Metropolitan School District v. Davila
969 F.2d 485 (1992)
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Rule of Law:
An agency's pronouncement is an interpretive rule, exempt from the Administrative Procedure Act's notice-and-comment requirements, if it explains the agency's construction of an existing statute rather than creating new law, rights, or duties. The rule's classification does not depend on its novelty, its substantial impact on regulated parties, or a court's agreement with its substantive interpretation.
Facts:
- The Individuals with Disabilities Education Act (IDEA-B) provides federal funds to states for the education of disabled children, administered by the Office of Special Education and Rehabilitative Services (OSERS) within the Department of Education.
- Frank E. New, the Director of Special Education for the Ohio Department of Education, inquired with OSERS about a state's obligations under IDEA-B.
- Specifically, New asked whether IDEA-B requires states to provide educational services to disabled children who have been expelled or suspended for conduct unrelated to their disability.
- In response, Robert Davila, an Assistant Secretary at OSERS, issued a letter stating that OSERS interpreted the IDEA-B to require the continuation of educational services in such circumstances.
- This interpretation was communicated solely through the letter and was not published for public notice and comment in the Federal Register or the Code of Federal Regulations.
- The Metropolitan School District of Wayne Township and other school districts asserted that this interpretation would place a large financial burden on them.
Procedural Posture:
- The Metropolitan School District of Wayne Township sued Robert Davila, on behalf of the Department of Education, in the U.S. District Court for the Southern District of Indiana.
- The plaintiff School District alleged that the agency's interpretation was a legislative rule promulgated without the required APA notice-and-comment procedures.
- Both parties filed motions for summary judgment.
- The district court granted summary judgment for the School District, finding the agency's letter was a legislative rule and was therefore invalid.
- Davila, the defendant-appellant, appealed the district court's judgment to the U.S. Court of Appeals for the Seventh Circuit.
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Issue:
Does a letter from a federal agency, which interprets the Individuals with Disabilities Education Act to require states to provide educational services to disabled students who are expelled for reasons unrelated to their disability, constitute a legislative rule subject to the notice-and-comment requirements of the Administrative Procedure Act?
Opinions:
Majority - Bauer, Chief Judge
No. The letter from OSERS is an interpretive rule exempt from the notice-and-comment requirements of the Administrative Procedure Act because it merely states the agency's interpretation of an existing statute. The core distinction between a legislative and interpretive rule is whether the agency is creating new law or simply explaining what it believes an existing statute means. Here, OSERS based its conclusion on the classic tools of statutory construction: the language of the IDEA-B, its legislative history, and relevant case law like Honig v. Doe. The court rejected the school district's arguments that the rule was legislative because it was new, had a substantial impact, or was mandatory. The court clarified that novelty is not determinative, as an agency may address an issue for the first time through an interpretive rule. Likewise, the substantial impact of a rule does not convert it from interpretive to legislative. Finally, while the interpretation is binding on regulated parties as a statement of the agency's enforcement position, it does not have the force and effect of law that binds courts, which is the hallmark of a legislative rule. The court also held that a reviewing court's disagreement with the substance of an agency's interpretation does not render that interpretation legislative.
Analysis:
This case provides a clear framework for distinguishing between legislative and interpretive rules, a critical concept in administrative law. The decision reinforces agency flexibility, allowing agencies to provide guidance and clarify their interpretation of statutes without undergoing the formal notice-and-comment rulemaking process. By rejecting the 'substantial impact' test and the idea that novelty automatically triggers APA requirements, the court prioritized the source of the rule's authority (the underlying statute) over its practical effects. This precedent strengthens an agency's ability to respond to new questions and adapt its enforcement posture efficiently, though it may limit the public's ability to participate in decisions that have significant real-world consequences.
