This morning the Federal Circuit issued two precedential opinions in a government contracts case and a veterans case. Here are the introductions to the opinions.

Agility Public Warehousing Co. v. United States (Precedential Opinion)

In Appeal No. 19-1886, Appellant Agility Public Warehousing Company K.S.C.P. challenges a final decision from the United States Court of Federal Claims relating to the United States’ offset of moneys due to Agility. The Court of Federal Claims determined that the United States’ offset was valid and, thus, granted judgment in favor of the United States. Because the Court of Federal Claims did not evaluate the merits of the United States’ offset determination nor the procedures required by law, we vacate the decision and remand for further proceedings. Consolidated with Appeal No. 19-1886 is Appeal No. 19-1887, in which we affirm the Court of Federal Claims’ dismissal for lack of subject matter jurisdiction. 

Kisor v. Wilkie (Precedential Opinion)

In Kisor v. Shulkin, 869 F.3d 1360 (Fed. Cir. 2017) (“Kisor I”), we affirmed the decision of the United States Court of Appeals for Veterans Claims (“Veterans Court”) in Kisor v. McDonald, No. 14-2811, 2016 WL 337517 (Vet. App. Jan 27, 2016) (“Veterans Court Decision”). In that decision, the Veterans Court affirmed the April 29, 2014 decision of the Board of Veterans’ Appeals (“Board”) that denied Mr. Kisor an effective date earlier than June 5, 2006, for the grant of service connection for his post-traumatic stress disorder (“PTSD”). Id. at *1. 

In its decision, the Board held that Mr. Kisor was not entitled to an earlier effective date under 38 C.F.R. § 3.156(c)(1). J.A. 78–91. That regulation states that the Department of Veterans Affairs (“VA”) will reconsider a claim after a final decision if it receives “relevant official service department records that existed and had not been associated with the claims file when VA first decided the claim.” 38 C.F.R. § 3.156(c)(1). The regulation further states that “[a]n award made based all or in part on the records identified by [§ 3.156(c)(1)] is effective on the date entitlement arose or the date VA received the previously decided claim, whichever is later.” Id. § 3.156(c)(3). 

In Mr. Kisor’s case, the Board concluded that two service department records, which were received in 2006 and 2007, were not “relevant” under the regulation because they did not pertain to the basis of the 1983 denial of Mr. Kisor’s claim, which was the lack of a diagnosis of PTSD. J.A. 85, 89, 90. Rather, they pertained to whether Mr. Kisor was in combat in “Operation Harvest Moon,” a military operation in Vietnam in 1965. In that regard, when it denied Mr. Kisor’s claim, the VA Regional Office (“RO”) had before it a VA psychiatric examiner’s report that recited Mr. Kisor’s account of his participation in Operation Harvest Moon, see J.A. 19–20, and the RO did not dispute that account. The Board reasoned that the documents would not have changed the “outcome” of the VA’s 1983 decision, which was based on the lack of “a diagnosis of PTSD,” because they bore on a matter relating to entitlement to service connection for PTSD that was not in dispute: the presence of an in-service stressor. Id. at 90–91. The Board thus denied Mr. Kisor an effective date earlier than June 5, 2006, for a grant of service connection for his PTSD. J.A. 91. June 5, 2006 was the date Mr. Kisor submitted a request to reopen his claim, which the VA granted. J.A. 34. Pursuant to 38 U.S.C. § 5110(a) and 38 C.F.R. § 3.400(q)– (r), as in effect in 2014, the effective date of the grant of service connection for Mr. Kisor’s reopened claim was the date he submitted his request to reopen. 

In our prior decision, we held that the Board had not erred in construing the term “relevant” as it appears in § 3.156(c)(1). In reaching that holding, we concluded that the term “relevant” was ambiguous and had more than one reasonable meaning. Kisor I, 869 F.3d at 1367–68. We therefore deferred, under Auer v. Robbins, 519 U.S. 452, 461 (1997), to the Board’s interpretation of the term, which we found to be reasonable. Kisor I, 869 F.3d at 1367–69. 

The case is now before us again on remand from the Supreme Court. See Kisor v. Wilkie, 139 S. Ct. 2400 (2019) (“Kisor II”). In Kisor II, the Court held that, in Kisor I, we were too quick to extend Auer deference to the Board’s interpretation of “relevant” as it appears in § 3.156(c)(1). The Court therefore vacated our decision and remanded the case to us with the instruction that we decide whether Auer deference “applies to the agency interpretation at issue.” 139 S. Ct. at 2408. The Supreme Court stated that “[f]irst and foremost, a court should not afford Auer deference unless the regulation is genuinely ambiguous.” Id. at 2415. The Court directed us on remand “to determine, based on indicia like text, structure, history, and purpose, whether the regulation really has more than one reasonable meaning.” Id. at 2424. 

For the reasons stated below, we now conclude that, in the setting of § 3.156(c)(1), the term “relevant” is not “genuinely ambiguous.” Id. at 2415. Accordingly, Auer deference is not appropriate in this case. In our view, in the context of § 3.156(c)(1), the term “relevant” has only “one reasonable meaning,” the meaning the Board attributed to it. As the Board determined, under the regulation, in order to be “relevant,” a record must speak to a matter in issue, in other words, a matter in dispute. We therefore once again affirm the decision of the Veterans Court that affirmed the decision of the Board denying Mr. Kisor entitlement under § 3.156(c)(1) to an effective date earlier than June 5, 2006, for his PTSD. 

REYNACircuit Judge, dissenting

This appeal is on remand from the U.S. Supreme Court. 

Three years ago, this panel unanimously held that the plain text of 38 C.F.R. § 3.156(c) was ambiguous as to the scope of the word “relevant.” It was on that basis that we applied Auer deference to what we determined was a reasonable interpretation of the regulation by the Department of Veterans Affairs (“VA”). We did not at the time consider a countervailing tool used to resolve ambiguities in veterans’ benefits regulations, the pro-veteran canon. The Supreme Court vacated our decision because it relied prematurely on Auer, and on remand, the VA waived Auer altogether. Now, the majority decides that the agency’s construction—of the same text we held was ambiguous— has become unambiguously correct. Slip Op. 15–17. On that basis, the majority again avoids application of the pro-veteran canon. 

I disagree with my colleagues’ new position that the “one reasonable meaning” of the word “relevant” in 38 C.F.R. § 3.156(c) is the VA’s. Slip Op. 4, 9, 16. Nothing in the plain meaning or context of the provision requires “relevant” records to “speak to the basis for the VA’s prior decision,” to address facts expressly “in dispute,” or to “affect the outcome.” See Slip Op. 8, 9, 12, 14. Rather, the established constructions of the terms “relevant records” and “material evidence” in related veterans’ benefit provisions support the conclusion that records are “relevant” so long as they help to establish unestablished facts that are necessary for substantiating the veteran’s claim. The majority relies on flawed assumptions and inferences in adopting the VA’s construction and points to nothing that renders the more pro-veteran construction unreasonable. 

Fundamentally, when a veterans’ benefit provision is ambiguous on its face, the pro-veteran canon must be weighed alongside the other traditional tools in resolving interpretive doubt. Neither the Supreme Court’s decision in this case, nor this court’s precedent, supports the majority’s assumption that the canon is to be treated like Auer deference as solely a tiebreaker of last resort. Rather, the Court clarified that the “traditional tools of construction” must precede deference to the agency. As such a tool, the pro-veteran canon requires that we discern the remedial purpose of a veterans’ benefit provision in the context of the veterans’ benefit scheme as a whole and ensure that our construction effectuates, rather than frustrates, that purpose. By brushing aside the canon, the majority adopts a construction of § 3.156(c) that substantially narrows the scope of its remedial function. Thus, Mr. Kisor, a veteran who was denied twenty-three years of compensation for his service-connected disability after a disgracefully inadequate VA review, is denied relief under a regulation specifically promulgated to benefit him and other veterans in his situation. The result will reverberate far beyond this case. 

I dissent.