Administrative Procedure Act

Citations

5 U.S.C. §§ 551–559, 701–706, 1305, 3105, 3344, 5372, 7521 (2012); originally enacted June 11, 1946, by Pub. L. No. 404, 60 Stat. 237, Ch. 324, §§ 1–12. The Administrative Procedure Act (APA), as originally enacted, was repealed by Pub. L. No. 89-554, 80 Stat. 381 (September 6, 1966), as part of the general revision of title 5 of the United States Code. Its provisions were incorporated into the sections of title 5 listed above. Although the original section numbers are used sometimes, it is actually an error to use the original section numbers unless one is referring to the APA prior to its codification in 1966. In this volume all references to the Act are to sections of title 5. Section 552 has been revised significantly since 1946 and is commonly known as the Freedom of Information Act. Section 552a (the Privacy Act) was added to the APA in 1974 and has been amended several times since. Section 552b (the Government in the Sunshine Act) was added in 1976 and amended once. These sections and sections 701–706 pertaining to judicial review are discussed and set forth separately in this book. Two significant laws relating to rulemaking and adjudication were enacted in 1990—the Administrative Dispute Resolution Act (5 U.S.C. §§ 571-584) and the Negotiated Rulemaking Act (5 U.S.C. §§ 561–570), which are discussed separately below, as well as in separate chapters in this book.

Overview

Attempts to regularize federal administrative procedures go back at least to the 1930s. Early in 1939, at the suggestion of the attorney general, President Roosevelt asked the attorney general to appoint a distinguished committee to study existing administrative procedures and to formulate recommendations. The Attorney General’s Committee on Administrative Procedure, chaired by Dean Acheson, produced a series of monographs on agency functions and submitted its Final Report to the President and the Congress in 1941. These materials, plus extensive hearings held before a subcommittee of the Senate Committee on the Judiciary in 1941, are primary historical sources for the Administrative Procedure Act. The Administrative Procedure Act was signed into law by President Truman on June 11, 1946. In the months that followed, the Department of Justice compiled a manual of advice and interpretation of its various provisions. The Attorney General’s Manual on the Administrative Procedure Act,published in 1947 (and reprinted in the Appendix), remains the principal guide to the structure and intent of the APA. The Manual (page 9) states the purposes of the Act as follows:

• (1) To require agencies to keep the public currently informed of theirorganization, procedures, and rules.
• (2)To provide for public participation in the rulemaking process.
• (3)To prescribe uniform standards for the conduct of formal rulemakingand adjudicatory proceedings (i.e., proceedings required by statute to be made on the record after opportunity for an agency hearing).
• (4)To restate the law of judicial review.

The Act imposes upon agencies certain procedural requirements for two modes of agency decision making: rulemaking and adjudication. In general, the term “agency” refers to any authority of the government of the United States, whether or not it is within or subject to review by another agency— but excluding the Congress, the courts, and the governments of territories, possessions, or the District of Columbia. Definitions of other terms may be found in section 551.

Structure of the Administrative Procedure Act. The Administrative Procedure Act has two major subdivisions: sections 551 through 559, dealing in general with agency procedures; and sections 701 through 706, dealing in general with judicial review. In addition, several sections dealing with administrative law judges (§§ 1305, 3105, 3344, 5372, and 7521) are scattered through title 5 of the United States Code. The sections pertaining to judicial review are discussed in Chapter 2 of this volume. As noted, sections 552, 552a, and 552b are also discussed in separate chapters, as are the new sections added by the Administrative Dispute Resolution and Negotiated Rulemaking Acts.

The structure of the APA is shaped around the distinction between rulemaking and adjudication, with different sets of procedural requirements prescribed for each. Rulemakingisagency action that regulates the future conduct of persons through formulation and issuance of an agency statement designed to implement, interpret, or prescribe law or policy. It is essentially legislative in nature because of its future general applicability and its concern for policy considerations. By contrast, adjudication isconcerned with determination of past and present rights and liabilities. The result of an adjudicative proceeding is the issuance of an “order.” (Licensing decisions are considered to be adjudication.)

The line separating these two modes of agency action is not always clear, because agencies engage in a great variety of actions. Most agencies use rulemaking to formulate future policy, though there is no bar to announcing policy statements in adjudicatory orders. Agencies normally use a combination of rulemaking and adjudication to effectuate their programs. The APA definition of a “rule,” somewhat confusingly, speaks of an “agency statement of general or particular applicability and future effect . . . .” The words “or particular” were apparently included in the definition to encompass such actions as the setting of rates or the approval of corporate reorganizations, to be carried out under the relatively flexible procedures governing rulemaking.

Beyond the distinction between rulemaking and adjudication, the APA subdivides each of these categories of agency action into formal and informal proceedings. Whether a particular rulemaking or adjudication proceeding is considered to be “formal” depends on whether the proceeding is required by statute to be “on the record after opportunity for an agency hearing” (5 U.S.C. §§ 553(c), 554(a)). The Act prescribes elaborate procedures for both formal rulemaking and formal adjudication, and relatively minimal procedures for informal rulemaking. Virtually no procedures are prescribed by the APA for the remaining category of informal adjudication, which is by far the most prevalent form of governmental action.

Rulemaking. Section 553 sets forth the basic requirements for rulemaking:notice of proposed rulemaking in the Federal Register, followed by an opportunity for some level of participation by interested persons, and finally publication of the rule, in most instances at least 30 days before it becomes effective. For a detailed discussion of rulemaking procedures, see Jeffrey Lubbers’s A Guide to Federal Agency Rulemaking, published by the American Bar Association (5th ed. 2012).

Excluded from the coverage of the Act are rulemakings involving military or foreign affairs functions and matters relating to agency management or personnel, public property, loans, grants, benefits, or contracts. These exceptions to the Act’s general policy of providing an opportunity for public participation in rulemaking, to foster the fair and informed exercise of agency authority, are “narrowly construed and only reluctantly countenanced.” They are neither mandatory nor intended to discourage agencies from using public participation procedures. On the contrary, when Congress enacted the APA, it encouraged agencies to use the notice-and-comment procedure in some excepted cases, and many agencies routinely do so in making certain kinds of exempted rules. The Administrative Conference encouraged this trend and called on Congress to eliminate or narrow several of these exemptions. “Regulatory reform” legislative proposals considered over the years have contained provisions to alter or eliminate several of these exemptions.

Most rulemaking proceedings involve informal rulemaking, where all that the APA requires for public participation is an opportunity to submit written data, views, or arguments; oral presentations may also be permitted. The published rule must incorporate a concise general statement of its basis and purpose. Despite the brevity of these requirements, it is important to note that Congress has routinely, through other statutes, added procedural requirements that affect various agency programs. These additional statutory requirements may apply to specific agencies or programs or may be governmentwide (such as the Regulatory Flexibility Act; see Chapter 21). Recent presidents have also imposed additional requirements for rulemaking. (See Chapter 4, White House Orders and Memoranda on Rulemaking.) Though courts have sometimes sought to add procedural requirements, the Supreme Court’s decision in Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc.,435 U.S. 519 (1978), has, to a great extent, limited this kind of judicial activity. In Vermont Yankee, the Supreme Court held that where rulemaking is governed by the (informal) requirements of section 553, as in the case of the Nuclear Regulatory Commission’s regulation of nuclear power plants, the courts may not require additional procedures.

The APA also provides for formal rulemaking—aprocedure employed when rules are required by statute to be made on the record after an opportunity for an agency hearing. Essentially, this procedure requires that the agency issue its rule after the kind of trial-type hearing procedures (§§ 556, 557) normally reserved for adjudicatory orders (discussed below). The Supreme Court, in United States v. Florida East Coast Railway Co., 410 U.S. 224 (1973), held that such a procedure was required only where the statute involved specifically requires an “on the record” hearing. Because few statutes do so, formal rulemaking is used infrequently. However, numerous agency statutes (often called “hybrid rulemaking” statutes) do require some specific procedures beyond the basic notice-and-comment elements of informal rulemaking.

Negotiated Rulemaking. The Negotiated Rulemaking Act of 1990, discussed in greater detail in Chapter 18, establishes a statutory framework for the conduct of negotiated rulemaking, a procedure developed in large part through Administrative Conference–sponsored research. As with other alternative means of dispute resolution (ADR), negotiated rulemaking uses consensual techniques to produce results, rather than an agency decision based upon its data and conclusions, hopefully aided by public input. Numerous agencies have successfully completed negotiated rules over the years, but it remains an exceptional technique for adopting rules.

The Negotiated Rulemaking Act clearly establishes regulatory agencies’ authority to use such consensual techniques as negotiated rulemaking without limiting agency innovation. The Act identifies criteria for the discretionary determination by agency heads of whether and when to use negotiated rulemaking. It also sets forth basic requirements for public notice and the conduct of meetings under the Federal Advisory Committee Act.

Adjudication. Sections 554, 556, and 557 apply to formal adjudication (i.e., to cases for which an adjudicatory proceeding is required by statute to be determined on the record after opportunity for an agency hearing). These sections apply, for example, to proceedings by certain agencies seeking to impose civil money penalties as part of a regulatory enforcement program.

Section 554(a) specifically exempts six types of proceedings from the requirements of these sections: matters subject to a subsequent de novotrial in court; certain personnel matters other than for administrative law judges; decisions based solely on inspections, tests, or elections; military or foreign affairs functions; cases where an agency acts as agent for a court; and certification of worker representatives. Section 554(b) specifies notice requirements. Section 554(c) provides for an opportunity for informal settlements where practicable. Section 554(d) forbids presiding officers from engaging in ex parte(off-the-record) consultations on facts at issue in the case. The subsection also addresses “separation of functions” by restricting agency employees engaged in investigation or prosecution of a case from supervising the presiding officer or participating or advising in the decision in that or a factually related case (with certain exceptions). Section 554(e) authorizes agencies, in their discretion, to issue declaratory orders that would terminate a controversy or remove uncertainty with respect to matters required by statute to be determined on the record after opportunity for a hearing.

Sections 556 and 557 prescribe the specific procedures to be used in formal adjudication. In brief, a trial-type hearing must be held, conducted either by some or all of the members of the agency or by an administrative law judge (appointed under 5 U.S.C. §§ 3105). An administrative law judge (ALJ) is normally the presiding officer in formal adjudication. The APA (§§ 556(c)) spells out the powers and duties of ALJs (formerly called hearing examiners). It also provides for the independence of ALJs by protecting their tenure (5 U.S.C. §§ 7521) and pay (5 U.S.C. §§ 5372) and prohibiting inconsistent duties (5 U.S.C. §§ 3105). In addition, under 5 U.S.C. §§ 1305, the Office of Personnel Management has prescribed a special selection procedure for the appointment of ALJs. Currently, there are approximately 1,600 ALJs in the federal government, the vast majority of which are located in the Social Security Administration.

Section 556 also covers disqualification of presiding officers, burden of proof, and parties’ rights to cross-examination. It provides that the transcript of testimony and exhibits, together with all documents filed in the proceeding, constitutes the exclusive record for decision.

Section 557 provides that when, as is usually the case, a hearing is not conducted by the agency itself, the presiding officer (normally an ALJ) must issue an initial decision—unless the agency requires that the entire record be certified to the agency for decision. An initial decision automatically becomes the agency’s decision unless appealed or reviewed on motion of the agency. Section 557 provides, in general, an opportunity for parties to submit for consideration their own proposed findings and conclusions, or exceptions to decisions.

The record must show the ruling on each finding, conclusion, or exception presented. Section 557(d) was added to the APA by the Government in the Sunshine Act in 1976 (see Chapter 14) to prohibit ex partecommunications relevant to the merits of a pending formal agency proceeding. However, where ex partecommunications do take place, their content must be placed on the public record, and, if the communication was knowingly made by a party, the presiding officer may require the party to show cause why a decision should not be made adversely affecting the party’s interest. Most agencies have adopted procedures applicable to their formal hearings. (A list of citations appears at the end of the chapter.) The Manual for Administrative Law Judges contains a detailed discussion of procedures for the conduct of hearings and a collection of model forms.

Alternative Means of Dispute Resolution. The Administrative Dispute Resolution Act specifically provides agencies with the authority to employ mediation, arbitration, and other consensual methods of dispute resolution in resolving cases under the APA and in other kinds of agency disputes. The legislation specifically establishes a federal policy encouraging ADR in place of more costly, time-consuming adjudication. While no agency is forced to use ADR techniques, the legislation requires each agency head to undertake a review of typical agency litigation and administrative disputes to assess where ADR techniques will be useful. The Act is discussed in greater detail in Chapter 5.

Miscellaneous Provisions. Section 555 states various procedural rights of private parties, which may be incidental to rulemaking, adjudication, or the exercise of any other agency authority. Section 555(b) addresses appearances in agency proceedings by parties, counsel, and other interested persons. Section 555(c) provides that a person compelled to submit data or evidence is entitled to a copy or transcript, except that in nonpublic investigations this may be limited to a right to inspect the official transcript. Additional provisions of section 555 relate to subpoenas and to the requirement of prompt notice of denials of applications, petitions, or other requests made to agencies.

Section 558 is a rarely invoked section of the APA. Section 558(b) makes clear the requirement that agency rules, orders, and sanctions be within the jurisdiction delegated to the agency and otherwise authorized by law. Section 558(c) contains some special notice provisions and other procedural requirements for handling applications, suspensions, revocations, or license renewals.