Denorris Andrews v. Secretary, Department of Veterans Affairs

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 20-10849
Non-Argument Calendar
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D.C. Docket No. 1:18-cv-01533-JPB
BERTHA ANDREWS,
Plaintiff,
DENORRIS ANDREWS,
JAMES ANDREWS,
c/o Clarence Andrews, Ward,
Plaintiffs – Appellants,
versus
SECRETARY, DEPARTMENT OF
VETERANS AFFAIRS,
GOVERNOR FOR THE STATE OF
GEORGIA,
on Behalf of the Georgia General
Assembly,
KAREN C. GAINEY, ESQ.,
individually,
Defendants - Appellees,
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PROBATE JUDGE,
on behalf of the Probate Court of
Fulton County,
Defendant.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(February 11, 2021)
Before WILSON, MARTIN, and GRANT, Circuit Judges.
PER CURIAM:
Plaintiffs DeNorris Andrews and James Andrews appeal the district court’s
dismissal of their complaint based on sovereign immunity and lack of subject
matter jurisdiction. Plaintiffs’ claims stem from alleged overpayments that the
Department of Veterans Affairs (VA) authorized to a fiduciary responsible for
distributing VA benefits. Because Congress has broadly precluded judicial review
of decisions necessary to VA benefits determinations, the district court lacked
subject matter jurisdiction to decide Plaintiffs’ claims. Therefore, we affirm.
BACKGROUND
Plaintiffs were the legal guardians of their brother, Clarence Andrews, an
incapacitated Vietnam War veteran. 1 Defendant Karen Gainey was appointed as
1
Plaintiffs filed a motion on November 20, 2019, notifying the district court that Clarence
Andrews is now deceased. The motion also stated that Bertha Andrews, Clarence’s mother and a
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the fiduciary in charge of Andrews’s VA benefits. For her services, Gainey
collected a commission amounting to five percent of Andrews’s benefits, which is
permissible under Georgia law. See O.C.G.A. § 29-7-15. However, Plaintiffs
allege that Gainey’s commission was one percent higher than what the Secretary of
Veterans Affairs can authorize because federal law limits commissions to four
percent. See 38 U.S.C. § 5502(a)(2).
Plaintiffs sued three defendants: (1) Secretary Robert Wilkie (2) Gainey, and
(3) Governor Brian Kemp. The district court first dismissed Plaintiffs’ claim
against Secretary Wilkie, finding that it was barred by sovereign immunity. In a
subsequent order, the district court dismissed Plaintiffs’ claims against Gainey and
Governor Kemp for lack of subject matter jurisdiction. This appeal followed.
STANDARD OF REVIEW
We review de novo a district court’s dismissal for lack of subject matter
jurisdiction. Zelaya v. United States, 781 F.3d 1315, 1321 (11th Cir. 2015).
DISCUSSION
Federal courts are courts of limited jurisdiction. Univ. of S. Alabama v. Am.
Tobacco Co., 168 F.3d 405, 409 (11th Cir. 1999). “They are empowered to hear
only those cases within the judicial power of the United States as defined by
named plaintiff, is now deceased. Plaintiffs’ motion asked the court to allow Denorris Andrews
and James Andrews to continue this action as administrators of Clarence’s estate.
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Article III of the Constitution, and which have been entrusted to them by a
jurisdictional grant authorized by Congress.” Id. (internal quotation marks
omitted). When interpreting statutes establishing jurisdiction, “federal courts
should proceed with caution.” Id. (internal quotation marks omitted). The
presumption is that a claim lies outside a federal court’s jurisdiction, “and the
burden of establishing the contrary rests upon the party asserting jurisdiction.”
Bishop v. Reno, 210 F.3d 1295, 1298 (11th Cir. 2000).
Through the Veterans’ Judicial Review Act (VJRA), Congress created an
exclusive scheme for the review of claims affecting veterans’ benefits. Under the
VJRA, “the Secretary shall decide all questions of law and fact necessary to a
decision by the Secretary under a law that affects the provision of benefits by the
Secretary to veterans or the dependents or survivors of veterans.” 38 U.S.C. §
511(a). Determinations by the Secretary may be appealed exclusively to the Board
of Veterans’ Appeals. Id. § 7104(a). The Board’s decisions may be appealed to
the Court of Appeals for Veterans Claims, an Article I tribunal created by the
VJRA. Id. §§ 7251, 7252(a). And decisions of the Court of Appeals for Veterans
Claims are appealable solely to the Federal Circuit. Id. § 7292(c). The Federal
Circuit has “exclusive jurisdiction to review and decide any challenge to the
validity of any statute or regulation or any interpretation thereof brought under this
section, and to interpret constitutional and statutory provisions, to the extent
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presented and necessary to a decision.” Id. Because the VJRA establishes an
exclusive regime, district courts are divested of jurisdiction where the VJRA
applies.
The VJRA is broad. See Anestis v. United States, 749 F.3d 520, 525 (6th
Cir. 2014). Indeed, “courts have consistently held” that its scope extends to
constitutional or tort claims “whose resolution would require the court to intrude
upon the VA’s exclusive jurisdiction.” Price v. United States, 228 F.3d 420, 422
(D.C. Cir. 2000) (per curiam); see also Hicks v. Small, 69 F.3d 967, 970 (9th Cir.
1995) (holding that district courts lack jurisdiction to hear challenges to benefits
determinations, even if those challenges are framed as tort law claims); Sugrue v.
Derwinski, 26 F.3d 8, 11 (2d Cir. 1994) (holding that “the courts do not acquire
jurisdiction to hear challenges to benefits determinations merely because those
challenges are cloaked in constitutional terms”). The VJRA’s applicability—and
conversely a district court’s jurisdiction—depends on the gravamen of the claim,
rather than its label. The question, then, is whether the gravamen of Plaintiffs’
claims places them within the scope of the VJRA. If so, the district court lacked
jurisdiction. We take Plaintiffs’ claims against each defendant in turn.
First, as to Secretary Wilkie, Plaintiffs seek damages, costs, and attorney’s
fees under the Federal Tort Claims Act (FTCA). The FTCA allows plaintiffs to
sue the United States Government in tort for injuries “caused by the negligent or
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wrongful act or omission of any employee of the Government while acting within
the scope of his office or employment.” 28 U.S.C. § 1346(b)(1). Plaintiffs allege
that the VA breached its duty under two VA regulations: 38 C.F.R. §§ 13.1 and
13.3. Specifically, Plaintiffs allege that the VA failed “to communicate with
Georgia officials and to monitor and oversee Georgia legislation.” The result,
Plaintiffs argue, is that Andrews did not receive the full benefits he was entitled to
because the Secretary negligently allowed Andrews’s fiduciary to collect a five
percent payment under Georgia law, rather than a four percent payment—the
maximum allowed under 38 U.S.C. § 5502(a)(2).
Section 5502, which governs payments to and supervision of fiduciaries, is a
law affecting the provision of veterans’ benefits. Id. § 5502; see Evans v.
Greenfield Banking Co., 774 F.3d 1117, 1121, 1124 (7th Cir. 2014). It gives the
Secretary the power to appoint a fiduciary, and—if it is in the best interest of the
beneficiary—to authorize the fiduciary to receive a commission of up to four
percent of the veteran’s benefits. 38 U.S.C. § 5502(a)(2). The Secretary cannot
authorize a fee under Section 5502 if the fiduciary receives “any other form of
remuneration or payment in connection with rendering fiduciary services for
benefits . . . on behalf of the beneficiary.” Id. And importantly, the Secretary has
discretion to supervise the fiduciary. Id. § 5502(b). “Whenever it appears that any
fiduciary, in the opinion of the Secretary, . . . has collected or paid . . . fees,
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commissions, or allowances that are inequitable or in excess of those allowed by
law for the duties performed or expenses incurred,” the Secretary may suspend
payments to the fiduciary or take other appropriate action. Id.
Here, Plaintiffs style their claim against Secretary Wilkie as an FTCA claim.
But when Plaintiffs argue that the Secretary negligently allowed Gainey to receive
excess payments, they raise a question “necessary” to the Secretary’s
determination under Section 5502. 38 U.S.C. § 511(a). In other words, Plaintiffs’
claim requires us to review VA decisions that affect the provision of benefits. Id.Therefore, under the VJRA, the proper avenue to challenge the Secretary’s
decision is through the Board of Veterans’ Appeals. Consequently, the district
court was without jurisdiction to decide Plaintiffs’ FTCA claim.
Next, we consider the bevy of tort law claims Plaintiffs raise against Gainey:
(1) constructive trust, (2) conversion, (3) bad faith, (4) willful misconduct, (5)
removal of fiduciary, and (6) breach of fiduciary duty. The basis for these claims
is that Gainey collected a commission in excess of what federal law permits,
thereby depriving Andrews of VA benefits he was entitled to. Gainey responds
that “the VA interpreted and applied Section 5502 to allow [her] collection of a 5%
commission as authorized by the probate court—so long as her guardian
commission was collected in lieu of, and not in addition to, any fees authorized by
the Secretary under 5502(a)(2).”
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Whether or not this was a correct interpretation of the statute, it is
undisputed that the Secretary authorized Gainey’s five percent commission. So to
resolve Plaintiffs’ contention that federal law prohibits that commission, the
district court would have to review whether a decision of the Secretary that
affected Andrews’s benefits violated federal law. The VJRA prevents district
courts from doing that. 38 U.S.C. § 511(a). Therefore, the district court was
without jurisdiction to decide the claims against Gainey.
Finally, as to Governor Kemp, Plaintiffs bring a federal preemption claim
against the State of Georgia. Plaintiffs assert that O.C.G.A. § 29-7-15, the Georgia
law permitting VA guardians to earn commissions of five percent, is preempted by
federal law. Plaintiffs also allege that the State of Georgia violated their due
process rights and the Commerce Clause. Although “cloaked in constitutional
terms,” Sugrue, 26 F.3d at 11, these claims are, in reality, yet another attempt to
challenge the Secretary’s determination by pointing to “questions of law . . .
necessary to [his] decision . . . under a law that affects benefits.” 38 U.S.C. §
511(a). Therefore, the VJRA’s exclusive review mechanism applies, and the
district court lacked jurisdiction to decide these claims.
None of the cases cited by Plaintiffs are persuasive. Plaintiffs rely primarily
on Mansfield v. Peake, 525 F.3d 1312 (Fed. Cir. 2008). There, the Federal Circuit
affirmed the Veterans Court of Appeals’ decision that providing the VA with
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notice of intent to file a medical malpractice claim did not constitute an informal
claim for disability benefits. Id. at 1316. Mansfield did not address the question
presented here: whether challenges that are framed as constitutional and tort law
claims—but are really challenges to the Secretary’s benefits decision—fall within
the scope of the VJRA.
Plaintiffs also rely on Traynor v. Turnage, 485 U.S. 535 (1988). But
Plaintiffs’ characterization of that case lacks important context. In Traynor, the
Court narrowly construed the scope of 38 U.S.C. § 211(a), the precursor to §
511(a), holding that it did not preclude the district court from deciding whether a
VA regulation violated the Rehabilitation Act. Id. at 545. The Court reasoned that
the VA lacked “any special expertise” in deciding the issue. Id. at 544. And,
therefore, “[p]ermitting [such] cases to go forward [would] not undermine the
purposes of § 211(a)” by “enmesh[ing] the courts in the technical and complex
determinations and applications of Veterans’ Administration policy connected with
veterans’ benefits decisions.” Id. (internal quotation marks omitted). The Court
added the caveat that “if experience proves otherwise, the Veterans’
Administration is fully capable of seeking appropriate relief from Congress.” Id. at
544–45.
Congress reacted within a matter of months. “In order to dissuade the
judiciary from ignoring the explicit language that Congress used in isolating
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decisions of the Administrator from judicial scrutiny, Congress overhauled both
the internal review mechanism and § 211 in the VJRA.” Veterans for Common
Sense v. Shinseki, 678 F.3d 1013, 1021 (9th Cir. 2012) (en banc) (internal citations
omitted). To this end, Congress created the United States Court of Appeals for
Veterans Claims and made that court’s decisions appealable only to the Federal
Circuit. Id. Congress also “expanded the provision precluding judicial review”
through its enactment of 38 U.S.C. § 511—the provision critical to our disposition
of this appeal. Id. at 1022. Because Traynor was not decided under the current
VJRA framework, we find Plaintiffs’ reliance on that decision unpersuasive.
Under the current VJRA framework, each of Plaintiffs’ claims amounts to a
challenge to “questions of law and fact necessary to a decision . . . under a law that
affects the provision of benefits . . . to veterans.” 38 U.S.C. § 511(a). Because
“the decision of the Secretary as to any such question shall be final and conclusive
and may not be reviewed” outside of the framework the VJRA sets forth, the
district court lacked jurisdiction to decide Plaintiffs’ claims. Id.AFFIRMED.
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