## Facts

- The Federal Communications Commission (FCC) may impose monetary forfeitures for Communications Act violations under 47 U.S.C. § 503(b), historically setting amounts case-by-case within statutory maximums.
- In 1991, the FCC adopted forfeiture “guidelines” assigning standard base forfeiture amounts and ranges by category of violation.
- The guidelines treated common carriers as a separate class subject to higher base forfeitures than other licensees for comparable violations.
- The FCC issued the guidelines without notice-and-comment rulemaking, characterizing them as a nonbinding policy statement.
- The United States Telephone Association (USTA), representing common carriers, sought agency reconsideration, arguing the guidelines were a substantive rule requiring APA procedures.
- After the FCC denied reconsideration, USTA petitioned the D.C. Circuit for review.

## Issues

1. Whether the FCC’s forfeiture guidelines were a “general statement of policy” exempt from APA notice-and-comment under 5 U.S.C. § 553.
2. Whether, despite being labeled “guidelines,” the forfeiture schedule created binding norms that made it a legislative rule requiring notice-and-comment rulemaking.
3. Whether the FCC’s ability to depart from the schedule in some cases prevented the guidelines from having binding effect.

## Decision

- The court granted USTA’s petition for review.
- The court held the forfeiture guidelines were a substantive (legislative) rule, not a policy statement.
- Because the FCC adopted the guidelines without APA notice-and-comment procedures, the court set aside (vacated) the guidelines and remanded to the FCC.

## Legal Principles

- Whether an agency action is a policy statement or a legislative rule turns on its practical effect, not the agency’s label.
- A rule is legislative when it establishes binding norms or materially constrains agency discretion by creating presumptive outcomes that regulated parties can reasonably treat as controlling in ordinary cases.
- The existence of limited discretion to deviate, or occasional departures in practice, does not by itself convert an otherwise binding schedule into a nonbinding policy statement.
- When an agency adopts a legislative rule, it must use APA notice-and-comment procedures unless an exception applies; failure to do so renders the rule unlawful.

## Conclusion

The D.C. Circuit concluded that the FCC’s standardized forfeiture schedule effectively bound enforcement outcomes and altered parties’ regulatory expectations, making it a legislative rule that required APA notice-and-comment; the court therefore vacated the guidelines and remanded for further proceedings.


United States Tel. Ass’n v. F.C.C., 28 F.3d 1232 (D.C. Cir. 1994)