The statute that applies to the date of a VA award cannot be tolled.

The Supreme Court issued its first decision of 2023 in the case of Arellano v. McDonough, 143 S.Ct. 543 (2023). The Court held that the judicial doctrine of equitable tolling could not be used to toll a VA statute that governs the effective date that VA disability payments begin. This decision upheld the decisions of the Court of Appeals for Veterans Claims and the Federal Circuit Court and adversely impacts thousands of veterans who suffer from post-traumatic stress disorder related to their military service and are incapable of filing timely claims.

The Federal U.S. Circuit Court of Appeals unanimously denied Mr. Arellano’s argument that 38 U.S.C. §5110(b)(1) was subject to equitable tolling but was split evenly on the reason for denial. Arellano v. McDonough, 1 F.4th 1059 (Fed. Cir. 2021). Half the court opined that the statute was not subject to equitable tolling; the other half decided that it was subject to equitable tolling, but the facts of Mr. Arellano’s case did not warrant it. The Supreme Court took the appeal acknowledging that this issue needed to be resolved.

To best understand the implications of the decision, a brief overview of the laws governing the administration of veterans benefits and the principle of equitable tolling is necessary. Congress has enacted numerous laws over the last century providing disability compensation to veterans who agreed to serve our country and were in some way injured during their service.

The laws are supposed to be “veteran friendly” and the application process simple so that veterans do not need legal representation. There is no statute of limitations governing when a veteran should apply for disability benefits after service, but the law is clear that the veteran must apply for the benefits to receive them. As in Mr. Arellano’s case, veterans can apply for benefits 30 years after leaving service. However, the payment of these benefits is not retroactive to the date of discharge from service. Instead, the benefits are payable on the “effective date” of the award which is usually no earlier than the date of the application. 38 U.S.C. §5110(a). Congress carved out exceptions to this rule in 38 U.S.C. §5110(b)-(n) allowing for retroactive benefits in specific circumstances.

At issue in Arellano is 38 U.S.C. §5110(b)(1), which allows for benefits to be paid retroactively to the day after the date of discharge from the military if the veteran files for benefits within one year of discharge. Mr. Arellano served between 1977-1981 and was discharged from service with crippling PTSD. Arellano, 143 S.Ct. at 547. He witnessed fellow service members injured and killed, and was nearly crushed himself in an accident aboard the USS Midway. With the help of his brother, he finally applied for benefits in 2011. Id. He was awarded a 100% disability rating with payments to begin on the day he filed his application. He argued that in his case, the principle of equitable tolling should be applied to 38 U.S.C. §5110(b)(1) because, due to his post-traumatic stress disorder, he was too ill to know that he could file for benefits within a year of discharge. Id.

The Supreme Court defined equitable tolling as follows: “Equitable tolling ‘effectively extends an otherwise discrete limitations period set by Congress.’” Id. (quoting Lozano v. Montoya Alvarez, 572 U.S. 1, 10 (2014)). “In practice, it ‘pauses the running of, or “tolls,” a statute of limitations when a litigant has pursued his rights diligently but some extraordinary circumstance prevents him from bringing a timely action.’” Id. (quoting Lozano, 572 U.S. at 10). The Court further confirmed the presumption that federal statutes are subject to equitable tolling, but that this presumption can be rebutted by the statutory scheme enacted by Congress. Id. at 548.

The Court then turned to 38 U.S.C. §5110(b)-(n), which enumerates 16 exceptions to the effective date of the award, and held that Congress specifically laid out these exceptions to the hard and fast rule in §5110(a) that disallowed the payment of retroactive benefits. Id. at 548-49. The opinion noted that Congress took equity into consideration when drafting these exceptions resulting in the award of retroactive benefits in specific situations, and in all but one case, capped those retroactive benefits at 1 year. Id. at 549. The Court then quoted United States v. Beggerly, 524 U.S. 38, 48-49 (1998), stating, “[w]hen Congress has already considered equitable concerns and limited the relief available, ‘additional equitable tolling would be unwarranted.’” Arellano, 143 S.Ct. at 550.

The Court recognized the harsh result of this holding by noting that “Congress has the power to choose between rules, which prioritize efficiency and predictability, and standards, which prioritize optimal results in individual cases,” and in the case of 38 U.S.C. §5110, Congress chose the former. Id. at 550.

This “harsh” result does not simply apply to Mr. Arellano. It is compounded by the numbers of veterans suffering from some form of PTSD related to service. According to the VA website, approximately 11-20% of Iraqi Freedom/Enduring Freedom veterans suffer from some form of PTSD, and up to 30% of Vietnam veterans have suffered PTSD during their lifetime. These numbers do not include the number of service members who experience military sexual assault, or veterans, like Mr. Arellano, who survive horrific training accidents. Many of the symptoms of PTSD, including avoidance and anxiety, often prevent veterans from facing their trauma for years. Yet VA law, designed to be “veteran friendly,” does not take this into account when establishing the effective date for the award of benefits, and now the Supreme Court has precluded an equitable remedy due to this “harsh result.”

Fortunately, two members of Congress, Congressman Salud Carbajal from California’s 24th district and Congressman Don Bacon from Nebraska’s 2nd district have acknowledged the “harshness” of the law as it now stands and introduced a bill, called the Veteran Restitution and Justice Act, which would change the effective date for the award of benefits for the survivors of military sexual assault to the day after they were discharged from active duty. Given the Court’s ruling in Arellano, we, as advocates for veterans, need to support changes in the law. The proposed bill for MST survivors is a great start, but I would suggest that we expand it to include retroactive awards for veterans like Mr. Arellano suffering from incapacitating post-traumatic stress disorder.