[00:00:01] Speaker 02:
There we are.

[00:00:04] Speaker 02:
OK.

[00:00:05] Speaker 02:
First argued case this morning is number 17, 1286, Brown v. Wilkie.

[00:00:11] Speaker 02:
Mr. Carpenter.

[00:00:17] Speaker 04:
May it please the Court?

[00:00:18] Speaker 04:
Kenneth Carpenter, Chairing Office, Mr. Hervel Brown.

[00:00:22] Speaker 04:
The Veterans' Court relied upon a misinterpretation of the provisions of 38 CFR 3.156C

[00:00:29] Speaker 04:
when it concluded that Mr. Brown was not prejudiced by the failure of the VA to apply this regulation.

[00:00:36] Speaker 04:
Mr. Brown was prejudiced by the VA's failure to afford him the benefit of the regulatory required reconstruction under this regulation.

[00:00:46] Speaker 04:
Section 3.156C is a substance.

[00:00:49] Speaker 01:
But Mr. Carpenter, why does it matter if Q wasn't met, if there wouldn't have been clearly a different result?

[00:00:58] Speaker 04:
Well, there clearly would have been a different result, Your Honor.

[00:01:00] Speaker 04:
There would have been the reconsideration that was required under 3.156C.

[00:01:05] Speaker 04:
And that is wherein the misinterpretation lies in this case.

[00:01:10] Speaker 04:
The Veterans Court misread, misunderstood the requirements of 3.156C as being separate and distinguishable from the requirements of either a confirmed decision or a reopening decision.

[00:01:25] Speaker 01:
Still needs NME, doesn't it?

[00:01:27] Speaker 01:
New and material evidence?

[00:01:30] Speaker 04:
No, it does not.

[00:01:31] Speaker 04:
And that's the difference.

[00:01:32] Speaker 04:
The difference is that under 3.156C, what is required is service department records that were not associated with the claims file at the time of the original decision, in this case, in 1974.

[00:01:46] Speaker 04:
When the secretary amended this regulation, he amended it with the express intention of clarifying the meaning and stated quite clearly

[00:01:56] Speaker 04:
that the meaning after the amendment is the same as the meaning prior to the amendment.

[00:02:04] Speaker 04:
And that meaning was that this regulation was designed to be a remedial regulation to afford the veteran the benefit of a reconsideration of his or her original claim.

[00:02:16] Speaker 04:
That is a different process, a different proceeding, than the proceeding that took place in 1974 or the proceeding that took place in 2002.

[00:02:26] Speaker 04:
What took place in 2002 was a traditional reopening under 3.156A.

[00:02:33] Speaker 04:
This court in Bluebaugh recognized that 3.156C provides an exception to 3.156A.

[00:02:42] Speaker 04:
And that exception is a substantive right.

[00:02:46] Speaker 04:
There is no statutory predicate to this regulation.

[00:02:50] Speaker 04:
This regulation was the creation of the Secretary.

[00:02:54] Speaker 04:
It has been on the book since at least 1960.

[00:02:57] Speaker 04:
And in 1974, excuse me, 1978, when the VA received service department records that it had not previously been received, it was required to go back and redo the claim that was made by Mr. Brown in 1974.

[00:03:13] Speaker 04:
That has never happened in this case.

[00:03:16] Speaker 04:
He has a regulatory right to that, and he is prejudiced when that right is not provided.

[00:03:23] Speaker 04:
In the context of Q,

[00:03:25] Speaker 04:
It is also a manifestly different outcome if the veteran is entitled to a substantive right and does not receive that substantive right.

[00:03:34] Speaker 04:
What is required in the revision of the 2002 decision is a direction that the VA... Is there a fact question here?

[00:03:43] Speaker 01:
The court said even assuming that the board misinterpreted the law, the court agrees with the secretary that the appellant has not alleged with specificity

[00:03:52] Speaker 01:
that any error manifestly changed the outcome of the 2002 decision.

[00:03:58] Speaker 04:
And that is simply an incorrect characterization of Mr. Brown's allegation of error.

[00:04:04] Speaker 01:
Does it relate to an application of law?

[00:04:08] Speaker 01:
No, because it's an application of law to fact.

[00:04:12] Speaker 04:
No, it is not an application of law to fact.

[00:04:13] Speaker 04:
It is a question of regulatory interpretation.

[00:04:16] Speaker 04:
The underpinning of that conclusion by both the secretary

[00:04:23] Speaker 04:
Veterans Court is premised upon a misunderstanding, a misreading of what is required by 3.156C.

[00:04:30] Speaker 04:
What is required by 3.156C is a mandatory, not permissive, reconsideration.

[00:04:38] Speaker 04:
The failure to provide that reconsideration is the resulting manifestly different outcome

[00:04:44] Speaker 04:
because what needs to be ordered in the revision based upon the clear and unmistakable error, the failure to consider and correctly apply this regulation is to afford Mr. Brown the regeneration.

[00:04:58] Speaker 03:
Didn't the board in 1978 consider the morning sick reports that we're talking about?

[00:05:05] Speaker 04:
I don't believe the board did.

[00:05:06] Speaker 04:
The VA did in a confirmed rating decision.

[00:05:11] Speaker 04:
They did consider them?

[00:05:13] Speaker 04:
They did consider them.

[00:05:14] Speaker 04:
But they did not reconsider Mr. Brown's original claim in 1974, which is what is required by, which is the exception that is recognized by this court in Blue Rock.

[00:05:30] Speaker 04:
That is a different administrative adjudicative proceeding under the authority of this regulation than to simply acknowledge the receipt of those and then issue a confirming decision.

[00:05:44] Speaker 04:
More is required under 3.156C, as the secretary described in his published interpretation of 3.156C, is to ensure that the harm done to the veteran by the VA's failure in its duty to assist to get relevant service department records is given the opportunity for a new adjudication.

[00:06:08] Speaker 04:
He was not given a new adjudication.

[00:06:10] Speaker 04:
I cannot dispute that the VA acknowledged receipt of those.

[00:06:14] Speaker 04:
But the trigger under 3.156C is upon receipt, the secretary is required to reconsider.

[00:06:22] Speaker 04:
That is not what happened in 1974, and that's not what happened in 2002.

[00:06:26] Speaker 04:
This court must recognize that the remedial right that is afforded under 3.156C is a substantive right.

[00:06:36] Speaker 04:
And if that substantive right is ignored, as it was in this case,

[00:06:40] Speaker 04:
On the two opportunities that the VA had to look at this matter in 1978 and again in 2002, that was both a clear and unmistakable error and required the revision of the 2002 decision so that the reconsideration that is mandated by 3.156C would be afforded to Mr. Brown.

[00:07:08] Speaker 03:
You brought up our case in Bluebaugh.

[00:07:11] Speaker 03:
Why is that controlling towards an affirm in this case?

[00:07:15] Speaker 03:
For a couple of reasons, Your Honor.

[00:07:17] Speaker 04:
First, the Bluebaugh case dealt with a slightly different issue than it's dealt with in this case.

[00:07:23] Speaker 04:
And what it's dealt with in this case is a question of how 3.156C operates.

[00:07:32] Speaker 04:
What was contemplated by the secretary when he wrote that?

[00:07:37] Speaker 04:
When he amended the regulation, the Secretary made very clear what the purpose and function of 3.156C was.

[00:07:47] Speaker 04:
That function was not carried out in this case, either in 1978 or in 2002.

[00:07:54] Speaker 04:
What was carried out in 2002 was a reopening under 3.156A, not a reconsideration under 3.156C.

[00:08:06] Speaker 04:
And as a result, they assigned the effective date as of the date of the receipt of new and material evidence.

[00:08:12] Speaker 04:
They didn't reconsider the original claim in 1974.

[00:08:16] Speaker 04:
This is clearly described by the secretary as the claimant should not be harmed by an administrative deficiency of the government.

[00:08:29] Speaker 04:
The administrative deficiency of the government was in the failure to get these service department records.

[00:08:36] Speaker 04:
that were available and ultimately relied upon by the VA when they made the grant.

[00:08:43] Speaker 04:
But what's required under 3.156C is that at any time the VA receives service department records that were not part of the record at the time of the original adjudication, there must be a reconsideration of the original claim.

[00:09:00] Speaker 04:
That requires an exception to the finality

[00:09:05] Speaker 04:
of the board's decision in 1974, which was a direct appeal of the original denial in 1974, and it is an exception to the finality of the subsequent intervening decisions, because 3.1560C mandates a specific procedure, i.e.

[00:09:26] Speaker 04:
a reconsideration.

[00:09:29] Speaker 03:
Which is a mandate.

[00:09:30] Speaker 03:
Doesn't it use the word may consider other evidence only when it's new and material?

[00:09:36] Speaker 04:
What the regulation said both before and after is will.

[00:09:40] Speaker 04:
It says, affirmatively, will be reconsidered in both the prior version of 3.156c and clearly in 3.156c-1 says that upon receipt of service department records, not previously, it shall be reconsidered, the original client.

[00:10:01] Speaker 04:
So there is no ambiguity in that original.

[00:10:04] Speaker 04:
a language or in the amended language.

[00:10:07] Speaker 04:
I see that I'm about to go into my rebuttal time.

[00:10:09] Speaker 04:
Unless there's further questions, I'll reserve them out.

[00:10:12] Speaker 02:
Thank you, Mr. Carpenter.

[00:10:19] Speaker 02:
Mr. Lyons.

[00:10:26] Speaker 00:
May it please the Court.

[00:10:28] Speaker 00:
Mr. Brown cannot present a cue here, because he relies on a definition of new and material that is neither new nor material, and because he doesn't show how his interpretation would manifestly change the outcome below, where he has to show that his alleged new evidence would clearly support relation back to the first date.

[00:10:48] Speaker 01:
Is that fact?

[00:10:50] Speaker 00:
Your Honor, you asked if there are factual issues here.

[00:10:52] Speaker 00:
We think that as you raised in

[00:10:56] Speaker 00:
the original argument.

[00:10:57] Speaker 00:
There's a factual question there.

[00:10:58] Speaker 00:
There's also a factual question as to the materiality prong here, where the Veterans Court said it is undisputed that these SICK reports were not the basis of reopening.

[00:11:10] Speaker 00:
We think that's also a factual question, which would not properly be before the court.

[00:11:16] Speaker 02:
Well, you know, what seems to be unusual about this case?

[00:11:20] Speaker 02:
The original records were destroyed by fire.

[00:11:23] Speaker 02:
The position throughout is that that's not the government's fault.

[00:11:27] Speaker 02:
No presumptions in favor of the veteran or whatever else.

[00:11:30] Speaker 02:
Finally, evidence that apparently was available all along turns up.

[00:11:37] Speaker 02:
And your position is that's too bad?

[00:11:40] Speaker 00:
No, Your Honor.

[00:11:42] Speaker 00:
The evidence that shows up that's important, that's material,

[00:11:46] Speaker 00:
is that Mr. Brown found his private doctor who said, who gave him a declaration saying, I recall treating you for this, not in service, but shortly after.

[00:11:55] Speaker 00:
And then a second current doctor who did some sort of radiological testing and found that there's no evidence that disproves his claim.

[00:12:05] Speaker 02:
But there was, until the evidence that he had been sick, it looked as if he wasn't able even to get to that stage.

[00:12:14] Speaker 00:
No, it was never disputed, Your Honor.

[00:12:15] Speaker 00:
There was no, no one has asserted that he didn't prove service connection because he was never sick.

[00:12:23] Speaker 00:
The question was whether he was, whether he had this gastric condition while he was in service.

[00:12:29] Speaker 00:
That was the issue.

[00:12:30] Speaker 00:
And that's why when he presented these daily sick call reports that say, yes, you were out sick, they don't say why.

[00:12:36] Speaker 02:
He didn't present them.

[00:12:38] Speaker 02:
The government eventually found them.

[00:12:40] Speaker 02:
Extremely tardily after all the decisions had been made against him.

[00:12:47] Speaker 00:
But on his second request for reopening, those were before the government and they were looked at.

[00:12:52] Speaker 00:
Yes.

[00:12:53] Speaker 00:
And what was found is this doesn't change anything because the issue here isn't were you ever sick while you were in the service.

[00:13:00] Speaker 00:
The question is, did you have this gastric condition?

[00:13:03] Speaker 00:
Is there a basis for a service connection for this gastric condition?

[00:13:07] Speaker 00:
So that when much later he presented his private doctor plus this new medical examination, we did reopen and we said, okay, you've made the connection.

[00:13:16] Speaker 02:
But the question- With the benefit of the sick reports?

[00:13:20] Speaker 00:
No, respectfully, Your Honor.

[00:13:22] Speaker 00:
Again, the finding is it's undisputed that the sick reports were not the basis for reopening.

[00:13:26] Speaker 00:
And not only is there that factual finding, but we know that because when the sick reports were presented on the second request,

[00:13:34] Speaker 00:
it was determined they didn't help.

[00:13:35] Speaker 00:
They didn't show this service connection.

[00:13:40] Speaker 02:
Well, this is a matter, of course, of weighing the evidence, but it does seem that with the fire destroying all the original records, which might very well have shown the hospitalization that he claimed, not just some attendance taker saying he's sick, that the

[00:14:03] Speaker 02:
tide changed and that it was reopened, but thereafter it's as if it seems that there was no corroborating evidence of his doctor's opinion because the fire destroyed the records.

[00:14:21] Speaker 00:
I think it is fair that it's possible that the records that were destroyed in the fire might have supported him.

[00:14:28] Speaker 02:
It's possible they might... Aren't we supposed to draw inferences of possibilities

[00:14:33] Speaker 02:
when they're reasonable in favor of the veteran?

[00:14:36] Speaker 00:
Well, Your Honor, that would be a claim for Q based on the very first examination, and that is, that argument is not something Mr. Brown has presented, certainly not presented in this.

[00:14:46] Speaker 02:
You're saying that can't be considered on the reopening?

[00:14:49] Speaker 00:
I would think if he wanted to make that argument, he would need to reopen a certain Q on that basis.

[00:14:56] Speaker 02:
He asked that all the evidence be reconsidered.

[00:14:59] Speaker 02:
He now had the additional evidence

[00:15:02] Speaker 02:
of confirmation that he had been sick.

[00:15:04] Speaker 00:
But it was never disputed that he was sick.

[00:15:07] Speaker 00:
That was not the basis for denying service connection in the first instance.

[00:15:12] Speaker 00:
Grant, Your Honor, if that had been the basis, if... Well, I said there aren't any records of sickness.

[00:15:17] Speaker 02:
They never accepted that he had been sick.

[00:15:20] Speaker 00:
But had he come forward on that first review with the evidence that he ultimately came forward with, which is a doctor who said, oh yes, I've treated him for this in 1962, which is what he ultimately came forward for,

[00:15:31] Speaker 00:
Presumably, he would have gotten the same result he got on his fourth review.

[00:15:36] Speaker 00:
He didn't.

[00:15:38] Speaker 00:
That was the evidence he needed.

[00:15:39] Speaker 00:
The reason these sick records aren't material is they don't show what he's trying to show, a service connection.

[00:15:45] Speaker 00:
They add this condition at the time.

[00:15:49] Speaker 00:
They're also, at this point, frankly, not new.

[00:15:51] Speaker 00:
And that goes to the Blue Bar decision, where a veteran

[00:15:55] Speaker 00:
brought forward records.

[00:15:56] Speaker 00:
They were considered.

[00:15:58] Speaker 00:
They didn't help achieve service connection.

[00:16:00] Speaker 00:
And then he brought them forward again.

[00:16:02] Speaker 00:
And the court here said, the federal circuit said, those aren't new records.

[00:16:06] Speaker 01:
What about the change in law?

[00:16:08] Speaker 01:
What effect does that have on this case?

[00:16:10] Speaker 00:
Your Honor, we think it doesn't affect the outcome here.

[00:16:14] Speaker 00:
In Blue Bar, the new version of the regulation is, if anything, more favorable to veterans.

[00:16:20] Speaker 00:
But in Blue Bar, the court looked at it and said,

[00:16:23] Speaker 00:
Yes, the wording has changed, but the intent, frankly, has not changed.

[00:16:26] Speaker 00:
It's the same intent as the old regulation, which is if there is new and material evidence, we go all the way back.

[00:16:34] Speaker 00:
So it's still the same point.

[00:16:35] Speaker 00:
The older version of the regulation has that exact language, and it specifically defines new as evidence.

[00:16:43] Speaker 00:
New evidence means existing evidence not previously submitted to agency decision makers.

[00:16:50] Speaker 00:
So we think very clearly under the older version of the regulation.

[00:16:54] Speaker 01:
Well, the new C doesn't contain the language new and material evidence, does it?

[00:17:00] Speaker 01:
But the A, which precedes it, does say new and material evidence.

[00:17:05] Speaker 01:
But then C says notwithstanding any other section.

[00:17:09] Speaker 01:
So is NME part of the new C?

[00:17:14] Speaker 00:
I believe the Blubaugh decision says it is, that the intention here was always to keep that, that the reason for the change was because, for whatever reason, some people had been reading new and material to mean you don't go back.

[00:17:28] Speaker 00:
You can't even consider going back to the original date.

[00:17:31] Speaker 00:
So that was the intention, and that's what this court in Blubaugh said.

[00:17:34] Speaker 00:
The other issue here, of course, is the outcome would have to manifestly change.

[00:17:41] Speaker 00:
And in order to show

[00:17:43] Speaker 00:
get that earlier relation date under the old regulation, Mr. Brown would have to show that the records clearly support the earliest date, and we don't think he can show that.

[00:17:54] Speaker 00:
He hasn't raised an argument for why he can show that, and the Veterans Court pointed that out to him as well.

[00:18:02] Speaker 00:
His argument is the fact of a review.

[00:18:04] Speaker 00:
is a manifest change, and that frankly is not the law.

[00:18:08] Speaker 03:
That's not been the way this court has ever interpreted manifestly change as far as... Isn't the 19 years that he went without receiving disability benefits, wouldn't that constitute a manifest change?

[00:18:20] Speaker 00:
If he raised an argument before you, Your Honor, on why these sick reports

[00:18:27] Speaker 00:
clearly support the earlier date, but he hasn't even raised the argument, and the Veterans Court particularly called that point out there.

[00:18:33] Speaker 00:
He didn't raise that argument there, an argument there either.

[00:18:37] Speaker 00:
He's just said, well, the fact that I get a review, even if I get the same ultimate result, even though I'm not giving an argument why I get the same substantive result, is a manifest change, and that is not the law.

[00:18:52] Speaker 00:
Certainly, going back to the earlier date, would be a substantive change.

[00:18:57] Speaker 00:
But that's not the argument he's making.

[00:18:58] Speaker 00:
He's saying the fact of consideration alone, regardless of outcome, is enough.

[00:19:05] Speaker 00:
And that is not how manifest change has been considered.

[00:19:12] Speaker 00:
For all those reasons, Your Honors, because the evidence he presents isn't new and material, and he doesn't even advance a legitimate argument for a manifest change.

[00:19:21] Speaker 00:
We would ask the decision below be affirmed.

[00:19:25] Speaker 02:
Thank you, Mr. Lyons.

[00:19:33] Speaker 02:
Mr. Carpenter.

[00:19:36] Speaker 04:
May it please the court, I believe that the government is mistaken in its characterization of the new law.

[00:19:45] Speaker 04:
It is more importantly mistaken in its description of the secretary's description

[00:19:51] Speaker 04:
of his interpretation of the meaning of the amendment to 3.156.

[00:19:54] Speaker 01:
Well, how can it not include NME?

[00:19:58] Speaker 01:
It's got to be new and material, right?

[00:20:00] Speaker 04:
No, Your Honor.

[00:20:03] Speaker 04:
It is new and material.

[00:20:05] Speaker 01:
You mean you can come in with the same evidence, and as long as you argue that it's relevant, you've got a new ground?

[00:20:13] Speaker 04:
Yes, Your Honor.

[00:20:14] Speaker 04:
That's what 3.156C says, and that's what the Secretary himself explained.

[00:20:19] Speaker 04:
Is that what we said in Bluebaugh?

[00:20:21] Speaker 04:
That is not what you said in Bluebaugh.

[00:20:23] Speaker 04:
And that's why Bluebaugh is distinguishable in this case, because this case deals directly with the meaning of 3.156C in the context of when it is not afforded.

[00:20:36] Speaker 04:
And in this case, it was not afforded.

[00:20:39] Speaker 04:
The change that the secretary made was to expressly remove from the regulatory language the phrase new and material, because he himself described that phrase as confusing and misleading.

[00:20:58] Speaker 04:
But they made it clear that the intent would remain the same.

[00:21:02] Speaker 04:
Yes, the intent to correct the prior administrative error.

[00:21:07] Speaker 04:
the intent that it be an exception to finality, that intent remains the same.

[00:21:13] Speaker 04:
The understanding that was described in Bluebaugh is different than the context in which this case is presented, because this case is presented first in the context of Hugh.

[00:21:25] Speaker 03:
I guess I was speaking about the intent that any new evidence presented at a later date must be, in fact, new, not something that's been considered before by the board or by the process.

[00:21:39] Speaker 04:
There is nothing in the regulation that says that, which is important.

[00:21:44] Speaker 04:
But more importantly, it's not a question of whether it's ever been considered.

[00:21:49] Speaker 04:
The question is whether it was considered properly as required by 3.156C.

[00:21:55] Speaker 03:
But that's what we said in Blue Bull, right?

[00:21:58] Speaker 03:
I mean, I think your case is going to stand or fall on Blue Bull.

[00:22:04] Speaker 03:
No, Your Honor, I don't think so.

[00:22:06] Speaker 04:
I think that Bluebaugh both supports this argument and to some extent undermines it.

[00:22:13] Speaker 04:
But in Bluebaugh, this court was not asked to interpret the meaning of 3.156C in the context of whether or not there was or wasn't previous consideration of the service records.

[00:22:30] Speaker 04:
These service records we cannot dispute.

[00:22:33] Speaker 04:
were received and were considered in a confirmed decision.

[00:22:37] Speaker 04:
The question at law here is, is the confirmed decision that was afforded Mr. Brown in 1978 the type of decision that is contemplated under 3.156C?

[00:22:49] Speaker 04:
The type of decision that is contemplated under 3.156C is a do-over.

[00:22:55] Speaker 04:
You begin again.

[00:22:56] Speaker 04:
You erase what happened.

[00:22:58] Speaker 04:
You erase the finality of the 74

[00:23:01] Speaker 04:
rating decision, you erase the finality of the board decision in 1974 and you start anew.

[00:23:08] Speaker 04:
You reconsider the 1974 claim anew.

[00:23:13] Speaker 04:
That didn't happen in 1978 and most importantly it didn't happen in 2002.

[00:23:17] Speaker 04:
And 2002 demonstrates why the change in law is necessary.

[00:23:24] Speaker 04:
because the change in law that changed or amended 3.156c removed the new and material requirement.

[00:23:35] Speaker 04:
The panel in Bluebaugh did not recognize the secretary's interpretation when he amended that regulation and used the phrase new and material when that phrase was in fact removed from the regulation.

[00:23:55] Speaker 02:
I see that I'm into my... Any questions for Mr. Carpenter?

[00:23:59] Speaker 02:
Any more questions?

[00:24:00] Speaker 02:
Thank you very much.

[00:24:00] Speaker 02:
Thank you.

[00:24:01] Speaker 02:
Thank you both.

[00:24:02] Speaker 02:
The case is taken under submission.