United States v. Florida East Coast Railway
Citation: 410 U.S. 224 (1973)
Facts
The Interstate Commerce Commission promulgated rules establishing incentive per diem rates for railroad cars. The railroads argued that the ICC’s enabling statute — which required rules to be made “on hearing” — triggered the APA’s formal rulemaking procedures (§§ 556–557), which require trial-like hearings.
Issue
Does an enabling statute’s requirement that rules be made “on hearing” automatically trigger APA formal rulemaking requirements?
Holding
No. An enabling statute’s requirement of “hearing” before rulemaking does not automatically require the full formal rulemaking procedures of APA §§ 556–557. Formal rulemaking is required only when the statute specifies that the rule must be made “on the record after opportunity for an agency hearing.”
Rule
Formal rulemaking trigger: APA formal rulemaking (trial-like hearing procedures under §§ 556–557) is required only when the enabling statute specifies that rules must be made “on the record” after a hearing. A bare statutory requirement of “hearing” is insufficient — it triggers only informal notice-and-comment rulemaking under § 553.
Significance
- Dramatically narrowed the scope of formal rulemaking; virtually eliminated it by requiring the specific “on the record” trigger
- Meant that most federal rulemaking now occurs through informal notice-and-comment (§ 553) rather than trial-like formal procedures
- Formal rulemaking survives primarily in a few specific contexts (formal adjudication remains more common)
- Combined with Vermont Yankee Nuclear Power Corp. v. NRDC (courts cannot require more than notice-and-comment), effectively sets the floor and ceiling of rulemaking procedure