Thomas Karmatzis v. Michall Hamiliton

NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with
Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted January 23, 2014*
Decided January 27, 2014
Before
JOEL M. FLAUM, Circuit Judge
DANIEL A. MANION, Circuit Judge
MICHAEL S. KANNE, Circuit Judge
No. 12-3491
THOMAS KARMATZIS, Appeal from the United States District
Plaintiff-Appellant, Court for the Central District of Illinois.
v. No. 11-CV-2222
MICHAEL HAMILTON, et al., Michael P. McCuskey,
Defendants-Appellees. Judge.
ORDER
Thomas Karmatzis, an army veteran, appeals the dismissal of his suit against the
U.S. Department of Veterans Affairs (“VA”) and eleven VA employees, alleging that
they violated his constitutional rights by discontinuing his health-care benefits and
denying him an opportunity to appeal. The district judge dismissed the complaint for
lack of subject-matter jurisdiction and denied Karmatzis’s motion to amend. We affirm.
*
After examining the parties’ briefs and the record, we have concluded that oral
argument is unnecessary. Thus, the appeal is submitted on the briefs and the record.
See FED. R. APP. P. 34(a)(2)(C).
No. 12-3491 Page 2
In 2009 Karmatzis underwent spinal surgery at a VA hospital and suffered
complications that required removal of a portion of his small intestine and resectioning
of his colon. He filed a complaint with the VA a year later seeking compensatory
benefits because, he asserted, his surgical complications were caused by the VA’s
negligence. While his claim was pending, the VA discontinued his health-care benefits
because he had not served the requisite time in active duty. The VA later also denied his
claim for compensatory benefits, a denial that Karmatzis administratively appealed, but
that appeal is not part of this case.
Karmatzis sued in federal court, alleging that the VA discontinued his
health-care benefits in retaliation for filing a claim for compensation, and denied him an
opportunity to appeal the discontinuation. The district judge, on the magistrate judge’s
recommendation, terminated the case, dismissing the complaint for lack of
subject-matter jurisdiction. Challenges to individual veteran’s benefits decisions, the
district judge explained, are barred under the Veteran’s Judicial Review Act, see 38
U.S.C. § 511(a).
A week later Karmatzis moved to amend his complaint to clarify that the
defendants violated his due-process rights when a VA employee told him that no
appeal process was available to him to challenge the discontinuation of benefits. The
magistrate judge, apparently unaware that he lacked the parties’ consent to rule on a
dispositive matter, see 28 U.S.C. § 636(c), denied the motion. Echoing the district judge’s
earlier decision, the magistrate judge concluded that the court lacked subject-matter
jurisdiction to review Karmatzis’s motion to amend because that motion, like his
original complaint, raised not a facial constitutional challenge, but rather a challenge
only to the VA’s conduct in his particular case, and he would have to pursue his
challenge through the VA’s appeals process.
Karmatzis appealed, and we remanded the case because of the § 636(c) matter
and urged the district judge to review the magistrate judge’s ruling and resolve the
postjudgment motion to amend the complaint. The district judge in turn accepted the
magistrate judge’s rationale and denied the motion.
On appeal Kartmatzis challenges the ruling that the district court lacked
subject-matter jurisdiction under the VJRA over his claims. He asserts that his complaint
raised a facial constitutional challenge by contesting the discontinuation of his benefits
and the unavailability of an appeals process.
No. 12-3491 Page 3
The VJRA establishes the exclusive review procedure through which veterans
may challenge the VA’s adjudication of their benefits claims. See 38 U.S.C. § 511(a). The
circuits unanimously agree that the VJRA divests the federal courts of jurisdiction to
review lawsuits challenging individual veteran’s benefits decisions. See id; Veterans for
Common Sense v. Shinseki, 678 F.3d 1013, 1025 (9th Cir. 2012); Price v. United States, 228
F.3d 420, 421 (D.C. Cir. 2000); Beamon v. Brown, 125 F.3d 965, 970–71 (6th Cir. 1997);
Weaver v. United States, 98 F.3d 518, 519–20 (10th Cir. 1996); Hall v. U.S. Dep’t of Veterans’
Affairs, 85 F.3d 532, 534 (11th Cir. 1996); Zuspann v. Brown, 60 F.3d 1156, 1158–59 (5th
Cir. 1995); Sugrue v. Derwinski, 26 F.3d 8, 11 (2d Cir. 1994); Hicks v. Veterans Admin., 961
F.2d 1367, 1369–70 (8th Cir. 1992). A veteran may not circumvent these jurisdictional
limitations by cloaking a benefits claim in constitutional terms. See Veterans for Common
Sense, 678 F.3d at 1023 (collecting cases).
The district judge here properly concluded that Karmatzis did not make a facial
constitutional attack, but instead merely was “challenging the VA’s conduct in his
particular case.” The essence of Karmatzis’s complaint is that the VA erroneously
discontinued his health-care benefits and should have allowed him an opportunity to
appeal the discontinuation. Based on the VA’s allegedly erroneous actions, he seeks
damages for the “neglect[] and complication[s] due too [sic] the injur[ies] from the
surger[ies] and being thrown out without medication and proper medical treatment
being set up.” He frames his contentions (in his submissions to the district court and his
brief on appeal) as due process violations, but federal courts do not acquire jurisdiction
to hear challenges to benefits rulings merely because those challenges are couched in
constitutional terms. He is complaining about the discontinuation of his benefits, and
the VJRA divests courts of jurisdiction over such claims. See 38 U.S.C. § 511.
If Karmatzis wished to challenge the benefits decision, he needed to appeal that
decision first to the Board of Veteran’s Appeals. See 38 U.S.C. § 7104(a). But because
Karmatzis failed to file an appeal with the Board within one year of the VA’s decision to
discontinue his benefits, the decision became final and cannot now be appealed. Id.§ 7105(b)(1), (c). And because Karmatzis’s benefits decision cannot be appealed, it
would be futile to allow him to amend his complaint. Therefore, the district court also
properly denied Karmatzis leave to amend his complaint.
Accordingly, we AFFIRM the judgment of the district court.