Volume 68, Number 8 – May 2019

Articles

Agency Statutory Abnegation In the Deregulatory Playbook
William W. Buzbee
PDF

If an agency newly declares that it lacks statutory power previously claimed, how should such a move—what this Article calls agency statutory abnegation—be reviewed? Given the array of strategies an agency might use to make a policy change or move the law in a deregulatory direction, why might statutory abnegation be chosen? After all, it is always a perilous and likely doctrinally disadvantageous strategy for agencies. Nonetheless, agencies from time to time have utilized statutory abnegation as justification for deregulatory shifts. Actions by agencies during 2017 and 2018, under the administration of President Donald J. Trump, reveal an especially prevalent use of such statutory abnegation. This Article explains the agency statutory-abnegation strategy, illustrating its variants with review of past and recent uses. It then distinguishes statutory abnegation from agency actions and explanations that might appear to manifest or permit such a strategy but actually involve doctrinally different and less problematic settings. Then, after distilling the key elements of doctrines governing agency policy change, or what is sometimes referred to as consistency doctrine, it reviews procedural and analytical hurdles agencies must surmount to succeed in a policy change. It explores how analysis of this strategic move reveals the inadequacy of—or perhaps the naïve, publicly interested optimism behind—prevalent theories and linked normative claims about agency incentives, judicial roles, and political accountability. The Article closes by analyzing the persistent judicial rejection of such strategies and the underlying normative vision they reflect about the balance of law and politics in the administrative state.

Deregulatory Cost-Benefit Analysis and Regulatory Stability
Caroline Cecot
PDF

Cost-benefit analysis (“CBA”) has faced significant opposition during most of its tenure as an influential agency decisionmaking tool. As advancements have been made in CBA practice, especially in more complete monetization of relevant effects, CBA has been gaining acceptance as an essential part of reasoned agency decisionmaking. When carefully conducted, CBA promotes transparency and accountability, efficient and predictable policies, and targeted retrospective review.

This Article highlights an underappreciated additional effect of extensive use of CBA to support agency rulemaking: reasonable regulatory stability. In particular, a regulation based on a well-supported CBA is more difficult to modify for at least two reasons. The first reason relates to judicial review. Courts take a “hard look” at agency findings of fact, which are summarized in a CBA, and they require justifications when an agency changes course in ways that contradict its previous factfinding. A prior CBA provides a powerful reference point; any updated CBA supporting a new course of action will naturally be compared against the prior CBA, and the agency will need to explain any changes in CBA inputs, assumptions, and methodology. The second reason relates to the nature of CBA. By focusing on the incremental costs and benefits of a proposed change, CBA can make it difficult for an agency to justify changing course, especially when stakeholders have already relied on the prior policy. Together, these forces constrain the range of changes that agencies could rationally support. CBA thus promotes regulatory stability around transparent and increasingly efficient policies.

But, admittedly, this CBA-based stabilizing influence gives rise to several objections. This Article responds to, among others, concerns about democratic accountability and, most importantly, the use of alternative methods of policy modification. Overall, the Article concludes that CBA and judicial review of CBA play a desirable role in stabilizing regulatory policy across presidential administrations.

The Administrative Law of Regulatory Slop and Strategy
Robert L. Glicksman & Emily Hammond
PDF

Judicial review of agency behavior is often criticized as either interfering too much with agencies’ domains or doing too little to ensure fidelity to statutory directives and the rule of law. But the Trump administration has produced an unprecedented volume of agency actions that blatantly flout settled administrative-law doctrine. This phenomenon, which we term “regulatory slop,” requires courts to reinforce the norms of administrative law by adhering to established doctrine and paying careful attention to remedial options. In this Article, we document numerous examples of regulatory slop and canvass how the Trump agencies have fared in court thus far. We contend that traditional critiques of judicial review carry little force in such circumstances. Further, regulatory slop should be of concern regardless of one’s political leanings because it threatens the rule of law. Rather than argue for a change to substantive administrative-law doctrine, therefore, we take a close look at courts’ remedial options in such circumstances. We conclude that a strong approach to remedies can send corrective signals to agencies that reinforce both administrative-law values and the rule of law.

Deregulation Using Stealth “Science” Strategies
Thomas O. McGarity & Wendy E. Wagner
PDF

In this Article, we explore the “stealth” use of science by the Executive Branch to advance deregulation and highlight the limited, existing legal and institutional constraints in place to discipline and discourage these practices. Political appointees have employed dozens of strategies over the years, in both Democratic and Republican administrations, to manipulate science in ends-oriented ways that advance the goal of deregulation. Despite this bald manipulation of science, however, the officials frequently present these strategies as necessary to bring “sound science” to bear on regulatory decisions. To begin to address this problem, it is important to reconceptualize how the administrative state addresses science-intensive decisions. Rather than allow agencies and the White House to operate as a cohesive unit, institutional bounds should be drawn around the scientific expertise lodged within the agencies. We propose that the background scientific work prepared by agency staff should be firewalled from the evaluative, policymaking input of the remaining officials, including politically appointed officials, in the agency.

Rulemaking Inaction and the Failure of Administrative Law
Sidney A. Shapiro
PDF

The Trump administration may be the first presidency to go four years without promulgating new significant regulations to protect people and the environment. Although administrative law protects regulatory beneficiaries when agencies revoke or modify previous rules, those protections evaporate when an agency rejects a rulemaking petition, fails to answer a petition for years, or fails to work on pending regulatory protections. In effect, the courts have outsourced agency accountability for rulemaking inaction to political oversight, but as a defense of the interests of regulatory beneficiaries, political accountability is the “Maginot Line” of oversight. Despite the difficulty of judging an agency’s claim that it has higher priorities or that it needs more time to make a decision, judges should require more detailed explanations. Although less trusting judicial review is not without its problems, the current approach of abject deference to agency inaction ignores Congress’ commitment to protect people and the environment as specified in an agency’s mandate.

Essay

Sludge and Ordeals
Cass R. Sunstein
PDF

Is there an argument for behaviorally informed deregulation? In 2015, the United States government imposed 9.78 billion hours of paperwork burdens on the American people. Many of these hours are best categorized as “sludge,” understood as friction, reducing access to important licenses, programs, and benefits. Because of the sheer costs of sludge, rational people are effectively denied life-changing goods and services. The problem is compounded by the existence of behavioral biases, including inertia, present bias, and unrealistic optimism. A serious deregulatory effort should be undertaken to reduce sludge through automatic enrollment, greatly simplified forms, and reminders. At the same time, sludge can promote legitimate goals. First, it can protect program integrity, which means that policymakers might have to make difficult tradeoffs between (1) granting benefits to people who are not entitled to them and (2) denying benefits to people who are entitled to them. Second, it can overcome impulsivity, recklessness, and self-control problems. Third, it can prevent intrusions on privacy. Fourth, it can serve as a rationing device, ensuring that benefits go to people who most need them. Fifth, it can help public officials to acquire valuable information, which they can use for important purposes. In most cases, however, these defenses of sludge turn out to be far more attractive in principle than in practice. For sludge, a form of cost-benefit analysis is essential, and it will often demonstrate the need for a neglected form of deregulation: sludge reduction. For both public and private institutions, “Sludge Audits” should become routine, and they should provide a foundation for behaviorally informed deregulation. Various suggestions are offered for new action by the Office of Information and Regulatory Affairs, which oversees the Paperwork Reduction Act; for courts; and for Congress.

Volume 68, Number 8 – May 2019

Articles

Agency Statutory Abnegation In the Deregulatory Playbook
William W. Buzbee
PDF

If an agency newly declares that it lacks statutory power previously claimed, how should such a move—what this Article calls agency statutory abnegation—be reviewed? Given the array of strategies an agency might use to make a policy change or move the law in a deregulatory direction, why might statutory abnegation be chosen? After all, it is always a perilous and likely doctrinally disadvantageous strategy for agencies. Nonetheless, agencies from time to time have utilized statutory abnegation as justification for deregulatory shifts. Actions by agencies during 2017 and 2018, under the administration of President Donald J. Trump, reveal an especially prevalent use of such statutory abnegation. This Article explains the agency statutory-abnegation strategy, illustrating its variants with review of past and recent uses. It then distinguishes statutory abnegation from agency actions and explanations that might appear to manifest or permit such a strategy but actually involve doctrinally different and less problematic settings. Then, after distilling the key elements of doctrines governing agency policy change, or what is sometimes referred to as consistency doctrine, it reviews procedural and analytical hurdles agencies must surmount to succeed in a policy change. It explores how analysis of this strategic move reveals the inadequacy of—or perhaps the naïve, publicly interested optimism behind—prevalent theories and linked normative claims about agency incentives, judicial roles, and political accountability. The Article closes by analyzing the persistent judicial rejection of such strategies and the underlying normative vision they reflect about the balance of law and politics in the administrative state.

Deregulatory Cost-Benefit Analysis and Regulatory Stability
Caroline Cecot
PDF

Cost-benefit analysis (“CBA”) has faced significant opposition during most of its tenure as an influential agency decisionmaking tool. As advancements have been made in CBA practice, especially in more complete monetization of relevant effects, CBA has been gaining acceptance as an essential part of reasoned agency decisionmaking. When carefully conducted, CBA promotes transparency and accountability, efficient and predictable policies, and targeted retrospective review.

This Article highlights an underappreciated additional effect of extensive use of CBA to support agency rulemaking: reasonable regulatory stability. In particular, a regulation based on a well-supported CBA is more difficult to modify for at least two reasons. The first reason relates to judicial review. Courts take a “hard look” at agency findings of fact, which are summarized in a CBA, and they require justifications when an agency changes course in ways that contradict its previous factfinding. A prior CBA provides a powerful reference point; any updated CBA supporting a new course of action will naturally be compared against the prior CBA, and the agency will need to explain any changes in CBA inputs, assumptions, and methodology. The second reason relates to the nature of CBA. By focusing on the incremental costs and benefits of a proposed change, CBA can make it difficult for an agency to justify changing course, especially when stakeholders have already relied on the prior policy. Together, these forces constrain the range of changes that agencies could rationally support. CBA thus promotes regulatory stability around transparent and increasingly efficient policies.

But, admittedly, this CBA-based stabilizing influence gives rise to several objections. This Article responds to, among others, concerns about democratic accountability and, most importantly, the use of alternative methods of policy modification. Overall, the Article concludes that CBA and judicial review of CBA play a desirable role in stabilizing regulatory policy across presidential administrations.

The Administrative Law of Regulatory Slop and Strategy
Robert L. Glicksman & Emily Hammond
PDF

Judicial review of agency behavior is often criticized as either interfering too much with agencies’ domains or doing too little to ensure fidelity to statutory directives and the rule of law. But the Trump administration has produced an unprecedented volume of agency actions that blatantly flout settled administrative-law doctrine. This phenomenon, which we term “regulatory slop,” requires courts to reinforce the norms of administrative law by adhering to established doctrine and paying careful attention to remedial options. In this Article, we document numerous examples of regulatory slop and canvass how the Trump agencies have fared in court thus far. We contend that traditional critiques of judicial review carry little force in such circumstances. Further, regulatory slop should be of concern regardless of one’s political leanings because it threatens the rule of law. Rather than argue for a change to substantive administrative-law doctrine, therefore, we take a close look at courts’ remedial options in such circumstances. We conclude that a strong approach to remedies can send corrective signals to agencies that reinforce both administrative-law values and the rule of law.

Deregulation Using Stealth “Science” Strategies
Thomas O. McGarity & Wendy E. Wagner
PDF

In this Article, we explore the “stealth” use of science by the Executive Branch to advance deregulation and highlight the limited, existing legal and institutional constraints in place to discipline and discourage these practices. Political appointees have employed dozens of strategies over the years, in both Democratic and Republican administrations, to manipulate science in ends-oriented ways that advance the goal of deregulation. Despite this bald manipulation of science, however, the officials frequently present these strategies as necessary to bring “sound science” to bear on regulatory decisions. To begin to address this problem, it is important to reconceptualize how the administrative state addresses science-intensive decisions. Rather than allow agencies and the White House to operate as a cohesive unit, institutional bounds should be drawn around the scientific expertise lodged within the agencies. We propose that the background scientific work prepared by agency staff should be firewalled from the evaluative, policymaking input of the remaining officials, including politically appointed officials, in the agency.

Rulemaking Inaction and the Failure of Administrative Law
Sidney A. Shapiro
PDF

The Trump administration may be the first presidency to go four years without promulgating new significant regulations to protect people and the environment. Although administrative law protects regulatory beneficiaries when agencies revoke or modify previous rules, those protections evaporate when an agency rejects a rulemaking petition, fails to answer a petition for years, or fails to work on pending regulatory protections. In effect, the courts have outsourced agency accountability for rulemaking inaction to political oversight, but as a defense of the interests of regulatory beneficiaries, political accountability is the “Maginot Line” of oversight. Despite the difficulty of judging an agency’s claim that it has higher priorities or that it needs more time to make a decision, judges should require more detailed explanations. Although less trusting judicial review is not without its problems, the current approach of abject deference to agency inaction ignores Congress’ commitment to protect people and the environment as specified in an agency’s mandate.

Essay

Sludge and Ordeals
Cass R. Sunstein
PDF

Is there an argument for behaviorally informed deregulation? In 2015, the United States government imposed 9.78 billion hours of paperwork burdens on the American people. Many of these hours are best categorized as “sludge,” understood as friction, reducing access to important licenses, programs, and benefits. Because of the sheer costs of sludge, rational people are effectively denied life-changing goods and services. The problem is compounded by the existence of behavioral biases, including inertia, present bias, and unrealistic optimism. A serious deregulatory effort should be undertaken to reduce sludge through automatic enrollment, greatly simplified forms, and reminders. At the same time, sludge can promote legitimate goals. First, it can protect program integrity, which means that policymakers might have to make difficult tradeoffs between (1) granting benefits to people who are not entitled to them and (2) denying benefits to people who are entitled to them. Second, it can overcome impulsivity, recklessness, and self-control problems. Third, it can prevent intrusions on privacy. Fourth, it can serve as a rationing device, ensuring that benefits go to people who most need them. Fifth, it can help public officials to acquire valuable information, which they can use for important purposes. In most cases, however, these defenses of sludge turn out to be far more attractive in principle than in practice. For sludge, a form of cost-benefit analysis is essential, and it will often demonstrate the need for a neglected form of deregulation: sludge reduction. For both public and private institutions, “Sludge Audits” should become routine, and they should provide a foundation for behaviorally informed deregulation. Various suggestions are offered for new action by the Office of Information and Regulatory Affairs, which oversees the Paperwork Reduction Act; for courts; and for Congress.