Ray v. Wilkie
| Decision Date | 14 March 2019 |
| Docket Number | 17-0781 |
| Court | United States Court of Appeals For Veterans Claims |
| Parties | Eddie D. Ray, Appellant, v. Robert L. Wilkie, Secretary of Veterans Affairs, Appellee. |
Argued September 5, 2018
On Appeal from the Board of Veterans' Appeals
Barbara J. Cook, with whom April Donahower, was on the brief both of Providence, Rhode Island, for the appellant.
Amanda Radke, with whom Angela-Marie C. Green, Appellate Attorney James M. Byrne, General Counsel; Mary Ann Flynn, Chief Counsel; and Edward V. Cassidy, Jr., Deputy Chief Counsel all of Washington, D.C., were on the brief for the appellee.
Before SCHOELEN, ALLEN, and TOTH, Judges.
In July 2014, the Board of Veterans' Appeals (Board) referred U.S. Army veteran Eddie D. Ray's claim for a rating of total disability on the basis of individual unemployability (TDIU) to what is today the Director, Compensation Service for extraschedular consideration. The Board found that "[w]hile [an October 2011] VA examiner indicated that the Veteran was able to perform sedentary employment, the record suggests that the Veteran may not be able to obtain such employment as it is inconsistent with his education and occupational background."[1] The Director then denied the veteran an extraschedular TDIU rating, and the matter returned to the Board.[2] Though in July 2014 the Board found extraschedular referral warranted and though no new evidence had been submitted since its July 2014 decision, in a February 15, 2017, decision, the Board found that the veteran's "service-connected disabilities do not render him unable to secure and follow a substantially gainful occupation consistent with his education and special training" and denied him an extraschedular TDIU rating.[3] Nowhere in its decision did the Board explain what it understood the phrase "unable to secure and follow a substantially gainful occupation, "[4] a phrase that VA has refused to define since this Court's inception, to mean. Nor did the Board explain why referral for extraschedular consideration was warranted in July 2014 but an extraschedular rating wasn't warranted in February 2017.
We are called on to answer two questions in this appeal, which is timely and over which the Court has jurisdiction.[5] First, what is the effect, if any, of the Board's determination to refer a case for extraschedular consideration under 38 C.F.R. § 4.16(b) when the Board later reviews the Director's decision not to award an extraschedular TDIU rating? Second, does VA's refusal to define key terms in § 4.16(b) make the Board's statement of reasons or bases inadequate, and if so, should the Court interpret those terms itself?
First, we hold that the Board's initial finding that extraschedular referral is warranted is a factual one but is necessarily based on a evidentiary threshold that is lower than that for the decision to award an extraschedular rating. If the Board refers a claim to the Director for extraschedular consideration and the Director denies an extraschedular rating, the Board's earlier decision to refer the claim doesn't automatically bind the Board to grant an extraschedular rating; however, if the Board denies an extraschedular rating, it must provide adequate reasons or bases for deviating from its earlier referral decision. Second, we hold that VA's refusal to define key terms in 38 C.F.R. § 4.16(b) frustrates judicial review and, after concluding that we needn't defer to the Secretary's interpretation of the regulation, we interpret it ourselves. Because the Board failed to explain why the evidence was sufficient to support referral but insufficient to support the award of an extraschedular rating, and because VA's refusal to define the relevant regulatory terms frustrates judicial review, we remand this matter to the Board for readjudication consistent with this opinion.
The veteran served honorably from November 1966 to November 1969[6] and is service connected for several disabilities with a combined disability rating of 50%.[7] In September 2005, the veteran filed a claim for an increased rating due to TDIU.[8] That claim was denied in January 2006 and the denial continued in July of that year.[9]
In January 2011, the veteran submitted a VA Form 9, stating he couldn't work because of his disabilities.[10] In March 2012 the veteran's claim for TDIU was denied.[11] The veteran timely disagreed with that decision, [12] and VA continued its denial in November 2012.[13] The veteran then perfected an appeal to the Board.[14]
In a July 2014 decision, the Board remanded the issue of entitlement to TDIU to a regional office (RO) for referral under § 4.16 to the Director for extraschedular consideration.[15] In short, the Board referred the TDIU issue for extraschedular consideration. The Director denied entitlement to TDIU in March 2015, [16] and the RO continued its denial that same month. The veteran then perfected an appeal to the Board, which also denied him an extraschedular rating because his "service-connected disabilities do not render him unable to secure and follow substantially gainful employment consistent with his education and special training."[17] This appeal followed.
Typically, VA compensates veterans for their service-connected disabilities through its rating schedule, which is designed to reflect the average impairment in earning capacity that a veteran with a certain type of disability would experience.[18] But, in certain circumstances, VA can determine that a veteran is unemployable as a result of his or her service-connected disabilities even when he or she hasn't met the requirements for a 100% rating.[19] In those instances, 38 C.F.R. § 4.16(a) and (b) kick in. Section 4.16(a) addresses schedular TDIU, which applies where a veteran has a single disability rated at 60% or more, or two disabilities rated collectively at 70% or more where one of them is rated at least 40% or more.[20] The veteran doesn't argue he's entitled to TDIU under subsection (a). Instead, this appeal is about § 4.16(b).
That section reads, in full:
It is the established policy of the Department of Veterans Affairs that all veterans who are unable to secure and follow a substantially gainful occupation by reason of service-connected disabilities shall be rated totally disabled. Therefore, rating boards should submit to the Director, Compensation Service, for extra-schedular consideration all cases of veterans who are unemployable by reason of service-connected disabilities, but fail to meet the percentage standards set forth in paragraph (a) of this section. The rating board will include a full statement as to the veteran's service-connected disabilities, employment history, educational and vocational attainment and all other factors having a bearing on the issue.[21]
In Wages v. McDonald, this Court held that the Director's decision with respect to extraschedular consideration "is no different than an RO's decision in terms of its effect on the Board' statutory jurisdiction and the Board's standard of review."[22] Thus, under § 4.16(b), VA adjudicators, including the Board, [23] should refer claims to the Director for "all veterans who are unable to secure and follow a substantially gainful occupation" because of their service-connected disabilities.[24] Then, the Director can either award or deny an extraschedular rating. If the Director denies an extraschedular TDIU rating, the claim returns to the Board, which reviews the denial without deference to the Director just as the Board would review the RO's denial without deference to the RO.[25] The Board then decides whether to award or deny an extraschedular rating.[26] It's this three-step process that's at issue here.
The veteran argues the Board's 2014 referral decision was a binding factual finding that the Board impermissibly changed when it denied him an extraschedular rating in 2017.[28] The Secretary argues the Board's 2014 referral decision "does not equate to a factual finding, but instead indicates simply [] that evidence of record warrants referral to the Director[.]"[29] We don't entirely agree with either position as both the veteran's and the Secretary's arguments would lead to absurd results.
If the veteran is right that the decision to refer a claim for extraschedular consideration is a binding factual finding then the Director would be little more than a rubberstamp. Put simply, it can't be the case that when the Board refers a claim to the Director for extraschedular consideration and the Director denies an extraschedular rating, the Board then must award an extraschedular rating anyway because of its initial referral decision. Such a reading of § 4.16(b) would make the Director superfluous as any claim that reached the Director from the Board would inevitably be granted by the Board when returned to it. We have an obligation to avoid such an absurd result[30] and to shy away from any interpretation that...
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