Notice & Comment

Procedural Politicking and Auer Deference

Rachel Potter’s new book Bending the Rules: Procedural Politicking in the Bureaucracy is an absolute must-read for those interested in agency rulemaking and in administrative law and regulatory practice more generally. As the title suggests, the book explores empirically and theoretically how agency officials — both career civil servants and political appointees — leverage procedural rules to help advance their preferred policy outcomes in the rulemaking process. In particular, the book focuses on three sets of bureaucratic tools: rule-writing tools (Chapter 4), consultation tools (Chapter 5), and timing tools (Chapter 6).

Potter’s book is a delight to read. She tells the story through a mix of qualitative and quantitative methods, deeply enriched by her real-world experience as a policy analyst at the Office of Information and Regulatory Affairs (OIRA) from 2005 through 2007. Her in-depth case study of the FDA’s menu-labeling regulation (Chapter 7), for instance, benefits greatly from her prior OIRA experience.  Potter’s story ultimately is a political one, underscoring how lawmaking via regulation is not an apolitical alternative to lawmaking by legislation.

In my contribution to this symposium on the book, I focus on the first set of tools: the rule-writing tools (Chapter 4). I do so because a large part of my own research agenda has focused on how agencies draft rules (e.g., here and here) and legislation (e.g., here and here) and also because her findings have important implications for judicial review of agency regulations.

Potter’s argument is that bureaucrats write rules strategically to navigate the political landscape and arrive at a regulatory outcome that aligns more closely with bureaucratic policy preferences. Here is the theory she sought to test (p.89):

My expectation is that when faced with a hostile political environment, agencies should write less accessible rules. Texts that are written in an inaccessible manner can deter oversight (or at least make it more costly) by making it more difficult for laypeople to ascertain the true consequences of a policy proposal. Put differently, forcing readers to digest a lengthy proposal that is written in technical jargon or legalese raises monitoring costs; it may require a congressional staffer to find a lawyer to review the agency’s proposal or a judge’s law clerk or a desk officer at the Office of Information and Regulatory Affairs (OIRA) to invest hours deciphering what the agency is proposing and precisely how that differs from the status quo.

To test this theory, Potter assembled a “Regulatory Proposals Dataset” of roughly eleven thousand agency rules from the 1995-2014 time period. She then assessed these rules for readability by focusing on the length of the preamble and the clarity of the abstract. Check out Chapter 4 for more details on the methodology. Her bottom line (p.105) is that “the models indicate a strong and consistent court effect, and weaker but still clear evidence of agencies responding to Congress and the president.”

In other words, “when the courts are serving as more active monitors, agencies respond by increasing the length of preambles and decreasing the readability of abstracts” (p.106). This finding is similar to what I uncovered in surveying agency rule drafters, in that agencies are more aggressive in their interpretive efforts in rulemaking when they believe their regulations will receive Chevron deference, as opposed to some less-deferential review standard, in the courts.

Although similar effects are not found as to abstract readability with respect to Congress and the President, “the results with respect to Preamble length conform to theoretical expectations; when interest groups in the agency’s policy area are likely to be predisposed against the agency’s proposals and the complaints they raise may resonate with any of the constitutional branches, agencies tend to write verbose preambles” (p.106).

Potter, a political scientist by training, understandably does not dedicate much space in the book to explore the implications of her findings for administrative law and judicial review. But such implications are definitely worth exploring. For instance, these findings on rule drafting contribute greatly to the debate about the future of Auer deference (a.k.a. Seminole Rock deference) — the doctrine that commands courts to defer to a federal agency’s interpretation of its own regulation unless the agency’s interpretation is “plainly erroneous or inconsistent with the regulation.”

Just last Term, in Kisor v. Wilkie, the Supreme Court declined to overrule Auer and Seminole Rock. Instead, as I explore elsewhere, Justice Kagan, writing for a 5-4 majority, embraced a new five-step version of Auer deference that I expect will lead lower courts to be much less deferential to agency regulatory interpretations going forward.

The call to abandon Auer deference has largely been framed as two-fold. First, judicial deference to agency regulatory interpretations, as Justice Scalia argued, “seems contrary to fundamental principles of separation of powers to permit the person who promulgates a law to interpret it as well.” Second and more relevant here is the perverse incentives argument: “[D]eferring to an agency’s interpretation of its own rule encourages the agency to enact vague rules which give it the power, in future adjudications, to do what it pleases. This frustrates the notice and predictability purposes of rulemaking, and promotes arbitrary government.”

The incentives argument has not fared well in the administrative law literature. A recent empirical study by Dan Walters, for instance, concludes that “agencies did not measurably increase the vagueness of their writing in response to Auer.” Cass Sunstein and Adrian Vermeule, moreover, have asserted that the fear of such incentives is a “phantasmal terror. Indeed, we are unaware of, and no one has pointed to, any regulation in American history that, because of Auer, was designed vaguely and broadly.”

Bending the Rules paints a different picture — one in which agencies draft rules strategically based on the threat of judicial review and political oversight. To be sure, Potter does not attempt to assess whether bureaucrats draft rules strategically “because of Auer.” Indeed, whereas nine in ten agency rule drafters I surveyed reported that their agencies utilize Chevron deference when drafting rules, only four in ten said the same of Auer deference. And unlike the Walters study of the rules themselves, Potter’s study focuses on the preambles and abstracts.

But the overall findings of Bending the Rules suggest that bureaucrats strategically regulate against the backdrop of judicial and political oversight and do so by making their regulations less readable and accessible when helpful to advance bureaucratic policy preferences. Such strategic behavior opens the door for reliance on subsequent agency guidance (and thus on Auer deference). Or, as Potter puts it (p.111), “as a tactic, text [in]accessibility addresses a short-term need for the proposed rule survival but may introduce the need for more education or guidance at the final rule and implementation stages….”

This procedural politicking is of the type that Justice Scalia feared Auer deference would encourage and reward. So do Potter’s findings counsel abandoning judicial deference doctrines such as Auer? Although she does not address Auer deference, Potter does address Chevron deference to agency statutory interpretations and cautions against sweeping reform (p.198) :

The effects of diminished judicial deference on procedural politicking would likely be mixed. On the one hand, to the extent that I have found that agencies use procedural politics to evade court oversight, those tactics might increase. That is, agencies may find themselves with an even great incentive to avoid judicial scrutiny. On the other hand, reduced deference might obviate the need for the type of procedural politics described herein. As Raso (2017) suggests, were such a reform to be enacted, agencies might avoid rulemaking entirely in favor of other policy-making venues…. In other words, judicial deference may engender a different type of procedural gaming. Given that adjudication may be less transparent and less equitable (because different policies may be applied to similarly situated individuals), this is yet another reason that policy makers should proceed cautiously with this kind of reform.

These cautions may apply with similar force in the Auer context. Indeed, Aaron Nielson has advanced the last argument in the context of Auer.

In all events, this review only scratches the surface of the fascinating findings reported in Bending the Rules. As Potter observes, “Rulemaking and its attendant procedures are inherently the stuff of insiders; the process is understood by relatively few, yet the regulations this process creates apply to many.” Potter’s new book sheds important empirical light on agency rulemaking, and will hopefully spark further research and debate into how the empirical realities of rulemaking and agency procedures should shape judicial and political oversight of the regulatory state.

This post is part of a symposium reviewing Bending the Rules: Procedural Politicking in the Bureaucracy, a new book by Dr. Rachel A. Potter, Assistant Professor of Politics at the University of Virginia. All of the posts can be read here.

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