SUPREME COURT RULES CRSC IS NOT LIMITED TO SIX-YEARS OF RETRO PAY

Today, the Supreme Court issued a unanimous opinion holding that Combat-Related Special Compensation (CRSC) settlements are not subject to the six-year limit for retroactive payments contained in the Barring Act. 

In plain English, what does this mean? What happened?

BACKGROUND

The standard rule is that military pay, including retirement pay, is offset by amounts received from the Veterans Affairs (VA) for disability compensation payments. Essentially, you can't "double dip" from military pay and VA disability compensation. However, for retirees (disability or length of service) there are two exceptions- Concurrent Retired and Disability Pay (CRDP) and CRSC. CRDP allows for the restoration of payments for those receiving VA compensation who are also eligible for retirement under length-of-service rules or, for disability retirees, if the retiree would also be eligible for retirement under other than their disability. For CRSC, the restoration is made for those disabilities that the VA has rated and that the military has determined are "Combat-Related." 

In this case, the issue was that the DoD/DFAS had invoked a Federal law, the Barring Act, that limits retroactive payments to six years. If a veteran applied for CRSC and was awarded it for circumstances that showed they were entitled to the CRSC award 10, 20, or more years ago, DFAS would only pay 6 years of retroactive CRSC. In Mr. Soto's case (he is a Corporal, Ret., USMC), he was retired from the Marine Corps for his PTSD in 2006. He applied for VA compensation in 2009 and was awarded a 100% rating. He then applied for CRSC in 2016 and was approved for his Combat-Related PTSD. However, instead of paying him from the date of his offset of VA compensation, in 2009, DFAS invoked the Barring Act to limit his retroactive payments to 2010. (As an aside, it seems to me that Corporal Soto was also shorted by not applying for VA compensation and CRSC years earlier. It is a common failure I see that servicemembers and veterans don't apply for what they are actually due until years later, or if at all.) 

PROCEDURAL HISTORY

After being shortchanged by DFAS, Mr. Soto filed a class-action lawsuit in the US District Court for the Southern District of Texas on March 2, 2017. The District Court judge certified the case as a class action on February 11, 2019. Notably, the class only concerned those with claims of less than $10,000. (This is almost certainly because the US District Courts only have jurisdiction over money claims of less than that amount under the "Little Tucker Act. For claims in excess of $10,000, the proper court is the US Court of Federal Claims (under the Tucker Act). 
At the trial court level, Mr. Soto won. On July 8, 2022, the United States then appealed the judgment in favor of Mr. Soto to the United States Court of Appeals for the Federal Circuit. In that court, the United States prevailed with a decision finding that the Barring Act did apply and that recovery was limited, under the Barring Act, to six years prior to the decision awarding Mr. Soto retroactive CRSC. 

SUPREME COURT'S UNANIMOUS DECISION

Justice Thomas authored the Court's decision, essentially adopting the rationale stated by the trial court judge. Long story short, the Barring Act does not limit the backpay for CRSC to six years. The Court reversed the decision of the US Court of Appeals for the Federal Circuit and remanded the case. 

WHAT COMES NEXT?

Here's the rub...I am confident that Mr. Soto will get his full due. But, what happens to the class members and the cases at the CRSC level going forward? Sorry, I don't know. But, I have some educated guesses. 

But first, here are some comments on why the Supreme Court remanded the case. This is what almost always happens when a higher court reverses a lower court. You did not see the Supreme Court saying, "DFAS, you got it wrong, so pay Mr. Soto x number of dollars." Why? Because it doesn't make sense for the higher court, in this case, the Supreme Court, to fight our any additional issues. They simply send it down to the lower court to determine what is next. My guess is that the US Court of Appeals for the Federal Circuit does the same and remands the case to the original trial court. Now, here is what gets interesting. 

Assuming I am right, the trial court judge likely says, "Okay, what do the parties want to do?" It is possible that the parties will come to an agreement and settle the case. If not, further motions may occur, but I think the outcome will be the same. Mr. Soto gets paid his full amount, as do the roughly 3500 folks that were estimated to be part of the settlement. Easy-peasy. 

But, what about going forward? I think that DFAS starts processing cases correctly (for everyone). But, this leaves a question about what happens for those folks not in the "less than $10,000" class that was certified in the Soto case. I think those individuals may have to file additional claims, likely in the US Court of Federal Claims. We will have to see. 

All that said, I think this was the right result and a big win for retired Vets with Combat-Related conditions. 

Here is a copy of the Supreme Court decision: