Plaintiff-Appellants Duke Bradford, Arkansas Valley Adventure (AVA), and the Colorado River Outfitters Association (CROA) sued Defendant-Appellees U.S. Department of Labor (DOL) and various federal officials in the U.S. District Court for the District of Colorado, raising claims that the DOL’s minimum wage rule for federal contractors exceeded its statutory authority under the Federal Property and Administrative Services Act (FPASA) and was arbitrary and capricious. The district court denied Plaintiffs’ motion for a preliminary injunction, concluding that Plaintiffs were unlikely to succeed on the merits of their claims. Plaintiffs appealed the decision to the U.S. Court of Appeals for the Tenth Circuit.
Factual Overview
Duke Bradford owns and operates Arkansas Valley Adventure (AVA), which provides guided outdoor excursions in Colorado, some of which take place on federal land pursuant to permits from the Bureau of Land Management (BLM) and the U.S. Forest Service (USFS). CROA is a trade association representing approximately fifty river-guide outfitters, including AVA, most of which operate on federal lands under special use permits.
In 2021, President Biden issued Executive Order (EO) 14,026, which raised the minimum wage for federal contractors to $15 per hour and rescinded a previous exemption for recreational services outfitters. The DOL promulgated a rule implementing the executive order, clarifying that it applied to special use permits issued by various federal agencies to outfitters like AVA and CROA members.
Legal Analysis
I. Statutory Authority under FPASA: The court held that Plaintiffs were unlikely to succeed in showing that the DOL’s rule was issued without statutory authority. The court found that FPASA likely authorizes the minimum wage rule because it permissibly regulates the supply of nonpersonal services and advances the statutory objectives of economy and efficiency.
II. Arbitrary and Capricious Challenge: The court also held that Plaintiffs were unlikely to succeed in showing that the DOL’s rule is arbitrary and capricious. The court found that the DOL provided a reasoned explanation for rescinding the exemption for recreational services outfitters and addressed the potential economic impact of the rule.
Dissenting Opinion: Judge Eid dissented, arguing that the FPASA violates the nondelegation doctrine by granting the President nearly unfettered power to create policies he considers necessary under the guise of economy and efficiency, without requiring any preliminary factfinding or providing a standard that sufficiently guides his discretion.
The Tenth Circuit ultimately affirmed the district court’s order denying Plaintiffs’ motion for a preliminary injunction.
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