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DOJ Issues “Rich Menu of Options” for Congress to Revise the Administrative Procedure Act

On August 11, the US Department of Justice (DOJ) released a new report that promotes constructive recommendations to modernize and improve the Administrative Procedure Act (APA).  In 1946, Congress enacted the APA to establish procedures as a check on administrative power, and to provide the public with some degree of due process in the face of regulatory action.  As it relates to the Clean Water Act, Clean Air Act, Endangered Species Act, and other relevant environmental regulatory programs, the APA provides the framework under which federal agencies develop and promulgate regulations to implement these programs.  Since Congress passed the APA over 70 years ago, the size and scope of federal regulatory authority has ballooned in size, leading at times to inefficiencies in the rulemaking process and a lack of accountability.  To address these shortcomings, DOJ hosted a summit in December 2019 that brought together leading regulatory practitioners, scholars, and policymakers to discuss possible reform.  Although legislative action in the near future is unlikely given the polarized political climate in Congress, the report puts forward a “rich menu of options” for Congress to revise the APA.

The report first highlights the role DOJ played in shaping the original APA.  In the late 1930s and early 1940s, the Attorney General’s Office formed a committee to evaluate the issues faced by the administrative agencies under the Roosevelt Administration.  The Attorney General then published a report detailing the committee’s findings and recommendations, and helped inspire the legislative text that would eventually become the APA.  DOJ’s latest report seeks to achieve similar goals by evaluating how the APA functions in today’s administrative agencies and providing a summary of suggested improvements.  The report hopes to disseminate the ideas that were discussed at the summit and provide a basis for Congressional action to upgrade and modify the current framework, “just as the 1941 report showed the way to the APA.”

The report then turns to the perceived deficiencies of the current system, and how such deficiencies can dissuade businesses from choosing to locate their offices and manufacturing facilities in the United States.  As President Reagan observed in a 1981 Executive Order, the APA did not resolve the need to “reduce the burdens of existing and future regulations, increase agency accountability for regulatory actions, provide for presidential oversight of the regulatory process, minimize duplication and conflict of regulations, and ensure well-reasoned regulations.”

According to the Report, studies estimate that the aggregate total cost of federal regulations fall between $1.75 and $2 trillion per year—roughly equivalent to what the federal government in 2018 collected in individual and corporate tax receipts combined.  Thus, the report asserts that federal administrative agencies are imposing costs equivalent to the tax burden on private entities without undergoing the same legislative process required by the Constitution.  Likewise, while the Congress passed 329 public laws, totaling 3,000 pages in the Statutes at Large between January 2015 and January 2017, during that same two-year period agencies issued more than 7,000 final rules, spanning 80,000 pages in the Federal Register.  Therefore, the report argues, if regulations play such a significant role in our legal system, it is important that the regulatory process “incorporate public input, reflect democratic control, and ultimately promote efficiency and growth.”

To achieve these goals, the report highlights a few proposals to improve the regulatory process:

DOJ concludes by stating “the time has come to modernize the APA,” and citing statements by conservative Supreme Court Justices about the constitutional concerns of the current regulatory structure.  For example, Chief Justice Roberts in his dissenting opinion in City of Arlington v. FCC, 569 U.S. 290, 315 (2013) states:

As one of the attendees to the Summit explained, the “blizzard of regulatory documents, FAQs, letter rulings, suggestions from regulators, winks and nods” that confront regulated entities makes it “extremely challenging” to know what the law actually is.  While the Summit participants did not agree on the specifics of certain policy proposals, given the significant changes that need to be made to modernize the APA, there was a consistent call for Congress to act to address these issues.

  • Make the procedural requirements of the Congressional Review Act judicially enforceable.

  • Extend judicial review to cover non-binding agency guidance that, for all intents and purposes, is actually binding on regulated parties.

  • Mandate a more flexible rulemaking process, such that the extent of the notice and comment period and scrutiny for a rule corresponds to the rule’s importance. This notion already exists in Executive Orders that require cost-benefit analyses for certain major rules.

  • Summit participants also focused on the Regulatory Accountability Act introduced in 2017 by a bipartisan group of Senators. That legislative proposal would institute a range of reforms, including:

    • Adopting a set of nine reforms unanimously recommended by the ABA House of Delegates to modernize the APA. ABA Resolution 106B (Feb. 8, 2016).  These include requiring agencies to fully disclose data and other information used in rulemakings, establishing a minimum comment period for major rules, and requiring agencies to adopt procedures to review rules retrospectively.

    • Codifying procedures established over the years by Executive Order, including cost-benefit analyses, consideration of a reasonable number of alternatives to an agency’s preferred course of action, and centralized review of proposed rules by OIRA.

    • Creating more rigorous procedures (e.g., alternatives and cost-benefit analyses) for “high impact” and “major” rules. “High impact” rules would be defined as rules likely to have an economic impact of $1 billion or more, and “major” rules as those rules likely to have an economic impact of $100 million or more or to significantly impact the economy in other ways.

    • Revive the use of public agency hearings for the development of high-impact and major rules. Such hearings would be limited to specific factual disputes and would enable both proponents and opponents of proposed rules to probe the factual bases of competing proposals through cross-examination.

    • “[T]he citizen confronting thousands of pages of regulations—promulgated by an agency directed by Congress to regulate, say, ‘in the public interest’—can perhaps be excused for thinking that it is the agency really doing the legislating. And with hundreds of federal agencies poking into every nook and cranny of daily life, that citizen might also understandably question whether Presidential oversight—a critical part of the Constitutional plan—is always an effective safeguard against agency overreaching.”

Copyright © 2022, Hunton Andrews Kurth LLP. All Rights Reserved.National Law Review, Volume X, Number 231
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Deidre Duncan Environmental Lawyer Hunton Andrews Kurth
Partner

The leader of the firm’s environmental practice, Deidre is lauded in Chambers USA, 2016 as “extremely capable,” “very familiar with the regulations and agencies,” and excels at giving clients “good insight into getting an expeditious outcome.” Her practice focuses exclusively on environmental, energy and administrative law.

Deidre represents clients on permitting, compliance and litigation relating to the Clean Water Act (CWA), the Endangered Species Act (ESA), the National Environmental Policy Act (NEPA) and other environmental statutes. Deidre counsels clients on Corps...

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Brian Levey DC Environmental Lawyers Hunton Andrews Kurth Firm
Associate

Brian assists clients in navigating complex permitting and compliance issues that arise under a host of federal environmental statutes and regulations. He also advocates for clients during related litigation and administrative rulemakings, including at the US Supreme Court.

Brian advises clients on matters that arise under the Clean Water Act (CWA), Endangered Species Act (ESA), National Environmental Policy Act (NEPA) and other environmental statutes. He assists applicants in obtaining and defending federal permits for complicated energy and development projects.  

He...

202-955-1629
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