Opinion ID: 428535
Heading Depth: 2
Heading Rank: 1

Heading: Late Arising Claim

Text: 11 The Secretary's argument based on the interpretative rule exception runs into trouble immediately, because he adverted only to the good cause exception when he promulgated the rule. He never suggested in 1981 that any portion of the rule was merely interpretative. The court raised this issue at oral argument, and counsel for the Secretary gave three answers. First, the Secretary is not required to denominate certain rules as interpretative when he issues them. In contrast, the APA specifically requires that when an agency relies on the good cause exception it must incorporate[ ] the finding and a brief statement of reasons therefor in the rules issued, 5 U.S.C. Sec. 553(b)(B) (1982). Second, it is cumbersome for an agency to label each part of long regulations according to whether they are substantive, interpretative, policy-making, etc. Third, regardless of how the Secretary explained himself at the time, whether a rule is substantive or interpretative is a question of law ultimately to be decided by the court. 12 These responses are unpersuasive, particularly in the circumstances of this case. Although it is true that the APA requires a statement regarding good cause but not interpretative status when a rule is issued, the distinction does not compel the negative inference counsel would have us draw. When an agency promulgates a rule without following section 553 procedures, it will always be important to know that the agency believes that the rule nevertheless has legislative effect. Because a rule promulgated pursuant to an agency's legislative authority is entitled to greater deference by the courts than are interpretative rules or policy statements, see, e.g., Batterton v. Francis, 432 U.S. 416, 424-26, 97 S.Ct. 2399, 2404-06, 53 L.Ed.2d 448 (1977); Nason v. Kennebec County CETA, 646 F.2d 10, 18 (1st Cir.1981), one runs greater risks in not following legislative rules. It is therefore important to inform the public at the time of promulgation that a rule is legislative, and this information is conveyed by invoking the good cause exemption. In contrast, although it may be helpful to state at the time of promulgation that a rule is interpretative, not doing so is less likely to affect the conduct or the potential liabilities of the regulated population. Moreover, exemption from section 553 for legislative rules is available only in extreme cases. See infra p. 184. Congress may well have required a statement of good cause as a cautionary device to reinforce the exceptional nature of the exemption: an agency cannot dispense with section 553 procedures without first finding good cause, and forcing the agency to formulate a coherent and compelling statement of its finding could induce circumspection and help to inhibit unjustified invocation of the good cause exemption. Since Congress had no aversion to casual promulgation of interpretative rules, there is no parallel reason to require a statement of interpretative status at the time of promulgation. 13 The second response, that such identification is cumbersome, is refuted by the Secretary's own actions. In promulgating the interim rule in 1981, the Secretary wrote an extensive preamble, discussing the major points of the rule. See 46 Fed.Reg. at 44,712-21. We do not perceive any great difficulty in adding a brief statement where appropriate that a particular part of the rule is merely interpretative. In fact, the Secretary included such statements when he promulgated the final rule in 1982. Although most of the final rule was based on the interim rule and had thus been subject to the 120-day comment period announced in 1981, some aspects were completely new, taking into account statutory amendments enacted later in 1981 and 1982, and had never been subject to public comment. The Secretary mentioned his reasons in each instance for not having provided for public comment. See 47 Fed.Reg. at 52,330, 52,331. Although his statements did not make clear the legal basis for dispensing with notice and comment procedures, their presence indicates that it is not overly cumbersome to give some contemporaneous indication of all the reasons for dispensing with section 553 procedures. 14 Counsel's final response, that it is up to the courts to determine whether a rule is legislative or interpretative, is correct, cf. CBS v. United States, 316 U.S. 407, 416, 62 S.Ct. 1194, 1200, 86 L.Ed. 1563 (1942) (label placed ... by the Commission is not necessarily conclusive, for it is the substance ... which is decisive), but it is not really responsive to the question we face. An agency should not hesitate to state that a rule is interpretative simply because a court might possibly reject that characterization later. A court will always at least be interested in the agency's statement of what it thought it was doing at the time it promulgated a rule. See British Caledonian Airways v. CAB, 584 F.2d 982, 992 (D.C.Cir.1978) (agency's views are generally given deference). Indeed, there is great value to a reviewing court in having the actual reasons relied upon at the time the challenged action was taken. Cf. Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 419, 91 S.Ct. 814, 825, 28 L.Ed.2d 136 (1971) (rejecting post hoc rationalizations); SEC v. Chenery Corp., 318 U.S. 80, 94, 63 S.Ct. 454, 462, 87 L.Ed. 626 (1943) ([T]he courts cannot exercise their duty of review unless they are advised of the considerations underlying the action under review.). Holding a decision maker to his contemporaneous statement of reasons in most instances will encourage better considered judgments and will discourage the attitude of act now, make up reasons later. 15 Considerations of fairness also counsel great skepticism toward after-the-fact rationalizations, particularly in circumstances such as those before us. Here the Secretary made a determination in September of 1981 that he could promulgate rules without notice-and-comment procedures, and he recognized that he had to give some reason for acting so quickly. At the time, when his mind was focused on the problem, he never mentioned the possibility that some or all of the new regulations might be interpretative. His reliance on the good cause exemption was likely to lead the public to believe that the rules were intended to be legislative, and this could reasonably affect both public response to the rules, see supra pp. 179 - 180, and litigation efforts. It seems both unfair and disingenuous to allow the Secretary to say later that he didn't mean it. In sum, although the courts may make the final determination of whether a rule is legislative or interpretative, a highly relevant datum in the determination is the agency's contemporaneous characterization of its action. 16 For all the reasons given above, we are inclined to give little weight to an agency's post hoc reconstruction of its efforts and intentions. The district court also treated with some skepticism the Secretary's argument that the rule was interpretative, finding it to be late arising. Levesque v. Block, No. C82-437-L, slip op. at 10 (D.N.H. Jan. 26, 1983) [hereinafter cited as Dist.Ct.Op.]. It went on, however, to address the claim on the merits and held that the rule was legislative. We agree, and largely for the same reasons, as we discuss next.