Smiddy: The Board and Extraschedular Consideration

Philbrook v. Wilkie, Case Number 16-2333, decided May 28, 2020 involves a consideration of the Board’s role after a decision on extraschedular considerations by the director of the Compensation Service.

The veteran had sought an extraschedular rating for residuals of an inguinal hernia repair, which had been previously remanded by the Board to the director.  Ultimately, the director denied saying

[A]part from the objective evidence confirming the 10% evaluation currently entitled to and other subjective evidence[,] such as the [appellant] indicating that his scar has caused him discomfort so that he can't wear tight fitting clothing, has affected his sexual activity, and it's slowed him down at work[,] no further evidence of an unusual disability picture such as frequent hospitalizations or of marked interference with employment have been presented. The Director also reasoned that the objective medical evidence of record suggested that the 10% schedular evaluation was adequate, that the appellant had continued to work fulltime, and that the various medical opinions had found that the appellant's disability should not prevent him from maintaining gainful employment. Id. The Director also noted that the appellant was already service connected for erectile dysfunction.

Id. at *3-4.

In its opinion, the Board affirmed finding “the evidence of record was against a finding that the appellant's inguinal hernia repair residuals presented "such an exceptional or unusual disability picture that the available schedular evaluations are inadequate.”  Id. at *4.  The Board noted manifestations of pain and numbness in the left testicle and thigh were fully contemplated by the rating criteria.  The Court also noted:

the Board determined that, although the appellant “assert[ed] his disability has worsened due to urinary symptomatology, competent medical evidence of record indicates that [his] voiding dysfunction with urinary leakage is not a symptom of his left inguinal hernia repair residuals."  R. at 8. The Board also found "no evidence of unusual factors such as frequent hospitalizations or marked interference with employment stemming from the  appellant's] inguinal hernia repair residuals." R. at 18. In reaching this conclusion, the Board stated that it had no reason to doubt the appellant's reports of slowed work performance due to pain from his inguinal hernia repair

residuals, but that "slower performance alone does not comprise [sic] marked interference with employment" and that in his TDIU request he "did not attribute his inability to work to his hernia repair residuals."

Id. at *4.

The Court begins by noting the disability ratings are based on the average impairment of earning capacity in civilian occupations, but the to do justice to exceptional cases the director is authorized to approve extraschedular ratings.  Id. at *6.  The Court noted the governing norm was whether the claimed disability presented such an exceptional or unusual disability picture with such related factors as marked interference with employment or frequent periods of hospitalization so as to render impractical the application of the regular schedular standards.  Id. at *7.

The Court then explained the Three Step inquiry from Thun:

First, either the RO or the Board must find "that the evidence before VA presents such an exceptional disability picture that the available schedular evaluations for that service-connected disability are inadequate." Thun, 22 Vet.App. at 115. This step requires "a comparison between the level of severity and symptomatology of the claimant's service-connected disability with the established criteria found in the rating schedule for that disability." Id. If "the schedular evaluation does not contemplate the claimant's level of disability and symptomatology and is found inadequate," the second step of Thun provides that "the RO or Board must determine whether the claimant's exceptional disability picture exhibits other related factors such as those provided by the regulation as 'governing norms,'" such as "marked interference with employment" and "frequent periods of hospitalization." Id. (citing 38 C.F.R. § 3.321(b)(1) (2007)). Finally, if the criteria under the first two steps are satisfied, "then the case must be referred to the [Director] for completion of the third step—a determination of whether, to accord justice, the claimant's disability picture requires the assignment of an extraschedular rating." Id.

Id. at *7.  The Court then reviews the Board’s decision under the clearly erroneous standard of review.

However, in this case, the Board had made factual findings that required referral to the Director, but then the Director denied the extraschedular rating.  The Court extended the reasoning from a series of cases in this area to say “in the extraschedular rating context, the Board's reasons-or-bases requirement obligates it to explain[] its reasoning when a factual finding made at the referral stage comes out differently at the review stage.”  Id. at *10.  In the case at hand, the Board had previously specifically found the residuals were so unusual and exceptional that it rendered the schedular criteria inadequate.  Id. at *11.  The Court then noted their really was not any new evidence since the referral (the Director’s decision is not evidence), and stated “[t]hus, it is unclear why, on mostly the same facts, the Board reached opposite conclusions.”  Id. at *11.  The Court then explained: 

Although the Board was not bound by its 2014 referral decision, it did not explain why it had reached an opposite conclusion in its 2016 decision. In the 2016 decision, the Board did not discuss the 2014 referral findings, but simply noted the referral. To enable the appellant to understand the precise basis for its decision, the Board must explain why it reached a different result. Here, the appellant believes that, by the referral in 2014, he received a "yes" to an extraschedular rating, and then in 2016 received a "no," although the Board had evaluated the same two Thun factors. Because the Board treated the 2014 and 2016 Thun determinations differently, it must explain why and how they were different. See Allday, 7 Vet.App. at 527. Its failure to do so frustrates judicial review.

Id. at *11.

This is an interesting case with narrow facts.  The Board determined at the referral stage that the disability was not adequately compensated by the schedular rating and referred to the Director, the Director disagreed, and the Board seemed to change its tune.  While similar facts have certainly happened before, I expect the VA will just train their Board members to be less helpful with factual findings on referral.  Still, it is nice to see the Court hold the Board’s feet to the fire and demand the Board explain how it suddenly changed its mind.  I suspect the truth is the Board member just did not want to crosswise with the Compensation Director.

Decision by Judge Pietsch and joined in by Judges Greenberg and Meredith.

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