Court Opinion

ID: 4303339
Source: CourtListenerOpinion
Date Created: 2018-08-13 19:01:32.765861+00
Date Added: 2024-06-11T14:32:42.561190
License: Public Domain

UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS

                                                   No. 16-1093

                                  WOLFGANG A. PETERMANN, APPELLANT,

                                                          V.

                                         ROBERT L. WILKIE,
                              SECRETARY OF VETERANS AFFAIRS, APPELLEE.

                              On Appeal from the Board of Veterans' Appeals

(Argued February 13, 2018                                                             Decided August 10, 2018)

      Christian A. McTarnaghan was on the brief, with April Donahower, both of Providence,
Rhode Island, for the appellant.

       Nathan P. Kirschner, with whom Meghan Flanz, Interim General Counsel; Mary Ann
Flynn, Chief Counsel; Carolyn F. Washington, Deputy Chief Counsel, were on the brief, all of
Washington, D.C., for the appellee.

         Before GREENBERG, ALLEN, and TOTH, Judges.

       GREENBERG, Judge, filed the opinion of the Court. TOTH, Judge, filed a dissenting
opinion.

         GREENBERG, Judge: The appellant, Wolfgang A. Petermann, appeals through counsel
that part of a February 11, 2016, Board of Veterans' Appeals (Board) decision that declined to refer
the appellant's service-connected diabetes mellitus (diabetes), rated at 40% disabling, for
extraschedular consideration.1 Record (R.) at 2-13. On June 29, 2017, the Court issued a single-
judge decision vacating that part of the February 11, 2016, decision on appeal and remanding the
matter for readjudication. See Petermann v. Shulkin, No. 16-1093, 2017 WL 2805880, at *3 (U.S.
Vet. App. June 29, 2017) (mem. dec.). On July 20, 2017, the Secretary filed a motion for single-
judge reconsideration, or in the alternative, panel review. This matter was submitted for panel

         1
           The Board also granted a 40% disability rating, but no higher for the appellant's service-connected diabetes
on a schedular basis. To the extent this finding is favorable, the Court will not disturb it. See Medrano v. Nicholson,
21 Vet.App. 165, 170 (2007). The appellant does not challenge the schedular determination, and the Court deems
this matter abandoned. See Pederson v. McDonald, 27 Vet.App. 276, 285 (2015) (en banc) (holding that, where an
appellant abandons a claim, the Court will not address it). The Board also remanded the matter of entitlement to an
initial compensable rating for nephropathy with hypertension. That matter is not currently before the Court. See
Hampton v. Gober, 10 Vet.App. 481, 482 (1997).
consideration and oral argument was held.         The Court will withdraw the June 29, 2017,
memorandum decision and issue this decision in its stead. Because the Board failed to provide an
adequate statement of reasons or bases for denying referral for extraschedular consideration of the
appellant's service-connected diabetes, the Court will vacate that part of the February 2016
decision on appeal and remand the matter for readjudication.

                                                 I.
       The appellant served on active duty in the U.S. Army from September 1988 to September
2010, primarily as an intelligence officer. R. at 136. During service he attained the rank of
lieutenant colonel and was awarded the Legion of Merit among other commendations. R. at 136.
At his July 2010 predischarge examination, the appellant reported suffering from diabetic
ketoacidosis. R. at 234. The appellant stated that he experienced hypoglycemic reactions and
required hospital treatment on average at least once a year. Id. He described tingling and
numbness in his hands resulting from low blood sugar. Id. The examiner noted that "the insulin
used by claimant is Apidra pump administered continuously and [t]he insulin used by claimant is
Symalyn administered 3 times per day." Id.
       In May 2011, the appellant was granted service connection for diabetes, and awarded a
20% disability rating. R. at 213.
       In October 2015, the appellant testified at a Board hearing that he had not been hospitalized
the prior year for hypoglycemic reactions, but that he had been treated by a paramedic in 2010. R.
at 78. He added that he sought ongoing treatment for his diabetes, which included communicating
with his physician by email and fax, and speaking regularly with the physician on the telephone.
R. at 79.
       In February 2016, the Board issued the decision currently on appeal, granting a 40% initial
disability rating, but no higher, for diabetes. R. at 2-13. In reaching this determination, the Board
found that the appellant's diabetes "has been productive of insulin, restricted diet, and regulation
of activities." R. at 3. The Board denied a higher rating on a schedular basis, in relevant part,
because it found that
       the evidence of record fails to demonstrate that there is any evidence of [diabetes]
       requiring insulin, restricted diet, and regulation of activities with episodes of
       ketoacidosis or hypoglycemic reactions requiring one or two hospitalizations per

                                                 2
        year or twice a month visits to diabetic care provider, plus complications that would
        not be compensable if separately evaluated.

R. at 7 (emphasis in original).      The Board declined to refer the matter for extraschedular
consideration because it found that the
        the manifestations of the [v]eteran's [diabetes] are contemplated by the schedular
        criteria. The criteria practicably represent the average impairment in earning
        capacity resulting from the [v]eteran's service-connected [diabetes] such that he is
        adequately compensated for "considerable loss of working time from exacerbations
        or illnesses proportionate to the severity of the several grades of disability."

R. at 9 (citing 38 C.F.R. § 4.1 (2015)). The appellant was found to be competent and
credible to testify regarding "the effects of his current symptoms of his [diabetes] on his
daily life." R. at 8.

                                                 II.
        The appellant argues that the Board's finding that all his diabetic symptoms were
contemplated by the assigned 40% disability rating, is contrary to the facts and misinterprets the
extraschedular referral analysis. Appellant's Brief at 6-11. The appellant's management of his
diabetes required frequent communication with a physician and the use of an insulin pump,
symptoms that are contemplated by the higher 60% and 100% disability rating criteria under
Diagnostic Code (DC) 7913. Id. The appellant acknowledges that a claimant may not attain a
higher rating by more nearly approximating that rating under DC 7913 because of its successive
criteria. See id. at 10 (citing Tatum v. Shinseki, 23 Vet.App. 152 (2009); Camacho v. Nicholson,
21 Vet.App. 360 (2007)).       He argues that the severity of his diabetes is not adequately
contemplated by his existing rating and extraschedular referral is warranted to consider his
uncompensated symptoms. Id.
        The Secretary responds that the Board did not err in declining to refer the appellant's
service-connected diabetes for extraschedular consideration. Secretary's Brief at 4. According to
the Secretary, the relevant question when determining whether the first prong of the Thun v. Peake,
22 Vet.App. 111 (2008) analysis is met is whether the manifestations of a disability are
contemplated by the criteria of the entire DC at issue, not whether the manifestations of a disability
are contemplated by the criteria of the particular rating assigned.          Id. at 8-11.    Because
§ 3.321(b)(1), title 38, Code of Federal Regulations, allows for an extraschedular evaluation

                                                  3
"where the schedular evaluations are found to be inadequate," the Government contends, the
adequacy of an assigned rating is measured against "multiple available evaluations rather than the
singular evaluation that is assigned." Secretary's Motion for Reconsideration at 3 (emphasis in
original). It is the Secretary's position that allowing the appellant extraschedular referral for
diabetes based on symptoms contemplated at higher ratings of DC 7913 would "eviscerate" the
Court's holding in Camacho regarding the successive nature of the criteria under this DC and the
requirements to receive a schedular rating under this DC. Secretary's Brief at 11.

                                                III.
       Under Diagnostic Code (DC) 7913 for diabetes, the rating criteria for a 20% disability
rating require "insulin and restricted diet, or; oral hypoglycemic agent and restricted diet." 38
C.F.R. § 4.119, DC 7913 (2017). A 40% disability rating is assigned for diabetes, which
"[r]equire[s] insulin, restricted diet, and regulation of activities." Id. A 60% disability rating
requires "insulin, restricted diet, and regulation of activities with episodes of ketoacidosis or
hypoglycemic reactions requiring at least three hospitalizations per year or twice a month visits to
a diabetic care provider, plus complications that would not be compensable if separately
evaluated." Id. A 100% disability rating is warranted when
       [r]equiring more than one daily injection of insulin, restricted diet, and regulation
       of activities, (avoidance of strenuous occupational and recreational activities) with
       episodes of ketoacidosis or hypoglycemic reactions requiring at least three
       hospitalizations per year or twice a month visits to a diabetic care provider, plus
       either progressive loss weight and strength or complications that would be
       compensable if separately evaluated.

Id. The rating criteria under DC 7913 are successive and therefore, to establish a given disability
rating, all the rating criteria for that and for lower ratings must be met. See Camacho, 21 Vet.App.
360.
       "The goal of the entire rating process is to appropriately compensate veterans." King v.
Shulkin, 29 Vet.App. 174, 179 (2017). As of the date of the February 2016 Board decision here at
issue, VA regulation provided that for exceptional cases,
       where the schedular evaluations are found to be inadequate, the Under Secretary
       for Benefits or the Director, Compensation and Pension . . . is authorized to approve
       on the basis of the criteria set forth in this paragraph an extra-schedular evaluation
       commensurate with the average capacity impairment due exclusively to the service-
       connected disability or disabilities. The governing norm in these exceptional cases

                                                 4
         is: A finding that the case presents such an exceptional or 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.

38 C.F.R. § 3.321(b)(1) (2015).2
         Determining whether referral for extraschedular consideration is warranted requires a
"comparison between the level of severity and symptomatology of the claimant's service-connected
disability with the established criteria found in the rating schedule for that disability." Thun, 22
Vet.App. at 115 (emphasis added). The Court held in King that "the availability of higher
schedular ratings plays no role in an extraschedular analysis and it is inappropriate for the Board
to deny extraschedular referral on this basis." 29 Vet.App at 181. This was a general holding
concerning the relationship between schedular and extraschedular rating. The Court provided the
following relevant hypothetical as a general example:
         [A]ssume that a veteran has a disability that awards compensation at a 30% rating
         for veterans with symptoms "a" and "b." Assume also that this disability is awarded
         a 50% rating for veterans with symptoms "a," "b," "x," and "z." Now presume a
         veteran is before the Board who is rated at 30% and has sufficient medical evidence
         exhibiting symptoms "a," "b," and "x" but not "z." Under the Board's logic, no
         matter how significantly that veteran's earning ability were impaired, the Board
         would be permitted to grant the veteran only a 30% rating and deny referral for
         extraschedular consideration because, as it found here, the rating criteria "provided
         for higher ratings for more severe symptoms." Such a finding, however, would
         leave the veteran entirely uncompensated for symptom "x" with no recourse to
         extraschedular consideration because symptom "x" is contemplated by a higher
         schedular rating.

Id. at 182. "This example is precisely the situation § 3.321(b)(1) was created to address," id., and
is nearly identical to the facts presented here.3

         2
           VA recently promulgated a final rule, effective January 8, 2018, amending § 3.321(b)(1) so that the
extraschedular analysis no longer requires consideration of the collective impact of service-connected disabilities.
See Department of Veterans Affairs, Extra-Schedular Evaluations for Individual Disabilities, 82 Fed. Reg. 57,830
(Dec. 8, 2017). This amendment does not affect our analysis of the matters discussed in this opinion. The Court has
not yet determined whether the amendment to § 3.321(b)(1) applies to cases pending before it or whether the
amendment did more than eliminate the requirement under Johnson v. McDonald, 762 F.3d 1362 (Fed. Cir. 2014) that
the Board consider the collective impact of a veteran's disability. We do not address these issues today.
          3
            To be clear, the Court does not merely follow King blindly. The fundamental issue in King, the role of
higher schedular ratings in an extraschedular analysis, is also the fundamental premise here. It is true this matter
involves successive ratings, but King's principle is universal to the extraschedular analysis. Our dissenting colleague
asserts the King hypothetical discussed above was merely dicta. See infra at 7-8. We agree in the strict sense that it
did not describe the precise facts in King. But this appeal presents that exact situation. As explained above, we have
applied the holding in King to the facts present in this case. As such, our holding here today makes the question of

                                                          5
         The Court disagrees with the Secretary that the appropriate comparison in an
extraschedular analysis is between the type of symptoms a veteran suffers and the criteria of the
entire DC at issue. See Secretary's Brief at 11. Such an interpretation solely contemplates mere
symptomatology and eliminates in extraschedular referral analysis the requirement to compare the
type of symptoms the appellant suffers from with the criteria of his assigned rating. See Thun, 22
Vet.App at 115. The Court also disagrees that applying the proper extraschedular analysis to DC
7913 "eviscerates" caselaw regarding the successive nature of this DC. See Secretary's Brief at
11. The Secretary's assertion simply conflates the concepts of schedular and extraschedular
disability ratings: it is not logically possible for these distinct rating avenues to overlap to the extent
the Secretary suggests. Nothing in today's holding changes how the schedular analysis operates.
For example, the rating schedule retains its character, including the inapplicability of 38 C.F.R. §
4.7.4 Thus, because of the successive nature of the rating schedule, there will be some symptoms
(as our hypothetical showed) that will not be addressed in a schedular rating. And that remains
the case. But that conclusion does not say anything about the role an extraschedular analysis might
play in addressing those symptoms. The Secretary acknowledges § 3.321's "gap filling function"
but argues that "it is not true that Appellant has shown there is any gap to be filled here." Id. But
the gap to be filled comes from the unique nature of successive ratings and precisely because the
successive schedular rating retains its attributes.                  Thus, applying King's logic here allows
§ 3.321(b)(1) to fill that gap. Any failure to consider symptoms not contemplated by a claimant's
disability rating is contrary to law and potentially deprives a veteran of compensation.

                                                               IV.
         The Court therefore agrees with the appellant that the Board erred as a matter of law in
finding that all his diabetic symptoms were contemplated by the assigned 40% disability rating.
Because the rating criteria for diabetes are successive, see Camacho, 21 Vet.App. 360, the
appellant's 40% disability rating solely contemplates his insulin use, his restricted diet, and the
regulation of his activities. See 38 C.F.R. § 4.119, DC 7913. The appellant requires multiple

dicta and King's example academic.
         4
            In a traditional schedular analysis, veterans benefit from the availability of § 4.7, which provides for the
automatic assignment of a higher schedular rating if a veteran's "disability picture more nearly approximates the
criteria required for that [higher] rating" when "there is a question as to which of two evaluations shall be applied."
See also Tatum, 23 Vet.App. at 156.

                                                           6
daily injections of insulin as well as an insulin pump, diabetic management that is contemplated
by a 100% disability rating. R. at 234, see C.F.R. § 4.119, DC 7913. The appellant has testified
that he has had ketoacidosis and hypoglycemic episodes as well as diabetic complications, and the
Board found him both competent and credible to describe "the effects of his current symptoms of
his [diabetes] on his daily life." R. at 8. These episodes are potentially relevant to a 60% disability
rating. See id. The Board failed to explain how a 40% schedular rating adequately compensates
the appellant's service-connected disability.
       Because the Board found that the appellant's diabetes caused a "considerable loss of
working time," the Court may not deem this error harmless. 38 U.S.C. § 7261(b)(2); see also
Yancy v. McDonald, 27 Vet.App. 484, 494-95 (2016) (holding that if either Thun element is not
met, then referral for extraschedular is not appropriate). Remand is required for the Board to
provide an adequate statement of reasons or bases for its extraschedular consideration. See Gilbert
v. Derwinski, 1 Vet.App. 49, 56-57 (1990) (finding that Congress mandated, by statute, that the
Board provide a written statement of reasons or bases for its conclusion that is adequate to enable
the appellant to understand the precise basis for the Board's decision, and to facilitate review in
this Court).
       The Court will not address the appellant's remaining arguments pertaining to the remanded
matter. See Dunn v. West, 11 Vet.App. 462, 467 (1998). On remand, the appellant may present,
and the Board must consider, any additional evidence and arguments. See Kay v. Principi,
16 Vet.App. 529, 534 (2002). This matter is to be provided expeditious treatment. See 38 U.S.C.
§ 7112; see also Hayburn's Case, 2 U.S. (2 Dall.) at 410, n. ("[M]any unfortunate and meritorious
[veterans], whom Congress have justly thought proper objects of immediate relief, may suffer
great distress, even by a short delay, and may be utterly ruined, by a long one.").

                                                  V.
       The Secretary's motion for reconsideration or in the alternative, panel review, is granted,
and the June 29, 2016, memorandum decision is WITHDRAWN. For the following reason, that
part of the February 11, 2016, Board decision on appeal is VACATED and the matter is
REMANDED for readjudication.

                                                  7
        TOTH, Judge, dissenting: Mr. Petermann has diabetes mellitus. VA's rating schedule has
a diagnostic code (DC) for diabetes mellitus. 38 C.F.R. § 4.119, DC 7913 (2017). Mr. Petermann's
diabetes manifestations do not differ in type or exceed in severity those listed in DC 7913. The
majority holds that the Board erred in denying referral for extraschedular consideration because
the specific 40% rating assigned here doesn't contemplate some of these manifestations. Ante at 5-
6. However, because it's clear from the cumulative language and structure of DC 7913 that each
rating contemplates the successive criteria of the whole DC, I respectfully dissent.
        VA rules generally provide that, even if a disability does not manifest all the criteria in a
specific rating within a given DC, the higher rating will be assigned if a veteran's disability picture
more nearly approximates the criteria in that rating than in the lower rating, because real-life
disabilities may not be exactly as DCs describe them. See Tatum v. Shinseki, 23 Vet.App. 152,
155-57 (2009). These rules, however, don't apply in the case of a cumulative DC such as 7913.
See Middleton v. Shinseki, 727 F.3d 1172, 1178 (Fed. Cir. 2013). That's because the "enumerated
elements" of a rating in DC 7913 "are part of a structured scheme of specific, successive,
cumulative criteria for establishing a disability rating" where a higher rating includes the same
criteria as a lower rating plus distinct new criteria. Id. In other words, DC 7913 is crafted
holistically: Each rating must be read with an eye towards the ratings above and below it. So, even
if the 40% rating doesn't explicitly list a criterion—for example, episodes of ketoacidosis requiring
visits to a diabetic care provider—it can't be said that the rating fails to contemplate that criterion.
        This, it should be noted, is not inconsistent with our holding in King v. Shulkin, 29 Vet.App.
174 (2017), that the Board may not deny extraschedular referral simply because a higher schedular
rating exists. The hypothetical discussion in King, however, remains dicta, see Kirtsaeng v. John
Wiley & Sons, Inc., 568 U.S. 519, 548 (2013), that isn't persuasive in this context. Thus, with
respect, I dissent.

                                                   8