Rulemaking

1. Rulemaking “One of the greatest inventions of modern government” But this depends on the rule and the affected parties Gored ox theory

2. Rulemaking • Usually, it is not the process of making the rule, but rather the substance of the rule • Depending on the above☺☺☻☻ or not • Supreme Court has one rule: deference

3. Rulemaking • Difficult to challenge the substance of an agency rule • Two mechanisms to challenge or invalidate: either attack its substantive provisions or the procedure by which it was promulgated • If a rule is defective on either ground, it will not be placed into effect

4. RULEMAKING • In the beginning, there were many challenges to rules on procedural grounds • Supreme Court made this type of attack difficult • Cardinal Rule: If you don’t like the agency action, win on the agency level

5. BASIC RULEMAKING • Triggering of Rulemaking Process • How to begin • First, the agency many be commanded to act • Congress may write interim agency rules • Agency may determine it needs rules • Sometimes private citizens get into the act • Section 553(e) gives “interested person the right to petition for the issuance, amendment or repeal of a rule.”

6. RULEMAKING • The APA emphasizes agencies should engage in rulemaking as the basic process to announce new policy • APA defines rule, however, broadly • Rulemaking procedures are in 553

7. The Scope of 553 • APA: 551 definition of agency • 553(a) exemptions • Other exemptions which are generic • Notice requirements

8. Comments and Rulemaking • APA hallmark: Solicitation of comments from all interested persons • Agency must accept comments • Most submissions are in writing • Sometimes there are oral hearings

9. Comments • What does an agency do with the comment? • What does the APA term “consider” really mean • Good faith requirement • Agency not bound by comments • Agency may invoke its experience

10. Comments • Reviewing Court will be suspicious if agency ignores the comments

11. Promulgation of Final Rule • This step completes the rulemaking process • Two important steps: 1. The agency must prepare after consideration of the comments and other matter in the rulemaking record, “a concise general statement of [the] basis and purpose” of the final rule.

12. Promulgation • Step 2: The rule goes into effect no earlier than 30 days after the rule’s publication • Exceptions to 553(d) 30-day delay period: • a rule that provides an exemption or relieves a restriction • Interpretative rules and statements of policy • Finding of good cause

13. Impact of Florida Coast

14. Federal Register? • Contents Federal Register • Vol. 72, No. 34 • Wednesday, February 21, 2007 • -------------------------------------------------------------------------------- • Agricultural Marketing Service • RULES • Nectarines and peaches grown in California • Correction, • 7821 [07–783] [TEXT] [PDF] • Agriculture Department • See Agricultural Marketing Service • See Forest Service • Army Department • See Engineers Corps • Centers for Disease Control and Prevention • NOTICES • Meetings: • National Center for Environmental Health/Agency for Toxic Substances and Disease Registry— • Scientific Counselors Board, • 7888 [E7–2885] [TEXT] [PDF] • Children and Families Administration

15. What constitutes notice and hearing? • [Federal Register: February 21, 2007 (Volume 72, Number 34)] • [Notices] • [Page 7906] • From the Federal Register Online via GPO Access [wais.access.gpo.gov] • [DOCID:fr21fe07-66] • ======================================================================= • ----------------------------------------------------------------------- • INTERNATIONAL TRADE COMMISSION • [Inv. No. 337-TA-593] • In the Matter of Certain Digital Cameras and Component Parts • Thereof; Notice of Investigation • AGENCY: U.S. International Trade Commission. • ACTION: Institution of investigation pursuant to 19 U.S.C. 1337. • ----------------------------------------------------------------------- • SUMMARY: Notice is hereby given that a complaint was filed with the • U.S. International Trade Commission on January 19, 2007, under section • 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337, on behalf of • St. Clair Intellectual Property Consultants, Inc., of Grosse Pointe, • Michigan. Letters supplementing the Complaint were filed on February 7 • and February 9, 2007. The complaint, as supplemented, alleges • violations of section 337 in the importation into the United States, • the sale for importation, and the sale within the United States after • importation of certain digital cameras and component parts thereof by • reason of infringement of claim 16 of U.S. Patent No. 5,138,459; claims • 1-3, 8, 10, 12, and 16-18 of U.S. Patent No. 6,094,219; claim 1 of U.S. • Patent No. 6,233,010; claims 1-4 of U.S. Patent No. 6,323,899; and • claims 5, 6, and 9-12 of U.S. 6,496,222. The complaint further alleges • that an industry in the United States exists as required by subsection • (a)(2) of section 337. • The complainant requests that the Commission institute an • investigation and, after the investigation, issue a permanent exclusion • order and permanent cease and desist orders.

17. Automotive Parts & Accessories Association v. Boyd • Statement’s purpose: demonstrate to the public AND to the court that the agency has done its job • “In a manner calculated to negate the dangers of arbitrariness and irrationality in the formulation of rules for general application in the future.” • The statement is one of the few bits of information which courts may use to analyze a rule if validity is challenged.

18. The APA requires an agency to set forth: “a concise general statement of their basis and purpose.” • Automotive Parts sets forth the requirement for a statement of basis and purpose • Court cautions against “an overly literal reading of the terms “concise and general.”

19. Automotive Parts • Emphasizes that this requirement must be interpreted so the reviewing court • may see what the major issues of policy were and • Why the agency reacted to them as it did

20. Judicial Review • Pacific States Box & Basket: • National Tire Dealers & Retreaders: what did the agency fail to do? • Dismissed a factor with an “unconvincing assertion.”

21. Motor Vehicle Manufacturers v. State Farm • Court reviewed the rescission of a DOT standard • DOT, in the original standard, determined car seat belts that required buckle up weren’t very effective • Needed passenger safety device that did not require specific action of occupant • Department could not make up mind:

22. State Farm • Air bags? Belt restraints? • Modified Standard 208: chose one or the other • President Regan takes office • New Secretary commissions rulemaking to repeal 208 • Insurance companies challenge the rescission

23. State Farm • Supreme Court grants certiorari • Looks at the entire history: the promulgation and the rescission • Concludes: agency has authority to reconsider, BUT here OUT OF CONTROL • DOT failed to articulate plausible reasons for its rescission

24. State Farm • What troubled the Supreme Court? • Absolutely no change in external circumstances • People were still being injured a decade later • Why is the earlier rule now unnecessary • DOT failed to address this very issue

25. State Farm • But what about the comments? • Did the comments differ from when the Modified Standard was promulgated • Were there any changes in the agency’s enabling act • Had the legislature taken action compelling the rescission?

26. State Farm—Bottom line • Agency rule set aside because --The agency failed to consider an obvious alternative • --The agency did not adequately explain