Stern: Reversal as the Appropriate Remedy for a Defective Reduction

Stern v. McDonough, Opinion Number 18-4425, was decided April 20, 2021 and involves a bad reduction decision and whether the appropriate remedy is reversal or remand.

The veteran was rated for his left and right arms for neuropathy at 30% and 20% in 2007.  The ratings were continued in 2008.  However, based on a 2010 examination, the VA proposed reducing his ratings to 10% each because the examiner determined they were mild in nature.  The veteran submitted a written statement denying improvement and asking for another examination, which occurred in 2011.  Id. at *3.

The 2011 examiner noted almost constant numbness and tingling, but noted a nerve conduction study was negative, but “he possibly has a small fiber neuropathy, which cannot be determined by nerve conduction studies.”  Id. at *3.  This led to a 2011 rating decision which reduced his neuropathy ratings to 10% each.  The Board upheld the reductions in April 2018.

The Court summarized the veteran’s argument as:

The appellant argues that the Board applied an incorrect legal standard for determining whether the reductions in his polyneuropathy ratings were proper, because it "only applied one element of the two-element test [prescribed in Brown] to determine whether a rating reduction is 5 proper." Appellant's Brief (Br.) at 4. Specifically, he acknowledges that the Board considered whether there was actual improvement in his condition based on VA examination testing. Id. at 5. However, he asserts that the Board failed to consider the effects of his disabilities on the ordinary conditions of his life and work, particularly given his statements that his ability to work as a contractor had not improved; he cannot do carpenter work; and he has difficulty dressing himself, grasping hand tools, and maintaining grip. Id. at 5-6 (citing R. at 391, 448-49). He contends that, because the Board erred by failing to address the second element (i.e., whether there is an improved ability to function under the ordinary conditions of life and work), the Board's error amounts to a failure to observe the applicable law rendering the Board decision void ab initio and requiring reversal and reinstatement of the disability ratings.

Id. at *4.-5.

The Secretary conceded a reasons and bases error, but argued the appropriate remedy was remand as opposed to reversal.  The Secretary further argued

reversal is appropriate in circumstances where VA failed to abide by the procedural protections for rating reductions or the Board improperly shifted the burden of proof by requiring the claimant to prove entitlement to the previously assigned higher ratings. Id. at 10-13. However, he avers that reversal is not warranted here, where the appellant raises only a reasons or bases error.

Id. at *5.

In his reply brief, the veteran argued

The Board applied an incorrect legal standard because it did not determine whether there was improvement in his ability to function under the ordinary conditions of life and work. Reply Br. at 1. He further argues that reversal is warranted because the Board implicitly shifted the burden of proof by failing to make that determination.

Id. at *5.

The Court summarized the law on reductions and then addressed reversal as opposed to remand and stated:

the Court has held that reversal and reinstatement is the appropriate remedy where VA has not provided the procedural protections afforded in § 3.105(e), because failure to afford notice and an opportunity to present additional evidence as outlined in that regulation "deprive[s a veteran] of the regulatory process that VA created to help veterans adjust to a reduction in disability compensation payments and to submit evidence or argument to contest such an action." Murphy v. Shinseki, 26 Vet.App. 510, 516 (2014). The Court has also reversed where a Board decision was in contravention of the special protections in § 3.343 because it upheld the reduction of a total disability rating based on multiple examinations that did not reflect a material improvement, Hohol v. Derwinski, 2 Vet.App. 169, 172 (1992), or based on a single examination where all of the record evidence did not support the reduction, Dofflemyer v. Derwinski, 2 Vet.App. 277, 281 (1992). Additionally, the Court has found reversal to be warranted in certain circumstances where the Agency rendered a decision that was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law because VA did not afford the claimant special regulatory protections required for rating reductions and imposed an inappropriate standard of proof.

Id. at *8.

The Court then framed the case as involving solely whether any improvement in the neuropathy resulted in improved ability to function under the ordinary conditions of daily life.  Id. at *10.  Next, “The Court agrees with the parties that the Board erred. Notably, the Board discussed its obligation to find not only actual improvement in the condition, but that such improvement reflected an improvement in the ordinary conditions of life and work. R. at 7. As the appellant asserts, the Board began the analysis prescribed in Brown, but stopped short by failing to "fully apply" it. Reply Br. at 2; see Appellant's Br. at 4-6. Additionally, the Court will accept the Secretary's concession that the Board failed to consider favorable evidence in reaching its determination. Secretary's Br. at 9 (citing R. at 448-49).”  Id. at *10.

As to the question of reversal or remand, the

Court now concludes that the Board's failure entirely to address, as required by Brown, whether the improvement in the disability reflects an improvement in the ability to function under the ordinary conditions of life and work, also requires reversal of a rating reduction. The crux of the Secretary's argument for remand is that the Board simply provided inadequate reasons or bases for its decision. Secretary's Br. at 11-13. However, the Court finds the Board's error here comparable to those identified in the Court's caselaw, albeit for protected ratings, as requiring reversal.

Id. at *11.

The VA frequently reduces ratings, but just as frequently does it in a really poor manner.  This shows the appropriate remedy in these cases is typically going to be a reversal as opposed to a remand.   

Opinion by Judge Meredith and joined by C.J. Bartley and Judge Pietsch.

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