(Source: JD Supra) – On Monday, the U.S. Supreme Court heard oral arguments in Perez v. Mortgage Bankers Ass’n et al. The case, if decided against the Department of Labor (Thomas E. Perez is the Secretary of Labor), will have a significant impact on all federal administrative agencies. But what, if any, will be its impact on California state agencies?

The Perez case has its roots in a DOL interpretive opinion issued in 2006 concluding that mortgage-loan officers are exempt administrative employees under the DOL’s regulations adopted in 2004 pursuant to the Fair Labor Standards Act. In 2010, the DOL revisited the question, decided its 2006 opinion was wrong and withdrew the 2006 opinion. Although the DOL adopted the 2004 regulations pursuant to the notice and comment procedures of the Administrative Procedure Act, it did not employ notice and comment either in 2006 when it issued the opinion letter or in 2010 when it withdrew that letter. When the MBA sued, the Court of Appeals for the District of Columbia Circuit held that the DOL’s withdrawal was invalid because the failure to follow the APA’s notice and comment procedures. Mortgage Bankers Ass’n v. Harris, 720 F.3d 966 (D.C. Cir. 2013).

As I’ve mentioned in prior posts, agencies generally have three ways of making rules under the APA – Formal rulemaking (a rara avis in the 21st century), notice and comment rulemaking and publication. There are, as one might expect, several exceptions. One specific exception from notice and comment rulemaking is for “interpretative rules”. 5 U.S.C. § 553(b). My former students can probably attest that it isn’t easy to distinguish interpretative rules from legislative rules.

Read more from JD Supra

Moe Bedard
My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, LoanSafe.org. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications.