Some important (and promising) news that otherwise might be missed: last week President Trump signed executive orders curtailing the use of subregulatory guidance, such as Dear Colleague letters and informal field advice, to create binding law [Susan Dudley, Forbes (guidance should be shield for regulated, not sword for regulators), Michael P. DeGrandis, Reason; first (rules for development of guidance and transparency) and second (use of guidance in civil enforcement) executive orders; background here and here]
Agencies use informal guidance documents in lieu of formal regulation to clarify and interpret uncertainties in existing law and enforcement. Unfortunately, this and other forms of “subregulatory guidance” can also offer a tempting way to extend an agency’s power and authority into new areas, or ban private actions that hadn’t been banned before, all without going through the notice and comment process required by regulation, with its protections for regulated parties. Fair? Lawful? The Department of Justice under Jeff Sessions has lately sought to bring agency use of guidance documents under better control, and in particular end the use of documents that 1) are obsolete, 2) improperly use the process to circumvent the need for formal regulation, or 3) improperly go beyond what is provided for in existing legal authority. I’m interviewed about all this by Caleb Brown for the Cato Daily Podcast.
More: Charlie Savage, New York Times (DoJ revokes batch of guidance documents), Matt Zapotosky/Washington Post; Scott Shackford, Reason (rescission of guidance letter on local fines and fees should be read not as blessing those practices as okay, but as reflecting fact that federal government lacks clear statutory or constitutional mandate to intervene against them); Stephen McConnell, Drug and Device Law (“DOJ Says its Litigators May Not Use Noncompliance with FDA Guidances as Basis for Civil Enforcement Actions”).
Today, in an action to further uphold the rule of law in the executive branch, Attorney General Jeff Sessions issued a memo prohibiting the Department of Justice from issuing guidance documents that have the effect of adopting new regulatory requirements or amending the law. The memo prevents the Department of Justice from evading required rulemaking processes by using guidance memos to create de facto regulations.
In the past, the Department of Justice and other agencies have blurred the distinction between regulations and guidance documents. Under the Attorney General’s memo, the Department may no longer issue guidance documents that purport to create rights or obligations binding on persons or entities outside the Executive Branch….
“Guidance documents can be used to explain existing law,” Associate Attorney General Brand said. “But they should not be used to change the law or to impose new standards to determine compliance with the law. The notice-and-comment process that is ordinarily required for rulemaking can be cumbersome and slow, but it has the benefit of availing agencies of more complete information about a proposed rule’s effects than the agency could ascertain on its own. This Department of Justice will not use guidance documents to circumvent the rulemaking process, and we will proactively work to rescind existing guidance documents that go too far.”
This is an initiative of potentially great significance. For many decades, critics have noted that agencies were using Dear Colleague and guidance letters, memos and so forth — also known variously as subregulatory guidance, stealth regulation and regulatory dark matter — to grab new powers and ban new things in the guise of interpreting existing law, all while bypassing notice-and-comment and other constraints on actual rulemaking. To be sure, many judgment calls and hard questions of classification do arise as to when an announced position occupies new territory as opposed to simply stating in good faith what current law is believed to be. But the full text of the memo shows a creditable awareness of these issues. Note also, even before the Justice memo, Education Secretary Betsy DeVos’s statement in September, on revoking the Obama Title IX Dear Colleague letter: “The era of ‘rule by letter’ is over.”
Another notable pledge in the DoJ press release:
The Attorney General’s Regulatory Reform Task Force, led by Associate Attorney General Brand, will conduct a review of existing Department documents and will recommend candidates for repeal or modification in the light of this memo’s principles.
Note also this recent flap over certain financial regulations and the possibility that they may have been issued without notice to Congress, which could preserve Congress’s right to examine and block them under the terms of the Congressional Review Act.
- Federalist Society podcast with Wayne Crews and Devon Westhill on subregulatory guidance, agency memos, circulars, Dear Colleague letters, and other regulatory “dark matter”;
- Having announced end to practice of funneling litigation settlement cash to private advocacy groups, AG Sessions plans to investigate some actions of previous administration in this line [New York Post, earlier, related Nicholas Quinn Rosenkranz testimony on Obama bank settlements]
- Update: jury acquits 4 Boston Teamsters on extortion charges in intimidation of “Top Chef” show and guest host Padma Lakshmi [Nate Raymond/Reuters (“smash your pretty little face”), more, Daily Mail (language, epithets); earlier]
- “Hunted becomes the hunter: How Cloudflare is turning the tables on a patent troll” [Connie Loisos, Techcrunch]
- Here’s a pro se sovereign citizen complaint if you can stand to look [@associatesmind thread on this N.D. Calif. filing]
- IP license withheld: “Spain’s Bright Blue ‘Smurf Village’ Is Being Forced to De-Smurf” [Cara Giaimo, Atlas Obscura; Júzcar, Spain]
With help from FIRE (the Foundation for Individual Rights in Education), a former University of Virginia law student has sued the U.S. Department of Education Office for Civil Rights arguing that it violated the law in its notorious 2011 Dear Colleague letter requiring many campuses to roll back the procedural rights of students accused of sexual assault. The John Doe complainant argues that the department should at a minimum have put the policy shifts proclaimed in the letter through the notice-and-comment process prescribed for rulemaking, rather than in effect proclaiming them by decree through subregulatory guidance. The letter affected the student’s own case, he argues, because of comments from the retired judge deciding the case that she viewed the evidence as falling short of a clear and convincing threshold, the standard formerly in use, and ruled against him only because the university had complied with federal guidance by dropping its standard to preponderance of the evidence. [Susan Svrluga, Washington Post; Hans Bader, CEI]
For decades federal agencies have been exerting their will through informal guidance documents, memoranda, “Dear Colleague” letters, rules imposed in settlement agreements with regulated entities, and so forth, all tending to dodge the constraints that the Administrative Procedure Act (APA) and similar laws apply to formal creation of regulations through rulemaking. The result is to evade requirements of openness, accountability to the public and courts, and norms of consistency, preannouncement and rationality in agency policy. (See discussion of subregulatory guidance, “underground” and “stealth” regulation here, here, and here)
Wayne Crews of the Competitive Enterprise Institute has a new paper documenting the extent of the problem and proposing a variety of ways Congress could exercise tougher oversight.
- Judge Kozinski ate a sandwich paid for by the ACLU and the National Law Journal and American Bar Association are totally on it;
- Update: “Ohio court says city can’t use ‘quick-take’ to seize property” [Watchdog, earlier on town of Perrysburg’s effort to seize property in adjoining Middleton Township]
- Regarding the wildly one-sided attacks on arbitration of late, I’ve noticed that the people who call contractually agreed-to arbitration “forced” are usually the same people who don’t call taxation “forced”;
- “‘Underground Regulations’ Violate the Constitution as Much as Headline-Grabbing Executive Actions” [Ilya Shapiro, earlier on subregulatory guidance]
- Reminder: if you’re interested in Maryland policy you should be keeping abreast of my blog Free State Notes;
- Business litigants battle it out, sugar v. corn syrup [L.A. Times]
- Obama just backed ENDA-on-steroids Equality Act [Washington Post, earlier, Scott Shackford/Reason (bill would cover not only employment but “housing, lending, jury duty, and public accommodations” while “massively expand[ing] what the federal government counts as a public accommodation,” thus turning into federal cases what are currently local disputes like the Arlene’s Flowers case)]
The crackdown on college grievance procedures by the U.S. Department of Education’s Office for Civil Rights (OCR) paved the way for such developments as the administrative panic at the University of Virginia following Rolling Stone’s bogus assault article. I’ve got some thoughts at Cato about how the OCR crackdown grows out of a type of federal agency power grab — rule by “Dear Colleague” letter, sometimes known as sub-regulatory guidance or stealth regulation — that did not begin with this issue. As federal agencies have learned how to wield broad regulatory power without having to go through the formal regulatory process with its legal protections for affected parties, the courts have begun to apply skeptical scrutiny — which could open up one avenue of challenging the federal guidelines. Earlier on subregulatory guidance/stealth regulation here, here, etc. More: related from John Graham and James Broughel, Mercatus.
- “Sign Installer Cited for Violating Rule on the Sign He Was Installing” [Lowering the Bar, Santa Barbara]
- YouTube yanks exhibit from public court case as terms-of-service violation. How’d that happen? [Scott Greenfield on controversy arising from doctor’s lawsuit against legal blogger Eric Turkewitz]
- Philadelphia narcotics police scandal (earlier) has an alleged-sex-grab angle; also, given the presence of compelling video clips, shouldn’t the story be breaking out to national cable news by now? [Will Bunch, Philadelphia Daily News; Barbara Laker and Wendy Ruderman, PDN 2009 Pulitzer series, on Dagma Rodriguez, Lady Gonzalez and “Naomi” cases]
- The most dynamic part of the economy? Its endangered “permissionless” sector [Cochrane] Call it subregulatory guidance, or call it sneaky regulation by agencies, but either way it can evade White House regulatory review, notice and comment, etc. [Wayne Crews, CEI “Open Market”]
- What’s Chinese for “Kafkaesque”? Dispute resolution in Sino-American contracts [Dan Harris, Above the Law]
- In another win for Ted Frank’s Center for Class Action Fairness, Ninth Circuit reverses trial court approval of Apple MagSafe settlement [CCAF]
- Mississippi’s major tort reform, viewed in retrospect after ten years [Geoff Pender, Jackson Clarion Ledger]
- Can EPA use subregulatory guidance to dodge judicial review of formal notice-and-comment rulemaking? Appeals court says no [Allison Wood, WLF]
- “Outhouse blues: Salisbury Twp. tells 77-year-old to install $20,000 septic system he doesn’t want” [Lancaster (Pennsylvania) Online]
- Denying attorney fee in oil spill case, Texas judge questions authenticity of client signature [ABA Journal, Chamber-backed Southeast Texas Record]
- Why “climate justice” campaigns fail both the environment and the poor [Chris Foreman, The Breakthrough]
- Does the Yale Alumni Magazine often side with plaintiffs who sue to muzzle critics? [Neela Banerjee on Michael Mann lawsuit against National Review, Competitive Enterprise Institute, Mark Steyn, etc.]
- Anti-science, anti-humanity: Milan animal rights action trashes years of psychiatric research [Nature]
- Parody Tom-Friedman-bot must be at it again: “best place to start” response to Boston attack “is with a carbon tax” [Tim Blair] Too darn hot: “Dems warn climate change could drive women to ‘transactional sex'” [The Hill]
- Some California lawmakers seek to curb shakedown lawsuits under notorious Prop 65 chemical-labeling law [Sacramento Bee; Gov. Brown proposes reform]