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Tension between demands for generalized rules and for individualized application of law is characteristic of any legal system. The generality inherent in rules promotes predictability, efficiency, and equal treatment. But even detailed rules often fail to take into account the full variety of situations to which they arguably apply.1 The Anglo-American legal tradition permits the judicial system considerable latitude to adjust rules to fit individual cases.2 The highly rigid and specific provisions that often characterize regulatory rules, however, allow little room for such individualized justice.' The persistent occurrence of special cases, in which giving a rule its usual effect would conflict with important policies or legal principles, is an inevitable consequence of such rules. Two principal procedural mechanisms are available to administrative agencies to tailor the application of statutory and administrative rules to special cases. Under "dispensatory" discretion, an agency addresses special cases on an ad hoc basis, often without statutory or regulatory authorization to do so. Under the other mechanism, an "exceptions process," an agency considers applications for waivers, exemptions, or variances from a rule in a procedure that incorporates limited protections for applicants and other affected parties. This Note analyzes the problem posed by special cases in light of the values underlying administrative legal norms. The Note argues that, to give the fullest effect to these values, administrators must exercise discretion in special cases, and can best do so through an exceptions process rather than through dispensatory discretion. The Note then briefly examines the actual operation of a particular exceptions process. In conclusion, the Note proposes that Congress and agencies should favor inclusion of an exceptions process in systems of rules, and that courts should construe regulatory statutes presumptively as providing for an exceptions process.

Regulatory Values and the Exceptions Process