Court Opinion

ID: 9498118
Source: CourtListenerOpinion
Date Created: 2023-08-05 17:08:41.433535+00
Date Added: 2024-06-11T17:58:37.797278
License: Public Domain

MAYER, Circuit Judge,
dissenting.
The United States Court of Appeals for Veterans Claims (‘Veterans’ Court”) denied Monroe White’s Equal Access to Jus*1318tice Act (“EAJA”) application because the Department of Veterans Affairs’ (‘VA’s”) position at the administrative and litigation stages was substantially justified. White v. Principi 18 Vet.App. 539 (Vet.App.2004). Because the Veterans’ Court erred in its analysis by failing to consider the significance of the VA’s adoption and reliance upon a regulation that was facially invalid, I would reverse.
White filed an appeal to the Veterans’ Court following an October 2002 Board of Veterans’ Appeals (“board”) decision denying his 1993 claim for service connection of a back injury. The board’s decision weighed evidence not previously considered by the agency of original jurisdiction (“AOJ”). As a result, on August 27, 2003, the Veterans’ Court vacated the board’s decision and remanded for adjudication consistent with our decision in Disabled American Veterans v. Secretary of Veterans Affairs, 327 F.3d 1339 (Fed.Cir.2003) (“DAV”). White v. Principi, 18 Vet.App. 420 (Vet.App.2003).
DAV addressed the validity of 38 C.F.R. § 19.9(a)(2),1 which permitted the board to consider evidence not before the AOJ. Analyzing the regulation, we held “that 38 C.F.R. § 19.9(a)(2) is invalid because, in conjunction with the amended rule codified at 38 C.F.R. § 20.1304, it allows the Board to consider additional evidence without having to remand the case to the AOJ for initial consideration and without having to obtain the appellant’s waiver.” DAV, 327 F.3d at 1341. We based this decision on the fact that “Congress unambiguously addressed this issue in 38 U.S.C. § 7104(a) by decreeing that ‘[a]ll questions in a matter which ... is subject to decision by the Secretary shall be subject to one review on appeal to the Secretary.’ ” Id. at 1347 (quoting 38 U.S.C. § 7104(a) (2000)). Section 19.9(a)(2) ignored the statute by allowing the board to consider evidence not before the AOJ, which precluded the claimant from at least one appeal to the Secretary. Thus, we concluded that the regulation promulgated by VA was facially inconsistent with 38 U.S.C. § 7104(a) and invalid. Id. at 1346-47.
The Veterans’ Court committed legal error in this case by limiting the record to judicial precedent existing at the time the Secretary adopted his position, and by failing to consider the significance of the unambiguous language of a controlling statute. The “EAJA authorizes the payment of fees to a prevailing party in an action against the United States; the Government may defeat this entitlement by showing that its position in the underlying litigation ‘was substantially justified.’ ” Scarborough v. Principi 541 U.S. 401, 405, 124 S.Ct. 1856, 158 L.Ed.2d 674 (2004). “Whether or not the position of the United States was substantially justified shall be determined on the basis of the record (including the record with respect to the action or failure to act by the agency upon which the civil action is based) which is made in the civil action for which fees and other expenses are sought.” 28 U.S.C. § 2412(d)(1)(B) (2000). The governmental action that formed the basis of the remand in this ease was the Secretary’s promulgation of a facially invalid regulation. The Veterans’ Court reasoned that because our DAV decision was a case of first impression and because there had been no “prior adverse reaction” to application of the regulations at issue,' it could not be said that the Secretary was unreasonable in promulgating section 19.9(a)(2).
*1319The actions or positions taken by VA that are contrary to statute must be weighed as part of the record in the overall determination of whether the Secretary’s position was “substantially justified.” When the Secretary adopts and relies upon a regulation that adversely affects a claimant’s rights, and that regulation subsequently fails under the first prong of Chevron2 because it is facially invalid, the government bears a heavy burden to later prove that its position was “substantially justified” based upon the invalid regulation. “Substantially justified” means “justified to a degree that could satisfy a reasonable person.” Pierce v. Underwood, 487 U.S. 552, 565, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988). A reasonable person would weigh the Secretary’s conduct — 'not only during adjudication proceedings, but also at the outset — in the promulgation of a regulation that impinges on the substantive rights of veterans. When the Secretary chooses to ignore Congress’ intent by adopting a regulation contrary to law, the VA cannot then hide behind the lack of a “prior adverse reaction” as the only support for its actions. In doing so, his position was not substantially justified.

. This version of 38 C.F.R. § 19.9(a)(2) became effective February 22, 2002. See Board of Veterans’ Appeals: Obtaining Evidence and Curing Procedural Defects Without Remanding, 67 Fed.Reg. 3099-3100 (Jan. 23, 2002).

. The first prong of the Chevron analysis asks "whether Congress has directly spoken to the precise question at issue.” Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837. 842. 104 S.Ct. 2778. 81 L.Ed.2d 694 (1984). If so, courts, as well as the agency, must give effect to the unambiguously expressed intent of Congress.” Id. at 843, 104 S.Ct. 2778.