Batterton v. Marshall

Under the federal Comprehensive Employment and Training Act (CETA), the Department of Labor (DOL) (defendant) administered federal funds to state and local government entities offering training and other services to boost employment. In part, the funds were distributed geographically based on a formula using local unemployment levels. Unemployment levels were to be determined by a department in the DOL. Historically, the DOL generated unemployment data using a process known as the handbook method, which drew on insurance data from state employment-security agencies. However, after CETA was enacted in 1973, the DOL shifted to a new method that relied on a federal survey regarding labor-force statistics. Further, in 1975, the DOL notified the State of Maryland (plaintiff) that a new procedure would be used to calculate Maryland’s unemployment levels. Maryland believed the new procedure would significantly decrease its share of CETA funds. Maryland sued the DOL, arguing, among other things, that the DOL violated the Administrative Procedure Act (APA) by engaging in rulemaking without providing the requisite notice and opportunity for public comment. The DOL argued that changing the method for calculating unemployment rates was not a type of rulemaking subject to the APA’s notice-and-comment requirement. The district court granted summary judgment in the DOL’s favor. Maryland appealed.