Rule‐making Power

Rule‐making Power is the power of agencies of the executive branch of the federal government to issue rules and regulations. A large portion of American law takes the form of agency rules. This has occurred because of the growth in the number and responsibilities of federal agencies during the twentieth century, especially during the New Deal era. Another period of growth was the 1970s, when new programs were created in the areas of the environment, occupational health and safety, and consumer safety, among others.

The basic definition of a rule is found in the Administrative Procedure Act (1946), still the central charter of agency procedure: a rule implements, interprets, or prescribes law or policy for the future. For practical purposes, rules are like laws because they bind individuals and companies in the future by laying down norms that must be obeyed. Rules should be distinguished from adjudications. A rule is a general, prospective norm, while an adjudication resolves a concrete case involving certain facts under governing law. The Supreme Court has played a limited role in defining these terms. In National Labor Relations Board v. Wyman‐Gordon (1969), the majority concluded that a new, prospective policy is a rule. In Georgetown University Hospital v. Bowen (1988), the Court reaffirmed the principle that a rule has future effect.

In the early twentieth century, the Supreme Court grappled with the constitutional question of how agencies could adopt binding rules, which have the effect of laws, since Article I of the Constitution grants legislative power to Congress. The Court defined the question as one of delegation of powers. In, for example, Schechter Poultry Corp. v. United States (1935), the Court struck down key New Deal legislation that contained broad, unrestricted delegations of legislative power to administrative agencies. In 1937, however, a momentous shift in the Supreme Court's views produced a more relaxed delegation doctrine. Soon, the Court upheld broad delegations to agencies as in Yakus v. United States (1944), which upheld wartime price control statutes. Today, agencies can issue rules if the governing statute contains an intelligible principle to guide the agency and the courts.

The scope of rule‐making power depends largely on the governing statutes of each particular agency. A rule must be authorized by the governing statutes. It cannot conflict with them and must confine itself within their limits. The Supreme Court and other courts are often called on to interpret statutes. When construing them, courts look first at the relevant language of the statute. They also consult the legislative history to see why the provision in question was written and to discern the statute's purposes as reflected in its history, as in American Textile Manufacturers' Institute v. Donovan (1981).

Judges and commentators have debated the extent to which courts should defer to an agency's interpretation of its statute. The rationale for deference is that an agency is the presumed expert about its law, since it has most experience in interpreting it. The Court's decision in Chevron v. Natural Resources Defense Council (1984) intensified this debate by suggesting that when a statute's language is not clear, a court should inquire whether an agency's interpretation is reasonable, thereby giving considerable deference to the agency. In practice, the degree of judicial deference to an agency continues to vary depending on the subject area, the purpose of the agency's governing statute, the nature of the issue at stake, and the scope and purposes of the rule itself.

See also Administrative State.

Thomas O. Sargentich