Citation Nr: 0620947	
Decision Date: 07/18/06    Archive Date: 07/26/06

DOCKET NO.  05-03 745	)	DATE
	)
	)


THE ISSUE

Whether a February 11, 1982, decision of the Board of 
Veterans' Appeals (Board) should be revised or reversed on 
grounds of clear and unmistakable error (CUE).



REPRESENTATION

Moving party represented by:  Vietnam Veterans of America


INTRODUCTION

The veteran had military service from October 1969 to 
November 1970.

The motion alleging CUE in the February 1982 Board decision 
also alleged CUE in rating decisions by the RO issued in 
February 1980 and July 1984.  However, both of these 
decisions were appealed to and affirmed by the Board.  No 
claim of CUE under 38 C.F.R. §3.105(a) exists as a matter of 
law with respect to an RO decision where that decision was 
appealed to and affirmed by the Board and thus subsumed by 
the Board's decision.  38 C.F.R. 20.1104.

FINDINGS OF FACT

1.  By a decision dated in May 1974, the RO increased the 
rating for the veteran's service-connected schizophrenia from 
50 percent to 70 percent from December 1973.

2.  By a decision dated in March 1978, the RO held that the 
veteran was unemployed due to the severity of his 
schizophrenia and granted him a total disability rating based 
on individual unemployability (TDIU) from November 1, 1977.

3.  By a decision dated in February 1980, the RO terminated 
the TDIU award as of May 1, 1980, and in a May 1981 decision 
the RO reduced the rating for schizophrenia from 70 percent 
to 50 percent from August 1981; the veteran perfected timely 
appeals to these decisions.

4.  By a decision dated February 11, 1982, the Board held 
that the veteran was not entitled to a rating in excess of 50 
percent for schizophrenia and that the schizophrenia was not 
of such severity to produce unemployability.

5.  The decision of the Board in February 1982 would have 
been manifestly different had the Board considered and 
applied 38 C.F.R. §§ 3.343 and 3.344 which provide criteria 
that must be met when a disability rating, to include a TDIU 
rating, is reduced or terminated.


CONCLUSION OF LAW

The February 1982 decision by the Board denying restoration 
of a 70 percent rating for schizophrenia and restoration of a 
TDIU rating was clearly and unmistakably erroneous.  38 
U.S.C.A. § 7111 (West 2002); 38 C.F.R. §§ 3.343, 3.344, 
20.1400 through 20.1404, 20.1406 (2005).

REASONS AND BASES FOR FINDINGS AND CONCLUSION

As a preliminary matter, while the Board is generally 
required to address the Veterans Claims Assistance Act of 
2000 (VCAA), the Board notes that it is not necessary to 
discuss the VCAA in connection with the veteran's Motion in 
this case.  See 38 U.S.C.A. §§ 5103, 5103A (West 2002 & Supp. 
2005); 38 C.F.R. § 3.159 (2005).  The United States Court of 
Appeals for Veterans Claims (Court) has held that the 
provisions of the VCAA do not apply to a claim based on an 
allegation of clear and unmistakable error in a previous 
decision.  See Livesay v. Principi, 15 Vet. App. 165 (2001) 
(en banc).  The Court held that an attempt to obtain benefits 
based on an allegation of clear and unmistakable error "is 
fundamentally different from any other kind of action in the 
VA adjudicative process."  Livesay v. Principi, 15 Vet. App. 
at 178.  An allegation of CUE does not represent a "claim," 
but rather is a collateral attack on a final decision.  It 
involves a legal challenge to a prior Board decision and does 
not involve acquiring or submitting any additional evidence.  
Therefore, the provisions of the VCAA are not for application 
in the adjudication of the issue of CUE in a prior final 
decision.

Legal Criteria.  Before November 21, 1997, a claimant was 
precluded by law from collaterally attacking a prior final 
Board decision by alleging CUE in either the Board's decision 
or in a rating decision that was subsumed in that decision.  
Smith v. Brown, 35 F.3d, 1516 (Fed. Cir. 1994).  However, 
such challenges have been permitted since November 21, 1997, 
the date of enactment of Pub. L. No. 105-111, 111 Stat. 2271.  
The statutory authority for the revision of Board decisions 
on the basis of CUE granted by Public Law No. 105-111 is 
found in 38 U.S.C.A. §§ 5109A (a) and 7111 which codified, 
without substantive change, the existing regulation, 38 
C.F.R. § 3.105(a), providing for revision of RO decisions on 
the basis of CUE.  Donovan v. West, 158 F.3d 1377 (Fed. Cir. 
1998); Dittrich v. West, 163 F.3d 1349, 1352 (Fed Cir. 1998).  
The Board has original jurisdiction to determine whether CUE 
exists in a prior final Board decision.  Such review may be 
initiated by the Board on its own motion or by a party to the 
decision.  38 C.F.R. § 20.1400. 

Motions for review of prior Board decisions on the grounds of 
CUE are adjudicated pursuant to the Board's Rules of Practice 
codified at 38 C.F.R. § 20.1400-1411.  The motion alleging 
CUE in a prior Board decision must set forth clearly and 
specifically the alleged CUE, or errors of fact or law in the 
Board decision, the legal or factual basis for such 
allegations, and why the result would have been different but 
for the alleged error.  Non-specific allegations of failure 
to follow regulations or failure to give due process, or any 
other general, non-specific allegations of error, are 
insufficient to satisfy the requirement for specific 
allegations.  Motions that fail to comply with these 
requirements shall be dismissed without prejudice to 
refiling.  38 C.F.R. § 20.1404(b).

Rule 1403, found at 38 C.F.R. § 20.1403, relates what does 
and what does not constitute CUE, and provides as follows:

(a)  General.  Clear and unmistakable error is a very 
specific and rare kind of error.  It is the kind of error, of 
fact or law, that when called to the attention of later 
reviewers compels the conclusion, to which reasonable minds 
could not differ, that the result would have been manifestly 
different but for the error.  Generally, either the correct 
facts, as they were known at the time, were not before the 
Board, or the statutory and regulatory provisions extant at 
the time were incorrectly applied.

(b)  Record to be reviewed.  (1) General.  Review for clear 
and unmistakable error in a prior Board decision must be 
based on the record and the law that existed when that 
decision was made.  (2) [Omitted]. 

(c)  Errors that constitute clear and unmistakable error.  To 
warrant revision of a Board decision on the grounds of clear 
and unmistakable error, there must have been an error in the 
Board's adjudication of the appeal which, had it not been 
made, would have manifestly changed the outcome when it was 
made.  If it is not absolutely clear that a different result 
would have ensued, the error complained of cannot be clear 
and unmistakable.

(d)  Examples of situations that are not clear and 
unmistakable error.  (1) Changed diagnosis.  A new medical 
diagnosis that "corrects" an earlier diagnosis considered in 
a Board decision.  (2) Duty to assist.  The Secretary's 
failure to fulfill the duty to assist.  (3)  Evaluation of 
evidence.  A disagreement as to how the facts were weighed or 
evaluated.

(e)  Change in interpretation.  Clear and unmistakable error 
does not include the otherwise correct application of a 
statute or regulation where, subsequent to the Board decision 
challenged, there has been a change in the interpretation of 
the statute or regulation.

Prior decisions issued by the United States Court of Appeals 
for Veterans Claims (Court) with regard to clear and 
unmistakable error in RO rating decisions provide guidance in 
determining whether clear and unmistakable error exists in a 
Board decision.  As stated by the Court, in order for clear 
and unmistakable error to exist:

(1) "[e]ither the correct facts, as they were known at 
that time, were not before the adjudicator (i.e., more 
than a simple disagreement as to how the facts were 
weighed or evaluated), or the statutory or regulatory 
provisions extant at the time were incorrectly applied," 
(2) the error must be "undebatable" and the sort "which, 
had it not been made, would have manifestly changed the 
outcome at the time it was made," and (3) a 
determination that there was clear and unmistakable 
error must be based on the record and law that existed 
at the time of the prior adjudication in question.

Damrel v. Brown, 6 Vet. App. 242, 245 (1994) (quoting Russell 
v. Principi, 3 Vet. App. 310, 313-14 (1992)).

With respect to prior final rating decisions, the Court has 
consistently stressed the rigorous nature of the concept of 
clear and unmistakable error.  "Clear and unmistakable error 
is an administrative failure to apply the correct statutory 
and regulatory provisions to the correct and relevant facts; 
it is not mere misinterpretation of facts."  Oppenheimer v. 
Derwinski, 1 Vet. App. 370, 372 (1991).

Errors constituting clear and unmistakable error "are errors 
that are undebatable, so that it can be said that reasonable 
minds could only conclude that the original decision was 
fatally flawed at the time it was made."  Russell, 3 Vet. 
App. at 313.  "It must always be remembered that [clear and 
unmistakable error] is a very specific and rare kind of 
'error.'"  Fugo v. Brown, 6 Vet. App. 40, 43 (1993).  A 
disagreement with how the Board evaluated the facts is 
inadequate to raise the claim of clear and unmistakable 
error.  Luallen v. Brown, 8 Vet. App. 92, 95 (1995).

Disability evaluations are determined by the application of a 
schedule of ratings which is based on the average impairment 
of earning capacity in civil occupations.  38 U.S.C.A. § 
1155.  Separate diagnostic codes identify the various 
disabilities.  At the time of the Board's decision in 
February 1982, the veteran's schizophrenia was evaluated 
under 38 C.F.R. Part 4, § 4.132, Diagnostic Code 9204.  A 50 
percent evaluation for schizophrenia was assigned upon a 
showing of considerable impairment of social and industrial 
adaptability.  With lessor symptomatology than that required 
for a 100 percent evaluation producing severe impairment of 
social and industrial adaptability, a 70 percent evaluation 
was warranted.  Where there were active psychotic 
manifestations of such extent, severity, depth, persistence 
or bizarreness as to produce total social and industrial 
inadaptability, a 100 percent rating was warranted.

For VA purposes, total disability will be considered to exist 
when there is present any impairment of mind or body which is 
sufficient to render it impossible for the average person to 
follow a substantially gainful occupation.  38 C.F.R. § 
3.340.  The version of 38 C.F.R. § 4.16(a), the VA regulation 
in effect in February 1982 containing the criteria for TDIU 
provided as follows:

A total rating for compensation may be assigned where 
the schedular rating is less than total, when the 
disabled person is, in the judgment of the rating 
agency, unable to secure or follow a substantially 
gainful occupation as a result of service-connected 
disabilities, Provided That, if there is only one such 
disability, this disability shall be ratable at 60 
percent or more, and that if there are two or more 
disabilities, there shall be at least one disability 
ratable at 40 percent or more, and sufficient additional 
service-connected disability to bring the combined 
rating to 70 percent or more.

The provisions of 38 C.F.R. § 3.343(c) (as in effect in 
February 1982) set forth the evidentiary standard for 
termination of a TDIU:

In reducing a rating of 100 percent service-connected 
disability based on individual unemployability, the 
provisions of § 3.105(e) are for application [requiring 
notice and a 60-day response before the reduction of a 
rating] but caution must be exercised in such a 
determination that actual employability is established 
by clear and convincing evidence.

Also in effect was 38 C.F.R. § 3.344 which set forth the 
criteria that must be satisfied for reduction of a rating in 
effect for a period of more than five years:

Rating agencies will handle cases affected by change of 
medical findings or diagnosis, so as to produce the 
greatest degree of stability of disability evaluations 
consistent with the laws and [VA] regulations governing 
disability compensation and pension.  It is essential 
that the entire record of examinations and the medical-
industrial history be reviewed to ascertain whether the 
recent examination is full and complete, including all 
special examinations indicated as a result of general 
examination and the entire case history....  
Examinations less full and complete than those on which 
payments were authorized or continued will not be used 
as the basis of reduction....  Moreover, though material 
improvement in the physical or mental condition is 
clearly reflected the rating agency will consider 
whether the evidence makes it reasonably certain that 
the improvement will be maintained under the ordinary 
conditions of life. 

38 C.F.R. § 3.344(a) (as in effect in February 1982).  The 
Board notes that the provisions of 38 C.F.R. § 3.344(a) are 
applicable in the veteran's case as the rating for his 
schizophrenia had been 70 percent or greater since December 
1973 when it was reduced to 50 percent as of August 1981, a 
period of more than 7 years.  The RO cited to this regulation 
in its rating decision of February 1980 which continued a 70 
percent rating for schizophrenia but terminated the TDIU 
rating.

It is clear that the requirements for decrease of a rating 
for disabilities which have continued for a long time at the 
same level and for reduction of a TDIU rating are more 
stringent than those for an initial TDIU award or an 
increased rating.  Collier v. Derwinski, 2 Vet. App. 247, 249 
(1992); 38 C.F.R. §§ 3.343, 3.344.  See Tucker v. Derwinski, 
2 Vet. App. 201, 203-04 (1992).  

The standard for termination of a TDIU rating requires that 
actual employability is established by clear and convincing 
evidence.  38 C.F.R. § 3.343(c) (emphasis added).  The "clear 
and convincing" standard of proof is used when the individual 
interests at stake are more substantial than those in a 
typical dispute.  See Olson v. Brown, 5 Vet. App. 430, 434, 
(1993), (citing to Cruzan v. Director, Missouri Dept. of 
Health, 110 S. Ct. 2841, 2853 (1990).  The "clear and 
convincing" standard requires that capacity for work be 
proven to a "reasonable certainty" but not necessarily be 
"undebatable."  Vanerson v. West, 12 Vet. App. 254, 258 
(1999).  The clear and convincing standard of proof is an 
intermediate standard between preponderance of the evidence 
and beyond a reasonable doubt.  Fagan v. West, 13 Vet. App. 
48, 55 (1999).


Factual Background.  The veteran had active military service 
from October 1969 until November 1970, when he was returned 
from Vietnam and discharged because of repeated bouts of 
anxiety with disabling hyperventilation attacks.  Psychiatric 
examination in January 1972 reflects that following his 
separation from military service, he tried to work as an auto 
mechanic but was fired.  He tried to work in a factory, but 
was fired.  He also attempted to study accounting but failed 
after only 2 days of attendance.  Examination revealed stream 
of mental activity to be slow with meager flow of ideas.  He 
complained of frequent and severe headaches, symptoms of 
rather severe anxiety with insomnia, nightmares, restlessness 
at night, hypnagogic auditory hallucinations, being easily 
frightened, jumpy, angered and very irritable, depressed and 
agitated.  He expressed ideas of reference, persecutory 
delusions, and his behavior was somewhat odd.  Retention, 
recall, and concentration were poor.  The diagnosis was 
schizophrenia, undifferentiated type, chronic, and the 
examiner stated that the present mental condition was 
considered a maturation of the anxiety with hyperventilation 
attacks.  

By a decision dated in April 1972, service connection was 
established for schizophrenia and this disorder was rated as 
50 percent disabling from November 1970.  

VA hospital records reflect that when the veteran was 
admitted in November 1973 he admitted to auditory and visual 
hallucinations.  Following his release from service he had 
been mostly aloof and restless, with prolonged episodes of 
seclusiveness.  His affect was inadequate and his mood was 
characteristic of bewilderment.  

An examination for disability evaluation in February 1974 
reflects that after discharge from service the veteran had 
studied for one month but could not continue because of his 
nervous condition.  He spent his time walking aimlessly.  He 
appeared confused.  Behavior was withdrawn.  He was 
disoriented as to time.  Schizophrenia was considered to be 
productive of severe disability.

In a decision dated in May 1974, the rating for the veteran's 
schizophrenia was increased to 70 percent from December 1973.  
When the veteran was admitted to a VA facility in December 
1975 it was noted that he could not sustain conversation, was 
forgetful, had frequent crying spells for no apparent reason, 
and complained of continuous noises in his mind and repeated 
nightmares.  When he left the hospital, it was noted that he 
was considered mentally incompetent to handle VA benefits.

A copy of an award from the Social Security Administration 
dated in October 1973 reflects that the veteran was awarded 
disability benefits as of December 1972.

VA examination for disability purposes in April 1976 noted 
that the veteran had remained unemployed since he left the 
service.  He had been going to a Mental Hygiene Clinic for 
treatment and was prescribed Mellaril, Elavil, and Noludar.  
His affect was shallow and inadequate and his behavior was 
withdrawn.  The schizophrenia was considered to be productive 
of severe disability.

VA hospital records reflect that the veteran was hospitalized 
in August 1977 because of feeling very restless, crying 
spells, poor appetite, nightmares and hearing buzzing sounds.  
He was found to be extremely anxious and shaky.  Thought flow 
was meager and nonspontaneous.  After a month, he was still 
symptomatic and medication had to be increased.  When he was 
released from the hospital in October 1977, it was noted that 
disability for work was severe.

By a rating decision dated in March 1978, the veteran was 
assigned a TDIU rating from November 1977.

VA psychiatric examination in September 1979 reflects that 
the veteran was not working and received psychiatric 
attention at a mental hygiene clinic, taking Mellaril, 
Tofranil, and Dalmane, as well as Tylenol for headaches and 
Maalox for stomach problems.  He was in fair contact with 
reality.  Stream of mental activity was slow, thinking 
logical, but quite concrete and at times blocked.  Content of 
thought revealed emotional isolation, and ambivalent feeling 
about his environment.  He had friends but he was not close 
to anyone.  At times he became depressed and had crying 
spells.  Concentration was poor, insight lacking, and 
judgment poor.  The schizophrenia was described as moderately 
severe.

By a rating decision dated in February 1980, the RO 
terminated the TDIU rating as of May 1, 1980.  The RO 
continued the 70 percent rating for schizophrenia pending 
reexamination in 18 months, with a citation to what is now 38 
C.F.R. § 3.344.  The veteran perfected a timely appeal from 
this decision.

In April 1980, letters were received from 3 individuals from 
whom the veteran had sought employment.  One potential 
employer stated that he had refused to hire the veteran 
because of his behavior during an interview during which "he 
seemed to be excited, sick of his nerves."  Another 
potential employer noted that he had observed the veteran's 
unusual behavior and would not take the risk of "employing a 
person who does not meet the requirements of emotional 
stability and others."  The third potential employer stated 
that the veteran had visited several times looking for 
employment, but that due to the veteran's "health condition 
we have been unable to give him that opportunity."

The veteran underwent another psychiatric examination in 
March 1981.  It was reported that he was very tense and 
restless, but in good contact with reality.  He had not 
worked since his discharge in 1970.  His affect was mostly of 
tension and restless.  A persecutory trend was noted, as was 
a marked tendency to poor interpersonal relationships.  Poor 
toleration was observed.  There was strong dependency on 
medication.  Retention, recall and concentration were poor.  
The schizophrenia was considered to be productive of severe 
disability.

By a rating decision dated in May 1981, the rating for 
schizophrenia was reduced from 70 percent to 50 percent from 
August 1981.  The veteran perfected a timely appeal from this 
decision.

A medical certificate dated in June 1981, from E. Olivo, 
M.D., a psychiatrist, reflects that the veteran had been 
attending regular appointments with this psychiatrist since 
August 1980.  Dr. Olivo noted that the veteran had a history 
of having been hospitalized several times due to his mental 
condition and that when he last interviewed the veteran, he 
found the veteran to be very depressed with suicidal ideas 
and insomnia.  Sporadic auditory hallucinations were also 
noted.  Dr. Olivo concluded as follows:

The symptoms of this patient are compatible 
with a diagnosis of Schizophrenia, 
Undifferentiated, Chronic, being totally 
incapacitated for work due to his condition and 
at present he does not qualify for 
rehabilitation.

In a decision dated February 11, 1982, the Board noted in the 
section entitled "Actions Leading to Present Appellate 
Status" the following:

The veteran is appealing from a rating 
action of February 1980 which confirmed 
and continued the schedular seventy per 
cent (70%) rating assigned for the 
service-connected psychiatric disorder 
and denied continued entitlement to a 
total rating due to individual 
unemployability, effective in May 1980.  
Subsequently, a rating action of May 1981 
reduced the schedular rating to fifty per 
cent (50%) and the appellant is also 
appealing this reduction.

Nevertheless, the Board listed the issues as follows:

Entitlement to an increased rating for schizophrenia, 
undifferentiated type, currently rated as fifty per cent 
(50%) disabling.

Entitlement to a total rating due to individual 
unemployability by reason of service-connected 
disability.

In the February 1982 decision, the Board concluded that the 
schedular criteria for an increased rating for schizophrenia 
had not been met and that the schizophrenia did not preclude 
substantially gainful employment.  


Analysis.  Except for the notation in the "Actions Leading 
to Present Appellate Status," the Board made no reference to 
the fact that the appeal concerned a discontinuation of a 
TDIU rating and a reduction of the rating for schizophrenia.  
Clearly, the Board's decision mischaracterized the issues 
before it in February 1982.  The case was before the Board on 
a direct appeal of a decision that terminated a TDIU rating 
and a decision that reduced the rating for schizophrenia from 
70 percent to 50 percent.  Consequently, by deciding issues 
that were not on appeal, i.e., whether the veteran had 
entitlement to a rating in excess of 50 percent for 
schizophrenia and entitlement to a TDIU rating, the Board did 
not address the issues that were procedurally before it, 
which were whether the reduction of the rating for 
schizophrenia was proper and whether the termination of the 
TDIU rating was proper.  The critical standards for 
termination of a TDIU rating and for reduction of a rating in 
effect for more than 5 years are found in 38 C.F.R. §§ 3.343 
and 3.344.  The Court has held that VA failure to properly 
apply the regulations controlling reduction of ratings 
renders such a reduction void ab initio.  Brown v. Brown, 5 
Vet. App. 413, 422 (1993); Dofflemyer v. Derwinski, 2 Vet. 
App. 277 (1992).  See also Kitchens v. Brown, 7 Vet. App. 
320, 325 (1995); Ternus v. Brown, 6 Vet. App. 370, 376 (1994) 
(Failure to apply reduction regulation was clear and 
unmistakable error).

The result of failing to acknowledge the distinction between 
the propriety of the termination/reduction and a 
determination of initial entitlement to an increased rating 
and a TDIU rating was to deny the veteran the benefit of the 
more stringent evidentiary standards for reduction of the 
rating for schizophrenia and termination of the TDIU rating.

As noted above, under § 3.343(c), actual employability must 
be shown by clear and convincing evidence.  The "clear and 
convincing" standard requires that capacity for work be 
proven to a "reasonable certainty" but not necessarily be 
"undebatable."  Vanerson v. West, 12 Vet. App. 254, 258 
(1999).  The clear and convincing standard of proof is an 
intermediate standard between preponderance of the evidence 
and beyond a reasonable doubt.  Fagan v. West, 13 Vet. App. 
48, 55 (1999); Olson v. Brown, 5 Vet. App. 430, 434 (1993).  
Clearly the provisions of § 3.343(c) were applicable to the 
termination of the TDIU rating, and the Board failed to apply 
them.

Likewise, the provisions of § 3.344 were applicable with 
respect to the reduction in the rating for schizophrenia from 
70 percent to 50 percent, and the Board failed to apply them.  
This regulation provides that even where material improvement 
in a service-connected mental condition is clearly reflected 
by the evidence, VA must "consider whether the evidence 
makes it reasonably certain that the improvement will be 
maintained under the ordinary conditions of life."  38 
C.F.R. § 3.344(a).  If a reduction is at issue, the Board 
must establish, by a preponderance of the evidence and in 
compliance with this regulation, that a rating reduction is 
warranted.  Sorakubo v. Principi, 16 Vet. App. 120, 123-24 
(2002).  

A longitudinal review of the record prior to February 1982 
reveals essentially the same disability picture, with some 
slight waxing and waning of psychiatric symptoms but with 
always the need for multiple psychotropic medication that did 
not seem to significantly arrest the veteran's psychiatric 
symptomatology.

Aside from the question of whether there was evidence of 
material improvement, there was clearly no evidence that the 
veteran was working or actively seeking work.  Thus it was 
that when the Board considered this case in 1982, the 
provisions of 38 C.F.R. § 3.344(a) were not only for 
application, but were also outcome-determinative.  There is 
simply no showing that the Board gave any consideration to 
whether the veteran attained improvement under the ordinary 
conditions of life; that is, while working or actively 
seeking work.  Such consideration could have resulted in no 
other conclusion other than that no true improvement was 
demonstrated.  Because this was a rating reduction case, and 
because the Board failed to apply the proper regulatory 
provisions, the reduction involved CUE and the 70 percent 
rating for schizophrenia must be reinstated as of the date of 
the reduction.

As to the termination of the TDIU rating, a review of the 
record here reveals that the Board did not apply the "clear 
and convincing" standard that was in existence at the time of 
the 1982 decision.  It is beyond question that the VA must 
follow its own regulations.  See Dofflemyer v. Derwinski, 2 
Vet. App. 277, 280-81 (1992); Browder v. Derwinski, 1 Vet. 
App. 204, 205 (1991); Payne v. Derwinski, 1 Vet. App. 85, 87 
(1990).  If § 3.343(c) had been considered, it would have 
manifestly changed the outcome of the decision because at the 
time of the termination of benefits actual employability had 
not been established by any evidence, let alone by clear and 
convincing evidence.  

The only evidence cited by the RO in the February 1980 rating 
consisted of the report of VA examination performed in 
September 1979.  No mention was made in this rating decision 
as to the veteran's employability, other than the notation 
that TDIU benefits were to be terminated as of May 1, 1980.  
The content of the evidence cited in this decision was 
limited to findings in the September 1979 examination report 
with no discussion of the extent to which the service-
connected schizophrenia affected the veteran's capacity to 
engage in gainful employment.  The RO merely repeated the 
September 1979 examination findings without comment.  The 
decision did not refer to the veteran's occupational and 
educational background and included no comment as to his 
employment history or lack thereof.  There was no statement 
alleging a capacity to work, and there was no attempt to 
correlate any such conclusion to any actual reported findings 
in the record.

It is evident that the RO did not have clear and convincing 
evidence of employability with which to legally terminate the 
TDIU rating.  The Board in the February 1982 decision noted 
not only that the veteran had not worked since his discharge 
from service but also that the opinion of his treating 
psychiatrist was that he was totally incapacitated for 
employment.  Nevertheless, the Board concluded that "it is 
not shown that the veteran is prevented from performing some 
type of work on a regular basis."  There was no evidence of 
employability at the time of the 1980 RO decision or at the 
time of the 1982 Board decision.  There was certainly no 
"clear and convincing evidence" with which to terminate the 
TDIU rating.  Reasonable minds could only conclude that the 
decision to terminate the TDIU rating was fatally flawed 
because of the failure to consider applicable regulations.  
See Russell, 3 Vet. App. at 313-14.  This is "the sort of 
error which, had it not been made, would have manifestly 
changed the outcome" of the decision.

The Board's analysis in the 1982 decision was clearly 
inadequate to satisfy the requirements of 38 C.F.R. § 3.343 
inasmuch as the applicable standard, actual employability, 
was not discussed.  By ignoring § 3.343(c), the Board in 
effect reversed the standard of proof required for a TDIU 
termination by requiring that the veteran meet the criteria 
for initial entitlement to such a rating rather than 
requiring the Government to satisfy the legal standard for 
termination.  The Board failed to cite the applicable 
reduction criteria or discuss the evidence of record in light 
of such criteria.  The Board's failure to apply the correct 
legal standard in evaluating this evidence constituted CUE as 
a matter of law.  See Russell, Id.

Furthermore, even if the correct standard had been applied, 
the evidence of record in February 1982 did not establish 
actual employability by any standard, clear and convincing or 
otherwise.  There was no medical opinion or other evidence of 
record to support a finding that the veteran had the mental 
capacity to engage in substantially gainful employment.  A 
determination as to employability or unemployability is 
inherently one of fact rather than law, and the law precludes 
weighing and evaluating of the evidence as a basis for CUE.  
See 38 C.F.R. § 20.1403(d)(3); Baldwin v. West, 3 Vet. App. 
1, 5 (1999); Damrel v. Brown, 6 Vet. App. 242, 246 (1994).  
However, the deficiency in the February 1982 decision was not 
merely that the evidence regarding employability was 
improperly weighed and balanced, but that the decision was 
made without any evidence at all which would have indicated 
employability.

Lastly, the Board would note that the situation here is 
factually similar to that presented in Olson v. Brown, 5 Vet. 
App. 430 (1993), wherein the Court reviewed a November 1990 
Board decision that had denied entitlement to a TDIU 
following an RO termination of such rating on the basis that 
service-connected disability did not prevent the veteran from 
engaging in all forms of gainful employment.  On appeal, the 
Court reversed the Board's decision as a result of its 
failure to apply § 3.343(c). The Court stated the following:

In the present case, there was no 
evidence of employability at the time of 
the 1981 RO decision; the RO certainly 
did not have "clear and convincing 
evidence" with which to terminate the 
veteran's [TDIU].  Reasonable minds could 
only conclude that the original decision 
was fatally flawed because of the failure 
to consider the applicable regulations.  
See Russell, 3 Vet. App. at 313-14.  This 
is "the sort of error which, had it not 
been made, would have manifestly changed 
the outcome" of the decision.

Olson v. Brown, 5 Vet. App. at 435 (emphasis in original).  
The Board finds that if the provisions of 38 C.F.R. § 
3.343(c) had been applied in the Board's decision of February 
1982, the outcome of that decision would have been manifestly 
different.  Therefore, the Board's November 1982 decision 
denying the veteran's appeal of the termination of a TDIU 
involved CUE.  

The Board's decision of February 1982 involved CUE with 
regard to both the reduction of the 70 percent rating for 
schizophrenia and the TDIU termination.  Accordingly, the 
February 1982 Board decision is reversed and the RO is 
directed to reinstate the 70 percent rating for 
schizophrenia, effective the date of the reduction, and to 
reinstate the veteran's former TDIU rating, with an effective 
date of May 1, 1980, the date that the TDIU rating was 
terminated.


ORDER

Restoration the 70 percent rating for schizophrenia and the 
TDIU rating on the basis of CUE in the Board's decision of 
February 11, 1982, is granted.



                       
____________________________________________
	Gary L. Gick
	Veterans Law Judge, Board of Veterans' Appeals




 Department of Veterans Affairs