IN THE UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS
RONALD L. BURTON, )
)
Appellant, )
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v. ) Vet. App. No. 16-2037
)
ROBERT L. WILKIE, )
Secretary of Veterans Affairs, )
)
Appellee. )
APPELLEE’S RESPONSE TO THE COURT’S AUGUST 8, 2018, ORDER
Appellee, Robert L. Wilkie, Secretary of Veterans Affairs, respectfully submits this response to the Court’s August 8, 2018, Order, which granted the Secretary leave to file a clarification of the Secretary’s position following the publication of 83 Fed. Reg. 32592.
In August 2016, the Department of Veterans Affairs (VA) proposed to amend 38 C.F.R. § 4.118. 81 Fed. Reg. 53353. Included in the Proposed Rule was an amendment that would add a new introductory paragraph to state that, for the purposes of § 4.118, systemic therapy is treatment that is administered through any route (orally, injection, suppository, intranasally) other than the skin, and topical therapy is treatment that is administered through the skin. Id. In the Secretary’s reply brief in Johnson v. Shulkin, 862 F.3d 1351 (Fed. Cir. 2017) filed in December 2016, it was noted that while “corticosteroid ointment “administered on a large enough scale” could have systemic effects”, the Court did not need reach that hypothetical question. Secretary’s Johnson Reply Brief at 5-6 (emphasis in original) (citing Schedule for Rating Disabilities; Skin Conditions, 81 Fed. Reg. 53,353,
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53,353-54 (Aug. 12, 2016)). In the subsequent decision in Johnson, the Federal Circuit stated:
We note that the parties agree that a topical corticosteroid treatment could conceivably be “administered on a large enough scale” to affect the body as a whole, which could fit the definition of systemic therapy. Appellee Br. 16-19, 24-26, 33; Reply Br. 5-6. But the mere possibility that the use of a topical corticosteroid could amount to systemic therapy in some cases does not mean all applications of topical corticosteroids mean systemic therapy, particularly if those uses of topical corticosteroids affect only the area to which they are applied. As explained above, we agree with the Secretary that the use of topical corticosteroids does not automatically mean systemic therapy because DC 7806 distinguishes between systemic and topical therapy.
Johnson, 862 F.3d at 1355. The Court further stated: “We agree with the Secretary that the use of a topical corticosteroid could be considered either systemic therapy or topical therapy based on the factual circumstances of each case.” Johnson, 862 F.3d at 1356 (citing Secretary’s Johnson Reply Brief at 5-6).
In the Secretary’s January 2018 Brief in the instant case, the Secretary noted that the Federal Circuit in Johnson explained that the phrase “systemic therapy” refers to treatment that affects the body as a whole “whereas topical therapy means ‘treatment pertaining to a particular surface area…’” and that it acknowledged that topical corticosteroid treatment could “conceivably” be systemic therapy, but only where the topical treatment is “’administered on a large enough scale’ to affect the body as a whole.” Secretary’s Brief at 7 (citing Johnson v. Shulkin, 862 F.3d at 1355. The Secretary then reiterated that the evidence of record did not indicate that Appellant’s use of medications included application on a large enough scale to affect his whole body. Id. At oral argument in the instant
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case, counsel for the Secretary conceded that topical medications could be considered “systemic” if applied on a large enough scale or that a topical application was otherwise shown to have systemic effects on a facts found basis. See Oral Argument at 33:06-35:02, Burton v. O’Rourke, U.S. Vet. App. No. 16-2037 (oral argument held July 11, 2018), http://www.uscourts.cavc.gov/oral_arguments_audio.php.
In the Final Rule for the schedule of skin rating disabilities published on July 13, 2018, it was noted that VA proposed to clarify that treatment administered through the skin is “topical therapy,” while treatment administered through any route other than the skin (orally, injection, suppository, intranasally) is “systemic therapy” and that the final rule adopted that proposal. 83 Fed. Reg. at 32594. It was further noted that “VA’s proposal, adopted as a final rule here, sets clear guidelines in accordance with this understanding: creams applied to the skin are “topical therapy,” and treatments applied in a way (orally, intranasally, etc.) that the medication circulates throughout the entire body and suppresses the immune system as a whole are “systemic therapy.”” Id. As a result, the new introductory paragraph noted in the August 2016 Proposed Rule was enacted unchanged, stating “a) For the purposes of this section, systemic therapy is treatment that is administered through any route (orally, injection, suppository, intranasally) other than the skin, and topical therapy is treatment that is administered through the skin.” 83 Fed. Reg. at 32597. The effective date of the change in regulation is August 13, 2018. 83 Fed. Reg. at 32593. However, claims pending prior to the effective date, to include Appellant’s claim, will be considered under both old and new rating criteria, and whatever criteria is more favorable to the Veteran. Id.
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The Secretary files this clarification to state that, notwithstanding consultation and coordination with the relevant stakeholders within the Veterans Benefit Administration, to include Compensation Service, at the time of oral argument in this case, counsel for the Secretary was not aware of the contents of the Final Rule or that its publication was imminent. As a result, the litigation position taken at argument differs with the Secretary’s considered regulatory interpretation of 38 C.F.R. § 4.118 as stated in the Final Rule. The Secretary sincerely apologizes to the Court and Appellant for the oversight. However, the Secretary notes that the position taken on brief, as well as at oral argument, is consistent with the statements in the August 2016 proposed rule and the July 2018 Final Rule and reiterates that, in any event, that the revision of section 4.118 does not apply to the Appellant’s claim on appeal.
Under the version of 38 C.F.R. § 4.118 in effect prior to August 13, 2018, determining topical therapy or systemic therapy was based on the factual circumstances of each case. In August 2016, before this Court’s decision in Johnson was overturned, VA determined that moving forward it wanted to simplify ratings provided for under 38 C.F.R. § 4.118 by providing a bright line rule for skin treatments, i.e., that topical treatments could never be considered systemic therapy. Although it was acknowledged in this proposed rule that, from a factual perspective, topical creams applied to a large part of the body could have systemic effects, it was determined that under the bright line rule, a higher rating in these circumstances should be based on meeting the percentage of body affected requirement and not any designation as systemic therapy. See 81 Fed. Reg. 53354.
As the Secretary argued to the Federal Circuit in Johnson, a topical corticosteroid cream could be systemic therapy in a given case, but that this
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Court had erred by stating that it was always a systemic therapy. Secretary’s Johnson Reply Brief at 5-6. The Federal Circuit adopted this position that determining whether a topical therapy could be considered systemic was a case-by-case determination. Johnson, 862 F.3d at 1356.
The responses to the comments in the Final Rule published in July 2018 continued to acknowledge that as noted in the supplementary information to the proposed rule that some medications applied to the skin, if administered on a large enough scale, could have a systemic effect; but reiterated that in those situations a veteran could obtain a higher rating due to the percentage of the body affected and the proposed note to section 4.118 was implemented without change. 83 Fed. Reg. 32594. Thus, while the analysis has changed as to whether a therapy is systemic under the new version of 38 C.F.R. § 4.118, the Secretary’s acknowledgement that topical therapy could be considered systemic under certain factual situations is unchanged and is consistent with the position taken on brief and at oral argument before this Court.
WHEREFORE, Appellee, Robert L. Wilkie, Secretary of Veterans Affairs, respectfully files this clarification of the Secretary’s position following the publication of 83 Fed. Reg. 32592.
Respectfully submitted,
JAMES M. BYRNE
General Counsel
MARY ANN FLYNN
Chief Counsel
/s/ James B. Cowden
JAMES B. COWDEN
Deputy Chief Counsel
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/s/ Lavinia A. Derr
LAVINIA A. DERR
Appellate Attorney
U.S. Department of Veterans Affairs
Office of the General Counsel
810 Vermont Avenue, N.W.
Washington, D.C. 20420
(202) 632-6924
Attorneys for the Secretary
of Veterans Affairs
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