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ModernizingtheAdministrativeProcedureAct1.pdf
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ESSAY
MODERNIZING THE ADMINISTRATIVE PROCEDURE ACT
CHRISTOPHER J. WALKER*
ABSTRACT
Despite dramatic changes in the modern regulatory state over the last seven decades, Westlaw reports that Congress has only amended the Administrative Procedure Act sixteen times since its enactment in 1946. The current political climate may present an ideal op- portunity for much-needed bipartisan legislative action. This Essay introduces the Ameri- can Bar Association’s 2016 consensus-driven recommendations to reform the Administra- tive Procedure Act and then concludes that the Portman–Heitkamp Regulatory Accountability Act of 2017, which incorporates seven of the ABA’s nine recommenda- tions, is the type of common-sense, bipartisan legislation needed to modernize the APA.
* Associate Professor of Law, Michael E. Moritz College of Law, The Ohio State University. The author is a Public Member of the Administrative Conference of the United States and on the Governing Council for the American Bar Association’s Section of Admin- istrative Law and Regulatory Practice. These organizations have recommended many of the proposals discussed in this Essay. Similarly, the author served as an Academic Fellow for Senator Orrin Hatch from January to May 2017, during which time he worked on regulato- ry reform legislation, including the Regulatory Accountability Act discussed herein. Indeed, Senator Hatch is one of the four original co-sponsors of that legislation. The views ex- pressed, of course, are the author’s own. Thanks are due to Evan Bernick, Kent Barnett, Kati Kovacs, Ron Levin, Jeff Lubbers, and Michael McConnell, as well as participants at the Hoover Institution’s Reforming the Administrative State Conference, for helpful com- ments on prior drafts and to the editors of the Administrative Law Review—Matt Goldstein in particular—for their expert (and expedited) editorial assistance.
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TABLE OF CONTENTS
Introduction ............................................................................................... 630 I. Evolution of the APA .............................................................................. 633 II. ABA 2016 Resolution to Reform the APA ........................................... 638
A. Agency Disclosure of Data, Studies, and Information ........ 639 B. The Agency Rulemaking Record ........................................ 640 C. Minimum Comment Period ............................................... 641 D. Definition of “Rule” ............................................................ 642 E. Midnight Rules .................................................................... 643 F. Retrospective Review .......................................................... 644 G. Unified Regulatory Agenda ................................................ 645 H. Outmoded Rulemaking Exemptions .................................. 646 I. Post-Promulgation Notice-and-Comment Rulemaking ....... 646
III. Regulatory Accountability Act of 2017 ............................................... 648 A. Adoption of ABA Recommendations ................................ 650 B. Codification of Executive Order 12,866 ............................ 652 C. Procedures for Major and High-Impact Rules .................. 656 D. Codification of Agency Guidance ...................................... 662 E. Agency Public Advocacy Restrictions ................................ 664 F. Scope of Judicial Review .................................................... 665
Conclusion ................................................................................................. 670
INTRODUCTION
The Administrative Procedure Act (APA) has set the default rules that govern the federal regulatory state since its enactment in 1946.1 Over the decades, the APA has assumed quasi-constitutional status. In 1978, for in- stance, then-Professor Antonin Scalia remarked that “the Supreme Court regarded the APA as a sort of superstatute, or subconstitution, in the field of administrative process: a basic framework that was not lightly to be sup- planted or embellished.”2 Indeed, Westlaw reports that Congress has only amended the APA sixteen times in more than seven decades, the last time
1. See generally 5 U.S.C. §§ 551–59, 701–06 (2012). 2. Antonin Scalia, Vermont Yankee: The APA, the D.C. Circuit, and the Supreme Court, 1978
SUP. CT. REV. 345, 363; see also Kathryn E. Kovacs, Superstatute Theory and Administrative Com- mon Law, 90 IND. L.J. 1207, 1209 (2015) (drawing on WILLIAM N. ESKRIDGE, JR. & JOHN FEREJOHN, A REPUBLIC OF STATUTES: THE NEW AMERICAN CONSTITUTION (2010) to argue that the Administrative Procedure Act (APA) is a “superstatute” in the Eskridge–Ferejohn sense).
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in 1996.3 The lack of substantial legislative reform of the APA does not mean it has failed to evolve. On the contrary, the Supreme Court and the lowers courts—with the D.C. Circuit playing a prominent role—have de- veloped a number of administrative common law doctrines that have re- shaped the APA’s default rules for agency action and judicial review there- of.
In recent years, however, there seems to have been more interest in Congress to reform the APA. During the Obama Administration, Republi- cans in Congress introduced a number of legislative proposals that had the potential to dramatically alter the administrative state.4 Now that the Re- publicans control both chambers of Congress and the White House, one reasonably might conclude that Republican calls for regulatory reform would disappear. That has not been the case. In January, for instance, House Republicans reintroduced and passed a suite of those regulatory re- form proposals in an omnibus bill.5 Within the first few days of taking of- fice, moreover, President Trump issued an ambitious executive order that requires federal agencies to identify two old regulations to eliminate for eve- ry new regulation proposed and to ensure that the net costs of new regula- tions are offset by the elimination of other costs.6 Similarly, without a Democratic President driving the regulatory state, Democrats in Congress should be more interested in implementing common-sense regulatory re- form to require federal agencies to be more deliberative, transparent, and effective. This is particularly true if the bipartisan legislation would apply to regulation and deregulation alike. The current political climate thus may present an ideal opportunity for bipartisan legislative action to modernize the APA.7
Last year, another legislative proposal received far less attention but is of critical importance to modernize the APA. The American Bar Association
3. This figure is based on the Westlaw popular name table for the APA. See Adminis- trative Procedure Act, U.S.C.A. Popular Name Table for Acts of Congress, Westlaw (data- base updated 2016) [hereinafter, Westlaw Popular Name Table]. The amendments are dis- cussed further in Part I infra.
4. For a compilation of regulatory reform bills introduced in Congress since 2011, see Memorandum from Administrative Conference of the United States (ACUS) Interns to Reeve T. Bull, Research Chief, ACUS (Jan. 30, 2017) https://www.acus.gov/sites/default/ files/documents/Regulatory%20Reform%20Legislation%20Memo%202-13-2017.pdf.
5. Regulatory Accountability Act of 2017, H.R. 5, 115th Cong. (2017). 6. See Exec. Order No. 13,771, 82 Fed. Reg. 9,339 (Jan. 30, 2017). 7. See Christopher J. Walker, The Regulatory Accountability Act Is a Model of Bipartisan Reform,
REG. REV. (May 18, 2017), https://www.theregreview.org/2017/05/18/walker-model- bipartisan-reform/.
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(ABA) House of Delegates passed Resolution 106B, which recommends nine reforms to the rulemaking provisions of the APA.8 As discussed in Part II, the ABA and others first suggested some of these recommendations over three decades earlier.9 Other recommendations are more modern re- sponses to deficiencies in the current APA.
In April, Senators Rob Portman (R-OH) and Heidi Heitkamp (D-ND), joined by Senators Orrin Hatch (R-UT) and Joe Manchin (D-WV), intro- duced a bipartisan regulatory reform bill entitled the Regulatory Accounta- bility Act of 2017.10 As discussed in Part III, this legislation focuses on re- forming the rulemaking process and incorporates parts of seven of the nine recommendations contained in the ABA’s 2016 resolution. If enacted, the Regulatory Accountability Act would constitute the most significant reform of the APA since its enactment in 1946.
In this Essay, I argue that now is the time for Congress to modernize the APA with comprehensive, bipartisan legislation. Part I briefly recounts the evolution of the APA, in both Congress and the judicial branch. Part II outlines the ABA’s suggested reforms. Part III then turns to the various re- forms included in the Portman–Heitkamp Regulatory Accountability Act. Although this Essay does not endeavor to reach a definitive conclusion as to every provision in the legislation, my general conclusion is that the Port- man–Heitkamp Regulatory Accountability Act is the type of thoughtful, common-sense, bipartisan legislation needed to modernize the APA.11
8. ABA, House of Delegates Resolution 106B (adopted Feb. 8, 2016) [hereinafter ABA Resolution 106B]. I serve on the Governing Council for the ABA Section of Administrative Law and Regulatory Practice, which developed Resolution 106B and its accompanying re- port. See Connor N. Raso, New ABA Administrative Law Section Resolution on Improving the APA, YALE J. ON REG: NOTICE & COMMENT (Dec. 19, 2015), http://yalejreg.com/nc/new-aba- administrative-law-section-resolution-on-improving-the-apa-by-connor-raso/.
9. See ABA Section of Admin. Law & Regulatory Practice, The 12 ABA Recommendations for Improved Procedures for Federal Agencies, 24 ADMIN. L. REV. 389 (1972).
10. Regulatory Accountability Act of 2017, S. 951, 115th Cong. (2017); see also Press Release, Senator Rob Portman, Portman, Heitkamp Introduce the Bipartisan Senate Regu- latory Accountability Act (Apr. 26, 2017), https://www.portman.senate.gov/public/index.cf m/2017/4/portman-heitkamp-introduce-the-bipartisan-senate-regulatory-accountability- act. On May 17, 2017, the Senate Committee on Homeland Security and Governmental Affairs favorably reported an amended version of the legislation out of committee. See Chris Walker, Update on Portman–Heitkamp Regulatory Accountability Act, YALE J. ON REG: NOTICE & COMMENT (May 20, 2017), http://yalejreg.com/nc/update-on-portman-heitkamp- regulatory-accountability-act/.
11. To date, the Center for Progressive Reform—through James Goodwin, Thomas McGarity, Sidney Shapiro, and Rena Steinzor—has provided the most thoughtful and
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I. EVOLUTION OF THE APA
As many others have chronicled, the APA emerged in 1946 as a “fierce compromise” from a decade-long battle between those in favor of and those against the rise of the New Deal administrative state.12 The APA sets the default rules for agency action and judicial review thereof.13 The APA es- tablishes detailed procedures for the two core means of agency action— rulemaking and adjudication—while recognizing that other statutes may provide for different forms of agency action.14 The APA judicial review standards apply broadly whenever Congress has made a particular agency action “reviewable by statute” and the action is “final agency action for which there is no other adequate remedy in a court.”15 The statute that au- thorizes an agency’s action, which is commonly referred to as an agency’s organic or governing statute, may modify the APA’s default standards or even prohibit judicial review altogether.16
Since the APA’s enactment in 1946, Westlaw reports that Congress has
comprehensive critique of the Regulatory Accountability Act. See James Goodwin, Anything but Moderate: The Senate Regulatory Accountability Act of 2017, CPRBLOG (May 2, 2017), http://www.progressivereform.org/CPRBlog.cfm?idBlog=B6B0B417-E50E-5626- FCB79F4E27E24532 (including link to a full analysis of their criticisms).
12. George B. Shepherd, Fierce Compromise: The Administrative Procedure Act Emerges from New Deal Politics, 90 NW. U. L. REV. 1557, 1560 (1996); see also, e.g., Walter Gellhorn, The Administrative Procedure Act: The Beginnings, 72 VA. L. REV. 219, 219 (1986) (“The story begins in May 1933, when the American Bar Association created a Special Committee on Adminis- trative Law under the chairmanship of Louis G. Caldwell, a highly respected Washington lawyer who had practiced ably in the telecommunications field.”); Kovacs, supra note 2, at 1227 (“In sum, the APA of 1946 represented Congress’s response to a conservative move- ment and emerged from an enthusiastic Congress following years ‘of public discussion and official deliberation’ within and between Congress, the Executive Branch, the ABA, and the public.”).
13. See generally Administrative Procedure Act, 5 U.S.C. §§ 551–59, 701–09 (2012). 14. See id. § 553 (rulemaking provisions); § 554 (adjudication provisions); § 559 (recog-
nizing that other statutes could provide additional or different agency procedures). 15. Id. § 704. 16. See id. § 559 (“Subsequent statute may not be held to supersede or modify [the
APA] . . . except to the extent that it does so expressly.”); § 701(a) (noting that judicial review under the APA is available “except to the extent that—(1) statutes preclude judicial review; or (2) agency action is committed to agency discretion by law”); see also Stephanie Hoffer & Christopher J. Walker, The Death of Tax Court Exceptionalism, 99 MINN. L. REV. 221, 243–50 (2014) (detailing further default judicial review standards and how other statutes can depart from those APA default standards).
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only amended it sixteen times, most recently in 1996.17 In the 1940s, the APA was amended five times to exempt from the APA definition of “agen- cy”—and thus from the APA framework entirely—any functions conferred by certain subsequent legislation.18 Similarly, two minor, conforming amendments were made in 1968 and 1978.19 The other nine amendments were more substantial.
In 1966, Congress enacted the Freedom of Information Act (FOIA), landmark legislation that amended the APA to require public disclosure of certain government information.20 In 1974, Congress enacted the Privacy Act, which amended FOIA to address records maintained on individuals.21 The Privacy Act provisions were amended three more times in the 1980s.22
17. This figure is based on the amendments listed in the Westlaw popular name table for the APA, each of which is discussed further in this Part. As further noted in this Part, Westlaw’s popular name table does not capture every amendment to the Freedom of Infor- mation Act and Privacy Act. See Westlaw Popular Name Table, supra note 3. Nor does it consider other statutory provisions in Title 5 of the U.S. Code that deal with federal agen- cies yet lie outside of the sections of Title 5 that codify the original APA. See 5 U.S.C. §§ 551–59, 701–06.
18. See Act of Aug. 8, 1946, ch. 870, Title III, § 302, 60 Stat. 918 (amending 5 U.S.C. § 551(a) to exclude functions conferred by the Veterans’ Emergency Housing Act of 1946); Act of Aug. 10, 1946, ch. 951, Title VI, § 601, 60 Stat. 993 (same); Act of Mar. 31, 1947, ch. 30, § 6(a), 61 Stat. 37 (amending definition of agency in 5 U.S.C. § 551(a) to exclude func- tions conferred by the Surplus Control Extension Act of 1947); Act of June 30, 1947, ch. 163, Title II, § 210, 61 Stat. 201 (amending definition of agency in 5 U.S.C. § 551(a) to ex- clude functions conferred by the Housing Rent Act of 1947); Act of Mar. 30, 1948, ch. 161, Title III, § 301, 62 Stat. 99 (amending definition of agency in 5 U.S.C. § 551(a) to exclude functions conferred by the 1948 amendments to the Housing and Rent Act of 1947).
19. Act of Oct. 22, 1968, Pub. L. No. 90-623, § 1(1), 82 Stat. 1312 (amending 5 U.S.C. § 559 to insert “of this title”); Act of Oct. 13, 1978, Pub. L. No. 95-454, § 801(a)(3)(B)(iii), 92 Stat. 1222 (amending 5 U.S.C. § 559 to replace “5362” with “5372”).
20. Freedom of Information Act of 1966, Pub. L. No. 89-487, 80 Stat. 250 (amending 5 U.S.C. § 552).
21. Privacy Act of 1974, Pub. L. No. 93-579, 88 Stat. 1896 (codified at 5 U.S.C. § 552(a)); see also Act of Dec. 31, 1975, Pub. L. No. 94-183, § 2(2), 89 Stat. 1057 (amending 5 U.S.C. § 552a(g)(5) to replace “to the effective date of this section” with “to September 27, 1975”). Strangely, the Westlaw popular name table for the APA lists the latter minor amendment but not the Privacy Act itself as an APA amendment. That appears to be be- cause that statute was not officially an amendment to the APA, but only inserted into the APA code section.
22. Debt Collection Act of 1982, Pub. L. No. 97-365, § 2, 96 Stat. 1749 (amending 5 U.S.C. § 552a); Congressional Reports Elimination Act of 1982, Pub. L. No. 97-375, Title II, § 201(a)–(b), 96 Stat. 1821 (amending § 552a(p)); Act of Jan. 12, 1983, Pub. L. No. 97-
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In 1996, Congress updated FOIA, mainly to provide public access to in- formation in an electronic format.23 (Although Westlaw does not identify it as an amendment to the APA, last year Congress enacted additional legisla- tion to further modernize FOIA.)24
In 1976, Congress enacted the Government in the Sunshine Act, which amended the APA to require open meetings and prohibited ex parte com- munications for certain agency actions.25 Also in 1976, Congress amended the judicial review provisions of the APA to include a waiver of sovereign immunity and clarify the form and venue of an APA civil action.26 In 1978, Congress changed the name of “hearing examiners” to “administrative law judges” and increased the number of those judges.27
In sum, Congress has only amended the APA sixteen times since its en- actment in 1946, yet even that number is misleading. There have really only been four—or perhaps five—significant statutory changes: FOIA (1966), the Privacy Act (1974), the Government in the Sunshine Act (1976), the waiver of sovereign immunity (1976), and, to a lesser extent, the renam- ing of administrative law judges (1978). Aside from modernizing FOIA in 1996 (and again in 2016), Congress has made no substantial change to the APA in nearly forty years (since 1978).
The lack of significant legislative action does not mean the APA has re- mained constant. The Supreme Court and the lower courts—with the D.C. Circuit leading the way—have developed a wide variety of “adminis- trative common law” doctrines that further modify the APA.28 As Kenneth
452, § 2(a)(1), 96 Stat. 2478 (amending §§ 552a(b), 552a(m)). 23. Electronic Freedom of Information Act Amendments of 1996, Pub. L. No. 104-
231, §§ 3–11, 110 Stat. 3049 (amending 5 U.S.C. § 552). 24. See FOIA Improvement Act of 2016, Pub. L. No. 114-185, 130 Stat. 538 (amending
5 U.S.C. § 552). 25. Government in the Sunshine Act, Pub. L. No. 94-409, §§ 3(a), 4, 5(b), 90 Stat. 1241
(adding 5 U.S.C. § 552b and § 557(d)(1) and conforming language in §§ 551, 552, and 556). 26. Act of Oct. 21, 1976, Pub. L. No. 94-574, § 1, 90 Stat. 2721 (amending 5
U.S.C. §§ 702, 703). See generally Kathryn E. Kovacs, Scalia’s Bargain, 77 OHIO ST. L.J. 1155 (2016) (providing a definitive account of legislative history leading up to these amendments).
27. Act of Mar. 27, 1978, Pub. L. No. 95-251, §§ 2(a)(1), 2(b)(1)–(2), 92 Stat. 183 (amending 5 U.S.C. §§ 554, 556 and 559).
28. See, e.g., Gillian E. Metzger, Embracing Administrative Common Law, 80 GEO. WASH. L. REV. 1293, 1295 (2012) (defining and defending “administrative common law” as “adminis- trative law doctrines and requirements that are largely judicially created, as opposed to those specified by Congress, the President, or individual agencies”). But see John F. Duffy, Adminis- trative Common Law in Judicial Review, 77 TEX. L. REV. 113, 152 (1998) (criticizing the rise of administrative common law and noting that it has been receding somewhat).
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Culp Davis put it in 1980, “Most administrative law is judge-made law, and most judge-made administrative law is administrative common law.”29
As for the APA’s procedures for agency action, the Supreme Court has struck down most judicial efforts to graft on additional agency procedures not required by statute. Most famously, the Supreme Court held in Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council30 that “[a]gencies are free to grant additional procedural rights in the exercise of their discre- tion, but reviewing courts are generally not free to impose them if the agen- cies have not chosen to grant them.”31 More recently, in Perez v. Mortgage Bankers Ass’n,32 the Court rejected another D.C. Circuit administrative common law doctrine—the requirement of notice-and-comment rulemak- ing to reverse certain prior agency guidance—and held that such doctrine “improperly imposes on agencies an obligation beyond the ‘maximum pro- cedural requirements’ specified in the APA.”33
With respect to the APA’s judicial review provisions, however, extensive administrative common law remains on the books. That may well be ex- plained, as Thomas Merrill has documented, by the fact that the APA em- braces an appellate model of judicial review.34 Under this model, courts
29. Kenneth Culp Davis, Administrative Common Law and the Vermont Yankee Opinion, 1980 UTAH L. REV. 3, 3 (1980); cf. Jack M. Beermann, Common Law and Statute Law in Admin- istrative Law, 63 ADMIN. L. REV. 1, 4 (2011) (“The most that one can confidently say today is that administrative law contains elements that appear to be highly statutorily focused along- side elements in which courts exercise the discretion of a common law court.”). See generally Aaron L. Nielson, Visualizing Change in Administrative Law, 49 GA. L. REV. 757, 776–93 (2015) (detailing how administrative law has changed since the APA).
30. 435 U.S. 519 (1978). 31. Id. at 524. See generally Gillian E. Metzger, The Story of Vermont Yankee, in
ADMINISTRATIVE LAW STORIES 124, 149–50 (Peter L. Strauss ed., 2006) (observing that the Vermont Yankee “opinion is a masterpiece of obfuscation” on what exactly were the procedures that the agency should have implemented—including, perhaps, cross-examination, discov- ery, or a more robust record on which to evaluate the agency’s reasoned decisionmaking); Scalia, supra, note 2 at 356 (“The essential meaning of the opinion below was unclear. In- deed, the first step in the Supreme Court’s analysis had to be a determination whether the basis of decision was inadequacy of procedures or inadequacy of record support. (The Su- preme Court concluded that it was the former.)”).
32. 135 S. Ct. 1199 (2015). 33. Id. at 1206 (quoting Vermont Yankee, 435 U.S. at 524); see Kathryn E. Kovacs, Pixelat-
ing Administrative Common Law in Perez v. Mortgage Bankers Association, 125 YALE L.J. FORUM 31, 42 (2015) (“The Court should take a step back from the canvas of administrative law to see the whole picture. If it had taken a step back in Mortgage Bankers, it would have ex- plained why Paralyzed Veterans doctrine conflicts with the APA and ended its opinion there.”).
34. See Thomas W. Merrill, Article III, Agency Adjudication, and the Origins of the Appellate Re-
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review agency actions similar to how appellate courts review trial court de- cisions. The appellate review model in this context is based on the record in the prior proceeding, and the reviewing court does not engage in inde- pendent fact-finding. Likewise, the standard of review reflects the compar- ative expertise of the particular institutions, with more or less deferential review, depending on whether the issue is more factual or legal.35
Unlike the intra-branch relationship between appellate and trial courts, the relationship between courts and agencies implicates separation-of- powers concerns. For instance, “The presumption that the reviewing court has superior competence to answer questions of law is rebutted by the fact that Congress often delegates law-elaboration authority first and foremost to the agency.”36 Administrative law’s appellate review model has thus evolved beyond the most natural reading of the APA’s text to incorporate a number of agency deference doctrines that reflect these separation-of- powers values.37 Chevron deference comes immediately to mind.38 Auer def- erence—the command that courts defer to agency interpretations of their own regulations—is another, perhaps even less textually grounded defer- ence doctrine.39
view Model of Administrative Law, 111 COLUM. L. REV. 939, 940 (2011). 35. See Christopher J. Walker, The Ordinary Remand Rule and the Judicial Toolbox for Agency
Dialogue, 82 GEO. WASH. L. REV. 1553, 1554–57 (2014) (further describing administrative law’s appellate model).
36. Id. at 1555 (citing, inter alia, Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 983 (2005)).
37. See Christopher J. Walker, Avoiding Normative Canons in the Review of Administrative Inter- pretations of Law: A Brand X Doctrine of Constitutional Avoidance, 64 ADMIN. L. REV. 139, 173–82 (2012) (exploring separation of powers concerns in the context of Chevron deference and con- stitutional avoidance).
38. Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842–43 (1984) (instructing courts to defer to reasonable agency interpretations of ambiguous provisions in statutes the agency administers); see also Merrill, supra note 34, at 999 (noting that, “in re- sponse to the deregulation movement, the model was sufficiently elastic to permit a further modification in the appropriate division of authority in resolving questions of law, most prominently with the Chevron decision in 1984.”); see, e.g., Duffy, supra note 28, at 189–90 (“Yet although Chevron was born of the common-law method, a battle is now being waged in the courts between two conceptions of Chevron. One side would continue the common law reasoning of the Chevron opinion; the other would base the doctrine on an interpretation of specific statutory provisions . . . . The D.C. Circuit and Justice Scalia are chief defenders of the common-law version of Chevron, but they are losing the battle.”).
39. See generally Christopher J. Walker, Attacking Auer and Chevron Deference: A Literature Review, 15 GEO. J.L. & PUB. POL’Y (forthcoming 2018) (on file with author) (documenting criticisms of both deference doctrines).
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Administrative common law in judicial review has not been limited to judicial deference to agency legal interpretations. As John Duffy noted, ex- haustion of administrative remedies and ripeness are two other areas histor- ically rich in administrative common law.40 Nicholas Bagley has identified the presumption of reviewability as another.41 We also see it at play with respect to “hard look” review and judicial remedies in administrative law, such as the Chenery principle and remand without vacatur.42 Similarly, Kathryn Kovacs has identified a number of other administrative common law doctrines that arguably contravene the APA’s plain text.43
This Essay does not endeavor to document, much less critique, every in- stance of administrative common law that has emerged since the APA’s en- actment in 1946. Instead, this discussion illustrates that the APA has evolved considerably over the last seven decades, just not due to congres- sional action. Indeed, one could reasonably argue that administrative common law has sprawled because of congressional inaction. At the very least, we can safely conclude that the judicial branch, not Congress, has played the predominant role in shaping the contours of the APA.
II. ABA 2016 RESOLUTION TO REFORM THE APA
As noted in the Introduction, the current political climate may present an ideal opportunity for bipartisan legislation to modernize the APA. If so, as this Part details, the ABA’s consensus-driven recommendations are an excellent starting place.
In 2015, the Governing Council for the ABA’s Section of Administrative Law and Regulatory Practice, on which I serve, convened to evaluate nu- merous proposals to modernize the APA. We reviewed prior ABA recom- mendations on the topic as well as the recommendations the Administrative Conference of the United States (ACUS) had issued over the years. Our goal was to identify nonpartisan and common-sense reforms to the APA.
40. Duffy, supra note 28, at 152–81. 41. Nicholas Bagley, The Puzzling Presumption of Reviewability, 127 HARV. L. REV. 1285,
1287 (2014) (“The ostensible statutory source for the presumption—the [APA]—nowhere instructs courts to construe statutes to avoid preclusion.” (footnote omitted)).
42. See generally Christopher J. Walker, Against Remedial Restraint in Administrative Law, 117 COLUM. L. REV. ONLINE 106, 111–16 (2017) (discussing hard look review and remedial is- sues in administrative law).
43. See Kovacs, supra note 2, at 1211 (identifying as administrative common law “super- deference to certain agencies despite Congress’s deliberate decision to subject all agencies to the same standard of review; procedural requirements that exceed the APA’s minimal rule- making provisions; and prudential ripeness doctrine.”).
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We ultimately included nine such recommendations in what became the ABA House of Delegates Resolution 106B.44 All of these recommendations focus on the APA’s rulemaking provisions. The Section approved this reso- lution in the fall of 2015, and the ABA House of Delegates adopted the res- olution in February 2016.45
Each recommendation will be discussed in turn.
A. Agency Disclosure of Data, Studies, and Information
The first recommendation provides: Codify the requirement that an agency fully disclose data, studies, and other information upon which it proposes to rely in connection with a rulemaking, including factual material that is critical to the rule that becomes available to the agency after the comment period has closed and on which the agency proposes to rely.46
Presently, the text of the APA only requires agencies to provide public notice of “either the terms or substance of the proposed rule or a descrip- tion of the subjects and issues involved.”47 Courts have expanded on this statutory provision to require the disclosure of the data and studies underly- ing a proposed rule. As the D.C. Circuit explained in Portland Cement Ass’n v. Ruckelshaus,48 “In order that rule-making proceedings to determine stand- ards be conducted in orderly fashion, information should generally be dis- closed as to the basis of a proposed rule at the time of issuance.”49 But, as Judge Kavanaugh has argued, the Portland Cement disclosure doctrine
44. In Resolution 106B, we also recommended that federal agencies further experiment with processes for allowing reply comments during rulemaking. See ABA Resolution 106B, supra note 8, at 1–2. That recommendation was not styled as an amendment to the APA, so it will not be discussed here.
45. The words in this Part are my own, but the analysis draws substantially from our Section report to the ABA House of Delegates, which accompanied the Section’s proposed resolution. See generally ABA SECTION OF ADMIN. LAW & REGULATORY PRACTICE, PROPOSED RESOLUTION AND REPORT (Feb. 8, 2016) [hereinafter ABA ADLAW SECTION REPORT], http://www.americanbar.org/news/reporter_resources/midyear-meeting-2016/ house-of-delegates-resolutions/106b.html.
46. ABA Resolution 106B, supra note 8, at 1. 47. 5 U.S.C. § 553(b)(3) (2012). 48. 486 F.2d 375 (D.C. Cir. 1973). 49. Id. at 394 (“If this [initial disclosure] is not feasible, as in case of statutory time con-
straints, information that is material to the subject at hand should be disclosed as it becomes available, and comments received, even though subsequent to issuance of the rule—with court authorization, where necessary.”).
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“stands on a shaky legal foundation (even though it may make sense as a policy matter in some cases)” because it “cannot be squared with the text of § 553 of the APA.”50
Congress should amend the APA to make clear that federal agencies must “provide public notice of, and access to, all data, studies, and other information considered or used by the agency in connection with its deter- mination to propose the rule that is not protected from disclosure.”51 Not only would this amendment codify longstanding judicial precedent and administrative practice; it would also advance the important policy goal of making the public comment process meaningful. Affected individuals should have the opportunity to evaluate the inputs that led to the proposed rule in order to comment on whether the agency has engaged in reasoned decisionmaking, and whether the proposed rule will advance the public in- terest and the agency’s statutory mandates.
B. The Agency Rulemaking Record
The second recommendation is related to the first. It suggests that the APA expressly require federal agencies to develop a complete and publicly accessible rulemaking record:
Provide for the systematic development by the agency in each rulemaking of a rulemaking record as a basis for agency factual determinations and a record for judicial review. The record should include any material that the agency considered during the rulemaking, in addition to materials required by law to be included in the record, as well as all comments and materials submitted to the agency during the comment period. The record should be accessible to the public via an online docket, with limited exceptions allowed, such as for privileged, copyrighted, or sensitive material.52
The APA currently seems to contemplate an agency record, as its judi- cial review provisions instruct that “the court shall review the whole record or those parts of it cited by a party.”53 The Supreme Court has repeatedly
50. See Am. Radio Relay League, Inc. v. FCC, 524 F.3d 227, 246 (D.C. Cir. 2008) (Ka- vanaugh, J., concurring in part, concurring in the judgment in part, and dissenting in part); see also Jack M. Beermann & Gary Lawson, Reprocessing Vermont Yankee, 75 GEO. WASH. L. REV. 856, 894 (2007) (arguing that the Portland Cement doctrine is “a violation of the basic principle of Vermont Yankee that Congress and the agencies, but not the courts, have the pow- er to decide on proper agency procedures.”) (citing Vermont Yankee Nuclear Power Corp. v. Nat. Res. Def. Council, Inc., 435 U.S. 519, 524 (1978)).
51. ABA ADLAW SECTION REPORT, supra note 45, at 1. 52. ABA Resolution 106B, supra note 8, at 1. 53. 5 U.S.C. § 706 (2012).
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emphasized that an agency’s action must be judged based on the “adminis- trative record made.”54 But the APA does not expressly require agencies to maintain a publicly available record for notice-and-comment rulemaking proceedings.
This agency-record recommendation is not a new one. The ABA has been making it since at least 1981,55 and for good reason. An agency rec- ord, made publicly available during the comment period, allows the public to fully assess and effectively comment on the agency’s proposed rule.56 It also ensures that the reviewing court can evaluate the propriety of the agency’s rulemaking process and of the final rule. Although ABA Resolu- tion 106B is limited to the APA’s rulemaking provisions, a similar record requirement would make good sense in the informal adjudication context— whenever there is potential judicial review of an agency action.
C. Minimum Comment Period
The third recommendation suggests that Congress amend the APA to “[e]stablish a minimum comment period of 60 days for ‘major’ rules as de- fined by the Congressional Review Act, subject to an exemption for good cause.”57 The APA sets no minimum (or maximum) time for the public comment period, yet it is crucial that interested individuals have sufficient time to respond to a proposed rule, especially for a “major” rule.58
This too is not a new recommendation. The ABA has insisted on a min-
54. Vermont Yankee, 435 U.S. at 549 (citing, inter alia, Camp v. Pitts, 411 U.S. 138, 143 (1973)); accord SEC v. Chenery Corp., 318 U.S. 80, 87 (1943) (“The grounds upon which an administrative order must be judged are those upon which the record discloses that its action was based.”).
55. See 106 A.B.A SEC. CORP., BANK., & BUS. L. REP. 783, 785 (1981) [hereinafter 1981 ABA REPORT].
56. See, e.g., William F. Pedersen, Jr., Formal Records and Informal Rulemaking, 85 YALE L.J. 38, 39 (1975) (“Rulemaking procedures should provide for compiling and organizing an administrative record while rulemaking is in process, with use of a discovery system to en- sure that no material which properly should be included is left out.”).
57. ABA Resolution 106B, supra note 8, at 1. 58. See 5 U.S.C. § 804(2) (2012) (defining a “major rule” as “any rule that the Adminis-
trator of the Office of Information and Regulatory Affairs of the Office of Management and Budget finds has resulted in or is likely to result in—(A) an annual effect on the economy of $100,000,000 or more; (B) a major increase in costs or prices for consumers, individual in- dustries, Federal, State, or local government agencies, or geographic regions; or (C) signifi- cant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.”).
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imum comment period since at least 1981.59 More recently, both the Obama Administration and ACUS similarly recommended a minimum comment period. As President Obama’s Executive Order on Improving Regulation and Regulatory Review detailed, “To the extent feasible and permitted by law, each agency shall afford the public a meaningful oppor- tunity to comment through the Internet on any proposed regulation, with a comment period that should generally be at least 60 days.”60 In 2011, ACUS recommended a minimum comment period of 60 days for “signifi- cant regulatory actions” and 30 days for all other rules.61
D. Definition of “Rule”
The fourth recommendation encourages Congress to clean up the defini- tion of rulemaking throughout the APA to “[c]larify the definition of ‘rule’ by deleting the phrases ‘or particular’ and ‘and future effect’; update the term ‘interpretative rules’ to ‘interpretive rules’; and substitute ‘rulemaking’ for ‘rule making’ throughout the Act.”62
In other words, the statutory definition of “rule” in § 551(4) of the APA would be replaced with the following:
“[R]ule” means the whole or a part of an agency statement of general applicability that interprets, implements or prescribes law or policy or describes the organization, procedure, or practice requirements of an agency and includes the approval or prescription for the future of rates, wages, corporate or financial structures or reorganizations thereof, prices, facilities, appliances, services or allowances therefor or of valuations, costs, or accounting, or practices bearing on any of the foregoing.63
The ABA and ACUS have recommended this definition change since the 1970s to conform the statutory definition of “rule” to its common usage in administrative practice.64
59. See 1981 ABA REPORT, supra note 55, at 785. 60. Exec. Order No. 13,563, 76 Fed. Reg. 3,821, 3,821–22 (Jan. 21, 2011). 61. ACUS Recommendation 2011–2, 76 Fed. Reg. 48,789, 48,791 (Aug. 9, 2011)
(“Agencies should set comment periods that consider the competing interests of promoting optimal public participation while ensuring that the rulemaking is conducted efficiently. As a general matter, for ‘[s]ignificant regulatory action[s]’ as defined in Executive Order 12,866, agencies should use a comment period of at least 60 days. For all other rulemakings, they should generally use a comment period of at least 30 days. When agencies, in appropriate circumstances, set shorter comment periods, they are encouraged to provide an appropriate explanation for doing so.”).
62. ABA Resolution 106B, supra note 8, at 1. 63. ABA ADLAW SECTION REPORT, supra note 45, at 4. 64. See ABA Section of Admin. Law & Regulatory Practice, supra note 9, at 389–91; see
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E. Midnight Rules
Increased regulatory activity near the end of a presidential administra- tion poses unique problems to the modern administrative state. This prob- lem has been coined “midnight regulation,” alluding “to the Cinderella sto- ry in which the magic wears off at the stroke of midnight.”65 The APA presently does not address this newer phenomenon.
ACUS recently studied the issue at length and recommended that an in- coming presidential administration should have statutory authority to delay the effective date of such midnight rules.66 The ABA’s fifth recommenda- tion agrees with ACUS and urges Congress to amend the APA to
[a]uthorize a new presidential administration to (i) delay the effective date of rules finalized but not yet effective at the end of the prior administration while the new administration examines the merits of those rules, and (ii) allow the public to be given the opportunity to comment on whether such rules should be amended, rescinded or further delayed.67
This recommendation modernizes the APA to take account of this grow- ing phenomenon, in order to discourage outgoing presidential administra- tions from engaging in regulatory activities that the incoming administra- tion (and thus arguably the American public) would not support. As Katherine Watts has observed, this type of “soft [regulatory] moratoria” can “help[] to further notions of democratic accountability when used for a brief period of time by the executive branch following a change in admin- istration.”68
also Statement of the Administrative Conference on ABA Resolution No. 1 Proposing to Amend the Definition of “Rule” in the Administrative Procedure Act, 39 Fed. Reg. 4,849, 4,849 (Feb. 7, 1974). This recommendation seems far less important than the other ABA recommendations, but any modernization of the APA might as well improve the wordsmith- ing. But see Ronald M. Levin, The Case for (Finally) Fixing the APA’s Definition of “Rule”, 56 ADMIN. L. REV. 1077, 1077 (2004) (arguing that the APA’s definition of “rule” “may be the most blatantly defective provision in the [APA]” and “is, and always has been, completely out of synch with commonly understood usage.”).
65. Jack M. Beermann, Midnight Rules: A Reform Agenda, 2 MICH. J. ENVTL. & ADMIN. L. 285, 286 (2013); see also id. at 290–300 (documenting phenomenon of midnight regulation in the rulemaking context). See generally Jerry Brito & Veronique de Rugy, Midnight Regulations and Regulatory Review, 61 ADMIN. L. REV. 163 (2009) (documenting growth of midnight rule- making and addressing its problems and potential solutions).
66. ACUS Recommendation 2012–2, 77 Fed. Reg. 47,802, 47,803 (Aug. 10, 2012). 67. ABA Resolution 106B, supra note 8, at 1. 68. Kathryn A. Watts, Regulatory Moratoria, 61 DUKE L.J. 1883, 1888 (2012).
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F. Retrospective Review
The ABA’s sixth recommendation addresses retrospective review. There has been a growing call in recent years—with bipartisan support—to en- courage federal agencies to systematically review existing rules and revise or withdraw old rules when appropriate. For instance, in 2011 President Obama’s “regulatory czar” Cass Sunstein issued a memorandum that en- couraged agencies to engage in such retrospective review.69 Similarly, the Trump Administration’s Executive Order on Reducing Regulation and Controlling Regulatory Costs reinforces the importance of retrospective re- view by instructing agencies that “for every one new regulation issued, at least two prior regulations be identified for elimination.”70 ACUS, moreo- ver, recently conducted an extensive study of retrospective review and is- sued recommendations “intended to provide a framework for cultivating a ‘culture of retrospective review’ within regulatory agencies.”71
Despite broad consensus on the importance of retrospective review, the APA does not address it. The ABA thus recommends that Congress amend the APA to require agencies:
a. When promulgating a major rule, to publish a plan (which would not be subject to judicial review) for assessing experience under the rule that describes (i) information the agency believes will enable it to assess the effectiveness of the rule in accomplishing its objectives, potentially in conjunction with other rules or other program activities, and (ii) how the agency intends to compile such information over time; [and]
b. On a continuing basis, to invite interested persons to submit, by electronic means, suggestions for rules that warrant review and possible modification or repeal.72
The ABA’s recommendation expressly provides that neither of these statutory obligations would be subject to judicial review.73
69. See Memorandum from Cass R. Sunstein, Administrator, Office of Mgmt. & Budg- et, to Heads of Exec. Dep’ts & Agencies (June 14, 2011) https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/memoranda/2011/m11- 25.pdf.
70. Exec. Order No. 13,771, 82 Fed. Reg. 9339 (Jan. 30, 2017). 71. ACUS Recommendation 2014-5, 79 Fed. Reg. 75,114, 75,114 (Dec. 17, 2014). 72. ABA Resolution 106B, supra note 8, at 1–2. 73. Id. at 2. There may well be sound reasons for Congress to consider allowing for
some form of limited judicial review (or presidential review), especially of an agency’s deci- sion not to review a rule identified by the public.
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G. Unified Regulatory Agenda
The seventh recommendation involves codifying parts of the Unified Regulatory Agenda. Executive Order 12,866 establishes the Unified Regu- latory Agenda by requiring federal agencies to submit their planned rule- making activity semiannually to the Office of Information and Regulatory Affairs (OIRA), which then makes the plans available to the public.74 This Unified Regulatory Agenda is a critical resource for the public to under- stand an agency’s regulatory plans for the near future. The APA does not address the Unified Regulatory Agenda.
Accordingly, the ABA recommends that Congress codify Executive Or- der 12,866’s Unified Regulatory Agenda requirements and apply them to all agencies. The ABA, moreover, recommends that Congress codify sev- eral ACUS recommendations regarding the Unified Regulatory Agenda,75 such that the APA
would require each participating agency to (i) maintain a website that contains its regulatory agenda, (ii) update its agenda in real time to reflect concrete actions taken with respect to rules (such as initiation, issuance or withdrawal of a rule or change of contact person), (iii) explain how all rules were resolved rather than removing rules without explanation, (iv) list all active rulemakings, and (v) make reasonable efforts to accurately classify all agenda items.76
The ABA further recommends that Congress amend the APA to require that “[a]ll agencies with rulemaking plans for a given year should also par- ticipate in the annual Regulatory Plan published in the spring Unified Agenda.”77 Similar to the amendments regarding retrospective review, the ABA recommends that these procedural requirements would not be subject to judicial review.78
74. Exec. Order No. 12,866, § 4(b), 58 Fed. Reg. 51,735, 51,738 (Sept. 30, 1993) (“Each agency shall prepare an agenda of all regulations under development or review, at a time and in a manner specified by the Administrator of [the Office of Information and Reg- ulatory Affairs]. The description of each regulatory action shall contain, at a minimum, a regulation identifier number, a brief summary of the action, the legal authority for the ac- tion, any legal deadline for the action, and the name and telephone number of a knowledge- able agency official.”). See generally Cary Coglianese & Daniel E. Walters, Agenda-Setting in the Regulatory State: Theory and Evidence, 68 ADMIN. L. REV. 93 (2016) (documenting the agenda- setting stage of the regulatory process).
75. See ACUS Recommendation 2015-1, 80 Fed. Reg. 36,757, 36,758 (June 26, 2015). 76. ABA Resolution 106B, supra note 8, at 2. 77. Id. 78. Id.
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H. Outmoded Rulemaking Exemptions
The eighth recommendation renews the ABA’s longstanding call to “[r]epeal the exemptions from the notice-and-comment process for ‘pub- lic . . . loans, grants [and] benefits’ and narrow the exemptions for ‘public property [and] contracts’ and for ‘military or foreign affairs functions.’”79 The ACUS has made similar recommendations with respect to these out- dated rulemaking exemptions.80
There is no legitimate reason to shield generally applicable policies re- garding public loans, grants, and benefits from notice-and-comment rule- making.81 Likewise, rules addressing military and foreign affairs functions should be subject to notice-and-comment rulemaking unless they would be exempt as classified information under FOIA.82 As we noted in our Section report to the ABA House of Delegates, this recommendation “that rules in the subject areas of both exemptions must be issued through the normal no- tice-and-comment process would harmonize well with this recommenda- tion’s overall emphasis on promoting public participation and agency ac- countability in rulemaking.”83
I. Post-Promulgation Notice-and-Comment Rulemaking
The final recommendation concerns the troubling growth of interim fi- nal rulemaking. When there is “good cause,” the APA allows federal agen- cies to promulgate a rule without first providing notice and allowing for public comment.84 The APA defines “good cause” as when “notice and
79. Id.; accord 1981 ABA REPORT, supra note 55, at 788–89. 80. See, e.g., ACUS Recommendation 69-8, 38 Fed. Reg. 19,784, 19,785 (1969) (assert-
ing that the removal of statutory exemptions for rules promulgated in relation to “public property, loans, grants, benefits, or contracts” will lead agencies to exercise their rulemaking authority more fairly); ACUS Recommendation 73-5, 39 Fed. Reg. 4847, 4847 (1974) (rec- ommending removal of the rulemaking exemption for military and foreign affairs).
81. See ABA ADLAW SECTION REPORT, supra note 45, at 8–9 (“We fear that the adverse effect of these exemptions will only increase now that the Department of Agriculture (USDA) has revoked its policy—dating back to 1971—of voluntarily employing notice–and- comment in rulemakings that fall within the terms of the former exemption.” (citing 78 Fed. Reg. 64,194 (Oct. 28, 2013))).
82. See 5 U.S.C. § 552(b)(1) (2012) (exempting matters from Freedom of Information Act (FOIA) obligations that are “(A) specifically authorized under criteria established by an Executive order to be kept secret in the interest of national defense or foreign policy and (B) are in fact properly classified pursuant to such Executive order”).
83. ABA ADLAW SECTION REPORT, supra note 45, at 9. 84. 5 U.S.C. § 553(b)(3)(B).
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public procedure thereon are impracticable, unnecessary, or contrary to the public interest.”85
Agency use of this “good cause” exception has risen exponentially in re- cent years. For instance, a 2012 study by the Government Accountability Office found that federal agencies from 2003 through 2010 skipped the no- tice-and-comment process for 35% of “major” rules and 44% of non-major rules.86 Of those major rules issued without notice-and-comment, the agencies engaged in post-promulgation notice-and-comment processes 65% of the time.87
Building on an older ACUS recommendation,88 the ABA recommends that Congress amend the APA to
[r]equire that when an agency promulgates a final rule without notice-and-comment procedure on the basis that such procedure is impracticable or contrary to the public interest, it (i) invite the public to submit post-promulgation comments and (ii) set a target date by which it expects to adopt a successor rule after consideration of the comments received.89
The APA should further require that agencies explain any failures to meet the designated target dates and that “[t]he preamble and rulemaking record accompanying the successor rule should support the lawfulness of the rule as a whole, rather than only the differences between the interim fi- nal rule and the successor rule.”90 Judicial review would not be available as to these new provisions, “but existing judicial remedies for undue delay in rulemaking would be unaffected.”91
85. Id. 86. U.S. GOV’T ACCOUNTABILITY OFFICE, GAO-13-21, FEDERAL RULEMAKING:
AGENCIES COULD TAKE ADDITIONAL STEPS TO RESPOND TO PUBLIC COMMENTS 1, 8 (2012) [hereinafter GAO REPORT]. See generally Kristin Hickman & Mark Thomson, Open Minds and Harmless Errors: Judicial Review of Postpromulgation Notice and Comment, 101 CORNELL L. REV. 261 (2016) (discussing Government Accountability Office (GAO) report and poten- tial solutions).
87. GAO REPORT, supra note 86, at 24–25. 88. See ACUS Recommendation 95–4, 60 Fed. Reg. 43,108, 43,110–13 (1995). 89. ABA Resolution 106B, supra note 8, at 2. 90. Id. 91. Id. As I have argued elsewhere, if the court finds there was no good cause to skip
the notice-and-comment process, there should be a strong presumption of prejudice or per- haps the error should be deemed structural such that no showing of prejudice is required. Walker, supra note 42, at 118–19 & n.75; see also Hickman & Thomson, supra note 86, at 311 (“[A] strong presumption against the validity of postpromulgation notice and comment best respects the balance between an express statutory command for prepromulgation notice and comment and a particularized harmless error rule.”).
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III. REGULATORY ACCOUNTABILITY ACT OF 2017
Since the new Congress arrived in January, we have seen a wide range of legislation introduced to reform the administrative state. Legislation in both the House and the Senate has been introduced to limit the use of set- tlements to force agency regulatory activities,92 to better facilitate congres- sional review of midnight rules,93 and to codify the Trump Administration’s one-in, two-out executive order.94 Similarly, the Regulations from the Ex- ecutive in Need of Scrutiny Act (REINS Act), which would require congres- sional approval via joint resolution of major rules, has been reintroduced in both chambers.95
In January, House Republicans, with five Democrats joining, passed the Regulatory Accountability Act.96 This omnibus legislation contains six sep- arate bills: (1) the All Economic Regulations Are Transparent Act (ALERT Act), which would require agencies to publish online timely information about regulations in development; (2) the Providing Accountability Through Transparency Act, which would require agencies to publish online plain-language summaries of new proposed rules; (3) the Evaluation Before Implementing Executive Wishlists Act (REVIEW Act), which would allow for pre-enforcement judicial review of new billion-dollar rules; (4) the Separation of Powers Restoration Act, which would eliminate Auer and Chevron judicial deference to agency legal interpretations; (5) the Small Business Regulatory Flexibility Improvements Act, which would require agencies to better account for impacts of new regulations on small business-
92. Sunshine for Regulatory Decrees and Settlements Act of 2017, S. 119, 115th Cong. (2017); Sunshine for Regulations and Regulatory Decrees and Settlements Act of 2017, H.R. 469, 115th Cong. (2017).
93. Midnight Rules Relief Act of 2017, S. 34, 115th Cong. (2017); Midnight Rules Re- lief Act of 2017, H.R. 21, 115th Cong. (2017).
94. RED Tape Act of 2017, S. 56, 115th Cong. (2017); One In, One Out Act, H.R. 674, 115th Cong. (2017); see also Exec. Order No. 13,771, § 2, 82 Fed. Reg. 9339 (Jan. 30, 2017).
95. Regulations from the Executive in Need of Scrutiny (REINS) Act of 2017, S. 21, 115th Cong. (2017); REINS Act of 2017, H.R. 26, 115th Cong. (2017). See generally Jona- than H. Adler, Placing “Reins” on Regulations: Assessing the Proposed REINS Act, 16 N.Y.U. J. LEGIS. & PUB. POL’Y 1 (2013); Ronald M. Levin, The REINS Act: Unbridled Impediment to Regu- lation, 83 GEO. WASH. L. REV. 1446 (2015); Jonathan R. Siegel, The REINS Act and the Struggle to Control Agency Rulemaking, 16 N.Y.U. J. LEGIS. & PUB. POL’Y 131 (2013).
96. Roll Call Vote, Regulatory Accountability Act of 2017, H.R. 5, 115th Cong. (Jan. 11, 2017) (listing 223 “yea” votes from Republicans (with another 7 not voting), 5 “yea” votes and 183 “nay” votes from Democrats (with another 6 not voting)), http://clerk.house.gov/evs/2017/roll045.xml.
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es; and (6) the Regulatory Accountability Act, which is further discussed be- low.97 Senate Republicans have introduced companion bills for many of these,98 in addition to a number of other regulatory reform bills.99
This Essay does not attempt to chronicle every regulatory reform bill that has been introduced to date in the 115th Congress. Instead, this Part focuses on the one comprehensive, bipartisan bill to modernize the APA: the Senate version of the Regulatory Accountability Act of 2017.100 Sena- tors Rob Portman (R-OH) and Heidi Heitkamp (D-ND), joined by Sena- tors Orrin Hatch (R-UT) and Joe Manchin (D-WV), introduced this legisla- tion in April.101 The Senate Committee on Homeland Security and Governmental Affairs favorably reported an amended version of the bill out of committee in May.102
This Part proceeds as follows: Part III.A reviews the legislation’s incor- poration of (at least in part) seven of the nine recommendations contained in the ABA’s 2016 resolution. Part III.B details how the legislation would codify rulemaking best practices that all presidents have embraced since the 1980s, whereas Part III.C explores the legislation’s new procedures for ma- jor and high-impact rules. Part III.D details the legislation’s codification of agency guidance procedures, with Part III.E outlining its new agency public advocacy restrictions. Part III.F concludes with a discussion of the legisla- tion’s reforms to the APA’s judicial review standards.
97. These summaries draw on the Congressional Research Service’s bill summary, which is available here: https://www.congress.gov/bill/115th-congress/house-bill/5.
98. See, e.g., Providing Accountability Through Transparency Act of 2017, S. 577, 115th Cong. (2017); Small Business Regulatory Flexibility Improvements Act, S. 584, 115th Cong. (2017); REVIEW Act of 2017, S. 919, 115th Cong. (2017).
99. See, e.g., Better Evaluation of Science and Technology (BEST) Act, S. 578, 115th Cong. (2017) (identifying certain scientific standards for all rulemaking); Early Participation in Regulations Act of 2017, S. 579, 115th Cong. (2017) (requiring agencies to provide ad- vance public notice of proposed rulemaking for major rules); Truth in Regulations Act of 2017, S. 580, 115th Cong. (2017) (establishing certain procedures for agency issuance of guidance documents).
100. Regulatory Accountability Act of 2017, S. 951, 115th Cong. (2017). 101. See Press Release, Senator Rob Portman, Portman, Heitkamp Introduce the Bipar-
tisan Senate Regulatory Accountability Act (Apr. 26, 2017), https://www.portman.senate.gov/public/index.cfm/2017/4/portman-heitkamp-introduce- the-bipartisan-senate-regulatory-accountability-act.
102. See Homeland Security and Governmental Affairs Committee Record, at 2 (May 17, 2017) (noting that S. 951 was “reported favorably by roll call vote (9 Yeas, 5 Nays) as amended by the Portman Substitute Amendment”), https://www.hsgac.senate.gov/hearings/business-meeting-05/17/2017.
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A. Adoption of ABA Recommendations
The Portman–Heitkamp Regulatory Accountability Act of 2017 adopts at least parts of seven of the nine ABA recommendations to modernize the APA discussed in Part II.
First, embracing ABA Recommendation No. 1, the legislation would re- quire agencies to disclose “all studies, models, scientific literature, and other information developed or relied upon by the agency” by the time of publi- cation of the notice of proposed rulemaking.103 It similarly appears to adopt ABA Recommendation No. 2’s record requirement by instructing that these materials “be placed in the docket for the proposed rule and made accessible to the public.”104 Similar disclosure and record docketing requirements would apply to publication of a final rule.105
With respect to a minimum public comment period (ABA Recommen- dation No. 3), the legislation would amend the APA to expressly require a comment period of at least 60 days for regular rules and at least 90 days for “major” and “high-impact” rules.106 The ABA only recommended a 60- day minimum comment period for major rules.107 Importantly, the legisla- tion would include a “good cause” exception to these minimum comment periods when compliance would be “unnecessary, impracticable, or contra- ry to public interest.”108
Regarding ABA Recommendation No. 4, the legislation would not clari- fy the definition of “rule” in the APA or spell “interpretive” correctly, but it would make “rulemaking” one word throughout the APA.109 Hopefully the final version of the legislation, if enacted, will embrace these other word- smithing suggestions.
The Regulatory Accountability Act also tackles the problem of midnight rulemaking (Recommendation No. 5). It would amend § 553 of the APA to add a subsection to address “rules adopted at the end of a presidential ad- ministration”:
(A) IN GENERAL.—During the 60-day period beginning on a transitional inauguration day (as defined in § 3349a), with respect to any final rule that had been placed on file for public inspection by the Office of the Federal Register or published
103. S. 951, § 3 (amending 5 U.S.C. § 553(c)(2)(A) (2012)); cf. supra Part II.A. 104. S. 951, § 3 (amending 5 U.S.C. § 553(c)(2)(A)); cf. supra Part II.B. 105. See S. 951, § 3 (amending 5 U.S.C. § 553(c)(2)(A)). 106. Id. (amending 5 U.S.C. § 553(c)(4)(B)); cf. supra Part II.C. The definition of “high-
impact” rule is discussed in Part III.C. 107. ABA Resolution 106B, supra note 8, at 1. 108. S. 951, § 3 (amending 5 U.S.C. § 553(g)(3)); cf. supra Part II.D. 109. See S. 951, §§ 3–4, 7; cf. supra Part II.D.
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in the Federal Register as of the date of the inauguration, but which had not become effective by the date of the inauguration, the agency issuing the rule may, by order, delay the effective date of the rule for not more than 90 days for the purpose of obtaining public comment on whether—
(i) the rule should be amended or rescinded; or
(ii) the effective date of the rule should be further delayed.
(B) OPPORTUNITY FOR COMMENT.—If an agency delays the effective date of a rule under subparagraph (A), the agency shall give the public not less than 30 days to submit comments.110
As the proposed text indicates, this provision closely tracks the ABA rec- ommendation but would also wisely limit the length of delay to no more than 90 days.
The legislation also addresses retrospective review (ABA Recommenda- tion No. 6). Specifically, it would amend the APA to provide for a right to petition to “give interested persons the right to petition for the issuance, amendment, or repeal of a rule” and to “on a continuing basis, invite inter- ested persons to submit, by electronic means, suggestions for rules that war- rant retrospective review and possible modification or repeal.”111 As fur- ther discussed in Part III.C, the legislation would also require agencies to include in proposed and final major and high-impact rules a framework for assessing the effectiveness of the rule, including identifying a methodology, a plan for data collection, and a specific time frame within a decade of the rule’s publication.112 If the major or high-impact rule remains in place after retrospective review, the legislation would require public notice of the retro- spective review results and ongoing periodic retrospective review.113 Judi- cial review would be limited to whether an agency published the retrospec- tive review framework and completed it on time.114 The legislation also instructs agencies to recommend statutory changes to Congress, where ap- propriate, in light of their retrospective review.115
Finally, the Regulatory Accountability Act addresses the problem of post-promulgation, notice-and-comment rulemaking (ABA Recommenda- tion No. 9) by adding provisions regarding direct final rules and interim fi- nal rules.116 For direct final rules, the legislation would require publication
110. S. 951, § 3 (amending 5 U.S.C. § 553(f)(5)); cf. supra Part II.E. 111. S. 951, § 3 (amending 5 U.S.C. § 553(i)); cf. supra Part II.F. 112. S. 951, § 3 (amending 5 U.S.C. § 553(l)). 113. Id. (amending 5 U.S.C. § 553(l)(2)(C)–(D)). 114. Id. (amending 5 U.S.C. § 553(l)(7)). 115. Id. (amending 5 U.S.C. § 553(l)(6)). 116. Id. (amending 5 U.S.C. § 553(g)(3)); cf. supra Part II.I. The legislation would ex-
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of the text of the final rule with notice of the effective date and establish a comment period of at least 30 days; if “significant adverse comments” are lodged, the agency must withdraw the rule and engage in the normal no- tice-and-comment rulemaking process.117 For interim final rules, the legis- lation would, like the ABA recommends, require a post-promulgation pub- lic comment period. The legislation, moreover, would require the agency within 180 days of publishing the interim final rule to: (1) rescind the inter- im rule; (2) initiate full notice-and-comment rulemaking; or (3) adopt a final rule.118 Failure to act within 180 days would invalidate the rule.119
Which ABA recommendations does the Regulatory Accountability Act not address? First, it does not attempt to codify the Unified Regulatory Agenda (ABA Recommendation No. 7),120 despite, as discussed in Part II.B, codifying a number of other best practices embraced by executive order. Second, it does not rework the outmoded rulemaking exemptions for public loans, grants, and benefits and for military and foreign affairs exceptions (ABA Recommendation No. 8).121 Third, as noted above, it does not im- plement several of the wordsmithing suggestions (ABA Recommendation No. 4).122 Hopefully, Congress will address these ABA recommendations as well, as it deliberates on the Regulatory Accountability Act or via separate bipartisan legislation.
B. Codification of Executive Order 12,866
The Regulatory Accountability Act would codify many of the principles of effective rulemaking that presidents of both parties have developed and implemented since the 1980s.123 In 1981, President Reagan issued Execu- tive Order 12,291, which created procedures by which the Office of Man- agement and Budget (OMB) would review proposed agency regulations to
pressly exempt any rulemaking or guidance “that concerns monetary policy proposed or implemented by the Board of Governors of the Federal Reserve System or the Federal Open Market Committee.” S. 951, § 3 (amending 5 U.S.C. § 553(g)(4)).
117. S. 951, § 3 (amending 5 U.S.C. § 553(g)(3)(B)). 118. Id. (amending 5 U.S.C. § 553(g)(3)(C)(ii)(I)). 119. Id. (amending 5 U.S.C. § 553(g)(3)(C)(ii)(II)). 120. See supra Part II.G. 121. See supra Part II.H. 122. See supra Part II.D. 123. This discussion draws from PAUL ROSE & CHRISTOPHER J. WALKER, THE
IMPORTANCE OF COST-BENEFIT ANALYSIS IN FINANCIAL REGULATION 4–5 (U.S. Chamber of Commerce ed., 2013), https://ssrn.com/abstract=2231314.
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improve the quality and consistency of agency rulemaking.124 President Clinton superseded President Reagan’s order in 1993 with Ex-
ecutive Order 12,866.125 But these best practices remained central in the new order.126 Under Executive Order 12,866, “In deciding whether and how to regulate, agencies should assess all costs and benefits of available regulatory alternatives, including the alternative of not regulating.”127 Like its predecessor, Executive Order 12,866 declares that agencies must per- form economic analysis and choose the regulatory approach that maximiz- es net benefits.128
Over the years, OMB has provided agencies with extensive guidance on performing such cost-benefit analysis, particularly in Circular A–4.129 OMB Circular A–4 identifies three key elements to a sound regulatory analysis: (1) a statement of the need for the proposed regulation; (2) discus- sion of alternative regulatory approaches; and (3) an analysis of both quali- tative and quantitative costs and benefits of the proposed action and the leading alternatives.130 The analysis should attempt to express both benefits and costs in a common measure—monetary units—to facilitate the assess- ment.131 When benefits or costs cannot be quantified in monetary terms, the agency should describe them qualitatively.132 To ensure agencies properly perform cost-benefit analysis and select the most cost-effective regulatory options, the White House (via OIRA, an office within OMB) re- views agency economic analysis before certain proposed regulations— “significant regulatory actions”—take effect.133
President Obama reaffirmed these best practices for agency rulemaking.
124. Exec. Order No. 12,291, 46 Fed. Reg. 13,193 (Feb. 17, 1981). 125. Exec. Order No. 12,866, 58 Fed. Reg. 51,735 (Sept. 30, 1993). 126. See Richard H. Pildes & Cass R. Sunstein, Reinventing the Regulatory State, 62 U. CHI.
L. REV. 1, 6 (1995). 127. Exec. Order No. 12,866, § 1(a), 58 Fed. Reg. 51,735 (Sept. 30, 1993). 128. Id. See generally Peter M. Shane, Political Accountability in a System of Checks and Balanc-
es: The Case of Presidential Review of Rulemaking, 48 ARK. L. REV. 161, 176–78 (1995) (compar- ing the Reagan and Clinton executive orders and concluding that “[t]he Clinton order fo- cuses on a similar mandate, but describes it with greater nuance”).
129. OFFICE OF MGMT. & BUDGET, EXEC. OFFICE OF PRESIDENT, CIRCULAR NO. A–4, REGULATORY ANALYSIS (2003).
130. Id. 131. Id. 132. Id. 133. Exec. Order No. 12,866, § 2(b), (f), 58 Fed. Reg. 51,735, 51,737–38 (Sept. 30,
1993) (noting that normally the review process only covers “significant regulatory actions,” which Executive Order 12,866 variously defines).
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In January 2011, he issued Executive Order 13,563, which reiterated the principles of Executive Order 12,866 and mandated that “each agency must . . . propose or adopt a regulation only upon a reasoned determina- tion that its benefits justify its costs (recognizing that some benefits and costs are difficult to quantify).”134 As Paul Rose and I have noted, “with the bi- partisan support of five presidential administrations, cost-benefit analysis has become an essential aspect of federal regulation.”135
The Regulatory Accountability Act would codify a number of the best practices from these executive orders. For instance, it would require agen- cies when rulemaking to consider “[t]he nature and significance of the problem the agency intends to address with a rule” as well as “[w]hether existing Federal laws or rules have created or contributed to the problem the agency may address with the rule and, if so, whether those Federal laws or rules could be amended or rescinded to address the problem in whole or in part.”136 It would require the agency to consider a “reasonable number of alternatives . . . including substantial alternatives or other responses iden- tified by interested persons.”137 Critically, consideration of three alterna- tives would be deemed presumptively reasonable.138
The legislation would require the agency to provide a summary of these considerations as part of the notice of the proposed rulemaking.139 As not- ed in Part III.A, the agency would have to disclose any information, data, or studies developed or relied on in the agency rulemaking record. For a proposed rule that “rests upon scientific, technical, or economic infor- mation,” moreover, the legislation would require that the agency “propose the rule on the basis of the best reasonably available scientific, technical, or economic information”140—another core principle of Executive Order 12,866.141
134. Exec. Order No. 13,563, 76 Fed. Reg. 3821 (Jan. 18, 2011) (“[E]ach agency is di- rected to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible.”). For an early analysis of President Obama’s approach to cost-benefit analysis, see Helen G. Boutrous, Regulatory Review in the Obama Administration: Cost-Benefit Analysis for Everyone, 62 ADMIN. L. REV. 243, 260–61 (2010).
135. ROSE & WALKER, supra note 123, at 5. 136. Regulatory Accountability Act of 2017, S. 951, § 3, 115th Cong. (2017) (amending
5 U.S.C. § 553(b)(2)–(3) (2012)). 137. Id. (amending 5 U.S.C. § 553(b)(4)). 138. Id. 139. Id. (amending 5 U.S.C. § 553(c)(1)(D)). 140. Id. (amending 5 U.S.C. § 553(c)(3)). 141. Exec. Order No. 12,866, § 1(b)(7), 58 Fed. Reg. 51,735, 51,736 (Sept. 30, 1993)
(“Each agency shall base its decisions on the best reasonably obtainable scientific, technical,
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The Regulatory Accountability Act would further codify OIRA’s role in promoting careful analysis in agency rulemaking. It would charge the OIRA Administrator with establishing guidelines for assessment of agency cost-benefit analysis in rulemaking, including the use of risk assessment.142 Critically, it would codify a proportionality principle for economic analysis in agency rulemaking: “The rigor of the cost-benefit analysis required by the guidelines established [by the OIRA Administrator] shall be commen- surate, as determined by the Administrator, with the economic impact of the rule.”143 The OIRA Administrator would be required to update these guidelines at least once a decade,144 and would also be charged with issuing guidelines to simplify rules145 and to encourage consistency in rulemak- ing.146
In sum, these amendments are welcome and important additions to modernize the APA, essentially codifying the best practices identified by the presidents of both parties over nearly four decades. Agencies should al- ready be engaged in such analysis when regulating, but codification of these principles should encourage smarter and more effective regulation.147 As Jonathan Masur has concluded, “the bill thus represents a significant and positive step in the direction of rational and cost-justified regulation.”148
economic, and other information concerning the need for, and consequences of, the intend- ed regulation.”).
142. S. 951, § 3 (amending 5 U.S.C. § 553(j)(1)(A)); see id. (amending 5 U.S.C. § 553(j)(1)(B)(ii)) (detailing guidelines for risk assessment).
143. Id. (amending 5 U.S.C. § 553(j)(1)(B)(i)). 144. Id. (amending 5 U.S.C. § 553(j)(1)(C)). 145. Id. (amending 5 U.S.C. § 553(j)(2)). 146. Id. (amending 5 U.S.C. § 553(j)(3)). 147. It is worth noting that this bipartisan legislation addresses most of the concerns
raised by the ABA Section of Administrative Law and Regulatory Practice with respect to a 2011 Republican version of the legislation. See ABA Section of Admin. Law & Regulatory Practice, Comments on H.R. 3010, The Regulatory Accountability Act of 2011, 64 ADMIN. L. REV. 619, 625–29, 631–42 (2012) [hereinafter ABA AdLaw Section 2011 Comments]. Although I was not on the Governing Council for the Section at that time and played no role in draft- ing those comments, I agree with my Section colleagues that the better solution would be to harmonize and produce a “net decrease” in “the collective burdens of required analyses” prescribed by the entire statutory scheme, including the APA, the Regulatory Flexibility Act, the Small Business Regulatory Enforcement Fairness Act, the Unfunded Mandates Reform Act, the Paperwork Reduction Act, and the National Environmental Policy Act—to name just a few. Id. at 636–37.
148. Jonathan Masur, The Regulatory Accountability Act, Or: How Progressives Learned to Stop Worrying and Love Cost-Benefit Analysis, YALE J. ON REG.: NOTICE & COMMENT (May 4, 2017), http://yalejreg.com/nc/the-regulatory-accountability-act-or-how-progressives-learned-to-
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Moreover, as Cass Sunstein has observed with praise, the Regulatory Ac- countability Act would require both Executive Branch and so-called “inde- pendent” agencies to follow these rulemaking best practices, whereas the Executive Orders currently do not apply to independent agencies.149
C. Procedures for Major and High-Impact Rules
The headline-grabbing part of the Regulatory Accountability Act con- cerns its delineation between regular rules and “major”/“high-impact” rules, and the accompanying more rigorous proceedings for the latter cate- gory.150 The APA standards for regular rules would remain basically the same, except for the economic analysis provisions discussed in Part III.B and the scope of judicial review discussed in Part III.F. But the legislation would change the APA procedures substantially for major and high-impact rules.
The legislation would amend the APA to define “high-impact rule” to include “any rule that the [OIRA] Administrator determines is likely to cause an annual effect on the economy of $1,000,000,000 or more.”151 Similarly, the legislation would define “major rule” as any rule the OIRA Administrator determines “is likely to cause”: (1) “an annual effect on the
stop-worrying-and-love-cost-benefit-analysis-by-jonathan-masur/. 149. Cass Sunstein, A Regulatory Reform Bill That Everyone Should Like, BLOOMBERG VIEW
(June 22, 2017, 8:30 AM), https://www.bloomberg.com/view/articles/2017-06-22/a- regulatory-reform-bill-that-everyone-should-like (“But executive orders do not apply to the ‘independent’ agencies, such as the Federal Trade Commission, the Securities and Ex- change Commission and the Federal Communications Commission. And if the goal is en- during reform, legislation is the best way to go.”). Paul Rose and I have argued elsewhere that embedding principles of cost-benefit analysis in notice-and-comment rulemaking may also reduce the risk of agency capture. See Paul Rose & Christopher J. Walker, Dodd-Frank Regulators, Cost-Benefit Analysis, and Agency Capture, 66 STAN. L. REV. ONLINE 9, 14–16 (2013).
150. See, e.g., Michael F. Jacobson, “Regulatory Accountability Act” is Biggest Threat to Con- sumer Safety Pending in Congress, CTR. FOR SCI. IN THE PUB. INTEREST (Mar. 13, 2017), https://cspinet.org/news/%E2%80%9Cregulatory-accountability-act%E2%80%9D- biggest-threat-consumer-safety-pending-congress-20170313 (“The so-called Regulatory Ac- countability Act would threaten every existing and future law protecting consumers from unsafe food, dirty water and air, dangerous toys, toxic chemicals, and so on.”); Martha Rob- erts, The Misguided Regulatory Accountability Act, REG. REV. (Mar. 29, 2017), https://www.theregreview.org/2017/03/29/roberts-misguided-regulatory-accountability- act/ (“By tying up essential safeguards in enormous amounts of red tape, the legislation would covertly undermine longstanding protections for child safety, food safety, auto safety, and other broadly shared values.”).
151. S. 951, § 2 (amending 5 U.S.C. § 551(16) (2012)).
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economy of $100,000,000 or more”; (2) “a major increase in costs or prices for consumers, individual industries, Federal, State, local, or tribal govern- ment agencies, or geographic regions”; or (3) “significant adverse effects on competition, employment, investment, productivity, or the ability of United States-based enterprises to compete with foreign-based enterprises in do- mestic and export markets.”152 The definition of “major rule” embraces the “major rule” definition in the Congressional Review Act,153 and it is similar to, though narrower than, Executive Order 12,866’s definition of a “significant regulatory action.”154 The definition of both the high-impact rule and major rule, however, would include an adjustment for inflation every five years.155
The U.S. Chamber of Commerce, which strongly supports the legisla- tion, reports that, of the 32,882 final rules issued between 2008 and 2016, only twenty-eight rules would have been characterized as “high-impact” one-billion-dollar rules and another 112 final rules would have been char- acterized as major rules per the hundred-million-dollar criteria.156 Accord- ingly, the Chamber argues that less than 0.5% of final rules would be sub- ject to the Regulatory Accountability Act’s more rigorous procedures.157 In
152. Id. (amending 5 U.S.C. § 551(18)). 153. See 5 U.S.C. § 804(2) (2012). 154. See Exec. Order No. 12,866, § 3(f), 58 Fed. Reg. 51,735, 51,738 (Sept. 30, 1993)
(“‘Significant regulatory action’ means any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in this Executive order.”).
155. S. 951, § 2 (amending 5 U.S.C. § 551(16)) (noting that the monetary threshold for a “high-impact rule” is “adjusted once every 5 years to reflect increases in the Consumer Price Index for All Urban Consumers, as published by the Bureau of Labor Statistics of the Department of Labor”); accord id. (amending 5 U.S.C. § 551(18)) (noting the same for major rules).
156. See William Kovacs, Why Senators Portman’s and Heitkamp’s Regulatory Accountability Act Will Make History, U.S. CHAMBER OF COMMERCE: ABOVE THE FOLD (Apr. 28, 2017, 11:30 AM), https://www.uschamber.com/above-the-fold/why-senators-portman-s-and-heitkamp- s-regulatory-accountability-act-will-make-history (citing U.S. CHAMBER OF COMMERCE, TAMING THE ADMINISTRATIVE STATE: IDENTIFYING REGULATIONS THAT IMPACT JOBS AND THE ECONOMY (2017)).
157. Another 3,121 final rules with less than a one-million-dollar impact were classified
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other words, the Chamber argues, “the genius of the R[egulatory] A[ccountability] A[ct] is that it leaves in place the parts of the regulatory system that keep the proverbial trains running on time while requiring agencies to do more homework on the most costly and transformational rules.”158
So what are these additional procedures? First, unless contrary to the existing law,159 for major and high-impact rules the agency must provide advance notice of its intention to initiate rulemaking, establish a publicly available electronic docket, and allow for public comment concerning po- tential regulatory approaches.160 The agency must publish a timetable for the rulemaking process and must report to Congress and OMB if it fails to meet this timetable.161
as a “significant regulatory action” under Executive Order 12,866. Id. Some of these per- haps would be considered a “major” rule under the Regulatory Accountability Act. Cf. Ex- ec. Order No. 12,866, § 3(f), 58 Fed. Reg. 51,735, 51,738 (Sept. 30, 1993) (defining “signifi- cant regulatory action” to include “major rule” but to also encompass a much broader swath of agency rules).
158. Kovacs, supra note 156. 159. Importantly, the legislation would not amend the APA to trump rulemaking pro-
cedures in other statutes that conflict with the new APA procedures. Instead, “the require- ment or prohibition, as applicable, in that other Federal Law shall apply to the agency in the rulemaking.” S. 951, § 3 (amending 5 U.S.C. § 553(g)). This “saving clause” addresses yet another of the major concerns the ABA Section of Administrative Law and Regulatory Pro- cess had with prior versions of this legislation. See ABA AdLaw Section 2011 Comments, supra note 147, at 639–43.
160. S. 951, § 3 (amending 5 U.S.C. § 553(d) (2012)). Similarly, if the agency needs to reclassify a regular rule as a major or high-impact rule, it must provide public notice and allow for comment. See id. (amending 5 U.S.C. § 553(c)(5)). Despite recognizing the value of “extensive pre-notice exchanges of views and information to assist the agency in the devel- opment of a realistic and workable rulemaking proposal,” the ABA Section of Administra- tive Law and Regulatory Practice objected to a blanket advanced notice requirement for major and high-impact rules in a prior version of this legislation because there may be in- stances where such advanced notice would be inappropriate. ABA AdLaw Section 2011 Comments, supra note 147, at 643–46 (quoting 106 A.B.A. ANN. REP. 549, 789–90 (1981)). These concerns seem overstated as to the current version of the legislation, as the good cause exception, discussed in Part III.A, applies to the advance notice provisions as well when the agency determines such advance notice would be “unnecessary, impracticable, or contrary to the public interests” and the agency includes a “brief statement with respect to the reasons for that finding in the final rule or interim final rule.” S. 951, § 3 (amending 5 U.S.C. § 553(g)(3)).
161. S. 951, § 3 (amending 5 U.S.C. § 553(d)(4)). If the agency determines not to issue a major or high-impact rule after providing notice, it must provide a notice of determination
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As for the proposed rule itself, the agency must engage in a rigorous quantitative and qualitative cost-benefit analysis of the proposed rule and the identified reasonable alternatives.162 The notice of proposed rulemak- ing must include this analysis.163 Moreover, the agency generally must “adopt the most cost-effective rule that—(i) is considered under subsection (b)(4) [the proposed rule and reasonable alternatives]; and (ii) meets rele- vant statutory objectives.”164 The agency would be able to adopt a more costly rule if “the additional benefits of the more costly rule justify the addi- tional costs,” “the agency specifically identifies each additional bene- fit . . . and the cost of each such additional benefit,” and “the agency ex- plains why the agency adopted a rule that is more costly than the most cost- effective alternative.”165
Perhaps the most controversial provisions for high-impact rules and cer- tain major rules concern the availability of a public hearing.166 The Regula- tory Accountability Act would amend the APA to allow interested individu- als to petition for a public hearing and require the agency to include in the rulemaking record an explanation for any denial of such petition.167 For high-impact rules (i.e., greater than one billion dollars), the agency must grant a petition for a public hearing unless there is no genuine dispute as to factual issues.168 For qualifying major rules (i.e., greater than one hundred million dollars), however, the agency has broader authority to deny the pe- tition if the hearing “would not advance the consideration of the proposed rule by the agency” or “would, in light of the need of agency action, unrea- sonably delay the completion of the rulemaking.”169
The public hearing would be limited to the disputed factual issues raised in the granted petition(s), as well as other factual issues the agency so desig- nates.170 The following procedures are outlined in the legislation: (1) the
of other agency course. Id. (amending 5 U.S.C. § 553(d)(5)). 162. Id. (amending 5 U.S.C. § 553(b)(5)). 163. Id. (amending 5 U.S.C. § 553(c)(1)(e)). 164. Id. (amending 5 U.S.C. § 553(f)(1)(a)). 165. Id. (amending 5 U.S.C. § 553(f)(1)(b)). 166. Unlike the other provisions that would apply to all major and high-impact rules,
the only major rules subject to this public hearing provision would be one-million-dollar rules, not rules that have a lesser economic impact but would otherwise qualify as a major rule under the Congressional Review Act definition. See id. (amending 5 U.S.C. § 553(e)(1)(C)(i)).
167. Id. (amending 5 U.S.C. § 553(e)). 168. Id. (amending 5 U.S.C. § 553(e)(1)(B)(ii)). 169. Id. (amending 5 U.S.C. § 553(e)(1)(C)(ii)). 170. Id. (amending 5 U.S.C. § 553(e)(3)(A)).
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burden of proof would be on the rule’s proponent; (2) evidence would be admitted unless the agency determines it is “immaterial or unduly repeti- tious evidence”; (3) an agency official would preside over the hearing, there would be a reasonable and adequate opportunity for cross-examination; and (4) a full record of the hearing would be maintained.171
If this process sounds somewhat familiar, that is because it is a slimmed- down version of formal rulemaking—a procedural device that still exists on the books yet has virtually disappeared in administrative practice.172 It is also a procedure that has been widely criticized. For instance, in a report to Congress commenting on the 2011 Republican version of the Regulatory Accountability Act, the ABA Section of Administrative Law and Regulato- ry Practice colorfully noted that “we have not identified a single scholarly article written in the past thirty years that expresses regret about the retreat from formal rulemaking.”173
The Section further explained that formal rulemaking has died “because experience has shown that it leads to substantial delays and unproductive confrontation and because courtroom methods are not generally suited to resolution of legislative-type issues.”174 For many of the reasons Aaron Nielson advances in his subsequent defense of formal rulemaking,175 I am not as convinced as my Section colleagues regarding the fatal flaws of for- mal rulemaking. To be sure, there are substantial costs in terms of re- sources and time. But, as Professor Nielson argued, “formal rulemaking has powerful benefits too, including the potential to uproot an agency’s faulty assumptions and increase the public’s confidence in the regulatory process.”176
More to the point, the Portman–Heitkamp Regulatory Accountability Act is more narrowly tailored than prior Republican versions of the legisla- tion that would have applied the formal rulemaking provisions to major
171. See id. (amending 5 U.S.C. § 553(e)(3)(B)–(C)). 172. See 5 U.S.C. §§ 556–57 (2012) (setting forth the APA’s formal rulemaking and ad-
judication proceedings). As others have explored, the Supreme Court essentially killed for- mal rulemaking in United States v. Florida East Coast Ry. Co., 410 U.S. 224, 237–240 (1973). See, e.g., Kent Barnett, How the Supreme Court Derailed Formal Rulemaking, 85 GEO. WASH. L. REV. ARGUENDO 1, 5–10 (2017); Aaron L. Nielson, In Defense of Formal Rulemaking, 75 OHIO ST. L.J. 237, 247–53 (2014).
173. ABA AdLaw Section 2011 Comments, supra note 147, at 651. But see Nielson, su- pra note 172, at 240 (arguing that “[t]he time has come for the scholarly discussion to be re- opened”).
174. ABA AdLaw Section 2011 Comments, supra note 147, at 626. 175. See Nielson, supra note 172, at 259–89. 176. Id. at 292.
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rules. This bipartisan legislation requires a public hearing only for a subset of disputed factual issues with respect to the costliest rules (with an econom- ic impact of at least one hundred million dollars), and even then provides the agency with substantial discretion for rules with an economic impact less than one billion dollars. Indeed, this legislation appears to be even nar- rower than recommendations the ABA and ACUS made decades ago.177 The current legislation, moreover, arguably meets the ABA’s 2011 call for “a carefully limited framework for oral proceedings where a need for cross- examination on specified narrow issues is affirmatively shown.”178
In sum, some critics will no doubt bemoan the major/high-impact rule provisions in the Regulatory Accountability Act for, among other things, being a foolish return to formal rulemaking.179 Reasonable minds can disa- gree on whether the legislation strikes the right balance between expediency and efficiency, on the one hand, and accountability and effectiveness, on the other. But such criticisms may be overstated for four main reasons.
First, if we are going to make federal agencies more transparent and publicly accountable for their regulatory activities, it makes sense to draw a
177. See 1981 ABA REPORT, supra note 55, at 785 (recommending oral proceeding with cross-examination “only to the extent that it appears, after consideration of other available procedures including oral and written rebuttal, that such cross-examination is essential to resolution by the agency of issues of specific fact critical to the rule”); ACUS Recommenda- tion 72–5, 38 Fed. Reg. 19,782, 19,792 (July 23, 1973) (recommending that Congress by statute “may appropriately require opportunity for oral argument, agency consultation with an advisory committee, or trial-type hearings on issues of specific fact”).
178. ABA AdLaw Section 2011 Comments, supra note 147, at 626. But ABA Section of Admin. Law & Regulatory Practice, Comments on S. 1029, The Regulatory Accountability Act of 2013, at 5–6, 9–11 (Dec. 16, 2014) [hereinafter ABA AdLaw Section 2013 Com- ments], https://www.americanbar.org/content/dam/aba/administrative/administrative_la w/s_1029_comments_dec_2014.authcheckdam.pdf (continuing to express concerns about some aspects of the public hearing provisions of the 2013 bill, which is more similar to the 2017 bipartisan bill than the 2011 bill).
179. See, e.g., Richard J. Pierce, Jr., A Good Effort, with One Glaring Flaw, REG. REV. (May 8, 2017), https://www.theregreview.org/2017/05/08/pierce-good-effort-glaring-flaw/ (crit- icizing the Regulatory Accountability Act’s public hearing provisions); William Funk, Requir- ing Formal Rulemaking Is a Thinly Veiled Attempt to Halt Regulation, REG. REV. (May 18, 2017), https://www.theregreview.org/2017/05/18/funk-formal-rulemaking-halt-regulation/ (re- sponding to Barnett infra). But see Kent Barnett, Looking More Closely at the Platypus of Formal Rulemaking, REG. REV. (May 11, 2017), https://www.theregreview.org/2017/05/11/ barnett-platypus-formal-rulemaking/ (responding to Pierce supra); Kent Barnett, Giving the Platypus of Formal Rulemaking a Second Look, Again, REG. REV. (June 5, 2017), https://www.theregreview.org/2017/06/05/barnett-platypus-formal-rulemaking-again/ (responding to Funk supra).
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line between highest-impact rules (the top half percent of regulations) and the regular rules—only requiring agencies to be more deliberate for the highest-impact rules. Second, aside from the public hearing requirement, OIRA/OMB already require Executive Branch agencies to engage in these good governance activities—i.e., rigorous cost-benefit analysis per OMB Circular A-4. The proposed legislation merely codifies many of these best practices, and such procedures would apply to both high-impact regulation and deregulation alike.
Third, the public hearing requirement is not a return to full-fledged for- mal rulemaking. It is more narrowly tailored to be available upon request for the highest-impact rules, and then only for issues of disputed fact. Final- ly, this legislation comes at a time when some on the right would prefer fewer procedural hurdles to a “deconstruction of the administrative state.”180 Republicans control both chambers of Congress and, more im- portantly, the White House. Republicans are thus well positioned to roll back many of the Obama Administration’s regulations with which they dis- agree on policy grounds. The Regulatory Accountability Act, however, makes no distinction between regulation and deregulation. If this legisla- tion would make it harder and more time intensive for agencies to regulate, the same would be true of efforts to deregulate.181
D. Codification of Agency Guidance
One of the hottest topics in administrative law today is agency use of guidance documents. Critics of agency guidance have colorfully labeled it “regulatory dark matter.”182 The APA presently does not extensively ad-
180. See, e.g., Philip Rucker & Robert Costa, Bannon Vows a Daily Fight for “Deconstruction of the Administrative State”, WASH. POST, Feb. 23, 2017, http://wapo.st/ 2lL8zRW?tid=ss_tw&utm_term=.f2558b57634c.
181. I elaborate on this final point in Walker, supra note 7; accord Masur, supra note 148 (“Most importantly, progressives must realize that these new requirements would apply to de- regulation just as much as they do to new regulation. If an agency were to deregulate—if, for in- stance, the EPA were to reverse President Obama’s Clean Power Plan—that deregulatory act would require a new major rulemaking.”).
182. See, e.g., CLYDE WAYNE CREWS, JR., MAPPING WASHINGTON’S LAWLESSNESS 2016: A PRELIMINARY INVENTORY OF “REGULATORY DARK MATTER” 1, 27 (2015); Hester Peirce, Backdoor and Backroom Regulation, HILL (Nov. 10, 2014, 6:30 AM), http://thehill.com/blogs/pundits-blog/finance/223472-backdoor-and-backroom- regulation (“Too often, however, agencies opt for short-cuts. Rather than bothering with the burdensome rule-making process, they use faster and more flexible means [i.e., agency guidance] of imposing mandates.”). But see Connor N. Raso, Note, Strategic or Sincere? Analyz-
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dress agency guidance, other than to exempt “interpretative rules, general statements of policy, [and] rules of agency organization, procedure, or practice” from the APA’s rulemaking provisions.183
The Regulatory Accountability Act would amend the APA to better ad- dress agency use of guidance documents. It would define “guidance” as “an agency statement of general applicability that—(A) is not intended to have the force and effect of law; and (B) sets forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statutory or regulato- ry issue.”184 It would further define “major guidance” as any guidance that would meet the definition of a “major” rule in terms of economic impact or other economic significance.185
The legislation would require agencies to make guidance publicly avail- able and to note that it is not legally binding and cannot “be used by the agency to foreclose consideration of issues as to which the guidance ex- presses a conclusion.”186 The legislation would also require agencies to fol- low certain procedures for major guidance, and to confer with the OIRA Administrator with respect to such major guidance.187 As discussed in Part III.F, the legislation would also eliminate Auer deference for agency regula- tory interpretations in guidance documents, instead instructing courts to re- view such interpretations under the less-deferential Skidmore standard.
Much more work needs to be done to address agency guidance, includ- ing more extensive empirical analysis, before effective policy reforms can take place. But the legislation’s express recognition of agency guidance in the APA and the delineation between regular and major guidance are im- portant first steps to address the rise of guidance in agency policymaking. As Cass Sunstein further explains, “Guidance documents are often issued without any serious analysis of their impact. By requiring agencies to ana- lyze the costs and benefits of the most burdensome guidance documents, and to show that the benefits justify the costs, the [Regulatory Accountabil-
ing Agency Use of Guidance Documents, 119 YALE L.J. 782, 787 (2010) (“Analysis of this data sug- gests that agencies do not frequently abuse guidance documents to avoid issuing significant legislative rules. Concern over agency abuse of guidance documents has therefore been overstated in both the policy world and the administrative law literature.”).
183. 5 U.S.C. § 553(b)(A) (2012). See generally Ronald M. Levin, Rulemaking and the Guid- ance Exemption (Wash. U. of St. Louis Legal Studies Working Paper No. 17-04-05, 2017), https://ssrn.com/abstract=2958267.
184. Regulatory Accountability Act of 2017, S. 951, § 2, 115th Cong. (2017) (amending 5 U.S.C. § 551(15) (2012)).
185. See id. (amending 5 U.S.C. § 551(17)). 186. See id. § 3 (amending 5 U.S.C. § 553(k)(1)). 187. See id. (amending 5 U.S.C. § 553(k)(2)).
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ity Act] would reduce that problem.”188
E. Agency Public Advocacy Restrictions
As Elizabeth Porter and Kathryn Watts have recently chronicled, federal agencies have begun to utilize social media and other channels to explain and promote their preferred regulatory outcomes during the public com- ment period on a proposed rule.189 Porter and Watts argue that “visual rulemaking” has the potential to increase transparency, public participa- tion, and thus democratic accountability in the rulemaking process, but that it also risks introducing distorting, anti-democratic effects.
Perhaps to address these concerns of undue agency influence during the public participation stage of rulemaking, the Regulatory Accountability Act would prohibit certain advocacy activities by the agency, any individuals speaking in an official capacity on behalf of the agency, and any person who receives federal funding from the agency (from using that federal fund- ing in such communications) after the notice of proposed rulemaking.190 In particular, it would prohibit those actors from engaging in certain commu- nications during the comment period “through written, oral, electronic, or other means, to the public with respect to the proposed rule.”191 Prohibited communications include any that (1) “directly advocates, in support of or against the proposed rule, for the submission of information that will form part of the record for the proposed rule”; (2) “appeals to the public, or solic- its a third party, to undertake advocacy in support of or against the pro- posed rule”; or (3) “is directly or indirectly for the purpose of publicity or propaganda within the United States in a manner that Congress has not authorized.”192
Importantly, the legislation would exempt “a communication that re- quests comments on, or provides information regarding, a proposed rule in an impartial manner.”193 Similarly, as quoted above, this advocacy re- striction on persons receiving federal funding applies only to the use of that federal funding for such communication activities, not to the use of other
188. Sunstein, supra note 149. 189. See Elizabeth G. Porter & Kathryn A. Watts, Visual Rulemaking, 91 N.Y.U. L. REV.
1183, 1198–1230 (2016) (documenting the rise of visual rulemaking). 190. S. 951, § 3 (amending 5 U.S.C. § 553(c)(6)). 191. Id. (amending 5 U.S.C. § 553(c)(6)(A)). 192. Id. 193. Id. (amending 5 U.S.C. § 553(c)(6)(B)).
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funding to engage in such communications during the public comment pe- riod.194
At least one scholar has criticized this provision, fearing that it will result in “proposed rules going undefended from attack from increasingly sophis- ticated ‘propaganda’ campaigns initiated by certain limited segments of the general public.”195 These fears seem misplaced. The agency gets the first word in its notice of proposed rulemaking and the final word in its final rule (subject to judicial review or congressional override). The public comment period is—as the term suggests—for the public, not the agency, to provide its input on the proposed rule. The agency can and should combat “in- creasingly sophisticated ‘propaganda’ campaigns” with facts, data, logic, and policy justifications in its final rule.
F. Scope of Judicial Review
Finally, the Regulatory Accountability Act would make a number of im- portant improvements to the judicial provisions of the APA.
First, it would codify the administrative common law doctrine of remand without vacatur, which allows an agency rule to remain in effect on judicial remand.196 In particular, it would amend § 706 of the APA to allow the court not just to “set aside” an agency action, but also to, “when appropri- ate, remand a matter to an agency without setting [it] aside.”197 Most scholars agree that remand without vacatur should be allowed in some cir- cumstances, but there is greater debate about when such remand is appro- priate.198 At least now courts will further develop the doctrine’s propriety based on an APA statutory provision rather than administrative common law.
Second, a fair amount of ink has been spilled figuring out what the APA’s “substantial evidence” review entails and how that standard differs from the APA’s arbitrary and capricious review standard.199 The Regulato-
194. Id. (amending 5 U.S.C. § 553(c)(6)(A)). 195. Daniel E. Walters, Ditch the Flawed Legislative Proposal to Police Agency Communications,
REG. REV. (May 10, 2017), https://www.theregreview.org/2017/05/10/walters-proposal- agency-communications/.
196. See Richard J. Pierce, Jr., Seven Ways to Deossify Agency Rulemaking, 47 ADMIN. L. REV. 59, 75 (1995) (defining remand without vacatur).
197. S. 951, § 4 (amending 5 U.S.C. § 706(a)(2) (2012)). 198. See, e.g., STEPHANIE J. TATHAM, THE UNUSUAL REMEDY OF REMAND WITHOUT
VACATUR (Admin. Conf. of U.S. ed., 2014); Ronald M. Levin, “Vacation” at Sea: Judicial Rem- edies and Equitable Discretion in Administrative Law, 53 DUKE L.J. 291 (2003).
199. See, e.g., Henry J. Friendly, “Some Kind of Hearing”, 123 U. PA. L. REV. 1267, 1313
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ry Accountability Act would finally provide a statutory definition for “sub- stantial evidence”: “such relevant evidence as a reasonable mind might ac- cept as adequate to support a conclusion in light of the record considered as a whole.”200 In other words, the legislation would codify the definition pro- vided by the Supreme Court in Universal Camera Corp. v. NLRB.201 Hopefully this definition will help clarify matters, though I fear courts will continue to struggle to distinguish between substantial evidence and arbitrary and ca- pricious review.202 The legislation would extend the substantial evidence standard beyond formal rulemaking and adjudication to also cover review of high-impact, one-billion-dollar rules (though not major rules).203
Third, although the legislation would leave unchanged the APA’s arbi- trary and capricious standard of review in § 706, other provisions in the Regulatory Accountability Act suggest that the amended APA would fur- ther embrace “hard look” review. Hard look review, as the Court instruct- ed in Motor Vehicle Manufacturers Ass’n v. State Farm Mutual Automobile Insur- ance,204 requires reasoned decisionmaking:
[A]n agency rule would be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs
(1975) (noting that “the degree of difference between the substantial evidence test and the arbitrary and capricious test can readily be exaggerated”); Matthew J. McGrath, Note, Con- vergence of the Substantial Evidence and Arbitrary and Capricious Standards of Review During Informal Rulemaking, 54 GEO. WASH. L. REV. 541, 543 (1986) (“This convergence theory contradicts a large body of established case law, and requires a new look at the relationship between the two standards of review.”); Pedersen, supra note 56, at 48–49 (“The invitation to make a searching and careful inquiry into the facts also has been enthusiastically accepted. The re- sult has been to transform the arbitrary or capricious test into something very close to sub- stantial evidence review.”).
200. S. 951, § 5 (amending 5 U.S.C. § 701(b)(4)). 201. 340 U.S. 474, 477 (1951) (“[S]ubstantial evidence is more than a mere scintilla. It
means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”) (internal quotation marks omitted).
202. See, e.g., ABA AdLaw Section 2011 Comments, supra note 147, at 670 (“The main problem with the apparent goal of the bill is that the case law has generally abandoned the assumption that substantial evidence review is a ‘slightly higher standard’ than arbitrary- capricious review.”).
203. S. 951, § 4 (amending 5 U.S.C. § 706(a)(3)). Relatedly, the legislation would pre- clude judicial review of determinations of whether a rule is a “major” rule. Id. (amending 5 U.S.C. § 706(c)).
204. 463 U.S. 29 (1983).
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counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.205
For instance, the legislation would require the agency to consider wheth- er “existing Federal laws or rules have created or contributed to the prob- lem”;206 to assess “[a] reasonable number of alternatives [with three alter- natives being presumptively reasonable] . . . , including substantial alternatives or other responses identified by interested persons”;207 to pub- licly disclose “all studies, models, scientific literature, and other information developed or relied upon by the agency”;208 and to rely on, when applica- ble, “the best reasonably available scientific, technical, or economic infor- mation.”209 To be sure, judicial review of an agency’s full-fledged cost- benefit analysis would be limited to major and high-impact rules.210 But these other provisions would provide a firmer statutory foundation for as- sessing whether the agency has acted in an arbitrary and capricious manner by failing to engage in reasoned decisionmaking.
Fourth, the legislation addresses judicial review of agency guidance and agency interpretations of its own rules that are contained in such guidance. As a preliminary matter, the legislation would amend the APA to constrain judicial review of “[a]gency guidance that does not interpret a statute or rule” to whether it was issued “without observance of procedure required by law.”211 The more significant change concerns agency interpretations of their own rules. The legislation would add to the end of Section 706 of the APA the following provision:
The weight that a reviewing court gives to an interpretation by an agency of a rule of that agency shall depend on the thoroughness evident in the consideration of the rule by the agency, the validity of the reasoning of the agency, and the consistency of the interpretation with earlier and later pronouncements.212
In other words, the legislation would basically codify Skidmore deference213
205. Id. at 43. 206. S. 951, § 3 (amending 5 U.S.C. § 553(b)(3)). 207. Id. (amending 5 U.S.C. § 553(b)(4)). 208. Id. (amending 5 U.S.C. § 553(c)(2)). 209. Id. (amending 5 U.S.C. § 553(c)(3)). 210. Id. (amending 5 U.S.C. § 553(b)(5)). 211. Id. § 4 (amending 5 U.S.C. § 706(d) (2012)) (citing 5 U.S.C. § 706(2)(d)); see also 5
U.S.C. § 706(2)(d) (providing judicial review regarding whether the agency action is “without observance of procedure required by law”).
212. S. 951, § 4 (amending 5 U.S.C. § 706(e)). 213. See Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944) (instructing courts to accord
“weight” to an agency legal interpretation under Skidmore based “upon the thoroughness evi- dent in its consideration, the validity of its reasoning, its consistency with earlier and later
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in place of the controlling administrative common law of Auer (or Seminole Rock) deference.214
As I have explored elsewhere, there has been a growing call for Con- gress—or the Supreme Court—to eliminate both Chevron and Skidmore def- erence.215 For instance, Senate Republicans in the last Congress intro- duced the Separation of Powers Restoration Act, which would have amended the APA to eliminate these deference doctrines in favor of de no- vo review.216 As discussed at the outset of this Part, the House Republicans in this Congress passed that bill again as part of its omnibus Regulatory Ac- countability Act.217
The Portman–Heitkamp Regulatory Accountability Act is much nar- rower than its House counterpart.218 It would not disrupt Chevron defer- ence—the bedrock doctrine that courts should defer to an agency’s reason- able interpretation of an ambiguous statute the agency administers.219
pronouncements, and all those factors which give it power to persuade, if lacking power to control”). As Kent Barnett has chronicled, this is not the first time Congress has codified Skidmore deference. See Kent Barnett, Codifying Chevmore, 90 N.Y.U. L. REV. 1, 14–15 (2015). Interestingly, the legislation excludes Skidmore’s final language: “and all those factors which give it power to persuade, if lacking power to control.” It is unclear whether this is an intentional omission meant to signify a somewhat less-deferential standard of review than Skidmore itself; cf. ABA AdLaw Section 2013 Comments, supra note 178 (“We believe the adoption of multiple incarnations of the Skidmore test may prompt confusion as to whether they have independent meanings or the same meaning as the evolving interpretations of Skidmore. Surely the world does not need a ‘rule interpretation Skidmore’ that is different from the ‘statutory interpretation Skidmore.’”).
214. See Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414 (1945) (instructing courts that an agency’s interpretation of its own regulation is given “controlling weight un- less it is plainly erroneous or inconsistent with the regulation”); accord Auer v. Robbins, 519 U.S. 452, 461 (1997).
215. See Walker, supra note 39 (providing literature review of attacks on both deference doctrines).
216. See Separation of Powers Restoration Act, S. 2724, § 2, 114th Cong. (2016); see also Christopher J. Walker, Courts Regulating the Regulators, REGBLOG (Apr. 25, 2016), http://www.regblog.org/2016/04/25/walker-courts-regulating-the-regulators/ (examining how the Separation of Powers Restoration Act is an outgrowth of recent Supreme Court criticism of Chevron deference).
217. See Regulatory Accountability Act of 2017, H.R. 5, Title II, 115th Cong. (Jan. 12, 2017).
218. Cf. id. Title II, § 202 (directing that courts review de novo all agency interpreta- tions of law, thus eliminating both Chevron and Auer deference).
219. Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842–43 (1984).
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Second, it would not replace Auer deference with de novo review, but in- stead still command courts to review under the Skidmore deference stand- ard.220 To provide some additional context, Kent Barnett and I just con- cluded our review of every published circuit court decision that cites Chevron deference from 2003 through 2013. We found that the agency won 77.4% of the time when courts applied the Chevron framework compared to 56% under Skidmore deference, and 38.5% under de novo review.221 In other words, agencies will likely prevail less often under Skidmore than Auer, but still much more often than under de novo review.222
The propriety of Auer deference has been the subject of extensive debate of late. For instance, last year the Yale Journal on Regulation hosted an online blog symposium, which collected over two dozen different perspectives on Auer deference.223 As that symposium nicely illustrates, there are reasonable arguments on both sides of the Auer debate. The Regulatory Accountability Act would chart a middle ground of replacing Auer with Skidmore deference. For reasons that exceed the ambitions of this short Essay, I believe it is an important move in the right direction to recalibrate agency use of guidance documents in lieu of notice-and-comment rulemaking.224
220. A number of scholars have similarly recommended that Auer be replaced with Skidmore. See, e.g., Kent Barnett, Why Bias Challenges to Administrative Adjudications Should Succeed, 81 MO. L. REV. 1023, 1039 (2016); Nicholas R. Bednar, Comment, Defying Auer Deference: Skidmore as a Solution to Conservative Concerns in Perez v. Mortgage Bankers Association, MINN. L. REV.: DE NOVO (June 24, 2015); John F. Manning, Constitutional Structure and Judi- cial Deference to Agency Interpretations of Agency Rules, 96 COLUM. L. REV. 612, 681 (1996); Jeffrey A. Pojanowski, Seminole Rock Revisited, 16 GEO. J.L. & PUB. POL’Y (forthcoming 2018), https://ssrn.com/abstract=2993473; Matthew C. Stephenson & Miri Pogoriler, Seminole Rock’s Domain, 79 GEO. WASH. L. REV. 1449, 1458 (2011).
221. Kent Barnett & Christopher J. Walker, Chevron in the Circuit Courts, 115 MICH. L. REV. (forthcoming 2017), https://ssrn.com/abstract=2808848.
222. That will be the case unless, of course, agencies react to the legislative change by advancing less aggressive interpretations of their own regulations or by engaging in rulemak- ing to make more substantial changes to their regulatory frameworks. Cf. Christopher J. Walker, Chevron Inside the Regulatory State: An Empirical Assessment, 83 FORDHAM L. REV. 703, 715–28 (2014) (presenting survey responses of 128 agency rule drafters which suggest to some extent that their agency is more aggressive in its interpretive efforts if it believes the reviewing court will apply Chevron deference as opposed to Skidmore deference or de novo re- view). For the full findings of that study, see Christopher J. Walker, Inside Agency Statutory In- terpretation, 67 STAN. L. REV. 999 (2015).
223. See Aaron Nielson et al., Reflections on Seminole Rock: The Past, Present, and Future of Deference to Agency Regulatory Interpretations, YALE J. ON REG.: NOTICE & COMMENT (2016), https://ssrn.com/abstract=2847668.
224. Simply put, the legislation may well strike an important balance by retaining Chev-
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CONCLUSION
We have seen extensive changes in the modern administrative state since Congress enacted the APA in 1946, including the spread of administrative common law that has reshaped the contours of the APA. Yet Congress has taken little action, having amended the APA fewer than two-dozen times in over seven decades—with the last substantial amendment occurring nearly four decades ago.
The current political climate seems primed for much-needed compre- hensive, bipartisan legislation to modernize the APA. The ABA’s 2016 consensus-driven recommendations are a critical starting point for any such reform. And the Portman–Heitkamp Regulatory Accountability Act of 2017 wisely incorporates most of the ABA’s recommendations, as well as a number of other common-sense reforms. Although reasonable minds may disagree as to some of its provisions, the Regulatory Accountability Act is the type of thoughtful, bipartisan legislation needed to modernize the APA. It deserves serious consideration and careful examination. If enacted, it would constitute the most significant reform of the APA since its enactment in 1946.
ron yet eliminating Auer. In particular, one may reasonably worry that the legislation’s more rigorous rulemaking provisions could encourage agencies to abandon rulemaking in favor of less-formal agency guidance. Eliminating Auer deference to agency regulatory interpreta- tions in agency guidance documents—while maintaining Chevron deference for agency statu- tory interpretations promulgated in rules—should encourage agencies to continue to utilize rulemaking, to obtain greater deference under Chevron. Such agency incentives may well have been weakened if the legislation had also eliminated Chevron deference.
