Rulemaking “One of the greatest inventions of modern government” But this depends on the rule and the affected parties Gored ox theory

Rulemaking  Usually, it is not the process of making the rule, but rather the substance of the rule  Depending on the above☺☺☻☻ or not  Supreme Court has one rule: deference

Rulemaking  Difficult to challenge the substance of an agency rule  Two mechanisms to challenge or invalidate: either attack its substantive provisions or the procedure by which it was promulgated  If a rule is defective on either ground, it will not be placed into effect

RULEMAKING  In the beginning, there were many challenges to rules on procedural grounds  Supreme Court made this type of attack difficult  Cardinal Rule: If you don’t like the agency action, win on the agency level

BASIC RULEMAKING  Triggering of Rulemaking Process  How to begin  First, the agency many be commanded to act  Congress may write interim agency rules  Agency may determine it needs rules  Sometimes private citizens get into the act  Section 553(e) gives “interested person the right to petition for the issuance, amendment or repeal of a rule.”

RULEMAKING  The APA emphasizes agencies should engage in rulemaking as the basic process to announce new policy  APA defines rule, however, broadly  Rulemaking procedures are in 553

The Scope of 553  APA: 551 definition of agency  553(a) exemptions  Other exemptions which are generic  Notice requirements

Comments and Rulemaking  APA hallmark: Solicitation of comments from all interested persons  Agency must accept comments  Most submissions are in writing  Sometimes there are oral hearings

Comments  What does an agency do with the comment?  What does the APA term “consider” really mean  Good faith requirement  Agency not bound by comments  Agency may invoke its experience

Comments  Reviewing Court will be suspicious if agency ignores the comments

Promulgation of Final Rule  This step completes the rulemaking process  Two important steps: 1. The agency must prepare after consideration of the comments and other matter in the rulemaking record, “a concise general statement of [the] basis and purpose” of the final rule.

Promulgation  Step 2: The rule goes into effect no earlier than 30 days after the rule’s publication  Exceptions to 553(d) 30-day delay period: a rule that provides an exemption or relieves a restriction a rule that provides an exemption or relieves a restriction Interpretative rules and statements of policy Interpretative rules and statements of policy Finding of good cause Finding of good cause

Impact of Florida Coast

Federal Register?  Contents Federal Register  Vol. 72, No. 34  Wednesday, February 21, 2007      Agricultural Marketing Service   RULES  Nectarines and peaches grown in California  Correction,  7821 [07–783] [TEXT] [PDF]   Agriculture Department   See Agricultural Marketing Service  See Forest Service   Army Department   See Engineers Corps   Centers for Disease Control and Prevention   NOTICES  Meetings:  National Center for Environmental Health/Agency for Toxic Substances and Disease Registry—  Scientific Counselors Board,  7888 [E7–2885] [TEXT] [PDF]   Children and Families Administration 

What constitutes notice and hearing?  [Federal Register: February 21, 2007 (Volume 72, Number 34)]  [Notices]  [Page 7906]  From the Federal Register Online via GPO Access [wais.access.gpo.gov]  [DOCID:fr21fe07-66]  =======================================================================   INTERNATIONAL TRADE COMMISSION  [Inv. No. 337-TA-593]   In the Matter of Certain Digital Cameras and Component Parts  Thereof; Notice of Investigation  AGENCY: U.S. International Trade Commission.  ACTION: Institution of investigation pursuant to 19 U.S.C   SUMMARY: Notice is hereby given that a complaint was filed with the  U.S. International Trade Commission on January 19, 2007, under section  337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337, on behalf of  St. Clair Intellectual Property Consultants, Inc., of Grosse Pointe,  Michigan. Letters supplementing the Complaint were filed on February 7  and February 9, The complaint, as supplemented, alleges  violations of section 337 in the importation into the United States,  the sale for importation, and the sale within the United States after  importation of certain digital cameras and component parts thereof by  reason of infringement of claim 16 of U.S. Patent No. 5,138,459; claims  1-3, 8, 10, 12, and of U.S. Patent No. 6,094,219; claim 1 of U.S.  Patent No. 6,233,010; claims 1-4 of U.S. Patent No. 6,323,899; and  claims 5, 6, and 9-12 of U.S. 6,496,222. The complaint further alleges  that an industry in the United States exists as required by subsection  (a)(2) of section 337.  The complainant requests that the Commission institute an  investigation and, after the investigation, issue a permanent exclusion  order and permanent cease and desist orders.

Automotive Parts & Accessories Association v. Boyd  Statement’s purpose: demonstrate to the public AND to the court that the agency has done its job  “In a manner calculated to negate the dangers of arbitrariness and irrationality in the formulation of rules for general application in the future.”  The statement is one of the few bits of information which courts may use to analyze a rule if validity is challenged.

 The APA requires an agency to set forth: “a concise general statement of their basis and purpose.”  Automotive Parts sets forth the requirement for a statement of basis and purpose  Court cautions against “an overly literal reading of the terms “concise and general.”

Automotive Parts  Emphasizes that this requirement must be interpreted so the reviewing court  may see what the major issues of policy were and  Why the agency reacted to them as it did

Judicial Review  Pacific States Box & Basket:  National Tire Dealers & Retreaders: what did the agency fail to do?  Dismissed a factor with an “unconvincing assertion.”

Motor Vehicle Manufacturers v. State Farm  Court reviewed the rescission of a DOT standard  DOT, in the original standard, determined car seat belts that required buckle up weren’t very effective  Needed passenger safety device that did not require specific action of occupant  Department could not make up mind:

State Farm  Air bags? Belt restraints?  Modified Standard 208: chose one or the other  President Regan takes office  New Secretary commissions rulemaking to repeal 208  Insurance companies challenge the rescission

State Farm  Supreme Court grants certiorari  Looks at the entire history: the promulgation and the rescission  Concludes: agency has authority to reconsider, BUT here OUT OF CONTROL  DOT failed to articulate plausible reasons for its rescission

State Farm  What troubled the Supreme Court?  Absolutely no change in external circumstances  People were still being injured a decade later  Why is the earlier rule now unnecessary  DOT failed to address this very issue

State Farm  But what about the comments?  Did the comments differ from when the Modified Standard was promulgated  Were there any changes in the agency’s enabling act  Had the legislature taken action compelling the rescission?

State Farm—Bottom line  Agency rule set aside because --The agency failed to consider an obvious alternative --The agency did not adequately explain--The agency did not adequately explain