|Stephenson, Matthew C.
|Rules are rules and orders are orders, and never the twain shall meet. Generations of scholars and practitioners were taught back in law school that the Administrative Procedure Act (APA) divides the universe of agency action into two exclusive and exhaustive categories: “rulemaking,” which is used for promulgating “rules,” and “adjudication,” which is used for issuing “orders.” Each of those modes of agency action has its formal and informal versions, and some statutes mandate “hybrid” procedures with an intermediate level of formality. But the starting point for analyzing a given agency action is to decide whether that action falls into the “rule” box or the “order” box, which are separate and distinct. That is what then-Professor, now-Justice Elena Kagan taught me back when I took her Administrative Law class as a 2L, and it’s what I’ve taught my students for the last fifteen years. But it’s not quite right. “Rules” and “orders” are not, in fact, completely separate and non-overlapping categories. Sometimes an administrative action that is properly classified as an order contains within it—usually in the portion explaining the order’s legal basis—a statement that qualifies as a rule and ought to be treated as such. The fact that such a rule is embedded within an order does not make it any less of a rule. And that means that the process for formulating an embedded rule counts (or ought to count) as a “rulemaking” under the APA.