Hybrid Rulemaking

1. Hybrid Rulemaking • Hybrid rulemaking: When an entity (Congress, agency or courts) requires agency to use procedures beyond the minimal procedures of ' 553 Example – Magnus Moss Act & Clean Air Act (pp. 474 -75) • Congress an agencies routinely engage in hybrid rulemaking to supplement the requirements of Sec. 553 • Can courtstry to impose these additional procedures? • That’s essentially what the HBO court did with its requirements re ex parte contacts. • SCT allowed this for decades – until Vermont Yankee.

2. Vermont Yankee – rulemaking proceedings • After an informal rulemaking proceeding, AEC decided to adopt a rule that used specified numeric valuesrepresenting the “costs” of nuclear waste disposal to use during the cost benefit analysis mandated during the operating licensing hearings for nuclear reactors. • Why would it adopt a rule to use in proceedings rather than consider the costs of nuclear waste on a case-by-case basis in each licensing proceeding? • NRDC (environmental org) challenged the rule/rulemaking proceeding

3. Procedures during the Vermont Yankee rulemaking • Is there a contention that the agency didn’t meet the textual requirements of Sec. 553? Did it actually go beyond those requirements in the procedures it provided? • Why weren’t the procedures used sufficient as far as the NRDC was concerned? What about this situation makes the NRDC want those procedures? • What is the statutory source of the NRDC’s complaint that the AEC/NRC had an obligation to provide more in the way of procedural protection? • NEPA? APA Sec. 553? APA Sec. 706’s “whole record” requirement?

4. Vermont Yankee – the courts • D.C. Circuit’s ruling: • Is its ruling about the substantive defects of the rule or the procedural defects in the proceeding? • How does the Supreme Court characterize the D.C. Circuit’s ruling – as one involving substantive or procedural inadequacies of the rulemaking? • How does the SCT respond to such judicially-imposed “hybrid rulemaking”? • What is it concerned about?

5. Even Vermont Yankee recognizes that agency hearing procedures may be inadequate although they meet the requirements of '553: • For example: • When there is a constitutional due process violation • If the rulemaking would be an adjudication for constitutional purposes • When an agency’s action is an unjustified departure from well-settled agency procedures of longstanding use • Remember Morton v. Ruiz – agencies might have to follow informal policies if the public has come to have an “expectation” that they will follow those policies

6. Are Vermont Yankee, Choc. Mfrs& NSFP consistent? • In Choc. Mfrs& NSFP – courts added significant requirements to notice & SBP requirements of Sec. 553 rulemakings • How can they do this after Vermont Yankee – are decisions no longer good law? • Conventional Wisdom: No – courts use all three decisions all the time. • How to reconcile: • Choc. Mfrs& NSFPrequire NPR/SBP to contain material that clarifies what agency relied on in it’s decision-making process or that show relationship between final/proposed rule. This helps courts to ensure the record is adequate on review – that’s okay • Vermont Yankee viewed lower court as requiring additional procedures during the comment period simply for “fairness” sake. • Lower court was not requiring additional procedures to aid review. Sec. 553 contains all the procedures needed to be FAIR. Courts can’t add additional ones for fairness reasons absent the circumstances in the previous slide.

7. Exceptions to APA § 553’s “notice & comment” rulemaking requirements • Exceptions: • Sec. 553(b) - Interpretive rules & policy statements • Sec. 553(b) – Rules of agency organization, procedure & practice • Sec. 553(b) – When agency for good cause finds that notice/comment is impracticable, unnecessary or contrary to public interest • Why does Section 553(b) allow an agency to avoid the notice and comment procedure with such rules? • What kind of tension does the distinction between substantive and other rules cause?

8. Substantive rules, policy statements & interpretive rules – how are they different? • Legislative Rule: Establishes a standard of conduct which has the force of law - it is finally determinative of the rights/issues to which it is addressed • Pol’y Statement: Publicly announces policy that agency hopes to implement but does not establish a “binding norm” for use in present situation • Interpretive Rule: Describes, clarifies, and reminds the public of a statutory standard or pre-existing rule - does not establish a “binding norm” • Guidance Documents: Internal manuals, directives etc. that provide agency personnel &/or the public with guidance about how the agency is likely to interpret a statute or rule

9. Why have interpretive rules, policy statements & guidance documents if they don’t bind the agency? • Instruct agency personnel how to apply broad/vague laws or regulations (guidance docs/policy manuals) • May influence court’s interpretation of statutes/regs (all) • Inform the public as to the agency’s thoughts on: • agency’s likely interpretation of a vague law/regulation (interpretive rule) • agency’s application of policy in the future (policy statement) • Danger – agencies can come to rely on these informal statements as “binding norms” and try to apply them as “legislative rules” despite not having gone through the Sec. 553 rulemaking process • See, e.g., Morton v. Ruiz – agency applied benefits eligibility guidelines in unpublished Manual as though they were binding

10. Implications of court finding that interpretive rule/policy statement is/is not a legislative rule: • If a court finds agency has applied a pol’y statement/interpretive rule/guidance doc as a binding norm (i.e., like a legislative rule): • That agency action is invalid as applied to challenging party. • Court will force agency to use notice/comment procedures to enact legislative rules if agency wants to use criteria as a binding norm in the future. • If a court finds the manual, etc. is not used as a “binding norm,” the issue in a particular challenge is usually whether the agency’s interpretation of the law via those methods is “legitimate.” • As we will learn when discussing judicial review of agency action, a court must decide what level of “deference” to give to agency’s interpretation of its regulation or of a statute • Auer or Mead/Skidmore deference is likely appropriate depending on whether interpretive rule/pol’y statement/guidance document is interpretinga reg or a statute – more later

11. How do courts tell the difference between legislative rules and interpretive rules/policy statements - Sullivan? • 42 USC § 300a-6: No appropriated funds can be used in programs where abortion is a method of family planning. • HHS reg (1988): Clinics receiving funds “may not provide counseling concerning the use of abortion as a method of family planning or provide referral for abortion as a method of family planning.” • Interpretive directive (1991) – HHS reg should not be interpreted as preventing a woman from receiving complete medical information about her condition from a physician, including information about abortion. • Why is the interpretive directive in NFPRHA v. Sullivan a “legislative rule?”

12. How do courts tell the difference between legislative rules and interpretive rules/policy statements - Hoctor? • 7 USC §§2141/2143: USDA can enact rules and formulate standards re the “humane handling, care, treatment & transportation” of animals by dealers,” including “minimum standards for handling, housing, feeding, watering, & sanitation.” • 9 C.F.R. § 3.125(a) – “the [housing] facility must be constructed of such material and of such strength as appropriate for the animals involved. The indoor and outdoor housing facilities shall be structurally sound and shall be maintained in good repair to protect the animals from injury and to contain the animals." • Internal interpretive memo- All "dangerous animals" (including lions, tigers, and leopards) must be inside a perimeter fence at least eight feet high. • Why was the “interpretive memo” in Hoctor v. USDA a “legislative rule?”