Labnet v. DOL Persuader PI Opinion

7/25/2019 Labnet v. DOL Persuader PI Opinion

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UNITEDSTATESDISTRICTCOURT

DISTRICTOFMINNESOTA

LABNET INC., d/b/a Worklaw Network;

SHAWE & ROSENTHAL LLP; ALLEN,NORTON & BLUE, P.A.; COLLAZO

FLORENTINO & KEIL LLP; DENLINGER,

ROSENTHAL & GREENBERG; KAMER

ZUCKER ABBOTT; KEY HARRINGTON

BARNES, P.C.; LEHR MIDDLEBROOKS

VREELAND & THOMPSON, P.C.; NEEL

HOOPER & BANES, P.C.; SEATON,

PETERS & REVNEW, P.A.; SKOLER,

ABBOTT & PRESSER, P.C.; and UFBERG

& ASSOCIATES, LLP,

Plaintiffs,

v.

UNITED STATES DEPARTMENT OF

LABOR; THOMAS E. PEREZ, in his official

capacity as Secretary of Labor; and

MICHAEL J. HAYES, in his official capacity

as Director, Office of Labor-Management

Standards,

Defendants.

Case No. 16-CV-0844 (PJS/KMM)

ORDER

DouglasP.Seaton,ThomasR.Revnew,andTaraCraftAdams,SEATON,

PETERS&REVNEW,P.A.;EricHemmendinger,MarkJ.Swerdlin,andParkerE.

Thoeni,SHAW&ROSENTHALLLP,forplaintiffs.

ElisabethLayton,UNITEDSTATESDEPARTMENTOFJUSTICE;AnnM.

Bildtsen,

UNITED

STATES

ATTORNEYS

OFFICE,

for

defendants.

PlaintiffLabnet,Inc.(Labnet)isanassociationoflawfirmsthatrepresent

managementinlaborandemploymentmatters. Theremainingplaintiffsaremembers

ofLabnet. Plaintiffsbringthisactiontoenjointheimplementationofarulerecently

CASE 0:16-cv-00844-PJS-KMM Document 61 Filed 06/22/16 Page 1 of 34


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promulgatedbydefendantUnitedStatesDepartmentofLabor(DOL)underthe

LaborManagementReportingandDisclosureActof1959(LMRDA),29U.S.C.401

etseq.

ThismatterisbeforetheCourtonplaintiffsmotionforatemporaryrestraining

orderor,inthealternative,apreliminaryinjunctionorastay. TheCourtconcludesthat

plaintiffsarelikelytosucceedintheirclaimthatportionsofthenewruleconflictwith

theLMRDA. ButtheCourtneverthelessdeclinestoenjoinorstaythenewruleafter

weighingthe

factors

identified

by

the

Eighth

Circuit

in

DataphaseSystems,Inc.v.CL

Systems,Inc.,640F.2d109(8thCir.1981)(enbanc).

I. BACKGROUND

CongressenactedtheLMRDAtoprotectemployeesrightstoorganize,choose

theirownrepresentatives,bargaincollectively,andotherwiseengageinconcerted

activitiesfortheirmutualaidorprotection.... 29U.S.C.401(a). Tothatend,the

LMRDAimposescertaindisclosureandreportingobligationsonunionsandemployers,

aswellasonpersonswhoareretainedbyemployerstoengageinpersuaderactivities

concerningemployeescollectivebargainingrights. (Typically,suchpersonsare

lawyersorlaborrelationsconsultants.) Specifically,203(b)oftheLMRDA,29U.S.C.

433(b),provides,inrelevantpart:

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Everypersonwhopursuanttoanyagreementor

arrangementwithanemployerundertakesactivitieswhere

anobjectthereofis,directlyorindirectly

(1)topersuadeemployeestoexerciseornotto

exercise,orpersuadeemployeesastothe

mannerofexercising,therighttoorganizeand

bargaincollectivelythroughrepresentativesof

theirownchoosing....

shallfilewithinthirtydaysafterenteringintosuch

agreementorarrangementareportwiththeSecretary...

containing...adetailedstatementofthetermsand

conditionsofsuchagreementorarrangement....

Inadditiontothereportthatmustbefiledwithin30daysafterenteringintoa

persuaderagreement,consultantsmustalsofileanannualreportforanyyearinwhich

theyreceivepaymentsundersuchanagreement:

Everysuchpersonshallfileannually,withrespecttoeach

fiscalyearduringwhichpaymentsweremadeasaresultof

suchanagreementorarrangement,areportwiththe

Secretary...containingastatement(A)ofitsreceiptsofany

kindfromemployersonaccountoflaborrelationsadviceor

services,designatingthesourcesthereof,and(B)ofits

disbursementsofanykind,inconnectionwithsuchservices

andthepurposesthereof....

29U.S.C.433(b)(2). DOLinterprets203(b)torequireconsultantstoincludeintheir

annualreportsnotonlyinformationaboutemployersforwhomtheyengagedin

persuaderactivity,butalsoinformationaboutallotheremployersforwhomthey

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providedadviceorservicesconcerninglaborrelations,evenifthatadviceandthose

servicesdidnotinvolvepersuaderactivity.

Thereportingobligationin203(b)issubjecttoacrucialqualificationa

qualificationthatisthefocusofDOLsnewrule,andthusofthislawsuit. Under

203(c)oftheLMRDA,29U.S.C.433(c),themeregivingofadvicedoesnottrigger

anobligationtoreport:

Nothinginthissectionshallbeconstruedtorequireany

employerorotherpersontofileareportcoveringthe

servicesof

such

person

by

reason

of

his

giving

or

agreeing

to

giveadvicetosuchemployer....

Therearetwopossiblewaystounderstand203(c):

First,Congresscouldhaveviewedthepersuaderactivitycoveredby203(b)and

theadvicecoveredby203(c)asmutuallyexclusivecategories. Underthisview,

203(c)wouldnotbeexemptingadvicefromthereportingrequirementsof203(b);

instead,advicewouldnotbecoveredby203(b)inthefirstplace. Thisunderstanding

ofthestatutedeprives203(c)ofanyindependentforce,however. Section203(c)

wouldhavenopurpose,otherthanthebeltandsuspendersfunctionofemphasizingor

clarifyingwhatisalreadyprovidedin203(b). Inotherwords,underthis

understanding,the

elimination

of

203(c)

from

the

LMRDA

would

have

no

substantive

impactwhatsoever.

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Second,Congresscouldhaveviewedadviceasatypeofpersuaderactivity.

Underthisview,203(c)providesanexemptioni.e.,203(c)recognizesthatadvice

canbepersuaderactivityandexemptssuchadvicefromthereportingrequirements

thatwouldotherwiseapplyunder203(b). Thisunderstandingofthestatuteobviously

gives203(c)animportantfunctioninlimitingthescopeof203(b). Anddeleting

203(c)fromtheLMRDAwouldthushaveamajorsubstantiveimpact.

TheEighthCircuitlongagoadoptedthislatterunderstandingof203(c)that

is,the

understanding

that

203(c)

exempts

advice

that

is

persuader

activity

from

the

reportingrequirementsthatwouldotherwiseapplytothatadviceunder203(b). See

Donovanv.RoseLawFirm,768F.2d964,973(8thCir.1985)([W]edonotagreewiththe

Fourth,Fifth,Sixth,andSeventhCircuitsthatthelegislativehistoryoftheLMRDA

supportstheviewthat203(c)ismerelyaprovisotomakeexplicittheimplicit

triggeringrequirementof203(b).). Andforoverahalfcentury,DOLs

understandingofthestatutehasbeenthesame. DOLhasdescribed[t]hevery

purposeoftheadviceexemption(203(c))asremov[ing]from[203(b)s]coverage

certainactivitythatotherwisewouldhavebeenreportable. IntlUnion,UnitedAuto.,

Aerospace&Agric.ImplementWorkersofAm.v.Dole,869F.2d616,618(D.C.Cir.1989)

(emphasisadded). Obviously,advicecannototherwise...[be]reportableunlessitis

possibleforadvicetobepersuaderactivitycoveredby203(b).

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Indeterminingwhatpersuaderactivityconstitutesadviceandthusfalls

within203(c)sexemptionDOLhaslongappliedabrightlineacceptorrejecttest.

81Fed.Reg.15,935. So,forexample,apolicyorspeechthataconsultantprovidestoan

employerforuseinpersuadingemployeesisdeemedtobenonreportableadviceso

longastheemployerisfreetoacceptorrejecttheconsultantswork. 81Fed.

Reg.15,936. Andsince1989,DOLhastakenthepositionthat,asapracticalmatter,the

acceptorrejectstandardgenerallylimitsreportableactivitytothatwhichinvolves

directcontact

between

the

consultant

and

employees.

81

Fed.

Reg.

15,926,

15,936.

Withtheexceptionofabriefperiodin2001,DOLhasfollowedtheacceptor

rejectstandardsince1962. 81Fed.Reg.15,93536. Duringthistime,thereportingof

persuaderactivitieshasbecomeuncommon,becausepersuadersonlyrarelyhavedirect

contactwithemployees. 81Fed.Reg.15,931. Atthesametime,employershave

increasinglycometorelyonoutsideconsultantsandlawyerstohelpthemconductanti

unionizationcampaigns. 81Fed.Reg.15,931. DOLestimatesthatemployersuse

consultantstoengageinsuchindirectpersuasioninover70percentofunion

organizingcampaigns. 81Fed.Reg.15,926,15,961. AsdescribedbyDOL:

Theconsultanthasnodirectcontactwithemployees,butit

directsacampaign,

often

formulaic

in

its

design

and

implementation,fortheemployertopersuadeemployeesto

voteagainstunionrepresentation. Underthisarrangement,

theconsultantoftenscriptsthecampaign,includingdrafting

letters,flyers,leaflets,andemailsthattheemployer

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distributestoitsemployees,writingspeechesthat

managementgivestoemployeesinmandatorymeetings,

providingstatementsforsupervisorstouseinmeetingsthey

arerequiredtoholdwithemployeeswhoreporttothem,

ofteninoneononesettings,andcontrollingthetiming,

sequence,andfrequencyofeachoftheseevents.

81Fed.Reg.15,926.

Inanefforttorequiredisclosureofmoreofthisindirectpersuaderactivity,DOL

promulgatedanewruleentitledInterpretationoftheAdviceExemptioninSection203(c)

oftheLaborManagementReportingandDisclosureAct,81Fed.Reg.15,923(Mar.24,2016).1

1Theofficialcitationforthisruleis81Fed.Reg.15,923. SeeInterpretationofthe

AdviceExemptioninSection203(c)oftheLaborManagementReportingandDisclosureAct,

https://federalregister.gov/a/201606296. ToretrievetheruleinWestlaworLexis,

however,thecitationis81Fed.Reg.15,924. (Thesedatabasesapparentlydonotinclude

thetitlepage.)

Theactualtextofthenewrule,ascodifiedintheCodeofFederalRegulations,

doesnotsetforthDOLsnewinterpretationofadvice. Instead,theregulationsdirect

theuse

of

new

reporting

forms.

See

81

Fed.

Reg.

16,020

21.

Essentially,

then,

the

substanceofthenewruleisembodiedintheformsandthedirectionsthatDOL

providesaboutfillingouttheforms. TheseformsincludetheLM10(foremployersto

reportarrangementsforpersuaderactivities),theLM20(forconsultantstoreport

persuaderactivities),andtheLM21(forconsultantsannualreports).

DOLrevisedboththeLM10andtheLM20toreflectitsnewinterpretationof

thescopeofthereportingobligationunder203(b)and(c). DOLhasnotyetrevised

theLM21,however. Instead,DOLintendstoaddresstheLM21inaseparate

rulemaking,

81

Fed.

Reg.

16,000,

and

DOL

has

announced

that,

for

the

time

being,

it

willnotrequirecompliancewiththoseportionsoftheLM21thatrequirereportingof

informationrelatingtoemployersforwhomtheconsultantdidnotengageinany

persuaderactivity,seeU.S.DeptofLabor,FormLM21SpecialEnforcementPolicy

(Apr.13,2016),

(continued...)

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Thenewruledispenseswiththelongstandingacceptorrejecttest. 81Fed.

Reg.15,937. Instead,DOLnowdefinesadviceasanoralorwrittenrecommendation

regardingadecisionoracourseofconduct. 81Fed.Reg.15,939.

Moreover,DOLhasabandoneditslongstandinginterpretationoftheLMRDA

andnowinsiststhatsomethingdonebyaconsultantcannotbebothpersuaderactivity

andadvice. Asnoted,thisconflictswiththeEighthCircuitsunderstandingofthe

statute,andDOLspositionisdifficulttounderstand: If,forexample,aconsultantgives

adviceto

an

employer

about

how

to

persuade

its

employees

to

vote

against

union

representation,theconsultantisobviouslyengaginginpersuaderactivity,andthe

consultantisjustasobviouslygivingadvice. YetDOLnowinsiststhatpersuader

activityandadvicearedistinctcategorieswithnooverlap:

Advicedoesnotincludepersuaderactivities,i.e.,actions,

conduct,orcommunicationsbyaconsultantonbehalfofan

employerthatareundertakenwithanobject,directlyor

indirectly,topersuadeemployeesconcerningtheirrightsto

organizeorbargaincollectively.

81Fed.Reg.15,937.

1(...continued)

https://www.dol.gov/olms/regs/compliance/ecr/lm21_specialenforce.htm.

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DOLthenproceedsfromthispremisetoidentifyfivegeneralcategoriesof

reportableactivityi.e.,activitiesthat,inDOLsview,arepersuaderactivityand

thereforecannotpossiblybeadvice:2

(1) Aconsultantengagesindirectcontactorcommunicationwithany

employee,withanobjecttopersuadesuchemployee;or

(2) Aconsultantwhohasnodirectcontactwithemployeesundertakesthe

followingactivitieswithanobjecttopersuadeemployees:

(a) [p]lans,directs,orcoordinatesactivitiesundertakenbysupervisors

orotheremployerrepresentatives,includingmeetingsand

interactionswith

employees;

(b) providesmaterialorcommunicationstotheemployer,inoral,

written,orelectronicform,fordisseminationordistributionto

employees;

2TherevisedLM20formforreportingpersuaderactivities(whichisattachedin

anappendixtothenewrule)furtherbreaksthesecategoriesdowninto13separate

activities.

81Fed.

Reg.

16,051.

The

activities

are

(1)

drafting,

revising,

or

providing

writtenmaterialsforpresentation,dissemination,ordistributiontoemployees;

(2)drafting,revising,orprovidingaspeechforpresentationtoemployees;(3)drafting,

revising,orprovidingaudiovisualormultimediapresentationsforpresentation,

dissemination,ordistributiontoemployees;(4)drafting,revising,orprovidingwebsite

contentforemployees;(5)planningorconductingindividualemployeemeetings;

(6)planningorconductinggroupemployeemeetings;(7)trainingsupervisorsor

employerrepresentativestoconductindividualorgroupemployeemeetings;

(8)coordinatingordirectingtheactivitiesofsupervisorsoremployerrepresentatives;

(9)

establishing

or

facilitating

employee

committees;

(10)

developing

employerpersonnelpoliciesorpractices;(11)identifyingemployeesfordisciplinaryaction,

reward,orothertargeting;(12)conductingaseminarforsupervisorsoremployer

representatives;and(13)speakingwithorotherwisecommunicatingdirectlywith

employees. TheLM10formforemployerscontainsanidenticallist,exceptthatitomits

(12)(theseminaractivity). 81Fed.Reg.16,038.

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(c) conductsaseminarforsupervisorsorotheremployer

representatives;or

(d) developsorimplementspersonnelpolicies,practices,oractionsfor

theemployer.

81Fed.Reg.15,938. ThefirstcategorysimplyrestatesDOLslongstanding

interpretationthatdirectcontactwithemployeesisreportableactivity;theremaining

fourcategoriesrepresentDOLsattempttonarrowtheadviceexemptioninorderto

capturemoreindirectpersuaderactivity.

Ifaconsultant

engages

in

any

of

these

activities

with

the

requisite

intent,

then

DOLconsiderstheactivityreportable,withoutanyneedeventoaskwhetherthe

activitywouldalsoconstituteadvice. See81Fed.Reg.15,969(Theanalysishastwo

parts: (a)Didtheconsultantengageinthedirectandindirectcontactactivities

identifiedintheinstructions;and(b)didtheconsultantdosowithanobjecttopersuade

employees?);seealso81Fed.Reg.15,937(Thisrulerestoresthefocusofsection203

persuaderreportingtowhetheraconsultantsactivities...haveanobjecttopersuade

employeesabouttheirunionrepresentationandcollectivebargainingrights.).

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II. ANALYSIS

A. StandardofReview

Acourtmustconsiderfourfactorsindecidingwhethertograntapreliminary

injunctionorstaytheenforcementofaregulation:3 (1)themovantslikelihoodof

successonthemerits;(2)thethreatofirreparableharmtothemovantiftheinjunctionis

notgranted;(3)thebalancebetweenthatharmandtheinjurythatgrantingthe

injunctionwillinflictontheotherparties;and(4)thepublicinterest. SeeDataphaseSys.,

Inc.v.CLSys.,Inc.,640

F.2d

109,

114

(8th

Cir.

1981)

(en

banc).

Preliminary

injunctions

areextraordinaryremedies,andthepartyseekingsuchreliefbearstheburdenof

establishingitsentitlementtothereliefundertheDataphasefactors. SeeWatkinsInc.v.

Lewis,346F.3d841,844(8thCir.2003).

Inordinarycases,apartyseekingapreliminaryinjunctionneednotshowthatit

ismorelikelythannottosucceed;instead,apartyneedshowonlyafairchanceof

prevailingonthemerits. SeePlannedParenthoodMinn.,N.D.,S.D.v.Rounds,530F.3d

724,733(8thCir.2008)(enbanc);DataphaseSys.Inc.,640F.2dat11314. Whenaparty

seekstoenjoinastatuteorregulation,however,thepartymustestablishalikelihoodof

successonthemeritsthatis,agreaterthanfiftypercentchanceofprevailing. See

3Asplaintiffsnote,whenapartychallengesaregulationunderthe

AdministrativeProcedureAct,theappropriatereliefisnotapreliminaryinjunctionbut

ratherastay. See5U.S.C.705. Thepartiesagreethattherelevantfactorsandanalysis

arethesameineithercase.

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Rounds,530F.3dat73233&n.6. Thisstricterstandardreflectstheideathat

governmentalpoliciesimplementedthroughlegislationorregulationsdeveloped

throughpresumptivelyreasoneddemocraticprocessesareentitledtoahigherdegreeof

deferenceandshouldnotbeenjoinedlightly. Id.at732(quotingAblev.UnitedStates,

44F.3d128,131(2dCir.1995)).

B. LikelihoodofSuccess

1. CountI:ContrarytoStatute

Plaintiffschallenge

the

new

rule

under

the

Administrative

Procedure

Act

(APA),5U.S.C.706,allegingthatthenewruleiscontrarytotheplainmeaningof

203(c)oftheLMRDA. DOLhastheauthoritytoissue,amend,andrescindrulesand

regulationsthatprescribetheformandpublicationofreportsrequiredbytheLMRDA

andthatarenecessarytopreventtheevasionofthereportingrequirements. 29U.S.C.

438. Thepartiesagreethat,becauseDOLpromulgatedthenewruleunderthis

rulemakingauthority,itsinterpretationofthestatutemustbeexaminedunderChevron,

U.S.A.,Inc.v.NaturalResourcesDefenseCouncil,Inc.,467U.S.837(1984).

ThefirststepunderChevronistodeterminewhetherthestatutorylanguage

clearlyresolvestheissue. Id.at842. IfCongresssintentisclear,thentheinquiryends.

Id.at84243. Ifthestatuteissilentorambiguous,however,thenthecourtmust

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determinewhethertheagencysanswerisbasedonapermissibleconstructionofthe

statute. Id.at843.

Asageneralmatter,theCourtagreeswithDOLthatitspreviousinterpretation

of203(b)and203(c)wasunderinclusive. Inotherwords,theCourtagreesthatanact

canconstitutepersuaderactivityandnotconstituteadviceeventhoughtheactdoes

notinvolvedirectcontactwithemployees. UnderDOLslongstandinginterpretationof

theLMRDA,somepersuaderactivitythatwasreportableunder203(b),andnot

exemptunder

203(c),

nevertheless

went

unreported.

Thus,

the

Court

rejects

any

suggestionthatDOLcannotchangeitsinterpretationoftheLMRDAtorequire

reportingofpersuaderactivitythatdoesnotinvolvedirectcontactwithemployees.

TheCourtagreeswithplaintiffs,however,thatDOLsnewruleconflictswith

203(c)atleastinsomeofitsapplicationsbecauseitrequiresaconsultanttofilea

reportcoveringtheservicesofsuchpersonbyreasonofhisgivingoragreeingtogive

adviceto[an]employer.... TheproblemisnotwiththemannerinwhichDOL

formallydefinesadvice. Again,DOLnowdefinesadvicetomeananoralor

writtenrecommendationregardingadecisionoracourseofconduct,whichisa

perfectlyreasonablewaytodefinetheterm. 81Fed.Reg.15,939. Theproblemisthat

DOLdoesnotapplyitsowndefinitionofadvice. Instead,DOLrequiresreportingof

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activitythatisadviceunderanyreasonableinterpretationofthatwordincluding

DOLs.

AttherootofDOLsproblemisitsinsistencethatpersuaderactivityandadvice

aremutuallyexclusivecategories. Asalreadynoted,thisisnotwhattheEighthCircuit

believes,andthisCourthasdifficultyunderstandinghowthiscouldbetrue. Giving

adviceisunquestionablyanactivity,andthatactivitycanunquestionablybe

performedwiththeintenttoindirectlypersuadeemployeestoexerciseornotto

exercise,or

persuade

employees

as

to

the

manner

of

exercising,

the

right

to

organize

andbargaincollectivelythroughrepresentativesoftheirownchoosing.... 29U.S.C.

433(b)(1).

Inreversingapositionthatithasmaintainedforoverahalfcenturyandin

denyingtheveryexistenceofwhattheD.C.Circuitdescribedastheoverlaparea,

InternationalUnion,869F.2dat618DOLhaspainteditselfintoacorner. Bystarting

withthepremisethat,ifsomethingispersuaderactivity,itcannotpossiblybeadvice,

DOLendsupstrugglingmightilytodefineasnonadviceactivitythatanyreasonable

personwoulddefineasadvice. Andinthecourseofthatstruggle,DOLendsup

drawinglinesthataresimplyincoherent.

Take,forexample,ahypotheticalthattheCourtposedtoDOLatthehearingon

plaintiffsmotion: Alawyerwritesthefollowinglettertoaclient: Iadviseyouto

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incoherenceofthepositionthatshewassenttodefend. Itisdifficulttounderstand

whyitwouldmatterwhether,inalettertoanemployer,aconsultantsays:

! Iadviseyoutogiveyouremployeesaonehourpaidlunchbreakin

ordertopersuadethemnottounionize.

! Iadviseyoutoadoptthefollowingpolicyinordertopersuadeyour

employeesnottounionize: Effectiveimmediately,employeeswillbe

givenaonehourpaidlunchbreak.

! Iadviseyoutoadopttheattachedpolicyinordertopersuadeyour

employeesnottounionize. (Theattachmentisasheetofpaperthat

reads: Effectiveimmediately,employeeswillbegivenaonehourpaid

lunchbreak.)

Inallthreecases,thelawyerisbothgivingadvice(asanyreasonableperson

woulddefinethatterm)andengaginginpersuaderactivity. YetDOLwoulddeemthe

firstlettertoconstitute(only)nonreportableadviceandthethirdlettertoconstitute

(only)reportablepersuaderactivityandtheCourtdoesnotknowwhatDOLwould

thinkofthesecondletter.

TheCourtandDOLsattorneyhadsimilardifficultyfiguringouthowDOLs

newinterpretationof203(c)wouldapplyinothercontexts. Forexample,DOLs

attorneysuggested(withoutbeingquitesure)thatitwouldbereportablepersuader

activityandthereforenotadvicetoadviseaclienttodistributeaflyertoemployees

statingthattheclientsindustryiscurrentlyinarecessionandthatunionizedfirmstend

tofailatafasterratethannonunionizedfirms. HrgTr.52. TheCourtcannot

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understandhowthisscenarioisdistinguishableinanymaterialwayfromadvisinga

clienttoadoptamoregenerouslunchpolicy,whichDOLadmitsisnonreportable

advice.

Likewise,DOLhadtroubleexplainingwhenandwhyrevisinganemployer

drafteddocumentisreportableunderitsinterpretationof203(c). HrgTr.5759.

Supposethatanemployerasksitsattorneytoeditadraftofamemorandumthatthe

employerintendstosendtoitsemployeestopersuadethemnotunionize. Ifthe

attorneycorrects

spelling

errors,

has

the

attorney

engaged

in

reportable

persuader

activity? Whatiftheattorneycorrectsgrammaticalmistakes? Suggestsreplacing

passiveverbswithactiveverbs,sothatthedocumentwillbemorepersuasive?

Suggestsafontthatiseasierontheeyes,sothatemployeeswillbemorelikelytoread

thedocument? Suggestsinsertingonewordinonesentence? Suggestsinsertingafew

wordsinafewsentences? Suggestsinsertingafewsentences? Itseemsprettyclearthat

DOLconsiderscorrectingspellingerrorstobenonreportableadvice,andadding

wordsorsentencestobereportablepersuaderactivity,butitisnotatallclearhowDOL

comestothisconclusion.

DOLcontendsthatitsinterpretationof203(c)issoundnotwithstandingthefact

thatithasdifficultyapplyingthatinterpretationtocertainhypotheticalscenarios. But

theCourtsquestionsdidnotinvolveexoticscenariosoroutliercases;theCourtasked

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DOLaboutthesortofbreadandbutterworkthatlawyersperformforclientsevery

singleday. DOLsdifficultyansweringtheCourtsquestionsreflectsnottheinevitable

ambiguitiesthatarisewhenapplyingareasonablyclearprincipletomarginalcases,but

rathertheuntenabilityofDOLscentralpositionthatpersuaderactivitycanneverbe

advice,andadvicecanneverbepersuaderactivity.

Proceedingfromthatflawedpremise,DOLcategorizesconductthatclearly

constitutesadviceasreportablepersuaderactivity. Forexample,alawyerwhomerely

advisesaclient

to

adopt

anew

policyor

merely

advises

aclient

to

add

asentence

to

a

memorandumtoitsemployeeshasdoneonethingandonethingonly: giventhe

clientadvice. Under203(c),thegivingofadvicetoanemployercannot,byitself,

triggerthereportingrequirement. ButunderDOLsnewinterpretation,thegivingof

whatanyreasonablepersonwoulddefineasadvicedoes,byitself,triggerthe

reportingrequirement. TheCourtthereforeconcludesthatplaintiffshaveastrong

likelihoodofsuccessontheirclaimthatthenewruleconflictswiththeplainlanguage

ofthestatute.4

4

Plaintiffs

also

contend

that

the

new

rule

requires

attorneys

to

discloseconfidentialinformationandthereforeconflictswith29U.S.C.434. Forthereasons

explainedatthehearing,however,theCourtinterprets434toapplyonlyto

informationprotectedbytheattorneyclientprivilege(ratherthantoallinformation

thatcouldbeconsideredconfidential),andtheCourtdoesnotagreethatthenewrule

requiresthedisclosureofprivilegedinformation. HrgTr.1424.

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TheCourtemphasizesthatitdoesnotholdthatthewordadvicein203(c)is

clearinallofitsapplicationsandthusthatthereisnoroomforDOLtoengagein

interpretation. Rather,theCourtholdsthatthewordadviceisclearinsomeofits

applicationsi.e.,thattherearecertainactivities(suchasadvisingaclienttoadda

sentencetoamemorandum)thatinvolvethegivingofadviceunderanyreasonable

interpretationofthewordandthatDOLsnewregulationconflictswith203(c)

becauseitrequiressomeofthoseactivitiestobereported.

2.

CountII:

First

Amendment

Plaintiffsnextcontendthatthenewruletargetsantiunionspeechandtherefore

unconstitutionallydiscriminatesonthebasisofviewpointandcontent. SeeReedv.Town

ofGilbert,Ariz.,135S.Ct.2218,222930(2015)(describingthedistinctionbetween

contentandviewpointdiscrimination). TheCourtdisagrees.

Theruledoesnotdiscriminatebasedonviewpoint;instead,theruleappliesto

bothpro andantiunionspeech,asdoestheLMRDAitself. LiketheLMRDA,therule

requiresreportingofactivitiesthathaveasanobjecttopersuadeemployeestoexercise

ornottoexercise,orpersuadeemployeesastothemannerofexercising,therightto

organizeandbargaincollectivelythroughrepresentativesoftheirownchoosing....

29U.S.C.433(b)(1);81Fed.Reg.16,038(LM10trackingstatutorylanguage);81Fed.

Reg.16,051(LM20trackingstatutorylanguage). IftheLMRDAitselfdoesnot

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unconstitutionallydiscriminateonthebasisofviewpointandplaintiffscomplaint

doesnotallegethatitdoesthenplaintiffsareunlikelytobeabletoestablishthatthe

newruleunconstitutionallydiscriminatesonthebasisofviewpoint.

Plaintiffspointtothediscussionofantiunionactivitiesinthepreambletothe

ruleasproofthattherulediscriminatesonthebasisofviewpoint. Butthecontention

thatastatuteisviewpointbasedsimplybecauseitsenactmentwasmotivatedbythe

conductofthepartisansononesideofadebateiswithoutsupport. Hillv.Colorado,

530U.S.

703,

724

(2000);

seealsoPhelpsRoperv.Nixon,

545

F.3d

685,

691

(8th

Cir.

2008)

(Theplainmeaningofthetextcontrols,andthelegislaturesspecificmotivationfor

passingalawisnotrelevant,solongastheprovisionisneutralonitsface.),overruled

onothergroundsbyPhelpsRoperv.CityofManchester,Mo.,697F.3d678(8thCir.2012)(en

banc). Thenewruledoesnot,therefore,regulateonthebasisofviewpoint.

Plaintiffsarecorrect,however,thatthenewruleliketheLMRDA

itselfregulatesonthebasisofcontent. SeeReed,135S.Ct.at2230(aspeech

regulationtargetedatspecificsubjectmatteriscontentbasedevenifitdoesnot

discriminateamongviewpointswithinthatsubjectmatter). Butitdoesnotfollowthat

thenewrule(ortheLMRDA5)mustwithstandstrictscrutiny. Instead,becausethenew

5PlaintiffshavenotallegedthattheLMRDAisunconstitutional. IftheLMRDAis

aconstitutionalcontentbasedstatute,thenthenewruleislikelyaconstitutional

contentbasedregulation.

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ruleimposesdisclosureobligations,itissubjecttotheexactingscrutinystandard. See

CitizensUnitedv.Fed.Elec.Commn,558U.S.310,36667(2010)(applyingexacting

scrutinytodisclosurerules);Minn.CitizensConcernedforLife,Inc.v.Swanson,692F.3d

864,87475(8thCir.2012)(enbanc)(althoughlawsthatburdenpoliticalspeechare

ordinarilysubjecttostrictscrutiny,disclosurelawsareinsteadsubjecttoexacting

scrutiny).6 Underthisstandard,theremustbeasubstantialrelationbetweenthe

disclosurerequirementandasufficientlyimportantgovernmentalinterest. Citizens

United,558

U.S.

at

366

67.

Applyingexactingscrutiny,courtshaveuphelddisclosurerequirements

imposedonelectionrelatedcontributionsandexpenditures. Id.;Buckleyv.Valeo,424

U.S.1,6061(1976). Plaintiffscontendthatthiscaseisdistinguishablefromelection

casesbecausethegovernmentalinteresthereisweaker. Inelectioncases,thereisa

stronginterestinknowingwhohascontributedtoacandidate,becausethecandidate

maybebeholdentothosecontributors. Andthereisastronginterestinknowingwho

isbehindanadvertisementorotherdirectcontactwithvoters. Inthiscase,plaintiffs

say,thereisnosimilarinterestindisclosingtheidentityofconsultants. Employerspay

consultantsfortheirservices,andthusarenotbeholdentotheminthewaythatelected

6Plaintiffsargumentthatstrictscrutinyappliestodisclosurerequirementsthat

arecontentbasedisplainlyincorrect;theSupremeCourthasappliedexactingscrutiny

todisclosurelawsthatareexplicitlycontentbased. SeeCitizensUnited,558U.S.at366

67(upholdingdisclosurelawaimedatelectioneeringcommunications).

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officialsarebeholdentocontributors. Andconsultantshavenodirectcontactwith

employees;anemployerwhospeakstoitsemployeesisspeakingonitsownbehalf

(evenifaconsultantdraftedthespeech),justasacandidateforofficeisspeakingonhis

orherownbehalf(evenifacampaignaidedraftedthespeech).

Inupholdingdisclosurerequirementsregardingelections,however,theSupreme

Courthasnottakensuchalimitedviewofthegovernmentinterestsatstake. In

additiontorecognizingthevalueofdeterringcorruptionandprovidingvoterswith

informationabout

third

parties

to

whom

acandidate

might

be

beholden,

the

Supreme

Courthasalsorecognizedthatidentifyingthesourceoffundsallowsvoterstoplace

eachcandidateinthepoliticalspectrummorepreciselythanisoftenpossiblesolelyon

thebasisofpartylabelsandcampaignspeeches. Buckley,424U.S.at67;seealsoid.at81

(Thecorruptionpotentialofthese[independent]expendituresmaybesignificantly

different,buttheinformationalinterestcanbeasstrongasitisincoordinatedspending,

fordisclosurehelpsvoterstodefinemoreofthecandidatesconstituencies.). Beyond

that,theSupremeCourthasrecognizedtheinterestofshareholdersinevaluating

whethertheircorporationspoliticalspeechadvancesthecorporationsinterestin

makingprofits.... CitizensUnited,558U.S.at370.

Inotherwords,disclosureisvaluablenotsimplybecauseitdeterscorruption,

butalsobecauseitprovidesinformationabouttheviewsofcandidatessupporters,

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whichinturnprovidesafullercontextforunderstandingtheviewsofthecandidates

themselves. Further,thegovernmentalinterestindisclosureextendsbeyondthe

politicalarena;disclosureisalsovaluableinenablingshareholderstoexercisetheir

rightsasstakeholdersinabusinessthatmakespoliticalcontributions.

Theinterestshereareanalogous. Asthegovernmentargues,employeesare

betterequippedtoassessanemployersunionrelatedmessageiftheyknowthatthe

messagehasbeenscriptedbyathirdparty. Forexample,employerscommonlyargue

thata

union

is

athird

party

that

employees

do

not

need

to

further

their

interests,

81

Fed.Reg.15,932,andthattheemployerlacksthefinancialresourcestodealwitha

union,81Fed.Reg.15,92627. Knowingthatmessagesfromanemployeroriginated

withathirdpartywhowaspaidbytheemployertohelpinfluencetheemployeesgives

thoseemployeesafullercontextinwhichtoevaluatetheemployersarguments. Such

transparencyenablestheelectoratetomakeinformeddecisionsandgiveproper

weighttodifferentspeakersandmessages. CitizensUnited,558U.S.at371;cf.

Humphreys,Hutcheson&Moseleyv.Donovan,755F.2d1211,1215(6thCir.1985)(rejecting

argumentthatdisclosureofdirectcontactpersuaderactivitywasnotrequiredwhere

identityofpersuaderwasalreadymadeknowntoemployees).

Forthesereasons,plaintiffshavefailedtoestablishthattheyarelikelytosucceed

ontheirFirstAmendmentclaims.

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3. CountIII:VoidforVagueness

Plaintiffsnextcontendthatthenewruleisvoidforvagueness. SeeFCCv.Fox

TelevisionStations,132S.Ct.2307,2317(2012)(lawsmustbesufficientlyclearsoasto

provideregulatedpartiesnoticeoftheirobligationsandpreventarbitraryand

discriminatoryenforcement). Again,theCourtdisagrees.

TheCourthasfoundthataspectsofthenewrulearelikelyinvalidbecausethey

requirethereportingofadvicethatisexemptfromdisclosureunder203(c). TheCourt

hasalso

questioned

the

manner

in

which

DOL

has

construed

the

term

advice,

pointingoutthatDOLmakesdistinctionsbetweenactivitiesthatarematerially

indistinguishableandstrugglestoplacecertaincommonactivitiesononesideorthe

otheroftheuntenabledividethatithascreatedbetweenpersuaderactivitiesand

advice. ButtheCourtscriticismshouldnotbeconfusedwithafindingthattherule

itselfisimpermissiblyvague.

Tothecontrary,theapplicationofthenewruleappearsratherstraightforward.

Asexplainedabove,theruleisessentiallyembodiedintherevisedLM10andLM20

formsandtheircorrespondinginstructions. Theformsaskfilerstoindicatewhether

anyactivitieswereundertakenwiththerequisiteintent,andthenprovideadetailedlist

ofthirteendifferentactivitiesfromwhichtochoose. Thedescriptionsoftheactivities

arefairlyconcreteandeasytounderstand. Fillingouttheformissimplyamatterof

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checkingtheboxnexttotheactivityoractivitiesthatthefilerperformed(or,ifthefiler

isanemployer,contractedfor)withtherequisiteintent.

PlaintiffscontendthattheruleisneverthelessvaguebecauseDOLprovideslittle

guidanceindeterminingwhenanactivityisperformedwiththerequisiteintentto

persuade. Butaregulationisnotvaguebecauseitmayattimesbedifficulttoprovean

incriminatingfact;rather,aregulationisvaguewhenitisunclearastowhatfactmust

beproved. Id. Here,itisclearwhatfactmustbeproved: thefilersmentalstate. Cf.

MasterPrintersofAm.v.Donovan,751

F.2d

700,

711

(4th

Cir.

1984)

(rejecting

vagueness

challengetoLMRDAbecausethewordpersuadeissufficientlyclear).

PlaintiffsfaultDOLforsayingthatwhethersuchanintentionwillbefound

dependsonallofthesurroundingfactsandcircumstances. Thatis,however,simply

anotherwayofsayingthatitmayattimesbedifficulttoproveanincriminating

fact.... Legalconsequencesoftenturnonsubjectiveintent,anddecidingwhetherthe

requisiteintentwaspresentalmostalwaysturnsonananalysisofthesurroundingfacts

andcircumstances. Forexample,manycriminallawsrequireproofofamentalstate

that,intheabstract,soundsquitevague. See,e.g.,21U.S.C.841(a)(1)(proscribing

possessionofcontrolledsubstanceswithintenttodistribute);seealsoUnitedStatesv.

Williams,553U.S.285,304306(2008)(rejectingvaguenesschallengetolawproscribing

thepanderingofmaterialinamannerthatreflectsthebelief,orthatisintendedto

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causeanothertobelievethatitischildpornography). Thisdoesnotmeanthatthose

lawsarevoidforvagueness. SeeWilliams,553U.S.at304(perfectclarityandprecise

guidancehaveneverbeenrequiredevenofregulationsthatrestrictexpressiveactivity

(citationandquotationsomitted)).

Insum,theCourtfindsthatplaintiffsareunlikelytosucceedininvalidatingthe

newruleonvaguenessgrounds.

4. CountIV:ArbitraryandCapricious

Plaintiffsnext

challenge

the

new

rule

as

arbitrary

and

capricious.

See

5U.S.C.

706(2)(A). Inparticular,plaintiffscontendthatDOLdidnotconsiderallrelevantdata

becausetheagencydidnotconductanyofitsownresearchbeforeadoptingthenew

rule. Instead,DOLreliedontheresearchofthirdparties,andDOLconsidered

approximately9,000commentsontheproposedrule. 81Fed.Reg.15,931,15,945,

15,962.

Plaintiffsdonotciteanyauthorityforthepropositionthatagenciesarerequired

toconducttheirownresearchratherthanrelyonthirdpartyresearch. Instead,

plaintiffsmerelydisagreewiththeweightthatDOLchosetogivetothirdparty

research. TheAPAdoesnotauthorizeaCourttosubstituteitsjudgmentforthatofthe

agency,however. SeeFCCv.FoxTelevisionStations,Inc.,556U.S.502,51314(2009).

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Plaintiffsarenotlikelytosucceedinestablishingthatthenewruleisarbitraryor

capricious.

5. CountV:Overbroad

Plaintiffsnextchallengeasoverbroadtheannualreportingobligationestablished

bytheLM21. UnliketheLM20,theLM21goesbeyondrequiringdisclosures

concerningpersuaderactivities;itrequiresconsultantstoreportallreceiptsfromall

clientsinconnectionwithalllaborrelationsadviceandservices,regardlessofwhether

theadvice

or

services

were

for

the

purpose

of

persuading

employees.

In

other

words,

if

aconsultantengagesinpersuaderactivitiesforoneclient,theLM21requiresthe

consultanttoreportonallclientsforwhomitprovidedanytypeoflaborrelations

adviceorservicesevenclientsforwhomitdidnotperformanypersuaderactivities.

InDonovanv.RoseLawFirm,768F.2d964(8thCir.1985),theEighthCircuit

rejectedDOLsattempttoenforcecompliancewiththesebroadreportingrequirements,

findingitextraordinarilyunlikelythatCongressintendedconsultantstohaveto

reportactivitiesonbehalfofemployerswhowerenotthemselvesrequiredtomakeany

reportundertheLMRDA. Id.at975. AstheEighthCircuitnoted,however,fourother

circuitshadpreviouslyupheldDOLsbroadviewoftheLM21reportingrequirements.

Id.at967. SofarastheCourtisaware,thiscircuitsplitpersiststothisday.

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RelyingonRoseLawFirm,plaintiffsarguethat,eveniftheyarerequiredto

complywiththerestofthenewrule,theyshouldnotberequiredtocomplywiththe

expansiveLM21reportingrequirements. TheCourtneednotaddressplaintiffsclaim

atthistime,however. Asnotedabove,DOLhasissuedaSpecialEnforcementPolicy

underwhichitwillnotrequirecompliancewiththoseportionsoftheLM21that

requirereportingofinformationregardingemployersforwhomtheconsultantdidnot

engageinanypersuaderactivity. Asaresult,evenifplaintiffseventuallysucceedon

theirclaim

(which

seems

likely

in

light

of

RoseLawFirm),

plaintiffs

are

not

currently

facinganythreatofirreparableharm.

6. CountVI:RegulatoryFlexibilityAct

Finally,plaintiffsallegethatDOLviolatedtheRegulatoryFlexibilityAct

(RFA),5U.S.C.601etseq. TheRFArequiresagenciestoprepareaninitialandthen

afinalregulatoryflexibilityanalysisdescribingtheimpactofaproposedruleonsmall

entities. 5U.S.C.603,604. Iftheagencycertifiesthattherulewillnothavea

significantimpactonasubstantialnumberofsmallentities,theagencyneednot

performthisanalysis. 5U.S.C.605(b). Asmallentitythatisadverselyaffectedbya

rulemaybringanactionundertheAPAforjudicialreviewoftheagencyscompliance

withtheRFA. 5U.S.C.611(a)(1).

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DOLcertifiedthatthenewrulewillnothaveasignificanteconomicimpactona

substantialnumberofsmallentities. 81Fed.Reg.16,015. Plaintiffs(whoallegethat

theyaresmallentitieswithinthemeaningoftheRFA)contendthatDOLscertification

isarbitraryandcapriciousbecauseDOLsfindingconflictswiththepublishedanalysis

ofathirdpartyandbecauseDOLfailedtoaccountforthecostoffilingtheLM21.

TheD.C.CircuitrecentlyexplainedtheinteractionbetweentheAPAsarbitrary

andcapriciousstandardandtheRFA:

TheAPAs

arbitrary

and

capricious

standard

requires

that

agencyrulesbereasonableandreasonablyexplained.

UnderStateFarm,wemustassess,amongotherthings,

whethertheagencydecisionwasbasedonconsiderationof

therelevantfactors.MotorVehicleMfrs.Assn,Inc.v.State

FarmMut.Auto.Ins.Co.,463U.S.29,43,103S.Ct.2856,77L.

Ed.2d443(1983)(internalquotationmarksomitted). The

RegulatoryFlexibilityActmakestheinterestsofsmall

businessesarelevantfactorforcertainrules. Therefore,

theAPAtogetherwiththeRegulatoryFlexibilityActrequire

thatarulesimpactonsmallbusinessesbereasonableand

reasonablyexplained. Aregulatoryflexibilityanalysisis,for

APApurposes,partofanagencysexplanationforitsrule.

SeeSmallRefinerLeadPhaseDownTaskForcev.EPA,705F.2d

506,539(D.C.Cir.1983)(areviewingcourtshouldconsider

theregulatoryflexibilityanalysisaspartofitsoverall

judgmentwhetheraruleisreasonable);seealsoThompsonv.

Clark,741F.2d401,405(D.C.Cir.1984)(Thus,ifdatainthe

regulatoryflexibilityanalysisordataanywhereelseinthe

rulemakingrecorddemonstrates

that

the

rule

constitutes

suchanunreasonableassessmentofsocialcostsandbenefits

astobearbitraryandcapricious,therulecannotstand.)

(citationomitted).

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NatlTel.CoopAssnv.FCC,563F.3d536,54041(D.C.Cir.2009).Judicialreviewunder

thisstandardisnarrowandhighlydeferential. Id.at541.

Underthisdeferentialstandard,theCourtcannotfindthatplaintiffsarelikelyto

succeedindemonstratingthattheruleissuchanunreasonableassessmentofsocial

costsandbenefitsastobearbitraryandcapricious.... Plaintiffsrelyalmostentirely

onanarticleinwhichtheauthorDianaFurchtgottRoth,theformerchiefeconomistof

DOLcontendsthatthecostofcomplyingwiththenewrulecouldreach$7.5to

$10.6billion

in

the

first

year

and

$4.3

to

$6.5

billion

per

year

thereafter.

TheCourtisnotinapositiontoengageinadetailedanalysisoftheassumptions

behindtheseconclusions,butsufficeittosaythatmanyofthoseassumptionsseem

problematic. Forexample,FurchtgottRothmakesassumptionsaboutthenumberof

employerswhoreceiveatleast$2,500worthoflegaladvice(apparentlyofanykind)

andthenassumesthateveryoneofthoseemployerswillincurcompliancecostsatan

hourlyrateof$104.33everyyearwhetherornottheyfaceaunionizationdrive.

Assumingthateveryemployerwhoreceivesanykindoflegaladvicewillincur

LMRDAcompliancecostsappearsatoddswiththelimitedscopeoftheLMRDA,which

appliesonlytoemployerswhoengageconsultantstohelppersuadeemployees

regardingtheirunionizationrights. FurchtgottRothalsoassumesthatlawfirmsand

consultingfirmswilleachspendatotalof200hoursfamiliarizingthemselveswith

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LM20andLM21inthefirstyearand50hoursperyearthereafter. Theseestimates

striketheCourtashighlyinflated. Inshort,theanalysisinthearticledoesnotconvince

theCourtthatplaintiffsarelikelytosucceedinshowingthatDOLsRFAanalysiswas

arbitraryandcapricious.

Finally,totheextentthatplaintiffsarefaultingDOLforfailingtoaccountforthe

costoffilingtheLM21,theirchallengeisprematurebecausetheLM21willbethe

subjectofaseparaterulemaking. 81Fed.Reg.16,000;seeNatlTel.CoopAssn,563F.3d

at541

42

(agency

could

permissibly

postpone

consideration

of

certain

costs

that

would

beassociatedwithaseparaterulemaking).

C. IrreparableHarm

Plaintiffshaveshownalikelihoodofsuccessononeoftheirclaimsspecifically,

theirclaimthatthenewrulerequiresthereportingofsomeactivitiesthatareexempt

fromdisclosureunder203(c). Plaintiffsonlyclaimofirreparableharm,however,is

thattheywillbeforcedtoguessaboutwhatactivityisrequiredtobereported,withan

incorrectguesscarryingcriminalpenalties. See29U.S.C.439. ButtheCourthas

foundthatplaintiffsareunlikelytosucceedinestablishingthattheruleisvoidfor

vagueness. Moreover,criminalpenaltiesdonotattachunlesstheviolationiswillful,

meaningthatitwascommittedinknowingorrecklessdisregardofthelaw. 29U.S.C.

439(a);UnitedStatesv.Briscoe,65F.3d576,587(7thCir.1995). Theexistenceofa

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scienterrequirementhelpstomitigateanyproblemswithvagueness. Hillv.Colorado,

530U.S.703,732(2000).

Evenifplaintiffshadmadeastrongershowingofvagueness,theyhaveoffered

littleinthewayofevidencethattheyarelikelytosufferirreparableharm. Essentially,

theirevidenceislimitedtoastatementintheircomplaintsupportedbyanaffidavit

attestingthatthestatementistruethattheyintendtocontinueadvisingtheirclientsin

waysthatarelikelytotriggerthereportingrequirement. Compl.36. TheCourt

assumes,for

the

sake

of

argument,

that

this

is

an

assertion

that

plaintiffs

plan

to

engage

inactivitiesthatwillhavetobereportedunderthenewruleeventhoughthose

activitiesconstituteadvicethatisexemptedfromdisclosureunder203(c).

Nevertheless,plaintiffshavenotmadeaparticularlycompellingshowingofirreparable

harm. TheyhavenotshownthattheirFirstAmendmentrightswillbeviolated,northat

theywillbeforcedtoviolatetheattorneyclientprivilege,northattheywillbeforcedto

violatetherulesofprofessionalconduct. Theyalsohavenotshownthattheywillhave

toidentifyclientsforwhomtheyhavenotengagedinanypersuaderactivities;DOLhas

suspendedtheenforcementofthatportionoftheLM21.

Atworst,plaintiffsarefacedwiththeprospectoffillingoutsomeformsthatthey

shouldbeexemptfromhavingtofilloutunder203(c). Eventhatharmisuncertain,

however,giventhatplaintiffshavenotdescribedwithanyspecificitytheactivitiesin

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whichtheyintendtoengage. Inshort,plaintiffsshowingofirreparableharmisboth

minimalandspeculative.

D. BalanceofHarmsandthePublicInterest

Thereisinherentharminenjoininganagencyfromenforcingaregulationthat

hasbeenpromulgatedpursuanttoauthoritydelegatedfromCongress. Althoughthe

Courthasfoundthatthenewruleislikelyinvalidinsomerespects,plaintiffsminimal

showingofathreatofirreparableharmisnotsufficienttowarranttheextraordinary

reliefof

apreliminary

injunction.

This

is

especially

true

because

the

rule

plainly

has

multiplevalidapplications;asnoted,DOLhasidentifiedthirteentypesofconductto

whichtheruleapplies,onlysomeofwhichseemtorequirethereportingofadvicethat

isexemptunder203(c). Anorderstayingenforcementoftheentirerulewould

thereforepreventDOLfromrequiringdisclosureofinformationthatithastheright

(indeed,astatutorymandate)toobtain.

Underthecircumstanceswhenplaintiffshavelaunchedafacialchallengetoa

newregulation,whenitappearsthattheregulationspotentiallyvalidapplicationsmay

outnumberitspotentiallyinvalidones,andwhenthereisonlyaminimalthreatof

irreparableharmtheCourtconcludesthatitispreferabletolettheregulationtake

effectandleaveplaintiffstoraisetheirargumentsinthecontextofactualenforcement

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actions. TheCourtthereforedeniesplaintiffsmotionforapreliminaryinjunctionor

stay.

ORDER

Basedontheforegoing,andonallofthefiles,records,andproceedingsherein,

ITISHEREBYORDEREDTHATplaintiffsmotionforatemporaryrestrainingorder,

or,inthealternative,forapreliminaryinjunctionorstay[ECFNo.13]isDENIED.

LETJUDGMENTBEENTEREDACCORDINGLY.

Dated:June

22,

2016 s/Patrick

J.

Schiltz

PatrickJ.Schiltz

UnitedStatesDistrictJudge

34


Labnet v. DOL Persuader PI Opinion

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