An agency is not precluded from announcing new principles in an adjudicative proceeding, and the choice between rulemaking and adjudication initially lies within the agency's discretion. SEC v. Chenery Corp., 332 U. S. 194; NLRB v. Wyman-Gordon Co., 394 U. S. 759. P. 416 U. S. 294.
In SEC v. Chenery Corp., 332 U. S. 194 (1947) (Chenery II). There, the respondent corporation argued that, in an adjudicative proceeding, the Commission could not apply a general standard that it had formulated for the first time in that proceeding. Rather, the Commission was required to resort instead to its rulemaking procedures if it desired to promulgate a new standard that would govern future conduct. In rejecting this contention, the Court first noted that the Commission had a statutory duty to decide the issue at hand in light of the proper standards, and that this duty remained 'regardless of whether those standards previously had been spelled out in a general rule or regulation.' Id. at 332 U. S. 201. The Court continued: 'The function of filling in the interstices of the [Securities] Act should be performed, as much as possible, through this quasi-legislative promulgation of rules ...