Perez v. Mortgage Bankers Assn.
135 S. Ct. 1199
| SCOTUS | 2015Background
- Dispute over whether Paralyzed Veterans of America v. D.C. Arena L.P. (Paralyzed Veterans) requiring notice-and-comment for major interpretive- rule revisions is compatible with the Administrative Procedure Act (APA).
- The Wage and Hour Division previously concluded mortgage-loan officers were not within the FLSA administrative exemption (1999/2001 letters).
- In 2004 regulations, a new financial services example allowed an agency to exempt certain employees, with a caveat for primary duties in selling financial products.
- In 2006 the Department issued an interpretation finding mortgage-loan officers within the administrative exemption; in 2010 it withdrew that position and issued an Administrator’s Interpretation finding they do not qualify.
- The 2010 interpretation was issued without notice or opportunity for comment and MBA challenged it as procedurally invalid under Paralyzed Veterans.
- The D.C. Circuit applied Paralyzed Veterans and vacated the 2010 interpretation; the Supreme Court granted certiorari.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is Paralyzed Veterans compatible with the APA? | MBA: doctrine valid under APA to require notice. | Perez: doctrine impermissible; APA provides maximum procedures. | Paralyzed Veterans is contrary to the APA. |
| Do interpretive rules fall outside notice-and-comment requirements? | MBA: interpretive rules can effectively amend regulations. | Agency interpretations are exempt from notice-and-comment. | Interpretive rules are exempt; Paralyzed Veterans cannot impose notice. |
| May an agency revise its interpretation of a regulation without notice and comment? | MBA: revisions require notice if significantly altering prior interpretation. | Congress chose flexible procedures; no automatic notice for revisions. | Agency may revise interpretive rules without notice; no Paralyzed Veterans constraint. |
| Does the case resolve the scope of Seminole Rock/Auer deference? | MBA relies on agency interpretations with deference to bind regulated parties. | Textual exemption for interpretive rules limits deference; judiciary retains interpretive authority. | Court rejects expansive deference to agency interpretations of its own regulations. |
Key Cases Cited
- Paralyzed Veterans of America v. D.C. Arena L.P., 117 F.3d 579 (D.C. Cir. 1997) (establishes Paralyzed Veterans notice-and-comment requirement)
- Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., 435 U.S. 519 (U.S. 1978) (agency rulemaking is subject to judicial review and procedural limits)
- FCC v. Fox Television Stations, Inc., 556 U.S. 502 (U.S. 2009) (APA review governs procedural correctness of agency action)
- Chrysler Corp. v. Brown, 441 U.S. 281 (U.S. 1979) (legislative rules have the force of law; interpretive rules do not)
- Shalala v. Guernsey Memorial Hospital, 514 U.S. 87 (U.S. 1995) (definition and scope of interpretive rules)
- Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (U.S. 1945) (Seminole Rock deference to agency interpretations of regulations)
- Mead Corp. v. United States, 533 U.S. 218 (U.S. 2001) (corresponding discussions on deference and interpretive rules)
- Christensen v. Harris County, 529 U.S. 576 (U.S. 2000) (limits on agency deference for interpretations of unambiguous regulations)
- Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158 (U.S. 2007) (limitations on post-promulgation interpretations)