Lead Opinion
Opinion for the court filed by Circuit Judge SCHALL, in which Senior Circuit Judge FRIEDMAN and Circuit Judges MICHEL, LOURIE, CLEVENGER, RADER, BRYSON, LINN, DYK, and PROST join.
Concurring opinion filed by Circuit Judge DYK, in which Circuit Judge LINN joins.
Dissenting opinion filed by Circuit Judge GAJARSA, in which Chief Judge MAYER and Circuit Judge PAULINE NEWMAN join.
James R. Cook appeals the decision of the United States Court of Appeals for Veterans Claims (‘Veterans Court”) in Cook v. West, No. 98-1801,
Mr. Cook petitioned for rehearing en banc. In so doing, he argued that, under a proper application of Hayre, a showing that the VA violated any statutory or regulatory duty towards a veteran vitiates the finality of a decision regarding the veteran’s entitlement to benefits. On January 4, 2002, we granted Mr. Cook’s petition for rehearing en banc and vacated the panel opinion. Cook,
1. Whether this court’s decision in Hayre v. West,188 F.3d 1327 (Fed.Cir.1999), should be overruled insofar as that case holds that the existence of “grave procedural error” renders a decision of the Veterans’ Administration non-final?
2. Whether, if Hayre is overruled in this respect, a failure of the Secretary to assist the veteran under the law and regulations applicable at the time (affirmatively demonstrated by the record before the adjudicator in the particular case) can constitute clear and unmistakable error (“CUE”) under 38 U.S.C. § 5109A? See Roberson v. Principi,251 F.3d 1378 (Fed.Cir.2001).
We answer the en banc questions as follows: First, to the extent that it created an additional exception to the rule of finality applicable to RO decisions, Hayre is overruled. Second, a failure of the Secretary to assist a veteran under applicable law and regulations cannot constitute CUE. In Parts I and II of this opinion, respectively, we address the first and second en banc questions. In Part III, we consider Mr. Cook’s appeal in light of our answers to the en banc questions. Doing so, we affirm the decision of the Veterans Court.
DISCUSSION
I.
A. First En Banc Question
Whether this court’s decision in Hayre v. West,188 F.3d 1327 (Fed.Cir.1999), should be overruled insofar as that case holds that the existence of “grave procedural error” renders a decision of the Veterans’ Administration non-final?
B. The Rule of Finality
If a veteran fails to appeal from an RO decision concerning a claim, the decision becomes “final,” and “the claim will not thereafter be reopened or allowed, except as may otherwise be provided by regulations not inconsistent with this title.” 38 U.S.C. § 7105(c) (2000). Principles of finality and res judicata apply to agency decisions that have not been appealed and have become final. See Astoria Fed. Savs.
There are, however, two statutory exceptions to the rule of finality. First, pursuant to 38 U.S.C. § 5108, the Secretary must reopen a claim “[i]f new and material evidence [regarding the claim] is presented or secured.” Second, a decision “is subject to revision on the grounds of clear and unmistakable error.” 38 U.S.C. §§ 5109A (decision by the Secretary) & 7111 (decision by the Board). These are the only statutory exceptions to the finality of VA decisions.
C. Hayre v. West
In Hayre, the veteran filed a claim in 1972 for service connection for a “nerve problem.”
In 1992, Hayre again applied for service-connected disability. Following a VA examination, he was awarded service connection and a disability rating for post-traumatic stress disorder. In 1993, seeking an earlier effective date for the award of Service connection, Hayre brought a claim challenging the RO’s 1972 decision as “clearly erroneous.” Hayre argued that the RO had not obtained the psychiatric SMRs that he had requested and had failed to afford him a VA examination. Id. The RO denied the claim, and the Board and the Veterans Court affirmed, treating the claim as a CUE claim.
On appeal, we reversed and remanded. We first held that an RO’s single unsuccessful request for pertinent SMRs that are specifically sought by a claimant does not fulfill the RO’s duty to assist the veteran in developing facts pertinent to his claim.
We next held that the RO’s 1972 decision was not final for purposes of appeal. In so doing, we created a third exception to the rule of finality in addition to the two statutory exceptions created by Congress. Specifically, we held that “where there is a breach of the duty to assist in which the VA failed to obtain pertinent SMRs specifically requested by the claimant and failed to provide the claimant notice explaining the deficiency, the claim does not become final for purposes of appeal.” Id. at 1334. In reaching this holding, we stated that “[i]n cases of grave procedural error, ... the [Veterans Court] has consistently held that RO or Board decisions are not final for purposes of direct appeal.” Id. at 1333 (citing Tablazon v. Brown,
Notice to the claimant explaining the failure to obtain pertinent and specifically requested SMRs is ... essential to insuring that the agency of original jurisdiction (“AOJ”) will adequately develop a veteran’s claim before deciding it on the merits. Furthermore, if the claimant is to effectively appeal his or her case, the claimant must be cognizant of all the evidence considered by the AOJ. Where so much of the evidence in VA adjudications is circumstantial at best, notice explaining the failure to obtain pertinent and specifically requested SMRs is critical to ensuring a proper award for benefits and an effective right to judicial review.
Id. at 1334. We thus concluded that if the Veterans Court “finds that the RO breached the duty to assist [Hayre] in 1972, then the 1972 RO decision is not final for purposes of direct appeal.”
D. Whether Hayre Should Be Overruled
The government contends that we should overrule the holding of Hayre that the finality of a VA decision is vitiated if the VA commits a “grave procedural error” when adjudicating a claim. The government argues that the Hayre decision is not supported by statute or legislative history. For his part, Mr. Cook argues that the Hayre decision is consistent with Con
We agree with the government that Hayre should be overruled. The statutory scheme provides only two exceptions to the rule of finality. At the same time, we see nothing in the legislative history of the pertinent statutes—38 U.S.C § 5109A (CUE challenge to an RO decision), 38 U.SC. § 7111 (CUE challenge to a Board decision), 38 U.S.C. § 5108 (reopening of a claim based on new and material evidence), and former 38 U.S.C. § 5107(a) (recognizing the VA’s duty to assist the claimant in the development of his claims) — that indicates that Congress intended to allow additional exceptions to the finality of VA decisions based upon “grave procedural error.”
The purpose of the rule of finality is to preclude repetitive and belated readjudication of veterans’ benefit claims. Congress knew how to create exceptions to the finality of VA decisions, and it explicitly did so in two circumstances. It enacted the statutes codifying CUE challenges (sections 5109A and 7111) and the statute allowing claims based on new and material evidence (section 5108). Applying the familiar canon of expressio unius est exclusio alterius, we conclude that Congress did not intend to allow exceptions to the rule of finality in addition to the two that it expressly created.
In support of its holding that “grave procedural error” vitiates the finality of a VA decision, the Hayre panel relied on the legislative history of the Veterans’ Benefits Amendments of 1989, Pub.L. No. 101-237, § 115(a)(1), 103 Stat.2062, 2065 (1989), which added sections 3004(a)(1) and (2) to title 38 of the United States Code (currently codified as amended at 38 U.S.C. § 5104(a) and (b)). Hayre,
As noted above, the Hayre panel also relied on four Veterans Court decisions involving “grave procedural error” in sup
An understanding of the process for obtaining disability benefits will help put the four Veterans Court decisions upon which the Hayre panel relied in proper perspective. We outlined the process in Maggitt v. West,
In each of the cases cited by the Hayre panel, the Veterans Court held that the time for appealing either an RO or a Board decision did not run where the VA failed to provide the veteran with information or material critical to the appellate process just described. See Tablazon v. Brown,
Tablazón, Hauck, Kuo, and Ashley involved straightforward application of 38 U.S.C. §§ 7105(b)(1), 7105(d)(3), and 7266. Section 7105(b)(1) provides that the one-year period which the veteran has to file an NOD does not begin to run until the date of the mailing of notice of the claim denial to the veteran. Section 7105(d)(3) makes the furnishing of a statement of the case the event that triggers the veteran’s obligation to file a “formal appeal” with the
Furthermore, in Tablazón, Hauck, Kuo, and Ashley, the VA’s failure to comply with statutory procedural requirements regarding notification of benefit determinations had the effect of extinguishing the claimant’s right to appeal an adverse decision. In Hayre’s case, however, regardless of any failure of the duty to assist in the development of evidence, Hayre was afforded notice of the RO decision denying his claim for service connection. If he had filed an NOD with respect to the 1972 administrative decision, the VA would have been required to provide him with a statement of the case, which would have notified him of the basis for the denial of his claim. See Pub.L. No. 87-666, 76 Stat. 553 (1962) (adding statement-of-the-case requirement at 38 U.S.C. § 4005, currently codified as amended at 38 U.S.C. § 7105). Thus, the VA’s failure to notify Hayre that it had been unsuccessful in obtaining his SMRs did not preclude him from challenging the administrative decision denying his claim and raising the issue of the duty to assist after he was notified of the basis for the decision.
In summary, a breach of the duty to assist the veteran does not vitiate the finality of an RO decision. We therefore overrule Hayre to the extent that it created an additional exception to the rule of finality applicable to VA decisions by reason of “grave procedural error.” If additional exceptions to the rule of finality in 38 U.S.C. § 7105(c) are to be created, if is for Congress, not this court, to provide them. As we discuss next, however, to the extent it stands for the proposition that a breach of the duty to assist cannot constitute CUE, Hayre remains good law.
A. Second En Banc Question
Whether, if Hayre is overruled in this respect, a failure of the Secretary to assist the veteran under the law and regulations applicable at the time (affirmatively demonstrated by the record before the adjudicator in the particular case) can constitute clear and unmistakable error (“CUE”) under 38 U.S.C. § 5109A? See Roberson v. Principi,251 F.3d 1378 (Fed.Cir.2001).
B. The Concept of CUE
CUE provides a means for collateral attack on a final decision of an RO. This concept, once solely grounded in regulation, see 38 C.F.R. § 3.105, is now also governed by statute. In 1997 Congress enacted Pub.L. No. 105-111, 111 Stat. 2271 (1997), which is codified at 38 U.S.C. §§ 5109A and 7111. Section 5109A covers claims of clear and unmistakable error at the RO level, while section 7111 covers claims of clear and unmistakable error at the Board level.
Although the two provisions are quite similar, only section 5109A, pertaining to review of an RO decision, is relevant to our inquiry. Section 5109A states in relevant part that:
(a) A decision by the Secretary under this chapter is subject to revision on the grounds of clear and unmistakable error. If evidence establishes the error, the prior decision shall be reversed or revised.
(b) For the purposes of authorizing benefits, a rating or other adjudicative decision that constitutes a reversal or revision of a prior decision on the grounds of clear and unmistakable error has the same effect as if the decision had been made on the date of the prior decision.
38 U.S.C. § 5109A.
The regulation from which section 5109A was derived, and which remains in place today, provides that final determinations of the RO will be accepted as correct unless CUE is shown. See 38 C.F.R. § 3.105(a). Further, like the statute, the regulation provides for the reversal of decisions found to contain CUE and the retroactive award of benefits to the date of the original decision. Id. The pertinent language in the regulation is as follows:
*1343 (a) Error. Previous determinations which are final and binding, including decisions of service connection, degree of disability, age, marriage, relationship, service, dependency, line of duty, and other issues, will be accepted as correct in the absence of clear and unmistakable error. Where evidence establishes such error, the prior decision will be reversed or amended. For the purpose of authorizing benefits, the rating or other adjudicative decision which constitutes a reversal of a prior decision on the grounds of clear and unmistakable error has the same effect as if the corrected decision had been made on the date of the reversed decision.
38 C.F.R. § 3.105(a).
The Veterans Court has rendered decisions addressing the meaning of “clear and unmistakable error,” as used in the statute and regulation. In Russell v. Principi, the court addressed for the first time the validity of 38 C.F.R. § 3.105.
By its express terms, 38 C.F.R. § 3.105(a) refers to “determinations on which an action was predicated.” Therefore, it necessarily follows that a “clear and unmistakable error” under § 3.105(a) must be the sort of error which, had it not been made, would have manifestly changed the outcome at the time it was made.
Id.;
In Russell, the Veterans Court also explained that in order for an error to rise to the level of CUE, the error must have been made on the record as it existed at the time the decision was made. See Russell,
Mr. Cook urges us to overrule precedent holding that a breach of the duty to assist cannot serve as a basis for CUE. See Hayre,
We agree with the government that a breach of the duty to assist cannot constitute CUE. Both our precedent and that of the Veterans Court establish two requirements for a CUE claim. First, in order to constitute CUE, the alleged error must have been outcome determinative, see Bustos,
Turning first to the requirement that the alleged error be outcome determinative, we note that both the regulation and the statute provide that once a prior decision is found to contain clear and unmistakable error it is to be “reversed.” See 38 C.F.R. § 3.105(a); 38 U.S.C. § 5109A. The call for reversal on account of clear and unmistakable error clearly suggests that the contemplated error is outcome determinative. See id.
The legislative history of section 5109A also supports the conclusion that an alleged error must be outcome determinative in order to constitute CUE. We have held that Congress’ intent in drafting section 5109A was to codify and adopt the CUE doctrine as it had developed under 38 C.F.R. § 3.105. See Pierce,
It must always be remembered that clear and unmistakable error is a very specific and rare kind of “error”. It is the kind of error, of fact or of 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. Thus even where the premise of error is accepted, if it is not absolutely clear that a different result would have ensued, the error complained of cannot be, ipso fac-to, clear and unmistakable. Russell v. Principi,3 Vet.App. 310 , 313 (1992) (en banc).
H.R.Rep. No. 105-52, at 3 (quoting Fugo,
We turn now to the second requirement of CUE. As noted above, in Russell, the Veterans Court held that a determination that there was CUE must be based upon the record that existed at the time of the original RO decision. We have held,that the legislative history of section -5109A supports the requirement that the CUE analysis be limited to the record before the prior adjudicator. In Pierce, we stated that “[although the language of § 5109A does not expressly limit the evidence that can be considered in a CUE challenge to evidence that was of record at the time the challenged decision was made, the legislative history of the statute, the purpose of the statute, and the overall statutory scheme for reviewing veterans’ benefits decisions all indicate that Congress intended the evidence to be so limited.”
We conclude that decisions of this court and the Veterans Court concluding that a clear and unmistakable error at the RO level must be outcome determinative and must be apparent from the evidence of record at the time of the original decision are supported by the language of 38 U.S.C. § 5109A and its legislative history. We therefore reject Mr. Cook’s request that we overturn existing law to that effect.
[w]hile it is true that an incomplete record may ultimately lead to an incorrect determination, it cannot be said that an incomplete record is also an incorrect record. If the facts contained in the record are correct, it is not erroneous, although not embodying all of the relevant facts. Rather, an incomplete record is just that — incomplete.... Thus, an incomplete record, factually correct in all other respects, is not clearly and unmistakably erroneous.
Caffrey,
Finally, we do not agree with Mr. Cook that Roberson v. Principi supports the proposition that a breach of the duty to assist can form the basis for a CUE claim. In Roberson, a panel of this court reviewed the Veterans Court’s rejection of a CUE claim that was based on an alleged breach of the duty to assist relating to a 1984 rating (percentage of disability) decision. We explained that, “[a]s we held in Hayre v. West,
Having rejected the argument that a breach of the duty to assist could serve as the basis for a CUE claim, we went on to “determine the standard that applies when the VA is considering a CUE claim.” Id. We concluded that, in adjudicating a CUE claim, the VA is required to follow the approach outlined in Hodge v. West,
III.
Having held that there can be no judicially crafted exception to the rule of finality and that a breach of the duty to assist cannot constitute CUE, we turn now to the facts of this case.
Mr. Cook served in the United States Army from August of 1942 to December of 1945. His service medical records contain a March 1945 diagnosis of “psychoneurosis, anxiety type.” When he was recalled for service in 1950, an examination found that he was “not qualified for active duty due to his ulcer.” In 1952, Mr. Cook submitted a benefits claim to the RO for service connection for “Stomach Trouble Nervous Stomach.” A physical examination revealed a duodenal ulcer. In a neu-ropsychiatric examination the attending physician noted:
The present day idea is, generally, that a peptic ulcer may be a visceral expression of long continued anxiety. In this case, a diagnosis of duodenal ulcer has been established. A dual diagnosis should not be made, but it should be clear that the diagnosis of duodenal ulcer includes a psychic or emotional component.
In June of 1952, the RO denied service connection for “stomach trouble and nervousness.” It stated that Mr. Cook’s ulcer was not incurred or aggravated in sendee and that the most recent examination had not revealed nervousness. The RO also stated that the “[neuropsychiatric] examination revealed no evidence of a psychiatric disability.”
Mr. Cook did not appeal the RO decision to the Board; it therefore became final. See 38 U.S.C. § 709 (1952).
Mr. Cook appealed the RO’s decision, contending that the effective date of the award should have been the April 1952 date of the original filing of his claim and that the RO’s 1952 decision contained CUE and therefore was non-final.
Subsequently, in a single-judge unpublished decision, the Veterans Court affirmed the decision of the Board. The court first held that the alleged deficiencies in the RO’s 1952 decision did not constitute CUE. The court then rejected Mr. Cook’s argument that the RO’s failure to give him an adequate medical examination in 1952 violated its duty to assist him, so as to render the 1952 decision not final and make the date of that decision the effective date of his benefits. As to whether Mr. Cook’s claim fit within the exception to the rule of finality created by Hayre, the court concluded that even if Mr. Cook had established a breach of the duty to assist, the failure to provide him with an appropriate medical examination did not rise to the level of the “grave procedural error” found in Hayre.
We affirm the decision of the Veterans Court. In Part I of this opinion, we have overruled Hayre insofar as it holds that the existence of “grave procedural error” renders a decision of the VA non-final. In Part II, we have held that a failure of the VA to assist the veteran to the extent required by applicable law and regulations cannot constitute CUE under 38 U.S.C. § 5109A. In the face of these rulings, Mr. Cook’s claim for an earlier effective date for his service-connected disability benefits must fail, because the rulings leave Mr. Cook without any ground upon which to claim an earlier effective date.
CONCLUSION
For the foregoing reasons, the decision of the Veterans Court is affirmed.
COSTS
No costs.
AFFIRMED.
Notes
. The Veterans’ Administration was renamed the Department of Veterans Affairs in 1988. Department of Veterans Affairs Act, Pub.L. No. 100-527, 102 Stat. 2635 (1988). Throughout this opinion, "VA” will be used as an abbreviation for both the Veterans' Administration and the Department of Veterans Affairs.
. We have held that a veteran may bring a claim having the same factual basis as a previously disallowed claim when an intervening and substantive change in law or regulation creates a new basis for entitlement to a benefit. See Spencer v. Brown,
. A veteran who successfully brings a CUE claim is entitled to benefits retroactive to the date of the original claim. See 38 U.S.C. § 5109A(b) ("For the purpose of authorizing benefits, a rating or other adjudicative decision that constitutes a reversal or revision of a prior decision on the grounds of clear and unmistakable error has the same effect as if the decision had been made on the date of the prior decision.”).
.When Hayre was decided, the statutory duty to assist was set forth at 38 U.S.C. § 5107(a) (1994) (“The Secretary shall assist such a claimant in developing the facts pertinent to his or her claim.”). In enacting 38 U.S.C. § 5107(a) as part of the Veterans' Judicial Review Act, Pub.L. No. 100-687, § 103(a), 102 Stat. 4105, 4106 (1988), Congress codified the VA's obligation to assist claimants,
. Pursuant to the Veterans Claims Assistance Act, the VA, as part of the duty to assist, is required to notify a claimant when it is unable to obtain relevant records. See 38 U.S.C. § 5103A(b)(2).
. Expressio unius est exclusio alterius means that "the expression of one thing is the exchision of another.” Harris v. Owens, 264 F.3d-1282, 1296 (10th Cir.2001).
. The appeal period is one year ''from the date of mailing of notice of the result of initial review or determination.” 38 U.S.C. § 7105(b)(1).
. If on direct review, the Veterans Court concludes that there was a breach of the duty to assist, it may vacate the decision on appeal and remand the case to the VA for further consideration following compliance with the duty to assist. See Pond v. West,
. Our dissenting colleague, Judge Gajarsa, believes that an applicant for veterans' benefits possesses a property interest of sufficient magnitude to invoke the protection of the Fifth Amendment's Due Process Clause. Starting from that premise, he would hold that, where a breach of the duty to assist results in the denial of benefits, application of the rule of finality is tantamount to a denial of due process and, accordingly, the rule should be vitiated. Thus, Judge Gajarsa would create a new exception to the rule of finality, in order to obviate what he perceives to be a procedural due process violation arising from a breach of the duty to assist.
The Due Process Clause question was not briefed by the parties or argued to us. Nevertheless, assuming arguendo that a breach of the duty to assist may implicate the Due Process Cláuse, we note that the claim adjudication process before the RO and the Board has long provided a structure that affords a veteran a hearing. See 38 C.F.R. §§ 3.3-3.14; 19.0-19.7 (1949). During the adjudication of his claim, a veteran may always assert that there has been a breach of the duty to assist. Moreover, as noted, under the regime that has existed since 1988, if the Veterans Court determines that the VA failed to comply with the duty to assist, the court may vacate the decision being appealed and remand the case for further consideration in compliance with the duty to assist. Pond,
If, however, a breach of the duty to assist is not known to the veteran during the adjudication of his claim, and becomes known to the veteran only after the decision to deny his claim for benefits has become final, the veteran may only apply to have the final judgment reopened through the two avenues provided by Congress, CUE and new and material evi
. Before the enactment of section 7111, the concept of CUE with respect to Board decisions was not recognized. See Smith v. Brown,
. S ection 7111 states in relevant part that:
(a) A decision by the Board is subject to revision on the grounds of clear and unmistakable error. If evidence establishes the error, the prior decision shall be reversed or revised.
(b) For the purposes of authorizing benefits, a rating or other adjudicative decision of the Board that constitutes a reversal or revision of a prior decision of the Board on the grounds of clear and unmistakable error has the same effect as if the decision had been made on the date of the prior decision.
38 U.S.C. § 7111.
. Russell addressed a prior version of the CUE regulation. In that version, the first sentence of section 3.105(a) differed slightly from its present counterpart. It read as follows:
"Previous determinations on which an action was predicated, including decisions of service connection, degree of disability, age, marriage, relationship, service dependency, line of duty, and other issues will be accepted as correct in the absence of clear and unmistakable error.” Russell,3 Vet.App. at 312-313 .
. As noted above, review of Board decisions for CUE is governed by 38 U.S.C. § 7111. The VA has promulgated Board rules imple-meriting section 7111. See 38 C.F.R. §§ 20.1400 1411. Although neither section
In Disabled American Veterans v. Gober,
. At the time Mr. Cook's claim was rejected, the rule of finality codified today in 38 U.S.C. § 7105(c) was set forth in 38 U.S.C. § 709, which stated in relevant part that "[w]hen a
. As noted above, the "reversal or revision of a prior decision on the grounds of clear and unmistakable error has the same effect as if the decision had been made on the date of the prior decision.” 38 U.S.C. § 5109A(b).
Concurrence Opinion
with whom LINN, Circuit Judge, joins, concurring.
I fully join the majority’s opinion, but wish to make clear that we are not decid
Unlike a successful clear and unmistakable error (CUE) claim, which is given the effective date of an earlier reversed or revised decision under 38 U.S.C. § 5109A, a successful new and material evidence claim typically is not given retroactive effect. By statute and regulation, a reopened claim generally results in the veteran’s receiving payments only from the date that the application was received. 38 U.S.C. § 5110(a) (“Unless specifically provided otherwise in this chapter, the effective date of an award based on ... a claim reopened after final adjudication ... shall not be earlier than the date of receipt of application therefor.”); 38 C.F.R. § 3.400 (“[The effective date] will be the date of receipt of the claim or the date entitlement arose, whichever is the later.”).
Where there has been a material breach of the statutory duty to assist at some time in the past, and that breach by the government prevented the veteran from discovering the new and material evidence at an earlier date, a question arises as to whether retroactive relief is available in a new and material evidence proceeding. An argument for retroactivity might have particular force where the violation of the duty to assist was unknown to the veteran at the time of the original application, for example, where the Veterans Administration had pertinent undisclosed information in its files and the veteran was unaware that a proper search had not been conducted. Indeed, the government in this case appears to concede that in such circumstances retroactive relief would be available in a new and material evidence proceeding by virtue of 38 C.F.R. § 3.400(q)(2).
I express no opinion on these questions, and write merely to emphasize that we are not deciding them today.
The following colloquy between the court and government’s counsel, occurred during oral argument:
The Court: Let me ask you a very clear hypothetical. Suppose that I was a veteran, and some years after my service I filed a claim saying I'm disabled and have been ever since an incident that occurred during my time in service. And the regional office or the veteran's board ... adjudicates my claim in the total absence of any file of my military service and just turns down the claim saying "you just haven’t proven your claim." ... [I]t was my view that my service file clearly showed that I was injured [and] disabled way back then. Can it really be that a decision in which no militaiy medical records were obtained can be immune from revision?
H« * * * * *
Counsel: [U]nder your hypothetical, if it was adjudicated under the new and material evidence exception the individual would get the benefits going back in time, not just limited to the date of reopening ... I respectfully refer the court to 38 C.F.R. 3.400(q) in that where a new and material evidence claim to reopen is granted, and is decided in the claimant’s favor, if the basis of the decision granting benefits was based on service department records which were for some reason not before the original board, the effectiveness date goes back in time as it would in CUE and not as it was normally occurring in the typical claim to reopen.
Dissenting Opinion
in which Chief Judge MAYER and Circuit Judge PAULINE NEWMAN join.
I respectfully dissent. In my view, a breach of the duty to assist a veteran by failing to provide a proper medical examination vitiates the prior decision of the regional office (“RO”) for purposes of direct appeal. The duty to assist is an integral part of the pro-claimant, non-adversarial claims adjudication process of the Department of Veterans Affairs (“VA”). Congress expressly stated that the VA must “fully and sympathetically develop the veteran’s claim to its optimum before deciding it on the merits.” H.R. Rep. No. 100-963 at 13, reprinted in 1988 U.S.C.C.A.N. 5782, 5795; see also 38 U.S.C. § 5107(a) (1994) (“The Secretary shall assist such a claimant in developing the facts pertinent to the claim.”), amended by 38 U.S.C. § 5103A (2000) (“Duty to assist claimants”); 38 U.S.C. § 5103 (2000) (“Notice to claimants of required information and evidence”). Breaches of this critical duty compel us to toll the finality of VA decisions, as we held in Hayre v. West,
In the veterans’ uniquely pro-claimant system of awarding benefits, systemic justice and fundamental considerations of procedural fairness are critical, Hayre,
The question raised here is whether a claimant should be denied an opportunity “to collaterally challenge a VA decision where the veteran later discovers that the VA breached its duty to assist.” Ante, at 1338. The majority says no such opportunity exists, for two reasons: first, “[principles of finality and res judicata apply to agency decisions that have not been appealed and .... [u]nless otherwise provided by law, the cases are closed and the matter is thus ended,” ante, at 1336 -1337 (citing Astoria Fed. Savs. & Loan Ass’n v. Solimino,
I recognize the importance of the rule of finality; however, enforcement of that policy must be circumscribed by constitutional due process and tempered by fairness and equity.
I shall first explain why claimants for, as well as recipients of, veterans’ benefits have property rights, then identify my disagreements with the majority’s analysis, and finally explain why I believe a breach of the statutory duty to assist veterans imposes an unconstitutional restraint on individual property.
A.
According to Board of Regents v. Roth,
Applicants for service-connected death and disability benefits, as distinct from recipients threatened with total or partial termination, also have a property interest in the receipt of those benefits. In Walters v. Nat’l Assoc, of Radiation Survivors, the Supreme Court considered whether “a statutory fee limitation, as it bears on the [veterans’ benefits system] in operation, deprives a rejected claimant or recipient of ‘life, liberty, or property, without due process of law' by depriving him of representation.”
For veterans basic entitlement to disability compensation derives from two statutes, both found in title 38, sections 1110 and 1131 — the former relating to wartime disability compensation and the latter relating to peacetime disability compensation. Both statutes provide for compensation with the following words: “For disability resulting from personal injury suffered or disease contracted in the line of duty, or for aggravation of a preexisting injury suffered or disease contracted ... the United States will pay to any veteran thus disabled ... compensation.... ” 38 U.S.C. §§ 1110, 1131 (2000). Here, Cook and Hayre, who meet the threshold eligibility requirements of 38 U.S.C. § 1110, are entitled to procedural due process by virtue of the statutory mandate of the program and the VA’s policy and practice in the administration of the veterans’ benefits program. It is common ground that a statute declaring that veterans meeting certain eligibility criteria will receive a service-connected benefit secures the benefit for those veterans, just as a blanket of common law rules secures more traditional forms of private property for individuals. See Roth,
Correlatively, the fact that only those who meet specified criteria are entitled to the benefit does not mean that due process is inapplicable until eligibility has been conclusively proven, because this approach would deny the very procedures needed to demonstrate that a property interest exists in the first place. See id. (“[Rjecipi-ents in Goldberg v. Kelly ... had not yet shown that they were, in fact, within the statutory terms of eligibility. But we held that they had a right to a hearing at which they might attempt to do so.”). Thus, while at the application stage of the proceedings neither Cook nor Hayre had been administratively adjudged entitled to receive benefits under the regulatory scheme, an applicant for veterans’ benefits nonetheless possesses a property interest of sufficient magnitude to invoke the protection of the Fifth Amendment’s Due Process Clause. The property interest is not that benefits have been previously received, but the existence of statutory provisions creating the right to a remedy and defining the terms under which it can be obtained. By establishing substantive standards for qualification, the regulations governing the veterans’ benefits system create a legitimate claim the applications of Cook and Hayre will not be denied unless the VA factually determines that they do not suffer from a disability originating from service. Accordingly, their statutory entitlement to benefits constitutes a protected property right.
B.
By focusing primarily on the “red herring” finality issue, the majority avoids application of the interest-balancing test normally applied in due process cases. I understand the majority to imply two basic arguments in dismissing the arguments of Cook and Hayre. The first is to suggest that no remedy is required when breaches of the statutory duty to assist — such as the omission of a complete and thorough medical examination for Cook — are involved. The second is that the affirmatively misleading notice sent to Hayre sufficed to adequately protect veterans’ interests in any case, because veterans can be presumed to know the law regarding the veterans’ benefits system and their right to appeal.
In my view, the majority’s fixation on finality creates a conceptual confusion in identifying the constitutional deprivation present in these cases. In traditional cases arising under the Due Process Clause of the Fifth Amendment, governmental confiscation of property is not difficult to recognize: An individual possesses property and the Government’s action deprives the individual of it. Where “new property” interests — that is, statutory entitlements — are involved, however, claim- ' ants have an interest only in their benefit level as correctly determined under the law, rather than in any particular preordained amount. See Charles A. Reich, The New Property, 73 Yale L.J. 733 (1964). Thus, while any deprivation of property by the Government implicates the Due Process Clause, only a breach resulting in denial or inadequate allocation of benefits effects a deprivation subject to constitutional constraint. It is the breach, and not the reduction per se, that causes the deprivation.
Keeping this point in mind, it is readily apparent that the Supreme Court’s application of the Due Process Clause to governmental administrative action has not only encompassed, but indeed has been premised upon, the need for protection of individual property interests against even inadvertent breaches by the Government. See, e.g., Memphis Light, Gas & Water
In the veterans’ uniquely claimant friendly system of awarding compensation, breaches of the duty to assist are at the heart of due process analysis. If the Constitution provides no protection against the occurrence of such breaches, then the paternalistic interest in protecting the veteran is an illusory and meaningless assurance. The fact that breaches inevitably occur in the administration of any bureaucracy requires the conclusion that when the Secretary administers a property entitlement program, he or she has a constitutional obligation to provide due process before implementing adverse changes in the entitlement level. Otherwise, erroneous reductions or denials of benefits — that is, deprivations of individual property — are effected without due process of law.
C.
Because the breaches in these cases cannot merely be overlooked, I turn to the central constitutional inquiry: what process was due in light of “the practicalities and peculiarities of the case”? Mullane v. Central Hanover Bank & Trust Co.,
When reviewing alleged procedural due process violations, the Supreme Court has distinguished between (1) claims based on established state procedures and (2) claims based on random, unauthorized acts by state employees. See Daniels v. Williams,
1. Importance of the Private Interest
The importance of the correct level of veterans’ benefits to eligible veterans cannot be overstated. No form of new property is more clearly earned by an applicant or recipient, who received this claim of entitlement to benefits in exchange for service given to his or her country: award through the VA claims procedure is the sole process available to the veteran. He or she cannot sue for disabilities stemming from military service under the Federal Tort Claims Act. See Feres v. United States,
2. Risk of Error and Value of Additional Procedures
“[A] primary function of legal process is to minimize the risk of erroneous decisions.” Mackey v. Montrym,
The likelihood of error due to ineffective decision notices by the VA is substantial. The General Accounting Office (“GAO”) found that:
[In] over 60 percent (539) of the 898 compensation notices reviewed, insufficient information was found to have been provided on the reason or reasons for VA’s decision. GAO found that “Denial notices for compensation claims were especially poor. They often stated only that the claims were denied because service connection was not found.”
The importance of this information can be seen in the circumstances of Cook and Hayre where the vital failure of effective notice was misleading enough to jeopardize their rights to appeal. Although “Hayre was afforded notice of the RO decision,” ante, at 1341, the notice misleadingly assured Hayre that “we do not find in your medical records or elsewhere any evidence of the existence of a nervous condition” without obtaining the service medical records Hayre had specifically requested, ante, at 1337. Notice that affirmatively misleads in this fashion clearly violates the constitutional guarantee of due process. For Cook, the notice denying service connection for “stomach trouble and nervousness” stated that the “[neuropsychiatric] examination revealed no evidence of a psychiatric disability,” even though the VA compensation examination in 1952 noted:
The present day idea is, generally, that a peptic ulcer may be a visceral expression of long continued anxiety. In this case, a diagnosis of duodenal ulcer has been established. A dual diagnosis should not be made, but it should be clear that the diagnosis of duodenal ulcer inculdes [sic] a psychic or emotional component.
Ante, at 1347. The denial notice given to Cook did not clearly indicate that the neu-ropsychiatric report had evidence of a “psychic or emotional component.” Although the record does not státe whether Cook was aware of the contents of the report before the appeals period had run, it was important for Cook, who was relying on the pro-claimant benefits system, to be notified of what evidence was considered by the VA and how the evidence was used in reaching a decision. Without such knowledge, Cook was not in a position to evaluate its accuracy or propriety and to determine whether or not to contest it. The obvious value of notice of those simple factual determinations is that they were the only data that would have enabled Cook to “choose for himself whether to ... acquiesce or contest” by filing a timely appeal. Mullane,
This is especially true in the circumstances of Cook and Hayre, who relied on the non-adversarial and pro-claimant character of the veterans’ benefits system and pursued their statutory entitlements without the assistance of legal counsel. See 38 U.S.C. § 5904(c)(1) (prohibiting fee agreements with an attorney until the Board issues a final decision); Jaguay v. Principi,
In light of the complexity of the substance and procedures involved in these proceedings, as well as the importance of the interest at stake, I believe that Due Process includes minimal protections for the property interests of unrepresented veterans. When a veteran is not represented by counsel, the Secretary has a heightened duty to assist veterans by conscientiously developing and obtaining all the relevant evidence. The Secretary must be especially diligent in ensuring that favorable as well as unfavorable facts and circumstances are elicited. In addition, when a veteran’s service medical records are not obtained, as in Hayre, the VA’s duty to assist is essential, because “the veteran’s possession of service medical records is a decidedly abnormal, situation. The veteran cannot reasonably be expected to have such records.” Department of Veterans Benefits, Veterans Administration, DVB Circular 21-88-5, Procedures for Claims Involving Delayed Receipt of Service Medical Records (Mar. 18, 1988); see also VA Veterans Benefits Administration Letter 20-99-60 at 1 (Aug. 30, 1999) (“Service medical records and VA medical center records are to be requested in all cases. These are records considered to be in VA custody.”).
Moreover, where so much of the evidence in VA adjudications is circumstantial at best, the results of a medical examination for a veteran such as Cook, are often the determinative factor in the claim adjudication process. An insufficient examination also breaches the VA’s duty to assist the veteran in fully developing his or her claim because such evidence is needed to determine whether the veteran is eligible for benefits and the amount of any such benefits. Therefore, administering an inadequate medical exam has as important an effect on the proper resolution of a veteran’s claim as a failure to inform the veteran that the VA was unable to obtain medical records. A veteran must rely upon the VA for a thorough medical examination just as he or she must rely upon the department to locate service medical records. Just as a veteran must be able to assume, absent notice to the contrary, that the VA located and based its claim determination on the requested, complete, and adequate medical records, he or she should be able to assume that the VA performed a complete and thorough medical examination. Because the breach of the duty to assist in this uniquely pro-claimant system jeopardized in a fundamentally unfair manner the right to appeal, the claims of Cook and Hayre should not become final for purposes of appeal.
3. Governmental Interest
In contrast, requiring notices accurately to state what evidence was considered by the VA and how the evidence was used in reaching a decision does not impose a significant financial or administrative burden on the Secretary. In determining the costs to support the veterans’ benefits system, Congress has already appropriated its resources with the presumption that statutory requirements will be upheld. Thus, requiring the Secretary to meet the duty to assist — by providing notices that are not affirmatively misleading and by administering complete and thorough medical exams — does not increase the expected administrative burden of providing eligible veterans with statutory entitlements. Moreover, Congress has evaluated the fi
In my view, regardless of the nature of the dispute between the sovereign and the citizen — whether it be a claim for social security benefits or veterans’ benefits asserted by a soldier who was disabled during service to his or her country — the citizen’s right to procedural due process is constitutionally protected. I am dismayed by the majority’s implication that breaches in the administration of veterans’ benefits programs may be ignored in determining what protection the Constitution provides. Such breaches all too often plague benefits programs designed to. aid veterans. If breaches that might be prevented inexpensively lie entirely outside the ambit of the Due Process Clause, then the non-adversarial and manifestly pro-claimant character of the veterans’ benefits system would be the cruelest of shams perpetrated upon our veterans.
I would reverse the judgment of the Court of Appeals for Veterans Claims.
. The majority addresses the dissenting opinion by stating that the Due Process Clause question was not briefed by the parties and by reemphasizing that Congress only provided two statutory exceptions to the rule of finality. Ante, at 1341 n. 9. However, courts may address a constitutional issue, which is not properly raised by the parties. See, e.g., Ernest H. Schopler, Annotation, What Issues Will the Supreme Court Consider, Though Not, or Not Properly, Raised by the Parties,