The Supreme Court may consider anew whether courts should defer to an agency’s interpretation of its regulations in friend of the court (amicus curiae) briefs. The Labor Department’s (DOL) interpretation of Fair Labor Standards Act’s (FLSA) “outside sales exemption” from overtime pay, and related regulations, is the focus of Christopher v. SmithKline Beecham. DOL’s interpretation has appeared only in amicus curiae briefs in the courts of appeals – DOL was not a party.
Christopher may revisit the problematic case of Auer v. Robbins, another FLSA case that permits DOL to control business wage and hour practices with only a legal brief. In both cases, DOL interpreted the FLSA and regulations without adjudication or rulemaking under the Administrative Procedure Act (APA) and Executive Branch coordination.
Background: The United States Court of Appeals for the Second Circuit deferred to the DOL’s amicus-brief interpretation that pharmaceutical sales representatives (PSRs), sometimes called “detailers,” were covered by the FLSA (and due overtime) in In re Novartis Wage & Hour Litigation. The Ninth Circuit, however, declined to defer to the DOL’s position in Christopher, acknowledging its disagreement with the Second Circuit, not only on the underlying issue of applying the exemption to PSRs / detailers, but also on the issue of deference owed to the DOL’s amicus-brief interpretation of its regulations.
Christopher could be resolved on statutory or regulatory interpretation grounds. The last ground – the amicus brief – is the administrative law issue that needs attention.
The Structural Issue: Congress regularly delegates authority to agencies to “fill in the blanks” and apply expertise to resolve ambiguities. Courts apply Chevron deference to the agency decision when the agency makes policy decisions in regulations. Regulations having binding future effect are subject to public notice and comment, whereas adjudications are subject to further challenge. (The Court may stop here if it believes the regulations resolve Christopher. A complicating factor is whether the agency “parrot[s]” (the Court’s word) or regurgitates (my word) the text of the statute – which adds no expertise and is owed no deference under Gonzales v. Oregon).
When an agency interprets its own regulations in a formal proceeding, courts tend to defer completely. But when the agency interprets the underlying statute and its regulations only in an amicus brief in otherwise private litigation, the court must consider the extent of that assistance.
The Issue of Our Discontent: In Auer, Justice Scalia opined that “There is simply no reason to suspect that the interpretation does not reflect the agency’s fair and considered judgment on the matter in question.” Justice Scalia has since suggested that he has “become increasingly doubtful of [Auer’s] validity” in a concurring opinion in Talk America.
Beyond the narrow application to PSRs / detailers and DOL, Christopher raises important transparency and substantive issues. If an agency can enunciate a policy position with some binding force in litigation in which it appears only as a friend of the court, when can that interpretation be directly challenged? Amicus briefs are not published in any formal way (certainly not in the Federal Register), and, therefore, the public generally has no means of finding and relying upon them.
In some cases, like Talk America or Chase Bank, the agency position is more embedded because it is taken by the Solicitor General on behalf of the United States (with the Justice Department’s dispassion and discipline, and sometimes multi-agency input) to the Supreme Court. But what about Christopher and like cases where the position appears only in occasional lower court cases and has no imprimatur of the United States at all? If the position is only that of the agency, what is to prevent the agency from simply changing its mind and leaving it to litigators to try to catch it? The Court has not requested the views of the United States in Christopher.
Christopher / Novartis amicus briefs involve none of the formality and transparency of a final agency action under the APA, or even an embedded Solicitor General’s position before the Court.
Auer permits too much reliance on the consistency of the agency and the presumption that such informal filings without constructive notice are sufficiently vetted and final. If the Court reaches the issue, Auer should be jettisoned in favor of considering amicus briefs only for their persuasiveness or narrowed to cases presented to the Court.
Briefing and Argument to Come: Tom Goldstein recently filed the brief for petitioner (the rules govern, but yes, the courts should defer). Paul Clement is expected to file respondent’s brief by the end of March (presumably no, courts should not defer – which is probably a different position than he would have taken as Solicitor General). Christopher is scheduled for argument on April 16 and a decision should be issued by the end of June.
The usual hat tip to Tom Goldstein, Goldstein & Russell, and SCOTUSblog, the source of information on cases before the Supreme Court, with the caveat that they represent the petitioners in Christopher.
UPDATE: February 7, 2012: Shortly after I posted this item, the Solicitor General filed an amicus brief supporting the petitioner in Christopher. While that action gives greater finality to the DOL position, it leaves open whether Auer should be applied by lower courts to agency-generated amicus briefs.