Exceptions to Notice and Comment Requirements

1. Exceptions to Notice and Comment Requirements • Interpretive Rules • Policy Statements • Rules of agency organization, procedure, or practice • Technical calculations • Emergencies

2. American Hospital Association v. Bowen, 834 F.2d 1037 (1978) Did the agency violate notice and comment provisions in setting out the rules for PROs?

3. Interpretive Rules • Telling what the statute means • Not binding on the agency • Only binding on the parties to the extent that the courts follow it

4. Substantive (legislative) rules • Grant rights, impose obligations, or change existing rules that do so • Bind the agency and the parties until changed • Is a rule substantive just because it has a big impact?

5. Policy Statements • A hypothetical plan for rationing natural gas in a shortage was a policy statement • Not binding • Guidelines on citing OSHA violations, with the clear statement and policy that these were only examples that did not bind the agency • Parole board rules that changed parole eligibility based on good time needed notice and comment

6. Appalachian Power v. EPA, 208 F.3rd 1015 (2000) • Guidelines for state compliance plan did not bind EPA • EPA treated them as binding on the states • This needed notice and comment • Even if the agency can change the guidelines, if they are binding on the field offices, this is legislative rule

7. Community Nutrition Institute v. Young, 818 F.2d 943 (1987) • FDA action levels for aflatoxin • Trigger level for adulteration • Manufacturers must follow these or risk FDA action • Used as a standard for judging blending strategies • Court found that these needed notice and comment • Starr, in dissent, argued that this would make it difficult for the FDA to carry out its role since there were so many toxic substances and that standards could change based on new information

8. Professionals & Patients for Customized Care v. Shalala, 56 F.3d 592 (1995) • FDA issues guidelines to determine if a pharmacy's compounding violates the drug manufacturing rules • Based on a 9 factor analysis • Upheld because it was not binding and was just used to evaluate practices • Might also be seen as just reminding the pharmacies of what the law is

9. Interpretations • If the agency could enforce the content of the regulation based on the statute or previous regulations, it is probably interpretive • If it modifies the statute or regulation, it needs notice and comment • Like policy statements, the use by the agency is critical

10. Cathouse Case - Hoctor v. Department of Agriculture, 82 F.3d 165 (1996) • Congress says the USDA should require dangerous animals to be properly confined • USDA has a rule saying animals need to be properly confined • It has a guidance memo that says that dangerous animals must be behind an 8 foot perimeter fence

11. What are plaintiff's pets and how tall is the fence? • Plaintiff has ligons, tigers, lions, and who knows what else behind a 6 foot fence • Why does plaintiff say the rule cannot be enforced against him? • What do you think about the rule? • 6 foot high enough for you?

12. What is the key issue? • Does the statute itself allow USDA to establish standards for escape enclosures? • If so, then the memo is just a valid interpretation of the statute • Why does the court focus on the set height? • Limits discretion • How does the court say the agency might have used the number? • We know cats can jump 8 feet, so it has to be at least that high

13. What did the court do? • What if they decide to use 8 feet after notice and comment? • What if the agency does away with the guideline and says the inspector will use his best judgment? • Should the reviewing judge have to stand outside the fence with a hungry cat on the inside?

14. Procedural Rules • Exempted from notice and comment • How far do they go in changing substantive rights? • FAA penalty rules, which also affected the adjudication process for violates, were found to be substantive • NRC was allowed to change it process for granting extensions for filing interventions • Perhaps because they did not need to allow them at all? • OSHA could not claim a rule was not binding because the party could escape it by changing their practices

15. Good Cause Exemptions • Reviewed these at the beginning of this section

16. Policy Issues • What is the impact of heightened judicial review of rule making? • What did we see in the Regulators? • How is this more problematic today? • Why does spreading the process across more than one presidency cause problems?

17. Negotiated Rulemaking • What is reg-neg? • How do you set it up? • Why do it? • Do you still have to do notice and comment? • How does notice and comment prevent the agency from being bound by reg-neg agreements? • What is the representation problem in reg-neg? • Who do you think got left out in the woodstove reg-neg? • Why?

18. Official Notice and Information in the Record • (Do not worry about the individual cases) • What is judicial notice? • How is it limited? • Can judges take note of scientific facts such as the best treatment for hypertension? • How about the weather on a given day in the past?

19. Agency Notice • Why should agencies be granted greater latitude in taking notice of information? • Why not? • How does this affect the record? • What must the record show when the agency takes notice so that the court can properly review the decision? • Assume that a board of medical examiner, made of physicians, takes note of basic medical standards in a disciplinary action • What would the court need to see to review this?

20. Off the Record Proceedings and Ex Parte Contacts • Why are these banned in trials? • How are agency proceedings different? • What is the special problem of small or specialized agencies?

21. 551 - (14) • 'ex parte communication' means an oral or written communication not on the public record with respect to which reasonable prior notice to all parties is not given, but it shall not include requests for status reports on any matter or proceeding covered by this subchapter.

22. 557 - (d) • (d)(1) In any agency proceeding which is subject to subsection (a) of this section, except to the extent required for the disposition of ex parte matters as authorized by law - • (A) no interested person outside the agency shall make or knowingly cause to be made to any member of the body comprising the agency, administrative law judge, or other employee who is or may reasonably be expected to be involved in the decisional process of the proceeding, an ex parte communication relevant to the merits of the proceeding; • (B) no member of the body comprising the agency, administrative law judge, or other employee who is or may reasonably be expected to be involved in the decisional process of the proceeding, shall make or knowingly cause to be made to any interested person outside the agency an ex parte communication relevant to the merits of the proceeding; • (C) a member of the body comprising the agency, administrative law judge, or other employee who is or may reasonably be expected to be involved in the decisional process of such proceeding who receives, or who makes or knowingly causes to be made, a communication prohibited by this subsection shall place on the public record of the proceeding:

23. 556 (d) - Penalty • (d) ... The agency may, to the extent consistent with the interests of justice and the policy of the underlying statutes administered by the agency, consider a violation of section 557(d) of this title sufficient grounds for a decision adverse to a party who has knowingly committed such violation or knowingly caused such violation to occur. ...

24. Professional Air Traffic Control Organizations v. Federal Labor Relations Authority, 685 F.2d 547 (1982) • What was the poetic justice of the PATCO strike and dissolution? • They were the first union to back Regan • What was the reason for the strike? • Pay and working conditions • Not enough controllers • Even less afterwards - fired the ones who would not come back to work

25. What are the three critical factors of the ban in 557(d) • Only applies to "interested persons" • Excludes requests for status reports • How can these really be nudges to the agency in particular direction? • Applies to more than facts in issue, extends to anything about the merits of the proceeding

26. What are the remedies? • Disclosure of the contact and its content • Striking the claim of the violating party if it cannot show why the contact was not a problem • Does the court have to overturn the agency's action or remand if there is an improper contact? • No, it is voidable • Court has a lot of discretion to make sure that justice is done and the agency can function

27. What about Shanker? • Why is he an interested person? • AFL-CIO had filed a brief and he is tied to them • What if you, J. Random law student, sit next to Applewhaite on the plane and urge him to fire PATCO because it will be good for lawyers to have another big case to fight?

28. The Problem of Ongoing Contacts - Louisiana Producers v. FERC, 958 F.2d 1101 (1992) • Permit process for a big ticket pipeline • One party had contacts with the agency outside of the hearing process • The agency argued that this was related to general issues before the agency and not the permit • Court allowed this, but it is a constant problem when a given business or person has multiple dealings with the agency

29. What about Rulemaking? • Why is the ex parte problem different in rulemaking? • What was the court concerned about in Home Box Office v. FCC? • Why is the date of issue of the notice of rulemaking important? • What can the agency do before that date? • How was this limited by ACT v. FCC? • Competing proposals, not just policy debates • How does judging the rule on the record solve this?

30. DC Federation of Civic Associations v. Volpe • How did Congress lean on the agency in this case? • Did the APA ex parte rule apply? • Why did the court remand?

31. Volpe Test • The Volpe test for whether a rulemaking may be overturned solely on evidence of Congressional pressure • 1) was there specific pressure on the agency to consider improper factors? • 2) did the agency in fact change its mind because of these considerations? • How can the agency defend itself from a Volpe attack?

32. Congressional Oversight • Hearings • Cannot interfere with ongoing adjudications • Can inquire into agency practices and grill employees • Status Reports • May ask for status reports, which tells the agency Congress is watching • Often done to help constituents with personal problems such as SS - Congressional Casework

33. Sierra Club v. Costle • Sierra Club claimed senator Bird coerced the EPA on coal burning power plant standards • Why would Senator Bird care about this? • What should Congress do if it does not like ex parte contacts in rulemaking?

34. What did the Court Rule when it applied Volpe to this Case? • No problem with the contacts because Congress should be involved in such policy decisions • What if Byrd said he could cut off funding to the agency and get everyone fired?

35. Portland Audubon Society • What did they rule could be done in Oregon? • Who was the ex parte contact? • Why were the plaintiffs concerned?

36. What is the president's role in rulemaking? • Controls and supervises executive branch decisionmaking • How is the role different in adjudications? • When should the president's contacts be documented? • When the statute requires that they be docketed • If the rule is based on factual information that comes from such a meeting.