Initiating Rulemaking: An Overview

How and Why Do Agencies Start the Rulemaking Process?

Before we start learning about the steps of the informal rulemaking procedure (APA section 553), we will learn about how agencies decide to promulgate a rule. The word “promulgate” means to formally proclaim or declare that a new law is in effect after its final approval. In the administrative law context, “promulgate” refers to the process of enacting administrative final rules (making regulations). A regulation is “promulgated” when the final rule is published in the Federal Register at the conclusion of the rulemaking process. 

While APA section 553 describes how agencies must make a rule from notice, comment, and the publication of the final rule, the rulemaking process really begins long before notice of a proposed rule is published in the Federal Register, when the agency begins to consider whether to propose the rule in the first place. Agencies do not simply decide, internally, what to regulate and how to regulate it. The decisionmaking processes that agencies undertake to decide what rules to make involves a lot of outside influence. As public interest advocates, you will be pushing for progressive regulatory reform amidst other stakeholders also advancing their initiatives. For instance, if you are pushing for safe food regulations, your concerns will be weighed against food corporations’ lobbying, and if you are an environmental advocate asking for clean air regulations, you will be fighting to have your voice heard against energy companies and other industrial groups interested in less air regulation. Here are some tips for participating in agency rulemaking from an ex-agency official:

Initiating Agency Action Colloquium

_{5 Admin. L. J. of Am. U. 24 (1991)}

_{Comments of Patricia Bailey (Commissioner of the Federal Trade Commission from 1979-1988)}

[…] The first thing to do is to think about what you're trying to do. Agency actions are taken pursuant to statutes and regulations on congressional oversight indictments. And in that respect, they are making legal decisions. But that is the only respect in which you can call a lotof these decisions legal, while regulations and statutes are at the foundation of agency action, decisions that are being made are what government should do, not really so much what the government is compelled to do by the statute. And so you have to remember, I think, when you go forward to do battle with the government agency, that an agency is not a courtroom. [… People who work in agencies are] making policy decisions.

Getting the agency to act in a certain way requires certain policy advocacy skills. And in no particular order, I would say that those skills are an ability to understand the agency's problem, to have a fairly firm grip on the legislative process, the ability to deal with the political environment that the agency finds itself in, and an understanding of basic policy analysis tools that most all agencies use. The final skill would be, of course, to know when none of these other skills would work, and to know what to do then.

Let me elaborate a little bit. Let's say that you are dealing with an agency where a decision is going to be made and a proposal has already been made about it. I think that there is no need to come whining to the agency that some policy or decision that they make is going to harm your client or harm consumers or do harm to someone. Because almost any decision that an agency makes is going to harm someone. Allegation without more does not surprise them and does not cause them to change course.

You have to know what the agency's mission is, what its purpose is, what its causes are. And that may enable you to argue that whatever action it is that they are proposing to take will damage their own interests. This is often a good tactic to take, because, hopefully, you can get them to see that whatever it is you want them to do is in their own best interests, based on your understanding of what they have been told to do and what they are trying to do. And at the same time, don't ever try to conceal your own self-interest, because your reasons from the outside are inherently suspect.

If you understand an agency's position, you may discover that what is primary for the agency is really secondary or even unimportant to you. But what may be crucial to you is only secondary for the agency. If you can look at it that way, you may be able to get something that is very important to you eliminated or added, whatever your interest is, in a way that will enable the agency to deal with the problem without compromising its own cause. A 100% win is not attainable. It is probably a waste of money to pursue, and unwise in the end.

Now, understanding the bearcutter process is important because it is very easy to stumble in at the wrong place and to make the wrong arguments to the wrong people, and to get sort of hopelessly bogged down. The government decisionmaking process sometimes seems vulnerable, whereas it's only fragmented. So, if you get an organization chart, that is the beginning of wisdom. It doesn't help a lot, but it gives you at least some idea. Wherever you go there are going to be technical experts and economists and lawyers and planners and program generalists and a whole category of other people. As the input of people in these divisions begins to rise up the decision ladder, the proposed action will receive less and less in-depth review.

Now, regardless of how serious and significant the issue may be, the decision reached will be based largely on the material generated at the staff level by the staff. To be most effective, input of data and arguments from outsiders must be made at that level. It will make less and less of an impact as a matter for decision moves up the chain. I cannot tell you the number of people I know who want to come in and talk to the Secretary of Commerce about a matter that somebody has said in the regulatory agenda he's going to make a decision on this week. The problem, however, is that it is too late, it is just too late to do that, unless you have certain kinds of issues which I will mention in a minute. You need to sort out who you're talking to. I watch with amazement as lawyers make insistent legal arguments to economists… “… our keen legal arguments do not interest them.”

[…] You have to educate yourselves about the agency's normal procedures. And all government agencies have the same kind of modus operandi. They have these lengthy in-depth analyses by the stack, but somewhere—and you should find out where—somebody is responsible for making an overall synthesis of these arguments so that it tells a story that makes sense to somebody. And then there's going to be a summary at the top for the people at the highest levels of the decision chain. So you should prepare your papers in the same format.

Understand that once the papers leave the staff unit, the decisions made in that unit will not be reversed. The lawyers are not going to reverse anything that the economists have written. And that's true all across this spectrum. In the end, the arguments of the unit may be rejected, but they're not going to be reversed by anyone. So you have to get in on the ground floor. You cannot risk missing out at that level. […]

[Do] not gratuitously insult the staff of an agency. What will happen is that most likely the agency will close ranks against you, freeze you out. That is going to be true even if you have a pretty good case or an argument. I have seen it happen a lot. I call it the "New York lawyers' syndrome." It is sort of, you know, "These people are really not very bright. They're not very something." They have an animosity toward my client, born surely of their ignorance. And it could as well be called "the Chicago's economist syndrome" or "the cumulus single-minded public advocate approach." There is a way not to deal with these things. In court you can go in and make light of somebody else's argument. But to try that in an agency; you're on your way out.

Now I would say, try to understand the political environment that the agency is involved in. Don't talk about unelected bureaucrats with arbitrary unchecked power; that is not how it seems to them. With OMB (the Office of Management and Budget) on one shoulder and the White House on another and congressional oversight investigative appropriations committees, agency constituents-whomever they may be—labor, agriculture, business, and the media. The […] media is always there, disclosing things, commenting on things, criticizing them and subjecting them to ridicule. It doesn't seem to [the agencies] like they have unchecked power. So you should keep in mind when you're urging an agency to take a certain kind of action how it is going to appear to the significant others that surround that agency. Because that is the way that agency will be looking at it.

I would also say that if your views are an anathema to some of those people that you are trying to persuade, if you represent Exxon and you're trying to deal with the EPA on oil spill regulation or something, what you might try to do is to form a coalition and get someone else to make your argument. I think that would be the best thing. Agencies like to reach consensus decisions so that everyone gets something and nobody with a really legitimate concern is left somewhere out in the streets screaming as loud as they can on the way to Capitol Hill or to the Washington Post. So they probably will give you a little bit. You know, something to get you on board-to be able to do your job to find out how much you can give them to reach their policy goals and how little you will have to give to reach these objectives. […]

It is helpful if you know the rudiments of policy analysis-cost/benefit analysis, risk assessment, knowledge of market forces and all that stuff. All agencies talk a lot about that now. And actually these are useful tools. But, don't try to play games. Don't come in and say, “Well, you know, this is cost/benefit and we're going to pay all of the costs so we want all of the benefits to go here.” If you do that without any sort of analysis, you're not going to help yourselves, because agencies increasingly have more sophisticated means of doing these things. And that is what you are up against. […]

I only offer one caution about the Congress that became very obvious in the last few years. One thing the Congress can do is to get an agency not to do something, because they can always threaten to shut off the money. For a particular project, we had to stop working on a few over at the FTC three times because the money was cut off. […] So the limits of congressional pressure really come from that side. In sum, it is much easier to stop something than to start it.

Petitions for Rulemaking

Like industries and interest groups that lobby members of Congress, agency lobbyists have become experts at getting involved in agency rulemaking, integrating themselves into agencies’ decisionmaking processes. It has been said that rulemaking is now a “blood sport” where regulated industries spend millions of dollars to influence agency actors and exert political pressure on agencies. One way that public interest advocates can counter industry lobbyists is to petition agencies to begin the rulemaking processes. Enabling statutes often require agencies to protect public health, safety, and interests. APA section 553(e) says that “[e]ach agency shall give an interested person the right to petition for issuance, amendment, or repeal of a rule.”

While the APA doesn’t give us any procedural requirements for petitioning for rulemaking, agencies are not allowed to ignore petitions for rulemaking. APA section 555(e), requires agencies to provide “prompt notice” of a denial of a “written application, petition, or other request of an interested person made in connection with any proceeding.” This notice of denial must be “accompanied by a brief statement of the grounds for denial.” 

Filing a petition for rulemaking is a way to force agencies to take action when they have not done so on their own. If an agency starts the rulemaking you petition for, you have successfully pushed the agency to act. If the agency does not start the rulemaking process or does not deny the petition and accompany the denial with its rationale for denying the request within a reasonable amount of time, the petitioner can seek judicial review under the APA section 702. APA section 702 says that a person suffering a legal wrong because of “agency action” has the right to seek judicial review, and APA section 551(13) defines “agency action” to include an agency’s “failure to act.” Finally, APA section 706(1) says that courts can “compel agency action unlawfully withheld and unreasonably delayed.” So, according to the APA, an agency’s failure to act is considered an “agency action” within the permissible scope of judicial review.

It is hard for courts to review agency inaction because, when an agency hasn’t done anything, there is no substantive agency record for a court to review. Without an agency decision, courts have little to work with, substance-wise, to determine whether the agency has done anything wrong. An agency will usually claim that it hasn’t responded to a petition for rulemaking because it hasn’t had the time or resources to begin the rulemaking process. Agencies get a lot of leeway in deciding how to prioritize their various initiatives and responsibilities, and courts tend to give agencies a lot of deference, or “the benefit of the doubt” when agencies make those choices. 

So, when there isn’t an agency record for the court to review, how can a court decide whether the agency’s decisionmaking process is acceptable? The court is not in the position to know about all of the agency’s priorities or make informed determination about how much time and resources the various priorities require. Federal courts have adopted a list of factors (the TRAC factors) to consider as they decide whether an agency’s delay is permissible.