Amicus Curiae Brief — United Behavioral Health, et al., Petitioners v. D. K., et al.

No. 23-586

In the Supreme Court of the United States

United Behavioral Health and

Alcatel-Lucent Medical Expense Plan

for Active Management Employees,

Petitioners,

v.

David K., Kathleen K., and Amy K.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals for the Tenth Circuit

Brief of the ERISA Industry Committee and Chamber of

Commerce of the United States of America

as Amici Curiae in Support of Petitioners

Andrew Liazos

McDermott Will &

Emery LLP

200 Clarendon St., Fl. 88

Boston, MA 02116-5021

(617) 535-3800

aliazos@mwe.com

Michael B. Kimberly

Counsel of Record

Charles Seidell

McDermott Will & Emery LLP

500 North Capitol Street NW

Washington, DC 20001

(202) 756-8000

mkimberly@mwe.com

Counsel for Amici Curiae

Additional counsel on inside cover

Tara S. Morrissey

Jordan L. Von Bokern

U.S. Chamber Litigation Center

200 Clarendon St., Fl. 88

1615 H Street, NW

Washington, DC 20062

Counsel for the U.S. Chamber of Commerce

i

TABLE OF CONTENTS

Table of Authorities ..................................................... ii

Introduction and Interests of Amici Curiae.................... 1

Statement......................................................................3

A. Legal and rulemaking background ......................3

B. Factual and procedural background ....................7

Argument ..................................................................... 8

A. The lower court improperly approved

substantive changes to DOL’s regulations ........ 10

1. DOL’s litigating position amends,

rather than interprets, its regulations .......... 10

2. DOL’s amicus brief is not entitled to

deference..................................................... 12

B. Allowing the decision below to stand

would strike a dangerous blow to the APA ........ 14

1. Notice-and-comment rulemaking

fosters transparency and public

accountability ............................................. 14

2. The outcome below denies an opportunity for participation in a major

regulatory change ........................................ 17

Conclusion .................................................................. 21

ii

TABLE OF AUTHORITIES

Cases

AHA v. Bowen,

834 F.2d 1037 (D.C. Cir. 1987) ............................. 15

Bates v. United States,

522 U.S. 23 (1997) ................................................ 11

Batterton v. Marshall,

648 F.2d 694 (D.C. Cir. 1980)............................... 15

Black & Decker Disability Plan v. Nord,

538 U.S. 822 (2003) ............................................. 20

Chevron U.S.A. Inc. v. Echazabal,

536 U.S. 73 (2002) ................................................ 12

Chevron U.S.A. Inc. v. Natural Resources

Defense Council, Inc.,

467 U.S. 837 (1984) .............................................. 13

Christensen v. Harris County,

529 U.S. 576 (2000) ............................................. 16

Christopher v. SmithKline Beecham Corp.,

567 U.S. 142 (2012) ........................................ 13, 16

Chrysler Corp. v. Brown,

441 U.S. 281 (1979)........................................... 9, 16

FCC v. Fox Television Stations, Inc.,

556 U.S. 502 (2009) ............................................. 14

Guardian Fed. Savings & Loan Assoc. v.

Fed. Savings & Loan Ins. Corp.,

589 F.2d 658 (D.C. Cir. 1978) ......................... 15, 16

Kisor v. Wilkie,

139 S. Ct. 2400 (2019) .............................. 13, 14, 16

iii

Cases—continued

Metro. Life Ins. Co. v. Glenn,

554 U.S. 105 (2008) ................................................ 3

NAHB v. Defenders of Wildlife,

551 U.S. 644 (2007) .............................................. 12

NLRB v. SW General, Inc.,

580 U.S. 288 (2017) .............................................. 12

Pilot Life Ins. Co. v. Dedeaux,

481 U.S. 41 (1987) ................................................ 20

Russello v. United States,

464 U.S. 16 (1983) ................................................ 11

Smiley v. Citibank (S.D.), N.A.,

517 U.S. 735 (1996) .............................................. 16

Sprint Corp. v. FCC,

315 F.3d 369 (D.C. Cir. 2003) ............................... 17

Texaco v. FPC,

412 F.2d 740 (3d Cir. 1969) .................................. 15

United States v. Morton Salt Co.,

338 U.S. 632 (1950) ................................................ 8

Varity Corp. v. Howe,

516 U.S. 489 (1996) .............................................. 18

Statutes and regulations

5 U.S.C.

§ 553(b) ...................................................................9

§ 553(c) ................................................................. 15

29 U.S.C.

§ 1104(a).................................................................. 3

§ 1133(2) ................................................................. 3

iv

Statutes and regulations—continued

29 C.F.R.

§ 2560.503-1(g)(vii)(A) ......................................... 12

§ 2560.503-1(g)(vii)(B) ......................................... 12

§ 2560.503-1(f)(2) ................................................... 5

§ 2560.503-1(f)(3) ................................................... 5

§ 2560.503-1(g)(1) .............................................. 3, 5

§ 2560.503-1(g)(1)(i) ............................................... 3

§ 2560.503-1(g)(1)(ii) .............................................. 3

§ 2560.503-1(g)(1)(v)(B) ................................... 4, 11

§ 2560.503-1(g)(1)(vii) .................................. 4, 5, 11

§ 2560.503-1(g)(1)(vii) .......................................... 11

§ 2560.503-1(g)(1)(vii)(A)(i) ............................. 4, 11

§ 2560.503-1(h)(1) ................................................ 13

45 C.F.R. § 147.136(d) .................................................. 5

Claims Procedure for Plans Providing

Disability Benefits,

81 Fed. Reg. 92,316 ......................... 4, 5, 6, 7, 17, 19

Other authorities

ABC, Comment on 2016 Claims Procedure

Regulation Amendment for Plans Providing

Disability Benefits (Jan. 19, 2016) ........................ 18

Sean M. Anderson, ERISA Benefits Litigation:

An Empirical Picture, 28 A.B.A. J. Lab. &

Emp. L. 1 (2012) .................................................... 18

NBGH, Comment on 2016 Claims Procedure

Regulation Amendment for Plans Providing

Disability Benefits (Jan. 19, 2016) ........................ 18

v

Other authorities—continued

Pat McCarran, Three Years of the Federal

Administrative Procedure Act-A Study in

Legislation, 38 Geo. L. J. 574 (1950) ..................... 15

NFL Player Disability & Neurocognitive Benefit

Plan, Comment on 2016 Claims Procedure

Regulation Amendment for Plans Providing

Disability Benefits (Jan. 19, 2016) ...................... 6, 7

Unum Group, Comment on 2016 Claims

Procedure Regulation Amendment for Plans

Providing Disability Benefits (Jan. 19, 2016) ..........6

INTRODUCTION AND

INTERESTS OF AMICI CURIAE* 1

The petition in this case presents two questions of

broad public importance that are specific to the processing requirements under ERISA for denials of health

benefits. As the petition explains (at 22-28), underlying

the two questions presented is an even more fundamental

issue concerning the Administrative Procedure Act: May

a court, at the invitation of an agency in an amicus brief,

effectively amend regulations by judicial fiat, providing

the agency with an end-run around the APA’s notice-andcomment rulemaking procedures?

The answer to that question is an obvious no. But the

Tenth Circuit below disagreed, decreeing a new regulatory requirement for health-benefit denials that the Department of Labor, in dual 2015 and 2016 rulemakings,

expressly considered and chose to adopt only for disability-benefit denials and not for health-benefit denials.

If not corrected by this Court, the decision below will

stand as an invitation to agencies to file amicus briefs in

the courts of appeals, advocating for substantial changes

to their regulations without the bother (or transparency)

of APA rulemaking. In today’s day and age, when so much

lawmaking is undertaken by unaccountable federal bureaucrats, that is a deeply troubling prospect.

The ERISA Industry Committee (ERIC) is a national

nonprofit organization that exclusively represents large

employers throughout the United States in their capacity

*1 Pursuant to Rule 37.6, amici state that no counsel for any party

authored this brief in whole or in part and that no entity or person,

aside from amici, their members, or their counsel, made any monetary contribution intended to fund the preparation or submission of

this brief. Pursuant to Rule 37.2, counsel for amici gave notice of

amici’s intent to file this brief 10 days in advance of the filing.

2

as sponsors of employee benefit plans for their nationwide

workforces. With member companies that are leaders in

every sector of the economy, ERIC is the voice of large

employer plan sponsors on federal, state, and local public

policies impacting their ability to sponsor benefit plans

for active and retired workers, as well as their families.

The Chamber of Commerce of the United States of

America is the world’s largest business federation. It represents approximately 300,000 direct members and indirectly represents the interests of more than 3 million companies and professional organizations of every size, in

every industry sector, and from every region of the country. An important function of the Chamber is to represent

the interests of its members in matters before Congress,

the Executive Branch, and the courts. To that end, the

Chamber regularly files amicus briefs in cases, like this

one, that raise issues of concern to the nation’s business

community.

The questions at issue here directly implicate the interests of ERIC’s and the Chamber’s members. Many of

those members are large employers who sponsor healthbenefit plans that will see costs rise as a direct result of

the decision below. Others are members of the regulated

public more generally, who have a strong interest in ensuring that they have a voice in notice-and-comment rulemaking. ERIC and the Chamber are both frequent participants in rulemakings generally and before the Department of Labor, particularly. It is a core part of their missions to ensure that DOL complies with its notice-andcomment obligations and issues regulations that are practically workable and grounded in law.

3

STATEMENT

A. Legal and rulemaking background

1. The Employee Retirement Income Security Act of

1974 (ERISA) provides minimum standards for voluntarily established benefit plans in private industry. ERISA

imposes fiduciary duties on plan administrators, requiring that they “discharge [their] duties with respect to a

plan solely in the interest of the participants and beneficiaries.” 29 U.S.C. § 1104(a); see Metro. Life Ins. Co. v.

Glenn, 554 U.S. 105, 115 (2008). Consistent with this

special standard of care, Section 503(2) of ERISA requires all employee benefit plans to “afford a reasonable

opportunity to any participant whose claim for benefits

has been denied for a full and fair review.” 29 U.S.C.

§ 1133(2). And to make sure these requirements have

teeth, ERISA provides for “judicial review of individual

claim denials.” Metro. Life, 554 U.S. at 115.

The Department of Labor has promulgated regulations to implement ERISA’s “full and fair review” standard. Those regulations establish a variety of substantive

and procedural requirements that apply when a plan administrator denies a claim. For example, all adverse benefit termination notifications must be written “in a manner

calculated to be understood by the claimant” and must include “[t]he specific reason or reasons for the adverse determination” and “[r]eference to the specific plan provisions on which the determination is based.” 29 C.F.R.

§ 2560.503-1(g)(1), (g)(1)(i)-(ii).

When a claim for ERISA-covered benefits of any kind

results in an adverse determination “based on a medical

necessity,” DOL regulations specify that the notification

must include “either an explanation of the scientific or

clinical judgment for the determination, applying the

4

terms of the plan to the claimant’s medical circumstances, or a statement that such explanation will be provided

free of charge upon request.” 29 C.F.R. § 2560.5031(g)(1)(v)(B).

The regulation imposes the same plus additional

requirements for an adverse determination concerning

disability benefits. In that distinct context, the notification must also contain “an explanation of the basis for

disagreeing with or not following” “[t]he views presented

by the claimant to the plan of health care professionals

treating the claimant.” 29 C.F.R. § 2560.503-1(g)(1)(vii)(A)(i). The same explanation is not required for

notifications of denials of health benefits. Id. § 2560.5031(g)(1)(vii) (specifying that this requirement applies only

“[i]n the case of an adverse benefit determination with

respect to disability benefits”).

2. These different requirements for health-benefit

and disability-benefit determinations grew out of the Affordable Care Act of 2010. See 81 Fed. Reg. 92,316 (Dec.

19, 2016). The ACA “enhance[d]” ERISA’s requirements

“with added procedural protections and consumer safeguards for claims for group health benefits,” but not disability benefits. Ibid. DOL implemented the ACA by,

among other things, promulgating a new rule in 2015,

codifying “the right of claimants to respond to new and

additional evidence and rationales and the requirement

for independence and impartiality of the persons involved

in making benefit determinations.” Ibid. (citing 80 Fed.

Reg. 72,192).

About one year later, DOL undertook a new rulemaking to ensure that its rules governing disability claims procedures did not fall behind those in the health-benefit context. Id. at 92,317. Its goal was to “avoid creating differ-

5

ences in the text of parallel provisions” applicable to the

two kinds of benefits determinations “absent a reason

that addresses a specific issue for disability claims” that

is not also an issue for health claims. 81 Fed. Reg. at

92,319. Thus, using “the amendments to the claims regulation for group health plans” as a starting point (id. at

92,317), DOL “carefully selected” certain “basic improvements in procedural protections and consumer safeguards” under the ACA for incorporation into the disability-benefit context (id. at 92,318).

But the updated rule “include[d] several adjustments

* * * to account for the different features and characteristics of disability benefit claims.” Ibid. The regulations applicable to disability benefits omit, for example, the requirement that plans make review by an independent review organization (IRO) available, as guaranteed in the

health-benefit context. 45 C.F.R. § 147.136(d). DOL also

“accommodated differences between health and disability claims by allowing more time for decisions on disability claims.” 81 Fed. Reg. at 92,321 n.12 (citing 29 C.F.R.

§ 2560.503-1(f)(2)-(3)).

This case implicates another of DOL’s context-sensitive adjustments. As just noted, 29 C.F.R. § 2560.5031(g)(1)(vii) requires a third-party administrator denying a

claim for disability benefits to provide “an explanation of

the basis for disagreeing with” the opinion of the claimant’s treating physician. There is no similar requirement

stated in 29 C.F.R. § 2560.503-1(g)(1), concerning denials of health benefits. Thus, an administrator denying a

claim for health benefits need not expressly state the reasons for disagreeing with the opinions of the claimant’s

treating physicians or therapists.

6

Commenters offered several reasons why this difference was warranted. Unlike disability claims, they noted,

most health-benefit claims involve limited treatment over

a short time concerning isolated issues. See 81 Fed. Reg.

at 92,318. A treating physician in the health-benefit context is therefore less likely to have a deep understanding

of the patient’s overall condition and long-term treatment

needs, limiting the relative value of his or her opinion.

Ibid. “Health claims decisions [thus] typically look only

at whether the product or service sought to be covered is

appropriate” based on coded inputs, not qualitative judgments. NFL Player Disability & Neurocognitive Benefit

Plan, Comment on 2016 Claims Procedure Regulation

Amendment for Plans Providing Disability Benefits 5

(Jan. 19, 2016), perma.cc/8BM5-6GX7.

Moreover, health-benefits determinations typically

occur against the backdrop of an immediate medical need.

Ibid. These determinations therefore must be resolved

quickly, so claimants and their doctors can know what

will be covered. “The vast majority of medical claims”

are thus “determined electronically with little or no human involvement * * * almost instantaneously.” Unum

Group, Comment on 2016 Claims Procedure Regulation

Amendment for Plans Providing Disability Benefits, at 2

(Jan. 19, 2016), perma.cc/DSN2-9MU6.

In the disability-benefits context, the opposite is true.

First, the treating physician is more likely to be close to

the patient and have unique insights into her condition

and abilities, warranting additional attention to the physician’s assessment of the patient’s circumstances and

prognosis. See generally 81 Fed. Reg. at 92,318. To put it

another way, “[d]isability claims decisions require a sensitive, often much more complex holistic analysis of the

7

claimant’s physical and mental condition,” which treating doctors are well positioned to address. NFL Plan Comment, supra, at 5.

In addition, disability benefits are lower volume and

“more like pension benefits than health benefits” in that

they “are intended to replace income” over the long term.

Ibid. Given the less urgent, lower volume nature of disability-benefit determinations, the process can be more collaborative and deliberative, with more voices directly involved. That stands in contrast with health-benefit determinations, which “are typically susceptible to automated

processing” and as to which requiring fully articulated

findings would be unrealistically burdensome. Ibid.

B. Factual and procedural background

This case concerns the denial of health benefits—not

disability benefits—by United Behavioral Health as thirdparty administrator for a health-benefits plan. The plaintiffs in this case allege, among other things, that UBH was

required to but did not furnish an adequate explanation of

the basis for disagreeing with or not following the views

of Amy K.’s treating physician.

UBH’s denial of benefits was affirmed at every stage

of internal review. The plaintiffs here then commenced

suit in federal district court under ERISA.

The district court entered summary judgment for the

plaintiffs. Pet. App. 36a. In doing so, it faulted UBH

chiefly for failing to provide its “full reasoning” to respondents in its denial letters, including failure to give a

sufficient explanation of the basis for disagreeing with the

views of Amy’s treating physician. Pet. App. 63a. DOL

did not file a statement of interest or take any other position in the litigation before the district court.

8

UBH appealed to the Tenth Circuit. After UBH had

filed its principal brief, DOL submitted an amicus brief

supporting affirmance. Analogizing to the disabilityclaims context, DOL’s brief purported to “interpret” the

regulations applicable to health-benefit denials as imposing the same requirements as the regulations applicable to

disability-benefit denials. DOL Amicus Br. 12-23. In doing so, DOL did not acknowledge that these distinct requirements were adopted by notice-and-comment rulemaking for disability-benefit claims only, and not for

health-benefit claims.

The Tenth Circuit adopted DOL’s position. Pet. App.

18a-28a. The court “recognize[d] the textual difference in

the ERISA disability and ERISA medical regulations” but

“disagree[d]” that the express inclusion in one and exclusion in the other had any impact on UBH’s regulatory duties. Pet. App. 20a. It therefore rejected UBH’s argument

that health-benefit plan administrators are not required to

explain their disagreement with medical professionals’

opinions in their denial letters to satisfy ERISA’s procedural requirements. Pet. App. 28a.

ARGUMENT

The Tenth Circuit’s revision of properly promulgated

regulations by judicial decree, at the invitation of an

agency that aimed to sidestep the APA, is a matter of

enormous practical consequence warranting the Court’s

immediate attention and correction.

The APA, long hailed as the fundamental charter of

the administrative state, was designed “as a check upon

administrators whose zeal might otherwise have carried

them to excesses not contemplated in legislation creating

their offices.” United States v. Morton Salt Co., 338 U.S.

632, 644 (1950). At its core is the requirement that “an

9

agency shall afford interested persons general notice of

proposed rulemaking and an opportunity to comment before a substantive rule is promulgated.” Chrysler Corp. v.

Brown, 441 U.S. 281, 313 (1979). Thus, when an agency

wishes to make a regulatory change, it must publish a proposed rule in the Federal Register, allowing the public to

comment, and respond to those comments. See generally

5 U.S.C. § 553(b).

That is, of course, not what DOL did below. The requirements for claims administrators are governed by detailed, written regulations that were promulgated through

the APA’s inclusive notice-and-comment rulemaking process. In its brief before the Tenth Circuit, DOL adopted,

for the first time, a revisionist interpretation of those regulations, significantly altering claims administrators’ obligations in health-benefits denial cases. And it induced

the Tenth Circuit to adopt its new regulatory standard

through litigation rather than rulemaking.

That is precisely what the APA prohibits. DOL may

not announce a new regulatory requirement in an amicus

brief, and the Tenth Circuit was not at liberty to adopt it.

To allow agencies to backdoor regulatory changes like

this would vitiate the procedural protections at the heart

of the modern administrative state. And in skirting the

APA’s procedural requirements, DOL was deprived of the

benefit of well-informed views of stakeholders, which

would have highlighted the key differences between the

disability and health-benefit contexts. The Court should

grant UBH’s petition and reject DOL’s and the Tenth Circuit’s revision of the regulations at issue here.

10

A. The lower court improperly approved

substantive changes to DOL’s regulations

The department having adopted considered distinctions between the rules for health-benefit denials and disability benefit denials in a duly promulgated regulation

following notice and comment, the Tenth Circuit was not

at liberty to implement changes to the scheme by judicial

fiat, even at DOL’s invitation in its amicus brief.

The regulations at issue here do not interpret statutory language. They are policy-based, gap-filling rules.

They thus reflect DOL’s exercise of executive policymaking judgment to implement ERISA, and substantive

changes to them must be promulgated, if at all, through

new notice-and-comment rulemaking. This Court’s immediate review is necessary to confirm these critically important points.

1. DOL’s litigating position amends, rather

than interprets, its regulations

In its amicus brief before the Tenth Circuit, DOL

urged the court to adopt a new, extra-regulatory requirement that UBH must “demonstrate” that it actually reviewed and rejected the opinions of a claimant’s treating

providers “in the denial letter provided to the claimant,

and not by simply citing the evidence in the appeal denial

letter.” DOL Amicus Br. at 15-16. In offering this new

view, DOL attempted to eliminate—by judicial order rather than APA rulemaking—the different standards for

denials in the disability-benefits and health-benefit contexts. DOL’s position is not an interpretation of the regulations, but a revision of them.

The relevant regulations specify that where (as here)

a health-benefit administrator denies a claim based on

medical necessity, the administrator must provide “an

11

explanation of the scientific or clinical judgment for the

determination, applying the terms of the plan to the claimant’s medical circumstances.” 29 C.F.R. § 2560.5031(g)(1)(v)(B). The requirements for “an adverse benefit

determination with respect to disability benefits” are laid

out in a different subsection of the regulation. See 29

C.F.R. § 2560.503-1(g)(1)(vii).

As a starting point, the health-benefit provision contains an identical requirement to the disability-benefit

provision, that denials based on medical necessity contain

“an explanation of the scientific or clinical judgment for

the determination.” 29 C.F.R. § 2560.503-1(g)(1)(vii).

But the disability-specific subsection also requires that a

disability-benefit denial include “an explanation of the

basis for disagreeing with or not following * * * [t]he

views presented by the claimant to the plan of health care

professionals treating the claimant.” 29 C.F.R.

§ 2560.503-1(g)(1)(vii)(A)(i). The provision applicable to

health-benefit claim denials omits this language.

Even if there were not already clear evidence from the

2016 rulemaking that the respective inclusion and exclusion of this requirement was considered and intentional,

the standard rules of construction confirm it. After all, it

is fundamental with respect to regulations, just like statutes, that “where [an agency] includes particular language in one section of a [regulation] but omits it in another section of the same [regulation], it is generally presumed that [the agency] acts intentionally and purposely

in the disparate inclusion or exclusion.” Bates v. United

States, 522 U.S. 23, 29–30 (1997) (quoting Russello v.

United States, 464 U.S. 16, 23 (1983)). That alone is

enough to resolve the regulatory interpretation question.

12

There is more. First, under the expressio unius canon,

it is understood that “expressing one item of [an] associated group or series excludes another left unmentioned.”

NLRB v. SW General, Inc., 580 U.S. 288, 302 (2017)

(quoting Chevron U.S.A. Inc. v. Echazabal, 536 U.S. 73,

80 (2002)). Here, DOL expressly stated a number of procedural requirements for health-benefits denials, but it

did not include the requirement that the administrator explain the specific basis for disagreeing with the claimant’s

treating provider. See 29 C.F.R. § 2560.503-1(g)(vii)(A)(B). Meanwhile, DOL has shown that it knows how to impose a requirement to respond to the opinions of treating

physicians when it wishes to. It did not do so here, and

neither DOL in an amicus brief, nor the Tenth Circuit in a

judicial opinion, was free to override that considered

omission.

Second, DOL’s interpretation would render paragraph (vii)(A)(i) superfluous. If, as DOL asserted, there

were no need to state an express requirement that administrators explain their disagreement with the claimant’s

treating physician because such requirement is implicit in

the broader regulatory scheme, then paragraph (vii)(A)(i)

would accomplish nothing. A reading under which language is made “mere surplusage” is disfavored. NAHB v.

Defenders of Wildlife, 551 U.S. 644, 669 (2007).

2. DOL’s amicus brief is not entitled to

deference

Because it is not reasonably characterized as an interpretation of the regulation, so much as an amendment of

it, DOL’s amicus brief is not entitled to deference.

Indeed, DOL never offered a persuasive account for

its position before the Tenth Circuit. It asserted below

that “while subsection (g) separates regulations for dis-

13

ability and group health claims, many relevant provisions

* * * apply to” all employee benefit plans. DOL Amicus

Br. 18. For evidence, it cited the regulation’s requirement

that “[e]very employee benefit plan shall establish and

maintain a procedure by which a claimant shall have a reasonable opportunity to appeal an adverse benefit determination.” 29 C.F.R. § 2560.503-1(h)(1). But that reasoning backfires—again, it shows only that the Secretary

knew how to draft regulations applicable to all benefits

determinations and did so when that was her intention.

Yet here, she adopted a requirement expressly limited to

disability-benefit denials, indicating an intent that the requirement not apply to health-benefit denials.

Against this background, no court owes any deference to the positions in DOL’s amicus brief. “First and

foremost, a court should not afford Auer deference unless

the regulation is genuinely ambiguous.” Kisor v. Wilkie,

139 S. Ct. 2400, 2415 (2019). That is, an agency’s interpretation of its own regulation would only even be entitled to deference if the Court had “exhaust[ed] all the ‘traditional tools’ of construction” and found an ambiguity.

Ibid. (quoting Chevron U.S.A. Inc. v. Natural Resources

Defense Council, Inc., 467 U.S. 837, 843 n.9 (1984)).

There is none here. The regulation’s plain text expressly

distinguishes between the disability-benefits and healthbenefits contexts, and the full toolbox of the canons of

statutory interpretation confirms that the distinction was

deliberate and must be given effect. “The regulation then

just means what it means—and the court must give it effect, as the court would any law.” Ibid.

Even if it were otherwise, courts “should decline to

defer to a merely ‘convenient litigating position.’” Kisor,

139 S. Ct. at 2417 (quoting Christopher v. SmithKline

14

Beecham Corp., 567 U.S. 142, 155 (2012)). This Court

has announced a “general rule * * * not to give deference

to agency interpretations advanced for the first time in legal briefs.” Id. at 2417 n.6. That is especially so here,

given that “a court may not defer to a new interpretation,

whether or not introduced in litigation, that creates ‘unfair surprise’ to regulated parties.” Id. at 2417-2418. Applying these factors in the past, this Court has refused to

credit agency interpretations that upset regulated parties’

settled expectations. Ibid. The same was warranted below: DOL’s new interpretation would dramatically alter

the required content of claim denial letters, forcing

health-benefit plans to reshape their processes. A counter-textual reading of a regulation—one announced for

the first time in litigation and which changes the clear requirements of a statutory scheme, thereby disrupting the

settled expectations of regulated entities—is owed no deference and should be rejected.

B. Allowing the decision below to stand would

strike a dangerous blow to the APA

Proper enforcement of agencies’ rulemaking obligations is a matter of surpassing practical importance that

warrants an immediate grant of certiorari.

1. Notice-and-comment rulemaking fosters

transparency and public accountability

“Congress enacted the APA in 1946 * * * to serve as

‘the fundamental charter of the administrative state.”

Kisor, 139 S. Ct. at 2418. The APA was a “working compromise, in which broad delegations of discretion were

tolerated as long as they were checked by extensive procedural safeguards.” FCC v. Fox Television Stations, Inc.,

556 U.S. 502, 537 (2009).

15

Courts have long recognized that the APA’s noticeand-comment procedures serve essential policy goals.

Chief among them is the value of public participation in

lawmaking. See 5 U.S.C. § 553(c) (“[T]he agency shall

give interested persons an opportunity to participate in

the rule making through submission of written data,

views, or arguments.”). In particular, notice-and-comment procedures “reintroduce public participation and

fairness to affected parties after governmental authority

has been delegated to unrepresentative agencies.” Batterton v. Marshall, 648 F.2d 694, 703 (D.C. Cir. 1980).

Public participation in the administrative lawmaking

process comes with a host of benefits, paramount among

them, transparency. At the onset of the Cold War, the

APA’s lead sponsor, Senator Pat McCarran, boasted that

the Act “light[s] up our democratic processes at a time

when we need to know that our system continues to function despite gathering darkness on other continents.” Pat

McCarran, Three Years of the Federal Administrative Procedure Act—A Study in Legislation, 38 Geo. L. J. 574, 589

(1950).

Additionally, the APA’s notice-and-comment procedures “enable[] the agency promulgating [a] rule to educate itself before establishing rules and procedures which

have a substantial impact on those who are regulated.”

Batterton, 648 F.2d at 704 (quoting Texaco v. FPC, 412

F.2d 740, 744 (3d Cir. 1969)). When an agency is required to collect, consider, and respond to public comments, there is a greater chance that “the agency will

have before it the facts and information relevant to a particular administrative problem, as well as suggestions for

alternative solutions.” AHA v. Bowen, 834 F.2d 1037,

1044 (D.C. Cir. 1987) (quoting Guardian Fed. Savings &

16

Loan Assoc. v. Fed. Savings & Loan Ins. Corp., 589 F.2d

658, 662 (D.C. Cir. 1978) (cleaned up)). The “notice-andcomment procedures of the Administrative Procedure

Act” similarly were “designed to assure due deliberation,” improving substantive outcomes. Smiley v. Citibank (S.D.), N.A., 517 U.S. 735, 741 (1996).

In the end, all of the virtues of the notice-and-comment system serve the ends of legitimacy. “Public rulemaking procedures increase the likelihood of administrative responsiveness to the needs and concerns of those affected.” Guardian Fed. Savings & Loan, 589 F.2d at 662.

Thus, “[i]n enacting the APA, Congress made a judgment

that notions of fairness and informed administrative decisionmaking require that agency decisions be made only

after affording interested persons notice and an opportunity to comment.” Chrysler Corp., 441 U.S. at 316.

These aspects of “public participation tend[] to promote

acquiescence in the result even when objections remain as

to substance.” Guardian Fed. Savings & Loan, 589 F.2d

at 662.

For all of these reasons, courts have carefully policed

agencies’ attempts to elude the APA’s notice-and-comment requirements. In Christensen v. Harris County, 529

U.S. 576 (2000), for example, this Court declined to defer

to DOL’s interpretation of a regulation in an opinion letter

on the basis that deference would “permit the agency, under the guise of interpreting a regulation, to create de facto

a new regulation.” Id. at 588; accord Kisor, 139 S. Ct. at

2415. Attempts such as these frustrate the core purposes

of notice-and-comment rulemaking. Christopher, 567

U.S. at 159. The Tenth Circuit was wrong to countenance

DOL’s evasion of the APA’s carefully crafted requirements below.

17

2. The outcome below denies an opportunity for

participation in a major regulatory change

a. DOL’s effort to circumvent the APA with a latestage amicus brief was inconsistent with the statute’s

core values. Most significantly, by announcing a substantive alteration of longstanding regulations in an amicus

brief, DOL effectively excluded the public from participating in the policymaking process. These procedures are

not “arbitrary hoops through with federal agencies must

jump without reason”—instead, they “improve[] the

quality of agency rulemaking” by providing the agency

with “diverse public comment.” Sprint Corp. v. FCC, 315

F.3d 369, 373 (D.C. Cir. 2003).

Taking and responding to public comment would

have produced a better policy in this case. As they had

done in 2016, interested parties would have emphasized

the important differences between disability and healthbenefit claims. See supra, pages 5-7.

At bottom, health and disability benefits serve fundamentally different purposes—whereas one reimburses for

one-off medical expenses, the other replaces income for

the long term. Decisions in one context need to be made

relatively quickly, making detailed reviews of and responses to treating-physician opinions impractical. Decisions in the other context are less urgent and implicate a

more comprehensive review. And unlike health-benefit

claims, which are decided automatically based on coding

rules, disability claims involve more holistic assessments

as to which the opinions of doctors with longstanding and

detailed understanding of the patient may be entitled to

greater weight. 81 Fed. Reg. at 92,318.

The regulated public could have brought other important observations to DOL’s attention. For example, a

18

2012 study indicated that disability claims accounted for

64.5% of all ERISA benefits litigation, compared to 14.3%

for health-benefit claims—despite that “fewer private

employees participate in disability plans than in other

types of plans.” Sean M. Anderson, ERISA Benefits Litigation: An Empirical Picture, 28 A.B.A. J. Lab. & Emp. L.

1, 7 & Fig. 2 (2012). Given the holistic nature of disability

claim processing, arguments in disability cases are more

likely to focus on asserted conflicts of interest or to ask

for de novo consideration of the plan’s decision. Id. at 11.

Imposing more demanding procedural requirements at the

outset in disability cases therefore may be justified by a

preference to keep disputes from maturing into court

cases—and to make judicial review easier when they do.

Comments also would have alerted DOL to the administrative burdens that extending the disclosure requirements for disability-benefits determinations into the

health-benefit context would impose on claim administrators. The Court has recognized Congress’s desire in the

ERISA context to afford claimants “enhanced protection

for their benefits, on the one hand, and, on the other, its

desire not to create a system that is so complex that administrative costs, or litigation expenses, unduly discourage employers from offering welfare benefit plans in the

first place.” Varity Corp. v. Howe, 516 U.S. 489, 497

(1996). Commenters to the 2016 disability rule expressed

these precise concerns. See, e.g., ABC, Comment on 2016

Claims Procedure Regulation Amendment for Plans

Providing Disability Benefits, at 1-2 (Jan. 19, 2016)

perma.cc/VJB9-EHE2; NBGH, Comment on 2016

Claims Procedure Regulation Amendment for Plans

Providing Disability Benefits at 2-3 (Jan. 19, 2016),

perma.cc/NLD9-4VQY.

19

DOL was obligated to hear these and other parties’

concerns and to determine whether the additional administrative burdens are justified before changing its rules as

it did in this case.

For their part, neither ERIC nor the Chamber takes a

position on the wisdom of DOL’s proposed rule change.

The point for now is a simpler one: The only legitimate

process for an agency to propose rules and collect public

comments is through APA notice-and-comment rulemaking. When DOL attempts to circumvent notice-and-comment rulemaking as it has done in this case, trade groups

and other interested parties lack the opportunity to develop and convey their positions under the procedural

framework and protections afforded by the APA—the precise problem with DOL’s approach below.

b. Rather than hew to an appropriately narrow

judicial role, the Tenth Circuit accepted DOL’s invitation

to rewrite the department’s ERISA regulations in a judicial opinion. It “recognize[d] the textual difference in the

ERISA disability and ERISA medical regulations,” but

trampled the important linguistic distinction. Pet. App.

20a. In doing so, it repeated DOL’s basic interpretive

errors. The lower court claimed, for example, that the

disability-benefit regulation “was merely making explicit

requirements for claims review that were already required” (Pet. App. 21a), ignoring DOL’s own explanation

in 2016 that the rule “revises” the disability regulations

as “a process enhancement” that alters the “procedural

steps for claimants to get an explanation of the reasons

the plan disagrees with the views of its own consulting

experts.” 81 Fed. Reg. at 92,321.

At its core, the court of appeals reasoned that its new

judicially imposed requirement flows from an ERISA

20

fiduciary’s standing obligation to “provide a full and fair

review of the evidence presented.” Pet. App. 23a. But this

Court has already held that “ERISA does not support

judicial imposition of a treating physician rule.” Black &

Decker Disability Plan v. Nord, 538 U.S. 822, 834 n.4

(2003). And, as discussed above, DOL has not seen fit to

adopt the Tenth Circuit’s requirement through the APA’s

proper rulemaking procedures.

While “Congress ‘expect[ed]’ courts would develop

‘a federal common law of rights and obligations under

ERISA-regulated plans,” (Pilot Life Ins. Co. v. Dedeaux,

481 U.S. 41, 56 (1987)), “the scope of permissible judicial innovation is narrower in areas where other federal

actors are engaged” (Black & Decker, 538 U.S. at 831).

The Tenth Circuit’s choice to act where Congress and

DOL have not—at least not through the appropriate lawmaking channels—runs counter to both its limited role in

crafting ERISA requirements and its obligation to ensure

that DOL follows proper steps when doing so. It is tremendously important to the regulated public that the

Court grant review in this case and say so.

21

CONCLUSION

The Court should grant the petition.

Respectfully submitted.

TARA S. MORRISSEY

JORDAN L. VON BOKERN

U.S. Chamber Litigation Ctr.

200 Clarendon St., Fl. 88

1615 H Street, NW

Washington, DC 20062

Counsel for the Chamber

of Commerce of the United

States of America

MICHAEL B. KIMBERLY

Counsel of Record

CHARLES SEIDELL

McDermott Will & Emery LLP

500 North Capitol Street NW

Washington, DC 20001

(202) 756-8000

mkimberly@mwe.com

ANDREW LIAZOS

McDermott Will & Emery LLP

200 Clarendon St., Fl. 88

Boston, MA 02116-5021

Counsel for Amici Curiae