Mortgage Bankers Association v. Seth Harris, 720 F.3d 966

MBA (Mortgage Bankers Association) represents mortgage lenders whose loan officers’ overtime-exemption status under the FLSA is at issue.
DOL issued a 2006 opinion letter saying typical mortgage loan officers qualified for the administrative exemption; in 2010 DOL issued an Administrator’s Interpretation withdrawing the 2006 view and concluding such officers did not qualify.
MBA sued under the APA, arguing DOL unlawfully changed a definitive agency interpretation without notice-and-comment rulemaking, invoking Paralyzed Veterans/Alaska Hunters doctrine.
The district court upheld DOL, reading MetWest to require plaintiffs to show "substantial and justifiable reliance" comparable to Alaska Hunters; it denied MBA’s summary judgment motion.
On appeal the government conceded that if reliance is treated only as a factor within definitiveness (not a separate element), MBA prevails; the D.C. Circuit accordingly reversed and remanded to vacate the 2010 Interpretation.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a separate, independent reliance element is required to apply Paralyzed Veterans/Alaska Hunters (i.e., must plaintiffs show substantial and justifiable reliance beyond definitiveness)	MBA: No — reliance is one factor within the definitiveness inquiry, not a standalone requirement	DOL: Yes — MetWest and related cases created a third required element of substantial and justified reliance	Court: Reliance is not a separate element; it is one factor courts may weigh when determining whether an interpretation is definitive
Whether DOL’s 2010 Administrator’s Interpretation could be adopted without notice-and-comment rulemaking	MBA: The 2010 Interpretation materially revised a previously definitive 2006 interpretation and thus required notice-and-comment	DOL: The change was permissible without notice-and-comment because plaintiff failed to show required reliance or a definitive prior interpretation	Court: Because the government conceded that treating reliance only as part of definitiveness would be dispositive, the court reversed and instructed the district court to vacate the 2010 Interpretation; if DOL wishes to readopt it, it must use notice-and-comment rulemaking

Paralyzed Veterans of Am. v. D.C. Arena L.P., 117 F.3d 579 (D.C. Cir.) (establishes that a definitive agency interpretation cannot be significantly revised without notice-and-comment)
Alaska Prof’l Hunters Ass’n v. FAA, 177 F.3d 1030 (D.C. Cir. 1999) (local office’s longstanding, uniform, uncontradicted interpretation can become authoritative and trigger notice-and-comment requirement when changed)
MetWest Inc. v. Sec’y of Labor, 560 F.3d 506 (D.C. Cir. 2009) (discussed role of reliance; government read it to require substantial and justifiable reliance)
Honeywell Int’l, Inc. v. NRC, 628 F.3d 568 (D.C. Cir. 2010) (adopts MetWest’s language on reliance)
Ass’n of Am. R.R. v. DOT, 198 F.3d 944 (D.C. Cir. 1999) (analyzed definitiveness and reliance; found lack of definitive interpretation)
Envtl. Integrity Project v. EPA, 425 F.3d 992 (D.C. Cir. 2005) (applies Paralyzed Veterans framework to agency reinterpretation)