Volume 110

Honesty in Reason: How Department of Commerce v. New York Began to Tackle the Problem of Regulatory Dishonesty

by Hannah M. Flesch

Imagine that you are a small business owner who has just received word that the Department of Labor proposed a new rule increasing the current minimum wage at all businesses from $7.25 per hour to $20 per hour. Understandably concerned about what this means for your business, you read the proposed rule, look-ing for information about why the Department of Labor made this drastic change. You find that the Department of Labor has primarily cited concerns over rising costs of living and the increasing wealth gap in the United States. Though you are sympathetic to these policy reasons, you disagree with this top-down approach. You contact other small business owners in your community, all of whom are similarly concerned. Together, you draft a response and submit a comment to the Department of Labor about why this new minimum wage standard, in your opinion, will not address the rising costs of living or the wealth gap and will, in the end, hurt small businesses. 

Several months later, the Department of Labor finalizes its minimum wage standard to $20 per hour. Litigation ensues, and through this process, it is discovered that the Department of Labor increased the minimum wage due to pressure from Silicon Valley. In fact, Silicon Valley executives met with appointees in the Department of Labor months before the proposed rule. You find out that these executives pushed for a high minimum wage in order to squeeze out small businesses like yours. 

The scenario described above may sound implausible, but it is not. In Department of Commerce v. New York, the Supreme Court heard a challenge to a decision by the Commerce Department to put a citizenship question on the 2020 decennial census. Footnote #1 content: 139 S. Ct. 2551, 2561 (2019).   Like a decision to increase the minimum wage, the decision to ask for one’s citizenship on the census was not the central problem. The problem was that the Commerce Department misrepresented the reasons for adding the citizenship question. But did this misrepresentation violate the Administrative Procedure Act (APA)? Footnote #2 content: 5 U.S.C. § 706(2).   In Department of Commerce, the Court suggested yes, but it is not all that clear. 

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