following provisions:

(1) The limitation would apply only to persons incarcerated for a

felony conviction.

(2) The limitation would apply only to those whose offense is

committed after the date of the enactment of this section and to those who are

incarcerated on October 1, 1980, and awarded compensation or DIC after that

date.

(3) The limitation would not apply to a person while he or she is

participating in a work-release program or residing in a half-way house.

(4) Apportionments to dependents of veterans would be provided for

under the same terms and conditions as are apportionments made pursuant to

section 3107 of title 38, [currently enumerated as 38 U.S.C. § 5307,] which

governs apportionments in the cases of non-incarcerated compensation

beneficiaries. Apportionments of DIC would be provided for in a similar

manner. However, no apportionment of the compensation, DIC, or death

compensation of a person to whom the limitation applies could be made to

a dependent who is incarcerated for conviction of a felony.

(5) With respect to veterans, the compromise agreement would limit

the monthly amount of compensation payable to veterans rate[d] 20 percent

or more disabled to the 10-percent rate ($54 under the compromise

agreement) and, to veterans rated zero or 10 percent disabled, to half of the

10-percent rate ($27). The limitation would thus apply to all veterans rated

as 10 percent or more disabled and to those whose rating is zero percent but

who receive the rate provided under section 314(k) of title 38[, currently

enumerated as 38 U.S.C. § 1114(k)]. With respect to DIC and death

compensation recipients, the monthly amount payable would be limited to

half of the 10-percent rate.

(6) No adjudications of total disability based on individual

unemployability would be permissible during the period of the veteran's

incarceration.
15

Under the compromise agreement, this section would be effective on the date

of enactment.

The Committees note that it is their intention that the limitations provided for

under the compromise agreement apply to persons convicted of felonies and

sentenced to imprisonment while they are institutionalized in a hospital facility on

transfer from (but not on parole from) a penal institution. In cases of

prison-to-hospital transfer, the Committees consider that the hospital is serving as an

agent of the penal institution. As has been noted, the limitation would not apply

during a period during which the individual is participating in a work-release

program even though, under such program, he or she returns to confinement during

evenings or weekends. Restoration to the full rate would occur upon the person's

release from incarceration, including release on parole. At such times, of course, any

amount apportioned to dependents would be appropriately adjusted.

The Committees intend that, at the time action is taken to reduce an

incarcerated veteran's or survivor's benefits under this section, . . . VA provide such

veteran or survivor and those to whom apportionments may be made with notice of

these apportionment provisions.

Explanatory Statement, Pub. L. No. 96-385, 96th Cong., 2d Sess. (1980), reprinted in

1980 U.S.C.C.A.N. 3323, 3326-27; see Bolton, 8 Vet.App. at 194-97 (Steinberg, J., concurring)

(setting forth pertinent legislative history ofsection 5313); see also 126 CONG.REC. 27,014 (1980);

126 CONG. REC. 26,110, 26,119-20 (1980).

Although the House of Representatives, in July 1980, had passed H.R. 7511 with an

incarcerated-person provision in it, see 126 CONG.REC. 18,789 (1980), neither the Senate-introduced

bill nor the initial Senate-passed bill, which contained an amendment to the House-passed bill,

included a provision with respect to the limitation of compensation and DIC for incarcerated persons.

See S. REP. NO. 96-876 (1980); 126 CONG. REC. 9,767-70 (1980); 126 CONG. REC. 21,426-30,

21,447 (1980). However, as set forth in the Explanatory Statement, above, a subsequent compromise

involving the Senate's amendment to the House-passed bill and the House's further amendment to

that amendment was ultimately agreed upon by the two Committees on Veterans' Affairs, see

126 CONG. REC. 26,110 (1980), and on September 24, 1980, the Senate concurred in the House

amendment to the Senate amendment. 126 CONG. REC. 27,017 (1980).

Moreover, with respect to the compromise brokered between the Senate Committee and the

House Committee, the Chairman of the Senate Committee explained in pertinent part:

[W]e . . . . argued strongly against the House provisions in H.R. 7511 limiting the

payments of disability compensation and DIC to veterans and survivors during their

incarceration for criminal convictions. However, much to our regret, we were unable
16

to convince our House colleagues to accept our position . . . . Although they would

not yield entirely from the House position, they were willing to make substantial

concessions on the provision itself.

. . . .

Mr. President, the House bill, but not the Senate amendment, would have

limited the amount of compensation and DIC benefits payable to persons who are

incarcerated in penal institutions for felony or misdemeanor convictions. Under the

House bill, compensation or DIC, after the first 60 days of incarceration, could not

exceed $60 per month.

. . . .

The compromise agreement provides for a limitation that would apply only

to those who are convicted of felonies and only in situations where the offense is

committed after the date of the enactment of this section or, if before, to those who

are incarcerated on October 1, 1980, and awarded compensation or DIC after that

date while incarcerated. The limitation would not apply at all to a person while he

or she is participating in a work-release program or residing in a halfway house.

. . . .

Mr. President, in my view and in the view of other [C]ommittee members, the

House-passed provision not only raised questions of fundamental fairness but also

threatened basic principles underlying the service-connected compensation programs.

However, with the utmost reluctance and recognizing the depth of the feelings in the

other body with regard to the issues involved – and, as I previously noted, Senator

THURMOND and I personally met with Representatives MONTGOMERY and WYLIE –

we have reached an accord on the provisions in the compromise agreement,

provisions that I believe are consistent with notions of fundamental fairness.

I would like to emphasize that the limitation would apply only prospectively.

It would apply generally only to those who commit felonies after the date of

enactment, and no person who is currently serving a period of incarceration would,

as a result thereof, lose any compensation benefits which he or she has been awarded

prior to October 1.

. . . .

In my view, the various modifications of the House provisions reflected in the

compromise agreement go far to overcome many of our [C]ommittee's objections to
17

this part of the House bill, and I appreciate the cooperation of the House Members

in working out these provisions with us.

126 CONG. REC. at 27,011-16 (statement of Sen. Cranston). With regard to the final compromise

legislation, the ranking minoritymember on the Senate Committee offered the following statement:

Mr. President, the original legislation by the House contained a provision that

would deny compensation benefits to a veteran once that veteran became

incarcerated, and upon release these benefits would be reinstated. The Senate bill did

not address this issue. However, during consideration of this matter by the members

of both Veterans'[Affairs] Committees, to reach a suitable resolution, the very theory

and purpose of service-connected compensation was discussed. The compromise

agreement, Mr. President, is not what I wanted nor was it the position of the Senate;

yet, the House felt strongly on this matter and I believe this compromise is the best

that could have been achieved under the circumstances.

Mr. President, VA compensation is paid to a veteran for his service-connected

disability. The rate of payment reflects the average impairment of earning capacity

as a result of this disability. It is my opinion that the economic or social status of the

veteran should not determine his receipt of compensation. If a veteran's status in life

was considered to be a factor in the receipt of compensation, then the argument could

be made that a veteran who has a certain income level should have his compensation

reduced. Thus, receipt of compensation would be need-based and not totally related

to a disability incurred while in service.

Id. at 27,017 (statement of Sen. Thurmond). These statements illustrate the conflict between the

House and the Senate over the fundamental principles of service connection. See also Explanatory

Statement, supra. 

Finally, in contrast to Congress' concern regarding limiting the scope of section 5313, the

appellant directs the Court's attention to a Social Security statutory provision that he contends

illustrates Congress' clear intent to bar all beneficiaries who are "confined in a jail, prison, or other

penal institution or correctional facility" from receipt of Social Security benefits. 42 U.S.C.

§ 402(x)(1)(A)(i) (emphasis added); see Appellant's Reply Br. at 5. In this regard, at the time that

Congress was legislating section 5313, it enacted an amendment to the Social Security Act (SSA),

which, inter alia, suspended the payment of benefits to individuals incarcerated for a felony

conviction. That amendment was contained in section 5(c) of Public Law No. 96-473, which

provided:

(c) Section 223 of [the SSA] is amended by adding at the end thereof the

following new subsection:
18

"Suspension of Benefits for Inmates of Penal Institutions[.]

"(f)(1) Notwithstanding any other provision of this title, no monthly benefits

shall be paid under this section . . . by reason of being under a disability, to any

individual for any month during which such individual is confined in a jail, prison,

or other penal institution or correctional facility, pursuant to his conviction of an

offense which constituted a felony under applicable law, unless such individual is

actively and satisfactorily participating in a rehabilitation program which has been

specifically approved for such individual by a court of law and, as determined by the

Secretary, is expected to result in such individual being able to engage in substantial

gainful activity upon release and within a reasonable time.["]

Social Security Act–Retirement Test, Pub. L. No. 96-473, § 5(c), 94 Stat. 2263, 2265 (1980)

(emphasis added) (codified at 42 U.S.C. § 402(x)). This provision originated as an amendment

added by the Senate Finance Committee to H.R. 5295 as passed by the House, see Pub. L. No. 96-

473, 96th Cong., 2d Sess. (1980), reprinted in 1980 U.S.C.C.A.N. 4787, 4794-95; S. REP. NO. 96-

987 (1980); 126 CONG. REC. 36,969 (1979), and was included in the Senate-passed H.R. 5295, see

126 CONG. REC. 28,193-95 (1980). The Finance Committee explained as follows this provision in

the bill as reported:

The [C]ommittee believes that the basic purposes of the [S]ocial [S]ecurity

program are not served by the unrestricted payment of benefits to individuals who are

in prison or whose eligibility arises from the commission of a crime. The disability

program exists to provide a continuing source of monthly income to those whose

earnings are cut off because they have suffered a severe disability. The need for this

continuing source of income is clearly absent in the case of an individual who is

being maintained at public expense in prison. The basis for his lack of other income

in such circumstances must be considered to be marginally related to his impairment

at best. 

The [C]ommittee bill therefore would require the suspension of benefits to

any individual who would otherwise be receiving them on the basis of disability

while he is imprisoned by reason of a felony conviction.

S. REP. No. 96-987, Pub. L. No. 96-473, 96th Cong., 2d Sess. (1980), reprinted in 1980

U.S.C.C.A.N. at 4794-95. As to that Senate-passed amendment, shortly before the House agreed

to it, the ranking minority member of the House Ways and Means Committee stated:

The matter of primary concern to the House here, as I understand it, has to do

with [S]ocial [S]ecurity benefits for those convicted of felonies or crimes in the

nature of a felony in jail. There has been considerable concern expressed in this

House as a result of the Son of Sam case where it was disclosed that this convicted
19

murderer in Attica State Prison was receiving substantial disability benefits under

[S]ocial [S]ecurity because of his mental disability, determined in the trial whereby

he was found guilty.

126 CONG.REC. 28,675-77 (1980) (statement of Rep. Conable);see 126 CONG.REC. 29,151 (1980)

(Senate final passage of H.R. 5295 as further amended by the House).

The provision suspending Social Security benefits has been amended several times since its

enactment in 1980. See generally Ticket to Work and Work Incentives Improvement Act of 1999,

Pub. L. 106-170, § 402, 113 Stat. 1860, 1907-09 (Dec. 17, 1999); Social Security Domestic

Employment Reform Act of 1994, Pub. L. No. 103-387, § 4(a)(1), (2), 108 Stat. 4071, 4076 (Oct. 22,

1994). Currently, that statute provides in relevant part:

Limitation on payments to prisoners and certain other inmates of publicly

funded institutions. 

(1)(A) Notwithstanding any other provision of this subchapter, no monthly

benefits shall be paid under this section . . . to any individual for any month

ending with or during or beginning with or during a period of more than 30

days throughout all of which such individual–

(i) is confined in a jail, prison, or other penal institution or

correctional facility pursuant to his conviction of a criminal offense,

(ii) is confined by court order in an institution at public expense in

connection with–

(I) a verdict or finding that the individual is guilty but

insane, with respect to a criminal offense,

(II) a verdict or finding that the individual is not guilty of

such an offense by reason of insanity,

(III) a finding that such individual is incompetent to stand

trial under an allegation of such an offense, or

(IV) a similar verdict or finding with respect to such an

offense based on similar factors (such as a mental disease,

a mental defect, or mental incompetence), or

(iii) immediately upon completion of confinement as described in

clause (i) pursuant to conviction of a criminal offense an element of
See generally http://www.doc.state.ok.us/Private%20Prisons/private_prison_admin.htm (last visited Aug. 23, 2

2004) (providing hyperlink to pdf document containing survey of private prison rates by state). 

See Trilles v. West, 13 Vet.App. 314, 324 (2000) (en banc); Holliday v. Principi, 14 Vet.App. 280, 285 3

(2001); see also Simmons, Thayer, Cottle Faust, Davenport, all supra note 1; Gardner v. Derwinski, 1 Vet.App. 584,

20

which is sexual activity, is confined by court order in an institution at

public expense pursuant to a finding that the individual is a sexually

dangerous person or a sexual predator or a similar finding.

(B)(i) For purposes of clause (i) of subparagraph (A), an individual shall not

be considered confined in an institution comprising a jail, prison, or other

penal institution or correctional facility during any month throughout which

such individual is residing outside such institution at no expense (other than

the cost of monitoring) to such institution or the penal system or to any

agency to which the penal system has transferred jurisdiction over the

individual.

42 U.S.C. § 402(x) (boldface-italic emphasis added). 

It is clear that, by amending the provision, Congress over the past 20 years has affirmatively

expanded the scope of 42 U.S.C. § 402(x) to include, inter alia, any person confined to "a jail, prison,

or other penal institution or correctional facility" and any person confined to "an institution at

public expense." Ibid. (emphasis added). In contrast, the amendments to section 5313 have not

expressly expanded the provision's scope to include the "other penal institutions or correctional

facility" or "institution at public expense" language of 42 U.S.C. § 402(x) or to reflect the trend of

the privatization of penal institutions. Indeed, the broadness of the contemporaneously enacted 2

section 402(x) cannot be imported into section 5313. See Skinner v. Brown, 27 F.3d 1571, 1576

(Fed. Cir. 1994) ("It may be unusual that Congress chose not to tie [Restored Entitlement Program

for Survivors] payments to the same time restrictions that applied under the Social Security Act, but

it is hardly absurd to conclude, as the government suggests, that it meant to do so under these

circumstances given the plain statutory language."). 

Thus, based on the Explanatory Statement that reflects the compromise between the House

and Senate Committees on Veterans' Affairs'; the statements made by Senators Cranston and

Thurmond regarding the brokering of the compromise legislation; the absence of any reference to

persons incarcerated in privately owned and operated institutions or elsewhere at public expense

similar to those references that appear to broaden the effect of 42 U.S.C. § 402(x); and the lack of

substantial amendments to section 5313 since its enactment, I am unable to conclude, as the

Secretary urges, that applying section 5313 only to those persons entitled to compensation who are

incarcerated in a "Federal, State, or local . . . institution", 38 U.S.C. § 5313(a)(1), undoubtedly would

produce an absurd result.3
586-87 (1991), aff'd sub nom. Gardner v. Brown, 5 F.3d 1456 (Fed. Cir. 1993), aff'd, 513 U.S. 115 (1994).

21

On remand, the Board should ensure complete development of the appellant's claim, to

include the securing of complete copies of any and all documents related to DCF's relationship with

the ODOC and any and all documents pertaining to the appellant's transfer of custody to DCF, see

38 U.S.C. § 5103A(b); 38 C.F.R. § 3.159(c)(1) (2003) (setting forth VA's duty to assist claimant in

obtaining records not in custody of Federal department or agency), and provide a thorough

discussion so as to enable the appellant to understand the precise basis for the Board's decision and

to facilitate review in this Court, if again sought. See Caluza, Gabrielson, and Gilbert, all supra;

Fletcher v. Derwinski, 1 Vet.App. 394, 397 (1991) (remand is meant to entail critical examination

of justification for decision; Court expects that BVA will reexamine evidence of record, seek any

other necessary evidence, and issue timely, well-supported decision); see also Fortuck v. Principi,

17 Vet.App. 173, 181 (2003) (noting that Veterans Claims Assistance Act of 2000, Pub. L. No.

106-475, 114 Stat. 2096, and its implementing regulations at 38 C.F.R. § 3.159 will apply on remand

from Court). 

III. Conclusion

In my view, it is the Court's duty to remand this case – just as it was the duty of the Board

to provide a decision that dealt with the principal legal question involved in such a way, based on

the evidence of record, as to permit us to carry out effective judicial review. This Court cannot

perform the Board's task for the Board or decide the case on an evidentiary record on which the

Board did not rely in its decision. If, upon further review of the circumstances surrounding this case,

it is concluded that an amendment of the statute is in order to make express in law what the

Secretary believes is there, such action is the province of the legislative branch and not within our

jurisdiction.

GREENE, J., dissenting: I do not join the Court's per curiam order today, because I feel that

the record is adequate for judicial review. Furthermore, the question at issue is a question of law that

I believe the Court can and should answer. 

Initially, I cannot agree with the conclusion that the Board has "not yet addressed" the

question of whether Mr. Wanless is incarcerated in a State penal institution. Ante at 1. In fact, the

Board spends three full paragraphs discussing the veteran's arguments on this very question, i.e., the

question of whether the DCF, as a private prison contractor, constitutes a 'State . . . penal institution"

within the meaning of 38 U.S.C. § 5313(a)(1). In the first two, the Board addresses and rejects the

authority relied upon by Mr. Wanless in support of his views of section 5313. R. at 4-5. In the last,

the Board correctly observes that his incarceration in a privately-managed prison does not negate the

fact that he is serving time for a felony conviction imposed under Oklahoma state law. R. at 5. As

shown below, the Board decision, though imperfect, is more than adequate.
22

First, the Board's conclusion that Mr. Wanless is imprisoned for a State felony conviction

follows Oklahoma law. In Washington v. Cornell Corr. Inc., the Court of Civil Appeals of

Oklahoma addressed a civil suit brought by a prisoner incarcerated in a privately owned prison

facility, and noted both that the prisoner had been "sentenced to a term of confinement in DOC

custody," and that his "confinement at GPCF [(Great Plains Correctional Facility)], although

privately owned, does not alter his status as a prisoner." Washington, 30 P.3d 1162, 1164 (Okla. Civ.

App. 2001). Under OKLA. STAT. tit. 57, § 561(A), the Oklahoma Department of Corrections is

authorized to contract with private prisons contractors for the operation of a prison. However, such

a contractor must demonstrate "[t]he ability to comply with the standards of the American

Correctional Association and with specific court orders." Okla. Stat. tit. 57, § 561.1(C)(2). There

is no merit in Mr. Wanless' argument that he is not, under section 5313, in Oklahoma DOC custody

and incarcerated as a prisoner in a State penal institution. (To the extent that it might be argued that

Mr. Wanless was only sentenced to confinement in DOC custody, but is now serving in something

other than DOC custody, such a view would have this Court (or the Board on remand) contemplate

a statement that the State of Oklahoma is contravening the order of the trial court by placing the

veteran in a private prison over which there is no State control or recognition of the confinement

terms for his felony conviction. Mr. Wanless does not argue that he is not under State control and

the statutes authorizing private prisons contradicts any such theory.)

Second, the Board's rejection of Mr. Wanless' argument regarding section 5313 is wholly in

line with the view (which I share) that interpreting section 5313 in the manner proposed by him

would lead to "a result demonstrably at odds with the intention of its drafters." Gardner v.

Derwinski, 1 Vet.App. 584, 586-87 (1991), aff'd sub nom. Gardner v. Brown, 5 F.3d 1456 (Fed. Cir.

1993), aff'd, 513 U.S. 115 (1994). Indeed, the Secretary does an excellent job of explaining the

legislative history of section 5313:

The course the Appellant charts in this appeal would lead to an "absurd" result. In

1980, prior to the passage of 38 U.S.C. § 5313, the Honorable G.V. 'Sonny'

Montgomery, the principal sponsor of H.R. 7511, 96th Cong., the bill that became

Pub.L. No. 96-385, explained the basis for the legislation as follows:

I do not see the wisdom of providing hundreds and thousands of dollars of tax

free benefits to incarcerated felons when at the same time the taxpayers of

this country are spending additional thousands of dollars to maintain these

same individuals in penal institutions. . . .

126 Cong. Rec. 26, 118 (1980); see VAOPGC PREC 59-91. Additionally,

Congressman Wylie stated, "[i]n the case of imprisonment, when a prisoner is being

fully supported by tax dollars that fund the penal institution, it becomes ludicrous to

continue payment of benefits designed to help him maintain a standard of living."

126 Cong. Rec. 26, 122 (1980) (emphasis in original).
 Oklahoma law authorizes the Oklahoma DOC to contract with privately-owned prisons to house and care for

1

Oklahoma prisoners. See OKLA. STAT. tit. 57, §§ 561(A), 561.1(B) (2003). Although the statute doesn't require the DOC

to have a stated rationale for doing so, it is likely that such facilities may be necessary because the state cannot adequately

house (for monetary or other reasons) some prisoners.

23

Secretary's Br. at 10-11.

It should be noted that nowhere among the concerns expressed, nor among any other

statement in the legislative history, is there a single statement that suggests that Congress was

concerned whatsoever about limiting section 5313 so that it did not apply to individuals convicted

by the Federal government or a State or local government, whose incarceration is carried out by a

privately run contract-penal institution. Rather, Congress appeared to be concerned with the

limitation of benefits to any incarcerated veteran, which was finally accomplished with a global

limitation, based on the nature of the underlying offense (i.e., it applies only to felonies) and to

incarceration after a set date. 

In this case, Mr. Wanless believes that there is in section 5313 a distinction between prisoners

incarcerated in state-owned prisons and those incarcerated in privately run (but state-contracted)

prisons. Thus, he argues that he is entitled to the full amount of his VA benefits, rather than the

reduced amount available to prisonersin actual DOC prisons. His belief is misplaced. There should

be no dispute but that privately managed prisons are still operated under contract for the state,

meaning that the state is still expending funds to incarcerate these prisoners. See generally

http://www.doc.state.ok.us/Private%20Prisons/privatep.htm(visited Aug. 17, 2004) ("Private Prisons

with Oklahoma DOC Contracts"; listing per diem expense to state per inmate). Thus, I would hold 1

that such arrangements are still well within the legislative intent of section 5313; the reasons for not

helping a prisoner at a privately run institution maintain a standard of living are identical to the

reasons for not doing so for a prisoner at a publicly run institution. The Board, in making its

conclusion rejecting Mr. Wanless' argument, was, consciously or not, recognizing that his argument

would lead to an "absurd result." See United States v. X-Citement Video, Inc., 513 U.S. 64, 69-70

(1994) (noting the Court's "reluctance to simply follow the most grammatical reading of the statute").

By vacating the Board decision and remanding this matter, the majority must, necessarily,

believe that Mr. Wanless' argument should be given credence, i.e., that there may be a result here that

negates application of the "absurd result" doctrine; if it felt otherwise and still remanded this matter,

it would be acting in contravention to the dictates of the holding of Gardner, supra. The majority's

sub silentio finding that it cannot undoubtedly conclude that it would be an absurd result if section

5313 applied only to persons incarcerated in a "Federal, State, or local . . . institution" and not to

persons incarcerated in government-contracted, privately run facilities does not, of course, offer any

basis on how Congress could have intended such a distinction. Indeed, there is no need for such a

distinction, and no indication that Congress ever entertained, let alone acted on, such a strained

interpretation. To conclude, as the majoritymust in order to find error here, that Congress may have

sought to ameliorate these concerns by differentiating between prisoners confined in private prisons
 Note that a result awarding full benefits to an incarcerated veteran would effectively divest apportionees of 2

their right to such funds, and it would be logical for Congress to have an interest in having VA assist such apportionees.

 Indeed, we may judicially note that the Davis Correctional Facility is one of the CCA facilities with an

3

Oklahoma DOC contract. As such, it could be concluded to be an agent of the State of Oklahoma and therefore a State

prison for purposes of section 5313. See http://www.doc.state.ok.us/Private%20Prisons/privatep.htm (visited Feb. 26,

2004) (listing Davis Correctional Facility, where Mr. Wanless is incarcerated, as one of the private prisons with which

Oklahoma DOC contracts). See also Smith (Brady) v. Derwinski, 1 Vet.App. 235, 238 (1991) (noting that "[c]ourts may

take judicial notice of facts not subject to reasonable dispute"). I note that the information is not disputed by either party,

is readily accessible to the public, and is therefore "not subject to reasonable dispute," Smith (Brady), supra; thus we

need not engage in any factfinding to take note of this information. Furthermore, regardless of whether we use this

information or not, this much is clear: Mr. Wanless was convicted by the State of Oklahoma and is now incarcerated in

the United States. Furthermore, nobody, not even Mr. Wanless, disputes that he is being incarcerated at, at a minimum,

the behest of the State of Oklahoma, and nobody has alleged that the Davis Correctional Facility is housing Mr. Wanless

free of charge. Given these facts, it seems an elementary deduction to arrive at the fact that he is, for purposes of section

5313, being incarcerated by a branch of Federal, State, or local government.

 The only likely situation in which I see section 5313 not applying would be one where a veteran is imprisoned 4

in a foreign country (and hence not being cared for at the expense of the United States). 

24

operated for the State versus those confined in actual State-owned prisons, quite simply, leads to an

absurd result. Such a conclusion presumes a Congressional intention to create a sort of random,

lottery-type veterans benefits system. A veteran convicted of a felony and incarcerated in a stateowned prison is eligible only for reduced benefits. But a veteran similarly convicted and sentenced

but incarcerated in a privately run, state-contracted prison is eligible for full benefits. Congress

could not have intended this result.2

The majority's insistence here on having the Board conduct a detailed analysis ofthe contract

between CCA and the Oklahoma DOC avoids the critical, indisputable fact: Mr. Wanless is a

prisoner convicted of a felony by the State of Oklahoma and ordered imprisoned by that State at

public expense. Nothing in the contract between CCA and DOC can change that fact. Even if the 3

contract explicitly stated that this facility was not a State penal institution, section 5313 would still

apply here with full force. This is because the authority in this situation flows from the statute down,

not from the contract up. No contract can alter the basic intent of section 5313, which was to limit

payments designed to maintain a standard of living to veterans who were already being housed,

clothed, and fed at public expense. No matter how the Oklahoma DOC and CCA want to classify

the arrangement, if these prerequisites are in place, section 5313 applies. Any contrary conclusion 4

is inconsistent with the concept that "the law is not an abstract concept removed from the society it

serves." Sandra Day O'Connor, A Tribute to Justice Thurgood Marshall: Thurgood Marshall: The

Influence of a Raconteur, 44 STAN. L. REV. 1217, 1218 (1992).

There does not seem to be any rationale for treating veterans incarcerated for state felony

convictions in a state-contracted, privately owned facilitymore favorably than veterans incarcerated

in state-owned prisons. I believe that both are State penal institutions. Indeed, since section 5313
25

was enacted, states (and the Federal government) have increasingly turned to private prison

contractors as a way to save funds and to house prisoners where State facilities are inadequate.

Indeed, in many states, the proportion of prisoners in privately run institutions is very high; for

example, 43.4 % in New Mexico, 29.3% in Alaska, 16.5% in Mississippi, and 28.9% in Oklahoma.

See www.doc.state.ok.us/MAPS/US_PC_private.htm (visited Feb. 27, 2004). 

This is a case in which "the law and not the evidence is dispositive." Sabonis v. Brown,

6 Vet.App. 426, 430 (1994). The Board decision should be affirmed.

I respectfully dissent.