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 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)

6 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?

7 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

9 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?

11 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

16 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?

20 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?