Court Opinion

ID: 2747436
Source: CourtListenerOpinion
Date Created: 2014-10-31 21:02:06.110266+00
Date Added: 2024-06-11T09:33:42.294943
License: Public Domain

UNITED STATES DISTRICT COURT
                                FOR THE DISTRICT OF COLUMBIA

REYMUNDO Z. MENDOZA, et al.,

                          Plaintiffs,
                                                            Civil Action No. 11-1790 (BAH)
                          v.
                                                            Judge Beryl A. Howell

 THOMAS E. PEREZ, in his official capacity,
et al.,

                          Defendants,

                          v.

WESTERN RANGE ASSOCIATION, et al.,

                          Intervenor-Defendants.

                                        MEMORANDUM OPINION

        This case is before the Court to determine the appropriate remedy to address the

procedural violation of the Administrative Procedure Act (“APA”), 5 U.S.C. § 553, by the

defendants Thomas E. Perez1, in his official capacity as Secretary of Labor, and the U.S.

Department of Labor (collectively, “Federal Defendants”). Pending before the Court is the

plaintiffs’ motion for a remedial order “setting a schedule for the [Federal Defendants] to initiate

and complete a rulemaking establishing terms and conditions of employment, including wages

and housing benefits, that employers participating in the H-2A visa program must offer to

sheepherders and open range livestock workers and a date on which the existing rules will be

vacated.” Pls.’ Mot. for Rulemaking Schedule and Vacatur (“Pls.’ Mot.”), ECF No. 49. For the

reasons discussed below, this motion is granted in part and denied in part.

1
 Thomas E. Perez is now the Secretary of the U.S. Department of Labor and, consequently, in accordance with
Federal Rule of Civil Procedure 25(d), Mr. Perez has been substituted as the named defendant. FED. R. CIV. P.
25(d).

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I.      BACKGROUND

        The factual and procedural history of this case will not be repeated here since this

background is fully set out in this Court’s prior Memorandum Opinion dismissing the suit for

lack of both Article III and prudential standing, under Federal Rule of Civil Procedure 12(b)(1),

and the D.C. Circuit’s reversal of that conclusion. See Mendoza v. Solis, 924 F. Supp. 2d 307,

310-15 (D.D.C. 2013), rev’d sub nom., Mendoza v. Perez, 754 F.3d 1002 (D.C. Cir. 2014).2 In

short, the plaintiffs are U.S. workers, who left their herding jobs by May, 2011, due to “the

substandard wages and working conditions they attribute to the easy availability of foreign

herders.” Mendoza, 754 F.3d at 1007. They challenged two Training and Employment

Guidance Letters (“TEGLs”), which were published, on August 4, 2011, in the Federal Register

by the Federal Defendants to implement a foreign worker visa program, under 8 U.S.C. §

1188(a)(1). Id. at 1007-08. The TEGLs “establish[ed] the minimum wages and working

conditions employers must offer U.S. sheepherders, goatherders, and open-range (cattle) herders

before hiring foreign herders.” Id. at 1007.

        The plaintiffs successfully argued before the D.C. Circuit that the challenged TEGLs

“were subject to the notice and comment requirements [of the APA] because they possess all the

hallmarks of a legislative rule,” by “chang[ing] the regulatory scheme for herding operations.”

Id. at 1024-25. Specifically, absent the TEGLs, visa petitions for foreign herders “would be

subject to the standards found in 20 C.F.R. part 655, which would, to take only a few examples,

require employers to pay herders the higher of the AEWR, the prevailing wage, or the minimum

wage, keep track of herders’ hours, and pay herders at least twice a month. The TEGLs, on the

2
  The D.C. Circuit found that “[e]ven though the plaintiffs have not worked as herders since 2011 and may not have
applied for specific herder jobs since that time,” they met the standing requirements because they “have affirmed
their desire to work as herders and stated their intention to do so if wages and working conditions improve.”
Mendoza, 754 F.3d at 1013.

                                                        2
other hand, require employers to pay only the higher of the prevailing wage rate or minimum

wage, exempt employers from recording herders’ hours actually worked, and allow employers to

pay employees once monthly upon mutual agreement between employer and worker.” Mendoza,
754 F.3d at 1024-25 (citing TEGL No. 15-06, 76 Fed. Reg. at 47, 244-46; TEGL No. 32-10, 76

Fed. Reg. at 47, 257-59).

        The D.C. Circuit held that “the Department of Labor violated the Administrative

Procedure Act by promulgating [the TEGLs] without providing public notice and an opportunity

for comment,” and remanded the case to this Court “to craft a remedy to the APA violation.” Id.

at 1025. To fashion an appropriate remedy, the Court directed consideration of “various factors

including whether vacating the TEGLs would have a disruptive effect on the herding industry

and how quickly the Department of Labor might be able to promulgate, pursuant to the

procedural requirements of the APA, new H-2A regulations for herding operations.” Id. (citing,

for comparison, Elec. Privacy Info. Ctr. v. U.S. Dep’t of Homeland Sec., 653 F.3d 1, 8 (D.C. Cir.

2011) (where agency “failed to conduct a notice-and-comment rulemaking,” remand was

necessary, but “[b]ecause vacating the present rule would severely disrupt an essential security

operation,” rule was not vacated and agency was admonished “to act promptly on remand to cure

the defect in its promulgation”).

        Following the D.C. Circuit’s issuance of its opinion, and even before the mandate issued

remanding the case, this Court directed the parties to “submit a joint status report . . . that either:

(1) proposes an agreed upon remedy for the APA violation or (2) proposes a briefing schedule

that will address the various factors the Court should consider in crafting a remedy.” Minute

Order, September 2, 2014. In response, the parties indicated that, although they agreed

                                                   3
“that the Department of Labor must undertake notice-and-comment rulemaking to replace the

[TEGLs] invalidated in this case,” they disagreed on the schedule necessary to complete that

agency action and whether the TEGLs should be vacated. Jt. Status Report, at 1, ECF No. 48.

Consequently, the Court entered a briefing schedule to enable the parties to set out more fully

their positions on the appropriate timing and elements of the remedy. Minute Order, September

10, 2014. Briefing on the plaintiff’s motion for an order setting a schedule for rulemaking and

vacatur is now complete.

II.    DISCUSSION

       The Court’s present task is to “craft a remedy to the APA violation.” Mendoza, 754 F.3d

at 1025. The parties appear to agree on key elements of this remedy, including that the Federal

Defendants should (1) publish a Notice of Proposed Rulemaking to replace the procedurally

defective TEGLs; (2) solicit public comment; (3) respond to significant comments; (4) ensure

full inquiry and analysis of relevant economic and policy issues; (5) comply with interagency

processes to ensure appropriate oversight by the Office of Information and Regulatory Affairs

(“OIRA”) and consultation with pertinent agencies, such as the Department of Agriculture; and,

finally, (6) generally comply with all applicable legal requirements, including initial and final

regulatory flexibility analyses, as required by 5 U.S.C. §§ 603(a), 604(a)(5). See generally Pls.’

Mem. Supp. of Pls.’ Mot. for Rulemaking Schedule and for Vacatur (“Pls.’ Mem.”), ECF No.

49-1; Defs.’ Mem. in Resp. to Pls.’ Mot. (“Defs.’ Resp.”), ECF No. 51; Def.-Int’rs.’ Mem.

Partial Opp’n to Pls.’ Mot. (“Def.-Int’rs’ Mem.”), ECF No. 50. They disagree on the time table

for completion of this process and whether, at the end of the process, vacatur of the TEGLs is

required. These two areas of disagreement are addressed separately below.

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        A.        Time Table For Notice and Comment Rulemaking

        The Federal Defendants indicate that work is already underway on a new rule to replace

the invalid TEGLs, including preparation of a “proposed methodology for determining wage

rates in the open range production of livestock along with an accompanying cost-benefit analysis

for OIRA review” and development of “standards for determining recruitment of United States

workers and housing requirements for workers.” Defs.’ Resp. at 5. The plaintiffs request that

this work be fully completed and a final rule be placed in effect within 150 days of this Court’s

order. Pls.’ Mem. at 2. Specifically, the plaintiffs seek a remedial order that (1) directs the

Federal Defendants to complete the notice and comment rulemaking and publish a final rule

within 120 days of this Court’s Order, which would be about March 2015; and (2) sets an

effective date for the final rule that is 30 days after the date of the publication, which would be

about April 2015. See id. at 2-3. According to the plaintiffs, this concededly “rapid

rulemaking,” id. at 3, on “[a]n expeditious schedule,” id. at 4, is necessary because “each day

that the TEGLs are in effect, they impose a legally-invalid regime that alters workers’

substantive rights,” by depressing U.S. workers’ wages and working conditions, id. at 3-4,

particularly since the case has already been underway for an “extended period of time,” id. at 4.

        The Federal Defendants do not appear to resist the plaintiffs’ request for a remedial order

that outlines a rulemaking schedule. See Defs.’ Resp. at 9 (asking only that “the agency should

be granted leave to complete the required rulemaking process in conformity with the time frame

outlined above with a final rule for publication by November 2015”).3 Rather, they contend that

3
  The defendant-intervenors contend that no rulemaking schedule needs to be part of the Court’s remedial order
because the plaintiffs’ injury is addressed merely with the opportunity to comment on a proposed rule. Def.-Int’rs’
Mem. at 1 (“once Plaintiffs have been given an opportunity to comment on such procedures, their injury has been
remedied in full regardless of final adoption and DOL should not be forced to adopt a legislative rule on anyone’s
schedule but its own”). This Court disagrees. The D.C. Circuit certainly contemplated more extensive
consideration of remedial issues on remand, including a rulemaking schedule based upon “how quickly the

                                                         5
the expedited schedule proposed by the plaintiffs cannot be met “without compromising the

integrity of the notice and comment process and related statutory and executive order

requirements.” Defs.’ Resp. at 2. The Federal Defendants warn that imposition of such an

expedited schedule “may likely undercut the necessary economic study and consideration of

public comments that are fundamental aspects of the notice and comment process.” Id.

         In contrast to the plaintiff’s proposed schedule to complete final rulemaking and have a

new rule in effect within 150 days of this Court’s order, the Federal Defendants propose a

schedule that triples the length of time for rulemaking to up to 365 days from the date of the

remedial order. The Federal Defendants propose the alternative schedule of (1) “issuing in

March 2015 a notice of proposed rulemaking open to public comment,” id. at 2, which would

include an initial regulatory flexibility analysis, id. at 4; (2) 60 day comment period, id. at 4; (3)

“a sixty-day period for [Department of Labor (“DOL”)] to respond to public comments,” id. at 5;

and (4) a final 90 day period for DOL to “provide a final economic analysis for OIRA’s

assessment and circulation to other agencies for comment,” id.; with anticipated completion of

the entire rulemaking process in November 2015, id. at 3, which would be seventeen months

from the issuance of the D.C. Circuit’s decision invalidating the TEGLs.

         The plaintiffs contest the Federal Defendants’ position that more time than 120 days is

needed to complete the rulemaking and assert that “DOL is capable of issuing a final rule within

the time limit proposed by plaintiffs.” Pls.’ Mem. at 4.4 They note, first, that a 60-day comment

period could be fit into their 120-day proposed schedule but, if not, Executive Orders 12,866 and

Department of Labor might be able to promulgate . . . new H-2A regulations for herding operations.” Mendoza, 754
F.3d at 1025.
4
  The plaintiffs use as a model for their 120-day timeframe the rulemaking schedule imposed in another case, which
involved a single issue of wages in contrast to the multiple issues to be addressed in the new rule. Pls.’ Mem. at 3
(discussing Comite De Apoyo A Los Trabajadores Agricolas v. Solis (CATA), No. 09-240, 2011 WL 2414555, at *5
(E.D. Pa. June 16, 2011)). Contrary to the plaintiffs’ view, the Court finds that “the differences in the substantive
scope of the rule in CATA and the rule at issue here,” Pls.’ Reply at 4, render the CATA case and schedule
distinguishable from any schedule to be imposed on the rulemaking here.

                                                         6
13,563 do not require, and only recommend, this length of a public comment period. Id. at 5

(citing Exec. Order 13,563, Improving Regulation and Regulatory Review, 76 Fed. Reg. 3821, §

2(b) (Jan. 18, 2011); Exec. Order 12,866, Regulatory Planning and Review, 58 Fed. Reg. 51,735,

§ 6(a) (Sept. 30, 1993)). Moreover, while the plaintiffs do not dispute that a new rule would

constitute “significant regulatory action,” subject to OIRA review under Executive Order 12,866,

they contend that the 90-day period provided in the Executive Order for OIRA review must

“yield[] to a contrary court order.” Id. at 6.5 In other words, the plaintiffs essentially

recommend trimming the time for public comment or for interagency review as necessary to

meet a four-month time period to turn-around a new final rule.

        Short-cutting the time for adequate notice and comment rulemaking would be short-

sighted and end up extending, rather than expediting, the process. The Federal Defendants

explain that “the entire herding special procedure is subject to a new rulemaking, including

wages, housing, recruitment, and related elements governing the employment of herders.” Id. at

9. The herder occupations at issue in the TEGLs are fairly unique and the “TEGLs’ guidelines

have been in effect for over twenty years.” Defs.’ Opp’n to Pls.’ Mot. for Summ. J. at 8, ECF

No. 33. Hence, this rulemaking process requires the Federal Defendants to develop a

methodology for measuring an appropriate wage regime involving the open range production of

livestock occupations as well as the appropriate standards for other components, such as housing,

that need to be addressed in the new rule. Thus, the Federal Defendants are correct that “DOL’s

front-end deliberations” are critical for producing a new rule containing “well formulated”

5
  The plaintiffs further criticize the Federal Defendants’ proposed schedule for being “five months longer than
DOL’s earlier estimate of the time necessary to adopt a final rule.” Pls.’ Reply at 2, ECF No. 52. Indeed, the
Federal Defendants previously stated that they would need “no less than 270 days to complete full notice and
comment rulemaking,” while consistently maintaining that the plaintiffs’ timeframe of 120 days “is too short to meet
the agency’s obligations under the statute and controlling executive orders.” Defs.’ Opp’n to Pls.’ Mot. for Summ.
J. at 9, ECF No. 33. While a schedule of 270 days would be preferable to the longer schedule now proposed, the
Court appreciates that the prior reference to “no less than 270 days” (emphasis added) was a minimum time frame.

                                                         7
program goals and “prevailing domestic labor market conditions,” as well as an adequate

explanation for “its chosen methodology for setting wage rates for herding occupations.” Defs.’

Resp. at 6.

       Given the length of time the case has been pending, the number of issues to be resolved

as part of the refashioning of the special procedures for herders, as well as the complexity of the

factors involved in the rulemaking and the significance of this issue to the effected workers, this

Court puts a premium on ensuring that the Federal Defendants have sufficient time to get the

proposed new rule right to avoid the risk that a “poorly formulated rule would need to be

withdrawn in the face of significant public comments, which would add more delay to the

process.” Id. The Court takes seriously the Federal Defendants’ caution that the “Plaintiffs’

desire for a fast rulemaking should not undercut the integrity and legal defensibility of the

planned rulemaking.” Id. The Federal Defendants do not appear to be dragging their heels but

have already begun the predicate work necessary to be able to promulgate a proposed rule that

complies with legal and regulatory requirements, and is based on sound methodology to

withstand the scrutiny of both the public and the interagency review process. The plaintiffs’

proposed schedule would result in significant compression of the time permitted to prepare the

proposed rule or to obtain public comment, or both, when important work is being performed

during each period outlined by the Federal Defendants.

       At the same time, the Court recognizes that the schedule proposed by the Federal

Defendants is very generous, or what the plaintiffs characterize as “maximalist.” Pls.’ Reply at 2.

Therefore, imposition of dates certain for completion of the rulemaking process should not pose

any difficulty. Consequently, the Court adopts the schedule as proposed by the Federal

Defendants and will enter a remedial order containing a rulemaking schedule that requires the

                                                 8
Federal Defendants to issue a Notice of Proposed Rulemaking by March 1, 2014, and a final rule

by November 1, 2015.

       The plaintiffs further request that the Federal Defendants “make the final rule effective

30 days after its publication in the Federal Register,” noting that this time frame comports with

the APA requirement, under 5 U.S.C. § 553(d), that “[t]he required publication or service of a

substantive rule shall be made not less than 30 days before its effective date.” Pls.’ Mem. at 6.

With this request, the plaintiffs seek to avoid any lengthy delay by the Federal Defendants in the

new rule’s effective date, citing “past DOL practice under similar circumstances.” Id. The

Federal Defendants and defendant-intervenors raise no objection to this aspect of the plaintiffs’

request, which appears to be eminently reasonable given the time afforded the Federal

Defendants to issue a new final rule. See Pls.’ Reply at 1 (“Neither DOL nor intervenors have

specifically opposed an order requiring that a final rule become effective within 30 days after the

rule’s publication.”). Thus, the remedial order in this case shall direct that the effective date of

the new rule shall be no later than 30 days after the rule’s publication, or no later than December

1, 2015, whichever is earlier.

       B.      Vacatur of TEGLs

       The plaintiffs request that the Court order “that the invalid TEGLs be vacated 150 days

from the date of the Court’s order to coincide with the proposed effective date of the new final

rule.” Pls.’ Mem. at 2. In other words, under the plaintiffs’ proposed rulemaking schedule, the

TEGLs would remain in effect until the effective date of the new rule and “vacatur and the

effective date would be simultaneous.” Pls.’ Reply at 9. The Federal Defendants and defendant-

intervenors incorrectly construe the plaintiffs’ request to be for an automatic vacatur after 150

days of the Court’s remedial order, see Defs.’ Resp. at 10; Def.-Int’rs’ Mem. at 3-4, but the

                                                  9
plaintiffs do “not seek vacatur if ‘DOL has not adopted a rule’ by the deadline provided by this

Court; they seek vacatur coincident with the effective date of the final rule.” Pls.’ Reply at 9.

While the plaintiffs seek an earlier date for the new rule’s effectiveness, their request for vacatur

of the TEGLs is tied to their proposed timing of the new rule becoming effective. Thus, they

contend that “vacatur would have no disruptive effect because it would coincide with issuance of

the final rule.” Pls.’ Mem. at 9; see also Pls.’ Reply at 12 (“Defendants point to no disruptive

effects of vacating the TEGLs on a date that coincides with the effective date of the new final

rule.”).

           Furthermore, the plaintiffs contend that vacatur of the TEGLs is important to “mak[e]

clear that they have no further legal force or effect” and “ensur[e] that DOL does not continue to

rely on the TEGLs as a source of authority in the event that its rulemaking fails to address each

aspect of herder certifications once governed by the TEGLs.” Pls.’ Mem. at 7; see also Pls.’

Reply at 9-10 (“the purpose of vacatur in plaintiffs’ proposal is to ensure that the TEGLs are

wiped from the books once a replacement rule is in effect”).

           The Federal Defendants’ opposition to vacatur of the TEGLs is limited to any vacatur

“while DOL undertakes the notice and comment rulemaking process for a replacement rule to be

completed by November 2015.” Likewise, the defendant-intervenors’ objection to the plaintiffs’

vacatur request is based on the misunderstanding that this request is “that the TEGLs should

expire on a date certain, regardless of whether DOL has placed a new, permanent procedure in

their place.” Def.-Int’rs’ Mem. at 6. As the plaintiffs point out, “they knock down a straw man

by focusing on the disruptive effect of vacating the TEGLs before a new rule becomes effective,

a scenario that will not occur under plaintiffs’ proposal.” Pls.’ Reply at 2 (emphasis in original).

                                                  10
The Federal Defendants and defendant-intervenors do not express any problem with vacatur of

the TEGLs upon the effective date of the new rule.

       The law in this Circuit directs consideration of two principal factors in deciding “whether

to vacate a flawed agency action”: “(1) ‘the seriousness of the . . . deficiencies’ of the action,

that is, how likely it is ‘the agency will be able to justify’ its decision on remand; and (2) ‘the

disruptive consequences of vacatur.’” Heartland Reg’l Med. Ctr. v. Sebelius, 566 F.3d 193, 197

(D.C. Cir. 2009) (quoting Fox Television Stations, Inc. v. FCC, 280 F.3d 1027, 1048-49,

modified on reh’g on other ground, 293 F.3d 537 (D.C. Cir. 2002)) (internal quotations,

brackets, and citations omitted); see also Allied-Signal, Inc. v. Nuclear Regulatory Comm’n, 988
F.2d 146, 150-151 (D.C. Cir. 1993)). Application of these factors in this case militates strongly

in favor of vacatur of the TEGLs upon the effective date of the new rule, as requested by the

plaintiffs. First, the failure of the Federal Defendants to engage in notice and comment is a

fundamental procedural flaw that frequently requires vacatur of the invalid agency action.  Allina

Health Servs. v. Sebelius, 746 F.3d 1102, 1110-11 (D.C. Cir. 2014) (“deficient notice is a

‘fundamental flaw’ that almost always requires vacatur” (quoting Heartland Reg’l Med. Ctr. v.

Sebelius, 566 F.3d at 199)); In re Long-Distance Tel. Serv. Fed. Excise Tax Refund Litig., 853 F.

Supp. 2d 138, 144-145 (D.D.C. 2012) (“When notice-and-comment is absent, the Circuit has

regularly opted for vacatur”) (citing Sprint Corp. v. Fed. Commc’n Comm’n, 315 F.3d 369 (D.C.

Cir. 2003) (noting that the Circuit has “opted for vacatur recently with some regularity” when

notice-and-comment is absent)). This is particularly true where, as here, the timing of the

vacatur is scheduled in a manner to avoid any disruptive consequences.

       Accordingly, the remedial order shall direct that the TEGLs be vacated upon the effective

date of the new rule.

                                                  11
III.   CONCLUSION

        The plaintiffs’ motion for a rulemaking schedule and for vacatur is granted in part and

denied in part. As the plaintiffs request, the Court will enter a remedial order that: (1) establishes

a rulemaking schedule, although on a time frame that differs from the plaintiffs’ proposed

schedule; (2) directs the Federal Defendants to publish a Notice of Proposed Rulemaking by

March 1, 2014, and a final rule by November 1, 2015; (3) sets the effective date of the new rule

to be no later than 30 days after the rule’s publication or December 1, 2015, whichever is earlier;

and (4) vacates, upon the effective date of the new rule, the TEGLs successfully challenged in

this action. The plaintiffs’ motion is denied in other respects.

       An order consistent with this Memorandum Opinion will be contemporaneously entered.

       Date: October 31, 2014

                                                                        Digitally signed by Hon. Beryl A.
                                                                        Howell
                                                                        DN: cn=Hon. Beryl A. Howell,
                                                                        o=U.S. District Court for the
                                                                        District of Columbia, ou=United
                                                                        States District Court Judge,
                                                                        email=Howell_Chambers@dcd.us
                                                                        courts.gov, c=US
                                                                        Date: 2014.10.31 15:47:44 -04'00'
                                                      __________________________
                                                      BERYL A. HOWELL
                                                      United States District Judge

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