Last month, Jeffrey Clark, the Acting Administrator of the Office of Information and Regulatory Affairs, issued yet another memorandum (M-25-36) describing how the Trump Administration intends to “streamlin[e] the review of deregulatory actions.” If you’re experiencing déjà vu, you’re not alone: M-25-36 follows at least two executive orders, an April presidential memorandum, and two other “M” memos addressing the same subject. Clearly, the administration believes that individual agencies have failed to pursue deregulation with sufficient vigor, and so M-25-36 directs agencies to “redouble their efforts in this area.”

Like many of the administration’s other attempts to run roughshod over the APA’s requirements, however, the approaches that M-25-36 recommends suffer from significant legal vulnerabilities—and are unlikely to achieve the results that the administration wants. Two vulnerabilities merit particular attention. First, the memo reiterates a flawed theory of the APA’s good cause exception that would allow agencies to sidestep notice and comment whenever they believe that a previous rule was unlawful. And second, the memo encourages agencies to consider certain so-called deregulatory “benefits” that will often be insufficient to justify deregulation.

The Administration’s Flimsy Good Cause Theory

M-25-36’s primary focus is to encourage agencies to “fully maximiz[e] their energy” in repealing “facially unlawful regulations ‘without notice and comment’ under the Administrative Procedure Act’s ‘good cause’ exception.” The memo largely reiterates the theory espoused in the April presidential memorandum: that providing notice and comment before rescinding regulations that the administration believes are facially unlawful would be “superfluous” (and therefore “unnecessary”) and serve no purpose other than delay (which would be “contrary to the public interest”). This time, it cites as support two inapposite, decades-old circuit cases recognizing that agencies may invoke the good cause exception where a “stringent” or “tight” congressionally imposed deadline has left insufficient time for notice and comment.

The theory espoused in M-25-36 and the April presidential memorandum might expose an agency to at least three distinct legal challenges, as we at Governing for Impact have repeatedly explained. First, to the extent the agency relies upon an erroneous or overbroad interpretation of Supreme Court precedent as justification for rescission, its action may be set aside; “[a]n order may not stand if the agency has misconceived the law.” Second, even if an existing rule is unlawful in some respects, an agency’s decision to rescind it immediately and in full may be arbitrary and capricious if the agency failed to consider reliance interests or available alternatives to rescission. And third, neither the APA’s plain text, case law interpreting it, nor the Attorney General’s interpretation of the law when it was enacted supports the administration’s good cause theory. To the contrary, the D.C. Circuit has squarely rejected the argument that “notice and comment requirements do not apply to ‘defectively promulgated regulations.’”

But don’t take our word for it. Just a month before OIRA issued M-25-36, Judge Reed O’Connor of the United States District Court for the Northern District of Texas declined to excuse an agency’s failure to comply with notice-and-comment requirements even though the agency asserted that its regulation was compelled by the statutory text. In his words, the agency “ask[ed] the Court to find that an agency need not comply with the APA’s stringent requirements, as long as the agency’s interpretation of a statute is the best reading.” But the agency did not “cite to a single case” endorsing that proposition, and “the Court c[ould not] find any in which a court considered this argument[,] much less made such a holding.” He therefore “decline[d] to be the first.” By the same token, an agency cannot skip notice and comment simply because it believes that a rule is inconsistent with a statute’s best reading, or with some other legal requirement.

The flimsiness of the Trump Administration’s good cause theory is perhaps why agencies appear to have been reticent to invoke it at scale. But if they have a change of heart, parties who will be harmed by the administration’s deregulatory efforts should not be afraid to hold them accountable.

Flawed Benefit-Cost Analysis

To the extent an agency chooses to make a policy case for rescinding a given rule, which M-25-36 acknowledges would “typically” require the agency to “afford notice and an opportunity to comment,” the memo offers a distorted account of the benefits and costs that the agency should consider. Among other things, the memo omits any discussion of the benefits of regulation, or of the reliance interests that may be jeopardized by rescinding regulations that have been on the books for years or even decades. An agency that fails to consider these “important aspect[s] of the problem” practically invites a finding that its action is arbitrary and capricious.

M-25-36 does break some new ground in its description of the “important, unique impacts” of deregulation—but that ground is littered with pitfalls. There are a few worth emphasizing, in addition to those identified by others in this forum.

First, the memo emphasizes what it describes as “private-conduct liberty benefits,” which it admits can generally “only be assessed qualitatively.” But by directing an agency to regulate in the first place, Congress has necessarily accepted that certain tangible benefits, like environmental protection or safeguards against predatory businesses, are worth the cost of imposing some restrictions on liberty. And if qualitative liberty impacts merit consideration, then so do other qualitative impacts, including interests like dignity, equity, and fairness. It will be difficult for agencies to justify excluding these considerations on the grounds that they are unquantifiable or otherwise irrelevant if they have already predicated a rulemaking on similarly intangible benefits. After all, an agency’s reasoning “cannot be internally inconsistent.”

Second, the memo describes the “aggregated impacts” of deregulation, meaning the downstream effects of deregulation on other aspects of the national economy. Those impacts, however, may well be difficult to discern or measure. To use the memo’s example of the sort of reasoning it envisions, how will agencies identify the remote and attenuated benefits of “deregulating the energy sector” on “increasing AI innovation and improving the development of new cryptocurrency assets,” as well as how those benefits are likely to “further profit consumers in a virtuous cycle”? The APA does not permit agency actions that are “based on speculation,” or on “a factual premise that is unsupported by substantial evidence.”

Third, the memo notes that “[r]egulations are almost always implemented under uncertain conditions,” and that new evidence may demonstrate that “the predictions of costs and benefits it made when it once stood at the door … have not been borne out by experience.” That may be the case, but the APA requires an agency to provide a “more detailed justification” when its decision rests on “factual findings that contradict those which underlay its prior policy.” An agency will need to contend with the evidence or factual findings it cited in promulgating the rule it now wishes to rescind, rather than simply stating that its assessment has changed.

Finally, the memo attempts to analogize deregulation to the codification of a non-enforcement policy, suggesting that deregulatory action should be subject to a more “deferential” standard of review. In that respect, the memo echoes a theory advanced by the former general counsel for the U.S. DOGE Service that “[a] lower standard of judicial review should apply” when an agency rescinds regulatory requirements. But State Farm itself applied the arbitrary-and-capricious standard to deregulatory action, and there is nothing in the APA’s text or precedent to indicate that a different standard should apply outside the motor vehicle safety context. The memo also suggests that a regulation may have been unnecessary if enforcement history shows “few (if any) violations,” but that reasoning is, to use the late Justice Ginsburg’s description, “like throwing away your umbrella in a rainstorm because you are not getting wet.”

Conclusion

There’s no “one weird trick” to rush deregulation. One would hope that the Trump Administration would have learned that by now. Perhaps the next deregulatory gambit will involve the use of artificial intelligence to accelerate the notice-and-comment process, an approach that may also encounter serious legal and practical difficulties. But rather than concocting increasingly elaborate theories of how to sidestep regulatory requirements, the administration might be better served by simply buckling down and doing the work.

John Lewis is Deputy Legal Director at Governing for Impact.