Dav v. Secretary of Veterans Affairs , 859 F.3d 1072 ( 2017 )

United States Court of Appeals
for the Federal Circuit
______________________
DISABLED AMERICAN VETERANS,
Petitioner
v.
SECRETARY OF VETERANS AFFAIRS,
Respondent
______________________
2016-1493
______________________
Petition for review pursuant to 38 U.S.C. Section 502.
______________________
Decided: June 14, 2017
______________________
ZACHARY STOLZ, Chisholm Chisholm & Kilpatrick,
Providence, RI, argued for petitioner. Also represented by
ROBERT VINCENT CHISHOLM, JENNA ZELLMER;
CHRISTOPHER J. CLAY, Disabled American Veterans, Cold
Spring, KY; BARBARA J. COOK, Cincinnati, OH.
EMMA BOND, Commercial Litigation Branch, Civil Di-
vision, United States Department of Justice, Washington,
DC, argued for respondent. Also represented by
BENJAMIN C. MIZER, ROBERT E. KIRSCHMAN, JR., MARTIN
F. HOCKEY, JR.; BRIAN D. GRIFFIN, BRANDON A. JONAS,
Office of General Counsel, United States Department of
Veterans Affairs, Washington, DC.
______________________
2 DAV v. SECRETARY OF VETERANS AFFAIRS
Before MOORE, O’MALLEY, and REYNA, Circuit Judges.
MOORE, Circuit Judge.
Disabled American Veterans (“DAV”) petitions for
review of provisions of the Department of Veterans Af-
fairs’ (“VA”) Adjudication Procedures Manual M21-1
(“M21-1 Manual”). We dismiss for lack of jurisdiction.
BACKGROUND
38 U.S.C. § 1117 provides presumptive service connec-
tion for veterans who served in the Persian Gulf War with
a qualifying chronic disability. The statute articulates
three types of qualifying chronic disabilities: (a) an undi-
agnosed illness; (b) a medically unexplained chronic
multisymptom illness (“MUCMI”); and (c) any diagnosed
illness as determined by the Secretary. 38 U.S.C.
§ 1117(a)(2). The VA’s regulations define a MUCMI as:
a diagnosed illness without conclusive pathophysi-
ology or etiology, that is characterized by overlap-
ping symptoms and signs and has features such
as fatigue, pain, disability out of proportion to
physical findings, and inconsistent demonstration
of laboratory abnormalities. Chronic multisymp-
tom illnesses of partially understood etiology and
pathophysiology, such as diabetes and multiple
sclerosis, will not be considered medically unex-
plained.
38 C.F.R. § 3.317(a)(2)(ii) (emphasis added). Both statute
and regulation identify sleep disturbances and signs or
symptoms involving the respiratory system as possible
manifestations of a MUCMI. 38 U.S.C. § 1117(g)(8)–(9);
38 C.F.R. § 3.317(b)(8)–(9).
The VA consolidates its policy and procedures into one
resource known as the M21-1 Manual. The M21-1 Manu-
al provides guidance to Veterans Benefits Administration
DAV v. SECRETARY OF VETERANS AFFAIRS 3
(“VBA”) employees and stakeholders “to allow [the] VBA
to process claims benefits quicker and with higher accura-
cy.” J.A. 81. Any VBA employee can request changes to
the M21-1 Manual through submission of an online form.
The M21-1 Manual discusses service connection for
qualifying disabilities under 38 U.S.C. § 1117 and 38
C.F.R. § 3.317 in section IV.ii.2.D. In September 2015, a
VBA employee requested a change to this portion of the
M21-1 Manual to specify that the language “without
conclusive pathophysiology or etiology” in § 3.317 requires
“there is ‘both’ an inconclusive pathophysiology ‘and’ an
inconclusive etiology” for an illness to qualify as a
MUCMI. J.A. 78. He also requested the M21-1 Manual
specify that sleep apnea is not a qualifying chronic disa-
bility under § 1117 and § 3.317.
On November 30, 2015, the VA adopted the requested
revisions. The VA changed the definition of MUCMI from
illnesses exhibiting “no conclusive physiology or etiology”
to require “both an inconclusive pathology, and an incon-
clusive etiology.” J.A. 60, 100–01. Under the subsection
“Signs and Symptoms of Undiagnosed Illnesses or
MUCMIs,” the VA added, “Sleep apnea cannot be pre-
sumptively service-connected (SC) under the provisions of
38 C.F.R. § 3.317 since it is a diagnosable condition.”
J.A. 103. DAV petitions for review of these revisions
pursuant to 38 U.S.C. § 502.
DISCUSSION
Our jurisdiction to review VA actions pursuant to
§ 502 is limited. We can review actions of the Secretary
subject to 5 U.S.C. §§ 552(a)(1) and 553. 38 U.S.C. § 502.
Under § 502, we cannot review all VA actions which fall
under § 552; only those in § 552(a)(1). Section 552(a)(1)
refers to agency actions that must be published in the
Federal Register, including “substantive rules of general
applicability . . . and statements of general policy or
interpretations of general applicability.” 5 U.S.C.
4 DAV v. SECRETARY OF VETERANS AFFAIRS
§ 552(a)(1)(D). Section 553 refers to agency rulemaking
that must comply with notice-and-comment procedures
under the Administrative Procedure Act. “A party seek-
ing the exercise of jurisdiction in its favor has the burden
of establishing that such jurisdiction exists.” Rocovich v.
United States, 933 F.2d 991, 993 (Fed. Cir. 1991); see also
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375,
377 (1994).
Section 552(a)(2) refers to agency actions that need
not be published in the Federal Register. These agency
actions must only be made publicly available in an elec-
tronic format. 5 U.S.C. § 552(a)(2). Section 552(a)(2)(C)
defines “administrative staff manuals and instructions to
staff that affect a member of the public” as agency actions
falling under this category. The M21-1 Manual is an
administrative staff manual that affects a member of the
public. The M21-1 Manual is “an electronic resource that
has consolidated all of VA’s policy and procedural guid-
ance on processing disability claims into one location.”
J.A. 81. It is intended for “VBA employees processing
Veteran and Survivor claims for compensation, pension
and burial benefits.” Id. The manual is intended to
instruct VBA employees when processing claims, and its
provisions affect the public. Section 502’s express exclu-
sion of agency actions subject to § 552(a)(2) renders the
M21-1 Manual beyond our § 502 jurisdiction unless DAV
can show the VA’s revisions more readily fall under
§§ 552(a)(1) or 553. Because DAV has not shown that the
VA’s revisions to the M21-1 Manual are actions of the
Secretary subject to either §§ 552(a)(1) or 553, we lack
jurisdiction to review the M21-1 Manual revisions.
DAV cites precedent in which we found agency actions
subject to § 552(a)(1) and thus reviewable pursuant to
§ 502, but those cases are distinguishable from the VA’s
M21-1 Manual revisions. For example, in Splane v. West,
216 F.3d 1058 (Fed. Cir. 2000), we reviewed a preceden-
tial General Counsel opinion pursuant to § 502. See also
DAV v. SECRETARY OF VETERANS AFFAIRS 5
Snyder v. Sec’y of Veterans Affairs, No. 16-1529 (Fed. Cir.
June 8, 2017). Precedential General Counsel opinions are
published in the Federal Register and are expressly
subject to § 552(a)(1). See Splane, 216 F.3d at 1062; 38
U.S.C. § 501(c) (specifying that opinions and interpreta-
tions of the VA General Counsel must comply with
§ 552(a)(1)); 38 C.F.R. § 14.507(b) (“Written legal opinions
designated as precedent opinions [of the General Counsel]
under this section shall be considered by the Department
of Veterans Affairs to be subject to the provisions of 5
U.S.C. § 552(a)(1).”). In LeFevre v. Secretary of Veterans
Affairs, 66 F.3d 1191 (Fed. Cir. 1995), we found that we
had jurisdiction under § 502 to review the VA’s decision
“not to create a presumption that prostate cancer, liver
cancer, and nose cancer are connected to exposure to
herbicides in Vietnam.” Id. at 1192–93. Congress di-
rected the Secretary to work with the National Academy
of Science to review and summarize scientific evidence
concerning exposure to herbicide in Vietnam. Id. Con-
gress delegated to the Secretary the authority to deter-
mine whether to create a presumption of service
connection for diseases that may have resulted from such
exposure, and the Secretary published a detailed explana-
tion of his decision in the Federal Register. Id. at 1196–
97. We concluded that we had jurisdiction to review the
Secretary’s determination because it was a “statement of
general . . . applicability and future effect designed to
implement . . . or prescribe . . . law or policy” as provided
in § 552(a)(1). Id. And we have exercised our jurisdiction
pursuant to § 502 in numerous other cases to review the
VA’s final regulations published in the Federal Register.
See, e.g., McKinney v. McDonald, 796 F.3d 1377 (Fed. Cir.
2015); Nat’l Org. of Veterans’ Advocates, Inc. v. Sec’y of
Veterans Affairs, 669 F.3d 1340 (Fed. Cir. 2012).
DAV also fails to draw similarities between the VA’s
M21-1 Manual revisions and certain VA letters that we
held constituted actions of the Secretary reviewable
6 DAV v. SECRETARY OF VETERANS AFFAIRS
pursuant to § 502. See Military Order of the Purple Heart
of the USA v. Sec’y of Veterans Affairs, 580 F.3d 1293,
1294, 1296 (Fed. Cir. 2009) (holding a Fast Letter issued
by a VA Director announced a “new procedure promulgat-
ed by the Secretary” subject to our review pursuant to
§ 502); Coal. for Common Sense in Gov’t Procurement v.
Sec’y of Veterans Affairs, 464 F.3d 1306, 1317–18 (Fed.
Cir. 2006) (holding Dear Manufacturer Letter issued by
an Acting VA Director announced a substantive rule that
was “[a]n action of the Secretary” under § 502). The M21-
1 Manual revisions are distinguishable from these VA
letters. Fast Letters and Dear Manufacturer Letters are
not agency actions defined under § 552. While Congress
explicitly designated administrative staff manuals as
agency actions falling under § 552(a)(2), it did not similar-
ly specify whether VA letters are agency actions subject to
§ 552(a)(1) or § 552(a)(2).
DAV argues we nonetheless have jurisdiction to re-
view the VA’s revisions to the M21-1 Manual because the
revisions announce substantive rules subject to § 553
which should be voided for failure to provide the required
notice and comment. “[S]ubstantive rules [are] those that
effect a change in existing law or policy or which affect
individual rights and obligations.” Paralyzed Veterans of
Am. v. West, 138 F.3d 1434, 1436 (Fed. Cir. 1998). DAV
argues the M21-1 Manual revisions are substantive rules
subject to § 553 because the revisions are inconsistent
with 38 U.S.C. § 1117 and 38 C.F.R. § 3.317 and thus
announce a change in existing law. DAV Br. 13–17
(arguing § 1117 and § 3.317 entitle a veteran to presump-
tive service connection as long as the illness exhibits no
conclusive pathophysiology or no conclusive etiology). It
argues the Veterans Court has explained that “VA hand-
books, circulars, and manuals” may have the “force and
effect of law” if they prescribe substantive rules. DAV
Br. 11–13 (quoting Castellano v. Shinseki, 25 Vet. App.
146, 150 (2011)); see also Guerra v. Shinseki, 642 F.3d
DAV v. SECRETARY OF VETERANS AFFAIRS 7
1046, 1051 n.2 (Fed. Cir. 2011) (“The Veterans Court has
in the past found that certain provisions of the [M21-1]
Manual constituted substantive rules for purposes of the
APA.”); Fugere v. Derwinski, 1 Vet. App. 103, 107 (1990)
(holding a provision in the M21-1 Manual “affected a
substantive right and its placement in a procedural
manual cannot disguise its true nature as a substantive
rule”).
“[T]he question whether a particular provision is sub-
stantive or interpretative for purposes of the APA is not
resolved simply by the title of the document in which the
provision is found.” Guerra, 642 F.3d at 1051 n.2. There
are three relevant factors to whether an agency action
constitutes substantive rulemaking under the APA:
(1) the [a]gency’s own characterization of the ac-
tion; (2) whether the action was published in the
Federal Register or the Code of Federal Regula-
tions; and (3) whether the action has binding ef-
fects on private parties or on the agency. The first
two criteria serve to illuminate the third, for the
ultimate focus of the inquiry is whether the agen-
cy action partakes of the fundamental characteris-
tic of a regulation, i.e., that it has the force of law.
Molycorp, Inc. v. EPA, 197 F.3d 543, 545 (D.C. Cir. 1999);
see also Nat’l Min. Ass’n v. McCarthy, 758 F.3d 243, 252
(D.C. Cir. 2014) (“The most important factor [in distin-
guishing substantive rules from general statements of
policy] concerns the actual legal effect (or lack thereof) of
the agency action in question on regulated entities.”);
Guerra, 642 F.3d at 1051 n.2 (“If an agency announces
new substantive rules, those rules are subject to the
procedural requirements of 5 U.S.C. § 553 even if they are
not formally published as agency regulations.”). To
amount to substantive rulemaking with the force and
effect of law, the rule’s change in existing law must be
“binding not only within the agency, but [] binding on
8 DAV v. SECRETARY OF VETERANS AFFAIRS
tribunals outside the agency.” Coal. for Common Sense,
464 F.3d at 1318.
The M21-1 Manual revisions do not amount to a § 553
rulemaking and do not carry the force of law. All relevant
factors point to this conclusion. The VA does not intend
for the M21-1 Manual to carry the force of law: “The M21-
1 is an internal manual used to convey guidance to VA
adjudicators. It is not intended to establish substantive
rules beyond those contained in statute and regulation.”
72 Fed. Reg. 66,218, 66,219 (Nov. 27, 2007). There is no
notice-and-comment rulemaking for Manual revisions as
required by § 553. The VA does not publish M21-1 Manu-
al revisions in the Federal Register or Code of Federal
Regulations, but instead issues revisions through an
informal electronic process which can be initiated by VBA
employees. The M21-1 Manual is binding on neither the
agency nor tribunals. The Board of Veterans’ Appeals
(“Board”) is bound only by “regulations of the Depart-
ment, instructions of the Secretary, and the precedent
opinions of the chief legal officer of the Department.” 38
U.S.C. § 7104(c). The M21-1 Manual falls under none of
these categories. The VA’s regulations specify, “[t]he
Board is not bound by Department manuals, circulars, or
similar administrative issues.” 38 C.F.R. § 19.5. These
rules announced in the M21-1 Manual revisions lack the
legal effect to constitute substantive rulemaking under
§ 553 and thus there was no procedural infirmity in the
agency’s failure to provide notice and comment before
making revisions to the M21-1 Manual.
DAV has the burden of establishing this court’s juris-
diction over its petition. Congress chose to limit this
court’s jurisdiction in § 502 to challenges to agency ac-
tions that fall under § 552(a)(1) or § 553. Congress ex-
pressly exempted from § 502 challenges to agency actions
which fall under § 552(a)(2). DAV has not met its juris-
dictional burden in this case. The Manual revisions are
not, as DAV argues, substantive rules which require
DAV v. SECRETARY OF VETERANS AFFAIRS 9
notice and comment rulemaking procedure. DAV argues
we have jurisdiction to review the M21-1 Manual revi-
sions even if they are interpretative rules, but fails to
articulate why the revisions amount to “statements of
general policy or interpretations of general applicability”
subject to § 552(a)(1)(D) as compared to the interpretative
rules subject to § 552(a)(2)(B)–(C). See Cathedral Candle
Co. v. ITC, 400 F.3d 1352, 1369 (Fed. Cir. 2005) (“The
statute makes clear that section 552(a)(1)(D) does not
require the publication of all statements of policy and
interpretation, because another provision of the same
statute, section 552(a)(2)(B), states that each agency shall
‘make available for public inspection and copy-
ing . . . those statements of policy and interpretations
which have been adopted by the agency and are not
published in the Federal Register.’”). As the government
persuasively argues, § 552(a)(2) expressly includes
“statements of policy and interpretations which have been
adopted by the agency and are not published in the Fed-
eral Register” and further includes “administrative staff
manuals and instructions to staff that affect a member of
the public.” The VA Manual revisions at issue clearly fall
under these § 552(a)(2) provisions. Where, as here, man-
ual provisions are interpretations adopted by the agency,
not published in the Federal Register, not binding on the
Board itself, and contained within an administrative staff
manual, they fall within § 552(a)(2)—not § 552(a)(1).
DAV has the burden of establishing jurisdiction and has
not established that the Manual revisions fall within
§ 552(a)(1) or § 553.
This is not to say that a veteran is without recourse if
the VA’s M21-1 Manual adopts a rule inconsistent with
statute or regulation. A veteran adversely affected by a
M21-1 Manual provision can contest the validity of that
provision as applied to the facts of his case under 38
U.S.C. § 7292. See, e.g., Guerra, 642 F.3d 1046. But
absent a showing that the rule is an action of the Secre-
10 DAV v. SECRETARY OF VETERANS AFFAIRS
tary to which § 552(a)(1) or § 553 refers, DAV cannot
directly request review of that provision pursuant to 38
U.S.C. § 502.
CONCLUSION
For the reasons discussed above, we dismiss for lack
of jurisdiction.
DISMISSED
COSTS
No costs.