United States administrative law encompasses statutes, common law, and directives issued by the Office of Information and Regulatory Affairs in the Executive Office of the President, that together define the extent of powers and responsibilities held by administrative agencies of the United States Government (both executive branch agencies and independent agencies). The executive, legislative, and judicial branches of the U.S. federal government cannot always directly perform their constitutional responsibilities. Specialized powers are therefore delegated to an agency, board, or commission. These administrative governmental bodies oversee and monitor activities in complex areas, such as commercial aviation, medical device manufacturing, and securities markets.
Justice Breyer defines administrative law in four parts. Namely, the legal rules and principles that: (1) define the authority and structure of administrative agencies; (2) specify the procedural formalities employed by agencies; (3) determine the validity of agency decisions; and (4) define the role of reviewing courts and other governmental entities in relation to administrative agencies.
U.S. federal agencies have the power to adjudicate, legislate, and enforce laws within their specific areas of delegated power.
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Jurisdiction
The authority of administrative agencies stems from their organic statute, and must be consistent with constitutional constraints and legislative intent.
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Rulemaking
Federal administrative agencies, when granted the power to do so in a statutory grant of authority from Congress, may promulgate rules that have the effect of substantive law. Agencies "legislate" through rulemaking--the power to promulgate (or issue) regulations. Regulations are codified in the Code of Federal Regulations.
Administrative law statutes governing rulemaking
Section 551 of the Administrative Procedure Act gives the following definitions:
- Rulemaking is "an agency process for formulating, amending, or repealing a rule."
- A rule in turn is "the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy."
The primary administrative law statutes and other laws that govern agency rule making include:
- The Administrative Procedure Act, 5 U.S.C. §§ 552 and 553
- The Housekeeping Act, 5 U.S.C. § 301, which gives heads of agencies authority to issue rules for agency employees
- The Regulatory Flexibility Act, 5 U.S.C. §§ 601 et seq., which requires agencies to consider the needs of small entities in rule making
- The Paperwork Reduction Act, 44 U.S.C. §§ 3501 et seq., which limits the power of an agency to collect information from the public
- The Congressional Review Act, 5 U.S.C. §§ 801-808, which gives Congress the authority to review and veto any agency regulation
- The Independent Offices Appropriations Act of 1952, 31 U.S.C. §§ 9701, which limits the power of agencies to set user fees
- Executive Order 12,866, which requires agencies to use cost-benefit balancing in all regulatory actions
Scope and extent of rulemaking power
Key limits on the power of agencies to promulgate regulations include:
1. The regulation must lie within a grant of power from Congress, and that delegation must in turn be constitutional (courts almost never invalidate a regulation on this ground). The power must be granted in the agency's organic statute, and extends so far as fairly inferrable from the statutory language. Statutory grants of authority to agencies are generally construed more strictly than the "necessary and proper" power of Congress granted in Article I, section 8, clause 18 of the Constitution.
2. The regulation must lie within that grant of rulemaking authority (in the extreme case, Congress sometimes includes an explicit limit on the agency's authority). Some agencies have power to promulgate both substantive rules as well as procedural rules; some (like the IRS, EEOC, and Patent and Trademark Office) may promulgate only procedural rules. When Congress grants that authority retroactively, courts carefully scrutinize the case, and sometimes bless the regulation, and sometimes invalidate it.
3. The regulation must be promulgated with observance of the procedures of required by the statutes set forth in the previous section. Among these procedures, one of the most important is the requirement that an agency set forth factual findings sufficient to support a rational basis or by procedures otherwise inadequate to meet the statutes listed above.
Agencies may not promulgate retroactive rules unless expressly granted such power by the organic statute. Bowen v. Georgetown University Hospital, 488 U.S. 204 (1988)
There is no broad prohibition against an agency's regulation that does not serve the "public convenience, interest, or necessity." The law presumes that rulemaking conducted with procedural safeguards of the statutes and Executive Orders noted above reflect a rational balancing of interests by the agency, and a court will strike down a regulation only for violation of those procedures.
Agencies are permitted to rely on rules in reaching their decisions rather than adjudicate, where the promulgation of the rules is within the agency's statutory authority, and the rules themselves are not arbitrary or capricious. Heckler v. Campbell, 461 U.S. 458 (1983).
Agencies must abide by their own rules and regulations. Accardi v. Shaughnessy, 347 U.S. 260 (1954).
Courts must defer to administrative agency interpretations of the authority granted to them by Congress (1) where the intent of Congress was ambiguous and (2) where the interpretation was reasonable or permissible. Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). Chevron is probably the most frequently cited case in American administrative law.
Type of rulemaking
There are five levels of rulemaking procedure:
- Formal rulemaking, which is rulemaking for which the organic statute requires that rules be "made on the record after agency opportunity for hearing" (that is, a trial-type hearing that is taken down by a transcriptionist into the record) and for which the APA prescribes particular procedures. The phrase "on the record" is required to trigger requirements for formal rulemaking; simply requiring that rules be made "after a hearing" does not trigger the requirements of formal rulemaking.
- Informal rulemaking, also known as "notice-and-comment rulemaking," which is rulemaking for which no procedural requirements are prescribed in the organic statute, and for which the APA requires only notice and comment.
- Hybrid rulemaking, which is rulemaking for which particular procedural requirements beyond notice and comment, but not rising to the level of formal rulemaking.
- Negotiated rulemaking under 5 U.S.C. §§ 561-570 of the Administrative Procedure Act.
- Publication rulemaking, typically for procedural rules and interpretative rules, that an agency may promulgate by publication in the Federal Register.
Number of rules
About 2,500 to 4,000 rules are published per year, and in 2011 32% of the Federal Register pages were in the "Rules and Regulation" section. However, included in the total number of rules are the repeal of rules and also minor rules. The GAO maintains a Federal Rules Database and in 2012, 68% of rules were classified as Routine/Info/Other while the remainder were Significant/Substantive. In addition to an overall number of rules, there are "major rules" and "significant" rules.
The Congressional Review Act passed in 1996 created a category of major rules, which are those that the Office of Information and Regulatory Affairs determines result in either: (1) "an annual effect on the economy of $100,000,000," (2) "a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions," or (3) "significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets." If the rule is major, an additional report must be provided to congressional committees. From 1997 to 2012, the number of major rules has ranged from 100 (2010) to 50 (2002).
E.O. (Executive Order) 12866, which was issued in 1993, requires agencies (other than independent agencies) to submit proposed rules for reviews by OIRA if the rule meets certain criteria. Rules that are "economically significant" (meeting the criteria of "an annual effect on the economy of $100 million or more or adversely affect in a material way the economy") require a cost-benefit analysis.
Nonlegislative rules: "statements of policy" and guidance
"Nonlegislative rules" such as guidance, guidelines, agency staff manuals, staff instructions, opinion letters, and press releases are called "statements of policy" or "guidance." (The two terms are not synonyms, only closely correlated: statements of policy are almost always issued in documents classified as guidance, and guidance documents to the public often include statements of policy.) Guidance and statements of policy are not legally binding on the public because they have not gone through the required procedures to become "legislative" rules binding on the public (depending on the rule, hearing, notice, comment, publication). However, when stated in mandatory language, they can bind the agency itself. They have only hortatory effect on the public, and those affected can challenge the agency's right to enforce the policy statement or guidance against the public.
In the late 1990s and early 2000s, many agencies were bypassing the APA's requirements for rulemaking by tucking rules into informal documents like agency staff manuals and the like. This is simply illegal. The Executive Office of the President stepped in to stop bootleg rulemaking, and forbade this practice. Some agencies, for example, the U.S. Patent and Trademark Office, have nonetheless continued to defy the law, and state their formal refusal to implement the President's directive.
The distinction between these types of rules has been called "one of the most confusing in administrative law".
Adjudication
Section 551 of the Administrative Procedure Act gives the following definitions:* Adjudication is "an agency process for the formulation of an order;"
- An order in turn is "the whole or part of a final disposition ... of an agency in a matter other than rule making but including licensing;"
Right to a hearing
There are two ways that an individual can attain the right to a hearing in an adjudicative proceeding. First, the Due Process clause of the 5th Amendment or 14th Amendment can require that a hearing be held if the interest that is being adjudicated is sufficiently important or if, without a hearing, there is a strong chance that the petitioner will be erroneously denied that interest. A hearing can also be required if a statute somehow mandates the agency to hold formal hearings when adjudicating certain issues.
Conclusion
The adjudication will typically be completed with a written report containing findings of fact and conclusions of law, both at the state and federal level. If the affected does not wish to contest the action, a consent order may be published allowing for the hearing to be bypassed.
Federal tribunals
Determining whether rulemaking or adjudication is appropriate
Agency actions are divided into two broad categories discussed above, rulemaking and adjudication. For agency decisions that have broad impact on a number of parties, including parties not specifically before the agency, the agency must use the procedures of rulemaking (see the bullet list in "Administrative law statutes governing rulemaking" above). Because actions by rulemaking affect many parties, rulemaking procedures are designed to ensure public participation, and are therefore more cumbersome, except that the agency is permitted to seek comment by publication of notice, without soliciting the views of specific parties. For decisions that, on first glance, affect only a small number of parties that actually appear before the agency (see the section on "Adjudication" above), the agency may use procedures that are generally simpler, but that require the agency specifically solicit input from the directly affected parties.
Adjudication decisions may become precedent that binds future parties, so the transition zone between the regime for rulemaking and the regime for adjudication is very hazy.
The classical test for the dividing line is seen in the contrast between two cases decided a few years apart, both involving taxes levied by the city of Denver Colorado. In 1908, in Londoner v. City and County of Denver, a tax levied on residents of a particular street was held to be an adjudication, and the Supreme Court ordered the city to do a "do over," because the residents of the street were not given sufficient opportunity to be heard. Then, in 1915, in Bi-Metallic Investment Co. v. State Board of Equalization, a tax levied on the entire city of Denver was held to be rulemaking, and the city's action of imposing the tax was affirmed.
Factors tending to make an act adjudicative in nature:
- Involving a small number of people
- Individuals involved are specially affected by the act
- Decision based on the facts of an individual case, rather than policy concerns
For most agencies, the choice of whether to promulgate rules or proceed by common law adjudicative decisions rests in the informed discretion of agencies. SEC v. Chenery Corp., 332 U.S. 194 (1947) (Dissenting opinion arguing that the decision permitted agencies to rule arbitrarily, without law). Agencies may also announce new policies in the course of such adjudications. Some agencies' organic statutes obligate the agency to use rulemaking, for example, the U.S. Patent and Trademark Office, 35 U.S.C. § 2(b)(2)(B).
Judicial review
A party aggrieved by an agency action (either rulemaking or adjudication) may seek judicial review (that is, sue) as provided by an agency's organic statute or by §§ 701-706 of the Administrative Procedure Act.
Studies of judicial review typically find that 70% of agency rules are upheld with the Supreme Court upholding 91% of rules; a 2011 empirical study of judicial review found that 76% were upheld, although the D.C. Circuit, which hears many administrative law cases, has been found less deferential than other courts.
State-level administrative law
States may have their own administrative law; for example, a state constitution may allow the legislature to delegate rule-making authority to an executive or independent agency, and state governments may provide an administrative appeal process for people who are dissatisfied with decisions made by certain state agencies.
Many states, such as Kentucky, have been less willing than the federal government to allow their agencies to promulgate rules with the effect of substantive law.
The states have widely instituted Home Rule by which the Cities are given Broad Powers that allow them to enact any law that is not prohibited by the States Constitutions or already addressed by State Laws or State Codes. This widespread institution of Home Rule has resulted in more administrative laws being passed by the cities.
California has an extensive body of administrative law including a hearing agency that requires that its administrative law judges be lawyers. California statutory law governing the hearing agency states that non-lawyers may appear before it. However, California case law holds that former attorneys who no longer practice law may not appear before it. Most California agencies adjudicate license cases utilizing the California Attorney General's legal staff. However, others (including the Department of Corporations and Insurance) utilize their own legal staff.
Journals and publications
- Administrative Law Review is the official quarterly publication of the American Bar Association's Section on Administrative Law and Regulatory Practice, published in coordination with American University Washington College of Law.
- The Journal of the National Association of Administrative Law Judiciary is a publication of the National Association of Administrative Law Judiciary, published in coordination with Pepperdine University School of Law.
- The Texas Tech Administrative Law Journal specializes in administrative law topics.
- William Funk, J.D., Administrative Procedure and Practice: Problems and Cases, ISBN 0-314-15517-1, Thomson West, 3rd ed., 2006.
- William Funk, J.D., Administrative Law: Examples and Explanations, ISBN 0-7355-5891-4, Aspen Publishers, 2nd ed., 2006.
See also
- United Kingdom administrative law
- Public service law in the United States
- Administrative law judge
- List of significant administrative law cases, e.g. Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.
- Immigration Law
- Refugee roulette
Notes
External links
- ABA Section of Administrative Law & Regulatory Practice
- LII Law about administrative law
- Administrative Law and Procedure, legal definitions
- Federal Administrative Law: A Brief Overview, Law Librarians' Society of Washington, D.C.
- Digital Commons Network: Administrative Law
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