On March 9, 2015, the United States Supreme Court announced its decision in the consolidated cases of Perez et al. v. Mortgage Bankers Assoc. and Nickols et al. v. Mortgage Bankers Assoc. According to court documents, the Supreme Court held that under the Administrative Procedure Act (APA), a government agency that is not required to use notice-and-comment procedures to issue an initial rule interpreting a federal regulation is also not required to use notice-and-comment procedures to amend or repeal that interpretative rule.
According to documents filed in the case, the Petitioners are former mortgage-loan officers seeking overtime compensation in lawsuits filed under the Fair Labor Standards Act. Intervening at the federal district court to defend the Department of Labor’s ability to amend a rule interpreting federal regulations under the APA, Petitioners were granted summary judgment. The D.C. Circuit reversed the district court’s decision by applying the Paralyzed Veterans doctrine, which required agencies to use notice-and-comment procedures to issue a new interpretation of a regulation that deviates significantly from the one the agency previously adopted. In reversing the D.C. Circuit, the Supreme Court declared “[t]he Paralyzed Veterans doctrine is contrary to the clear text of the APA’s rulemaking provisions[.]” All nine Supreme Court justices joined in the Court’s judgment.
Plaintiffs’ attorney Adam W. Hansen of Nichols Kaster, PLLP explains, “We are very pleased with the Court’s decision as today's decision is not only an important victory for the rule of law, but also for a group of employees who were not treated fairly.”
Plaintiffs are represented by Adam W. Hansen, Paul J. Lukas, and Rachhana T. Srey of Nichols Kaster, PLLP. The consolidated opinion is entitled, Perez, et al. v. Mortgage Bankers Assoc., No. 13-1041, 575 U.S. __ (2015).