DOJ Presses for Reforms of APA

The U.S. Administrative Procedure Act (APA) came into being in 1946, but by some accounts hasn’t been subjected to a serious overhaul in the intervening 74 years. However, the Department of Justice has made the argument that the time has come to revisit the language in the APA, and has bipartisan Senate legislation to back the argument.

The Aug. 11, 2020, DOJ statement includes a link to a report that summarizes the findings of a December 2019 summit on the measures that might bring the APA more into line with modern circumstances. The report, titled “Modernizing the Administrative Procedure Act,” is largely a transcription of the discussions at the summit, but the report also cites previous efforts to amend the APA due to concerns that the statute has not worn well with the passage of time.

Among these was a push for reform by the Second Hoover Commission in 1955, but another pressing consideration is the sheer cost of regulation. Deputy Attorney General Jeffrey Rosen estimated that the aggregate annual cost of federal regulation is as much as $2 trillion a year, a sum one speaker said would represent the ninth largest economy in the world if that figure represented a nation’s gross domestic product.

Multiple Legislative Proposals, No Votes

The APA has not gone untouched in the 74 years since its passage, but many of the changes, such as the 1967 Freedom of Information Act, have been additive in nature rather than attempts to substantially overhaul the APA. Several bipartisan bills have emerged in Congress recently to address the drift of the APA toward functional senescence, including the Regulatory Accountability Act of 2017 (S. 951). Among its other provisions, S. 951 would have required federal agencies to conduct public hearings preparatory to development of rules with an anticipated economic impact of $100 million or more.

Another feature of the bill is a requirement that federal agencies must disclose all data and other sources of information used in rulemaking per the Portland Cement doctrine. The administrative requirement of a cost benefit analysis for rules would also become part of the statute via S. 951. That bill never came up for a vote, however.

There is also some interest in the Independent Agency Regulatory Analysis Act (S. 869), which would subject independent federal agencies to the same requirements as other agencies. This includes the economic impact analysis requirement for rules that are estimated to impose an economic cost of $100 million, but this bill was never put to a vote in the Senate Homeland Security and Government Affairs Committee.

Despite the absence of legislation, the Trump administration has taken measures, including Executive Order 13,771, which is said to have led to a reduction in the volume of new federal rules from the average of 279 rules between 2000 and 2016 to 61 in 2017 and 2018. According to the related entry at the Office of Information and Regulatory Affairs, this executive order has eliminated more than $13 billion in costs across government in 2019 and an overall total of nearly $51 billion since 2017.

As might be expected, the Brand memo receives some attention in connection with administrative activities, given that it bans the use of federal agency guidance as an indicator of violations in civil and criminal matters pursued by the DOJ. Rosen said in his presentation that federal agencies are sometimes inclined to issue guidances in lieu of rulemaking in an attempt to avoid the relatively cumbersome rulemaking process, but as a result, private sector entities may find themselves unavoidably in conflict with one or more guidances that may be difficult to locate.

While the summit took place prior to the onset of the COVID-19 pandemic and thus might be counted as a casualty of the pandemic, DOJ’s revival of the question signals an interest in renewing the push for reform of the APA. The impending election suggests, however, that any related legislation will not emerge until December at the earliest, with calendar year 2021 perhaps a more likely target date.