575 U.S. 92, 97 n.1, 135 S. Ct. 1199, 1204, 191 L. Ed. 2d 186 (2015)
The dispute in these cases centers on the Department of Labor's efforts to determine whether mortgage-loan officers qualify for the administrative exemption under the Fair Labor Standards Act of 1938.1
In 1999 and again in 2001, the Department's Wage and Hour Division issued opinion letters opining that mortgage-loan officers do not qualify for the exemption.2
When the Department promulgated its current regulations in 2004 through notice-and-comment rulemaking, the Mortgage Bankers Association requested a new opinion interpreting the revised regulations as they applied to mortgage-loan officers.3 In 2006, the Department issued an opinion letter finding that mortgage-loan officers fell within the administrative exemption under the 2004 regulations.4 Four years later, however, the Wage and Hour Division again altered its interpretation.5
The Department's 2010 Administrator's Interpretation reviewed the provisions of the 2004 regulations and judicial decisions addressing the administrative exemption. It concluded that mortgage-loan officers have a primary duty of making sales for their employers and therefore do not qualify for the administrative exemption.6 The Department accordingly withdrew its 2006 opinion letter.7
The 2010 Administrator's Interpretation was issued without notice or an opportunity for comment, like the earlier opinion letters.8 The Mortgage Bankers Association filed a complaint in Federal District Court challenging the Administrator's Interpretation.9 Three former mortgage-loan officers—Beverly Buck, Ryan Henry, and Jerome Nickols—subsequently intervened in the case to defend the Administrator's Interpretation.10
The District Court granted summary judgment to the Department.11 The D.C. Circuit reversed.12 The Supreme Court granted certiorari to review the case.13
Whether the Paralyzed Veterans doctrine requiring an agency to use notice-and-comment procedures when it significantly revises a prior definitive interpretation of a regulation is consistent with the Administrative Procedure Act?14
The Administrative Procedure Act exempts interpretive rules from the notice-and-comment requirements of 5 U.S.C. § 553(b)(A).15 This categorical exemption applies when an agency issues an initial interpretive rule and when it later amends or repeals that rule.16 Section 2 of the APA defines rulemaking to include amendments and repeals but does not prescribe procedures; those are supplied exclusively by section 4.17 The Paralyzed Veterans doctrine, by requiring notice and comment whenever an agency significantly revises a prior definitive interpretation of a regulation, imposes judge-made procedural obligations that exceed the maximum requirements Congress established in the APA.18
No. The 2010 Administrator's Interpretation was an interpretive rule addressing the 2004 regulations on the administrative exemption. The Department of Labor's Wage and Hour Division had previously issued opinion letters in 1999, 2001, and 2006 on the same subject. Because the APA categorically exempts interpretive rules from notice-and-comment procedures, the Department was not required to employ those procedures when it revised its interpretation in 2010 and withdrew the 2006 letter.19 The Paralyzed Veterans doctrine conflicts with this statutory exemption by mandating additional procedures not found in the APA and therefore cannot stand.20
The Paralyzed Veterans doctrine is inconsistent with the Administrative Procedure Act.21
Related opinions on this issue
Justice Alito joined the opinion of the Court except for Part III-B.22 He agreed that the Paralyzed Veterans doctrine is incompatible with the Administrative Procedure Act.23 He expressed concern that the combined effect of broad congressional delegations, the uncertain boundary between legislative and interpretive rules, and Seminole Rock deference has led to aggrandizement of agency power.24
Although he did not dismiss these concerns, he concluded that Paralyzed Veterans is not a viable cure.25 He noted that the opinions of Justice Scalia and Justice Thomas offer substantial reasons why the Seminole Rock doctrine may be incorrect. He awaits a case in which the validity of Seminole Rock may be explored through full briefing and argument.26
Justice Scalia agreed with the Court's decision and its demonstration that Paralyzed Veterans is incompatible with the APA.27 He did not agree, however, with the portrayal of the result as vindicating the balance Congress struck in the APA.28 In his view, the exemption for interpretive rules has been transformed by Chevron and Auer deference into a regime in which agencies may bind the public without notice and comment.29
He argued that the original design of the APA contemplated that courts, not agencies, would authoritatively resolve ambiguities.30 He advocated abandoning Auer deference so that agencies may interpret their regulations with or without notice and comment, but courts will decide the correct meaning without deference to the agency.31
Justice Thomas concurred in the holding that Paralyzed Veterans is inconsistent with the APA.32 He wrote separately to question the legitimacy of Seminole Rock deference on constitutional grounds.33 He argued that the doctrine effects a transfer of judicial power to the executive branch and undermines the judicial obligation to serve as a check on the political branches.34
Using the facts of this case as an illustration, he noted that regulated parties may be subjected to opposite legal rules under the same regulation when courts give controlling weight to successive agency interpretations.35 He concluded that the entire line of Seminole Rock precedent raises serious constitutional questions and should be reconsidered in an appropriate case.36