This Report summarizes opinions issued on June 15, 2022 (Part I).
Opinion: George v. McDonough, 21-234
George v. McDonough, 21-234. In a 6-3 decision, the Court held that the invalidation of a Veterans Affairs regulation after a veteran’s benefits decision becomes final cannot support a claim for collateral relief under 38 U.S.C. §7111 based on “clear and unmistakable error.” Kevin George joined the Marine Corps in 1975, but he did not disclose his history of schizophrenia and a medical examination noted no mental disorders. Less than a week into training, however, George had a schizophrenic episode and was hospitalized. A few months later, the Navy’s Central Physical Evaluation Board found that George’s schizophrenia made him unfit for duty and had not been aggravated by his service. After being medically discharged, George applied for disability benefits based on his schizophrenia. A Department of Veterans Affairs (VA) regional office denied his claim after concluding that his condition predated his military service and was not aggravated by it. The Board of Veterans’ Appeals (Board) agreed and denied George’s appeal in 1977. Neither the regional office nor the Board expressly discussed the VA’s burden of proof. Instead, the VA relied on a regulation stating that the agency could rebut the presumption of sound condition simply by showing that a disability predated service. In 2003, the VA concluded that the regulation conflicted with a statute requiring it to prove that a veteran’s condition was not aggravated by service, and the Federal Circuit agreed. In 2014, George asked the Board to revise its decision in his case based on “clear and unmistakable error.” The Board denied his claim, and the Federal Circuit affirmed. The Court affirmed in an opinion by Justice Barrett.
A 1997 statute permits collateral review of a VA decision for “clear and unmistakable error.” The statute does not define that term, but the Court found that statutory structure and the modifiers “clear” and “unmistakable” denote a “narrow category excluding some forms of error cognizable in other contexts.” When the statute was enacted, the term “had a long regulatory history in this very context.” The Court concluded that Congress codified the existing agency practice, under which a “change in law or a change in interpretation of law” does not qualify as clear and unmistakable error. Under long-existing VA regulations and practice, a clear and unmistakable error must be based on the law that existed at the time of the VA decision. When the Board decided George’s appeal in 1977, it followed the then-applicable regulation, as it was obligated to do. The Court expressed no view on the merits of the new interpretation decades later, but “because it is a change, it cannot support a claim of clear and unmistakable error in the Board’s routine 1977 application of the prior regulation.
George argued that the VA distorted its own history by glossing over Veterans Court opinions in his favor, but “across a century of review for clear and unmistakable error, George can muster only one case sustaining a claim that arguably resembles his.” Even that “outlier” case was ambiguous and failed to discuss the change-in-interpretation principle, and it did not overcome the “mountain of contrary regulatory authority” showing the “mainstream of agency practice” that Congress codified. Even accepting the argument that a judicial decision declares what a statute “always meant,” and that an unauthorized regulation is a “nullity,” the Court would still have to decide whether the application of a binding regulation is the kind of “clear and unmistakable error” for which relief is available, which the Court already answered in the negative. The Court also rejected George’s reliance on the plain meaning of “clear and unmistakable error.” The Court doubted that it is natural to find clear and unmistakable error from the faithful application of a regulation that was found invalid more than 25 years later. In any event, George’s argument conflicted with his concession elsewhere that the clear-and-unmistakable standard tracked a “deeply rooted” regulatory standard; the Court did not consider the term in the abstract, but rather as a preexisting term of art that Congress did not disturb.
Justice Sotomayor dissented, arguing that the Board “clearly and unmistakably” violated a statute in its decision denying George’s application for benefits. She argued that the regulatory system that Congress codified was “unsettled as to whether judicial invalidation of a regulation that squarely contravened an unambiguous statute constituted a change in interpretation of law.” Where the Court saw “certainty” in this history, Justice Sotomayor saw “at most confusion.” Confronted with an ambiguous regulatory scheme, she would apply the canon that provisions for benefits to members of the Armed Services should be construed in favor of the beneficiary.
Justice Gorsuch also filed a dissented opinion, which Justice Breyer joined and Justice Sotomayor joined in part. Justice Gorsuch argued that, because a judicial interpretation of a statute declares what the statute has always meant, the VA’s error was “clear and unmistakable” even though it was not recognized until years later. Even if an agency’s unlawful regulations bind its own employees until a court says otherwise, that does not mean the application of those regulations is error-free. Justice Gorsuch also argued that the 1997 statutes do not ask whether the agency’s error “was” clear and unmistakable, but whether evidence establishes clear and unmistakable error; therefore, the statute considers whether an error is clear today, not whether it was clear when it was made. The dissent (without Justice Sotomayor) also believed the Court erred by incorporating the entire regulatory history into the statute, rather than only the components that Congress specifically codified (which do not include the principle that a change in the interpretation of a law is not a clear and unmistakable error).