[Federal Register Volume 71, Number 188 (Thursday, September 28, 2006)]
[Rules and Regulations]
[Pages 56868-56872]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-15894]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 19

RIN 2900-AL97


Board of Veterans' Appeals: Clarification of a Notice of 
Disagreement

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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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

[[Page 56869]]

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 Sec.  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 Sec.  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 Sec.  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

[[Page 56870]]

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

[[Page 56871]]

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 Sec.  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 
Sec.  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.

0
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

0
1. The authority citation for part 19 continues to read as follows:

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


0
2. Section 19.26 is revised and the information collection 
parenthetical is added at the end of the section, to read as follows:


Sec.  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

[[Page 56872]]

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 Sec.  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:


Sec.  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)

 [FR Doc. E6-15894 Filed 9-27-06; 8:45 am]
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