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and section 11 (¶ 546) as to examiners to preside at hearings and make or participate in hearings.

[143]

Definition of "Rule" and "Rule Making."-Section 2(c) (¶ 505) defines "rule" as any agency statement of general or particular applicability and future effect designed to implement, interpret or prescribe law or policy, or to describe an agency organization, procedure or practice requirements. The term includes "the approval or prescription for the future of rates, wages, corporate or financial structures or reorganizations thereof, prices, facilities, appliances, services or allowances therefor or of valuations, costs or accounting, or practices bearing upon any of the foregoing." The term apparently includes what are generally designated as "regulations" or "general regulations."

[¶ 44]

"Rule making" designates the agency process for the formulation, amendment or repeal of a rule.

[145]

The definition of rules is important since it determines whether the rule making provisions of section 4 (514) rather than the adjudication provisions of section 5 (¶ 519) apply. The specific activities of rule making quoted in 43 were included so that there would be no doubt that they are embraced within the definition.

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Exemptions.-Exempt from the rule making provisions are (1) military, naval or foreign affairs functions of the United States, and (2) matters relating to agency management or personnel or to public property, loans, grants, benefits or contracts. Section 4 (¶ 514). "The exemption of proprietary matters is included because in those cases the government is in the position of an individual citizen and is concerned with its own property, funds or contracts." House Debates. Rule making activities exempt from notice requirements (49) may also be exempt from this section (¶ 51).

[¶ 47]

Procedure in Rule Making.-There are two important steps in the making of rules so far as private parties are concerned: First, the publication of notice (48); and second, the opportunity for public participation (50). Of no less importance is the separately stated provision according the right of petition for the issuance, amendment or repeal of a rule (¶ 55).

[¶ 48]

Notice.-Section 4(a) (¶ 515) provides for publication of general notice of any proposed rule making in the Federal Register, unless all persons subject thereto are named and either personally served or otherwise have actual notice. Such notice must include

(1) a statement of the time, place and nature of the proceeding;

(2) reference to the authority under which the rule is proposed; and (3) either the terms or substance of the proposed rule or a description of the subjects and issues involved.

Notice otherwise required by law apart from this Act would not appear to be repealed or diminished by this provision.

[¶[49]

Exempt from the notice provisions, unless otherwise required by statute, are proceedings for the formulation of interpretative rules, general statements of policy, rules of agency organization, procedure or practice, or any situation in which the agency for good cause finds that notice and public procedure thereon are impractical, unnecessary or contrary to the public interest. Section 4(a), second sentence (¶ 515).

[¶ 50]

Public Participation.-Section 4(b) (¶ 516) provides that after notice required by section 4(a) (see ¶ 48 above), an agency shall afford interested persons an opportunity to participate in the rule making proceedings through submission of written data or arguments with or without opportunity to present the same orally in any manner. After consideration of all relevant matter presented, the agency must incorporate in any rules adopted a concise general statement of their basis and purpose.

[51]

In rule making procedures, the provisions as to notice (48) and public participation (¶ 50) must be read together. The provision as to notice governs the application of the public procedures since those procedures apply only where notice is required, according to the House Committee Report, which further observes that consideration of practicality, necessity and public interest as discussed in connection with notice requirements (49) will naturally govern the agency's determination of the extent to which public proceedings may be carried.

[¶ 52]

Where rules are required by statute to be made on the record after opportunity for an agency hearing, the requirements of sections 7 (¶ 529) and 8 (534) apply in place of the provisions noted above. Section 4(b), last sentence (¶ 516).

[¶ 53]

Effective Dates. In addition to other requirements, an agency must defer the effective date of any substantive rule for not less than 30 days, with two exceptions. According to section 4(c) (¶ 517), the required publication or service of any substantive rule must be made not less than 30 days prior to its effective date, except as otherwise provided by the agency for good cause found and published with the rule. An exception is also provided as to rules granting or recognizing exemptions, or relieving restrictions, or interpretative rules and statements of policy. Regarding the provision as to effective dates the House Committee comment is instructive

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"This section does not repeal or diminish other time requirements provided by law apart from this bill. It does not provide procedures alternative to notice and other public proceedings required by the prior sections. Nor does it supersede the provisions of section 4(d) [relating to petitions, ¶ 518]. Where public procedures are omitted as authorized in certain cases, [this provision] does not thereby become inoperative. It will afford persons affected a reasonable time to prepare for the effective date of a rule or rules or to take any other action which the issuance of rules may prompt."

[¶ 55]

Petitions. The law also provides that every agency shall accord any interested person the right to petition for the issuance, amendment or repeal of a rule. Section 4(d) (¶ 518). This provision applies not merely to

4 This provision was explained in the House Debates as follows: "The effect of this provision will be to enable parties to express themselves in some informal manner prior to the issuance of rules and regulations, so that they will have been consulted before being faced with the accomplished fact of a regulation which they may not have anticipated or with reference to which they have not been consulted. This provision will make for good public relations on the part of administrative agencies. Wisely used and faithfully executed, as it must be, it should be of great aid to administrative agencies by affording them a simple statutory means of apprising the public of what they intend to do and affording the interested public a nonburdensome method of presenting its side of the case. Day by day Congress takes account of the interests and desires of the people in framing legislation; and there is no reason why administrative agencies should not do so when they exercise legislative functions which the Congress has delegated to them."

existing rules but also to proposed or tentative rules. The Congressional Committees seem in agreement that where such petitions are made the agency must fully and promptly consider them, take such action as may be required, and pursuant to section 6(d) (¶ 528) notify the petitioner in case the request is denied. See also ¶ 525.

ADJUDICATION
[¶ 61]

In General. Section 5 (519), covering adjudication, relates to the so-called "judicial" function of administrative agencies and the deciding of specific cases respecting compliance with existing law or redress under existing law. It applies to both formal and informal proceedings (¶ 68, 69).

[¶ 62]

In the application of this section there are numerous exemptions. First, the section applies only where a case is required by some other statute to be determined on the record after opportunity for an agency hearing. Second, even in such cases, six classes of operations are expressly excepted(1) any matter subject to trial de novo in court, (2) selection or tenure of public officers other than examiners, (3) decisions resting on inspections, tests or elections, (4) military, naval and foreign-affairs functions, (5) cases in which an agency is acting for a court, and (6) the certification of employee representatives.

[63]

The provisions of section 5 relate to notice (¶ 64), procedure (¶66), the separation of prosecuting from judicial functions (70), and declaratory adjudications (172). Reference should be made to other sections for provisions dealing with appearance or representation of parties (¶ 525), subpenas (527), general limitations on agency powers (538), and licenses (539). Provisions for hearings, evidence and decisions are separately considered. See ¶ 101, 111, 121.

[¶ 64]

Notice.-Persons entitled to notice of an agency hearing shall be timely informed of (1) the time, place and nature thereof, (2) the legal authority and jurisdiction under which the hearing is to be held, and (3) the matters of fact and law asserted. Where private persons are the moving parties, other parties to the proceeding shall give prompt notice of issues controverted in fact or law. In other instances, agencies may by rule require responsive pleading. In fixing the times and places for hearings, due regard shall be had for the convenience and necessity of the parties or their representatives. Section 5(a) (¶ 520).

[¶ 65]

"A party must be given ample notice of the legal and factual issues with due time to examine, consider and prepare for them." House Report.

[[66]

Adjudication Procedure.-Adjudication functions are to be carefully distinguished from rule making functions. There are different procedures for each. See ¶ 41.

[¶ 67]

The Act defines “adjudication" as the agency process for the formulation of an order. The term "order" is further defined as the final disposition in any matter other than rule making, whether affirmative, negative, injunctive or declaratory in form. Licensing is expressly included. Section 2(d) (¶ 506).

[¶ 68]

Section 5(b) (¶ 521) provides that an "agency shall afford all interested parties opportunity for (1) the submission and consideration of facts, argu

ment, offers of settlement, or proposals of adjustment where time, the nature of the proceeding, and the public interest permit, and (2) to the extent that the parties are unable so to determine any controversy by consent, hearing, and decision upon notice and in conformity with sections 7 and 8."

[¶ 69]

Agencies are thus required first to afford parties an opportunity for settlement or adjustment of issues in whole or in part, where time, the nature of the proceeding and the public interest permit. To the extent such issues are not so settled, the provisions as to hearing and decisions under sections 7 (529) and 8 (534) apply.

[¶ 70]

Separation of Functions.-Section 5 (c) (¶ 522) deals with the problem of separating prosecuting and deciding functions. It provides that officers who preside at the taking of evidence must make the decision or recommended decision in the case. Save to the extent required for the disposition of ex parte matters as authorized by law, no such officer "shall consult any person or party on any fact in issue unless upon notice and opportunity for all parties to participate; nor shall such officer be responsible to or subject to the supervision or direction of any officer, employee, or agent engaged in the performance of investigative or prosecuting functions for any agency. No officer, employee, or agent engaged in the performance of investigative or prosecuting functions for any agency in any case shall, in that or a factually related case, participate or advise in the decision, recommended decision, or agency review pursuant to section 8 except as witness or counsel in public proceedings." See also ¶ 4(6), 161.

[¶ 71]

This provision does not apply in determining applications for initial licenses or to proceedings involving the validity or application of rates, facilities, or practices of public utilities or carriers; nor does it apply in any manner to the agency itself or members thereof. The exceptions contained in the introductory clause of section 5 (¶ 519) should also be kept in mind.

[172]

Declaratory Adjudications.-Under section 5(d) (¶ 523) each agency is authorized in its sound discretion, with like effect as in the case of other orders, to issue a declaratory order to terminate a controversy or remove uncertainty. This provision is, of course, subject to the general provisions of section 5 (¶ 519).

INCIDENTAL RIGHTS, POWERS AND PROCEDURES

[¶ 81]

Appearance in Person or by or with Representatives.-Section 6(a) (¶ 525) provides that any person compelled to appear in person before any agency or any representative of an agency shall have the right to be accompanied or represented by counsel, or, if permitted by the agency, by other duly qualified representative. Even where a party is not required to appear in person, such party shall have the right to appear in person or by counsel or other duly qualified representative. Also, so far as the orderly conduct of public business permits, any interested person may appear before any agency for the presentation, adjustment or determination of any issue in any proceeding, interlocutory, summary or otherwise.

[¶ 82]

The provisions for appearance are effective "Except as otherwise provided in the Act" (524). Thus, the limitations as to appearances in ex parte hearings would be governed by section 5(c) (¶ 522).

[¶ 83]

Investigations. No process, requirement of a report, inspection “or other investigative act or demand" may be issued or enforced except as

authorized by law. Section 6(b) (¶ 526). According to the House Judiciary Committee, this section is designed to preclude "fishing expeditions" and investigations beyond an agency's jurisdiction or authority. See also section 9(a) (¶ 537, 538).

[¶ 84]

Provision is also made that any person compelled to submit data or evidence shall be entitled to copies thereof, except that in a nonpublic investigatory proceeding the witness may for good cause be limited to an inspection of the official transcript of his testimony. Section 6(b), second sentence (526).

[185]

Subpenas. Where agencies are authorized by law to issue subpenas, private parties may secure them on the same basis as agency representatives, that is, upon a statement or showing of general relevance and reasonable scope of the evidence sought. Where agency subpenas are contested, the court is to inquire into the situation and may issue enforcement orders only so far as such subpenas are found to be in accordance with the law. Section 6(c) (¶ 527).

[¶ 86]

Two important comments have been made as to the provision of this section pertaining to court review: First, that it expressly recognizes the right of parties subject to administrative subpenas to contest their validity in the courts prior to subjection to any forms of penalty for noncompliance. Second, that the effect of the subsection is to do more than merely restate the existing constitutional safeguards which in some cases, such as those involving public contractors (see Endicott Johnson Corp. v. Perkins, 317 U. S. 501) have been held inapplicable.

[¶ 87]

Denials of Requests. Prompt notice must be given by an agency of the denial of any written application, petition or request; and, with certain exceptions, such notice must be accompanied by a simple statement of the procedural or other grounds for the action taken. Section 6(d) (¶ 528). "Under this provision, if the ground is procedural, the agency would be required to state any available further or alternative remedies open to the party. If the ground is not procedural, the agency would be required to make a simple statement of the legal or factual basis of its action." Congressional Debates.

LIMITATIONS ON AGENCY POWERS

[¶ 91]

Agency Sanctions and Powers. In addition to other limitations noted in the Act, sections 9 and 9(a) contain a general statement of the broad limits of agency jurisdiction, as follows: "In the exercise of any power or authority no sanction shall be imposed or substantive rule or order be issued except within jurisdiction delegated to the agency and as authorized by law" (¶ 537, 538). The House Judiciary Committee explains the scope of this provision as follows:

[192]

"This section embraces both substantive and procedural requirements of law. It means that agencies may not undertake anything which statutes or other adequate sources of authority (such as treaties) do not authorize them to do. Where these sources are specific in the authority granted, no additional authority may be assumed. Where these sources are general, no authority beyond the generality granted may be exercised. In short, agencies may not impose sanctions which have not been specifically or generally provided for them to impose. Thus, an agency which is authorized only to issue cease-and-desist orders may not set up a licensing system. An agency authorized to regulate only trade practices may not regulate banking, and so on. Similarly, no agency may undertake directly or indirectly to exercise the functions of some other agency. The section confines

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