Opinion ID: 2771750
Heading Depth: 2
Heading Rank: 1

Heading: Nature and Extent of the Change in the Law

Text: The first Princess Cruises factor is “the nature and extent of the change of the law.” 397 F.3d at 1364 (internal tive application of the VA’s amended regulations. Mrs. Moffitt is pro se in this appeal, and we construe her submissions liberally as a challenge to the retroactive application of the revised regulations. MOFFITT v. MCDONALD 11 quotation and citation omitted). Although Mrs. Moffitt is correct that the revised regulations prohibiting hypothetical entitlement were not in effect when she filed her claim for enhanced DIC benefits in 1999, we agree with the Secretary that the VA’s amendment to § 20.1106 and promulgation of § 3.10 “merely codified VA’s longstanding opposition to the hypothetical entitlement theory.” Sec’y Informal Br. 12. Congress created enhanced DIC benefits as part of the Veterans’ Benefits Act of 1992 for survivors of veterans who were in receipt of or were “entitled to receive” benefits for a service-connected disability that was rated totally disabling for at least eight years before death. Pub. L. No. 102-568, § 102(a)(2), 106 Stat. 4320, 4321-22 (Oct. 29, 1992). By that time, the VA General Counsel had issued a precedential opinion interpreting “entitled to receive” in a similar statute—38 U.S.C. § 1318—as the “actual receipt of total disability benefits for a minimum period of 10 years, not [merely] entitlement thereto.” Moffitt, 26 Vet. App. at 431 (quoting VA Gen. Coun. Prec. 68-90 (July 18, 1990) (alteration in original)). In that report, the “VA gave no indication that it would provide de novo review of a veteran’s previously denied claims to see if she or he hypothetically would be entitled to a total disability rating.” Id. In 1992—roughly nine months before Congress amended § 1311 to include enhanced DIC benefits—the VA promulgated 38 C.F.R. § 20.1106, which provided that: Except with respect to benefits under the provi- sions of 38 U.S.C. 1318 . . . , issues involved in a survivor’s claim for death benefits will be decided without regard to any prior disposition of those issues during the veteran’s lifetime. 38 C.F.R. § 20.1106 (1992). In our 2000 decision in Hix, we found that, because § 20.1106 specifically excluded 12 MOFFITT v. MCDONALD § 1318—but not § 1311—hypothetical entitlement claims were permitted under § 1311, but not under § 1318. 225 F.3d at 1380-81 (“We affirm the ruling of the Court of Appeals for Veterans Claims that the ‘entitled to receive’ provision of § 1311(a)(2) requires de novo determination of the veteran’s disability, upon the entirety of the record including any new evidence presented by the surviving spouse.”). 5 In 2001, the VA proposed an amendment to § 20.1106 to: make VA’s position clear that entitlement to benefits under either 38 U.S.C. 1318 or 38 U.S.C. 1311 must be based on the determinations made during the veteran’s lifetime, or challenges to such decisions on the basis of clear and unmistakable error, rather than on de novo posthumous determina- tions as to whether the veteran hypothetically could have been entitled to certain benefits if he or she had applied for them during his or her life- time. Board of Veterans’ Appeals Rules of Practice: Claim for Death Benefits by Survivor, 66 Fed. Reg. 65,861, 65,861 (Dec. 21, 2001). The amendment, which became effective in May 2002, provided that: “[e]xcept with respect to benefits under the provisions of 38 U.S.C. § 1311(a)(2), [and] 1318, . . . issues involved in a survivor’s claim for death benefits will be decided without regard to any prior disposition of those issues during the veteran’s lifetime.” Board of Veterans’ Appeals Rules of Practice: Claim for 5 As the Secretary explains, § 20.1106 did not refer to § 1311, “which, at that time, did not contain the same ‘entitled to receive’ provision found in section 1318, but instead tied DIC payments to a veteran’s military rank.” Sec’y Informal Br. 13 (citing 38 U.S.C. § 1311(a) (1991)). MOFFITT v. MCDONALD 13 Death Benefits by Survivor, 67 Fed. Reg. 16,309, 16,317 (Apr. 5, 2002) (emphasis added). On appeal, this court held that the VA reasonably construed “entitled to receive” in § 1311 and § 1318 to exclude “new claims filed posthumously by a veteran’s survivor, that is, claims where no claim had been denied and was not subject to reopening.” NOVA II, 314 F.3d at 1380. We remanded, however, for further rulemaking proceedings so that the VA could harmonize the implementing regulations for § 1311(a)(2) and § 1318. Id. at 1381. This court’s remand in NOVA II prompted the VA to promulgate 38 C.F.R. § 3.10(f)(3), which interpreted the phrase “entitled to receive” in § 1311(a)(2) to prohibit hypothetical entitlement claims. See Kernea, 724 F.3d at 1380. Specifically, § 3.10(f)(3) defines “entitled to receive” as used in § 1311(a)(2) to mean “that the veteran filed a claim for disability compensation during his or her lifetime and” either: (1) “would have received total disability compensation for [the eight years prior to death] but for [CUE] . . . in a decision on a claim filed during the veteran’s lifetime;” or (2) “service department records . . . provide[] a basis for reopening a claim finally decided during the veteran’s lifetime” and retroactively awarding a total disability rating for the eight years prior to death. 38 C.F.R. § 3.10(f)(3)(i-ii). Section 3.10 became effective December 2, 2005, and applies to new claims filed after that date, as well as claims like Mrs. Moffitt’s, which were pending before the VA prior to the effective date of the rule. See 70 Fed. Reg. at 72,212. This court subsequently affirmed § 3.10 as a reasonable interpretation of statutory authority. See Nat’l Org. of Veterans’ Advocates, Inc. v. Sec’y of Veterans Affairs, 476 F.3d 872, 876-77 (Fed. Cir. 2007) (“NOVA III”) (finding that the VA’s regulations implementing both 14 MOFFITT v. MCDONALD § 1311 and § 1318—38 C.F.R. § 3.10(f)(3) and 38 C.F.R. § 3.22(b), respectively—were reasonable). As the Veterans Court explained, we have consistently held that the VA’s amended regulations barring hypothetical entitlement claims can be applied retroactively to claims filed before the regulatory amendments took effect. See Rodriguez, 511 F.3d at 1156 (holding that the amended version of 38 C.F.R. § 3.22 “may be applied to claims for DIC benefits filed by survivors before the amendment took effect”); Tarver v. Shinseki, 557 F.3d 1371, 1374-77 (Fed. Cir. 2009) (finding that 38 C.F.R. § 3.22 applies retroactively to previously-filed DIC claims). Relevant to this appeal, we recently found that 38 C.F.R. § 3.10(f)(3) applied retroactively to bar a claim for enhanced DIC benefits under § 1311(a)(2) based on the hypothetical entitlement theory. Kernea, 724 F.3d at 1379-82. As noted, before the Veterans Court, Mrs. Moffitt argued that her case is distinguishable from Kernea because she filed her claim for enhanced DIC benefits in August 1999, before the VA took steps to prohibit the use of hypothetical entitlement. In contrast, by the time Ms. Kernea filed her claim in 2003, “the VA had amended § 20.1106 to explicitly refer to § 1311 and thereby bring the interpretation of § 1311(a)(2) in line with that of § 1318.” Kernea, 724 F.3d at 1379. As we recognized in Tarver, however, the timing of a surviving spouse’s DIC claim “is irrelevant to the first Princess Cruises factor—the nature and extent of the change in the law.” Tarver, 557 F.3d at 1375. And in Rodriguez, we acknowledged that “many claimants who would have had a claim for DIC benefits” under precedent accepting the hypothetical entitlement theory “no longer have a claim due to the [VA’s] amendment.” 511 F.3d at 1153. The “analysis, however, cannot end there.” Id. Instead, in both Tarver and Rodriguez, we found the regulatory amendments at issue insignificant because they “merely reinstated the [VA’s] earlier interpretation” of the phrase MOFFITT v. MCDONALD 15 “entitled to receive” in § 1318. Tarver, 557 F.3d at 1375 (citing Rodriguez, 511 F.3d at 1154). We agree with the Veterans Court that the VA’s amendment to § 20.1106 and promulgation of § 3.10(f)(3) merely “reiterate VA’s long-standing opposition to the use of hypothetical entitlement.” Moffitt, 26 Vet. App. at 431 (internal quotation and citation omitted). The 1990 VA General Counsel opinion, which interpreted “entitled to receive” as requiring the “actual receipt” of benefits during a veteran’s lifetime, coupled with the VA’s regulatory amendments, support the Veterans Court’s conclusion that the “Secretary has consistently disfavored hypothetical entitlement.” Id. And, as the Secretary argues, “[a]lthough the hypothetical entitlement theory was cognizable for a brief period of time following Hix, that interpretation was not well settled, not of long standing, and was never expressly endorsed or adopted by VA.” Sec’y Informal Br. 18. Accordingly, the first Princess Cruises factor weighs in favor of applying amended § 20.1106 and § 3.10(f)(4) to Mrs. Moffitt’s claim.