Problem Summary

Robert Wilkie, Secretary of Veterans Affairs,

Petitioner

v.

Jennifer Flemming,

Respondent

Veteran Jennifer Flemming served in the U.S. Navy from 2001 to 2011, including service in Operation Iraqi Freedom. She was diagnosed with several medical conditions during her service, including hepatitis C resulting from a needlestick that occurred while working with patients as a hospital corpsman. Upon separation from service in June 2011, Ms. Flemming filed a claim for disability benefits for the medical conditions that she believed were incurred in service. In February 2012, the VA Regional Office (“RO”) awarded a 100% Permanent and Total Disability (“PTD”) rating based on a combination of disabilities that were found to be service-connected.

Ms. Flemming’s son, Kyle Flemming, was also finishing high school in 2012. Because of his exceptional academic performance and other accolades, he was accepted at the University of Michigan. Kyle filed for and began receiving Chapter 35 Dependents’ Educational Assistance benefits shortly thereafter. She also purchased a home in Piedmont, Michigan in April 2014. She was granted a state property tax exemption based on her 100% disabled status.

In March 2015, Ms. Flemming filed an increased rating claim. As she was recovering from a total hip replacement, she filed for an increased rating claim for her left hip condition. Based on information that she received from her veterans service officer (“VSO”) representative, she believed that she would receive a temporary 100% rating for her total hip replacement. Because she already had a 60% rating for her hepatitis C condition, this would mean that Ms. Flemming was entitled to special monthly compensation (“SMC”) as provided for in 38 U.S.C. § 1114(s). In addition to filing for the increase based on her total hip replacement, she also filed a service-connection claim for a mental health condition. She was under the impression that by receiving service-connection for a new disability, she would be eligible for service-disabled veterans insurance benefits.

During the pendency of these claims, VA reviewed her treatment records. Her hepatitis C records showed sustained improvement with an undetectable viral load following antiviral therapy that she underwent from July to October 2013. This therapy had not been available when Ms. Flemming originally received her hepatitis C rating.

On April 15, 2015, the RO issued a decision granting a one-month 100% convalescence rating and 12-month 100% rating for the total hip replacement, a 50% rating for an anxiety disorder, as well as an SMC rating for March and April 2015 (the period during which Ms. Flemming had a 100% rating for the hip replacement and a 60% rating for the hepatitis C). The same day, the RO issued an additional decision, reducing Ms. Flemming’s hepatitis C rating from 60% to 0%. Given that her overall compensation rating at the time of this April 2015 decision remained the same, VA did not provide advance notice regarding its rating reduction.

In a November 15, 2016, Board of Veterans Appeals (“Board”) decision, the Board found that because Ms. Flemming’s overall compensation was not decreased, VA was not obligated to provide advance notice and an opportunity to respond. The Board concluded that the preponderance of the evidence supported a reduction of her hepatitis C disability rating given the antiviral therapy’s positive impact.

On appeal to the United States Court of Appeals for Veterans Claims (“Veterans Court”), Ms. Flemming argued that the Board erred when it found that she was not entitled to fair process. She also contended that even though her overall compensation payment was not negatively affected, she was negatively impacted by the loss of ancillary benefits. Specifically, she argued that removing her PTD status amounted to a constitutional taking of the Chapter 35 education benefits. The Veterans Court affirmed, holding that fair process is limited to reductions in the total amount of compensation received and that eliminating Ms. Flemming’s permanent and total status did not amount to a taking of the Chapter 35 benefits.

Ms. Flemming appealed to the United States Court of Appeals for the Federal Circuit (“Federal Circuit”). The Federal Circuit vacated the CAVC’s decision as to fair process, concluding that Ms. Flemming did have a right to advance notice and the opportunity to be heard because the PTD status was not merely procedural but afforded eligibility to additional benefits, to which she had already established entitlement. The Federal Circuit noted that, with respect to the taking argument, Ms. Flemming failed to demonstrate a legitimate claim of entitlement to a property interest in a public benefit. One judge dissented, arguing that Ms. Flemming demonstrated that she had more than an abstract need for the Chapter 35 benefits.

VA appealed the Federal Circuit decision to the United States Supreme Court, which granted certiorari on the following two questions:

1. Does the U.S. Department of Veterans Affairs (VA) comply with the “fair process” standard when it removes a veteran’s permanent and total disability status without advance notice, thereby leaving the overall rate of compensation unchanged, but reducing or eliminating ancillary benefits previously available to the veteran?

2. Does VA’s removal of a veteran’s permanent and total disability status amount to a taking of property for purposes of Chapter 35 Dependents Educational Assistance?