that it may suffer financially, if not found to be eligible to participate in the GSLP, has little merit.
The final, and perhaps the most important issue before the Court, is whether the defendants can impose the standards set out in the proposed rule without having promulgated the rule. Plaintiff argues they cannot and must therefore rely upon previous standards. Defendants contend that this is a situation where they can proceed on a case by case basis.
It is important to note that defendants contend that they have no set rule or regulation in cases involving foreign medical schools and that, because of the small number of requests received in past years, they have considered such requests on an ad hoc basis. See 44 Fed.Reg. 23888. It is only because of the increase in requests of this nature that they have now determined that there is a need for a regulation. Id.
Normally, agencies which seek to promulgate new rules are required to give notice by publishing in the Federal Register the date, time and place for hearing on the proposed rule, the reference to the legal authority under which the rule is proposed and the terms or substance of the proposed rule or the description of the subject and issue involved. 5 U.S.C. § 553(b). The above requirements "were designed to assure fairness and mature consideration of rules of general application" (citation omitted). NLRB v. Wyman-Gordon Co., 394 U.S. 759, 764, 89 S. Ct. 1426, 1428, 22 L. Ed. 2d 709 (1969).
There are occasions when notice and hearing are not required, those being when the agency is considering interpretive rules, general statements of policy, or rules of agency organization, procedure or practice or when an agency "for good cause" finds "that notice and public procedure thereon are impractical, unnecessary, or contrary to the public interest". 5 U.S.C. § 553(b)(A) and (B).
The defendants here did not choose to proceed under 5 U.S.C. § 553(b)(B) (notice and public procedure impractical, unnecessary or contrary to the public interest) presumably because they did not seek to change, modify or amend the rule but were instead, considering a new rule. There was no old rule other than the ad hoc determinations respecting each applicant. Nor do the defendants seriously argue that no notice was required on the grounds that the proposed rule was but an interpretive rule. See 5 U.S.C. § 553(b)(A). That the defendants did not consider it an interpretive rule thus not requiring notice, absent when notice is required by statute, is revealed by the fact that defendants did publish a NPRM soliciting comments. See 44 Fed.Reg. 23888. The question then is whether, pending the rule-making process, the defendants can continue to proceed on an ad hoc basis.
The Court in Securities and Exchange Commission v. Chenery Corp., 332 U.S. 194, 201-202, 67 S. Ct. 1575, 1579-1580, 91 L. Ed. 1995 (1947), rehearing denied, 332 U.S. 783, 68 S. Ct. 26, 92 L. Ed. 367 (Chenery II )
held that even when an agency was dealing in an area in which it might have promulgated a general rule under its statutory rule-making powers, the fact that the agency did not anticipate the problem and promulgate a rule does not mean that all power of the agency to perform its statutory duty has been withdrawn. The Court noted that "(t)o hold that the Commission had no alternative in this proceeding but to approve the proposed transaction, while formulating any general rules it might desire for use in future cases of this nature, would be to stultify the administrative process". Id. The Court has continued to recognize this rule in cases decided after the passage of the present Administrative Procedure Act. See NLRB v. Bell Aerospace Co., 416 U.S. 267, 94 S. Ct. 1757, 40 L. Ed. 2d 134 (1974); NLRB v. Wyman-Gordon Co., supra.
Applying these decisions to the matter now before the Court, the Court concludes that defendants did not improperly consider the plaintiff's application by using the proposed rule as a guideline. Defendants, by using the proposed rule as a standard, did not change an existing rule, for as defendants have stated in the NPRM, there is no prior regulation or rule on this point. At least, the proposed rule places all applicants, schools and potential students, on notice of the standards to be used pending the promulgation of a rule and the standard appears to be inherently fairer than the case by case determination utilized by defendants in the past.
Plaintiff argues that the above cases are distinguishable from the instant case because in each of those cases, the agency promulgated the challenged rule during the process of adjudicatory proceedings. The Court recognizes this difference, there being no adjudicatory proceeding here, but concludes that on the facts of this case, the rule pronounced in Chenery II and its progeny is applicable. What the defendants are doing here is considering the proposed application on an ad hoc basis as before but with a published guideline. If the defendants cannot utilize those guidelines, it means a return to the previous ad hoc determinations without guidelines. Additionally, the Court cannot conclude that the defendants lack power to act because they did not anticipate the problem, for to so hold "would be to stultify the administrative process". Chenery II, 332 U.S. at 202, 67 S. Ct. at 1580.
Plaintiff also argues that the decisions in Pickus v. United States Board of Parole, 165 U.S.App.D.C. 284, 507 F.2d 1107 (1974) and Lewis-Mota v. Secretary of Labor, 469 F.2d 478 (2d Cir. 1972) should control here, but those cases are distinguishable because in each, the agency, without the benefit of a NPRM, promulgated a change to a prior existing rule. There is no evidence that there were any previous policies which amounted to a rule in this case.
The standards set forth in the proposed rule and which are now the basis for the ad hoc determination pending formal adoption of the proposed rule, appear to be reasonable and within the power and discretion of the defendants. Therefore, for the reasons stated, this Court will not disturb the decision of the defendants concerning the eligibility of the plaintiff and will not grant the injunctive relief requested by the plaintiff. Accordingly, the Court concludes that the defendants are now entitled to summary judgment and that this case should be dismissed.
While reaching that conclusion, the Court notes that defendants correctly concluded that a regulation in this area is required, see 44 Fed.Reg. 23888, and that the defendants should proceed in a timely fashion to promulgate a rule. A formal rule-making procedure is required since the proposed rule does not fall within the definition of an interpretive rule, a general statement of policy, or a rule of the agency, organization, procedure or practice as described in 5 U.S.C. § 553(b)(A). See Pickus v. United States Board of Parole, supra, 165 U.S.App.D.C. at 289-291, 507 F.2d at 1112-1114.
An appropriate order denying plaintiff's partial motion for summary judgment and granting defendants' motion for summary judgment and dismissing this case will be entered.