8 months ago

Can agencies avoid congressional oversight by adopting rules without public notice?

By Jonathan Wood Attorney

As absurd as the titular question seems to ordinary people, an E&E News story quotes several law professors claiming the answer is “yes.” The story is a detailed analysis of the Red Tape Rollback project that Pacific Legal Foundation has launched with its partners—Heritage Foundation, Club for Growth, Competitive Enterprise Institute, and the Buckeye Institute.

This is an important question about the reach of the Congressional Review Act, which forbids agencies from enforcing any “rule” unless they first submit them to Congress for its review. Once submitted, Congress has sixty working days to disapprove the rule using expedited procedures. If a rule is disapproved by Congress, and the resolution is signed by the President, the rule cannot go into effect and the agency is barred from issuing any “substantially similar” rule in the future.

The statute defines “rule” broadly to include:

the whole or a part of an agency statement of general . . . applicability and future effect designed to implement, interpret, or prescribe law or policy . . .

On its face, that definition sweeps in anything agencies use to regulate, including both formal notice-and-comment regulations and informal guidance documents and policy memoranda. Agencies have adopted thousands of these guidance documents and other informal rules without submitting them to Congress. Many of these are profoundly significant. We’re compiling a growing list of them on RedTapeRollback.com.

But according to the E&E News piece, some law professors insist that this growing mass of informal rules can’t be subject to congressional review:

Georgetown Law’s [David] Vladeck balked at the notion that agencies would be required to send guidance documents to Congress. “Guidance documents are not rules,” he wrote in an email. “The law is clear that guidance documents are not rules because they impose no enforceable obligations.”

The definition of “rule” used in the CRA is taken directly from the Administrative Procedure Act of 1946, which defines a “rule” broadly.

“He’s right,” Richard Pierce, a distinguished law professor at George Washington University, said. “I testified when Congress passed the CRA, and I urged Congress to narrow the definition of rule because I knew it was absurd to expect agencies to submit every guidance to Congress.”

Actually, they’re both wrong. It’s true that the CRA and the Administrative Procedure Act use very similar definitions for “rule.” But the professors have erred in confusing whether something is a “rule” with whether it must be formally adopted through notice-and-comment procedures.

Under the APA, informal rules like guidance documents do not go through this formal process. But that’s not because they’re not rules. Rather, the APA explicitly exempts some types of rules from the process. In particular, the statute exempts “interpretative rules, general statements of policy, [etc.]” from notice and comment. As a result, the D.C. Circuit has explained, “‘[i]nterpretative rules’ and ‘policy statements’ may be rules within the meaning of the APA . . . although neither type of ‘rule’ has to be promulgated through notice and comment rulemaking.” The CRA, on the other hand, does not exempt these rules from the requirement that all rules be reported to Congress before they can go into effect.

I’m surprised that a law professor would say it’s absurd that an agency would have to report these informal rules to Congress. Thousands of these informal rules regulate  ordinary people all the time. How can it be absurd to demand agencies send these rules to Congress but not absurd to expect us to know and abide by the thousands of informal rules that apply to us?

Although we think the esteemed professors have erred in their legal analysis, the statute makes clear that it is ultimately up to Congress to decide what rules to disapprove under the CRA. If an agency sends up a guidance document and Congress uses the CRA to disapprove it, no one could challenge that. The statute expressly limits judicial review of Congress’ use of the CRA to reduce overregulation, including by preventing courts from second-guessing its decisions whether a rule is a “rule.”

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