Rulemaking

Part II

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General Policy or Specific Requirements?

Remember, 553(b) does not require notice and comment for general policy statements

Assume the statute says that in licensing actions, a physician must reply to agency request for information in a reasonable time. Would a requirement that this be in 7 days be a policy

statement or a rule? Why does the inclusion of specific factual information

undermine the claim that it is a general policy statement?

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How High do I Build the Fence?Hoctor v. USDA, 82 F.3d 165 (7th Cir. 1996)

Statute requires the agency to adopt rules for the safe housing of dangerous animals Agency uses notice and comment to promulgate a rule

requiring that reasonable precautions be taken to prevent the escape of the animals

Agency then issues guidance saying that a reasonable precaution would be an 8 foot fence

Interpretation or legislation? How could the agency enforce the provision without

the height rule?

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Junk in the Park: United States v. Picciotto, 875 F.2d 345 (D.C. Cir. 1989)

Can the agency use notice and comment to promulgate a legislative rule that says that the agency can add other requirements in specific situations without notice and comment? Why or why not?

What if the rule just says that nothing can be brought to the park that would be disruptive or impede public access?

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Consistency, the Hobgoblin of Interpretative Rules

What is the result if an interpretative rule is inconsistent with a legislative rule? Using an interpretative rule to change a calculation

established by a rule Some courts also find that an interpretative rule cannot

be changed with a subsequent interpretative rule, but can only be modified by a legislative rule Why is logically inconsistent? This is not widespread in the courts

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Other Factors

Publication in the FR Must interpretative rules be published in the

FR? What does failure to publish indicate? Does this make sense?

Is it important that the agency clearly label the rule as interpretative?

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Federal Mine Safety and Health Act Example

Secretary has the statutory right to sue both the mine owner and the mine operator for violations of the Act.

Secretary publishes a policy statement explaining that the agency can and will sue both of them for infractions, depending on the nature of the infraction. Does this require notice and comment? Why?

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Corps of Engineers Example

Corps issues a guidance document saying that one way to qualify for a wet lands development certificate is to promise to restore 2X as much wet land as you fill Does this need notice and comment? Why?

What if the Corps will only issue permits to people who agree to this? How would you prove this?

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Coercion: Chamber of Commerce v. U.S. Dept. of Labor, 174 F.3d 206 (D.C. Cir. 1999)

DOL made a policy statement that it would reduce inspections of workplaces that adopted an OSHA suggested safety plan that exceeded federal minimums Is this really voluntary? Does this coercion make this a binding rule?

What about DOJ guidance that a corporate compliance plan will count as mitigation under the Sentencing Guidelines?

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How does the Agency Treat the Rules?

Assume the agency says the statement is only an enforcement guideline

What if the employees doing the enforcement always follow the guideline? Does this change its legal status?

What position do these decision on guidance put the agency in when the regulated parties or the public asks what the guidelines mean?

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Can Interpretative Guidance be Retroactive?

Why does the ban on retroactive rules not apply to interpretive rules?

If interpretive rules cannot change legal rights, does retroactive really mean anything?

Could congress create an exception to the APA and allow a retrospective rule?

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Procedural Rules

Procedural rules are exempt from notice and comment The form of an application for benefits is procedural The facts that the claimant has to establish to get the

benefits are substantive A procedural rule can become substantive if the change

in procedure has a substantial impact on the regulated parties. Procedural change for submitting bills by home health

providers imposed a huge logistic and financial cost.

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OSHA Guidance for Targeting and Carrying out Inspections

Being inspected does have a substantial impact on the employer

Does this guidance document require notice and comment? Does it change the legal rights of the

employers?

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What is Formal Rulemaking?

A rulemaking conducted as a trial type hearing The agency support for the rule must be presented at

the hearing Interested parties may present and cross-examine

evidence History - grew out of rate making

Rate making affects a small number of parties The courts thought they should get due process

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Why avoid formal rulemaking?

The peanut hearings (FDA must do formal rulemaking in some situations) Should peanut butter have 87 or 90% peanuts? 10 years and 7,736 pages of transcript

What was the concern in Shell Oil v. FPC? Formal rulemaking was impossibly time

consuming to use for regulating something changeable such as natural gas rates.

Why does just getting the right to be heard at a formal hearing benefit parties that oppose a rule?

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When is Formal Rulemaking Required?

Disfavored by the modern courts Must have magic statutory language or be required by the

agency's on rules Only when rules are required by statute to be "made

on the record after opportunity for an agency hearing" Lawyering tip

When would you want to argue that formal rulemaking is required?

What do you have to do to support you request?

The Procedures of Notice-and-Comment Rulemaking

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Putting the Notice in Notice and Comment

553(b) . . . The notice shall include — (1) a statement of the time, place, and nature of

public rulemaking proceedings; (2) reference to the legal authority under which

the rule is proposed; and (3) either the terms or substance of the proposed

rule or a description of the subjects and issues involved. . . .

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Notice of the Proposed Rule: Chocolate Manufacturers Ass’n v. Block

What did Congress tell the agency to do that resulted in these regs? WIC

What did the proposed rule address? Cereal

What about fruit juice? How was the final rule different from the proposed

rule?

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The Notice Problem

What was the CMA's claim? What was the agency defense? Does the rule have to be the same?

Why have notice and comment then? What is the logical outgrowth test? How would you use it in this case?

What did the court order in this case? What will the CMA do?

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Limits on Logical Outgrowth - Arizona Public Service Co. v. E.P.A.

What did the EPA propose that Indian Tribes be allowed to do that states were doing?

During the comment period, what issue did the tribes raise?

How was the rule changed? What was the claim by plaintiffs? How did the court analyze the problem?

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What about Technical Information Underlying the Rule? (not in book)

Portland Cement v. Ruckelshaus, 486 F2d 375 (1973) The agency must disclose the factual basis for the

proposed rule, if it relied on scientific studies or other collections of information

Connecticut Light and Power v. NRC, 673 F2d 525 (1982)? The agency cannot play hide the peanut with technical

information Why is this a big deal in environmental regs? What are the potential downsides of this policy?

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Shelby Amendments to the Freedom of Information Act (not in book)

As we will learn later, the FOIA traditionally applied only to information in possession of government agencies Senator Shelby, at the urging of several business

lobbies, successfully extended FOIA to information produced by federally funded research and in the hands of universities

Why would business lobbies want access to this information, esp. in environmental rulemakings?

Why might such access be a problem for professors?

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Additions to the Published Record (not in book)

Rybachek v EPA EPA added 6000 pages of supporting info Court said the agency may supplement the rulemaking

record in response to comments asking for explanation

Idaho Farm Agency added a report to the record, then relied on it

in the final rule. The agency may not add new material and then rely on

it without given an opportunity to comment on it.

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Negotiated Rulemaking

What is this? What are the advantages? What are the public participation issues?

Ex Parte Communications

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Rulemaking

How does the notice provision in rulemaking change the issues in ex parte communications? How does the notice requirement eliminate the

ex parte communications issues for communications before the promulgation of the rule?

When are ex parte communications an issue? How can you cure this?

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Home Box Office, Inc. v. FCC

What was being regulated? Who were the contacts with? What did the court say should be avoided? If it is not avoided, what needs to be done?

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Bias and Prejudice

Remember the cases on bias of decisionmakers in adjudications?

Should these also apply to rulemaking? How does notice and comment change the

situation?

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Association of National Advertisers , Inc. v. FTC

FTC is adopting rules on TV advertising directed at children Chairman has written and spoken at length on the

evils of TV ads aimed at children Plaintiffs seek to disqualify him because of bias

Court held that plaintiffs must show clear and convincing evidence that he has an unalterably closed mind on matters critical to the rulemaking

No rulemaking has ever been overturned on the basis that a decisionmaker was unlawfully prejudiced.

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DC Federation of Civic Associations v. Volpe, 459 F.2d 1231 (D.C. Cir. 1971)

The Volpe test for whether a rulemaking may be overturned solely on evidence of Congressional pressure 1) was there specific pressure on the agency to

consider improper factors? 2) did the agency in fact change its mind because of

these considerations? How can the agency defend itself from a Volpe attack? What did the Court Rule when it applied Volpe to this

Case? Why is it proper for congressmen to comment on

proposed rules?

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Sierra Club v. Costle, 657 F.2d 298 (D.C. Cir. 1981)

Rule making on coal fired power plants Why is this controversial then and more so now?

Sierra Club claimed that the president influenced the agency Is that wrong? What is the cure?

Senator Bird also weighed in What do plaintiffs need to show to establish undue

influence? Why is an outcome test, combined with the record, a

good solution?

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What is the president's role in rulemaking?

Controls and supervises executive branch decisionmaking

How is the role different in adjudications? When should the president's contacts be

documented? When the statute requires that they be

docketed If the rule is based on factual information that

comes from such a meeting.

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Should State Rules Differ from Federal Rules on Notice and Comment?

Limited staff Greater reliance on the expertise of board members,

rather than staff Board may hear lots of testimony and review a lot of

info - they cannot afford the time and effort to put together volumes of supporting info for regs

Should state agencies have a reduced publication requirement?

Should they be able to publish rules without explanation and only have to explain if asked?

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Hybrid Rulemaking (Congressional Mandates) at the FTC

issue an advance notice of proposed rulemaking, which describes the area of inquiry under consideration and invites comments from interested parties;

send the advance notice and, 30 days before its publication, the notice of proposed rulemaking to certain House and Senate committees;

hold a hearing presided over by a hearing officer at which persons may make oral presentations and in certain circumstances to conduct cross-examination of persons;

include a statement of basis and purpose to address certain specified concerns;

and conduct a regulatory analysis of both the proposed and final rules that describes the proposal and alternatives that would achieve the same goal and analyzes the costs and benefits of the proposal and the alternatives.