Gallegos v. Principi, 01-7037.

• Citation: 283 F.3d 1309
• Decision Date: 15 March 2002
• Docket Number: No. 01-7037.,01-7037.
• Parties: Raymond GALLEGOS, Claimant-Appellee, v. Anthony J. PRINCIPI, Secretary of Veterans Affairs, Respondent-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

283 F.3d 1309

Raymond GALLEGOS, Claimant-Appellee, v. Anthony J. PRINCIPI, Secretary of Veterans Affairs, Respondent-Appellant.

No. 01-7037.

United States Court of Appeals, Federal Circuit.

Decided: March 15, 2002.

James W. Stanley, Jr., of North Little Rock, AR, Attorney, argued for claimant-appellant.

Lawrence N. Minch, Attorney, Civil Division, Commercial Litigation Branch, Department of Justice, of Washington, DC, argued for respondent-appellee. With him on the brief were Stuart E. Schiffer, Acting Assistant Attorney General; David M. Cohen, Director; and Todd M. Hughes, Assistant Director. Of counsel on the brief were Richard J. Hipolit, Deputy Assistant General Counsel; and Martie Adelman, Attorney, Department of Veterans Affairs, of Washington, DC.

Kenneth M. Carpenter, NOVA—National Organization of Veterans' Advocates, Inc., of Topeka, KS, for amicus curiae NOVA, INC.

Before LOURIE, RADER, and GAJARSA, Circuit Judges.

RADER, Circuit Judge.

The Court of Appeals for Veterans Claims determined that 38 C.F.R. § 20.201 (1998) — a Department of Veterans Affairs (VA) regulation setting minimum requirements for a notice of disagreement (NOD) — was invalid because the regulation required that an NOD express a desire for review by the Board of Veterans' Appeals (Board). After invalidating the regulation, the Court of Appeals for Veterans Claims held that a letter submitted by Raymond Gallegos's authorized representative to a regional office was a valid NOD even without any expression of a desire for review by the Board. Because the Court of Appeals for Veterans Claims did not properly defer under Chevron U.S.A., Inc. v. Natural Resources Def. Council, Inc., 467 U.S. 837, 844, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694 (1984), and because 38 C.F.R. § 20.201 is not procedurally defective, arbitrary or capricious in substance, or manifestly contrary to statute, this court reverses and remands.

I.

In March 1992, Raymond Gallegos applied for service connection for disability due to diabetes and chloracne (acne-like eruptions on the face, linked to dioxin exposure). In August 1993, Mr. Gallegos amended his claim to include a claim for service connection for Post Traumatic Stress Disorder (PTSD). In September 1994, the regional office (RO) denied his PTSD claim. Mr. Gallegos's representative, the Disabled American Veterans (DAV), submitted a letter entitled "Memo to Rating Board" to the VA on October 11, 1994. This 1994 DAV letter stated: "[I]t is our opinion that denial of the veteran's claim for [PTSD] was a little bit premature. Further development [i.e., a review of other documents] ... would prove beneficial to fair evaluation of this veteran's claim." The record does not indicate what action the VA took in response to that letter.

Mr. Gallegos took no further action on his claim until February 20, 1997, when he filed an application to reopen his disallowed claim for service connection for PTSD. In October 1997, the RO granted that claim effective February 20, 1997, the date of Mr. Gallegos' application to reopen the claim. Soon after, Mr. Gallegos filed an NOD disagreeing with the 1997 effective date. In that NOD, Mr. Gallegos sought an effective date of August 31, 1993, the date on which he first claimed service connection for PTSD.

In December 1998, the Board held that Mr. Gallegos was not entitled to the earlier effective date. In re Gallegos, C 25 623 426, slip op. at 9 (Dec. 9, 1998). Applying 38 C.F.R. § 20.201, the Board reasoned that the 1994 DAV letter — although perhaps questioning the RO's denial of PTSD — did not "indicate the appellant's desire for appellate review." Id. at 8. Thus, the Board concluded that the 1994 DAV letter did not constitute a valid NOD appealing the September 1994 denial of the original PTSD claim. Because Mr. Gallegos did not submit a valid NOD in 1994, the Board made the September 1994 decision final. As a consequence, the Board sustained the effective date of February 20, 1997 for Mr. Gallegos' PTSD benefits.

The Court of Appeals for Veterans Claims reversed the Board's decision. Specifically, the Court of Appeals for Veterans Claims determined that 38 U.S.C. § 7105, the statutory NOD requirement, needed no interpretation or implementation by regulation. Gallegos v. Gober, 14 Vet.App. 50, 56 (2000). Thus, the Court of Appeals for Veterans Claims declined to apply Chevron deference to the VA's regulatory implementation of the statute, namely 38 C.F.R. § 20.201. Relying on the language of § 7105, the prior decision of Tomlin v. Brown, 5 Vet.App. 355 (1993), and the pro-claimant nature of the veteran adjudication system, the veterans court struck from § 20.201 the requirement that an NOD express "a desire for appellate review." The Secretary of Veterans Affairs now appeals.

II.

When reviewing an agency's construction of a statute that it administers, this court first determines "whether Congress has directly spoken to the precise question at issue." Chevron, 467 U.S. at 842, 104 S.Ct. 2778. If the law governs the question under consideration, this court and the agency "must give effect to the unambiguously expressed intent of Congress." Id. at 843, 104 S.Ct. 2778. If, however, the law does not speak to the issue, this court then asks whether the administering agency properly promulgated an interpretative regulation "based on a permissible construction of the statute." Id.; Micron Tech., Inc. v. United States, 243 F.3d 1301, 1308 (Fed.Cir.2001).

In other words, this court defers to the VA's reasonable interpretation of a statutory provision when the law does not directly address the precise question at issue, in other words, when the law leaves "a gap for an agency to fill." Chevron, 467 U.S. at 843, 104 S.Ct. 2778 ("The power of an administrative agency to administer a congressionally created ... program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress." (quoting Morton v. Ruiz, 415 U.S. 199, 231, 94 S.Ct. 1055, 1072, 39 L.Ed.2d 270 (1974)) (emphasis added)); see also Immigration & Naturalization Serv. v. Aguirre-Aguirre, 526 U.S. 415, 424, 119 S.Ct. 1439, 1445, 143 L.Ed.2d 590 (1999). The Supreme Court chose to emphasize that Chevron deference applies unless the statute speaks "directly" "to the precise question." Under Chevron deference, "any ensuing [agency] regulation is binding in the Courts unless procedurally defective, arbitrary or capricious in substance, or manifestly contrary to the statute." United States v. Mead Corp., 533 U.S. 218, 121 S.Ct. 2164, 2171, 150 L.Ed.2d 292 (2001).

III.

Under 38 U.S.C. § 501, "[t]he Secretary has authority to prescribe all rules and regulations which are necessary or appropriate to carry out the laws administered by the Department and are consistent with those laws." 38 U.S.C. § 501 (1994) (emphasis added). The Secretary of Veterans Affairs asserts that the VA properly interpreted and implemented 38 U.S.C. § 7105 by promulgating 38 C.F.R. § 20.201. Specifically, the Secretary notes that title 38 does not define a "notice of disagreement." The Secretary's regulation seeks to define that undefined statutory term. In other words, the Secretary seeks to fill a gap in the statute.

Section 7105(a) states that: "Appellate review will be initiated by a notice of disagreement and completed by a substantive appeal...." Section 7105(b) further states, in relevant part:

(1) [A] notice of disagreement shall be filed within one year from the date of mailing of notice of the result of initial review or determination. Such notice, and appeals, must be in writing and be filed with the activity which entered the determination with which disagreement is expressed ....

(2) Notices of disagreement, and appeals, must be in writing and may be filed by the claimant, the claimant's legal guardian, or such accredited representative, attorney, or authorized agent as may be selected by the claimant or legal guardian.

38 U.S.C. § 7105(b)(1)-(2) (1994) (emphasis added).

This statutory language supplies some requirements for a valid NOD. For instance, title 38 requires a written NOD. In addition, the claimant or his representative must file this writing with the "activity which entered the determination with which disagreement is expressed" — the regional office in this case — within one year of notice of an initial determination. The statute does not, however, define "notice of disagreement" or suggest sufficient expressions to make a writing an NOD. The statute also does not suggest that its specifications for an NOD — writing, one-year time limit from notice, etc. — are the only requirements for a valid NOD. In sum, § 7105 does not address directly the precise question under review. In a general sense, the statute does not define an NOD. More important, on the precise question under review, the statute does not directly address whether an NOD is sufficient without a request for appellate review. Therefore, under the standard set by the Supreme Court, title 38 contains "a gap for an agency to fill" with regard to the definition of a legally valid NOD. Chevron, 467 U.S. at 843, 104 S.Ct. 2778.

Indeed, the Veterans Department had supplied a regulatory definition of the term "notice of disagreement" as early as 1963. In that earlier regulatory definition, the former 38 C.F.R. § 19.1a(b), an NOD "should be in terms which can be reasonably construed as evidencing a desire for review of [the VA's] determination." Later enactments did not disturb these earlier regulatory definitions of NOD.

Thus, § 7105 does not express a complete and unambiguous meaning for the statutory term "notice of disagreement." Moreover, the statute does not directly address the sufficiency of an NOD without a request for appellate review — the precise question posed by this case. In sum, Chevron deference applies to the VA's implementation of § 7105, i.e., 38 C.F.R. § 20.201.

The VA...