This article was authored by Blake Emerson, Assistant Professor of Law at UCLA School of Law, and Ronald M. Levin, William R. Orthwein Distinguished Professor of Law at Washington University in St. Louis.
This article first appeared in the Regulatory Review's series on "Prioritizing Accessibility and Clarity in Agency Actions" that focuses on the ACUS Recommendations adopted at the June 2018 Plenary Session. Reposted with permission. The original may be found here, and the Regulatory Review's entire series may be found here.
At its June 2019 plenary session, the Administrative Conference of the United States (ACUS) adopted Recommendation 2019-1, “Agency Guidance Through Interpretive Rules.” The recommendation offers key suggestions for agency practices to bring treatment of interpretive rules into close alignment with an earlier recommendation on agency policy statements.
The Administrative Procedure Act (APA) exempts both “general statements of policy” and “interpretative rules” from its rulemaking requirements, including notice and comment. The exemption greatly enhances agencies’ ability to interpret and enforce the law by using such “guidance documents,” as they are collectively known.
Judges, agency officials, and scholars have long puzzled over the scope of this guidance exemption and over how agencies may properly use such documents. On the one hand, guidance operates as a crucial form of internal administrative law, enabling agencies to communicate their understanding of statutory and regulatory requirements to the public and ensure that those requirements are uniformly enforced by agency officials. On the other hand, guidance is not supposed to have the force of law. When agencies treat guidance documents as though they have the same binding force as legislative regulations, the effect may be to undermine the procedural protections established in the APA.
Administrative law has thus sought to develop approaches to guidance that recognize its advantages for predictability and consistency but do not deprive affected parties of opportunities to challenge an agency’s policies and interpretations. Without attempting to pronounce on legal requirements concerning guidance, ACUS has in the past several years set forth best practice recommendations that seek to promote efficiency, fairness, and public involvement in agencies’ formulation and use of such documents.
After a comprehensive 2017 study by Professor Nicholas R. Parrillo of Yale Law School, ACUS adopted Recommendation 2017-5, which provided that agencies should not treat policy statements as “binding on the public.” It also contained advice about solicitation of public comment and procedures by which private parties could contest the guidance. But that recommendation explicitly excluded interpretive rules from its coverage, largely because the underlying report had focused on policy statements. In the background was the view held by some officials and commentators that a policy statement may not be “binding,” but an interpretive rule sometimes can be.
ACUS subsequently commissioned us to prepare a study to examine the extent to which the best practices outlined in the recommendation on policy statements ought to apply to interpretive rules as well. We interviewed officials from eleven federal agencies.
The interviews revealed a wide range of agency practices and understandings concerning interpretive rules. Some officials distinguished sharply between interpretive rules and general statements of policy, but others thought of the two as essentially equivalent. Moreover, many agencies provided for some form of public comment on interpretive rules—some used procedures that were functionally identical to notice and comment, while others simply accepted feedback after publication, without providing a response.
The interviewees held differing views on whether, and in what sense, an interpretive rule could be “binding.” Officials at several agencies said that when their interpretive rules construe mandatory language in a statute or regulation, the rules may also use mandatory language. Some officials said that they do not rely on an interpretive rule to preclude case-by-case deviation from a legislative rule’s terms. Others reported, however, that their agencies would require agency staff to adhere to an interpretive rule’s terms so long as the document remained in effect. But none maintained that they would refuse to entertain any public objections to a guidance document simply because it was interpretive.
On the basis of these interviews and other analysis contained in our report, ACUS adopted a recommendation that takes the same basic approach to interpretive rules that the 2017 recommendation had endorsed for policy statements.
Like the earlier statement, this year’s recommendation states that agencies should give members of the public a “fair opportunity” to contest interpretive rules with which they disagree. It also tracks the prior recommendation by providing that “it is sometimes appropriate for an agency, as an internal agency management matter, to direct some of its employees to act in conformity with an interpretive rule,” so long as other officials at a “higher level” are authorized to depart from it.
The 2017 recommendation also set forth several factors for agencies to consider when assessing whether to solicit public participation in the formulation, modification, or rescission of policy statements. This year’s recommendation applies most of that framework to agencies’ decisions on interpretive rules. The framework includes consideration of whether such participation will generate “useful information” and whether a “likely increase” in public “acceptance” of the rule would result.
On one important issue of terminology, the new recommendation on interpretive rules does diverge from the earlier recommendation on policy statements. The previous recommendation provided that “an agency should not use a policy statement to create a standard binding on the public.” The underlying point was that an agency should provide interested persons with a fair opportunity to seek rescission, modification, or waiver of a policy statement. This year’s recommendation agrees with that basic message as applied to interpretive rules, but does so without relying on the word “binding.” As the preamble to the recommendation explains, that usage tends to obscure the distinction between the best-practice issue and the question of an interpretive rule’s status under the APA.
Although there are strong arguments that an interpretive rule cannot qualify for the rulemaking exemption unless the agency allows it to be contested at the administrative level, ACUS chose to remain neutral on that controversial issue. The question of whether an interpretive rule can be “binding” has also been raised in connection with the issue of what level of judicial deference it should elicit. As the fractured opinions in Kisor v. Wilkie recently illustrated, that deference issue remains up for grabs, even on the U.S. Supreme Court. ACUS achieved consensus by omitting the word “binding” from the operative provisions of this year’s recommendation and using less ambiguous terminology to reaffirm the 2017 recommendation’s basic message.
In one limited respect, the new recommendation does depart substantively from the prior recommendation, which provided that agencies should “afford members of the public a fair opportunity to argue for lawful approaches other than those put forward by a policy statement.” This year’s recommendation states that agencies should display similar flexibility with regard to some interpretive rules, but not when the agency’s interpretation of a statute or rule purports to be exhaustive, thus precluding the possibility that members of the public could lawfully depart from its strictures.
In short, the new recommendation develops an approach to interpretive rules that, for the most part, recognizes their close kinship with policy statements. The extensive overlap between the two ACUS recommendations is a virtue, because it means that an agency will be able, in most situations, to adhere to ACUS’s advice without having to pause to decide whether a given guidance document is a policy statement, an interpretive rule, or a hybrid of the two.