Douglas J. Rosinski v. Robert L. Wilkie ( 2020 )

UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS
No. 17-3293
DOUGLAS J. ROSINSKI, APPELLANT,
V.
ROBERT L. WILKIE,
SECRETARY OF VETERANS AFFAIRS, APPELLEE.
On Appeal from the Board of Veterans' Appeals
(Argued January 17, 2019 Decided January 30, 2020)
Douglas J. Rosinski, pro se.
Nathan Paul Kirschner, with whom James M. Byrne, General Counsel; Mary Ann Flynn,
Chief Counsel; and Carolyn F. Washington, Deputy Chief Counsel, all of Washington, D.C., were
on the brief for the appellee.
Before BARTLEY, Chief Judge, and MEREDITH and TOTH, Judges.
TOTH, Judge, filed the opinion of the Court. MEREDITH, Judge, filed a dissenting
opinion.
TOTH, Judge: This appeal requires the Court to revisit a question that it has examined in
various contexts: whether VA is obligated to pay fees to an attorney (or non-attorney agent) who
obtains an award of past-due benefits on behalf of a VA claimant who is otherwise limited under
a separate law from receiving such benefits. The constant throughout these cases, discussed at
length later, is 38 U.S.C. § 5904. It instructs VA, in cases where a fee agreement specifies direct
payment by the Secretary to an attorney for representation before VA, to pay the attorney up to
"20 percent of the total amount of any past-due benefits awarded on the basis of the claim." §
5904(d)(1). The variable here is 38 U.S.C. § 5304, which, operating in tandem with 10 U.S.C. §
1414, prohibits veterans who receive military retirement pay from also receiving disability
compensation from VA unless the veteran either obtains a disability rating of 50 percent or greater
or has waived military retirement pay.
The discrete question is whether section 5904 requires VA to pay fees to an attorney who
obtains a disability rating of less than 50 percent for a veteran receiving military retirement pay—
or, whether section 5304 forecloses such payments to attorneys. In Snyder v. Nicholson, 489 F.3d
1213 (Fed. Cir. 2007), the Federal Circuit held that 38 U.S.C. § 5313, a statutory limitation on
payments to incarcerated veterans, did not alter VA's obligation to pay attorneys fees under section
5904(d)(1) because section 5313 did not purport to change the monthly compensation awarded on
the basis of the veteran's claim but merely served as a withholding device for full payment of
benefits otherwise lawfully established. Because Snyder's reasoning—as explained in subsequent
cases—applies equally to section 5304, the Court reverses the Board's ruling and directs the
Secretary to pay Mr. Rosinski the fees to which he is entitled under section 5904(d)(1).
I. BACKGROUND
The record presents a meandering procedural history involving several rulings from VA on
both the veteran's disability claim as well as appellant Douglas Rosinski's derivative claim for
payment of the 20 percent portion of past due benefits. (For simplicity, we'll refer to this payment
as "attorneys fees" with the caution that our use of the term does not also refer to fees made to an
attorney under separate provisions of law such as the Equal Access to Justice Act.) Although the
focus ultimately centers on the attorneys fees, it's the sequence of rulings on the veteran's disability
claim that serves as a catalyst for the derivative attorneys fees claim. We thus summarize these to
the extent necessary to understand the respective rulings on Mr. Rosinksi's claim for attorneys fees.
Christopher Grall, a Coast Guard veteran, was receiving military retirement pay when he
filed a claim for VA disability benefits for migraine headaches. He entered into a standard
contingency fee agreement with attorney Douglas Rosinski to represent him before VA, whereby
Mr. Rosinski would be paid directly by the Secretary 20 percent of any past-due benefits awarded
on the basis of Mr. Grall's claim. Past-due benefits are generated when an initial (or increased)
rating is awarded with a retroactive effective date and normally result in a lump sum payment to
the veteran. When the veteran faces an impediment to payment following the award of a rating,
past-due benefits comprise the total amount of benefits that are "unpaid" to the claimant due to the
impediment. Gumpenberger v. Wilkie, 31 Vet. App. 33, 37 (2019).
On December 13, 2013, the VA regional office (RO) granted a 30 percent evaluation for
Mr. Grall's service-connected migraine headaches, effective May 10, 2011. This rating brought
Mr. Grall's combined disability rating to 40 percent. However, because Mr. Grall had been in
receipt of military retirement pay during the relevant period, VA informed him that the agency
was withholding past-due benefits because he had not yet waived his military retirement pay and
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did not obtain a rating of 50 percent or greater. For these reasons, VA ruled that it was prohibited
under section 5304 from paying him the past-due benefits.
In connection with that ruling, VA issued a separate decision denying Mr. Rosinski
attorneys fees because the increased evaluation did not result in any retroactive payment to the
veteran. Mr. Rosinski filed a Notice of Disagreement (NOD) challenging the attorneys fees
decision. VA issued a Statement of the Case (SOC) in January 2015, and Mr. Rosinski appealed
the decision to the Board in February 2015.
While Mr. Rosinski's appeal of the denial of attorneys fees was pending, VA on June 2,
2015, increased Mr. Grall's disability rating for migraine headaches to 50 percent, effective May
10, 2011. This ruling brought Mr. Grall's combined rating to 60 percent; and because he cleared
the 50 percent threshold spelled out by sections 5304 and 1414, VA awarded the veteran past-due
benefits. In addition to awarding benefits to Mr. Grall, the RO also found that Mr. Rosinski was
entitled to attorneys fees in the amount of $3,549. This amount reflected the fee for Mr. Rosinski's
efforts in increasing Mr. Grall's evaluation from 30% to 50% for the period of May 10, 2011, until
June 2, 2015.
The payment of attorneys fees didn't settle the matter; it merely shifted the terms of the
dispute, as Mr. Rosinski now challenged the methodology under which VA tabulated the
respective awards. Those tabulations run roughly as follows: Once Mr. Grall was awarded a 60
percent disability rating with an effective date of May 10, 2011, he became eligible for a total
amount of back pay of $32,499. VA ruled, however, that because Mr. Grall had received military
retirement pay in the amount of $14,745 during that time, those benefits were not owed to the
veteran because they had already been paid out. R at 372, 387. Instead, VA paid Mr. Grall $17,754,
which represented the difference in these amounts—$32,499 less $14,745 that Mr. Grall had
received in military retirement pay. Likewise, VA calculated Mr. Rosinski's attorneys fees at 20
percent of the reduced amount paid to Mr. Grall after discounting the retirement pay. After the
dust settled, Mr. Rosinski claimed that he should have been paid 20 percent of $32,499 (the total
award), rather than 20 percent of $17,754 (the reduced amount).
In January 2016, the Board denied Mr. Rosinski's appeal of the original RO decision. It
found the matter to be moot because Mr. Rosinski was paid $3,549 in attorneys fees and so there
was no longer a case or controversy.
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Mr. Rosinski appealed to this Court, which vacated the Board's decision because the Board
provided an inadequate statement of reasons or bases for finding that the June 2015 RO decision
rendered moot the appeal of the January 2015 decision.
On September 18, 2017, the Board affirmed the payment of $3,549 in attorneys fees. It
ruled that VA paid all past-due benefits owed to Mr. Grall when it paid him $17,745 and that no
other retroactive benefits were due to the veteran. For this reason, there was no basis for eligibility
for payment of additional attorneys fees related to the claim. The Board based this ruling on the
grounds that section 5904 did not "authorize VA to pay attorneys fees 'as if' a veterans claim
resulted in an award of retroactive VA benefits payments where a veteran does not, in fact, receive
a retroactive payment of VA benefits." R. at 13. The Board also distinguished this situation from
that of Snyder, as that case involved a withholding of benefits from an incarcerated veteran who
was otherwise entitled to such benefits; by contrast, this situation differed because Mr. Grall was
not entitled to a cash payment of benefits under section 5304. Additionally, the Board ruled that
VA was prevented from paying attorneys fees under its own regulation, 38 C.F.R. § 14.636(h)(1),
which establishes that no cash payment will be made to veterans unless there is a corresponding
waiver in retirement pay. The Board thus denied Mr. Rosinski's appeal.
II. ANALYSIS
This case marks the fourth in a line of attorneys fees decisions examining VA's obligations
to pay attorneys fees under section 5904. The first and most significant of these cases is Snyder, in
which the Federal Circuit defined various terms within section 5904 and examined whether VA's
obligation to pay attorneys fees was countermanded by a separate statute, section 5313, which
limited the monthly compensation payments that an incarcerated veteran could receive on a
successful claim. 489 F.3d 1213. The next two decisions, Jackson v. McDonald, 635 F.App'x 858
(Fed. Cir. 2015), and Gumpenberger v. Wilkie, 31 Vet. App. 33 (2019), refined Snyder's
interpretation of section 5904 and applied it to other scenarios.
Framed in the most general terms, the question on appeal is whether Snyder's reasoning
applies equally to section 5304 and obligates VA to pay attorneys fees even where the veteran
receives a rating below fifty percent and hasn't waived retirement pay. Insofar as this question
involves interpretation of section 5904, our task is made easier by the fact that Snyder already set
out what various terms mean, with Jackson and Gumpenberger providing an assist. The more
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difficult part of our analysis arises when we analyze section 5304 to see if it presents a similar type
of limitation of payment as section 5313, which Snyder regarded as a withholding device that did
not alter VA's obligations under section 5904. We thus first analyze section 5904 as interpreted
and applied by the triumvirate of Snyder, Jackson, and Gumpenberger before turning to the two
relevant statutes at issue: sections 5304 and 1414.
A. 38 U.S.C. § 5904(c) and (d)
Congress passed section 5904 to establish a framework for attorneys to represent benefits
claimants on a contingent basis in proceedings before VA. To that end, it limits when an attorney
can begin charging a client for representation, caps the fee the Secretary must pay at 20 percent of
the amount of past-due benefits awarded, and states the allowable bases for such fees. § 5904(c),
(d)(1)-(3). It also permits a fee agreement to specify that the fee "is to be paid to the agent or
attorney by the Secretary directly from any past-due benefits awarded on the basis of the claim."
§ 5904(d)(2)(A)(i). When there is such an agreement, "[t]o the extent that past-due benefits are
awarded in any proceeding . . . the Secretary may direct that payment of any fee to an agent or
attorney . . . be made out of such past-due benefits." § 5904(d)(3).
Additionally, VA has promulgated regulations interpreting its obligations under section
5904. Specifically, 38 C.F.R. § 14.636(h) lists a series of conditions that must be met before VA
will "honor" a fee agreement. One of those conditions is relevant here and provides that the award
of past-due benefits must result in a "cash payment to a claimant or an appellant from which the
fee may be deducted." § 14.636(h)(iii).
1. Snyder
In Snyder, the Federal Circuit examined the language of section 5904 directing VA to pay
attorneys fees "from any past-due benefits awarded on the basis of the claim." § 5904(d)(2)(A)(i).
There, the court addressed whether section 5904 mandated payment to an attorney who
successfully obtained a 70 percent rating for PTSD for an incarcerated veteran that was effective
retroactive seven years. 489 F.3d 1213. The complication in that case was that a separate statute,
38 U.S.C. § 5313(a)(1), caps the rate of disability compensation payable to an incarcerated veteran
at 10 percent of the amount the veteran would otherwise be entitled to, with the remainder withheld
under the terms of the statute. The attorney sought a fee of 20 percent of the past-due benefits
irrespective of the withholding, whereas VA paid the attorney 20 percent of the reduced award—
that is, 20 percent of the 10 percent actually received by the veteran—once section 5313(a)(1)'s
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withholding was applied. On appeal, this Court affirmed the Board's ruling that the attorney was
only entitled to 20 percent of the amount payable to the veteran after the withholding had been
applied.
The Federal Circuit reversed, holding that the language of section 5904(d)(1) was
unambiguous as to the meaning of "the total amount of any past-due benefits awarded on the basis
of the claim." Snyder, 489 F.3d at 1217. Significantly, the Federal Circuit singled out various terms
within the phrase and noted that they provided a "clear answer" to how they applied in the context
of disability compensation. Id. at 1218. First, the court identified that a "claimant's service-
connected disability forms the 'basis' of his or her claim for compensation." Id. (citing 38 U.S.C.
§ 1110). Next, the Court explained that VA makes an award on the basis of the claim when it
assigns a disability rating to the claimant by determining average impairments of earning capacity
in civil occupations resulting from the claimant's injuries. Id. (citing 38 U.S.C. § 1155). Following
this line, it deemed a "past-due benefit" to be any "compensation not paid to the claimant in a given
month." Id. Finally, Snyder held that the "'total amount of any past-due benefits awarded on the
basis of the claim' is the sum of each month's unpaid compensation—as determined by the
claimant's disability rating—beginning on the effective date and continuing through the date of the
award." Id.
Snyder then turned to section 5313 and noted that the limitation on payments to
incarcerated veterans did not purport to change the monthly compensation awarded on the basis of
the claim, but merely directed that a certain amount of such compensation be withheld. Id. (citing
38 U.S.C. § 5313(a)(1)). The Court likened the difference between awarded compensation and
payable compensation to that of gross and net salary and noted that the statutes offered no reason
why the definition of past-due benefits should "change from time to time even with regard to the
same veteran." Id.
Weaving all this together, Snyder ruled that this Court erred when it "focused on the term
'past-due benefits' without sufficient emphasis on the world 'awarded' as it appears in section
5904." Id. at 1219. The court reasoned that, because section 5313 does not restate the award of
past-due benefits, it functions as a withholding device ensuring that veterans who are incarcerated
for a felony conviction do not receive greater cash payments than would be attributed to disability
ratings greater than 10 percent. Based on this reasoning, the Federal Circuit remanded with
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instructions for VA to calculate attorneys fees based on the initial award of the 70 percent disability
rating the veteran received prior to the withholding.
2. Jackson
The Federal Circuit next had occasion to analyze section 5904 in Jackson. Although
unpublished, Jackson provides useful insights into how Snyder's reasoning bears on other
situations. In that case, an attorney successfully represented a veteran before VA on a claim for
service connection related to orthopedic disabilities; however, the veteran died before he received
payment and no substitute had been appointed at the time the attorney sought to recover his 20
percent contingency fee from VA under section 5904.
VA denied attorneys fees on the grounds that past-due benefits could only be paid as
accrued benefits where the beneficiary to such "has signed a fee agreement" with the attorney
seeking the fee payment. Jackson, 635 F.App'x at 860. On appeal, this Court upheld the denial of
attorneys fees, concluding that VA never awarded the deceased veteran any past-due benefits on
the basis of his claim within the meaning of section 5904. It also ruled that any subsequent grant
of accrued benefits to the veteran's surviving spouse did not implicitly constitute an award to the
veteran on the basis of his original claim for benefits under section 5904.
The Federal Circuit began its discussion by noting that Snyder determined that an award is
not determined by the amount payable (or actually paid) to the veteran but results from the granting
of service connection coupled with the assignment of a disability rating and effective date. Id. at
861. The award of past-due benefits thus occurs when VA completes the "non-mechanical
judgments" of assigning a disability rating and an effective date and that nothing in the language
of section 5904 requires that the decision awarding benefits be communicated to the veteran or
that money actually be paid out. Id. at 861–62.
The court then turned to VA's main argument, namely that the agency's own regulations
prohibit payment under section 5904 unless the award of past-due benefits on a veteran's claim
results in a cash payment to the veteran. Id. at 864. Significantly, this is the same grounds the
Board cited in denying Mr. Rosinski's claim for attorneys fees in this case. The regulation that
existed at the time, 38 C.F.R. § 20.609(h)(3)(i) (2007), is functionally identical to the amended
regulation that VA relies on in this case, 38 C.F.R. § 14.636(h)(3)(i). Then, as now, VA regulations
established that the "award of past-due benefits results in a cash payment to a claimant or an
appellant from which the fee may be deducted." Id. at 863. The Federal Circuit, however, rejected
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VA's arguments because it rested on a view of section 5904 that Snyder dismissed as an improper
construction of that statute. "The statute does not require payment to the veteran for the fee-
supporting benefit award to exist. The statute thus supplies no reason to give the current regulation
a reading contrary to the straightforward meaning of its terms." Id. at 864. For these reasons, the
Federal Circuit reversed this Court's decision affirming VA's ruling that the attorney was not
entitled to fees for his representation of the since-deceased veteran.
3. Gumpenberger
This Court revisited section 5904 in Gumpenberger v. Wilkie, 31 Vet. App. 33 (2019). Once
again, the parties disputed the meaning of the phrase "total amount of any past-due benefits
awarded on the basis of the claim" as spelled out by section 5904. In that case, VA had discontinued
payment, retroactive several years to the date of service connection, on the grounds that the veteran
was a fugitive felon and thus prohibited from receiving disability payments under 38 U.S.C. §
5313(b)(3).
Mr. Gumpenberger successfully represented the veteran such that the Board issued a
decision invalidating the entire debt against the veteran. At the time of the Board decision, VA had
recouped from the veteran more than $65,000 out of a potential net entitlement of upwards of
$199,000. Having entered into a standard contingency fee agreement with the veteran, Mr.
Gumpenberger challenged a VA decision paying him 20 percent of the $65,000 that had been
erroneously collected from the veteran rather than 20 percent of the full amount of the debt
invalidated—$199,000.
The specific question in Gumpenberger was whether the phrase "total amount of any past-
due benefits awarded on the basis of the claim" in section 5904(d) encompassed non-cash benefits
such as the invalidation of a debt in whole or whether it was limited to the amount that was
erroneously recouped from the veteran. Our opinion followed Snyder's interpretations in whole,
noting that an "award" is "the amount stated as the award for success in pursuit of a claim for
benefits" and that "to make an 'award[]' on the 'basis' of that claim, [] VA must assign a disability
rating." Gumpenberger, 31 Vet. App. at 37 (citing Snyder, 489 F.3d at 1218–19). Ultimately, our
focus centered on Snyder's interpretation of what constituted a "past-due benefit," namely, that the
Federal Circuit equated past-due with unpaid benefits, such that "for there to be payment of
attorney fees out of past-due benefits awarded on the basis of the claim, there must first be an
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award of past-due benefits that were unpaid or owed to the claimant from which those fees could
be paid." Id.
We then considered the Federal Circuit's decision in Jackson and noted that VA awarded
past-due benefits when it "completed the 'non-mechanical judgments' of assigning evaluations and
effective dates" for the veteran's disabilities. Id. Significantly, we recognized that Jackson held
that money need not have actually been paid to a claimant to constitute an "award" of past-due
benefits provided that there was an award of benefits that were, in fact, past due. Id. at 38.
We held that Snyder and Jackson demonstrated that for the purposes of determining an
attorney's fee under a direct-fee pay agreement, the "total amount of past-due benefits awarded on
the basis of the claim" does not depend on the amount ultimately payable to the claimant but is
determined by VA "when the claim is granted and is not affected by an impediment to payment
like the statutory bar in Snyder or the veteran's death in Jackson." Id. That notwithstanding, past-
due benefits means the "total amount of benefits that were 'unpaid' or owed to the claimant." Id.
As the $199,000 of compensation benefits had already been paid to Mr. Gumpenberger years
before, that amount was not "unpaid benefits" for the purposes of section 5904 at the time the debt
was invalidated. Rather, only the benefits that were erroneously recouped by VA—$65,000—
qualified as "unpaid."
B. 38 U.S.C. § 5304 and 10 U.S.C. § 1414
Having labored our way through various decisions applying section 5904, we now turn to
the salient question of this case: whether section 5304's bar on payment is similar in nature to that
of section 5313 such that Snyder's reasoning covers it as well.
As with all cases of statutory construction, we focus on the language of the statute to
determine if it has a plain and unambiguous meaning with regard to the particular dispute at issue.
Barnhart v. Sigmon Coal Co., 534 U.S. 438, 450 (2002). In making this determination, we look to
"the language itself, the specific context in which that language is used, and the broader context of
the statute as a whole." Robinson v. Shell Oil Co., 519 U.S. 337, 341 (1997). If the statutory
language is unambiguous and the statutory scheme is "coherent and consistent" then the Court's
statutory inquiry comes to an end. Id. at 340.
In relevant part, 38 U.S.C. § 5304 reads:
(a)(1) Except as provided in section 1414 of title 10 or to the extent that retirement
pay is waived under other provisions of law, not more than one award of pension,
compensation, emergency officers', regular, or reserve retirement pay, or initial
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award of naval pension granted after July 13, 1943, shall be made concurrently to
any person based on such person's own service or concurrently to any person based
on the service of any other person.
Section 5304 begins by laying down two express exceptions to the prohibition against
receiving both military retirement pay and an award of disability compensation. The first exception
takes form in the opening words: "Except as provided in section 1414 of title 10" and establishes
by virtue of its placement at the beginning of the provision that the whole of section 5304 is subject
to any countervailing language within section 1414. The second exception immediately follows
and provides that section 5304's prohibition also does not apply "to the extent that retirement pay
is waived under other provisions of law."
The dispute here centers on the first exception spelled out in 10 U.S.C. § 1414(a)(1), which
provides, in relevant part, that a veteran "who is entitled for any month to retired pay and who is
also entitled for that month to veterans' disability compensation for a qualifying service-connected
disability . . . is entitled to be paid both for that month without regard to sections 5304 and 5305
of title 38." Further, section 1414(a)(2) provides a definition for "qualifying service-connected
disability" by noting that the term "means a service-connected disability or combination of service-
connected disabilities that is rated as not less than 50 percent disabling by the Secretary of Veterans
Affairs." Read together, sections 5304 and 1414 establish that a veteran who obtains a disability
rating of 50 percent or greater has a qualifying service-connected disability and thus is not subject
to 5304's prohibition against receiving both retirement pay and disability compensation and need
not waive the former.
Notably, section 1414's exception stands alongside 5304's language noting that "not more
than one award of pension, compensation . . . shall be made concurrently . . ." to veterans. 38
U.S.C. § 5304(a)(1). Recall that in Snyder the Federal Circuit explained that VA makes an award
on the basis of the claim when it assigns a disability rating to the claimant by determining average
impairments of earning capacity in civil occupations resulting from the claimant's injuries. 489
F.3d at 1218 (citing 38 U.S.C. § 1155). Jackson later refined this formulation to note that an award
of past-due benefits occurs when VA completes the "non-mechanical judgments" of assigning a
disability rating and effective date. 635 F.App'x at 861–62. In light of this interpretation, one might
be tempted to read section 5304's directive that "not more than one award . . . shall be made
concurrently" as prohibiting VA from even assigning a disability rating and effective date (that is,
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making an "award" of benefits) to veterans who have not waived retirement pay. But this reading
is untenable because the only way that the exception spelled out in section 1414 applies is if the
veteran achieves a rating of 50 percent or greater. VA must make an "award" of benefits in the
form of assigning a rating as a predicate act to determine whether section 1414 even applies.
"[W]henever a power is given by a statute, everything necessary to making it effectual or requisite
to attaining the end is implied." James Kent, Commentaries on American Law, 464 (Charles M.
Barnes ed., 13th ed. 1884).
The interplay between sections 5304 and 1414 comes into sharper focus when one
considers section 1414's repeated use of the word "entitled." Specifically, section 1414 establishes
that a veteran "who is entitled for any month to retired pay and who is also entitled for that month
to veterans' disability compensation for a qualifying service-connected disability . . . is entitled to
be paid both for that month without regard to sections 5304 and 5305 of title 38." 10 U.S.C. §
1414(a)(1) (emphasis added). Black's Law Dictionary defines "entitle" as: "To grant a legal right
to or qualify for." BLACK'S LAW DICTIONARY 612 (9th ed. 2009). It further defines "entitlement"
as: "An absolute right to a (usu. monetary) benefit, such as social security, granted immediately
upon meeting a legal requirement." Id. Significantly, this definition is consistent with the Federal
Circuit's treatment of the term in Cushman v. Shinseki, 576 F.3d 1290, 1298 (Fed. Cir. 2009),
which noted that a veteran "is entitled to disability benefits upon a showing that he meets the
eligibility requirements set forth in the governing statutes and regulations."
Section 1414 thus recognizes that it applies to any veteran who is "entitled" to retirement
pay and is "also entitled for that month to veterans' disability compensation for a qualifying
service-connected disability." The shift in focus from entitlement to qualifying service-connected
disability is significant; it establishes that to receive benefits under section 1414, the veteran's
entitlement must be to a specific class of benefits relating to a "qualifying service-connected
disability," which section 1414(a)(2) identifies as a rating of 50 percent or greater. By shifting the
focus from general entitlement to disability benefits to entitlement to a narrower class of benefits
(50 percent or greater), section 1414 operates as an exception to the prohibition against the receipt
of benefits (rather than the award of benefits) once a veteran achieves a rating of 50 percent. Thus,
veterans who obtain a 10 percent rating may be "entitled" to benefits insofar as they have met all
the relevant criteria to establish eligibility, but still do not qualify for section 1414's exception
because they have not demonstrated entitlement to a "qualifying service-connected disability" and
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so are not "entitled to be paid" for such benefits. In such cases, section 5304's prohibition still
applies, even though the veteran has otherwise established entitlement to benefits. The operative
distinction is between entitlement to benefits generally and entitlement to payment for benefits;
section 1414 provides that veterans who achieve an award of 50 percent or greater are "entitled to
be paid" for such benefits.
Section 5304 thus operates much in the same manner as section 5313's restrictions on
payment to incarcerated veterans. In Snyder, the Federal Circuit identified the operative distinction
as that between the amount "awarded" to a veteran and the amount "actually payable." 489 F.3d at
1219. Section 5313's limitations of payments did not purport to change the amount of monthly
compensation awarded on the basis of a claim but merely directed that a certain amount be
withheld. In the exact same fashion, section 1414's restrictions likewise did not alter the amount
of compensation awarded, but merely establish that no such award will be paid at all unless it falls
within the class recognized as a "qualifying service-connected disability." In this vein, Snyder
noted that even if an incarcerated veteran received an increased rating while incarcerated, "he
would see no increase in his payable benefits while he remains incarcerated, but he would
nevertheless have been 'awarded' increased compensation for the purposes of VA regulations." Id.
The same applies to section 5304. A veteran receiving military retirement pay whose rating
is increased from 10 percent to 30 percent has been awarded an increased rating but cannot receive
any payment for such rating. In this light, section 5304 functions more accurately as a total
withholding on payment that functions comparably to section 5313's limitation on payments to
benefits to which a veteran is otherwise "entitled."
It is a fundamental canon of statutory construction that "the words of a statute must be read
in their context and with a view to their place in the overall statutory scheme." Nielson v. Shinseki,
607 F.3d 802, 807 (Fed. Cir. 2010). A court must therefore interpret a statute "as a symmetrical
and coherent regulatory scheme . . . and fit, if possible, all parts into a harmonious whole." Id.
(internal quotes omitted). Reading sections 5304 and 1414 as a harmonious unit, it becomes clear
that the Secretary must first render an award of benefits—that is, assign a rating and effective
date—before determining whether section 1414's exception applies for veterans with ratings of 50
percent or greater. In cases where a veteran obtains an award of less than 50 percent, section 5304
thus operates as a withholding device—albeit a complete withholding—that functions in like
manner to section 5313's limitation on payments to incarcerated veterans. To read these statutes
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differently would require us to treat the term "award" as representing the amount payable to the
veteran—a reading that directly contradicts the Federal Circuit's interpretation in Snyder.
Contrary to our dissenting colleague's contention, see post at 21-22, our reading of these
statutes is consistent with Gumpenberger. In Gumpenberger, the Court held that attorney fees must
be calculated from the total amount of past-due benefits awarded on the basis of the claim,
notwithstanding any statutory impediment to payment. 31 Vet. App. at 38. Here, the grant of an
increased rating resulted in retroactive disability compensation that was owed and unpaid to Mr.
Grall—i.e., a past-due benefit—that VA would have been obligated to pay him but for section
5304. Construing section 5304 as a withholding device in this manner is not only consistent with
Snyder, 489 F.3d at 1219-20, but also gives due meaning to the terms "awarded" and "past-due
benefits" in section 5904(d) as required by Gumpenberger, 31 Vet. App. at 39. The critical
distinction between this case and Gumpenberger is that, here, there was a past-due benefit
awarded—unpaid but unpayable retroactive disability compensation—whereas in Gumpenberger,
invalidation of the overpayment debt did not result in a past-due benefit that was unpaid and owed
to the veteran in that amount.
C. Interpretation of 38 U.S.C. § 5904
We turn, at last, to the Board's decision. As noted earlier, the Board ruled that VA paid all
past-due benefits owed to Mr. Grall when it paid him $17,745 and that there was no basis for
eligibility for payment of additional attorneys fees related to the claim. The Board based this ruling
on the grounds that section 5904 did not "authorize VA to pay attorneys fees 'as if' a veteran's
claim resulted in an award of retroactive VA benefits payments where a veteran does not, in fact,
receive a retroactive payment of VA benefits." R. at 13. The Board distinguished this situation
from that of Snyder, as that case involved a withholding of benefits from an incarcerated veteran
who was otherwise entitled to such benefits; by contrast, this situation differed because Mr. Grall
was not entitled to a cash payment of benefits under section 5304. Additionally, the Board ruled
that VA was prevented from paying attorneys fees under its own regulation, § 14.636(h)(1), which
establishes that no cash payment will be made to veterans unless there is a corresponding waiver
in retirement pay.
The interpretation of a statute or regulation is a legal question and so we review the Board's
interpretations de novo without any deference. Lynch v. Wilkie, 30 Vet. App. 296, 301 (2018). The
Board grounded its ruling in a reading of section 5904 that cannot be squared with Snyder.
13
Specifically, the Board ruled that section 5904 did not authorize VA to pay attorneys fees as if the
veteran's claim "resulted in an award of retroactive VA benefits payments where a veteran does
not, in fact, receive a retroactive payment of VA benefits." R. at 13.
There are two problems with this interpretation. The first is the misunderstanding of what
it means when VA awards benefits: Snyder and Jackson make clear that the award of benefits
occur when VA assigns a disability rating and an effective date. Here, VA rendered an award to
Mr. Grall when it assigned him a rating of 30 percent and an effective date of May 10, 2011. VA
later issued an additional award when it increased Mr. Grall's rating for migraine headaches from
30 to 50 percent, thus rendering him eligible to receive payment under section 5304. In both
instances, VA granted the award when it completed the non-mechanical judgments of assigning a
rating and effective date. Gumpemberger, 31 Vet. App. at 37. By contrast, the Board's use of
counterfactual language "as if" suggests that no actual award of retroactive benefits occurred. This
was an error. Snyder and the following cases are unequivocal that an award occurs with the
assignment of a rating and an effective date.1
The second error is a variant of the first. Specifically, the Board conflated—that is, it treated
as having the same legal significance—the amount of payment that a veteran is allowed to receive
on a particular claim with the actual award itself. This, in fact, was the error that Snyder set about
to correct, noting that section 5313 did not restate the actual award of past-due benefits insofar as
it did not change the assigned rating or effective date; it merely operated as an extrinsic impediment
against a certain class of veterans receiving payment who were incarcerated for felonies. For this
reason, section 5313 did not affect VA's obligations under section 5904 because it did not alter the
fundamental structure of the award, but only the payment to the particular veteran. Because section
5904 directs payment to the attorney on the basis of the award and not the amount actually received
by the veteran, it was unaffected by section 5313.
For the same reason, VA's reading of its own regulation, § 14.636(h)(3)(1), is untenable in
light of the Federal Circuit's reading of the plain language of section 5904. VA reads its regulation
as forbidding payment under section 5904 unless the award of past-due benefits on a veteran's
claim results in a cash payment to the veteran. As discussed, this is the same interpretation that
1
Again, unlike in Gumpenberger, the benefit awarded in this case—an increased migraine rating effective
prior to the date of decision—included a past-due benefit of retroactive disability compensation that was owed and
would have been paid to Mr. Grall if not for section 5304's bar to payment.
14
the Federal Circuit flatly rejected in Jackson. There, VA contended that section 5904 "require[s]
that the qualifying award of past-due benefits on a veteran's claim result in a cash payment to the
veteran." Jackson, 635 F.App'x at 863–64. The Federal Circuit rejected this argument noting that
it constituted a "view of the statute that we have rejected as contrary to a proper construction. The
statute does not require payment to the veteran for the fee-supporting benefit award to exist. The
statute thus supplies no reason to give the current regulation a reading contrary to the
straightforward meaning of its terms." Id. at 8640.
D. The Appropriations Clause
The Secretary mounts one final argument that we must address, namely that VA is
prohibited by the Appropriations Clause of the Constitution, art. 1, sec. 9, cl. 7, from making such
payments under section 5904. Our analysis of this question is squarely covered by our discussion
of VA's obligations to pay attorneys as spelled out by the Snyder line of cases. In short, Snyder
puts to rest any notion that VA lacks the statutory authority to pay attorneys on successful claims
even where the veteran is barred by a separate provision of law from receiving such payments.
The Appropriations Clause has consistently been construed as prohibiting the payment of
money on a claim against the government except as authorized by statute. See Office of Pers. Mgmt
v. Richmond, 496 U.S. 414, 428–29 (1990). "It means simply that no money can be paid out of the
Treasury unless it has been appropriated by an act of Congress." Id. at 424. The Appropriations
Clause has been interpreted as "a restriction upon the disbursing authority of the Executive
department," Cincinnati Soap Co. v. United States, 301 U.S. 308, 321 (1937), insofar as it prevents
Executive branch officers from inadvertently obligating the Government to pay money without
statutory authority. See Richmond, 496 U.S. at 416.
Various federal statutes also reinforce Congress's control over appropriated funds. See 31
U.S.C. § 1301 et. seq. Section 1301, known as the "Purpose Statute" provides that appropriated
funds may be applied only "to the objects for which the appropriations were made." 31 U.S.C. §
1301(a). Section 1341, known as the Anti-Deficiency Act, makes it unlawful for government
officials to "make or authorize an expenditure or obligation exceeding an amount available in
appropriation" or to involve the Federal Government "in a contract or obligation for the payment
of money before an appropriation is made unless authorized by law." 31 U.S.C. § 1341(a)(1)(A)-
(B).
15
Various provisions within Title 38 establish the basic entitlement to disability pay and
provides that the United States "will pay" veterans who qualify for such. See e.g., 38 U.S.C. §§
1110, 1121, 1131, 1141 et. seq. Section 501 authorizes the Secretary of Veterans Affairs to
establish regulations with respect to the "nature and extent of proof and evidence" required "to
establish the right to benefits." 38 U.S.C. § 501(a)(1). Thus, there can be no question that Congress
has authorized VA via various statutory provisions to make payments to veterans who have
established eligibility for disability compensation. With regard to payments to attorneys, 38 U.S.C.
§ 5904(d)(1)-(2) obligates the Secretary to pay directly to attorneys or agents who have entered
into fee agreements with veterans to represent them before VA up to 20 percent of "any past-due
benefits awarded on the basis of the claim." Thus, VA's authority to pay attorneys directly arises
under section 5904 but is ultimately tethered to VA's statutory authority to "award" benefits to
claimants who establish the conditions for eligibility for such award.
What follows here is largely a restatement of our earlier analysis. Snyder established that
VA renders an award on a veteran's claim when it completes the non-mechanical judgments of
assigning a disability rating and effective date. Snyder clearly established that VA's obligations
under section 5904 to pay attorneys fees are not affected by additional statutory limitations on a
particular veteran's ability to receive payment as those do not affect the amount "awarded on the
basis of the claim." VA, for example, may run afoul of the Appropriations Clause if it decided to
disregard section 5304 and pay a veteran who hasn't waived retirement pay an award of less than
50 percent. However, the Snyder line of cases establishes that VA's obligations to attorneys under
section 5904 are to be determined by the amount awarded, not by the amount the veteran is actually
entitled to receive. Under such reasoning, payment to attorneys does not fall afoul of the
Appropriations Clause even where a separate provision limits payment to the claimant.
III. CONCLUSION
Accordingly, we REVERSE the Board's ruling, VACATE the September 18, 2017, Board
Decision and REMAND the matter for the Secretary to calculate and pay to Mr. Rosinski the
correct amount of attorneys fees that he is entitled to under section 5904(d)(1).
16
MEREDITH, Judge, dissenting: Congress mandated that an attorney's direct pay
contingency fee is limited to 20% of the total amount of past-due benefits awarded on the basis of
the claim. Although the veteran here was statutorily barred from receiving dual compensation and,
thus, no past-due benefits were unpaid or owed to him, the majority orders the Secretary to pay
the appellant a fee. As explained below, the result of the majority's holding in cases such as this is
that the United States (Department of Veterans Affairs) will be required to pay money out of the
Treasury, even though no funds have been appropriated for the sole purpose of paying a veteran's
attorney. For this reason, I must respectfully dissent.
I. Background
Relevant to the issue here on appeal, in April 2012, veteran Christopher D. Grall retained
the appellant, Douglas J. Rosinski, to represent him in connection with his appeal from a January
2012 rating decision that had granted entitlement to disability compensation for migraine
headaches, with a noncompensable rating effective May 10, 2011. Record (R.) at 1188-92,
1211-15. In a December 2013 rating decision, a VA regional office (RO) increased the veteran's
initial disability rating to 30%, effective May 10, 2011, bringing his combined rating to 40%. R. at
1092-96. The veteran, however, had been receiving military retirement pay and was ineligible for
concurrent receipt of retired pay and VA compensation. R. at 1069-74. Thus, in January 2014, the
RO denied direct payment of attorney fees to the appellant because the increased evaluation "did
not result in any retroactive payments to the veteran." R. at 1075-76. The appellant perfected an
appeal to the Board of Veterans' Appeals (Board), arguing that his 20% contingency fee should be
calculated prior to any offset for military retired pay. R. at 670-73, 1085-86.
While his appeal was pending, he continued to represent the veteran, and, in June 2015,
the RO increased the veteran's disability rating from 30% to 50%, effective May 10, 2011, bringing
his combined rating to 60%. R. at 374-80, 381-84, 449-52. The RO informed the veteran and the
appellant that the veteran was entitled to past-due benefits in the amount of $17,745.01 and that
20% ($3,549) would be withheld and paid directly to the appellant. R. at 381-84. The appellant
did not file a Notice of Disagreement with the manner in which the RO calculated his fee, and,
because he had received a 20% fee based on the 2015 rating decision, in January 2016, the Board
dismissed his appeal of the January 2014 decision as moot. R. at 211-16. The Court vacated the
Board's decision and remanded the matter for further adjudication. R. at 127-29.
17
In September 2017, the Board issued the decision on appeal, explaining that its decision
"is limited in scope to whether the appellant was entitled to attorney fees on the basis of the
December 2013 decision . . . and that [it] shall not consider whether the amount of the attorney
fees awarded in the separate July 2015 fee determination was proper." R. at 5. The Board then
found that, because the veteran was not eligible for concurrent receipt of VA compensation and
retired pay for the period between May 2011 and January 2014, the December 2013 award of a
30% disability rating "did not result in a retroactive payment of VA compensation benefits to the
[v]eteran." R. at 6. The Board thus concluded that, "[i]n the absence of any retroactive payment
from VA to the [v]eteran of past-due VA compensation benefits associated with the award of a
30[%] rating for migraine headaches . . . the criteria for direct payment of attorney fees . . . have
not been met." R. at 6.
II. The Appellant Did Not Contract for a Fee
The majority states that the appellant and the veteran "entered into a standard contingency
fee agreement" whereby the appellant "would be paid directly by the Secretary 20[%] of any past-
due benefits awarded on the basis of Mr. Grall's claim." Ante at 2. Although we are admittedly
constrained by 38 U.S.C. §§ 7252 and 7261, and the Board did not explicitly address the validity
of the fee agreement, in my view, it is noteworthy that the terms of the fee agreement suggest that
the appellant did not contract for a fee under the circumstances surrounding the veteran's December
2013 rating decision. In this regard, the fee agreement provides in part:
4. FEES AND COSTS
A. This is a Contingent Fee case. Client agrees to pay a fee equal to twenty percent
(20%) of the total amount of any funds recovered or awards of retroactive benefits
paid on the basis of the Client's claim(s) within the scope of this Engagement.
....
C. Attorney agrees that if it is not successful in obtaining any monetary award for
Client, then Client shall have no obligation to pay any attorney fees or costs.
5. DIRECT PAYMENT OF ATTORNEY FEES
Client agrees and expressly consents to having VA withhold the Contingent Fee
from the amount due to Client . . . , and pay the amount of the fee directly to the
Attorney as provided by VA regulations at 38 C.F.R. [§] 14.636.
R. at 1189-90 (emphasis added).
18
Each of the quoted provisions in essence reflects that the appellant's fee was contingent on
an award that resulted in a cash payment to his client. He contracted to receive 20% of the "funds
recovered" or "retroactive benefits paid," and expressly released the veteran from any obligation
to pay a fee if no "monetary award" was obtained. Id. (emphasis added). Further, although the
appellant now argues that the cash payment requirement in § 14.636 is invalid and contrary to the
U.S. Court of Appeals for the Federal Circuit's (Federal Circuit) decision in Snyder v. Nicholson,
489 F.3d 1213 (Fed. Cir. 2007), see Appellant's Substitute Brief at 9-13, this fee agreement,
executed nearly 5 years after Snyder, reflects that VA was to withhold and pay a fee in accordance
with that regulation. R. at 1190.
Based on the terms of the contract, along with the undisputed fact that the veteran was not
paid any funds as a result of the December 2013 rating decision, in my view, the appellant has not
demonstrated how he was prejudiced by any alleged misapplication of Snyder and, therefore, I
would not obligate VA to pay a contingency fee pursuant to the statute.2 See Mason v. Nicholson,
20 Vet. App. 279, 293 (2006) (finding the Board's imposition of an offset nonprejudicial where the
veteran and the attorney both received what they were entitled to receive); see also 38 U.S.C.
§ 7261(b)(2). However, putting aside the incongruity in the Court sustaining the appellant's efforts
to bind VA to pay a fee for which he did not contract, I cannot agree with the majority's conclusion
that the Federal Circuit's reasoning in Snyder applies equally to the statutory prohibition against
duplication of benefits. See 38 U.S.C. § 5304.3
2
Although the appellant contends that the language in his contract was intended to mimic section 5904, see
Oral Argument at 12:35-12:45, Rosinski v. Wilkie, U.S. Vet. App. No. 17-3293 (oral argument held Jan. 17, 2019), a
plain reading reflects that this simply is not so. Section 5904(d)(1) does not use the terms "funds" or "paid." 38 U.S.C.
§ 5904. It does, however, limit the source of an attorney's fee to the benefits that are "past-due." Id. Thus, as argued
by the Secretary, to receive a fee under the circumstances here, the contract requires the veteran to be paid, but there
was no payment; and section 5904 requires an award of past-due benefits, but there were no past-due benefits owed
to the veteran. See Oral Argument at 33:43-35:27.
3
Regarding the appellant's assertion that prohibiting an award of attorney fees in these circumstances would
disincentivize representation of retired military personnel, Appellant's Substitute Brief at 12-13, the Court noted in
Gumpenberger v. Wilkie, that, "[a]lthough direct-pay fee agreements may be the predominant fee agreement used in
veterans benefits cases, the Secretary has broadly authorized agents and attorneys to enter into other types of fee
agreements" and "attorneys should . . . take care when selecting the type of fee agreement." 31 Vet. App. 33, 41 (2019).
19
III. Snyder's Reasoning Should Not Be Applied to Section 53044
The statutory bar to dual compensation is fundamentally different from the limitation on
payments to incarcerated veterans at issue in Snyder. Section 5313 limits the amount of
compensation that may be paid to an incarcerated veteran who is otherwise "entitled to
compensation" but for his or her incarceration. 38 U.S.C. § 5313(a)(1); see Snyder, 489 F.3d at
1216 (stating that "Congress addressed only the question of limiting the amount of compensation
that would be paid to incarcerated felons"). However, Congress further provided in section
5313(b)(1) that "[a]ll or any part of the compensation not paid to a veteran by reason of
subsection (a) may . . . be apportioned under the same terms and conditions as are provided under
section 5307 of this title." 38 U.S.C. § 5313(b)(1). Thus, although section 5313(a)(1) limits the
amount of compensation that the veteran may receive,5 any compensation not paid to the veteran
is available to be paid; it may be apportioned in an appropriate case. See 38 U.S.C. § 5307;
38 C.F.R. § 3.665 (2019).
In Snyder, the Federal Circuit viewed section 5313 as a "withholding device," stating that
it "does not purport to change the monthly compensation awarded on the basis of [the] claim."
489 F.3d at 1218, 1220. Rather, "[t]he difference between awarded compensation and payable
compensation is analogous to the difference between gross salary and net salary." Id. at 1218. The
Federal Circuit explained that the "right to receive payment may accrue while a veteran is not
presently able to enjoy actual complete receipt of the funds represented by the final award." Id. at
1220.
In my view, section 5304 is not merely a withholding device. It provides in pertinent part
that, except for circumstances not relevant here, "not more than one award of pension,
4
The prohibition against dual compensation for military retirees can be traced to the Act of 1891, Act of
March 3, 1891, ch. 548, 26 Stat. 1082. Until 2001, Congress "held to the consistent view that there was no entitlement
to both retired pay and [] disability [compensation] for the same period of military service." Absher v. United States,
805 F.2d 1025, 1027 (Fed. Cir. 1986) (per curiam); see National Defense Authorization Act for Fiscal Year 2002,
Pub. L. No. 107-107, Div. A, Title VI, § 641(a), 115 Stat. 1012, 1149 (Dec. 28, 2001) (Contingent Authority For
Concurrent Receipt Of Military Retired Pay And Veterans' Disability Compensation And Enhancement Of Special
Compensation Authority), as amended, National Defense Authorization Act for Fiscal Year 2004, Pub. L. No.
108-136, Div. A, Title VI, § 641(a), 117 Stat. 1392, 1511 (Nov. 24, 2003) (Phase-In Of Full Concurrent Receipt Of
Military Retired Pay And Veterans Disability Compensation For Certain Military Retirees). There is no dispute that
none of the statutory exceptions applied at the time of the December 2013 rating decision at issue here.
5
As noted by the Federal Circuit in Snyder, section 5313 in part reflects Congress's response to reports that
excess funds received by incarcerated veterans were causing disciplinary problems in prisons. 489 F.3d at 1215-16
(citing H.R. REP. NO. 96-498, at 11-12 (1980), as reprinted in 1980 U.S.C.C.A.N. 4594, 4604-05).
20
compensation, emergency officers', regular, or reserve retirement pay . . . shall be made
concurrently to any person based on such person's own service." 38 U.S.C. § 5304(a)(1). Absent
one of the exceptions, the statute precludes a veteran from receiving both full retirement pay and
VA benefits. 38 U.S.C. §§ 5304, 5305; see McCord v. United States, 943 F.3d 1354, 1358 (Fed.
Cir. 2019) (concluding that section 5304(a)(1)'s prohibition against concurrent receipt bars
concurrent awards of benefits, meaning for concurrent periods; the timing of any payment is
irrelevant). In this sense, section 5304 represents Congress's limitation on the total amount of
government funds that may be paid based on the same period of service. See, e.g., Decision of the
Comptroller Gen., 1961 Comp. Gen. LEXIS 2915, *8-9 (Comp. Gen. June 28, 1961) (In cases of
"retroactive entitlement to [VA] compensation or pension payments, [where] the individual has
received military retirement pay during the retroactive period, . . . [and] the retirement pay equals
or exceeds the amount of the VA compensation or pension, no payment by VA is necessary for
the retroactive period."); see also Absher, 805 F.2d at 1026 (noting that the prohibition against
dual compensation was intended to "save money"). Thus, unlike a section 5313(a)(1) withholding,
which results in a fund of past-due benefits that may be available for apportionment and, as in
Snyder, to pay an attorney's contingency fee, the prohibition against concurrent receipt leaves no
such pool of appropriated funds from which any further payments may be made.
IV. Past-Due Benefits Were Not Unpaid or Owed to the Veteran
Even assuming that the bar on concurrent receipt does not itself prevent payment of
attorney fees in these circumstances, sections 5304 and 5904 operate together to make that result
clear. Section 5904 limits the amount and the source of funds from which VA may be required to
pay attorney fees up to 20% of the total amount of past-due benefits awarded on the basis of the
claim. 38 U.S.C. § 5904(d)(1), (3); see Snyder, 489 F.3d at 1216 (noting that section 5904(d)
"limits the source" of payable fees to the past-due benefits awarded). Although Snyder drew a
distinction between awarded compensation and payable compensation, in Gumpenberger, this
Court recognized that "the Federal Circuit also made an additional important conclusion about
what constitutes a past-due benefit in the first place—namely, . . . 'the sum of each month's unpaid
compensation—as determined by the claimant's disability rating—beginning on the effective date
and continuing through the date of the award.'" 31 Vet. App. at 37 (quoting Snyder, 489 F.3d at
1218). The Court stated that "the Federal Circuit essentially equated past-due with unpaid,
21
meaning that, for there to be payment of attorney fees out of the past-due benefits awarded on the
basis of the claim, there must first be an award of past-due benefits that were unpaid or owed to
the claimant from which those fees could be paid." Id. (emphasis added). The Court's holding in
Gumpenberger thus instructs that, in accordance with the language of section 5904(d), we must
give meaning to both the terms "'awarded'" and "'past-due.'" Id. at 39. Congress "mandate[d] that
the fees to be paid to an agent or attorney pursuant to a valid direct-pay fee agreement must come
from past-due benefits awarded, not merely the benefits awarded." Id.
Here, it is undisputed that, at the time of the December 2013 rating decision, the veteran
had already received retirement pay for the period from May 2011 through January 2014, and he
did not meet any of the statutory exceptions for concurrent receipt of retired pay and VA disability
compensation. Although VA determined that he was entitled to an increased disability rating,
effective May 2011, he had no right to any additional VA disability compensation. Thus, for
purposes of section 5904(d) and whether there were any past-due benefits awarded, there was no
monthly compensation unpaid or owed to the veteran from which attorney fees could be deducted.
See Snyder, 489 F.3d at 1218 ("Any compensation not paid to the claimant in a given month
becomes a past-due benefit." (internal quotation omitted)); Gumpenberger, 31 Vet. App. at 37.
The majority nonetheless relies on section 5904 as VA's authority to pay the appellant's
fee, stating that VA's section 5904 authority is "ultimately tethered to VA's statutory authority to
'award' benefits to claimants who establish the conditions for eligibility for such award." Ante at
16. In doing so, the majority essentially recognizes that Congress has not separately appropriated
funds to pay an attorney, who enters into a valid direct-pay contingency fee agreement, a fee.
Rather, an attorney's right attaches to what is past due, not just the award. See Gumpenberger,
31 Vet. App. at 38 (stating that "attorney fees can only be paid, pursuant to a direct-pay fee
agreement under section 5904(d)(1), out of those benefits that were past due"); see also Matter of
Fee Agreement of Smith, 4 Vet. App. 487, 495 (1993) (the attorney and the claimant "share a joint
entitlement to the fund of any past-due benefits awarded" (emphasis added)). Yet, by finding
generally that "VA's obligations to attorneys under section 5904 are to be determined by the
amount awarded, not by the amount the veteran is actually entitled to receive," the majority fails
to give due meaning to the term "past-due." Ante at 16. The result here is that the veteran was paid
100% of the benefits that he was awarded and entitled to receive (albeit in the form of retirement
22
pay) and VA must pay an additional 20% to the appellant—i.e., the United States will pay 120%
for the period from May 2011 to January 2014.
V. Conclusion
Because the prohibition against dual compensation limits the total amount that may be paid
based on a period of service and no benefits were unpaid or owed to the veteran, there is simply
no pool of appropriated funds that should be used to pay the veteran's attorney. Unlike the majority,
I do not read sections 5304 and 5904 as requiring the government to save money by prohibiting a
veteran from receiving any additional compensation under these circumstances but authorizing an
expenditure of those funds to pay the veteran's attorney. I thus respectfully dissent.
23