Opinion ID: 3192127
Heading Depth: 3
Heading Rank: 1

Heading: Claim Initiation: 38 C.F.R. Part 3

Text: Our review of an agency’s interpretation of a statute that it administers is governed by the two-step framework 14 VETERANS JUSTICE GRP., LLC v. SEC’Y OF VETERANS AFFAIRS articulated in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842–43 (1984). See Disabled Am. Veterans v. Gober, 234 F.3d 682, 691 (Fed. Cir. 2000). Under Chevron step one, we ask “whether Congress has directly spoken to the precise question at issue.” 467 U.S. at 842. If we conclude that it has, “that is the end of the matter.” Id. However, “if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.” Id. at 843. Alternatively, if a statute is silent, but “Congress has explicitly left a gap for the agency to fill, there is an express delegation of authority to the agency to elucidate a specific provision of the statute by regulation.” Id. at 843–44. The resulting regulations are afforded “controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute.” Id. at 844 (footnote omitted). American Legion challenges the Final Rule’s requirement that claims must originate on standard VA forms, asserting “Congress has . . . enacted legislation that affirmatively contradicts VA’s attempts to eliminate informal submissions as placeholders for effective dates.” American Legion (15-7061) Br. 30. It first argues that Congress, via the Veterans’ Benefits Act of 1957, Pub. L. No. 85-56, 71 Stat. 83 (1957) (“1957 Act”), codified the 1956 version of the “informal claims” regulation, 38 C.F.R. § 3.27 (1956), thus precluding the VA from eliminating the informal claims concept. It next argues that “[l]egislative developments since the 1957 Act confirm Congress’[s] intent to allow veterans to claim their earliest informal written request to [the] VA as the effective date for benefits.” American Legion (15-7061) Br. 29. We address each of these contentions in turn. VETERANS JUSTICE GRP., LLC v. SEC’Y OF VETERANS AFFAIRS 15 1. Congress Did Not Codify the “Informal Claims” Provision of 38 C.F.R. § 3.27 (1956) a. In Adopting the VA’s 1956 “Effective Date” Regulation, the 1957 Act Did Not Also Adopt the “Informal Claims” Regulation In an effort to “expedite the adjudication of claims and render the system more comprehensible to veterans and the public,” H.R. Rep. No. 85-279, at 1214 (1957), reprinted in 1957 U.S.C.C.A.N 1214, 1217 (capitalization omitted), the 1957 Act consolidated “into a single act the subject matter of the extensive body of existing legislation authorizing and governing the payment of compensation for service-connected disability or death to persons who served in the military, naval, or air force of the United States,” id. at 1214 (capitalization omitted). In addition to the consolidation of existing legislation, the 1957 Act also consolidated “all the administrative provisions relating to” pension, medical, and other VA benefits. Id. at 1215 (emphasis added). American Legion contends that when Congress enacted the current effective date provision in 1957 (codified as amended at 38 U.S.C. § 5110(a)–(b)(1) (2012)), it also made statutory the VA’s longstanding rule that informal submissions can establish a claimant’s effective date. Thus, American Legion asserts that the VA cannot amend the regulations to exclude informal submissions. Before the 1957 Act, the VA’s effective date provision was codified at 38 C.F.R. § 3.212 (1956). That regulation stated: Initial awards of disability compensation will be payable . . . provided an appropriate claim therefor has been filed and, if incomplete, the necessary evidence to complete such claim is submitted within [one] year from the date of request therefor. . . . [The] claim [must be] 16 VETERANS JUSTICE GRP., LLC v. SEC’Y OF VETERANS AFFAIRS filed within [one] year from date of discharge from such period of service [in order to bene- fit from an earlier effective date] . . . . 38 C.F.R. § 3.212 (1956) (emphases added). During this period, the VA defined the term “informal claim[]” as “[a]ny communication from or action by a claimant . . . which clearly indicates an intent to apply for disability or death compensation or pension.” 38 C.F.R. § 3.27 (1956). Section 3.27 further provided that an informal claim would serve to establish an effective date if a formal application—which would “be considered as evidence necessary to complete the initial application”—was “received [by the VA] within [one] year from the date it was transmitted for execution by the claimant.” Id. (emphasis added). Without addressing claim completeness or informality, the 1957 Act codified the “one year” provision: (b) The effective date of an award of disabil- ity compensation to a veteran shall be the date of his discharge or release if application therefor is received within one year from such date of discharge or release. 1957 Act, § 910(b), 71 Stat. at 119 (emphasis added). American Legion asserts that, because informal claims were considered sufficient to establish a claim’s effective date under the VA’s Prior Regulation, the elevation of the effective date regulation to statute also codified the means (i.e., the filing of an informal claim) by which claimants may establish the effective date of their awards. American Legion’s contention effectively raises a Chevron step one question because it requires us to address whether Congress “has directly spoken to the precise question at issue.” 467 U.S. at 842. That is, we must VETERANS JUSTICE GRP., LLC v. SEC’Y OF VETERANS AFFAIRS 17 determine whether, in codifying the VA’s pre-1957 effective date award regulation, Congress also codified the VA’s Prior Regulation that informal claims were sufficient to establish the effective date of an award––thus foreclosing the VA’s attempt to substitute the informal claims regulation with new 38 C.F.R. § 3.155(b)(1)’s “intent to file” process. While Congress modeled the 1957 effective date provision on pre-1957 VA regulations, the provision is only indirectly tied to the informal claims definition. It does not define “informal claim,” or even include that term. It does not include any of the 1956 regulation’s operative terms, such as that an effective date will be established by “[a]ny communication from or action by a claimant . . . clearly indicat[ing] an intent to apply for disability.” 38 C.F.R. § 3.27 (1956). See 1957 Act, § 910(a)–(b), 71 Stat. at 119. There is no reason to presume that when Con- gress codified the effective date regulation, it also legislatively adopted, sub silentio, the informal claims regulation. See NLRB v. Plasterers’ Local Union No. 79, 404 U.S. 116, 129–130 (1971) (“It is at best treacherous to find in Congressional silence alone the adoption of a controlling rule of law.” (internal quotation marks, brackets, and citation omitted)); Groff v. United States, 493 F.3d 1343, 1353 (Fed. Cir. 2007) (because “Congress did not [] define” the relevant term, the statute is silent as to its meaning). Accordingly, the effective date provision does not speak to what action or conduct by the claimant constitutes an informal claim. What is more, Congress chose not to codify the informal claims provision of 38 C.F.R. § 3.27 (1956) at the same time that it did codify a number of other pre-1957 VA regulations related to a veteran’s application for disability benefits. See 38 U.S.C. § 3001 (1958) (codifying 38 C.F.R. § 3.26(a) (1956), which provided that a properly completed, VA-prescribed form “constitutes an application 18 VETERANS JUSTICE GRP., LLC v. SEC’Y OF VETERANS AFFAIRS for benefits”); id. § 3004 (codifying 38 C.F.R. § 3.201(a) (1956), which provided that where “[n]ew and material evidence” is submitted after a claim is finally disallowed, the new evidence “will constitute a new claim and have all the attributes thereof”); id. § 3010(b) (codifying 38 C.F.R. § 3.212 (1956), which allowed an earlier effective date for claims filed “within [one] year from date of discharge”). “[T]he Legislature’s silence” with respect to one aspect of a regulatory scheme, in light of its codification of administrative rules governing other aspects of that scheme, “indicates that Congress left the [former] matter where it was” before the statute was enacted. Kucana v. Holder, 558 U.S. 233, 235 (2010); see also Prestol Espinal v. Attorney Gen. of the U.S., 653 F.3d 213, 222 n.9 (3d Cir. 2011) (where Congress “codif[ies] some regulations while ignoring others,” its “nuanced consideration of which limitations and regulations to codify offers stronger evidence of Congress’[s] intent than does Congress’[s] . . . silence” (internal quotation marks omitted)). Legislative history is also relevant under the Chevron framework, and “may foreclose an agency’s preferred interpretation” if it “makes clear what [the statute’s] text leaves opaque.” Catawba Cnty., N.C. v. EPA, 571 F.3d 20, 35 (D.C. Cir. 2009). Here, the statute’s “legislative history . . . is [also] silent on the precise issue before us.” Chevron, 467 U.S. at 862. Neither the 1957 Act nor the House Conference Report accompanying the Act, see H.R. Rep. No. 85–279 (1957), discuss the informal claims regulation or any of its operative terms. b. Congress Did Not Codify 38 C.F.R. § 3.27 Via Post1957 Legislation In further support of its contention that Congress codified the informal claims regulation, American Legion next argues that “[l]egislative developments since the 1957 Act confirm Congress’[s] intent to allow veterans to VETERANS JUSTICE GRP., LLC v. SEC’Y OF VETERANS AFFAIRS 19 claim their earliest informal written request to [the] VA as the effective date for benefits.” American Legion (157061) Br. 29. Specifically, according to American Legion, “[b]etween 1957 and 2014, Congress took action in connection with the statute’s effective-date provisions, 38 U.S.C. § 5110, more than a dozen times. On at least three of these occasions, Congress amended, reenacted, or renumbered the very subsections that had first been signed into statutory law in 1957 . . . .” Id. (footnote omitted). However, “there is nothing to indicate that [the informal claims regulation] was ever called to the attention of Congress,” and the reenactment of 38 U.S.C. § 5110 “was not accompanied by any congressional discussion which throws light on its intended scope.” United States v. Calamaro, 354 U.S. 351, 359 (1957); see also Comm’r v. Glenshaw Glass Co., 348 U.S. 426, 431 (1955) (“Re- enactment [of a statute]––particularly without the slightest affirmative indication that Congress ever had [a particular] decision before it––is an unreliable indicium at best.”); Helvering v. Reynolds, 313 U.S. 428, 432 (1941) (legislative ratification is “no more than an aid in statutory construction” and “does not mean that the prior construction has become so embedded in the law that only Congress can effect a change” (citation omitted)). Accordingly, we reject American Legion’s contention that Congress’s reenactment of the effective date provision between 1957 and 2014 evidences an intent to codify the informal claims regulation. c. The “Incomplete Application” Provision of 38 U.S.C. § 5102(b)–(c) Does Not Indicate Congress Intended to Codify the Informal Claims Regulation Finally, American Legion asserts that “[s]ince 1957, Congress has not merely acquiesced with VA’s position; [it] has also enacted legislation that affirmatively contradicts VA’s attempts to eliminate informal submissions as 20 VETERANS JUSTICE GRP., LLC v. SEC’Y OF VETERANS AFFAIRS placeholders for effective dates.” American Legion (157061) Br. 30. American Legion first points to 38 U.S.C. § 5102(b), which provides that “[i]f a claimant’s application . . . is incomplete, the Secretary shall notify the claimant . . . of the information necessary to complete the application.” 38 U.S.C. § 5102(b) (2012). An adjacent subsection further states that if a claimant has been “notified under section (b)” and the claimant fails to furnish necessary information “to complete [the] application, . . . no benefit may be paid or furnished.” Id. § 5102(c)(1) (emphasis added). American Legion argues that these subsections, when read in conjunction, require “a claim’s effective date [to be] tied to the date on which the veteran initiates [the application]—not the date of ultimate compliance with the formal application procedures.” American Legion (15-7061) Br. 31. Accordingly, American Legion asserts that when Congress enacted section 5102(c) in 2003, because the VA “had long defined the term ‘application’ to mean ‘a formal or informal communication in writing requesting a determination of entitlement or evidencing a belief in entitlement, to a benefit[,]’” the “VA cannot . . . eviscerate what Congress plainly understood it was accomplishing when it enacted § 5102(c).” Id. (quoting 38 C.F.R. § 3.1(p) (2003)). American Legion’s contention is predicated solely on the fact that Congress possessed knowledge of the VA’s definition of “application.” This begs the question. It is of little import that Congress was aware of the VA’s previous definition of “application” as including an informal written communication. As the Supreme Court has stated: The oft-repeated statement that administra- tive construction receives legislative approv- al by reenactment of a statutory provision, without material change[,] covers the situa- tion where the validity of administrative ac- VETERANS JUSTICE GRP., LLC v. SEC’Y OF VETERANS AFFAIRS 21 tion standing by itself may be dubious or where ambiguities in a statute or rules are resolved by reference to administrative prac- tice prior to reenactment of a statute; and where it does not appear that the rule or practice has been changed by the adminis- trative agency through exercise of its contin- uing rule-making power. It does not mean that a regulation interpreting a provision of one act becomes frozen into another act mere- ly by reenactment of that provision, so that that administrative interpretation cannot be changed prospectively through exercise of ap- propriate rule-making powers. The contrary conclusion would not only drastically curtail the scope and materially impair the flexibil- ity of administrative action; it would produce a most awkward situation. Outstanding reg- ulations which had survived one Act could be changed only after a pre-view by the Con- gress. Helvering v. Wilshire Oil Co., 308 U.S. 90, 100–01 (1939) (emphasis added) (citation omitted); see also Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 981 (2005) (‘“An initial agency interpretation is not instantly carved in stone. On the contrary, the agency must consider varying interpretations and the wisdom of its policy on a continuing basis.”’ (quoting Chevron, 467 U.S. at 863–64)). The relevant inquiry is not whether Congress was aware of the prior regulations, but whether it intended to bind the VA to its existing definition via the enactment of 38 U.S.C. § 5102(b) and (c). In this case, “Congress has not given any indication of whether it intended” to bind the VA to its previous definition. VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.3d 1574, 1581 (Fed. 22 VETERANS JUSTICE GRP., LLC v. SEC’Y OF VETERANS AFFAIRS Cir. 1990) (citation omitted); see 38 U.S.C. § 101 (2012) (providing definitions, but leaving “claim” and “application” undefined). In light of this congressional silence, the enactment of 38 U.S.C. § 5102(b) and (c) do not limit the VA’s discretion in the manner American Legion asserts. See, e.g., United States v. Home Concrete & Supply, LLC, 132 S. Ct. 1836, 1843 (2012) (plurality opinion) (“[A] statute’s silence or ambiguity as to a particular issue means that Congress has not directly addressed the precise question at issue (thus likely delegating gap-filling power to the agency).” (internal quotation marks and citation omitted)); Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208, 222 (2009) (“It is eminently reasonable to conclude that [a statute’s] silence is meant to convey nothing more than a refusal to tie the agency’s hands. . . .”). 2. Amended 38 C.F.R. Part 3, Requiring that Claims Be Initiated Via a Standard VA Form Is Consistent with 38 U.S.C. §§ 501(a)(2) and 5110(a)(1) The statute is not only silent as to the definition of “application,” but affirmatively grants “[t]he Secretary . . . authority to prescribe all rules and regulations . . . including––the forms of application by claimants under such laws.” 38 U.S.C. § 501; see also id. § 5101(a)(1) (“A specific claim in the form prescribed by the Secretary . . . must be filed in order for benefits to be paid. . . .” (emphasis added)); Mansfield v. Peake, 525 F.3d 1312, 1317 (Fed. Cir. 2008) (“Congress has provided the VA with authority to establish the requirements for ‘claims’ for veterans’ benefits.”). Where Congress has “express[ly] delegat[ed] authority to the agency to elucidate a specific provision of the statute by regulation,” those “legislative regulations are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute.” Chevron, 467 U.S. at 843–44 (footnote omitted). American Legion contends the “VA’s elimination of informal effective-date placeholders runs contrary to Con- VETERANS JUSTICE GRP., LLC v. SEC’Y OF VETERANS AFFAIRS 23 gress’[s] overarching purpose in enacting the veterans’ benefit laws: maintaining a claimant-friendly, nonadversarial process for providing service-related benefits to veterans and their families.” American Legion (157061) Br. 34. Accordingly, it asserts that the new and amended regulations under 38 C.F.R. Part 3 are arbitrary and capricious because the VA: “(1) has failed to establish a rational connection between its requirement that initial submissions be on standard forms and its asserted objectives; and (2) has not adequately considered the [Final] Rule’s impact on the veteran population.” Id. at 39 (footnote omitted); see also id. at 38 (asserting the Final Rule is likely to disproportionately impact veterans for whom “it will be impossible to access [the] VA’s electronic platform or . . . understand the requirements [the] VA is imposing”). The VA’s stated reason for favoring standard claims forms is sufficient to show that the Final Rule’s standard form requirement is rational. We note that the VA is in a better position than this court to evaluate inefficiencies in its system. See Heckler v. Chaney, 470 U.S. 821, 831–32 (1985) (“The agency is far better equipped than the courts to deal with the many variables involved in the proper ordering of its priorities.”); see also Hettleman v. Bergland, 642 F.2d 63, 66–67 (4th Cir. 1981) (“[T]he government has an interest in seeing that the program [it administers] runs efficiently; . . . and the Secretary, as head of the responsible agency, is in the best position to promulgate uniform procedures.” (internal quotation marks omitted)). The VA explained that, by standardizing the claim initiation process, it “will be able to cut processing time in identifying and developing claims, which will result in faster delivery of benefits to all veterans.” Final Rule, 79 Fed. Reg. at 57,661; see also id. (The “rulemaking will allow [the] VA to decrease the processing time in identifying, clarifying, and processing nonstandard submissions as claims or appeals since [the] VA 24 VETERANS JUSTICE GRP., LLC v. SEC’Y OF VETERANS AFFAIRS will be able to easily target and identify these claims or initiations of appeals based on the submitted form”); VA (15-7061) Br. 33 (“By controlling the possibility that any document might contain an overlooked claim, adjudicators can focus on developing and deciding the claims before them” instead of devoting time to “interpret[ing] the correct procedural identity of every claimant submission.”). We decline to second guess the agency where, as here, its action has not been shown to be arbitrary or capricious. See Vt. Yankee Nuclear Power Corp. v. Nat. Res. Def. Council, Inc., 435 U.S. 519, 543 (1978) (asserting that courts generally will defer to an agency’s construction of the statute it is charged with implementing and to the procedures adopted to implement the statute). We also conclude the VA has adequately considered and addressed the impact on the veteran population. In issuing the Final Rule, the VA noted that “approximately half of the claimant population . . . [already] file[s] claims on a prescribed form.” Final Rule, 79 Fed. Reg. at 57,661. To mitigate adverse effects on those in the remaining half who are not familiar with the standard form, the VA “delay[ed] the effective date of [the Final Rule] by 180 days . . . in order to perform robust outreach to inform and educate claimants and authorized representatives of this new standardized procedure.” Id. Additionally, it unlikely that the amended regulations, and in particular the intent to file provisions codified at 38 C.F.R. § 3.155(b)(1)(i)–(iii), will unduly burden veterans seeking to initiate claims. Although the Final Rule may disproportionately impact some of the nation’s veterans who either do not have or possess limited Internet access, see J.A. 15-7061 204, J.A. 15-7061 207, this issue is attenuated because new 38 C.F.R. § 3.155(b)(1)(iii) allows claimants to initiate their claims with a phone call. Thus, practically speaking, the increase in burden on claimants is de minimis. If anything, VETERANS JUSTICE GRP., LLC v. SEC’Y OF VETERANS AFFAIRS 25 the Final Rule is more claimant-friendly because it increases the menu of options available to the initiating claimant. Accordingly, we find that the VA’s amendment and new provisions to 38 C.F.R. Part 3, requiring claimants to originate their claims on a standard VA form is not “arbitrary, capricious, or manifestly contrary to statute.” Favreau v. United States, 317 F.3d 1346, 1358 (Fed. Cir. 2002) (asserting that the court will defer to the agency’s interpretation of a statute if the regulation is not arbitrary, capricious, or manifestly contrary to statute). Lastly, as to American Legion’s contention that the Final Rule does not accord with the overarching purpose of the veterans’ benefit laws, we agree with the VA that “[c]onsistency with the ‘statutory framework’ plainly cannot be reduced to the single-factor test of whether the regulation is uniformly ‘pro-claimant.’” VA (15-7061) Br. 8 (quoting Sears v. Principi, 349 F.3d 1326, 1330 (Fed. Cir. 2003)). As we explained in Sears, “we must take care not to invalidate otherwise reasonable agency regulations simply because they do not provide for a pro-claimant outcome in every imaginable case.” 349 F.3d at 1331–32.