Freund v. McDonough

114 F.4th 1371
Court of Appeals for the Federal Circuit·Decided August 20, 2024·No. 23-1387·Published·Cited by 5 cases

Opinion

United States Court of Appeals for the Federal Circuit

MARK FREUND, MARY S. MATHEWSON, Claimants-Appellants

v.

DENIS MCDONOUGH, SECRETARY OF VETERANS AFFAIRS, Respondent-Appellee

2023-1387

Appeal from the United States Court of Appeals for Veterans Claims in No. 21-4168, Judge Amanda L. Meredith , Judge Michael P. Allen, Judge Scott Laurer.

Decided: August 20, 2024

JONAS WANG, Orrick, Herrington & Sutcliffe LLP, Washington, DC, argued for claimants-appellants. Also represented by MELANIE L. BOSTWICK; KENNETH DOJAQUEZ, JOHN D. NILES, Carpenter Chartered, Topeka, KS.

EVAN WISSER, Commercial Litigation Branch, Civil Division , United States Department of Justice, Washington, DC, argued for respondent-appellee. Also represented by BRIAN M. BOYNTON, ERIC P. BRUSKIN, PATRICIA M. MCCARTHY; BRIAN D. GRIFFIN, JONATHAN KRISCH, Office of 2 FREUND v. MCDONOUGH

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

MEGHAN BROOKS, Veterans Legal Clinic, University of South Carolina School of Law, Columbia, SC, for amici curiae Christine Bartholomew, Sergio Campos, Maureen S. Carroll, Brooke D. Coleman, Robin Effron, David Freeman Engstrom, Myriam Gilles, Maria Glover, Andrew Hammond , Deborah R. Hensler, Helen Hershkoff, Alexandra Lahav, David Marcus, Michael Sant’Ambrogio, Adam Steinman, Adam Zimmerman.

PAUL ENRIQUEZ, Covington & Burling LLP, Washington , DC, for amici curiae National Veterans Legal Services Program, National Organization of Veterans' Advocates. Also represented by ALICE JUWON AHN, ALEXANDER SETZEPFANDT, SARA SUNDERLAND, San Francisco, CA; MEGAN RODGERS, Palo Alto, CA.

Before DYK, HUGHES, and STOLL, Circuit Judges.

DYK, Circuit Judge.

Appellants Mark Freund and Mary Mathewson (collectively “petitioners” or “appellants”) appeal from an order of the United States Court of Appeals for Veterans Claims (“Veterans Court”) dismissing their petitions and denying class certification. 1 We conclude that the Veterans Court abused its discretion in finding that the adequacy and commonality requirements for class certification were not met.

We hold, moreover, that the case is not moot as to the class claims because it satisfies the inherently transitory claim standard. We therefore vacate the order denying

1 Both current appellants have been substituted for the original claimants.

FREUND v. MCDONOUGH 3

class certification and dismissing the case, and remand for the Veterans Court to further consider its class certification ruling and, if a class is certified, to determine the appropriate relief.

BACKGROUND

This case involves veterans benefits appeals from the Department of Veterans Affairs (“VA”) Regional Offices (“RO”) to the Board of Veterans’ Appeals (“Board”) that were erroneously deactivated by the VA. This occurred because a computer program automatically and improperly swept them out of the system.

The VA currently operates two adjudicatory systems for benefits claims, and only the so-called legacy system is relevant to this appeal. Under the legacy system, a claimant may start the VA appeals process by submitting a Notice of Disagreement. The VA must either resolve the disagreement or prepare a Statement of the Case explaining the VA’s position. 38 U.S.C. § 7105(d)(1) (2006). If the claimant desires review by the Board, the claimant must file a “Substantive Appeal” within 60 days of the mailing of the Statement of the Case or within a year of the mailing of the decision being appealed, whichever is later. 38 C.F.R. § 19.52(b). “Following receipt of a timely Substantive Appeal, the agency of original jurisdiction [the RO] will certify the case to the Board.” Id. § 19.35. The RO “may close the appeal without notice . . . for failure to respond to a Statement of the Case within the period allowed.” Id. § 19.32.

To manage legacy appeals and to determine whether legacy appeals have been timely filed, the VA operates an electronic database known as the Veterans Appeals Control and Locator System (“VACOLS”). When the VA receives a Notice of Disagreement, the case is entered into the system. When the VA receives a timely Substantive Appeal, a VA employee notes the appeal in VACOLS. If no timely Substantive Appeal is filed, VACOLS 4 FREUND v. MCDONOUGH

“automatically closes legacy appeals on the first day of the month following [the relevant deadline] if VACOLS does not reflect that a claimant has submitted a Substantive Appeal .” 2 J.A. 2. If the appeal is listed as closed, it is not processed by the VA. The VA does not notify the claimant that VACOLS closed their appeal. Thus, if a VA employee improperly handles a Substantive Appeal, VACOLS will close the file without notice to the claimant. The problem here is that the system erroneously closed timely appeals, at least approximately 3,000 in number, and the VA then withheld action on such appeals.

That is what happened to U.S. Army veterans J. Roni Freund and Marvin Mathewson, whose successors are the named petitioners in this putative class action. Ms. Freund filed a disability claim for PTSD, which the VA RO denied. She timely filed a Substantive Appeal to the Board. But her appeal was closed by VACOLS, and the VA took no action on it for over a year. Ms. Freund died in July 2022, and her brother Mark Freund was substituted as claimant. The other named petitioner, Mr. Mathewson, filed a claim for special monthly compensation based on the need for aid and attendance. After his claim was denied by the RO, he filed a timely Substantive Appeal to the Board in December 2017, which was erroneously closed by VACOLS. Mr. Mathewson died three years after he filed his Substantive Appeal. The VA granted his surviving

2 The Secretary of Veterans Affairs notes that “VACOLS’s characterization . . . has no inherent legal significance ; VACOLS cannot actually close, withdraw, or terminate an appeal.” Br. for Respondent at 6. For consistency with the Veterans Court’s opinion and the parties ’ submission, we refer to VACOLS as erroneously “closing ” appeals. However, we do not mean to suggest that an automatic VACOLS closure will “close” an appeal as the term is used in 38 C.F.R. § 19.32.

FREUND v. MCDONOUGH 5

spouse Mary Mathewson’s request to be substituted into his appeal, but apparently took no other action on it. These inactions allegedly violated the statutory requirement that, if there is a timely-filed appeal, “[a]ppellate review shall be initiated.” 38 U.S.C. § 7105(a).

In June 2021, Ms. Freund and Mrs. Mathewson filed a mandamus petition in the Veterans Court in aid of this court’s and the Veterans Court’s prospective jurisdiction. The theory was that the VA had improperly truncated the appeals process, and that this action frustrated appellate review of the proceedings. See Roche v. Evaporated Milk Ass’n, 319 U.S. 21, 26 (1943) (noting that “a function of mandamus in aid of appellate jurisdiction is to remove obstacles to appeal”); see also Bates v. Nicholson, 398 F.3d 1355, 1359 (Fed. Cir. 2005) (“[T]he Court of Appeals for Veterans Claims ‘has the power to issue writs of mandamus in aid of its jurisdiction under the [All Writs Act, 28 U.S.C. § 1651(a)].’” (quoting Cox v. West, 149 F.3d 1360, 1363 (Fed. Cir. 1998))). The petition sought, inter alia, (1) “that the Court declare VA’s withholding of action on the timely perfected legacy appeals to constitute agency action ‘unlawfully withheld’ within the meaning of 38 U.S.C. § 7261(a)(2); and that the no-notice element of the Secretary ’s closure of the appeals violates 38 C.F.R. § 19.32 and Fair Process;” and (2) “that the Court order the Secretary to, within thirty days, reactivate Petitioners’ timely perfected legacy appeals.” J.A. 36. The same day, the petitioners filed a request for class certification and class action concerning the following proposed class:

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