Lynch: DIC for Now-Adult Children

Lynch v. Wilkie, Case Number 16-0541, decided October 23, 2018 address a situation where an application for DIC was submitted while the veteran’s children were minors but the application did not list them. 

This case involves a claim for DIC by a veteran’s parents.  The application did not list the veteran’s children on it.  They sought DIC benefits years later after they reached their majority.

First, the court had to deal with whether the now adult children are nonetheless potentially eligible DIC claimants as purported children.  The court answered affirmatively and secondly had to address whether the record in the case reasonably raised the theory that there was a pending claim filed on the children’s behalf.  Id. at *4-5.

First, the Court determined:

Because the regulation implementing the statute is a permissible construction of the law

Congress enacted concerning the scheme for effective dates, as well as with this Court's precedent concerning death benefits, the Court concludes that the appropriate date on which to assess whether a person qualifies as a "child" for the purpose of determining eligibility for DIC benefits is governed by 38 C.F.R. § 3.400(c)(4) and depends on when the claim was filed. For claims filed within 1 year after the date entitlement arose, whether a claimant is a "child" should be assessed on the date entitlement arose. For claims filed more than 1 year after the date entitlement arose, whether a claimant is a "child" should be assessed on the date the claim was received.

Id. at *7-8.

The Court then decided:

Applying the above analysis to the facts of this case, if a claim was filed on the appellants' behalf within 1 year of the veteran's death, the date of death is the appropriate date upon which to assess whether the appellants were "children," and their present age is not a bar to benefits.  Otherwise, the appropriate "child" assessment date is the date the claim was received. Therefore, in this case, whether the appellants are eligible claimants depends on whether a claim was filed on their behalf within 1 year of the veteran's death or at some other point while they were still "children."

Id. at *8.

The Court then turned to whether the record reasonably raised a theory of entitlement.  IT noted: “The appellants argue that the record reasonably raised the theory that the 1969 DIC application filed by the veteran's parents was an incomplete, defective, or informal claim for benefits filed on their behalf that, when combined with the appellants' formal 2010 DIC claims, renders the claim filed in 1969 – when they were "children" and eligible to receive DIC – pending.” Id. at *8-9.  The children had pointed to arguments in the NOD, Form 9, and at oral argument essentially that the initial application was incomplete or incorrectly completed.  Id. at *9.

The Court commented, “While the evidence cited may suggest that the 1969 application was not accurately completed, it does not necessarily follow that identifying inaccuracies in the 1969 application submitted by the veteran's parents reasonably raises the theory that the application should be considered filed on behalf of the appellants. Indeed, the same evidence cited above shows that the appellants consistently asserted below that the veteran's parents intentionally sought to deny the appellants the opportunity to seek DIC – in other words, that the 1969 DIC claim was not a claim on the appellants' behalf.”  Id. at *9.  The Court seemed to focus on statements by a non-attorney representative during a hearing that due to the unusual family situation, the benefits were not sought on their behalf.  Id. at *9.  “Thus, even under the most sympathetic of readings, there is no suggestion in the cited evidence that the 1969 claim filed by the veteran's parents, whether considered on its own or in conjunction with the appellants' 2010 claims, should be construed as a claim filed on behalf of  the appellants when they were "children" as defined by 38 U.S.C. § 101(4)(A).  Therefore, this theory was not reasonably raised before the Board.”  Id. at *10.

The Court did leave open the door that if there had been evidence in the record that the an application for survivor benefits from SSA had been made it might have resulted in another decision as such an application might have triggered a formal claim for DIC benefits at the time.  Id. at *10. 

Judge Allen wrote concurring in much of the analysis but dissenting in the conclusion.  He wrote agreeing with the framework of when to evaluate a child’s status for the receipt of DIC.  But, wrote that he thought “there was more than enough evidence in the record to trigger the Board's obligation to consider the appellants' theory of entitlement.”  Id. at *12.

He stated that the question is whether the Board was on notice that it should explore the general theory of entitlement (i.e, that there was something unusual about the grandparent’s application in 1969 for DIC benefits that should have allowed the VA to treat the application as an application on behalf of the children).  Id. at *12-13.  Judge Allen also pointed to the NOD, Form 9, and Board hearing testimony.  The confronted the majorities reliance on the non-attorney representative’s statement that the benefits were sought for the grandparents not the children and stated:

This statement is certainly correct as a matter of fact. But appellants' theory is not premised on an argument that—in reality—their grandparents submitted a formal application for them. The grandparents apparently were acting in ways at odds with their granddaughters, appellants Lynch and Martinez. Thus, I do not rely greatly on this statement, from a non-lawyer representative, as foreclosing the more general arguments

concerning the 1969 application. This is even more so because of the other assertions  about the 1969 application in the record, including the subsequent testimony at the Board hearing.

Id. at *14.

He then pivots and explains the children argued the initial application was missing a critical element (the children) and as consequence of that missing element, the their more recent filings should related back to the 1969 application.  He then explained whether this is a winning argument is unimportant, for the Board had an obligation to consider and address the argument.

This decision results in a very difficult and highlights the unfairness of the system.  A DIC application that did not list a child could foreclose DIC benefits for that child.  However, it does highlight a possible ability to demonstrate a SSA survivor benefit application should count as a benefit.

The decision was by Judge Schoelen and joined in by Judge Meredith. Judge Allen concurred and dissented in part.

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Pirkl: What Happens When the VA Improperly Reduces a 100% Rating and then Subsequently Reduces the Rating Again

Pirkl v. Wilkie, Case Number 2017-1916, decided October 17, 2018 by the Federal Circuit addressed what happens when the VA improperly reduces a 100% rating and then subsequently reduces the rating again later.

This case involves a prior Federal Circuit remand.  The veteran had been granted a 100% rating in 1950, which was reduced to 70% rating in 1953, which was reduced to 50% in 1956, which was reduced again to 30% in 1966.  He was eventually granted a rating of 100% with an effective date from 1988.  After getting the 100% rating returned, in 2001 he filed a motion to revise the other reductions based on clear and unmistakable error.

The Board found CUE in the 1953 reduction and the RO reinstated a 100% rating until 1957.  The RO treated the 1956 and 1966 decisions as barring a higher rating. 

“On appeal to the Board, Mr. Pirkl argued

 that, because the Board awarded him a 100% disability rating as of September 30, 1952, the regulation on reductions of 100% ratings should have governed in 1956 and 1966, but the VA had not afforded him the  regulation’s protections in those years. The failure to apply the regulation in those years is hardly surprising: in both those years, Mr. Pirkl began the disability rating re-assessment with less than a 100% rating, a premise for application of the regulation. The Board concluded, however, that the December 1956 and April 1966 decisions (the latter

affirmed by the Board in 1967) were final as to the rating reductions and their effective dates and that it followed from such finality that the August 2006 Board CUE ruling as to the 1953 rating decision was properly implemented “by simply continuing the 100 percent evaluation until the next final rating reduction in December 1956, which was effective in February 9, 1957.” J.A. 92–93. For that reason, the Board dismissed Mr. Pirkl’s appeal, and the Veterans Court subsequently affirmed.”  Id. at *7.

The Court referenced its decision in Pirkl I and noted that in it “we held that the 1956 and 1966 decisions did not, simply because of their finality, block including post-1956 and

post-1966 relief as part of a remedy for the 1953 CUE.  “[A] finding of CUE may, under some circumstances, require a later decision to be revisited.””  Id. at *7.  The Court explained:

CUE in the 1953 decision changed the factual and legal background against which subsequent reductions were made”: in particular, when the Board found CUE in the 1953 decision, “the subsequent reduction of Mr. Pirkl’s disability rating in 1956 became an effective reduction from a 100% total disability rating, not from a 70% disability rating” (which was the starting point for the actual 1956 rating decision). Id. at 1384. Yet the Board “failed to consider the effect of this change in implementing its finding of CUE.”

Id. at *8.

The Court also noted of its prior decision:

Immediately after noting that the CUE finding “effected a change in the legal context applicable to those later decisions,” we explained that “the Board failed to consider the effect of the applicability of 38 C.F.R. § 3.170 (1949) or its successor regulations in the 1956 and 1966 decisions.”  Pirkl I, 718 F.3d at 1384. We added: “we find no support in the record that establishes the 1956 rating decision took into account the ‘material improvement’ standard” of the regulation. Id. Again citing 38 U.S.C. § 5109A(b), we held: “The CUE finding with respect to the 1953 decision thus requires the Board to revisit these later findings and determine the extent to which the CUE finding changes the legal or factual basis of the later evaluations.”

Id. at *9.

The Board had denied any relief for the CUE past the 1956 reduction because of the absence of separate preserved CUE claims for the 1956 and 1966 decisions and that regulations related to reductions of 100% ratings did not apply due to Reizenstein v. Shinseki, 583 F.3d 1331 (Fed. Cir. 2009).  The Federal Circuit clarified that Reizenstein related to staged ratings and had no bearing on these facts.  Id. at *9.

The Court then noted 38 U.S.C. § 5109A(b) explicitly states that “[a] rating or other adjudicative decision that constitutes a reversal or revision of a prior decision on the grounds of clear and unmistakable error has the same effect as if the decision had been made on the date of the prior decision.” Id. at *12.  The Court then explained that as a result is that Mr. Pirkl must be treated as having the pre-1953 100% rating after 1953, as is undisputed here.  Id. at *12.  It also noted this is a “fundamental principle of corrective remedies …  used throughout the law, though sometimes with modifications: ‘The injured party is to be placed, as near as may be, in the situation he would have occupied if the wrong had not been committed.’”  Id. at *12.

The Court then remanded for a Board determination whether Mr. Pirkl’s 100% rating would have been reduced in 1956 if the regulations related to reduction of 100% ratings had been applied.  It succinctly stated:

The fact that Mr. Pirkl was, because of the VA’s error, not actually receiving the 100%-rating benefit in 1956 no more makes the regulation inapplicable to the 1956 decision to reduce his rating than it disentitles him to retroactive relief under the regulation for the period from 1953 to 1956. In those years, Mr. Pirkl was not actually receiving the

100%-rating benefits, because of the VA’s error, yet the Board awarded relief for that period, and the government does not dispute the propriety of that relief.

Id. at *16.

This decision shows the power of challenging a reduction by the VA and especially highlights the protections in place for a 100% reduction.  It is a sad fact that reductions have grown increasing common these days and a reminder that they can be challenged.

The decision was by Judge Taranto and joined in by Judge Reyna and Chen.

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Robinson: An Earlier Effective Date as a Result of the VA’s Failure to Provide a Timely Diagnostic Test

Robinson v. Wilkie, Case Number 2017-1968, decided October 4, 2018 by the Federal Circuit addressed an earlier effective date after the VA failed to provide a timely diagnostic test.

This case involved a Vietnam veteran and the effective date for an increase from 10% to 60% for his coronary artery disease.  The VA granted an effective date of the date of a diagnostic test showing coronary artery disease, but it took 14 months after a VA physician suggested the need for such tests for them to actually be done.  The veteran essentially argued the effective date should be the date the tests that would eventually show an increase were ordered rather when they were conducted and that “ he should not be penalized for the 14-month delay in scheduling his test.”  Id. at *4.  

The veteran relied on 38 CFR section 17.33(a)(2) which states “Patients have a right to receive, to the extent of eligibility therefor under the law, prompt and appropriate treatment for any physical or emotional disability.”  The Court determined Section 17.33 is related to the provision of healthcare services and was not intended to create rights impacting the handling of compensation claims.  Id. at *8. 

The veteran also argued that the Veterans Court should have granted equitable relief and erred in stating it could not apply principles of equity.  Id. at *8.  But, the Federal Circuit agreed with the Veterans Court that while the Veterans Court “has authority to grant certain forms of non-substantive equitable relief required to enable the court to carry out its statutory grant of jurisdiction,” but it “cannot invoke equity to expand the scope

of its statutory jurisdiction.””  Id. at *8. 

The Federal Circuit then concluded

We agree with the Veterans Court that the facts of this case are troubling. The 14-month delay for coronary artery disease testing strikes us as excessive. But our court’s jurisdiction generally is limited to reviewing legal errors, 38 U.S.C. § 7292(d)(1), and we cannot say that the Veterans Court committed legal error by not exercising its equitable powers to find an effective date earlier than April 2, 2007. Under the circumstances in this case, where we do not know what caused the testing delay and we do not know whether Mr. Robinson would have satisfied the requirements for the 60 percent disability rating had he received the testing at an earlier date, we see no such error in the Veterans Court’s decision.

Id. at *9.

This is a disappointing result for the veteran and also demonstrates the Federal Circuit is not inclined to expand the Veterans Court’s equitable powers.  But, it does leave open the possibility that it would have rule otherwise if the record had supported an explanation that the delay in testing was the result of the VA and not the veteran.

Judge Newman wrote a penetrating dissent in which he argued the veteran’s heart attack is direct evidence of a cardiac illness long before the 14 month delayed test of ejection fraction.  Dissent, Id. at *4.  His dissent explained:

No “special regulation” mandates that the effective date is the date of testing and not the earliest ascertainable date that an increase has occurred. The panel majority’s “special regulation,” 38 C.F.R. § 3.816(c)(2), is silent on these issues. On the other hand, § 3.400(o) expressly addresses the effective date for an increase in disability compensation and defines it as the earliest ascertainable date.

Id. at *6.

He continued:

the entirety of the record must be considered and reasonably evaluated based on sound

medical opinion. It is incorrect for the VA to automatically resolve any gap in evaluation against Mr. Robinson; this court has observed that a condition may have existed before it was verified. See Collins v. Shinseki, 310 F. App’x 393, 395 (Fed. Cir. 2009) (“it may be logical to assume that the date of an injury precedes the date it is verified by a physician”).

Mr. Robinson states that if the VA is authorized to measure disability only from the date of a specific test, despite sound evidence that the disability existed, then the VA must conduct the test in a timely manner. Reply Br. at 2–3. The Secretary does not argue that the 14 months’ delay is reasonable; the Secretary’s only response is that Mr. Robinson could have gone to a private physician for the test. Secretary Br. at 20 (“Mr. Robinson was at liberty to obtain documentation of the status of his condition on his own prior to April 2007 . . . .”)  The record does not show that Mr. Robinson was so advised when the

VA cardiologist ordered the VA to conduct the test.

Id. at *6-7.

The Court then concluded:  “The Secretary offers no explanation or excuse for the delay. Contrary to the VA’s obligation to assist veterans, and to give veterans the benefit of the doubt, Mr. Robinson received neither.”  Id. at *7.

The decision was by Judge Stoll and joined in by Judge Lourie.  The dissent was by Judge Newman.

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Simmons: Harmless Error in the Context of CUE

Simmons v. Wilkie, Case Number 16-3039, decided September 20, 2018 addresses a harmless error analysis in the context of a CUE claim.

During service, the veteran was hospitalized for psychiatric observation and the records noted a history with “nerves” and a diagnosis of situational depression.  A 1972 RO decision granted pension benefits related to arthritis.  In 1974 the veteran sought disability compensation for arthritis and noted he thought his arthritis was related to his in-service mental depression.  A RO decision from that same year found neither the arthritis condition nor the anxiety reaction incurred during service. 

In 2005 the veteran through counsel filed a CUE motion as to the 1974 decision denying service connection for arthritis and a nervous condition.  It was denied and was the subject to an appeal and remand from the Veterans Court in 2016.  This resulted in another 2016 Board decision finding no CUE occurred in the 1974 decision and specifically stating neither the presumption of soundness or service incurrence applied.

The veteran argued “that, consistent with evidence extant in 1974, the Board made favorable findings of fact that in service he was diagnosed with an acquired psychiatric disability not noted upon service entry, and therefore the Board should have found that the RO erred in 1974 (1) in not affording him the presumptions under sections 105(a) and 1111 and (2) in not concluding that such disability was incurred during service, meeting the second element of service connection.”  Id. at *6. 

The Court found the Board did err in the failure to apply the presumption of soundness and service incurrence. Id. at *7-*9.  However, the Court did not end its analysis there.  Instead, it stated:

Merely finding an error, however, is not enough for Mr. Simmons to prevail. We are statutorily required to consider whether those errors prejudiced him. 38 U.S.C. § 7261(b)(2); see Hilkert v. West, 12 Vet.App. 145, 151 (1999) (en banc) (appellant has the burden to show prejudicial error).  The matter is somewhat more complicated in the context of CUE because part of the analysis that the Board undertakes incorporates a form of prejudicial error analysis—an error cannot be CUE unless it would have "manifestly changed the outcome" of the underlying agency decision.

Id. at *9.  It continued to explain:

in the context of our review of a Board decision on CUE, if we determine that the Board's manifestly changed outcome conclusion as to the underlying decision was not arbitrary or capricious and that it was supported by adequate reasons or bases, there would be no need for the Court to employ a prejudicial error analysis because there would be no Board error, the predicate for a Court harmless error analysis.

Id. at *10.

The Court explained its harmless error analysis by stating “prejudice is established by demonstrating a disruption of the essential fairness of the adjudication, which can be shown by demonstrating that the error (1) prevented the claimant from effectively participating in the adjudicative process, or (2) affected or could have affected the

outcome of the determination.”  Id. at *12. 

The Court characterized the veteran’s argument as stating “the essential fairness of the adjudicative process is disrupted if the Board fails to correctly apply mandatory statutory and regulatory presumptive provisions.”  Id. at *13.  And, “if the Court's harmless error

analysis focuses solely on whether correction of the Board's error manifestly would result in a different outcome, it would undermine the importance and value of statutory and regulatory presumptions.”  Id. at *14.  The Court concluded the first prong of its analysis by stating “even considering the pro-claimant nature of the veterans benefits system, we hold that the failure to afford the benefit of the type of statutory or regulatory presumption at issue in this case is not an inherently prejudicial error, although it may nevertheless be prejudicial in a particular case.”  Id. at *16. 

The Court then shifted in its analysis to asking whether the Board’s error prejudiced the veteran in this particular or individual case.  The Court noted the veteran argued against a finding on this prong: ‘He argues that this Court's usual harmless error review, which generally involves determining whether Board error would have made a difference in a benefits determination outcome, would compel us to engage in plenary review of the underlying facts of the RO decision, an endeavor that the Court in Archer prohibited. For

several reasons, the Court disagrees.”  Id. at *17.  The Court explained:

his argument overlooks that the Court in reviewing a Board decision on a CUE motion undertakes two separate inquiries. The prohibition on plenary review applies when the Court is determining whether the Board decision is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.  In contrast, when conducting a

harmless error analysis, the Court has already determined that the Board has erred and that the Board did not address, or did not address adequately, whether, if the underlying decision were incorrect, the outcome would manifestly have been different.  In that context, the Court is determining whether the Board error was prejudicial or affected the essential fairness of the adjudication.

Id. at *17-18.

The Court found the Board’s errors did not prevent the veteran from participating in the processing of his CUE motion or affect the overall fairness of the process and the Board’s errors did not affect its ultimate determination.  Id. at *19.  The Court acknowledged the presumptions of soundness and service incurrence but noted they do not relieve a claimant of providing evidence of the third—or linkage—prong of service connection.  Id. at *19.  It then specifically found a medical record relied upon by the veteran did not make that linkage and even if did that the record before the RO in 1974 also included a VA examiner's opinion that the acquired psychiatric disability was secondary to a non-service-connected arthritic condition.  Id.  “Therefore, despite his arguments, the Court cannot agree with Mr. Simmons that "[h]ad the presumption[s] been afforded[,] based on the evidence of nexus in the record, an award of service compensation would have been required."  Id.

This decision is a hard result, but is helpful in reminding us that a CUE motion must be rooted in the record existing at the time of the decision under attack and the record must prove all elements of the claim. 

The decision was by Judge Bartley and joined in by Chief Judge Davis and Judge Allen.

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Cousins: Spondylolysis, CUE, Defects and Degenerative Conditions

Cousins v. Wilkie, Case Number 2017-1971, decided September 28, 2018 is a Federal Circuit Court of Appeals case that addressed whether a 1950s RO decision finding the veteran’s lumbar condition should not be service connected contained clear and unmistakable error.

The veteran had not back problems on his September 1951 entrance examination and in fact hurt his back in 1952 resulting in diagnosis of a back strain and restricted duty.  A 1953 x-ray showed spondylolysis.  After discharge, the veteran sought service connection for his back, but the claim was denied because “Service records show that, on 5-9-52, the veteran had a pain in the back “catching in nature.” Examination showed a mild back strain. There is no further evidence of treatment or complaint of this condition. It is  vonsidered to have been acute, without residuals”  Id at *3. 

Finally, a 2013 decision granted service connection and granted an effective date as the date of application.  The veteran argued an earlier date of discharge effective date was owed because the 1954 decision contained CUE.  The Board

acknowledged that the 1954 decision contains no reference to, or discussion of, the fact that Mr. Cousin was placed on a permanent physical profile for his back in March 1953, but noted under then-existing precedent the RO was not required to give a detailed explanation of its findings. Citing the 1946 Schedule for Rating Disabilities (“1946 schedule”), the Board found that because Mr. Cousin’s 1953 x-ray revealed evidence of a “defect,” the RO “might well have concluded that the condition” was a noncompensable “congenital defect.”

Id. at *3.  The Veterans Court affirmed the Board decision saying it offered a plausible explanation for discounting the 1953 records and that the RO in 1954 did not have to fully explain its findings.

Essentially, the veteran argued the Board and Veterans Court did not apply the proper legal standard for determining whether a condition is a non-compensable “defect” in

crediting the RO’s 1954 decision.  The veteran argued his medical records demonstrated he had a back condition called spondylolysis, which, based on undisputed facts, is a “disease” capable of progression and not a “defect” for purposes of compensation under then-existing law.  Id. at *5.  The Federal Circuit pointed out that the Secretary conceded the veteran was diagnosed with spondylolysis and that it is a degenerative disease.  Id. at *6-7.  The Court then stated

the only way the 1954 RO could have found against Mr. Cousin is if it concluded the legal definition of “defect” under the 1946 schedule included degenerative conditions. That would have been error as a matter of law. At no point has the government suggested that the legal definition of “defect” could include a degenerative condition. To the contrary, the Department of Veterans Affairs and the government have argued that a “defect” under the regulation does not include degenerative conditions.

Id. at *7.

The Court thus concluded

we are not retroactively applying this law; rather, we are interpreting the 1946 regulation in effect at the time. Whether a defect under the regulation can include a degenerative condition is a question of law over which we have jurisdiction. We conclude that “defect” is properly construed as excluding degenerative conditions, and we do not understand the government to contend otherwise in this case.

Id.  The Court then stated based on the proper legal interpretation of defect and the concessions by the Secretary, the RO could not determined spondylolysis was a defect and thus the 1954 decision as a matter of law contained clear and unmistakable error.  Id. *8.

The veteran sought for a judicial determination defining sedentary work the same as a Department of Labor publication.  The Court refused, reasoning that sedentary work is absent from Section 4.16 and thus not necessarily a part of a proper TDIU analysis.  Id. at *10.

The Court expressed sympathy that the decision did not offer a clear cut resolution by refusing to define the term sedentary work.  Instead, it noted the definition of sedentary work must be discerned on a case by cases basis from the medical and lay evidence presented and in light of the veteran’s education, training, and work history.

The Court also explicitly stated the Secretary could use notice and comment rule making to amend Section 4.16 to include and define the term sedentary work or veterans and veteran advocates could petition the VA for rulemaking to do the same.  However, I suspect the VA and advocates will let the matter alone.  My reading is that a grant or denial of TDIU should consider all evidence, including the veteran’s work history and education.  In other words, a holistic approach to consideration of TDIU (as required) does not specifically need the term sedentary work to be defined.

This is an early decision by Judge Toth and frankly demonstrates a willingness to refuse both the Secretary and veteran advocates what they want.  It likely reveals a judicial temperament that is tough but clear minded and deferential to the language of the law.

This is an unusual case in that rather than remanding for further development, it found as a matter of law that CUE existed. 

The decision was by Judge Moore and joined in by Judges Schall and Wallach.

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Burton: Systemic Therapy For Skin Disabilities (Johnson v. Shulkin Continued)

Burton v. Wilkie, Opinion Number 16-2037, decided September 28, 2018 addresses and helps define systemic therapy for skin disabilities.  It is essentially an explanation of Johnson v. Shulkin, 862 F.3d 1351 (Fed. Cir. 2017). 

DC 7806, which impacts certain skin conditions, asks whether the treatment is systemic therapy.  The Court noted:

In Johnson, the Federal Circuit reversed this Court's decision that under DC 7806 topical

corticosteroids categorically constituted systemic therapy. 862 F.3d at 1352. Instead, the Federal Circuit held that the DC contemplated two types of therapy: systemic and topical. Id. at 1354. The court referenced Dorland's Illustrated Medical Dictionary in defining "systemic therapy." Id. at 1354-55. The court noted that "systemic" is defined as "pertaining to or affecting the body as a whole" and "therapy" is defined as "treatment of diseases." Id. at 1355. We will rely on these definitions to guide our analysis.

Although the Federal Circuit found a distinction between topical and systemic therapies, it made clear that sometimes a topical treatment can be systemic therapy. Id. at 1355-56. The Federal Circuit stated that "a topical corticosteroid could be considered either a systemic therapy or topical therapy based on the factual circumstances of each case." Id. at 1356. The court went on to opine that a topical therapy could be systemic if it was applied on a large enough scale.

Id. at *5.

The Court first rejected any argument that the key to systemic therapy required large scale topical application and held “large scale application is merely an example of a factual circumstance that can convert topical treatment into a systemic therapy.” Id. at *6.

The Court then stated “to qualify as a systemic therapy it is not enough that the

treatment standing alone affects the entire body. Rather, it must affect the entire body in its treatment of the condition at issue.”  Id.  The Court then concluded that

the Board must determine whether a topical treatment operates by affecting the body as a whole in treating the veteran's skin condition. Stated a different way, the Board must decide how the topical treatment works – not by its contact with the affected location of the condition on the body, but instead in some other way that affects the body more broadly. For example, a topical treatment may affect the body as a whole if it circulates through the bloodstream. Thus, in affecting the body as a whole, it essentially would not

matter whether the topical treatment was applied where the condition was located or some other part of the body, as the body in its entirety would be involved in the treatment.

How a topical treatment works is a factual question that may, but not necessarily, require

a medical opinion for its resolution.

Id. at *6-7.

While discussing this line of reasoning, the Court took time to attack the VA’s failure to update the M21-1 (the VA Adjudication Procedures Manual).  It noted the manual conflicts with Federal Circuit case by stating topical treatments are not considered systemic.  Id. at *7.  It then went further and stated “The Secretary's delay of a year and counting in updating VA's materials to comply with a Federal Circuit decision is unacceptable and especially egregious because it is not the first time that VA has delayed in implementing a court directive.”  Id. at *8.

The Court then noted the VA has changed the skin disordered diagnostic code to state topically applied treatment cannot qualify as systemic therapy, though the rule does not apply to claims made prior to August 13, 2018.  It then seemed to fire a warning shot at the VA in terms of a continued failure to implement court directives stating:

As noted above, after continued delay in updating the M21-1 to reflect Johnson, VA

published a final rule and changed DC 7806, effective August 13, 2018. There is nothing wrong with an administrative agency engaging in rulemaking, as VA has done, when it disagrees with a judicial interpretation of a regulation. Provided the agency follows the appropriate procedures, such rulemaking is a prime example of how separation of powers operates in American Government. An agency can change the law going forward. But  what an agency may not do is refuse to implement a court's decision while the agency seeks to change a regulation to conform to its view. Such refusal is antithetical to separation of powers. It is not acceptable in a country governed by the rule of law. VA should stop these actions of its own accord. Otherwise, the courts will have to act to preserve the constitutional separation of powers.

Id. at *8.

The Court then considered the impact of side effects from medication and determined:

It is simply not enough under DC 7806 for something to be systemic; it must also be treatment for the condition.  Therefore, if a treatment does not affect the body as a whole in the way in which it treats a skin condition, it cannot be considered systemic therapy for that skin condition, regardless of whether side effects result.

As the Secretary pointed out at oral argument, side effects can raise the possibility of

secondary service connection.

Id. at *9.

The Court also considered the veteran’s use of Benadryl and argument that if its use was systemic it might entitle the veteran to a higher rating, and determined

In Warren, this Court held that "systemic therapy" in DC 7806 was not limited to corticosteroids or immunosuppressive drugs. 28 Vet.App. at 197. Rather, the use of the phrase "such as" in DC 7806 before "corticosteroids or other immunosuppressive drugs" means that "those drug types do not constitute an exhaustive list of all compensable systemic therapies, but rather serve as examples of the kind and degrees of treatments used to justify a particular disability rating." Id. Therefore, the Board must determine whether a given treatment is "like" a corticosteroid or other immunosuppressive drug in determining whether the treatment constituted a systemic therapy to warrant a higher rating.

Id. at *10.

This case reveals the depths the VA will go to avoid a judicial decision they disagree with—they will simply change the regulation to make a less pro-veteran friendly regulation and refuse to change its manual (which gives guidance to VA decision-makers). It was heartening to see the Court especially take issue with the refusal to change the manual to conform with court directives. 

Decision by Judge Allen and joined in by Judges Schoelen and Greenberg.


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Overton: Presumption of Exposure to Agent Orange, Bluewater v Brownwater Part 3

Overton v. Wilkie, Case Number 17-0125, decided September 19, 2018 is the third case in a long line of cases (including many cases by Gray) dealing with the VA’s illogical distinction between Blue and Brownwater veterans.

The blue versus brownwater distinction is important because those veterans who served on what is termed brownwater areas are deemed to be exposed to Agent Orange and thus a presumption applies to several disabilities.

In the 2015 decision Gray v. McDonald, the Court held the VA’s interpretation of a statute designating Da Nang Harbor as offshore was arbitrary and capricious and remanded the case so the VA could reevaluate its waterway definition in light of the purpose of the regulation, which is to provide compensation based on herbicide exposure.  Rather than creating a more pro-veteran rule, the VA modified its Adjudications Procedural Manual (M21-1) to exclude all Vietnamese bays and harbors from the definition of “inland waterways.” 

Importantly, the VA avoided changing the actual regulation, which would have required notice and comment rulemaking and simply changed its internal manual.  The result was a challenge before the Federal Circuit of the manual change and a decision, Gray v. Secretary of Veteran Affairs, by that Court stating the M21-1 was internal manual used to guide adjudicators and was not a substantive rule and that the Board is not bound by the M21-1.

In light of these decisions, the Board denied service connection to Overton for among other things type II diabetes mellitus, which would normally be presumed to be caused by Agent Orange for veterans who served in Vietnam (including in inland waterways).  The Court noted “The Board relied on the modified M21-1 provision to deny the appellant's claims concerning presumptive herbicide exposure.11 Yet, the Board did not discuss why it relied on the M21-1.”  Id. at *2.

The Court then held:

that when relying on any M21-1 provision, the Board must independently review the matter the M21-1 addresses. If after such review, the Board chooses to rely on the M21-1 as a factor in its analysis or as the rule of decision, it must provide adequate reasons or bases for doing so. The Board may not simply rely on the nonbinding M21-1 position

without analysis. Because the Board did not engage in the appropriate analysis here, the Court will set aside the November 1, 2016, Board decision and remand the matter for readjudication consistent with this decision.

Id. at *2.

            In its analysis, the Court recited the history of the Gray decisions and particularly the Federal Circuit case and stated:

we know first that VA is permitted to draw reasonable lines demarcating inland versus offshore waterways when considering whether a veteran is entitled to the presumption of herbicide exposure. Second, when drawing such a line, VA must do so in a reasoned, nonarbitrary manner focused on the likelihood of herbicide exposure. And finally, the Board is not bound by M21-1 provisions.

Id. at *7.

considers the Board’s reference to GAF scores when setting a PTSD rating.  The Court strictly determines GAF scores should not be considered. 

As said by the Court:

The "Global Assessment of Functioning" scale was a scale ranging from 0 to 100, that was created to reflect "psychological, social, and occupational functioning on a hypothetical continuum of mental health illness." See DSM-IV at 32. In other words, a GAF score was a numerical summary on a standardized scale reflecting the presence and severity of psychological symptoms and their effects.

Id. at *4.

The Court then explained the Board

provided nothing more than this historical recitation to support its conclusion that Da Nang Harbor is not brown water warranting presumptive herbicide exposure. Instead, the Board tersely stated that the "new guidance," referring to its earlier discussion of the M21-1 provision, deems all harbors or bays offshore, and all rivers and deltas inland.44 This is error.
The Federal Circuit made it clear that the Board is not bound by the M21-1.45 This holding is meaningful. To support its decision the Board can't simply cite an M21-1 provision without further analysis. First, doing so would effectively negate the Federal Circuit's decisions in Gray and DAV. Doing so would convert the M21-1 into substantive rules as a practical matter without providing a means to challenge such rules under the APA. Second, because the M21-1 is not binding on the Board, the Board's citation to a manual provision as the only support for a conclusion–here that Da Nang Harbor is blue water–is inconsistent with the Board's congressionally mandated obligation to provide an adequate statement of reasons or bases for its decisions

Id. at *8.

The Court also noted the Board suggested the all or nothing rule of stating all bays and harbors are not inland waterways alleviated the problems from Gray, but the Court made clear the problem is the lack of rationale in determining what makes something an inland or offshore waterway.  Id. at *9.

The Court also rejected the Secretary’s last minute request that the Court defer to the agency.  The Court rejected because the matter was not briefed but raised at oral argument and such deference would be misplaced where the Court was reviewing the Board decision as opposed to the M2-1 provision.

This Court reveals a significant flaw in the VA’s failure to pursue notice and comment rulemaking and demonstrates how reliance on an M21-1 provision can be attacked.

Decision by Judge Allen, joined in by Chief Judge Davis and Judge Pietsch.


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Johnson: Headaches and DC 8100 Explained

Johnson v. Wilkie, Case Number 16-3808, decided September 19, 2018 addresses DC 8100 and defines it as a successive rating.

A successive rating is one which requires the veteran satisfy each and every criteria listed for a higher rating.  A successive rating criteria is a limited exception to the general regulatory structure, which states it is not expected that all claims must satisfy every single criteria in a DC.  As a general matter, a higher evaluation will be assigned if the veteran’s disability picture more nearly approximates the criteria required for the higher rating.

The Court concluded DC 8100 was a successive rating criteria, which means that  higher rating will not be assigned unless the veteran meets every criteria for the higher rating.  The Court reasoned that “DC 8100 has all the hallmarks required of successive rating criteria under the law.  In sum, each disability level builds on another in terms of duration and frequency, requiring that a veteran rated at a higher level to satisfy all the  requirements of the lower levels.”  Id. at *10.

The Court then turned to whether the Board actually gave proper reasons for its refusal to deny a higher rating.  Id. at *11.  The Court concluded some of the conclusions of the Board were not consistent with the actual evidence—for instance, the Board said the veteran had headaches on average of once per month whereas the examination noted them more frequently.  But, the Court really focused on problems of the actual Diagnostic Code.  It stated

            More fundamentally, DC 8100 is rife with subjective terms of degree, the standards for which are undefined in the Board's discussion or anywhere in the regulatory structure. The Board stated that "[w]hile three times a month may be deemed frequent, the Board finds it does not equal very frequent." R. at 7. The Board also found that the headaches were not "completely prostrating" despite the October 2010 report stating that he is "unable to perform any task with prostrating attacks." R. at 524. Finally, the Board concluded that the headaches were not "prolonged" when the evidence stated that they lasted from 15 minutes to "hours," R. at 417, 524, and that he took leave under the FMLA, at least through 2011.3  R. at 489.

            Without a standard for comparing and assessing terms of degree, such conclusory findings are unreviewable in this Court. Furthermore, a Board member's dogmatic pronouncement of bare conclusions for a decision denying a claim for a rating increase under DC 8100 prevents a veteran from assessing what his or her evidence must demonstrate, and virtually guarantees inconsistent results. At oral argument, the Secretary maintained that the Board may determine whether the "very frequent" requirement is met without disclosing what benchmark it employed to reach that conclusion. The Court rejects the Secretary's position that the Board may make such determinations without any obligation to disclose the standard under which it is operating. It is unacceptable for the Court to be placed in the position of accepting the Board's determination that Mr. Johnson's headaches do not meet the requirements of DC 8100 "because I say so."

Id. at *12.

Judge Allen wrote a concurrence where he focused on the VA’s failure to define terms.  Specifically he wrote: “I write separately to underscore a disturbing agency practice this appeal illustrates. That practice is both unacceptable and unlawful.”  Id. at *13. 

Judge Allen continued to explain:

In this case, the Board denied the appellant's claims, in part, because it concluded that his headaches were neither "very frequent" nor "prolonged." R. at 7. Both of these concepts are important to the assignment of an appropriate rating for headaches, see 38 C.F.R. § 4.12a, Diagnostic Code (DC) 8100 (2018). But neither is defined in statute or VA regulation. The absence of such definitions is troubling alone. More concerning still, however, is that despite the centrality of these terms to the Board's decision in the appellant's case, the Board itself did not define either term.

Id. at *12.

This decision takes away the opportunity for a veteran to argue that he deserves a higher rating even if he does not meet every element. However, it also shows how subject to attack decisions to deny a higher rating under DC 8100 are in cases where there is evidence of severity.  It will be interesting to see how the Board and the VA react in their decisions.

The decision was by Chief Judge Davis and joined in by Judge Schoelen with a concurring opinion by Judge Allen.

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