It’s impossible to grasp modern American environmental law without some understanding of administrative law–the law that limits and empowers governmental agencies (like U.S. EPA and N.C.’s Department of Environmental Quality). One of the primary ways that executive branch agencies carry out their work is through “rulemaking.” Rulemaking is the process for establishing rules (“regulations”) that have the force of law. Rules and regulations are at the center of many, if not most, of the current controversies over environmental law. So it’s important to understand how and why rules get made–what the “rules for rulemaking” are. The practicing environmental lawyer needs this understanding to advise clients every day, and the person interested in reform of environmental law and policy needs at least a general understanding of the rulemaking process in order to be effective.
So in this and a few followup posts, I will discuss some problems in the way that rules are authorized in North Carolina (and elsewhere, but my focus is on the Tarheel state). I have structured this discussion as “canards, conundrums and conclusions” and I will present three canards, more than three conundrums and a few conclusions.
Canard: 1. a groundless rumor or belief. 2. (French) ‘duck,’ from Old French caner ‘to quack
My three canards–things that are widely believed to be true about the legislative authority for and power of rules–are these:
- Authority for rulemaking is rarely in question and easily found; more critical is whether there are “adequate guiding standards” for the particular rule that’s created
- Rules have the same legal power as statutes; for example, they bind the agency as well as persons outside the agency; they can change the common law; and they can’t be waived or disregarded by the agency that made them
- Rulemaking processes should be consistent from authorization to judicial review
These three propositions are not actually “groundless,” as the definition above implies, but they are taken almost as gospel by most administrative lawyers. In fact, when you scratch their surface just a little, the conundrums pop right up.
In this post, I examine the first canard:
Authority for rulemaking is rarely in question; more critical is whether there are “adequate guiding standards”
In days of yore, when I was in law school, administrative law texts were still written by true believers in the idea that administrative rulemaking was one of the greatest inventions in western law. The core idea behind that claim was that environmental agencies could carry out their regulatory work in basically two ways: either by bringing cases against individual regulated persons for allegedly violating legal standards (adjudication), or else by publishing notice to everyone, gathering comments, and then putting out a rule that applied consistently to a large number of persons (rulemaking). Rulemaking was proclaimed as the fairest and most efficient way to do executive branch business.
There was very little attention paid to the ways in which rulemaking was authorized by legislatures. It could be a general authorization, like those frequently given to agencies in the statutes that create and structure them; it could be a specific authorization in a piece of legislation directing the agency to do something new or different; it might even be implied from some other power granted to the agency. The thinking seemed to be: as long as there is some delegation of power to an agency to operate in a public policy area, rulemaking is just one of the options that is more or less baked into the agency’s authority. But in exercising that authority, courts regularly said, an agency can’t “color outside the lines.” The agency’s raison d’etre was to apply neutral technical expertise to fill in the dots based on “adequate guiding standards” from the legislature.
A still leading North Carolina case, Adams v. North Carolina Dept. of Natural and Economic Resources, 295 N.C. 683 (1978), stated this very well for future disputes in the Tarheel state:
When there is an obvious need for expertise in the achievement of legislative goals the General Assembly is not required to lay down a detailed agenda covering every conceivable problem which might arise in the implementation of the legislation. It is enough if general policies and standards have been articulated which are sufficient to provide direction to an administrative body possessing the expertise to adapt the legislative goals to varying circumstances.
295 N.C. at 698 (emphasis added).
Within this “classic” framework for thinking about the need for legislative authorization of rulemaking power, a statement like the following would suffice:
(a) There is hereby created the Environmental Management Commission of the Department of Environment and Natural Resources with the power and duty to promulgate rules to be followed in the protection, preservation, and enhancement of the water and air resources of the State.
G.S. 143B-282(a) (emphasis added). Then for any instance of challenged rulemaking, the question would be whether the legislature had revealed enough of its intent in the given policy area so that the EMC rules would fit within “adequate guiding standards.” This is an example of what I will henceforth call a “general authorization for rulemaking.”
There are North Carolina cases, even leading cases still cited and relied on widely, that take this broad view—that a general authorization for rulemaking is enough to uphold challenged rules. Consider In re Declaratory Ruling by NC Comm’r of Insurance Regarding 11 N.C.A.C. 12.0319, 134 N.C. App. 22 (1999) (interesting for many reasons including the use of a declaratory ruling to mount a well-financed challenge—the petitioners included Blue Cross and Blue Shield of NC, a host of other insurance companies, and N.C. Citizens for Business and Industry—to a twenty-year old administrative rule).
In 1978 the North Carolina Department of Insurance (NCDOI) adopted a rule stating that “Life or accident and health insurance forms shall not contain a provision allowing subrogation of benefits.” 11 N.C.A.C. 12.0319 (anti-subrogation rule). Subrogation lets an insurer step into the shoes of the insured after it pays a claim, and then go after anyone believed to be at fault for the insurable event. The superior court concluded that NCDOI exceeded its statutory authority and violated the United States Constitution when it promulgated the anti-subrogation rule, holding that “promulgation of the anti-subrogation rule (1) exceeded the statutory authority of the NCDOI, (2) effectively changed North Carolina substantive law allowing legal subrogation, and (3) amounted to an unconstitutional delegation of legislative powers.” 134 N.C. App. at 26.
The Court of Appeals noted the general authority of the Commissioner of Insurance to:
See that all laws of this State that the Commissioner is responsible for administering and the provisions of this Chapter are faithfully executed; and to that end the Commissioner is authorized to adopt rules in accordance with Chapter 150B of the General Statutes, in order to enforce, carry out and make effective the provisions of those laws. The Commissioner is also authorized to adopt such further rules not contrary to those laws that will prevent persons subject to the Commissioner’s regulatory authority from engaging in practices injurious to the public.
G.S. 58-2-40(1) (emphasis added).
Held, this is broad enough authority for the anti-subrogation rule.
This statutory provision gives the Commissioner a broad latitude and flexibility in evaluating other provisions in insurance policies.
. . . .
Given these legislative pronouncements we conclude that “the language of the statute, the spirit of the act, and what the act seeks to accomplish,” all demonstrate a legislative intent to grant the Commissioner of Insurance broad authority to limit insurance policy provisions, like subrogation, that are less favorable to the insured than those specifically addressed by G.S. § 58-51-15.
In re 11 N.C.A.C. 12.0319, 134 N.C. App. at 29-30.
The Court of Appeals goes on to cite Adams in the way one would cite that case to minimize the need for guiding standards:
When evaluating what constitutes “adequate guiding standards” in the “exercise of delegated powers,” the court has stated that “such declarations need be only as specific as the circumstances permit.” Bring v. North Carolina State Bar, 348 N.C. 655, 658, 501 S.E.2d 907, 909, reh’g denied, 348 N.C. 655, 514 S.E.2d 271 (1998) (quoting Adams v. North Carolina Dept. of Natural and Economic Resources, 295 N.C. 683, 249 S.E.2d 402 (1978)).
When there is an obvious need for expertise in the achievement of legislative goals the General Assembly is not required to lay down a detailed agenda covering every conceivable problem which might arise in the implementation of the legislation. It is enough if general policies and standards have been articulated which are sufficient to provide direction to an administrative body possessing the expertise to adapt the legislative goals to varying circumstances….
Id. In addition, the existence of adequate procedural safeguards supports the constitutionality of the delegated power and tends to “insure that the decision-making by the agency is not arbitrary and unreasoned.” Id. (“Procedural safeguards tend to encourage adherence to legislative standards by the agency to which power has been delegated.”).
In re 11 N.C.A.C. 12.0319, 134 N.C. App. at 33.
In accord is Mullins v. NC Cr’l Justice Educ. & training Stds. Comm’n, 125 N.C. App. 339 (1997) (upholding revocation of law enforcement officer’s certification for stealing evidence). In Mullins the Court of Appeals cited more law for the idea that agencies have a reservoir of implied and general powers that can be drawn on when their authority is challenged:
This Court in General Motors Corp. v. Kinlaw, 78 N.C. App. 521 (1985), held that administrative agencies have powers expressly vested by statute and implied powers reasonably necessary for the agency to function properly. “In addition to the powers expressly vested in an agency by statute, those powers reasonably necessary for the agency to function properly are implied from the legislature’s general grant of authority.” Id. at 530(citing In re Community Association, 300 N.C. 267, 280, 266 S.E.2d 645, 654-55 (1980); Charlotte Liberty Mut. Ins. Co. v. State ex rel. Lanier, 16 N.C. App. 381, 384, 192 S.E.2d 57, 58 (1972)). “An issue as to the existence of power or authority in a particular administrative agency is one primarily of statutory construction.” Comr. of Insurance v. Rate Bureau, 300 N.C. 381, 399, 269 S.E.2d 547, 561 (citing Joseph Burstyn, Inc. v. Wilson, 303 N.Y. 242, 101 N.E.2d 665 (1951), rev’d on other grounds, 343 U.S. 495, 96 L.Ed. 1098 (1952)), reh’g denied, 301 N.C. 107, 273 S.E.2d 300 (1980).
125 N.C. App. at 344. The Court of Appeals looks to the general spirit of the agency empowering statute:
The intent of the Legislature in enacting Chapter 17C was to enhance the criminal justice profession through mandated education, training and standards regarding character and moral fitness. Chapter 17C of the North Carolina General Statutes governs the education and training of criminal justice officers. N.C. Gen. Stat. § 17C-1 (1995) provides:
The General Assembly finds that the administration of criminal justice is of statewide concern, and that proper administration is important to the health, safety and welfare of the people of the State and is of such nature as to require education and training of a professional nature. It is in the public interest that such education and training be made available to persons who seek to become criminal justice officers, persons who are serving as such officers in a temporary or probationary capacity, and persons already in regular service.
125 N.C. App. at 345. It is not just a rare or random Court of Appeals decision that takes this broad, deferential, context-matters approach to judicial review of agency rules. This was the standard, “modern” approach to review of rulemaking into the 1980s, as enunciated, for example, by the N.C. Supreme Court in State ex rel. Com’r of Ins. v. N.C. Rate Bureau, 300 N.C. 381 (1980) (complex litigation over the basic system of insurance rate regulation in NC):
One of the primary problems in the case before us, and in other cases involving the interpretation of an administrative agency’s power, results from the established law that legislative power may not be delegated to an administrative agency unless adequate standards are included in the delegating legislation. The Legislature can obviously not anticipate every problem which will arise before an administrative agency in the administration of an act. The legislative process would be completely frustrated if that body were required to appraise beforehand the myriad situations to which it wished a particular policy to be applied and to formulate specific rules for each situation. Clearly, then, we must expect the Legislature to legislate only so far as is reasonable and practical to do and we must leave to executive officers the authority to accomplish the legislative purpose, guided of course by proper standards. See, e. g., American Power and Light Company v. Securities and Exchange Commission, 329 U.S. 90, 67 S.Ct. 133, 91 L.Ed.2d 103 (1946). The modern tendency is to be more liberal in permitting grants of discretion to administrative agencies in order to ease the administration of laws as the complexity of economic and governmental conditions increases. The realities of modern legislation dealing with complex economic and social problems have led to judicial approval of broad standards for administrative action. Detailed standards are not required, especially in regulatory enactments under the police power. 1 Am.Jur.2d, Administrative Law § 118 (1951). North Carolina cases have long been consistent with this “modern tendency.“’
300 N.C. at 399-402 (emphasis added).
In sum, there are published cases in North Carolina that support the idea that authority for agency rulemaking can be found almost anywhere—in general grants of rulemaking authority, in general statements of agency purpose, and even in a notion of implied agency powers, as long as a court sees the rule as somehow furthering legislatively-declared goals.
Conundrum – statutory requirement for specificity, and other limits
What then to make of G.S. 150B-19?
GS 150B-19(1) An agency may not adopt a rule that “(1) Implements or interprets a law unless that law or another law specifically authorizes the agency to do so.”
(emphasis added). This statutory specificity requirement, with other limitations on rulemaking, was added by S.L. 1985-746, the first major revision of North Carolina’s Administrative Procedures Act.
150A-9. Minimum procedural requirements; limitations on rule-making authority; no criminal sanctions authorized.-
(a) It is the intent of this Article to establish basic minimum procedural requirements for the adoption, amendment, or repeal of administrative rules. Except for temporary rules which are provided for in G.S. 150A-13, the provisions of this Article are applicable to the exercise of any rule-making authority conferred by any statute, but nothing in this Article repeals or diminishes additional requirements imposed by law or any summary power granted by law to the State or any State agency. No rule hereafter adopted is valid unless adopted in substantial compliance with this Article.
(b) Each agency shall adopt, amend, suspend or repeal its rules in accordance with the procedures specified in this Article and pursuant to authority delegated by law and in full compliance with its duties and obligations. No agency may adopt any rule that implements or interprets any statute or other legislative enactment unless the power, duty, or authority to carry out the provisions of the statute or enactment is specifically conferred on the agency in the enactment, nor may any agency make any rule enlarging the scope of any trade or profession subject to licensing.
(c) The power to declare what shall constitute a crime and how it shall be punished and the power to establish standards for public conduct are vested exclusively in the General Assembly. No agency may adopt any rule imposing a criminal penalty for any act or failure to act, including the violation of any rule, unless the General Assembly authorizes a criminal sanction and specifies a criminal penalty for violation of the rule.
(d) No agency may adopt as a rule the verbatim text of any federal or North Carolina statute or any federal regulation, but an agency may adopt all or any part of such text by reference under G.S. 150A-14.
Former G.S. 150A-9 (1985) (current language is now GS 150B-19).
This 1985 APA change created the Office of Administrative Hearings, the first of our “central panel” administrative law judges, and the Rules Review Commission, among other things. It grew out, in part, of the furor over the major separation of powers case, State ex rel. Wallace v. Bone, 304 N.C. 591 (1982) (striking down as unconstitutional the General Assembly’s placing of four of its members on the Environmental Review Commission).
In case you think current legislative concern and frustration with agency rules is a new thing, note that in 1983 the General Assembly repealed all agency rules and the existing APA, effective July 1, 1985, thus forcing negotiations over a new approach. S.L. 1983-883. A Study Commission looked at possible revisions, focusing on the APA from Minnesota that eventually became the basis for the revised state model APA of 1981. In 1985 a new APA emerged. For a good history of all this, see Jackson Nichols, The New North Carolina APA: A Practical Guide to Understanding and Using It, 9 Campbell L. Rev. 293 (1987).
Nichols noted G.S. 150B-9 (now 150B-19) in the 1985 APA was a clear indication of the North Carolina legislature’s “preoccupation with rulemaking,” in contrast to other states’ focus on contested case hearings. He also noted that the new language on specificity in authority “reflects legislative concern about the licensing of professions. Under the previous Administrative Rules Review Committee, licensing boards had frequently attempted to establish licensing requirements in areas not addressed by the enabling legislation.” Id. at 304. My understanding from discussion with the Rules Review Commission staff is that this is a continuing problem—the desire of occupational licensing agencies to expand their requirements and areas of regulation without specific authority to do to.
The “specificity” requirement of present-day G.S. 150A-19 was applied in Whittington v. N.C. Dept. of Human Resources, 100 N.C. App. 603 (1990) (rules about allegations of rape and abortion counseling). In Whittington, the Court of Appeals upheld summary judgment for plaintiffs who sought to enjoin enforcement of rules adopted by the Social Services Commission. The rules required directors of county social service departments to report any allegations of rape or incest and to offer each woman who applied for funds for an abortion the opportunity to personally view models showing birth and development of the human embryo and fetus.
The Court of Appeals found the agency did not have specific or implied authority to promulgate the rules in question. Since the rules were adopted by the agency subsequent to the enactment of N.C.G.S. 150B-9, they are subject to the specific requirements of that statute that rules be adopted in accordance with procedures specified in the article and that agencies are prohibited from adopting any rule implementing or interpreting any statute or other legislative enactment unless specifically authorized to do so in the enactment.
Let’s consider the full set of G.S. 150B-19 “Restrictions on what can be adopted as a rule”:
An agency may not adopt a rule that does one or more of the following:
(1) Implements or interprets a law unless that law or another law specifically authorizes the agency to do so.
(2) Enlarges the scope of a profession, occupation, or field of endeavor for which an occupational license is required.
(3) Imposes criminal liability or a civil penalty for an act or omission, including the violation of a rule, unless a law specifically authorizes the agency to do so or a law declares that violation of the rule is a criminal offense or is grounds for a civil penalty.
(4) Repeats the content of a law, a rule, or a federal regulation. A brief statement that informs the public of a requirement imposed by law does not violate this subdivision and satisfies the “reasonably necessary” standard of review set in G.S. 150B-21.9(a)(3).
(5) Establishes a fee or other charge for providing a service in fulfillment of a duty unless a law specifically authorizes the agency to do so or the fee or other charge is for one of the following:
- A service to a State, federal, or local governmental unit.
- A copy of part or all of a State publication or other document, the cost of mailing a document, or both.
- A transcript of a public hearing.
- A conference, workshop, or course.
- Data processing services.
(6) Allows the agency to waive or modify a requirement set in a rule unless a rule establishes specific guidelines the agency must follow in determining whether to waive or modify the requirement.
G.S. 150B-19. Here are some other issues that the Rules Review Commission staff reports seeing regularly with rulemaking authority problems:
An agency cannot use a rule to require someone to follow a policy or website guidance. Staff counsel see proposed language such as “Applicants will follow the procedure found on the agency website” or “The Division shall issue additional criteria in a policy.” This means the agency is proposing to require someone to follow what constitutes a rule under G.S. 150B-2(8a) without subjecting the language to the rulemaking process. RRC staff will recommend objection to the rule.
A process issue: the APA requires an agency to not take any formal action to adopt the rule until the close of the comment period. RRC staff have seen many agencies take final action to adopt days or even mere hours before the comment period closed, often with the caveat, “We’ll revisit this if any comments are received before the close of the comment period.” But see G.S. 150B-21.2(g). If the agency adopts before the close of the comment period, RRC staff will recommend objection for failure to comply with the APA.
Some agencies may try to promulgate a rule to give sweeping, unconstrained authority because they have general authorization for rulemaking–for example, a statute that allows an agency to “implement the Chapter.” RRC staff sometimes see proposed rule language that says that an individual must show “to the satisfaction of the Board” that their license should be granted, or that licenses may be revoked or denied “at the Board’s discretion.” While a Board generally has significant statutory authority to license an individual, this does not mean that the rules governing licensure can fail to include specific guidelines regarding what will be required to get the license.
In sum, while there are published opinions saying that general or implied rulemaking authority is adequate for agencies in North Carolina, the APA now requires at least some sort of specific authority in the case of a rule that “implements or interprets a law.”
A further conundrum: is there a “common law” of rulemaking in N.C.?
Consider the Halifax Smoking Case, City of Roanoke Rapids v. Peedin, 124 N.C. App. 578 (1996) (prescribing very limited standards for permissible local Board of Health rules and striking down rules for procedural deficiencies unrelated to any statutory requirements). What happens when a court is faced with agency rules that, despite pretty clear legislative authority, butt up against the court’s sense of the proper role of an agency vis-à-vis important economic and political interests?
In any event, it is unnecessary for purposes of our opinion to resolve the parties’ dispute as to whether the statutory sections set out above empowered the Board to adopt the HCSCR. Assuming arguendo the Board was accorded statutory authority to establish rules regulating public smoking, we hold enactment of the HCSCR [Halifax County Smoking Control Rule] exceeded the general limitations imposed upon rule making powers of boards of health.
Our courts have not previously specifically enunciated restrictions on the legislative grant of rule making authority to boards of health. However, based upon previous holdings in related areas, as well as the holdings of courts in other jurisdictions [!], we conclude a board of health acts within its rule making powers when it enacts a regulation which (1) is related to the promotion or protection of health, (2) is reasonable in light of the health risk addressed, (3) is not violative of any law or constitutional provision, (4) is not discriminatory, and (5) does not make distinctions based upon policy concerns traditionally reserved for legislative bodies.
Whatever the statutory authority of the Board to enact regulations governing public smoking, we believe the HCSCR to be invalid as representing distinctions reserved to legislative policy-making, and thus do not discuss the remaining factors. See Cookie’s Diner, 640 N.E.2d at 1240-41 (smoking regulations invalid which discriminated among restaurants and businesses on bases of enforceability and economics).
124 N.C. App. at 587-88 (emphasis added). Wait…what? Where did that gloss on rulemaking come from? Oh…”previous holdings in related areas, as well as the holdings of courts in other jurisdictions.”
A final conundrum: does the legislature really always draw all the necessary dots–and do we really expect it to?
A final conundrum I wish to point out is the (to me) obvious fact that the legislature quite often defers decisions to rulemaking not because the decisions are relatively trivial, “color inside the lines” decisions, but rather because of the opposite problem: it’s too difficult technically or politically for the legislature to come to a precise enough decision on its own to guide regulated entities on the line between right and wrong. In other words, the legislature quite often (it seems to me) lets an agency make the hard calls.
This is the sort of behavior that courts have historically said was forbidden under the anti-delegation doctrine, because it allegedly gives excessive discretion to unelected officials. Anyone involved for any length of time in environmental legislative debates sees occasions when the legislature feels the need to “do something,” and has an idea of the general direction things should go, but doesn’t have the time, technical expertise or other resources to figure out exactly what should be done about details that themselves are quite critical to the overall policy of the State. The legislature then wants its agency to take a shot at filling in the critical, missing links in the legal change that a majority feels should occur, but without know exactly how–or in some cases without knowing even what all the important questions are. Is this really wrong?
As I will discuss further in my conclusions to this series of blog posts, I believe that judicial opposition to this thinking ignores the modern (post-modern? metamodern?) realities of rulemaking. For example, legislatures have varying levels of trust in their agencies, and generally give such discretion only when the legislature itself is comfortable that the delegation is the best way to proceed. Also, since 1995 at least, in North Carolina, the legislature has crafted ways to make sure that any controversial rules can easily return for its review before they become effective. Courts have not yet adjusted to the fact that there are new post-agency process safeguards on rulemaking. I think they should be encouraged to factor in all the varied processes that rules go through in reviewing a rule’s legitimacy.
Conclusions in regard to this first canard
- One shouldn’t count on general grants of rulemaking authority in N.C.
- One should pay attention to all the statutory limits on rulemaking in GS 150B-19
- There is no certain formula or magic language in making specific grants of rulemaking authority, except that agencies that wish to charge or raise fees or expand the reach of professional licensing requirements need very specific legislative direction to do so.
- One shouldn’t ignore general statements of legislative policy or intent; they do count, especially in dealing with close interpretive questions or rules that run counter to powerful interest groups. In particular, when drafting new and politically controversial statutes that require rulemaking, it’s best to include clear statements of legislative policy and intent in the actual codified language of the bill, not just in preambles and “whereas” clauses.
- I believe the Halifax Smoking Case was an outlier (i.e. wrong, bad law), and should be taken just as a reminder that there is and probably always will be lingering judicial skepticism about the legitimacy of agency rules that take on powerful special interests when and if the legislature itself has not directly done so.
In the end, despite the Halifax Smoking Case and the other complexities and conundrums noted, I believe the Court of Appeals got it right in saying, in the insurance subrogation case, “[i]n construing the laws creating and empowering administrative agencies, as in any area of law, the primary function of a court is to ensure that the purpose of the Legislature in enacting the law, sometimes referred to as legislative intent, is accomplished. The best indicia of that legislative purpose are “the language of the statute, the spirit of the act, and what the act seeks to accomplish.” 134 N.C. App. at 27. (emphasis added) (citation omitted).
There has also been recent litigation over the question of specific versus broad agency authority for rules at the federal level. Consider Mayo Foundation for Medical Education & Research v. United States, 562 U.S. 44 (2011) (challenge to rules defining tax status of medical interns). The rule in question categorically provided that an employee working 40 hours or more a week (as did medical interns) was not a “student” and therefore was not excluded from taxation. The hospital industry challenged this rule, asserting that medical interns, despite their long work hours, were predominantly there for the education, and thus fit under the statutory exemption for students.
Federal administrative law has a more evolved approach to the analysis of agency rules, following the landmark case of Chevron, USA, Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) (first ask whether the legislature has specifically addressed the precise point at issue; if not, defer to the agency’s interpretation as long as it is a permissible interpretation of the statute). But the plaintiffs in Mayo Foundation pointed out that there was an earlier, special, multi-factor test for the authority for revenue rules, from the case of National Muffler Dealers Assn., Inc. v. United States, 440 U.S. 472, 477 (1979) (“A regulation may have particular force if it is a substantially contemporaneous construction of the statute by those presumed to have been aware of congressional intent. If the regulation dates from a later period, the manner in which it evolved merits inquiry. Other relevant considerations are the length of time the regulation has been in effect, the reliance placed on it, the consistency of the Commissioner’s interpretation, and the degree of scrutiny Congress has devoted to the regulation during subsequent re-enactments of the statute.”).
The plaintiffs in Mayo Foundation urged the Court to overturn the medical intern rule, using National Muffler analysis, because the rule in question, like the rule in National Muffler, was based on the agency’s general authority, not a specific Congressional directive to promulgate rules: the general authority
under 26 U.S.C. § 7805(a) to “prescribe all needful rules and regulations for the enforcement” of the Internal Revenue Code. In two decisions predating Chevron, this Court stated that “we owe the [Treasury Department’s] interpretation less deference” when it is contained in a rule adopted under that “general authority” than when it is “issued under a specific grant of authority to define a statutory term or prescribe a method of executing a statutory provision.” Rowan Cos. v. United States, 452 U.S. 247, 253 (1981); United States v. Vogel Fertilizer Co., 455 U.S. 16, 24 (1982) (quoting Rowan).
Mayo Foundation, 562 U.S. at 56 (internal citations omitted).
The Mayo Foundation Court concluded that Chevron had superseded these earlier opinions, so that it need no longer consider whether a rule was promulgated under general versus specific authority. The test would always be the Chevron test:
Since Rowan and Vogel were decided, however, the administrative landscape has changed significantly. We have held that Chevron deference is appropriate “when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority.” Mead, 533 U. S., at 226–227. Our inquiry in that regard does not turn on whether Congress’s delegation of authority was general or specific. For example, in National Cable & Telecommunications Assn., supra, we held that the Federal Communications Commission was delegated “the authority to promulgate binding legal rules” entitled to Chevron deference under statutes that gave the Commission “the authority to ‘execute and enforce,’” and “to ‘prescribe such rules and regulations as may be necessary in the public interest to carry out the provisions’ of,” the Communications Act of 1934. 545 U.S., at 980–981, 125 S. Ct. 2688 (quoting 47 U.S.C. §§ 151, 201(b)). See also Sullivan v. Everhart, 494 U.S. 83, 87, 88–89, 110 S. Ct. 960, 108 L.E2d 72 (1990) (applying Chevron deference to rule promulgated pursuant to delegation of “general authority to ‘make rules and regulations and to establish procedures, not inconsistent with the provisions of this subchapter, which are necessary or appropriate to carry out such provisions’” (quoting 42 U.S.C. § 405(a) (1982 ed.))).
We believe Chevron and Mead, rather than National Muffler and Rowan, provide the appropriate framework for evaluating the full-time employee rule.
562 U.S. at 56-57.
In sum, there was a period (the 1980s, so perhaps it can be forgiven) when federal courts were supposed to pay attention to whether agency rules were promulgated under specific versus general authority, and give more deference to those with specific authority—similar, in a way, to the current state of North Carolina administrative law. But as of the Mayo Foundation case (2011), the general vs. specific authority question is no longer important at federal law, at least for this purpose of judicial review of an agency’s rule.
Nothing stays still in the administrative law realm, however–sometimes I think there is a fundamental law of legal nature that the topics with the least interesting sounding names, like “administrative law,” have the most dynamic and important currents swirling beneath them–and with the Supreme Court’s decision in King v. Burwell, 576 U.S. ___ (2015)(upholding parts of the Affordable Care Act, aka “Obamacare”) the whole question of Chevron deference and its meaning is back on the operating table. Chief Justice John Roberts, in his opinion for the Court, wrote that Chevron didn’t apply because the health care case is “extraordinary” and centers on a question of “deep ‘economic and political significance.'” A new gloss on rulemaking, indeed.
For what it’s worth, Justices Scalia and Thomas still regularly resist any approach to rule review that involves deference to agency interpretation. See, e.g., Decker v. Northwest Env’l Defense Center, 133 S. Ct. 1326 (2013) (concerning the Environmental Protection Agency’s various regulatory interpretations of the statutory term “point source” as applied to logging operations).