Citation Nr: 1321067	
Decision Date: 07/01/13    Archive Date: 07/12/13

DOCKET NO.  09-49 372	)	DATE
	)
	)

On appeal from the
Department of Veterans Affairs Regional Office in Muskogee, Oklahoma


THE ISSUE

Propriety of the reduction of the Veteran's VA compensation benefits during his period of incarceration for a felony offense.


REPRESENTATION

Appellant represented by:	Disabled American Veterans


ATTORNEY FOR THE BOARD

John Kitlas, Counsel






INTRODUCTION

The Veteran served on active duty from April 2002 to September 2003, including service in Iraq from April to July 2003.

This matter is before the Board of Veterans' Appeals (Board) on appeal from decisions by the Department of Veterans Affairs (VA) Regional Office (RO) in Muskogee, Oklahoma, which reduced the Veteran's VA compensation benefits to 10 percent, effective May 6, 2008.

As an additional matter, the Board notes that the Veteran's accredited representative asserted in a May 2013 statement that there is no indication the agency of original jurisdiction (AOJ) informed the Veteran that his dependents could file for an apportionment of the compensation amount that is withheld.  Granted, the representative's assertion on this matter does indicate the Veteran is aware of this matter.  See Mayfield v. Nicholson, 19 Vet. App. 103 (2005), reversed on other grounds, 444 F.3d 1328 (Fed. Cir. 2006) (VA can demonstrate that a notice defect is not prejudicial if it can be demonstrated ... that any defect in notice was cured by actual knowledge on the part of the appellant that certain evidence (i.e., the missing information or evidence needed to substantiate the claim) was required and that the appellant should have provided it.); see also Overton v. Nicholson, 20 Vet. App. 427 (2006).  In any event, this assertion does not pertain to the adjudication of the issue currently on appeal.  Therefore, the Board does not have jurisdiction over it, and it is referred to the AOJ for appropriate action.


FINDINGS OF FACT

1.  The Veteran is service-connected for posttraumatic stress disorder (PTSD), evaluated as 50 percent disabling; and a right knee disorder, evaluated as 10 percent disabling.  His overall combined disability rating is 60 percent.

2.  The record reflects the Veteran has been incarcerated at a local or State correctional facility since October 2006.

3.  The Veteran was convicted of a felony on March 6, 2008, and sentenced to life imprisonment.

4.  The law mandates that a veteran who is incarcerated in a Federal, State, or local penal institution in excess of 60 days for conviction of a felony committed after October 7, 1980, and who has a combined rating of 20 percent or more shall not be paid compensation in excess of the amount payable for a disability evaluated as 10 percent disabling beginning on the 61st day of incarceration.  


CONCLUSION OF LAW

Inasmuch as the reduction of the Veteran's VA compensation benefits to 10 percent was proper, the benefit sought on appeal is denied.  38 U.S.C.A. § 5313 (West 2002 & Supp. 2012); 38 C.F.R. § 3.665 (2012).


REASONS AND BASES FOR FINDINGS AND CONCLUSION

The Board notes at the outset that, in accord with the Veterans Claims Assistance Act of 2000 (VCAA), VA has an obligation to notify claimants what information or evidence is needed in order to substantiate a claim, as well as a duty to assist claimants by making reasonable efforts to get the evidence needed.  See 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A and 5107 (West 2002 & Supp. 2012); 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a) (2012); see also Quartuccio v. Principi, 16 Vet. App. 183, 187 (2002).  

The Board notes, however, that for the reasons detailed below the Veteran's appeal must be denied as he is not entitled to a rating in excess of 10 percent as a matter of law.  In VAOPGCPREC 5-2004 (July 23, 2004) VA's Office of General Counsel held that the VCAA does not require either notice or assistance when the claim cannot be substantiated under the law or based on the application of the law to undisputed facts.  Similarly, the United States Court of Appeals for Veterans Claims (Court) has held that the VCAA is not applicable to matters in which the law, and not the evidence, is dispositive.  See Mason v. Principi, 16 Vet. App. 129, 132 (2002).  

The Board does observe that the Veteran has had the opportunity to present evidence and argument in support of his appeal, and all other procedural due process matters have been satisfied.  For example, he was notified of the proposed reduction of his VA compensation benefits effective May 6, 2008, by a September 2008 letter.  He was also informed he had 60 days to submit any evidence or argument he desired, and he did so by a statement received in October 2008.  Thereafter, a November 2008 letter informed him that the reduction had gone into effect from May 6, 2008.

The Board notes that it has thoroughly reviewed the record in conjunction with this case.  Although the Board has an obligation to provide reasons and bases supporting this decision, there is no need to discuss, in detail, the extensive evidence submitted by the appellant or on his behalf.  See Gonzales v. West, 218 F.3d 1378, 1380-81 (Fed. Cir. 2000) (The Board must review the entire record, but does not have to discuss each piece of evidence).  Rather, the Board's analysis below will focus specifically on what the evidence shows, or fails to show, on the claims.  See Timberlake v. Gober, 14 Vet. App. 122, 129 (2000) (Noting that the Board must analyze the credibility and probative value of the evidence, account for the evidence which it finds to be persuasive or unpersuasive, and provide the reasons for its rejection of any material evidence favorable to the claimant).  

A veteran who is incarcerated in a Federal, State, or local penal institution in excess of 60 days for conviction of a felony committed after October 7, 1980, and who has a combined rating of 20 percent or more shall not be paid compensation in excess of the amount payable for a disability evaluated as 10 percent disabling beginning on the 61st day of incarceration.  38 U.S.C.A. § 5313; 38 C.F.R.§ 3.665.

In this case, the Veteran is service-connected for PTSD, evaluated as 50 percent disabling; and a right knee disorder, evaluated as 10 percent disabling.  His overall combined disability rating is 60 percent.  See 38 C.F.R. § 4.25.  The record also reflects that he was convicted of murder in the first degree on March 6, 2008, and sentenced to life.  His term was to begin in April 2008.  The record also reflects he had been incarcerated at a county/local facility since October 2006, and was transferred to a State facility in April 2008.  Therefore, May 6, 2008, was the 61st day of incarceration since his conviction for a felony, and his rating was properly reduced as of that date.

The Veteran has not disputed that he was convicted of a felony, or that the reduction was effective on the 61st day of his incarceration therefor.  Rather, he maintains that the reduction of his benefits is inconsistent with the law and the legislative intent behind 38 U.S.C.A. § 5313.  For example, he contended in a January 2013 statement that 38 U.S.C.A. § 101(1)(13) definition of "compensation" does not state it is for support, but solely as compensation for disabilities incurred while serving our country, for which the Veteran noted he received an honorable discharge and permanent disabilities incurred.  The Board notes, however, that as the definition of "compensation" cited by the Veteran was drafted by Congress, who in turn also drafted 38 U.S.C.A. § 5313, they were clearly aware of this definition when they determined that a veteran in receipt of compensation benefits at a rate of 20 percent or more was entitled to no more than a 10 percent rate of compensation beginning the 61st day of incarceration for a felony.

The Veteran has also cited to precedent opinions of VA's General Counsel in support of his claim, specifically VAOPGCPRECs 10-2001 and 59-91.  See June 2009 Notice of Disagreement (NOD); January 2013 statement.  He contends that these opinions found that veterans who are required to contribute to their own incarceration "would continue to rely on veterans' benefits for support" and that he was required to contribute to his or her maintenance while incarcerated.  He asserted that VAOPGCPREC 59-91 stated that a person sentenced to community control, who is either living at home or required to contribute to his or her maintenance under the provisions of specified State statutes, would not be maintained by government funds provided for operation of a penal institute and would continue to rely on veterans' benefits for support; and that reducing benefits to such a person would not further the congressional purpose of avoiding duplicate governmental expenditures to provide maintenance for convicted felons.  The Veteran asserted to not apply this to all affected veterans would constitute a clear violation of the Equal Protection Clause and of everything for which the Veterans Benefits Act stands.  

Citing to Oklahoma Department of Corrections (ODOC) OP-140117, the Veteran contends that he is required to support himself by providing medical co-pays, to include for his service-connected disabilities.  He also cited to ODOC OP-060107, and stated that he was required to pay for his own hygiene and laundry products, additional clothing, food, and stationary.  Further, he stated that he was required to purchase a fan due to excess heat; that it was not a creature comfort; and not provided by the State.  He also stated that he paid for his own clothing, groceries, and stationary (to maintain contact with my family and children) - usually at prices greatly inflated in comparison to non-prison vendors.

The Board has reviewed VAOPGCPRECs 10-2001 and 59-91, as well as Ops 140117 and 060107 from the ODOC website.  Initially, the Board observes that the VAOPGCPRECs were for the purpose of determining whether the veterans in those cases were incarcerated in a in a Federal, State, or local penal institution for the purposes of 38 U.S.C.A. § 5313.  VAOPGCPREC 10-2001 involved veterans who were convicted and incarcerated in a foreign country, while 59-91 involved a veteran whose sentence consisted of "community control with conditions."  The Board further notes that in making this determination one of the things considered in both Opinions was that the legislative history of 38 U.S.C.A. § 5313 reflected that its purpose was not a penalty or punishment for conviction of a crime, but to eliminate a double burden on United States taxpayers where an incarcerated veteran is already being supported by government funds provided for the operation of a penal institution.  See VAOGCPREC 10-2001, Par. 9; VAOPGCPREC 59-91, Par. 6.  Moreover, the Opinions also looked to whether the veterans were required to provide their own basic necessities.  See VAOGCPREC 10-2001, Par. 10; VAOPGCPREC 59-91, Par. 7.  The Board also acknowledges that in Latham v. Brown, 4 Vet. App. 265 (1993), aff'd 11 F.3d 1070 (Fed. Cir. 1993) (table), the United States Court of Appeals for Veterans Claims (Court) observed that, according to the legislative history, Congress believed persons who were incarcerated were already charges of the public and did not require additional monetary benefits.  The Court further stated that the legislative history also reflected an intention "to prevent prisoners from being able to purchase contraband, particularly narcotics."  Id. at 268.  

The Board notes, however, that there were other factors present in the aforementioned VAOPGCPRECs that were relevant to the ultimate conclusion reached in those cases that are not present in the Veteran's appeal.  For example, General Counsel concluded in VAOPGCPREC 10-2001, Par. 7, that the statutory clause "Federal, State, or local" referred to penal institutions within the United States and under the control of the United States Federal Government or a State or local government of the United States.  The Veteran does not contend, nor does the record otherwise reflect, that the institutions in which the Veteran was incarcerated since October 2006 were not in control of a local or State government of the United States.

In VAOPGCPREC 59-91, General Counsel also looked at the State statutory definitions for "community control," and "state correctional institution" were incompatible.  In pertinent part, General Counsel noted that a "state correctional institution" was an institution in which prisoners are housed, worked or  maintained, under the custody and jurisdiction of the Department of Corrections, while persons sentenced to "community control" are housed within the community, home, or a noninstitutional residential placement "community control.  In this case, the record reflects the Veteran is housed and in the custody of a State correctional facility.

The Board also acknowledges that VA's General Counsel has held that parole was not incarceration (VAOPGCPREC 2-96); that a person hospitalized after being found not guilty by reason of insanity was not incarcerated (VAOPGCPREC 3-90).  Moreover, as noted in VAOPGCPREC 2-96 and 10-2001, the statute itself (38 U.S.C.A. § 5313(a)(2)) states that the reduction provisions do not apply with respect to any period during which a person is participating in a work-release program or is residing in a halfway house.  None of these conditions are demonstrated to apply to the current appeal.

In short, the record reflects that the Veteran has been incarcerated in local and State penal institutions as contemplated by 38 U.S.C.A. § 5313 since October 2006.  Nothing in the facts of this case indicates he is in facility or situation that has been determined not to constitute incarceration under the provisions of this statute by either VA's Office of General Counsel or the statute itself.  The Board also observes that the United States Court of Appeals for the Federal Circuit (Federal Circuit) held in Wanless v. Shinseki, 618 F.3d 1333 (Fed. Cir. 2010), that a privately operated prison under contract with the State of Oklahoma was a State penal institution for purposes of 38 U.S.C.A. § 5313, which is the same conclusion reached by VA General Counsel in VAOPGCPREC 5-2006.  As the Veteran is incarcerated in Oklahoma, the Wanless case indicates that any facility operated or contracted to the State's Department of Corrects is properly considered a State penal institution for the purposes of 38 U.S.C.A. § 5313.

In view of the foregoing, the Board finds that the Veteran is not being treated differently than any other similarly situated veteran; that is one who has been assigned a rating of 20 percent or more for service-connected disability(ies), and who has been convicted of a felony and has been incarcerated for more than 60 days at a local and/or State penal institution.  In short, his situation does not appear to be in violation of the Equal Protection Clause as he has contended.  

To the extent the Veteran contends this reduction is in violation of the Veterans Benefits Act, the Board reiterates that this statutory limitation was enacted by Congress, which also enacted all other statutory benefits for veterans under Title 38 of the United States Code.  As Congress determined the limitation was consistent with the statutory scheme, VA itself does not have any authority to change that determination.

The Board acknowledges that review of OP-140117 on the State's Department of Corrections website reflects that it does detail health care access for incarcerated offenders.  Further, it does show offenders have co-pays for certain treatment.  Specifically, a $2 copayment fee for each offender-initiated request for medical, dental or optometric service, and $2 for each medication issued during an offender-initiated clinic visit.  A co-pay of $25 per emergency room visit will be assessed for any offender assigned to work release, if the emergency room visit does not result in a hospital admission.  However, this indicates that the expense of such medical treatment above the co-pay amount is furnished by the Department of Corrections (i.e., at taxpayer expense).  Moreover, this document specifically states that offenders will not be refused health care because of their financial status.  Additionally, offenders will not be charged a $2 copayment fee for the following: physical examinations and health assessments; medical provider- initiated health care services, including any medical, dental, and optometric follow-up treatment, that may be recommended by a medical provider, and can be scheduled on a subsequent clinic visit; laboratory services; radiological services; immunizations, tuberculosis screening, vaccinations, and any other treatment prescribed for public health concerns; mental health services; initial health assessments conducted during the reception process at the assessment and reception center; EKG's, dressing changes, and other treatments prescribed by a healthcare provider; prenatal, perinatal, and clinically indicated postpartum care; public or private health care facilities; initial acute care treatment rendered for an on-the-job injury; prescription medications prescribed for asthma, coronary artery disease, chronic obstructive pulmonary disease, diabetes mellitus, Hepatitis C, HIV, hypertension, seizures, and mental health disorders; specific prescription medications which are exempt from a $2.00 copayment fee are listed in "Medications Exempted from $2 per Medication Co-pay" (Attachment A); and emergency or trauma care (i.e., life threatening medical conditions).

Review of OP-060107 on the State's Department of Corrections website indicates that it specifies each offender is assigned a specific level of incarceration, with different privileges and restrictions for each such level.  Although OP-060107 does specify that each offender is required to maintain good hygiene and grooming habits and maintain a clean and orderly living area at the standards required for their assigned level, and that such maintenance can lead to a level promotion or demotion, there is no indication in the document itself that offenders are required to pay for such products.  This document also notes that each offender is limited to spending no more than $120 each week in the canteen.  This suggests that the institution does provide offenders with basic necessities such as food and clothing, and that an offender has the option of purchasing additional and/or different such items. 

As such, the record indicates that the Veteran is being provided with necessities by government funds during his incarceration.  Moreover, as already noted, there does not appear to be any dispute as to the fact that he has been incarcerated in local and State penal institutions since October 2006; nor that the Veteran was convicted of a felony.  The statute is clear and explicit that VA must reduce the compensation benefits to 10 percent for a veteran who is in receipt of benefits at a rate of 20 percent on the 61st day of incarceration following the conviction of a felony.

The Board also notes that in Latham, supra, the Court addressed the issue of reduction of benefit payments to Veterans who were incarcerated felons under 38 U.S.C.A. § 1505(a) and 38 C.F.R. § 3.666, to include whether it violated the United States Constitution.  The Court noted that "in order to demonstrate a constitutional violation, appellant must show that the classification is arbitrary or does not bear any rational relationship to a legitimate government interest."  Latham, 4 Vet .App. at 267.  The Court ultimately concluded that the statute and regulation cited above were not ex post facto laws or bills of attainder and did not violate the Fifth Amendment of the Constitution.  Therefore, there is no authority the Board can find to overturn or ignore the statute and regulation at issue in this case as promulgated. 

The Veteran also contended that 38 U.S.C.A. § 5313 should more reflect a balance between the objective of reducing compensation to veterans "already supported by public finds," and the objective of honoring the government's moral obligation to compensate veterans for their service-connected disabilities without regard to financial need.  He cited to various caselaw of the United States Supreme Court which he contended supported this assertion.  Citing to Hatzlach Supply Co., Inc. v. United States, 444 U.S. 460, 464-65, 100 S. CT. 647, 650, 62, L.Ed.2d 614 (1980), he asserted that Congress intended the Veterans' Benefits Act - NOT the State of Oklahoma - to be "the sole remedy for service-connected injuries."  He also indicated the following cases supported this assertion: Jaffee v. United States, 663 F.2d 1226, 1235-38 (3rd Cir. 1981), cert den.,  456 U.S. 972, 102 S.Ct. 2234, 72 L.Ed.2d 845 (1982); Stencel Aero Engineering Corp v. United States, 431 U.S. 666, 6673, 97 S.Ct. 2054, 2058, 52 L.Ed.2d 665 (1977).  The Board observes, however, that the Hatzlach case did not involve a claim for veterans' benefits.  Rather, the Supreme Court stated that the issue was whether the United States may be held liable for breach of an implied contract of bailment when goods are lost while held by the United States Customs Service (USCS) following their seizure for customs violations.  Granted, the Supreme Court did note in its discussion of this case that it previously held in Stencel that the United States is not liable under the Tort Claims Act to indemnify a third party for damages paid to a member of the Armed Forces who was injured in military training, finding that the Veterans' Benefits Act was intended to be the sole remedy for such injuries.  The Third Circuit Court of Appeals made a similar finding in dismissing the claimant's contentions in that case that they could sue the government under the provisions of the U.S. Constitution.  The Veteran also cited United States v. Johnson, 107 S.Ct. 2063, 481 U.S. 681 (1987) that the statutory veterans' benefits "provid[e] an upper limit of liability for the Government as to service-connected injuries."  The Board notes, in that case, the Supreme Court barred the widow of a serviceman killed while piloting a helicopter on a United States Coast Guard rescue mission from bringing her claim under the Federal Tort Claims Act.  

Granted, the aforementioned caselaw does stand for the proposition that injuries sustained by service members while performing military duty are to be compensated through the veterans' benefits system of Title 38, United States Code, and not the Federal Tort Claims Act.  However, none of these cases discusses the specific limitations and requirements of Title 38, and certainly do not address the provisions of 38 U.S.C.A. § 5313 that are the focus of this appeal.

The Veteran also cited to Grove City College v. Bell, 104 S.Ct. 1211, 1237, 465 U.S. 455 (1984) that "payments to veterans enrolled at approved schools serve to defray the costs of the educational program of the schools thereby releasing institutional funds, which would, in the absence of federal assistance, be spent on student ..."  The Veteran asserted that compensation paid to incarcerated veterans would serve to defray the costs of maintaining these veterans.  Thereby releasing funds which would, in the absence of service-connected disability compensation, be spent to maintain the veteran.  The Board observes, however, that in the Grove City case the Supreme Court addressed whether Title IX could be applied to a private school that refused direct federal funding, but where a large number of students had received federally funded scholarships.  In other words, that case did not specifically address the issues that are discussed in this case.  Moreover, the language used by the Veteran regarding defraying costs at the institution would appear only to apply if his compensation benefits were sent directly to the institution itself, and not to the Veteran which is what he is advocating.

Finally, the Board notes that to the extent the Veteran contends a better scheme should be implemented for 38 U.S.C.A. § 5313, that involves legislative policy which is the province of Congress and not VA.  As such, any change he advocates should be directed at Congress as VA has no authority to make this change.

For these reasons, the Board concludes that the benefit sought on appeal must be denied as the law mandates reduction of compensation to 10 percent when a veteran in receipt of a rating of 20 percent or more is convicted of a felony and is incarcerated for more than 60 days at a Federal, State, or local penal institution.  Nothing in the record indicates the Veteran does not satisfy these statutory requirements.  Where, as here, the law and not the evidence is dispositive of the claim, the claim must be denied because of lack of legal merit or lack of entitlement under the law.  Sabonis v. Brown, 6 Vet. App. 426 (1994). 


ORDER

Inasmuch as the reduction of the Veteran's VA compensation benefits to 10 percent was proper, the benefit sought on appeal is denied.  


____________________________________________
STEVEN D. REISS
Veterans Law Judge, Board of Veterans' Appeals

Department of Veterans Affairs