Petition for Writ of Certiorari — Long Island Care at Home, Ltd. v. Coke

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No. 0413]

5 MAR 29 2005

OFFICE OF THE CLERK

IN THE

Supreme Court of the United States

LONG ISLAND CARE AT HOME, LTD. and MARYANN OSBORNE,

Petitioners,

—_f

EVELYN COKE,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE SECOND CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

DANIEL S. ALTER, EsqQ.*

C/O ALTER & ALTER

300 East 42nd Street, 10th Floor

New York, New York 10017

(212) 867-7777

Counsel for Petitioners

*Counsel of Record

QUESTIONS PRESENTED

1. Whether 29 C.F.R. § 552.109(a)—which has exempted

third-party employers of home health care aides from

federal minimum wage and overtime pay requirements

for the past 30 years—warrants judicial deference and is

therefore valid and enforceable.

2. Whether a court may deny Skidmore deference to an

agency regulation, and thereby invalidate the rule, with-

out first affording interested parties an opportunity to

submit evidence in support of the regulation’s “power to

persuade.”

RULE 29.6 STATEMENT

Petitioner Long Island Care at Home, Ltd. has no par-

ent company, and there are no publicly held companies

that hold any stock of Long Island Care at Home, Ltd.

TABLE OF CONTENTS

QUESTIONS PRESENTED ........cccccccccccccce

RULE 29.6 STATEMENT .......cccccccccccccccces

TABLE OF AUTHORITIES. ...............ssceeeee

SE EPCIEE MERE WT cccccccccsosccccecsscsccesecses

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STATUTORY AND REGULATORY

PROVISIONS INVOLVED...................

STATEMENT OF THE CASE .........ccccccccseces

1. The Statutory and Regulatory

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Be | BRNO ROONEY ccc ccccsscccccces muna

3. The Effects of Invalidating 29 C.F.R.

UO ca awdbvdovcsdaccscadavcadesacs

REASONS FOR GRANTING THE PETITION ..

This Cases Raises Issues of

Exceptional Importance .................

This Court Needs to Resolve an

Important Circuit Split Regarding

the Enforceability of 29 C.F.R.

EE CAs Gdachiudaesianeedécnesenss

secant iit ieee nmeitiiis

PAGE

3. The Court of Appeals’ Decision

Conflicts with the Consistent

Decisions of this Court Regarding

Judicial Deference to Agency

Rulemaking .........-:seseeeeeeeeeeeeeeees 17

CONCLUSION .........-eceececceeeeeerecseeeeeeees 27

Appendices:

Appendix A—Decisions and Orders of the

United States Court of Appeals For

the Second Circuit ...........eeeeeeeeeereeeeees la

Appendix B—Decision of the United States

District Court for the Eastern District

of New York ..........sceceeeeeesececeeceeeeres 36a

Appendix C—Brief of the Secretary of Labor

as Amicus Curiae.......--.--eeeeereeeeeeceeces 55a

Appendix D—Sworn Statements Submitted

in Support of Petitioners’ Motion to

Stay the Issuance of the Mandate ............ 79a

TABLE OF AUTHORITIES

Cases: : | PAGE

Air Brake Sys., Inc. v. Mineta, 357 F.3d 632

ey Gay: ORs dccccecdaasenceveccisehieeenscaice 23, 26

American Medical Ass’n_v. United States,

887 F.2d 760 (7th Cir. 1989) ................. 20

Auer v. Robbins, 519 U.S. 452 (1997)............ 21

Barnhart v. Walton, 535 U.S. 212 (2002)..... 5S, 23, oe

Boesche vy. Udall, 373 U.S. 472 (1963)........... 22, 25

Brown v. United States, 327 F.3d 1198

Cees Se SD nc cdckccdikinesdscadasadewu 23

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

‘ Defense Council, Inc., 467 U.S. 837

CP véicusensscadcassaiacesnisatéuareninise passim

Christensen v. Harris County, 529 U.S. 576

GREE < 6c binwebuadscassecacudsssaeianeaeeuniene 18, 21

Chrysler Corp. v. Brown, 441 U.S. 281 (1979) .. 18

Coke v. Long Island Care at Home, Ltd.,

267 F. Supp. 2d 332 (E.D.N.Y. 2003),

aff’d in part and rev'd in part,

376 F.3d 118 (2d Cir. 2004) ...............0.. 15

Edelman v. Lynchburg College, 535 U.S. 106

CGD vaiv io vkncandacdsnceagedcabansdtiatcisceae 18, 22

Johnson v. Volunteers of America, Inc.,

215 F.3d 559 (10th Cir. 2001)............ 12, 15, 16

Madison vy. Resources for Human Dev., Inc.,

39 F. Supp. 2d 542 (E.D. Pa. 1999).....-----

Norwegian Nitrogen Products Co. v.

United States, 288 U.S. 294 (1933)......+++

Olmstead v. Zimring, 527 U.S. 581 (1999).....--

Pesquera Mares Australes Ltda. v.

United States, 266 F.3d 1371

(Fed. Cir. 2001) .......-seeeeeeeeeeeeneereeeees

Rice v. Souix City Memorial Park

Cemetery, Inc., 349 U.S. 70 (1955S) ...ccccees

Skidmore v. Swift & Co., 323 U.S. 134 (1944)...passim

Thomas Jefferson University v. Shalala,

512 U.S. 504 (1994) 2.0... ccc cee eee eee eeeeeeee 18, 21

Terwilliger v. Home of Hope, Inc., :

21 F. Supp. 2d 1294 (N.D. Okla. 1998) ..... 16

Udall v. Tallman, 380 U.S. 1 (1965)....---++++++: 22

United States v. City of Fulton, 475 U.S. 657

(1986) ......cccccccccccccccccccccccssscscoeseees 25

United States v. Mead Corp., 533 U.S. 218

(2001) ......eeeeececccccccccccccesssscsccneseess passim

United States v. Shimer, 367 U.S. 374 (1961) ... 25

Statutes, Rules, & Regulations:

5 U.S.C. § SS3(D)(3 MA)... eee eee ee eter eee eerees 20

29 U.S.C. § 213(a)(15S) ..... cence eee eee eee eeeeeeeees passim

29 C.F.R. Part 552 ........cceeeeee eee ceeneeeeeecees 20

29 CPR. § SSZ.AE) cccccccccccccccccscsscsccsescss

29 C.F.R. § $52.3 (2003) ..........ccccccccccccees 4

29 C.F.R. § F526 (BOGS) oc cccccccccccccccccccccses passim

29 C.F.R. § 552.109(a) (2003) ................08. passim

Statutory & Regulatory History:

H.R. Conf. Rep. No. 93-953 (1974), reprinted

he 8974 UBAL.AAN. BOOS cccccsccscescoccce 4

39 Fed. Reg. 35,382 (Oct. 1, 1974).............-. 4,5

40 Fed. Reg. 7404 (Feb. 20, 1975).............05. 4,5

66 Fed. Reg. 5481 (Jan. 19, 2001)................ 21

67 Fed. Reg. 16,668 (April 8, 2002).............. 24

Petitioners Long Island Care at Home Ltd. and Maryann

Osborne (“Petitioners”) respectfully petition this Court for

a writ of certiorari to review the judgment of the United

States Court of Appeals for the Second Circuit in this case.

OPINIONS BELOW

The opinion of the court of appeals is reported at 376

F.3d 118. (1a-30a).' The opinion of United States Dis-

trict Court for the Eastern District of New York is

reported at 267 F. Supp. 2d 332. (36a-54a).

JURISDICTION

The judgment of the court of appeals was entered on

July 22, 2004. A petition for rehearing with suggestion

for rehearing en banc was denied on January 10, 2005

(31la-32a). Petitioners’ motion to stay issuance of the

mandate was granted by the court of appeals on March

22, 2005. (33a-35a). The jurisdiction of this Court is

invoked under 28 U.S.C. § 1254(1).

STATUTORY AND REGULATORY

PROVISIONS INVOLVED

1. In pertinent part, section 13(a)(15) of the Fair

Labor Standards Act (“FLSA”), 29 U.S.C. § 213(a)(15)

(“§ 213(a)(15)”) provides:

(a) Minimum wage and maximum hour require-

ments

The provisions of section 206 (except subsection (d)

in the case of paragraph (1) of this subsection) and

: Numbers followed by the letter “a” within parentheses indi-

cate page references to the appendix to this petition.

section 207 of this title shall not apply with respect

to—

(15) any employee . . . employed in domestic ser-

vice employment to provide companionship services

for individuals who (because of age or it.firmity) are

unable to care for themselves (as such terms are

defined and delimited by regulations of the Secre-

tary [of Labor]).

. In pertinent part, 29 C.F.R. § 552.3 provides:

Domestic service employment.

As used in section 13(a)(15) of the Act, the term

domestic service employment refers to services of a

household nature performed by an employee in or

about a private home (permanent or temporary) of

the person by whom he or she is employed. * * *

. In pertinent part, 29 C.F.R. § 552.6 provides:

Companionship services for the aged or infirm.

As used in section 13(a)(15) of the Act, the term

companionship services shall mean those services

which provide fellowship, care, and protection for

a person who, because of advanced age or infirmity,

cannot care for his or her own needs. * * *

. In pertinent part, 29 C.F.R. § 552.109(a) provides:

Third party employment.

(a) Employees who are engaged in providing com-

panionship services as defined in [29 C.F.R.] § 552.6,

and who are employed by an employer or agency

other than the family or household using their ser-

vices, are exempt from the Act’s minimum wage

and overtime pay requirements by virtue of section

isaXiss. °° *

tN a tt wm © ay

STATEMENT OF THE CASE

This case concerns whether the Labor Department reg-

ulation governing the application of federal minimum

wage and overtime pay requirements to home health care

workers employed by health care agencies warrants judi-

cial deference and is valid. Rejecting the holdings of

every other court to consider the issue, including that of

another circuit, the court of appeals invalidated a key-

stone regulation for the home health care community

that has been in place for more than 30 years.

1. The Statutory and Regulatory Scheme

In 1974, Congress extended the FLSA’s minimum

wage and overtime pay requirements to include

“domestic service” employees. See Fair Labor Stan-

dards Amendments of 1974, PL 93-259, § 7, 55 Stat. 88

(1974). Congress simultaneously excluded from such

coverage, however, “any employee employed in domes-

tic service employment to provide companionship ser-

vices for individuals who (because of age or infirmity)

are unable to care for themselves. . .” Jd. (codified at

29 U.S.C. § 213(a)(15)). Congress defined neither

“domestic service employment” nor “companionship

services,” but instead left the specification of those

terms entirely to the Department of Labor. See id.

(leaving exemption’s application “as such terms are

defined and delimited by regulations of the Secretary”).

Indeed, as reflected in the House Conference Report,

Congress “expect[ed] the Secretary to immediately

undertake a program utilizing all feasible administra-

tive procedures to apprise employers of their respon-

sibilities under the Act and to notify employees of their

rights and entitlements under the Act.” H.R. Conf. Rep.

No. 93-953 (1974), reprinted in 1974 U.S.C.C.A.N.

2862, 2865.’

The Secretary complied. The Department of Labor

commenced a formal notice-and-comment rule making

proceeding in October 1974. See 39 Fed. Reg. 35,382

(Oct. 1, 1974). In February 1975, the agency promul-

gated regulations governing the application of the FLSA

to domestic service employees. See 40 Fed. Reg. 7404

(Feb. 20, 1975).

For the purposes of applying § 213(a)(15), the Secre-

tary defined “domestic service employment” to mean

“services of a household nature performed by an

employee in or about a private home (permanent or tem-

porary) of the person by whom he or she is employed.”

29 C.F.R. § 552.3.3 The Secretary likewise defined

“companionship services” to mean “those services which

provide fellowship, care, and protection for a person

who, because of advanced age or infirmity, cannot care

for his or her own needs.” 29 C.F.R. § 552.6.* Finally,

2 The Secretary was also instructed by the Conference Com-

mittee to “adopt regulations and enforcement procedures to require

that employers are reasonably apprised of when their obligation

regarding the payment of the minimum wage commences.” H.R.

Conf. Rep. No. 93-953 (1974), reprinted in 1974 U.S.C.C.A.N. 2862,

2865.

; 29 C.F.R. § 552.3 further states that “domestic service

employment” includes “employees such as cooks, waiters, butlers,

valets, maids, housekeepers, governesses, nurses, janitors, laun-

dresses, caretakers, handymen, gardeners, footmen, grooms, and

chauffeurs of automobiles for family use. It also includes babysitters

employed on other than a casual basis. This listing is illustrative and

not exhaustive.”

In addition, the regulation explains that “[s]uch services may

include household work related to the care of the aged or infirm per-

son such as meal preparation, bed making, washing of clothes, and

other similar services.” 29 C.F.R. § 552.6. Furthermore, although

the agency's regulations directed that “[e])mployees who

are engaged ip providing companionship services as

defined in § 552.6, and who are employed by an employer

or agency other than the family or household using their

services, are exempt from the Act’s minimum wage and

Overtime pay requirements by virtue of section

13(a)(15).” 29 C.F.R. § 552.109(a).°

These regulations have been in place since 1975.

Since then, Congress has amended § 213 of the FLSA

seven times, and it has never suggested any disapproval

for § 552.109(a).

2. Litigation History

In 2002, respondent Evelyn Coke (“Respondent”)

commenced this action in the United States District

Court for the Eastern District of New York. (36a).

Respondent alleged that “she was employed as a ‘home

employees performing “companionship services” may also perform

“general household work,” the regulation makes clear that such work

must be “incidental, i.e., [that it] does not exceed 20 percent of the

total weekly hours worked.” /d. Finally, the regulation states that the

“term ‘companionship services’ does not include services relating to

the care and protection of the aged or infirm which require and are

performed by trained personnel, such as a registered or practical

nurse.” Jd.

5 The final version of 29 C.F.R. § 552.109(a) promulgated by

the Department of Labor—which exempts home health care workers

employed by third-party employers from federal minimum wage and

overtime pay requirements—differed significantly from the original

version that appeared in the agency’s notice of proposed rulemaking.

The first version of the regulation did not exempt third-party employ-

ees from the requirements of the FLSA. See 39 Fed. Reg. 35,382

(Oct. 1, 1974). Upon further consideration, however, the agency

changed its view and explained that the FLSA’s companionship ser-

vices exemption could be “available to. . . third party employers

since they apply” unde~ “ 213(a)(15) “to ‘any employee’ engaged ‘in’

the enumerated services.” 40 Fed. Reg. at 7405.

health care attendant’ by [Petitioners], who did not pay

her minimum wage or overtime compensation.” (4a, 37a-

38a). Although Respondent maintained that “she was

entitled to” such compensation under the FLSA (38a),

she conceded that “the ‘companionship services’ exemp-

tion to the FLSA, as defined and interpreted by [Depart-

ment of Labor] regulations, applie[d] to her employment

and that if the regulations at issue [were] enforceable,

she [could] not prevail.” (5a). Respondent stated that

“the purpose of this action was to determine the validity

of? 29 C.F.R. §§ 552.6 and 552.109(a) (37a), and

. described this litigation as “a test case” (5a).°

Petitioners moved for judgment on the pleadings pur-

suant to Rule 12(c) of the Federal Rules of Civil Pro-

cedure, invoking the FLSA exemption implemented by

29 C.F.R. §§ 552.6 and 552.109(a). (36a-37a). Respondent

opposed the motion by arguing that both regulations were

invalid because they were “inconsistent with Congress's

intent of extending coverage of the FLSA to domestic ser-

vice employees.” (42a). Specifically, Respondent asserted

that “the definition of ‘companionship services’ in Sec-

tion 552.6 [was] overbroad and that Section 552.109(a)

improperly extend[ed] the [minimum wage and overtime

pay] exemption to employees who are employed by an

agency.” (42a-43a).

The district court rejected Respondent’s arguments.

Applying the standard of review for administrative

action laid down in Chevron U.S.A. Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837 (1984)

(“Chevron”), the district court afforded §§ 552.6 and

552.109(a) the highest level of judicial deference. (44a-

Respondent’s complaint also asserted “identical” claims

“under the Labor Law of the State of New York and the New York

Minimum Wage Act.” (38a).

52a). The district court recognized that Congress had

expressly delegated to the Secretary of Labor the author-

ity to define and delimit the terms contained in

§ 213(a)(15) (37a), and that §§ 552.6 and 552.109(a)

embodied a long-standing, contemporaneous construc-

tion of the statute by the agency charged with its admin-

istration (45a-46a). After reviewing the relevant

statutory and regulatory history, as well as the existing

case law addressing the validity of §§552.6 and

552.109(a), the district court concluded that the regu-

lations were a reasonable construction with of FLSA.

(52a). The court therefore held that §§552.6 and

552.109(a) carried the force of law and granted Peti-

tioners’ motion for judgment on the pleadings. (54a).

On appeal, the Second Circuit affirmed the district

court’s decision in part and reversed in part. (4a). Apply-

ing Chevron, the court of appeals upheld 29 C.F.R.

§ 552.6. (3a). Petitioners do not seek review of that hold-

ing.

Unlike the district court, however, the court of appeals

invalidated 29 C.F.R. § 552.109(a). (3a-4a). In so doing,

the Second Circuit again began its analysis by applying

Chevron. Guided by this Court’s ruling in United States

v. Mead Corp., 533 U.S. 218 (2001) (“Mead”)—that an

agency regulation “qualifies for Chevron deference when

it appears that Congress delegated authority to the

agency generally to make rules carrying the force of law,

and that the agency interpretation claiming deference

was promulgated in the exercise of that authority,” id. at

226-27—the court of appeals decided that such defer-

ence was unwarranted here.’ The Second Circuit rested

this determination upon two considerations. First, the

Mu Notably, the court did not hold that § 552.109(a) was incon-

sistent with the plain language of the statute.

court noted that the Department of Labor had placed

§ 552.109(a) within a regulatory subpart entitled, “Inter-

pretations” rather than under the heading of “General

Regulations.” (22a). Second, the court emphasized that

the Department of Labor did not list § 552.109(a) among

those regulations “ ‘required by’ ” § 215(a)(15). (23a).

On those bases, the court concluded that “§ 552.109(a)

does not qualify for Chevron deference because, by the

[agency’s] own account, it was self-consciously not pro-

mulgated in the exercise of Congress's delegated author-

ity pursuant to § 215(a)(15).” (/d.).

The court of appeals then set out to determine whether

§ 552.109(a) should nevertheless receive judicial def-

erence under what it characterized as Mead’s “vague

prescription to ‘tailor deference to variety,’ ” and con-

sidered whether § 552.109(a) had the “ ‘power to per-

suade’ ” under the standard set forth in Skidmore v. Swift

& Co., 323 U.S. 134 (1944) (“Skidmore”). (25a). Upon

examining several factors, the court of appeals held that

the regulation was invalid because it was inconsistent

with legislative intent, other Department of Labor reg-

ulations, and the agency’s actions over time. (26a). The

court further concluded that the Department of Labor—

which had submitted an amicus brief on appeal arguing

that the challenged regulations warranted Chevron def-

erence—had failed to “proffer valid reasoning in support

of § 552.109(a)’s enforceability.” (/d.).

Accordingly, the Second Circuit gave no deference

whatsoever to the Labor Department’s considered judg-

ment.

3. The Effects of Invalidating 29 C.F.R. § 552.109(a)

Petitioners currently employ approximately forty

home health care aides, who provide companionship ser-

vices to approximately thirty homebound patients. (79a).

Pursuant to § 552.109(a)’s exemption from federal min-

imum and overtime wage requirements, Petitioners pay

their employees $8.00 per hour for an average 70-hour

- work week, or approximately $560.00 per week. (79a-

80a). Without § 552.109(a)’s exemption, however, Med-

icaid reimbursement limitations on home health care

services will create tremendous and unsustainable losses

for Petitioners and many other agency employers of

home health care workers. (80a, 84a (invalidation of

§ 52.109(a) “will have serious negative impact on the

access and quality of care for tens of thousands of older

and disabled individuals receiving services . . . based

upon significant increased costs for home care services,

costs that cannot be absorbed by a financially fragile

health care sector that disproportionately relies on gov-

ernment reimbursement” )).

To avoid such losses, Petitioners must now limit each

employee’s workweek to forty hours, thereby avoiding

higher overtime pay rates. (80a). Petitioners may also be

forced to reduce hourly wages. (/d.). In consequence,

most of Petitioners’ employees will suffer an average

43% weekly salary reduction. (/d.).

This hardship will not be limited to Petitioners’

employees. Industry experts and major home health care

providers agree that home health care workers across

New York State will likewise suffer. (103a, 92a-93a,

128a-133a). “While elimination of the third-party

employer exemption would increase overtime rates for

home care workers, information from agencies through-

out New York State establishes that it would not

increase—and in many cases would reduce—actual earn-

ings for workers.” (1132a).

But the impact of the Second Circuit’s ruling extends

much farther. As an unavoidable consequence of

§ 552.109(a)’s invalidation, thousands of homebound

elderly and infirm people will receive compromised

care. In order to compensate for the lost exemption,

home health care agencies must limit the number of

hours that each employee may work. Hence, patients will

have to accept services from a greater number of work-

ers, each of whom will work fewer hours. According to

both home health care providers and state regulators,

this scenario will generate serious problems affecting

care.

The relationship between patient and home care aide

is intimate and confidential. “The home attendant spends

up to 24 hours each day in a client’s home, tending to

needs of an extremely personal nature, such as bathing

or toileting.” (96a-97a). It usually takes considerable

time to establish the necessary trust and comfort level

between caregiver and client, “and clients often are very

unwilling to enter into such a relationship with more

than one or two such individuals.” (97a; see also 81a).

Consequently, the need to use multiple caregivers for

an individual client often creates a “troubling dynamic”

that “assaults the dignity of patients, undermines the

quality of care that they receive, and is therefore detri-

mental to their well being.” (79a; see also 97a (“Expe-

rience shows that clients often are unwilling to accept

alternative coverage when a home attendant takes vaca-

tion or sick leave, preferring to suffer lack of what may

often be very necessary care until the person with whom

the client is comfortable returns from leave.”)). This

problem is further compounded by the fact that there are

likely only a limited number of home care workers who

will accept shortened work shifts at multiple work sites,

thus leaving many patients unattended for hours. (103a).

In such circumstances, “home care patients would either

be denied some periods of care or receive care with less

continuity,” i.e., patients would be forced to receive ser-

vices from multiple health care workers. (/d. see also

132a).

Either outcome is problematic. Depriving homebound

individuals of needed care and companionship is an

unacceptable option. So is the idea of using multiple

workers to provide care for a single patient. “Continuity

of care is so widely recognized to affect the quality of

patient care that New York State regulation requires

home care agencies to ensure continuity of care to the

extent possible.” (132a (citation omitted)). But, by cre-

ating this Hobson’s choice, the decision of the court of

appeals has placed the home health care community in

an impossible situation—endangering the well-being of

thousands of patients and workers alike.

REASONS FOR GRANTING THE PETITION

By invalidating § 552.109(a), the court of appeals jet-

tisoned thirty years of administrative practice, congres-

sional acquiescence, judicial approval, and labor-market

structure. This ruling will have a profoundly negative

impact on the home health care sector. The delicate equi-

librium fostered by § 552.109(a) is a critical component

in sustaining the ability of home health care providers to

supply much needed services to many thousands of

elderly and infirm individuals. In the absence of this reg-

ulation, an entire community of patients and caretakers

will be thrust into sudden and dangerous disarray. This

result will hurt everyone affected.

Because the public funding that pays for these services

is both strictly limited and shrinking (102a, see also 85a-

86a; 129a), the Second Circuit’s ruling has already dis-

rupted the way in which tens of thousands of homebound

people residing in New York State (and possibly many

thousands more living in other regions) receive impor-

tant health care assistance. It has also significantly

decreased the availability of work for home health care

aides and their attendant income. In combination, these

consequences threaten the important public policy favor-

ing home care—in many cases leaving institutionaliza-

tion as a patient’s only available health care option,

despite its higher economic costs and its enormous toll

on patients’ quality of life.

This Court should grant the petition for three com-

pelling reasons. First, this case raises issues of excep-

tional importance regarding the proper allocation of

hundreds of millions of dollars each year in federal,

state, and local funding for health cares services. The

impact of this ruling on the care provided to homebound

people, and the economic well being of their immediate

care providers, also raises matters of exceptional impor-

tance. Indeed, the court of appeals’ ruling affects the

fundamental viability of home health care as an option to

institutionalization, which is an issue of extreme impor-

tance for all parties involved.

Second, the decision below directly conflicts with the

decision of the Tenth Circuit in Johnson v. Volunteers of

America, Inc., 215 F.3d 559 (10th Cir. 2001), which

upheld § 552.109(a) under Chevron. The application of

federal minimum wage and overtime pay requirements

to home health care workers, and the impact that those

requirements have on the provision of such impor-

tant services, should not vary between federal judicial

circuits.

And third, the judgment of the court of appeals departs

from the consistent decisions of this Court regarding

judicial deference to agency rulemaking. The Second

Circuit’s misapplication of Chevron and Mead evades

the Department of Labor’s manifest intent to exercise its

statutory authority in defining the boundaries of

§ 213(a)(15)—rewriting those boundaries as that court

saw fit. Moreover, the court of appeals’ misapplication

of Skidmore puts in jeopardy the efficacy of many

administrative decisions that warrant some but not con-

trolling deference from the courts. The Second Circuit

invalidated § 552.109(a) under Skidmore at the pleading

stage of these proceedings, without any consideration of

facts that support the agency’s judgment. Guidance to

the lower federal courts as to the necessary development

and the proper scope of a factual record when deter-

mining a regulation’s “power to persuade” would be of

great benefit in a wide variety of cases involving the

intersection of Chevron, Mead, and Skidmore.

1. This Case Raises Issues of Exceptional

Importance

The fundamental question presented by this case—

whether § 552.109(a) is valid and enforceable—unde-

niably raises issues of exceptional importance. The

“problem” created by the court of appeals’ invalidation

of § 552.109(a) reaches far “beyond the academic or

episodic.” Rice v. Souix City Memorial Park Cemetery,

Inc., 349 U.S. 70, 74 (1955). It will have a staggering

impact on home health care costs throughout this region,

and it will force largely government-funded agencies to

restructure their business operations in ways that will

seriously harm their patients and employees.

For example, New York City alone estimates that the

Second Circuit’s decision will “increase the cost of the

City’s Medicaid-funded personal care program to the

elderly and disabled by over $263 million annually.”

(93a). Consequently, the city’s “Medicaid funding will

need to increase from $1.592 billion to about $1.855 bil-

lion annually in order to sustain its current client ser-

vices.” (/d.). Indeed, across New York State, home care

agencies “cannot bear the cost of compliance with the

[Second Circuit’s] holding without additional revenues

from external sources, which are unlikely to be forth-

coming.” (102a).

Furthermore, one health care expert has identified a

serious harm to the broader health care system that will

flow from invalidating § 552.109(a). She observes that,

“[b]y creating disruptions in the continuity of care by

home health agencies, the [Second Circuit’s] decision

impairs the ability of hospitals to discharge patients to

more appropriate home and community settings in a

timely manner, and thus increases the average length of

stay and creates a new financial burden on already finan-

cially fragile acute care institutions.” (86a-87a). She

estimates that “a one day increase in the length of stay

for patients in New York hospitals that are discharged to

home health agencies would cost the health care system

$96 million.” (/d.).

The human toll of this ruling is likewise costly. The

added strain on municipal, county, and state budgets

triggered by the invalidation of § 552.109(a) will upset

the “delicately balanced system that makes home care—

a desired alternative to institutionalization—an afford-

able and safe option for tens of thousands of home care

patients in New York State.” (103a). Health care experts

fear that, without adequate government funding, home

care agencies “will be unable to continue providing qual-

ity, affordable companionship services to elderly and

infirm patients throughout New York.” (101a). Conse-

quently, there is deep concern that the increased expense

of such services will “undermine New York’s commit-

- ment” to home care as a feasible option to institution-

alization. (87a-88a; see also 103a (“Many patients may

be forced into nursing homes if home care providers can

no longer assure adequate and safe services.”)).

Also disturbing are the serious hardships that home

health care workers will unavoidably sustain as a result

of the court of appeals’ decision. The invalidation of

§ 552.109(a) will necessarily result in slashed income,

scheduling changes, and workplace dislocations, as

health care agencies try to stretch limited government

funding in order to cover demands for care. (80a, 84a,

88a, 92a-97a, 10la-104a, 130a-133a). In a bitter twist,

the Second Circuit's ruling will effectively penalize the

very category of workers that Respondent purports to

represent. (130a-131a).

This case warrants certiorari review. Simply put, “in

view of the importance of the question presented to

the [government programs] and affected individuals,”

Olmstead v. Zimring, 527 U.S. 581, 596 (1999) (grant-

ing certiorari to review construction of federal regula-

tions requiring major reallocation of state resources for

community care of mentally disabled), and in view of

its tremendous financial ramifications, see, e.g., Barnhart

v. Walton, 535 U.S. 212, 217 (2002) (granting certio-

rari where invalidation of social security regulation

would have “create[d] additional Social Security costs of

$80 billion over ten years”), this Court should grant the

petition.

2. Yhis Court Needs to Resolve an Important Cir-

cuit Split Regarding the Enforceability of 29

C.F.R. § 552.109(a)

By invalidating § 552.109(a), the Second Circuit

extended the FLSA’s minimum wage and overtime pay

requirements to homecare workers employed by health

care agencies. In Johnson v. Volunteers of America, Inc.,

215 F.3d 559 (10th Cir. 2001) (“Johnson”), however, the

Tenth Circuit squarely held that § 552.109(a) was enti-

tled to Chevron deference and upheld the application of

§ 213(a)(15)’s exemption from those FLSA requirements

etree

to all home health care aides—whether employed

directly by patients or by third parties. See 215 F.3d at

562. These two decisions are in direct conflict and cre-

ate an untenable situation.

The consistency (and thus quality) of care for home-

bound people across the country cannot turn upon the

inconsistent enforcement of federal regulations. The

availability of crucial health care services and the struc-

ture of homecare delivery systems should not vary

between even two federal judicial circuits because of a

disagreement among judges over the status of federal

law. The ramifications of this disagreement are both

unfair and inefficient. Too many lives are profoundly

affected by § 552.109(a), and too many limited public

resources are allocated according to its directive, for this

Court to leave unresolved the conflict created by the

Second Circuit. Certiorari review is especially war-

ranted here.’

s Every district court that has considered § 552.109(a) has like-

wise enforced the regulation. See Coke v. Long Island Care at Home,

Ltd., 267 F. Supp. 2d 332, 341 (E.D.N.Y. 2003) (37a); Madison v.

Resources for Human Dev., Inc., 39 F. Supp. 2d 542, 545 n. 3 (E.D.Pa.

1999); Terwilliger v. Home of Hope, Inc., 21 F. Supp. 2d 1294, 1299

n. 2 (N.D.Okla. 1998).

9 The court of appeals tried to downplay its split with the

Tenth Circuit by noting that Johnson was decided one year before this

Court’s decision in Mead. (21a-22a). But Mead’s gloss on Chevron

neither explains nor ameliorates the circuit conflict created by the

Second Circuit’s invalidation of § 552.109(a). In Mead, this Court

expressly stated that it had left the Chevron rule as it was found,

see Mead, 533 U.S. at 237-38, see also id. at 250 (Scalia, J., dis-

~ senting), and other courts have likewise understood Mead to have

simply “reaffirmed” a “well established principle,” Pesquera Mares

Australes Ltda. v. United State, 266 F.3d 1372, 1380 (Fed. Cir. 2001).

Consequently, Mead is not an intervening change in law that might

diminish the discrepancy in law between the Second aad Tenth

Circuits.

(footnote continued)

3. The Court of Appeals’ Decision Conflicts with

the Consistent Decisions Of this Court Regarding

Judicial Deference to Agency Rulemaking

In Mead, this Court held that the

administrative implementation of a particular statu-

tory provision qualifies for Chevron deference when

it appears that Congress delegated authority to the

agency generally to make rules carrying the force

of law, and the agency interpretation claiming def-

erence was promulgated in the exercise of that

authority.

533 U.S. at 226-27 (emphasis added).

Here, the court of appeals did not dispute that

Congress gave the Department of Labor authority to pro-

mulgate § 552.109(a). But the court below did dispute

that § 552.109(a) satisfies the second prong of Mead’s

directive. The Second Circuit concluded that “§ 552.109(a)

does not qualify for Chevron deference because, by the

[agency’s] own account, it was self-consciously not

promulgated in the exercise of Congress’s delegated

authority pursuant to § 213(a)(15).” (23a). The opposite

_ is true. Contrary to the Second Circuit’s assertion, the

Department of Labor has consistently and openly main-

tained that it exercised its statutory authority in pro-

mulgating § 552.109(a).'°

In any event, the practical reality demonstrates the significance of

this conflict. § 552.109(a) is still enforceable in the Tenth Circuit and,

in that region, homecare is being provided under that regulatory

regime. If Mead somehow affected the validity of the Tenth Circuit's

decision in Johnson, it is important that this Court grant certiorari in

this case and say so. The equitable provision of social services

requires the consistent application of federal law.

10‘ This determination is the lynchpin of the court of appeals’

holding and it rests upon two basic mistakes. First, the court of

appeals overemphasized the agency’s inclusion of § 552.109(a) within

Perhaps the agency’s most obvious assertion of statu-

_ tory authority appears in § 552.109(a) itself. The regu-

lation expressly extends the FLSA’s minimum wage and

overtime pay exemptions to third party employers “by

virtue of section [2]13(a)(15).” 29 C.F.R. § 552.109(a)

Subpart B of the regulations, entitled “Interpretations.” (23a). Based

largely upon this heading, the court of appeals inferred that

§ 552.109(a) is an “interpretive” rather than a “legislative” regulation,

and therefore does not qualify for Chevron deference. (22a). This

characterization is deeply flawed. As the court of appeals itself

acknowledged (22a-23a), § 552.109(a) affects individual rights and

obligations, which is an “important touchstone for distinguishing

those rules that may be ‘binding’ or have the ‘force of law.” Chrysler

Corp. v. Brown, 441 U.S. 281, 302 (1979) (describing “legislative-

type” rules). Moreover, the dichotomy upon which the court of

appeals relies in this case is suspect, given this Court's recent state-

ment that, “[ojf course, the framework of deference set forth in

Chevron does apply to an agency interpretation contained in a reg-

ulation.” Christensen v. Harris County, 529 U.S. 576, 587 (2000); see

also Edelman v. Lynchburg College, 535 U.S. 106, 123-24 (2002)

(O’Connor, J., concurring in the judgment).

Second, because § 552.109(a) is not among the definitions listed in

29 C.F.R. § 552.2(c), the court of appeals reasoned that the agency

had “effectively conceded” that § 552.109(a) was not promulgated

under § 213(a)(15). (23a). This conclusion is also incorrect. § 552.109(a)’s

exemption from FLSA requirements applies solely to “[e]mployees

~ who are engaged in companionship services”—a category of employ-

ees specifically defined in 29 C.FR. § 552.6. See, 29 C.FR. §552.109(a).

The definition contained in 29 C.F.R. § 552.6 is one of the definitions

listed in 29 C.F.R. § 552.2(c). Thus, § 552.109(a) governs the appli-

cation of a regulatory definition that the agency undeniably promul-

gated under § 213(a)(15). This close connection between § 552.109(a)

and the Department of Labor’s undisputed exercise of statutory author-

ity belies any supposed concession by the agency that § 552.109(a) was

, not likewise promulgated. At worst, the interrelationship among 29

~—~CER. §§ 552.2(c), 552.6, and 552.109(a) makes the legislative sta-

tus of § 552.109(a) ambiguous—an ambiguity that is dispositively

settled by the agency’s own reasonable interpretation. See Thomas

Jefferson University v. Shalala, 512 U.S. 504, 512 (1994); see also

infra at 21-22.

(2003) (emphasis added). Thus, the very text of

§ 552.109(a) makes clear that the Department of Labor

drew its regulatory authority straight from the statute.

The Code of Federal Regulations elsewhere supports

this reading. Beneath the list of regulations contained in

subparts A and B is a section that identifies the source of

authority for all of Part 552. The statement reads:

AUTHORITY: Secs. 13(a)(15) and 13(b)(21) of the

Fair Labor Standards Act, as amended (29 U.S.C.

213(a)(15), (b)(21)), 88 Stat. 62; sec. 29(b) of the

Fair Labor Standards Amendments of 1974 (Pub. L.

93-259, 88 Stat. 76), unless otherwise noted.

29 C.ER. Part 552 (2003) (emphasis added), at page 253.

Besides this unequivocal reference to § 213(a)(15), Part

552 identifies no other authority for § 552.109(a). The

inference is therefore unavoidable; the Department of

Labor promulgated § 552.109(a) pursuant to § 213(a)€15).

Indeed, that “such authority was invoked” by the

Department of Labor, Mead, 533 U.S. at 237, is again

confirmed by the agency’s 1974 Notice of Proposed

Rulemaking for Employment of Domestic Services’

Employees (“1974 NPR”). In relevant part, the 1974

NPR states:

To implement the 1974 Amendments [to the FLSA],

it is proposed to. . . add a new 29 C.F.R. Part 552

defining and delimiting, in Subpart A, the terms. .

“employment to provide companionship services for

individuals who (because of age or infirmity) are

unable to care for themselves,” and setting forth, in

Subpart B, a statement of policy and interpretation

concerning the application of the [FLSA] to domes-

tic service employees. These ... . additions are pro-

posed pursuant to the authority in section[]. . .

[2]13(a)(15) of the [FLSA], as amended.

39 Fed. Reg. 35,382, 35,382 (Oct. 1, 1974) (emphasis

added). § 552.109(a) was one of the “additions” to

29 C.F.R. Part 552 identified by the 1974 NPR, albeit in

a form that was substantially different from its final

version."!

Over 25 years later, the Department of Labor once

again reaffirmed its deliberate exercise of statutory

authority. In January 2001, the agency proposed to

amend § 552.109(a). The Notice of Proposed Rulemak-

ing (“2001 NPR”) made plain that the proposed amend-

ment was

issued under the authority provided by section

13(a)(15) of the FLSA (29 U.S.C. 213(a)(15)),

which grants the Secretary of Labor legislative rule-

making authority to define and delimit the terms

“employee employed in domestic services” for the

" Because the final version of § 552.109(a) contained the oppo-

site rule than was originally proposed in the 1974 NPR, the court of

appeals expressed “concern” in dictum as to whether the agency’s

rulemaking notice was sufficient under the Administrative Procedure

Act (“APA”), 5 U.S.C. § 553(b)(3)(A). (21a). This concern was

unfounded.

The critical APA inquiry here is whether “parties affected by the

final rule were put on notice that their interests were at stake,” or,

stated differently, “whether potential commentators would have

known that an issue in which they were interested was on the table

and was to be addressed by a final rule.” American Medical Ass’n v.

United States, 887 F.2d 760, 768 (7th Cir. 1989) (internal quotation

marks omitted). It is “irrelevant whether the proposal contained in the

NPR was favorable to a particular party’s interest,” because “the obli-

gation to comment is not limited to those adversely affected by the

proposal.” Jd. (emphasis in original).

The Labor Department’s promulgation of § 552.109(a) satisfied this

standard. The 1974 NPR surely put the world on notice that an FLSA

exemption for third party employers was “on the table” and “open ]

for discussion.” Jd. at 768-69 (internal quotation marks omitted).

Hence, the regulation is procedurally valid under the APA.

purposes of exempting such workers from the min-

imum wage and overtime pay requirements of the

FLSA.

66 Fed. Reg. 5481, 5487 (Jan. 19, 2001) (emphasis added).

This straightforward proclamation of legislative rule-

making dispels any doubt that the Department of Labor

used its statutory authority in promulgating § 552.109(a).

But even assuming that there remains in the regulatory

history some lingering uncertainty as to the agency’s

intentions vis-a-vis § 552.109(a), the decision below still

veers far from this Court’s teaching on judicial deference.

“Courts grant an agency’s interpretation of its own reg-

ulations considerable legal leeway,” Barnhart, 535 U.S.

at 217; see also Christensen, 529 U.S. at 588, and such

interpretations are “controlling unless plainly erroneous

or inconsistent with the regulation,” Auer v. Robbins, 519

U.S. 452, 461 (1997) (internal quotation marks omitted).

Indeed, courts “must defer to the [agency’s] interpreta-

tion unless an alternative reading is compelled by the

regulation’s plain language or by other indications of the

[agency’s] intent at the time of the regulation’s promul-

gation.” Thomas Jefferson University, 512 U.S. at 512

(emphasis added and internal quotation marks omitted).

The pivotal question in this case for the court of

appeals was whether the Department of Labor deliber-

ately exercised its statutory authority to define and

delimit the concept of “companionship services” when,

in 1975, the agency promulgated § 552.109(a). (23a).

The Department’s statements regarding § 552.109(a) “at

the time of the regulation’s promulgation” strongly indi-

cate that the Secretary of Labor invoked that authority.

Thomas Jefferson University, 512 U.S. at 512 (internal

quotation marks omitted). But any claimed ambiguity on

this point was dispelled by the agency’s amicus filing in

the court of appeals. In that brief, the Department of

Labor described § 552.109(a) as a “legislative rule[ ]”

(56a), which was “promulgated in 1975 in response to an

express delegation of authority by Congress” (62a

(emphasis added)). The agency further maintained that

“section 552.109(a) serves to ‘define and delimit’ the

terms of the ‘companionship services’ exemption under

Congress’ express delegation of authority.” (66a (empha-

sis added)). Thus, the Department of Labor confirmed

that the Secretary had deliberately invoked the agency's

statutory authority in promulgating § 552.109(a). That

confirmation should have been conclusive. It “reflect[s]

the agency’s fair and considered judgment on the matter

in question,” and therefore warranted controlling def-

erence. Auer, 519 U.S. at 462.

Accordingly, by undertaking a de novo examination of

a regulatory scheme that was implemented thirty years

ago through notice-and-comment rulemaking, the Sec-

ond Circuit fundamentally misapplied Chevron’s direc-

tive as well as other bedrock principles of administrative

law.!? Given the serious and adverse consequences of the

Second Circuit’s ruling, this Court should grant the peti-

tion in order to ensure that Mead’s clarification regard-

ing the appropriate application of Chevron deference is

i2 “{T]his Court will normally accord particular deference to an

agency interpretation of longstanding duration,” Barnhart, 535 U.S.

at 220 (internal quotation marks omitted), especially when the chal-

lenged regulation is a contemporaneous construction of a statute by

the agency charged with its administration, see Udall v. Tallman, 380

U.S. 1, 16 (1965); Norwegian Nitrogen Products Co. v. United States,

288 U.S. 294, 315 (1933). Moreover, where, as here, Congress has

amended the relevant statutory provision numerous times without

expressing disapproval for an agency interpretation, the “conclusion

is plain’—Congress “did not regard [the agency’s action] as incon-

sistent with the [statute].” Boesche v. Udall, 373 U.S. 472, 483

(1963); see also Barnhart, 535 U.S. at 220; Edelman, 535 U.S. at

118. The court of appeals gave short-shrift to these important rules of

administrative law.

not actually used by lower courts to undermine the

authority of agencies to administer the law.

The Second Circuit’s application of Skidmore is

equally troubling, and presents a serious threat to the

enforceability of many agency rules, regulations, and

interpretations that merit some level of judicial defer-

ence. Under Skidmore, an informal agency regulation

may command deference “proportional to its power to

persuade,” and thus may “claim the merit of its. . .

thoroughness, logic, and expertness, its fit with prior

interpretations, and any other sources of weight.” Mead,

533 U.S. at 235 (internal quotation marks omitted); see

also Skidmore, 323 U.S. at 140 (validity of challenged

regulation “will depend upon . . . all those factors

which give it the power to persuade” (emphasis added)).

As the Sixth Circuit recently described this standard,

“Skidmore permits courts to give consideration to an

agency’s expertise and ability to persuade, not its abil-

ity to speak with legal effect. . . . Skidmore thus per-

mits an agency to earn the weight given to it by the

courts.” Air Brake Sys., Inc. v. Mineta, 357 F.3d 632,

643 (6th Cir. 2004) (emphasis in original).

However, an agency’s ability to “earn” persuasive

force for a regulation may turn upon a factual presen-

tation. Thus, Mead recognizes that the proper analysis

under this standard is not limited to abstract argumen-

tation and claimed expertise, but also includes consid-

eration of “any other sources of weight.” 533 U.S. at 235

(emphasis added). A Skidmore analysis may therefore

_ require proceedings beyond the pleading stage, includ--

ing evidentiary submissions. See, e.g., Brown v. United

States, 327 F.3d 1198, 1206 (D.C. Cir. 2003) (consider-

ing “affidavits of various Treasury officials” in uphold-

ing under Skidmore agency's methodology in calculating

locality pay increases). That depth of consideration was

absent here.

The Second Circuit acknowledged that, “[u]nlike

most, if not all, of the other courts that have considered

the issues in this appeal,” it reviewed Respondent’s case

“before summary judgment and, thus, without any fac-

tual development.” (4a (footnote omitted)). Given that

the court struck out on its own to undertake a Skidmore

analysis, this was a serious misstep. By invalidating

§ 552.109(a) under Skidmore without a factual record,

the court of appeals denied Petitioners the ability to

identify and present important “sources of weight” from

which the regulation could derive substantial support.

For example, when the Department of Labor withdrew

the 2001 NPR in 2002, the agency reported that “numer-

ous commenters on the proposed rule, including multi-

ple government agencies . . . , seriously called into

question the Department of Labor’s conclusion that there

would be little economic impact” from changing

§ 552.109(a). 67 Fed. Reg. 16,668 (April 8, 2002). That

rulemaking record, which prompted the agency “to with-

draw the proposed rule and terminate [its] rulemaking

action,” could very well bolster the persuasiveness of the

regulation as it stands now. Jd. And yet, the court of

appeals had none of that information to consider before

invalidating § 552.109(a). Similarly, the court of appeals

had no evidence to consider from private and govern-

mental members of the home health care community,

who certainly could “bring the benefit of specialized

experience to bear on the subtle questions in this case”

regarding the important economic and quality control

functions served by § 552.109(a). Mead, 533 U.S. at 235.

When the stakes of invalidating a long-standing reg-

ulation are as high as they are here, and the consequences

are as potentially harmful, courts should make every

effort to review “all those factors which give [a regula-

tion] the power to persuade.” Skidmore, 323 U.S. at 140.

The court of appeals disregarded this important rule and

acted prematurely. The court’s analysis merely preferred

its own policy choices over those of the Department of .

Labor,'? and ironically faulted the Department of Labor

- The court of appeals invalidated § 552.109(a) because it is

supposedly inconsistent with congressional purpose, inconsistent with

other regulations and with the agency's own views over time, and is

based upon invalid reasoning. (26a-29a). The court’s analysis on each

of these points is deeply flawed.

To start, the court’s conclusion that it is “implausible, to say the

least, that Congress, wishing to expand FLSA coverage would have

wanted the [Department of Labor] to eliminate coverage for employ-

ees of third party employers who had previously been covered” (27a),

overlooks two crucial considerations. First, Congress has amended

§ 213 of the FLSA seven times-since its enactment in 1974 and has

never disapproved § 552.109(a). This legislative record is strong evi-

dence that Congress believes that § 552.109(a) is consistent with the

statute. See Boesche, 373 U.S. at 483. Second, § 213(a)(15)’s leg-

islative history suggests that Congress was trying to balance its desire

to extend FLSA coverage to domestic employees against its wish to

foster close, consistent and cost-controlled relationships between

caregivers and clients. § 552.109(a) is certainly a reasonable accom-

modation of these competing legislative interests and thus warrants

substantial deference. See United States v. City of Fulton, 475 U.S.

657, 667-68 (1986); United States v. Shimer, 367 U.S. 374, 383

(1961). -

Similarly, the court’s observation that § 552.109(a) is “jarringly

inconsistent” with § 552.3 is traceably misguided. (27a). § 552.109(a)

does not directly implicate § 552.3’s definition of “domestic service

employment;” it expressly corresponds to § 552.6’s definition of

“companionship services.” See 29 C.F.R. § 552.109(a) (referencing

§ 552.6). Together, §§ 552.6 and 552.109(a) thus regulate the appli-

cation of minimum wage and overtime pay requirements to “com-

panionship services,” which is a statutory subset of “domestic service

employment.” See 29 U.S.C. § 213(a)(15). This subset exemption for

“companionship services” carved out by § 552.109(a) easily coexists

with § 552.3’s narrower exemption for the general category of “domes-

tic service employment.” Nor, as the Second Circuit suggests, does

any inconsistency arise from the fact that the Department of Labor has

previously considered changing § 552.109(a). (28a). § 552.109(a) has

for having failed to “adequately explain[ }” the rationale

underlying § 552.109(a). (28a). Of course, the agency

did not participate in the district court proceedings and

no party ever had the opportunity to develop a factual

record.

Not surprisingly, neither Skidmore nor Mead condones

this approach, as it obviously undermines the presump-

tion that informal agency interpretations “constitute a

body of experience and informed judgment to which

courts and litigants may properly resort for guidance.”

Skidmore, 323 U.S. at 140. In consequence, this Court

should grant the petition in order to instruct lower courts

on the importance of giving agencies or other interested

parties a full and fair opportunity “to earn the weight” of

a challenged regulation. Air Brake Sys., 357 F.3d at 643

(emphasis in original).

remained unchanged for 30 years, and agencies should feel free to

consider revisions from time to (ime as good administration may

require. Chevron, 467 U.S. at 863-54 (“An initial agency interpre-

tation is not instantly carved in stoi. :. On the contrary, the agency, to

engage in informed rulemaking, must consider varying interpretations

and the wisdom of its policy on a continuing basis.”)

Finally, the Second Circuit's criticism of the agency's 1974 con-

struction of § 213(a)(15) is fundamentally confused. Based upon the

agency's general regulatory definition of “domestic service employ-

ees”—which includes only domestic service employees who are

employed directly by homeowners—the court found that the exten-

sion of the statutory exemption from minimum wage and overtime

pay requirements to employees of third party employers was contrary

to the “plain language” of the statute. (29a). But the statute empow-

ers the Department of Labor to exempt from these requirements “any

employee employed in domestic service employment fo provide com-

panionship services.” 27 U.S.C. §213(a)(15) (emphasis added).

Hence, § 552.109(a)’s exemption of home health care workers employed

by third parties fits neatly into the statutory exemption for “any

employee” hired “to “provide companionship services.” Jd. (empha-

sis added). The court of appeals’ construction of § 213(a)(15) thus

inexplicably ignores the statute’s “companionship” qualifier.

CONCLUSION

The petition for a writ of certiorari to review the judg-

ment of the United States Court of Appeals for the Sec-

ond Circuit should be granted.

Dated: New York, New York

March 29, 2005

Respectfully submitted,

DANIEL S. ALTER, ESQ.*

c/o ALTER & ALTER

300 East 42nd Street, 10th Floor

New York, New York 10017

(212) 867-7777

Counsel for Petitioners

*Counsel of Record

APPENDICES

Appendix A

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

August Term 2003

(Argued March 4, 2004 Decided July 22, 2004)

Docket No. 03-7666

EVELYN COKE,

Plaintiff-Appellant,

LONG ISLAND CARE AT HOME, LTD.,

and MARYANN OSBORNE,

Defendants-Appellees.

Before:

WALKER, Chief Judge, KATZMANN, Circuit Judge,

and GLEESON, District Judge.*

Appeal from the grant of defendants’ motion for judg-

ment on the pleadings by the United States District

Court for the Eastern District of New York (Thomas C.

Platt, District Judge), finding two regulations promul-

* The Honorable John Gleeson, of the United States District

Court for the Eastern District of New York, sitting by designation.

gated by the Department of Labor defining and inter-

preting the “companionship services” exemption in the

Fair Labor Standards Act, 29 U.S.C.§ 213(a)(15), to be

enforceable, thereby precluding plaintiff’s claims for

minimum wage and overtime compensation under the

Aes

AFFIRMED in part; VACATED in part; and REMANDED.

HAROLD CRAIG BECKER, Service Employees

International Union, AFL-CIO, Chicago,

IL (Michael Shen, Constantine P.

Kokkoris, New York, NY, on the brief),

for Plaintiff-Appellant.

Arnold S. Klein, Meltzer, Lippe & Goldstein,

LLP, Mineola, NY (on submission), for

Defendants-Appellees.

FORD NEWMAN, Senior Attorney, United States

Department of Labor (Howard M.

Radzely, Acting Solicitor of Labor,

Steven J. Mandel, Associate Solicitor,

Paul L. Frieden, Counsel for Appellate

Litigation, on the brief), Washington,

D.C., for Amicus Curiae United States

Secretary of Labor.

JOHN M. WALKER, JR., Chief Judge:

___ At issue in this appeal is the enforceability of two reg-

*\<--istions promulgated by the Department of Labor

(“DOL”) that define and interpret the “companionship

services” exemption in the Fair Labor Standards Act

(“FLSA” or “the Act”), 29 U.S.C.§ 213(a)(15). The Act

generally requires minimum wage and overtime com-

pensation; the “companionship services” exemption

relieves employers from paying such compensation to

those employees who work in domestic service as

babysitters and comp2nions to the elderly and infirm.

_The regulations at issue implement the exemption with

respect to companions.

The first regulation we consider is a regulation that

defines the exemption. It includes within the exemption

(1) those who perform household work related to the care

of the elderly or infirm and (2) those who also perform

housework incidental to their “companionship services”

as long as the housework accounts for less than twenty

percent of the weekly hours worked. See 29 C.F.R.

§ 552.6. The second regulation we consider applies the

exemption to “[e]mployees who are engaged in providing

companionship services, as defined in § 552.6, and who

are employed by an employer or agency other than the

family or household using their services.” See 29 C.F.R.

§ 552.109(a). The district court found both of these reg-

ulations to be entitled to the highest form of deference

available to agency regulations and, accordingly, found

them legally enforceable. See Coke v. Long Island Care

at Home, Ltd., 267 F. Supp. 2d 332 (E.D.N.Y. 2003).

We affirm the enforceability of the first regulation,

§ 552.6, according it the highest level of deference avail-

able to agencies pursuant to Chevron, U.S.A., Inc. v. Nat-

ural Resources Defense Council, Inc., 467 U.S. 837

(1984). But we conclude that the second regulation,

§ 552.109(a), is neither entitled to Chevron deference

nor enforceable; we find it to be entitled only to the

more limited level of deference announced in Skidmore

v. Swift & Co., 323 U.S. 134 (1944), and reaffirmed in

United States v. Mead Corp., 533 U.S. 218 (2001).

Because the second regulation is unpersuasive in the

context of the entire statutory and regulatory scheme, it

fails Skidmore’s test and cannot be enforced. Accord-

ingly, we AFFIRM in part, VACATE in part, and REMAND

for further proceedings.

FACTUAL BACKGROUND

Plaintiff-appellant Evelyn Coke appeals from the judg-

ment on the pleadings, entered pursuant to Federal Rule

of Civil Procedure 12(c), in favor of defendants-

appellees Long Island Care at Home, Ltd. and owner

Maryann Osborne, by the United States District Court

for the Eastern District of New York (Thomas C. Platt,

District Judge). See Coke, 267 F. Supp. 2d at 332-41.

The Secretary of Labor submitted an amicus brief argu-

ing on behalf of defendants-appellees that the district

court’s ruling should be affirmed.

Unlike most, if not all, of the other courts that have

considered the issues in this appeal,” we review Coke’s

case before the summary judgment stage and, thus, with-

out any factual development. All we know is that Coke

filed this action under the FLSA, alleging that she was

employed as a “home healthcare attendant” by defen-

dants, who did not pay her minimum wage or overtime

compensation. While such compensation is generally

2 _—' We collect the full citations to such cases here in chronolog-

ical order for ease of reference: McCune v. Or. Senior Servs. Div., 894

F.2d 1107 (9th Cir. 1990); Cox v. Acme Health Servs., Inc., 55 F.3d

1304 (7th Cir. 1995); Salyer v. Ohio Bureau of Workers’ Comp., 83

F.3d 784 (6th Cir. 1996); Terwilliger v. Home of Hope, Inc., 21 F. Supp.

2d 1294 (N.D. Okla. 1998); Johnston v. Volunteers of Am., Inc., 213

F.3d 559 (10th Cir. 2000); Madison v. Res. for Human Dev., Inc., 233

F.3d 175 (3d Cir. 2000); Harris v. Dorothy L. Sims Registry, No. 00 C

3028, 2001 U.S. Dist. LEXIS 23263, 2001 WL 78448 (N.D. Ill. Jan.

29, 2001); Welding v. Bios Corp., 353 F.3d 1214 (10th Cir. 2004).

required under the FLSA, Coke acknowledges that the

“companionship services” exemption to the FLSA, as

defined and interpreted by the DOL regulations, applies

to her employment and that if the regulations at issue are

enforceable, she cannot prevail. Her arguments are

purely legal.

Coke contends that the two regulations defining and

interpreting “companionship services” are unreasonable

and impermissible in light of the statute’s clear language

and statutory purpose. Coke candidly calls her action a test

case, “challenging the regulation[s] on [their] face.” She

does not allege that the regulations are being improperly

applied to a subclass of employees but, rather, that they

contravene legislative will and are therefore unenforce-

able. After the district court accorded the two regulations

Chevron deference and found them to be permissible under

the statute, it granted defendants’ motion for judgment on

the pleadings. This appeal followed.

DISCUSSION

I. Standards of Review

We review the decision of the district court de novo

both because the judgment below was entered on the

pleadings on a matter of statutory construction, Levy v.

Southbrook Int’l Invs., Ltd., 263 F.3d 10, 14 (2d Cir.

2001); Davidson v. Flynn, 32 F.3d 27, 29 (2d Cir. 1994),

and, more specifically, because the decision as to

whether an FLSA exemption may be applied to a class of

claimants is a question of law, Freeman v. NBC, 80 F.3d

78, 82 (2d Cir. 1996). Moreover, the question of the

appropriate level of deference to accord agency regula-

tions is one purely of law, subject to de novo review. See

Ossen v. Dep’t of Soc. Servs. (In re Charter Oak

Assocs.), 361 F.3d 760, 764 (2d Cir. 2004) (pure ques-

tions of law are reviewed de novo). See generally 5

U.S.C. § 706 (“[T]he reviewing court shall decide all

relevant questions of lawL”). At this stage of the liti-

gation, it is conceded by both parties that there are no

disputed issues of material fact.

Our review in the FLSA context is guided by a few

specialized principles. Because the FLSA is a remedial

act, its exemptions are to be narrowly construed. See

Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392 (1960);

Mitchell v. Lublin, McGaughy & Assocs., 358 U.S. 207,

211 (1959). And an employer bears the burden of prov-

ing that its employees fall within an exemption in the

FLSA. See Corning Glass Works v. Brennan, 417 U.S.

188, 196-97 (1974); Arnold, 361 U.S. at 392; Donovan

v. Carls Drug., 703 F.2d 650, 652 (2d Cir. 1983). In sum,

“[t]o extend an exemption to other than those plainly and

unmistakably within its terms and spirit is to abuse the

interpretative process and to frustrate the announced will

of the people.” A.H. Phillips, Inc. v. Walling, 324 U.S.

490, 493 (1945). Bearing these guiding principles in mind,

we undertake our de novo review of the district court’s

decision upholding the two regulations at issue here.

II. Statutory Scheme

The FLSA, enacted by Congress in 1938, requires that

most workers receive minimum wage and overtime com-

pensation for hours worked in excess of forty per week.

See generally 29 U.S.C. § 201 et seq. In 1974, Congress

amended the FLSA to broaden its coverage to a new set of

workers, previously unprotected by the Act: employees

performing “domestic services.” While the statute itself

did not define “domestic service employment,” the Sen-

ate Committee Report confirms the commonly understood

meaning of the term to include those employed within the

home as cooks, butlers, valets, maids, housekeepers, gov-

ernesses, janitors, laundresses, caretakers, handymen, gar-

deners, footmen, grooms, chauffeurs, and the like. See S.

Rep. No. 93-690, at 20 (1974); see also H.R. Rep. No. 93-

913, at 35-36 (1974). However, while extending FLSA

protections to employees in domestic service, Congress ~—

carved out an exemption for employees engaged in

“babysitting services” and “companionship services.” The

exemption withholds FLSA benefits from:

any employee employed on a casual basis in domes-

tic service employment to provide baby-sitting ser-

vices or any employee employed in domestic

service employment to provide companionship ser-

vices for individuals who (because of age or infir-

mity) are unable to care for themselves (as such

terms are defined and delimited by regulations of

the Secretary [of Labor])....

29 U.S.C.§ 213(a)(15). In order to more clearly delineate

those who are subject to the exemption, the Secretary of

Labor, soon after the adoption of the 1974 amendments,

promulgated a series of regulations, including the two

that Coke challenges here.

Ill. Regulatory Scheme

The first regulation Coke challenges was promulgated

in exercise of the authority delegated by§ 213(a)(15) to

define “companionship services.” It defines “compan-

ionship services” as

those services which provide fellowship, care, and

protection for a person who, because of advanced

age or physical or mental infirmity, cannot care for

his or her own needs. Such services may include

household work related to the care of the aged or

infirm person such as meal preparation, bed making,

washing of clothes, and other similar services. They

may also include the performance of general house-

hold work: Provided, however, [t]hat such work is

incidental, i.e., does not exceed 20 percent of the

total weekly hours worked.

29 C.F.R. § 552.6.

A related regulation (not challenged here), also pro-

mulgated in clear exercise of the authority delegated by

§ 213(a)(15), adopts the House Committee Report’s def-

inition of “domestic service employment.” That regu-

lation states that domestic service “refers to services of

a household nature performed by an employee in or

about a private home. . . of the person by whom he or

she is employed.” 29 C.F.R. § 552.3 (emphasis added);

cf. H.R. Rep. No. 93-913, at 35 (defining “domestic ser-

vice employment” to be “services of a household nature

performed by an employee in or about a private home of

the person by whom he or she is employed”); see also S.

Rep. No. 93-690, at 20 (stating that the House’s con-

struction of “domestic service employment” to exclude

third party employment is “generally accepted”).

The second regulation Coke challenges, 29 C.F.R.

§ 552.109(a), also promulgated soon after the 1974

amendments, expressly extends the exemption by includ-

ing employees “who are employed by an employer or

agency other than the family or household using their

services.” Section 552.109(a) appears under the “Subpart

B” heading, “Interpretations,” as opposed to the “Sub-

part A” heading, “General Regulations,” under which

§ 552.3 and § 552.6 are listed. This regulation exempted

employees who the DOL concedes were not exempt prior

to the 1974 amendments. See Employment of Domestic

Service Employees, 39 Fed. Reg. 35, 382, 35,385 (pro-

posed Oct. 1, 1974) (finding that “[e]mployees who are

engaged in providing . . . companionship services and

who are employed by an employer other than the fami-

lies or households using such services” were “subject to

the [FLSA] prior to the 1974 Amendments”). Prior to the

promulgation of § 552.109(a), the DOL put out a dif-

ferent proposed rule for notice and comment: one that

specifically declined to apply the “companionship ser-

vices” exemption to employees of third party employers.

See id. Following notice and comment on that proposed

regulation, the agency reversed its position and offered.

the following explanation: “On further consideration,

[the Secretary of Labor] ha[s] concluded that these

exemptions can be available to such third party employ-

ers since they apply to ‘any employee’ engaged ‘in’ the

enumerated services.” Application of the Fair Labor

Standards Act to Domestic Service, 40 Fed. Reg. 7404,

7405 (Feb. 20, 1975) (codified at 29 C.F.R. pts. 516,

552). The statement accompanying the regulation did not

explain how bringing these previously covered employ-

ees of third party employers within the exemption fur-

thered the congressional purpose of expanding, and not

narrowing, FLSA coverage from what it had been prior

to 1974. The DOL did not extend the exemption to apply

to those employees employed by third parties that pro-

vide “babysitting services.” See 29 C.F.R. § 552.109(b).

The DOL has enforced the two regulations at issue

since their promulgation in 1974 and Congress has not

disturbed the details of the scheme recounted here in the

nearly thirty years they have been in force. In early

2001, however, the agency proposed amendments to the

regulations pertaining to the “companionship services”

exemption, which were subsequently abandoned. In

proposing the amendments, the DOL stated:

Due to significant changes in the home care indus-

try over the last 25 years, workers who today pro-

vide in-home care to individuals needing assistance

en ce

10a

vith activities of daily living are performing types

of duties and working in situations that were not

envisioned when the companionship services regu-

lations were promulgated. The number of workers

providing these services has also greatly increased,

and most of these workers are being excluded from

the FLSA under the companionship services exemp-

tion. The Department has reevaluated the regula-

tions and determined that—as currently written—

they exempt types of employees far beyond those

whom Congress intended to exempt when it enacted

section [2]13(a)(15). Therefore, the Department

proposes to amend the regulations to revise the def-

inition of “companionship services,” which sets out

the duties that a companion must be employed to

perform in order to qualify for the exemption, to

more closely mirror Congressional intent.

See Application of Fair Labor Standards Act to Domes-

tic Serivce, 66 Fed. Reg. 5481, 5482 (proposed Jan. 19,

2001). The DOL further explained what it understood to

have been the congressional intent in 1974:

[I]t clearly was Congress’ intent under the 1974

FLSA Amendments to cover all workers who per-

formed domestic services as a vocation, excluding

casual babysitters and providers of companionship

services who were not regular bread winners or

responsible for their [own] families’ support. . . .

Personal and home care aides perform a variety of

tasks in the home, including household work and

assistance with nutrition and cleanliness. Employ-

ers have generally treated workers employed as

home health aides and personal and home care aides

as exempt companions, based upon the Depart-

ment’s current regulations. . . . As a result, the

lla

Department believes it is necessary to amend the

regulations to focus them on fellowship and pro-

tection duties that Congress originally intended the

companion exemption to cover.

Id. at 5483. The 2001 proposed amendments to the reg-

ulations would have extended FLSA protection to

employees who are hired by “someone other than a

member of the family in whose home he or she works.”

Id. at 5482. The DOL expressly acknowledged that there

exists an internal inconsistency between § 552.109(a)

and § 552.3 and that § 552.3 is more consistent with the

congressional purpose as it existed in 1974. /d. at 5485.

Nonetheless, without further addressing the inconsis-

tency, the DOL withdrew the proposed amendments in

April 2002 because “numerous comment(s] on the pro-

posed rule, including [comments offered by] multiple

government agencies. . . seriously called into question

the Department’s conclusion that there would be little

economic impact.” Application of the Fair Labor Stan-

dards Act to Domestic Service, 67 Fed. Reg. 16,668

(Apr. 8, 2002). Upon withdrawing the proposed amend-

ments, the DOL did not question or otherwise comment

upon its 2001 conclusion about what congressional

intent had been in 1974.

IV. The Enforceability of 29 C.F.R. § 552.6

A. Degree of deference to accord to the DOL

The district court accorded Chevron deference to

§ 552.6’s definition of “companionship services.” Nei-

ther party in this case objects to this because the statute

directed the DOL to promulgate legislative regulations

to define the term “companionship services” as it

appears in 29 U.S.C. § 213(a)(15), and the regulations

are plainly an exercise of that authority. See Mead, 533

12a

U.S. at 226-27 (clarifying that Chevron deference is

appropriate when a statute clearly delegates authority to

an agency and the agency acts purporting to exercise that

authority); Chao v. Russell P. Le Frois Builder, Inc., 291

F.3d 219, 226 (2d Cir. 2002); 29 C.F.R. § 552.2(c)

(expressly stating that “[t]he definitions required by

§ [2]13(a)(15) are contained in § 552.3, § 552.4, § 552.5

and § 552.6”). Accordingly, § 552.6 is binding on the

courts unless procedurally defective, “arbitrary, capri-

cious, or manifestly contrary to the statute.” Chevron,

467 U.S. at 844. Here, Coke argues that § 552.6 is unen-

forceable as being manifestly contrary to the statute.

In applying Chevron deference, we follow a two-step

analysis: “If the intent of Congress is clear, that is the

end of the matter; for the court, as well as the agency,

must give effect to the unambiguously expressed intent

of Congress.” Jd. at 842-43. When the terms of a statute ©

are unambiguous, the judicial inquiry is complete. How-

ever, if there is ambiguity in the statute, we proceed to

step two and inquire whether the agency’s legislative

regulation is a reasonable and permissible construction

of the statute. Jd. at 843-44. “If the agency’s reading fills

a gap or defines a term in a reasonable way in light of

the Legislature’s design, we give that reading controlling

weight, even if it is not the answer the court would have

reached if the question initially had arisen in a judicial

proceeding.” Regions Hosp. v. Shalala, 522 U.S. 448,

457 (1998) (internal quotation marks omitted) (citing

Chevron, 467 U.S. at 843 n.11). We are also mindful that

“a long-standing, contemporaneous construction of a

statute by the administering agenc[y] is entitled to great

weight.” Leary v. United States, 395 U.S. 6, 25 (1969) _

(internal quotation marks and citations omitted).

13a

B. Application of Chevron

Coke argues that we needn’t arrive at step two of the

Chevron inquiry and that we should find that the statute

plainly and on its face prohibits the agency’s definition

of “companionship services.” In particular, she contends

that the regulation’s inclusion within the definition of

both housework related to the care of the elderly or

infirm and housework incidental to that care are viola-

tive of the statute’s command to fashion an exemption

only for “companionship services.” Coke suggests that

the large amount of incidental housework permitted by

the current regulation (twenty percent of the work) is an

abuse of the delegation under the statute. Indeed, she

argues, under a particular reading of the regulation’s sec-

ond sentence (the one that allows work “related to” the

care of the elderly or infirm), “household work” would

be exempt even if no companionship were provided at

all: “Under the regulation, an elderly person unable to

care for him or herself could hire a full-time companion

and a full-time cook, pay the cook less than the mini-

mum wage, and successfully assert that cooking is a

companionship service . . . .” Appellant’s Br. at 16.

Thus, because Congress clearly indicated that “com-

panionship services” were meant to be a subset of domes-

tic services, and the regulation can be read to exempt

pure domestic service without companionship, Coke

argues that the regulation was drawn too broadly on its

face. Since Congress wanted to make sure domestic ser-

vice employees got FLSA protection, she argues that

§ 552.6’s extension of the exemption to “meal prepara-

tion, bed making, [and] washing of clothes” places too

many domestic service employees within the exemption,

a nesult that Congress could not have intended. The dis-

trict court properly rejected these arguments.

l4a

The statute plainly gives the DOL authority to define

“companionship services,” a vague term with no obvious

plain meaning; and the DOL did so very soon after the

passage of the amendments to the FLSA. On the face of

the statute, we discern no unambiguous congressional

intent to keep all “incidental” services and domestic ser-

vices “related to” the care of the elderly and infirm out-

side the exemption, especially when such services would

naturally follow from or be part of a reasonable job

description of a companion to the elderly or infirm.

Although the Supreme Court has issued mixed mes-

sages as to whether a court may consider legislative his-

tory at this stage of the analysis (step one of Chevron,,°

that history plainly presupposes that some incidental or

other related housework would accompany “compan-

ionship.” For example, Senator Quentin Burdick wanted

to extend FLSA coverage for “professional domestic[s]”

but was concerned about the potential burden on house-

hold employers where “people who might have an aged

father, an aged mother, an infirm father, an infirm

mother, and a neighbor comes in and sits with them.

This, of course, entails some work, such as perhaps mak-

3. Compare FDA v. Brown & Williamson T-bacco Corp., 529

U.S. 120, 133, 137 (2000) (effectively considering legislative his-

tory at step one of Chevron analysis), Pauley v. BethEnergy Mines,

Inc., 501 U.S. 680, 697-99 (1991) (same), Pension Benefit Guar.

Corp. v. LTV Corp., 496 U.S. 633, 649-50 (1990) (same), and Japan

Whaling Ass’n v. Am. Cetacean Soc’y, 478 U.S. 221, 233-41 (1986)

(same), with K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 293 n.4

(1988) (opinion of Kennedy, J.) (noting in the first step of a

Chevron inquiry that “any reference to legislative history [ ] is in

the first instance irrelevant”), Sutton v. United Air Lines, Inc., 527

U.S. 471, 482 (1999) (finding statutory text clear enough to ignore

any arguments from legislative history), and Nat’l R.R. Passenger

Corp. v. Boston & Me. Corp., 503 U.S. 407, 417 (1992) (finding

only statutory text to be relevant for first-step Chevron analysis).

15a

ing lunch. . . . This would be incidental to the main

purpose of the employment.” 119 Cong. Rec. 24,773,

24,801 (1973). Senator Harrison Williams explained the

purpose of the “companionship services” exemption

through an analogy to the “babysitting” exemption:

We use the situation in which peopie are in a house-

hold not to do household work but are there, first, as

babysitters. I think we all have the full meaning in

mind of what a babysitter is there for—to watch the

youngsters.

“Companion,” as we mean it, is in the same role —

to be there and to watch an older person, in a sense.

[Household work] which is purely incidental would

not change the category of the person being there in

the household.

Id. Without attaching primacy to using legislative his-

tory at step one, it seems to us more likely than not that

Congress understood that when employees are in the

home “first” to be companions or babysitters, they may

engage in “incidental” housework without falling outside

the exemption. The DOL’s regulatory choice of the

twenty percent allowance for incidental work is not

clearly contravened by either the text of the statute or

the intent of Congress to the extent it is discernable.

More troubling is the second sentence of the regula-

tion, which is not delimited by the twenty percent rule.

It does seem to allow, as Coke argues, virtually unlim-

ited household work as long as it is “related to the care

of the aged or infirm person.” The DOL, however, in its

amicus brief explains:

Under section 552.6, an employee must “provide

fellowship, care, and protection” for a person unable

l6a

to care for himself in order to meet the requirements

of the “companionship services” exemption. While

& the regulation allows for the performance of some

household work, it must be either “related to” or

“incidental” to the “care of the aged or infirm per-

son. See 29 C.F.R. § 552.6.” Thus, contrary to

[Coke’s] suggestion, an employee hired only to per-

form household work or as a “full-time cook” would

not meet the requirements of the regulation. An

2 employee who has not been hired primarily to pro-

vide “fellowship, care, and protection” will not be

considered exempt under the Act or the regulations.

Br. of Amicus Curiae DOL at 19 (citations omitted). The

DOL’s explanation is adequate. At best, the regulation is

ambiguous on the question of whether the first sentence

of the regulation must be satisfied—that an employee

must first provide “fellowship, care, and protection”—

before proceeding to the inquiry about whether to

exempt the “related” household work.

We note, however, that we have no occasion to limit

the enforcement of § 552.6 to the DOL’s litigation posi-

tion here because Coke concedes that her challenge is to

the regulation “on its face,” that is, in all its applica-

tions. Coke has specifically refused to challenge the reg-

ulation “as applied” to any particular class of employees.

We do not rule out the possibility of an application that

would contravene the plain statutory mandate, but

because there are many applications of the regulation

that are consistent with the statute, we cannot declare it

invalid on its face. See generally Reno v. Flores, 507

U.S. 292, 301 (1993) (extending the no-set-of-circum-

stances test for facial constitutional challenges to

statutes under United States v. Salerno, 481 U.S. 739

(1987), to Chevron challenges). In any event, Coke pre-

sents no facts upon which we could conclude that the

agen - n

CRAP ALC Pe oe eee Te ee ee Tee, eee ee

17a

agency has ever applied the regulation in the purportedly

impermissible way she envisions.

If we refused to consider the unequivocal legislative

history at step one of Chevron, the statute is at best

ambiguous on the question of whether incidental services

and household work related to the care of the individual

may accompany the fellowship and companionship focus

of the exemption.* And step two of Chevron requires us

to inquire if the DOL’s regulation “harmonizes with the

language, origins, and purpose of the statute.” Bankers

Life & Cas. Co. v. United States, 142 F.3d 973, 983 (7th

Cir. 1998). Consideration of legislative history is gen-

erally accepted at this stage of the analysis. E.g., Toibb

v. Radloff, 501 U.S. 157, 162 (1991); Bankers Life, 142

F.3d at 983.

Coke also argues that § 552.6 fails step two of

Chevron. Coke repeats the arguments she makes in con-

nection with step one and also focuses on Senator Bur-

dick’s statement in the legislative history that sums up

the “companionship services” exemption as one targeted

for “elder sitter[s].” See 119 Cong. Rec. at 24,801. Coke

intimates that a sitter must only sit, without lifting a

hand to help the elderly or infirm with incidental house-

work. But, again, we agree with the district court that

4 The DOL’s 2001 statements do not prove that § 552.6 is

unenforceable. First, the DOL’s contemporaneous assessment of

congressional intent is more probative: Apparently, the DOL

thought § 552.6 represented congressional intent in 1974 and the

enacting Congress expressed no discontent. Second, the DOL’s

interpretation of congressional intent, whether in 2001 or 1974,

could never be dispositive for our Chevron inquiry. Of course, the

entire purpose of the Chevron inquiry is to determine congressional

intent quite apart from what the agency interprets that intent to be.

Only if we conclude that the enacting Congress’s intent is ambigu-

ous do we defer to reasonable interpretations of the gap left by the

ambiguity.

18a

§ 552.6 survives the Chevron inquiry. The Senate

Report, cited by Coke, makes clear that some incidental

household work and housework related to the care of the

elderly or infirm does not contravene the purpose of the

exemption. See 119 Cong. Rec. at 24,801 (1973). The

idea that a sitter merely sits is belied by Senator Bur-

dick’s analogy: Sitters provide care, and care entails

other incidental tasks such as food preparation, feeding.

cleaning up messes, changing diapers, and other ser-

vices. Accordingly, given the deference afforded the

agency under Chevron, we are unable to conclude that

§ 552.6 is arbitrary, capricious, or manifestly contrary to

the statute with respect to either (1) the twenty percent

allowance for incidental housework in the agency’s leg-

islative regulation, or (2) the agency’s allowance for

household work related to the care of the individual.

Every circuit to have considered the question of the

enforceability of § 552.6 has found the regulation

enforceable on its face. See, e.g., Johnston, 213 F.3d at

565; Salyer, 83 F.3d at 787; McCune, 894 F.2d at 1110.

Only Harris, 2001 U.S. Dist. LEXIS 23263, at *17, a

district court decision from the Northern District of IIli-

nois, found the regulation too broad. Harris, of course,

in no way binds us. Moreover, Harris was an “as

applied” case and its ultimate pronouncement was nar-

row. While it calls § 552.6 “unreasonably broad” in the

text of the opinion, id. at *11, it is more circumspect

when it announces its final holding: “§ 552.6, as cur-

rently drafted, is invalid to the extent it exempts home-

makers from [FLSA] coverage,” id. at *17 (emphasis

added); only the particular case of the regulation “as

applied” to homemakers—as the plaintiffs were in that

case—was held to be outside the “companionship ser-

vices” exemption.

19a

In the case before us, however, because Coke does not

tell us anything about what “home healthcare attendants”

actually do, it is impossible for us to pass on the ques-

tion of whether the particular work she did was consid-

ered by Congress to be outside the exemption.

Consistent with her facial challenge to § 552.6, Coke

refused to amend her complaint to be more specific

about what she does. For the foregoing reasons, the reg-

ulation withstands Chevron deference on this challenge.

Accordingly, we AFFIRM the district court’s ruling with

respect to the enforceability of § 552.6.

V. The Enforceability of 29 C.F.R. § 552.109(a)

We now turn to Coke’s challenge to § 552.109(a),

which applies the exemption to “companionship ser-

vices” rendered by those who are employed by third par-

ties, rather than by the family of the recipient of the

services.

A. Degree of deference to accord to the DOL

_ The threshold question concerning § 552.109(a)’s

enforceability is the degree of deference to be afforded

the DOL. Coke argues that the district court erred by

according Chevron deference to the regulations that the

DOL itself calls “interpretations.” The DOL argues that

such deference was appropriate. Although the district

court did not directly consider the question, it is purely

one of law, which we consider de novo. See Ossen, 361

F.3d at 764.

In favor of applying Chevron deference is Chevron’s

own broad statement and Mead’s endorsement of that

statement:

When Congress has “explicitly left a gap for an

agency to fill, there is an express delegation of

20a

authority to the agency to elucidate a specific pro-

vision of the statute by regulation,” and any ensuing

regulation is binding in the courts unless procedu-

rally defective, arbitrary or capricious in substance,

or manifestly contrary to the statute.

Mead, 533 U.S. at 227 (citation omitted) (quoting

Chevron, 467 U.S. at 843-44). Thus, to the extent that

the statute is silent on the definition of a “domestic ser-

vice employee” and contains no reference to third party

employers, such matters might be understood to be

appropriately delegated to the DOL. An agency inter-

pretation “qualifies for Chevron deference when it

appears that Congress delegated authority to the agency

generally to make rules carrying the force of law, and

that the agency interpretation claiming deference was

promulgated in the exercise of that authority.” Mead,

533 U.S. at 226-27 (emphasis added). The statute, 29

U.S.C.§ 213(a)(15), expressly delegated authority to the

DOL to define and delimit the terms “companionship

services” and “domestic service employee,” and the

DOL argues that Chevron deference follows accordingly.

Moreover, the regulation at issue is “a long-standing,

contemporaneous construction of a statute,” and, as

such, “entitled to great weight.” Leary, 395 U.S. at 25

(internal quotation marks omitted). Indeed, Congress has

revisited 213 by amending it seven times since 1974,

without expressing any disapproval of the DOL regula-

tion at issue, see Pub. L. No. 95-151 (1977); Pub. L. No.

96-70 (1979); Pub. L. No. 101-157 (1989); Pub. L. No.

103-329 (1994); Pub. L. No. 104-88 (1995); Pub. L. No.

104-188 (1996); Pub. L. No. 105-78 (1997). Such con-

gressional acquiescence is “persuasive evidence that the

[agency] interpretation is the one intended by Congress.”

2la

Commodity Futures Trading Comm'n v. Schor, 478 U.S.

833, 846 (1986).°

Finally, when an agency action is “ ‘the fruit[ ] of

notice-and-comment rulemaking or formal adjudication,’ ”

courts generally accord the agency Chevron deference.

Chao, 291 F.3d at 227 (quoting Mead, 533 U.S. at 230).

Here, no one contests that, although the agency calls

§ 552.109(a) an “interpretation,” it was promulgated fol-

lowing notice and comment procedures. However, it is

also true (and a cause of concern) that the rule the

agency adopted after comments were received was the

opposite of the rule proposed in the original notice.

There was no separate notice and comment on the rule as

ultimately adopted.

All courts that have considered § 552.109(a) have

accorded it Chevron deference. See, e.g., Johnston, 213

F.3d at 561-62; Terwilliger v. Home of Hope, Inc., 21 F.

Supp. 2d at 1299 n.2. But Coke is correct that none of

these prior cases carefully considered the question

before us now: Does Mead, which post-dates the cases

affording § 552.109(a) Chevron deference, require a dif-

5 The argument from congressional acquiescence—affec-

tionately known as the “dog didn’t bark canon”—must always be

qualified by the observation that evidence of what subsequent Con-

gresses intend pales in comparison to probative evidence about what

the enacting Congress intended; even Schor did not rely on what it

called the “silence” rule. 478 U.S. at 846. See generally William N.

Eskridge, Jr. et al., Cases and Materials on Legislation: Statutes

and the Creation of Public Policy 1020-21 (3d ed. 2001) (discussing

the “dog didn’t bark canon”). Furthermore, because Congress, in

amending 213, never reenacted the FLSA or the relevant provisions

thereof, this is not a case that implicates the “re-enactment rule”

delineated in Lorillard v. Pons, 434 U.S. 575, 580 (1978), where

“Congress is presumed to be aware of an administrative . . . inter-

pretation of a statute and to adopt that interpretation when it re-

enacts a statute without [relevant] change.”

| |

22a

ferent analysis yielding a different result insofar as it

holds that some agency regulations should be accorded

less than Chevron deference?

Coke argues that Mead requires us to apply a lesser

degree of deference to § 552.109(a) as an “interpretive,”

rather than a “legislative” regulation. Indeed, “inter-

pretive rules . . . enjoy no Chevron status as a class.”

Mead, 533 U.S. at 232.

This circuit, even before the Supreme Court’s clari-

fication in Mead, contemplated that interpretive regu-

lations should not receive full Chevron deference. In

Reich v. New York, 3 F.3d 581, 587 (2d Cir. 1993), we

considered DOL regulations promulgated to define and

delimit the administrative exemption in the FLSA at 29

U.S.C.§ 213(a)(1). We held, “In contrast to the con-

trolling authority given the [DOL’s] legislative rules—

i.e., those promulgated pursuant to an express grant of

Congressional authority—the respect accorded the

[DOL’s] interpretive regulations depends upon their per-

suasiveness. . . .” Id. We foretold the precise distinc-

tion later drawn in Mead when that Court distinguished

between those regulations that are accorded Chevron

deference and those that are not. In Reich v. New York,

the interpretations from which Chevron deference was

withheld were classified as “interpretations” by the reg-

ulations themselves. See also Freeman, 80 F.3d at 83-84

(refusing to accord Chevron deference to DOL inter-

pretations under the FLSA despite their promulgation

with notice and comment procedures); Reich v. Gateway

Press, Inc., 13 F.3d 685, 699 n.18 (3d Cir. 1994) (“The

DOL interpretations do not have the force of law.”).

We find § 552.109(a) to be an interpretive rather than

a legislative regulation. While the rule “grants rights,

imposes obligations, or produces other significant effects

on private interests,” as legislative regulations do, White

23a

v. Shalala, 7 F.3d 296, 303 (2d Cir. 1993) (internal quo-

tation marks omitted), a rule can only be legislative “if

the agency intended to use [the legislative power dele-

gated to it by Congress] in promulgating the rule at

issue,” American Postal Workers Union, AFL-CIO v.

United States Postal Serv., 707 F.2d 548, 558 (D.C. Cir.

1983). Here, the DOL did not intend to use the legisla-

tive power delegated in§ 213(a)(15) when it promulgated

§ 552.109(a). This is most apparent from its inclusion of

the regulation under “Subpart B-Interpretations” as

opposed to “Subpart A-General Regulations.” This

appearance is supported by substance.

Congress expressly delegated to the DOL authority to

- define terms in§ 213(a)(15), and the DOL expressly

states in 29 C.F.R. § 552.2(c) that “[t]he definitions

required by [2]13(a)(15) are contained in § 552.3,

§ 552.4. § 552.5 and § 552.6.” Accordingly, the regu-

lation at issue, § 552.109(a), is effectively conceded by

the DOL not to have been promulgated pursuant to

Congress’s express legislative delegation in§ 213(a)(15).

Mead holds that administrative implementation of a par-

ticular statutory provision does not qualify for Chevron

deference unless “it appears that the agency interpreta-

tion claiming deference was promulgated in the exercise

of that authority.” 533 U.S. at 226-27. Thus, § 552.109(a)

does not qualify for Chevron deference because, by the

DOL’s own account, it was self-consciously not pro-

mulgated in exercise of Congress’s delegated authority

pursuant to§ 213(a)(15).

The DOL places emphasis on the fact that in 1974

§ 552.109(a) was promulgated after notice and comment

and, indeed, Mead explicitly instructs us to consider

whether a rule was the product of notice and comment in

assessing whether to accord it Chevron deference. Mead,

533 U.S. at 230-31. However, “while notice and com-

24a

ment are required for legislative rules, they are by no

means prohibited for interpretive rules.” Mejia-Ruiz v.

INS, 51 F.3d 358, 365 (2d Cir. 1995). Mead does nothing

to undermine this conclusion. See Mead, 533 U.S. at

230-31: Thomas W. Merrill, The Mead Doctrine: Rules

and Standards, Meta-Rules and Meta-Standards, 54

Admin. L. Rev. 807, 814 (2002) (“I do not think the

Court was saying [in Mead] . . . that if an agency

adopts notice-and-comment or trial-type hearing pro-

cedures on its own authority, its interpretation is pre-

sumptively entitled to Chevron deference.” (emphasis

removed and emphasis added; citations omitted)). _

In this case, the agency undertook a notice and com-

ment procedure for an interpretative regulation despite

the fact that the procedure was not required. While Mead

does not offer specific guidance on whether putting a

proposed interpretation out for notice and comment has

any effect on deference, following the notice and com-

ment procedure, at most, buttresses a claim that the

agency gave consideration to what it did; it does not

alter the fact that the agency did not act pursuant to leg-

islative authority.

In any event, here we cannot ignore that the notice and

comment procedure for § 552.109(a) was at best idiosyn-

cratic and at worst insufficient. The original notice

informed the public that employees of third party

employers were not going to be exempt from the FLSA

(consistent with § 552.3), see 39 Fed. Reg. 35,385 (pro-

posed Oct. 1, 1974), but the final rule provided exactly

the opposite without a detailed explanation, see 40 Fed.

Reg. 7405 (Feb. 20, 1975). Because we conclude that

§ 552.109(a) is interpretative, and thus need not have

conformed with notice and comment procedures, we

have no occasion to decide whether this regulation is

invalid under the Administrative Procedure Act, 5

25a

U.S.C. 553(b)(3)(A). Cf. Nat’l Black Media Coalition v.

FCC, 791 F.2d 1016, 1022 (2d Cir. 1986) (“[I]f the final

rule deviates too sharply from the proposal, affected par-

ties will be deprived of notice and an opportunity to

respond to the proposal.”) (internal quotation marks

omitted). Nevertheless, we decline the DOL’s invitation

to bootstrap an entitlement to Chevron deference for an

interpretative regulation from this substandard notice

and comment procedure.°®

While we agree with Coke that § 552.109(a) does not

command Chevron deference, Mead nevertheless

requires us to afford the agency some level of deference

with the vague prescription to “tailor deference to vari-

ety,” 533 U.S. at 236. We believe that Skidmore defer-

ence based upon the regulation’s “power to persuade” is

the appropriate level of deference to be applied where,

as here, “the agency has some special claim to expertise

under the statute.” Merrill, supra, at 812. To the extent

that the regulation represents “more specialized expe-

rience and broader investigations and information” avail-

able to the agency, we will defer to reasonable

regulations. Skidmore, 323 U.S. at 139-40; see also

Metro. Stevedore Co. v. Rambo, 521 U.S. 121, 136

(1997) (reasonable agency interpretations carry “at least

some added persuasive force” where Chevron is inap-

6 Merrill finds “interpretive regulations adopted after notice-

and-comment procedures” to be within an “area of uncertainty”

after Mead for lower courts trying to determine whether to apply

Chevron deference. Merrill, supra, at 821. But see Adrian Vermeule,

Introduction: Mead in the Trenches, 71 Geo. Wash. L. Rev. 347, 350

(2003) (treating notice and comment procedures as affording the

agency a “safe harbor” entitlement to Chevron deference). We

needn't choose between Merrill and Vermeule here because even if

Vermeule is right, special circumstances surrounding the notice and

comment procedures here militate against furnishing the agency

with a safe harbor.

26a

plicable). In determining its “power to persuade,” we

look to § 552.109(a)’s “consisten[cy] with the congres-

sional purpose,” Morton v. Ruiz, 415 U.S. 199, 237

(1974); its consistency with other regulations, see Skid-

more, 323 U.S. at 140; the “consistency of the agency's

position” over time, Batterton v. Francis, 432 U.S. 416,

425 n.9 (1977); the “thoroughness evident in [the

agency’s] consideration”; and the “validity of its rea-

soning,” Skidmore, 323 U.S. at 140.

B. Application of Skidmore

Considering the regulation’s persuasiveness under

Skidmore’s less deferential standard, we agree with Coke

that § 552.109(a) is unenforceable. The regulation is

inconsistent with Congress’s likely purpose in enacting

the 1974 amendments; inconsistent with other regula-

tions (which themselves deserve Chevron deference);

and inconsistent with other agency positions over time.

Moreover, the agency does not proffer valid reasoning

for § 552.109(a)’s enforceability, evidencing a lack of

thorough consideration.

(1) Congressional purpose

When Congress sought to amend the FLSA in 1974, it

desired to expand FLSA coverage to “domestic service

employees,” and to exempt from coverage only those

“domestic service employees” engaged in “companion-

ship services.” At the time, persons who were employed

by a third party were outside the category of “domestic

service employees” and were protected by the FLSA

before the 1974 amendments. See Homemakers Home &

Health Care Servs., Inc. v. Carden, 538 F.2d 98 (6th Cir.

1976); 39 Fed. Reg. 35,385 (Oct. 1, 1974) (DOL finding

that “[e]mployees who are engaged in providing. . .

companionship services and who are employed by an

27a

employer other than the families or households using

such services. . . [were] subject to the [FLSA] prior to

the 1974 Amendments”); 66 Fed. Reg. 5485 (Jan. 19,

2001). See generally Molly Biklen, Note, Healthcare in

the Home: Reexamining the Companionship Services

Exemption to the Fair Labor Standards Act, 35 Colum.

Hum. Rts. L. Rev. 113, 117 (2003). It is implausible, to

say the least, that Congress, in wishing to expand FLSA

coverage, would have wanted the DOL to eliminate cov-

erage for employees of third party employers who had

previously been covered.

(2) Consistency with other regulations and

through time

Section 552.109(a) is also jarringly inconsistent with

other regulations the DOL itself promulgated under the

FLSA immediately following the 1974 amendments. In

29 C.F.R. § 552.3, the DOL defined the term “domestic

service employment” to refer “to services of a household

nature performed by an employee in or about a private

home (permanent or temporary) of the person by whom

he or she is employed.” 29 C.F.R. § 552.3 (emphasis

added). Unlike § 552.109(a), this regulation was leg-

islative, issued pursuant to§ 213(a)(15) and, thus, enti-

tled to Chevron deference. See 29 C.F.R. § 552.2(c)

(“[t]he definitions required by [213(a)(15)] are contained

in [ ]§ 552.3”). Plainly, under § 552.3, employees

employed by third parties do not qualify for the exemp-

tion. Indeed, § 552.3 tracks the relevant legislative his-

tory that the DOL would have reasonably taken as its

guidance. See H.R. Rep. No. 93-913, at 35 (“the gener-

ally accepted meaning of domestic service relates to ser-

vices of a household nature performed by an employee in

or about a private home of the person by whom he or she

is employed” (emphasis added)). Thus, the stark internal

—— nn ae

28a

inconsistency between § 552.109(a) and § 552.3, when

coupled with the latter's entitlement to greater deference

and its greater consistency with congressional purpose,

strongly counsels against enforcement of § 552.109(a).

Moreover, the agency’s position with regard to FLSA

coverage through time has hardly been a model of con-

sistency. We have recounted above how, in 1974, the

agency proposed a regulation that would have afforded

FLSA coverage to employees of third party employers

only to reverse itself with the promulgation of § 552.109(a).

In 2001, the DOL again proposed that employees of third

party employers get FLSA coverage (contrary to the

view it endorses in this litigation), only to withdraw the

proposal shortly thereafter based on economic consid-

erations that have no bearing on the more relevant ques-

tion of what Congress intended in 1974.

(3) Validity of the DOL’s reasoning

Finally, the DOL’s inadequate reasoning in support

of the regulation is matched by its failure to exhibit

thoroughness in its consideration. Two omissions are

particularly notable. First, the DOL offered virtually

no explanation for the direct inconsistency between

§ 552.109(a) and § 552.3. Second, the DOL has not ade-

quately explained—either in the Federal Register or in

its submissions to this court —what accounted for the

about-face after putting the regulations out for notice

and comment in 1974, resulting in third party employers,

for the first time, being entitled to claim the exemption.

Compare 39 Fed. Reg. 35,385 (proposing a regulation on

October 1, 1974 that retained the FLSA coverage of

employees of third party employers), with 40 Fed. Reg.

7405 (adopting a regulation on Feb. 20, 1975 allowing

such employees to be subject to the exemption). While

the Federal Register recited that “[o]n further consid-

we rye.

29a

eration, [the Secretary of Labor] ha[s] concluded that the

[‘companionship services’ ] exemption can be available

to such third party employers since they apply to ‘any

employee’ engaged ‘in’ the enumerated services,” 40

Fed. Reg. 7404, the DOL ignored the plain language of

the statute, which precluded an interpretation that the

exemption could apply to “any” employee; on its face, it

may apply only to employees in “domestic service

employment.” 29 U.S.C.§ 213(a)(15); see also 29 C.F.R.

§ 552.3 (defining “domestic service employment” to pre-

clude employees of third party employers).

The agency’s reasoning has not improved with time.

Acknowledging the internal contradiction between

§ 552.109(a) and § 552.3 in its brief, the DOL today is

reduced to asserting that we should uphold the regula-

tion because other courts have done so. This is hardly an

argument. As we have explained, the decisions relied

upon by the DOL were all prior to the Supreme Court’s

Mead decision, based on which we hold that Chevron

deference is inapplicable to § 552.109(a). Thus, no other

court has considered § 552.109(a) under the proper Skid-

more level of deference and carefully analyzed the reg-

ulation’s “power to persuade” in accordance with the

factors appropriate to Skidmore’s inquiry.

Accordingly, finding that § 552.109(a) cannot survive

Skidmore analysis, we decline to enforce it. We hereby

VACATE the judgment of the district court upholding it,

and REMAND the case for further consideration consis-

tent with this opinion.

30a

CONCLUSION

For all the foregoing reasons, we AFFIRM the district

court’s ruling that 29 C.F.R. § 552.6 is enforceable on its

face; VACATE the district court’s ruling that 29 C.F.R.

§ 552.109(a) is enforceable; and REMAND the case for

further proceedings.

3la

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

At a stated term of the United States Court of Appeals

for the Second Circuit, held at the Thurgood Marshal

United States Courthouse, Foley Square, in the City of

New York, or the 10th day of January two thousand five.

COKE

—- VV

LONG ISLAND CARE

Filed January 10, 2005

03-7666-cv

A petition for panel rehearing and a petition for

rehearing en banc having been filed herein by the defen-

dants-appellees Long Island Care, et al.

Upon consideration by the panel that decided the

appeal, it is Ordered that said petition for rehearing is

DENIED.

It is further noted that the petition for rehearing en

banc has been transmitted to the judges for the court in

32a

regular active service and to any other judge that heard

the appeal and that no such judge has requested that a

vote be taken thereon.

For the Court,

Roseann B. MacKechnie, Clerk

By: [ILLEGIBLE]

Motion Staff Attorney

33a

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

COKE

—-V.—

LONG ISLAND CARE AT HOME, LTD.

MOTION INFORMATION STATEMENT

Docket Number(s): 03-7666

Motion for: Stay of the Mandate

Set forth below precise, complete statement of relief

sought:

Stay of the mandate for 90 days pending application

to the Supreme Court for certiorari review.

MOVING PARTY: Long Island Care at Home Ltd., &

Maryann Osborne

C) Plaintiff XX) Defendant

C) Appellant/Petitioner {X) Appellee/Respondent

MOVING ATTORNEY: Daniel S. Alter, Esq.

iname of attorney, with firm, address, phone number

and e-mail]

c/o Alter & Alter

300 East 42nd Street, 10th Floor

New York, New York 10017

(212) 867-7777

danny.alter@ verizon.net

34a

OPPOSING PARTY: Evelyn Coke

OPPOSING ATTORNEY [Name]: Harold Craig Becker, Esq.

[name of attorney, with firm, address, phone number

and e-mail]

(iead counsel)

Services Employees International Union

25 East Washington, Suite 1400

Chicago, IL 60602

Court-Judge/Agency appealed from: Hon. Thomas A. Platt,

Eastern District of New York

Please check appropriate boxes:

Has consent of opposing counsel:

A. been sought? CJ Yes XX} No

B. been obtained? OC Yes x] No

Is oral argument requested? CO Yes [x] No

(requests for oral argument will not necessarily be

granted)

Has argument date of appeal

been set? C) Yes C) No

If yes, enter date N/A

FOR EMERGENCY MOTIONS, MOTIONS FOR

STAYS AND INJUNCTIONS PENDING APPEAL:

Has request for relief been

made below? C Yes C) No

N/A

Has this relief been previously

sought in this Court? Cj Yes XX) No

—

a at

35a

Requested return date and explanation of emergency:

Signature of Moving Attorney:

DANIEL S. ALTER Date: January 17, 2005

Has service been effected? CJ Yes [CJ No

ORDER

Before:

Hon. John M. Walker, Jr., Chief Judge,

Hon. Robert A. Katzmann, Circuit Judges,

Hon. John Gleeson, District Judge*

IT Is HEREBY ORDERED that the motion by appellee to

stay mandate pending application to the Supreme Court

for certiorari review is GRANTED.

March 22, 2005

Date

FOR THE COURT:

ROSEANN B. MACKECHNIE, Clerk

TRACY W. YOUNG

Tracy W. Young

Motions Staff Attorney

* The Honorable John Gleeson of the United States District

Court for the Eastern District of New York, sitting by designation.

36a

Appendix B

UNITED STATES DISTRICT COURT

E.D. New York

No. 02-CV-2010(TCP)(ARL)

May 23, 2003

EVELYN COKE, individually and on behalf of

others similarly situated,

Plaintiff,

LONG ISLAND CARE AT HOME, LTD.

and Maryann Osborne,

Defendants.

Leon Greenberg, New York City, for Evelyn Coke,

individually and on behalf of others similarly situated,

Plaintiff.

Arnold S. Klein, Meltzer, Lippe & Goldstein, LLP,

Mineola, NY, for Long Island Care at Home, Ltd.,

Maryann Osborne, Defendants.

MEMORANDUM AND ORDER

Platt, District Judge.

Defendants Long Island Care At Home, Ltd. (“LIC”)

and Maryann Osborne (“Osborne”)(collectively “Defen-

dants”) move for judgment on the pleadings pursuant to

Rule 12(c) of the Federal Rules of Civil Procedure.

37a

Plaintiff Evelyn Coke (“Coke” or “Plaintiff”) opposes

the motion and also moves for the circulation of a Notice

of Pendency and a Consent to Joinder to similarly situ-

ated persons pursuant to 29 U.S.C. § 216(b). This Court

heard oral arguments on April 2, 2003.

At issue is whether certain regulations promulgated by

the Department of Labor (“DOL”) pursuant to the Fed-

eral Fair Labor Standards Act, 29 U.S.C. § 201 et. seq.

(the “FLSA” ) are legally enforceable. At oral argument

Plaintiff’s counsel clarified that Plaintiff could not meet

the requirements of the relevant regulations as written

and that the purpose of this action was to determine the

validity of such regulations.' (Tr. at 2-5.) As se« forth

below, because the Court finds that the DOL’s regula-

tions are proper Defendants’ Motion is GRANTED.

‘BACKGROUND

A. Factual Background

Plaintiff is a resident of the State of New York,

County of Queens, and a former employee of Defen-

dants. LIC is a corporation formed pursuant to the laws

of New York State. Osborne is the owner and sole share-

holder, as well as a director and officer of LIC.

The pleadings provide little factual background.’

According to the Complaint, Plaintiff has been employed

by Defendant since 1997 and that “her occupations

include, but are not limited to, work as a home health-

| References to the transcript of the April 2, 2003 are cited as

pe gee

While the Plaintiff has provided more details of her employ-

ment in an affidavit, the Court may not consider such statements

when deciding a Rule 12(c) motion.

38a

care attendant.” (Compl. at 10.) Plaintiff contends that

despite working more than 40 hours a week she never

received overtime payments and that her hourly wage

was less the minimum wage outlined in the FLSA.

B. Plaintiff’s Claims :

Plaintiff has asserted two claims in her Complaint.

The First Claim is brought under the FLSA on behalf of

Plaintiff and any other persons who consent in writing to

join this action pursuant to 29 U.S.C. § 216(b). Plaintiff

contends that she was entitled to, but was not paid, min-

imum wages and an overtime hourly wage of time and

one-half for all hours worked in excess of forty hours

per week. Plaintiff's Second Claim is brought under the

Labor Law of the State of New York and the New York

Minimum Wage Act (“NYMWA”), on behalf of Plaintiff

and all persons similarly situated. The nature of the

claims are identical to those under the First Claim. As

relief, Plaintiff requests a judgement for unpaid overtime

wages and minimum wages, liquidated damages, attor-

ney’s fees, interest and costs as provided for by the

FLSA.

Defendant has asserted nine affirmative defenses,

including that, workers such as Plaintiff are exempt from

eligibility for minimum wage and overtime compensa-

tion under the FLSA and the FLSA’s implementing reg-

ulations.

- At oral argument, the Court inquired of Plaintiff's

counsel whether he could amend the Complaint to suf-

ficiently allege a cause of action under the FLSA and the

regulations promulgated thereunder. Counsel indicated

that he could not. (Tr. at 2-5.)

39a

DISCUSSION

A. Rule 12(c) Standard

Rule 12(c) provides that,

[after the pleadings are closed but within such time

as not to delay the trial, any party may move for

judgment on the pleadings. If, on a motion for

judgment on the pleadings, matters outside the

pleadings are presented to and not excluded by the

court, the motion shall be treated as one for sum-

mary judgment and disposed of as provided by Rule

56, and all parties shall be given reasonable oppor-

tunity to present all material made pertinent to such

a motion by Rule 56.

Judgement on the pleadings, pursuant to Fed.R.Civ.P.

12(c) is appropriate where material facts are undisputed

and a judgment on the merits is possible merely by con-

sidering the contents of the pleadings. See Mennella v.

Office of Court Admin., 938 F.Supp. 128, 131

(E.D.N.Y.1996) (Spatt, J.) (citing Sellers v. M.C. Floor

Crafters, Inc., 842 F.2d 639, 642 (2d Cir.1988)). “In

considering a motion for a judgment on the pleadings,

the Court must accept as true all of the non-movant’s

well pleaded factual allegations, and draw all reasonable

inferences in favor of the non-movant.” /d. (citing

Davidson v. Flynn, 32 F.3d 27, 29 (2d Cir.1994)).

B. The FLSA Generally

The FLSA of 1938 was enacted for the purpose of reg-

ulating minimum wages, maximum working hours, and

child labor in industries within interstate commerce.

While the FLSA sought to protect some of the nation’s

40a

lowest paid workers, it did not apply to-alf employees.

Since 1938, Congress has extended the FLSA’s coverage

to many other low-paying occupations through periodic

amendments.

Among these extensions of coverage were the amend-

ments of 1974, in which Congress extended coverage to

employees in “domestic service.” Through the 1974

amendments Congress intended to “not only raise the

wages of these workers but [to] improve the sorry image

of household employment.” H.R.Rep. No. 913, 93rd

Cong., 2nd Sess., reprinted in, 1974 U.S.Code Cong. &

Admin. News 2811, 28-43. The 1974 amendments made

domestic service employees subject to the minimum

wage and maximum working hours requirements of the

FLSA.

The 1974 amendments Congress do provide for a lim-

ited exemption from the FLSA for certain domestic ser-

vice employees, as set forth in 29 U.S.C. § 213(a)(15)

(“Section 213(a)(15)”). Section 213(a)(15) provides, in

pertinent part, that the provisions minimum wage and

maximum hour requirements of Sections 206 and 207 of

the FLSA shall not apply to,

(15) any employee employed on a casual basis in

domestic service employment to provide babysitting

services or any employee employed in domestic ser-

vice employment to provide companionship services

for individuals who (because of age or infirmity) are

unable to care for themselves (as such terms are

defined and delimited in the regulations of the

Secretary). (emphasis added).

Pursuant to this Congressional delegation of authority,

the DOL promulgated 29 C.F.R. §552.6 (“Section

552.6”) which defines “companionship services.” It

states, in pertinent part,

4la

the term companionship services shall mean those

services which provide fellowship, care and pro-

tection for a person who, because of advanced age

or physical or mental infirmity, cannot care for his

or her own needs. Such services may include house-

hold work related to the care of the aged or infirm

person such as meal preparation, bed making, wash-

ing of clothes, and other similar services. They may

also include the performance of general housework:

Provided however, that such work is incidental, i.e.,

does not exceed 20 percent of the total weekly hours

worked.

In discussing the policy reasons for the “companion-

ship services” exemption the Ninth Circuit has stated,

“[w]le are informed that these critical services reach

more elderly or infirm individuals than they otherwise

would precisely because the care-providers are exempt

from the FLSA”. McCune v. Oregon Senior Services

Division, 894 F.2d 1107, 1110 (1990).

“Domestic service” itself is not defined in the FLSA.

However, the legislative history of the 1974 amendments

State,

the generally accepted meaning of domestic service

relates to services of a household nature performed

by an employee in or about a private home of the

person by whom he or she is employed. The domes-

tic service must be performed in a private home

which is a fixed place of abode of the individual or

family . . . [g]enerally, domestic service in and

about a private home includes services performed

by persons employed as cooks, butlers, valets,

maids, housekeepers, governesses, janitors, laun-

dresses, caretakers, handymen, gardeners, footmen,

grooms, and chauffeurs of automobiles for family

42a

use. H.R.Rep. No.93-913, 93rd Cong., 2d Sess.,

reprinted in (1974) U.S.Code Cong. & Ad.News

2811, 2845.

The legislative history also “reveals that Congress

used the term ‘domestic service employment’ inter-

changeably with the terms ‘domestic service in house-

holds,’ ‘private household workers,’ and ‘household

employment.’ ” Lott v. Rigby, 746 F.Supp. 1084, 1088

(N.D.Ga.1990) (citing H.R.Rep. No. 913, 93rd Cong.,

2nd Sess., reprinted in, 1974 U.S.Code Cong. & Admin.

News 2811, 2842-2843).

The DOL has incorporated the legislative history into

29 C.F.R. § 552.3 (“Section 552.3”) which states that

domestic service “refers to services of a household

nature performed by an employee in or about a private

home (permanent or temporary) of the person by whom

he or she is employed.” 29 C.F.R. § 552.3. Importantly

however, through 29 C.F.R. § 552.109(a) (“Section

552.109(a)”) the DOL extends the exemption to

“Ce]mployees who are engaged in providing compan-

ionship services, as defined by § 552.6, and who are

employed by an employer or agency other than the fam-

ily or household using their services.” 29 C.F.R.

§ 552.109(a) (emphasis added.)

C. Validity of Sections 552.6 and 552.109(a)

Plaintiff argues that both of these regulations are

inconsistent with Congress’s intent of extending cover-

age of the FLSA to domestic service employees. Specif-

ically, Plaintiff argues that the definition of

“companionship services” in Section 552.6 is overbroad

and that Section 552.109(a) improperly extends the

43a

exemption to employees who are employed by an

agency.°

In regards to Section 552.109(a), Plaintiff asserts that

prior to the 1974 amendments home healthcare employ-

ees employed by certain agencies would have been cov-

ered by “enterprise coverage” as set forth in 29 U.S.C.

§§ 203(r), 203(s), 206(a), 207(a), which extends FLSA

coverage to all employees of businesses that exceed a

certain gross revenue. Plaintiff cites Homemakers Home

and Health Care v. Carden, 538 F.2d 98 (6th Cir.1976)

to support-her position. In that case the Sixth Circuit

upheld a stipulated finding of fact that the plaintiff, who

was a home health care services company, was subject to

FLSA enterprise coverage. Plaintiff reasons that in

enacting the 1974 amendments Congress intended to

extend coverage to domestic services employees, and not

to remove coverage already provided to employees

employed by FLSA “enterprises.” (Pl. Suppl. Mem. at

8.)

Nearly all courts, however, have upheld both of these

regulations. See e.g., McCune v. Oregon Senior Services

Division, 894 F.2d 1107 (1990) (upholding Section

552.6); Salyer v. Ohio Bureau of Workers’ Compensa-

tion, 83 F.3d 784 (6th Cir.1996) (same); Johnston v. Vol-

unteers of America, Inc., 213 F.3d 559 (10th Ciz.2000)

(upholding Section 552.109). One recent district court

3 Subsequent to oral argument, the Court invited the parties to

submit additional materials related to the legislative history of the

1974 amendments. Plaintiff’s supplemental materials, in part, raised

for the first time the issue of whether 552.109 was procedurally

invalid due to an alleged failure to comply with the Administrative

Procedures Act, 5 U.S.C. § 553. Because this argument was not raised

until several weeks after oral argument, does not appear in the Com-

plaint or Plaintiff's initial brief, and was outside the scope of the

Court’s invitation, this argument was not considered by the Court.

44a

decision is to the contrary. See Harris v. Dorothy L. Sims

Registry, 2001 WL 78448, 2001 U.S. Dist. LEXIS 23263

(N.D.I11.2001). The Second Circuit has never expressly

ruled on these issues.

The Supreme Court has “long recognized that con-

siderable weight should be accorded to an executive

department’s construction of a statutory scheme it is

entrusted to administer, and the principle of deference to

administrative interpretations” has consistently been

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

Defense Council Inc., 467 U.S. 837, 844, 104 S.Ct.

2778, 81 L.Ed.2d 694 (1984). If there is “statutory ambi-

guity and the agency’s interpretation is reasonable, its

interpretation must receive deference.” Yellow Transp.,

Inc. v. Michigan, 537 U.S. 36, 123 S.Ct. 371, 378, 154

L.Ed.2d 377 (2002) (citing Chevron, 467 U.S. at 844,

104 S.Ct. 2778). “[Llegislative regulations are given

controlling weight unless they are arbitrary, capricious,

or manifestly contrary to the statute.” Jd.

In deciding whether a regulation is reasonable, the

Supreme Court has stated,

[w]e ask first whether ‘the intent of Congress is

clear’ as to ‘the pr ‘ecise question at issue.” If, by

‘employing traditioaal tools of statutory construc-

tion,’ we determine that Congress’ intent is clear,

‘that is the end of the matter.’ But ‘if the statute is

silent or ambiguous with respect to the specific

issue, the question for the court is whether the

agency’s answer is based on a permissible con-

struction of the statute.’ If the agency’s reading fills

a gap or defines a term in a reasonable way in light

of the Legislature’s design, we give that reading

controlling weight, even if it is not the answer ‘the

court would have reached if the question initially

had arisen in a judicial proceeding.’ Regions Hos-

45a

pital v. Shalala, 522 U.S. 448, 457, 118 S.Ct. 909,

139 L.Ed.2d 895 (1998) (citing Chevron U.S.A. Inc.

v. Natural Resources Defense Counci!. Inc., 467

U.S. 837, 842-843, 104 S.Ct. 2778, 81 L.Ed.2d 694

(1984)).

Moreover, “a long-standing, contemporaneous con-

struction of a statute by the administering agencies is

‘entitled to great weight.’ ” Leary v. nited States, 395

U.S. 6, 25, 89 S.Ct. 1532, 23 L.Ed.2c 57 (1969) (cita-

tions omitted). Where an agency changes its interpreta-

tion, “a revised interpretation deserves deference

because ‘an initial agency interpretation is not instantly

carved in stone’ and ‘the agency, to engage in informed

rulemaking, must consider varying interpretations and

the wisdom of its policy on a continuing basis.’ ” Rust v.

Sullivan, 500 U.S. 173, 186, 111 S.Ct. 1759, 114

L.Ed.2d 233 (1991) (citing Chevron, 467 U.S. at 862-

864, 104 S.Ct. 2778).

Both Sections 552.6 and 552.109(a) were promulgated

in 1975, soon after the 1974 amendments and have been

in effect for over twenty-eight years and are therefore

entitled to great weight. The DOL did propose amend-

ments to both regulations in January 2001, but those pro-

4 In addition, the Supreme Court has held that “[w]hen

Congress revisits a statute giving rise to a longstanding administra-

tive interpretation without pertinent change, the ‘congressional fail-

ure to revise or repeal the agency's interpretation is persuasive -

evidence that the interpretation is the one intended by Congress.’ ”

CFTC v. Schor, 478 U.S. 833, 846, 106 S.Ct. 3245, 92 L.Ed.2d 675

(1986) (quoting NLRB v. Bell Aerospace Co., 416 U.S. 267, 274-75,

94 S.Ct. 1757, 40 L.Ed.2d 134 (1974)). Here Congress has amended

Section 213 seven times since 1974. See Pub.L. 95-151 (1977);

Pub.L. 96-70 (1979); Pub.L. 101-157 (1989); Pub.L. 103-329 (1994);

Pub.L. 104-88 (1995); Pub.L. 104-188 (1996); Pub.L. 105-78 (1997).

46a

posed amendments were withdrawn in 2691. In propos-

ing to amend Section 552.6, the DOL stated,

[t]he Department has reevaluated the regulations

and determined that—as currently written—they

exempt types of employees far beyonce those whom

Congress intended to exempt when it enacted sec-

tion 13(a)(15). Therefore, the Department proposes

to amend the regulations to revise the definition of

‘companionship services,’ which sets out the duties

that a companion must be employed to perform in

order to qualify for the exemption, to more closely

mirror Congressional intent. Federal Register, Vol.

66, No. 13 (January 19, 2001).

The DOL’s proposals emphasized that the proposed

amendments were proper due to the significant changes

in the home care industry since 1974 and that home care

employees are “performing types of duties and working

in situations that were not envisioned when the com-

panionship services regulations were promulgated.” Jd.

After reviewing the legislative history, the DOL stated

that the 1974 amendments were intended “to include all

employees whose vocation was domestic service, but to

exempt from the coverage babysitters and companions

who were not regular bread winners or responsible for

their families’ support.” /d.

In proposing to amend Section 552.6, the DOL stated

that, “companionship services cannot be so broad as to

include someone who essentially is serving as a maid or

household worker.” Jd. The DOL then proposed three

possible changes of the definition of “companionship

services.” All three of the proposals increased the

emphasis on fellowship as a “critical component of a

companion’s duties.” Jd.

47a

In proposing to alter Section 552.109(a), the DOL

intended to make the exemptions of Section 213(a)(15)

applicable “only with respect to the family or household

using the worker’s services.” Jd. Under the proposal, if

an employee was hired by someone other than a member

of the family in whose home he or she works, the

employee would be covered by FLSA. 7d. In this pro-

posed amendment, the DOL noted that there was an

internal consistency between Section 552.109(a), which

allows employees of agencies to be exempt, and Section

552.3, fashioned from the legislative history, which

states that domestic service employment must b¢ “in or

about” the private home of the employer. Jd. Moreover,

evidently in reference to “enterprise coverage”, the DOL

stated that since “[aJnyone who prior to 1974 had

worked for a covered placement agency, for example,

but who was assigned to work in someone’s home,

would have been covered previously by the FLSA,” it

was unlikely that Congress would have sought to change

the status of employees who were already covered. /d.

In April 2002, the DOL withdrew the proposed

amendments because “numerous commenters on the pro-

posed rule, including multiple federal agencies . . . seri-

ously called into question the Department’s conclusion

that there would be little economic impact.” Federal

ing the “rulemaking record as a whole,” the DOL ter-

minated the proposal. /d.

After the proposed amendments were issued, but

before they were withdrawn, one district court did find

that the definition of “companionship services” set forth

in Section 552.6 was unreasonably broad. In Harris v.

Dorothy L. Sims Registry, 2001 WL 78448, 2001 U.S.

Dist. LEXIS 23263 (N.D.II1.2001), the court found that

although an agency’s interpretation of a statute is pre-

48a

sumptively valid, “courts may not follow agency regu-

lations that are inconsistent with congressional intent.”

Id., 2001 WL 78448, *2, 2001 U.S. Dist. LEXIS 23263

at *8 (citing Chevron, 467 U.S. at 845, 104 S.Ct. 2778).

In coming to its conclusion, the court relied heavily on

the proposed amendments.

Applying the standard set forth in Chevron U.S.A.,

Inc. v. Natural Resources Defense Council Inc., 467 U.S.

837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), the Harris

court first found that Section 213(a)(15) of the FLSA

was ambiguous, since there was more than one reason-

able interpretation of “companionship services.” The

plaintiffs in Harris argued that the term “referred to

employees hired primarily to act as a companion for the

elderly.” Harris, 2001 WL 78448, *3, 2001 U.S. Dist.

LEXIS 23263 at *9-*10. Defendants contended that the

term meant “being with someone to help them with their

extreme needs.” /d.

After finding Section 213(a)(15) ambiguous, the Har-

ris court then considered whether Section 552.6 was

consistent with the language, origins and purpose of the

statute. In this stage of the analysis, the court first con-

sidered the legislative history, from which it found, “[iJt

is clear the senators did not intend to exempt employees

whose primary job responsibilities went beyond fel-

lowship and protection.” /d., 2001 WL 78448, *4, 2001

U.S. Dist. LEXIS 23263 at *12. After a review of the

DOL’s proposed amendments the court found “it is obvi-

ous from the proposed amendments that the DOL agrees

that the current definition of ‘companionship services’

under § 552.6 is unreasonable” and that this “alone is

sufficient reason to disregard the current version of

§ 552.6.” Id., 2001 WL 78448, *5, 2001 U.S. Dist.

LEXIS 23263, at *17. Based on the legislative history

and the proposed amendments, the court in Harris held

49a

that Section 552.6 was invalid, “to the extent it exempts

homemakers from [FLSA] coverage.”° /d.

Prior to Harris, all other courts had upheld the valid-

ity of the regulations. In McCune v. Oregon Senior Ser-

vices Division, 894 F.2d 1107 (1990) the Ninth Circuit

held that the DOL’s definition of “companionship ser-

vices” in Section 552.6 was not contrary to the FLSA

and affirmed the district court’s granting of summary

judgment in favor of defendants.

The plaintiffs in McCune were live-in attendants for

elderly and infirm individuals unable to care for them-

selves. The Ninth Circuit, noting the strong deference

which is accorded to agencies entrusted to define a spe-

cific provision of a statute, held that the 20% limit on

general household work was reasonable and upheld the

district’s courts finding that any household work

“related” to the care of the individual would not be

counted towards the 20% threshold. In coming to this

conclusion, the court quoted parts of the legislative his-

tory of the FLSA, which stated:

The fact that a person performing casual services as

baby-sitters or services as companions do some

incident of household work does not keep them

from begin casual baby-sitters or companions for

purposes of this exclusion.

McCune, 894 F.2d 1107, 1111 (quoting H.R.Rep. No.

913, 1974 U.S.Code Cong. and Ad. News at 2845).

5 In Harris, although the finding that § 552.6 was invalid

mooted the argument that domestic employees hired by agenc‘<s

should not be exempt, the court did note that Section 552.109(4) was

also proposed to be amended for similar reasons Section 552.6 was

proposed to be amended. /d., 2001 WL 78448, *5, n. 8, 2001 U.S.

Dist. LEXIS 23263, at *17, n. 8.

50a

In dissent in McCune, Judge Pregerson did “not pro-

pose challenging the agency’s interpretation of its man-

date when it promulgated section 552.6,” but argued that

the majority had improperly applied the regulation to the

plaintiffs in that case. McCune, 894 F.2d at 1114. Judge

Pregerson felt that the court should analyze whether the

work performed by plaintiffs was actually “incidental”

or whether it was only related to the care of their clients.

As Judge Pregerson stated, “[t]hough simple laundry

work might be ‘incidental’, what of bed-pan duty,

catheterization, and soiled garments for bed-ridden

invalids? These duties are certainly related to the care of

the attendant’s clients, but are by no means incidental.”

Id. ,

Courts have similarly upheld Section 552.109(a). Most

_recently, in Johnston v. Volunteers of America, Inc., 213

F.3d 559 (10th Cir.2000), the Tenth Circuit rejected

plaintiffs’ claims that they were entitled to overtime pay

under the FLSA because they were not employed by the

individual receiving the care. Finding that Section

552.109(a) was not “arbitrary, capricious, or manifestly

contrary to § 213(a)(15)”, the Court held that “the fact

that domestic service employees are not employed by the

individual receiving care, does not alone exclude them

from the exemption.” Jd. at 562. In refuting a similar

claim, another court has stated, “[p]laintiff has identified

no authority, and the Court is unable to locate any, that

supports this view of the companionship services exemp-

tion. In fact, the Court is not aware of any cases where

the subject employees were employed by the individual

client, rather than by an agency.” Terwilliger v. Home of

Hope, Inc., 21 F.Supp.2d 1294, 1299, n. 2 (N.D.Ok.1998).

In regard to Plaintiff’s argument that Congress did not

intend to remove “enterprise coverage” to those employ-

ees who worked for covered agencies, the wording of the

Sla

Section 213(a)(15) and the statements of the Adminis-

trator of the Wage and Hour Division of the DOL (the

“Administrator”) support the conclusions of the John-

ston and Terwilliger courts that Section 552.109(a) is

valid. Section 213(a)(15), describes who is covered by

the companionship exemption as “any employee

employed on a casual basis in domestic service employ-

ment.” (emphasis added.) The Administrator, in adopt-

ing 552.109(a) explicitly noted this language and stated

“[(t]his interpretation is more consistent with the statu-

tory language and prior practices concerning other sim-

ilarly worded exemptions”. 40 Fed.Reg. 7404 (1975). It

may be that Congress did not intend to exempt employ-

ees hired by a third-party. However, based on the word-

ing of the statute and the lack of any clear legislative

history discussing this specific issue, this Court may not

say that the Administrator’s interpretation is arbitrary or

unreasonable.

This Court does find the reasoning of Harris and the

DOL’s statements in the proposed amendments some-

what compelling. However, other factors counsel against

holding the regulations unenforceable. The strong def-

erence courts must afford to federal agencies regulations,

the explicit grant of authority to the DOL to define and

delimit Section 213(a)(15), the withdrawal of the pro-

posed amendments, and the fact that these regulations

have been in effect for over twenty-eight years, strongly

cautions against a finding that these regulations are

unenforceable.

Section 213(a)(15) of the FLSA explicitly gives the

DOL the right to define the terms “companionship ser-

vices” and “domestic service.” The 20% requirement

seemingly attempts to keep the exemption limited to

those who predominately provide companionship, which

is consistent with the legislative history. In regards to

52a

Section 552.109(a), the Court notes that the reasoning

behind the companionship services exemption is

arguably to allow those in need of such services to be

able to find such assistance at a price they can afford.

Whether that service is provided by the direct hiring of

an employee or through the use of an agency, the objec-

tive is still the same; to allow for the procurement of

companionship services without being required to meet

the minimum wage and overtime provisions of the

FLSA.

The DOL’s interpreta*ion- of Section 213(a)(15) in

1975 evidence that it believed the regulations were

proper at the time the 1974 amendments were enacted.

The DOL’s withdrawal of the proposed amendments

shows that it still believes that these long-standing reg-

ulations are appropriate in the current home healthcare

environment. Despite amending Section 213(a)(15)

seven times since 1074, Congress has chosen not to act.

While this Court is sympathetic to home care workers

who perform such laborious work under difficult cir-

cumstances, the judiciary is not in a pos.t:on to strike a

regulation which is reasonable in light of the DOL’s

explicit Congressional mandate. Accordingly, the Court

finds that Sections 552.6 and 552.109(a) are not arbi-

trary, capricious or manifestly contrary to the FLSA.

D. The Sufficiency of the Complaint

1. The FLSA Claim

Having found the regulations proper, Plaintiff must

properly allege a claim under them. The Court is aware

that all of the cases cited above were in the context of

motions for summary judgement, not motions on the

pleadings pursuant to Rule 12(c). Nonetheless, the Com-

plaint in its current form contains only conclusory alle-

53a

gations that Plaintiff was a home healthcare attendant

and that she is therefore entitled to minimum wage and

overtime pursuant to FLSA. Plaintiff’s counsel clarified

at oral argument that his client could not properly allege

a claim under the FLSA based on the regulations as they

currently stand. Plaintiff's counsel's agreement at oral

argument that this was a test case and that his client

could not meet the standards of Section 552.6 confirm

that Plaintiff can not properly allege a violation of the

FLSA and the DOL’s regulations promulgated thereun-

der. Accordingly, Defendants’ motion on the FLSA

claim is granted.

2. State Law Claim

Courts have consistently held that the dismissal of a

plaintiff’s federal claims merits dismissal of his pendent

State law claims. Carnegie-Mellon Univ. v. Cohill, 484

U.S. 343, 350, 108 S.Ct. 614, 98 L.Ed.2d 720 (1988);

Maric v. St. Agnes Hosp. Corp., 65 F.3d 310, 314 (24———

Cir.1995) (citing United Mine Workers of America v.

Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 16 L.Ed.2d 218

(1966)); In re Merrill Lynch Ltd. P’ships Litig., 154 F.3d

56, 61 (2d Cir.1998). Having concluded that Defendants

are entitled to judgment on the pleadings as to Plaintiff’s

underlying federal claims, this Court declines to exercise

pendent jurisdiction over the corresponding State law

claims. Plaintiff’s State law claims are therefore dis-

missed without prejudice.

54a

CONCLUSION

Defendants’ Motion for judgement on the pleadings is

GRANTED. Plaintiff’s Motion for circulation of a Notice

of Pendency and of a Consent to Joinder to similarly

situated persons pursuant to 29 U.S.C. §216(b) is

DENIED. The Clerk of the Court is directed to close this

case.

SO ORDERED.

55a

Appendix C

IN THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

No. 03-7666

EVELYN COKE,

Plaintiff-Appellant,

—- Vo

LONG ISLAND CARE AT HOME, LTD.,

and

MARYANN OSBORNE,

Defendants-Appellees.

On Appeal from the United States District Court

for the Eastern District of New York

BRIEF FOR THE SECRETARY OF

LABOR AS AMICUS CURIAE

56a

INTEREST OF THE SECRETARY OF LABOR

Pursuant to Rule 29(a) of the Federal Rules of Appel-

late Procedure, the Secretary of Labor (“Secretary”) sub-

mits this brief as amicus curiae. The Secretary has a

strong policy interest in defending the Department of

Labor's regulations against judicial challenge. The plain-

tiff candidly referred to this action as a “test case,” con-

ceding that she cannot succeed under the regulations as

they currently stand. Her claim for back wages under the

Fair Labor Standards Act (“FLSA” or “Act”), 29 U.S.C.

201, et seq., is based on her argument that the relevant

regulations are inconsistent with congressional intent

and, therefore, are invalid. Given this posture, the Sec-

retary believes that this Court would derive great bene-

fit from a presentation of her views on this case.

STATEMENT OF THE ISSUE

This case involves a challenge to the validity of the

Department’s regulations at 29 C.F.R. 552.6 and

552.109(a). Section 552.6 defines “companionship ser-

vices,” which are exempt from FLSA minimum wage

and overtime coverage under 29 U.S.C. 213(a)(15), to

include related and general, incidental housework. Sec-

tion 552.109(a) extends this exemption to employees

who are employed by an employer or agency other than

the family or household using the employees’ compan-

ionship services. The issue on appeal is whether these

legislative rules interpreting the statutory exemption are

reasonable and therefore should be upheld.

tnd NY pa NIG BA Th RE SAR RR BS

mera”

ee aE ke Ls oak a

yng SEN PA

57a

STATEMENT OF THE CASE

A. Statement Of Facts

By decision dated May 23, 2003, the district court

granted the defendants’ motion for judgment on the

pleadings under Federal Rule of Civil Procedure 12(c),

and denied the plaintiff’s motion to certify a collective

action under 29 U.S.C. 216(b). Coke v. Long Island Care

At Home, LTD., 267 F. Supp.2d 332 (E.D.N.Y. 2003).

The court’s decision sets forth only a few rudimentary

facts. Maryann Osborne is the owner and sole share-

holder of Long Island Care at Home, Ltd. (“Long Island

Care”), an agency that provides home healthcare to pri-

vate individuals. Evelyn Coke (“Coke”) has been

employed by Long Island Care as a “home healthcare

attendant” since 1997. Coke contends that, despite work-

ing more than 40 hours a week, she received no overtime

payments and was paid less than the FLSA minimum

wage. Coke acknowledges, however, that she cannot

establish a claim under the FLSA if the Department’s

regulations that exempt workers who provide “com-

panionship services” are controlling. 267 F. Supp.2d at

_ 332. Thus, she brings this action as a “test case” in order

to challenge the validity of these regulations. /d. at 341.

B. Statutory And Regulatory Framework

At the time that Congress amended the FLSA in 1974

expressly to extend coverage to employees in “domestic

service,” it excluded from coverage “any employee

employed in domestic service employment to provide

companionship services for individuals who (because of

age or infirmity) are unable to care for themselves (as

such terms are defined and delimited by regulations of

58a

the Secretary).” 29 U.S.C. 213(a)(15) (emphasis added).

See generally 29 C.F.R. 552.2.

Under this explicit grant of authority, the Secretary of

Labor defined “companionship services,” in pertinent

part, as follows:

[T]he term companionship services shall mean those

services which provide fellowship, care, and pro-

tection for a person who, because of advanced age

or physical or mental infirmity, cannot care for his

or her own needs. Such services may include house-

hold work related to the care of the aged or infirm

person such as meal preparation, bed making, wash-

ing of clothes, and other similar services. They may

also include the performance of general household

work: Provided, however, That such work is inci-

dental, i.e., does not exceed 20 percent of the total

weekly hours worked.

29 C.F.R. 552.6. The Department’s Wage and Hour Divi-

sion has further clarified in an opinion letter that “such

activities as cleaning the patient’s bedroom, bathroom or

kitchen, picking up groceries, medicine, and dry clean-

ing would be related to personal care of the patient and

would be the type of household work that would be

exempt work for purpose of section 13(a)(15) of the

FLSA. However, activities involving heavy cleaning

such as cleaning refrigerators, ovens, trash or garbage

removal and cleaning the rest of a ‘trashy’ house would

be general household work or nonexempt work that is

subject to the 20 percent time limitation.” 1995 WL

1032475 (March 16, 1995) (emphases added).

The Secretary’s regulations also state that the term

“domestic service employment” as used in section

13(a)(15) “refers to services of a household nature per-

formed by an employee in or about a private home (per-

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manent or temporary) of the person by whom he or she

is employed.” 29 C.F.R. 552.3. However, the Secretary

extended the section 13(a)(15) exemption for employees

engaged in “companionship services” to those “who

are employed by an employer or agency other than

the family or household using their services.” 29 C.F.R.

552.109(a).

Both these regulations, 29 C.F.R. 552.6 and 552.109(a),

were promulgated pursuant to notice and comment rule-

making in 1975, soon after the enactment of the 1974

amendments to the FLSA, and thus have been in effect

for approximately 28 years.

C. The District Court’s Decision

The district court observed that this Court has never

expressly ruled on the validity of either of these two reg-

ulations, but that nearly all other courts faced with the

issue have upheld both. 267 F. Supp.2d at 336 (citing

Johnston v. Volunteers of America, Inc., 213 F.3d 559,

562 (10th Cir. 2000) (upholding section 552.109(a));

Salyer v. Ohio Bureau of Workers’ Compensation, 83

F.3d 784, 787 (6th Cir.) (upholding section 552.6), cert.

denied, 519 U.S. 964 (1996); McCune v. Oregon Senior

Services Division, 894 F.2d 1107, 1110-11 (9th Cir.

1990) (same)). The court noted that one district court

had recently reached a contrary result. /d. (citing Harris

v. Dorothy L. Sims Registry, 2001 WL 78448, at *5

(N.D. Ill. 2001) (invalidating the definition of “com-

panionship services” in section 552.6 “to the extent it

exempts homemakers from [FLSA] coverage”’).

The district court recognized that the Department's

longstanding interpretation of the FLSA, promulgated

pursuant to specific congressional authorization, is “enti-

tled to great weight” if reasonable. See Chevron U.S.A.

Inc. v. Natural Resources Defense Council, Inc., 467

60a

U.S. 837, 844 (1984). The court proceeded to discuss in

detail the Department's proposal to amend both regula- -

tions, which was published for comment in January

2001, because the court also recognized that an agency's

“ ‘revised interpretation deserves deference.’ ” 267 F.

Supp.2d at 337 (quoting Rust v. Sullivan, 500 U.S. 175,

186 (1991)).

The Department, pointing to the fact that some home

health care workers were performing duties and working

in situations not envisioned when the regulations were

promulgated, proposed three alternatives to the defini-

tion of “companionship services” in section 552.6, each

of which would increase the emphasis on fellowship (as

opposed to the kind of work performed by a maid or

household worker) as a “critical component of a com-

panion’s duties.” 66 Fed. Reg. 5481, 5488 (January 19,

2001). Each alternative would have eliminated the cur-

rent 20 percent tolerance for general household work.

The Department also proposed to amend section

552.109(a) in order to make the section 13(a)(15)

exemption applicable “only with respect to the family or

household using the worker’s services.” 66 Fed. Reg. at

5485. The court observed, however, that the Department

withdrew these proposed amendments in April 2002. 67

Fed. Reg. 16668 (April 8, 2002).

The court discounted the Harris decision because it

“relied heavily on the proposed amendments” in reach-

ing its conclusion that the definition of “companionship

services” is invalid. 267 F. Supp.2d at 338. As noted by

the district court, the court in Harris reached this con-

clusion after the proposed amendments were issued, but

before they were withdrawn. Although the court found

the reasoning of Harris and the Department’s statements

in the proposed amendments to be “somewhat com-

pelling,” it nonetheless concluded that other factors

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counseled against holding the unrevised regulations

unenforceable. 267 F. Supp.2d at 340. These included

“strong deference courts must afford to federal agencies

regulations, the explicit grant of authority to the DOL to

define and delimit Section 213(a)(15), the withdrawal of

the proposed amendments, and the fact that these regu-

lations have been in effect for over twenty-eight years.”

Td.

The court found the definition of “companionship ser-

vices” contained in section 552.6 to be reasonable and in

accordance with the statute because “[t]he 20% require-

ment seemingly attempts to keep the exemption limited

to those who predominately provide companionship,

which is consistent with the legislative history.” 267 F.

“Supp.2d at 340. The court upheld section 552.109(a)

because it promotes “the reasoning behind the compan-

ionship services exemption”—“to allow those in need of

such services to be able to find such assistance at a price

they can afford. Whether that service is provided by the

direct hiring of an employee or through the use of an

agency, the objective is still the same; to allow for the

procurement of companionship services without being

required to meet the minimum wage and overtime pro-

visions of the FLSA.” Jd.

The court specifically rejected the plaintiff’s argument

that Congress, when it extended coverage to domestic

service employees in 1974, did not intend to remove

coverage of home healthcare employees employed by

third parties, who, prior to 1974, would have been cov-

ered under the Act’s “enterprise coverage” provisions

when they worked for large agencies. In this regard, the

court was persuaded by the language of section 13(a)(15)

which exempts “any employee employed in domestic

service employment to provide companionship services”

(emphasis added), a point explicitly noted by the Admin-

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istrator in promulgating the regulation at section

552.109(a).! 267 F. Supp.2d at 340. The court stated, “It

may be that Congress did not intend to exempt employ-

ees hired by a third-party. However, based on the word-

ing of the statute and the lack of any clear legislative

history discussing the specific issue, this Court may not

say that the Administrator’s interpretation is arbitrary or

unreasonable.” /d.

In sum, the district court, referring to the fact that

Congress has done nothing to change the Department's

regulations despite amending the FLSA several times

since 1974, concluded that “[w]hile this Court is sym-

pathetic to home care workers who perform such labo-

rious work under difficult circumstances, the judiciary is

not in a position to strike a regulation which is reason-

able in lighi of the DOL’s explicit mandate.” 267 F.

Supp.2d at 341.

SUMMARY OF ARGUMENT

Because sections 552.6 and 552.109(a) were both pro-

mulgated in 1975 in response to an express delegation of

authority by Congress and are the products of notice and

comment rulemaking, they are entitled to Chevron def-

erence. Under Chevron, the Secretary’s regulations must

: Actually, the district court mistakenly quoted the language of

section 13(a)(15) that applies only to babysitting services, i.e., "any

employee employed on a casual basis in domestic service employ-

ment.” The Department’s regulations make clear that the Act's

“casual” limitation does not apply to companionship services. See

29 C.ER. 552.106. It is clear, however, that the district court was rely-

ing on the statutory language referring to “any employee employed

in domestic service employment to provide companionship services.”

29 U.S.C. 213(a)(15).

63a

be upheld if they represent reasonable, permissible inter-

pretations of the statute.

The section 552.6 definition of “companionship ser-

vices” is reasonable because it is consistent with leg-

islative history indicating that Congress did not intend

that even the performance of some general, incidental

household work would disqualify an employee from

being exempt under section 13(a)(15). The inclusion

within the “companionship services” exemption, under

section 552.109(a), of companionship workers who are

employed by third party employers also reflects a rea-

sonable interpretation of the statute. As noted by the

courts, section 552.109(a) is consistent with the policy

underlying the exemption of making companionship ser-

vices more financially affordable to the elderly and dis-

abled, who might otherwise be institutionalized.

These regulations are also “entitled to great weight”

because they were promulgated soon after the 1974

Statutory amendments to the FLSA were enacted and

thus have been in effect continuously for over 28 years.

Additionally, although the FLSA has been amended

numberous times since these regulations became effec-

tive, Congress has not taken any of these opportunities

to address or amend the Secretary's regulatory inter-

pretations of the “companionship services” exemption.

Congress’s inaction in this regard is persuasive evidence

that the Secretary’s interpretations are reasonable and

correct.

With one exception, all courts that have addressed the

validity of either of these regulations have upheld them.

The one exception, Harris, is easily discounted since the

court improperly relied upon proposed amendments to

the regulations that were subsequently withdrawn and,

consequently, had no controlling effect.

nae i,

64a

Finally, the Administrator recently issued an opinion

letter reaffirming the Department's position under sec-

tion 552.109(a) that employees of a third party employer

working as domestic service employees in private homes

_ may qualify for the section 13(a)(15) exemption. This

opinion letter, since it is consistent with the case law and

the policy underlying the “companionship service”

exe:nption, is also entitled to some deference.

ARGUMENT

THE DEPARTMENT’S LONGSTANDING :

REGULATIONS AT 29 C.F.R. 552.6 AND 552.109(a),

WHICH WERE PROMULGATED PURSUANT TO

SPECIFIC CONGRESSIONAL AUTHORIZATION

AND AFTER NOTICE AND COMMENT

RULEMAKING, SHOULD BE UPHELD BECAUSE

THEY REPRESENT A REASONABLE CONSTRUC-

TION OF THE FLSA’S SECTION 13(a)(15)

“COMPANIONSHIP SERVICES” EXEMPTION.

A. Both Section 552.6 And 552.109(a) Are Entitled To

Chevron Deference.

“When Congress has ‘explicitly left a gap for an

agency to fill, there is an express delegation of author-

ity to the agency to elucidate a specific provision of the

statute by regulation,’ and any ensuing regulation is

binding in the courts unless procedurally defective, arbi-

trary or capricious in substance, or manifestly contrary

to the statute.” United States v. Mead Corp., 533 U.S.

218, 227 (2001) (quoting Chevron, 467 U.S. at 843-44).

To accord an agency interpretation Chevron deference

means that “a reviewing court has no business rejecting

an agency’s exercise of its generally conferred authority

to resolve a particular statutory ambiguity simply because

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the agency’s chosen resolutions seems unwise, but is

obliged to accept the agency’s position if Congress has

not previously spoken to the point at issue and the

agency's interpretation is reasonable.” /d. at 229 (cita-

tions omitted).

Following Mead Corp., this Court has stated that an

agency interpretation “ ‘qualifies-for Chevron deference

when it appears that Congress delegated authority to the

agency generally to make rules carrying the force of law,

and that the agency interpretation claiming deference

was promulgated in the exercise of that authority.’ ”

Chao v. Russell P. Le Frois Builder, Inc., 291 F.3d 219,

226 (2nd Cir. 2002) (quoting Mead Corp. 533 U.S. at

226-27) (emphasis supplied by this Court). This Court

determines the appropriate level of deference owed

under Mead Corp. to the statutory interpretations of the

Secretary by considering “whether ‘the agency inter-

pretation claiming deference was promulgated in the

exercise of [the Secretary’s rule-making] authority.’ ” Jd.

at 227 (quoting Mead Corp., 533 U.S. at 227). If the

_ agency interpretation represents “ ‘the fruits of notice-

and-comment rulemaking or formal adjudication,’ ” this

Court will generally give it full Chevron deference. Id.

(quoting Mead Corp., 533 U.S. at 230). See also Madi-

son Vv. Resources for Human Development, Inc., 233 F.3d

175, 181 n.8 (3rd Cir. 2000) (“afford[ing] deference” to

the Secretary’s “companionship services” regulations at

29 C.F.R. 552.3 and 552.101 because they are the prod-

uct of “notice and commen

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