Morris v. McDonough ( 2022 )

Case: 21-2032 Document: 34 Page: 1 Filed: 07/18/2022
United States Court of Appeals
for the Federal Circuit
______________________
LOUIS C. MORRIS,
Claimant-Appellant
v.
DENIS MCDONOUGH, SECRETARY OF
VETERANS AFFAIRS,
Respondent-Appellee
______________________
2021-2032
______________________
Appeal from the United States Court of Appeals for
Veterans Claims in No. 19-3376, Judge Coral Wong Pi-
etsch.
______________________
Decided: July 18, 2022
______________________
KENNETH M. CARPENTER, Law Offices of Carpenter
Chartered, Topeka, KS, argued for claimant-appellant.
EVAN WISSER, Commercial Litigation Branch, Civil Di-
vision, 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
General Counsel, United States Department of Veterans
Affairs, Washington, DC.
______________________
Case: 21-2032 Document: 34 Page: 2 Filed: 07/18/2022
2 MORRIS v. MCDONOUGH
Before MOORE, Chief Judge, TARANTO and STARK, Circuit
Judges.
TARANTO, Circuit Judge.
In 1970, Vietnam War veteran Louis C. Morris applied
to the Veterans Administration (now the Department of
Veterans Affairs, hereinafter “VA”) for disability benefits.
Later that year, he received two decisions from a VA re-
gional office: In August 1970, VA denied his claim for ben-
efits based on a service-connected condition; and in
November 1970, VA granted his claim for a pension based
on a non-service-connected condition. Of importance here,
in 2014, after a number of other filings and adjudications,
Mr. Morris filed with VA a request for revision of the No-
vember 1970 rating decision on the grounds of clear and
unmistakable error. He argued that VA, in the November
1970 decision, had implicitly denied his claim for benefits
based on a service-connected condition and, in so doing, vi-
olated 38 C.F.R. § 3.303(b). Both the VA regional office
and, on appeal, the Board of Veterans’ Appeals determined
that there was no such clear and unmistakable error.
Mr. Morris then appealed to the Court of Appeals for
Veterans Claims (Veterans Court). Before that court, Mr.
Morris presented only a single argument: that a September
1970 notice from VA—giving notice of the August 1970 rat-
ing decision—was constitutionally inadequate under the
Due Process Clause of the Fifth Amendment. Mr. Morris
acknowledged that he had not presented this argument to
the Board, but he contended that the Veterans Court was
obligated to consider this constitutional question in the
first instance under 38 U.S.C. § 7261(a)(1). The Veterans
Court disagreed and exercised its discretion, under our is-
sue-exhaustion precedents, to decline to entertain the ar-
gument presented for the first time on appeal. Morris v.
McDonough, No. 19-3376, 2021 WL 748615, at *5–6 (Vet.
App. Feb. 26, 2021).
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MORRIS v. MCDONOUGH 3
Mr. Morris appeals. We reject Mr. Morris’s contention
that, as a matter of law, the Veterans Court lacked discre-
tion to apply an issue-exhaustion analysis to decide
whether to hear Mr. Morris’s new argument on appeal. Be-
cause Mr. Morris does not challenge the Veterans Court’s
application of that analysis, we affirm the dismissal of the
appeal by the Veterans Court.
I
Louis Morris served in the U.S. Army from January
1965 to January 1968. In May 1970, he filed a claim for
disability benefits under 38 U.S.C. § 310 (1970) (now 38
U.S.C. § 1110), alleging a disability based on a nervous con-
dition connected to his service. In August 1970, the VA re-
gional office issued a rating decision, which denied service-
connected-disability compensation for the nervous condi-
tion but deferred consideration of a claim for a non-service-
connected pension available to disabled veterans that
served during a time of war under 38 U.S.C. § 521 (1970)
(now 38 U.S.C. § 1521). In September 1970, the regional
office sent Mr. Morris a notice stating that the evidence
submitted did not meet the requirements to establish enti-
tlement to service-connected-disability compensation. In
the notice, VA indicated the reason as follows: “Your other
nervous condition is a constitutional or developmental con-
dition, and not a disability under the law.” J.A. 25. Two
months later, in November 1970, and following a Septem-
ber 30, 1970 medical examination, the regional office is-
sued another rating decision labeled “Reconsideration of
original claim received 5-22-70” that granted non-service-
connected pension benefits for “[s]chizophrenic reaction,
paranoid type.” J.A. 26–27.
In June 2005, Mr. Morris filed a claim for compensation
based on service-connected post-traumatic stress disorder.
Later that year, the regional office granted the claim and
assigned a disability rating of 30%. Eventually, and in
stages, after appeals to the Board and to the Veterans
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4 MORRIS v. MCDONOUGH
Court, Mr. Morris ended up with a rating of total disability
effective June 8, 2005.
Although the benefits from those times going forward
are not in dispute, Mr. Morris has for many years been
seeking a still earlier effective date for service-connected-
disability compensation—all the way back, in fact, to May
22, 1970, when he filed his original claim for compensation
due to a nervous condition. In August 2007, he sought a
September 1970 effective date by asserting (in a filing with
the regional office) that VA medical records from Septem-
ber 1970 “constituted an informal claim to reopen the VA’s
August 1970 rating decision which denied Mr. Morris com-
pensation for a nervous disorder” that had never been ad-
judicated by VA and thus remained pending. J.A. 56. In
November 2008, Mr. Morris asserted (in another filing with
the regional office) that the May 1970 claim itself remained
pending, because the September 1970 notice did not comply
with 38 C.F.R. § 3.103 (1970), which, he said, “required
that the VA provide specific information to claimants.” J.A.
76. According to Mr. Morris, the September 1970 notice
was inadequate under the regulation because it “did not
explain the reason the VA denied Mr. Morris’s May 1970
claim except to indicate that his post service disability was
a non-compensable condition.” Id. The regional office, the
Board, and ultimately the Veterans Court each rejected
that argument, and Mr. Morris did not appeal the Veterans
Court’s decision to this court. See Morris Opening Br. 5.
In July 2014, Mr. Morris made another effort to secure
a 1970 effective date, requesting revision of the November
1970 rating decision of the regional office on the grounds of
clear and unmistakable error. See 38 U.S.C. § 5109A; see
also George v. McDonough, 142 S. Ct. 1953, 1958 (2022)
(discussing “clear and unmistakable error” provisions). On
its face, that decision simply states that VA was granting
Mr. Morris entitlement to the non-service-connected-disa-
bility pension. J.A. 26–27. But Mr. Morris asserted that,
in the decision, VA had “implicitly denied” the original
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MORRIS v. MCDONOUGH 5
claim for disability compensation based on a service-con-
nected nervous disorder. J.A. 191. The clear and unmis-
takable error, he asserted, was that VA had misapplied 38
C.F.R. § 3.303(b), which relates to determination of service
connection for chronic diseases. J.A. 192–93. The regional
office, and then the Board, rejected his argument, finding
no clear and unmistakable error. See J.A. 224–25; J.A.
246–52.
Mr. Morris appealed to the Veterans Court. There, he
made only an argument that he had not presented to the
Board. He argued that, under the Fifth Amendment’s Due
Process Clause, the September 1970 notice letter was “con-
stitutionally inadequate because it failed to clearly and ex-
plicitly inform him of VA’s decision to deny him service-
connected compensation for a compensable nervous condi-
tion.” See Morris, 2021 WL 748615, at *4 (quoting Mr. Mor-
ris’s brief). He acknowledged that he was not challenging
the Board’s decision denying the request for revision of the
November 1970 rating decision. But he argued that the
court had to address his constitutional challenge to the
September 1970 notice in the first instance because he
could not have presented the challenge to the regional of-
fice (i.e., the VA Secretary) or the Board and because the
Veterans Court was required under 38 U.S.C. § 7261(a)(1)
to decide, when presented, all relevant questions of law.
Appellant’s Br. at 13–14, Morris v. McDonough, No. 19-
3376 (Vet. App. Jan. 30, 2020).
The Veterans Court dismissed the appeal. It observed
that it had the discretion to decide on a case-by-case basis
whether to address a newly presented argument or to de-
cline to do so “on the ground that the veteran did not ex-
haust his or her administrative remedies before appealing
to the [Veterans] Court.” Morris, 2021 WL 748615, at *5. 1
1 We understand the Veterans Court’s reference to
exhaustion of administrative remedies in this case to be a
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6 MORRIS v. MCDONOUGH
Weighing the interests of Mr. Morris against the institu-
tional interests served by the doctrine of issue exhaustion,
the Veterans Court concluded that issue exhaustion should
apply and thus declined to hear Mr. Morris’s constitutional
argument. Id. at *5–6.
Mr. Morris timely appeals. We have jurisdiction under
38 U.S.C. § 7292(a) to address Mr. Morris’s only conten-
tion, which presents a legal issue we resolve de novo—
namely, whether the Veterans Court is required by statute
to decide all constitutional issues presented to it, regard-
less of whether they were first presented to the Board.
II
We answer that question in the negative. We conclude
that the Veterans Court correctly determined that it had
discretion, under this court’s issue-exhaustion precedents,
to decline to hear Mr. Morris’s argument presented for the
first time on appeal to that court.
In Maggitt v. West, 202 F.3d 1370 (Fed. Cir. 2000), we
explained that “[w]hile the Veterans Court may hear legal
arguments raised for the first time with regard to a claim
that is properly before the court, it is not compelled to do
so in every instance.” Id. at 1377. Rather, it should deter-
mine “whether the interests of the individual weigh heavily
against the institutional interests” in “protect[ing] agency
administrative authority” and “promot[ing] judicial effi-
ciency.” Id. Those institutional interests apply to consti-
tutional arguments as well as to statutory ones, and we
have approved application of the issue-exhaustion doctrine
reference to issue exhaustion. See generally Carr v. Saul,
141 S. Ct. 1352, 1358 n.2 (2021) (discussing distinction be-
tween remedy exhaustion and issue exhaustion). We, like
the Veterans Court, have not always been precise in mak-
ing the distinction. See, e.g., Maggitt v. West, 202 F.3d
1370, 1377 (Fed. Cir. 2000).
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MORRIS v. MCDONOUGH 7
to constitutional arguments. See, e.g., Ledford v. West, 136
F.3d 776, 780 (Fed. Cir. 1998) (requiring claimant to pre-
sent both constitutional and statutory challenges to the
Board before presenting them to the Veterans Court); Mag-
gitt, 202 F.3d at 1378–79 (remanding to the Veterans Court
to make a case-specific determination whether to invoke
the issue-exhaustion requirement against constitutional
and statutory arguments).
Mr. Morris argues that 38 U.S.C. § 7261(a)(3)(B) is to
the contrary, requiring the Veterans Court to decide every
constitutional issue presented to it. That conclusion would
contradict our precedents discussed above. And the statute
does not support it.
Section 7261, titled “Scope of review,” provides, in per-
tinent part:
(a) In any action brought under this chapter, the
Court of Appeals for Veterans Claims, to the extent
necessary and when presented, shall— . . . (3) hold
unlawful and set aside decisions . . . adopted by . . .
the Board of Veterans’ Appeals . . . found to be—
. . . (B) contrary to constitutional right . . . .
38 U.S.C. § 7261. That command tells the Veterans Court
what judgments to issue—it shall “hold unlawful and set
aside decisions” of the Board—if it finds the decisions to be
“contrary to constitutional right.” Id. It does not tell the
Veterans Court when it is obligated to make such a finding;
specifically, it does not tell that court that it always must
address an argument of constitutional right, even one not
presented to the Board or addressed in the Board’s deci-
sion.
The absence of a command to go beyond matters pre-
sented to or decided by the Board is reinforced by other lan-
guage of the subsection. The provision directs the Veterans
Court, “to the extent necessary to its decision and when
presented,” to, among other things, “decide all relevant
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8 MORRIS v. MCDONOUGH
questions of law.” 38 U.S.C. § 7261(a)(1). But Mr. Morris
does not rely on that broad language at all, thus implicitly
recognizing that § 7261(a) is not to be read as overriding all
traditional rules governing the raising of new issues on ap-
peal. The “to the extent necessary to its decision” language
suggests otherwise: Addressing a constitutional issue
never presented to or decided by the Board is hardly “nec-
essary” to the Veterans Court’s exercise of its “exclusive ju-
risdiction to review decisions of the Board.” 38 U.S.C.
§§ 7261(a), 7252(a). Indeed, we have specifically pointed to
§ 7252(a) as supporting an exhaustion requirement. See
Ledford, 136 F.3d at 779–80; Scott v. McDonald, 789 F.3d
1375, 1379 (Fed. Cir. 2015) (citing Ledford, “we have held
that the statute, 38 U.S.C. § 7252(a), requires issue ex-
haustion before the Board in appropriate circumstances”).
Moreover, the text of § 7261(a)(3) specifically under-
mines Mr. Morris’s argument. That text hardly calls out
constitutional issues for distinctive treatment. It charges
the Veterans Court, to the extent necessary to its decision
and when presented, to
hold unlawful and set aside decisions . . . found to
be—
(A) arbitrary, capricious, an abuse of dis-
cretion, or otherwise not in accordance with
law;
(B) contrary to constitutional right, power,
privilege, or immunity;
(C) in excess of statutory jurisdiction, au-
thority, or limitations, or in violation of a
statutory right; or
(D) without observance of procedure re-
quired by law . . . .
38 U.S.C. § 7261(a)(3). Given the parallel treatment of
these several potential Board errors, Mr. Morris’s reading
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MORRIS v. MCDONOUGH 9
of the language of § 7261(a)(3)(B) would apply equally to all
the non-constitutional errors listed in § 7261(a)(3)(A), (C),
and (D), essentially (if not completely) eliminating the abil-
ity of the Veterans Court to require exhaustion of issues
before the Board, as Mr. Morris’s counsel acknowledged at
oral argument, Oral Arg. at 8:30–9:25. Mr. Morris has sup-
plied no sound basis for such a result, which is contrary to
our precedents recognizing that issue exhaustion is availa-
ble to the Veterans Court.
Mr. Morris seeks support for his position in this court’s
decision in In re Bailey, 182 F.3d 860 (Fed. Cir. 1999), but
we do not find such support. In Bailey, we did not address
38 U.S.C. § 7261 or the Veterans Court’s ability to rely on
exhaustion. Rather, we analyzed 38 U.S.C. § 7292, which
governs our jurisdiction to review Veterans Court deci-
sions. And we concluded that the language of § 7292 gave
us jurisdiction to review “free-standing” constitutional
questions that did not stem from the validity or interpreta-
tion of a statute or regulation. Bailey, 182 F.3d at 867.
That case has no applicability here, in a case involving a
different statute, a different reviewing body, and the doc-
trine of issue exhaustion.
Mr. Morris also relies on the Supreme Court’s decision
in Carr v. Saul, 141 S. Ct. 1352 (2021), but we do not agree
that Carr governs here. The Supreme Court held in Carr
that persons claiming Social Security disability benefits
could assert in district court the unconstitutionality (under
the Appointments Clause) of the appointment of their as-
signed administrative law judges (ALJs) even though the
claimants did not present that challenge to the ALJs them-
selves. Id. at 1356. The Supreme Court stressed that it
was holding only that “a judicially created issue-exhaus-
tion requirement” was inapplicable, because the govern-
ment conceded that exhaustion in the setting at issue there
had no statutory or regulatory foundation. Id. at 1358 (em-
phasis added). As noted above, we have found the
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10 MORRIS v. MCDONOUGH
availability of exhaustion in the setting now before us to be
rooted in the statute.
But even aside from that distinction, we conclude that
Carr’s holding does not support the categorical rule Mr.
Morris advances. That is so even though one similarity in
context exists: The Supreme Court relied on the non-adver-
sarial nature of ALJ proceedings at issue there as one fac-
tor against exhaustion, id. at 1358–60, and the Board
proceedings at issue here are also non-adversarial, see An-
drews v. Nicholson, 421 F.3d 1278, 1283–84 (Fed. Cir.
2005) (noting that such proceedings were non-adversarial
yet nonetheless permitting a limited issue-exhaustion re-
quirement). The Supreme Court in Carr did not state its
holding in terms applicable to all constitutional issues in
appeals from all non-adversarial proceedings. Rather, the
Court gave decisive weight to two considerations: that the
particular constitutional issue, i.e., the Appointments
Clause issue, was a “structural” one, falling outside the
usual subject matter of the agency adjudicators’ decision-
making; and that it was futile to challenge the validity of
the ALJs before those same ALJs. Id. at 1360–62. Here,
the constitutional issue is not a “structural” one, but, ra-
ther, a due process issue specific to Mr. Morris’s case—a
characteristic that the Supreme Court recognized could
cause the exhaustion analysis to come out the other way.
See id. at 1360 n.5 (“Outside the context of Appointments
Clause challenges, such as in the sphere of routine objec-
tions to individual benefits determinations, the scales
might tip differently.”). And it is a type of issue familiar to
the Board, which routinely deals with questions of notice.
See, e.g., Edwards v. Shinseki, 582 F.3d 1351, 1353 (Fed.
Cir. 2009); MacPherson v. Shinseki, 525 F. App’x 934, 936
(Fed. Cir. 2013) (non-precedential). Additionally, the
Board, had it heard the due process argument, could have
found the notice constitutionally inadequate and awarded
an earlier effective date, see 38 U.S.C. § 7104(a) (“Decisions
of the Board shall be based . . . upon consideration of all . . .
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MORRIS v. MCDONOUGH 11
applicable provisions of law and regulation.”), so it would
not have been futile to bring the argument first to the
Board. For these reasons, we decline to read Carr as up-
ending our well-established precedents and eliminating
the exhaustion requirement before the Board.
The Veterans Court here considered the institutional
interests and weighed them against Mr. Morris’s interest.
Morris, 2021 WL 748615, at *5–6. As the Secretary ob-
serves, Sec’y Br. 22, Mr. Morris does not challenge that
analysis here, see Morris Reply Br. 14 (“[T]he question of
law presented by Mr. Morris’s appeal . . . does not ask this
Court to review the Veterans Court’s application of the doc-
trine of issue exhaustion.”). Mr. Morris argues only that
the Veterans Court was required to address the constitu-
tional issue before it. Because we reject that argument,
there is nothing further for us to decide.
III
For the foregoing reasons, we affirm the dismissal of
the appeal by the Veterans Court.
The parties shall bear their own costs.
AFFIRMED