3.7 Interpreting regulations and administrative rules

Sources of Administrative Law

Administrative law governs how government agencies create rules, enforce them, and resolve disputes. These agencies touch nearly every area of daily life, from food safety to environmental protection, so knowing where their authority comes from is foundational to interpreting any regulation.

The main sources include federal and state regulations, executive orders, and agency guidance documents. Each carries different legal weight, and understanding those differences matters when you're constructing a legal argument.

Federal vs. State Regulations

Federal regulations are created by federal agencies and apply nationwide. State regulations come from state agencies and apply only within that state's borders.

• Federal regulations often set minimum standards that states must meet, but states can impose stricter requirements on top of them
• When federal and state regulations conflict, the preemption doctrine determines which one controls (more on this below)
• Federal examples: Clean Air Act emissions standards set by the EPA, FDA food safety rules
• State examples: California's vehicle emission standards (stricter than federal), state-specific professional licensing requirements for attorneys or physicians

Executive Orders and Directives

Executive orders are issued by the President (or by governors at the state level) to direct the actions of executive branch agencies. They carry the force of law but operate within limits.

• They can be overturned by a subsequent administration, which means their durability is inherently political
• They must be consistent with existing statutes and constitutional authority
• Common uses include setting policy priorities, reorganizing agencies, or responding to emergencies
• Examples: Executive Order 13771 (requiring agencies to cut two regulations for every new one adopted), Executive Order 14008 (directing federal action on climate change)

Agency Guidance Documents

Guidance documents are non-binding materials that agencies publish to explain how they interpret and plan to enforce their regulations. They include policy statements, interpretive rules, staff manuals, and advisory opinions.

• They are not legally binding on regulated parties or courts
• Courts often give them some weight, depending on how persuasive and well-reasoned they are
• They're useful in practice because they signal how an agency is likely to act
• Examples: FDA guidance on nutrition labeling requirements, IRS revenue rulings explaining tax code provisions

Regulatory Interpretation Principles

When a regulation's meaning is disputed, courts and practitioners rely on a set of established principles to figure out what the language actually requires. These principles form the analytical framework you'll use in legal writing whenever a regulatory provision is at issue.

Plain Meaning Rule

Courts start here. If the regulatory language is clear and unambiguous, you apply its ordinary meaning and stop.

• Words are given their common, dictionary definitions unless the regulation defines them differently
• The assumption is that drafters meant what they wrote
• Courts won't read in additional meaning or intent when the text is clear
• Classic application: "shall" is interpreted as mandatory, "may" as permissive

Legislative Intent Analysis

When plain meaning is unclear or would produce absurd results, courts look beyond the text to figure out what the drafters were trying to accomplish.

• Sources include legislative history, committee reports, preambles to regulations, and agency statements during rulemaking
• This approach balances the text against broader policy objectives
• For example, a court might review the Congressional Record to find floor debates explaining why a particular regulation was adopted

The tension between plain meaning and legislative intent mirrors the textualism vs. purposivism debate you've likely encountered in statutory interpretation more broadly.

Deference to Agency Interpretations

Courts often defer to how an agency interprets the rules it administers, on the theory that agencies have specialized expertise. But the level of deference varies:

• Auer deference (also called Seminole Rock deference): Courts defer to an agency's interpretation of its own ambiguous regulation, unless that interpretation is plainly erroneous or inconsistent with the regulation
• Skidmore deference: Courts give weight to an agency's interpretation based on its persuasiveness, the thoroughness of its reasoning, consistency with earlier positions, and other factors that give it "power to persuade"

Auer gives stronger deference than Skidmore. Which standard applies depends on the formality of the interpretation and what exactly is being interpreted (the agency's own regulation vs. a statute).

Chevron Deference Doctrine

Chevron U.S.A., Inc. v. Natural Resources Defense Council (1984) established the most important framework for how courts review agency interpretations of the statutes they administer. Note: In Loper Bright Enterprises v. Raimondo (2024), the Supreme Court overruled Chevron, holding that courts must exercise independent judgment when interpreting statutes rather than deferring to agency readings. Understanding the Chevron framework remains important because decades of case law relied on it, and many of its concepts still shape administrative law arguments.

Two-Step Analysis Framework

The classic Chevron test works in two steps:

1. Step One: Has Congress directly spoken to the precise question at issue? If the statute's meaning is clear, that's the end of the inquiry. Both the court and the agency must follow Congress's unambiguous intent.
2. Step Two: If the statute is silent or ambiguous on the point, is the agency's interpretation a reasonable (permissible) construction? If so, the court defers, even if the court would have reached a different interpretation on its own.

A preliminary inquiry sometimes called "Chevron Step Zero" asks whether the Chevron framework even applies. It generally required that the agency acted with the force of law (e.g., through formal rulemaking or adjudication), not just informal guidance.

Limitations and Exceptions

Even before Chevron was overruled, courts recognized significant limits:

• Chevron did not apply to agency interpretations of criminal statutes (the rule of lenity applies instead)
• The Major Questions Doctrine holds that agencies cannot claim broad regulatory authority over issues of vast economic or political significance without clear congressional authorization (West Virginia v. EPA, 2022)
• Agencies had to provide reasoned explanations when changing longstanding interpretations
• Inconsistent agency positions over time could reduce deference

Recent Judicial Developments

The trajectory of Chevron deference had been narrowing for years before Loper Bright:

• Several justices openly questioned whether Chevron violated separation of powers by shifting interpretive authority from courts to agencies
• King v. Burwell (2015) declined to apply Chevron to a major question about the Affordable Care Act, reasoning that the issue was too significant to presume Congress delegated it to an agency
• The growing emphasis on textualism across the federal judiciary had already reduced reliance on Chevron in practice
• Post-Loper Bright, courts must independently determine the best reading of a statute, though agency expertise and reasoning may still inform that analysis

Canons of Regulatory Construction

Canons of construction are interpretive tools that help courts and lawyers resolve ambiguities in regulatory language. They fall into three main categories, and you should be comfortable identifying and applying them in legal writing.

Textual Canons

These focus on the words and structure of the regulation itself:

• Noscitur a sociis ("a word is known by the company it keeps"): Ambiguous terms are interpreted in light of the surrounding words
• Ejusdem generis ("of the same kind"): When a general term follows a list of specific items, the general term is limited to things of the same type as the listed items
• Expressio unius est exclusio alterius ("the expression of one thing excludes others"): If a regulation lists specific items, unlisted items are presumed to be excluded

These come up frequently when you're interpreting lists, defined terms, or the scope of general provisions in regulations.

Substantive Canons

These are based on policy presumptions about what the drafters likely intended:

• Rule against absurd results: Courts avoid interpretations that would lead to outcomes clearly not intended by the drafters
• Constitutional avoidance: If two interpretations are plausible, courts prefer the one that avoids raising constitutional problems
• Presumption against retroactivity: Regulations are presumed to apply prospectively unless the text clearly states otherwise

Linguistic Canons

These deal with grammar and syntax:

• Last antecedent rule: A modifying phrase applies only to the immediately preceding term, not to all terms in a series (though context can override this)
• Singular/plural: Singular terms include the plural and vice versa, unless context indicates otherwise
• "Shall" vs. "may": "Shall" creates a mandatory obligation; "may" grants discretion

Linguistic canons are especially useful when you're parsing dense regulatory language and need to determine exactly which words a qualifying phrase modifies.

Administrative Procedure Act

The Administrative Procedure Act (APA), enacted in 1946, is the foundational statute governing how federal agencies make rules, conduct adjudications, and face judicial review. Nearly every challenge to federal agency action runs through the APA.

Rulemaking Procedures

The APA establishes two main rulemaking tracks:

Informal (Notice-and-Comment) Rulemaking is by far the most common:

1. The agency publishes a Notice of Proposed Rulemaking (NPRM) in the Federal Register
2. The public gets an opportunity to submit written comments
3. The agency reviews comments and publishes a final rule with a statement of basis and purpose that addresses major comments

Formal Rulemaking involves trial-like procedures with hearings, testimony, and cross-examination. It's rare and only required when a statute specifically calls for rules to be made "on the record after opportunity for an agency hearing."

Exceptions to notice-and-comment requirements include the good cause exception (for emergencies), interpretive rules, and general policy statements.

Judicial Review Standards

The APA provides several standards of review, and which one applies depends on the type of agency action:

• Arbitrary and capricious (APA § 706(2)(A)): The default standard for informal rulemaking and informal adjudication. Courts ask whether the agency examined the relevant data, considered important aspects of the problem, and articulated a rational connection between the facts and its decision.
• Substantial evidence: Applies to formal rulemaking and formal adjudication. This is a somewhat more demanding standard that asks whether a reasonable mind could accept the evidence as adequate to support the conclusion.
• De novo review: Courts review certain questions of law, statutory interpretation, and constitutional issues without deference to the agency.

Agency Adjudication Processes

Agencies also resolve individual disputes through adjudication:

• Formal adjudication involves trial-like proceedings before an Administrative Law Judge (ALJ), with testimony, evidence, and cross-examination
• Informal adjudication covers a broad range of agency decision-making that doesn't require formal hearing procedures
• Due process requirements scale with the stakes: the more significant the private interest affected, the more procedural protections are required (Mathews v. Eldridge balancing test)
• Agencies must provide reasoned explanations for their decisions in both contexts
• Examples: Social Security disability hearings (formal), FCC licensing decisions

Regulatory Research Methods

Knowing where to find regulations and how to verify they're current is a practical skill you'll use constantly. The two most important federal sources are the Federal Register and the Code of Federal Regulations, and understanding the difference between them is essential.

Federal Register vs. CFR

When researching a regulation, you'll typically start with the CFR for the current rule, then go to the Federal Register if you need the rulemaking history, the agency's reasoning, or the public comments.

State Administrative Codes

Each state has its own administrative code compiling regulations issued by state agencies.

• Organization varies by state but often mirrors the CFR's subject-matter structure
• Update schedules differ significantly from state to state
• Some states include agency guidance or interpretive materials alongside the regulations
• Examples: California Code of Regulations (CCR), New York Codes, Rules and Regulations (NYCRR)

Online Regulatory Databases

• Free government sources: The e-CFR (electronic Code of Federal Regulations) provides an unofficial but frequently updated version of federal regulations; Regulations.gov lets you track proposed rules and submit comments
• Commercial databases: Westlaw and LexisNexis offer search tools, cross-referencing, annotations, and historical versions of regulations
• Many databases offer alert features that notify you when regulations in your area of practice are proposed or amended

Regulatory Preemption

Preemption determines when federal law displaces state law. It comes from the Supremacy Clause of the Constitution (Article VI), and preemption analysis is a frequent issue in cases where federal and state regulations overlap.

Express vs. Implied Preemption

• Express preemption occurs when a federal statute explicitly states that it overrides state law. The analysis focuses on interpreting the scope of the preemption clause. Example: ERISA expressly preempts state laws that "relate to" employee benefit plans.
• Implied preemption arises from the structure and purpose of federal law, even without explicit preemptive language. Courts infer congressional intent to displace state law from the overall regulatory scheme. Example: federal banking regulations may impliedly preempt certain state consumer protection laws.

Courts generally require clear evidence of congressional intent before finding preemption, reflecting a presumption against displacing state authority.

Field Preemption

Field preemption is a type of implied preemption. It occurs when federal regulation of an area is so comprehensive that it leaves no room for state regulation, even if there's no direct conflict.

• Courts look at whether Congress intended to "occupy the entire field"
• The pervasiveness of the federal scheme is a key indicator
• Classic examples: federal regulation of nuclear safety (Pacific Gas & Electric v. State Energy Resources Conservation & Development Commission), immigration law

Conflict Preemption

Conflict preemption arises in two situations:

1. Impossibility: It's physically impossible to comply with both the federal and state requirements simultaneously
2. Obstacle: State law stands as an obstacle to accomplishing the full purposes and objectives of federal law

Both require careful analysis of the regulatory text and the broader statutory goals. A well-known example is the tension between state tort claims and federal medical device regulations (Riegel v. Medtronic).

Challenging Agency Actions

When a party believes an agency has acted unlawfully, several procedural requirements must be met before a court will hear the case. These threshold issues are just as important as the merits.

Standing Requirements

To challenge an agency action in federal court, a plaintiff must establish Article III standing:

1. Injury in fact: A concrete, particularized, actual or imminent harm
2. Causation: The injury must be fairly traceable to the challenged agency action
3. Redressability: A favorable court decision must be likely to remedy the injury

Beyond constitutional standing, the zone of interests test requires that the plaintiff's interests fall within the zone of interests protected by the statute at issue. Organizations can also assert associational standing to sue on behalf of their members if at least one member has standing, the interests at stake are germane to the organization's purpose, and the claim doesn't require individual member participation.

Exhaustion of Remedies

Courts generally require plaintiffs to pursue all available administrative remedies before seeking judicial review. This means going through the agency's own appeals process first.

• The doctrine promotes agency autonomy and judicial efficiency
• Exceptions exist for futility (when pursuing the remedy would be pointless), bias in the administrative process, or when the available remedies are inadequate
• Courts may also require issue exhaustion, meaning the specific legal argument must have been raised before the agency

Example: Before filing a federal employment discrimination lawsuit, a plaintiff must first file a charge with the EEOC and receive a right-to-sue letter.

Scope of Judicial Review

Once a case reaches court, the APA limits the scope of review:

• Review is generally confined to the administrative record that was before the agency when it made its decision
• Courts typically cannot consider new evidence that wasn't presented to the agency
• The core question is whether the agency action was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law
• Under the hard look doctrine, courts ensure the agency genuinely engaged with the relevant data and competing arguments, not just that it reached a defensible conclusion

Regulatory Compliance Strategies

This section shifts from interpretation to practice. Regulatory compliance is about building systems that keep an organization within the bounds of applicable regulations, and lawyers play a central role in designing and maintaining those systems.

Risk Assessment Techniques

• Systematically identify which regulations apply to the organization's operations
• Evaluate both the likelihood and potential impact of violations (financial penalties, reputational harm, operational disruption)
• Prioritize compliance efforts based on the results, focusing resources on the highest-risk areas
• Examples: conducting environmental impact assessments for manufacturing operations, evaluating data privacy risks under GDPR or state privacy laws

Compliance Audits

A compliance audit is a structured internal review that measures current practices against regulatory requirements.

1. Review existing policies, procedures, and practices
2. Compare them against current regulatory requirements
3. Identify gaps or areas of non-compliance
4. Document findings and develop corrective action plans with timelines

Examples: HIPAA compliance audits in healthcare organizations, financial reporting audits under the Sarbanes-Oxley Act.

Regulatory Change Management

Regulations change frequently, and organizations need systems to keep up:

• Establish monitoring processes to track relevant proposed and final rules (using tools like Regulations.gov or commercial alert services)
• Assess the operational impact of new or modified regulations
• Develop implementation plans with clear timelines and responsibilities
• Train affected employees on new requirements

Example: When the FDA updates food labeling requirements, a food manufacturer needs to identify which products are affected, redesign labels, and ensure compliance before the effective date.

Ethical Considerations

Administrative law practice raises distinct ethical issues, particularly around the lawyer's role in influencing regulatory outcomes and managing competing obligations.

Regulatory Lobbying

Lawyers who engage in lobbying on behalf of clients must navigate both legal and ethical constraints:

• Disclosure requirements for lobbying activities vary by jurisdiction and are governed by statutes like the federal Lobbying Disclosure Act
• Conflicts of interest can arise when lobbying efforts benefit one client but harm another
• Lawyers must be transparent about whether they're acting as an advocate for a client or providing neutral legal analysis
• Improper influence on agency officials can result in disciplinary action

Conflicts of Interest

Conflicts in regulatory practice can be subtle and require careful attention:

• Conflicts may arise between current clients (e.g., representing two companies in the same agency proceeding with divergent interests)
• Former-client conflicts are common when a lawyer moves between government service and private practice (the "revolving door")
• Ethical screens (also called "Chinese walls") can sometimes manage conflicts within a firm
• Informed, written consent from affected clients is required for certain conflicts under the Model Rules of Professional Conduct

Whistleblower Protections

Lawyers advising organizations need to understand the legal framework protecting employees who report regulatory violations:

• Federal statutes like the Sarbanes-Oxley Act and the False Claims Act (qui tam provisions) provide protections and, in some cases, financial incentives for whistleblowers
• Lawyers advising organizations should recommend implementing clear internal reporting channels
• Balancing client confidentiality with whistleblower rights requires careful ethical judgment
• Lawyers representing whistleblowers face their own set of ethical obligations, including ensuring the client understands the risks and protections involved