James C. Groves v. Eric K. Shinseki , 2009 U.S. Vet. App. LEXIS 1163 ( 2009 )

UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS
NO . 08-11697; 04-2375(E)
JAMES C. GROVES, APPELLANT ,
V.
ERIC K. SHINSEKI,
SECRETARY OF VETERANS AFFAIRS, APPELLEE.
On Appellant's Application for Attorney Fees and Expenses
(Decided July 2, 2009)
Virginia A. Girard-Brady, of Lawrence, Kansas, was on the brief for the appellant.
Paul J. Hutter, General Counsel; R. Randall Campbell, Assistant General Counsel; David
L. Quinn, Deputy Assistant General Counsel; and Tracy K. Alsup, all of Washington, D.C., were
on the brief for the appellee.
Before MOORMAN, LANCE, and SCHOELEN, Judges.
SCHOELEN, Judge: Before the Court is the application of the appellant, James C.
Groves, for an award of legal fees and expenses under the Equal Access to Justice Act (EAJA),
28 U.S.C. § 2412(d), in the amount of $7,800.50, for the work of his lawyer, Virginia A. Girard-
Brady, Esq., as well as one of Ms. Girard-Brady's associates. See Appellant's Application for an
Award of Reasonable Attorney Fees and Expenses (EAJA App.) at 1-13. The Secretary filed an
opposition to that application. See Secretary's Response to Appellant's Application for Attorney
Fees and Expenses (Resp.) at 1-11. The Court grants the EAJA application.
I. BACKGROUND
A. The Underlying Case
In March 1982, the VA regional office (RO) issued a decision that denied the appellant's
claim for service connection for schizophrenia because there was no evidence of such a condition
in the appellant's service medical records. Groves v. Nicholson, No. 04-2375, 2007 U.S. App.
Vet. Claims LEXIS 898, *1-2 (May 18, 2007) (Groves I), rev'd sub nom. Groves v. Peake, 524
F.3d 1306 (Fed. Cir. 2008) (Groves II). The appellant later argued that the 1982 RO decision was
premised on clear and unmistakable error (CUE). Id. at *3. On May 18, 2007, this Court
affirmed the Board's decision. Id. at *8-10. The appellant appealed this Court's decision to the
U.S. Court of Appeals for the Federal Circuit (Federal Circuit). See Groves II, 524 F.3d at 1307.
The Federal Circuit concluded that the 1982 RO decision contained CUE and reversed this
Court's decision. Id. at 1309.
B. The EAJA Application and the Arguments of the Parties
The appellant filed his timely EAJA application, in which he (1) asserts that he is a
prevailing party; (2) states that he is eligible for an award because his net worth is less than
$2,000,000; and (3) includes an itemized list of fees and expenses sought. EAJA App. at 2. The
application therefore satisfies, and the Secretary does not contest, the first three EAJA pleading
requirements, see 28 U.S.C. § 2412(d)(1)(B). See Resp. at 1-11. The appellant also asserts:
The specific position of the Department of Veterans Affairs, that the Secretary had
fulfilled its duty to assist [the appellant] in developing his claim and that the
record was thus sufficient for purposes of adjudicating the merits of the veteran's
claim for benefits, was not substantially justified.
EAJA App. at 2; see 28 U.S.C. § 2412(d)(1)(B).
On October 31, 2008, the Secretary filed his opposition to the application, in which he
correctly notes that the underlying case did not involve the duty to assist. Resp. at 4. Rather, the
appellant had asserted that the 1982 RO decision contained CUE. See Groves I, 2007 U.S. App.
Vet. Claims LEXIS 898 at *1. The Secretary argues that the appellant's assertion "is predicated
upon a faulty premise and should be rejected as such." Resp. at 4. In the alternative, the
Secretary argues that he was substantially justified in opposing the appellant's CUE motion, both
at the administrative level and at this Court. Id.2
II. ANALYSIS
A. The Specificity Demanded by the "Not Substantially Justified" Requirement
The questions before the Court – the degree of specificity demanded by the "not
substantially justified" pleading requirement, and whether a failure to correctly identify the
position of the Secretary that was not substantially justified – are questions of statutory
interpretation. As such, we begin with the words of the statute, which we interpret "'in their
context and with a view to their place in the overall statutory scheme.'" Tyler v. Cain, 533 U.S.
656, 662 (2001) (quoting Davis v. Mich. Dep't of Treasury, 489 U.S. 803, 809 (1989)); see
McEntee v. Merit Sys. Prot. Bd., 404 F.3d 1320, 1328 (Fed. Cir. 2005) ("Statutory interpretation
begins with the language of the statute, the plain meaning of which we derive from its text and its
structure.").
The relevant portion of the EAJA statute simply states: "The party [seeking fees] shall
also allege that the position of the United States was not substantially justified." 28 U.S.C.
§ 2412(d)(1)(B). The statute imposes no specificity requirement beyond that. The requirement
that parties merely allege that the Secretary's position was not substantially justified stands in
contrast to the sentence immediately preceding it: Fee applicants must "show[] that the party is a
prevailing party and is eligible to receive an award." Id. (emphasis added); see Russello v.
United States, 464 U.S. 16, 23 (1983) ("'[Where] Congress includes particular language in one
section of a statute but omits it in another section of the same Act, it is generally presumed that
Congress acts intentionally and purposely in the disparate inclusion or exclusion.'" (quoting
United States v. Wong Kim Bo, 472 F.2d 720, 722 (5th Cir. 1972))).
Moreover, the EAJA's legislative history signifies that Congress did not intend to make
the "not substantially justified" pleading requirement a specific one. By requiring that appellants
plead that the Government's position was not substantially justified, Congress sought "to ward off
irresponsible litigation, i.e., unreasonable or capricious fee-shifting demands." Scarborough v.
Principi, 541 U.S. 401, 415 (2004). In other words, by highlighting a lawyer's duty not to engage
in frivolous litigation, the "not substantially justified" allegation would make a lawyer "think
twice" before seeking fees. Id. But once a lawyer has engaged in the requisite contemplation and
determined that it is ethical to seek fees, the burden falls to the Government to demonstrate that
its position was substantially justified. See id. at 414-15. This Court has also consistently held
3
that "[o]nce an appellant has alleged" – not proved – "a lack of substantial justification, the
burden shifts to the Secretary to prove that VA was substantially justified in its administrative
and litigation positions." Cullens v. Gober, 14 Vet.App. 234, 237 (2001) (en banc) (emphasis
added).1
In short, fee applicants in this Court need only allege that the Secretary's position was not
substantially justified. They need not prove that it was not. If they do provide argument in favor
of their allegation, even if that argument is erroneous, the burden still falls upon the Secretary to
show substantial justification. It may be a different case if the Secretary were misled or
detrimentally relied on the appellant's erroneous argument.
Here, the appellant did assert that the Secretary's position was not substantially justified.
EAJA App. at 2. Although the reason he gave for why the Secretary's position was unjustified
was not the correct one, he has met the EAJA's requirement, and the burden now falls to the
Secretary. The Secretary was not confused by the error and was able to articulate his position.
Even though we have rejected the Secretary's argument, it is somewhat compelling
because when a lawyer seeks to draw private fees from the public fisc, she should at least ensure
that the fee application is accurate. However, as the Court has explained, "EAJA awards belong
to the claimant, not his or her attorney," Carpenter v. Principi, 15 Vet.App. 64, 75 (2001) (en
banc). Thus, the lackluster performance of the appellant's counsel should not be held against the
appellant. See Molden v. Peake, 22 Vet.App. 177, 181 (2008) (refusing to dismiss EAJA
application for failure to comply with the Court's rules). It would have been better practice for
the appellant's attorney to have amended the appellant's EAJA application when the Secretary
pointed out her obvious drafting error. However, the Court sees nothing to be gained by now
forcing the attorney to amend the application to directly raise an issue to which the Secretary has
already fully responded.
1
The Court's original version of its rule regarding EAJA fees required EAJA applications to include
"identification of the specific position or positions of the Secretary that the applicant alleges were not substantially
justified." U.S. V ET . A PP . R. 39(b)(2) (1993). This provision was rescinded by this Court's decision in Bazalo v. Brown,
9 Vet.App. 304, 311 (1996) (en banc), rev'd on other grounds sub nom. Bazalo v. West, 150 F.3d 1380 (Fed. Cir. 1998).
This Court has never amended its rule to include the content requirements of the original Rule 39(b).
4
B. Whether the Secretary's Position Was Substantially Justified
Having concluded that the appellant has met the pleading requirements imposed by the
EAJA, we turn now to determining whether the Secretary's position was substantially justified.
The Secretary asserts that it was. He first notes that the October 2004 Board decision found no
CUE in the 1982 RO decision because the evidence then before the RO did not mandate a
finding that the appellant's postservice diagnosis of schizophrenia was connected to his in-service
mental disorders. Resp. at 6. He notes also that appellants in a CUE matter bear a high burden
of proof. Resp. at 6-7 (citing Russell v. Principi, 3 Vet.App. 310, 313-14 (1992) (en banc);
Bustos v. West, 179 F.3d 1378 (Fed. Cir. 1999)). The Secretary finally notes that this Court
agreed with his position, and asserts that this combination of factors militates against a finding
that his position was not substantially justified. Resp. at 7-8.
The Secretary's position is substantially justified "'if a reasonable person could think it
correct, that is, if it has a reasonable basis in law and fact'" even if that position is found to be
incorrect. Stillwell, 6 Vet.App. at 302 (quoting Pierce v. Underwood, 487 U.S. 552, 566 n.2
(1988)). The determination of whether a position is substantially justified is based not on any
single factor, but on the totality of the circumstances, which includes consideration of, "among
other things, 'merits, conduct, reasons given, and consistency with judicial precedent and VA
policy with respect to such position, and action or failure to act, as reflected in the record on
appeal and the filings of the parties'" before the Court. White v. Nicholson, 412 F.3d 1314, 1317
(Fed. Cir. 2005) (quoting Johnson v. Principi, 17 Vet.App. 436, 442 (2004)). This is a close
question. On balance, however, the totality of the circumstances leads to a conclusion that the
Secretary's position was not substantially justified. It is true that this Court agreed with his
position, which lends credence to the Secretary's assertion that a reasonable person could find it
correct. However, this Court did not directly address the appellant's regulatory argument. The
mere fact that "one other court agreed or disagreed with the [Secretary] does not establish
whether [his] position was substantially justified." Pierce, 487 U.S. at 568. The plain language
of 38 U.S.C. § 3.309(a) and § 4.130 indicates that schizophrenia is a chronic disease and service
connection should have been awarded pursuant to § 3.303(b). See Groves II, 524 F.3d at 1309.
Given the plain language of the Secretary's regulations, the Secretary failed to apply the existing
law and we cannot conclude that the Secretary was substantially justified in his position. Cf.
5
Hart v. Shinseki, 23 Vet.App. 9, 11 (2009) ("Arguments presented in a case of first impression
are more likely to be considered substantially justified than those where the Court determines that
the Secretary ignored existing law.").
The Secretary does not argue that the fees and expenses sought by the appellant are
unreasonable. And, upon review, the Court does not find them unreasonable on their face. We
will therefore grant the EAJA application in full.
III. CONCLUSION
On consideration of the foregoing, it is ORDERED that the appellant's EAJA application
is GRANTED in the amount of $7,800.50.
6