Section 554 of the Administrative Procedure Act (APA) requires federal agencies to provide formal, trial-like procedures when conducting a formal adjudication. However, the language of § 554 states that an adjudication is formal when a statute requires the agency to conduct a hearing "on the record." Where a statute requires the agency to conduct a hearing, without the "on the record" requirement, can § 554 still apply? Two approaches have been developed by the courts of appeals to decide this issue. The majority approach has been to perform a de novo analysis of congressional intent to determine whether Congress intended formal adjudication to apply. The D.C. Circuit took a different approach, and gave the agency Chevron deference to interpret whether formal adjudication was required.
This Note argues that the Supreme Court's decision in Mead supercedes both of these approaches, and creates a new test for courts to apply. Mead limited the application of Chevron deference to situations where Congress delegated the authority to an agency to interpret a statute with the force of law. Because Congress did not delegate such authority to any agency to interpret the APA, Chevron deference is not appropriate. However, Skidmore deference, a lesser degree of deference, is appropriate. Therefore, in analyzing whether a hearing requires formal adjudication, courts should first analyze the agency's interpretation under Skidmore. Whether or not that interpretation deserves deference under Skidmore depends on a number of factors. Only if that interpretation does not deserve Skidmore deference should the court engage in a de novo analysis of congressional intent. This new test charts a middle course, in between the de novo analysis of the majority and the Chevron deference approach of the D.C. Circuit.
John F. Stanley,
The "Magic Words" of 554: A New Test for Formal Adjudication under the Administative Procedure Act,
56 Hastings L.J. 1067
Available at: https://repository.uchastings.edu/hastings_law_journal/vol56/iss5/5