Stellar It v. Scalia

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
PURDUE UNIVERSITY, et al.,
Plaintiffs,
v. Civ. Action No. 20-3006 (EGS)
EUGENE SCALIA, in his official
capacity as Secretary,
Department of Labor, et al.,
Defendants.
STELLAR IT, INC., et al.,
Plaintiffs,
v. Civ. Action No. 20-3175 (EGS)
EUGENE SCALIA, in his official
capacity as Secretary,
Department of Labor, et al.,
Defendants.
MEMORANDUM OPINION
Plaintiffs in these consolidated cases are a group of
academic institutions and companies in the healthcare,
immigration, and technology-related sectors that employ foreign
nationals throughout the United States. See Pls.’ Mem. Points
Authorities Supp. Mot. Prelim. Inj. APA Section 705 Stay
(“Purdue Pls.’ Mot.”), ECF No. 6 at 11, Purdue Univ. v. Scalia,
No. 20-cv-3006 (EGS) (Oct. 23, 2020); Pls.’ Mot. Prelim. Inj.
(“Stellar IT Pls.’ Mot.”), ECF No. 7-1 at 34-35, Stellar IT,
Inc. v. Scalia, No. 20-cv-3175 (EGS) (Nov. 9, 2020). 1 Plaintiffs
challenge a United States Department of Labor (“DOL” or “the
Department”) interim final rule entitled “Strengthening Wage
Protections for the Temporary and Permanent Employment of
Certain Aliens in the United States,” 85 Fed. Reg. 63,872 (Oct.
8, 2020) (“IFR”). See Purdue Pls.’ Mot., ECF No. 6 at 11-12;
Stellar IT Pls.’ Mot., ECF No. 7-1 at 10-11. The IFR updated the
computation of prevailing wage levels set for certain foreign
labor certification programs “to better reflect the actual wages
earned by U.S. workers similarly employed to foreign workers,”
85 Fed. Reg. at 63,872, thereby increasing the prevailing wage
rates for certain occupations “by as much as forty or fifty
percent,” Stellar IT Pls.’ Reply, ECF No. 11 at 1, Stellar IT,
Inc. v. Scalia, No. 20-cv-3175 (EGS) (Nov. 16, 2020). Plaintiffs
allege that Defendants violated the Administrative Procedure Act
(“APA”) in setting the higher wage rates because the DOL did not
provide advance notice and comment prior to promulgating the
IFR. See Purdue Pls.’ Mot., ECF No. 6 at 11-12; Stellar IT Pls.’
Mot., ECF No. 7 at 10-11.
Pending before the Court are the Purdue Plaintiffs’ motion
for partial summary judgment and Purdue Defendants’ cross-motion
1 When citing electronic filings throughout this Opinion, the
Court cites to the ECF page number, not the page number of the
filed document.
2
for partial summary judgment, as well as the Stellar IT
Plaintiffs’ motion for partial summary judgment and Stellar IT
Defendants’ cross-motion for partial summary judgment. Upon
consideration of the motions, the responses and replies thereto,
the applicable law, the IFR and materials cited therein, and the
entire record, the Court GRANTS the Purdue Plaintiffs’ motion
for partial summary judgment, ECF No. 6, and the Stellar IT
Plaintiffs’ motion for partial summary judgment, ECF No. 7.
I. Background
A. Statutory And Regulatory Background
The Immigration and Nationality Act (“INA”), 8 U.S.C. §
1101 et seq., allows for U.S. employers to apply for visas for
foreign workers to come to the United States either as
nonimmigrants for temporary employment under the H-1B visa
classification, or as immigrants to work on a permanent basis.
The IFR at issue in this consolidated case “changes the
computations used by the Secretary of Labor to establish the
prevailing wage for many job opportunities for which employers
seek foreign labor certification from” the DOL. Purdue Defs.’
Opp’n & Mot. Summ. J. (“Defs.’ Opp’n”), ECF No. 18 at 9.
1. H-1B Visas: Labor Condition Applications
The H-1B visa program permits employers to temporarily
employ foreign, nonimmigrant workers in specialty occupations.
See 8 U.S.C. § 1101(a)(15)(H). A specialty occupation is defined
3
as an occupation that requires “theoretical and practical
application of a body of highly specialized knowledge” and
“attainment of a bachelor’s or higher degree in a specific
specialty (or its equivalent) as a minimum for entry into the
occupation in the United States.” Id. § 1184(i)(1).
To participate in the H-1B program, employers must complete
a two-step process with respect to each foreign worker they wish
to hire. First, employers must submit to the DOL a Labor
Condition Application (“LCA”) identifying the specialty
occupation position at issue and confirming that they will
comply with the requirements of the program. See 8 U.S.C. §
1182(n)(1); 8 C.F.R. § 214.2(h)(4). In the LCA, the prospective
employer must attest, among other things, that it will pay the
nonimmigrant worker the greater of “the actual wage level paid
by the employer to all other individuals with similar experience
and qualifications for the specific employment in question,” or
“the prevailing wage level for the occupational classification
in the area of employment.” 8 U.S.C. § 1182(n)(1)(A)(i).
The DOL determines the prevailing wage as of the time of
the filing of the LCA. 20 C.F.R. § 655.731(a)(2). However, an
employer may not file an LCA more than six months prior to the
beginning date of the period of intended employment. 20 C.F.R. §
655.730(b). If there is no applicable collective bargaining
agreement “contain[ing] a wage rate applicable to the
4
occupation,” an employer may base the prevailing wage on one of
the following sources: a current wage as determined under the
Davis-Bacon Act or the McNamara-O’Hara Service Contract Act; an
independent authoritative source that satisfies the requirements
in 20 C.F.R. § 655.731(b)(3)(iii)(B); or another legitimate
source of wage data that satisfies the requirements in 20 C.F.R.
§ 655.731(b)(3)(iii)(C). Id. “In the absence of any of these
sources, the [DOL’s] National Prevailing Wage Center (‘NPWC’) (a
component of the Office of Foreign Labor Certification (‘OFLC’))
will derive the appropriate prevailing wage from the Bureau of
Labor Statistics Occupational Employment Statistics (‘OES’)
Survey.” Defs.’ Opp’n, ECF No. 18 at 11. An LCA is valid for the
period of employment stated in the LCA, but in no event longer
than three years. 20 C.F.R. § 655.750(a).
Second, after the DOL certifies the LCA, the employer must
then file an H-1B visa petition with the U.S. Department of
Homeland Security (“DHS”) on behalf of the alien worker, which
shows that the proffered position satisfies the statutory and
regulatory requirements. 8 U.S.C. § 1184(c); 20 C.F.R. §
655.705(b). An approved H-1B petition allows the foreign
national beneficiary to reside in United States and work in the
position identified in the petition. There is a statutory limit
on the number of H-1B visas (cap and cap-exempt) of 65,000 per
year nation-wide, plus an additional 20,000 per year for
5
Masters, PhD and post-graduate-level graduates of U.S.
universities. 8 U.S.C. § 1184(g)(1)(A), (5)(C).
2. Permanent Labor Certifications For EB-2 And EB-3
Visa Workers
The INA also creates a multi-step process for noncitizens
to obtain permanent employment in the United States in certain
professional or skilled occupations. There are five “preference”
categories, or immigrant visa classes, provided in the INA. Two
of the “preference” categories—the second and third categories
(referred to as the EB-2 and EB-3 immigrant visa
classifications)—require a labor certification by the Secretary
of Labor before a prospective employer can apply for a visa with
DHS. See 8 U.S.C. §§ 1153(b)(2)-(3), 1182(a)(5)(A). EB-2
immigration work visas apply to foreign workers who are either
professionals holding advanced degrees (master’s degree or
above) or foreign equivalents of such degrees, or persons of
“exceptional ability” in the sciences, arts, or business. Id. §
1153(b)(2). EB-3 immigration work visas apply to foreign workers
who are either “skilled workers,” “professionals,” or “other”
unskilled workers, as defined by the statute. Id. § 1153(b)(3).
A labor certification reflects the Secretary’s
determination that:
(I) there are not sufficient workers who are able,
willing, qualified ... and available at the time of
application for a visa and admission to the United
6
States and at the place where the alien is to
perform such skilled or unskilled labor, and
(II) the employment of such alien will not
adversely affect the wages and working conditions
of workers in the United States similarly employed.
8 U.S.C. § 1182(a)(5)(A)(i); see also 20 C.F.R. § 656.1(a)(1)-
(2). To receive certification, the employer must also attest,
among other things, that the employer is offering a wage that
equals or exceeds the prevailing wage, and that the employer
will pay the foreign worker a wage equal to or exceeding the
prevailing wage. 20 C.F.R. § 656.10(c)(1). Thus, prior to filing
for a labor certification, the employer must obtain a prevailing
wage determination for its job opportunity. Id. §§ 656.15(b)(1),
656.40(a). If there is no prevailing wage rate derived from an
applicable CBA, the employer may elect to use an applicable wage
determination under the Davis-Bacon Act or McNamara-O’Hara
Service Contract Act, or provide a wage survey that complies
with the DOL’s standards governing employer-provided wage data.
Id. § 656.40(b)(2)-(4). In the absence of any of the above
sources, the NPWC will use the OES Survey to determine the
prevailing wage. Id. § 656.40(b)(2).
Once the Secretary certifies the permanent labor
certification, the employer may then file a visa petition with
DHS on the worker’s behalf. Id. § 656.17(a). The labor
certification must be filed in support of a visa petition within
7
180 calendar days of the date on which DOL granted the
certification. Id. § 656.30(b)(1).
3. The Prevailing Wage Determination
Since 1998, the DOL has used the OES survey data to
calculate prevailing wage rates. See Labor Condition
Applications and Requirements for Employers Using Nonimmigrants
on H-1B Visas in Specialty Occupations and as Fashion Models;
Labor Certification Process for Permanent Employment of Aliens
in the United States, 65 Fed. Reg. 80110, 80198 (Dec. 20, 2000).
In 2004, Congress revised the prevailing wage rate system to
require that DOL, when using or making a governmental survey
available to employers to determine the prevailing wage, include
at least four levels of wages “commensurate with experience,
education, and the level of supervision.” L-1B and H-1B Visa
Reform Act, Public Law No. 108-447, Title IV, Subtitle B, § 423
(Dec. 8, 2004) (8 U.S.C. § 1182(p)(4)). Prior to the issuance of
the IFR in this case, DOL determined the four wage rates based
on the 17th percentile, the 34th percentile, the 50th
percentile, and the 67th percentile, respectively, of the OES
reported wage distribution for each occupation. 85 Fed. Reg. at
63,875.
4. The Interim Final Rule
On October 8, 2020, the DOL published the IFR at issue,
“Strengthening Wage Protections for the Temporary and Permanent
8
Employment of Certain Aliens in the United States,” 85 Fed. Reg.
63,872, without providing advance notice and comment. Defs.’
Opp’n, ECF No. 18 at 15.
In issuing the IFR, the DOL asserted that the prevailing
wage levels “are not advancing the purposes of the INA’s wage
provisions” because, “under the existing wage levels,
artificially low prevailing wages provide an opportunity for
employers to hire and retain foreign workers at wages well below
what their U.S. counterparts . . . make,” which “creat[es] an
incentive—entirely at odds with the statutory scheme—to prefer
foreign workers to U.S. workers, and caus[es] downward pressure
on the wages of the domestic workforce.” 85 Fed. Reg. at 63,877.
Based on this view, the IFR incorporates changes to the
computation of wage levels under the DOL’s four-tiered wage
structure based on the OES wage survey. 85 Fed. Reg. at 63,872.
The IFR upwardly adjusts the first-tier prevailing wage rate
from the 17th percentile of the OES wage distribution to the
45th percentile; the second-tier prevailing wage rate from the
34th to the 62nd percentile; the third-tier prevailing wage rate
from the 50th to the 78th percentile; and the fourth-tier
prevailing wage rate from the 67th to the 95th percentile. Id.
at 63,892-93, 63,905. According to the DOL, “[t]his update will
allow DOL to more effectively ensure that the employment of
immigrant and nonimmigrant workers admitted or otherwise
9
provided status through the above-referenced programs does not
adversely affect the wages and job opportunities of U.S.
workers.” Id. at 63,872.
The IFR took effect the day it was published. Id. The DOL
explained its decision to forego notice and comment procedures
by invoking the “good cause” exception of the APA, id. at
63,898, which provides that an agency may dispense with formal
notice and comment procedures if the agency “for good cause
finds . . . that notice and public procedure thereon are
impracticable, unnecessary, or contrary to the public interest,”
5 U.S.C. § 553(b)(B). The DOL cited two factors to show the
existence of good cause. First, the DOL asserted that “the shock
to the labor market caused by the widespread unemployment
resulting from the coronavirus public health emergency has
created exigent circumstances that threaten immediate harm to
the wages and job prospects of U.S. workers.” 85 Fed. Reg. at
63,898. Because “flaws in the existing wage levels—which were
promulgated through guidance and without meaningful economic
justification, are inconsistent with the statute, and serve as
the source of adverse labor effects on U.S. workers even under
normal economic conditions—can only exacerbate” the “dangers
posed to U.S. workers by recent mass lay-offs,” the DOL asserted
that “[n]otice and comment procedures in these circumstances
would make it impracticable for the Department to fulfill its
10
statutory mandate and carry out the ‘due and required execution
of [its] agency functions’ to protect U.S. workers.” Id. (second
alteration in original). Second, the DOL stated that advance
notice and comment would be contrary to the public interest
because “[a]dvance notice of the intended changes would create
an opportunity, and the incentives to use it, for employers to
attempt to evade the adjusted wage requirements.” Id. The DOL
invited interested persons to submit written comments and
related material by November 9, 2020. Id. at 63,872.
B. Procedural History
This consolidated case arises out of two lawsuits
challenging the lawfulness of the recently issued IFR.
Specifically, the lawsuits challenge Defendants’ failure to
provide advance notice-and-comment rulemaking procedures prior
to promulgation. See Purdue Mot., ECF No. 6 at 11-12; Stellar IT
Mot., ECF No. 7-1 at 24-25.
In Purdue University v. Scalia, No. 20-cv-3006 (D.D.C. Oct.
19, 2020) (EGS), the Purdue Plaintiffs—a group of nine academic
institutions and eight “employers operating in the healthcare,
immigration, or technology-related fields of endeavor”—filed
their lawsuit on October 19, 2020, against Defendants Eugene
Scalia (“Mr. Scalia”), in his official capacity as Secretary of
the DOL; and the DOL. See Purdue Pls.’ Mot., ECF No. 6 at 11. On
October 23, 2020, the Purdue Plaintiffs filed a motion for a
11
preliminary injunction or section 705 APA stay, requesting that
the Court (1) “enjoin[] Defendants from enforcing Department of
Labor Interim Final Regulation: Strengthening Wage Protections
for the Temporary and Permanent Employment of Certain Aliens in
the United States, 85 Fed. Reg. 63872 (October 8, 2020)”; and
(2) “requir[e] Defendants, within 10 business days of the date
of the order, to reissue any prevailing wage determinations that
have been issued pursuant to the IFR.” Purdue Mot., ECF No. 6 at
11. Five days later, the parties in Purdue consented to
consolidating the Purdue Plaintiffs’ motion for a preliminary
injunction with a determination on the merits, pursuant to
Federal Rule of Civil Procedure 65(a)(2), on the claim that the
IFR was improperly issued without advance notice and comment.
See Purdue Joint Status Report, ECF No. 12. The Court
accordingly ordered that the motion be consolidated with the
merits and stayed briefing on the remaining arguments in the
motion for preliminary injunction. See Purdue Min. Order (Oct.
28, 2020). On November 2, 2020, Defendants filed their
opposition to the Purdue Plaintiffs’ motion and cross-motion for
partial summary judgment. See Defs.’ Opp’n, ECF No. 18. The
Purdue Plaintiffs filed their reply and response to Defendants’
cross-motion for partial summary judgment on November 9, 2020.
See Purdue Pls.’ Reply, ECF No. 20.
12
In Stellar IT v. Scalia, No. 20-cv-3175 (D.D.C. Nov. 3,
2020), the Plaintiffs—8 companies that employ H-1B skilled non-
immigrant workers throughout the United States—filed their
lawsuit on November 3, 2020 against Mr. Scalia, in his official
capacity as Secretary of the DOL; and John Pallasch (“Mr.
Pallasch”), in his official capacity as Assistant Secretary of
the DOL. See Stellar IT Compl., ECF No. 1. The Stellar IT
Plaintiffs then moved for a preliminary injunction on November
9, 2020, requesting that the Court enjoin the DOL’s
implementation of the IFR. See Stellar IT Mot., ECF No. 7 at 1.
On November 10, 2020, the parties consented to consolidating the
motion for a preliminary injunction with a determination on the
merits, pursuant to Federal Rule of Civil Procedure 65(a)(2), on
the claim that the IFR was improperly issued without advance
notice and comment. See Stellar IT Joint Status Report, ECF No.
8. The parties also informed the Court that they had conferred
with the plaintiffs in Purdue and that the parties in the Purdue
case and in the Stellar IT case agreed to consolidate the cases
for resolution of the notice-and-comment claim. Id. The Court
accordingly (1) ordered that the Stellar IT Plaintiffs’ motion
be consolidated with the merits, (2) ordered that the Stellar IT
and Purdue cases be consolidated for resolution of the notice-
and-comment claim, and (3) stayed briefing on the remaining
13
arguments in the Stellar IT Plaintiffs’ motion for preliminary
injunction. See Stellar IT Min. Order (Nov. 12, 2020).
Following the Court’s Orders, and as agreed by the parties
in both cases, the Defendants filed a combined reply in support
of its cross-motion for partial summary judgment in Purdue and
response to the Stellar IT Plaintiffs’ motion for preliminary
injunction on November 12, 2020. See Defs.’ Reply & Opp’n
(“Defs.’ Reply”), ECF No. 10, Purdue v. Scalia, No. 20-cv-3006
(D.D.C. Nov. 12, 2020). On November 16, 2020, the Stellar IT
Plaintiffs filed their reply brief. See Stellar IT Pls.’ Reply,
ECF No. 11.
The motions are now ripe for adjudication.
II. Legal Standard
Summary judgment is usually appropriate “if the pleadings,
the discovery and disclosure materials on file, and any
affidavits [or declarations] show that there is no genuine issue
as to any material fact and that the movant is entitled to a
judgment as matter of law.” Air Transp. Ass’n of Am. v. Nat’l
Mediation Bd., 719 F. Supp. 2d 26, 31-32 (D.D.C. 2010)
(alteration in original) (citing Fed. R. Civ. P. 56(c)), aff’d,
663 F.3d 476 (D.C. Cir. 2011). In “a case involving review of a
final agency action under the Administrative Procedure Act, 5
U.S.C. § 706, however, the Court’s role is limited to reviewing
the administrative record, so the standard set forth in Rule
14
56(c) does not apply.” Id. at 32 (citation omitted). In such
cases, summary judgment “serves as the mechanism for deciding,
as a matter of law, whether the agency action is supported by
the administrative record and otherwise consistent with the APA
standard of review.” Cottage Health Sys. v. Sebelius, 631 F.
Supp. 2d 80, 90 (D.D.C. 2009) (citation omitted).
Here, the parties have agreed to waive the filing of the
Administrative Record and instead rely upon the IFR and the
materials cited therein. See Purdue Joint Status Report, ECF No.
12 at 2; Stellar IT Joint Status Report, ECF No. 8 at 2.
Accordingly, the Court shall review the IFR and the materials
cited within the IFR in lieu of the Administrative Record in
deciding the parties’ motions.
III. Analysis
Section 553 of the APA generally requires agencies to
provide notice of a rule thirty days before it becomes effective
and to give the public an opportunity to comment. See 5 U.S.C. §
553(b)-(d). These procedures are designed “(1) to ensure that
agency regulations are tested via exposure to diverse public
comment, (2) to ensure fairness to affected parties, and (3) to
give affected parties an opportunity to develop evidence in the
record to support their objections to the rule and thereby
enhance the quality of judicial review.” Int’l Union, United
Mine Workers of Am. v. Mine Safety & Health Admin., 407 F.3d
151250, 1259 (D.C. Cir. 2005). However, notice-and-comment
procedures may be waived “when the agency for good cause finds
(and incorporates the finding and a brief statement of reasons
therefor in the rules issued) that notice and public procedure
thereon are impracticable, unnecessary, or contrary to the
public interest.” 5 U.S.C. § 553(b)(3)(B).
Because notice-and-comment procedures are vital to ensuring
informed agency decisions, the Court of Appeals for the District
of Columbia Circuit (“D.C. Circuit”) has emphasized that the
“good cause” exception is to be “narrowly construed and only
reluctantly countenanced.” Util. Solid Waste Activities Grp. v.
EPA, 236 F.3d 749, 754 (D.C. Cir. 2001) (quoting Tenn. Gas
Pipeline Co. v. FERC, 969 F.2d 1141, 1144 (D.C. Cir. 1992)).
“The exception is not an ‘escape clause’; its use ‘should be
limited to emergency situations,’” id. (quoting Am. Fed’n of
Gov’t Employees v. Block, 655 F.2d 1153, 1156 (D.C. Cir. 1981)),
or “where delay could result in serious harm,” Jifry v. FAA, 370
F.3d 1174, 1179 (D.C. Cir. 2004) (citation omitted).
Review of an “agency’s legal conclusion of good cause is de
novo.” See Sorenson Commc’ns Inc. v. FCC, 755 F.3d 702, 706
(D.C. Cir. 2014). Courts must “‘examine closely’ both the
circumstances surrounding [the rule] and the . . . stated
rationale for failing to follow notice-and-comment procedures
before issuing” the rule. Council of S. Mountains, Inc. v.
16
Donovan, 653 F.2d 573, 580 (D.C. Cir. 1981). In other words,
“the good-cause inquiry is ‘meticulous and demanding.’”
Sorenson, 755 F.3d at 706 (quoting N.J. Dep’t of Envt’l Prot. v.
EPA, 626 F.2d 1038, 1046 (D.C. Cir. 1980)). Because notice-and-
comment rulemaking is the default, “‘the onus is on the [agency]
to establish that notice and comment’ should not be given,” and
“[a]ny agency faces an uphill battle to meet that burden.” Nat’l
Venture Capital Ass’n v. Duke, 291 F. Supp. 3d 5, 16 (D.D.C.
2017) (first alteration in original) (quoting Action on Smoking
& Health v. Civil Aeronautics Bd., 713 F.2d 795, 801 n.6 (D.C.
Cir. 1983)); see also Capital Area Immigrants’ Rights Coal. v.
Trump, No. 19-2117 (TJK), 2020 WL 3542481, at *12 (D.D.C. June
30, 2020) (“[T]he D.C. Circuit has set a high bar for satisfying
good cause.”).
Defendants assert that the good cause exception applies
here because advance notice-and-comment procedures would have
been impracticable and contrary to the public interest. The
Court disagrees for the reasons set forth below.
A. The DOL Has Not Shown That Providing Advance Notice And
Comment Would Be Impracticable
The Court first turns to whether the DOL sufficiently
justified its decision, as detailed in the IFR, that advance
notice-and-comment procedures would have been “impracticable.”
85 Fed. Reg. at 63,898.
17
“[A] situation is ‘impracticable’ when an agency finds
that due and timely execution of its functions would be impeded
by the notice otherwise required in [§ 553].” Util. Solid Waste
Activities Grp., 236 F.3d at 754 (second alteration in original)
(citation omitted). This inquiry “is inevitably fact- or
context-dependent,” Mack Trucks, Inc. v. EPA, 682 F.3d 87, 93
(D.C. Cir. 2012) (quoting Mid–Tex Elec. Coop. v. FERC, 822 F.2d
1123, 1132 (D.C. Cir. 1987)); and “[i]n the past, [the D.C.
Circuit has] approved an agency’s decision to bypass notice and
comment where delay would imminently threaten life or physical
property,” Sorenson, 755 F.3d at 706. Courts in this Circuit
have found notice-and-comment rulemaking impracticable “only in
unusual cases,” including when “air travel security agencies
would be unable to address threats posing ‘a possible imminent
hazard to aircraft, persons, and property within the United
States’”; when “a safety investigation shows that a new safety
rule must be put in place immediately”; or when “a rule was of
‘life-saving importance’ to mine workers in the event of a mine
explosion.” Capital Area Immigrants’ Rights Coal., 2020 WL
3542481, at *12 (quoting Mack Trucks, Inc., 682 F.3d at 93).
The DOL justified its decision to dispense with notice and
comment by asserting that “the shock to the labor market caused
by the widespread unemployment resulting from the coronavirus
public health emergency has created exigent circumstances that
18
threaten immediate harm to the wages and job prospects of U.S.
workers.” 85 Fed. Reg. at 63,898. Although the “INA’s wage
protections are meant to ensure that the employment of foreign
workers does not have an adverse impact on similarly employed
U.S. workers,” the DOL found that “serious fiscal harm would
befall U.S. workers absent immediate action by the Department
because the wage and employment risks, already immense, posed to
workers by recent mass lay-offs are greatly compounded by the
inappropriately low prevailing wage rates.” Id. The DOL
explained that the prior prevailing wage rates allowed employers
to pay certain H-1B workers wages that were lower than the
market rate for similarly employed U.S. workers, which could
lead employers to prefer H-1B workers over U.S. workers and in
turn lead to negative outcomes for U.S. workers. Id. at 63,899.
The DOL concluded that it must take “[i]mmediate corrective
action [to correct the wage rates] to ensure that the
Department’s regulations are, consistent with their purpose,
safeguarding the well-being of U.S. workers.” Id. at 63,900.
“Notice and comment procedures in these circumstances would make
it impracticable for the Department to fulfill its statutory
mandate and carry out the ‘due and required execution of [its]
agency functions’ to protect U.S. workers.” Id. at 63,898
(alteration in original) (citation omitted).
19
The Court finds that the DOL did not appropriately invoke
the good cause exception based upon its stated rationale in the
IFR. First, given the DOL’s more than six month delay in
implementing changes to the prevailing wage calculation, the
Court declines to countenance the agency’s avoidance of notice-
and-comment procedures. Under D.C. Circuit precedent, “[n]otice
and comment can only be avoided in truly exceptional emergency
situations, which notably, cannot arise as a result of the
agency’s own delay.” Wash. All. of Tech. Workers v. U.S. Dep’t
of Homeland Sec., 202 F. Supp. 3d 20, 26 (D.D.C. 2016) (citing
Env’t Def. Fund, Inc. v. EPA, 716 F.2d 915, 920-21 (D.C. Cir.
1983)); see also Env’t Def. Fund, Inc., 716 F.2d at 921 (“[T]he
good cause exception does not apply when an alleged ‘emergency’
arises as the result of an agency’s own delay . . . .”). Courts
in this Circuit have “repeatedly rejected good cause when the
agency delays implementing its decision.” Nat’l Venture Capital
Ass’n, 291 F. Supp. 3d at 16; see, e.g., Air Transp. Ass’n of
Am. v. Dep’t of Transp., 900 F.2d 369, 379 (D.C. Cir. 1990)
(holding that “the FAA is foreclosed from relying on the good
cause exception by its own delay in promulgating the
[challenged] Rules,” where “[t]he agency waited almost nine
months before taking action” and therefore “could have realized
[its] objective short of disregarding its obligations under the
APA”), vacated on other grounds, 498 U.S. 1077 (1991); Nat’l
20
Ass’n of Farmworkers Orgs. v. Marshall, 628 F.2d 604, 622 (D.C.
Cir. 1980) (finding agency had failed to demonstrate good cause
where it “waited nearly seven months between the initial
regulation promulgated through notice and comment and the first
modification of it promulgated without the requisite
procedures”); Env’t Def. Fund, Inc., 716 F.2d at 921 (declining
to find that “outside time pressures forced the agency to
dispense with APA notice and comment procedures” where agency
waited eight months prior to invoking good cause). “Otherwise,
an agency unwilling to provide notice or an opportunity to
comment could simply wait until the eve of a statutory,
judicial, or administrative deadline, then raise up the ‘good
cause’ banner and promulgate rules without following APA
procedures.” Council of S. Mountains, 653 F.2d at 581.
While the DOL did not “wait until the eve of a statutory,
judicial, or administrative deadline” to act, Nat’l Venture
Capital Ass’n, 291 F. Supp. 3d at 16, the principles underlying
the cases cited above are analogous. Here, the DOL grounds the
necessity for its “immediate action” on the “the shock to the
labor market” resulting from the COVID-19 outbreak in the United
States, 85 Fed. Reg. at 63,898; yet the effects resulting from
the pandemic had been ongoing for several months by the time the
DOL promulgated the IFR. As outlined within the IFR, the
President declared a “national emergency” concerning COVID-19 on
21
March 13, 2020. Id. Because the DOL provided the unemployment
statistics the IFR relies upon, by April 2020, the DOL was aware
of the “widespread unemployment resulting from the coronavirus
public health emergency,” which it refers to as “a rate not seen
since the Great Depression.” See id. at 63,898-99 (“Under the
high unemployment rates experienced in the U.S. labor market
this year, which reached 14.7 percent in April, . . . the
existing flawed and arbitrary wage levels pose an immediate
threat to the livelihoods of U.S. workers.”). Yet the DOL waited
until October—when unemployment reached a “critical moment”
because it was the month “at which the risk of wage scarring and
other adverse employment effects of unemployment [became]
especially acute”—to promulgate the IFR without notice and
comment. Id. at 63,900. Moreover, the DOL’s delay in
promulgating the IFR is compounded by the fact that the DOL
concedes that the update to the prevailing wage levels “should
have been undertaken years ago.” Id.
Defendants argue that to find that the DOL unduly delayed
implementing the IFR “would mean that when an emergency upends
the country, an agency may forgo advance notice and comment only
in the initial stages of that emergency—regardless of how the
emergency evolves over time.” Defs.’ Reply, ECF No. 24 at 12. To
justify the delay in acting, Defendants argue that in March
2020, “it was not immediately apparent how quickly the U.S.
22
labor market would recover or what that recovery would look
like,” but that “[a]s the pandemic continued, . . . it became
clear . . . that continued unemployment resulting from the
COVID-19 pandemic posed a significant risk to U.S. workers.” Id.
at 12-13. It was thus the pandemic’s “continued impact” on U.S.
workers that “required the Department to act quickly.” Id. at
13.
The Court does not discount that the pandemic is and was a
“complex and constantly changing crisis.” Id. Nonetheless,
Defendants’ arguments fail because the IFR acknowledges that the
Executive Branch had early concerns regarding the potentially
devastating harms to the U.S. economy as a result of the COVID-
19 outbreak, and indeed took actions to mitigate those concerns
by April. 85 Fed. Reg. at 63,898. For example, on April 22,
2020, a presidential proclamation suspending the entry of
individuals in certain immigrant classifications, such as EB-2
and EB-3, explicitly warned that the “United States faces a
potentially protracted economic recovery with persistently high
unemployment.” Id. (quoting Proclamation No. 10014, 85 Fed. Reg.
23,441 (Apr. 22, 2020) (“April 22 Presidential Proclamation”)).
The proclamation further directed the DOL to “review
nonimmigrant programs and recommend other measures appropriate
to ‘stimulate the United States economy and ensure the
prioritization, hiring, and employment of United States
23
workers.’” Id. at 63,899 (quoting April 22 Presidential
Proclamation). In addition, a presidential proclamation on June
22, 2020, which restricted the entry of certain immigrants and
nonimmigrants, similarly directed the DOL to consider
promulgating regulations or other appropriate actions “to ensure
that the presence in the United States of aliens who have been
admitted or otherwise provided a benefit . . . pursuant to an
EB-2 or EB-3 immigrant visa or an H-1B nonimmigrant visa does
not disadvantage United States workers.” Id. (citing
Proclamation No. 10052, 85 Fed. Reg. 38,263 (June 22, 2020)
(“June 22 Presidential Proclamation”)). Thus, contrary to the
DOL’s assertion that it was unaware in March or April of COVID-
19’s potential long-term economic impact, the President had
directed the DOL’s attention to the threat of “persistently high
unemployment” in the United States as early as April.
Second, even if the DOL’s decision to wait until October to
issue the IFR does not constitute undue delay, the DOL still has
not shown that advance notice and comment would have been
impracticable. The DOL simply has not provided record support
establishing that there is imminent “serious fiscal harm” to
U.S. workers in connection with H-1B nonimmigrant visas and EB-2
and EB-3 immigrant visas. See Capital Area Immigrants’ Rights
Coal., 2020 WL 3542481, at *13; see also Sorenson, 755 F.3d at
706 (“[T]he good-cause exception should be invoked only in
24
‘emergency situations . . . or where delay could result in
serious harm.’” (quoting Jifry, 370 F.3d at 1179)).
The IFR provides that “millions of U.S. workers, many of
whom work in industries that employ large numbers of H-1B and
employment-based immigrants, lost their jobs over the past six
months.” 85 Fed. Reg. at 63,900. Furthermore, “[u]nder the high
unemployment rates experienced in the U.S. labor market this
year, which reached 14.7 percent in April, . . . and remain
elevated, the existing flawed and arbitrary wage levels pose an
immediate threat to the livelihoods of U.S. workers.” Id. at
63,899. In the DOL’s “expert judgment” and “based on its review
of the evidence of the effects of the current wage levels, the
existing levels are impeding and will continue to impede, to a
significant degree, many U.S. workers’ ability to return to
well-compensated employment” because “the current levels have,
in many instances, a suppressive effect on U.S. workers’ wages
and allow employers to prefer foreign labor as a lower-cost
labor alternative.” Id. at 63,900. Accordingly, the IFR finds
that “[w]ithout interventions to help U.S. workers, as many as 8
million individuals laid off earlier this year may reach 27
weeks or more of unemployment starting in October 2020.” Id.
While it is true that a “full recovery has not occurred,”
Defs.’ Opp’n, ECF No. 18 at 21, the unemployment statistics
cited within the IFR did not reflect the economic reality at the
25
time the DOL issued the rule. Although the DOL acknowledged that
“hiring in the U.S. has increased, with continued hiring across
all sectors of the economy anticipated,” it nonetheless cited to
the 14.7 percent unemployment figure from April 2020—despite
more recently updated statistics being available—as an
indication of the “exigent circumstances that threaten immediate
harm to the wages and job prospects of U.S. workers.” 85 Fed.
Reg. at 63,898-99. Yet, by the time the DOL issued the IFR, the
general unemployment rate had dropped to 7.9 percent for
September 2020. See News Release: Statement by Secretary of
Labor Scalia on the September Jobs Report, U.S. Dep’t of Labor
(Oct. 2, 2020),
https://www.dol.gov/newsroom/releases/osec/osec20201002. 2 And
according to Mr. Scalia, by September, “[m]ore than half the
jobs lost from the pandemic [had] been restored.” Id.
More significantly, though, the IFR fails to provide any
specific findings connecting the high unemployment exacerbated
by the pandemic with those occupations typically filled by the
immigrant and nonimmigrant workers in the visa programs at issue
in this case. The IFR broadly asserts that “many” of the
“millions of U.S. workers . . . in industries that employ large
2 The Court takes judicial notice of the press release as it is a
government document available from a reliable source. See
Democracy Forward Found. v. White House Office of Am.
Innovation, 356 F. Supp. 3d 61, 68 n.4 (D.D.C. 2019).
26
numbers of H-1B and employment-based immigrants, lost their jobs
over the past six months,” and finds that “as many as 8 million
individuals laid off earlier this year may reach 27 weeks or
more of unemployment starting in October 2020.” 85 Fed. Reg. at
63,900. However, because the IFR does not indicate in which
sectors the high unemployment rates and lay-offs are located, it
is unclear whether the changes the rule implements would in fact
alleviate the harms to U.S. workers affected by the “recent mass
lay-offs.” Id. at 63,898.
Similarly, as stated above, the IFR states that the
unemployment rate reached a high of 14.7 percent in April 2020.
Id. at 63,899. But this figure also refers to the overall
unemployment figure across all sectors in the United States and,
as such, is not the relevant metric for EB-2, EB-3, and H-1B
workers. As the IFR identifies, nearly two-thirds of the foreign
workers on an H-1B visa work in “computer-related occupations”
in the United States. See id. at 63,882. And as the U.S.
District Court for the Northern District of California recently
found in a case analyzing the June 22, 2020 Presidential
Proclamation, “[t]he statistics regarding pandemic-related
unemployment actually indicate that unemployment is concentrated
in service occupations and that large number of job vacancies
remain in the area most affected by the ban, computer operations
which require high-skilled workers.” Nat’l Ass’n of Mfrs. v.
27
U.S. Dep’t of Homeland Sec., No. 20-cv-4887-JSW, 2020 WL
5847503, at *13 (N.D. Cal. Oct. 1, 2020) (finding that the
plaintiffs were likely to succeed on their claim because the
proclamation “does not comport with actual facts,” among other
things); see also Purdue Pls.’ Reply, ECF No. 20 at 13 (“During
the 30 days ending October 2, 2020, there were over 655,000
active job vacancy postings advertised online for jobs in common
computer occupations—including over 280,000 postings for
‘software developers, applications.’”). Indeed, “[t]he
unemployment rate in computer occupations was 3.0% in January
2020 (before the economic impacts of the virus were felt) and
[stood] at 3.5% in September 2020.” Purdue Pls.’ Reply, ECF No.
20 at 12 (second alteration in original) (citing Amicus Br., ECF
No. 16-1 at 11). “These jobs are simply not fungible.” Nat’l
Ass’n of Mfrs., 2020 WL 5847503, at *13. Here, there is a
“significant mismatch of facts regarding the unemployment caused
by the proliferation of the pandemic” and the immigrant and
nonimmigrant worker visas targeted in the IFR. Id.Accordingly, the DOL has failed to demonstrate that it was
necessary to dispense with advance notice and comment in order
to “prevent fiscal harm” to U.S. workers due to recent pandemic-
related “mass lay-offs.” See 85 Fed. Reg. at 63,898. The Court
therefore finds that the DOL has failed to carry its burden to
28
show that it was “impracticable” to provide advance notice and
comment.
B. The DOL Has Not Shown That Providing Advance Notice And
Comment Would Be Contrary To The Public Interest
The Court next considers whether the DOL sufficiently
justified its decision, as described in the IFR, that advance
notice-and-comment procedures would have been contrary to the
public interest.
“The public interest prong of the good cause exception is
met only in the rare circumstance when ordinary procedures—
generally presumed to serve the public interest—would in fact
harm that interest.” Mack Trucks, Inc., 682 F.3d at 95. It is
appropriately invoked when the timing and disclosure
requirements of the usual procedures would defeat the purpose of
the proposal—if, for example, “announcement of a proposed rule
would enable the sort of financial manipulation the rule sought
to prevent.” Util. Solid Waste Activities Grp., 236 F.3d at 755.
In such a situation, “notice and comment could be dispensed with
‘in order to prevent the amended rule from being evaded.’” Mack
Trucks, Inc., 682 F.3d at 95 (citation omitted). “The question
is not whether dispensing with notice and comment would be
contrary to the public interest, but whether providing notice
and comment would be contrary to the public interest.” Id.
29
The DOL justified its decision to dispense with notice and
comment by explaining that its actions were necessary “to
prevent the evasion by employers of the new wage requirements
that would likely result from announcing a change to the levels
in advance of the change taking effect.” 85 Fed. Reg. at 63,901.
According to the DOL, “[t]he limited discretion” it enjoys “with
respect to how quickly it reviews LCAs, in combination with the
leeway employers have on when they file, as well as historical
filing patterns, show that advance notice of the wage level
changes effected by this rule could result in the kind of
‘massive rush’ to evade price changes.” Id. In addition to
noting the “potential administrative burden” the DOL would face
in the event of a substantial increase in LCA filings during any
advance notice and comment, the DOL asserted that “[a]llowing
employers to lock in for extended periods prevailing wage rates
that the Department has determined often result in adverse
effects on U.S. workers’ wages and job opportunities would
prolong the very problem—made exigent by the current state of
the labor market—that the Department is seeking to address”
through the IFR. Id.
The Court finds the DOL’s explanation insufficient. As an
initial matter, although the DOL claims that “announcing a
change to the [prevailing wage] levels in advance of the change
taking effect” would have caused harm to the public interest,
30
the Executive Branch had already announced its intent to issue
such a rule some months prior to the IFR’s promulgation. For
example, on June 22, 2020, during a background press call with a
“senior administration official,” the official announced that
the DOL had “been instructed by the President to change the
prevailing wage calculation . . . with respect to H-1B wages”
and that it was going to “set[] the prevailing wage floor at the
50th percentile so [H-1B workers] will be in the upper end of
earnings.” See Office of the Press Secretary, Transcript of
White House Background Press Call Concerning the June 22
Presidential Proclamation (June 22, 2020) (emphasis added),
www.aila.org/infonet/transcript-of-white-house-background-press-
call. 3 In addition, on August 3, 2020, the President publicly
remarked that “[a]s we speak, we’re finalizing [H-1B]
regulations so that no American worker is replaced ever again.
[H-1Bs] should be used for top, highly paid talent to create
American jobs, not as inexpensive labor program to destroy
American jobs.” Remarks by President Trump in a Meeting with
U.S. Tech Workers and Signing of an Executive Order on Hiring
American, White House (Aug. 3, 2020),
www.whitehouse.gov/briefings-statements/remarks-president-trump-
3 The Court takes judicial notice of the White House official’s
remarks as representations of the government’s position. See Al-
Aulaqi v. Panetta, 35 F. Supp. 3d 56, 68 (D.D.C. 2014).
31
meeting-u-s-tech-workers-signing-executive-order-hiring-
american/. 4 Thus, it was public knowledge at least by June that
the DOL was working on drafting a rule that would increase the
prevailing wage floor with respect to H-1B workers, with the
goal of ensuring that they would be “highly paid.” The Executive
Branch’s willingness to reveal its plans to raise the prevailing
wage floor, including an estimated percentile change, and
deliver status updates on the DOL’s development of the IFR
undercuts its prediction that “announcing a change” to the
prevailing wage calculus would have caused serious harm to the
public interest.
In addition, the Court notes that the LCA process has
built-in legal safeguards that limit the extent to which
employers could take advantage of advance notice-and-comment
procedures to evade the rule. While the DOL is required to
approve an LCA within seven days of when the application is
filed, 20 C.F.R. § 655.740(a)(1), employers themselves are not
permitted to file an LCA earlier than six months prior to the
beginning date of the period of intended employment, 20 C.F.R. §
655.730(b). Defendants, however, argue that the “limited
discretion the Department has with respect to how quickly it
4 The Court takes judicial notice of the President’s remarks as
representations of the government’s position. See Al-Aulaqi, 35
F. Supp. 3d at 68.
32
reviews LCAs, in combination with the leeway employers have on
when they file,” 85 Fed. Reg. at 63,901, provides the
opportunity “for employers to attempt to evade the adjusted wage
requirements,” id. at 63,898. Defendants argue that “employers
would have every incentive to submit LCAs during the notice and
comment period for the IFR for any potential employment of
foreign workers within the next six months or even to move up
their hiring timelines in order to avoid a requirement to pay a
higher wage for years.” Defs.’ Opp’n, ECF No. 18 at 30. But
Defendants ignore the fact that an employer may only file an
LCA, which is signed under penalty of perjury, 20 C.F.R. §
655.730(c)(1), if they intend to employ an H-1B worker in an
identified occupation, at a specific place of employment, and
for a specific period of time, see id. § 655.730(c)(4). Indeed,
as the Stellar IT Plaintiffs point out, the government has
previously criminally prosecuted employers “for filing
applications for non-existent jobs in temporary worker
programs.” Stellar IT Pls.’ Reply, ECF No. 11 at 10 (citing
United States v. Eury, Nos. 14-cr-39-2/5, 2015 U.S. Dist. LEXIS
1861807, *3 (M.D.N.C. Apr. 23, 2015)).
In any event, the DOL has failed to provide any evidence in
the record supporting its prediction that there would be a
“massive rush” to evade the IFR if the DOL had provided advance
notice and comment. 85 Fed. Reg. at 63,901. This Court
33
recognizes that the DOL’s prediction regarding rule evasion
“entails a degree of speculation by the agency,” and is
therefore “hesitant to discount such forecasts, as they
‘necessarily involve deductions based on expert knowledge of the
Agency.’” Tenn. Gas Pipeline Co., 969 F.2d at 1145 (quoting
Mobil Oil Corp. v. Dep’t of Energy, 728 F.2d 1477, 1492 (Temp.
Emer. Ct. App. 1983)). In addition, “[c]ommon sense dictates
that the announcement of a proposed rule may, at least to some
extent and in some circumstances, encourage those affected by it
to act before it is finalized.” See Capital Area Immigrants’
Rights Coal., 2020 WL 3542481, at *13. However, under D.C.
Circuit precedent, suggesting “incentives” as a justification,
without further evidence, is generally insufficient to
constitute good cause. See Sorenson, 755 F.3d at 707 (“Though no
particular catechism is necessary to establish good cause,
something more than an unsupported assertion is required.”); see
also Tenn. Gas Pipeline Co., 969 F.2d at 1146 (finding that
where an agency “claim[s] good cause without offering any
evidence, beyond its asserted expertise, as to why the public
interest is served by the immediate implementation of the
interim rule,” the agency has failed to demonstrate good cause);
Sorenson, 755 F.3d at 706 (“To accord deference [to an agency’s
invocation of good cause] would be to run afoul of congressional
intent.”); Capital Area Immigrants’ Rights Coal., 2020 WL
343542481, at *13 (explaining that good cause justification
regarding potential rule evasion “cannot satisfy the D.C.
Circuit’s standard . . . unless it is adequately supported by
evidence in the administrative record suggesting that this
dynamic might have led to the consequences predicted by the
Departments—consequences so dire as to warrant dispensing with
notice and comment procedures.”); see also E. Bay Sanctuary
Covenant v. Trump, 950 F.3d 1242, 1278 (9th Cir. 2020) (“The lag
period before any regulation, statute, or proposed piece of
legislation allows parties to change their behavior in response.
If we were to agree with the government’s assertion that notice-
and-comment procedures increase the potential harm the Rule is
intended to regulate, these procedures would often cede to the
good-cause exception.”).
The D.C. Circuit’s decision in Tennessee Gas Pipeline Co.
v. FERC, 969 F.2d 1141 (D.C. Cir. 1992), is instructive. In
Tennessee Gas Pipeline, the D.C. Circuit evaluated an agency’s
invocation of good cause based on the agency’s prediction of
rule evasion. At issue was a rule that required “advance notice
and disclosure by natural gas pipeline companies of the
construction of new facilities or the replacement of existing
ones.” Id. at 1142. The agency, the Federal Energy Regulatory
Commission (“FERC”), dispensed with notice-and-comment
procedures, arguing that such procedures could contribute to
35
environmental harm because the companies “may respond to the
proposed changes in the regulations by commencing construction”
to avoid regulatory uncertainty or the rule’s application to a
certain project. Id. at 1143. Even though the D.C. Circuit was
“hesitant to discount such forecasts” because they “necessarily
involve deductions based on expert knowledge of the Agency,” the
court rejected FERC’s argument because it had “provided little
factual basis for its belief that pipelines [would] seek to
avoid [the] future rule by rushing new construction and
replacements with attendant damage to the environment.” Id. at
1145. The D.C. Circuit noted that the agency had only cited one
case where relevant construction had previously harmed the
environment, and it found that the agency’s claim that it had
“ample practical experience on which to support” its prediction
did not “excuse the Commission’s failure to cite such examples
in support of its claim of a good cause exception.” Id. at 1145-
46. The court accordingly held that the agency had failed to
demonstrate sufficient cause for setting aside notice and
comment procedures. Id. at 1146.
Here, too, the DOL has failed to provide any evidence in
the record that supports its contention that a “massive rush” to
evade the IFR would have occurred if the DOL had provided
advance notice and comment. 85 Fed. Reg. at 63,901. Despite
pointing to “historical filing patterns” as evidence supporting
36
its conclusion, the statistics the DOL provides only indicate
the average number of LCAs it typically receives during the six
month period beginning in September. 85 Fed. Reg. at 63,901
(stating that the DOL receives an average of 147,123 LCAs during
this time period over the previous three years). While the Court
does not doubt that this number is substantial, it is hardly
evidence establishing the likelihood of rule evasion. Neither
does the DOL provide evidence that employers have made a
“‘massive rush’ to evade price changes” in the past. For
example, as the Stellar IT Plaintiffs note, there is no
indication that employers have rushed to submit LCAs each June
before the yearly publication of new wage rates for the year in
July. Stellar IT Pls.’ Mot., ECF No. 7-1 at 32. And even
assuming as true that “the lack of a spike each June is not
significant, because the yearly changes to the existing wage
rates are not nearly as dramatic as the changes to the
computational methodology set forth in the IFR,” Defs.’ Reply,
ECF No. 24 at 15, neither does the DOL provide any evidence of a
spike during the approximately four-month period between the
Executive Branch’s June announcement regarding the planned
change to the prevailing wage calculation and the IFR’s
promulgation in October.
It is true, however, that the D.C. Circuit has recognized
that some courts “have allowed use of the good cause exception
37
based on bare predictions of regulatory avoidance.” Tenn. Gas
Pipeline Co., 969 F.2d at 1146. For example, Defendants rely on
Mobil Oil Corp. v. Department of Energy, 728 F.2d 1477 (Temp.
Emer. Ct. App. 1983), in arguing that the DOL was not required
to offer “hard evidence” that rule evasion would occur. Defs.’
Reply, ECF No. 24 at 17-18. Mobil Oil involved a Federal Energy
Administration (“FEA”) regulation, issued without notice and
comment, that “equalize[d] prices charged to different classes
of customers by oil refiners during the energy crisis of the
early [1970s].” Tenn. Gas Pipeline Co., 969 F.2d at 1146. The
agency claimed that “advance notice of the regulation would lead
to regulatory avoidance by way of long-term contracts,” id., and
the Temporary Emergency Court of Appeals agreed, despite “no
showing that in fact [companies] would be injured during the
notice and comment period,” Mobil Oil Corp., 728 F.2d at 1492.
The D.C. Circuit, however has since distinguished Mobil Oil,
emphasizing that the court’s ruling was based on “special
circumstances” that are not present here. See Tenn. Gas Pipeline
Co., 969 F.2d at 1146. The D.C. Circuit explained that the facts
of Mobil Oil “set it apart” because “[i]t is well recognized
that prices can be changed rapidly to accommodate shifts in
regulatory policy.” Id. In contrast to the speed of commodity
price changes, the Court is not convinced that the filing of LCA
applications could increase so rapidly during a notice-and-
38
comment period such that it would produce significant harms to
the public interest—particularly in view of employers’ inability
to file an LCA earlier than six months prior to employment, as
well as the DOL’s failure to connect pandemic-related
unemployment with the types of occupations typically filled by
H-1B workers. The line of similar cases arising from the 1970s
energy crisis cited within the IFR are similarly
distinguishable. See, e.g., Nader v. Sawhill, 514 F.2d 1064,
1068-69 (Temp. Emer. Ct. App. 1975) (finding good cause existed,
though agency had failed to provide more than a cursory
justification for that finding, and “stress[ing] categorically
that our resolution of the procedural issues herein is founded
upon the unique circumstances in which this price increase was
formulated. Assuming less calamitous circumstances, we fully
expect that any future decisions will take the utmost advantage
of full and open public comment.”); DeRieux v. Five Smiths, 499
F.2d 1321, 1332 (Temp. Emer. Ct. App. 1974) (concluding there
was good cause “based upon facts so obvious that they may be
judicially noticed” where it was “apparent that there would have
ensued a massive rush to raise prices and conduct ‘actual
transactions’—or avoid them—before the freeze deadline”).
The Court therefore finds that the DOL did not sufficiently
justify its prediction that advance notice-and-comment
procedures would have been contrary to the public interest.
39
IV. Conclusion
For the reasons stated above, the Purdue Plaintiffs’ motion
for partial summary judgment, ECF No. 6, and the Stellar IT
Plaintiffs’ motion for partial summary judgment, ECF No. 7, are
GRANTED. The Purdue Defendants’ cross-motion for partial summary
judgment, ECF No. 19, and the Stellar IT Defendants’ cross-
motion for partial summary judgment, ECF No. 9, are DENIED. An
appropriate Order accompanies this Memorandum Opinion.
SO ORDERED.
Signed: Emmet G. Sullivan
United States District Judge
December 14, 2020
40