[00:00:00] Speaker 01: This case is two zero one six dash two six nine three Savo versus United States. [00:00:11] Speaker 01: Mr. Is it Canizares? [00:00:14] Speaker 04: Canizares. [00:00:15] Speaker 01: Canizares. [00:00:16] Speaker 01: Canizares. [00:00:19] Speaker 04: Please proceed. [00:00:20] Speaker 04: Good morning and may it please the court. [00:00:21] Speaker 04: This court should reverse the trial court's decision awarding attorney's fees in this case for two reasons. [00:00:27] Speaker 04: The fee petition filed by the plaintiffs was untimely. [00:00:30] Speaker 04: And secondly, the trial court's substantial justification findings contained reversible error. [00:00:37] Speaker 04: Beginning first with the timeliness question, the court below entered a decision on December 22, 2011 that approved a settlement agreement that it agreed between the parties. [00:00:49] Speaker 04: The EJA, the statute at issue here, defines final judgment as a judgment that is final and not appealable and includes an order of settlement. [00:00:58] Speaker 04: The government's position is that that December 2011 order constituted an order of settlement for purposes of EJA that then triggered that 30-day deadline for filing a timely fee application. [00:01:09] Speaker 00: At the time that that was entered, had the claims in the case been dismissed at the same time? [00:01:15] Speaker 00: My understanding is that there were many claims still in the case at the time that the settlement order was approved. [00:01:22] Speaker 00: And so our decisions like Silicon Image talk about how [00:01:27] Speaker 00: you know, a final judgment requires that the claims actually be dismissed. [00:01:32] Speaker 00: How do you respond to that? [00:01:34] Speaker 04: Your Honor, it is correct that the claims themselves were not dismissed because the settlement agreement, what it contemplated and what the settlement agreement that the court adopted, provided for, was that there would be dismissal with prejudice of the claims as the particular correction of a particular plaintiff's military records was undertaken. [00:01:53] Speaker 04: With respect to Silicon Image, as the government has argued in our briefs, we don't believe that that case is controlling. [00:01:59] Speaker 04: And there are a couple of reasons for that. [00:02:00] Speaker 04: There is language in that case that does suggest, of course, that dismissal would be required for a final judgment. [00:02:07] Speaker 04: However, what the court said in that case, and it was a patent case and not a class action for one, but it said that in the next sentence after the one that the parties of the plaintiffs referred to, it says that dismissal acts as a, quote, full adjudication on the merits. [00:02:22] Speaker 04: In our view, there was a full adjudication on the merits with respect to the claims in the settlement agreement that the court adopted. [00:02:29] Speaker 04: It was a consent decree in substance because the December 2011 decision that the court entered, and I'll read from the settlement agreement itself, it said its stated purpose was to, quote, dispose of the claims without any further judicial proceedings, without any trial or adjudication of any issue or law of fact. [00:02:50] Speaker 04: And under those circumstances, we are much more in the world of a consent decree where a court has adjudicated all the issues or has adopted a settlement agreement with the parties subject to some enforcement, some implementation matters. [00:03:03] Speaker 04: And there are cases we cite to an example in 2013 called Slaughter, which was affirmed by the 11th Circuit, where you did have a consent decree that then provided for some future dismissal in the future. [00:03:17] Speaker 04: We believe that the trial court erred [00:03:19] Speaker 04: when it said that there was a general rule that required dismissal in order for a settlement agreement to constitute a final judgment. [00:03:27] Speaker 04: We think this is much more like the consent decrees that the Supreme Court recognized in RUFO, or this court recognized in W.L. [00:03:36] Speaker 04: Gore, where you have a consent decree that is the equivalent of a final judgment. [00:03:40] Speaker 04: The Aegis statute itself in the legislative history recognizes that a settlement agreement can constitute a final judgment. [00:03:48] Speaker 00: We don't think this is any different. [00:03:50] Speaker 00: Did you have something else you wanted to add? [00:03:51] Speaker 04: No, Your Honor. [00:03:52] Speaker 00: I was just going to ask about the legislative history. [00:03:54] Speaker 00: I mean, it also says that you don't want these deadlines to become a trap for the unwary. [00:03:59] Speaker 00: And it seems like this is at least a very difficult and close issue. [00:04:07] Speaker 00: So I just wonder whether that legislative history undermines your position. [00:04:14] Speaker 00: It doesn't seem to be me that there's a really clear answer here that's in your favor. [00:04:19] Speaker 04: Well, Your Honor, with respect to trap for the unwary, I'd make a couple of observations. [00:04:23] Speaker 04: That certainly is part of what was contemplated by Congress here. [00:04:26] Speaker 04: But the 30-day deadline is also meaningful, and Congress wanted that deadline to establish some finality for purposes of these motions. [00:04:32] Speaker 04: But a deadline from what? [00:04:35] Speaker 04: It is a question as to when it applies. [00:04:37] Speaker 04: And we're also talking about a waiver of sovereign immunity, which has to be narrowly construed. [00:04:42] Speaker 04: But on these facts, there is also not a trap for the unwary. [00:04:44] Speaker 04: And as we noted in our brief, [00:04:46] Speaker 04: When the parties presented the settlement agreement, and they were operating under Rule 23 of the court's rules as a class action, they filed a motion for preliminary approval. [00:04:55] Speaker 04: Once the class members were notified in accordance with that procedure, there was a final approval. [00:04:59] Speaker 04: But when the parties presented that, they specifically said that they would have the plaintiffs reserve the rights, because they carved out the attorney's fees. [00:05:07] Speaker 04: They couldn't reach agreement on that in the settlement agreement. [00:05:09] Speaker 04: But they specifically said that the plaintiff reserved the right to file something within 30 days [00:05:15] Speaker 04: of the court's approval of the settlement agreement. [00:05:17] Speaker 04: And we believe that that demonstrates, if anything, that the plaintiffs were aware that there was not some open-ended amount of time that they could file their fee application. [00:05:27] Speaker 04: We don't believe, and this is sophisticated counsel that was representing these parties, that there was some trap for the unwary that the plaintiffs fell into. [00:05:34] Speaker 04: In addition to that, when they ultimately filed their fee application, it was some 293 days later. [00:05:39] Speaker 04: And there was no sort of triggering event to that. [00:05:42] Speaker 04: And the other important point I would make that I think relates to your question, Judge Stoll, is the trial court found that they were prevailing parties because of the decision that was entered in 2011, the December 2011 decision. [00:05:56] Speaker 04: And under the Supreme Court's case law that this court has recognized that the Buchanan decision in particular, prevailing party status is established when the court [00:06:04] Speaker 04: does something that confers or changes the legal relationship between the parties. [00:06:09] Speaker 04: And the trial court goes on at some length, I think it's at page 28 and 29 of the appendix, in saying why this settlement agreement that was adopted by the court is the functional equivalent of a consent decree in order to reach the conclusion that the plaintiffs were prevailing parties. [00:06:26] Speaker 04: But what it doesn't do is then follow the logical conclusion of that analysis to say, well, it's also a final judgment. [00:06:33] Speaker 04: In our view, that was sort of an irreconcilable inconsistency that the trial court made. [00:06:39] Speaker 00: Do I understand your view to be that all consent orders are final judgments? [00:06:44] Speaker 04: No, Your Honor. [00:06:44] Speaker 04: And I think we've noted in our reply brief, you could have a situation where there's a consent decree that resolves some portion of the claims in a case and maybe reserves others. [00:06:55] Speaker 04: That's certainly not the case here. [00:06:57] Speaker 04: And again, there's language at page 838 of the appendix and 825. [00:07:02] Speaker 04: in the settlement agreement itself that said that the plaintiffs had expressly agreed to settle, release, waive, and abandon each and all of their claims. [00:07:11] Speaker 04: So there were no more claims after that settlement agreement was adopted. [00:07:15] Speaker 01: What the court was doing after... But in paragraph 6 of the settlement agreement, it expressly says, the agreement says, following final approval of the agreement and entry of judgment. [00:07:25] Speaker 01: So you all drafted the settlement agreement, correct? [00:07:27] Speaker 01: The government? [00:07:28] Speaker 04: Your Honor, it was a negotiated settlement agreement. [00:07:31] Speaker 01: But you participated in drafting it, the government did. [00:07:34] Speaker 01: And it has a condition precedent in itself. [00:07:38] Speaker 01: So while certainly settlement agreements can constitute final judgments for each of purposes, no doubt about that. [00:07:44] Speaker 01: I don't know that this one does because of the way in which it's drafted and the conditions precedent that it articulates itself. [00:07:51] Speaker 01: So you're talking about big legal cases. [00:07:54] Speaker 01: And you're trying to explain to me Devlin or Rabo or all these other cases. [00:07:58] Speaker 01: But my problem is that you chose particular language in this agreement. [00:08:03] Speaker 01: And I don't know how to get around that. [00:08:05] Speaker 01: When I look at that particular language, it leads me to the conclusion that both parties understood this to constitute a final judgment only after there was a dismissal. [00:08:14] Speaker 04: Your Honor, with respect to that particular language, we don't read that as saying that contemplating some future entry of judgment. [00:08:22] Speaker 04: There's other language in paragraph 20 which speaks to the court's [00:08:25] Speaker 04: reservation, retaining of jurisdiction for purposes of enforcement, et cetera. [00:08:29] Speaker 04: And it's there that there's no mention of entering some sort of future judgment. [00:08:34] Speaker 04: There was no indication at the time in the contemporaneous papers that suggested that there was going to be some future judgment. [00:08:42] Speaker 01: So I don't understand. [00:08:43] Speaker 01: Do I read that out of the agreement? [00:08:45] Speaker 01: I mean, you've made an argument which gives it no meaning in the context it's written in paragraph six. [00:08:50] Speaker 04: Well, Your Honor, I think our interpretation of that language would be that the entry of judgment was part of the settlement order itself, the order approving the settlement agreement. [00:09:00] Speaker 01: No, because the paragraph says, quote, following final approval of the agreement and entry of judgment. [00:09:08] Speaker 01: So you want me to read out one of the two terms. [00:09:10] Speaker 01: You have to. [00:09:11] Speaker 01: I don't see how else I can read the agreement in your favor, because you just said, no, entry of judgment really to us means final approval of the agreement. [00:09:19] Speaker 01: That's expressly contemplated in the sentence as two separate things. [00:09:22] Speaker 04: Well, Your Honor, I respectfully disagree in the sense that I think that language contemplates that there could be a final approval of the settlement agreement and entry of judgment that could be accomplished in one document. [00:09:33] Speaker 04: And we believe that that's what happened here when the court adopted the settlement agreement. [00:09:37] Speaker 01: So you believe that the final approval of the settlement agreement in this case, despite the fact that it doesn't constitute what you and I would normally understand as entry of judgment, right? [00:09:46] Speaker 01: typical understanding that you and I as lawyers would have for what constitutes entry of judgment. [00:09:50] Speaker 01: As a judge, I have a particular view of what that usually is. [00:09:54] Speaker 01: But you think that final approval here constitutes entry of judgment, even though it doesn't say so on its face. [00:10:00] Speaker 04: Well, Your Honor, yes, we do. [00:10:01] Speaker 01: And even though the agreement itself delineates them as two different things. [00:10:04] Speaker 04: Well, again, our interpretation is that it doesn't delineate them necessarily as needing to be accomplished in two different documents. [00:10:10] Speaker 04: But to the extent that [00:10:12] Speaker 04: It did require some sort of separate document of entry of judgment. [00:10:15] Speaker 04: Under the court's rules, there would have been a 150-day period in which, if the court had not entered some separate document called entry of judgment, it still would have been a judgment for purposes of finality. [00:10:28] Speaker 04: And the plaintiffs have latched onto this November 2016 document as being the final judgment. [00:10:34] Speaker 04: And there were a couple of problems with that. [00:10:36] Speaker 04: First of all, that November 16 judgment [00:10:39] Speaker 04: never was analyzed by the court, incidentally, because it was entered after the decision that you were reviewing. [00:10:45] Speaker 04: So the decision that you're reviewing, or really two, but the July 2016 decision with respect to awarding EGFEs came some several months before the November judgment. [00:10:54] Speaker 04: But the November judgment was entered after all of the claims had been dismissed. [00:10:59] Speaker 04: So as we suggested in our brief, there's a real question as to what validity that particular document had if all of the claims had already been dismissed at that point in time. [00:11:07] Speaker 04: Plaintiffs also offer no explanation as to why they filed their EJA application in 2012 if the final judgment didn't occur until four years later. [00:11:16] Speaker 00: Do they need one? [00:11:18] Speaker 04: I'm sorry? [00:11:19] Speaker 00: Do they need one? [00:11:20] Speaker 00: They don't need one. [00:11:21] Speaker 00: You can always file your EJA application early, right? [00:11:24] Speaker 00: There's nothing prohibiting that. [00:11:26] Speaker 04: Well, Your Honor, the Fifth Circuit, I think, in particular, has found that an EJA application needs to be filed. [00:11:34] Speaker 04: It's recognized it can be premature. [00:11:37] Speaker 04: It is true that a party can file before 30-day. [00:11:41] Speaker 04: It's not a window, in other words. [00:11:42] Speaker 04: You can file early. [00:11:44] Speaker 04: My point is simply that if they filed four years earlier, there's no connection to the final judgment. [00:11:49] Speaker 04: They would need the final judgment in order to get the EJA fees. [00:11:52] Speaker 04: So they don't offer an explanation as to why they would do it four years before the EJA fees could possibly become due. [00:11:59] Speaker 04: In addition, the Kaconin case and Schaeffer, this court's decision in Schaeffer, recognize that there's a distinction between [00:12:07] Speaker 04: the court its jurisdiction over the merits and its jurisdiction over more of an enforcement stage. [00:12:13] Speaker 04: We really think that the trial court ignored the way in which this was much more like a consent decree in the sense that they were moving into an enforcement phase. [00:12:22] Speaker 04: The parties were filing status reports with respect to particular plaintiffs in the record for multiple years, but really there was not an adjudication on the merits at that particular point in time. [00:12:35] Speaker 04: If I may, I'm going to turn to the question of substantial justification. [00:12:38] Speaker 01: You can, but at the expense of your rebuttal time. [00:12:40] Speaker 04: Well, I'd like to briefly make a couple of points, Your Honor. [00:12:43] Speaker 04: One is the trial court relied heavily on the so-called pre-litigation phase. [00:12:48] Speaker 04: And it made a number of mistakes, in our view. [00:12:50] Speaker 04: One is that the trial court relied heavily on its interpretation of 10 U.S.C. [00:12:54] Speaker 04: 1201 as requiring the Defense Department to apply the VA Schedule 4.129 to PTSD determinations. [00:13:03] Speaker 04: We think that that was incorrect. [00:13:04] Speaker 04: The statute says that these disability determinations are to be made, quote, under the standard schedule of rating disabilities in use by the VA. [00:13:14] Speaker 04: There's no dispute as to that. [00:13:16] Speaker 04: But 1216 of the statute, under 10 USC 1216, gives the Secretary of Defense rule-making authority and the power to all powers, functions, and duties incident to making these disability determinations. [00:13:34] Speaker 04: It's pursuant to that authority that the Department of Defense issued this instruction in 1996, which effectively said we will apply the VA schedule with respect to disability determinations, but there are aspects of the VA schedule which we don't believe apply to us. [00:13:49] Speaker 04: And one of them in particular are convalescent ratings that would be inherently temporary in nature. [00:13:55] Speaker 04: And that's set forth in its 1996 memorandum that we cite to. [00:14:00] Speaker 04: It's not as if the Defense Department disavowed the VA schedule in its entirety. [00:14:05] Speaker 04: And prior to 2008, the practice was to, based on then existing law, was to apply 4.130 of the VA schedule. [00:14:17] Speaker 04: And 4.130 sets forth a 0% to 100% rating criteria that one could apply to mental disorders, including PTSD. [00:14:27] Speaker 04: And there are multiple cases that the VA has in the VA context where VA has applied 4.130 in our brief at pages 1437, 1437. [00:14:39] Speaker 04: In the appendix, you'll see that we cite to a number of cases involving the Court of Federal Claims and recognizing the Defense Department's discretion to apply these sorts of rating criteria. [00:14:50] Speaker 04: And finally, I would just note on substantial justification, Your Honors, that [00:14:54] Speaker 04: After this case was filed, the parties reasonably attempted to settle it. [00:14:58] Speaker 04: There was a global resolution in terms of this particular case. [00:15:02] Speaker 04: But also, in July of 2009, the Defense Department decided to retroactively apply 4.129, all the way back to veterans who had been discharged from 2001 onward. [00:15:13] Speaker 04: And that was on a voluntary basis. [00:15:15] Speaker 04: So for these reasons, we respectfully request that the court reverse. [00:15:19] Speaker 01: Thank you. [00:15:21] Speaker 01: OK. [00:15:21] Speaker 01: Mr. Begg? [00:15:23] Speaker 03: Thank you, Your Honors, and may it please the Court. [00:15:25] Speaker 03: I will address timing first. [00:15:27] Speaker 03: Again, I think at the end of the day, we start and end with the language of statute. [00:15:31] Speaker 03: The 30 days begins to run when there is a final judgment. [00:15:34] Speaker 03: In this case, there are dismissals, and there is a true final judgment. [00:15:38] Speaker 03: But the government doesn't want to focus on those. [00:15:40] Speaker 03: It focuses on the 2011 settlement agreement. [00:15:44] Speaker 03: For that to have started, the clock to have run, you have to ignore the nature of that settlement agreement. [00:15:49] Speaker 03: which is materially indistinguishable from the agreement that was issued in this court's case in Silicon Image and the rule of Caitlin and the Supreme Court cases and other cases. [00:15:59] Speaker 03: And there's two aspects to that. [00:16:00] Speaker 03: One, is there a separate dismissal? [00:16:03] Speaker 03: OK, this settlement agreement, you don't look at it and say, is that it? [00:16:06] Speaker 03: Is the court done? [00:16:07] Speaker 03: There's a clear process, things that are going to happen, and there's going to be dismissals and then ultimately a judgment. [00:16:13] Speaker 03: And secondly, is it conditional? [00:16:16] Speaker 03: Do things have to happen? [00:16:17] Speaker 03: Now, in the Silicon Image case, it was a very simple condition. [00:16:20] Speaker 03: It was a payment by one party to another. [00:16:22] Speaker 03: Here, it's a lot more complicated, a lot more up in the air, a lot more involvement by the court. [00:16:26] Speaker 03: But they are a conditional, and there is a dismissal. [00:16:29] Speaker 03: And this court held in Silicon Image, we respectfully submit, applying well-settled law. [00:16:33] Speaker 03: That is not a final judgment. [00:16:35] Speaker 03: And at the end of the day, that's the beginning and the end of the story on the timing issue. [00:16:39] Speaker 03: Now, the government says three things about Silicon Image. [00:16:41] Speaker 03: First, they say it doesn't arise from a court-approved consent decree. [00:16:45] Speaker 03: Well, sure it did. [00:16:46] Speaker 03: It was an MOU between the parties that the court adopted. [00:16:49] Speaker 03: And it was a closer case than this one, because the court, when it adopted, said this is a final judgment. [00:16:53] Speaker 03: But the court didn't look at labels and looked at what had to happen there. [00:16:56] Speaker 03: It was a condition, and then there was going to be a dismissal. [00:16:59] Speaker 03: So that's not a valid distinction. [00:17:01] Speaker 03: Secondly, the government says it arose from the trial court's enforcement jurisdiction. [00:17:06] Speaker 03: I confess, after all the briefing here, I don't know what that means. [00:17:09] Speaker 03: Courts clearly have the ability to enforce orders that are not final judgments, a discovery order. [00:17:14] Speaker 03: Take a deposition in the next 30 days. [00:17:16] Speaker 03: And if you don't take that, the court can jump all over the party and make that deposition occur and impose sanctions. [00:17:20] Speaker 03: Courts enforce orders all the time when those orders are not final judgments. [00:17:26] Speaker 03: So to say that this court wasn't letting the parties go, they weren't done yet, things were going to have to happen, monthly status reports, I got calls from the judge's clerk. [00:17:36] Speaker 03: We want to have a status conference talking. [00:17:37] Speaker 03: That doesn't happen after there's a final judgment. [00:17:39] Speaker 03: So this notion and distinction between enforcement and pre-imposed final judgment, I think, is a fallacy. [00:17:46] Speaker 03: And it's a fallacy to say that because the court is implementing or enforcing, that necessarily means there was a final judgment, just not the case. [00:17:54] Speaker 03: And then thirdly, the government says, well, Silicon Image wasn't a class action. [00:18:00] Speaker 03: There is no case anywhere. [00:18:02] Speaker 03: ever that has said there's a different finality rule, a different age of timing rule for class action cases versus individual cases. [00:18:10] Speaker 03: They cite Devlin, which they didn't cite below. [00:18:11] Speaker 03: Devlin addressed a very limited set of circumstances, and it involved who can appeal, not when you can appeal. [00:18:18] Speaker 03: And there, it was a non-intervening class member in a 23b1 mandatory class. [00:18:24] Speaker 03: There's a split in the circuits even to this day over 23b2 and 3 cases where there's an opt-out right [00:18:30] Speaker 03: There is no case that I'm aware of that's ever applied Devlin to an opt-in class, which is this type of class unique to the rules of the Court of Federal Claims. [00:18:38] Speaker 03: So with respect to the timing, again, a couple of other points to make on that is there is no tension, as the government tries to suggest, between the settlement agreement approved by the court establishing prevailing party status, but yet not being the, quote unquote, final judgment for the EJA timing provisions. [00:18:58] Speaker 03: That happens. [00:18:59] Speaker 03: all the time. [00:19:00] Speaker 03: It happens, again, examples in the Haitian Refugee Center case in the 11th Circuit, the Gonzalez case cited by the government, the legislative history, and the government admits you can file a Egypt petition early. [00:19:13] Speaker 03: And to dispel one bit of mystery here, why we filed the petition when we did is because we were involved in settlement negotiations with the government. [00:19:19] Speaker 03: And ultimately, those broke down. [00:19:20] Speaker 03: And we weren't going to reach a settlement. [00:19:22] Speaker 03: And we went ahead and filed the motion at that point because we realized the court was going to have to resolve it. [00:19:28] Speaker 03: It was never conceived by certainly the plaintiffs or, respectfully, by the parties that the settlement agreement, when approved by the court, started the 30 days. [00:19:39] Speaker 03: We addressed that proposal in our brief. [00:19:42] Speaker 03: I direct the courts to one other point in the appendix. [00:19:45] Speaker 03: It's Appendix 852, where the language that you mentioned, Judge Moore, following a final approval of settlement and entry of judgment, respectfully, we submit there's no way to read that as one thing. [00:19:56] Speaker 03: That's two things, final approval, [00:19:58] Speaker 03: and entry of judgment. [00:19:59] Speaker 03: That was in the joint motion for final approval. [00:20:03] Speaker 03: The government signed off on that language. [00:20:06] Speaker 03: The court adopted that language in its order. [00:20:09] Speaker 03: So when you look at was this settlement agreement a trigger for EJA, you look at the language of the statute says final judgment. [00:20:19] Speaker 03: There's nothing that looks like a final judgment here. [00:20:20] Speaker 03: You look at Horn Book Law, the Moores Federal Practice Treatise, it says when the dismissals start to occur, those didn't happen for another year and a half. [00:20:27] Speaker 03: I look at the case law, what a silicon image says in this court. [00:20:30] Speaker 03: Silicon image says it's going to be triggered when the dismissal occurs. [00:20:36] Speaker 03: And you look at what the court itself said. [00:20:37] Speaker 03: The court itself said it's final approval and entry of judgment. [00:20:42] Speaker 02: So when the statute says N includes a settlement agreement, how would you translate that? [00:20:48] Speaker 03: I would acknowledge that there could be a settlement agreement that would be a final judgment. [00:20:54] Speaker 03: And again, that's not a silicon image. [00:20:57] Speaker 03: approved settlement agreement that's conditional A, and that B expressly by its terms refers to other dismissals. [00:21:03] Speaker 03: So you get it, for example, in the Rufo and W.L. [00:21:05] Speaker 03: Gore cases, the institutional litigation cases, where the court enters the consent decree and that's it. [00:21:13] Speaker 03: And there can be post-judgment enforcement, there can be things happening, but you look at the effect and language and intent of the agreement, and it's not, again, like the silicon image, [00:21:25] Speaker 03: conditional and doesn't expressly contemplate a separate dismissal. [00:21:30] Speaker 03: That kind of settlement agreement, sure. [00:21:31] Speaker 03: And that language is added in 85, again, to make clear that parties don't have to continue to litigate to the bitter end. [00:21:38] Speaker 03: You can have a settlement agreement that is approved that then can satisfy the IJA standards. [00:21:49] Speaker 03: So for all those reasons, unless there's other questions, I'll briefly move to the substantial justification. [00:21:55] Speaker 03: Three, with respect, important points to note, I think, about the substantial justification. [00:22:00] Speaker 03: First, the government bears the burden of both pre- and post-litigation substantial justification. [00:22:06] Speaker 03: Secondly, it's a highly deferential abuse of discretion standard. [00:22:11] Speaker 03: And third, the determination must be made on the existing record in the civil action under 28 USC 2412 D1B. [00:22:20] Speaker 03: Here on the pre-litigation, substantial justification, the main argument made by the government, Chevron deference, was not made below. [00:22:28] Speaker 03: And it wasn't made on the record pending before the proceeding at the time of the civil action. [00:22:34] Speaker 00: Do you think it even applies? [00:22:36] Speaker 03: What's that? [00:22:37] Speaker 00: Do you think it even applies? [00:22:38] Speaker 00: Even if it was an argument that we should consider, do you think that Chevron deference applies? [00:22:44] Speaker 00: Is there any ambiguity that would require us to resort to Chevron? [00:22:48] Speaker 03: No. [00:22:49] Speaker 03: No, and emphatically, we address this in our briefs. [00:22:52] Speaker 03: Going back 50 years, and this court's case in McHenry from 2004, which long predated the 2008 statute, says crystal clear, the veteran's schedule, the Vassar Deed, the veteran's administration schedule for disability ratings, shall be applied. [00:23:10] Speaker 03: And one of the proof positive about it not being argued below, so to answer your question, Judge Till, we don't think there's ambiguity. [00:23:17] Speaker 03: But the government never argued the ambiguity below. [00:23:19] Speaker 03: We've laid it out, and I'm trying to articulate it right here, right now, why there's no ambiguity. [00:23:24] Speaker 03: But this is all being fleshed out before this court on appeal for the very first time. [00:23:28] Speaker 03: And that's not the way it's supposed to work. [00:23:29] Speaker 03: If the government's going to seek a reversal, it needs to make the argument to the trial court. [00:23:33] Speaker 03: It didn't do so here. [00:23:34] Speaker 03: Turning to the post-justification, post-filing justification, the government has not once but twice effectively conceded our arguments about the lack of substantial justification, namely their failure or refusal to live up to the representations made to the court and to the class about expedited review, the first efforts to try to resolve this, which cost these 2,100 plus [00:24:02] Speaker 03: veterans two years and many, many, many hundreds and hundreds of hours of counsel time to try to pursue this process that ultimately the representations were not adhered to. [00:24:13] Speaker 03: We pointed that out emphatically in the motions before the court as the trial court. [00:24:20] Speaker 03: And Judge Sweeney acknowledged the government didn't respond to that. [00:24:23] Speaker 03: We emphasized that in our brief here. [00:24:25] Speaker 03: We called it a threshold motion. [00:24:26] Speaker 03: And again, the government, who gets the last word here and will have the last word after me, but in its reply brief says nothing about that. [00:24:35] Speaker 03: They set up a straw math. [00:24:36] Speaker 03: They say, well, the court couldn't order this anyway, and so remand to the boards was OK, and our efforts to do that were OK. [00:24:44] Speaker 03: That's not what we're attacking. [00:24:45] Speaker 03: What we say that the lack of post-filing substantial justification consists of is the failure to do whatever it took to live up to those representations. [00:24:56] Speaker 03: when you're looking at the conduct of the government post-filing, has never been responded or rebutted. [00:25:04] Speaker 03: So given all of that, and given the very deferential abuse of discretion standard applied here, and the careful and thorough findings of the trial court, we think the substantial justification burden has not been met by the government here. [00:25:21] Speaker 02: Could you respond to a couple of the government [00:25:24] Speaker 02: government's arguments today. [00:25:25] Speaker 02: One was, I think, there are convalescent situations that the DOD has decided gets treated differently. [00:25:35] Speaker 02: And then maybe another argument that seemed to suggest that maybe 4.129 wasn't always consistently being applied, that maybe there was some back and forth between that and 4.130. [00:25:48] Speaker 03: Yes. [00:25:51] Speaker 03: So let me take the last one first. [00:25:52] Speaker 03: So 4.130 is a schedule for when you do a medical exam and there are certain, you know, and make determinations and it sets forth a series of ratings. [00:26:02] Speaker 03: 4.129 is a subset of that and it is like a minimum rating and I direct the court to the DOD document the government relies on 1332.39 at paragraph 6.10.2 [00:26:17] Speaker 03: expressly directs the services to apply minimum ratings. [00:26:21] Speaker 03: What 4.129 does, and it's that, it's a minimum rating. [00:26:25] Speaker 03: If you're so severely suffering from PTSD that you can't be a soldier or sailor or a marine anymore, what the VASER-D requires is that you have a 50% disability rating for six months and then you get a medical exam. [00:26:39] Speaker 03: And the medical exam will then re-rate you pursuant to 4.130 at whatever your [00:26:44] Speaker 03: real level is. [00:26:45] Speaker 03: But the first six months is a minimum rating that both the DOD directive and, again, the case law going back 50 years required the government to assign. [00:26:56] Speaker 03: So that's 4.129 and 4.138. [00:26:58] Speaker 03: Then you have convalescent ratings. [00:27:01] Speaker 03: Convalescent ratings, as the trial court held, there's no mystery about what convalescent ratings are. [00:27:05] Speaker 03: They have to do invariably with hospitalization, [00:27:08] Speaker 03: The two that exist here are 4.30 and 4.129. [00:27:15] Speaker 03: They are on their face, called convalescent ratings. [00:27:20] Speaker 03: And the temporariness that the government latches onto, it doesn't matter. [00:27:24] Speaker 03: The temporariness, you know, parts of the statutory scheme refer to the TDRL, the Temporary Disabled [00:27:34] Speaker 03: list, I'm probably mangling the acronym there, but it's a temporary rating. [00:27:37] Speaker 03: The VASER-D is every bit as applicable to temporary separations from service as it is to permanent ones. [00:27:42] Speaker 03: So again, minimum ratings, like 4.129 is, which the DOD directive required them to apply, are applicable, and that's what this was here. [00:27:55] Speaker 03: So this kind of winds back around to Judge Soldi. [00:27:57] Speaker 03: Your question is, if we were doing a full-blown Chevron analysis here, would there be the requisite [00:28:02] Speaker 03: ambiguity, no. [00:28:03] Speaker 03: Or would the government's position conflict with long-standing DOD guidance? [00:28:07] Speaker 03: Yes, it would. [00:28:08] Speaker 03: 13.39.39. [00:28:10] Speaker 03: Would it conflict with the statutes? [00:28:12] Speaker 03: Yes, it would. [00:28:12] Speaker 03: Would it conflict with 50 years of case law going back to the Horta Check and McHenry cases? [00:28:17] Speaker 03: Yes, it would. [00:28:18] Speaker 03: And again, so there's nothing in the record that would warrant a different result there. [00:28:32] Speaker 03: Those are the points that I had to make on the pre and post litigation justification. [00:28:40] Speaker 03: So I see that I have a little bit of time left. [00:28:42] Speaker 03: But unless there are further questions by the court, I will. [00:28:46] Speaker 01: OK. [00:28:47] Speaker 01: Thank you, Mr. Bae. [00:28:49] Speaker 01: Thank you. [00:28:49] Speaker 01: Mr. Kanazares, we'll give you two minutes of rebuttal time. [00:28:53] Speaker 04: Thank you, Your Honors. [00:28:54] Speaker 04: I want to start with appendix 852 in the language that Judge Moore, you asked about, that counsel referred to. [00:29:02] Speaker 04: read it into the record just to illustrate something, which is it says, following a final approval of settlement agreement order and entry of judgment, the parties will, if necessary, submit briefs regarding the attorney's fees and cost application as indicated above. [00:29:17] Speaker 04: We believe, as I said before, that that's consistent with our position, but it's also inconsistent with the plaintiff's position here, because what they did was they filed an EJA fee application after the [00:29:29] Speaker 04: 2011, what we're describing as the consent decree, the 2011 order. [00:29:34] Speaker 04: And now they're arguing that the final judgment didn't occur until 2016. [00:29:37] Speaker 04: So if they were relying on this particular provision, they didn't comply with it under their own construction of that language. [00:29:46] Speaker 01: But even if they didn't comply with it, did you raise that argument as a reason that the EGFE shouldn't be awarded at the time they were awarded below? [00:29:53] Speaker 04: Your Honor, no, I don't believe we did. [00:29:55] Speaker 01: So maybe they didn't comply with the section of the thing that you didn't cite to anybody or complain about. [00:30:00] Speaker 01: What do we do about that? [00:30:01] Speaker 04: Well, Your Honor, this particular language we don't believe was controlling. [00:30:04] Speaker 04: The focus of our motion to dismiss for timeliness was focused on the 30-day timeline. [00:30:09] Speaker 04: It focused on the final resolution of the merits of the case and the settlement agreement. [00:30:14] Speaker 04: We weren't really focusing on that particular language. [00:30:16] Speaker 04: We don't believe it. [00:30:17] Speaker 04: It really cuts one way or the other. [00:30:19] Speaker 04: Mr. Fagg referred to [00:30:21] Speaker 04: that the parties had never conceived that there would be some sort of deadline limitation. [00:30:25] Speaker 04: We believe that that's refuted by the record, page 848 in particular, where they said that plaintiffs may apply within 30 days of the court granting final approval. [00:30:37] Speaker 04: There is this distinction that he referred to between enforcement jurisdiction and jurisdiction over the merits. [00:30:42] Speaker 04: We don't really believe that that's really the key issue in the case. [00:30:45] Speaker 04: But it is true that in consent decree situations, the court will have [00:30:51] Speaker 04: jurisdiction over the merits of the case and then after a settlement agreement is entered into, it turns into more of an enforcement type stage. [00:30:58] Speaker 04: We believe this really follows and tracks that type of procedure that courts have recognized. [00:31:04] Speaker 04: The legislative history, I just do want to commend the court's attention to. [00:31:07] Speaker 04: In 1985 when Congress amended EJA, it specifically said in House Report 99120 that a settlement, if the settlement agreement is reached and the fee award is not part of the settlement, [00:31:18] Speaker 04: then the 30-day period would commence on the date when the proceeding is dismissed, pursuant to the settlement, or when the adjudicative officer approves the settlement. [00:31:27] Speaker 04: We believe that sort of refutes the argument that they're making in reliance on the silicon image case in making dismissal the sine qua non of a final judgment. [00:31:38] Speaker 04: Turning to the Susan. [00:31:39] Speaker 04: No, no, no, no, no. [00:31:39] Speaker 01: You are way beyond your time. [00:31:41] Speaker 01: You used all your rebuttal time the first time despite my warnings. [00:31:43] Speaker 01: I gave you two minutes. [00:31:44] Speaker 01: You've taken an extra minute. [00:31:45] Speaker 01: You're not turning to anything else. [00:31:46] Speaker 04: Sit down. [00:31:46] Speaker 04: I apologize, Your Honor. [00:31:47] Speaker 04: Thank you very much. [00:31:49] Speaker 01: I thank both counsel for their argument. [00:31:51] Speaker 01: The case is taken under submission.