James R. Cook, Claimant-Appellant v. Anthony J. Principi, Secretary of Veterans Affairs

James R. Cook appeals the decision of the United States Court of Appeals for Veterans Claims ("Veterans Court") in Cook v. West, No. 98-1801, 2000 WL 719866 (Table) (Vet.App. June 1, 2000). In its decision, the Veterans Court upheld the ruling of the Board of Veterans Appeals ("Board") that the alleged failure of the Veterans' Administration's1 Regional Office ("RO") to give Mr. Cook a proper medical examination before denying his 1952 claim for service-connected benefits did not constitute clear and unmistakable error ("CUE") under 38 U.S.C. § 5109A. See id. at *2-*5. The Veterans Court also rejected Mr. Cook's argument that, under Hayre v. West, 188 F.3d 1327 (Fed.Cir. 1999), the RO's alleged failure to give him a proper medical examination rendered the RO's denial of service connection non-final. Cook, 2000 WL 719866, at *5. Subsequently, a split panel of this court affirmed the decision of the Veterans Court. Cook v. Principi, 258 F.3d 1311 (Fed.Cir.2001), vacated, 275 F.3d 1365 (Fed.Cir.2002). The panel (Mayer, C.J., Friedman, S.J., Rader, J.) held that the Veterans Court did not err in ruling that the RO's alleged violation of the duty to assist could not serve as the basis for a claim of CUE. At the same time, the panel held that the Hayre exception to the rule of finality did not apply in Mr. Cook's case. Chief Judge Mayer dissented on the latter point, stating that "a breach of the duty to assist the veteran by failing to provide a proper medical examination vitiates the prior decision of the Regional Office for the purpose of direct appeal." Cook, 258 F.3d at 1316 (Mayer, C.J., dissenting).

Mr. Cook petitioned for rehearing en banc. In so doing, he argued that, under a proper application of Hayre, a showing that the VA violated any statutory or regulatory duty towards a veteran vitiates the finality of a decision regarding the veteran's entitlement to benefits. On January 4, 2002, we granted Mr. Cook's petition for rehearing en banc and vacated the panel opinion. Cook, 275 F.3d at 1366. For purposes of the en banc proceedings, we asked the parties to brief the following two questions:

1. Whether this court's decision in Hayre v. West, 188 F.3d 1327 (Fed. Cir.1999), should be overruled insofar as that case holds that the existence of "grave procedural error" renders a decision of the Veterans' Administration non-final?

2. Whether, if Hayre is overruled in this respect, a failure of the Secretary to assist the veteran under the law and regulations applicable at the time (affirmatively demonstrated by the record before the adjudicator in the particular case) can constitute clear and unmistakable error ("CUE") under 38 U.S.C. § 5109A? See Roberson v. Principi, 251 F.3d 1378 (Fed.Cir.2001).

We answer the en banc questions as follows: First, to the extent that it created an additional exception to the rule of finality applicable to RO decisions, Hayre is overruled. Second, a failure of the Secretary to assist a veteran under applicable law and regulations cannot constitute CUE. In Parts I and II of this opinion, respectively, we address the first and second en banc questions. In Part III, we consider Mr. Cook's appeal in light of our answers to the en banc questions. Doing so, we affirm the decision of the Veterans Court.

Whether this court's decision in Hayre v. West, 188 F.3d 1327 (Fed.Cir.1999), should be overruled insofar as that case holds that the existence of "grave procedural error" renders a decision of the Veterans' Administration non-final?

If a veteran fails to appeal from an RO decision concerning a claim, the decision becomes "final," and "the claim will not thereafter be reopened or allowed, except as may otherwise be provided by regulations not inconsistent with this title." 38 U.S.C. § 7105(c) (2000). Principles of finality and res judicata apply to agency decisions that have not been appealed and have become final. See Astoria Fed. Savs. & Loan Ass'n v. Solimino, 501 U.S. 104, 107-08, 111 S.Ct. 2166, 115 L.Ed.2d 96 (1991) (allowing the application of res judicata to administrative agency determinations that have attained finality); Routen v. West, 142 F.3d 1434, 1437 (Fed.Cir.1998) (applying finality and res judicata to VA decisions). As we observed in Routen, "[u]nless otherwise provided by law, the cases are closed and the matter is thus ended." Routen, 142 F.3d at 1438.

There are, however, two statutory exceptions to the rule of finality. First, pursuant to 38 U.S.C. § 5108, the Secretary must reopen a claim "[i]f new and material evidence [regarding the claim] is presented or secured." Second, a decision "is subject to revision on the grounds of clear and unmistakable error." 38 U.S.C. §§ 5109A (decision by the Secretary) & 7111 (decision by the Board). These are the only statutory exceptions to the finality of VA decisions.2

In Hayre, the veteran filed a claim in 1972 for service connection for a "nerve problem." 188 F.3d at 1329. Hayre stated on his claim form that he had been treated while in service for "nerves" and that he had "talked to [a] psychiatrist," and he requested that the RO obtain his service medical records ("SMRs"). Id. The RO sent a request for the SMRs to the National Personnel Records Center but did not receive them. Id. The RO made no further attempts to obtain the records and rejected Hayre's claim without notifying him that his SMRs had not been obtained. The RO told Hayre in its denial notice that "we don't find in your medical records or elsewhere any evidence of a nervous condition." Id.

In 1992, Hayre again applied for service-connected disability. Following a VA examination, he was awarded service connection and a disability rating for post-traumatic stress disorder. In 1993, seeking an earlier effective date for the award of service connection, Hayre brought a claim challenging the RO's 1972 decision as "clearly erroneous." Hayre argued that the RO had not obtained the psychiatric SMRs that he had requested and had failed to afford him a VA examination. Id. The RO denied the claim, and the Board and the Veterans Court affirmed, treating the claim as a CUE claim.3 Hayre appealed to us.

On appeal, we reversed and remanded. We first held that an RO's single unsuccessful request for pertinent SMRs that are specifically sought by a claimant does not fulfill the RO's duty to assist the veteran in developing facts pertinent to his claim.4 Id. at 1331-32. However, relying on Bustos v. West, 179 F.3d 1378, 1381 (Fed.Cir.1999), we held that such a breach of the duty to assist cannot amount to CUE. Hayre, 188 F.3d at 1333.

We next held that the RO's 1972 decision was not final for purposes of appeal. In so doing, we created a third exception to the rule of finality in addition to the two statutory exceptions created by Congress. Specifically, we held that "where there is a breach of the duty to assist in which the VA failed to obtain pertinent SMRs specifically requested by the claimant and failed to provide the claimant notice explaining the deficiency, the claim does not become final for purposes of appeal." Id. at 1334. In reaching this holding, we stated that "[i]n cases of grave procedural error, ... the [Veterans Court] has consistently held that RO or Board decisions are not final for purposes of direct appeal." Id. at 1333 (citing Tablazon v. Brown, 8 Vet.App. 359, 361 (1995); Hauck v. Brown, 6 Vet.App. 518, 519 (1994); Kuo v. Derwinski, 2 Vet. App. 662, 666 (1992); Ashley v. Derwinski, 2 Vet.App. 307, 311 (1992)). We explained that "[a] breach of the duty to assist in which the VA failed to obtain pertinent SMRs specifically requested by the claimant and failed to provide the claimant with notice explaining the deficiency is a procedural error of, at least, comparable gravity [to the errors in the four cited Veterans Court cases] that vitiates the finality of an RO decision for purposes of direct appeal." Id. We elaborated on the importance of providing adequate notice to the veteran:

Notice to the claimant explaining the failure to obtain pertinent and specifically requested SMRs is ... essential to insuring that the agency of original jurisdiction ("AOJ") will adequately develop a veteran's claim before deciding it on the merits. Furthermore, if the claimant is to effectively appeal his or her case, the claimant must be cognizant of all the evidence considered by the AOJ. Where so much of the evidence in VA adjudications is circumstantial at best, notice explaining the failure to obtain pertinent and specifically requested SMRs is critical to ensuring a proper award for benefits and an effective right to judicial review.

Id. at 1334. We thus concluded that if the Veterans Court "finds that the RO breached the duty to assist [Hayre] in 1972, then the 1972 RO decision is not final for purposes of direct appeal."5 Id. at 1335. We remanded the case to the Veterans Court for further proceedings consistent with our opinion.

The government contends that we should overrule the holding of Hayre that the finality of a VA decision is vitiated if the VA commits a "grave procedural error" when adjudicating a claim. The government argues that the Hayre decision is not supported by statute or legislative history. For his part, Mr. Cook argues that the Hayre decision is consistent with Congress' intent to create a system where the veteran is fully and sympathetically assisted in the development of his claims before the VA makes a decision on the merits. He further contends that the holding in Hayre recognizes the need for a mechanism to allow a veteran to collaterally challenge a VA decision where the veteran later discovers that the VA breached its duty to assist him in developing his claim.

We agree with the government that Hayre should be overruled. The statutory scheme provides only two exceptions to the rule of finality. At the same time, we see nothing in the legislative history of the pertinent statutes — 38 U.S.C § 5109A (CUE challenge to an RO decision), 38 U.SC. § 7111 (CUE challenge to a Board decision), 38 U.S.C. § 5108 (reopening of a claim based on new and material evidence), and former 38 U.S.C. § 5107(a) (recognizing the VA's duty to assist the claimant in the development of his claims) — that indicates that Congress intended to allow additional exceptions to the finality of VA decisions based upon "grave procedural error."

The purpose of the rule of finality is to preclude repetitive and belated readjudication of veterans' benefit claims. Congress knew how to create exceptions to the finality of VA decisions, and it explicitly did so in two circumstances. It enacted the statutes codifying CUE challenges (sections 5109A and 7111) and the statute allowing claims based on new and material evidence (section 5108). Applying the familiar canon of expressio unius est exclusio alterius, we conclude that Congress did not intend to allow exceptions to the rule of finality in addition to the two that it expressly created.6 See, e.g., Leatherman v. Tarrant County Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 168, 113 S.Ct. 1160, 122 L.Ed.2d 517 (1993) (applying the expressio unius est exclusio alterius canon in concluding that because Federal Rule of Civil Procedure 9(b) imposes a particularity requirement for pleading two specific types of actions, such particularity is not required for pleading other non-enumerated types of actions); BMW Mfg. Corp. v. United States, 241 F.3d 1357, 1361 (Fed. Cir.2001) ("It thus appears that Congress expressly provided for the exemption of certain merchandise from the [Harbor Maintenance Tax]. Where it did not so provide, it is reasonable to conclude that it did not so intend.").

In support of its holding that "grave procedural error" vitiates the finality of a VA decision, the Hayre panel relied on the legislative history of the Veterans' Benefits Amendments of 1989, Pub.L. No. 101-237, § 115(a)(1), 103 Stat.2062, 2065 (1989), which added sections 3004(a)(1) and (2) to title 38 of the United States Code (currently codified as amended at 38 U.S.C. § 5104(a) and (b)). Hayre, 188 F.3d at 1333-34. The relevant provision, section 5104(b), provides that when the VA denies a benefit, the claimant must be provided with a statement of the reasons for the decision and a summary of the evidence considered by the VA; it was effective with regard to VA decisions issued after January 31, 1990. Pub.L. No. 101-237, § 115(b), 103 Stat. at 2066. Section 5104(b) was intended to remedy a lack of information in VA notices denying claims. S.Rep. No. 101-126, at 294-97 (1989), reprinted in 1989 U.S.C.C.A.N. 1469, 1700-03. There is nothing in the legislative history relating to section 5104(b), however, to indicate that Congress intended that the lack of information in a pre 1990 VA decision could support a claim to reopen a final decision.

As noted above, the Hayre panel also relied on four Veterans Court decisions involving "grave procedural error" in support of its conclusion that the VA's single request for Hayre's SMRs and its failure to notify him of its inability to obtain the records vitiated the finality of the 1972 RO decision. Hayre, 188 F.3d at 1333. We do not think, however, that these cases provide support for the creation of a third exception to the finality of an unappealed VA decision.

An understanding of the process for obtaining disability benefits will help put the four Veterans Court decisions upon which the Hayre panel relied in proper perspective. We outlined the process in Maggitt v. West, 202 F.3d 1370, 1375 (Fed.Cir. 1998). A veteran may appeal an adverse RO decision to the Board. Appellate review is initiated by the veteran filing a notice of disagreement ("NOD") with the VA. See 38 U.S.C. § 7105(a).7 The NOD is a written communication from the veteran expressing dissatisfaction or disagreement with an adjudicative decision of the VA. See 38 C.F.R. § 20.201; Collaro v. West, 136 F.3d 1304, 1308 (Fed.Cir.1998) (explaining that disagreement between the VA and the veteran over legal entitlement to a particular benefit may form the basis of an NOD). Once the VA receives the veteran's NOD, it must prepare a "statement of the case." See 38 U.S.C. § 7105(d)(1). The statement of the case "frames the [VA's] view of the case, and is meant to assist the veteran in gaining every benefit that can be supported in law." Maggitt, 202 F.3d at 1375. The veteran is required to file a "formal appeal" with the Board within sixty days from the date the statement of the case is mailed. See 38 U.S.C. § 7105(d)(3) ("The appeal should set out specific allegations of error of fact or law, such allegations related to specific items in the statement of the case."); 38 C.F.R. § 20.202. After the Board renders a decision on the merits of the veteran's request for benefits, the veteran may appeal the Board's decision to the Veterans Court. See 38 U.S.C. § 7252(a). A veteran has 120 days from the date of receipt of a Board decision to appeal to the Veterans Court. See 38 U.S.C. § 7266.

In each of the cases cited by the Hayre panel, the Veterans Court held that the time for appealing either an RO or a Board decision did not run where the VA failed to provide the veteran with information or material critical to the appellate process just described. See Tablazon v. Brown, 8 Vet.App. 359 (1995) (because the VA did not furnish the veteran with a statement of the case, he was unable to file a "formal appeal" with the Board and the RO rating decision did not become final); Hauck v. Brown, 6 Vet.App. 518 (1994) (because the veteran never received notification of claim denial in accordance with 38 U.S.C. § 7105(b)(1), the one-year period in which to file an NOD did not begin to run); Kuo v. Derwinski, 2 Vet.App. 662 (1992) (the veteran was not furnished with a statement of the case; therefore, the period in which to lodge a "formal appeal" with the Board did not begin to run); Ashley v. Derwinski, 2 Vet.App. 307 (1992) (since the Board did not mail its decision in accordance with 38 U.S.C. § 7104(e) and 38 U.S.C. § 7266, the 120-day period within which to appeal to the Veterans Court did not begin to run).

Tablazon, Hauck, Kuo, and Ashley involved straightforward application of 38 U.S.C. §§ 7105(b)(1), 7105(d)(3), and 7266. Section 7105(b)(1) provides that the one-year period which the veteran has to file an NOD does not begin to run until the date of the mailing of notice of the claim denial to the veteran. Section 7105(d)(3) makes the furnishing of a statement of the case the event that triggers the veteran's obligation to file a "formal appeal" with the Board, while pursuant to section 7266, the 120 day period for appealing to the Veterans Court from a decision of the Board does not begin to run until the Board's decision is mailed to the veteran. In contrast, there is no statutory basis for the Hayre panel's holding that a breach of the duty to assist the veteran in developing facts pertinent to his claim would vitiate the finality of an RO decision.

Furthermore, in Tablazon, Hauck, Kuo, and Ashley, the VA's failure to comply with statutory procedural requirements regarding notification of benefit determinations had the effect of extinguishing the claimant's right to appeal an adverse decision. In Hayre's case, however, regardless of any failure of the duty to assist in the development of evidence, Hayre was afforded notice of the RO decision denying his claim for service connection. If he had filed an NOD with respect to the 1972 administrative decision, the VA would have been required to provide him with a statement of the case, which would have notified him of the basis for the denial of his claim. See Pub.L. No. 87-666, 76 Stat. 553 (1962) (adding statement-of-the-case requirement at 38 U.S.C. § 4005, currently codified as amended at 38 U.S.C. § 7105). Thus, the VA's failure to notify Hayre that it had been unsuccessful in obtaining his SMRs did not preclude him from challenging the administrative decision denying his claim and raising the issue of the duty to assist after he was notified of the basis for the decision.8

In summary, a breach of the duty to assist the veteran does not vitiate the finality of an RO decision. We therefore overrule Hayre to the extent that it created an additional exception to the rule of finality applicable to VA decisions by reason of "grave procedural error." If additional exceptions to the rule of finality in 38 U.S.C. § 7105(c) are to be created, if is for Congress, not this court, to provide them. As we discuss next, however, to the extent it stands for the proposition that a breach of the duty to assist cannot constitute CUE, Hayre remains good law.9

Whether, if Hayre is overruled in this respect, a failure of the Secretary to assist the veteran under the law and regulations applicable at the time (affirmatively demonstrated by the record before the adjudicator in the particular case) can constitute clear and unmistakable error ("CUE") under 38 U.S.C. § 5109A? See Roberson v. Principi, 251 F.3d 1378 (Fed.Cir.2001).

CUE provides a means for collateral attack on a final decision of an RO. This concept, once solely grounded in regulation, see 38 C.F.R. § 3.105, is now also governed by statute. In 1997 Congress enacted Pub.L. No. 105-111, 111 Stat. 2271 (1997), which is codified at 38 U.S.C. §§ 5109A and 7111. Section 5109A covers claims of clear and unmistakable error at the RO level, while section 7111 covers claims of clear and unmistakable error at the Board level.10

Although the two provisions are quite similar, only section 5109A, pertaining to review of an RO decision, is relevant to our inquiry. Section 5109A states in relevant part that:

(a) A decision by the Secretary under this chapter is subject to revision on the grounds of clear and unmistakable error. If evidence establishes the error, the prior decision shall be reversed or revised.

(b) For the purposes of authorizing benefits, a rating or other adjudicative decision that constitutes a reversal or revision of a prior decision on the grounds of clear and unmistakable error has the same effect as if the decision had been made on the date of the prior decision.

The regulation from which section 5109A was derived, and which remains in place today, provides that final determinations of the RO will be accepted as correct unless CUE is shown. See 38 C.F.R. § 3.105(a). Further, like the statute, the regulation provides for the reversal of decisions found to contain CUE and the retroactive award of benefits to the date of the original decision. Id. The pertinent language in the regulation is as follows: (a) Error. Previous determinations which are final and binding, including decisions of service connection, degree of disability, age, marriage, relationship, service, dependency, line of duty, and other issues, will be accepted as correct in the absence of clear and unmistakable error. Where evidence establishes such error, the prior decision will be reversed or amended. For the purpose of authorizing benefits, the rating or other adjudicative decision which constitutes a reversal of a prior decision on the grounds of clear and unmistakable error has the same effect as if the corrected decision had been made on the date of the reversed decision.

38 C.F.R. § 3.105(a).

The Veterans Court has rendered decisions addressing the meaning of "clear and unmistakable error," as used in the statute and regulation. In Russell v. Principi, the court addressed for the first time the validity of 38 C.F.R. § 3.105. 3 Vet.App. 310 (1992) (en banc). In upholding the validity of the regulation, id. at 314, the court set forth the parameters of a successful claim of CUE:

By its express terms, 38 C.F.R. § 3.105(a) refers to "determinations on which an action was predicated." Therefore, it necessarily follows that a "clear and unmistakable error" under § 3.105(a) must be the sort of error which, had it not been made, would have manifestly changed the outcome at the time it was made.

Id.;12 see also Fugo v. Brown, 6 Vet.App. 40, 44 (1993) ("[E]ven where the premise of error is accepted, if it is not absolutely clear that a different result would have ensued, the error complained of cannot be, ipso facto, clear and unmistakable error."). The requirement that a clear and unmistakable error be one which would have manifestly changed the outcome of the RO's determination was adopted by this court in Bustos. See 179 F.3d at 1381 ("[T]o prove the existence of CUE as set forth in § 3.105(a), the claimant must show that an outcome-determinative error occurred.").

In Russell, the Veterans Court also explained that in order for an error to rise to the level of CUE, the error must have been made on the record as it existed at the time the decision was made. See Russell, 3 Vet.App. at 313-314. According to the court, "[a] determination that there was a `clear and unmistakable error' must be based on the record and the law that existed at the time of the prior AOJ ... decision." Id. (emphasis added). As explained by the Veterans Court in Caffrey v. Brown, 6 Vet.App. 377, 383 (1994), a CUE claim is an attack on a prior judgment that asserts an incorrect application of law or fact. Necessarily, the asserted error must have occurred on the record "as it existed at the time of the disputed adjudication." Id. We extended this interpretation of the regulation to section 5109A in Pierce v. Principi, 240 F.3d 1348, 1354 (2001) ("We ... affirm the court's interpretation of the term `evidence' in § 5109A and [38 C.F.R. § 3.105(a)] as being limited to evidence that was of record at the time the challenged RO decision was made.").

C. Whether a Breach of the Duty to Assist Can Constitute CUE

Mr. Cook urges us to overrule precedent holding that a breach of the duty to assist cannot serve as a basis for CUE. See Hayre, 188 F.3d at 1333 (stating that "a breach [of the duty to assist] is not an error of the sort that should be contemplated in the CUE analysis"); Caffrey, 6 Vet.App. at 384 (stating that "the VA's breach of the duty to assist cannot form a basis for a claim of CUE because such a breach creates only an incomplete rather than an incorrect record"). Mr. Cook advances three arguments in support of his position. First, he contends that requiring the CUE analysis to be conducted on the record as it existed at the time of the original decision is flawed. He argues that the proper interpretation of section 5109A allows for all evidence of error to be considered in reviewing a CUE claim, not just evidence that was a part of the original record. Second, Mr. Cook