George v. McDonough

Case: 19-1916 Document: 49 Page: 1 Filed: 03/16/2021
United States Court of Appeals
for the Federal Circuit
______________________
KEVIN R. GEORGE,
Claimant-Appellant
v.
DENIS MCDONOUGH, SECRETARY OF
VETERANS AFFAIRS,
Respondent-Appellee
______________________
2019-1916
______________________
Appeal from the United States Court of Appeals for
Veterans Claims in No. 16-2174, Chief Judge Margaret C.
Bartley, Judge Amanda L. Meredith, Senior Judge Robert
N. Davis.
-------------------------------------------------
MICHAEL B. MARTIN,
Claimant-Appellant
v.
DENIS MCDONOUGH, SECRETARY OF
VETERANS AFFAIRS,
Respondent-Appellee
______________________
2020-1134
______________________
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2 GEORGE v. MCDONOUGH
Appeal from the United States Court of Appeals for
Veterans Claims in No. 18-124, Chief Judge Margaret C.
Bartley.
______________________
Decided: March 16, 2021
______________________
KENNETH M. CARPENTER, Law Offices of Carpenter
Chartered, Topeka, KS, argued for claimant-appellant
Kevin R. George.
AMY F. ODOM, Chisholm Chisholm & Kilpatrick, Provi-
dence, RI, argued for claimant-appellant Michael B. Mar-
tin. Also represented by APRIL DONAHOWER, ZACHARY
STOLZ.
TANYA KOENIG, Commercial Litigation Branch, Civil
Division, United States Department of Justice, Washing-
ton, DC, argued for respondent-appellee. Also represented
by ERIC P. BRUSKIN, JEFFREY B. CLARK, MARTIN F. HOCKEY,
JR., ROBERT EDWARD KIRSCHMAN, JR.; BRIAN D. GRIFFIN,
ANDREW J. STEINBERG, Office of General Counsel, United
States Department of Veterans Affairs, Washington, DC.
______________________
Before LOURIE, CHEN, and STOLL, Circuit Judges.
CHEN, Circuit Judge.
Kevin R. George and Michael B. Martin (collectively,
Appellants) are military veterans whose respective claims
for disability benefits were denied several decades ago in
final decisions by the Department of Veterans Affairs (VA).
More recently, Appellants each filed a motion for revision
of those denial decisions, alleging that the VA in those de-
cisions had committed clear and unmistakable error
(CUE). The VA’s denials had been based in part on a
straightforward application of a then-existing regulation,
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GEORGE v. MCDONOUGH 3
38 C.F.R. § 3.304(b) (“Presumption of soundness”), that
was years later overturned. In Appellants’ view, the VA’s
reliance on a now-invalidated regulation in its denials of
Appellants’ original claims establishes CUE.
The United States Court of Appeals for Veterans
Claims (Veterans Court) affirmed the Board of Veterans’
Appeals’ (Board) denials of Appellants’ CUE motions, rea-
soning that the VA did not commit a clear and unmistaka-
ble legal error when it faithfully applied the version of the
presumption of soundness regulation that existed at the
time of the denials. Because Jordan v. Nicholson and Dis-
abled American Veterans v. Gober establish that a legal-
based CUE requires a misapplication of the law as it was
understood at that time, and cannot arise from a subse-
quent change in interpretation of law by the agency or ju-
diciary, we affirm. See Jordan v. Nicholson, 401 F.3d 1296(Fed. Cir. 2005); Disabled Am. Veterans v. Gober, 234 F.3d
682 (Fed. Cir. 2000) (DAV), overruled in part on other
grounds by Nat’l Org. of Veterans’ Advocates, Inc. v. Sec’y
of Veterans Affairs, 981 F.3d 1360, 1373 (Fed. Cir. 2020)
(en banc).
BACKGROUND
These companion appeals involve similar facts and le-
gal issues. Before discussing the details of each case, we
first address the statutory presumption of soundness at is-
sue in both appeals.
A. Statutory Presumption of Soundness
The statutory presumption of soundness recites:
[E]very veteran shall be taken to have been in
sound condition when examined, accepted, and en-
rolled for service, except as to defects, infirmities,
or disorders noted at the time of the examination,
acceptance, and enrollment, or where clear and un-
mistakable evidence demonstrates that the injury
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4 GEORGE v. MCDONOUGH
or disease existed before acceptance and enrollment
and was not aggravated by such service.
38 U.S.C. § 311 (1970) (now codified as 38 U.S.C. § 1111)1
(emphasis added). Under this standard, a veteran is pre-
sumed to have been in sound condition at entry to service
as to disorders that are not identified on the veteran’s en-
trance medical examination. The presumption, however,
can be rebutted by “clear and unmistakable evidence” that
the disorder “existed before acceptance and enrollment and
was not aggravated by service.” Id.In 1970, the VA’s implementing regulation for § 1111
did not require clear and unmistakable evidence of lack of
aggravation by service for rebuttal. See 38 C.F.R.
§ 3.304(b) (1970). 2 In other words, for the VA to rebut the
presumption of soundness, the 1970 version of § 3.304(b)
required only clear and unmistakable evidence that the
disorder “existed prior [to service].” Id. This version of the
regulation prevailed until 2003, when the VA invalidated
the regulation for conflicting with the language of § 1111,
see VA Gen. Counsel Prec. 3–2003 (July 16, 2003) (2003
1 For ease of reference, we hereafter refer to the stat-
utory presumption of soundness as 38 U.S.C. § 1111.
2 Specifically, 38 C.F.R. § 3.304(b) (1970) stated:
The veteran will be considered to have been in
sound condition when examined, accepted and en-
rolled for service, except as to defects, infirmities,
or disorders noted at entrance into service, or
where clear and unmistakable (obvious or mani-
fest) evidence demonstrates that an injury or dis-
ease existed prior thereto. Only such conditions as
are recorded in examination reports are considered
as noted.
Id. (emphasis added). This language remained unchanged
from the time of Mr. Martin’s 1970 regional office decision
to Mr. George’s 1977 Board decision.
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GEORGE v. MCDONOUGH 5
OGC opinion), and subsequently amended the regulation
to require evidence of both preexisting condition and no ag-
gravation, see 70 Fed. Reg. 23,027, 23,028 (May 4, 2005).
We confirmed the correctness of the VA’s changed un-
derstanding of the statute in Wagner v. Principi, 370 F.3d
1089 (Fed. Cir. 2004). There, we began our statutory anal-
ysis by acknowledging that § 1111’s “rebuttal standard is
somewhat difficult to parse” and “on its face . . . appears to
be somewhat self-contradictory.” Id. at 1093. After a care-
ful examination of the statutory history, we determined
that Congress intended for the presumption of soundness
to apply “even when there was evidence of a preexisting
condition, [so long as] the government failed to show clear
and unmistakable evidence that the preexisting condition
was not aggravated” by service. Id. at 1096. Wagner thus
held that the VA must show “clear and unmistakable evi-
dence of both a preexisting condition and a lack of in-ser-
vice aggravation to overcome the presumption of
soundness.” Id.
B. Mr. George’s Appeal
Mr. George served in the U.S. Marine Corps from June
to September 1975. His medical entrance examination
made no mention of any psychiatric disorders. Yet, a week
after enlistment, Mr. George suffered a psychotic episode
requiring extended hospitalization and was diagnosed with
paranoid schizophrenia. Two months into his service, a
military medical board confirmed the schizophrenia diag-
nosis and found Mr. George unfit for duty. The medical
board determined that his condition had preexisted service
because he had experienced “auditory hallucinations, par-
anoid ideas of reference, and delusions” prior to enlistment.
J.A. 53–54. The medical board also determined that his
condition was aggravated by service, observing that he
“now appeared quite disturbed” and was “withdrawn [and]
tearful.” Id. At his time of discharge, however, a physical
evaluation board concluded that his condition was not
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6 GEORGE v. MCDONOUGH
aggravated by service, finding that Mr. George “essentially
appear[ed] in his preenlistment state” and that his schizo-
phrenia was “in remission.” J.A. 55.
In December 1975, Mr. George filed a disability bene-
fits claim, contending that his schizophrenia was aggra-
vated by service. The VA regional office (RO) denied his
claim for lack of service connection, which the Board af-
firmed in September 1977. While the Board did not specif-
ically cite the statutory presumption of soundness or the
implementing regulation, it concluded that his schizophre-
nia “existed prior to military service” and “was not aggra-
vated by his military service.” J.A. 60. Mr. George did not
appeal the Board’s decision, which became final.
Years later, in December 2014, Mr. George requested
revision of the 1977 Board decision based on CUE, assert-
ing that the Board had failed to correctly apply 38 U.S.C.
§ 1111. Mr. George argued that he had been improperly
denied the presumption of soundness because his “entrance
examination to service was negative for any preservice
mental disorder” and the record “[did] not clearly and un-
mistakably indicate that [his] schizophrenia was not ag-
gravated by service.” J.A. 66–67. If not for the 1977
Board’s purported failure to “rebut both prongs of the pre-
sumption,” Mr. George alleged that he would have been
granted service-connected benefits for schizophrenia. J.A.
67 (emphasis added).
The Board, in 2016, denied Mr. George’s request, find-
ing no CUE in the 1977 Board decision. Relevant to this
appeal, the Board observed that, as of 1977, 38 C.F.R.
§ 3.304(b) did “not require[] clear and unmistakable evi-
dence that the disability was not aggravated by service” to
rebut the presumption of soundness. J.A. 73. While ac-
knowledging that the 2003 OGC opinion and Wagner later
invalidated § 3.304(b) for conflicting with the statute, the
Board concluded that “judicial decisions that formulate
new interpretations of the law subsequent to a VA decision
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GEORGE v. MCDONOUGH 7
cannot be the basis of a valid CUE claim.” J.A. 74. Thus,
any purported failure by the 1977 Board to find that Mr.
George’s schizophrenia was not clearly and unmistakably
aggravated by service “cannot be considered to be CUE.”
Id. Mr. George appealed to the Veterans Court.
A divided panel of the Veterans Court affirmed, con-
cluding that Wagner’s interpretation of § 1111 could not
retroactively apply to establish CUE in the 1977 Board de-
cision. See George v. Wilkie, 30 Vet. App. 364, 373 (2019)
(“Wagner does not change how [§ 1111] was interpreted or
understood before it issued.”). Instead, citing this court’s
decisions in DAV and Jordan, the Veterans Court deter-
mined that the 1977 Board was required to apply the law
existing at the time, namely, the 1977 version of 38 C.F.R.
§ 3.304(b). Because that version of § 3.304(b) required only
clear and unmistakable evidence that an injury preexisted
service to rebut the presumption of soundness, the Veter-
ans Court concluded that the 1977 Board’s alleged failure
to also demonstrate clear and unmistakable evidence of no
aggravation did not constitute CUE. Id. at 374–75.
The Veterans Court next considered a trio of cases in-
volving a CUE claim filed by a widow, Mrs. Patrick, seek-
ing death and indemnity compensation benefits. See
Patrick v. Principi, 103 F. App’x 383 (Fed. Cir. 2004) (Pat-
rick I); Patrick v. Nicholson, 242 F. App’x 695 (Fed. Cir.
2007) (Patrick II); Patrick v. Shinseki, 668 F.3d 1325 (Fed.
Cir. 2011) (Patrick III). As relevant here, Patrick II con-
cluded that Wagner could form the basis for a CUE claim
attacking a final VA decision that had relied on the now-
invalidated version of § 3.304(b), because “[Wagner’s] inter-
pretation of § 1111 . . . did not change the law but ex-
plained what § 1111 had always meant.” Patrick II, 242 F.
App’x at 698.
The Veterans Court determined that it was not bound
by the Patrick cases, which contradicted the reasoning of
DAV and Jordan. George, 30 Vet. App. at 374–75. Patrick
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8 GEORGE v. MCDONOUGH
II, the main case supporting Mr. George’s position, was
nonprecedential and issued after DAV and Jordan, and
Patrick III, the only precedential opinion in this line of
cases, pertained to attorneys’ fees under the Equal Access
to Justice Act (EAJA) and did not directly address whether
Wagner supports a basis for CUE.
The Veterans Court also determined that permitting
retroactive application of Wagner’s statutory interpreta-
tion would contravene the law on finality of judgments.
While recognizing that “CUE is a statutorily permitted col-
lateral attack on final VA decisions,” the court observed
that “Mr. George’s appeal of the denial of benefits for schiz-
ophrenia was not open for direct review when Wagner was
decided,” and to hold that a judicial pronouncement of the
law retroactively applies to final decisions closed to direct
review would undermine long-standing principles of final-
ity and res judicata. George, 30 Vet. App. at 372–73, 376
(citing Harper v. Va. Dep’t of Taxation, 509 U.S. 86 (1993)
and James B. Beam Distilling Co. v. Georgia, 501 U.S. 529(1991)). CUE instead requires “the application of the law
as it was understood at the time of the [underlying] deci-
sion,” and such an application of law “does not become CUE
by virtue of a subsequent interpretation of the statute or
regulation.” George, 30 Vet. App. at 373. 3
3 The Veterans Court majority also concluded that
even assuming Wagner retroactively applies to support al-
legations of CUE in final VA decisions, Mr. George failed
to demonstrate that this alleged error, based on the evi-
dence extant in 1977, would have manifestly changed the
outcome of the 1977 Board’s decision to deny him benefits
for schizophrenia. George, 30 Vet. App. at 377–78. Because
we conclude that the error alleged is outside the scope of
CUE, as discussed infra, we need not reach this alternative
holding.
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GEORGE v. MCDONOUGH 9
A dissenting judge opined that Wagner merely pro-
vided an “authoritative statement” of what § 1111 has al-
ways meant and thus should not be understood as
implementing a “new understanding or interpretation” of
that statute. Id. at 379. The dissent further concluded that
the 1977 Board’s failure to abide by § 1111’s true meaning
“constituted an undebatable and outcome-determinative
misapplication of the law,” which is “precisely” the type of
error CUE was designed to remedy. Id. at 383.
C. Mr. Martin’s Appeal
Mr. Martin served in the U.S. Army from August 1965
to February 1966, and from June 1968 to August 1969. At
entry to service, Mr. Martin reported never having had
“asthma,” “shortness of breath,” or “hay fever,” J.A. 13, and
his medical examination reported his lungs and chest as
“normal,” J.A. 15. During his second period of service, in
November 1968, he sought treatment at an allergy clinic
for a stuffy nose, sneezing, itchy eyes, and nocturnal
wheezing. Contrary to his entrance examination, Mr. Mar-
tin reported a childhood history of asthma with similar
symptoms. A note from his personal physician, dated Jan-
uary 1969, confirmed that Mr. Martin had started treat-
ment for asthma as a child and had been “treated for this
problem intermittently since that time.” J.A. 10. A medi-
cal examiner diagnosed and treated Mr. Martin for “rhini-
tis and asthma, mixed infectious-allergic, with dust-mold
and ragweed sensitivity.” J.A. 11. By discharge, however,
his separation examination did not report any asthma or
related symptoms.
Shortly thereafter, in October 1969, Mr. Martin filed a
claim for service-connected disability benefits for asthma.
In support of his claim, Mr. Martin underwent a VA medi-
cal examination in December 1969, which noted that he
had “made a good adjustment” following in-service treat-
ment, but upon returning home after discharge, had expe-
rienced wheezing and shortness of breath during the
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10 GEORGE v. MCDONOUGH
ragweed season. J.A. 21. Mr. Martin was diagnosed with
“[a]sthma due to sensitivity of ragweed class.” J.A. 24.
The RO denied Mr. Martin’s claim in February 1970 for
lack of service connection. The RO found that following Mr.
Martin’s November 1968 treatment at the allergy clinic,
there was “no further showing of complaints relative to
asthma in service and [the] separation examination was
negative.” J.A. 26. While acknowledging that Mr. Martin
had reported asthma symptoms in his December 1969 med-
ical examination four months after service, the RO con-
cluded that: “In view of the pre-service history of asthma[,]
it is held that the solitary exacerbation in service with a
subsequent asymptomatic period of better than a year does
not establish aggravation.” J.A. 25–26. Mr. Martin did not
appeal the RO decision.
In July 2013, Mr. Martin requested revision of the 1970
RO decision based on CUE, contending that the RO had
failed to correctly apply “both” prongs of 38 U.S.C. § 1111.
J.A. 27–28. As with Mr. George’s case, the Board denied
the request, finding no CUE in the 1970 RO decision be-
cause the regulation in force at that time did not require
clear and unmistakable evidence of no aggravation. J.A.
39–40. Citing George, the Veterans Court affirmed the
Board’s decision:
The denial of service connection in George, like the
RO’s denial here, predated the Federal Circuit’s de-
cision in Wagner v. Principi . . . . George held that
Wagner does not apply retroactively to final deci-
sions and affirmed the Board’s finding that the VA
decision did not contain CUE. The Court must
reach the same conclusion here and affirm the
Board’s . . . finding that the February 1970 rating
decision does not contain CUE.
Martin v. Wilkie, No. 18-0124, 2019 WL 3449689, at *3
(Vet. App. July 31, 2019) (citations omitted).
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GEORGE v. MCDONOUGH 11
Both Mr. George and Mr. Martin timely appealed to
this court. We have jurisdiction under 38 U.S.C. § 7292.
DISCUSSION
Our jurisdiction to review decisions of the Veterans
Court is prescribed by statute. Scott v. Wilkie, 920 F.3d
1375, 1377–78 (Fed. Cir. 2019). We may “review and de-
cide any challenge to the validity of any statute or regula-
tion or any interpretation thereof” and “interpret
constitutional and statutory provisions, to the extent pre-
sented and necessary to a decision.” 38 U.S.C. § 7292(c).
We review claims of legal error in a decision of the Veterans
Court without deference. See Szemraj v. Principi, 357 F.3d
1370, 1374–75 (Fed. Cir. 2004).
A motion for revision based on “clear and unmistakable
error” is a statutorily authorized collateral attack on a final
decision of the Board or RO that, if successful, results in a
“reversed or revised” decision having “the same effect as if
[it] had been made on the date of the [original] decision.”
See 38 U.S.C. §§ 7111, 5109A. 4 In other words, a meritori-
ous CUE claimant may be entitled to benefits retroactive
to the date of the original claim. CUE, however, is a “very
specific and rare type of error,” Cook v. Principi, 318 F.3d
1334, 1345 (Fed. Cir. 2002) (en banc), and must be based
on “the record and the law that existed at the time of the
prior adjudication in question,” such that “[e]ither the cor-
rect facts, as they were known at the time, were not before
the adjudicator or the statutory or regulatory provisions ex-
tant at the time were incorrectly applied,” see Willsey v.
Peake, 535 F.3d 1368, 1371 (Fed. Cir. 2008) (emphases
added) (citing Russell v. Principi, 3 Vet. App. 310, 313–14
(1992) (en banc)). CUE must also be an “undebatable”
4 38 U.S.C. § 7111 governs CUE arising from a Board
decision whereas § 5109A governs CUE arising from an RO
decision.
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12 GEORGE v. MCDONOUGH
error that would have “manifestly changed the outcome at
the time it was made.” Willsey, 535 F.3d at 1371.
A
Appellants first contend that their CUE claims do not
seek to retroactively apply a changed interpretation of the
law and, instead, are simply premised on the VA’s pur-
ported failure to correctly apply the statute as written. Ap-
pellants assert that § 1111’s meaning is plain and
unambiguous, regardless of the VA’s contrary interpreta-
tion set forth at the time in § 3.304(b). Rather than estab-
lish a “new” interpretation of § 1111, Appellants argue that
Wagner “merely provided an authoritative statement of
what [§ 1111] had always meant,” including at the time of
Appellants’ respective VA decisions. See Martin Appel-
lant’s Br. 8 (internal quotation marks omitted) (citing Riv-
ers v. Roadway Exp., Inc., 551 U.S. 298, 313 n.12 (1994)).
This reasoning, Appellants contend, comports with our
nonprecedential decision in Patrick II, where we permitted
a CUE claim to proceed based on the argument that the VA
had “misapplied § 1111.” See Patrick II, 242 F. App’x at
698.
We disagree with Appellants’ argument because it
overlooks the significance of the VA’s regulation that ex-
isted at the time of the original decisions and fails to ac-
count for our caselaw. Jordan, in view of DAV, squarely
forecloses Appellants’ argument that Wagner’s later-in-
time interpretation of § 1111 can serve as the basis for
CUE. DAV upheld, over rulemaking challenge, the validity
of CUE regulation 38 C.F.R. § 20.1403(e), which expressly
states that CUE “does not include the otherwise correct ap-
plication of a statute or regulation where, subsequent to
the Board decision challenged, there has been a change in
the interpretation of the statute or regulation.” See DAV,
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GEORGE v. MCDONOUGH 13
234 F.3d at 695–98 (emphasis added). 5 In analyzing the
regulation’s specific carve-out of subsequent, changed in-
terpretations as a basis for CUE, we clarified that “[t]he
new interpretation of a statute can only retroactively
[a]ffect decisions still open on direct review, not those deci-
sions that are final.” Id. at 698. This limit on CUE, we
explained, is consistent with Congress’ intent that
“changes in the law subsequent to the original adjudica-
tion . . . do not provide a basis for revising a finally decided
case.” Id. at 697–98. DAV thus established that CUE must
be analyzed based on the law as it was understood at the
time of the original decision and cannot arise from a subse-
quent change in the law or interpretation thereof to attack
a final VA decision.
Jordan subsequently applied DAV’s understanding of
CUE to the statutory presumption of soundness. There, in
5 38 C.F.R § 20.1403 governs CUE in Board deci-
sions, whereas 38 C.F.R. § 3.105 governs CUE in RO deci-
sions. We note that in 2019, § 3.105 was amended to
include subsection (a)(1)(iv), which mirrors the language of
§ 20.1403(e). See VA Claims and Appeals Modernization,
84 Fed. Reg. 138 (Jan. 18, 2019) (final rule). In promulgat-
ing § 3.105(a)(1)(iv), the VA explained that “no substantive
changes [were] intended to the existing law governing re-
vision of final [RO] decision based on CUE,” see VA Claims
and Appeals Modernization, 83 Fed. Reg. 39,818, 39,820
(Aug. 10, 2018) (notice of proposed rulemaking), and the
purpose of the amendment was to “conform[]” the regula-
tion governing CUE in final RO decisions with the existing
regulation governing final Board decisions, 84 Fed. Reg. at
142. Mr. Martin acknowledges that the substance of
§ 3.105(a)(1)(iv) applies to his appeal, see Martin Appel-
lant’s Reply Br. 6 n.2, and makes no attempt to distinguish
DAV and Jordan based on the governing CUE regulation
(§ 20.1403 vs. § 3.105) or statute (§ 7111 vs. § 5109A).
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14 GEORGE v. MCDONOUGH
1983, the Board denied Mr. Jordan’s benefits claim for lack
of service connection under then-governing 38 C.F.R.
§ 3.304(b)—the same version of the regulation that was ap-
plied to Appellants’ original claims. See Jordan, 401 F.3d
at 1297. Mr. Jordan never appealed the Board’s decision,
which became final. Several years later, in 1999, Mr. Jor-
dan filed a CUE claim asserting that the 1983 Board had
“misinterpreted provisions in 38 U.S.C. § 1111.” Id. Like
Appellants, Mr. Jordan claimed that § 1111’s presumption
of soundness had not been rebutted because the 1983
Board had failed to establish that his preexisting condition
was not aggravated by service. The Board denied his CUE
claim, and Mr. Jordan then appealed to the Veterans
Court. While his Veterans Court appeal was pending, the
VA issued its 2003 OGC opinion invalidating 38 C.F.R.
§ 3.304(b) for conflicting with § 1111. Nevertheless, the
Veterans Court found no CUE because, as DAV held, CUE
“does not include the otherwise correct application of a
statute or regulation” where there has been a subsequent
“change in the interpretation of [that] statute or regula-
tion.” Id. On appeal before us, Mr. Jordan argued that
there was no subsequent change in interpretation because
38 C.F.R. § 3.304(b) was “void ab initio” for being contrary
to § 1111’s “facially apparent meaning.” Id. We rejected
that argument because “the accuracy of the regulation as
an interpretation of the governing legal standard does not
negate the fact that [§ 3.304(b)] did provide the first com-
mentary on section 1111, and was therefore the initial in-
terpretation of that statute,” which subsequently changed
with the issuance of the 2003 OGC opinion. Id.
Here, as in Jordan, Appellants’ argument that their
CUE claims are not premised on a “change in the law” fails
to appreciate that 38 C.F.R. § 3.304(b) provided the initial
interpretation of § 1111, regardless of any inaccuracies
subsequently reflected in Wagner. Section 3.304(b) estab-
lished the VA’s controlling interpretation of § 1111’s rebut-
tal standard at the time of Appellants’ VA decisions, and it
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GEORGE v. MCDONOUGH 15
would make little sense for the Board’s and RO’s “otherwise
correct application” of this then-binding regulation to con-
stitute adjudicative error, let alone CUE. See 38 C.F.R. §§
20.1403(e), 3.105(a)(1)(iv). Indeed, Appellants do not dis-
pute that VA adjudicators, at the time of their original
Board and RO decisions, were bound by § 3.304(b). See also
38 U.S.C. § 7104(c) (“The Board shall be bound in its deci-
sions by the regulations of the Department . . . .”). And
contrary to Appellants’ assertion that § 1111’s language is
plain and unambiguous, Wagner found the language of
§ 1111’s rebuttal standard “somewhat difficult to parse”
and “self-contradictory” “on its face.” See 370 F.3d at 1093.
That Wagner was the first judicial interpretation of
§ 1111 by this court does not lead to a contrary result. Jor-
dan does not differentiate between new agency interpreta-
tions and new judicial interpretations, and instead, refers
to both the 2003 OGC opinion and Wagner as evidence of a
change in interpretation of § 1111. See Jordan, 401 F.3d
at 1298. Jordan, moreover, determined that granting CUE
claims premised on a changed interpretation of law—
whether based on Wagner or the 2003 OGC opinion—would
fail to “give adequate weight to the finality of judgments,”
given that “[t]he Supreme Court has repeatedly denied at-
tempts to reopen final decisions in the face of new judicial
pronouncements.” Id. at 1299; see also DAV, 234 F.3d at
698 (concluding that new statutory interpretations cannot,
through a CUE motion, retroactively affect decisions that
are final). We thus cabined the reach of CUE motions to
exclude retroactive application of a new judicial or agency
pronouncement to a final VA decision on a benefits claim.
Even though Jordan precludes CUE claims based on
retroactively applying either our interpretation in Wagner
or the VA’s interpretation in the 2003 OGC opinion, Appel-
lants nonetheless urge us to follow the contrary reasoning
of the Patrick cases and hold that Wagner can serve as the
basis for their CUE claims. Specifically, Patrick II, in a
nonprecedential decision, distinguished Jordan as
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16 GEORGE v. MCDONOUGH
purportedly addressing only “whether a change in the reg-
ulatory interpretation of a statute had retroactive effect on
CUE claims, not whether our interpretation of the statute
in Wagner had retroactive effect on CUE claims.” See Pat-
rick II, 242 F. App’x at 698. Because Mrs. Patrick’s CUE
claim was premised on our interpretation of § 1111 in Wag-
ner, and not on the VA’s changed regulatory interpretation
of § 1111, Patrick II determined that Jordan’s “limited
holding” did not apply to bar Mrs. Patrick’s claim. Id. Sub-
sequently, Patrick III summarized Patrick II’s reasoning in
dicta and reversed the denial of Mrs. Patrick’s application
for EAJA fees, explaining that the lower court had failed to
consider “the fact that the government had adopted an in-
terpretation of [§ 1111] that was wholly unsupported by ei-
ther the plain language of the statute or its legislative
history” in assessing whether the government’s position
was substantially justified. See Patrick III, 668 F.3d at
1334.
We conclude, as the Veterans Court did, that we are
not bound by the Patrick cases to reach a holding contrary
to DAV and Jordan. Patrick II is a nonprecedential deci-
sion that issued after DAV and Jordan. Indeed, we ex-
pressly denied a motion to reissue Patrick II’s
nonprecedential decision as precedential. See Patrick v.
Shinseki, No. 06-7254 (Fed. Cir. Aug. 21, 2007), ECF No.
26. And Patrick III, though precedential, does not directly
address whether Wagner can serve as a basis for CUE.
While Patrick III summarizes Patrick II’s reasoning in the
background section and in a footnote, its description of Pat-
rick II in dicta does not elevate it to binding precedent. See
Fed. Cir. R. 32.1(d) (“The court . . . will not give one of its
own nonprecedential dispositions the effect of binding prec-
edent.”).
B
Appellants next argue that the Veterans Court miscon-
strued principles of finality and retroactivity in Supreme
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GEORGE v. MCDONOUGH 17
Court decisions, such as Harper and Beam. When properly
read, Appellants contend, these cases “support the retroac-
tive application of judicial pronouncements in cases that
are open to collateral attack,” Martin Appellant’s Br. 19,
or, if not, are otherwise “irrelevant” to their CUE claims
given Rivers’s pronouncement that a judicial construction
of a statute is an authoritative statement of what that stat-
ute has always meant, George Appellant’s Br. 22. We dis-
agree.
Nothing in these cases supports Appellants’ contention
that a new judicial pronouncement retroactively applies to
final decisions, even those subject to a collateral attack,
such as a request to revise a final Board or RO decision for
CUE. See Routen v. West, 142 F.3d 1434, 1437 (Fed. Cir.
1998) (explaining that “basic principles of finality and res
judicata apply to . . . agency decisions” that have not been
appealed and have become final). Instead, Harper adopted
a rule consistent with Beam that new judicial pronounce-
ments are to be given “full retroactive effect in all cases still
open on direct review” but not in final cases already closed.
See Harper, 509 U.S. at 96 (emphasis added); see also, e.g.,
Beam, 501 U.S. at 529 (“Retroactivity in civil cases must be
limited by the need for finality; once suit is barred by res
judicata . . . , a new rule cannot reopen the door already
closed.” (citation omitted)); Reynoldsville Casket Co. v.
Hyde, 514 U.S. 749, 758 (1995) (“New legal principles, even
when applied retroactively, do not apply to cases already
closed.”); DAV, 234 F.3d at 698 (“[t]he new interpretation
of a statute can only retroactively [a]ffect decisions still
open on direct review, not those decisions that are final,”
and is therefore not a basis for CUE); Jordan, 401 F.3d at
1299 (recognizing that “new judicial interpretations” of a
statute generally apply only to “pending cases”).
While Rivers states that “[a] judicial construction of a
statute is an authoritative statement of what the statute
meant before as well as after the decision of the case giving
rise to that construction,” 511 U.S. at 312–13, it never
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18 GEORGE v. MCDONOUGH
holds that judicial constructions of statutes should be ret-
roactively applied to final decisions, such as the VA deci-
sions at issue here. Instead, Rivers cites to Harper, which
expressly limits retroactivity of judicial decisions to pend-
ing “cases still open to direct review.” See id. at 312 (citing
Harper, 509 U.S. at 97). And DAV likewise cites Harper
for support in upholding the validity of 38 C.F.R.
§ 20.1403(e), which states that CUE does not arise from
“the correct application of the statute or regulation as it
was interpreted at the time of the decision.” DAV, 234 F.3d
at 697.
C
Our determination that Wagner cannot serve as the ba-
sis for Appellants’ CUE claims accords with the legislative
intent behind the CUE statutes, 38 U.S.C. §§ 7111 and
5109A. Neither statute addresses subsequent changes in
law, interpretations of law, or otherwise defines CUE. In-
stead, these statutes merely provide that a prior decision
shall be revised for CUE “[i]f evidence establishes the er-
ror.” See id. §§ 7111(a), 5109A(a). Upon revision, the stat-
utes then authorize retroactive benefits from the effective
date of the original decision. See id. §§ 7111(b), 5109A(b).
The statutory history, however, is more instructive.
Prior to their statutory enactment, CUE had been solely an
administrative practice governed by VA regulation for sev-
eral decades, dating back to 1928. DAV, 234 F.3d at 686.
Congress enacted §§ 7111 and 5109A in 1997 to “codify
[the] existing regulation[]” governing CUE in RO decisions
and extend those principles to Board decisions as well. See
H.R. Rep. No. 105–52, at 1 (1997). These statutes “made
no change in the substantive standards” governing CUE
and “merely codified the prior regulation” provided in 38
C.F.R. § 3.105, see Donovan v. West, 158 F.3d 1377, 1382
(Fed. Cir. 1998), and the Veterans Court’s “long standing
interpretation of CUE,” see Bustos v. West, 179 F.3d 1378,
1381 (Fed. Cir. 1999). We therefore look to the pre-codified
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GEORGE v. MCDONOUGH 19
version of § 3.105 and established CUE standards to un-
derstand Congress’ intent in enacting the CUE statutes.
As an initial matter, we observe that the VA’s CUE reg-
ulation predates the enactment of the Veterans’ Judicial
Review Act, Pub. L. No. 100-687, 102 Stat 4105 (1988),
which, for the first time, permitted judicial review of VA
decisions. Because § 3.105 predates judicial review, this
regulation and the VA’s administrative practice, before
1988, could not have contemplated CUE would arise from
a new judicial interpretation of a statute.
More importantly, as of the CUE doctrine’s statutory
codification in 1997, § 3.105’s preamble provided that revi-
sion of a final RO decision based on CUE was available “ex-
cept where” the alleged error was based on “a change in law
or Department of Veterans Affairs issue, or a change in in-
terpretation of law or a Department of Veterans Affairs is-
sue (§ 3.114).” 6 38 C.F.R. § 3.105 (1997) (emphases added);
see also Russell, 3 Vet. App. at 313 (“[C]hanges in the law
subsequent to the original adjudication . . . do not provide
6 We do not construe § 3.105’s reference to § 3.114 to
be limiting. We nonetheless observe that the substance of
§ 3.114 comports with our above understanding of CUE.
As of 1997, § 3.114 pertained, in relevant part, to the effec-
tive date of awards pursuant to liberalizing laws. It ex-
plained that where an award is made pursuant to a
“liberalizing law” or “liberalizing VA issue,” the effective
date of that award “shall not be earlier than the effective
date of the act or administrative issue” itself. See 38 C.F.R.
§ 3.114(a) (1997). Thus, even where a subsequent law lib-
eralizes benefits that were unavailable under a prior un-
derstanding of the law, the effective date of those benefits
cannot be earlier than the effective date of the liberalizing
law itself. Likewise, here, our understanding of CUE pre-
cludes Wagner’s interpretation of § 1111 from providing
retroactive benefits predating Wagner itself.
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20 GEORGE v. MCDONOUGH
a basis for revising a finally decided case.”). Given that
§ 3.105 plainly excluded a “change in law” or “change in in-
terpretation of law” from CUE, we conclude that by codify-
ing this regulation, Congress did not intend for CUE to go
so far as to attack a final VA decision’s correct application
of a then-existing regulation that is subsequently changed
or invalidated, whether by the agency or the judiciary. 7 In
other words, the VA does not commit clear and unmistak-
able error in a benefits claim decision when it faithfully ap-
plies a regulation as it existed at the time of decision, even
if that regulation is later revised or invalidated.
Accordingly, we reject Appellants’ theory as to the
scope of CUE and hold that our interpretation of § 1111 in
Wagner cannot be the basis for Appellants’ CUE claim.
CONCLUSION
We have considered Appellants’ remaining arguments
but find them unpersuasive. For the reasons set forth
above, we affirm the Veterans Court’s decisions.
AFFIRMED
COSTS
No costs.
7 We note that the VA reached this conclusion in its
1994 OGC opinion, VA Gen. Counsel Prec. 9-94 (Mar. 25,
1994), which addressed whether Veterans Court decisions
invalidating VA regulations or statutory interpretations
have retroactive effect through CUE. As with our decision
today, the VA also interpreted § 3.105’s preamble to ex-
clude changes in interpretation of law by judicial precedent
as a basis for CUE. See id. at 2 (“[I]t is our view that section
3.105(a) provides no authority . . . for retroactive payment
of benefits when the [Veterans Court] invalidates a VA in-
terpretation or regulation.”).