Data Marketing Partnership v. LABR, 45 F.4th 846

Plaintiffs Data Marketing Partnership and its general partner LP Management asked the DOL for an advisory opinion whether a proposed health plan for limited partners qualified as an ERISA "employee welfare benefit plan."
The requested opinion described limited partners who (a) joined by joinder agreement, (b) received partnership interests and distributions reported as guaranteed payments, and (c) performed services via installed software that gathered and sold consumer data.
The DOL issued a six‑page advisory opinion concluding the plan was not covered by ERISA, finding the limited partners were neither "working owners" nor "bona fide partners," and characterizing the structure as a sham to avoid state insurance law.
Plaintiffs sued, the district court granted summary judgment, held the advisory opinion was final agency action and arbitrary and capricious, vacated the opinion, and entered a permanent injunction directing the DOL to recognize ERISA status and the limited partners as working owners.
The DOL appealed. The Fifth Circuit (Oldham, J.) affirmed vacatur (agency action unlawful and set aside), held the advisory opinion was final agency action, and vacated/remanded the district court’s injunction for further proceedings.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the DOL advisory opinion is reviewable final agency action	Yes — advisory opinions consummate agency decisionmaking, can be relied upon, and withdraw agency discretion	No — advisory opinions are changeable and thus not final	Final: advisory opinion is final agency action (two Bennett factors satisfied)
Whether the advisory opinion was arbitrary and capricious	Yes — DOL ignored its prior advisory opinions and a regulation defining "working owner," and failed to reasonably explain the departure	No — DOL acted reasonably given facts and could distinguish prior materials (post‑hoc defenses)	Arbitrary and capricious: DOL failed to reasonably consider/justify departure; vacatur affirmed
Proper interpretation/application of "working owner" under Yates	Limited partners are working owners under DOL prior guidance and Yates framework	Limited partners lack hallmarks of employment; therefore not working owners	Remanded: district court must apply Yates factors to these specific facts in first instance
Proper interpretation/application of "bona fide partner" (29 C.F.R. § 2590.732(d)(2))	Limited partners have a more‑than‑pretextual relationship and meet the lesser threshold	Limited partners lack sufficient financial stake/management participation to qualify	Remanded: district court must apply a totality‑of‑the‑circumstances analysis and consider Auer deference issues

Raymond B. Yates, M.D., P.C. Profit Sharing Plan v. Hendon, 541 U.S. 1 (2004) (working owners can qualify as ERISA participants; framework for analysis)
Sackett v. EPA, 566 U.S. 120 (2012) (agency action is final when not subject to further agency review)
U.S. Army Corps of Eng'rs v. Hawkes Co., 578 U.S. 590 (2016) (pragmatic finality inquiry; possibility of future revision does not defeat finality)
FCC v. Prometheus Radio Project, 141 S. Ct. 1150 (2021) (arbitrary‑and‑capricious review requires reasonable, reasonably explained agency action)
Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (standard for arbitrary and capricious review)
Encino Motorcars, LLC v. Navarro, 579 U.S. 211 (2016) (unexplained inconsistency with prior practice renders action arbitrary)
Dep't of Homeland Sec. v. Regents of the Univ. of Cal., 140 S. Ct. 1891 (2020) (agency must defend actions on contemporaneous reasons; post‑hoc rationalizations impermissible)
Texas v. EEOC, 933 F.3d 433 (5th Cir. 2019) (agency withdrawal of discretion supports finality)