Administrative Law

Modern government provides a vast array of powers to administrative agencies. The Department of Agriculture determines which farmers may participate in farm programs under what conditions. The Department of Transportation regulates the trucking industry and supervises the safety of the airways. Agencies license various professions, operate parks and public forests, set pollution standards, supervise the public health, and so on. We study the legal powers and constraints on state and federal administrative agencies in the field of Administrative Law. This portion of the law for laymen series introduces administrative law: we are just beginning the process, so be patient. If you would like us to discuss a particular aspect of administrative law, let us know.

Can Administrative Agencies pass laws?

Administrative agencies can make rules, which are very much like the laws passed by Congress or state legislatures. Agencies may pass regulations which make certain conduct illegal. Agency regulations can require people to behave in certain ways. For example, the Federal Aviation Administration may pass a regulation which requires all airplanes to use a ground proximity warning system. The Environmental Protection Agency might pass a regulation limiting the amount of lead or mercury released into the environment. The state Pollution Control Administration might prohibit feedlots above a certain size. But administrative agencies operate within the Executive Branch, that is, under the President of the United States or under the governor of a state. How, then, is it possible that an administrative agency can make rules, which have the force and effect of law.

Delegation of Legislative Authority.

The answer is that law making authority must be delegated by the legislative branch. Congress, for example, passes a law delegating the authority to the Federal Aviation Administration, the authority to set safety standards for airports and airlines. Congress grants to the Food and Drug Administration the authority to test and license medicines and drugs. The authorizing legislation typically sets broad standards for the agency, and tells the administrative agency that it may make rules so long as the agency stays within certain legal guidelines. Both the legislative branch and the judicial branch of government watch over this process of rule making. If an agency seems to pass unreasonable rules, citizens complain, and the Congress passes a law limiting the agency's authority or simply changing the rule itself. Or, a citizen might challenge the rule in the Courts, contending that the rule is outside the agency's authority, or arbitrary, or passed in violation of procedural rules governing rule making. Part of the practice of administrative law is challenging agency rules; but a far more significant part of that practice is assisting clients in complying with complex rules, or advocating for changes before the agency itself.

How do Agencies Make Rules.

Federal agencies make rules under procedures set out in the federal Administrative Procedure Act. Minnesota, like many other states, has its own Administrative Procedure Act (APA). The APA tells agencies what procedures they must follow to make a rule. Most rules must follow a notice and comment procedure. Under this procedure, the agency notifies the public of the proposed text of a rule. Federal proposed rules appear in the Federal Register. Minnesota proposed rules appear in the State Register. Sometimes an agency will issue an Advanced Notice of Proposed Rule-making, which represents an invitation to provide early ideas about what should go into the agency's proposed rule. For many years, the text of a proposed rule was written by the agency and certain insiders who had special access to the agency. The Advanced Notice is a more democratic process, in that it gives more open access to the earliest stages of rule making. Under Notice and Comment Rule-making, the agency gives interested parties a fixed amount of time to provide comment to the agency about the proposed rule. After receiving and considering that comment, the agency then issues a revised final rule. The agency also issues findings and commentary to explain the reason for its decisions. This helps the public to understand the rule, and it also helps courts to determine whether the agency properly considered the comments and all of the relevant facts and policies. You can view a description of the Minnesota State Rule-making process here.

Trial-Type Rule-making.

Some statutes require the administrative agency to hold a trial-like hearing to take evidence for, or against, the proposed rule. Minnesota agencies use this system much more than federal agencies. Typically trial type rule-making works this way. After the agency publishes notice of the proposed rule, any interested person may demand a trial-type hearing on the record. After proper demand, the agency refers the proposed rule to an independent Administrative Law Judge (ALJ) to develop the record and make proposed findings. The ALJ then conducts a trial-like hearing, taking evidence and public comment. After the hearing, the ALJ issues a report in which she recommends adoption of the rule, rejection of the rule, or adoption of the rule with changes. This report is forwarded to the agency, which makes the final decision based upon the recommendations of the ALJ. The final decision to adopt will be made by the chief officer of the agency, a Commissioner or Cabinet Secretary, or someone officially delegated to make that decision on behalf of the agency. The agency chief need not follow the recommendations of the ALJ. Once the agency adopts a final rule, it becomes the rule subject to judicial review.

Interpretive Rules

After an agency makes rules, various questions arise about how to interpret those rules. Lower level employees look for guidance from management. The agency begins to develop a list of "frequently asked questions." Or it may want to explain the rules in the form of an agency manual. Pretty soon the agency begins to codify those policy decisions in a more readily available form. The Corps of Engineers for example keeps Regulatory Guidance Letters. The Internal Revenue Service keeps letter rulings. A welfare agency creates a manual to guide its financial workers. And so on. These policies make law, in a practical sense, because they govern the actual conduct of administrative personnel. But are they "law?!" Should they be subjected to review and comment? There are good arguments on both sides of this question. We want agencies to answer the same question the same way, when it makes decisions on similar situations for two different people. We don't want the outcome to depend upon a particular person's power or influence. Interpretive "rules" help agencies maintain consistent policies, and therefore perform an important function. In the federal system, Courts afford persuasive weight to these interpretive rules, because they provide information about how the agency has interpreted the rule, and the agency has special knowledge and expertise. The exact weight to be given policy and procedure manuals depends upon the circumstances; in Minnesota, supposedly interpretive rules should be published for notice and comment, just like other rules, before courts give them legal weight. Do you think this is a good idea?

Judicial Review of Rules.

The courts may overturn an agency rule in two ways. First, a party to the rule making proceeding may challenge the rule on appeal from adoption of the rule itself. Second, a person may challenge the rule as unlawful when the agency attempts to enforce the rule against that person. When a court considers a rule, it considers whether the rule falls within the authority delegated by the legislature; it considers whether the agency acted arbitrarily and capriciously; and it considers whether the agency complied with appropriate rule-making procedure. A great body of administrative law has developed regarding the respective role of the courts and the agencies.

This is the beginning of our discussion on administrative law. In this panel, we have introduced the power of administrative agencies to act like a legislature, by making rules. In the next panel, we will discuss an agency's powers to act more like a court, by issuing decisions about an individual person or company.

More Information:

One of the finest legal minds of the twentieth century was Kenneth Culp Davis, author of Administrative Law Treatise. His four volume work, especially in its original version, is well worth reading. We highly recommend it.