National Organization Of Veterans' Advocates, Inc. v. Secretary Of Veterans Affairs

48 F.4th 1307 (F.C. 2022)

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Nature of the Case

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Facts

The government awards disability benefits to veterans by establishing and using a rating schedule. D adopted the schedule to standardize the evaluation of how severely diseases and injuries resulting from military service impair veterans' earning capacity. Ps have petitioned this court under 38 U.S.C. § 502 to review the VA's interpretation of two of these diagnostic codes: DCs 5055 and 5257, both found at 38 C.F.R. § 4.71a. On July 16, 2015, D published the Knee Replacement Guidance. The Guidance stated that D was providing notice of the agency's 'longstanding interpretation of DCs 5051 to 5056' as providing for a 100-percent evaluation 'when the total joint, rather than the partial joint, has been replaced by a prosthetic implant.' D also announced in the Guidance that an 'explanatory note' would be added to 38 C.F.R. § 4.71a stating that the 'term 'prosthetic replacement' in diagnostic codes 5051 through 5056 means a total replacement of the named joint.' In Hudgens, the court held that DC 5055 'does not unambiguously exclude [partial knee] replacements.' The court concluded that D's interpretation of DC 5055 could not be afforded Auer deference for two reasons. D's interpretation 'conflicted' with 'numerous inconsistent rulings by the Board' holding that partial knee replacements could be evaluated under DC 5055. We also held that the Knee Replacement Guidance was a 'post hoc rationalization' 'conveniently adopted to support the Veterans Court's interpretation in the Hudgens case.' The court held that Hudgens's 'interpretation of DC 5055 is permitted by the text of the regulation,' meaning that the court had to apply the pro-veteran canon, and 'resolve any doubt in the interpretation of DC 5055 in his favor.' On November 21, 2016, D informed RO adjudicators of how the agency intended to reconcile our decision in that case with the Knee Replacement Guidance. The Knee Replacement Manual Provision directed RO adjudicators to not evaluate under DC 5055 any claims for partial knee replacements 'filed and decided on or after July 16, 2015.' Claims filed before July 16, 2015, and pending as of that date were to be evaluated under DC 5055 if doing so would be more favorable than evaluating the same claims under another applicable diagnostic code. Claims filed before July 16, 2015, and adjudicated before that date were not to be revised. Four years later, D amended DC 5055 following notice-and-comment to 'clarify VA's intent to provide a minimum evaluation following only total joint replacement.' Four years later, D amended DC 5055 following notice-and-comment to 'clarify VA's intent to provide a minimum evaluation following only total joint replacement.' Schedule for Rating Disabilities: Musculoskeletal System and Muscle Injuries, 85 Fed. Reg. 76,453, 76,454, 76,456 (Nov. 30, 2020). The change was effective February 7, 2021. On February 8, D rescinded the Knee Replacement Manual Provision. 'The new Manual provisions still reference the historical Knee Replacement Manual Provision because adjudicators use the historical guidance to rate claims that were pending as of February 7, 2021, and that include rating periods prior to that date.' On January 3, 2020, Ps filed a petition for review of the Knee Replacement Manual Provision and the Knee Joint Stability Manual Provision.