the VA's faulty assumption is that members of the plaintiff class, in fact, can and do have wills. See Fraser Aff., Tab 10, para. 12; D'Arco Aff., Tab 8, para. 29; Savory Aff., Tab 3, para. 29; Gimple Aff., Tab 6, para. 10; Greene Aff., Tab 7, para. 7.
Even if testacy prevented inheritances by remote heirs -- which it plainly does not -- there is no factual basis to conclude that mental incompetence at any particular stage of a veteran's lifetime is predictive of whether the person will die testate. The uncontradicted statistical evidence is that 58% of all Americans do not have wills, and that the most important factors in determining testacy are age, wealth, and high occupational status. See Mulder, Intestate Succession under the Uniform Probate Code, 2 Prospectus 301, 307-12 (May 1990). The VA has presented no study or data that suggests that a VA rating of mental incompetence, or mental incompetence in general, has any correlation to intestacy. The VA, in fact, has conceded a total lack of information on the subject. See D'Alcomo Aff., Tab 14K at 348.
Section 3205 also relies on the assumption that incompetent veterans are less likely than competent veterans to have close relatives at the time of death. The record, however, contains nothing about a VA rating of mental incompetence that is predictive of whether a veteran will, at the time of death, have close family members. Whether an incompetent veteran is survived by close family members will likely depend on the same factors that effect whether a competent veteran will be survived by close family members; namely, the health of the veteran's parents, the existence of children or siblings of the veteran, and the age of the veteran at death. The record contains no distinguishing feature of VA-rated incompetent disabled veterans that would make such veterans less likely than competent disabled veterans to be survived by close relatives such as non-dependent parents, siblings or adult children.
Furthermore, the VA's own studies show that, in fact, incompetent veterans' estates overwhelmingly tend not to be inherited by remote heirs. See D'Alcomo Aff., Tab 14L at 353-54, Tab 14K at 347-48. VA statistics show that at least 84.7 percent of surveyed estates of mentally incompetent disabled veterans were inherited by close family relatives including spouses, parents, siblings, and the veterans' children.
The structure of intestacy schemes under the laws of the several States also tends to undermine the assumption that remote heirs are more likely to inherit incompetent disabled veterans' estates. Intestate succession laws govern the transfer of estates when an individual dies without a valid will, regardless of whether the individual is competent or incompetent.
There is thus nothing about an intestate veteran's competency which may determine whether the veteran's estate will be inherited by a remote heir.
d. Fiduciary midconduct
The VA's argument that Congress enacted Section 3205 as a response to concern about fiduciary misconduct is unsupported by the record. The VA may not, consistent with the trend of recent caselaw, invent objectives that Congress never stated an intention to achieve. The Court is required to assume that "the objectives articulated by [Congress] are the actual purpose of [Congress], unless an examination of the circumstances forces us to conclude that they 'could not have been a goal of [that policy].'" Hancock Industries v. Schaeffer, 811 F.2d 225, 239 (3d Cir. 1987) (citations omitted). Cases such as Hancock thus instruct that the court "be sure that the rationale advanced is not simply an after-thought supplied purely by hindsight." Alma Soc. v. Mellon, 601 F.2d 1225, 1235 (2d Cir.), cert. denied, 444 U.S. 995, 62 L. Ed. 2d 426, 100 S. Ct. 531 (1979).
Since the record contains no reference to any committee report on Section 3205 referring to a purpose of preventing misuse of veterans' funds by fiduciaries, nor any other evidence of such a purpose, the Court will not consider prevention of fiduciary misconduct an articulated goal of Section 3205.
Even were the Court to consider prevention of fiduciary misconduct an unarticulated but theoretically possible rationale for the classifications drawn by Section 3205, such a rationale does not appear to be rationally related to the classifications drawn by Section 3205. There is at best anecdotal evidence of a statistically negligible number of investigations of fiduciary misconduct which, does not, in the Court's view, provide a rational basis for the classification drawn by Section 3205. The VA has failed to produce any evidence or refer to anything in the legislative history to suggest that fiduciaries for incompetent veterans "have a greater propensity than others for misusing or misappropriating funds," Bacon v. Toia, 648 F.2d 801, 809 (2d Cir. 1981), aff'd, 457 U.S. 132, 102 S. Ct. 2355, 72 L. Ed. 2d 728 (1982), and there is no basis for the Court to presume such a propensity. Id.; see Jimenez v. Weinberger, 417 U.S. 628, 637, 41 L. Ed. 2d 363, 94 S. Ct. 2496 (1974).
e. Discriminatory Effect
Because the articulated objectives of Section 3205 bear no substantial relation to the classification drawn to attain those objectives, the Court concludes that Section 3205's virtually exclusive, if unintended, result is impermissible discrimination against mentally incompetent disabled veterans.
Section 3205's "90-day restoration" provision, which tends to indicate that mental incompetence is an important -- if not the sole -- target of the legislation, as well as Congress' interference with the testamentary freedom of incompetent, but not competent, veterans is substantial evidence of irrational discrimination against the mentally disabled.
A statute that diminishes the testamentary freedom of mentally incompetent veterans with no dependents, while preserving the testamentary freedom of similarly situated competent veterans, produces incongruous and inconsistent results, primarily because the bases for drawing such a distinction, embodied in Section 3205, are unsupportable and irrational assumptions about mentally incompetent veterans.
As such, the statute violates equal protection. See Cleburne, 473 U.S. at 450; Bacon v. Toia, 648 F.2d at 809.
For the reasons set forth above, plaintiffs' motion, pursuant to Federal Rule of Civil Procedure 65, for an order preliminarily enjoining the defendant United States Department of Veterans Affairs from applying or enforcing Section 8001 of the Omnibus Budget Reconciliation Act of 1990, codified at 38 U.S.C. § 3205, is granted. Defendant's cross-motion, pursuant to Rules 12(b)(1) and (6), for an order dismissing the complaint for lack of subject matter jurisdiction and failure to state a claim upon which relief may be granted, or, alternatively, pursuant to Rule 12(c), for an order granting it judgment on the pleadings, is denied.
SHIRLEY WOHL KRAM
UNITED STATES DISTRICT JUDGE
Dated: New York, New York
January 31, 1992