Policy by Rulemaking, Adjudication , Manuals

1. Policy by Rulemaking, Adjudication, Manuals Administrative Law Prof. Fuse Brown

2. APA § 551 (Definitions) (4) “rule” means 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 or describing the organization, procedure, or practice requirements of an agency and includes the approval or prescription for the future of rates, wages, corporate or financial structures or reorganizations thereof, prices, facilities, appliances, services or allowances therefor or of valuations, costs, or accounting, or practices bearing on any of the foregoing; (5) “rule making” means agency process for formulating, amending, or repealing a rule; (6) “order” means the whole or a part of a final disposition, whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rule making but including licensing; (7) “adjudication” means agency process for the formulation of an order;

3. NLRB v. Wyman-Gordon

4. NLRB v. Wyman-Gordon

5. NLRB v. Wyman-Gordon

6. NLRB v. Wyman-Gordon

7. NLRB v. Wyman-Gordon

8. Wyman-Gordon • No single or clear rule emerged from this case which lacked a majority opinion. • Plurality suggested that agency may not promulgate rules with prospective applicability by adjudication. • But, an agency may establish policy on an incremental basis through adjudication with retroactive effect on the parties, with precedential (not binding) effect on other parties and future conduct.

9. Chenery II (pre-APA) • General proposition that the agency has flexibility to set general policy by rule or adjudicatory order.

10. Majestic Weaving (2d Cir.) • Recognizes that courts could apply retroactively a new rule announced through adjudication to past conduct. • But, retroactive application of a rule announced in adjudication is considered arbitrary where it: • (1) goes against the existing rule at the time of the conduct; and • (2) imposes financial or other penalties on the offending party.

11. Bell Aerospace • An agency may choose to make new policy through adjudication. Board has discretion to choose the method of promulgating policy. • In some cases, the choice of adjudication would amount to an abuse of discretion because there is significant negative impact on the parties (see Majestic Weaving), but here it did not, so it was permissible.

12. Morton v. Ruiz • Agency may make policy via manuals and guidelines. • But, it must use rulemaking procedures when: • (1) making the policy via manual would violate its own policies; or • (2) the policy negatively affects or extinguishes the a legitimate expectation of an entitlement.

13. APA § 552(a) • Each agency shall separately state and currently publish in the Federal Register for the guidance of the public—(D) substantive rules of general applicability adopted as authorized by law, and statements of general policy or interpretations of general applicability formulated and adopted by the agency; . . . Except to the extent that a person has actual and timely notice of the terms thereof, a person may not in any manner be required to resort to, or be adversely affected by, a matter required to be published in the Federal Register and not so published.

14. APA § 552(a)(2)(C) (2) Each agency, in accordance with published rules, shall make available for public inspection and copying-- (C) administrative staff manuals and instructions to staff that affect a member of the public;