## Facts

- McDowell, a Navy veteran, received VA disability compensation.
- VA stopped paying his compensation under an Omnibus Budget Reconciliation Act of 1990 (OBRA) provision affecting certain incarcerated veterans.
- McDowell sought resumption of compensation before the Board of Veterans’ Appeals (BVA); the BVA upheld the termination.
- Separately, McDowell was an absent member of a federal class action in New York challenging the same OBRA provision’s constitutionality.
- The class action court issued a preliminary injunction against enforcement; the Second Circuit vacated the injunction after concluding the provision was likely constitutional.
- The class action then ended with a court-approved settlement and a dismissal with prejudice.
- McDowell appealed the adverse BVA decision to the Court of Veterans Appeals; while that appeal was pending, the Secretary moved to dismiss based on res judicata arising from the class action judgment.

## Issues

1. Whether McDowell’s appeal was barred by res judicata because a prior federal class action—binding McDowell as a class member—settled and was dismissed with prejudice after challenging the same OBRA provision.
2. Whether McDowell could avoid preclusion by showing the class action failed due process requirements for absent members, including fair and adequate representation (including asserted deficiencies in notice/opt-out and the choice not to seek certiorari).

## Decision

- The court granted the Secretary’s motion to dismiss.
- The court held that the prior federal class action settlement and dismissal with prejudice constituted a final judgment that barred McDowell from relitigating the same constitutional challenge to the OBRA provision.
- The court rejected McDowell’s attempt to defeat preclusion based on asserted inadequacy of class representation.
- The dismissal left the BVA decision upholding termination of compensation in place.

## Legal Principles

- A final judgment on the merits bars later litigation of the same claim by the same parties or those in privity; a dismissal with prejudice following a court-approved settlement is treated as a final judgment for claim-preclusion purposes.
- Absent class members are bound by a class judgment if the class proceeding satisfied due process, including fair and adequate representation.
- A collateral attack on a class judgment requires a due process defect; disagreements with litigation strategy, including a decision not to seek Supreme Court review, generally do not establish inadequate representation.
- Claim preclusion can bar a constitutional challenge raised in an individual VA benefits appeal when that challenge was resolved against the claimant in prior class litigation to which the claimant was bound.

## Conclusion

The court dismissed McDowell’s VA benefits appeal because a prior class action settlement and dismissal with prejudice conclusively resolved—and therefore precluded—his constitutional challenge to the OBRA provision that authorized termination of his disability compensation.


McDowell v. Brown, 5 Vet. App. 401 (1993)