James A. Pousson v. Eric K. Shinseki , 2009 U.S. Vet. App. LEXIS 449 ( 2009 )

UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS
No. 07-3315
JAMES A. POUSSON , APPELLANT ,
V.
ERIC K. SHINSEKI,
SECRETARY OF VETERANS AFFAIRS, APPELLEE.
Before KASOLD, DAVIS, and SCHOELEN, Judges.
(Argued December 16, 2008 Decided March 26, 2009)
ORDER
This matter comes before us because the Secretary failed to timely file the designation of
record (DOR) by January 18, 2008, as required by Rule 10 of the Court's Rules of Practice and
Procedure ("Court's Rules") (Secretary must file DOR no later than 60 days after Notice of Appeal
is filed, which in this case was filed on October 23, 2007). Over the ensuing months, and in lieu of
filing the DOR, the Secretary filed two motions seeking an extension of time because the Office of
General Counsel (OGC) had not yet received the DOR. These motions did not explain why the OGC
had not yet received the DOR or otherwise indicate that the underlying claims file might be missing.
The Clerk of the Court granted the first motion pursuant to the Court's Rules. U.S. VET .APP .
R. 45(g)(4). However, the second motion sought an extension of time that exceeded the Clerk's
authority under the Court's Rules. A single judge ordered the Secretary to file the DOR by May 5,
2008. U.S. VET . APP . R. 26(b) and 45(g)(4). On that date, the Secretary notified the Court and Mr.
Pousson that the claims file apparently was lost, and the Secretary filed a unilateral motion for
remand. Several exhibits were filed with the motion for remand. One exhibit indicates that the
claims file was noted to be at the Appeals Management Center (AMC), and another exhibit – an
unsworn, self-described affidavit – states that an otherwise unspecified "exhaustive search" had been
conducted at the AMC and that it had been determined that the claims file was lost and would need
to be reconstructed. Unilateral Motion for Remand, Exhibits 4 and 2, respectively.
Without Mr. Pousson's file, neither the DOR nor the record of appeal (ROA) could be
prepared and submitted for filing with the Court as required by the Court's Rules. U.S. VET .APP . R.
10 and 11 (rules in effect for appeals filed before March 31, 2008). The DOR forms the basis for
the ROA, which is essential to judicial review. See 38 U.S.C. § 7252(a), (b) (stating the Court's
exclusive jurisdiction to review Board decisions will be based "on the record of the proceedings
before the Secretary and the Board"). This appeal was submitted to a panel with oral argument to
address the consequences of the lost file, to include the need to reconstruct the file and the ability
or inability to completely reconstruct it and the effect on the processing of the claim, and to fashion
an appropriate remedy for the Secretary's failure to properly maintain the claims file.1 Additionally,
the matter was stayed so that Mr. Pousson, who was unrepresented could retain counsel. Amicus
curiae also were invited to address the issue of the appropriate remedy when the Secretary has lost
the claims file.2 Upon retaining representation, Mr. Pousson opposed the Secretary's motion for
remand.
With regard to the appropriate remedy for a lost claims file, the Secretary argues that
reconstruction of the file and remand for readjudication constitute the appropriate remedy, and that
sanctions are neither warranted nor permissible under the facts of this case. Mr. Pousson argues that
the matter should not be remanded, that a reconstructed record should be filed promptly, and that
sanctions should be imposed, to include (1) an adverse inference against the Secretary for spoilation
of the file as to any missing evidence required to resolve the appeal, (2) a monetary fine payable to
the Court, in addition to an award of attorney fees and costs, and (3) a monetary fine of $3,000
payable to Mr. Pousson for the delay in processing his appeal.
The Paralyzed Veterans of America (PVA) filed an amicus brief suggesting that the Court
remand this matter, but retain jurisdiction and award monthly interim benefits – subject to repayment
if Mr. Pousson did not prevail on the merits – until the Secretary filed the ROA. Similarly, the
National Organization of Veterans Advocates Inc. (NOVA) suggests as an appropriate remedy that
the matter be remanded and jurisdiction retained, but opines that interim benefits were not
appropriate because the issue was an earlier effective date rather than service connection. NOVA
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Judicial notice also is taken that the Secretary's loss of a claims file associated with an appeal before the Court,
although infrequent, is not an isolated event.
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Amici are commended for responding to the call for briefing on this matter. As always, they perform a
valuable service to the Court.
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also suggests that sanctions be imposed against the Secretary based upon the Court's statutory
authority as provided in 38 U.S.C. § 7265. Finally, amicus Anthony Hayes suggests the award of
nonrepayable interim benefits and the imposition of an adverse inference against the Secretary.
Almost 11 months after the DOR was due to be filed, over 7 months after the Secretary
informed the Court and Mr. Pousson that the claims file had been lost, and just 4 days before the date
set for oral argument, the Secretary informed the Court and Mr. Pousson that the claims file was
located at the AMC. The Secretary moved to withdraw his motion for remand. He also filed a
motion for leave to file the DOR, submitted the DOR for filing, and filed a motion to stay the
proceedings pending a decision in another panel case for which supplemental briefing had been
sought on an issue the Secretary believes might affect this matter. See Brokowski v. Peake, No. 07-
0349, 2008 U.S. Vet.App. LEXIS 1430 (Nov. 19, 2008). On February 4, 2009, the Secretary
submitted for filing what purports to be the ROA.
Mr. Pousson opposes the motion to withdraw the motion for remand on the grounds that it
is an attempt to avoid sanctions. He opposes the motion to file the DOR, and requests that the DOR
be stricken because he argues it does not contain documentary evidence mentioned in the Board
decision and because the Secretary's representations regarding his continued efforts to find the file
were misleading. At oral argument, Mr. Pousson acknowledged that objections to the DOR were
premature since he had not had an opportunity to review the claims file or prepare his counter-
designation of the record (CDR). See U.S. VET . APP . R. 10 (preparing the CDR occurs before
disputes as to content of the record).
MOTIONS TO STAY PROCEEDINGS, REMAND,
WITHDRAW REMAND, FILE DOR
In light of the significant delay in the processing of this appeal, the Secretary's motion for stay
will be denied. Because the claims file has been located and the DOR submitted for filing, the
motion for remand will be denied as moot, rendering moot the motion to withdraw the motion for
remand. Mr. Pousson's objection to the filing of the DOR being premature, the motion to file the
DOR will be granted, and the Clerk of the Court will be directed to file it. Moreover, because the
ROA is not to be filed until after the DOR has been submitted and all disputes as to the content of
the ROA have been resolved, see U.S. VET . APP. R. 10 and 11, the Clerk will be directed to return
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the purported ROA.
APPROPRIATE REMEDY
A. Authority
Like other Federal courts, this Court possesses the inherent as well as the statutory authority
to impose sanctions. See Roadway Express Inc., v. Piper, 447 U.S. 752, 764 (1980) ("The inherent
powers of federal courts are those which 'are necessary to the exercise of all others.' The most
prominent of these is the contempt sanction, 'which a judge must have and exercise in protecting the
due and orderly administration of justice and in maintaining the authority and dignity of the court.
. .'"quoting United States v. Hudson, 7 Cranch 32, 34 (1812) and Cooke v. United States, 267 U.S.
517, 539 (1925)); Jones v. Derwinski, 1 Vet.App. 596, 606 (1991); see also 18 U.S.C. § 401 and 38
U.S.C. § 7265.
Although the imposition of sanctions "must take care to determine that the conduct at issue
actually abused the judicial process," Jones v. Derwinski, 1 Vet.App. at 606, such action is not
limited, as the Secretary argues, to circumstances involving bad faith. Rather, pursuant to statute
alone, sanctions are permissible when there is 1) "misbehavior" before the Court "or so near thereto
as to obstruct the administration of justice," or 2) "misbehavior of any of its officers in their official
transactions" or 3) "disobedience or resistance to its lawful writ, process, order, rule, decree, or
command." 38 U.S.C. § 7265.3 Although bad faith and willfulness are elements of criminal
contempt, such intentions are not required for civil contempt. United States v. Saccoccia, 342 F.
Supp. 2d 25, 30 (D. R.I. 2004) ("Willfulness is an element of criminal contempt, but not civil
contempt . . . . [I]n the case of civil contempt, specific intent to violate the order is not required.")
(citations omitted)), rev'd on other grounds, 433 F.3d 19 (1st Cir. 2005). Similarly, while bad faith
may be a prerequisite to sanctions under a court's inherent authority, see Roadway Express, 447 U.S.
at 767, the language of section 401(a) allows for sanctions for civil contempt without a finding of
bad faith or willfulness, see Indep. Living Aids, Inc. v. Maxi-Aids, Inc., 349 F. Supp. 2d 509, 515
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The full text of 38 U.S.C. § 7265 (a) states: "The Court shall have the power to punish by fine or
imprisonment such contempt of its authority as – (1) misbehavior of any person in its presence or so near thereto as to
obstruct the administration of justice; (2) misbehavior of any of its officers in their official transactions; (3) disobedience
or resistance to its lawful writ, process, order, rule, decree, or command." See also 18 U.S.C. § 401 (identical authority
for all courts of the United States).
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(E.D. N.Y. 2004) ("Under 18 U.S.C. § 401(3), the [C]ourt is empowered to enforce compliance with
its orders through civil contempt."); FEDERAL JUDICIAL CENTER , BENCHBOOK FOR U.S. DISTRICT
COURT JUDGES, § 702 (5th ed. 2007) (stating that 18 U.S.C. § 401(3) "does have some application
to civil contempt"). Inasmuch as our sanctions statute, 38 U.S.C. § 7265(a)(3), mirrors the federal
courts' general sanctions statute, 18 U.S.C. § 401(3), we are guided by our sister Federal court's
interpretations of their sanctions statute. Cf. CBOCS West, Inc. v. Humphries, 128 S. Ct. 1951, 1956
(2008) (construing sister statutes with common language, origin, and purpose the same).
At a minimum "[t]here are three essential elements [that] must be established before a party
can be held in civil contempt: 1) there must be an order that is 'clear and unambiguous,'; 2) the proof
of non-compliance with that order must be "clear and convincing,"; and 3) it must be shown that the
contemnor has not "been reasonably diligent and energetic in attempting to accomplish what was
ordered." Bowens v. Atl. Maint. Corp., 546 F. Supp. 2d 55, 63 (E.D. N.Y. 2008) (quoting Powell
v. Ward, 643 F.3d 924, 931 (2nd Cir. 1981) (citations omitted); see also TMT N. Am., Inc. v. The
Magic Touch GmbH, 57 F. Supp. 2d 586, 589 (N.D. Ill. 1999). As discussed below with regard to
attorney fees and costs (Section B.1), the Secretary's actions in this case constitute gross negligence
and a gross lack of diligence in fulfilling the requirements of the Court's Rules – and a wholly
unprofessional and unacceptable "effort" to timely file the DOR – that have caused an extensive
and unwarranted delay in the processing of Mr. Pousson's appeal, as well as extensive briefing by
numerous parties and an unnecessary expenditure of judicial resources. Such actions exceed, by
clear and convincing evidence, the minimum requirements for sanctions, and we need not further
examine the full scope of our inherent or statutory authority.
B. Sanctions
1. Attorneys Fees and Costs
The two motions requesting extensions of time to prepare the DOR, submitted while the
underlying claims file was "not known to be" missing, reflect, at best, a gross lack of diligence in
attempting to comply with Rule 10, which required the Secretary to file the DOR, in this instance,
no later than January 18, 2008. In his first motion for an extension of time the Secretary asserted that
the DOR had not been filed simply because the Office of General Counsel had not yet obtained the
claims file. Secretary's Motion for a Forty Five (45) Day Extension of Time Until March 3, 2008
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to File the Designation of Record at 1. The Secretary subsequently filed a second motion for an
extension, and stated again as the basis for the request that his counsel had not obtained the file.
Secretary's Motion for an Extension of Time until May 15, 2008, to File the Designation of Record
at 1. Only after the Court directed the Secretary to file the DOR by certain date did the Secretary
inform Mr. Pousson and the Court that the claims file was lost and that the DOR could not be
submitted without reconstruction of the claims file.
The cavalier attitude toward preparing the DOR and adhering to the Court's Rules with
regard to timely filing is reflected in the attachments to the unilateral motion for remand. As already
noted, this motion included an unsigned, self-designated affidavit from an AMC supervisor stating
that an "exhaustive search" had been conducted and that the claims file was lost. Unilateral Motion
for Remand, Exhibit 2. However, the Secretary did nothing to examine the nature of the "exhaustive
search" at AMC, despite the fact that the VA's internal tracking system showed the file to be at AMC
since October 2007, with "internal charges" of the file in December 2007 and March 2008.
Unilateral Motion for Remand, Exhibit 4. Moreover, counsel for the Secretary could not describe
at oral argument the nature of the "extensive search" that had been conducted, evidencing the fact
that he never seriously inquired about the reported "exhaustive search.". The bald assertion that an
"extensive search" had been conducted within the division of AMC where the claims file was last
reported to have been located does not constitute a "reasonably diligent and energetic" effort on
behalf of the Secretary and his counsel to comply with the Court's Rules and to fulfil the Secretary's
duty thereunder.
Counsel for the Secretary also could provide no specifics with regard to any effort that the
Secretary undertook since he filed his May 2008 motion for unilateral remand, and it is quite clear
that the Secretary did not diligently search for the claims file until shortly before the date for oral
argument, December 16, 2008. Although the Secretary and his staff are commended for finally
exercising the diligence and energetic effort called for, there is no excuse for not doing so earlier.
Cf. Friedsam v. Nicholson, 20 Vet.App. 97, 97 (2006) ("The [C]ourt must consider a large number
of appeals each year. It can only conduct its work fairly and efficiently if counsel cooperate by
abiding by the pertinent rules.")(citing In re Violation of Rule 28(c), 388 F.3d 1383, 1385 (Fed. Cir.
2004)).
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The lack of proper diligence and respect for compliance with the Court's timely filing
requirements is the direct and unnecessary cause for almost a year's delay in the processing of Mr.
Pousson's appeal, as well as many hours spent by his counsel, amici, and the Court to address this
matter. As a sanction designed to encourage continued diligent compliance with the Court's Rules
in this case and future cases, and to provide a remedy for the unnecessary effort expended to address
the Secretary's lack of diligence, the Secretary will be directed to pay the reasonable attorney fees
and costs associated with the adjudication of this matter, as approved by the Court. See NLRB v.
Blevins Popcorn Co., 659 F.2d 1173, 1184 (D.C. Cir. 1981) (noting that a civil contempt action "is
a remedial sanction used to obtain compliance with a court order or to compensate for damage
sustained as the result of noncompliance."). The monetary limits provided under the Equal Access
to Justice Act (EAJA), 28 U.S.C. § 2412(d), will be applied, absent any significantly cogent reason
presented by the parties to do otherwise. See Jones v. Derwinski, 1 Vet.App. 596, 608 (1991); see
also Pub. L. No. 102-572, § 506 (1992) (amending EAJA to clarify that it applies to the Court).
2. Monetary Fine and Adverse Inference
Although the Secretary's lack of reasonable diligence and energetic effort to comply with the
Court's Rules has interfered seriously with the proper and timely processing of Mr. Pousson's appeal,
the Secretary ultimately demonstrated the degree of diligence and effort required of parties and
counsel. The DOR has been compiled and submitted for filing, which permits the appeal to proceed.
Under the circumstances, a monetary fine, payable to either to the Court or Mr. Pousson, is not
deemed appropriate or necessary to secure the Secretary's diligent compliance with the Court's Rules
in the future. See Blevins Popcorn Co., supra.
Inasmuch as the Secretary has located the claims file and submitted the DOR for filing, and
because Mr. Pousson's argument that the DOR is inadequate or that records within the claims file
have been lost is premature, his request for the specific sanction of an adverse inference for
spoilation of the record is not ripe and will be denied. See Mokal v. Derwinski, 1 Vet.App. 12, 15
(1990) (adopting Article III courts case or controversy jurisdictional restraints).
3. Interim Benefits
Amici have presented briefs both in support of and against interim benefits, however, Mr.
Pousson has not requested such benefits, and we do not believe they are necessary to ensure further
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compliance with the Court's Rules or to provide a full remedy to Mr. Pousson. Accordingly, we will
not further consider or discuss our possible authority to impose such a sanction.
CONCLUSION
Upon consideration of the foregoing, it is
ORDERED that the motion for remand is DENIED as moot, rendering moot the motion to
withdraw the motion for remand, which therefore is also DENIED as moot; it is further
ORDERED that the motion to stay the proceedings is DENIED; it is further
ORDERED that the motion to strike the DOR is not ripe and is DENIED; it is further
ORDERED that the motion to file the DOR is GRANTED; it is further
ORDERED that the purported ROA submitted by the Secretary for filing be returned because
it has been filed prematurely; it is further
ORDERED that the time provided by Rule 10(b) for submission of the CDR shall begin on
the date of this order, and all other rule-related requirements shall thereafter follow in accordance
with the Court's Rules; it is further
ORDERED that sanctions in the form of an adverse inference, monetary fine, or any other
sanction other than reasonable attorney fees and costs are DENIED; it is further
ORDERED that the Secretary pay the reasonable attorney fees and costs associated with the
adjudication of this matter as submitted to the Court, and served on the Secretary, by Mr. Pousson
and amici, and as approved by the Court; it is further
ORDERED that no later than 30 days from the date of this order Mr. Pousson and amici may
each submit to the Court and serve on the Secretary an application for attorney fees and costs
associated with the adjudication of the matter; and it is further
ORDERED that no later than 30 days from the date of service of an application for attorneys
fees and costs, the Secretary may file with the Court and serve on the submitting applicants a
response to the application.
DATED: March 26, 2009 PER CURIAM.
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