LegiStorm

Summary:

Agencies frequently use guidance documents to set regulatory policy. While “legislative rules” carry the force of law and are required to undergo the notice and comment procedures of the Administrative Procedure Act (APA), guidance documents are exempt from these constraints and can be issued more swiftly than legislative rules. The issuance of such guidance documents, however, has not escaped criticism. Some have argued that agencies use guidance documents to effectively change the law or expand the scope of their delegated regulatory authorities. This report focuses on agency use and judicial review of one type of guidance document: general statements of policy. Judicial review of challenges to agency policy statements often turns on whether the agency document is actually a legislative rule. Pursuant to congressionally delegated authority, agencies promulgate legislative rules that carry the force and effect of law. General statements of policy are not legally binding; rather, they are issued in order to advise the public about the manner in which the agency intends to exercise its discretionary authority. While these analytical categories might seem relatively clear, distinguishing between the two in practice can be difficult. Courts often frame the inquiry as to whether the agency has established a binding norm on the public or itself, although a variety of heuristics are applied, ranging from a somewhat formalistic analysis of relevant legal consequences to a more functional focus on a statement’s practical effects. In addition, the question of whether a given agency document is properly identified as a legislative rule or policy statement has a significant impact on a federal court’s willingness to engage in judicial review of the agency action. Unlike legislative rules, which may be immediately reviewable once they are finalized, policy statements often cannot be challenged until the agency takes further action to implement or enforce the policy. The Supreme Court, however, has provided only limited guidance in determining whether and when policy statements are reviewable, and as a result, lower courts have not adopted a uniform approach to the reviewability question. In light of the difficulty in distinguishing between legislative rules and policy statements, questions have been raised concerning whether some judicial tests to make this determination are consistent with Supreme Court doctrine. The Court has made clear that the judiciary may not impose procedural requirements on agencies beyond the text of the APA. The applicable legal test governing agency use of policy statements, whether imposed by courts or Congress, has important implications for the executive branch and the public. One approach might grant agencies flexibility to issue policy statements in order to increase public knowledge of agency priorities, but risks permitting agencies to effectively bind the public without going through notice and comment procedures. An alternative might be to require heightened procedures when agencies issue policy statements, but this approach risks less overall notice to the public about agency intentions. Finally, although the relevant Supreme Court tests do not entirely preclude federal courts from deferring to an agency’s statutory interpretation contained in statements of policy, such documents usually do not receive Chevron deference. The weight that a reviewing court is willing to give to an agency’s interpretation of the law is an important aspect of judicial review. Indeed, the level of deference accorded to an agency interpretation can sometimes determine the outcome of a challenge to agency action. Interpretations reached through formal processes that have the force and effect of law are most likely to qualify for Chevron deference. In contrast, interpretations reached through informal processes, and which are neither binding nor precedential, are unlikely to be eligible for Chevron deference.