Notice & Comment

A Few Thoughts on Judicial Review of Rulemaking Statutes

This week the House passed a bill (H.R. 50) to amend the Unfunded Mandates Reform Act, which requires agencies to assess the impact of their rules on state, local, and tribal governments. The bill would expand the Act in a number of important respects and has prompted a White House veto threat over concern that it would unduly burden the rulemaking process.

A great deal of the concern over H.R. 50 has centered on the provision to allow courts to review agency compliance with most parts of the bill. In short, the worry is that the bill is a subterfuge to allow big business to use the courts to strike down financial and environmental regulation.

My forthcoming article in the Administrative Law Review suggests that while the concern over judicial review is legitimate, it may not come to fruition. In 1996, Congress added judicial review to a similar law, the Regulatory Flexibility Act. Expectations that judicial review would result in flurry of lawsuits and hinder the rulemaking process were unrealized, as relatively few plaintiffs sued under the law. In the few cases that were heard, courts mostly sided with agencies and construed the law narrowly. I assert in my article that the courts’ narrow construction of the law discouraged additional plaintiffs from suing. The net result was relatively little change in the agency rulemaking process.

All this is to say that the impact of judicial review depends both on the willingness of courts to interpret a statute broadly and on the willingness to plaintiffs to incur the expense (both monetary and reputational) of suing. With procedural statutes such as H.R. 50, that is not guaranteed. For a more fulsome analysis, please take a look at the full article, abstracted below:

This Article analyzes when and why administrative agencies avoid rulemaking procedural requirements such as the Administrative Procedure Act’s notice-and-comment process. This Article’s original empirical analysis shows that agencies invoke statutory exemptions to avoid such rulemaking procedures more frequently as the threat of a lawsuit challenging that avoidance declines. In situations with a low threat of suit, agencies have avoided rulemaking procedures for more than 90 percent of rules. Such avoidance falls when the threat of suit increases. But even when litigation ensues, courts do not consistently require agencies to comply with rulemaking procedures. This spotty judicial enforcement, along with significant agency avoidance, casts doubt on the claim that rulemaking procedures have significantly burdened the rulemaking process. At the same time, agency avoidance suggests that rulemaking procedures do less than commonly thought to promote public deliberation in the rulemaking process, foster agency expertise, guard against agency arbitrariness, and make agencies accountable to Congress and to the public. This suggests that agency avoidance of rulemaking procedures has some benefits, but also many costs.

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