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Administrative Law
SUNY Buffalo Law School
Boyer, Barry B.

Informal Rulemaking 91-112
ADMINISTRATIVE LAW – INFORMAL RULEMAKING (91 -112)
FORMAL, INFORMAL OR HYBRID RULEMAKING
·         APA only recognizes formal and informal rulemaking
·         Hybrid rulemaking is what we call it when Congress has imposed additional procedures or substantially different procedures, beyond those required by the APA.
·         Most rules are made by informal rulemaking — these rules are only subject to the notice and comment procedures required by section 553 and must be accompanied by a statement of basis and purpose when they are promulgated
·         If its formal rulemaking then sections 556-557 are at play which essentially require a trial type proceeding to promulgate a rule
·         US v. Allegheny-Ladlum Steel Corp – the Court interpreted when § 553 triggers the requirement of formal rulemaking
·   Disappointed with a rule promulgated by the ICC using informal rule making, some shippers including Alleghany Ludlum Steel Corporation, sought judicial review — they argued that the Esch Act required the ICC to hold a hearing before promulgating any rule, which the agency did not do
·   They claim that the ICC’s procedures depart from § 556 and § 557 of the Act
·   Court said these sections only govern rulemaking only when § 553 so requires and these sections only come into play in formal rulemaking (when rules are required by statute to be made on the record after opportunity for an agency hearing
·   The Esch Act does not require that such rules be made on the record
·   The court said that the distinction was important because some statutes actually require determination on the record
·   § 556 and 557 only apply when the agency action, in addition to providing for a hearing, prescribe that it also be on the record
·   The exact words “on the record” do not have to be used
·         United States v. Florida East Coast Railway – reiterated that decision and clarified when a hearing requirement triggers the need for a trial type proceeding in a rulemaking even if formal rulemaking is not required
·   Appellees, 2 railroad companies, challenged the order of the Commission on both substantive and procedural grounds
·   The District Court held that the language of §1(14)(a) of the ICC required the commission in a proceeding like this one, to act in accordance with § 556(d) of the APA and that the Commissions determination to receive submissions from the appellees only in written form was a violation of that section because the respondents were “prejudiced” by that determination
·   Court granted leave to appeal and held that the Commission’s proceedings were only governed by § 553 of the Act and that the appellees received the “hearing” required by § 1(14)(a) of the ICA
·   In USv. Allegheny – court held that the language of § 1(14)(a) of the ICA authorizing the commission to act “after hearing” was not the same as a requirement that the rule be made on the record after opportunity for agency hearing
·   District Court equivocated “after hearing” with on the record after opportunity for agency hearing
·   Although the term hearing has a lot of different meanings in this case it does not mean either the right to present evidence orally and to cross examine opposing witnesses or the right to present oral argument to the agency’s decision makers
·         Vermont Yankee Nuclear Power Corp. – considered whether the courts can impose hybrid rulemaking procedures on an agency
·   The Natural Resources Defense Council challenged a rule promulgated by the Atomic Energy Commission
·   The NRDC contended that the absence of discovery or cross examination denied it a meaningful opportunity to participate in the rulemaking proceedings
·   District Court remanded the rule to the AEC
·   Court said that agencies are free to grant additional procedural rights in the exercise of their discretion, but reviewing courts are not free to impose them if the agencies have not chosen to grant them
·   Absent constitutional constraints or extremely compelling circumstances – agencies should be free to create their own rules of procedure and to pursue methods of inquiry allowing them to take care of their many duties
·         1. If courts continued to review agency proceedings to determine whether the agency used procedures that were tailored to what the court considered to be the best or correct result, judicial review would be totally unpredictable
·         2. The court in these cases reviewed the agency’s choice of procedure on the basis of the record actually produced at the hearing and not on the basis of info available to the agency when it made a decision to structure the proceedings in a certain way
·         3. This sort of review misconceives the nature of the standard of judicial review of an agency rule
·         Informal rulemaking need be based solely on the transcript of a hearing held before an agency – thus the adequacy of the “record” in this type of proceeding is not correlated directly to the type of procedural devices used but rather is dependent on whether the agency has followed the statutory mandate of the APA
 
Exparte and Related Problems in Rulemaking 112-126
Friday, October 10, 2008
3:24 PM
EX PARTE PROBLEMS IN RULE MAKING
 
Problem 2-6: Ex Parte Communications
·         The NABP learns that the USDA is in the process of trying to write a preamble justifying this decision, and wants to engage in a concerted effort to try to demonstrate to the Secretary of Agriculture that such a requirement would impose additional costs while actually harming students’ health.
·         Students will throw away the vegetables and not eat at all
·         NABP contacts senators, congresspersons to tell them of USDA’s expected action
·         NABP contacts the Office of Management and Budget, in the Executive Office of the President, to present its case that USDA is about to make a terrible mistake
·         NABP contacts the Secretary of Agriculture who has already had calls from Capitol Hill
·         The Secretary wants to know what he can and cannot do in response to this onslaught
 
HOME BOX OFFICE v. FEDERAL COMMUNICATIONS COMMISSION (1977)
 
·         FACTS & PROCEDURAL POSTURE:
 
·         In the early days of cable, the FCC strictly regulated what cable programmers could provide
·         In this rulemaking the FCC had proposed to loosen those restrictions
·         After the comment period, however, the FCC met with many of the interested persons, trying to negotiate an outcome acceptable to all
·         After the rule was adopted it was challenged by a number of the parties — one of the issues was the ex parte communications the FCC had engaged in.
 
·         The record shows that the Commission had numerous exparte communications that were not necessarily made available during the public comment period — these communications showed that the Commission may have relied on these candid private in making their decisions regarding the final pay cable rules thus making the extensive public discussion irrelevant
 
Analysis
·         Court noted that the possibility that there is here one administrative record for the public and this court and another for the Commission and those “in the know” is intolerable
·         Court engages in a necessary balancing act stating that information gathered exparte from the public which becomes relevant to a rulemaking will have to be disclosed at some time but on the other hand, they recognize that informal contacts between agencies and the public are the “bread and butter” of the process of administration and are completely appropriate so long as they do not frustrate judicial review or raise serious questions of fairness
·         Communications which are received prior to issuance of a formal notice of rule making do not in general have to be put in a public file
·          
·         RULE: Once a notice of proposed rulemaking has been issued, any agency official or employee who is or may reasonably be expected to be involved in the decisional process of the rulemaking proceeding, should “refuse to discuss matters relating to the disposition of a rulemaking proceeding with any interested private party, or an attorney or agent for any such party, prior to the agency decision
 
·         Any written document or a summary of any oral communication
 
SIERRA CLUB V. COSTLE (1981)
 
·         Facts & Procedural Posture: This case involved EPA’s adoption of a rule pursuant to the 1977 Amendments to the Clean Air Act to govern emissions from coal burning power plants. During the process of the rulemaking, EPA subject of ex parte contacts by interested parties, legislators, and the President’s staff
·         The Environmental Defense Fund (EDF) challenges this part of the final regulation on procedural grounds, contending that although there may be evidence supporting the 1.2 lbs/Mbtu standard, EPA should have and would have adopted a stricter standard if it had not engaged in post comment period irregularities and succumbed to political pressures
 
EDF’S PROCEDURAL ATTACK
 
·         Aside from a reference to a telephone call from an EPA official to the CEO of the National Coal Association, EDF’S procedural objections stem from either (1) comments filed after the close of the official comment period, or (2) meetings between EPA officials and various government and private parties interested in the outcome of the final rule, all of which took place after the close of the comment period.
·          
                  Late Comments
 
                  Comment period ended Jan. 15, 1979 — EPA received almost 300 written submissions on the proposed rule
                  EPA accepted these comments and entered them all on the administrative docket but did not officially reopen the comment period nor did it notify the public through the Federal Register or by any other means that it ha received and was entering late comments
 
                  Meetings
 
·         EDF objects to nine different meetings
·         EDF believes that the communications taken as a whole had such a serious impact on the rulemaking that it violated their due process rights and that these ex parte contacts were procedural errors of such magnitude that this court must reverse
·         EDF is not specific but rather they characterize all post comment communications with EPA as ex parte and as such they are a violation of due process
·         Court declines to label all post comment communications as ex parte — rather they must evaluate the various communications in terms of their timing, source, mode, content and the extent of their disclosure on the docket in order to decide whether any of the violated the requirements of the Clean Air Act or due process
 
STANDARD FOR JUDICIAL REVIEW OF EPA PROCEDURES
 
·         The court’s scope of review is limited by the procedural requirements of the Clean Air Act which states that the court can reverse the Administrator’s decision for procedural error only if (i) his failure to observe procedural requirements was arbitrary and capricious (ii) and objection was raised during the comment period, or the grounds for such objection arose only after the comment period and objection is of central relevance and (iii) the errors were so serious and related to matters of such central relevance to the rule that there is a substantial likelihood that the rule would have been significantly changed is such errors had not been made
 
·         Authority to reverse informal administrative rulemaking is governed Vermont Yankee– SC cautioned the court against imposing its own notion of proper procedures upon an administrative agency entrusted with substantive functions by Congress
 
STATUTORY PROVISIONS CONCERNING PROCEDURE
 
·         The 1977 Amendments required the agency to establish a “rulemaking docket” for each proposed rule which would form the basis for judicial review
·         There is no mention of any restrictions upon ex parte contacts but the statute did contemplate that there would be submission of comments during a pre

ify as adjudication
·         Informal adjudication is not governed by the APA
·         Formal adjudication = (§ 555, 556, 557)
 
·         Normally an agency will develop procedures applicable to particular types of informal adjudications and publish them in the Code of Federal Regulations
·         Content of procedures applicable to informal adjudication can also be affected by the requirements of the due process clause of the fifth amendment ( and the 14th amendment in state agencies)
·         A due process challenge is unlikely to arise when an agency uses formal adjudication because this process already includes nearly all the procedural protections that are associated with a formal trial.
·          § 554 contains some of the procedures required in formal adjudication
o    Applies in every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing
o    If  § 554 applies, it invokes  § 556 and § 557 as well.
o    If  § 554 does not apply, the agency may provide for an adjudication governed only by the minimal APA requirements of § 555 and § 558 due process or any other statute
 
·         Wong Yang Sung – The Supreme Court concluded that because the due process clause of the 5th amendment required a hearing on the record prior to deportation, the statue for deportation should be read to require such a hearing, triggering the requirements of the APA concerning adjudication.
 
Problem 3:1 – hold a hearing, determine that the work or activity is obscene, liable to the endowment, opportunity for judicial review
·         Regulations — hearings not subject to § 554, 556 and 557
o    Reasoning: because the hearings are likely to focus on person’s perceptions and experts’ opinions so techniques designed to determine disputed facts, especially whether persons are telling the truth are unnecessary
 
SEACOAST ANTI POLLUTION LEAGUE V. COSTLE (1978)
 
FACTS: PSCO filed an application with the EPA for permission to discharge heated water into the Hampton-Seabrook Estuary which runs into the Gulf of Maine. § 301(a) of the FWPCA prohibits the discharge of any pollutant unless the discharger, the point source operator, has obtained an EPA permit — heat is a pollutant
— the parties agree that the cooling system PSCO has proposed does not meet the EPA standards — PSCO applied for discharge permit under § 402 of the FWPCA and also an exemption from the EPA standards pursuant to § 316 of the FWCPA
 
GOVERNING STATUTE: Under § 316 (a) a point source operator who “after an opportunity for a public hearing” can demonstrate to the satisfaction of the administrator that the EPA’s standards are more stringent than necessary, may be allowed to meet a lower standard.
 
PROCEDURAL POSTURE: Case is before court on a petition by Seacoast and the Audobon society of NH (petitioners) to review a decision by the Administrator of the EPA. Petitioners assert that the proceedings by which the EPA decided this case contravened certain sections of the APA governing adjudicatory hearings . Respondents answer that the APA does not apply to proceedings held pursuant to § 316 or §402 of the FWCPA. This dispute is around the meaning of the introductory phrases of § 554(a) of the APA — “This section applies in every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing”
 
HOLDING: Unless a statute otherwise specifies, an adjudicators hearing subject to judicial review must be on the record. The statute does not indicate that the determination need not be on the record and we find no indication of a contrary Congressional intent. The proceedings should be judged based on § 554, 556, 557.
 
ANALYSIS: Court rejects the position of intervenor PSCO that the precise words “on the record” must be used to trigger the APA. We must look at the substantive nature of the hearing.
·         It is significant that § 509 of the FWPA provides for judicial review of the EPA determination
·          § 509 standing alone does not satisfy the “on the record” requirement because the APA holds that there can be review of agency decisions that were not on the record.
·         Looking at the nature of the decision at issue — the EPA Administrator must have specific factual findings about the effects of discharges from a specific point source.
·         Administrator must determine whether or not to grant a discharge permit — this is not about general policy making — only the rights of the specific applicant will be affected.
·         Adversarial hearings will be helpful in guaranteeing both reasoned decision making and meaningful judicial review —- this proceeding was conducted in order to adjudicate disputed facts in particular cases, not for the purpose of promulgating policy type rule or standards