On March 9, 2015, the United States Supreme Court unanimously ruled in Perez v. Mortgage Bankers Association that administrative agencies do not need to post public notice or solicit comments when they revise interpretive rules.
The federal Administrative Procedure Act (APA) governs the way that administrative agencies of the U.S. government may propose and establish regulations. One of the jobs of administrative agencies is to issue rules, which the APA defines as, “an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy.”
There are two types of rules: “legislative” and interpretive. Legislative rules have the force and effect of law, and are what is commonly thought of when the term “regulation” is used. Because legislative rules have the binding effect of law, the APA requires them to go through a notice-and-comment process, which allows the public an opportunity to comment on a proposed rule. Agencies, in turn, review and respond to the comments. Initial proposals are often changed via the comment process. An example of a recent “legislative rule” that impacted dog owners and breeders was the 2013 USDA/APHIS rulethat revised the definition of “retail pet store” under the Animal Welfare Act.
Interpretive rules, on the other hand, only state an agency’s interpretation of its governing law or regulations. As a result, the APA provides that when a federal administrative agency first issues a rule interpreting one of its regulations, it is generally not required to follow the notice-and-comment rulemaking procedures. For example, a 2014 interpretation by the Department of Health and Human Services/Centers for Disease Control and Prevention (HHS/CDC) provided guidance that described the factors that HHS/CDC will consider in determining whether it will issue a dog confinement agreement allowing entry of a dog into the United States that has not been adequately immunized against rabies, or whether they would be denied entry.
The Supreme Court’s consideration of the Perez case developed from a conflict between the federal Administrative Procedure Act (APA) and the U.S. Court of Appeals for the D.C. Circuit. While the APA specifically does not subject interpretive rules to the notice-and-comment requirements, the D.C. Circuit, in cases dating back to 1997, repeatedly held that agencies must use the APA’s notice-and-comment procedures when issuing new interpretations of regulations that deviate significantly from previously-adopted interpretations.
THE COURT’S DECISION
In writing for a majority of the Court, Justice Sonia Sotomayor focused specifically on the clear wording of section 4(b)(A) of the APA, which provides that (unless another statute states otherwise) the notice-and-comment requirement for legislative rules does not apply to interpretive rules, general statements of policy, or rules of agency organization, procedure, or practice.
In attempting to define “interpretive rule”, Justice Sotomayor relied on existing Supreme Court precedent in writing that “the critical feature of interpretive rules is that they are ‘issued by an agency to advise the public of the agency’s construction of the statutes and rules which it administers.’” This benefits agencies by making the process of issuing interpretive rules comparatively easier than issuing legislative rules. However, Justice Sotomayor reiterated that interpretive rules do not have the force and effect of law, and therefore are not accorded that weight in the judicial process.
The ruling has broad implications for federal agencies, including greater deference by the courts to agency action and flexibility in agencies fixing flawed previous rule interpretations.
The ruling is not without criticism. In writing for Bloomberg View, Noah Feldman, a constitutional and international law professor at Harvard University, argues that, “…in the real world, interpretive rules function as laws,” and that changes to those realistic functions without getting feedback from those who will be affected by the change will “unsettle settled expectations, creating new winners and new losers.”
Litigation seeking further judicial guidance on the difference between legislative and interpretive rules is expected.
With 125 years of experience in the study and welfare of dogs, the American Kennel Club (AKC) is a leading expert on dog ownership, care, well-being and public policy issues that pertain to dog ownership. The primary role of the AKC in the area of canine public policy is educational and informational. To that end, AKC’s Government Relations Department monitors proposed legislative and regulatory changes, and works with policy makers at all levels and branches of government to promote reasonable, fair, and effective laws and rules that protect dogs, the rights of those who breed and keep them responsibly, and the public.