REGINA M. PIRKL, Clаimant-Appellant v. ROBERT WILKIE, SECRETARY OF VETERANS AFFAIRS, Respondent-Appellee
2017-1916
United States Court of Appeals for the Federal Circuit
October 17, 2018
Appeal from the United States Court of Appeals for Veterans Claims in No. 14-4303, Senior Judge Lawrence B. Hagel.
KENNETH M. CARPENTER, Law Offices of Carpenter Chartered, Topeka, KS, argued for claimant-appellant.
JOHN JACOB TODOR, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for respondent-appellee. Also represented by MARTIN F. HOCKEY, JR., ROBERT EDWARD KIRSCHMAN, JR., CHAD A. READLER; MEGHAN ALPHONSO, BRIAN D. GRIFFIN, Office of General Counsel, United States Department of Veterans Affairs, Washington, DC.
Before REYNA, TARANTO, and CHEN, Circuit Judges.
This case returns to us from a decision of the Court of Appeals for Veterans Claims rendered on remand from our decision in Pirkl v. Shinseki, 718 F.3d 1379 (Fed. Cir. 2013) (Pirkl I), where we addressed the remedy required for a clear and unmistakable error in a disability rating decision long ago. We now reverse the Veterans Court‘s decision. We conclude that the Veterans Court mistakenly interpreted a key regulation and took too constrained a view of the legally required corrective remedy for the undisputed rating decision error. We remand for further proceedings to conduct the inquiry needed to give the required remedy.
I
A
Robert Pirkl, the late husband of appellant Regina Pirkl, served in the United States Navy between 1947 and 1949. He filed a claim in 1950 with the Veterans Administration (now the Department of Veterans Affairs, both “VA“), seeking disability benefits based on a service-connected psychiatric condition. The VA awarded him benefits, assigning him a low disability rating. Subsequently, based on changed circumstances, the VA assigned him a 100% disability rating effective September 30, 1952. Pirkl I, 718 F.3d at 1380.
There followed a series of new VA decisions over the years that adopted lower disability ratings for
B
In December 2001, Mr. Pirkl filed a motion under
The VA addressed the 1966 decision first—without waiting for a decision on whether there was CUE in the 1953 or 1956 rating decisions that together produced the 50%-rating starting point for thе
The VA regional office then took up the claim of CUE in the rating-reduction decisions of September 1953 (from 100% to 70%) and Decеmber 1956 (from 70% to 50%). In February 2005, it determined that Mr. Pirkl had not shown CUE in either decision. In October 2005, Mr. Pirkl filed a Notice of Disagreement with the February 2005 ruling, and in May 2006, he appealed to the Board. In both instances, according to the later descriptions by the Veterans Court and the Board, he referred only to the portion of the regional office‘s ruling that found no CUE in the 1953 rating decision. He did not separately challenge the portion that found no CUE in the 1956 rating decision. See Pirkl I, 718 F.3d at 1381.
In August 2006, the Board concluded that Mr. Pirkl was right in his claim of CUE in the September 1953 rating decision that reduced his disability rating from 100% to 70%. It determined that the VA in 1953 had failed to comply with
Total disability ratings . . . , when warranted by the severity of the condition, and not granted purely because of hospitalization or home treatment, . . . will not be reduced, in the absence of clear error, without physical examination showing material improvement in physical condition. Ex-amination 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, i.e., while actually at work, or whether the symptoms have been brought under control by prolonged rest, or generally, by following a regimen which precludes work, and if the latter, reduction from total disability rating will not be considered pending reexamination after a period of employment (three to six months).
The Board found “undebatable error in the application of
There followed a series of rulings about implementation of the Board‘s 2006 determination of CUE in the 1953 decision. Those rulings gave rise to the issues that this court addressed in 2013 and addresses again now.
1
Ten days after the Board‘s CUE ruling in 2006, the regional office awarded Mr. Pirkl a 100% disability rating from September 30, 1952, to February 9, 1957, the effective date of the December 1956 decision that reduced his disability rating from 70% to 50%. The regional office treated the December 1956 and April 1966 decisions (the latter affirmed by the Board in 1967) as barring—even as part of the remedial implementation of the CUE ruling that reversed the 1953 reduction below 100%—consideration of any increase in Mr. Pirkl‘s disability rating beyond February 9, 1957. See J.A. 44 (“It is noted that the [Board] decision only addresses the issue of the evaluation assigned by the September 3, 1953, rating decision, and does not [a]ffect any of the rating decision[s] made subsequent to that date.“); Pirkl I, 718 F.3d at 1381.
On appeal to the Board, Mr. Pirkl argued that, because the Board awarded him a 100% disability rating as of September 30, 1952, the regulation on reductions of 100% ratings should have governеd in 1956 and 1966, but the VA had not afforded him the regulation‘s protections in those years. The failure to apply the regulation in those years is hardly surprising: in both those years, Mr. Pirkl began the disability rating re-assessment with less than a 100% rating, a premise for application of the regulation. The Board concluded, however, that the December 1956 and April 1966 decisions (the latter affirmed by the Board in 1967) were final as to the rating reductions and their effective dates and that it followed from such finality that the August 2006 Board CUE ruling as to the 1953 rating decision was properly implemented “by simply continuing the 100 percent evaluation until the next final rating reduction in December 1956, which was effective in February 9, 1957.” J.A. 92–93. For that reason, the Board dismissed Mr. Pirkl‘s appeal, and the Veterans Court subsequently affirmed, with Mrs. Pirkl substituted for her husband when he died. Pirkl I, 718 F.3d at 1381-82.
2
In Pirkl I, we vacated the Veterans Court‘s decision and remanded the case for further proceedings. We noted the Veterans
Specifically, we stressed the basic statutory standard for implementing a CUE ruling. “Under the statute, a finding of CUE in a prior decision must be implemented as if it had been made on the date of the prior decision.” Id. at 1384. We three times quoted the command of
We explained that, to give the 2006 CUE correction of the 1953 rating decision the “effect as if originally made in 1953,” the 1956 decision must be examined, not simply taken as prospectively controlling without examination. The key point was that “the Board‘s finding of CUE in the 1953 deсision changed the factual and legal background against which subsequent reductions were made“: in particular, when the Board found CUE in the 1953 decision, “the subsequent reduction of Mr. Pirkl‘s disability rating in 1956 became an effective reduction from a 100% total disability rating, not from a 70% disability rating” (which was the starting point for the actual 1956 rating decision). Id. at 1384. Yet the Board “failed to consider the effect of this change in implementing its finding of CUE.” Id. The question, in short, is whether and how the 1956 decision would have been different if the VA had started with a 100% disability rating, not the 70% disability rating that it actually (but, in retrospect, mistakenly) started with. But the Board did not ask that question.
Still more particularly, we emphasized the role of the regulation governing reductions of 100% disability ratings.
3
On remand, the Board again dismissed Mrs. Pirkl‘s appeal of the regional office‘s decision not to give relief for the 1953 CUE past the effective date of the 1956 rating reduction. The Board stressed the absence of separate, preserved claims of CUE in the 1956 and 1966 decisions (the latter affirmed by the Board in 1967). It also went on to conclude that the regulation governing VA decisions that reduce 100% disability ratings did not apply to Mr. Pirkl in 1956 and 1966. Specifically, it relied on this court‘s decision in Reizenstein v. Shinseki, 583 F.3d 1331 (Fed. Cir. 2009), to conclude that the regulation applies only when the VA considers reducing a rating at a time when the claimant was actually receiving benefits under a 100% disability rating, not when a claimant was, like Mr. Pirkl, legally entitled to benefits under a 100% disability rating but was not receiving them because of clear and unmistakable VA error. The Board held that the regulation did not have to be applied in the 1956 and 1966 decisions because Mr. Pirkl “was never in receipt of a 100 percent rating during the time period being currently examined on appeal.” J.A. 138. Accordingly, the Board considered it “unnecessary to conduct an analysis of whether the ‘material improvement’ standard outlined in those regulatiоns was met at the time of the rating reductions in the December 1956 and April 1966 rating decisions.” Id.
Mrs. Pirkl appealed to the Veterans Court, which affirmed the Board‘s decision, substantially for the reasons stated by the Board as just summarized. She then timely appealed to this court. We have jurisdiction pursuant to
II
Under our decision in Pirkl I, and under
A
The language of Pirkl I is explicit that the remedy for the CUE in 1953, i.e., the implementation of the 2006 revision of the 1953 decision, which restored Mr. Pirkl‘s 100% disability rating, did not automatically stop at 1956 just because of the 1956 and 1966 rating decisions (the latter affirmed by the Board in 1967). We remanded for the Board to “consider in the first instance, and as part of the implementation of its CUE finding, whether the subsequent reductions of Mr. Pirkl‘s disability rating in 1956 and 1966 remain proper in view of the applicable regulations
B
We relied in Pirkl I on
The language of section 5109A(b) is one way of stating the fundamental principle of corrective remedies that is used throughout the law, though sometimes with modifications: “The injured party is to be placed, as near as may be, in the situation he would have occupied if the wrong had not been committed.” Wicker v. Hoppock, 73 U.S. 94, 99 (1867); see Missouri v. Jenkins, 515 U.S. 70, 87 (1995) (noting that “all remedies” are designed “to restore the victims of [wrongful] conduct to the position they would have occupied in the absence of such conduct“); see also, e.g., United States v. Virginia, 518 U.S. 515, 547 (1996); Milliken v. Bradley, 433 U.S. 267, 280–81 (1977); Albemarle Paper Co. v. Moody, 422 U.S. 405, 418–19 (1975) (quoting Wicker, 73 U.S. at 99); Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 187, 194 (1941); Kerr v. Nat‘l Endowment for the Arts, 726 F.2d 730, 733 (Fed. Cir. 1984) (“[T]he basic purpose of a reinstatement or back pay order is ‘restoration of the situation, as nearly as possible, to that which would have obtained but for the [wrongful conduct].‘” (quoting Phelps Dodge, 313 U.S. at 194)).
We see no basis for reading section 5109A(b) аs departing from that basic standard for a corrective remedy when the
C
The applicable legal standards, we hold, include the regulation governing reductions of 100% ratings.
We have already held that, “[w]hen the Board determined that the September 1953 decision contained CUE, Mr. Pirkl‘s disability rating was reset to 100% as of the date of the 1953 decision,” and “[t]his means that the subsequent reduction of Mr. Pirkl‘s disability rating in 1956 became an effective reduction from a 100% total disability rating, not from a 70% disability rating.” Pirkl I, 718 F.3d at 1384. Mr. Pirkl thus must be deemed to have had a “[t]otal disability rating[]” in 1956.
The government has no textual argument for a contrary conclusion. Rather, it points to this court‘s decision in Reizenstein v. Shinseki, 583 F.3d 1331 (Fed. Cir. 2009), and argues that Reizenstein‘s reasoning should lead us to conclude that the regulation did not apply to Mr. Pirkl as of 1956. We reject the argument.
In Reizenstein, the Board rendered a single decision that, looking back at the 10-year period of alleged disability at issue, adopted a “retrospectivе staged rating“: based on a finding of different degrees of disability during different segments of the past period at issue, the Board assigned ratings of 30%, 50%, 100%, and 30% for successive portions of the period. Id. at 1333. When Mr. Reizenstein argued to this court that the Board could not find a 30% disability after the period of 100% disability without complying with
That ruling does not apply here. In the “retrospective staged rating” situation that defined “the narrow issue” decided in Reizenstein, id. at 1334, the regulatory language did not supply an unambiguous answer, whereas it does here. The language of “reduc[ing]” a “total disability rating[]” based on “improvement” unambiguously covers the ordinary situation, like the one at issue in this case, in which the question is whether the rating assigned in one rating decision (100% on an open-ended prospective basis) is to be superseded
Indeed, in Reizenstein, we emphasized the government‘s contention that “the regulation was intended to be applied to existing ratings that are reduced on a prospective basis” and contrasted “the money awarded for a staged rating” as “compensation for a past period of disability and . . . independent of the veteran‘s entitlement to continuing benefits,” so that a veteran‘s receipt of an ongoing total-disability benefit (on which the veteran may depend) is not being cut off in the staged-rating situation. Id. at 1337 (emphases added). In the present case, as we explained in Pirkl I, the 2006 finding of CUE in the 1953 rating decision means that Mr. Pirkl is deemed to have had a continuing 100% disability rating when the 1956 process of VA re-assessment began. See 718 F.3d at 1384. As a result, the reduction adopted in 1956 was a prospective reduction of continuing benefits at the 100% level, thus coming within Reizenstein‘s own rationale for the regulation‘s scope and outside Reizenstein‘s rationale explaining why the Secretary‘s interpretation to exclude the staged-rating situation was reasonable. The fact that Mr. Pirkl was, because of the VA‘s error, not actually receiving the 100%-rating benefit in 1956 no more makes the regulation inapplicable to the 1956 decision to reduce his rating than it disentitles him to retroactive relief under the regulation for the period from 1953 to 1956. In those years, Mr. Pirkl was not actually receiving the 100%-rating benefits, because of the VA‘s error, yet the Board awarded relief for that period, and the government does not dispute the propriety of that relief.
Accordingly, contrary to the government‘s contention, the regulation was applicable to Mr. Pirkl‘s situation in 1956, and a reduction, to be lawful, had to meet the regulation‘s requirements.
D
In these circumstances, the remedial standard of section 5109A(b) requires the Board to determine, in this case, whether (and by how much) Mr. Pirkl‘s 100% rating would have been reduced in 1956 had the regulation for reductions of 100% ratings been applied then and, if the 100% rating remained after 1956, whether (and by how much) the 100% rating would have been reduced in 1966 had the regulation been applied then. The Board has not yet conducted the required remedial inquiry.
The VA did not apply the regulation at either time: after all, because of the incorrect 1953 decision, the re-assessments of disability in 1956 and 1966 did not actually present an occasion to apply the regulation, given that Mr. Pirkl entered the re-assessments in both of those years without a 100% disability rating. As a result, the VA has not specifically decided how the regulation applied in 1956 and 1966. Nevertheless, the records and findings in the VA decisions in those years may be relevant, and may even supply an answer, to the remedial question now presented. To give Mr. Pirkl the corrective remedy required by section 5109A(b), the Board must examine those records and findings to determine what ratings Mr. Pirkl would have had up through 1988 if thе clearly and unmistakably erroneous decision in 1953 had not been made and the applicable
We ruled in Pirkl I that the existence of the 1956 and 1966 rating decisions (the latter affirmed by the Board in 1967) does not itself block the case-specific inquiry required to give a proper remedy for the CUE in 1953. We held that the Board must “revisit these later findings and determine the extent to which the CUE finding changes the legal or factual basis of the later evaluations.” 718 F.3d at 1384 (citing
The government has not shown that Pirkl I is wrong in this respect. Most importantly, it has not pointed to any statutory provision that curtails the section 5109A(b) entitlement to receive corrective relief for CUE where the CUE (an incorrect rating) has propagated into later decisions, simply because rejections of distinct challenges to the later decisions are final. This entitlement is part of the statutory CUE exception to finality (here, the finality of the 1953 decision); it is not, as the government might be suggesting, some additional exception to finality, beyond those provided by
More generally, the government has not pointed to statutory, regulatory, or judicial authority establishing that, even before the resolution of the CUE challenge to the 1953 decision, Mr. Pirkl was required to challenge the 1956 and 1966 rating decisions not only on the grounds he did assert, but also on the ground that they started with inсorrect premises (too low a rating) because of the 1953 error separately being challenged, or establishing that Mr. Pirkl had to try to keep alive the separate CUE challenges to the 1956 and 1966 decisions while the CUE challenge to the 1953 decision was being considered.6 We
note that, in this matter, the
III
We therefore reverse the Veterans Court‘s decision and remand for that court to remand to the Board for further proceedings consistent with this opinion.
Costs awarded to Mrs. Pirkl.
REVERSED AND REMANDED
Notes
(a) General. Total disability ratings, when warranted by thе severity of the condition and not granted purely because of hospital, surgical, or home treatment, or individual unemployability will not be reduced, in the absence of clear error, without examination showing material improvement in physical or mental condition. Examination reports showing material improvement must be evaluated in conjunction with all the facts of record, and consideration must be given particu-
larly to whether the veteran attained improvement under the ordinary conditions of life, i.e., while working or actively seeking wоrk or whether the symptoms have been brought under control by prolonged rest, or generally, by following a regimen which precludes work, and, if the latter, reduction from total disability ratings will not be considered pending reexamination after a period of employment (3 to 6 months).Neither party here suggests that any language differences in the various versions of the regulation are material to this appeal.