Florence Petite v. Denis McDonough, Secretary of Veterans Affairs

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
FLORENCE PETITE,
Claimant-Appellant
v.
DENIS MCDONOUGH, SECRETARY OF
VETERANS AFFAIRS,
Respondent-Appellee
______________________
2023-1577
______________________
Appeal from the United States Court of Appeals for
Veterans Claims in No. 19-5815, Chief Judge Margaret C.
Bartley.
______________________
Decided: December 16, 2024
______________________
KENNETH M. CARPENTER, Law Offices of Carpenter
Chartered, Topeka, KS, argued for claimant-appellant.
KELLY GEDDES, Commercial Litigation Branch, Civil
Division, United States Department of Justice,
Washington, DC, argued for respondent-appellee. Also
represented by BRIAN M. BOYNTON, MARTIN F. HOCKEY, JR.,
PATRICIA M. MCCARTHY; Y. KEN LEE, ANDREW J. STEINBERG,
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PETITE v. MCDONOUGH 2
Office of General Counsel, United States Department of
Veterans Affairs, Washington, DC.
______________________
Before DYK and STOLL, Circuit Judges, and MURPHY,
District Judge.1
MURPHY, District Judge.
Florence Petite (“Ms. Petite”), the daughter of veteran
Darren J. Petite, appeals a judgment of the United States
Court of Appeals for Veterans Claims (“Veterans Court”) in
Petite v. McDonough, No. 19-5815 (Vet. App. Mar. 4, 2023).
Ms. Petite applied for an award of attorney’s fees and
expenses pursuant to the Equal Access to Justice Act
(“EAJA”), 28 U.S.C. § 2412, which the Veterans Court
rejected.
For the reasons provided below, we conclude that the
Veterans Court erred as a matter of law when it failed to
analyze whether the Department of Veterans Affairs
(“VA”)’s administrative position, the policy adopted by the
Board of Appeals for Veterans Claims (“Board”), was
substantially justified. We vacate and remand.
BACKGROUND
Ms. Petite appeals from the decision of the Veterans
Court denying her EAJA application. Ms. Petite’s father,
Darren J. Petite, served honorably on active duty in the
United States Army from October 1993 to October 1999.
He was found totally and permanently disabled as a result
of his service-connected disabilities.
Established by Congress in 1973, the Civilian Health
and Medical Program of the Department of Veterans
1 Honorable John F. Murphy, District Judge, United
States District Court for the Eastern District of
Pennsylvania, sitting by designation.
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PETITE v. MCDONOUGH 3
Affairs (“CHAMPVA”) provides health care benefits to
eligible children and other dependents of disabled
veterans. Ms. Petite received CHAMPVA benefits as a
dependent of her father from 2008 until 2017, when the VA
informed Ms. Petite that her entitlement to benefits ended
on her eighteenth birthday because she was no longer
enrolled full-time in school. Ms. Petite filed a notice of
disagreement with the VA, arguing that it was unfair to
terminate her benefits. In December 2017, the VA issued a
decision confirming that Ms. Petite was no longer entitled
to receive CHAMPVA benefits.
Ms. Petite appealed to the Board and informed it that
she was a part-time student and worked from two to six
hours per week. Relying in part on a VA policy manual in
effect at the time, the Board found that Ms. Petite was not
qualified for CHAMPVA benefits because she was not a
full-time student. Ms. Petite appealed the Board’s decision
to the Veterans Court, which reversed and remanded,
holding that the governing statutes did not require Ms.
Petite to be a full-time student and directing the Board to
readjudicate Ms. Petite’s claim.
Ms. Petite then filed an application for attorney’s fees
and expenses under the EAJA, which mandates the award
of attorney’s fees to a prevailing party in cases brought
against the United States, unless the position of the United
States is found to have been “substantially justified or . . .
special circumstances make an award unjust.” 28 U.S.C.
§ 2412(d)(1). The Secretary of the VA opposed Ms. Petite’s
application. The Veterans Court denied Ms. Petite’s
application, finding that the Secretary’s position was
substantially justified at the administrative and litigation
phases. Ms. Petite sought reconsideration, which the
Veterans Court denied. She now appeals to our court,
arguing that the Veterans Court failed to assess whether
the Secretary’s position was substantially justified at the
administrative stage.
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PETITE v. MCDONOUGH 4
DISCUSSION
I
Our jurisdiction to review a decision of the Veterans
Court is limited by 38 U.S.C. § 7292. We must “hold
unlawful and set aside” any regulation or interpretation
relied upon by the Veterans Court that is: “(A) arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law; (B) contrary to constitutional right,
power, privilege, or immunity; (C) in excess of statutory
jurisdiction, authority, or limitations, or in violation of a
statutory right; or (D) without observance of procedure
required by law.” § 7292(d)(1). But we may not review
challenges to factual determinations or to laws or
regulations “as applied to the facts of a particular case.”
§ 7292(d)(2).
Ms. Petite does not challenge the Veterans Court’s
finding that the Secretary’s litigation position before the
Veterans Court was substantially justified; rather, she
argues that the Veterans Court failed to examine the
Secretary’s position at the administrative stage (i.e., the
Board’s decision). The Secretary argues that we lack
jurisdiction because Ms. Petite’s challenge is an application
of law to fact. The Veterans Court’s correctly stated the
law: “[t]he Secretary bears the burden of demonstrating
that his position was substantially justified at both the
administrative and litigation stages.” J.A. 3. And because
of this correct statement of law, the Secretary concludes
that any inquiry into the Veterans Court’s later statement
that “the Secretary’s position in this case at the
administrative and litigation stages was not unreasonable”
is an improper review of the application of law to fact.
Appellee’s Br. 9–11.
The Secretary is of course correct that we lack
jurisdiction to review challenges to factual determinations
or to laws or regulations “as applied to the facts of a
particular case.” § 7292(d)(2). But that is not the issue
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PETITE v. MCDONOUGH 5
before us. Here, the Veterans Court correctly quoted the
legal standard but then did not use it. Therefore, we are
not reviewing the Veterans Court’s application of law to
fact but rather determining whether the Veterans Court
applied a different standard than the one it espoused.
“[W]hether the Veterans Court applied the correct legal
standard in evaluating whether the government’s position
was ‘substantially justified’ for purposes of the EAJA is a
legal determination that falls squarely within the scope of
our appellate jurisdiction.” Patrick v. Shinseki, 668 F.3d
1325, 1329–30 (Fed. Cir. 2011). And we have this authority
“[e]ven where factual disputes may remain.” Sneed v.
Shinseki, 737 F.3d 719, 724–26 (Fed. Cir. 2013) (quoting
Lamour v. Peake, 544 F.3d 1317, 1321 (Fed. Cir. 2008)).2
The Secretary relies on Cook v. Principi, 353 F.3d 937,
940 (Fed. Cir. 2004) to assert that we lack jurisdiction over
all questions related to substantial justification because
they are inherently factual. Not so. Unlike in Cook, we
need not assess whether the Veterans Court made an
“erroneous factual determination.” Id. Our inquiry is
limited to whether the Veterans Court actually used the
test that it espoused. Notably, Cook involved a statute that
gave the Veterans Court discretion “to affirm, modify, or
reverse a decision of the [Board] or to remand the matter,
as appropriate.” Id. at 939. The appellant argued that “the
2 In Sneed, we found jurisdiction to review “whether
the Veterans Court applied an improperly narrow
standard” even though the Veterans Court cited the correct
legal standard — one that had been endorsed by this court.
737 F.3d at 724, 726–27. Jurisdiction was appropriate
because the Veterans Court “recit[ed]” the established
“open-ended” standard but then employed a narrow, closed
standard. Id. at 726. Accordingly, we vacated and
remanded to the Veterans Court for further proceedings
consistent with the correct legal standard. Id. at 729.
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PETITE v. MCDONOUGH 6
Veterans Court erred by not remanding his case.” Id. at
940. Any inquiry on appeal would have necessarily
involved questioning factual determinations to assess
whether the Veterans Court’s declination of remand was
“appropriate.” Id. at 939–41. No such discretion is present
here.
There is no dispute that the Veterans Court must
determine whether the Secretary’s position was
“substantially justified” at both the administrative and
litigation stages. Patrick, 668 F.3d at 1330. Deciding
whether the Veterans Court actually applied this standard
does not require us to second-guess the Veterans Court’s
factual determinations. Accordingly, we have jurisdiction
over that question.
II
The Veterans Court did not assess whether the
Secretary’s position was substantially justified at the
administrative phase. “[A] determination as to whether
the government’s position was substantially justified
requires a thorough evaluation of the legal and factual
support for the position that it adopted.” Id. at 1333.
The Secretary seeks to avoid vacatur by pointing to the
Veterans Court’s statement that “[the Secretary’s]
administration position, which mirrored his litigation
position, was consistent with VA policy.” Appellee’s Br. 9.
To be sure, we may not question the fact of whether the
Secretary’s position was the same at both stages, but it
does not necessarily follow that the purported position was
substantially justified at both stages.
The Veterans Court’s analysis focuses entirely on how
the Secretary’s arguments during the litigation stage at the
Veterans Court were substantially justified. And there is
essentially no discussion of the Secretary’s justifications at
the administrative stage (i.e., the policy adopted by the
Board). Although the Veterans Court stated that the
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PETITE v. MCDONOUGH 7
Secretary’s administrative position was substantially
justified for the same reasons as the Secretary’s litigation
position, the opinion fails to provide “a thorough evaluation
of the legal and factual support for the position that it
adopted.” Patrick, 668 F.3d at 1333.
For example, the Veterans Court discussed in detail
how the Secretary’s litigation position “was based on the
Secretary’s belief that section 1781 contained a program
specific definition of ‘child’” and that “the Secretary
identified legislative history that he believed was
consistent with his position.” J.A. 4–5. These statutory
arguments were not explicitly discussed in the Board’s
decision at the administrative stage.3 Yet the Veterans
Court’s analysis in the first appeal started and ended with
“the plain language of the[] statutes,” J.A. 91, and
characterized the Board’s decision as citing only to
“controlling regulations,” not statutes, J.A. 84.
The Board’s decision to terminate Ms. Petite’s benefits
based on her age and lack of full-time student status — at
the administrative stage — relied primarily on 38 C.F.R.
§ 3.57(a)(1) and the CHAMPVA Policy Manual. J.A. 77.
The Board’s decision stated that “[f]or CHAMPVA
purposes, pursuit of a course of instruction at an approved
educational institution according to 38 C.F.R.
§ 3.57(a)(1)(iii) must be on a full-time basis” and cited to
the “CHAMPVA Policy Manual Chapter 1, Section 2.5 II.B
(last accessed on August 13, 2019).” J.A. 77. But the cited
3 The Board’s decision includes only two passing
references to 38 U.S.C. § 1781, each of which lacks any
explanation of the Secretary’s reasons for importing the
definition of “child” from another subsection. The record
reflects that any further justification by the Secretary, such
as the legislative history of 38 U.S.C. § 1781, did not appear
until the litigation stage.
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PETITE v. MCDONOUGH 8
regulation does not include a full-time requirement, and we
cannot confirm the content of the Manual effective when
the Board made its decision because the Manual was never
placed in the record.
An examination by the Veterans Court of the Manual
effective in 2019 may or may not reveal that the Board was
substantially justified in taking the position that children
of veterans were required to be enrolled in a full-time
course of study to maintain benefits eligibility. Whether
the effective Manual demonstrates a lack of substantial
justification is a fact issue over which we lack jurisdiction,
so vacatur is appropriate here. Stillwell v. Brown, 46 F.3d
1111, 1113 (Fed. Cir. 1995).
CONCLUSION
The Veterans Court is tasked with assessing whether
the Secretary’s position was substantially justified at both
the administrative and litigation phases. Here, the
Veterans Court did not assess whether the Secretary’s
position was substantially justified at the administrative
stage. We reject the Secretary’s assertion that we may
overlook this omission because the Veterans Court stated
the correct standard. We vacate the Veterans Court’s
decision and remand the case for determination of whether
the Secretary’s position was substantially justified at the
administrative phase.
VACATED AND REMANDED
COSTS
The appellant shall have her costs.
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