RulemakingRulemaking““One of the greatest inventions of modern One of the greatest inventions of modern

government”government”But this depends on the rule and the affected But this depends on the rule and the affected

partiespartiesGored ox theoryGored ox theory

RulemakingRulemaking

Usually, it is not the process of making the Usually, it is not the process of making the rule, but rather the substance of the rulerule, but rather the substance of the rule

Depending on the aboveDepending on the above☺☺☻☻ or not☺☺☻☻ or not Supreme Court has one rule: deferenceSupreme Court has one rule: deference

RulemakingRulemaking

Difficult to challenge the substance of an Difficult to challenge the substance of an agency ruleagency rule

Two mechanisms to challenge or Two mechanisms to challenge or invalidate: either attack its substantive invalidate: either attack its substantive provisions or the procedure by which it provisions or the procedure by which it was promulgatedwas promulgated

If a rule is defective on either ground, it will If a rule is defective on either ground, it will not be placed into effectnot be placed into effect

RULEMAKINGRULEMAKING

In the beginning, there were many In the beginning, there were many challenges to rules on procedural groundschallenges to rules on procedural grounds

Supreme Court made this type of attack Supreme Court made this type of attack difficultdifficult

Cardinal Rule: If you don’t like the agency Cardinal Rule: If you don’t like the agency action, win on the agency levelaction, win on the agency level

BASIC RULEMAKINGBASIC RULEMAKING

Triggering of Rulemaking ProcessTriggering of Rulemaking Process How to beginHow to begin First, the agency many be commanded to actFirst, the agency many be commanded to act Congress may write interim agency rulesCongress may write interim agency rules Agency may determine it needs rulesAgency may determine it needs rules Sometimes private citizens get into the actSometimes private citizens get into the act Section 553(e) gives “interested person the right Section 553(e) gives “interested person the right

to petition for the issuance, amendment or to petition for the issuance, amendment or repeal of a rule.”repeal of a rule.”

RULEMAKINGRULEMAKING

The APA emphasizes agencies should The APA emphasizes agencies should engage in rulemaking as the basic process engage in rulemaking as the basic process to announce new policyto announce new policy

APA defines rule, however, broadlyAPA defines rule, however, broadly Rulemaking procedures are in 553 Rulemaking procedures are in 553

The Scope of 553The Scope of 553

APA: 551 definition of agencyAPA: 551 definition of agency 553(a) exemptions553(a) exemptions Other exemptions which are genericOther exemptions which are generic Notice requirementsNotice requirements

Comments and RulemakingComments and Rulemaking

APA hallmark: Solicitation of comments APA hallmark: Solicitation of comments from all interested personsfrom all interested persons

Agency must accept commentsAgency must accept comments Most submissions are in writingMost submissions are in writing Sometimes there are oral hearingsSometimes there are oral hearings

CommentsComments

What does an agency do with the What does an agency do with the comment?comment?

What does the APA term “consider” really What does the APA term “consider” really meanmean

Good faith requirementGood faith requirement Agency not bound by commentsAgency not bound by comments Agency may invoke its experienceAgency may invoke its experience

CommentsComments

Reviewing Court will be suspicious if Reviewing Court will be suspicious if agency ignores the commentsagency ignores the comments

Promulgation of Final RulePromulgation of Final Rule

This step completes the rulemaking This step completes the rulemaking processprocess

Two important steps:Two important steps:1. The agency must prepare after 1. The agency must prepare after

consideration of the comments and other consideration of the comments and other matter in the rulemaking record, “a concise matter in the rulemaking record, “a concise general statement of [the] basis and general statement of [the] basis and purpose” of the final rule.purpose” of the final rule.

PromulgationPromulgation

Step 2: The rule goes into effect no earlier Step 2: The rule goes into effect no earlier than 30 days after the rule’s publicationthan 30 days after the rule’s publication

Exceptions to 553(d) 30-day delay period:Exceptions to 553(d) 30-day delay period:• a rule that provides an exemption or a rule that provides an exemption or

relieves a restrictionrelieves a restriction• Interpretative rules and statements of Interpretative rules and statements of

policypolicy• Finding of good causeFinding of good cause

Impact of Florida CoastImpact of Florida Coast

Federal Register?Federal Register? Contents Federal RegisterContents Federal Register Vol. 72, No. 34Vol. 72, No. 34 Wednesday, February 21, 2007Wednesday, February 21, 2007

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Agricultural Marketing Service Agricultural Marketing Service RULES RULES Nectarines and peaches grown in California Nectarines and peaches grown in California Correction, Correction, 7821 [07–783] [TEXT] [PDF] 7821 [07–783] [TEXT] [PDF] Agriculture Department Agriculture Department See Agricultural Marketing Service See Agricultural Marketing Service See Forest Service See Forest Service Army Department Army Department See Engineers Corps See Engineers Corps Centers for Disease Control and Prevention Centers for Disease Control and Prevention NOTICES NOTICES Meetings: Meetings: National Center for Environmental Health/Agency for Toxic Substances and Disease Registry— National Center for Environmental Health/Agency for Toxic Substances and Disease Registry— Scientific Counselors Board, Scientific Counselors Board, 7888 [E7–2885] [TEXT] [PDF] 7888 [E7–2885] [TEXT] [PDF] Children and Families Administration Children and Families Administration

What constitutes notice and What constitutes notice and hearing?hearing?

[Federal Register: February 21, 2007 (Volume 72, Number 34)][Federal Register: February 21, 2007 (Volume 72, Number 34)] [Notices] [Notices] [Page 7906][Page 7906] From the Federal Register Online via GPO Access [wais.access.gpo.gov]From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr21fe07-66] [DOCID:fr21fe07-66]

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INTERNATIONAL TRADE COMMISSIONINTERNATIONAL TRADE COMMISSION

[Inv. No. 337-TA-593][Inv. No. 337-TA-593]

In the Matter of Certain Digital Cameras and Component Parts In the Matter of Certain Digital Cameras and Component Parts Thereof; Notice of InvestigationThereof; Notice of Investigation

AGENCY: U.S. International Trade Commission.AGENCY: U.S. International Trade Commission.

ACTION: Institution of investigation pursuant to 19 U.S.C. 1337.ACTION: Institution of investigation pursuant to 19 U.S.C. 1337.

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SUMMARY: Notice is hereby given that a complaint was filed with the SUMMARY: Notice is hereby given that a complaint was filed with the U.S. International Trade Commission on January 19, 2007, under section 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 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, St. Clair Intellectual Property Consultants, Inc., of Grosse Pointe, Michigan. Letters supplementing the Complaint were filed on February 7 Michigan. Letters supplementing the Complaint were filed on February 7 and February 9, 2007. The complaint, as supplemented, alleges and February 9, 2007. The complaint, as supplemented, alleges violations of section 337 in the importation into the United States, violations of section 337 in the importation into the United States, the sale for importation, and the sale within the United States after the sale for importation, and the sale within the United States after importation of certain digital cameras and component parts thereof by 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 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. 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 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 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 that an industry in the United States exists as required by subsection (a)(2) of section 337.(a)(2) of section 337. The complainant requests that the Commission institute an The complainant requests that the Commission institute an investigation and, after the investigation, issue a permanent exclusion investigation and, after the investigation, issue a permanent exclusion order and permanent cease and desist orders.order and permanent cease and desist orders.

Automotive Parts & Accessories Automotive Parts & Accessories Association v. BoydAssociation v. Boyd

Statement’s purpose: demonstrate to the public Statement’s purpose: demonstrate to the public AND to the court that the agency has done its AND to the court that the agency has done its jobjob

““In a manner calculated to negate the dangers of In a manner calculated to negate the dangers of arbitrariness and irrationality in the formulation of arbitrariness and irrationality in the formulation of rules for general application in the future.” rules for general application in the future.”

The statement is one of the few bits of The statement is one of the few bits of information which courts may use to analyze a information which courts may use to analyze a rule if validity is challenged. rule if validity is challenged.

The APA requires an agency to set forth: The APA requires an agency to set forth: “a concise general statement of their basis “a concise general statement of their basis and purpose.”and purpose.”

Automotive Parts sets forth the Automotive Parts sets forth the requirement for a statement of basis and requirement for a statement of basis and purposepurpose

Court cautions against “an overly literal Court cautions against “an overly literal reading of the terms “concise and reading of the terms “concise and general.”general.”

Automotive PartsAutomotive Parts

Emphasizes that this requirement must be Emphasizes that this requirement must be interpreted so the reviewing court interpreted so the reviewing court

may see what the major issues of policy may see what the major issues of policy were and were and

Why the agency reacted to them as it didWhy the agency reacted to them as it did

Judicial ReviewJudicial Review

Pacific States Box & Basket:Pacific States Box & Basket: National Tire Dealers & Retreaders: what National Tire Dealers & Retreaders: what

did the agency fail to do?did the agency fail to do? Dismissed a factor with an “unconvincing Dismissed a factor with an “unconvincing

assertion.”assertion.”

Motor Vehicle Manufacturers v. Motor Vehicle Manufacturers v. State FarmState Farm

Court reviewed the rescission of a DOT Court reviewed the rescission of a DOT standardstandard

DOT, in the original standard, determined DOT, in the original standard, determined car seat belts that required buckle up car seat belts that required buckle up weren’t very effectiveweren’t very effective

Needed passenger safety device that did Needed passenger safety device that did not require specific action of occupantnot require specific action of occupant

Department could not make up mind:Department could not make up mind:

State FarmState Farm

Air bags? Belt restraints?Air bags? Belt restraints? Modified Standard 208: chose one or the Modified Standard 208: chose one or the

otherother President Regan takes officePresident Regan takes office New Secretary commissions rulemaking to New Secretary commissions rulemaking to

repeal 208repeal 208 Insurance companies challenge the Insurance companies challenge the

rescissionrescission

State FarmState Farm

Supreme Court grants certiorariSupreme Court grants certiorari Looks at the entire history: the Looks at the entire history: the

promulgation and the rescissionpromulgation and the rescission Concludes: agency has authority to Concludes: agency has authority to

reconsider, BUT here OUT OF CONTROLreconsider, BUT here OUT OF CONTROL DOT failed to articulate plausible reasons DOT failed to articulate plausible reasons

for its rescission for its rescission

State FarmState Farm

What troubled the Supreme Court?What troubled the Supreme Court? Absolutely no change in external Absolutely no change in external

circumstancescircumstances People were still being injured a decade People were still being injured a decade

laterlater Why is the earlier rule now unnecessaryWhy is the earlier rule now unnecessary DOT failed to address this very issueDOT failed to address this very issue

State FarmState Farm

But what about the comments?But what about the comments? Did the comments differ from when the Did the comments differ from when the

Modified Standard was promulgatedModified Standard was promulgated Were there any changes in the agency’s Were there any changes in the agency’s

enabling actenabling act Had the legislature taken action Had the legislature taken action

compelling the rescission?compelling the rescission?

State Farm—Bottom lineState Farm—Bottom line

Agency rule set aside becauseAgency rule set aside because--The agency failed to consider an --The agency failed to consider an

obvious alternativeobvious alternative

• --The agency did not adequately --The agency did not adequately explainexplain