United States Court Of Appeals
for the Federal Circuit
__________________________
WILLIAM H. WANLESS,
Claimant-Appellant,
v.
ERIC K. SHINSEKI, SECRETARY OF VETERANS
AFFAIRS,
Respondent-Appellee.
__________________________
2010-7007
__________________________
Appeal from the United States Court of Appeals for
Veterans Claims in 07-1501, Judge Robert N. Davis.
___________________________
Decided: September 10, 2010
___________________________
ROBERT K. KRY, MoloLamken LLP, of Washington,
DC, argued for claimant-appellant.
JAMES SWEET, Trial Attorney, Commercial Litigation
Branch, Civil Division, United States Department of
Justice, of Washington, DC, argued for respondent-
appellee. With him on the brief were TONY WEST, Assis-
tant Attorney General, JEANNE E. DAVIDSON, Director,
and MARTIN HOCKEY, Assistant Director. Of counsel on
the brief were MICHAEL J. TIMINSKI, Deputy Assistant
General Counsel, and MARTIN J. SENDEK, Staff Attorney,
WANLESS v. DVA 2
Office of the General Counsel, United States Department
of Veterans Affairs, of Washington, DC.
__________________________
Before LOURIE, BRYSON, and GAJARSA, Circuit Judges.
GAJARSA, Circuit Judge.
The issue before this court is one of statutory con-
struction, 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 Fed-
eral, State, or local penal institution.” William H.
Wanless is an incarcerated veteran whose disability
benefits were reduced pursuant to § 5313. Upon transfer-
ring 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 subse-
quently appealed to this court. Because the Veterans
Court properly construed § 5313 to include penal institu-
tions that are privately operated, yet state-contracted, we
affirm.
BACKGROUND
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 com-
pensation for his service-connected injuries. Id. at 145.
3 WANLESS v. DVA
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 with-
out parole. Id. at 144. Upon receipt of the final sentenc-
ing 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 dis-
ability 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 Amer-
ica, under contract with the Oklahoma Department of
Corrections. 1 Shortly after his transfer, Mr. Wanless
sought reinstatement of his benefits contending that he
was “no longer in a facility which falls under the parame-
ters of § 5313.”
The VA denied Mr. Wanless’s claim. It reasoned that
“[t]he fact that [he was] incarcerated in the Davis Correc-
tional 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 ap-
pealed 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 Okla-
homa 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
1 The parties disagree about the exact date of Mr.
Wanless’s transfer from the State-operated prison to
Davis. The record indicates that Mr. Wanless was trans-
ferred sometime in early 1998.
WANLESS v. DVA 4
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 prohib-
its 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 Vet-
erans 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 quali-
fied 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 corpora-
tion, 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 incar-
ceration 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 disabil-
ity benefit compensation pursuant to § 5313 because he
was “incarcerated in a State penal institution for VA
5 WANLESS v. DVA
purposes under the felony conviction sentence imposed in
January 1993.” Mr. Wanless appealed again to the Vet-
erans 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 exam-
ined 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 Con-
gress was concerned about limiting [§] 5313 so as to not
affect veterans who are incarcerated in privately run,
State-contracted penal institutions,” id. at 148-49.
Turning to the General Counsel’s opinion, the Veter-
ans 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 Coun-
sel’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 stat-
ute’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 contracted by the state, such as Davis,
fell within the ambit of “State . . . penal institution”
pursuant to § 5313. Mr. Wanless filed a timely appeal to
this court.
DISCUSSION
This court’s jurisdiction to review decisions by the
Veterans Court is limited. We have exclusive jurisdiction
“to review and decide any challenge to the validity of any
WANLESS v. DVA 6
statute or regulation or any interpretation thereof . . . and
to interpret constitutional and statutory provisions, to the
extent presented and necessary to a decision.” 38 U.S.C. §
7292(c) (2006). Absent a constitutional issue, however, we
lack the jurisdiction to “review (A) a challenge to a factual
determination, or (B) a challenge to a law or regulation as
applied to the facts of a particular case.” Id. § 7292(d)(2).
On appeal, Mr. Wanless argues that the Veterans
Court improperly construed the prior version of § 5313 to
include privately operated prisons contracted by the state.
His argument is a legal challenge to the Veterans Court’s
interpretation of § 5313. We review such a legal chal-
lenge de novo. Id. § 7292(d)(2); see also Glover v. West,
185 F.3d 1328, 1331 (Fed. Cir. 1999).
Until it was amended effective December 22, 2006,
§ 5313 stated:
(a)(1) To the extent provided in subsection
(d) of this subsection, any person who is
entitled to compensation or to dependency
and indemnity compensation and who is
incarcerated in a Federal, State, or local
penal institution for a period in excess of
sixty days for conviction of a felony shall
not be paid such compensation or depend-
ency and indemnity compensation, for the
period beginning on the sixty-first day of
such incarceration and ending on the day
such incarceration ends in an amount that
exceeds [specified amounts].
38 U.S.C. § 5313 (1993) (emphasis and alteration added);
see also 38 C.F.R. § 3.665 (1999) (implementing regula-
tion). A December 2006 amendment changed the statu-
tory language in § 5313(a)(1) to state that benefits will be
reduced for claimants convicted of a felony and incarcer-
7 WANLESS v. DVA
ated in a “Federal, State, local, or other penal institution
or correctional facility.” Veterans Benefits, Health Care,
and Information Technology Act of 2006, Pub. L. 109-461,
§ 1002, 120 Stat. 3403, 3464-65 (2006). The amendment
was entitled “Clarification of Correctional Facilities
Covered by Certain Provisions of Law.” Id. The legisla-
tive history of the amendment states that it was promul-
gated as part of “technical and clarifying amendments to
title 38.” 152 Cong. Rec. H9015 (daily ed. Dec. 8, 2006)
(statement of Rep. Steve Buyer). While the statute was
changed to incorporate “other penal institution[s] or
correctional facilit[ies],” the implementing regulation does
not include this change. See 38 C.F.R. § 3.665 (2009).
Mr. Wanless argues that the Veterans Court commit-
ted legal error when it interpreted the statute to include
privately operated prisons under contract with the State
of Oklahoma. According to Mr. Wanless, veterans incar-
cerated in facilities operated by private contractors are
not subject to § 5313’s mandated reduction in disability
benefits. We disagree.
The Veterans Court first reviewed the language of §
5313 and 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 facili-
ties.” Wanless, 23 Vet. App. at 147. But silence alone
does not create an ambiguity, especially if it can be recon-
ciled with the statutory language. Section 5313 formerly
stated that “any person who is entitled to compensation
and who is incarcerated in a Federal, State, or local penal
institution . . . for conviction of a felony shall not be paid
such compensation.” Mr. Wanless does not dispute that
he was “incarcerated” within the meaning of § 5313.
Rather, Mr. Wanless alleges that he was no longer in a
facility that qualifies as ”a Federal, State, or local penal
institution” because Davis is a privately operated prison.
WANLESS v. DVA 8
The statutory language, however, focuses on a veteran’s
incarceration for a felony conviction in any facility and
does not distinguish between government-operated pris-
ons and privately operated prisons. The statute’s failure
to distinguish between the two types of prisons indicates
that incarceration in a privately owned and operated
prison under contract with the state is tantamount to
incarceration in a state penal institution. See Evans v.
Newton, 382 U.S. 296, 299 (1966) ([W]hen private indi-
viduals or groups are endowed by the State with powers
or functions governmental in nature, they become agen-
cies or instrumentalities of the State . . . . “); see also
Street v. Corr. Corp. of Am., 102 F.3d 810, 814 (6th Cir.
1996) (stating that employees of the Corrections Corpora-
tion of America perform a “traditionally state function” by
operating a prison); Giron v. Corr. Corp. of Am., 14 F.
Supp. 2d 1245, 1249 (D.N.M. 1998) (holding that a Cor-
rections Corporation of America prison guard acted under
color of state law for purposes of § 1983 suit because “[t]he
function of incarcerating people, whether done publicly or
privately, is the exclusive prerogative of the state.”).
There is no rationale for treating veterans incarcerated
for felony convictions in a privately operated, yet state
contracted prison more favorably than veterans incarcer-
ated in state-operated prisons. Because Mr. Wanless was
incarcerated at a prison contracted by the Oklahoma
Department of Corrections, the interpretation of the
statutory language by the Veterans Court is correct.
While we do not find the statute ambiguous, we take
comfort in knowing that the legislative history also sup-
ports our conclusion. When promulgated in 1980, Con-
gress intended for the statute to correct the perceived
problem of “providing hundreds and thousands of tax free
benefits to [veterans incarcerated for the commission of
felonies] when at the same time the taxpayers of this
9 WANLESS v. DVA
country are spending additional thousands of dollars to
maintain these same individuals in penal institutions.”
126 Cong. Rec. 26,118 (1980) (statement of Rep. G.V.
Montgomery) (alteration added). During debate on the
bill, Congressman Chalmers Wylie likewise focused on the
economic consequences of providing federally funded
disability benefits to “a prisoner . . . [already] being fully
supported by tax dollars that fund the penal institution.”
126 Cong. Rec. 26,122 (1980) (alteration added). Based
upon this legislative history, the Veterans Court con-
cluded that “Congress’s main stated objective is the
avoidance of duplicative Government expenditures that
would result in a windfall for those convicted of felonies.”
Wanless, 23 Vet. App. at 149. Legislative history is “often
murky, ambiguous, and contradictory,” Exxon Mobil Corp.
v. Allapattah Services, Inc., 545 U.S. 546, 568 (2005), but
here it clearly points to an appropriate legislative ration-
ale for reducing the disability benefits of incarcerated
veterans. Thus, the legislative history of § 5313 supports
the Veterans Court’s decision.
The December 2006 clarifying amendment to § 5313
further supports the Veterans Court’s decision. The
amendment, published as a “Clarification of Correctional
Facilities Covered by Certain Provisions of Law,” broad-
ens the statute to include “Federal, State, local, or other
penal institution or correctional facility.” 38 U.S.C. § 5313
(emphasis added). But, as the Veterans Court duly noted,
the amendment was not substantive but rather “technical
and clarifying.” See 152 Cong. Rec. H9015 (daily ed. Dec.
8, 2006) (statement of Rep. Steve Buyer). The amend-
ment made explicit what was already implicit in the
statute’s language and the legislative history—a desire to
avoid duplicative government expenditures. See 126
Cong. Rec. 26,122 (1980) (statement of Congressman
Chalmers Wylie) (“In the case of imprisonment, when a
WANLESS v. DVA 10
prisoner is being fully supported by tax dollars that fund
the penal institution, it becomes ludicrous to continue
payment of benefits designed to help him maintain a
standard of living.”). Because the amendment did not
effectuate a substantive change in the law, but rather
clarified the original intent of Congress, it supports the
conclusion that the prior version of the statute applies to
privately operated penal institutions contracted by the
state.
Finally, the Veterans Court also gave proper weight to
the VA General Counsel’s opinion. Lacking the formali-
ties of notice-and-comment rulemaking, the General
Counsel’s opinion is entitled to deference only in so far as
it has “the power to persuade.” Skidmore, 323 U.S. at
140. The Veterans Court correctly found the General
Counsel’s opinion persuasive. The General Counsel’s
opinion provided three persuasive reasons for including
veterans such as Mr. Wanless within the scope of § 5313:
(1) A private prison's authority to confine a vet-
eran derives from his State felony conviction and
the authority to imprison citizens ultimately rests
with the government only; (2) interpreting section
5313 to apply to private prisons under State con-
tract would promote the statute's stated legisla-
tive purpose of avoiding the duplication of
governmental expenditures for veterans who are
already supported by the government and suffer
no lost earnings as a result of their disability; and
(3) creating a distinction between veterans in
State-operated and State-contracted privately op-
erated prisons would create an unreasonable or
irrational result because it would both thwart the
intentions of Congress and allow felons who
chance to be incarcerated in private facilities at
government expense [to] continue to be entitled to
11 WANLESS v. DVA
the full amount of their VA benefits while felons
incarcerated in State-owned-and-operated facili-
ties would not.
Wanless, 23 Vet. App. at 151. We agree with the Veterans
Court that these reasons are persuasive and consistent
with the language and legislative history of § 5313.
Accordingly, the Veterans Court was correct in relying on
the General Counsel’s “very persuasive” opinion. Id.
Accordingly, we hold that the Veterans Court properly
construed § 5313 to mandate the reduction in disability
benefits of veterans incarcerated in privately operated,
yet state-contracted prisons.
CONCLUSION
For the foregoing reasons, we affirm the judgment of
the Veterans Court.
AFFIRMED
COSTS
No costs.