Young: When Can the VA Find CUE

Young v. Wilkie, Case Number 17-2179, decided March 11, 2019 is an opinion discussing when the VA can find CUE.

The veteran had been granted a staged rating and filed a notice of disagreement (NOD) and sought DRO review.  The DRO reviewed and found CUE in the prior decision and actually lowered the veteran’s rating.  The Board affirmed. 

The legal question was whether the VA could find CUE after a NOD had been filed.  The veteran argued that Section 3.105(a) only permits revision of final decisions and the since a NOD had been filed, the case was in appellate status and not final.

The Court noted “§ 3.105(a), unlike § 3.160(d), doesn't use the term "finally adjudicated

claim"—it instead says that "final and binding" decisions are subject to revision based on a finding.”  Id. at *3.  It then determined:

In other words, "final and binding" in § 3.104 does not mean unappealable as Mr. Young contends; rather, it means that the AOJ's review is complete and the AOJ (or another AOJ) cannot reach a different decision on the same evidence, except as otherwise provided. Since § 3.105(a) expressly provides that "final and binding" decisions are subject to CUE, it follows that VA was permitted to revise the June 2012 rating decision despite the filing of an NOD.

Id. at *4.

The Court then determined that it also had to delve deeper since:

3.104(a) also provides that a "final and binding agency decision shall not be subject to revision . . . except as provided in § 3.105 and § 3.2600 of this part." Significantly, § 3.2600(a), which addresses "[r]eview of benefit claims decisions," provides that "a claimant who has filed a[n] [NOD] . . . with a decision of an [AOJ] . . . has a right to a review of that decision." 38 C.F.R. § 3.2600(a) (2018). It goes on to list the different types of review, including review by a DRO. Id. Subsection (e) expressly authorizes reviewers to revise rating decisions on the basis of CUE even if there's a pending NOD:

Notwithstanding any other provisions of this section, the reviewer may reverse or

revise (even if disadvantageous to the claimant) prior decisions of an [AOJ]

(including the decision being reviewed or any prior decision that has become final

due to failure to timely appeal) on the grounds of clear and unmistakable error (see

§ 3.105(a)).

Id. at *4.

The Court then concluded:

Here, Mr. Young filed an NOD as to a "final and binding" rating decision, as defined by § 3.104(a), and selected review by a DRO. Since § 3.2600(e) undoubtedly authorized the DRO ("the reviewer") to revise the June 2012 rating decision ("the decision being reviewed"), the Court discerns nothing improper with the actions taken by VA in this case.

Id. at *5.

The Court also considered other arguments, specifically, an argument that the VA did not follow proper procedures for a reduction found in Section 3.105(e).  However, the Court determined:

§ 3.105(e) might come into play when a claimant is assigned a rating for a certain condition but that condition later improves. That's not what happened in this case.

Rather, the Board found that the DRO's revision of the June 2012 rating decision on the

basis of CUE was correct given what the evidence reflected as of June 2012. Properly speaking, this action wasn't a "reduction" based on later evidence showing a change in the veteran's condition, but a revision based on the evidence of record at the time the original decision was made. R. at 7 ("Again, the RO did not allege an improvement in the veteran's cervical spine symptoms . . . the RO asserted that there was [CUE] in the June 2012 rating decision . . . .").  Therefore, the procedures set out in § 3.105(e) were not applicable in this case.

Id. at *6.

A concurring and dissenting opinion by Judge Pietsch refused to adopt the discussion of final and binding found in the majority opinion and instead simply relied on the authority in Section 3.2600(e) allowing the DRO to review the decision.

This case is appears to apply the regulations faithfully, but ignores the result—that the VA was able to evade its process for reductions by couching the decision as one for CUE.  While this situation is probably rare, the result gives the VA another tool to reduce a claim—calling it CUE.  The case also underscores the fact that while the VA system is called “non-adversarial” in reality a veteran might be served well by having counsel to fully advocate for them.

Decision by Judge Toth and joined in by Judge Bartley.  Dissent by Judge Pietsch.

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