Citation Nr: 1115490 Decision Date: 04/20/11 Archive Date: 05/04/11 DOCKET NO. 06-21 547 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Milwaukee, Wisconsin THE ISSUE Whether there was clear and unmistakable error (CUE) in a June 8, 1962, rating decision which reduced the 50 percent disability rating to 30 percent for anxiety reaction. REPRESENTATION Appellant represented by: Disabled American Veterans ATTORNEY FOR THE BOARD T. L. Douglas, Counsel INTRODUCTION The appellant is a Veteran who served on active duty from March 1943 to February 1946. This matter comes before the Board of Veterans' Appeals (Board) by order of the United States Court of Appeals for Veterans Claims (hereinafter "the Court") on December 28, 2010, which reversed a March 2010 Board decision. The Court had previously vacated a January 2008 Board decision. The issue initially arose from a January 2006 rating decision by the Milwaukee, Wisconsin, Regional Office (RO) of the Department of Veterans Affairs (VA). Please note this appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2010). 38 U.S.C.A. § 7107(a)(2) (West 2002). FINDING OF FACT A June 8, 1962, rating decision which reduced a 50 percent disability rating for anxiety reaction to 30 percent effective August 8, 1962, erroneously failed to consider the provisions of 38 C.F.R. § 3.344 which, had such error not been made, would have manifestly changed the outcome of that decision. CONCLUSION OF LAW The criteria for reversal of the June 8, 1962, rating decision which reduced the 50 percent disability rating to 30 percent for anxiety reaction effective August 8, 1962, on the basis of CUE have been met. 38 U.S.C.A. § 7105 (West 2002); 38 C.F.R. § 3.105 (2010). REASONS AND BASES FOR FINDING AND CONCLUSION The Veterans Claims Assistance Act of 2000 (VCAA) describes VA's duty to notify and assist claimants in substantiating a claim for VA benefits. 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5107, 5126 (West 2002 & Supp. 2010); 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a) (2010). The Court has held that the VCAA is not applicable to claims alleging clear and unmistakable error. Livesay v. Principi, 15 Vet. App. 165 (2001). Pursuant to 38 C.F.R. § 3.104(a), "[a] decision of a duly constituted rating agency . . . shall be final and binding . . . based on evidence on file at the time and shall not be subject to revision on the same factual basis." See also 38 U.S.C.A. § 5108 (West 2002). An exception to this rule is when the VA has made a clear and unmistakable error in its decision pursuant to 38 C.F.R. § 3.105. Previous determinations which are final and binding, including decisions of service connection, will be accepted as correct in the absence of clear and unmistakable error. Where evidence establishes such error, the prior decision will be reversed or amended. 38 C.F.R. § 3.105(a) (2010). At the time of the June 1962 rating decision at issue, 38 C.F.R. § 3.344 (1961) was the relevant regulation pertaining to stabilization of disability evaluations. That regulation stated that 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. Ratings on account of disease subject to temporary or episodic improvement, e.g., manic depressive or other psychotic reaction, epilepsy, psychoneurotic reaction, arteriosclerotic heart disease, bronchial asthma, gastric or duodenal ulcer, many skin diseases, etc., will not be reduced on any one examination, except in those instances where all the evidence of record clearly warrants the conclusion that sustained improvement has been demonstrated. . . . 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) (1961). The regulation specified that the provisions of 38 C.F.R. § 3.344(a) apply to ratings that have continued for long periods at the same level (5 years or more). 38 C.F.R. § 3.344(c) (1961). The Court has observed that the regulatory language of 38 C.F.R. § 3.344(a) has not changed since its adoption in February 1961 and that it has consistently held that where VA reduces a veteran's disability rating without following the applicable VA regulations, the reduction is void ab initio. Greyzck v. West, 12 Vet. App. 288, 292 (1999) (citing Kitchens v. Brown, 7 Vet. App. 320, 325 (1995)); Murincsak v. Derwinski, 2 Vet. App. 363, 369 (1992); Schafrath v. Derwinski, 1 Vet. App. 584, 596 (1991). Where the issue is whether VA is justified in reducing a veteran's protected rating, it must be established by a preponderance of the evidence and compliance with 38 C.F.R. § 3.344 that a rating reduction is warranted. Sorakubo v. Principi, 16 Vet. App. 120, 123-24 (2002) (citing Brown v. Brown, 5 Vet. App. 413, 421 (1993)). In this case, the Court in its December 28, 2010, decision found the Board erred in concluding that the RO in its June 1962 decision correctly applied the provisions of 38 C.F.R. § 3.344(a) before reducing the Veteran's disability rating. The Court found that a January 1961 VA medical evaluation could not be used as the basis for a rating reduction and that there was no other evidence of record at the time of the June 1962 RO decision including a report of a VA field investigator that reasonably complied with 38 C.F.R. § 3.344. Therefore the Court found that it was undebatable that the June 1962 RO did not afford the Veteran the benefit of 38 C.F.R. § 3.344 before reducing the Veteran's disability rating. As such, the Court reversed the Board's decision to the extent that it found that the June 1962 RO did not incorrectly apply applicable law. See Joyce v. Nicholson, 19 Vet. App. 36, 434 (2005). The Court noted further that in order for there to be CUE in the June 1962 rating decision, the outcome would have to have been manifestly different; that is, it must be clear that the Veteran's disability rating would not have been reduced from 50 percent to 30 percent had the RO correctly applied 38 C.F.R. § 3.344. The Court found, in this regard, that there was no examination of record in June 1962 that could have been used for the basis of a rating reduction under 38 C.F.R. § 3.344 and, as such, the Veteran's disability rating would not have been reduced in June 1962 had that provision been correctly applied. The Court therefore, found that any finding by the Board that the error did not manifestly change the outcome of this case cannot stand. The Court reversed the Board's finding that the June 1962 RO decision did not contain CUE and the June 1962 RO decision was deemed void ab initio. Therefore, pursuant to the Court's order, the June 8, 1962, rating decision which reduced the 50 percent disability rating for anxiety reaction to 30 percent effective August 8, 1962, is clearly and unmistakably erroneous and the rating reduction determination is reversed. ORDER The appeal to restore a 50 percent rating for anxiety reaction effective from August 8, 1962, is granted. ____________________________________________ S. L. Kennedy Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs