  United States Court of Appeals
      for the Federal Circuit
                ______________________

                  JAMES L. KISOR,
                  Claimant-Appellant

                           v.

 DAVID J. SHULKIN, SECRETARY OF VETERANS
                   AFFAIRS,
              Respondent-Appellee
             ______________________

                      2016-1929
                ______________________

   Appeal from the United States Court of Appeals for
Veterans Claims in No. 14-2811, Judge Alan G. Lance, Sr.
                ______________________

   ON PETITION FOR PANEL REHEARING AND
            REHEARING EN BANC
             ______________________

   KENNETH M. CARPENTER, Law Offices of Carpenter
Chartered, Topeka, KS, filed a combined petition for
panel rehearing and rehearing en banc for claimant-
appellant.

    IGOR HELMAN, Commercial Litigation Branch, Civil
Division, United States Department of Justice, Washing-
ton, DC, filed a response to the petition for respondent-
appellee. Also represented by CHAD A. READLER, ROBERT
E. KIRSCHMAN, JR., MARTIN F. HOCKEY, JR.; Y. KEN LEE,
SAMANTHA ANN SYVERSON, Office of General Counsel,
2                                           KISOR   v. SHULKIN



United States Department of Veterans Affairs, Washing-
ton, DC.
                ______________________

    Before PROST, Chief Judge, NEWMAN, LOURIE, SCHALL ∗,
     DYK, MOORE, O’MALLEY, REYNA, WALLACH, TARANTO,
          CHEN, HUGHES, and STOLL, Circuit Judges.
     O’MALLEY, Circuit Judge, with whom NEWMAN and
    MOORE, Circuit Judges, join, dissent from the denial of
            the petition for rehearing en banc.
PER CURIAM.
                          ORDER
    Appellant filed a combined petition for panel rehear-
ing and rehearing en banc. A response to the petition was
invited by the court and filed by the appellee.
     The petition for rehearing was referred to the panel
that heard the appeal, and thereafter, the petition and
response were referred to the circuit judges who are in
regular active service. A poll was requested, taken, and
failed.
      Upon consideration thereof,
      IT IS ORDERED THAT:
      The petition for panel rehearing is denied.
      The petition for rehearing en banc is denied.
    The mandate of the court will be issued on February
7, 2018.
KISOR   v. SHULKIN                                       3



                                  FOR THE COURT

 January 31, 2018                 /s/ Peter R. Marksteiner
      Date                         Peter R. Marksteiner
                                   Clerk of Court




   ∗
        Circuit Judge Schall participated only in the deci-
sion on the petition for panel rehearing.
  United States Court of Appeals
      for the Federal Circuit
                 ______________________

                   JAMES L. KISOR,
                   Claimant-Appellant

                            v.

 DAVID J. SHULKIN, SECRETARY OF VETERANS
                   AFFAIRS,
              Respondent-Appellee
             ______________________

                       2016-1929
                 ______________________

   Appeal from the United States Court of Appeals for
Veterans Claims in No. 14-2811, Judge Alan G. Lance, Sr.
                ______________________

O’MALLEY, Circuit Judge, with whom NEWMAN and
MOORE, Circuit Judges, join, dissenting from the denial of
rehearing en banc.
    The panel in this case held that the word “relevant” in
38 C.F.R. § 3.156(c)(1), a regulation promulgated by the
Department of Veterans Affairs (“VA”), is ambiguous.
Kisor v. Shulkin, 869 F.3d 1360, 1367 (Fed. Cir. 2017).
Indeed, after granting that both parties had offered
reasonable interpretations of the regulation, the panel
held that the regulation is not just ambiguous on its face,
but that the apparent ambiguity is insoluble by resort to
standard interpretive principles. Id. at 1367–68. The
panel, thus, turned to Bowles v. Seminole Rock & Sand
Co., 325 U.S. 410 (1945), and Auer v. Robbins, 519 U.S.
2                                           KISOR   v. SHULKIN



452 (1997), (collectively “Auer”) to resolve the question
presented. It concluded that the VA was entitled to
deference for its interpretation of its own ambiguous
regulation and, on that ground, unsurprisingly found in
favor of the VA. 869 F.3d at 1368–69.
    The panel predicated its decision on Auer deference,
despite the Supreme Court’s repeated reminder that
statutes concerning veterans are to be construed liberally
in favor of the veteran. Henderson v. Shinseki, 562 U.S.
428, 441 (2011); Brown v. Gardner, 513 U.S. 115, 117–18
(1994) (citation omitted). Whatever the logic behind
continued adherence to the doctrine espoused in Auer—
and I see little—there is no logic to its application to
regulations promulgated pursuant to statutory schemes
that are to be applied liberally for the very benefit of
those regulated. When these two doctrines pull in differ-
ent directions, it is Auer deference that must give way. I
dissent from the court’s refusal to take the opportunity to
finally so hold.
     Several justices of the Supreme Court recently have
urged their colleagues to “abandon[] Auer and apply[] the
[Administrative Procedure] Act as written.” Perez v.
Mortg. Bankers Ass’n, 135 S. Ct. 1199, 1212–13 (2015);
see, e.g., id. at 1213–25 (Thomas, J., dissenting) (identify-
ing several “serious constitutional questions lurking
beneath” the doctrine of Auer deference); id. at 1210–11
(Alito, J., concurring in part and concurring in the judg-
ment) (noting that Justices Scalia and Thomas have
offered “substantial reasons why the Seminole Rock
doctrine may be incorrect”); see also Decker v. Nw. Envtl.
Def. Ctr., 568 U.S. 597, 616 (2013) (Roberts, C.J., concur-
ring) (recognizing that “[q]uestions of Seminole Rock and
Auer deference arise as a matter of course on a regular
basis” and noting “some interest in reconsidering those
cases”). Auer “encourag[es] agencies to write ambiguous
regulations and interpret them later,” which “defeats the
purpose of delegation,” “undermines the rule of law,” and
KISOR   v. SHULKIN                                         3



ultimately allows agencies to circumvent the notice-and-
comment rulemaking process. Lisa Schultz Bressman,
Beyond Accountability: Arbitrariness and Legitimacy in
the Administrative State, 78 N.Y.U. L. REV. 461, 551–52
(2003); see also Christopher v. SmithKline Beecham Corp.,
567 U.S. 142, 158 (2012) (acknowledging the “risk that
agencies will promulgate vague and open-ended regula-
tions that they can later interpret as they see fit, thereby
frustrating the notice and predictability purposes of
rulemaking” (internal quotation marks omitted)). And, on
a structural level, by eliminating the separation between
the entity that creates the law and the one that interprets
it, Auer deference “leaves in place no independent inter-
pretive check on lawmaking by an administrative agen-
cy.” John F. Manning, Constitutional Structure and
Judicial Deference to Agency Interpretations of Agency
Rules, 96 COLUM. L. REV. 612, 639 (1996); see also Decker,
568 U.S. at 621 (Scalia, J., concurring in part and dissent-
ing in part) (“Auer deference . . . contravenes one of the
great rules of separation of powers: He who writes a law
must not adjudge its violation.”); Egan v. Del. River Port
Auth., 851 F.3d 263, 280 (3d Cir. 2017) (Jordan, J., con-
curring in the judgment) (critiquing the doctrine of Auer
deference for its effect on the separation of powers).
    This court has no authority to reconsider Auer, of
course. But, leaving aside the continued vitality of Auer
as a general proposition, granting Auer deference to the
VA’s interpretation of its own ambiguous regulations flies
in the face of another line of Supreme Court precedent—
the longstanding “canon that provisions for benefits to
members of the Armed Services are to be construed in the
beneficiaries’ favor.” Henderson, 562 U.S. at 441 (internal
quotation marks omitted); see Gardner, 513 U.S. at 117–
18 (citation omitted) (acknowledging the “rule that inter-
pretive doubt is to be resolved in the veteran’s favor”); see
also Linda D. Jellum, Heads I Win, Tails You Lose: Rec-
onciling Brown v. Gardner’s Presumption that Interpretive
4                                          KISOR   v. SHULKIN



Doubt Be Resolved in Veterans’ Favor with Chevron, 61
AM. U. L. REV. 59, 77 n.141 (2011) (noting that “Gardner’s
Presumption . . . conflicts with Auer deference”). In a case
like this one, where the agency’s interpretation of an
ambiguous regulation and a more veteran-friendly inter-
pretation are in conflict, it is unclear from our precedent
which interpretation should control. See James D. Ridg-
way, Toward a Less Adversarial Relationship Between
Chevron and Gardner, 9 U. MASS. L. REV. 388, 398–401
(2014) (discussing this court’s avoidance of “the tension
between the canons of veteran friendliness and agency
deference”). 1 I have long expressed skepticism about the
applicability of Auer in this context. See, e.g., Johnson v.
McDonald, 762 F.3d 1362, 1366–68 (Fed. Cir. 2014)
(O’Malley, J., concurring) (noting “that the validity of
Auer deference is questionable, both generally and specifi-
cally as it relates to veterans’ benefit cases”); Hudgens v.
McDonald, 823 F.3d 630, 639 n.5 (Fed. Cir. 2016)
(O’Malley, J.) (“In many cases, the tension between Auer
and Gardner is difficult to resolve, since both seemingly
direct courts to resolve ambiguities in a VA regulation but
would, in many cases, counsel contrary outcomes.”). But,
we keep finding reasons not to address the tension be-
tween these doctrines.




    1    As the response to the petition for rehearing
notes, we have “rejected the argument that the pro-
veteran canon of construction overrides the deference due
to the [VA’s] reasonable interpretation of an ambiguous
statute.” Guerra v. Shinseki, 642 F.3d 1046, 1051 (Fed.
Cir. 2011) (emphasis added) (citing Sears v. Principi, 349
F.3d 1326, 1331–32 (Fed. Cir. 2003)). Whatever the
merits of that conclusion, we have yet to decide how to
resolve a conflict between the pro-veteran canon and the
VA’s interpretation of its own ambiguous regulations.
KISOR   v. SHULKIN                                         5



    If only one of these doctrines can prevail in a given
case, the pro-veteran canon must overcome Auer. “Auer
deference is warranted only when the language of the
regulation is ambiguous.” Christensen v. Harris County,
529 U.S. 576, 588 (2000). In interpreting a regulation—
including when deciding whether the regulation is ambig-
uous—we apply the ordinary “rules of statutory construc-
tion.” Roberto v. Dep’t of Navy, 440 F.3d 1341, 1350 (Fed.
Cir. 2006) (citation omitted); see also United States v.
Lachman, 387 F.3d 42, 54 (1st Cir. 2004) (“[W]e look to
agency interpretations only when the statute or regula-
tion remains ambiguous after we have employed the
traditional tools of construction.”). The “rule that inter-
pretive doubt is to be resolved in the veteran’s favor,”
Gardner, 513 U.S. at 117–18, is one of those rules of
statutory construction. A regulation cannot be so ambig-
uous as to require Auer deference if a pro-veteran inter-
pretation of the regulation is possible.
    As the Supreme Court has acknowledged, moreover,
the “general rule” of Auer deference “does not apply in all
cases,” such as those where there are “strong reasons for
withholding the deference that Auer generally requires.”
Christopher, 567 U.S. at 155. The “rule that interpretive
doubt is to be resolved in the veteran’s favor,” Gardner,
513 U.S. at 117–18, provides just such a reason. Defer-
ring to the VA’s interpretation of a statute makes some
sense because Congress has delegated to the VA the
authority to “issue[] a reasonable gap-filling or ambiguity-
resolving regulation.” Sears, 349 F.3d at 1332. But,
where the VA itself has “promulgate[d] [a] vague and
open-ended regulation[] that [it] can later interpret as [it]
see[s] fit”—to the detriment of veterans—no such defer-
ence can be warranted. Christopher, 567 U.S. at 158–59.
    The D.C. Circuit has reached an analogous conclusion
in the context of Indian law, where “[t]he governing canon
of construction requires that ‘statutes are to be construed
liberally in favor of the Indians, with ambiguous provi-
6                                         KISOR   v. SHULKIN



sions interpreted to their benefit.’” Cobell v. Norton, 240
F.3d 1081, 1101 (D.C. Cir. 2001) (quoting Montana v.
Blackfeet Tribe of Indians, 471 U.S. 759, 766 (1985)). The
Cobell court acknowledged that, under Chevron, U.S.A.
Inc. v. Nat. Res. Def. Council, 467 U.S. 837 (1984), “ordi-
narily we defer to an agency’s interpretations of ambigu-
ous statutes entrusted to it for administration.” Cobell,
240 F.3d at 1101. The court nevertheless found that
“Chevron deference is not applicable” in the Indian law
context. Id. It gave the agency’s interpretation “‘careful
consideration,’ but the normally-applicable deference was
trumped by the requirement” to construe statutes liberal-
ly in favor of Indians. Cobell v. Kempthorne (Cobell II),
455 F.3d 301, 304 (D.C. Cir. 2006) (quoting Cobell, 240
F.3d at 1101). The D.C. Circuit has attributed its depar-
ture from the norm of Chevron deference to “the special
strength of this canon.” Albuquerque Indian Rights v.
Lujan, 930 F.2d 49, 59 (D.C. Cir. 1991) (citing Muscogee
(Creek) Nation v. Hodel, 851 F.2d 1439, 1445 n.8 (D.C.
Cir. 1988)).
    The veteran-friendly canon of construction, which
originates in the Supreme Court’s World War II–era
expression of solicitude towards those who “drop their
own affairs to take up the burdens of the nation,” Boone v.
Lightner, 319 U.S. 561, 575 (1943), carries comparable
weight. Indeed, it is difficult to overstate the importance
of the veteran-friendly approach to veterans’ benefits
statutes and their accompanying regulations. As we have
recognized, “the veterans benefit system is designed to
award ‘entitlements to a special class of citizens, those
who risked harm to serve and defend their country. This
entire scheme is imbued with special beneficence from a
grateful sovereign.’” Barrett v. Principi, 363 F.3d 1316,
1320 (Fed. Cir. 2014) (quoting Bailey v. West, 160 F.3d
1360, 1370 (Fed. Cir. 1998) (en banc) (Michel, J., concur-
ring in the result)). That overarching motivation explains
“the uniquely pro-claimant nature of the veterans com-
KISOR   v. SHULKIN                                        7



pensation system,” Hensley v. West, 212 F.3d 1255, 1262
(Fed. Cir. 2000), as well as why the Supreme Court has
“long applied” the pro-veteran canon of interpretation to
the statutory scheme. Henderson, 562 U.S. at 441.
Granting Auer deference to VA regulations conflicts
directly with the moral principles underlying the veterans
benefit system.
     The VA nevertheless urges us to deny en banc review
because the petitioner did not raise this argument in his
appeal. Resp. to Pet. for Rehearing at 11 (citing Pentax
Corp. v. Robison, 135 F.3d 760, 762 (Fed. Cir. 1998)). The
central focus of the parties’ arguments was the interpre-
tation of § 3.156(c)(1). It is hard to imagine how a party
can waive the question of the correct legal standard to
apply in deciding that question. Cf. Winfield v. Dorethy,
871 F.3d 555, 560 (7th Cir. 2017) (“[W]aiver does not
apply to arguments regarding the applicable standard of
review.”). I also note that, in determining whether the
regulation is ambiguous, the panel expressly held that
“canons of construction do not reveal its meaning.” Kisor,
869 F.3d at 1367. The veteran-friendly canon should have
fallen within that category.
    Because the petition raises a significant question
about our standard of review, waiver does not preclude us
from addressing the question en banc. I note, moreover,
that the absence of counsel at the early stages of veterans’
appeals and the fact that, even where counsel appear,
they often do so pro bono, will help assure that we will
continue to find process-related excuses to avoid resolving
this important question. And, as a result, veterans will
continue to be prejudiced by resort to Auer. This case
presents an ideal vehicle for us to consider the reach of
Auer deference when it comes into conflict with the pro-
veteran canon of construction. I respectfully dissent from
the court’s decision not to take this issue up now.
