HARRY N. WALTERS, ADMINISTRATOR OF VETERANS' AFFAIRS, ET AL., APPELLANTS V. NATIONAL ASSOCIATION OF RADIATION SURVIVORS, ET AL. No. 84-571 In the Supreme Court of the United States October Term, 1984 On Appeal From The United States District Court For The Northern District of California Jurisdictional Statement PARTIES TO THE PROCEEDING In addition to appellant Walters, the defendants named in the district court were the United States, the Veterans' Administration, and Paul D. Ising, the director of the VA Regional Office in San Francisco. In addition to appellee National Association of Radiation Survivors, plaintiffs in the district court were Swords to Plowshares Veterans Rights Organization, Don E. Cordray, Albert R. Maxwell, Reason F. Warehime, and Doris J. Wilson. The American G.I. Forum also intervened as a plaintiff. TABLE OF CONTENTS QUESTION PRESENTED PARTIES TO THE PROCEEDINGS Opinion below Jurisdiction Statutory provisions involved Statement The question is substantial Conclusion Appendix A Appendix B Appendix C Appendix D OPINION BELOW The opinion of the district court (App., infra, 1a-52a) is reported at 589 F.Supp. 1302. JURISDICTION The district court's preliminary injunction (App., infra, 52a) was entered on June 12, 1984. The district court's order modifying the preliminary injunction on the government's motion for a stay pending appeal (App., infra, 53a-59a) was entered on July 20, 1984. Notices of appeal to this Court from the June 12 and July 20 orders were filed, respectively, on June 20, 1984 (App., infra, 60a), and August 20, 1984 (App., infra, 61a). On August 10, 1984, Justice Rehnquist extended the time within which to docket this appeal to and including October 1, 1984, and on September 11, 1984, he further extended the time for docketing the appeal to and including October 8, 1984. The jurisdiction of this Court is invoked under 28 U.S.C. 1252. See McLucas v. DeChamplain, 421 U.S. 21, 30-31 (1975); Railway Labor Executives' Ass'n v. Gibbons, 448 U.S. 1301, 1303-1304 & n.2 (Stevens, Circuit Justice), subsequent order, 448 U.S. 909 (1980). STATUTORY PROVISIONS INVOLVED 38 U.S.C. 3404(c) provides: The Administrator shall determine and pay fees to agents or attorneys recognized under this section in allowed claims for monetary benefits under laws administered by the Veterans' Administration. Such fees -- (1) shall be determined and paid as prescribed by the Administrator; (2) shall not exceed $10 with respect to any one claim; and (3) shall be deducted from monetary benefits claimed and allowed. 38 U.S.C. 3405 provides: Whoever (1) directly or indirectly solicits, contracts for, charges, or receives, or attempts to solicity, contract for, charge, or receive, any fee or compensation except as provided in sections 3404 or 784 of this title, or (2) wrongfully withholds from any claimant or beneficiary any part of a benefit or claim allowed and due him, shall be fined not more than $500 or imprisoned at hard labor for not more than two years, or both. QUESTION PRESENTED Whether 38 U.S.C. 3404, which prohibits the payment of a fee of more than $10 by a veteran to an agent or attorney in connection with an administrative claim for veterans' benefits, violates the First and Fifth Amendments. STATEMENT By statute, Congress has established an administrative system of service-connected death and disability benefits for veterans. See 38 U.S.C. 301 et seq. Since the time of the Civil War, Congress has limited the amount that a veteran may pay to an agent or attorney for assistance and representation in connection with a claim for such benefits. As relevant here, 38 U.S.C. 3404(c) provides (subject to criminal penalties for receipt of greater sums, see 38 U.S.C. 3405) that "in allowed claims for monetary benefits under laws administered by the Veterans' Administration * * * (s)uch fees * * * shall not exceed $10 with respect to any one claim * * *." /1/ Appellees contend that Section 3404(c) violates their Fifth Amendment right to procedural due process and their First Amendment rights of association and free speech and to petition for a redress of grievances. 1. Claims for service-connected death and disability benefits are decided in an informal and nonadversary process. /2/ The process is commenced by the submission of a claim for benefits (38 C.F.R. 3.151, 3.152). The necessary claims form is furnished by the Veterans' Administration either upon request or upon receipt of notice of death of a veteran (38 C.F.R. 3.150(a) and (b)). In addition, "(a)ny communication or action, indicating an intent to apply for one or more (veterans') benefits * * *, may be considered an informal claim" and, "if a formal claim has not been filed, an application form will be forwarded to the claimant for execution" (38 C.F.R. 3.155(a)). In the event that "a claimant's application is incomplete, the claimant will be notified of the evidence necessary to complete the application" (38 C.F.R. 3.109(a)). A claim is initially reviewed by the so-called agency of original jurisdiction, which is usually the Regional Office of the Veterans' Administration that is most convenient to the claimant. These proceedings "are ex parte in nature" (38 C.F.R. 3.103(a)) and no government official appears in opposition to the claim. The VA has "the obligation * * * to assist a claimant in developing the facts pertinent to his claim * * * " (ibid.), and "(a)ny evidence whether documentary, testimonial, or in other form, offered by a claimant in support of a claim and any issue he may raise and contention and argument he may offer with respect thereto are to be included in the records" (38 C.F.R. 3.103(b)). The VA is also under an obligation "to render a decision which grants (the claimant) every benefit that can be supported in law while protecting the interests of the Government" (38 C.F.R. 3.103(a)), and "(i)t is the defined and consistently applied policy of the Veterans Administration to administer the law under a broad interpretation * * * " (38 C.F.R. 3.102). Furthermore, "(w)hen, after careful consideration of all procurable and assembled data, a reasonable doubt arises regarding service origin, the degree of disability, or any other point, such doubt will be resolved in favor of the claimant" (ibid.). Mere suspicion or doubt as to the truth of any statements submitted, as distinguished from impeachment or contradiction by evidence or known facts, is not a justifiable basis for denying the application of the reasonable doubt doctrine if the entire, complete record otherwise warrants invoking this doctrine. The reasonable doubt doctrine is also applicable even in the absence of official records * * * . Ibid. A claimant is "entitled to a hearing at any time on any issue involved in a claim * * * " (38 C.F.R. 3.103(c)). The purpose of the hearing is to permit the claimant to present any evidence or arguments that bear on the claim (ibid.). "It is the responsibility of the Veterans Administration personnel conducting the hearing to explain fully the issues and to suggest the submission of evidence which the claimant may have overlooked and which would be of advantage to his position" (ibid.). Likewise, "questions which are directed to the claimant and to witnesses are to be framed to explore fully the basis for claimed entitlement rather than with an intent to refute evidence and to discredit testimony" (ibid.). The claimant is notified of any decision on his claim, including "the reason for the decision," "the date it will be effectuated," and "the right to a hearing" (38 C.F.R. 3.103(e)). In the event of an adverse decision, the claimant is advised of his right to appeal and the applicable time limits for taking an appeal (ibid.; 38 C.F.R. 19.114). An appeal is initiated by filing a notice of disagreement (38 U.S.C. 4005(a); 38 C.F.R. 3.103(e), 19.118), which is "(a) written communication from a claimant or the representative expressing dissatisfaction or disagreement with * * * (the original) determination * * * . It need not be expressed in any special wording" (38 C.F.R. 19.117). After a notice of disagreement is submitted, the agency of original jurisdiction may reconsider the claim (38 U.S.C. 4005(d)(1); 38 C.F.R. 19.119(a)). If the decision remains adverse to the claimant, he is "entitle(d) * * * to a (s)tatement of the case for his assistance in perfecting his appeal" (38 C.F.R. 3.103(e); see also 38 C.F.R. 19.119(b)). "The statement of the case should provide the appellant notice of those facts and applicable laws and regulations upon which the agency of original jurisdiction based its determination of the issue or issues. It should be complete enough to allow the appellant to present written and/or oral argument * * * (on appeal)" (38 C.F.R. 19.120(a)). In particular, a statement of the case is required to contain: (1) A summary of the evidence in the case relating to the issue or issues with which the appellant or representative has expressed disagreement. (2) A summary of the applicable law and regulations, with appropriate citations. (3) The determination of the agency of original jurisdiction on each issue and the reasons for each such determination with respect to which disagreement has been expressed. 38 C.F.R. 19.120(b); see also 38 U.S.C. 4005(d)(1). Following receipt of the statement of the case, a claimant perfects his appeal by completing and submitting a form that is provided to him by the VA (see 38 C.F.R. 19.121, 19.123). Appeals in claims for service-connected death and disability benefits are within the jurisdiction of the Board of Veterans' Appeals (BVA). See 38 U.S.C. 4001, 4004; 38 C.F.R. 19.1, 19.2. The Board undertakes de novo review of the claim; it "exercise(s) the same authority as the department having original jurisdictional responsibility" (38 C.F.R. 19.1(a)) and has "jurisdiction * * * (as) to all questions * * * " (38 C.F.R. 19.112(a); see also 38 U.S.C. 4004(a)). Upon request, a claimant is entitled to a hearing on appeal (38 C.F.R. 19.157(a)). Hearings are held either in Washington, D.C., or at VA facilities around the country (38 C.F.R. 19.160). "The purpose of a hearing is to receive argument and testimony relevant and material to the appellate issue" (38 C.F.R. 19.157(b)). Like the previous proceedings on the claim, hearings before the BVA "are ex parte in nature and nonadversarial" (38 C.F.R. 19.157(c)); although parties are allowed to ask questions, there is no formal cross-examination or rebuttal of evidence, and the rules of evidence do not apply (ibid.). The claimant may also be given an opportunity to submit additional evidence following the hearing (38 C.F.R. 19.164). Based on the record, the Board may allow the claim in whole or in part, deny or dismiss it, or remand for further development (38 C.F.R. 19.180, 19.182). The decision of the BVA on service-connected death and disability claims is final (38 C.F.R. 19.104) and is not subject to judicial review. 38 U.S.C. 211(a); Johnson v. Robison, 415 U.S. 361 (1974). /3/ 2. A claimant is entitled to representation at all stages of the administrative process (38 C.F.R. 3.103(d), 19.150). Such representation may be provided by a member of a recognized organization (as discussed below), an attorney or agent (subject to the fee limitation at issue here), or other person authorized to represent claimants. The VA has prescribed eligibility standards for each of these categories of representatives (see 38 U.S.C. 3401, 3404(a) and (b); 38 C.F.R. 14.626-14.637, 19.150-19.156) to ensure that claimants "have qualified representation in the preparation, presentation, and prosecution of claims for veterans' benefits" (38 C.F.R. 14.626). Under 38 U.S.C. 3402(a)(1), Congress has authorized the VA to recognize individuals from certain veterans' and service organizations as representatives "in the preparation, presentation, and prosecution of claims under laws administered by the Veterans' Administration." /4/ The VA may furnish space and office facilities for the use of paid full-time representatives of such organizations (38 U.S.C. 3402(a)(2)). Recognition may be given to national or state veterans' organizations and to other veterans' organizations that are primarily involved in delivering services to veterans and that, inter alia, will provide complete claims service and undertake affirmative action, such as training and monitoring of their representatives, to ensure proper handling of claims (38 C.F.R. 14.628(d)(4) and (5), 14.628(e)(4) and (5)). In addition, in order to be recognized, representatives from these organizations must certify that "no fee or compensation of any nature will be charged any individual for services rendered in connection with any claim" (38 U.S.C. 3402(b)(1)). Pursuant to these provisions, there has developed "a strong and vital system of veterans service officers who provide excellent representation at no cost to claimants." S. Rep. 97-466, 97th Cong., 2d Sess. 50-51 (1982); see also Legal Fees: Hearings Before the Subcomm. on Representation of Citizen Interests of the Senate Comm. on the Judiciary, 93d Cong., 1st Sess., Pts. 1 & 2, at 457 (1973). Appellees, dissatisfied with this system of representation, seek to retain private attorneys to pursue their benefit claims before the VA and thus challenge the validity of the fee restriction in 38 U.S.C. 3404(c). 3. This action was filed in the United States District Court for the Northern District of California in April 1983. Plaintiff-appellees are veterans' groups and individual veterans or their surviving spouses; no plaintiff class was requested or certified. Appellees alleged that the $10 fee limitation prevents veterans from retaining attorneys and that, in the absence of such representation, the administrative claims system is fundamentally unfair and denies veterans their Fifth Amendment right to procedural due process and their First Amendment rights of association and free speech and to petition for a redress of grievances. Following extensive discovery by appellees, /5/ the district court concluded that appellees "have a high probability of success" on their constitutional arguments (App., infra, 6a; see also id. at 40a, 41a, 47a, 48a) and entered a preliminary injunction against enforcement of 38 U.S.C. 3404 and 3405. /6/ With respect to the procedural due process issue, the district court recognized (App., infra, 6a) that both this Court, summarily affirming the decision of a three-judge district court, and the Ninth Circuit had sustained the constitutionality of 38 U.S.C. 3404(c). Gendron v. Levi, 423 U.S. 802, aff'g Gendron v. Saxbe, 389 F. Supp. 1303 (C.D. Cal, 1975); Demarest v. United States, 718 F.2d 964 (1983), cert. denied, No. 83-1176 (Apr. 23, 1984). The court sought to distinguish these decisions, however, on the ground that they involved challenges to Section 3404 on its face and did not preclude an attack on the statute "as applied to the facts of this case" (App., infra, 10a; see also id. at 7a n.7, 14a, 15a). The court remarked that "(i)t is particularly important to conduct a careful inquiry into a statute's application to all the facts at hand where that statute is being challenged as violative of procedural due process" (id. at 11a), and it noted (id. at 12a) that appellees have engaged in extensive discovery * * * (and) have gathered a great deal of evidence regarding the way the claims process functions and whether it tends to be adversarial, the extent to which VA employees or service organization representatives are able to aid veterans in gathering supporting materials and presenting their claims, the special difficulties posed by such complex claims as those relating to Agent Orange or radiation-related illnesses, the way in which the lack of an attorney renders veterans unable to present their claims adequately, and the financial hardship imposed on veterans by the $10.00 limit. They have also presented statistical evidence regarding the success rates of various types of * * * claims before the several levels of the VA. Based on that evidence, the district court determined that, while the VA process was designed to be informal and nonadversarial (App., infra, 32a-33a), "both the procedures and the substance entailed in presenting * * * claims to the VA are extremely complex" (id. at 30a) and "particularly so with respect to those claimants seeking to obtain benefits for deaths or disabilities arising from such causes as exposure to atomic radiation or Agent Orange, or from Post Traumatic Stress Syndrome" (id. at 32a). The court also concluded that, because of resource limitations, neither service organization personnel representing claimants nor VA employees are able to devote the same time and resources to a case that a retained attorney would (id. at 27a, 33a, 36a, 37a-38a). As the court explained (id. at 33a, 37a-38a): (N)either the VA officials themselves nor the service organizations are providing the full array of services that paid attorneys might make available to claimants. Even assuming that all VA personnel were prepared to do everything that they could to build claimants' cases for them, it is clear that the resources of the VA are insufficient to permit the substantial investment of time that would be necessary. * * * * * (Appellees) do not deny that such (service) organizations provide substantial service, but argue simply that due to these organizations' limited resources, they are unable to provide the full array of services which a paid attorney might provide. * * * Given the very limited extent to which either the VA personnel or service organization representatives are able to assist veterans or their families in bringing service-related death and disability claims, the vast substantive and procedural complexities facing such claimants, and the important need of such claimants, the $10.00 fee limitation deprives plaintiffs of the ability to make a full presentation of their claim to the VA. The district court also held that, independently of the Due Process Clause, the First Amendment entitles the individual appellees to "meaningful" (App., infra, 45a) and "effective" (ibid.) access to the VA and protects the right of the organizational appellees to "provid(e) adequate legal services to their members" (id. at 40a). The court determined (id. at 47a) that appellees "have submitted vast numbers of depositions, declarations, and documents demonstrating that claimants' inability to employ counsel for a fee of more than $10.00 severely impedes their efforts to investigate and present their death and disability claims to the VA." Finding that Gendron and Demarest had not presented First Amendment challenges to Section 3404(c) (App., infra, 40a-41a), the court concluded that appellees had "shown a high probability of success on their First Amendment claim" (id. at 48a). Finally, the district court held that appellees had demonstrated that they would suffer irreparable injury if a preliminary injunction were denied and that the balance of hardships between the parties was in their favor (App., infra, 48a-51a). Accordingly, the district court entered a broad preliminary injunction against enforcement of Sections 3404(c) and 3405; that injunction is of nationwide scope, is not limited to the appellees in this case, is not confined to unusually complex or complicated cases, and is not otherwise restricted to instances in which the court believed that the claims procedure would be unfair or inadequate in the absence of a retained attorney. In addition, the court required the VA to take various affirmative steps to remove references to the fee limitation in its forms and other documents and to post a summary of the preliminary injuction in VA offices across the country. App., infra, 52a. On the government's motion for a stay pending appeal, the district court modified the injunction with regard to certain provisions concerning implementation, but in all other respects it denied a stay. App., infra, 53a-59a. On September 27, 1984, Justice Rehnquist granted the government's application for a stay of the district court's injunction pending direct appeal to this Court. THE QUESTION IS SUBSTANTIAL The district court has held unconstitutional a century-old federal statute that has previously been sustained by both this Court and other courts. Moreover, Congress has repeatedly examined the fee limitation and, as recently as the current Congress, has adhered to it. Notwithstanding this well-considered policy, the court below reviewed the operation of the VA claims system and set aside the statute on the basis of its conclusion -- contrary to the determination of Congress -- that the system is adversarial in nature and that the VA and the veterans' service organizations do not provide adequate representation to claimants. In thus holding that the right to retain an attorney without regard to the statutory fee limitation is necessary to a fundamentally fair administrative procedure, the district court followed an erroneous method of analysis and reached an incorrect result. Accordingly, review by this Court is warranted. 1. a. Both this Court's ruling in Gendron and the Ninth Circuit's recent decision in Demarest have upheld the validity of 38 U.S.C. 3404(c) under the Due Process Clause. /7/ Indeed, as we pointed out in our motion to affirm in Gendron (at 3-4), and our brief in opposition in Demarest (at 3, 6 n.11), every court to consider the issue (now with the exception of the court below) has held that Section 3404(c) is constitutional, and this Court has consistently denied certiorari. /8/ The decision below is plainly at odds with this line of authority. /9/ Moreover, the predecessor of Section 3404(c) was enacted in 1862, and a strict limitation on fees for retained counsel in VA claims proceedings has been in place since that time. /10/ The absence of a successful challenge to the fee limitation during that period is telling evidence against the district court's novel holding. Congress has also repeatedly revisited the fee limitation and, most recently in 1983, decided to leave that policy in force. See Gendron Mot. to Aff. 7 n.9; Demarest Br. in Opp. 7. The usual presumption of constitutionality of Acts of Congress, especially in light of the longstanding and recently reaffirmed adherence by Congress to the fee provision, substantially undermines the decision below. See, e.g., Marsh v. Chambers, No. 82-23 (July 5, 1983), slip op. 3, 6-7; United States v. National Dairy Products Corp., 372 U.S. 29, 32 (1963); cf Hurtado v. United States, 410 U.S. 578 (1973); Romero v. International Terminal Operating Co., 358 U.S. 354, 370-371 (1959). b. In our view, the district court's basic approach in this case misconceived the proper role of the judiciary and its relationship to the legislative branch of government. In setting aside the fee limitation, the court below disregarded the congressional choice to establish an informal and nonadversarial system for resolving veterans' benefits claims, and its decision will significantly alter the basic nature of the claims process. Moreover, Congress has inquired into and assessed the nature and operation of the VA claims procedure, and the court erred in ignoring Congress's determinations and undertaking an independent factual review of the benefit system. The VA claims system has been described above (see pages 3-8, supra). The veterans' benefit statute and implementing regulations make clear that the system is designed to be an informal and nonadversarial process. It cannot be doubted that Congress, in creating a statutory benefit program, may depart from the traditional litigation model for adjudicating claims and instead follow an alternative approach in which lawyers are not necessary to a fair procedure. This is precisely what Congress has done here. If, as the district court believed, the claims system is fundamentally unfair because it is operating in a more formal and adversarial fashion than Congress intended, the appropriate remedy would be to require that the system conform to the congressional directive, not to invalidate the fee limitation and thereby work a further deviation from Congress's purpose. By striking down the fee limitation in order to increase the participation of lawyers in the VA process, the district court's action can only result, contrary to Congress's intent, in an even more formal and adversarial claims process. Furthermore, as explained in our motion to affirm in Gendron (at 4-7) and our brief in opposition in Demarest (at 3-4, 7), Congress's consistent adherence to the fee limitation over the years reflects its assessment that the existing system is, in fact, an informal and nonadversarial process in which the VA and service organizations provide free assistance to the veteran in understanding the proceedings and presenting his claim. For example, as recently stated by the Senate Committee on Veterans' Affairs: Many of the VA's internal procedures, particularly in the area of adjudication of claims, have developed over the years in such a way as to afford to VA claimants some advantages not afforded to claimants before other agencies. Advantages most often cited are the VA's very liberal standards for the admission of evidence, and free representation before the VA by skilled officers of the various national veterans' service organizations -- advantages which are often credited for the informal, "nonadversarial" nature of VA proceedings. * * * (The Committee has) abiding respect * * * for the high quality of representation offered by the veterans' service organizations * * * . * * * * * * * * (T)he Committee is concerned that any changes relating to attorneys' fees be made carefully so as not to induce unnecessary retention of attorneys by VA claimants and not to disrupt unnecessarily the very effective network of nonattorney resources that has evolved in the absence of significant attorney involvement in VA claims matters. The mainstays of that network are veterans' service officers, employees of national veterans' service organizations, and other organizations approved pursuant to present section 3402 of title 38, who provide representation without charge to veterans and other claimants before the VA, without regard to whether the individual claimant is a member of the service officer's organization. It is widely recognized, as the VA noted * * * (,) that veterans' service officers "render sophisticated and expert assistance in prosecuting a claim", and the Committee strongly believes that the availability of their services should be maintained and fostered. S. Rep. 97-466, 97th Cong., 2d Sess. 25, 49-50, 50-51 (1982); see also e.g., id. at 19, 32, 63; 129 Cong. Rec. S1897 (daily ed. Mar. 1, 1983) (remarks of Sen. Simpson); Veterans' Administration Adjudication Procedure and judicial Review Act and the VA's Fiscal Year 1984 Major Construction Project Proposals: Hearing on S. 636 Before the Senate Comm. on Veterans' Affairs, 98th Cong., 1st Sess. 67, 139 (1983). In addition, Congress was informed that claimants represented by service organizations have virtually the same rate of success -- and in some instances a higher rate -- than claimants represented by an attorney (id. at 67, 237, 252-256, 259; see also S. Rep. 96-178, 96th Cong., 1st Sess. 101 (1979)). Thus, Congress has recognized the nonadversarial nature of the claims process and the expert representation provided by service organizations without charge. See Staub v. Johnson, 519 F.2d 298, 300 (D.C. Cir. 1975). /11/ Despite Congress's determination of legislative fact regarding the operation of the VA claims system, the district court simply disregarded the legislative assessment and, based on the record developed in this litigation, undertook to re-weigh essentially the same contentions that had been presented to Congress and to make de novo findings on the same issues concerning the general workings of the claims process. This was not within the district court's province. To be sure, it is the ultimate responsibility of the judiciary to decide whether the constitutional standards of due process are satisfied. /12/ But in addressing that question, the courts are not free to ignore the legislature's findings concerning those subjects of broad and general applicability -- such as are involved in understanding and evaluating the nature of the VA claims procedure -- that are not matters of historical or adjudicative fact and do not lend themselves to resolution through the judicial process in litigation between two parties. Where, as here, a broad challenge is made to the constitutionality of a federal statute, the validity of the statute does not vary from case to case and district to district depending upon the record that the parties develop in the particular lawsuit. Of course, in discharging its legislative function, Congress is not required to make findings of fact. See United States Railroad Retirement Board v. Fritz, 449 U.S. 166, 179 (1980); Katzenbach v. McClung, 379 U.S. at 299, 304. But where Congress has done so, due regard for the proper separation of powers and for the superior ability of the legislature to gather information and analyze issues of legislative fact (see, e.g., Eastland v. United States Servicemen's Fund, 421 U.S. 491, 504-505 (1975); Branzburg v. Hayes, 408 U.S. 665, 693-694 (1972) requires that courts defer to Congress's determinations unless those determinations can be said to be irrational. See, e.g., Ruckelshaus v. Monsanto Co., No. 83-196 (June 26, 1984), slip op. 26 n.18; Texaco, Inc. v. Short, 454 U.S. 516, 532-533 (1982); Rostker v. Goldberg, 453 U.S. 57, 74, 81-83 (1981); Vance v. Bradley, 440 U.S. 93, 106, 111 (1979); Kleppe v. New Mexico, 426 U.S. 529, 541 n.10 (1976); Firemen v. Chicago, R.I. & P.R.R. 393 U.S. 129, 136, 138-139 (1968); Clark v. Paul Gray, Inc., 306 U.S. 583, 594 (1939). Indeed, this principle is particularly appropriate on issues of procedural fairness, since "procedural due process rules are shaped by the risk of error inherent in the truthfinding process as applied to the generality of cases, not the rare exceptions." Mathews v. Eldridge, 424 U.S. 319, 344 (1976). Judged under the correct legal standards, it is clear that Section 3404(c), viewed in the context of the nonadversarial claims system (see Richardson v. Perales, 402 U.S. 389, 403 (1971) in which veterans are provided expert representation by service organizations without charge, does not deny fundamental fairness. This Court has recognized that a lawyer (whether retained or appointed) is not always necessary to a fair proceeding and that the interest in being represented by counsel in a given procedural setting must be assessed in light of competing societal considerations. See Lassiter v. Department of Social Services, 452 U.S. 18 (1981); Baxter v. Palmigiano, 425 U.S. 308, 312, 314-315 (1976); Goss v. Lopez, 419 U.S. 565, 583 (1975); Wolff v. McDonnell, 418 U.S. 539, 569-570 (1974); Gagnon v. Scarpelli, 411 U.S. 778, 787-788 (1973); Vitek v. Jones, 445 U.S. 480, 499-500 (1980) (Powell, J., concurring in part); cf. Schweiker v. McClure, 456 U.S. 188, 199 n.14 (1982); Parham v. J.R., 442 U.S. 584, 607 (1979). Contrary to the decision below, the Due Process Clause "'is not so rigid as to require that significant interests in informality, flexibility and economy must always be sacrificed'" (Lassiter v. Department of Social Services, 452 U.S. at 31 (citation omitted)). /13/ The fee limitation in Section 3404(c) serves several legitimate purposes. For example, it "protect(s veterans) and secure(s) to them the use of the (payments) granted in their behalf" by ensuring that such funds "inure solely to the benefit of the (veteran)" and are not diminished by lawyer's fees. United States v. Hall, 98 U.S. 343, 353 (1878); see also United States v. Fairchilds, 25 F. Cas. 1035, 1037 (W.D. Mich. 1867) (No. 15,067). Similarly, the limitation "protect(s) just claimants from extortion or improvident bargains" in their dealings with unscrupulous attorneys (Calhoun v. Massie, 253 U.S. 170, 173 (1920)) and thus prevents overreaching and sharp practices. See Staub v. Johnson, 519 F.2d 298, 300 (D.C. Cir. 1975); United States v. Marks, 26 F. Cas. 1162, 1163 (C.C.D. Ky. 1869) (No. 15,721). And, by eliminating any possible incentive for counsel to bring unwarranted claims, it guards "the Treasury from frauds and imposition" (Calhoun v. Massie, 253 U.S. at 173). In addition, the fee limitation is an important part of the informal and nonadversarial system that Congress has established to process a high volume of largely fact-bound claims fairly and efficiently. /14/ Cf. Mathews v. Eldridge, 424 U.S. at 348. By restricting the participation of lawyers, the fee limitation helps to ensure the informality and nonadversarial nature of the claims process. Compare, e.g., Wolff v. McDonnell, 418 U.S. at 570; Gagnon v. Scarpelli, 411 U.S. at 787-788. Rather than viewing the fee limitation in the context of the overall system, the court below examined it in isolation and thus ignored the substantial interests it serves. In effect, Congress has set up an alternative dispute resolution procedure in which lawyers are not necessary to a fair determination of benefit claims. Furthermore, because VA benefits are "gratuities" (Lynch v. United States, 292 U.S. 571, 577 (1934)) that are paid entirely from public funds and do not involve financial contributions from veterans, Congress should be accorded particularly wide latitude to structure the process by which claims are adjudicated and benefits paid. Cf. Arnett v. Kennedy, 416 U.S. 134, 151-155 (1974) (plurality opinion); Calhoun v. Massie, 253 U.S. at 176. The district court erred in striking down this legislative "experiment" in claims procedure and in substituting a claims adjudication regime that Congress has repeatedly rejected. See Parham v. J.R., 442 U.S. at 608 n.16; Whalen v. Roe, 429 U.S. 589, 598 (1977). /15/ To be sure, it could be argued that the $10 fee limitation has become obsolete and that a higher figure would be appropriate. Likewise, some would consider another form of limitation -- such as a percentage of the benefit award rather than an absolute dollar amount -- to be preferable as a matter of policy. Such arguments, however, must be addressed to Congress rather than to the courts. /16/ Congress has in fact considered these issues and has consistently adhered to the provision that appellees seek to overturn in this litigation. Congress's choice among available alternatives, and the wisdom of its policy, are not matters for constitutional adjudication. /17/ 2. The district court also erred in concluding that Section 3404(c) violates appellees' First Amendment rights of association and speech and to petition for a redress of grievances. We do not believe that this case presents a First Amendment issue that is separate and independent from the due process question. The First Amendment decisions relied on by the district court rest on the need for "effective" and "meaningful" representation. United Transportation Union v. Michigan Bar, 401 U.S. 576, 584-585 (1971). In those cases, it was clear that the assistance of counsel was required in order adequately to pursue the legal rights involved. Here, on the other hand, if the existing VA claims procedure is fair and adequate without privately retained attorneys, there is no basis in the First Amendment for inferring a right to counsel as necessary to effectuate the freedoms of association, speech, and petition for redress. Moreover, Section 3404(c) does not prevent veterans from associating or petitioning, or veterans' organizations from furnishing supporting services (including legal advice and representation), provided only that the claimant is not charged more than $10. Cf. Minnesota Bd. for Community Colleges v. Knight, No. 82-898 (Feb. 21, 1984), slip op. 16-18. This statute is a far cry from the situations presented in the cases cited by the district court, and nothing in those decisions suggests that the fee limit is unconstitutional because it restricts a claimant in hiring a private lawyer where other, adequate representation is available without charge. /18/ CONCLUSION Probable jurisdiction should be noted. Respectfully submitted. Rex E. Lee Solicitor General Richard K. Willard Acting Assistant Attorney General Kenneth S. Geller Deputy Solicitor General Mark I. Levy Assistant to the Solicitor General William Kanter Robert V. Zener Attorneys OCTOBER 1984 /1/ Section 3404 is applicable to fees in administrative proceedings. Judicial review of the decision of the Administrator on service-connected death and disability claims is expressly precluded by statute (see 38 U.S.C. 211(a); page 7, infra). In contrast, Congress has authorized suits on claims under certain veterans' insurance programs (see 38 U.S.C. 784(a)) and has allowed a fee not to exceed 10% of the amount recovered for representation in such suits (38 U.S.C. 784(g)). The limitation in Section 3404 applies to the fees of an agent or attorney regardless of the nature of the work performed (see Hines v. Lowrey, 305 U.S. 85, 89 (1938)), but it does not bar reimbursement for expenses incurred in connection with a claim. See 38 C.F.R. 14.634(b). /2/ See generally S. Rep. 97-466, 97th Cong., 2d Sess. 86-87, 126-135 (1982); Judicial Review of Veterans' Claims: Hearings Before the Subcomm. on Oversight and Investigations of the House Comm. on Veterans' Affairs, 98th Cong., 1st Sess. 178-200 (1983). /3/ Although the decision of the BVA is final, liberal provisions exist for reconsidering a BVA decision and for reopening a denied claim on the basis of new evidence. See 38 C.F.R. 19.185-19.190, 19.194; see also 38 C.F.R. 3.104, 3.105, 3.156. /4/ The statute specifically enumerates the Red Cross, the American Legion, the Disabled American Veterans, the United Spanish War Veterans, and the Veterans of Foreign Wars. The Administrator may also recognize "such other organizations as he may approve" (38 U.S.C. 3402(a)(1)). /5/ As the district court recognized, appellees' discovery in this case has been "extensive" (App., infra, 12a) and involves "a great deal of evidence" (ibid.), including depositions of seven VA officials and interrogatories and requests for documents that led to the government's production of more than 25,000 pages of material. Appellees themselves acknowledge that they engaged in "six months of extensive discovery" (Br. in Opp. to Stay 1). /6/ The district court had previously denied the government's motion to dismiss the complaint, finding that appellees had stated a claim under both the Due Process Clause of the Fifth Amendment and the First Amendment. /7/ Of course, this Court's summary affirmance in Gendron constitutes a ruling on the merits. See Southern Ry. v. Seaboard Allied Milling Corp., 442 U.S. 444, 462 (1979); Tully v. Griffin, Inc., 429 U.S. 68, 74 (1976); Hicks v. Miranda, 422 U.S. 332, 343-345 (1975). /8/ See also United States v. Marks, 26 F. Cas. 1162 (C.C.D. Ky. 1869) (No. 15,721), and United States v. Fairchilds, 25 F. Cas. 1035 (W.D. Mich. 1867) (No. 15,067), cited in United States v. Hall, 98 U.S. 343, 356 (1878). Copies of the jurisdictional statement, the motion to affirm, and the reply brief in Gendron, and the brief in opposition in Demarest, were served on counsel for appellees as attachments to our application in this Court for a stay pending appeal. /9/ The court below sought (App., infra, 12a-13a) to distinguish Gendron on the ground that, in contrast to the instant case, the plaintiff there "presented no evidence that service organization representation was inadequate or that the veteran's claim was particularly complex." As the court elsewhere recognized, however (id. at 9a n.9), the jurisdictional statement in Gendron specifically presented the question whether "the District Court improperly refuse(d) to receive evidence * * * that private veterans' organizations and their lay persons do not provide adequate representation * * * ." See Gendron J.S. 5. Indeed, the jurisdictional statement repeatedly raised issues concerning the adequacy of representation by service organizations and the complexity of veterans' claims (id. at 6-7, 9 & n.4, 10, 12, 20, D2). The same points were reiterated in the reply brief at the jurisdictional stage (at 4-5, 6, 7, 8-9). We also note that the three-judge district court in Gendron, unlike the court in this case (see pages 9-12, supra, and 16-20, infra), relied on Congress's evaluation of the nature and operation of the VA claims system (389 F. Supp. at 1307) and did not independently take evidence on that issue. Thus, Gendron and the decision below are fundamentally in conflict. /10/ The history and development of the statutory fee limitation is traced in the appendix to our motion to affirm in Gendron and in our brief in opposition in Demarest (at 4 n.3). /11/ It is particularly significant that the recent proposal in Congress to amend Section 3404(c) (which was adopted in the Senate but failed to pass the House) would have left standing the $10 fee limitation for administrative proceedings through decision by the BVA and would have allowed greater fees only for subsequent administrative stages (such as motions to reconsider or reopen) and suits for judicial review (as authorized in the bill). See S. Rep. 98-130, 98th Cong., 1st Sess. 22, 23, 48-50 (1983); S. Rep. 97-466, 97th Cong., 2d Sess. 23, 49-54 (1982). As the Senate Committee on Veterans' Affairs explained (id. at 50): The Committee, in its consideration of the issue of attorneys' fees also recognized that the existing limit on attorneys' fees is generally appropriate with respect to the initial claims stage in the sense that applying for VA benefits is a relatively uncomplicated procedure, with the VA generally securing the relevant military records as well as evaluating the merits of the claim. In light of the availability of national service officers and other nonlegal forms of free assistance, there would seem to be no need for the assistance of an attorney in order to initiate the claims process by completing and filing an application. Moreover, even if the initial decision is adverse, the Committee believes that it may be unnecessary for a claimant to incur the substantial expenses for attorney representation that may be involved in appealing the case for the first time to the BVA. The claimant may well prevail, as many claimants currently do, without legal representation when the case is first before the BVA. However, once the BVA renders a decision adverse to the claimant on the merits, the need for the assistance of an attorney is then markedly greater with respect to such issues as seeking a reopening and reconsideration and deciding whether to proceed to court. Thus, continuing to discourage attorney representation at the initial application, decision and appeal stages would, the Committee believes, appropriately serve to protect claimant's benefits without prejudicing the claimant's ability to obtain effective legal representation at a later point. See also id. at 51-52. /12/ Even in making that legal determination, courts should give substantial weight to the views of Congress and the responsible agency concerning the procedures necessary to ensure fairness in the administrative process. See Mathews v. Eldridge, 424 U.S. 319, 349 (1976); Columbia Broadcasting System, Inc. v. Democratic National Comm., 412 U.S. 94, 102 (1973); Arnett v. Kennedy, 416 U.S. 134, 202 (1974) (White, J., concurring in part and dissenting in part); see also Rostker v. Goldberg, 453 U.S. 57, 64 (1981); Fullilove v. Klutznick, 448 U.S. 448, 472 (1980) (plurality opinion). /13/ The district court heavily relied (see pages 10-11, supra) on its view that the VA and the service organizations have inadequate resources to provide the same level of preparation and assistance to every claimant that a privately retained representative would. Even assuming that to be true, however, the court's concern would not implicate a right to counsel; presumably a Legal Services attorney (who would not charge a fee and thus would not be constrained by Section 3404(c) from representing a client), or indeed a representative from a service organization who happens to be a lawyer, would labor under the same sorts of institutional and resource limitations. A right to counsel must rest on the special capabilities of an attorney and cannot be invoked to further other objectives that have little if anything to do with the role of lawyers. See United States v. Gouveia, No. 83-128 (May 29, 1984), slip op. 10-11. /14/ In 1983, nearly 3 million cases involving service-connected death and disability claims (as well as more than 1.5 million nonservice-connected claims, which are subject to the same administrative procedures and fee limitation) were on the VA rolls. Moreover, the Board of Veterans' Appeals decided over 38,000 cases in 1983 and had approximately 64,000 appeals pending at the end of the year. 1983 VA Ann. Rep. 63, 113-114. /15/ Because the district court's preliminary injunction rests on an error of law, it is subject to plenary review by this Court. See Withrow v. Larkin, 421 U.S. 35, 46, 55 (1975); Houchins v. KQED, 429 U.S. 1341, 1344 (1977) (Rehnquist, Circuit Justice); Delaware & H. Ry. v. United Transportation Union, 450 F.2d 603, 620 (D.C. Cir.) (Leventhal, J.), cert, denied, 403 U.S. 911 (1971); 7 Moore's Federal Practice Para. 65.21, at 65-154 & n.26 (1984). Likewise on an appeal from a preliminary injunction, the Court has jurisdiction to review the denial by a district court, as in this case (see page 9 note 6, supra), of a motion to dismiss the complaint. See Deckert v. Independence Shares Corp., 311 U.S. 282, 286-287 (1940); Energy Action Educational Foundation v. Andrus, 654 F.2d 735, 745-746 & n.54 (D.C. Cir. 1980), rev'd on other grounds sub nom. Watt v. Energy Action Educational Foundation, 454 U.S. 151 (1981); FTC v. Cinderella Career & Finishing Schools, Inc., 404 F.2d 1308, 1310-1311 (D.C. Cir. 1968). Of course, it is often appropriate for an appellate court to review a preliminary injunction under a deferential "abuse of discretion" standard where, for example, the need for an expeditious ruling at the trial level limits the analysis of relevant legal issues or precludes the development of a full factual record on which the outcome of the controversy will turn. See, e.g., University of Texas v. Camenisch, 451 U.S. 390, 394-396 (1981); Brown v. Chote, 411 U.S. 452, 456-457 (1973). Such a standard is inapplicable here, however. The district court's order is premised on a decisive legal error, appellees engaged in extensive discovery to support their request for an injunction, and the court had ample opportunity to consider the issues and write a lengthy opinion. Moreover, the district court's decree, while formally a preliminary injunction, is an exceedingly broad order (see page 12, supra) that does not simply preserve the status quo pending trial (see 7 Moore's Federal Practice Para. 65.04(1), at 65-36 (1984); Camenisch, 451 U.S. at 395) but instead changes the status quo and grants the complete affirmative relief that would be sought in a permanent injunction. And we are advised by the Assistant United States Attorney that the issue of a permanent injunction probably would not be resolved by the district court for a year or more, and therefore the preliminary injunction in this case, unlike in many other cases, was intended to be in effect for an extended period. In these circumstances, there is no obstacle to the Court's review on the merits of the legal validity of the injunction entered below. /16/ See, e.g., United States v. Lorenzetti, No. 83-838 (May 29, 1984), slip op. 11; Hodel v. Indiana, 452 U.S. 314, 333 (1981); Harris v. McRae, 448 U.S. 297, 325-326 (1980); Bell v. Wolfish, 441 U.S. 520, 542 n.25 (1979); James v. Strange, 407 U.S. 128, 133 (1972); Heart of Atlanta Motel v. United States, 379 U.S. 241, 261-262 (1964). /17/ For the reasons stated in our motion to affirm in Gendron (at 8-9), and our brief in opposition in Demarest (at 5 & n.8), we also submit that the court below incorrectly held (App., infra, 15a-19a) that initial applicants for VA benefits have a property interest protected by the Due Process Clause. /18/ The district court's ruling is also inconsistent with Staub v. Roudebush, 424 F.Supp. 1346, 1349 (D.D.C. 1976), vacated and remanded for lack of standing, 574 F.2d 637 (D.C. Cir. 1978) (Table), which rejected an indistinguishable First Amendment challenge to Section 3404(c). APPENDIX