And Alfred R. Young v. Eric K. Shinseki

UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS
NO . 04-2310
AND
No. 06-1546
ALFRED R. YOUNG , APPELLANT ,
V.
ERIC K. SHINSEKI,
SECRETARY OF VETERANS AFFAIRS, APPELLEE.
On Appeal from the Board of Veterans' Appeals
(Decided May 11, 2009)
John Cameron, of Montgomery, Alabama, was on the briefs for the appellant.
John H. Thompson, Acting General Counsel; R. Randall Campbell, Assistant General
Counsel; and Debra L. Bernal, all of Washington, D.C., were on the brief for the appellee.
Before GREENE, Chief Judge, and MOORMAN and LANCE, Judges.
MOORMAN, Judge, filed the opinion of the Court. LANCE, Judge, filed a concurring
opinion.
MOORMAN, Judge: The appellant, veteran Alfred R. Young, appeals through counsel an
August 17, 2004, decision of the Board of Veterans' Appeals (Board) that, inter alia, denied a
disability rating greater than 70% for his service-connected post-traumatic stress disorder (PTSD).
On May 9, 2007, the Court issued a single-judge decision in this matter dismissing the appellant's
appeal of his claim for entitlement to a rating of total disability based on individual unemployability
(TDIU) and affirming the Board's August 17, 2004, decision. On May 29, 2007, pursuant to Rule
35(a) and (b) of the Court's Rules of Practice and Procedure, the appellant filed a motion for
reconsideration of the May 9, 2007, decision, or, in the alternative, for a panel decision. See
U.S. VET .APP . R. 35. Subsequently, the Court withdrew its May 9, 2007, decision.
The August 2004 Board decision on appeal denied a disability rating for PTSD in excess of
70% and remanded the appellant's PTSD claim as it related to the assignment of an effective date;
essentially, the Board bifurcated the appellant's PTSD claim. Record (R.) at 15. While the
appellant's appeal of the Board's August 2004 decision (Docket No. 04-2310) was pending before
the Court, and after the remand ordered in the August 2004 Board decision was completed, the Board
issued an April 6, 2006, decision with regard to the effective dates assigned to various disability
ratings for the appellant's service-connected PTSD. The appellant appealed the April 6, 2006, Board
decision (Docket No. 06-1546). Consequently, the appellant has two appeals pending before the
Court stemming from two different Board decisions on the same claim for disability benefits for
PTSD.
On August 1, 2008, the Court ordered the consolidation of these appeals, appeal No. 04-2310
(regarding disability rating) and appeal No. 06-1546 (regarding effective date).1 The consolidated
appeals were then called before the en banc Court for decision. Subsequently, on May 11, 2009, the
en banc Court returned the matter to a panel of the Court; the panel has reached the following
decision.
I. FACTS
In December 1995, the appellant filed a claim for entitlement to service connection for PTSD,
which the Montgomery, Alabama, VA regional office (RO) awarded in September 1996, assigning
a 30% disability rating. R. at 24-27, 53. On June 17, 1997, VA received a report from a VA
vocational rehabilitation specialist (VRS) stating his "impression that [the appellant's] ability to
establish or maintain effective or favorable relationships with people is considerably impaired. His
psychoneurotic symptoms cause considerable industrial impairment." R. at 60. On June 30, 1997,
VA received a document from the appellant stating that he "need[ed] to re-open [his] service
connected claim for an increase in [his] PTSD rating." R. at 62. The appellant also requested
information on how to file a claim for entitlement to TDIU. Id. VA treated this document as a new
claim for an increased disability rating. In December 1997, the RO continued the 30% disability
1
A record has been designated in both the 2004 and 2006 appeals. As the two records are duplicative, all record
cites contained in the Court's decision refer to the record in Docket Number 04-2310 unless otherwise noted.
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rating for the appellant's PTSD and denied entitlement to a TDIU rating. R. at 91-96. The appellant
perfected an appeal to the Board, and in August 1999, the Board denied a disability rating greater
than 30% for his PTSD and denied entitlement to a TDIU rating. R. at 114, 193-202. The appellant
appealed to the Court, and in October 2000, the Court remanded his claims pursuant to the parties'
joint motion for remand. R. at 204-19, 221.
In September 2001, the RO increased the appellant's PTSD disability rating to 50%, effective
July 1, 1997. R. at 411. The appellant filed a Notice of Disagreement (NOD) through counsel,
stating that he "disagree[d] with . . . [the RO's d]ecision which granted his claim for an increased
rating for his service-connected PTSD condition." R. at 414-16. He asserted that the effective date
should have been December 7, 1995, and that the rating assigned should have been higher. R. at
414. In March 2003, the RO awarded the appellant a 70% PTSD disability rating, effective August
2001. R. at 539. The appellant perfected another appeal as to the rating and effective date. R. at
563-66. He asserted that he was "entitled to a rating of 100% for his service-connected PTSD with
an effective date of December 7, 1995, based on the undisputed medical evidence in the record."
R. at 563.
On August 17, 2004, the Board issued the first decision here on appeal denying the
appellant's claim for entitlement to a disability rating greater than 70% for his PTSD. R. at 1-18.
The Board remanded the effective date portion of the appellant's claim and instructed the RO to issue
a Supplemental Statement of the Case (SSOC) addressing whether the appellant was entitled to
(1) an effective date prior to June 30, 1997, for his 50% disability rating for PTSD, (2) an effective
date prior to August 9, 2001, for his 70% disability rating for PTSD, and (3) an effective date prior
to August 9, 2001, for TDIU. R. at 17. The appellant timely appealed the Board's August 2004
decision. After completing the development ordered in the Board's August 2004 remand, on April 6,
2006, the Board issued a decision denying (1) an effective date prior to June 30, 1997, for a 50%
disability rating for PTSD, (2) an effective date prior to August 9, 2001, for a 70% disability rating
for PTSD, (3) an effective date prior to August 9, 2001, for TDIU, and (4) entitlement to service
connection for substance abuse, claimed as secondary to PTSD. R.(06) at 1-44. The appellant
timely filed an appeal of the Board's April 2006 decision.
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II. ANALYSIS
A. Finality of the September 1996 RO Decision
1. Contentions of the Parties
The appellant argues that his December 1995 claim for benefits remains pending because the
September 1996 RO decision was not a final decision on his claim. Although this case involves an
extended and complicated procedural history, the parties' dispute regarding the finality of the
September 1996 RO decision centers on VA's treatment of the two documents received on June 17,
1997, and June 30, 1997, each within the one-year appeal period of the September 1996 RO decision.
The appellant asserts that the June 30, 1997, document was an NOD as to the September 1996 RO
decision. Appellant's 2004 Brief (App. 04 Br.) at 8-9; Appellant's 2006 Brief (App. 06 Br.) at 9-12.
He contends that because VA never issued a Statement of the Case (SOC) in response to his June
30, 1997, NOD, the September 1996 RO decision never became final, and his December 1995 claim
for benefits was still pending when the Board issued its August 2004 and April 2006 decisions. App.
04 Br. at 10, 20. He thus contends that because VA erred in construing the June 30, 1997,
submission as a new claim for an increased disability rating, VA also erred in failing to assign him
an effective date based on the date of his original December 1995 claim for benefits. App. 06 Br.
at 13-15. Alternatively, the appellant argues that the June 17, 1997, VRS report was new and
material evidence that VA never adjudicated in conjunction with the September 1996 RO decision,
in violation of 38 C.F.R. § 3.156(b). Appellant's 2004 Reply Brief (App. 04 Reply Br.) at 1, 5.
The Secretary asserts that the appellant's claim has two claim streams: The first stems from
the appellant's December 1995 claim for benefits, which the Secretary argues became final when the
appellant failed to appeal the September 1996 RO decision. The Secretary contends that neither of
the June 1997 documents that the appellant submitted can be construed as an NOD. Secretary's 2004
Brief (Sec'y 04 Br.) at 11-12. The second claim stream, which the Secretary contends is currently
on appeal, stems from the June 30, 1997, document that VA construed as an increased rating claim.
The Secretary argues that because the June 30, 1997, document could not be characterized as an
NOD–as it neither stated disagreement with, nor asked for any appellate review of, any
determination–and because it could not constitute a claim to reopen, it could only be construed as
an increased rating claim. Secretary's 2006 Brief (Sec'y 06 Br.) at 19-20. Moreover, the Secretary
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asserts that the June 17, 1997, VRS report could not have abated the finality of the September 1996
RO decision because 38 U.S.C. § 7105(c) and 38 C.F.R. § 20.304 specifically prohibit such a tolling.
Sec'y 06 Br. at 18. The Court will discuss each document in question, VA's treatment of those
documents, the parties' positions on those documents, and their possible impact on the finality of the
September 1996 RO decision.
2. Applicable Law
Generally, an NOD must be filed within one year from the date of the underlying RO
decision, and if no NOD is filed within the one-year appeal period following the RO decision, the
decision will become final. See 38 U.S.C. §§ 7105(b)(1), (c). However, 38 C.F.R. § 3.156 provides
a potential exception to this general rule. Pursuant to § 3.156(b), VA must consider any new and
material evidence received during the one-year appeal period following an RO decision "as having
been filed in connection with the claim which was pending at the beginning of the appeal period."
38 C.F.R. § 3.156(b) (2008). When VA fails to consider new and material evidence submitted
within the one-year appeal period pursuant to § 3.156(b), and that evidence establishes entitlement
to the benefit sought, the underlying RO decision does not become final. See Muehl v. West,
13 Vet.App. 159, 161-62 (1999).
The Court reviews de novo whether a certain document constitutes an NOD. See 38 U.S.C.
§ 7261(a)(1); Palmer v. Nicholson, 21 Vet.App. 434, 436 (2007). VA defines an NOD as "[a]
written communication from a claimant or his or her representative expressing dissatisfaction or
disagreement with an adjudicative determination by the agency of original jurisdiction and a desire
to contest the result." 38 C.F.R. § 20.201 (2008). It must be expressed "in terms which can be
reasonably construed as disagreement with that determination and a desire for appellate review" and
"the specific determinations with which the claimant disagrees must be identified." Id.The effective date of any award "shall be fixed in accordance with the facts found, but shall
not be earlier than the date of receipt of application therefor." 38 U.S.C. § 5110(a). However, in a
claim for increased compensation, the effective date may date back as much as one year prior to the
date of the formal application for increase if it is "factually ascertainable that an increase in disability
had occurred" within that period. See 38 U.S.C. § 5110(b)(2); 38 C.F.R. § 3.400(o)(2) (2008).
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Before deciding a claim, the Board is required to consider all relevant evidence of record and
to consider and discuss in its decision all "potentially applicable" provisions of law and regulation.
Schafrath v. Derwinski, 1 Vet.App. 589, 593 (1991); see 38 U.S.C. § 7104(a); Weaver v. Principi,
14 Vet.App. 301, 302 (2001) (per curiam order). In addition, the Board must include in its decision
a written statement of the reasons or bases for its findings and conclusions, adequate to enable an
appellant to understand the precise basis for the Board's decision as well as to facilitate review in this
Court. See 38 U.S.C. § 7104(d)(1); Allday v. Brown, 7 Vet.App. 517, 527 (1995); Gilbert v.
Derwinski, 1 Vet.App. 49, 56-57 (1990). To comply with this requirement, the Board must analyze
the credibility and probative value of the evidence, account for the evidence that it finds persuasive
or unpersuasive, and provide the reasons for its rejection of any material evidence favorable to the
claimant. See Caluza v. Brown, 7 Vet.App. 498, 506 (1995), aff’d per curiam, 78 F.3d 604 (Fed.
Cir. 1996) (table); Gilbert, supra.
3. Application of Law to Fact
a. The June 30, 1997, Document
Because it is uncontested that the September 1996 RO decision was not yet final when VA
received the June 30, 1997, document, there is also no dispute that the June 30, 1997, document
could not constitute a claim to reopen any previously denied claim. See Jennings v. Mansfield,
509 F.3d 1362, 1367-68 (Fed. Cir. 2007) ("[A] claim becomes final and subject to a motion to
reopen only after the period for appeal has run."); 38 C.F.R. § 3.160(e) (2008) (a claim to reopen is
any claim for benefits received "after final disallowance of an earlier claim"); see also Muehl, supra
(holding that the Board erred in determining that evidence submitted during the appeal period was
a claim to reopen a previously disallowed claim). In its April 2006 decision, the Board found that
the June 30, 1997, document that the appellant submitted did not contain the requisite information
for it to be considered an NOD. R. (06) at 29. The Board thus concluded that because the appellant
did not file an NOD, the September 1996 RO decision was final. R. (06) at 30.
Upon de novo review, the Court holds that the June 30, 1997, document does not constitute
an NOD. See 38 U.S.C. § 7261(a)(1); Palmer, supra; 38 C.F.R. § 20.201. The document cannot
reasonably be construed to express disagreement with a particular decision or reflect an intent to seek
appellate review. Regarding his PTSD claim, the document states only the appellant's request to "re-
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open [his] service connected claim for an increase in [his] PTSD rating" and notes that his
"counselor has determined that a vocational rehabilitation program is not feasible." R. at 62. The
document does not mention the September 1996 RO decision, it does not express disagreement with
the rating assigned therein, nor does the document request any review of the appellant's PTSD
disability rating. See 38 C.F.R. § 20.201.
b. The VRS Report
The appellant argues that his submission of the VRS report in June 1997, within the one-year
appeal period after the September 1996 RO decision, "tolled the appeal period for the September
1996 decision." App. 04 Reply Br. at 1. He contends that in June 1997, at the time he submitted the
VRS report, his December 1995 claim for benefits was a pending claim that had not been finally
adjudicated, and thus, the Board erred in "ignor[ing]" the application of 38 C.F.R. § 3.156(b), which
he asserts "created an exception to the finality of a VA rating decision where there is submitted by
the veteran . . . new evidence within the one-year appeal period after the rating decision is issued."
App. 04 Reply Br. at 5.
In its April 2006 decision, the Board noted that the appellant "contested the finality of" the
September 1996 RO decision, and it considered his argument that the VRS report "had the effect of
preventing the finality of the June 1996 RO decision." R. (06) at 29. However, the Board found that
"38 C.F.R. § 20.304 provides that the filing of additional evidence after receipt of notice of an
adverse determination does not extend the time limit for initiating an appeal from that
determination." Id.; see 38 C.F.R. § 20.340 (2008) (with certain exceptions, "the filing of additional
evidence after receipt of notice of an adverse determination does not extend the time limit for
initiating or completing an appeal from that determination"). The Board thus concluded that the
September 1996 RO decision was final. R. (06) at 30. In so concluding, the Board did not consider
and discuss 38 C.F.R. § 3.156(b). At the time VA received the VRS report, 38 C.F.R. § 3.156(b)
provided:
(b) New and material evidence received prior to the expiration of the appeal period,
or prior to the appellate decision if a timely appeal has been filed (including evidence
received prior to an appellate decision and referred to the agency of original
jurisdiction by the Board of Veterans Appeals without consideration in that decision
in accordance with the provisions of § 20.1304(b)(1) of this chapter), will be
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considered as having been filed in connection with the claim which was pending at
the beginning of the appeal period.
38 C.F.R. § 3.156 (b) (1997); see 66 Fed. Reg. 45,620 (Aug. 29, 2001) (amendments to § 3.156
apply to any claim for benefits received by VA on or after August 29, 2001). The record before the
Board revealed that the appellant filed evidence, in the form of the VRS report, prior to the
expiration of the one-year appeal period following the September 1996 RO decision. The Board's
failure to discuss § 3.156(b), which, on this record, is a potentially applicable regulatory provision,
requires remand. See Weaver and Schafrath, both supra.
Upon receipt of the VRS report, VA was required to evaluate it to determine whether it met
the definition of "new and material evidence" set forth in 38 C.F.R. § 3.156. See 38 C.F.R.
§ 3.156(a) (1997). If VA found the VRS report to be new and material evidence, VA should have
considered it as having been filed in connection with the appellant's December 1995 claim. See
Jennings, 509 F.3d at 1368 ("Any interim submissions before finality must be considered by . . . VA
as part of the original claim."); Muehl, 13 Vet.App. at 162 (evidence received during the one-year
appeal period following an RO decision "should have been considered in conjunction with the
original claim"). If, on the other hand, the appellant's submission was properly construed as a claim
for an increased disability rating, he was entitled to have VA adjudicate whether it was "factually
ascertainable that an increase in [his] disability had occurred" in the one-year period prior to VA's
receipt of his claim. 38 C.F.R. § 3.400(o)(2). This the Board also failed to do. Although the Board
noted that the law provided for an effective date for the award of an increased disability rating
"within the one-year period preceding the date of receipt of a claim for increased compensation," the
Board did not specifically determine whether the appellant's PTSD increased in severity in the one-
year period prior to his submission of the VRE report. R. (06) at 12. The Board's April 2006
decision thus is inadequate to facilitate the Court's review. See Allday, supra.
Contrary to the Board's finding and the Secretary's assertion, § 20.304 cannot excuse a VA
failure to follow its own procedures. See Morton v. Ruiz, 415 U.S. 199, 235 (1974) ("Where the
rights of individuals are affected, it is incumbent upon agencies to follow their own procedures.").
Rather, the Court's and the U.S. Court of Appeals for the Federal Circuit's jurisprudence make clear
that VA's failure to follow its own procedures may result in a lack of finality of the underlying RO
8
or Board decision at issue. See AG v. Peake, 536 F.3d 1306, 1308 (Fed. Cir. 2008) (holding, as a
result of VA's failure to notify the appellant of his right to appeal, the underlying RO decision "never
became final"); Ingram v. Nicholson, 21 Vet.App. 232, 241 (2007) ("[T]ime limitations pertaining
to a veteran's right to appeal an adverse decision do not begin to run until the veteran has received
proper notice that his claim was denied."); Hauck v. Brown, 6 Vet.App. 518, 519 (1994) (per curiam
order); see also Cook v. Principi, 318 F.3d 1334, 1341 (Fed. Cir. 2002) (en banc) (VA's failure to
issue an SOC after receipt of an NOD prevents the underlying RO decision from becoming final
because such a failure "ha[s] the effect of extinguishing the claimant's right to appeal an adverse
decision"); Palmer, 21 Vet.App. at 438 ("The filing of the NOD entitled [the appellant] to receive
an SOC. . . . Because the RO failed to provide [the appellant] with an SOC, he was unable to file a
formal appeal to the Board, and the [underlying] RO decision never became final."); Kuo v.
Derwinski, 2 Vet.App. 662, 666 (1992) (VA's mailing an SOC to the veteran in the care of his
representative "is not sufficient to meet the requirements imposed upon the Secretary by his own
regulations," and VA "cannot close a case for lack of response to a[n SOC] unless the appellant . . .
received the [SOC]").
Section 3.156(b) is intended to be a veteran-friendly provision that allows for the assignment
of an effective date of the date of the original claim when certain requirements are met. 72 Fed. Reg.
28,778 (May 22, 2007) (explaining that §§ 3.156(b) and 3.400 "provide a claimant-friendly effective
date rule for awards based on evidence received while a claim is on appeal or before the appeal
period expires"). To accept the Secretary's position that the Board correctly determined that the
September 1996 RO decision was final would be to allow VA to ignore this claimant-friendly
provision. It would also create the possibility that VA, by not considering evidence submitted during
the one-year appeal period following the RO decision and simply waiting for the RO decision to
become final, deprived the appellant of the earlier effective date associated with his December 1995
claim. This would be antithetical to the nonadversarial, claimant-friendly nature of VA proceedings.
See Sanders v. Nicholson, 487 F.3d 881, 889 (Fed. Cir. 2007) (noting "VA's uniquely pro-claimant
benefits system"); Vazquez-Flores v. Peake, 22 Vet.App. 37, 44 (2008) ("To ensure that claimants
receive the benefits to which they are entitled, Congress created a uniquely pro-claimant,
nonadversarial VA-benefits adjudicatory system that contains several important procedural steps to
9
promote that pro-claimant environment."); see also Voracek v. Nicholson, 421 F.3d 1299, 1305 (Fed.
Cir. 2005) (Michel, C.J., concurring) (VA "is obligated to read a veteran's claim in the light most
favorable to the veteran"). The Court thus holds that remand is necessary for the Board to apply
§ 3.156(b) and make a threshold determination whether the VRS report was new and material
evidence of the severity of the appellant's PTSD. See Muehl, 13 Vet.App. at 161 (holding that where
VA received evidence within the one-year appeal period following an RO decision, the Board erred
in determining that the evidence constituted a claim to reopen without first discussing the application
of § 3.156(b)). If the Board determines that the VRS report was new and material evidence when
VA received it, VA must consider the VRS report as having been filed in connection with the
appellant's December 1995 claim and readjudicate his claim considering the VRS report. See
Jennings, supra; Muehl,13 Vet.App. at 162. If the Board determines that the VRS report was not
new and material evidence, the Board then must determine whether the VRS report is appropriately
considered a claim for an increased disability rating and so adjudicate it, including making a
determination whether the appellant's PTSD increased in severity in the one-year period prior to his
filing his claim for an increase. See 38 U.S.C. § 5110(b)(2); 38 C.F.R. § 3.400(o)(2) (2008). The
Board must provide an adequate statement of the reasons or bases for its determinations. See
Caluza, Allday, and Gilbert, all supra.
B. PTSD Disability Rating and Effective Date
Effective November 7, 1996, VA revised its regulatory criteria for evaluating psychiatric
disorders, including PTSD. See 61 Fed. Reg. 52,695 (Oct. 8, 1996) (final rule amending VA's
schedule for evaluating disabilities pertaining to mental disorders). The appellant asserts that he is
entitled to a 100% disability rating, effective December 1995. He reiterates his argument that his
December 1995 claim for benefits remained pending, and thus, he argues that the Board should have
considered the application of the pre-1996 version of the applicable diagnostic codes (DCs) for rating
PTSD. App. 04 Br. at 11-12; App. 06 Br. at 15-27.
1. August 2004 Board Decision
The August 2004 Board decision assessed the appellant's level of disability from August
2001 forward and found "no basis for assignment of a schedular evaluation greater than 70[%] for
PTSD." R. at 14. The appellant's level of disability prior to August 2001 is discussed in the next
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section below. Because the Board found that the appellant's claim stemmed from his June 30, 1997,
claim for an increased rating, it applied to the appellant's claim the amended version of the applicable
regulatory criteria and DCs. R. at 6, 11; see 38 C.F.R. § 4.130, DCs 9411, 9440 (2003). Because the
Court is remanding the issue of the appropriate treatment of the VRS report, which may lead VA
to consider the level of the appellant's disability prior to the regulatory amendments, the Court will
also remand the issue of the proper disability rating for the appellant's PTSD. The Court need not
now address the appellant's argument that the Board erred in "implicitly denying" his claim for an
extraschedular disability rating. App. 04 Br. at 21-25; see Best v. Principi, 15 Vet.App. 18, 20
(2001) ("A narrow decision preserves for the appellant an opportunity to argue those claimed errors
before the Board at readjudication, and, of course, before this Court in an appeal, should the Board
rule against him."). To the extent that the Board was not on notice at the time it issued its August
2004 decision, the Board is now on notice that the appellant has asserted, in addition to his
entitlement to an increased schedular disability rating, that a schedular evaluation may be inadequate
to compensate him for his PTSD; and, the Board must address the matter on remand. See Colayong
v. West, 12 Vet.App. 524, 536-37 (1999) ("[W]here the veteran has asserted that a schedular rating
is inadequate, the Board must specifically adjudicate the issue of whether an extraschedular-rating
analysis is appropriate and, if there is enough such evidence, the Board must direct that the matter
be referred . . . for consideration.")
2. April 2006 Board Decision
The April 2006 Board decision addressed the appellant's level of disability prior to August
2001 and determined that the appellant was not entitled to either a 50% disability rating prior to June
1997 or a 70% disability rating prior to August 2001. R. (06) at 17-44. The Secretary asserts that
in reaching its determinations, the Board did not adequately explain its rejection of medical evidence
that tended to show that the appellant was unemployable beginning in August 1995. Sec'y 06 Br.
at 13-16. The Secretary thus concedes that remand of the issue of the appellant's PTSD disability
rating is required to allow the Board to provide a sufficient statement of the reasons or bases for its
decision. Upon review, the Court holds that remand is necessary for the Board to analyze the
credibility and probative value of the evidence regarding the appellant's level of disability and to
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provide adequate reasons or bases for its rejection of any material evidence favorable to the claimant.
See Caluza and Gilbert, both supra.
C. TDIU
The appellant argues that he is entitled to a December 1995 effective date for his grant of
TDIU based on the medical evidence of record and that the Board erred in failing to so find. App.
06 Br. at 15-27. Because the Court is remanding the issues of the appropriate treatment of the VRS
report and the appropriate disability rating for the appellant's PTSD prior to August 9, 2001, and
because the Secretary concedes that the Board failed to provide a sufficient statement of its reasons
or bases for its findings regarding the appellant's level of disability during this period, the Court will
also remand the appellant's claim that he is entitled to a grant of TDIU prior to August 9, 2001. See
Gurley v. Nicholson, 20 Vet.App. 573, 575-76 (2007) ("[A]ny decision by the Court on TDIU
entitlement could be rendered meaningless by an adjudication below that awards a higher schedular
rating that, in turn, may satisfy the requirements for an award of schedular TDIU under 38 C.F.R.
§ 4.16(a).").
D. Substance Abuse
In its August 2004 decision, the Board remanded the appellant's claim for service connection
for substance abuse as secondary to his service-connected PTSD for VA to provide a medical
examination that assessed the etiology of the claimed substance abuse. R. at 17. VA provided the
appellant that examination in November 2004. The appellant now asserts that VA failed to provide
him a copy of that examination report until after the Board issued its April 2006 decision on his
claim; and, this failure denied him a meaningful opportunity to participate in the adjudication of his
claim. App. 06 Br. at 27-28. The Secretary contends that the appellant, despite having been
represented by the same counsel for the entirety of the proceedings before the Board, neither made
this argument to the Board nor specifically requested the November 2004 VA examination report.
Sec'y 06 Br. at 11-12.
On February 10, 2005, the appellant's counsel sent VA a letter specifically requesting "a
complete copy of all medical records, [compensation and pension] examination reports and other
developments (and all engagement letters) added to [the appellant's] claims file after the Board's
August 17, 2004, Remand order." Supplemental (Suppl.) R. (06) at 28. On November 23, 2005, the
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appellant's counsel notified VA that he had requested such documents on February 10, 2005, and as
of the date of the letter he "ha[d] not received any of the requested documents." Suppl. R. (06) at
44. The appellant's counsel thus again requested that VA provide him a copy of the above-requested
documents. Id. On January 12, 2006, the appellant's counsel sent VA a letter stating:
On February 10, 2005[,] and on November 23, 2005, we requested from your office
a complete copy of Mr. Young's medical records, [compensation and pension]
examination reports and other developments which were added to the veteran's
claims file after the Board's August 17, 2004, Remand Order.
....
As of this date, we have not received a copy of [the requested documents].
....
Would you please . . . mail me a complete copy of Mr. Young's medical records,
[compensation and pension] examination reports, and other developments which
were added to the veteran's claims file after the Board's August 17, 2004, Remand
Order within fifteen (15) days.
Suppl. R. (06) at 48. In April 2006, when the Board issued its decision on the appellant's claim for
service connection for substance abuse, the appellant had not received the requested documents.
By failing to furnish the appellant a copy of the 2004 medical examination report before the
Board considered and relied on it in the April 2006 decision, and after the appellant's multiple
requests for a copy of the report, VA violated the fair process principle underlying Thurber v. Brown,
5 Vet.App. 119 (1993). See id. at 123 ("The entire thrust of the VA's nonadversarial claims system
is predicated upon a structure which provides for notice and an opportunity to be heard at virtually
every step in the process."); see also Newday v. Peake, 22 Vet.App. 262, 264-65 (2008) ("Before
relying on any additional evidence developed [on remand], the Board should ensure that [the
a]ppellant is given notice thereof and an opportunity to respond thereto."); Thurber, 6 Vet.App. at
126 ("[B]efore the [Board] relies, in rendering a decision on a claim, on any evidence developed or
obtained by it subsequent to the issuance of the most recent SOC or SSOC with respect to such
claim, the [Board] must provide a claimant with reasonable notice of such evidence and of the
reliance proposed to be placed on it, and a reasonable opportunity for the claimant to respond to it.").
The Court thus holds that remand is necessary for VA to provide the appellant an opportunity to
respond to the information contained in the 2004 VA medical examination report and, after the
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appellant has been given a "reasonably opportunity" for response, to readjudicate his claim for
service connection for substance abuse. See Thurber, supra.
III. CONCLUSION
Based on the foregoing analysis and a review of the record on appeal, the matters of (1) the
proper treatment of the VRS report; (2) the appellant's entitlement to a disability rating greater than
50% prior to July 1, 1997; (3) the appellant's entitlement to a disability rating greater than 70% prior
to August 9, 2001; (4) the appellant's entitlement to an award of TDIU prior to August 9, 2001;
(5) the appellant's entitlement to an extraschedular disability rating; and (6) the appellant's
entitlement to service connection for substance abuse secondary to PTSD are REMANDED for
further proceedings consistent with this decision. Those portions of the Board's August 17, 2004,
and April 6, 2006, decisions addressing the foregoing issues are VACATED. On remand, the
appellant may submit additional evidence and arguments to the Board, and the Board is required to
consider them. See Kay v. Principi, 16 Vet.App. 529, 534 (2002). In addition, the Board shall
proceed expeditiously. See 38 U.S.C. §§ 5109B, 7112 (requiring Secretary to provide for
"expeditious treatment" of claims remanded by Board or Court). The remainder of the Board's
August 2004 and April 2006 decisions are AFFIRMED.
LANCE, J., concurring: I fully concur with the ultimate outcome reached by the majority. I write
separately to note my disagreement with the conclusion that VA's failure to consider new and
material evidence in conjunction with the original claim vitiates the finality of the decision regarding
that original claim. See ante at 5 ("When VA fails to consider new and material evidence submitted
within the one-year appeal period pursuant to § 3.156(b), and that evidence establishes entitlement
to the benefit sought, the underlying RO decision does not become final."). Muehl v. West held that
Social Security Administration records received within a year of an RO decision "should have been
considered in conjunction with the original claim" pursuant to § 3.156(b) and that because the
records were not so considered, "there was no final decision on the [original claim]." 13 Vet.App.
159, 161-62 (1999). Muehl, however, was decided under the framework of Hayre v. West that held
procedural error vitiated finality. 188 F.3d 1327 (Fed. Cir. 1999) (denial of benefits not final for
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purposes of appeal if there was breach of the duty to assist), overruled in part by Cook v. Principi,
318 F.3d 1334 (Fed. Cir. 2002) (en banc) (grave procedural error is not an exception to the rule of
finality). In Cook, the Federal Circuit altered this framework by overruling Hayre and holding that
grave procedural error did not abrogate the finality of a decision. Id. at 1341. To this extent, I
believe Cook overruled the portion of Muehl that held that failure to consider evidence pursuant to
§ 3.156(b) resulted in "no final decision on the [original claim]." Muehl, 13 Vet.App. at 162.
The section at issue in this case, § 3.156(b), is a procedural regulation that guides VA's
consideration of new and material evidence received by VA within the time to appeal a decision in
much the same way that the duty to assist is a procedural statute governing how evidence will be
obtained in a claimant's case. In Cook, the Federal Circuit considered that this Court has "held that
the time for appealing either an RO or a Board decision did not run where VA failed to provide the
veteran with information or material critical to the appellate process." 318 F.3d at 1340 (citing
Tablazon v. Brown, 8 Vet.App. 359 (1995)); Hauck v. Brown, 6 Vet.App. 518 (1994); Kuo v.
Derwinski, 2 Vet.App. 662 (1992); Ashley v. Derwinski, 2 Vet.App. 307 (1992). The opinion in
Cook stated, however, that in these cases, i.e., Tablazon, Hauck, Kuo, and Ashley, all supra, "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."
Cook, 318 F.3d at 1341. Distinguishing Hayre, the court determined that regardless of any failure
of the duty to assist in the development of evidence, Mr. Hayre was afforded notice of the RO
decision and had he filed an NOD, VA would have issued an SOC. "Thus, the VA's failure to notify
Hayre that it had been unsuccessful in obtaining his SMRs [service medical records] 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 of the decision." Id. In this case, Mr. Young was notified
of his appellate rights and had opportunity to file an NOD with the original September 1996
decision. He did not do so and statute mandates that "[i]f no [N]otice of [D]isagreement is filed in
accordance with this chapter within the prescribed period, the action or determination shall become
final." 38 U.S.C. § 7105(c). Mr. Young also had the opportunity to challenge the RO's December
1997 decision that considered his new and material evidence–which he did, hence our decision
today. Like Hayre, Mr. Young had opportunity to challenge the VA's initial failure to consider his
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evidence received in conjunction with his original claim. Accordingly, VA's failure to consider and
apply § 3.156(b) does not create an exception to finality in the same way that other grave procedural
errors, so long as they are not of the type that have the effect of extinguishing a claimant's right to
appeal an adverse decision, do not vitiate finality. Cook, 318 F.3d at 1341.
Nevertheless, I reach the same result as the majority because, in my view, § 3.156(b) operates
to relate back to the original claim any subsequent decision that considers new and material evidence
received by VA during the time to appeal the original determination. This achieves the objectives
of § 3.156(b) without treading on Cook's holding and creating an exception to the rule of finality
reminiscent of Hayre. Cook, 318 F.3d at 1339 ("[W]e see nothing . . . that indicates that Congress
intended to allow additional exceptions to the finality of VA decisions based upon 'grave procedural
error.'"). The relation-back operation of § 3.156(b) is also fully consistent with § 20.304, which
states that "the filing of additional evidence after the receipt of notice of an adverse determination
does not extend the time limit for initiating or completing an appeal from that determination."
A. General Operation of § 3.156(b)
Section 3.156(b) anticipates the situation where new and material evidence is received by
VA at a time when the claim is not yet final–within a year after an RO decision on the claim. In this
instance, § 3.156(b) operates so that VA may consider this evidence and issue a new RO decision
that relates back to the original claim for purposes of preserving the initially assigned effective date
and the application of the extant rating provisions. This serves the claimant, for example, who was
awarded service connection in an RO decision, but is dissatisfied with the disability rating assigned.
Without having to process a lengthy appeal to the Board,2 which requires filing an NOD, waiting for
the processing of an SOC, and filing a Substantive Appeal, the claimant can simply present his new
and material evidence to VA and have it considered and adjudicated in a subsequent RO decision,
preserving the effective date assigned in the original decision. This also operates to avoid harm to
the less savvy claimant who would like new and material evidence be considered, but does not
2
Currently, an appeal to the Board takes an average of three years to produce a decision. J AM ES P. T ERRY ,
R EPO R T O F THE C H AIRM AN O F THE B O ARD O F V ETERAN S ' A PPEALS FOR F ISCAL Y EAR 2008 19 (2009), available at
http://www.va.gov/Vetapp/ChairRpt/BVA2008AR.pdf.
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understand that filing an NOD is necessary to prevent the original RO decision from becoming final
and losing out on any effective date assigned.
B. Application of § 3.156(b) Where Original Claim is Granted: New Evidence Construed as a
Separate Increased Rating Claim
Applicability of § 3.156(b) is not limited to claims that are denied by the RO but also where,
as here, a rating decision grants service connection. Unlike a claim that is denied, where a claim is
granted, new and material evidence received within the appeal period may be construed by VA as
a claim for an increased rating, as it was in Mr. Young's case. Whatever administrative label is given
to the evidence, if it is new and material and is received within the appeal period, the decision
regarding that evidence must relate back to the original claim. Where an NOD is filed in addition
to new and material evidence, construing that evidence as part of a separate increased rating claim
is procedurally beneficial because that posture prevents the Board from necessarily being deprived
of appellate jurisdiction over the original claim. This is so because, if the new and material evidence
is not considered part of the original claim being appealed, that appeal would not be subject to a
remand so that the evidence might first be considered by the agency of original jurisdiction. See
Disabled Am. Veterans v. Sec'y of Veterans Affairs, 327 F.3d 1339, 1347 (Fed. Cir. 2003) (Board's
review of evidence not considered by the agency of original jurisdiction in the absence of a waiver
from the appellant violates 38 U.S.C. § 7104(a)). Therefore, receipt of new and material evidence
would not result in a deprivation of the Board's jurisdiction to consider the original appeal; but
§ 3.156(b) allows any decision on that evidence to relate back to the original claim even if
considered in the context of a separate increased rating claim. Pursuant to § 3.156(b), any RO
decision as to the increased rating claim is fully appealable but must relate back to the original
decision, while the Board may proceed with the appeal of the original RO decision. In this case, the
appellant does not lose the benefit of his originally assigned effective date as he would if evidence
as to disability rating was received after the appellate period. Further, the Board is not stripped of
jurisdiction over the original claim. This serves an efficient purpose: the claimant is able to
challenge, e.g., a disability rating immediately through the submission of new and material evidence
if it exists, but the process of Board review of the initially assigned effective date, for example, may
continue without interruption and delay. This promotes the efficiency of decisions and serves the
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interests of claimants as well as VA. This is particularly useful where an NOD is filed quickly but
new evidence is not submitted until near the end of the one-year appeal period.
To summarize, by allowing VA to treat new evidence as a new and separate claim that relates
back to the filing of the original claim, § 3.156(b) solves two potential problems. First, without
§ 3.156(b), the unsophisticated veteran would lose a possible earlier effective date by not submitting
an NOD with new evidence –precisely the situation in this case–while the sophisticated veteran (or
his representative) would always submit an NOD with new evidence to preserve his effective date
even if he did not think there was any error based on the original record. Section 3.156(b) avoids
this game and unnecessary appeals by preserving the potential effective date of the original claim
if new evidence is submitted within one year if it is material.
Second, by allowing new evidence to be treated as a separate claim, § 3.156(b) avoids the
need to continually delay appellate review in order to protect the claimant's effective date if the
appellant is submitting a constant stream of new evidence. This scenario is particularly likely where
the issue is disability rating and the appellant is receiving regular treatment for a condition the
severity of which is in flux. In that case, the Board can bring some finality to the original decision
while leaving the door open for a retroactive award based upon evidence submitted within the one-
year appeal period. Of course, the new evidence can always be considered as part of the original
claim rather than as a separate claim if the RO can process it prior to the appeal of the original claim
being certified to the Board, but this is not that case. Ultimately, § 3.156(b) gives the Secretary the
ability to be veteran friendly while maintaining administrative flexibility to process both appeals and
new evidence efficiently. Therefore, VA is free to either process new evidence as part of a pending
appeal or treat it as a separate claim as appropriate. If the new evidence is material and
compensation is awarded, then that award may have an effective date back to the date of the original
claim regardless of the procedure chosen.
In conclusion, I would hold that Mr. Young's original 1995 claim was finally decided by the
RO in September 1996 because that determination was not appealed. If, on remand, the Board
determines that the evidence received by VA in June 1997 was new and material, then a new
decision considering that evidence in light of the rating provisions that were in effect at the time of
the original claim will relate back to the date of the original December 1995 claim.
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