The Administrative Process: Rulemaking, Adjudication & Guidance

“Rule” means the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency

- BROAD (encompasses more informal things not just legislative-like statutes) and NOT LIMITED to NOTICE & COMMENT

“Rulemaking” means agency process for formulating, amending, or repealing a rule

JBP: Authority for an agency to engage in rulemaking MUST be granted by a statute/law NOT the APA (i.e., the APA governs the procedures for rulemaking, it doesn’t grant the power itself)

“Order” means the whole or a part of a final disposition, whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rulemaking but including licensing

“Catch-All” → Technical term for an executive agency action that is not rulemaking (i.e., anything that isn’t a rule is an order)

“Adjudication” means agency process for formulation of an order

Example: post office returning your mail is an order/adjudication

Requires:

- Notice [§ 553(b)];

Opportunity for

- Comment [§ 553(c)]; &

- Statement of Basis & Purpose [§ 553(c)]

RARE (e.g., ratemaking)

(magic words: “On the record after opportunity for agency hearing”)

Requires:

Notice [§ 553(b)]

Hearing and on the record decision [§§ 556–57]

Catch-All: (“the technical term for an executive action”)

No specific requirement provision, but certain § 555 requirements apply to all agency actions

Adjudication”

Requires:

Notice [§ 554(b)]

Hearing and on the record decision [§§ 556–57]

Pros:

- Specifically tailored to outcomes/parties

- Limits external lobbying or ex parte contacts (Costle)

- Minimizes the time and political intensity of rulemaking (State Farm)

- Invites broad participation in policymaking

- Encourages agency to focus on broad effects of policy rather than a particular dispute

- Eliminates need to relitigate policy issues

- Produces clear rules

An order under APA adjudication is more of an individual question, it is backward looking. (ex post)

More specific due to DP concerns and agency function.

A rulemaking is more appropriate for a recurring issue about providing notice (rule of law values); crosscut policy issues that transcend individual application and apply across the board. It is more forward looking. (ex ante)

General

Congress can decide by statute to add procedural reqs "On the record after opportunity for agency hearing”.

Must include time, place, and nature of rulemaking proceedings and reference to agency’s legal authority.

Notice: “The notice shall include . . . either the terms or substance of the proposed rule or a description of the subjects and issues involved.” (logical outgrowth

Comment: “After notice required by this section, the agency shall give interested persons an opportunity to participate in the rule making through submission of written data, views, or arguments with or without opportunity for oral presentation.” § 553(c).

Response: Concise general statement of basis and purpose. § 553(c).

Publication: 30 days before effective date. § 553(d).

1. Agency must give notice of important data/studies it is relying upon (Nova Scotia, American Radio)

2. Final rule must be a “logical outgrowth” of proposed rule (Veterans Justice Group)

3. Agency must respond to significant comments and state its conclusions on major issues of fact and policy (Nova Scotia)

The final rule mist be a logical outgrowth of the proposed rule.

TEST: should interested parties reasonably have anticipated that the final rule was possible and therefore filed in their comments?

They do not have to engage in an endless loop of providing data in response to comments (Rybachek);

only if third-parties submitting/providing new data that must be disclosed (Ober)

(1) Impracticable

(2) Unnecessary

(3) Contrary to the public interest

Offer reasonably detailed notice

Not just “a description of the subject and issues involved”

Release all important supporting materials for comment

Not just the proposed rule itself

Create a contemporaneous record

Even though § 553 has no record requirement as such

Respond to important comments

Even though § 553 does not expressly require response

State conclusions on major issues of fact and policy

Not necessarily a “concise” or “general” statement

And if any of this will require significant change to proposed rule, publish supplemental notice (ANPRM)

5 U.S.C. § 553(a)(1): Military and foreign affairs functions of the United States.

5 U.S.C. § 553(a)(2): Matters relating to agency management or personnel or to public property, loans, grants, benefits or contracts.

JBP: Most agencies have waived this exception or are required by statute to use notice and comment rulemaking.

5 U.S.C. § 553(b)(A): “this subsection does not apply—to interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice…

5 U.S.C. § 553(b)(B): “[T]his subsection does not apply . . . when the agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.”

1. Direct Final Rulemaking: Promulgate final rule but withdraw if adverse comment/rejected later

2. Interim Final Rulemaking: Promulgate final rule (immediately effective), then receive comment consistent w/ N&C procedures (public might be of concern), then—maybe—promulgate “final final” rule

Remedy for Violations: Remand Without Vacatur

Remand Without Vacatur: Decision by court that tells the agency to reconsider its rule while allowing the rule to stay in effect

Remand Without Vacatur: Decision by court that tells the agency to reconsider its rule while allowing the rule to stay in effect

ACUS (2013): Re RWV, courts should consider equitable factors, including whether:

(a) correction is reasonably achievable in light of the nature of the deficiencies in the agency’s rule or order;

(b) the consequences of vacatur would be disruptive; and

(c) the interests of the parties who prevailed against the agency in the litigation would be served by allowing the agency action to remain in place

(1) Interpretative rule—rules or statements issued by an agency to advise the public of the agency’s construction of the statutes and rules which it administers” 

(2) “General Statements of Policy—statements issued by an agency to advise the public prospectively of the manner in which the agency proposes to exercise a discretionary power”