Atilano v. McDonough

12 F.4th 1375

• Court: Court of Appeals for the Federal Circuit
• Decided: September 14, 2021
• Docket: 20-1579
• Status: Published

Opinion

Case: 20-1579 Document: 57 Page: 1 Filed: 09/14/2021

United States Court of Appeals for the Federal Circuit ______________________

JESUS G. ATILANO, Claimant-Appellant

v.

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

2020-1579 ______________________

Appeal from the United States Court of Appeals for Veterans Claims in No. 17-1428, Judge Amanda L. Mere- dith, Judge Coral Wong Pietsch, Judge Joseph L. Toth. ______________________

Decided: September 14, 2021 ______________________

SEAN A. RAVIN, Miami, FL, argued for claimant-appel- lant.

SOSUN BAE, Commercial Litigation Branch, Civil Divi- sion, United States Department of Justice, Washington, DC, argued for respondent-appellee. Also represented by CLAUDIA BURKE, JEFFREY B. CLARK, ROBERT EDWARD KIRSCHMAN, JR.; MARTIE ADELMAN, Y. KEN LEE, Office of General Counsel, United States Department of Veterans Affairs, Washington, DC. ______________________ Case: 20-1579 Document: 57 Page: 2 Filed: 09/14/2021

Before LOURIE, TARANTO, and STOLL, Circuit Judges. STOLL, Circuit Judge. Jesus G. Atilano appeals the decision of the United States Court of Appeals for Veterans Claims affirming the Board of Veterans’ Appeals’s decision to treat Mr. Atilano’s personal absence from his hearing as a withdrawal of his hearing request. According to the Veterans Court, 38 U.S.C. § 7107 (2018) unambiguously requires that an appellant exercising the right to a Board hearing person- ally participate in that hearing. Because we conclude that § 7107 does not unambiguously so require, we vacate and remand for further consideration of the statute and the agency’s related regulations. BACKGROUND I Mr. Atilano served on active duty in the Army from 1964 through 1966, including in Vietnam. In 1995, Mr. Atilano filed his initial application for veterans disabil- ity compensation for post-traumatic stress disorder (PTSD) with the El Paso Regional Office (RO) of the Department of Veterans Affairs (VA). In 2002, Mr. Atilano testified that his diagnosis of PTSD adversely affected his ability to maintain a job. In 2010, the RO granted Mr. Atilano’s claim for entitlement to service connection for PTSD with an evaluation of fifty percent effective July 31, 1995. The RO explained that this evaluation was for occupational and social impairment with reduced reliability and productiv- ity. Later in 2010, Mr. Atilano applied for increased com- pensation based on total disability individual unemploya- bility (TDIU). In 2012, the RO denied this request. Mr. Atilano filed a Notice of Disagreement (NOD) with the RO, asserting that it had failed to make specific determi- nations and that it had also failed to address all relevant evidence. Agreeing with Mr. Atilano, in December 2014, Case: 20-1579 Document: 57 Page: 3 Filed: 09/14/2021

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the RO granted him entitlement to TDIU effective Au- gust 31, 2010, and his evaluation of PTSD was increased to seventy percent disabling effective December 17, 2010. The RO explained that it assigned a seventy percent eval- uation for his PTSD based on his “[d]ifficulty in adapting to work,” “[o]bsessional rituals which interfere with routine activities,” “[d]ifficulty in adapting to a worklike setting,” “[s]uicidal ideation,” “[o]ccupational and social impairment with reduced reliability and productivity,” “[c]hronic sleep impairment,” “[a]nxiety,” and the “examiner’s assessment of [his] current mental functioning.” J.A. 205. Mr. Atilano filed another timely NOD disagreeing with the disability ratings and effective dates assigned. He perfected his ap- peal with the Board in January 2015 by filing “VA Form 9.” In October 2015, Mr. Atilano requested a hearing be- fore the Board’s central office in Washington, DC to present medical expert testimony regarding his PTSD from a li- censed psychologist and certified rehabilitation counselor. Mr. Atilano requested a hearing date of April 6, 2016, so that his medical expert could testify both at his hearing and at the hearings of other appellants represented by his counsel, allowing the appellants to share costs related to the expert’s testimony. He later changed the requested date to June 13, 2016, and the Board agreed. On the day of the hearing, Mr. Atilano’s counsel and his medical expert, Dr. Elaine Tripi, appeared before the Board, but Mr. Atilano did not. Mr. Atilano was unable to attend the hearing because of his severe disabilities. Vet- erans Law Judge Reinhart refused to hear Dr. Tripi’s ex- pert testimony because Mr. Atilano was not present for the hearing. Unable to present live expert testimony, Mr. Ati- lano’s counsel requested a 60-day extension of time to sub- mit written evidence and argument in support of the appeal to the Board. Mr. Atilano subsequently submitted an informal brief to the Board and attached a written med- ical expert opinion by Dr. Tripi. Case: 20-1579 Document: 57 Page: 4 Filed: 09/14/2021

The Board ultimately denied Mr. Atilano’s request for entitlement to an increased disability rating for his evalu- ation of PTSD and earlier effective dates for both his disa- bility and TDIU. In rejecting Mr. Atilano’s claim, the Board found that Dr. Tripi’s report was not consistent with objective medical findings. As to the refusal to let Dr. Tripi testify in person without Mr. Atilano present, the Board ex- plained that “[p]ursuant to 38 C.F.R. § 20.700(b), the pur- pose of a hearing is to receive argument and testimony relevant and material to the appellate issue,” and that “[i]t is contemplated that the appellant and witnesses, if any, ‘will be present.’” [Title Redacted by Agency], No. 97-06 321, 2017 WL 2498917, at *7 (B.V.A. Apr. 18, 2017). The Board then explained that, “[u]nder 38 C.F.R. § 20.702(d), if an appellant fails to appear for a scheduled hearing and a request for postponement has not been re- ceived and granted, the case will be processed as though the request for a hearing had been withdrawn.” Id. The Board also stated its view that the purpose of the hearing is to take testimony from the appellant, and that “allowing an expert witness to provide testimony before a VLJ with- out the appellant subverts the purpose of a Board hearing, expends limited resources, and prevents another veteran” from having a timely hearing and adjudication. Id. at *9. The Board further held that under § 20.702(d), “[i]f the Veteran, either on his own or by way of his attorney, had provided good cause for his failure to appear at the hearing, then the presiding Board member can allow for testimony from the Veteran’s witnesses.” Id. at *7. The Board found that Mr. Atilano’s cause for not attending the hearing— that he was too disabled to attend—did not satisfy the good cause requirement. Id. In so finding, the Board empha- sized that Mr. Atilano’s counsel had several other hearings scheduled that day, in which Dr. Tripi likewise appeared to testify but that the veterans did not attend. Case: 20-1579 Document: 57 Page: 5 Filed: 09/14/2021

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II The Veterans Court affirmed the Board. Atilano v. Wilkie, 31 Vet. App. 272, 275 (2019). The sole issue be- fore the Veterans Court was whether a veteran must be present at his hearing for his legal representative to elicit sworn testimony from witnesses before the Board. At step one of Chevron, the Veterans Court concluded that the lan- guage of 38 U.S.C. § 7107 (2018) unambiguously requires the appellant’s participation at his hearing. Id. at 279 (cit- ing Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842 (1984)). The Veterans Court started its analysis with § 7107(b), which states: “The Board shall decide any appeal only after affording the appellant an opportunity for a hearing.” Id. at 279. Citing definitions of the term “hearing” in Web- ster’s Ninth Dictionary and Black’s Law Dictionary, the Veterans Court explained that the language of § 7107(b) requires “that the opportunity to speak to, be heard by, be- come known to, or present a case before the Board member is not general in nature but is ‘afford[ed]’ to ‘the appel- lant.’” 1 Id. (alteration in original). The Veterans Court also relied on § 7107(d)(1)(A)(ii), which states: “The Board shall also determine whether to provide a [virtual] hearing . . . or by the appellant personally appearing before a Board

1 Webster’s Ninth Dictionary defines “hearing” as the “opportunity to be heard, to present one’s side of a case, or to be generally known or appreciated.” Atilano, 31 Vet. App. at 279 (citing WEBSTER’S NINTH NEW COLLEGIATE DICTIONARY 559 (1990) [WEBSTER’S NINTH]). Black’s Law Dictionary defines “hearing” as consisting “of any confrontation, oral or otherwise, between an affected individual and an agency decision-maker sufficient to allow [the] individual to present his case in a meaningful man- ner.” Atilano, 31 Vet. App. at 279 (citing BLACK’S LAW DICTIONARY 721 (6th ed. 1990)). Case: 20-1579 Document: 57 Page: 6 Filed: 09/14/2021

member or panel.” Id. at 280. The court reasoned that “there can’t be any dispute about what the italicized lan- guage means: to come formally before an authoritative body and to do so in person and for oneself.” Id. (internal quotation marks omitted). Finally, the court cited § 7107(e)(2), pertaining to virtual hearings, which states that any virtual hearing “shall be conducted in the same manner as, and shall be considered the equivalent of, a per- sonal hearing.” See id. The court reasoned that “[f]or such hearings to be conducted in the same way and considered equivalent to in-person hearings, they must require the participation of the appellant.” Id. The Veterans Court thus reasoned that the “overall statutory structure of sec- tion 7107 confirms that an appellant exercising the right to a[n in-person or virtual] Board hearing must participate in that hearing.” Id. In the alternative, the Veterans Court concluded that the VA’s regulations interpreting § 7107 reflect a reasona- ble construction of the statute—satisfying Chevron step two—and that the regulations “do not allow an appellant to refuse to participate in a hearing under these circum- stances.” Id. at 281–83 (citing Chevron, 467 U.S. at 843). Mr. Atilano appeals. We have jurisdiction under § 7292. DISCUSSION I On appeal, Mr. Atilano challenges the Veterans Court’s interpretation of 38 U.S.C. § 7107 (2018). “We re- view statutory and regulatory interpretations of the Veter- ans Court de novo.” Gazelle v. Shulkin, 868 F.3d 1006, 1009 (Fed. Cir. 2017) (quoting Parrott v. Shulkin, 851 F.3d 1242, 1247 (Fed. Cir. 2017)). Mr. Atilano contends that the Veterans Court’s inter- pretation of § 7107 incorrectly eliminates the right of a se- verely disabled veteran to an in-person hearing. Case: 20-1579 Document: 57 Page: 7 Filed: 09/14/2021

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Specifically, he asserts that the Veterans Court misinter- preted § 7107 “as requiring the presence and participation of the appellant [as opposed to appellant’s counsel] as a pre- requisite to calling witnesses and presenting testimony, in- cluding the sworn testimony of a medical expert.” Appellant’s Br. 15. He asserts that the Veterans Court’s interpretation ignores provisions allowing veterans to be represented by counsel. He further contends that such an interpretation would allow only those veterans who can personally appear and participate in hearings before the Board to benefit from live testimony. In other words, the Veterans Court’s interpretation would exclude any veteran who is bed ridden or living with a severe mental disability that prevents travel or appearance at a hearing from pre- senting live testimony from experts, lay persons, or family members on the veteran’s behalf in an appeal. The government contends that the language of the stat- ute unambiguously requires that the veteran be present for the hearing unless good cause is shown for his absence. As- suming the statute is ambiguous, however, the government concedes that 38 C.F.R. § 20.700(b) does not require the ap- pellant to personally appear, but rather that it merely con- templates the person appearing for the hearing. Oral Arg. at 19:37–20:20, http://oralarguments.cafc.uscourts.gov/de- fault.aspx?fl=20-1579_04062021.mp3. Nonetheless, the government asserts that other regulatory provisions re- quire a veteran to appear in person or forfeit his right to an in-person hearing and that this represents a reasonable in- terpretation of § 7107. The Veterans Court proceeded under the two-step framework of analysis for statutory interpretation set forth in Chevron, 467 U.S. at 842–43. The first step in that framework is to determine “whether Congress has directly spoken to the precise question at issue.” Id. at 842. If Con- gress’s intent is clear, the court and the agency “must give effect to the unambiguously expressed intent of Congress.” Id. at 842–43. The Veterans Court ruled that the statute Case: 20-1579 Document: 57 Page: 8 Filed: 09/14/2021

unambiguously requires the claimant’s personal presence at the hearing. We reject that ruling. II To determine whether Congress has expressed a par- ticular unambiguous intent, we employ traditional tools of statutory construction and examine “the statute’s text, structure, and legislative history, and apply the relevant canons of interpretation.” Heino v. Shinseki, 683 F.3d 1372, 1378 (Fed. Cir. 2012) (quoting Delverde, SrL v. United States, 202 F.3d 1360, 1363 (Fed. Cir. 2000)). For the reasons provided below, we conclude that § 7107 does not unambiguously establish that a veteran must be pre- sent at his hearing to present expert testimony. The stat- ute is at best silent on the point. Nothing in the language of § 7107 speaks to whether an appellant must personally attend his hearing or forfeit his right to that hearing. Section 7107(b) states only that an “appellant” is afforded “an opportunity for a hearing.” It says nothing about who must attend the hearing. In or- dinary legal usage, a party can be given a “hearing” solely for the party’s counsel to argue or for presentation of testi- mony by a person other than the party, with the party not present but represented in person by counsel. Sec- tion 7107(b)’s language does not indicate a special nar- rower meaning. Nor does it distinguish between appellants who are physically and mentally capable of par- ticipating at a hearing and those who are not. While the opportunity for a hearing is “afforded to the appellant,” nothing in this statutory language demands the appellant’s presence when the appellant is represented by an agent or counsel. Nor do the other subsections of § 7107 support the Vet- erans Court’s interpretation. Although § 7107(d)(1)(A)(ii) refers to an “appellant personally appearing before a Board member,” that section is more reasonably read as distin- guishing between what the statute refers to as a personal Case: 20-1579 Document: 57 Page: 9 Filed: 09/14/2021

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Board hearing and a virtual Board hearing. The pertinent language states: “The Board shall also determine whether to provide a [virtual] hearing . . . or by the appellant per- sonally appearing before a Board member or panel.” § 7107(d)(1)(A)(ii) (emphasis added). We read the words “personally appearing” in this subsection to refer to an in- person hearing. Likewise, the Veterans Court’s citation of § 7107(e)(2)—which states that any virtual hearing will be “conducted in the same manner as, and shall be considered the equivalent of, a personal hearing”—is unavailing be- cause the recitation of “personal hearing” is simply a refer- ence to an in-person hearing as opposed to a virtual hearing. We also fail to see how the definitions of “hearing” cited by the Veterans Court support its interpretation of § 7107. Neither the definition in Webster’s Ninth nor the definition in Black’s Law Dictionary requires a party to be present for a “hearing.” Rather, under both definitions, an attorney representative could reasonably take the place of the ap- pellant, and the appellant would still be afforded the “op- portunity to be heard, to present one’s side of a case, or to be generally known or appreciated” or be able to present his or her case “to an agency decision-maker . . . in a mean- ingful manner” through the testimony of other witnesses. See WEBSTER’S NINTH at 559; BLACK’S LAW at 721. We also consider “the placement and purpose of the language within the statutory scheme.” Barela v. Shinseki, 584 F.3d 1379, 1383 (Fed. Cir. 2009). The overall statutory structure of Title 38 supports Mr. Atilano’s view that a vet- eran may be represented by an agent or counsel, who may request a hearing to present non-party witness testimony under § 7107. For example, under 38 U.S.C. § 5904, Con- gress granted the Secretary the authority to “recognize any individual as an agent or attorney for the preparation, presentation, and prosecution of claims under laws admin- istered by the Secretary.” Given the statutory authority for veterans to be represented by agents or attorneys before Case: 20-1579 Document: 57 Page: 10 Filed: 09/14/2021

the Board, it would seem inappropriate to construe § 7107 to deny hearings for those represented veterans unable to attend in person without clear statutory language instruct- ing as such. Beyond the statute’s text, we may also consider the leg- islative history of the statute. Gilead Scis., Inc. v. Lee, 778 F.3d 1341, 1348 (Fed. Cir. 2015). The Veterans Court previously addressed the legislative history of § 7107 in Cook v. Snyder, 28 Vet. App. 330 (2017). In Cook, the Vet- erans Court explained that a “claimant’s right to a personal hearing before the Board has long been guaranteed by [the] VA.” Id. at 336. Dating back to World War II, the right was originally penned in the Rules of Practice of the Board of Veterans’ Appeals, which recited that “a hearing will be allowed, if desired by the claimant or his representative.” Id. (emphasis added). This rule was then published in the Code of Federal Regulations in 1964, specifying that a “hearing on appeal shall be granted where a claimant or his representative expresses a desire to appear in person.” 38 C.F.R. § 19.133(a) (1965) (emphasis added). Then, in 1988, Congress codified this requirement by amending 38 U.S.C. § 4004(a) to add that “[t]he Board shall decide any such appeal only after affording the claimant an oppor- tunity for a hearing.” 38 U.S.C. § 4004(a) (1988); see also Cook, 28 Vet. App. at 336. This provision was then codified in 38 U.S.C. § 7107(b) (2018). 2 The accompanying Senate Veterans’ Affairs Commit- tee report explained that the statute “would codify a right currently provided by [§ 19.133(a)] to an opportunity for a hearing before the [Board].” Cook, 28 Vet. App. at 336 (al- terations in original) (quoting S. Rep. No. 100-418, at 34 (1988)). “In the Committee’s view, the right to a hearing is so fundamental to fair proceedings that it should be

2 Effective April 10, 2020, § 7107 was amended to ex- clude the language in subsection (b). Case: 20-1579 Document: 57 Page: 11 Filed: 09/14/2021

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elevated to the level of a statutory guarantee.” Id. (quoting S. Rep. No. 100-418, at 34). The Committee report ex- plained that “a personal appearance before the Board makes a significant difference in achieving favorable reso- lution of a claim.” Id. at 337 (quoting S. Rep. No. 100-418, at 39). Because § 7107 was intended to codify a long-standing rule allowing a request for a hearing by the claimant or the claimant’s representative, we view this history as fairly supporting Mr. Atilano’s interpretation of the statute to al- low a veteran’s representative to participate on the claim- ant’s behalf by presenting witness testimony at a Board hearing even if the veteran is too disabled to attend. At a minimum, this history does not support an interpretation that would deny the fundamental right to a hearing to those veterans whose disability is so severe that they can- not attend the hearing. We hold that the Veterans Court erred as a matter of law when it held that “the plain meaning of the statute’s text requires an appellant’s in-person or electronic partici- pation.” See Atilano, 31 Vet. App. at 281. Rather, the lan- guage of § 7107 does not unambiguously require a veteran to be present at his hearing for his legal representative to elicit sworn testimony from witnesses before the Board. III That is all we decide. The Veterans Court briefly ap- plied Chevron step two, but its analysis of that issue war- rants reconsideration. The Veterans Court’s analysis focused on whether the regulations conflicted with its er- rant interpretation of § 7107. See Atilano, 31 Vet. App. at 282 (stating that “[n]othing in these regulations stands in tension with the text of section 7107” and “there is simply no indication that the regulations quoted above con- flict with section 7107”). Further analysis is warranted re- garding whether the regulations actually demand the veteran’s attendance or say something less, as suggested Case: 20-1579 Document: 57 Page: 12 Filed: 09/14/2021

by the agency’s concession in this court. See supra p. 7. It is possible, moreover, that particular regulations invoked by the agency do not warrant Chevron deference as an in- terpretation of a statute. 3 Indeed, if the agency adopted the regulations based on its more general authority to adopt regulations about the conduct of Board proceedings, without purporting to be interpreting language of § 7107— which the agency has not argued before us—Chevron def- erence would not seem to be the issue, but, rather, compli- ance with the judicial review standards of 38 U.S.C. §§ 7261 and 7292. Finally, if Chevron applies, any regula- tory adoption of the position the agency urges must be tested to ensure that it is not itself contrary to “unambigu- ous statutory language” and is not an “unreasonable reso- lution of language that is ambiguous.” United States v. Eurodiff S.A., 555 U.S. 305, 316 (2009). The effect on veterans so disabled that they cannot be present in person seems relevant to at least the reasonableness issue. We do not decide those matters in the first instance. Nor do we decide whether, if the Board erred in refusing to

3 See Cook v. Wilkie, 908 F.3d 813, 817 (Fed. Cir. 2018) (“The Secretary has not requested Chevron deference for his interpretation, and we agree with the Veterans Court’s conclusion that no such deference is warranted be- cause the Secretary has not promulgated a regulation in- terpreting § 7107(b).”); Atilano, 31 Vet. App. at 284 (“It is true that a regulation predating a statute cannot have been promulgated to interpret the statute and, hence, is not en- titled to Chevron deference. . . . Such was the situation with subsection (a) of Rule 700.” (citation omitted)); Pub. Citizen, Inc. v. U.S. Dep’t of Health & Hum. Servs., 332 F.3d 654, 659 (D.C. Cir. 2003) (“[R]egulations cannot provide a basis for deferring to the [agency’s] interpretation of the meaning of the subsequently enacted [statutory] phrase . . . .”). Case: 20-1579 Document: 57 Page: 13 Filed: 09/14/2021

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permit the medical expert to testify in person without Mr. Atilano’s presence, that error was harmless. 4 CONCLUSION For the foregoing reasons, we vacate the Veterans Court’s decision and remand for proceedings consistent with this opinion. VACATED AND REMANDED COSTS No costs.

4 We note that Mr. Atilano did not challenge the VA’s regulations as arbitrary and capricious. Thus, we do not consider that question in this appeal either.