David Pozen, Freedom of Information Beyond the Freedom of Information Act
, 165 U. Pa. L. Rev.
1097 (2017), available at SSRN
The literature on the Freedom of Information Act is replete with familiar claims about FOIA’s shortcomings. It takes too long to get a response. Agencies over-withhold records. The exemptions to mandatory disclosure are too broad. Congress fails to adequately fund FOIA offices. Judicial remedies are difficult to pursue and often unavailing. And as I have argued, FOIA is overtaken by commercial and individual uses that do not promote democratic accountability. But rarely does scholarship in this area provide a compelling critique of the underlying premise of FOIA: that the Act, if functioning as envisioned, promotes the ideal of democratic accountability.
David Pozen’s Freedom of Information Beyond the Freedom of Information Act has compellingly questioned this fundamental assumption, giving me more pause than anything else I have read in quite some time. In essence, Pozen argues that FOIA acts as a regressive, not a progressive, tool, hobbling the administrative state in its missions to protect the public’s health, safety, and opportunities, all while rubber stamping the excess of secrecy that characterizes the national security state where transparency may be most needed.
The work begins by situating FOIA within a suite of disclosure mechanisms, honing the point that FOIA is not the only transparency tool that might achieve oversight goals. For example, affirmative disclosure regimes provide ex ante requirements that agencies publish certain categories of records. In other instances, the legal effect of agency documents can be conditioned on prior publication. Whistleblowing and leaking promote transparency by acting as institutional safety valves. Meanwhile, in carrying out its agency oversight activities, Congress often requires agencies to publicly share information. Yet, as the article details, among these various methods of forcing disclosure of government activities, FOIA stands alone in being divorced from any public policy goal other than disclosure for disclosure’s sake.
Because FOIA places control over the objective of disclosure in the hands of any member of the public who wants to avail themselves of the right to request records, without regard to motive, the right to records is decoupled from any vindication of a normative public good. Indeed, my own work documents how FOIA is largely used to advance private, not public, interests, including commercial uses of FOIA (see FOIA, Inc.) and individuals seeking their own records (see First-Person FOIA). Taking this insight one step further, the most interesting and central claim of Pozen’s article is that “FOIA ultimately serves to legitimate the lion’s share of government secrecy while delegitimating and debilitating government itself.” (P. 1100.)
As to legitimating secrecy, national security is the area where transparency and public oversight is arguably most needed, but FOIA is doing little to combat the problem. Well-documented overuse of authority to classify records in the interests of national security and the near complete judicial deference granted to agency’s decisions to withhold on the basis that records are classified combine to blanket the national security state with exemptions to the law’s requirements. Despite occasional wins under FOIA by watchdog groups seeking national security information, FOIA has done markedly little to curb ever growing national security secrecy norms.
On the other side of the ledger, FOIA imposes significant costs on agencies. Some of those which Pozen lists are familiar. Agencies not only expend real dollars complying with the law (in sums that are not trivial), but also divert a substantial amount of program staff’s time to comply with FOIA, thereby presenting an opportunity cost. Moreover, FOIA frequently interjects procedural barriers to internal deliberation and cooperation with private entities, because government officials and the private parties with whom they interact are reticent to freely communicate in writing where the possibility of public disclosure looms large.
But the most interesting piece to me was the reputational costs to agencies. With FOIA used as a tool to embarrass agencies and make them appear incompetent, the legitimacy of government suffers in the eyes of the public. Worse yet, the fact that insufficient resources are dedicated to FOIA offices sets agencies up to fail at adequately responding to FOIA requests, thereby further harming the reputation of the agency in the eyes of the public when it avails itself of the law. Given that, for the reasons described above, national security agencies largely get a FOIA pass, these costs end up being borne most heavily by non-security agencies—that is, those agencies serving the welfare side of the state to protect health, environmental, safety, and public benefits. Seen this way, FOIA may operate as a regressive, not progressive, tool for democratic accountability.
The article ends by deftly acknowledging other possible benefits of FOIA not accounted for by an analysis strictly focused on what documents FOIA pries loose. And it suggests various ways in which alternatives to a reactive, privately driven transparency model might look like, including greater reliance on the other mechanisms originally set out as part of the transparency landscape.
If FOIA is potentially increasing our complacency about national security secrecy all while undermining the important work of government agencies concerned with public welfare missions, then the costs are far greater than monetary, and reforms all the more urgent. While I am not yet ready to abandon the idea of a request-and-response model of government transparency writ large, after Pozen’s article I will have to radically rethink my overall defense of FOIA. I suspect anyone else who writes and practices in the area will be doing the same.
Kristin Hickman and Nicholas R. Bednar, Chevron's Inevitability
, 85 Geo. Wash. L. Rev.
5 (2017), available at SSRN
Chevron deference is the cause of more wasted energy than any other doctrine in administrative law. True, the hopes and illusions that spur Chevron’s opponents onwards are perfectly intelligible. In some cases, the cause is a fervent, if cockeyed, constitutional vision; in other cases, a principled free-market libertarianism that becomes associated with opposition to Chevron (even though it is hardly obvious that Chevron has any intrinsic pro-regulatory bias); or a principled legalistic concern that judges, rather than agencies, should “say what the law is” (even though the law may itself mandate deference). But the result is so much less than the effort. A handful of lower-court judges, including then-Judge Gorsuch, have criticized the doctrine on constitutional grounds; so has one Justice, Clarence Thomas. But of course Justice Gorsuch might or might not see the issue the same way from his new seat, and the Court’s other Justices range themselves somewhere between “comfortable with the prevailing approach,” on one end of the spectrum, and “inclined to cabin Chevron around the edges,” on the other end. But there is no realistic prospect of a majority to overrule Chevron or even to narrow it to death.
Hickman and Bednar’s calm, learned and commonsensical paper explains why Chevron isn’t going anywhere. Part of the problem is that “Chevron” denotes a particular case decided in 1984, but connotes a far broader and more enduring phenomenon of deference, one that results from long-run structural and institutional causes. Deference to executive officials on questions of law predates Chevron by decades, at the least. With convincing examples, including an illuminating analysis of AT&T Co. v. United States (U.S. 1936), Hickman and Bednar show that there has long been a category of cases, involving difficult questions of public policy, in which judges know that they don’t know enough to spell out in detail what exactly ambiguous statutes should mean. In such cases, “deference” is just shorthand for the entirely pragmatic thought that if the front-line decision maker hasn’t obviously gone off the rails, the judges aren’t likely to make things better by substituting in their own judgments, which may perhaps be ill-informed, eccentric, harmful or politically unacceptable.
It is not that Chevron will necessarily remain nominally static over time. No one will be surprised if the Justices add something here and subtract something there, and the strength of deference doctrines fluctuates or cycles over time, within a constrained range. But some recognizable version of Chevron will persist, buoyed up not so much by legal theorizing but by the realities of the Justices’ institutional situation and knowledge of their own limitations. An implication of this analysis is that even officially overruling Chevron-the-case by statute — assuming that is constitutionally valid, another hardly obvious proposition — would do little to bar Chevron-style deference as a general judicial practice, de facto at least. Whatever Congress says at the meta-level, the judges simply will not read ambiguous statutes to dictate the details of EPA policymaking choices. At most deference could be driven underground, an unhealthy situation.
The authors’ main point, however, is that Chevron is in the end merely a standard of review — a legal framework that judges use to structure their own approach to review of legal questions. (I will return to the general concept of a legal framework shortly.) Hickman and Bednar demonstrate that the Chevron review framework is a standard in the rules-and-standards sense. It is sufficiently flexible to include and subsume a range of approaches from a range of Justices. Since 1984, the Court has seen a Scalia version of Chevron, a Breyer version, a Roberts version, and others, all co-existing and partly overlapping in time. On doctrinal dimensions, various approaches have treated Chevron more or less formalistically, allowing or rejecting legislative history and purposivism; have variously incorporated or rejected substantive canons of interpretation at various stages of the analysis; have differed about the relationship between Chevron and judicial precedents; and have even treated Chevron as having multiple steps or only one step. Whatever these differences in important detail, all these Justices and their colleagues have bought into the larger framework. Chevron has served as a kind of governing regime, a broad and open-ended constitution for judicial deference, one that tolerates and incorporates a diversity of approaches in a modus vivendi.
If this is so, what explains the recent spate of opposition to Chevron? The authors conclude that it is largely a case of misplaced or displaced anxiety. The real worry of Chevron’s opponents is expansive delegation by Congress. (Technically speaking, what is at issue are grants of statutory authority, not “delegation” in the constitutionally invalid sense of “delegation of legislative power.” Under current law, and in my view under the Constitution rightly understood, these grants do not constitute an invalid delegation at all. However “delegation” is a common shorthand here, and it is the terminology that Hickman and Bednar use, so I will follow suit.) Absent delegation, agencies would lack the relatively open-ended discretion that triggers Chevron’s opponents. Congress sometimes does sharply limit agency discretion; the opponents would be better off spending their energy and resources on that dimension. Conditional on discretion being granted, Hickman and Bednar are entirely persuasive that nothing on earth will persuade the judges to decide everything for themselves, although judges may and will decide to intervene in particular cases for particular reasons.
Given the reality that (some recognizable version of) Chevron will persist indefinitely, what if anything of enduring interest can we salvage from the orgy of pointless tree-killing that is the Chevron literature, especially the anti-Chevron subset of that literature? Hickman and Bednar, quite understandably, focus on their immediate topic, but there is a hint of a broader theoretical point in the paper when they compare the Chevron framework to the Erie doctrine, which in their view has a similarly flexible and overarching character. Let me amplify this hint, although with clear disclosure that Hickman and Bednar do not themselves do so.
The right doctrinal genre within which to situate Chevron, I mean to suggest, is the legal framework — paradigmatically, a doctrine with multiple parts, prongs or components that internally accommodates competing concerns. Frameworks have staying power insofar as they are both flexible and coordinating. They must be flexible to appeal to judges with competing views, who can all articulate their positions within the framework. They are coordinating insofar as they provide a common language within which those judges may articulate their concerns and render them mutually intelligible. Too much flexibility and open-endedness will produce radical indeterminacy and thus undermine coordination. Conversely, overly confining doctrine will enhance coordination but so reduce flexibility as to alienate a critical mass of judges, who will start to object to the framework itself. Doctrinal frameworks typically persist when, and because, they strike a plausible balance between these twin objectives.
Why is it, exactly, that although Justice Hugo Black wrote for the Court in Youngstown Sheet & Tube Co. v. Sawyer, everybody remembers, recites and applies the approach of Justice Jackson’s concurrence, with its three categories? The reason is that Jackson’s concurrence supplied a capacious-but-coordinating legal framework that allows various judges on various occasions to express the major competing concerns about the relationship between legislative and executive power. The framework can and has been invoked by judges hospitable to executive power and by judges anxious about executive overreach. It has been used by opinions invalidating legislation (or executive action) and by opinions sustaining legislation (or executive action). It has been all things to all judges, but it has the great virtue of giving them a conceptual structure within to speak to one another and disagree with each other.
Legal frameworks, in this sense, are not only a doctrinal genre but also a rhetorical one, albeit a specialized rhetorical genre of use largely within the professional community of lawyers. They enable a kind of persuasive communication between and among judges, who each may pursue their individual ends within the framework. Non-legal frameworks serve similar functions in other domains; consider, as arguable examples with the hallmarks of flexibility and coordinating power, the platforms of the major political parties, the Generally Accepted Accounting Principles (GAAP), and the Nicene Creed.
If all this is correct, it helps to explain why Chevron became important in the first place and why Hickman and Bednar are able to argue so plausibly that (some recognizable version of) Chevron will persist. It also helps to see that deference on legal questions, on the one hand, and Chevron, on the other, are distinct topics that need to be disentangled. Deference arose for institutional reasons long before Chevron and would persist even if Chevron-as-precedent were overruled. It doesn’t at all follow, however, that Chevron adds nothing to deference. On the contrary, as Hickman and Bednar’s memorable contribution suggests, Chevron adds an indispensable legal framework for channeling, coordinating and making explicit the practice of judicial deference that would occur in any event, whether in articulate or inarticulate form.
Wendy Wagner, William West, Thomas McGarity & Lisa Peters, Dynamic Rulemaking
, 92 N.Y.U. L. Rev.
183 (2017), available at SSRN
Retrospective review remains a hot topic in administrative law. The Administrative Conference of the United States and the American Bar Association have both recently advanced recommendations to improve agency review of existing regulations. As I have explored elsewhere, the Portman-Heitkamp Regulatory Accountability Act would amend the Administrative Procedure Act to encourage retrospective review. The Obama Administration had also encouraged it, and the Trump Administration has embraced an even more aggressive form of retrospective review in its “one-in, two-out” regulatory budgeting executive order.
Despite bipartisan calls for more-rigorous retrospective review, we have little empirical insight into how agencies review regulations today. Enter a groundbreaking new study by Wendy Wagner, William West, Thomas McGarity, and Lisa Peters. In Dynamic Rulemaking, which was published in the NYU Law Review, the authors present the findings of their study of the rulemaking process with respect to four programs at three agencies: the Environmental Protection Agency (EPA), the Federal Communications Commission (FCC), and the Occupational Safety and Health Administration (OSHA). In total, they analyze 183 parent rules and all 462 revisions of those rules since the 1970s. This article is a must-read for those of us interested in agency rulemaking.
The study’s headline is that the agencies revised nearly three-fourths of original rules at least once (73%), if not multiple times. Indeed, revised rules (462 rules) outnumbered parent rules (183 rules) by a factor of 2.5. In other words, for decades the EPA, FCC, and OSHA have been involved in substantial retrospective review of existing rules. Or, as the authors put it, “[t]he rich revision activity reveals a vibrant ‘culture’ of dynamic rulemaking that occurs without formal commands or directives, even in settings where those formal requirements are in place.” (P. 217.)
The depth and breadth of the authors’ analysis serve as a model for others to emulate. For example, they code for the extent of revision at issue, the means of soliciting public input, the apparent impetus for the revised rule, and the adequacy of the agency’s explanation for rule revision—just to name a few. They have also published online a dozen case studies on a small, medium, and large dynamic rulemaking from each agency program: EPA Air Toxics Small/Medium Rules, EPA Air Toxics Large Rule, EPA TSCA Rules, FCC Rules, OSHA Rules. These case studies are great resources for the classroom and for further research. But perhaps more importantly, they provide important qualitative texture for the study’s quantitative findings.
Consider one set of findings: the impetus for rule revision. As detailed in Figure 7, the preambles of the revised rules indicate that interest group input as well as petitions for rulemaking and motions for reconsideration triggered many revisions, whereas congressional, presidential, or judicial oversight appeared to play a lesser role. (P. 218, reproduced with permission below.)
As the authors explain, however, their qualitative case studies reveal that “courts were nevertheless an important force behind some of the more significant changes.” (P. 218.) The influence of Congress or the President on dynamic rulemaking, the authors note, “was slim or nonexistent in the vast majority of cases”—though the case studies illustrate several examples of congressional influence. (P. 219.) Notwithstanding presidential mandates for retrospective review in certain circumstances, moreover, the authors find that such an express requirement “was rarely cited as a trigger for revision.” (P. 220.) This wonderful mix of quantitative and qualitative analysis provides a much richer description.
What should we make of this phenomenon of “dynamic rulemaking”?
After developing a helpful typology of dynamic rulemaking in Part III, Part IV of the article sketches out the virtues and vices of dynamic rulemaking. As for the virtues, such dynamism underscores that the studied agencies are constantly reevaluating the wisdom of existing rules and modifying them to take account of changed circumstances, unexpected outcomes, and unintended consequences. These findings have obvious and important implications for theories of agency ossification in rulemaking.
As for the vices, dynamic rulemaking may take place through less-transparent processes than the original rule—often without public comment or centralized presidential review. One of the authors’ more provocative conclusions is that “at least some of this dynamism occurs in response to information provided formally or informally by regulated parties, with the diffuse public potentially on the losing end of the stick.” (P. 241.)
From these findings, the authors seem to express skepticism about calls for more-formalized, agency-wide retrospective review. In the Introduction, for instance, they contend that calls for more-formalized “retrospective review reflect the assumption that agencies are not already actively engaged in revising their regulations in light of real-world implementation experience and changes in the physical, economic, and political environments.” (Pp. 186-87.) In the Conclusion, they similarly argue that “the largely reactive process of dynamic rulemaking is arguably more efficient and reliable mechanism for identifying ‘unnecessary regulatory burdens’ than resource-intensive lookback requirements.” (Pp. 260-61.)
But those of us who support more-formalized, agency-wide retrospective review may alternatively read the study’s findings to provide some significant empirical support. After all, the study demonstrates that federal agencies can (and at least three do) engage in retrospective review on an ongoing basis. The study shows that the agencies believe their rules should not be static, but must be routinely updated. At the same time, however, the study reveals that retrospective review differs in substantial respects at the EPA, FCC, and OSHA. And, as noted above, the authors suggest that interest-group pressures may distort informal retrospective review.
That last finding merits further examination. If interest groups drive agency rule revision contrary to the public interest, more-formalized, agency-wide retrospective review is all the more important. But the same is true if this interest-group distortion turns out to be less of a problem than the authors suggest and many agencies already engage in effective retrospective review of their entire regulatory scheme. Under those circumstances, a more-formalized review process should not impose significant burdens on those successful agencies while producing substantial benefits for any agencies not already engaged in effective retrospective review through less-formal means.
In all events, the authors are cautious in advancing arguments for or against more-formalized retrospective review based on their study, refusing to generalize their findings beyond rulemaking with respect to the four programs at the three agencies analyzed in their study. Such caution is admirable. Perhaps most agencies already engage in the level of dynamic retrospective review this study uncovers at the EPA, FCC, and OSHA. That would be excellent news, especially if interest group pressure does not distort such review in a way that undermines the public interest. Although the authors’ study does not endeavor to assess the state of dynamic rulemaking across the modern administrative state more generally, it provides a critical empirical window into how three agencies approach retrospective review today.
Much more empirical and theoretical work needs to be done, and I hope this pioneering study will spark that further inquiry.
Robert C. Hockett & Saule T. Omarova, The Finance Franchise
, 102 Cornell L. Rev.
(forthcoming, 2017), available at SSRN
In The Finance Franchise, Bob Hockett and Saule Omarova take on the dual myths underpinning contemporary financial regulation: that capital is both inherently scarce and privately provided. They painstakingly document (and illustrate in simple graphics for those of us whose banking savvy is confined to remembering their ATM PIN number) the state’s role in the provision of financial products and services ranging from plain-vanilla loans to digital currencies. They reveal how, at base, all of these products and services depend on the full faith and credit of national governments to assume ultimate liability for privately-issued debt and to monetize privately-issued debt by allowing the putative private debt-holder to spend the debt proceeds as if they were currency.
In short, Hockett and Omarova demonstrate that because the state serves these two functions, “modern finance is not primarily scarce, privately provided and intermediated but is, in its most consequential respects, indefinitely extensible, publicly supplied, and publicly disseminated. At its core, the modern financial system is effectively a public-private partnership that is most accurately, if unavoidably metaphorically, interpreted as a franchise arrangement.” (P. 4.)
Why does this matter? Because, Hockett and Omarova argue, the myth of scarce private capital has impeded meaningful systemic regulation of the financial system and has justified policy choices, like austerity, that place control over the allocation of financial resources entirely in private hands. The myth also allows policymakers and those who benefit from inequity in the private distribution of capital to dismiss the resulting social harms as the “unavoidable cost that society must bear in return for a viable market economy.” (P. 3.) Hockett’s and Omarova’s franchise metaphor provides a basis for a “fundamental … attitudinal shift with respect to the proper balance between public and private interests, capabilities, and roles in finance and the broader economy.” (P. 64.) Specifically, it justifies an active role for the public, through the state, to make collective, political choices about the appropriate allocation of capital across the economy and to enforce those choices through regulation. The Finance Franchise does not present radically new financial regulation policies. Rather, its innovation is to understand that regulatory policies advocated elsewhere by the authors and others are unlikely to be adopted without a “comprehensive analytical and normative justification for thoroughgoing structural reform in the financial sector.” (P. 62.)
This struck me as an urgent insight for administrative law and regulatory scholars more broadly. The state has been largely absent from or actively resisted in much legal scholarship. The mine run of legal scholarship has simply ignored empirical and normative questions about the state’s role in markets, going about the routine work of analyzing doctrine and proposing regulatory programs based on some unarticulated set of background assumptions about the existence and nature of the state that might implement them. On the one hand, this approach seems unassailable given the state’s obvious presence in law and legal institutions like agencies and courts. On the other hand, there is reason to believe that the state’s role in regulation can no longer simply be assumed as a static background condition. Indeed, it has become a first-order question.
What kind of state would adopt the regulatory programs painstakingly crafted and persuasively proposed by regulatory scholars? Unfortunately, it turns out, not the kind envisioned by many of their colleagues, who have spent the last several decades resisting the state’s role in regulation. Since the mid-twentieth century, economists have theorized states and markets as distinct spheres of human activity and argued that well-functioning markets have superior regulatory capacities to states because of the informational and normative advantages they enjoy.
In this account, government regulation is justified only to correct market failures, and only to the extent that it does so, a significant limit on the type of regulatory role the state may play. New governance scholars have continued the project of distancing the state from regulation, arguing that private collectives like citizen groups and corporations are often better positioned than governments to generate and enforce norms. New economy scholars have taken this project to new heights, culminating in Gillian Hadfield’s recent paean to private ordering, Rules for a Flat World. Who needs the state when you have the crowd?
These legal scholars have plenty of company in their turn from the state. Every major social science discipline has had such a moment. The irony is that other disciplines long ago reconciled themselves to “bringing the state back in” to a place of theoretical and analytical prominence. Law has come late to this intellectual project, perhaps because the notion that the state ever left the law seems bizarre on its face. Most of us simply assume its existence as an essential and invariable background condition underlying our primary scholarly agendas. Hockett and Omarova are not so complacent. And in a world where the stroke of a pen may wipe out a generation of regulatory and administrative law, none of us should be. We should follow their lead in theorizing not just the law, but the kind of state that will implement it.
Miriam Seifter, Gubernatorial Administration
, 131 Harv. L. Rev.
(forthcoming, 2017), available at SSRN
The idea that state constitutions might provide terrain for comparative analysis that could shed new and important light on the federal Constitution is hardly a new one. But for those of us preoccupied with the study of Article II presidential power, it is hard to imagine a much more powerful illustration of that lesson than Miriam Seifter’s fruitful and creative study of what she calls “the modern regime of gubernatorial administration.”
Seifter demonstrates that, state variations notwithstanding, contemporary governors frequently enjoy an array of tools to direct administrative governance that, in important respects, presidents would envy. These include reorganization authority, the power to privatize government functions, and greater authority to influence independent state agencies than the President would have over federal counterparts. Governors typically have a more firmly grounded directive power over the policy content of administrative decision making. Moreover, because of overlap in the domains of state and federal regulatory concern, these authorities effectively give governors power to significantly “resist or advance key federal government programs.” (P. 19.)
Governors also typically have far greater power than does the President to formally re-tailor the handiwork of the legislative branch. Forty-four states vest governors with line-item veto authority, five of them extending beyond appropriations bills to non-appropriations legislation and eighteen more allowing the veto within appropriations bills to include substantive provisions. Besides exploring these differences, other important parts of Seifter’s study explain the daunting complexities that surround the interpretation of separation of powers principles at the state level.
As Seifter explains, the formal gubernatorial powers enumerated above are yet more impactful than their mere recitation implies because they are reinforced by other formal and informal elements of the institutional context in which governors usually operate – weaker legislative oversight, less bureaucratic pushback, and a state media environment poorly equipped to serve a critical watchdog function. There are some distinctive state-level checks, such as the common multiple-executive structure, the fact of federal legal supremacy, and the possibility of friction from referenda and ballot initiatives. Yet, as Seifter explains, the effect of these checks as constraints on gubernatorial maneuvering is uncertain and, in operation, may well offer governors political opportunities, as well as challenges. All told, the “authority and flexibility” (P. 7.) that modern governors enjoy have produced a new state-level “‘psychology of government’ in which governors understand their office to be a controlling one.” (P. 17.)
The penultimate section of the article explores the possible implications of Seifter’s findings for a series of hot public law issues – whether states are effective bulwarks against federal overreach, how gubernatorial administration adds nuance to theorizing about the “political safeguards of federalism,” identifying the costs and benefits of truly “energetic” executive government, spotting strengths and weaknesses in our institutions of legal and political accountability, and understanding the implications of state-level power for local democracy. Her findings are suggestive on all of them.
If I have any uncertainty about Seifter’s account, it is not with regard to her contemporary survey. I wonder only about the conventional view she implicitly accepts about the relationship between state and federal constitutional thinking in 1787. I do not doubt, as she relates, that the drafters who gathered in Philadelphia viewed the weak state governor model enshrined in early state constitutions as a template not to be followed. But in many relevant structural respects, the state constitutions drafted in the decades following the Philadelphia Convention still carried forward the constraints on executive control embedded in the earlier documents. They embraced these constraints notwithstanding the inclusion of executive power vesting clauses, faithful execution of the law requirements, and “opinions clauses” more or less identical to the language of the new federal Article II. The federal drafters may well have intended their use of these words to create a powerful form of unitary executive entirely at odds with gubernatorial models. But as I have argued elsewhere, it seems problematic to imagine that voters in the states who both ratified the federal constitution and adopted their respective state constitutions understood the implications of identical provisions in the two documents in radically disjunctive ways.
History, however, is not the primary focus of Seifter’s article. To the extent her historical account is provocative, that fact only confirms the exceptionally generative potential of her work. I observed some years ago that the “powers and competencies” of our states “have grown over two centuries to something the late 18th century could hardly have imagined.” That these “powers and competencies” are subject to forms of executive government less constrained than that of the presidency provides grounds for further study that could be hugely illuminating. Many an author, like Professor Seifter, concludes with a note that further pursuit of the issues they are illuminating “can enrich discourse in administrative and constitutional law.” (P. 57.) In this case, Seifter urges that such studies can “shine light on costs and benefits of different visions of democracy, bureaucracy, and leadership, and prompt deeper reflection on assumptions of what is possible and desirable in modern administration.” (P. 57.) She is not over-claiming. Hers is a rich and rewarding step forward.
Urska Velikonja, Are SEC’s Administrative Law Judges Biased? An Empirical Investigation
, 92 Wash. L.Rev.
(forthcoming), available at SSRN
When President Trump declares that he had the largest electoral college victory by a Republican since President Reagan, or that but for the 3 to 5 million illegal votes he would have won the popular vote, or that he had the largest inauguration crowd ever, everyone has come to learn that these “alternative facts” are not to be trusted. But when the Wall Street Journal publishes articles purporting to show that securities defendants are considerably more likely to lose when the Securities and Exchange Commission (SEC) sues them in administrative proceedings than when it sues them in court, because of the SEC’s “home-court” advantage before its ALJs, people take it seriously. So seriously indeed that the media, scholars, and even judges cite to the articles as established fact. But it’s not, and we have Professor Urska Velikonja to thank for establishing that.
To begin, while the brouhaha occasioned by the Journal articles has been centered around the SEC, and largely its enforcement efforts under the now controversial Dodd-Frank Act, the underlying thesis – that defendants do not get justice in administrative proceedings before ALJs, because those ALJs are biased in favor of their employer – would apply government-wide, not just to the SEC. And if given credence, this thesis would undermine what has been an essential aspect of administrative law for more than a century – administrative enforcement subject to judicial review as an alternative to executive actions in court for judicial enforcement. In other words, the stakes are high, and the truth, not factoids, is critical.
Professor Velikonja reviewed every enforcement action between 2007 and 2015. While she found that there had been an increase in SEC filings in administrative forums, still the vast majority of contested actions are brought in court rather than before ALJs. Moreover, most of the increase resulted from an increase in the number of cases which historically had been brought in administrative forums, rather than a switch from cases formerly brought in court now being brought before ALJs. There was an increase in the contested cases brought before ALJs under Dodd-Frank, but the shift was relatively small, from 8% to 18%, meaning that even under Dodd-Frank 82% of the cases were brought in court.
More importantly, Professor Velikonja found no robust relationship between the type of forum and case outcome, contrary to the widely-accepted assertions by the Journal to the contrary. That is, the difference between the SEC’s win rates in court and before ALJs was not statistically significant. The fault with the Journal’s analysis it turns out was that it did not control for some important independent variables (or predictors, as they are now called). First, the Journal did not control for the subject matter of the action. The SEC’s win rate is significantly lower for insider trading and accounting fraud regardless of forum. The Journal also did not control for the nature of the defendant; the SEC’s win rate against individuals is notably lower than against companies regardless of forum. By not comparing win rates for similar types of cases and similar types of defendants in the different forums, the Journal was comparing apples to oranges. Moreover, the Journal only considered cases that were decided after a trial, but the vast majority of cases are either settled or decided on motion. In addition, once one corrects for these errors, the SEC’s supposed benefit from bringing cases before ALJs disappears. Indeed, in the only category of cases in which the majority were brought before ALJs, broker-dealer cases, the SEC’s win rate in court was higher than its win rate before ALJs.
Professor Velikonja’s article is a dense, statistical analysis, to which this blog cannot do justice in any real sense. Those with a mathematical or statistical bent will be able to discover a number of other observations which she uncovers in the course of her study. Here, I am focusing on the rebuttal of the claims that have come to be accepted as common wisdom. And here, her conclusion is unequivocal:
Contrary to the claims advanced by the Wall Street Journal, the data analysed do not support the conclusion that the SEC is more likely to win at trial decided by an ALJ than in one decided by a federal district judge once one controls for case category, the nature of the defendant, and the existence of parallel criminal proceedings. Any reported disparities in outcomes in individual years are noise.
At the same time, Professor Velikonja recognizes the limits of her own study. While she has included consideration of a number of independent variables ignored by the Journal, she confesses that two important variables are omitted from her study – case quality and the SEC’s perception of case quality. She concedes that it is possible that the SEC files in an administrative forum when it believes it would not win in court. Then, if the win rates remain the same between the cases brought in court and before ALJs, it might suggest that the ALJs are biased or that the SEC has a home-court advantage. The problem is that neither of these variables are easily observable or measured. She also identifies other factors that lead her to conclude that relative success rates between administrative proceedings and court proceedings are a poor measure of fairness in enforcement. Ultimately, Professor Velikonja acknowledges that her study does not prove that the SEC does not have a home-court advantage, only that the Journal article is no evidence that it does. As a result, she fears that notwithstanding the lack of validity of the Journal article, the perception that ALJs supply a lesser form of fairness is likely to persist. She ends by suggesting a few measures that might ameliorate that perception, such as providing for all but the most routine cases to be removable to federal court, a proposal that is actually contained in a current bill before Congress. Nevertheless, she points out that there are significant costs associated with those measures, costs which may well outweigh their benefits.
Professor Velikonja’s article does not address the implications of this debate to the use of ALJs generally for administrative enforcement, but there is no doubt that defendants in such enforcement, especially those with the financial ability and incentive to undertake protracted litigation, will seize upon current factoids suggesting ALJs are inherently biased in favor of their agency. After all, the agency hires and pays the ALJs, some of whom may have once worked for the agency, they will say. They will use this argument, as they have already, in courts and Congress in an attempt to eliminate administrative enforcement. They will cite to the recent but burgeoning number of academic articles, using a dubious originalism, to the effect that enforcement by administrative adjudicators is unconstitutional either as a matter of Due Process or Separation of Powers. Lurking behind this, however, is simply a desire to undo effective enforcement of government regulations. It was precisely the need to enhance enforcement that led Congress to provide for administrative enforcement in the first place. Administrative enforcement is necessary because the costs of judicial enforcement impose substantial limits on the number of cases agencies can bring. Once it was thought that the lower cost of administrative adjudication was a benefit to defendants as well; they could mount their defense at a lower cost than in court. But to the extent that the defendants are business entities or executives with deep pockets, they may be happy to accept the greater cost of judicial proceedings, especially if the result will predictably be fewer enforcement proceedings because of the agency’s limited budget.
While Professor Velikonja’s article may not stem the tide, it is important because it provides truth against an argument based on falsity.
The younger generation of administrative law scholars is frighteningly good. They provide helpful motivation to step up one’s own game but also opportunities to marvel in the work they are doing. One of my favorite scholars to read is Eloise Pasachoff. (A note: we are not friends. I think I have met her briefly in person only once.) Her latest insightful article examines the president’s power of the purse.
Pasachoff focuses on the Office of Management and Budget’s (OMB) role in the agency budget process. Specifically, she describes seven levers of OMB control, finds the process lacking on certain normative criteria, and then proposes reforms to the political branches and the administrative state to improve accountability. If OMB’s regulatory review worries you, Pasachoff has bad news, arguing that OMB’s budget role is more problematic.
There is a cottage industry of scholarship about OMB’s role in agency rulemaking through the Office of Information and Regulatory Affairs (OIRA) (to which I have contributed). OMB’s budget role is likely more significant. Compared to OIRA, Pasachoff tells us that there are more staff members committed to the budget process, that these officials (some career, some political) are more proactive and have more authority over independent regulatory commissions and boards, and that their attention is not limited to significant rulemaking but rather encompasses anything on which the agency spends money.
The main contribution of the article is descriptive. Pasachoff lays out seven levers wielded by OMB. Three operate during budget preparation: “(1) a form-and-content lever, under which OMB sets ex ante requirements for the budget and policy proposals that agencies must submit for OMB’s review; (2) an approval lever, under which OMB must consent to those budget and policy requests ex post; and (3) a confidentiality lever, under which OMB restricts what agencies may disclose about this process.” (P. 2209.) Notably, while almost all independent regulatory commissions and boards do not submit significant regulations to OIRA for review (the Equal Employment Opportunity Commission is an outlier), even agencies that can, by statute, submit their own budgets to Congress must include materials from OMB. And all agency officials, no matter the agency’s structure, fall under the confidentiality provisions.
OMB uses two additional levers during the budget execution process: (1) “the formal specification lever, through which it ‘apportions’ and otherwise defines how agencies spend the funds Congress has appropriated”; and (2) “the informal monitoring lever, through which it oversees agencies’ implementation of their programs.” (P. 2288.) If OMB places additional conditions on agency spending through apportionments, those OMB “footnotes are subject to the Anti-Deficiency Act. . . .” (P. 2299.) I have recently started teaching the Anti-Deficiency Act in Administrative Law; it’s on the books (unlike the REINS Act, yet), and it is a powerful oversight tool.
Finally, OMB employs two levers in its management agendas: (1) “the Presidential Management Agenda lever, which sets forth presidential initiatives ostensibly designed to improve the administration of government but that often have a substantive policy overlay”; and (2) “the budget-nexus lever, which connects these management initiatives to the budget process.” (P. 2238.) For instance, under President Obama, the Evidence and Evaluation Agenda emphasized “evidence-based policymaking,” moving agency funds and influencing program evaluation.
If you have not heard of OMB’s Resource Management Offices (RMOs), the entities moving all these levers, you should read Parts I and II right away. They give you necessary background information about OMB and lay out the specific levers described above, drawing on details from OMB documents and examples. Pasachoff has considerable mastery of complicated institutions and processes yet still is clear in her explanations.
The article also makes a normative contribution. In Part III, although Pasachoff notes some benefits from OMB’s budgetary control (including its legality and coordination), she concludes that there are “troubling challenges to accountability.” (P. 2289.) Pasachoff seems most troubled by the lack of transparency—of how the budget process operates, who meets with the RMOs, the existence and extent of disagreements between RMOs and agencies, and the details of final execution decisions. In Part IV, Pasachoff makes a series of proposals for reforming OMB’s role in the budget process. The most realistic have grounding in OIRA practices (at least as those practices are supposed to occur): specifically, calling for information on the budget process (as an abstract matter) and who meets with RMOs. It also seems sensible for final execution decisions (such as apportionment footnotes) to be disclosed. Her proposals to disclose pre-decisional budget information and to make some RMO officials subject to Senate confirmation (to increase their accountability) are, however, significantly more controversial.
There is more we should want to know about agency budgets. Pasachoff could not take on everything, providing us critical information about OMB. There are both horizontal and vertical components of the agency budgeting process. The President submits a budget to Congress, but Congress appropriates the funds (with presentment to the President, of course). Thus, there is the horizontal relationship between the White House and Congress to consider, where the type of agency likely plays a role (for instance, the alignment between the agency’s interests and presidential objectives (or congressional ones)). Congress has a budget agency too, the Congressional Budget Office (CBO). Lisa Schultz Bressman and Abbe Gluck have done some interesting work on how CBO scoring affects legislative delegations to agencies. How does CBO constrain what OMB can do (and vice-versa)? In addition, the Office of Legal Counsel (OLC) at DOJ plays an important role in assessing potential violations under the Anti-Deficiency Act. How do OLC’s obligations interact with OMB’s? I hope scholars continue to follow the money.
William Funk, Final Agency Action after
Hawkes, 11 N.Y.U. J.L. & Liberty
(forthcoming 2017), available at SSRN
Whenever I hear the phrase “force of law” in administrative law, I am inclined to reach for my wallet. Agency statutory interpretations with the “force of law” net Chevron deference; those lacking such force are stuck with Skidmore respect. Legislative rules have the “force of law,” but interpretive rules and general statements of policy (a/k/a guidance documents) do not. And then there is the second prong of the Bennett test for the finality of agency action, which checks whether an action has determined legal rights or obligations or otherwise has legal consequences. In other words, this prong checks whether the agency action has the “force of law.” It is not a coincidence that each of these corners of administrative law is something of a mess. The concept of “force of law” limits application of Chevron, requirements for notice and comment, and the availability of judicial review. But, often enough, courts encounter situations in which this approach seems under-inclusive. For instance, they confront agency interpretive rules that have such large practical impacts that they seem like they should be subject to judicial review—even though, technically lacking the “force of law,” they arguably should be regarded as non-final under Bennett. To accommodate such cases, courts sometimes stretch and tear the “force of law” concept, leaving doctrine confused and confusing.
Fortunately for us, Professor Bill Funk has written a concise and excellent essay, Final Agency Action after Hawkes, that offers a great deal of insight on how to clean up one of these messes. His jumping off point is the Supreme Court’s recent decision in United States Army Corps of Engineers v. Hawkes Co., 136 S. Ct. 1807 (2016), which held that “jurisdictional determinations” (JDs) issued by the United States Army Corps of Engineers stating whether land contains “waters of the United States” constitute final agency actions subject to review under the APA. This opinion strongly highlights but does not resolve the tension between formalism and pragmatism that has plagued the doctrine of finality. Professor Funk’s essay diagnoses this tension, carefully traces its roots, and offers several thoughtful suggestions for resolving it.
Hawkes Co. (“Hawkes”) wants to mine peat on some land that it owns, but this land is damp enough that it might contain “waters of the United States” within the meaning of the Clean Water Act. A landowner that discharges pollutants into “waters of the United States” without a permit from the Corps faces severe civil and criminal penalties. Regrettably, the process for obtaining such a permit can be long and expensive. Hoping to avoid this burden, Hawkes sought a JD from the Corps, which responded with a “positive JD” declaring that Hawkes was indeed the lucky owner of jurisdictional waters.
Unhappy at the news, Hawkes sought judicial review of the JD pursuant to the APA. The government responded that this suit did not satisfy Bennett’s test for finality because JDs do not actually have legal consequences. Hawkes’ obligations under the CWA turn on whether its land happens to contain “waters of the United States.” This condition either exists or doesn’t exist regardless of what the Corps might say in a JD. Before the Hawkes litigation, the Corps had used this type of argument with great success to block review of JDs as nonfinal.
It did not succeed at the Supreme Court, however, which managed, but not without strain, to find a formal “legal” consequence sufficient to satisfy Bennett. The Chief Justice’s opinion for the majority noted that under a memorandum of agreement between the Corps and EPA, issuance of a “negative JD” blocks these agencies from bringing enforcement actions for five years, creating a safe harbor for the landowner and altering the legal landscape. And a positive JD creates a legal consequence by denying this safe harbor. (As the Corps reads this memo, it should not apply to cases like Hawkes, but that did not bother the Court overmuch.)
Now we get to the interesting part. Rather than stop its analysis after finding or manufacturing a formal legal consequence, the majority opinion instead veered into a short discussion of the Court’s “pragmatic” approach to finality, hearkening back to cases such as Abbott Laboratories v. Gardner, 387 U.S. 136 (1967), and Frozen Food Express v. United States, 351 U.S. 40 (1956). Most notably, the Court observed that, in Frozen Food, it had ruled that an ICC order interpreting the scope of certain statutory exemptions from regulation was final and reviewable. This order did not change the law but instead merely stated the agency’s reading of the law. Still, the order had substantial practical impact given that it warned carriers that violated its terms that they risked the danger that the agency would initiate enforcement actions that could lead to criminal penalties. Likewise, even though a JD itself does not change anyone’s legal obligations, a positive JD warns a landowner that, if it discharges pollutants on its property without a permit from the Corps, it risks “significant criminal and civil penalties.”
This discussion prompted an interesting split among the justices. One might characterize Chief Justice Roberts’ majority opinion as attempting to infuse Bennett’s formalistic, force-of-law approach to finality with Frozen Food’s pragmatic focus on practical impacts and coercion. Justice Ginsburg wrote a one-paragraph concurrence that went considerably further. She would junk Bennett and, relying on Abbott Labs and Frozen Food, regard agency action as final so long as it is “definitive” and has “an immediate and practical impact.” And Justice Kagan, writing another a one-paragraph concurrence, made the opposite point that the Court should stick to Bennett’s focus on legal consequences.
Professor Funk’s essay traces the case law roots of these competing formalist and pragmatic approaches to finality. Spoiler alert: It turns out that Bennett’s formalist roots do not run deep. Professor Funk observes, among other interesting points, that Bennett’s rewrite of finality doctrine never bothered to cite Abbott Labs, which had been the leading case on the subject for thirty years, or even to “indicate any awareness that it was stating the question differently” than Abbott Labs had. It is also interesting to learn that “none of the authority cited by Bennett for its test for finality involved suits under the APA.” If Justice Ginsburg ever wants to aim serious fire at Bennett, Professor Funk has supplied doctrinal ammo.
More importantly, however, he also suggests sensible ways to alter doctrine to reflect the real concerns that animate both the formalist and pragmatic approaches. The formalist, “force of law” approach responds to the concern that we do not want agencies sued every time they say what they think a statute means or express future policy intentions. Such omnipresent judicial review would discourage agencies from providing valuable information to regulated parties and the broader public. On the other hand, agency actions, even though they do not technically change anyone’s legal obligations, may exercise great coercive force on regulated parties. There were very good reasons for Hawkes to be distressed by the Corps’ positive JD declaring that its peat mine site contained jurisdictional waters. The pragmatic approach responds to this danger of coercion (or extortion).
The key, then, is to find a way of defining finality that opens the door to judicial review of agency actions with genuinely coercive effects while still blocking judicial review of agency actions that lack such effects. Professor Funk offers several. For instance, courts might strike a better balance by focusing on the APA’s limitation that final agency action is reviewable only where there is “no other adequate remedy in a court.” He notes that, “where enforcement proceedings would have no other effect than to require the person to comply with the agency’s interpretation or policy, waiting for such proceedings would often provide an adequate alternative to pre-enforcement review.” By contrast, where an agency action notifies a regulated party that it risks severe penalties if it engages in certain conduct, the coercive effect justifies immediate, pre-enforcement review.
Final Agency Action After Hawkes is concise, careful, thoughtful, and informative. Thanks to these qualities, it also strikes me as one of those relatively rare pieces of legal scholarship that has a chance to be effective. It is easy to imagine a court seizing upon one or more of Professor Funk’s sensible prescriptions to clarify a needlessly confusing corner of administrative law. (Calling Justice Ginsburg!)
A quick afterword: Professor Funk’s essay makes a nice companion piece to Professor Cass Sunstein’s recent essay, “Practically Binding”: General Policy Statements and Notice-and-Comment Rulemaking, 68 Admin. L. Rev. 491 (2016). Sunstein’s essay addresses the notoriously awful problem of determining when a purported policy statement issued by an agency is really an improperly promulgated legislative rule that should have gone through notice and comment. As noted at the top of this post, this is another context in which administrative law turns to the “force of law” to draw the line but then has trouble dealing with rules that lack this force but have great practical impact. Professor Funk makes an able argument that courts should apply finality doctrine in a manner that allows judicial review of agency actions based on practical impacts. Professor Sunstein, by contrast, ably argues that courts should not, as a matter of law, require agencies to conduct notice and comment based on practical impacts. Seems to me that they are both right, which in turn suggests the importance of being careful whenever administrative law tosses around the phrase, “force of law.”
Jed Handelsman Shugerman, The Dependent Origins of Independent Agencies: The Interstate Commerce Commission, the Tenure of Office Act, and the Rise of Modern Campaign Finance
, 31 J.L. & Pol.
139 (2015), available at SSRN
Many law review articles fail to live up to the promise of their titles or abstracts, leaving disappointed readers in their wake. Others have titles that hide the ball. Behind the wordy and somewhat bland title of Jed Shugerman’s 2015 article—The Dependent Origins of Independent Agencies: The Interstate Commerce Commission, the Tenure of Office Act, and the Rise of Modern Campaign Finance—lies a fascinating new take on the origins of independent agencies.
The identification of the Interstate Commerce Commission (ICC) as the first modern independent regulatory agency is familiar to scholars of American administrative law. The ICC, created in 1887, was the first federal agency with the hallmarks of independence—multiple commissioners appointed by the President with the advice and consent of the Senate, staggered terms of specified duration (six years in this case), removal by the President only for “inefficiency, neglect of duty, or malfeasance and office,” and a requirement of bipartisan membership.
As Shugerman explains, the standard account for this innovation has been Congress’s desire to insulate the ICC from political influence, mainly from the President but also to an extent from Congress itself. Shugerman disputes this, claiming that “Congress designed the ICC to be politically accountable to the Senate, but the Commission was also envisioned to be accountable to the President.” (P. 172.) The true reason for the establishment of the ICC as a regulatory agency, as Shugerman’s research and analysis reveals, was to provide an incentive for interest groups to make campaign donations to politicians, mainly the President and Senators, as a substitute for the assessments that federal patronage employees previously paid to their political party.
In the early 1880s, the system of patronage assessments was breathing its last, and an alternative source of campaign funding was needed. At the same time, Congress repealed the Tenure of Office Act, which required Senate consent to the removal of many federal officers. The repeal is puzzling because the Senate joined in reducing its own power. Shugerman explains the repeal as a result of “the declining importance of assessments and patronage, a rise in intraparty factionalism, and the luck of personal animosities.” (P. 160.) And also about this time, “[f]armers, merchants and other shippers denounced the railroads’ predatory pricing and demanded regulation.” (P. 165.)
While this demand for regulation set the stage for the enactment of the Interstate Commerce Act, Shugerman’s thesis is that the need for a source of campaign funding heavily influenced the form of federal regulation. Railroads represented one of the most lucrative industries in the country, and their owners would eagerly use campaign contributions to procure favorable treatment by the Commission. As Shugerman colorfully puts it, while “[t]here was no smoking gun connecting the supporters of the commission to an agenda to extract railroad campaign contributions . . ., there is something of a bloody knife: the opponents of the commission made this link.” (P. 171.) As one opponent quoted by Shugerman put it, the Act would “force railroad capital into the canvass to secure the election of a man who will bend its knee to their wishes.” (P. 172.)
Shugerman’s other main piece of evidence is that the alternative offered in Congress to Commission enforcement was private enforcement through litigation in federal or state court. That alternative, however, would not provide any incentive for campaign contributions by either side, since the politically insulated courts would be where the actions is. Thus, Congress chose to create a Commission, under political influence, with enforcement powers. In fact, independence did not come until later: The ICC was initially located within the Department of the Interior, augmenting potential presidential influence over its actions. Subsequent legislative reform, discussed by Shugerman, in 1903, 1906, 1910 and 1920, removed the ICC from Interior and granted it greater political independence, but only after the ICC proved itself a reliable reflection of Congress’s policy preferences. So much for the standard account of the origins of the independent agency form.
In short, Jed Shugerman’s re-telling of the story of the origins of the ICC is fascinating and eye-opening, the sort of administrative law scholarship we need more of.
For decades, controversy has brewed over agency (ab)use of and (over)reliance on guidance documents. On one account, agencies turn to guidance in an end run around notice-and-comment requirements, producing de facto legislative rules without either public input or, at least in some cases, judicial scrutiny. On another, guidance documents are good government in action, a helpful and illuminating benefit. In Preambles as Guidance, Kevin Stack does not take sides in this debate. But he does helpfully remind us that there is one type of guidance that (a) is not subject to the standard critique and (b) is often not appreciated as guidance at all. This overlooked creature, hiding in plain sight, is the preamble that accompanies every final rule.
The article is an exercise in APA originalism. Particularly since State Farm, the dominant understanding of the preamble has been that its central function is justificatory—in order to withstand judicial review, the agency must respond to significant comments, show that it engaged in reasoned decisionmaking, and thoroughly explain itself. But the APA’s requirement of a “statement of basis and purpose,” 5 U.S.C. §553(c), suggests a rather different goal: clarifying and helping readers understand the rule. Stack quotes the Attorney General’s Manual on the APA: “The required statement will be important in that the courts and the public may be expected to use such statements in the interpretation of the agency’s rules.” Stack’s article is an extended endorsement and elaboration of this model of rulemaking preambles, providing a clear, convincing, and elegantly written reconceptualization of a basic feature of agency rulemaking.
The article draws from a report Professor Stack prepared for the Administrative Conference of the United States, which in turn was the basis of Recommendation 2014-3, Guidance in the Rulemaking Process, 79 Fed Reg. 35,992 (June 25, 2014). The recommendation is focused on what agencies should put in their preambles; this article is focused on how the preamble should be treated once it is published. Part I shows that (I am tempted to say “reminds us that,” but most of “us” never held the conception Stack is pushing) that, both under the APA and in practice, preambles should be, and are, designed to provide guidance—they explain and clarify rather than justify the agency decision. Part II then argues for the “superiority” of preamble guidance. The preamble is produced right along with the rule. It is issued by the agency itself, after extensive internal vetting and deliberation (and, in the case of executive agencies, OIRA review), with every incentive for care and precision, and published in the Federal Register, where it is highly visible, searchable, and accessible.
The article then turns to discussion of what consequences flow from this understanding of preambles as especially reliable guidance documents. First, Stack argues that interpretations in preambles merit particular judicial deference. He does not seem to advocate giving them more weight than they would receive under the existing Auer doctrine (under which a court is to give an agency’s interpretation of its own regulation “controlling weight unless it is plainly erroneous or inconsistent with the regulation”). Instead, they get special weight within Auer. Thus, in deciding when Auer deference does and does not apply, these interpretations easily fall on the “apply” side of the line. Beyond that, should there be future inroads on Auer—an entirely plausible prospect given the current ferment over that decision—traditional Auer deference would remain appropriate when courts consider preamble guidance.
The article concludes with a few points about the implications for agency practice of Stack’s conceptualization of preambles. First, a preamble’s superiority means that it should be seen as superseding and displacing any prior guidance with which it is inconsistent. Second, preamble guidance constrains the agency. As a matter of best practices, an agency should not revise interpretations set out in a preamble unless the revision comes from an official at the same or higher level in the agency hierarchy as the original author, the revision is published in the Federal Register, and the revision is expressly justified.
This account raises one empirical question: On Stack’s account, the preamble should be required reading for, if not committed to memory by, any agency official who enforces, interprets, or seeks to modify an agency regulation. One wonders if that happens. Are preambles regularly consulted within the agency? Or are they no sooner published than forgotten (except by lawyers defending the rule in court)? The more the former is true, the stronger the arguments in this article; and to the extent the latter is the case, this article is a salutary reminder to agency personnel to go back and read this most useful of guidance documents.