Federal Circuit Upholds Standard Forms Regulations



On April 7, 2016, the United States Court of Appeals for the Federal Circuit (Federal Circuit) issued its decision in National Organization of Veterans’ Advocates, Inc., v. Secretary of Veterans Affairs, No. 2015-7025.  NOVA challenged the validity of VA’s final rule requiring all claims and appeals originate on VA forms.  Standard Claims and Appeals Forms, 79 FR 57,660 (Sept. 25, 2014).  The Federal Circuit previously joined the related petitions of the Veterans Justice Group (No. 2015-7021) and American Legion, AMVETS, Military Order of the Purple Heart, Vietnam Veterans of America, and National Veterans Legal Services Program (No. 2015-7061) with NOVA’s petition.  The parties argued the matter on October 8, 2015; Kenneth Carpenter, Carpenter Chartered, argued for NOVA.

The Federal Circuit denied the petitions and found the final rule valid.  In its analysis, the court divided the challenges to the amended regulations into four categories: (1) intent to file; (2) claim initiation; (3) appeals; and (4) duty to develop claims.

Intent to File

First, the Federal Circuit determined VA’s “intent to file” provision in the final rule was a “logical outgrowth” of the proposed rule.  “Under this standard, an agency’s final rule need not be identical to the proposed rule.”  The Federal Circuit concluded “interested parties” should have anticipated the change in the “intent to file” provision was possible given the notice contained in the proposed rule.   Furthermore, the Federal Circuit found the final rule was more favorable, providing increased opportunities for the veteran to establish a claim’s effective date.  “The Final Rule does not go as far as the Proposed Rule because it does not limit the intent to file process to a VA web-based electronic claims application system.”

Claim Initiation

Regarding informal claims, American Legion argued Congress codified VA’s rule that informal submissions can establish an effective date when it enacted the effective date statute in 1957 and VA cannot amend by regulation to prohibit informal submissions.  Applying Chevron, the Federal Circuit concluded that, “[w]hile Congress modeled the 1957 effective date provision on pre-1957 VA regulations,” it was indirect and did not include any of the operative terms from the 1956 regulation.  “There is no reason to presume that when Congress codified the effective date regulation, it also legislatively adopted, sub silentio, the informal claims regulation.”

In addition, Congress did not choose to codify the informal claims provision of 38 C.F.R. § 3.27 when it codified numerous other pre-1957 regulations and legislative history is silent on the issue.  The Federal Circuit therefore rejected American Legion’s arguments that Congress codified 38 C.F.R. § 3.27 when it “took action” numerous times on 38 U.S.C. § 5110 between 1957 and 2014 and by enacting 38 U.S.C. § 5102(b)-(c).

The Federal Circuit also concluded that VA’s requirement for claims to be initiated on a standard form was consistent with 38 U.S.C. §§ 501(a)(2) and 5110(a)(1).  American Legion argued the rules were arbitrary and capricious because VA did not establish a rational connection between its requirement and its objectives, and also failed to consider the impact of the final rule on veterans.  In response, the Federal Circuit found “VA’s stated reason for favoring standard claims forms is sufficient to show that the Final Rule’s standard form requirement is rational” and “VA is in a better position than this court to evaluate the inefficiencies in its system.”

The Federal Circuit determined VA also had adequately considered the rule’s impact.  Any disproportionate impact on veterans with limited or no internet access is “attenuated” because the provision allows for initiation of a claim by phone.  “If anything, the Final Rule is more claimant-friendly because it increases the menu of options available to the initiating claimant.”

Appeals

NOVA argued congressional intent only required a notice of disagreement (NOD) to include an expression of the intent to appeal and disagreement with a determination.  NOVA also argued VA was precluded from requiring a standardized form to initiate an appeal due to the use of the term “notice of disagreement” in 38 U.S.C. § 7105, instead of the term “forms of application” used in other parts of Title 38.  Relying on its decision in Gallegos v. Principi, the Federal Circuit concluded 38 U.S.C. § 7105 “is not exhaustive and does not restrict the VA’s authority to fashion or articulate additional requirements claimants must satisfy in order to complete an NOD.”  The court further determined “nothing inherent in the term ‘notice’” precludes VA from requiring a standard VA form for filing of NODs.

The Federal Circuit also rejected Veterans Justice Group’s argument that requiring claimants to identify specific issues of disagreement on the standard form is arbitrary, accepting VA’s efficiency rationale.  “Although the VA’s mandatory standard form increases the burden to some claimants when initiating the appeals process, to the extent standardization augments the overall efficiency of the appeals process, individual claimants also reap its benefits.”

Duty to Develop Claims

Finally, the Federal Circuit addressed the arguments that 38 C.F.R. §§ 3.160(a)(3)-(4) and 19.24(b) illegally restrict claims raised by the record but not specifically identified by the veteran, contrary to 38 U.S.C. § 5107(a).  The court applied the first step of Chevron and concluded 38 U.S.C. § 5107(a) “does not directly address whether the VA must develop evidence outside the scope of a pending claim.”

Applying the second step of Chevron, the Federal Circuit held the challenged portions of the rule are a reasonable interpretation of the statute.  “In fact, the regulations do not substantively diverge from the VA’s prior regulation; they do not alter the VA’s general practice of identifying and adjudicating issues and claims that logically relate to the claim pending before the VA. . . . We are even more convinced of this determination because, contrary to Petitioners’ position, a veteran’s claim is not extinguished if the unclaimed condition is not reflected in the claim presented to the VA because the claimant may file a new claim directed to the unrelated evidence.”

The court’s complete decision can be read HERE.

By: Diane Boyd Rauber