Carlton A. Pace v. Douglas A. Collins, Secretary of Veterans Affairs

N OTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
CARLTON A. PACE,
Claimant-Appellant
v.
DOUGLAS A. COLLINS, SECRETARY OF
VETERANS AFFAIRS,
Respondent-Appellee
______________________
2024-1211
______________________
Appeal from the United States Court of Appeals for
Veterans Claims in No. 22-5272, Judge Grant Jaquith.
______________________
Decided: July 22, 2025
______________________
J OHN D. N ILES , Carpenter Chartered, Topeka, KS, ar-
gued for claimant-appellant. Also represented by MARK
RYAN L IPPMAN, The Veterans Law Group, Poway, CA.
G ALINA I. F OMENKOVA, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Wash-
ington, DC, argued for respondent-appellee. Also repre-
sented by BRIAN M. BOYNTON, P ATRICIA M. MCCARTHY ;
L OREN MISHA P REHEIM ; CHRISTOPHER O. ADELOYE, D EREK
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PACE v. COLLINS 2
SCADDEN, Office of General Counsel, United States Depart-
ment of Veterans Affairs, Washington, DC.
______________________
Before P ROST , REYNA, and STARK, Circuit Judges.
REYNA, Circuit Judge.
Carlton A. Pace appeals from a final decision of the
United States Court of Appeals for Veterans Claims that
affirmed the Board of Veterans’ Appeals’ determination
that his April 3, 2006 rating decision did not contain clear
and unmistakable error, or CUE. For the reasons stated
below, we affirm.
BACKGROUND
Carlton A. Pace served on active duty in the United
States Navy from July 1985 to August 1985. In 1998, the
Department of Veterans Affairs (“VA”) granted him service
connection for major depression and assigned a 10% disa-
bility rating. After Mr. Pace’s September 1998 VA exam
showed worsening depression symptoms, the VA increased
the rating to 100% effective December 3, 1998. The VA
noted that Mr. Pace would be scheduled for a future exam
because his condition was subject to change. In May 1999,
Mr. Pace requested a permanent 100% rating. The VA de-
nied this request, reasoning that Mr. Pace’s condition could
improve before his VA reevaluation exam in 2001.
In April 2001, a VA exam showed that Mr. Pace was
enrolled in college and working part-time, despite his con-
tinued depression. The next month, the VA continued
his 100% rating because, although there was evidence his
condition was improving, there was “no evidence showing
sustained improvement.” J.A. 31 (emphasis added);
J.A. 34. Later, at Mr. Pace’s July 2005 exam, the VA found
that he was married, socially active, working part-time,
and not anxious or depressed. In August 2005, the VA pro-
posed reducing his rating to 50% based on the July 2005
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PACE v. COLLINS 3
exam and his 2002–2005 medical records. The VA adopted
the 50% reduction on April 3, 2006. Mr. Pace did not ap-
peal the April 2006 rating decision, and thus the rating de-
cision became final.
In February 2015, Mr. Pace filed a motion with the
Board of Veterans’ Appeals (“Board”), alleging that his
April 2006 rating decision contained clear and unmistaka-
ble error (“CUE”). Mr. Pace alleged the VA failed to comply
with 38 C.F.R. § 3.343(a). Section 3.343(a) provides that a
total disability rating will not be reduced “without exami-
nation showing material improvement.” 38 C.F.R.
§ 3.343(a). Mr. Pace argued that the VA failed to compare
his April 2001 exam (which continued his 100% rating)
with his July 2005 exam (which reduced it to 50%)—a com-
parison he asserted would have shown no material im-
provement. The Board denied that motion, and Mr. Pace
appealed.
In November 2021, the United States Court of Appeals
for Veterans Claims (“Veterans Court”) vacated and re-
manded the Board’s decision, determining that the Board
failed to adequately address Mr. Pace’s failure to compare
argument. On remand, the Board denied the motion, find-
ing that the VA correctly applied both §§ 3.343 and 3.344.
Section 3.344 requires a showing of “sustained improve-
ment” to reduce ratings in effect for five years or more
where the condition is subject to temporary improve-
ment. 38 C.F.R. § 3.344(a), (c). The Board determined a
reasonable person could conclude there was “sustained ma-
terial improvement” in Mr. Pace’s condition, and therefore
the Board found no CUE in the April 2006 rating decision.
J.A. 13, 22–23. The Veterans Court affirmed the Board’s
finding of no CUE.
Mr. Pace timely appealed to this court. We have juris-
diction under 38 U.S.C. § 7292(a).
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PACE v. COLLINS 4
STANDARD OF REVIEW
Our jurisdiction to review decisions of the Veterans
Court is defined by statute. Scott v. Wilkie, 920 F.3d 1375,
1377 (Fed. Cir. 2019). We may review “any challenge to
the validity of any statute or regulation or any interpreta-
tion thereof” in an appeal from a Veterans Court deci-
sion. 38 U.S.C. § 7292(c). We may also “interpret
constitutional and statutory provisions” when such issues
are “presented and necessary to a decision.” Id. Unless a
constitutional challenge is presented, we “may not re-
view (A) a challenge to a factual determination, or (B) a
challenge to a law or regulation as applied to the facts of a
particular case.” 38 U.S.C. § 7292(d)(2). We review claims
of legal error in a decision of the Veterans Court without
deference. George v. McDonough, 991 F.3d 1227, 1233
(Fed. Cir. 2021), aff’d, 596 U.S. 740 (2022).
D ISCUSSION
I.
Mr. Pace challenges the Veterans Court’s determina-
tion that the Board correctly concluded there was no CUE
in the VA’s April 3, 2006, rating reduction decision. Appel-
lant Br. 17; see also Appellant Reply Br. 6. A motion for
revision based on CUE is a statutorily authorized collateral
attack on a final decision of the Board that, if successful,
results in a “reversed or revised” decision having “the same
effect as if [it] had been made on the date of the [original]
decision.” See 38 U.S.C. § 7111(a)–(b). CUE is a “very spe-
cific and rare kind of error.” See 38 C.F.R. § 3.105(a)(1). To
prove CUE, a claimant must demonstrate three elements:
(1) “[e]ither the correct facts, as they were known at the
time, were not before the adjudicator or the statutory or
regulatory provisions extant at the time were incorrectly
applied,” (2) the error is “undebatable,” meaning reasona-
ble minds could not differ, and (3) the error would have
“manifestly changed the outcome at the time it was made.”
George, 991 F.3d at 1233 (citation omitted) (emphasis in
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PACE v. COLLINS 5
original); see also Siples v. Collins, 127 F.4th 1325, 1330
(Fed. Cir. 2025). This analysis “must be based on the rec-
ord and the law that existed at the time of the prior adju-
dication in question.” George, 991 F.3d at 1233 (citation
omitted).
II.
Mr. Pace asserts that both the Veterans Court’s and
the Board’s decisions were based on a misunderstanding of
what is necessary to reduce a total disability rating un-
der 38 C.F.R. §§ 3.343(a) and 3.344(a). Appellant Br. 8–17.
Mr. Pace contends that the Veterans Court erred in holding
that the regulations permit rating reductions based on “a
single showing of sustained material improvement” in the
entire medical record. Id. at 8 (emphasis added). Rather,
he contends the regulations require two separate eviden-
tiary showings: (1) an initial showing of “material improve-
ment” under § 3.343(a) that is based on only a comparison
of the most recent examinations supporting the rating con-
tinuation and reduction, and (2) a secondary showing of
“sustained material improvement” under § 3.344(a) that is
based on a review of the entire record. Id. 8–9; see also
Appellant Reply Br. 2–5.
We disagree with Mr. Pace’s assertion that the Veter-
ans Court’s understanding of §§ 3.343(a) and 3.344(a) war-
rants finding CUE. Mr. Pace’s challenge implicates only
the first element of CUE, i.e., an incorrect application of a
regulation. “[A] legal-based CUE requires a misapplication
of the law as it was understood at that time, and cannot
arise from a subsequent change in interpretation of law by
the agency or judiciary[.]” George, 991 F.3d at 1229 (em-
phasis added). Thus, the relevant inquiry here is whether
the Board misinterpreted the requirements for reducing a
total disability rating based on how the disputed regula-
tions were understood in April 2006. Siples, 127 F.4th
at 1332.
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PACE v. COLLINS 6
The Veterans Court’s decision in Collier v. Derwinski,
2 Vet. App. 247 (1992), establishes its understanding of the
disputed regulations at the time relevant to this appeal.
This is because Collier predates Mr. Pace’s April 2006 rat-
ing decision, addresses the rating reduction requirements
under 38 C.F.R. §§ 3.343(a) and 3.344(a), and is analogous
to the present facts. Collier, 2 Vet. App. at 247–50. In Col-
lier, the VA initially continued a veteran’s 100% rating de-
spite evidence of improvement in his condition. Id. To
support the continuation, the VA applied § 3.344, which re-
quires a showing of sustained improvement before reducing
a rating. Id. The VA later reduced the rating to 70% after
an exam revealed the disability was no longer a “totally
disabling one.” Id. at 248–49. The Veterans Court af-
firmed the rating decision after noting a documented im-
provement in the veteran’s condition over a period of five
years prior to the reduction. Id. at 250. It determined that:
If the VA has chosen to continue a rating not ap-
parently justified by current symptoms to see if
“sustained improvement” is shown under 38 C.F.R.
§ 3.344(a), . . . a comparison between all the exami-
nations prior to such “continuation” and the current
examination may be necessary rather than just a
comparison between the last examination and the
current examination . . . .
Id. (citing 38 C.F.R. § 3.343(a)) (emphasis added). Thus,
the Veterans Court determined the disputed regulations
supported the VA’s rating reduction based on a finding of
“sustained improvement” as evidenced in the broader med-
ical record.
Here, the VA similarly reduced Mr. Pace’s disability
rating after the “totality of the evidence” demonstrated
“material, sustained improvement” in his condition. J.A. 2.
The Veterans Court therefore appropriately cites Collier in
support of its conclusion that the VA’s review of the full
medical record to support its April 2006 rating decision was
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PACE v. COLLINS 7
consistent with the general understanding of 38 C.F.R.
§§ 3.343(a) and 3.344(a) at that time. J.A. 6–7. We see no
CUE in the Veterans Court’s final determination, and on
that basis, we affirm the decision of the Veterans Court.
CONCLUSION
We have considered Mr. Pace’s remaining arguments
and find them unpersuasive. For the reasons provided, we
affirm the Veterans Court’s decision that Mr. Pace’s
April 3, 2006 rating decision did not contain CUE.
AFFIRMED
COSTS
No costs.
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