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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