What is the effect of legitimate reliance on a prior practice when it is reasonable and well-known?

What is the effect of legitimate reliance on a prior practice when it is reasonable and well-known?

• A. It could raise legitimate-expectations concerns and require proper notice if the agency departs.
• B. It requires the agency to keep the same practice indefinitely.
• C. It has no effect on agency actions.
• D. It mandates formal rulemaking for any change.

Answer: (A)

Legitimate reliance on a prior agency practice matters because people and regulated entities base their actions on what the agency has publicly done or stated. When a practice is reasonable and well-known, abruptly departing from it can undermine fairness and predictability in regulation. If the agency changes course, it should give proper notice (and ideally an opportunity to comment) so those affected can adjust or challenge the change. This protects legitimate expectations and the integrity of the agency’s process. It doesn’t require the practice to continue forever, nor does it mean no change is allowed, and it doesn’t automatically mandate formal rulemaking for every adjustment, though significant changes may still engage the notice-and-comment procedures where applicable.

Legitimate reliance on a prior agency practice matters because people and regulated entities base their actions on what the agency has publicly done or stated. When a practice is reasonable and well-known, abruptly departing from it can undermine fairness and predictability in regulation. If the agency changes course, it should give proper notice (and ideally an opportunity to comment) so those affected can adjust or challenge the change. This protects legitimate expectations and the integrity of the agency’s process. It doesn’t require the practice to continue forever, nor does it mean no change is allowed, and it doesn’t automatically mandate formal rulemaking for every adjustment, though significant changes may still engage the notice-and-comment procedures where applicable.