Perez v. Mortgage Bankers Association

135 S.Ct. 1199 (2015)

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Nature of the Case

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Facts

The United States Court of Appeals for the District of Columbia Circuit has held, in a line of cases beginning with Paralyzed Veterans of Am. that an agency must use the APA’s notice-and-comment procedures when it wishes to issue a new interpretation of a regulation that deviates significantly from one the agency has previously adopted. Under the Fair Labor Standards Act (FLSA), certain classes of employees such as those employed in a bona fide executive, administrative, or professional capacity or the capacity of outside salesman are exempt. In 1999 and again in 2001, D issued letters opining that mortgage-loan officers do not qualify for the administrative exemption. Thus, the FLSA’s minimum wage and maximum hour requirements applied to mortgage-loan officers. In 2004, P requested a new opinion interpreting the revised regulations. In 2006, D issued an opinion letter finding that mortgage-loan officers fell within the administrative exemption under the 2004 regulations. In 2010, D again changes its interpretation. D withdrew its 2006 opinion letter. These interpretations were issued without notice or an opportunity for comment. P sued claiming D violated the Paralyzed Veterans doctrine in that D did not follow notice and comment procedures. Three former mortgage-loan officers-Beverly Buck, Ryan Henry, and Jerome Nickols-subsequently intervened in the case to defend D’s Interpretation. The District Court granted summary judgment to D. It determined that the Paralyzed Veterans doctrine was inapplicable because P had failed to establish its reliance on the contrary interpretation expressed in the D’s 2006 opinion letter. D’s Interpretation, the District Court further determined, was fully supported by the text of the 2004 FLSA regulations. The D. C. Circuit reversed. The Court of Appeals rejected the Government’s call to abandon the doctrine. The Supreme Court granted certiorari.