Thomas Pekular v. Gordon H. Mansfield , 22 Vet. App. 7 ( 2007 )

UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS
NO . 05-2067
THOMAS PEKULAR, APPELLANT ,
V.
GORDON H. MANSFIELD ,
ACTING SECRETARY OF VETERANS AFFAIRS, APPELLEE.
Before GREENE, Chief Judge, and KASOLD, HAGEL, MOORMAN,
LANCE, DAVIS, and SCHOELEN, Judges.
ORDER
On October 31, 2007, the Court issued a panel decision in the above-captioned appeal,
denying the appellant's motion to substitute and vacating the appealed Board of Veterans' Appeals
(Board) decision. See Pekular v. Mansfield, __ Vet.App. __, No. 05-2067 (Oct. 31, 2007). Prior
to the issuance of Pekular, three judges requested full-Court consideration. See Court's Internal
Operating Procedures ¶ V(b)(5).
Upon consideration of the foregoing, and there being no majority in favor of the request for
full-Court consideration, it is
ORDERED that full-Court consideration is DENIED.
DATED: December 20, 2007 PER CURIAM.
KASOLD, Judge, with whom DAVIS, Judge, joins, dissenting: The underlying panel
opinion in Pekular v. Mansfield creates an unnecessary, artificial barrier to substitution that has the
unfortunate effect of forcing surviving spouses and dependents to present issues already decided
contrary to their interest to the agency that rendered that adverse decision, and suffer the delay
inherent in the administrative and judicial appeal processing attendant thereto before the adverse
ruling can be judicially reviewed. See __ Vet.App. __, No. 05-2067 (Oct. 31, 2007). This decision
affects a tremendous number of cases and it presents an issue of exceptional importance warranting
full-Court consideration. See U.S. VET. APP. R. 35(c) (establishing criteria for full-Court
consideration). Accordingly, I respectfully dissent from the Court's denial of such consideration.
Rule 43 of the Court's Rules of Practice and Procedure (Rules) authorizes parties to be
substituted, as permitted by law. Such a permitted instance is when the movant has an interest in
the pending matter. Cf. FED . R. CIV . P. 17, 25 (permitting substitution of real parties in interest upon
death of a party). It is without question that a veteran's surviving spouse1 has an interest in the
outcome of his or her deceased spouse's appeal with regard to a claim for disability compensation.
This is so because the spouse is an accrued-benefits beneficiary, and the spouse's claim is directly
derivative of the deceased veteran's claim. See Padgett v. Nicholson, 473 F.3d 1364, 1369 (Fed. Cir.
2007) (Padgett III); Zevalkink v. Brown, 102 F.3d 1236, 1242 (Fed. Cir. 1996). Thus, any reversal
of a Board decision denying benefits necessarily establishes the right to the accrued benefits.
Many years passed after the Court's holding in Landicho v. Brown, 7 Vet.App. 42 (1994),
and the decision of the U.S. Court of Appeals for Federal Circuit (Federal Circuit) in Zevalkink,
before the Court recognized that an accrued-benefits beneficiary could be substituted for a deceased
veteran in a case involving a disability compensation claim. Succinctly stated, the Court held in
Landicho that (1) a compensation claim did not survive the veteran, (2) when a veteran dies while
his claim is on appeal, the Board decision should be vacated to avoid any preclusive effect on an
accrued-benefits claim, and (3) substitution could not be permitted. See Landicho, 7 Vet.App. at
46-49. Although Zevalkink only approved of this approach, but did not mandate it, see Zevalkink,
102 F.3d at 1244 (noting the possibility that Court could remand the matter for certification of a
party seeking substitution as an accrued-benefits beneficiary under statute), the Court nevertheless
refused to consider substitution for an accrued-benefits beneficiary until a panel did so very recently,
see Nolan v. Nicholson, 20 Vet.App. 340, 345 (2006).
It is thus particularly ironic that now, when substitution is just again being recognized as a
viable option, that a panel of the Court establishes an unnecessarily restrictive barrier to substitution,
i.e., that the Court will not permit substitution unless prior to death the deceased veteran completed
all briefing or expressly waived complete briefing. Although the panel ostensibly relies on Padgett
III for establishing this barrier, nothing in that case requires such action. Rather, Padgett III
reiterates the fact that an accrued-benefits claim is derivative of the veteran's claim and establishes
very clearly that the accrued-benefits beneficiary has an interest and therefore has standing in the
veteran's case on appeal. See Padgett III, 473 F.3d at 1369-71. The Federal Circuit also explicitly
noted the futility of an accrued-benefits beneficiary seeking a changed ruling from the Secretary,
thus only delaying judicial review of the matter if substitution is denied and the matter is remanded.
See id. at 1370.
Although there is discussion in Padgett III regarding the fact that the underlying appeal in
that case had been submitted for decision, that was wholly in the context of whether issuance of a
decision after the death of a party appropriately can be done nunc pro tunc. See id. at 1367-69
(citing Harris v. Comm'r, 340 U.S. 106, 113 (1950); McDonald v. Maxwell, 274 U.S. 91, 99 (1927);
Quon Quon Poy v. Johnson, 273 U.S. 352, 359 (1927); Bell v. Bell, 181 U.S. 175 179 (1901); and
Mitchell v. Overman, 103 U.S. 62, 64-66 (1880)). Submission of the case was not a prerequisite for
substitution. Moreover, when a party is substituted, that party assumes the case at the point where
the original party left it – even when briefing is incomplete or arguments have yet to be made; that
1
Congress has expressly provided that a veteran's surviving spouse, children, and dependent
parents are potential accrued-benefits beneficiaries. See 38 U.S.C. § 5121(a)(2).
2
is, the case stands as if the substituted party had been the original party. See 59 AM . JUR . 2D
PARTIES § 359 (2002); see also FED . R. CIV . P. 25(a)(1) (establishing as the only criterion for
substitution that a proper party in interest must seek substitution within 90 days after the death of
the original party is suggested on the record).
Further, the panel establishes this artificial barrier in conflict with our Rules, which permit
substitution as authorized by law. See U.S. VET. APP. R. 43. Although it is true that a panel decision
is precedential, it does not follow that our Rules should be changed by a panel. Rather, changes to
our Rules should go through the established rule-promulgating procedures that generally include the
participation of our Rules Advisory Committee and other interested parties. See 38 U.S.C.
§ 7264(a); 28 U.S.C. § 2071(b); U.S. VET. APP. R. 40(a). Indeed, the Court, the bar, and the parties
would be better served by following our normal practice.
In the end, it is the accrued-benefits beneficiary who has the interest in the matter,2 and
substituting such a person should be within the discretion of the Court so long as it does not alter
the substantive grounds of the litigation. See 59 AM . JUR . 2D PARTIES §§ 322 (2002) (substitution
granted liberally except when the effect is to state a new cause of action or otherwise prejudicial to
the other party), 328 (substitution is within the discretion of the court). When requested, substitution
should be granted liberally on a case by case basis considering the totality of the circumstances,
including the interests of justice, timely resolution of the matter, and judicial economy. Substitution
should not be denied because of an arbitrary barrier.
Should en banc review of this issue be sought again, see U.S. VET. APP. R. 35(c) (authorizing
a motion for en banc review), or changes suggested to our Rules, see U.S. VET. APP. R. 40 (Rules
Advisory Committee may recommend changes), to overturn the unfortunate effect of the underlying
panel decision, I would urge my colleagues to grant the review or change our Rules so that
substitution may again be permitted when a third party has interest and when such substitution is
otherwise warranted in a particular case.
DAVIS, Judge, with whom KASOLD, Judge, joins, dissenting: I respectfully dissent from
the Court's denial of en banc consideration, because this case presents an issue of exceptional
importance. See U.S. VET. APP. R. 35(c). I write separately to emphasize what I believe to be a
misapplication of law in Pekular v. Mansfield, __ Vet.App. __, No. 05-2067 (Oct. 31, 2007).
I compliment the Pekular panel for its analysis of the decision of the U.S. Court of Appeals
for the Federal Circuit (Federal Circuit) in Padgett v. Nicholson, 473 F.3d 1364 (Fed. Cir. 2007)
[hereinafter Padgett III], to the extent that Pekular gave meaning to the phrase "submitted for
decision." Beyond that, however, the opinion incorrectly blends the Federal Circuit's criteria for
deciding when it is appropriate to grant nunc pro tunc relief with the Federal Circuit's test for
2
See also Veterans Quality of Life Study Act of 2007, H.R. 4084, 110th Cong. § 3 (1st Sess.
2007) (legislation to substitute a potential accrued-benefits beneficiary upon the death of a claimant
pending final adjudication on a claim for any VA benefit).
3
deciding when it is appropriate to grant substitution. Specifically, Pekular characterizes the nunc
pro tunc "prerequisites" as follows:
(1) The veteran must have died after his case was submitted for decision;
(2) substitution must be appropriate, that is, the person seeking substitution must
have standing under both Article III of the U.S. Constitution and must be adversely
affected by the underlying Board decision under 38 U.S.C. § 7266(a); and (3) the
considerations of justice and fairness outlined by the Supreme Court in Mitchell [v.
Overman, 103 U.S. 62 (1880)] must be satisfied.
Pekular, __ Vet.App. at __, slip op. at 7 (citations omitted). Drawing from the criteria for nunc pro
tunc relief, Pekular adds that substitution is appropriate only after (1) "filing of the appellant's reply
brief, (2) the expiration of the time to file a reply brief, or (3) the filing of a waiver of the right to
file a reply brief." Id. at 13. The panel, apparently in an attempt to draw a bright line rule to ensure
lockstep results in a matter of judicial discretion, limits the ability of the Judges of this Court to
substitute parties to those cases where the briefing schedule has been completed or where the
completion has been waived. This holding not only unreasonably restricts the Court's own broad
rule that authorizes parties to be substituted simply "to the extent" permitted by law (see U.S. VET.
APP. R. 43), but it is also contrary to the Padgett III decision.
At the outset, Padget III identified the following two questions of law that it would resolve:
First, where a veteran dies after his case is submitted for decision, but before the
opinion issues, does the Veterans Court have authority to issue the judgment nunc
pro tunc as of the time of his death? Second, and intertwined with the first, is
whether, under these circumstances, the surviving spouse, as accrued-benefits
claimant, may be substituted on her husband's appeal[.]
Padgett III, 473 at 1367. The Court articulated considerations for each question, and answered both
in the affirmative.
A. Criteria for Nunc Pro Tunc Relief
In Padgett III, the Federal Circuit first acknowledged that Article I courts have the authority
to provide nunc pro tunc relief. Id. at 1368. The criteria for granting such relief is largely
discretionary and "'should be granted or refused, as justice may require, in view of the circumstances
of the particular case.'" Id. (quoting Mitchell, 103 U.S. at 65). The Federal Circuit proceeded to
address whether nunc pro tunc relief was appropriate in that case, centering its analysis on whether
entering Mr. Padgett's judgment nunc pro tunc would be inconsistent with the applicable benefits
statutes and the statutes governing standing and jurisdiction in this Court. Id. at 1369. The Federal
Circuit drew a distinction between Zevalkink v. Brown, 102 F.3d 1236 (Fed. Cir. 1996), where the
veteran died prior to the submission of his case, and Padgett, where the veteran died after the case
was submitted to the Court for a decision. In Mr. Padgett's case, the Federal Circuit concluded: "In
our view, granting nunc pro tunc relief here is consistent with, if not compelled by, the statutory
4
scheme for awarding benefits to veterans and their survivors." Padgett III, 473 F.3d at 1368.
Contrary to Pekular, the Federal Circuit went no further in establishing "prerequisites" for nunc pro
tunc relief.
B. Two-part Inquiry for Substitution
The Federal Circuit next addressed whether Mrs. Padgett could be substituted for the veteran
in the appeal. The Federal Circuit held that "substitution in veterans cases is a two-part inquiry."
Padgett III, 473 F.3d at 1370. First, this Court requires a case or controversy, because we do not
decide hypothetical claims. Id. Second, a party seeking substitution must be "adversely affected"
by a decision of the Board. The Federal Circuit then concluded that with respect to the case-or-
controversy requirement, Mrs. Padgett met the requirement because the issues decided in her
husband's appeal have continued relevance to and a potential preclusive effect on her accrued-
benefits claim. Id. Regarding adverse effects, the Federal Circuit concluded that, but for the nunc
pro tunc relief, the Board's decision would adversely affect her claim–it is that injury that gave her
standing.3 Id.The Federal Circuit's test for substitution is clear and unambiguous: (1) A case or
controversy must exist; and (2) the person seeking substitution must be adversely affected by the
decision of the Board. Nothing in the Federal Circuit's analysis tied this Court's ability to substitute
a party to a briefing schedule or waiver thereof. By doing so, the Pekular panel needlessly placed
this Court in a substitution straightjacket, limiting the ability of Judges to apply the Padgett III test
and determine on a case-by-case basis the appropriateness of substitution. For these reasons I
dissent.
1
At the conclusion of its substitution discussion, the Federal Circuit added that "[t]he paramount considerations
in this inquiry are justice and fairness to the parties." Id. at 1370 (citing Mitchell, 103 U.S. at 64-66, and Weil v.
Markowitz, 898 F.2d 198, 200 (D.C. Cir. 1990)). It is unclear whether the Federal Circuit intended this to be an
overarching consideration for both nunc pro tunc relief and substitution, however, both of the cases cited apply to nunc
pro tunc relief and make no mention of substitution.
5