McKinney v. McDonald , 796 F.3d 1377 ( 2015 )

United States Court of Appeals
for the Federal Circuit
______________________
MICHAEL L. MCKINNEY, THE NATIONAL
VETERANS LEGAL SERVICES PROGRAM, THE
MILITARY ORDER OF THE PURPLE HEART,
VIETNAM VETERANS OF AMERICA, THE
AMERICAN LEGION,
Petitioners
v.
ROBERT A. MCDONALD, SECRETARY OF
VETERANS AFFAIRS,
Respondent
______________________
2014-7093
______________________
Petition for review pursuant to 38 U.S.C. § 502.
______________________
Decided: August 11, 2015
______________________
DANIELLE CHRISTINE DOREMUS, Paul Hastings LLP,
San Francisco, CA, argued for petitioners. Also repre-
sented by STEPHEN BLAKE KINNAIRD, Washington, DC;
PATRICK AARON BERKSHIRE, BARTON F. STICHMAN, Na-
tional Veterans Legal Services Program, Washington, DC.
MARTIN F. HOCKEY, JR., Commercial Litigation
Branch, Civil Division, United States Department of
Justice, Washington, DC, argued for respondent. Also
2 MCKINNEY v. MCDONALD
represented by JOYCE R. BRANDA, ROBERT E. KIRSCHMAN,
JR.; MARTIE ADELMAN, DAVID J. BARRANS, Office of Gen-
eral Counsel, United States Department of Veterans
Affairs, Washington, DC.
______________________
Before O’MALLEY and WALLACH, Circuit Judges, and
GILSTRAP, District Judge. *
O’MALLEY, Circuit Judge.
Michael L. McKinney, National Veterans Legal Ser-
vices Program, Military Order of the Purple Heart, Vi-
etnam Veterans of America, and The American Legion
(collectively, “Petitioners”) petition this court under 38
U.S.C. § 502 to review the effective date that the Depart-
ment of Veterans Affairs (“VA”) assigned to 38 C.F.R.
§ 3.307(a)(6)(iv) (“the 2011 regulation”), a regulation that
provides a presumption of herbicide exposure for certain
veterans who served in or near the Korean demilitarized
zone (“DMZ”) during the Vietnam era. Petitioners chal-
lenge the VA’s decision to make the regulation effective
prospectively, rather than assigning a retroactive effective
date. Petitioners also challenge the VA’s denial of their
petition for rulemaking to amend the effective date of the
2011 regulation. Because the VA’s decision to assign the
2011 regulation a prospective effective date was not
arbitrary, capricious, or contrary to law, we deny the
petition for review.
* The Honorable Rodney Gilstrap, District Judge,
United States District Court for the Eastern District of
Texas, sitting by designation.
MCKINNEY v. MCDONALD 3
BACKGROUND
A. Veterans Benefits Act of 2003
During the Vietnam War, herbicides were applied
near the Korean DMZ from April 1968 to July 1969. In
2003, Congress passed the Veterans Benefits Act, which
authorized benefits for children with spina bifida born to
certain Korean service veterans. Veterans Benefits Act of
2003, Pub. L. No. 108-183, 117 Stat. 2651 (2003) (codified
at 38 U.S.C. § 1821). In relevant part, the Act defines “a
veteran of covered service in Korea” as “any individual”
who: (1) served “in or near” the Korean DMZ as deter-
mined by the Secretary of the VA, in consultation with the
Department of Defense (“DoD”), between September 1,
1967 and August 31, 1971; and (2) is determined by the
Secretary, in consultation with the DoD, “to have been
exposed to a herbicide agent during such service in or
near the Korean [DMZ].” 38 U.S.C. § 1821(c). Although
Congress knew that herbicide use near the Korean DMZ
ended in 1969, it extended the covered period through
August 1971 to account for residual exposure. See 149
Cong. Rec. S15133-01 (daily ed. Nov. 19, 2003) (“[E]ven
though herbicide use in or near the Korean DMZ ended in
1969, the Committees believe it is appropriate to extend
the qualifying service period beyond 1969 to account for
residual exposure.”).
B. VBA Manual Rules
In 2003, the Veterans Benefits Administration
amended its Adjudication Procedure Manual (“VBA
Manual”) to state that “[h]erbicide agents were used along
the southern boundary of the [DMZ] in Korea between
April 1968 and July 1969,” and that the DoD “has identi-
fied specific units that were assigned or rotated to areas
along the DMZ where herbicides were used.” Historical
VBA Manual M21-1, part VI, ch. 7, para. 7.20.b.2. The
VBA Manual indicated that herbicide exposure would be
conceded for veterans who served in the units DoD identi-
4 MCKINNEY v. MCDONALD
fied between April 1968 and July 1969 (“the 2003 manual
rule”). Id.On November 1, 2004, VBA revised the VBA Manual
to implement the provisions of the Veterans Benefits Act
of 2003 providing benefits for “individuals born with spina
bifida who are the children of veterans who served with
specific units in or near the DMZ in Korea between Sep-
tember 1, 1967 and August 31, 1971.” VBA Manual
Rewrite M21-1MR, part VI, ch. 2, § B (Nov. 1, 2004); Joint
Appendix (J.A.) 69. Like the 2003 manual, the 2004
revision continued to provide that the VA would concede
that certain veterans who served in areas along the
Korean DMZ when the herbicides were applied—between
April 1968 to July 1969—were exposed to herbicides for
purposes of their personal claims for benefits connected to
such exposure. J.A. 74.
C. Proposed 38 C.F.R. § 3.307(a)(6)(iv)
In 2009, the VA published a proposed rule in the Fed-
eral Register to amend its regulations to incorporate
relevant provisions of the Veterans Benefits Act of 2003.
Herbicide Exposure and Veterans with Covered Service in
Korea, 74 Fed. Reg. 36,640 (proposed July 24, 2009) (to be
codified at 38 C.F.R. pt. 3). The VA explained that 38
U.S.C. § 1821 “authorizes recognition of herbicide expo-
sure for ‘certain Korean service veterans’ for purposes of
providing benefits to a child born to them with spina
bifida.” Id. at 36,641. Based on information received
from DoD, the VA proposed to “presume herbicide expo-
sure for any veteran who served between April 1968 and
July 1969 in a unit determined by VA and DoD to have
operated in an area in or near the Korean DMZ in which
herbicides were applied.” Id. The VA also proposed that,
if a veteran “served in or near the Korean DMZ during the
period between September 1, 1967, and August 31, 1971,
but not within the time periods and geographic locations
that would qualify for a presumption of exposure under
MCKINNEY v. MCDONALD 5
this proposed rule, such service would qualify for benefits
under 38 U.S.C. § 1821 only if VA determines that the
veteran was actually exposed to herbicides during such
service.” Id. at 36,642.
In the notice of proposed rulemaking, the VA ex-
plained that there “is currently no specific statutory
authority for providing a presumption of exposure to
herbicide agents to veterans who served in Korea.” Id.Although the Veterans Benefits Act of 2003 is silent with
respect to creating a presumption for the veterans them-
selves, as distinct from their children, the VA stated that
it would be “illogical to conclude that the children with
spina bifida of the covered veterans have the disability
due to the veteran’s exposure to herbicide agents, but not
to presume that the veteran himself was exposed to
herbicide agents and merits VA benefits for any disabili-
ties associated with that exposure.” Id. The VA found
that “such a presumption would comport with known facts
and congressional intent and is within VA’s general
rulemaking authority under 38 U.S.C. 501.” Id.D. Final 38 C.F.R. § 3.307(a)(6)(iv)
After receiving comments regarding the proposed
rules, the VA published a final rule notice on January 25,
2011, extending the time period in which herbicide expo-
sure is presumed from April 1, 1968 to July 31, 1969 to
April 1, 1968 to August 31, 1971. Herbicide Exposure and
Veterans with Covered Service in Korea, 76 Fed. Reg.
4245, 4245-46 (Jan. 25, 2011). In adopting this change,
the VA explained that “it is reasonable and consistent
with the intent of Congress to concede exposure for veter-
ans who served in or near the Korean DMZ after herbicide
application ceased, because of the potential for exposure
to residuals of herbicides applied in that area.” Id. at
4245 (citing 149 Cong. Rec. H11705-01 (2003) (noting that
“it is appropriate to extend the qualifying service period
beyond 1969 to account for residual exposure”), see also
6 MCKINNEY v. MCDONALD
149 Cong. Rec. S15133-01 (2003)). Accordingly, the VA
revised 38 C.F.R. § 3.307(a)(6)(iv) “to presume herbicide
exposure for veterans who served in or near the Korean
DMZ between April 1, 1968, the earliest date of potential
exposure indicated by DoD, and August 31, 1971, the date
identified by Congress” in the Veterans Benefits Act of
2003 as a reasonable outside date for residual exposure.
Id. at 4246.
The final rule was effective February 24, 2011, and
made applicable “to all applications for benefits that are
received by VA on or after February 24, 2011 and to all
applications for benefits that were pending before VA, the
United States Court of Appeals for Veterans Claims, or
the United States Court of Appeals for the Federal Circuit
on February 24, 2011.” Id. at 4245.
E. McKinney’s Claim for Benefits
Petitioner Michael McKinney filed a claim in 2010 for
service connection based on exposure to Agent Orange
during his service along the DMZ, which began in August
1969. The VA Regional Office (“RO”) denied his claim
based on the applicable VBA manual rule, which estab-
lished a presumption of exposure to Agent Orange for
those who served in the DMZ between April 1, 1968 to
July 31, 1969. Notably, that period of presumed exposure
expired one month prior to McKinney’s service in the
DMZ. While McKinney’s claim was still pending, the VA
finalized the 2011 regulation, which extended the pre-
sumed exposure period to and including August 31, 1971.
In March 2012, the RO granted McKinney’s 2010
claim for service connection pursuant to the 2011 regula-
tion, but denied him an effective date earlier than the
regulation’s February 24, 2011 effective date. McKinney
v. Shinseki, No. 12-3639, 2013 WL 2902799, at *1 (Vet.
App. June 14, 2013). As a result, McKinney received
benefits for the post-2011 portion of his claim based on
the 2011 regulation’s presumption of exposure, but was
MCKINNEY v. MCDONALD 7
denied pre-2011 benefits based on a lack of evidence of
service connection. Petitioners’ Br. 11.
In December 2012, McKinney filed with the United
States Court of Appeals for Veterans Claims (“Veterans
Court”) a “petition for an order to eliminate the inequity
in the law that would permit the Secretary to avoid
applying a favorable precedential decision in Mallory v.
Shinseki, No. 11-0401, to the claims of petitioner and
other similarly situated claimants.” McKinney, 2013 WL
2902799, at *1. Mallory was an action then-pending
before the Veterans Court. 1 The Veterans Court dis-
1 In Mallory, the veteran alleged that he had three
conditions due to herbicide exposure in the Korean DMZ,
but was denied benefits under the VBA manual rule
because his service took place outside the period of pre-
sumed exposure. See Mallory v. Shinseki, No. 11-401-E,
2014 WL 4231304, at *1 (Vet. App. Aug. 27, 2014). After
the 2011 regulation went into effect, Mallory filed a brief
arguing that the manual rule “relied upon by the Board in
denying [his] claims should be set aside as arbitrary,
capricious, and contrary to law and the Board’s reliance
upon that provision deprived him of due process.” Id. In
July 2013, the parties entered into a settlement agree-
ment which awarded Mallory service connection based on
the date of his various claims. A footnote in the settle-
ment agreement stated that, “[n]otwithstanding the
absence of any binding precedential effect of this agree-
ment,” the VA anticipated that, “should there be similarly
situated appeals to the [Veterans Court], those Appellants
would receive similar treatment.” J.A. 86 n.2. Despite
this footnote, the text of the settlement agreement stated
that “[b]oth parties agree that this settlement is based on
the unique facts of this case and in no way should be
interpreted as binding precedent for the disposition of
future cases.” J.A. 86.
8 MCKINNEY v. MCDONALD
missed McKinney’s petition for lack of jurisdiction based
on his lack of standing. Id. at *3 (finding that McKinney’s
petition did not “seek to remedy a past injury,” but rather
sought “to prevent a potential injury that may arise if
(1) this Court in Mallory issues a precedential decision
that would entitle him to an earlier effective date for VA
benefits, and (2) his claim becomes finally adjudicated
before that decision issues”). McKinney appealed to this
court, but filed a motion to voluntarily dismiss his appeal,
which this court granted in November 2013. Order,
McKinney v. Shinseki, No. 13-7141 (Fed. Cir. Nov. 5,
2013), ECF No. 11.
F. Petition for Rulemaking
On January 28, 2014, Petitioners sent a letter to the
Secretary of the VA requesting that he change the effec-
tive date of the 2011 regulation from February 24, 2011 to
November 1, 2004, the date of the 2004 revision to the
VBA Manual. J.A. 32. Petitioners also requested that the
VA stay the regulation’s effective date as to nonfinal
claims of affected veterans. Although Petitioners recog-
nized that the 2011 regulation’s expansion of the “pre-
sumptive exposure window was a welcome rule change,”
they argued that it was “arbitrary and capricious for the
DVA not to apply the same presumption to all timely filed
claims for benefits.” J.A. 34.
In a letter dated July 10, 2014, the VA construed Peti-
tioners’ letter as a petition for rulemaking under 5 U.S.C.
§ 553(e), and denied Petitioners’ request to revise the
2011 regulation’s effective date. J.A. 8. In that letter, the
Acting VA General Counsel explained that the “2011
amendment to section 3.307(a)(6) was a liberalizing
substantive rule, which established a presumption of
herbicide exposure not required by any statute.” Id. The
VA further stated that the effective date selected was
consistent with its “usual and longstanding practice
[which] is to make such substantive rules effective pro-
MCKINNEY v. MCDONALD 9
spectively from the date that is thirty days after the date
of their publication in the Federal Register,” and that this
approach “ensures that all new liberalizing regulations
are applied in a fair, consistent, and efficient manner.”
Id.Next, the VA indicated that the 2011 regulation’s
February 24, 2011 effective date is consistent with 38
U.S.C. § 5110(g), which provides, in part, that “where
compensation . . . is awarded or increased pursuant to any
Act or administrative issue, the effective date of such
award or increase shall be fixed in accordance with the
facts found but shall not be earlier than the effective date
of the Act or administrative issue.” J.A. 11. The VA
further explained that retroactivity is not favored in the
law, and agencies have limited authority to issue retroac-
tive regulations. Indeed, the VA promulgated
§ 3.307(a)(6)(iv) pursuant to 38 U.S.C. § 501(a)—which
provides the Secretary of Veterans Affairs the authority to
prescribe all “necessary” and “appropriate” rules to carry
out the laws administered by the VA—and nothing con-
tained therein expressly authorizes retroactive regula-
tions. J.A. 12.
Finally, the VA noted that assigning the 2011 regula-
tion an earlier effective date could give rise to administra-
tive burdens and confusion in adjudicating claims. For
example, a retroactive effective date might make it diffi-
cult for adjudicators assessing the finality of a claim to
determine which regulations were in effect at the time of
the prior decision. J.A. 14. For these reasons, the VA
declined to change the 2011 regulation’s effective date. 2
Petitioners timely petitioned this court for review.
2 With respect to the language in the settlement
agreement in the Mallory case, the VA disagreed with
Petitioners’ argument that “[v]eterans falling under the
10 MCKINNEY v. MCDONALD
DISCUSSION
This case arises under our original jurisdiction pursu-
ant to 38 U.S.C. § 502, which provides that:
An action of the Secretary to which section
552(a)(1) or 553 of this title 5 (or both) refers is
subject 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.
38 U.S.C. § 502. Under this statute, we have jurisdiction
to review “the VA’s procedural and substantive rules, any
amendments to those rules, and the process in which
those rules are made or amended.” Disabled Am. Veter-
ans v. Gober, 234 F.3d 682, 688 (Fed. Cir. 2000) (“DAV”).
We review petitions under § 502 in accordance with
the standard set forth in the Administrative Procedure
Act (“APA”), 5 U.S.C. §§ 701-706. See Nyeholt v. Sec’y of
Veterans Affairs, 298 F.3d 1350, 1355 (Fed. Cir. 2002)
(citing DAV, 234 F.3d at 691). The APA requires a re-
viewing court to “decide all relevant questions of law,
interpret constitutional and statutory provisions, and
determine the meaning or applicability of the terms of an
agency action.” 5 U.S.C. § 706. The court will “hold
same exposure window as Mallory should be granted
similar relief from the 2004 manual rule.” J.A. 14. Alt-
hough the settlement agreement noted that the VA antic-
ipated “similarly situated appeals” would receive “similar
treatment,” the VA explained that the meaning of the
phrase “similar treatment” in the footnote is ambiguous,
and the text of the agreement made clear that it was
based on the “unique facts of this case.” Id. As such, the
VA found nothing in the settlement agreement supporting
Petitioners’ request for an earlier effective date for the
2011 regulation.
MCKINNEY v. MCDONALD 11
unlawful and set aside agency action” that is “arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law.” 5 U.S.C. § 706(2)(A); see Mortg.
Investors Corp. v. Gober, 220 F.3d 1375, 1378 (Fed. Cir.
2000). “This review is ‘highly deferential’ to the actions of
the agency.” DAV, 234 F.3d at 691 (citing LeFevre v.
Sec’y, Dep’t of Veterans Affairs, 66 F.3d 1191, 1199 (Fed.
Cir. 1995)).
On appeal, Petitioners argue that the 2011 regula-
tion’s effective date is arbitrary and capricious and con-
trary to law. According to Petitioners, the regulation’s
effective date: (1) is inconsistent with the VA’s obligations
under the “basic entitlement” statute—38 U.S.C. § 1110—
because it denies veterans mandatory benefits for service-
connected injuries; and (2) irrationally creates the poten-
tial for two conflicting evidentiary standards to apply to a
single pending claim.
As to the first point, Petitioners argue that, under
§ 1110, the VA is obligated to compensate veterans once it
has determined that a veteran has a service-connected
disability, but the 2011 regulation’s effective date pre-
cludes compensation prior to February 24, 2011 for Kore-
an DMZ veterans who cannot prove actual exposure to
herbicides, do not satisfy the service requirements in the
2003 manual rule, and filed claims before that date.
Petitioners’ Br. 24-25. As to the second point, Petitioners
argue that the February 24, 2011 effective date leads to
the VA’s application of two different standards for the
same veteran based on the same service: “[o]n the one
hand, the [VA] will determine that a veteran is not enti-
tled to compensation for pre-2011 benefits because he
failed to prove herbicide exposure,” while “[o]n the other,
the [VA] will find that the same veteran is entitled to
post-2011 benefits because under the 2011 regulation
exposure is presumed.” Petitioners’ Br. 30-31. According
to Petitioners, “no law requires this result.” Id. at 31.
12 MCKINNEY v. MCDONALD
While these arguments are not without some force,
the scope of our review under the “arbitrary and capri-
cious” standard is narrow, and “a court is not to substitute
its judgment for that of the agency.” Motor Vehicle Mfrs.
Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43
(1983). That said, “the agency must examine the relevant
data and articulate a satisfactory explanation for its
action.” Id. A regulation is not arbitrary or capricious if
there is a “rational connection between the facts found
and the choice made.” Id. (citation and quotation marks
omitted); Nat’l Org. of Veterans’ Advocates, Inc. v. Sec’y of
Veterans Affairs, 669 F.3d 1340, 1348 (Fed. Cir. 2012).
Applying this highly deferential standard of review,
we conclude that the VA adequately explained the facts
and policy matters underlying its denial of Petitioners’
request for rulemaking to change the effective date of the
2011 regulation. In responding to Petitioners’ request for
rulemaking, the VA explained that “[r]etroactivity is not
favored in the law” and thus “congressional enactments
and administrative rules will not be construed to have
retroactive effect unless their language requires this
result.” J.A. 11-12 (quoting Bowen v. Georgetown Univ.
Hosp., 488 U.S. 204, 208 (1988) (quotation marks omit-
ted)). Further, “a statutory grant of legislative rulemak-
ing authority will not, as a general matter, be understood
to encompass the power to promulgate retroactive rules
unless that power is conveyed by Congress in express
terms.” Bowen, 488 U.S. at 208.
It is well established that “‘the standard for finding
such unambiguous direction is a demanding one.’” Bern-
klau v. Principi, 291 F.3d 795, 805 (Fed. Cir. 2002) (quot-
ing INS v. St. Cyr, 533 U.S. 289, 316 (2001)). For
example, in Liesegang v. Secretary of Veterans Affairs, 312
F.3d 1368 (Fed. Cir. 2002), we explained that “settled and
binding precedent preclude[d] us from giving retroactive
effect to the regulation” at issue, which created a pre-
sumption of service connection for Vietnam veterans who
MCKINNEY v. MCDONALD 13
developed type-2 diabetes. Id. at 1377, n.1. In Liesegang,
we found that 38 U.S.C. § 1116, which authorized the
regulation at issue, did not contain “express and unam-
biguous permission” for VA to issue a retroactive regula-
tion. Id.In its letter denying Petitioners’ request for rulemak-
ing, the VA explained that it issued the 2011 regulation
pursuant to 38 U.S.C. § 501(a), which provides the Secre-
tary with the ability to prescribe all “necessary” and
“appropriate” rules to carry out the laws administered by
the VA, including “regulations with respect to the nature
and extent of proof and evidence and the method of taking
and furnishing them in order to establish the right to
benefits under such laws.” 38 U.S.C. § 501(a)(1). As the
VA explained, that statute provides no express and un-
ambiguous permission to issue retroactive regulations.
The VA further indicated that, “[a]lthough there may be
exceptional circumstances in which it may be appropriate
to assign a retroactive effective date to a particular regu-
lation, it would be inappropriate and inconsistent with
section 5110(g) to do so as a routine matter.” 3 J.A. 12.
Therefore, despite Petitioners’ suggestion to the contrary,
3 Section 5110(g) provides, in part, that:
where compensation . . . is awarded or increased
pursuant to any Act or administrative issue, the
effective date of such award or increase shall be
fixed in accordance with the facts found but shall
not be earlier than the effective date of the Act or
administrative issue. In no event shall such
award or increase be retroactive for more than one
year from the date of application therefor or the
date of administrative determination of entitle-
ment, whichever is earlier.
38 U.S.C. § 5110(g).
14 MCKINNEY v. MCDONALD
the VA did not state that “its hands were tied on the
effective date by section 5110(g).” Petitioners’ Br. 20.
Instead, the VA concluded that it was not appropriate to
assign a retroactive date “as a routine matter,” and that
there was no basis for doing so here.
As the government points out, moreover, the issue be-
fore us is not whether the VA could have assigned a
retroactive effective date to the 2011 regulation, but
rather, whether the VA acted arbitrarily and capriciously
in assigning a prospective date. In its letter denying
Petitioners’ request for rulemaking, the VA explained
that assigning a retroactive effective date “would poten-
tially create administrative concerns affecting VA’s ability
to adjudicate claims in a fair, consistent, and efficient
manner.” J.A. 13. The VA further indicated that “it
would be unfair for VA to assign a retroactive effective
date to the 2011 regulation . . . while not similarly assign-
ing a retroactive effective date to other regulations VA
issues that establish entitlement to benefits for other
groups of Veterans.” Id. And, because assigning a retro-
active effective date would be contrary to the VA’s stand-
ard practice, “it would create potential confusion among
both claimants and adjudicators, increasing the complexi-
ty of adjudications and the potential for errors and incon-
sistent results.” Id. There is nothing arbitrary or
capricious in that analysis.
As noted, Petitioners argue that the VA’s assignment
of a prospective effective date contravenes 38 U.S.C.
§ 1110, which authorizes the VA to provide compensation
to veterans for service-connected disability. 4 But § 1110
4 Section 1110 provides, in part:
For disability resulting from personal injury suf-
fered or disease contracted in line of duty . . . in
the active military, naval, or air service, during a
MCKINNEY v. MCDONALD 15
does not address the effective date for an award of com-
pensation, and Petitioners cite no statutory authority
requiring the VA to assign retroactive effective dates to its
regulations. Finally, we agree with the government that
the 2011 regulation’s effective date is not arbitrary or
capricious simply because it may require application of
different standards for different time periods. Indeed, the
text of § 5110(g) itself makes clear that, if an award is
based on a liberalizing statute or regulation issued while
the claim was pending, the effective date of the award
“shall not be earlier than the effective date of the Act or
administrative issue.” 38 U.S.C. § 5110(g). And, we find
nothing inherently arbitrary or capricious about “applying
intervening changes in law to different time periods
covered by a scheme of benefits payable on an ongoing
monthly basis.” Respondent’s Br. 37.
To the extent Petitioners imply that the VA failed to
comply with at least the spirit of the Mallory settlement,
that is not a complaint we can address. While the VA’s
explanation for its failure to treat other claimants as it
did Mr. Mallory is less than persuasive, the VA is correct
that its agreement in Mallory contained some room for
non-compliance in a given case. And, to the extent the VA
arguably has breached that settlement agreement, it is
Mr. Mallory who would have standing to allege such a
breach, and who would be required to establish injury
flowing therefrom.
period of war, the United States will pay to any
veteran thus disabled and who was discharged or
released under conditions other than dishonorable
from the period of service in which said injury or
disease was incurred, or preexisting injury or dis-
ease was aggravated, compensation as provided in
this subchapter . . . .
38 U.S.C. § 1110.
16 MCKINNEY v. MCDONALD
While we, individually or collectively, may have cho-
sen this regulation as one deserving of retroactive treat-
ment, that is not the question before us. We have
carefully considered all of Petitioners’ arguments and find
that Petitioners have failed to show that the VA acted
arbitrarily or capriciously in assigning the 2011 regula-
tion a prospective effective date. 5
CONCLUSION
For the foregoing reasons, we conclude that the effec-
tive date of 38 C.F.R. § 3.307(a)(6)(iv) is not arbitrary,
capricious, or in violation of law. We therefore deny this
petition for review.
DENIED
5 Petitioners contend that, “[f]or the same reasons
the 2011 regulation’s effective date is arbitrary and
capricious under 5 U.S.C. § 706(2)(A), it also violates
veterans’ Fifth Amendment rights.” Petitioners’ Br. 37.
Petitioners present no additional arguments regarding
their constitutional claims. Given our conclusion that the
regulation’s effective date is not arbitrary and capricious,
we find the Petitioners’ constitutional arguments without
merit.