Atilano v. McDonough ( 2021 )

Case: 20-1579 Document: 57 Page: 1 Filed: 09/14/2021
United States Court of Appeals
for the Federal Circuit
______________________
JESUS G. ATILANO,
Claimant-Appellant
v.
DENIS MCDONOUGH, SECRETARY OF
VETERANS AFFAIRS,
Respondent-Appellee
______________________
2020-1579
______________________
Appeal from the United States Court of Appeals for
Veterans Claims in No. 17-1428, Judge Amanda L. Mere-
dith, Judge Coral Wong Pietsch, Judge Joseph L. Toth.
______________________
Decided: September 14, 2021
______________________
SEAN A. RAVIN, Miami, FL, argued for claimant-appel-
lant.
SOSUN BAE, Commercial Litigation Branch, Civil Divi-
sion, United States Department of Justice, Washington,
DC, argued for respondent-appellee. Also represented by
CLAUDIA BURKE, JEFFREY B. CLARK, ROBERT EDWARD
KIRSCHMAN, JR.; MARTIE ADELMAN, Y. KEN LEE, Office of
General Counsel, United States Department of Veterans
Affairs, Washington, DC.
______________________
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2 ATILANO v. MCDONOUGH
Before LOURIE, TARANTO, and STOLL, Circuit Judges.
STOLL, Circuit Judge.
Jesus G. Atilano appeals the decision of the United
States Court of Appeals for Veterans Claims affirming the
Board of Veterans’ Appeals’s decision to treat Mr. Atilano’s
personal absence from his hearing as a withdrawal of his
hearing request. According to the Veterans Court,
38 U.S.C. § 7107 (2018) unambiguously requires that an
appellant exercising the right to a Board hearing person-
ally participate in that hearing. Because we conclude that
§ 7107 does not unambiguously so require, we vacate and
remand for further consideration of the statute and the
agency’s related regulations.
BACKGROUND
I
Mr. Atilano served on active duty in the Army from
1964 through 1966, including in Vietnam. In 1995,
Mr. Atilano filed his initial application for veterans disabil-
ity compensation for post-traumatic stress disorder (PTSD)
with the El Paso Regional Office (RO) of the Department of
Veterans Affairs (VA). In 2002, Mr. Atilano testified that
his diagnosis of PTSD adversely affected his ability to
maintain a job. In 2010, the RO granted Mr. Atilano’s
claim for entitlement to service connection for PTSD with
an evaluation of fifty percent effective July 31, 1995. The
RO explained that this evaluation was for occupational and
social impairment with reduced reliability and productiv-
ity.
Later in 2010, Mr. Atilano applied for increased com-
pensation based on total disability individual unemploya-
bility (TDIU). In 2012, the RO denied this request.
Mr. Atilano filed a Notice of Disagreement (NOD) with the
RO, asserting that it had failed to make specific determi-
nations and that it had also failed to address all relevant
evidence. Agreeing with Mr. Atilano, in December 2014,
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ATILANO v. MCDONOUGH 3
the RO granted him entitlement to TDIU effective Au-
gust 31, 2010, and his evaluation of PTSD was increased to
seventy percent disabling effective December 17, 2010.
The RO explained that it assigned a seventy percent eval-
uation for his PTSD based on his “[d]ifficulty in adapting
to work,” “[o]bsessional rituals which interfere with routine
activities,” “[d]ifficulty in adapting to a worklike setting,”
“[s]uicidal ideation,” “[o]ccupational and social impairment
with reduced reliability and productivity,” “[c]hronic sleep
impairment,” “[a]nxiety,” and the “examiner’s assessment
of [his] current mental functioning.” J.A. 205. Mr. Atilano
filed another timely NOD disagreeing with the disability
ratings and effective dates assigned. He perfected his ap-
peal with the Board in January 2015 by filing “VA Form 9.”
In October 2015, Mr. Atilano requested a hearing be-
fore the Board’s central office in Washington, DC to present
medical expert testimony regarding his PTSD from a li-
censed psychologist and certified rehabilitation counselor.
Mr. Atilano requested a hearing date of April 6, 2016, so
that his medical expert could testify both at his hearing
and at the hearings of other appellants represented by his
counsel, allowing the appellants to share costs related to
the expert’s testimony. He later changed the requested
date to June 13, 2016, and the Board agreed.
On the day of the hearing, Mr. Atilano’s counsel and
his medical expert, Dr. Elaine Tripi, appeared before the
Board, but Mr. Atilano did not. Mr. Atilano was unable to
attend the hearing because of his severe disabilities. Vet-
erans Law Judge Reinhart refused to hear Dr. Tripi’s ex-
pert testimony because Mr. Atilano was not present for the
hearing. Unable to present live expert testimony, Mr. Ati-
lano’s counsel requested a 60-day extension of time to sub-
mit written evidence and argument in support of the
appeal to the Board. Mr. Atilano subsequently submitted
an informal brief to the Board and attached a written med-
ical expert opinion by Dr. Tripi.
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4 ATILANO v. MCDONOUGH
The Board ultimately denied Mr. Atilano’s request for
entitlement to an increased disability rating for his evalu-
ation of PTSD and earlier effective dates for both his disa-
bility and TDIU. In rejecting Mr. Atilano’s claim, the
Board found that Dr. Tripi’s report was not consistent with
objective medical findings. As to the refusal to let Dr. Tripi
testify in person without Mr. Atilano present, the Board ex-
plained that “[p]ursuant to 38 C.F.R. § 20.700(b), the pur-
pose of a hearing is to receive argument and testimony
relevant and material to the appellate issue,” and that “[i]t
is contemplated that the appellant and witnesses, if any,
‘will be present.’” [Title Redacted by Agency],
No. 97-06 321, 2017 WL 2498917, at *7 (B.V.A. Apr. 18,
2017). The Board then explained that, “[u]nder 38 C.F.R.
§ 20.702(d), if an appellant fails to appear for a scheduled
hearing and a request for postponement has not been re-
ceived and granted, the case will be processed as though
the request for a hearing had been withdrawn.” Id. The
Board also stated its view that the purpose of the hearing
is to take testimony from the appellant, and that “allowing
an expert witness to provide testimony before a VLJ with-
out the appellant subverts the purpose of a Board hearing,
expends limited resources, and prevents another veteran”
from having a timely hearing and adjudication. Id. at *9.
The Board further held that under § 20.702(d), “[i]f the
Veteran, either on his own or by way of his attorney, had
provided good cause for his failure to appear at the hearing,
then the presiding Board member can allow for testimony
from the Veteran’s witnesses.” Id. at *7. The Board found
that Mr. Atilano’s cause for not attending the hearing—
that he was too disabled to attend—did not satisfy the good
cause requirement. Id. In so finding, the Board empha-
sized that Mr. Atilano’s counsel had several other hearings
scheduled that day, in which Dr. Tripi likewise appeared
to testify but that the veterans did not attend.
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ATILANO v. MCDONOUGH 5
II
The Veterans Court affirmed the Board. Atilano
v. Wilkie, 31 Vet. App. 272, 275 (2019). The sole issue be-
fore the Veterans Court was whether a veteran must be
present at his hearing for his legal representative to elicit
sworn testimony from witnesses before the Board. At step
one of Chevron, the Veterans Court concluded that the lan-
guage of 38 U.S.C. § 7107 (2018) unambiguously requires
the appellant’s participation at his hearing. Id. at 279 (cit-
ing Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc.,
467 U.S. 837, 842 (1984)).
The Veterans Court started its analysis with § 7107(b),
which states: “The Board shall decide any appeal only after
affording the appellant an opportunity for a hearing.” Id.
at 279. Citing definitions of the term “hearing” in Web-
ster’s Ninth Dictionary and Black’s Law Dictionary, the
Veterans Court explained that the language of § 7107(b)
requires “that the opportunity to speak to, be heard by, be-
come known to, or present a case before the Board member
is not general in nature but is ‘afford[ed]’ to ‘the appel-
lant.’” 1 Id. (alteration in original). The Veterans Court
also relied on § 7107(d)(1)(A)(ii), which states: “The Board
shall also determine whether to provide a [virtual] hearing
. . . or by the appellant personally appearing before a Board
1 Webster’s Ninth Dictionary defines “hearing” as
the “opportunity to be heard, to present one’s side of a case,
or to be generally known or appreciated.” Atilano,
31 Vet. App. at 279 (citing WEBSTER’S NINTH NEW
COLLEGIATE DICTIONARY 559 (1990) [WEBSTER’S NINTH]).
Black’s Law Dictionary defines “hearing” as consisting “of
any confrontation, oral or otherwise, between an affected
individual and an agency decision-maker sufficient to allow
[the] individual to present his case in a meaningful man-
ner.” Atilano, 31 Vet. App. at 279 (citing BLACK’S LAW
DICTIONARY 721 (6th ed. 1990)).
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6 ATILANO v. MCDONOUGH
member or panel.” Id. at 280. The court reasoned that
“there can’t be any dispute about what the italicized lan-
guage means: to come formally before an authoritative
body and to do so in person and for oneself.” Id. (internal
quotation marks omitted). Finally, the court cited
§ 7107(e)(2), pertaining to virtual hearings, which states
that any virtual hearing “shall be conducted in the same
manner as, and shall be considered the equivalent of, a per-
sonal hearing.” See id. The court reasoned that “[f]or such
hearings to be conducted in the same way and considered
equivalent to in-person hearings, they must require the
participation of the appellant.” Id. The Veterans Court
thus reasoned that the “overall statutory structure of sec-
tion 7107 confirms that an appellant exercising the right to
a[n in-person or virtual] Board hearing must participate in
that hearing.” Id.
In the alternative, the Veterans Court concluded that
the VA’s regulations interpreting § 7107 reflect a reasona-
ble construction of the statute—satisfying Chevron step
two—and that the regulations “do not allow an appellant
to refuse to participate in a hearing under these circum-
stances.” Id. at 281–83 (citing Chevron, 467 U.S. at 843).
Mr. Atilano appeals. We have jurisdiction under
§ 7292.
DISCUSSION
I
On appeal, Mr. Atilano challenges the Veterans
Court’s interpretation of 38 U.S.C. § 7107 (2018). “We re-
view statutory and regulatory interpretations of the Veter-
ans Court de novo.” Gazelle v. Shulkin, 868 F.3d 1006,
1009 (Fed. Cir. 2017) (quoting Parrott v. Shulkin, 851 F.3d
1242, 1247 (Fed. Cir. 2017)).
Mr. Atilano contends that the Veterans Court’s inter-
pretation of § 7107 incorrectly eliminates the right of a se-
verely disabled veteran to an in-person hearing.
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ATILANO v. MCDONOUGH 7
Specifically, he asserts that the Veterans Court misinter-
preted § 7107 “as requiring the presence and participation
of the appellant [as opposed to appellant’s counsel] as a pre-
requisite to calling witnesses and presenting testimony, in-
cluding the sworn testimony of a medical expert.”
Appellant’s Br. 15. He asserts that the Veterans Court’s
interpretation ignores provisions allowing veterans to be
represented by counsel. He further contends that such an
interpretation would allow only those veterans who can
personally appear and participate in hearings before the
Board to benefit from live testimony. In other words, the
Veterans Court’s interpretation would exclude any veteran
who is bed ridden or living with a severe mental disability
that prevents travel or appearance at a hearing from pre-
senting live testimony from experts, lay persons, or family
members on the veteran’s behalf in an appeal.
The government contends that the language of the stat-
ute unambiguously requires that the veteran be present for
the hearing unless good cause is shown for his absence. As-
suming the statute is ambiguous, however, the government
concedes that 38 C.F.R. § 20.700(b) does not require the ap-
pellant to personally appear, but rather that it merely con-
templates the person appearing for the hearing. Oral Arg.
at 19:37–20:20, http://oralarguments.cafc.uscourts.gov/de-
fault.aspx?fl=20-1579_04062021.mp3. Nonetheless, the
government asserts that other regulatory provisions re-
quire a veteran to appear in person or forfeit his right to an
in-person hearing and that this represents a reasonable in-
terpretation of § 7107.
The Veterans Court proceeded under the two-step
framework of analysis for statutory interpretation set forth
in Chevron, 467 U.S. at 842–43. The first step in that
framework is to determine “whether Congress has directly
spoken to the precise question at issue.” Id. at 842. If Con-
gress’s intent is clear, the court and the agency “must give
effect to the unambiguously expressed intent of Congress.”
Id. at 842–43. The Veterans Court ruled that the statute
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8 ATILANO v. MCDONOUGH
unambiguously requires the claimant’s personal presence
at the hearing. We reject that ruling.
II
To determine whether Congress has expressed a par-
ticular unambiguous intent, we employ traditional tools of
statutory construction and examine “the statute’s text,
structure, and legislative history, and apply the relevant
canons of interpretation.” Heino v. Shinseki, 683 F.3d
1372, 1378 (Fed. Cir. 2012) (quoting Delverde, SrL
v. United States, 202 F.3d 1360, 1363 (Fed. Cir. 2000)). For
the reasons provided below, we conclude that § 7107 does
not unambiguously establish that a veteran must be pre-
sent at his hearing to present expert testimony. The stat-
ute is at best silent on the point.
Nothing in the language of § 7107 speaks to whether
an appellant must personally attend his hearing or forfeit
his right to that hearing. Section 7107(b) states only that
an “appellant” is afforded “an opportunity for a hearing.”
It says nothing about who must attend the hearing. In or-
dinary legal usage, a party can be given a “hearing” solely
for the party’s counsel to argue or for presentation of testi-
mony by a person other than the party, with the party not
present but represented in person by counsel. Sec-
tion 7107(b)’s language does not indicate a special nar-
rower meaning. Nor does it distinguish between
appellants who are physically and mentally capable of par-
ticipating at a hearing and those who are not. While the
opportunity for a hearing is “afforded to the appellant,”
nothing in this statutory language demands the appellant’s
presence when the appellant is represented by an agent or
counsel.
Nor do the other subsections of § 7107 support the Vet-
erans Court’s interpretation. Although § 7107(d)(1)(A)(ii)
refers to an “appellant personally appearing before a Board
member,” that section is more reasonably read as distin-
guishing between what the statute refers to as a personal
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ATILANO v. MCDONOUGH 9
Board hearing and a virtual Board hearing. The pertinent
language states: “The Board shall also determine whether
to provide a [virtual] hearing . . . or by the appellant per-
sonally appearing before a Board member or panel.”
§ 7107(d)(1)(A)(ii) (emphasis added). We read the words
“personally appearing” in this subsection to refer to an in-
person hearing. Likewise, the Veterans Court’s citation of
§ 7107(e)(2)—which states that any virtual hearing will be
“conducted in the same manner as, and shall be considered
the equivalent of, a personal hearing”—is unavailing be-
cause the recitation of “personal hearing” is simply a refer-
ence to an in-person hearing as opposed to a virtual
hearing.
We also fail to see how the definitions of “hearing” cited
by the Veterans Court support its interpretation of § 7107.
Neither the definition in Webster’s Ninth nor the definition
in Black’s Law Dictionary requires a party to be present for
a “hearing.” Rather, under both definitions, an attorney
representative could reasonably take the place of the ap-
pellant, and the appellant would still be afforded the “op-
portunity to be heard, to present one’s side of a case, or to
be generally known or appreciated” or be able to present
his or her case “to an agency decision-maker . . . in a mean-
ingful manner” through the testimony of other witnesses.
See WEBSTER’S NINTH at 559; BLACK’S LAW at 721.
We also consider “the placement and purpose of the
language within the statutory scheme.” Barela v. Shinseki,
584 F.3d 1379, 1383 (Fed. Cir. 2009). The overall statutory
structure of Title 38 supports Mr. Atilano’s view that a vet-
eran may be represented by an agent or counsel, who may
request a hearing to present non-party witness testimony
under § 7107. For example, under 38 U.S.C. § 5904, Con-
gress granted the Secretary the authority to “recognize any
individual as an agent or attorney for the preparation,
presentation, and prosecution of claims under laws admin-
istered by the Secretary.” Given the statutory authority for
veterans to be represented by agents or attorneys before
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10 ATILANO v. MCDONOUGH
the Board, it would seem inappropriate to construe § 7107
to deny hearings for those represented veterans unable to
attend in person without clear statutory language instruct-
ing as such.
Beyond the statute’s text, we may also consider the leg-
islative history of the statute. Gilead Scis., Inc. v. Lee,
778 F.3d 1341, 1348 (Fed. Cir. 2015). The Veterans Court
previously addressed the legislative history of § 7107 in
Cook v. Snyder, 28 Vet. App. 330 (2017). In Cook, the Vet-
erans Court explained that a “claimant’s right to a personal
hearing before the Board has long been guaranteed by [the]
VA.” Id. at 336. Dating back to World War II, the right
was originally penned in the Rules of Practice of the Board
of Veterans’ Appeals, which recited that “a hearing will be
allowed, if desired by the claimant or his representative.”
Id. (emphasis added). This rule was then published in the
Code of Federal Regulations in 1964, specifying that a
“hearing on appeal shall be granted where a claimant or
his representative expresses a desire to appear in person.”
38 C.F.R. § 19.133(a) (1965) (emphasis added). Then, in
1988, Congress codified this requirement by amending
38 U.S.C. § 4004(a) to add that “[t]he Board shall decide
any such appeal only after affording the claimant an oppor-
tunity for a hearing.” 38 U.S.C. § 4004(a) (1988); see also
Cook, 28 Vet. App. at 336. This provision was then codified
in 38 U.S.C. § 7107(b) (2018). 2
The accompanying Senate Veterans’ Affairs Commit-
tee report explained that the statute “would codify a right
currently provided by [§ 19.133(a)] to an opportunity for a
hearing before the [Board].” Cook, 28 Vet. App. at 336 (al-
terations in original) (quoting S. Rep. No. 100-418, at 34
(1988)). “In the Committee’s view, the right to a hearing is
so fundamental to fair proceedings that it should be
2 Effective April 10, 2020, § 7107 was amended to ex-
clude the language in subsection (b).
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ATILANO v. MCDONOUGH 11
elevated to the level of a statutory guarantee.” Id. (quoting
S. Rep. No. 100-418, at 34). The Committee report ex-
plained that “a personal appearance before the Board
makes a significant difference in achieving favorable reso-
lution of a claim.” Id. at 337 (quoting S. Rep. No. 100-418,
at 39).
Because § 7107 was intended to codify a long-standing
rule allowing a request for a hearing by the claimant or the
claimant’s representative, we view this history as fairly
supporting Mr. Atilano’s interpretation of the statute to al-
low a veteran’s representative to participate on the claim-
ant’s behalf by presenting witness testimony at a Board
hearing even if the veteran is too disabled to attend. At a
minimum, this history does not support an interpretation
that would deny the fundamental right to a hearing to
those veterans whose disability is so severe that they can-
not attend the hearing.
We hold that the Veterans Court erred as a matter of
law when it held that “the plain meaning of the statute’s
text requires an appellant’s in-person or electronic partici-
pation.” See Atilano, 31 Vet. App. at 281. Rather, the lan-
guage of § 7107 does not unambiguously require a veteran
to be present at his hearing for his legal representative to
elicit sworn testimony from witnesses before the Board.
III
That is all we decide. The Veterans Court briefly ap-
plied Chevron step two, but its analysis of that issue war-
rants reconsideration. The Veterans Court’s analysis
focused on whether the regulations conflicted with its er-
rant interpretation of § 7107. See Atilano, 31 Vet. App.
at 282 (stating that “[n]othing in these regulations stands
in tension with the text of section 7107” and “there is
simply no indication that the regulations quoted above con-
flict with section 7107”). Further analysis is warranted re-
garding whether the regulations actually demand the
veteran’s attendance or say something less, as suggested
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12 ATILANO v. MCDONOUGH
by the agency’s concession in this court. See supra p. 7. It
is possible, moreover, that particular regulations invoked
by the agency do not warrant Chevron deference as an in-
terpretation of a statute. 3 Indeed, if the agency adopted
the regulations based on its more general authority to
adopt regulations about the conduct of Board proceedings,
without purporting to be interpreting language of § 7107—
which the agency has not argued before us—Chevron def-
erence would not seem to be the issue, but, rather, compli-
ance with the judicial review standards of 38 U.S.C.
§§ 7261 and 7292. Finally, if Chevron applies, any regula-
tory adoption of the position the agency urges must be
tested to ensure that it is not itself contrary to “unambigu-
ous statutory language” and is not an “unreasonable reso-
lution of language that is ambiguous.” United States
v. Eurodiff S.A., 555 U.S. 305, 316 (2009). The effect on
veterans so disabled that they cannot be present in person
seems relevant to at least the reasonableness issue.
We do not decide those matters in the first instance.
Nor do we decide whether, if the Board erred in refusing to
3 See Cook v. Wilkie, 908 F.3d 813, 817 (Fed. Cir.
2018) (“The Secretary has not requested Chevron deference
for his interpretation, and we agree with the Veterans
Court’s conclusion that no such deference is warranted be-
cause the Secretary has not promulgated a regulation in-
terpreting § 7107(b).”); Atilano, 31 Vet. App. at 284 (“It is
true that a regulation predating a statute cannot have been
promulgated to interpret the statute and, hence, is not en-
titled to Chevron deference. . . . Such was the situation
with subsection (a) of Rule 700.” (citation omitted)); Pub.
Citizen, Inc. v. U.S. Dep’t of Health & Hum. Servs.,
332 F.3d 654, 659 (D.C. Cir. 2003) (“[R]egulations cannot
provide a basis for deferring to the [agency’s] interpretation
of the meaning of the subsequently enacted [statutory]
phrase . . . .”).
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ATILANO v. MCDONOUGH 13
permit the medical expert to testify in person without
Mr. Atilano’s presence, that error was harmless. 4
CONCLUSION
For the foregoing reasons, we vacate the Veterans
Court’s decision and remand for proceedings consistent
with this opinion.
VACATED AND REMANDED
COSTS
No costs.
4 We note that Mr. Atilano did not challenge the VA’s
regulations as arbitrary and capricious. Thus, we do not
consider that question in this appeal either.