Adjudications resolve issues for specific parties and are like court trials.  Rules are like statutes and apply to everyone.  Since there is generally an individual’s right to be heard as part of an adjudication, but not during a rulemaking, the courts have set up standards to deciding which is which.  If the proceeding applies to all parties in the same situations, then it is a rulemaking and there is no right to a hearing.[Bi-Metallic Investment Co. v. State Board of Equalization of Colorado, 239 U.S. 441, 36 S. Ct. 141, 60 L. Ed. 372 (1915)] If the proceeding depends on specific information about the party and applies only to that party, then it is an adjudication and requires a hearing.[Londoner v. City and County of Denver, 210 U.S. 373, 28 S. Ct. 708, 52 L. Ed. 1103 (1908)]

In contrast with court trials, where the judge is not supposed to know about facts being decided, agency decisionmakers are generally selected to have expertise in the subject being decided so that they can make more accurate decisions.  In most situations the administrative judge or hearing officer in an adjudication does not make the final ruling but makes recommendations to the agency director who makes the final decision.  This allows the agency to make sure that all cases involving similar facts are decided the same way. This is especially important for large federal agencies which may decide hundreds of thousands of cases all over the US.  In contrast, courts make decisions solely on the case before them, without reference to effect on other cases or on society in general, and often reach very different decisions on cases involving similar facts.

Many people worry that agencies are biased against regulated parties and do not give them a fair hearing.  While the courts usually reject these claims of agency bias,  some states have taken the adjudication powers away from the agency and put it in a central panel of administrative judges to reduce bias claims. Unfortunately, in many cases this gives up the benefit of having the cases decided by expert decisionmakers.