Guidance is a large, amorphous group of communications, often fluid and informal, by which administrative agencies instruct regulated parties about the way to comply with statutes, legislative rules and legal precedents. In-depth interviewing, as opposed to statistically analyzed surveys, is a fluid, relatively informal method of collecting empirical data. In Federal Agency Guidance and the Power to Bind: An Empirical Study of Agencies and Industries, Nicholas Parrillo uses in-depth interviewing to understand the way in which guidance operates in the federal system. One reason I like it lots is that it is represents an effective combination of subject matter and methodology.
Professor Parrillo conducted 135 in-depth interviews with people in government, industry, unions and NGOs who had personal experience with the way federal agencies use guidance. Through this method, he was able to garner a great deal of information about a wide variety of guidance techniques, the effectiveness or ineffectiveness of these techniques, the subtleties of agency practice and regulated party response, the subjective reactions of the participants, and the sources of conflict and concern. Much of this would have been difficult or impossible to capture with a survey instrument, and some of the issues might not even have occurred to the researcher until highlighted by the interviewees. Of course, this method does not permit quantitative statements about the frequency of particular practices or beliefs, but when several people with decades of experience assert that a practice or attitude is widespread, that seems like convincing evidence.
The use of this method yields a number of valuable insights that are amply documented in the article, insights that are quite different, in content and tenor, from the largely doctrinal or ideological academic literature on guidance that has been available thus far. To begin with, it turns out that the difference between a legislative rule and a generally stated guidance document is often invisible to regulated parties. The distinction is codified in the Administrative Procedure Act (APA), where it determines whether the agency is required to use the notice and comment process and provide a statement of basis and purpose that is subject to judicial review. The distinction is widely discussed by scholars as determining whether the stated provisions are binding on regulated parties. But regulated parties don’t pay much attention to the distinction in cases when the agency has licensing or other pre-approval powers, where even the threat of an enforcement action can have serious consequences, or when the party values its ongoing relationship with the agency. Regulated firms are usually much less concerned with the possibility of challenging a guidance document in federal court than they are with finding out what the agency will do and what it won’t do. If they arrange a meeting with the agency for this purpose, one of the informants noted, “ ‘the last thing you want to do’ is to bring a lawyer to such a meeting.” That, another informant stated, is “like bringing a gun to a knife fight.”
Other insights in this article speak directly to two leading shibboleths of the current anti-regulatory mood in the courts and among scholars. One is the tendency to personify both agencies and regulated firms. The agency is envisioned as a strategic, often conspiratorial actor, plotting ways to impose increasing severe restrictions on American business. (This view appears in Justice Gorsuch’s dissent in Kisor v. Wilkie, which dealt with a closely related issue.) But the interviews reveal that regulated parties often deal with different levels of the agency, that agency enforcement officials want to adopt defensible or resource-conserving approaches rather than retaliating against firms that have antagonized some other unit of the agency, and that inflexibility about guidance requirements is often driven by the subordinate’s desire to avoid criticism from a superior or a superior’s desire not to alienate a subordinate. Similarly, regulated firms are not emotionally sensitive victims of agency oppression, but complex bureaucratic entities whose different components display varying behaviors. Both the firm’s regulatory affairs unit and its widely dispersed compliance officers often welcome guidance as providing useful information for their tasks, and they urge the firm to follow it as a way of increasing their own importance in the firm hierarchy.
A second shibboleth is that agencies and firms are locked in an adversarial struggle, contestants in the arena where the conflict between social engineering and free enterprise is being enacted. The mood conveyed by the interviews in this article is quite different, and this is something that would be particularly difficult to capture in a survey. For the most part, agency officials simply want to fulfill their assigned responsibilities, and they evince no particular hostility toward regulated parties. When they refuse to make exceptions to guidance documents, despite the supposed flexibility that distinguishes these documents from legislative rules, they do so out of the desire to conserve resources or a concern for fairness to competitors. As for the firms, the general sense from the interviews is that they accept, or even more basically that they have evolved into their present form in, a regulated environment. Their main concern is to avoid disruptive conflict so that they can carry out their business within the ambit of the legal requirements that the agency has established. What they want most—and what guidance often provides—is clarity. “Tell [me] what I can do and what I can’t do,” one informant said, “and I’ll devise a business model within that.”
This article’s purpose, which is achieves extremely well, is to provide a vivid portrait of an area that is an important component of administrative practice, but is also informal, recondite, highly technical and thinly documented. In doing so, however, the article challenges us to rethink basic assumptions and beliefs about the rule of law, the nature of regulation and the institutional structure of both agencies and private firms.
