National Organization of Veterans Advocates, Inc. v. Secretary of Veterans Affairs , 809 F.3d 1359 ( 2016 )

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