Veteranclaims’s Blog

January 7, 2022

Single Judge Application; Brown, 5 Vet.App.; rating reduction; Stern v. McDonough, 34 Vet.App.; the Court found, in a case in which the Board reduced several service-connected ratings, 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.” Stern v. McDonough, 34 Vet.App. 51, 59 (2021). The Court rejected the Secretary’s contention that the Board simply provided inadequate reasons or bases for its decision, finding the Board’s error more comparable with the reversal cases up to that point, such as Brown, where the Court reversed because the Board did not make the specific factual findings necessary to reduce a nonprotected disability rating. Brown, 5 Vet.App. at 420 (establishing a two-part test for a valid reduction of a nonprotected disability rating: (1) actual improvement in the disability; and (2) that the improvement reflects “improvement in the . . . ability to function under the ordinary conditions of life and work”); The Court in Stern specifically declined to decide “where the line must be drawn between remandable and reversible Board errors,” reasoning that the Board committed a “total failure” in that case to make the findings required under Brown, which is clearly a reversible error.;

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Designated for electronic publication only
UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS
No. 20-5555
CARLTON A. PACE, APPELLANT,
V.
DENIS MCDONOUGH,
SECRETARY OF VETERANS AFFAIRS, APPELLEE.
Before JAQUITH, Judge.
MEMORANDUM DECISION
Note: Pursuant to U.S. Vet. App. R. 30(a), this action may not be cited as precedent.
JAQUITH, Judge: United States Navy Veteran Carlton A. Pace appeals through counsel a May 19, 2020, decision by the Board of Veterans’ Affairs (Board) that found no clear or unmistakable error (CUE) in an April 3, 2006, regional office (RO) rating decision reducing his depression rating from 100% to 50%. Record (R.) at 5. Because the Board failed to adequately discuss the appellant’s specific CUE allegations, remand, rather than reversal, is warranted.
I. BACKGROUND
The appellant served on active duty from July 1985 to August 1985. R. at 7335. A February 1999 rating decision increased his rating for service-connected major depression from 10% to 100% disabling. R. at 6857. VA provided an updated compensation and pension examination in April 2001, where the appellant reported that he had taken some college courses but had trouble with failing grades, and that he had been doing some work for the previous 6 months. R. at 6292. The examiner estimated a Global Assessment of Functioning (GAF) score of 55 for “moderate symptoms of flat affect and circumstantial speech, moderate difficulty with social, occupational, and school functioning.” R. at 6294. The RO issued a rating decision in May 2001, continuing the 100% rating for major depression, reasoning that there was no evidence showing sustained
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improvement in the condition. R. at 6289-90 (emphasis added). It noted that the assigned evaluation was subject to a future VA examination. R. at 6290.
VA performed another medical examination for his major depressive disorder in July 2005. R. at 6225-30. The examiner noted continued daily symptoms of depression, but that the appellant was able to go out to dinner with his wife, maintain a happy marriage, and work in security. R. at 6226-27. At the examination, the appellant was observed as “pleasant, friendly, cooperative” and “not clinically anxious, not clinically depressed.” R. at 6227. The appellant’s GAF score was estimated at 50. R. at 6229.
The following month, the RO proposed to reduce the depression rating from 100% to 50%. R. at 6174. It considered the April 2001 examination that documented improved symptoms but no sustained improvement, as well as the July 2005 examination results, and found that the totality of the evidence showed “material, sustained improvement, with reasonable certainty that the improvement will be maintained under the ordinary conditions of life.” R. at 6176. It paid specific attention to the appellant’s employment as a security guard for at least 5 years, his intention to start his own business, and his achievement of successfully passing a state private security background investigation, all of which indicated that the psychiatric condition at issue was not 100% disabling. Id. After no response was received from the appellant, an April 2006 rating decision implemented the reduction and assigned a 50% rating for major depression, effective May 1, 2006. R. at 6139. The effective date was revised to July 1, 2006, in a November 2006 rating decision. R. at 6117.
In February 2015, the appellant, through his current counsel, filed a motion alleging CUE in the April 2006 rating decision. R. at 4670-75. He alleged that the decision failed to correctly apply 38 C.F.R. § 3.343(a) when reducing his total disability rating by failing to cite to this regulatory provision and “failed to apply its most critical requirement: comparing the most recent VA examination upon which the proposed reduction is based with the most recent examination which continued the 100[%] disability.” R. at 4673. Specifically, he alleged that the rating decision failed to compare the April 2001 examination with the July 2005 examination. Id. He argued that had the RO actually compared these two examinations, “it would have been clear that there had been no material improvement in the claimant’s service-connected major depression.” R. at 4674.
A November 2017 rating decision denied the CUE motion. R. at 3803-10. The RO acknowledged that neither the August 2005 nor the April 2006 rating decision specifically cited the April 2001 VA medical examination in the list of evidence. It pointed out that the April 2006
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decision cited the August 2005 decision and the July 2005 examination. R. at 3805. The RO reasoned that since the August 2005 decision incorporated the facts of the May 2001 rating decision by reference, and the May 2001 decision had considered the April 2001 examination, VA effectively did consider both the April 2001 and July 2005 examinations by their existence in the “chain of evidence.” R. at 3805. The RO further reasoned that it had not failed to consider any VA medical records when it reduced the rating from 100% to 50%. Id. The appellant filed a Notice of Disagreement (NOD) in January 2018. R. at 3766. The RO again denied the CUE motion in a September 2018 Statement of the Case (SOC). R. at 3508. The appellant filed an appeal to the Board later that month. R. at 3467-68.
The Board, in the decision on appeal, addressed the appellant’s two main arguments in the CUE motion. R. at 12-14. First, it found that the RO specifically applied the substance of 38 C.F.R. § 3.343(a) when it found that “the totality of the evidence, both old and new, shows that [the Veteran] has experienced a material, sustained improvement, with reasonable certainty that the improvement will be maintained under the ordinary conditions of life.” R. at 12. Second, the Board found that the appellant’s argument that the RO failed to compare the findings in the April 2001 and July 2005 examinations was based upon an inaccurate reading of the procedural history of this case. Id. It reasoned that the question before the RO was not whether there was material improvement between May 2001 and April 2006, but whether there was material improvement between February 1999 and April 2006. Id.
II. ANALYSIS
The Board decision on appeal stems from the appellant’s February 2015 request to reverse or revise the April 2006 rating decision imposing a reduction for his service-connected depression rating from 100% to 50%. R. at 4670-75. The appellant asserts that the RO (in the April 2006 decision) and the Board (in the present decision) committed CUE by failing to properly apply 38 C.F.R. § 3.343(a), and that reversal is the only permissible remedy. Id.; Appellant’s Brief (Br.) at 5-13. The Secretary counters that while the Board failed to address the precise CUE allegation raised in the February 2015 filing, this is merely a reasons-or-bases error that requires remand, rather than reversal. Secretary’s Br. at 3-9.
An otherwise final VA decision may be collaterally attacked if a claimant files a CUE motion to reverse or revise the decision. Cacciola v. Gibson, 27 Vet.App. 45, 50 (2004). CUE is a
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rare kind of error; “[i]t is the kind of error, of fact or law, that when called to the attention of later reviewers compels the conclusion, to which reasonable minds could not differ, that the result would have been manifestly different but for the error.” Fugo v. Brown, 6 Vet.App. 40, 43-44 (1993).
CUE is established when (1) either the correct facts as they were known at the time were not before the adjudicator, the adjudicator made an erroneous factual finding, or the statutory or regulatory provisions extant at the time were incorrectly applied; (2) the alleged error is “undebatable,” rather than a “mere disagreement as to how the facts were weighed or evaluated;” and (3) the error “manifestly changed the outcome” of the decision.
Simon v. Wilkie, 30 Vet.App. 403, 407 (2018) (citations omitted). When reviewing a Board conclusion that there was no CUE in a final rating decision, “the Court ‘cannot conduct a plenary review of the merits of the original decision.'” Id. at 408 (quoting Andrews v. Principi, 18 Vet.App. 177, 181 (2004)). The Court review is limited to determining whether the Board’s conclusion was an abuse of discretion or otherwise not in accordance with the law. 38 U.S.C. § 7261(a)(3).
Regarding reductions of total disabilities, 38 C.F.R. § 3.343 provides that “[t]otal disability ratings . . . will not be reduced, in the absence of clear error, without examination showing material improvement in physical or mental condition” and that “[e]xamination reports showing material improvement must be evaluated in conjunction with all the facts of record, and consideration must be given particularly to whether the veteran attained improvement under the ordinary conditions of life.” VA is required to consider the entire record and history of the condition in any reduction case and must consider whether the evidence reflects an actual change in the disability. Brown v. Brown, 5 Vet.App. 413, 421 (1993). Further, for cases where disability ratings at any level have continued for 5 years or more, § 3.344 provides that
[r]atings on account of diseases subject to temporary or episodic improvement, e.g., manic depressive or other psychotic reaction . . . [and] psychoneurotic reaction . . . , etc., will not be reduced on any one examination, except in those instances where all the evidence of record clearly warrants the conclusion that sustained improvement has been demonstrated.
38 C.F.R. § 3.344(a) (2021).
The general rule is that when VA reduces a rating without following the applicable law, the Board must reinstate the prereduction rate. See Schafrath v. Derwinski, 1 Vet.App. 589, 594 (1991). The Court has held that reversal and reinstatement of the previous rating is appropriate
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where a Board decision was in contravention of the special protections in 38 C.F.R. § 3.343. Hohol v. Derwinski, 2 Vet.App. 169, 172 (1992) (reversing a Board decision because it upheld the reduction of a total disability rating based on multiple examinations that did not reflect material improvement). Additionally, the Court has held that a reduction based on a single examination, when all the record evidence did not support reduction, warrants reversal. Dofflemyer v. Derwinski, 2 Vet.App. 277, 281 (1992). The Court in Brown set aside a Board decision as “not in accordance with law” because it did not comply with 38 C.F.R. § 3.344(a) and “reverse[d] the applicable standard of proof by requiring the claimant to prove by a preponderance of evidence” his entitlement to a rating that had been reduced. 5 Vet.App. at 421-22 (setting aside Board decisions that are arbitrary, capricious, an abuse of discretion, or otherwise “not in accordance with law” (quoting 38 U.S.C. § 7261(a)(3)(A)); see also Karnas v. Derwinski, 1 Vet.App. 308, 310-11, 314 (1991) (reversing and reinstating where the Board clearly erred in finding, without evidentiary support and in contravention of 38 C.F.R. § 3.343, that there was material improvement in the condition), overruled on other grounds by Kuzma v. Principi, 341 F.3d 1327 (Fed. Cir. 2003).
That said, reversal and reinstatement are not the appropriate remedy when the Board failed to provide adequate reasons or bases for its decision on the propriety of the reduction. Faust v. West, 13 Vet.App. 342, 352-53 (2000); see also Peyton v. Derwinski, 1 Vet.App. 282, 286-87 (1991) (remanding where the Board provided inadequate reasons or bases in a reduction case and informed judicial review . . . [was] not possible). The Court in Muincsak v. Derwinski took specific issue with its jurisdiction to review the RO’s failure to comply with 38 C.F.R. § 3.343 or 3.344, so it vacated and remanded the appeal, encouraging the Board itself to consider revisiting the RO’s reduction. 2 Vet.App. 363, 369 (1992).
Most recently, the Court found, in a case in which the Board reduced several service-connected ratings, 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.” Stern v. McDonough, 34 Vet.App. 51, 59 (2021). The Court rejected the Secretary’s contention that the Board simply provided inadequate reasons or bases for its decision, finding the Board’s error more comparable with the reversal cases up to that point, such as Brown, where the Court reversed because the Board did not make the specific factual findings necessary to reduce a nonprotected disability rating. Brown, 5 Vet.App. at 420 (establishing a two-part test for a valid reduction of a nonprotected
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disability rating: (1) actual improvement in the disability; and (2) that the improvement reflects “improvement in the . . . ability to function under the ordinary conditions of life and work”).
The Court in Stern specifically declined to decide “where the line must be drawn between remandable and reversible Board errors,” reasoning that the Board committed a “total failure” in that case to make the findings required under Brown, which is clearly a reversible error.
The Court stopped short of agreeing with the appellant’s argument in that case that all Board errors in a reduction case require reversal and reinstatement. Stern, 34 Vet.App. at 60.
The appellant seems to argue that the RO, in considering whether to reduce the veteran’s total disability rating, was only permitted to consider the most recent examination on which the 100% rating was continued (the April 2001 examination), compared with the most recent examination on which the proposed reduction is based (the July 2005 examination), and the reliance of the RO and the Board on any additional evidence, without comparing it to these two examinations, is a misapplication of 38 C.F.R. § 3.353(a). R. at 4673-74; Appellant’s Br. at 5-13. Here, the Board noted that generally, the comparison point in reduction cases is “the last examination on which the rating at issue was assigned or continued,” but that where, as here, “the rating was continued in order to see if improvement was in fact shown, the comparison point could include prior examinations as well.” R. at 9 (citing Collier v. Derwinski, 2 Vet.App. 247 (1992)). The appellant argues that this interpretation of the holding in Collier is incorrect. Appellant’s Br. at 9. He further argues that if the Board had only looked at the level of improvement between the April 2001 and July 2005 examinations, and not considered evidence dating back to the original grant of 100% in 1999, it would have been clear that there was no material improvement. Appellant’s Br. at 2-3.
The Court agrees with the Secretary that remand is appropriate in this case. As with CUE allegations, the Court is not permitted to conduct a plenary review of the merits of the Board decision at issue; it is limited to determining whether the decision was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with” the law at the time the decision was made. 38 U.S.C. §§ 7261(a)(3)(A); 7104(d)(1); see Lane v. Principi, 16 Vet.App. 78, 83-84 (2002), aff’d, 339 F.3d 1331 (Fed. Cir. 2003). Stern not only did not demarcate reversible error from remandable error, it did not involve CUE. 34 Vet.App. at 60. As the Secretary concedes, “[t]he Board erred by failing to adequately discuss [the appellant’s] February 2015 CUE allegations.” Secretary’s Br. at 3. The Board failed to address “whether there was a difference in [the appellant’s] symptoms
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between the April 2001 examination report and the July 2005 examination report”—as the appellant specified in his February 2015 CUE allegation. Id. at 5. The Board’s failure prejudiced the veteran partly because it left unclear whether the security work he engaged in during the relevant period should have been considered a material improvement of the veteran’s condition, especially in light of the July 2005 examiner’s description of the employment as “hypoemploy[ment].” See R. at 6228; 38 U.S.C. § 7261(b)(2) (requiring the Court to “take due account of the rule of prejudicial error”); Simmons v. Wilkie, 30 Vet.App. 267, 278-79 (2018) (explaining that the Court’s statutory mandate to account for prejudicial error requires the Court to assess whether any Board error, in concluding that there was no CUE in the underlying decision, was prejudicial to the claimant), aff’d, 964 F.3d 1381 (Fed. Cir. 2020). The absence of any discussion of this evidence, in either the RO decision reducing the rating or the current Board decision, frustrates judicial review of whether the contested rating reduction contained CUE. Therefore, remand is the appropriate remedy here. See Tucker v. West, 11 Vet.App. 369, 374 (1998) (holding that remand (rather than reversal) is the appropriate remedy “where the Board has incorrectly applied the law, failed to provide an adequate statement of reasons or bases for its determinations, or where the record is otherwise inadequate”).
III. CONCLUSION
Accordingly, the May 19, 2020, Board decision finding no CUE in the April 3, 2006, rating decision that reduced the veteran’s service-connected depression rating from 100% to 50% is VACATED, and the matter is REMANDED to the Board for further proceedings consistent with this decision.
DATED: November 30, 2021
Copies to:
Mark R. Lippman, Esq.
VA General Counsel (027)

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