Administrative Action: Rulemaking

Question 1

Statutory Overview

Answer 1

iii. Informal Rulemaking – §553
iv. Formal Rulemaking – §556/557
v. Informal Adjudication – §555e
vi. Formal Adjudication – §556/557

Question 2

Requirements for Formal and Informal Rulemaking

Answer 2

ii. United States v. Allegheny-Ludlum Steel Corp
1. Rule: formal rulemaking procedures (found in § 556 and § 557) required only when the phrase “on the record” is found in the enabling statute and the phrase “a hearing” is found in the enabling statute.
iii. United States v. Florida East Coast Ry. Co.
1. Rule: informal rulemaking (as distinct from agency adjudication) does not require the agency to allow affected parties to submit evidence orally, cross-examine witnesses, or making an oral argument.

[presumption that rule-making will be governed by informal mode (553) rather than the formal model (556, 557)]

Question 3

Basic Parts to 553 Rulemaking

Answer 3

i. The public must be given notice of the proposed rulemaking
ii. The public must be given an opportunity to comment orally or in writing on the proposed rule
iii. The agency must incorporate in the final rule a concise general statement of its basis and purpose.

Question 4

553 Rulemaking: Notice

Answer 4

i. §553(b)(3) requires “either the terms or substances of the proposed rule or a description of the subjects and issues involved.”
1. This mean that the final rule cannot “substantially depart” from the terms or substance of the proposed rule – must be a “logical outgrowth” of the proposed rule. Chocolate Manufacturers
2. It also means that scientific evidence providing support for the final decision must be disclosed. Portland Cement.
3. Withdrawals of exemptions are always foreseeable. Long Island Care
4. This includes notice of ex parte comments that it will rely on for the final rule.

Question 5

553 Rulemaking: Comments/Concise General Statements

Answer 5

i. §553 requires agencies to provide a “concise general statement of their basis and purpose.”
1. Must answer “vital questions” with “cogent materiality.” High standard of articulation. Must ventilate major issues, with a balancing/weighing of interests. Nova Scotia Foods
2. Need not address every comment, but do need to address those that raise significant problems.

Question 6

553 Rulemaking: Procedures

Answer 6

i. “Absent constitutional constraints or extremely compelling circumstances the administrative agencies should be free to fashion their own rules of procedure and to pursue methods of inquiry capable of permitting them to discharge their duties…” Vermont Yankee

Question 7

Hybrids (mix of rule and policy statement)

Answer 7

i. Basic test: does the agency statement have “binding effect”? If so, a “substantive rule” and not a policy statement.
1. As a formal matter – “force of law” question
2. As a practical matter
a. For the agency – flexibility or inflexibility of the policy announced
b. For regulated parties and those with whom they deal.
ii. Application:
1. Practically binding on agency (inspectors): little to no discretion as to whom to inspect under the statement. Will inspect the sites on the list; and will only inspect a small fraction of sites with a CCP

Question 8

Exemptions from 553 - policy statements

Answer 8

i. Policy statement - preliminary announcement of how an agency intends to exercise discretion.

Question 9

Exemptions from 553 - interpretive rules

Answer 9

i. Interpretive rule - a declaration of how an agency will interpret a statute.
ii. Interpretive rules lack the binding legal force of a legislative rule in the sense that one cannot incur legal liability simply by violating an interpretive rule.

Question 10

Exemptions from 553 - interpretive rules (American Mining Congress test)

Answer 10

1. In the absence of the rule would there be an adequate legislative basis for enforcement action or other agency action to confer benefits or ensure the performance of duties [aka agency adjudications resulting orders)
2. Whether the agency has published the “rule” in the CFR
3. Whether the agency has explicitly invoked its general legislative authority
4. Whether the rule effectively amends a prior legislative rule.

Question 11

553 Rulemaking deference: Auer deference

Answer 11

i. Legislative rule must be genuinely ambiguous (exhausting all tools of statutory construction)
ii. Agency interpretation must be “reasonable”
iii. Agency interpretation must be authoritative – not ad hoc
iv. Must implicate agency’s substantive expertise
v. Must reflect agency’s “fair and considered” judgement – not at hoc rationalization in litigation or elsewhere to substantiate previous action.