A distinct lack of transparency emerges in federal regulatory activity

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Major regulatory changes and new rules — which one agency or another deal with almost daily — require that affected parties be notified. But a notice in the Federal Register is not enough, and agencies need to do more or they risk losing in court. That’s according to a recently completed analysis done on behalf of the...

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Best listening experience is on Chrome, Firefox or Safari. Subscribe to Federal Drive’s daily audio interviews on Apple Podcasts or PodcastOne.

Major regulatory changes and new rules — which one agency or another deal with almost daily — require that affected parties be notified. But a notice in the Federal Register is not enough, and agencies need to do more or they risk losing in court. That’s according to a recently completed analysis done on behalf of the Administrative Conference of the United States. To find out the details, the Federal Drive with Tom Temin spoke with study co-authors E. Donald Elliot, a professor at Yale Law School and Josh Galperin, a law professor at Pace University.

Tom Temin: Well, let’s begin with the statutory requirement to publish changes, major changes in regulations or new rules or new regulations in the Federal Register. That is all that’s required? But it’s not enough? Tell us what it is you discovered here, Professor Elliot.

E. Donald Elliott: Well, in the 1930s, Congress enacted a law called the Federal Register Act that required agencies to publish certain documents in a federal newspaper, the predominant technology at the time. And what we found is that as we’ve moved into the internet age agencies haven’t really kept up with technology, they do a pretty good job of publishing notices of proposed rules and final rules in the Federal Register, which is what’s required under the 1946 Administrative Procedure Act. But today, about 80% of the laws that we have to abide by at the risk of being sued by the government are not in formal regulations that are published in the Federal Register, they’re in what are called guidance documents. And those are not necessarily made available. Luckily, there is a constitutional overlay in the background. And that is based on a Supreme Court case, which held that notice by publication in a newspaper is not always sufficient if there are easier ways to be in communication. And that was a case where a trust company had actually been communicating with someone with postal mail. And when it came around to an important change in the trust, they just published in the newspaper and the Supreme Court held that was not sufficient. There are already some lower court cases that say that same principle is applicable to agencies. And one of the things we found in the study is that publication in the Federal Register, in this newspaper that runs between 70 and 90,000 pages a year works fine for big companies that can hire former agency people and consultants to read this newspaper every day. But it really doesn’t work for ordinary citizens or smaller groups of citizens or environmental groups. So there’s a real unfairness effect here if agencies don’t use some of the modern technology, like listservs, or email or posting it on their websites, which are surely a much more democratic way of dealing with things.

Tom Temin: So it sounds like they haven’t kept up technologically with what’s out there. Because people, industries have their own means of communicating with one another. And seems like the government needs to be more in tune with how people in reality communicate, fair?

E. Donald Elliott: Yeah, I think that’s right. But one of the things that we saw on it’s a more, I guess, a perverse incentive, we discovered in the course of the study that government employees have a personal incentive, almost a conflict of interest not to get the word out in the sense that that enhances their value in the private sector. I can tell you some stories, but I won’t. But if they know things that people don’t know, generally, it helps them be able to, to take advantage of their insight or knowledge in the private sector, which we think is wrong. One of our interviewees pointed that out to us. And at that point, I recognized that that’s been documented for many years in the in the academic literature, but it’s a fundamental problem, even when President Trump ordered agencies to make all their guidance documents available when he left office, and President Biden came in and revoked that executive order, all the agencies took down their, are many of the agencies, about half the agencies took down their guidance documents, even after having put them up on their website.

Tom Temin: Got it so and guidance documents then have the force of law, so to speak?

E. Donald Elliott: Not technically, but they are basically stating how the agency interprets its rules and regulations. So if you don’t follow them, you run the risk of getting an enforcement. Now in the enforcement suit, the government still has to prove that that’s a correct interpretation of your obligations under the law. But as a practical matter, having spent 40 years in law practice, nobody wants to have the litigation costs of being sued, being sued by the government. This is a problem that was identified in the 1990s by a late law professor named Robert Anthony, who was also very active in the Administrative Conference. So technically, they’re not binding, but as a practical matter, you ignore them at your peril.

Tom Temin: Sure, and let’s back up for a moment and talk about how you went about the study and how you came to these conclusions. Professor Galperin?

Josh Galperin: Yes. So this is a study that’s a qualitative analysis really based on many, many, many interviews that we conducted, we spoke to current and former agency personnel from a variety of different agencies, the so-called independent agencies and executive agencies. We spoke with trade associations and of all different sizes, large and small, specific industry and generalist trade associations. We spoke with business owners, including small businesses and micro businesses. We spoke with labor unions large and small, and a bunch of different public interest organizations, environmental groups, immigration groups, international humanitarian organization, lawyers representing all of these organizations, state governments, the list goes on, you probably don’t need the full methods section. But we’ve conducted a ton of interviews and talked to folks that our interviewees told us to talk to. So basically, in short, we were getting the opinion of government officials on what they were doing and what they thought worked and didn’t work. And we’re getting the opinion of regulated industries and regulatory beneficiaries.

Tom Temin: And is your major finding, then that people that should know things that deserve to know things and the need to know things simply don’t know what the government is up to all the time in a way that could affect them and their livelihoods? And their businesses?

Josh Galperin: Yes, I think that’s a fair way to put it. There is some nuance in terms of, you know, who has access to what information, but our overarching finding is definitely, that there are many, many interested parties who do not have access to the information that they want to have and shouldn’t.

E. Donald Elliott: Let me just add something to that briefly, just this one caveat. Some agencies do a much better job at this than others. And we identified what we would call best practices. And I think one of the ways to improve things is for agencies across government to adopt some of the techniques that some of the best agencies are already using.

Tom Temin: All right, let’s well, let’s get to that, then what are some of the best agencies doing? And give us some, you know, if you can recite us chapter and verse like, name the agency and what they’re specifically doing that.

E. Donald Elliott: Josh, do you want to start? I mean, one of the conclusions that was very interesting is that there’s no one size fits all approach and that these things have to be context specific. So for example, the Coast Guard does a very good job of posting notices at docks to make sure that boat owners know things right. Well, that wouldn’t work if you didn’t have that kind of technique. Similarly, OSHA, I think, requires the posting of various notices in prominent places, usually employee lunch rooms. So this is not rocket science. But it’s very effective in terms of reaching people, as opposed to publishing it in an enormous newspaper that only lawyers read.

Josh Galperin: Another example, which is a surprise, although it might make some sense when I explain it is the IRS. A lot of folks actually pointed to the IRS as having good outreach and notice strategies, including one of the interviewees from a business group, who was quick to say we don’t like the IRS very much, but they do give us pretty good notice. And so the IRS, of course, doesn’t necessarily feel that effective. But that’s in part because the IRS’ regulated community is most of the country, right. So they really have a huge swath of businesses and individuals that they regulate. And so they’ve had to dedicate a lot to this. So they have an extensive outreach program with a staff dedicated just to getting information out there in the world. One of the things that they do quite well is interact with intermediary organizations, we’ve learned that when agencies can find the proper intermediary between the regulated community or regulatory beneficiaries on the ground, the agency, the right intermediaries can play a really important role here. So IRS, for instance, works very closely with accountants and the trade associations that represent accountants to make sure they know what the rules are, so that they can implement them more clearly. So you know, dedicating staff, having good outreach plans, and using intermediaries are just some of the examples that we found that the best agencies will use.

Tom Temin: Are there any agencies that really need to improve things? Let’s put it that way?

Josh Galperin: That’s a good question. I mean, the answer is that all agencies really need to improve things in some aspect of their work. I’m not sure we called out any agencies by name, you know, to put this in context, right, we wrote this report for the Administrative Conference of the United States, one of the purposes of the Administrative Conference is to provide recommendations to agencies. So we didn’t want to go on the attack in a little bit of concern that that would dull the impact of our findings. But I’ll think of that for a second. And if I come up with something, I’ll mention it.

Tom Temin: So you have some recommendations for the Administrative Conference, therefore, of the U.S. the ACUS. Do you have recommendations for agencies or did they just go to the ACUS and then maybe talk about how the ACUS then can influence agencies?

E. Donald Elliott: OK, well, the Administrative Conference of the United States, which was sometimes referred to by the acronym ACUS, makes recommendations to the agencies over time, over 90% of them get implemented in whole or in part. So we wrote a report, we made suggestions to the Administrative Conference. The recommendations really are made by the Administrative Conference, not by us and we might have gone farther in a few areas. Basically, the most important recommendation, I think, is that agencies really think about and have a thought through program or plan for getting notice out to their various constituencies. So we recommended that there be a plan that somebody be designated within the agency to have responsibility for it, and that there’ll be sharing of information across agencies about what’s successful, and that there also should be evaluation by agencies as to what is and is not effective. As you said, earlier, companies do this, they follow up to see what’s working and what isn’t, then we suggested agencies should do the same thing. That contrasts with what happens now, which in my experience as a former general counsel of the Environmental Protection Agency. Typically, it’s simply the lawyers at the agency who ensure that the agency complies with the minimum requirements of the Administrative Procedure Act and the Federal Register Act and doesn’t necessarily do things that it could do practically to get the word out. And that’s where we think that agencies are taking a risk under the constitutional principles that we talked about before. So the most important thing is agencies need to focus on this and think about how they can get the word out most effectively.

Josh Galperin: And I’ll add one short thing, which is just that when you ask, where are agencies failing? I think this is the one place where across the board, we didn’t find any great examples of agencies doing this kind of proactive notice planning. That’s not to say that none are but in all of our interviews, we didn’t really find anybody saying, yes, we’ve been thinking about this very effectively for a long time.

Tom Temin: But as Professor Elliott said earlier, there’s sort of a perverse incentive to not do this. So is there any way around that to get the people that responsible say, well, you really can’t think about your next job in industry, you got to do a great job now in government to get the word out of proposed rule changes or new rules?

E. Donald Elliott: Yeah, I think that’s a really important point. And I think if you have somebody in an agency, who is the person in charge of making sure that notice is effective, and who’s studying it, that really creates a counterweight to individual lawyers, for example, who think oh, well, you know, I have all this detailed knowledge. I don’t think that’s the only incentive. I think the other concern with making interpretations available is agencies see that as a way or at least some agencies see that as a way of limiting their flexibility. So if they’ve said a rule means something in a document, and then they later want to prosecute somebody for doing exactly what they said was legal. And I can cite some examples of that, from my own experience at EPA. So I do think there are these conflicts of interest, I think the best way to deal with it is to have somebody in the agency whose job and professional career it is to make sure that the agency is getting the word out as effectively as possible.

Tom Temin: Sounds like we almost need agency rulemaking ombudsmen or maybe the inspector general or someone independent, then of the expertise from where the rules get generated.

E. Donald Elliott: Or simply somebody who recognizes and gives awards. I mean, if there were an annual award given by the Administrative Conference, this is not one of the recommendations. But it could be. If there were an annual award given by the Administrative Conference, or by the president, or by the Office of Management and Budget for the agency that was doing the best thing. And that would get everybody else’s attention. And those awards for positive behavior tend to be much more effective than criticizing people for negative behavior. So I think we’re gonna get more effective notice when we start recognizing and giving rewards for effective notice.

Tom Temin: And what about social media, by the way? We live in the age of social media, and we presume everybody looks at Twitter or something, is that a possible channel for this type of notice?

E. Donald Elliott: Yes, and that’s certainly something that we recommend, I think, you know, you can look at areas where the agency is really trying to get the word out. And they do use more modern techniques like public service announcements, press releases, listservs, where people can sign up on the website that they want to receive announcements with regard to a particular subject. EPA has a particularly good website in that regard. And you can sign up for all or only some of the agency’s news releases in your areas of interest. So if you’re interested in environmental justice, you can get the announcements with regard to environmental justice, but you don’t have to get them as you don’t have to be overwhelmed by notices in other areas. So that’s one of the recommendations that we make, but we think that email and then websites and listservs and social media and public service announcements some of these modern techniques are low cost ways to supplement the publication in the Federal Register and that they’re under utilized by agencies.

Tom Temin: And Josh, what’s been the reaction from ACUS so far of those recommendations?

Josh Galperin: Yeah, well in June, ACUS held it twice biannual, I think, large meeting and adopted recommendations. So we, as the researchers read the report, we don’t actually write the recommendations, although we can make, we made some proposals in our report and their ACUS adopted recommendations based on our report in June. So these are now official recommendations of the agency. And hopefully going back to the question about incentives and so forth earlier, hopefully, having these recommendations out there, elevating the issue of notice in that way will also add some transparency to what’s what’s happening on the ground and help advance this.

E. Donald Elliott: And just to add to that, in the course of developing our report, and of course of developing recommendations, ACUS convened to agency roundtables of representatives from the various agencies at which we discussed our preliminary findings. And I was encouraged that the reaction was generally very, very favorable. They seem to like the idea of having notice plans and sharing information about what was effective and working from one agency to another. I think it’s really a matter of the government having been sort of deeply mired in just doing what it had been doing since the 1930s. And not really thinking through how the new social media changes things. And that’s one reason that we published the article is to try to lead agency general counsel’s know that they do have some legal risks in this area. And I think if they don’t update their native notice practices to use reasonably available new technologies, that eventually the courts will step in and basically cite the precedents that we’ve cited that agencies have to do more than just publish it in the Federal Register, particularly in situations where there are easily available alternative techniques that they’re not using.

Tom Temin: OK, E. Donald Elliott and Josh Galperin are law professors at Yale and Pace. Thanks so much for joining me.

E. Donald Elliott: Well, thank you for having us.

 

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