United States administrative law
Because Congress, the president, and the federal courts have limited resources to address all issues, specialized powers are often delegated to a board, commission, office, or other agency.
These administrative agencies oversee and monitor activities in complex areas, such as commercial aviation, medical device manufacturing, and securities markets.
[1] Another common taxonomy divides administrative law into three big topics: rulemaking, adjudication, and judicial review.
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."
[5] However, in June 2024, the Supreme Court overruled Chevron in Loper Bright Enterprises v. Raimondo; past administrative decisions made before Loper Bright under the Chevron deference remained in place, but future agency administration actions in interpreting Congressional language are more likely to be subject to judicial review.
Such rules may be published as guidance, guidelines, agency staff manuals, staff instructions, opinion letters, interpretive memoranda, policy statements, guidance manuals for the public, circulars, bulletins, advisories, press releases stating agency position, and the like.
So the law grants every agency the authority to promulgate interpretative rules, and to do so with minimal procedural fuss.
Deference follows to the degree the agency demonstrates fairness and diligence in developing its interpretation (under Chevron, Auer, or Skidmore v. Swift & Co., as appropriate).
The weight of such a judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.As a practical matter, an agency operates under the agency's interpretative rules.
But as a practical matter, agencies seldom give anything more than short shrift consideration to alternatives.
On judicial review, the practical reality is that a court is most likely to agree with the agency, under Skidmore deference.
But Skidmore deference is only as strong as the quality of the agency's analysis, and courts regularly overturn "interpretative" rules.
"We do so by employing the traditional tools of statutory construction: we examine the statute’s text, structure, and legislative history, and apply the relevant canons of interpretation."
If we conclude that "Congress either had no intent on the matter, or that Congress' purpose and intent is unclear", then we proceed to step two, in which we ask "whether the agency’s interpretation is based on a permissible construction of the statutory language at issue".But an agency has to earn this deference; it is far from automatic.
The line for permissible exercise of the § 553(b) "interpretative" exemption is blurry—courts and treatise writers uniformly complain about this.
[30] Interpretative rules are binding on agency employees, including its administrative law judges (ALJs).
Rather, the agency must demonstrate to the court that no mere interpretive rule, but the underlying statute, has been violated.
[33] "Guidance" is a residual category for any rule issued by an agency but not in a formally promulgated regulation.
The Executive Office of the President stepped in to stop bootleg rulemaking in 2007, and forbade this practice.
[34] 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.
[36] The Congressional Review Act passed in 1996 created a category of major rules, which are those that OIRA 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".
[36] Section 551 of the Administrative Procedure Act gives the following definitions: There are two ways that an individual can attain the right to a hearing in an adjudicative proceeding.
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.
[38] If the affected does not wish to contest the action, a consent order may be published allowing for the hearing to be bypassed.
The Administrative Procedure Act puts "adjudication" and "rulemaking" on opposite sides of a "dichotomy".
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.
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.
SEC v. Chenery Corp., 332 U.S. 194 (1947) (Dissenting opinion arguing that the decision permitted agencies to rule arbitrarily, without law).
