The Supreme Court will hear oral argument next week in Monsanto Company v. Durnell. The question presented is “[w]hether the Federal Insecticide, Fungicide, and Rodenticide Act [(“FIFRA”)] preempts a label-based failure-to warn claim where EPA has not required the warning.” Neither party cited Loper Bright in their cert-stage briefing. Nor did the Missouri state-court decisions below, which is perhaps unsurprising. But as Professor Josh Blackman flagged in Reason today, the respondent’s merits brief does cite Loper Bright in arguing against preemption.

Durnell’s brief cites Loper Bright extensively. For example, it states that, “[u]nder Loper Bright, it is for courts to determine the meaning of FIFRA’s provisions absent an express delegation of interpretive authority to the agency.” Elsewhere, the brief argues that, “[a]fter Loper Bright, Monsanto must point to text that expressly vests EPA with authority to render conclusive pronouncements on the meaning of FIFRA’s misbranding provisions and their application to particular pesticides.”  

Monsanto countered in its reply: “Absent an express delegation of authority to bind the judiciary, which neither FIFRA nor any other statute includes, Durnell insists that juries are free to require warnings in addition to or different from those required by EPA in the registration process. There are ample reasons this theory escaped Durnell and everyone else below. It draws no support from Loper and is flatly inconsistent with the text of §136v(b) and Congress’ stated intent to ensure ‘uniformity’ in labeling.”

No matter how the Court resolves this case, it will be interesting to see whether Loper Bright comes up at oral argument and whether, if at all, it will factor into the Court’s analysis.

Michael Pepson is regulatory counsel at Americans for Prosperity Foundation. 

By Ryan P. Mulvey & Michael Pepson 

The Sixth Circuit’s recent decision in Department of Labor v. Americare Healthcare Services is a useful indicator of how courts operationalize Loper Bright when a statute contains an express delegation of authority to an agency.  The case also spotlights related questions about the scope of statutory stare decisis for Chevron-era precedents, and the status of broad “housekeeping” statutes that agencies may claim confer legislative rulemaking authority. 

The Americare Case: Third-Party Home-Care Workers and FLSA’s Exemptions 

The Fair Labor Standards Act (“FLSA”) generally requires employers to pay minimum wage and overtime, but the statute contains a broad range of exemptions, including two that Congress added in 1974: the “companionship services” and “live-in” exemptions.  The first of these applies to employees engaged in “domestic service employment” who provide “companionship services” to the aged or the infirm; the second applies whenever an employee “reside[s] in the household” where he or she provides “domestic service[s].” 

Shortly after the 1974 FLSA amendments, the Department of Labor (“DOL”) issued a regulation extending these two exemptions to third-party employees (workers employed by a home-care agency rather than directly by a family or household).  In 2007, the Supreme Court upheld this regulatory approach in Long Island Care at Home v. Coke, reasoning that FLSA did not expressly resolve the third-party-employment question yet empowered DOL “to work out the details” through rulemaking.  DOL eventually reversed course in 2013 when it promulgated a new regulation limiting the availability of the companionship-services and live-in exemptions for third-party employers.  That reversal set the stage for the dispute in Americare.  Americare’s business model entailed hiring live-in family members to care for their own relatives.  DOL argued the company could not avail itself of the FLSA exemptions because it was a third-party employer.  The Sixth Circuit ultimately sided with the agency, upholding the 2013 regulation. 

The Majority: Understanding the Bounds of An Express Delegation 

One of Loper Bright’s core holdings is that statutes have a single best reading, fixed at the time of enactment, which is to be independently discerned by a federal judge.  But sometimes a “statute’s meaning may well be that the agency is authorized to exercise a degree of discretion.”  Congress may instruct an agency to “give meaning to a particular statutory term,” “prescribe rules to ‘fill up the details’ of a statutory scheme, . . . or to regulate subject to the limits imposed by a term or phrase that ‘leaves agencies with flexibility.’”  The central question in Americare was whether Congress expressly delegated to DOL authority to narrow (or expand) the companionship-services and live-in exemptions.  The Circuit ruled in the affirmative. 

The majority started with the language of the companionship-services exemption, which directs DOL to “define[] and delimit[]” relevant “terms,” including key phrases like “domestic service” and “companionship services.”  On the court’s view, those verbs provided a sufficiently concrete guide—or “intelligible principle,” as Judge Stranch termed it—for fixing the boundaries of Congress’s delegation.  The parties’ agreement that the exemption contained an express delegation—and the Supreme Court’s recognition of the same in Coke—made this conclusion relatively straightforward. 

The live-in exemption, by contrast, proved a more difficult case.  Although this exemption lacks the same express “define” and “delimit” delegation, the majority nevertheless focused on the “significant overlap” in practice between the two exemptions—an overlap Judge Stranch understood to imply that discretion afforded under the companionship-services exemption extended across both exemptions.  For example, the majority reasoned that “companionship services” were ultimately a “subset of ‘domestic service,’” and there was “no reason to treat . . . [the exemptions] differently,” as they often worked in tandem in practice.  Moreover, as the express delegation in the companionship exemption did not presume to limit DOL’s discretion to defining terms “for purposes of th[at] provision,” it could include defining the same terms uniformly throughout FLSA—or, at least, the exemption section.  Finally, the majority read Coke as requiring this outcome. 

Judge Bush’s Concurrence: Interpretative Controversy 

Judge Bush concurred in the judgment but disagreed with the majority’s approach.  His principal point was rather simple: Congress added an express delegation to one exemption but omitted in the other.  Whether companionship services could be conceptualized as a subset of domestic-service employment did not, by itself, justify extending DOL’s delegation beyond the construction of one exemption.  The majority had jumped the gap between exemptions by abandoning text-based interpretative analysis and focusing instead on “implications” for the “scope” of DOL’s “regulatory authority.”  Furthermore, as Judge Bush explained, even if Coke were still correct in the wake of Loper Bright and could be read to allow DOL some regulatory discretion, the majority’s “approach simultaneously expands and contracts [DOL’s] authority,” transforming a straightforward delegation to “define” and “delimit” into a broader authority to regulate whole categories of workers.  Judge Bush’s disagreement with the majority highlights how differences in methods of judicial interpretation can result in divergent conclusions about the bounds of any given delegation.  This will be an aspect of Loper Bright implementation that continues to develop in the courts. 

The Scope of Statutory Stare Decisis 

Americare offers a concrete example of how unsettled statutory stare decisis may be in the wake of Loper Bright.  In Loper Bright, the Supreme Court suggested that overturning Chevron would not upend all cases decided under the old deference regime.  Instead, Chief Justice Roberts promised Loper Bright would “not call into question” the “holdings of those cases that specific agency actions are unlawful.”  But lower courts face a doctrinal dilemma: does stare decisis attach to specific agency action upheld under Chevron (e.g., a particular rulemaking), or does it attach to an agency’s legal interpretation used to justify that action? 

The majority in Americare took the later approach, treating Coke as controlling in a broad sense, even though DOL’s 2013 regulation had not been at issue.  (Indeed, Coke involved the agency’s early 1975 regulation, which took the opposite position on third-party employers!)  Judge Bush, for his part, largely shared Judge Stranch’s view that Coke was determinative, although he also suggested Coke should be revisited in light of Loper Bright.  In his mind, Justice Breyer’s broad understanding of DOL’s authority had facilitated the agency’s “flip-flops” on the third-party employer question.  On the underlying question of stare decisis, time will tell which approach is correct. 

Another Front on the Horizon?  The Pernicious Problem of “Housekeeping” Statutes 

Judge Bush’s concurrence raises one final question with potentially significant implications: how should courts deal with generic delegations of authority—often called “housekeeping” statutes?  Again, Loper Bright makes clear that sometimes the best reading of a statute is that it authorizes an agency to exercise regulatory discretion.  Footnotes 5 and 6 of Chief Justice Roberts’s opinion offer several examples.  Notably, none of those statutes involve generalized delegations. 

Consider the companionship-services exemption at issue in Americare, which is cited in Loper Bright as an example of a provision that expressly delegates authority for an agency to give meaning to a statutory term.  This type of delegation contrasts sharply with a “housekeeping” statute, such as Section 29(b) of the 1974 FLSA amendments, which generically authorizes DOL “to prescribe necessary rules, regulations, and orders with regard to the amendments made by this Act.”  Notwithstanding glaring textual differences, DOL had argued that Section 29(b) qualified as the kind of express delegation anticipated by Loper Bright.  Judge Bush squarely rejected that argument, explaining he “would take almost the opposite tack”: “[b]road grants of rulemaking authority . . . do not require deference” and “more than just not warranting deference . . . [they] do not result in the power to promulgate legislative rules at all.” 

The interpretive stakes here are significant.  Treating broad “housekeeping” statutes—which are meant only to authorize interpretative or procedural rules—as blank checks for legislative rulemaking would enlarge agency power far beyond what Congress ever anticipated.  It would also facilitate regulatory flip-flopping, one of the destabilizing trends that Loper Bright sought to stop.  By contrast, as Judge Bush argues, closely policing the line between express delegations and “housekeeping” statutes “gives Loper Bright its teeth.” 

Conclusion  

For those interested in the sound development of statutory interpretation in the wake of Loper Bright, the Americare decision is worth paying attention to.  Although the panel may have misapprehended the scope of the statutory stare decisis, the question is far from resolved.  And Judge Bush’s concurrence is worth reading, alongside the scholarship he cites, insofar as he maintains “housekeeping” statutes are neither Loper Bright delegations nor free-standing authorizations for agencies to issue legislative rules, as opposed to procedural or interpretative rules and guidance.  Loper Bright may even require courts to better police the line between delegations of legislative-rulemaking discretion, subject to constitutional limits, and mere general delegation ”housekeeping” provisions.  That approach would help restrain agencies from usurping Congress’s constitutionally assigned legislative role. 

Ryan P. Mulvey is Senior Policy Counsel at Americans for Prosperity Foundation.  In his role at Cause of Action Institute, Ryan has served as lead counsel on Loper Bright Enterprises v. Raimondo since the initiation of the case.  

Michael Pepson is regulatory counsel at Americans for Prosperity Foundation. 

The Supreme Court has granted the petition for writ of certiorari in Beaird v. United States to review whether Stinson v. United States “still correctly states the rule for the deference that courts must give the commentary to the Sentencing Guidelines.”  This development not only opens the door for reconsideration of another judicial-deference doctrine in the wake of Loper Bright, but it positions Beaird as a test case for whether Loper Bright’s underlying reasoning—that judges must provide their independent judgment about the best meaning of the law—extends beyond the administrative-law context.

In a recent post for the Yale Journal on Regulation’s “Notice & Comment” blog, law professor Daniel Deacon has previewed a draft report prepared for the Administrative Conference of the United States entitled “Drafting Regulatory Preambles.”  Described as an exploration of “best practices for drafting regulatory preambles in light of recent developments in judicial review of agency action,” the paper proposes to provide insight into how the Supreme Court’s overruling of Chevron deference in Loper Bright Enterprises v. Raimondo has impacted behavior among lawyers and policy experts in the federal bureaucracy.

Americans for Prosperity (“AFP”) has published an article by AFP Foundation Senior Policy Counsel Ryan Mulvey that re-tells the story of Loper Bright with a focus on the plaintiff-fishermen, who stood up to what they took to be an egregious instance of government overreach.  The article is part of AFP’s “One Small Step” series, which is marking America’s semiquincentennial by exploring how the country’s founding principles apply to policy change movements.

Updates to the federal government’s official guide to interpretations of the Constitution—maintained by the Librarian of Congress and popularly known as “Constitution Annotated”—were published earlier this week to reflect the impact of the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo on the proper understanding of the Vesting Clause in Article I.  The changes can be found in articles concerning agency discretion and judicial deference, as well as the Major Questions Doctrine and other canons of statutory construction.

The guide’s explanation of the limits of agency discretion emphasized that, in the absence of Congress’s express delegation of interpretative power, courts should no longer defer to an administrative agency’s interpretation of a statute so long as it is “reasonable.”  Judges must instead provide authoritative constructions of alleged textual ambiguities.

The U.S. Court of Appeals for the Fifth Circuit has affirmed a lower court decision striking down a Federal Communications Commission (“FCC”) regulation that interpreted the phrase “prior express consent” in the Telephone Consumer Protection Act (“TCPA”) to mean “written” consent, at least when it comes to so-called “telemarketing” calls.  That decision, in a case called Bradford v. Sovereign Pest Control, relied on Loper Bright’s straightforward proposition that “[c]ourts interpret statutes, no matter the context, based on the traditional tools of statutory construction,” and without deference to an agency’s reading of the law.

Americans for Prosperity Foundation applauds the Trump EPA’s decision to repeal the agency’s 2009 Endangerment Finding—a document the agency has used as a springboard to claim sweeping power under the Clean Air Act to unilaterally set national transportation and energy policy by administrative edict without Congress’s permission. The Endangerment Finding has underpinned a host of burdensome and expensive EPA regulations impacting the entire national economy and the daily lives of Americans, including the price we pay for basic consumer goods. By repealing it, President Trump, Administrator Zeldin, and EPA have taken yet another bold step to unleash prosperity, restore American energy dominance, and lower costs. As the Washington Post Editorial Board said, supporting the decision, “It’s about time.” This historic deregulatory action will make buying a new car more affordable and save over a trillion dollars in costs.