Executive Orders on Guidance: Implications and Next Steps

Executive Branch Review Week Teleforum

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In October of 2019, President Trump issued an executive order that imposed a series of restrictions and requirements on Federal agencies, and even included a requirement that agencies publish their guidance on the Internet. The purpose of the executive order was to promote transparency and democratic fairness in the administrative law process. This has led to a renewed debate over what the relationship should be between the executive branch and the administrative state, and has also led to some disagreement over whether the executive order represented any meaningful change from the status quo.


Hon. Steven Bradbury, General Counsel (and performing the functions and duties of Deputy Secretary), U.S. Department of Transportation

John Walke, Director, Clean Air Project, Climate & Clean Air Program, Natural Resources Defense Council

Prof. Adam White, Assistant Professor and Executive Director, The C. Boyden Gray Center for the Study of the Administrative State, Antonin Scalia Law School at George Mason University


This event is part of Executive Branch Review Week.



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Event Transcript



Dean Reuter:  Welcome to Teleforum, a podcast of The Federalist Society's Practice Groups. I’m Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society. For exclusive access to live recordings of Practice Group Teleforum calls, become a Federalist Society member today at fedsoc.org.



Dean Reuter:  Welcome to a special Executive Branch Review Week edition of The Federalist Society's Practice Group Teleforum Conference call as today, April 30, 2020, we discuss "Executive Orders on Guidance: Implications and Next Steps."


      I'm Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society. As always, please note that all expressions of opinion are those of the experts on today's call. Also, this call is being recorded for use as a podcast in the future and will likely be transcribed. Finally, this call is open to the press and to the public.


      We're very pleased to continue our Executive Branch Review Week here at The Federalist Society with three guests on our panel. We're going to hear opening remarks of about 8-10 minutes from each and then some conversation among them but, as always, questions from our audience. So please have those in mind for when we get to that portion of the program.


We’re going to hear first from the Honorable Steven Bradbury. He's General Counsel and performing the functions and duties of the Deputy Secretary at the U.S. Department of Transportation.


We'll hear next from John Walke. He's Director of the Clean Air Project at the Climate & Clean Air Program at the Natural Resources Defense Council.


Third, we will hear from Professor Adam White, Assistant Professor and Executive Director of the C. Boyden Gray Center for the Study of the Administrative State at the Antonin Scalia Law School at George Mason University.


With that, Steven Bradbury, the floor is yours.


Hon. Steven Bradbury:  Dean, thank you very much. And it's a pleasure to be participating virtually in this teleforum.


      The subject is guidance documents, and I think it's long been recognized that the use of informal guidance documents can raise a number of issues that affect parties outside the government and their interests. And those issues fall generally into four categories.


      First, guidance documents may be used or invoked as a basis to impose obligations on private parties that may be asserted go beyond the clear requirements set forth in the text of statutes or regulations. And, of course, regulations under the APA are typically adopted through notice and comment rulemaking in accordance with the Administrative Procedure Act. And that is usually not the case with -- or often not the case with guidance documents.


      Number two, even if a guidance document is recognized as not having the force and effect of law in its own right, as a practical matter, guidance documents may still induce regulated parties to incur costs to come into alignment with the guidance that it wouldn't otherwise incur.


      Number three, guidance may have been, often is, adopted -- in the past, it has been adopted in an informal manner. For example, in a private negotiation between an agency office and an interested party, and without, for example, without the sign off of the head of the agency, without the opportunity for public participation, without legal review, in many cases, by the agency counsel to ensure its consistency with existing laws and regulations, and without inter-agency coordination through OIRA and OMB.


      And finally, fourth, guidance documents have often been obscure and not accessible to the public. So it's, again, these have been long known as issues with guidance documents as far back as January 2007. OMB issued a bulletin on agency good guidance practices to try to bring some discipline to the process of approving guidance and issuing guidance.


      That bulletin was actually issued under the good offices of Jeff Rosen when he was general counsel at OMB. He, of course, now is the deputy attorney general. And before that, in this administration, was our deputy, deputy at DOT.


      But unfortunately, that OMB bulletin was never fully implemented, at least not in a consistent way across the Executive Branch. And so these issues have continued to arise and be recognized with guidance.


      In this administration, there really has been a concerted effort to focus on addressing some of these issues and reforming the process for review, clearance, and use of guidance documents. So you saw back in January of 2018, Rachel Brand, when she was the associate attorney general at DOJ, issued a memorandum to the offices of DOJ, which was promulgated or circulated across the Executive Branch and made public, that made it clear that DOJ will not use a party's non-compliance with a guidance document as basis for proving a violation of law in any affirmative civil enforcement actions that DOJ is involved in.


      So basically, guidance is not legally binding and will not be used to impose legal obligations on parties that are not set forth in statute or regulation. And consistent with that, those principles, in an attempt to address these issues, various departments of the government under this administration have taken action to try to impose more discipline and clear process in review and clearance of guidance documents.


      We issued a general counsel memo that was finalized back in December of 2018 that addressed these issues and set forth new procedures for DOT in these areas. And then, of course, on October 15, 2019, the President issued Executive Order 13891. It requires that all operative guidance documents must be posted on an agency's website that's easily accessible, and if not, you can't rely on those. They're not operative anymore. And also that significant guidance that has potential to impose costs or is otherwise significant under the OIRA definition must be subject to public notice and comment for at least 30 days unless subject to specific exemption.


      It also required the agencies and departments of the Executive Branch to issue regulations formalizing these reforms and requirements. And we did that at DOT, I am proud to say. I think we were one of the first departments, if not the first, to adopt those regulations in compliance with the President's Executive Order.


      We issued regulations that were in November of 2019. They were published in the Federal Register on December 20th of 2019. And they codify in regulations all of the reforms we had previously put in place the year before through my memo to DOT, and this is published on our website. And the regulations are now in the Federal Register and published in the CFR.


      The regulation set forth some clear requirements to address the issues I raised earlier. So all guidance documents are required in our department to be reviewed and cleared by counsel to ensure that they don't purport to impose new legal obligations and to ensure that they're consistent with law and existing regulations.


      Certain types of guidance that may have broader effects may be deemed significant or otherwise of interest to our department -- of importance to our department's interest will also get reviewed by my office, the General Counsel's office, and subject to approval of the secretary.


      All guidance documents have to include a clear legend stating that they do not create new legal obligations other than clarifying existing obligations under -- clearly stated in existing statutes or laws. Guidance that is determined to be significant will go through OIRA review and clearance and also be subject to public notice and comment for at least 30 days unless they fall within certain specified or approved exceptions.


      And in connection with the significance determination, if it's thought that private parties are likely to incur new costs to bring their conduct into compliance with the guidance or would otherwise impose costs on the economy, there needs to be a good faith effort to estimate, at least in a rough sense, what that cost impact will be. And that, of course, will help inform whether the guidance should be treated as significant for OIRA purposes, for example.


      And then there's a requirement that we post all guidance documents on our website. We've done that. We've setup websites that link to all of our sub-agencies' guidance documents. And so we, again, were able to come into compliance with the President's Executive Order requirement there.


      And finally, we've provided that it's the policy of DOT to do a report to Congress under the Congressional Review Act, the CRA report, for all significant guidance documents. We have set forth various categories of exceptions to some of these procedural requirements, mostly for documents where there's a need for expedient action to address safety issues.


For example, in the FAA context with notices to airmen and safety alerts for aviation operators and restrictions on certain air space. Certain of our operating administrations at DOT have similar needs for quick posting of changes, for example, in training manuals and other things that sometimes have been treated as guidance by the public.


      And so these procedures are all in place. I will say that during the current COVID crisis, we and other departments in coordination with OMB and across the Executive Branch have been extremely busy addressing the response to the pandemic, in many cases, through expedited guidance documents that have been issued.


      Interestingly, these are all being done through a streamlined inter-agency review process. They're all being posted publicly. They include the legend I mentioned, that they're not legally binding in their own right, but they address lots of needs that various of our transportation related systems, for example, are encountering in connection with the special pressures and challenges posed by COVID.


      So there has been an important use of guidance documents in a very, I think, very positive way during the COVID crisis. So it's clear guidance documents can have a very positive effect in terms of clarifying obligations for parties and the public generally but very important, I think, that they be subject to these reforms and improvements in the process for review and clearance that I've described.


      So thanks very much. I'm now going to turn the mic over to John Walke from the Natural Resources Defense Council. John, thank you.


John Walke:  Thanks, Steve. That was a really terrific overview of our topic.


      I am the Clean Air Director at a national environmental group, and my focus is going to be how -- from the perspective of an environmental practitioner for over 25 years, how agencies use and abuse guidance documents in furtherance of deregulation and rolling back standards. I trust that Adam may speak to how agencies also abuse guidance documents to regulate, but that's where I'm going to start with my focus.


      And I want to start with a story. When I was out of law school as a fresh, young associate attorney at a corporate law firm in Washington D.C. in the mid-‘90s, I was given an assignment by a partner to write a memo on a recent EPA guidance document that had come out under the Clinton administration addressing hazardous waste regulation and addressed the feature of the rules that had been the subject of earlier guidance documents that made clear in the earlier guidance document and the regulations that hazardous waste generators were required to do, let's just say, A and B.


      The new guidance document that came out said that regulated entities were required to do A but not B. And so the partner, understandably, wanted some clarification to determine what the client could do and follow.


      So I called the person who actually wrote the guidance document. And the guidance document under Clinton purported to be just simply reaffirming and restating what the earlier guidance documents had done. And when I pointed out to him that it in fact had done quite the opposite, he became quite angry and irate and asked me if I was accusing him and accusing EPA of lying.


      Well, I didn't quite know what to do with this because obviously, they were changing the agency's long-standing interpretation of the regulations and, in my view, changing the most coherent and sensible and reasonable natural reading of the regulations as well.


      But I did my job. I went back and wrote the memo. And that taught me an early lesson about how agencies use and abuse guidance documents, particularly deregulatory guidance documents. The courts tell us that agencies are not allowed to use guidance documents to impose obligations or relieve obligations. And yet, it is clear that the agencies frequently do so to relieve obligations and roll back regulations.


      Let me read you a sentence from the Trump Executive Order from October on guidance documents. To paraphrase, it says that frequently, agencies have used "authorities inappropriately in attempts to regulate the public without following rulemaking." That is undoubtedly true.


You will not see, however, the word deregulate, relieve obligations, or even hints of those notions in the Trump Executive Order because that is not their concern. The concern is preventing guidance documents to be used from regulating the public. And let me hasten to add that guidance documents should not be used to regulate the public.


      In this administration, however, there has been a veritable oil-well head gusher of guidance documents from EPA used to deregulate industry and to roll back regulations. I counted the guidance issued by the Trump Air Quality and Climate Office at EPA, and they have issued 132 guidance documents just since the start of this administration.


      Many are technical, to be sure, but the big ones, the significant ones, are all rollbacks of long-standing regulations, long-standing interpretations, and prior guidance by the agency.


In particular, I want to give you another example. There was a very high-profile guidance document rolling back limits on toxic air pollution that cause cancer, neurological damage, and the like. We challenged this guidance document in court and almost immediately, or around the same time, the agency announced that it was undertaking a rulemaking to codify this practice.


We went to court, and the court ruled that the guidance document was unreviewable because it was a guidance document. Well, mysteriously, the agency has started to slow walk this announced rulemaking and we've seen no signs of it because they have given the regulated entities what they wanted, which is an interpretation that they no longer need to meet these toxic limits. And we've seen examples across the country where industries and states have rushed to follow exactly this practice and to relieve industry of these limits on toxic air pollution.


Let me read something that I found, actually, in a tweet from Adam White commending an article by one of his colleagues at George Mason University School of Law. And it resonated with me. I thought it was quite [an] elegant take on the subject, just reading a couple of sentences.


Courts have done a lousy, excessively deferential job of policing this overreach. Now, here's the elegant part. That's just what the agency's strategic conduct envisions. It's only a draft, no binding effect, ga-blah, ga-blah. Also, if you sue, we'll get even.


That's the regulated industry's perspective, but the public perspective is and if you sue, the courts won't review it and the industry and thousands of facilities across the country will cease to follow obligations without any policing or oversight.


So what do we do about this? Well, I think what is going to happen in future administrations, let's take a future Democratic administration, that you are going to see agencies resorting increasingly to guidance documents because paradoxically, the Trump administration has made it far easier to issue guidance documents without the courts exercising judicial review or oversight.


There have been a string of recent decisions in the D.C. Circuit Court of Appeals. Most recently, a big one involving Sierra Club in which the courts have simply refused to provide judicial review of these guidance documents. And so what you will see in future administrations, I predict, is a much heavier resort to guidance documents, including in future Democratic administrations in which guidance documents will be used to regulate and not to regulate.


So I dare say that the members of this audience who are more conservative than I, which is probably 99 percent, really should be careful what they wish for. Because I do believe that you're going to see greater evasions of notice and comment rulemaking, greater evasions of judicial review, and it will not redound to the benefit of public input, judicial oversight, or the rule of law.


I will end there and turn it over to the esteemed Professor Adam White, our next panelist. Thank you.


Prof. Adam White:  Well, thanks, John. You know, I have to admit, anytime you start by saying, "As Adam tweeted," I naturally start to fear oh my gosh, what did it tweet, because it usually doesn't end well. Appreciate you pointing that out.


      I'm going to step back and just take a look at some big picture themes on this because Steven and John have both covered the ground so well and really laid out both the practical difficulties of grappling with this issue of guidance documents and also pointing out, as John points out, that this is not an issue that cuts in one ideological or policy direction. It's really a question about the process of governance.


      This is not -- it's interesting. This is an issue that's really, I feel like it's really taken on much more public, political, and legal weight in recent years, in the last 15 years or so, this question about guidance documents. And guidance documents is a cash all, right, for a variety of things: interpretive rules, policy statements, and many other things. Many of which the Framers of the APA, almost 75 years ago, they were aware of.


When they wrote the APA, they make specific reference to policy statements and interpretive rules. They actually carve them out of the notice and comment process. In part because, as they described in their debates, they wanted to make sure that these documents still would happen because they have real value for the public.


And also, interestingly, in light of the subsequent development of administrative law, many of the Framers of the APA expected that these sorts of rules would get, interpretive rules especially, would get full judicial review without deference. And, obviously, that got complicated a little bit by Chevron.


      But in any event, this is not a new problem. But it is a difficult one, implicating both agency process and judicial deference. But it's become much more complicated in recent years because of this concern evidenced both by Steven and John that agencies will not just use guidance for good reasons but also to use it as a substitute for other things that they ought to do, namely the stuff of notice and comment rulemaking.


      And just to be very clear, agency guidance is a good thing when it's used in its proper way. I, too, used to be in private practice and our clients and we, we wanted to know the agency's views of regulations and statutes and what polices might be coming down the pipeline.


      The only thing worse than guidance documents is the absence of guidance documents, where you really have no idea how an agency might enforce an ambiguous rule or an ambiguous statute. Steven really walked through the recent developments that I think are important to keep an eye on, both the good work the DOT's been doing -- and I have to admit, it's -- I think DOT has really led the way in terms of reform in these procedural questions.


      There have been other agencies that have done a lot of good on these, the financial regulators, a number of them, the Federal Reserve Board of Governors, the FDIC and the CFPB and the Credit Union Administration came together for an inter-agency statement clarifying the role of supervisory guidance.


      The Administration Conference of the United States, of which I'm a member, we've put out a number of recommendations for -- and the ACUS, the Administrative Conference, is sort of a joint government and public body that studies some of these questions and offers recommendations for reform. Its members include scholars, practitioners, current agency lawyers, and so on.


      Just in the last two years, we've issued a variety of recommendations, not just on the substance of interpretive rules and policy statements but also advice on making the guidance documents more publicly available.


      And one other development that I think is important to keep in mind that could have real effect is the Supreme Court's decision last year in Kisor v. Wilkie. It was focused on deference and how much deference to give agencies when they interpret their own regulations. But some of the substance of that decision, right, the way that deference might turn on questions of whether the agency's interpretation reflects fair and considered judgment, whether there's unfair surprise, and other factors that the court outlined, they really raise questions about how much deference guidance documents might get in the future. And we should keep an eye out for that.


      But in thinking through ways to reform guidance -- and I do think that guidance documents, they're the basic process for issuing guidance documents. It's needed reform, and it still needs more reform. These are the four basic principles that tend to guide my own thinking on this.


      First, I think there always has to be a focus on substance and realistic expectations over form. One of the challenges in dealing with guidance documents is in theory, guidance documents do not have the force of law. That's one of the ways that you define them.


      When I teach administrative law, one of the last subjects I teach is guidance documents and interpretive rules and policy statements. And as a matter of law, it's pretty simple. Interpretive rules don't have the force of law. Guidance documents don't have a present binding effect.


      But as a matter of substance, as I know and Steven knows and John knows, the regulated community and everybody else with a stake in the matter really organizes themselves around guidance documents. Even when the agency says they're not formally binding, risk averse compliance officers and companies will often treat them effectively as binding just to minimize risk.


      I sometimes joke, being the oldest of three brothers, I joke that sometimes guidance documents are kind of like when the oldest brother grabs the younger brother's hand and starts slapping the younger brother's face with his own hand and says, "Stop slapping yourself. Stop slapping yourself," right? Agencies often say these documents, they're not binding, everybody just voluntarily complies with them. Well, yes and no.


      And so the real challenge for reform is really looking at the reality of this, the realistic expectations. And, of course, this is a cycle, a feedback loop in a way, but the best starting place on this in many ways, I think, is a report that Nic Parrillo of Yale wrote for the Administrative Conference in 2017, looking through the ways in which both agencies and the regulated communities understand the practical weight and import of guidance documents.


      Second, in reform, I think it's good to focus on reforms that are sticky in the sense that the kinds of things that once put into place, agencies have real incentives for not changing back. And what I mean by this are really transparency promoting mechanisms.


I think maybe the most important reforms we've seen in recent years on this has been the move by the White House and other agencies to just collect guidance documents and make them more readily available on agency websites. Once that's in place and there's a process for regularly updating them, it's hard to imagine agencies just unilaterally pulling those things down.


Of course, sometimes agencies do decrease their transparency. But once you create an audience for a customer base for these things, it's harder for agencies with a change of administrations or other change of leadership to just wipe these things away. So focus on those sorts of reforms that can build real inertia by building an audience.


The third point that I focus on is that procedural reforms can have substantive effect. Just forcing the agencies to do the work of collecting and publishing guidance will force them to think harder about issuing and maintaining guidance going forward, right?


Sometimes, these are just things that agencies haven't had to think hard about. And just the work of collecting them and publishing them can change the way that agencies work with them going forward.


Then last, my last point I'll say is the key really -- and this is, I guess, from our Federal Society audience, the key is really not parchment barriers but structural incentives. I think any of these reforms, it's not enough to simply issue executive orders or even agency rules that lay down rules. Those are important. They're necessary, but they're not sufficient for real reform.


Ultimately, you have to create the structural incentives to get agencies to do the right thing. I have two examples. The first is in legislative debates over administrative reform, they often focus on both administrative process and deference, judicial deference. I've been an advocate for connecting judicial deference explicitly to process.


If Congress wants less guidance documents and more notice and comment rulemaking, then tell courts not to defer to guidance documents and only defer to notice and comment rulemaking. It creates an incentive, a carrot, for agencies to do the right thing.


Second, much like canons of construction, like the rule of lenity, construct standards that put the burden on the government rather than the public. If guidance documents were given real legal weight as safe harbors against the agency, binding the agency but not the public, that creates a structural incentive for the agency to really think long and hard before it issues guidance documents.


Again, the key in all of this is just striking the right balance because guidance documents are a good thing when rightly used. But we have to be very careful about how we go about reforms.


I'll leave it at that and turn it back over to Dean.


Dean Reuter:  Well, thank you all. I want to go back to Steve Bradbury and give him a chance to respond. Steve, I wonder if in doing that, I wonder if you could address that question in guidance regulation versus deregulation. And is there a meaningful difference there in the use of guidance?


Is it safe to say -- is it fair to say what we're talking about here is the assertion of power over people and markets and regulated entities when you're regulating versus the withdrawal of power when you're deregulating? Is it that clearly distinct regulation and deregulation?


Hon. Steven Bradbury:  I don't think it's that clear, formally, in terms of the distinction. I think with any guidance document, it's important, as I try to stress, to have legal review by the responsible counsel in the agency to ensure that the guidance is consistent with the text of controlling statutes and regulations.


      And part of the procedures I've described, and the reforms, are really an effort to try to lessen the tendency to regulate or change regulations one way or another through guidance documents.


      At the same time, I think it's a practical matter. It's certainly the case if you're thinking in terms of burdens and costs that generally speaking, guidance is more likely to have an economic burden or cost burden on a regulated entity where the agency falls into the habit of requiring something as their preferred practice -- preferred way of complying with an obligation.


      So for example, if the agency's rule says that the entity, the regulated entity, has to apply generally acceptable accounting practices in a certain area and then they issue guidance letters or something to the industry that says we will deem you to have generally accepted accounting or sufficient accounting if you hire two separate sets of independent public accounting firms to do your books.


      Well, you can easily see how regulated entities may incline toward incurring the extra cost of a second set of accountants because the agency has essentially told them they will deem that sufficient for regulatory purposes, and they've incurred quite a substantial cost in doing that. And that's a real practical impact of the use of guidance documents that we try to take into account in terms of some kind of cost benefit assessment and judgment. I think that's very important.


But in terms of relaxing regulatory restrictions or requirements in certain cases, agencies often have discretion to adopt exemptions to requirements. And that's not a bad thing provided it's clear, it's consistently applied. There are standards to it, and it's explained publicly and aware to the public. And sometimes, guidance is an appropriate way to do that.


      I do think there's a very positive aspect to guidance in terms of clarifying how an agency thinks about the requirements of a particular regulation, for example, and the way as an exercise of its enforcement discretion, it approaches enforcing that requirement.


      And unfortunately, too often in the past, that policy clarification was only available to a select number of outside entities or interested parties because it wasn't generally publicly known or available to everybody. And I think every one of us on the panel will probably agree that it's a good thing to put in place increased procedures for the review, the clearance, public participation, and guidance for transparency of guidance.


      And history will tell whether one administration or another going forwarding applying these protections and procedures is overusing guidance one way or another in a way that should be modified or should raise concerns. But at least, there'll be a broader awareness, and it will be more out in the open if these procedures are institutionalized as Adam mentioned.


      Thanks very much.


Dean Reuter:  Sure. I want to get back to our other speakers, but let's do check in with our first caller of the day here.


Caller 1:  So agencies seem to have already reacted to these EOs by pivoting to a more invidious form of enforcement where they're bringing enforcement until you comply, and they tell you during the investigation what the rules are.


      The examples would be FCC with 12(b)(1) fees and DOL with missing participants. Do you have any thoughts on ways to limit agencies' ability to essentially coerce compliance in a manner that so far has evaded judicial review?


Dean Reuter:  Who wants to take a shot at that one?


Hon. Steven Bradbury:  Well, let me jump in. This is Steve Bradbury, and I'll just be real quick. There are issues -- there's always issues and certainly there have been issues with the use and abuse of enforcement power.


And if you take a look at our rule on rules, as we call it, our rule that we published. It's in the Federal Register, 84 FR 71714, published December 27, 2019. We actually have three sections in it: rulemaking procedures, procedures for review and clearance of guidance documents, which we've been talking about here, and then a third section on reforming enforcement actions to ensure due process in enforcement actions.


And I think the approach to enforcement actions goes hand in hand with reforming the rulemaking process and also the proper use of guidance documents. And that's why you saw the President issue a second executive order, which was really paired with the executive order on guidance documents that goes to the need to reform enforcement actions.


And so we've tried to do that together in one rule where we've codified those reforms. And I think that's a whole other topic for discussion, I think, the abuse of enforcement action powers. And I would just refer you to our regulation on that. Thanks, Dean.


Dean Reuter:  You bet. John Walke or Adam White, anything on this point?


Adam White:  I'll jump in on this for a moment if John doesn’t have a point.


John Walke:  Adam White, go ahead.


Adam White:  Yeah, thank you. I'd say that your focus on financial regulation is really important because as we think about these guidance documents, it's useful to break the agencies down into rough groups. And what I mean is the financial regulators, the ones that have what we call supervisory power, especially over financial institutions, there the guidance issue becomes particularly acute because agencies are in a much more all-encompassing, much more nebulous regulatory posture with respect to the regulated entity, right? And the supervisory context, you have the regulators really inside of the companies and really having a place in a day to day business.


      Then there's all the other agencies. Although, even among other agency -- by the way, that's why I focused -- I've had so much interest in what the financial agencies have been doing and saying on these issues. I think they're a uniquely difficult case.


      Even among non-financial agencies, there's agencies that we need to care about that are dealing with industries where public trust and public reputation is particularly important. And here, I'm thinking primarily of food and drug regulation. And, I mean, really, food and drug, I say it's the most important one -- and even the financial context where it's not a supervisory posture but just day to day regulation, even there, the government's statements and comments and just enforcement actions can have such an immediate effect on the viability of the company's operations. And I think we have to be particularly careful about guidance documents in those contexts.


      It really comes back to a point that John raised and a point that Steven spoke to, and I speak to it myself, this question about the symmetry between enforcement and underenforcement, right? Guidance documents that impose burdens on the public and guidance documents that relax and maybe underenforce rules. I'd say in general theory, the law is pretty symmetrical on this. But for me, there is an asterisk there. There's this slight difference between overenforcement and underenforcement, right?


      Agencies have the power to underenforce in a way, right, through prosecutorial discretion for all the reasons the Supreme Court said in Heckler v. Chaney. Yes, sometimes agencies are bound by Congress to enforce to the maximum degree. And yes, agencies can't substitute case by case discretion with real policies of abdication.


      But short of that, there is at least this slight asymmetry between overenforcement and underenforcement. And I think that just reflects the fact that in our system of government, we're free until the government legislates a restriction on us. And so there isn't this perfect symmetry between the two scenarios, and I think we do need to largely treat them the same but always be aware of that subtle but important difference.


Dean Reuter:  John Walke, anything on this point?


John Walke:  I do want to speak to Adam's last point and then if it's a smooth transition, just speak ever so briefly to something Steven said earlier in Adam's opening remarks.


      So I just don't agree the asterisk should be there. Deregulation by guidance is not a Heckler enforcement issue. It's changing the rules of the game. It's abdicating responsibility to uphold the law, not through enforcement mechanisms but through how the law is implemented through rulemaking and regulatory powers, not through enforcement powers.


      And if the government abuses notice and comment and abuses appropriate interpretations of the statute or its own regulations through guidance documents, whether that's for regulatory or deregulatory purposes, it's just wrong. It's symmetrical.


      And speaking to a point Steven made, I just don't agree that agencies have authority to adopt exemptions through guidance. That can only be done through statutes or through regulations, and it can't even be done through regulation if not authorized by statute.


      In my 25-plus years as a practitioner, I'd say that I have seen equal parts regulatory and deregulatory guidance from EPA, and it depends overwhelmingly on the ideology of the administration in power. Overwhelmingly more deregulatory guidance documents under the Bush and Trump administration, more regulatory guidance documents under Obama and Clinton. And I don't that would surprise anyone on this call.


      And I guess the last point I wanted to make, just focusing on Adam's thoughtful principles for reform, his four principles for reform, I have to say that looking at EPA, those first three principles have really been in effect at EPA for a very long time. The agency has long published this guidance document that's long gone through public process and sought notice and comment for its guidance documents.


      The Trump Executive Order in October was a snoozer for me. It caused me to yawn because EPA has been doing many of those things, not all of them, not the rulemaking that was called for under the Executive Order. But it's been doing many of those for many years, and it hasn't diminished abuse of guidance documents one wit. If anything, I'd say that there's been a rapid acceleration of abuse of deregulatory guidance documents under the Trump administration as compared to the Bush administration.


      And the last point I would make is if I understand Adam correctly to suggest that there perhaps should be a safe harbor for guidance documents for regulated entities in order to put certain burdens on the agency, I have to say that the public interest groups like mine would object to that very strenuously. That's the problem that I'm decrying here, the ability in the real world for industry to rely upon guidance documents as a form of safe harbor in effect to fail to comply with regulations that no one knows anything about. But we know certainly they are doing so and then when instances crop up, it's extraordinarily hard, nearly impossible, to police.


      So I'll end my remarks there. Thank you.


Dean Reuter:  Any response from Steven Bradbury or Adam White there? If not, let me ask, is there consensus on the panelists that what can be done, what can be accomplished by guidance can be undone by guidance? Is that fair or not?


Adam White:  Well, Dean, this is Adam. In a way, we're going to see a test case for that coming up right now in a sense in the litigation surrounding the Trump administration's undoing of the Obama administration's DACA policy on immigration and arrivals. That case is obviously complicated and not entirely what we're talking about here, but there is this broader theme of one administration making significant changes in policy unilaterally and outside of notice and comment, let alone legislation.


      And then seeing things become more difficult to undo so quickly and unilaterally, Administrative law, for better, probably for worse, has some real first mover advantages for agencies that take the first move, set the initial record, lay the initial ground work, and create rights that sort of ripen through the passage of time that some would say change the posture of undoing what's already been done.


      But in general, I would say, and I'm curious to see what the others have to say, that yes, in general, what an agency does through guidance should be undone through guidance -- should be able to be undone through guidance, again, for the sake of the symmetry that we were referring to earlier.


Dean Reuter:  John Walke or Steven Bradbury on this?


John Walke:  I agree with that, both Adam's characterization of the law and the normative outcome. There was an old case in the D.C. Circuit called Paralyzed Veterans that required agencies to undertake notice and comment rulemaking to change prior interpretations, even if adopted by guidance. And I kind of like that case law, but then the Supreme Court overturned it.


      So I think Adam's absolutely correct that guidance can be reversed by guidance. And we haven't talked about this, but this emphasizes one of the big Achilles torsos of guidance document. They're not durable at all, and a future administration can come in and reverse them the first week, if they so choose. So there's a rubber band effect on industry and the public snapping back and forth.


      One might think that that would lead agencies to want to adopt rulemaking, but what we're in fact seeing is a rush in the opposite direction, at least by this Environmental Protection Agency because rulemakings are time consuming. They ensure review by courts, and you may not even manage to get them done in one administration.


      In fact, one of Steve's rules was just published in the Federal Register this morning to repeal the clean car standards that Trump even campaigned against. And we probably will not see the completion of the lawsuit challenging those standards by the end of this administration.


      So the incentives that Professor White referred to weigh in favor of agencies resorting to quick and dirty guidance documents but at a great cost to durability, certainty, and reliance on the rule of law.


Dean Reuter:  I think we might have lost Steve Bradbury for a moment, but I think we have him back now. Steve Bradbury, do you have anything you want to say by way of responding?  


Hon. Steven Bradbury:  I'll just say I agree with what's been said. I think there is increasing tendency for major rulemaking matters to be highly complicated. A lot of engineering and science will go in, for example, in our safe vehicles rule that John mentioned, and they can take a long time. And in many cases, that's very appropriate.


      We've modified our rulemaking procedures to ensure greater public participation, greater consideration of technical issues, and more ability to vet the underlying factual studies or data in which a rule is based, for example.


      So he's absolutely right that formal rulemaking or even informal rulemaking, as technically it is under the APA, can take a long time in many cases. And so there will be a greater pressure to use the expedient alternative of clarifying the policy of the agency or the agency's approach to the enforcement of an existing regulation through guidance.


      That's, again, not necessarily a bad thing. It can have very positive effects for the public and regulated entities provided it's done in a prudent way consistent with the kinds of principles I think we've set forth in our rules now and under the President's Executive Order.


And, again, I think those principles are non-partisan and not bias clearly one way or the other. Obviously, a deregulatory action can be a rulemaking. Law men recognized in the OIRA process that rules could be regulatory or deregulatory. And either way, if having a substantive effect, they go through the rulemaking process.


And to the extent that guidance documents are an alternative that's resorted to by agencies that can also have at least the practical effect of a substantive impact, they just need to be publicly accessible. They need to go through the proper review, and where appropriate, an opportunity for the public to weigh in. And just those simple reforms, I think, can have a very significant, positive effect.


And John will be free to -- John and others, will be free to criticize, as well anybody, any outside observer will be free to criticize the use of guidance one way or the other by the government going forward. I think that ability to criticize it and to highlight it and to expose it to public scrutiny will be improved and increased through the consistent use of these procedural reforms. Thanks.


Dean Reuter:  Thank you. We do have one caller with a question who's been waiting patiently. Let's check in with our caller. We've got about seven minutes left. Go right ahead, caller form area code 703.


Caller 2:  Hi. I had a question in terms of internally with when you have, obviously, career staff and a few political appointees, how does that work in this area, and isn't there a way -- in the internal discussions, particularly if the administration tends to be more in agreement with the career employees, do any of you have an idea how much are some of the concerns or questions about the guidance, whatever its nature, how thoroughly do they tend to be aired internally? Is there any kind of strong instinct to play devil's advocate internally? Or does that not really happen, do any of you know?


John Walke:  I was an agency counsel in a regulatory administration. And without disclosing any attorney-client confidences, which I can't do, the political clients would decide on a policy they wanted to adopt. They would explore whether it could or should be adopted through guidance or rulemakings.


      They would turn to the agency career staff to write the guidance document. They would turn to the agency attorneys to ensure that it had the features that the courts deemed to be non-binding guidance. And in effect, what that has amounted to through Democratic and Republican administrations is slapping on boilerplate that I alluded to in reading from an article during my opening. And what has changed is to the degree to which the courts accept that boilerplate.


      There was a long line of cases, one of which I lost, in the late ‘90s that said that boilerplate was something the courts wouldn't even tend to look at much and would look past. But now, the courts have taken a much dimmer view of reviewing guidance documents. They've got a string of those adverse decisions that I referred to earlier. And so I think agencies will feel emboldened to resort to guidance documents, including in future regulatory administrations when their political parties turn.


Hon. Steven Bradbury:  This is Steve. Let me just say of DOT, I think as John pointed out, sometimes the political leadership in a department will be very personally involved in a guidance document if it's got a high profile -- if it's high profile in nature, addresses some important priority, raises some novel issue, etc.


But more often, guidance documents have been generated by staff down in the agency and are driven in large part by the need for administrative convenience or the need to address demands or responses for requests for information or understanding from the regulated community industry, others outside. And so there becomes a habit that agencies fall into in relying on the ease of using guidance documents.


      I will say that the reforms we've put in place for the review and clearance of guidance was a real process of deliberation and education throughout the different operating administrations of our department and really did represent a very meaningful change in the approach to the promulgation of guidance documents.


      But I will say that the staff of the department has really embraced these reforms and the new approach. I just think it really makes a very profound difference in just the basically the day to day operation of a big regulatory department like ours.


      But getting to that point did involve a lot of discussion and deliberation. And important to that was recognizing categories of documents that different operating administrations and offices of our department have relied on and need to issue, mostly to respond to time-sensitive safety matters but certain other categories as well. And getting those categories recognized as appropriate exceptions to certain requirements for high-level review and inter-agency clearance and public notice and comment.


And generating that list of exceptions and identifying those to address and meet the needs of our department did involve discussions with OIRA and OMB so that it was done in a formal way, and I just think that's a very healthy process. And so I think it should have durable institutional benefits for the long term, but that's just a little window into our experience at DOT. Thank you.


Dean Reuter:  Thank you. I want to give each of our guests -- we've got about a minute left, 30 seconds to wrap up and express a final thought. As you're doing that, Adam White, I think in his remarks hinted at something our Regulatory Transparency Project has been looking at and that's government coercion, the idea that government might be able to extract more from the regulated community than their enabling legislation or reauthorization statutes allow.


      My question is given the informal nature of some guidance regimes, is that more likely to happen in guidance than it is notice and comment with public rulemaking where people are encouraging the agency to stay in its own lane and may be helpful with creative thinking, or is it not more likely? And is that proven out in the courts?


      Steven Bradbury, on that question or anything else, you want to say in the last 30 seconds.


Hon. Steven Bradbury:  Well, thanks, Dean. I think I've said pretty much my piece. I'll probably turn it over to Adam and John to finish out. Thanks.


Dean Reuter:  Fair enough. John Walke, final thought.


John Walke:  My final thought is simply that government coercion and government abdication of responsibilities to the public are both abusive and problematic. It's easy to understand why regulated entities are concerned more about the former form of government abuse, the coercion, but the public can be similarly disserved by the government through its failure to implement and uphold the law through the abdication of this responsibilities. And the courts really should and must be there to police both on behalf of Americans. Thank you.


Dean Reuter:  Thank you. Adam White, you get the final word here.


Adam White:  Well, thanks. I'll just say briefly that yes, Dean, the points you raise about the risk of coercion, that's probably always greater risk in that the guidance and also the supervisory context just because it is more nebulous and a little bit below the sight line. So that's right.


      My last point will just be to largely agree with John, actually, because I don't want to overstate this point about the asymmetry between overenforcement and underenforcement. Ultimately, the things that we're talking about are process, structure, transparency, and that is important in both directions.


      All I was saying was that cases like Heckler v. Chaney do remind us there's this little -- you'll never get 100 percent enforcement, and courts defer to prosecutorial discretion in some ways. The one thing prosecutors don't have discretion to do is to prosecute beyond the limits of law. But other than that -- and I didn't take John to be saying anything different than that. And I do agree with him that in the end, this is about neutral process, and it's not about substantive outcomes.


Dean Reuter:  Well, thank you very much, all three. Thank you on behalf of myself, personally, and on behalf of The Federalist Society for joining us for this teleforum and for Executive Branch Review Week. But until the next call, we are adjourned. Thank you very much, everyone.




Dean Reuter:  Thank you for listening to this episode of Teleforum, a podcast of The Federalist Society’s practice groups. For more information about The Federalist Society, the practice groups, and to become a Federalist Society member, please visit our website at fedsoc.org.