The United States Supreme Court (SCOTUS) returned last week to open several new lines of inquiry that impact regulatory practice, but has not yet decided whether the hear the case of the year. At the trial level, a district court invalidated narrow regulations applicable to attorneys practicing law in one federalized realm. The Department of Transportation (DOT) took the most significant regulatory action of last week in forwarding one of the potentially complicated regulations for executive and interagency review. And sadly, a key docket website has become predominantly unavailability without explanation.
SCOTUS Returns: SCOTUS returned to the bench last week, but did not indicate whether it would hear the Solicitor General’s petition in United States v. Texas, the procedural tinder that too many wrongly believe revolves on the substance of the President of the United States (POTUS)’s immigration policy. SCOTUS could announce its decision on whether to grant certiorari in orders released within hours, but its order in another case deserves introduction.
SCOTUS granted certiorari, setting in motion briefing and oral argument, of yet another Fair Labor Standards Act (FLSA) issue in granting Encino Motorcars LLC v. Navarro, this time focusing on whether car dealership “service advisors” are exempt from the FLSA’s overtime-pay requirements. The United States Court of Appeals for the Ninth Circuit concluded that the FLSA exemption was ambiguous and that DOL made a permissible choice that service advisors do not fall within the FLSA exemption for “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” – admitting that its result contradicted decisions of the Fourth Circuit and Fifth Circuit.
► The case may be important for non-obvious reasons. The petition for certiorari, filed by a former Solicitor General, abrades the Department of Labor (DOL)’s shifting position, which is problematic enough. Another troubling aspect lies in the lack of significant external change between Congressional enactment of the relevant statutory provision in 1974 and DOL’s adoption or declination of regulatory amendments in 2011. DOL declined adoption of the Fourth Circuit’s position, but that appears to be only substantive issue, and the non-acquiescence appears to beg for the Ninth Circuit decision.
DOL apparently did not participate in the proceedings below (which it statutorily may) and SCOTUS did not call for the views of the Solicitor General (CVSG) – i.e. a request for a brief stating the views of the United States, not some lesser agency (e.g. DOL). We know not whether now SCOTUS will invite the views of the United States or the United States will seek to be heard on a substantial question with horrendous potential implications. A curious case worth watching.
Finally, having followed SCOTUS for over four decades, another tip of the hat to SCOTUSblog and its usual case page cited above. What once was a daily hike to the Clerks’ office to acquire limited and reserved paper copies of anything SCOTUS, is now available to everyone everywhere at the touch of a button. Perhaps SCOTUS will someday make SCOTUSblog technically obsolete, but that’s doubtful.
Law Practice & Mortgage Relief Regulation: In a complex decision likely to be interesting only to attorneys, the United States District Court for the Western District of Wisconsin held, in CFPB v. Mortgage Law Group LLP, that the Consumer Financial Protection Bureau (CFPB) exceeded its statutory authority in repromulgating regulations that require attorneys to comply with State attorney licensing laws. The regulations adopted by the CFPB were in large part transferred from the Federal Trade Commission (FTC), included statutory changes, and minor amendments as a result of three different Acts of Congress. The court’s decision and partial invalidation follows the tenets that courts should defer to an agency interpretation of its ambiguous jurisdiction but equally followed SCOTUS’s commands that an agency must operate within the bounds of reasonable interpretation, accounting for both the specific context and the context of the statute as a whole. Here the CFPB survived neither statutory interpretation scrutiny, nor did it explain why the problem it attempts to correct created authority in it to require attorney compliance with State attorney discipline requirements. The court held invalid limited regulations in a larger context, but the ruling does not resolve the entire case.
► The decision presents a narrow, multi-agency, multi-statute, multi-jurisdiction (federal and state) issue that can arise rarely, and the court decided no more. Indeed, defendants in the enforcement action failed to sufficiently maintain a number of arguments through to summary judgment. Further briefing will help clarify the decision as the court declined to determine remedy – either severability of the parts of the regulations. Invalidation here results in vacatur, but vacatur of how much requires more briefing.
Additionally, the CFPB repromulgated the regulation through an interim final rule (IFR) on finding good cause existed under the Administrative Procedure Act (APA) to bypass advance notice and an opportunity for public comment before promulgation. CFPB found that advance public comment was “unnecessary” and “contrary to the public interest.” CFPB’s belief that the transfer of authority, statutory mandated changes, and a lack of substantive change were sufficient is belied by a dynamic failure of authority to regulate, a shallow and highly biased view that the end justified the means.
V2V Communications: DOT submitted to long-awaited National Highway Traffic Safety Administration (NHTSA) Federal Motor Vehicle Safety Standard (FMVSS) 150 – Vehicle to Vehicle (V2V) Communication proposed rule to the Office of Management and Budget (OMB) on January 12. As is typical at this junction, the public is provided little information, but DOT’s Unified Agenda of Regulatory and Deregulatory Actions illuminates the potential of the rulemaking. V2V communication can permit vehicles to utilize each other’s information to avoid collisions and is a necessary preliminary to autonomous vehicle movement on public infrastructure highways. NHTSA published an advance notice of proposed rulemaking in August 2014, Not surprisingly, DOT notes that the proposed rule is economically significant and the long-term development of the rule is likely to include a significant interagency and executive review because of the substantial interests of other agencies.
► V2V communication and its progeny could far outstrip in complexity and impact any other DOT regulation, including the regulation of the National Airspace System (NAS) – both in its automated management and the introduction of small unmanned aircraft systems (sUAS or drones). Many in the industry have taken the potential of this regulation seriously and the next step for proposed standards could advance or slow the process considerably. Do not be surprised if both the industry and DOT tread very carefully through several generations of proposals.
No Reginfo: Over months, the OMB docket website, Reginfo.gov, has suffered a number of outages – or at least unavailabilities – noticeable to this blog and other journalists. Repeated inquiries have resulted in minimal response from the General Services Administration (GSA) regulatory information center that maintains the website. Accordingly, information on the Administration’s regulatory activities and unified agenda have not been, including the past week, accessible.
► An Administration that supposedly prides itself on transparence here again has failed to be transparent – either in the difficulties suffered by its docket website or in communicating with the public when failures have been raised. A public response is now due from OMB and GSA.