UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS

No. 98-269

CHARLES E. VAUGHN, APPELLANT,

V.

TOGO D. WEST, JR.,

SECRETARY OF VETERANS AFFAIRS, APPELLEE.

Before KRAMER, HOLDAWAY, and STEINBERG, Judges.

O R D E R

Before this Court is the appellant's August 3, 1999, application for attorney fees and expenses

under the Equal Access to Justice Act, 28 U.S.C. § 2412(d) (EAJA). The Secretary has filed an

opposition to that application, and the appellant has filed a reply to that opposition and a

supplemental EAJA application. For the reasons that follow, the Court will deny both the EAJA

application and the supplemental EAJA application.

On February 10, 1998, the appellant, Vietnam veteran Charles E. Vaughn, appealed through

counsel a December 9, 1997, decision of the Board of Veterans' Appeals (BVA or Board) that denied

as not well grounded his claim for Department of Veterans Affairs (VA) service connection for a

skin disorder due to in-service exposure to Agent Orange (AO). On September 16, 1998, the U.S.

Court of Appeals for the Federal Circuit (Federal Circuit) issued its opinion in Hodge v. West, 155

F.3d 1356 (Fed. Cir. 1998), which invalidated this Court's criterion for determining materiality for

purposes of reopening previously disallowed claims; the disapproved criterion was that in order for

"new" evidence to be determined material, "there must be a reasonable possibility that the new

evidence, when viewed in the context of all the evidence, both new and old, would change the

outcome", Colvin v. Derwinski, 1 Vet.App. 171, 174 (1991). That court held that VA's regulation

on reopening, 38 C.F.R. § 3.156(a) (1999), was a "reasonable interpretation" of the materiality

requirement in 38 U.S.C. § 5108 (requiring disallowed claims to be reopened upon the presentment

or securing of new and material evidence) and governed decisions on claims to reopen. Hodge,

155 F.3d at 1362.

On May 11, 1998, the Court vacated the December 1997 BVA decision and remanded the

service-connection matter for readjudication in accordance with Hodge, supra. The Court held:

In his brief, the Secretary responds to the Court's order and argues that this

claim is an original claim and not a claim to reopen and, therefore, that "Hodge is not

relevant". Brief (Br.) at 9-10. The appellant counters in his reply that "[a]lthough in

this most recent . . . claim of April of 1996, appellant alleged, for the first time,

exposure to [AO] as a cause of the skin disorder, this new theory of causation does
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not change the claim's legal character to an original claim". Reply at 3 (citing Bielby

v. Brown, 7 Vet.App. 260, 264-65 (1994)). 

The Court agrees with the appellant. See Bielby, supra (considering medical

treatises that "provide a new basis of authority for granting service connection" as

newly submitted evidence for purposes of reopening); see also Ashford v. Brown,

10 Vet.App. 120, 123-24 (1997) (new theory of entitlement does not constitute new

claim). In this case the appellant has simply provided an alternate theory for his

claim for direct service connection for neurodermatitis, which the Board failed to

treat accordingly. Moreover, the Court notes that in 1982 the RO had before it

medical evidence questioning the connection between AO exposure and the veteran's

skin condition (R. at 60), and, further, in its March 1992 decision (R. at 62) noted

that the veteran had had an Agent Orange examination in November 1980. (A record

of such examination does not appear in the ROA.) Finally, the veteran's April 1996

claim itself expressly stated that it pertained to the very condition that had

"previously" been "denied" because that "condition is still present". R. at 168.

The Secretary argues that this Court's precedent "'does not preclude de novo

adjudication of a claim, on essentially the same facts as a previously and finally

denied claim, where an intervening change in law or regulation has created a new

basis of entitlement to benefit'". Br. at 10 (quoting Spencer v. Brown, 4 Vet.App.

283, 289 (1993), aff'd, 17 F.3d 368 (Fed. Cir. 1994), and also citing, inter alia, Boggs

v. West, 11 Vet.App. 334, 342 (1998)). The Secretary then argues that the

promulgation of a VA regulation regarding claims based on AO exposure following

the March 1982 RO decision -- specifically 38 C.F.R. § 3.311a (1987); see also

50 Fed. Reg. 34458 (1985) -- provides for such a "new basis of entitlement or

benefit" as to which de novo adjudication is not precluded, see Spencer, supra. Br. at

10 (incorrectly citing "38 C.F.R. § 3.311(a) (1986)" and "50 Fed. Reg. 34458 (Aug.

26, 1995)"). However, 38 C.F.R. § 3.311a (1987) does not list as presumptively

service connected any of the skin conditions that the veteran has been diagnosed as

having and, therefore, does not provide a new basis for entitlement or benefit.

Similarly, as the BVA determined in the decision here on appeal, current AO

regulations also do not list the veteran's skin condition as presumptively service

connected based on AO exposure. R. at 5 ("the skin disorder which [the veteran]

currently complains of is not listed as a disease associated with exposure to [AO]",

citing 38 C.F.R. §§ 3.307(a)(6), 3.309(e) (1998)). Hence Bielby, rather than Spencer,

controls the disposition of this case.

Vaughn v. West, U.S. Vet. App. No. 98-269 (May 11, 1999) (mem. dec.).

On August 3, 1999, the appellant filed through counsel an application for $6,450.75

(including $5,975.75 in attorney fees for 45.1 hours and expenses of $475.00) under the EAJA.

Application at 1. On October 4, 1999, the Secretary filed a response in opposition, urging that the
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Court deny the application on the ground that his position was "substantially justified" because the

Court had remanded the case solely for application of Hodge, supra, and because "the state of the

law was unsettled and unclear at the time [when] the Secretary's brief arguing against remand under

Hodge was filed". Response (Resp.) at 1-3. In the alternative, the Secretary requests that the Court

reduce the amount requested. Resp. at 5-7. The appellant argues in his October 21, 1999, reply that

the Secretary's position was not "substantially justified" and that the requested fees were reasonable

"except [for] 11.9 hours claimed for preparation of the opening brief". Reply at 2, 4, 7. On

October 28, 1999, the appellant also filed a supplemental EAJA application for an additional

$1,590.00 in attorney fees for the work done in preparation and support of the EAJA application. 

This Court has jurisdiction to award reasonable attorney fees and expenses pursuant to

28 U.S.C. § 2412(d)(2)(F). The appellant's August 3, 1999, EAJA application was filed within the

30-day EAJA application period set forth in 28 U.S.C. § 2412(d)(1)(B) and has satisfied any

jurisdictional content requirements that apply because the application contained the following: (1) A

showing that, by virtue of the Court's remand, he is a prevailing party within the meaning of the

EAJA; (2) a showing that he is a party eligible for an award under the EAJA because his net worth

does not exceed $2,000,000.00; (3) an allegation that the position of the Secretary was not

substantially justified; and (4) an itemized statement of the fees and expenses sought. See 28 U.S.C.

§ 2412(d)(1)(A), (1)(B), (2)(B); Fritz v. West, 13 Vet.App. 190, 195 (1999); Chesser v. West,

11 Vet.App. 497, 499 (1998); Bazalo v. Brown, 9 Vet.App. 304, 308 (1996), rev'd on other grounds

sub nom. Bazalo v. West, 150 F.3d 1380, 1384 (Fed. Cir. 1998) (concluding that showing of net

worth not jurisdictional requirement).

This Court will award attorney fees "unless the [C]ourt finds that the position of the United

States was substantially justified". 28 U.S.C. § 2412(d)(1)(A); Stillwell v. Brown, 6 Vet.App. 291,

301 (1994). Because the appellant here has alleged, pursuant to 28 U.S.C. § 2412(d)(1)(B), that the

Secretary's position was not substantially justified (Application at 3; Reply at 1-4), the Secretary "has

the burden of proving that [his] position was substantially justified in order to defeat the appellant's

EAJA application", Stillwell, supra. In order to avoid the payment of attorney fees and expenses,

the Secretary must establish that his position was substantially justified at both the administrative

(BVA) and litigation (in this Court) stages. See Locher v. Brown, 9 Vet.App. 535, 537 (1996); ZP

v. Brown, 8 Vet.App. 303, 304 (1995).

To determine whether the Secretary has demonstrated that his position was substantially

justified during the litigation stage, the Court looks to the "circumstances surrounding the resolution

of the dispute". Stephens v. West, 12 Vet.App. 115, 118 (1999) (citing Dillon v. Brown, 8 Vet.App.

165, 167-68 (1995), Bowyer v. Brown, 7 Vet.App. 549, 553 (1995), and Carpenito v. Brown,

7 Vet.App. 534, 537 (1995)). In Stillwell, the Court noted that "'a position can be justified even

though it is not correct, and we believe it can be substantially (i.e., for the most part) justified if a

reasonable person could think it correct, that is, if it has a reasonable basis in law and fact.'"

Stillwell, 6 Vet.App. at 302 (quoting Pierce v. Underwood, 487 U.S. 552, 566 n.2 (1988)).
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As to the administrative stage, the Board's reliance upon Spencer, supra, although not correct,

was beneficial to the appellant. Even though the Court ultimately held that Bielby, supra, and not

Spencer, was controlling, "a position can be justified even though it is not correct." Stillwell, supra.

It was not prejudicial to the appellant and therefore not unreasonable for the Board to provide him

with a merits adjudication to which he was not entitled until new and material evidence was

presented. As to the Secretary's litigation position, his reliance on Spencer to defend the BVA's

action here and his contention that this was a new claim and that new and material evidence was not

required, although not correct, again, was not unreasonable underthe facts of this case. Accordingly,

the Court holds that the Secretary's position was substantially justified at both the administrative and

litigation stages. See Locher and ZP, both supra.

Upon consideration of the foregoing analysis, it is

ORDERED that the August 3, 1999, EAJA application and the October 28, 1999,

supplemental EAJA application are DENIED.

DATE: July 18, 2000 PER CURIAM.