Notice & Comment

APA Rulemaking Revision, Continued, by Ronald M. Levin

ron-levinAs part of this blog’s symposium on the ABA Section of Administrative Law and Regulatory Practice’s recent Report to the President-Elect, Bernie Bell has written a thoughtful commentary on the ABA’s 2016 proposals to revise the Administrative Procedure Act. I have something of a stake in those proposals, because I successfully presented them to the ABA’s House of Delegates, in my capacity as the Section’s Delegate. Accordingly, the editors of this blog have granted me a bit of space to reply to Bernie’s critique.

The ABA made nine proposals for statutory amendment, and Bernie has chosen to comment on four of them. First, the ABA recommended that Congress should codify the Portland Cement doctrine – i.e., the principle that an agency must disclose the factual material on which its proposed rule rests. Bernie endorses this idea, so I needn’t add anything more.

Second, the ABA recommended that Congress should codify the principle that notice-and-comment rulemaking should be conducted on the basis of an administrative record. Bernie agrees that, because this principle is so well entrenched in administrative practice, it deserves specific recognition in the APA. I of course support this idea, but I also believe that Congress should take the time to get the drafting of this new language right. The ABA recommendation was drawn from Recommendation 2013-4 of the Administrative Conference of the United States (ACUS), which highlighted many of the complexities that lurk within this seemingly simple requirement. There are significant disputes about what it means for an agency to have “considered” a document, so as to entitle it to inclusion in the administrative record. There are also significant questions about how many of those documents must be posted online and what role the courts should play in overseeing the compilation of the record. Still another issue is whether the statutory provision should apply to rules that are judicially reviewed outside of the APA framework. Congress shouldn’t feel that it needs to iron out all of those complexities, but it should at least ensure that it doesn’t resolve them prematurely by using incautious language.

Third, Bernie addresses the ABA’s recommendation that Congress should repeal the APA’s rulemaking exemption for “public … loans, grants, [and] benefits” and should “narrow” the exemption for rules involving “a military or foreign affairs function of the United States.” Bernie agrees with the former of these proposals but is skeptical about the latter. He has a very good point to make about this recommendation, so please bear with me while I sketch out some background.

The ABA resolution did not elaborate on the manner in which Congress should “narrow” the military and foreign affairs exemption, but the accompanying report suggested that the exemption should be limited to the scope of the Freedom of Information Act exemption for classified information. According to that exemption, the disclosure obligations of FOIA do not apply to matters that are “(A) specifically authorized under criteria established by an Executive order to be kept secret in the interest of national defense or foreign policy and (B) are in fact properly classified pursuant to such Executive order.” 5 U.S.C. § 552(b)(1). Bernie objects that this provision’s dependence on the courts’ independent review function would be problematic in the rulemaking context, because “[a]gencies must be able to reliably determine whether the exemption applies before judicial review.” Besides, he notes, the development of a rulemaking record for judicial review may serve little purpose in connection with decisions that involve “compromise and accommodation with foreign sovereigns” or other aspects of the President’s broad constitutional discretion in this context.

It now seems to me that the ABA’s report (which I participated in writing) should have probed this subject more deeply. The ABA’s proposal derives from a 1973 ACUS recommendation, which did indeed rely on the FOIA exemption as a reference point. At the time of that recommendation, however, the FOIA exemption did not include clause (B), which was added in 1974. That clause is the basis for the courts’ independent review of classification decisions in FOIA cases. Moreover, the ACUS recommendation went on to propose that agencies should be given statutory authority to exempt entire categories of military or foreign affairs rules for “good cause.” In hindsight, therefore, it would seem that, although the ultimate ABA proposal for narrowing of the rulemaking exemption remains sound, the report should have invited consideration of a wider range of possible replacements. Bernie has, therefore, made a valuable contribution by encouraging fuller exploration here.

Finally, Bernie addresses the ABA’s proposal that Congress should clarify the definition of “rule” in § 551(4) of the APA. According to that provision:

“rule” means the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency and includes the approval or prescription for the future of rates, wages, corporate or financial structures or reorganizations thereof, prices, facilities, appliances, services or allowances therefor or of valuations, costs, or accounting, or practices bearing on any of the foregoing. …

The ABA proposes to delete the words “or particular” and “and future effect” from the first clause of the definition. This proposal is based on an article of mine, which interested readers can consult for full discussion of the points that follow.

Bernie takes issue with the “or particular” part of the proposal. He correctly notes that the APA’s framers deliberately inserted that language in order to ensure that prescription of rates for a single entity, and similar actions, would be treated as rulemaking. Even so, the insertion was a blunder. It was unnecessary, because the latter half of the definition would itself be sufficient to ensure that such actions would be treated as rules. Moreover, the idea of broadly defining statements of “particular applicability” as rules is completely counterintuitive. Under a literal reading of the definition, an NLRB bargaining order, an ICE deportation order, or an FTC cease-and-desist order directed at a single company is rulemaking, because it is a statement of (general or) particular applicability that implements law or policy (and also has exclusively future effect). Surely Bernie doesn’t believe those implications can be correct. That’s because he, like everyone else, justifiably ignores what the plain language of § 551(4) says. As Professor Antonin Scalia once wrote, the only responsible judicial attitude toward that language is “benign disregard.” The “or particular” language has been recognized as a drafting error since the earliest days of the APA, and Congress should at long last abandon it.

With regard to the “future effect” language of the definition, Bernie notes that, under Bowen v. Georgetown University Hospital, retrospective rulemaking requires specific authorization from Congress, but Congress has conferred such authority in a number of instances, and the APA’s definition should reflect that reality. I agree with that reasoning as far as it goes, but the problems with the definition actually run much deeper. The exclusion of retroactive rules from the definition means (or would mean, if courts took the definition seriously) that such rules may be issued without notice and comment. No one thinks that this would be a good idea. The “and future effect” language should, therefore, be eliminated.

Bernie also proposes that when an agency adopts a retroactive rule, it should have to specifically identify the rule as such and should have to explain why it is necessary. These measures are outside the scope of the ABA’s proposals. Perhaps he could make a case for them. First, however, I would like to see Congress repair the defects in the definitional provision, which has been recognized as problematic for virtually the entire seventy years of the APA’s existence.

Ronald M. Levin is the William R. Orthwein Distinguished Professor of Law at Washington University Law School.

This is post is part of the Symposium on the ABA AdLaw Section’s 2016 Report to the President-Elect. An introduction to the symposium is here, and all of the posts are collected here. The views in this post, which expand upon the recommendations set forth in the Report, are the author’s own and do not necessarily reflect the views of the ABA AdLaw Section. The full Report is available here.

Print Friendly, PDF & Email