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104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-571
_______________________________________________________________________


 
REVISION OF VETERANS BENEFITS DECISIONS BASED ON CLEAR AND UNMISTAKABLE 
                                 ERROR

_______________________________________________________________________


  May 10, 1996.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______


  Mr. Stump, from the Committee on Veterans' Affairs,  submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 1483]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Veterans' Affairs, to whom was referred 
the bill (H.R. 1483) to amend title 38, United States Code, to 
allow revision of veterans benefits decisions based on clear 
and unmistakable error, having considered the same, reports 
favorably thereon without amendment and recommends that the 
bill do pass.

                              Introduction

    On April 7, 1995, the Ranking Member of the Subcommittee on 
Compensation, Pension, Insurance and Memorial Affairs, the 
Honorable Lane Evans, along with the Honorable Frank Mascara, 
the Honorable Bob Filner and the Honorable Luis V. Gutierrez, 
introduced H.R. 1483, to allow revision of veterans benefits 
decisions based on clear and unmistakable error.

    The Subcommittee on Compensation, Pension, Insurance and 
Memorial Affairs met on April 17, 1996 and recommended H.R. 
1483 to the full Committee. The full Committee met on May 8, 
1996 and ordered H.R. 1483 reported favorably to the House by 
unanimous voice vote.

                      Summary of the Reported Bill

    H.R. 1483 would:

    1) Codify existing regulations which make decisions made by 
the Secretary at a regional office subject to revision on the 
grounds of clear and unmistakable error.

    2) Make decisions made by the Board of Veterans' Appeals 
subject to revision on the grounds of clear and unmistakable 
error.

                       Background and Discussion

    The VA claim system is unlike any other adjudicative 
process. It is specifically designed to be claimant friendly. 
It is non-adversarial; therefore, the VA must provide a 
substantial amount of assistance to a veteran seeking benefits. 
When the veteran first files a claim, VA undertakes the 
obligation of assisting the veteran in the development of all 
evidence pertinent to that claim.

    There is no true finality of a decision since the veteran 
can reopen a claim at any time merely by the presentation of 
new and material evidence.

    Any decision may be appealed within one year and the 
grounds for appeal are unlimited. The appeal is initiated by a 
simple notice of disagreement after which VA is obligated to 
furnish a detailed statement of the facts and law pertinent to 
the claim.

    The bill would make decisions by VA Regional Offices and 
the Board of Veterans Appeals (Board) subject to review on the 
grounds of clear and unmistakable error. Regional office 
decisions are currently reversible on this basis by regulation, 
but Board decisions are not. Smith v. Brown, 35 F. 3d. 1516, 
1523 (Fed. Cir. 1994). The bill would effectively codify this 
regulation, and extend the principle underlying it to Board 
decisions.

    The Board is an appellate body located in Washington, DC, 
responsible for reviewing claims on a de novo basis. Under 
current law, a veteran may file a motion for reconsideration at 
the Board at any time after the decision has been made. If the 
Chairman of the Board grants a motion for reconsideration, the 
matter is referred to an enlarged panel for a final decision. 
Reconsideration of the claim is conducted under the law as it 
existed at the time of the initial decision, and if an 
allowance is ordered, the veteran receives the benefit 
retroactive to the date of the initial decision.

    During fiscal years 1991 through 1995, more than 3,600 
motions for reconsideration were filed, and more than 800 (22 
percent) were granted, resulting in reconsideration and a new 
decision by a panel of at least three Board members. Of the 
cases reconsidered, 77 percent resulted in allowances or 
remands. As of March 31, 1996, there were 59,829 appeals 
pending at the Board and the average Board response time was 
752 days. The Committee will closely monitor the effect of this 
legislation on the backlog at VA.

    ``Since at least 1928, the VA and its predecessors have 
provided for the revision of decisions which were the product 
of `clear and unmistakable error' ''. (citations omitted) The 
appropriateness of such a provision is manifest.'' Russell v. 
Principi, 3 Vet. App. 310, 313 (1992) (en banc). Congress has 
provided the Board (but not the regional office or agency of 
original jurisdiction) authority to correct obvious errors. 38 
U.S.C. Sec. 7103(c). In arguments before the Court of Veterans 
Appeals and testimony before this Committee, the VA has stated 
that there is no substantive difference between the Board's 
authority to correct ``obvious error'' and the agency of 
original jurisdiction's authority to correct clear and 
unmistakable error. ``The only real difference is that clear 
and unmistakable error review can be invoked as of right, 
whereas review for obvious error is committed to the sound 
discretion of the Board.'' Smith, supra, 1526. With regard to 
what constitutes clear and unmistakable error, the Court of 
Veterans Appeals has noted:

        It must always be remembered that clear and 
        unmistakable error is a very specific and rare kind of 
        ``error''. It is the kind of error, of fact or of law, 
        that when called to the attention of later reviewers 
        compels the conclusion, to which reasonable minds could 
        not differ, that the result would have been manifestly 
        different but for the error. Thus even 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. Russell v. Principi, 3 Vet. App. 310, 313 
        (1992) (en banc).

Fugo v. Brown, 6 Vet. App. 40, 43-44 (1993). As the Court 
further stated in Fugo, clear and unmistakable error is a form 
of collateral attack on an otherwise final decision, and there 
is a very strong presumption of validity that attaches to such 
decisions.

    As noted above, this legislation would allow a claimant to 
raise a claim of clear and unmistakable error with regard to a 
Board decision. However, it does not follow that by merely 
averring that such error has occurred, a veteran can 
collaterally attack an otherwise final decision. At least in 
cases brought before the Court of Veterans Appeals,

        while the magic incantation ``clear and unmistakable 
        error'' need not be recited in haec verba, to recite it 
        does not suffice, in and of itself, to reasonably raise 
        the issue . . . [S]imply to claim clear and 
        unmistakable error on the basis that previous 
        adjudications had improperly weighed and evaluated the 
        evidence can never rise to the stringent definition of 
        clear and unmistakable error . . . Similarly, neither 
        can broad-brush allegations of ``failure to follow the 
        regulations'' or ``failure to give due process,'' or 
        any other general, non-specific claim of ``error''.

Id. Given the Court's clear guidance on this issue, it would 
seem that the Board could adopt procedural rules consistent 
with this guidance to make consideration of appeals raising 
clear and unmistakable error less burdensome.

    Finally, the Committee notes that an appellate system which 
does not allow a claimant to argue that a clear and 
unmistakable error has occurred in a prior decision would be 
unique. That is certainly the intent of the original VA 
regulation allowing correction of such decisions, no matter 
when the error occurred or which part of the VA made the error. 
Given the pro-claimant bias intended by Congress throughout the 
VA system, the Committee concludes that this legislation is 
necessary and desirable to ensure a just result in cases where 
such error has occurred.

                      Views of the Administration

 statement of charles l. cragin, chairman, board of veterans' appeals, 
      department of veterans affairs, before the subcommittee on 
 compensation, pension, insurance and memorial affairs on october 12, 
                     1995, pertaining to h.r. 1483

    We oppose enactment of H.R. 1483 for the following reasons.

    Section 1(a) of H.R. 1483 would subject decisions of an 
agency of original jurisdiction to revision on the grounds of 
clear and unmistakable error. The evidentiary establishment of 
such error would require reversal or revision of the decision. 
Reversal or revision of a prior decision on these grounds would 
have the same effect as if the reversal or revision had been 
made on the date of the prior erroneous decision. Section 1(a) 
would permit the Secretary to institute review of a decision 
for clear and unmistakable error on his or her own motion or 
upon request of a claimant. A request for such review could be 
made at any time after the original decision is made and would 
be decided the same as any other claim.

    Section 1(a) would provide by statute what VA already 
provides in its regulations and claims-adjudication process. 
Currently, an allegation of error in an otherwise final 
decision of an agency of original jurisdiction requires a 
review of that decision for correctness. Under the provisions 
of 38 C.F.R. Sec. 3.105(a), a finding of clear and unmistakable 
error requires reversal or amendment of the erroneous decision. 
The later, correct decision is effective as if it had been made 
on the date of the previous, incorrect decision. The time 
during which clear and unmistakable error may be alleged is not 
restricted. Such allegations are treated as other claims are, 
even to the extent that the United States Court of Veterans 
Appeals has held:

        Once there is a final decision on the issue of ``clear 
        and unmistakable error'' because the [agency of 
        original jurisdiction] decision was not timely 
        appealed, or because a [Board of Veterans' Appeals] 
        decision not to revise or amend was not appealed to 
        th[e] Court, or because th[e] Court has rendered a 
        decision on the issue in that particular case, that 
        particular claim of ``clear and unmistakable error'' 
        may not be raised again.

Russell v. Principi, 3 Vet. App. 310, 315 (1992). Although we 
have no particular objections to the provisions of section 1(a) 
of H.R. 1483, we believe that existing law and regulations 
already afford the same protections so that additional 
legislation is unnecessary.

    Section 1(b) of H.R. 1483 would subject Board decisions to 
revision on the grounds of clear and unmistakable error. It 
would authorize claimants to request a review to determine the 
existence of clear and unmistakable error in a Board decision 
at any time after the decision is made. Under section 1(c), 
those provisions would apply to all Board decisions, and any 
Board decision on a claim of clear and unmistakable error that 
was filed after or was pending before VA, the Court of Veterans 
Appeals, the Court of Appeals for the Federal Circuit, or the 
Supreme Court on the date of enactment of H.R. 1483 would be 
subject to review by the Court of Veterans Appeals.

    In the interests of the finality of administrative 
appellate decisions, VA opposes the provisions of section 1(b) 
and (c). The Board already has the authority, under current 38 
U.S.C. Sec. 7103(c), to correct an obvious error in the record, 
and the Chairman has the authority, under 38 U.S.C. 
Sec. 7103(a), to order reconsideration of a prior Board 
decision. Under the provisions of 38 C.F.R. Sec. 20.1000, the 
Chairman may order reconsideration on the Board's own motion or 
on an appellant's motion upon an allegation of obvious error of 
fact or law.

    Section 1(c) would in effect rescind the limitation, in 
section 402 of the Veterans' Judicial Review Act, on which 
Board decisions are subject to review by the Court of Veterans 
Appeals. Under that limitation, the Court may review only those 
decisions in which a notice of disagreement was filed on or 
after November 18, 1988. Subjecting to Court review any Board 
decision on a claim of clear and unmistakable error in a prior 
Board decision would also subject the prior Board decision to 
Court review. Obviously, the Court could not determine whether 
a prior Board decision involved clear and unmistakable error 
without examining that prior decision. Thus, the Court could 
review any Board decision, regardless of when the notice of 
disagreement was filed, that was reviewed on a claim of clear 
and unmistakable error. Such wide-ranging review would seem 
very much at odds with the carefully circumscribed review 
afforded under the original Veterans' Judicial Review Act.

    Enactment of section 1(b) and (c) now, when the Board is 
struggling to achieve acceptable response times in working its 
already heavy caseload, could require the Board to review, 
literally on demand, hundreds of thousands of its past 
decisions, including those entered decades ago. From FY 1977 to 
FY 1994, the Board issued 518,157 final decisions. If claimants 
challenged only five percent of those otherwise final decisions 
alleging clear and unmistakable error, the Board's caseload 
would increase by 25,908 cases. This additional caseload would 
exceed the Board's entire FY-1994 output of 22,045 decisions 
and approach the Board's projected FY-1995 output of 28,000 
decisions. The Board's average response time for FY 1994 was 
781 days and is projected to be 745 days in FY 1995. Assuming 
that no additional resources would be available to handle the 
nearly 26,000 additional cases that could result from enactment 
of section 1(b) and (c), the average response time would 
increase to 1,083 days. Enactment now would come at the worst 
possible time, and its adverse impact on decisional timeliness 
could more than offset any gains that may flow from enactment 
of Public Law 103-271, which authorized single-member Board 
decisions.

    Because some provisions of H.R. 1483 are redundant, and 
others could aggravate the Board's backlog of appeals, we 
oppose enactment of the bill.

                      Section-By-Section Analysis

    Section 1(a) would amend chapter 51 of title 38, United 
States Code, to codify existing regulations which make 
decisions made by the Secretary at a regional office subject to 
revision on the grounds of clear and unmistakable error.

    Section 1(b) would amend chapter 71 of title 38, United 
States Code, to make decisions made by the Board of Veterans' 
Appeals subject to revision on the grounds of clear and 
unmistakable error.

    Section 1(c) would make the provisions of this bill 
applicable to any determination made before, on, or after the 
date of the enactment of this Act.

                           Oversight Findings

    No oversight findings have been submitted to the Committee 
by the Committee on Government Reform and Oversight.

               Congressional Budget Office Cost Estimate

    The following letter was received from the Congressional 
Budget Office concerning the cost of the reported bill:

                                     U.S. Congress,
                               Congressional Budget Office,
                                       Washington, DC, May 8, 1996.
Hon. Bob Stump,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office (CBO) 
has reviewed H.R. 1483, a bill to allow revision of veterans 
benefits decisions based on grounds of clear and unmistakable 
error, as ordered reported by the House Committee on Veterans' 
Affairs on May 8, 1996.

    The Department of Veterans Affairs (VA) carries a large 
backlog of claims for benefits, including new applications and 
appeals based on prior decisions. According to VA, this bill 
would help streamline its claims adjudication process. This 
streamlining could result in a more efficient and economical 
administration of claims and, therefore, a savings in general 
operating expenses. On the other hand, benefits could be 
awarded to some veterans sooner than would currently be the 
case, resulting in higher costs. CBO cannot estimate either 
budgetary effect.

    H.R. 1483 would affect direct spending and thus would be 
subject to pay-as-you-go procedures under section 252 of the 
Balanced Budget and Emergency Deficit Control Act of 1985. H.R. 
1483 contains no intergovernmental or private sector mandates 
as defined in Public Law 104-4 and would impose no direct costs 
on state, local or tribal governments.

    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mary Helen 
Petrus. who can be reached at 226-2840.

            Sincerely,
                                           June E. O'Neill,
                                                          Director.

                     Inflationary Impact Statement

    The enactment of the reported bill would have no 
inflationary impact.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (new matter is printed 
in italics, existing law in which no change is proposed is 
shown in roman):

                      TITLE 38, UNITED STATES CODE

          * * * * * * *

               PART IV--GENERAL ADMINISTRATIVE PROVISIONS

          * * * * * * *

           CHAPTER 51--CLAIMS, EFFECTIVE DATES, AND PAYMENTS

                          subchapter i--claims

Sec.
5101.  Claims and forms.
5102.  Application forms furnished upon request.
     * * * * * * *
5109A.  Revision of decisions on grounds of clear and unmistakable 
          error.
     * * * * * * *

                          SUBCHAPTER I--CLAIMS

          * * * * * * *

Sec. 5109A. Revision of decisions on grounds of clear and unmistakable 
                    error

  (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.
  (c) Review to determine whether clear and unmistakable error 
exists in a case may be instituted by the Secretary on the 
Secretary's own motion or upon request of the claimant.
  (d) A request for revision of a decision of the Secretary 
based on clear and unmistakable error may be made at any time 
after that decision is made.
  (e) Such a request shall be submitted to the Secretary and 
shall be decided in the same manner as any other claim.
          * * * * * * *

             PART V--BOARDS, ADMINISTRATIONS, AND SERVICES

                 CHAPTER 71--BOARD OF VETERANS' APPEALS

Sec.
7101.  Composition of Board of Veterans' Appeals.
7101A.  Members of Board: appointment; pay; performance review.
     * * * * * * *
7111.  Revision of decisions on grounds of clear and unmistakable error.
     * * * * * * *

Sec. 7111. Revision of decisions on grounds of clear and unmistakable 
                    error

  (a) A decision by the Board 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 of the Board that constitutes a 
reversal or revision of a prior decision of the Board 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.
  (c) Review to determine whether clear and unmistakable error 
exists in a case may be instituted by the Board on the Board's 
own motion or upon request of the claimant.
  (d) A request for revision of a decision of the Board based 
on clear and unmistakable error may be made at any time after 
that decision is made.
  (e) Such a request shall be submitted directly to the Board 
and shall be decided by the Board on the merits, without 
referral to any adjudicative or hearing official acting on 
behalf of the Secretary.
  (f) A claim filed with the Secretary that requests reversal 
or revision of a previous Board decision due to clear and 
unmistakable error shall be considered to be a request to the 
Board under this section, and the Secretary shall promptly 
transmit any such request to the Board for its consideration 
under this section.
          * * * * * * *

                  Applicability to Legislative Branch

    The reported bill would not be applicable to the 
legislative branch under the Congressional Accountability Act, 
Public Law 104-1, because the bill would only affect certain 
Department of Veterans Affairs benefits recipients.

                     Statement of Federal Mandates

    The reported bill would not establish a federal mandate 
under the Unfunded Mandates Reform Act, Public Law 104-4.

                                   -