Legal Docket: Veterans benefits and whistleblower protections

NICK EICHER, HOST: It’s The World and Everything in It for this 18th day of November, 2024. We’re so glad you’ve joined us today. Good morning! I’m Nick Eicher.

MARY REICHARD, HOST: And I’m Mary Reichard. It’s time now for Legal Docket.

Two Supreme Court cases today.

The first involves the U.S. Department of Veterans Affairs. The VA is the federal agency that among other things fields millions of disability claims each year from veterans.

VA fields the claims, evaluating them is the job of the Veterans Benefits Administration. Last year alone, the VBA completed nearly 2 million claims—an all-time high.

Recently, VA Secretary Denis McDonough praised the agency’s performance:

MCDONOUGH: It's better, world class care, and it's better health outcomes for veterans than in the private sector. It's not just more benefits, it's faster, more accessible benefits we're delivering by meeting vets where they are, rather than expecting them to come to us.

EICHER: It can’t be surprising that the VA secretary evaluates himself so highly. But the new boss in town doesn’t really think so.

President-elect Donald Trump recently criticized the VA.

In a video statement last week, he said he’d work to end homelessness among veterans and more besides:

TRUMP: On day one, I will sign an executive order to cut off Joe Biden's massive spigot of funding for shelter and transport of illegal aliens, and redirect a portion of those savings, a very large portion, I might add, to provide shelter and treatment for homeless American veterans. We're going to take care of our veterans.

Which leads us to our Supreme Court case.

Two service members sought medical care for Post Traumatic Stress they say they incurred while in the service. The two are Air Force veteran Joshua Bufkin and Army veteran Norman Thornton.

The two also say the VA has been inconsistent in claims approval, despite a long-standing rule that so-called close cases ought to favor the veteran.

REICHARD: At the Supreme Court, the veterans’ lawyer Melanie Bostwick argued this rule has a history going back a century. Congress was clear about giving the benefit of the doubt to veterans in claims that are borderline … creating a special veterans’ claims court 35 years ago. Bostwick said the lower courts got things wrong with these and other veterans:

BOSTWICK: Their decisions render Congress's statutory amendment entirely superfluous. They mean that a uniquely generous standard of proof is reviewed in a uniquely ungenerous way. And, if upheld, they will allow the agency's non-compliance with its statutory mandate to continue unchecked.

EICHER: She argued the approach taken by the VA defeats the whole purpose of the law. Veterans Court must make its own independent review of the evidence so it can determine those borderline issues.

REICHARD: But VA lawyer Sopan Joshi countered the agency follows a different time-honored standard for appeals, known in law as the “clear error of review.” Meaning, an appeals court only overturns a lower court’s fact finding if it is certain the lower court made a finding not supported by substantial, credible evidence in the record.

JOSHI: So, as between two interpretations, one that's sort of consistent, coherent, with a little bit of redundancy, and one that eliminates the redundancy at the cost of a statute at war with itself, I think you should pick the former over the latter.

EICHER: Justice Neil Gorsuch questioned the fairness of that.

To him … it’s a standard that essentially allows the VA to choose between two equally qualified experts, then prefer the one who favors denial of benefits.

GORSUCH: Your example of the two experts, let's say they're both super well qualified and they both do a really good job. And one says: Service-related. The other says: Not. The agency favors the one that's not because … he interviewed the claimant more recently in time or ran one more test. And --and that's not clearly erroneous because a clearly erroneous standard is very hard to meet.

BOSTWICK: Yes, Your Honor.

GORSUCH: Right? It's --it's basically: Were they crazy in --in choosing this one fact over the other fact? And they were not crazy. So there's no clear error. But, as a matter of law, you would say, as I understand your argument, that, hey, those are really pretty similar, and the Secretary's decision that it wasn't decisively in favor, I think is the language you used, or something like that, in favor of the government means that --that this standard has teeth and should be applied?

BOSTWICK: Yes, Your Honor.

REICHARD: The justices seemed torn on how to interpret the law.

Just last term, the court expanded VA benefits, giving veterans more flexibility in claiming educational benefits. It’s possible that signals the court’s more generous approach for medical benefits, too.

EICHER: Alright, case two, Wisconsin Bell v US. Here the law in question is the False Claims Act. It’s a federal law dating to Civil War times, designed to combat fraud against the government.

Here’s the background: Wisconsin Bell is a telecom company, it’s one of the many regional Bell systems established after the breakup of the phone company in the 1980s. Todd Heath is a former employee of Wisconsin Bell. He alleges the company overcharged the government, and so he sued under the False Claims Act.

Let’s stop a moment to explain how this works. The law combats fraud by incentivizing whistleblowers to come forward. So a private citizen can become what’s known as a “relator” meaning he is suing on behalf of the government, and if the case succeeds the relator gets a cut of any recovery the government’s able to win.

REICHARD: His lawsuit arises from a program that provides subsidies for schools and libraries to receive internet access. It’s called E-rate. Heath says the company knowingly charged too much and indirectly billed the government.

The company says if there were overcharges, it wasn’t intentional.

But its main argument is that any “claim” made by Wisconsin Bell isn’t the kind of claim the False Claims Act meant to capture … because the money didn’t flow directly from the government.
The company’s lawyer made clear that the E-rate program has a private administrator, so the funds aren’t government funds.

Company lawyer Allyson Ho argued the protections of the law only kick in when government money is directly at risk. When you hear her say “FCA,” she’s talking about the Fair Claims Act:

HO: Text, context, structure, and history all confirm that the government provides money for FCA purposes only if it supplies money from its own funds, putting the public fisc at risk. That never happened here. The government doesn't provide money by making one private party pay another private party, and the government doesn't provide money by collecting debts owed to a private party and in which the government has no financial stake.

EICHER: But Justice Elena Kagan tested that out with this hypothetical about who is responsible for delivering a service:

KAGAN: If I have a sick friend and I arrange for Uber to bring that sick friend chicken soup, I mean, in some ways, it's the deliveryman who provides the soup, but I provided the soup because I paid for it and I told the delivery man to go deliver it. And so, here, you might have two people that could in some sense be said to furnish or supply or provide the soup.

Lawyer Ho stammered around about that, and Justice Kagan continued:

KAGAN: Well, I think my friend would thank me for giving her the soup, not the funds, you know? I mean --I mean, I think my friend would understand that the Uber guy was a kind of conduit and it went through ---but --but I ordered the soup. And, here, the mandate is coming from the federal government in the same way.

REICHARD: Representing Heath the whistleblower, lawyer Tejinder Singh argued the government effectively controls E-rate funds. That makes it a government payment in substance.

SINGH: When Wisconsin Bell requests E-rate funds, the government provides the money. The administrator pays on the government's behalf using money the government collects and controls to advance a federal program that the government created. FCC mandates, which the administrator must follow, specify who must be paid and how much they must be paid. So, when the administrator paid Wisconsin Bell, that was the government providing money through its agent.

The point is not exactly how did the money move through a bureaucracy, was it routed efficiently or less efficiently. The point is who is really making the money move, and it is the government.

EICHER: Justice Neil Gorsuch had a less flavorful hypothetical than Justice Kagan’s chicken soup hypothetical, asking whether a court judgment could be considered as provided by the government:

GORSUCH: …a court order ordering a judgment, plaintiff, you get money from the defendant. Does the court provide that money or does the defendant provide that money and- if --if so, what makes that example different?

SINGH: Yeah. So I don't think we would say in ordinary usage that the court provides that money.

Because there, the defendant who has to pay the plaintiff isn’t a government agent.

GORSUCH: Putting aside the agency argument --

SINGH: I like the agency argument. (Laughter.)

GORSUCH: I know you do.

SINGH: Okay.

GORSUCH: Do you have anything beyond the agency argument?

SINGH: That is my, that is the clearest, most crystallized response…

REICHARD: Both sides provided strong arguments. The False Claims Act has led to billions of dollars in recoveries for the government, and it couldn’t have done it without the whistleblowers.

Decisions in both cases are expected by the end of June. And that’s this week’s Legal Docket!

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