105TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 105–52

TO ALLOW REVISION OF VETERANS BENEFITS DECISIONS BASED ON CLEAR AND UNMISTAKABLE ERROR

APRIL 14, 1997.—Committed to the Committee of the Whole House on the State of

the Union and ordered to be printed

Mr. STUMP, from the Committee on Veterans’ Affairs, submitted–

the–following

R E P O R T

[To accompany H.R. 1090]

[Including cost estimate of the Congressional Budget Office]

The Committee on Veterans’ Affairs, to whom was referred the

bill (H.R. 1090) to amend title 38, United States Code, to allow revision of veterans benefits decisions based on clear and unmistakable error, having considered the same, reports favorably thereon

without amendment and recommends that the bill do pass.

INTRODUCTION

On March 18, 1997, the Ranking Democratic Member of the

Committee on Veterans Affairs, the Honorable Lane Evans, along

with the Honorable Bob Stump, Chairman of the Committee on

Veterans Affairs, the Honorable Bob Filner, Ranking Member of

the Subcommittee on Benefits, the Honorable Barney Frank, the

Honorable Carolyn Maloney, the Honorable Donald Payne, the

Honorable Phil English, and the Honorable William Lipinski introduced H.R. 1090, to allow revision of veterans benefits decisions

based on clear and unmistakable error.

The full Committee met on March 20, 1997 and ordered H.R.

1090 reported favorably to the House by unanimous voice vote.

SUMMARY OF THE REPORTED BILL

H.R. 1090 would:

1. Amend chapter 51 of title 38, United States Code, to codify existing regulations which make decisions made by the Secretary
2

at a regional office subject to revision on the grounds of clear

and unmistakable error by the Regional Office.

2. Amend chapter 71 of title 38, United States Code, to make decisions made by the Board of Veterans’ Appeals subject to revision on the grounds of clear and unmistakable error.

3. Permit appeal to the Court of Veterans Appeals of any decision

made before, on, or after enactment on the grounds of clear

and unmistakable error.

BACKGROUND AND DISCUSSION

The VA claim system is unlike any other adjudicative process. It

is specifically designed to be claimant friendly. It is non-adversarial; therefore, the VA must provide a substantial amount of assistance to a veteran seeking benefits. When the veteran first files a

claim, VA undertakes the obligation of assisting the veteran in the

development of all evidence pertinent to that claim. There is no

true finality of a decision since the veteran can reopen a claim at

any time merely by the presentation of new and material evidence.

Any decision may be appealed within one year. The appeal is initiated by a simple notice of disagreement after which VA is obligated to furnish a detailed statement of the facts and law pertinent

to the claim.

The reported bill would make decisions by VA Regional Offices

and the Board of Veterans Appeals (BVA) subject to review on the

grounds of clear and unmistakable error. Regional office decisions

are currently reversible on this basis by regulation, but BVA decisions are not. Smith v. Brown, 35 F. 3d. 1516, 1523 (Fed. Cir.

1994). The bill would effectively codify this regulation, and extend

the principle underlying it to BVA decisions.

The BVA is an appellate body located in Washington, DC, responsible for reviewing claims on a de novo basis. Under current

law, a veteran may file a motion for reconsideration at the BVA at

any time after the decision has been made. If the Chairman of the

BVA grants a motion for reconsideration, the matter is referred to

an enlarged panel for a final decision. Reconsideration of the claim

is conducted under the law as it existed at the time of the initial

decision, and if an allowance on the basis of obvious error is ordered, the veteran receives the benefit retroactive to the date of the

initial claim. If the request for reconsideration is denied, the veteran has no right of appeal.

During fiscal years 1991 through 1996, approximately 4,400 motions for reconsideration were filed, and more than 900 (21 percent)

of these motions were granted. A panel of at least three Board

members rendered a new decision. Of the new decisions 75 percent

were allowances or remands. As of February 28, 1997, there were

53,434 appeals pending at the BVA and the average BVA response

time was 513 days.

‘‘Since at least 1928, the VA and its predecessors have provided

for the revision of decisions which were the product of ‘clear and

unmistakable error’. (citations omitted) The appropriateness of

such a provision is manifest.’’ Russell v. Principi, 3 Vet. App. 310,

313 (1992) (en banc). Congress has provided the Board of Veterans

Appeals (but not the regional office or agency of original jurisdic-
3

tion) authority to correct obvious errors. 38 U.S.C. § 7103(c). In arguments before the Court of Veterans Appeals and testimony before this Committee, the VA has stated that there is no substantive

difference between the Board’s authority to correct ‘‘obvious error’’

and the agency of original jurisdiction’s authority to correct clear

and unmistakable error. ‘‘The only real difference is that clear and

unmistakable error review can be invoked as of right, whereas review for obvious error is committed to the sound discretion of the

Board.’’ Smith, 1526.

It must always be remembered that clear and unmistakable error is a very specific and rare kind of ‘‘error’’. It is

the kind of error, of fact or of law, that when called to the

attention of later reviewers compels the conclusion, to

which reasonable minds could not differ, that the result

would have been manifestly different but for the error.

Thus even where the premise of error is accepted, if it is

not absolutely clear that a different result would have ensued, the error complained of cannot be, ipso facto, clear

and unmistakable. Russell v. Principi, 3 Vet. App. 310, 313

(1992) (en banc).

Fugo v. Brown, 6 Vet. App. 40, 44 (1993). As the court further stated in Fugo, clear and unmistakable error is a form of collateral attack on an otherwise final decision, and there is a very strong presumption of validity that attaches to such decisions.

As noted above, this legislation would allow a claimant to raise

a claim of clear and unmistakable error with regard to a Board decision. However, it does not follow that by merely averring that

such error has occurred, a veteran can successfully attack an otherwise final decision. At least in cases brought before the Court of

Veterans Appeals,

while the magic incantation ‘‘clear and unmistakable

error’’ need not be recited in haec verba, to recite it does

not suffice, in and of itself, to reasonably raise the issue

. . . [S]imply to claim clear and unmistakable error on the

basis that previous adjudications had improperly weighed

and evaluated the evidence can never rise to the stringent

definition of clear and unmistakable error . . . Similarly,

neither can broad-brush allegations of ‘‘failure to follow the

regulations’’ or ‘‘failure to give due process,’’ or any other

general, non-specific claim of ‘‘error’’.

Fugo v. Brown, 43–44. Given the Court’s clear guidance on this

issue, it would seem that the Board could adopt procedural rules

consistent with this guidance to make consideration of appeals raising clear and unmistakable error less burdensome.

Finally, the Committee notes that an appellate system which

does not allow a claimant to argue that a clear and unmistakable

error has occurred in a prior decision would be unique. This bill addresses errors similar to the kinds which are grounds for reopening

Social Security claims. Under the Social Security system, a claim

may be reopened at any time to correct an error which appears on

the face of the evidence used when making the prior decision. That

is certainly the intent of the original VA regulation allowing correc-
4

tion of such decisions, no matter when the error occurred or which

part of the VA made the error. Given the pro-claimant bias intended by Congress throughout the VA system, the Committee concludes that this legislation is necessary and desirable to ensure a

just result in cases where such error has occurred. The Committee

directs the BVA to monitor the effect of this legislation and to include the data in its annual report.

STATEMENT OF ADMINISTRATION’S VIEWS

The Committee has not requested the Administration’s comment

on this bill. However, H.R. 1090 is identical to H.R. 1483 passed

by the House during the 104th Congress. In testimony before the

Committee on October 12, 1995, the Administration opposed H.R.

1483 on the grounds that authorizing appeals on the grounds of

clear and unmistakable error would add to the claims backlog at

the Board. The Committee requested the Board to provide data to

support its position, but the Board indicated it could not provide

such data.

SECTION-BY-SECTION ANALYSIS

Section 1(a) would amend chapter 51 of title 38, United States

Code, to codify existing regulations which make decisions made by

the Secretary at a regional office subject to revision on the grounds

of clear and unmistakable error.

Section 1(b) would amend chapter 71 of title 38, United States

Code, to make decisions made by the Board of Veterans’ Appeals

subject to revision on the grounds of clear and unmistakable error.

Section 1(c) would make the provisions of this bill applicable to

any determination made before, on, or after the date of the enactment of this Act.

OVERSIGHT FINDINGS

No oversight findings have been submitted to the Committee by

the Committee on Government Reform and Oversight.

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

The following letter was received from the Congressional Budget

Office concerning the cost of the reported bill:

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, April 10, 1997.

Hon. BOB STUMP,

Chairman, Committee on Veterans’ Affairs,

House of Representatives, Washington, DC.

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 1090, a bill to amend title

38, United States Code, to allow revision of veterans benefits decisions based on clear and unmistakable error.
5

If you wish further details on this estimate, we will be pleased

to provide them. The CBO staff contact is Mary Helen Petrus, who

can be reached at 226–2840.

Sincerely,

JUNE E. O’NEILL, Director

Enclosure

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

H.R. 1090—A bill to amend title 38, United States Code, to

allow revision of veterans benefits decsions based on clear

and unmistakable error.

As ordered reported by the House Committee on Veterans’ Affairs on

March 20, 1997

CBO estimates that H.R. 1090 would raise administrative costs

over the first two or three years after enactment by $1 million to

$2 million in total, but in the longer run administrative costs would

rise by less than $500,000 a year. In addition, CBO estimates that

the bill would have a direct spending impact of less than $500,000

a year through 2002. Because the bill would raise direct spending,

it would be subject to pay-as-you-go procedures. H.R. 1090 contains

no intergovernmental or private-sector mandates as defined in the

Unfunded Mandates Reform Act of 1995 and would not affect the

budgets of state, local, or tribal governments.

Section 1(a) would have no budgetary impact because it would

codify the current procedure for revising veterans’ claims decisions

made by regional offces. Other sections of the bill would give certain veterans new rights and opportunities for appeal. Under current law, a veteran may appeal a regional offce’s decision to the

Board of Veterans Appeals (BVA). Once the BVA has rendered a

decision, a veteran may appeal directly to the Court of Veterans

Appeals (COVA) or move for reconsideration of the Board’s decision

on the basis of ‘‘obvious error.’’ The Chairman of BVA reviews the

motion and at his discretion may allow it, thus referring the matter

to a panel of members for reconsideration. Section 1(b) would require BVA to review decisions challenged on the basis of ‘‘clear and

unmistakable error.’’ Section 1(c) would make sections 1(a) and 1(b)

retroactive and would allow veterans to appeal BVA decisions involving claims of clear and unmistakable error to COVA and other

higher courts regardless of a current restriction limiting consideration to cases in which administrative appeals were initiated on or

after November 18, 1988.

To obtain revision of a BVA decision under the bill, the claimant

must assert ‘‘clear and unmistakable error,’’ which is an error of

law or fact in the record at the initial decision that compels the

conclusion that the decision would have been different but for the

error. The ‘‘clear and unmistakable error’’ standard is roughly the

same as the current standard of ‘‘obvious error.’’ The standard of

review, therefore, is not the key change that the bill would make

in the procedure. Rather, the bill would eliminate the Chairman’s
6

discretion in reconsideration and make the review of a BVA decision a matter of right.

The administrative costs of the bill would have two parts--a continuing increase in costs associated with the annual caseload under

current law and a larger initial increase that would stem from

retroactively extending the right to review. CBO assumes that the

longer run increase in caseload resulting from this bill would be a

portion of the requests for reconsideration under current law that

are denied. From 1991 to 1995, BVA denied reconsideration for

about 500 motions a year, including motions that might have been

based on clear and unmistakable error. Data from the Department

of Veterans Affairs indicate that the average cost per case is about

$1,000. Because the marginal cost of each new case would be less

than $1,000 and BVA would have to review fewer than 500 new

motions a year, the long-run costs of administration would be less

than $500,000 annually.

The number of veterans who would demand review of past cases

based on clear and unmistakable error is the key uncertainty in estimating the costs of the bill. Whether or not the case involved such

error, the demand would still add to BVA’s workload and costs because it would at least have to screen the demands and document

its conclusions. Nevertheless, the current process for adjudicating

veterans claims allows many opportunities for appeal, and it is

probable that most veterans having claims pursue them under current law. CBO estimates that up to 2,000 veterans would return to

BVA for reconsideration under the bill and add about $1 million to

$2 million to BVA’s administrative costs, currently about $38 million annually, during the first three years after enactment.

By their nature, claims of clear and unmistakable error, if sustained, are very likely to lead to additional benefits to the claimant.

The bill would raise direct spending to the extent that the cases

involved such benefits as disability compensation, pension benefits,

or survivor benefits. Although the extra administrative costs of the

bill would not cumulate from year to year, the additional benefits

would be paid for the life of the veteran or surviving beneficiary.

How much direct spending would rise depends on the caseload and

average award in benefits, both of which are very uncertain. Because veterans have many opportunities under current law to appeal claims decisions, CBO estimates that a small number of additional cases would be successfully appealed under the bill. Also, it

is unlikely that the average annual benefit involved in such a case

would be more than $1,000 to $2,000. Thus, the bill would probably

increase direct spending by less than $500,000 a year in 1998 and

the next several years.

The CBO staff contact for this estimate is Mary Helen Petrus,

who can be reached at 226–2840. This estimate was approved by

Robert A. Sunshine, Deputy Assistant Director for Budget Analysis.

INFLATIONARY IMPACT STATEMENT

The enactment of the reported bill would have no inflationary

impact.
7

APPLICABILITY TO LEGISLATIVE BRANCH

The reported bill would not be applicable to the legislative

branch under the Congressional Accountability Act, Public Law

104–1, because the bill would only affect certain Department of

Veterans Affairs benefits recipients.

STATEMENT OF FEDERAL MANDATES

The reported bill would not establish a federal mandate under

the Unfunded Mandates Reform Act, Public Law 104–4.

STATEMENT OF CONSTITUTIONAL AUTHORITY

Pursuant to Article I, section 8 of the U.S. Constitution, the reported bill would be authorized by Congress’ power ‘‘{T}o provide

for the common Defence and general Welfare of the Untied States.’’

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3 of rule XIII of the Rules of the House

of Representatives, changes in existing law made by the bill, as reported, are shown as follows (new matter is printed in italics, existing law in which no change is proposed is shown in roman):

TITLE 38, UNITED STATES CODE

* * * * * * *

PART IV—GENERAL ADMINISTRATIVE

PROVISIONS

* * * * * * *

CHAPTER 51—CLAIMS, EFFECTIVE DATES, AND

PAYMENTS

SUBCHAPTER I—CLAIMS

Sec.

5101. Claims and forms.

5102. Application forms furnished upon request.

* * * * * * *

5109A. Revision of decisions on grounds of clear and unmistakable error.

* * * * * * *

SUBCHAPTER I—CLAIMS

* * * * * * *

§ 5109A. Revision of decisions on grounds of clear and unmistakable error

(a) A decision by the Secretary under this chapter is subject to revision on the grounds of clear and unmistakable error. If evidence

establishes the error, the prior decision shall be reversed or revised.

(b) For the purposes of authorizing benefits, a rating or other adjudicative decision that constitutes a reversal or revision of a prior
8

decision on the grounds of clear and unmistakable error has the

same effect as if the decision had been made on the date of the prior

decision.

(c) Review to determine whether clear and unmistakable error exists in a case may be instituted by the Secretary on the Secretary’s

own motion or upon request of the claimant.

(d) A request for revision of a decision of the Secretary based on

clear and unmistakable error may be made at any time after that

decision is made.

(e) Such a request shall be submitted to the Secretary and shall

be decided in the same manner as any other claim.

* * * * * * *

PART V—BOARDS, ADMINISTRATIONS, AND

SERVICES

CHAPTER 71—BOARD OF VETERANS’ APPEALS

Sec.

7101. Composition of Board of Veterans’ Appeals.

7101A. Members of Board: appointment; pay; performance review.

* * * * * * *

7111. Revision of decisions on grounds of clear and unmistakable error.

* * * * * * *

§ 7111. Revision of decisions on grounds of clear and unmistakable error

(a) A decision by the Board is subject to revision on the grounds

of clear and unmistakable error. If evidence establishes the error,

the prior decision shall be reversed or revised.

(b) For the purposes of authorizing benefits, a rating or other adjudicative decision of the Board that constitutes a reversal or revision of a prior decision of the Board on the grounds of clear and

unmistakable error has the same effect as if the decision had been

made on the date of the prior decision.

(c) Review to determine whether clear and unmistakable error exists in a case may be instituted by the Board on the Board’s own

motion or upon request of the claimant.

(d) A request for revision of a decision of the Board based on clear

and unmistakable error may be made at any time after that decision is made.

(e) Such a request shall be submitted directly to the Board and

shall be decided by the Board on the merits, without referral to any

adjudicative or hearing official acting on behalf of the Secretary.

(f) A claim filed with the Secretary that requests reversal or revision of a previous Board decision due to clear and unmistakable

error shall be considered to be a request to the Board under this section, and the Secretary shall promptly transmit any such request to

the Board for its consideration under this section.

* * * * * * *

Æ