This past week, the Food and Drug Administration formally withdrew 47 draft guidances. (I have no idea what they were about. If you’re sufficiently intrepid to pursue this, the Federal Register notice is here.) FDA’s step may or may not have to do with a May 7 letter from Senators Lamar Alexander (R-TN) and James Lankford (R-OK) to several federal departments and agencies (Department of Labor, Department of Education, HHS, EEOC) requesting information on the agencies’ use of guidance documents. The letter expresses concern that the agencies may be using guidance documents in ways that circumvent the notice and comment requirements of the Administrative Procedure Act.
In my last post, I noted the problem of nonlegislative rules – rules, such as guidance documents, announced by administrative agencies that are not required to go through the procedural check of notice and comment and are usually not subject to judicial review. These nonlegislative rules are greatly favored by administrative agencies because these rules allow the agencies to circumvent the ordinary checks on them. Good governance requires that this loophole be closed.
The key feature about nonlegislative rules is that they are supposed to be non-binding. In contrast to a legislative rule, no one is required to follow a nonlegislative rule. In essence, they are simply supposed to provide information to the public about how the agency plans to interpret the law or exercise its policy discretion. This is what is said to justify not following notice and comment and not being subject to judicial review.
The problem is that nonlegislative rules often have a real effect as a matter of practice. For example, the guidance by the Department of Education announcing that the preponderance of the evidence standard should be used for sexual assault cases came in a nonbinding guidance, but of course many colleges have been pressured into adopting it for fear that the Department might otherwise take action against it, risking the federal funds it receives and the reputational hit it would take for being seen as violating Title IX.
But entirely forbidding nonlegislative rules is not a desirable solution, because these rules can often provide useful information to the public. So what should be done?
One of the big problems involving administrative agencies is that they are often insufficiently checked. With the relaxation of separation of powers during the New Deal, modern administrative law limits agencies through two principal mechanisms: required procedures and judicial review. Unfortunately, administrative law allows certain loopholes to these mechanisms that agencies can exploit.
One of the biggest problems these days occurs when agencies regulate through the use “guidance documents.” Mike Greve recently had a post discussing the Department of Education’s use of one such guidance. When agencies issue legislative regulations – rules that bind the public – they are normally required to do so after a notice and comment procedure. Moreover, such rules are often subject to judicial review when they are issued. Thus, there is a procedural and judicial review check on such legislative rules.
By contrast, guidance documents – which often read like legislative rules in that they appear to tell regulated parties how to act – are not subject to the notice and comment procedure. While guidance documents do not formally bind private parties, they often operate in the real world to exert a practical influence on the public. Moreover, while the matter is subject to dispute, there is often not judicial review of such rules. As a result, agencies love to regulate with such guidance documents since they can avoid scrutiny.
While the courts could possibly address these problems, the best way would be through legislation. Administrative agencies have enormous influence over the country and the Congress needs to pay attention to them. Republicans, who have recently been greatly concerned about the abuses of administrative agencies, should attempt to address this problem through legislation.