Legislative rule (regulation)
Has the effect of law
Generally just called a rule or regulation
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
The Legislature can delegate the power to make
rules to the agency
Some agencies do not have rulemaking
Rules cannot exceed the authority in the
agency's enabling legislation or the
Properly promulgated rules have the same effect
as statutes 3
The Agency as Legislature
The shift from adjudications to rulemaking
started in the 1950s
The courts try to allow an agency to make
Parallels the growth of state and federal
The Impact of Rules
Congress often delegates details to agencies
because the issue is a political hot potato
Wetland policy is mostly driven by regulations
based on vague statutory authority and
permissive court decisions
The EIS process is based on regulations
Thus agencies may develop and implement the
most intrusive or controversial policies
Is this good policy?
How do you make a Rule?
Publish the proposed rule and what it is based on
for public comment
The Federal Register and LA Register are where
rules are published first
Review and address public comments and publish
these along with any modifications in the rule
Codify the rule after it is effective
Rules are Codified in Code of Federal
Regulation and the LA Administrative Code
Why Make Rules?
Participation and Generality
Allow Public Participation
Adjudications are limited to the parties
Allow Political input
Rulemaking is a public process which allows
Adjudications are tied to specific facts and parties
Rules are generally applicable, although they may be
Adjudications, like trials, are driven by
specific facts and can treat similar situations
Rules set up a general framework that treats
all parties uniformly
Rules are the fairest way to make big
Adoption of National Standards
National standards can be adopted through
agency rules, harmonizing practice across
National building codes
CDC guidelines on food sanitation
Recommendations of the Advisory Committee
on Immunization Practices
LA and building codes
While a rulemaking can be expensive and time
consuming, it can settle issues across a large
number of adjudications
Rulemaking can also eliminate many hearings by
resolving factual questions
In disability cases, rules can be used to
establish what constitutes a disability, rather
than making it as case by case determination.
Better Guidance for the Public
Rules are published and codified
State rules were hard to find, but the Internet is
making this better
Agency adjudications, especially at the state level,
are often not published
There may be no transcript of the full
Rules are binding on everyone, not just the
You can control the outcome of rulemaking
much easier than that of adjudication
Not Dependant on ALJs
Why is this especially important in LA?
More input from across the agency
Directly controlled by agency policy makers
Downside of Rulemaking
Adjudications can be more flexible in the
Rules can be so abstract or overbroad that
they are expensive or difficult to follow
Adjudications are useful when you are not
sure what the rule should be and need more
info and a chance to experiment
Does not do away with the need for
Rulemaking has gotten so complex and time
consuming it has lost some of its value
Rulemaking can go on for years
What is the legal value of a proposed rule that has
not been finalized?
This was the problem for the anti-kickback
Complicated by regulatory conflict and incompetent
The courts and legislature have increased the burden
What is a Rule?
Definition of a Rule
(4) 'rule' means the whole or a part of an agency statement of
general or particular applicability and future effect designed to
implement, interpret, or prescribe law or policy or describing
the organization, procedure, or practice requirements of an
agency and includes the approval or prescription for the future
of rates, wages, corporate or financial structures or
reorganizations thereof, prices, facilities, appliances, services
or allowances therefor or of valuations, costs, or accounting,
or practices bearing on any of the foregoing;
Not a clear definition
Things that are not adjudications or licensing
6) "Rule" means each agency statement, guide, or requirement for
conduct or action, exclusive of those regulating only the internal
management of the agency and those purporting to adopt, increase, or
decrease any fees imposed on the affairs, actions, or persons regulated
by the agency, which has general applicability and the effect of
implementing or interpreting substantive law or policy, or which
prescribes the procedure or practice requirements of the agency.
"Rule" includes, but is not limited to, any provision for fines, prices or
penalties, the attainment or loss of preferential status, and the criteria or
qualifications for licensure or certification by an agency. A rule may be
of general applicability even though it may not apply to the entire state,
provided its form is general and it is capable of being applied to every
member of an identifiable class. The term includes the amendment or
repeal of an existing rule but does not include declaratory rulings or
orders or any fees.
Critical term is general applicability
Remember the standards for a hearing?
If you do not get a hearing, and there is no special
exception such as an emergency or national
security, it is probably a rule
If it is Retrospective, it Should be an
Adjudications are based on things that have
Adjudications can be treated as treated as
precedent, but this is not binding
Adjudications are driven by the available cases
Rules are prospective
Not bound by existing facts
Which are Retrospective?
National Highway Traffic Safety Administration finds that
cars do not protect against side impacts
Proposes rule require engineering changes or side air
OSHA finds auto paint shops are inadequately ventilated
Proposes ventilation rule and requires paying for
health screening of employees who have been
working in the badly ventilated shops
What is the rule says testing is to monitor future
Legislative v. Nonlegislative Rules
(Rules v. Guidance)
A notice and comment rule is only necessary if the rule
changes the legal environment
In many cases, agencies issue explanations of what
they believe their enabling legislation means
These guidelines do not need notice and comment
because they do not change the legal environment,
Can be challenged if they create new legal duties
More later on this.
Rules v. Orders
Narrowing the Scope of Adjudications
FCC must determine if granting a TV station
license is in the public interest
This is a matter of fact that must be determined
in a hearing
Agency promulgates a rule that it is not in the
public interest to own more than 5 TV stations
How does this change the facts to be decided at
the license hearing?
Food Handling Standards
If there were no rules on food handling in
restaurants, what would to be established during
an adjudication before a restaurant could be cited
for not keeping the soup at 140 degrees or hotter?
How does the adoption of comprehensive national
code allow the adjudication to take the form of an
What drove rulemaking in the Regulators?
If the agency has the power to make rules, but no
legislative direction as to when to make them, can
you force the agency to make a rule?
5 U.S.C. §553(e)
(e) Each agency shall give an interested person
the right to petition for the issuance,
amendment, or repeal of a rule.
We will explore this more in Mass. v. EPA
Widely used when the APA was passed, usually in
rate making proceedings
Not typical, in that they were more like
Very time consuming
Must be required by statute
Informal Rulemaking - Notice and
Governed by the APA
Rules that do not require comment to become
Notice and comment rulemaking is not
Congress can establish additional or alternative
Congress could allow agencies to make rules
without comment or public input
APA is only the default if there is no other
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 not
confuse this with court imposed hybrid
rulemaking as in Vermont Yankee
Exemptions to Notice and Comment
Is notice and comment a constitutional
Military and foreign affairs
Why exempt these?
Limiting the term of residence for Iranian
nationals after the hostage incident
National security issues?
Extending asylum to persons subject to
reproductive restrictions in China
Was this just an individual benefit or part of a
Like the code of civil procedure
Does not change the substantive rights of the
Does not change the regulated behavior, only the
process in agency procedures
Actions where Secrecy is Important
Wage and price controls
Bidding on contracts
Negotiations on land purchases and sales
Interim Final Rules
Published and in effect, but will be modified after
comments are in.
Calculations and other non-discretionary rules
Can require notice and comment if the correction
causes a different result
553(b) - Exceptions to Notice
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
No notice means no comment under 553(c)
Exception 1 - Interpretative Rules
It is only explaining the law or providing
guidance for action
IRS audit guidelines
Since they do not change the law, they have
no legal effect
Does that mean you can ignore them?
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
What is the benefit to the regulated parties of
What if the agency is prevented from providing
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 guidance
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?
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?
The “Legally Binding” or “Force of Law”
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?