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Thun v. Shinseki

July 17, 2009

DENNIS M. THUN, CLAIMANT-APPELLANT,
v.
ERIC K. SHINSEKI, SECRETARY OF VETERANS AFFAIRS, RESPONDENT-APPELLEE.



Appeal from the United States Court of Appeals for Veterans Claims in 05-2066, Chief Judge William P. Greene, Jr.

The opinion of the court was delivered by: Bryson, Circuit Judge.

Published opinion

Before MAYER, RADER, and BRYSON, Circuit Judges.

In most veterans' benefits cases, the Department of Veterans Affairs ("DVA") assigns disability ratings based on a schedule of ratings for specific injuries and diseases. Sometimes, however, the schedular criteria are inadequate to capture the full extent and impact of the veteran's disability. The DVA has provided by regulation that in such an exceptional case the veteran may be eligible for an "extra-schedular" disability rating. 38 C.F.R. § 3.321(b)(1).

This appeal concerns the proper allocation of authority to adjudicate a veteran's entitlement to an extra-schedular disability rating under section 3.321(b)(1) of the DVA's regulations, 38 C.F.R. § 3.321(b)(1). The Court of Appeals for Veterans Claims ("the Veterans Court") held that while the Under Secretary for Benefits and the Director of the Compensation and Pension Service are the only individuals authorized to assign an extra-schedular rating, the DVA regional offices and the Board of Veterans' Appeals may conduct initial screening of disability claims and may refer to the Under Secretary or the Director only those claims that meet two of the three regulatory criteria for extra-schedular consideration. Thun v. Peake, 22 Vet. App. 111 (2008). We affirm.

I.

Appellant Dennis M. Thun served in the United States Marine Corps from April 1966 until April 1972. During his service, he participated in several combat operations in Vietnam. In June of 1999, a DVA examining physician diagnosed Mr. Thun as suffering from post-traumatic stress disorder caused by his combat experience in Vietnam. A DVA regional office granted Mr. Thun service-connected disability status and rated his condition as 10 percent disabling. Mr. Thun continued to press his claim for disability benefits, seeking an increased disability rating and a referral to the Under Secretary for Benefits or the Director of the Compensation and Pension Service for an extra-schedular rating.

In February 2005, the regional office increased Mr. Thun's disability rating to 70 percent but denied the request for extra-schedular consideration. With respect to Mr. Thun's referral request, the regional office found that Mr. Thun did not have any exceptional or unusual symptoms that were not expressly contemplated by the rating schedule for anxiety disorders. As further support for its decision, the regional office cited the absence of any record evidence that the 70 percent rating misrepresented the extent to which Mr. Thun's disability interfered with his employment. On appeal, the Board upheld the denial of Mr. Thun's referral request. The Board was persuaded that Mr. Thun's symptoms were "squarely contemplated by the rating criteria supporting a 70 percent rating." In the alternative, the Board found that there was no evidence in the record of any "marked interference with obtaining and retaining employment."

The Veterans Court sustained the Board's decision as to Mr. Thun's request for extra-schedular consideration. The court began by setting out a three-part test, based on the language of 38 C.F.R. § 3.321(b)(1), for determining whether a veteran is entitled to an extra-schedular rating: (1) the established schedular criteria must be inadequate to describe the severity and symptoms of the claimant's disability; (2) the case must present other indicia of an exceptional or unusual disability picture, such as marked interference with employment or frequent periods of hospitalization; and (3) the award of an extra-schedular disability rating must be in the interest of justice. Under the regulation, the court held that the regional office and the Board have the authority to deny extra-schedular consideration in any case in which they determine that the claim fails either of the first two steps of the test. However, if the regional office or the Board finds that the rating schedule is inadequate and the case presents other factors indicative of an exceptional or unusual disability, the case must be referred to the Under Secretary for Benefits or the Director of the Compensation and Pension Service for a determination of whether an extra-schedular rating should be assigned in the interest of justice. Thun, 22 Vet. App. at 115--17.

After laying out the applicable legal principles, the court turned to the merits of Mr. Thun's appeal. The court affirmed the Board's finding that his case was not exceptional or unusual in light of the schedular criteria for anxiety disorders. With respect to the Board's alternative basis for decision, the court held that the Board had erred by imposing a more demanding standard than was required by the DVA's regulations. The Board had rejected Mr. Thun's referral request for failure to demonstrate any difficulty in "obtaining and retaining employment," even though the DVA's regulations merely require a showing that the disability caused "marked interference" with existing employment. The Veterans Court concluded, however, that the Board's error was harmless because the finding as to the adequacy of the rating schedule was sufficient to sustain the denial of Mr. Thun's referral request. 22 Vet. App. at 117--18.

II.

On appeal, Mr. Thun does not challenge the Veterans Court's articulation of the standard for determining whether a veteran is entitled to an extra-schedular rating pursuant to 38 C.F.R. § 3.321(b)(1). Rather, Mr. Thun's sole contention is that the Veterans Court misinterpreted section 3.321(b)(1) as authorizing the DVA regional offices and the Board to reject a claim for extra-schedular consideration based on their determination that the veteran does not qualify for a referral. Mr. Thun argues that section 3.321(b)(1) requires the DVA regional offices and the Board to refer any case in which they find a "plausible basis" for an extra-schedular rating, leaving to the Under Secretary for Benefits and the Director of the Compensation and Pension Service the task of assessing the merits of the claim.

Section 3.321(b)(1) provides as follows, in pertinent part:

To accord justice . . . 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 unusual disability picture with such related ...


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