Court Opinion

ID: 6500700
Source: CourtListenerOpinion
Date Created: 2022-07-18 15:00:39.758634+00
Date Added: 2024-06-11T09:17:23.815591
License: Public Domain

Case: 21-2032   Document: 34     Page: 1   Filed: 07/18/2022

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

                  LOUIS C. MORRIS,
                   Claimant-Appellant

                            v.

       DENIS MCDONOUGH, SECRETARY OF
              VETERANS AFFAIRS,
               Respondent-Appellee
              ______________________

                       2021-2032
                 ______________________

     Appeal from the United States Court of Appeals for
 Veterans Claims in No. 19-3376, Judge Coral Wong Pi-
 etsch.
                 ______________________

                 Decided: July 18, 2022
                 ______________________

    KENNETH M. CARPENTER, Law Offices of Carpenter
 Chartered, Topeka, KS, argued for claimant-appellant.

     EVAN WISSER, Commercial Litigation Branch, Civil Di-
 vision, United States Department of Justice, Washington,
 DC, argued for respondent-appellee. Also represented by
 BRIAN M. BOYNTON, ERIC P. BRUSKIN, PATRICIA M.
 MCCARTHY; BRIAN D. GRIFFIN, JONATHAN KRISCH, Office of
 General Counsel, United States Department of Veterans
 Affairs, Washington, DC.
                  ______________________
Case: 21-2032    Document: 34     Page: 2    Filed: 07/18/2022

 2                                     MORRIS   v. MCDONOUGH

  Before MOORE, Chief Judge, TARANTO and STARK, Circuit
                        Judges.
 TARANTO, Circuit Judge.
      In 1970, Vietnam War veteran Louis C. Morris applied
 to the Veterans Administration (now the Department of
 Veterans Affairs, hereinafter “VA”) for disability benefits.
 Later that year, he received two decisions from a VA re-
 gional office: In August 1970, VA denied his claim for ben-
 efits based on a service-connected condition; and in
 November 1970, VA granted his claim for a pension based
 on a non-service-connected condition. Of importance here,
 in 2014, after a number of other filings and adjudications,
 Mr. Morris filed with VA a request for revision of the No-
 vember 1970 rating decision on the grounds of clear and
 unmistakable error. He argued that VA, in the November
 1970 decision, had implicitly denied his claim for benefits
 based on a service-connected condition and, in so doing, vi-
 olated 38 C.F.R. § 3.303(b). Both the VA regional office
 and, on appeal, the Board of Veterans’ Appeals determined
 that there was no such clear and unmistakable error.
      Mr. Morris then appealed to the Court of Appeals for
 Veterans Claims (Veterans Court). Before that court, Mr.
 Morris presented only a single argument: that a September
 1970 notice from VA—giving notice of the August 1970 rat-
 ing decision—was constitutionally inadequate under the
 Due Process Clause of the Fifth Amendment. Mr. Morris
 acknowledged that he had not presented this argument to
 the Board, but he contended that the Veterans Court was
 obligated to consider this constitutional question in the
 first instance under 38 U.S.C. § 7261(a)(1). The Veterans
 Court disagreed and exercised its discretion, under our is-
 sue-exhaustion precedents, to decline to entertain the ar-
 gument presented for the first time on appeal. Morris v.
 McDonough, No. 19-3376, 2021 WL 748615, at *5–6 (Vet.
 App. Feb. 26, 2021).
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 MORRIS   v. MCDONOUGH                                      3

     Mr. Morris appeals. We reject Mr. Morris’s contention
 that, as a matter of law, the Veterans Court lacked discre-
 tion to apply an issue-exhaustion analysis to decide
 whether to hear Mr. Morris’s new argument on appeal. Be-
 cause Mr. Morris does not challenge the Veterans Court’s
 application of that analysis, we affirm the dismissal of the
 appeal by the Veterans Court.
                               I
      Louis Morris served in the U.S. Army from January
 1965 to January 1968. In May 1970, he filed a claim for
 disability benefits under 38 U.S.C. § 310 (1970) (now 38
 U.S.C. § 1110), alleging a disability based on a nervous con-
 dition connected to his service. In August 1970, the VA re-
 gional office issued a rating decision, which denied service-
 connected-disability compensation for the nervous condi-
 tion but deferred consideration of a claim for a non-service-
 connected pension available to disabled veterans that
 served during a time of war under 38 U.S.C. § 521 (1970)
 (now 38 U.S.C. § 1521). In September 1970, the regional
 office sent Mr. Morris a notice stating that the evidence
 submitted did not meet the requirements to establish enti-
 tlement to service-connected-disability compensation. In
 the notice, VA indicated the reason as follows: “Your other
 nervous condition is a constitutional or developmental con-
 dition, and not a disability under the law.” J.A. 25. Two
 months later, in November 1970, and following a Septem-
 ber 30, 1970 medical examination, the regional office is-
 sued another rating decision labeled “Reconsideration of
 original claim received 5-22-70” that granted non-service-
 connected pension benefits for “[s]chizophrenic reaction,
 paranoid type.” J.A. 26–27.
     In June 2005, Mr. Morris filed a claim for compensation
 based on service-connected post-traumatic stress disorder.
 Later that year, the regional office granted the claim and
 assigned a disability rating of 30%. Eventually, and in
 stages, after appeals to the Board and to the Veterans
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 4                                     MORRIS   v. MCDONOUGH

 Court, Mr. Morris ended up with a rating of total disability
 effective June 8, 2005.
     Although the benefits from those times going forward
 are not in dispute, Mr. Morris has for many years been
 seeking a still earlier effective date for service-connected-
 disability compensation—all the way back, in fact, to May
 22, 1970, when he filed his original claim for compensation
 due to a nervous condition. In August 2007, he sought a
 September 1970 effective date by asserting (in a filing with
 the regional office) that VA medical records from Septem-
 ber 1970 “constituted an informal claim to reopen the VA’s
 August 1970 rating decision which denied Mr. Morris com-
 pensation for a nervous disorder” that had never been ad-
 judicated by VA and thus remained pending. J.A. 56. In
 November 2008, Mr. Morris asserted (in another filing with
 the regional office) that the May 1970 claim itself remained
 pending, because the September 1970 notice did not comply
 with 38 C.F.R. § 3.103 (1970), which, he said, “required
 that the VA provide specific information to claimants.” J.A.
 76. According to Mr. Morris, the September 1970 notice
 was inadequate under the regulation because it “did not
 explain the reason the VA denied Mr. Morris’s May 1970
 claim except to indicate that his post service disability was
 a non-compensable condition.” Id. The regional office, the
 Board, and ultimately the Veterans Court each rejected
 that argument, and Mr. Morris did not appeal the Veterans
 Court’s decision to this court. See Morris Opening Br. 5.
      In July 2014, Mr. Morris made another effort to secure
 a 1970 effective date, requesting revision of the November
 1970 rating decision of the regional office on the grounds of
 clear and unmistakable error. See 38 U.S.C. § 5109A; see
 also George v. McDonough, 142 S. Ct. 1953, 1958 (2022)
 (discussing “clear and unmistakable error” provisions). On
 its face, that decision simply states that VA was granting
 Mr. Morris entitlement to the non-service-connected-disa-
 bility pension. J.A. 26–27. But Mr. Morris asserted that,
 in the decision, VA had “implicitly denied” the original
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 MORRIS   v. MCDONOUGH                                      5

 claim for disability compensation based on a service-con-
 nected nervous disorder. J.A. 191. The clear and unmis-
 takable error, he asserted, was that VA had misapplied 38
 C.F.R. § 3.303(b), which relates to determination of service
 connection for chronic diseases. J.A. 192–93. The regional
 office, and then the Board, rejected his argument, finding
 no clear and unmistakable error. See J.A. 224–25; J.A.
 246–52.
      Mr. Morris appealed to the Veterans Court. There, he
 made only an argument that he had not presented to the
 Board. He argued that, under the Fifth Amendment’s Due
 Process Clause, the September 1970 notice letter was “con-
 stitutionally inadequate because it failed to clearly and ex-
 plicitly inform him of VA’s decision to deny him service-
 connected compensation for a compensable nervous condi-
 tion.” See Morris, 2021 WL 748615, at *4 (quoting Mr. Mor-
 ris’s brief). He acknowledged that he was not challenging
 the Board’s decision denying the request for revision of the
 November 1970 rating decision. But he argued that the
 court had to address his constitutional challenge to the
 September 1970 notice in the first instance because he
 could not have presented the challenge to the regional of-
 fice (i.e., the VA Secretary) or the Board and because the
 Veterans Court was required under 38 U.S.C. § 7261(a)(1)
 to decide, when presented, all relevant questions of law.
 Appellant’s Br. at 13–14, Morris v. McDonough, No. 19-
 3376 (Vet. App. Jan. 30, 2020).
     The Veterans Court dismissed the appeal. It observed
 that it had the discretion to decide on a case-by-case basis
 whether to address a newly presented argument or to de-
 cline to do so “on the ground that the veteran did not ex-
 haust his or her administrative remedies before appealing
 to the [Veterans] Court.” Morris, 2021 WL 748615, at *5. 1

     1  We understand the Veterans Court’s reference to
 exhaustion of administrative remedies in this case to be a
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 6                                     MORRIS   v. MCDONOUGH

 Weighing the interests of Mr. Morris against the institu-
 tional interests served by the doctrine of issue exhaustion,
 the Veterans Court concluded that issue exhaustion should
 apply and thus declined to hear Mr. Morris’s constitutional
 argument. Id. at *5–6.
     Mr. Morris timely appeals. We have jurisdiction under
 38 U.S.C. § 7292(a) to address Mr. Morris’s only conten-
 tion, which presents a legal issue we resolve de novo—
 namely, whether the Veterans Court is required by statute
 to decide all constitutional issues presented to it, regard-
 less of whether they were first presented to the Board.
                              II
      We answer that question in the negative. We conclude
 that the Veterans Court correctly determined that it had
 discretion, under this court’s issue-exhaustion precedents,
 to decline to hear Mr. Morris’s argument presented for the
 first time on appeal to that court.
     In Maggitt v. West, 202 F.3d 1370 (Fed. Cir. 2000), we
 explained that “[w]hile the Veterans Court may hear legal
 arguments raised for the first time with regard to a claim
 that is properly before the court, it is not compelled to do
 so in every instance.” Id. at 1377. Rather, it should deter-
 mine “whether the interests of the individual weigh heavily
 against the institutional interests” in “protect[ing] agency
 administrative authority” and “promot[ing] judicial effi-
 ciency.” Id. Those institutional interests apply to consti-
 tutional arguments as well as to statutory ones, and we
 have approved application of the issue-exhaustion doctrine

 reference to issue exhaustion. See generally Carr v. Saul,
 141 S. Ct. 1352, 1358 n.2 (2021) (discussing distinction be-
 tween remedy exhaustion and issue exhaustion). We, like
 the Veterans Court, have not always been precise in mak-
 ing the distinction. See, e.g., Maggitt v. West, 202 F.3d
 1370, 1377 (Fed. Cir. 2000).
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 MORRIS   v. MCDONOUGH                                         7

 to constitutional arguments. See, e.g., Ledford v. West, 136
 F.3d 776, 780 (Fed. Cir. 1998) (requiring claimant to pre-
 sent both constitutional and statutory challenges to the
 Board before presenting them to the Veterans Court); Mag-
 gitt, 202 F.3d at 1378–79 (remanding to the Veterans Court
 to make a case-specific determination whether to invoke
 the issue-exhaustion requirement against constitutional
 and statutory arguments).
     Mr. Morris argues that 38 U.S.C. § 7261(a)(3)(B) is to
 the contrary, requiring the Veterans Court to decide every
 constitutional issue presented to it. That conclusion would
 contradict our precedents discussed above. And the statute
 does not support it.
     Section 7261, titled “Scope of review,” provides, in per-
 tinent part:
     (a) In any action brought under this chapter, the
     Court of Appeals for Veterans Claims, to the extent
     necessary and when presented, shall— . . . (3) hold
     unlawful and set aside decisions . . . adopted by . . .
     the Board of Veterans’ Appeals . . . found to be—
     . . . (B) contrary to constitutional right . . . .
 38 U.S.C. § 7261. That command tells the Veterans Court
 what judgments to issue—it shall “hold unlawful and set
 aside decisions” of the Board—if it finds the decisions to be
 “contrary to constitutional right.” Id. It does not tell the
 Veterans Court when it is obligated to make such a finding;
 specifically, it does not tell that court that it always must
 address an argument of constitutional right, even one not
 presented to the Board or addressed in the Board’s deci-
 sion.
     The absence of a command to go beyond matters pre-
 sented to or decided by the Board is reinforced by other lan-
 guage of the subsection. The provision directs the Veterans
 Court, “to the extent necessary to its decision and when
 presented,” to, among other things, “decide all relevant
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 8                                      MORRIS   v. MCDONOUGH

 questions of law.” 38 U.S.C. § 7261(a)(1). But Mr. Morris
 does not rely on that broad language at all, thus implicitly
 recognizing that § 7261(a) is not to be read as overriding all
 traditional rules governing the raising of new issues on ap-
 peal. The “to the extent necessary to its decision” language
 suggests otherwise: Addressing a constitutional issue
 never presented to or decided by the Board is hardly “nec-
 essary” to the Veterans Court’s exercise of its “exclusive ju-
 risdiction to review decisions of the Board.” 38 U.S.C.
 §§ 7261(a), 7252(a). Indeed, we have specifically pointed to
 § 7252(a) as supporting an exhaustion requirement. See
 Ledford, 136 F.3d at 779–80; Scott v. McDonald, 789 F.3d
 1375, 1379 (Fed. Cir. 2015) (citing Ledford, “we have held
 that the statute, 38 U.S.C. § 7252(a), requires issue ex-
 haustion before the Board in appropriate circumstances”).
     Moreover, the text of § 7261(a)(3) specifically under-
 mines Mr. Morris’s argument. That text hardly calls out
 constitutional issues for distinctive treatment. It charges
 the Veterans Court, to the extent necessary to its decision
 and when presented, to
     hold unlawful and set aside decisions . . . found to
     be—
         (A) arbitrary, capricious, an abuse of dis-
         cretion, or otherwise not in accordance with
         law;
         (B) contrary to constitutional right, power,
         privilege, or immunity;
         (C) in excess of statutory jurisdiction, au-
         thority, or limitations, or in violation of a
         statutory right; or
         (D) without observance of procedure re-
         quired by law . . . .
 38 U.S.C. § 7261(a)(3). Given the parallel treatment of
 these several potential Board errors, Mr. Morris’s reading
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 MORRIS   v. MCDONOUGH                                       9

 of the language of § 7261(a)(3)(B) would apply equally to all
 the non-constitutional errors listed in § 7261(a)(3)(A), (C),
 and (D), essentially (if not completely) eliminating the abil-
 ity of the Veterans Court to require exhaustion of issues
 before the Board, as Mr. Morris’s counsel acknowledged at
 oral argument, Oral Arg. at 8:30–9:25. Mr. Morris has sup-
 plied no sound basis for such a result, which is contrary to
 our precedents recognizing that issue exhaustion is availa-
 ble to the Veterans Court.
      Mr. Morris seeks support for his position in this court’s
 decision in In re Bailey, 182 F.3d 860 (Fed. Cir. 1999), but
 we do not find such support. In Bailey, we did not address
 38 U.S.C. § 7261 or the Veterans Court’s ability to rely on
 exhaustion. Rather, we analyzed 38 U.S.C. § 7292, which
 governs our jurisdiction to review Veterans Court deci-
 sions. And we concluded that the language of § 7292 gave
 us jurisdiction to review “free-standing” constitutional
 questions that did not stem from the validity or interpreta-
 tion of a statute or regulation. Bailey, 182 F.3d at 867.
 That case has no applicability here, in a case involving a
 different statute, a different reviewing body, and the doc-
 trine of issue exhaustion.
     Mr. Morris also relies on the Supreme Court’s decision
 in Carr v. Saul, 141 S. Ct. 1352 (2021), but we do not agree
 that Carr governs here. The Supreme Court held in Carr
 that persons claiming Social Security disability benefits
 could assert in district court the unconstitutionality (under
 the Appointments Clause) of the appointment of their as-
 signed administrative law judges (ALJs) even though the
 claimants did not present that challenge to the ALJs them-
 selves. Id. at 1356. The Supreme Court stressed that it
 was holding only that “a judicially created issue-exhaus-
 tion requirement” was inapplicable, because the govern-
 ment conceded that exhaustion in the setting at issue there
 had no statutory or regulatory foundation. Id. at 1358 (em-
 phasis added). As noted above, we have found the
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 10                                       MORRIS   v. MCDONOUGH

 availability of exhaustion in the setting now before us to be
 rooted in the statute.
      But even aside from that distinction, we conclude that
 Carr’s holding does not support the categorical rule Mr.
 Morris advances. That is so even though one similarity in
 context exists: The Supreme Court relied on the non-adver-
 sarial nature of ALJ proceedings at issue there as one fac-
 tor against exhaustion, id. at 1358–60, and the Board
 proceedings at issue here are also non-adversarial, see An-
 drews v. Nicholson, 421 F.3d 1278, 1283–84 (Fed. Cir.
 2005) (noting that such proceedings were non-adversarial
 yet nonetheless permitting a limited issue-exhaustion re-
 quirement). The Supreme Court in Carr did not state its
 holding in terms applicable to all constitutional issues in
 appeals from all non-adversarial proceedings. Rather, the
 Court gave decisive weight to two considerations: that the
 particular constitutional issue, i.e., the Appointments
 Clause issue, was a “structural” one, falling outside the
 usual subject matter of the agency adjudicators’ decision-
 making; and that it was futile to challenge the validity of
 the ALJs before those same ALJs. Id. at 1360–62. Here,
 the constitutional issue is not a “structural” one, but, ra-
 ther, a due process issue specific to Mr. Morris’s case—a
 characteristic that the Supreme Court recognized could
 cause the exhaustion analysis to come out the other way.
 See id. at 1360 n.5 (“Outside the context of Appointments
 Clause challenges, such as in the sphere of routine objec-
 tions to individual benefits determinations, the scales
 might tip differently.”). And it is a type of issue familiar to
 the Board, which routinely deals with questions of notice.
 See, e.g., Edwards v. Shinseki, 582 F.3d 1351, 1353 (Fed.
 Cir. 2009); MacPherson v. Shinseki, 525 F. App’x 934, 936
 (Fed. Cir. 2013) (non-precedential). Additionally, the
 Board, had it heard the due process argument, could have
 found the notice constitutionally inadequate and awarded
 an earlier effective date, see 38 U.S.C. § 7104(a) (“Decisions
 of the Board shall be based . . . upon consideration of all . . .
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 MORRIS   v. MCDONOUGH                                     11

 applicable provisions of law and regulation.”), so it would
 not have been futile to bring the argument first to the
 Board. For these reasons, we decline to read Carr as up-
 ending our well-established precedents and eliminating
 the exhaustion requirement before the Board.
     The Veterans Court here considered the institutional
 interests and weighed them against Mr. Morris’s interest.
 Morris, 2021 WL 748615, at *5–6. As the Secretary ob-
 serves, Sec’y Br. 22, Mr. Morris does not challenge that
 analysis here, see Morris Reply Br. 14 (“[T]he question of
 law presented by Mr. Morris’s appeal . . . does not ask this
 Court to review the Veterans Court’s application of the doc-
 trine of issue exhaustion.”). Mr. Morris argues only that
 the Veterans Court was required to address the constitu-
 tional issue before it. Because we reject that argument,
 there is nothing further for us to decide.
                             III
     For the foregoing reasons, we affirm the dismissal of
 the appeal by the Veterans Court.
     The parties shall bear their own costs.
                         AFFIRMED