Perez v Mortgage Bankers Association.

Association challenged the government’s change in interpretation of overtime rules which made mortgage loan officers nonexempt. The district court granted judgment to Perez, but, the DC Circuit reversed under circuit precedent which required notice and comment when interpretations change in a material way. The Court, with a 6 member majority, one concurrence in part and in judgment and two concurrences in judgment, reversed. The majority held under the plain language of the Administrative Procedures Act, notice and comment is required to adopt or amend rules but is not required to interpretive rules and thus the DC Circuit precedent is contrary to the text of the Act and must be reversed. The majority noted that agencies which try to use interpretive rules to side step the notice and comment or other requirement can be challenged under the arbitrary and capricious standard among other theories. Justice Alito concurred in the majority opinion except as to the portion explaining grounds to challenge and noted his view that the viability of the Supreme Court case of Seminole Rock is open to question and looked forward a to a properly briefed and argued case on the subject. Justice Scalia concurred in judgment arguing that the Court’s precedent requiring deference to agency interpretation of its own rules is inconsistent with Section 706 of the Act and called for the court to overrule it and restore the balance intended by Congress in enacting the Act. Justice Thomas concurred in judgment arguing that Court precedent requiring deference to administrative interpretation of its own rules improperly transfers judicial power to the agencies and removes the judicial check from the system and called for the precedent to be overruled.

Department of Transportation v Association of American Railroads

Association sued department arguing the statute allowing Amtrak to jointly create metrics and standards of operation violated the nondelgation doctrine. The district court granted summary judgment to Department, but, the DC Circuit reversed on the ground that Amtrak is a private entity and cannot have government power delegated to it. The Court, with an 8 justice majority opinion, one concurrence and one concurrence in judgment, reversed. The majority held that Amtrak is a government entity as the government owns almost all its stock, the President appoints 8 of the nine board members and government heavily subsidizes Amtrak. Thus, Congress’ declaration Amtrak is private does not change the reality. The case was remanded to consider Association’s other constitutional claims. Justice Alito added a concurrence arguing Amtrak’s board may raise constitutional issues as the members do not take the required oath and the president of the board is not appointed by the president. Justice Thomas concurred in judgment arguing that under original understating of the Constitution, only Congress can pass legally binding rules governing private behavior.