**United States Court of Appeals for the Federal Circuit**

04-7034

TIMOTHY J. JORDAN, Claimant-Appellant, v. R. JAMES NICHOLSON, Secretary
of Veterans Affairs, Respondent-Appellee.

Helen S. Irza, Morrison & Foerster LLP, San Diego, California, argued
for claimant-appellant. On the brief was Ronald L. Smith. Of counsel was
Donald E. Purcell, Disabled American Veterans, of Washington, DC. Martin
F. Hockey, Jr., Senior Trial Counsel, Commercial Litigation Branch,
Civil Division, United States Department of Justice, of Washington, DC,
argued for respondent-appellee. With him on the brief were Peter D.
Keisler, Assistant Attorney General and David M. Cohen, Director. Of
counsel on the brief were Michael J. Timinski, Deputy Assistant General
Counsel and David J. Barrans, Staff Attorney, United States Department
of Veterans Affairs, of Washington, DC. Appealed from: United States
Court of Appeals for Veterans Claims Judge Jonathan R. Steinberg

**United States Court of Appeals for the Federal Circuit**

04-7034

TIMOTHY J. JORDAN, Claimant-Appellant, v. R. JAMES NICHOLSON, Secretary
of Veterans Affairs, Respondent-Appellee.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ DECIDED: March
15, 2005 \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Before
NEWMAN, RADER, and BRYSON, Circuit Judges. RADER, Circuit Judge.

The Court of Appeals for Veterans Claims (Veterans Court) affirmed the
Board of Veterans' Appeals' (Board's) decision, which rejected Timothy
Jordan's claim. Mr. Jordan had asserted that a 1983 Board decision
denying him service connection status on a knee disorder contained clear
and unmistakable error (CUE). Jordan v. Principi, No. 00-206 (Vet. App.
Sept. 24, 2003). Because the Veterans Court correctly determined that
CUE does not arise from a change in the interpretation of a statute,
this court affirms.

I

Mr. Jordan served in the military for one month and nineteen days, from
November 1969 through January 1970. Fifteen months before entering
service, Mr. Jordan suffered left and right knee injuries from a
motorcycle accident. Mr. Jordan's medical entrance examination report
records a scar below the left knee but otherwise makes no mention of
these injuries. Less than one month after service entry, Mr. Jordan
complained of right knee pain, which a doctor diagnosed as
chondromalacia patella. The military discharged Mr. Jordan in January
1970. In August 1981, Mr. Jordan filed for service connection status on
his right knee injury with the VA regional office (RO). The RO denied
this claim in November 1981. The RO concluded that Mr. Jordan's right
knee injury predated his service entry, and that his service had not
aggravated that injury. Mr. Jordan then appealed the RO decision to the
Board. The Board affirmed the RO's decision in April 1983 finding "clear
and unmistakable evidence that the veteran suffered a right kneecap
trauma prior to entrance on active service." Additionally, the Board
determined that "\[d\]uring the veteran's period of service there was no
increase in the severity of his preexisting right knee disorder." In
1999, Mr. Jordan filed a CUE claim disputing the 1983 Board decision. In
November 1999, the Board ruled that there was no CUE in its 1983
decision. In so holding, the Board noted that "there was more than
adequate evidence showing that the veteran's right knee disorder
underwent no permanent increase in severity during his period of active
service." Mr. Jordan next appealed the 1999 Board ruling to the Court of
Appeals for Veterans Claims. Mr. Jordan argued that the 1983 Board
decision misinterpreted provisions in 38 U.S.C. § 1111 that govern the
presumption of soundness. In particular, Mr. Jordan contended that the
1983 Board decision did not require the Government to rebut the
presumption of soundness with clear and unmistakable evidence that his
disability was not aggravated during service. While Mr. Jordan's
Veterans Court appeal was pending, the VA's General Counsel issued an
opinion stating that 38 C.F.R. § 3.304, the VA regulation that
implements section 1111, conflicted with the language of section 1111.
Nevertheless, in 2003, the Veterans Court affirmed the 1999 Board
decision, finding no CUE because CUE "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" under 38 C.F.R. § 20.1403(e). II. This
court has jurisdiction to review Veterans Court decisions on issues of
law under 38 U.S.C. § 7292. Szemraj v. Principi, 357 F.3d 1370, 1374-75
(Fed. Cir. 2004) (citation omitted). This court reviews the asserted
legal error without deference. Id. at 1372. On appeal, Mr. Jordan
contends that 38 C.F.R. § 3.304, the VA regulation implementing section
1111, is void ab initio. Mr. Jordan notes that the VA interpreted
section 1111 contrary to its facially apparent meaning. As such, Mr.
Jordan would have this court hold that invalidation of this regulation
can retroactively affect final decisions, unlike a new interpretation of
a regulation, which "can only retroactively \[a\]ffect decisions still
open on direct review, not those decisions that are final." Disabled Am.
Veterans v. Gober, 234 F.3d 682, 698 (Fed. Cir. 2000).

The Government responds that this court's decision in Gober,
interpreting 38 C.F.R. § 20.1403(e), controls this issue of retroactive
application of an erroneous regulatory interpretation. The Government
further notes that even later-invalidated statutes and regulations do
not have retroactive effect under U.S. Supreme Court precedent. Finally,
the Government contends that even if invalidated regulations did have
retroactive effect, the VA regulation in question is not void ab initio
because section 1111 is ambiguous when read in light of section 1153.
The VA regulation in question, Section 3.304(b), provides: The veteran
will be considered to have been in sound condition when examined,
accepted and enrolled for service, except as to defects, infirmities, or
disorders noted at entrance into service, or where clear and
unmistakable (obvious or manifest) evidence demonstrates that an injury
or disease existed prior thereto. Only such conditions as are recorded
in examination reports are considered as noted. (Emphasis added.) In
contrast, section 1111 provides: For the purposes of section 1110 of
this title, every veteran shall be taken to have been in sound condition
when examined, accepted, and enrolled for service, except as to defects,
infirmities, or disorders noted at the time of the examination,
acceptance, and enrollment, or where clear and unmistakable evidence
demonstrates that the injury or disease existed before acceptance and
enrollment and was not aggravated by such service. (Emphasis added.)
Section 3.304(b), when compared to section 1111, notably omits the
requirement of clear and unmistakable evidence for aggravation of an
injury. This court recently held that section 1111 requires that "the
Government must show clear and unmistakable evidence of both a
preexisting condition and a lack of in-service aggravation to overcome
the presumption of soundness for wartime service." Wagner v. Principi,
370 F.3d 1089, 1096 (Fed. Cir. 2004). This appeal does not question
again the correct legal standard under section 1111. Wagner governs that
issue. Rather, this case asks whether the change in legal standards in
the interpretation of the regulations should retroactively affect CUE
claims. Mr. Jordan seeks to avoid this court's precedent in Gober,
arguing that the prior, now invalid, regulation was void ab initio and
therefore did not really exist at the time of his entry. Thus, Gober
would not apply to this case. Although creative, Mr. Jordan's argument
finds no legal support. Mr. Jordan fails to recognize that there was a
change in interpretation of section 1111 with the issuance of the
opinion by the VA's General Counsel stating that 38 C.F.R. § 3.304
conflicted with the language of section 1111. Wagner, 370 F.3d at 1092.
Mr. Jordan believes that section 3.304 was inaccurate in setting forth
the proper legal standard and that it was void ab initio. However, the
accuracy of the regulation as an interpretation of the governing legal
standard does not negate the fact that the regulation did provide the
first commentary on section 1111, and was therefore the initial
interpretation of section 1111. Hence, Gober applies to the change in
interpretation of that statute as affected by the issuance of the
General Counsel's opinion. First, 38 C.F.R. § 20.1403(e) plainly states:
"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." This court
in Gober has affirmed that rule: "The new interpretation of a statute
can only retroactively \[a\]ffect decisions still open on direct review,
not those decisions that are final." Gober, 234 F.3d at 698. In this
case, the interpretation of the regulation has indeed changed, but
because the 1983 Board decision was final, Mr. Jordan has no recourse
for appeal through a CUE claim; 38 C.F.R. § 20.1403(e) clearly
proscribes Mr. Jordan's claim. Moreover, Mr. Jordan's void ab initio
argument does not give adequate weight to the finality of judgments. The
Supreme Court has repeatedly denied attempts to reopen final decisions
in the face of new judicial pronouncements or decisions finding statutes
unconstitutional. See, e.g., Reynoldsville Casket Co. v. Hyde, 514 U.S.
749, 752 (1995) (new judicial interpretations of a statute apply to "all
pending cases"); Chicot County Drainage Dist. v. Baxter State Bank, 308
U.S. 371, 374-75 (1940) (upholding a decision that was based on a
statute later found unconstitutional). Thus, even in the extreme
instance of unconstitutional application of a statute, the Supreme Court
does not supply a retroactive remedy for final judgments. In sum, Mr.
Jordan's void ab initio argument has no legal support and does not
accord sufficient respect to a final judgment. Accordingly, this court
affirms the Veterans Court's determination that CUE does not arise from
a new regulatory interpretation of a statute.

COSTS Each party shall bear its own costs. AFFIRMED 04-7034 7