The U.S. Supreme Court is expected to hear arguments starting Monday, April 28, 2025, in a case involving a medically retired Marine Corps veteran who did not receive his full combat-related compensation after his military service. (Eric Kayne/Stars and Stripes)

WASHINGTON — The U.S. Supreme Court is expected to hear arguments starting Monday involving a medically retired Marine Corps veteran who did not receive his full combat-related special compensation after his military service that included two tours in Iraq.

Simon Soto, a retired corporal, is claiming the federal government incorrectly imposed a time limit for filing a compensation claim to receive full benefits.

The outcome of the class-action suit against the U.S. government will likely determine the amount of combat-related special compensation that thousands of other medically retired combat veterans receive from the government, according to court documents.

Attorneys for Soto argue the federal government misapplied a six-year statute of limitations for awarding full combat-related special compensation though Soto was entitled to higher payments. The tax-free monthly payments are for eligible retired veterans with combat-related injuries.

“Whether thousands of combat veterans now and into the future lose all or part of the special compensation they earned through service to and sacrifice for our nation is an exceptionally important question that merits this court’s review,” attorneys for Soto said in court documents.

The National Veterans Legal Services Program, a nonprofit organization, filed a class-action lawsuit on behalf of Soto.

Soto joined the Marine Corps in 2000 and had two deployments to Iraq. His job was in mortuary affairs and involved searching for, identifying and recovering the remains of war casualties, according to court documents.

But Soto began receiving medical treatment for nightmares, depression and suicidal thoughts related to his work documenting the deaths of fellow soldiers. He was medically retired in 2006.

In 2009, Soto received a disability rating from the Department of Veterans Affairs based on his medical diagnosis of post-traumatic stress disorder, a mental-health condition that results from witnessing terrifying events. But he did not apply for combat-related special compensation until 2016, according to court documents.

Combat-related special compensation is a benefit for military retirees who receive VA compensation for disabilities related to combat or hazardous duty, according to the Defense Department. The compensation restores a portion of retirement pay reduced due to VA disability payments.

The Defense Finance and Accounting Service is responsible for awarding and paying combat-related special compensation. The agency processes claims submitted by the retiree’s service branch.

But the Navy used a six-year limitation to calculate Soto’s retroactive payments, giving him payments dating back to 2010 instead of to 2008, when Congress extended the combat compensation to retirees who served less than 20 years, according to court documents.

Retirees are allowed to receive their military retirement pay and VA disability compensation, as long as the disability is combat-related, according to the Defense Department.

The 2008 National Defense Authorization Act, annual legislation that sets expenditures and policies for the Defense Department, expanded eligibility for combat-related special compensation to include medical retirees with less than 20 years of service, according to the Military Officers Association of America.

But the federal government uses a provision called the Barring Act requiring veterans to file a compensation claim within six years of a VA disability rating decision, according to court documents. After the six-year limit expires, veterans only qualify for up to six years’ worth of payments that are due to them. That limitation was applied to Soto’s case.

When Soto was medically retired, he was placed on the “temporary disability retirement list,” entitling him to retirement pay, according to court documents. He subsequently was awarded permanent retirement pay by the Navy secretary.

Soto applied for and was awarded combat-related special compensation in 2016, based on his diagnosis of PTSD, according to court documents. But he had exceeded the six-year limitation to receive his full compensation.

The Navy “assigned an effective date of July 2010 notwithstanding the fact he met all of the enrollment criteria for Jan. 1, 2008, the effective date of the law that extends the combat-related special compensation entitled to medical retirees such as Mr. Soto,” attorneys said.

As a result, the Navy awarded Soto six years of retroactive payments — from July 2010 to June 2016 — though he was entitled to 8 1/2 years of payments from January 2008 to June 2016, his attorneys said.

The government has used this six-year statute of limitations policy to pay no more than six years of retroactive combat-related special compensation to thousands of other military combat veterans, attorneys said.

Soto filed a class action lawsuit in U.S. District Court for the Southern District of Texas in March 2017.

The other plaintiffs were former service members of the Army, Navy, Marine Corps, Air Force and Coast Guard whose compensation amounts also were limited by application of the six-year statute of limitations, according to court documents. The government identified 9,108 former service members in 2021 whose compensation amount had been reduced because of the six-year statute of limitations. The number of affected veterans has likely increased since that information was collected.

In 2021, a district court ruled in favor of Soto and members of the suit. The court found the government was liable to pay the veterans their full compensation, according to court documents.

But when the government challenged the decision to the U.S. Court of Appeals for the Federal Circuit, the higher court reversed the ruling in February 2024.

Soto appealed to the Supreme Court in September 2024.

In a friend-of-the-court brief, Military Veterans Advocacy Inc. and Disabled American Veterans argued, “Congress intended to fully compensate these especially valiant military retirees for their sacrifices.”