Court Opinion

ID: 3168923
Source: CourtListenerOpinion
Date Created: 2016-01-12 19:03:15.126141+00
Date Added: 2024-06-11T12:00:05.913397
License: Public Domain

UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS

                                            NO. 14-2449

                                 JOSE V. KUPPAMALA, APPELLANT,

                                                  V.

                                   ROBERT A. MCDONALD,
                          SECRETARY OF VETERANS AFFAIRS, APPELLEE.

                          On Appeal from the Board of Veterans' Appeals

(Argued October 14, 2015                                               Decided December 30, 2015)

       Landon E. Overby, of Providence, Rhode Island, argued before the Court. Shatilla Shera
B.D. Cairns, of Providence, Rhode Island, was on the brief for the appellant.

        Ronen Z. Morris, of Washington, D.C., argued before the Court. Jonathan G. Scruggs, with
whom, Leigh A. Bradley, General Counsel; Mary Ann Flynn, Assistant General Counsel; and
Christopher W. Wallace, Deputy Assistant General Counsel, all of Washington, D.C., were on the
brief for the appellee.

       Before DAVIS, SCHOELEN, and BARTLEY, Judges.

       SCHOELEN, Judge: The appellant, Jose V. Kuppamala, through counsel, appeals a June 27,
2014, Board of Veterans' Appeals (Board) decision in which the Board denied his claim for a rating
in excess of 50% for ulcerative colitis, status post colectomy. Record of Proceedings (R.) at 3-7.
This appeal is timely, and the Court has jurisdiction to review the Board's June 2014 decision
pursuant to 38 U.S.C. §§ 7252(a) and 7266(a). This matter was referred to a panel of the Court, with
oral argument, to address whether the Board has the authority to review a decision by the Director
of Compensation Service1 awarding an extraschedular disability rating under 38 C.F.R. § 3.321(b)(1)

       1
         In January 2014, VA's Compensation and Pension Service was renamed the "Compensation
Service." See VA Compensation Service and Pension and Fiduciary Service Nomenclature Changes,
79 Fed. Reg. 2,099, 2,099 (Jan. 13, 2014). For the sake of clarity, the Court will hereinafter refer to
the Director of VA's Compensation Service simply as the "Director."
(2015).2 For the reasons discussed below, the Court holds that the Board reviews the Director's
award of an extraschedular rating de novo. Upon review of the parties' arguments, the Court will
vacate the Board's June 2014 decision and remand the matter for proceedings consistent with this
decision.

                                       I. BACKGROUND
       Mr. Kuppamala served on active duty in the U.S. Air Force from September 1987 to
September 1991. R. at 254. In August 2000, Mr. Kuppamala submitted a formal claim for disability
compensation for ulcerative colitis. R. at 342-46. A December 2001 rating decision granted service
connection for ulcerative colitis under Diagnostic Code (DC) 7323 with a 10% disability rating,
effective August 16, 2000. R. at 255-61. After receiving medical records from November 2002
showing that Mr. Kuppamala underwent a total colectomy for his chronic ulcerative colitis (R. at
230-37), the VA regional office (RO) issued a February 2003 rating decision increasing his disability
rating for ulcerative colitis to 20%, effective from March 12, 2002, to October 31, 2002, and to
100% from October 31, 2002, to January 1, 2003; and assigned a 10% disability rating from January
1, 2003 (R. at 226-29).3 In May 2003, Mr. Kuppamala underwent a VA digestive conditions
examination in which he reported symptoms of chronic fatigue and chronic diarrhea following his
colon resection. R. at 213-19. That same month, VA assigned a 40% disability rating under DC
7329 for residuals of resection of the large intestine from January 31, 2003; 40% is the highest
available rating under DC 7329. R. at 209-11.
       In July 2007, Mr. Kuppamala filed a claim for an increased rating for ulcerative colitis
asserting that "the condition has grown worse than currently rated." R. at 195-200. In an October
2007 VA examination, Mr. Kuppamala reported having approximately 14 bowel movements per day
and up to 2 to 3 bowel movements each night, which caused extreme fatigue. R. at 166. The

       2
         Oral argument was held on October 14, 2015, in Baltimore, Maryland, at the University
of Baltimore Law School. The Court extends its appreciation to the law school for its hospitality.

       3
        The 100% disability rating was extended through the end of January 2003 based on the need
for convalescence after surgery. R. at 209-11.

                                                 2
examiner also noted that Mr. Kuppamala "feels stressed because of the time he has to spend in the
bathroom, both during his working hours and at night." Id. The examiner diagnosed "ulcerative
colitis, status post total colectomy with residuals of frequent passage of soft tan stools causing
disruption of the veteran's sleep and work schedules with attendant stress caused by his fatigue and
need for frequent bathroom stops." R. at 167.
       A January 2008 rating decision continued the 40% disability rating. R. at 158-62.
Thereafter, Mr. Kuppamala timely appealed to the Board. R. at 130-31, 132-44, 152-55. In his
Substantive Appeal, Mr. Kuppamala reported experiencing weight loss, loss of appetite, reduced
energy, and disrupted sleep that caused problems with memory and concentration – all related to his
frequent daytime and nighttime bowel movements. R. at 130-31. In March 2010, Mr. Kuppamala
submitted a letter explaining that he suffered from physical and emotional distress because of his
frequent bowel movements and asserting that he experienced "low back pain and leg pain 3 times
last year due to frequently need[ing] to go to the restroom." R. at 100.
       In an April 2010 VA examination, Mr. Kuppamala endorsed a 20-pound weight loss and
occasional incontinence. R. at 102. The examiner also noted "daily diarrhea" and observed that Mr.
Kuppamala's symptoms interfered with his work as an x-ray technician because he "will have to stop
in the middle of x-rays with patients [and] go to the bathroom [and] sometimes doesn't get there in
time." Id. Mr. Kuppamala was not able to perform jury duty because "he would never be able to sit
in a courtroom without needing to go to the bathroom many times." Id. Mr. Kuppamala also
described being very concerned about being able to locate a bathroom in time when on vacation and
while flying or driving his children to school. Id. The examiner noted that "[i]f [Mr. Kuppamala]
goes to social functions, [he] must think whether or not a bathroom will be [available and] may skip
the function if he doesn't think a bathroom will be available to him[;] he does no outside camping."
Id.
       In a December 2011 Board decision, the Board remanded Mr. Kuppamala's claim "for
consideration of extraschedular entitlement, to include a referral to the Director of Compensation
and Pension Service." R. at 54. In May 2012, the Director found that the rating schedule under DC
7323-29 does "not address the frequency of the severe symptoms" and that the "frequency of the
symptoms presents the exceptional or unusual disability picture affecting [Mr. Kuppamala's] ability

                                                 3
to perform his occupational duties as an x-ray technician causing marked interference with
employment." R. at 45. The Director decided that an extraschedular evaluation was warranted and
awarded a 10% extraschedular rating. R. at 46. Subsequently, VA implemented the Director's
decision and increased Mr. Kuppamala's disability rating for his service-connected ulcerative colitis
to 50%, effective July 23, 2007. R. at 35-44. Mr. Kuppamala appealed this extraschedular rating.
R. at 18.
        In the June 2014 decision on appeal, the Board noted that Mr. Kuppamala's symptoms of
frequent loose bowel movements and bowel incontinence left him unable to work alone or in
specialty clinics because he needs to use the bathroom so often. R. at 6. The Board then
summarized the Director's decision before stating that "[a] 50% rating for ulcerative colitis, status
post colectomy, is warranted." Id. This appeal followed.

                               II. THE PARTIES' ARGUMENTS
       Mr. Kuppamala argues that the Board failed to fulfill its obligation to provide a de novo
review of the Director's decision. Appellant's Brief (Br.) at 5, 9. He asserts that the Board merely
repeated the Director's analysis – which is improper both because the Director's decision is not
evidence and because the Board was obligated to conduct its own independent review of the
evidence and provide adequate reasons or bases for its decision. Id. at 9-10. Consequently, he
contends, the Board did not fully consider other symptoms beyond the frequency of his bowel
movements – including weight loss, loss of appetite, disturbed sleep, fatigue, memory and
concentration problems, and low back and leg pain – that make up his complete disability picture.
Id. at 11-12. Mr. Kuppamala argues that had the Board properly considered these symptoms, the
Board may have found he was entitled to a higher rating. Id. at 14.
       The Secretary responds that neither the Board nor the Court has the authority to review the
Director's decision awarding an extraschedular rating. Secretary's Br. at 8. The Secretary identifies
four reasons why the Director's decision is discretionary and not subject to review: (1) Awarding an
extraschedular rating is a policy-based decision; (2) there are no manageable judicial standards for
the Board to apply and the Board lacks the necessary expertise to assign an extraschedular rating;
(3) the plain language of 38 C.F.R. § 3.321(b) authorizes only two entities to award extraschedular

                                                 4
ratings – the Director and the Under Secretary for Benefits; and (4) subjecting the Director's decision
to review renders the regulation unworkable and in conflict with 38 U.S.C. § 7252. Oral Argument
(Arg.) at 09:35. Consequently, the Secretary argues that although the Board normally must provide
reasons or bases explaining its decision, any deficiency in the Board's analysis is harmless here
because the Board lacks the authority to review the Director's decision. Id. at 16-17.

                                          III. ANALYSIS
                              A. The Scope of the Board's Jurisdiction
       This case raises a question of the Board's jurisdiction: Whether the Board has jurisdiction to
review the Director's assignment of an extraschedular rating.4 Section 511(a) of title 38, U.S. Code,
states that "[t]he Secretary shall decide all questions of law and fact necessary to a decision by the
Secretary under a law that affects the provision of benefits by the Secretary to veterans or the
dependents or survivors of veterans." 38 U.S.C. § 511(a). The U.S. Court of Appeals for the Federal
Circuit (Federal Circuit) has construed the reference to "law" in section 511(a) as broadly referring
to any "single statutory enactment that bears a Public Law number in the Statutes at Large." Bates
v. Nicholson, 398 F.3d 1355, 1361 (Fed. Cir. 2005). Accordingly, the Federal Circuit found that an
interpretation of section 511(a) that "generally places review of Secretarial decisions under a single
piece of legislation relating in whole or in part to benefits first in the Board, and then in the Court
of Appeals for Veterans Claims clearly serves the congressional purpose [behind the 1988 Veterans
Judicial Review Act]." Id. at 1365.
       The Board is an agent of the Secretary, as are the ROs. Disabled Am. Veterans v. Sec'y of
Veterans Affairs, 327 F.3d 1339, 1346-47 (Fed. Cir. 2003) (citing 38 U.S.C. § 7101(a) (2000)). The
Board's jurisdiction derives from 38 U.S.C. § 7104(a), which provides:

       4
          To the extent that the Secretary argued in his brief and at oral argument that 38 U.S.C.
§ 7252 limits the Court's review of the Director's decision, this case raises a question of the Board's
jurisdiction and ability to review the Director's decision. By deciding that the Board must review
the Director's decision and remanding the matter for the Board to conduct that review, the Court need
not consider the scope of its own review over the Director's decision or its ability to assign an
extraschedular rating.

                                                  5
          (a) All questions in a matter which under section 511(a) of this title is subject to
          decision by the Secretary shall be subject to one review on appeal to the Secretary.
          Final decisions on such appeals shall be made by the Board. Decisions of the Board
          shall be based on the entire record in the proceeding and upon consideration of all
          evidence and material of record and applicable provisions of law and regulation.

The Federal Circuit has explained that "[t]ogether, §§ 511(a) and 7104(a) dictate that the Board acts
on behalf of the Secretary in making the ultimate decision on claims and provides 'one review on
appeal to the Secretary' of a question 'subject to decision by the Secretary' under § 511(a)." Disabled
Am. Veterans, 327 F.3d at 1347. Importantly, section 7104, unlike this Court's jurisdictional statute,
does not limit the Board's ability to review favorable findings. Compare 38 C.F.R. § 7104(a), with
38 U.S.C. § 7261(a)(4); see Anderson v. Shinseki, 22 Vet.App. 423, 428 (2009). Thus, generally,
the Board may review the entire Agency decision below. However, there is an exception: "Where
a decision is committed to the discretion of the Secretary and no manageable standards exist to
evaluate that decision, the decision is committed to the Secretary's discretion absolutely, and the
Board lacks jurisdiction to review such a determination." Werden v. West, 13 Vet.App. 463, 467
(2000).
   1. Judicially Manageable Standards for Review of the Director's Extraschedular Decision
          At oral argument, relying on Werden, the Secretary argued that here there are no judicially
manageable standards governing the Director's decision as to extraschedular ratings and that,
therefore, it would be impossible for the Board to review the decision. Rather, the Secretary suggests
that the Board's only obligation is to recognize that the Director made the decision and assigned a
particular rating.5 For the reasons discussed below, the Court disagrees.

          5
          In his brief, the Secretary argued that the Board may review the Director's factual
assessment of the veteran's disability picture and interpretation of the rating schedule as to whether
it contemplates that picture applying a de novo and deferential standard respectively. Secretary's Br.
at 1-12. However, the Secretary contends that the award of an extraschedular rating is insulated from
review because it involves a policy judgment on the average impairment in earning capacity caused
by that disability. Id. at 12. By contrast, at oral argument, the Secretary argued that even if the
Director made a factual misstatement or "left out a critical part of the analysis," the Board's review
was limited to an acknowledgment that the Director made a decision. Oral Arg. at 28:45. Because
the Court finds that, contrary to the Secretary's broader position advanced at oral argument, the entire
decision is reviewable, the Court need not address the narrower argument: It is subsumed by the
broader analysis.

                                                   6
       In Werden, the appellant challenged the Board's decision that it lacked jurisdiction to review
the manner in which VA dispersed the appellant's special adaptive housing grant. 13 Vet.App. at
466. The authorizing regulation gave the Secretary discretion to "decide upon a method of
disbursement which in the Secretary's opinion is appropriate and advisable in the interest of the
veteran and the Government and disburse the benefit payable accordingly." Id. at 467 (citing
38 C.F.R. § 36.4406 (1999)) (emphasis added). The Court determined that the implementing
regulation committed the question of disbursement "solely to the Secretary's discretion" and stated
that "[t]his is exactly the type of question of policy or resource management that is made by the
executive branch and is not an appropriate matter for judicial review." Id. at 468. Therefore,
Werden explained that de novo review by the Board is inappropriate "when the plain language of the
statute vests absolute discretion in the Secretary and the Secretary has not limited his discretion by
regulation." Id.
       Accordingly, the Court must consider whether the statute and regulation governing
extraschedular ratings committed the assignment of a rating solely to the Secretary's discretion. As
the Secretary acknowledged at oral argument, the authority for 38 C.F.R. § 3.321(b) derives from
38 U.S.C. § 1155. Oral Arg. at 25:00; 30:42; 33:42. Section 1155 provides that "the Secretary shall
adopt and apply a schedule of ratings of reductions in earning capacity from specific injuries or
combination of injuries. The ratings shall be based, as far as practicable, upon the average
impairments of earning capacity resulting from such injuries in civil occupations." 38 U.S.C.
§ 1155. Although the Secretary has discretion to create a schedule of ratings, there is a guiding
principle: The ratings shall be based on the average impairment of earning capacity resulting from
service-connected disabilities.
       The governing regulation, 38 C.F.R. § 3.321(b) authorizes the assignment of an
extraschedular rating stating:
       To accord justice, therefore, to the exceptional case where the schedular evaluations
       are found to be inadequate, the Under Secretary for Benefits or the Director,
       Compensation and Pension Service, upon field station submission, is authorized to
       approve on the basis of the criteria set forth in this paragraph an extra-schedular
       evaluation commensurate with the average earning capacity impairment due
       exclusively to the service-connected disability or disabilities. The governing norm
       in these exceptional cases is: A finding that the case presents such an exceptional or

                                                  7
        unusual disability picture with such related factors as marked interference with
        employment or frequent periods of hospitalization as to render impractical the
        application of the regular schedular standards.

Id. (emphasis added). Thus, as the Secretary discussed at oral argument, VA may only assign an
extraschedular rating based on the "analytic formula" identified in section 1155: the average earning
capacity impairment resulting from the service-connected disabilities. Oral Arg. at 33:42.
        Currently, average impairment in earning capacity is not a clearly defined standard. The
Secretary suggests that requiring the Board to review the Director's decision and consider the average
impairment in earning capacity puts the Board in an impossible situation because the Board lacks
the expertise the Director has necessary for assigning an extraschedular rating. The fact that the
Secretary has not elected to provide more guidance explaining how to ascertain the average
impairment in earning capacity is neither uncommon6 nor an adequate reason to isolate the Director's
decision from the congressionally mandated Board review established in section 7104.7 Manageable
judicial standards do not require absolute clarity. Rather, all that is needed is a legal standard by
which a court may measure the governmental action. Average impairment in earning capacity is the
standard that forms the basis for the entire rating schedule. 38 U.S.C. § 1155. It is also a limiting
principle restricting the Secretary's discretion in § 3.321(b). This is sufficient to establish a judicially
manageable standard. Indeed, the Board reviews average impairment in earning capacity every day.
         Moreover, as the Director's decision here illustrates, extraschedular consideration is not a
question of opinion or discretion, but one of fact. In reaching his decision, the Director relied on the

        6
         Despite repeated encouragement from this Court, VA has provided only limited guidance
regarding the definition of "substantially gainful occupation" in § 4.16. See Faust v. West,
13 Vet.App. 342, 355 (2000) (recognizing that "the Secretary has yet to issue a clear definition of
substantially gainful employment, despite the Court's encouragement to that effect" and subsequently
offering a definition "for the purpose of dealing with the facts of this case"); Moore (Robert) v.
Derwinski, 1 Vet.App. 356, 359 (1991) (calling for a clear definition of "unemployability" but
declining to impose a Court-created rule).
        7
          Unlike TDIU where the rating assigned under § 4.16 is set at 100%, here, the rating is
determined based on the average impairment in earning capacity resulting from the unique disability
picture. Because the nature of extraschedular consideration requires that the disability picture be
unique and not contemplated by the rating schedule, there logically is no guidance as to the specific
rating that should be assigned in any particular case. See Floyd v. Brown, 9 Vet.App. 88, 97 (1996).

                                                     8
April 2010 examination, noting Mr. Kuppamala's "severe symptoms of about 14 bowel movements
a day" and that he occasionally has to leave an x-ray session to use the bathroom and also
experiences episodes of incontinence. R. at 45. The Director concluded that the rating schedule did
not contemplate the frequency of Mr. Kuppamala's symptoms and that the frequency of his
symptoms "presents the exceptional or unusual disability picture affecting his ability to perform his
occupational duties as an X-ray technician causing marked interference with employment." Id.
Clearly, this is a fact-driven analysis assessing a veteran's unique disability picture and whether that
picture results in an average impairment in earning capacity significant enough to warrant an
extraschedular rating. Therefore, the Court finds that where, as here, the statute and regulation
provide "a judicially manageable standard limiting the Secretary's discretion, the Board must review
the Secretary's decision to [e]nsure that it was made within the statutory or regulatory confines."
Werden, 13 Vet.App. at 467.
                                    2. Policy Decision Argument
        Although there is a judicially manageable standard, the Secretary still argues that the plain
language of the regulation – in particular the phrase "to accord justice" – precludes review by the
Board because this language indicates that extraschedular consideration involves a policy decision.
Oral Arg. at 16:04. He maintains that the purpose of § 3.321(b) was to provide, as a matter of equity,
an additional rating in the exceptional case not contemplated by the rating schedule. Id. at 31:11.
First, the Court notes that 38 U.S.C. § 503 provides the authorization for equitable relief, yet the
Secretary does not cite this statute or argue that § 3.321(b) was promulgated under its authority. See
Darrow v. Derwinski, 2 Vet.App. 303, 304 (1992) (distinguishing between grant of benefits based
on Secretary's equitable authority under section 503(a) and grant of benefits based upon statutory
entitlement).
        Moreover, as noted above, there is a clear statutory mandate found in "§§ 511(a) and 7104(a)
dictat[ing] that the Board acts on behalf of the Secretary in making the ultimate decision on claims
and provides 'one review on appeal to the Secretary' of a question 'subject to decision by the
Secretary' under § 511(a)." Disabled Am. Veterans, 327 F.3d at 1347 (quoting 38 U.S.C. §§ 511(a)
and 7104(a)). There is no legitimate dispute that § 3.321(b) affects the provision of benefits,
rendering it a section 511(a) issue that is subject to the Board's jurisdiction. Wages v. McDonald,

                                                   9
27 Vet.App. 233, 237 (2015); Bates, 398 F.3d at 1362; 38 U.S.C. § 511(a). Therefore, even if
§ 3.321(b) could be read to limit the Board's scope of review, that interpretation would contradict
the clear congressional intent in 38 U.S.C. § 7104(a) that the Board shall be the final authority on
all benefits decisions. Wages, 27 Vet.App. at 236; Disabled Am. Veterans, 327 F.3d at 1347;
38 C.F.R. § 20.101(a)(1) (2015) (providing that the Board has jurisdiction over issues such as
"[e]ntitlement to and benefits resulting from[ ] service-connected disability" under 38 U.S.C. chapter
11); 38 C.F.R. § 20.101(b) (contrasting "adjudicative matters," which the Board has authority to
review, with "medical determinations," which the Board does not have authority to review).
                                        3. Reasons or Bases
       The Secretary suggests that the Board's review of the Director's decision is limited to merely
noting the fact that the Director made a decision. Oral Arg. at 21:00. He argues that an
extraschedular award is part of the regular claims process because the relevant "fact" the Board must
note "is simply what the Director determined." Oral Arg. at 32:57. The Board is the final authority
on benefits decisions yet the review the Secretary endorses is nothing more than lip service to this
principle. The Court is perplexed by the Secretary's assertion that even if the Director made a clear
factual misstatement in his decision, the veteran would have no recourse but to seek private relief
or a change in law from Congress. Oral Arg. at 23:20. "The purpose of appellate review . . . is to
ensure that the facts found and laws applied were appropriate." Werden, 13 Vet.App at 467. An
inaccurate or incomplete decision from the Director frustrates that review. Accordingly, the Court
further finds that to allow for a proper review, the Board must have before it an actual decision
complete with a statement of reasons or bases. 38 U.S.C. § 5104 ("In any case where the Secretary
denies a benefit sought, the notice . . . shall also include (1) a statement of the reasons for the
decision, and (2) a summary of the evidence considered by the Secretary.").
       Contrary to the Secretary's assertion at oral argument, the Director may not issue a decision
assigning an extraschedular rating that merely states that "an extraschedular rating of 10% is
warranted." Oral Arg. at 37:38. When the Director acts in the context of extraschedular ratings, he
is taking the place of an RO adjudicator. Wages, 27 Vet.App. at 238 ("In short, the Director's
decision is no different than an RO's decision in terms of its effect on the Board's statutory
jurisdiction and the Board's standard of review.") (citing Disabled Am. Veterans, 419 F.3d at 1319

                                                 10
("[T]he Board conducts de novo review of [RO] proceedings based on the record.")). Extraschedular
consideration under § 3.321(b) is part of the claims process even though there are additional
procedural requirements – referral to the Director – that must be followed. Floyd, 9 Vet.App. at 96.
The actual review of the matter is done for the first time by the Secretary. Anderson, 22 Vet.App.
at 428. Any award made by the Director is then implemented by the RO. Id. at 429. Thus, the
Director's decision is "in essence the de facto decision of the agency of original jurisdiction. . . . It
is simply a decision that is adopted by the RO and reviewed de novo by the Board." Wages,
27 Vet.App. at 239. Accordingly, the Director must comply with the same requirements as the RO
that will implement the decision and provide a statement of reasons for the decision and a summary
of the evidence considered. 38 U.S.C. § 5104. Knowing the facts and the law that the Director
relied on, the Board may then dutifully review whether the Director's decision was in accordance
with the evidence of record and the requirements of § 3.321(b).
                     B. Board's Authority To Assign an Extraschedular Rating
        Having determined that the Board has authority to review the entirety of the Director's
decision, the Court next addresses what remedy the Board may provide. Specifically, may the Board
assign an extraschedular rating? For the reasons that follow, the Court holds that it may.
        The Secretary argues that the Board may not assign an extraschedular rating because the
Board lacks the expertise necessary to review the Director's assessment of the average impairment
in earning capacity resulting from the individual's disability picture. This argument is out of step
with the Court's caselaw specifically addressing § 3.321(b)(1).
        In Floyd v. Brown, the Board sua sponte granted the appellant a 10% extraschedular
evaluation. 9 Vet.App. at 94. Rather than finding, as the Secretary now argues, that the Board may
neither assign nor review the assignment of an extraschedular evaluation, the Court, relying on
sections 511(a) and 7104(a), found that § 3.321(b)(1) precludes the Board from "assigning such a
rating in the first instance." Id. at 94-95. Prohibiting the Board from assigning an extraschedular
rating in "the first instance" logically suggests that once the Director has made an initial
determination, the Board may assign an extraschedular rating thereafter.
        This conclusion is further supported by Anderson v. Shinseki. In Anderson, the Board
reviewed the Director's denial of an extraschedular rating. 22 Vet.App. at 426-27. The Court

                                                   11
expressly rejected the appellant's efforts to parse the elements of Thun into individual binding
decisions, clarifying that each step of the three-step inquiry announced in Thun is an "element[] that
must be established before an extraschedular rating can be awarded and . . . they are reviewable by
the Board." Id. at 427. Also relying on § 7104(a), the Court in Anderson stated that "the Board is
permitted to review the entirety of the proceedings below." Id. at 428. Notably, although in
Anderson, the Director ultimately denied an extraschedular rating, there is no discernable distinction
between the Board's ability to review a denial of an extraschedular rating and review of an award of
an extraschedular rating. Id. (noting that "the Board's review of the RO's decision that Mr. Anderson
was not entitled to a hearing loss greater than 10% included a review of whether an extraschedular
rating was warranted") (emphasis added). The only clear limitation on the Board's review is the
Director's specific regulatory authority to approve extraschedular awards in the first instance. Id.
       Despite an opportunity to do so, neither Floyd nor Anderson adopted an interpretation of
§3.321(b)(1) that sets the Director's decision outside the Board's jurisdiction under sections 511(a)
and 7104(a) to make the final decision for the Secretary. Instead, these decisions only preclude the
Board from assigning an extraschedular evaluation in the first instance. Once the Director has
conducted his review, as Anderson clarified, all three elements of Thun are reviewable by the Board.
Thus, Floyd and Anderson support a finding consistent with Wages that the Board reviews the
Director's extraschedular decision de novo, and may, therefore, assign an extraschedular rating.8
Wages, 27 Vet.App. at 239.
       Additionally, the Court disagrees that the Board lacks the requisite experience necessary to
assign an extraschedular rating. As noted above, the entire rating schedule is governed by the
average impairment in earning capacity resulting from service-connected disabilities. 38 U.S.C.
§ 1155. Thus, in every decision involving the rating schedule, the Board considers the average

       8
         The Court notes that language in Thun v. Shinseki, 572 F.3d 1366 (Fed. Cir. 2009) may
suggest that only the Under Secretary for Benefits or the Director may assign an extraschedular
award to the Under Secretary and the Director. Id. at 1370. However, the specific argument in
Thun involved whether the RO made a threshold inquiry prior to referring the matter for
extraschedular consideration. Id. The Federal Circuit was focused on the authority of the RO, the
Board, and the Director with respect to steps one and two of Thun. Therefore, Thun did not consider
each entity's authority under step three and Floyd and Anderson are still controlling precedent.

                                                 12
impairment in earning capacity. Granted, the rating schedule sets predetermined ratings for most
disabilities. But, in many instances, the Board's review is not solely limited to a mechanical
application of the rating schedule. 38 C.F.R. § 4.21 (2015) (rating regulations do not require that
all cases show all findings specified by the rating schedule; coordination of rating with impairment
of function expected in all instances). For example, when a veteran's condition is not listed in the
rating schedule, the Board may assign a rating by analogy under 38 C.F.R. § 4.20 (2015).
Additionally, in the context of psychiatric disabilities under 38 C.F.R. § 4.130 (2015), the Court has
held that the symptoms listed in DC 9411 are "not intended to constitute an exhaustive list, but rather
are to serve as examples of the type and degree of symptoms, or their effects, that would justify a
particular rating." Mauerhan v. Principi, 16 Vet.App. 436, 442 (2006). The Board is required to
"consider all symptoms of a claimant's condition that affect the level of occupational and social
impairment," not just those listed in the regulation. Id. at 443. As "symptomatology should be the
fact-finder's primary focus when deciding entitlement to a given disability rating," the Board must
go beyond the criteria in the schedule to determine what level of impairment to earning capacity
results from an appellant's unique symptoms. Vazquez-Claudio v. Shinseki, 713 F.3d 112, 117 (Fed.
Cir. 2013).
       Finally, although the Secretary argues that the Court's holding in this case will render
§ 3.321(b) unworkable and undermine the Secretary's intention to provide extraschedular ratings "to
accord justice," this argument is without merit. As discussed above, despite invoking the word
"justice," extraschedular consideration under § 3.321(b) is a decision governed by law, with
discernable standards, and not equity. If the Secretary had intended extraschedular ratings to be
equitable decisions, the statutory authority for the regulation would come from 38 U.S.C. § 503,
which allows the Secretary to provide equitable relief. Instead, § 3.321(b)'s authority derives from
section 1155, placing it within the normal VA benefits claims process. See Floyd, supra; see also
VA. Gen. Couns. Prec. Op. 6-96 (noting that extraschedular and TDIU ratings "should be viewed
as a component of the increased-rating claim rather than a separate claim").
       As to the Secretary's assertion that extraschedular ratings are a policy consideration, the
policy decision was made when the Secretary promulgated the regulation allowing for extraschedular
ratings to account for exceptional circumstances. This delegation serves multiple purposes. First,

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it allows the Director to exercise his expertise in the first instance. While not evidence, this decision
may serve to inform the Board's review. See Wages, 27 Vet.App. at 239 (finding that the Director's
decision is not evidence). Additionally, limiting the initial grant of an extraschedular rating to the
Director instead of the many ROs across the country provides a degree of uniformity over these
exceptional decisions. Referral also keeps the Director apprised of the number and type of unique
disability cases allowing the Secretary to satisfy his obligation to, "from time to time[,] readjust th[e]
schedule of ratings in accordance with experience." 38 U.S.C. § 1155. Therefore, the Board's ability
to review the Director's decision and assign a rating after the Director has had an opportunity to
review the claim does not render referral to the Director meaningless. See Wages, 27 Vet.App. at
238. Rather, it allows the Director to exercise his expertise while preserving the Board's appellate
authority to remedy any error in the Director's initial decision. See Anderson, 22 Vet.App. at 431
(Schoelen, J., concurring) (expressing concern that although the Director is uniquely suited to
determine what extraschedular rating is appropriate, isolating the Director's decision from review
by the Board would frustrate the Board's appellate authority under section 7104(a)). Consequently,
this argument is insufficient to overcome the clear statutory directive that the Board shall be the final
agency authority on all benefits decisions. See 38 U.S.C. § 7104(a). Based on the foregoing, the
Court concludes that the clear import of both the statutes establishing the Board's jurisdiction and
the Court's prior caselaw lead to only one conclusion: The Board reviews the entirety of the
Director's decision de novo and is thus authorized to assign an extraschedular rating when
appropriate.
                                      C. The Decision on Appeal
        Having found that the Board has the authority to review the Director's entire decision de
novo, the Court will now address the Board decision on appeal. The Board must provide a statement
of the reasons or bases for its determination, adequate to enable an appellant to understand the
precise basis for the Board's decision as well as to facilitate review in this Court. 38 U.S.C.
§ 7104(d)(1); see Allday v. Brown, 7 Vet.App. 517, 527 (1995); Gilbert v. Derwinski, 1 Vet.App.
49, 56-57 (1990). To comply with this requirement, the Board must analyze the credibility and
probative value of the evidence, account for the evidence that it finds persuasive or unpersuasive,
and provide the reasons for its rejection of any material evidence favorable to the claimant. See

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Caluza v. Brown, 7 Vet.App. 498, 506 (1995), aff'd, 78 F.3d 604 (Fed. Cir. 1996) (table); Gilbert,
1 Vet.App. at 57.
       Ulcerative colitis is rated under DC 7323, which provides for a 100% disability rating where
the condition is "[p]ronounced; resulting in marked malnutrition, anemia, and general debility, or
with serious complication as liver abscess." 38 C.F.R. § 4.114, DC 7323 (2015). Where the
condition is "[s]evere; with numerous attacks a year and malnutrition, the health only fair during
remissions" the condition is evaluated at 60%. Id. Mr. Kuppamala is rated under DC 7329, which
applies to resection of the large intestine and provides for a maximum 40% disability rating for
"severe symptoms, objectively supported by examination findings." 38 C.F.R. § 4.114, DC 7329.
He has the maximum rating under DC 7329.
       In the decision on appeal, the Board discussed Mr. Kuppamala's frequent bowel movements
and bowel incontinence that prevented him from working alone or in specialty clinics and caused
him to miss work. R. at 6. The Board then summarized the Director's decision, noting the Director's
finding that the rating schedule was inadequate because it did not address the frequency of Mr.
Kuppamala's symptoms and assigning a 10% extraschedular rating in addition to the veteran's 40%
schedular rating, for a combined 50% disability rating. Id. The Board then summarily concluded
that the 50% disability rating was appropriate. Id. As Mr. Kuppamala points out, the Board did not
discuss the VA medical examinations or address his symptoms of loss of appetite, weight loss,
chronic fatigue, problems with memory and concentration, and lower back and leg pain – all of
which he reports affect his ability to work. Appellant's Br. at 11-12.
       As demonstrated by the Board's summary, the Director's decision focused on the frequency
of his bowel movements. R. at 45-46. Neither the Director nor the Board addressed Mr.
Kuppamala's symptoms – including weight loss, loss of appetite, disturbed sleep, fatigue, memory
and concentration problems, and low back and leg pain – that are part of his complete disability
picture. R. at 6. Mr. Kuppamala argues that he suffers from "more than frequent diarrhea" and that
had the Board addressed this evidence, it may have found that the Director's analysis was incomplete.
Appellant's Reply Br. at 3. The Secretary even acknowledged that this evidence was a "critical part
of the analysis." Oral Arg. at 28:45. The Court agrees that the Board needed to discuss this
evidence. Floyd, 9 Vet.App. at 96-97 (noting that when an appellant appeals an extraschedular

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rating to the Board, "the Board will be required to articulate its findings of fact and sufficient reasons
and bases on the extraschedular consideration issue"). The Board's limited analysis frustrates the
Court's ability to review the Board's assessment of Mr. Kuppamala's disability picture. Cf. Anderson,
22 Vet.App. at 429 (finding that "because the Board's description of [the appellant's] disability
picture presented by the record is incomplete, its analysis of whether that disability picture is
adequately contemplated by the rating schedule is necessarily flawed); see also Allday and Caluza,
both supra. Accordingly, the Court will remand this matter for proceedings consistent with this
decision.
        On remand, the appellant is free to submit additional evidence and argument on the remanded
matters, and the Board is required to consider any such relevant evidence and argument. See Kay
v. Principi, 16 Vet.App. 529, 534 (2002); Kutscherousky v. West, 12 Vet.App. 369, 372-73 (1999)
(per curiam order). The Court has held that "[a] remand is meant to entail a critical examination of
the justification for the decision." Fletcher v. Derwinski, 1 Vet.App. 394, 397 (1991). The Board
must proceed expeditiously, in accordance with 38 U.S.C. § 7112 (requiring Secretary to provide for
"expeditious treatment" of claims remanded by Court).

                                         IV. CONCLUSION
        Upon consideration of the foregoing, the June 27, 2014 Board decision is VACATED and
REMANDED for further proceedings consistent with this decision.

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