Formal Rulemaking
What does "Formal Rulemaking" mean in law?
A rulemaking procedure required under Sections 556 and 557 of the APA when a statute mandates that rules be made 'on the record after opportunity for an agency hearing.' Formal rulemaking resembles a trial-like proceeding with oral testimony, cross-examination of witnesses, and a decision based on an exclusive record. Because of its extreme procedural costs, courts apply the trigger narrowly: in United States v. Florida East Coast Railway (1973), the Supreme Court held that only statutes using specific 'on the record' language require formal rulemaking. As a result, formal rulemaking is rarely used today, having been largely supplanted by informal notice-and-comment procedures.
Definition
A rulemaking procedure required under Sections 556 and 557 of the APA when a statute mandates that rules be made 'on the record after opportunity for an agency hearing.' Formal rulemaking resembles a trial-like proceeding with oral testimony, cross-examination of witnesses, and a decision based on an exclusive record. Because of its extreme procedural costs, courts apply the trigger narrowly: in United States v. Florida East Coast Railway (1973), the Supreme Court held that only statutes using specific 'on the record' language require formal rulemaking. As a result, formal rulemaking is rarely used today, having been largely supplanted by informal notice-and-comment procedures.
Example
Under the Food, Drug, and Cosmetic Act's 'on the record' requirement, the FDA had to conduct formal rulemaking with trial-type hearings to set standards of identity for peanut butter, a process that famously took over a decade.