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?
–

Where is the court looking for substantial impact?
–

Allowed the decisionmakers to consider any facts he
considered appropriate, in addition to the 5 enumerated
ones
What about the 1981 guideline?
–

On the agency decisionmakers
What in the directive indicated that it was not a
binding norm?
–

It had a substantial impact on him
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?
–

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?
–

6 foot high enough for you?
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
–
–

There is no specific rule on fraud, but the board uses the general
unprofessional conduct provision.
–
–




Said they worked in Oregon rather than CA - lower rates
What would have happened if there had been a claim?
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
–
–
–

Geller 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
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