Kevin J. Rosenberg v. Gordon H. Mansfield

UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS

NO . 05-3184

KEVIN J. ROSENBERG , APPELLANT ,

V.

GORDON H. MANSFIELD ,

ACTING SECRETARY OF VETERANS AFFAIRS, APPELLEE.

On Appeal from the Board of Veterans' Appeals

(Argued August 21, 2007 Decided November 28, 2007 )

Kevin J. Rosenberg, pro se.

Brian P. Tierny, with whom Paul J. Hutter, General Counsel; R. Randall Campbell,

Assistant General Counsel; Brian B. Rippel, Deputy Assistant General Counsel; and Ella Krainsky,

Appellate Attorney, were on the brief, all of Washington D.C., for the appellee.

Before GREENE, Chief Judge, and KASOLD and LANCE, Judges.

LANCE, Judge, filed the opinion of the Court. KASOLD, Judge, filed a concurring opinion.

LANCE, Judge: The appellant, Kevin J. Rosenberg, an attorney acting on his own behalf,

appeals a July 15, 2005, decision of the Board of Veterans' Appeals (Board). Record (R.) at 1-10.

In that decision, the Board denied his claim for basic educational assistance under 38 U.S.C. § 3011.

For the reasons set forth below, the Board's July 2005 decision will be affirmed.

I. BACKGROUND

In August 1992, the appellant joined the University of Arizona's Naval Reserve Officer

Training Corps (NROTC) as a College Program Basic student. R. at 40. In July 1993, the Secretary

of the U.S. Navy, acting pursuant to his authority under 10 U.S.C. § 2107, selected the appellant for

an NROTC scholarship. R. at 17, 33. The following month, the appellant signed an NROTC

Scholarship Service Agreement, the terms of which officially recognized his appointment as a

section 2107 midshipman and his entitlement to three years of financial assistance. R. at 17-20.

That assistance totaled $3,675 in 1993, $7,350 in 1994, and $3,989 in 1995. R. at 21.

In December 1996, after successfully completing the NROTC program, the appellant was

commissioned as an ensign in the U.S. Navy. That same month, he also signed a DD Form 2366,

a statement of understanding with respect to his "eligibility to participate in the Veterans'

Educational Assistance Act of 1984 (New GI Bill)," wherein the appellant acknowledged that he

was an "ROTC scholarship graduate" and hence "NOT ELIGIBLE" for basic educational assistance

under Chapter 30, title 38, U.S. Code. R. at 23. He served honorably in the U.S. Navy from

December 1996 until December 2000. R. at 4, 14-15.

In April 2001, the appellant applied for basic educational assistance under 38 U.S.C. § 3011

for the cost of attending law school. R. at 25-27. VA denied that claim, and the appellant appealed.

R. at 29. In August 2001, while his appeal was still pending, the appellant enrolled as a full-time

student at the Yeshiva University, Benjamin Cardozo School of Law in New York, New York. In

January 2002, VA reversed its original decision and issued the appellant a "Certificate of Eligibility"

for 36 months of Chapter 30 educational benefits. R. at 55.

In February 2003, the U.S. Navy recalled the appellant to active duty. R. 69-75. This change

in military status prompted VA to discontinue his Chapter 30 educational benefits. R. at 5. In June

2003, one month after his release from active duty, VA received the appellant's request for

reinstitution of his Chapter 30 educational benefits. R. at 61-62. In October 2003, the RO notified

the appellant that those benefits had been terminated, effective August 27, 2001, because he had

received more than $3,400 in financial assistance annually during his participation in the section

2107 NROTC scholarship program. R. at 89-90. While his appeal of that decision was pending, the

Secretary waived the $11,109.33 debt the appellant had accrued as a result of the overpayment in

Chapter 30 educational benefits he received during his first four semesters of law school. R. at 142-

43. The Secretary also granted $3,643.83 in additional equitable relief, an amount equal to the

Chapter 30 educational benefits that the appellant, if eligible, would have received during the Fall

2003 semester. R. at 151.

In July 2005, the Board issued the decision here on appeal. The Board found that the

appellant was not entitled to Chapter 30 educational benefits because he had received more than

$3,400 in financial assistance annually during his participation in the section 2107 NROTC

2

scholarship program. R. at 7-9. The Board further found that it had no legal authority to grant an

equitable award of Chapter 30 educational benefits. R. at 9 (citing Harvey v. Brown, 6 Vet.App.

416, 425 (1994)).

II. ANALYSIS

The appellant argues that the Secretary's interpretation of 38 U.S.C. § 3011 is incorrect and

that, even if his interpretation is correct, equitable estoppel bars the termination of his Chapter 30

educational benefits. Appellant's Brief (Br.) at 5-9. The Secretary responds that the plain meaning

of 38 U.S.C. § 3011 bars the appellant from receiving basic educational assistance and that there is

no merit, therefore, to his equitable estoppel argument. Secretary's Br. at 6-11.

A. 38 U.S.C. § 3011(c)(3) and 10 U.S.C. § 2107

Section 3011 of title 38, U.S. Code, is the entitlement provision for basic educational

assistance. See 38 C.F.R. § 21.7040 (2007); see also Burton v. Nicholson, 19 Vet.App. 249, 251

(2005) (discussing the history of veterans educational assistance). Subsection (c)(3) of section 3011

sets forth the eligibility requirements for veterans who have received financial assistance pursuant

to 10 U.S.C. § 2107.1 It states:

(3) An individual who after December 31, 1976, receives a commission as an officer

in the Armed Forces upon completion of a program of educational assistance under

section 2107 of title 10 is not eligible for educational assistance under this section

if the individual enters on active duty-

(A) before October 1, 1996; or

(B) after September 30, 1996, and while participating in such program received

more than $3,400 for each year of such participation.

38 U.S.C. § 3011(c)(3). The appellant completed a section 2107 program of educational assistance,

was commissioned as an ensign in the U.S. Navy and entered active duty after September 30, 1996,

and received more than $3,400 during each of his three years as a section 2107 midshipman. The

issue here is whether the appellant is eligible for Chapter 30 educational benefits because he did not

1

Section 2107 of title 10, U.S. Code, establishes a "[f]inancial assistance program for specially selected

members." It provides that the Secretary of the military department concerned may, subject to certain age restrictions,

specially select a citizen or national of the United States for appointment as a cadet or midshipman in the reserve

component of the armed forces under his jurisdiction. 10 U.S.C. § 2107(a)-(b). Once the statutorily-required contract

is executed, an appointee then becomes eligible to receive financial assistance for "tuition, fees, books, and laboratory

expenses," or, in certain circumstances, for room and board. 10 U.S.C. § 2107(c)(1), (c)(3).

3

receive any section 2107 financial assistance while participating in the NROTC College Program

during the 1992-1993 school year (SY).

"'Statutory interpretation begins with the language of the statute, the plain meaning of which

we derive from its text and its structure.'" Myore v. Nicholson, 489 F.3d 1207, 1211 (Fed. Cir. 2007)

(quoting McEntee v. Merit Sys. Prot. Bd., 404 F.3d 1320, 1328 (Fed. Cir. 2005)). Section 3011states

that section 2107 program participants who entered active duty after September 30, 1996, and who

received more than $3,400 per year "while participating in such program" are not eligible for basic

educational assistance. See 38 U.S.C. § 3011(c)(3)(B) (emphasis added). The appellant argues that

he received no financial assistance "while participating in an ROTC program" during the 1992-

1993 SY; therefore, he qualifies for the eligibility exception. Br. at 5. He further argues that the

statute intends to provide educational benefits to NROTC members, himself included, who "did not

receive a full, four year scholarship," and that Congress's decision to increase the maximum

allowable amount of ROTC educational assistance from $2,000 to $3,400 in the Veterans Education

and Benefits Expansion Act (VEBEA) of 2001, Pub. L. 107-103, § 105, 115 Stat. 983 (codified in

part at 38 U.S.C. §§ 3011, 3012), supports these contentions. Br. at 6-7.

Contrary to the appellant's assertions, the text and structure of the statute make clear that the

clause "while participating in such program" refers only to the section 2107 program of educational

assistance. See Gardner v. Derwinski, 1 Vet.App. 584, 586 (1991) ("Determining a statute's plain

meaning requires examining the specific language at issue and the overall structure of the statute."),

aff'd sub nom. Gardner v. Brown, 5 F.3d 1456 (Fed. Cir. 1993), aff'd 513 U.S. 115 (1994); Johnson

v. Brown, 9 Vet.App. 369, 371 (1996) (When "'the plain meaning of a statute is discernible, that

"plain meaning must be given effect."'" (quoting Tallman v. Brown, 7 Vet.App. 453, 460 (1995)));

Smith v. Derwinski, 2 Vet.App. 429, 431 (1992) (If "a reviewing court 'find[s] the terms of a statute

unambiguous, judicial inquiry is complete except in rare and exceptional circumstances.'" (quoting

Demarest v. Manspeaker, 498 U.S. 184 (1991))). The record shows that the appellant was not

"specially selected" for section 2107's financial assistance program until July 1993, and that he did

not sign the NROTC Scholarship Service Agreement officially recognizing his appointment as a

section 2107 midshipman until August 1993. Thus, his participation in the NROTC as a College

Program Basic student during the 1992-1993 SY is simply not relevant to his eligibility for basic

4

educational assistance under the statute.2 The appellant has not identified anything in the legislative

history that would support a contrary interpretation, see Transco Prods. Inc. v. Performance

Contracting, Inc., 38 F.3d 551, 556 (Fed. Cir. 1994) ("When statutory interpretation is at issue, the

plain and unambiguous meaning of a statute prevails in the absence of clearly expressed legislative

intent to the contrary."), and he has not demonstrated that our application of the same would produce

an absurd result. See Gardner, 1 Vet.App. at 587 (noting the limited "'absurd result' exception to

the plain meaning rule"). Therefore, we must reject the interpretation urged by the appellant on

appeal. See Babbitt v. Oglala Sioux Tribal Public Safety Dep't, 194 F.3d 1374, 1378 (Fed. Cir.

1999) (stating that "we must assume that Congress 'says in a statute what it means and means in a

statute what it says there'" (quoting Conn. Nat'l Bank v. Germain, 503 U.S. 249, 254 (1992))); Tropf

v. Nicholson, 20 Vet.App. 317, 321 n.1 (2006) ("[A] functioning system of laws must give primacy

to the plain language of authorities . . . Without standard word meanings and rules of construction,

neither Congress nor the Secretary can know how to write authorities in a way that conveys their

intent and no practitioner or–more importantly–veteran can rely on a statute or regulation to mean

what it appears to say.").

B. Equitable Estoppel

The appellant argues that equitable estoppel bars the termination of his educational benefits,

because he detrimentally relied on VA's erroneously-issued January 2002 Certificate of Eligibility.

The Supreme Court has held that the Appropriations Clause of the Constitution, U.S. CONST. art. I,

§ 9, cl. 7, precludes the judiciary from ordering an award of public funds to a statutorily ineligible

claimant on the basis of equitable estoppel. See OPM v. Richmond, 496 U.S. 414, 430 (1990); see

also Utah Power & Light Co. v. United States, 243 U.S. 389, 408-09 (1917) (holding that "the

2

A section 2107 participant's eligibility for Chapter 30 educational benefits depends on the amount of financial

assistance he or she receives during each scholarship year, not on the total amount of financial assistance received or

the absence of such assistance during a non-scholarship period. W e acknowledge that this interpretation of the statute

may produce unfair results. For instance, a 4-year section 2107 recipient is eligible for additional Chapter 30 educational

benefits if, during any one of those 4 years, he or she received $3,400 or less in financial assistance. However, a 2-year

section 2107 scholarship recipient is not eligible for such benefits if, during both of those 2 years, he or she received

$3,401 in financial assistance. That being said, it is the responsibility of Congress, not the Court, to address any

unfairness in the statute as written. See Ciba-Geigy Corp v. United States, 223 F.3d 1367, 1373 (Fed. Cir. 2000) ("It

is Congress's task to change the words of the statute."); see also United States v. Missouri Pac. R.R. Co., 278 U.S. 269,

277-78 (1929) ("Inconvenience or hardships, if any, that result from following the statute as written, must be relieved

by legislation.").

5

United States is neither bound nor estopped by acts of its officers or agents in entering into an

arrangement or agreement to do or cause to be done what the law does not sanction or permit").

That precedent is controlling here. Accordingly, our determination that the appellant is not eligible

to receive basic educational assistance precludes an award thereof on the basis of equitable estoppel.

See OPM, 496 U.S. at 434. ("[I]t is enough to say that this Court has never upheld an assertion of

estoppel against the Government by a claimant seeking public funds.").

III. CONCLUSION

After consideration of the appellant's and the Secretary's briefs, and a review of the record,

the Board's July 15, 2005, decision is AFFIRMED.

KASOLD, Judge, concurring: I write separately to address what is a much too narrow view

by the Secretary of our jurisdiction. Specifically, the Secretary argues that the Court lacks

jurisdiction to even review Mr. Rosenberg's claim for equitable estoppel, ostensibly because we do

not sit as a court of equity. See Secretary's Brief (Br.) at 9.1

Although we are not a court of equity in the sense that we cannot render an award that is

contrary to law, this is true of all federal courts,2 see Immigration & Naturalization Serv. v.

Pangilinan, 486 U.S. 875, 883 (1988) ("[I]t is well established that 'courts of equity can no more

disregard statutory and constitutional requirements and provisions than can courts of law.'"(quoting

Hedges v. Dixon County, 150 U.S. 182, 192 (1893))); see also OPM v. Richmond, 496 U.S. 414, 434

(1990) ("[I]t is enough to say that this Court has never upheld an assertion of estoppel against the

Government by a claimant seeking public funds.").

Further, although we generally do not have jurisdiction to review the Secretary’s exercise

of his equitable authority under 38 U.S.C. § 503, see Harvey v. Brown, 6 Vet.App. 416, 425 (1994)

(recognizing that neither the Board nor the Court has jurisdiction to review the Secretary's exercise

1

Indeed, although OPM v. Richmond, 496 U.S. 414, 434 (1990) is controlling in this case, the Secretary fails

to cite to it in his written brief, relying instead on the assertion that we lack jurisdiction to hear the issue.

2

"There is no procedural distinction in federal court between suits in equity and suits at law." 27A A M .J U R .

2 D Equity § 4 (1996). See generally, the Fed. R. Civ. P. 1 (stating that these rules govern suits at law, equity, and in

admiralty); F ED . R. C IV . P. 2 (noting in federal courts there is one form of action called a "civil action").

6

of his equitable discretion),3 it does not follow that we lack the authority to review the arguments

made in this case, or any other arguments seeking equitable relief due to error on the part of the

Secretary. Indeed, as with any federal court, we have all the authority necessary to exercise

equitable jurisdiction and direct equitable relief not otherwise restricted by law. Cf. Pangilinan,

supra.

For example, early on the Court recognized its authority to review and consider the

application of equitable defenses. See Manio v. Derwinski, 1 Vet.App. 140, 143 (1991) (explicitly

stating our authority to consider application of equitable defenses, but rejecting the Secretary's

equitable defense of laches because this defense was not raised to the Board); see also Browder v.

Derwinski, 1 Vet.App. 204, 208 (1991) (concluding "that the VA benefits system as well as the

Veterans' Judicial Review Act both militate against the application of the doctrine [of laches] to

cases before this Court"). We also have the authority to issue decisions nunc pro tunc when equity

warrants such action, see Padgett v. Nicholson, 473 F.3d 1364, 1371 (Fed. Cir. 2007) (stating that

"nunc pro tunc relief is equitable in nature"); Seals v. Derwinski, 2 Vet.App. 190, 191 (1992)

(granting nunc pro tunc relief for a Notice of Appeal (NOA) timely filed via facsimile but without

a confirming NOA as required by the Court's Rules of Practice and Procedure), and we have the

equitable authority of "all courts established by an Act of Congress" granted by the All Writs Act.

See 28 U.S.C. § 1651(a); see Cox v. West, 149 F.3d 1360, 1363 (Fed. Cir. 1998); see also

Rosemount, Inc. v. U.S. Int'l Trade Comm'n, 910 F.2d 819, 821 (Fed. Cir. 1990) (stating that an

injunction is equitable relief); Ben-Shalom v. Secretary of the Army, 807 F.2d 982, 988 (Fed. Cir.

1986) (holding writ of mandamus is equitable relief).

Moreover, in furtherance of our broad authority over Board decisions and matters below

affecting Board decisions,4 the Court has applied equitable estoppel against the Secretary precluding

3

Not yet addressed is our authority to review allegations that the Secretary's actions under 38 U.S.C. § 503

violate the Constitution, e.g., discrimination violating the equal protection guaranteed by the Constitution. See 38 U.S.C.

§ 7261(1) (directing the Court to decide all relevant questions of, inter alia, constitutional interpretation, when necessary

and presented).

4

See 38 U.S.C. § 7252 (granting "exclusive jurisdiction to review decisions of the Board of Veterans' Appeals

. . . [and the] "power to affirm, modify, or reverse a decision of the Board or to remand the matter, as appropriate"). See

also 38 U.S.C. § 7261(a)(3)(A) (providing the full scope of our review authority, including, inter alia, the authority to

compel action of the Secretary "unreasonably delayed" and set aside decisions, rules, or regulations of the Secretary or

the Board that are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law").

7

him from asserting that a claimant's informal claim is not a "cognizable claim for effective date

purposes." Servello v. Derwinski, 3 Vet.App. 196, 200 (1992) (finding no evidence that the

Secretary fulfilled his statutory duty pursuant to 38 C.F.R. § 3.155(a) to provide the veteran with an

application form after receipt of an informal claim, the Court held that the Secretary "may not . . .

assert . . . that . . . [the] informal claim is not a cognizable claim for effective-date purposes"

(quoting Quarles v. Derwinski, 3 Vet.App. 129, 137 (1992))). We have also held that fair process

requires certain notifications. See Thurber v. Brown, 5 Vet.App. 119, 123 (1993) ("The entire thrust

of the VA's nonadversarial claims system is predicated upon a structure which provides for notice

and an opportunity to be heard at virtually every step in the process."). Remedial actions such as

these are not mandated by statute or regulation; they are equitable resolutions imposed by the Court.

Thus, Mr. Rosenberg's equitable estoppel argument fails not because the Court lacks

jurisdiction to review such an argument. Rather, assuming arguendo that equitable estoppel was

otherwise appropriate in this case, and it is not clear it would be,5 Mr. Rosenberg's argument fails

because a monetary award simply is not permitted by law. See OPM, 496 U.S. at 430 ("The whole

history and practice with respect to claims against the United States reveals the impossibility of an

estoppel claim for money in violation of a statute.").

5

"[A] party seeking to assert equitable estoppel must demonstrate that (1) the party to be estopped made a

'definite misrepresentation of fact to another person having reason to believe that the other [would] rely upon it'; (2) the

party seeking estoppel relied on the misrepresentations to its detriment; and (3) the 'reliance [was] reasonable in that the

party claiming the estoppel did not know nor should it have known that its adversary's conduct was misleading.'"

Ramirez-Carlo v. United States, 496 F.3d 41, 49 (1st Cir. 2007) (quoting Heckler v. Community Health Services,

467 U.S. 51, 59 (1984)).

8