N.C. Growers' Ass'n, Inc. v. United Farm Workers

• Decision Date: 21 December 2012
• Docket Number: No. 11–2235.,11–2235.
• Court: U.S. Court of Appeals — Fourth Circuit
• Parties: NORTH CAROLINA GROWERS' ASSOCIATION, INCORPORATED; National Christmas Tree Association; Florida Fruit & Vegetable Association; Virginia Agricultural Growers Association, Incorporated; Snake River Farmers Association; National Council of Agricultural Employers; North Carolina Christmas Tree Association; North Carolina Pickle Producers Association; Florida Citrus Mutual; North Carolina Agribusiness Council, Incorporated; Maine Forest Products Council; Alta Citrus, LLC; Everglades Harvesting & Hauling, Incorporated; Desoto Fruit & Harvesting, Incorporated; Forest Resources Association; Titan Peach Farms, Incorporated; H–2A USA, Incorporated; Overlook Harvesting Company, LLC, Plaintiffs–Appellees, v. UNITED FARM WORKERS; James Cease; Mario Centeno–Rodriguez; Juan Cisneros–Ibarra; Luis Enrique Cisneros–Ibarra; Reymundo Gutierrez; Carlos Luis Guzman–Centeno; Jose Raul Guzman–Centeno; Abelardo Hernandez–Aguas; Gregorio Huertas–Samano; Pedro Ibarra–Avila; Atanacio Lugo–Rincon; Obdula Maldonado–Abellaneda; Miguel Angel Olguin–Hernandez; Arturo Olguin–Monroy; Omera Rodriguez–Guzman; Desiderio Tovar–Zapata; Alejandro Trejoleon, Intervenors/Defendants–Appellants, and Hilda L. Solis, in her official capacity as United States Secretary of Labor; United States Department of Labor; Janet Napolitano, in her official capacity as United States Secretary of Homeland Security; United States Department of Homeland Security, Defendants Howard Berman; Judy Chu; George Miller; Lynn Woolsey, Amici Supporting Appellants USA Farmers, Inc., Amicus Supporting Appellees.

702 F.3d 755

NORTH CAROLINA GROWERS' ASSOCIATION, INCORPORATED; National Christmas Tree Association; Florida Fruit & Vegetable Association; Virginia Agricultural Growers Association, Incorporated; Snake River Farmers Association; National Council of Agricultural Employers; North Carolina Christmas Tree Association; North Carolina Pickle Producers Association; Florida Citrus Mutual; North Carolina Agribusiness Council, Incorporated; Maine Forest Products Council; Alta Citrus, LLC; Everglades Harvesting & Hauling, Incorporated; Desoto Fruit & Harvesting, Incorporated; Forest Resources Association; Titan Peach Farms, Incorporated; H–2A USA, Incorporated; Overlook Harvesting Company, LLC, Plaintiffs–Appellees,

v.UNITED FARM WORKERS; James Cease; Mario Centeno–Rodriguez; Juan Cisneros–Ibarra; Luis Enrique Cisneros–Ibarra; Reymundo Gutierrez; Carlos Luis Guzman–Centeno; Jose Raul Guzman–Centeno; Abelardo Hernandez–Aguas; Gregorio Huertas–Samano; Pedro Ibarra–Avila; Atanacio Lugo–Rincon; Obdula Maldonado–Abellaneda; Miguel Angel Olguin–Hernandez; Arturo Olguin–Monroy; Omera Rodriguez–Guzman; Desiderio Tovar–Zapata; Alejandro Trejoleon, Intervenors/Defendants–Appellants,andHilda L. Solis, in her official capacity as United States Secretary of Labor; United States Department of Labor; Janet Napolitano, in her official capacity as United States Secretary of Homeland Security; United States Department of Homeland Security, Defendants

Howard Berman; Judy Chu; George Miller; Lynn Woolsey, Amici Supporting Appellants

USA Farmers, Inc., Amicus Supporting Appellees.

No. 11–2235.

United States Court of Appeals,Fourth Circuit.

Argued: Oct. 23, 2012.

Decided: Dec. 21, 2012.

ARGUED: Naomi Ruth Tsu, Southern Poverty Law Center, Atlanta, Georgia, for Appellants. Robin Elizabeth Shea, Constangy, Brooks & Smith, LLC, Winston–Salem, North Carolina, for Appellees. ON BRIEF:Andrew H. Turner, Buescher, Goldhammer & Kelman, Denver, Colorado; Gregory S. Schell, Migrant Farm–Worker Justice Project, Lake Worth, Florida; Robert J. Willis, Law Office of Robert J. Willis, Raleigh, North Carolina, for Appellants. William R. Loftis, Jr., Constangy, Brooks & Smith, LLC, Winston–Salem, North Carolina, for Appellees. Jonathan G. Cedarbaum, Lillian Howard Potter, Annie L. Owens, Wilmer Cutler Pickering Hale and Dorr, LLP, Washington, D.C., for Amici Supporting Appellants. Leon R. Sequeira, Seyfarth Shaw LLP, Washington, D.C., for Amicus Supporting Appellees.

Before WILKINSON, KEENAN, and DIAZ, Circuit Judges.

Affirmed by published opinion. Judge KEENAN wrote the opinion, in which Judge WILKINSON and Judge DIAZ joined. Judge WILKINSON wrote a separate concurring opinion.

OPINION

BARBARA MILANO KEENAN, Circuit Judge:

This appeal involves a regulatory action by the Department of Labor (the Department), which suspended various regulations for temporary agricultural workers and reinstated other prior regulations. We primarily consider: (1) whether the Department's action constituted “rule making” under the Administrative Procedure Act (the APA), 5 U.S.C. §§ 553, and 701 through 706; and (2) if the action was “rule making,” whether the Department satisfied the APA's “notice and comment” requirements.

We conclude that the district court correctly determined that the Department: (1) engaged in “rule making” when reinstating the prior regulations; and (2) failed to comply with the notice and comment procedures mandated by the APA. We also conclude that the Department did not invoke the “good cause exception” provided by the APA to excuse its failure to comply with these notice and comment requirements. Accordingly, we hold that the district court did not err in invalidating the Department's action on the ground that it was arbitrary and capricious.

I.

1. The 1987 Regulations

In 1986, Congress passed the Immigration Reform and Control Act amendments to the Immigration and Nationality Act, which permitted the temporary admission of foreign workers to engage in agricultural jobs in the United States (the H–2A program). See8 U.S.C. § 1101(a)(15)(H)(ii)(a). In 1987, the Department promulgated regulations governing the H–2A program to effectuate Congress' intent that domestic agricultural workers (U.S. workers) be given preference over foreign agricultural workers (H–2A workers), and that the employment of H–2A workers would not adversely affect the wages or working conditions of U.S. workers (collectively, the 1987 regulations, or the 1987 rule). See Labor Certification Process for the Temporary Employment of Aliens in Agriculture; Adverse Effect Wage Rate Methodology, 54 Fed.Reg. 28,037 (July 5, 1989); Labor Certification Process for the Temporary Employment of Aliens in Agriculture and Logging, 52 Fed.Reg. 20,496 (June 1, 1987). An agricultural employer seeking to participate in the H–2A program is required to apply with the Department and certain other federal agencies, certifying that there are insufficient U.S. workers available to perform work for the employer and agreeing to abide by requirements regarding wages, housing, and working conditions. See52 Fed.Reg. at 20,513–20,516.

The 1987 regulations required, among other things, that participating employers pay H–2A workers and similarly-situated U.S. workers a wage rate calculated by a formula, which is known as an “adverse effect wage rate” (AEWR). See54 Fed.Reg. at 28,038. AEWRs are minimum hourly wage rates that must be paid under the H–2A program to foreign and U.S. agricultural workers, and are intended to ensure that H–2A workers do not have an adverse effect on the wages and working conditions of similarly-employed U.S. workers. Feller v. Brock, 802 F.2d 722, 724 (4th Cir.1986); 54 Fed.Reg. at 28,038. With only minor amendments, such as the annual recalculations of the AEWRs, the 1987 regulations remained in effect until January 16, 2009.

2. The 2008 Regulations

In February 2008, the Department published a notice of proposed rule making, stating that the agency intended to make substantial changes to the H–2A program. Temporary Agricultural Employment of H–2A Aliens; Modernizing the Labor Certification Process and Enforcement, 73 Fed.Reg. 8538 (Feb. 13, 2008). A 60–day comment period was provided, during which the Department received 11,000 comments. See Temporary Agricultural Employment of H–2A Aliens; Modernizing the Labor Certification Process and Enforcement, 73 Fed.Reg. 77,110, 77,111 (Dec. 18, 2008); Extension of Comment Period, 73 Fed.Reg. 16,243 (Mar. 27, 2008). A final rule was published in December 2008 and became effective on January 17, 2009 (collectively, the 2008 regulations, or the 2008 rule). See73 Fed.Reg. 77,110 (Dec. 18, 2008). The 2008 regulations changed the method by which AEWRs were calculated. ¹73 Fed.Reg. at 77,166–77,178. Many agricultural employers relied on the terms of the 2008 regulations when entering into labor and production contracts, and in making other business commitments for the 2009 growing season. There is no dispute that the 2008 regulations were validly promulgated.

The classification of foreign seasonal workers employed on Christmas tree farms also is at issue in this appeal. Under the Department's prior practice, such workers were defined as “agricultural” employees under the H–2A program, but as “non-agricultural,” “forestry” employees under the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201 through 219. The Department's distinction in this regard was material, because, among other things, persons “employed in agriculture” do not qualify to receive “overtime” pay under the provisions of the FLSA. 29 U.S.C. § 213(b)(12). Therefore, under the Department's prior practice, growers of Christmas trees not only were required to provide their H–2A workers with housing, meals, and transportation benefits set forth in the Immigration Reform and Control amendments to the Immigration and Nationality Act, but also were required to pay the H–2A workers for overtime hours worked.

In 2004, this Court found that the Department's position regarding the classification of H–2A workers on Christmas tree farms, adopted without rule making allowing notice and comment and without a formal adjudication, lacked any statutory foundation and was not a persuasive interpretation of the FLSA. On that basis, this Court invalidated the Department's determination. Dep't of Labor v. N.C. Growers Ass'n, 377 F.3d 345 (4th Cir.2004). In accordance with this precedent, the 2008 regulations defined H–2A workers on Christmas tree farms as “agricultural” employees for purposes of both the H–2A program and the FLSA. See73 Fed.Reg. at 77,201–77,202.

3. The 2009 Suspension

In March 2009, just two months after the 2008 regulations took effect, Hilda Solis, the newly-appointed Secretary of Labor, issued a “notice of proposed suspension” of the 2008 regulations (the 2009 Notice). Temporary Employment of H–2A Aliens in the United States, 74 Fed.Reg. 11,408 (Mar. 17, 2009). In the 2009 Notice, the Department proposed to suspend the 2008 regulations, during a nine-month period, for further review and reconsideration “in light of issues that have arisen since the publication of the [2008 regulations].” 74 Fed.Reg. at 11,408. The 2009 Notice also stated that during the period that the 2008 regulations would be suspended, the Department proposed “to reinstate on an interim basis” the 1987 regulations to avoid a “regulatory vacuum” in the H–2A program. Id.

The Department articulated various reasons in the 2009 Notice to support the proposed suspension and reinstatement, including: (1) a lack of agency resources to implement the 2008 regulations efficiently; (2) delays resulting from processing increased numbers of H–2A applications under the 2008 regulations, which volume was expected to impede the Department's performance of its statutory duty “to process H–2A applications within a strict timeframe”; (3) the Department's inability “to implement the sequence of operational events” required to...