E6-15894. Board of Veterans' Appeals: Clarification of a Notice of Disagreement

AGENCY:

Department of Veterans Affairs.

ACTION:

Final rule.

SUMMARY:

The Department of Veterans Affairs (VA) is amending its regulations governing appeals to the Board of Veterans' Appeals (BVA or Board) to clarify the actions an agency of original jurisdiction (AOJ) must take to determine whether a written communication from a claimant that is ambiguous in its purpose is intended to be a Notice of Disagreement (NOD) with an adverse claims decision.

DATES:

Effective Date: This rule is effective October 30, 2006.

Applicability Date: VA will apply this rule to appeals pending before VA in which an NOD was filed on or after the effective date of this rule.

FOR FURTHER INFORMATION CONTACT:

Steven L. Keller, Senior Deputy Vice Chairman, Board of Veterans' Appeals (01C), Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420, 202-565-5978.

SUPPLEMENTARY INFORMATION:

The Board is an administrative body within VA that decides appeals from denials by AOJs of claims for veterans' benefits, as well as occasional cases of original jurisdiction. The Board is under the administrative control and supervision of a Chairman directly responsible to the Secretary. 38 U.S.C. 7101.

I. Background

On June 30, 2005, VA published in the Federal Register (70 FR 37723) a notice of proposed rulemaking that outlined procedures for AOJs to follow when an unclear written communication is received from a claimant who may or may not intend the communication to serve as an NOD. In summary, the proposed rulemaking required the AOJ to contact the claimant to request clarification in such cases. The proposed rule also required that the AOJ inform the claimant that VA will not consider an unclear communication to be an NOD unless the claimant responds in a timely fashion to the request for clarification.

II. Analysis of Public Comments

We received two comments objecting to certain aspects of the proposed rule. The first commenter urged that the proposed rule be amended to require: (1) That the AOJ contact must include written notice of the request for clarification; (2) that such notice be sent to the claimant and his or her representative; and, (3) that any document from a claimant using the language “Notice of Disagreement” be automatically treated as such by VA. The second commenter opposed the proposed rule as ultra vires, in direct conflict with statutory authority, and unfairly burdensome to claimants. Each of these comments is addressed below.

A. Notice of the Clarification Request

We proposed to state in 38 CFR 19.26(b) that if, within the time period for filing an NOD, the AOJ receives from the claimant a written communication that is ambiguous as to whether it expresses an intent to appeal, the AOJ will contact the claimant to request clarification of the claimant's intent. One commenter urged VA to amend the proposed regulation to explicitly state that the “contact” must include written notification of the request for clarification, asserting that written communication is essential to properly document appeal periods and the nature of the communication.

VA agrees that properly documenting communications with claimants is crucial to administering an effective legal system. For example, the Veterans Benefits Administration (VBA), which handles the vast majority of initial appeals, has a current practice to document any oral communication with claimants. The practice of reducing oral contacts to writing is also consistent with other VA regulations, such as the duty to assist provisions set forth in 38 CFR 3.159(c), which provide that VA will make a record of any oral notice conveyed to the claimant. In response to the commenter's concern for proper documentation, we are amending the proposed regulation by adding the following two sentences after the first sentence of paragraph (b) of 38 CFR 19.26: “This contact may be either oral or written. VA will make a written record of any oral clarification request conveyed to the claimant, including the date of the adverse decision involved and the claimant's response.” A written record of the clarification request and response will provide necessary documentation if the claimant expresses an intent to appeal, and will also record the nature of the communication. Additionally, although not specifically requested by the commenter, by requiring the AOJ to record the date of the decision involved, there will be documentation for the record as to what decision and claim(s) may be at issue.

B. Notice to Claimant and Representative

The same commenter recommended that all “notices” be sent to both the claimant and the claimant's representative, if any, to ensure that they are fully apprised of VA's actions. VBA already has a long-standing practice of furnishing representatives with copies of all written correspondence sent to the claimant. We agree that it would be helpful to state this practice in § 19.26 and have added language to paragraph (b) stating that, “For written contacts, VA will mail a letter requesting clarification to the claimant and send a copy to his or her representative and fiduciary, if any.”

The commenter expressed concern that due to the length of time it takes for claims to proceed, it is possible that the VA file may not contain adequate updates as to contact information for either person, suggesting that notifying both persons would help ensure that at least one of the persons would receive the notice.

We note that in paragraph (e), the proposed rule defined references to the “claimant” to include reference to the claimant, his or her representative, if any, and his or her fiduciary, if any. In responding to the comment, we have determined that this proposed language might create ambiguity by indicating that a claimant, his or her representative, and his or her fiduciary all must respond to the AOJ's request for clarification under paragraph (c), or that VA must routinely contact all three individuals when VA seeks clarification under paragraph (b). We have therefore changed the text of paragraph (e) to read: “For the purpose of the requirements in paragraphs (b) through (d) of this section, references to the “claimant” include reference to the claimant or his or her representative, if any, or to his or her fiduciary, if any, as appropriate.” (Emphasis added).

In regard to the commenter's concern that VA files may not contain adequate updates as to contact information, we note that it is incumbent upon claimants and representatives to keep VA apprised of updated contact information. See Woods v. Gober, 14 Vet. App. 214, 220 (2000) (absent evidence that the veteran notified VA of a change of address, and absent evidence that mail sent to the last known address was returned as undeliverable, VA is entitled to rely on that address). VA has a duty to document this information properly when VA is put on notice of changes in contact information, such as a new address or phone number. See Cross v. Brown, 9 Vet. App. 18, 19 (1996) (where mail is returned as undeliverable and a claimant's file discloses other possible and plausible addresses, VA must attempt to locate the claimant at the alternative known addresses). Section 19.26 would not alter the current allocation of responsibilities regarding updating a claimant's contact information, and the current system will facilitate the administration of § 19.26.

Regarding VA's oral requests for clarification, longstanding VA practice has been to contact the person who sent us the potential NOD. We believe this is the most efficient way of determining the intent of the sender. Based upon our review of this comment, we have added language in § 19.26(b) to reflect this practice.

C. Effect of the Words “Notice of Disagreement” in a Written Statement

VA also makes no change based on the commenter's request that any communication from a claimant that uses the statutory language “Notice of Disagreement” automatically be treated as an NOD, as this request is outside of the scope of this rulemaking. The purpose of this rulemaking is not to amend the definition of an NOD. Rather, the purpose is to establish procedures to follow when an unclear communication is received that may be intended as an NOD. The requirements for a timely NOD are well-established in binding statute and caselaw. 38 U.S.C. 7105; 38 CFR 20.201; see Gallegos v. Principi, 283 F.3d 1309 (Fed. Cir. 2002). Notably, 38 CFR 20.201, states that although “special wording is not required,” an NOD is “[a] written communication from a claimant or his or her representative expressing dissatisfaction or disagreement” with an AOJ determination and a desire for appeal.

The commenter presented an example of a case in which an appellant's statement was not treated as an NOD by the regional office, but instead was treated as a claim to reopen based on the appellant's request to “reconsider” his denied claim. This case presents a type of situation that this final rule will address. Under this final rule, AOJs will be required to contact any claimant who, within one year after an adverse VA decision, files a written communication that is ambiguous in its purpose, if the communication expresses dissatisfaction or disagreement with an adverse decision but the AOJ cannot clearly identify that communication as expressing an intention to appeal. Therefore, although VA is not amending the proposed rule to state that any document using the language “Notice of Disagreement” be recognized as such, such a document would “express[] dissatisfaction or disagreement with the adverse decision,” and would therefore trigger the clarification process in this final rule. Therefore, VA believes that this final rule will alleviate the underlying concerns raised by the commenter regarding misinterpretation of a claimant's intent in a written document.

D. The Rule as Ultra Vires

We proposed to set forth in 38 CFR 19.26(c) that the claimant must respond to an AOJ's request for clarification within certain time periods, and we described the consequences for not responding. One of the commenters was concerned that this provision was ultra vires, asserting that it “adds an additional requirement for any potential NOD which the AOJ deems ‘ambiguous’,” and conflicts with the requirements of 38 U.S.C. 7105. The commenter remarked that the requirements for a valid NOD are specified in 38 U.S.C. 7105, which does not require a supplemental response from a claimant to perfect an NOD. The commenter also stated that such a requirement does not fill any gaps in the law.

VA disagrees with this comment for several reasons. As the commenter correctly points out, the requirements for a valid NOD are specified in 38 U.S.C. 7105, which provides the time limit for submitting an NOD and requires that an NOD be in writing and filed with the activity that entered the determination with which disagreement is expressed. However, under 38 U.S.C. 501, the Secretary has authority to prescribe all rules and regulations which are necessary and appropriate to carry out the laws administered by the Department. This authority finds additional support in Chevron v. Natural Resources Defense Council, 467 U.S. 837 (1984), which held that agencies are permitted to promulgate regulations that reasonably interpret the statutory scheme, when the statute is not otherwise clear and plain on its face. Although 38 U.S.C. 7105 provides timeliness and filing requirements for an NOD, and states that the NOD must be in writing, the statute is silent as to the content of the NOD. To fill this gap, VA promulgated rules that describe the content requirements for a written NOD and the actions the AOJ must take when an NOD is filed. These rules have been upheld against repeated challenge. See, e.g., Gallegos, 283 F.3d at 1314 (“Section 7105 does not preclude other requirements for an NOD.”); Disabled Am. Veterans v. Sec'y of Veterans Affairs, 327 F.3d 1339, 1351-52 (Fed. Cir. 2003) (upholding VA's regulations governing the post-NOD statement of the case procedures); Ledford v. West, 136 F.3d 776, 780 (Fed. Cir. 1998) (discussing and applying VA's NOD content requirements).

This rulemaking will not affect those existing rules. Instead, this rule will enable VA to assist claimants who filed documents that do not meet the well-established statutory and regulatory requirements. Finally, this rulemaking is properly within VA's rulemaking authority. It imposes no new requirements on claimants and simply provides claimants with an opportunity to clarify a document that, under current law and regulation, VA would not be required to treat as an NOD. Thus, VA makes no change based on this comment.

E. The Burden on the Claimant

The same commenter remarked that the clarification requirement would place an unfair burden on claimants, asserting that claimants would now be required to jump through a “second hoop” in order to appeal an adverse decision. As an alternative, the commenter suggested that the burden should remain upon the AOJ to explain in a statement of the case why certain correspondence did not constitute an NOD, rather than shifting the burden to the claimant to explain why it does. VA disagrees with this comment for several reasons. First, the commenter is presupposing that this rulemaking will have adverse effects for veterans and other claimants seeking veterans benefits. On the contrary, we believe this rulemaking will lead to more favorable results for claimants. By requiring AOJs to seek clarification of all ambiguous, potential NODs, VA will attempt to preserve for continued appellate review appeals that may have been rejected in the past as not fully meeting the requirements set forth in 38 CFR 20.201.

VA emphasizes that the purpose behind this rulemaking is not to create a “second hoop” in the process, but rather to set forth standard procedures for clarifying an unclear communication from a claimant that may constitute a potential NOD, so that all claimants who wish to appeal may do so. Claimants who file clearly-identifiable NODs will not be contacted for clarification. Rather, only those who file unclear potential NODs will be contacted with a request for clarification. The appellate system is already set up so that some affirmative action is required by claimants. By statute, claimants must file a timely NOD to initiate an appeal. 38 U.S.C. 7104. This rulemaking does not create an additional requirement. Rather, it provides a second chance to a claimant who did not meet their initial burden of submitting an NOD that meets the requirements of 38 CFR 20.201. As this clarification process may be done orally, with the oral communication reduced to writing by VA, this response requires little effort by a claimant, and can only serve to help his or her claim. Lastly, we wish to respond to the commenter's suggestion that the burden should remain on the AOJ to explain in its statement of the case (SOC) why the correspondence did not constitute a valid NOD. Under the current rules, an SOC is only prepared if there is an adequate NOD. See 38 CFR 19.26. Therefore, in the absence of an adequate NOD, the AOJ will not issue an SOC. Although the adequacy of an NOD is an appealable action, the claimant first must protest an adverse AOJ determination as to the adequacy of an NOD, and then the AOJ will issue an SOC. See 38 CFR 19.28.

VA acknowledges the commenter's concern that the appellant not be unduly burdened by having to respond to a request for clarification. However, the commenter's view of where the burden lies is misplaced. As stated earlier, the purpose of this rule is not to create a new burden for the claimant. Rather, this final rule addresses the situation where the claimant did not meet their existing burden to file an adequate NOD. It will then be incumbent upon the AOJ to contact the claimant and request clarification as to any unclear written communication that may be intended as an NOD. Without this final rule, an ambiguous written communication may be properly rejected by the AOJ as not meeting the requirements for an adequate NOD. With this final rule, the claimant is given an opportunity to clarify his or her intent, and thus pursue an appeal.

III. 38 CFR 19.26(b) and (c)(1)(i)

Although not specifically addressed by the comments, we also are making two minor changes to the proposed rule, for purposes of clarity and consistency. We proposed to state in 38 CFR 19.26(b) that the AOJ would contact the claimant to request clarification of a written communication received from a claimant within one year after issuing an adverse decision. We also proposed to state in 38 CFR 19.26(c)(ii) that the claimant had one year after the date of mailing notice of the adverse decision. In order to ensure consistency between these two provisions, we are amending the proposed language in paragraph (b) so that the word “issuing” is changed to “mailing.” This change will remove any potential confusion as to exactly when a decision was “issued.” The date of mailing is a precise, easily-identifiable date, which is typically relied upon as the actual date of notice to a claimant. See 38 CFR 20.302.

We also proposed to state in 38 CFR 19.26(c)(1)(i) that the claimant must respond to the AOJ's request for clarification within “60 days after the date of mailing of the AOJ's request for clarification.” However, as the final rule will allow for oral clarification requests that are reduced to writing, we are changing 38 CFR 19.26(c)(1)(i) to read “60 days after the date of the AOJ's clarification request.”

IV. 38 CFR 19.27

Finally, we would clarify § 19.27 by slightly revising the proposed text, which required an administrative appeal “[i]f, after following the procedures set forth in 38 CFR 19.26, there remains within the agency of original jurisdiction a question as to whether a written communication expresses an intent to appeal or as to which denied claims a claimant wants to appeal.” Rather than refer to “a question” that remains, we will refer to “a conflict of opinion or a question pertaining to a claim.” The revised reference is taken from VA's administrative appeal regulation, 38 CFR 19.50, and clarifies that § 19.27 is referring exclusively to an intra-agency disagreement that may be resolved through the administrative appeal procedures. This slight revision does not change the scope of the original proposed rulemaking, which also applied only to resolution of intra-agency disagreement through an administrative appeal.

For the reasons stated above and in the notice of proposed rulemaking, VA will adopt the proposed rule as final, with the changes discussed above.

Unfunded Mandates

The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in an expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any given year. This final rule would have no such effect on State, local, and tribal governments, or on the private sector.

Executive Order 12866

Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Order classifies a rule as a significant regulatory action requiring review by the Office of Management and Budget if it meets any one of a number of specified conditions, including: Having an annual effect on the economy of $100 million or more, creating a serious inconsistency or interfering with an action of another agency, materially altering the budgetary impact of entitlements or the rights of entitlement recipients, or raising novel legal or policy issues. VA has examined the economic, legal, and policy implications of this final rule and has concluded that it is a significant regulatory action under Executive Order 12866.

Regulatory Flexibility Act

The Secretary hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. Only VA beneficiaries could be directly affected. Therefore, pursuant to 5 U.S.C. 605(b), this final rule is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604.

Paperwork Reduction Act

This rule contains provisions constituting a collection of information under the Paperwork Reduction Act (44 U.S.C. 3501-3521). Such information collection requirements have been approved by the Office of Management and Budget and have been assigned OMB Control Number 2900-0674.

Catalog of Federal Domestic Assistance Numbers

There is no Catalog of Federal Domestic Assistance number for this rule.

List of Subjects in 38 CFR Part 19

• Administrative practice and procedure
• Claims
• Veterans

Approved: June 20, 2006.

Gordon H. Mansfield,

Deputy Secretary of Veterans Affairs.

For the reasons set forth in the preamble, 38 CFR Part 19 is amended as follows:

PART 19—BOARD OF VETERANS' APPEALS: APPEALS REGULATIONS

Subpart B—Appeals Processing by Agency of Original Jurisdiction

1. The authority citation for part 19 continues to read as follows:

Authority: 38 U.S.C. 501(a), unless otherwise noted.

2. Section 19.26 is revised and the information collection parenthetical is added at the end of the section, to read as follows:

§ 19.26

Action by agency of original jurisdiction on Notice of Disagreement.

(a) Initial action. When a timely Notice of Disagreement (NOD) is filed, the agency of original jurisdiction (AOJ) must reexamine the claim and determine whether additional review or development is warranted.

(b) Unclear communication or disagreement. If within one year after mailing an adverse decision (or 60 days for simultaneously contested claims), the AOJ receives a written communication expressing dissatisfaction or disagreement with the adverse decision, but the AOJ cannot clearly identify that communication as expressing an intent to appeal, or the AOJ cannot identify which denied claim(s) the claimant wants to appeal, then the AOJ will contact the claimant to request clarification of the claimant's intent. This contact may be either oral or written.

(1) For oral contacts, VA will contact whoever filed the communication. VA will make a written record of any oral clarification request conveyed to the claimant including the date of the adverse decision involved and the response. In any request for clarification, the AOJ will explain that if a response to this request is not received within the time period described in paragraph (c) of this section, the earlier, unclear communication will not be considered an NOD as to any adverse decision for which clarification was requested.

(2) For written contacts, VA will mail a letter requesting clarification to the claimant and send a copy to his or her representative and fiduciary, if any.

(c) Response required from claimant—(1) Time to respond. The claimant must respond to the AOJ's request for clarification within the later of the following dates:

(i) 60 days after the date of the AOJ's clarification request; or

(ii) One year after the date of mailing of notice of the adverse decision being appealed (60 days for simultaneously contested claims).

(2) Failure to respond. If the claimant fails to provide a timely response, the previous communication from the claimant will not be considered an NOD as to any claim for which clarification was requested. The AOJ will not consider the claimant to have appealed the decision(s) on any claim(s) as to which clarification was requested and not received.

(d) Action following clarification. When clarification of the claimant's intent to file an NOD is obtained, the AOJ will reexamine the claim and determine whether additional review or development is warranted. If no further review or development is required, or after necessary review or development is completed, the AOJ will prepare a Statement of the Case pursuant to § 19.29 unless the disagreement is resolved by a grant of the benefit(s) sought on appeal or the NOD is withdrawn by the claimant.

(e) Representatives and fiduciaries. For the purpose of the requirements in paragraphs (b) through (d) of this section, references to the “claimant” include reference to the claimant or his or her representative, if any, or to his or her fiduciary, if any, as appropriate.

(Authority: 38 U.S.C. 501, 7105, 7105A)

(The Office of Management and Budget has approved the information collection requirements in this section under control number 2900-0674)

3. Section 19.27 is revised to read as follows:

§ 19.27

Adequacy of Notice of Disagreement questioned within the agency of original jurisdiction.

If, after following the procedures set forth in 38 CFR 19.26, there remains within the agency of original jurisdiction a conflict of opinion or a question pertaining to a claim regarding whether a written communication expresses an intent to appeal or as to which denied claims a claimant wants to appeal, the procedures for an administrative appeal, as set forth in 38 CFR 19.50-19.53, must be followed.

(Authority: 38 U.S.C. 501, 7105, 7106)