Legislative rules revisited

University of Chicago Law Review

Volumn 74, Issue SPEC. ISS., 2007, Pages 1705-1722

  Gersen, Jacob E ^a  

^a UNIVERSITY OF CHICAGO   (United States)

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EID: 38049031903     PISSN: 00419494     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (96)

1. For an overview of the doctrinal questions, see generally Stephen G. Breyer, et al, Administrative Law and Regulatory Policy: Problems, Text, and Cases ch 4 at 228-346, ch 6 at 478-573 (Aspen 6th ed 2006).
2. See generally Chevron U.S.A. Inc v NRDC, 467 US 837 (1984). See also United States v Mead Corp, 533 US 218 (2001) (using procedural formality as a defeasible proxy for congressional intent to delegate law-interpreting authority to agencies).
3. 82 F3d 165 (7th Cir 1996).
4. Pub L No 89-544, 80 Stat 350 (1966), codified at 7 USC § 2131 et seq (2000).
5. See, for example, 7 USC §§ 2133-34 (providing that "[t]he Secretary [of the Interior] shall issue licenses to dealers and exhibitors" and requiring a valid such license to transport or engage in commerce involving "any animal").
6. See 7 USC § 2146.
7. 7 USC § 2143(a)(1).
8. 7 USC § 2143(a)(2)(A).
9. See 5 USC § 553 (2000).
10. 9 CFR § 3.125(a) (2006).
11. See Hoctor, 82 F3d at 168.
12. Id.
13. Id.
14. Id.
15. See id.
16. Id at 169.
17. 5 USC § 551 et seq (2000).
18. The query is crisply put by John Manning: "The central inquiry in all nonlegislative rule cases is this: Is the agency document, properly conceived, a legislative rule that is invalid because it did not undergo notice and comment procedures, or a proper interpretive rule or general statement of policy exempt from such procedures?" John F. Manning, Nonlegislative Rules, 72 Geo Wash L Rev 893, 917 (2004).
19. Hoctor, 82 F3d at 167.
20. American Hospital Association v Bowen, 834 F2d 1037, 1046 (DC Cir 1987).
21. Chisholm v FCC, 538 F2d 349, 393 (DC Cir 1976) (Wright dissenting). In his dissent in Chisholm, Judge Skelly Wright laid out the three factors he thought relevant to the inquiry. First, there must be a "specific grant of legislative rule-making power in this area." Id. Second, what is the impact of the rule in later proceedings? "If a rule is interpretative it does not foreclose challenge in a plenary proceeding before the agency itself, or in court." Id (internal citations omitted). Third, what is the impact of the rule in the instant case? Id at 394. Does it "substantially alter[] the rights" of parties and does it have "a widespread and significant impact"? Id at 393-94.
22. Kenneth Culp Davis, 2 Administrative Law Treatise § 7:5 at 32 (K.C. Davis 2d ed 1979).
23. Kevin W. Saunders, Interpretive Rules with Legislative Effect: An Analysis and a Proposal for Public Participation, 1986 Duke L J 346, 352.
24. General Motors Corp v Ruckelshaus, 742 F2d 1561, 1565 (DC Cir 1984) (en banc) (quotation marks omitted), quoting American Bus Association v ICC, 627 F2d 525, 529 (DC Cir 1980).
25. Robert A. Anthony, "Interpretive" Rules, "Legislative" Rules and "Spurious" Rules: Lift-ing the Smog, 8 Admin L J Am U 1, 6 (1994) (claiming that this confusion arises not because of any inherent complexity but because of "idiosyncratic judicial terminology," the interplay of multiple concepts, and the difficulty in applying those concepts).
26. Charles H. Koch, Jr., Public Procedures for the Promulgation of Interpretive Rules and General Statements of Policy, 64 Georgetown L J 1047, 1049 n 11 (1976) (arguing that the distinction is clear, but that the difficulties arise in applying it).
27. See generally Anthony, 8 Admin L J Am U 1 (cited in note 25).
28. See Air Transport Association of America v Department of Transportation, 900 F2d 369, 382 (DC Cir 1990) ("assum[ing] a spectrum of rules running from the most substantive to the most procedural" based upon the proximity of the conduct they regulate to "primary conduct"), vacated without opinion and remanded for consideration of mootness, 498 US 1077 (1991).
29. See William Funk, A Primer on Nonlegislative Rules, 53 Admin L Rev 1321, 1322 (2001). See also Community Nutrition Institute v Young, 818 F2d 943, 950 (DC Cir 1987) (Starr concurring in part and dissenting in part).
30. See, for example, Manning, 72 Geo Wash L Rev at 893-94 (cited in note 18) (claiming that the DC Circuit's case law demonstrates that interpretive rules can be binding); Robert A. Anthony, Interpretive Rules, Policy Statements, Guidances, Manuals, and the Like - Should Federal Agencies Use Them to Bind the Public?, 41 Duke L J 1311, 1313-14 (1992) (claiming that interpretive rules are, as a practical matter, binding because agencies can enforce them).
31. But see Michael Asimow, Public Participation in the Adoption of Interpretive Rules and Policy Statements, 75 Mich L Rev 520, 542 (1977) ("Congress ... enshrined the difference between legislative and interpretive rules in the APA.").
32. 5 USC § 553(b)(3)(A). The APA uses the term "interpretative rule." Many courts substitute the term "interpretive rule" and I do so freely as well.
33. 5 USC § 553(d); United States Department of Justice, Attorney General's Manual on the Administrative Procedure Act 30 n 3 (1947), reprinted in William F. Funk, Jeffrey S. Lubbers, and Charles Pou, Jr., eds, Federal Administrative Procedure Sourcebook 33, 62 (ABA 3d ed 2000).
34. 5 USC § 552(a)(1)(D).
35. See, for example, Skidmore v Swift & Co, 323 US 134, 139 (1944) (holding, prior to passage of the APA, that Congress did not grant an Administrator the power to make legislative rules, but rather only to offer nonbinding interpretations).
36. See William Funk, Legislating for Nonlegislative Rules, 56 Admin L Rev 1023 (2004);
37. William Funk, When is a "Rule" a Regulation? Marking a Clear Line between Nonlegislative Rules and Legislative Rules, 54 Admin L Rev 659 (2002); Asimow, 75 Mich L Rev at 542 (cited in note 31).
38. See Richard J. Pierce, Jr., Rulemaking and the Administrative Procedure Act, 32 Tulsa L J 185, 186-87 (1996). See also Davis, 2 Administrative Law § 7:8 at 36, § 7:10 at 51-52 (cited in note 22) (insisting that a legislative rule "is the product of an exercise of delegated legislative power to make law through rules. An interpretive rule is any rule an agency issues without exercising delegated legislative power to make law through rules.").
39. 5 USC § 553(b)(3)(B).
40. Consider Community Nutrition Institute, 818 F2d at 950 (Starr concurring in part and dissenting in part), quoting Pacific Gas & Electric Co v FPC, 506 F2d 33, 38 (DC Cir 1974) ("The critical distinction between a substantive rule and a general statement of policy is the different practical effect that these two types of pronouncements have in subsequent administrative proceedings.").
41. See, for example, Anthony, 8 Admin L J Am U at 7-8, 11-12 (cited in note 25) (claiming that interpretive rules bind the public while policy statements do not). But see Koch, 64 Georgetown L J at 1051-53 (cited in note 26) ("Although attempts have been made to distinguish [interpretive rules from general statements of agency policy], there appears to be no analytical purpose served by such a distinction because the concepts that relate to these and other nonlegislative rules are the same.").
42. See, for example, Manning, 72 Geo Wash L Rev at 894 (cited in note 18).
43. See id at 893-94: [T]he [DC Circuit's] cases tend to ask the intertwined questions whether a nonlegislative rule has a "binding" effect and, if so, whether that effect can be ascribed to "interpretation." ... If a nonlegislative rule does have a binding effect, it will be upheld only if it can be justified as a mere interpretation of an antecedent statute or legislative rule as opposed to an act of independent policymaking. Roughly speaking, an interpretive rule provides an interpretation of existing law, be it statutory or regulatory. Thus, the interpretive rule's force derives from the existing legal duty inherent in the existing legislative rule or statute. See, for example, General Motors, 742 F2d at 1565 ("[I]f by its action the agency intends to create new law, rights or duties, the rule is properly considered to be a legislative rule.").
44. See Anthony, 8 Admin L J Am U at 10 (cited in note 25).
45. There is some dispute about whether a spurious rule is invalid or simply cannot serve the binding effect that an agency wants to give to it. In Hoctor, Judge Posner posed the issue in the former way. The court could have treated the eight-foot fence rule as a statement of the agency's intent to interpret. Although the agency would have to defend the interpretation in a subsequent enforcement proceeding as a lawful interpretation of the structural strength rule, the interpretive rule or policy statement would remain valid, just not as a binding legislative rule.
46. Funk, 54 Admin L Rev at 664-65 (cited in note 36) (arguing that the fact that the rule was adopted without notice and comment does not make it "an invalid legislative rule; it means that the [rule] simply cannot provide the legal basis for assessing a violation of the secure containment regulation"). See also General Motors, 742 F2d at 1565.
47. Funk, 53 Admin L Rev at 1325-26 (cited in note 29).
48. Id.
49. See id at 1326. Consider American Mining Congress v Mine Safety & Health Administration, 995 F2d 1106, 1112 (DC Cir 1993): [The nature of the rule can be] ascertained 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 benefits or ensure the performance of duties, (2) whether the agency has published the rule in the Code of Federal Regulations, (3) whether the agency has explicitly invoked its general legislative authority, or (4) whether the rule effectively amends a prior legislative rule. If the answer to any of these questions is affirmative, we have a legislative, not an interpretive rule. Judge Williams, the author of American Mining Congress, later revised his view of these criteria modestly, suggesting that publication in the CFR is only a "snippet" of evidence. See Health Insurance Association of America, Inc v Shalala, 23 F3d 412, 423 (DC Cir 1994).
50. See, for example, Troy Corp v Browner, 120 F3d 277, 287 (DC Cir 1997) ("We will also consider an agency's characterization of its own actions, although that characterization is not dispositive."); American Portland Cement Alliance v EPA, 101 F3d 772, 776 (DC Cir 1996) ("An agency's characterization of an administrative action, though not dispositive of reviewability, may provide guidance as to whether a pronouncement is a regulation."); Pacific Gas and Electric Co v FPC, 506 F2d 33, 39 (DC Cir 1974) ("Often the agency's own characterization of a particular order provides some indication of the nature of the announcement.").
51. Consider Pacific Gas and Electric Co, 506 F2d at 38 ("The critical distinction between a substantive rule and a general statement of policy is the different practical effect that these two types of pronouncements have in subsequent administrative proceedings. . . . A general statement of policy . . . does not establish a binding norm.") (quotation marks omitted).
52. See, for example, Appalachian Power Co v EPA, 208 F3d 1015, 1021 (DC Cir 2000): If an agency acts as if a document issued at headquarters is controlling in the field, if it treats the document in the same manner as it treats a legislative rule, if it bases enforcement actions on the policies or interpretations formulated in the document, if it leads private parties or State permitting authorities to believe that it will declare permits invalid unless they comply with the terms of the document, then the agency's document is for all practical purposes "binding."
53. See id. See also Anthony, 41 Duke L J at 1328-29 (cited in note 30). As Pierce points out, however, the practically binding effects test would apply quite broadly. See Richard J. Pierce, Jr., 1 Administrative Law Treatise § 6.3 at 323 (Aspen 4th ed 2002). Agencies regularly treat internal documents as more or less binding rules of thumb regarding enforcement. Id. The practically binding test would require virtually all of these documents to go through notice and comment proceedings.
54. See Funk, 54 Admin L Rev at 664 (cited in note 36).
55. Hoctor, 82 F3d at 170.
56. See note 35 and accompanying text.
57. Davis, 2 Administrative Law § 7:9 at 47-48 (cited in note 22) (explaining that the APA has been interpreted to distinguish between legislative and interpretative rules). See also Pierce, 1 Administrative Law § 6.4 at 325 (cited in note 52): [Section] 553 [of the APA] requires notice and comment procedures for all rules except those specifically exempt, e.g., interpretative rules and rules of procedure. Based on preAPA practice and the legislative history of the APA, however, courts universally understand this language to draw a distinction between legislative rules and interpretative rules.
58. Hoctor, 82 F3d at 170.
59. Id.
60. See, for example, Mark Seidenfeld, A Civic Republican Justification for the Bureaucratic State, 105 Harv L Rev 1512, 1559-60 (1992) (arguing that informal rulemaking, through "comment procedures, provide[s] relatively easy access to the discourse among interest groups and the dialogue between those groups and decisionmakers").
61. Hoctor, 82 F3d at 171.
62. See, for example, Orengo Caraballo v Reich, 11 F3d 186, 195 (DC Cir 1993) ("Ultimately, an interpretive statement simply indicates an agency's reading of a statute or a rule."); Gibson Wine Co, Inc v Snyder, 194 F2d 329, 331 (DC Cir 1952) ("Generally speaking,. . . 'regulations,' 'substantive rules' or 'legislative rules' are those which create law, usually implementary to an existing law; whereas interpretive rules are statements as to what the administrative officer thinks the statute or regulation means."). See also Manning, 72 Geo Wash L Rev at 920 & n 138 (cited in note 18) (collecting cases and stating that "the D.C. Circuit asks whether a nominal 'interpretative rule,' in fact, merely interprets a statute or legislative regulation rather than makes new law").
63. General Motors Corp v Ruckelshaus, 742 F2d 1561, 1565 (DC Cir 1984), quoting Citizens to Save Spencer County v EPA, 600 F2d 844, 876 n 153 (DC Cir 1979).
64. See Hoctor, 82 F3d at 170 ("[R]easonable but arbitrary (not in the 'arbitrary or capricious' sense) rules . . . are consistent with the statute or regulation under which the rules are promulgated but not derived from it, because they represent an arbitrary choice among methods of implementation.").
65. Id. Posner analogizes the choice of arbitrary height requirements for containment fences with the arbitrary choice of a number of years of statutes of limitations. Id. Nothing inherent in the idea of a tort suggests a specific number of years, nor does anything inherent in the idea of structural strength suggest eight feet as opposed to six feet.
66. Id at 170-71. For example, Posner analogizes the notice of proposed rulemaking to a bill and the reception of written comments to the hearing on the bill. Id at 171.
67. Id at 171.
68. 995 F2d 1106 (DC Cir 1993).
69. Id at 1108.
70. See id at 1113 (holding that the agency "offer[ed] no interpretation that repudiates or is irreconcilable with an existing legislative rule" and was therefore a nonlegislative rule). Why these numerical standards were properly nonlegislative and the numerical standards in the dangerous animals interpretation legislative (spurious) is somewhat mysterious Surely the x-ray reading rating was no more uniquely derivable from the statute than the eight-foot fence requirement.
71. See Hoctor, 82 F3d at 171. This idea has been echoed elsewhere in Posner's writings. See, for example, Richard A. Posner, The Rise and Fall of Administrative Law, 72 Chi Kent L Rev 953, 962 (1997): When the fixing of a rule requires either the kind of scientific or technical data obtainable only in a rulemaking proceeding, or simply an arbitrary judgment, the adjudicative process is unusable. Notice and comment rulemaking must be employed, and the required rule is therefore a legislative rather than an interpretive rule.
72. Hoctor, 82 F3d at 171 ("To switch metaphors, the 'flatter' a rule is, the harder it is to conceive of it as merely spelling out what is in some sense latent in a statute or regulation, and the eight-foot rule in its present form is as flat as they come.").
73. See id (noting that government lawyers attempted to "loosen up the rule . . . to make it more palatable to the reviewing court" by implying that Hoctor might not have run afoul of the Department had he built a moat or an electrified six-foot fence).
74. See id (contrasting a more flexible approach that "t[ies] the rule to the animating standard" with the agency's rigid rule that "stand[s] free of the standard, self-contained, unbending, arbitrary").
75. See id.
76. See id.
77. For example, a major dispute in the 1970s centered on an attempt by some judges in the D.C. Circuit to calibrate procedural requirements to nature and magnitude of an agency's decisions. See, for example, NRDC v Nuclear Regulatory Commission, 547 F2d 633, 653 (DC Cir 1976), revd as Vermont Yankee Nuclear Power Corp v NRDC, 435 US 519 (1978). The impulse to calibrate agency procedures and the intensity of judicial review to the nature of the underlying agency decision is still evident in much of modern administrative law. Consider the possibility of a "major questions" exception to Chevron deference. See Cass R. Sunstein, Chevron Step Zero, 92 Va L Rev 187, 231, 243 (2006) (considering the view that "Chevron deference is not owed for agency decisions of great 'economic and political significance'").
78. See Peter L. Strauss, From Expertise to Politics: The Transformation of American Rulemaking, 31 Wake Forest L Rev 745, 755-56 (1996) (discussing why rulemaking is more democratic than adjudication).
79. Hoctor, 82 F3d at 171.
80. United States Department of Justice, Attorney General's Manual at 30 n 3 (cited in note 33). See also National Latino Media Coalition v FCC, 816 F2d 785, 787-88 (DC Cir 1987) (holding that statements by the FCC "do not amount to adoption of a 'legislative rule,' which is a rule that is intended to have and does have the force of law").
81. Vietnam Veterans of America v Secretary of the Navy, 843 F2d 528, 537 (DC Cir 1988) ("[I]t makes sense to say that statements whose language, context and application suggest an intent to bind agency discretion and private party conduct - the sort of statements requiring compliance with § 553 - will have that effect if valid; interpretive rules or policy statements will not, regardless of their validity.").
82. Whether a rule has the force of law might be said to turn, in part, on whether Congress has given an agency requisite authority and whether the agency has exercised it. American Postal Workers Union, AFL-CIO v United States Postal Service, 707 F2d 548, 558 (DC Cir 1983); Skidmore, 323 US at 137.
83. See Manning, 72 Geo Wash L Rev at 894-95 (cited in note 18) (claiming that such a distinction is only a matter of degree of policymaking discretion, and that at the margins the line becomes too fine for courts to police in a principled way).
84. See Community Nutrition Institute v Young, 818 F2d at 950 (Starr concurring in part and dissenting in part); E. Donald Elliott, Reinventing Rulemaking, 41 Duke L J 1490, 1491 (1992); Funk, 54 Admin L Rev at 664 (cited in note 36).
85. See Auer v Robbins, 519 US 452, 461 (1997) (holding that an agency's view of its own regulation should be upheld unless plainly erroneous or inconsistent with the regulation); Bowles v Seminole Rock & Sand Co, 325 US 410, 414 (1945) (same).
86. See American Mining Congress, 995 F2d at 111.
87. 533 US 218 (2001).
88. See generally Sunstein, 92 Va L Rev 187 (cited in note 76); Lisa Schultz Bressman, How Mead Has Muddled Judicial Review of Agency Action, 58 Vand L Rev 1443 (2005); Adrian Vermeule, Mead in the Trenches, 74 Geo Wash L Rev 347 (2003).
89. 533 US at 226-27.
90. Mead's language initially appeared to make Step Zero turn entirely on procedural formality. Unfortunately, the precise relationship between the delegation of force-of-law authority and procedural formality remained elusive. The Court clearly stated that a lack of procedural formality does not preclude Chevron deference. Mead, 533 US at 231 ("The fact that the tariff classification here was not a product of such formal process does not alone, therefore, bar the application of Chevron"). And at least Justice Breyer thinks procedural formality is not a sufficient condition for Chevron deference either. See National Cable & Telecommunications Assn v Brand X Internet Servs, 545 US 967, 1003-05 (2005) (Breyer concurring).
91. See generally Matthew C. Stephenson, The Strategic Substitution Effect: Textual Plausibility, Procedural Formality, and Judicial Review of Agency Statutory Interpretations, 120 Harv L Rev 528 (2006).
92. See generally M. Elizabeth Magill, Agency Choice of Policymaking Form, 71 U Chi L Rev 1383 (2004) (exploring why agencies choose to use different types of policymaking and arguing that courts review this choice indirectly through different standards of review for each type of policymaking available to agencies).
93. See Chevron U.S.A. Inc v NRDC, 467 US 837, 843 (1984) ("The power of an administrative agency . . . necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress."), quoting Morton v Ruiz, 415 US 199, 232 (1974).
94. SEC v Chenery Corp, 332 US 194, 202 (1947) ("In performing its important functions . . . , an administrative agency must be equipped to act either by general rule or by individual order.").
95. United States v Florida East Coast Railway, 410 US 224 (1973).
96. Vermont Yankee Nuclear Power Corp v NRDC, 435 US 519, 544 (1978) (discussing the "very basic tenet of administrative law that agencies should be free to fashion their own rules of procedure").