IPMA-HR joined with several other state and local government associations in filing an amicus curiae brief in the case of Perez v. Mortgage Bankers Association, which will be decided by the United States Supreme Court. The case raises the issue as to whether a federal agency must engage in notice-and-comment rulemaking pursuant to the Administrative Procedure Act (APA) before it can significantly alter an interpretive rule that interprets an agency regulation. The amicus brief agrees with the lower court that significant changes to an interpretation of a regulation amount to effectively changing the regulation, which requires notice-and-comment.
In 2006, the Department of Labor (DOL) issued an opinion letter stating that mortgage loan officers who work more than 40 hours a week were exempt from overtime under the Fair Labor Standards Act (FLSA). In 2010, DOL withdrew the opinion letter in an “Administrator’s Interpretation” that reached the opposite conclusion. Since 1997, the D.C. Circuit’s rule has been that if an interpretive rule is definitive and an agency makes a significant change to it, the agency must first conduct notice-and-comment rulemaking.
State and local governments often regulate in the same space as federal agencies and are often regulated by federal agencies. The brief argues that requiring notice-and-comment for significant changes to interpretations of regulations will maintain the balance between agency discretion and reliance interests the Administrative Procedure Act (APA) was designed to protect. It also argues that allowing state and local governments to weigh in on problematic interpretations is far more efficient than state and local governments challenging them through litigation. And allowing greater state and local participation in the process will avoid or at least limit the risk to federalism posed by ever-expanding agency authority.
The organizations that participated in the amicus brief in addition to IPMA-HR are the: National League of Cities, National Association of Counties, International City/County Management Association, United States Conference of Mayors, International Municipal Lawyers Association, Government Finance Officers Association, National School Boards Association, and the National Public Employer Labor Relations Association.