Perez v. Mortgage Bankers Ass’n
Citation: 575 U.S. 92 (2015)
Facts
The Department of Labor issued successive opinion letters on whether mortgage loan officers were exempt from overtime requirements under the Fair Labor Standards Act, reversing a prior position without notice-and-comment rulemaking. The D.C. Circuit held that an agency must use notice-and-comment procedures to significantly change an interpretive rule.
Issue
Must an agency use notice-and-comment rulemaking to amend or repeal a prior interpretive rule?
Holding
No. The APA’s notice-and-comment requirements do not apply to interpretive rules. Agencies may change their interpretive positions without notice and comment, even when a prior interpretive rule was issued without notice and comment.
Rule
Interpretive rules are exempt from notice-and-comment: Under APA § 553(b)(A), interpretive rules (as opposed to legislative rules) are exempt from notice-and-comment requirements. An agency may revise interpretive guidance without public participation. The D.C. Circuit’s “Paralyzed Veterans doctrine” — which required notice and comment to amend an interpretive rule — was abrogated.
Significance
- Eliminated the D.C. Circuit’s Paralyzed Veterans doctrine
- Preserves agency flexibility to issue and revise interpretive guidance
- Justice Alito concurred, questioning Auer deference — agencies’ interpretations of their own rules — setting up the eventual narrowing of Auer in Kisor v. Wilkie (2019)
- Clarifies the interpretive rule / legislative rule distinction’s procedural consequences