UN ITED STA TES C OU RT OF AP P EA LS F OR VE TER AN S CL AI M S

N O . 01-0795
W A LTER Y. S O RAKU BO , A PP EL L ANT ,

V
. ANTHONY J. P RI NCI PI , S EC RE T A RY O F V ET ER A N S A FF A I RS , A PPEL L EE
.

On Ap pe a l f ro m th e B oa

rd of Ve te ra ns ' Ap pe a ls
(De cided Ma

y 17, 2002 )

Ste ph e n L. Pu rc e ll , o f D isa

ble s A me ri c an V e te ra

ns , w a s o n th e br ie f f

or the a pp e lla nt.
Tim S. Mc Cla in , G e ne ra l Co un se l; R. Ra nd all Cam pb e ll , Ac tin g As sis tant G e ne ra l Co un se l; Mi c ha e l A . Le on ar

d , Deputy Assistant Gener al Counsel; and Glenn R. Be rgmann wer e on the br ief for the a ppellee.
Be fore FARL EY, HOL DAWAY, and IVERS, Judges

. HOL DAWAY, Judge : The appe llant, Walter Y. S o ra kubo, appea ls from a F ebrua ry 13, 2001, decision of the Board of Veter ans' Appea ls (Boa rd) that f ound that a Mar ch 15, 1977, B oard de c isi on tha t de c lin e d to re ins tate a c omp e ns a ble ra tin g fo r h is s e rv ic e -c onne c te d s te rn um d isa bil ity was not the produc t of clea r and unmistakable err or (CUE) . This appea l is ti mely , and the Court has jurisdiction pu rsuant to 38 U.S .C. §§ 7252(a) a nd 7266(a) . For

the re asons that follow, the Court will rever se and r emand the de cision of the B oard.

I. BACKG ROUND The a ppellant s er ved in the U.S. Army from Mar ch 1951 to Dec ember 1952, and fr om Au gu s t 1 9 5 5 t o Au gu s t 1 9 5 8

. M ed i ca l re co rd s re fl ec t t h at i n J u n e 19 5 7 , d u ri n g t h e ap p e l l a n t 's

se c on d pe ri od of se rv ic e , the a pp e lla nt su sta ine d a ste rn

um fr a c tur e wh e n a ra da

r tow e r fe ll o n h im. The a ppellant was diag nosed with a simple f rac ture located betwee n the body of the sternum and the2

s t e r nu m m anu

b r i u m
. A n x - r ay e x a m i n a t i o n , a dm i n i s t e r e d d u r i n g t h e a

p p e l l an t ' s i n i t i a l h o s p i t a l s t ay, ind ic a te d a

sli g ht d e fo rm ity

a t th e jun c tio n o f t

he manu br ium and the bo dy of the ste rn

um. I n July 19 57 , the a

pp e lla nt wa s dis c ha

rg e d fr om the ho sp ita l, to lig ht du ty

. A m e dic a l e xami natio n in July 1958 found no evide nce of the pre viously

repor ted fra cture

. VA examination docume nts r eport that in Dece mber 1958, the a ppellant beg an complaining of che st pain and pain in his lower ba ck. Upon e x amination of the c hest, the examiner noted a bony ridg e, approx imately 3 inches long horizontally , and 11⁄2 inche s wide ver tically . The e x aminer note d that the ridge appare ntly repr esente d a " heale d simple frac ture." Record ( R.) at 137. A De cembe r 19 58 VAratin g d eci si on

awa rd e d s e rv ic e c onne c tio n a nd a 10 % r a tin g fo r s y

mpt omatic re sid

ua ls of fr actur e of the sternum. Seventee n y ear s later, in De cember 1, 1975, the a ppellant under

went a V A medica l examination, where the appellant c omplained t hat hi s chest bone was sore . The e x amination repor t

no te d th a t a sid e fr om t

he a pp e lla nt' s com pla int s of pa in in the ste rn um o n a bd uc tio n o f t he sh ou lde rs , no a dv e rs e c lin ic a l f

ind ing s w e re e vid e nt. Th e re po rt a lso no te d that an x-r ay re ve a le d a n o ld, po sttraumatic de formity

at the leve l of the sternozy p h oid articulatingare a. R. at 151. The pe rtinent dia g no sis wa s f

ra c tur e of the ste rn um. A J anuar y 1976 rating decision found that a compensa

ble level of disability was not shown,

a nd r e d u c e d t h e a

p p e l l an t ' s r a t i n g f

o r r e s i d u a l s o f f r a c tu r e o f t h e s t e r

nu m , f r om 1 0% to

no nc omp e ns a

ble . T he a

pp e lla nt f ile d a No tic e of Di sa g re e me nt (

NO D) in wh ic h he state d that hi s ste rn um wa s se ns iti ve to t ou c h. Th e VAre g ion a l of fi c e (V AR O) iss ue d a

State me nt o f t

he Ca se (SOC) that indicated that the J anuar y 1976 ratingdecision wa s based on a revie w of a ll the evidence of re cord at the time, including the most rece n t VA ex am i n ation, that of De cembe r 1975. The VARO fur

ther e x plained that the r atin g s chedule did not provide a c ompensable e valuation for fra cture of the ster

num where the sy

mptomatology was of a mi nimal deg ree , citing 38 C.F .R. 4.31; Diag nostic Code (DC) 5299. A VA or thopedic examination was administere d in J uly 1976. During the ex amination, the appellant c omplained of pa in in his breast b o n e. No adverse clinica l finding w ith respec t to the sternum was note d. The e x aminer dia g nosed a he aled f rac ture of the sternum.3

I n Marc h 1977, the Board issued a decision that revie wed the J anuar y 1976 VARO rating de c isi on . T he B oa

rd c ha ra c te r i zed the iss ue re lativ e to t

he ste rn um d isa bil ity a s " that of

c omp e ns a

ble ratingfor r esiduals of fr actur e of the sternum." In its decisio n the B oard note d that the medica l

e vid e nc e ind ic a te d th a t th e a pp e lla nt' s d isa bil ity wa s e ssenti all y stat ic , ma nif e ste d b y so me ir re g ula ri ty of the surf a c e of the ste rn um. Th e B oa

rd a lso no te d that the ob

je c tiv e fi nd ing s f

a ile d to show a sig nificant disability that would war

rant a compensa

ble rating

. The appellant did not appeal the B oard de cision and it beca me final. I n October

2000, 23 y ear s later, the a ppellant soug ht revision of the Bo ard's Ma rch 1977 decision on the ba sis of CUE. The issue c ame be fore the B oard on F ebrua ry 13, 2001. I n its decision the Boa rd dete rmined that the Marc h 1977 Boa

rd decision was not the product of CUE. The B oard note d that althoug h the

rec ord showed that the appellant' s rating had bee n reduc ed and that the Boa rd d id not address 38 C.F .R. § 3 .3 44 (1 97 7) in i ts d e c isi on , a re vie w of the re c or d sho we d that the re g ulatio n did n ot a pp ly to the fac ts of the ca se.

II. AN AL YSI S I n this case, the r ecor d shows that the medica l evidence relied on by the Boa rd on Marc h 15, 1977, only

indicated minimal sy

mptomatology , much like the VA e x amination relied on by the VARO in Dec ember

1958. I n making its conclusion, however , th e Boa rd in Fe bruar

y 2001 de te rm ine d th a t the me dic a l e vid e nc e re lie d on by the B oa rd on Ma rc h 15 , 19 77 , wa s ins uf

fi c ie nt t o
su pp or t a c omp e ns a

ble ratin g . I n e sse nc e , w hat th e B oa rd se e ms t o h a ve c on c lud e d, wi tho ut e xac tly saying so, is that the or igina l 1958 rating that g ave a compensa

b l e award w as in err or. Howe ver, pursuant to 38 C.F.R. § 3.105(a) (2001), that rating cannot be cha ng ed without a finding that there

was e vidence of CUE; no such dete rmination was made here

. "Pre vious [ Boa

rd] deter minations which are final and bindi ng . . . will be acc epted a s corr ect in the absenc e of [CUE]." 38 C.F.R. § 3.105(a) . "[CUE] is a ver y specific and rar e kind of err or. I t is the kind of error, of fac t or l aw, that when called to the attention of later revie wer s compels the

c on c lus ion , to wh ic h r e a so na ble min ds c ou ld not dif

fe r, that the re su lt wou ld h a ve be e n ma nif e stl y4

dif fe re nt bu t fo r the e rr or ." 38 C.F .R. § 2 0. 14 03 (a ) ( 20 01 ); see generally Disabl ed Am. Veterans v. Gober , 234 F.3d 682 ( Fe d. Cir. 2000), cert. de nied , 121 S.Ct . 1605.

I n order to find CUE it must be dete rmined (1) that either the fac ts know n at the tim e we re no t befo re th e a dju dic a tor or the law the n in

e ff e c t w a s in c or

re c tly applied, (2) that an er

ror oc curr ed based on the re cord a nd the law that e x isted at the tim e the de c isi on

wa s ma de , a

nd (3 ) t hat, ha d the e rr or no t be e n ma de , th e ou tc ome wo uld have be e n ma

nif e stl y dif fe re nt.
Gr ov e r v . W

est , 1 2 Ve t

. Ap p
. 1 0 9 , 1 1 2 (1 9 9 9 ) ( ci t i n g Da mr e l v . B ro wn , 6 Vet.App. 242, 245 ( 1994); Russell v. Pr i n ci

pi , 3 Ve t.A

pp . 3 10 , 3 13 -3 14 (1 99 2) (e n b anc )) . In a CU E c la im, " [t]he c la ima nt, in shor t, must asser

t mor e than a disag ree ment as to how the fac ts w ere weig hed o r e v aluated." Cri pp e n v . B ro wn , 9 Vet.App. 412, 418 (1996). Rece ntly , the C ourt held t hat, as a matter of law, the VCAA is inapplicable to CUE claims. See Live say v. Princ ipi , 15 Vet.App. 165 ( 2001). The Court' s review

of a Boa rd decision consideringCUE in prior adjudications over which the Court does not have jurisdiction is l imited to whether the B oard' s decision was " arb i t ra ry and capr ici ou s, an abu se of di scr eti on , or no t in accor dan ce wi th th e la w." See38 U.S.C.§ 7261(a)(3) (A). I n addition, this C ourt must determine whe ther the decision is supported by an ade quate state ment of re asons or ba ses. See Ed dy v . B ro wn , 9 Vet.App. 52, 57 (1996). The scope of revie w under

the "a rbitrar y and ca pricious" standard is na

rrow, a nd a cour t is not to substitut e its judgme nt for that of the ag ency
. Ba ldw in v . W est , 1 3 Vet.App. 1, 5 ( 1999). I f the B oard a rticulates a

satisfac tory explanation f

or its de cision, "inc luding a rational connec tion between the fac ts found and the c hoice made, the Court must aff

irm." J or da n v . B ro wn , 10 Vet.App. 171, 175 ( 1997). I n this case, the a

ppellant argues that the Boa rd' s Fe bruar

y 2001 deter

mination that the March 1977 Boa rd dec ision was not t he produc t of CUE is arbitrar y , capr icious, abuse of

discretion, or otherwise not in ac corda nce w ith the l aw
. S p ec i fi cally , the appe llant argues that the B oard committed CUE in March 1977 be cause it f ailed to a djudicate his claims under 38 C.F.R. § 3.344. Pursuant to this reg ulation, the requirements for reduc ing a disability ratingthat has continued at the same leve l for 5 y ear s or more are more stringe nt tha n the require ments for pe riodically incre asing or dec rea sing a

disability rating

. See 38 C.F.R. § 3.344 (1977). Re g ulator y se c tio n 3 .3 44 state s:5 (a ) E x a m in a ti o n r e

p o r ts in d ic a ti ng improvem ent . Ratin g a g e nc ie s w ill ha nd le case s aff ecte d by chang e of me dical finding s or diag no s i s , s o as to produce the g reatest deg ree of stability of disability

evaluations consistent with th e laws and [VA] regulations gove rn i n g d i s abil ity compensation and pension. I t is essential that the e nti re re c or d of ex a min a tio ns and the me dic a l- ind

us tr ia l hi sto ry

be re vie we d to asce rtain whether the rec ent ex amination is full and complete , including a ll special e x a m i n a t i o n s i n d i c a t e d

a s a r e s u l to f g e n e r a l e x a m i n a t i o nan d

t h e e n t i r e c a s e h i s t o r

y. . . . Ex aminations less full and complete tha n those on which pay

ments were authorized or continued w ill not be used a s a basis of r eduction. Rating s on acc ount of disease s subject to te mporary or episodic improvement

. . . will not be reduc ed on any one ex am ination, except in those instances whe re a ll the evidence of re cord clea rly war rants the c onclusion that sustained improvement has be en demonstrated.

. . . M or e ov e r, tho ug h ma te ri a l im pr ov e me nt i n th e ph y sic a l or me nta l c on dit ion

is c le arl y re fl e c te d th e ra

tin g a g e nc y

wi ll c on sid er whe th er the e vid e nc e make s it rea sonably

cer t ai n that the improvement will be maintaine d under the ordinary c on dit ion s o f l if

e
. . . . Ra tin g bo ard s e nc ou nte ri ng a c ha ng e of dia g no sis wi ll e xer c ise caution in the dete rmination as t o whether a chang e in diag nosis repr esents no more t h ana p r o g r e s s i o no f

ane ar l i e r

d i a g n o s i s , an

e r r o r i np r i o r d i a g n o s i s o r

p o s s i b l y a disease e ntity

independe nt of the ser

vice- connec ted disability

. 38 C.F .R. § 3 .3 44 (a ). Para g ra ph(c ) o f s e c tio n 3 .3 44 pr ov ide s: (c) Disabilit ies which are likely to improv e. T h e p r o v is io n s o f p ar a g r a p h [] (a) . . . of this section apply to rat i n gs wh i ch have c ontinued for longperiods at the same leve l (5 y ear s or m o re). They do not apply

to disabilit ies which have not become stabiliz ed and a re likely to improve. Reexaminations disclosi ng imp ro ve me nt, ph y sic a l or me nta l, i n th e se dis a

bil iti e s w ill wa

rr ant r e du c tio n in ra t i n g. Id. I n this case, both p arties a g ree that the B oard did not addr ess 38 C.F.R. § 3.344. The Se c re tary , h ow e ve r, argue s th a t th e B oa rd was corr ect

in n ot a dd

re ssi ngthe re g ulatio n b e c a us e it does not apply

to the fac ts o f t he ca se. The Sec reta ry ' s argument is without m erit. In Brown v. Br own , t h i s C o u rt h el d t h at wh en t h e i s s u e i s wh et h er t h e VA R O i s j u s t i fi edi nre d u ci n g a v et er an 's pr ote c te d rat in g, the B oa rd is r e qu ir e d to e sta

bli sh , b y a pr e po nd e ra

nc e of the e vid e nc e and

in

c omp lia nc e 38 C.F .R. § 3 .3 44 , th a t a ratin g re du c tio n is wa

rr ante d. 5 V e t.A

pp . 4 13 , 4 21 (1 99 3) ; see als o Kitc he ns v . B ro wn , 7 Ve t

. Ap p
. 3 2 0 , 3 2 5 (1 9 9 5 ) ( h o l d i n g t h atwh en a V AR O r edu ce s a v et er an 's dis a bil ity ratin g wi tho ut o bs e rv ingthe a pp lic a ble VAreg ul ati on s, the re du c tio n is void ab initio. ) I n Te rn us v . B ro wn , th e C o urt noted that the B oard is re quired to apply all rele vant statutes and regulations appropriate to the ca se bef ore it. 6 Vet.App. 370, 376 (1994). Fur thermore , the Court6

held that the VARO' s failure to a pply the reduc tion r egulation f or total disability

rating s assig ned on schedula r base s was CUE. Id. ; se e Ol so n v . B ro wn , 5 Ve t

. Ap p
. 4 3 0 (1 9 9 3 ) ( h o l d i n g t h at Bo ar d 's deter mination that decision below that did not apply reduc tion reg ulation did not conta in CUE was arbitra ry , capr icious, an abuse of discretion or otherwise not in a ccor dance with law). In this case, the Marc h 1977 Boa

rd dec ision i n failing to addre ss 38 C.F.R. § 3.344 abused its discretionar y authority

. See D o

f f l emy er v. D erwinski , 2 Ve t

. Ap p
. 2 7 7 , 2 8 2 (1 9 9 2 ). Ac co rd i n gl y , t h e B o ar d 's Fe bruar y 2001 conclusion that the 1977 decision did not contain CUE is not in accorda nce w ith law and must be re verse d. 38 U.S.C. § 7261 (a)(3) (A).

III . C ON CL USI ON Upon consider ation of the re cord a nd pl ea d i n gs fi led for this appe al, and f or the re asons state d h e re in, the Court

REV ERS ES the F e br

ua ry 17 , 2 00 1, B oa

rd de c isi on that f ound no CU E i n the Marc h 17, 1977, Boa

rd decision and REMANDS the case to the Boa rd to r evise the 1977 Boa

rd decision on the ba sis of CUE.