explaining that to facilitate judicial review of the agency's action, "[t]he statement should reflect the factual, legal, and policy foundations for the action taken"
How later courts described this case
- explaining that to facilitate judicial review of the agency's action, "[t]he statement should reflect the factual, legal, and policy foundations for the action taken"
Written by the judges who cited it.
The opinion
NEWMAN, J.
I dissent. I believe that experienced observers of how government agencies work will be astonished to learn that, when a statute requires a statement “as to the basis” on which rules are predicated, administrative rulemaking in California is now to be encumbered as follows: “The statement should reflect the factual, legal, and policy foundations for the action taken. The statement of basis must show that the order adopted is reasonably supported by the material gathered by or presented to the commission—through its own investigations, the wage board proceedings, and the public hearings—and is reasonably related to the purposes of the enabling statute. The statement of basis is not the equivalent of the findings of fact that a court may be required to make. A statement of basis is an explanation of how and why the commission did what it did. If terms of the order turn on factual issues, the statement must demonstrate reasonable support in the administrative record for the factual determinations. If, on the other hand, terms of the order turn on policy choices, an assessment of risks or alternatives, or predictions of economic or social consequences, the statement of basis must show how the commission resolved conflicting interests and how that resolution led to the order chosen. If an order differentiates among classes of industries, *217 employers, or employees, the statement of basis must show that the distinctions drawn are reasonably supported by the administrative record and are reasonably related to the purposes of the enabling statute.” (Maj. opn., ante, p. 213, fns. omitted.)
That much-too-detailed set of instructions to agency rulemakers should be contrasted with this introductory paragraph in § 6.01-2 of Davis, Administrative Law of the Seventies (1976): “The [Federal] Administrative Procedure Act provides in § 553 that the agency, after receiving written comments, ‘shall incorporate in the rules adopted a concise general statement of their basis and purposes.’ The APA does not require a statement of findings of fact. See Att’y Gen. Manual on the APA 32 (1947): ‘Except as required by statutes providing for “formal” rule making procedure, findings of fact and conclusions of law are not necessary. Nor is there required an elaborate analysis of the rules or of the considerations upon which the rules were issued. Rather, the statement is intended to advise the public of the general basis and purpose of the rules.’ ” 1
Unlike the federal APA, the California statute that governs here does not require a “statement of . . . basis and purpose.” It does not even require a “statement of basis” (though that phrase appears more than 25 times in the majority opinion here). Our Legislature’s sole command is that there be a “statement as to the basis” (italics added).
By no means is the To-Whom-It-May-Concem provision of Order 5-76 (maj. opn., ante, p. 210, fn. 19) a model or prototype statement. It hardly merits inclusion in any formbook. In my view, though, its arguable defects have not caused prejudicial error. (Cf. Gov. Code, § 11440 (“any regulation . . . may be declared to be invalid for a substantial failure to comply”). (Italics added.) The following observations by Kenneth Culp Davis seem to me to evidence more insight as to overall fairness in governing than does the majority (“By the Court”) opinion here: “[A] statement that ‘findings’ and ‘reasons’ are required for informal rulemaking would be inaccurate, for such a statement would be an oversimplification. The focus of discerning judges is not on such words as ‘findings’ and ‘reasons’ but is on the total picture in each case of the reasonableness of the support for the rules in the rulemaking record and the adequacy of *218 the agency’s explanation for its determination. In most cases in which the question has been important, the adequacy of the explanation is mixed in with other facets of the challenge of the rules, so that a focus on the explanation, without taking into account the interrelated complexities, is somewhat artificiaV’ (1 Davis, Administrative Law Treatise (2d ed. 1978) p. 499; italics added.)
Professor Davis’ comment on the omission of the requirement of “a statement of findings” pertains to footnote 21 on page 210 and footnote 35 on page 213 of the majority opinion, ante. What happened in Sacramento, I suggest, is that an initial call for “written findings” soon gave way to approval of words (“statement as to the basis”) for which legislative analogies are easily found in the preambular paragraphs that often introduce statutes.