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NEHMER v. U.S. VETERANS ADMIN.

February 11, 1999

BEVERLY NEHMER, ET AL., PLAINTIFFS,
v.
UNITED STATES VETERANS ADMINISTRATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Henderson, District Judge.

CLASS ACTION ORDER

The matter came on for hearing on Monday, November 16, 1998. Having carefully considered the parties' oral and written arguments, and the entire record herein, the Court concludes, for the reasons set forth below, that plaintiffs' motion should be granted in part and denied in part consistent with this Order.

BACKGROUND

In order to put the instant dispute in context, it is necessary to review the underlying litigation and our 1989 ruling. As explained in that ruling, the United States Armed Forces used Agent Orange, a chemical defoliant containing the toxic substance dioxin, to clear dense jungle land in Vietnam during the war. Many veterans believed that their exposure to Agent Orange, "`one of the mostly highly toxic substances known to the scientific community,'" Nehmer v. U.S. Veterans' Admin., 712 F. Supp. 1404, 1407, n. 1 (N.D.Cal. 1989) (citation omitted), caused them to contract several debilitating or deadly diseases. Many veterans (or their surviving kin) sought compensation from the VA claiming that diseases they developed after service in Vietnam were related to their exposure to Agent Orange during military service. The VA. however, consistently took the position that only one disease — a skin condition called chloracne was associated with exposure to Agent Orange, and thus "routinely denied compensation for veterans who allege[d] that exposure to Agent Orange has caused diseases other than chloracne." Id. at 1407.

In response to the controversy over Agent Orange, Congress in 1984 enacted the Veterans' Dioxin and Radiation Exposure Compensation Standards Act ("the Dioxin Act"), Pub.L. 98-542 (HR 1961), 99 Stat. 2725, 98th Cong.2d Sess., reprinted in part at, 38 U.S.C. § 1154 note. The Act "was passed amidst veterans' `concern[s] about possible long-term health effects of exposure to herbicides containing dioxin' . . . as well as `scientific and medical uncertainty' regarding the long-term health effects of Agent Orange exposure." Id. (citation omitted). The purpose of the Act was "to ensure that disability compensation is provided to veterans `for all disabilities arising after [service in Vietnam] that are connected, based on sound scientific and medical evidence, to such service.'" Id. (citation omitted).

The Act authorized the VA to conduct rulemaking to determine which if any diseases, claimed to be associated with Agent Orange exposure, should be deemed "service connected." To this end, the VA was required to appoint an advisory committee which would study the medical and scientific evidence and make recommendations to the VA. The VA was then required to promulgate regulations identifying those diseases it deemed to be service connected, based on "sound scientific and medical evidence," id. at 1408. Consistent with the above, the VA issued a final regulation codified at 38 C.F.R. § 3.311a (1986). Under subsection (b) of the regulation, veterans do not have to prove that they were exposed to Agent Orange. Rather, any veteran who served in Vietnam is automatically "presumed to have been exposed to a herbicide containing dioxin." 38 C.F.R. § 3.311a(b). Subsection (d), however, reaffirmed the VA's earlier position that it would recognize only one disease — chloracne — as being sufficiently linked to Agent Orange to qualify as "service connected." Id. at 1408.

In February 1987, plaintiffs filed this class action challenging 38 C.F.R. § 3.311a(d) on a variety of grounds. After considering the parties' cross-motions for summary judgment, this Court, in May of 1989, (1) invalidated 38 C.F.R. § 3.311a(d), on the ground that the VA had used too restrictive a standard to determine whether a disease is sufficiently linked to Agent Orange to qualify as service connected*fn1 and (2) "void[ed] all benefit decisions made under 38 C.F.R. § [3.]311[a](d)." Nehmer, 712 F. Supp. at 1409, 1416-18.

Two years later, in May of 1991, the parties agreed to a Final Stipulation and Order ("Stip. & Order") which resolved the remaining issues of injunctive and monetary relief for the class. With respect to injunctive relief, the Stip. & Order set forth the VA's responsibilities with regard to further rulemaking concerning Agent Orange. As a result of this rulemaking, the VA, between 1990 and 1996, found that a number of cancers are linked to Agent Orange using the appropriate standard, and, as a result, they have been accorded service connected status.*fn2

With respect to monetary relief, the Stip. & Order requires the VA to reopen and readjudicate previously denied claims that were voided by the Court's May 1989 order if and when the VA issues new Agent Orange regulations service-connecting diseases other than chloracne. Specifically, paragraph 3 of the Stip. & Order provides that:

  As soon as a final rule is issued service connecting,
  based on dioxin [Agent Orange], any of [certain
  specified diseases], and any other disease which may
  be service connected in the future . . . the VA shall
  promptly thereafter readjudicate all claims for any
  such disease which were avoided by the Conrt's Order
  of May 3, 1989 as well as adjudicate all similar
  claims filed subsequent to the Court's May 3, 1989
  Order without waiting for final rules to be issued on
  any other diseases.

Stip. & Order at ¶ 3.

Paragraph 5 then states that, for those cases which are readjudicated because the earlier denial was "voided" by the Court's order, the "effective date" for disability compensation shall be the date the voided claim was originally filed:

  For any of [certain specified diseases], and any other
  disease which may be service connected in the future
  pursuant to paragraph 3 above, . . . [a]s to any
  denials of claims which were voided as a result of the
  Court's May 3, 1989 Order, the effective date for
  disability compensation or dependency and indemnity
  compensation ("DIC"), if the claim is allowed upon
  readjudication pursuant to paragraph 3 and 4 above,
  will be the date the claim giving rise to the voided
  decision was filed.

Stip. & Order at ¶ 5.

The instant dispute concerns the scope of the VA's readjudication obligations under paragraphs 3 and 5 of the Stip. & Order. As noted above, the VA, as a result of this action and the newly applied standard, has found that a number of diseases, besides chloracne, are service connected based on their link to Agent Orange. Thus, there are many class members who, during the time period when the invalid regulation was in effect, filed a claim for service-connected benefits based on a disease that the VA did not then recognize as linked to Agent Orange — but which the VA now recognizes is so linked pursuant to its revised Agent Orange regulations. Those claims were, of course, all denied at the time they were filed.

The VA has taken the position that ¶ 3 of the Stip. & Order does not require it to readjudicate such claims unless (1) the claim specifically alleged that Agent Orange (or herbicides) was a factor in the veteran's death or injury, or (2) the VA's denial of the benefits expressly cited to 38 C.F.R. § 3.311a as grounds for the denial. S., VA Adjudication Procedures Manual*fn3 M21-1, part VI, Change 52 (August 28, 1996), Section 7.20(d)(3), Stichman Decl., ¶ 5 and Exh. 26. Plaintiffs counter that the Stip. & Order requires the VA to readjudicate those claims in which the disease causing death or injury is later service connected under revised Agent Orange regulations, regardless of whether the applicant (1) expressly referenced Agent Orange in his or her claim, or (2) the VA expressly cited 38 C.F.R. § 3.311a in denying the claim.

The instant dispute arose when counsel for plaintiffs learned of the situation of two class members, Rosa Aponte and Janet George, who first filed applications in 1985 and 1987 on behalf of deceased spouses who served in Vietnam. Ms. Aponte's application for service-connected death benefits asserted that her husband's cause of death was "due to service" but did not expressly allege that Agent Orange or herbicides were a factor in his death. The cause of death was identified as lung cancer. The VA denied her claim for death benefits on the pound that the evidence did not show that the ...


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