Opinion ID: 658534
Heading Depth: 3
Heading Rank: 2

Heading: Procedural APA Claim

Text: 31 CATA argues next that even if the risk of loss test were reasonable, its use constitutes a departure from the agency's original collaboration standard. In making this claim, CATA does not point to a single application of the collaboration standard as articulated by appellants, instead arguing that the DOL has never previously articulated the risk of loss standard as the controlling analysis in determining whether an employer has advanced travel costs to H-2A workers. See Appellants' Brief at 31-34. The DOL responds that it used the risk of loss analysis in a 1979 grand jury probe into the very loan arrangement currently being challenged, but that it cannot locate any written record of that investigation. Appellees' Brief at 34-35. In addition, the DOL claims to have employed a risk of loss analysis in dismissing a complaint under the H-2A regulations which was upheld in an unpublished case in 1985. See Brief for the Appellee U.S. Department of Labor, Paulk v. Virginia Agric. Growers Ass'n, Inc., No. 85-1793(L) (4th Cir. brief filed Dec. 1985), reprinted in J.A. at 539; see also Virginia Agric. Growers Ass'n, Inc. v. Donovan, Nos. 83-0146-D, 83-0147-D (W.D.Va. May 10, 1984) (order denying preliminary injunction), reprinted in J.A. at 8. Appellants argue that the DOL did not give the risk of loss analysis controlling weight in its decision to dismiss that 1985 complaint, and instead that the DOL in that case primarily looked to the degree of collaboration among the employer and third parties. Appellants' Brief at 32-34. 32 Even if the DOL failed previously to articulate the risk of loss test as clearly as it did here, we find the risk of loss test to be a permissible interpretation of the DOL's regulations and exempt from the notice and comment requirements of Sec. 553 of the APA. The APA requires in relevant part: 33 (b) General notice of proposed rule making shall be published in the Federal Register.... Except when notice or hearing is required by statute, this subsection does not apply-- 34 (A) to interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice 35 .... 36 5 U.S.C. Sec. 553(b). The distinction between rules or statements which are subject to the notice and comment requirements of Sec. 553 and rules or statements which are exempt from those procedures is notoriously hazy. American Hospital Ass'n v. Bowen, 834 F.2d 1037, 1045 (D.C.Cir.1987). See, e.g., General [304 U.S.App.D.C. 151] Motors Corp. v. Ruckelshaus, 742 F.2d 1561, 1565 (D.C.Cir.1984) (distinction  'enshrouded in considerable smog'  (quoting Noel v. Chapman, 508 F.2d 1023, 1030 (2d Cir.1975))), cert. denied, 471 U.S. 1074, 105 S.Ct. 2153, 85 L.Ed.2d 509 (1985). Mindful of congressional intent in creating the APA and the  'salutary purposes behind the [APA's] provisions,'  we have been careful to construe Sec. 553(b)(A)'s exceptions to the rulemaking requirements narrowly. American Hospital Ass'n, 834 F.2d at 1044-45 (quoting National Ass'n of Home Health Agencies v. Schweiker, 690 F.2d 932, 949 (D.C.Cir.1982), cert. denied, 459 U.S. 1205, 103 S.Ct. 1193, 75 L.Ed.2d 438 (1983)). Nonetheless, we employ certain principles in determining whether a rule or statement is interpretative, a general statement[ ] of policy, or sets out rules of agency organization, procedure, or practice. 5 U.S.C. Sec. 553(b)(A). Cf. American Hospital Ass'n, 834 F.2d at 1045-48 (discussing different functions of interpretative rules, general policy statements, and rules of agency organization, procedure or practice, as well as different principles for their respective identification); American Mining Congress v. Mine Safety & Health Admin., 995 F.2d 1106 (D.C.Cir.1993) (distinguishing interpretive rules from general policy statements). Here, we focus on whether the DOL's risk of loss test employed in the course of an adjudication constitutes an interpretative statement and as such is exempt from the APA notice and comment requirements. Ultimately, an interpretive statement simply indicates an agency's reading of a statute or a rule. It does not intend to create new rights or duties, but only  'reminds' affected parties of existing duties. General Motors, 742 F.2d at 1565 (internal quotes and citations omitted). 37 A statement seeking to interpret a statutory or regulatory term is, therefore, the quintessential example of an interpretive rule. See National Family Planning and Reproductive Health Ass'n v. Sullivan, 979 F.2d 227, 236 (D.C.Cir.1992). Especially in the course of an adjudication, the agency will give its understanding of the regulations with whose enforcement it is entrusted. At the very least it will explain its interpretation in order to permit the parties before the agency to understand its decision. If we were to require an agency to promulgate every regulatory or statutory interpretation arrived at in the course of adjudicating specific cases, agencies would be condemned to inactivity, since interpretation of the statutory and regulatory framework under which an agency must act is the sine qua non of reasoned agency action. Cf. American Mining Congress, 995 F.2d at 1111-12 (Where a statute or legislative rule has created a legal basis for enforcement, an agency can simply let its interpretation evolve ad hoc in the process of enforcement....). While we have said that interpretive rules cannot go beyond the text of a statute, Fertilizer Inst. v. EPA, 935 F.2d 1303, 1308 (D.C.Cir.1991), we do not, of course, mean to imply that an interpretive statement may only paraphrase statutory or regulatory language. Indeed, a mere paraphrase would hardly be interpretive at all. Accordingly, an interpretive statement may suppl[y] crisper and more detailed lines than the authority being interpreted without losing its exemption from notice and comment requirements under Sec. 553. American Mining Congress, 995 F.2d at 1112 (holding Program Policy Letters that designate certain x-ray readings as diagnoses within meaning of agency's reporting regulations constituted interpretive rules exempt from rulemaking requirements under the APA). This is precisely what the DOL has done here. 38 The DOL was exercising its authority under the DOL's previously promulgated regulations. It found that the employer had not advanced transportation costs either directly or indirectly to foreign workers and consequently dismissed the FJF complaint. Since there had been an earlier grand jury probe which found that the Jamaican loan arrangement was not in violation of then-Sec. 655.202(a), and since petitioners were essentially challenging the same loan scheme in their current complaint, it made sense for the DOL to clarify and explain its understanding of a direct or indirect advance. Indeed some interpretation of what constitutes an indirect advance was a prerequisite for the DOL to decide the FJF complaint at all. Appellants, however, argue that the risk of [304 U.S.App.D.C. 152] loss test was a departure from prior agency practice and must therefore be promulgated with notice and comment. 39 While in General Motors we did rely on the fact that the interpretive rule simply restated the consistent practice of the agency, 742 F.2d at 1565, we do not require that all interpretive rules merely restate consistent agency practice. But see Comite De Apoyo Para Los Trabajadores Agricolas v. Dole, 731 F.Supp. 541, 544 (D.D.C.1990). To the contrary, in American Postal Workers Union v. United States Postal Service, 707 F.2d 548, 558-60 (D.C.Cir.1983), cert. denied, 465 U.S. 1100, 104 S.Ct. 1594, 80 L.Ed.2d 126 (1984), we specifically held that the Office of Personnel Management's change in method for computing annuities was not subject to the rulemaking requirements under Sec. 553 because both the old and new methods were interpretive rules. Only where a  'second rule repudiates or is irreconcilable with [a prior legislative rule], the second rule must be an amendment of the first[,] and ... must itself be legislative.'  National Family Planning, 979 F.2d at 235 (quoting Michael Asimow, Nonlegislative Rulemaking and Regulatory Reform, 1985 DUKE L.J. 381, 396) (holding agency's interpretation substantially repudiating earlier legislative rule that agency had defended against statutory and constitutional challenge before Supreme Court was legislative--not interpretative--rule) (first brackets in original) (emphasis added). A fortiori the mere absence of a prior definitive agency pronouncement of the interpretation of direct or indirect advance cannot serve as sufficient proof for the legislative character of its subsequent articulation. We hold that the DOL in this case did no more than give a reasonable meaning to the notion of a direct or indirect advance in the course of exercising its enforcement authority under the regulations. The risk of loss test is an interpretation of those regulations and as such is exempt from the requirements of the APA. 40