Ireneo Recinto, et al v. The U.S. Department of V.A., et al

Filing

FILED OPINION (ROBERT D. SACK, RONALD M. GOULD and MILAN D. SMITH, JR.) AFFIRMED. Judge: RMG Authoring, FILED AND ENTERED JUDGMENT. [8503772]

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
IRENEO RECINTO ; BIENVENIDO
GALAS, SR.; RICARDO PINERO ;
JUANITA QUIMBO ; FLORENTINO S.
TORRALBA ; EDER ANDRADE; JOHN
M. ASPIRAS, JR.; MARIA AGBUNAG ;
CORAZON AMBATA ; OFELIA C.
AMIO ; BEATRIZ BUENA BALLAIS;
RAMONA F. BATTUNG ; LAUREANA E.
BUNGAY ; FLORENTINA DELOS
SANTOS; CORA DIMLA ; LOLITA
EUGENIO ; EUSTOQUIA B. FABER;
MARIA D. GALANG ; ESTER G.
GALANG ; FELIZA GALEON ; JUANITA
GILO ; PACIENCIA M. MENDOZA ;
ANGELINA V. NATIVIDAD ;
ENGRACIA A. OCAMPO ; SOLEDAD N.
RESPITO ; JULIE DE VERA ; JOVITA
SALAMAT ; ANTONIETA VILLAREAL,
Plaintiffs-Appellants,
v.
THE UNITED STATES DEPARTMENT
OF VETERANS AFFAIRS ; ERIK K.
SHINSEKI, Secretary of Department
of Veterans Affairs; W. SCOTT
GOULD , Deputy Secretary of
Department of Veterans Affairs.
Defendants-Appellees.

No. 11-16341
D.C. No.
4:10-cv-04542SBA

OPINION

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Appeal from the United States District Court
for the Northern District of California
Saundra B. Armstrong, District Judge, Presiding
Argued and Submitted
November 5, 2012—San Francisco, California
Filed February 7, 2013
Before: Robert D. Sack,* Ronald M. Gould, and
Milan D. Smith, Jr., Circuit Judges.
Opinion by Judge Gould

SUMMARY**

Veterans Affairs
The panel affirmed the district court’s judgment
dismissing for failure to state a claim and for lack of subject
matter jurisdiction claims brought by a group of Filipino
World War II veterans and their widows who did not receive
payments under the Filipino Veterans Equity Compensation
Fund.

*

The Honorable Robert D. Sack, Senior Circuit Judge for the United
States Court of Appeals for the Second Circuit, sitting by designation.
**

This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.

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Under the Veterans Judicial Review Act of 1988, the
district court does not have jurisdiction over claims that
would require it to review a question of fact or law relating to
or affecting veterans’ benefits decisions. The panel held the
Act barred review of plaintiffs’ due process claim, and
therefore the district court’s dismissal of the claim was
appropriate. The panel also held that it had jurisdiction to
consider plaintiffs’ equal-protection challenge to the Filipino
Veterans Equity Compensation Fund. On the merits, the
panel held that plaintiffs failed to state a claim for an equal
protection violation.

COUNSEL
Arnedo S. Valera (argued), Law Offices of Valera &
Associates, Fairfax, Virginia, for Plaintiffs-Appellants.
Thomas M. Bondy and Henry C. Whitaker (argued), United
States Department of Justice, Washington, D.C., for
Defendants-Appellees.

OPINION
GOULD, Circuit Judge:
This case involves a group of Filipino World War II
veterans and their widows who did not receive payments
under the Filipino Veterans Equity Compensation Fund
(“FVEC”), a fund established by statute in 2009 to give a
one-time payment to each qualifying service member. These
veterans and their widows either: (1) were ineligible for
benefits under the statute; or (2) qualified for benefits, but

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were denied them because the Department of Veterans
Affairs (“VA”) could not verify military service. Plaintiffs
contend that their Fifth Amendment rights to due process and
equal protection were violated by the statute establishing the
fund and by the VA’s administration of it, resulting in their
lack of payment. The district court dismissed Plaintiffs’
claims with prejudice on the pleadings for lack of subjectmatter jurisdiction and for failure to state a claim upon which
relief can be granted. We consider whether the district
court’s dismissal was correct.
I
To place this appeal in context, we start with a refresher
on World War II history, explain the FVEC and the benefits
it provides, review the administrative process for filing and
adjudicating claims, and then discuss Plaintiffs’ claims.
A
When World War II started, the Philippines were in
transition: The islands were still a United States territory, but
they had the right to self-governance in preparation for
independence. The United States had military bases in the
Philippines and could call the archipelago’s armed forces into
service. A few months after the surprise attack on Pearl
Harbor, President Franklin Delano Roosevelt issued an
executive order placing the Filipino military under the
command of the United States Armed Forces of the Far East.
As a result of this and similar initiatives, Filipino soldiers
served alongside American troops in the Pacific Theater
during World War II.

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After the War, Congress passed the First Supplemental
Surplus Appropriation Rescission Act of 1946, Pub. L. No.
79-301, 60 Stat. 6, 14 (1946) (codified as amended at
38 U.S.C. § 107(a)), and the Second Supplemental Surplus
Appropriation Rescission Act of 1946, Pub. L. No. 79-391,
60 Stat. 221, 223 (1946) (codified as amended at 38 U.S.C.
§ 107(b)). These acts transferred $200 million to the postwar Filipino military, but they disqualified certain Filipino
fighters from receiving the same benefits enjoyed by active
members of the United States Armed Forces.
B
More than sixty years later, in February 2009, President
Obama signed into law the American Recovery and
Reinvestment Act of 2009 (“the Act”), which established the
FVEC. Pub. L. No. 111-5, § 1002, 123 Stat. 115, 200–02
(2009). The FVEC aimed to recognize the contributions
made by Filipino World War II veterans and granted onetime, lump-sum payments to each of those who qualified
under the Act. See id. at § 1002(e).
Section 1002(d) of the Act reads:
(d) ELIGIBLE PERSONS.—An eligible person is
any person who—
(1) served—
(A) before July 1, 1946, in the
organized military forces of the Government
of the Commonwealth of the Philippines,
while such forces were in the service of the
Armed Forces of the United States pursuant to

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the military order of the President dated July
26, 1941, including among such military
forces organized guerrilla forces under
commanders appointed, designated, or
subsequently recognized by the Commander
in Chief, Southwest Pacific Area, or other
competent authority in the Army of the United
States; or
(B) in the Philippine Scouts under
section 14 of the Armed Forces Voluntary
Recruitment Act of 1945 (59 Stat. 538); and
(2) was discharged or released from
service described in paragraph (1) under
conditions other than dishonorable.

Veterans must have also filed a claim for benefits within the
year after the statute’s enactment. Id. at § 1002(c). If a
qualifying veteran who filed a timely claim dies before
receiving payment, a surviving spouse takes. Id. at
§ 1002(c)(2).
Qualifying United States citizens receive $15,000 under
the FVEC, while non-citizens receive $9,000. Id. at
§ 1002(e). Acceptance of the payment constitutes “a
complete release of any claim against the United States by
reason of any [qualifying] service.” Id. at § 1002(h)(1). The
VA controls the application process, and applications “shall
contain such information and evidence as the Secretary may
require.” See id. at § 1002(c)(1). The Secretary must
administer FVEC claims “in a manner consistent with
applicable provisions of title 38, United States Code, and
other provisions of law.” Id. at § 1002(j)(2).

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C
To adjudicate veterans’ claims, the VA uses a two-step
process, beginning with a regional office that processes
claims and makes an initial decision. See Henderson ex rel.
Henderson v. Shinseki, __ U.S. __, 131 S. Ct. 1197, 1200
(2011). If a veteran is not satisfied with the decision made by
the regional office, he or she may appeal it to the VA’s Board
of Veterans’ Appeals, which makes the agency’s final
decision. Id.; see also 38 U.S.C. §§ 7101, 7104(a).
From there, benefits determinations may be appealed in
the manner established by the Veterans’ Judicial Review Act
of 1988 (“the VJRA”), Pub. L. No. 100-687, div. A, 102 Stat.
4105 (1988) (codified in sections of 38 U.S.C.). The VJRA
established an Article I court called the United States Court
of Appeals for Veterans Claims, which has exclusive
jurisdiction to review decisions of the Board of Veterans’
Appeals. See 38 U.S.C. §§ 7251,7252(a), 7261. On further
appeal, decisions from the Court of Appeals for Veterans
Claims are reviewed by the Federal Circuit. 38 U.S.C.
§ 7292(c)–(d). A person aggrieved by decision of that circuit
may seek review from the United States Supreme Court, but
for most litigants the Federal Circuit will be the last stop.
This case comes to us, rather than the Federal Circuit,
because Plaintiffs here sought to characterize their claims as
something other than an appeal of denial of benefits.
D
Plaintiffs are comprised of two groups. The first contains
seven Filipino veterans, all United States citizens, who filed
claims for FVEC benefits within the requisite one-year filing
window. As part of their application for benefits, these

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veterans attached proof of their membership in the
Commonwealth Army of the Philippines. They were all
notified that their claims were rejected by a letter reading as
follows:
Basic eligibility to VA benefits may be
established upon verification of valid military
service by the National Personnel Records
Center (“NPRC”) at St. Louis, [Missouri].
Based on the information/evidence you
submitted with your claim, NPRC is unable to
verify that you served as a member of the
Commonwealth Army of the Philippines,
including the recognized guerillas, in the
service of the Armed Forces of the United
States.
None of the veterans appealed this adverse decision to the
Board of Veterans’ Appeals.
The second group contains twenty-one widows of Filipino
veterans. These women were never eligible for benefits
under the FVEC because their husbands died before its
enactment. None of them filed a claim with the VA.
Plaintiffs filed suit in the Northern District of California
raising four constitutional claims. The district court
dismissed these claims on the pleadings for lack of subjectmatter jurisdiction and failure to state a claim upon which

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relief can be granted. Plaintiffs filed a timely appeal
challenging the dismissal of two of their four original claims.1
The claims appealed by Plaintiffs are: (1) a due-process
challenge to the VA’s exclusive reliance on records from the
NPRC to verify service history2; and (2) an equal-protection
challenge to the FVEC’s failure to provide Filipino veterans
the same benefits enjoyed by veterans of the United States
Armed Forces.
II
We have jurisdiction to review the district court’s
dismissal of these claims under 28 U.S.C. § 1291. We review
de novo the district court’s finding that it lacked subjectmatter jurisdiction. K2 Am. Corp. v. Roland Oil & Gas, LLC,
653 F.3d 1024, 1027 (9th Cir. 2011). We also review de novo
the district court’s dismissal for failure to state a claim upon
which relief can be granted. Barrett v. Belleque, 544 F.3d
1060, 1061 (9th Cir. 2008).

1

The other two claims were not raised by Plaintiffs in their opening
brief and so are waived. See United States v. Kama, 394 F.3d 1236, 1238
(9th Cir. 2005) (“Generally, an issue is waived when the appellant does
not specifically and distinctly argue the issue in his or her opening brief.”
(citations omitted)).
2

Plaintiffs support this claim in part with allegations that NPRC records
are incomplete because a fire at the records facility in 1973 destroyed
more than sixteen million official records covering the W orld W ar II
service period.

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III

We begin by considering whether the district court had
jurisdiction to hear Plaintiffs’ claims.
A
The district court dismissed Plaintiffs’ due-process
challenge to the VA’s use of NPRC records after finding that
the VJRA and sovereign immunity barred review. We first
address the VJRA’s effect on jurisdiction.
We held in Veterans for Common Sense v. Shinseki that
a district court does not have jurisdiction over claims that
would require it to review a question of fact or law relating to
or affecting veterans’ benefits decisions. 678 F.3d 1013,
1022–25 (9th Cir. 2012) (en banc) (“First, Congress has
expressly disqualified us from hearing cases related to VA
benefits in [38 U.S.C.] § 511(a) . . . and second, Congress has
conferred exclusive jurisdiction over such claims to the
[Court of Appeals for Veterans Claims] and the Federal
Circuit.” (citations omitted)). Stated another way, if
reviewing Plaintiffs’ claim would require review of the
circumstances of individual benefits requests, jurisdiction is
lacking. See id. at 1034. “Benefits” include “any payment,
service, . . . or status, entitlement to which is determined
under laws administered by the Department of Veterans
Affairs pertaining to veterans and their dependents and
survivors.” Id. at 1026 (citing 38 C.F.R. § 20.3(e)). We must
therefore evaluate both of Plaintiffs’ claims to determine
whether they require us to consider veterans’ individual
benefits decisions.

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Plaintiffs contend that their due-process claim does not
impel the court to look at the specifics of any individual
veteran’s case because it requires consideration of only the
VA policy demanding verification of service from the NPRC,
the history of the NPRC fire, and the exigent circumstances
of World War II. But in Veterans for Common Sense we held
that we lacked jurisdiction to review a claim that average
delays in the VA’s provision of mental healthcare violated
due process. Id. at 1028. We reasoned that “[t]he fact that [a
plaintiff] couches [a] complaint in terms of average delays
cannot disguise the fact that it is, fundamentally, a challenge
to thousands of . . . benefits decisions made by the VA.” Id.
at 1027. And we noted that holding otherwise “would
embroil the district court in the day-to-day operation of the
VA.” Id. at 1028.
Similarly, we hold here that the VJRA bars review of
Plaintiffs’ due-process claim. Even viewing Plaintiffs’ claim
as a systemic challenge rather than as a challenge to a group
of individual VA decisions, we conclude that addressing the
constitutionality of the VA’s exclusive reliance on NPRC
records to verify military service would necessarily require
consideration of individual cases. To determine whether the
VA policy unfairly deprives veterans of a protected property
interest, we would have to inquire into the circumstances of
at least a representative sample of those veterans who were
denied FVEC benefits based on the NPRC’s inability to
verify their service for the purpose of determining whether
members of that sample could sufficiently prove their
military service without NPRC verification. See Krainski v.
Nev. ex rel. Bd. of Regents, 616 F.3d 963, 970 (9th Cir. 2010)
(stating that a procedural due-process violation requires
showing deprivation of a constitutionally protected interest
and denial of adequate procedural protection).
Our

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interpretation of the VJRA in Veterans for Common Sense
forecloses this type of inquiry. 678 F.3d at 1027–28.
Because we hold that the VJRA precluded the district court’s
review of this claim, the district court’s dismissal of the claim
was appropriate. We do not consider whether sovereign
immunity, the alternative basis supporting dismissal, also
precludes review.3
We next consider Plaintiffs’ equal-protection claim. In
Veterans for Common Sense, we held that the VJRA did not
bar jurisdiction over a facial challenge to the constitutionality
of a statute because review of that challenge would not
require consideration of “‘decisions’ affecting the provision
of benefits to any individual claimant[].” Id. at 1034 (citing
38 U.S.C. § 511). For the same reasons, we conclude that we
have jurisdiction over Plaintiffs’ facial equal-protection
claim. Evaluation of that claim only requires us to look at the
text of the statute establishing the FVEC, nothing more. To
assess this claim we need not assess whether individual
claimants have a right to veterans benefits.

3

Plaintiffs allege for the first time on appeal that a transfer of this claim
to the Court of Appeals for Veterans Claims is warranted under 28 U.S.C.
§ 1631. But this argument is waived. See O’Guinn v. Lovelock Corr.
Ctr., 502 F.3d 1056, 1063 n.3 (9th Cir. 2007) (“Because these arguments
were not raised before the district court, they are waived.” (citation
omitted)). Even if transfer had been properly requested, we doubt that
§ 1631 would apply because Plaintiffs did not appeal their initial VA
decision to the Board of Veterans’ Appeals and the Court of Appeals for
Veterans Claims only reviews decisions from that court. See 38 U.S.C.
§ 7252(a). The claim therefore could not have been brought in the Court
of Appeals for Veterans Claims when it was filed in the district court, as
required by 28 U.S.C. § 1631.

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B
Because we have determined that there is jurisdiction to
review Plaintiffs’ facial equal-protection challenge to the
FVEC, we now consider whether the district court properly
dismissed this claim under Federal Rule of Civil Procedure
12(b)(6).4
A complaint is properly dismissed under Rule 12(b)(6)
unless it contains “enough facts to state a claim to relief that
is plausible on its face.” Coto Settlement v. Eisenberg,
593 F.3d 1031, 1034 (9th Cir. 2010) (quoting Ashcroft v.
Iqbal, 556 U.S. 662, 697 (2009)). Well-pleaded factual
allegations are taken as true, but conclusory statements or
“bare assertions” are discounted. See Chavez v. United
States, 683 F.3d 1102, 1108 (9th Cir. 2012); see also Iqbal,
556 U.S. at 681.
Specifically, an equal-protection claim must assert that a
plaintiff was treated differently than other similarly situated
persons and that the disparate treatment was intentional. See
Sischo-Nownejad v. Merced Cmty. Coll. Dist., 934 F.2d 1104,
1112 (9th Cir. 1991), superseded by statute on other grounds
as recognized by Dominguez-Curry v. Nev. Transp. Dep’t,

4

The VA contends that Plaintiffs waived their remaining equalprotection claim because (1) they did not reallege on appeal that the FVEC
does not satisfy rational basis review, and (2) they contend for the first
time on appeal that the FVEC fails to satisfy strict scrutiny because it
classifies the veterans on the basis of national origin. See Kama, 394 F.3d
at 1238 (waiver applies to issues not raised by an appellant in the opening
brief); see also O’Guinn, 502 F.3d at 1063 n.3 (waiver applies to issues
not raised before the district court). But we assume, without deciding, that
the claim is not waived and consider whether the district court’s dismissal
was proper.

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424 F.3d 1027 (9th Cir. 2005). To avoid dismissal, a plaintiff
must plausibly suggest the existence of a discriminatory
purpose. See Iqbal, 556 U.S. at 677.
Plaintiffs contend that the FVEC violates their right to
equal protection because it gives fewer benefits to Filipino
veterans than to veterans of the United States Armed Forces.
But our circuit, as well as one of our sister circuits, has
already held that the disparity in benefits created by § 107 of
title 38, established by the Surplus Appropriation Rescission
Acts, does not require strict scrutiny because it is based on
status as a territory and not on the basis of race, nationality,
or alienage and is constitutional under rational basis review.
See Besinga v. United States, 14 F.3d 1356, 1360–62 (9th Cir.
1994) (holding that the “broad powers of Congress under the
Territory Clause are inconsistent with the application of
heightened judicial scrutiny” and finding several potential
rational bases, including conserving finances, to support the
law); see also Quiban v. Veterans Admin., 928 F.2d 1154,
1160–62 (D.C. Cir. 1991) (rejecting an argument that strict
scrutiny should apply because Filipino veterans are an insular
minority and finding that limiting tax-funded social-welfare
programs to United States veterans is a rational basis for the
law).
Because of this precedent adverse to their equalprotection claims, Plaintiffs must show that the statute
establishing the FVEC creates a new and distinguishable
classification. Plaintiffs contend that two provisions of the
American Recovery and Reinvestment Act—the “Release”
provision and the “Recognition of Service” provision—do
just that. See Pub. L. No. 111-5, §§ 1002(h)(1), (i), 123 Stat.
at 201–02 (2009).

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We first address the “Release” provision. It reads:
(h) RELEASE.—
(1) IN GENERAL .—Except as provided in
paragraph (2), the acceptance by an eligible
person or surviving spouse, as applicable, of
a payment under this section shall be final,
and shall constitute a complete release of any
claim against the United States by reason of
any [qualifying] service . . . .
(2) PAYMENT OF PRIOR ELIGIBILITY
STATUS.—Nothing in this section shall
prohibit a person from receiving any benefit
(including health care, survivor, or burial
benefits) which the person would have been
eligible to receive based on laws in effect as
of the day before the date of the enactment of
this Act.
Id. at § 1002(h)(1). The statutory language preserves the
benefits granted to veterans under 38 U.S.C. § 107. This
provision does not forfeit any benefits that Filipino veterans
currently receive under the status quo and creates no new
classification to be challenged.
Plaintiffs next argue that the “Recognition of Service”
provision within the American Recovery and Reinvestment
Act of 2009 creates a new classification by altering § 107.
That provision reads:
(i) RECOGNITION OF SERVICE .—The
[qualifying] service of a person . . . is hereby

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recognized as active military service in the
Armed Forces for purpose of, and to the
extent provided in, this section.

Pub. L. No. 111-5, § 1002(i), 123 Stat. at 202 (2009). But the
provision’s plain language limits the recognition of service to
§ 1002 and administration of the FVEC. See In re Meruelo
Maddux Props., Inc., 667 F.3d 1072, 1076 (9th Cir. 2012)
(“Where the statute’s language is plain, the sole function of
the courts is to enforce it according to its terms, for courts
must presume that a legislature says in a statute what it means
and means in a statute what it says there.” (quoting Int’l Ass’n
of Machinists & Aerospace Workers v. BF Goodrich
Aerospace Aerostructures Grp., 387 F.3d 1046, 1051 (9th
Cir. 2004) (citations and internal quotation marks omitted))).
Nothing in the American Recovery and Reinvestment Act
suggests that the “Recognition of Service” provision alters
38 U.S.C. § 107 and the limitations imposed by that statute.
Indeed, other provisions of § 1002 of the American
Recovery and Reinvestment Act acknowledge and preserve
the limitations in 38 U.S.C. § 107. See Pub. L. No. 111-5,
§§ 1002(a)(5), (h)(2), (j)(2), 123 Stat. at 200–02 (2009). We
consider the statute as a whole and hold that the “Recognition
of Service” provision does not affect our previous decisions.
See Exxon Mobile Corp. v. E.P.A., 217 F.3d 1246, 1249 (9th
Cir. 2000) (“In interpreting the intent of Congress, it is
essential to consider the statute as a whole.” (citations
omitted)). Because Plaintiffs’ complaint did not challenge a
new classification established by the Act and did not allege
any plausible facts suggesting that the classification in
38 U.S.C. § 107 was created for a discriminatory purpose, we
hold that the district court did not err when it dismissed this
claim under Federal Rule of Civil Procedure 12(b)(6).

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IV
For the foregoing reasons, all of Plaintiffs’ claims were
properly dismissed by the district court on the pleadings.
AFFIRMED.