UNITED STATES COURT OF APPEALS FOR VETER ANS CLAIM S

No. 17

- 3766

R OCCO V. P ERCIAVALLE , A PPELLANT ,

V

.
R OBERT L. W ILKIE , S ECRETARY OF V ETERANS A FFAIRS , A PPELLEE

.
On Appeal from the Board of Veterans ' Appeals
( Argued February 12, 2019 Decided September 2 7 , 2019 )
Kenneth H. Dojaquez , of Columbia, South Carolina, for the appellant.

Shereen M. Marcus , with whom James M. Byrne , General Counsel; Mary Ann Flynn
, Chief Counsel; and Christopher W. Wallace
, Deputy Chief Counsel, were on the brief, all of Washington, D.C., for the a ppellee.

Before BARTLEY , GREENBERG , and TOTH , Judges

. TOTH , Judge : Clear and unmistakable error (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 in terpretation of the statute or regulation." 38 C.F.R. § 20.1403(e) (201 9 ). Army veter an Rocco Perciavalle's CUE motion was denied after the B oard determined that the allegation of error was based on a changed interpretation of regulation. Finding that § 20 .1403(e) foreclosed his challenge, the Board discussed the issue no further. T his case examines whether our holding in Esteban v. Brown , 6 Vet.App. 259 (1994), along with a VA General Counsel opinion pertaining to the appropriate use of separate ratings for certain conditions a t issue here, effected a change in interpretation of law within the meaning of § 20.1403(e). Because a changed interpretation necessarily requires the existence of an antecedent interpretation from which a later
in terpretation departs , and because no prior interpretation ex isted, we hold that Esteban and the VA opinion did not amount to a change in interpretation.2 I. BACKGROUND
A. Separate Ratings "Ordinarily, separately diagnosed injuries are rated individually ." Amberman v. Shinseki
, 570 F.3d 1377, 1380 (Fed. Cir. 2009). There are instances, though, where "the medical evidence is such that reasonable arguments may be made for rating the disability under two or more possible diagnostic codes." Brady v. Brown , 4 Vet.App. 203, 206 (1993). In these situations, the Board must "weigh the evidence and make an informed choice as to which diagnostic code provides the most appropriate method for rating the veteran's disability." Id . "Recognizing the difficulti es inherent in such circumstances," id
., VA issued regulations that "caution against making multiple awards for the same physical impairment simply because that impairment could be labeled in different ways,"
Amberman , 570 F.3d at 1380. In short, awarding compensation for the same impairment under various diagnos tic codes is known as "pyramiding
, " and under VA regulations, this practice "is to be avoided." 38 C.F.R. § 4.14 (201 9 ).
In Esteban
, this Court recognized that separate ratings were permissible f or different diagnoses of the same disability as long as the conditions diagnosed shared no symptomology.
6 Vet.App. at 262. VA assigned the veteran in that case a single 10% rating for facial scars from
an accident in service. Id

. at 259

– 60. When he late r brought an increased rating claim, the Board conceded that he could satisfy the minimum rating criteria for any of three diagnostic codes because his injury resulted in different functional problems: disfigurement, painful scars, and muscle damage. Id . a t 260. Yet the Board determined that he could only be rated und er one of the diagnostic codes. Id

. Esteban reversed the Board's decision because none of the relevant diagnostic codes provided that he could not be rated separately for the other conditions, and his conditions were "to be rated separately unless they constituted the 'same disability' or the 'same manifestation' under 38 C.F.R. § 4.14." Id . The " critical element," we held , was that none of the symptomatology for any one of the conditions was duplicative of or overlapping with the symptomatology of the other

two. Id . at 262. Three years later, in 19 97, VA 's General Counsel issued a guidance opinion interpreting the ratings schedule as allowing separate ratings for the con ditions at issue here

— arthritis and instability in the same knee. VA G en

. C oun . Prec. 23

- 97 (July 1 , 1997)

. The narrow question at
issue was whether 38 C.F.R. § 4.71a authorized multiple ratings under diagnostic codes (DC)3

5003

- 5260 (limitation of motion due to arthritis) and 5257 (instability of the knee)

. The agency
determined that
, s ince " the plain terms of DC 5257 and 5003 suggest that those codes apply either to different disabilities or to different manifestations of the same disability, the evaluation of knee dysfunction under both codes would not amount to pyramiding under section 4.14." Id

. VA recognized that it was the first time the agency assumed an official position on the matter, as the opinion acknowledged that it was aware "of no formal position taken by the Veterans Benefits
Administration on this issue" before then. I d

. B. Facts Mr. Perciavalle served in the Army fro m 1962 to 1964 and underwent surgery during that period to treat his injured left knee. VA awarded service connection in 1966 for residuals of the injury and assigned a 10 % rating under DC 5259, which , then as now, compensates veterans for
removal of carti lage from the knee. See 38 C.F.R. § 4.71a, DC 5259 ( 201 9 ). In 1971, he filed a claim for an increased rating; VA reexamined him that year but denied his request . He did not appeal. In 2015, Mr. Perciavalle filed a motion to revise the 1971 decision. Final decisions may be revised if they contain CUE. Simon v. Wilkie , 30 Vet.App. 403, 407 (2018). CUE, in turn, is established if "the correct facts, as they were known at the time, were not before VA, or the statutory and regulatory provisions extant at the ti me were incorrectly applied." Id. Additionally, the alleged error must be "undebatable, rather than a mere disagreement with how the facts were weighed," and it must have "manifestly changed the outcome of the decision." Id . (quotes omitted).
Mr. Perciaval le grounded his CUE motion on the contention that he should have been rated under DC 5257 for slight instability of the knee and separately under DC 5003

- 5260 for limitation of motion of flexion and discomfort (pain) secondary to arthritis. He alleged that an x

- ray report obtained during a 1971 VA examination clearly indicated arthritis in his left knee that decreased his range of motion. R. at 102. He also claimed that the evidence in 1971 showed that he had slight instability in the knee, and so, while a rating based solely on residuals of the surgery may have been appropriate in 1966, the Board was obligated to rate him separately for slight instability and
limitation of motion based on the evidence of record in 1971.
VA denied his CUE motion , stating th at, in 1971, a policy "allowing us to assign separate evaluations for instability was not in effect at that period of time." R. at 94. Mr. Perciavalle appealed to the Board, maintaining his CUE theory and arguing that the plain language of the4

regulations has always allowed for separate ratings for instability and limitation of motion.
R. at 13

– 14.
C . Board Decision In a September 2017 decision, t he Board found Mr. Perciavalle's a rgument foreclosed by § 20. 1403(e) and denied his CUE motion as a matter of la w. 1 The Board cen tered its analysis on § 4.14, the anti

- pyramiding regulation prohibiting the evaluation of the same disability or manifesta tion under different diagnos tic codes

. It found that not until this Court's holding in
Esteban was § 4.14 interprete d to permit separate r atings for distinct, non

- overlapping symptomatology of the same underlying injury. It further found that VA did not issue its General Counsel opinion permitting separate rating s for arthritis and instability until 1997.
The Board did not discuss the language of the relevant diagnostic codes as they stood in 1971. It merely said that the veteran had not offered "any evidence that, in July 1971, VA interpreted the rating schedule to allow for separate ratings for limitation of motion an d instability
of the same knee." R. at 5. The Board concluded that Esteban and the General Counsel opinion constituted a changed interpretation of VA regulations. And
, because a changed interpretation of an existing regulation cannot constitute CUE and tha t was the only basis on which Mr. Perciavalle sought revision of the 1971 decision, the Board denied his motion as a matter of law.

II. ANALYSIS In reviewing Board decisions evaluating allegations of CUE in prior final decisions, the
Court "cannot conduct a plenary review of the merits of the original decision." Simon , 30 Vet.App. at 408 (quote s omitted). Instead, review of a Board decision finding no CUE is limited to determining whether that finding was "arbitrary, capricious, an abuse of discretion, or otherwise

1 The Court notes that the regulation cited by the Board, 38 C.F.R. § 20.1403(e), governs in cases where the Board is reviewing a prior Board decision for CUE. Where the Board (or VA) reviews a prior VA decision for CUE, the appropriate regulation is 38 C.F.R. § 3.105(a). That is the case here. However, § 20.1403 was promulgated after § 3.105(a) and reflects congressional intent to codify the body of law that had developed over many years interpretin g th e more general provisions of § 3.105(a). See Disabled American Veterans v. Gober , 234 F.3d 682, 698

– 99 (Fed. Cir. 2000) (discussing the unique history of the regulations governing CUE). Accordingly, § 20.1403 provided more specific guidance as to the evaluation of CUE and
, for that reason, the two regulations have often been used interchangeably

— even by this Court. See, e.g. , Lamb v. Peake , 22 Vet.App. 227, 235 (2008). As of February 19, 2019, however, § 3.105(a) was amended to reflect the same langua ge found in § 20.1403, including the specific provision at issue here, § 20.1403(e). See 84 Fed. Reg. 138, 167

– 68 (Feb. 19, 2019); 38 C .F.R. § 3.105(a)(1)(iv) (2019). Neither party ha s suggested that §§ 3.105 and 20.1403(e) have been or should be interpret ed differently or that § 3 .105(a)'s modification impact s our anal ysis today. Accordingly, we cite to § 20.1403(e).5

not in accordance with law," 38 U.S.C. § 7261(a)(3)(A), and whether it was supported by adequate

reas ons and bases on all ma terial issues of fact and law
, 38 U.S.C. § 7104(d)(1). A. Change in Interpretation On its face, the question of whether there has been a change in interpretation with respect to VA's regulat ions appears to be a mixed question of fact and law. Normally, in such cases, the
Board's "determination of disputed facts or the application of established law to the facts of a particular case without creating precedent are issues of material fact subject to review by the Court

. . . under the cl early erroneous standard. " Lennox v. Principi , 353 F.3d 941, 945 (Fed. Cir. 2003). However, where, as here, there is no "established law" in the form of statute, regulation, or precedential court decision determining what constitutes a change in interpreta tion, the Board's factual ruling involves the application of a novel legal question. In such cases, the "relevant legal principle" is "given meaning through its application to the particular circumstances of the case" and the clearly erroneous standard doe s not apply. Id

. Here, t he factual findings in dispute

— w hether a prior interpretation existed and whether there was a change in interpretation of VA's regulation, are determinations that the Board could only make by addressing legal questions in the first instance
, rather than merely applying "established law" to disputed facts. We thus review the Board's findings de novo. Neither federal statute nor VA regulations define what constitutes a "change in the interpretation" of a statute or regulation. With no express statutory or regulatory guidance, we employ the basic practice of textual construction whereby words assume "the ir ordinary, contemporary, common meaning," which may be derived from general use dictionaries

. Sandifer v. U.S. Steel Corp. , 571 U.S. 220, 227 (2014). In its basic definition, "change" means "to make different in some particular; alter; transform; to giv e a different position, course, or direction to; to replace with another; to make a shift from one to another; switch

. . . . " M ERRIAM

- W EBSTER ' S C OLLEGIATE D ICTIONARY 206 (11th ed. 2014). Another dictionary provides an even simpler formulation, defining " change" as: "make or become different" and presents an example of the term used with a direct object: " a proposal to change the law

. " N EW O XFORD A MERICAN D ICTIONARY 289 (3d ed. 2010) (emphasis in original)

. In plain terms, then, a "change in the interpret ation" necessarily requires the existence of a prior interpretation that is changed in some fashion

— whether modified, further developed, or replaced in whole. As a matter of plain language, a changed interpretation cannot be the "first6

commentary" on a reg ulation or statute as there exists no precursor interpretation that the latter modifies, alters, or replaces. See Jordan v. Nicholson , 401 F.3d 1296, 1298 (Fed. Cir. 2005) (noting
that VA's regulation interpret ing 38 U.S.C. § 1111 constituted its "initial interpretation" of that statute). And
, although it can be argued that an initial interpretation constitutes a change from having no formal definition at all, this is not the same as a change in the substance of a preexisting interpretation

. VA's General Counsel opinion readily acknowledged that it was the first occasion where the agency interpreted the rating schedule to allow for separate ratings for limitation of motion and instability of the same knee. To that end, the opinion noted that: "We know of no formal position taken by the Veterans Benefits Administration on this issue." R. at 55 . This point is dispositive: there can be no "change" in interpretation absent an existing interpretation from which a later interpretation deviates . In glossing over this admission, the Board erred in finding that the General
Counsel opinion constituted a change in interpretation when the opinion itself acknowledged that no antecedent interpretation existed. Likewise, our holding in Esteban cannot b e deemed a change in interpretation. On its own
terms, Esteban did not purport to introduce a definitive interpretation of § 4.14 but merely held that the Board's reading of the regulation was too broad in that case
, as rating the veteran's
condition under separate diagnostic codes did not constitute pyramiding under the plain language of the regulation. Esteban did not cite to any formal interpretation on VA's part that it repudiated but, citing to the factual findings in that case, merely noted earlier ca ses from this Court that read the regulation the same way when applied to similar facts. Esteban , 6 Vet.App. at 261 (discussing Fanning v. Brown , 4 Vet.App. 225 (1993)). In short, Esteban neither proposed an interpretation of a regulation nor cited any exi sting interpretation. Additionally, Esteban presents a marked contrast to our ruling in Lamb v. Peake
, 22 Vet.App. 227 , 234

– 36 (2008), where the Court suggested that an intervening court decision
constitutes a change in the law that foreclose s a CUE motio n

. In Lamb , the veteran's CUE motion rested upon this Court's holding in Hyson v. Brown , 5 Vet.App. 262 , 265 (1997) , which imposed a duty on VA under 38 C.F.R. § 3.655 to show that the veteran lacked good cause to miss a medical appointment. The regulation itself did not expressly impose such a burden on VA and so the Court's holding was deemed a change in interpretation of that regula tion insofar as it imported an adjudicatory factor into the regulation that did not derive from the plain lang uage. The Court7

rejected Mr. Lamb's argument in that case because the rule expressed in Hyson didn't reflect "the law as it was understood at the time of the decision" being challenged. Lamb , 22 Vet.App. at 234

- 35. By contrast, Esteban did not introduce a new burden of proof or impose a new factor into how a regulation should be applied

— it merely ruled that the Board erred by reading § 4.14 as mandating an outcome that did not derive from the plain language of the regulation. B. Prejudicial Error and CUE
T he Board erred when it concluded that § 20.1403(e) foreclosed Mr. Perciavalle's motion as a matter of law. Merely finding an error, however, is not enough for him to prevail. The Court is required by statute to consider whether this error prejudiced him. 3 8 U.S.C. § 7261(b)(2);
Simmons v. Wilkie , 30 Vet.App. 267, 277 (2018). The veteran generally carries the burden of demonstrating such prejudice. Id . at 280. In determining whether a claimant has shown prejudicial error, the Court assesses whether
the erro r disrupted the essential fairness of the adjudication, either by preventing effective participation in the adjudicative process (procedural prejudice) or by affecting the outcome of the
determination (substantive prejudice)

. Id

. at 279

. Th is inquiry is case

- specific and based on
examination of the individual record rather than rigid rules or presumptions , although the C ourt

can make non

- binding generalizations about the types of errors that typically prove harmful to
claimant s and may conside r the "natural effects" of such error within the specific factual
circums tances in which the error arose. Shinseki v. Sanders , 556 U.S. 396, 411

- 12 (2009) ; Simmons , 30 Vet.App. at 280

. In Simmons , the Court noted a nonexhaustive list of errors that affect the essential fairness of the adjudicative process, as they deprive claimant s of a meaningful opportunity to participate in the adjudication of their claims. See id. at 281

- 82 (compiling cases). Specifically, the Court noted that VA's failure to provide notice of the evidence necessary to substantiate a claim, see Vazquez

Flores v. Shinseki , 24 Vet.App. 94, 105

- 07 (2010); Overton v. Nicholson , 20 Vet.App. 427, 435 (2006), and failure to provide a required hearing, see Arneson v. Shinseki , 24 Vet.App. 379, 388

- 89 (2011), had the natural effect of depriving claimant s of meaningful participation in the VA adjudicatory process. See Simmons , 30 Vet.App. at 282. The Court found these errors prejudicial
b ecause they prevent claimant s from availing themselves of their opportunity to be heard during the adjudicative process. Id . at 281

- 83.8

W e use this nonexhaustive list to guide our case

- speci fic prejudicial error analysis here and
conclude that the Board's error with respect to his CUE motion prejudic ed Mr. Perciavalle. T he
Board wrongly foreclosed Mr. Perciavalle's CUE motion because it determined that § 20 .1403(e), as a matter of law, precluded an assertion of error based on a change of law . As a result, the Board
did not consider the merits underlying his motion, but instead concluded that Mr. Perciavalle was legally barred from making such an allegation of error because, by definition, his allegation could

not be CUE

. However, as we explai ned above, the Board erred in categorically disregarding the
motion

— Mr. P erciavalle's CUE motion was not , contrary to the Board's conclusion, based on a change of law

. The Court finds the Board's error prejudicial in this case because the Board wrongly

ca tegorize d his motion as precluded by law, thus preventing him from receiving a meaningful opportunity to participate in the adjudicative process. See Simmons , 30 Vet.App. at 28 5 ( stating
that the Court's case

- specific analysis "must be guided by whether es sential fairness was disrupted by the error, usually demonstrated by determining whether the error affected the Board's ultimate
decision or prevented the claimant for effectively participating in the process ") (emphasis added). For this reason, remand is the appropriate course for the Board to properly adjudicate the CUE
motion. See Tucker v. West , 11 Vet.App. 369, 374 (1998) ( holding that remand is the appropriate remedy "where the Board has incorrectly applied the law "); see also Arneson , 24 Vet.App. at 389 (remanding appeal when the Board error deprived the veteran of meaningful participation in the processing of his claim).

III. CONCLUSION
We REVERSE the Board's determination that Mr. Perciavalle's CUE motion was prohibited as a matte r of law because it depended on a changed interpretation of law. The September 18, 2017, Board decision is VACATED and the matter REMANDED for further consideration consistent with this opinion.