Court Opinion

ID: 3049466
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:27:30.114565+00
Date Added: 2024-06-11T11:49:20.458720
License: Public Domain

FOR PUBLICATION
 UNITED STATES COURT OF APPEALS
      FOR THE NINTH CIRCUIT

BEVERLY NEHMER; CLAUDE                
WASHINGTON; LINDA
WAGENMAKERS; ROBERT FAZIO;
GEORGE CLAXTON; JULIO GONZALES;
PAUL R. JENSEN; WILLIAM MADDEN;
DAVID MAIER; BRUCE MILLER;                  No. 06-15179
VIETNAM VETERANS OF AMERICA,                 D.C. No.
              Plaintiffs-Appellees,       CV-86-06160-TEH
                v.
UNITED STATES DEPARTMENT OF
VETERANS AFFAIRS,
             Defendant-Appellant.
                                      

BEVERLY NEHMER; CLAUDE                
WASHINGTON; LINDA
WAGENMAKERS; ROBERT FAZIO;
GEORGE CLAXTON; JULIO GONZALES;
PAUL R. JENSEN; WILLIAM MADDEN;             No. 06-16164
DAVID MAIER; BRUCE MILLER;
VIETNAM VETERANS OF AMERICA,                 D.C. No.
                                          CV-86-06160-TEH
              Plaintiffs-Appellees,
                                             OPINION
                v.
UNITED STATES DEPARTMENT OF
VETERANS AFFAIRS,
             Defendant-Appellant.
                                      
       Appeal from the United States District Court
           for the Northern District of California
      Thelton E. Henderson, District Judge, Presiding

                           8731
8732                 NEHMER v. USDVA
                   Argued and Submitted
         April 18, 2007—San Francisco, California

                    Filed July 19, 2007

       Before: Stephen Reinhardt, John T. Noonan, and
             Milan D. Smith, Jr., Circuit Judges.

                Opinion by Judge Reinhardt
8734                 NEHMER v. USDVA

                        COUNSEL

Peter D. Keisler, Assistant Attorney General, William Kanter,
Attorney, and John S. Koppel (argued), Attorney, Civil Divi-
sion, United States Department of Justice, Washington, D.C.,
for the defendant-appellant.
                          NEHMER v. USDVA                            8735
Kevin V. Ryan, United States Attorney, San Francisco, Cali-
fornia, for the defendant-appellant.

Barton F. Stichman (argued), National Veterans Legal Ser-
vices Program, Washington, D.C., for the plaintiffs-appellees.

Linda S. Peterson and Laboni A. Hoq, Sidley Austin LLP,
Los Angeles, California, for the plaintiffs-appellees.

                              OPINION

REINHARDT, Circuit Judge:

   This case involves our government’s treatment of its veter-
ans who contracted serious ailments as a result of their expo-
sure to Agent Orange in the course of the military’s use of
that toxic chemical as a defoliant during the Vietnam war. It
is a disturbing story, and the performance of the United States
Department of Veterans Affairs (VA) has contributed sub-
stantially to our sense of national shame.1

   The issue before us on this occasion is a technical one. But
it is symbolic of the problems that have plagued a significant
group of veterans who deserve to receive our foremost care
and attention. The present question is whether the District
Court, in a clarification and enforcement order issued in 2005,
reasonably interpreted the earlier court-approved Stipulation
and Order (sometimes referred to as “Consent Decree”) that
settled a class action lawsuit brought by veterans of the Viet-
nam war (sometimes referred to as “plaintiff class” or “class
plaintiffs”).
  1
   At the inception of this class action lawsuit in 1986, the defendant was
the United States Veterans’ Administration. In 1988, Congress rede-
signated the United States Veterans’ Administration as the Department of
Veterans Affairs, effective March 15, 1989. The Department of Veterans
Affairs Act of 1988, Pub. L. No. 100-527, §§ 2 & 18, 102 Stat. 2635
(1988).
8736                  NEHMER v. USDVA
   In 1989, the veterans successfully challenged a regulation
of the VA that imposed an erroneous standard for determining
which diseases were associated with dioxin. Congress there-
upon enacted new legislation, the Agent Orange Act of 1991,
Pub. L. No. 102-4, 105 Stat. 11 (1991), under which veterans
who served in Vietnam and later suffer from such diseases
receive a presumption that their ailments are connected to
their exposure to Agent Orange in Vietnam. The dioxin-
related diseases are deemed to be “service-connected,” and
the veterans qualify for disability benefits. The ensuing 1991
Stipulation and Order provides that as soon as the VA issues
new determinations designating particular diseases as
“service-connected,” it must readjudicate the claims of veter-
ans suffering from them if their previously filed claims were
denied or are still pending, and must then pay them retroac-
tive benefits. Nehmer v. Veterans’ Admin., 284 F.3d 1158,
1161-62 (9th Cir. 2002) (Nehmer III).

   In 2003, the VA issued a regulation finding Chronic Lym-
phocytic Leukemia to be a disease that was associated with
dioxin and thus “service-connected,” but the VA did not read-
judicate the prior claims of Vietnam veterans suffering from
that ailment. Nor did it pay them retroactive benefits. The rea-
son it offered for its failure to follow the provisions of the
Consent Decree was that in its view the decree does not apply
to diseases that it determines to be “service-connected” after
September 30, 2002, the original sunset date of the Agent
Orange Act of 1991. In 2004, the plaintiff class, disputing this
interpretation, filed a motion that the district court construed
as a motion for clarification and enforcement of the decree. In
2005, the district court rejected the VA’s interpretation and
granted the veterans’ motion. Because we conclude that the
district court’s construction of the decree is not only reason-
able but correct, and that our long-suffering veterans are pres-
ently entitled to the benefits at issue, we affirm.
                      NEHMER v. USDVA                     8737
I.    Factual and Procedural Background

     A.   Agent Orange

   “Agent Orange is a chemical defoliant used by the United
States Armed Forces in Vietnam to clear dense jungle land
during the war. It contains the toxic substance dioxin. Since
its use, Agent Orange has been statistically linked with the
occurrence of many diseases in those exposed, including pros-
tate cancer. For more than fifteen years [now, for more than
twenty years], veterans suffering from diseases they believe to
have been caused by Agent Orange have struggled with the
United States for compensation.” Nehmer III, 284 F.3d at
1160 (citing In Re Agent Orange Prod. Liab. Litig., 818 F.2d
194 (2d Cir. 1987); Nehmer v. U.S. Veterans Admin., 712 F.
Supp. 1404 (N.D. Cal. 1989) (“Nehmer I”); Nehmer v. U.S.
Veterans Admin., 32 F. Supp. 2d 1175 (N.D. Cal. 1999)
(“Nehmer II ”)).

     B.   The Dioxin Act and the Challenge to the VA
          Regulations Limiting the Number of Service-
          Connected Diseases

   The class action of which these proceedings are a part was
initially filed against the VA in 1986 by Vietnam veterans
who challenged a VA regulation, 38 C.F.R. § 3.311, govern-
ing their eligibility for disability benefits based on diseases
associated with exposure to Agent Orange. Nehmer III, 284
F.3d at 1160; Nehmer I, 712 F. Supp. at 1408-09. The veter-
ans claimed that the regulation did not comply with the Veter-
ans’ Dioxin and Radiation Exposure Compensation Standards
Act of 1984, Pub. L. No. 98-542, 98 Stat. 2725 (1984)
(“Dioxin Act”). Nehmer I, 712 F. Supp. at 1408-09.

   The Dioxin Act “dramatically alter[ed] the process govern-
ing [veterans’] Agent Orange disability claims.” Id. at 1407.
“Rather than have the VA determine in individual adjudica-
tory proceedings whether a particular veteran’s claimed dis-
8738                  NEHMER v. USDVA
ease was caused by Agent Orange exposure, the Act
authorize[d] the Administrator of the VA [ ] to conduct rule-
making to determine which diseases will be deemed service
connected for all diseases claimed to be caused by Agent
Orange exposure.” Id. at 1407-08.

   The regulation implementing the Dioxin Act provided that
any veteran who served in Vietnam “shall be presumed to
have been exposed to a herbicide containing dioxin while in
Vietnam.” 38 C.F.R. § 3.311a(b) (1988). But it also stated that
only a single disease — chloracne — “is sufficient to estab-
lish service-connection for resulting disability.” Id.
§ 3.311a(c); see also id. § 3.311a(d) (stating that there is not
a “cause and effect relationship between dioxin exposure” and
“Porphyria cutanea tarda,” “Soft tissue sarcomas,” and “[a]ny
other disease” besides chloracne). The district court invali-
dated the regulation because, although Congress intended the
VA to “predicate service connection upon a finding of a sig-
nificant statistical association between dioxin exposure and
various diseases,” the VA had erroneously required proof that
a causal relationship existed. Nehmer I, 712 F. Supp. at 1420,
1423. The district court also voided all adverse VA benefit
decisions based on the invalid regulation. Id. at 1423.

  C.   The Agent Orange Act of 1991

   After the district court invalidated the VA regulation, Con-
gress enacted the Agent Orange Act of 1991, Pub. L. No. 102-
4, 105 Stat. 11 (1991), 38 U.S.C. § 1116. The Agent Orange
Act was originally codified at 38 U.S.C. § 316, but six months
later Congress renumbered § 316 of title 38 as § 1116. See 38
U.S.C.A. § 1116 (2002); Department of Veterans Affairs
Codification Act of 1991, Pub. L. No. 102-83, § 5(a), 105
Stat. 378 (1991). Because the relevant portion of the Consent
Decree at issue in this action refers to 38 U.S.C. § 316(b), we
will refer to § 316 and § 1116 interchangeably.
                           NEHMER v. USDVA                             8739
  The Agent Orange Act requires the Secretary of the VA to
conduct new rulemaking proceedings to determine which dis-
eases are sufficiently associated with exposure to Agent
Orange so that veterans with approved diseases receive a pre-
sumption of service-connection. 38 U.S.C. § 1116.2 Section
1116(b) states that

      (1) Whenever the Secretary determines, on the basis
      of sound medical and scientific evidence, that a posi-
      tive association exists between (A) the exposure of
      humans to an herbicide agent, and (B) the occur-
      rence of a disease in humans, the Secretary shall pre-
      scribe regulations providing that a presumption of
      service connection is warranted for that disease for
      the purposes of this section.

      (2) In making determinations for the purpose of this
      subsection, the Secretary shall take into account (A)
      reports received by the Secretary from the National
      Academy of Sciences under section 3 of the Agent
      Orange Act of 1991, and (B) all other sound medical
      and scientific information and analyses available to
      the Secretary.

Id. § 1116(b).

   To develop the scientific information upon which to base
service-connected determinations, § 3 of the Agent Orange
Act directed the Secretary “to enter into an agreement with
the National Academy of Sciences for the Academy to per-
form the services covered by this section[,]” and under that
  2
   For background regarding how the VA ordinarily processes veterans’
disability claims, and how a presumption of “service-connected” provides
an alternative route for proving entitlement to disability benefits, see Mark
Brown, Science for Judges IV: Agent Orange Revisited and Human
Behavior Research: The Role of Science in Department of Veterans Affairs
Disability Compensation Policies for Environmental and Occupational Ill-
nesses and Injuries, 13 J.L. & POL’Y 593, 593-99 (2005).
8740                  NEHMER v. USDVA
agreement the Academy was to “review and summarize the
scientific evidence, and assess the strength thereof, concern-
ing the association between exposure to [dioxin] . . . and each
disease suspected to be associated with such exposure.” Agent
Orange Act, § 3(b)-(c). Moreover, the Academy was to sub-
mit its first report no later than 18 months after the enactment
of the Agent Orange Act, and, thereafter submit “periodic
written reports . . . at least once every two years (as measured
from the date of the first report).” Id. § 3(g)(1)-(2).

   Furthermore, under the Agent Orange Act, when the Secre-
tary received a report from the Academy, he was required to
determine within 60 days “whether a presumption of service
connection is warranted for each disease covered by the
report,” and if he determined that a “presumption is warrant-
ed,” he was required to issue proposed regulations within 60
days setting forth his determination and to issue final regula-
tions within 90 days after proposing them. 38 U.S.C.
§ 1116(c)(1)(A), (c)(2).

   Finally, § 2(a) of the Agent Orange Act, as originally
enacted, set forth a sunset date for the operation of the provi-
sions that required the Secretary to issue regulations designat-
ing service-connected diseases in response to the scientists’
reports. 38 U.S.C. § 316(e), 38 U.S.C.A. § 1116(e) (1992)
(“Subsections (b) through (d) shall cease to be effective 10
years after the first day of the fiscal year in which the [Acad-
emy] transmits to the Secretary the first report under section
3 of the Agent Orange Act of 1991.”). Because § 2(a), codi-
fied as § 316(e) or § 1116(e), provided that its sunset date
would be 10 years after the first day of the fiscal year in
which the Academy transmitted its first report to the Secre-
tary, and the first report was transmitted on July 27, 1993, the
original effective sunset date was September 30, 2002.
                          NEHMER v. USDVA                            8741
  D.    The Veterans Education and Benefits Expansion
        Act of 2001

   Ten years after the passage of the Agent Orange Act, Con-
gress enacted the Veterans Education and Benefits Expansion
Act of 2001, Pub. L. No. 107-103, § 201, 115 Stat. 976 (2001)
(“Benefits Expansion Act”), which, inter alia, amended the
sunset date contained in 38 U.S.C. § 1116(e) and extended the
Secretary’s authority to issue regulations designating service-
connected ailments for another thirteen years.3 As a result, the
provisions in 38 U.S.C. § 1116(b), (c) and (d) have remained
in effect since 1991, and will continue to be effective until
September 30, 2015, or until such other time as Congress
shall establish, should it enact another extension. See 38
U.S.C.A. § 1116(e) (2006) (“Subsections (b) through (d) shall
cease to be effective on September 30, 2015.”).

  E.    The Final Stipulation and Order Entered in 1991

   Shortly after Congress enacted the Agent Orange Act on
February 6, 1991, the VA and the plaintiff class signed a
court-approved Stipulation and Order or Consent Decree. On
May 17, 1991, the district court entered the decree, “setting
forth VA’s ongoing responsibilities for further rulemaking
and disability payments to class members.” Nehmer III, 284
F.3d at 1160.

   Under Paragraph 1 of the decree, the Veterans’ Advisory
Committee on Environmental Hazards — which the Dioxin
Act had created — would “complete its analysis as to whether
the scientific or medical evidence reveals a connection
between exposure to dioxin and diabetes, lung cancer and
  3
   Section 201(d) of the Benefits Expansion Act of 2001 provided that
“EXTENSION OF AUTHORITY TO PRESUME SERVICE-
CONNECTION FOR ADDITIONAL DISEASES.—(1) Subsection (e) of
such section is amended by striking ‘10 years’ and all that follows through
‘Agent Orange Act of 1991’ and inserting ‘on September 30, 2015’.”
8742                  NEHMER v. USDVA
peripheral neuropathy . . . and convey its evaluations and any
recommendations to the Secretary.” Under Paragraph 2, after
reviewing the Advisory Committee’s analysis of these three
diseases, the Secretary was to initiate rulemaking in order to
determine whether they were service-connected, or alterna-
tively to defer rulemaking if the information was insufficient.

   Furthermore, Paragraphs 3 and 5 established the VA’s obli-
gation to readjudicate veterans’ disability claims whenever
the VA in the future finds new diseases to be service-
connected under the procedures set forth in 38 U.S.C.
§ 316(b) (renumbered subsequently at 38 U.S.C. § 1116(b)),
and to pay retroactive benefits based on the date that a veteran
filed his claim or became disabled, whichever is later. Para-
graph 3 provides that

    As soon as a final rule is issued service connecting,
    based on dioxin exposure, any . . . disease which
    may be service connected in the future pursuant to
    the Agent Orange Act of 1991, 38 U.S.C. § 316(b),
    the VA shall promptly thereafter readjudicate all
    claims for any such disease which were voided by
    the Court’s Order of May 3, 1989, as well as adjudi-
    cate all similar claims filed subsequent to the Court’s
    May 3, 1989 Order, without waiting for final rules to
    be issued on any other diseases.

Nehmer III, 284 F.3d at 1161. Paragraph 5 provides that

    For any . . . disease which may be service connected
    in the future pursuant to paragraph 3 above, as to any
    details of claims which were voided as a result of the
    Court’s May 3, 1989 Order, the effective date for
    disability compensation or dependency and indem-
    nity compensation (“DIC”), if the claim is allowed
    upon readjudication pursuant to paragraphs 3 and 4
    above, will be the date the claim giving rise to the
    voided decision was filed . . . . For any claim for any
                        NEHMER v. USDVA                         8743
       such disease which was not filed until after May 3,
       1989, the effective date for beginning disability com-
       pensation or [dependency and indemnity compensa-
       tion (“DIC”)] will be the date the claim was filed or
       the date the claimant became disabled or death
       occurred, whichever is later.

Id.; Stipulation & Order 5. As a result of the VA’s rulemak-
ing, the agency has “found that a number of cancers are linked
to Agent Orange using the appropriate standard, and, as a
result, they have been accorded service connected status.”
Nehmer II, 32 F. Supp. 2d at 1177.

  F.     A Prior Appeal Confirms the                 Retroactive
         Application of the Consent Decree

   For the past sixteen years since he entered the Consent
Decree, Judge Thelton Henderson has “enforced compliance
with the Stip[ulation] & Order and adjudicated disputes con-
cerning its interpretation.” Nehmer III, 284 F.3d at 1160
(internal citations omitted). In 1998, several disputes arose
between the VA and the veterans, which required Judge Hen-
derson in the first instance and this court on appeal to inter-
pret the language of the decree. Nehmer II, 32 F. Supp. 2d at
1177-78; Nehmer III, 284 F.3d at 1161. In 1996, the VA
determined prostate cancer to be service-connected, thus
reaching the opposite conclusion from the one it had reached
when it adopted its 1994 regulations. The VA, however, con-
tended that “it [wa]s not required to pay retroactive prostate
cancer benefits (accruing, in most cases, back to the date of
the veteran’s first claim for such benefits) to any veteran suf-
fering from prostate cancer whose earlier claim was denied
under the valid 1994 regulations.” Nehmer III, 284 F.3d at
1161. The district court rejected the VA’s interpretation, hold-
ing that “the consent decree requires [the] VA to provide
retroactive benefits to any class member who submitted a
claim after May 3, 1989, based on a disease that is later
[determined to be] service connected under the Agent Orange
8744                  NEHMER v. USDVA
Act.” Id. It then granted the veterans’ motion to enforce the
Consent Decree. Id. We affirmed, because we held “the dis-
trict court’s interpretation of the consent decree to be reason-
able.” Id.

   Specifically, we concluded that “[t]he plain language and
remedial purpose of the Consent Decree indicate that VA
agreed to pay retroactive benefits to all claimants whose
claims were filed after 1989, if and when the disease from
which they suffer is [determined to be] service connected
under the Agent Orange Act.” Id. at 1161-62. Accordingly,
veterans who applied for benefits anytime after 1989, and
whose claims had been denied were to receive a readjudica-
tion of those claims and retroactive benefits, if the VA subse-
quently determined the disease from which they suffered to be
service-connected, “even if such veterans’ claims were origi-
nally denied under valid regulations.” Id. at 1161.

  G.   The VA Finds Chronic Lymphocytic Leukemia to
       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 expo-
sure and Chronic Lymphocytic Leukemia (CLL), and found
“sufficient evidence of an association.” Disease Associated
With Exposure to Certain Herbicide Agents: Chronic Lym-
phocytic 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 associa-
tion 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 determin-
ing 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 Septem-
ber 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; Disposi-
tion 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 reg-
ulatory presumptions of service connection expired on Sep-
tember 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 Expan-
sion Act of 2001).4

  After the VA determined that Chronic Lymphocytic Leuke-
mia 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 dis-
ease,” 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 read-
judicate the pertinent disability claims and to pay retroactive
benefits. In a December 20, 2004 order, the district court con-
verted 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[ula-
tion] & Order.” (noting that the “heading of plaintiffs argu-
ment 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 provi-
sion 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.

II.    Standard of Review

   “The existence of subject matter jurisdiction is a question
of law reviewed de novo.” United States v. Peninsula
Commc’ns, Inc., 287 F.3d 832, 836 (9th Cir. 2002). “This
court reviews de novo a district court’s interpretation of a
consent decree . . . but will ‘give deference to the district
court’s interpretation based on the court’s extensive oversight
of the decree from the commencement of the litigation to the
current appeal.’ A court of appeals will uphold a district
court’s ‘reasonable’ interpretation of a consent decree.” Neh-
mer III, 284 F.3d at 1160 (quoting Gates v. Gomez, 60 F.3d
525, 530-31 (9th Cir. 1995)).

III.   Jurisdiction

   Before we consider whether the district court reasonably
interpreted the Consent Decree, we must examine our own
subject matter jurisdiction over the underlying motion for
clarification and the instant appeal. The VA contends that the
district court did not have subject matter jurisdiction to enter-
tain the plaintiff class’s motion, because the motion chal-
lenges a VA regulation and 38 U.S.C. § 502 provides that
such challenges may be brought only in the Federal Circuit.
If the district court did not have subject matter jurisdiction
over the motion for that reason, then neither do we, the VA
8748                       NEHMER v. USDVA
correctly argues. We reject the VA’s contention that the dis-
trict court lacked jurisdiction.5

   [1] Ordinarily, when a district court incorporates the terms
of a settlement agreement or a stipulation into an order, it
retains subject matter jurisdiction to interpret and enforce the
contents of that order. Flanagan v. Arnaiz, 143 F.3d 540, 544
(9th Cir. 1998) (stating that although the “[e]nforcement of a
settlement agreement . . . ‘requires its own basis for jurisdic-
tion’ . . . a basis for jurisdiction may be furnished ‘by separate
provision (such as a provision ‘retaining jurisdiction’ over the
settlement agreement) or by incorporating the terms of the
  5
    We also reject the plaintiff class’s argument that we lack appellate
jurisdiction over the VA’s appeals from the two orders of the district
court. Although we do not have appellate jurisdiction under 28 U.S.C.
§ 1292(a)(1) because neither order grants, continues, modifies, refuses or
dissolves an injunction, id.; United States v. Oakland Cannabis Buyers’
Coop., 190 F.3d 1109, 1112 (9th Cir. 1999), rev’d on other grounds by
532 U.S. 483 (2001) (citing Public Serv. Co. of Colo. v. Batt, 67 F.3d 234,
236-37 (9th Cir. 1995)); Batt, 67 F.3d at 236-38 (citing In re Complaint
of Ingram Towing Co., 59 F.3d 513, 516 (5th Cir. 1995)); Motorola, Inc.
v. Computer Displays Int’l, 739 F.2d 1149, 1155 (7th Cir. 1984); cf. Cun-
ningham v. David Special Commitment Ctr., 158 F.3d 1035, 1037 (9th Cir.
1998), we do have such jurisdiction pursuant to 28 U.S.C. § 1291, on the
basis of the practical finality doctrine. See Gillespie v. U.S. Steel Corp.,
379 U.S. 148, 152-53 (1964). The district court’s order in this post-final
judgment proceeding involves an unsettled issue of national significance,
and also is marginally final given that the proceedings that remain pending
before the court have little substance and will not affect the central issue
of the meaning of the Consent Decree. In addition, the exercise of appel-
late jurisdiction furthers the policies underlying 28 U.S.C. § 1292(b) and
the final judgment rule of § 1291, and prevents the harm to both the veter-
ans and the VA that a delay in appellate review of the district court’s clari-
fication order in this now twenty-one year old case would likely cause. See
SEIU, Local 102 v. County of San Diego, 60 F.3d 1346, 1349-50 (9th Cir.
1994) (citing Gillespie, 379 U.S. at 152-53); Zucker v. Maxicare Health
Plans, 14 F.3d 477, 483-84 (9th Cir. 1994); Wabol v. Villacrusis, 958 F.2d
1450, 1454 (9th Cir. 1990); So. Cal. Edison Co. v. Westinghouse Elec.
Corp. (In re Subpoena Served on Cal. Pub. Utils. Comm’n), 813 F.2d
1473, 1479-80 (9th Cir. 1987); Stone v. Heckler, 722 F.2d 464, 467-68
(9th Cir. 1983).
                       NEHMER v. USDVA                       8749
settlement agreement in the order.’ ”) (quoting Kokkonen v.
Guardian Life Ins. Co. of Am., 511 U.S. 375, 378, 381
(1991)); see also Sandpiper Vill. Condo. Ass’n v. La.-Pac.
Corp., 428 F.3d 831, 841 (9th Cir. 2005) (citing Flanagan,
143 F.3d at 544).

   Because Judge Henderson incorporated the terms of the
Stipulation and Order into the order that he entered on May
17, 1991, he concededly retained jurisdiction to interpret and
enforce the terms of the Stipulation and Order, and, therefore,
he ordinarily would plainly have jurisdiction to consider the
plaintiff class’s motion for clarification and enforcement of
the Stipulation and Order. See Flanagan, 143 F.3d at 544.

   The VA accepts this “unexceptionable proposition” and
“does not dispute that the district court retained jurisdiction to
supervise implementation of the consent decree.” The VA,
however, rests its argument regarding subject matter jurisdic-
tion on its contention that in light of the Federal Circuit’s
exclusive jurisdiction to entertain direct challenges to VA reg-
ulations under 38 U.S.C. § 502 the district court has been
divested of its jurisdiction to interpret the Consent Decree, at
least with respect to “service-connected” determinations made
after September 30, 2002. Its argument is as follows: follow-
ing the district court’s issuance of the Consent Decree, the
VA enacted a regulation which in effect declared that the
decree did not intend to incorporate the terms of the Benefits
Expansion Act amending the sunset date of the pertinent pro-
vision of the Agent Orange Act. 68 Fed. Reg. at 50968-70; 38
C.F.R. § 3.816. Any challenge to that regulation, must be
brought in the Federal Circuit.

   [2] 38 U.S.C. § 502 provides that “[a]n action of the Secre-
tary to which section 552(a)(1) or 553 of title 5 (or both)
refers . . . is subject to judicial review. Such review shall be
in accordance with chapter 7 of title 5 and may be sought only
in the United States Court of Appeals for the Federal Circuit.”
On two prior occasions, we have addressed the scope of
8750                  NEHMER v. USDVA
§ 502. See Preminger v. Principi, 422 F.3d 815, 821 (9th Cir.
2005), and Chinnock v. Turnage, 995 F.2d 889, 893 (9th Cir.
1993). In Preminger, we explained that

    Section 502 gives the Federal Circuit exclusive juris-
    diction to review challenges to most actions by the
    Secretary of Veterans’ Affairs. In particular, § 502
    applies to (1) actions that require publication in the
    Federal Register, such as rules of procedure, sub-
    stantive rules of general applicability, statements of
    general policy, and amendments, revisions, or
    repeals to those actions, under 5 U.S.C. § 552(a)(1);
    and (2) agency rulemaking, under 5 U.S.C. § 553.
    Thus, Congress explicitly has provided for judicial
    review of direct challenges to VA rules and regula-
    tions only in the Federal Circuit. . . . Accordingly,
    any direct challenge to [a regulation’s] validity must
    be brought in the Federal Circuit.

Id. at 821 (emphasis added). In Preminger, we drew a distinc-
tion between facial challenges to VA regulations, which are
subject to exclusive judicial review in the Federal Circuit, and
as-applied challenges, which are subject to appellate review in
this court, and we exercised our appellate jurisdiction over an
as-applied challenge brought in a district court to a VA regu-
lation that banned partisan activity on the VA’s property. Id.

   The VA contends that the veterans’ motion for clarification
and enforcement is a facial challenge to 38 C.F.R. § 3.816, the
regulation adopted by the VA in a final rule on August 25,
2003, 68 Fed. Reg. at 50968-70, as well as to the VA’s final
rule that determined Chronic Lymphocytic Leukemia to be
service-connected. 68 Fed. Reg. at 59540. Section 3.816 pur-
ports to set forth the “rules required by orders of” Judge Hen-
derson in this case, 38 C.F.R. § 3.816(a), while the final rule
determining Chronic Lymphocytic Leukemia to be service-
connected contains the VA’s argument as to why it believes
that the Consent Decree should not be interpreted to require
                      NEHMER v. USDVA                     8751
the payment of retroactive benefit payments to veterans with
that disease: the service-connected determination was made
after September 30, 2002, the original sunset date for the
Agent Orange Act provision. The VA also argues that the
motion is not an as-applied challenge to the regulations, a
contention with which the plaintiff class agrees.

   The plaintiff class argues in opposition that its motion for
clarification and enforcement of the Consent Decree does not
fall within the exclusive jurisdiction of 38 U.S.C. § 502
because the motion does not directly challenge either the mer-
its of the VA’s regulation or the VA’s rulemaking authority.
See Preminger, 422 F.3d at 821 (“Congress explicitly has pro-
vided for judicial review of direct challenges to VA rules and
regulations only in the Federal Circuit.”) (emphasis added).
Nor, according to the veterans, does the motion urge the dis-
trict court — or this court — to invalidate the regulations.
Instead, they assert that the motion challenges the actions of
the VA in failing to comply with the terms of the Consent
Decree — irrespective of the existence of the VA regulations
— given that in October 2003 the VA determined that
Chronic Lymphocytic Leukemia was service-connected but
then failed to take the actions of readjudicating past claims
and paying retroactive benefits, which are explicitly mandated
by Paragraphs 3 and 5 of the decree.

   [3] We agree with the veterans that their motion does not
directly challenge the VA regulations. As the district court
concluded, in addressing the motion for clarification and
enforcement, it is only “the Stip[ulation] & Order that must
be interpreted” to determine whether the plain language of
Paragraphs 3 and 5 applies to the claims of veterans suffering
from Chronic Lymphocytic Leukemia. Because the district
court was neither asked nor required to engage in judicial
review of the VA regulations in order to clarify the terms of
the Consent Decree, 38 U.S.C. § 502 does not divest it of sub-
ject matter jurisdiction.
8752                   NEHMER v. USDVA
   Notably, the plaintiff class’s motion that gave rise to this
appeal solely challenged the VA’s non-regulatory failure to
act, and not the VA’s regulations themselves. The motion
stated that the VA had “failed” to follow Paragraph 3 because
“[i]t has not identified and readjudicated CLL claims that
were denied between September 25, 1985 and May 3, 1989
[the date of the district court’s order in Nehmer I], or CLL
claims that were pending or filed between May 3, 1989 and
the date of the CLL regulation[,]” and for “CLL claims that
were pending on the date of the CLL regulation and thereafter
granted, the VA has wrongfully assigned the publication date
of the CLL regulation as the effective date instead of the date
the CLL claim was filed, as required by paragraph 5 of the
Consent Decree.” Moreover, the veterans made clear in their
brief in support of the motion that they “merely seek to
enforce the stipulated order” and ask only for an order requir-
ing the VA to follow the terms of Paragraphs 3 and 5, and to
permit discovery in order to identify which class members
had been denied compensation under the decree.

   In granting the motion, the district court confirmed that the
veterans’ motion was “based on [the VA’s] refusal to pay
retroactive benefits to veterans whose diseases have been
deemed ‘service connected’ after the original sunset date of
the Agent Orange Act in 2002.” As the district court had pre-
viously concluded in its jurisdictional order, the “essence of
the current motion is a request that the Court interpret, clarify,
or construct particular terms of the Stip[ulation] and Order,”
and not a request to review or invalidate a VA regulation.
Moreover, when the VA briefed the merits regarding the
interpretation of the Consent Decree in the district court, the
VA did not argue that that court — or any other court —
would be bound by the VA’s own interpretation of the decree
espoused in its regulations. Instead, the VA’s argument relied
on the “plain language” of the decree and additional extrinsic
evidence, again suggesting that the district court was not cal-
led upon to engage in judicial review of a VA regulation.
Still, even if the VA had raised the existence of the regula-
                       NEHMER v. USDVA                       8753
tions as a defense to the veterans’ motion for clarification, the
assertion of that defense would not convert the veterans’
motion to a direct facial challenge to VA regulations.

   Furthermore, even if we were to construe the plaintiff
class’s motion as a direct facial challenge to the VA regula-
tions, we still could not accept the VA’s argument that 38
U.S.C. § 502 divests the district court of its continuing juris-
diction to interpret and enforce its decree. As the district court
correctly concluded, the statements in the VA regulations
expressing the VA’s view of the meaning of the Consent
Decree that it entered into many years earlier does not consti-
tute an exercise of the agency’s rulemaking function referred
to in § 502, but rather of a function more akin to adjudication.
Indeed, to put it more accurately, the VA’s expression of
its position in a contested judicial matter is more like the
function of advocacy, undertaken when the agency is a party
to litigation, rather than of adjudication. Under such circum-
stances, the VA’s statement of its views does not fall within
the scope of § 502. Cf. LeFevre v. Sec’y, Dep’t of Veterans
Affairs, 66 F.3d 1191, 1196 (Fed. Cir. 1995) (stating that
under § 502 the Federal Circuit may review “substantive rules
of general applicability, statements of general policy and
interpretations of general applicability because these are all
actions to which section 552(a)(1) refers,” and that “rule mak-
ing is legislative in nature, is primarily concerned with policy
considerations for the future rather than the evaluation of past
conduct, and looks not to the evidentiary facts but to policy-
making conclusions to be drawn from the facts.”) (citations
and internal quotations omitted); Griffin v. Dep’t of Veterans
Affairs, 129 F. Supp. 2d 832, 838 (D. Md. 2001) (quoting
LeFevre, 66 F.3d at 1196).

  The gravamen of the 2003 VA regulations is a legal argu-
ment that the 1991 Consent Decree — at its inception and
based on its language and surrounding circumstances — did
not intend to mandate readjudication or retroactive benefit
payments for claims based on diseases that the VA determines
8754                     NEHMER v. USDVA
to be service-connected after the original sunset date of the
Agent Orange Act, 38 U.S.C. § 1116(e), September 30, 2002.
The VA’s analysis in the regulations almost entirely relies
upon the application of generally applicable contract law prin-
ciples to the then-twelve year-old Consent Decree, see 68
Fed. Reg. at 50968-70; Effective Dates of Benefits for Dis-
ability or Death Caused by Herbicide Exposure; Disposition
of Unpaid Benefits After Death of Beneficiary, 68 Fed. Reg.
4132, 4138-39 (Jan. 28, 2003), and, thus, the VA engaged in
the same exercise of interpretation of the court’s decree in
which the court itself subsequently engaged when issuing the
order from which the VA now appeals. See 68 Fed. Reg. at
4139 (stating that the “stipulation and order must be inter-
preted in accordance with general principles of contract law,”
that “unless the parties provide otherwise, a contract is pre-
sumed to incorporate the law that existed at the time the con-
tract was made,” and that any regulation service-connecting
diseases after September 30, 2002 “are beyond the express
scope of the Nehmer stipulation and order”) (emphasis
added). This is a function for the court to perform, not the
party appearing before it, even an administrative agency. The
VA’s retrospective evaluation of past conduct, including an
analysis of twelve-year-old evidentiary facts, does not consti-
tute rulemaking, the review of which Congress placed in the
exclusive province of the Federal Circuit. See LeFevre, 66
F.3d at 1196. In sum, even if the motion for clarification and
enforcement constituted a direct challenge to the VA regula-
tions, we would hold that because the regulations do not con-
tain substantive rules, statements or interpretations of general
applicability, they fall outside the scope of 38 U.S.C. § 502.
Id. (citing 5 U.S.C. § 551(4) (defining the term “rule” under
the Administrative Procedure Act)).6
  6
    The VA’s reliance on Suburban O’Hare Comm’n v. Dole, 787 F.2d
186 (7th Cir. 1986) (O’Hare II) and Suburban O’Hare Comm’m v. Dole,
603 F. Supp. 1013 (1985) (O’Hare I) is misplaced. The actions which
gave rise to those judicial determinations involved a different jurisdic-
tional statute, 49 U.S.C. § 1486(a), which required judicial review of
                           NEHMER v. USDVA                             8755
   Finally, the VA cannot usurp the power of a district court
to construe the provisions of an order it has issued or divest
that court of its authority and transfer it to the Federal Circuit
simply by issuing a regulation interpreting that order or
declining to follow it. It is well established that the district
court has the inherent authority to enforce compliance with a
consent decree that it has entered in an order, to hold parties
in contempt for violating the terms therein, and to modify a
decree. See Rufo v. Inmates of the Suffolk County Jail, 502
U.S. 367, 381 & n.6 (1992); Spallone v. United States, 493
U.S. 265, 276 (1990); Holland v. New Jersey Dept. of Corr.,
246 F.3d 267, 270-71, 281-82 (3rd Cir. 2001); Stone v. City
and County of S.F., 968 F.2d 850, 856 (9th Cir. 1992); Keith
v. Volpe, 784 F.2d 1457, 1461 (9th Cir. 1986); see also Fed.
R. Civ. P. 60(b)(5); Frew ex rel. Frew v. Hawkins, 540 U.S.
431, 441 (2004) (“Federal courts are not reduced to approving
consent decrees and hoping for compliance. Once entered, a
consent decree may be enforced.”). That the district court pre-
serves such inherent authority presupposes that it, and not a
party before it, is the principal and proper arbiter with the
responsibility to interpret the decree and oversee the litiga-
tion. Although a party may ask the district court to issue an
order clarifying, enforcing, or modifying a decree and suggest
a favored interpretation, a party — whether a private or public
entity — cannot dictate the meaning of the decree to the court
or relieve itself of its obligations under the decree without the

“[a]ny order” of the Federal Aviation Administration to be brought in the
federal courts of appeals, as opposed to 38 U.S.C. § 502, which applies
only to rulemaking and rules of general policy. In the O’Hare cases there
was no doubt that the FAA had issued an order that was subject to the
jurisdictional statute. Furthermore, unlike in the instant case, O’Hare I and
II involved a direct challenge to the agency’s order. Finally, those cases
did not involve an attempt by an agency to issue an order or regulation
purporting to usurp the inherent authority of a court to construe its own
decree — to interpret a decree that it had entered many years earlier, about
which it had extensive knowledge from years of oversight. An executive
agency possesses no such power to strip a federal court of its jurisdiction.
8756                   NEHMER v. USDVA
district court’s approval. Furthermore, the importance of the
district court’s role in interpreting a consent decree is further
evidenced by the discretion that we afford district courts in
reviewing their interpretations, particularly when the district
court has overseen a remedial decree for many years. See
Nehmer III, 284 F.3d at 1160 (quoting Gates, 60 F.3d at 530-
31); Stone, 968 F.2d at 856.

   In this case, the VA urges us to hold that an executive
agency that has been ordered by a district court to take vari-
ous actions in order to comply with the law can remove itself
from that court’s authority and ignore its orders simply by
enshrining its interpretation of a consent decree in a regula-
tion which only an appeals court in another circuit may
review. But the substantive effect of such a holding would be
to give the VA the right to unilaterally withdraw the jurisdic-
tion of the district court and of this circuit. While Congress
has the power under Article III of the U.S. Constitution to
define the jurisdiction of the lower federal courts, Magana v.
Northern Mariana Islands, 107 F.3d 1436, 1440 (9th Cir.
1997), an executive agency does not have that same authority.
We are unwilling to read 38 U.S.C. § 502 as granting to the
VA the power to unilaterally eliminate jurisdiction of a dis-
trict court, to forfeit that court’s right to supervise and imple-
ment its own equitable orders, and to redirect what is
effectively a motion to vacate an injunction from a district
court to a court of appeals in another circuit. Finally, the VA’s
proffered interpretation of § 502 would raise a most troubling
question of separation of powers under the Constitution, a
question that, because the VA’s argument fails for so many
other reasons, we need not definitively answer today.

IV.    Discussion

   On the merits, this appeal presents a single question regard-
ing the interpretation of the Consent Decree: whether Para-
graphs 3 and 5 require the VA to readjudicate the previously
filed claims of veterans who suffer from diseases that are
                      NEHMER v. USDVA                      8757
determined to be service-connected, pursuant to 38 U.S.C.
§ 1116(b), and to make retroactive payments to those veter-
ans, in instances in which the determination is made subse-
quent to September 30, 2002. The district court answered this
question in the affirmative, on the basis of the plain language
of the decree. In view of Judge Henderson’s longstanding,
extensive and diligent oversight of the Nehmer Consent
Decree, we must affirm his interpretation of the decree so
long as it is reasonable. Nehmer III, 284 F.3d at 1160 (citing
Gates v. Gomez, 60 F.3d 525, 530-31 (9th Cir. 1995)).
Because we conclude that Judge Henderson’s interpretation is
not only reasonable but correct, we affirm.

   [4] “A consent decree, which has attributes of a contract
and a judicial act, is construed with reference to ordinary con-
tract principles.” City of Las Vegas v. Clark County, 755 F.2d
697, 702 (9th Cir. 1985) (citing Washington v. Penwell, 700
F.2d 570, 573 (9th Cir. 1983)); see also United States v.
Asarco Inc., 430 F.3d 972, 980 (9th Cir. 2005) (“[C]ourts
treat consent decrees as contracts for enforcement pur-
poses.”). “A consent decree, like a contract, must be discerned
within its four corners, extrinsic evidence being relevant only
to resolve ambiguity in the decree.” Asarco, 430 F.3d at 980.
Therefore, if the plain language of a consent decree is clear,
we need not evaluate any extrinsic evidence to ascertain the
true intent of the parties. Id. at 980-81 (discussing United
States v. ITT Cont’l Baking Co., 420 U.S. 239 (1985), and
United States v. Armour, 402 U.S. 673 (1971)); Molski v.
Gleich, 318 F.3d 937, 946 (9th Cir. 2003); Gates v. Rowland,
39 F.3d 1439, 1444 (9th Cir. 1994); S.F. NAACP v. S.F. Uni-
fied Sch. Dist., 896 F.3d 412, 414 (9th Cir. 1990). As we
explained in Molski, it is “particularly appropriate in class
action litigation” to resolve the meaning of a consent decree
based on its plain language, if possible, “because a member
of the class who was not present at any negotiations would be
at a disadvantage in presenting extrinsic evidence of the
meaning of the consent decree.” 318 F.3d at 946.
8758                   NEHMER v. USDVA
   [5] Turning to the plain language of the Stipulation and
Order, the language that bears on the question whether the
VA must readjudicate previously filed claims for diseases
service-connected after 2002 is found in Paragraph 3, which
states that

    As soon as a final rule is issued service connecting,
    based on dioxin exposure, any . . . disease which
    may be service connected in the future pursuant to
    the Agent Orange Act of 1991, 38 U.S.C. § 316(b),
    the VA shall promptly thereafter readjudicate all
    claims for any such disease . . . .

Nehmer III, 284 F.3d at 1161 (emphasis added). As discussed
above, § 316(b) requires the Secretary to issue regulations
“providing that a presumption of service connection is war-
ranted for [a particular] disease” whenever he determines that
there is a positive association between exposure of humans to
dioxin and the occurrence of that disease. 38 U.S.C. § 316(b)
(renumbered at 38 U.S.C. § 1116(b)). There can be no doubt
that § 316(b) is still in effect and that the VA is still required
by that provision to make determinations of service-
connectedness.

   The VA contends, however, that the reference to § 316(b)
in Paragraph 3 demonstrates the intent of the parties to place
a temporal limit on the life of the Consent Decree, measured
by the time period contained in § 316(e), and that even though
§ 316(b) remains in effect, the requirements of the Consent
Decree do not. At the time the decree was entered, the VA
asserts, the parties understood that § 316(b) would expire in
about 11 or 12 years, and the decree therefore does not con-
template incorporating future changes to § 316, including any
extension by Congress of the period in which that provision
remains in effect.

  The district court, relying on the plain language of Para-
graph 3 — “any . . . disease which may be service connected
                      NEHMER v. USDVA                          8759
in the future pursuant to the Agent Orange Act of 1991, 38
U.S.C. § 316(b)” — rejected the VA’s argument. It explained
that

    the Stipulation and Order contains no hard deadline.
    Instead, it mandates retroactive payment for all dis-
    eases that may be service connected “in the future.”
    Stip[ulation] & Order 3. The agreement contains no
    other provision regarding its temporal longevity; it
    does not cite the 10 year sunset provision of the
    AOA (38 U.S.C. § 316(e)), nor does it incorporate
    the provision by reference.

Next, acknowledging that each party contends that its own
position is the only possible one in light of the plain language,
the district court concluded that

    [t]he court finds that plaintiffs are correct and defen-
    dants are wrong. The plain terms of Paragraph 3 of
    the Stip[ulation] & Order obligate defendants to con-
    tinue making retroactive payments for any and all
    diseases that are deemed service connected pursuant
    to the Agent Orange Act [AOA]. Defendants’ obli-
    gations are plainly tied to the life of section 1116(b)
    of the AOA, as the explicit terms of the Stip[ulation]
    & Order provide. As long as section 1116(b) is in
    effect, the Stip[ulation] & Order applies. Due to the
    passage of the Benefits and Expansion Act [of
    2001], section 1116(b) lives on, and so, therefore,
    does the Stip[ulation] & Order.

   The district court’s interpretation of the plain language of
Paragraph 3 is not only reasonable, it is also the only correct
interpretation. First, the phrase “any . . . disease which may
be service connected in the future pursuant to the Agent
Orange Act of 1991, 38 U.S.C. § 316(b),” plainly refers to the
designation of any disease made by the VA pursuant to the
Agent Orange Act, without any time limitation. The Consent
8760                      NEHMER v. USDVA
Decree has no deadline and contains no temporal language
other than the broad and open-ended phrase “in the future.”
Moreover, Paragraph 3 refers to the provisions of § 316(b) of
that Act, not to the sunset language contained in subsection
(e). If Paragraph 3 had referred to § 316 generally, the VA’s
argument that the parties intended to limit the life of the
decree to the period prescribed by the sunset provision in sub-
section (e) might have been colorable (although we would not
have agreed with it), but the Consent Decree made no such
general reference.

   [6] Most important, the terms of subsection (b) to which the
Consent Decree refers have remained the same since the
inception of the decree. The change to the sunset clause in
subsection (e), made in 2001, resulted in no modification to
the language of subsection (b). The subsection (b) in force
when the Consent Decree was issued, and the subsection (b)
to which the decree refers, is the identical subsection (b) on
which the VA based its actions when it determined Chronic
Lymphocytic Leukemia to be service-connected in 2003. The
pertinent provision did not change, and the VA’s obligations
under Paragraph 3 remained the same in 2004 as they were on
the day the decree first was entered. In sum, we agree with the
district court that the Consent Decree is plain on its face: the
VA must reconsider the previous denial of a claim of a vet-
eran suffering from a disease determined by the VA to be
service-connected regardless of when the determination is
made, so long as that determination is made pursuant to 38
U.S.C. § 1116(b).7
  7
    To resolve what it sees as an ambiguity in the decree, the VA argues
that in the absence of a federal common law rule on point, we should
apply California contract law to interpret the Consent Decree — a contract
to which the federal government is a party — and that under California
law the Consent Decree does not adequately express an intent to incorpo-
rate a subsequent change in federal law, namely the extension of the sun-
set date contained in § 316(e) under the Benefits Expansion Act of 2001.
Even were we to accept the VA’s suggestion that we look to California
                           NEHMER v. USDVA                               8761
   Because the district court’s interpretation is compelled by
the clear language of the Consent Decree, we do not consider
any extrinsic evidence. Asarco, 430 F.3d at 980; Molski, 318
F.3d at 946; Gates, 39 F.3d at 1444. Even if we were to do
so, however, the extrinsic evidence would not cause us to
reject the district court’s interpretation. In fact, the surround-
ing circumstances cut more in favor of the veterans’ position
than the VA’s. The VA’s contention that the parties did not
include an express deadline in the Consent Decree because
they could not identify the exact date referred to in 38 U.S.C.
§ 316(e), given that the National Academy of Sciences had
not yet filed its first report, is unpersuasive. If the parties had
in fact harbored a concern that a fixed deadline would not
properly account for § 316(e)’s inchoate date, the parties
could easily have incorporated the language of § 316(e) into
the Consent Decree, could have expressly referred to
§ 316(e), or could have set a finite date of September 30,

law, and even if the language of § 316(b) itself had been amended, rather
than a different provision of the Agent Orange Act, the VA’s reliance on
California law would not aid its cause. Under California law, Paragraph
3 of the Consent Decree requires the incorporation of a subsequently
passed law because it refers expressly to 38 U.S.C. § 316(b), a particular
statutory provision. See Torrance v. Workers’ Comp. Appeals Bd., 32 Cal.
3d 371, 378-79 (1982) (stating that when a contractual “instrument pro-
vides that it shall be enforced according either to the law generally or to
the terms of a particular . . . statute, the provision must be interpreted as
meaning the law or the statute in the form in which it exists at the time
of such enforcement” and holding that an agreement in which a state fund
agreed, on behalf of a city, “to pay promptly and directly to any person
entitled thereto under the Work[ers’] Compensation Laws” incorporated
future changes to those laws) (quoting 14 Cal. Jur. 3d, Contracts, § 173));
accord Jones-Hamilton Co. v. Kop-Coat, Inc., 750 F. Supp. 1022, 1028
(N.D. Cal. 1990), aff’d by 973 F.3d 688 (9th Cir. 1992). Moreover, con-
trary to the VA’s suggestion that this principle of California law applies
only to procedural statutes, the Torrance court applied the principle —
i.e., that a contract’s reference to the terms of a particular statutory provi-
sion incorporates subsequent statutory changes to that law — to the work-
ers’ compensation law as amended by subsequent changes that affected
the substantive obligations of the parties. 32 Cal.3d at 377-79.
8762                       NEHMER v. USDVA
2002, the latest possible sunset date under § 316(e); but they
chose none of these reasonable options. The VA’s contention
is far less plausible than the veterans’ argument that the par-
ties intentionally left the door open for the likely possibility
that Congress would extend § 316(b) by amending § 316(e),
because they were aware that Congress often re-authorizes or
extends similar popular programs that provide benefits to our
nation’s veterans.8

   [7] Finally, because the district court reasonably interpreted
Paragraph 3 of the Consent Decree to require readjudication
of prior claims, it also correctly concluded that, under Para-
graph 5, retroactive benefit payments are owed on such
claims. See Stipulation and Order 5 (stating that “[f]or any . . .
disease which may be service connected in the future pursuant
to paragraph 3 above,” the VA is required to set an effective
date for benefits based on the date the claim was filed or the
“date the claimant became disabled or death occurred”).
  8
    The VA seeks to rely on a statement in one of our earlier opinions
regarding the expiration date of the provision in question. Apparently
unaware of the fact that Congress had extended the Agent Orange Act in
December 2001, perhaps because the parties had filed all of their appellate
briefs by August 2001, we cited a statement the district court made in
1999 that “ ‘the Stip[ulation] & Order is not therefore boundless. The
[Agent Orange] Act expires in 2003. See 38 U.S.C. § 1116(e). The retro-
active benefit provisions of the Stip[ulation] & Order are expressly tied to
the Act so that initial claims filed after 2003 will fall outside the scope of
the Stip[ulation] & Order.’ ” Nehmer III, 284 F.3d at 1162. However, as
Judge Henderson explained in granting the plaintiff class’s motion for
clarification in 2005, when he made the statement in 1999 that we cited
in Nehmer III, it was his “expectation that the [Agent Orange] Act as it
appeared at that time would expire in late 2002,” and “since the Act had
not been extended at that point, it made sense to assume that expiration
would occur as originally stated in the Act.” This expectation did “not
mean that the parties or the courts incorporated that date as a hard and fast
condition of the Stip[ulation] & Order. Rather, this expectation was simply
a reflection that the Stip[ulation] & Order follows the life of the [Agent
Orange Act]; since the Act had not been extended at that point, it made
sense to assume that expiration would occur as originally stated in the
Act.” We find this explanation persuasive and consistent with the district
court’s well-reasoned interpretation of Paragraph 3 in the instant dispute.
                      NEHMER v. USDVA                       8763
V.    Conclusion

   Because the district court not only reasonably but correctly
interpreted its Consent Decree, we affirm the December 2005
order granting the veterans’ motion for clarification and
enforcement, as well as the April 2006 order establishing a
procedure for processing the veterans’ claims.

   The answer to the legal question on this appeal is quite
apparent. The Department of Veterans Affairs is obligated by
law to pay disability benefits to the veterans who are suffering
from Chronic Lymphocytic Leukemia as a result of their
exposure to Agent Orange, a noxious chemical widely used
by our government in the course of the Vietnam war. Three
different Congresses in three different decades have enacted
legislation signed by three different presidents, designed to
ensure the payment of such benefits to veterans afflicted with
Agent Orange-related ailments. What is difficult for us to
comprehend is why the Department of Veterans Affairs, hav-
ing entered into a settlement agreement and agreed to a con-
sent order some 16 years ago, continues to resist its
implementation so vigorously, as well as to resist equally vig-
orously the payment of desperately needed benefits to Viet-
nam war veterans who fought for their country and suffered
grievous injury as a result of our government’s own conduct.
Whether the Vietnam war was just or not, whether one
favored or opposed it, one thing is clear. Those young Ameri-
cans who risked their lives in their country’s service and are
even today suffering greatly as a result are deserving of better
treatment from the Department of Veterans Affairs than they
are currently receiving. We would hope that this litigation will
now end, that our government will now respect the legal obli-
gations it undertook in the Consent Decree some 16 years
ago, that obstructionist bureaucratic opposition will now
cease, and that our veterans will finally receive the benefits to
which they are morally and legally entitled.

     AFFIRMED.