Petition — Demarest v. United States

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No. FILED

JAN 18 ge

IN THE

Supreme Court of the United States.

October Term, 1983

STEPHEN H. DEMAREST,

Petitioner,

UNITED STATES OF AMERICA, et al,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

RONALD M. GOULD*

SUSAN BARLEY

Perkins, Coie, Stone,

Olsen & Williams

1900 Washington Bidg.

Seattle, Washington 98101

Telephone: (206) 682-8770

JOSEPH C. ZENGERLE

Bingham, Dana & Gould

1724 Mass. Avenue, N.W.

Washington, D.C. 20036

Telephone: (202) 822-9320

*Counsel of Record

Attorneys for Petitioner

QUESTION PRESENTED

Whether the denial of retained counsel to applicants for

veterans’ benefits, imposed by a $10 limit on attorneys’ fees

under 38 U.S.C. § 3404 and enforced by criminal sanctions,

is offensive to the Due Process Clause of the Fifth

Amendment of the Constitution.

LIST OF ALL PARTIES TO THE PROCEEDINGS

Petitioner is Stephen H. Demarest.

Respondents are the United States and the Veterans’

Administrati

iii

TABLE OF CONTENTS

Page

Pre . te 1

, ̃ ò Ü! 1

Constitutional Provisions and Statutes Involved 2

Dente TO COBO... ccc cece we cees 3

Reasons for Granting the Writ ................... 5

I. The $10 Attorneys’ Fees Limitation Violates the

SD FOUND 5 os wicks ces ccasesips ss 5

A. The Denial of Retained Counsel in Disability

Compensation Proceedings Before the

Veterans’ Administration Deprives

Applicants for Veterans’ Benefits of

Procedural Due Process................ 5

1. Applicants Have a Constitutionally

Protected Property Interest in Their

Statutory Entitlement to Disability

2. Denial of Retained Counsel Violates the

Process That Is Due Applicants for

Veterans Benefits 9

a. The applicant’s interest tt 10

b. The government’s claimed interest . 14

B. The $10 Attorneys’ Fees Limitation Imposed

by 38 U.S.C. § 3404 Also Violates

Substantive Due Process .............. 17

1. The Challenged Restriction Unjustifiably

Abridges a Fundamental Right 17

2. Alternatively, the Fees Limitation Has

SD. 20

Page

II. This Court Should Give This Case Plenary Review

Because of Its Importance to Veterans and Their

r avs ohh oa de Ran ee 20

r c abe ssh eee ae eee 22

Appendices

Appendix A—Opinion and Judgment of the Court of

e,, Oe ee ee eet ge Seok hs A-l

Appendix B—Opinion and Judgment of United States

District Court for the Western District of Washington B-1

Appendix C Findings d Decision of Board of Veterans

Appeals, Dated August 9, 19399 C-1

Appendix D—Excerpts from Annual Report of the

Veterans’ Administration, 1982, by Administrator of

Veterans’ Affairs, Pursuant to 38 U.S.C. § 214..... D-1

Appendix E—Excerpt from Statement of John F.

Terzano, Legislative Director of the Vietnam Veterans of

% whee cba en ae 4 tae E-1

TABLES OF AUTHORITY

Table of Cases

Adickes v. S.H. Kress & Co., 398 U.S. 144 (1970).... 17

Barnett v. Lindsay, 319 F. Supp. 610 (D. Utah 1970) 6,10

Blonder Tongue Laboratories, Inc. u. University of

Illinois Foundation, 402 U.S. 313 (1971).......... 17

Board of Regents v. Roth, 408 U.S. 564 (1972) .... 6,7,8

Bolling v. Sharpe, 347 U.S. 497 (1954) 20

Cafeteria & Restaurant Workers Union v. McElroy,

0 10

Carey v. Population Services International, 431 U.S. 678

D „ Van. hase 17

Page

Davis v. United States, ~

415 F. Supp. 1086 (D. Kan. 1976).......... 7-8,10,12

Devine v. Cleland, 616 F.2d 1080 (9th Cir. 1980) .... 6

Edelman v. Jordan, 415 U.S. 651 (1974)............ 9

Faretta v. California, 422 U.S. 806 (1975) ........ 13,18

Feres v. United States, 340 U.S. 135 (1950)......... 12

Gagnon v. Scarpelli, 411 U.S. 778 (1973) ........... 11

Gendron v. Saxbe, 389 F. Supp. 1303 (C. D. Cal. ), aff'd

sub nom. Gendron v. Levi, 423 U.S. 802 (10975) 4.8.9

Gideon u. Wainwright, 372 U.S. 335 (1963) 18

Goldberg v. Kelly, 397 U.S. 254 (1970) .5-6,8,10,15,19

Griffeth v. Detrich, 603 F.2d 118 (9th Cir. 1979)... .. 7

Heryford v. Parker, 396 F.2d 393 (10th Cir. 1968) ... 18

Hines u. Lowrey, 305 U.S. 85 (1938)............... 17

Hoffmaster v. Veterans’ Administration, 444 F.2d 192

rr t.... 17

Holley v. United States, 352 F. Supp. 175 (S. D. Ohio

%%% ey ere ee ae ²˙Gl.ͤ:ͤ̃̃ ũ ů—-̃ 18 17

Illinois v. Allen, 397 U.S. 337 (197h́ꝓ 13

In re Barnard, 455 F.2d 1370 (D.C. Cir. 1971)....... 18

nee 18

Johnson v. Robison, 415 U.S. 361 (1974) ........... 4,5

Kelly v. Railroad Retirement Bd., 625 F.2d 486 (1980) 7

Margolin v. United States, 269 U.S. 93 (1925)....... 17

9 Bd. of Retirement v. Murgia 427 U.S. 307 :

Morrissey v. Brewer, 408 U.S. 471 (1972) 4a 10

National Ass n of Radiation Survivors v. Walters, No.

e , h 4

Plato v. Roudebush, 397 F. Supp. 1295 (D. Md. 1975) 6

Powell v. Alabama, 287 U.S. 45 (1932)............. 19

Ramos v. Lamm, 359 F. Supp. 730 (D. Colo. 1982)... 14

Ressler v. Pierce, 692 F.2d 1212 (9th Cir. 1982) .... 7,10

Schneider v. Smith, 390 U.S. 17 (1968)............. 19

Shaw v. Weinberger, 395 F. Supp. 268 (W. D. N. C. 1975) 7

United Mine Workers v. Illinois Bar Ass'n, 389 217 (1967) 19

United States v. Carolene Products, 304 U.S. 144 (1938) 20

Wright v. Califano, 587 F.2d 345 (7th Cir. 1978)..... 7

Constitutional Provisions

a re ep -.. 2,20

Statutes

, NR CE 15

ELE CTE 14,20

, ͤ 20

D ee ees 12

, ̃ ͤ . ae wes Fie 1

SEE REDE POS gee AE 2,4,5

, . bene 6 Oa 7

USS. el 2.3.17

F 2.3

. one same 15

vii

Page

Rules and Regulations

, œ bos EES hia pes 0h Sob 0 Beet 9

, TT.... 9

Zgñ eo, caw we hice we a eet ees 12

,,,, A ˙ A ˙ 11

Other Authorities

Hearing. Herbicide Agent Orange, Before the

Subcomm. on Medical Facilities and Benefits of the

Comm. on Veterans’ Affairs, U.S. House of

Representatives, 95th Cong., 2d Sess. (June 20,1979) 9

Hearing. Veterans Claims for Disabilities for Nuclear

Weapons Testing.“ Before the Comm. On Veterans’

Affairs, U.S. Senate, 96th Cong., Ist Sess. (June 20,

%%%ͤœꝙẽ mi ⅛ mm ß le ob.) a 9

Hearings on S. 330 Before the Senate Committee on

Veterans Affairs, 96th Cong., Ist Sess. (1979) 15

21 C. Wright & K. Graham, Federal Practice and

,, 3 AG ca Oa ERO s aad uw ne che 11

IN THE

Supreme Court of the United States

October Term, 1983

No.

STEPHEN H. DEMAREST,

Petitioner,

UNITED STATES OF AMERICA, et al,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Petitioner Stephen H. Demarest ( Demarest) requests

that this Court issue a writ of certiorari to review the

judgment and opinion of the United States Court of Appeals

for the Ninth Circuit in this case.

OPINIONS BELOW

The opinion of the Court of Appeals, which is reported at

718 F.2d 964 (9th Cir. 1983), is Appendix A to this petition.

The decision of the United States District Court for the

Western District of Washington is Appendix B. The Findings

and Decision of the Board of Veterans Appeals is Appendix C.

JURISDICTION

The judgment of the Court of Appeals for the Ninth

Circuit was entered on October 20, 1983. This petition for

certiorari was timely filed and this Court’s jurisdiction

invoked under 28 U.S.C. § 1254.

CONSTITUTIONAL PROVISIONS

AND STATUTES INVOLVED

The Fifth Amendment to the Constitution of the United

States provides: No person shall be . . . deprived of life,

liberty, or property, without due process of law.

38 U.S.C. § 211 provides in part:

§ 211. Decisions by Administrator

(a) the decisions of the Administrator on any — question

of law or fact under any law administered by the {

n22U]u—— —ͤ—„— 442 and (air

dependents or survivors shall be final and conclusive and

no other official or any court of the United States shall

have power or jurisdiction to review any such decision by

an action in nature of mandamus or otherwise.

38 U.S.C. § 3404 provides in part:

§ 3404. Recognition of agents and attorneys generally

to agen 1 menage See section in

allowed claims for monetary benefits under laws

administered by the Veterans’ Administration. Such fees-

2 as prescribed b

the Administrator; “i N

S 650 URL retest to eny exo

claim; and

(3) shall be deducted from monetary benefits

claimed and allowed.

38 U.S.C. § 3405 provides:

§$ 3405. 2

charges.

for, or receive, any y io of compares

as in sections 3404 or 784 of this title, or (2)

— — bien any claimant of banbiiclary

any part of a benefit or claim allowed and due him, shall

be fined not more than $500 or imprisoned at hard labor

for not more than two years, or

STATEMENT OF THE CASE

Petitioner Demarest is an American veteran who suffered

two disabling injuries during his four year tour of duty with

the U.S. Air Force.

After his honorable discharge in 1980, Demarest applied

for benefits from the Veterans’ Administration (‘‘VA”’). The

VA determined that Demarest’s injuries were service

connected but denied his claim, finding that these injuries

were not disabling to a compensable degree.

Demarest sued in the United States District Court for

the Western District of Washington alleging that the VA

was arbitrary and capricious in denying his claim for

disability compensation. Demarest also challenged the

constitutionality of the statutorily imposed $10 limitation

on attorneys’ fees under 38 U.S.C. §§ 3404 and 3405. Because

of this limitation he was unable to pay and retain counsel

to represent him. 38 U.S.C. § 3404(c) limits to $10 per claim

the amount of attorneys’ fees payable for representation of

a veteran before the VA on a disability claim, and 38 U.S.C.

§ 3405 provides criminal (felony) penalties, including

imprisonment at hard labor, for violation of the attorneys’

fees limitation.

The District Court granted summary judgment for the

government, holding that it was without jurisdiction to

consider Demarest’s claims for benefits, and rejecting

Demarest’s contentions that the attorneys’ fees limitation

of 38 U.S.C. § 3404 violated his rights to due process and

1. Demarest commenced this action while attending law school and

represented himself pro se through the Court of Appeals. The undersigned

agreed to represent Demarest in this petition for a writ of certiorari.

Demarest has provided assistance in the drafting of

this petition.

equal protection, relying on Gendron v. Saxbe, 38y F. Supp.

1303 (C.D. Cal.), aff'd sub nom. Gendron v. Levi, 423 U.S.

802 (1975). App. B at 2.

The Court of Appeals affirmed, holding that the District

Court had no jurisdiction to consider Demarest’s challenge

to the VA’s disposition of his disability claims because 38

U.S.C. § 211(a) provides that all decisions of the VA

concerning veterans’ benefits are final; no federal court will

have jurisdiction to review them. App. A at 2. The appellate

court acknowledged that under Johnson v. Robison, 415 U.S.

361, 366-74 (1974), Section 211 did not bar constitutional

challenges to the veterans’ benefits laws and therefore

presented no jurisdictional barrier to Demarest’s challenge

to the statutory attorneys’ fees limitation. App. A at 3.

Rejecting Demarest’s contention that these provisions

violated his right to due process in consideration of his

disability claims before the VA, the Court of Appeals held

that this Court’s summary affirmance in Gendron v. Levi,

423 U.S. 802 (1975), aff g sub nom. Gendron v. Saxbe, 389

F. Supp. 1303 (C.D. Cal. 1975), was controlling. App. A at

3-6. The summary judgment was vacated and remanded for

entry of judgment of dismissal for lack of jurisdiction on

Demarest’s claim for benefits and the remainder of the

judgment, rejecting the constitutional challenge to the fees

limitation, was affirmed. App. A at 6.“

2. Another action challenging the $10 fee limit, as applied to particular

complex claims, is pending in the Northern District of California. National !

Ass'n of Radiation Survivors v. Walters, No. C-83-1861-MHP N. D. Cal.)

(defendant’s motion to dismiss denied, Oct. 21, 1983; decision on

publication pending).

REASONS FOR GRANTING THE WRIT

I. The 810 Attorneys’ Fees Limitation Violates the Due

Process Clause.

A. ü ee ee Oe

pensa Proceedings ore eterans’

ministration Deprives Applicants for Veterans’

Benefits of Procedural Due Process.

Procedural due process imposes a constraint on

governmental power to deprive individuals of liberty or of a

property interest within the meaning of the Due Process Clause

of the Fifth Amendment. This mandate fundamentally includes

procedural protections to ensure a fair hearing before

governmental benefits are denied or terminated.

The VA is a governmental agency with unique powers.

VA decisions on claims for veterans’ benefits are final; 38

U.S.C. § 211(a) provides that the decisions of the VA are not

subject to judicial review.’ For this reason the need to ensure

fairness within the administrative process is compelling. The

right to retain independent legal counsel is essential to ensure

fair hearings and a perception of fairness.

1 5 In — Their — —

terest t

te Naabate Benefits.

In Goldberg v. Kelly, 397 U.S. 254 (1970), this Court held

that welfare recipients have a property interest in welfare

benefits and are entitled to certain procedural protections

before termination of their benefits. [Sluch benefits are a

matter of statutory entitlement for persons qualified to

3. In the courts below Demarest challenged the constitutionality of

the statutory provision precluding judicial review. Because Johnson v.

Robison, 415 U.S. 361 (1974), upholds the constitutionality of the

prohibition of judicial review of benefits’ decisions in particular cases,

this issue is not raised in this petition.

The Senate has passed a bill, S. 636, 98th Cong., Ist Sess. (1983), to

provide judicial review of VA decisions on benefit claims; bills H.R. 1959

and H.R. 3300 on this subject are now pending in the House of

Representatives.

receive them. Jd. at 262. Recipients were entitled to a pre-

termination hearing with notice, which included the right to

be represented by retained counsel. Jd. at 270-71.

In Board of Regents v. Roth, 408 U.S. 564 (1972), an

assistant professor hired for the term of one year alleged that

he possessed a property interest in continued employment.

This Court denied his property interest, holding:

To have a property interest in a benefit, a person clear!

sunes bebe tales Chan rr

He must have more than a unilateral expectation of it.

1 instead, have a legitimate claim of entitlement

to it...

Thus, the welfare recipients in Goldberg v. Kelly, supra,

Grounded in the statute defining eligthalcy for thacn. The

sta y for

recipients had not yet shown that were, in fact,

wi — yey heme atta oo ay ——

yg aaa might attempt

to do so.

Id. at 577.

These rules have been applied to the VA, in a decision

that VA benefits cannot be terminated without a pre-

termination hearing because the recipients had a protected

y interest. Plato v. Roudebush, 397 F. Supp. 1295,

1308 (D. Md. 1975). See also Devine v Cleland, 616 F.2d 1080

(9th Cir. 1980).

This Court’s recognition that individuals with a statutory

entitlement have a constitutionally protected interest has

been extended to applicants for statutory benefits. In many

administrative contexts, courts have held that applicants,

like recipients threatened with termination, have a property

interest based on statutory entitlement to benefits.‘ More

4. Barnett v. Lindsay, 319 F. Supp. 610, 612 OD. Utuh 1970) (under

Goldberg summary denial of welfare assistance cannot be distinguished

from summary termination. welfare applicant has statutory entitlement

property interest, and procedural protections found in Goldberg apply

to all stages of weifare process ‘‘whenever the proposed administrative

action contemplates the denial or termination of statutorily created

specifically, applicants for disability compensation benefits

have been found to have a property interest.“

38 U.S.C. § 331 outlines the requirements for the

awarding of veterans’ disability benefits under the heading

Basic Entitlement.’’ The applicant must establish active

duty military service, a discharge other than dishonorable,

and a service-connected disability that was not the result

of his or her own willful misconduct.

Demarest completed four years of active duty service and

was honorably discharged. During his service he suffered

personal injuries and was disabled. The VA made a line of

duty determination, established service connection and

concluded that willful misconduct was not involved.

Demarest thus has a legitimate claim of entitlement based

on statutory eligibility requirements for veterans’ disability

benefits. The government cannot deprive him of this property

interest without due process of law.

Footnote 4 (Con't)

welfare benefits; Shaw v. Weinberger, 395 F. Supp. 268 (W. D. N. C. 1975)

(applicant for Social Security income possesses property interest despite

discretion left to Secretary); Wright v. Califano, 587 F.2d 345, 354 (7th

Cir. 1978) (‘‘denials [of Social Security benefits] do not necessarily deserve

less due process than terminations”’); Griffeth u. Detrich, 603 F.2d 118,

121 (9th Cir. 1979) (‘authorizing statute coupled with the implementing

regulations of the county creates a legitimate claim of entitlement and

expectancy of benefits in persons who claim to meet the eligibility re-

quirements (for general relie{]"’); Ressler u. Pierce, 692 F.2d 1212, 1215

(9th Cir. 1982) (Roth, Griffeth mandate that applicants for subsidized hous-

ing have a property interest because of standards determining eligibility).

5. For example, in Kelly v. Railroad Retirement Bd. 625 F. 2d 486, 489

(1980), the Third Circuit held that due process attaches to the determina-

tion of eligibility at application for, or after receipt of, disability benefits.

Similarly, in Davis v. United States, 415 F. Supp. 1086, 1090-91 (D.

Kan. 1976), the court analyzed the property interest of an applicant for

disability berefits for injuries allegediy suffered while employed in a

federal prison hospital:

Te applicant's interest consists of a claim authorized by statute

and regulations to secure compensation for alleged employment

The three judge district court in Gendron v. Saxbe, 389

F. Supp. 1303, followed by the Ninth Circuit here, held that

the plaintiff did not possess the requisite property interest

in veterans’ benefits. 389 F. Supp. at 1306. Gendron may

have interpreted the property interest defined in Goldberg

and Roth to encompass only recipients of veterans’ benefits

and not applicants. But this cannot properly be reconciled

with Goldberg and Roth, nor with the consensus of judicial

opinion. See notes 4, 5, supra.*

Footnote 5 (Con't)

disabilities of prison origin that may severely restrict, and sometimes

eradicate, his earning potential upon release into society. Although

at the application stage of the proceedings neither plaintiff nor a

claimant in his position has yet been administratively adjudged

entitled to receive benefits under the regulatory scheme, an applicant

nonetheless possesses a property interest of sufficient magnitude to

invoke the protection of the Fifth Amendment's due process clause.

This property interest is one of substantial importance to the

plaintiff, as its arbitrary denial could leave him with an

uncompensated disability of lifelong duration and condemn him to

“suffer grievous loss.”

(citations omitted) (emphasis added). The court rejected the government's

arguments that applicants for statutory benefits are unworthy of due

process protection, observing: ‘‘Indeed, other language in Roth itself

expressly foreclosse such a restrained interpretation of « legitimate

property interest. Id.

6. The Gendron district court opinion can also be read to hold only

that the plaintiff in that case, who had not proven a service connection

for his alleged disability, had no property interest. 389 F. Supp. at 1306.

That case is inapplicable here because the service connection for

Demarest's injuries was established.

The Ninth Circuit found this important distinction irrelevant, App.

A at 465, and held that the Supreme Court s affirmance of Gendron

‘necessarily’ represents one of two conclusions: that Gendron did not

have a constitutionally protectibie l- ie] property interest in the disability

benefits sought,’ or, alternatively, the Court may have concluded that

veteran's right to procedural due process.’ App. A at 5.

In addition to Gendron's different facts and its possibly erroneous

treatment of applicants interests, certain novel and complex bases for VA

This Court in Goldberg established that property rights

based on statutory entitlement to benefits are protected by

the Due Process Clause of the Fifth Amendment. Federal

courts have almost universally held that applicants for

statutory entitlements also have a protected property interest.

This Court on plenary review should confirm that principle.

2. Denial of Retained Counsel Violates the Process

That Is Due Applicants for Veterans’ Benefits.

Because Demarest has the requisite property interest, the

inquiry shifts to what process is due based on a flexible

Footnote 6 (Con't)

disability claims as to which the assistance of counsel would be

particularly important, see p. 11 infra, had not emerged in any significant

way by the time of the Gendron decision in 1975. For example, the first

congressional hearing on the effect of veterans’ exposure to the herbicide

used in the Vietnam war and containing the deadly contaminant dioxin,

known commonly as Agent Orange, was not held until 1978. Hearing,

“Herbicide Agent Orange Before the Subcomm. on Medical Facilities

and Benefits of the Comm. on Veterans’ Affairs, U.S. House of

Representatives, 95th Cong., 2d Sess. (Oct. 11, 1978). The first

Congressional hearing on the effect of veterans’ exposure to atomic

radiation was not held until 1979. Hearing. Veterans Claims for

Disabilities for Nuclear Weapons Testing. Before the Comm. on Veterans

Affairs, U.S. Senate, 96th Cong., Ist Sess. (June 20, 1979). And the

Psychiatric

Statistical Manual of Mental Disorders (3rd ed., 1980). VA regulations

require that mental disorders, including those used as a basis for benefits

claims, be diagnosed in accordance with this manual. 38 C. F. R. §§ 4.125

and 4.126. These developments should be taken into account in

determining the requirements of due process, a constitutional doctrine

that must be applied flexibly to accommodate changing conditions.

Finally, even if Gendron is controlling in the Ninth Circuit, this Court

has never given plenary review to the issues of the procedural protections

due applicants for veterans benefits. A summary affirmance has relatively

little precedential weight for this Court. As explained in Massachusetts

Bad. of Retirement u Murgia, 427 U.S. 307, 308 n.1 (1976): Our cursory

consideration in those cases (summary affirmances| does not, of course.

foreclose this opportunity to consider more fully that question. See

Bdeiman u. Jordan, 415 U.S. 661, 670-71 (1974).

balancing test weighing the interests of applicants for

veterans’ benefits and the government. See. e. g., Mathews

v. Eldridge,424 U.S. 319, 334-35 (1976); Cafeteria &

Restaurant Workers Union v. McElroy, 367 U.S. 886, 895

(1961); Morrissey v. Brewer, 408 U.S. 471, 481 (1972);

Goldberg v. Kelly, 397 U.S. at 263-71.

a. The applicant’s interest

The $10 fees limitation denies veterans retained counsel

absent representation pro bono publico. The government

must concede that a $10 fees limitation practically prohibits

a disabled veteran or a survivor from retaining any counsel

who wish to be compensated for services.

The ability to retain counsel is a major part of procedural

due process in an administrative setting. In Goldberg this

Court held that the pre-termination hearing included a right

to be represented by counsel:

The right to be heard would be, in many cases, of little

avail if it did not com — Fy ght ht

counsel. [Powell v. Aldine, 287 U.S. 45, 68-69 (1932).

termination hearing, but only that the recipient must be

allowed to retain an attorney if he so desires. Counsel can

help delineate the issues, present the factual contentions

in an orderly manner, conduct cross-examination, and

generally safeguard the interests of the recipient.

397 U.S. at 270-71.

Federal courts have reached similar conclusions in various

administrative settings. To illustrate, in Ressler v. Pierce.

692 F.2d 1212, 1219 (9th Cir. 1982), the Ninth Circuit held

that an applicant for public housing has a due process right

to retain and be represented by an attorney. In Barnett v.

Lindsay, 319 F. Supp. 610, 612 (D. Utah 1970), the court

process, including application. In Davis v. United States, 415

F. Supp. 1086 (D. Kan. 1976), the court held that a former

prison inmate applying for disability compensation had a

constitutional right to retain an attorney. Thus there is a

recognized procedural right to use retained counsel in

administrative hearings.’

If applicants for benefits have a procedural right to a

hearing on their entitlement, they have a right to a

meaningful hearing grounded on fair procedures. The aid of

retained counsel for an applicant for veterans’ benefits is

conducive to reliable determination of entitlement to benefits.

A lawyer may marshal facts, ensure that important rights

are not waived or abandoned, and advance the applicant’s

interest on questions of regulatory interpretation and law.

Claims may encompass difficult substantive issues of medical

proof and causation. The 1982 Annual Report of the VA also

notes increasingly complex claims for Agent Orange, atomic

radiation, prisoners of war, and post-traumatic stress

disorders. See App. D at 5-6. Even in relatively routine

disability cases like that of Demarest, many complex issues

of regulatory law and proof are presented, as may be seen

by a review of the Findings and Decision of the Board of

Veterans Appeals on Demarest’s claim. See App. C and note

6, supra.“

7. Gagnon v. Scarpelli, 411 U.S. 778, 787-91 (1973), rejecting a general

requirement of counsel in probation revocation hearings is not to the

contrary because that case involved the issue of appointed, not retained,

counsel. As this Court there stated:

Since respondent did not attempt to retain counsel but asked only

for appointed counsel, we have no occasion to decide in this case

whether a probationer or parolee has a right to be represented at a

revocation hearing by retained counsel in situations other than those

where the State would be obliged to furnish counsel for an indigent.

Id. at 783 n.6.

8. This action was commenced in the federal district court before the

final decision of the Board of Veterans Appeals (“BVA”), in App. C. was

rendered. The Ninth Circuit, by its Order Denying Appellant's Post-

Argument Motion (filed September 26, 1983), denied Demarest’s motion

to file a supplemental brief after argument containing facts and law

including the BVA decision entered August 9, 1983, and so the BVA's

decision is not of record. However, this Court may take judicial notice

of the BVA decision. F. R. E. § 201(b\2). See 21 C. Wright & K. Graham,

Federal Practice and Procedure, § 5106, at 506 (The most frequent use

These principles apply with even greater force because

veterans disabled through military service may have lost all

or much of their ability to earn a living. [Alxbitrary denial

could leave [a veteran] with an uncompensated disability of

lifelong duration and condemn him to ‘suffer grievous loss.

Davis, 415 F. Supp. at 1091 (citation omitted). Also, veterans

cannot sue under the Federal Tort Claims Act for disabilities

resulting from military service. Feres v. United States, 340

U.S. 135 (1950). Compensation from the VA is generally their

sole remedy for service-connected disabilities. Perhaps more

importantly, the VA’s decision is final. See note 3, supra.

In Davis, the court stressed the exclusive nature of the

administrative remedy in reaffirming a right to a hearing

and representation of counsel:

Since 18 U.S.C. § 4126 2 the exclusive remedy er

collection of benefits by an inmate, a claimant has n

other taeums ‘of sedress should he be tho vistim of on

arbitrary denial and thus may be condemned to endure

the draconian effects of an uncompensated disability.

415 F. Supp. at 1099.

In contrast to the simple procedural process of applying

for veterans’ benefits in the 1860’s when the attorneys’ fees

limitation was instituted, the modern application process is

complex. In the event of denial of a claim, the applicant must

then file a Notice of Disagreement and formulate a basis for

an Appeal from the Statement of the Case provided by the

VA. See 38 C. F. R. §§ 4005 et. seg. The Appeal must conform

to regulatory requirements or risk dismissal.

Veterans’ service organization representatives who assist

applicants for veterans’ benefits are doubtless able and well

motivated. But without legal training these representatives

may be unable to represent veterans effectively in particular

cases. They may or may not perceive relevant legal issues

Footnote 8 (Con't)

of judicial notice of ascertainable facts [under F. R. E., § 201 (b is in

noticing the content of court records. ). Accordingly, we have included

that decision as App. C.

and they certainly are disadvantaged, as contrasted with

lawyers, in marshalling facts and arguments in aid of the

applicant. By contrast, it is undisputed that the VA employs

legal counsel to process claims. See VA 1982 Annual Report,

App. D at 7 (Among the 17 sections there were 33 legal

. . members. Supporting the sections [were] . 107 staff

attorneys ....”). And it therefore seems fair to conclude that

permitting applicants for veterans’ benefits to retain counsel

to assist them can only aid in a fair resolution of claims and

increase the reliability of the claims determination process.“

Moreover, the option to choose to retain independent

counsel will also enhance veterans’ perceptions of the fairness

of the proceedings. Applicants will better appreciate the

fairness of the agency process if they have the option to

retain counsel who can advise them of its legal adequacy.

Institutions that are closed to such scrutiny do not foster

the essential sense of fairness that public bodies must seek

to promote.

The interest of veterans in retaining counsel when they

deem it appropriate also raises an issue of transcending

importance, the right of informed choice in a free society.

Institutions or procedures that threaten personal liberty and

free, informed choice should be suspect. Our Constitution

does not favor statism over the dignity of the individual.“

9. Although some veterans’ service organizations who provide service

representatives on claims in the VA may not urge a need for counsel, other

veterans’ organizations support the right to choose to retain counsel. See

Congressional testimony of John F. Terzano of Vietnam Veterans of

America, App. E.

10. As this Court has stated in Faretta v. California, 422 U.S. 806

(1975), while finding that a criminal defendant has a Sixth Amendment

right to conduct his own defense, ‘‘whatever else may be said of those

who wrote the Bill of Rights, surely there can be no doubt that they

understood the inestimable worth of free choice. 422 U.S. at 833-34. Such

choice must be honored out of that respect for the individual which is

the lifeblood of the law. 422 U.S. at 834 (citing Illinois v. Allen, 397 U.S.

337, 350-51 (1970) (Brennan, J., concurring)).

b. The government’s claimed interest.

The government has defended the attorneys’ fees limita-

tion as a protection for applicants to avoid depletion of

benefits awarded. The claimed interest is one of the appli-

cant, asserted by the government. All the petitioner seeks

is the right to retain counsel at his own expense, not to have

the government provide such counsel. The government pro-

tests that it is protecting veterans from having to share their

benefits with attorneys, and asserts that adequate represen-

tation by service organizations renders attorneys for veterans

unnecessary. But this paternalism is misplaced where

benefits have been denied to veterans who believe that their

best interests would have been better served had they had

the option of retaining counsel to represent them. Also, the

statute does not merely limit depletion of benefits; it even

prohibits veterans from paying their counsel with their own

funds to gain better representation.

The many instances in which retention of counsel is

allowed in similar administrative proceedings diminish the

credibility of the government’s asserted interest. Moreover,

in contrast to the government’s claimed concern for the

veterans who must rely solely on disability benefits from the

VA, qualified officers and enlisted personnel may use counsel

to seek military retirement or separation benefits under 10

U.S.C. § 1201 et seg. See note 14, infra. Finally, the

government’s asserted interest is certainly unusual, and is

contradicted by the congressional policies expressed in many

other contexts where not only are retained counsel permitted

but also an award of attorneys’ fees is made possible by

statute, thus facilitating the use of counsel. For a list of

federal statutes authorizing award of attorneys’ fees in

dozens of contexts, see Appendix A in Ramos v. Lamm, 359

F. Supp. 730, 755-57 (D. Colo. 1982).

Even if the government has a legitimate interest in

limiting recovery for attorneys, such limitation must be

reasonable and not act as an effective prohibition against

counsel. Certainly, less drastic alternatives are available to

guarantee that veterans’ disability benefits not be depleted

unreasonably during VA proceedings. In similar contexts,

statutory limitations on the award of attorneys’ fees have

been established on bases that protect claimants while per-

mitting the retention of counsel. As examples, under the

Social Security Act attorneys’ fees must be court approved

and are limited to 25 percent of the past due benefit recovery,

42 U.S.C. § 406(b)(1); the Federal Tort Claims Act imposes

a similar percentage limit on fees, 28 U.S.C. § 2678; the

Federal Employees’ Compensation Act provides a similar

reasonable restriction, permitting attorneys’ fees when ap-

proved”’ by the Secretary, 5 U.S.C. § 8127(b). Similarly, each

of three bills that have passed in the Senate relating to VA

disability proceedings have provided for the Administrator

of Veterans’ Affairs to approve reasonable attorneys’ fees.

S. 330, 96th Cong., Ist Sess. (1979); S. 349, 97th Cong., 2d

Sess. (1982); S. 636, 98th Cong., 1st Sess. (1983). These bills

show both that less restrictive means may advance the

asserted governmental interest and that Congress, for

whatever reasons, has been unable to adopt them.

It may be inevitable that if removal of the attorneys’ fees

limitation results in more successful claims because of more

effective representation of applicants’ interests, government

expenditures will increase. But denial of valid claims because

of inadequate representation is not a legitimate government

interest, and has not been urged by the government. The

possibility of any increased administrative cost resulting

from increased effective hearings might be worthy of some

consideration, but would not here justify a denial of increased

procedural protection that surely would enhance the

reliability of determinations. Goldberg, 397 U.S. at 266.

The historical antecedents of the challenged attorneys’

fees limitation undercut the current viability of the interest

now asserted by the government in denying retained counsel

to applicants. When set in earlier times, the dollar limit may

11. See generally Hearings on S. 330 Before the Senate Committee

on Veterans’ Affairs, 96th Cong., Ist Sess.(1979). The weight of historical

evidence discussed shows an intent to facilitate the use of lawyers in aid

not have precluded and perhaps facilitated the proper use

of counsel, guarding only against fraud and overreaching.

In consideration of the value of today’s dollars the limit no

longer regulates but precludes retained counsel. The

organized bar has developed procedures to avoid fraud or

overreaching, eliminating any substantial justification on

that ground. See ABA Model Code of Professional

Responsibility, ABA Model Rules of Professional Conduct

and related state bar associations’ codes of professional

responsibility. Thus the impact of the fee limitation has

become ill-advised, draconian in application and unfair in

concept. If ever this law was justified, it now is not needed.

A realistic, reasonable limitation on attorneys’ fees could

serve all legitimate government interests to the satisfaction

of everyone, while permitting disabled veterans or their

survivors the procedural right to retain counsel paid from

their own funds if desired.

* * *

The interests of applicants for veterans benefits in

retaining a lawyer outweigh any interests of the VA in

denying applicants that option.

This Court should grant review to evaluate the pertinent

interests and to determine what process is due applicants

in VA disability proceedings.

Footnote 11 (Con’t)

of the essentially clerical preparation of claims, before the development

of modern procedural and substantive complexities, while guarding

against fraud by claims agents and attorneys who were apparently

charging the upper limit of fees for work that was essentially clerical in

nature Id. at 17. Historical references mention ‘‘mercenary claim agent

leeches," and sharks who prey upon pensioners.” Id. at 16-17. Thus the

intent of Congress seems to have been only to cure excess without

impairing the use of attorneys for what was then largely clerical

assistance. The fee limit today precludes aid of counsel even on initial

application for claims. Moreover, insofar as there may have been an intent

to exclude attorneys from presenting claims apart from filing the forms,

such intent could no longer be appropriate for the reasons discussed herein

and seems also to be an affront to the recognized value of retained counsel

in civil matters.

B. The $10 Attorneys’ Fees Limitation by 38

U.S.C. § 3404 Also Violates Substantive Process.

The attorneys’ fees limitation imposed by 38 U.S.C § 3404

impermissibly restricts the rights of veterans and their

survivors to retain counsel in violation of substantive due

process. This Court never has decided the substantive due

process constitutionality of the attorneys’ fees limitation as

it pertains to veterans denied the right to retain counsel.”

1. The Challenged Restriction Unjustifiably

Abridges a Fundamental Right.

Where a government act infringes a fundamental right,

due process requires that the act be justified by a compelling

interest and be narrowly drawn to serve that precise interest.

E. g., Carey v. Population Services International, 431 U.S.

678, 686 (1977). This Court has implicitly recognized that

the right to retain counsel in an administrative hearing is

fundamental, and now should expressly so hold.

12. Where issues are neither raised before nor considered by the Court

of Appeals, this Court ordinarily will not consider them. Adickes v. S.H.

Kress & Co., 398 U.S. 144, 147 n.2 (1970). Demarest raised a due process

claim below, albeit procedural due process. Whether this Court generally

would require specific due process grounds to be raised below, it retains

the power to decide this issue. Blonder Tongue Laboratories, Inc. v.

University of Illinois Foundation, 402 U.S. 313, 320 n.6 (1971). There is

no issue of comity with the states since the case arises on review from

the federal courts.

This Court has held predecessor statutes constitutional as enforced

against attorneys who were paid an amount in excess of the statutory

allowance. Hines v. Lowrey, 305 U.S. 85 (1938); Margolin v. United States,

269 U.S. 93 (1925). Those decisions of this Court are inapposite, involving

no veteran's claim of a right to retained counsel, and contain no significant

constitutional analysis because they were written before this Court’s

refinement of the due process principles applicable here. Hines and

Margolin have been incorrectly cited and followed without analysis in

Hoffmaster v. Veterans’ Administration, 444 F.2d 192 (3d Cir. 1971) and

Holley v. United States, 352 F.Supp. 175 (S.D. Ohio 1972), which rejected

veterans’ challenges to the constitionality of the attorneys’ fees limitation.

From the founding of this country, the importance of the

right to retain counsel has been recognized:

Either 2 . has a natural right to plead his own

cause; t right i is consistent with safety, therefore it is

retained; but the A oe may not be ab e, ... therefore

the civil right of pleading by proxy, that is, by a council

[sic], is an ap * to the natural right [of self -

representation] .

Thomas Payne on a Bill of Rights, 1777,“ reprinted in 1B

Schwartz, The Bill of Rights: A Documentary History, n.37,

at 316 (1971), quoted in Faretta v. California, 422 U.S. 806,

830 n.37 (1975).

In the criminal context, Gideon and its progeny highlight

the importance of the right to be represented by appointed

counsel: ‘“‘This noble ideal [to assure fair trials] cannot be

realized if the poor man charged with crime has to face his

accusers without a lawyer to assist him. Gideon v.

Wainwright, 372 U.S. 335, 344 (1963).

This Court’s decision in In re Gault, 387 U.S. 1 (1967),

in the setting of the juvenile court system, recognized that

unrepresented persons in noncriminal proceedings involving

the risk of loss of liberty were constitutionally entitled to

the assistance of counsel. This Court stressed:

juvenile needs the assistance of counsel to cope with

— of og to make skilled inquiry into weber facts,

to insist u a 4 y of the proceedings,

ascertain whether er

5 A 1

at every irrer against him [citing

„ v. "A 287 U.S. 45 (1932)}.

387 U.S. at 36.

The Supreme Court’s endorsement in Gault of the right

to appointed counsel in noncriminal proceedings that

threaten liberty was followed in Heryford v. Parker, 396 F.2d

393 (10th Cir. 1968), and in Jn re Barnard, 455 F.2d 1370

(D.C. Cir. 1971), in involuntary commitment proceedings.

An even broader rule applies to the right asser ted here

to use retained counsel. This case does not involve any issue

of appointed counsel, but, instead, solely the issue of a

procedural right of veterans to retain counsel of their choice

to be paid from their own funds. The right to a retained

attorney in all civil cases always has been assumed. As

Justice Sutherland emphasized in Powell v. Alabama, 287

U.S. 45, 69 (1932):

„5

emplo ,

aot be doobael that such a refusal would be a denial of

a hearing, and, therefore, of due process in the

constitutional sense.

This Court also has endorsed the fundamental benefits

of and the right to retained counsel in the civil administrative

context. As Goldberg v. Kelly stressed:

“The right to be heard would be, in many cases, of little

avail, if it did not comprehend the right to be heard by

counsel. We do not say that — must be provided

at the pre-: termination hearing, but only that the recipient

must be allowed to retain an attorney if he so desires.

Counsel can help delineate the issues, present the factual

contentions in an orderly manner, conduct cross-

examination, and generally safeguard the interests of

the recipient.

397 U.S. at 270-71 (citation omitted).

In view of the longstanding recognition of the importance

of the right to counsel in our society, restrictions on that

right should be given strict scrutiny. And clearly the

government’s alleged interest in avoiding depletion of

veterans’ benefits is not compelling. While Congress may

have an interest in limiting the amount paid to a lawyer by

13. The fee limitation statute also infringes upon separate and distinct

fundamental First Amendment rights such as speech, association, and

the right to petition. See, e.g., United Mine Workers u. Illinois Bar Ass'n,

389 U.S. 217, 222-23 (1967); Schneider v. Smith, 390 U.S. 17, 25 (1968).

This infringement of First Amendment rights also warrants

strict scrutiny.

a veteran seeking disability benefits, the $10 fees limitation

is arbitrary. An aim to prevent excessive attorneys’ fees paid

by veterans is not even rationally served by the $10 restric-

tion which prohibits any reasonable fees and thereby effec-

tively bars retained counsel. The statute’s prohibition is gross-

ly overinclusive, and its goals can be served by less drastic

and restrictive means. See discussion, supra, at 14-16.“

2. Alternatively, the Fees Limitation Has No

“Rational Basis.“

If the right to retain counsel is not fundamental, there

still should be heightened scrutiny because of the important

interests at issue. But even under the least rigorous review,

for the reasons stated above this Court should decide that

the fees limitation is not supported by a rational basis.

See, e.g., United States v. Carolene Products, 304 U.S. 144

(1938).

II. This Court Should Give This Case Plenary Review

Because of Its Importance to Veterans and Their

Beneficiaries.

The importance of this case is enhanced by the number

of disabled veterans, beneficiaries and survivors that are af-

fected by the prohibitive attorneys’ fees limitation.

14. Refuting the government's asserted interest, no similar govern-

ment solicitude exists with respect to benefits for retirement or separa-

tion from the military due to physical disability under 10 U.S.C. § 1201

et seq. On claims for such benefits, attorneys may be retained and paid

without restriction throughout the administrative process, which ends

when a claimant secures a decision from an appropriate Board for Cor-

rection of Military Records (“‘BCMR”’), 10 U.S.C. § 1551 et. seq., and any

subsequent judicial process, since decisions of the BCMRs are not, unlike

those of the VA, barred from judicial review. This disparate treatment

of categories of former military personnel raises independent issues of

“equal protection” as incorporated in the Fifth Amendment s Due Pro-

cess Clause. E.g., Bolling v. Sharpe, 347 U.S. 497 (1954).

As a practical matter, while claims for benefits based on disabilities

arising out of past military service may be made either to the VA or a

BCMR, various reasons make the VA claim the overwhelming preference

of claimants. For example, military disability benefits depend on the rank

the claimant held, see 10 U.S.C. §§ 1212 and 1401 (pay calculations start

with “monthly basic pay J, while VA benefits are unrelated to rank.

In 1982, more than 2.6 million veterans and survivors

(2,274,634 disability compensation cases and 350,357 service-

connected death cases) received compensation from the VA

for service-connected death and disability claims. Annual

Report of the Veterans’ Administration, 1982 at 69.“

At the end of fiscal year 1982 there were 59,776 appeals

from denial of benefits pending before the VA’s Board of

Veterans’ Appeals. During fiscal year 1982 the VA disposed

of 61,352 appeals: 21.3 percent were allowed, 41.4 percent

were denied, and the rest were withdrawn or closed. In these

appeals 86 percent of the appellants were represented by a

service organization, and only two percent were represented

by claims agents, some of whom were attorneys. 12 percent

had no representation. Jd. at 138-139.

Veterans or their survivors, and their beneficiaries, bear

the consequences of an administrative determination

concerning their claims for disability compensation. They,

therefore, are entitled to make an informed choice to retain

counsel to represent them, subject only to reasonable

limitations on counsel’s fees.

The sacrifices veterans make for their country need no

recitation here. Those sacrifices demand that any law which

impairs the relationship that veterans may have with the

agency mandated to serve their needs be subject to the most

careful scrutiny, else unequal and unlawful conditions on that

relationship could demean what it is intended to honor.

This Court should now decide, upon a full review, whether

each disabled veteran has a due process right to retain

counsel in VA disability proceedings.

15. Veterans of military service comprise 28.5 million Americans, and

potential beneficiaries of veterans’ benefits number 83.8 million people,

36 percent of our Nation's population. Annual Report of the Veterans

Administration, 1982 at 1, 5, reproduced in App. D at 1, 4.

CONCLUSION

For the reasons stated, the petition for a writ of certiorari

to review the decision of the Court of Appeals should be

granted.

Respectfully submitted,

RONALD M. GOULD*

SUSAN BARLEY

Perkins, Coie, Stone,

Olsen & Williams

1900 Washington Bldg.

Seattle, Washington 98101

Telephone: (206) 682-8770

JOSEPH C. ZENGERLE

Bingham, Dana & Gould

1724 Mass. Avenue, N.W.

Washington, D.C. 20036

Telephone: (202) 822-9320

*Counsel of Record

Attorneys for Petitioner

APPENDIX A

IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

STEPHEN H. DEMAREST, Na 83-3649

Plaintiff-Appellant, ) DC.#C82-364T

vs. )

UNITED STATES OF AMERICA, ) >

Defendant-A ppellee. ) (Filed October

) 20, 1983)

Appeal from the United States District Court

for the Western District of Washington

District Judge Jack E. Tanner, Presiding

[Argued and Submitted August 3, 1983]

Before: WRIGHT, SKOPIL, and POOLE, Circuit Judges.

WRIGHT, Circuit Judge:

Demarest’s challenge to the Veterans’ Administration’s

(VA) handling of his disability claims was rejected by the

district court. The issues here are whether the handling of

his claims is judicially reviewable and whether the statutory

limitation on attorneys’ fees payable in VA disability cases

is constitutional.

During a four-year tour with the United States Air Force,

Demarest suffered two injuries: one to his left great toe and

one to his back. After his honorable discharge, Demarest filed

claims for disability compensation for those injuries.

The VA denied the claims. It found that the injuries were

service connected, but not disabling to a compensable degree.

JURISDICTION

Demarest’s challenge to the VA's handling of his claims

was pleaded as a claim under the Federal Tort Claims Act

(FTCA), 28 U. SC. 58 2671-80. The district court held that

jurisdiction under the FTCA had not been established and

granted summary judgment for the VA on that claim.

Demarest challenges the appropriateness of disposition

by summary judgment when jurisdiction was lacking. It is

true that dismissal is the appropriate disposition if subject

A-2

matter jurisdiction is absent. Capitol Industries-EMI, Inc.

v. Bennett, 681 F. 2d 1107, 1118 (9th Cir.), cert. denied, 455

U.S. 943 (1982). The remedy is simple: an appellate court

affirming the conclusion that jurisdiction is lacking should

vacate the summary judgment and remand for entry of

judgment of dismissal. Id.

Demarest concedes that he did not properly invoke

jurisdiction under the FTCA. However, he contends that

jurisdiction is conferred by other statutes. Dismissal for lack

of jurisdiction is not warranted to the extent that the

complaint pleads facts from which federal jurisdiction clearly

may be inferred. Andrus v. Charlestone Stone Products Co.,

436 U.S. 604, 607-8 n.6 (1978); see Mir v. Fosburg, 646 F.2d

342, 346-47 (9th Cir. 1980); Harary v. Blumenthal, 555 F.2d

1113, 1115 n.1 (2d Cir. 1977).

The district court had no jurisdiction to consider

Demarest’s challenge to the handling of his claims. Title 38

of the United States Code, section 211(a), provides that all

decisions of the VA concerning veterans’ benefits are final;

no federal court will have jurisdiction to review them. 38

U.S.C. § 211(a). Section 211 has been construed as a

prohibition on judicial review of the VA's administration of

veterans’ benefits statutes, interpreting or applying

provisions of the statutes in the context of a given set of

facts. Johnson v. Robison, 415 U.S. 361, 367 (1974).

Demarest’s challenge to the VA’s handling of his claims

clearly falls within this prohibition, as he seeks review of the

VA's treatment of his individual claims.

Demarest’s contention that the Administrative Procedure

Act confers jurisdiction is clearly without merit. That Act

has no jurisdictional effect. Califano u. Sanders, 430 U.S. 99,

104-07 (1977). We have considered his other arguments that

judicial review is necessary, but find nothing to overcome

the plain language of section 211. His contention that the

VA's actions were arbitrary and capricious does not change

the essential nature of the action as a challenge to the VA's

administration of an individual claim. See Devine v. Cleland,

A-3

616 F.2d 1080, 1084 (9th Cir. 1980); Moore v. Johnson, 582

F.2d 1228, 1232 (9th Cir. 1978).

However, section 211 does not bar constitutional

challenges to the veterans’ benefits laws. Johnson v. Robison,

415 U.S. at 366-74. It presents no jurisdictional bar to the

consideration of Demarest’s challenge to the statutory

attorneys’ fee limitation.

The VA alleges that the attorneys’ fee limitation

challenge also was rejected for lack of jurisdiction. The

district court’s order provided in part:

(a) Plaintiff has not complied with the Federal Tort Claim

Act requirements of 28 U.S.C.A. Section 2675.

— we a this court lacks jurisdiction to proceed on

2 — claim that the restrictions of 38 5 S.C. —

Section yen — oom Raden due — 1 and — —

protection ts (to

rere

Gendron v. Saxbe, 389 F. Supp. 1303 (C. D. Cal. 1975); aff'd

sub nom Gendron v. Levi, 423 U.S. 802 (1975).

The order rejects the fee challenge on the merits.

The VA argues that the fee challenge cannot be reviewed

pursuant to federal question jurisdiction, 28 U.S.C. § 1331,

because it presents no substantial federal question. A federal

question is jurisdictionally insubstantial if it is patently

without merit, or so insubstantial, improbable, or foreclosed

by Supreme Court precedent as not to involve a federal

controversy. Duke Power Co. v. Carolina Environmental

Study Group, 438 U.S. 59, 70-71 (1978). Demarest’s fee

challenge is not so completely devoid of merit that it presents

no substantial federal question, as our discussion of the

merits of that challenge will demonstrate. See Gendron v.

. Saxbe, 501 F.2d 1087 (9th Cir. 1974).

ATTORNEYS’ FEE LIMITATION

Title 38 of the United States Code, section 3404(c), limits

to ten dollars ($10) per claim the amount of attorneys’ fees

payable by a veteran for representation before the VA on

A-4

a disability claim. Section 3405 provides criminal penalties

for violation of the attorneys’ fee limitation. 38 U.S.C. § 3405.

Demarest contends that these provisions violate his right

to procedural due process in the consideration of his disability

claims before the VA. See U.S. Const. amend. V.

The Supreme Court’s summary affirmance in Gendron

v. Levi, 423 U.S. 802 (1975), aff g sub nom. Gendron vu. Saxbe,

389 F. Supp. 1303 (C.D. Cal. 1975), is controlling. Gendron

alleged that the ten dollar fee limitation violated his right

to both procedural due process and equal protection. The

district court there applied the procedural due process test

set out in Goldberg v. Kelly, 397 U.S. 254 (1970): is the

interest a constitutionally protected property or liberty

interest and, if so, does the recipient’s interest in avoiding

loss outweigh the government interest in retaining the

challenged procedure? Id. at 262-63. It concluded that

Gendron had no property interest in an unproven disability

claim. 389 F. Supp. at 1306.

However, the court went on to hold that the procedures

provided by Congress for the administration of disability

claims, including the limitation on attorneys’ fees, satisfied

the requirements of procedural due process. Jd. at 1306-08.

The Supreme Court summarily affirmed the decision.

Gendron v. Levi, 423 U.S. 802 (1975).

Demarest contends that this case is distinguishable

factually from Gendron, and that the summary affirmance

in that case did not resolve the procedural due process

challenge presented here. We disagree.

The factual differences noted have no legal significance.

The length of military service and character of discharge are

irrelevant to entitlement, because Gendron and Demarest

both served and neither was discharged dishonorably. See

38 U.S.C. § 331. The alleged lateness of Gendron’s claim is

irrelevant because no statute of limitation applies. It also

is irrelevant that the dispute here concerns the existence of

disability while the dispute in Gendron apparently concerned

service connection. Both elements are necessary to establish

eligibility for benefits. Jd.

A-5

The summary affirmance in Gendron will dispose of

Demarest’s challenge only if the precise issue{ } [was]

presented and necessarily decided’’ in that case. Mandel v.

Bradley, 432 U.S. 173, 176 (1977). The precedential

significance of that summary affirmance is to be evaluated

“in the light of all of the facts in that case. Jd. at 177.

The procedural due process challenge made by Demarest

also was presented by Gendron. The Supreme Court’s

affirmance of the district court’s rejection of Gendron’s

challenge necessarily must represent one of two conclusions.

First, the Court may have concluded that Gendron did

not have a constitutionally protectible [sic] property interest

in the disability benefits sought. Second, the Court may have

concluded that a property interest existed, but the fee

limitation did not violate the veteran’s right to procedural

due process.

Under either theory, we must reject Demarest’s challenge.

He has established no greater entitlement than did Gendron

because the existence of disability is as necessary to

eligibility as the service connection of a disability. 38 U.S.C.

§ 331. Whether the Court concluded that no constitutionally

protected property interest existed or that the limitation does

not violate procedural process, its summary affirmance

controls this case.

Demarest contends that the Fourth Circuit has

discounted the precedential value of Gendron in Adams v.

Harris, 643 F.2d 995 (4th Cir. 1981). However, the issue in

that case was whether applicants for Social Security benefits

have a constitutionally protectible [sic] property interest. Jd.

at 1001. The Fourth Circuit concluded that the Supreme

Court’s affirmance was not necessarily approval of the

Gendron district court’s analysis of that issue. Jd. at 1001

n.4 We agree. That does not change our conclusion that

whichever of the two possible theories the Court in Gendron

approved, the affirmance in that case compels rejection of

the fee limitation challenge here.

A-6

The VA's discussion of the effect of Gendron places great

reliance on a decision of the Circuit Court of the District of

Columbia. The VA notes that the decision was unpublished.

It does not mention that the District of Columbia Circuit

Rules prohibit citation of unpublished memoranda as

precedent. That rule is noted on the page preceding the

published reference to the case the VA cites, and that case

is specifically listed as such a nonprecedential memorandum.

See 574 F. 2d at 636-37. We have ignored the portion of the

VA’s brief involved. We remind government counsel that

such references are inappropriate. See also th Cir. R. 21(c).

ORAL ARGUMENT ON SUMMARY JUDGMENT

Demarest contends that the district court erred in

granting summary judgment without permitting oral

argument. See Dredge Corp. v. Penny, 338 F.2d 456 (1964).

Because Demarest did not request oral argument until after

the motion was granted, and the local rules permitted him

to do so before the motion was granted, his argument is

without merit. See id. at 461-62.

That portion of the district court’s summary judgment

disposing of Demarest’s challenge to the VA’s handling of

his disability claims is vacated and remanded for entry of

judgment of dismissal for lack of jurisdiction. The remainder

of the judgment is affirmed.

APPENDIX B

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

Defendants.

AT TACOMA

STEPHEN H. DEMAREST, )

Plaintiff, )

-vs- ) NO. C82-364T

UNITED STATES OF AMERICA; )

VETERANS ADMINISTRATION, ) ORDER

)

THIS MATTER comes on before the court upon

defendants’ Motion for Summary Judgment.

Having considered the entirety of the records and files

herein, the court finds and rules as follows:

1. Once the movant has established that there is no

genuine issue of material fact and that he is entitled to

judgment as a matter of law, the burden of presenting

evidence shifts to the non-movant.

2. Movant defendant has satisfied its burden of showing

that it is entitled to summary judgment as a matter of law

in the following:

(a) Plaintiff has not complied with the Federal Tort Claim

Act requirements of 28 U.S.C.A. Section 2675.

Accordingly, this court lacks jurisdiction to proceed

on these claims.

(b) Plaintiff's claim that the restrictions of 38 U. S. C. A.

Section 3404 violates [sic] his due process and equal

protection rights (to pursue his service connected

disability claims under 38 U.S.C.A. Section 3401) are

without merit. Gendron v. Saxbe. 389 F.Supp. 1303

(C.D.Cal. 1975), aff'd sub nom Gendron v. Levi, 423

U.S.802 (1975)

The clerk of the court is instructed to send uncertified

copies of this Order to all counsel of record.

B-2

DATED this 22nd day of January, 1983.

/s/ Jack E. Tanner

UNITED STATES DISTRICT JUDGE

JUDGMENT ON DECISION BY THE COURT

FOR THE

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON AT TACOMA

STEPHEN DEMAREST CIVIL ACTION =

vs. DOCKET NO. C82-364

USA JUDGMENT

This action came on for Consideration before the court,

United States District Judge JACK E. TANNER presiding.

The issues having been duly Considered and a decision

having been duly rendered, it is ordered and adjudged ..

Defendant's motion for summary jdmt is GRANTED.

Dated at: Date: 1/27/83

Tacoma, Wash. BRUCE RIFKIN, Clerk

/s/ Debby Harrison

Deputy Clerk of the Court

APPENDIX C

IN THE APPEAL OF

STEPHEN H. DEMAREST SS 534 68 9510

BOARD OF VETERANS APPEALS

WASHINGTON, DC. 20420

FINDINGS AND DECISION ) DOCKET NO. 83-08 904

)

) DATE AUG 9 1983

THE ISSUE

1. Entitlement to a compensable rating for traumatic arthritis

of the left hallux, postoperative status.

2. Entitlement to a compensable rating for residuals of a

fracture of the spinous process of C7.

REPRESENTATION

Appellant represented by: American Red Cross

WITNESS AT HEARING ON APPEAL

Stephen H. Demarest, appellant

; CONSULTATIONS BY THE BOARD

R. L. Shaw, Staff Legal Adviser

CONTENTIONS

The veteran and his representative contend, in substance, that

the current noncompensable ratings do not reflect the degree

of disability resulting from either service-connected disability.

The veteran maintains that two Veterans Administration

physicians and an independent radiologist concur that the

veteran has swelling, deformity, and limited or no motion of

the affected toe. He argues that a ten per cent (10%) rating

is warranted under either Code 5281 or 5003. Concerning the

C-2

neck disability, the veteran and his representative argue that

a rating of at least twenty per cent (20%) should be assigned

under Code 5290 (limitation of cervical spine motion) or 5285

( deformity of a vertebral body). The veteran states that the

evidence of record, including reports by Veterans

Administration physicians and an independent radiologist,

demonstrate the existence of residual disability. Noting that

a later examination showed more severe findings than an

earlier one, the veteran argues that the later of two

conflicting evaluations must be accepted under 38 C. F. R. 4.7.

The veteran claims that the adjudication of his claim has

heretofore been arbitrary, capricious, and contrary to the

evidence and law. He requests that all reasonable doubt be

resolved in his favor pursuant to 38 C.F.R. 3.102.

THE EVIDENCE

The veteran had active military service from November 1976

to August 1980. Service medical records show that in March

1980 he underwent a partial ostectomy, fusion, and removal

of a nonunited bone fragment from the left hallux. Records

from a private medical facility show that in May 1980 he

sustained a fracture of the spinous process of C7 in an

automobile accident.

The veteran was examined by the Veterans Administration

for compensation purposes in October 1980. He reported

having stayed at a civilian hospital for two days following

his automobile accident, followed by two days in a military

hospital. He reported that since the accident he had gotten

along well. He noticed some stiffness in the early morning

as well as some cracking and popping on movement of the

neck. He was taking no medications. Examination showed

a full range of motion of the cervical spine without

discomfort. There was no crepitus on movement. The veteran

was able to walk on his toes. X-rays of the cervical spine

showed anatomic alignment of the vertebral bodies and

posterior elements, well-maintained vertebral disc spaces,

and normal neural foramina. The findings were interpreted

as normal. Pertinent diagnosis was historical evidence of

fracture of the posterior spinous process of C7.

C-3

The veteran testified at a hearing in July 1982 before

members of a rating board at the originating agency. He

presented extensive argument expanding on the contentions

summarized above. He described stiffness in the neck,

especially after sleeping in an awkward position. He

described himself as a physically active person and reported

that three days of backpacking caused soreness down the

middle of his neck and back afterwards. He had given up

horseback riding and parachuting because of the risk of

further injury to the neck. He described cracking and popping

in the neck on movement. He reported having been told by

doctors that although his neck motion may not show much

limitation at his age, it may become more severe as he gets

older. He described his toe as deformed and oversized. He

reported an almost constant redness and discomfort,

especially when wearing dress shoes or doing a lot of running.

He stated that it had affected his balance and agility. A

verbatim transcript of the hearing is of record. During the

hearing the medical member of the hearing panel observed

the veteran’s disabilities and dictated his findings into the

transcript. He described deformity of the first toe on the left

foot,with moderate tenderness at the proximal joint. There

was limitation of motion and inability to flex the first toe.

There was a slight mass above the proximal interphalangeal

joint. With respect to the neck, there was slight tenderness

over the seventh vertebral spinous process. The veteran had

no difficulty in rotating the neck from left to right or from

right to left. There was slight limitation of flexion. There was

difficulty in flexing the chin to the sternum. There was no

referred pain or radiculitis to the extremities. There was a

good hand grasp. The veteran made a fist without difficulty.

Received into evidence at the hearing were photocopies of

two radiology reports from a private facility. In one report,

current X-rays of the first left toe were compared with

previous films from September 1978 which showed a well-

corticated bony fragment close to the interphalangeal joint

of the great toe associated with a well-corticated cystic

erosion, osteophyte formation of the adjacent portion of the

proximal phalanx, and a small osteophyte from the distal

C-4

phalanx. The bony fragment could not be detected on the

later films. The changes in the adjacent phalanges were still

evident. A current film of the cervical spine showed a normal

curvature without evidence of subluxation or obvious

fracture. The only equivocal abnormality was on an oblique

film showing an apparent narrowing of the joint between the

C6 and C7 masses, with some distortion of the lateral masses.

The second report, dated several days later, showed a

fracture of the spinous process of C7 with the dorsal segment

inferiorly displaced. It was noted that on previous films the

spinous process fracture was healed with some deformity.

No vertebral body deformity was noted.

The veteran was examined by the Veterans Administration

for compensation purposes in August 1982. He refused to

discuss his C7 spinous process on the grounds that it was

being reviewed by a Board in Washington, D.C. He

complained that his left toe was deformed and disfigured,

that it was bent inwards and downwards, that it was

constantly inflamed and swollen, that it was irritable and

caused discomfort, and that it affected agility and balance.

He reported minimal discomfort in the great toe after

running a 6.2-mile race. On examination the veteran was able

to heel/toe walk without discomfort. There was an area of

chronic bony swelling approximately 2 centimeters in size

on the distal interphalangeal joint on the medial aspect of

the dorsum of the left great toe. The distal interphalangeal

joint appeared to be fused, with very little motion. The bony

deformity was minimally tender and moderately

erythematous. No X-rays were taken. Clinical impression was

past history of fracture, distal interphalangeal joint, left great

toe, with osteoarthritis.

THE LAW AND REGULATIONS

Disability evaluations are determined by the application of

a schedule of ratings which is based on average impairment

of earning capacity. (38 U.S.C. 355; 38 C. F. R. Part 4)

Separate diagnostic codes identify the various disabilities.

C-5

Where the minimum schedular evaluation requires residuals

and the schedule does not provide a noncompensable

evaluation, a noncompensable evaluation will be assigned

when the required residuals are not shown. (38 C.F.R. 4.31)

Residuals of fractures of the spinous processes of the cervical

spine are rated on the basis of limitation of motion of the

cervical spine. The ratings schedule provic'es a ten per cent

(10%) rating when the limitation of motiou is slight. (Code

5290) An additional ten per cent (10%) can be assigned for

demonstrable deformity of the vertebral body. (Code 5285)

Traumatic arthritis is rated as degenerative arthritis.

Degenerative arthritis established by X-ray findings will be

rated on the basis of limitation of motion under the

appropriate diagnostic codes for the specific joint or joints

involved. When, however, the limitation of motion of the

specific joint or joints involved is noncompensable under the

appropriate diagnostic codes, a rating of ten per cent (10%)

is for application for each such major joint or group of minor

joints affected by limitation of motion, to be combined, not

added, under this diagnostic code. Limitation of motion must

be objectively confirmed by findings such as swelling, muscle

spasm, or satisfactory evidence of painful motion. In the

absence of limitation of motion, a ten per cent (10%) rating

will be assigned where there is X-ray evidence of involvement

of two or more major joints or two or more minor joint

groups. (38 C.F.R. Part 4, Codes 5003, 5010)

The rating schedule provides a ten per cent (10%) rating for

severe unilateral hallux rigidus or unilateral hallux valgus

following surgery, with resection of the metatatsal [sic] head,

or if equivalent to amputation of the great toe. (Codes 5280,

5281)

Where there is a question as to which of two evaluations shall

be applied, the higher evaluation will be assigned if the

disability picture more nearly approximates the criteria

required for that rating. Otherwise, the lower rating will be

assigned. (38 C.F.R. 4.7)

When a reasonable doubt arises regarding service origin, the

degree of disability, or any other point, such doubt will be

C-6

resolved in favor of the claimant. A reasonable doubt means

a substantial doubt and one within the range of probability

as distinguished from speculation or remote possibility. (38

C.F.R. 3.102)

DISCUSSION AND EVALUATION

During service the veteran underwent fusion and removal

of bony fragments in the area of interphalangeal joint of the

left big toe.The earlier X-rays submitted by the veteran show

a well-corticated bony fragment close to the joint, with

osteoarthritic changes in the same area (the bony fragment

was not seen on the most recent film). There is little, if any,

movement in the fused interphalangeal joint, and an area

of bony deformity over the joint has been reported by two

examiners. Other residuals include moderate redness,

moderate tenderness, and complaints of swelling. Since the

underlying diagnosis is traumatic arthritis, the disability is

properly rated under Diagnostic Codes 5010 and 5003, cited

above. While a ten per cent (10%) rating can be applied under

Code 5003 for limitation of motion of noncompensable degree,

limitation of motion of the fused great toe is not specifically

covered by any code and is not a criterion per se for

evaluating disabilities of the great toe. Involvement of two

or more major joints or minor joint groups has not been

shown. The veteran’s potential entitlement under Codes 5280

and 5281 has been considered, but we note that the surgery

in service did not involve resection of the metatarsal head

and that the residuals are not of such severity as to be

equivalent to amputation of the great toe. We note in this

regard that the veteran walks normally and that he does not

have significant discomfort even after running a race.

During service the veteran sustained a fracture of the spinous

process of C7. Current X-rays from a private facility show

deformity at the fracture site consisting of inferior

displacement of the spinous process. When informally

observed by the medical member of the hearing panel, he was

reported to have a normal range of rotation bilaterally. The

examiner noted slight limitation of forward flexion. There

C-7

was slight tenderness over C7, and the veteran described

occasional stiffness and soreness in the neck, especially on

awakening or after strenuous exercise. A finding of slight

limitation of motion would appear to support a ten per cent

(10%) rating under Diagnostic Code 5290, but it is significant

that the rating board physician noted that the veteran had

difficulty flexing his chin to his sternum. This finding is

somewhat incompatible in that flexion of the chin to the

sternum would be impossible, not merely difficult, if

limitation of motion were truly present. In any case, the

veteran subsequently did not undergo the additional

requested testing that would have clarified this point. Since

the fracture site was on the spinous process rather than on

the body of C7, a compensable rating of ten per cent (10%)

cannot be assigned under Code 5285.

The Board has carefully reviewed all of the evidence of record

together with the written and oral contentions presented on

appeal. The evidence of record does not raise a reasonable doubt

or otherwise warrant allowance of this appeal.

FINDINGS OF FACT

1. Traumatic arthritis of the left hallux, postoperative status,

is manifested by osteoarthritic changes in the area of the

interphalangeal joint, limitation of motion of the

interphalangeal joint, deformity of the toe, moderate

tenderness, moderate redness, and complaints of swelling.

2. Neither involvement of the metatarsal head nor functional

impairment equivalent to amputation of the great toe has

been demonstrated.

3. Residuals of a fracture of the spinous process of C7 consist

of deformity of the process of C7, slight tenderness over C7,

stiffness and soreness of the neck, and difficulty flexing the

chin to the sternum.

4. Neither slight limitation of motion nor deformity of the

body of C7 has been confirmed.

C-8

CONCLUSIONS OF LAW

1. A compensable rating for traumatic arthritis of the left

hallux, postoperative status, is not warranted. (38 U.S.C. 355;

38 C.F.R. Part 4, Codes 5010, 5003)

2. A compensable rating for residuals of fracture of the

spinous process of C7 is not warranted. (38 U.S.C. 355; 38

C.F.R. 4.31 and Part 4, Code 5290)

DECISION

Entitlement to a compensable rating for traumatic arthritis

of the left hallux or to a compensable rating for residuals

of fracture of the spinous process of C7 is not established.

The appeal is denied.

„ Albert D. Tutera /s/ Roy G. Klepser, M.D.

ALBERT D. TUTERA ROY G. KLEPSER, M.D.

/s/ Elizabeth F. Parris

ELIZABETH F. PARRIS

APPENDIX D

Summary

Nearly 39 million men and women have served in the

armed forces during wartime periods throughout the more

than 200 years of United States history. Roughly nine of

every ten of these servicemen and women served during

periods of armed conflicts during the 20th century.

Approximately 1.1 million people have sacrificed their lives

in defense of their nation during times of war. The total

number of veterans living in the U.S. and in Puerto Rico at

the close of FY 1982 was about 28.5 million, nearly 24.3

million of whom were wartime veterans and more than 4.2

million of whom were veterans of peacetime service only.

Number of Veterans and Period of Service

The estimated veteran population as of September 30,

1982, is 28,522,000. This estimate of the number of veterans

in civilian life reflects final 1980 Decennial Census counts

of veterans, and includes former military personnel living

in the U.S. and Puerto Rico only.

The total veteran population of the U.S. and Puerto Rico

fell by some 151,000 during FY 1982. This slight decrease of

0.5 percent was the net result of the addition of 294,000 ser-

vice personnel discharged from the armed forces, the entry into

the military from civilian life of 34,000 who reenlisted, and the

loss of 411,000 veterans who died during the fiscal year.

As a result of factors which are quite likely linked to the

nation’s rising unemployment rate and overall strained

economic mood, more and more military personnel are

making the choice to stay in the armed forces after their

previous enlistment period has ended. This increase in

immediate reenlistments results in fewer separations, and

hence smaller numbers of new veterans enter the population.

This trend will probably continue as long as the economic

environment remains clouded.

In spite of the fact that the total veteran population

decreased during FY 1982, increases were registered in the

number of veterans for two periods of military service—the

D-2

Vietnam era and post-Vietnam era. The number of living

veterans of the Vietnam era who served in no prior wars in-

creased slightly from 8,138,000 on September 30, 1981, to

8,188,000 at the end of FY 1982. Post-Vietnam era veterans

expanded in number to a total of 1,372,000, a rise of 189,000

during the year. This 16 percent increase would have been

even larger had it not been for Public Law 96-342. Veterans

from all other periods of military service showed declines dur-

ing the year. Most notable was the deaths of some 281,000

World War II veterans. This group is still the largest sector

of the veteran population, however, numbering about 11.4

million and comprising about 40 percent of all veterans as

of the end of FY 1982. Veterans whose only wartime service

occurred during the Vietnam era accounted for 29 percent of

all living veterans, and Korean conflict veterans with no World

War II or Vietnam service (3,818,000) constituted 13 percent.

Veterans of World War I number 368,000. Peacetime veterans

who served only between the Korean conflict and the Viet-

nam era dropped marginally to 2,888,000.

Age of Veterans

The median age of veterans in civilian life as of the end

of September 1982 was 50.8 years. Less than 3 percent of

all living veterans were under the age of 25 years, whereas

12 percent were at least 65 years old.

As the veteran population continues to decline in size

throughout the coming years, the median age of veterans

will gradually increase. An integral part of this aging process

will be the movement of significant numbers of World War

II veterans into the age group 65 years old and over. Before

the turn of the century, it is expected that fully one of every

three living veterans will fall in this senior age range.

Female Veterans

The estimated number of female veterans is 1,218,000 at

the end of FY 1982, a total representing some 4.3 percent

of all veterans in civilian life. This estimate of the female

veteran population is markedly higher than any previous

estimate. This higher estimate is based on the findings of

D-3

the 1980 Decennial Census. The count of female veterans

grew by about 18,500, or by 1.5 percent, during the 12

months ending September 30, 1982. This growth, which

stands in contrast to the decline in the overall veteran

population, is very likely to continue as long as the women’s

share of all active duty military personnel remains at or near

its present level. Women currently comprise nine percent of

all active duty military personnel, a proportion decidedly

greater than the less than two percent they represented a

decade ago.

World War II female veterans comprised 37 percent

(448,000) of the female veteran population, while female

veterans of the Vietnam era made up 26 percent (320,000).

Korean conflict (only) female veterans accounted for 8 percent

(102,000) of the overall number of female veterans, and female

veterans with Korean conflict and Vietnam era service (15,000)

comprised over one percent, and female veteran survivors of

World War I constituted just one percent (11,000). Women

who served on active military duty only between the Korean

conflict and the Vietnam era accounted for seven percent

(89,000) of all female veterans. The major difference between

the period of service distribution of female veterans and that

of all veterans is the proportion of ex-servicewomen who

participated only in the post-Vietnam era. Whereas female

veterans of the Post-Vietnam era represent 19 percent of all

female veterans, Post-Vietnam era veterans, male and female,

comprise only five percent of all living veterans. This factor

is the primary reason why the median age of female veterans

(45.5 years) is decidedly below that of all veterans (50.8 years);

i.e., former military personnel whose only service began after

the Vietnam era ended (May 7, 1975) would generally be

expected to be much younger than veterans of any other

period of service. The comparatively large influx of post-

Vietnam era female veterans into the veteran population is

also the predominant reason for the growth of the percent

of the veteran population comprised of females. During FY

1982 alone, nearly 21,000 women were added to the post-

Vietnam era veteran population after their separation from

the armed forces. This steady flow of new (and young) female

D-4

veterans has resulted in the recent decline in the median age

of female veterans overall.

Veterans and Their Families

Living veterans are only part of the total number of

potential recipients of VA benefits. As of September 30, 1982,

there are an estimated 22.0 million spouses of living veterans,

20.2 million dependent children, and 10.0 million other family

members. Although only a small proportion of these

dependents are likely to seek benefits directly from the VA

at any time in the future, benefits paid to veterans will

indirectly affect the socioeconomic well-being of a great

number of their dependents. Former dependents of deceased

veterans number about 3.1 million at the end of FY 1982.

The 2.6 million widows and widowers, 356,000 dependent

children, and 103,000 dependent parents of eligible deceased

veterans raise the total population of potential beneficiaries

to some 83.8 million, or about 36 percent of the resident

population of the United States.

Appellate Review

Claimants for VA benefits who are not satisfied with

determinations made by field offices may file a written notice

of disagreement with the office taking the action. If, after

reviewing the case in light of the claimant’s disagreement,

the field office is not able to grant benefits sought, it sends

the appellant a statement of the case. This statement outlines

the issue, evidence of record, pertinent law and regulations,

and the reason for the decision. If the appellant, after reading

the statement of the case, still disagrees with the field office,

he or she may submit an appeal to the Board of Veterans

Appeals (BVA). Again the field office reviews the case. If

still unable to resolve the appeal to the satisfaction of the

claimant, the field office sends the case to the BVA for review

and final decision.

A heavy volume of appeals continued through

1982—surpassing the record level of 1981. According to

available records, only 1949 and 1950—the peak years follow-

ing World War II- had greater numbers of new appeals.

D-5

Adding new appeals to those carried over from 1981, the

1982 appellate workload was more than 124,000 cases. About

31,000 appeals were resolved in field offices—another 35,800

were decided by the Board of Veterans Appeals. There were

more than 61,300 final dispositions of appeals—over 21 per-

cent of which were allowances of benefits sought by claimants.

The VA employs two data processing systems to provide

positive case management and control of appeals. When a

claimant files a notice of disagreement, the Department of

Veterans Benefits (DVB) field station creates an appeal record

in VARMS (Veterans Appeals Record Management System).

VARMS then tracks the appeal until its final disposition.

The BVA, through VARMS, holds its caseload at a level

that permits optimum operations. Each month the Board

determines the number of appeals to be called in. DVB, using

VARMS, selects the cases, oldest first, and sends them to

Washington. These call-up procedures have held average

response time in Washington to about 100 days. Also, by

keeping appellant records until the BVA calls for them, field

offices are better able to serve veterans and other claimants

by responding to inquiries, assisting them in other matters,

and in developing their appeals.

Average overall response time to appeals, measured from

the date of notice of disagreement until BVA decision,

reached 483 days (over 16 months) at the end of FY 1982.

This is up from 443 days at the start of the year. The biggest

increase was the time appeals were held for call-up by the

Board. We estimate this delay to be about five months.

Appellants, their representatives, and other case

advocates continued to show great interest in claims for

disabilities involving Agent Orange, exposure to radiation,

and incarceration as prisoners of war. The Board has made

each of these categories a specialty area and assigns them

to one of the sections designated to handle them. This

permits the Board to develop expertise in these sensitive

areas and to ensure consistency in the application of laws

and regulations. In FY 1982 the Board received 380 appeals

D-

involving Agent Orange (up from 288 in 1981), 168 involving

radiation (down from 205), and 303 from former prisoners

of war or their beneficiaries (up from 251 in 1981).

The BVA held 1,503 personal hearings for appellants in

FY 1982, 1,001 in Washington and 502 before traveling

sections of the Board sitting in 38 field stations. Up until

several years ago, about 70 percent of the appellants who

asked for hearings appeared for them. In FY 1982 that

dropped to less than 49 percent. A year earlier the rate was

56 percent.

In 1981 the BVA started a program to reduce the time

required for personal hearings before the Board. When

possible, and when requested by the appellant, the Board

provides a copy of hearing recordings to appellants in lieu

of transcriptions. This procedure, satisfactory to more than

55 percent of appellants with formal hearings in Washington,

has reduced the Board’s response time in those cases by four

to six weeks. This procedure applies only to hearings held

before the Board in Washington. All travel board hearings

continue to be transcribed.

At the end of FY 1982, the waiting time on the hearing

docket. was about ten weeks, the same as at the end of FY

1981. Unfortunately, most appellants who fail to show up

for their scheduled hearings do not notify us in time to

schedule a replacement.

The portion of appellants who chose to be represented

by one of the veterans’ service organizations continued to

grow. Our records for FY 1982 show that more than 86

percent selected one of the accredited organizations; just over

two percent used attorneys or agents; and less than 12

percent chose to pursue their appeals without representation.

Appellants handling their appeals without representation has

declined steadily from about 22 percent to less than 12

percent over the past decade.

At the end of fiscal year 1982, there were more than

47,600 appeals in process in VA field stations. About 36

percent of these were in the initial, (notice of disagreement)

D-7

stage, the remainder in the final stages of field processing.

Including 12,115 cases on the BVA docket, the total number

of appeals pending at the end of FY 1982 was 59,776, up

4,333 from a year earlier.

Headed by a Chairman, a Vice Chairman, and two Deputy

Vice Chairmen, the Board had a complement of 16 full

sections. To help reduce the large backlogs of appeals, the

Chairman operated a skeletal seventeenth board section

within budgetary limitations for 16 sections. As a result the

BVA produced 35,771 decisions, which is a record number.

Among the 17 sections there were 33 legal and 15 medical

members. Supporting the sections was a medical adviser, 107

staff attorneys, and an administrative service. Excluding

overtime, the Board had an average employment level of 343

during the year.

Other professional support available included advisory

medical opinions from the Chief Medical Director and legal

opinions from the General Counsel. In addition, under the

authority of Section 4009, Title 38, U.S.C., the Board

requested 202 opinions from independent medical experts

who were not VA employees.

The Freedom of Information Act requires the BVA to

produce an index of its final decisions on appeals and to make

the decisions available to the public. Developed in compliance

with the Act, AIRS (Appellate Index and Retrieval System)

includes quarter and cumulative annual subject indexes on

microfiche and BVA decisions, stripped of personal

identifiers, on microfilm. Appellants and others interested

in decisions of the Board are able to check these indexes to

locate specific type cases. They can then request copies of

the decisions they want. At the end of FY 1982, AIRS

indexes covered the period from July 1, 1977 through June

30, 1982—about 170,000 BVA decisions.

APPENDIX E

STATEMENT OF JOHN F. TERZANO

LEGISLATIVE DIRECTOR

OF THE

VIETNAM VETERANS OF AMERICA

ACCOMPANIED BY

DAVID F. ADDLESTONE

AND

BARTON F. STICHMAN

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT AND

INVESTIGATIONS

COMMITTEE ON VETERANS AFFAIRS

UNITED STATES HOUSE OF REPRESENTATIVES

JULY 26, 1983

V. THE ATTORNEY FEE LIMITATION

VVA urges the Congress to take action to eliminate the

ten dollar fee limitation that attorneys may charge to handle

VA claims. The limitation deprives veterans of a basic right

that all citizens have — the freedom of choice to seek

professional assistance to help them sort through a

complicated legal system. They should have the opportunity

to go into the marketplace and pay for the legal services they

need, without the statutory barrier that lingers from another

historical era and set of circumstances. There can be no doubt

that the ten dollar fee limitation acts to almost completely

exclude lawyers. It is a perfect example of inappropriate and

unnecessary government regulation to deny citizens a free

choice in the market place. The retention of the limitation

is usually justified by reference to some generalized negative

effect lawyers would have on the VA.

Some believe that removal of the fee limitation and the

introduction of lawyers into the VA system would harm the

Ws decision-making process. Arguments against such

representation suggest that lawyers would unnecessarily

complicate the process, create an adversary relationship

between veterans and the VA, and that simply suggesting

E-2

the notion of lawyer representation before the VA is an \

indictment of the current adjudication system.

Taking the last point first, to suggest that lawyers should

be able to represent veterans who want lawyers before the

VA does not mean that the current system is either unfair,

indifferent or a failure. On the contrary, the right to choose

a representative does not depend on any shortcomings of an

adjudicative system. Rather, the right to seek legal

assistance should stand alone as an option for all citizens.

The ten dollar fee limitation serves as a barrier to lawyers

created by government regulation. Eliminating the

prohibition would open the system to more free choice and

a free market.

VVA sincerely believes that the introduction of lawyers and

other legally trained professionals into the VA will improve

the system. There are several specific benefits we feel that

lawyers can add to the system. Let it be clear. however, we

are not advocating the replacement of service organization

service representatives with lawyers. We are advocating that

veterans receive the benefit of an additional option.

The most important function lawyers can serve at the VA,

as they have at other federal agencies, is that of mediator

between the veterans and the agency. The typical lawyer who

advocates before an administrative agency does not fit the

stereotypical image of adversarial trial-type litigator, the

image created by some who oppose lawyer participation at

the VA. Persons familiar with federal agency practice know

that the role of an administrative advocate is far different

from a courtroom litigator. The administrative lawyer

frequently acts to explain a complex agency to a client,

attempts to clarify issues for both the client and the agency,

and tries to resolve claims with as little acrimony as possible.

The reason why lawyers would function this way is obvious.

The VA is not an adversary process, and there is no attorney

on the other side to argue against.

An even more telling point against the argument that

lawyers will somehow infect the system is to look at the BVA

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itself. The BVA has fifteen sections each with three members.

Fourteen of the fifteen sections have two of the three

members who are lawyers. In the fifteenth section all three

members are lawyers. In addition, each section has seven

or eight staff attorneys. In short, the entire decision-making

process is monopolized by attorneys. Everything is done in

legalistic terms. To argue that allowing the veteran to have

a lawyer will infect the process with legalism ignores the

reality of the process as it now exists.

Lawyers have been trained to approach issues in a certain

way and that method is used to adjudicate issues at all federal

agencies and in the courts. We have been told that the

presentation of briefs to the BVA, which we do in every case,

has helped the members better understand the legal issues and

the factual record. Given the incredible caseload at the BVA,

clarification of issues will assist the BVA and at the same time

give the veteran informed access to the system.

There is another result from the introduction of lawyers

that will be beneficial to veterans and the agency. It is

common to all lawyer-client relationships, and that is when

a lawyer advises a client that he or she does not have a

meritorious case. We have found that providing a client with

frank advice about the chances of success is welcomed by

the client who never before knew the real merits of the case.

This is not to say that disgruntled clients will not seek

another, more favorably inclined lawyer but the point bears

consideration. In this way, lawyer participation could

significantly reduce the caseload of the agency on grounds

that are sound and in a manner that leaves the client with

a sense that a full and fair consideration by an independent

professional have been given in the case. S. 636 and the

House bills still place unduly strict limits on attorneys fees.

For example, some provisions keep the ten dollar limit until

the VA process has been exhausted, and the limit for court

work is still unrealistically low. VVA feels that these

provisions, while a welcome change from the past, are not

sufficient to assure that veterans will have the freedom to

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choose their own representative and have legally trained

counsel assist in making an early record for cases that are

likely to end up in court. We would be happy to assist the

Committee staff revise these provisions.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.