On March 21, 2013 the Federal Circuit issued a precedential order [hereinafter “Order”] in National Org. of Veterans Advoc. (NOVA) v. Shinseki, ordering the Department of Veterans Affairs (VA) to “show cause why it should not be sanctioned” after rule changes to 38 C.F.R. § 3.103 were repealed.
As a background, 38 C.F.R. § 3.103 sets forth certain procedural rights the VA must follow during the course of claims adjudication. Section 3.103(c)(2) requires that the VA “explain fully the issues and suggest the submission of evidence which the claimant may have overlooked and which would be of advantage to the claimant’s position.” Section 3.103(a) further requires the VA “to assist a claimant in developing the facts pertinent to [their] claim” and “render a decision which grants every benefit that can be supported in law while protecting the interests of the Government.” These provisions apply before both the agency of original jurisdiction (RO) and the Board of Veterans’ Appeals (BVA).
On August 23, 2011, the VA issued a rule that eliminated the some of the aforementioned rights and stated that 38 C.F.R. § 3.103 would not apply to hearings before the BVA. On September 9, 2011, NOVA petitioned the Federal Circuit and argued the VA’s rule change violated 5 U.S.C. § 553 by not allowing for the mandatory notice-and-comment period set forth in the APA.
On April 18, 2012, repealed the rule changes to 38 C.F.R. § 3.103 and agreed that the rule change was void ab initio. NOVA’s petition before the Federal Circuit remained pending as the parties determined how to address BVA decisions made between August 23, 2011 and April 18, 2012.
In its March 21, 2013 Order, the Federal Circuit expressed concern over the VA’s conduct in not affirmatively taking measures to ensure that BVA decisions between August 23, 2011 and April 18, 2012 correctly applied the provisions of 38 C.F.R. § 3.103 as they existed prior to the now-repealed rule change. The Federal Circuit stated, “VA’s failure to abide by its commitments to this court and opposing counsel raises the question of whether we should exercise our inherent or statutory powers to issue sanctions against the agency and the responsible officials.” The Federal Circuit ordered the VA to show cause why it should not be sanctioned or, alternatively, submit a plan for how the agency intends to “indentify and rectify harms” caused by the now-repealed 38 C.F.R. § 3.103. The Order provided the VA with sixty (60) days to respond so I will address the outcome of this case in future blog posts.