Chapter 6

Exemptions From Rulemaking Procedure

We have talked about this good cause exceptions in the context of emergency rule making. There are other situations where rules are made without public comment periods.

Unnecessary Rulemaking

Notice and comment is not necessary if it will not assist in the rulemaking

– Technical corrections But see - Utility Solid Waste ("technical" amendment to rule to

repair erroneous use of WordPerfect search-and-replace command in the original rule was of great interest and consequence to the public, so notice and comment procedure was not "unnecessary").

– When there is no discretion, such as a mathematical calculation or objective fact

– When the agency is approving documents that have been subjected to comment in other forums, such as state EPA compliance plans

Direct Final Rules

Agency proposes a rule to become final in set period unless adverse comments are received.

If adverse comments are received, then the rules goes through the usual notice and comment.

Urgent Rules

When might the government want a rule to go into immediate effect with no notice?

When the policy might not work if there was notice - imposing wage and price controls is one example.

Interim-final rules

A rule where comment is taken after rule is in effect. In many cases these are never revised.

Sometimes even the revised rule is remanded if the court finds that the original publication did not meet the standards for urgent publication.

Exempted Subject Matter

These are issues that are exempt from notice and comment by specific statute, and do not have to meet the standards for urgent rules.

Why would contracts, grants, all the government as business functions be exempt?

Why do some members of the public object to excluding sale of public lands and the like?

Agency Management and Procedure Exception

Internal agency procedures and employment guidelines do not have to be published.

What limit does the Joseph v. US Civil Service case put on this exception?

– When the policy effects persons outside the agency.

Military and foreign affairs functions are also exempted.

– Most rules that have significant impact on the public are published, unless there are national security reasons for not doing so.

– Bet this changes with Homeland Security!

Procedural rules

These are exempted from publication by 553(b)(A). Kast Metals Corp.

– How is this case like the food stamp case?– What was the change?– When does the Brown case (334) tell us about when even

procedural rules have to go through notice and comment?– Why was that test not satisfied in this case or the food

stamp case?

What if the rule told inspectors to cite as dangerous every time a 2 pronged plug used, if there was no reg or statute on 2 v. 3 pronged plugs?

Chamber of Commerce of the United States v. Department of Labor

OSHA adopted, without notice and comment, a "Cooperative Compliance Program" (CCP).

– Workplaces with the worst safety records would be targeted for inspections, but OSHA would forego the inspection for any employer that enrolled in a program of self-inspection and other "voluntary" safety measures.

– OSHA intended the CCP to be a creative experiment in "cooperative governance," whereby employers would have a choice between traditional command-and-control enforcement and a cooperative partnership relationship with the agency.

Is this a procedural rule like Kast or a substantive rule requiring notice and comment?

Legal Effects of Legislative and Nonlegislative rules

Properly promulgated rules have the same legal effect as statutes

Rules are different from statutes in that you can argue whether the rules were properly promulgated, which you cannot with statutes

– Not always true with state laws

Nonlegislative rules are not binding on the agency as show in Kast and the food stamp case.

Mada-Luna v. Fitzpatrick

What did plaintiff do that he said should block his deportation?

He was denied under the 1981 guidelines and argued that the 1978 guideline had been improperly repealed (it was more favorable)

What is the key question? Where does the court look for a definition of

a policy?

Attorney General's Manual on the Administrative Procedure Act

"statements issued by an agency to advise the public prospectively of the manner in which the agency proposes to exercise a discretionary power."

"Besides informing the public concerning the agency's future plans and priorities for exercising its discretionary power, they serve to "educate" and provide direction to the agency's personnel in the field, who are required to implement its policies and exercise its discretionary power in specific cases."

What is the Critical Factor?

The critical factor to determine whether a directive announcing a new policy constitutes a rule or a general statement of policy is "the extent to which the challenged [directive] leaves the agency, or its implementing official, free to exercise discretion to follow, or not to follow, the [announced] policy in an individual case."

What is the court's two part test?

First, they must operate only prospectively. (not really that important)

Second, they must not establish a "binding norm" or be "finally determinative of the issues or rights to which [they are] addressed," but must instead leave INS officials "free to consider the individual facts in the various cases that arise."

What is the Substantial Impact Requirement?

What is the plaintiff's claim of substantial impact?– It had a substantial impact on him

Where is the court looking for substantial impact?– On the agency decisionmakers

What in the directive indicated that it was not a binding norm?

– Allowed the decisionmakers to consider any facts he considered appropriate, in addition to the 5 enumerated ones

What about the 1981 guideline?– Even more discretion

What happens to Plaintiff?– Plaintiff loses - no binding norm

What is the policy criticism of informal guidelines?

Public is not aware of them Public does not have input into them

Why are they useful?

Can provide guidance to staff in complex situations– Do you want NRC inspectors to fly by the seat of

the pants?

Can (and often are) given to the public as guidance.

What is the impact of California banning them?

Paralyzes agencies No more guidance for regulated parties Makes it harder for agency personnel to

follow the law Really hurts the public

Why does prospective change in agency behavior matter in the two part test?

If the history shows that the agency never deviates from the rule, it is probably not a guideline– The agency's characterization is important but not

dispositive Why was the FDA action on aflatoxin not a

guideline?– Citizen group could contest it as too high because it

bound the agency

Supreme Court Perspective

Why was there no requirement of notice and comment in Lincoln v. Vigil?– Indian health service closed its pilot program that

provided care to disabled Indians Court said this was a classic agency choice

of how to deliver services and did not require a rule making because it did not change eligibility for benefits, only how they were distributed.

Cat House Case

Congress says the USDA should require dangerous animals to be properly confined

USDA has a rule saying animals need to be properly confined

It has a guidance memo that says that dangerous animals must be behind an 8 foot perimeter fence

What are plaintiff's pets and how tall is the fence?– Plaintiff has ligons, tigers, lions, and who knows what else

behind a 6 foot fence Why does plaintiff say the rule cannot be enforced

against him?

What is the key issue?

What do you think about the rule?– 6 foot high enough for you?

Does the statute itself allow USDA to establish standards for escape enclosures?

– If so, then the memo is just a valid interpretation of the statute

Why does the court focus on he set height?– Limits discretion

How does the court say the agency might have used the number?

– We know cats can jump 8 feet, so it has to be at least that high

What did the court do?

What if they decide to 8 feet after notice and comment?

What if the agency does away with the rule and says the judge has to stand outside the fence and they put a hungry cat on the inside?

Changing an Interpretive Rule

A number of cases have held that a purported interpretive rule is invalid if it is inconsistent with a prior interpretive rule, because the agency's change in position can be accomplished only through notice and comment rulemaking.

Does this make sense? How would you argue it to a court that lets an

agency change interpretations?

Making Rules through Adjudication

How is this like what common law courts do? How is agency control of the process at the

federal level different from a court? Why is the NLRB so affected by politics? Why might it want to make a rule through

adjudication rather than through notice and comment?

Why not just issue a guideline?

NLRB v. Wyman-Gordon

This is a controversial case - it is not exactly clear what the court was saying

NLRB says that Defendant has to give the union a list of employees because this was established as precedent in a previous adjudication

Why does the court reject that reasoning? Why did the court allow the order to stand? How does this undermine the court rejection of this

as rule?

NLRB v. Bell Aerospace

NLRB uses an adjudication to announce a definition of managerial employees for bargaining units

Court says this is OK How could you challenge this rule that you could not

do if it were made in a notice and comment rulemaking?

Is this a reasonable limit on making rules through adjudication?

Can an adjudication overturn a notice and comment rule?

Medgal v. Oregon State Board of Dental Examiners

Dentist loses his license for unprofessional conduct - defrauding an insurance company

– Said they worked in Oregon rather than CA - lower rates– What would have happened if there had been a claim?

There is no specific rule on fraud, but the board uses the general unprofessional conduct provision.

– Why did the dentist claim that the board could not rely on unprofessional conduct?

– The dentist contests the ruling, says unprofessional conduct is too vague and the board should have to promulgate a rule

Do you think it is too vague? What is the proper role for professional licensing boards? Should the BOME investigate docs who are sued for malpractice? Should it have to have specific rules on standard of care to pull a

license for malpractice?

Dumb State Agency Laws

How did the Oregon court classify licensing laws? How does this change the constitutional standard

from that usually applied to agency actions? – This is a loony analysis, completely rejected everywhere

else

Florida adopted a provision that required rulemaking and that took away the presumption that rules were valid, making the agency prove them if they come up in court

– Great step forward - look how well Florida agencies worked during the election

Rulemaking Petitions

APA 553(e) allows citizens to petition an agency to promulgate, amend, or repeal a rule.

This is particularly significant when the agency has promulgated a rule under one of the exceptions to notice and comment

The agency must explain why it does not act on such a petition

The problem is the same as with initiative and referendum - well organized or funded loonies can make law

Can the court order the agency to make a rule based on a citizen petition?

WWHT, Inc. v. FCC– Pay TV wanted a rule to make cable carry their signal– Agency says you do not need it and that the court cannot review this denial

of rulemaking– Court says it can review it, but only narrowly

Geller v. FCC– Request to the FCC to review cable TV policies in light of the revisions of

the copyright act.– The court said unusual circumstance that call the rule or lack of one in

question are grounds for asking the agency to reconsider NAACP v. FPC - Agency had to reconsider if it refused for the wrong

its reasons– Agency though it did not have jurisdiction– The Commissions reasons were found valid and the case was dismissed

Congressional Deadlines

Congress often requires elaborate rulemaking and then gives very little time to make the rule

What can the courts do? Court can order the rule be made by x

time, but what then?

Waivers of Rules

Why waive rules? What is the downside of waiving rules? Should a party be able to demand a waiver of a rule that

does not provide a waiver mechanism? WAIT Radio v. FCC

– Plaintiff sued to be exempted from the clear channel radio rules because new technology reduced interference

– The court kicked it back for better reasons - i.e., fix the record– The court observed that since the petitioner had to give

specific facts and reasons supporting the petition, the agency needed to answer those

End of the Chapter