John D. McCauley v. Denis McDonough

Case: 23-1692 Page: 1 of 11 Filed: 05/20/2024

UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS

No. 23-1692

JOHN D. MCCAULEY, APPELLANT,

V.

DENIS MCDONOUGH,

SECRETARY OF VETERANS AFFAIRS, APPELLEE.

On Appeal from the Board of Veterans' Appeals

(Decided May 20, 2024)

Daniel S. Bretzius, of Concord, New Hampshire, was on the brief for the appellant.

Richard J. Hipolit, Deputy General Counsel; Mary Ann Flynn, Chief Counsel; Carolyn F.

Washington, Deputy Chief Counsel; and Katelyn N. Lancto, all of Washington, D.C., were on the

brief for the appellee.

Before MEREDITH, FALVEY, and JAQUITH, Judges.

FALVEY, Judge: Marine Corps veteran John D. McCauley, through counsel, appeals a

February 16, 2023, Board of Veterans' Appeals decision that found proper the severance of service

connection for type II diabetes, coronary artery disease (CAD) post coronary artery bypass graft,

coronary artery bypass graft scars, a non-linear superficial anterior trunk scar, a left lower

extremity scar, and a right lower extremity scar. The Board also denied service connection for

numbness and tingling of the extremities. His appeal is timely and within our jurisdiction. See

38 U.S.C. §§ 7252(a), 7266(a).

We sent this appeal to panel because it presents a unique question: if service connection

was granted on one theory that was later found to be clearly and unmistakably erroneous, must the

Board address alternative theories of entitlement that are raised by the claimant or reasonably

raised by the record before upholding severance of service connection? As we explain, we hold

that it must. This means that the severance standards of 38 C.F.R. § 3.105(d) require that the

Secretary prove that service connection cannot be granted or maintained under any reasonably

raised theory for severance of service connection to be proper.

Applied to the facts here, we find that the Secretary did not meet this burden. Despite a VA

regional office (RO) specifically flagging the need to resolve a theory of service connection based

Case: 23-1692 Page: 2 of 11 Filed: 05/20/2024

on exposure to contaminated water at Camp Lejeune on appeal, the Board found that severance

was proper without considering this theory. Thus, we will reverse the parts of the Board decision

that found that severance of service connection for diabetes, CAD, and various scars was proper

and remand these matters with instructions for the Board to reinstate service connection retroactive

to the date of severance. And because Mr. McCauley's claim for numbness and tingling of the

extremities is claimed as secondary to diabetes, we will remand this claim as well.

I. BACKGROUND

Mr. McCauley served on active duty from October 1960 to June 1965. Record (R.) at 3356.

This included service at Camp Lejeune from September 1961 to July 1962, service aboard the USS

Thomaston from April 1963 to May 1963, and service aboard the USS Comstock in May 1963.

See R. at 86, 868.

He filed a claim for heart disease in August 2016. R. at 3361-62. He contended that his

heart disease was caused either by exposure to contaminated water at Camp Lejeune or herbicide

exposure near Vietnam. Id. In November 2016, VA found that Mr. McCauley's claim of herbicide

exposure was not verified because his military records did not show service in an area of known

herbicide use or storage. R. at 3139. But the RO issued a rating decision in January 2017 that

granted service connection for diabetes and CAD "on the basis of presumption due to Agent

Orange exposure." R. at 2861-62. The RO acknowledged that Mr. McCauley had also argued that

his CAD was caused by exposure to contaminated water, but the RO declined to address this

argument because it was "a moot point as [he was] being service connected . . . due to [his]

exposure to Agent Orange," and "[c]ompensation is the same regardless of how [he was] exposed."

R. at 2861. The RO also granted service connection for coronary artery bypass grafting scars, an

anterior trunk scar, and left and right lower extremity scars, all secondary to CAD. R. at 2862 -65.

But the RO sent Mr. McCauley a letter 2 months later, in March 2017, to inform him of its

proposal to sever service connection for his disabilities. R. at 2825. The RO explained that, when

it granted service connection, it had presumed that Mr. McCauley was exposed to herbicides while

serving on the USS Comstock. R. at 2809-13. But the RO noted that the Comstock was not in the

inland waterways of the Republic of Vietnam while Mr. McCauley was onboard. Id. Thus, the RO

concluded that it erred in granting service connection on a presumptive basis. Id.

2

Case: 23-1692 Page: 3 of 11 Filed: 05/20/2024

The RO enacted its proposal in a February 2018 rating decision that severed service

connection for Mr. McCauley's claimed disabilities, effective May 1, 2018. R. at 2436-37. The

next month, Mr. McCauley filed a Notice of Disagreement. R. at 2418.

The RO issued a deferred rating decision in September 2019 that acknowledged that VA

had not addressed Mr. McCauley's contention that his disabilities were caused by contaminated

water at Camp Lejeune. R. at 1783. The RO explained that his contention "should have been

considered prior to severance, and now needs to be considered as part of the appeal of severance."

Id. The decision reflects that Mr. McCauley's appeal was therefore "transferred to the Louisville[,

Kentucky,] RO." Id.

The next year, in October 2020, the RO asked the National Archives and Records

Administration to provide any evidence that the ships that Mr. McCauley served aboard entered

the territorial sea of the Republic of Vietnam. R. at 860-61. The RO stated that it had the deck logs

from the USS Thomaston and that they did not show that the ship entered within 12 miles of the

Republic of Vietnam. R. at 861. This led to a VA memorandum in May 2022 that found that

herbicide exposure could not be conceded because evidence did not show that he had duty in the

Republic of Vietnam, its inland waterways, or eligible waters offshore. R. at 824.

VA then issued a June 2022 Statement of the Case (SOC) that purported to address Mr.

McCauley's entitlement to service connection based on the contaminated water at Camp Lejeune.

R. at 86-91. The RO wrote that "[w]e sent you a letter indicating we may consider that [your

disabilities] are associated with contaminants in the water supply at Camp Lejeune if you send us

scientific or medical evidence showing that the claimed condition is medically associated wit[h]

exposure to the contaminants . . . To-date, we have not received a response." R. at 87. Thus, VA

continued to deny service connection for Mr. McCauley's severed disabilities. R. at 86-89. It also

continued to deny service connection for numbness and tingling of all extremities. Id. Mr.

McCauley appealed to the Board, leading to the Board decision on appeal. R. at 58.

In that February 2023 decision, the Board explained that, generally, veterans who served

in the territorial sea of the Republic of Vietnam are presumed to have been exposed to an herbicide

agent. R. at 12. But the Board found that "[i]t is clear and unmistakable that [Mr. McCauley] did

not serve" in the Republic of Vietnam or its territorial sea. R. at 15. The Board also found that

there was no sign that service connection for his claimed disabilities could be granted on any other

basis. R. at 15-16, 19. Thus, the Board concluded that severance of service connection for diabetes,

3

Case: 23-1692 Page: 4 of 11 Filed: 05/20/2024

CAD, and scars was proper. R. at 5, 15. The Board then explained that Mr. McCauley's disability

manifested by numbness and tingling of the extremities was diagnosed as diabetic peripheral

neuropathy. R. at 17. And because the Board found that Mr. McCauley's diabetes was unrelated to

service, it thus denied his claim for numbness and tingling of the extremities. Id. There is no

mention in the decision of exposure to contaminated water at Camp Lejeune. This appeal followed.

II. ANALYSIS

Among other things, Mr. McCauley argues that, to determine whether severance was

proper, the Board needed to address whether his diabetes, CAD, and scars were caused by exposure

to contaminated water at Camp Lejeune. Appellant's Brief (Br.) at 11-12. Because it did not, Mr.

McCauley contends that severance is void ab initio—a legal nullity—and asks the Court to

reinstate service connection. Id. at 14; Reply Br. at 5-6. The Secretary concedes an error but, as he

sees it, the error does not void the severance. The Secretary admits that the Board erred in not

addressing Mr. McCauley's argument about exposure to contaminated water at Camp Lejeune, but

he believes that we should remand this matter for the Board to do so, not reverse the Board's

severance decision and remand with instructions for the Board to reinstate se rvice connection.

Secretary's Br. at 6-7.

The parties' dispute comes down to this: must the Board address alternative theories of

entitlement before upholding severance of service connection? In other words, what is the extent

of the Secretary's burden in severance cases—must he prove only that service connection on the

theory under which it was granted is erroneous, or must he also prove that service connection

cannot be granted based on any theory raised by the claimant or the record ?

To answer this question, we start by reviewing general principles that govern severance

and then consider how they apply when there are other potential theories of service connection in

play.

A. Severance Principles

VA's regulation that governs severance—§ 3.105(d)—explains that "service connection

will be severed only where evidence establishes that it is clearly and unmistakably erroneous (the

burden of proof being on the Government)." 38 C.F.R. § 3.105(d) (2023). Severance of service

connection based on any standard lower than this is erroneous as a matter of law. Stallworth v.

Nicholson, 20 Vet.App. 482, 488 (2006). If service connection is severed despite the Secretary not

4

Case: 23-1692 Page: 5 of 11 Filed: 05/20/2024

having met his burden, the severance is void ab initio—a legal nullity. See King v. Shinseki,

26 Vet.App. 484, 492 (2014) (explaining that VA's failure to observe applicable law when severing

benefits renders the severance void ab initio); Wilson v. West, 11 Vet.App. 383, 386-87 (1998)

(finding a termination of benefits "fatally flawed" because VA failed to apply the provisions of

§ 3.105(d) when it severed service connection). When that happens, the proper remedy is for us to

reverse the Board decision with instructions to reinstate service connection for the severed

disabilities, retroactive to the date of severance. King, 26 Vet.App. at 492-93.

But what does it mean for the Secretary to meet his burden? And what exactly is that burden

in a severance case? The regulation tells us that the Secretary must show that service connection

"is clearly and unmistakably erroneous." 38 C.F.R. § 3.105(d). And we have sometimes equated

the Secretary's burden when severing service connection to a claimant's burden when proving clear

and unmistakable error (CUE) in a final decision. See, e.g., Wilson, 11 Vet.App. at 386-87. Yet

there is an important difference between the two standards.

A CUE challenge is retrospective—did VA commit clear and unmistakable error when it

denied benefits? And because the challenge is retrospective, the claimant must show that when

VA denied benefits, it made an error based on the record and the law that existed at the time of the

decision. Russell v. Principi, 3 Vet.App. 310, 314 (1992) (en banc). After all, it would be hard to

blame VA for not considering evidence it did not yet have or for not applying a law not yet in

effect.

Unlike CUE, severance is anchored in the present. As the regulation says, "service

connection will be severed only where evidence establishes that it is clearly and unmistakably

erroneous." 38 C.F.R. § 3.105(d) (emphasis added). This means that the Secretary must prove that

it is currently clearly and unmistakably erroneous for the claimant to be service connected. See

Stallworth, 20 Vet.App. at 488 ("[T]he severance decision focuses—not on whether the original

decision was clearly erroneous—but on whether the current 'evidence establishes that [service

connection] is clearly erroneous.'" (quoting 38 C.F.R. § 3.105(d) (second alteration in original)).

This means that the Secretary's job is not done if he only shows that the theory on which service

connection was originally granted was erroneous—that would not necessarily prove that

maintaining service connection is clearly erroneous. To prove that service connection is currently

clearly erroneous, the Secretary needs to show that service connection can not be granted or

maintained under any theory. After all, if unresolved theories could maintain service connection,

5

Case: 23-1692 Page: 6 of 11 Filed: 05/20/2024

the Secretary cannot show that service connection "is clearly and unmistakably erroneous."

38 C.F.R. § 3.105(d).

But, as our caselaw makes clear, this does not mean that VA must perform "the impossible

task of inventing and rejecting every conceivable" alternative theory for service connection for

severance to be proper. Robinson v. Peake, 21 Vet.App. 545, 553 (2008), aff'd sub nom. Robinson

v. Shinseki, 557 F.3d 1355 (Fed. Cir. 2009). Instead, when a severance decision is appealed, VA,

in determining whether severance was proper, need only address any theories raised by the

claimant or the record. See id. at 552-53. Thus, if the claimant or the record raised an alternate

theory of service connection, VA needs to run that theory to ground and determine whether it can

lead to benefits before upholding a decision to sever service connection. To do otherwise would

mean that the Secretary is shirking his burden under § 3.105(d). When this happens—that is, when

the Secretary abandons his burden in a severance case—the appropriate remedy is for us to find

severance void ab initio and have VA reinstate service connection for the severed disabilities.

King, 26 Vet.App. at 492-93.

Tying this all together, we see that in considering whether severance of service connection

is proper, the Board must address alternative theories of entitlement that are raised by the claimant

or reasonably raised by the record. If the Board upholds a severance decision without doing so, it

has failed to satisfy the severance standards of § 3.105(d). And this means that the severance is

void ab initio. For us, this means that when we review such a case, we will reverse the Board's

finding that severance was proper and remand the matter to the Board with instructions to reinstate

service connection retroactive to the date of severance.

B. Application

Applying this to Mr. McCauley's case yields a straight-forward analysis. When Mr.

McCauley sought benefits, he stated that his heart disease was caused either by exposure to

contaminated water at Camp Lejeune or herbicide exposure near Vietnam. R. at 3350, 3361-62.

The RO decision that granted service connection was based on presumptive herbicide exposure; it

did not address whether the theory of exposure to contaminated water at Camp Lejeune could lead

to service connection. We don't fault VA for not addressing this theory—there was no reason for

it to consider whether additional arguments could yield the same benefits it was already granting.

But the Secretary's burden in severing benefits requires that he show that service connection is

clearly erroneous. And here, this means that, when the Board considered Mr. McCauley's challenge

6

Case: 23-1692 Page: 7 of 11 Filed: 05/20/2024

of the severance decision, the Board needed to address whether he could maintain service

connection based on the raised but unresolved theory of exposure to contaminated water at Camp

Lejeune.

Here, the RO did not address this theory in the February 2018 rating decision that severed

service connection. It seemed to recognize its mistake in the September 2019 deferred rating

decision; the RO acknowledged that the theory "should have been considered prior to severance,

and now needs to be considered as part of the appeal of severance." R. at 1783. Rather than address

the theory head on, however, the RO seemed to pass it on to the Board.

True, the RO acknowledged the theory in the June 2022 SOC, but said it would only

consider it if Mr. McCauley submitted evidence of a nexus between exposure and his disabilities.

Recall that VA told him that "[w]e sent you a letter indicating we may consider that [your claimed

disabilities] are associated with contaminants in the water supply at Camp Lejeune if you send us

scientific or medical evidence showing that the claimed condition[s are] medical associated wit[h]

exposure to the contaminants. . . . To-date, we have not received a response." R. at 87, 89.

We need not delve into whether this brief acknowledgment from the RO sufficiently

considers whether Mr. McCauley could maintain service connection under the theory of exposure

to contaminated water at Camp Lejeune, because when he appealed to the Board, he indicated that

he was appealing all issues addressed in the SOC, R. at 58, but the Board ignored the Camp

Lejeune line of inquiry. The Board found that severance was proper without mentioning

contaminated water at Camp Lejeune and with no consideration of whether Mr. McCauley could

maintain service connection under this theory. Because the Board upheld a severance without

ensuring that service connection is clearly erroneous—the standard required by § 3.105(d)—the

severance is void. See King, 26 Vet.App. at 492; Stallworth, 20 Vet.App. at 488.

Even so, the Secretary asks us to remand the matter. He admits that the Board needed to

address the theory of contaminated water at Camp Lejeune. But he believes the Board's failure to

do so calls for us to remand to have the Board address the theory, not for us to outright reinstate

service connection. Secretary's Br. at 7. At first blush, this makes sense. In most instances when

the Board neglects to address a reasonably raised theory of entitlement, we generally send the

claim back to the Board so that it may so do in the first instance. See Robinson, 557 F.3d at 1362.

But the Secretary's framing undersells the Board's error here and misunderstands the unique nature

of severance cases.

7

Case: 23-1692 Page: 8 of 11 Filed: 05/20/2024

There is a difference between regular service connection or "increase cases"—cases in

which a veteran seeks a benefit—and cases in which VA is trying to reduce or take away a benefit.

See Schafrath v. Derwinski, 1 Vet.App. 589, 596 (1991). Most of the appeals we see are cases in

which it is the veteran trying to prove his or her right to a benefit. And in those cases, if the Board

fails to address an expressly or reasonably raised argument, we typically remand the claim1 for the

Board to do so in the first instance. See Barringer v. Peake, 22 Vet.App. 242, 245 (2008). But

severance cases are different—the burden is on the Secretary to prove that the severance is

warranted. If the Secretary fails to meet this burden but still severs service connection, his failure

to satisfy the standard of § 3.105(d) means the severance is void ab initio. King, 26 Vet.App. at

492. And if the severance is void, we send the case back to have VA reinstate the benefit. Id.

That's what happened here. The Board failed to consider a properly raised theory of service

connection. This means it failed to show that service connection "is clearly and unmistakably

erroneous." 38 C.F.R. § 3.105(d). Thus, the Board failed to follow the standards laid out in

§ 3.105(d) when it upheld the severance of benefits. For this reason, VA's severance is void ab

initio and the proper remedy is to reverse the Board's finding that severance was proper and remand

the matter to the Board with instructions to reinstate service connection. So that is what we do

here; we hold that the Board erred by failing to prove that another expressly raised theory of service

connection would not support a grant of benefits before upholding the severance of service

connection. And because this means that severance is void, we reverse the Board's finding that

severance was proper and remand the matters of benefits for diabetes, CAD, and various scars

1

Of course, the Court must "take due account of the rule of prejudicial error" before remanding based on

Board error. 38 U.S.C. § 7261(b)(2); see Shinseki v. Sanders, 556 U.S. 396, 409 (2009) (holding that the harmless-

error analysis applies to the Court's review of Board decisions and that the burden is on the appellant to show that he

or she suffered prejudice as a result of VA error).

8

Case: 23-1692 Page: 9 of 11 Filed: 05/20/2024

back to the Board with instructions to reinstate service connection retroactive to the date of

severance, May 1, 2018.2 See King, 26 Vet.App. at 492.

Before we conclude our severance analysis, we note that our decision does not prevent the

Secretary from again attempting to sever service connection for Mr. McCauley's disabilities. See

King, 26 Vet.App. at 493. But "[w]hen and if the Secretary elects to do so, he will be required to

proceed prospectively in a manner consistent with this opinion." Schafrath, 1 Vet.App. at 596.

C. Service Connection for Numbness and Tingling of the Extremities

This brings us to back to some common ground between the parties. Both agree that we

should remand Mr. McCauley's claim for numbness and tingling of the extremities because it is

intertwined with his diabetes claim. Appellant's Br. at 13; Secretary's Br. at 8. We agree with the

parties.

The Board stated that Mr. McCauley's disability manifested by numbness and tingling of

the extremities was diagnosed as diabetic peripheral neuropathy. And because service connection

for diabetes was severed as unrelated to service, the Board denied his claim for diabetic peripheral

neuropathy. R. at 17. But, after this decision, Mr. McCauley will be service connected for diabetes

again. So we will remand his numbness and tingling claim so that the Board can consider it

alongside the restored service connection for diabetes. See Smith v. Gober, 236 F.3d 1370, 1372

(Fed. Cir. 2001) (explaining that when "two claims are sufficiently intertwined . . . they should be

considered together").

2

This is not to say that any error by the Board means that severance is void or requires reversal. Instead, our

disposition relies on the established rule that severance is void if VA fails to follow the standards of § 3.105(d). See,

e.g., Hedgepeth v. Wilkie, 30 Vet.App. 318, 328-29 (2018) (finding severance void because VA failed to adhere to

§ 3.105(d) when it incorrectly shifted the burden of proof from the Secretary to the appellant); Wilson, 11 Vet.App. at

386-87 (finding severance void because VA failed to give notice of proposed severance as required by § 3.105(d)).

But admittedly, our caselaw has been less clear about what happens when the Board makes an error in a severance

case that does not contravene the standards of § 3.105(d). See, e.g., King, 26 Vet.App. at 492-93 (suggesting that a

reasons-or-bases error voids severance and requires that we instruct the Board to reinstate service connection).

In Stern v. McDonough, we explored this issue in the context of reduction cases and gave examples when we

have found a reduction void and reversed the Board decision upholding reduction, versus when we have remanded

without finding the reduction void. 34 Vet.App. 51, 56-59 (2021). But we did not draw a firm line between reversable

and remandable errors in reduction cases—it was unnecessary to do so to decide the case. Id. at 60 ("[T]he Court need

not decide today where the line must be drawn between remandable and reversible Board errors."). The same holds

true today; we need not yet draw the line in severance cases. We leave that work for another day.

9

Case: 23-1692 Page: 10 of 11 Filed: 05/20/2024

D. Additional Arguments

Mr. McCauley makes several other arguments. For example, he contends that the Board

needed to provide him a medical examination to evaluate whether his disabilities were caused by

contaminated water at Camp Lejeune. Appellant's Br. at 12. And he argues that VA failed to satisfy

its duty to assist and the Board erred when it found that the USS Thomaston did not operate in the

territorial sea of the Republic of Vietnam while he was onboard because it overlooked evidence in

ship's deck logs. Id. at 7-11. But we need not now address these arguments because they would

lead to no greater remedy than what we have already provided; Mr. McCauley's grant of service

connection is being restored.3 See Mahl v. Principi, 15 Vet.App. 37, 38 (2001) (per curiam order).

Mr. McCauley also argues that, not only did the Board err by not reinstating service

connection for his severed disabilities, it violated its duty to maximize benefits by not increasing

his previously assigned ratings for diabetes and CAD. Appellant's Br. at 13-14. This argument is

a bit premature. The Board found that severance of service connection was pro per. And we can't

say that the Board erred in not increasing his ratings with no ratings for the Board to increase. But,

because we are remanding the matters of diabetes and CAD with instructions to reinstate the

severed benefits, he can argue for a higher rating at the Board if he believes the issue is properly

before the Board.

III. CONCLUSION

Based on the above, the parts of the February 16, 2023, Board decision that found proper

the severance of service connection for diabetes, CAD, coronary artery bypass graft scars, a non-

linear superficial anterior trunk scar, a left lower extremity scar, and a right lower extremity scar

are REVERSED. These matters are REMANDED with instructions for the Board to reinstate

service connection for these disabilities retroactive to May 1, 2018. The part of the Board decision

3

Although we are not addressing Mr. McCauley's arguments concerning service connection based on

presumptive herbicide exposure aboard the USS Thomaston, we note that the Secretary acknowledged that in

December 2023, after the Board decision on appeal, VA changed how it processes claims involving shipboard service

and herbicide exposure. Claims of herbicide exposure in Republic of Vietnam nautical locations or nautical-based

service are now developed and researched by centralized processing teams to determine whether a veteran's shipboard

service qualifies for presumptive herbicide exposure. Secretary's Br. at 15; see VA Adjudication Procedures Manual,

M21-1, pt. VIII, subpt. i, ch. 1, § A(1)(c)-(e) (change date Dec. 4, 2023). Should the Secretary attempt to sever service

connection in the future, we expect that he will not do so until a centralized processing team has researched and

developed Mr. McCauley's USS Thomaston arguments in accordance with the M21-1.

10

Case: 23-1692 Page: 11 of 11 Filed: 05/20/2024

that denied service connection for numbness and tingling of the extremities is SET ASIDE, and

the matter is REMANDED.

11