74 F.4th 1374
Fed. Cir.2023Background
- Perciavalle injured his left knee in Army service (1962–1964); initially awarded 10% under DC 5259 (medial menisectomy) after a 1966 exam.
- A 1971 RO exam showed x-ray changes, slight lateral instability, and flexion reduced from 145° to 135°; the RO denied an increased or separate rating and that decision became final.
- In 2015 Perciavalle sought reopening of the 1971 decision for clear and unmistakable error (CUE), arguing he was entitled to a separate rating for knee instability (DC 5257) and a second rating for limitation of flexion/discomfort from arthritis (DC 5003/5260).
- The RO and Board denied the CUE claim, reasoning Perciavalle relied on the retroactive application of later legal interpretations (e.g., Esteban and a 1997 VA General Counsel opinion), which cannot constitute CUE.
- The Veterans Court sat en banc and produced a fractured decision: a majority found the Board erred in construing the claim but the judgment was affirmed by a combination of opinions concluding either no error or that any error was harmless.
- The Federal Circuit held the Veterans Court correctly found Board error in construing the claim but vacated the Veterans Court’s affirmance and remanded to require the Board to address whether the 1971 decision contained CUE consistent with the opinion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the Board err by construing Perciavalle’s CUE motion as relying on retroactive application of later law? | Perciavalle: his CUE motion raised existing facts and applicable regs; VA should sympathetically read pro se CUE filings to discern claims. | Government: Board’s interpretation was correct; Perciavalle relied on later legal authorities. | Court: Board erred; Veterans Court correctly concluded the Board misread the CUE claim. |
| If the Board erred, must the case be remanded or was the error harmless? | Perciavalle: remand required to evaluate CUE under law existing in 1971 and record facts. | Government: any Board error was harmless because no clear legal error existed in 1971. | Court: Veterans Court’s harmless-error rationales contained legal or factual error; remand required to let Board address CUE. |
| May the Veterans Court review de novo the Board’s characterization of the CUE pleading (or is that an unreviewable factual finding)? | Perciavalle: Veterans Court may review legal/factual issues and set aside clearly erroneous factual findings. | Government: Veterans Court lacked jurisdiction to overturn Board’s factual characterization without de novo factfinding. | Court: Veterans Court had authority; government jurisdiction argument untenable; Veterans Court did not err in finding Board misinterpretation. |
| Can a CUE be based on an interpretive legal error even absent a prior court or VA publication identifying the error? | Perciavalle: CUE may be based on incorrect application of regulations as they existed, regardless of later-citing authority. | Government / Toth concurrence: CUE impermissible where alleged legal error was only identified later by courts or VA publications. | Court: A legal error can constitute CUE even if no prior court/agency decision identified it; Toth’s rule was legally incorrect. |
Key Cases Cited
- Wolf v. United States, 168 Ct. Cl. 24 (1964) (pyramiding analysis allowing separate ratings where manifestations are distinct)
- Esteban v. Brown, 6 Vet. App. 259 (1994) (permitted separate ratings for distinct knee conditions not duplicative)
- George v. McDonough, 142 S. Ct. 1953 (2022) (CUE review must be based on law and record as they existed when the decision was made; later changes cannot themselves be CUE)
- Andrews v. Nicholson, 421 F.3d 1278 (Fed. Cir. 2005) (Veterans Court may sympathetically read pro se pleadings and review legal determinations)
- Willsey v. Peake, 535 F.3d 1368 (Fed. Cir. 2008) (standard for CUE: incorrect application of existing statutes/regulations or missing correct facts at the time)
- Shinseki v. Sanders, 556 U.S. 396 (2009) (harmless-error standard applies in veterans’ cases and is case-specific)
- Tadlock v. McDonough, 5 F.4th 1327 (Fed. Cir. 2021) (where factual findings are necessary to resolve harmless error, remand is proper for the Board)