Opinion ID: 204689
Heading Depth: 3
Heading Rank: 3

Heading: Deference Owed in this Case

Text: Our view of the level of deference we owe to the Secretary in this matter is best captured by the Supreme Court's instruction in Gonzales v. Oregon : An agency does not acquire special authority to interpret its own words when, instead of using its expertise and experience to formulate a regulation, it has elected merely to paraphrase the statutory language. 546 U.S. 243, 257, 126 S.Ct. 904, 163 L.Ed.2d 748 (2006); see also Chase Bank USA, N.A. v. McCoy, 562 U.S. ___, ___, 131 S.Ct. 871, 882, 178 L.Ed.2d 716 (2011) (Accordingly, no deference was warranted to an agency interpretation of what were, in fact, Congress' words.); N. Cal. River Watch v. Wilcox, 620 F.3d 1075, 1088 (9th Cir.2010) (Here, the three rules cited by the United States essentially parrot the statutory language.). The parroting with which the Gonzales Court took issue is present in the Secretary's interpretation of Section 3(k). According to the Secretary's regulations, a salesman is someone who either mak[es] sales within the meaning of section 3(k) of the Act or someone who obtain[s] orders or contracts. 29 C.F.R. 541.500(a)(1). Since there is no dispute that PSRs do not obtain orders for anything, only the sales element is relevant here. To define sales within the meaning of section 3(k), we look to 29 C.F.R. § 541.501(b), which provides that [s]ales within the meaning of section 3(k) of the Act include the transfer of title to tangible property, and in certain cases, of tangible and valuable evidences of intangible property. Section 3(k) of the Act states that `[s]ale' or `sell' includes any sale, exchange, contract to sell, consignment for sale, shipment for sale, or other disposition. 29 U.S.C. § 203(k). Thus, the Secretary has given us two meanings with which to set the boundaries of the sales exemption. First, in 29 C.F.R. § 541.501(b), the Secretary provides an open-ended definition that sales, unsurprisingly, include the transfer of title to tangible property. In the next sentence, the Secretary cross-references back to the language of Section 3(k) of the Actthe very language purportedly being defined. Accordingly, the Secretary's regulations define sale or sell by statutory renvoithat is, a sale means a sale. This clarifies nothing about the meaning of Section 3(k); it merely incorporates the very undefined, very un-delimited term the Secretary seeks to clarify. A definition dependent almost entirely on Congress's seventy-two-year old statutory language is not an example of the DOL employing its expertise to elucidate meaning to which we owe Auer deference. See N. Cal. River Watch, 620 F.3d at 1085-87. In Gonzales v. Oregon, the Supreme Court confronted an analogous situation when it rejected the Attorney General's regulatory attempt to frustrate the implementation of Oregon's Death with Dignity Act. In that case, Oregon statutory law exempted licensed physicians from liability when they prescribed medication to hasten death for terminally ill individuals. 546 U.S. at 249-54, 126 S.Ct. 904. In 2001, shortly after a change of presidential administration, the Attorney General promulgated a new interpretive rule that restricted the use of controlled substances in physician-assisted suicides. Id. at 254, 126 S.Ct. 904. In defending that rule, the government contended in its appeal that the judiciary was required to give considerable deference to the Attorney General's interpretive rule as it was an elaboration of one of [his] own regulations. Id. at 256, 126 S.Ct. 904. In rejecting that contention, the Supreme Court drew meaningful distinctions with its decision in Auer : In Auer, the underlying regulations gave specificity to a statutory scheme the Secretary was charged with enforcing and reflected the considerable experience and expertise the [DOL] had acquired over time. . . . Here, on the other hand, the underlying regulation does little more than restate the terms of the statute itself. The language the Interpretive Rule addresses comes from Congress, not the Attorney General, and the near equivalence of the statute and regulation belies the Government's argument for Auer deference. Id. at 256-57, 126 S.Ct. 904 (emphasis added). The failure to add specificity to the statutory scheme that troubled the Gonzales Court, indeed the parroting of statutory language, is present in the Secretary's outside sales regulations. Rather than setting forth a particular test for sale or instructing employers to look for indicia of sales, the Secretary's regulations direct employers, employees, and this court back to the language of the FLSA. Given the admonition in Gonzales, we are unable to accord Auer deference to a regulation written in this manner. Thus, when we look to the Secretary's brief for her application of the regulations, we see only a reinterpretation of Section 3(k). Rather than applying the regulation to the facts presented, the Secretary has used her appearance as amicus to draft a new interpretation of the FLSA's language. Were we to accept the Secretary's offer, and give controlling deference even where there exists no meaningful regulatory language to interpret, we would unduly expand Auer's applicability to interpretations of statutes expressed for the first time in case-by-case amicus filings. See N. Cal. River Watch, 620 F.3d at 1088 (In this case, the amicus brief purports to interpret statutory, not regulatory, language.). In essence, we would sanction bypassing of the Administrative Procedures Act and notice-and-comment rulemaking. Cf. Christensen v. Harris Cnty., 529 U.S. 576, 587, 120 S.Ct. 1655, 146 L.Ed.2d 621 (2000) (Here, however, we confront an interpretation contained in an opinion letter, not one arrived at after, for example, a formal adjudication or notice-and-comment rulemaking.). Accordingly, we hold that we need not give controlling deference to the Secretary's interpretations in this matter. [7] Furthermore, even if Auer applied, deference is not warranted because the Secretary's position is both plainly erroneous and inconsistent with her own regulations and practices, as demonstrated in the analysis that follows.