Moffitt v. McDonald ( 2015 )

United States Court of Appeals
for the Federal Circuit
______________________
DOROTHY M. MOFFITT,
Claimant-Appellant,
v.
ROBERT A. MCDONALD,
Secretary of Veterans Affairs,
Respondent-Appellee.
______________________
2014-7071
______________________
Appeal from the United States Court of Appeals for
Veterans Claims in No. 10-4078, Judge Lawrence B.
Hagel, Judge William Greenberg, Judge William A.
Moorman.
______________________
Decided: January 21, 2015
______________________
DOROTHY M. MOFFITT, of Victorville, California, pro
se.
ALLISON KIDD-MILLER, Senior Trial Counsel, Com-
mercial Litigation Branch, Civil Division, United States
Department of Justice, of Washington, DC, for respond-
ent-appellee. With her on the brief were STUART F.
DELERY, Assistant Attorney General, ROBERT E.
KIRSCHMAN, JR., Director, and MARTIN F. HOCKEY, JR.,
Assistant Director. Of counsel on the brief were DAVID J.
2 MOFFITT v. MCDONALD
BARRANS, Acting Assistant General Counsel, and
RACHAEL T. BRANT, Attorney, United States Department
of Veterans Affairs, of Washington, DC.
______________________
Before LOURIE, MOORE, and O’MALLEY, Circuit Judges.
O’MALLEY, Circuit Judge.
Dorothy M. Moffitt (“Mrs. Moffitt”) appeals pro se
from a decision of the United States Court of Appeals for
Veterans Claims (“Veterans Court”) affirming the Board
of Veterans’ Appeals (“Board”) decision that denied enti-
tlement to enhanced dependency and indemnity compen-
sation under 38 U.S.C. § 1311. Moffitt v. Shinseki, 26 Vet.
App. 424 (2014). For the reasons explained below, we
affirm.
BACKGROUND
Mrs. Moffitt is the widow of Douglas A. Moffitt, a vet-
eran of World War II. Mr. Moffitt served on active duty in
the United States Army from July 1944 until May 1946,
when he was discharged as a result of injuries sustained
during service. In 1946, Mr. Moffitt applied for disability
benefits and the Department of Veterans Affair’s Regional
Office (“RO”) awarded him a combined disability rating of
100%. In a subsequent rating decision, however, the RO
reduced Mr. Moffitt’s benefits to a combined 60% disabil-
ity rating, with special monthly compensation, effective
March 1953. With the exception of a three-month period
in 1958, during which Mr. Moffitt received a temporary
disability rating of 100%, his combined rating remained at
60% until his death in 1982.
When a veteran dies from a service-connected or com-
pensable disability, the surviving spouse, children, and
parents may qualify for dependency and indemnity com-
pensation (“DIC”). 38 U.S.C. § 1310. If the veteran’s
death is not service-connected, 38 U.S.C. § 1318 provides
MOFFITT v. MCDONALD 3
that the surviving spouse and children may qualify for
DIC if the veteran received, or was “entitled to receive,”
benefits for a service-connected disability that was rated
totally disabling for the 10-year period prior to the veter-
an’s death. 38 U.S.C. § 1318(b).
After Mr. Moffitt’s death, Mrs. Moffitt sought DIC
benefits pursuant to 38 U.S.C. § 1151, which provides
that, when a veteran suffers an additional disability or
death as the result of VA hospitalization, medical or
surgical treatment, or examination, disability or DIC
benefits shall be awarded in the same manner as if such
disability or death were service-connected. In a June
1991 decision, the Board concluded that, “[w]ith the
benefit of the doubt being resolved in the appellant’s
favor, the veteran’s death was the result of injury in-
curred during hospitalization at a VA facility, within the
meaning of the pertinent laws and regulations.” Appen-
dix (“A”) 40. Accordingly, the Board granted Mrs. Mof-
fitt’s claim for DIC benefits. 1 The Department of
Veterans Affairs (“VA”) also posthumously granted Mr.
Moffitt’s pending claim for total disability based on indi-
vidual unemployability (“TDIU”) and assigned a 1979
effective date.
In July 1999, Mrs. Moffitt filed “a motion to revise a
January 1980 rating decision that denied her husband’s
benefits for post-operative left inguinal hernia and phlebi-
tis on the basis of clear and unmistakable error.” Moffitt,
26 Vet. App. at 426. A month later—in August 1999—
Mrs. Moffitt applied for enhanced DIC benefits pursuant
to 38 U.S.C. § 1311, which applies where the veteran “was
entitled to receive” compensation on the basis of a total
1 The Board granted Mrs. Moffitt’s claim for DIC
benefits under 38 U.S.C. § 351, which was redesignated
as 38 U.S.C. § 1151. See Pub. L. No. 102-83, § 5(a), 105
Stat. 378, 406 (Aug. 6, 1991).
4 MOFFITT v. MCDONALD
disability rating for “a period of at least eight years im-
mediately preceding death.” 38 U.S.C. § 1311(a)(2). 2
According to Mrs. Moffitt, her husband “should have been
rated at [] 100% [disabled] for 10 or more years [prior to
his death].” Moffitt, 26 Vet. App. at 426 (alteration in
original).
The RO sent Mrs. Moffitt a letter indicating that it
was deferring consideration of her claim for enhanced DIC
benefits “pending the completion of litigation in the case
of Hix v. West.” Id. (citing Hix v. West, 12 Vet. App. 138
(1999)). The issue in Hix was whether the “entitled to
receive” language in § 1311 permits an award of enhanced
DIC benefits based on a “hypothetical entitlement theo-
ry.” A “hypothetical entitlement” claim—like Mrs. Mof-
fitt’s—is a new claim that “would permit the Board to
adjudicate a claim for DIC benefits on a hypothetical
basis, ‘without regard to claim filing or claim dispositions
during the veteran’s lifetime.’” Kernea v. Shinseki, 724
F.3d 1374, 1377 (Fed. Cir. 2013) (quoting Nat’l Org. of
Veterans’ Advocates, Inc. v. Sec’y of Veterans Affairs, 314
F.3d 1373, 1377 (Fed. Cir. 2003) (“NOVA II”)). “In other
words, the Board could make a ‘de novo determination of
the veteran’s disability, upon the entirety of the record
including any new evidence presented by the surviving
spouse.’” Id. (quoting Hix v. Gober, 225 F.3d 1377, 1380-
81 (Fed. Cir. 2000)).
2 Although the record reveals that Mrs. Moffitt’s
August 1999 filing requested DIC benefits under 38
U.S.C. § 1318, subsequent documents clarify that she was
seeking enhanced DIC benefits under 38 U.S.C. § 1311.
See Moffitt v. Shinseki, No. 08-2894, 2010 WL 1337707, at
*1 (Vet. App. Apr. 7, 2010) (“Ms. Dorothy M. Moffitt
moves pro se for the remand of an August 11, 2008,
decision of the [Board] that denied entitlement to en-
hanced [DIC] benefits pursuant to 38 U.S.C. § 1311.”).
MOFFITT v. MCDONALD 5
In the interim, the RO found no clear and unmistaka-
ble error (“CUE”) in the January 1980 rating decision that
denied Mr. Moffitt benefits for a hernia and thrombophle-
bitis. The Board affirmed, and Mrs. Moffitt appealed that
decision to the Veterans Court. In May 2002, Mrs. Mof-
fitt—who was represented by counsel—entered into a
joint motion for partial remand for the Board to consider
her still-pending claim for enhanced DIC benefits. In the
motion, the parties agreed that “the denial of entitlement
to accrued benefits on the basis of CUE in a January 18,
1980 rating decision that denied service connection for a
hernia and thrombophlebitis should be deemed aban-
doned.” A46.
The Board remanded Mrs. Moffitt’s claim for en-
hanced DIC benefits to the RO. In an April 2004 rating
decision, the RO denied her claim on the merits, finding
that the evidence of record failed to show that Mr. Moffitt
became totally disabled eight years or more before his
death. Mrs. Moffitt appealed that decision to the Board.
In an August 2008 decision, the Board denied Mrs.
Moffitt’s claim for enhanced DIC benefits, finding that the
VA’s regulations, which were amended while Mrs. Mof-
fitt’s claim was pending, precluded her hypothetical
entitlement theory. Specifically, “38 C.F.R. § 20.1106 was
amended to clarify that, as with decisions under 38 U.S.C.
1318, decisions under 38 U.S.C. 1311(a)(2) will be decided
taking into consideration prior dispositions made during
the veteran’s lifetime of issues involved in the survivor’s
claim.” A61. And, in 2005, the VA promulgated 38 C.F.R.
§ 3.10(f), which defined the phrase “entitled to receive” in
§ 1311(a)(2) to preclude hypothetical entitlement. See
Dependency and Indemnity Compensation: Surviving
Spouse’s Rate, 70 Fed. Reg. 72211, 72212 (Dec. 2, 2005).
The Board explained that, while Mrs. Moffitt’s claim
was pending, this court upheld VA regulations barring
use of the hypothetical entitlement theory to establish
6 MOFFITT v. MCDONALD
entitlement to DIC benefits under either § 1311 or § 1318.
See NOVA II, 314 F.3d at 1378-80 (holding that the VA
could construe “entitled to receive” in § 1311 and § 1318 to
preclude hypothetical entitlement claims). For example,
the Board cited this court’s decision in Rodriguez v. Peake,
511 F.3d 1147, 1156 (Fed. Cir. 2008), where we held that
an amendment to 38 C.F.R. § 3.22 barring hypothetical
entitlement as a basis for DIC benefits under section
§ 1318 could be applied to claims filed prior to the
amendment.
Given this precedent, the Board concluded that “the
Courts have held that ‘hypothetical entitlement’ as an
additional basis for establishing eligibility to enhanced
DIC benefits is prohibited regardless of when the claim is
filed.” A63. Although the Board recognized that the VA’s
regulations permit enhanced DIC benefits where the
deceased veteran filed a claim during his lifetime and
would have received total disability compensation for at
least eight years before death but for CUE, Mrs. Moffitt
did not allege CUE with respect to any prior decision.
Because Mrs. Moffitt’s claim for increased DIC benefits
was based solely on hypothetical entitlement to a disabil-
ity rating, she was precluded from asserting it.
Mrs. Moffitt appealed the Board’s decision to the Vet-
erans Court. Because the VA had amended 38 C.F.R.
§ 20.1106 and added 38 C.F.R. § 3.10 while Mrs. Moffitt’s
claim was pending, the parties agreed that remand was
necessary for the Board to consider and apply the retroac-
tivity analysis set forth in Princess Cruises, Inc. v. United
States, 397 F.3d 1358 (Fed. Cir. 2005). Accordingly, the
Veterans Court remanded her claim for further adjudica-
tion. Moffitt v. Shinseki, No. 08-2894, 2010 WL 1337707,
at *1 (Vet. App. Apr. 7, 2010).
Applying the Princess Cruises factors on remand, the
Board determined that application of the amended regu-
lations to Mrs. Moffitt’s claim did not create an unlawful
MOFFITT v. MCDONALD 7
retroactive effect. Specifically, the Board compared Mrs.
Moffitt’s § 1311(a)(1) claim to the § 1318 claim at issue in
Rodriguez, and concluded that: (1) the changes in 38
C.F.R. §§ 20.1106 and 3.10 3 were similar to the changes to
38 C.F.R. § 3.22, which this court found not substantial in
Rodriguez; (2) as was the case for the claimant in Rodri-
guez, Mrs. Moffitt filed her claim for enhanced DIC bene-
fits prior to the change in the law, and there was no
indication that she relied on the prior law or would have
acted differently if the law had not changed; and (3) Mrs.
Moffitt “could not have relied on the theory of hypothet-
ical entitlement when she first filed her claim” because it
was the “VA’s consistent policy to not allow this ap-
proach.” In re Moffitt, No. 06-24 327, 2010 BVA LEXIS
49605, at *17-20 (Bd. Vet. App. Nov. 23, 2010) (“2010
Board Decision”). Because her claim was based on a
hypothetical entitlement theory, the Board concluded that
Mrs. Moffitt was not entitled to enhanced DIC benefits.
Id. at *21-22. Mrs. Moffitt appealed this decision to the
Veterans Court.
In June 2013, the Veterans Court stayed proceedings
in Mrs. Moffitt’s appeal pending resolution of this court’s
decision in Kernea v. Shinseki, 724 F.3d 1374 (Fed. Cir.
2013). In Kernea, we held that § 3.10(f)(3) can apply
retroactively to prohibit § 1311 claims based on a theory
of hypothetical entitlement. Id. at 1381-82. Shortly
thereafter, the Veterans Court lifted the stay and the
parties filed supplemental briefing on the effect this
court’s decision in Kernea had on Mrs. Moffitt’s appeal.
3 Although the Board’s decision cites 38 C.F.R.
§ 3.5(e), that section was removed and replaced with new
38 C.F.R. § 3.10, which includes the “entitled to receive”
language at issue in this appeal in § 3.10(f)(3). See De-
pendency and Indemnity Compensation: Surviving
Spouse’s Rate, 70 Fed. Reg. 72211, 72212 (Dec. 2, 2005).
8 MOFFITT v. MCDONALD
Before the Veterans Court, Mrs. Moffitt argued,
through counsel, that her case is distinguishable from
Kernea, because she filed her claim in August 1999, before
the VA took steps to prohibit use of the hypothetical
entitlement theory, whereas the claimant in Kernea filed
her claim in June 2003, after the VA began “taking steps
to overturn hypothetical entitlement for claims under
section 1311(a)(2).” Moffitt, 26 Vet. App. at 427. A three-
judge panel of the Veterans Court found that this distinc-
tion was insufficient to warrant a different outcome,
particularly since “it should have been apparent that
when Mrs. Moffitt filed her claim in 1999, the hypothet-
ical entitlement theory may no longer be permitted for
section 1311 claims.” Id. at 432. Applying the Princess
Cruises factors, as we did in Kernea, the Veterans Court
found that the amendment to § 20.1106 and promulgation
of § 3.10(f)(3) could be applied retroactively to bar Mrs.
Moffitt’s theory of entitlement. Accordingly, the Veterans
Court affirmed the Board’s 2010 decision denying Mrs.
Moffitt’s claim for increased DIC benefits.
Mrs. Moffitt timely appealed to this court. We have
jurisdiction under 38 U.S.C. § 7292.
DISCUSSION
Our jurisdiction to review Veterans Court decisions is
limited by statute. Pursuant to 38 U.S.C. § 7292(a), the
court may review “the validity of a decision of the [Veter-
ans] Court on a rule of law or of any statute or regulation
. . . or any interpretation thereof (other than a determina-
tion as to a factual matter) that was relied on by the
[Veterans] Court in making the decision.” In doing so, we
must decide “all relevant questions of law” and set aside
any regulation or interpretation relied on by the Veterans
Court that is “(A) arbitrary, capricious, an abuse of discre-
tion, or otherwise not in accordance with law; (B) contrary
to constitutional right, power, privilege, or immunity;
(C) in excess of statutory jurisdiction, authority, or limita-
MOFFITT v. MCDONALD 9
tions, or in violation of a statutory right; or (D) without
observance of procedure required by law.” Id. at (d)(1).
This court reviews the Veterans Court’s legal deter-
minations de novo. Rodriguez v. Peake, 511 F.3d 1147,
1152 (Fed. Cir. 2008). Accordingly, we review the “Veter-
ans Court’s legal determinations regarding the validity of
a law or any interpretation thereof” without deference.
Id. Absent a constitutional issue, however, we may not
review factual determinations or the application of a law
or regulation to the facts of a particular case. 38 U.S.C.
§ 7292(d)(2).
On appeal, Mrs. Moffitt argues that the Veterans
Court erred when it reviewed the documents she sent in
support of her enhanced DIC claim. She asks this court to
“review ALL documentation that is available to review
the severe war wounds that the veteran . . . sustained on
the battlefield.” Informal Br. 2. These assertions, which
appear to relate only to factual issues underlying Mrs.
Moffitt’s claim, are outside the scope of this court’s juris-
diction. See 38 U.S.C. § 7292(d)(2).
In her Informal Reply Brief, however, Mrs. Moffitt
challenges the Veterans Court’s retroactive application of
the amended VA regulations barring hypothetical enti-
tlement claims for enhanced DIC benefits under § 1311.
Specifically, she argues that she filed her claim for en-
hanced DIC benefits in August 1999—before the VA
amended its regulations in 2005—and that, “when a claim
is filed some years before a law is passed, it should be
valid and honored while awaiting the passage of a law.”
Informal Reply 1. 4
4 Although Mrs. Moffitt did not specifically raise
this argument in her opening brief on appeal, she was
represented by counsel in the proceedings before the
Veterans Court and her counsel challenged the retroac-
10 MOFFITT v. MCDONALD
In response, the Secretary argues that, “[t]o the ex-
tent Mrs. Moffitt challenges the Veterans Court’s holding
that the Princess Cruises factors weigh in favor of apply-
ing the amended VA regulations barring hypothetical
entitlement claims for enhanced DIC under section 1311,
and to the extent the Court determines that such a chal-
lenge falls within its jurisdiction,” we should affirm. Sec’y
Informal Br. 10. According to the Secretary, the VA’s
amended regulations barring hypothetical entitlement
claims are not unlawfully retroactive.
This court has identified three factors a court is to
consider in determining whether a regulation should be
given retroactive effect: (1) “the nature and extent of the
change of the law”; (2) “the degree of connection between
the operation of the new rule and a relevant past event”;
and (3) “familiar considerations of fair notice, reasonable
reliance, and settled expectations.” Princess Cruises, 397
F.3d at 1364 (quoting Landgraf v. USI Film Prods., 511
U.S. 244, 270 (1994)).
As noted, in Kernea, we found that all three factors
weighed in favor of applying § 3.10(f)(3) retroactively to
prohibit the claimant’s hypothetical entitlement claim
under § 1311(a)(2). 724 F.3d at 1382. According to the
Secretary, the Veterans Court in this case properly con-
cluded that application of the Princess Cruises factors
results in the same outcome as in Kernea. For the rea-
sons explained below, we agree.
A. Nature and Extent of the Change in the Law
The first Princess Cruises factor is “the nature and ex-
tent of the change of the law.” 397 F.3d at 1364 (internal
tive application of the VA’s amended regulations. Mrs.
Moffitt is pro se in this appeal, and we construe her
submissions liberally as a challenge to the retroactive
application of the revised regulations.
MOFFITT v. MCDONALD 11
quotation and citation omitted). Although Mrs. Moffitt is
correct that the revised regulations prohibiting hypothet-
ical entitlement were not in effect when she filed her
claim for enhanced DIC benefits in 1999, we agree with
the Secretary that the VA’s amendment to § 20.1106 and
promulgation of § 3.10 “merely codified VA’s long-
standing opposition to the hypothetical entitlement
theory.” Sec’y Informal Br. 12.
Congress created enhanced DIC benefits as part of the
Veterans’ Benefits Act of 1992 for survivors of veterans
who were in receipt of or were “entitled to receive” bene-
fits for a service-connected disability that was rated
totally disabling for at least eight years before death.
Pub. L. No. 102-568, § 102(a)(2), 106 Stat. 4320, 4321-22
(Oct. 29, 1992). By that time, the VA General Counsel
had issued a precedential opinion interpreting “entitled to
receive” in a similar statute—38 U.S.C. § 1318—as the
“actual receipt of total disability benefits for a minimum
period of 10 years, not [merely] entitlement thereto.”
Moffitt, 26 Vet. App. at 431 (quoting VA Gen. Coun. Prec.
68-90 (July 18, 1990) (alteration in original)). In that
report, the “VA gave no indication that it would provide
de novo review of a veteran’s previously denied claims to
see if she or he hypothetically would be entitled to a total
disability rating.” Id.
In 1992—roughly nine months before Congress
amended § 1311 to include enhanced DIC benefits—the
VA promulgated 38 C.F.R. § 20.1106, which provided
that:
Except with respect to benefits under the provi-
sions of 38 U.S.C. 1318 . . . , issues involved in a
survivor’s claim for death benefits will be decided
without regard to any prior disposition of those is-
sues during the veteran’s lifetime.
38 C.F.R. § 20.1106 (1992). In our 2000 decision in Hix,
we found that, because § 20.1106 specifically excluded
12 MOFFITT v. MCDONALD
§ 1318—but not § 1311—hypothetical entitlement claims
were permitted under § 1311, but not under § 1318. 225
F.3d at 1380-81 (“We affirm the ruling of the Court of
Appeals for Veterans Claims that the ‘entitled to receive’
provision of § 1311(a)(2) requires de novo determination of
the veteran’s disability, upon the entirety of the record
including any new evidence presented by the surviving
spouse.”). 5
In 2001, the VA proposed an amendment to § 20.1106
to:
make VA’s position clear that entitlement to bene-
fits under either 38 U.S.C. 1318 or 38 U.S.C. 1311
must be based on the determinations made during
the veteran’s lifetime, or challenges to such deci-
sions on the basis of clear and unmistakable error,
rather than on de novo posthumous determina-
tions as to whether the veteran hypothetically
could have been entitled to certain benefits if he
or she had applied for them during his or her life-
time.
Board of Veterans’ Appeals Rules of Practice: Claim for
Death Benefits by Survivor, 66 Fed. Reg. 65,861, 65,861
(Dec. 21, 2001). The amendment, which became effective
in May 2002, provided that: “[e]xcept with respect to
benefits under the provisions of 38 U.S.C. § 1311(a)(2),
[and] 1318, . . . issues involved in a survivor’s claim for
death benefits will be decided without regard to any prior
disposition of those issues during the veteran’s lifetime.”
Board of Veterans’ Appeals Rules of Practice: Claim for
5 As the Secretary explains, § 20.1106 did not refer
to § 1311, “which, at that time, did not contain the same
‘entitled to receive’ provision found in section 1318, but
instead tied DIC payments to a veteran’s military rank.”
Sec’y Informal Br. 13 (citing 38 U.S.C. § 1311(a) (1991)).
MOFFITT v. MCDONALD 13
Death Benefits by Survivor, 67 Fed. Reg. 16,309, 16,317
(Apr. 5, 2002) (emphasis added).
On appeal, this court held that the VA reasonably
construed “entitled to receive” in § 1311 and § 1318 to
exclude “new claims filed posthumously by a veteran’s
survivor, that is, claims where no claim had been denied
and was not subject to reopening.” NOVA II, 314 F.3d at
1380. We remanded, however, for further rulemaking
proceedings so that the VA could harmonize the imple-
menting regulations for § 1311(a)(2) and § 1318. Id. at
1381.
This court’s remand in NOVA II prompted the VA to
promulgate 38 C.F.R. § 3.10(f)(3), which interpreted the
phrase “entitled to receive” in § 1311(a)(2) to prohibit
hypothetical entitlement claims. See Kernea, 724 F.3d at
1380. Specifically, § 3.10(f)(3) defines “entitled to receive”
as used in § 1311(a)(2) to mean “that the veteran filed a
claim for disability compensation during his or her life-
time and” either: (1) “would have received total disability
compensation for [the eight years prior to death] but for
[CUE] . . . in a decision on a claim filed during the veter-
an’s lifetime;” or (2) “service department records . . .
provide[] a basis for reopening a claim finally decided
during the veteran’s lifetime” and retroactively awarding
a total disability rating for the eight years prior to death.
38 C.F.R. § 3.10(f)(3)(i-ii).
Section 3.10 became effective December 2, 2005, and
applies to new claims filed after that date, as well as
claims like Mrs. Moffitt’s, which were pending before the
VA prior to the effective date of the rule. See 70 Fed. Reg.
at 72,212. This court subsequently affirmed § 3.10 as a
reasonable interpretation of statutory authority. See
Nat’l Org. of Veterans’ Advocates, Inc. v. Sec’y of Veterans
Affairs, 476 F.3d 872, 876-77 (Fed. Cir. 2007) (“NOVA
III”) (finding that the VA’s regulations implementing both
14 MOFFITT v. MCDONALD
§ 1311 and § 1318—38 C.F.R. § 3.10(f)(3) and 38 C.F.R.
§ 3.22(b), respectively—were reasonable).
As the Veterans Court explained, we have consistent-
ly held that the VA’s amended regulations barring hypo-
thetical entitlement claims can be applied retroactively to
claims filed before the regulatory amendments took effect.
See Rodriguez, 511 F.3d at 1156 (holding that the amend-
ed version of 38 C.F.R. § 3.22 “may be applied to claims
for DIC benefits filed by survivors before the amendment
took effect”); Tarver v. Shinseki, 557 F.3d 1371, 1374-77
(Fed. Cir. 2009) (finding that 38 C.F.R. § 3.22 applies
retroactively to previously-filed DIC claims).
Relevant to this appeal, we recently found that 38
C.F.R. § 3.10(f)(3) applied retroactively to bar a claim for
enhanced DIC benefits under § 1311(a)(2) based on the
hypothetical entitlement theory. Kernea, 724 F.3d at
1379-82. As noted, before the Veterans Court, Mrs.
Moffitt argued that her case is distinguishable from
Kernea because she filed her claim for enhanced DIC
benefits in August 1999, before the VA took steps to
prohibit the use of hypothetical entitlement. In contrast,
by the time Ms. Kernea filed her claim in 2003, “the VA
had amended § 20.1106 to explicitly refer to § 1311 and
thereby bring the interpretation of § 1311(a)(2) in line
with that of § 1318.” Kernea, 724 F.3d at 1379. As we
recognized in Tarver, however, the timing of a surviving
spouse’s DIC claim “is irrelevant to the first Princess
Cruises factor—the nature and extent of the change in the
law.” Tarver, 557 F.3d at 1375. And in Rodriguez, we
acknowledged that “many claimants who would have had
a claim for DIC benefits” under precedent accepting the
hypothetical entitlement theory “no longer have a claim
due to the [VA’s] amendment.” 511 F.3d at 1153. The
“analysis, however, cannot end there.” Id. Instead, in
both Tarver and Rodriguez, we found the regulatory
amendments at issue insignificant because they “merely
reinstated the [VA’s] earlier interpretation” of the phrase
MOFFITT v. MCDONALD 15
“entitled to receive” in § 1318. Tarver, 557 F.3d at 1375
(citing Rodriguez, 511 F.3d at 1154).
We agree with the Veterans Court that the VA’s
amendment to § 20.1106 and promulgation of § 3.10(f)(3)
merely “reiterate VA’s long-standing opposition to the use
of hypothetical entitlement.” Moffitt, 26 Vet. App. at 431
(internal quotation and citation omitted). The 1990 VA
General Counsel opinion, which interpreted “entitled to
receive” as requiring the “actual receipt” of benefits
during a veteran’s lifetime, coupled with the VA’s regula-
tory amendments, support the Veterans Court’s conclu-
sion that the “Secretary has consistently disfavored
hypothetical entitlement.” Id. And, as the Secretary
argues, “[a]lthough the hypothetical entitlement theory
was cognizable for a brief period of time following Hix,
that interpretation was not well settled, not of long stand-
ing, and was never expressly endorsed or adopted by VA.”
Sec’y Informal Br. 18. Accordingly, the first Princess
Cruises factor weighs in favor of applying amended
§ 20.1106 and § 3.10(f)(4) to Mrs. Moffitt’s claim.
B. Connection with Past Events
The second Princess Cruises factor is “the degree of
connection between the operation of the new rule and a
relevant past event.” 397 F.3d at 1365. To determine
“whether the statute or regulation at issue has a signifi-
cant nexus to relevant past events, we have frequently
looked to whether the rule affects ‘primary conduct,’ i.e.,
the conduct that gave rise to the suit or claim at issue.”
Tarver, 557 F.3d at 1375 (quoting Rodriguez, 511 F.3d at
1155). In Tarver and Rodriguez, we found that the
amendment of 38 C.F.R. § 3.22 to preclude hypothetical
entitlement claims under § 1318 did not have a significant
connection to past events. See Tarver, 557 F.3d at 1375-
76; Rodriguez, 511 F.3d at 1155.
In Tarver, we explained that, “[l]ike the claimant in
Rodriguez, Mrs. Tarver is ‘unable to point to anything she
16 MOFFITT v. MCDONALD
would have done differently had she known the effect of
the 2000 amendment when she filed her claim.’” Tarver,
557 F.3d at 1375 (quoting Rodriguez, 511 F.3d at 1155).
Although the amendment at issue in Tarver “changed the
legal standards from those that were applicable when
Mrs. Tarver’s claim was filed,” the change “related only to
the scope of a survivor’s right to raise a collateral chal-
lenge to the agency’s initial assessment of the disability.”
Id. at 1376. We explained that “[c]oncerns about retroac-
tivity are at their nadir when the rule change in question
is directed only to the scope of collateral review of a prior
adjudication.” Id. (citations omitted). Ultimately we
concluded that, “even assuming that the second factor
provides some support for Mrs. Tarver, the countervailing
Princess Cruises factors weigh[ed] heavily against finding
that according the regulation retroactive effect would be
improper.” Id. (citation omitted).
Likewise, in Kernea, we found that there was “nothing
Ms. Kernea could have done differently had she known
the effect of the 2005 amendment when she filed her
claim.” 724 F.3d at 1381. There, the relevant conduct
“took place in the 1960s—decades before § 1311(a)(2) was
even enacted—when [Ms. Kernea’s] husband filed his
disability claims.” Id. We recognized that “Ms. Kernea’s
husband might have filed his disability claim ‘earlier or
prosecuted it more vigorously in the first instance,’ . . . if
he had known that hypothetical entitlement claims would
be disallowed.” Id. (quoting Tarver, 557 F.3d at 1375).
But because he filed his claims “decades before Congress
enacted § 1311(a)(2), before this court decided Hix, and
before the VA promulgated § 3.10(f)(3), his failure to
conform his conduct to the requirements of amended rule
[3.10(f)(3)] cannot be attributed to the change in the law
occasioned by that rule.” Id. (alteration in original)
(internal quotation and citation omitted).
Applying our reasoning in Kernea, the Veterans Court
noted that the relevant conduct here “took place either in
MOFFITT v. MCDONALD 17
1946 when Mr. Moffitt filed his initial claim for benefits
or 1979 when he filed his request for a total disability
rating based on individual unemployability.” Moffitt, 26
Vet. App. at 432. Both claims were filed well before
Congress enacted § 1311(a)(2), before this court’s decision
in Hix, and before the VA promulgated § 3.10(f)(3).
Accordingly, as was the case in Kernea, Mr. Moffitt’s
“failure to conform his conduct to the requirements” of
amended rules 20.1106 and 3.10(f)(3) “cannot be attribut-
ed to the change in the law occasioned by” those rules. Id.
(quoting Kernea, 724 F.3d at 1381).
We see no reason to disturb the Veterans Court’s
analysis. Even assuming, as in Tarver, that “the second
factor provides some support” for Mrs. Moffitt because the
amended regulations “changed the legal standards from
those that were applicable” when her claim was filed, 557
F.3d at 1376, the remaining Princess Cruises factors
weigh in favor of applying revised § 20.1106 and § 3.10
retroactively.
C. Fair Notice, Reasonable Reliance,
and Settled Expectations
Finally, the third Princess Cruises factor requires con-
sideration of “familiar considerations of fair notice, rea-
sonable reliance, and settled expectations.” 397 F.3d at
1366. Although this court has declined to determine how
much weight to give this factor, we have noted that the
Court of Appeals for the District of Columbia Circuit
appears to view it “as akin to a tiebreaker in close cases.”
Princess Cruises, 397 F.3d at 1366 (citing Marrie v. SEC,
374 F.3d 1196, 1207 (D.C. Cir. 2004)).
Before the Veterans Court, Mrs. Moffitt argued that,
because she filed her claim before the VA took any “public
steps” to “disallow hypothetical entitlement,” she did not
have notice that hypothetical entitlement was no longer
an available theory of recovery. Moffitt, 26 Vet. App. at
432. We agree with the Veterans Court that “it should
18 MOFFITT v. MCDONALD
have been apparent . . . when Mrs. Moffitt filed her claim
in 1999 [that] the hypothetical entitlement theory may no
longer be permitted for section 1311 claims.” Id.
As previously discussed in the context of the first
Princess Cruises factor, the Secretary has disfavored
hypothetical entitlement since at least the 1990 VA
General Counsel Opinion, and appealed the Veterans
Court’s decision in Hix. Id. Mrs. Moffitt’s claims were
specifically stayed pending resolution of that litigation.
In Tarver, we found that the VA had an “unwavering
opposition to hypothetical entitlement claims” such that
“any expectation that the statutory interpretation . . . was
not subject to change through administrative action
would have been objectively unreasonable.” Tarver, 557
F.3d at 1376. We agree with the Veterans Court that
Mrs. Moffitt’s claim was filed against this same back-
ground. We therefore conclude that the third factor
weighs in favor of retroactive application.
CONCLUSION
For the foregoing reasons, we find that, on balance,
the Princess Cruises factors weigh in favor of applying the
amendment to § 20.1106 and promulgation of § 3.10(f)(3)
retroactively to bar Mrs. Moffitt’s hypothetical entitle-
ment claim. Accordingly, the judgment of the Veterans
Court is affirmed.
AFFIRMED
COSTS
Each party shall bear its own costs.