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Johnson v. McDonald

United States Court of Appeals, Federal Circuit

August 6, 2014

MARVIN O. JOHNSON, Claimant-Appellant,
v.
ROBERT A. MCDONALD, Secretary of Veterans Affairs, Respondent-Appellee

Appeal from the United States Court of Appeals for Veterans Claims in No. 10-1785, Judge Mary J. Schoelen.

KENNETH M. CARPENTER, Carpenter, Chartered, of Topeka, Kansas, argued for claimant-appellant.

MARTIN F. HOCKEY, JR., Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for respondent-appellee. With him on the brief STUART F. DELERY, Assistant Attorney General, and BRYANT G. SNEE, Acting Director. Of counsel on the brief were DAVID J. BARRANS, Deputy Assistant General Counsel, and MARTIE ADELMAN, Attorney, United States Department of Veterans Affairs, of Washington, DC.

Before MOORE, O'MALLEY, and CHEN, Circuit Judges. OPINION filed by Circuit Judge MOORE. Concurring opinion filed by Circuit Judge O'MALLEY.

OPINION

Page 1363

Moore, Circuit Judge.

Marvin O. Johnson appeals from the decision of the Court of Appeals for Veterans Claims (Veterans Court) denying his request for referral for extra-schedular consideration of his service-connected disabilities. Because the Veterans Court's interpretation of 38 C.F.R. § 3.321(b)(1), which governs referral for extra-schedular consideration, contravenes the plain meaning of the regulation, we reverse and remand.

I.

When determining compensation for service-connected disabilities, the Department of Veterans Affairs (DVA) generally assigns disability ratings based on a schedule of ratings for specific injuries and diseases. Ratings are typically assigned based on the degree of disability and the effect it has on a veteran's earning capacity, but are sometimes also based on other factors such as effect on social functioning or effect on daily activities. In some cases the schedular criteria are inadequate to capture the full extent and impact of the veteran's disability. The DVA has thus provided by regulation that in such " [e]xceptional cases," the veteran may be eligible for an " extra-schedular" disability rating. 38 C.F.R. § 3.321(b)(1). There is no dispute that § 3.321(b)(1) entitles a veteran to consideration for referral for extra-schedular evaluation based on an individual disability not adequately captured by the schedular evaluations. This appeal concerns whether § 3.321(b)(1) also entitles a veteran to consideration for referral for extra-schedular evaluation based on multiple disabilities, the combined effect of which is exceptional and not captured by schedular evaluations.

Mr. Johnson served in the U.S. Army from May 1970 to December 1971. Years after leaving the service, Mr. Johnson filed a claim for increased disability ratings for his service-connected disabilities, including rheumatic heart disease (then rated 10% disabling), and degenerative changes of the right and left knees (each knee rated 10% disabling). A DVA regional office (RO) denied Mr. Johnson's claims, finding that he was not entitled to a rating of total disability based on individual unemployability (TDIU). Mr. Johnson appealed to the Board of Veterans' Appeals (Board), and the Board affirmed the denial of Mr. Johnson's TDIU claim. The Board also denied Mr. Johnson's claim for extra-schedular consideration of the combined impact of his service-connected rheumatic heart disease and right knee disability under § 3.321(b)(1). Mr. Johnson appealed to the Veterans Court, arguing that the plain language of § 3.321(b)(1) requires the DVA to consider his disabilities both individually and collectively in deciding whether he was entitled to an extra-schedular evaluation.

In an en banc decision, a majority of the Veterans Court affirmed the Board. Johnson v. Shinseki, 26 Vt.App. 237, 248 (2013). It found the language of § 3.321(b)(1) ambiguous, explaining that " it is not clear from the language of the regulation whether an extra-schedular evaluation is to be awarded solely on a disability-by-disability basis or on the combined effect of a veteran's service-connected disabilities." Id. at 243. The Veterans

Page 1364

Court concluded that, given the ambiguity in the language, it should defer to the DVA's interpretation of the regulation. Id. It found that the DVA interpreted § 3.321(b) in the Veterans Benefits Administration Adjudication Procedure Manual (VBA Manual) Rewrite M21-1MR, Part III, Subpart. iv, chapter 6, § B.5.c, which states that a claim is to be submitted for extra-schedular consideration " if the schedular evaluations are considered inadequate for an individual disability." Id. at 244. The Veterans Court determined that the DVA's interpretation was entitled to substantial deference because it was not unreasonable, plainly erroneous, or inconsistent with the regulation and statutory scheme. Id. at 244-45. Based on the DVA's interpretation as reflected in the VBA Manual, the Veterans Court concluded that the Board was not required to consider whether Mr. Johnson was entitled to referral for extra-schedular consideration of his disabilities on a collective basis. Id. at 245.

Judge Moorman filed an opinion concurring in the result. Id. at 249 (Moorman, J., concurring). He explained that the plain language of § 3.321(b)(1) " on its face, appears most easily construed to convey only one meaning--that a veteran's collective service-connected disabilities may be considered in determining whether referral for an extraschedular rating is warranted." Id. at 248. However, he concluded that the DVA " has offered an alternative meaning for the language in the regulation that is plausible, albeit not obvious." Id. He explained that based on the " deference due to an agency in its interpretation of its own regulations, [he] reluctantly conclude[d] that the Secretary has ...


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