New Day Personal Care Services Inc v. Su
6:25-cv-00075
W.D. La.Jul 28, 2025Background
- New Day Personal Care Services, a third-party home-care agency, was investigated by the DOL Wage and Hour Division and received a WH-56 summary assessing $923,960.40 in back wages under the 2013 DOL rule extending FLSA overtime/minimum-wage coverage to many domestic-service workers.
- New Day pays home-care providers as independent contractors (1099) and alleges it cannot afford time-and-a-half overtime under Medicaid/Medicare reimbursement limits.
- New Day sued the Secretary of Labor and WHD Deputy Administrator seeking to set aside (1) the 2013 Rule and (2) the WH-56 assessment, and alternatively to declare 29 U.S.C. § 207(l) unconstitutional; claims included APA, ultra vires, and declaratory relief.
- Defendants moved to dismiss for lack of jurisdiction (standing, sovereign immunity, lack of final agency action) and for failure to state a claim (timeliness of APA challenge; propriety of declaratory relief).
- The magistrate judge recommended dismissal in part: all claims were dismissed except New Day’s APA challenge to the 2013 Rule; the court found (1) no jurisdiction to review the WH-56 because it is not final agency action, (2) New Day has standing and a ripe APA claim to challenge the 2013 Rule pre-enforcement, and (3) ultra vires and declaratory-judgment counts were duplicative and should be dismissed.
- The opinion notes the DOL published a proposed 2025 rule to restore the 1975 exemptions, which could moot the case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing / Ripeness to challenge 2013 Rule pre-enforcement | DOL investigation, WH-56, and threat of enforcement create imminent injury and risk of additional penalties, so claim is ripe and plaintiff has Article III injury | No final enforcement or payment order yet; must await final agency action before APA suit | Held: Plaintiff has standing; pre-enforcement review of the 2013 Rule is permitted because the WH-56 and related contacts create a sufficient imminent injury and risk of penalties |
| WH-56 as final agency action (jurisdiction over assessment) | WH-56 imposed concrete legal consequences and threatened penalties | WH-56 is investigative/settlement-level and not a final agency action subject to APA review | Held: WH-56 is not final agency action; Court lacks jurisdiction to review or set it aside now |
| Timeliness / statute of limitations for APA challenge to 2013 Rule | The rule’s six-year limitations did not begin to run until the rule was enforced against New Day (Corner Post); suit filed within six years of injury | Promulgation of the 2013 Rule was final action long ago; plaintiff could have sued earlier | Held: Claim is not time-barred under Corner Post; statute of limitations accrues when the particular plaintiff is injured by final agency action |
| Ultra vires / declaratory relief / Commerce Clause challenge | 2013 Rule exceeds DOL authority; §207(l) exceeds Article I powers | Rule is within DOL/Congressional authority; commerce connection exists | Held: Ultra vires and declaratory-counts dismissed as duplicative of APA claim; Commerce Clause challenge rejected and Count III dismissed |
Key Cases Cited
- Ramming v. United States, 281 F.3d 158 (5th Cir.) (standards for Rule 12(b)(1) jurisdictional review)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (constitutional standing requirements)
- Corner Post, Inc. v. Bd. of Governors of Fed. Rsrv. Sys., 603 U.S. 799 (2024) (APA limitations accrue when particular plaintiff is injured by final agency action)
- Bennett v. Spear, 520 U.S. 154 (final agency action test under the APA)
- FTC v. Standard Oil Co., 449 U.S. 232 (investigative steps and initiation of proceedings not final agency action)
- Abbott Laboratories v. Gardner, 387 U.S. 136 (pre-enforcement review doctrine)
- Hawkes Co. v. U.S. Army Corps of Eng’rs, 578 U.S. 590 (ripeness for pre-enforcement challenge when enforcement carries substantial penalties)
- United States v. Lopez, 514 U.S. 549 (limits of Commerce Clause authority)
- Peoples Nat’l Bank v. Office of the Comptroller of the Currency, 362 F.3d 333 (final agency action as jurisdictional threshold)
- Veldhoen v. U.S. Coast Guard, 35 F.3d 222 (agency investigations do not constitute final agency action)
- Iqbal v. Ashcroft, 556 U.S. 662 (federal pleading standard)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (plausibility pleading standard)