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4th Circuit Reinforces APA Requirements in Rejecting Alien Worker Wage Appeal

Posted in Judicial Review & Remedies, Regulatory Process

The United States Court of Appeals for the Fourth Circuit turned aside workers attempts to collect back wages from a time while the Obama Administration Department of Labor (DOL) had attempted to “suspend” a Bush Administration rule through a deficient Administrative Procedure Act (APA) notice and comment process.  North Carolina Growers Ass’n v. United Farm Workers holds that DOL:

  • could not reinstate a prior rule after a new rule had become effective by “suspending” the new rule without notice and comment rulemaking;
  • did not properly invoke any of the “good cause” exceptions to the APA’s notice and comment requirements
  • improperly limited the “content” of public comments in its rulemaking; and
  • improperly imposed a 10-day comment period.

DOL and co-defendant-below Department of Homeland Security (DHS) do not appear to have been parties to the wage recovery appeal, but all agencies must learn the lessons of this important “Administration transition” decision.

Short History:  After a 1986 Congressional enactment, DOL promulgated rules in of 1987 establishing that agricultural employers pay alien (H-2A visa under the Immigration and Nationality Act or INA) workers and similarly situated U.S. workers a wage rate calculated by an “adverse effect wage rate” (AEWR) formula.  In 2008, the Bush Administration DOL modified the AEWR through notice and comment rulemaking; the final rule, published in December 2008, became effective January 17, 2009 – three days before the inauguration of the Obama Administration.  The 2008 regulation also classified Christmas tree workers as agricultural for both H-2A and Fair Labor Standards Act (FLSA) purposes.

In March 2009, the Obama Administration DOL published a “notice of proposed suspension” of the 2008 regulations in light of articulated intervening issues (mostly administrative efficacy).  Beyond “suspension,” the source of much difficulty lies in DOL’s invitation to comment:

Please provide written comments only on whether the [DOL] should suspend the [2008 regulations] for further review and consideration of the issues that have arisen since [their] publication.  Comments concerning the substance or merits of the [2008 regulations] or the [1987 regulations] will not be considered.

The growers sued, and the United States District Court for the Middle District of North Carolina enjoined the 2009 “suspension rule.”  DOL proposed additional regulations in September 2009 under regular APA notice and comment procedures, and largely accomplished the same result (reinstating the 1987 rule) with a final rule in February 2010.  The 2010 rule is not at issue here, but the workers’ wages (higher under the 1987 rule; lower under the 2008 rule) from January 2009 through September 2010 remained in contention – the issue here (by intervention and certification of a class action).  Thus, the farm workers were defending the efficacy of DOL’s 2009 actions.

The court of appeals decided four issues:

Suspension:  A rule becomes effective on its effective date, and the previous rule passes into history.  As the court summarized:

When the 2008 regulations took effect on January 17, 2009, they superseded the 1987 regulations for all purposes relevant to this appeal.  As a result, the 1987 regulations ceased to have any legal effect, and their reinstatement would have put in place a set of regulations that were new and different “formulations” from the 2008 regulations.

A policy “formulation” is a “rule” under the APA and, therefore, DOL could not “suspend” an effective rule without the full rulemaking process.  The effective date (once crossed) is a legal Rubicon, rather than a technical one, and not a crossing that can be reversed by suspension (or technical correction, either).

Invoking Good Cause:  The farm workers attempted the “so what” argument that DOL had invoked a “good cause” exception for not completing the APA’s notice and comment procedures before “suspending” the 2008 rule and “reinstating” the 1987 rule.  Unfortunately for the farm workers, DOL not only did not follow the APA requirement that it incorporate such a finding and a brief statement of reasons in the rulemaking, but the court took the traditional position that such exceptions must be narrowly construed and closely examined.  Nor could the court find a basis for “implying” a good cause exception to DOL.

Content:  The District Court also found that DOL’s substantive content restrictions on notice and comment violated also the APA.  The 4th Circuit agreed that the restrictive language clearly indicated that DOL would not (and did not) consider the “relevant matter presented:”

By the very terms of the 2009 Notice, [DOL] stated that it would not receive or consider comments that were not only “relevant and important,” but were integral to the proposed agency action and the conditions that such action sought to alleviate.  In the 2009 Notice, [DOL] stated that it proposed to suspend the 2008 regulations and reinstate the 1987 regulations, because of difficulties in operating the H-2A program under the 2008 regulations, including a lack of resources, inability to implement operations, and processing delays.  ….  These reasons for the 2009 Suspension were significant, substantive matters, which raised questions whether the review process provided  in the 2008 regulations was more or less efficient than the review process provided in the 1987 regulations.

We therefore agree with the district court that, as a result of [DOL]’s content restriction, [DOL] refused to receive comments on and to consider or explain “relevant and significant issues.”  ….  Moreover, the content restriction was so severe in scope, by preventing any discussion of the “substance or merits” of either set of regulations, that the opportunity for comment cannot be said to have been “a meaningful opportunity.”

An agency may not be required to respond in a final rule to irrelevant comments filed on a proposed rule, but an agency may not limit the scope of comments on its proposed rule in advance.  The restriction here obviously overreached, but agencies should be wary of lesser limitations lest private litigants and a court disagree.

Reasonable Time to Comment:  Finally, the shortness of time for the public reinforced the unreasonableness of the proposal:

Our conclusion that the [DOL] did not provide a meaningful opportunity for comment further is supported by the exceedingly short duration of the comment period.  Although the APA has not prescribed a minimum number of days necessary to allow for adequate comment, based on the important interests underlying these requirements, … the instances actually warranting a 10-day comment period will be rare.

DOL did not justify the shortness of time for public comments and past cases could not support such a short time.  The presumptively reasonable time is now enshrined in Executive Order 13,563 as now 60 days.  “Good cause” exceptions may shorten that time (or permit post-promulgation comments) but a short public comment period must be justified.

Old Lessons:  The structure of these four issues may be somewhat unusual, but the court’s decision affirms what a seasoned hand would reasonably apply under the APA:  a rule must amend a rule and comments on a proposed rule must be accepted for a reasonable time, without content restrictions.  Every new Administration grapples with problems (and dislikes) from the last decisions of the old Administration), but the court here reaffirmed that no shortcuts are allowed.