Johnson v. McDonald, 762 F.3d 1362 (August 6, 2014)
38 C.F.R. § 3.321(b)(1), REFERRAL FOR EXTRASCHEDULAR CONSIDERATION
Held: The plain language of 38 C.F.R. § 3.321(b)(1) entitles a veteran to referral for extraschedular consideration based on the combined effect of multiple service-connected disabilities.
This case reverses an en banc opinion of the CAVC that found the language of 38 C.F.R. § 3.321(b)(1) ambiguous and thus deferred to the Secretary’s interpretation. The Federal Circuit determined that the language was not ambiguous and that deference to the agency’s interpretation was not warranted. The veteran had sought increased ratings for his service-connected heart disease and bilateral knee condition. The RO denied his claims and the Board affirmed, also denying referral for extraschedular consideration.
On appeal to the CAVC, a majority affirmed, finding that the language of the regulation was ambiguous and deferring to the Secretary’s interpretation. The Federal Circuit reversed, finding that the plain language of the regulation was clear, consistent with its authorizing statute (38 U.S.C. § 1155), and that it specifically refers to “schedular evaluations” (plural) and “disability or disabilities.” 762 F.3d at 1365. The Court rejected the Secretary’s argument that the term “disability picture” in the regulation limits consideration “to the impact of a single disability rather than multiple disabilities,” finding that the clear language “refers to the collective impact of a veteran’s ‘service-connected disability or disabilities.’” Id. at 1365-66. The Court also rejected the Secretary’s argument that VA’s interpretation of 38 C.F.R. § 3.321(b)(1) would be duplicative of 38 C.F.R. § 4.16, which allows for a total rating based on unemployability. Id. at 1366. The Court held that § 3.321(b)(1) “performs a gap-filling function” in that “[i]t accounts for situations in which a veteran’s overall disability picture establishes something less than total unemployability, but where the collective impact of a veteran’s disabilities are nonetheless inadequately represented.” Id. In assessing the policy justification for its interpretation, the Court stated that “[i]t is not difficult to imagine that, in many cases, the collective impact of all of a veteran’s disabilities could be greater than the sum of each individual disability’s impact.” Id.