McDowell v. Brown

McDowell (plaintiff), a Navy veteran, had been awarded disability compensation that was subsequently halted under a provision of the Omnibus Budget Reconciliation Act of 1990 (OBRA). McDowell unsuccessfully sought resumption of his benefits from the Board of Veterans Appeals (BVA). McDowell had also been a member of a class action in New York that resulted in a preliminary injunction precluding the Veterans Administration from enforcing the OBRA provision that would have stopped disability compensation to veterans like McDowell. However, the Second Circuit Court of Appeals vacated the preliminary injunction on the grounds that the OBRA provision was likely constitutional and, therefore, the class was unlikely to prevail on the merits. Thereafter, the parties in the class action entered into a settlement agreement that the district court approved before it dismissed the class action with prejudice. After the Second Circuit decision but before the district court approved the settlement, McDowell appealed the adverse BVA decision. The secretary of Veterans Affairs moved to dismiss the BVA appeal on res judicata grounds. The secretary argued that (1) McDowell was a member of the class of the previous class action that already adjudicated the constitutionality of the OBRA; and (2) McDowell was a party to the settlement in the class action that dismissed with prejudice McDowell’s challenges to the constitutionality of the contested OBRA provision. McDowell argued that he should not be bound by the prior class action because the class representatives failed to provide fair and adequate representation to the class members. McDowell specifically argued that the class representatives failed to give adequate notice and an opportunity to opt out of the class action and that they failed to appeal (seek a writ of certiorari) after the adverse Second Circuit decision.