Avoiding Mead: the problem with unanimity in Long Island Care at Home, Ltd. v. Coke.

• Author: Perry, Michael F.

One of the central questions in administrative law is the appropriate level of deference courts should give to agency interpretations of statutorily conferred authority. The Supreme Court announced its most recent major doctrinal development in this area in United States v. Mead Corp., (1) a 2001 opinion in which the Court held that an "administrative implementation of a particular statutory provision" was entitled to deference if the agency was self-consciously exercising congressionally delegated authority to "make rules carrying the force of law." (2) In redefining the boundaries of the well-established Chevron (3) doctrine, Mead soon became the subject of significant confusion and academic discussion, (4) but the Court has not clarified its holding in the seven years since announcing the decision. Last term, in Long Island Care at Home, Ltd. v. Coke, (5) the Court gave deference to a Department of Labor decision to exempt "companionship services" employees from minimum wage and overtime compensation benefits. (6) At first glance, Long Island Care seems to be a straightforward and inconsequential opinion that invokes Mead to reach its disposition. In examining the opinion's reasoning, however, it is evident that the Court avoided a full discussion of Mead for the sake of unanimity, thus making Long Island Care a notable example of Chief Justice Roberts's announced preference for narrow and unanimous opinions. More importantly, Long Island Care demonstrates that narrowing an opinion for the sake of unanimity is undesirable when it delays much needed doctrinal clarification and development.

In 1913, President William Howard Taft signed a bill authorizing the creation of the Department of Labor, which was designed in part "to foster, promote, and develop the welfare of the wage earners of the United States." (7) Twenty-five years later, Congress enacted the Fair Labor Standards Act, which created the Wage and Hour Division within the Department of Labor and codified worker protections such as minimum wage and overtime pay. (8) In 1974, as part of a lengthy series of amendments designed to increase the scope of wage protections, (9) Congress brought most domestic service employees under the umbrella of the Act, but exempted workers who provide "companionship services" to individuals who cannot care for themselves. (10) Congress left the scope of this exemption ambiguous, indicating that the Department of Labor should define "domestic service employment" and "companionship services" through the promulgation of regulations. (11)

The Department responded to this congressional mandate by issuing a series of regulations the following year. The agency defined "companionship services" as "services which provide fellowship, care, and protection for a person who ... cannot care for his or her own needs." (12) In addition, the Department issued a "General Regulation" defining "domestic service employment" to include "services of a household nature performed by an employee in or about a private home ... of the person by whom he or she is employed." (13) Concurrently, in a regulation seemingly inconsistent with the General Regulation, the Department determined that workers who provide domestic services while employed by third parties are exempt from the pay protections of the Fair Labor Standards Act. (14) Justice Breyer later dubbed this the "third-party regulation." (15)

In April 2002, Evelyn Coke brought a lawsuit in the United States District Court for the Eastern District of New York against her former employer, Long Island Care at Home, Ltd., challenging these Department of Labor regulations. (16) Coke sought compensation for overtime and minimum wage pay she had been denied while working for several years as a "home healthcare attendant" for Long Island Care. (17) The District Court granted Long Island Care's motion for judgment on the pleadings and upheld both of the contested regulations. (18)

The Second Circuit affirmed in part and vacated in part, giving Chevron deference to the General Regulation and striking down the third-party regulation. (19) According to the Second Circuit, the third-party regulation was an "interpretive regulation" (20) that had not been promulgated as a conscious exercise of explicitly granted congressional authority, thus precluding Chevron deference on review and warranting less deferential Skidmore review. (21) Under this lower standard, the Second Circuit rejected the agency's rationale supporting its third-party regulation, holding instead that the regulation was "inconsistent with Congress's likely purpose in enacting the 1974 amendments." (22)

The Supreme Court granted certiorari, (23) but vacated and remanded the case before oral argument to give the Second Circuit an opportunity to reconsider its decision in light of a recently published Department of Labor "Wage and Hour Advisory Memorandum." (24) Although the Department had considered modifying the third-party regulation in the past, (25) the agency indicated in the Advisory Memorandum that it considered the third-party regulation legally binding. (26) The Second Circuit found this memorandum unpersuasive and again decided to strike down the third-party regulation, (27) after which the Supreme Court granted certiorari for the second time. (28)

Justice Breyer, writing for a unanimous Court, authored an opinion reversing the Second Circuit's decision and holding that the Department of Labor's third-party regulation was entitled to Chevron deference. (29) The Court acknowledged that the General Regulation conflicted with the third-party regulation but deferred to the agency's stated position in the Advisory Memorandum that the third-party regulation governed, even though this memorandum was written as a result of Coke's lawsuit. (30) The Court noted functional reasons for adopting this deferential stance, including the potential impact on other groups of employees, but also cited its longstanding practice of deferring to agency interpretations of their own regulations. (31)

The Court disagreed with the Second Circuit's finding that the third-party regulation was an interpretive regulation undeserving of deference. (32) The agency's treatment of the regulation as binding seemed more persuasive to the Court than the categorical question of whether it was an interpretive or legislative regulation. (33) The Court reasoned that the regulation was binding because it directly governed "the conduct of members of the public" and because Congress intended the Department of Labor to fill the statutory gap left by the undefined terms in the Fair Labor Standards Act. (34)

The opinion concluded with a discussion of the notice-and-comment procedure undertaken before the adoption of the third-party regulation. Coke had argued that this procedure was defective because the final rule was not a logical outgrowth of the proposed rule. (35) The Second Circuit did not reach this question, but implied in its original opinion that the Department failed to provide a sufficient explanation for departing from its announced intention to enact a third-party regulation that would bring employees of third parties under the wage protections of the Fair Labor Standards Act. (36) The Supreme Court disagreed, however, and found that the...