This Report summarizes an opinion issued on January 20, 2022 (Part I); and cases granted review on January 14, 2022 (Part II).

Cases Granted Review: George v. McDonough, 21-234

George v. McDonough, 21-234. The Court will determine whether the Department of Veterans Affairs’ “application of a regulation that conflicts with the plain meaning of a statute” to deny a veteran’s claim for benefits is “the kind of ‘clear and unmistakable error’ that the veteran may invoke to challenge [the] VA’s decision.” Congress has conferred on veterans seeking veterans’ benefits “generous appellate rights,” including avenues for reviving claims that have been denied and for which the appellate process has run. If a VA regional office denies a veteran’s claim for benefits, the veteran can appeal to the Board of Veterans’ Appeals, then to the Veterans Court, and then to the Federal Circuit. Yet Congress has also provided “two ways veterans can continue to pursue their claims, even after the normal appellate process has finished.” As relevant here, a veteran can collaterally attack the original denial “even without providing new evidence if he can show that the decision was based on ‘clear and unmistakable error,’ 38 U.S.C. §§5109A(d), 7111(d), typically abbreviated as ‘CUE’.” And, critically, “a successful CUE claim entitles the veteran to benefits from the date of the original claim.”

Petitioner Kevin George filed a CUE motion seeking to revise the VA’s 1977 denial of his application for service-related disability benefits on the ground that the VA had applied a regulation that was ultimately invalidated as inconsistent with the plain text of the authorizing statute. After serving roughly three months in the Marines in 1975, petitioner was discharged following a diagnosis of paranoid schizophrenia, which had gone undetected during his pre-enlistment medical exams. A few months after discharge, petitioner filed for disability benefits with the VA, “asserting that his schizophrenia was service-connected because it was contracted in or aggravated by his military service.” By statute, veterans are presumed to be in “sound condition when examined, accepted, and enrolled for service.” 38 U.S.C. §1111. The Government can defeat the presumption of soundness “only by offering ‘clear and unmistakable evidence’ demonstrating both ‘that the injury or disease existed before acceptance and enrollment and was not aggravated by such service.’” Although the statute required the Government to make two showings (not pre-existing and not aggravated), the VA’s implementing regulation at the time allowed the Government to defeat “the presumption of soundness solely with ‘clear and unmistakable (obvious or manifest) evidence’ that ‘an injury or disease existed prior’ to enrollment.” The Board of Veterans’ Appeals applied that regulation and denied petitioner’s claim for benefits because the evidence established that he had schizophrenia prior to his service. Then, in 2003, the VA’s general counsel issued a “precedential opinion” explaining that the “presumption-of-soundness regulation ‘conflicts with the language of section 1111,’ because ‘section 1111 requires VA to bear the burden of showing the absence of aggravation in order to rebut the presumption of sound condition.’” A year later, the Federal Circuit confirmed that the regulation conflicted with the clear and unambiguous text of the statute. Wagner v. Principi, 370 F.3d 1089 (Fed. Cir. 2004). Ten years later, petitioner filed his CUE motion with the Board, asking the Board to revise its 1977 decision (and grant retroactive benefits) on the ground that the Board had committed clear and unmistakable error in applying a then-existing regulation that contravened the plain and unambiguous statutory text. The Board denied petitioner’s motion, and both the Veterans’ Court and the Federal Circuit affirmed. 991 F.3d 1227.

Petitioner argues that the Board’s application of the regulation in 1977 constituted clear and unmistakable error because that regulation “was plainly in conflict with the statute,” which clearly and unambiguously “required the government to rebut the presumption of in-service aggravation.” According to petitioner, the fact that the Federal Circuit did not invalidate the regulation until nearly 30 years later “does not change the nature or clarity of the 1977 Board’s legal error” because “[w]hen a court declares the unambiguous meaning of a statute, that ‘judicial construction . . . is an authoritative statement of what the statute meant before as well as after the decision of the case giving rise to that construction.’” Petitioner insists that Congress intended the CUE statutes “to have this scope” based on the history underlying CUE review: The CUE statutes, enacted in 1997, codified a “longstanding [VA] regulation that subjected regional office decisions to CUE,” and “[n]othing in that regulation, 38 C.F.R. §3.105 (1997), shielded erroneous interpretations of a statute from CUE review.” And “[e]ven if there were any doubt,” petitioner says, “the pro-veteran canon”—under which ambiguities in statutes governing VA benefits are resolved in favor of beneficiaries—“requires resolving those doubts in [petitioner’s] favor.”

The Secretary rejects petitioner’s reading and maintains that the Federal Circuit’s decision is correct because the 1977 Board correctly applied the then-governing regulation. According to the Secretary, “clear and unmistakable error has not historically been understood to encompass claims . . . that are premised on the judicial invalidation of a regulation that was correctly applied at the time of the original decision.” The Secretary emphasizes that “a claim of clear and unmistakable error must be based on the law in effect at the time of the decision”—a point petitioner does not contest—and asserts that the regulation applied by the 1977 Board “was plainly ‘law’ at the time.” Because “the Board in 1977 correctly applied that regulation . . . when it denied petitioner’s claim for benefits,” the Secretary argues, it follows that the Board did not commit a clear and unmistakable error that can be revised nearly half a century later.

[Editor’s note: Some of the language in the background section of the summary above was taken from the petition for writ of certiorari and brief in opposition.]