National Federation of Independent Business et al v. Perez et al

Brief/Memorandum in Support

N.D. Tex.August 22, 2016

IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS LUBBOCK DIVISION NATIONAL FEDERATION OF ) INDEPENDENT BUSINESS, a ) California non-profit mutual ) benefit corporation, ) ) TEXAS ASSOCIATION OF BUSINESS, ) a Texas non-profit organization, ) ) CIVIL ACTION NO. 5:16-cv-00066-C LUBBOCK CHAMBER OF ) COMMERCE, a Texas non-profit ) organization ) ) NATIONAL ASSOCIATION OF HOME ) BUILDERS, a Nevada non-profit ) corporation, and ) ) TEXAS ASSOCIATION OF BUILDERS, ) a Texas non-profit organization, ) ) Plaintiffs ) ) and ) ) STATE OF TEXAS ) STATE OF ARKANSAS ) STATE OF ALABAMA ) STATE OF INDIANA ) Attorney General Bill Schuette on ) behalf of the PEOPLE OF MICHIGAN ) STATE OF OKLAHOMA ) STATE OF SOUTH CAROLINA ) STATE OF UTAH ) STATE OF WEST VIRGINIA ) STATE OF WISCONSIN ) ) Intervenor-Plaintiffs, ) ) v. ) ) THOMAS E. PEREZ, in his official ) capacity, Secretary, United States ) Department of Labor, ) Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 1 of 29 PageID 1256 ii ) MICHAEL J. HAYES, in his official ) capacity, Director, Office of Labor- ) Management Standards, United States ) Department of Labor, and ) ) UNITED STATES DEPARTMENT ) OF LABOR ) ) Defendants. ) PLAINTIFFS’ BRIEF IN SUPPORT OF THEIR MOTION FOR SUMMARY JUDGMENT Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 2 of 29 PageID 1257 iii TABLE OF CONTENTS TABLE OF AUTHORITIES ........................................................................................................ iv PLAINTIFFS’ BRIEF IN SUPPORT OF THEIR MOTION FOR SUMMARY JUDGMENT ... 1 I. SUMMARY AND PROCEDURAL BACKGROUND ........................................ 1 II. FACTS ................................................................................................................... 3 III. LEGAL STANDARD ............................................................................................ 4 IV. ARGUMENTS AND AUTHORITIES.................................................................. 6 A. Plaintiffs have standing and the claims are ripe for review. ...................... 6 B. DOL lacks statutory authority to promulgate and enforce its new Advice Exemption Interpretation. .............................................................. 9 C. DOL’s new Advice Exemption Interpretation is arbitrary, capricious, and an abuse of discretion. .................................................... 11 D. DOL’s new Advice Exemption Interpretation violates free speech and association rights protected by the First Amendment. ...................... 14 E. DOL’s new Advice Exemption Interpretation is unconstitutionally vague in violation of the due process clause of the Fifth Amendment. ............................................................................................. 16 F. DOL’s new Advice Exemption Interpretation violates the Regulatory Flexibility Act (RFA). ........................................................... 17 V. CONCLUSION .................................................................................................... 20 CERTIFICATE OF SERVICE .................................................................................................... 22 Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 3 of 29 PageID 1258 iv TABLE OF AUTHORITIES Page(s) Cases Abbott Labs. v. Gardner, 387 U.S. 136 (1967) ...................................................................................................................8 Am. Commc’ns Ass’n, C.I.O. v. Douds, 339 U.S. 382 (1950) .................................................................................................................15 Asarco, Inc. v. U.S. Envtl. Prot. Agency, 616 F.2d 1153 (9th Cir. 1980) ...................................................................................................5 Associated Builders & Contractors of Texas, Inc. v. Nat'l Labor Relations Bd., No. 15-50497, 2016 WL 3228174 (5th Cir. June 10, 2016) ......................................................8 Associates Builders and Contractors of Arkansas et al. v. Perez et al., No. 4:16-CV-169 (E.D. Ark. July 12, 2016) .............................................................................3 Bowen v. Georgetown Univ. Hosp., 488 U.S. 204 (1988) ...................................................................................................................9 Broadrick v. Oklahoma, 413 U.S. 601 (1973) .................................................................................................................15 Celotex Corp. v. Catrett, 477 U.S. 317 (1986) ...................................................................................................................4 Cent. United Life Ins. Co. v. Burwell, --- F.3d ----, No. 15-5310, 2016 WL 3568084 (D.C. Cir. July 1, 2016)..................................11 Chevron U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837 (1984) .............................................................................................................9, 11 Contender Farms, L.L.P. v. Dep’t of Agric., 779 F.3d 258 (5th Cir. 2015) .............................................................................................6, 7, 8 Davis Mts. Trans-Pecos Heritage Ass'n v. United States Air Force, 249 F. Supp. 2d 763 (N.D. Tex. 2003) ......................................................................................5 FCC v. Fox Television Stations, Inc., ___ U.S. ___, 132 S. Ct. 2307 (2012) ................................................................................16, 17 Food and Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000) ...................................................................................................................9 Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 4 of 29 PageID 1259 v Grayned v. City of Rockford, 408 U.S. 104 (1972) .................................................................................................................16 Highland Med. Ctr. v. Leavitt, Civil Action No. 5:06-CV-082-C, 2007 WL 5434880, 2007 U.S. Dist. LEXIS 97504 (N.D. Tex. May 9, 2007).....................................................................................9, 10, 11 Hoffman Estates v. Flipside, Hoffman Estate, 455 U.S. 489 (1982) .................................................................................................................16 Hunt v. Washington State Apple Adver. Comm’n, 432 U.S. 333 (1977) ...................................................................................................................7 ITT World Commc’ns v. FCC, 725 F.2d 732 (D.C. Cir. 1984) .................................................................................................19 King v. Burwell, ___ U.S. ___, 135 S. Ct. 2480 (2015) ......................................................................................10 Koldender v. Lawson, 461 U.S. 352 (1983) .................................................................................................................16 Laredo Rd. Co. v. Maverick Cnty., Texas, 389 F. Supp. 2d 749 (W.D. Tex. 2005)......................................................................................4 Markle Interests, L.L.C. v. United States Fish & Wildlife Serv., No. 14-31008, 2016 WL 3568093, 2016 U.S. App. 12066 (5th Cir. June 30, 2016) ..........................................................................................................................................6 Medina Cty. Envtl. Action Ass'n v. Surface Transp. Bd., 602 F.3d 687 (5th Cir. 2010) .................................................................................................4, 5 Nat’l Ass’n of Broadcasters v. F.C.C., 740 F.2d 1190 (D.C. Cir. 1984) ...............................................................................................19 Nat'l Ass'n of Manufacturers v. S.E.C., 800 F.3d 518 (D.C. Cir. 2015) ...................................................................................................5 Odessa Reg'l Hosp. v. Leavitt, 386 F. Supp. 2d 885 (W.D. Tex. 2005)....................................................................................12 Raggsdale v. Wolverine World Wide, Inc., 535 U.S. 81 (2002) ...................................................................................................................10 Scott v. Harris, 550 U.S. 372 (2007) ...................................................................................................................4 Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 5 of 29 PageID 1260 vi Show, Inc. v. United States Dep't of Agric., No. 4:12-CV-429-Y, 2013 WL 11309349 (N.D. Tex. July 29, 2013) .......................................5 Susan B. Anthony List v. Driehaus, ___ U.S. ___, 134 S. Ct. 2334 (2014) ....................................................................................7, 8 Texas v. United States, 809 F.3d 134 (5th Cir. 2015) ...............................................................................................9, 10 United States v. Alvarez, ___ U.S. ___, 132 S. Ct. 2537 (2012) ......................................................................................14 United States v. Playboy Entm’t Grp., 529 U.S. 803 (2000) ...........................................................................................................14, 15 World Wide St. Preachers Fellowship v. Town of Columbia, 245 F. App’x 336 (5th Cir. 2007) ............................................................................................15 Wyoming v. United States Dep't of the Interior, 136 F. Supp. 3d 1317, 1330 (D. Wyo. 2015) ...........................................................................11 Constitutional Provisions and Statutes U.S. Const. amend I ............................................................................................................... passim U.S. Const. amend V..............................................................................................................2, 5, 16 5 U.S.C. § 603(a) ...........................................................................................................................17 5 U.S.C. § 603(b) ...........................................................................................................................18 5 U.S.C. § 603(c) ...........................................................................................................................18 5 U.S.C. § 605 ................................................................................................................................18 5 U.S.C. § 701 ................................................................................................................................12 5 U.S.C. § 706(2) .....................................................................................................................2, 8, 9 5 U.S.C. § 706(2)(A)......................................................................................................................11 5 U.S.C. § 706(2)(C) ..................................................................................................................9, 10 29 U.S.C. § 433(a) .........................................................................................................................18 29 U.S.C. § 433(b) .........................................................................................................................18 29 U.S.C. § 433(c) .....................................................................................................................1, 10 Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 6 of 29 PageID 1261 vii Administrative Procedure Act (APA), 5 U.S.C. § 702 .......................................................... passim Horse Protection Act (HPA), 15 U.S.C. § 1823 ..............................................................................7 Labor-Management Reporting and Disclosure Act (LMRDA), 29 U.S.C. § 433 ................. passim National Labor Relations Act (NLRA), 29 U.S.C. § 151-69 ...........................................................2 Public Health Service Act (PHSA), 42 U.S.C. § 201 ....................................................................11 Regulatory Flexibility Act (RFA), 5 U.S.C. § 601 ............................................................2, 5, 8, 17 Regulations and Other Authorities 81 Fed. Reg. 15,924 (Mar. 24, 2016) ...............................................................................................2 81 Fed. Reg. 15,926 .......................................................................................................................13 81 Fed. Reg. 15,932 .......................................................................................................................13 81 Fed. Reg. 15,969 .......................................................................................................................14 81 Fed. Reg. 15,992 .......................................................................................................................19 81 Fed. Reg. 15,998 n. 93 ..............................................................................................................13 81 Fed. Reg. 16,015 .......................................................................................................................18 Fed. R. Civ. P. 56(c) ........................................................................................................................4 Fed. R. Civ. P. 65(a)(2) ....................................................................................................................4 LR 83.10 ........................................................................................................................................22 R. Prof'l Conduct R. 1.05(c)(4) ......................................................................................................14 Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 7 of 29 PageID 1262 1 PLAINTIFFS’ BRIEF IN SUPPORT OF THEIR MOTION FOR SUMMARY JUDGMENT TO THE HONORABLE SAM R. CUMMINGS, UNITED STATES SENIOR DISTRICT JUDGE: Plaintiffs National Federation of Independent Business (“NFIB”), Texas Association of Business (“TAB”), Lubbock Chamber of Commerce (“Lubbock Chamber”), National Association of Home Builders, and Texas Association of Builders (“Plaintiffs”) file this Brief in Support of their Motion for Summary Judgment, and respectfully show the Court as follows: I. SUMMARY AND PROCEDURAL BACKGROUND Plaintiffs filed their Complaint for Declaratory Relief and Application for Preliminary Injunction and Permanent Injunction (“Complaint”) on March 31, 2016. Dkt. 1. Intervenor-Plaintiffs State of Texas, State of Arkansas, State of Alabama, State of Indiana, Attorney General Bill Schuette on behalf of the People of Michigan, State of Oklahoma, State of South Carolina, State of Utah, State of West Virginia, and State of Wisconsin (“Intervenor-Plaintiffs” or the “States”) filed their Complaint in Intervention and Application for Preliminary Injunction on May 19, 2016. Dkt. 49. Plaintiffs and Intervenor-Plaintiffs named the following persons and entities as the Defendants: Thomas E. Perez, in his official capacity, Secretary, United States Department of Labor; Michael J. Hayes, in his official capacity, Director, Office of Labor-Management Standards, United States Department of Labor; and United States Department of Labor (all collectively, “DOL”). In this action, Plaintiffs and Intervenor-Plaintiffs seek declaratory and injunctive relief with respect to DOL’s new rule entitled “Interpretation of the ‘Advice’ Exemption in Section 203(c) of the Labor-Management Reporting and Disclosure Act; Final Rule” (hereafter, the Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 8 of 29 PageID 1263 2 “New Rule” or the “Advice Exemption Interpretation”), 81 Fed. Reg. 15,924 (Mar. 24, 2016).1 Specifically, Plaintiffs challenge DOL’s New Rule based on the Administrative Procedure Act, 5 U.S.C. § 702 (“APA”) because the New Rule is in excess of DOL’s statutory authority, is contrary to the plain wording of the Labor-Management Reporting and Disclosure Act (“LMRDA”), 29 U.S.C. § 433, and is arbitrary and capricious (First Cause of Action); based on the First Amendment to the United States Constitution because the new rule violates Plaintiffs’ and their members’ free speech rights (Second Cause of Action)2; based on the Fifth Amendment to the United States Constitution because the new rule imposes criminal sanctions, but fails to define with necessary clarity what conduct is outlawed (Third Cause of Action); and based on the Regulatory Flexibility Act (“RFA”), 5 U.S.C. § 601 et seq. (2012), because DOL failed to properly account for the costs of the new rule (Fourth Cause of Action). Plaintiffs and Intervenor-Plaintiffs seek a judgment declaring the New Rule unlawful, setting it aside pursuant to 5 U.S.C. § 706(2), and permanently enjoining Defendants from enforcing it. On June 20, 2016, the Court conducted an evidentiary hearing on Plaintiffs’ and Intervenor-Plaintiffs’ Applications (Motions) for Injunctive Relief. The Court heard evidence from eight (8) witnesses presented by Plaintiffs and admitted various documentary exhibits into the record. Dkts. 81 & 82. Defendants called no witnesses and introduced no exhibits into the record. On June 27, 2016, the Court issued an 86-page Preliminary Injunction, enjoining Defendants on a nationwide basis from implementing any and all aspects of the New Rule pending a final resolution on the merits. Dkt. 85.3 The Court expressly found that Plaintiffs and 1 The new rule is 127 pages long. 2 DOL’s new rule is also preempted by Section 8(c) of the National Labor Relations Act (NLRA), 29 U.S.C. § 158(c) (2012). 3 The Court’s Preliminary Injunction Order is very complete. It thoroughly summarizes the New Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 9 of 29 PageID 1264 3 the Intervenor-Plaintiffs are likely to succeed on the merits of their claims. Dkt. 85, § I. ¶ 52. The Court held: DOL’s New Rule is not merely fuzzy around the edges. Rather, the New Rule is defective to its core because it entirely eliminates the LMRDA’s Advice Exemption. In whatever manner DOL defines “advice,” it must do so consistent with the statute and therefore must actually exempt advice, including advice that has an object to persuade. The New Rule not only fails to do that, it does the exact opposite: it nullifies the exemption for advice that relates to persuasion. The New Rule therefore fails to provide notice to employers, lawyers, and consultant of what activities relating to persuasion are covered by the Advice Exemption. Such advance notice is necessary to allow employers, lawyers, and consultants to order their affairs accordingly. As demonstrated by the evidence in this case, many employers, lawyers and trade associations want to avoid engaging in activities that trigger reporting under the LMRDA for various reasons, including due to their ethical obligations and their privacy concerns. Moreover, as a criminal statute, LMRDA must provide fair notice of what conduct is required and prohibited. The New Rule, which is contrary to the LMRDA, completely fails to do that. It leaves employers, lawyers, consultants, and trade associations – not to mention unions, employees, DOJ prosecutors, DOL investigators, and other interested parties – to guess what activities with an object to persuade fall within the LMRDA’s Advice Exemption. Dkt. 85, § II. ¶ 175 (emphasis added). DOL filed its Answer to the Complaint in Intervention on July 18, 2016, and its Answer to the Complaint on July 27, 2016. Dkts. 90 & 91. Although DOL has not filed the Administrative Record in this action, it has filed it in a parallel case, Associates Builders and Contractors of Arkansas et al. v. Perez et al., No. 4:16-CV-169 (E.D. Ark. July 12, 2016). Dkts. 55-57. II. FACTS The Court’s 86-page Preliminary Injunction Order sets out in detail the factual background of this action. Dkt. 85 at pp. 2-27. To avoid unnecessary repetition, Plaintiffs Rule, the record, the applicable law, and relevant testimony and evidence relative to this motion for summary judgment and dispositively explains, in great detail, why Plaintiffs should prevail and obtain the summary judgment prayed for herein. Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 10 of 29 PageID 1265 4 respectfully incorporate by reference the facts contained in the Court’s Preliminary Injunction Order as their statement of undisputed material facts for purposes of summary judgment. Fed. R. Civ. P. 65(a)(2) (“[E]vidence that is received on the motion [for a preliminary injunction] and that would be admissible at trial becomes part of the trial record . . . .”); Laredo Rd. Co. v. Maverick Cnty., Texas, 389 F. Supp. 2d 749, 750 (W.D. Tex. 2005) (granting partial summary judgment where the court, in its order granting the preliminary injunction, already determined that the defendant's conduct, on its face, encompassed an unconstitutional licensing scheme). The facts already found by the Court are based on the prior pleadings and other submissions in this case as well as the evidence presented at the preliminary injunction hearing, which included testimony from eight (8) witnesses and various documentary exhibits introduced into evidence at the preliminary injunction hearing. This evidence is undisputed. All testimony and exhibits admitted into evidence at the preliminary injunction hearing are presented in support of, and incorporated into, this Motion for Summary Judgment. See Dkts. 81 & 82. III. LEGAL STANDARD Summary judgment is proper in a case in which there is no genuine issue of material fact. Fed. R. Civ. P. 56(c); Scott v. Harris, 550 U.S. 372, 380 (2007); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A defendant moving for summary judgment must show an absence of record evidence in support of one or more elements of the case for which the nonmoving party bears the burden in order to be entitled to summary judgment. Celotex Corp., 477 U.S. at 322. Defendants have argued that this Court may not look outside the Administrative Record in evaluating the merits of Plaintiffs’ and Intervenors’ claims. Dkt. 66 at p. 2 n.1. However, as this Court found in its Preliminary Injunction Order, courts may properly consider evidence outside of the administrative record for certain purposes on challenges under the APA. Dkt. 85 § II ¶¶ 40 - 48; see also Medina Cty. Envtl. Action Ass'n v. Surface Transp. Bd., 602 F.3d 687, Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 11 of 29 PageID 1266 5 706 (5th Cir. 2010); Davis Mts. Trans-Pecos Heritage Ass'n v. United States Air Force, 249 F. Supp. 2d 763, 776 (N.D. Tex. 2003), vacated sub nom. on other grounds, Davis Mountains Trans-Pecos Heritage Ass'n. v. Fed. Aviation Admin., 116 F. App'x 3 (5th Cir. 2004); Show, Inc. v. United States Dep't of Agric., No. 4:12-CV-429-Y, 2013 WL 11309349, at *5 (N.D. Tex. July 29, 2013) (in APA challenge to rule, considering evidence outside of the administrative record relevant to show standing and harm), aff'd in relevant part, vacated in part, rev'd in part sub nom. Contender Farms, L.L.P. v. U.S. Dep’t of Agric., 779 F.3d 258, 266 (5th Cir. 2015) (noting evidentiary record showed challenged rule’s threatened harm to plaintiffs); Asarco, Inc. v. U.S. Envtl. Prot. Agency, 616 F.2d 1153, 1160 (9th Cir. 1980) (“[I]t is both unrealistic and unwise to ‘straightjacket’ the reviewing court with the administrative record. It will often be impossible, especially when highly technical matters are involved, for the court to determine whether the agency took into consideration all relevant factors unless it looks outside the record to determine what matters the agency should have considered but did not. The court cannot adequately discharge its duty to engage in a ‘substantial inquiry’ if it is required to take the agency's word that it considered all relevant matters.”). Here, as this Court found in its Preliminary Injunction Order, it is appropriate and proper for the Court to consider evidence other than and outside of the Administrative Record under these well-established exceptions. First, such evidence shows the harm threatened by DOL’s New Rule to Plaintiffs, their members, and Intervenors, which is relevant to standing and ripeneness and relevant as “‘background information’ in order to determine whether the agency considered all of the relevant factors.” Medina Cty., 602 F.3d at 706. In addition, it is significant that such evidence is relevant to Plaintiffs’ claims outside of the APA, specifically, their First and Fifth Amendment and their RFA claims, as set forth below. See, e.g., Nat'l Ass'n Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 12 of 29 PageID 1267 6 of Manufacturers v. S.E.C., 800 F.3d 518, 526 (D.C. Cir. 2015) (on First Amendment challenge to rule promulgated by the United States Securities and Exchange Commission (“SEC”), considering “post-hoc evidence [that] thr[ew] further doubt on whether the conflict minerals rule either alleviate[d] or aggravate[d] the stated problem” that the SEC’s rule was intended to solve, including published news articles). IV. ARGUMENTS AND AUTHORITIES4 A. Plaintiffs have standing and the claims are ripe for review. As the Court previously held in its Preliminary Injunction Order, Plaintiffs have standing and their claims are ripe for review. See Dkt. 85, § II. ¶¶ 38-39 (standing established). To show standing, Plaintiffs must demonstrate that they have “suffered ‘injury in fact,’ that the injury is ‘fairly traceable’ to the actions of the defendant, and that the injury will likely be redressed by a favorable decision.” Markle Interests, L.L.C. v. United States Fish & Wildlife Serv., No. 14-31008, 2016 WL 3568093, at *4, 2016 U.S. App. 12066, at *13 (5th Cir. June 30, 2016) (quoting Bennett v. Spear, 520 U.S. 154, 162 (1997). “The injury must be concrete and particularized, as well as actual or imminent.” Id. The Fifth Circuit has made clear that “[a]n increased regulatory burden typically satisfies the injury in fact requirement.” Contender Farms, L.L.P. v. Dep’t of Agric., 779 F.3d 258, 266 (5th Cir. 2015) (finding “no reason to depart from the ordinary rule that [plaintiffs], as objects of the Regulation, may challenge it.”). Indeed, “[i]f a plaintiff is an object of a regulation ‘there is 4 Substantial briefing relating to the merits of Plaintiffs’ claims has already been filed by Plaintiffs (Dkts. 25, 59, 80), DOL (Dkts. 46, 52, 72, 79 ) Intervenors (Dkt. 49), and amici Chamber of Commerce of the United States (Dkt. 34), and Washington Legal Foundation (Dkt. 55) in connection with Plaintiffs’ Application for Preliminary Injunction. All of that briefing is not repeated in this Motion, although it is instructive and available for review by the Court. Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 13 of 29 PageID 1268 7 ordinarily little question that the action or inaction has caused him injury, and that a judgment preventing or requiring the action will redress it.’” Id. at 264 (citation omitted). Here, there is no dispute that Plaintiffs are objects of DOL’s New Rule. They and their employer-members are subject to the New Rule’s disclosure requirements, which would create an increased regulatory burden both on Plaintiffs directly and on their members. See Preliminary Inj. Order [Dkt. 85], § I. Findings of Fact, ¶¶ 55 – 101. There is also no dispute that DOL’s promulgating the New Rule will cause this injury or that this Court’s setting aside the New Rule under the APA or otherwise permanently enjoining its enforcement will redress that injury. 5 “The ripeness and standing analyses are closely related, as ripeness inquires as to ‘whether the harm asserted has matured sufficiently to warrant judicial intervention.’” Contender Farms, L.L.P., 779 F.3d at 267. In pre-enforcement challenges, “[a]n allegation of future injury may suffice if the threatened injury is certainly impending, or there is a substantial risk that the harm will occur.” Susan B. Anthony List v. Driehaus, ___ U.S. ___, 134 S. Ct. 2334, 2341 (2014) (internal quotation marks omitted). The Fifth Circuit has explained that challenges raising purely legal issues are ripe for review prior to enforcement. For example, in Contender Farms, the Fifth Circuit found that plaintiffs’ pre-enforcement challenge under the APA to a regulation promulgated by United States Department of Agriculture (USDA) under Horse Protection Act (HPA), 15 U.S.C. § 1823, that required private entities, known as Horse Industry Organizations (HIOs), to impose 5 In addition, there is no dispute that Plaintiffs, as associations, also have standing to sue on behalf of their members. Plaintiffs satisfy the three-part standing test established in Hunt v. Washington State Apple Adver. Comm’n, 432 U.S. 333, 343 (1977), because (1) Plaintiffs’ members would otherwise have standing to sue in their own right; (2) the interests at stake in this case are germane to Plaintiffs’ organizational purposes; and (3) neither the claims asserted nor the relief requested requires the participation of Plaintiffs’ individual members. Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 14 of 29 PageID 1269 8 mandatory suspensions on those participants found to engage in a practice known as “soring” was ripe for review. The court explained: [W]e observe that Contender Farms and McGartland raise a purely legal challenge to the Regulation. If we adopt their view, the Regulation exceeds the USDA’s authority as granted by Congress and violates various constitutional principles. Thus, “[i]t is unnecessary to wait for the [Regulation] to be applied in order to determine its legality.” Nat'l Envtl. Dev. Ass'n's Clean Air Project v. Envtl. Prot. Agency, 752 F.3d 999, 1008 (D.C. Cir. 2014). Contender Farms, 779 F.3d at 267. See also Susan B. Anthony List, ___ U.S. ___, 134 S. Ct. at 2347 (in pre-enforcement action, addressing “prudential ripeness” concerns and concluding that “denying prompt judicial review would impose a substantial hardship on petitioners, forcing them to choose between refraining from core political speech on the one hand, or engaging in that speech and risking costly Commission proceedings and criminal prosecution on the other.”); Abbott Labs. v. Gardner, 387 U.S. 136, 152 (1967) (finding challenge ripe for review in large part because plaintiffs were faced with “dilemma” of either incurring substantial economic costs to comply with a new labeling rule or risking criminal and civil penalties). Here, Plaintiffs’ challenges to DOL’s New Rule raise purely legal questions under the APA, the First and Fifth Amendments, and the RFA. If the Court adopts Plaintiffs’ view, then the New Rule exceeds DOL’s authority under the LMRDA, 29 U.S.C. § 433, and otherwise violates the Constitution and should be “set aside” under 5 U.S.C. § 706(2). As with the regulation at issue in Contender Farms, it is unnecessary to wait for application of the New Rule to determine its unlawfulness.6 6 Moreover, because the New Rule does not grant agency personnel discretionary authority to make varying decisions based on the facts of each case, it is unnecessary to review the rule in the context of individual enforcement actions. Cf. Associated Builders & Contractors of Texas, Inc. v. Nat'l Labor Relations Bd., No. 15-50497, 2016 WL 3228174, at *4 (5th Cir. June 10, 2016) (where authorizing statute “grant[ed] the [National Labor Relations Board] wide discretion in devising the procedures employed in deciding whether a question of representation exists,” and Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 15 of 29 PageID 1270 9 B. DOL lacks statutory authority to promulgate and enforce its new Advice Exemption Interpretation. Under the APA, this Court “shall . . . hold unlawful and set aside agency action, findings, and conclusions” that are “in excess of statutory jurisdiction, authority, or limitations . . . .” 5 U.S.C. § 706(2)(C). “It is axiomatic that an administrative agency’s power to promulgate legislative regulations is limited to the authority delegated by Congress.” Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988). Regardless of how serious an alleged problem that an administrative agency seeks to address, “it may not exercise its authority ‘in a manner that is inconsistent with the administrative structure that Congress enacted into law.’” Food and Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 125 (2000) (quoting ETSI Pipeline Project v. Missouri, 484 U.S. 495, 517 (1988)). When reviewing an agency’s construction of a statute under the APA, courts apply the two-step analysis established by Chevron U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837, 842–43 (1984). Under step one, where “Congress has directly spoken to the precise question at issue,” courts must “give effect to the unambiguously expressed intent of Congress.” Id. at 842–43. Courts “must reject administrative constructions which are contrary to clear congressional intent.” Highland Med. Ctr. v. Leavitt, Civil Action No. 5:06-CV-082-C, 2007 WL 5434880, at *3, 2007 U.S. Dist. LEXIS 97504, at *9 (N.D. Tex. May 9, 2007). On the other hand, “if the challenged rules adopted by the Board further granted agency personnel discretion to determine voter eligibility, to postpone certain filings, and to make other decisions on a case-by-case basis, plaintiff required to show “no set of circumstances exist[ed] under which the [new rules] would be valid”). Here, the New Rule sets forth a generally applicable mandate that is not subject to discretionary application, and the fundamental question is whether DOL was authorized to promulgate the New Rule as a whole. See 5 U.S.C. § 706(2); see also Texas v. United States, 809 F.3d 134, 186 (5th Cir. 2015), as revised (Nov. 25, 2015) (finding regulation was “foreclosed by Congress's careful plan” and that new agency program was “manifestly contrary to the statute” and therefore “properly enjoined”), aff’d by equally divided court, 136 S. Ct. 2271 (Mem.) (June 23, 2016). Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 16 of 29 PageID 1271 10 Congress' intent is unclear, the court must determine whether the agency's construction is based upon a permissible construction of the statute.” Id. (internal quotation marks omitted). This approach “is premised on the theory that a statute’s ambiguity constitutes an implicit delegation from Congress to the agency to fill in the statutory gaps.” King v. Burwell, ___ U.S. ___, 135 S. Ct. 2480, 2488 (2015) (citation omitted) (ambiguity in statute was not an implicit delegation of authority to agency in light of importance of issue and agency’s lack of relevant expertise). Here, DOL’s New Rule must be set aside under the APA because DOL “exercise[d] its authority in a manner that is inconsistent with the administrative structure that Congress enacted into law.” Raggsdale v. Wolverine World Wide, Inc., 535 U.S. 81, 91 (2002) (internal quotations omitted). As the Court’s Preliminary Injunction Order properly concluded, DOL’s New Rule exceeds DOL’s authority under the LMRDA because it effectively eliminates the statute’s Advice Exemption, contrary to the plain text of Section 203(c). 29 U.S.C. § 433(c). See Prelim. Inj. Order, Dkt. 85, § II. ¶ 53. As the Court explained: Because the plain text of the LMRDA makes “the intent of Congress . . . clear” that an exemption for advice – including advice with an object to persuade – exists, “that is the end of the matter . . . .” BNSF Ry. Co. v. United States, 775 F.3d 743, 751 (5th Cir. 2015) (quoting Chevron U.S.A. v. Natural Res. Dev. Council, 467 U.S. 837, 842-43 (1984)). DOL “must give effect to the unambiguously expressed intent of Congress” to exempt advice from the LMRDA reporting requirements and may not nullify that plain-text exemption by an unauthorized rulemaking. Chevron. 467 U.S. at 843. Prelim. Inj. Order at § II. ¶ 67. Accordingly, “[e]ven if the LMRDA does not provide a precise definition of advice, it does clearly and unambiguously provide an exception from Sections 203(a) and (b)’s reporting requirements” and “DOL’s New Rule improperly reads that exemption out of the statute.” Id. at § II. ¶ 68. Because DOL’s New Rule is contrary to the plain text of the LMRDA, it must be set aside because it is in excess of DOL’s authority. 5 U.S.C. § 706(2)(C). See Texas v. United Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 17 of 29 PageID 1272 11 States, 809 F.3d 134, 186 (5th Cir. 2015), as revised (Nov. 25, 2015) (finding regulation was “foreclosed by Congress’s careful plan” and that new agency program was “manifestly contrary to the statute” and therefore “properly enjoined”), aff’d by equally divided court, 136 S. Ct. 2271 (Mem.) (June 23, 2016); Cent. United Life Ins. Co. v. Burwell, --- F.3d ----, No. 15-5310, 2016 WL 3568084, at *2 (D.C. Cir. July 1, 2016) (holding under Chevron Step One that the United States Department of Health and Human Services’ regulation that attempted to eliminate certain exceptions contained in the Public Health Service Act (“PHSA”), 42 U.S.C. § 201, was unauthorized and explaining “where Congress exempted all such conforming plans from the PHSA's coverage requirements, HHS, with its additional criterion, exempts less than all” and “[d]isagreeing with Congress's expressly codified policy choices isn’t a luxury administrative agencies enjoy”); Wyoming v. United States Dep't of the Interior, 136 F. Supp. 3d 1317, 1330 (D. Wyo. 2015) (“[T]he Court finds that Congress has directly spoken to the issue and precluded federal agency authority to regulate hydraulic fracturing not involving the use of diesel fuels.”), vacated as moot and remanded sub nom. Wyoming v. Sierra Club, No. 15-8126, 2016 WL 3853806, 2016 U.S. App. LEXIS 13210 (10th Cir. July 13, 2016). C. DOL’s new Advice Exemption Interpretation is arbitrary, capricious, and an abuse of discretion. Because the LMRDA is not ambiguous in providing an exemption for advice, it is unnecessary for the Court to reach the second step of Chevron’s analysis. However, even if the Court were to proceed to this second step, DOL’s New Rule must be set aside as arbitrary and capricious. 5 U.S.C. § 706(2)(A). An agency must “interpret its implementing legislation in a reasonable manner and may not make findings or promulgate regulations in a manner that is arbitrary or capricious in substance, or manifestly contrary to the statute.” Highland Med. Ctr. v. Leavitt, No. Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 18 of 29 PageID 1273 12 5:06-cv-082-C, 2007 WL 5434880, at *3, 2007 U.S. Dist. LEXIS 97504, at *8 (N.D. Tex. May 9, 2007). (quoting Clark Reg’l Med. Ctr. v. United States HHS, 314 F.3d 241, 244 (6th Cir. 2002)). Pursuant to the APA, courts must “hold unlawful and set aside an action by an agency that is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.” Odessa Reg'l Hosp. v. Leavitt, 386 F. Supp. 2d 885, 890 (W.D. Tex. 2005) (quoting Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994)); 5 U.S.C. § 701 et seq. (2012). Here, as the Court found in its Preliminary Injunction Order, DOL’s New Rule is arbitrary and capricious for multiple reasons. First, DOL “never adequately explains why it is abandoning the prior, longstanding Advice Exemption now” in favor of the New Rule. Dkt. 85, Prelim. Inj. Order at § II. ¶ 72.7 In addition, DOL’s new Advice Exemption Interpretation unreasonably conflicts with state rules governing the practice of law. Id. at § II. ¶ 76. As this Court explained: DOL asserts that the conflicts its new Advice Exemption Interpretation will create with state ethical requirements can simply be overcome by federal preemption. 81 Fed. Reg. 15,997–15,998. But the question here is whether it would be arbitrary and capricious of DOL to create those conflicts in the first place by adopting its new Advice Exemption Interpretation. Given the historic importance of attorneys’ duty of confidentiality, duty of loyalty, the attorney-client privilege and other ethical obligations, there is nothing in the text of the LMRDA that suggests Congress authorized DOL to nullify those duties at its discretion. Id. at § II. ¶ 85. 7 As this Court concluded: Evidence shows that if the broad disclosure requirements of Section 203(b) and the LM-21 Form are applied to attorneys and employers under the DOL’s New Rule, there is a substantial risk that attorneys will cease providing certain advice, including some legal advice, and that employers would cease to seek it. Such an outcome burdens and “chills” employers’ First Amendment rights. Dkt. 85, § II. ¶ 114. Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 19 of 29 PageID 1274 13 As this Court found, the DOL’s New Rule will cause many lawyers to stop providing advice that will trigger reporting.8 That result is directly contrary to LMRDA’s expressed intent to shield advice from reporting, which would preserve employers’ access to it. Indeed, DOL’s stated objective for its New Rule highlights the Rule’s arbitrariness. DOL’s primary purported rationale for its New Rule is that it will provide employees with “essential information about the underlying source of the views and materials being directed at them . . . .” 81 Fed. Reg. 15,926. DOL asserts that “[t]ransparency [p]romotes [w]orker [r]ights by [c]reating a [m]ore [i]nformed [e]lectorate.” 81 Fed. Reg. at 15,932. But as this Court found: DOL fails to show that the information disclosed in the LM reports will typically be “known to employees” when they cast their votes. To the contrary, the undisputed evidence offered at the evidentiary hearing demonstrates otherwise. Under the NLRB’s accelerated election rules, union elections are now typically held about 21 days after the employer receives the Notice of Hearing on the union’s election petition. An attorney’s LM-20 report is not due until 30 days after being retained by the targeted employer. Dkt. 85, Prelim. Inj. Order at § II. ¶ 101. Thus, as the Court found, DOL has “not shown that the newly required disclosures will typically occur before employees vote. To the contrary, such disclosures will generally occur only after voting has occurred, often long after voting is over.” Id. at § II. ¶ 107. Because DOL’s New Rule fails to serve its stated purpose – to increase “transparency” – while it simultaneously reduces employers’ access to advice contrary to the LMRDA, the rule is arbitrary and capricious. 8 DOL concedes its New Rule, by redefining non-reportable advice as reportable persuader services, will reduce employers’ access to such advice. See Dkt. 85, Prelim. Inj. Order at § II 158. DOL glibly observes in its New Rule that “[a]ttorneys who have an ethical reservation about their obligations under the rule to report information about their clients always have the option to choose to decline to provide persuader services to clients who refuse to provide consent to disclose the required information and limit services to legal services which do not trigger reporting in any event.” 81 Fed. Reg. 15,998 n. 93. Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 20 of 29 PageID 1275 14 Finally, as this Court found, because DOL’s New Rule likely exceeds DOL’s authority under the LMRDA, it could not constitute a valid “other law” for purposes of the exception in Rule 1.05 that allows a lawyer to reveal unprivileged confidential information "[w]hen the lawyer has reason to believe it is necessary to do so in order to comply with a court order, a Texas Disciplinary Rules of Professional Conduct, or other law." Tex. Discipl. R. Prof'l Conduct R. 1.05(c)(4) (emphasis added). Dkt. 85, § II. ¶ 86. For all of these reasons, DOL’s New Rule is arbitrary, capricious, and an abuse of discretion. D. DOL’s new Advice Exemption Interpretation violates free speech and association rights protected by the First Amendment. DOL’s new Advice Exemption Interpretation also violates Plaintiffs’ and their members’ free speech, expression and association rights protected by the First Amendment. First, as this Court found, DOL’s New Rule imposes content-based burdens on speech and cannot survive strict scrutiny. Dkt. 85, Prelim. Inj. Order at § II. ¶¶ 87-115. Indeed, DOL concedes that its New Rule is content based. In the Final Rule, DOL states: [R]eporting under both the prior interpretation and this rule rests upon whether the consultant undertakes activities with an object to persuade employees, which is determined, generally, by viewing the content of the communication and the underlying agreement with the employer. 81 Fed. Reg. 15,969 (emphasis added). “[T]he Constitution ‘demands that content-based restrictions on speech be presumed invalid . . . and that the Government bears the burden of showing their constitutionality.’” United States v. Alvarez, ___ U.S. ___, 132 S. Ct. 2537, 2543-44 (2012) (quoting Ashcroft v. American Civil Liberties Union, 542 U.S. 656, 660 (2004)). Indeed, “[i]t is rare that a regulation restricting speech because of its content will ever be permissible.” United States v. Playboy Entm’t Grp., 529 U.S. 803, 818 (2000). Thus, content-based regulations that prohibit or compel Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 21 of 29 PageID 1276 15 speech are subject to strict scrutiny review. See Playboy, 529 U.S. at 813 (“Since § 505 is [a] content-based [speech restriction], it can stand only if it satisfies strict scrutiny.”). As this Court found, strict scrutiny review requires the Government to prove that the restriction furthers a “compelling interest” and is “narrowly tailored” to achieve that interest. Dkt. 85, § II. ¶¶ 93-94. See, e.g., Playboy, 529 U.S. at 813 (“If a statute regulates speech based on its content, it must be narrowly tailored to promote a compelling Government interest.”). In addition, strict scrutiny requires the Government to show that it has used the least restrictive means of advancing that allegedly compelling interest. See Playboy, 529 U.S. at 813 (“If a less restrictive alternative would serve the Government’s purpose, the legislature must use that alternative.”); World Wide St. Preachers Fellowship v. Town of Columbia, 245 F. App’x 336, 343 (5th Cir. 2007) (unpublished) (per curiam) (“If a less restrictive alternative is available, the governmental restriction cannot survive strict scrutiny.”). As this Court found, DOL cannot show that its new Advice Exemption Interpretation satisfies any of these requirements. Dkt. 85, Prelim. Inj. Order at § II. ¶¶ 87-107. And even if the Court were to apply a lower standard of scrutiny, such as “exacting scrutiny,” the New Rule would still fail to satisfy that standard. Id. at § II. ¶ 107. As noted above, DOL’s purported justification for the New Rule – increasing “transparency” – is not served by the Rule because the information to be disclosed is unlikely to be available to employees before they vote in union elections. Supra at p. 13. There is thus no relation between DOL’s new disclosure requirement and any sufficiently important governmental interest. In addition, as this Court found, laws that inhibit or burden the exercise of First Amendment rights can be invalidated under the over-breadth doctrine. Id. at § II. ¶ 111 (citing Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 22 of 29 PageID 1277 16 Broadrick v. Oklahoma, 413 U.S. 601 (1973) & Am. Commc’ns Ass’n, C.I.O. v. Douds, 339 U.S. 382, 399 (1950)). As this Court concluded: Evidence shows that if the broad disclosure requirements of Section 203(b) and the LM-21 Form are applied to attorneys and employers under the DOL’s New Rule, there is a substantial risk that attorneys will cease providing certain advice, including some legal advice, and that employers would cease to seek it. Such an outcome burdens and “chills” employers’ First Amendment rights. Dkt. 85, § II. ¶ 114. E. DOL’s new Advice Exemption Interpretation is unconstitutionally vague in violation of the due process clause of the Fifth Amendment. DOL’s new Advice Exemption Interpretation also is void-for-vagueness under the Due Process Clause of the Fifth Amendment. “It is a basic principle of due process that an enactment is void for vagueness if its prohibitions are not clearly defined.” Grayned v. City of Rockford, 408 U.S. 104, 108 (1972). Thus, regulations must “give the person of ordinary intelligence a reasonable opportunity to know what is prohibited, so that he may act accordingly.” Id. Further, “if arbitrary and discriminatory enforcement is to be prevented, laws must provide explicit standards for those who apply them.” Id. “This requirement of clarity in regulation is essential to the protections provided by the Due Process Clause of the Fifth Amendment.” FCC v. Fox Television Stations, Inc., ___ U.S. ___, 132 S. Ct. 2307, 2317 (2012). Thus, “the void-for-vagueness doctrine requires that a penal statute define the criminal offense with sufficient definiteness that ordinary people can understand what conduct is prohibited and in a manner that does not encourage arbitrary and discriminatory enforcement.” Koldender v. Lawson, 461 U.S. 352, 357 (1983). Moreover, “[w]hen speech is involved, rigorous adherence to those requirements is necessary to ensure that ambiguity does not chill protected speech.” FCC, ___ U.S. ___, 132 S. Ct. at 2317 Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 23 of 29 PageID 1278 17 (emphasis added). Accord Hoffman Estates v. Flipside, Hoffman Estate, 455 U.S. 489, 499 (1982) (“[P]erhaps the most important factor affecting the clarity that the Constitution demands of a law is whether it threatens to inhibit the exercise of constitutionally protected rights. If, for example, the law interferes with the right of free speech or of association, a more stringent vagueness test should apply.”) (emphasis added). Here, this Court has already found: DOL’s New Rule is not authorized by the LMRDA and eliminates its Advice Exemption. If an employer, consultant, or attorney attempts to apply his or her own understanding of exempt advice based on the plain language of the LMRDA and based on actual practice, he or she will in many instances have to choose between following the statute or following the DOL’s New Rule. Presumably if that employer, consultant, or attorney chooses to follow the LMRDA rather the DOL’s New Rule, that would be a “willful” violation of the New Rule, exposing the employer, consultant, or attorney to potential criminal investigation and prosecution under 29 U.S.C. § 439. Dkt. 85, Prelim. Inj. Order at § II. ¶ 125. Thus, “[u]nder DOL’s New Rule, there is a substantial risk that associations, employers and consultants, including attorneys, will not be able to determine with reasonable certainty whether their actions require reporting.” Id. at § II. ¶ 126. Accordingly, DOL’s New Rule is void for vagueness. F. DOL’s new Advice Exemption Interpretation violates the Regulatory Flexibility Act (RFA). DOL’s new Advice Exemption Interpretation also violates the RFA, 5 U.S.C. § 601. The RFA requires an agency that has proposed a rule to prepare and make available for public comment an initial and final regulatory flexibility analysis. The initial flexibility analysis “shall describe the impact of the proposed rule on small entities.” 5 U.S.C. § 603(a). The final regulatory flexibility analysis, which is provided in connection with the promulgation of a final rule, requires “(1) a description of the reasons why action by the agency is being considered; (2) a succinct statement of the objectives of, and legal basis for, the proposed rule; (3) a description Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 24 of 29 PageID 1279 18 of and, where feasible, an estimate of the number of small entities to which the proposed rule will apply . . . ” and “a description of any significant alternatives to the proposed rule which accomplish the stated objectives of applicable statutes and which minimize any significant economic impact of the proposed rule on small entities.” 5 U.S.C. § 603(b), (c) (2012). An agency can avoid performing these analyses if the head of the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. 5 U.S.C. § 605 (2012). The certification must include a statement providing the factual basis for the agency’s determination that the rule will not significantly impact small entities. Id. Here, DOL certified that its new and constricted Advice Exemption Interpretation would “not have a significant economic impact on a substantial number of small entities.” 81 Fed. Reg. 16,015. But DOL, in making this certification, understated the economic impact of its New Rule, that it failed to provide an adequate factual basis for its cost estimates, and that it failed to meaningfully consider and address the weight of the comments and cost estimates submitted in response to proposed rulemaking. As indicated above, the LMRDA imposes three separate reporting requirements. First, a consultant, including an attorney, who is engaged by an employer to engage in Persuader Activity must file a Form LM-20 report within thirty days of entering into such a relationship. 29 U.S.C. § 433(b) (2012). Second, an employer who engages in any such arrangements must file a Form LM-10 year-end report covering all such activities for the past year. Id. § 433(a). Third, a consultant who has engaged in any covered activities must also file a year-end Form LM-21 report, which must detail his receipts and disbursements in connection with his work. Id. § 433(b). Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 25 of 29 PageID 1280 19 The evidence shows that DOL’s New Rule changes what associations, employers, and consultants, including attorneys, must report. DOL failed to consider the ramifications that its New Rule would have on consultants, including attorneys, who are required to complete and file Form LM-21. Instead, DOL left such concerns to a separate rulemaking, which it estimates will give rise to a new proposed rule concerning Form LM-21 in September 2016. 81 Fed. Reg. 15,992 & n.88. Agencies may not enact “a rule that utterly fails to consider how the likely future resolution of crucial issues will affect the rule’s rationale.” Nat’l Ass’n of Broadcasters v. F.C.C., 740 F.2d 1190, 1210 (D.C. Cir. 1984). Further, “an agency does not act rationally when it chooses and implements one policy and decides to consider the merits of a potentially inconsistent policy in the very near future.” ITT World Commc’ns v. FCC, 725 F.2d 732, 754 (D.C. Cir. 1984). Here, as this Court has already found: DOL artificially excluded important costs of its implementation from consideration (i.e., the increased cost of complying with Form LM-21’s requirements under the New Rule) by deferring consideration of such costs until such time as it engages in Form LM-21 rulemaking. DOL has structured its decision-making in such a way that it “entirely failed to consider an important aspect of the problem.” Nat’l Ass’n of Home Builders v. Defs. of Wildlife, 551 U.S. 644, 658 (2007) (quoting Motor Vehicle Mfrs. Ass’n of United States, Inc. v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29, 43 (1983)). Dkt. 85, Prelim. Inj. Order at § II. ¶ 136. Specifically, the evidence shows that “the costs to be incurred by some law firms to comply with the New Rule will be substantial” and it “does not appear that DOL considered such costs.” Id. at § II. ¶ 139. Thus DOL’s New Rule will impose a significant economic impact on a substantial number of small businesses, and DOL failed to conduct a proper regulatory flexibility analyses. Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 26 of 29 PageID 1281 20 V. CONCLUSION For all of the reasons set forth above, and in Plaintiffs’ and Intervenor-Plaintiffs’ pleadings and briefs and based upon the evidence adduced at the evidentiary hearing conducted on June 20, 2016, and based upon the Court’s Preliminary Injunction Order, Plaintiffs move the Court to enter summary judgment in their favor and in favor of the Intervenor-Plaintiffs, to set aside DOL’s New Rule and to permanently enjoin Defendants on a nationwide basis from enforcing that rule, and to grant Plaintiffs all other just relief, in law or in equity, to which they are justly entitled. Respectfully submitted, /s/Jeffrey C. Londa Jeffrey C. Londa, TX #12512400 OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C. 500 Dallas Street, Suite 3000 Houston, Texas 77002-4709 713.655.5750 (Phone) 713.655.0020 (Fax) jeffrey.londa@ogletreedeakins.com Frank D. Davis, TX #24031992 OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C. Preston Commons West 8117 Preston Road, Suite 500 Dallas, TX 75225 214.987.3800 (Phone) 214.987.3927 (Fax) frank.davis@ogletreedeakins.com Christopher C. Murray (admitted pro hac vice) OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C. 111 Monument Circle, Suite 4600 Indianapolis, IN 46204 Tel: (317) 916-1300 Fax: (317) 916-9076 christopher.murray@ogletreedeakins.comdnss.com Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 27 of 29 PageID 1282 21 Charles C. High, Jr., TX # 09605000 Clara B. Burns, TX # 03443600 KEMP SMITH LLP 221 North Kansas, Suite 1700 El Paso, TX 79901 Telephone: (915) 533-4424 Facsimile: (915) 546-5360 CHigh@kempsmith.com CBurns@kempsmith.com The following are local Counsel for Plaintiffs pursuant to LR 83.10. Fernando M. Bustos, TX # 24001819 Aaron M. Pier; TX # 24041694 BUSTOS LAW FIRM, P.C. 1001 Main Street, Suite 501 P.O. Box 1980 Lubbock, TX 79408 (806) 780-3976 (806) 780-3800 (Facsimile) fbustos@bustoslawfirm.com apier@bustoslawfirm.com ATTORNEYS FOR PLAINTIFFS NATIONAL FEDERATION OF INDEPENDENT BUSINESS, TEXAS ASSOCIATION OF BUSINESS, LUBBOCK CHAMBER OF COMMERCE, NATIONAL ASSOCIATION OF HOME BUILDERS, AND TEXAS ASSOCIATION OF BUILDERS Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 28 of 29 PageID 1283 22 CERTIFICATE OF SERVICE This is to certify that the above Brief has been served on counsel for Defendants on this 22nd day of August, 2016, via ECF. /s/ Fernando M. Bustos Fernando M. Bustos 25919058.2 Case 5:16-cv-00066-C Document 94 Filed 08/22/16 Page 29 of 29 PageID 1284