Checks and Balances: Department of Justice proposes modernization of Administrative Procedure Act

By

Caitlin Styrsky
The Checks and Balances Letter delivers news and information from Ballotpedia’s Administrative State Project, including pivotal actions at the federal and state levels related to the separation of powers, due process and the rule of law.

This edition:In this month’s edition of Checks and Balances, we review a legal challenge to 2020 census changes; a proposal from the U.S. Department of Justice (DOJ) to modernize the federal Administrative Procedure Act (APA); and agency rulemakings from the U.S. Department of Labor (DOL) and the DOJ that seek to limit the use of guidance documents.

At the state level, we examine a concurring opinion from a Pennsylvania Supreme Court justice expressing misgivings about judicial deference as well as procedural challenges to coronavirus response efforts.

We also highlight new scholarship proposing that internal administrative law changes, rather than judicial action, can narrow applications of Chevron deference as well as new findings from Ballotpedia’s survey of all 50 state constitutions and administrative procedure acts examining whether state administrative agencies can choose whether to follow formal adjudication procedures. As always, we wrap up with our Regulatory Tally, which features information about the 176 proposed rules and 267 final rules added to the Federal Register in August and OIRA’s regulatory review activity.

In Washington

Census changes face challenge 

  • What’s the story? A three-judge panel of the United States District Court for the Southern District of New York on September 10 blocked a Trump administration effort to exclude people who reside in the United States without legal permission from the census numbers used to allocate congressional representation. 20 states joined with cities and counties to file a lawsuit on July 24 arguing that the July 21 presidential memorandum “Excluding Illegal Aliens From the Apportionment Base Following the 2020 Census” violates the U.S. Constitution’s mandate to count “the whole number of persons in each State.” California Attorney General Xavier Becerra (D) filed a similar lawsuit in the United States District Court for the Northern District of California on July 28, arguing that the memo also violates separation of powers principles and the Administrative Procedure Act (APA).
  • The U.S. Constitution requires the enumeration of all persons in each State. Congress delegates authority to the U.S. Department of Commerce (DOC) to carry out the census and determine which persons qualify as inhabitants for the purposes of congressional apportionment.
  • The Trump administration argues that the DOC in prior censuses has interpreted its delegated authority to exclude persons residing in the country without lawful permission. The memorandum states that excluding “illegal aliens from the apportionment base is more consonant with the principles of representative democracy underpinning our system of Government.”
  • Judges Richard C. Wesley, Peter W. Hall, and Jesse M. Furman held in a per curiam opinion that the Trump administration memorandum violates statutory requirements mandating that apportionment must be drawn from the number of residents living in each district, regardless of their legal status. The president’s supervisory authority of agency heads allow him to retain “some discretion in the conduct of the decennial census and resulting apportionment calculation,” wrote the judges in a per curiam opinion. “Nevertheless, where the authority of the President (or other members of the Executive Branch) to act is derived from statutes passed by Congress, the President must act in accordance with, and within the boundaries of, the authority that Congress has granted.”
  • The Trump administration will likely appeal the decision to the U.S. Supreme Court. The California lawsuit was still pending as of September 11, 2020.
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DOJ urges Congress to modernize administrative procedures

  • What’s the story? The U.S. Department of Justice (DOJ) on August 11 released a report recommending that Congress update and improve the 1946 Administrative Procedure Act (APA). The DOJ argued that the APA framework fails to sufficiently manage modern regulation and falls short of promoting agency accountability, transparency, and public engagement.
  • Deputy Attorney General Jeff Rosen told Reuters that the agency wants to work with Congress to revise the APA because the legislation “no longer reflects how the regulatory process actually works.”
  • The report, entitled “Modernizing the Administrative Procedure Act,” is based on proposals presented by regulatory professionals during the DOJ’s December 2019 summit on APA modernization. The report examines the development of administrative agencies over the 74 years since the passage of the APA, recommends legislative action to improve the APA, and considers takeaways from the Trump administration’s regulatory approach that could contribute to APA modernization, according to the DOJ.
  • Prior to 1946, no federal laws governed the general conduct of administrative agencies. The APA established uniform rulemaking procedures for federal agencies to propose and issue regulations, put forth procedures for issuing policy statements and licenses, and provide for judicial review of agency adjudications and other final decisions. The legislation remains largely unchanged today.
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Agencies move to rein in guidance practices

  • What’s the story? The U.S. Department of Labor (DOL) and the U.S. Department of Justice (R) issued recent rulemakings aimed at implementing President Trump’s (R) Executive Order 13891, which aims to prohibit federal administrative agencies from issuing binding rules through guidance documents. Agencies were required to comply with the order’s directives by June 27, 2020, but some agencies received extensions.
  • Noting that “the public often treats guidance from agencies as binding, even if it technically is not”, the final rule from the DOL, published on August 28, creates a searchable database of all agency guidance documents; requires that significant guidance documents (those with an economic impact of $100 million or more, among other factors) undergo a notice-and-comment review process prior to implementation; and allows the public to petition the DOL to amend or withdraw guidance documents.
  • The interim final rule from the DOJ, released on August 26, prohibits the agency from using guidance documents as substitutes for regulations; limits the agency’s ability to use guidance documents in civil and criminal enforcement actions; requires a notice-and-comment review process for significant guidance documents as well as approval by an agency official appointed by the president; mandates that all agency guidance documents be made available in a searchable database; and allows the public to petition the DOL to amend or withdraw guidance documents.
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In the states

Pennsylvania Supreme Court justice expresses misgivings about judicial deference

  • What’s the story? Pennsylvania Supreme Court Justice David N. Wecht on July 21 issued a concurring opinion in Crown Castle NG East LLC and Pennsylvania-CLE LLC v. Pennsylvania Public Utility Commission expressing what he called “deep and broad misgivings” about the court’s practice of deferring to state agency interpretations of statutes and regulations.
  • The case challenged the Pennsylvania Public Utility Commission’s (PUC) interpretation of a statute governing public utilities. The PUC argued that the court should defer to its statutory interpretation because of the subject matter’s highly technical nature. The court, however, refused to defer to the PUC’s interpretation because it found the statute in question to be clear and unambiguous.
  •  “A court does not defer to an administrative agency’s interpretation of the plain meaning of an unambiguous statute because statutory interpretation is a question of law for the court,” wrote Justice Sallie Updike Mundy in the opinion.
  • In a concurring opinion, Justice Wecht expressed uncertainty about the court’s deference practices. Wecht pointed to the lack of clarity surrounding the court’s approach to deference, arguing that the court’s deference doctrines aren’t clearly distinguishable and have been, in their words, “thrown together over time.”
  • Ballotpedia tracks state approaches to judicial deference as part of The Administrative State Project. Since 2008, Wisconsin, Florida, Mississippi, Arizona, and Michigan have taken executive, judicial, or legislative action to limit or prohibit judicial deference to state agencies.
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Coronavirus emergency powers challenged on procedural grounds to mixed results in state lawsuits 

  • What’s the story? The following lawsuits claim that state responses to the coronavirus pandemic in Arkansas and Alabama violated the Administrative Procedure Acts (APA) in their respective states:
    • Arkansas: A group of Republican lawmakers on September 3 filed suit against Arkansas Department of Health Director Dr. Jose claiming that the agency’s coronavirus-related health directives violated the state APA by not first receiving legislative approval. Moreover, the lawsuit claims that Gov. Asa Hutchinson’s (R) emergency declaration—first issued in March and since extended—violates the state APA, which mandates that emergency rules may not be effective for more than 120 days and that successive emergency rules may not be adopted earlier than 30 days after the expiration of the previous rule. Hutchison disagreed with the lawsuit, arguing that the legislative review of emergency rules would delay the state’s public health response.
    • Alabama: An Alabama judge on August 11 dismissed a procedural challenge to Governor Kay Ivey’s (R) authority to issue a mask mandate, but failed to provide an explanation for his reasoning. The plaintiffs alleged that the Alabama Board of Health failed to meet statutory notice and administrative review requirements prior to the issuance of the mask mandate in violation of the state APA. In their motion to dismiss, state officials argued that Ivey incorporated the order into a gubernatorial proclamation under her own authority, granted by the Emergency Management Act. Montgomery County Circuit Court Judge Greg Griffin dismissed the case without comment. The plaintiffs plan to appeal the decision.
  • Ballotpedia provides the text of all 50 state APAs as part of The Administrative State Project. Click here for complete coverage.

Narrowing Chevron Deference through Administrative Law

New scholarship from law professor Christopher Walker argues that Chevron deference can be narrowed through internal changes to administrative law processes rather than judicial action. Walker focuses on the use of Chevron deference in the context of immigration policy, arguing that the application of Chevron to immigration questions is inappropriate since immigration policies are most often formulated through adjudication rather than rulemaking. Walker proposes that federal regulators should shift the formulation of immigration policy from adjudication to rulemaking in order to shore up Chevron’s theoretical foundations of agency expertise, deliberation, and political accountability.

“Indeed, on closer examination, the theoretical foundations for Chevron deference crumble in the immigration adjudication context. Chevron’s core rationale for congressional delegation and judicial deference—agency expertise—is particularly weak when it comes to immigration adjudication. Unlike in other regulatory contexts, the statutory ambiguities immigration adjudicators address seldom implicate scientific or other technical expertise. The second leading and related rationale— deliberative process—is even weaker here than in other adjudicative contexts. After all, immigration adjudication is on the fringe of the ‘new world of agency adjudication.’ It is not formal adjudication under the Administrative Procedure Act (APA), lacking many of the signature procedural protections afforded in APA-governed formal adjudication. The third central rationale—political accountability—may at first blush seem compelling in immigration adjudication, due to the Attorney General’s final decision-making authority. Building on Hickman and Nielson’s framing, however, we argue that agency-head review is necessary yet insufficient for Chevron’s accountability theory. The theory should encompass a robust public engagement component, with public notice and an opportunity to be heard for those—beyond the parties in the adjudication itself—who would be affected by the agency’s statutory interpretation. Agency adjudication seldom provides that, and perhaps even less so when it comes to immigration adjudication.”

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Ballotpedia study shows that 46 states allow administrative agencies to choose whether to follow formal adjudication procedures

A Ballotpedia survey of all 50 state constitutions and administrative procedure acts (APAs) concluded that 46 state constitutions or APAs allow administrative agencies to choose whether to follow formal adjudication procedures in administrative hearings as of August 2020.

  • Forty-six states allow administrative agencies to choose whether to go through formal adjudication or use informal procedures
  • Four states, Colorado, Montana, Ohio, and Pennsylvania, sometimes require agencies to use formal adjudication to resolve cases
  • No states require agencies to follow formal adjudication procedures in all cases

Ballotpedia examined provisions permitting state agencies to use informal adjudication here.

Regulatory tally

Federal Register

Office of Information and Regulatory Affairs (OIRA)

OIRA’s recent regulatory review activity includes:

  • Review of 64 significant regulatory actions. Between 2009-2016, the Obama administration reviewed an average of 53 significant regulatory actions each August.
  • Eight rules approved without changes; recommended changes to 51 proposed rules; five rules withdrawn.
  • As of September 2, 2020, OIRA’s website listed 120 regulatory actions under review.
  • Want to go deeper? 
  • Every month, Ballotpedia compiles information about regulatory reviews conducted by OIRA. To view this project, visit: Completed OIRA review of federal administrative agency rules

This Checks and Balances newsletter is part of Ballotpedia’s Administrative State Project, a nonpartisan encyclopedic resource that also features the latest data on federal regulatory activity, including a rolling page count of the Federal Register and the volume of rulemaking.

You can view an index of these pages here. View the pages and you will come away knowing the difference between the administrative state, the regulatory state, and the dark state—and so much more. New entries to our encyclopedia are added weekly.