Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas has decided that he will not halt the lawsuit challenging the U.S. DOL’s new overtime exemption rules pending a ruling from the 5th Circuit Court of Appeals on his earlier order temporarily blocking the rules from taking effect.
Here’s a quick recap of where things stand and what this means:
On November 22, the District Court granted a nationwide preliminary injunction blocking the rules from taking effect on December 1. This was not a final ruling in the case, but in order to grant the injunction, Judge Mazzant had to find that the states and business groups challenging the rules had a “substantial likelihood of success on the merits of their claims.”
On December 1, the DOL appealed the District Court’s ruling to the 5th Circuit Court of Appeals. Briefing in that appeal is scheduled to be completed by the end of January, with oral argument shortly thereafter. Assuming, that is, that the Trump Administration doesn’t direct the DOL to withdraw the appeal upon taking office. If that happens, the AFL-CIO could step in to defend the rules if the court grants its motion to intervene.
Because the ruling on appeal was not a final judgment in the case, the default rule is for the lawsuit to move forward in the District Court even while the preliminary injunction is being challenged on appeal. However, the District Court has discretion to stay the lawsuit until the Court of Appeals rules. The DOL asked the District Court to do just that, hoping that it might fare better in the Court of Appeals than it did in the preliminary injunction ruling. Judge Mazzant rejected that motion, finding that the DOL’s motion failed “present a substantial case on the merits” demonstrating that the preliminary injunction was improperly issued. Once again, this is not a final ruling on the merits, but like the initial ruling on the motion for preliminary injunction, it does seem to signal that the judge does not think highly of the Department of Labor’s position in defense of the new overtime rules.
So now what? The District Court could issue its final ruling on the merits of the lawsuit at any time. If it does so before the 5th Circuit rules on the motion for preliminary injunction, it may re-start the appeal process. Of course, the Trump administration may direct the DOL to withdraw its defense of the new rules before the courts decide the issue (and the court could deny the AFL-CIO’s motion to intervene), or Congress may short-circuit the whole process by taking action to block the rules. In short, not much has changed since before the holidays.