dissenting from denial of rehearing en banc:
*1011I dissent from the court’s refusal to rehear this case en banc. I believe the opinion creates unnecessary and undesirable confusion as to the state <?f the law in our circuit, and that the standard we appear to announce conflicts with the general principles of administrative law, previously enunciated by the Supreme Court, which will-remain applicable in the rest of the nation. Unless the Supreme Court grants certiorari, and applies a different standard than we appear to be adopting, government agencies will be required to ask us on a case by case basis to limit, narrow, and explain away the overly broad rationale set forth in the opinion.
I believe that our circuit would be better served if we did the necessary job ourselves. I think that it is our function to correct our errors in cases of general importance, especially when our decision conflicts with earlier binding precedent in our circuit and when we have failed to distinguish, or even discuss, that applicable precedent. The best way to do this is through our en banc process.
The panel explains its decision by stating “[ultimately, however, we are persuaded to set aside this order because the rule of the case made below will have general application. It will not apply just to Francis Ford.” Supra, at 1010. This statement simply cannot be reconciled with our recent decision in NLRB v. St. Francis Hospital of Lynwood, 601 F.2d 404 (9th Cir. 1979), which remains the law in this circuit. There we said:
The Hospital initially argues that the holding of the Mercy decision, because it is t«) be generally applied, was tantamount to a rule. The Hospital further contends that, because of the Board’s failure to follow the procedures for agency rulemaking, as delineated in 5 U.S.C. § 553, the rule is unenforceable. Contrary to the Hospital’s argument, it has been consistently held that “the Board is not precluded from announcing new principles in an adjudicative proceeding and ... the choice between rulemaking and adjudication lies in the first instance within the Board’s discretion. Thus, the mere fact that the Board created a binding policy by adjudication does not affect the policy’s validity especially where it covers an area in which the Board is permitted to act pursuant to its discretion.
601 F.2d at 414 (citations omitted).
Nor can the panel’s explanation of its decision be reconciled with NLRB v. Bell Aerospace Co., 416 U.S. 267, 94 S.Ct. 1757, 40 L.Ed.2d 134 (1974), NLRB v. Wyman-Gordon, 394 U.S. 759, 89 S.Ct. 1426, 22 L.Ed.2d 709 (1969), or Securities Comm’n v. Chenery Corp., 332 U.S. 194, 67 S.Ct. 1575, 91 L.Ed. 1995 (1947). Those cases make it clear that administrative agencies are authorized to engage in decision making which results in standards to be applied in all future cases. The panel’s statement that rulemaking is required because the decision would have “general application,” and because it will have an effect in the long run on persons other than the individual whose case was before the agency, constitutes an unwarranted and unique acceptance of the “perennial plaint” that decisions of administrativos agencies should be invalidated because of their “general” impact. See British Caledonian Airways, Ltd. v. CAB, 584 F.2d 982, 992 (D.C.Cir.1978).
The panel’s opinion pays lip service at most to the basic principle of administrative law that “the choice between rulemaking and adjudication lies in the first instance within the Board’s discretion.” NLRB v. Bell Aerospace Co., 416 U.S. 267, 294, 94 S.Ct. 1757, 1771, 40 L.Ed.2d 134 (1974); NLRB v. Children’s Baptist Home, 576 F.2d 256 (9th Cir. 1978). While repeating the rule, the panel opinion gives it no weight and no significance, and the panel fails to state explicitly that the agency abused its discretion.
The panel cites only one of our prior decisions, Patel v. I&NS, 638 F.2d 1199 (9th Cir. 1980). In Patel, we refused to permit the Immigration and Naturalization Service to use an earlier adjudication to create or impose a job creation requirement on an alien seeking the investor exemption from *1012labor certification requirements. The holding in Patel turned on two. factors: (1) the I&NS’s “confusion” regarding the job creation requirement, id. at 1205; cf. Ruangswang v. I&NS, 591 F.2d 39, 46 (9th Cir. 1978) (Sneed, J., concurring); and (2) “the resulting hardship to Patel . .. . ” Patel, 638 F.2d at 1205. Neither of those factors is present here, and the holding in Patel does not support the panel’s analysis.
Since the call for an en banc vote failed to muster the support of an absolute majority of the active members of this court who were eligible to vote,1 it would appear that a number of my colleagues are not as concerned as I am with the conflict between the broad, generalized statement in the panel’s opinion and our own prior precedents which carefully apply the applicable line of Supreme Court cases in this area. My colleagues may believe that the broad, generalized statement is limited by the specific explanations subsequently offered in the panel’s opinion. Specifically, they may feel that the opinion stands only for the proposition that an administrative agency decision which creates a new and different national interpretation of the uniform law (in this case the Uniform Commercial Code) applicable in all of the states of this nation is beyond an agency’s decision making powers, at least where the agency has proposed a rule which would have that effect but has not. yet enacted it.2 If this is my colleagues’ view, the damage caused by the panel’s opinion will be minor and temporary. I think we would be better served, however, if we would clarify the law of the circuit now, through the en banc procedure, rather than allow the unnecessary confusion which will inevitably exist in the field of administrative law pending the time that we explain the limitations of the majority’s opinion in our subsequent decisions.
The en banc procedure provides us with a valuable tool. It allows us to function efficiently, to resolve intracircuit conflicts and to ensure that cases of major importance are decided in a manner which reflects the law as we see it as a circuit, and as we will apply it in the long run. When we fail to take advantage of that tool, we create unnecessary work for the Supreme Court, and for ourselves if the Supreme Court fails to act. I regret that we did not take the opportunity to clarify the law in the case before us. I am confident that had we done so we would have expressed the applicable principles of administrative law in a different and more traditional manner than the panel does here.
. Under our limited en banc rule, a call for an en banc vote prevails only when affirmative votes are cast by a majority of the 23 active members of the court who are not disqualified from voting. We then form a limited en banc panel of 11 judges, comprised of 10 judges drawn at random and the Chief Judge. When we deny an en banc request, after a vote is called for, we do not announce the number of judges who voted to grant the request. All that we reveal by our announcement that an unsuccessful vote was taken is the fact that fewer than 12 active judges voted to hear the case en banc. The reference in the text to the requirement of an absolute majority therefore does not constitute any indication as to the number of judges supporting the request in this case or any indication as to how the court divided. To the contrary, it is merely a reflection of the rule we follow in all cases.
. In Patel, while our holding was limited to the factors described in the text, supra, we also concluded that the so-called Heitland rule established in an adjudicatory proceeding was an “improper circumvention of rule-making procedure.” We stated:
Only months before, the INS itself had recognized the desirability of establishing a job-creation standard by rulemaking when it proposed the 1973 regulation. See 37 Fed.Reg. 23274 (1972); 38 Fed.Reg. 1379 (1973). The INS eventually failed to include the job-creation standard in its rule. Under the authority of Wyman-Gordon, we conclude that if the INS wished to add the job-creation criterion, it should have done so in a rulemaking procedure.
Patel v. INS, 638 F.2d 1199, 1204 (9th Cir. 1980).
Here, the agency had proposed the adoption of the standard as part of a regulation it was considering, but adopted the standard in an adjudicatory proceeding before the rule-making process was completed. Thus, my colleagues may believe that, as in Patel, the agency circumvented the rule-making process and that, notwithstanding the panel’s broad general statements, the panel opinion will be so limited if we are asked to consider it in future cases.