Barry v. McDonough

101 F.4th 1348
Court of Appeals for the Federal Circuit·Decided May 16, 2024·No. 22-1747·Published·Cited by 3 cases

Opinion

United States Court of Appeals for the Federal Circuit

DANIEL D. BARRY, Claimant-Appellant

v.

DENIS MCDONOUGH, SECRETARY OF VETERANS AFFAIRS, Respondent-Appellee

2022-1747

Appeal from the United States Court of Appeals for Veterans Claims in No. 20-3367, Judge Grant Jaquith, Judge Joseph L. Falvey, Jr, Judge Michael P. Allen.

Decided: May 16, 2024

JINGYUAN LUO, Orrick, Herrington & Sutcliffe LLP, Menlo Park, CA, argued for claimant-appellant. Also represented by MELANIE L. BOSTWICK, Washington, DC; KENNETH DOJAQUEZ, Carpenter Chartered, Topeka, KS.

MARTIN F. HOCKEY, JR., Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington , DC, argued for respondent-appellee. Also represented by SOSUN BAE, BRIAN M. BOYNTON, PATRICIA M. MCCARTHY; BRIAN D. GRIFFIN, ANDREW J. STEINBERG, 2 BARRY v. MCDONOUGH

Office of General Counsel, United States Department of Veterans Affairs, Washington, DC.

Before LOURIE, PROST, and REYNA, Circuit Judges. Opinion for the court filed by Circuit Judge PROST. Dissenting opinion filed by Circuit Judge LOURIE.

PROST, Circuit Judge.

Daniel D. Barry appeals a final decision of the United States Court of Appeals for Veterans Claims (“Veterans Court”) limiting his entitlement to additional special monthly compensation (“SMC”). Barry v. McDonough, 35 Vet. App. 111 (2022) (“Decision”). In the underlying proceedings , Mr. Barry argued that the Board of Veterans’ Appeals (“Board”) should have considered his entitlement to multiple SMC increases, rather than just one, under 38 C.F.R. § 3.350(f)(3). 1 A majority of the Veterans Court disagreed and interpreted § 3.350(f)(3) to permit only one SMC increase, regardless of how many qualifying disabilities Mr. Barry could demonstrate. As we explain below, § 3.350(f)(3) does not limit how many SMC increases can be provided; instead, it is a mandatory entitlement that can apply multiple times, subject to a statutory cap. We thus reverse and remand.

BACKGROUND

I

The United States recognizes the sacrifices that veterans like Mr. Barry make when they serve our country. Whenever a veteran has a “disability resulting from personal injury suffered . . . in line of duty . . . during a period

1 The text of the statutory and relevant regulatory provisions are set out in the appendix.

BARRY v. MCDONOUGH 3

of war” the United States “will pay” that veteran. 38 U.S.C. § 1110. Congress has outlined these payments in 38 U.S.C. § 1114. The exact amount of compensation for a disabled veteran depends on that veteran’s disability rating. The compensation amount increases as the disability rating increases in increments of 10%, with the maximum at a 100%, or total, rating. 38 U.S.C. § 1114(a)–(j).

Congress recognized, however, that veterans may have additional disabling conditions that warrant extra compensation beyond the compensation for a total disability rating . It therefore enacted SMC provisions to provide extra compensation to “exceptionally disabled veterans who are rated as totally disabled.” Guerra v. Shinseki, 642 F.3d 1046, 1048 (Fed. Cir. 2012). The details of these SMC provisions are listed in § 1114(k)–(t). Demonstrating eligibility for SMC requires a veteran to show specific disabling conditions.

It was recognized early on that the specificity of these provisions could potentially lead to arguable inequities. For example, while a veteran may not be able to show “the anatomical loss of both legs with factors that prevent the use of prosthetic appliances,” as § 1114(n) specifically requires , he may have other disabilities with an equivalent cumulative impact. Thus, to allow for more flexibility, Congress amended the predecessor to § 1114 in 1945 “to provide additional rates of compensation or pension and remedy inequalities as to specific service-incurred disabilities in excess of total disability.” Act of September 20, 1945, Pub. L. No. 79-182, ch. 369, sec. 1, 59 Stat. 533, 533. It did so by adding subsection (p), which at the time stated that, “[i]n the event the disabled person’s service-incurred disabilities exceed the requirements for any of the rates prescribed herein, the Administrator, in his discretion, may allow the next higher rate or an intermediate rate, but in no event in excess of” the statutory cap. Id. sec. 1, 59 Stat. at 534. This subsection provided the Administrator (now the Secretary of Veterans Affairs (“Secretary”))

4 BARRY v. MCDONOUGH

discretion to fairly compensate a veteran for additional disabilities for which Congress did not specifically provide.

Section 1114(p) exists in substantially the same form today. The relevant portion here provides that, “in the event the veteran’s service-connected disabilities exceed the requirements for any of the rates prescribed in this section , the Secretary may allow the next higher rate or an intermediate rate, but in no event in excess of” a statutory cap. 38 U.S.C. § 1114(p). The intermediate rate in § 1114(p) is “the arithmetic mean, rounded down to the nearest dollar, between the two rates concerned.”

The Secretary has implemented § 1114(p)’s discretionary clause in various provisions of 38 C.F.R. § 3.350(f). Section 3.350(f)(3), our focus in this case, provides:

Additional independent 50 percent disabilities . In addition to the statutory rates payable under 38 U.S.C. 1114 (l) through (n) and the intermediate or next higher rate provisions outlined above, additional single permanent disability or combinations of permanent disabilities independently ratable at 50 percent or more will afford entitlement to the next higher intermediate rate or if already entitled to an intermediate rate to the next higher statutory rate under 38 U.S.C. 1114, but not above the (o) rate. In the application of this subparagraph the disability or disabilities independently ratable at 50 percent or more must be separate and distinct and involve different anatomical segments or bodily systems from the conditions establishing entitlement under 38 U.S.C. 1114 (l) through (n) or the intermediate rate provisions outlined above. The graduated ratings for arrested tuberculosis will not be utilized in this connection, but the permanent residuals of tuberculosis may be utilized.

BARRY v. MCDONOUGH 5

38 C.F.R. § 3.350(f)(3) (first emphasis in original, all other emphasis added).

II

Mr. Barry served in the Army from July 31, 1969, to November 18, 1971. He earned a Purple Heart for his service after being injured during combat. His resulting injuries were, and are, significant. At the time, they required an open amputation of his right leg above the knee. He also suffered an extensive loss of tissue on his left leg that exposed his tibia, had fragment wounds in his right hand and eye, and received injuries to both ears. In all, Mr. Barry remained in the hospital for thirteen months until he received disability retirement from the military.

The Department of Veterans Affairs (“VA”) initially gave Mr. Barry a 100% disability rating and awarded him SMC. After receiving several subsequent rating decisions, Mr. Barry received the rating decision at issue here in December 2014. His compensated disabling conditions include the amputation of his right leg above the knee, rated at 100%, the loss of use of his left foot, the loss of use of his left leg, and a constellation of other conditions related to his legs and feet. Based on these ratings, Mr. Barry received SMC at the rate specified in 38 U.S.C. § 1114(m) and received an intermediate-rate increase in his SMC under 38 C.F.R. § 3.350(f)(3).

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Barry v. McDonough, 101 F.4th 1348 (Fed. Cir. 2024).

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