Avionics News September 2014 - 53

unworkable rules, and it also limits reversals and other "surof its interpretations. The Alaska Hunters doctrine states that
prises" in the way that the rules are interpreted.
once an agency has given a regulation an interpretation, it can
Unfortunately, not every court that has addressed this issue
only modify that interpretation through formalized notice and
has agreed. This is because of the language that appears in
comment. This is so because to change the interpretation of
section 553 of the Administrative Procedures Act. That lanthe regulation is to effectively change the regulation itself, and
guage specifically states that "interpretative rules, general
this can only be done through notice and comment.
statements of policy, or rules of agency organization, proIn Alaska Hunters, the Alaska Region FAA Office had long
cedure or practice" are not subject to notice and comment
stated that tour guides in Alaska who used aircraft to service
requirements. However, it is not clear whether this provision
their customers, for sightseeing, hunting and other activities,
applies once an interpretive rule has been issued by an agency
were not subject to Part 121 or 135 of the FARs, but rather
and subsequently relied upon by the regulated parties.
only the general operating provisions of Part 91. This was
The question that arises is whether a federal agency must
because the operation of the aircraft was not as a commercial
engage in notice and comment rulemaking before it can sig(transportation) service, but rather the transportation was only
nificantly alter an interpretive rule that explains an agency's
incidental to the business itself.
interpretation of its regulation. The DC Circuit, which has
After approximately 30 years of this interpretation, the FAA,
as part of reorganization and centralizing
of power at headquarters, determined that
The question that arises is whether a federal agency
this long-held interpretation was incorrect, and that these tour operators were
must engage in notice and comment rulemaking before
subject to Part 135 of the Federal Aviation
Regulations. The FAA then began enforcit can significantly alter an interpretive rule that
ing the regulations with respect to Alaska
guides who had been relying on the preexplains an agency's interpretation of its regulation.
vious interpretation, which had been in
place for three decades. Not surprisingly,
jurisdiction over many federal agencies, has held that notice
the tour operators objected to this sudden change in regulatory
and comment is required to change an interpretive rule.
interpretation.
Other circuit courts have held that notice and comment is not
The U.S. Court of Appeals for the District of Columbia
required to change an interpretation, in accordance with the
Circuit agreed with the tour operators that this sudden change
plain language of section 553(b). This disagreement between
in the regulation (without notice and an opportunity to comcourts is what is known as a circuit split.
ment) was unfair. The court held that the FAA, in issuing a
That split is now poised to be resolved by the Supreme
notice to operators that they were now subject to Part 135,
Court in a case called Mortgage Bankers. You may be askhad failed to provide notice and an opportunity to comment,
ing yourself, "What does a case about mortgage bankers have
and the notice (and correspondingly the new interpretation of
to do with my business?" The answer is that, depending on
the regulation) was invalid. The court explained, "When an
which way the Supreme Court rules in Mortgage Bankers, the
agency has given its regulation a definitive interpretation, and
Alaska Hunters doctrine - the doctrine that prevents the FAA
later significantly revises that interpretation, the agency has
and other agencies from changing their interpretations of reguin effect amended its rule, something it may not accomplish
lations on a whim - could be struck down as invalid.
without notice and comment."
In Mortgage Bankers, the Department of Labor issued
This ruling by the DC Circuit seems to make intuitive
a 2006 opinion letter explaining when loan officers were
sense. Given that we strive for legal certainty, and given that
exempt from a requirement that employees be paid overtime
our regulatory process requires a notice and comment period
under the Fair Labor Standards Act. Only four years later,
to allow interested parties a chance to comment on proposed
in 2010, the Department of Labor issued an administrator's
regulations to ensure the creation of a fair and functional rule,
interpretation on the matter, withdrawing the 2006 opinion letit seems only natural that the interpretation of those rules, and
ter, and effectively changing the requirements for when loan
the way they are applied, cannot be changed without going
through the notice and comment process again. This ensures
Continued on following page
that changes to the regulations do not result in unfair or
avionics news

september

2014

Avionics News September 2014

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