Newhouse v. Nicholson

United States Court of Appeals for the Federal Circuit

2006-7302

ROGER H. NEWHOUSE,

Claimant-Appellant,

R. JAMES NICHOLSON, Secretary of Veterans Affairs,

Respondent-Appellee.

Peter N. Witty, Abbott Laboratories, of Abbott Park, Illinois, argued for claimant-
appellant. On the brief were Israel Sasha Mayergoyz, W. Bryan Lytton, and Douglas A.
Freedman, Latham & Watkins, LLP, of Chicago, Illinois.

Martin F. Hockey, Jr., Senior Trial Counsel, Commercial Litigation Branch, Civil
Division, United States Department of Justice, of Washington, DC, argued for
respondent-appellee. With him on the brief was Peter D. Keisler, Assistant Attorney
General. Of counsel on the brief were David J. Barrans, Deputy Assistant General
Counsel, and Martie Adelman, Staff Attorney, United States Department of Veterans
Affairs, of Washington, DC.

Appealed from: United States Court of Appeals for Veterans Claims

Judge Mary J. Schoelen
United States Court of Appeals for the Federal Circuit

2006-7302

ROGER H. NEWHOUSE,

Claimant-Appellant,

R. JAMES NICHOLSON, Secretary of Veterans Affairs,

Respondent-Appellee.

_______________________

DECIDED: August 10, 2007
_______________________

Before LOURIE, LINN, and MOORE, Circuit Judges.

MOORE, Circuit Judge.

Roger H. Newhouse appeals the final decision of the United States Court of

Appeals for Veterans Claims (Veterans Court) affirming the Board of Veterans Appeals’

(Board’s) denial of an increased disability rating. See Newhouse v. Nicholson, 21 Vet.

App. 65, 2006 WL 829557 (Mar. 14, 2006) (unpublished). We affirm.

BACKGROUND

Mr. Newhouse is a veteran who was awarded service connection for bilateral

high-frequency hearing loss in April 1982. The Department of Veterans Affairs (VA)

determined that Mr. Newhouse’s hearing loss at that time was 0% disabling. Mr.

Newhouse disagreed with VA’s decision and continued to pursue his claim until May

1988, when he withdrew his appeal.
In November 2000, Mr. Newhouse asked VA to reevaluate his hearing loss. VA

denied his claim for an increased disability rating, and Mr. Newhouse appealed that

decision to the Board. 1 As part of the appeal process, Mr. Newhouse presented

evidence to VA including a July 2002 Appeals Status Questionnaire with a supplemental

statement indicating that Mr. Newhouse was informed by an audiologist at a recent

hearing examination that his hearing loss was 26% in his right ear and 49% in his left

ear. After concluding that VA met its obligations to notify and assist Mr. Newhouse

under the Veterans Claims Assistance Act of 2000 (VCAA), Pub. L. No. 106-475, 114

Stat. 2096, the Board affirmed VA’s conclusion that Mr. Newhouse’s hearing loss was

not compensable.

The Veterans Court affirmed. Before the Veterans Court, Mr. Newhouse

contended that the Board’s decision should be reversed because (1) VA failed to

provide adequate notice under the VCAA, and (2) the Board failed to address his July

2002 statement and the results of a July 1985 audiological examination. With respect to

the issue of VCAA notice, the Veterans Court disagreed with the Board’s conclusion

that Mr. Newhouse had been provided with adequate notice. Newhouse, 2006 WL

829557, at *4. The failure to properly notify Mr. Newhouse was harmless error,

however, according to the Veterans Court because it found that Mr. Newhouse had

actual knowledge that he needed to submit medical evidence to establish that his

hearing loss was disabling. Id. at *5. The Veterans Court also rejected Mr. Newhouse’s

argument regarding the Board’s failure to address evidence in the record. Id. at *3.

1
Mr. Newhouse was granted service connection and a disability rating of
10% for tinnitus. Newhouse, 2006 WL 829557, at *1. Mr. Newhouse does not appeal
that decision.

2006-7302 2
On appeal to this court, Mr. Newhouse contends that the Veterans Court

overstepped its jurisdictional bounds by concluding that VA’s failure to comply with the

VCAA was harmless. Mr. Newhouse also contends that remand is appropriate because

the Board failed to address each item of evidence in the record when it rendered its

decision. We address each of Mr. Newhouse’s contentions in turn.

DISCUSSION

The scope of our review of a Veterans Court decision is limited by statute. See

38 U.S.C. § 7292 (2006). Under § 7292(a), we may review a decision by the Veterans

Court with respect to the validity of “any statute or regulation . . . or any interpretation

thereof (other than a determination as to a factual matter) that was relied on by the

[Veterans] Court in making the decision.” We must affirm a Veterans Court decision

unless it is “(A) arbitrary, capricious, an abuse of discretion, or otherwise not in

accordance with law; (B) contrary to constitutional right, power, privilege, or immunity;

statutory right; or (D) without observance of procedure required by law.” 38 U.S.C.

§ 7292(d)(2). We review interpretation of statutes and regulations by the Veterans

Court de novo. Smith v. Nicholson, 451 F.3d 1344, 1347 (Fed. Cir. 2006).

II.

Relying on a footnote in Conway v. Principi, 353 F.3d 1369, 1375 n.4 (Fed. Cir.

2004), Mr. Newhouse contends that the Veterans Court was required to remand to the

Board for a determination of prejudicial error. That footnote deems it “questionable,”

without deciding, whether the Veterans Court could reach the question of prejudicial

2006-7302 3
error in the first instance. Id. The reasons for the doubt expressed in Conway appear

to be based on the Chenery doctrine—i.e., that the Veterans Court is prohibited from

affirming the Board’s decision on a ground other than that relied on by the Board. See

Sec. & Exchange Comm’n v. Chenery Corp., 332 U.S. 194 (1947); Sec. & Exchange

Comm’n v. Chenery Corp., 318 U.S. 80 (1943). After a careful review of the relevant

authorities, we conclude that the Veterans Court was required to examine whether any

errors by VA were prejudicial and that it must do so based on the administrative record.

The Chenery doctrine

is a simple but fundamental rule of administrative law . . . that a reviewing
court, in dealing with a determination or judgment which an administrative
agency alone is authorized to make, must judge the propriety of such
action solely by the grounds invoked by the agency. If those grounds are
inadequate or improper, the court is powerless to affirm the administrative
action.

Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 169 (1962) (quoting

Chenery, 332 U.S. at 196) (emphasis added). Thus, the Chenery doctrine is not

implicated when the new ground for affirmance “is not one that calls for ‘a determination

or judgment which an administrative agency alone is authorized to make.’” Fleshman v.

West, 138 F.3d 1429, 1433 (Fed. Cir. 1998).

A determination of whether a VA error is prejudicial or harmless is not “a

determination or judgment which [VA] alone is authorized to make.” Chenery, 332 U.S.

at 196. The statute defining the Veterans Court’s jurisdiction to review Board decisions,

38 U.S.C. § 7261(b)(2), states that the Veterans Court “shall review the record of the

proceedings before the Secretary and the Board . . . and shall . . . (2) take due account

of the rule of prejudicial error.” In Conway, we held that this provision was mandatory.

353 F.3d at 1375 (“[W]e establish today that the Veteran’s Court must ‘take due account

2006-7302 4
of the rule or prejudicial error’ in all cases addressing the notice requirements in section

5103(a) . . . .”). The statute does not limit the Veterans Court’s inquiry to the facts as

found by the Board, but rather requires the Veterans Court to “review the record of the

proceedings before the Secretary and the Board” in determining whether a VA error is

prejudicial. 38 U.S.C. § 7261(b)(2). Because Congress vested the Veterans Court with

jurisdiction to “take due account of the rule of prejudicial error,” the Veterans Court’s

performance of its statutory duty in this case was proper and did not violate the Chenery

doctrine.

Mr. Newhouse also argues that VA’s failure to provide proper VCAA notice was

not harmless, but resulted in actual prejudice. The Veterans Court found that Mr.

Newhouse had actual knowledge that he was required to submit medical evidence

regarding his hearing loss to substantiate his claim. Accord Sanders v. Nicholson, 487

F.3d 881, 887 (Fed. Cir. 2007) (“[T]he Secretary is required to persuade the court that

the purpose of the notice was not frustrated—e.g., by demonstrating . . . that any defect

in the notice was cured by actual knowledge on the part of the claimant . . . .”). Our

jurisdictional statute precludes appellate review of factual matters and the application of

law to facts. See 38 U.S.C. § 7292(d)(2) (2006). This statute prevents us from

reviewing Mr. Newhouse’s contentions regarding actual prejudice.

III.

Mr. Newhouse also contends that a remand is required because the Board failed

to address two items of evidence in the record in its written decision. Specifically, Mr.

Newhouse contends that the Board was required to address (1) Mr. Newhouse’s July

2006-7302 5
2002 supplemental statement and (2) Mr. Newhouse’s July 1985 audiological

examination. We disagree.

Section 7104(a) of Title 38 provides that “[d]ecisions of the Board shall be based

on the entire record in the proceeding and upon consideration of all evidence and

material of record and applicable provisions of law and regulation.” 38 U.S.C. § 7104(a)

(2006). Subsection (d)(1) of that section requires the Board’s decisions to include “a

written statement of the Board’s findings and conclusions, and the reasons or bases for

those findings and conclusions, on all material issues of fact and law presented on the

record.” 38 U.S.C. § 7104(d)(1). There is a presumption that VA considered all of the

evidence of record. See Gonzales v. West, 218 F.3d 1378, 1380-81 (Fed. Cir. 2000)

(“[A]bsent specific evidence indicating otherwise, all evidence contained in the record at

the time of the RO’s determination . . . must be presumed to have been reviewed by

[VA], and no further proof of such review is needed.”). This presumption is applicable in

the present case. The evidence was before the Board. The fact that it was not

specifically mentioned in the Board’s decision in this case is insufficient to overcome

this presumption.

CONCLUSION

Because the Veterans Court has the statutory duty to “take due account of the

rule of prejudicial error” by considering “the record of the proceedings before the

Secretary and the Board,” we conclude that the Veterans Court did not err by

2006-7302 6
determining that the VA’s failure to provide proper VCAA notice was harmless.

Moreover, we conclude that Mr. Newhouse has not established that the Board failed to

consider any evidence in the record. Therefore, the Veterans Court’s judgment is

AFFIRMED.

COSTS

Each party shall bear its own costs.

2006-7302 7