Independent Training & Apprenticeship Program v. California Department of Industrial Relations
2013 U.S. App. LEXIS 19255
| 9th Cir. | 2013Background
- I-TAP is a DOL-registered apprenticeship program for "Federal purposes" but not recognized under California law; California requires state registration for apprentices to qualify for prevailing-wage apprenticeship benefits.
- California’s Division of Apprenticeship Standards (CDIR) derecognized by DOL in 2007 after California adopted a restrictive "needs test" limiting new program approvals; DOL thereafter registered I-TAP for federal purposes.
- Three California public-works projects used I-TAP apprentices: one funded with tax-exempt municipal bonds and two funded in part with Build America Bonds; CDIR asserted these projects were not for "Federal purposes" and threatened/enforced penalties under state law.
- Plaintiffs sued seeking declaratory and injunctive relief, arguing federal apprenticeship regulations preempt California’s enforcement and that CDIR’s actions violated other constitutional provisions; district court denied relief and the case was appealed and consolidated with merits.
- Central legal question: the meaning of "Federal purposes" in 29 C.F.R. § 29.2; DOL had two 2004 opinion letters taking a broad view (any federal funding/support), but withdrew them and advanced a narrower interpretation during the appeal.
- The Ninth Circuit declined to grant Auer deference to the DOL’s new interpretation because the agency reversed a long-standing position, but nevertheless adopted the DOL’s narrower interpretation under Skidmore as the most persuasive construction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the projects’ funding make them "Federal purposes" under 29 C.F.R. § 29.2 (preemption question)? | Broad reading: any federal funding/support makes a project a Federal purpose (2004 DOL letters). | Narrow reading: only federal contracts/assistance conditioned on conformity with federal apprenticeship standards (e.g., Davis-Bacon) qualify. | Held: Projects were not "Federal purposes"; the DOL’s narrow, condition-based interpretation controls. |
| Is the DOL’s new interpretation entitled to Auer deference? | Plaintiffs: No — DOL’s reversal and late change defeat Auer deference. | Defendants/DOL: Yes — agency interpretation of ambiguous regulation should be controlling. | Held: No Auer deference due to inconsistency and unfair-surprise concerns; court evaluates under Skidmore instead. |
| If not Auer-deferable, is the DOL’s interpretation persuasive under Skidmore? | Plaintiffs: Prior DOL view more persuasive and relied upon. | Defendants/DOL: New interpretation better accords with text and regulatory history. | Held: DOL’s new interpretation is most persuasive and adopted under Skidmore. |
| Are California’s apprenticeship rules (needs test) unconstitutional (dormant Commerce Clause, Equal Protection, Due Process)? | Plaintiffs: Needs test burdens interstate commerce and is not rationally related to state interests. | Defendants: Needs test is nondiscriminatory and rationally related to legitimate local interests. | Held: Plaintiffs’ constitutional challenges fail; needs test is nondiscriminatory and satisfies rational-basis review. |
Key Cases Cited
- Auer v. Robbins, 519 U.S. 452 (agency deference to interpretation of own regulation)
- Christopher v. SmithKline Beecham Corp., 567 U.S. 142 (2012) (limits on Auer where fair warning and reliance concerns exist)
- Skidmore v. Swift & Co., 323 U.S. 134 (1944) (weight of persuasive agency interpretation)
- United States v. Mead Corp., 533 U.S. 218 (2001) (framework for deference to agency interpretations)
- Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (1983) (federal-question jurisdiction for preemption claims seeking injunctions)
- eBay Inc. v. MercExch., LLC, 547 U.S. 388 (2006) (standard for permanent injunction)