Monday, March 16, 2009

Director of C&P and extrschedular ratings

I think that pro se vets can find a lot of interesting information by reading dissenting opinions or in this case a concurring opinion with a qualified dissent.

SCHOELEN, Judge, concurring: Although I concur in the majority's ultimate holding, I
respectfully dissent from the part of the decision that discusses the respective roles of the Director of C&P and the RO in cases meriting extraschedular consideration.

By sanctioning the Director of C&P's analysis of the factors already considered by the RO or Board, the majority effectively transforms the Director of C&P into a fact-finder.
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Specifically, the Director of C&P has been delegated the authority to draft the rating schedule, based "as far as practicable, upon the average impairments of earning capacity resulting from such injuries in civil occupations." 38 U.S.C. §1155; see also 38 U.S.C. § 501(a); 38 C.F.R. §§ 2.6(b)(1), 3.100 (2008). The Director of C&P's expertise is in determining the average earning capacity impairment due exclusively to the service-connected disability. See 38 C.F.R. § 3.321(b)(1). This makes the Director of C&P uniquely suited to determining what extraschedular rating level is warranted.
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I believe that the Secretary's interpretation of the C&P director's province in this respect is inconsistent with 38 C.F.R. § 3.321(b)(1) (2008), and therefore is entitled to little, if any, deference. See Auer v. Robbins, 519 U.S. 452, 461 (1997) (confirming that an agency's interpretations of its own regulations is "controlling unless 'plainly erroneous or inconsistent with the regulation'")
(quoting Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 359 (1989)); Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 212 (1988) (declining to defer to "agency litigating positions that are wholly unsupported by regulations, rulings, or administrative practice").

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See Barringer v. Peake, 22 Vet.App. 242, 243-44 (2008) ("The question of an extraschedular rating is a component of a claim for an increased rating.") (citing Bagwell, 9 Vet.App. at 339).
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UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS
NO . 06-2240
ROBERT A. ANDERSON, APPELLANT,
V.
E RIC K. SHINSEKI,
S ECRETARY OF VETERANS AFFAIRS, APPELLEE.
On Appellant's Motion for Panel Decision
(Argued August 28, 2008 Decided March 13, 2009)
Todd M. Wesche of Richmond, Virginia, and Daniel G. Krasnegor, of Charlottesville,
Virginia, for the appellant.
Robert Schneider, with R. Randall Campbell, Assistant General Counsel, and Richard
Mayerick, Deputy Assistant General Counsel, all of Washington, D.C., for the appellee.
Before GREENE, Chief Judge, HAGEL and SCHOELEN, Judges.
GREENE, Chief Judge, filed the opinion of the Court. SCHOELEN, Judge, filed a
concurring opinion.
GREENE, Chief Judge: In an April 30, 2008, single-judge decision the Court affirmed an
April 4, 2006, decision of the Board of Veterans' Appeals (Board) that denied veteran Robert A.
Anderson a disability rating higher that 10%, including an extraschedular rating, for his VA serviceconnected
bilateral hearing loss. On May 21, 2008, Mr. Anderson filed, through counsel, a timely
motion for reconsideration or, in the alternative, a panel decision. The Court granted Mr. Anderson's
motion for a panel decision and heard oral argument on the matter. The April 30, 2008, decision is
hereby withdrawn and this opinion is issued in its place. Because the Board did not fully consider
the relevant evidence in the record, and thus, failed to provide an adequate statement of reasons or
bases for its determination, the April 2006 decision will be vacated and the matter remanded for
readjudication.
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I. BACKGROUND
Mr. Anderson served in the U.S. Army from May 1944 to October 1946, and from November
1950 to April 1952. Record (R.) at 16-17. In November 2002, a VA regional office (RO) awarded
him service connection for bilateral hearing loss with a 10% disability rating. R. at 28-34, 123-24.
Mr. Anderson disagreed with the 10% rating assigned, and in June 2004 he met with a VA decision
review officer (DRO). R. at 128-31. The DRO reported that during that conference he and Mr.
Anderson discussed the applicability of an extraschedular rating pursuant to 38 C.F.R. § 3.321(b)(1)
to Mr. Anderson's claim. Mr. Anderson agreed to provide a statement detailing how his hearing loss
caused marked interference with employment that would be submitted to the "VA Central Office for
extraschedular evaluation." R. at 228. In a July 2004 letter, Mr. Anderson stated that he believed
that his hearing loss caused him to retire from his job at a telephone company with less than full
pension in 1977, and that his hearing loss adversely affected his work as a real estate agent from
1978 to 1984. R. at 236-38. He further stated that in 1984 he applied for Social Security benefits
and from that time until 1997, he worked as a property manager. R. at 238. In September 2004, Mr.
Anderson's claim was referred to the Director of the Compensation and Pension Service (C&P) for
consideration of an extraschedular rating. R. at 244.
In March 2005, the Director of C&P, after reviewing Mr. Anderson's claims file, his medical
complaints, and his work history, issued a letter decision that discussed Mr. Anderson's entitlement
to an extraschedular evaluation under 38 C.F.R. § 3.321(b)(1). R. at 249. In the letter, the Director
of C&P related that Mr. Anderson had "worked for many years for a telephone company," and that
"his hearing loss had a great impact on his career." Id. Specifically, the Director of C&P noted that
Mr. Anderson's hearing loss had "prevented him from advancement and shortened his career to the
point he had to retire in 1977, at age 51." Id. The Director of C&P also reported that, despite his
new hearing aids, Mr. Anderson was "unable to participate in conversations with his friends, cannot
answer or use the phone unless his wife helps him out on the other line, and is unable to understand
the dialogue of speakers, newscasters and actors whether it is on the radio, television, church, or
theater." Id. Ultimately, the Director of C&P concluded:
[A]n extra schedular evaluation is assigned where normal schedular evaluations are
found to be inadequate to compensate for impairment of earning capacity. The
veteran has not worked in over 30 years. As available medical records show the
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veteran's hearing loss is not so severe as to interfere with his ability to be gainfully
employed, this Service finds that entitlement to an extra-schedular evaluation is not
warranted.
Id. The matter was then returned to the RO and in March 2005 the RO determined that the rating
schedule for evaluating hearing loss was adequate to assess Mr. Anderson's disability and that the
evidence did not show that his disability interfered with his ability to be gainfully employed. R. at
271-73. Mr. Anderson appealed to the Board, arguing that his hearing loss forced him to leave his
job in 1977 and disagreeing with the agency finding that his hearing loss did not interfere with his
employment.
In April 2006, the Board affirmed the RO determination awarding a disability rating of 10%.
R. at 1-15. The Board discussed the March 2005 letter from the Director of C&P and the March
2005 RO decision denying entitlement to an extraschedular rating. The Board found that "there is
no showing that the veteran's hearing loss has caused marked interference with employment (i.e.,
beyond that contemplated in the assigned 10[%] rating)." R. at 12 (emphasis in original). This
appeal followed.
II. LAW AND ANALYSIS
Veterans with disabilities resulting from personal injury sustained or disease contracted
during active service and in the line of duty are entitled to service-connected benefits. See 38 U.S.C.
§ 1110. Once a disability has been found to be service connected, VA applies the criteria established
in diagnostic codes (DCs) contained in the VA rating schedule to assign a disability rating. See
38 C.F.R. § 3.321(a) (2008). The degrees of disability for bilateral service-connected hearing loss
are reflected in eleven auditory acuity levels in the rating schedule. See 38 C.F.R. § 4.85, DCs
6100-6110 (2008). Disability ratings for hearing loss are derived from the mechanical process of
applying the rating schedule to the specific numeric scores assigned by audiology testing.
Lendenmann v. Principi, 3 Vet.App. 345, 349 (1992).
Generally, evaluating a disability using either the corresponding or analogous DCs contained
in the rating schedule is sufficient. See 38 C.F.R. §§ 4.20 and 4.27 (2008). For exceptional cases,
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VA has authorized the assignment of extraschedular ratings and provided the following guidance for
awarding such ratings:
To accord justice, therefore, to the exceptional case where the schedular evaluations
are found to be inadequate, the Under Secretary for Benefits or the Director, [C&P],
upon field station submission, is authorized to approve on the basis of the criteria set
forth in this paragraph an extra[]schedular evaluation commensurate with the average
earning capacity impairment due exclusively to the service-connected disability or
disabilities. The governing norm in these exceptional cases is: A finding that the case
presents such an exceptional or unusual disability picture with such related factors
as marked interference with employment or frequent periods of hospitalization as to
render impractical the application of the regular schedular standards.
38 C.F.R. § 3.321(b)(1). As the Court recently explained in Thun, a "determination of whether a
claimant is entitled to an extraschedular rating under § 3.321(b) is a three-step inquiry." Thun v.
Peake, 22 Vet.App. 111, 115 (2008). If the RO or Board determines that (1) the schedular evaluation
does not contemplate the claimant's level of disability and symptomatology, and (2) the disability
picture exhibits other related factors such as marked interference with employment or frequent
periods of hospitalization, then (3) the case must be referred to an authorized official to determine
whether, to accord justice, an extraschedular rating is warranted. Id. Neither the RO nor the Board
is permitted to assign an extraschedular rating in the first instance; rather the matter must initially
be referred to those officials who possess the delegated authority to assign such a rating. See Floyd
v. Brown, 9 Vet.App. 88, 95 (1996).
As with all matters adjudicated by the Board, a Board decision concerning an extraschedular
rating must include a written statement of the reasons or bases for its findings and conclusions on
all material issues of fact and law presented on the record; that statement must be adequate to enable
a claimant to understand the precise basis for the Board's decision, as well as to facilitate informed
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); Gabrielson v. Brown, 7 Vet.App. 36, 39-40 (1994); Gilbert,
supra.
The Court notes that 38 C.F.R. § 3.321(b)(1) also authorizes 1 the Under Secretary for Benefits to approve an
extraschedular rating. Because this particular case was sent to the Compensation and Pension Service we will continue
to refer to that entity, mindful that our analysis would be identical if the Under Secretary for Benefits had been implicated
instead.
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Mr. Anderson argues that the Board exceeded its jurisdiction by overturning DRO findings
that were favorable to his claim. Alternatively, he argues that the statement of reasons or bases
provided for the Board's decision to deny him an extraschedular rating is inadequate because the
Board ignored evidence that his service-connected hearing loss prevented him from advancing in his
preferred career at a telephone company and caused him to quit several jobs.
In the decision on appeal, the Board acknowledged that the matter of an extraschedular rating
for Mr. Anderson's bilateral hearing loss initially had been submitted to the Director of C&P for
extraschedular consideration, who determined that Mr. Anderson's disability did not warrant an
extraschedular evaluation. R. at 11. In its review, the Board agreed with the Director of C&P and
specifically found:
[T]here is no showing that [Mr. Anderson's] hearing loss has caused marked
interference with employment (i.e., beyond that contemplated in the assigned 10[%]
rating) or has required any–much less, frequent–hospitalizations. In the absence of
such factors, or other factors demonstrating that this case involves [an] exceptional
or unusual disability picture so as to render impracticable application of the regular
schedular standards, the criteria of 38 C.F.R. § 3.321(b)(1) for the assignment of an
extraschedular evaluation simply have not been met. . . . To the extent [Mr.
Anderson] may experience functional impairment due to his service[-]connected
hearing loss, the Board finds that such impairment is contemplated in the 10[%]
rating assigned to this disability.
R. at 12.
A. Scope of Board's Review of Extraschedular Rating Denial
Mr. Anderson's argument that the Board exceeded its jurisdiction is based on his belief that
the DRO's referral of his claim to the Director of C&P evinces two implicit favorable findings:
(1) The schedular rating for his bilateral hearing loss was inadequate, and (2) the § 3.321(b)(1)
related factors for an extraschedular rating were established as present in his disability picture. He
asserts that there is no entity in VA that has the authority to revisit those implicit favorable findings
and that, once those findings have been made, the Director of C&P must award the benefit of an
extraschedular rating.1 Mr. Anderson asserts that it is the unfavorable findings in the Director of
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C&P's letter, concluding that an extraschedular rating is not warranted, that he has appealed to the
Board. Accordingly, he argues that the Board's analysis of the factors presented in the DRO's
decision to submit his claim for § 3.321(b)(1) extraschedular consideration was outside the scope
of his appeal, and thus, beyond the Board's jurisdiction.
We do not agree that the Board exceeded its jurisdiction. First, the Court notes that the
present case differs procedurally from Thun, supra. In Thun, the appellant was challenging a finding
by the Board that he had not met the requirements for referral for extraschedular consideration.
Thus, the issue analyzed by the Court in Thun was whether the Board erred in determining that the
threshold requirements for referral for extraschedular consideration had not been met. Although the
Court discussed the process of determining whether a referral was appropriate in terms of "steps,"
the Court did not hold that initial findings with respect to those steps were final and binding on the
Director of C&P, the RO, or the Board. Mr. Anderson misinterprets the three-step inquiry
announced in Thun by attempting to elevate each step into a final and binding agency decision. See
22 Vet.App. at 115 ("determination of whether a claimant is entitled to an extraschedular rating
under § 3.321(b) is a three-step inquiry"). To the extent that the use of the term "steps" as it is used
in Thun is misleading and led to Mr. Anderson’s interpretation, we clarify that the steps are, in fact,
elements that must be established before an extraschedular rating can be awarded and that they are
reviewable by the Board.
Second, although the Board is precluded from initially assigning an extraschedular rating,
there is no restriction on the Board's ability to review the denial of an extraschedular rating on
appeal. See Floyd, 9 Vet.App. at 96-97 (stating that once Board properly refers an extraschedular
rating issue to Director of C&P for review, appellant may "continue[] to appeal the extraschedular
rating aspect of this claim"); see also 38 U.S.C. §§ 511(a), 7104(a) ("All questions in a matter . . .
subject to decision by the Secretary shall be subject to one review on appeal to the . . . Board.");
Disabled Am. Veterans v. Sec'y of Veterans Affairs, 327 F.3d 1339, 1347 (Fed. Cir. 2003) ("Together
[sections] 511(a) and 7104(a) dictate that the Board acts on behalf of the Secretary in making the
ultimate decision on claims and provides 'one review on appeal to the Secretary' of a question
'subject to decision by the Secretary' under [section] 511(a)."). Section 7104, unlike the Court's
jurisdictional statute, contains no limitations on the Board's ability to review favorable findings.
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Compare 38 U.S.C. § 7104(a) with 38 U.S.C. § 7261(a)(4). Indeed, the Board is permitted to review
the entirety of the proceedings below. 38 U.S.C. § 7104(a) (The Board's review is "based on the
entire record in the proceeding and upon consideration of all evidence and material of record"). It
follows that the Board has jurisdiction to review whether the decision not to award an extraschedular
rating was appropriate under all three elements set forth in Thun. See 22 Vet.App. at 116; 38 C.F.R.
§ 3.321(b)(1).
Third, the findings made by the DRO, implied by the act of referring Mr. Anderson's claim
for extraschedular consideration or otherwise, are not binding on the Director of C&P and, in turn,
are not binding on the Board on appeal. As explained above, in relying on Thun to support his
contention, Mr. Anderson misinterprets the three-step inquiry for extraschedular consideration and
mistakenly attempts to elevate each step into a final and binding decision. See 22 Vet.App. at 115
("determination of whether a claimant is entitled to an extraschedular rating under § 3.321(b) is a
three-step inquiry"). It is the Director of C&P who is authorized to approve an extraschedular rating
on the basis of the criteria set forth in 38 C.F.R. § 3.321(b)(1). To not allow that individual to either
affirm or reject the bases for the submission of the claim for extraschedular consideration, as Mr.
Anderson and our concurring colleague suggest, overlooks the specific regulatory authority of the
Director of C&P "to approve" extraschedular awards and contradicts the substantial emphasis the
Court has placed on the requirement that extraschedular consideration, in the first instance, must be
done by one of the individuals specified in § 3.321(b)(1). See Floyd, 9 Vet.App. at 95; see also
Thun, 22 Vet.App. at 116 (Director of C&P determines whether, to accord justice, claimant's
disability picture requires extraschedular rating); Bagwell v. Brown, 9 Vet.App. 337, 339 (1996) (in
first instance, Board is limited to determining whether submission for extraschedular consideration
is appropriate). Moreover, we disagree with our concurring colleague's designation of the RO as
the exclusive entity for performing the fact finding necessary to assess the claimant's level of
disability and symptomatology and the adequacy of the rating schedule given that the regulation
expressly provides for the RO to seek an advisory opinion on these matters. See 38 C.F.R.
§ 3.321(c) ("Cases in which application of the schedule is not understood or the propriety of an
extra[]schedular rating is questionable may be submitted to [the] Central Office for advisory
opinion."). Indeed, even when a case is submitted for extraschedular consideration under
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§ 3.321(b)(1), the analysis performed by the RO or Board is done for the limited purpose of
determining whether referral of the matter for extraschedular consideration is warranted. See Floyd,
supra. The actual review of the matter and approval of an extraschedular rating is done for the first
time by the Director of C&P. 38 C.F.R. § 3.321(b)(1); see Thun, 22 Vet.App. at 115; Floyd, supra.
In this case, Mr. Anderson's claim was referred to the Director of C&P, who then determined
that an extraschedular rating was not warranted because the record did not establish that Mr.
Anderson's hearing loss was so severe as to interfere with his ability to be employed. The RO then
effected that finding by issuing a rating decision denying entitlement to an extraschedular evaluation
based on the letter from the Director of C&P. The Board's review of the RO's decision that Mr.
Anderson is not entitled to a hearing loss rating greater than 10% included a review of whether an extraschedular rating was warranted. See Barringer v. Peake, 22 Vet.App. 242, 243-44 (2008) ("The question of an extraschedular rating is a component of a claim for an increased rating.") (citing Bagwell, 9 Vet.App. at 339). In exercising its appellate authority, the Board then determined that there was no error in the finding below that an extraschedular evaluation was not warranted because the evidence failed to show that the rating schedule was inadequate or that there was marked interference with employment. R. at 12. Accordingly, the Court holds that the Board did not exceed
its jurisdiction when it determined that Mr. Anderson was not entitled to an extraschedular
evaluation for his bilateral hearing disability. See Thun, 22 Vet.App. at 115; 38 C.F.R. § 3.321(b)(1).
B. Board's Adjudication of Extraschedular Evaluation
Mr. Anderson further argues that to the extent it was appropriate for the Board to review the
factors concerning whether an extraschedular rating was warranted, the Board failed to provide an
adequate statement of reasons or bases for its determination. The Board found that an extraschedular
rating was not appropriate after finding that the functional impairments of Mr. Anderson's bilateral
hearing loss were contemplated by his schedular 10% disability rating. R. at 10-11. Mr. Anderson
argues that this finding amounts to a denial of an extraschedular rating on the basis that his disability
picture does not meet the initial threshold for establishing that an extraschedular rating is warranted.
See Thun, 22 Vet.App. at 118 ("[I]n cases regarding whether extraschedular referral is warranted,
the threshold determination is whether the disability picture presented in the record is adequately
contemplated by the rating schedule.").
Mr. Anderson's statements that his hearing loss disability 2 caused a loss of hypothetical employment
advancement opportunities and an inability to work in his preferred career field (see Appellant's Brief at 6-7) have little
relevance to the threshold inquiry into the adequacy of the rating schedule for his actual level of disability and
symptomatology for 38 C.F.R. § 3.321. Cf. Thun, 22 Vet.App. at 117 n.3 (loss of income is not relevant to threshold
determination of adequacy of schedular rating). Moreover, to the extent that Mr. Anderson argues that he is entitled to
an extraschedular rating because his hearing loss resulted in unemployability, that is an argument relating to a rating of
total disability based on individual unemployability (TDIU), a matter that is not before the Court at this time. See
38 C.F.R. §§ 4.15, 4.16 (b) (2008) (all veterans who are unemployable by reason of service-connected disability shall
be rated totally disabled); see also Kellar v. Brown, 6 Vet.App. 157 (1994) (evaluations regarding employability in
§ 4.16 and interference with employment contained in § 3.321(b)(1) are different metrics); Stanton v. Brown, 5 Vet.App.
563, 564-70 (1993) (issue of extraschedular rating is separate from issue of TDIU rating).
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Although, as mentioned above, the propriety of the decision on all elements leading to an
extraschedular rating is within the Board's purview, here the Board's analysis lacked an articulation
of the actual symptoms and functional impairments alleged by Mr. Anderson. See R. at 1-13. The
Board noted that Mr. Anderson had not worked in over 30 years at the telephone company but the
Board failed to discuss his statements throughout the record asserting that his hearing loss resulted
in difficulty with communicating with others in work and social conversations, including his
employment as a real estate agent from 1978 to 1984, and in property maintenance from 1984 to
1997. R. at 11; see R. 236-38, 290-91. Because the Board's description of Mr. Anderson's disability
picture presented by the record is incomplete, its analysis of whether that disability picture is
adequately contemplated by the rating schedule is necessarily flawed.2 See Thun, supra.
Accordingly, the Board's decision that Mr. Anderson's service-connected condition does not warrant
an extraschedular evaluation is not supported by an adequate statement of reasons or bases to
facilitate the Court's review and remand is appropriate. See Allday and Gilbert, both supra; see also
Tucker v. West, 11 Vet.App. 369, 374 (1998) (remand appropriate when Board, inter alia, fails to
provide adequate statement of reasons or bases); see also Floyd, 9 Vet.App. at 96-97 ("If the Board
does proceed in compliance with the correct regulatory procedures and the appellant then continues
to appeal the extraschedular rating aspect of this claim, the Board will be required to articulate its
findings of fact and sufficient reasons or bases thereupon on the extraschedular consideration
issue."). On remand, Mr. Anderson may present any additional evidence and argument in support
of the matter remanded, and the Board must consider any evidence and argument so presented. See
Kay v. Principi, 16 Vet.App. 529, 534 (2002).
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III. CONCLUSION
Upon consideration of the foregoing analysis, the record on appeal, and the parties' pleadings,
the Board's April 4, 2006, decision is VACATED and the matter is REMANDED for readjudication.
SCHOELEN, Judge, concurring: Although I concur in the majority's ultimate holding, I
respectfully dissent from the part of the decision that discusses the respective roles of the Director
of C&P and the RO in cases meriting extraschedular consideration.
The majority adopted the
Secretary's position at oral argument that the Director of C&P is authorized to review whether the
RO or the Board appropriately referred the appellant's case for extraschedular consideration–in effect, the analysis required by Thun steps 1 and 2. See Thun v. Peake, 22 Vet.App. 111, 115-16 (2008). I believe that the Secretary's interpretation of the C&P director's province in this respect is
inconsistent with 38 C.F.R. § 3.321(b)(1) (2008), and therefore is entitled to little, if any, deference. See Auer v. Robbins, 519 U.S. 452, 461 (1997) (confirming that an agency's interpretations of its own regulations is "controlling unless 'plainly erroneous or inconsistent with the regulation'")
(quoting Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 359 (1989)); Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 212 (1988) (declining to defer to "agency litigating positions that are wholly unsupported by regulations, rulings, or administrative practice").

As this Court noted in Floyd v. Brown, "the determination involving an increased disability rating on an extra[]schedular basis is subject to the procedural requirements laid out in 38 C.F.R. § 3.321(b)(1)." Floyd, 9 Vet.App. 88, 95 (1996). To begin, the RO or Board must determine that
the "schedular evaluations are . . . inadequate." 38 C.F.R. § 3.321(b)(1); see Floyd, 9 Vet.App. at
95 (holding that § 3.321(b)(1) allows the Board to "consider[] whether referral to the appropriate
first-line officials is required") (emphasis omitted) (emphasis added). As the Court explained in
Thun, such determination by the Board or RO involves a two-step inquiry. Thun, 22 Vet.App at 115-
116. First, the RO or the Board must compare "the level of severity and symptomatology of the
claimant's service-connected disability with the established criteria found in the rating schedule for
that disability." Id. at 115. Second, "if the schedular evaluation does not contemplate the claimant's
level of disability and symptomatology and is found inadequate, the RO or Board must determine
whether the claimant's exceptional disability picture exhibits other related factors such as those
provided by the regulation as 'governing norms.'" Id. at 115-16; accord Floyd, 9 Vet.App. at 97 ("As
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written, 38 C.F.R. § 3.321 provides a criterion ('an exceptional or unusual disability picture with
such related factors as marked interference with employment or frequent periods of hospitalization
as to render impractical the application of the regular schedular standards') for determining whether
extra[]schedular consideration is warranted.") (emphasis added).
"Where the schedular evaluations are found to be inadequate," the RO or Board must then
submit the case to the Director of C&P. 38 C.F.R. § 3.321(b)(1); Floyd, 9 Vet.App. at 95 ("[T]he
correct course of action for the Board in extra[]schedular consideration cases such as this one is to
raise the issue and remand it for the proper procedural actions outlined in 38 C.F.R. § 3.321(b)(1).").
I see nothing in the regulation to enable the Director of C&P to question whether the RO or Board
properly found the schedular evaluations to be inadequate. Instead, upon submission by the RO or
Board, the Director of C&P is authorized only to "approve . . . an extra[]schedular evaluation
commensurate with the average earning capacity impairment due exclusively to the serviceconnected
disability." 38 C.F.R. § 3.321(b)(1). As the Floyd Court explained, "38 C.F.R.
§ 3.321(b)(1) acts as a funnel to channel requests for an extra[]schedular rating through certain
officials who possess the delegated authority to assign such a rating." Floyd, 9 Vet.App. at 95.
Such delegation of authority is appropriate, given the respective roles of the Director of C&P
and the RO and the Board in adjudicating claims for VA benefits. Specifically, the Director of C&P has been delegated the authority to draft the rating schedule, based "as far as practicable, upon the average impairments of earning capacity resulting from such injuries in civil occupations." 38 U.S.C. §1155; see also 38 U.S.C. § 501(a); 38 C.F.R. §§ 2.6(b)(1), 3.100 (2008). The Director of C&P's expertise is in determining the average earning capacity impairment due exclusively to the service-connected disability. See 38 C.F.R. § 3.321(b)(1). This makes the Director of C&P uniquely suited to determining what extraschedular rating level is warranted. On the other hand, the RO and
the Board have expertise in applying the facts of each respective case to the rating schedule. See
Moore v. Nicholson, 21 Vet.App. 211, 218 (2007) (holding that it is the job of a rating examiner to
interpret medical reports of record and determine "[h]ow [the appellant's] disabilities translate into
a potentially compensable disability"); 38 U.S.C. §§ 511, 7104, 7703; 38 C.F.R. §§ 4.1 ("This rating
schedule is primarily a guide in the evaluation of disability resulting from all types of diseases and
injuries encountered as a result of or incident to military service."), 4.2 ("It is the responsibility of
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the rating specialist to interpret reports of examination in the light of the whole recorded history, reconciling the various reports into a consistent picture so that the current rating may accurately reflect the elements of disability present."), 4.7 ("Where there is a question as to which of two evaluations shall be applied, the higher evaluation will be assigned if the disability picture more nearly approximates the criteria required for that rating."), 20.101(a) (2008) ("[T]he Board is bound by applicable statutes, the regulations of the Department of Veterans Affairs and precedent opinions of the General Counsel of the Department of Veterans Affairs."); see also Bernard v. Brown, 4 Vet.App. 384, 390 (1993) ("Under the governing statutes and regulations, the Board's jurisdiction is limited to deciding questions in 'appeals' of decisions by the Secretary or his delegates.") (citing
38 U.S.C. § 7104)). Unlike the Director of C&P, it is the province of the RO and Board to engage
in fact-finding in the first instance, which makes them the best entities within VA to assess the
claimant's level of disability and symptomatology and to determine whether the schedular evaluation
contemplates those symptoms, and whether the claimant's disability picture exhibits other related
factors such as those provided by the regulation as "governing norms." Hensley v. West, 212 F.3d
1255, 1263 (2000) (citing 38 U.S.C. § 7261(a)(4), (c)); see also Thun, 22 Vet.App. at 115; Moore,
21 Vet.App. at 219 ("Rating specialists determine, through the rating schedule, the effect of a disability on a claimant's ability to earn a living."). By sanctioning the Director of C&P's analysis of the factors already considered by the RO or Board, the majority effectively transforms the Director of C&P into a fact-finder.
Further, authorizing the Director of C&P to overrule the Board's findings with respect to the adequacy of the schedular evaluations would frustrate the Board's appellate authority. See 38 U.S.C. § 7104(a). Similarly, if the Director of C&P is able to set aside the RO's findings with respect to the
first two Thun, supra, steps, the RO would be handcuffed in its ability to adequately compensate a veteran. See 38 C.F.R. § 4.2.
I would hold that the Secretary's position in this respect is inconsistent with both
administrative practice and 38 C.F.R. § 3.321(b)(1); accordingly the Court is not required to defer to the Secretary's position. See Auer and Georgetown Univ. Hosp., both supra. Therefore, I respectfully concur with the majority's decision, but not its discussion pertaining to the role of the Director of C&P.

Denied entitlement on a basis other than that presumed by a veteran who "served in the Republic of Vietnam" under 38 U.S.C. § 1116

CONCLUSION
Based on the foregoing analysis and a review of the record on appeal, the February 20, 2004, Board decision is VACATED to the extent it denied entitlement to service connection for type-II diabetes mellitus with peripheral neuropathy, nephropathy, and retinopathy on a basis other than that presumed by a veteran who "served in the Republic of Vietnam" under 38 U.S.C. § 1116, and the
claim is REMANDED for further proceedings consistent with this opinion.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++


"Neuropathy" is defined as "a disease involving the c 1 ranial nerves or the peripheral or autonomic nervous
system"; "nephropathy" is "any disease of the kidney"; and "retinopathy" is a "noninflammatory degenerative disease
of the retina." STEDMAN'S MEDICAL DICTIONARY 1211, 1191, 1560 (27th ed. 2000).
UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS
NO. 04-0491
JONATHAN L. HAAS, APPELLANT
V.
ERIC K. SHINSEKI,
SECRETARY OF VETERANS AFFAIRS, APPELLEE.
On Remand from the U.S. Court of Appeals for the Federal Circuit
(Decided March 10, 2009)
Louis J. George and Barton F. Stichman, both of Washington, D.C., were on the brief for
the appellant.
Paul J. Hutter, General Counsel; R. Randall Campbell, Assistant General Counsel; Brian
B. Rippel, Deputy Assistant General Counsel, and William L. Puchnick, all of Washington, D.C.,
were on the brief for the appellee.
Before HAGEL, MOORMAN, and LANCE, Judges.
MOORMAN, Judge: The appellant, U.S. Navy veteran Jonathan L. Haas, appeals a
February 20, 2004, Board of Veterans' Appeals (Board) decision that denied entitlement to service
connection for diabetes mellitus, with peripheral neuropathy, nephropathy, and retinopathy, all
secondary to exposure to herbicide agents during his Vietnam-era service.1 Record (R.) at 11.
Following the submission of briefs and oral argument, the Court issued a unanimous opinion on
August 16, 2006, reversing the Board's determination that the appellant was not entitled to the
presumption of exposure to herbicides and remanding for readjudication. Haas v. Nicholson,
20 Vet.App. 257 (2006). Subsequently, this Court's decision was reversed by the U.S. Court of
2
Appeals for the Federal Circuit (Federal Circuit) in a 2-to-1 decision, and the matter was remanded.
Haas v. Peake, 525 F.3d 1168 (Fed. Cir. 2008), cert. denied, 129 S. Ct. 1002 (U.S. Jan. 21, 2009).
The Federal Circuit issued its mandate on October 16, 2008. For the following reasons, the Court
will vacate in part the Board decision and will remand the claim for further proceedings consistent
with this opinion.
I. BACKGROUND
In Haas v. Nicholson, this Court held that 38 U.S.C. §1116(f) is ambiguous as to the phrase
"served in the Republic of Vietnam" and that this statute did not by its terms limit application of the
presumption of service connection for herbicide exposure to those who set foot on the soil of the
Republic of Vietnam. 20 Vet.App. at 263-65. The Court further held that the Secretary's regulation,
38 C.F.R. § 3.307(a)(6)(iii), is ambiguous regarding whether service on the land in Vietnam is
required for the presumption to apply and that the Secretary's interpretation of its regulatory
definition of the phrase was plainly erroneous and unreasonable and, therefore, not entitled to
deference. Id. at 269-75. Finally, the Court held that the provisions of the VA Adjudication
Procedure Manual (M21-1) in effect at the time the appellant filed his claim in 2001 entitled him
to a presumption of service connection based upon his receipt of the Vietnam Service Medal (VSM);
and that VA's attempt to rescind that version of the M21-1 provision more favorable to the appellant
was ineffective because VA did not comply with the notice and comment requirements of the
Administrative Procedures Act (APA), 5 U.S.C. § 706(2)(A). Haas, 20 Vet.App. at 275-78. The
Court also determined that, in light of its reversal as to presumptive service connection, it was not
necessary to consider the Secretary's concession for a remand under direct service-connection
principles. Id. at 278-79.
In reviewing this Court's decision in Haas v. Nicholson, the Federal Circuit held that the
phrase "served in the Republic of Vietnam" in section 1116 is ambiguous and further held that the
Secretary's requirement that a veteran have been present within the land borders of Vietnam at some
point in the course of his duty constitutes a permissible interpretation of the statute and its
implementing regulation. Haas v. Peake, 525 F.3d at 1183, 1187-95. The Federal Circuit concluded
that the pertinent pre-2002 version of the M 21-1 was an interpretative statement, not a substantive
3
rule that could be amended only by APA notice-and-comment rulemaking. Id. at 1196. The Federal
Circuit, therefore, reversed this Court's judgment.
II. ANALYSIS
Based on the Federal Circuit's binding precedent in its decision on this appeal, see Bethea
v. Derwinski, 2 Vet.App. 252, 254 (1992), this Court will affirm that part of the Board decision that
denied service connection for type-II diabetes mellitus, peripheral neuropathy, nephropathy, and
retinopathy, claimed as loss of eyesight, based on a presumption that he was exposed to herbicides.
Regarding entitlement to service connection for diabetes mellitus, peripheral neuropathy,
nephropathy, and retinopathy, claimed as loss of eyesight, on a direct service-connection basis, the
Secretary concedes that a remand is warranted. First, the Secretary concedes that a remand is
warranted because the Board provided an inadequate statement of reasons or bases for its decision.
Secretary's Brief at 14-16. The Secretary notes that the Board overlooked certain service medical
records (SMRs), including an August 1968 provisional diagnosis of "R/O [rule out] diabetes
mellitus" (R. at 140) and did not discuss an October 1967 medical record showing an "abnormal
glucose tolerance test," which was found not to have existed prior to enlistment (R. at 124). See
R. at 15-16 (Form DD 214, Certificate of Release or Discharge from Active Duty, certifying
Mr. Haas's service on active duty in the U.S. Navy from September 1959 to September 1960, and
from May 1963 to June 1970).
The Court agrees with the Secretary's concession of error. In its decision here on appeal, the
Board concluded that "[t]he appellant's service medical records are silent as to diabetes." R. at 5.
The Board's conclusion lacked an adequate statement of reasons or bases because it failed to address
the relevant SMRs noted above, and the decision frustrates judicial review. See 38 U.S.C. § 7104(a)
(requiring Board decision to be based on consideration of all evidence and material of record);
38 U.S.C. § 7104(d) (requiring Board decision to include reasons or bases for findings and
conclusions on all material issues of fact and law presented on the record); Allday v. Brown,
7 Vet.App. 517, 527 (1995) (holding that Board's statement must be adequate to enable a claimant
to understand the precise basis for its decision, as well as to facilitate review in this Court). Because
the Board's statement of reasons or bases is inadequate, remand is appropriate. See Tucker v. West,
11 Vet.App. 369, 374 (1998) (remand is appropriate "where the Board has incorrectly applied the
4
law, failed to provide an adequate statement of reasons or bases for its determinations, or where the
record is otherwise inadequate"). The Court will vacate the Board's determination that type-II
diabetes mellitus with peripheral neuropathy, nephropathy, and retinopathy (claimed as loss of
eyesight) "was not incurred in or aggravated during active service." R. at 3, 8.
Second, the Secretary concedes that a remand is warranted because VA failed to provide the
appellant with a VA medical examination. In the decision here on appeal, the Board noted that the
appellant was not afforded a VA examination, but stated "the Board sees no areas in which further
development may be fruitful" and that the duty to assist had been "substantially met by the RO
[(regional office)]." R. at 10. The Secretary concedes that the Board failed to ensure VA
compliance with its duty to assist by providing the appellant with a VA medical examination to
determine the etiology of his type-II diabetes, to include peripheral neuropathy, nephropathy, and
retinopathy (claimed as loss of eyesight). Secretary's Brief at 14-18. The Secretary specifically
states that a current VA examination is warranted to determine whether it is at least as likely as not
that the appellant's type-II diabetes mellitus was incurred in or aggravated by active service and to
determine whether it is at least as likely as not that either peripheral neuropathy, nephropathy, or
retinopathy (claimed as loss of eyesight) is due to service or secondary to diabetes mellitus. Id. at
18. The Court agrees.
In disability compensation claims, the Secretary's duty to assist requires that he provide a VA
medical examination when there is (1) competent evidence of a current disability or persistent or
recurrent symptoms of a disability, and (2) evidence establishing that an event, injury or disease
occurred in service or establishing certain diseases manifesting during an applicable presumptive
period for which the claimant qualifies, and (3) an indication that the disability or persistent or
recurrent symptoms of a disability may be associated with the veteran's service or with another
service-connected disability, but (4) insufficient competent medical evidence on file for the
Secretary to make a decision on the claim. 38 U.S.C. § 5103A(d); Paralyzed Veterans of Am. v.
Sec'y of Veterans Affairs, 345 F.3d 1334, 1354 (Fed. Cir. 2003); Wells v. Principi, 326 F.3d 1381,
1384 (Fed. Cir. 2003); McLendon v. Nicholson, 20 Vet.App. 79, 81 (2006); 38 C.F.R.
§ 3.159(c)(4)(i)(2008). When determining whether an examination is necessary under section
5103A(d), the Secretary shall consider the evidence of record, taking into consideration "all
information and lay or medical evidence (including statements of the claimant)." 38 U.S.C.
5
§ 5103A(d)(2). Further, "[t]he Board's ultimate conclusion that a medical examination is not
necessary pursuant to [38 U.S.C. § 5103A(d)] is reviewed under the 'arbitrary, capricious, an abuse
of discretion, or otherwise not in accordance with law' standard of review." McLendon, 20 Vet.App.
at 81; see 38 U.S.C. § 7261(a)(3)(A).
The Court agrees with the Secretary that the Board erred in its determination that the duty
to assist did not require VA to provide a medical examination. Turning to the factors enumerated
in McLendon, the Board acknowledged that the appellant has a current diagnosis of diabetes. R. at
8. The "in-service event" is, as conceded by the Secretary, the appellant's SMRs that include the
October 1967 medical report showing an "abnormal glucose tolerance test" and an August 1968
provisional diagnosis of "R/O [rule out] diabetes mellitus." R. at 124, 140. This is sufficient to
satisfy the second prong of McLendon.
The third prong, requiring that the evidence of record "indicate" that "the claimed disability
or symptoms may be associated with the established event," establishes "a low threshold" for
determining when the Secretary is required to furnish a medical examination. 20 Vet.App. at 83.
The Court went on to note that "[t]he types of evidence that 'indicate' that a current disability 'may
be associated' with military service include, but are not limited to, medical evidence that suggests
a nexus but is too equivocal or lacking in specificity to support a decision on the merits, or credible
evidence of continuity of symptomatology such as pain or other symptoms capable of lay
observation." Id. In this case, as noted by the Secretary, the appellant has stated that his disabilities
(diabetes, peripheral neuropathy, and loss of eyesight) began in 1980, and he received treatment at
a VA hospital in Phoenix, Arizona. R. at 318; see also R. at 566 (July 15, 2003, sworn testimony
of Mr. Haas noting that he was 38 or 39 years old when he "first came down with diabetes"). The
Court is satisfied with the Secretary's concession that this evidence is sufficient to meet the "low
threshold" referenced in McLendon. The evidence of record "indicates" that the appellant's diabetes
"may be associated" with service. McLendon, supra; 38 C.F.R. § 3.159(c)(4)(i).
Finally, addressing the fourth McLendon prong, "if there is sufficient competent medical
evidence on file for the Secretary to make a decision on the claim, he may proceed to do so without
having to provide a medical examination." McLendon, 20 Vet.App. at 84-85. Here, there was no
competent medical evidence on the issue whether the appellant's current disability was more likely
than not caused by service. Here, the Board found that "there was no need for medical information."
6
Despite the evidence referenced above, the Board concluded that the duty to assist did not require
VA to obtain a medical examination. R. at 10. The Board's ultimate conclusion that a medical
examination was not necessary pursuant to 38 U.S.C. § 5103A(d) was "arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law."
Therefore, the appellant's claim will be remanded in order for VA to provide such an
examination, including an opinion as to whether it is at least as likely as not that the appellant's type-
II diabetes mellitus was incurred in or aggravated by active service and to determine whether it is
at least as likely as not that either peripheral neuropathy, nephropathy, or retinopathy (claimed as
loss of eyesight) is due to service or secondary to diabetes mellitus.
On remand, the appellant is free to submit additional evidence and argument on the
remanded matters, which the Board must consider when readjudicating his claim. See Kay v.
Principi, 16 Vet.App. 529, 534 (2002); Kutscherousky v. West, 12 Vet.App. 369, 372-73 (1999) (per
curiam order). In this regard, as noted by the Federal Circuit in its decision, the appellant is free to
pursue his claim that "he was actually exposed to herbicides while on board his ship as it traveled
near the Vietnamese coast." Haas v. Peake, 525 F.3d at 1197; see, e.g., R. at 564 (July 2003 sworn
testimony of Mr. Haas explaining that, while resupplying coastal vessels in the patrol waters off the
coast of Vietnam, he saw large clouds of chemicals being dropped by aircraft and that "these large
clouds would drift out over the water because of the prevailing offshore winds and they would
engulf the ships, my ship in particular. Now, you could see the chemicals, you could taste them,
smell them and they landed on your skin. We had Army personnel on the ship, uh, at this particular
time. I inquired what the chemicals were and they told me it was Agent Orange."). The Court notes
that such claim appears to be based on the assertion that the land was sprayed and the clouds of
chemicals then drifted out over the water; such claim, therefore, need not depend on there being
evidence "demonstrating that this ship was located in waters sprayed by herbicides." R. at 7. To
the extent that the Board rejected the appellant's allegation that his ship was "enveloped by clouds
of herbicide agents," the Board's determination was not supported by an adequate statement of
reasons or bases. On remand, the appellant is free to clarify his argument for the Board.
On remand, the Board must consider all evidence, including lay evidence, and any Board
decision on remand must include a determination on the credibility and probative value of all lay
and medical evidence of record, and the Board must provide an adequate statement of the reasons
7
or bases for its decision. See Buchanan v. Nicholson, 451 F.3d 1331, 1336 (Fed. Cir. 2006)
(discussing Board's obligations in assessing credibility of lay statements); see also Jandreau v.
Nicholson, 492 F.3d 1372, 1377 (Fed. Cir. 2007) (holding that "[w]hether lay evidence is competent
and sufficient in a particular case is a fact issue to be addressed by the Board"); Washington v.
Nicholson, 19 Vet.App. 362, 367-68 (2005) (noting that it is the Board's responsibility to "assess the
credibility of, and weight to be given to," the evidence of record). The Board and the RO must
provide expeditious treatment of this matter on remand. See 38 U.S.C. §§ 5109B, 7112.
III. CONCLUSION
Based on the foregoing analysis and a review of the record on appeal, the February 20, 2004,
Board decision is VACATED to the extent it denied entitlement to service connection for type-II
diabetes mellitus with peripheral neuropathy, nephropathy, and retinopathy on a basis other than that
presumed by a veteran who "served in the Republic of Vietnam" under 38 U.S.C. § 1116,
and the
claim is REMANDED for further proceedings consistent with this opinion.

Failure to discuss & comply with 38 C.F.R. § 3.354(b)

"nor is there any discussion of the Board's effort to comply with the regulation requiring the Secretary to obtain all procurable evidence relating to the circumstances.6 See R. at 1-12; 38 C.F.R. § 3.354(b)."


UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS
NO. 06-3600
HENRY L. GARDNER, APPELLANT,
V.
ERIK K. SHINSEKI,
SECRETARY OF VETERANS AFFAIRS, APPELLEE.
On Appeal from the Board of Veterans Appeals
(Argued December 4, 2008 Decided March 13, 2009)
Michael R. Viterna, of Northville, Michigan, for the appellant.
Robert Schneider, with Richard Mayerick, Deputy Assistant General Counsel, R. Randall
Campbell, Assistant General Counsel, Paul J. Hutter, General Counsel, all of Washington, D.C., for
the appellee.
Before GREENE, Chief Judge, HAGEL and MOORMAN, Judges.
GREENE, Chief Judge: Henry L. Gardner appeals, through counsel, a December 11, 2006,
decision of the Board of Veterans' Appeals (Board) that found that the character of his discharge
from service barred him from receiving VA compensation benefits. Record (R.) at 1-12. Mr.
Gardner argues that in making that finding, the Board failed to provide an adequate statement of
reasons or bases for its determination that he was not insane at the time that he committed the
offenses that led to his discharge. For the reasons that follow, the December 2006 Board decision
will be vacated and the matter remanded for readjudication.
I. FACTS
Mr. Gardner served in the U.S. Marine Corps from July 1967 to January 1972, including
service in Vietnam. R. at 16. On August 19, 1968, he was convicted by general court-martial for
being absent without leave on several occasions from May through July of 1968. R. at 103-04, 119.
While incarcerated in the Da Nang prison in Vietnam, Mr. Gardner was involved in a prison riot that
2
occurred between August 16 and 18, 1968. See R. at 72-73, 107, 111. On January 30, 1969, he was
again court-martialed and charged with inciting a riot, participating in a mutiny, and committing an
assault. R. at 111. He was deemed to have the requisite mental capacity, found guilty, and sentenced
to three years confinement at hard labor, forfeiture of all pay and allowances, and a dishonorable
discharge. R. at 111-30. In March 1969, he was transferred to the Naval Disciplinary Command in
Portsmouth, New Hampshire. R. at 70. In April 1969, he underwent neuropsychiatric screening that
revealed no evidence of psychosis or neurosis and he was diagnosed with having a sociopathic
personality. R. at 48. In June 1969, his sentence in the second court-martial was approved by the
commanding general and in December 1969, the Navy Court of Military Review affirmed that
conviction and sentence. R. at 106-110. In February 1970, the U.S. Court of Military Appeals
denied Mr. Gardner's petition for review. R. at 94.
While confined in New Hampshire, in December 1970, Mr. Gardner was charged with lifting
a weapon against a superior officer, refusing to obey an order, unlawful assembly, willful
disobedience, assault, and communicating a threat. R. at 90-91. Mr. Gardner was examined by a
Mental Competency Board (MCB) in February 1971 concerning his mental state at the time of these
offenses and his ability to stand trial by general court-martial. He was found to be "competent to
stand trial, capable of aiding in his own defense and mentally responsible for the offenses charged
against him." R. at 62. In April 1971, he was convicted by general court-martial on four charges and
again received a dishonorable discharge and an additional two years confinement at hard labor. See
R. at 91. In July 1971, it was reported that he had remained uncontrollable since the time of his
court-martial and had exhibited a mental status consistent with a psychotic thought process. R. at
72. He was diagnosed with having schizophrenia, schizo-affective type, and transferred to the U.S.
Naval Hospital in Philadelphia, Pennsylvania, for treatment. R. at 70, 72. After evaluation and
treatment, psychiatrists at the U.S. Naval Hospital opined that Mr. Gardner was schizophrenic and
recommended against further disciplinary confinement and in favor of hospitalization. R. at 85. In
December 1971, the General Court-Martial Convening Authority, then having jurisdiction over Mr.
Gardner, issued an Action of the Convening Authority that stated in part:
[I]n view of the Naval Hospital, Philadelphia, Pennsylvania, Medical Board's finding
that the accused's mental state had deteriorated subsequent to trial to the point of
Prior to 2003, DD-260 was the form number for a dishonorable discharge certificate f 1 rom service in the U.S.
Navy or Marine Corps. See generally 10 U.S.C. § 1168.
2 The Court notes that this action is permitted under this Court's decision in Bernard v. Brown, 4 Vet.App. 384,
390-92 (1993). However, the decision of the U.S. Court of Appeals for the Federal Circuit in Disabled Am. Veterans
v. Sec'y of Veterans Affairs, 327 F.3d 1339, 1346-48 (Fed. Cir. 2003) calls into question the ability of the Board to
reopen a claim and decide the matter on the merits without remanding the claim to a regional office for a decision on the
merits in the first instance. Because neither party raised this issue, however, the Court will not address it.
3
mental incompetency and the concomitant difficulty in executing the sentence, [the
sentence] is disapproved in toto.
R. at 92. Mr. Gardner's DD 214 reflects that he was discharged in January 1972 "under conditions
other than honorable" and that he received a DD Form 260.1 R. at 17.
In April 1974, Mr. Gardner claimed VA service connection for a mental illness. R. at 214-
17. In November 1974, a VA regional office (RO) denied his claim after finding that his character
of discharge barred him from receiving VA benefits. R. at 239. Mr. Gardner did not appeal and that
decision became final. See R. at 1-1398.
Mr. Gardner claimed VA service connection several times between May 2000 and January
2003. R. at 249-52, 294, 312, 316-17, 324, 389-97, 870. In June 2003, the RO found that new and
material evidence had not been submitted to reopen his previously and finally denied claim. R. at
437-38. Mr. Gardner appealed that decision and, after a remand for further development, the Board
found that his testimony that he was insane when committing his offenses in Vietnam and while in
confinement in New Hampshire was new and material evidence sufficient to reopen his previously
denied claim. R. at 10. After overturning the RO's determination that new and material evidence
had not been submitted, the Board reopened Mr. Gardner's claim for compensation, but denied it on
the merits, concluding that "the evidence of record does not establish that the appellant was insane,
as that term is defined by applicable regulation, at any time during his military service," and thus,
his discharge still remained a bar to his receiving VA benefits.2 R. at 11. This appeal followed.
II. ARGUMENTS
Mr. Gardner argues that the Board's statement of reasons or bases for its determination that
he was not insane at the time he committed the offenses that led to his discharge is inadequate
because the Board failed to apply the VA standard for determining insanity set out in 38 C.F.R.
4
§ 3.354(a) and did not address whether VA should have assisted him in this determination by
providing him a medical opinion under 38 U.S.C. § 5103A. Appellant's Brief (Br.) at 14, 17. The
Secretary asserts that the Board found that there was no evidence that Mr. Gardner was insane due
to disease nor evidence that he did not know or understand the nature of his actions and that these
findings are the "touchstones" of the § 3.354(a) insanity definition. Secretary's Br. at 10.
Additionally, the Secretary maintains that VA had no duty to assist Mr. Gardner because he has not
established veteran status and that the evidence of record provided the Board with a plausible basis
for its decision. Id. at 13-14.
III. LAW AND ANALYSIS
A. Character of Discharge and Insanity Determinations
"In order to qualify for VA benefits, a claimant . . . or the party upon whose service the
claimant predicates the claim . . . [must be] a 'veteran.'" Cropper v. Brown, 6 Vet.App. 450, 452
(1994); see D'Amico v. West, 209 F.3d 1322, 1327 (Fed. Cir. 2000). A veteran is defined as "a
person who served in the active military, naval, or air service, and who was discharged or released
therefrom under conditions other than dishonorable." 38 U.S.C. § 101(2); see 38 C.F.R. § 3.1(d)
(2008). Additionally, the receipt of a discharge from a sentence of a general court-martial usually
bars entitlement to VA benefits. See 38 U.S.C. § 5303; 38 C.F.R. § 3.12 (2008). However,
subparagraph (b) of section 5303 states:
[I]f it is established to the satisfaction of the Secretary that, at the time of the
commission of an offense leading to a person's court-martial, discharge, or
resignation, that person was insane, such person shall not be precluded from benefits
under laws administered by the Secretary.
38 U.S.C. § 5303(b); see 38 C.F.R. § 3.12(b) (implementing regulation). Under VA regulation, the
Secretary has defined an insane person as one
who, while not mentally defective or constitutionally psychopathic, except when a
psychosis has been engrafted upon such basic condition, exhibits, due to disease, a
more or less prolonged deviation from his normal method of behavior; or who
interferes with the peace of society; or who has so departed (become antisocial) from
the accepted standards of the community to which by birth and education he belongs
as to lack the adaptability to make further adjustment to the social customs of the
community in which he resides.
5
38 C.F.R. § 3.354 (a) (2008); see Zang v. Brown, 8 Vet.App. 246, 253 (1995) (stating that phrase
"due to disease" applies to all three circumstances provided in § 3.354(a)); see also VA Gen. Coun.
Prec. 20-97 (May 22, 1997) (clarifying VA's definition of insanity). Although insanity need not be
causally connected to the misconduct that led to the discharge, it must be concurrent with that
misconduct and requires competent medical evidence to establish a diagnosis. See Beck v. West,
13 Vet.App. 535, 539 (2000); Zang, 8 Vet.App. at 254-55; 38 C.F.R. § 3.354(a).
When determining whether a veteran was insane at the time of a committed offense, the
rating agency will "base its decision on all the evidence procurable relating to the period involved."
38 C.F.R. § 3.354(b). The Court reviews the Board's factual decision in this regard under the
"clearly erroneous" standard of review. 38 U.S.C. § 7261(a)(4); see Beck, supra; Gilbert v.
Derwinski, 1 Vet.App. 49, 52-53 (1990). Further, the Board is required to provide a written
statement of the reasons or bases for its findings and conclusions on all material issues of fact and
law presented on the record; the statement must be adequate to enable a claimant 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, 1 Vet.App. at 57.
Here, the Board concluded that "the evidence of record does not establish that the appellant
was insane, as that term is defined by applicable regulation, at any time during his military service."
R. at 11. In support of this conclusion, the Board found that while Mr. Gardner's offenses "clearly
interfered with the peace of society, the contemporaneous medical records shortly following the
incident show that his behavior was attributed to a personality disorder, with no reference to an
inability to discern the effects of his behavior." Id. Additionally, the Board determined that "there
is no indication that [Mr. Gardner]'s behavior at the time of his offenses resulted from any disease
which placed [his] mental capacity beyond his control." Id.
A review of the record reveals that the Board has misapplied the definition of insanity
contained in § 3.354(a). Notably, the Board considered whether Mr. Gardner was able to discern the
effects of his behavior and whether any disease placed his mental capacity beyond his control. R. at
11. Although these elements are common components of insanity definitions used in criminal cases,
as described by the Model Penal Code (MPC) and the Uniform Code of Military Justice, such
elements are absent from the VA regulatory definition of insanity. Compare 38 C.F.R. § 3.354(a)
Indeed, the Secretary has previously been alerted that the 3 inconsistency between the 38 C.F.R. § 3.354(a)
(2008) definition of insanity and regulations governing willful misconduct illustrates a "'confusing tapestry' of VA
regulations which should be the subject of review and reevaluation." Zang, 8 Vet.App. at 255(Steinberg, J., separate
views). While the 1997 VA General Counsel opinion has reaffirmed VA's understanding of our holding in Zang, we see
no evidence that VA has remedied the confusion we are again confronted with today. See VA Gen. Coun. Prec. 20-97.
This is troubling given that this regulation was enacted as part of the complete revision of part 3 of regulatory section
38 in 1961, prior to the Model Penal Code's adoption by the American Law Institute in 1962. See 26 Fed. Reg. 1589
(Feb. 24, 1961).
6
with 10 U.S.C. § 850(a); see also United States v. Martin, 56 M.J. 97, 103 (2001). In Zang, this
Court included an analysis of the MPC definition of insanity because the issue on appeal in that case
required a determination as to whether the veteran's death was a result of insanity or a result of
willful misconduct. 8 Vet.App. at 252 (citing United States v. Brawner, 471 F.2d 969, 991
(D.C. Cir. 1972) (en banc) (adopting MPC definition of insanity for insanity defense in criminal
prosecutions that require showing of inability to control behavior and showing that defendant could
not appreciate that his or her conduct was wrongful)); see 38 U.S.C. § 1110 (VA compensation
barred for disability resulting from willful misconduct). This was appropriate because, unlike VA's
insanity regulation, a finding of willful misconduct requires an intentional act. See 38 C.F.R.
§ 3.1(n) (Willful misconduct is "an act involving conscious wrongdoing or known prohibited
action[;] . . . [i]t involves deliberate or intentional wrongdoing with knowledge of or wanton and
reckless disregard of its probable consequences."). Here, the Board's analysis of whether Mr.
Gardner understood right from wrong and whether he was able to discern the effects of his behavior
is not germane to a determination of whether he was insane during his service as defined by
38 C.F.R. § 3.354(a).3 Accordingly, the Board erred when it relied upon elements of the MPC
definition of insanity rather than analyzing the question of Mr. Gardner's sanity pursuant to the
definition of insanity found in § 3.354(a). See 38 U.S.C. § 7104(c) (Board bound by VA
regulations); Douglas v. Derwinski, 2 Vet.App. 435, 440 (1992) (en banc) (Board required to adhere
to VA regulations).
Further, although the Board found that Mr. Gardner did not have a disease at the time of his
offenses, see Zang, 8 Vet.App. at 253 (under § 3.354(a) insanity definition, actions must be "due to
disease"), the Board failed to discuss the correct time frame for the offenses that led to Mr. Gardner's
dishonorable discharge. The Board concluded that Mr. Gardner was not insane based on April 1969,
January 1970, and August 1970 neuropsychiatric screenings that did not detect any acquired
A review of the 1971 Mental Competency Board findings reveals 4 that its evaluation was limited to Mr.
Gardner's mental state during the time he was at the Naval Disciplinary Command in Portsmouth, New Hampshire, from
April 1969 through July 1971. R. at 63. The offenses he committed during that time period led to his third court-martial,
the resulting sentence of which was "disapproved in toto"in December 1971. R. at 62-64, 92. Thus, the 1971 Mental
Competency Board's evaluation is not relevant in determining Mr. Gardner's mental state during the offenses that led to
his second court-martial in January 1969, the resulting sentence from which is the current potential bar to his eligibility
for VA benefits.
5The Secretary has cited Struck v. Brown, 9 Vet.App. 145, 156 (1995) for the proposition that Mr. Gardner
cannot be a claimant until he has established veteran status by a preponderance of the evidence. However, the burden
to prove "veteran" status by a "preponderance of the evidence" is no longer controlling law. See D'Amico, 209 F.3d at
1326-27 (overruling Laruan v. West, 11 Vet.App. 80, 86 (1998) (en banc) and other cases holding that claimant must
7
psychiatric disorder or disease, and a February 1971 MCB evaluation that found that Mr. Gardner
was free from mental defect, disease, or derangement at the time of his offenses and that he
understood right from wrong. R. at 11, 48, 55, 63. However, none of these reports considers Mr.
Gardner's mental state at the time he committed the offenses stemming from the August 1968 prison
riot in Vietnam, for which he was court-martialed and received his dishonorable discharge.4
Accordingly, the Board's reliance on these evaluations to find that Mr. Gardner was free from disease
is insufficient to determine that he was not insane at the time he committed the offenses leading to
his dishonorable discharge. See Beck, supra. As such, the Court cannot find that the Board's failure
to correctly apply the § 3.354(a) definition of insanity is nonprejudicial to Mr. Gardner's claim. See
38 U.S.C. § 7261(b)(2) (Court "must take due account of the rule of prejudicial error"); Conway v.
Principi, 353 F.3d 1369, 1374-75 (Fed. Cir. 2004).
Because of these inadequacies, we hold that the Board's statement of reasons or bases for its
determination that the record does not establish that Mr. Gardner was insane at the time that he
committed the offenses for which he was court-martialed in January 1969 and dishonorably
discharged is inadequate to facilitate judicial review. See 38 U.S.C. § 7104(d)(1); Allday, and
Gilbert, both supra. Consequently, the matter will be remanded for VA to gather all procurable
evidence and apply the § 3.354(a) definition of insanity. See Hatch v. Principi, 18 Vet.App. 527,
532 (2004); Tucker v. West, 11 Vet.App. 369, 374 (1998) (remand appropriate when Board, inter
alia, fails to provide adequate statement of reasons or bases).
B. Duty to Assist
Initially, we reject the Secretary's argument that the duty to assist is not triggered until Mr.
Gardner has met his burden of demonstrating veteran status.5 Pursuant to the Veterans Claims
show "veteran" status by preponderance of evidence before benefitting from statutes reserved for veterans).
8
Assistance Act of 2000 (VCAA), Pub. L. No. 106-475, 114 Stat. 2096, the Secretary has a duty to
assist claimants. See 38 U.S.C. § 5103A. A "claimant" is "any individual applying for, or
submitting a claim for, any benefit under the laws administered by the Secretary." 38 U.S.C. § 5100
(emphasis added). Accordingly, the Secretary's duty to assist applies to all claimants, regardless of
whether they have established veteran status. See Canlas v. Nicholson, 21 Vet.App. 312 (2007)
(Secretary's duty to assist applies to all five elements of claim, including verifying veteran status);
see also Capellan v. Peake, 539 F.3d 1373, 1381 (Fed. Cir. 2008) (holding that veteran's military
service must be determined based on all relevant evidence, "with due application of the duty to
assist"); H.R. REP. NO. 106-781, at 9 (2000) (stating that purpose of defining "claimant" in section
38 U.S.C. § 5100 is to ensure that Secretary will provide assistance to persons whose status as
veteran is not yet determined).
In this matter, the Board found that there was no prejudicial error in the development of Mr.
Gardner's claim because "available service records and pertinent VA medical records have been
obtained" and Mr. Gardner has not identified any records that VA failed to obtain. R. at 5.
However, Mr. Gardner argues that VA should have obtained a medical opinion to determine whether
his behavior during his 1968 offenses was due to schizophrenia and, if so, whether this constituted
insanity under VA regulations given his lay statements, his medical diagnosis of schizophrenia in
July 1971, and the fact that he was found mentally incompetent to serve his sentence by the General
Court-Martial Convening Authority in December 1971. In light of this evidence, and because the
duty to assist applies to a critical element of Mr. Gardner's claim, the Board should have considered
whether a medical opinion was necessary to determine Mr. Gardner's mental state at the time of the
August 1968 offenses that resulted in his dishonorable discharge. See 38 U.S.C. § 5103A(a)(2) and
(d) (requiring VA to obtain medical examination or opinion "when such an examination or opinion
is necessary to make a decision on the claim" but not if "no reasonable possibility exists that such
assistance would aid in substantiating the claim").
The Board concluded that "there is no indication that [Mr. Gardner's] behavior at the time
of his offense resulted from any disease which placed [his] mental capacity beyond his control."
R. at 11. The Board acknowledged that Mr. Gardner's behavior clearly interfered with the peace of
The Court notes that, although Mr. Gardner is not competent to diagnose 6 his mental condition, see Espiritu
v. Derwinski, 2 Vet.App. 492, 494 (1992), having been so diagnosed, he may well be competent to describe symptoms
similar to those that led to his current diagnosis of paranoid schizophrenia, see Jandreau v. Nicholson, 492 F.3d 1372,
1376-77 (Fed. Cir. 2007).
9
society–which is one of the elements of the definition of insanity under § 3.354(a)–but found that
"contemporaneous medical records shortly following the incident show that his behavior was
attributed to a personality disorder." R. at 11. However, as noted above, the medical evaluations
of record do not address Mr. Gardner's mental state during the time frame surrounding the
commission of the August 1968 offenses for which he was tried by court-martial and sentenced to
the dishonorable discharge that constitutes the current potential bar to VA benefits. There is no
evidence referenced by the Board that counters Mr. Gardner's assertions that he was suffering from
a mental disorder during the August 1968 prison riot in Da Nang, Vietnam, nor is there any
discussion of the Board's effort to comply with the regulation requiring the Secretary to obtain all
procurable evidence relating to the circumstances.6 See R. at 1-12; 38 C.F.R. § 3.354(b).

Accordingly, the Board's statement of reasons or bases for its conclusion that there has been no
prejudicial error in the development of Mr. Gardner's claim is inadequate for judicial review. See
38 U.S.C. § 7104(d)(1); Allday, and Gilbert, both supra. Upon remand, if the Board determines that
no medical examination or opinion is necessary to determine whether Mr. Gardner was insane at the
time of the August 1968 offenses, it should expressly state its reasons for reaching that conclusion.
See Duenas v. Principi, 18 Vet.App. 512, 517-18 (2004).
IV. CONCLUSION
Upon consideration of the foregoing analysis, the record on appeal, and the parties' pleadings,
the December 11, 2006, Board decision is VACATED and the matter is REMANDED for
readjudication consistent with this decision.

EAJA denied, Hart v. Shinseki, No. 05-2424(E)

During litigation before this Court, the issue of the applicability of staged-increased ratings was raised sua sponte and the parties were ordered to file supplemental memoranda of law addressing that issue. In response, the Secretary conceded that staged ratings may be applicable in increased-rating claims, but maintained that such application was not warranted in Mr. Hart's particular case. See Hart, supra. The Secretary continued to argue for affirmance on the basis that
any failure to consider staged ratings was nonprejudicial to Mr. Hart's increased-rating claim because there was no evidence of record that Mr. Hart's knee disability warranted an increased rating at any point in time during the pendency of his claim. See id. at 510. Although this argument was not persuasive, the argument nevertheless had a reasonable basis in law and fact on this issue of first
4
impression. See Johnson and Stillwell, both supra. Moreover, the Secretary's concession in the supplemental memorandum of law demonstrated that he was not involved in impermissible "foot dragging" at the litigation stage regarding the application of staged ratings to increased ratings. Pierre v. West, 12 Vet.App. 92, 97 (1998) (citing Bowyer v. Brown, 7 Vet.App. 549, 550 (1995)).
Therefore, the Secretary has demonstrated that his litigation position in the appeal of this case was reasonable, and thus, substantially justified. See Cullens, supra; Stillwell, 6 Vet.App. at 303; see also Carpenter v. West, 12 Vet.App. 316, 321 (1999) ('"EAJA redresses governmental abuse, it was never intended to chill the government's right to litigate or to subject the public fisc to added risk of loss when the government chooses to litigate reasonably substantiated positions, whether or not the position later turns out to be wrong.'") (quoting Roanoke River Basin Ass'n v. Hudson, 991 F.2d 132, 139 (4th Cir. 1993)).
Upon consideration of the pleadings filed for this appeal, and for the reasons stated herein, the EAJA application is DENIED.

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++


UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS
No. 05-2424 (E)
BRIAN J. HART, APPELLANT,
V.
E RIC K. SHINSEKI,
S ECRETARY OF VETERANS AFFAIRS, APPELLEE.
On Appellant's Application for Attorney Fees and Expenses
(Decided March 11, 2009 )
Virginia A. Girard-Brady, of Lawrence, Kansas, for the appellant.
James B. Cowden, with Carolyn F. Washington, Deputy Assistant General Counsel,
R. Randall Campbell, Assistant General Counsel, and Paul J. Hutter, General Counsel, all of
Washington, D.C., for the appellee.
Before GREENE, Chief Judge, MOORMAN and LANCE, Judges.
GREENE, Chief Judge: Before the Court is Brian J. Hart's March 12, 2008, application for
an award of $5,106.69 in attorney fees and expenses under the Equal Access to Justice Act (EAJA),
28 U.S.C. § 2412(d). The Secretary argues that Mr. Hart was not a prevailing party and that the
Secretary's position was substantially justified and, therefore, the application should be denied. For
the reasons that follow, the EAJA application will be denied.
In a November 2007 opinion, the Court vacated a June 2005 Board of Veterans' Appeals
(Board) decision and remanded the matter of Mr. Hart's increased disability rating for his VA
service-connected knee disability for readjudication. Hart v. Mansfield, 21 Vet.App. 505 (2007).
This EAJA application followed.
This Court has jurisdiction to award reasonable attorney fees and expenses pursuant to
28 U.S.C. § 2412(d)(2)(F). Mr. Hart's EAJA application was filed within the 30-day application
period set forth in 28 U.S.C. § 2412(d)(1)(B) and satisfies any content requirements because the
2
application contains (1) an allegation that, by virtue of the Court's remand, Mr. Hart is a prevailing
party within the meaning of EAJA; (2) a showing that he is a party eligible for an EAJA award
because his net worth does not exceed $2,000,000; (3) an allegation that the position of the Secretary
was not substantially justified; and (4) an itemized fee statement. 28 U.S.C. § 2412(d)(1)(A), (1)(B),
and (2)(B); Scarborough v. Nicholson, 19 Vet.App. 253 (2005); Cullens v. Gober, 14 Vet.App. 234,
237 (2001) (en banc). The Secretary maintains that the Court's decision in Hart was not predicated
on administrative error, and therefore, Mr. Hart is not a prevailing party for EAJA purposes.
Additionally, the Secretary argues that because the Court's decision in Hart was one of first
impression, the Secretary's position during both the administrative and litigation stages was
substantially justified.
Once an allegation of lack of substantial justification is made, the burden is on the Secretary
to demonstrate that VA was substantially justified in its positions. See Cullens, supra; Locher v.
Brown, 9 Vet.App. 535, 537 (1996). The Secretary's position is substantially justified "'if a
reasonable person could think it correct, that is, if it has a reasonable basis in law and fact.'" Stillwell
v. Brown, 6 Vet.App. 291, 302 (1994) (quoting Pierce v. Underwood, 487 U.S. 552, 566 n.2 (1988)).
That determination is based not on any single factor, but on the totality of the circumstances, which
includes consideration of, "among other things, 'merits, conduct, reasons given, and consistency with
judicial precedent and VA policy with respect to such position, and action or failure to act, as
reflected in the record on appeal and the filings of the parties'" before the Court. White v. Nicholson,
412 F.3d 1314, 1317 (Fed. Cir. 2005) (quoting Johnson v. Principi, 17 Vet.App. 436, 442 (2004)).
Additionally, the evolution of VA benefits law that has often resulted in new, different, or more
stringent requirements for adjudication is one factor for the Court to consider. Stillwell, supra;
Bowey v. West, 218 F.3d 1373, 1376-77 (Fed. Cir. 2000) (holding that substantial justification shall
be determined on the basis of law that was in existence at time that Government adopted its
position). Arguments presented in a case of first impression are more likely to be considered
substantially justified than those where the Court determines that the Secretary ignored existing law.
See Johnson, supra. However, "'[a] lack of judicial precedent adverse to the government's position
does not preclude a fee under the EAJA.'" Felton v. Brown, 7 Vet.App. 276, 281 (1994) (quoting
Ramon-Sepulveda v. INS, 863 F.2d 1458, 1459 (9th Cir.1988)). Thus, in a case of first impression
3
the Court must determine whether the Secretary's position was justified given the totality of the
circumstances. Felton, supra.
The Secretary argues that the 2005 Board decision's failure to consider staged ratings for Mr.
Hart's increased-rating claim was reasonable given the extant law. Secretary's Response at 8.
Indeed, we acknowledged in Hart that, previously, staged ratings had been associated with the
assignment of initial disability ratings. See 21 Vet.App. at 509 ("It is well established that, at the
time of an initial rating, separate ratings can be assigned for separate periods of time based on the
facts found–a practice known as staged ratings."); Fenderson v. West, 12 Vet.App. 119, 126 (1999)
(noting that staged ratings are assigned at time initial disability rating is assigned). Additionally, we
noted that our previous case law indicated that in increased-rating claims it is the present level of
disability that is the primary focus for rating purposes. See Hart, supra (citing Moore v. Nicholson,
21 Vet.App. 211, 216-17 (2007); Francisco v. Brown, 7 Vet.App. 55, 58 (1994)); see also Brammer
v. Derwinski, 3 Vet.App. 223, 225 (1992) (compensation for service-connected injury limited to
those claims that show present injury). We agree with the Secretary that our finding of Board error
in Hart was based on an issue of first impression and that the Board had a reasonable basis in law
and fact for adjudicating Mr. Hart's increased-rating claim without reference to whether staged
ratings were appropriate. See Johnson and Stillwell, both supra. Accordingly, we hold that the
Secretary's position was substantially justified at the administrative stage.
Appealing the 2005 Board decision, Mr. Hart argued that the Board had failed to provide an
adequate statement of reasons or bases for dismissing medical evidence favorable to his increasedrating
claim. During litigation before this Court, the issue of the applicability of staged-increased ratings was raised sua sponte and the parties were ordered to file supplemental memoranda of law addressing that issue. In response, the Secretary conceded that staged ratings may be applicable in increased-rating claims, but maintained that such application was not warranted in Mr. Hart's particular case. See Hart, supra. The Secretary continued to argue for affirmance on the basis that
any failure to consider staged ratings was nonprejudicial to Mr. Hart's increased-rating claim because there was no evidence of record that Mr. Hart's knee disability warranted an increased rating at any point in time during the pendency of his claim. See id. at 510. Although this argument was not persuasive, the argument nevertheless had a reasonable basis in law and fact on this issue of first
4
impression. See Johnson and Stillwell, both supra. Moreover, the Secretary's concession in the
supplemental memorandum of law demonstrated that he was not involved in impermissible "foot
dragging" at the litigation stage regarding the application of staged ratings to increased ratings.
Pierre v. West, 12 Vet.App. 92, 97 (1998) (citing Bowyer v. Brown, 7 Vet.App. 549, 550 (1995)).
Therefore, the Secretary has demonstrated that his litigation position in the appeal of this case was
reasonable, and thus, substantially justified. See Cullens, supra; Stillwell, 6 Vet.App. at 303; see
also Carpenter v. West, 12 Vet.App. 316, 321 (1999) ('"EAJA redresses governmental abuse, it was
never intended to chill the government's right to litigate or to subject the public fisc to added risk of
loss when the government chooses to litigate reasonably substantiated positions, whether or not the
position later turns out to be wrong.'") (quoting Roanoke River Basin Ass'n v. Hudson, 991 F.2d 132,
139 (4th Cir. 1993)).
Upon consideration of the pleadings filed for this appeal, and for the reasons stated herein,
the EAJA application is DENIED.

Quirin v. Shinseki, No. 06-2007, defect v. disease, failure to discuss relevant facets of the record

The CAVC opinions touches on whether a condition is a defect or a disease, citing to VA Gen. Couns. Prec. 82-90:
"As discussed above, the Court will vacate and remand the decision so that the Board may properly apply VA Gen. Couns. Prec. 82-90 in determining whether the appellant's condition is a defect or a disease."

- VA Gen. Couns. Prec. 82-90 (first released as 1-85 on March 5, 1985). The General Counsel opinion4 draws on medical authorities and case law from other federal jurisdictions and concludes that a defect differs from a disease in that the former is "more or less stationary in nature" while the latter is "capable of improving or deteriorating." VA Gen. Couns. Prec. 82-90 at p. 2.

The court also found that: "Moreover, the Board decision did not discuss specifically relevant facets of the record, such as a medical questionnaire that indicates that the physician did not believe that the appellant's optic atrophy is related to his military service. R. at 67. In not discussing this evidence, the Board improperly presumed that the Secretary had rebutted the second prong of the presumption of soundness."

Also, "The Board further failed to adequately articulate a finding with respect to the natural progression of the appellant's condition" in that "the decision does not address the evidence of record that suggests that the appellant's apparently deteriorating vision may have been the result of the natural progress of the disease", and "did not specifically address to what extent, if at all, this evidence satisfies VA's burden of rebutting the aggravation prong of the presumption of soundness."

1
UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS
NO . 06-2007
REGIS M. QUIRIN, APPELLANT,
V.
ERIC K. SHINSEKI,
SECRETARY OF VETERANS AFFAIRS, APPELLEE.
On Appeal from the Board of Veterans' Appeals
(Decided March 10, 2009)
Ronald L. Smith, for Disabled American Veterans, of Washington, DC, was on the brief
for the appellant.
Keturah Denise Harley, with whom Paul J. Hutter, General Counsel, R. Randall
Campbell, Assistant General Counsel, and Edward V. Cassidy, Jr., Deputy Assistant General
Counsel, all of Washington, D.C., were on the brief for the appellee.
Before MOORMAN, LANCE, and SCHOELEN, Judges.
LANCE, Judge: The appellant, Regis M. Quirin, appeals through counsel a May 10,
2006, decision of the Board of Veterans' Appeals (Board) denying entitlement to service
connection for optic atrophy under 38 U.S.C. § 1131. The parties each filed briefs and the
appellant filed a reply brief. For the reasons that follow, the Court will vacate and remand the
May 10, 2006, Board decision.
I. FACTS
The appellant served in the U.S. Army from January 1953 to March 1955. Record (R.) at
12. In April 1951, 21 months prior to his enlistment, he reported for an Armed Forces Physical
Examination and was "FOUND ACCEPTABLE FOR INDUCTION." R. at 15. All of his
The resulting examination report specifically noted that the "visual 1 acuity and visual fields given in this summary are
derived using special techniques, lighting and equipment designed for low vision, other than the standard techniques,
lighting and equipment described in the VA Physician's Guide for disability evaluation and examination, and cannot be
used for rating purposes." R. at 23.
2 "Drusens" are "hyaline excrescences in the Bruch layer of the choroid; they usually result from aging, but sometimes
occur with pathologic conditions." DORLAND'S ILLUSTRATED MEDICAL DICTIONARY 575 (31st ed. 2007) [hereinafter
DORLAND'S].
3 "Leber optic atrophy," also called "Leber hereditary optic neuropathy," is "a rare hereditary disorder . . . occurring
most commonly in males, with onset usually at about age twenty; it is characterized by degeneration of the optic nerve
and papillomacular bundle, resulting in a progressive loss of central vision that may remit spontaneously." DORLAND'S
at 1228.
2
subsequent service medical records (SMRs) were destroyed, except for a March 1955
examination. R. at 32-33, 35. That examination, conducted one day prior to his separation from
service, indicates that the appellant wore glasses, that he had uncorrected distant vision of 20/60
in his right eye and 20/100 in his left eye, and that he had corrected distant vision of 20/60 in
both eyes. R. at 18. No other "serious injuries, operation, or diseases" were noted. R. at 12.
In February 1987, more than three decades after discharge, the appellant's private treating
physician declared him "legally blind" as a result of "optic atrophy." R. at 21. At that time the
appellant's corrected vision was 20/400+ in his right eye and 20/400- in his left eye. Id.
In August 1992, approximately five years after being declared legally blind, the appellant
received a VA ophthalmological examination1 as part of a special rehabilitation program. R. at
23. The physician conducting the examination noted that the appellant had "optic atrophy which
was congenital and possible labors, some drus[e]n2 in the macular area," but that "no other ocular
pathology was detected." Id.
In April 1994, the New York, New York, VA regional office (RO) awarded the appellant
a non-service-connected pension, citing a November 1993 VA medical center (VAMC)
examination report that concluded that he "ha[d] optical atrophy of both eyes, possible
[congenital] Leber's optical atrophy3 noted since age 6." R. at 27.
In July 2002, eight years after his original pension award, the appellant filed a disability
compensation claim with the RO for optical atrophy. R. at 37-54. In June 2003, the RO denied
that claim, finding that his eye disorder was the product of a non-compensable congenital or
3
developmental defect that was unrelated to and not aggravated by his military service. R. at 56-
59. The appellant appealed that decision. R. at 64.
In July 2003, the appellant's primary VA physician completed a one-page questionnaire
regarding the appellant's eye condition. R. at 67. After noting that he had been treating the
appellant for about 11 years, the physician opined that the appellant suffered from optical
atrophy, age-related macular degeneration, and legal blindness. Id. The doctor also checked the
box marked "NO" when asked if any of the noted visual impairments were related to the
appellant's military service. Id. The record indicates that the RO received a copy of that
questionnaire the following month.
In June 2004, after receiving medical records from the New York, New York VAMC, the
RO issued a Statement of the Case (SOC). R. at 238-252; see R. at 75-237. That SOC, the result
of a de novo review of the appellant's claim by a decision review officer, denied the claim for
substantially the same reasons provided in the original June 2003 RO decision. R. at 251-52.
The following month, the appellant perfected his appeal to the Board. R. at 254. In February
2005, the appellant provided the Board with additional evidence, including a March 1993
treatment note indicating that a physician had determined that he did not have a Leber's
mutation. R. at 288.
In April 2006, the appellant provided the Board with a statement in support of his appeal.
R. at 292-96. In that statement, he asserted that the absence of his SMRs gave rise to a
heightened obligation on the part of VA to explain any decision on his claim and to consider the
benefit-of-the-doubt doctrine. R. at 293. He further noted that the issue of service connection
largely depended upon whether his optical atrophy was considered a “congenital defect” or a
“congenital disease” and that the medical evidence of record did not permit a proper ruling on
that question. R. at 293-94. Finally, he argued that his condition was not noted at the time of his
April 1951 induction examination, that the presumption of soundness, therefore, applied, and
that VA had not rebutted that presumption by clear and unmistakable evidence. R. at 294-95.
On May 10, 2006, the Board issued the decision here on appeal. R. at 1-10. After
acknowledging that the destruction of the appellant's SMRs created "a particularly great duty
upon VA to assist the veteran," the Board found that the record required no further development.
4
R. at 5. The Board then explained that so-called "congenital defects" are treated differently than
"congenital diseases" in the context of VA disability compensation. Id. Specifically, the Board
noted that "congenital defects" are excluded from the list of qualified diseases or injuries.
Therefore, the Board noted, VA disability compensation may only be awarded in the event that
an additional, service-connected disability is superimposed upon a congenital defect. Id.
However, the Board explained that "congenital diseases" are directly compensable and that VA
disability compensation may be awarded if a congenital disease is aggravated by a claimant's
military service. Id. The Board concluded that the appellant's optic atrophy was a congenital
defect and that no additional disability was superimposed upon that defect as a result of his
military service. R. at 6. The Board further reasoned that, even if his optic atrophy were a
congenital disease, the evidence of record did not support a finding of service-related
aggravation because the appellant's transfer examination noted that his vision was "normal."
R. at 6-8.
II. ARGUMENTS
In his initial brief, the appellant alleges two errors by the Board. First, the appellant
argues that the Board failed to afford him the statutory presumption of soundness. Appellant's
Brief (Br.) at 5. Second, the appellant asserts that the Board failed to properly classify his optic
atrophy as a congenital disease. Id. at 12. The appellant contends that either alleged error
warrants reversal and that his case should be remanded for further adjudication. The appellant
further argues that the Secretary should not be permitted to rebut the presumption of soundness
on remand. Br. 12-13.
The Secretary argues that the Board's decision should be affirmed. Secretary's Br. at 4-
10. He asserts that the Board's decision was based on clear and unmistakable evidence that
rebutted the presumption of aggravation. Secretary's Br. at 6. However, he contends that,
should the Court conclude otherwise, a remand for a medical examination to determine whether
the appellant's optic atrophy is a congenital disease or defect would be appropriate. Secretary's
Br. at 10-12.
5
III. ANALYSIS
The issue before the Court is the proper application of the presumption of soundness to
congenital conditions. As explained below, the mere fact that a condition is the result of a
congenital cause does not necessarily mean that the condition itself manifested before service or
that it was not aggravated by service. In this regard, it is important to distinguish between
conditions that are diseases and those that may properly be considered defects. Accordingly, to
properly analyze a claim for compensation for a congenital condition, the Board must
appropriately classify the condition and explicitly discuss the potential application of the
presumption of soundness.
A. Classification of Congenital Conditions
The appellant argues that the Board erred in classifying his optic atrophy as a congenital
defect rather than a congenital disease. Appellant's Br. at 10. The Secretary argues that the
Board properly classified the appellant's eye condition as a congenital defect, that congenital
defects are not contemplated by the legislation governing disability compensation, and that the
appellant's continually deteriorating vision was "probably secondary to a defect experienced by
[the appellant] since the age of six." Secretary's Br. at 9. The Secretary further contends that,
should the Court remand this matter, it should allow VA to seek a medical opinion for the
purposes of definitively establishing whether the appellant's condition is a defect or a disease.
Id. at 10-11.
The Secretary is correct in noting that VA regulations state that congenital or
developmental defects "are not diseases or injuries within the meaning of applicable legislation."
38 C.F.R. § 3.303(c). This Court has recognized that congenital diseases, but not defects, may
be service connected. See Winn v. Brown, 8 Vet.App. 510, 516 (1996). In Winn, we held that
the term "disability," as used in 38 U.S.C. § 1110, cannot include "non-disease or non-injury
entities such as congenital defects," because it would lead to the absurd result of requiring the
Secretary to meet his burden of rebuttal under the presumption of soundness "only by evidence
of disease or injury when a congenital defect is neither a disease nor an injury." Id. Recognizing
the important distinction between the two, the VA General Counsel issued an opinion explaining
how congenital conditions may properly be classified as either defects or diseases. See VA Gen.
Neither party challenges the validity of the opinion, and the Court need not 4 consider whether or how that opinion
comports with the statutory or regulatory framework governing the issue on appeal.
6
Couns. Prec. 82-90 (first released as 1-85 on March 5, 1985). The General Counsel opinion4 draws on medical authorities and case law from other federal jurisdictions and concludes that a defect differs from a disease in that the former is "more or less stationary in nature" while the latter is "capable of improving or deteriorating." VA Gen. Couns. Prec. 82-90 at p. 2.
In its decision, the Board discussed the appellant's condition as both a defect and a
disease. R. at 6-8. Although the Board cited the opinion of the General Counsel, it did not
properly apply the opinion's framework to the facts before it. Specifically, as discussed more
fully below, the Board erred in finding that there is no evidence to suggest that the appellant's
condition worsened during service. Under the framework set forth in the General Counsel
opinion, any worsening—any change at all—might demonstrate that the condition is a disease, in
that VA considers defects to be "more or less" static and immutable. See VA. Gen. Couns. Prec.
82-90 at p. 2. The Court holds that the Board failed to properly explain its application of the
analysis set forth in VA Gen. Couns. Prec. 82-90. The Court notes, however, that its holding
should not be construed to suggest that the appellant's condition worsened as a result of service,
as that is a finding of fact to be determined by the Board.
On remand, the Secretary should seek a medical examination to determine whether the
appellant's condition may be properly deemed a defect. The Board is permitted wide discretion
in seeking medical opinions if it believes that the facts of a particular matter warrant medical
review. See 38 C.F.R. § 20.901. The General Counsel opinion suggests that the determination
must be supported by "guidance from medical authorities regarding the proper classification of a
medical condition at issue." VA. Gen. Couns. Prec. 82-90 at p. 2. Moreover, this Court has held
that the Board should seek medical opinions as necessary to determine the sufficiency of the
evidence offered to rebut the presumption of soundness. Adams v. West, 13 Vet. App. 453
(2000), aff'd sub nom. Adams v. Principi, 256 F.3d 1318 (Fed. Cir. 2001). The regulations
implementing 38 U.S.C. § 1111 state that medical evidence is necessary to rebut the presumption
of soundness and that the Board should not make such a determination without seeking medical
opinions. See 38 C.F.R. § 3.304(b); see Adams, supra. Although the Secretary may not seek an
7
opinion for the sole purpose of discrediting an appellant's claim, the Board is free to obtain a
medical opinion to clarify an issue of medical complexity. See Adams, supra; see Mariano v.
Principi, 17 Vet.App. 305, 312 (2003).
The appellant, on remand, is free to submit additional evidence and argument, including
the arguments raised in his briefs to this Court, in accordance with Kutscherousky v. West,
12 Vet. App. 369, 372-73 (1999) (per curiam order), and the Board must consider any such
evidence or argument submitted. See Kay v. Principi, 16 Vet. App. 529, 534 (2002). The Board
shall proceed expeditiously, in accordance with U.S.C. §§ 5109B, 7112 (requiring Secretary to
provide for "expeditious treatment" of claims remanded by Board or Court).
B. Presumptions of Soundness and Aggravation
The appellant raises a related error that the Court must address so that it will not be
repeated by the Board on remand. It is well settled that the Court will not ordinarily consider
additional allegations of error that have been rendered moot by the Court's opinion or that would
require the Court to issue an advisory opinion. Best v. Principi, 15 Vet. App. 18, 19-20 (2001).
The United States Court of Appeals for the Federal Circuit (Federal Circuit), however, has
recognized the need to address additional arguments, after the court determines that remand is
necessary, in order to provide guidance to the lower tribunal. See Xerox Corp. v. 3Com Corp.,
458 F.3d 1310, 1314-1315 (Fed. Cir. 2006) (discussing a prior decision in which the court
addressed additional arguments for the express purpose of providing guidance to the district
court on remand); see also Taylor v. McKeithen, 407 U.S. 191, 194 n.4 (1972) (stating that
courts of appeal have wide latitude in deciding how to write an opinion); accord Bernklau v.
Principi, 291 F.3d 795, 801 (Fed. Cir. 2002). In this case, should the Board, on remand, find
that the appellant's condition is a congenital disease, it must properly apply the presumption of
soundness. It is appropriate, therefore, for the Court to address additional errors made by the
Board, with respect to the application of the presumption of soundness, that must be corrected so
as to ensure a proper decision on remand.
1. Burden-Shifting Framework
Upon entering service, an individual will be presumed sound, "except as to defects,
infirmities, or disorders noted at [entry], or where clear and unmistakable evidence demonstrates
8
that the injury or disease existed before [service] and was not aggravated by such service."
38 U.S.C. §§ 1111, 1132; 38 C.F.R. § 3.304(b). "Clear and unmistakable evidence," as used in
the governing statutes, has been interpreted to mean evidence that "cannot be misinterpreted and
misunderstood, i.e., it is undebatable." Vanerson v. West, 12 Vet.App. 254, 258-59 (1999)
(citing definition of "clear and unmistakable error" in Russell v. Principi, 3 Vet.App. 310,
313-14 (1992) (en banc)).
In Wagner v. Principi, 370 F.3d 1089 (Fed. Cir. 2004), the Federal Circuit discussed the
interplay between the statutory presumptions of soundness and aggravation and its effect on
VA's burden of rebuttal. The Federal Circuit neatly summarized the burden-shifting framework
as follows:
The effect of section 1111 on claims for service-connected disability thus may be
summarized as follows. When no preexisting condition is noted upon entry into
service, the veteran is presumed to have been sound upon entry. The burden then
falls on the government to rebut the presumption of soundness by clear and
unmistakable evidence that the veteran's disability was both preexisting and not
aggravated by service. The government may show a lack of aggravation by
establishing that there was no increase in disability during service or that any
"increase in disability [was] due to the natural progress" of the preexisting
condition.
370 F.3d at 1096 (quoting 38 U.S.C. § 1153). In deciding whether a condition preexisted
service, the Board must consider the veteran's medical history, accepted medical principles,
evidence of the "basic character, origin and development" of the condition, and "lay and medical
evidence concerning the inception, development and manifestations" of the particular condition.
38 C.F.R. § 3.304(b)(1), (2).
This Court reviews de novo a Board decision concerning the adequacy of the evidence
offered to rebut the presumption of soundness. See Cotant v. Principi, 17 Vet.App. 116, 130
(2003). However, the Federal Circuit has stated that, in reviewing the legal sufficiency of such
rebuttal evidence, this Court may employ the "arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law" standard of review because it subsumes de novo review of
questions of law. Kent v. Principi, 389 F.3d 1380, 1383 (Fed. Cir. 2006).
2. Application to Congenital Conditions
The Federal Circuit has made clear that the only prerequisite for the application of the
presumption of soundness is that the veteran's entry examination be clear of any noted diseases
Although the Secretary does not dispute that the appellant's entry documents lac 5 k any indication of a visual disability
or defect, the Court notes that the appellant's "military personnel and medical records were likely destroyed by [an]
accidental fire." R. at 5. As it would be purely speculative to suggest that any records that may have been destroyed
may also have contained evidence of a preexisting disability, the Court cannot conclude that the destruction of the
appellant's records precludes the application of the presumption of soundness. Moreover, this Court has held that the
presumption applies even when the record of a veteran's entrance examination has been lost or destroyed while in VA
custody. See Lee v. Brown, 10 Vet.App. 336, 339 (1997) (directing the Board to consider the presumption of soundness
on remand in a case in which the veteran's service medical records were presumed destroyed in a fire).
9
or disabilities. See Wagner, 370 F.3d at 1096. This Court has recognized that service
connection may be granted for congenital diseases. See Monroe v. Brown, 4 Vet.App. 513, 515
(1993). We have also held that the presumption of soundness applies if a veteran's congenital
condition is not noted at entry. See id. The presumption of soundness does not, however, apply
to congenital defects, because such defects "are not diseases or injuries" within the meaning of
38 U.S.C. §§ 1110 and 1111. 38 C.F.R. § 3.303(c); see Terry v. Principi, 340 F.3d 1378,
1385-86 (Fed. Cir. 2003) (holding that the presumption of soundness does not apply to
congenital defects); see Winn, 8 Vet.App. at 516 (holding that a non-disease or non-injury entity
such as a congenital defect is "not the type of disease- or injury-related defect to which the
presumption of soundness can apply").
Here, it is undisputed that the appellant's available entry documents do not note any
disability or defect.5 R. at 7, 15, Secretary's Br. at 7. Therefore, under Wagner, the Board
should have found that the presumption of soundness attached and should have discussed its
relevance. In failing to discuss the presumption, the Board erred in two respects. First, the
Board simply presumed that the appellant's condition preexisted service. The Board, therefore,
operated under the assumption that the Secretary had, in essence, rebutted the first prong of the
presumption of soundness. As discussed above, however, the Board's determination that the
appellant's condition is a defect was flawed to the extent that it failed to properly apply VA. Gen.
Couns. Prec. 82-90. Moreover, even assuming, arguendo, that the Board's finding regarding the
nature of the appellant's congenital condition was correct, its discussion of how that finding
affects the first prong of the presumption of soundness was inadequate.
Second, the Board appears to have presumed that the appellant's visual acuity may have
been the same at entry as it was when he transferred from service. R. at 6-8. Although the
Board correctly noted that there are no medical opinions of record indicating that the appellant's
eye condition worsened during service, its analysis is faulty. The Federal Circuit has made clear
10
that the Secretary may rebut the second prong of the presumption of soundness through
demonstrating, by clear and unmistakable evidence, either that (1) there was no increase in
disability during service, or (2) any increase in disability was due to the natural progression of
the condition. Wagner, 370 F.3d at 1096. With regard to the former, the Board erred in relying
exclusively on the visual acuity readings contained in the appellant's transfer examination report,
finding that there is no evidence of record to support the appellant's contention that his vision
worsened during service. The appellant's visual acuity at separation was demonstrably impaired,
however, with uncorrected distant vision of 20/60 for the right eye and 20/100 for the left eye
and corrected distant vision readings of 20/60, bilaterally. R. at 7, 18. The Board failed to
adequately explain how these readings constitute "clear and unmistakable evidence" that the
appellant's vision did not deteriorate while in service. See Vanerson, supra.
The Board further failed to adequately articulate a finding with respect to the natural
progression of the appellant's condition. The decision does not address the evidence of record
that suggests that the appellant's apparently deteriorating vision may have been the result of the
natural progress of the disease. Although the Board noted that several medical opinions had
variously diagnosed the veteran's eye disease as optic atrophy, Leber's optic atrophy, and agerelated
macular degeneration, it did not specifically address to what extent, if at all, this evidence
satisfies VA's burden of rebutting the aggravation prong of the presumption of soundness. R. at
6. Moreover, the Board decision did not discuss specifically relevant facets of the record, such
as a medical questionnaire that indicates that the physician did not believe that the appellant's
optic atrophy is related to his military service. R. at 67. In not discussing this evidence, the Board improperly presumed that the Secretary had rebutted the second prong of the presumption of soundness.
The Board's failure to provide an adequate statement of reasons or bases for its
decision effectively frustrates judicial review. See Tucker v. West, 11 Vet.App. 369, 374 (1998);
Gilbert v. Derwinski, 1 Vet.App. 49, 57 (1990).
As discussed above, the Court will vacate and remand the decision so that the Board may
properly apply VA Gen. Couns. Prec. 82-90 in determining whether the appellant's condition is a
defect or a disease.
If applicable, the Board must also consider and properly apply the
presumption of soundness, in accordance with this decision.
11
III. CONCLUSION
After the Court's consideration of the appellant's and the Secretary's briefs, and its review
of the record, the Board's May 10, 2006, decision is VACATED and the matter REMANDED to
the Board for further proceedings consistent with this decision.