          UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS


                                          NO . 04-1930(E)

                                RANDOLPH S. GURLEY , APPELLANT ,

                                                 v.

                                      R. JAMES NICHOLSON ,
                            SECRETARY OF VETERANS AFFAIRS, APPELLEE.


                   On Appellant's Application for Attorney Fees and Expenses


(Argued August 23, 2006                                      Decided      January 22, 2007 )



       Kenneth M. Carpenter, of Topeka, Kansas, for the appellant.

       Yvette R. White, with whom Tim S. McClain, General Counsel; R. Randall Campbell,
Assistant General Counsel; and Edward V. Cassidy, Jr., Deputy Assistant General Counsel, all of
Washington, D.C., were on the pleadings, for the appellee.

       Before GREENE, Chief Judge, and KASOLD and MOORMAN, Judges.

       KASOLD, Judge: Pending before the Court is veteran Randolph S. Gurley's October 28,
2005, application for attorney fees and expenses pursuant to the Equal Access to Justice Act (EAJA),
28 U.S.C. § 2412(d), in the amount of $6,429.72. The Secretary filed a response in which he argues
that the EAJA application should be denied because the appellant is not a "prevailing party" within
the meaning of the statute. Subsequently, the Secretary filed an opposed motion to dismiss for lack
of jurisdiction. For the reasons set forth below, the Court will deny both the Secretary's motion and
Mr. Gurley's application.


                                       I. BACKGROUND
       Mr. Gurley appealed through counsel a June 25, 2004, decision of the Board of Veterans'
Appeals (Board) that increased his disability rating for a left-knee disability to 20%, but no more,
and remanded to a VA regional office (RO) his claims for service connection for a psychological
disorder and for a rating of total disability based on individual unemployability (TDIU). After Mr.
Gurley filed his principal brief, wherein he argued solely that the TDIU claim was inextricably
intertwined with his claim of entitlement to an increased disability rating for his left-knee disability,
the parties filed a joint motion for remand (JMR). In the JMR, the parties agreed that, because Mr.
Gurley's left-knee disability claim was inextricably intertwined with his remanded claims for service
connection for a psychological disorder and for TDIU, a "remand is warranted to comply with the
Court's holding in Harris v. Derwinski, 1 Vet.App. 180 (1991)." JMR at 2. The JMR further stated:
        Where the facts underlying separate claims are "intimately connected," the interests
        of judicial economy and avoidance of piecemeal litigation require that the claims be
        adjudicated together. Smith v. Gober, 236 F.3d 1370, [1372] (Fed. Cir. 2001). The
        Court has held that where a decision on one issue would have a "significant impact"
        upon another, and that impact in turn "could render any review by this Court of the
        decision [on the other claim] meaningless and a waste of judicial resources," the two
        claims are inextricably intertwined. Harris v. Derwinski, 1 Vet.App. 180, 183
        (1991).
JMR at 2 (second bracketed text in original). On October 13, 2005, the Clerk of the Court granted
the JMR and remanded the matter. Mr. Gurley timely filed the underlying EAJA application.


                                           II. ANALYSIS
                     A. Secretary's Motion to Dismiss for Lack of Jurisdiction
        Although the Court remanded the underlying merits action pursuant to the parties' JMR, the
Secretary correctly notes that our jurisdiction over a matter may be raised by the parties or by the
Court sua sponte at any stage of the proceeding. See Fugere v. Derwinski, 972 F.2d 331, 334 n.5
(Fed. Cir. 1992). With regard to the Court's jurisdiction, the Secretary argues that Harris, upon
which the JMR was premised at least partially, specifically held that a Board decision on a matter
that was inextricably intertwined with another matter that was still being adjudicated below was a
nonfinal decision over which the Court lacked jurisdiction. Relying on Heath v. West, 11 Vet.App.
400, 404 (1998), the Secretary further argues that, because the Court lacked jurisdiction over the
matter that was appealed – and therefore erroneously remanded the matter pursuant to the JMR – the
Court lacks jurisdiction over the EAJA application. Mr. Gurley argues that the Court has jurisdiction
over the application and, at oral argument, he extended his argument to assert that, to the extent that


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Harris held that a decision on an inextricably intertwined matter was not final for purposes of the
Court's jurisdiction, Harris was impliedly overruled by the U.S. Court of Appeals for the Federal
Circuit in Halpern v. Principi, 313 F.3d 1364 (Fed. Cir. 2002), and Hudson v. Principi, 260 F.3d
1357 (Fed. Cir. 2001).
         Under the circumstances of this case we need not decide whether Harris was impliedly
overruled by Halpern or Hudson. In Harris, the Court noted that any decision it rendered on the
anxiety claim being considered on appeal could be rendered moot by a decision by the Board on the
underlying heart condition claim because, as Mr. Harris argued, his anxiety was caused by his heart
condition, making the claims inextricably intertwined. The Court further reasoned that because a
decision of the Court on the anxiety claim could be rendered moot by a decision below on the heart
condition claim, the anxiety claim was not final and the Court did not have jurisdiction over it. See
Harris, 1 Vet.App. at 183.1 A situation similar to the one in Harris arises when the Board remands
to the RO a claim of entitlement to a higher schedular disability rating and also denies a claim for
entitlement to TDIU, which is then appealed to the Court. In such a circumstance, any decision by
the Court on TDIU entitlement could be rendered meaningless by an adjudication below that awards
a higher schedular rating that, in turn, may satisfy the requirements for an award of schedular TDIU
under 38 C.F.R. § 4.16(a) (2006).
         On the other hand, in the reverse situation, a decision below has no direct impact on a
decision by the Court. For example, if a higher schedular rating was denied by the Board and
appealed to the Court, while the issue of TDIU entitlement was remanded by the Board or otherwise
still under adjudication below, a decision below on TDIU entitlement would not impact the question
of whether a higher schedular rating was correctly denied – thus, a decision of the Court on the



         1
            The Harris decision also recognized judicial economy as a basis for not hearing an appeal on a claim
inextricably intertwined with one still being adjudicated below. Although this would warrant remand, the Harris Court
nevertheless considered the matter one of jurisdiction. W e recognize that the Harris decision places a claimant between
the proverbial rock and a hard place with regard to a decision of the Board that appears final as to one claim but may
nonetheless be inextricably intertwined with other claims still under adjudication. An appeal could prove to be untimely
and costly to the claimant, but if the claim on which the Board rendered its decision turns out not to be inextricably
intertwined with other claims still under adjudication, a failure to appeal could effectively vitiate his right to appeal, as
the 120-day period in which to appeal might pass. See 38 U.S.C. § 7266 (Notice of Appeal must be postmarked or
received by the Court within 120 days after a final Board decision on the matter appealed). Nevertheless, reconsideration
of Harris is not now specifically before us or otherwise required.

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appealed matter could not be rendered moot by a subsequent Board decision.2 Under such
circumstances, the Court would have jurisdiction over the matter, including jurisdiction to remand
that matter for the purposes of judicial economy.
         Here, the claim of entitlement to service connection for a psychological disorder and the issue
of entitlement to TDIU were remanded by the Board and were still under adjudication below when
Mr. Gurley filed the appeal of his knee-disability claim. Although these matters are all related,
decisions below on the psychological disorder claim and TDIU entitlement would have no impact
on a decision of the Court on the knee-disability rating. Thus, the Board decision on the
left-knee-disability claim was final. The Court therefore had jurisdiction over the appeal and
therefore the authority to grant the JMR. Because the Court had jurisdiction over the underlying
matter, the Court now has jurisdiction over this EAJA application. See Halpern, 313 F.3d at 1368
(because Court had appellate jurisdiction to decide the appeal, the Court had jurisdiction over the
subsequent EAJA application); see also Scarborough v. Principi, 541 U.S. 401, 413 and n.3 (2004)
(noting for EAJA purposes that the appellant had already invoked the Court's jurisdiction by
appealing the Board's decision). Accordingly, the Secretary's motion to dismiss for lack of
jurisdiction will be denied.
                                       B. Merits of the EAJA Application
                                               1. Preliminary Matters
         The EAJA application under review was filed within the 30-day EAJA application period
set forth in 28 U.S.C. § 2412(d)(1)(B), and the application meets the content requirements because
it contains (1) a showing that the appellant is a prevailing party, (2) a showing that the appellant is
a party eligible for an award because his net worth does not exceed $2,000,000, (3) an allegation that
the Secretary's position was not substantially justified, and (4) an itemized statement of the attorney
fees and expenses sought. See 28 U.S.C. § 2412(d)(1)(A), (1)(B), (2)(B); Scarborough, 541 U.S.
at 407-08 (2004); Cullens v. Gober, 14 Vet.App. 234, 237 (2001) (en banc).



        2
           Even if the Board were to grant TDIU, Mr. Gurley's employability might change causing that rating to be
withdrawn, but he may nonetheless be entitled to the schedular disability rating for his left-knee disability. See 38 C.F.R.
§§ 3.343(c) (providing that TDIU may be reduced upon a showing of "actual employability . . . established by clear and
convincing evidence"), 4.16(a) (2006) (requirements for entitlement to TDIU).

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                                     2. Prevailing Party Status
       The Court has repeatedly held that prevailing party status arises either through a Court
direction that the Secretary award the benefits sought to the claimant or "through the grant of a
merits-stage Court remand predicated on administrative error." Rollins v. Principi, 17 Vet.App. 294,
298 (2003); see also Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health & Human Res.,
532 U.S. 598, 603-04 (2001) ("'[A] plaintiff [must] receive at least some relief on the merits of his
claim before he can be said to prevail.'" (quoting Hewitt v. Helms, 482 U.S. 755, 760 (1987)));
Sumner v. Principi, 15 Vet.App. 264, 264 (2001) (en banc) (remand predicated upon administrative
error constitutes "some relief on the merits"). For prevailing party status predicated on a remand for
administrative error, the Court has consistently held that "the remand must either (1) have been
directed in a Court opinion, decision, or order that contained a Court recognition of administrative
error or (2) have been granted on the basis of a concession of error by the Secretary." Gordon v.
Principi; 17 Vet.App. 221, 223 (2003); see also Zuberi v. Nicholson, 19 Vet.App. 541, 544 (2006).
       The underlying order granting the JMR in this case does not contain a Court recognition of
administrative error. See Sumner, 15 Vet.App. at 264 (prevailing party status requires recognition
of administrative error). Nor does the JMR itself contain a concession of error by the Secretary,
either explicit or implicit. See Vahey v. Nicholson, 20 Vet.App. 208, 211 (2006) (finding no explicit
finding of error or implicit acknowledgment of error in Court decision); Briddell v. Principi,
16 Vet.App. 267, 272 (2002) (Court looks to the words of a JMR to determine whether it was
predicated on administrative error). Rather, the parties agreed in the JMR that remand was
warranted for compliance with Harris, for the specifically stated purposes of "judicial economy and
avoidance of piecemeal litigation." JMR at 2. As noted previously, Harris involved a claim on
appeal that was inextricably intertwined with a claim still being processed below, and the Court held
that it did not have jurisdiction over the claim on appeal. Harris, however, also involved concepts
of judicial economy. See ante at note 1. In contrast, the Court here had jurisdiction over the Board
decision that was the subject of the JMR, leaving consideration of judicial economy as the sole basis
for the JMR. Indeed, the JMR makes no reference to the jurisdictional aspects of Harris, and
specifically cites judicial economy as the basis for the remand. See JMR at 2. Such a basis does not
constitute administrative error.


                                                  5
       When determining whether an appellant is a prevailing party, "the Court at that stage will
look only to what actions it actually took in its disposition of the underlying appeal," Vahey,
20 Vet.App. at 211 (emphasis in original), and will look only to the actual language of the remand
order to determine whether administrative error exists, see Briddell, 16 Vet.App. at 272. That is, the
Court will not engage in a second major litigation to determine whether error was found by the Court
or conceded by the Secretary. See Dillon v. Brown, 8 Vet.App. 165, 168 (1995) (citing Comm'r, INS
v. Jean, 496 U.S. 154, 158-60 (1990)).
       Mr. Gurley argues that the Court's caselaw requiring administrative error for prevailing party
status has been overruled. Specifically, he contends that, under Rice Service, Ltd. v. United States,
405 F.3d 1017 (Fed. Cir. 2005), Halpern v. Principi, 384 F.3d 1297 (Fed. Cir. 2004), and Former
Employees of Motorola Ceramic Products v. United States, 336 F.3d 1360 (Fed. Cir. 2003), a
"remand is good enough." Reply to Secretary's Opposition at 4. As he clarified at oral argument,
Mr. Gurley maintains that these cases do not require that error exist in order for him to be a
prevailing party; rather, he argues that he became a prevailing party when he received the remand
without regard to whether there was a finding or concession of error.
       The cases upon which Mr. Gurley relies, however, do not support his argument. In Motorola,
a case in which EAJA fees were granted, the Federal Circuit stated that "where the plaintiff secures
a remand requiring further agency action because of alleged error by the agency, the plaintiff
qualifies as a prevailing party . . . ." 336 F.3d at 1366 (emphasis added). Moreover, the Government
in Motorola did not oppose a requested remand for reconsideration based on various assertions of
error, but rather specifically stated that "reconsideration of the negative determination is
appropriate." Id. at 1362; see also Rice, 405 F.3d at 1024. In Rice, there was no concession of
agency error and EAJA fees were denied. The Federal Circuit determined in that case that the
dismissal by the Court of Federal Claims was not a decision on the merits when it was based upon
the agency's voluntary actions that mooted the controversy. See Rice, 405 F.3d at 1026-28. In
Halpern, the Federal Circuit did not have to address error because this Court's remand order on the
underlying merits case directed the Board to dismiss the matter, with no further additional
proceedings required. Moreover, although Mr. Gurley cited to the recent decision in Kelly v.
Nicholson, 463 F.3d 1349 (Fed. Cir. 2006), as supplemental authority supporting his position, it does


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not. In that case, the Federal Circuit found "the veteran has already prevailed in the civil action
before the Veterans Court by obtaining a remand in light of the agency's error." Id. at 1355
(emphasis added) (determining that the applicant was a prevailing party because of the Court remand
based on VA error and that prevailing at the agency on remand was not required). Finally, in
contrast to Mr. Gurley's contention that error is no longer a consideration when assessing an EAJA
application, the Federal Circuit quoted favorably in Kelly the statement in Motorola that EAJA fees
may be awarded when a remand is based on alleged error and highlighted its recognition of error in
its third footnote. See Kelly, 463 F.3d at 1353, 1354 n.***.


                                       III. CONCLUSION
       In this case the JMR reveals only that the Secretary agreed that a remand was appropriate for
purposes of judicial economy under Harris. Such a remand does not alter the legal relationship
between the parties under Zuberi, because it indicates only that the claim may need further
consideration as a result of another yet-unresolved claim. There is no suggestion that Mr. Gurley
will necessarily be in a better position on remand or that the current Board decision would not
withstand scrutiny after the other matter is resolved. The Court will not look beyond the agreed upon
basis of the JMR to inquire if there was any administrative error that would confer prevailing party
status. See Vahey and Briddell, both supra. Accordingly, the EAJA must be denied because the Mr.
Gurley has not established prevailing party status based upon the face of the JMR.
       The application for attorney fees and expenses is DENIED.




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