Dioxin in the Courts

August 31, 2015 | Appeals | Complex Torts & Product Liability

Federal Circuit Court Rejects Request to Broaden VA Regulation on Herbicide Exposure for Vietnam Veterans Who Served Near Korean DMZ

The U.S. Court of Appeals for the Federal Circuit has rejected a request to broaden a regulation issued in 2011 by the Department of Veterans Affairs (“VA”) that provides a presumption of herbicide exposure for certain veterans who served in or near the Korean demilitarized zone (“DMZ”) during the Vietnam era.

Background

In 2003, Congress passed the Veterans Benefits Act, which authorized benefits for children with spina bifida born to certain Korean service veterans. The act defined “a veteran of covered service in Korea” as “any individual” who:

  1. served “in or near” the Korean DMZ as determined by the Secretary of the VA, in consultation with the Department of Defense (“DoD”), between September 1, 1967 and August 31, 1971; and
  2. was determined by the Secretary, in consultation with the DoD, “to have been exposed to a herbicide agent during such service in or near the Korean [DMZ].”

Although Congress knew that herbicide use near the Korean DMZ ended in 1969, the legislative history indicated that it extended the covered period through August 1971 “to account for residual exposure.”

In 2003, the Veterans Benefits Administration amended its Adjudication Procedure Manual (the “VBA Manual”) to state that “[h]erbicide agents were used along the southern boundary of the [DMZ] in Korea between April 1968 and July 1969,” and that the DoD had “identified specific units that were assigned or rotated to areas along the DMZ where herbicides were used.” The VBA Manual indicated that herbicide exposure would be conceded for veterans who served in the units DoD identified between April 1968 and July 1969 (the “2003 manual rule”).

On November 1, 2004, the VBA revised the VBA Manual to implement the provisions of the Veterans Benefits Act of 2003 providing benefits for “individuals born with spina bifida who are the children of veterans who served with specific units in or near the DMZ in Korea between September 1, 1967 and August 31, 1971.” The 2004 revision continued to provide that the VA would concede that certain veterans who served in areas along the Korean DMZ between April 1968 and July 1969 were exposed to herbicides for purposes of their personal claims for benefits connected to such exposure.

The Proposed Rule

In 2009, the VA published a proposed rule to amend its regulations to incorporate relevant provisions of the Veterans Benefits Act of 2003. The VA proposed to “presume herbicide exposure for any veteran who served between April 1968 and July 1969 in a unit determined by VA and DoD to have operated in an area in or near the Korean DMZ in which herbicides were applied.” The VA also proposed that, if a veteran “served in or near the Korean DMZ” between September 1, 1967 and August 31, 1971, but not within the time periods and geographic locations that would qualify for a presumption of exposure under the proposed rule, that service would qualify for benefits only if the VA determined that the veteran “was actually exposed to herbicides during such service.”

In the notice of proposed rulemaking, the VA explained that there was “currently no specific statutory authority for providing a presumption of exposure to herbicide agents to veterans who served in Korea.” Although the 2003 Veterans Benefits Act was silent with respect to creating a presumption for the veterans themselves, as distinct from their children, the VA stated that it would be “illogical to conclude that the children with spina bifida of the covered veterans have the disability due to the veteran’s exposure to herbicide agents, but not to presume that the veteran himself was exposed to herbicide agents and merits VA benefits for any disabilities associated with that exposure.” The VA found that “such a presumption would comport with known facts and congressional intent” and was within the VA’s “general rulemaking authority.”

The Final Rule

After receiving comments regarding the proposed rules, the VA published a final rule notice on January 25, 2011, extending the time period in which herbicide exposure was presumed ? from the period April 1, 1968 to July 31, 1969 ? by more than two years, to the period April 1, 1968 to August 31, 1971.

In adopting this change, the VA explained that it was “reasonable and consistent with the intent of Congress to concede exposure for veterans who served in or near the Korean DMZ after herbicide application ceased, because of the potential for exposure to residuals of herbicides applied in that area.”

Accordingly, the VA revised the rule “to presume herbicide exposure for veterans who served in or near the Korean DMZ between April 1, 1968, the earliest date of potential exposure indicated by DoD, and August 31, 1971, the date identified by Congress” in the Veterans Benefits Act of 2003 as a reasonable outside date for residual exposure.

The final rule was effective February 24, 2011 and was made applicable to all applications for benefits received by the VA on or after February 24, 2011 and to all applications for benefits that were pending before the VA, the U.S. Court of Appeals for Veterans Claims, or the U.S. Court of Appeals for the Federal Circuit on February 24, 2011.

Petition for Rulemaking

On January 28, 2014, a veteran, the National Veterans Legal Services Program, the Military Order of the Purple Heart, the Vietnam Veterans of America, and The American Legion (collectively, the “petitioners”) sent a letter to the Secretary of the VA requesting that he change the effective date of the 2011 regulation from February 24, 2011 to November 1, 2004, the date of the 2004 revision to the VBA Manual.

The VA denied the petitioners’ request to revise the 2011 regulation’s effective date. The VA stated that the effective date selected was consistent with its “usual and longstanding practice” to make substantive rules effective prospectively from the date that was 30 days after the date of their publication in the Federal Register and that this approach ensured that the regulations were “applied in a fair, consistent, and efficient manner.”

The VA also indicated that the 2011 regulation’s February 24, 2011 effective date was consistent with the federal law that provided, in part, that where compensation was awarded or increased pursuant to any act or administrative issue, the effective date of such award or increase “shall not be earlier than the effective date of the Act or administrative issue.” The VA further explained that retroactivity was not favored in the law, and that agencies had limited authority to issue retroactive regulations.

The petitioners petitioned for review by the U.S. Court of Appeals for the Federal Circuit, arguing that the 2011 regulation’s effective date precluded compensation prior to February 24, 2011 for Korean DMZ veterans who could not prove actual exposure to herbicides, who did not satisfy the service requirements in the 2003 manual rule, and who had filed claims before that date.

The Federal Circuit’s Decision

The Federal Circuit upheld the VA’s decision denying the petition, holding that the effective date of the 2011 regulation was “not arbitrary, capricious, or in violation of law.”

The Federal Circuit found that the VA had adequately explained its reasoning for assigning a prospective date to the 2011 regulation, including that “it would be unfair for VA to assign a retroactive effective date to the 2011 regulation . . . while not similarly assigning a retroactive effective date to other regulations VA issues that establish entitlement to benefits for other groups of Veterans.”

Moreover, the circuit court continued, the petitioners cited no statutory authority requiring the VA to assign retroactive effective dates to its regulations.

Finally, the Federal Circuit said that it agreed with the government that the 2011 regulation’s effective date was not arbitrary or capricious “simply because it may require application of different standards for different time periods.”

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Lawsuit Seeks Damages for Alleged Contamination from Maryland’s Fort Detrick

Individuals living near the U.S. Army base at Fort Detrick, in Maryland, have filed a class action alleging that they have been harmed by toxic chemicals on or emanating from the site.

The plaintiffs alleged that Fort Detrick was “the world’s leading research campus for biological agents requiring specialty containment” during the Cold War. The plaintiffs asserted in their complaint that a landfill at Fort Detrick contained “sterilized anthrax, radiological tracer materials, the lethal chemical agent phosgene, industrial waste, herbicides, and defoliants including known carcinogens in their formulation.” In their lawsuit, the plaintiffs complained that “Agent Orange, dioxin, radioactive materials, anthrax, Ebola, tetrachloroethene (PCE), and trichloroethene (TCE)” had been permitted “to contaminate the property and the vicinity surrounding” Fort Detrick.

The plaintiffs are demanding $750 million in damages.

The U.S. Army recently denied over 100 claims, seeking approximately $3.8 billion, for injuries allegedly suffered as a result of contamination at Fort Detrick, and a court recently dismissed a developer’s lawsuit against Fort Detrick, seeking approximately $37 million in damages.

Last September, Maryland’s health department said that it could not find a cancer cluster near Fort Detrick.

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Cities Sue Monsanto, Alleging that Its Chemicals Polluted the Environment

The San Diego Unified Port District and the city of San Diego have sued the Monsanto Company, seeking to hold it responsible for polychlorinated biphenyls (“PCBs”) in and around the San Diego Bay.

The lawsuit does not specify the amount of damages the plaintiffs are seeking.

Monsanto also has been sued recently by the city of San Jose, California, which alleged that the company polluted the San Francisco Bay with PCBs, and by the city of Spokane, Washington, which alleged that the company polluted the Spokane River with PCBs.

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