the determination of past and present rights and
liabilities. Normally, there is involved a decision as
to whether past conduct was unlawful, so that the
proceeding is characterized by an accusatory flavor
and may result in disciplinary action. Or, it may
involve the determination of a person's right to
benefits under existing law so that the issues relate
to whether he is within the established category of
persons entitled to such benefits. In such
proceedings, the issues of fact are often sharply
controverted.

Given the breadth of the definitions of rulemaking and adjudication in the APA, it is not surprising that some confusion has existed with respect to the proper classification of certain agency proceedings.

The inclusion in the APA's definition of rule agency statements of "particular applicability" probably creates the most difficulty, for most people think of rules as addressed to general situations and adjudication as addressed to particular situations. While it is true that the great majority of rules have some general application and adjudication is nearly always particularized in its immediate application, the drafters of the APA wished certain actions of a particular nature, such as the setting of future rates or the approval of corporate reorganizations, to be carried out under the relatively flexible procedures governing rulemaking. Consequently, the words "or particular" were included in the 8 definition.

In 1970 the American Bar Association recommended revising the definition of "rule" to delete the words "or particular." The Administrative Conference endorsed the ABA proposal with the understanding that "[al matter may be considered of 'general applicability' even though it is directly applicable to a class which consists of only one or a few persons if the class is open in the

7/ Attorney General's Manual, supra note 4, at 14-15 (citations omitted).

8/ For discussion of the inclusion of "or particular" in the definition, see 2 K. Davis, Administrative Law Treatise § 7:3 (2d ed. 1978); Morgan, Toward a Revised Strategy for Ratemaking, 78 U. Ill. L.F. 21, 50 n. 143 (1978).

sense that in the future the number of members of the class may be increased.' 119 Courts have upheld classification of agency action as a "rule" even though it applied to the activities of a single 10 entity. Probably no great change would occur if the words "or particular" were deleted from the definition of rule in section 551 of the APA. It is noteworthy that Executive Order 12291's definition of "regulation or rule" does not include those words.

The APA definition of "rule" is essential for making the crucial classification of agency action as either rulemaking or adjudication. Beyond that, agencies must determine what type of rule they are developing because different procedural requirements apply to different types of rules. The task of classification is complicated by the great variety of agency actions. Professor Davis observes:

Agencies issue rules, sub-rules, and sub-sub-
rules, seemingly ad infinitum. What agencies
denominate "rules" or "regulations" are usually
readily recognizable as such, but other statements
or announcements that are somewhat in the nature
of rules are troublesome and are causes of
confusion. Like courts, agencies make "rules" by
generalizing in adjudicatory opinions; like courts,
they legislate in the process of deciding individual
cases. Furthermore, agencies' informal adjudication
may be quite voluminous and may be largely
recorded, and the
the products may be rulings,
interpretations, staff letters, press releases, official
speeches, and many other kinds of announcements.
Some agencies have nothing but respectable
vertebrates; others have inferior animals and
crawling creatures that no one can classify as fish,
fowl, or insect.

Yet the problem of classification must be taken
seriously, because often the required procedure, as

9/

Statement of the Administrative Conference on ABA Resolution No. 1 Proposing to Amend the Definition of "Rule" in the Administrative Procedure Act, 1 C.F.R. § 310.3 (1983).

10/ See, e.g., Hercules, Inc. v. EPA, 598 F.2d 91, 118 (D.C. Cir. 1978).

11/ Exec. Order No. 12,291, S 1(a), 3 C.F.R. 127 (1981).

well 9$ the degree of authoritative weight, depends

on it.

B. APA Procedures for Different Types of Rules.

Section 553 of the Administrative Procedure Act contains most of the procedural requirements imposed on agency rulemaking by that Act. Agency rulemakers should not forget, however, that section 552 also contains requirements that apply to agency rules.

1. Section 552's publication requirements. The Freedom of 13 Information Act requires agencies to publish certain items in the ,14 Federal Register for the "guidance of the public."" The items include "rules of procedure "15 and "substantive rules of general applicability adopted as authorized by law, and statements of general policy or interpretations of general applicability

16

The section also

18

formulated and adopted by the agency.' requires publication of "descriptions of [agency] organization"17 and "statements of the general course and method by which [the agency's] functions are channeled and determined", which may be rules as defined in 5 U.S. C. S 551(4). Finally, section 552 specifically directs agencies to publish changes in, or repeals of, their rules and policies.19

While the phraseology of section 552 is different from that used in the section 551 definition of rule, it appears to encompass almost all of the rules included in section 551. The one exception is "rules of particular applicability," which need not be published in the Federal Register. Failure to comply with section 552's

12/ 2 K. Davis, Administrative Law Treatise S 7:4 (2d ed. 1978), at p. 15.

13/ 5 U.S.C. S 552 (1976).

14/ 5 U.S.C. S 552(aX1). Much of the language in this section is carried over from Section 3 of the original APA. See also Note, A Model for Determining the Publication Requirements of Section 552(@X1) of the Administrative Procedure Act, 13 J. L. Ref. 515 (1980).

15/ Id., ¶ (C). 16/ Id., ¶ (D).

17/ Id., ¶ (A).

18/ Id., ¶ (B). 19/ Id., ¶ (E).

publication requirements means that "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," unless the person has actual and timely notice of the 20 matter.

2. Formal or "on-the-record" rulemaking procedure. Section 553 is the APA's rulemaking section, and it sets forth the notice and comment requirements that apply to most legislative rulemaking. However, the last sentence of section 553(c) states:

When rules are required by statute to be made
on the record after opportunity for an agency
hearing, sections 556 and 557 of this title apply
instead of this subsection.

That sentence establishes the distinction between informal or notice and comment rulemaking under section 553 and formal or "on-the-record" rulemaking under sections 556 and 557.

22

Sections 556 and 557 include requirements that the agency support its rule with substantial evidence in an exclusive rulemaking record;21 that there be an oral hearing presided over by agency members or an administrative law judge;" that the parties to the rulemaking be allowed to submit rebuttal evidence and conduct such cross-examination "as may be required for a full and true disclosure of the facts;"23 that there be no ex parte and that parties be

communication with the decisionmaker,

24

20/ 5 U.S.C. S 552(a)(1) (1976). However, despite the straightforward language, some courts have refused to invalida te agency enforcement actions where the agency failed to publish internal guidelines or policies and the challengers could not show they were adversely affected by nonpublication. See, e.g Donovan v. Wollaston Alloys, Inc., 695 F.2d 1 (1st Cir. 1982); United States v. Fitch Oil Co., 676 F.2d 673 (T.E.C.A. 1982). 21/ 5 U.S.C. S 556(d), (e) (1976).

22/ 5 U.S. C. S 556(a), (b) (1976). 23/ 5 U.S.C. S 556(d) (1976).

24/ 5 U.S.C. S 557(d) (1976). This subsection was added by the Government in the Sunshine Act, S 4(a), Pub. L. No. 94-409, 90 Stat. 1241 (Sept. 13, 1976). The amendment was consistent with recommendations of the temporary Administrative Conference of (Continued)

25

allowed to submit proposed findings and conclusions and present exceptions to the initial or recommended decisions of subordinate agency employees or to tentative agency decisions. Thus, formal rulemaking procedure is trial-type procedure, even though all of the APA's procedures for formal adjudication do not apply to such rulemaking.

26

27

Formal rulemaking always has been the exception, rather than the norm, and it is used infrequently today. In a 1972 report to the Administrative Conference on agency experience with formal rulemaking, Professor Robert Hamilton concluded:

the

The actual agency experience with these
procedural requirements raises serious doubts about
their desirability. At best, some agencies have
learned to live with them, even though preferable
procedures are probably available. At worst, these
procedures have warped regulatory programs or
resulted in virtual abandonment of them. It is
surprising to discover that most agencies required
to conduct formal hearings in connection with
rulemaking in fact did not do so during the previous
five years..
Thus, the primary impact of these
procedural requirements is often not, as one might
otherwise have expected, the testing of agency
assumptions by cross-examination, or the testing of
agency conclusions by courts on the basis of
substantial evidence of record. Rather these
procedures either cause the abandonment of the
program (as in the Department of Labor), the

United States, 1961-62. Selected Reports of the Administrative Conference of the United States, S. Doc. No. 24, 88th Cong., 1st Sess. 165-205 (1963).

25/ 5 U.S.C. S 557 (c) (1976).

26/ For example, 5 U.S.C. S 556(d) provides that in rulemaking "an agency may, when a party will not be prejudiced thereby, adopt procedures for the submission of all or part of the evidence in written form." Also, the separation of functions requirement for adjudication, in 5 U.S.C. $ 554(d), does not apply to formal rulemaking.

27/ See Hamilton, Procedures for the Adoption of Rules of General Applicability: The Need for Procedural Innovation in Administrative Rulemaking, 60 Calif. L. Rev. 1276, 1278-1280 (1972).