Error: Bad annotation destination
United States Court of Appeals for the Federal Circuit
05-7168
ELLIS C. SMITH,
Claimant-Appellee,
v.
R. JAMES NICHOLSON, Secretary of Veterans Affairs,
Respondent-Appellant.
Ronald L. Smith, Disabled American Veterans, of Washington, DC, argued for
claimant-appellee. Of counsel was Donald E. Purcell.
Claudia Burke, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, argued for respondent-
appellant. With her on the brief were Peter D. Keisler, Assistant Attorney General,
David M. Cohen, Director, and Brian M. Simkin, Assistant Director. Of counsel on the
brief were David J. Barrans, Deputy Assistant General Counsel, and Jamie L. Mueller,
Attorney, United States Department of Veterans Affairs, of Washington, DC.
Appealed from: United States Court of Appeals for Veterans Claims
Senior Judge Jonathan R. Steinberg
United States Court of Appeals for the Federal Circuit
05-7168
ELLIS C. SMITH,
Claimant-Appellee,
v.
R. JAMES NICHOLSON,
Secretary of Veterans Affairs,
Respondent-Appellant.
_____________________
DECIDED: June 19, 2006
_____________________
Before LOURIE, BRYSON, and GAJARSA, Circuit Judges.
LOURIE, Circuit Judge.
The Department of Veterans Affairs (the “DVA”) appeals from the decision of the
United States Court of Appeals for Veterans Claims (the “Veterans Court”) reversing in
part, vacating in part, and remanding the decision of the Board of Veterans’ Appeals
(the “Board”), holding, inter alia, that
38 C.F.R. § 4.25(b) and
38 C.F.R. § 4.87, DC 6260
require the assignment of dual ratings for bilateral tinnitus. Smith v. DVA,
19 Vet. App.
63 (2005). Because the Veterans Court erred in not deferring to the DVA’s
interpretation of its own regulations, we reverse and remand that portion of the court’s
decision. No other aspect of the court’s decision is on appeal.
BACKGROUND
Smith served on active duty in the U.S. Army from March 1966 to March 1969. A
report from an April 1995 VA audiological examination revealed that Smith had tinnitus.
In October 1995, a VA regional office (“RO”) found that Smith’s tinnitus was service
connected. However, the RO assigned a noncompensable disability rating to Smith’s
tinnitus because the evidence did not demonstrate that the tinnitus was “persistent” as
required by
38 C.F.R. § 4.87, DC 6260. In April 1999, the RO issued a supplemental
statement of the case reaffirming that Smith’s tinnitus was not persistent. Prior to June
10, 1999, DC 6260 (hereinafter “pre-1999 DC 6260”) provided for a 10% disability rating
for a veteran with tinnitus if the evidence demonstrated that the tinnitus was “persistent
as a symptom of head injury, concussion, or acoustic trauma.” On June 10, 1999, DC
6260 (hereinafter “post-1999 DC 6260”) was amended to provide a 10% disability rating
for tinnitus if the evidence demonstrated that the tinnitus was “recurrent.”
38 C.F.R. §
4.87, DC 6260 (2000).1 The requirement that tinnitus must be a “symptom of head
injury, concussion, or acoustic trauma” was deleted. Consequently, Smith appealed the
RO’s decision, asserting that his service-connected tinnitus should be evaluated under
the post-1999 DC 6260, which requires that his tinnitus be “recurrent,” rather than
“persistent.”
In a December 2000 decision, the Board considered Smith’s claim under both the
pre-1999 DC 6260 and the post-1999 DC 6260 regulations. With regard to pre-1999
DC 6260, the Board affirmed the RO’s decision that Smith’s tinnitus was not
1
In May 2003, DC 6260 was further revised to include “Note (2): Assign
only a single evaluation for recurrent tinnitus, whether the sound is perceived in one ear,
both ears, or in the head.”
38 C.F.R. § 4.87, DC 6260 (2004). This revision is not
applicable to this case because of its effective date.
05-7168 2
“persistent,” which the Board defined as “insistently repetitive, or continuous, tenacious,
or enduring.” Thus, the Board determined that Smith was not entitled to a 10% disability
rating prior to June 10, 1999. With regard to post-1999 DC 6260, the Board determined
that Smith’s tinnitus was “recurrent” and granted him a 10% disability rating, effective
June 10, 1999. Smith appealed from the Board’s decision, alleging that the evidence
demonstrated that his tinnitus was “persistent” under pre-1999 DC 6260 and that the
Board misinterpreted both pre-1999 and post-1999 DC 6260 by failing to award a
separate 10% disability rating for service-connected tinnitus in each ear.
On June 10, 2003, the Veterans Court reversed in part, vacated in part and
remanded the Board’s decision. Smith v. Principi,
17 Vet. App. 168 (2003). First, the
court reversed the Board’s conclusion that Smith’s tinnitus was not “persistent” as
required by pre-1999 DC 6260, concluding that the Board’s decision was “arbitrary,
capricious, and an abuse of discretion,” and remanded for assignment of a 10%
disability rating and determination of an appropriate effective date. Second, the court
vacated the portion of the Board’s decision that denied two disability ratings for Smith’s
service-connected tinnitus, one for each ear, and remanded for the Board to consider
whether a single 10% rating is appropriate for bilateral tinnitus under
38 C.F.R. §
4.25(b), which provides that “disabilities arising from a single disease entity . . . are to
be rated separately.”
Id.
The DVA moved without opposition to vacate the Veterans Court’s decision and
remand the case for further proceedings consistent with this court’s recent decision in
Wanner v. Principi,
370 F.3d 1124 (Fed. Cir. 2004). In Wanner, we had reversed a
Veterans Court’s decision, concluding that it lacked jurisdiction to review the content of
05-7168 3
a rating schedule. Because the Veterans Court in this case relied heavily on its
decision in Wanner, we reversed the court’s determination that it had jurisdiction in this
case and remanded for further proceedings consistent with our decision in Wanner.
Smith v. Principi,
108 Fed. Appx. 628 (Fed. Cir. 2004).
On remand, the Veterans Court first held that it had jurisdiction to review both the
Board’s interpretation of the term “persistent” in pre-1999 DC 6260 and whether §
4.25(b) permits dual ratings for tinnitus. The Veterans Court reasoned that its review of
regulations DC 6260 and § 4.25(b) did not involve evaluating the content of a rating
schedule, but rather an interpretation of language in the regulations, subject matter over
which the Veterans Court has jurisdiction. The Veterans Court then vacated the
Board’s decision with regard to the term “persistent” under pre-1999 DC 6260 and
remanded to the Board for an explanation of its interpretation of the term “persistent.”
With regard to the question whether pre-1999 and post-1999 DC 6260 permit dual
ratings for tinnitus, the court reversed the Board’s decision that DC 6260 did not
authorize the assignment of two 10% ratings for bilateral tinnitus and determined that
regulations § 4.25(b) and DC 6260 required such dual ratings for bilateral tinnitus. The
Veterans Court observed that the DVA’s interpretation of its regulations, DC 6260 and
§ 4.25(b), conflicted with their plain meaning. The Veterans Court noted that DC 6260
lists tinnitus as a “disease of the ear” and that § 4.25(b) provides for a separate rating
for each service-connected disability arising from a single disease, unless otherwise
provided. Thus, the Veterans Court determined that a “plain reading” of those
regulations taken together results in a “rating of 10% for each ear affected by a single
case of tinnitus.” Smith v. DVA, 19 Vet. App. at 75. The Veterans Court then
05-7168 4
remanded for the Board to consider whether Smith had bilateral tinnitus, and, if so, for
assignment of a dual rating.
The DVA timely appealed the Veterans Court’s decision regarding whether the
regulations permit a dual rating for bilateral tinnitus, and, as we explain below, we have
jurisdiction pursuant to
38 U.S.C. § 7292(a).
DISCUSSION
The scope of our review of a Veterans Court’s decision is limited by statute.
38
U.S.C. § 7292. Under § 7292(a), we may review a decision by the Veterans Court with
respect to the validity of “any statute or regulation . . . of any interpretation thereof (other
than a determination as to a factual matter) that was relied on by the [Veterans] Court in
making the decision.” This appeal involves the Veterans Court’s interpretation of certain
DVA regulations, and therefore we normally would have jurisdiction to consider that
interpretation under § 7292(a). We review interpretation of regulations by the Veterans
Court de novo and may set aside any regulation or interpretation of a regulation that we
find to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law; contrary to a constitutional right, power, privilege, or immunity; in excess of
statutory jurisdiction, authority, or limitations, or in violation of a statutory right; or
without observation of a procedure required by law. 38 U.S.C. 7292(d)(1); Wanner,
370
F.3d at 1128.
As an initial matter, however, we must consider whether we have jurisdiction to
hear this appeal at this time. We conclude that we do and agree with the DVA that,
even though the Veterans Court remanded the case to the Board, we have jurisdiction
over this appeal under the principles set forth in Williams v. Principi,
275 F.3d 1361
05-7168 5
(Fed. Cir. 2002).2 Generally, we do not have jurisdiction to review non-final judgments.
Adams v. Principi,
256 F.3d 1318, 1320 (Fed. Cir. 2001). We have determined that a
remand order from the Veterans Court is not considered a final judgment and hence is
usually not appealable.
Id. In Williams, however, we set forth an exception to the
general rule that non-final decisions are not reviewable. As we explained in Williams:
We will depart from the strict rule of finality when the Court of Appeals for
Veterans Claims has remanded for further proceedings only if three
conditions are satisfied: (1) there must have been a clear and final
decision of a legal issue that (a) is separate from the remand proceedings,
(b) will directly govern the remand proceedings or, (c) if reversed by this
court, would render the remand proceedings unnecessary; (2) the
resolution of the legal issues must adversely affect the party seeking
review; and, (3) there must be a substantial risk that the decision would
not survive a remand, i.e., that the remand proceeding may moot the
issue.
275 F.3d at 1364 (footnotes omitted).
With regard to the first condition, the Veterans Court interpreted regulations
§ 4.25(b) and DC 6260, concluding that they require a dual rating for bilateral tinnitus,
and remanding to determine if Smith has bilateral tinnitus. Thus, a clear final decision
was rendered on a legal issue—the interpretation of the regulations—and that
interpretation will directly govern the remand proceedings. In addition, our reversal of
that interpretation would render the remand order unnecessary because, if we
determine that the DVA’s interpretation is correct and that the regulations provide for a
single 10% disability rating for tinnitus, then determining whether Smith’s tinnitus is
bilateral will be irrelevant, as he will not be entitled to a rating greater than 10%. With
regard to the second condition, the interpretation of regulations § 4.25(b) and DC 6260
by the Veterans Court adversely affects the party seeking review, the DVA, because the
2
Smith does not in fact dispute that we have jurisdiction under Williams.
05-7168 6
court’s interpretation requires the DVA to issue a disability rating for bilateral tinnitus
contrary to its interpretation of the regulations. Finally, as for the third condition, the
remand proceeding, if not appealed now, would moot the legal issue because, if the
Board on remand applied the Veterans Court’s interpretation of regulations § 4.25(b)
and DC 6260 and granted Smith the benefit he seeks under that interpretation, the DVA
would be precluded from appealing that action. See
38 U.S.C. § 7252(a) (providing that
the Veterans Court “shall have exclusive jurisdiction to review decision of the Board of
Veterans’ Appeals. The Secretary may not seek review of any such decision.”).
Accordingly, we conclude that we have jurisdiction to review the decision of the
Veterans Court under Williams.
Turning to the merits of the appeal, this case presents an issue with
consequences well beyond this case—whether the Veterans Court correctly interpreted
DVA regulations DC 6260 and § 4.25(b) to require dual (separate) 10% ratings for
bilateral tinnitus. We understand that many appeals are pending, and have been
stayed, that will likely be governed by our decision.
The DVA asserts that the Veterans Court’s interpretation contradicts the DVA’s
interpretation of its own regulations, and that the Veterans Court erred by not deferring
to the DVA’s interpretation of its own regulations. The DVA contends that it has
interpreted § 4.25(b) and DC 6260 to permit a single rating for tinnitus, irrespective of
whether the disease affects both ears, and that it has been the standard practice of the
DVA to award a veteran with bilateral tinnitus a single disability rating under DC 6260.
According to the DVA, its interpretation of those regulations is a reasonable one as it is
supported by medical evidence and is embodied in numerous public documents. The
05-7168 7
DVA asserts that the regulations do not clearly address whether a veteran is entitled to
two separate ratings for bilateral tinnitus, and that its own interpretation of the
regulations is not inconsistent with the regulation. Because the DVA’s interpretation of
its own regulations is not plainly inconsistent with the regulations, the DVA contends
that its interpretation is entitled to substantial deference by the Veterans Court. Finally,
the DVA observes that the addition of Note 2 to DC 6260 was not a substantive change
to the regulation; in fact, it reflects the DVA’s past practice of awarding a single rating
for bilateral tinnitus.
Smith responds that the Veterans Court correctly determined that the plain
meaning of the regulations entitles him to two separate disability ratings for service-
connected tinnitus affecting both ears. According to Smith, DC 6260 refers to tinnitus
as a “disease of the ear.” Accordingly, if the disease, i.e., tinnitus, results in a disability
in both ears, then the plain language of § 4.25(b) entitles the veteran to two separate
10% ratings. In addition, if the DVA intended to provide for one rating for a disease with
two disabilities, it would do so expressly in a regulation. Smith also responds that the
Veterans Court was correct in not deferring to the DVA’s interpretation of its regulation
because that interpretation is inconsistent with the regulation’s plain meaning.
Moreover, Smith observes that the DVA’s interpretation of its own regulations is found
only in unpublished opinions or litigating documents, which are not entitled to deference.
According to Smith, the DVA did not publish its interpretation of DC 6260 until it added
Note 2 to DC 6260 in 2003, and that interpretation cannot be applied retroactively.
05-7168 8
We agree with the DVA that the Veterans Court erred by not deferring to the
DVA’s interpretation of its own regulations. At issue is the interpretation of language in
regulations, not statutes. The relevant regulations are as follows:
§ 4.25 Combined ratings table.
(b) Except as otherwise provided in this schedule, the disabilities
arising from a single disease entity, e.g., arthritis, multiple sclerosis,
cerebrovascular accident, etc., are to be rated separately as are all other
disabling conditions, if any. All disabilities are then to be combined as
described in paragraph (a) of this section.
38 C.F.R. § 4.25(b) (emphasis added).
§ 4.87 Schedule of ratings--ear.
DISEASES OF THE EAR Rating
6260 Tinnitus:
Persistent as a symptom of head injury, concussion
or acoustic trauma………………………………………10
Effective from June 10, 1999, the DVA amended 6260 to provide:
6260 Tinnitus, recurrent………………………………………...10
38 C.F.R. § 4.87, DC 6269 (2000).
The Supreme Court has held that an agency’s interpretation of its own
regulations is entitled to substantial deference by the courts. See United States v.
Cleveland Indians Baseball Co.,
532 U.S. 200 (2001); Auer v. Robbins,
519 U.S. 452,
461-62 (1997); Thomas Jefferson Univ. v. Shalala,
512 U.S. 504, 512 (1994); Martin v.
Occupational Safety & Health Review Comm’n,
499 U.S. 144, 151 (1991); Udall v.
Tallman,
380 U.S. 1, 16 (1965). As the Court has further recognized, when a court is
interpreting an administrative regulation, it “must necessarily look to the administrative
construction of the regulation if the meaning of the words used is in doubt.” Bowles v.
05-7168 9
Seminole Rock & Sand Co.,
325 U.S. 410, 414 (1945). The administrative construction
becomes “of controlling weight unless it is plainly erroneous or inconsistent with the
regulation.”
Id. In addition, such deference is afforded to an agency’s interpretation of
its own regulations even when that interpretation is offered in informal rulings such as in
a litigating document. Auer,
519 U.S. at 461; Cathedral Candle Co. v. U.S. Int’l Trade
Comm’n,
400 F.3d 1353, 1363-64 (Fed. Cir. 2005); Am. Express Co. v. United States,
262 F.3d 1376, 1382-83 (Fed. Cir. 2001).
Applying those principles to this case, we conclude that the Veterans Court erred
in not deferring to the DVA’s interpretation of its own regulations, § 4.25(b) and DC
6260, which limits a veteran to a single disability rating for tinnitus, regardless whether
the tinnitus is unilateral or bilateral. First, we consider whether the language of the
regulations § 4.25(b) and DC 6260 leaves “in doubt” whether tinnitus in each ear
constitutes separate disabilities. We conclude that it does. Section 4.25(b) provides
that “[e]xcept as otherwise provided in this schedule, the disabilities arising from a
single disease entity . . . are to be rated separately as are all other disabling conditions,
if any.”
38 C.F.R. § 4.25(b). Thus, § 4.25(b) is a general rule requiring separate
disability ratings for each disability arising from a single disease. The question here is
whether tinnitus in both ears constitutes separate disabilities. The Veterans Court
observed that under DC 6260, tinnitus is listed as a disease of the ear, implicating §
4.25(b), which also uses the term “disease.” But, while tinnitus is listed under the
heading “diseases of the ear,” DC 6260 does not address whether tinnitus, as perceived
in one ear, two ears, or otherwise, is a single disability. The plain language of
regulations § 4.25(b) and DC 6260 clearly does not resolve that question.
05-7168 10
The Veterans Court determined that the meaning of the regulations is clear,
leaving no doubt that dual ratings for bilateral tinnitus are required under the
regulations. We do not agree with the Veterans Court’s analysis. According to the
Veterans Court, “nothing in the rating schedule limits a veteran with tinnitus in both ears
to only one rating”; the court thus concluded that the “plain reading and application of §
4.25(b) and DC 6260 results in a rating of 10% for each ear affected by a single case of
tinnitus.” Smith v. DVA, 19 Vet. App. at 75. As the DVA observed, however, the
Veterans Court necessarily presumed that tinnitus in one ear constitutes one disability,
and that tinnitus in two ears constitutes two disabilities. Without such an assumption,
however, which the DVA has reasonably rejected as not supported by the text of the
regulations, the plain language of the regulations still leaves the pertinent inquiry
unresolved and does not compel the conclusion that tinnitus in two ears constitutes two
disabilities. Because the regulations here leave in doubt whether tinnitus in each ear
can be a separate disability, they are ambiguous, and the DVA was entitled to apply its
own construction to the ambiguous regulations.
Having concluded that the regulations leave the pertinent inquiry unresolved,
deference must be afforded to the DVA’s interpretation as long as that interpretation is
not “plainly erroneous or inconsistent with the regulations.” Thus, we must also
consider whether the DVA’s interpretation of the regulations—that tinnitus in both ears
is one disability—is “plainly erroneous or inconsistent with the regulations”; we
determine that it is not. The DVA argues that its interpretation that tinnitus constitutes
both a disease and a disability is founded upon its analysis of medical principles.
Although we do not evaluate those principles, there is a lack of evidence in the record
05-7168 11
that the DVA’s interpretation is plainly erroneous. The DVA’s interpretation is also not
inconsistent with the regulations, as the regulations do not address whether tinnitus is
one disability.
There is also “no reason to suspect that the interpretation does not reflect the
agency’s fair and considered judgment on the matter in question” and it is entitled to
deference. Auer,
519 U.S. at 462. Smith argues that the DVA’s interpretation is
expressed in unpublished statements or in litigating positions, neither of which gives
notice to the public or is entitled to deference. We disagree. First, the DVA has
consistently interpreted the regulations to allow a maximum 10% disability rating for
tinnitus, and that interpretation is reflected in various public documents. See e.g.,
Cromley v. Brown,
7 Vet. App. 376, 378 (1995) (“As the Board noted, the appellant is
already rated at 10%, the highest level possible under the regulations for tinnitus.”);
Wanner, 17 Vet. App. at 9 (quoting the Board’s statement that its 10% disability rating to
a veteran “remains the maximum disability rating available under [DC 6260]”);
VAOPGCPREC 2-2003 (“Diagnostic Code 6260 (currently codified at
38 C.F.R. § 4.87),
as in effect prior to June 10, 1999 . . . authorized a single 10% disability rating for
tinnitus, regardless of whether tinnitus is perceived as unilateral, bilateral, or in the
head.”);
67 Fed. Reg. 59,033 (Sept. 19, 2002) (stating, in connection with the proposed
addition of Note 2, that the amendment making explicit that tinnitus receives a single
evaluation, “whether the sound is perceived in one ear, both ears, or in the head”
involves “no substantive change and is consistent with current practice”).3
3
Board decisions that reflect the DVA’s interpretation of DC 6260 and §
4.25(b) as authorizing a maximum 10% rating for tinnitus are publicly available through
the Board’s internet decision database. See e.g., Citation No. 9630919, Docket No. 95-
05-7168 12
Second, and more importantly, even if the DVA’s interpretation were not reflected
in published documents and was only reflected in litigating documents, that would still
not be a basis for declining to defer to the agency’s interpretation of its own regulation.
In Auer, the Supreme Court afforded deference to an agency’s interpretation of its
regulations even when that interpretation was first expressed in an amicus brief to the
Court.
519 U.S. at 461. Contrary to Chevron deference, which applies to an agency’s
interpretation of a statute and generally requires relatively formal administrative
procedures such as notice and comment rulemaking or formal adjudication, an agency’s
interpretation of its regulations does not require observance of those formalities in order
to be afforded deference. Thus, the Veterans Court erred in not deferring to the DVA’s
interpretation of its own regulations.
CONCLUSION
Because the Veterans Court erred in not deferring to the agency’s reasonable
interpretation of its own regulations, we reverse the decision of the Veterans Court and
remand for proceedings consistent with our decision.
REVERSED AND REMANDED.
09 946 (Oct. 30, 1996); Docket No. 93-22 991 (Sept. 15, 1999); Citation No. 9932638,
Docket No. 95-27 246 (Nov. 18, 1999).
05-7168 13
