Denorris Andrews v. Secretary, Department of Veterans Affairs

• Court: Court of Appeals for the Eleventh Circuit
• Decided: February 11, 2021
• Docket: 20-10849
• Status: Unpublished

Opinion

USCA11 Case: 20-10849 Date Filed: 02/11/2021 Page: 1 of 10

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

No. 20-10849 Non-Argument Calendar ________________________

D.C. Docket No. 1:18-cv-01533-JPB

BERTHA ANDREWS,

Plaintiff,

DENORRIS ANDREWS, JAMES ANDREWS, c/o Clarence Andrews, Ward,

Plaintiffs – Appellants,

versus

SECRETARY, DEPARTMENT OF VETERANS AFFAIRS, GOVERNOR FOR THE STATE OF GEORGIA, on Behalf of the Georgia General Assembly, KAREN C. GAINEY, ESQ., individually,

Defendants - Appellees, USCA11 Case: 20-10849 Date Filed: 02/11/2021 Page: 2 of 10

PROBATE JUDGE, on behalf of the Probate Court of Fulton County,

Defendant.

________________________

Appeal from the United States District Court for the Northern District of Georgia ________________________

(February 11, 2021)

Before WILSON, MARTIN, and GRANT, Circuit Judges.

PER CURIAM:

Plaintiffs DeNorris Andrews and James Andrews appeal the district court’s

dismissal of their complaint based on sovereign immunity and lack of subject

matter jurisdiction. Plaintiffs’ claims stem from alleged overpayments that the

Department of Veterans Affairs (VA) authorized to a fiduciary responsible for

distributing VA benefits. Because Congress has broadly precluded judicial review

of decisions necessary to VA benefits determinations, the district court lacked

subject matter jurisdiction to decide Plaintiffs’ claims. Therefore, we affirm.

BACKGROUND

Plaintiffs were the legal guardians of their brother, Clarence Andrews, an

incapacitated Vietnam War veteran. 1 Defendant Karen Gainey was appointed as

1 Plaintiffs filed a motion on November 20, 2019, notifying the district court that Clarence Andrews is now deceased. The motion also stated that Bertha Andrews, Clarence’s mother and a 2 USCA11 Case: 20-10849 Date Filed: 02/11/2021 Page: 3 of 10

the fiduciary in charge of Andrews’s VA benefits. For her services, Gainey

collected a commission amounting to five percent of Andrews’s benefits, which is

permissible under Georgia law. See O.C.G.A. § 29-7-15. However, Plaintiffs

allege that Gainey’s commission was one percent higher than what the Secretary of

Veterans Affairs can authorize because federal law limits commissions to four

percent. See 38 U.S.C. § 5502(a)(2).

Plaintiffs sued three defendants: (1) Secretary Robert Wilkie (2) Gainey, and

(3) Governor Brian Kemp. The district court first dismissed Plaintiffs’ claim

against Secretary Wilkie, finding that it was barred by sovereign immunity. In a

subsequent order, the district court dismissed Plaintiffs’ claims against Gainey and

Governor Kemp for lack of subject matter jurisdiction. This appeal followed.

STANDARD OF REVIEW

We review de novo a district court’s dismissal for lack of subject matter

jurisdiction. Zelaya v. United States, 781 F.3d 1315, 1321 (11th Cir. 2015).

DISCUSSION

Federal courts are courts of limited jurisdiction. Univ. of S. Alabama v. Am.

Tobacco Co., 168 F.3d 405, 409 (11th Cir. 1999). “They are empowered to hear

only those cases within the judicial power of the United States as defined by

named plaintiff, is now deceased. Plaintiffs’ motion asked the court to allow Denorris Andrews and James Andrews to continue this action as administrators of Clarence’s estate. 3 USCA11 Case: 20-10849 Date Filed: 02/11/2021 Page: 4 of 10

Article III of the Constitution, and which have been entrusted to them by a

jurisdictional grant authorized by Congress.” Id. (internal quotation marks

omitted). When interpreting statutes establishing jurisdiction, “federal courts

should proceed with caution.” Id. (internal quotation marks omitted). The

presumption is that a claim lies outside a federal court’s jurisdiction, “and the

burden of establishing the contrary rests upon the party asserting jurisdiction.”

Bishop v. Reno, 210 F.3d 1295, 1298 (11th Cir. 2000).

Through the Veterans’ Judicial Review Act (VJRA), Congress created an

exclusive scheme for the review of claims affecting veterans’ benefits. Under the

VJRA, “the Secretary shall decide all questions of law and fact necessary to a

decision by the Secretary under a law that affects the provision of benefits by the

Secretary to veterans or the dependents or survivors of veterans.” 38 U.S.C. §

511(a). Determinations by the Secretary may be appealed exclusively to the Board

of Veterans’ Appeals. Id. § 7104(a). The Board’s decisions may be appealed to

the Court of Appeals for Veterans Claims, an Article I tribunal created by the

VJRA. Id. §§ 7251, 7252(a). And decisions of the Court of Appeals for Veterans

Claims are appealable solely to the Federal Circuit. Id. § 7292(c). The Federal

Circuit has “exclusive jurisdiction to review and decide any challenge to the

validity of any statute or regulation or any interpretation thereof brought under this

section, and to interpret constitutional and statutory provisions, to the extent

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presented and necessary to a decision.” Id. Because the VJRA establishes an

exclusive regime, district courts are divested of jurisdiction where the VJRA

applies.

The VJRA is broad. See Anestis v. United States, 749 F.3d 520, 525 (6th

Cir. 2014). Indeed, “courts have consistently held” that its scope extends to

constitutional or tort claims “whose resolution would require the court to intrude

upon the VA’s exclusive jurisdiction.” Price v. United States, 228 F.3d 420, 422

(D.C. Cir. 2000) (per curiam); see also Hicks v. Small, 69 F.3d 967, 970 (9th Cir.

1995) (holding that district courts lack jurisdiction to hear challenges to benefits

determinations, even if those challenges are framed as tort law claims); Sugrue v.

Derwinski, 26 F.3d 8, 11 (2d Cir. 1994) (holding that “the courts do not acquire

jurisdiction to hear challenges to benefits determinations merely because those

challenges are cloaked in constitutional terms”). The VJRA’s applicability—and

conversely a district court’s jurisdiction—depends on the gravamen of the claim,

rather than its label. The question, then, is whether the gravamen of Plaintiffs’

claims places them within the scope of the VJRA. If so, the district court lacked

jurisdiction. We take Plaintiffs’ claims against each defendant in turn.

First, as to Secretary Wilkie, Plaintiffs seek damages, costs, and attorney’s

fees under the Federal Tort Claims Act (FTCA). The FTCA allows plaintiffs to

sue the United States Government in tort for injuries “caused by the negligent or

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wrongful act or omission of any employee of the Government while acting within

the scope of his office or employment.” 28 U.S.C. § 1346(b)(1). Plaintiffs allege

that the VA breached its duty under two VA regulations: 38 C.F.R. §§ 13.1 and

13.3. Specifically, Plaintiffs allege that the VA failed “to communicate with

Georgia officials and to monitor and oversee Georgia legislation.” The result,

Plaintiffs argue, is that Andrews did not receive the full benefits he was entitled to

because the Secretary negligently allowed Andrews’s fiduciary to collect a five

percent payment under Georgia law, rather than a four percent payment—the

maximum allowed under 38 U.S.C. § 5502(a)(2).

Section 5502, which governs payments to and supervision of fiduciaries, is a

law affecting the provision of veterans’ benefits. Id. § 5502; see Evans v.

Greenfield Banking Co., 774 F.3d 1117, 1121, 1124 (7th Cir. 2014). It gives the

Secretary the power to appoint a fiduciary, and—if it is in the best interest of the

beneficiary—to authorize the fiduciary to receive a commission of up to four

percent of the veteran’s benefits. 38 U.S.C. § 5502(a)(2). The Secretary cannot

authorize a fee under Section 5502 if the fiduciary receives “any other form of

remuneration or payment in connection with rendering fiduciary services for

benefits . . . on behalf of the beneficiary.” Id. And importantly, the Secretary has

discretion to supervise the fiduciary. Id. § 5502(b). “Whenever it appears that any

fiduciary, in the opinion of the Secretary, . . . has collected or paid . . . fees,

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commissions, or allowances that are inequitable or in excess of those allowed by

law for the duties performed or expenses incurred,” the Secretary may suspend

payments to the fiduciary or take other appropriate action. Id.

Here, Plaintiffs style their claim against Secretary Wilkie as an FTCA claim.

But when Plaintiffs argue that the Secretary negligently allowed Gainey to receive

excess payments, they raise a question “necessary” to the Secretary’s

determination under Section 5502. 38 U.S.C. § 511(a). In other words, Plaintiffs’

claim requires us to review VA decisions that affect the provision of benefits. Id.

Therefore, under the VJRA, the proper avenue to challenge the Secretary’s

decision is through the Board of Veterans’ Appeals. Consequently, the district

court was without jurisdiction to decide Plaintiffs’ FTCA claim.

Next, we consider the bevy of tort law claims Plaintiffs raise against Gainey:

(1) constructive trust, (2) conversion, (3) bad faith, (4) willful misconduct, (5)

removal of fiduciary, and (6) breach of fiduciary duty. The basis for these claims

is that Gainey collected a commission in excess of what federal law permits,

thereby depriving Andrews of VA benefits he was entitled to. Gainey responds

that “the VA interpreted and applied Section 5502 to allow [her] collection of a 5%

commission as authorized by the probate court—so long as her guardian

commission was collected in lieu of, and not in addition to, any fees authorized by

the Secretary under 5502(a)(2).”

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Whether or not this was a correct interpretation of the statute, it is

undisputed that the Secretary authorized Gainey’s five percent commission. So to

resolve Plaintiffs’ contention that federal law prohibits that commission, the

district court would have to review whether a decision of the Secretary that

affected Andrews’s benefits violated federal law. The VJRA prevents district

courts from doing that. 38 U.S.C. § 511(a). Therefore, the district court was

without jurisdiction to decide the claims against Gainey.

Finally, as to Governor Kemp, Plaintiffs bring a federal preemption claim

against the State of Georgia. Plaintiffs assert that O.C.G.A. § 29-7-15, the Georgia

law permitting VA guardians to earn commissions of five percent, is preempted by

federal law. Plaintiffs also allege that the State of Georgia violated their due

process rights and the Commerce Clause. Although “cloaked in constitutional

terms,” Sugrue, 26 F.3d at 11, these claims are, in reality, yet another attempt to

challenge the Secretary’s determination by pointing to “questions of law . . .

necessary to [his] decision . . . under a law that affects benefits.” 38 U.S.C. §

511(a). Therefore, the VJRA’s exclusive review mechanism applies, and the

district court lacked jurisdiction to decide these claims.

None of the cases cited by Plaintiffs are persuasive. Plaintiffs rely primarily

on Mansfield v. Peake, 525 F.3d 1312 (Fed. Cir. 2008). There, the Federal Circuit

affirmed the Veterans Court of Appeals’ decision that providing the VA with

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notice of intent to file a medical malpractice claim did not constitute an informal

claim for disability benefits. Id. at 1316. Mansfield did not address the question

presented here: whether challenges that are framed as constitutional and tort law

claims—but are really challenges to the Secretary’s benefits decision—fall within

the scope of the VJRA.

Plaintiffs also rely on Traynor v. Turnage, 485 U.S. 535 (1988). But

Plaintiffs’ characterization of that case lacks important context. In Traynor, the

Court narrowly construed the scope of 38 U.S.C. § 211(a), the precursor to §

511(a), holding that it did not preclude the district court from deciding whether a

VA regulation violated the Rehabilitation Act. Id. at 545. The Court reasoned that

the VA lacked “any special expertise” in deciding the issue. Id. at 544. And,

therefore, “[p]ermitting [such] cases to go forward [would] not undermine the

purposes of § 211(a)” by “enmesh[ing] the courts in the technical and complex

determinations and applications of Veterans’ Administration policy connected with

veterans’ benefits decisions.” Id. (internal quotation marks omitted). The Court

added the caveat that “if experience proves otherwise, the Veterans’

Administration is fully capable of seeking appropriate relief from Congress.” Id. at

544–45.

Congress reacted within a matter of months. “In order to dissuade the

judiciary from ignoring the explicit language that Congress used in isolating

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decisions of the Administrator from judicial scrutiny, Congress overhauled both

the internal review mechanism and § 211 in the VJRA.” Veterans for Common

Sense v. Shinseki, 678 F.3d 1013, 1021 (9th Cir. 2012) (en banc) (internal citations

omitted). To this end, Congress created the United States Court of Appeals for

Veterans Claims and made that court’s decisions appealable only to the Federal

Circuit. Id. Congress also “expanded the provision precluding judicial review”

through its enactment of 38 U.S.C. § 511—the provision critical to our disposition

of this appeal. Id. at 1022. Because Traynor was not decided under the current

VJRA framework, we find Plaintiffs’ reliance on that decision unpersuasive.

Under the current VJRA framework, each of Plaintiffs’ claims amounts to a

challenge to “questions of law and fact necessary to a decision . . . under a law that

affects the provision of benefits . . . to veterans.” 38 U.S.C. § 511(a). Because

“the decision of the Secretary as to any such question shall be final and conclusive

and may not be reviewed” outside of the framework the VJRA sets forth, the

district court lacked jurisdiction to decide Plaintiffs’ claims. Id.

AFFIRMED.