Veteranclaims’s Blog

August 1, 2013

Kernea v. Shinseki, No. 2012-7142 (Decided: August 1, 2013); 38 C.F.R. § 3.10(f)(3); Hypothetical Entitlement Claims; Entitled to Receive

Excerpt from decision below:

“Hypothetical entitlement claims, also referred to as “new claims,” would permit the Board to adjudicate a claim for DIC benefits on
a hypothetical basis, “without regard to claim filing or
claim dispositions during the veteran’s lifetime.” Nat’l
Org. of Veterans’ Advocates, Inc. v. Sec’y of Veterans
Affairs, 314 F.3d 1373, 1377 (Fed. Cir. 2003) (“NOVA II”).
In other words, the Board could make a “de novo determination
of the veteran’s disability, upon the entirety of the
record including any new evidence presented by the
surviving spouse.” Hix v. Gober, 225 F.3d 1377, 1380-81
(Fed. Cir. 2000).
The permissibility of hypothetical entitlement claims
under § 1311(a)(2) has changed in recent years. In 2000,
in our opinion in Hix, we held—on the basis of VA regulations
that were in effect at the time—that hypothetical
entitlement claims were allowed under § 1311(a)(2). Id.
However, the VA later interpreted the phrase “entitled to

FLORA KERNEA v. SHINSEKI 7

receive” as prohibiting hypothetical entitlement claims,
and we affirmed that interpretation in January 2003 in
our opinion in NOVA II. 314 F.3d at 1378. We found that
the VA nevertheless had not adequately revised the
implementing regulations for § 1311(a)(2) and therefore
required the VA to conduct further rulemaking proceedings.
See id. at 1381-82. As a result of our decision in
NOVA II, the VA promulgated 38 C.F.R. § 3.10(f)(3),
which again interpreted the phrase “entitled to receive” in
§ 1311(a)(2) as prohibiting hypothetical entitlement
claims. See Dependency and Indemnity Compensation:
Surviving Spouse’s Rate; Payments Based on Veteran’s
Entitlement to Compensation for Service-Connected
Disability Rated Totally Disabling for Specified Periods
Prior to Death, 70 Fed. Reg. 72,211 (Dec. 2, 2005). The
new regulation was effective December 2, 2005, and it
applied to new claims for enhanced DIC benefits as well
as claims pending before the VA on that date. Id. at
72,212. We sustained the VA’s promulgation of
§ 3.10(f)(3) in National Organization of Veterans’ Advocates,
Inc. v. Secretary of Veterans Affairs, 476 F.3d 872,
877 (Fed. Cir. 2007).”
===========================

“We recognize that the VA still had more work to do after
our NOVA II opinion. More specifically, in NOVA II,
we faulted the VA for failing to amend the implementing
regulations for § 1311(a)(2) to make them consistent with
38 C.F.R. § 3.22, the regulation implementing § 1318. See
id. at 1377, 1381. We remanded for further rulemaking
proceedings so that the VA could harmonize the implementing
regulations for §§ 1311(a)(2) and 1318. Id. at
1381. This is what led the VA to promulgate § 3.10(f)(3),
which included “a definition of the phrase ‘entitled to
receive’ that . . . parallel[ed] the definition set forth in
§ 3.22(b).” 70 Fed. Reg. 72,211, 72,212 (Dec. 2, 2005).”
==========================

United States Court of Appeals
for the Federal Circuit
______________________
FLORA L. KERNEA,
Claimant-Appellant,
v.
ERIC K. SHINSEKI, Secretary of Veterans Affairs,
Respondent-Appellee.
______________________
2012-7142
______________________
Appeal from the United States Court of Appeals for
Veterans Claims in No. 10-2658, Chief Judge Bruce E.
Kasold.
______________________
Decided: August 1, 2013
______________________
WILLIAM S. FOSTER, JR., BAKER BOTTS, LLP, of Washington,
DC, argued for claimant-appellant.
ALLISON KIDD-MILLER, Senior Trial Counsel, Commercial
Litigation Branch, Civil Division, United States
Department of Justice, of Washington, DC, argued for
respondent-appellee. With her on the brief were STUART
F. DELERY, Principal Deputy Assistant Attorney General,
JEANNE E. DAVIDSON, Director, and MARTIN F. HOCKEY,
JR., Assistant Director. Of counsel on the brief were
DAVID J. BARRANS, Deputy Assistant General Counsel and
2 FLORA KERNEA v. SHINSEKI
MARTIE ADELMAN, Attorney, United States Department of
Veterans Affairs, of Washington, DC.
______________________
Before NEWMAN, DYK, and PROST, Circuit Judges.
PROST, Circuit Judge.
Flora L. Kernea appeals from a decision of the U.S.
Court of Appeals for Veterans Claims (“Veterans Court”),
which affirmed a decision of the Board of Veterans’ Appeals
(“Board”) denying Ms. Kernea’s claim for enhanced
dependency and indemnity compensation under 38 U.S.C.
§ 1311(a)(2). We affirm.
I. BACKGROUND
Ms. Kernea is the widow of Donald E. Kernea, a veteran
of World War II who was honorably discharged from
the Navy in April 1945 after being diagnosed with diabetes
mellitus. At the time of his discharge, the Department
of Veterans Affairs (“VA”) found Mr. Kernea’s diabetes to
be service-connected and awarded him monthly payments
based on a disability rating of 40%.
Beginning in 1950, and continuing for the next couple
of decades, Mr. Kernea was hospitalized at various times
as he suffered complications and declining health as a
result of his diabetes. On multiple occasions, Mr. Kernea
requested increases in his disability rating and payments,
but his requests were denied. In April 1961, the Tennessee
VA Regional Office again denied a request to increase
Mr. Kernea’s disability rating. In June 1961, however,
the Director of the Compensation and Pension Service
found “clear and unmistakable error” in the Regional
Office’s decision and increased Mr. Kernea’s disability
rating to 60%, effective March 14, 1961. Ultimately, Mr.
Kernea’s disability rating was increased to 100%, effective
December 13, 1965.
FLORA KERNEA v. SHINSEKI 3
Mr. Kernea died on February 23, 1969 as a result of
complications from his service-connected diabetes. Ms.
Kernea, who had been married to Mr. Kernea since 1953,
applied for dependency and indemnity compensation
(“DIC benefits”) under 38 U.S.C. § 1310, which provides
DIC benefits to survivors of a veteran who died from a
service-connected or compensable disability. Ms. Kernea’s
request was granted in April 1969.
In June 2003, Ms. Kernea filed a claim under 38
U.S.C. § 1311(a)(2), which provides that a veteran’s
surviving spouse may qualify for increased DIC benefits if
the veteran received “or was entitled to receive . . . compensation
for a service-connected disability that was rated
totally disabling for a continuous period of at least eight
years immediately preceding death.” Id. (emphasis added).
When Mr. Kernea died in 1969, he had been rated
totally disabled for less than four years. Nevertheless,
Ms. Kernea’s claim stated: “I request the VA grant me the
additional $204.00[1] Eight year rule. The above veteran
was 100% for over 8 years and I was married to him for
over 8 years.” J.A. 351. The VA denied Ms. Kernea’s
claim on July 3, 2003.
In the ensuing years, Ms. Kernea pursued her claim
on appeal, first to the Board, then to the Veterans Court,
and later on remand from the Veterans Court to the
Board. In those proceedings, Ms. Kernea advanced two
separate theories to support her claim that Mr. Kernea
was “entitled to receive” a 100% disability rating for at
least the last eight years of his life, as required by
§ 1311(a)(2). First, she claimed clear and unmistakable
1 Congress has amended § 1311(a)(2) through the
years to adjust the amount of increased DIC benefits.
When Ms. Kernea filed her claim in 2003, the statutory
amount was $204 per month. The current version of the
statute provides for an increase of $246 per month.
4 FLORA KERNEA v. SHINSEKI
error (“CUE”) in the VA’s disability rating decisions made
during Mr. Kernea’s lifetime. Second, she sought to
substantiate her claim based on a “hypothetical entitlement”
theory—i.e., by demonstrating, on a hypothetical
basis and without regard to claim dispositions during his
lifetime, that Mr. Kernea was totally disabled for at least
the last eight years of his life.
On July 15, 2010, the Board affirmed the VA’s denial
of Ms. Kernea’s claim. Regarding her CUE claim, the
Board found that Ms. Kernea had “not identified a specific
error, or even a specific rating decision, that she believes
contains CUE.” J.A. 117. Nor had she “provided any
reasons explaining why the result of an unidentified final
rating decision would have been manifestly different but
for the alleged error.” Id. Concluding that Ms. Kernea’s
only argument in support of her CUE claim consisted of
“bare statements that the Veteran should have been rated
as 100 percent disabled at an earlier date,” the Board
denied her CUE claim without prejudice. J.A. 118.
As for Ms. Kernea’s hypothetical entitlement claim,
the Board found that it was barred by 38 C.F.R.
§ 3.10(f)(3), a regulation promulgated by the VA in 2005
that interpreted the phrase “entitled to receive” in
§ 1311(a)(2) as prohibiting hypothetical entitlement
claims. In reaching this conclusion, the Board considered
whether the application of § 3.10(f)(3) to Ms. Kernea’s
June 2003 claim was unlawfully retroactive. The Board
analyzed this question using the retroactivity analysis set
forth in Princess Cruises, Inc. v. United States, 397 F.3d
1358 (Fed. Cir. 2005). In Princess Cruises, we relied on
the Supreme Court’s opinion in Landgraf v. USI Film
Products, 511 U.S. 244 (1994), to identify three factors for
determining whether applying an agency’s newly-issued
regulation or ruling to conduct predating its issuance
“would have retroactive effect,” and therefore be presumptively
improper. See id. at 1362, 1364. The three factors
are: (1) “the nature and extent of the change of the law”;
FLORA KERNEA v. SHINSEKI 5
(2) “the degree of connection between the operation of the
new rule and a relevant past event”; and (3) “familiar
considerations of fair notice, reasonable reliance, and
settled expectations.” Princess Cruises, 397 F.3d at 1364
(internal quotation marks omitted). Applying these
factors to this case, the Board determined that: (1) the
change in the law effected by § 3.10(f)(3) was not substantial
because the regulation’s interpretation of “entitled to
receive” was consistent with, and merely clarified, the
VA’s interpretation of that phrase; (2) there was no indication
that Ms. Kernea relied on the prior interpretation
of § 1311(a)(2) to her detriment, or that she would have
acted differently had the law not been changed; and
(3) Ms. Kernea had fair notice of the change in law, could
not have had “settled expectations” of the law, and could
not have relied on the theory of hypothetical entitlement
when she filed her claim because it had been the VA’s
“consistent policy to not allow this approach.” J.A. 124-
25. The Board therefore concluded that applying
§ 3.10(f)(3) to Ms. Kernea’s claim did not have “an unlawful
retroactive effect.” J.A. 125.
After concluding that § 3.10(f)(3) applied retroactively
to bar Ms. Kernea’s reliance on a theory of hypothetical
entitlement, the Board analyzed her claim solely on the
basis of the disability ratings made during Mr. Kernea’s
lifetime. Because Mr. Kernea was not assigned a 100%
disability rating until December 13, 1965, and he died less
than four years later on February 23, 1969, he was not
rated 100% disabled for “at least eight years immediately
preceding death.” § 1311(a)(2). Accordingly, the Board
denied Ms. Kernea’s claim for increased DIC benefits.
Ms. Kernea appealed to the Veterans Court, which affirmed
the Board in a single-judge decision on March 14,
2012. The decision affirmed the Board’s conclusion that
Ms. Kernea could not substantiate her claim for enhanced
DIC benefits through the hypothetical entitlement theory,
explaining that “the Board’s findings of fact are plausible
6 FLORA KERNEA v. SHINSEKI
and not clearly erroneous, and the Board properly applied
the Princess Cruises criteria when determining that
§ 3.10(f)(3) could be applied retroactively.” J.A. 6. The
decision also affirmed the Board’s dismissal of Ms. Kernea’s
motion for revision based on CUE, finding that “the
only statement in the record she identifie[d] as raising
CUE merely asserts that her husband ‘was entitled to the
whole eight years’ of benefits, a statement that posits no
specific assertion of error.” Id.
Following a motion for reconsideration by Ms. Kernea,
a panel of the Veterans Court affirmed its prior decision
and entered final judgment on May 30, 2012. See J.A. 1-
3. Ms. Kernea appealed to this court.

II. DISCUSSION
A
The first issue Ms. Kernea raises on appeal is the denial
of her claim for enhanced DIC benefits based on the
hypothetical entitlement theory. Hypothetical entitlement
claims, also referred to as “new claims,” would
permit the Board to adjudicate a claim for DIC benefits on
a hypothetical basis, “without regard to claim filing or
claim dispositions during the veteran’s lifetime.” Nat’l
Org. of Veterans’ Advocates, Inc. v. Sec’y of Veterans
Affairs, 314 F.3d 1373, 1377 (Fed. Cir. 2003) (“NOVA II”).
In other words, the Board could make a “de novo determination
of the veteran’s disability, upon the entirety of the
record including any new evidence presented by the
surviving spouse.” Hix v. Gober, 225 F.3d 1377, 1380-81
(Fed. Cir. 2000).
The permissibility of hypothetical entitlement claims
under § 1311(a)(2) has changed in recent years. In 2000,
in our opinion in Hix, we held—on the basis of VA regulations
that were in effect at the time—that hypothetical
entitlement claims were allowed under § 1311(a)(2). Id.
However, the VA later interpreted the phrase “entitled to

FLORA KERNEA v. SHINSEKI 7

receive” as prohibiting hypothetical entitlement claims,
and we affirmed that interpretation in January 2003 in
our opinion in NOVA II. 314 F.3d at 1378. We found that
the VA nevertheless had not adequately revised the
implementing regulations for § 1311(a)(2) and therefore
required the VA to conduct further rulemaking proceedings.
See id. at 1381-82. As a result of our decision in
NOVA II, the VA promulgated 38 C.F.R. § 3.10(f)(3),
which again interpreted the phrase “entitled to receive” in
§ 1311(a)(2) as prohibiting hypothetical entitlement
claims. See Dependency and Indemnity Compensation:
Surviving Spouse’s Rate; Payments Based on Veteran’s
Entitlement to Compensation for Service-Connected
Disability Rated Totally Disabling for Specified Periods
Prior to Death, 70 Fed. Reg. 72,211 (Dec. 2, 2005). The
new regulation was effective December 2, 2005, and it
applied to new claims for enhanced DIC benefits as well
as claims pending before the VA on that date. Id. at
72,212. We sustained the VA’s promulgation of
§ 3.10(f)(3) in National Organization of Veterans’ Advocates,
Inc. v. Secretary of Veterans Affairs, 476 F.3d 872,
877 (Fed. Cir. 2007).
This case requires us to determine whether the
amended regulation, 38 C.F.R. § 3.10(f)(3), can be applied
retroactively to bar claims such as Ms. Kernea’s that had
already been filed before the amended regulation took
effect. This is the first time we have addressed whether
§ 3.10(f)(3) should be given retroactive effect to a
§ 1311(a)(2) claim filed before the rule became effective.
However, we have previously addressed this issue with
respect to 38 U.S.C. § 1318, a statute that, like
§ 1311(a)(2), provides for certain DIC benefits if a veteran
received or was “entitled to receive” compensation for a
service-connected disability that was rated totally disabling
for a certain amount of time immediately preceding
death. See Tarver v. Shinseki, 557 F.3d 1371 (Fed. Cir.
2009); Rodriguez v. Peake, 511 F.3d 1147 (Fed. Cir. 2008).
8 FLORA KERNEA v. SHINSEKI

In Rodriguez and Tarver, we addressed a rule, codified at
38 C.F.R. § 3.22, that the VA promulgated in 2000 in
response to decisions of the Veterans Court interpreting
the phrase “entitled to receive” in § 1318 as permitting
hypothetical entitlement claims. The VA’s new rule had
the effect of reinterpreting § 1318 to prohibit hypothetical
entitlement claims. See Tarver, 1373-74. In Rodriguez
and Tarver, we applied the three-part test outlined in
Princess Cruises to determine that § 3.22 could be applied
retroactively to bar § 1318 claims based on a hypothetical
entitlement theory. See Rodriguez, 511 F.3d at 1156
(finding that all three Princess Cruises factors weighed in
favor of retroactive application of § 3.22, as amended in
2000, to claims for DIC benefits filed by survivors before
the amendment took effect); Tarver, 557 F.3d at 1374-77
(finding that retroactive application of § 3.22 was permissible
in a case “distinguishable from Rodriguez only in
that [the claimant] filed her DIC claim after”—not before—
the Veterans Court’s decision interpreting § 1318 as
permitting hypothetical entitlement claims).
As in Rodriguez and Tarver, we will use the threepart
test from Princess Cruises to determine whether
§ 3.10(f)(3) should be given retroactive effect to bar Ms.
Kernea’s hypothetical entitlement claim under
§ 1311(a)(2).
1
The first Princess Cruises factor is “the nature and extent
of the change in the law.” Princess Cruises, 397 F.3d
at 1364 (internal quotation marks omitted). Ms. Kernea
contends that at the time she filed her claim in 2003, the
VA’s long-standing regulations, as we interpreted them
in our 2000 opinion in Hix v. Gober, permitted hypothetical
entitlement claims under § 1311(a)(2). See Hix, 225
F.3d at 1380-81 (holding that 38 C.F.R. § 20.1106, as then
worded, was “dispositive of the interpretation of 38 U.S.C.
§ 1311,” and “require[d] de novo determination of the
FLORA KERNEA v. SHINSEKI 9

veteran’s disability, upon the entirety of the record including
any new evidence presented by the surviving spouse”);
see also Nat’l Org. of Veterans’ Advocates, Inc. v. Sec’y of
Veterans Affairs, 260 F.3d 1365, 1370 (Fed. Cir. 2001)
(recognizing Hix’s holding that hypothetical entitlement
claims were permitted under § 1311(a)(2)). Ms. Kernea
argues that because § 3.10(f)(3), promulgated two years
after she filed her claim, would prohibit her claim, the
change in the law “has been significant; indeed, it has
been total.” Appellant’s Br. 22.
We disagree with Ms. Kernea’s characterization of the
state of the law when she filed her claim in 2003. At that
time, the VA had already taken steps to overturn the
result in Hix. More specifically, the VA amended a regulation—
38 C.F.R. § 20.1106—that we relied on in reaching
our conclusion in Hix. At the time of our decision in
Hix, § 20.1106 provided that “[e]xcept with respect to
benefits under the provisions of 38 U.S.C. 1318 . . . ,
issues involved in a survivor’s claim for death benefits
will be decided without regard to any prior disposition of
those issues during the veteran’s lifetime.” 38 C.F.R.
§ 20.1106. We reasoned in Hix that because the regulation
specifically excluded § 1318 but failed to mention
§ 1311, the regulation permitted hypothetical entitlement
claims under § 1311 but not under § 1318. Hix, 225 F.3d
at 1380.2 By the time Ms. Kernea filed her claim in 2003,
however, the VA had amended § 20.1106 to explicitly
refer to § 1311 and thereby bring the interpretation of
2 The implementing regulation for § 1318 was consistent
with this interpretation, with the VA having
amended § 3.22 earlier in 2000 to prohibit hypothetical
entitlement claims under § 1318. See DIC Benefits for
Survivors of Certain Veterans Rated Totally Disabled at
Time of Death, 65 Fed. Reg. 3388 (Jan. 21, 2000). The VA
had not yet revised the implementing regulation for
§ 1311.
10 FLORA KERNEA v. SHINSEKI

§ 1311(a)(2) in line with that of § 1318.3 Indeed, in our
opinion in NOVA II in early 2003, we analyzed the VA’s
amendment to § 20.1106 and held that the VA “could
properly construe the ‘entitled to receive’ language of
§§ 1311(a)(2) and 1318 in the same way.” NOVA II, 341
F.3d at 1378. We further held that the VA “could properly
construe the language of the two sections to bar the
filing of new claims” (i.e., hypothetical claims) and that
the VA had “adequately explained that decision.” Id.
Thus, by the time Ms. Kernea filed her claim later in
2003, we had already affirmed the VA’s decision to reinterpret
§ 1311(a)(2) as prohibiting hypothetical entitlement
claims.
We recognize that the VA still had more work to do after
our NOVA II opinion. More specifically, in NOVA II,
we faulted the VA for failing to amend the implementing
regulations for § 1311(a)(2) to make them consistent with
38 C.F.R. § 3.22, the regulation implementing § 1318. See
id. at 1377, 1381. We remanded for further rulemaking
proceedings so that the VA could harmonize the implementing
regulations for §§ 1311(a)(2) and 1318. Id. at
1381. This is what led the VA to promulgate § 3.10(f)(3),
which included “a definition of the phrase ‘entitled to
receive’ that . . . parallel[ed] the definition set forth in
§ 3.22(b).” 70 Fed. Reg. 72,211, 72,212 (Dec. 2, 2005).

3 As amended, § 20.1106 provided that “[e]xcept
with respect to benefits under the provisions of 38 U.S.C.
1311(a)(2) [and] 1318, . . . issues involved in a survivor’s
claim for death benefits will be decided without regard to
any prior disposition of those issues during the veteran’s
lifetime.” Board of Veterans’ Appeals Rules of Practice:
Claim for Death Benefits by Survivor, 67 Fed. Reg.
16,309, 16,317 (Apr. 5, 2002) (to be codified at 38 C.F.R.
§ 20.1106) (emphasis added to indicate revision in text).
FLORA KERNEA v. SHINSEKI 11

Despite our remand in NOVA II for further rulemaking
proceedings, it was apparent at the time that hypothetical
entitlement claims would no longer be allowed
under § 1311(a)(2). In fact, in NOVA II, we instructed the
VA to “continue to process claims for survivor benefits
that would be rejected because they are based on the
filing of new claims after the veteran’s death, since we
have found that the Department’s interpretation of the
statute as barring such claims to be permissible and
reasonable, and assume that that view will be reflected in
a new regulation under § 1311(a)(2).” NOVA II, 341 F.3d
at 1381. Therefore, the first Princess Cruises factor
weighs in favor of retroactive application of § 3.10(f)(3).
2
The second Princess Cruises factor is “the degree of
connection between the operation of the new rule and a
relevant past event.” Princess Cruises, 397 F.3d at 1365
(internal quotation marks omitted). In laying out this
factor, we explained that “not only must a new rule effect
a significant change in the law, but this change must also
have a significant connection with past events.” Id. at
1365-66. Thus, if a change in the law “meaningfully
alter[s] the consequences of relevant past events,” it will
weigh against retroactive application of the law. Rodriguez,
511 F.3d at 1155.
Princess Cruises provides an example of when this
factor will weigh against retroactive application of a new
rule. In that case, a new U.S. Customs rule required that
cruise lines collect data concerning which passengers
disembarked or boarded at certain ports, and the new rule
created an evidentiary presumption to be applied when a
cruise line could not provide the data. Princess Cruises,
397 F.3d at 1360. We found that the new rule had a
significant connection with past events because before the
rule, the cruise lines understood “that they had no need to
create such data,” and by failing to collect the newly
12 FLORA KERNEA v. SHINSEKI
required data, the cruise lines would “forever and completely
be unable to rebut the evidentiary presumption.”
Id. at 1366.
In contrast, in Rodriguez and Tarver, we found that
the amendment of 38 C.F.R. § 3.22 to prohibit hypothetical
entitlement claims under § 1318 did not have a significant
connection with past events. See Tarver, 557 F.3d
at 1375-76; Rodriguez, 511 F.3d at 1155. For example, in
Tarver, we explained:
Like the claimant in Rodriguez, Mrs. Tarver is
“unable to point to anything she would have done
differently had she known the effect of the 2000
amendment when she filed her claim.” 511 F.3d
at 1155. In order to prevail on her claim for section
1318(b) benefits, Mrs. Tarver had to demonstrate
that her husband had a service-connected
disability that was rated totally disabling for the
10 years immediately preceding his death. Mrs.
Tarver does not seriously dispute the DVA’s assertion
that there is nothing she (or her husband)
could have done between 1997, when [the Veterans
Court’s opinion permitting hypothetical entitlement
claims under § 1318] was decided, and
2000, when the Secretary amended rule 3.22, that
would have affected her eligibility for DIC benefits.
If Mrs. Tarver’s husband had known of the
impending rule change when he filed his application
for disability benefits, he might have brought
his claim earlier or prosecuted it more vigorously
in the first instance. But, of course, Mrs. Tarver’s
husband had no settled expectation of success on a
hypothetical entitlement approach prior to the
Veterans Court’s first pronouncement on that issue
in 1997. Accordingly, Mr. Tarver’s failure to
conform his conduct to the requirements of
amended rule 3.22 cannot be attributed to the
change in the law occasioned by that rule.
FLORA KERNEA v. SHINSEKI 13

Tarver, 557 F.3d at 1375-76.
Just as in Rodriguez and Tarver, there is nothing Ms.
Kernea could have done differently had she known the
effect of the 2005 amendment when she filed her claim.
The relevant conduct here took place in the 1960s—
decades before § 1311(a)(2) was even enacted—when her
husband filed his disability claims. In theory, Ms. Kernea’s
husband might have filed his disability claim “earlier
or prosecuted it more vigorously in the first instance,”
id. at 1375, if he had known that hypothetical entitlement
claims would be disallowed. But because he filed his
claims decades before Congress enacted § 1311(a)(2),
before this court decided Hix, and before the VA promulgated
§ 3.10(f)(3), his “failure to conform his conduct to
the requirements of amended rule [3.10(f)(3)] cannot be
attributed to the change in the law occasioned by that
rule.” Id. at 1376. Therefore, like in Rodriguez and
Tarver, we find that the second Princess Cruises factor
weighs in favor of applying § 3.10(f)(3) retroactively.
3
Finally, the third Princess Cruises factor requires us
to take into account “familiar considerations of fair notice,
reasonable reliance, and settled expectations.” Princess
Cruises, 397 F.3d at 1366 (internal quotation marks
omitted). Thus, where the state of the law is already
moving against a claimant’s position at the time he or she
files a claim, logically, the considerations relevant to the
first factor will also be relevant to this factor.
As we have detailed above, it was already apparent
when Ms. Kernea filed her claim in 2003 that hypothetical
entitlement claims would no longer be permitted
under § 1311(a)(2). Specifically, by that time, we had
already affirmed the VA’s ability to interpret § 1311(a)(2)
as prohibiting hypothetical entitlement claims. See
NOVA II, 314 F.3d at 1378. The only thing left for the VA
14 FLORA KERNEA v. SHINSEKI

to do was to revise the implementing regulations for
§ 1311(a)(2). See id. at 1381.
Under these circumstances, Ms. Kernea must be
deemed to have had fair notice that her hypothetical
entitlement claim might be disallowed. In addition,
because the VA had already amended the regulation that
provided the basis for our opinion in Hix, “any expectation
that the statutory interpretation set forth in [Hix] was not
subject to change would have been objectively unreasonable.”
Tarver, 557 F.3d at 1376. Therefore, we conclude
that the third factor weighs against Ms. Kernea’s position.
For these reasons, we find that all three of the Princess
Cruises factors weigh in favor of applying § 3.10(f)(3)
retroactively to prohibit Ms. Kernea’s hypothetical entitlement
claim. We therefore affirm the denial of her
claim for enhanced DIC benefits based on the hypothetical
entitlement theory.
B
In the alternative, Ms. Kernea challenges the dismissal
of her CUE claim for failure to identify a specific error
or a rating decision that she believes contains CUE.
According to Ms. Kernea, the record demonstrates that
she raised a valid CUE claim. Specifically, she contends
that “a cursory reading of the record, supplemented by the
VA’s obligation to construe pro se pleadings sympathetically,
would demonstrate that Ms. Kernea previously
objected to at least the VA rating decision in 1961, a
decision in which the VA has already acknowledged
CUE.” Appellant’s Br. 33. The government counters that
we lack jurisdiction to review whether Ms. Kernea raised
a valid CUE claim because it raises a factual matter that
is outside our appellate jurisdiction.
We agree with the government that we lack jurisdiction to consider whether Ms. Kernea raised a valid CUE claim. Under 38 U.S.C. § 7292(a), this court has jurisdic
FLORA KERNEA v. SHINSEKI 15

tion to review a decision of the Veterans Court “with
respect to the validity of a decision of the Court on a rule
of law or of any statute or regulation . . . or any interpretation
thereof . . . that was relied on by the Court in
making the decision.” Absent a constitutional issue, this
court “may not review (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 have previously held that the interpretation
of the contents of a claim for benefits is a factual
issue over which we do not have jurisdiction. Ellington v.
Peake, 541 F.3d 1364, 1371-72 (Fed. Cir. 2008). Here, Ms.
Kernea’s appeal of her CUE claim would require us to
review and interpret the contents of her claim. Therefore,
under our jurisdictional statute and precedent, we lack
jurisdiction to revisit the Veterans Court’s decision that
Ms. Kernea failed to raise a valid CUE claim.

III. CONCLUSION
For the foregoing reasons, the judgment of the Veterans
Court is affirmed.
AFFIRMED
COSTS
Each party shall bear its own costs.

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