Thomas, Oscar v. Principi, Anthony

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 12, 2004 Decided January 14, 2005

Reissued March 7, 2005

No. 03-5182

OSCAR L. THOMAS,

APPELLANT

V.

ANTHONY J. PRINCIPI, SECRETARY, DEPARTMENT OF

VETERANS AFFAIRS, ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 02cv01743)

Matthew T. Reinhard, appointed by the court, argued the

cause as amicus curiae in support of appellant. With him on the

briefs was Alan I. Horowitz.

Oscar L. Thomas, pro se, filed briefs for appellant.

Pamela D. Huff, Assistant U.S. Attorney, argued the cause

for appellees. With her on the brief were Kenneth L. Wainstein,

U.S. Attorney, and Michael J. Ryan, Assistant U.S. Attorney.

Opinion for the Court filed by Circuit Judge TATEL.

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Before: GINSBURG, Chief Judge, and TATEL and ROBERTS,

Circuit Judges.

TATEL, Circuit Judge: The Veterans’ Judicial Review Act

not only provides that the Secretary of Veterans Affairs “shall

decide all questions of law and fact necessary to a decision . . .

under a law that affects the provision of benefits,” but also bars

district courts from reviewing such decisions. In this case, we

must decide whether this provision deprives the district court of

jurisdiction over an action brought pursuant to the Federal Tort

Claims Act by a veteran asserting (among other things) that the

VA failed to inform him that a VA doctor had diagnosed him

with schizophrenia. Because adjudicating this claim would not

require the district court to review a question “necessary to a

decision . . . under a law that affects the provision of benefits,”

we reverse the district court’s dismissal of the complaint and

remand for further proceedings consistent with this opinion.

I.

Reviewing the district court’s dismissal of the complaint for

lack of subject matter jurisdiction and failure to state a claim,

see Fed. R. Civ. P. 12(b)(1), (6), “we construe the complaint

liberally, granting plaintiff the benefit of all inferences that can

be derived from the facts alleged.” Barr v. Clinton, 370 F.3d

1196, 1199 (D.C. Cir. 2004) (internal quotation marks omitted).

Viewed through that lens, the record reveals the following.

Appellant Oscar L. Thomas, following his honorable

discharge from the United States Army, filed for mental and

physical disability benefits with the Department of Veterans

Affairs in 1989. Two years later, a VA doctor concluded that

Thomas had “persistent auditory hallucinosis which is troubling,

so a diagnosis of schizophrenia is the most likely correct

diagnosis. Some of the other adjunct symptoms are not present,

however, but this will be the working diagnosis for him. He has

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slight social and industrial disability resulting from this.” The

VA nevertheless denied Thomas’s claim, stating in a letter to

him that a “final diagnosis was not made.” Neither the rating

decision nor the doctor’s report was mentioned in the letter or

attached to it. See Thomas v. Principi, 265 F. Supp. 2d 35, 37

(D.D.C. 2003); see also Appellee’s Br. at 4.

Thomas pursued a variety of appeals and claims for

benefits. Not until 1999, however, some eight years after the

VA doctor saw him, did the VA reveal to Thomas that the doctor

had diagnosed him with schizophrenia. Alleging that the VA

had wrongfully withheld notice of his diagnosis, thereby

severely limiting his ability to pursue his livelihood, Thomas

appealed to the Board of Veterans’ Appeals. That appeal

remains pending.

In 2001, Thomas filed an administrative tort claim—a

prerequisite to bringing suit under the Federal Tort Claims Act

(“FTCA”), 28 U.S.C. § 2675(a). Like Thomas’s appeal to the

Board, this claim asserted that the VA’s failure to disclose the

schizophrenia diagnosis and to treat him resulted in greater

medical problems, denial of state and federal benefits, and loss

of income, including earning capacity. Although the

administrative tort claim also remains pending, the VA is

deemed to have finally denied the claim because it failed to

“make a final disposition of [the] claim within six months after

it [was] filed.” See id.; see also Thomas, 265 F. Supp. 2d at 38.

Acting pro se, Thomas filed suit in the United States

District Court for the District of Columbia, alleging that the VA

had committed medical malpractice and caused him intentional

emotional distress by failing to inform him of the working

diagnosis of schizophrenia. In addition to these FTCA claims,

the forty-four-page complaint alleges Privacy Act violations,

constitutional violations by the VA and several VA employees,

defamation, fraud, loss of consortium, and estoppel. In his

prayer for relief, Thomas requested compensatory and punitive

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damages of over one billion dollars from both the government

and individual VA employees.

The VA moved to dismiss, or alternatively for summary

judgment. Among other things, the VA argued that Thomas’s

FTCA claim was jurisdictionally barred by 38 U.S.C. § 511,

which prohibits district courts from reviewing “all questions of

law and fact necessary to a decision by the Secretary [for

Veterans Affairs] under a law that affects the provision of

benefits by the Secretary to veterans.”

The district court agreed with the VA, granting its motion

to dismiss the FTCA claims for lack of subject matter

jurisdiction. 265 F. Supp. 2d at 41. Reasoning that “the

gravamen of plaintiff’s claim is that [the VA] . . . failed to treat

[him] . . . for schizophrenia . . . and other medical conditions,”

the district court found that judicial review “would require the

Court to second-guess medical judgments made by DVA.” Id.

at 39. Thus, “[a] favorable decision as to plaintiff’s claims

would entail a finding that defendants should have provided a

particular quantum of medical treatment to plaintiff that they did

not in fact provide . . . . [S]uch a finding is flatly forbidden by §

511.” Id. at 39.

Via the same analysis, the district court dismissed Thomas’s

Privacy Act and constitutional claims for lack of subject matter

jurisdiction. Id. at 39-40. Finding that Thomas’s defamation

and fraud claims, though perhaps permissible under section 511,

were excluded from the FTCA’s sovereign immunity waiver, the

district court dismissed these claims as well. Id. at 40. Finally,

the court denied Thomas’s request for leave to amend his

complaint to add (1) a Privacy Act claim against the Assistant

United States Attorney for discussing Thomas’s medical records

in the VA’s motion to dismiss, (2) another tort claim against the

VA for failure to “diagnose, inform, warn, or treat,” and (3) a

legal malpractice claim against Thomas’s former legal

representatives for failing to give him documents sent to them

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by the VA. Id. at 40 n.5.

Following Thomas’s timely appeal, we appointed amicus

curiae, who has ably briefed and argued Thomas’s FTCA

claims. We consider those claims in Part II and Thomas’s other

claims in Part III.

II.

The VA argues that the “District court properly granted

summary judgment in favor of the government [because]

Thomas did not provide any evidence that the VA’s action were

[sic] wrongful.” Appellee’s Br. at 9. This argument suffers

from two defects. First, it rests on an incorrect premise. The

district court did not grant summary judgment for the

government. Instead, it dismissed Thomas’s complaint pursuant

to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). The

government did file a motion for summary judgment as an

alternative to its motion to dismiss, but the district court granted

only the latter. Second, Thomas’s failure to “provide any

evidence” is hardly surprising given that the district court’s

ruling preceded discovery, mooting Thomas’s motion to

commence discovery.

Both in its brief and at oral argument, the VA also

suggested that Thomas may not in fact suffer from

schizophrenia. The VA, however, does not deny that for eight

years it failed to advise Thomas of the working diagnosis of

schizophrenia, and whether or not Thomas actually suffers from

schizophrenia is a question the district court will have to resolve

if it has jurisdiction over Thomas’s FTCA claim. We now turn

to that jurisdictional issue.

Section 511 provides:

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

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or the dependents or survivors of veterans. . . . [T]he

decision of the Secretary as to any such question shall be

final and conclusive and may not be reviewed by any other

official or by any court, whether by an action in the nature

of mandamus or otherwise.

38 U.S.C. § 511. Other provisions of the Act demarcate the path

to appellate review of secretarial benefits decisions: claimants

may first appeal to the Board of Veterans’ Appeals, id. §

7104(a), then to the Court of Appeals for Veterans’ Claims, id.

§ 7252(a), to the Federal Circuit, id. § 7292(c), and ultimately to

the Supreme Court, id.

According to the VA, “[f]ederal courts construing the

predecessors to section 511 have consistently recognized that the

statute barred district court consideration of individual claims

for veterans’ benefits.” Appellee’s Br. at 11. True enough, but

our task here is to determine whether Thomas has presented any

such claims.

We have addressed section 511’s scope only once. In Price

v . United States, we held that “the district court lacked

jurisdiction to consider [appellant’s] federal claim because

underlying the claim is an allegation that the VA unjustifiably

denied him a veterans’ benefit.” 228 F.3d 420, 421 (D.C. Cir.

2001) (per curiam). Assuming appellant’s damages claim was

cognizable under a Florida tort statute, we found that the Florida

cause of action depended on whether the insurer—in that case

the VA—had acted in bad faith. Id. at 422. Reasoning that a

“determination whether the VA acted in bad faith or with

negligence would require the district court to determine first

whether the VA acted properly in handling Price’s request for

reimbursement,” we concluded that section 511 foreclosed

judicial review. Id.

Applying Price to the facts of this case, we must determine

whether adjudicating Thomas’s claims would require the district

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court “to determine first whether the VA acted properly in

handling” Thomas’s benefits request. Id. Given that we hold

pro se complaints “to less stringent standards than formal

pleadings drafted by lawyers,” Haines v. Kerner, 404 U.S. 519,

520 (1972), and giving Thomas the benefit of all inferences, as

we must at this stage of the litigation, we think he has alleged at

least some VA actions that the district court can adjudicate

without “determin[ing] first” whether Thomas was entitled to a

certain level of benefits.

For example, Count III, alleging intentional infliction of

emotional distress, states that “Defendants [sic] outrageous

conduct in covering up the presence of a diagnosis of

Schizophrenia with slight social and industrial disability because

of this, for more than 10 years, was intentionally and recklessly

directed at Plaintiff.” Compl. ¶ 31. Count V, labeled “Gross

Negligence, Medical Negligence, and Legal Misconduct,”

alleges that defendants negligently “failed to inform Plaintiff of

the diagnosis, and about the risk of an untoward outcome.”

Compl. ¶ 62. Similarly, Count X, entitled “Medical

Malpractice,” alleges that

[e]ach of these defendants failed to take responsibility by

not ensuring and taking time to communicate the risks and

choices that were available to Plaintiff, e.g., the right to

know, (1) you have been diagnosed with Schizophrenia

with slight social and industrial impairment because of this,

(2) you have the choices of receiving medical treatment

care from DVA, or to not receive treatment from DVA, and

we let you make these choices; or inform Plaintiff that . . .

‘your claims for Schizophrenia is [sic] denied.’

Compl. ¶ 95. Because none of these claims alleges that the VA

failed to pay for treatment (or even to provide for treatment),

they raise no “questions of law [or] fact necessary to a decision

by the Secretary under a law that affects the provision of

benefits.” 38 U.S.C. § 511. The raised “questions of law and

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fact” relate to whether the alleged withholding of the diagnosis

states a tort claim, and resolution of those questions is not

“necessary” to the benefits determination. See id. Putting the

issue in Price’s terms, no denial of benefits “underl[ies]”

Thomas’s failure-to-inform allegations. See 228 F.3d at 421.

In reaching a different conclusion, the district court cited

the regulatory definition of “benefit,” which includes “any . . .

service, . . . entitlement to which is determined under laws

administered by the Department of Veterans Affairs pertaining

to veterans.” 38 C.F.R. § 20.3(e). But neither the district court

nor the VA maintains that “service” spans so broadly as to

encompass an alleged duty to inform. Indeed, when pressed at

oral argument, counsel for the VA agreed that if a VA doctor

left a sponge inside a patient during surgery, section 511 would

permit an FTCA malpractice suit in district court. Reiterating

our reliance on Price, we reject any implication that all action or

inaction by the VA represents a type of “service,” and therefore

automatically constitutes a “benefit.”

To be sure, as amicus acknowledges, not all of Thomas’s

tort allegations survive the standard articulated in Price. For

example, Count X alleges that the VA “failed to render the

appropriate medical care services that are delivered to alleviate

a harmful medical condition, which is calculated to prevent,

diagnose, correct, cure, alleviate, or prevent the worsening in the

Plaintiff.” Compl. ¶ 109. Likewise, Count III claims (among

other things) that the VA’s “continuous and persistent

deprivation and denial of known needed and necessary medical

care treatment . . . caused Plaintiff severe emotional distress.”

Compl. ¶ 29. Because adjudicating these allegations—failure to

“render appropriate medical services” and “denial of . . .

necessary medical care treatment”—would require the district

court “to determine first whether the VA acted properly” in

providing Thomas benefits, these claims are barred by section

511. See Price, 228 F.3d at 422. The district court’s lack of

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jurisdiction over these claims, however, has no effect on its

ability to consider the non-benefits claims also raised in Counts

III, V, and X.

III.

Without benefit of amicus curiae, Thomas also challenges

the district court’s dismissal of his Privacy Act and Bivens

claims, as well as its denial of his motion for leave to amend.

These arguments require little discussion.

As to Thomas’s Privacy Act claims, the district court

correctly found them barred by section 511. Unlike the FTCA

claims, counts XI and XII allege only that the VA’s failure to

maintain accurate and complete records adversely affected

Thomas’s benefits determinations.

Thomas’s constitutional claims for money damages against

VA employees are also barred. Under Bivens, “special factors”

may counsel “hesitation in the absence of affirmative action by

Congress” establishing liability for the acts of individual

government employees. See Bivens v. Six Unknown Named

Agents of the Federal Bureau of Narcotics, 403 U.S. 388, 396

(1971). “Special factors” include “an elaborate remedial

system” constructed by Congress “with careful attention to

conflicting policy considerations.” Bush v. Lucas, 462 U.S. 367,

388 (1983). Here, “the administrative process created by

Congress provides for a comprehensive review of veterans’

benefits disputes. Further, Congress has explicitly precluded

judicial review of veterans’ benefits disputes, which suggests

that Congress’ failure to create a remedy against individual VA

employees was not an oversight.” Zuspann v. Brown, 60 F.3d

1156, 1161 (5th Cir. 1995) (internal quotation marks omitted);

accord Sugrue v. Derwinski, 26 F.3d 8, 12-13 (2d Cir. 1994).

Because we agree with the Fifth Circuit that this combination

forecloses a Bivens action against VA employees for

constitutional torts in the context of a dispute over veterans’

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benefits, we will affirm the district court’s dismissal of these

claims.

Finally, reviewing for abuse of discretion, see Firestone v.

Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996) (per curiam), we

will also affirm the district court’s denial of leave to amend the

complaint to add a legal malpractice claim against Thomas’s

former legal representatives and another Privacy Act claim. See

265 F. Supp. 2d at 40 n.5. As the district court noted, Thomas

“remains free to assert [these] claims in a new action against the

appropriate defendants.” Id. In light of our determination that

the district court has jurisdiction over Thomas’s FTCA claims,

however, we will remand his request to add a claim against the

VA for “failure to diagnose, inform, warn, or treat.” See id.

Once Thomas amends his complaint, the district court, applying

Price and this decision, will need to decide whether section 511

bars the additional allegation.

IV.

We reverse the dismissal of counts III, V, and X, as well as

the denial of Thomas’s request to amend his complaint to add

another tort claim, and remand for further proceedings

consistent with this opinion. In all other respects, we affirm.

So ordered.