Rulemaking

1
Rulemaking

• Part II

2
Non-APA Requirements

• APA is only the default if there is no other
  statutory guidance
• National Environmental Policy Act imposes
  requirements if the rule affects the environment
• Regulatory Flexibility Act - small business
• Executive Order 12866 - more 100M impact
• The book calls these hybrid rulemaking, do no
  confuse this with court imposed hybrid rulemaking
  as in Vermont Yankee

3
Beginning Rule Making

• Why was the court willing to order the agency to
  make a rule in the Regulators?
• Why do agencies often fail to follow
  congressional direction to make rules?
• What is a request for a rulemaking and what does
  it force the agency to do?

4
Jargon Alert

• Legislative rule (regulation)
• Has the effect of law
• Generally just called a rule or regulation
• Non-Legislative rule
• Has no legal effect, but shows what the agency
  thinks the law is
• Many names - interpretive rule, guidelines,
  guidance document, anything but rule or regulation

5
553(b) - Exceptions to Notice Requirements

• 1) Interpretative rules, general statements of
  policy, and rules of agency organization,
  procedure, and practice and
• 2) Rules when the agency finds for good cause
  that notice and public procedure are
  impracticable, unnecessary, or contrary to the
  public interest.
• No notice means no comment under 553(c)

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Exception 1 - Interpretative Rules

• It is only explaining the law or providing
  guidance for action
• Prosecution guidelines
• IRS audit guidelines
• Since they do not change the law, they have no
  legal effect
• Does that mean you can ignore them?

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How do you know if it an Interpretive Rule or a
Legislative Rule?

• Why would an agency want to use an interpretive
  rule rather than a legislative rule?
• What is the risk to the agency if they do and the
  court disagrees?
• What is the benefit to the regulated parties of
  interpretive rules?
• What if the agency is prevented from providing
  guidance documents?

8
The Nature of the Enabling Act

• Very general laws
• Little effective guidance in the statute
• Makes any interpretative rule more likely to been
  seen as a legislative rule
• Very specific laws - like the ADA
• No room for legislative rules
• Everything is guideline

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EPA Example - Wetlands

• EPA makes a rule that states that the term
  waters of the United States (which defines the
  jurisdiction of EPA under the Clean Water Act)
  includes wetlands that potentially provide
  habitat to migratory birds.
• Is this an interpretative rule or a legislative
  rule?
• Can we tell just looking at the rule?

10
What Do We Need to Know?

• Will the agency say that the rule is binding?
• The substantial impact test
• How might this rule affect the buyers of
  wetlands?
• Is this a substantial impact?
• What is the agency's defense?
• Is the substantial impact test circular?

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The Legally Binding or Force of Law Test

• What is the enforcement test?
• What do we need to know to tell whether the
  agency can enforce the law without this rule?
• Is the agency required to define wetlands?
• Was the agency doing enforcement before this
  rule?
• Under this test, is this an interpretative rule?
• What if statute allows the agency to define toxic
  substances that cannot be dumped into lakes?
• Would a list of these substances be legislative?

12
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?

13
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 use 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?

14
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?

15
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?

17
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?

18
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?

19
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?

21
Can Interpretative Guidance be Retroactive?

• Why does the ban on retroactive rules not apply
  to interpretive rules?
• How is this like the court system when a judge
  finds a new tort cause of action?
• Could congress create an exception to the APA and
  allow a retrospective rule?

22
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.

23
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?

24
When Notice and Comment Procedures Are
Impracticable, Unnecessary, or Contrary to the
Public Interest

• What is an interim final rules?
• What is a direct final rule
• When are these allowed?
• What are some examples?
• Did we see these after Katrina?