The Law of Public Participation in Administrative Decision-Making in the United States¹

Joshua I. Schwartz, Professor of Law

I.  Public Participation as a Requirement in the Decision-
Making Process

Public participation should be integral to the decision-making process, not an after-the-fact public relations exercise. Unless this is assured, public participation will neither assist in sound decision-making, nor improve relations between agencies and the public!

II.   National, State and Local Governments in the United
States

Reminder: The United States has a "federal" system of government-a strong national government superimposed on a system of 50 states regarded historically as possessing residual sovereignty.

Because of this federal structure, much of the substantive law-making authority remains in the hands of state government.

In addition, some of the rules about required procedures for participation mentioned here apply only to the activities of the federal government itself; others, because they rest on certain provisions of our national Constitution, especially the Due Process Clauses-there

¹ Based on notes provided for the use of the members of the Thai Council of State Study Tour working on the draft "Listening to the Public Act," and include some background and detail that there was not time to present at the oral session on June 11, 2001. These notes were also presented for the use of the members of the Thai Administrative Court Study Tour in Washington, D.C. from July 25 -29, 2001.Presented to the Thai Council of State Study Tour at George Washington University, June 11,2001.

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are two-of our Constitution, apply equally to federal, state, and local government actions and bodies. I will try to indicate which rules are which as I go along.

Local government is regarded as subject to the control of the states and their constitutions, so there is a lot of variation in the procedures of local and municipal governments in the USA. However, procedures for local government administrative agency adjudication are subject to federal due process requirements to the same extent as procedures for state government agency adjudication. Those federal due process requirements for adjudicatory procedures thus constitute a common "floor" level of procedure that is generally applicable in almost all adjudicatory settings. We shall see that there is no similar common floor for the procedures for federal, state and local government agency rulemaking procedures.

III. Diverse Kinds of Proceedings; Diverse Sources of Controlling Law

For present purposes we will address three major types of decision-making processes delineated in United States law: Legislation, Administrative Rulemaking, and Administrative Adjudication. A fourth kind of procedure-judicial adjudication-is largely outside our current subject, but, of course, exists and is recognized in the United States.

The requirements of U.S. law with regard to opportunities for public participation are different for legislation, administrative rule-making, and for administrative adjudication. Not only do the particular participation requirements vary, but the identities of the controlling bodies of law are not identical either.

Some of the applicable requirements (particularly for participation opportunities in administrative adjudication, whether by federal, state, or local government agencies) flow from the Due Process Clauses (there are actually two of them) of the United States Constitution; some (at least as to federal agencies) flow from generically applicable statutes, most importantly our federal

Administrative Procedure Act ("APA"), some come from specific statutes applicable to a particular agency or decisional context, and some from agency regulations. As to state and local government agencies engaged in rulemaking proceed-ings, any applicable hearing or participation requirements are not likely to come from federal law at all, although the requirements of applicable state or local law frequently parallel those applied by federal law to rulemaking procedure for federal administrative agencies.

The plan of organization for this presentation is essentially to work through the applicable hearing/participation requirements for Legislation, for Administrative Adjudication, and for Administrative Rulemaking, in that order. In connection with each major type of proceeding, all of the relevant sources of controlling law are canvassed and their key requirements covered.

IV. Legislation

Recall that in the U.S. there are legislatures at the national, state, and local/municipal levels.

Generally, legislative action is distinguished from administrative rulemaking (see below), to which it has a functional resemblance, by the fact that legislators are elected, rather than appointed to their positions. (However, for peculiar reasons-well outside the scope of this presentation-local government legislatures-such as city councils-are sometimes treated as unelected administrative bodies for the purposes of applying the due process hearing requirements for administrative adjudication that are described below.)

Under the "enrolled bill rule" U.S. courts simply will not hear challenges to the process by which federal legislation was enacted; as a result there are no constitutional requirements for hearings in connection with the adoption of legislation in the United States-at least at the federal level. This does not mean that there are no hearings held in connection with the consideration of legislation. Rather participation practice is left to political determination, which in practice very often (but not invariably) provides for "legislative"

hearings at which spokesmen for different viewpoints are permitted to testify orally or to written testimony stating and explaining their positions with respect to legislation that is under consideration.

In the U.S. there is essentially no federal law regarding state legislative hearings. So practice concerning whether such hearings should be held and the procedure therefore varies substantially among our 50 states.

V. Distinguishing Administrative Rulemaking and Administrative Adjudication

The first major source of public participation and hearing require-ments in United States law is the Due Process Clauses of the United States Constitution. Generally speaking, however, the Due Process clauses require conducting of some kind of hearing in those proceedings that we classify as adjudication, but not in those procedures we classify as "rulemaking." This distinction applies to federal, state and local government adjudications and rulemakings.

Of course, to apply this rule, one has to be able to distinguish between proceedings that are considered adjudication and those that are considered to be rulemaking.

For purposes of applying the requirements of the Due Process Clauses of the U.S. Constitution, our leading judicial decisions on this subject establish a criterion of numerosity of impact coupled with a criterion of generic effect. That is, under our due process clause, decisions that are generally applicable and whose direct and immediate impact is experienced by a class of similarly-affected people are regarded as "rules or regulations"-and the process for creating them is considered "rulemaking." Our precedents state that public participation or hearing requirements based on the Due Process clauses do not apply to such rulemaking proceedings, whether at the federal, state, or local agency level.

Conversely, for purposes of our due process clauses, decisions that affect only a very few people, and which are individualized rather than generic in application are regarded as adjudication, and often

 (not always) do require hearing opportunities or other kinds of opportunities for public participation.

VI. Due Process Participation Requirements for Administrative Adjudication

The applicability of the due process clauses to federal, state and local adjudication may be summarized as follows:

Threshold requirement # 1: As noted above, due process participation rights/hearing requirements apply only to adjudication rather than rulemaking. Rulemaking and adjudication are distinguished in item V, above.

Threshold requirement #2: In order to claim any procedural right to a hearing or other participation opportunity, the claimant must demonstrate that he or she has a protected life, liberty or property interest that will be affected by the decision in connection with which the hearing is sought.

In addition to the conventional forms of interest in life, in liberty (such as freedom from incarceration), and in traditional property interests, our courts have also recognized protected interests that trigger due process participation/hearing rights whenever statutes or regulations or other binding government pronouncements significantly confine the discretion of the government decision maker as to how he or she must act in response to a given demonstrated set of facts.

One might summarize this by saying that there is a right to a hearing in adjudication when the decision will affect the claimant's interest in such a manner that there is something to have a hearing about. In other words, if the hearing establishes certain particular facts to be true-, there are binding legal consequences for the agency in light of those facts.

In addition, in order for an adjudication affecting a protected interest to trigger application of due process hearing and/or participation rights, the party seeking the hearing must be immediately and directly affected by the underlying decision. It is not

sufficient that the party seeking the hearing will be indirectly affected by the impact on a third party of the agency decision being made.

Once it is settled that there is a due process right to a hearing or an opportunity for public participation of some kind on a particular manner, the question becomes "what kind of a procedure is required?". We usually use the phrase "how much process is due," to describe this part of the analysis. This is a complex body of law, but its main thrust can be relatively easily summarized: parties whose protected interests are directly affected by governmental decisions should be provided with a meaningful opportunity to comment, in writing or orally, that is reasonably calculated to be effective in its timing, and procedure.

In order to determine more precisely how much process is due, a sliding-scale, 3-factor balancing test, established by our Supreme Court roughly a generation ago in Matthews v. Eldridge, is applied. This test, is basically utilitarian in nature, weighing the costs and benefits of additional process in terms of the incremental contribution to increased average accuracy of ultimate decisions that an additional incremental of "process" would yield. The three specific factors that are to be weighed (and some salient observations thereon) are:

1. To what degree would additional opportunities for participation and/or hearings or other procedures improve the reliability/accuracy of the decision-making process?

[a. It may seem surprising, but it is nonetheless true that under U.S. Constitutional law, absent a credible showing that additional procedure will lead to a more accurate assessment of factual matters leading to a more correct decision there is no possibility of success on any claim that due process requires additional procedure for hearings or public participation. If the relevant facts are not in dispute and the only point of contention is a matter of policy judgment, there is no legal right-at least under the U.S. Constitution-to a hearing or other opportunity for public participation in this situation.

b. You will also note that it is frequently quite difficult to collect good information with which to make this judgment, and to objectively assess that information.]

2. How vital-objectively-is the individual interest that will be affected by the agency's decision?

[This, too, is a factor that is difficult objectively to measure and assess.]

What are the costs of providing the additional increment of hearing rights or other participation opportunity that the individual seeks?

[Note that the -relevant costs include both the monetary and other resource costs of providing the hearing or other additional procedure and the opportunity costs to the administration of the program of providing the additional procedure, including both other initiatives that might have to be foregone, and undermining of programmatic objectives that may be caused by the imposition of additional procedural requirements.]

The procedures that may turn out to be mandated when this analysis is applied span a range running from very elaborate trial-like hearings at which the private party has the right to present witnesses, oral testimony and exhibits and undertake cross examination-at one extreme-to a right only to be heard informally through written submissions at the other extreme.

If a private party is disappointed with any agency's decision, and challenges that decision in court in an action for judicial review, the disappointed party may assert the claim that the procedures used by the agency to conduct hearings and other public participation were legally inadequate. The court would use the 3-factor analysis set forth above to independently assess whether adequate participation opportunities and other procedures were provided, and would rule accordingly. Only if the procedures employed by the agency were clearly inadequate under this analysis would the agency be compelled

to set aside its original decision and re-do it with the procedures that the court determined to be necessary.

Obviously, the system described above has an innate inefficiency because no one can be sure until after a challenge to the agency's choice of procedures has been litigated to a conclusion, whether the procedures that the agency used were sufficient. Moreover, if the agency has selected an inadequate level of procedure, the whole procedure will be invalidated and likely started over.

To try to cope with this uncertainty, agencies typically try to find a more certain and reliable guide to the procedures they should follow, including the agency's statutes. As is discussed in the next section of this outline, agencies often will get no greater certainty by looking at the statute, however. Accordingly, agencies often will issue regulations or establish by custom and precedent the procedures that they will follow in typical decision-making contexts.

Agencies may in turn be guided by custom in devising such regulations and practices, but should also be applying to and for themselves the 3-factor analysis described previously, with an eye to ascertaining what level of procedure will ultimately be required.

Note as well, that agencies- generally have some incentive to be risk averse in such settings, prescribing for themselves a level of procedure that they can believe pretty confidently will suffice under the analysis outlined here. On the other hand, agencies cannot generally be too risk averse because of the burdensome cost of extra procedures and hearings that might be required simply to anticipate the most extreme view of the law that conceivably be taken by a court in a subsequent lawsuit.

VII. Statutory Hearing Rights-Specifically for Administrative Adjudications by Agencies of the Federal Government

Federal statutes do not govern the kinds of hearings or participation opportunities that must be provided by administrative agencies at the local or state government level-this matter is instead

governed by state or local law. Thus, to summarize with respect to hearing requirements for state and local government agencies, they are governed by the due process requirements of the United States Constitution (see above Part VI), and also by any state or local laws that require additional procedures; state and local laws may not reduce the level of procedure that is required by the United States Constitution.

By contrast, federal statues often do add procedural requirements to those established by Due Process standards that apply to the work of federal agencies. These federal statutes can be divided into two categories: 1) statutes that are generically applicable to almost all federal administrative agencies, and 2) specific statutes applicable to particular agencies or to specific functions of particular agencies.

The most important of the generically applicable category is the federal Administrative Procedure Act which governs procedures for rulemaking and adjudication by federal agencies and also judicial review of decisions by federal agencies that may be sought by a private party wishing to challenge such a decision. Another example of a generically applicable statute is the National Environmental Policy Act; although it regulates only the decisional process for decisions and projects that may be environmentally sensitive, it applies to the decisions of all federal agencies that have such environmental sensitivity.

The key provisions of the federal Administrative Procedure Act governing agency procedure, and opportunities for participation by interested parties and the public divide agency decisions into rulemaking and adjudication, and further divide each of these into a "formal" subvariation and an "informal" subvariation.

The distinction between rulemaking and adjudicatory proceedings for purposes of the Administrative Procedure Act is quite similar as a practical matter to that established in decisions interpreting our Constitution's Due Process Clauses (see above, Part V). Although the two are not precisely the same, the differences are not important for present purposes.

Formal and informal rulemaking procedures are discussed below in Part VIII. In the balance of this section I comment briefly on statutorily-prescribed procedures for formal and informal adjudication by agencies of our federal government.

Formal adjudication is a set of procedures that pretty closely resembles a trial in a civil lawsuit in an ordinary court in the United States. There is no jury, but there is a presiding judge-called a hearing officer or Administrative Law Judge. The procedure is generally adversarial rather than inquisitorial, at least in most respects. (There are some exceptions to this statement.) Oral testimony that is presented by a party is ordinarily taken, and documentary and other exhibits may be received in evidence. A transcript of the proceeding is usually prepared for the record. The parties may well be allowed to cross examine each other's witnesses. Usually a written opinion is prepared stating the reasoning behind the judgment. You may note that when the formal adjudication procedures are applicable, it is almost inconceivable that the Due Process analysis described above in Part VI would necessitate any additional or more elaborate procedure.

By contrast, the federal Administrative Procedure Act (APA) does not lay out any procedural requirements for informal adjudication. (As indicated below, this is NOT true of informal rulemaking, which is the most common form of rulemaking in federal agency practice in the U.S., and for which procedures are relatively carefully specified in the APA.) Thus when federal agencies are engaged in informal adjudication, the procedural requirements come from three other places: 1) the Due Process requirements for adjudication under the analysis found in Part VI above, 2) specific statutes that apply to the particular agency or the particular regulatory scheme that is being applied, or 3) the agency's own regulations about procedures for adjudication. (As explained above, when formal adjudication is done under the APA there is little room for these other sources of law to add to the procedural requirements. Moreover, as explained below, it is much more unusual for any of these sources of law that supplement the APA to supply additional requirements for federal agency rulemaking.)

The practical effect of this is that in proceedings that we classify as informal adjudication, there is an enormous range and diversity of procedures, ranging form those that fall just a little short of the trial-like formal adjudication, to situations in which a simple oral answer or decision is made by an official in response to an informal oral account of a situation requiring decision. (For instance, if a school principal decides to suspend a public school student based on student misconduct reported by a teacher, after listening to a student's brief oral account of his or her side of the story that is an informal adjudication. So too, is a visit to an office of our Social Security Administration in which inquiry is made orally of a clerk at the counter as to whether the individual is eligible for old age retirement benefits, and the clerk orally indicates that the questioner is ineligible!)

It is hard to give here a good feel for the range and central tendencies of practice in U.S. informal adjudications. It is useful to bear in mind that in many cases, the basic procedural requirement is supplied by the flexible analysis of our Due Process Clause, as summarized earlier: the key question is whether the interested party was provided a functionally meaningful opportunity to make input (written or oral) into a decision affecting his or her substantial interests, at a meaningful place and time.

Plainly, it is quite important for all concerned to determine correctly whether formal or some kind of informal adjudication is to be employed in each particular adjudicatory decision-making context. Fortunately, the APA does give instructions as to when the formal adjudication process it establishes should be used. Moreover, informal adjudication is by law the default option, so that a form of informal adjudication is used whenever formal adjudication is not triggered under the APA. Essentially, the APA trigger for use of formal adjudication states that the formal process should be used only when another statute besides the APA, explicitly so requires, or directs (in words or substance) that the decision by the agency be made "on the record after an opportunity for an agency hearing."

Most adjudications are not covered by the formal adjudication requirement. In such cases, the next inquiry is to look at the requirements of any specifically applicable statute, and then to any agency regulations governing the specific proceeding.

In federal agency adjudication, it is quite common to have such specifically applicable statutes, and it is also quite common to have such supplemental agency regulations governing procedures for adjudication by that agency.

Statutes governing adjudication by a particular federal agency relatively frequently require what we would call a "hybrid" form of adjudicatory procedure-/, e., one that is less elaborate and trial-like than a full formal proceedings, but which is still at least moderately formal-requiring some, but not all of the typical elements of a formal adjudication. (You will note that this is emphatically not the case for rulemaking; as is described below, both formal and hybrid rulemaking are very rarely required by statute in federal agency practice in the U.S.)

In informal adjudications the agency, and the parties would also ask whether the set of procedures prescribed in this fashion by any applicable statute and/or regulations fully meets the requirements of the Due Process analysis set forth above. Again, remember that the irreducible requirement of the Due Process clause, if it is applicable to a given adjudication (see Part VI, above, discussing the first two threshold requirements), is that some a meaningful opportunity for input is required.

A humble point of considerable practical importance in our administrative law: agencies are said to be bound by their own procedural  regulations.   This  means  that  even   if an  agency's regulations promise a more elaborate opportunity for public input than would be required by any applicable statute or by under the Due Process analysis, and an agency fails in material respects to compl) with its own procedural regulations, it is likely to have its decisioi suspended, and to be required to begin the decision-making proces: again.

We now turn to the hearing and participation requirements that are applicable to federal agency rulemaking proceedings, which are substantively quite different than those applicable to adjudications, and which also tend to have somewhat different sources in the law than the requirements applicable to agency adjudication.

VIII. Administrative Rulemaking -Procedures Required in Federal Agency Rulemakings

Most of the key points have been anticipated above, but must be assembled together here to take coherent shape.

First, Due Process Clause based requirements for hearings and public participation simply do not apply to rulemaking proceedings; our Supreme Court has held-consistently now for almost a century!

Because the Due Process requirements for hearings and participation which would, if they were applicable, apply to state and local agency rulemaking proceedings as well as to federal agency rulemaking proceedings in fact do not apply, the requirements for rulemaking that are described below do not apply to state and local government agency rulemaking proceedings. That is, ordinarily federal law has nothing to say about rulemaking procedure used by state and local governments. Accordingly, state and local law will govern hearing and participation requirements applicable to state and local agency administrative rulemaking. Because we have 50 states and thousands of municipalities, there is a considerable range in such practice, and its full dimensions cannot really be even summarized here.

That said, it is generally true that most state and local government practice regarding rulemaking procedure and public participation in agency rulemaking is relatively similar to the federal practice described in what follows. Because due process hearing requirements do not apply to federal agency rulemaking, public and party participation in federal agency rulemaking is governed primarily by statute. The key fact is that most of the applicable requirements and practices come from a single source, the federal Administrative

Procedure Act provisions governing Informal Rulemaking, and from judicial interpretation of those statutory provisions.

Like the adjudication provisions of the APA, the rulemaking provisions divide rulemaking into formal and informal rulemaking. The test for when formal rulemaking should be used is essentially the same as that for formal adjudication: formal rulemaking is done only when some other statute quite explicitly requires it, or requires the decision to be made "on the record after opportunity for agency hearing." As with adjudication, as well, the default option is to use informal rulemaking.

Yet another parallel between the rulemaking and adjudication requirements of the APA is the actual procedures specified for formal rulemaking. These are essentially identical to the trial-like model that the APA prescribes for formal adjudications, described earlier. The only significant difference is that in addition to the hearing requirements themselves which are usually largely identical in formal rulemaking and formal adjudication, formal rulemaking must be prefaced in most cases by publication in the Federal Register of a notice of proposed rulemaking to alert the public to the pendency of a proposal for regulations, and of the foreseeable issues that are likely to be considered in making a final decision, and which invites public participation. In addition, at the conclusion of the rulemaking proceeding a notice and explanation of the outcome and any rule to be instituted must be published in the Federal Register. But the actual hearing/participation opportunities are ordinarily just like those described previously in connection with formal adjudication.

Despite these points of similarity and parallelism, there are also some important differences between the practice in rulemaking and that for adjudication, and the structure of the applicable legal requirements.

First, it is actually extremely rare to find formal rulemaking required (or actually performed.)

Second, the APA does describe in some detail a single mandated approach as to how to carry out an informal rulemaking (which it does not do for informal adjudication).

Third, it is quite rare for a statute to require any hybrid form of rulemaking in between the formal and the informal models prescribed by the APA, where as statutory requirements for hybrid adjudication models are relatively common. Indeed our Supreme Court has ruled that statutes that only ambiguously add to the procedural requirements of informal rulemaking should not be so interpreted.

The net effect of all of this is that the overwhelming bulk of federal agency rulemaking is carried out under the informal rulemaking requirements of the APA, which are prescribed in moderate detail. These provisions of our APA, creating the process sometimes known as "notice and comment" rulemaking, have also been expounded and elaborated to a considerable degree by the more than 50 years of judicial interpretation that have transpired since enactment of the APA.

Long treatises could be, and indeed have been, written about the procedure for informal (notice and comment) rulemaking. Here I can provide only a bare bones summary of the key elements that relate to the rights and opportunities of the public and interested parties to participate in informal rulemaking. The basic requirements of a valid informal rulemaking proceeding are:

Publication of notice in the Federal Register as to the subject matter of a proposal for a regulation (which often takes the form of an actual text of a proposed rule). This must be done long in advance of the effective date that any regulation promulgated would have. While publication of a proposed text is not literally required by the APA, the courts have said that the notice must adequately inform potential commenters of the range of proposals and issues that may be considered. Accordingly, most agencies deem it prudent to publish a proposed text at some point and invite comments. If this is not done at the outset in the initial notice of proposed rulemaking, it may be done, or required by a court if not done voluntarily by the agency, at an intermediate stage of the proceedings.

An invitation, in the published notice, to all interested persons to submit comments in writing on the proposal; these may relate to material factual issues, policy considerations and the proper interpretation of any applicable law

The final rule must also be published in the Federal Register and ordinarily must be accompanied by a summary of the relevant policy issues and concerns that were addressed as part of the process leading to the decision. That summary-known as a preamble-should also respond to material critical comments that were made by persons who submitted comments on the proposed rule, and to alternative policy courses that were recommended as preferable by commenters.

The preamble to the published final rule should enable a reviewing court-in the event that a proceeding for judicial review of the regulation is later filed, to conclude that the agency rationally considered the relevant factors and made a reasonable judgment in going forward with the final regulation as published.

Publication of a final rule ordinarily must come at least 30 days before the rule would become effective.

Note also the following points:

1 There is no standing requirement here; any one who wishes to submit a comment is entitled to do so. (This stands in contrast to formal adjudication where the number of parties is limited, and to adjudication under the due process clause where only persons whose protected interests are most directly affected are likely to have a right to public participation or hearings.)

2.      There is generally no right to present oral testimony or to cross
examine proponents of opposing viewpoints.

3.      While the agency's final decision on the ultimate regulation
issued  need   not  rest  entirely  on  the   record   of the  rulemaking
proceeding, judicial decisions have established the rule that there
ordinarily must be some record support for any factual or policy
matter that was in fact seriously controverted in the comment process.

4.      Nevertheless, if the proper procedures have been followed,
courts are  relatively  deferential  to  an  agency's  ultimate  policy
judgments

5.      Because of the requirement that there be a meaningful oppor­
tunity to comment, when, in the course of the rulemaking process, the
agency takes an unforeseeably different approach than that suggested
by the initial published notice of proposed rulemaking., the agency
may need to undertake another interim round of notice, and provide
another opportunity to comment thereon.

One of the leading controversies of the past 20 years of US administrative law concerns just how close a study a reviewing court ought to make of the agency's policy and factual analysis, including critical comments and alternatives submitted in the rulemaking process and the adequacy of the agency's stated reasons for setting aside those concerns and suggestions. This is known as the controversy over the propriety of what is known as "hard look" judicial review. Our Supreme Court lent some support to hard look judicial review several decades ago but has been less clear about this issue in subsequent cases, seeming to adopt a somewhat middle of the road approach. Note that it appears to make a lot of difference as a practical matter, in conducting judicial review, whether a close hard look or a superficial overview is taken by a reviewing court!

It may be useful for you to know that a single pre-eminent controversy of the past 15 years of US administrative law concerns the degree of deference, if any, that a reviewing court should give to an administrative agency's interpretations of the applicable statutes. (This is known as the Chevron doctrine, after the Chevron decision of our Supreme Court, which has directed that reviewing courts defer fairly heavily to agency interpretations as long as they are not demonstrably contrary to applicable statutory provisions.)

Finally, you may also want to be aware that 20 years ago, another issue that was heatedly contested was the degree to which courts could prescribe additional procedures for rulemaking above and beyond those required by the APA and force agencies to use them where courts believed such additional procedures were necessary to

get reliable and accurate decision-making and policy-making. That question was resolved in favor, of sharply limiting a court's ability to prescribe such extra-statutory procedures.

IX. Agency Choice between Rulemaking and Adjudication

This issue appears to be a collateral one but turns out to have considerable practical importance with respect to public participation opportunities in agency decision-making. Although it might initially appear, based on the way we distinguish between rulemaking and adjudication proceedings in US law, that a given decision would fall into one category or the other, and that the applicable procedures and participation requirements would follow from that classification, that is not necessarily the case.

Indeed, it is not uncommon for an agency to be confronted with an option at least nominally as to whether to make its policy contribution regarding a particular issue in the format of adjudication, or in the format of rulemaking. This option often exists because the agency may be able to approach an issue with the intention of establishing a generic rule applicable to a class of similarly situated parties, or to decide to handle a class of questions case by case, roughly in the manner of a common law court, letting the law emerge gradually as it typically does in a precedential system.

The choice between making generic policy by rulemaking and letting the law emerge gradually by case-by-case evolution has material consequences because the participation rules and opportunities are not the same for rulemaking and adjudication. Moreover, use of either technique is effectively a two-edged sword. Specifically, use of generic rulemaking affords an opportunity to comment to all interested persons, imposing no filters or constraints as to who may participate or comment. On the other hand, use of rulemaking normally will preclude interested parties from commenting further at a later date when the regulation actually has a concrete impact on their rights or liabilities. Yet such parties may not have participated earlier either when the rule was first made because

they did not have a sufficient incentive to do so at the time, or did not recognize the ultimate impact of the regulation.

Although strong arguments have been made by litigants and by many commentators in the legal academy that our courts ought to more stringently oversee the agency's choice to proceed by rulemaking or adjudication, our Supreme Court simply has not accepted this point of view. Instead, our Supreme Court has held that agencies ordinarily have very broad discretion to choose between rulemaking and adjudication proceedings. There are some limits to agency discretion here, but they are generally very broad and rarely does a court find that they have been transgressed. The most important exceptions, which do limit the agency choice between rulemaking and adjudication, is the cases insist that there be a proper match between the choice of lawmaking modal ity-rulemaking or adjudication-and the nature of the law actually made: a generic regulation, or an order intended to resolve only the case before the agency and perhaps to have some precedential effect.