Rulemaking

• Author: William S. Jordan, III
• Profession: Associate Dean and Professor of Law, University of Akron School of Law, Akron, Ohio
• Pages: 95-137

95

Rulemaking*

PART I. JUDICIAL DEVELOPMENTS

Section 553 of the Administrative Procedure Act (APA)1 generally re-

quires a federal agency to provide public notice and an opportunity for com-

ment on any proposed rule. The APA definition of “rule”2 is broad enough to

encompass virtually any agency statement about what regulated parties must

or should do in the future. The APA’s exceptions for “interpretative rules”

and “general statements of policy,” however, exclude the vast majority of

agency statements from the requirement for notice and comment.3 These are

typically considered to be informal statements or guidance documents, as

opposed to binding legislative rules. The APA’s “procedural rule” and “good

cause” exceptions also authorize agencies to issue some binding legislative

rules without going through notice and comment.4

This framework is quite sensible. The idea is that if an agency is going to

tell people or companies what they have to do in their lives or their businesses

(by adopting a legislative rule), the agency must first tell them about the

possible requirement and give them a chance to comment on it. By contrast,

if the agency is simply going to change how people or businesses interact

with the agency (a procedural rule), without changing what they must do in

* By William S. Jordan, III, Associate Dean and Professor of Law, University

of Akron School of Law, Akron, Ohio. Section Publications Committee

Chair and author, “News from the Circuits” column, ADMIN. & REG. L. NEWS.

Part II.F. was contributed by Josiah Heidt, 2011-12 Open Government Fel-

low, Cornell eRulemaking Initiative, Cornell Law School.

1. 5 U.S.C. § 553 (2006).

2. 5 U.S.C. § 551(4).

3. 5 U.S.C. § 553(b)(3)(A).

4. 5 U.S.C. § 553(b)(3)(A) & (B).

CHAPTER 4

96 Developments in Administrative Law and Regulatory Practice

their lives or businesses, the agency need not seek comment. Similarly, if the

agency is simply going to tell the public its understanding of the meaning of

a statute or regulation, without changing the requirements of either (an inter-

pretive rule), the agency need not seek comment. By the same token, if the

agency wants to tell the public about its policies in implementing a statute or

regulation (a statement of policy), again without changing either or imposing

any new requirement, it may do so without seeking comment.

Sometimes it is important for an agency to adopt a new binding require-

ment (legislative rule) right away, without taking the time for notice and

comment. Environmental resources, financial stability, or even human lives

may hang in the balance. For that circumstance, the APA provides the “good

cause” exception, under which an agency may impose substantive require-

ments or limitations without notice and comment.

This is logical, even obvious, in the abstract. The devil, of course, is in

the details, which continue to provide fodder for judicial decisions. The deci-

sions below range from issues involving exceptions to notice and comment to

questions of retroactivity, harmless error, and charges of bias in rulemaking.

A. Exceptions to the “Notice and Comment” Requirement

1. The Procedural Rule Exception

The concept of the procedural rule exception5 is that an agency may

change procedures without going through notice and comment as long as it

does not change the substantive requirements affecting the public. The Trans-

portation Security Administration (TSA) tried to rely upon the procedural

rule exception in defending its recent shift from reliance on magnetometers

to the use of full-body scans, which can detect non-metallic objects such as

liquids or powders.6 To the TSA, this was simply a procedure, merely

“alter[ing] the manner in which the parties present themselves or their view-

points to the agency,” which is one of the hallmarks of a procedural rule.

Since a body scan is probably the most direct and complete way of presenting

oneself to an agency, the exception might apply.

5. 5 U.S.C. § 553(b)(3)(A).

6. The discussion of the TSA litigation is drawn from material published in

the “News from the Circuits” column in 37 ADMIN. & REG. L. NEWS (Fall

2011).

97Chapter 1: Adjudication

The D.C. Circuit, in Electronic Privacy Information Center v. United

States Department of Homeland Security,7 disagreed, finding that the severity

of the body scan intrusion on privacy was sufficient to preclude reliance on

the procedural exception. The court dismissed in a footnote the proposition

that the use of scanners might somehow not constitute a “rule” under the

APA, noting that “the question at issue is again whether the agency’s pro-

nouncement is or purports to be binding.”

Ultimately, the court remanded without vacating because it expected the

agency to act quickly on remand to cure the defect in its actions. The court

declined the TSA’s invitation to indicate that the TSA could invoke the “good

cause” exception, discussed below, noting only that it did not reach the issue.

Presumably the TSA can rely upon that exception in light of the urgent need

to protect aircraft safety, but the agency must recognize the application of §

553 of the APA to its actions and affirmatively claim the exemption.

2. The “Interpretative Rule” and “Statement of Policy”

Exceptions

As noted above, the interpretive rule and statement of policy exceptions

to notice and comment allow an agency to explain to the public how it inter-

prets a statute or regulation or what, as a matter of policy, it intends to do

with respect to some particular issue. As straightforward as that may seem,

the courts have struggled with both of these exceptions. With respect to state-

ments of policy, the courts, despite Vermont Yankee,8 have settled on the

proposition that if an agency states a policy in binding terms, the agency must

first go through notice and comment. They seem to have had greater diffi-

culty, however, recognizing what constitutes an interpretive statement.

In one of the classic formulations, the D.C. Circuit in American Mining

Congress v. Mine Safety & Health Administration, sought to determine whether

a statement has “legal effect” by asking

(1) whether in the absence of the rule there would not be an adequate

legislative basis for enforcement action or other agency action to confer ben-

efits or ensure the performance of duties, (2) whether the agency has pub-

lished the rule in the Code of Federal Regulations, (3) whether the agency has

7. 653 F.3d 1 (D.C. Cir. 2011).

8. Vt. Yankee Nuclear Power Corp. v. Natural Res. Def. Council, 435 U.S. 519

(1978) (admonishing the courts not to impose procedural requirements

beyond the applicable statutory minima).

Chapter 4: Rulemaking