Opinion ID: 3049466
Heading Depth: 3
Heading Rank: 7

Heading: The VA Finds Chronic Lymphocytic Leukemia to

Text: be Service-Connected in 2003, But Fails to Readjudicate Claims or Pay Retroactive Benefits On January 23, 2003, the National Academy of Sciences transmitted to the Secretary a report, “Veterans and Agent Orange: Update 2002.” The report evaluated the scientific evidence regarding the association between herbicide exposure and Chronic Lymphocytic Leukemia (CLL), and found “sufficient evidence of an association.” Disease Associated With Exposure to Certain Herbicide Agents: Chronic Lymphocytic Leukemia, 68 Fed. Reg. 14,567, 14,568 (Mar. 26, 2003). In response to the Academy’s report, on March 26, 2003 the VA issued a proposed rule, which announced that “the Secretary has determined that there is a positive association between the exposure of humans to an herbicide agent and the occurrence of CLL in humans” and that “the Secretary has determined that a presumption of service connection for CLL is warranted pursuant to 38 U.S.C. [§] 1116(b).” Id. at 14,569. NEHMER v. USDVA 8745 On October 16, 2003, the VA issued a final rule determining Chronic Lymphocytic Leukemia to be service-connected. Disease Associated With Exposure to Certain Herbicide Agents: Chronic Lymphocytic Leukemia, 68 Fed. Reg. 59,540, 59540 (Oct. 16, 2003). In that final rule, however, the VA explained its view that the Consent Decree’s requirement that the VA pay retroactive benefits when the VA establishes that a disease is service-connected does apply to benefits based on a disease for which the Secretary of Veterans Affairs establishes a presumption of service connection after September 30, 2002 [the original effective sunset date of the Agent Orange Act, 38 U.S.C. § 1116(e)].” Id. This part of the final rule echoed the VA’s opinion expressed in a separate final rule issued earlier in 2003. See Effective Dates of Benefits for Disability or Death Caused By Herbicide Exposure; Disposition of Unpaid Benefits After Death of Beneficiary, 68 Fed. Reg. 50966, 50968-70 (Aug. 25, 2003) (to be codified at 38 C.F.R. § 3.816) (stating that the “VA’s authority to issue regulatory presumptions of service connection expired on September 30, 2002,” and specifically that the Consent Decree entered by Judge Henderson did not intend to incorporate sub- sequent changes in the law, namely the extension of the VA’s authority to determine that diseases are service-connected under 38 U.S.C. § 1116(b), as set forth in the Benefits Expansion Act of 2001).4 After the VA determined that Chronic Lymphocytic Leukemia was service-connected, it failed to take any action to 4 The regulation, as codified, describes its purpose as stating the “effective-date rules required by orders of a United States district court in the class action case of Nehmer v. United States Department of Veterans’ Affairs, No. CV-86-6160 TEH (N.D. Cal.).” 38 C.F.R. § 3.816(a). The regulation provides that veterans who previously filed disability claims and are “entitled to disability compensation for a covered herbicide disease,” may receive retroactive dates of award, but the regulation defines the term “covered herbicide disease” as “a disease for which the Secretary of Veterans Affairs has established a presumption of service connection before October 1, 2002.” Id. § 3.816(b)(2), (c). 8746 NEHMER v. USDVA readjudicate the claims of veterans with that affliction, or to pay them retroactive benefits. In response, on June 4, 2004 the class plaintiffs filed a motion for an order to show cause “why [the VA] should not be held in contempt of the Court’s 1991 Final Stipulation and Order” due to its refusal to readjudicate the pertinent disability claims and to pay retroactive benefits. In a December 20, 2004 order, the district court converted the motion for an order to show cause into a motion for clarification and enforcement of the Consent Decree, because “the essence of the current motion is a request that the Court interpret, clarify, or construct particular terms of the Stip[ulation] & Order.” (noting that the “heading of plaintiffs argument is ‘Plaintiffs Merely Seek to Enforce the Stipulated Order.’ ”). In the same December 20, 2004 order, the district court rejected the VA’s contention that because 38 U.S.C. § 502 provides that the U.S. Court of Appeals for the Federal Circuit has exclusive jurisdiction to entertain direct challenges to VA regulations, it lacked subject matter jurisdiction to interpret the Consent Decree. After receiving additional briefing, on December 1, 2005 the district court granted the motion for clarification and enforcement, holding that “the terms of the Stipulation and Order shall continue in effect until expiration of the Agent Orange Act as extended.” The district court concluded that the plain language of the Consent Decree supported the veterans’ view that the Consent Decree applies to diseases determined to be service-connected after, as well as before, September 30, 2002. It found compelling Paragraph 3’s reference to 38 U.S.C. § 1116(b) of the Agent Orange Act, which requires the Secretary to issue regulations establishing service-connected diseases after receiving reports from the Academy, and its failure to refer to 38 U.S.C. § 1116(e), the sunset provision of that Act. Moreover, the district court explained that giving full effect to the Consent Decree’s retroactive benefits provision furthers the remedial purpose of the Consent Decree that we had recognized in Nehmer III. 284 F.3d at 1162-62. NEHMER v. USDVA 8747 The VA filed a timely notice of appeal from the December 1, 2005 order, and subsequently sought a stay pending appeal. On April 28, 2006, the district court denied the VA’s motion for a stay and also established a procedure for processing the claims of veterans with Chronic Lymphocytic Leukemia in accordance with the Consent Decree. On June 20, 2006, the VA filed a second notice of appeal from April 28, 2006 order, and subsequently filed a motion to consolidate the two appeals, which we granted on September 28, 2006.