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No Guidance Without Comment, Business Interests Tell Supreme Court

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No Guidance Without Comment, Business Interests Tell Supreme Court Week of November 10, 2014 No Guidance without Comment, Business Interests Tell Supreme Court Federal agencies should be barred from issuing interpretive said it was improper to reverse 20 years of uninterrupted guidance on their regulations unless they follow the notice- policy through an interpretive memo. and-comment procedures in the Administrative Procedure Act (APA), business groups are urging the Supreme Court. According to the brief, the APA’s notice-and-comment Left unchecked, they argue, agencies have an incentive to provisions was Congress' way of balancing the agencies’ enact intentionally vague rules, then release more specific need for flexibility in addressing new problems against the guidance on how the rules are to be implemented, so as to regulated community’s right to have a say in regulatory achieve their “potentially controversial” goals, the groups decision-making. But, the brief said, federal agencies have said in an amicus brief October 16. tried to block public participation by advancing purposely vague regulations, then issuing interpretations under those The U.S. Chamber of Commerce, National Association of rules that fulfill the controversial outcomes the agencies had Manufacturers, Business Roundtable and others filed the in mind from the beginning. A decision by the High Court brief in Perez v. Mortg. Bankers Ass'n, No. 13-1041, in which that lets agencies reverse their interpretations without the Court may decide if agencies must follow APA notice and comment “would make the situation even procedures when changing an interpretation of their own worse,” the brief contended. rules. The case involves a 2010 decision that mortgage loan officers would have to be paid overtime under the Fair One reason agencies are so strongly encouraged to pass Labor Standards Act. Other groups represented on the brief vague rules is because of an earlier Supreme Court holding, were the American Fuel and Petrochemical Manufacturers, known as the Auer doctrine, giving agencies the right to American Health Care Association and Securities Industry have the final say on what a regulation means, according to and Financial Markets Association. the brief. Because of Auer, agencies may act with full confidence that courts must accept their interpretations “[A]n agency could promulgate an ambiguous regulation in unless they are patently unreasonable. the first place and then, without having to respond to the concerns of the regulated community, merely interpret that At the very least, courts should interpret the APA to require rule to reach any of the results it desires,” the brief states. notice and comment when an agency substantially deviates “But even then, no matter how much anyone had relied on from a relied-upon interpretation, the brief stated. the agency's definitive interpretation, it could later change Regulated entities rely on guidance to help them its mind, again without any feedback from the public.” understand how the regulation will be enforced, but some academicians have predicted a ruling favoring the business OSHA, in particular, could be affected by the High Court’s groups will discourage agencies from issuing any guidance. decision, since it frequently issues interpretive guidance. The agency has been accused of using interpretations as a In its brief, the Labor Department asserted that Congress back-door rulemaking, such as a 1994 memo decreeing that had unambiguously exempted guidance from notice and employers must pay for personal protective equipment. comment, and that the interpretation triggering the That guidance was struck down two years later by the litigation was neither arbitrary nor capricious. Occupational Safety and Health Review Commission, which 1 LAS VEGAS: OCTOBER 23-24 Judge Dismisses Pattern Charge against Mine Operator Likening MSHA’s litigation position on its pattern of Besides contesting the individual enforcement actions, violations (POV) allegation against a West Virginia coal Brody also initiated litigation challenging those operator to “an unfair card game” where “the rules were provisions in the new rule. However, a judge affirmed announced only after the game had been played,” a the changes as facially valid and, on interlocutory judge has dismissed the agency’s pattern claim on due review, the Federal Mine Safety and Health Commission, process grounds. in a 4-1 vote in August, upheld the judge’s decision. The Commission then remanded the case for further Equally significant, Administrative Law Judge William proceedings. Moran also vacated two alleged violations classified as significant and substantial (S&S) and changed to non- Judge Moran’s job was to determine if a pattern had S&S nine other alleged S&S citations and orders. MSHA been established. Integral to that determination, he had in part relied upon these to characterize Brody had to decide which citations/orders, of the 54 Mining, LLC’s No. 1 Mine as a pattern violator. Moran’s constituting the basis for the pattern notice, were actual action, coupled with the parties’ agreement to settle 12 violations and, among those, which were also S&S. other S&S enforcement actions by removing the S&S designation, left Brody’s final S&S count substantially Prior to the hearing, Moran directed MSHA to state its below the S&S violation screening threshold for basis for determining that the violations created a considering it for the POV enforcement sanction in the pattern. However, the agency refused, saying the first place. grounds for determining a pattern could be made only after Moran had determined if the violations were S&S. A POV designation represents a serious enforcement That led Moran to dismiss the pattern designation and action. Each time an alleged violation is issued, miners invoke his card-game analogy to show that MSHA’s working in the portion of the mine affected by it must position violated Brody’s due process rights. be withdrawn until the alleged associated hazard is abated. The POV designation remains until the mine “On procedural due process grounds, it was an passes a full inspection without S&S violations, a obligation on the Secretary’s part to identify, in advance difficult achievement in an underground coal mine. of the hearing, the road map explaining the basis for his claim that the mine has shown a pattern of violations,” MSHA cited Brody in the fall of 2013 as a pattern Moran said in his November 3 decision. He stated that violator based in part on 54 alleged S&S violations without this information, Brody could not properly written over a one-year period and grouped as follows: defend itself at the hearing. 20 for alleged emergency preparedness and escapeway hazards; 18 for ventilation and methane; nine for roof Brody also had contended that its constitutional due and/or rib; and seven for inadequate mine process rights required that it be given fair warning of examinations. The operator contested all of them. MSHA’s POV enforcement action. MSHA countered that Brody had the option of seeking expedited court review The Brody operation was one of four mines labelled as a of the very first citation or order an inspector issued pattern violator under a revised POV rule that had gone under the pattern sanction. “But this assertion does not into effect seven months earlier. Among the changes, square with fundamental fairness, because the process the new rule eliminated a procedure whereby MSHA envisioned by the Secretary is a months’ (if not years) provided advance warning to a mine that it was a long process, considering the likelihood of appeals,” potential pattern violator. Additionally, for the first time, Moran said. the rule allowed the agency to consider issued enforcement actions, as opposed to those that had Moran also found that broad hints MSHA had provided been settled or otherwise adjudicated, as final orders. to indicate what constitutes a pattern of violations were 2 partially incompatible with the legislative history of the Moran’s decision underscores mine operators’ Mine Act. Congress had suggested that § 104(e) pattern complaint that it is unfair to count issued citations and notices were intended as a last resort against mine orders in determining their POV eligibility. Further, they operators, after other enforcement mechanisms under contend the POV rule is vague and the POV criteria are the Act had failed, he said. subject to change by MSHA without notice and comment. To register, visit: www.jacksonlewis.com Jackson Lewis is hosting an upcoming webinar on How to Handle an OSHA Inspection Join members of Jackson Lewis’ Workplace Safety and Health practice group for a complimentary 60-minute webinar where we will discuss the OSHA inspection process. Thursday, November 20, 2014 ▪ 2:00 – 3:00PM EST Click here for more information and to register. Visit www.oshalawblog.com to subscribe to Jackson Lewis’ OSHA Law Blog! 3 With experienced OSHA and MSHA attorneys located strategically throughout the nation, Jackson Lewis is uniquely positioned to serve all of an employer’s workplace safety and health needs: Omaha Atlanta 10050 Regency Circle 1155 Peachtree St. N.E. Suite 400 Suite 1000 Omaha, NE 68114 Atlanta, GA 30309 Denver Metro New York Kelvin C. Berens, Esq. 950 17th Street 58 South Service Road Carla J. Gunnin, Esq. Joseph S. Dreesen, Esq. Suite 2600 Suite 250 Dion Y. Kohler, Esq. Orlando Denver, CO 80202 Melville, NY 11747 Boston Donna Vetrano Pryor, Esq. Ian B. Bogaty, Esq. 390 N. Orange Avenue 75 Park Plaza, 4th Floor Mark N. Savit, Esq. Roger S. Kaplan, Esq. Suite 1285 Boston, MA 02116 Orlando, FL 32801 Stephen T. Paterniti, Esq. Greenville Miami Lillian C. Moon, Esq. 55 Beattie Place One Biscayne Tower Cleveland One Liberty Square 2 South Biscayne Blvd., Washington, D.C. Region 6100 Oak Tree Blvd. Suite 800 Suite 3500 10701 Parkridge Blvd. Suite 400 Greenville, SC 29601 Miami, FL 33131 Suite 300 Cleveland, OH 44131 Robert M.
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