Ashford University, LLC v. Secretary of Veterans Affairs ( 2020 )

Case: 18-1213 Document: 66 Page: 1 Filed: 03/03/2020
United States Court of Appeals
for the Federal Circuit
______________________
ASHFORD UNIVERSITY, LLC,
Petitioner
v.
SECRETARY OF VETERANS AFFAIRS,
Respondent
______________________
2018-1213
______________________
Petition for review pursuant to 38 U.S.C. Section 502.
______________________
Decided: March 3, 2020
______________________
KWAKU AKOWUAH, Sidley Austin LLP, Washington,
DC, argued for petitioner. Also represented by CARTER
GLASGOW PHILLIPS, DANIEL HAY, TOBIAS SAMUEL LOSS-
EATON; GERARD D. KELLY, Chicago, IL.
WILLIAM JAMES GRIMALDI, Commercial Litigation
Branch, Civil Division, United States Department of Jus-
tice, Washington, DC, argued for respondent. Also repre-
sented by JOSEPH H. HUNT, MARTIN F. HOCKEY, JR.,
ROBERT EDWARD KIRSCHMAN, JR.; Y. KEN LEE, BRYAN
THOMPSON, Office of General Counsel, United States De-
partment of Veterans Affairs, Washington, DC.
______________________
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2 ASHFORD UNIVERSITY, LLC v. SECRETARY OF VETERANS
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Before NEWMAN, DYK, and CHEN, Circuit Judges.
DYK, Circuit Judge.
The Department of Veterans Affairs (“VA”) provides
educational assistance in the form of monetary benefits to
veterans enrolled in “approved” “course[s] of education.”
See 38 U.S.C. § 3483. Typically, approval must be provided
by “the State approving agency [(“SAA”)] for the State
where [an] educational institution is located.” 38 U.S.C.
§ 3672(a)(1). For online courses, the educational institu-
tion must obtain approval from the SAA where the institu-
tion’s “main campus” is located. 38 C.F.R. § 21.4250(a)(3).
The VA is authorized to suspend and discontinue educa-
tional assistance, after following certain procedures, if this
requirement is not met. See 38 U.S.C. § 3690(b).
Petitioner Ashford University, LLC (“Ashford”) is a for-
profit educational institution that provides online courses
to veterans and other students. In November 2017, the VA
sent a letter (“Cure Letter”) to Ashford stating that Ash-
ford’s online courses were not approved by the correct SAA.
See 38 C.F.R. § 21.4250(a)(3). The VA expressed its “in-
ten[t] to suspend payment of educational assistance and
suspend approval of new enrollments and reenrollments
[for Ashford’s online programs] in 60 days unless corrective
action is taken.” J.A. 1. The Cure Letter provided that,
absent corrective action, the VA would invoke procedures
for discontinuing Ashford’s educational assistance, includ-
ing “refer[ring] the matter to the Committee on Educa-
tional Allowances . . . to assist . . . in making a
determination as to whether educational assistance should
be discontinued” and providing Ashford with “the oppor-
tunity for a hearing before the Committee.” J.A. 3 (citing
38 C.F.R. §§ 21.4210–14).
Ashford petitions this court for review, contending that
the Cure Letter “announces” new “rules” and that 38
U.S.C. § 502 provides this court with jurisdiction to review
those alleged rules. Appellant’s Br. 19, 48. On the merits,
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Ashford argues that these alleged rules are invalid, and re-
quests that this court “hold unlawful and set aside” the
rules. Id. at 52.
We conclude that the Cure Letter is not rulemaking or
any other action reviewable under section 502. The Cure
Letter is also not subject to judicial review because it is not
a final agency action under the Administrative Procedure
Act (“APA”). We accordingly dismiss the petition.
BACKGROUND
I
A
As part of the modern GI Bill, the VA provides educa-
tional assistance in the form monetary benefits to veterans
enrolled in “approved” “course[s] of education.” See 38
U.S.C. § 3483. Pursuant to this statute, the VA makes tu-
ition payments directly to educational institutions on be-
half of enrolled veterans. See 38 U.S.C. § 3313; 38 C.F.R.
§§ 21.9505, 21.9620.
For veterans to be eligible to receive payment assis-
tance for a course of study, the course must be approved by
“the State approving agency for the State where such edu-
cational institution is located.” 38 U.S.C. § 3672(a)(1). 1
Section 3672(a)(1) is implemented for various kinds of
courses in 38 C.F.R. § 21.4250. That section provides in
relevant part that “[i]f an educational institution offers a
course by independent study or by correspondence, only the
[SAA] for the State where the educational institution’s
1 The statute provides that SAA approval is unnec-
essary in certain circumstances, such as where the Secre-
tary of the VA provides approval. See 38 U.S.C. § 3672.
Ashford does not contend that those circumstances are pre-
sent here.
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4 ASHFORD UNIVERSITY, LLC v. SECRETARY OF VETERANS
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main campus is located may approve the course for VA
training.” 2 38 C.F.R § 21.4250(a)(3) (emphasis added).
Section 21.4250 does not expressly define the term “main
campus.” However, “main campus” is defined in 38 C.F.R.
§ 21.4266, which pertains to the approval of courses at a
“branch campus” or “extension.” That section provides:
(a) Definitions. The following definitions apply to
the terms used in this section.
...
(3) Main campus means the location where
the primary teaching facilities of an educa-
tional institution are located. If an educa-
tional institution has only one teaching
location, that location is its main campus.
If it is unclear which of the educational in-
stitution’s teaching facilities is primary,
the main campus is the location of the pri-
mary office of its Chief Executive Officer.
38 C.F.R. § 21.4266(a).
B
If an educational institution has not secured the re-
quired approval, the VA has statutory authority to “sus-
pend educational assistance to” veterans after following
specified procedures. 38 U.S.C. § 3690. The statute pro-
vides in relevant part that:
The [VA] may suspend educational assistance to el-
igible veterans . . . in any course as to which the
[VA] has evidence showing a substantial pattern of
2 Educational institutions offering “resident” courses
(e.g., where “study [is] at a site or campus of a college or
university”) are subject to different approval requirements.
38 C.F.R. § 21.4200(r).
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eligible veterans . . . who are receiving such assis-
tance by virtue of their enrollment in such course
but who are not entitled to such assistance because
(i) the course approval requirements of this chapter
are not being met . . . .
Id. § 3690(b)(3)(A) (emphasis added). Such a suspension
may only be taken, however, after:
(i) the [VA] provides to the [SAA] concerned and the
educational institution concerned written notice of
any such failure to meet such approval require-
ments . . .; [and]
(ii) such institution refuses to take corrective action
or does not within 60 days after such notice (or
within such longer period as the Secretary deter-
mines is reasonable and appropriate) take correc-
tive action . . . .
Id. § 3690(b)(3)(B) (emphasis added). The statute also pro-
vides that the Secretary of the VA may discontinue benefits
“if the Secretary finds that the . . . course in which the vet-
eran . . . is enrolled fails to meet any of the [statutory] re-
quirements.” Id. § 3690(b)(1). These provisions are
implemented in regulations, described below, that specify
required procedures for suspending and discontinuing ed-
ucational assistance payments.
II
Ashford is a for-profit educational institution that of-
fers only online courses. Ashford was formerly known as
The Franciscan University (“Franciscan”). Franciscan
taught classes at its headquarters in Clinton, Iowa. In
2005, Franciscan was acquired by its current owner,
Bridgepoint Education, Inc., and renamed Ashford Univer-
sity.
In 2013, Ashford moved its headquarters from Iowa to
San Diego, California. Ashford lists its San Diego address
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as its “Corporate” address, and Ashford’s CEO’s office ap-
pears to be at that address. In 2015, Ashford announced
that it would be closing its Clinton, Iowa campus and in-
stead offering all of its classes online.
Ashford maintains an Administrative Online Student
Services Center in Phoenix, Arizona, where a Financial
Services Director, several financial services managers, and
other financial employees work. There is nothing in the
record to suggest that the Arizona location employs Ash-
ford professors or other teaching staff, or includes facilities
for making online courses available.
From 2005 to 2016, Ashford’s online courses had been
approved by the Iowa SAA. However, in 2016, the Iowa
SAA indicated that it would no longer grant Ashford ap-
proval because Ashford had closed its Iowa campus and
moved to solely online courses. Ashford challenged the
Iowa SAA’s determination, and the lawsuit appears to be
pending. 3 At the urging of the VA, in June 2016, Ashford
sought approval from the SAA in California, where Ash-
ford’s headquarters are located. However, after the Cali-
fornia SAA requested additional information from Ashford,
Ashford withdrew its application from the California SAA
and then applied to the Arizona SAA for approval, which
Arizona granted effective July 10, 2017.
On November 9, 2017, the Director of the VA’s Mus-
kogee Regional Office, C. Jason McClellan, sent a letter
(“Cure Letter”) to Ashford regarding the requirement that
Ashford have SAA approval. The Cure Letter asserted that
Ashford was not in compliance with 38 U.S.C. § 3672(a)(1)
because it had not secured approval of the SAA where
3 The Iowa SAA agreed to leave Ashford’s approval
in place pending the outcome of this litigation. Ashford
University, LLC v. Iowa Dept. of Educ., 2017 WL 3386541
(Iowa Dist. July 17, 2017) (“Ashford I”), at *2.
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Ashford “is located.” J.A. 1. The Cure Letter noted the re-
quirement in 38 C.F.R. § 21.4250(a)(3) that an institution
must obtain approval from the SAA where the institution’s
“main campus” is located. The Cure Letter discussed evi-
dence “suggesting that [Ashford’s] main campus would be
in San Diego, CA,” and apparently contemplated that Ash-
ford must secure approval from the California SAA. J.A. 2.
The Cure Letter noted the Arizona SAA’s approval of Ash-
ford but—relying on the definition of “main campus” from
38 C.F.R. § 21.4266—reasoned that because Ashford “does
not appear to [have] any teaching location in Phoenix, AZ”
and there is “no evidence that [Ashford’s] CEO’s primary
office” is in Arizona, “the Arizona SAA lacks jurisdiction”
to approve Ashford. J.A. 1–2. The Cure Letter stated that
absent corrective action, Director McClellan would “sus-
pend payment of educational assistance and suspend ap-
proval of new enrollments and reenrollments for
[Ashford’s] online programs” and “refer the matter to the
Committee on Educational Allowances to assist [him] in
making a determination as to whether educational assis-
tance should be discontinued.” J.A. 3 (citing 38 C.F.R.
§§ 21.4210–12). The Cure Letter stated that “Ashford will
be provided with the opportunity for a hearing before the
Committee” prior to his determination. J.A. 3 (citing 38
C.F.R. §§ 21.4212–14). The VA agreed to stay the suspen-
sion of educational assistance payments to Ashford pend-
ing the outcome of this case. 4
4 Ashford asserts that, after Ashford’s 2016 applica-
tion, “[o]fficials of the California SAA . . . said (without
providing further explanation) that agency would ‘never’
approve Ashford.” Appellant’s Br. 17. Thereafter, Ashford
applied again for approval by the California SAA, and the
application was received by the California SAA on Novem-
ber 20, 2018. On December 14, 2018, the California SAA
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Shortly thereafter, on November 17, 2017, Ashford pe-
titioned this court for review of the Cure Letter. Ashford
contends that this court has jurisdiction under 38 U.S.C.
§ 502 to review two erroneous “legal interpretations” “an-
nounced” in the Cure Letter. Appellant’s Br. 2. To Ashford,
the “VA’s first new interpretation contends that the VA has
authority to review and to nullify approval determinations
made by [SAA’s].” Id. Ashford argued that this interpre-
tation runs afoul of a statute, 38 U.S.C. § 3682, barring the
VA from exercising “supervision or control” over an SAA.
To Ashford, the “second new interpretation effectively
revises the text of [the] VA’s existing regulations” pertain-
ing to the definition of “main campus.” Appellant’s Br. 2–
3. In particular, Ashford argues that the VA’s interpreta-
tion improperly imported the meaning of “main campus”
from 38 C.F.R. § 21.4266—a section pertaining to “ap-
proval of courses at a branch campus or extension”—into
38 C.F.R. § 21.4250, which requires “courses . . . by corre-
spondence” to be approved by the SAA where the “main
campus” is located. To Ashford, this interpretation was
substantive rulemaking without the required notice-and-
comment procedures and represented a change in position
for which the VA was required to—but failed to—provide
adequate justification.
DISCUSSION
I
A
Ashford has the burden of establishing this court’s ju-
risdiction over its petition. See Disabled Am. Veterans v.
Sec’y of Veterans Affairs, 859 F.3d 1072, 1077 (Fed. Cir.
responded, expressing its “I[ntention] N[ot] T[o] A[ct]” on
Ashford’s application. J.A. 1322.
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2017). Ashford contends that we have jurisdiction under
38 U.S.C. § 502. Section 502 provides that:
An action of the Secretary [of the VA] to which sec-
tion 552(a)(1) or 553 of title 5 (or both) refers is sub-
ject to judicial review. Such review shall be in
accordance with chapter 7 of title 5 and may be
sought only in the United States Court of Appeals
for the Federal Circuit.
Title 5, section 552(a)(1) refers in relevant part to “substan-
tive rules of general applicability adopted as authorized by
law,” and “statements of general policy or interpretations
of general applicability formulated and adopted by the
agency” (i.e., interpretive rules). Rules and statements un-
der section 552(a)(1) must be published in the Federal Reg-
ister. Title 5, section 553 requires that notice-and-
comment procedures be followed for “rule making.”
The Administrative Procedure Act (“APA”) draws a dis-
tinction between “rules” and “adjudications.” A “rule” is
defined in relevant part as “the whole or a part of an agency
statement of general or particular applicability and future
effect designed to implement, interpret, or prescribe law or
policy.” 5 U.S.C. § 551(4). An “adjudication,” on the other
hand, is defined as “agency process for the formulation of
an order,” where an “order” is “the whole or a part of a final
disposition, whether affirmative, negative, injunctive, or
declaratory in form, of an agency in a matter other than
rule making but including licensing.” 5 U.S.C. §§ 551(6)–
(7). The Supreme Court has described rules as “general-
ized standard[s]” and adjudications as “individual” and
“case-by-case” determinations. NLRB v. Bell Aerospace Co.
Div. of Textron, 416 U.S. 267, 293 (1974).
Adjudications are not subject to section 502 review.
Whereas section 502 provides this court with jurisdiction
to review VA actions “to which section 552(a)(1) . . . refers,”
a different subsection—552(a)(2)—refers to “orders[] made
in the adjudication of cases,” 5 U.S.C § 552 (emphasis
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added). Section 502 thus provides jurisdiction “to review
substantive and interpretive rules, but not orders.” Coal.
for Common Sense in Gov’t Procurement v. Sec’y of Veterans
Affairs, 464 F.3d 1306, 1316 (Fed. Cir. 2006). “Adjudica-
tions, which are governed by 5 U.S.C. [§ 554], are not cov-
ered by the judicial review provisions of [section 502].”
Hilario v. Sec’y, Dep’t of Veterans Affairs, 937 F.2d 586, 588
(Fed. Cir. 1991) (interpreting an earlier version of the stat-
ute). It follows that agency actions that are part of the
“process for the formulation of an order,” 5 U.S.C.
§ 551(7)—i.e., actions that constitute an “adjudication”—
are not subject to section 502 review.
The Cure Letter is part of an adjudication. The Letter
is individualized: it addresses Ashford’s specific situation
at length, including various evidentiary facts relating to
the location of Ashford’s CEO and Ashford’s teaching facil-
ities. And the Letter’s core assertion—that Ashford does
not have the required SAA approval—does not apply to any
entity other than Ashford. The situation here is thus dif-
ferent from cases like Appalachian Power Co. v. EPA, 208
F.3d 1015, 1017–18 (D.C. Cir. 2000), and Coal. for Common
Sense, 464 F.3d at 1317, in which the agency promulgated
a generalized guidance document or letter not specific to
any entity. Instead, the Cure Letter applies existing regu-
lations (namely, 38 C.F.R. §§ 21.4250 and 21.4266) to Ash-
ford’s current situation. The Letter even states that if
Ashford “makes changes to its existing structure,” infor-
mation pertaining to those changes “may resolve this is-
sue.” J.A. 3. These characteristics are hallmarks of an
adjudication. See United States v. Fla. E. Coast Ry. Co.,
410 U.S. 224, 244–46 (1973) (recognizing a “distinction in
administrative law between proceedings for the purpose of
promulgating policy-type rules or standards, on the one
hand, and proceedings designed to adjudicate disputed
facts in particular cases on the other”); see also Wright &
Miller, 32 Fed. Prac. & Proc. Judicial Review § 8122 (2019)
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(“[A]djudication is the decisionmaking process for applying
preexisting standards to individual circumstances.”).
Ashford contends that even if the Cure Letter were
part of an adjudication, it is nevertheless reviewable be-
cause it “produces an agency statement that ‘fits within the
APA’s definition of “rule.”’” Reply Br. 9-10 (quoting Nat’l
Ass’n of Home Builders v. U.S. Army Corps of Eng’rs, 417
F.3d 1272, 1284–85 (D.C. Cir. 2005)). In particular, Ash-
ford contends that the Cure Letter “announced” two “new
legal interpretation[s].” Appellant’s Br. 2. But even if we
were to accept Ashford’s characterization of the Cure Let-
ter as “announc[ing]” these “interpretations,” this would
still fail to provide us with section 502 jurisdiction. As the
Supreme Court explained in Bell Aerospace, 416 U.S. at
294:
The views expressed in [SEC v. Chenery Corp., 332
U.S. 194 (1947)] and [NLRB v. Wyman-Gordon Co.,
394 U.S. 759 (1969)] make plain that [an agency] is
not precluded from announcing new principles in
an adjudicative proceeding and that the choice be-
tween rulemaking and adjudication lies in the first
instance within the [agency’s] discretion.
Ashford’s challenge to the Cure Letter’s “announc[ing]” of
“new interpretation[s]” is, in essence, a challenge to the
“announcing [of] new principles” that Bell Aerospace per-
mits an agency to do in an adjudication. See id.
To be sure, courts have identified exceptions to the gen-
eral principle that an adjudication does not announce rules
or statements of general policy. But none of these excep-
tions applies here. For example, in Wyman-Gordon, 394
U.S. at 764, the Court found that a “rule” was announced
in an adjudication because it was entirely forward-look-
ing—i.e., not binding on the parties to the adjudication but
instead only binding on non-parties. The Cure Letter, by
contrast, solely addresses the party to this adjudication:
Ashford.
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Our decision in Snyder v. Sec’y of Veterans Affairs, 858
F.3d 1410 (Fed. Cir. 2017) is also inapposite. There, a de-
ceased veteran’s widow seeking accrued benefits chal-
lenged an award of fees to the veteran’s former attorney.
Id. at 1411–12. The Regional Officer (“RO”) held that the
death of the veteran precluded the widow’s challenge, and
the widow appealed this determination to the Board of Vet-
erans’ Appeals. Id. The Board requested an opinion from
the VA’s General Counsel. Id. at 1412. The General Coun-
sel issued a precedential opinion, published in the Federal
Register, stating in relevant part that: “A claim, pending
at the time of a veteran’s death, challenging an attorney’s
entitlement to payment of attorney fees . . . may provide a
basis for an accrued benefits claim.” Id. The attorney chal-
lenged this opinion in this court. Id.
We held that section 502 provided us with jurisdiction
over the attorney’s challenge because the General Coun-
sel’s opinion was a “rule”; it was framed entirely in general
terms (not specific to the adjudication from which it arose)
and promulgated in a form (a precedential VA General
Counsel opinion) that VA regulations expressly make “sub-
ject to the provisions of § 552(a)(1).” Id. at 1413; see 38
C.F.R. § 14.507. Neither of these circumstances is present
here. “Though general policy considerations may influence
the [VA’s] decision, the decision will not make general pol-
icy. Only [Ashford’s] rights . . . will be affected.” 5 See
5 For this reason, this case does not involve the un-
resolved question of when a policy statement is reviewable
under section 502. The Supreme Court granted certiorari
on this question but later dismissed the case when it be-
came moot. Gray v. Sec’y of Veterans Affairs, 875 F.3d 1102
(Fed. Cir. 2017), cert. granted, judgment vacated sub nom.
Blue Water Navy Vietnam Veterans Ass’n, Inc. v. Wilkie,
139 S. Ct. 2740 (2019), and vacated and remanded sub
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Seacoast Anti-Pollution League v. Costle, 572 F.2d 872, 876
(1st Cir. 1978). Ashford has identified no authority for the
proposition that the situation here—an agency’s enforce-
ment of pre-existing law in an action against a specific en-
tity—creates a substantive rule, interpretive rule, or
statement of general policy.
Because the Cure Letter does not announce a rule or
policy statement, section 502 does not provide this court
with jurisdiction over Ashford’s petition.
B
Ashford contends that aside from a section 502 peti-
tion, which we have now foreclosed, it has no path to judi-
cial review of a VA decision to suspend or discontinue
educational assistance payments because Section 511(a)
precludes judicial review. Thus, to Ashford, a lack of 502
jurisdiction here “would improperly insulate agency law-
making from review.” Reply Br. 18.
There is a “strong presumption that Congress intends
judicial review of administrative action.” Bowen v. Mich.
Acad. of Family Physicians, 476 U.S. 667, 670 (1986). If
review were unavailable outside section 502, the presump-
tion of reviewability might justify a different reading of sec-
tion 502. As the Supreme Court noted in Cuozzo Speed
Techs., LLC v. Lee, 136 S. Ct. 2131 (2016), the presumption
applies “when [courts] interpret statutes, including stat-
utes that may limit or preclude review.” Id. at 2140. But,
contrary to Ashford’s argument, judicial review of the VA’s
adjudicatory decision is available.
Title 38, section 511(a) limits judicial review of a “deci-
sion by the Secretary under a law that affects the provision
of benefits.” It provides in relevant part that:
nom. Gray v. Wilkie, 139 S. Ct. 2764 (2019), and vacated,
774 F. App’x 678 (Fed. Cir. 2019).
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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 survi-
vors of veterans. Subject to subsection (b), the de-
cision of the Secretary as to any such question shall
be final and conclusive and may not be reviewed by
any other official or by any court, whether by an
action in the nature of mandamus or otherwise.
35 U.S.C. § 511(a) (emphasis added). But section 511 in-
cludes exceptions providing:
(b) The second sentence of subsection (a) does not
apply to—
(1) matters subject to section 502 of this ti-
tle;
...
(4) matters covered by chapter 72 of this ti-
tle[, which provides for review in this court
of decisions by the Court of Appeals for Vet-
erans Claims (“Veterans Court”)].
Id. § 511(b) (emphasis added).
Section 511 thus provides only two potential paths for
judicial review of a discontinuance “decision by the Secre-
tary”: (1) directly in this court for matters subject to section
502 (which, as we have concluded, Ashford’s challenge is
not), 38 U.S.C. § 511(b)(1); and (2) a review of a decision of
the Veterans Court, id. §§ 511(b)(4), 7292.
The second path of review involves both the Board of
Veterans’ Appeals (“Board”) and the Veterans Court. Sec-
tion 511(a)’s general preclusion language—that “the deci-
sion of the Secretary [of the VA] . . . may not be reviewed
. . . by any court”—merely channels review of these “deci-
sion[s]” through the Board and the Veterans Court. See
Blue Water Navy Vietnam Veterans Ass’n, Inc. v.
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McDonald, 830 F.3d 570, 573 (D.C. Cir. 2016) (holding that
section 511(a) divests district courts of jurisdiction over
APA challenges to “decision[s] of the Secretary”). The leg-
islative history of section 511 is consistent with this under-
standing: Congress found a “specialized review process”
desirable “both because it avoided overburdening the dis-
trict court system [with APA review] and because the dis-
trict courts lacked the necessary expertise” for review.
Bates v. Nicholson, 398 F.3d 1355, 1364 (Fed. Cir. 2005).
We conclude that the system of Board review is appli-
cable to the VA’s actions in question. The Veterans Court
has “exclusive jurisdiction to review decisions of the Board
of Veterans’ Appeals.” 38 U.S.C. § 7252. 6 And the Board
has jurisdiction to review “[a]ll questions in a matter which
under section 511(a) of this title is subject to decision by
the Secretary [of the VA].” 38 U.S.C. § 7104(a). Section
7104(a) is implemented by 38 C.F.R. § 20.104(a), which
provides in relevant part that:
All questions of law and fact necessary to a decision
by the Secretary of Veterans Affairs under a law
that affects the provision of benefits by the Secre-
tary to veterans or their dependents or survivors
are subject to review on appeal to the Secretary.
Decisions in such appeals are made by the Board of
Veterans’ Appeals. Examples of the issues over
which the Board has jurisdiction include, but are
not limited to, the following:
...
6 For example, the Veterans Court is authorized to:
“hold unlawful and set aside decisions . . . issued or
adopted by . . . the Board of Veterans’ Appeals . . . found to
be . . . arbitrary, capricious, an abuse of discretion, or oth-
erwise not in accordance with law.” 38 U.S.C. § 7261.
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(8) Veterans’ Educational Assistance (38 U.S.C.
chapter 34).
(emphasis added). The benefits provided here are “Veter-
ans’ Educational Assistance” under chapter 34. Accord-
ingly, Ashford may appeal “a decision of the Secretary” on
suspension or discontinuance of benefits to the Board, the
Board’s decision to the Veterans Court, and the Veterans
Court’s decision to this court.
Ashford appears to agree that a veteran denied educa-
tional assistance could seek review through the Board pro-
cess. But Ashford contends that the Board would lack
jurisdiction over any appeal from Ashford, stating that it is
“unaware . . . of any instance in which the Board has enter-
tained an appeal brought by anyone other than a benefi-
ciary [i.e., a veteran] or representative of a beneficiary.”
Ashford Supp. Br. 4 n.1. However, our decision in Bates is
to the contrary.
In Bates, we held that an attorney’s challenge to the
VA’s cancellation of his accreditation was a “decision . . .
under a law that affects the provision of benefits . . . to vet-
erans or the dependents or survivors of veterans” and so
must be heard by the Board. 398 F.3d at 1359, 1362 (quot-
ing 38 U.S.C. § 551(a)). We explained that although attor-
ney accreditation did not, in itself, “affect[] the provision of
benefits,” the word “law” in the statute meant a “single
statutory enactment bearing a Public Law number.” Id. at
1361. Since the Public Law that included the VA attorney
accreditation provisions (the Veterans Act of 1936) also in-
cluded other provisions that affected the provision of bene-
fits, the plaintiff’s challenge met Section 511’s “under a
law” clause. Id. at 1362.
Here, the discontinuance of funding to Ashford is under
a statutory section and subsection—38 U.S.C. § 3690(b)—
that itself “affects the provision of benefits . . . to veterans”;
the subsection provides that “[t]he Secretary [of the VA]
may discontinue the educational assistance allowance of
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any eligible veteran.” See id. § 3690(b)(1) (emphasis
added). Moreover, section 3690 was enacted as part of a
Public Law (the Vietnam Era Veterans’ Readjustment As-
sistance Act of 1972, Pub. L. No. 92-540 § 1790, 86 Stat.
1074, 1088) that broadly affects the provision of benefits to
veterans. Therefore, like the attorney in Bates, Ashford is
within section 511(a)’s “provision of benefits” language and
can appeal to the Board upon a “decision of the Secretary.”
Ashford nonetheless contends that the Board would
lack jurisdiction over an appeal by Ashford because Ash-
ford is not a natural person. Ashford notes 38 U.S.C.
§ 7105(b)(2)(A), providing that review at the Board is to be
initiated by a “claimant,” and 38 U.S.C. § 5100, defining a
“claimant” as an “individual applying for, or submitting a
claim for, any benefit under the laws administered by the
Secretary.” Ashford contends that the word “‘individual’
ordinarily means ‘[a] human being,’” and therefore Ashford
would not be a “claimant” that may initiate Board review.
Ashford Supp. Br. 2 (quoting Mohamad v. Palestinian
Auth., 566 U.S. 449, 454 (2012) (quoting 7 Oxford English
Dictionary 880 (2d ed. 1989)) (alteration in original))). But
the word “individual,” when read in the context of a statu-
tory scheme, can include both natural persons and other
entities. Thus, for example, Clinton v. City of New York,
524 U.S. 417, 428 (1998) held that “in the context of the
[relevant statutory] section[,] Congress undoubtedly in-
tended the word ‘individual’ to be construed as synonymous
with the word ‘person’” (i.e., including both “natural per-
sons” and other entities). The Supreme Court decision
upon which Ashford relies, Mohamad, is not to the con-
trary. While it concluded that an “individual” is normally
a natural person, citing Clinton, it stated that “the word
‘individual’ [does not] invariably mean[] ‘natural person’
when used in a statute. Congress remains free, as always,
to give the word a broader or different meaning.” Mo-
hamad, 566 U.S. at 455.
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Here, construing “claimant” to only include “individ-
ual[s]” that are “natural person[s]” would prevent any en-
tity other than an individual veteran from challenging any
“decision of the Secretary” denying benefits. See 38 U.S.C.
§ 511(a). We do not think Congress intended such a result,
which would be contrary to the presumption of judicial re-
view.
This result is also supported by the design of the stat-
utory scheme. Congress clearly provided that veterans de-
nied educational benefits could and should resort to the
Board appeals process. 38 U.S.C. § 7104(a). Congress
could not have intended that veterans denied educational
assistance benefits secure relief through the Board process
but deny such review to educational institutions that re-
ceive such benefits on the veterans’ behalf. To be sure, the
Board process has often been slow to process claims. See
Monk v. Shulkin, 855 F.3d 1312, 1317–18 (Fed. Cir. 2017).
But we are confident that—because of the large number of
veterans affected and the need for prompt resolution in
view of the effect of a discontinuance on the conduct of both
veterans and educational institutions—the Board will pro-
cess such complaints expeditiously. Thus, we read “claim-
ant” in 38 U.S.C. § 7105(b)(2)(A) to include legal entities
like Ashford. 7
In summary, we conclude that while neither APA nor
section 502 review is available with respect to the agency
7 For similar reasons, we find unavailing Ashford’s
reliance on certain implementing regulations and forms
that presuppose that only a veteran may appeal to the
Board. See Ashford Supp. Br. 3 (noting form that “requires
submission of the ‘veteran’s name,’ ‘veteran’s social secu-
rity number,’ ‘veteran’s VA file number,’ and ‘veteran’s
date of birth’”).
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action challenged here, the action may be reviewable pur-
suant to section 511(b)(4).
II
Even if we otherwise had section 502 jurisdiction, we
conclude that Ashford’s petition would be proper only if it
challenged a final agency action. Ashford argues that the
Cure Letter should be treated as final “because it com-
mands immediate compliance from Ashford on pain of
sanction.” Ashford Supp. Br. 8. But we disagree. The Cure
Letter was not a final agency action.
A
We first consider whether section 502 includes a final-
ity requirement. Section 502 itself is silent on finality, but
section 502 states that Federal Circuit review “shall be in
accordance with chapter 7 of title 5.” That chapter, in turn,
provides that “[a]gency action made reviewable by statute
and final agency action for which there is no other ade-
quate remedy in a court are subject to judicial review.” 5
U.S.C. § 704.
On its face, section 704 does not provide that “agency
action made reviewable by statute” must be final. But even
before the enactment of the APA in 1946, the Supreme
Court recognized that a finality requirement is inherent in
agency judicial review provisions generally. For example,
in Federal Power Commission v. Metropolitan Edison Co.,
304 U.S. 375 (1938), the Court construed a review statute
to require final agency action, though the statutory text
was silent, because a contrary “construction, affording op-
portunity for constant delays in the course of the adminis-
trative proceeding for the purpose of reviewing mere
procedural requirements or interlocutory directions, would
do violence to the manifest purpose of the [review] provi-
sion.” Id. at 383–84. More recently, in Lujan v. National
Wildlife Federation, 497 U.S. 871 (1990), the Court recog-
nized that “[e]xcept where Congress explicitly provides for
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our correction of the administrative process at a higher
level of generality, [courts] intervene in the administration
of the laws only when, and to the extent that, a specific ‘fi-
nal agency action’ has an actual or immediately threatened
effect.” Id. at 894 (emphasis added) (citing Toilet Goods
Ass’n v. Gardner, 387 U.S. 158, 164–66 (1967)).
The legislative history of section 704 supports reading
the APA itself as requiring finality. This history “reveals
that Congress intended to codify existing law on judicial
review of agency actions,” which “included a court-imposed
finality requirement as a prerequisite for judicial review.”
Carter/Mondale Presidential Comm., Inc. v. Fed. Election
Comm’n, 711 F.2d 279, 285 n.9 (D.C. Cir. 1983). “[T]he
Senate Judiciary Committee explained that one purpose of
§ 704 was ‘to negative any intention to make reviewable
merely preliminary or procedural orders where there is a
subsequent and adequate remedy at law available, as is
presently the rule.’” Id. (quoting Senate Judiciary Comm.,
Committee Print on the Administrative Procedure Act 27
(1945), Administrative Procedure Act: Legislative History
37 (1946) (citations omitted)); see also Attorney General's
Manual on the Administrative Procedure Act 101, 102
(1947) (“[M]any regulatory statutes, either expressly or as
they are interpreted, have provided for review of (and only
of) ‘final’ agency orders, with the result that the judicial
construction of such provisions will carry over . . . .” (em-
phasis added)). Thus, we agree with the D.C. Circuit that
“[w]hile only the second category [in § 704] contains a ref-
erence to finality, . . . Congress also assumed that ‘[a]gency
action made reviewable by statute’ would be final action.”
Carter/Mondale, 771 F.2d at 285 n.9. (third alteration in
original). It would indeed be anomalous to require finality
for district court decisions but to hold that non-final agency
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actions are subject to judicial review. 8 We conclude that
section 502, by incorporating 5 U.S.C. § 704, includes a fi-
nality requirement.
B
Ashford contends that even if there were a finality re-
quirement, it is not jurisdictional, and that the government
waived the defense by failing to raise it in its briefing. Ash-
ford notes that the government included a footnote in its
brief asserting that “no final agency action has occurred in
this matter rendering any section 511(a) challenge unripe,”
Appellee’s Br. 35 n.2, but contends that this assertion is not
sufficient to preserve the section 502 finality issue.
We need not decide in this case whether finality under
section 704 is jurisdictional or whether the argument was
sufficiently presented in the government’s briefing. Even
if the finality requirement were non-jurisdictional, the re-
quirement may be—and, here, should be—enforced. In
general, “[t]he matter of what questions may be taken up
and resolved for the first time on appeal is one left primar-
ily to the discretion of the courts of appeals, to be exercised
on the facts of individual cases.” Singleton v. Wulff, 428
U.S. 106, 121 (1976); see also Interactive Gift Exp., Inc. v.
Compuserve Inc., 256 F.3d 1323, 1345 (Fed. Cir. 2001).
And there are compelling reasons for Circuit courts to en-
force the finality requirement in agency cases regardless of
waiver. For example, in Automated Merchandizing Sys-
tems, Inc. v. Lee, 782 F.3d 1376 (Fed. Cir. 2015), we consid-
ered whether the challenged agency action was final—even
though the finality issue was not raised in the district
court—where the lack of finality was “clear[],” and the
8 But see Iowa League of Cities v. EPA, 711 F.3d 844,
863 n.12 (8th Cir. 2013) (stating that “[t]he word ‘final’ [in
section 704] modifies the second use of ‘agency action,’ but
not the first”).
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finality issue was “immediately reviewable” and “pre-
sent[ed] a significant question of continuing public con-
cern.” Id. at 1379–81.
We find the circumstances of this case justify enforce-
ment of the requirement of finality. There are no disputed
factual issues, so the finality issue may be resolved purely
as a question of law. As we discuss below, that the Cure
Letter is not a final agency action is beyond any doubt.
Ashford petitions directly to this court, so the finality issue
could not have been raised at any lower tribunal. Ashford
had an opportunity to address and did address the issue at
oral argument and in supplemental briefing. And, most
importantly, the courts have a strong institutional interest
in enforcing the finality requirement in the agency context.
The finality requirement “serves the important pur-
pose of promoting efficient judicial administration,” Fire-
stone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 374
(1981), and “serves to avoid ‘unnecessary piecemeal appel-
late review without precluding later appellate review of the
legal issue or any other determination made on a complete
administrative record,’” Williams v. Principi, 275 F.3d
1361, 1364 (Fed. Cir. 2002) (quoting Cabot Corp. v. United
States, 788 F.2d 1539, 1543 (Fed. Cir. 1986)). Premature
review of agency actions, by contrast, “afford[s] opportunity
for constant delays in the course of the administrative pro-
ceeding for the purpose of reviewing mere procedural re-
quirements or interlocutory directions, [and] would do
violence to the manifest purpose of the [review] provision.”
Fed. Power, 304 U.S. at 383–84; see also Abbott Labs. v.
Gardner, 387 U.S. 136, 148–49 (1967), overruled on other
grounds by Califano, 430 U.S. at 105. In light of these cir-
cumstances, we will consider the finality issue notwith-
standing any failure of the government to raise it.
C
For agency action to be “final,” two conditions must be
met: (1) “the action must mark the ‘consummation’ of the
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agency’s decisionmaking process”; and (2) “the action must
be one by which ‘rights or obligations have been deter-
mined,’ or from which ‘legal consequences will flow.’” Ben-
nett v. Spear, 520 U.S. 154, 177–78 (1997) (first quoting
Chi. & S. Air Lines, Inc. v. Waterman S.S. Corp., 333 U.S.
103, 113 (1948); and then quoting Port of Bos. Marine Ter-
minal Ass’n v. Rederiaktiebolaget Transatlantic, 400 U.S.
62, 71 (1970)).
The Cure Letter is neither the “consummation” of the
VA’s decisionmaking process nor the “determin[ation]” of
“rights or obligations.” We first address the “consumma-
tion” requirement. The Secretary of the VA has delegated
to each Director of a VA Regional Processing Office (“Re-
gional Director”) the authority to discontinue payment of
educational benefits to educational institutions like Ash-
ford. See 38 C.F.R. § 21.4211(a)(6). But a Regional Direc-
tor may discontinue assistance payments to Ashford only
after certain procedures have been followed. See generally
38 C.F.R. §§ 21.4210–16. First, the Regional Director must
notify Ashford “of any failure to meet . . . approval require-
ments,” and provide Ashford with at least 60 days to take
corrective action. See 38 C.F.R. § 21.4210(e)(1). The Cure
Letter appears to have satisfied this step, but the rules pro-
vide for further steps before discontinuance.
The Regional Director must refer the matter to the
Committee on Educational Allowances (“Committee”) to
make a recommendation as to “whether educational assis-
tance . . . should be discontinued.” 38 C.F.R
§ 21.4212(a)(5). Ashford has the right to a hearing before
the Committee, and to be represented by counsel. See 38
C.F.R. § 21.4212. The Regional Director must then con-
sider the Committee’s recommendation in deciding
whether to discontinue payment of educational benefits to
Ashford. See 38 C.F.R. § 21.4215; 38 C.F.R.
§ 21.4211(a)(6). The VA has not taken final action on dis-
continuance at least until the Regional Director decides to
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discontinue payment to Ashford. 9 The Cure Letter itself
recognizes that the Regional Director could not discontinue
educational assistance until the Committee had made a
recommendation and Ashford had an opportunity for a
hearing before the Committee. The supposed rules are
thus subject to reconsideration by the Regional Director in
the course of the discontinuance proceedings.
Ashford contends that the Regional Director’s threat of
suspension is immediately reviewable because it is en-
forced by the threat of suspension. The Regional Director
on his own can suspend benefits after the required notice,
but he has not acted here to suspend benefits and there is
no final decision as to suspension. We need not now decide
whether a decision to suspend could ever be reviewable as
a final agency action separate from a discontinuance deci-
sion. See In re Sac & Fox Tribe of Miss. in Iowa/Meskwaki
Casino Litig., 340 F.3d 749, 756 (8th Cir. 2003) (holding
that a “temporary closure order” closing an Indian tribe’s
9 Moreover, after the Regional Director’s decision on
discontinuance, Ashford may optionally seek review by the
Director, Education Services. See 38 C.F.R. § 21.4216(a).
The Director, Education Services “has the authority to af-
firm, reverse, or remand the original decision,” albeit in a
proceeding that “will not be de novo in nature” and for
which “no hearing . . . will be held.” 38 C.F.R. § 21.4216.
Under the regulation, this is the decision, unless it is a re-
mand, that “shall become the final Department decision”
on the discontinuance of Ashford’s benefits. See id. (em-
phasis added). We do not decide whether the VA’s decision
is not final until after this review occurs. See generally
Darby v. Cisneros, 509 U.S. 137, 147 (1993) (holding that
the APA’s judicial review statute “explicitly requires ex-
haustion of all intra-agency appeals mandated either by
statute or by agency rule,” but does not “require litigants
to exhaust optional appeals as well”).
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casino was not a “final agency action”—“even though it
may have an immediate effect on the [t]ribe’s finances in
the near term”—because the closure order was “on a tem-
porary basis” pending further administrative review). As
an “intermediate agency action,” a suspension of benefits
may be only “subject to review on the review of the final
agency action”: the discontinuance of educational benefits.
See 5 U.S.C. § 704 (emphasis added).
Ashford also has not satisfied the second requirement:
demonstrating that the challenged action—here, the threat
of suspension—is “one by which rights or obligations have
been determined, or from which legal consequences will
flow.” Bennett, 520 U.S. at 178 (internal quotation marks
omitted). To be sure, the Regional Director in the Cure
Letter has the authority to suspend benefits pending a fi-
nal decision, See 38 C.F.R. § 21.4211(a)(6), and has threat-
ened a suspension of benefits. But Ashford has not
demonstrated any “day-to-day” hardship resulting from
the VA’s threat of suspension of payment of educational as-
sistance. See FTC v. Standard Oil Co. of Cal., 449 U.S.
232, 239 (1980). Any hardship resulting from the suspen-
sion of payments to Ashford does not justify relaxing the
finality requirement here.
In sum, the Cure Letter is “merely tentative” and “in-
terlocutory [in] nature.” See Bennett, 520 U.S. at 178. At
this stage, there has been no final agency action.
CONCLUSION
We conclude that this case is not justiciable for two rea-
sons. First, the Cure Letter is not an agency action review-
able under section 502. Second, the Cure Letter is not
subject to review because it is not a final agency action. Ac-
cordingly, Ashford’s petition is
DISMISSED
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COSTS
No costs.