Legal Definitions - nonacquiescence

Nonacquiescence refers to a policy adopted by a government administrative agency when it disagrees with a lower court's interpretation of a law it is responsible for enforcing.

Under this policy, the agency decides not to be bound by that specific lower court ruling in other similar cases, even within that court's geographical jurisdiction. Instead, the agency continues to apply its own interpretation of the law, believing it to be the correct one. This practice is typically maintained only until the U.S. Supreme Court issues a definitive ruling on the legal question, which would then bind all lower courts and agencies.

Here are some examples to illustrate nonacquiescence:

• Environmental Protection Agency (EPA) and Water Regulations:

  Imagine the EPA has a regulation defining what constitutes "navigable waters" under the Clean Water Act, which includes certain types of wetlands. A federal appeals court in the 5th Circuit rules that the EPA's definition is too broad and excludes specific wetlands that the court believes are not covered by the Act. The EPA, believing its interpretation is crucial for environmental protection and aligns with the intent of Congress, might announce its nonacquiescence to this 5th Circuit ruling. This means the EPA would continue to apply its broader definition of "navigable waters" in other cases, even within the 5th Circuit, while it seeks a Supreme Court review or waits for another circuit court to rule differently, potentially creating a legal conflict that the Supreme Court would then resolve.

• Internal Revenue Service (IRS) and Digital Asset Taxation:

  Suppose the IRS issues guidance on how certain digital assets, such as non-fungible tokens (NFTs), should be treated for tax purposes, classifying specific transactions as taxable events. A federal appeals court in the 9th Circuit then rules that a particular type of digital asset transaction, which the IRS considers taxable, should actually be treated differently, leading to a lower tax liability for taxpayers in that circuit. The IRS, convinced its original interpretation aligns with congressional intent for fair tax collection, could issue a statement of nonacquiescence to the 9th Circuit's decision. It would continue to apply its original guidance to taxpayers nationwide, including those in the 9th Circuit, for similar transactions, pending a definitive ruling from the Supreme Court on the tax treatment of these assets.

• Department of Labor (DOL) and Overtime Exemptions:

  Consider a scenario where the Department of Labor (DOL) has a rule defining which employees are exempt from overtime pay under the Fair Labor Standards Act (FLSA), based on their salary and job duties. A federal appeals court in the 3rd Circuit rules that the DOL's salary threshold for a specific category of professional employees is too high, meaning more employees in that category should be eligible for overtime. The DOL, believing its salary threshold accurately reflects the intent of the FLSA to protect workers while also recognizing legitimate exemptions, might announce its nonacquiescence. This means the DOL would continue to enforce its existing salary threshold for overtime exemptions in all other cases, even within the 3rd Circuit, until the Supreme Court provides a final interpretation of the FLSA's exemption criteria.