How the Supreme Court Derailed Formal Rulemaking

Abstract

Based on archival research, this Essay explores the untold story of how the Supreme Court in the 1970s largely ended “formal” trial-like rulemaking by federal agencies in two railway cases. In the first, nearly forgotten decision, United States v. Allegheny-Ludlum Steel Corp., the Court held sua sponte that an agency was not required to use formal rulemaking, despite its significant historical provenance. That unpersuasive decision all but decided the second, better-known decision, United States v. Florida East Coast Railway, the following term. In response to both decisions, agencies abandoned formal rulemaking — one of only four broad categories of agency action — and policymakers and scholars largely ceased debating its virtues. Findings from the Justices’ personal papers — including that the Court identified the issue only after oral argument and appeared deeply uninterested in Allegheny-Ludlum — should revive the long-muted debate among scholars and Congress over formal rulemaking’s utility and the continued vitality of the Court’s railway decisions.

Keywords: administrative law, rulemaking, Allegheny-Ludlum, Florida East Coast, Supreme Court