Citation Nr: 18142405 Decision Date: 10/15/18 Archive Date: 10/15/18 DOCKET NO. 15-45 535 DATE: October 15, 2018 REMANDED Entitlement to a total disability rating based on individual unemployability due to service-connected disabilities (TDIU) on an extraschedular basis is remanded. REASONS FOR REMAND The Veteran served on active duty from October 1951 to June 1952 and from October 1962 to November 1962, with additional periods of service in the Air Force Reserves. This matter comes before the Board of Veterans’ Appeals (Board) on appeal from February 2015 and November 2015 rating decisions. In October 2016, the Veteran and his spouse testified at a videoconference Board hearing before the undersigned, and a transcript is of record. In a February 2017 decision, in pertinent part, the Board denied entitlement to an initial disability rating in excess of 40 percent for a lower back disability, and it determined that the issue of entitlement to a TDIU had not been raised under Rice v. Shinseki, 22 Vet. App. 447 (2009). As to the issue of entitlement to a TDIU, the Veteran appealed the decision to the United States Court of Appeals for Veterans Claims (Court), which in a February 2018 order, granted the parties’ Joint Motion for Partial Remand. Entitlement to a TDIU on an extraschedular basis is remanded. The Veteran is service-connected for degenerative arthritis thoracolumbar spine, degenerative disc disease lumbar spine, L1, L2 osteoporotic compression fractures post kyphoplasty (claimed as lower back condition) evaluated as 40 percent disabling; tinnitus evaluated as 10 percent disabling; and noncompensable bilateral hearing loss. His combined evaluation is 50 percent disabling, which does not meet the schedular requirements for a TDIU. See 38 C.F.R. § 4.16(a) (“if there are two or more disabilities, there shall be at least one disability ratable at 40 percent or more, and sufficient additional disability to bring the combined rating to 70 percent or more”). Nevertheless, extraschedular TDIU is available for “all veterans who are unable to secure and follow a substantially gainful occupation by reason of service-connected disabilities.” 38 C.F.R. § 4.16(b). Subsequent to the Court’s order, the Veteran filed an application for increased compensation based on unemployability along with a Social Security earnings statement, and a privately prepared employability evaluation. The Veteran’s attorney contends that the Board has the authority to award an extraschedular TDIU in the first instance. The Board disagrees and remands this case to the Agency of Original Jurisdiction (AOJ) in compliance with 38 C.F.R. § 4.16(b). In Floyd v. Brown, 9 Vet. App. 88 (1996), interpretation of 38 C.F.R. § 3.321(b)(1), which pertains to extraschedular ratings in exceptional cases, was at issue. The majority opined that the Board does not have the authority to assign an extraschedular rating in the first instance. Id. at 95. In a dissent, Judge Steinberg opined that the Board did have such authority. Id. at 98–104. Writing for the majority in Bowling v. Principi, 15 Vet. App. 1 (2001), which pertained to interpreting 38 C.F.R. § 4.16(b) and the award of extraschedular TDIU, Judge Steinberg stated: In view of the precedent and reasoning in Floyd, then, we hold today that we cannot order the Board to award TDIU under § 4.16(b), which unlike § 3.321(b), provides that the claim should be submitted to the C&P Director, because the Board has no power to do so in the first instance. Id. at 10. Judge Steinberg pointed out that the language in § 3.321(b) was less directory than that in § 4.16(b). Section 4.16(b) provides: 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 who 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. 38 C.F.R. § 4.16(b) (emphasis added). As stated in Wages v. McDonald, 27 Vet. App. 233 (2015), the “should” has been interpreted to mean “shall.” Id. at 236. The Court noted that the regulation, on its face, acted to withhold “from rating boards the authority to grant extraschedular TDIU in the first instance.” Id. It was also noted that although § 4.16(b) refers to rating boards “and does not specifically mention the Board,” the Court held in Bowling that the Board is bound by it. Id. It is imperative to remain mindful that the Board is an appellate body. 38 U.S.C. § 7104(a) (“All questions in a matter which under section 511(a) of this title [38 U.S.C.S § 511(a)] is subject to decision by the Secretary shall be subject to one review on appeal to the Secretary.”). As an appellate body, the Board is charged with reviewing AOJ determinations for compliance with due process requirements and remanding for correction when there has been a failure, such as when there has been a failure in the duty to assist, 38 C.F.R. § 3.159; the failure to issue a statement of the case or supplemental statement of the case, Manlincon v. West, 12 Vet. App. 238 (1999); or the failure to comply with the Board’s remand directives, Stegall v. West, 11 Vet. App. 268 (1998). Section 4.16(b) directs that the Director is the authorized entity for granting an extraschedular TDIU in the first instance. Thereafter, “nothing in the language of § 4.16(b) purports to limit the Board’s scope of review of the Director’s decision.” Wages, 27 Vet. App. at 236. Failures at the AOJ level create delays in adjudication of veteran’s claims, including when the AOJ does not refer an extraschedular TDIU claim to the Director prior to the case arriving at the Board the first time. The take-home message may be that, to serve the veterans most efficaciously, the AOJ’s threshold for referral to the Director for extraschedular TDIU should be rather low since a remand from the Board is required when the record is not adequately developed. In Wages, the Secretary argued that the Board’s de novo standard of review rendered “the referral process in § 4.16(b) meaningless.” Id. at 238. The Court pointed out, however, that “such a referral is the Secretary’s chosen procedure under § 4.16(b).” Id. In other words, if the Secretary does not like the result, then the Secretary must change the regulation or its interpretation. Although the procedure is cumbersome, the Court noted several benefits to be gained from it such that it is not meaningless: (1) it provides a degree of uniformity in the awards of TDIU, and (2) it “ensures that the Director is aware of the number and type of cases involving unemployability due to service-connected disabilities, which would permit the Director to assess whether changes to the rating schedule or § 4.16(a) might be warranted.” Id. Accordingly, to that end and so the Board will have a determination to review, this case must be remanded for referral to the Director for consideration of entitlement to a TDIU on an extraschedular basis. The matter is REMANDED for the following action: 1. Refer the claim to the Director, Compensation Service, for consideration of whether a TDIU on an extraschedular basis is warranted. John J. Crowley Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD Leanne M. Innet, Associate Attorney