Agency rulemaking is a key part of U.S. administrative law, allowing federal agencies to create and implement regulations. It balances expert decision-making with public input and accountability, shaping how laws passed by Congress are interpreted and applied.

The process involves publishing proposed rules, gathering public comments, and issuing final rules. Courts review agency rules using standards like Chevron deference, while Congress and the President provide oversight through various mechanisms.

Overview of agency rulemaking

• Agency rulemaking forms a crucial part of the administrative law system in the United States, allowing federal agencies to create and implement regulations
• Rulemaking process balances the need for expert agency decision-making with principles of democratic accountability and public participation
• Plays a significant role in shaping and interpreting laws passed by Congress, affecting various sectors of society and the economy

Constitutional basis for rulemaking

• Derives from Article I, Section 1 of the U.S. Constitution, which vests legislative powers in Congress
• Nondelegation doctrine limits Congress's ability to delegate legislative authority to agencies
• Supreme Court has generally upheld broad delegations of rulemaking authority to agencies (J.W. Hampton, Jr. & Co. v. United States)
• Intelligible principle test requires Congress to provide agencies with clear guidance and standards for rulemaking

Types of agency rules

Legislative vs interpretive rules

• Legislative rules carry the force of law and create new legal obligations
• Interpretive rules clarify existing regulations or statutes without creating new legal requirements
• Legislative rules require formal notice-and-comment procedures
• Interpretive rules can be issued without formal rulemaking procedures
• Courts give greater deference to legislative rules than interpretive rules

Formal vs informal rulemaking

• Formal rulemaking involves trial-like procedures with hearings and cross-examination
• Informal rulemaking (notice-and-comment) is more common and less procedurally rigid
• Formal rulemaking required when statutes specify rules must be made "on the record after opportunity for an agency hearing"
• Informal rulemaking allows for greater flexibility and efficiency in the regulatory process
• Hybrid rulemaking combines elements of both formal and informal procedures

Rulemaking process

Notice of proposed rulemaking

• Published in the Federal Register to inform the public of the agency's intent to create or modify a rule
• Includes the text of the proposed rule or a description of the subjects and issues involved
• Provides legal authority for the proposed action
• Specifies the time, place, and nature of public rulemaking proceedings
• Aims to give interested parties sufficient information to participate meaningfully in the rulemaking process

Public comment period

• Typically lasts 30 to 60 days, but can be extended or shortened based on circumstances
• Allows interested parties to submit written data, views, or arguments
• Agencies must consider all relevant comments received during this period
• Electronic submission of comments has become increasingly common (Regulations.gov)
• Agencies may hold public hearings or workshops to gather additional input

Final rule publication

• Agency reviews and analyzes public comments received during the comment period
• Prepares a final rule, which may be modified based on public input
• Publishes the final rule in the Federal Register with a concise general statement of its basis and purpose
• Includes effective date, which is typically at least 30 days after publication
• Final rule becomes part of the Code of Federal Regulations (CFR)

Administrative Procedure Act requirements

Substantial evidence standard

• Applies to formal rulemaking and certain agency adjudications
• Requires agency decisions to be supported by substantial evidence in the rulemaking record
• Defined as "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion" (Consolidated Edison Co. v. NLRB)
• More demanding than the arbitrary and capricious standard
• Courts review the entire record to determine if substantial evidence exists

Arbitrary and capricious test

• Standard of review for informal rulemaking under the APA
• Requires agencies to articulate a rational connection between the facts found and the choices made
• Agency must consider relevant factors and avoid clear errors of judgment
• Does not allow courts to substitute their judgment for that of the agency
• Encompasses review for abuse of discretion and ensures agency action is based on relevant factors

Judicial review of agency rules

Chevron deference doctrine

• Established in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (1984)
• Two-step analysis for reviewing agency interpretations of statutes
  1. Determine if Congress has directly spoken to the precise question at issue
  2. If statute is ambiguous, defer to agency's reasonable interpretation
• Applies when agency is acting with force of law (legislative rules)
• Based on presumption that Congress intends agencies to fill statutory gaps

Auer deference doctrine

• Derived from Auer v. Robbins (1997) and Bowles v. Seminole Rock & Sand Co. (1945)
• Courts defer to agency's interpretation of its own ambiguous regulations
• More controversial than Chevron deference due to concerns about agencies' ability to self-interpret
• Recent Supreme Court decisions have limited the scope of Auer deference (Kisor v. Wilkie)
• Requires genuine ambiguity in the regulation and a reasonable agency interpretation

Executive oversight of rulemaking

Office of Information and Regulatory Affairs

• Part of the Office of Management and Budget within the Executive Office of the President
• Reviews significant regulatory actions proposed by executive agencies
• Ensures proposed rules align with the President's priorities and are based on sound cost-benefit analysis
• Coordinates interagency review of proposed and final rules
• Oversees implementation of government-wide policies and standards for statistical surveys and information collection

Executive orders on regulation

• Presidents issue executive orders to guide agency rulemaking and regulatory processes
• Executive Order 12866 (Clinton) established principles for regulatory planning and review
• Executive Order 13771 (Trump) implemented a regulatory budget and "two-for-one" rule
• Executive Order 13992 (Biden) revoked certain Trump-era orders and emphasized evidence-based policymaking
• Executive orders can significantly impact the pace and focus of agency rulemaking activities

Congressional review of agency rules

Congressional Review Act

• Enacted in 1996 as part of the Small Business Regulatory Enforcement Fairness Act
• Requires agencies to submit major rules to Congress for review before they take effect
• Provides a fast-track procedure for Congress to disapprove of agency rules
• Joint resolution of disapproval, if signed by the President, prevents the rule from taking effect
• Rarely used successfully until 2017, when multiple Obama-era rules were overturned

Legislative veto vs INS v Chadha

• Legislative veto allowed Congress to nullify executive actions without presenting resolution to the President
• INS v. Chadha (1983) struck down the legislative veto as unconstitutional
• Court held that legislative actions affecting the rights, duties, and relations outside the legislative branch require bicameralism and presentment
• Decision led to the development of alternative mechanisms for congressional oversight of agency actions
• Congressional Review Act designed to comply with Chadha's constitutional requirements

Negotiated rulemaking

• Collaborative process involving agency officials and interested stakeholders to develop proposed rules
• Authorized by the Negotiated Rulemaking Act of 1990
• Aims to increase acceptability and improve substance of rules
• Involves formation of a negotiating committee representing various interests
• Can lead to faster rulemaking and reduced litigation, but may be time-consuming and resource-intensive

Exceptions to rulemaking procedures

Good cause exception

• Allows agencies to bypass notice-and-comment procedures when they are "impracticable, unnecessary, or contrary to the public interest"
• Must be invoked sparingly and only in genuine emergencies or when delay would cause serious harm
• Agencies must provide a detailed explanation for invoking the exception
• Courts scrutinize use of good cause exception to prevent abuse
• Often used for temporary rules or in response to urgent public health or safety concerns

Interpretive rules exception

• Exempts interpretive rules, general statements of policy, and rules of agency organization from notice-and-comment requirements
• Based on the idea that these rules do not create new legal obligations
• Distinction between legislative and interpretive rules can be challenging to determine
• Courts have developed various tests to distinguish between rule types (American Mining Congress v. Mine Safety & Health Administration)
• Agencies may voluntarily use notice-and-comment for interpretive rules to increase legitimacy and public input

Challenges to agency rules

Standing requirements

• Plaintiffs must demonstrate injury in fact, causation, and redressability to challenge agency rules
• Injury must be concrete, particularized, and actual or imminent
• Associational standing allows organizations to sue on behalf of their members
• Zone of interests test requires plaintiffs to fall within the class of persons the statute intends to protect
• Prudential standing limitations may apply in addition to constitutional requirements

Ripeness and mootness doctrines

• Ripeness ensures that challenges to agency rules are brought at the appropriate time
• Abbott Laboratories v. Gardner established two-part test for ripeness
  1. Fitness of issues for judicial review
  2. Hardship to parties of withholding court consideration
• Mootness doctrine requires an actual, ongoing controversy throughout the litigation
• Exceptions to mootness include capable of repetition yet evading review and voluntary cessation
• Pre-enforcement review of agency rules often permitted to avoid putting regulated parties in compliance dilemma

Impact of agency rules

Force of law

• Legislative rules have the same binding effect as statutes
• Create new legal rights, duties, or obligations for regulated parties
• Violations of legislative rules can result in civil or criminal penalties
• Agencies must comply with their own legislative rules (Accardi doctrine)
• Courts generally enforce legislative rules unless they conflict with statutes or the Constitution

Preemption of state laws

• Agency rules can preempt state laws under the Supremacy Clause of the Constitution
• Express preemption occurs when Congress explicitly states its intent to preempt state law
• Implied preemption can occur through field preemption or conflict preemption
• Agencies can preempt state law through rulemaking if Congress has delegated such authority
• Courts apply a presumption against preemption, especially in areas of traditional state regulation

Recent trends in agency rulemaking

E-rulemaking initiatives

• Increased use of technology to facilitate public participation in the rulemaking process
• Regulations.gov provides a centralized platform for accessing and commenting on proposed rules
• Data mining and natural language processing tools help agencies analyze large volumes of public comments
• Some agencies experiment with social media and other digital platforms to engage the public
• Challenges include managing information overload and ensuring equitable access to rulemaking processes

Regulatory reform efforts

• Periodic attempts to streamline or reduce regulatory burdens on businesses and individuals
• Executive orders requiring agencies to review and potentially modify or repeal existing regulations
• Increased emphasis on cost-benefit analysis in rulemaking decisions
• Proposals for regulatory budgets or caps on the total cost of regulations
• Debates over the appropriate balance between regulatory protection and economic growth