Understanding Defective Notice under Sec. 553: Legal Considerations & Implications

1. Defective notice under Sec. 553 • An NPR can comply with the technical requirements of Sec. 553 but courts can nevertheless find the NPR deficient for “inadequate notice.” If so, agency must start the rulemaking process over. • Common reasons: • Failure to provide important technical/scientific data relied on • Playing “hide the peanut” with actual rule proposed • Final rule is not a “logical outgrowth” of proposed rule • Key: In all situations, the courts believe that the goals of the notice requirement aren’t being fulfilled • Rule can’t be adequately ventilated • Unfair • Will undermine judicial review

2. Nova Scotia Food Products – the concise statement of basis & purpose • Does Sec. 553(c) give any guidance regarding what the concise statement of basis and purpose (“SBP”) must contain? • Does the SBP involved in Nova Scotia Food Products(p. 386) seem to comply with the textual requirements of Sec. 553(c)? • Why does the court find the SBP inadequate?

3. Statements of basis & purpose – responding to relevant comments • In NSFP, OSHA failed to address comments that went to the core of the whitefish industry’s ability to survive and used standard boilerplate for the SBP. • Failure of that sort (i.e., to address issues of enormous import at all) will always get a court’s attention • Short of that, to what extent is the agency’s SBP required to address comments raised during the comment period? • Does an agency have to address every comment no matter how small or irrelevant? • Does the relative importance of the issue matter? • Does it matter if the comments were specific in their criticism/concern versus vague generalities? • What if an agency gets many similar comments on a particular issue?

4. Challenging Agency Action – the record requirement • Overton Park & Chenery I: • A court can only review agency action based upon record that reflects contemporaneous agency decision-making (rather than post-hoc rationalizations) • Thus there must be a record for a court to review • With formal rulemakings or adjudications – identifying the record is easy: • Sec. 556(e) – “The transcript of testimony and exhibits, together with all papers and requests filed in the proceeding, constitutes the exclusive record for decision in accordance with section 557 of this title . . .” • There is no similar definition of record for Sec. 553 rulemakings, however.

5. Challenging Sec. 553 Rulemakings – what is the record on review? • Notice of Proposed Rulemaking • Final Rule • Written comments during comment period • Oral comments during comment period (if hearing transcript available) • What about other materials that the agency might have consulted? • Scholarly articles • Agency manuals • Staff reports • Consultant studies • How can an agency bring these into the record ? • Can it just say “we relied on other things?” • Can it rely on these and incorporate them as part of its “expertise?” • Does it need to specifically refer to them?

6. Sec. 553 rules & ex parte contacts • Does Sec. 553 prohibit ex parte contacts between agency officials and others during the rulemaking process? • Are they likely to occur as part of the routine activity of agencies? • Why does the HBO court seem concerned about them vis-à-vis the record and the goals of Sec. 553 rulemakings? • Does the HBO court require that all ex parte contacts be disclosed? When must they be disclosed? • The ACT decision (p. 396 n. 4) retreats rapidly from HBO. Why – are the two cases distinguishable or is this just a turn in a different direction?