Explain the Administrative Role of a Federal Agency

RULEMAKING UNDER THE 2010 MODEL STATE ADMINISTRATIVE PROCEDURE ACT

Ronald M. Levin*

The adoption of a revised Model State Administrative Procedure Act' (MSAPA or Act) in July 2010 was an important event that amply justified the convening of the symposium of which this article is an outgrowth. It is the product of more than six years' effort by a drafting committee of the Uniform Law Commission (ULC) (also known as the National Conference of Commissioners on Uniform State Laws) to rework the preceding MSAPA, which was promulgated in 1981.^ The 2010 Act offers the states a comprehensive and carefully prepared template for legislation governing many aspects of the administrative process.

In this article, I will not generalize about the 2010 MSAPA as a whole. That task has been ably fulfilled elsewhere in this issue of the Journal? Instead, I will home in on the Act's treatment of a single slice of agency ñinctioning—the rulemaking function—which is codified primarily in Article 3.'* It is not a small terrain. The rulemaking provisions of the 1981 MSAPA were the focal point for an entire treatise written by the co-reporter for that Act, Professor Arthur Bonfield.^ I certainly do not seek to duplicate Bonfield's achievement in this short paper. I will, however, direct attention to

William R. Orthwein Distinguished Professor of Law, Washington University in St. Louis. The author served from 2007 to 2010 as American Bar Association advisor to the Drafting Committee to Revise the Model State Administrative Procedure Act. A shorter version of this article was published in ADMIN. & REG. L. NEWS, Winter 2011, at 4.

' REVISED MODEL STATE ADMIN. PROCEDURE ACT (2010) [hereinafter 2010 MSAPA], available at http://www.law.upenn.edu^ll/archives/ulc/msapa/2010 _flnal.htm.

^ MODEL STATE ADMIN. PROCEDURE ACT (1981) (revised 2010) [hereinafter 1981 MSAPA].

' See Michael Asimow, Contested Issues in Contested Cases: The 2010 Revised Model State Administrative Procedure Act, 20 WiDENER L.J. 707 (2011 ).

"2010 MSAPA art. 3. ' See ARTHUR EARL BONFIELD, STATE ADMINISTRATIVE RULE MAKING

(1986).

855

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some of the most noteworthy features of the treatment of rulemaking in the latest version of the MSAPA.

In part, the divergence between the two Acts refiects the rethinking of longstanding questions in the administrative law field, as one would naturally expect when a model act is revised after three decades' time. Another reason, however, is that the 2010 MSAPA addresses a number of procedures and issues that were not even on the law's radar screen thirty years earlier.

Readers who are familiar with federal rulemaking practice will discover that Article 3 is a combination of familiar and innovative requirements. The most venturesome provision is section 311, which deals with guidance documents (also commonly known as interpretive rules and policy statements). I will discuss this provision in detail below. First, however, I will offer a brief tour of the MSAPA's treatment of ordinary rulemaking and some variant forms of rulemaking procedure. I will conclude with a comparison between the 1981 and 2010 Acts' approaches to mandatory rulemaking.

I had an opportunity to participate in the creation of the 2010 MSAPA in my capacity as American Bar Association (ABA) advisor to the drafting committee. I held that position during the last three years of the Act's gestation period (succeeding Professors Michael Asimow and Jim Rossi, who had previously served in that capacity). On a personal level, I found this a fascinating, once-in-a-lifetime experience. It was, in effect, an opportunity to rethink and discuss almost the entire range of issues in the administrative law curriculum—but with a twist. When those issues arise in the context of a discussion about federal law, the conversation is typically circumscribed by remarks like "the Supreme Court has largely settled this point" or "the circuits at least agree on this much." These boundaries did not apply when the task on the table was to draft procedures for the states. Federal precedents were frequently instructive but never dispositive. When committee members questioned conventional approaches, the issues had to be reargued afresh as policy questions. I came away with renewed appreciation for ways in which practice at the state level necessarily differs from the federal model, and also for ways in which the states inevitably disagree among themselves about solutions to challenges that, in the abstract, look similar.

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Even where no material differences between federal and state law were complicating the picture, the drafting process frequently called for creativity and experimentation. The drafting committee undertook to codify numerous principles that had never before been expressed in statutory form at either the federal or state levels. The ambiguity of judicial doctrine can have its virtues, but statutes need to be clear, concise, and concrete. The need to be definite sometimes meant compromise.

In my capacity as ABA advisor, I served as a liaison between the drafting committee and the ABA Section of Administrative Law and Regulatory Practice (ABA Section), of which I am a longtime active member.^ To a greater extent than with any other article of the MSAPA, Article 3 is the product of extensive collaborative efforts between the drafting committee and the Section. On the whole, the committee was quite receptive to suggestions from the Section on rulemaking issues (in contrast to the never-bridged divergence of opinions between the two groups on the issue of separation of functions in adjudication'). I believe Article 3 became clearer and more workable as a result of these consultations. I will describe some of these interactions below in order to shed interpretive light on various provisions.

This article is intended for multiple audiences. It should be helpful to legislatures that must now consider whether to enact the 2010 MSAPA, either in whole or in part. Because the MSAPA is a 'model' act, not a "uniform" act, the ULC anticipates that states will adapt it to their existing administrative procedure acts (APAs), or borrow only selectively from it when they wish to update their state's approach to a specific issue. The article should also be of interest to judges, agency officials, and practitioners who will ultimately live under the Act and will need to interpret it in light of its purposes. Finally, the article should be of interest to a general administrative law readership, because it invites interesting comparisons between multiple systems' responses to common challenges.

In this article, I will offer not only descriptions, but also critical assessments and commentary on the principal rulemaking provisions.

* I served as Chair of the Section from 2000-2001 and have continuously held other Section offices for about three decades.

' See Asimow, supra note 3, at 721-39.

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Unlike the committee's patient, painstaking, and capable Reporter, Professor Gregory Ogden, I was not required by the nature of my role on the committee to be a neutral figure. I made recommendations that were accepted in some instances and not in others. Thus, this article will offer suggestions as to some areas in which, in my view, the drafting committee's judgments deserve further deliberation by legislatures that may consider adopting legislation based on the Act.

Notwithstanding some disagreements, however, I strongly support the 2010 MSAPA and hope many legislatures will adopt it or major sections of it. Many states are still operating under versions of the 1961 MS APA^ and should consider updating their administrative procedures to reflect the insights and imperatives of recent decades. Many states also have developed idiosyncratic approaches to administrative law issues—variations that seem dysfunctional and not necessarily explainable as responses to special local needs. The specialized experience, careful draftsmanship, and broad consultations that shaped the 2010 MSAPA have made it a model statute that deserves professional respect and attention in many quarters.

I. THE BASIC RULEMAKING PROCESS

The foundation for Article 3 is a relatively straightforward definition of the word "rule" in section 102(30) of the Act: "the whole or a part of an agency statement of general applicability that implements, interprets, or prescribes law or policy or the organization, procedure, or practice requirements of an agency and has the force of law."^ In material respects, the definition is similar to its counterparts in previous MSAPAs. I have elsewhere praised those acts' definitions as far superior to the poorly drafted definition of "rule" in the federal APA. "̂ Notice, however, that the 2010 MSAPA

* MODEL STATE ADMIN. PROCEDURE ACT (1961) (revised 1981 & 2010) [hereinafter 1961 MSAPA].

^ 2010 MSAPA § 102(30). " Ronald M. Levin, The Case for (Finally) Fixing the APA's Definition of

"Rule," 56 ADMIN. L. REV. 1077,1079 (2004). The corresponding language in the federal APA definition refers to "an agency statement of general or particular applicability and future effect." Administrative Procedure Act, 5 U.S.C. § 551(4) (2006) (emphasis added). Neither of the italicized phrases appears in the MSAPA

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definition refers solely to rules that have the force of law." Guidance documents (interpretive rules and policy statements) have their own definition'^ and are expressly excluded from the definition of "rule."'^ Finally, the MSAPA definition in section 102(30) contains various subject-matter exclusions, such as exclusions for statements that could unduly disclose investigative or prosecution strategies to the public or that concern "only the internal management of an agency and [do] not affect private rights or procedures available to the public.""* These provisions are functionally similar to the categorical exemptions written into the rulemaking section of the federal APA, section 553.'^

A. Notice

The MSAPA's rulemaking process revolves around a standard notice and comment model. Under section 304, the agency begins by publishing a proposed rule in a state publication comparable to the FederalRegister.^^ The MSAPA calls this announcement a "notice of proposed rulemaking," a term that is standard in federal law and is far more commonly used in state jurisdictions'^ than the 1981 MSAPA's corresponding term, "notice of proposed rule adoption."'^ (Similarly, in referring to a public announcement in which an agency seeks advice regarding a possible future rulemaking, the MSAPA uses the

definitions, and neither is justified. Administrative lawyers widely recognize that a basic feature of a rule is that it has "general," not "particular," effect. See Levin, supra, at 1078-83. The language that limits the definition to statements with ftiture effect is also quite problematic, in part because of its unfortunate implication that when an agency promulgates a retroactive rule, it need not follow APA rulemaking procedure. Indeed, the ABA passed a resolution in 2005 urging Congress to clarify the definition by deleting that phrase. See id. at 1083-88 & n.42.

"2010 MSAPA § 102(30). " § 102(14). ''§102(30)(F).: ''§102(30)(A)-(E). '̂ See 5 U.S.C. § 553(a). '* 2010 MSAPA §304(a). " See, e.g., IDAHO CODE ANN. § 67-5221(1) (2006); 5 I I I . COMP. STAT.

100/5-40(b) (2009); Mo. REV. STAT. § 536.021 (2008); MONT. CODE ANN. § 2- 4-302(4) (2007); W . V A . CODE § 29A-3-5 (2009).

'M MSAPA§3-106(b).

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phrase "advance notice of proposed rulemaking,"'^ which is routinely used in federal practice'̂ " and has been codified by some states in the same context.'^')

Unlike the federal APA, Article 3 expressly requires a rulemaking record. Section 302 prescribes its contents in detail.^^ This record provides a basis for the agency's decision and, later, for judicial review.̂ ^ Among the required contents, per subsection (b)(3), is "a copy and, if prepared, an index, of all factual material, studies, and reports agency personnel relied on or consulted in formulating the proposed or final rule."̂ "* The accompanying comment notes that this language is "based on language endorsed by" the ABA Administrative Law Section.^^ Although that is true, the original version of the Section's pronouncement referred to items "relied on or seriously considered by agency personnel."^^ The drafting committee dropped the word "seriously." ̂

Although I understand the members' hesitation to allow an agency to withhold (or, some might say, "conceal") items from the record that were in fact considered, I suspect that agencies will find that compliance with the literal meaning of section 302(b)(3) will be impractical. If an agency official gives fleeting "consideration" to a document, decides it is completely unhelpful, and puts it aside, I doubt that any public interest is served by demanding its inclusion in the official rulemaking record. A qualifier such as "actively

''^2010MSAPA§303(a). '° See generally JEFFREY S. LUBBERS, A GUIDE TO FEDERAL AGENCY

RULEMAKING 210-12 (4th ed. 2006) (summarizing advance notice of proposed rulemaking in federal administrative law); Andrew Emery & Fred Emery, Maybe the Experts Were Wrong About the ANPRM, ADMIN. & REG. L. NEWS, Winter 2009, at 10. ANPRM is a common acronym for advance notice of proposed rulemaking.

" See, e.g., 5 ILL. COMP. STAT. 100/5-30(b)(l); R.I. GEN. LAWS § 42-35-2.5 (2009).

^^2010 MSAPA §302. " § 507(a). " § 302(b)(3). " § 302 cmt. '^ Section of Admin. Law & Reg. Practice of the ABA, A Blackletter

Statement of Federal Administrative Law, 54 ADMIN. L . REV. 1, 34 (2002) (emphasis added).

" See § 302(b)(3).

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considered" would have been appropriate. However, the arguably overbroad coverage of section 302(b)(3) may make no real-world difference, because the judicial review article of the Act establishes a presumption of regularity relating to the agency's compilation of the rulemaking record. A reviewing court may supervise the agency's compilation of the record but may allow discovery or other evidentiary proceedings to ensure its completeness only upon "a substantial showing of need. "̂ ^

Section 302 also provides: "If an agency determines that any part of the rulemakingi record cannot be displayed practicably or is inappropriate for public display on the Internet website, the agency shall describe the part and note that the part is not displayed."^^ The accompanying comment notes that this provision might "enable an agency to decide, for example, that a blueprint that may not be practically displayed on the internet, indecent material, or copyrighted material should be available for inspection in hard copy but not posted on the Internet."^° I have heard agency counsel at the federal level express puzzlement as to how the norm of posting rulemaking comments online can be applied to copyrighted material as well as comments that are tasteless, scurrilous, or worse. The MSAPA solution might have appeal as a model for federal agencies to follow.

Among the items that must be included in the notice of proposed rulemaking are "a citation to and summary of each scientific or statistical study, report, or analysis that served as a basis for the

" § 507(c)(l). The presumption is well recognized in the extant case law. See Bar MK Ranches v. Yuetter, 994 F.2d 735, 740 (10th Cir. 1993) (citing Wilson v. Hodel, 758 F.2d 1369, 1374 (10th Cir. 1985)) ("[T]he designation of the Administrative Record, like any established administrative procedure, is entitled to a presumption of administrative regularity. The court assumes the agency properly designated the Administrative Record absent clear evidence to the contrary."); Amfac Resorts, LLC v.'U.S. Dep't of Interior, 143 F. Supp. 2d 7,12 (D.D.C. 2001) ("[A] party must provide good reason to believe that discovery will uncover evidence relevant to the Court's decision to look beyond the record. Thus, a party must make a significant showing-variously described [in case law] as a 'strong', 'substantial', or 'prima facie' showing-that it will find material in the agency's possession indicative of bad faith or an incomplete record.").

^'2010MSAPA§302(a). '° § 302 cmt.

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proposed rule, together with an indication of how the full text of the study, report, or analysis may be obtained."^' This disclosure requirement was included at the suggestion of the ABA Section. It effectively codifies the so-called Portland Cement doctrine,^^ which is a standard feature of rulemaking practice at the federal level. In the federal cases, disclosure of scientific or technical information underlying a rule has been deemed essential to effective use of the opportunity to comment.^^ However, the absence of explicit statutory authority for the doctrine in the federal APA has been troublesome. Questions about its legitimacy are still being raised.̂ '* Hence the desirability of codification. The language used in section 304 is based on a New York statute.^^ Ironically, the New York legislature had to act because that state's highest court had refused to read the Portland Cement requirement into the state's ^̂

B. Regulatory Analysis

Section 305 of the MSAPA requires the agency to prepare a regulatory analysis to accompany rules that will have an expected economic impact of more than a specified amount (to be determined by the legislature).^' Essentially, this is a requirement of cost-benefit

" § 304(a)(6). " See Portland Cement Ass'n v. Ruckelshaus, 486 F.2d 375, 392-94 & n.67

(D.C. Cir. 1973) ("Obviously a prerequisite to the ability to make meaningftal comment is to know the basis upon which the rule is proposed.").

" See, e.g.. Am. Radio Relay League, Inc. v. FCC, 524 F.3d 227, 236-37 (D.C. Cir. 2008); Conn. Light & Power Co. v. NRC, 673 F.2d 525, 530-31 (D.C. Cir. 1982) ("An agency commits serious procedural error when it fails to reveal portions of the technical basis for a proposed rule in time to allow for meaningftil commentary."); 1 RICHARD J. PIERCE, JR., ADMINISTRATIVE LAW TREATISE § 7.3, at 436 (4th ed. 2002).

''^ See Am. Radio Relay League, 524 F.3d at 245-47 (Kavanaugh, J., dissenting in part); AARP v. Equal Emp't Opportunity Comm'n, 489 F.3d 558, 567 (3d Cir. 2007); Jack M. Beermann & Gary Lawson, Reprocessing Vermont Yankee, 75 GEO. WASH. L . REV. 856, 894-95 (2007).

" N.Y. A.P.A. LAW § 202-a (McKinney 2003). '^ Indus. Liaison Comm. v. Williams, 527 N.E.2d 274, 276 (N.Y. 1988). See

generally PATRICK J. BORCHERS & DAVID L. MARKELL, NEW YORK STATE ADMINISTRATIVE PROCEDURE AND PRACTICE § 4.7 ( 1995) (discussing disclosure of data and study information in rulemaking).

"2010MSAPA§305(a), (c).

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analysis. The regulatory analysis requirement carries the potential to bog down the rulemaking process with inquiries that state agencies, with their limited size and budgets, do not have the resources to pursue rigorously. Superficial analyses may be the result. Hopefully, legislatures will heed the admonition in the official comment that they should set the triggering level for this requirement high enough "so that the number of regulatory analyses prepared by any agency are proportionate to the resources that are available."^^

Unlike the usual situation in federal law,'**' questions as to whether an agency has fulfilled its regulatory analysis obligation are reviewable in court. The test is whether the agency made a "good faith effort to comply."'*' In my view, if states elect not to follow the federal model, they should not enact a more rigorous standard of review than this test. Otherwise, the agency's determinations under section 305 would invite a host of challenges, because they would often have to be based on unprovable assumptions, rough factual estimates, and predictions. This vulnerability would be particularly problematic at the state level, where the available resources and expertise for conducting sophisticated cost-benefit analyses are much scarcer than at the federal level.'*^ Moreover, the need to evaluate the agency's effort against specialized professional norms of policy analysis would strain the outer limits of judicial competence. In several states in which there is no explicit bar to judicial review of regulatory analyses, I have seen courts apply regulatory analysis requirements quite undemandingly, perhaps refiecting a tacit acknowledgment that they cannot effectively play a major role in this

^' Richard Whisnant & Diane De Witt Cherry, Economic Analysis of Rules: Devolution, Evolution, and Realism, 31 WAKE FOREST L. REV. 693,696-97 (1996).

^' § 305 cmt. ''*' Most federal cost-benefit analysis is conducted pursuant to a presidential

executive order; agencies' compliance with the order is not reviewable. 5ee, e.g., Michigan v. Thomas, 805 F.2d 176, 187 (6th Cir. 1986). For my critique of legislative proposals that would provide for judicial review of federal agencies' compliance with cost-benefit analysis obligations, see Ronald M. Levin, Judicial Review of Procedural Compliance, 48 ADMIN. L. REV. 359 (1996).

" § 305(f). "̂ See Whisnant & Cherry, supra note 38, at 696-97.

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Finally, even if judicial review of compliance with section 305 were barred entirely, the courts' opportunity to consider the regulatory analysis during review of the merits would give judges some ability to monitor the seriousness of the agency's analytical effort.

C. Public Participation and Final Issuance

Section 306 of the MSAPA provides for public participation. It codifies a logical set of guidelines for coordinating public comments with the statutorily defined rulemaking record. The agency "shall consider" comments and information submitted by members of the public during the proceeding.'*'* This essentially means the agency will need to respond in the final explanatory statement to any comments with which it disagrees.'*^ On the other hand, the agency "may consider any other information."'*^ This provision gives the agency a degree of discretion to decide whether or not to take account of various possibly relevant materials that may come to its attention while the proceeding is under way. As stated above, any information that it does consider must be incorporated into the record, as provided in subsection 302(b)(3).'" Oral contacts are permitted without restriction; in this regard, the 2010 MSAPA adheres to prevailing case law at the federal level"*̂ and in all state courts that have addressed the issue.'*^ Finally, the agency has discretion to hold a live hearing, but a hearing is not mandatory unless some other state law requires one to be held.^" All of this is familiar terrain.

"̂ See, e.g.. Citizens for Free Enter, v. Dep't of Revenue, 649 P.2d 1054,1060 (Colo. 1982); Ne. Ohio Reg'l Sewer Dist. v. Shank, 567 N.E.2d 993, 999, 1001 (Ohio 1991); Methodist Hosps. of Dall., Inc. v. Tex. Indus. Accident Bd., 798 S.W.2d 651, 656 (Tex. App. 1990).

""2010 MSAPA § 306(a) (emphasis added). "̂ See §313(1). "'̂ § 306(b) (emphasis added). "' § 302(b)(3). "̂ Sierra Club v. Costle, 657 F.2d 298, 401-02 (D.C. Cir. 1981). "̂ Citizens Ass'n of Georgetown v. Zoning Comm'n, 392 A.2d 1027,1038-39

(D.C. 1978); Mass. State Pharm. Ass'n v. Rate Setting Comm'n, 438 N.E.2d 1072, 1079 (Mass. 1982); Boyles v. Miss. State Oil & Gas Bd., 794 So. 2d 149, 158 (Miss. 2001).

'°§306(c).

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At the end of the process, the agency publishes the final rule along with an explanatory statement containing reasons for the rule, responses to comments, and the like.^' The final rule must be a "logical outgrowth" of the notice of proposed rulemaking.^^ This phrasing adopts the language of the federal case law,̂ '̂ superseding the 1981 MSAPA's formula, which turned on whether the final rule is "substantially different" from the proposed rule.̂ "* One cannot pretend that the revised language will not lead to uncertainties, but at least the extensive federal |case law on this subject should be helpful to agencies and private counsel who will have to cope with the inherently judgmental nature of this issue.

One other detail to notice about the explanatory statement section is that it omits a provision that had appeared in the corresponding section of the 1981 Act. That sentence required that "[o]nly the reasons contained in the concise explanatory statement may be used by any party as justifications for the adoption of the rule in any proceeding in which its validity is at issue."^^ The former language was an attempt to codify what is commonly known as the Chenery doctrine.^^ The omission did not occur because of the drafting committee's disagreement with Chenery. Rather, it reflected a belief that this doctrine did not belong in Article 3. Chenery states a judicial review principle, yet the purpose of Article 3 is to tell the agency how to conduct a rulemaking proceeding. As phrased, the 1981 language suggested that an agency could not rely on a post hoc rationalization in its brief, but the court could make up a new

' ' § 3 1 3 . " § 308. " Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158, 174 (2007). ^''1981 MSAPA §3-107. "§3-110(b). " The general principle is that a reviewing court must judge an agency action

solely on grounds invoked by the agency decisionmaker. Fed. Power Comm'n v. Texaco Inc., 417 U.S. 380, 397 (1974). "Post hoc rationalizations" by agency counsel do not suffice. Id. "If an order is valid only as a determination of policy or judgment which the agency alone is authorized to make and has not made, a judicial judgment cannot be made to do service for an administrative judgment." SEC v. Chenery Corp., 318 U.S. 80, 88 (1943). For a comprehensive assessment of the doctrine, see Kevin M. Stack, The Constitutional Foundations o/Chenery, 116 YALE L.J. 952(2007).

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justification sua sponte.^^ That was an awkward ambiguity. To be sure, the 2010 MSAPA did not replace the omitted language with substitute language in Article 5 (the judicial review article), but that omission may be for the best. To draft statutory language, one would have had to take account of various qualifications and exceptions.^^ Chenery is probably better left as a case law doctrine. Indeed, the federal APA does not codify Chenery and neither did the 1981 MSAPA with respect to adjudication.

D. Time Limits

One other point of divergence from federal law is that section 307(d) of the MSAPA gives the agency a time limit within which it has to complete the rulemaking proceeding, or else the rule becomes void.̂ ^ The 1981 MSAPA provided a six-month period from the publication of the rulemaking notice (or the conclusion of an oral hearing).^" At least a dozen states also impose deadlines, ranging from 125 days (Alabama)^' to about four years (Wisconsin).^^ A year

" Bonfield reports that the drafters of the 1981 MSAPA agreed with Chenery but "sought to accomplish this result in language more acceptable to judges than an express limitation on their authority." BONFIELD, supra note 5, at 317.

^̂ For example, the doctrine does not apply if the issue is purely legal rather than discretionary, or if it is obvious what the agency would say on remand, or if only one answer to the unaddressed question would be reasonable. See Bank of Am. V. FDIC, 244 F.3d 1309, 1319-21 (11th Cir. 2001); Harold J. Krent, Ancillary Issues Concerning Agency Explanations, in A GUIDE TO JUDICIAL AND POLITICAL

REVIEW OF FEDERAL AGENCIES 197,201-02 (John F. Duffy & Michael Herz eds., 2005); Stack, supra note 58, at 965-66, 1008-10.

''2010 MSAPA §307(d). *" 1981 MSAPA § 3-106(b). '̂ See ALA. CODE §§ 41-22-5(a)(l), 41-22-6(b) (2008).

^' W I S . STAT. § 2 2 7 . 1 4 ( 6 ) ( C ) (2011). A query by the MSAPA Reporter, Professor Gregory Ogden, to the listserv of the Administrative Codes and Registers Section of the National Association of Secretaries of State retrieved the following examples, which may not be exhaustive: Arizona, ARIZ. REV. STAT. § 41-1024(B) (LexisNexis 2006) (120 days to adopt the rule after the close of the record on the proposed rulemaking); California, CAL. GOV'T CODE § 11346.4(b) (West 2001) (one year from date of publication of notice of proposed rulemaking to complete regulatory process and submit regulation for review); Colorado, COLO. REV. STAT. § 24-4-103(4)(d) (2010) (180 days from the last rulemaking hearing); Delaware, 29 DEL. CODE ANN. § 10118(f) (2009) (one year from date of "the end of the public comment period or the last public hearing, whichever is later, on the proposed

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is typical. Early drafts of the 2010 MSAPA had a similar time limit. Members of the drafting committee thought that an agency may drag its feet indefinitely if it has no deadline, thus prolonging the uncertainty for those who are threatened with regulation.

However, the ABA Section objected to the imposition of across- the-board deadlines in an APA. A letter to the drafting committee from Section Chair Russell Frisby argued as follows:

At both the federal and state levels, rulemaking proceedings can range from thé very simple to the very difficult or complex. The deadline does not adequately take account of the difficulties that may beset an agency at the latter end of the spectrum. The human and budgetary resources available to the agency may not be sufficient to enable it to complete all of the tasks assigned to it within the half-year time frame. Moreover, sometimes consensus takes a long time to achieve. Leadership transitions at the agency may also stretch out the learning curve. Furthermore, a last- minute snag, or an unforeseen crisis in an unrelated area of the agency's responsibilities, may force the agency to issue the rule with less thought than one would normally desire—or it may force the agency to start over with a new proceeding.

Starting over under these circumstances would be wasteful and would aggravate the resource problem, in addition to causing more delay in getting the rule onto the books. Indeed, sometimes the obligation to start over would be bad for everyone concerned—such as in a situation in which the rule is intended [to] bestow benefits rather than impose burdens, or in which everyone agrees that the agency needs to issue some rule (perhaps

regulation"); Illinois, 5 I I I . COMP. STAT. 100/5-40(e) (2009) (one year from date of publication of flrst notice); Kentucky, KY. REV. STAT. ANN. § 13A.300(4) (West 2005) (one year from date of publication); Louisiana, LA. REV. STAT. ANN. § 49:968(H)(1) (2010) (one year from date of publication); New York, N.Y. A.P.A. LAW § 202(2)-(3) (McKinney 2003) (one year from commencement of rulemaking, with 90-day extension possible); Texas, 10 TEX. CODE ANN. § 2001.027 (2001) (six months from date of publication); Utah, UTAH CODE ANN. § 63G-3-301(12)(a) (LexisNexis 2008) (120 days from date of publication of notice of proposed rulemaking); Vermont, VT. STAT. ANN. tit. 3, § 843(c) (2008) (eight months from date of initial filing with Secretary of State); and Wisconsin, Wis. STAT. § 227.14(6)(c) ("December 31 of the 4th year after the year in which it is submitted to the legislative couricil staff... .").

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because of a statutory mandate) and the only controversy relates to the terms in which the mle should be framed.

In Califomia, which has a comparable deadline requirement (actually a more generous one-year period),'̂ '̂'̂ the results have been unfortunate. Agencies feel obliged to make the basic decisions before the comment period begins, because they would not have enough time for full deliberation thereafter. This pattem tends to defeat the purpose of having a comment period.̂ '*

The Section went on, however, to offer a constructive solution:

On the other hand, we recognize that in certain situations the issuance of a mle long after the initial notice and the comment period can be unfair to members of the public. By that time, the record may be stale, because the underlying situation could have changed. Moreover, such a mle may result in an unfair surprise to regulated persons, such as a business owner who assumed that the proposed mle had been forgotten and made investments or plans predicated on that assumption.

These are valid concems, but we believe that section 307 can be revised to achieve a better reconciliation of the competing interests involved. First, to alleviate the deadline pressures we have discussed, the default time period prescribed for completion of mlemaking proceedings should be lengthened, perhaps to a year and a half or two years after the end of the (initial) comment period. Second, section 307 could be amended to provide that if

" CAL. GOV'T CODE § 11346.4(b). *'' Letter from H. Russell Frisby, Jr., Chair, Section of Admin. Law and Reg.

Practice, to Francis J. Pavetti, Chair, MSAPA Drafting Comm. (Nov. 6,2008), at 3 (on file with author) [hereinafter Frisby Letter]. It may be thought that "starting over" is no real burden, because the agency can simply take items from the former rulemaking record and insert them into the new rulemaking record. However, this reasoning overlooks several complications. The agency could not simply assume that tentative agreements among agency decisionmakers, or between the agency and interested private groups, remain in effect. These understandings would have to be revisited and perhaps renegotiated. Moreover, the agency could not simply assume that a group's prior comments continue to refiect its current position. Each of these groups would have a right to submit comments in the new proceeding, and they would have to engage in their own internal deliberative processes to decide whether to adhere to their previous statements without change.

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the agency does not promulgate its rule by the end of the stated period, the agency must issue a second invitation for comments within the same rulemaking proceeding. This renewed comment period would give interested persons an opportunity to update the record. In addition, affected persons, such as the business owner in the preceding hypothetical, could attempt to persuade the agency to abandon or modify the proposed rule in light of any reliance interests that may have accrued during the pendency of the proceeding. The agency's explanatory statement would then have to justify the rule in light of these submissions. This revised remedy for long-delayed rulemaking proceedings would address the fairness problems mentioned above, without the deleterious side effects of the present "voidness" approach.*^

The Section's; letter to the drafting committee led to a series of exchanges between the two groups. One new idea that emerged from the discussions was that if an agency wants to extend its own deadline, it should have to make an express (and potentially judicially reviewable) finding of "good cause" explaining its reasons for the extension. Ultimately, the committee proposed a model in which the agency's initial proceeding would have a two-year deadline, and if the agency made the good cause finding and reopened the record for new comments, it could take an additional two years. At this point, the Section dropped its opposition and the model was adopted.^^ The sense of the Section's Council was that these provisions were livable, because few, if any, state agency rulemaking proceedings would be likely to take more than a total of four years.

This acquiescence did not mean, however, that the Council was persuaded that APA time limits were a good idea. As a few Council members pointed out during this protracted debate, it was ironic that the drafting committee, in the seventh year of its work on the MSAPA, seemed so intent on holding agencies to strict timetables for completing their own policymaking ventures. These Council members were not^saying that the committee itself had been dilatory. Rather, their point was that the committee might have shown more empathy for the situations that rulemaking agencies frequently face. Some of the factors that had delayed the committee's completion of

Frisby Letter, supra note 71, at 3. See 2010 MSAPA § 307(b), (d).

870 WiDENER L A W JOURNAL [Vol. 20

its own assignment—such as recovery from false starts, the difficulties of achieving internal consensus, the need for research to clear up issues that unexpectedly emerge along the way, and the need to consult with and accommodate interested outside groups—are also commonplace in the rulemaking process.^^

In any event, the resolution of the section 307(d) controversy within the 2010 MSAPA drafting process is unlikely to put an end to debate over the proper role of time limits in state APAs. The pair of two-year limits in the text of the section is bracketed^^ According to the conventions of the ULC, this means that states are invited to replace the numerical values in the Model Act with their own figures.^^ Thus, states can make their own deadlines either more or less stringent than the MSAPA itself provides.

In my view, when the respective states consider enactment of section 307 or similar APA provisions, they should refrain from imposing stricter deadlines than the MSAPA's and should consider doing without them altogether, or at least doing without voidness sanctions for failure to comply with the deadlines. A rulemaking proceeding is not like a court case or agency adjudication, in which due process values do suggest that "justice delayed is justice denied." Bureaucratic organizations of all kinds frequently have multiple policy initiatives pending at once, and it is natural for them to put some of them on the back burner for months or years if other matters are more pressing. Corporations, agencies, legislatures, law faculties, and law revision commissions all do this, and I see nothing particularly sinful about it. Basically, the issue goes to managerial judgment. An incumbent administration should be politically accountable to the legislature and the public for any foot-dragging, along with other aspects of its management of its workload, but I doubt that an APA needs to address it. "̂

''' See generally Alden F. Abbott, The Case Against Federal Statutory and Judicial Deadlines: A Cost-Benefit Appraisal, 39 ADMIN. L. REV. 171, 174-76 (1987) (describing causes of rulemaking delays); Neil R. Eisner, Agency Delay in Informal Rulemaking, 3 ADMIN. L.J. 7, 7-10 (1989) (same).

'^ § 307(b). " NAT'L CONFERENCE OF COMM'RS ON UNIF. STATE LAWS, DRAFTING R .

406(a) (2006). (NCCUSL is an alternative name for the ULC.) "" See, e.g., Abbott, supra note 67, at 180-200 (noting that imposition of strict

deadlines on issues pending before administrative agencies may be

2011] 2010 MSAPA RULEMAKING 871

Certainly, delays in the completion of some agency rulemaking proceedings cause harm to the public, but these shortfalls should be rectified on individualized bases. Legislative and gubernatorial oversight is a straightforward remedy that can be deployed against the worst offenders. In addition, there is a role for judicial review. The MSAPA provides a remedy for such problems in section 501(d), which allows a reviewing court to "compel an agency to take action that is unlawfully withheld or unreasonably delayed."^' Judicial relief under the corresponding federal APA provision^^ frequently depends on a balance between individual hardship and the agency's good faith effort, its overall workload, and so on. Actually, federal courts are usually hesitant tO intervene in this kind of case, in part because of their sensitivity to the agency's resource constraints.^^ There is room to debate whether state courts should implement section 501(d) of the MSAPA more forcefully.̂ '* But at least that provision allows sensitivity to context. In contrast, section 307(d) would invalidate a proceeding regardless of the public benefits that would ensue from the rule that is thereby rendered "void," and even if nobody has been particularly hurt by the delay. This seems very unwise.

II. VARIANT RULEMAKING MODELS

Article 3 also codifies several variations on the standard notice- and-comment model. Under section 309, an "emergency" rule may be issued without notice and comment.^^ The test for an emergency is

counterproductive and costly); Jacob E. Gersen & Anne Joseph O'Connell, Deadlines in Administrative Law, 156 U. PA. L. REV. 923,973-77 (2008) (outlining social costs of deadlines).

^'2010 MSAPA §501(d). ^^5 U.S.C. §706(1) (2006). " See Abbott, supra note 67, at 178-79; Eisner, supra note 67, at 24-25. '"^ State courts might, for example, want to consider whether or not to adhere

to the Supreme Court's recent and somewhat puzzling remark that, under § 706( 1 ), "a delay cannot be unreasonable with respect to action that is not required." Norton V. S. Utah Wilderness Alliance, 542 U.S. 55, 63 n.l (2004). The Court's unexplained suggestion that courts cannot intervene to hasten the completion of a long-delayed rulemaking proceeding if the agency was not legally required to commence the proceeding in the first place does not seem compatible with the APA language and had not been foreshadowed in prior cases.

" 2010 MSAPA § 309.

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whether "an agency finds . . . an imminent peril to the public health, safety, or welfare or the loss of federal funding for an agency program. "̂ ^ This language differs at least verbally from the corresponding tests in the federal APA, namely whether notice and comment procedure would be "impracticable" or "contrary to the public interest."^^ The difference between these two formulations may not be significant as a practical matter. Both tests require judgment calls regarding the same basic considerations. Either way, therefore, outcomes will depend on the way in which courts and agencies choose to apply the relevant test.

Of greater concern is the omission from section 309 of the requirement that the agency must find "for good cause" that the applicable test is met.'^ That language appears in the federal APA and also in the 1981 MSAPA's counterpart to section 309.̂ ^ In each of those acts, the "good cause" language has not been intended to toughen the substantive test of the provision. Rather, it has been intended to signal that the agency's finding has to be articulated in a manner that a court can evaluate as credible or not, as opposed to simply confirming that the agency did find that the substantive test has been met.^" The drafting committee believed that the "good cause" language was superfluous, but I fear that its omission will give rise to confusion. Hopefully, reviewing courts will hold that no material change was intended, and legislatures will restore the traditional language as they consider enactment of the 2010 MSAPA in their respective states.

Another basis for concern is that, under section 309, an emergency rule can last only 180 days, renewable once for another 180 days. This aspect of the provision raises some of the same concems about restrictive deadlines that were noted above. At the end of the combined 360-day period, the emergency might be over, but the agency might not have had time to decide what permanent

'" § 309. " 5 U.S.C. § 553(b)(B) (2006).

™ 5 U.S.C. § 553(b)(B); 1981 MSAPA § 3-108(a). ^' See, e.g., LEGISLATIVE HISTORY OF THE ADMINISTRATIVE PROCEDURE ACT,

S. Doc. No. 79-248 at 200, 258 (1946) ("A true and supported or supportable finding of necessity or emergency must be made and published.").

2011] 2010 MSAPA RULEMAKING 873

rule should apply to the situation, nor to adopt that rule through the standard rulemaking process (which certainly can be time- consuming). Thus, section 3O9's deadlines are an invitation to rushed decisionmaking and diversion of staff resources from what may be

ft 1

more productive uses. These time limits should be relaxed or eliminated altogether.

For rules that are expected to be noncontroversial, section 310 of the 2010 MSAPA provides a "direct final rulemaking" process.^^ The agency can announce what rule it intends to adopt, and if no one objects to it, it will become law without further consideration by the agency. This technique is borrowed from federal practice. It is not expressly recognized in the federal APA, but the basic principles for its use were set forth in a recommendation of the Administrative Conference of the United States (ACUS) about fifteen years ago.̂ ^ I served as a consultant to ACUS when it made this recommendation, '̂* and so I was pleased to see the drafting committee incorporate this technique into the MSAPA (although it made that decision before I became an advisor to the committee).

In contrast to the situation under the federal APA, however, the agency does not have the option of simply adopting the noncontroversial rule without any prior notice by determining that notice and comment is "unnecessary."^^ Many federal agencies do

'̂ For elaboration of these potential mischievous effects, see Michael Asimow, Interim-Final Rules: Making Haste Slowly, 51 ADMIN. L. RBV. 703,738-40 (1999).

§ ^Vrocedures for Noncontroversial and Expedited Rulemaking

(Recommendation No. 95-4 of the Admin. Conf of the U.S.), 60 Fed. Reg. 43,110 (Aug. 18, 1995) [hereinafter ACUS Recommendation 95-4].

'̂' Ronald M. Levin, Direct Final Rulemaking, 64 GEO. WASH. L . REV. 1 (1995). In the 2010 MSAPA, the term "direct final rulemaking" is in one sense a misnomer, because section 310 refers to the initial announcement as a "proposed rule," which does not become "final" unless and until it survives the period allowed for objections. 2010 MSAPA §310. However, the technique does not differ materially from the model used in federal practice, in which the term "direct final rulemaking" has become standard. New direct final rules, for example, are routinely labeled as such in the Federal Register. See, e.g.. Protection of Whistleblowers in the Coast Guard, 76 Fed. Reg. 17,782 (Mar. 31, 2011). On balance, therefore, the MSAPA's adherence to that recognized terminology was probably the right decision.

^̂ 5 U.S.C. § 553(b)(B) (2006).

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rely on that exemption and never use direct final rulemaking. However, ACUS did recommend that agencies should generally follow the direct final rulemaking technique when promulgating rules that they believe fall within the APA exemption, "unless the agency determines that the process would not expedite issuance of such rules." If states decide to enact section 310 as proposed by the ULC, their action will serve as a good test of the workability of the ACUS recommendation.

In addition, the MSAPA contains a provision for negotiated rulemaking^' similar to the federal Negotiated Rulemaking Act.*^ Several states have already enacted such measures,^^ and this provision should dispel any doubts about the legality of the practice in an MSAPA jurisdiction. The MSAPA provision specifically recites that "[t]he agency shall consider whether to use [the consensus recommendation of a negotiated rulemaking committee] as the basis for a proposed rule under Section 304, but the agency is not required to propose or adopt the recommendation."^" This disclaimer was inserted to assuage doubts voiced on the floor of the ULC about the possibility that negotiated rulemaking amounts to an abdication of the agency's responsibilities. Such comfort language has not been thought necessary in any of the jurisdictions that have enacted negotiated rulemaking language in the past, but it does not appear to do any harm.

*̂ ACUS Recommendation 95-4, supra note 83, preamble. *' 2010 MSAPA § 303(b)-(c). *̂ Negotiated Rulemaking Act, 5 U.S.C. §§ 561-570a (2006); ieea&o DAVID

M. PRITZKER & DEBORAH S. DALTON, ADMIN. CONF. OF THE U.S., NEGOTIATED

RULEMAKING SOURCEBOOK (1995). Three states have adopted statutes that are actually labeled "negotiated

rulemaking acts." MONT. CODE ANN. § 2-5-101 (2007); NEB. REV. STAT. § 84-921 (2008); TEX. GOV'T CODE ANN. § 2008.001 (West 2008). Measures that authorize or encourage the process have also been adopted in at least six other states. See FLA. STAT. § 120.54(d)(2010); IDAHOCODE ANN. § 67-5220(1995); OKLA. STAT. tit. 74, § 485(B) (2010); WASH. REV. CODE § 34.05.310(2)(a) (2009); IND. R. CT. A.D.R. 1.1 ; N.Y. Exec. Order 20 § IIH 9 (Mar. 2008).

'°2010MSAPA§303(c).

2011] 2010 MSAPA RULEMAKING 875

III. GUIDANCE DOCUMENTS

A. The Issue of Binding Effect

Guidance documents—also known in administrative law parlance as nonlegislative rules or as interpretive rules and policy statements^'—differ from rules in that they are not binding, that is, they lack the force of law. As already mentioned,^^ the 2010 MSAPA makes this distinction explicit in its definitional provisions. A guidance document is defined as "a record of general applicability developed by an agency which lacks the force of law but states the agency's current approach to, or interpretation of, law, or describes how and when the agency will exercise discretionary functions."^^

About twenty of the states require that agencies use notice and comment procedure to promulgate guidance documents. '̂* The MSAPA, however, follows federal law by exempting them from rulemaking procedure.^^ The drafters supported this exemption because they believed that members of the public benefit from knowing how an agency intends to implement its enabling legislation. Agencies cannot articulate all of their legal interpretations and policy positions in binding regulations, and advisory documents facilitate compliance and serve to channel the discretion of agency employees.^^

" See 5 U.S.C. § 553(b)(A) (2006) (exempting "interpretative rules [and] general statements of policy" from rulemaking procedural obligations). Most writers prefer the term "interpretive rules" to the APA term "interpretative rules."

" See supra notes 10-14 and accompanying text. " 2 0 1 0 MSAPA § 102(14) (emphasis added). '" Michael Asimow, Guidance Documents in the States: Toward a Safe

Harbor, 54 ADMIN. L. REV. 631, 638-39, 644, 651 (2002). '^ §311(a). As a matter of draftsmanship, this provision is not strictly

necessary because the rulemaking provisions of the 2010 MSAPA apply only to "rules," which by definition exclude guidance documents. § 103(30)(F). However, the explicit exemption was included in section 311 in order to highlight the relationship between the agencies' ability to adopt these statements without notice and comment obligations and the procedural requirements that section 311 does impose on agencies when they use such statements.

'^ This purpose is spelled out in the initial paragraph of the official comment accompanying section 311. § 311 cmt. Two prominent commentaries cited there in support of this reasoning were Michael Asimow, California Underground Regulations, 44 ADMIN. L. REV. 43 (1992), and Peter L. Strauss, Publication Rules

876 WiDENER LAW JOURNAL [Vol. 20

Agencies' use of guidance documents does, however, give rise to a recurring criticism. Administrators sometimes apply such pronouncements in a binding fashion, without allowing citizens to question whether the positions expressed in them are correct. When this happens, the agency has, as a practical matter, given the guidance document the same force as if it were a legislative rule, while bypassing the safeguards of the rulemaking process that are supposed to accompany such rules.^'

The usual manner in which courts counteract this tendency of administrators to misuse guidance documents is by withholding the rulemaking exemption.^^ This approach is familiar in federal law. What the agency calls a guidance document may be judicially reclassified as a rule—and therefore set aside for having been issued without notice and comment—if the agency behaves as though the document contains a binding norm.̂ ^ This judicial technique does curb the abuse just mentioned, but it also creates practical problems for the agency. The courts' applications of the binding norm test are highly unpredictable. Naturally, agencies tend to adhere to their

1 on

guidance documents—that is why they issue them. But if a court thinks that the language of the document is too coercive or the agency's behavior in implementing it is too inflexible, the agency is at risk of having the document declared invalid. When this occurs, members of the industry are left without a reliable source of guidance as to how to satisfy their regulatory obligations. Still, the courts'

in the Rulemaking Spectrum: Assuring Proper Respect for an Essential Element, 53 ADMIN. L. REV. 803(2001).

' ' See Agency Policy Statements (Recommendation No. 92-2 of the Admin. Conf of the U.S.), 57 Fed. Reg. 30,101, 30,103 (July 8, 1992) [hereinafter ACUS Recommendation 92-2]. The consultant's report underlying this recommendation is a well-known exposition of this critique. See Robert A. Anthony, Interpretive Rules, Policy Statements, Guidances, Manuals, and the Like—Should Federal Agencies Use Them to Bind the Public?, 41 DUKE L.J. 1311 (1992).

^̂ See, e.g., U.S. Tel. Ass'n v. FCC, 28 F.3d 1232, 1233-34, 1236 (D.C. Cir. 1994).

' ' See, e.g.. Gen. Elec. Co. v. EPA, 290 F.3d 377, 383-85 (D.C. Cir. 2002); US Tel. Ass'n, 28 F.3dat 1233; Cmty.NutritionInst. v. Young, 818 F.2d943,946- 47 (D.C. Cir. 1987).

'"" See, e.g.. Prof Is & Patients for Customized Care v. Shalala, 56 F.3d 592, 599 (5th Cir. 1995) ("Indeed, what purpose would an agency's statement of policy serve if agency employees could not refer to it for guidance?").

2011] 2010 MSAPA RULEMAKING 877

approach is understandable, because the denial of an APA exemption has been the only tool they have had available for rectifying the binding use of guidance documents.

Section 311 of the 2010 MSAPA offers a completely different and ingenious solution to the same problem.'"' An agency is free to issue a guidance document without rulemaking procedure, and the Act does not contemplate that a court might reclassify the document as a disguised rule. However, section 311 itself spells out several procedural obligations that agencies must observe when using guidance documents. These duties are the "price" that the agency has to pay in return for having been allowed to adopt the document without notice and comment. '"^ The MSAPA's approach is innovative and will require administrative lawyers to think about these nonbinding statements in a new way, but it offers a number of advantages, as I will explain.

B. Elaboration on the Binding Norm Test

I played a role in drafting the provisions of section 311 that contain the obligations that accompany an agency's use of guidance documents. But the key language was not original with me. What I did was to draw directly on guidelines that I knew had been promulgated by broadly representative institutions in the field of federal administrative law to explain appropriate constraints on guidance documents. These included a 1992 recommendation of the Administrative Conference of the United States (ACUS),'°^ a 1993

'"" Although I made contributions to section 311, as described in the next section of this article' the committee agreed on the basic nature of its approach to guidance documents before I became an advisor to it.

'" The notion of a trade-off between the agency's decision to forgo notice and comment at the outset and the increased procedural burdens that it thereby acquires at the implementation stage is a familiar theme in this context. "As Donald Elliott has said, agency attentiveness to parties' arguments must come sooner or later. 'As in the television commercial in which the automobile repairman intones ominously "pay me now, or pay me later," the agency has a choice ' " Am. Mining Cong. V. Mine Safety & Health Admin., 995 F.2d 1106,1111 (D.C. Cir. 1993) (quoting E. Donald Elliott, Re-Inventing Rulemaking, 41 D U K E L . J . 1490, 1491 (1992)). For elaboration, see David L. YrankWn, Legislative Rules, Nonlegislative Rules, and the Perils of the Short Cut, 120 YALE L.J. 276, 280, 291, 298-99 (2010).

"^ ACUS Recommendation 92-2, supra note 97, at 30,103.

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ABA resolution,'^'^ and the "Good Guidance Practices" bulletin issued in 2007 by the Office of Management and Budget (OMB)."^^ HopeñiUy, the teachings distilled from these sources will be seen as balanced and practical by most observers.

The most fundamental of the section 311 obligations is in subsection (b): when an agency applies a guidance document to a person, it must "afford the person an adequate opportunity to contest the legality or wisdom of a position taken in the document" and "may not use a guidance document to foreclose consideration of issues raised in the document."'^^ This principle is based directly on the language of the ABA resolution just mentioned.'"^ It is ñinctionally similar to the conventional binding norm test noted above.'°^ However, instead of burying this issue in debates over the definition of a nonlegislative rule, section 31 l(b) brings the issue out into the open in explicit, statutory terms. Agencies can therefore take the first crack at determining what procedural avenues add up to a fair opportunity to make one's case, but the courts will then be able to exercise oversight over these determinations.

Section 311 (b) should be interpreted to allow an agency to refer to a guidance document in its proceedings if it also recognizes that it has leeway to depart from the document.'"^ Ultimately, determinations as to the ways in which an agency may make use of

'"" Recommendation 120CoftheABA, 118 ANN. REP. A.B.A. 380, 380 (Aug. 1993) [hereinafter^5^ Recommendation 120C].

""̂ See Final Bulletin for Agency Good Guidance Practices, 72 Fed. Reg. 3432 (2007) [hereinafter OMB Bulletin]. I also participated in drafting the official comment accompanying section 311. The comment contains extensive citations to the case law and academic literature on guidance documents. See 2010 MSAPA § 311 cmt. It should be helpftjl as a guide to interpretation of the section. Some of these research references are repeated below.

'"'' ABA Recommendation 120C, supra note 104, at 380. '"^ See supra notes 98-99 and accompanying text. '°^ See 2010 MSAPA § 311 cmt (citing Steeltech, Ltd. v. EPA, 273 F.3d 652,

655-56 (6th Cir. 2001); Panhandle Producers & Royalty Owners Ass'n v. Econ. Reg. Admin., 847 F.2d 1168, 1175 (5th Cir. 1988); Am. Cyanamid Co. v. State Dep't of Envtl. Prot., 555 A.2d 684, 693 (N.J. Super. Ct. App. Div. 1989)). See generally Ronald M. Levin, Nonlegislative Rules and the Administrative Open Mind,A\ DUKE L.J. 1497,1499-1502(1992) [hereinafter Levin, Ope« Mwc/]; John F. Manning, Nonlegislative Rules, 72 GEO. WASH. L . REV. 893, 933-34 (2004).

2011] 2010 MSAPA RULEMAKING 879

guidance documents, short of giving them "binding" effect, will depend on the circumstances, but the gradual accretion of judicial precedents construing section 311(b) should serve to narrow the range of uncertainty. As the official comment points out, the matter may also lend itself to agency rulemaking to implement section 311(b)."" If such a rule survives judicial challenge, other agencies will be able to emulate it; if it does not, the agency will have the opportunity to amend it in light of the court's opinion."'

Administrators might reasonably object that the requirement to provide an opportunity for challenge is excessive in relation to extremely informal pronouncements that agencies may generate in the course of their operations. The MSAPA takes account of the agency's need for flexibility, however, by incorporating into the definition of "guidance document" some of the same exclusions as applied to the definition of "rule." "^ For example, "a statement that concerns only the internal management of an agency and which does not affect private rights or procedures available to the public" is neither a rule nor à guidance document for 2010 MSAPA purposes. ' ' ̂

Section 31 l(c) provides that an agency guidance document may give binding instructions to staff members if the agency's procedures also allow the affected person to contest the position in the document "at an appropriate stage in the administrative process.""'* This provision is based directly on the OMB Bulletin"^ and the ACUS

""§311 cmt. '"Id "' § 102(14) (defining "guidance document" and listing the exclusions from

2010 MSAPA § 102(30)(A)-(D)). " ' § 102(14), (30)(A). "'' § 311(c) ("A guidance document may contain binding instructions to

agency staff members if, at an appropriate stage in the administrative process, the agency's procedures provide an affected person an adequate opportunity to contest the legality or wisdom of a position taken in the document.").

' " OMB Bulletin, supra note 105, at 3436-37 (noting that significant guidance documents should not contain "mandatory language . . . unless . . . the language is addressed to agency staff and will not foreclose consideration by the agency of positions advanced by affected private parties"). This language was, in fact, suggested to OMB by the ABA Administrative Law Section in comments submitted on the draft bulletin.

880 WIDENER LAW JOURNAL [Vol.20

recommendation."^ The idea here is that, even though a guidance document cannot carry the force of law, the agency should not be required to entertain challenges to it at every level of the implementation process. Low-level staff can be directed to advise challengers to speak to their supervisor or to appeal to a higher level. The staff should, however, be instructed not to tell a member of the public that the agency's policy is set in stone, even if they personally have no discretion to depart from it.

Incidentally, an aspect of section 311 that may surprise some readers is that it does not distinguish between interpretive rules and policy statements. For substantive review purposes, of course, a court will naturally treat issues of law (usually associated with interpretive rules) differently from issues of discretion (usually associated with policy statements). For purposes of defining agencies' procedural obligations toward these two types of documents, however, it is not clear that the distinction serves a useful purpose. " ̂ In both cases, the agency has an interest in advising the public of its positions and inducing its employees to adhere to those positions. And in both cases, regulated persons have an interest in receiving a fair opportunity to urge the agency to pursue a different path from the one that it is inclined to take. If the agency treats the guidance document as binding, the constraining effect will be similar regardless of whether the document is labeled an interpretive rule or a policy statement. From a functional standpoint, therefore, the 2010 MSAPA's treatment of these two types of nonlegislative rules under a common framework as guidance documents has considerable appeal. Indeed, other modem authorities have already taken substantial steps in that direction.

"* ACUS Recommendation 92-2, supra note 103, at 30,103 (recommending that an agency should be able to "mak[e] a policy statement which is authoritative for staff officials in the interest of administrative uniformity or policy coherence").

"^ See Levin, Open Mind, supra note 109, at 1503-07. "* Among the institutional pronouncements that served as models for section

311, see supra notes 103-105 and accompanying text, the earliest was the ACUS recommendation, which was limited by its terms to policy statements and was silent about interpretive rules. The subsequent ABA recommendation, however, addressed agencies' treatment of "nonlegislative rules" and did not distinguish between the two varieties of such rules. Finally, the OMB Bulletin also treated interpretive rules and policy statements identically in almost all respects. The exception was a

2011] 2010 MSAPA RULEMAKING 881

C. Other Guidance Requirements

Section 31 l(d) makes the point that a guidance document should be reliable. If an agency proposes to depart ft-om a position expressed in the document, it must explain this decision and justify the departure in light of any reliance interests."^ The duty to explain departures from guidance documents came from the ABA resolution'^" and is consistent with general principles of administrative law under which, as the official comment accompanying this subsection points out, "an agency's failure to reasonably explain its departure from established policies or interpretations renders its action arbitrary and capricious on judicial review."'^' The drafting committee then added the additional language in section 31 l(h) requiring the agency to explain why the need for that departure outweighs the affected person's reliance

comment that agency staff members who draft interpretive rules, as distinguished from policy statements, may freely use mandatory terms like "shall" and "must." OMB Bulletin, supra note 105, at 3436-37. This is a sensible distinction that does not reflect adversely on the MSAPA model. Naturally, an agency will often couch its interpretations in mandatory language for the simple reason that the agency's position is that the statute or regulation contains a mandatory obligation. However, the fact that the agency takes the position that a statute contains a certain command does not necessarily mean that it should be entitled to enforce that view without allowing persons who disagree with it to contest it at the administrative level. Rather, it suggests that when a court considers whether the agency has "afford[ed] the person an adequate opportunity to contest the legality or wisdom of [the] position taken in the document," 2010 MSAPA § 31 l(b), it will probably need to look primarily at the agency's actual practices when it seeks to determine whether the interpretation has been or will be applied as a binding norm.

"^ § 31 l(d) ("If an agency proposes to act in an adjudication at variance with a position expressed in a guidance document, it shall provide a reasonable explanation for the variance. If an affected person in an adjudication may have relied reasonably on the agency's position, the explanation must include a reasonable justiflcation for the agency's conclusion that the need for the variance outweighs the affected person's reliance interest.").

"° ABA Recommendation I20C, supra note 107, at 380. '" See §3\\ cmt. (citing Yale-New Haven Hosp. v. Leavitt, 470 F.3d 71,

79-80 (2d Cir. 2006)). The comment adds: "It has been said that a guidance document should constrain subsequent agency action in the same manner that the agency's adjudicative precedents do." Id. (citing Manning, supra note 109, at 934-37; Peter L. Strauss, The Rulemaking Continuum, 4\ D U K E L . J . 1463,1472-73, 1486(1992)).

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interests.'^^ That action demonstrates the importance that the committee attached to the idea that regulated persons should, at least presumptively, be able to depend on the advice that agencies provide in their advisory pronouncements. The MSAPA thus refiects the dualistic nature of guidance documents: they should be dependable (subsection (d)) but not too dependable (subsection (b)). This is a challenging line to draw, but at least section 311 brings the challenge out into plain view.

Subsection (d) serves, in a way, as a substitute for an early proposal by the drafting committee that a guidance document, although nonbinding on private parties, should nevertheless be binding on the agency that issues it.'̂ ^ There is at least some authority for this view in the administrative law literature,'̂ "* and the 1981 MSAPA arguably supported it.'̂ ^ However, several commissioners of the ULC objected to this proposal. They pointed out that it was inconsistent with the (well-founded) proposition that a guidance document lacks the force of law and is not binding. Indeed, to hold that the agency is 'bound' would necessarily mean that persons who could potentially benefit from persuading the agency to take a different position would also be 'bound.' Thus, these

'" The comment notes that this requirement also has roots in principles of judicial review for arbitrary and capricious action. § 311 cmt. (citing Heckler v. Cmty. Health Servs. of Crawford Cnty., Inc., 467 U.S. 51, 60 n.l2 (1984) ("[A]n administrative agency may not apply a new [case law] rule retroactively when to do so would unduly intrude upon reasonable reliance interests."); Miguel-Miguel v. Gonzales, 500 F.3d 941, 951 (9th Cir. 2007); Epilepsy Found, of Ne. Ohio v. NLRB, 268 F.3d 1095,1102 (D.C. Cir. 2001); Microcomputer Tech. Inst. v. Riley, 139 F.3d 1044, 1050 (5th Cir. 1998)).

"^ See 2010 MSAPA § 310(c)-(d) (2007 Annual Meeting Draft) ("A guidance document binds the agency, but is advisory to, and does not bind, any other person," and a "reviewing court . . . may enforce the guidance document against the agency."), available at http://www.law.upenn.edu/blL'archives/ulc/msapa/ 2007annualmeeting_draft.htm.

'"^ See Realty Grp., Inc. v. Dep't of Revenue, 702 P.2d 1075, 1079 n.3 (Or. 1985); see also BERNARD SCHWARTZ, ADMINISTRATIVE LAW § 4.9, at 188 (3d ed. 1991) ("The considerations that make nonstatutory procedural regulations binding on the agency apply as well to interpretive regulations.").

"^ The argument for this result, apparently never tested in litigation, was that the 1981 MSAPA allowed a court to set aside "agency action, other than a rule, that is inconsistent with a rule of the agency," and a nonlegislative rule was a "rule" for purposes of this clause. See 1981 MSAPA §§ 1-102(10), 5-116(c)(8)(ii).

2011] ; 2010 MSAPA RULEMAKING 883

commissioners argued, if such a person can show the agency that the guidance document is mistaken, the agency should be free not to follow it. The final 2010 MSAPA reflects the better view that a guidance document is indeed not binding, even on an agency, but that the agency must justify its departure from such a document, as provided in subsection 31 l(d).

Section 311 contains a few other provisions, including publication requirements, but I will draw attention to just one more. Under section 311 (h), anyone may petition an agency to revise or repeal a guidance document and the agency must respond to the petition in a set time period (for example, sixty days).'^^ This provision is based on a proposal by Professor Nina Mendelson.'^' As she points out, the agency's prerogative to issue a guidance document without notice and comment can potentially create a problem for persons who are the beneficiaries of a regulatory scheme, such as environmentalists or consumers.'^^ It may leave them without any opportunity to engage the agency on issues that concern them, because they are not likely to be the targets of an enforcement proceeding. Section 311(h) seeks to fill this gap by enabling the beneficiary to be heard through a device that closely resembles a rulemaking petition and can potentially provide a pathway to judicial review. The opportunity to petition under section 311(h) is not, however, limited to regulatory beneficiaries. It can be invoked by anyone. This procedure is not very different from one that probably already exists under federal law. Section 553(e) of the federal APA confers a right to petition for rulemaking, and under that act, unlike the 2010 MSAPA, guidance documents fall within the definition of "rule.""^

"^ 2010 MSAPA § 31 l(h) ("A person may petition an agency to revise or repeal a guidance document. Not later than [60] days after submission of the petition, the agency shall: (1 ) revise or repeal the guidance document; (2) initiate a proceeding to consider a revision or repeal; or (3) deny the petition in a record and state its reasons for the denial.").

'" See Nina A. Mendelson, Regulatory Beneficiaries and Informal Agency Policymaking, 92 CORNELL L. REV. 397,438-44 (2007).

'̂ ^ M at 414-33. '" See Interpretive Rules of General Applicability and Statements of General

Policy (Recommendation No. 76-5 of the Admin. Conf of the U.S.), 41 Fed. Reg. 56,769, 56,770 (Dec. 30,1976) (noting that § 553(e) of the federal APA "allow[s]

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How well section 311 will work remains to be seen. It might conceivably stimulate too much litigation against guidance documents, because it will codify agencies' responsibilities into APA- enforceable duties. Or, perhaps, it might give rise to too little litigation, because it will enable courts to rectify misuses of guidance documents without necessarily invalidating the document in question. Regardless, it should prove to be an interesting experiment, with potential applicability at the federal level if the experiment should prove successful.

IV. MANDATORY RULEMAKING

The 2010 MSAPA eliminates two of the 1981 Act's most provocative provisions relating to rulemaking. Subsection 2-104(3) of the earlier Act had required agencies to "adopt rules . . . embodying appropriate standards, principles, and procedural safeguards that the agency will apply to the law it administers."'^^ Subsection 2-104(4) had required agencies to "adopt rules to supersede principles of law or policy lawfully declared by the agency as the basis for its decisions in particular cases."'^' Each of these obligations was to be fulfilled "as soon as feasible and to the extent practicable" and was judicially enforceable. They represented a strong challenge to the usual administrative law principle that the choice between rulemaking and adjudication as vehicles for policy formation should rest almost entirely within the discretion of the agency.'^^ Indeed, that tradition has not been maintained as faithfully in state court cases as it has in the federal courts.'"

any person to petition at any time for the amendment or repeal of... an interpretive rule or statement of general policy").

'̂ ° 1981 MSAPA §2-104(3). '^' § 2-104(4). '^' See, e.g., NLRB v. Bell Aerospace Co., 416 U.S. 267, 294 (1974) ("[T]he

choice between rulemaking and adjudication lies in the first instance within the Board's discretion."); SEC v. Chenery Corp., 332 U.S. 194,202-03 (1947) ("[T]he choice made between proceeding by general rule or by individual, ad hoc litigation . . . lies primarily in the informed discretion of the administrative agency.").

' " For the pertinent case law, see MICHAEL ASIMOW & RONALD M . LEVIN, STATE AND FEDERAL ADMINISTRATIVE LAW 349-54 (3d ed. 2009).

2011] 2010 MSAPA RULEMAKING 885

However, statutory "presumptive rulemaking" mandates like those of the 1981 MSAPA have not met much acceptance in the intervening three decades. Florida has adopted a statute'^'' along the lines of subsection (3) and vigorously enforces it, but this experiment has had a number of unintended and not necessarily beneficial collateral consequences.'^^ Utah and Iowa have also adopted mandatory rulemaking provisions,'^^ but these statutes have had little visible impact. Legislatures apparently have recognized that, in general, agencies are now accustomed to the rulemaking process and have no ingrained resistance to resorting to it. Thus, the case for imposing judicially enforceable mandates to authorize judges to second-guess the agencies' choices is weaker today than the proponents of presumptive rulemaking assumed in an earlier day. The omission of the presumptive rulemaking provisions from the 2010 Act is, therefore, not surprising.

Perhaps less predictably, the new MSAPA rolls back even the less sweeping mandatory rulemaking provisions that had been codified in the 1961 Act and then carried forward in the 1981 Act. Those provisions required agencies to adopt by rule descriptions of "the general course and method of its operations and the methods whereby the public may obtain information or make submissions or requests," as well as "the nature and requirements of all formal and informal procedures available."'" Early drafts of the 2010 MSAPA contained similar requirements. However, the ABA Administrative Law Section objected. The Section argued that the main purpose of these provisions was to promote transparency in government operations, and this objective could be achieved by a requirement to publish the specified information. Required rulemaking, the Section's letter suggested, "would tend to deter agencies from experimenting with new procedures or modifying procedures that have proved

. STAT. § 120.54(l)(a)(2010). '̂ ^ See Jim Rossi, The 1996 Revised Florida Administrative Procedure Act: A

Rulemaking Revolution or Counter-Revolution?, 49 ADMIN. L. REV. 345, 346-53 (1997).

'̂ •̂ IOWA CODE § 17A.3(1)(C) (2011); UTAH CODE ANN. § 63G-3-201

(LexisNexis 2008). ' " 1981 MSAPA § 2-104(1 )-(2); 1961 MSAPA § 2(a)(l)-(2).

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questionable in light of experience."'^^ The drafting committee accepted this critique, and so the final MSAPA directs agencies to "publish" the information.'^^ This revision brings the 2010 MSAPA into conformity with the federal APA, which has from the outset phrased the corresponding provision as an obligation to publish rather than a rulemaking mandate.''*"

V. CONCLUSION

The drafting of Article 3 of the 2010 MSAPA gave its authors an opportunity to make a broad reassessment of the modem rulemaking process. In many, perhaps most, respects the upshot of this reappraisal was a conclusion that the dominant rulemaking model in this country, as exemplified by the federal system, furnished a satisfactory baseline, and there was no particular reason why the states should depart from it. In some instances, however—most notably the section on guidance documents—Article 3 is boldly innovative and experimental.

The package as a whole now awaits consideration by the state legislatures. Rarely do the states have so propitious an opportunity to reexamine and modernize their respective rulemaking processes. I hope that many states will avail themselves of this opportunity. Undoubtedly, their responses to the 2010 Act will vary. Even so, their collective experiences with the rulemaking procedures of the Act will provide a foundation for renewed deliberation when the next version of the MSAPA is written.

See Frisby Letter, supra note 64, at I. 2010 MSAPA § 203(l)-(2). 5 U.S.C. §552(a)(l) (2006).

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