Rulemaking is the process by which administrative agencies use their delegated power to make rules and regulations.  When laws created by legislature tend to be ambiguous, legislatures grant power to executive agencies to make rules on matter to clarify the ambiguity.  The expertise and experience of administrative agencies help in creating the rules.

Rule making procedures as directed by the Administrative Procedure Act should be followed by administrative agencies while making rules.  Rules not formed according to the prescribed procedures will be invalid.

 Administrative agencies can make rules only when rulemaking power is delegated to them by statute or constitution.  If an agency exceeds the power conferred by a legislature in making a rule, the rule made will be considered void.  The fact that regulations made by an agency are reasonable does not prevent them from being deemed invalid.

Eforcement of a rule can be prevented if an agency exceeded its rulemaking powers.  Otherwise, any rule or regulation created by an agency which is authorized by law can be enforced.[i]

A rule made by an administrative agency will be considered invalid if the statute that is the parent to the rule is unconstitutional.

An administrative agency can be considered to exceed power conferred to it by the legislature when a rule created by the agency is against the legislative intent of the law.  When the rule made conflicts with the statute made by the legislature, the rule will not be binding.  The purpose of legislative delegation to administrative agencies is to create rules that are consistent with the statute made by the legislature.  Therefore, any rule made by an administrative agency cannot be upheld if it conflicts with the language of the parent statute.

An agency also has no power to negate the provisions of a statute.  Rules made by the agency should not be contradicting the law created by the legislature.  If a rule is conflicting with a statute, the statute will prevail.  The rule will be set as void to the extend it is in conflict with the enabling statute.[ii]

Generally, when considering the validity of an administrative agency’s rule courts primarily enquire into the reasonableness of the parent statute.[iii] Some courts hold that administrative rules that are arbitrary, capricious, and unreasonable are invalid.[iv] However, some courts hold that administrative regulations that are based on the legislative intent are valid even if they are unreasonable and arbitrary.

An administrative rule is not considered arbitrary and capricious when it is judiciously related to the parent act and to its purpose.  Thus, an agency regulation is valid if it is reasonably related to an enabling act.  A rule is reasonably related to an act when the rule prevents evasion from the provisions of the enabling statute.  The rule should also not be inconsistent with the statute.

Federal courts have expressed certain factors which make a rule arbitrary and capricious, including:

• If a rule fails to consider an important angle of a matter
• If explanation provided for creating a certain rule is against the evidence before an administrative agency.
• If the explanation provided is unreasonable and cannot be a result of an input of agency expertise.
• If the agency created the rule not based on the legislature’s intent.

An agency’s interpretative rule can be upheld.  Interpretative rules are rules issued by an administrative agency to clarify or explain existing laws.  However, interpretative rules also should not be arbitrary, capricious, or unreasonable.

[i] S. Camden Citizens in Action v. N.J. Dep’t of Envtl. Prot., 145 F. Supp. 2d 505 (D.N.J. 2001)

[ii] Texas v. United States, 497 F.3d 491 (5th Cir. Tex. 2007)

[iii] Debeck v. Department of Natural Resources, 172 Wis. 2d 382 (Wis. Ct. App. 1992)

[iv] Hospital Asso. v. Bachman, 40 Pa. Commw. 262 (Pa. Commw. Ct. 1979)