What if the agency realizes when reading the comments that it needs to change the rule EPA did this in the Regulators when it abandoned the direct regulation of integral vistas 2 3 Chocolate Manufacturers ID: 781500
Download The PPT/PDF document "Chapter 5 - Continued 1 When Do You Need..." is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Slide1
Chapter 5 - Continued
1
Slide2When Do You Need To Re-Notice a Revised Rule?
What if the agency realizes when reading the comments that it needs to change the rule? EPA did this in the Regulators when it abandoned the direct regulation of integral vistas.
2
Slide33
Chocolate Manufacturers
Ass’n
v. Block,
755 F.2d 1098 (4th Cir. 1985)
What is WIC
?
The initial notice was for a rule to regulate WIC payments for breakfast cereals with high sugar content.
How was the final rule different from the proposed rule?
What new product was added to the regulation?
Slide44
The Notice Problem
CMA claimed that it was denied the opportunity to comment on the inclusion of chocolate milk.
What was the agency defense?
Was the rule about cereal, or was it about sugary breakfast food?
Is chocolate milk a logical outgrowth of sugary cereal?
The agency had to re-notice the rule.
What should the CMA do if the new proposed rule affects them?
Slide55
Limits on Logical Outgrowth -
Arizona Public Service Co. v. E.P.A.
EPA publishes a proposed rule that gives Indian tribes the same regulatory rights as states.
State plans are subject to state court judicial review
Why did the tribes object to this in comments?
How was the rule changed?
What was the claim by plaintiffs?
How did the court analyze the problem?
Why shouldn't the change have been a surprise?
Slide66
What about Technical Information Underlying the Rule? (not in book)
Portland Cement v. Ruckelshaus
, 486 F2d 375 (1973)
The agency must disclose the factual basis for the proposed rule, if it relied on scientific studies or other collections of information.
Connecticut Light and Power v. NRC
, 673 F2d 525 (1982)?
The agency cannot hide technical information.
Why is this a big deal in environmental regs?
What are the potential downsides of this policy?
Slide7Additions to the Published Record - (not in book)
Gold mining under the CWA.
EPA added 6000 pages of supporting info when responding to comments.
The agency may supplement the rulemaking record in response to comments asking for explanation.
The question is whether the information was critical to evaluating the rule for comments.
Rybachek
v EPA, 904 F.2d 1276 (1990)7
Slide8Setting a Threshold for Enforcement
Bug parts are regulated as adulterants. (They do not go on the label.)There is no statutory standard for bug parts in candy bars.The FDA issues a policy statement that it will not take enforcement actions against
candy bars unless they have more than 5 insect parts per bar.
Is this a stealth rule?
8
Slide9Does it bind anyone?
If you are a manufacturer, should you have bug parts in your candy bar at all?
When might you challenge it? (Ripeness)
But what if you represent Consumers Disgusted by Bug Parts, Inc.?
What is your argument that this is really a rule?
What do you know about what is in you candy bar?
Community Nutrition Institute v. Young, 818 F.2d 943 (D.C. Cir. 1987)9
Slide10When Does an Incentive Become
Coercion?
DOL
made a policy statement that it would reduce inspections of workplaces that adopted an OSHA suggested safety plan that exceeded federal minimums.
Is this really voluntary?
What does it cost if you do not do a safety plan?
Does coercion make this a binding rule?Chamber of Commerce v. U.S. DOL, 174 F.3d 206 (D.C. Cir. 1999)
10
Slide11Inspection or Prosecution Guidelines
OSHA adopts a plan for deciding which employers to inspect based on the risk in the industry.
A selected employer contests the rule, saying that OSHA inspections are expensive and time consuming, thus this has a substantial impact.
Is this a successful argument?
How is this different from the coercion case?
Again, the question is whether it changes rights or duties.
11
Slide12Are Compliance Plans Stealth Rules?
A compliance plan is a corporate document that outlines how a company tries to assure that it complies with the law.
DOJ issues guidance that a corporate compliance plan for antitrust laws will count as mitigation under the Sentencing Guidelines for criminal antitrust claims.
Does it affect law abiding companies?
12
Slide13Substantial Impact Test for Procedural Rules
The Department of Health and Human Services changed the method by which home health providers could obtain reimbursement for expenses under the Medicare Program. In particular it required that they submit their requests in a new format and to regional intermediaries, rather than to HHS directly.
How did plaintiffs argue that this was a legislative rule, rather than a procedural rule?
What is the impact on them of the change?
13
Slide14Procedural Rules and Policy Statements – Wrap-up
Same analysis as substantial impact or legally binding test for substantive rules.What is the actual impact on your client?Will compliance costs significantly increase – Medicare case?Does it change their legal options – shortened period to reply to complaint?
Does it actually change substantive requirements – requiring new information for a benefit determination?
We will revisit this when we look at standing.
14
Slide15Interpretive Rule or Legislative Rule Wrap Up
Does it force regulated parties to change their actions?Does the agency treat it as binding?Does it allow exceptions?Is it necessary to enforce the statute?
List of pollutants, for example.
Does it provide specific details which limit the action of regulated parties?
15
Slide16Publishing Legislative Rules that do not need Notice and Comment
APA 552(D) Publication in the FR(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; andWhat if the agency does not publish the document in the FR, but puts it on the Internet? (Which has become very common.)
“Except to the extent that a person has actual and timely notice of the terms thereof...”
16
Slide17When Notice and Comment Does Not Make Sense
APA 553 (b)(3)(B)when the agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.
17
Slide1818
Actions where Secrecy is Important
Wage and price controls
Bidding on contracts
Negotiations on land purchases and sales
Slide1919
Emergencies and Impracticality
Emergency Rules
http://www.doa.la.gov/Pages/osr/emr/emr.aspx
Misused in LA and most states
This
GAO Report
indicates that the feds may also misuse this exception.
Interim Final Rules
Published and in effect, but will be modified after comments are in.
Slide20Time Constraints
The GAO found that agencies frequently skip notice and comment when they have to make a rule with a short timeframe.Usually statutory deadlines, or a version of emergencies.Classic would be hunting seasons.
How would this have helped in the Regulators?
How did notice and comment improve the rule?
Should the agency be able to use this exception if it delayed the rulemaking?
20
Slide21Technical Corrections
Calculations and other non-discretionary rulesTechnical correctionsCan require notice and comment if the correction causes a different result.
Theory is that these are mechanical and thus notice and comment would not add any new information.
21
Slide22What is Formal Rulemaking?
A rulemaking conducted as a trial type hearingThe agency support for the rule must be presented at the hearingInterested parties may present and cross-examine evidence
History - grew out of rate making in the early 20
th
century.
Rate making affects a small number of parties
The courts thought they should get due process22
Slide2323
Why avoid formal rulemaking?
The peanut hearings (FDA must do formal rulemaking in some situations)
Should peanut butter have 87 or 90% peanuts?
10 years and 7,736 pages of transcript
What was the concern in
Shell Oil v. FPC
?
Formal rulemaking was impossibly time consuming to use for regulating something changeable such as natural gas rates.
Why does just getting the right to be heard at a formal hearing benefit parties that oppose a rule?
Slide2424
When is Formal Rulemaking Required?
Disfavored by the modern courts
Must have magic statutory language or be required by the agency's on rules
Only when rules are required by statute to be "made on the record after opportunity for an agency hearing"
Lawyering tip
When would you want to argue that formal rulemaking is required?
What do you have to do to support your request?
Slide2525
Negotiated Rulemaking
The negotiation is between interest groups and the agency to develop a rule that will then go through notice and comment.
The objective is to identify problems and try to find compromises before the notice and comment process.
The negotiated rule has to be supported and noticed through the regular APA process.
The representation problem is that some disadvantaged groups may be left out.
Slide26Are there Constitutional Due Process Rights in Rulemaking?
What does the DC circuit want the NRC to do to improve the due process in their rulemaking?“it likewise clearly thought it entirely appropriate to "scrutinize the record as a whole to insure that genuine opportunities to participate in a meaningful way were provided”
The court wants more public participation than the APA requires.
Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519 (1978)
26
Slide27The Role of the APA
Did the rulemaking comply with the APA?What is the lower court's theory about the APA requirements?Floor or ceiling?
Who does the court think should decide on the appropriate procedures?
Does this look like
Goldberg
or
Matthews?27
Slide2828
The Substantive Issue
The DC court's real problem with the rulemaking was that the NRC’s wanted to take the nuclear waste problem out of the review by a rule.
Can an agency put off a problem by assuming that a solution will be found in the future?
We are 40+ years latter - who was right about the waste disposal problem?
Slide2929
The United States Supreme Court
The APA controls – courts cannot add more procedure.
"The fundamental policy questions appropriately resolved in Congress and in the state legislatures are not subject to reexamination in the federal courts under the guise of judicial review of agency action. Time may prove wrong the decision to develop nuclear energy, but it is Congress or the States within their appropriate agencies which must eventually make that judgment. “
Why is this critical for the political control of agencies?
Slide3030
Ex Parte Communications and Political Influence
Why is the ex
parte
problem different in rulemaking than in adjudication?
Do ex
parte contacts matter in rule making?
Traditional view - rulemaking is open to all, so there are no ex parte contacts.
Slide3131
Home Box Office, Inc. v. FCC
Regulation of advertising and program content on cable
Lots of contacts with FCC commissioners
Court says it is a big problem if info is left out of the record
You do not need to put in contacts before the rule is promulgated
Decisionmakers should not talk to outsiders during the review period after publication, and should document it if they do.
Slide3232
Sierra Club v. Costle
Sierra Club claimed senator Bird from West
Virgina
coerced the EPA on coal burning power plant standards
Why would Senator Bird care about this?
What should Congress do if it does not like ex parte
contacts in rulemaking?What is the key test when looking at the record?
Slide3333
Volpe Test
The Volpe test for whether a rulemaking may be overturned solely on evidence of Congressional pressure.
1) was there specific pressure on the agency to consider improper factors?
2) did the agency in fact change its mind because of these improper facts?
3) was this put in the register so the public could challenge it?
Slide3434
What did the Court Rule when it applied Volpe to this Case?
No problem with the contacts because Congress should be involved in such policy decisions
What if Byrd said he could cut off funding to the agency and get everyone fired?
Doesn’t matter as long as the agency has a proper basis for the rule.
Slide3535
What is the president's role in rulemaking?
Controls and supervises executive branch decisionmaking
How is the role different in adjudications?
When should the president's contacts be documented?
When the statute requires that they be docketed
If the rule is based on factual information that comes from such a meeting.
Slide3636
Bias and Prejudgment
Remember the cases on bias of decisionmakers in adjudications?
Should these also apply to rulemaking?
Slide3737
Association of National Advertisers , Inc. v. FTC
FTC is adopting rules on TV advertising directed at children
Chairman has written and spoken at length on the evils of TV ads aimed at children
Plaintiffs seek to disqualify him because of bias
What happened in Cinderella?
Cinderella disqualified the same Chairman from participating in an adjudication because he had prejudged some of the facts.
Slide3838
Is the Standard Different for Rulemaking?
Clear and convincing evidence that he has an unalterably closed mind on matters critical to the rulemaking.
Slide3939
Can the court make this an Adjudication?
The Court said there were aspects of an adjudication to this rule making because there was a limited statutory right of cross examination.
Rejected because modifications of rulemaking procedures do not make them adjudications.
Slide4040
What were the Commissioner's Comments?
Discussion and advocacy
What is it going to take to disqualify an agency head from a rulemaking?
Charlton Heston as head of BATF?
Slide41Regulatory Review and Cost Benefit Analysis Next Time
Have a
good break!
41