Gray v. Secretary of Veterans Affairs
875 F.3d 1102 (Fed. Cir. 2017)
Authored by Hunjin Lee
Statement of Facts: The Agent Orange Act of 1991 provides the framework for adjudicating compensation claims for Vietnam War veterans with diseases incurred by herbicide exposure. The Act presumes that such diseases are caused by herbicide exposure during Vietnam War, if a veteran who “served in the Republic of Vietnam” during Vietnam War suffers from any of certain designated diseases. 38 U.S.C. § 1116(f). The Act also mandates the Department of Veterans Affairs (“VA”) to establish additional regulatory presumptions that a veteran’s service in Vietnam incurred or aggravated certain diseases. Id. § 1116(a).
In May 1993, the VA issued regulations that the Act should also find presumptive service connection for any veteran who served “in the waters offshore and service in other locations” as any veteran who served in the Republic of Vietnam, “if the conditions of service involved duty or visitation in the Republic of Vietnam.” 38 C.F.R. § 3.307(a)(6)(iii) (1993). However, the VA did not authorize the Act to recognize presumptive service connection for “Blue Water” veterans, the veterans who served in the open waters surrounding Vietnam. Moreover, VA also excluded veterans who served in bays, harbors, and ports of Vietnam from presumptive service connection. The VA did not go through the notice and comment rulemaking process to implement this additional restriction, but rather incorporated it into the M21-1 Manual.
The M21-1 Manual is an internal manual which VA adjudicators use for guidance, and the M21-1 Manual’s provisions only binds the Veterans Benefits Administration employees. Thus, the M21-1 Manual and any interpretations of the guidelines do not bind the Board of Veterans’ Appeals (“Board”). 38 C.F.R. § 19.5.
Procedural History: In 2007, Gray filed a claim for disability compensation based on his naval service in Da Nang Harbor during Vietnam War. However, the VA denied the claim pursuant to the M21-1 Manual and a February 2009 letter. The M21-1 Manual defines “service in the Republic of Vietnam (RVN)” as “service in the RVN or its inland waterways,” and February 2009 letter defines inland waterways not to mean “ . . . open deep-water coastal ports and harbors where there is no evidence of herbicide use.” M21-1 Manual, part IV, ch. 1, ¶ H.28.a (2005); Gray v. McDonald, 27 Vet. App. 313, 321–22 (2015). Thus, Gray appealed to the U.S. Court of Appeals for the Veterans Claims (“the Veterans Court”). The Veterans Court concluded that the VA’s definition of “inland waterway” was “both inconsistent with the regulatory purpose and irrational,” and remanded the matter to the VA with instructions to redefine inland waterways to be consistent with § 3.307(a)(6)(iii). Gray, 27 Vet. App. at 326–27. In February 2016, the VA published a Memorandum of Changes announcing a revision of the M21-1 Manual regarding the definition of inland waterways. Accordingly, the VA excluded all Navy veterans who served outside the newly defined inland waterways of Vietnam, such as ports, harbors, and open waters, from presumptive service connection for diseases connected with exposure to herbicides. Petitioners sought review of this revision pursuant to 38 U.S.C. § 502.
Question Presented: Whether the Federal Circuit has the jurisdiction to review the February 2016 revision to the M21-1 Manual under 38 U.S.C. § 502.
Holding: No, the Federal Circuit lacks jurisdiction to review the February 2016 revision to the M21-1 Manual under 38 U.S.C. § 502. The petition is dismissed for lack of jurisdiction.
Reasoning: Under 38 U.S.C. § 502, the Federal Circuit has jurisdiction to review only the agency actions that are subject to 5 U.S.C. §§ 552(a)(1) and 553, but not § 552(a)(2). The Federal Circuit recently ruled in Disabled American Veterans v. Secretary of Veterans Affairs (“DAV”), that M21-1 Manual revision is not reviewable under § 502. 859 F.3d 1072, 1074–75 (Fed. Cir. 2017). Although the M21-1 Manual provisions at issue here and those in DAV differ, their scope and binding effect are identical. The ruling in DAV compels the same result in this case.
In DAV, the Federal Circuit ruled that it does not have jurisdiction to review when an action does not have binding effect. The Federal Circuit found in DAV that the M21-1 Manual revision is not a § 553 rulemaking, because it does not carry the force of law. Id. at 1077. The Federal Circuit then held that the revisions in question “clearly fell under” § 552(a)(2), but not § 552(a)(1). Id. at 1078. This is because the M21-1 Manual provisions “[were] interpretations adopted by the agency, not published in the Federal Register, not binding on the Board itself, and contained within an administrative staff manual . . .” Id.
Similarly, the February 2016 revision is an interpretation adopted by the agency and the agency never published the revisions at issue in the Federal Register or the Code of Federal Regulations. Thus, the February 2016 revision does not intend to establish substantive rules. The Board is not bound by the M21-1 Manual. See id. And the revisions are contained within the M21-1 Manual, which is an administrative staff manual. Therefore, the February 2016 revision falls under § 552(a)(2), but not § 552(a)(1). While compliance with the February 2016 revision will impact the concerned veteran, the Board is still not bound to accept adjudications premised on that compliance.
Furthermore, this disposition does not take away petitioners’ right to recourse. For example, when a M21-1 Manual provision adversely impacts a veteran, the veteran can challenge the provison’s validity as regards to the facts of the case under 38 U.S.C. § 7292. DAV, 859 F.3d at 1078. Affected individuals and organizations can also petition the VA for rulemaking. Therefore, the Federal Circuit does not have the jurisdiction to review the February 2016 revision.
Concurring/Dissenting Opinion: Circuit Judge Dyk agreed with the majority’s holding that the Federal Circuit, bound by DAV, lacks jurisdiction to review the February 2016 revision to the M21-1 Manual. However, Circuit Judge Dyk contended that DAV had been wrongly decided. He added that DAV conflicts with Federal Circuit precedent and departs from the approach of other courts of appeals, as below. Additionally, DAV imposes a substantial and unnecessary burden on individual veterans.
In DAV, the Federal Circuit ruled that it lacked jurisdiction because the M21-1 Manual is an “interpretation adopted by the agency, [1] not published in the Federal Register, [2] not binding on the Board itself, and [3] contained within an administrative staff manual, they fall within § 552(a)(2)—not § 552(a)(1).” 859 F.3d at 1078. However, Circuit Judge Dyk was unconvinced by any of these three arguments. First, whether and where to publish a rule are not relevant in deciding the scope of § 552(a)(1). Second, though not binding on the Board itself, there are circumstances where agency actions are reviewable under § 552(a)(1) because they had a binding effect on parties or entities other than internal VA adjudicators. See Lefevre v. Secretary, Department of Veterans Affairs, 66 F.3d 1191, 1196–98 (Fed. Cir. 1995). Additionally, other circuits have held reviewable agency actions that were binding on subordinate agency officials. See Appalachian Power Co. v. Environmental Protection Agency, 208 F.3d 1015, 1022 (D.C. Cir. 2000). For example, the District of Columbia Circuit found an informally published Clean Air Act guidance which was not subject to notice and comment to be a “final agency action, reflecting a settled agency position which has legal consequences.” Id. at 1020–23. Additionally, the District of Columbia Circuit recognized a Federal Highway Administration investigative training manual to be reviewable. Aulenback, Inc. v. Fed. Highway Admin., 103 F.3d 156, 163–65 (D.C. Cir. 1997). Finally, DAV’s reasoning that § 552(a)(2) and § 552(a)(1) are mutually exclusive is wrong. There is no support for the view that provisions of agency manuals are not rules of general applicability for purposes of § 552(a)(1) just because they are described in § 552(a)(2).
Moreover, precedent from the Supreme Court, other courts of appeals, and the Federal Circuit held that similar agency pronouncements are included under § 552(a)(1) despite appearing within agency manuals. For instance, the Supreme Court ruled that it was necessary to publish the Indian Affairs Manual provisions in the Federal Register pursuant to § 552(a)(1)(D). Morton v. Ruiz, 415 U.S. 199, 232–36 (1974). The 9th Circuit also held that a provision of the Medicare Carrier’s Manual was subject to § 552(a)(1)(D)’s publication. Linoz v. Heckler, 800 F.2d 871, 878 n.11 (9th Cir. 1986). Finally, the Federal Circuit found that provisions of Army Standard Operating Procedures document were subject to § 552(a)(1)(D) publication. NI Industries, Inc. v. United States, 841 F.2d 1104, 1107 (Fed. Cir. 1988).
Circuit Judge Dyk even found the majority’s approach to be inconsistent with the Federal Circuit’s prior rulings that focused on the effect of an agency action rather than its form. For example, the Federal Circuit found a VA letter to be reviewable because a VA letter affects the veteran’s rights. Military Order of the Purple Heart v. Secretary of Veterans Affairs, 580 F.3d 1293, 1296 (Fed. Cir. 2009); see also Coalition for Common Sense in Government Procurement v. Secretary of Veterans Affairs, 464 F.3d 1306, 1316–18 (finding jurisdiction to review a VA letter because of its effect within the agency and on outside parties, but not because of its form).
Therefore, Circuit Judge Dyk concluded that DAV had been wrongly decided because it is inconsistent with the previous rulings of the Federal Circuit and other courts, which have found the provisions of agency manuals and similar documents to be subject to pre-enforcement review.