Appealed from: United States Court of Veterans Appeals judge Ivers
Before Mayer, Chief Judge, *fn1 * Rich, and Michel, Circuit Judges.
The opinion of the court was delivered by: Mayer, Chief Judge.
Andrew M. Collaro appeals from the judgment of the Court of Veterans Appeals dismissing his appeal from the Board of Veterans Appeals for lack of jurisdiction. Collaro v. Brown, No. 95-822 (Vet. App. Jan. 7, 1997). Because the Court of Veterans Appeals erred in dismissing his constitutional and statutory claims, we vacate and remand.
Collaro served on active duty in the United States Navy from April 1967 through January 1971 and then from November 1973 through November 1975, before he was honorably discharged. In August 1976, the Veterans Administration Regional Office awarded him an initial disability rating of fifty percent for chronic schizophrenic reaction undifferentiated type severe, effective from November 8, 1975. After three years of unemployment, the regional office increased Collaro's disability rating to seventy percent and granted him total disability based on individual unemployability. No further examinations were to be scheduled and on September 16, 1980, the agency sent him a letter stating: "Your disability was determined to be permanent." The individual unemployability evaluation and the benefits attributable to it could not be reduced except upon "a determination that actual employability is established by clear and convincing evidence." 38 C.F.R. § 3.343(c)(1) (1980).
In 1980, the central office of the agency distributed VA Circular 21-80-7 (Sept. 9, 1980), directing regional offices to review the appropriateness of grants of individual unemployability in order to reestablish control over the "many questionable or erroneous grants of individual unemployability." The circular directed regional offices to assign a one hundred percent (total) schedular evaluation "if unemployability is directly attributable to a service-connected neuro-psychiatric condition as unemployability is a criterion for the total evaluation." This circular was not published in the Federal Register or the Code of Federal Regulations, and the public was never invited to comment on the agency's new rating procedures, as might be required by the Administrative Procedures Act, 5 U.S.C. §§ 701-706, see 5 U.S.C. §§ 552(a)(1) (publication requirements), 553 (notice and comment requirements), or similar agency regulations adopted pursuant to chapter 72 of title 38 of the United States Code, see, e.g., 38 C.F.R. §§ 1.12, 1.551 (1980) (implementing provision of 5 U.S.C. §§ 553 and 552 respectively). *fn2 **
Following a psychiatric examination in July 1980 and pursuant to the new schedular rating criteria, the regional office reviewed Collaro's disability rating. Due to regression of his mental disorder, which continued to render him unemployable, the regional office replaced his individual unemployability rating with a total schedular rating. The regional office scheduled subsequent reexaminations. One such examination in late 1984 resulted in a continuation of Collaro's total schedular rating. However, based on an examination ten months later, the agency reduced his schedular rating to seventy percent, effective from March 1, 1985. This change reduced his monthly service connected disability compensation by more than half. Collaro appealed this decision to the Board of Veterans Appeals, which held in January 1986 that an evaluation in excess of seventy percent was not warranted. In June 1987, the board sustained Collaro's seventy percent evaluation. In March 1989, the agency sent Collaro a letter notifying him that another rating action continued his evaluation percentage. He then filed a Notice of Disagreement (NOD). Unedited, the entire text of this NOD reads:
This is to inform , that am appealing your decision to the Board of Veterans of Appeals in reference to the letter dated March 28, 1989. The designated representative in this case is the Veterans of Foreighn Wars. It is indicated that on the record the designation for the rating for the service condition connected ( NERVOUS CONDITION) should be rated 100%. You are being notified that am filing a NOTICE OF DISAGREEMENT with representation by a service officer of VFW as of 3/31/89. Thank you.
On May 10, 1989, the agency sent Collaro a statement of the case, as required by 38 U.S.C. § 4005(d)(1) (1988) (now codified at 38 U.S.C. § 7105(d)). On appeal, the board remanded the case to the agency so that the regional office could advise Collaro about recent statutory and regulatory changes (effective February 3, 1988) governing entitlement to evaluations in excess of seventy percent. The regional office reconfirmed the seventy percent rating under the new criteria and issued a supplemental statement of the case on March 23, 1990. Once again on appeal, the board held in July 1990 that an evaluation in excess of seventy percent was not warranted. Acting as Collaro's designated representative, the Paralyzed Veterans of America requested reconsideration in May 1991, reasoning as follows:
The Regional Office, in its decision of November 30, 1984, terminated the veteran's total disability rating without considering [38 C.F.R.] § 3.343(a). As conceded by the VA General Counsel in [Swan v. Derwinski, No. 89-75 (Vet. App. Apr. 12, 1991)], the failure of the Regional Office, in this case, to consider § 3.343(a), in its rating decision of November 1984, makes the rating decision and the resultant termination of the veteran's total disability rating void. Being void the reduction must be held to be of no force and effect and warrants a restoration of the veteran's 100% rating.
The board's deputy vice-chairman denied reconsideration, stating in part:
t was not argued in this case in 1986 that a favorable result was warranted under the provisions of 38 C.F.R. [§] 3.343(a). Further, this is not a case involving an unrepresented veteran who was unsophisticated in applicable law. The veteran in this case was represented by a trained representative provided by a national service organization . . . . The motion does not show the Veteran was denied due process of law, that the relevant evidence was misstated or omitted, that incorrect law was used in resolving the issue on appeal or that the law was misapplied.
Collaro appealed this decision to the Court of Veterans Appeals. In his brief, dated December 26, 1991, he argued:
When the RO awarded the veteran individual unemployability, 38 C.F.R. § 3.343(c) (1978) prohibited its termination except upon a showing by clear and convincing evidence that the veteran had regained his ability to be employed. When the RO in its rating decision of January 1981 amended the veteran's award by assigning a total schedular rating as directed in DVB Circular 21-80-7 (Sep. 9, 1980), in place of the individual unemployability award, the RO violated § 3.343(c), ...