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Wanless v. Shinseki

September 10, 2010


Appeal from the United States Court of Appeals for Veterans Claims in 07-1501, Judge Robert N. Davis.

The opinion of the court was delivered by: Gajarsa, Circuit Judge.

Before LOURIE, BRYSON, and GAJARSA, Circuit Judges.

The issue before this court is one of statutory construction, specifically the construction of 38 U.S.C. § 5313 (1993). This statute reduces the benefits of veterans who are convicted of felonies and are "incarcerated in a Federal, State, or local penal institution." William H. Wanless is an incarcerated veteran whose disability benefits were reduced pursuant to § 5313. Upon transferring from a state-operated prison to Davis Correctional Facility ("Davis"), a privately owned prison operated by the Corrections Corporation of America, Mr. Wanless requested full reinstatement of his disability benefits. His request was denied by the Board of Veterans' Appeals (the "Board") and the Veterans Court. See Wanless v. Shinseki, 23 Vet. App. 143 (2009). Mr. Wanless subsequently appealed to this court. Because the Veterans Court properly construed § 5313 to include penal institutions that are privately operated, yet state-contracted, we affirm.


Mr. Wanless served on active duty in the United States Army from September 1979 to November 1981. Id. at 144. During his service, he suffered service-connected injuries, including enucleation of the right eye, chronic lumbar strain with degenerative disc disease, tinnitus, high-frequency hearing loss, and residuals of a cervical strain.Id. The Department of Veterans Affairs ("VA") granted Mr. Wanless $808 per month as disability compensation for his service-connected injuries. Id. at 145.

On January 15, 1993, the Payne County District Court in Oklahoma convicted Mr. Wanless of first degree murder for the death of his wife. For this felony, he was sentenced to incarceration in a penitentiary for life without parole. Id. at 144.Upon receipt of the final sentencing order, the Veterans Administration ("VA") informed Mr. Wanless that, pursuant to § 5313(a)(1), his disability rating was reduced to ten percent and his monthly disability compensation would be reduced from $808 to $85. Id.

In 1998, Mr. Wanless was transferred from a state-operated prison to Davis, a prison owned and operated by the for-profit company, Corrections Corporation of America, under contract with the Oklahoma Department of Corrections.*fn1 Shortly after his transfer, Mr. Wanless sought reinstatement of his benefits contending that he was "no longer in a facility which falls under the parameters of § 5313."

The VA denied Mr. Wanless's claim. It reasoned that "[t]he fact that [he was] incarcerated in the Davis Correctional Facility and that it is administered by Corrections Corporation of America, does not change [the] fact that [he was] imprisoned following [his] conviction of a felony." Mr. Wanless filed a "Notice of Disagreement" and appealed the decision to the Board. The Board concluded that Mr. Wanless was "a prisoner in accord with the life imprisonment sentence that was imposed . . . by an Oklahoma state court judge in accordance with Oklahoma state law." The Board further stated that merely because "the State of Oklahoma has decided to allow for the private management of a penal facility under a contract does not serve to remove the veteran's felony conviction, nor does it alter his status as a prisoner of the State of Oklahoma." According to the Board, "[i]t is this status as a convicted felon in a state prison that absolutely prohibits the payment of full disability compensation." The Board thus affirmed the denial of Mr. Wanless's claim, holding that "[t]he veteran is not entitled to payment of full disability compensation while incarcerated for the commission of a felony."

Mr. Wanless appealed the Board's decision to the Veterans Court. It remanded the case to the Board, finding that the Board had failed to analyze any state laws or contractual provisions that bear on whether Davis qualified as a "State . . . penal institution" within the meaning of § 5313. On remand, the Board cited a VA General Counsel opinion, which stated that:

[c]onstruing [§] 5313(a)(1) as not applying to a convicted felon whom the State, pursuant to a contract between the State and a private corporation, has incarcerated in a privately owned and operated facility rather than a State-owned penal institution would thwart Congress' clear purpose for the reduction in benefit payments.

J.A. 748.After a thorough analysis, the General Counsel had concluded that "a correctional facility owned and operated by a private corporation pursuant to a contract with a State department of corrections responsible within a State for the incarceration of convicted felons is incarceration in a State penal institution within the meaning of section 5313." J.A. 749. The Board concluded once more that Mr. Wanless was rightfully denied full disability benefit compensation pursuant to § 5313 because he was "incarcerated in a State penal institution for VA purposes under the felony conviction sentence imposed in January 1993." Mr. Wanless appealed again to the Veterans Court.

On appeal, the Veterans Court found that "[t]he plain language of section 5313 does not explicitly include or exclude private prisons under State contract from the list of incarceration facilities." Wanless, 23 Vet. App. at 147. Because the statute was silent, the Veterans Court examined its structure and legislative history. The Veterans Court determined that "throughout the statute, the emphasis is on a veteran's 'incarceration,'" id. at 147, and "[n]othing in the legislative history suggests that Congress was concerned about limiting [§] 5313 so as to not affect veterans who are incarcerated in privately run, State-contracted penal institutions," 148-49.

Turning to the General Counsel's opinion, the Veterans Court noted that it was "entitled to respect to the extent it has 'the power to persuade.'" Id. at 150 (quoting Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)). The Veterans Court then determined that the General Counsel's opinion relied upon sound reasoning and was "not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Id. at 151. Given the statute's language, its legislative history, and the General Counsel's opinion, the Veterans Court affirmed the Board's decision and concluded that privately owned and operated prisons ...

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