National Organization of Veterans Advocates, Inc. v. Secretary of Veterans Affairs ( 2016 )


Menu:
  •   United States Court of Appeals
    for the Federal Circuit
    ______________________
    NATIONAL ORGANIZATION OF VETERANS
    ADVOCATES, INC.,
    Petitioner
    v.
    SECRETARY OF VETERANS AFFAIRS,
    Respondent
    ______________________
    2015-7024
    ______________________
    Petition for review pursuant to 38 U.S.C. Section 502.
    ______________________
    Decided: January 13, 2016
    ______________________
    KENNETH M. CARPENTER, Law Offices of Carpenter
    Chartered, Topeka, KS, argued for petitioner.
    ELIZABETH MARIE HOSFORD, Commercial Litigation
    Branch, Civil Division, United States Department of
    Justice, Washington, DC, argued for respondent. Also
    represented by BENJAMIN C. MIZER, ROBERT E.
    KIRSCHMAN, JR.; Y. KEN LEE, AMANDA R. BLACKMON,
    Office of General Counsel, United States Department of
    Veterans Affairs, Washington, DC.
    ______________________
    Before LOURIE, BRYSON, and STOLL, Circuit Judges.
    2         NAT’L ORG. OF VETERANS ADVOCATES, INC. v. SEC’Y OF
    VETERANS AFFAIRS
    BRYSON, Circuit Judge.
    The National Organization of Veterans’ Advocates,
    Inc. (“NOVA”) petitions this court for review of certain
    regulations promulgated by the Department of Veterans
    Affairs (“DVA”). The challenged regulations, which are
    codified at 
    38 C.F.R. §§ 3.1010
    , 20.900(a)(2), and 20.1302
    (2015), were intended to implement the Veterans’ Bene-
    fits Improvement Act of 2008, Pub. L. No. 110-389, 
    122 Stat. 4145
     (2008). The regulations relate to the process
    by which an eligible survivor may be substituted for a
    veteran who dies while the veteran’s claim for benefits is
    pending before the DVA or on appeal to the Board of
    Veterans’ Appeals.
    I
    Prior to the enactment of the Veterans’ Benefits
    Improvement Act, if a veteran seeking DVA benefits died
    while his claim was pending, the veteran’s survivor could
    not take the place of the veteran and continue to prose-
    cute the claim. Instead, the survivor would have to file a
    claim for accrued benefits under 
    38 U.S.C. § 5121
    . As the
    accrued benefits claim was treated as separate from the
    veteran’s claim, the survivor would have to proceed from
    the beginning of the adjudication process, regardless of
    how far the veteran’s claim had progressed.           See
    Zevalkink v. Brown, 
    102 F.3d 1236
    , 1241 (Fed. Cir. 1996).
    The 2008 Act sought to remedy that situation. Sec-
    tion 212 of the Act, codified as 38 U.S.C. § 5121A, author-
    izes eligible survivors to be “substituted as the claimant
    for the purposes of processing the claim to completion.”
    Those eligible to substitute for the deceased claimant are
    the same individuals who would be eligible to pursue an
    NAT’L ORG. OF VETERANS ADVOCATES, INC.   v. SEC’Y OF     3
    VETERANS AFFAIRS
    accrued benefits claim. 1     See 38 U.S.C. §§ 5121A,
    5121(a)(2).
    In 2011, the DVA proposed regulations to implement
    section 5121A. Substitution in Case of Death of Claimant
    (“Proposed Rule”), 
    76 Fed. Reg. 8,666
     (Feb. 15, 2011).
    After notice and an opportunity for comment, the DVA
    published the final version of the regulations. Substitu-
    tion in Case of Death of Claimant (“Final Rule”), 
    79 Fed. Reg. 52,977
     (Sept. 5, 2014).
    The regulations require a request to substitute to be
    filed with the agency of original jurisdiction (such as one
    of the DVA’s regional offices) within one year of the
    claimant’s death; the prospective substitute is required to
    submit evidence of his eligibility to substitute. 
    38 C.F.R. § 3.1010
    ; see DVA Form 21-0847. The regulations further
    provide that if the claimant died while his appeal was
    pending before the Board of Veterans’ Appeals, the Board
    must dismiss the appeal without prejudice so that the
    agency of original jurisdiction can address the substitu-
    tion request. If the agency of original jurisdiction grants
    the request to substitute, then the case returns to the
    same place on the Board’s docket that it held at the time
    of the veteran’s death. 
    38 C.F.R. §§ 20.1302
    , 20.900.
    NOVA filed an original proceeding in this court under
    
    38 U.S.C. § 502
     to review the new DVA regulations.
    Although NOVA argues that the regulations are unlawful
    in two respects, we reject NOVA’s contentions and deny
    the petition for review.
    1    In most cases the claimant is a veteran seeking
    benefits for a service-connected disability. However, the
    claimant may also be a non-veteran seeking benefits
    directly. See, e.g. 
    35 U.S.C. §§ 1310
    , 1313, 1314, and
    1315. In the context of section 5121A, we use veteran and
    claimant interchangeably.
    4         NAT’L ORG. OF VETERANS ADVOCATES, INC. v. SEC’Y OF
    VETERANS AFFAIRS
    II
    NOVA first challenges the requirement that prospec-
    tive substitutes provide evidence of their eligibility in all
    cases. In some cases a veteran receiving disability bene-
    fits is entitled to receive additional benefits because of his
    dependents. Those same dependents may also be eligible
    to substitute for that veteran after his death. Compare 
    38 U.S.C. § 1115
     with 
    id.
     § 5121(a).
    NOVA argues that when a claimant before the Board
    has been receiving additional benefits because of a
    spouse, child, or dependent parents, the Board should
    allow the prospective substitutes to move to be substitut-
    ed and have the Board determine eligibility based on the
    material the DVA already has in the deceased claimant’s
    file. According to NOVA, the aspect of the regulation
    requiring the claimant’s relatives to provide evidence of
    their eligibility to substitute when the DVA already has
    evidence of their status in its files is arbitrary and capri-
    cious.
    The DVA responds that the pertinent provision of the
    2008 Act, 38 U.S.C. § 5121A, requires all prospective
    substitutes to submit evidence of their eligibility, and that
    the regulation, which embodies the same requirement, is
    therefore entirely lawful.
    The relevant portion of section 5121A states:
    (1) If a claimant dies while a claim for any
    benefit under a law administered by the Secre-
    tary, or an appeal of a decision with respect to
    such a claim, is pending, a living person who
    would be eligible to receive accrued benefits due to
    the claimant under section 5121(a) of this title
    may, not later than one year after the date of the
    death of such claimant, file a request to be substi-
    tuted as the claimant for the purposes of pro-
    cessing the claim to completion.
    NAT’L ORG. OF VETERANS ADVOCATES, INC.   v. SEC’Y OF       5
    VETERANS AFFAIRS
    (2) Any person seeking to be substituted for
    the claimant shall present evidence of the right to
    claim such status within such time as prescribed
    by the Secretary in regulations.
    The DVA interprets section 5121A to require the pro-
    spective substitute to put forward evidence of eligibility to
    substitute. Eligibility to substitute under section 5121A
    is governed by subsection 5121(a), which determines
    eligibility based on the person’s relationship to the veter-
    an at the time of death. It provides that the persons
    eligible to substitute are, in order of preference, the
    claimant’s spouse, his children, and his dependent par-
    ents. 
    38 U.S.C. § 5121
    (a)(2).
    Under the statutory scheme, eligibility to substitute
    has three requirements: the claimant must have died
    during the pendency of his claim, the prospective substi-
    tute must be alive at the time of the claimant’s death, and
    the prospective substitute must be first in priority (for
    example, a spouse would have priority in substitution
    over a child). Because the status of a potential substitute
    is not static, eligibility to substitute can be conclusively
    determined only at the time of the claimant’s death.
    While it is possible that the individuals the claimant
    certifies as his spouse, children, or dependent parents at
    some point during his lifetime will still occupy that status
    at the time of the claimant’s death, it is not certain that
    will be the case. Due to divorce, death, or a change in
    dependency status, the person who appears to be eligible
    to substitute based on the DVA’s records may not in fact
    be eligible.
    Both the statute and the regulation explicitly put the
    burden on the prospective substitute to prove eligibility to
    substitute, and in similar language. By its terms, the
    statute requires the prospective substitute to “present
    evidence of the right to claim such status.” 38 U.S.C.
    § 5121A(a)(2). In that respect, the statute appears to be
    6         NAT’L ORG. OF VETERANS ADVOCATES, INC. v. SEC’Y OF
    VETERANS AFFAIRS
    unambiguous; the requirement to “present evidence”
    would appear to apply in every case. The regulations use
    language that closely tracks that of the statute. It pro-
    vides that “[a] person filing a request to substitute must
    provide evidence of eligibility to substitute.” 
    38 C.F.R. § 3.1010
    (d). The regulation thus cannot be faulted for
    being inconsistent with the statutory directive.
    Even assuming the statute is not deemed to be entire-
    ly unambiguous in requiring a prospective substitute to
    provide evidence of eligibility, we must defer to the DVA’s
    interpretation of the statutory provision if we find it to be
    reasonable. Chevron, U.S.A., Inc. v. Nat. Res. Defense
    Council, Inc., 
    467 U.S. 837
    , 842-43 (1984); Guerra v.
    Shinseki, 
    642 F.3d 1046
    , 1049 (Fed Cir. 2011). As the
    DVA pointed out in the comments that accompanied the
    issuance of the regulations, various events, such as di-
    vorce, remarriage, or the birth of a child could make the
    information in the veteran’s file at time of his death
    inaccurate. See Final Rule, 79 Fed. Reg. at 52,980.
    For example, suppose a veteran has a dependent
    mother and receives additional benefits on her account.
    See 
    38 U.S.C. § 1115
    . If the veteran fathered a child, but
    has not yet informed the DVA about the child so that he
    could receive additional benefits, then the DVA’s records
    would reflect that the veteran’s mother was eligible to
    substitute in the event of the veteran’s death. Under
    subsection 5121A, however, it would be the veteran’s
    newborn child who would be eligible to substitute and not
    the veteran’s mother, because a child has a higher priority
    than a dependent parent. See 
    38 U.S.C. § 5121
    (a)(2).
    Requiring the prospective substitute to provide evidence
    of eligibility to substitute is thus a reasonable measure to
    ensure that the DVA has the current and accurate infor-
    mation it needs to promptly process substitution requests.
    NOVA argues that it is inappropriate for this court to
    accord Chevron deference to the DVA’s interpretation of
    NAT’L ORG. OF VETERANS ADVOCATES, INC.   v. SEC’Y OF     7
    VETERANS AFFAIRS
    section 5121A because “interpretive doubt is to be re-
    solved in the veteran’s favor.” Brown v. Gardner, 
    513 U.S. 115
    , 118 (1994). However, this court has held that
    “where the meaning of a statutory provision is ambiguous,
    we must take care not to invalidate otherwise reasonable
    regulations simply because they do not provide for a pro-
    claimant outcome in every imaginable case.” Sears v.
    Principi, 
    349 F.3d 1326
    , 1331-32 (Fed. Cir. 2003).
    We have applied Chevron deference to the DVA’s rea-
    sonable interpretation of the statutes that it administers
    in numerous other cases. See, e.g., Nat’l Org. of Veterans’
    Advocates v. Sec’y of Veterans Affairs, 
    669 F.3d 1340
    ,
    1347-48 (Fed. Cir. 2012) (“Because Congress has not
    spoken directly to the issue raised in the rule, we must
    determine whether the regulation is otherwise permissi-
    ble.”); Guerra v. Shinseki, 
    642 F.3d at 1051-52
     (“By regu-
    lation, the DVA has interpreted subsection 1114(s) to
    provide that in order to qualify for benefits under that
    statute, the veteran must have a single disability rated at
    100%. That interpretation is entitled to deference under
    the principles of [Chevron].”); Haas v. Peake, 
    544 F.3d 1306
    , 1308 (Fed. Cir. 2008) (“Thus, although Mr. Haas
    argues that the Brown [v. Gardner] doctrine effectively
    means that the DVA is not entitled to deference if its
    rulemaking resolves a statutory ambiguity, this court’s
    precedent is to the contrary.”). There is no force to
    NOVA’s suggestion that the DVA’s interpretations are not
    entitled to Chevron deference because of Gardner.
    III
    NOVA also challenges the regulatory provisions that
    apply when the claimant dies while his case is pending
    before the Board of Veterans’ Appeals. The regulations
    provide as follows:
    An appeal pending before the Board of Veterans’
    Appeals when the appellant dies will be dismissed
    without prejudice. A person eligible for substitu-
    8         NAT’L ORG. OF VETERANS ADVOCATES, INC. v. SEC’Y OF
    VETERANS AFFAIRS
    tion under § 3.1010 of this chapter may file with
    the agency of original jurisdiction a request to
    substitute for the deceased appellant. If the agen-
    cy of original jurisdiction grants the request to
    substitute, the case will assume its original place
    on the docket pursuant to Rule 900
    (§ 20.900(a)(2)).
    
    38 C.F.R. § 20.1302
    (a). Rule 900 states in relevant por-
    tion:
    A case returned to the Board following the grant
    of a substitution request or pursuant to an appeal
    of a denial of a substitution request assumes the
    same place on the docket held by the deceased ap-
    pellant at the time of his or her death. Pursuant
    to paragraph (c) of this section, if the deceased
    appellant’s case was advanced on the docket prior
    to his or her death, the substitute will receive the
    benefit of the advanced placement.
    
    38 C.F.R. § 20.900
    (a)(2). NOVA argues that the require-
    ment of a remand to the agency of original jurisdiction is
    also unlawful. When information about the claimant’s
    relatives is on file at the time of the claimant’s death,
    NOVA argues that the Board should decide the request to
    substitute in the first instance, rather than dismiss the
    appeal and remit the matter to the agency of original
    jurisdiction to decide the substitution issue.
    Importantly, section 5121A provides that substitution
    under the new statute “shall be in accordance with such
    regulations as the Secretary [of Veterans Affairs] may
    prescribe.” 38 U.S.C. § 5121A(a)(3). That delegation of
    rulemaking authority gives the Secretary broad power to
    fill the gap explicitly left by Congress for the agency to
    fill. In such cases, where there has been an “express
    delegation of authority to the agency to elucidate a specif-
    ic provision of the statute by regulation,” the ensuing
    legislative rules “are given controlling weight unless they
    NAT’L ORG. OF VETERANS ADVOCATES, INC.   v. SEC’Y OF     9
    VETERANS AFFAIRS
    are arbitrary, capricious, or manifestly contrary to the
    statute.” Chevron, 
    467 U.S. at 843-44
    ; see also Hacker v.
    United States, 
    613 F.3d 1380
    , 1383 (Fed. Cir. 2010);
    Lofton v. West, 
    198 F.3d 846
    , 850 (Fed. Cir. 1999); Trav-
    elstead v. Derwinski, 
    978 F.2d 1244
    , 1250 (Fed. Cir. 1992).
    The regulations governing the disposition of appeals
    pending before the Board at the time of the claimant’s
    death easily satisfy that standard.
    In the course of promulgating the regulation, the DVA
    addressed the argument that the Board should decide
    substitution issues that arise when a claimant dies while
    the case is pending before the Board. Noting that the
    Board’s jurisdiction limits it to deciding appeals, the DVA
    explained in the remarks accompanying the proposed
    rules that the Board “cannot entertain requests to substi-
    tute in the first instance.” Proposed Rule, 76 Fed. Reg. at
    8,668. Moreover, the DVA explained that “allowing the
    Board to decide a substitution request would deprive the
    survivor of the right to the ‘one review on appeal’ man-
    dated by 
    38 U.S.C. § 7104
    (a).” Final Rule, 79 Fed. Reg. at
    52,979. The Board’s jurisdictional statute states:
    All questions in a matter which under section
    511(a) of this title is subject to decision by the
    Secretary shall be subject to one review on appeal
    to the Secretary. Final decisions on such appeals
    shall be made by the Board.
    
    38 U.S.C. § 7104
    (a). The DVA concluded that, consistent
    with the “one review on appeal” principle, the agency of
    original jurisdiction should first decide whether to allow
    substitution, which would enable a dissatisfied prospec-
    tive substitute to obtain Board review of the substitution
    issue on appeal. If the Board were to decide the substitu-
    tion issue in the first instance, there would be no appel-
    late recourse for the claimant within the DVA.
    Finally, the Board is an appellate tribunal and is not
    well equipped to conduct the fact-gathering that may be
    10         NAT’L ORG. OF VETERANS ADVOCATES, INC. v. SEC’Y OF
    VETERANS AFFAIRS
    necessary to determine eligibility for substitution. It was
    reasonable for the DVA to conclude that the agencies of
    original jurisdiction are better suited to perform that
    task.
    In sum, in light of the broad authority Congress gave
    to the Secretary to promulgate regulations administering
    section 5121A, the Secretary’s decision to commit the
    eligibility decision to the agencies of original jurisdiction
    in the first instance is not arbitrary, capricious, or mani-
    festly contrary to the statute. We therefore reject NOVA’s
    challenges to the regulations.
    No costs.
    PETITION DENIED