Published on The Democrat News

Federal Administrative Law: How Agencies Make Rules

Federal administrative agencies issue thousands of rules each year that have the force of law — often with more practical impact on daily life than the statutes Congress enacts. Understanding how agencies make rules, and how those rules can be challenged, is increasingly important for businesses, advocates, and citizens affected by federal regulatory action.

The Rulemaking Process

Most significant federal rules go through notice-and-comment rulemaking under the Administrative Procedure Act (APA). The process begins with a Notice of Proposed Rulemaking (NPRM) published in the Federal Register. The public — individuals, businesses, advocacy organizations — has an opportunity to submit written comments. The agency must consider all significant comments and respond to them in the final rule. A final rule typically takes effect 30 days after publication, though major rules affecting the economy may have longer effective dates.

Judicial Review

Agency rules can be challenged in federal court under the APA's arbitrary and capricious standard — courts will set aside agency action that is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. The Supreme Court's 2024 decision in Loper Bright Enterprises v. Raimondo overruled the Chevron doctrine, eliminating the deference courts had previously given to agencies' reasonable interpretations of ambiguous statutes. This shift increases the scrutiny courts apply to agency interpretations of their own authority.

Major Questions Doctrine

The Supreme Court has developed the major questions doctrine as a further constraint on agency rulemaking. Under this doctrine, an agency must have clear congressional authorization before it can regulate matters of vast economic and political significance. The doctrine has been used to limit EPA climate regulations, vaccine mandates, and student loan forgiveness — reshaping the boundaries of administrative power.

Notice-and-Comment Rulemaking

The workhorse of federal rulemaking is notice-and-comment — the procedure under APA § 553 that requires agencies to publish proposed rules in the Federal Register, solicit public comment, and respond meaningfully to significant comments before issuing final rules. The process provides democratic input into regulatory decisions and creates a record that courts use to review agency action. Notice-and-comment rulemaking can take years for major rules: the drafting and internal review, the public comment period (typically 30–60 days, longer for complex rules), analysis of comments, and drafting the final rule all require substantial agency resources. Critics argue this process has become so burdensome it impedes effective governance; defenders contend the deliberativeness is a feature, not a bug.

Exceptions to Notice-and-Comment

Not all agency rules require notice-and-comment. The APA exempts interpretive rules, general statements of policy, and rules relating to agency procedure and practice. Agencies sometimes use these exceptions to issue guidance documents that effectively function as binding rules without going through the full rulemaking process — a practice that generates significant legal controversy. Courts have also recognised a good cause exception allowing agencies to bypass notice-and-comment when it would be impracticable, unnecessary, or contrary to the public interest, though courts scrutinise invocations of this exception carefully.

The Chevron Doctrine and Its Demise

For forty years, Chevron U.S.A. v. Natural Resources Defense Council (1984) required courts to defer to agencies' reasonable interpretations of ambiguous statutes they administer — a principle that significantly expanded agency authority. The Supreme Court overruled Chevron in Loper Bright Enterprises v. Raimondo (2024), holding that courts must exercise independent judgment on questions of statutory interpretation rather than deferring to agency views. This landmark shift will increase judicial scrutiny of agency rules and may require agencies to more carefully justify their interpretations of ambiguous statutory language in the rulemaking process itself.

The Major Questions Doctrine

The Supreme Court has also developed the major questions doctrine — most prominently in West Virginia v. EPA (2022) — under which courts will not accept agency claims of broad regulatory authority over economically or politically significant matters without clear congressional authorisation. The doctrine represents a structural limit on agencies' ability to rely on broadly worded statutory grants to address novel or sweeping regulatory problems. Its application has already constrained EPA climate rules, OSHA vaccine mandates, and student loan forgiveness programs, and it will likely shape the boundaries of agency rulemaking in many other contexts.

Judicial Review Standards

Agency rules are subject to judicial review under APA § 706, which authorises courts to set aside agency action that is arbitrary, capricious, an abuse of discretion, contrary to constitutional right, in excess of statutory authority, or without observance of required procedure. The arbitrary-and-capricious standard requires agencies to examine relevant data, consider all important aspects of a problem, and offer a reasoned explanation for their choices — they cannot ignore significant comments, reverse prior positions without explanation, or rely on factors Congress did not intend them to consider. Post-Loper Bright, courts will also apply fresh statutory analysis rather than deference when reviewing whether an agency had legal authority for its rules.