Johnson v. McDonald, 2016 U.S. Vet. App. LEXIS 303

Paul Johnson, an Army veteran, appealed a Board of Veterans’ Appeals decision denying an increased rating for his service‑connected skin condition (dermatitis/eczema) and denying a separate rating for scarring.
The Board denied a rating above 10% because: (1) affected skin area was under 20% of exposed areas; and (2) the Board found he had not used “systemic therapy” for the durations in Diagnostic Code (DC) 7806. The Board also found scarring was not related to the service‑connected skin condition.
At a VA exam, Johnson reported constant use of a topical corticosteroid (triamcinolone cream) for 12 months.
The Secretary argued “systemic therapy” excludes topical corticosteroids and noted VA guidance (M21‑1) distinguishing topical versus systemic therapies.
The Court convened a panel and held that DC 7806’s plain language lists “corticosteroids” as an example of “systemic therapy” without limiting route of administration, so topical corticosteroid use can fall within DC 7806. The Board’s contrary finding was reversed and remanded for rating and effective date.
The Court affirmed the Board’s conclusion that Johnson was not entitled to a separate rating for scarring because the record did not show scarring predominated or that the observed scar was related to the current service‑connected condition.

Issue	Plaintiff's Argument	Defendant's Argument	Held
1. Whether "systemic therapy" in DC 7806 includes topical corticosteroids	Johnson: DC 7806 explicitly lists "corticosteroids" as an example of systemic therapy; his constant topical use meets the regulation	Secretary: "Systemic" means body‑wide (oral/parenteral); topical is local; M21‑1 and DC 6602 show Secretary distinguishes systemic routes	Held: Reversed — plain language of DC 7806 includes corticosteroids without route limitation, so topical corticosteroids can be "systemic therapy" under DC 7806; remanded for rating/effective date
2. Whether Johnson is entitled to a separate rating for scarring	Johnson: C&P exam notes abrasions/scar and supports separate scarring rating under DCs 7801–7805	Secretary: Board addressed scarring evidence and found scars were unrelated to current condition; no showing scarring predominates	Held: Affirmed — record does not show scarring is related to or predominant over the service‑connected dermatitis; no Board error shown

Auer v. Robbins, 519 U.S. 452 (deference to agency interpretation of its own regulation unless clearly erroneous)
Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (foundational deference to agency interpretations)
Corley v. United States, 556 U.S. 303 (statutory construction: give effect to all provisions)
Lamie v. U.S. Trustee, 540 U.S. 526 (courts must not rewrite agency rules/statutes to correct drafting)
Johnson v. McDonald, 762 F.3d 1362 (agency interpretations entitled to deference only when regulation ambiguous)
Deloach v. Shinseki, 704 F.3d 1370 (appellate reversal appropriate only when record shows definite and firm conviction of error)