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More on Today’s Opinion in Long Island Care at Home v. Coke

[Note: This recap was authored by Matthew Posivak, an Akin Gump summer associate and a student at the University of Pennsylvania Law School.]

This morning, the Court handed down its decision in Long Island Care at Home v. Coke, a case which came before the Court after the Second Circuit struck down a federal labor regulation that had been in operation for over thirty years. Although the opinion’s release has been long-awaited—the case has been bouncing around federal appellate courts since March 2003—the decision itself is hardly surprising, given that the regulation in question had not been successfully challenged since its inception in 1975. In an opinion authored by Justice Breyer, a unanimous Court reversed the Second Circuit and held that the regulation was enforceable.

The case was originally brought against petitioner Long Island Care at Home by respondent Evelyn Coke, a home health care aide who worked for petitioner for over twenty years without receiving overtime pay or minimum wage protection. Relying on Department of Labor (DOL) regulations that exempt domestic service workers employed by third parties from coverage under the Fair Labor Standards Act (FLSA), a federal district court dismissed her claim on the pleadings. On appeal, the Second Circuit reversed. It held that the DOL regulation was an “interpretative regulation,” rather than a “legislative regulation,” and thus not entitled to Chevron deference. Nor, the court of appeals continued, was the regulation entitled to Skidmore deference. As a result, the regulation was unforceable.

The case then made its first trip to the Supreme Court, which granted certiorari but remanded for the Second Circuit to reconsider its holding in light of a recently promulgated DOL memorandum which asserted that the exemption was a “legislative regulation” deserving of Chevron deference. However, the Second Circuit issued a per curiam opinion reaffirming its original holding. Explaining that the regulation was contained in a subpart labeled “Interpretations” – rather than in the “General Regulations” subpart in which the DOL expressly asserted its use of congressionally authorized rulemaking authority – the court of appeals maintained that that the exemption was not entitled to either Chevron or Skidmore deference. Following the Second Circuit’s re-affirmance, Long Island Care at Home appealed and the Court again granted cert.

Today the Court reversed. Despite some legislative history indicating that Congress intended the DOL to promulgate rules extending FLSA’s reach, the Court first held that the third-party exemption was a reasonable exercise of the broad rule-making authority Congress granted to the DOL. Reasoning that Congress may have wanted to rely on the DOL’s expertise, Justice Breyer emphasized that “[s]atisfactory answers to [third-party exemption] questions may well turn upon the kind of thorough knowledge of the subject matter and ability to consult at length with affected parties that an agency, such as the Department of Labor, possesses.” As such, he continued, “it is consequently reasonable to infer (and we do infer) that Congress intended its broad grant of definitional authority to the Department to include the authority to answer these kinds of questions.”

The Court then turned to an apparent conflict between the third-party regulation and a provision in the “General Regulations” that defines a “domestic service worker” as someone working in a private home of the person by whom he or she is employed. The third-party regulation, rather than the general regulation, governs Coke’s claim, the Court concluded, because the “sole purpose of the third-party regulation . . . is to explain how the companionship services exemption applies to persons employed by third-party entities.” Interestingly, the Court did not analyze how this conflict affects the determination of whether the regulation was an intended exercise of the DOL’s authority to fill gaps in the statute. Instead, the Court relied upon the recently issued DOL memorandum, which maintained that the third-party exemption deserved Chevron deference because it was promulgated to affect individual rights and obligations.

Finally, the Court held that although the third-party exemption was labeled an “Interpretation,” it was in fact entitled to deference. The Court explained that when – as in this case – “an agency rule sets forth important individual rights and duties, where the agency focuses fully and directly upon the issue, where the agency uses full notice-and-comment procedures to promulgate a rule, where the resulting rule falls within the statutory grant of authority, and where the rule itself is reasonable, then a court ordinarily assumes that Congress intended it to defer to the agency’s determination.”