Chapter 5 - Continued Do You Have to Have Notice and Comment?
Why Avoid Notice and Comment? • Remember rulemaking ossification? • What is the benefit to the regulated parties of interpretive rules and guidance? • What if the agency is prevented from providing guidance documents? • What is the risk to the agency if it issues guidance without notice and comment, and the court finds the guidance to be a rule requiring notice and comment?
Exemptions to Notice and Comment Requirements (does 553 apply at all?) • § 553. Rule making • (a) This section applies, according to the provisions thereof, except to the extent that there is involved - • (1) a military or foreign affairs function of the United States; or • (2) a matter relating to agency management or personnel or to public property, loans, grants, benefits, or contracts.
Military and Foreign Affairs • Limiting the term of residence for Iranian nationals after the hostage incident • Extending asylum to persons subject to reproductive restrictions in China • Deporting young Muslin men with visa problems. • Changing international trade rules • Why exempt these?
Public Property • (2) a matter relating to agency management or personnel or to public property, loans, grants, benefits, or contracts. • This would exempt Social Security benefits, everything to do with public lands, and many other areas of regulation. • As the regulatory state developed, there was pressure to repeal this provision. • To defuse this, agencies adopted rules requiring notice and comment rulemaking in several of these areas. • Congress has suspended this section in many enabling laws. • You have to look at the agency’s own rules and enabling act to see if 553 has been waived.
553(b) – [General] Exceptions to Notice Requirements • 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 public interest. • No notice means no comment under 553(c)
Exception 1 - Interpretative Rules • It is only explaining the law or providing guidance for action • Prosecution guidelines • IRS audit guidelines • Since they do not change the law, they have no legal effect • Like commentary in the civil law? • Does that mean you can ignore them?
Legislative and Nonlegislative Rules • Agencies can only make legislative rules if the legislature delegates this power to the agency through statute. • Nonlegislative rules (guidelines, etc.) do not have legal effect. They only explain the agency’s view of the law. • Does an agency need statutory authorization to issue non-legislative rules? • Some states limit non-legislative rules to limit agency power.
Can Nonlegislative Rules be Retroactive? • Why does the ban on retroactive rules not apply to interpretive rules? • How do judges change the law retroactively? • If interpretive rules cannot change legal rights, does retroactive really mean anything for nonlegislative rules?
EPA Example – Is This Definition a Rule? • EPA says 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. • This might include a pothole in a field, not otherwise connected to a waterway. • If the EPA has jurisdiction over the wetland, it will become expensive or impossible to drain or develop the area.
Is this an Interpretative Rule or a Legislative Rule? • Can we tell by just looking at the rule? • How might this definition affect the value of the wetlands? • Is this a “substantial impact” (old test)? • Assuming that it is a substantial impact, how can the agency defend not using notice and comment? • The substantial impact test has now been mostly abandoned in favor of the “legally binding” test.
The “Legally Binding” or “Force of Law” Test • Can the agency enforce the law without the rule? • Continuing with the previous wetlands example • Is the agency required to define wetlands before enforcing the statute? • Was the agency doing enforcement before this rule? • If so, does this change the enforcement? • What does tell us about whether it is legally binding? • Assume a statute allows the agency to define toxic substances that cannot be dumped into lakes. • Would a list of these substances need notice and comment? • Could the law be enforced without the list?
How High do I Build the Fence?Hoctor v. USDA, 82 F.3d 165 (7th Cir. 1996) • Statute requires the agency to adopt rules for the safe housing of dangerous animals • Agency uses notice and comment to promulgate a rule requiring that reasonable precautions be taken to prevent the escape of the animals • Agency then issues guidance saying that a reasonable precaution would be an 8 foot fence. • Interpretation or legislation? • How does it change the proof of facts in the enforcement adjudication?
Junk in the Park: United States v. Picciotto, 875 F.2d 345 (D.C. Cir. 1989) • Can the agency use notice and comment to promulgate a legislative rule that says that the agency can add other requirements in specific situations without notice and comment? • Why or why not? • What if the rule just says that nothing can be brought to the park that would be disruptive or impede public access? • Would it need a specific list? • How does not having a rule affect enforcement?
Inconsistent with a Rule: Phillips Petroleum Co. v. Johnson, 22 F.3d 616 (5th Cir. 1994). • An agency cannot issue a rule that is inconsistent with a statute, and thus it certainly cannot issue guidance that is inconsistent with the statute. • What about guidance that is consistent with the statute, but not with a rule based on the statute? • This would change the rule without notice and comment.
Non-Procedural Indicators • Saying it is guidance/interpretative rule. • Publication in the Code of Federal Regulations (CFR). • Does the person signing the document have the authority to make a rule?
Agency Procedures • Like the code of civil procedure • Does not change the substantive rights of the parties • Does not change the regulated behavior, only the internal agency procedures • Thus no need for public participation.
General Policy or Specific Requirements? • Remember, 553(b) does not require notice and comment for general policy statements or procedural rules. • Assume the statute says that in licensing actions, a physician must reply to agency request for information in a reasonable time. • How would you argue that a 7 day answer period is a substantive change, not just a procedural requirement? • Why does the inclusion of specific factual information (deadline periods, fence heights) undermine the claim that it is a general policy statement?
Federal Mine Safety and Health Act Example • Secretary has the statutory right to sue both the mine owner and the mine operator for violations of the Act. • Secretary publishes a policy statement explaining that the agency can and will sue both of them for infractions, depending on the nature of the infraction. • Does this require notice and comment? • Why?
Enforcement Manual • The Coast Guard is authorized to investigate and enforce against certain types of oil pollution in the waters of the United States under the Clean Water Act. • To aid its officers engaged in these functions it has created a Marine Safety Manual. • That Manual gives guidance as to what appropriate penalties might be for various types of pollution incidents. • The range of penalties is specified in statutes. • Legislative rule or prosecution policy? • What is the key?
Corps of Engineers Example • Corps issues a guidance document providing examples of ways to mitigate wetlands damage. • One way is to promise to restore 2X as much wet land as you fill. • Does this need notice and comment? • Why or why not? • What if the Corps will only issue permits to people who agree to this? • How would you prove this?
Notice and Comment Rulemaking is a Core Agency Function • Environmental Law • Pretty much everything • Securities and financial regulation • Almost everything • FCC, FAA, and other alphabet agencies • Most things • EEO and Civil Rights • Not as critical – enforcement under the statute
Pre-Rulemaking Regulatory Review • There are a number of statutes that agencies must address before they make a rule. • There is also review through the Office of Information and Regulatory Affairs (OIRA) • Discussed next class • OIRA grew out of OMB and was formalized in 1980. • Know as the place rules go to die. • This is where the new EO sends guidance documents, etc., as well as rules
Requirements for the Public Notice • The legal basis for the rule • The supporting evidence for the rule. • Scientific tests • Data • Analysis • Any articles that were relied on • Anything else that is necessary to justify the rule • The proposed rule.
The Standard of Review (future chapter preview) • Chevron • In theory, deferential to the agency, but subject to mind-bending judicial manipulation. • Hard-look review • Making sure every detail that the agency is required to consider is perfect before deferring to the agency. • Hard-look is what makes the process so lengthy, both in time and the length of the register posting.
Avoiding Notice and Comment • Agencies want to avoid notice and comment because it takes so long and costs so much to do. • The core of our discussion of interpretive rules and agency policy statements is simple: • What is your argument for why they need to be enjoined until the agency issues them through notice and comment? • This stops their use and the agency is unlikely to reissued them as N&C rules.
What Triggers the N&C Requirement? • You have to convince the court that the guideline, policy statement, etc., changes your client’s legal situation – if they have legal effect, they need to be N&C. • There are several statements of this legal test: • Substantial impact • Legally binding • Force of law • No practical difference in your proof
The Standing Tests (Preview of Future Chapters) • We will circle back to this question of legal impact as we look at judicial review. • Standing – Lujan from Conlaw I • Is your client injured? • Ripeness • Is this a final agency action? • If it has no legal effect, it is not a final agency action and thus there is nothing to review.
Reviewing the Class Material • Don’t get bogged down in the minutia of the cases in the E&E. • The cases are all examples of how attorneys argued that a non-notice and comment document should have gone through N&C. • They make a good shorthand – the junk in the park case, the fence case, etc. – for different ways of showing that the document affected their client’s rights.
The Regulators: Our Invisible Government • This is the only look inside the rulemaking process. • Including a proto-OIRA review with Jim Tozzi • While it is old, the only real change is that the process is much more complicated and time-consuming today. • Even the legal question – the protection of vistas in the national parks – has not been resolved to this point and the grandfathering in of existing industries has had unintended consequences.