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January 12, 1998

JOHN E. DONOVAN, Plaintiff,
HERSHEL W. GOBER, Secretary of Veterans Affairs, Defendant.

The opinion of the court was delivered by: HECKMAN


 This matter was referred to the undersigned by the Hon. Richard J. Arcara, to hear and report on dispositive motions in accordance with 28 U.S.C. § 636(b). Plaintiff's claims arise out of a determination by the Secretary of Veterans Affairs *fn1" (the VA) that plaintiff is liable to indemnify the VA based upon the VA's payment on plaintiff's guaranteed housing loan. The government has moved to dismiss this action pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal rules of Civil Procedure. For the following reasons, it is recommended that the government's motion be granted.


 In March of 1979, plaintiff refinanced his townhouse located in Washington, D.C. To do so, he obtained a home mortgage loan in the amount of $ 70,000, guaranteed in part by the VA (Item 8, Ex. C, p. 3).

 In June 1985, the mortgage holder reported to the VA that the mortgage was four months in arrears, and then followed up in August 1985 with a notice of intention to foreclose (Id. at pp. 5-7). Plaintiff requested that a deed in lieu of foreclosure be accepted by the VA. His request was denied as not being in the best interest of the government (Id.). Plaintiff was sent correspondence informing him of the foreclosure sale and his potential liability resulting therefrom (Id.).

 Subsequent to the sale, and after all applicable adjustments, the VA issued plaintiff a notice of indebtedness in the amount of $ 6,849.56 from the foreclosure deficiency (Id. at 8). According to plaintiff, he was not notified of either the denial of his request for a deed in lieu of foreclosure or the subsequent debt (Item 13, pp. 2-3). The government asserts that the VA Debt Management Center (VADMC) wrote to plaintiff regarding his debt, but that its efforts were hampered by the fact that plaintiff had relocated in November 1985 without providing the VA with a forwarding address (Item 8, Ex. C, p. 8).

 On November 27, 1991, the VA sent a notice to plaintiff's employer, the Federal Aviation Administration, requesting an offset of his federal salary (Id.). An offset of $ 204.61 was deducted from plaintiff's salary every two weeks from December 27, 1991 through December 30, 1992 (Id. at p. 9). At that time, the offset was suspended pending the outcome of plaintiff's appeal from a decision of the VA Regional Office in Buffalo, New York, to the Board of Veterans' Appeals (BVA), which was commenced in February 1992 (Id. at pp. 1, 2, 9). The issues raised on appeal involved the VA's decision to deny acceptance of a deed in lieu of foreclosure, the validity of the loan guaranty indebtedness, the procedures employed in initiating debt collection, alleged withholding of records, alleged violations of plaintiff's privacy rights, and entitlement to monetary damages. In December 1993, the VA refunded to plaintiff the full amount of the salary offset collected, pending resolution of his appeal (Id., Ex. D, P 5).

 The BVA issued its decision on May 12, 1995, finding that: (1) it did not have jurisdiction over plaintiff's due process claims with respect to the salary offset, as well as his claims regarding the alleged withholding of documents, the alleged violation of his privacy rights, and entitlement to monetary damages, (2) the VA's decision whether to accept a deed in lieu of foreclosure was not subject to review, (3) the home loan guarantee indebtedness charges were validly established, and (4) the amount of the debt was properly computed (Id., Ex. C, pp. 9-13). On May 26, 1995, plaintiff appealed this decision to the United States Court of Veterans Appeals (CVA) where the matter is still pending (Id., Ex. C).

 Plaintiff commenced the present action on January 13, 1997. His complaint is based on the same facts and circumstances which are the subject of his pending appeal before the CVA. Plaintiff now advances substantially the same claims he presented to the BVA regarding alleged due process violations, Freedom of Information Act violations and Privacy Act violations, and adds claims for damage to his reputation and emotional distress (Item 1).

 On July 21, 1997, the government moved to dismiss on the grounds that: (1) this court lacks subject matter jurisdiction, (2) plaintiff fails to state a claim upon which relief can be granted, and (3) plaintiff failed to commence this action within the applicable statute of limitations periods.



 The government characterizes plaintiff's claim as a challenge to a benefit determination, and argues that Section 511 of Title 38 precludes review of such claims in federal district court. In response, plaintiff asserts that the present action is based on the violation of his constitutional rights, that the BVA lacks jurisdiction over constitutional claims, and that this court is his only avenue of relief.

 I agree with the government's conclusion that this court lacks jurisdiction, but not for the reasons set forth in the Secretary's memorandum. The government's argument is summarized as follows.

 Historically, section 511 of Title 38 of the United States Code *fn2" has precluded judicial review of veteran's benefits determinations. Thus, the Secretary's decision as to any question of law and fact necessary to such a decision was final. In 1988, however, Congress passed the Veterans' Judicial Review Act, which established the Court of Veterans Appeals. Veterans' Judicial Review Act--Veterans' Benefits Improvement Act of 1988, Pub. L. No. 100-697, § 402, 102 Stat. 4105, 4122. This Article I court is vested with exclusive jurisdiction to review decisions of the Board of Veterans' Appeals, and is therefore the only avenue of judicial review available to plaintiff. 38 U.S.C. § 7252.

 The government does recognize that federal district courts have jurisdiction to consider challenges to the constitutionality of the statutes underlying the veterans programs. Johnson v. Robison, 415 U.S. 361, 39 L. Ed. 2d 389, 94 S. Ct. 1160 (1974); Sugrue v. Derwinski, 26 F.3d 8, 11 (2d Cir. 1994), cert. denied, 515 U.S. 1102 (1995). It argues, however, that because plaintiff's claim does not challenge the constitutionality of any statute, but rather the VA's actions in handling his particular claim, jurisdiction is lacking.

 The flaw in this argument is apparent upon a plain reading § 511, for the government has failed to take into account the nature of plaintiff's claims Section 511 of Title 38 of the United States Code provides as follows:

(a) The Secretary shall decide all questions of law and fact necessary to a decision by the Secretary under a law that affects the provision of benefits by the Secretary to veterans or the dependents or survivors of veterans. Subject to subsection (b), the decision of the Secretary as to any such question shall be final and conclusive and may not be reviewed by any other official or by any court, whether by an action in the nature of mandamus or otherwise.
(b) The second sentence of subsection (a) does not apply to--
(1) matters subject to section 502 of this title;
(2) matters covered by sections 1975 and 1984 of this title;
(3) matters arising under chapter 37 of this title; and
(4) matters covered by chapter 72 of this title.

 38 U.S.C. § 511 (1991). Thus, while § 511(a) sets forth the general rule that the Secretary's decisions under laws affecting veterans' benefits are not reviewable, several exceptions are specified in subsection (b). The first exception, section 502, relates to judicial review of rules and regulations to which reference is made by 5 U.S.C. § 552(a)(1) or 553. Sections 1975 and 1984 relate to civil actions regarding life insurance. *fn3" Chapter 37 relates to housing and small business loans. Chapter 72 relates to the Court of Veterans Appeals' exclusive jurisdiction to to review decisions of the BVA.

 The government does not dispute that this claim arises under the home loan program. It is clear on the face of the statute, then, that plaintiff's claims are excepted from the ban on judicial review contained in Section 511(a). Indeed, Chapter 37 itself provides that:

(a) Notwithstanding the provisions of any other law, with respect to matters arising by reason of this chapter, the Secretary may --
(1) sue and be sued in the Secretary's official capacity in any court of competent jurisdiction, State or Federal . . . .

 38 U.S.C. § 3720 (1991).

 It is equally clear, however, that because plaintiff has already received a determination from the BVA, this action is a matter "covered by chapter 72 of this title" and falls within the fourth exception as well. 38 U.S.C. §§ ...

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