General Information
The presidential transition is
big...
Nearly $4 trillion in annual spending
Hundreds of federal agencies
$ 4 Trillion
8%
3
Other
4%
6%
Veterans Benefits and Services
Net Interest
13%
Health
14%
Income Security
15%
Medicare
16%
National Defense
24%
Social Security
2
1
0
U.S. Government Spending 2015
U.S. Office of Management and Budget, Budget of the United States Government, Fiscal Year 2017: Historical Tables, 2015, Table 3.2
...the transition is complicated
with no time to spare...
Large array of stakeholders
Transition
team
(500+
people)
Federal Bureau
of
General
Services
Administration
Investigation
Department
of
Election
November
2016
Conventions
July
2016
Pre-election
~100 days
Outgoing
White House
Justice
National
Archives
Office
Federal
agencies
and career
staff
Only 73 days between election and
inauguration
of
Personnel Mgmt
Office of
Government
Ethics
Inauguration
January
2017
Post-election
73 days
...the transition is a time of
vulnerability
World Trade Center bombing
February 1993
Hurricane Katrina
August 2005
Waco standoff
April 1993
Economic meltdown
2008-2009
9/11 terrorist attack
September 2001
Auto bailout
Winter 2008-2009
Anthrax scare
September 2001
Underwear bomber
December 2009
First year is unique opportunity
for appointments and policy wins
Lowest confirmation time
•
Mean confirmation length by
year in administration, 1981–
20141
Avg # of days
150
Highest political capital
•
Modern presidents see on
average 15 point higher
approval rating in first two
years of administration than
year three2
100
50
0
First Second Third Fourth
Fifth
Sixth Seventh Eighth
Year in Administration
Lowest confirmation time in first year
to get people in place
1.
2.
Highest political capital in first year
to get policies through
O'Connell, Anne Joseph (2015). “Shortening Agency and Judicial Vacancies through Filibuster Reform – An Examination of Confirmation Rates and Delays from 1981 to 2014.” Duke Law Journal;
Gallup Poll, 1945-2015, data compiled by The American Presidency Project, University of California Santa Barbara; BCG analysis
Lessons learned
Process
Policy
People
• Start early
• ID deliverables
early
• Appoint qualified
chairman
• Maximize
knowledge of
previous
transitions
• Focus energy
on quality, not
quantity
• Formulate personnel
strategy
• Be organized
• Collaborate
early
• Define and
delegate
responsibilities
• Conduct
efficient
candidate
updates
• Put the right people
in the right roles
• Mix past transition
experience, strong
project management
skills and
understanding of
D.C.
The Center for Presidential Transition
works with stakeholders across government to ensure the
smoothest transfer of power yet.
INCOMING
ADMINISTRATION
OUTGOING
ADMINISTRATION
FEDERAL
AGENCIES
POLITICAL
APPOINTEES
What Success Looks Like
Transition management
•
Set up early and organize effectively using now available resources
•
Build a base for an enduring relationship with Congress
•
Coordinate a trusted relationship with the campaign
•
Create a trusting and productive relationship with the career workforce in agencies
Priorities/policy implementation
•
Convert campaign commitments to fully informed 200 day plans by Inauguration Day
•
Develop presidential budget and management plan to enable policy goals by February
2017
Appointments/People
•
Key White House and Cabinet and Sub-Cabinet in place & prepared by January 2017
•
Entire critical leadership team (~400 total) in place & prepared by August 2017 recess
History in the making
Clinton transition
leadership team
Trump transition
leadership team
• Sec. Ken Salazar
• Gov. Chris Christie
• Tom Donilon
• Rich Bagger
• Gov. Jennifer Granholm
• Bill Palatucci
• Neera Tanden
• Jared Kushner
• Maggie Williams
What’s next for the transition
teams
• Catalog campaign policy commitments
• Develop a 100- to 200-day implementation plan
• Create a management agenda
• Formulate strategy for new executive orders
What’s next for the outgoing
administration
• Prepare memo on “hot” domestic, economic and
national security issues the new administration will
likely face in its first 90 days
• Work with the National Archives to determine the
artifacts, gifts and paper, electronic and audiovisual
records to be transported out of the White House
• Modify the security clearance process
What’s next for Congress
• Prepare to confirm cabinet secretaries and
their core teams (about 100 total) around
Inauguration Day
• Confirm the 400 most crucial political
appointments by the 2017 August recess
• Prepare for a surge in nominations by
providing the latest version of all
committee-specific nominee forms to the
transition teams
presidentialtransition.org
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MIDNIGHT RULES:
A REFORM AGENDA
Jack M. Beermann*
INTRODUCTION................................................................................ 286
I. EVIDENCE THAT THE PROBLEM EXISTS ............................... 290
II. NORMATIVE ISSUES SURROUNDING
MIDNIGHT RULEMAKING .................................................... 300
A. Political Background of Midnight Rules ....................................300
1. Hurrying .................................................................... 300
2. Delay .......................................................................... 305
3. Waiting ....................................................................... 306
*
Professor of Law and Harry Elwood Warren Scholar, Boston University School of
Law. Many people contributed to the successful completion of the Administrative Conference of the United States’s (ACUS) project on midnight rules. At ACUS itself, these include
Emily Bremer, Jeff Lubbers, Funmi Olorunnipa, Jonathan Siegel, and Robert Rivlin, ACUS
Rulemaking Committee Chair, and ACUS Chair Paul Verkuil. Anne Joseph O’Connell
generously shared and interpreted her data on rulemaking duration and timing for the
Report upon which this Article is based. Ron Cass provided guidance and support throughout the project. Although they may not all agree with everything in the final product, I owe
special thanks to the many busy and knowledgeable people I interviewed for the project:
Gary Bass, former head of OMB Watch and current director, Bauman Family Foundation;
Amy Bunk, Director of Legal Affairs and Policy, Office of the Federal Register; Curtis
Copeland, Specialist in American Government at the Congressional Research Service; Susan
Dudley, Former Administrator of OIRA and current Director of the Regulatory Studies
Center, George Washington University; Thomas A. Firey, formerly of the Cato Institute and
Senior Fellow at the Maryland Public Policy Institute; Michael Fitzpatrick, Senior Manager
and Senior Counsel for General Electric, Former Associate Administrator of OIRA and
Current ACUS Council Member; Jessica Furey, former Associate Administrator for the
Office of Policy, Economics, and Innovation at the United States EPA and currently staff
member at the Whitman Strategy Group; Sally Katzen, former Administrator of OIRA and
currently Senior Advisor, Podesta Group, Government Relations and Public Relations
Professionals; Rena Steinzor, Professor of Law at University of Maryland Francis King
Carey School of Law, Member Scholar at Center for Progressive Regulation; Jim Tozzi,
official in several administrations including in the OMB under President Reagan, currently
affiliated with the Center for Regulatory Effectiveness; Governor Christie Todd Whitman,
Former Governor of New Jersey and Administrator of the EPA and currently principal of
the Whitman Strategy Group; and Jim Wickliffe, Scheduler, Office of the Federal Register.
Special thanks also to Geoff Derrick, Bryn Sfetsios, Daniela Sorokko, and Marissa Tripolsky
for excellent research assistance. This Article is based on a February 2012 Report that I
prepared as an academic consultant to the Administrative Conference of the United States,
which adopted Recommendation 2012-2, Midnight Rules, based on the Report. See Midnight
Rules, ADMIN. CONF. OF THE U.S., http://www.acus.gov/research/the-conference-currentprojects/midnight-rules/ (last visited Nov. 1, 2012); see also Administrative Conference
Recommendation 2012-2: Midnight Rules, 77 Fed. Reg. 47,802 (adopted June 14, 2012).
285
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4. Other Elements .......................................................... 308
B. Normative Views of Midnight Rulemaking ............................... 312
C. Summary .............................................................................. 317
III. EVALUATING MIDNIGHT RULES ........................................... 317
A. Measuring the Quality of Midnight Rules ................................. 318
B. The Volume and Durability of Midnight Rules .......................... 330
C. Interviews on the Quality of Midnight Rules ............................. 334
IV. REACTIONS OF INCOMING ADMINISTRATIONS
TO MIDNIGHT RULEMAKING ............................................... 335
A. Reactions of Incoming Administrations to Midnight Rules ........... 335
B. The Legality of Strategies for Dealing with Midnight Rules ......... 353
1. Legal Views in the Executive Branch
and Commentary ........................................................ 354
2. Case Law on Reactions to Midnight Regulation ............357
3. The Florida Courts’ Reactions
to Midnight Rulemaking ............................................. 369
4. Summary and Conclusions Concerning the Legality
of Reactions to Midnight Rulemaking .......................... 370
C. The Bush Administration’s Effort to Curb
Its Own Midnight Rulemaking ................................................ 372
V. RECOMMENDATIONS ........................................................... 376
A. Prior Reform Proposals ........................................................... 376
VI. ACUS RECOMMENDATIONS ................................................ 382
A. Recommendations to Incumbent Presidential Administrations ..... 382
B. Recommendations to Incoming Presidential Administrations ....... 382
C. Recommendation to Congress................................................... 383
D. Recommendation to the Office of the Federal Register ................. 383
CONCLUSION ................................................................................... 384
INTRODUCTION
There is a documented increase in the volume of regulatory activity
during the last ninety days of presidential administrations when the President is a lame duck, having either been defeated in a bid for re-election or
being at the end of the second term in office. This includes an increase in
the number of final rules issued as compared to other periods. The phenomenon of late-term regulatory activity has been called “midnight
regulation,” based on a comparison to the Cinderella story in which the
magic wears off at the stroke of midnight.1
1.
See Jay Cochran, III, The Cinderella Constraint: Why Regulations Increase
Significantly During Post-Election Quarters 4 (Mar. 8, 2001) (unpublished manuscript),
available at http://mercatus.org/sites/default/files/The_Cinderella_Constraint(1).pdf.
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This Article looks closely at one species of midnight regulation—
namely, midnight rules. This Article defines midnight rules as agency rules
promulgated in the last ninety days of an administration. This Article focuses on legislative midnight rules (normally issued under the notice and
comment procedures of the Administrative Procedure Act (APA)), because
they are the most visible and often the most controversial actions taken in
the final days of administrations and because they are usually the most
difficult to alter or revoke among the various midnight actions taken by
outgoing administrations. However, because late-term activity goes beyond
legislative rulemaking, this report also discusses, to a lesser extent, other
phenomena such as the issuance of non-legislative rules including interpretative rules and policy statements; non-rule regulatory documents, such as
guidance documents and executive orders; and the use of other presidential
powers, such as the pardon power and the ability to entrench political appointees into protected employment positions in the new administration.
This Article documents the existence of the midnight rules phenomenon both quantitatively and qualitatively, using numerical measures of the
volume of rules and qualitative analysis of some rules as illustrations. The
Article reviews various explanations for the existence of the phenomenon,
ranging from the simple human tendency to work to deadline, to more
complicated political factors that may affect the timing of rules. The Article
also reports on interviews of officials involved in rulemaking to inform the
analysis of the causes and effects of the midnight rulemaking phenomenon.2
This Article also addresses midnight rulemaking from a policy perspective, asking whether there are reasons to be concerned about the
phenomenon. Midnight rulemaking and midnight regulation generally have
been strongly condemned by commentators and media from across the
political spectrum.3 There are at least two possible sets of concerns regarding the increase in rulemaking at the end of an administration: first,
midnight rules may be of lower quality than rules issued at other times
during administrations, and second, midnight rulemaking may involve
undesirable political consequences, mainly the unwarranted extension of an
outgoing administration’s agenda into the successor’s term. It may be very
difficult to arrive at firm conclusions on either of these potential objections
2.
For a list of the interviewees, with information on their experience and affiliations, see supra note *.
3.
For examples of negative commentary on midnight rulemaking of the last two
transitions, see Michael Fumento, Regulatory Freight Rolls On Unchecked, WASH. TIMES, June
3, 2001, at B3 (attacking Clinton administration midnight rules as timed to avoid public
scrutiny and not in the public interest); Matthew Blake, The Midnight Deregulation Express: In
His Last Days in Power, George W. Bush Wants to Change Some Rules, WASH. INDEP. (Nov. 11,
2008), http://washingtonindependent.com/17813/11-hour-regulations.
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to midnight rulemaking, but this Article will attempt to do so from various
perspectives.
Because rulemaking often involves values and policy preferences that
are not conducive to objective measurement for quality, it is very difficult to
measure the quality of rules. Various metrics have been used to attempt to
measure the quality of midnight rules, including length of time that the
rules were reviewed at the Office of Information and Regulatory Affairs
(OIRA) in the Office of Management and Budget (OMB). Another possible measure of quality is durability, relying on the premise that low-quality
rules are likely to be less durable than higher quality rules. In addition to
examining existing studies of the durability of midnight rules, this Article
includes the results of an original empirical study of the durability of the
midnight rules issued in the last three presidential transition periods as
compared with rules issued by the same administrations in non-midnight
periods.4
The political desirability of midnight rulemaking is also difficult to
judge and views on it are likely to be controversial. There are no clear
standards for judging whether midnight rules are politically undesirable.
Arguments that midnight rules are politically undesirable center on three
related factors: first, that the outgoing administration is projecting its agenda into the future; second, that midnight rules are timed to avoid
accountability; and third, that the outgoing administration is placing a
burden on an incoming administration to sift through the high volume of
material left at the end of the term. This third concern is related to the
prior two. The incoming administration is placed in the position of having
to review rules adopted late in the prior administration due to the potential
problems with midnight rules; they may be of lower quality if they were
adopted pursuant to a hastier process than normal; they may not have been
open to sufficient public scrutiny; and they may represent projection of a
rejected political agenda that the incoming administration will not wish to
carry out.
In many cases, however, midnight rules may not suffer from serious political problems and may actually be beneficial, both for the public and the
incoming administration. Because of the politically innocuous human tendency to “work to deadline,” the pace of work will naturally pick up as
4.
A disclaimer is in order here. The study I conducted for the Report on which this
Article is based includes comparative numerical counts of rules, but the data have not been
examined for statistical significance or in light of potential external factors for which a more
sophisticated study would control, such as economic factors or political factors not included
in the study. In other words, it has not been determined whether the differences in numerical counts are statistically significant or could be explained by factors such as economic
growth or distress. The reader should therefore be cautious when evaluating the original data
reported in this Article.
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agencies try to finish the tasks on their agendas as the end of the term
nears. Assuming agencies are pursuing rulemaking (whether regulatory or
deregulatory) that is generally in the public interest, the fact that it takes a
deadline for agencies to finish their rulemaking is unfortunate, but it does
not necessarily make the rules undesirable. Further, some midnight rules
may help the incoming administration by finishing up the “old business” on
the agenda so the new administration can focus on their “new business.”
Further, there is the possibility that late-term rulemaking reflects the outgoing administration’s ability to rise above the political fray once the
election is over and act in the public interest in ways that are less likely
when interest group pressure is higher.
Regardless of the policy or political desirability of midnight rules,
recent incoming administrations confronted with a high volume of lastminute regulatory output by the previous administration have employed
common strategies to deal with midnight rulemaking. The goal of the strategies is to stop rulemaking activity until the new administration has taken
control of the government by putting in place its appointees to high-level
positions. Although the details vary, common elements of these strategies
include an immediate freeze on the publishing of new rules in the Federal
Register, withdrawal of rules from the Federal Register that are awaiting publication, and suspension of the effectiveness of rules that have been
published but have not yet gone into effect. All of these actions are designed to halt regulatory activity until appointees of the new administration
are in charge.
The administration of President George W. Bush was the first to take
action aimed directly at its own midnight rulemaking. The President’s Chief
of Staff ordered all agencies to stop issuing proposed rules after June 1,
2008, and to stop issuing final rules after November 1, 2008. While agencies
did not universally meet this deadline, the volume of midnight rules during
the George W. Bush (GW Bush) administration was reduced, even though
the total volume of rules issued in the administration’s entire final year was
not lower than for past outgoing administrations. The deadline apparently
encouraged agencies to finish their work earlier in the administration’s final
year, which would reduce the volume of midnight rules and also make the
rules issued in the final year less amenable to rescission or alteration by the
incoming administration or Congress.
This Article concludes with a series of recommendations concerning
midnight rulemaking adopted by the Administrative Conference of the
United States (ACUS). These recommendations include reforms aimed at
the propensity of outgoing administrations to engage in midnight rulemaking and the powers of incoming administrations to deal with the midnight
rules promulgated by their predecessors.
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I. EVIDENCE THAT THE PROBLEM EXISTS
The phenomenon of midnight regulation has received attention from
politicians, academics, and the media during the last several presidential
transitions. The first systematic look at the general phenomenon of midnight regulation was a research paper written by Jay Cochran under the
auspices of the Mercatus Center at George Mason University.5 Cochran
chose a very simple metric of regulatory output: the number of pages published in the Federal Register. Cochran recognized that this metric is
imprecise because it does not distinguish among the various regulatory
documents that are published in the Federal Register and does not account
for the relative verbosity of rule writers, blank pages, and other variations.
However, as Cochran concluded, there is no reason to suspect the existence
of systematic variations in the relationship between total regulatory output
and pages in the Federal Register.6 Further, all agency rules and many other
important agency actions are published in the Federal Register. Thus, the
number of pages in the Federal Register is a reasonably good proxy for overall regulatory output.
Cochran found that “[t]he daily volume of rules during the final three
months of the Carter Administration—as approximated by page counts of
the Federal Register—ran more than 40 percent above the level it had
averaged during the same months of the non-election years 1977, 1978, and
1979.”7 Cochran also concluded that the “midnight regulation” phenomenon
was not new, and that going back to 1948, “regulations during the postelection quarter . . . increase roughly 17 percent, on average, over the
volumes prevailing during the same periods of non-presidential election
years.”8 Cochran carefully tested for explanations of the midnight regulation
phenomenon other than the simple “Cinderella constraint,” employing
variables such as political party control of Congress and the Executive
Branch, turnover in Cabinet membership, Gross Domestic Product (GDP),
and congressional days in session. Cochran found that while some of the
other factors have a small impact on the volume of regulation in the midnight period,9 the predominant factor is the presidential election which
brings about the Cinderella constraint.
5.
See Cochran, supra note 1.
6.
Id. at 2 n.4.
7.
Id. at 2.
8.
Id. at 3.
9.
Cochran found that “each one percent rise (or fall) in GDP generates about a 1.3
percent rise (or fall) in regulatory output.” Id. at 11. He also found that “[p]artisan effects for
both the legislative and executive branches were positive but not significant,” and that for
each day that Congress stays in session during the midnight period, midnight regulation
increases .3%, which Cochran characterizes as statistically significant but small. Id. at 11–12.
Cabinet turnover appears to be strongly associated with midnight regulation. The prediction
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Ever since Cochran’s study documented a consistent increase in regulatory activity at the end of presidential terms, there has been a working
assumption that the midnight regulation phenomenon is real. Others have
confirmed the existence of the phenomenon. For example, in 2001, Wendy
Gramm, former head of OIRA, testified that there were over 26,542 Federal
Register pages published in the last three months of the Clinton administration, eclipsing the Carter administration’s record of approximately 24,500
last-quarter pages.10 In 2005, Jason Loring and Liam Roth published a study
of the durability of midnight rules, in which they detailed and compared the
number of rules issued by three agencies (National Highway Traffic Safety
Administration (NHTSA), Occupational Safety and Health Administration
(OSHA), and Environmental Protection Agency (EPA)) during the midnight periods of the administrations of George H.W. Bush (GHW Bush)
and Bill Clinton.11 Although they did not focus on documenting the midnight rulemaking phenomenon, their study noted that the pace of
rulemaking during the midnight periods of the two presidential transitions
they studied increased somewhat as compared with the remainder of the
administrations’ last years in office.12
There have been additional studies of the pace of regulatory activity, all
of which confirm the existence of the midnight rulemaking effect in different ways. For example, Veronique de Rugy and Antony Davies found:
[I]n non-transition quarters, pages are added to the Federal Register
at a constant rate—roughly one-fourth of the pages added during a
calendar year will be added each quarter. However, for quarters in
is that when there is more turnover in Cabinet membership, there will be more regulation,
because the transition to a new Department Head may bring new priorities and a change in
views concerning pending initiatives. See id. at 12–13. Of course, the highest degree of
turnover occurs when the incumbent or the incumbent’s party is replaced, but Cochran
observes an increase in regulatory volume in post-election quarters when the incumbent is
reelected. Cochran suggests that this may in part be due to the change in Cabinet membership that often occurs after re-election. See id. at 13.
10.
Congressional Review Act: Hearing Before the H. Subcomm. on Energy Policy, Natural
Res. & Regulatory Affairs, Comm. on Gov’t Reform, 107th Cong. (2001) (testimony of Dr.
Wendy L. Gramm, Distinguished Senior Fellow Dir., Regulatory Studies Program, Mercatus Ctr., George Mason Univ.). Various reports on the number of Federal Register pages
published during the Clinton Administration’s last quarter are discussed in Jack M. Beermann, Presidential Power in Transitions, 83 B.U. L. REV. 947, 948 n.2 (2003).
11.
See Jason M. Loring & Liam R. Roth, After Midnight: The Durability of the “Midnight” Regulations Passed by the Two Previous Outgoing Administrations, 40 WAKE FOREST L.
REV. 1441 (2005).
12.
Id. at 1454 tbl.2 (40% of all rules issued by the EPA, OSHA, and NHTSA in last
eleven months of the GHW Bush administration and 51% of all rules issued in last eleven
months of Clinton administration were promulgated during final three months).
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which a presidential election occurred, the number of pages added
exceeded the 25 percent baseline 13 out of 15 times.13
De Rugy and Davies’s study confirmed that the only valid explanation
for the increase in regulatory activity during transition quarters is the fact
of transition itself.14 In another study using the same data set, the authors
reported that “after 1970, the number of pages added to the Federal Register
increased drastically after an election, especially in 1980, 1992, and 2000,
when there was a switch between political parties. There was a smaller
increase when the ruling party stayed in power, such as in 1988.”15
In a more comprehensive study, Anne Joseph O’Connell has documented the yearly and quarterly pace of rulemaking activity from 1983 through
2009.16 She found an increase in rulemaking activity in most administrations’ last years, especially in cabinet departments.17 More pertinent to this
Article’s definition of the midnight period, she found increased rulemaking
activity in the last quarter of the Clinton and GW Bush administrations.18
She characterized the data on the last quarter as follows:
In terms of presidential transitions, cabinet departments finished
more important actions in the last quarter of President Clinton’s
Administration (83 actions) than in any other quarter in the data
for that presidency (the next highest was the second quarter of
1996 with 55 actions). Similarly, cabinet departments and executive
agencies promulgated more final actions (95 and 22 actions, respectively) in the final quarter of President George W. Bush’s
Administration than in any other quarter of his presidency (the
13.
Veronique de Rugy & Antony Davies, Midnight Regulations and the Cinderella
Effect, 38 J. SOCIO-ECON. 886, 887 (2009). In some quarters the effect was relative mild,
while in others, such as 1949 and 1961, the effect was striking. See id. fig.2. The only quarters
in which the 25% baseline was not exceeded were in the Ford-Carter transition and after
Reagan’s re-election. Id.
14.
Davies and de Rugy looked at alternative explanations such as inflation, unemployment, the misery index, congressional session days and differences in party control
between the presidency and Congress. They found no statistical significance for any of these
factors as a potential explanation for the increase in rulemaking during the midnight period.
Id. at 889.
15.
Jerry Brito & Veronique de Rugy, Midnight Regulations and Regulatory Review, 61
ADMIN. L. REV. 163, 168 (2009).
16.
Anne Joseph O’Connell, Agency Rulemaking and Political Transitions, 105 NW. U. L.
REV. 471 (2011).
17.
“Cabinet departments under President Reagan and President George W. Bush and
all types of agencies under President George H.W. Bush completed more rulemakings in the
final year than in any previous year of those Administrations.” Id. at 503. See also Anne
Joseph O’Connell, Political Cycles of Rulemaking: An Empirical Portrait of the Modern Administrative State, 94 VA. L. REV. 889, 952 (2008).
18.
O’Connell, supra note 16, at 505.
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next highest were 72 and 20 actions in the third quarter of the
final year for cabinet departments and executive agencies,
respectively).19
O’Connell found no other factor than simple timing adequate to explain the
increase in rulemaking in the last quarter of administrations.20 O’Connell’s
study also documented an increase in initiation of rules at the end of
administrations.21
Another study documenting the existence of the midnight rulemaking
phenomenon is a Congressional Research Service (CRS) report written by
Curtis W. Copeland.22 The primary focus of Copeland’s Report is the status
of midnight rules issued by the GW Bush administration. The Report
contains data concerning the volume of midnight rules in the GW Bush
administration.23
The primary focus of this Article is on rules issued pursuant to notice
and comment, not on interpretative rules, policy statements, guidance
documents, executive orders, and other rule-like documents typically issued
without notice and comment. Even if there is an increase in non-notice and
comment activity during the midnight period, documents issued without
notice and comment lack durability when compared to rules issued after
notice and comment. This makes them both less problematic, because the
incoming administration can revoke or alter them without notice and
19.
Id. at 504.
20.
Id. at 501–07.
21.
Id. at 498. O’Connell reports that GW Bush’s administration proposed more rules
during the third quarter of its final year than in any other quarter of its eight years. Id. at
498–99. In another study, O’Connell noted that three departments, the Departments of
Transportation, Agriculture, and Interior, issued more NPRMs during the final quarter of
the GHW Bush administration “than during any other political transition period.”
O’Connell, supra note 17, at 948.
22.
CURTIS W. COPELAND, CONG. RESEARCH SERV., R4077, “MIDNIGHT RULES”
ISSUED NEAR THE END OF THE BUSH ADMINISTRATION: A STATUS REPORT (2009).
23.
Id. at 2–3:
From November 1, 2008, through January 2009, federal agencies sent GAO a total
of 341 ‘significant’ or ‘substantive’ final rules, a 51% increase from the number of
such rules sent during the same period one year earlier (225 rules). During the
same November 2008–January 2009 timeframe, the agencies sent GAO 37 major
rules, compared with 23 during the same period one year earlier (a 61% increase).
The surge in rulemaking at the end of the Bush Administration is also apparent in
the number of significant final rules that OIRA reviewed pursuant to Executive
Order 12,866. According to the Regulatory Information Service Center, from
September 1, 2008, through December 31, 2008, OIRA reviewed a total of 190
significant final rules—a 102% increase when compared with the same period in
2007 (when OIRA reviewed 94 significant final rules).
Id. (footnotes omitted).
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comment, and less likely to be done, because given easy revision, it may not
be worth the effort to issue them at the end of the term.
Nonetheless, there is a noticeable increase in the issuance of non-notice
and comment rule-like documents such as interpretive rules, policy statements, and guidance documents during the midnight period. Some agencies
issue many more guidance documents than actual rules, possibly to avoid
the rigors of the rulemaking process and the relatively stringent judicial
review of rules.24 Agencies are known to treat non-legislative rules as if they
are binding law, despite the fact that the APA’s notice and comment procedures were not employed in promulgating them.25 Some late-issued
guidance documents have been attacked as midnight regulation, but these
attacks focus on a particular document rather than on the general phenomenon of guidance documents issued in the midnight period.26
To substantiate the increase in non-legislative rulemaking during the
midnight period, I conducted a simple empirical study on the volume of
interpretative rules, policy statements, and guidance documents during
midnight and non-midnight periods in the last three presidential transitions:27 GHW Bush to Bill Clinton, Bill Clinton to GW Bush, and GW
Bush to Barack Obama.28 The findings are that in each midnight period, the
issuance of guidance documents, policy statements, and interpretative rules
was higher than the non-midnight period in the prior year, and that the
bulk of this activity comprised guidance documents and draft guidance
documents. A significant number of the documents issued were policy
statements and very few were interpretative rules in both midnight and
non-midnight periods. The exact numbers are as follows:
24.
See Nina A. Mendelson, Agency Burrowing: Entrenching Policies and Personnel Before
a New President Arrives, 78 N.Y.U. L. REV. 557, 573–74 (2003); Peter L. Strauss, The Rulemaking Continuum, 41 DUKE L.J. 1463, 1468–69 (1992).
25.
See Appalachian Power Co. v. EPA, 208 F.3d 1015, 1020 (D.C. Cir. 2000); Robert
A. Anthony, Interpretive Rules, Policy Statements, Guidances, Manuals, and the Like—Should
Federal Agencies Use Them to Bind the Public?, 41 DUKE L.J. 1311, 1328–55 (1992).
26.
See e.g., Michael Bennett Homer, Frankenfish . . . It’s What’s for Dinner: The FDA,
Genetically Engineered Salmon, and the Flawed Regulation of Biotechnology, 45 COLUM. J.L. &
SOC. PROBS. 83, 130–31 (2011) (endorsing characterization of January 15, 2009, publication
of FDA guidance document on genetically engineered animals as “midnight regulation”).
27.
For a disclaimer concerning the data reported here, see supra note 4.
28.
For the midnight period, I used October 20 through January 20 of the transition
year, so that this study used the definition of midnight rule used throughout this report. For
the non-midnight period, I used the same dates one year earlier. I searched the Federal
Register database in Westlaw with a query designed to pick up all interpretative rules (and
interpretive rules), policy statements, and guidance documents during the relevant periods.
The search was as follows: TI(“INTERPRETATIVE RULE” “GUIDANCE DOCUMENT”
“POLICY STATEMENT” “INTERPRETIVE RULE” “INTERPRETATIVE RULE”
“GUIDANCE DOCUMENT” “POLICY STATEMENT” GUIDANCE) & date(aft oct. 20
xxxx) & date(bef jan. 20, xxxx).
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Duuring the 19922–93 midnighht period, agenncies under P
President GHW
W
Bush published
p
43 non-legislative
n
e rules, comprrising 27 guidaance documennts,
13 poliicy statementss, and 3 interrpretative rulees, as compareed with 27 noonlegislattive rules durring the samee period in thhe prior year,, comprising 18
guidan
nce documentss, 7 policy stattements, and 2 interpretativve rules. During
the 2000–01 midnigght period, aggencies under President Cliinton issued 102
non-legislative ruless, comprising 92 guidance documents, 10 policy stattements,, and 0 interpretative rules,, as compared with 80 non--legislative rulles
duringg the same peeriod in the prior
p
year, coomprising 70 guidance doccuments,, 9 policy stattements, and 1 interpretativve rule. Durinng the 2008–09
midnigght period, agencies
a
undeer President GW Bush iissued 72 noonlegislattive rules, com
mprising 69 guuidance docum
ments, 1 policyy statement annd
2 interrpretative rulees, as compareed with 64 noon-legislative rrules during tthe
same period
p
in the prior year, comprising 62 gguidance docuuments, 2 poliicy
statem
ments, and 0 in
nterpretative ruules.
TABLE 1:
1 NON-LEGISLATIVE MIIDNIGHT RU
ULES
102
1000
80
772
75
50
5
64
43
27
25
2
0
Interpretative
I
Rulees
GHW
Bush to
Clinton
(M)
GHW
G
Bush
B
to
Clinton
C
(C)
3
2
Clinton tto Clinton to GW
W Bush GW Bush
GW Bushh GW Bush to O
Obama to Obama
(C)
(M)
(M
M)
(C)
0
1
2
0
Policy
P
Statements
13
7
10
9
1
2
Guidance
G
Documents
27
18
92
70
669
62
Th
he issuance of executive orders also increases duuring midnigght
periods.29 One CRS
S report on preesidential trannsitions found that “Presidennts
w succeeded
d by a memberr of the other party signed ‘nearly six adddiwho were
tional orders . . . in the last montth of their terrm, nearly douuble the averaage
29.
For a disclaim
mer concerning the data reported hhere, see supra noote 4.
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level.’ ”30 President GW Bush issued 10 executive orders after Election Day
2008, out of a total of 280 for his presidency.31 His usual pace would have
produced only 7.7 executive orders during the post-election period. Since
1977, the highest number of executive orders issued between the election
and leaving office was by President Carter, who issued 36 executive orders
after Election Day 1980, compared to 319 during his 4 years in office. This
means that Carter issued executive orders at double the rate after the 1980
election as he had before, which is consistent with his then record-setting
regulatory activity, as indicated by pages published in the Federal Register.
However, 10 of these orders were issued on his last day in office to carry out
his agreement with the Government of Iran to free 52 Americans taken
hostage at the U.S. Embassy in Tehran.32 President GHW Bush issued 14
executive orders after Election Day 1992, out of a total of 165 for his 4 years
in office. At the rate for his entire presidency, Bush would have been
expected to issue 8.8 executive orders during the 72 days after the election,
or more than a third fewer than he actually issued. The increase in President
Clinton’s rate of issuing executive orders was similar to Carter’s. Clinton
issued twenty-two executive orders after the 2000 election, out of 363 in
total for his 8-year presidency. Once again this represents a more than
doubling of the rate of issuing executive orders as compared with his
administration’s term as a whole. Had he maintained his previous rate, he
would have issued between 9 and 10 executive orders after the election.
30.
L. ELAINE HALCHIN, CONG. RESEARCH SERV., RL34722, PRESIDENTIAL
TRANSITIONS: ISSUES INVOLVING OUTGOING AND INCOMING ADMINISTRATIONS 13 (2008)
(alteration in original), available at http://www.usdoj.gov/pardon/ (quoting Kenneth R.
Mayer, Executive Orders and Presidential Power, 61 J. POL. 445, 457 (1999)). In an article by
William Howell and Kenneth Mayer, the authors perform a more qualitative analysis of the
increased use of Executive Orders at the end of presidencies. William G. Howell & Kenneth
Mayer, The Last One Hundred Days, 35 PRESIDENTIAL STUD. Q. 533, 538–40 (2005).
31.
The data for this discussion of Executive Orders is from the American Presidency
Project’s list of Executive Orders. John T. Wooley & Gerhard Peters, Executive Orders, THE
AMERICAN PRESIDENCY PROJECT, http://www.presidency.ucsb.edu/executive_orders.php
(last visited Oct. 21, 2012).
32.
Id. For a discussion of this episode, including President Carter’s actions as he left
office, see Nancy Amoury Combs, Carter, Reagan, and Khomeini: Presidential Transitions and
International Law, 52 HASTINGS L.J. 303 (2001).
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TABBLE 2: EXEC
CUTIVE ORDE
ERS ISSUED
4000
3500
3000
2500
2000
1500
1000
500
0
Carter
GHW Bush
Clinton
GW Bush
Term
T
Total
319
165
363
280
Post
P Election Periood
36
14
22
10
Expected
E
18
8.8
9.5
7.7
n addition to issuing midnight rules andd other rule-llike documennts,
In
administrations takee other action
ns very late inn their terms that raise queestions concerning timing. The most widelly-known exaample involvves
which includes grants of paarexercisses of the Preesident’s clemeency power, w
dons, sentence
s
reduuctions and coommutations, remission of ffines, and othher
3
forms of clemency.33
Going backk to Presidentt Truman, daata published by
the Deepartment of Justice reveall that except ffor President Johnson, presidents have used theeir clemency power at a hhigher rate duuring their finnal
m
in officce than durin
ng other perio ds of their addministrationss.34
four months
The in
ncreases rangee from relativvely small, succh as Trumann’s increase froom
twentyy-two per mon
nth to twenty--five per monnth during thee midnight period, to dramatic incrreases, such ass Clinton’s inccrease from tw
wo per month to
33.
The pardon power is granted in
i the United Staates Constitutionn. U.S. CONST. aart.
c 1 (“[H]e shall have Power to grant Reprieves annd Pardons for O
Offenses against tthe
II, § 2, cl.
United States, except in Cases of Impeacchment.”).
t
(citing Officce of the Pardon A
Attorney, U.S. DEPP’T
34.
HALCHIN, suppra note 30, at 9 tbl.1
E, http://www.usd
doj.gov/pardon/ (last visited Jan. 7, 2012). An inccoming administtraJUSTICE
tion can
nnot undo the exeercise of this pow
wer once the docuuments signifyingg the exercise of tthe
power have
h
been deliverred to their inten
nded recipient. In re De Puy, 7 F
F. Cas. 506, 509–5511
(S.D.N..Y. 1869) (explain
ning that “[t]he law
l undoubtedly is, that when a ppardon is compleete,
there is no power to revvoke it,” but that a pardon is not vvalid until deliveery and is subjectt to
revocatiion until deliveryy occurs).
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sixty-five per month during his final four months in office.35 For whatever
reason, presidents tend to grant the bulk of their pardons and clemencies at
the end of their time in office.
Another category of midnight activity comprises personnel decisions.
One common late-term action taken by outgoing administrations is converting
the positions of political appointees to career status; this is referred to as
“burrowing in” or “burrowing.”36 Nina Mendelson reports the magnitude of
this practice as follows: “In the last two years of the Clinton administration,
one hundred political appointees moved to civil service positions . . . . In
the administration of President George H.W. Bush, approximately 160
individuals made such career moves.”37 There are legal requirements that
must be followed to do this, and according to the Government Accountability Office, these requirements are often not followed.38 Burrowing has
raised alarms in Congress, but on at least one occasion, an official of an
outgoing administration justified burrowing as a way to ensure continuity
of leadership through the transition in the especially sensitive area of national security: “In a January 2008 report to the [Department of Homeland
Security (DHS)] Secretary on the transition, the Homeland Security Advisory Council recommended that the department ‘consider current political
appointees with highly specialized and needed skills for appropriate career
positions.’ ”39
35.
HALCHIN, supra note 30, at 9 tbl.1 (citing data from United States Department of
Justice, Office of the Pardon Attorney). President George W. Bush’s data, not included in
the CRS report because the report was issued before GW Bush left office, show a dramatic
increase in percentage with a comparatively small number of exercises of the clemency
power. GW Bush averaged fewer than 2 pardons and clemencies per month during the nonmidnight period and 8 pardons per month during his final four months in office. See Pardons
Granted by President George W. Bush (2001-2009), U.S. DEP’T JUSTICE, http://www.justice.gov/
pardon/bushpardon-grants.htm (last visited Dec. 31, 2012).
36.
See BARBARA L. SCHWEMLE, CONG. RESEARCH SERV., RL34706, FEDERAL
PERSONNEL: CONVERSION OF EMPLOYEES FROM APPOINTED (NONCAREER) POSITIONS TO
CAREER POSITIONS IN THE EXECUTIVE BRANCH 1–2 (2008); see also Mendelson, supra note
24 at 559–61.
37.
Mendelson, supra note 24, at 563 n.27 (citing U.S. GEN. ACCOUNTING OFFICE,
GAO/GGD-02-326, REPORT TO CONGRESSIONAL REQUESTERS: PERSONNEL PRACTICES:
CAREER AND OTHER APPOINTMENTS OF FORMER POLITICAL APPOINTEES, OCTOBER
1998–APRIL 2001 2 (2002) [hereinafter GAO, 1998–2001 Personnel Practices]; U.S. GEN.
ACCOUNTING OFFICE, GAO/GGD-96-2, REPORT TO THE HONORABLE PATRICIA
SCHROEDER, HOUSE OF REPRESENTATIVES: PERSONNEL PRACTICES: CAREER
APPOINTMENTS OF LEGISLATIVE, WHITE HOUSE, AND POLITICAL APPOINTEES 5 (1995)).
38.
See U.S. GOV’T ACCOUNTABILITY OFFICE, GAO-06-381, PERSONNEL
PRACTICES: CONVERSIONS OF EMPLOYEES FROM NONCAREER TO CAREER POSITIONS MAY
2001–APRIL 2005 4–5 (2006); see also L. ELAINE HALCHIN, CONG. RESEARCH SERV.,
RS20730, PRESIDENTIAL TRANSITIONS AND ADMINISTRATIVE ACTIONS CRS-2 (2001).
39.
BARBARA L. SCHWEMLE, CONG. RESEARCH SERV., RL34706, FEDERAL
PERSONNEL: CONVERSION OF EMPLOYEES FROM APPOINTED (NONCAREER) POSITIONS TO
CAREER POSITIONS IN THE EXECUTIVE BRANCH 9 (2008) (quoting HOMELAND SECURITY
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In addition to conversions from political to career status, outgoing officials make important appointments and promotions in the career service.40
Mendelson acknowledges that outgoing administrations must fill positions
to keep the government operating properly, but she concludes that some
personnel decisions are made to “embed people with particular ideological
or programmatic commitments . . . .”41 This, she says, “seems to increase
the prospect that a new President will face a resistant—even subversive—
bureaucracy.”42
There are many more actions that presidents have taken as they leave
office, including actions that protect federal land from development under
various programs.43 While these actions are often significant and sometimes
irrevocable (or not easily revoked), they do not warrant separate sustained
attention in this Article because they do not involve important policy commitments. They often elicit criticisms similar to those leveled at midnight
rulemaking: they are hastily done, without adequate input from affected
interests, and are contrary to principles of democracy and accountability.
The field of international law and relations presents special issues concerning midnight actions, and these are not considered in this Article.44
In sum, the midnight regulation phenomenon is real and includes the
production of midnight rules and other actions by outgoing administrations.
In the final quarter of each administration, the volume of regulatory activity
increases, including increases in agency rulemaking, issuance of agency
guidance documents and other non-legislative rules, an increase in the
issuance of executive orders, an increase in the use of the President’s pardon
power, and an increase in the movement of politically appointed personnel
to career positions.
ADVISORY COUNCIL, U.S. DEPARTMENT OF HOMELAND SECURITY, REPORT OF THE
ADMINISTRATION TRANSITION TASK FORCE 6 (2008) (footnote omitted)).
40.
See Mendelson, supra note 24, at 606.
41.
Id. at 610.
42.
Id. at 612.
43.
Perhaps the most famous episode in this area is President Grover Cleveland’s
midnight designation of twenty-one million acres of federal land as forest reserve to protect
it from logging. Congress passed legislation overriding the designation, but Cleveland used
his pocket veto against that legislation. The matter was not cleared up until after Cleveland’s
successor took office. See Combs, supra note 32, at 331–32. President Clinton designated
numerous national monuments, and expanded the boundaries of existing monuments, in his
last year in office, including several in November 2000, and January 2001, after having
designated none in his first seven years in office. See Beermann, supra note 10, at 973–76.
This designation provides even greater protection than inclusion of the land in a national
park or forest.
44.
See generally Combs, supra note 32.
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II. NORMATIVE ISSUES SURROUNDING MIDNIGHT RULEMAKING
Since the phenomenon was first widely discussed after the publication
of Cochran’s study, midnight rulemaking has consistently provoked negative
reactions in the media, in government, and among commentators. This Part
asks why. Looking at the midnight rulemaking phenomenon from a normative perspective involves investigating why it occurs and asking whether
there are categories of midnight rules that present special normative concerns not shared with other categories of such rules. The first Section looks
at the political background of midnight rulemaking as part of the effort to
discern a basis to construct a normative critique. The second Section lists
the normative arguments that have been or could be made against midnight
rulemaking and responses to those arguments. The third Section offers
some conclusions on these aspects of this Report’s investigation.
Many of the interviewees who were consulted for this Article shared a
basic understanding of the nature of the midnight rulemaking phenomenon.
In the view of most of the interviewees, midnight rulemaking results mainly
from a rush to finish pending tasks and perhaps add a few tasks that might
not have been performed but for the impending takeover by an administration with different policy views. The interviewees by and large did not see
midnight rulemaking as an effort to sabotage the incoming administration
or illegitimately project the outgoing administration’s policy into the future
in contravention of the apparent will of the electorate. These views are
discussed further below.
A. Political Background of Midnight Rules
To understand midnight rulemaking, and why it has been so widely
criticized, it is important to construct a picture of the political background
that leads to midnight rulemaking. The political background might also
help evaluate whether midnight rules are likely to suffer from the quality
concerns that some people have about them.
As discussed in my prior work, the increased output of agencies at the
end of administrations can be thought of as arising largely from three overlapping but distinct phenomena—namely, hurrying, waiting, and delay.45
1. Hurrying
“Hurrying” is the urge of an outgoing administration to get as much
done as possible at the end of the term. Outgoing administrations may
hurry not only because they need to finish tasks before the impending
deadline, but also because they want to enact as many of their policies into
45.
See generally Beermann, supra note 10.
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law as possible before an incoming administration with different views takes
office, perhaps fearing that the incoming administration’s policies will produce inferior results.46
The need to hurry to finish rules, even those that may not be particularly controversial, may arise, in part, from the tendency for rulemaking to
slow down at the beginning of a new administration47 while the incoming
administration puts its appointees in place, a process that seems to be taking
longer in recent transitions.48 This delay at the outset of a new administration may now seem inevitable given the strategies that incoming
administrations have adopted to deal with the problem of midnight rulemaking. Further, because all of the procedural steps and substantive
analyses required in rulemaking take a long time, it should not be surprising
that much rulemaking is completed very late in each administration’s term,
when officials hurry to finish work on rules that began earlier in the term.49
Agency staff may also face the real possibility that the new administration
will place a low priority on their pending rules and may never complete
work on them, which also leads to hurrying to finish before the transition.
46.
As William Howell and Kenneth Mayer explain, at the end of a term, especially
when the new President is of a different party, outgoing Presidents act to extend their
policies into the future. See Howell & Mayer, supra note 30.
47.
See O’Connell, supra note 16, at 501 (“[T]he first year of an administration is
associated (in a statistically significant manner) with fewer rulemakings.”). O’Connell
reports that rulemakings that spanned more than one administration took, on average, more
than twice as long as rulemakings that were completed during one administration. See id. at
514. Of course, as O’Connell recognizes, it’s unclear which factor is the primary cause—due
to the passage of time, a long rulemaking process is likely to span two administrations, and a
rulemaking that spans two administrations is likely to take longer due to the slower pace of
regulatory activity at the beginning of administrations. See id.
48.
Anne Joseph O’Connell reports that on average it took Presidents Clinton and
GW Bush more than six months to staff Senate-approved positions in cabinet departments
and executive agencies. ANNE JOSEPH O’CONNELL, CTR. FOR AM. PROGRESS, WAITING
FOR LEADERSHIP: PRESIDENT OBAMA’S RECORD IN STAFFING KEY AGENCY POSITIONS
AND HOW TO IMPROVE THE APPOINTMENTS PROCESS 10 fig.5 (2010). O’Connell reports
that “the Obama Administration had in place 64.4% of Senate-confirmed executive agency
positions after one year,” compared to 86.4% in the Reagan administration, 80.1% in the
GHW Bush administration, 69.8% in the Clinton administration, and 73.8% in the GW
Bush administration. Id. at 2.
49.
O’Connell characterizes the data as follows:
Cabinet departments under President Reagan and President George W. Bush and
all types of agencies under President George H.W. Bush completed more rulemakings in the final year than in any previous year of those Administrations.
President Clinton’s cabinet departments, executive agencies, and independent
agencies, and President Reagan’s executive and independent agencies, all as
groups, also increased their final actions in the final year from the preceding year.
O’Connell, supra note 16 at 503.
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Hurrying occasionally involves initiatives that are started and completed very late in an administration’s term, not simply to finish what’s already
on the agenda, but to do more to project the administration’s policies into
the future. An outgoing administration could conceivably initiate rulemakings to promulgate rules quickly before the end of the term. Although it
is unlikely that the volume of such rules would be very high, this might be
the type of midnight rule that would elicit condemnation as illegitimate and
possibly of lower-than-normal quality.
Hurrying at the end of a term gives rise to the concern that rules issued
during the midnight period will be of lower quality than rules issued at
other times. There is some evidence that OIRA review is shortened during
the midnight period,50 and there are suggestions that some rules are rushed
from proposal to completion near the end of Presidents’ terms.51 While the
evidence supports the former claim, the latter suggestion lacks substantiation.
As discussed above, O’Connell’s analysis of her data for her report on
the duration of rulemakings suggests that generally, midnight rules are
considered for a longer period of time than non-midnight rules, although
there is a slight increase in relatively short rulemakings (180 days or less)
among rules finalized during the midnight period.52 An example of a midnight rule that went from proposal to promulgation very quickly involves a
50.
See Patrick A. McLaughlin, Empirical Tests for Midnight Regulations and Their Effect
on OIRA Review Time, (Mercatus Ctr., George Mason Univ., Working Paper No. 08-40,
2008), available at http://mercatus.org/sites/default/files/publication/WPPDF_Empirical_
Tests_for_Midnight_Regulations.pdf (concluding that the number of significant rules
reviewed during midnight periods increases and the time OIRA spends reviewing them
during midnight periods decreases); JERRY BRITO & VERONIQUE DE RUGY, FOR WHOM
THE BELL TOLLS: THE MIDNIGHT REGULATION PHENOMENON 13–14 (Mercatus Policy
Series, Policy Primer No. 9, 2008) (discussing implications of McLaughlin’s study). REECE
RUSHING, RICK MELBERTH & MATT MADIA, CTR. FOR AM. PROGRESS & OMB WATCH,
AFTER MIDNIGHT: THE BUSH LEGACY OF DEREGULATION AND WHAT OBAMA CAN DO
(2009). This OMB Watch report states that in the 2008–2009 transition, OIRA review was
very short in some cases:
OIRA spent an average of 61 days reviewing regulations in 2008, but dispensed
with many of Bush’s Midnight Regulations far quicker. OIRA reviewed a proposed draft of the Health and Human Services Department’s provider conscience
regulation in just hours, and reviewed the final regulation in 11 days. OIRA approved the Interior Department’s oil shale leasing regulation after only four days.
Id. at 4.
51.
For example, Anne Joseph O’Connell cites a rule on Oil Shale Management issued
on November 18, 2008, as having been issued just four months after it had been proposed.
O’Connell, supra note 16, at 472 n.3 (citing Oil Shale Management—General, 73 Fed. Reg.
69,414 (Nov. 18, 2008) (to be codified at 43 C.F.R. pts. 3900, 3910, 3920, 3930).
52.
See O’Connell, supra note 16, at 517 tbl.1. See also id. at 519 (“There is, however,
still a quickening in the rulemaking process in the midnight quarter.”).
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regulation governing inter-agency cooperation under the Endangered Species Act.53 This rule was proposed on August 15, 2008, with a 30-day
comment period.54 The comment period was extended for an additional 30
days55 and then the final rule was promulgated with minor modifications on
December 16, 2008, only 4 months after the initial proposal.56
Another example of a relatively short process for promulgating an important rule involves the Clinton administration’s midnight rule on air
conditioner and heat pump efficiency. This rule was proposed on October 5,
2000,57 and promulgated as a final rule in the Federal Register on January
22, 2001,58 after a sixty-day comment period and a public hearing held a
little less than a month after the Notice of Proposed Rulemaking (NPRM)
was issued. This was a complex and lengthy rule that Susan Dudley says,
“hurtled through the regulatory process at lightning speed.”59 However, as
with many rules, including midnight rules, the regulatory process did not
begin with the issuance of the NPRM. In fact, this rule had a lengthy procedural history that included a congressionally-mandated 1994 deadline and
then, after that deadline was missed, a 1995 congressionally-mandated delay,
a conference on the issues in 1998, and an Advance Notice of Proposed
Rulemaking issued in 1999.60
53.
Interagency Cooperation Under the Endangered Species Act, 73 Fed. Reg. 76,272
(Dec. 16, 2008) (to be codified at 50 C.F.R. pt. 402).
54.
Interagency Cooperation Under the Endangered Species Act, 73 Fed. Reg. 47,868
(proposed Aug. 15, 2008) (to be codified at 50 C.F.R. pt. 402).
55.
Interagency Cooperation Under the Endangered Species Act, 73 Fed. Reg. 52,942
(proposed Sept. 12, 2008) (to be codified at 50 C.F.R. pt. 402).
56.
Interagency Cooperation Under the Endangered Species Act, 73 Fed. Reg. at
76,272. A partial impetus for this rule was apparently a 2004 GAO Report concluding that
certain aspects of interagency consultation under the Endangered Species Act needed
clarification. See Interagency Cooperation Under the Endangered Species Act, 73 Fed. Reg.
at 47,869. There is nothing in the record that explains why the administration waited until
the midnight period to promulgate the revisions. Another example of a rushed regulatory
process is the August 2008 proposal concerning OSHA risk assessment. See infra note 148.
57.
Energy Conservation Program for Consumer Products: Central Air Conditioners
and Heat Pumps Energy Conservation Standards, 65 Fed. Reg. 59,590 (proposed Oct. 5,
2000) (to be codified at 10 C.F.R. pt. 430).
58.
Energy Conservation Program for Consumer Products: Central Air Conditioners
and Heat Pumps Energy Conservation Standards, 66 Fed. Reg. 7170 (Jan. 22, 2001) (to be
codified at 10 C.F.R. pt. 430).
59.
See Susan E. Dudley, Midnight Regulation at All-Time High, HEARTLAND
INSTITUTE (March 1, 2001), http://heartland.org/policy-documents/midnight-regulationsall-time-high, quoted in Howell & Mayer, supra note 46, at 551. Dudley states that the rule
was issued “[o]ver the objections of other administration officials, and contrary to many
public comments . . . .” Id.
60.
For the complete history of this regulation, see Natural Resources Defense Council v.
Abraham, 355 F.3d 179, 188–91 (2d Cir. 2004), discussed infra Section IV.B.2.b. The Abraham
decision rejected the GW Bush administration’s efforts to rescind the rule promulgated in
the waning days of the Clinton administration. Id. at 206.
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However, it appears that short regulatory processes are the exception
rather than the rule, even with regard to midnight rules.61 The published
scholarly articles and media reports criticizing midnight rulemaking cite
only a few examples of rushed rules. One article cites the GW Bush administration’s midnight rule on shale oil development as having been proposed
only four months before it was finalized.62 While it is true that the NPRM
was issued on July 23, 2008, slightly less than four months before the final
rule, an Advance NPRM had been issued in August 200663 with another
notice extending the comment period issued in September 2006.64 The
agency also held “listening sessions” with representatives of governors of
affected states in 2006 and 2007.65 Thus, this rule had been under
consideration for more than two years before it was issued, hardly a lastminute rush job.
There are reasons to believe that hurrying is unlikely to result in rules
of substantially lower quality than rules issued during other periods. For
one, attention to any individual rule during the long rulemaking process is
likely to be episodic. In this regard, Sally Katzen, OIRA Administrator
during the final days of the Clinton administration, reported in an
interview that during the midnight period of that administration (which
produced a high volume of Midnight Rules), the administration did not
rush rules through, but rather performed multiple steps simultaneously that
at other times would have been performed seriatim.66 Each rule is likely to
61.
OMB Watch claims that comment periods were shortened during the 2008–2009
midnight period:
The administration proposed a handful of rules between July and September 2008
that it wanted to finalize by year’s end. Agencies allowed only 30 days for public
comment for several of those rules. (The public comment period usually lasts 60
days.) . . . In October, the Interior Department proposed stripping Congress of its
power to prohibit mining on federal lands in emergency situations—a power that
Congress had used in June to prohibit uranium mine leasing near the Grand Canyon. Interior allowed only 15 days for public comment on the rule. An Interior
Department official defended the shortened comment period, saying the public
already had been given a chance to comment on an earlier draft of the rule that
was released in 1991.
RUSHING, MELBERTH & MADIA, supra note 50, at 4–5 (footnote omitted).
62.
See O’Connell, supra note 16, at 472.
63.
Commercial Oil Shale Leasing Program, 71 Fed. Reg. 50,378 (proposed Aug. 25,
2006) (to be codified at 43 C.F.R. pt. 3900).
64.
Commercial Oil Shale Leasing Program 71 Fed. Reg. 56,085 (Sept. 26, 2006) (to
be codified at 43 C.F.R. pt. 3900).
65.
Oil Shale Management—General, 73 Fed. Reg. 69,414, 69,415 (Nov. 18, 2008) (to
be codified at 43 C.F.R. pts. 3900, 3910, 3920, 3930).
66.
Telephone Interview with Sally Katzen, former Administrator of OIRA and
current Senior Advisor, Podesta Group, Government Relations and Public Relations Professionals (Nov. 3, 2011).
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receive attention at particular moments and then get passed along to the
next step, so the question isn’t how long the rule has been pending, but
rather, how much attention the rule received during the time it was under
consideration. Further, even during non-midnight periods, many rules must
be rushed through the process to meet statutory and other deadlines. Moreover, judicial review ensures that agencies cannot relax quality standards to
an extent that survival on judicial review is thrown into question.
Despite these reasons for questioning whether midnight rules are actually rushed through, O’Connell suggests that the timing of rulemaking
activity may make it more likely that the agency’s ultimate decision is found
“arbitrary and capricious.”67 She raises this possibility with regard to midnight rules actually issued and to agency withdrawal of rules shortly after a
new President takes office.68 O’Connell apparently believes that courts are
likely to be more suspicious of agency action taken during the midnight
period and at the outset of an administration, perhaps due to the increased
role that politics may play at such times.
2. Delay
The second general category of reasons that rulemaking might increase
at the end of the President’s term is “delay.” Delay is related, in many instances, to the factors that produce hurrying. The production of rules may
be delayed by factors both internal and external to the administration.
Delay includes apparently innocuous procrastination, when other priorities
make particular rulemaking proceedings seem less urgent until the deadline
of presidential transition approaches. The intrusion of other priorities may
have led to delays, such as delays in rulemaking that resulted from the need
for multiple agencies to respond to regulatory issues that arose in the wake
of the attacks of September 11, 2001.69 There are also obvious cases of externally imposed delay, for example, when Congress (via appropriations
riders) prohibited the Department of Labor from issuing its ergonomics
rule until the final year of Clinton’s term.70 The rule on efficiency of air
67.
See O’Connell, supra note 48, at 526–27 (citing Jacob E. Gersen & Anne Joseph
O’Connell, Hiding in Plain Sight? Timing and Transparency in the Administrative State, 76 U.
CHI. L. REV. 1157, 1201–02 (2009)).
68.
See id.
69.
See Pub. Citizen Health Research Grp. v. Chao, 314 F.3d 143, 159 (3d Cir. 2002)
(describing OSHA’s reliance on need to focus attention on September 11 attacks as one
reason for delay in promulgating rule).
70.
See Beermann, supra note 10, at 960–61 (discussing appropriations riders that
made it impossible for the Department of Labor to issue its ergonomics rule until the final
year of the Clinton administration). Appropriations riders also affected the timing of rules
related to mining during the Clinton administration. See Andrew P. Morriss, Roger E.
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conditioners and heat pumps at issue in Abraham was also delayed by Congress during the Clinton administration.71 Judicial decisions requiring
attention to one rule may divert resources away from others.
Delay in completing rulemakings also results from factors built into the
rulemaking process. As mentioned above, at the outset of a new administration, there may be delays in putting key personnel in place to oversee the
rulemaking process. However, the effects of this should be minimal in the
eighth year of an administration, when midnight rulemaking usually becomes an issue. By the administration’s final year, complex analytic and
procedural requirements are likely to contribute much more to lengthy
rulemaking processes than personnel vacancies. If a rule is politically controversial and if interest groups are arrayed in various positions concerning
the agency’s rulemaking plans, time is needed for the agency to arrive at the
best rule that is also politically tenable.
3. Waiting
The final general political explanation for midnight rulemaking is
“waiting.” Waiting involves an outgoing administration waiting until the
midnight period, usually so that rules can be promulgated after the election
when political accountability is lower. To some, this is viewed as the most
problematic sort of midnight rulemaking, because it seems to exacerbate
accountability problems inherent in the administrative state. However,
there are difficulties in and disincentives to waiting that make it somewhat
less likely to occur than it might be assumed. The main reason that waiting
is not likely to explain midnight rulemaking is the reality that virtually
every midnight rule has been publicly proposed well before the election.72
Meiners & Andrew Dorchak, Between a Rock and a Hard Place: Politics, Midnight Regulations
and Mining, 55 ADMIN. L. REV. 551, 580–83 (2003).
71.
See Natural Resources Defense Council v. Abraham, 355 F.3d 179, 188–91 (2d Cir.
2004).
72.
Amy Goldstein, ‘Last-Minute’ Spin on Regulatory Rite; Bush Review of
Clinton Initiatives Is Bid to Reshape Rules, Wash. Post, June 9, 2001, at A1, quoted in
Jim Rossi, Bargaining in the Shadow of Administrative Procedure: The Public Interest in
Rulemaking Settlement, 51 Duke L.J. 1015, 1039 n.91 (2001):
[V]irtually all the regulations finished by federal agencies shortly before Clinton
left office had been developed over years, according to government documents,
outside policy analysts, and officials of the Bush and Clinton administrations.
Some had been delayed by lawsuits or because Republican-led Congresses of the
mid- to late-1990s had explicitly forbidden federal agencies to work on them.
Moreover, the regulations completed during Clinton’s final weeks in office were in
step with a brisk pace of regulatory work throughout his two terms—and with a
longstanding practice in which presidents of both political parties have issued
many regulations just before they departed.
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As Professor Jim Rossi has stated, “Midnight Regulations often reflect the
culmination of a lengthy rulemaking process, a process that is sometimes
held up against the agency’s wishes for political or budgetary reasons.”73
There are not many instances of rules proposed just before or even after the
election. Thus, the outgoing administration’s intentions are normally known
to the public well before the election.
There are also strong disincentives to waiting. For one, waiting until after the election means that the political benefit enjoyed by the outgoing
administration will be muted. Further, waiting until after the election to
promulgate a rule reduces the value of the rule because it might be rescinded or revised by the new administration, and even if it is left intact, it might
not be enforced with enthusiasm by the incoming administration. Waiting
also entails a risk that the rulemaking process will not be completed before
the transition, and the rule will never be issued74 or will be issued so late
that the incoming administration can prevent it from being published in the
Federal Register.
Despite these reasons for suspecting that waiting is not a serious problem, critics have accused midnight rules of being timed to fly under the
political radar. For example, the outgoing Reagan administration was accused in a magazine article of holding off on some initiatives until after the
election so that regulatory actions were not held against Vice-President
GHW Bush in his campaign to be President.75 One example cited is a rule
promulgated soon after GHW Bush was elected that subjected transportation workers to random drug testing.76 The Teamsters Union had endorsed
Bush for President, and the article contains speculation from a trucking
lobbyist that the endorsement might have been affected if this rule had been
issued before the election.77 Scholars have accused the Clinton administration of waiting until after the election to promulgate controversial mining
regulations, although the authors’ only evidence was the timing of the issuance of the final rules.78
73.
Rossi, supra note 72, at 1039.
74.
This happened, for instance, with regard to the OSHA risk assessment proposed
rule, discussed above, that was ultimately withdrawn by the Obama administration. See infra
note 148.
75.
See Ronald A. Taylor et al., Here Come Ronald Reagan’s ‘Midnight’ Regs, U.S. NEWS
& WORLD REP., Nov. 28, 1988, at 11, cited in Anne Joseph O’Connell, supra note 16, at 479
n.29.
76.
Id. at 11. See Control of Drug Use in Mass Transportation Operations, 53 Fed.
Reg. 47,156 (Nov. 21, 1988) (to be codified at 49 C.F.R. pt. 653).
77.
Taylor et al., supra note 75, at 11.
78.
See, e.g., Morriss et al., supra note 70, at 583 (“Under the terms of the appropriations rider, BLM could have issued the regulation at any time after January 30, 2000 (i.e.,
the end of the required comment period following the NAS report under the appropriations
rider). Even allowing time for consideration of the comments that BLM received during the
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Waiting may be a more logical strategy when the incumbent hopes or
expects the next President to be of the same political party.79 It may help
explain the timing of deregulatory action in the midnight period of the GW
Bush administration. Given that the need for stricter regulation following
the 2008 financial crisis was a campaign issue, perhaps the outgoing Bush
administration did not want to burden Republican candidate John McCain
with the necessity of explaining why deregulation was still appropriate.
Waiting may also explain some presidential actions not involving rulemaking, especially pardons and related clemencies. Presidents tend to
increase the use of their pardon power during the midnight period, perhaps
to avoid political consequences for controversial pardons.80
4. Other Elements
There are additional elements of the political background of midnight
rulemaking that are not completely captured by the discussion of hurrying,
waiting, and delay that may help explain the phenomenon. One of the
common criticisms of midnight rulemaking is that it has negative effects on
presidential transitions in two ways. First, a high volume of midnight rules
diverts the incoming administration’s time and energy from moving forward
with its agenda to looking back on the midnight rulemaking of its predecessor. Due to concerns over the quality of midnight rules and the possibility
that midnight rules will undercut the new administration’s policies, incoming
final round of public comment, the almost eleven-month delay before the regulations issuance suggests that the post-election timing was not accidental.”).
79.
See Reagan Readies 451 Regulation Changes before Leaving Office, CHI. TRIB., Sept.
18, 1988, at 8.
80.
For example, after issuing very few pardons during most of his 8 years in office,
President Clinton exercised his power to grant pardons and clemency 176 times on his last
day in office. He also granted approximately 60 pardons in December 2000, for a total of
approximately 236 uses of the pardon power in the last two months of his presidency. President Clinton granted two of his most noteworthy pardons at the end of his term, to Mark
Rich, a wealthy democratic financier who was a fugitive from justice at the time the pardon
was granted, and to Patty Hearst, the granddaughter of the late media mogul William
Randolph Hearst, who was kidnapped by a revolutionary group with whom she participated
in an armed bank robbery, apparently of her own free will. The large number of end-of-term
pardons, and the fact that some of the pardons were controversial, supports the inference
that President Clinton waited to exercise the pardon power until he was about to leave office
so that neither he, nor his Vice-President, who was running to succeed him, would suffer
political heat due to the pardons. See Pardons Granted by President William J. Clinton (1993–
2001), U.S. DEP’T OF JUSTICE, http://www.justice.gov/pardon/clintonpardon_
grants.htm (last visited Nov. 29, 2012) (listing all of President Clinton’s pardons including
141 granted on the last day of his term). See also Amy Goldstein & Susan Schmidt, Clinton’s
Last-Day Clemency Benefits 176; List Includes Pardons for Cisneros, McDougal, Deutch and Roger
Clinton, WASH. POST, Jan. 21, 2001, at A1 (“Just two hours before surrendering the White
House, President Clinton gave parting gifts that lifted 176 Americans out of legal
trouble . . . .”).
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administrations have no real choice but to review midnight rules upon
taking office. If the volume of midnight rules is very high, this can constitute a serious impediment to a smooth transition. Second, politically
controversial midnight rules can place the incoming administration in an
awkward position, requiring it either to expend political capital to reverse
the prior administration’s rule, or to enforce a rule that is contrary to the
incoming administration’s political preferences and those of the electorate.
Some midnight rules involving internal governmental operations may
also have their own special political background, which may be related to
the transition issues discussed above. This category includes inter-agency
consultation requirements and rules involving enforcement of restrictions
on the use of federal funds. Midnight rules that change governing law in
these areas beg the question: why now and not years earlier so that these
new requirements would have governed the outgoing administration’s
conduct? Given enforcement discretion and discretion over the range of
intergovernmental consultation, it is difficult to imagine a good reason for
midnight rulemaking in these areas. In the consultation area, for example, if
consultation requirements are being increased, the outgoing administration
likely had sufficient discretion to engage in the consultations anyway, and
now wants to impose the requirements on its successor. Conversely, if
consultation requirements are being eased, the outgoing administration
probably had the discretion to simply ignore the input from the consultations it now wants to eliminate. Why not leave that determination to its
successor?
An example of a midnight rule involving consultation is a rule issued on
December 16, 2008, by the Departments of Commerce and the Interior,
governing consultations for certain projects under the Endangered Species
Act.81 This rule eliminated some consultations with habitat managers and
biological experts, and it prohibited global warming as a factor in some
remaining consultations.82 Being issued so late in the GW Bush administration meant that the earliest projects governed by the new consultation
requirements were likely to be undertaken by the Obama administration.
Without any explanation for why this consultation requirement was not
removed when projects by the GW Bush administration were undertaken,
the timing raises concerns.
Midnight rules governing the enforcement of restrictions on the use of
federal funds raise similar concerns. This is an area of great enforcement
discretion, and midnight rules here seem designed primarily to limit the
incoming administration’s options or force it to act to rescind the rule. An
81.
Interagency Cooperation Under the Endangered Species Act, 73 Fed. Reg. 76,272
(December 16, 2008) (to be codified at 50 C.F.R. pt. 402).
82.
Id. at 76,280, 76,282–83.
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example from the Clinton administration, which was technically not a midnight rule since it was issued in July 2000, involved the standards governing
enforcement of the statutory prohibition on federally-funded family planning clinics against using abortion as a method of family planning. The
Clinton administration had suspended the Reagan administration’s so-called
“gag rule” in February 1993, but did not promulgate a substitute until July
2000.83 Without a rule in place for more than seven years, the Clinton
administration operated in a legal limbo, perhaps unable to enforce the
statutory prohibition. Only when political transition was looming did the
administration find it desirable to promulgate a substitute regulation.
Another example, also related to abortion, raises similar timing concerns.
On December 19, 2008, the Department of Health and Human Services
promulgated a rule requiring recipients of federal health care funds to certify
that they would allow their employees to refuse to provide medical services
they find contrary to their moral or religious values.84 This new, controversial, funding requirement would be enforced by the incoming Obama
administration, which was likely to have different views on the subject.85
William Howell and Kenneth Mayer offer another political explanation
for midnight rulemaking and other midnight action by outgoing administrations. They argue that because a lame duck President’s political capital with
Congress is reduced, the President must act unilaterally to get anything
done.86 During the midnight period, Congress has no incentive to cooperate
with a President who will not be running again, especially when the incumbent’s party has just lost the White House. Howell and Mayer theorize that
during periods when the President is unlikely to convince Congress to enact
his priorities, he is more likely to act unilaterally through executive orders
and in ways that require cooperation only from within the executive branch,
such as agency rulemaking.87 Thus, midnight regulation might partly be the
result of the President’s inability to enact his policies legislatively.
When the incoming President is of a different political party than the
incumbent, another factor that may contribute to midnight rulemaking is
the desire of the outgoing administration to make the transition more difficult for the incoming administration. Dealing with midnight rulemaking is
83.
See Standards of Compliance for Abortion-Related Services in Family Planning
Service Projects, 65 Fed. Reg. 41,270 (July 3, 2000) (to be codified at 42 C.F.R. pt. 59).
84.
Ensuring That Department of Health and Human Services Funds Do Not Support Coercive or Discriminatory Policies or Practices, 73 Fed. Reg. 78,072 (Dec. 19, 2008)
(to be codified at 45 C.F.R. pt. 88).
85.
This rule was rescinded in part by the Obama administration. See Regulation for
the Enforcement of Federal Health Care Provider Conscience Protection Laws, 76 Fed. Reg.
9968 (Feb. 23, 2011).
86.
See Howell & Mayer, supra note 30, at 538–43.
87.
See id.
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time-consuming and politically costly. Given the familiar pattern of regulatory freezes, extensions of effective dates, withdrawals of rules proposed late
in outgoing administrations, and withdrawals from the Federal Register of
final but not-yet published rules, midnight rulemaking imposes known costs
on incoming administrations. Simply put, midnight rulemaking forces
administrations to look backward, even when looking back at midnight rules
may have negative political consequences, at the time when they would
much prefer to be moving forward on their own agendas.88
For example, in what is perhaps the most widely-reported instance of
an incoming administration revisiting a midnight rule, the GW Bush
administration faced serious public criticism when it delayed the effectiveness of a midnight rule reducing the acceptable level of arsenic in drinking
water.89 There was concern among senior officials in the incoming GW
Bush administration that this rule had been rushed through and that it
would be very expensive for many municipal water systems, especially in
western states. Due to these concerns, on the rule’s original effective date of
March 23, 2001, the EPA issued a notice delaying the effective date of the
rule for sixty days.90 This action provoked a substantial public outcry with
accusations that the new administration was rolling back important environmental protections. The GW Bush administration’s next step was for the
EPA to issue a notice of proposed rulemaking on April 23, 2001, to delay
the effective date of the rule for an additional nine months to allow further
study.91 The comment period was open for two weeks, and on May 22, 2001,
the EPA promulgated a rule delaying the effective date of the arsenic rule
for the nine months proposed.92 In the final rule delaying the effective date
88.
See Nina A. Mendelson, Quick off the Mark: Empowering the President-Elect, 103
NW. U. L. REV. COLLOQUY 464, 465–66 (2009); Morriss et al., supra note 70, at 557–578;
Jack M. Beermann & William P. Marshall, The Constitutional Law of Presidential Transitions,
84 N.C. L. REV. 1253, 1255 (2006).
89.
Arsenic and Clarifications to Compliance and New Source Contaminants Monitoring, 66 Fed. Reg. 6976 (Jan. 22, 2001) (to be codified at 40 C.F.R. pts. 9, 141, 142). See
BRITO & DE RUGY, supra note 50, at 5.
90.
Arsenic and Clarifications to Compliance and New Source Contaminants Monitoring: Delay of Effective Date, 66 Fed. Reg. 16,134 (Mar. 23, 2001) (to be codified at 40
C.F.R. pts. 9, 141, 142). The Notice contained the GW Bush administration’s typical reasons
for acting without notice and comment and with no delay in the effective date of the
action—namely, that it is exempt as a rule of procedure, that notice and comment would be
impracticable and contrary to the public interest, and that the imminence of the effective
date provides good cause for making the delay effective immediately.
91.
Arsenic and Clarifications to Compliance and New Source Contaminants Monitoring, 66 Fed. Reg. 20,580 (proposed Apr. 23, 2001) (to be codified at 40 C.F.R. pts. 9, 141,
142).
92.
Arsenic and Clarifications to Compliance and New Source Contaminants Monitoring: Delay of Effective Date, 66 Fed. Reg. 28,342 (May 22, 2001) (to be codified at 40
C.F.R. pts. 9, 141, 142).
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of the arsenic rule until February 2002, the EPA stated that the National
Science Foundation was studying the health issues related to arsenic levels
in drinking water and the National Drinking Water Advisory Council was
studying the compliance cost issues related to the rule. When the National
Science Foundation’s study supported the new standard,93 the EPA
announced that the rule would go into effect as promulgated.94
B. Normative Views of Midnight Rulemaking
Many people from different political perspectives react negatively to
the phenomenon of midnight rulemaking.95 Although the Constitution
provides for a fully-empowered administration to remain in office for more
than two months after the election, many observers, from both ends of the
political spectrum, find fault when outgoing administrations continue to
exercise all of their powers and indeed increase the pace at which they act
after the election. This is especially so when the people have chosen a new
President of a different party with a different regulatory philosophy. Midnight rulemaking has been criticized on many grounds ranging from
principled objections to increases in regulatory activity by administrations
as they leave office, to practical concerns over the quality of midnight rules.
This Part sets out and analyzes the major criticisms that have been leveled
at midnight rulemaking.96 The discussion begins with objections based on
principle and concludes with objections based on policy concerns. Many of
these objections overlap in obvious ways.
1. The Principled Objection: For many, it seems that the root of criticism of midnight regulation is the view that, on principle, the President and
agencies should not increase the pace of regulatory activity at the end of the
term and, if anything, should slow down after the election and leave major
decisions to the new President.
93.
See SUBCOMM. TO UPDATE THE 1999 ARSENIC IN DRINKING WATER REPORT,
ARSENIC IN DRINKING WATER: 2001 UPDATE (2001), available at http://www.nap.edu/
openbook/0309076293/html/R1.html. In fact, the National Science Foundation concluded
that even the Clinton administration had underestimated the negative health effects of
arsenic in drinking water. Id. at 14 (“The results of this subcommittee’s assessment . . .
suggest that the risks for bladder and lung cancer incidence are greater than the risk estimates on which EPA based its January 2001 pending rule.”). For further discussion of the
merits of the arsenic rule, see Special Report: The Arsenic Controversy, REGULATION 42 (2001),
available at http://www.cato.org/pubs/regulation/regv24n3/specialreport.pdf.
94.
See Press Release, EPA, EPA Announces Arsenic Standard for Drinking Water of
10 Parts per Billion (Oct. 31, 2001), available at http://yosemite1.epa.gov/opa/admpress.nsf/
b1ab9f485b098972852562e7004dc686/6d26c015b807156e85256af6007b9bed?OpenDocument.
95.
See O’Connell, supra, note 17, at 913 (noting that most commentary of midnight
regulation and crack-of-dawn activity has been disapproving).
96.
For a catalog of criticisms of midnight rulemaking, see BRITO & DE RUGY, supra
note 50, at 7–8.
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2. Projection of the Agenda: Perhaps the most important basis of the
principled objection to midnight rulemaking is the perception that the
outgoing administration is illegitimately attempting to project its agenda
beyond its constitutionally prescribed term.97 On this view, once an election
has intervened, the agenda of the incoming President should be paramount.
3. Accountability: Midnight rulemaking is often criticized because it
occurs during a period of reduced accountability. After the presidential
election, the incumbent President’s accountability is almost non-existent,
especially with regard to a two-term President who is extremely unlikely to
ever again stand for election to any position.
4. Democracy and Participation: Closely related to the accountability
objection is the argument that midnight rulemaking is contrary to principles
of democracy. Once the people have elected a President of an opposing
party, they have in effect rejected the outgoing President’s policies and have
opted for the policies of the incoming President, and it is undemocratic for
the outgoing President to continue to act in accordance with the policies
espoused by the losing party in the presidential election. The democracy
objection is stronger when the various steps of the rulemaking process that
allow for public input and influence are rushed to meet the Inauguration
Day deadline.
5. Political Motivations: Midnight rulemaking is sometimes criticized as
being overly political, done to score political points for the party that is
leaving office, cause political pain to the incoming President and the incoming President’s party and reward the outgoing President’s political allies.
While all regulatory action is political to some extent, the balance between
policy and political concerns is worse during the midnight period.
6. The “Unseemly” Objection: Midnight rulemaking has been criticized
as “unseemly” and tending to discredit the government and the regulatory
system as a whole.98 Because many people find midnight rulemaking distasteful, episodes every four or eight years of this conduct reduce people’s
respect for the law and government regulation.
97.
For example, Mendelson has stated that “the agency’s choice in the last few weeks
to proceed regardless of the new President’s views suggests an unsatisfied craving for
power.” Mendelson, supra note 24, at 564.
98.
See, e.g., Jay Cochran, Clinton’s “Cinderellas” Face Regulatory Midnight, USA TODAY,
Dec. 13, 2000, at 17A (“Respect for the law erodes when it changes for no other apparent
reason than the fact that an administration’s drop-dead date draws near.”), cited in O’Connell
supra note 16, at 527 n.179.
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7. The Transition Objection: Another objection to midnight rulemaking
is that it makes the transition between administrations difficult99 because it
distracts the incoming administration from its forward-looking agenda,
forces it to expend time and effort reexamining midnight rules, and forces
incoming administrations to incur political costs to revise or rescind midnight rules.
8. Midnight Rulemaking is Wasteful: Given that a substantial proportion of midnight rules are reexamined and many important ones will be
revised or rescinded, midnight rulemaking is wasteful.100 Resources could be
saved if outgoing administrations would coordinate their regulatory activity
with the incoming administration during the midnight period.
9. The Quality Objection: Midnight rules are criticized as likely to be
of lower quality than rules issued during non-midnight periods.
These criticisms of midnight rulemaking are far from universally
shared. In fact, in the interviews conducted for this Article, most of the
current and former government officials interviewed did not agree that
midnight rulemaking is a serious problem. These interviewees included
people from both major political parties who served during midnight periods or during the beginning of administrations. Their views included
answers to all of the criticisms of midnight rulemaking discussed above.
Further, many of the published criticisms of midnight rulemaking focus
more on the substance of the rules than their timing.
The defenders of midnight rulemaking begin from the premise that
there is nothing illegitimate when the President continues to govern
throughout the constitutionally-prescribed term, including the increased
volume of rulemaking during the so-called midnight period. Most of the
interviewees found hurrying to finish at the end of the administration an
inevitable and defensible feature of government and they did not see nefarious motives in the increased regulatory activity at the end of the term. The
defenders of midnight rulemaking find outgoing administrations’ desire to
project their agendas into the future as an expected feature of our political
system and conclude that incoming administrations have adequate tools to
deal with the problem.
99.
For a general look at presidential transitions, see Beermann & Marshall, supra note
88.
100.
See O’Connell, supra note 17, at 913–14. O’Connell poses two somewhat contradictory reasons why midnight rulemaking hurts social welfare. The first reason is that it is
wasteful because it imposes procedural costs on the new President or Congress when they act
to rescind it. The second reason is that even if a midnight rule is a good one from the social
welfare perspective, because it is a midnight rule, the incoming administration may reflexively act to rescind it, thus forgoing the social welfare benefits of the rule. Id.
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The accountability objection is met with the reply that virtually all
agency action completed during the midnight period had been on the
agenda for years. There is no evidence that administrations wait until after
the election to avoid accountability in a substantial number of cases. There
may also be a positive aspect to the reduced accountability that exists after
the presidential election, when Presidents, perhaps concerned with their
legacies, may take beneficial actions that interest group pressures might
have prevented before the election.
Defenders argue that the democracy objection may be met with the
rather formalistic response that the outgoing President was elected to serve
the complete four-year term and thus actions taken, even at the end, are
consistent with norms of democracy. There is also the more practical
response that the incoming administration has tools to deal with midnight
rules.
As is discussed further below, there are several replies to the charge that
midnight rules are excessively political. First, all rulemaking and other
regulatory activities are political to a certain extent, but even in the midnight period, most rulemaking is routine and driven by the same
considerations that motivate rulemaking during non-midnight periods.
Second, judicial review and normal analytic standards that apply to agency
action ensure that raw politics cannot displace the usual considerations that
govern agency action in all periods. Third, incoming administrations have
adequate tools to deal with ill-considered or unwise midnight rules.
As far as the charge that midnight rulemaking is “unseemly,” it would
not appear so if people understood that most midnight rulemaking is
routine and they were not influenced by sensationalized accounts of major
last-minute regulatory initiatives.
The defenders of midnight rulemaking can answer the transition-based
criticisms by observing that first, the problem is not really so bad, and
second, that with constant, ongoing political competition, outgoing administrations should not be expected to smooth the transition for a President of
the other political party.101 In fact, because so much regulatory activity, even
at the very end of an administration, is routine, driven by statutory
requirements and deadlines, and conducted by career officials, most midnight rulemaking is beneficial to the incoming administration if only
because without midnight rulemaking, the new administration would be
confronted with an enormous amount of work on which to catch up. This
would more seriously impede the transition than the relatively few controversial midnight rules that the incoming administration is likely to
reexamine upon taking office.
101.
See Beermann & Marshall, supra note 88, at 1267–68.
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Defenders can respond to the charge that midnight rulemaking is
wasteful by noting that only a very small number of midnight rules are
actually reversed by the new administration. Also, because most midnight
rulemaking is necessary to keep the government moving forward, it is no
more wasteful than rulemaking at any other time.
On the issue of personnel burrowing, despite the problems associated
with this practice, Mendelson concludes that personnel burrowing can have
positive effects that may be sufficient to justify at least some of its uses. She
sees the same benefits in some examples of midnight rulemaking, which she
refers to as “policy burrowing.” Her basic point is that policy burrowing can
fuel a healthy debate on issues that might not have been particularly salient
during the election campaign102 and that personnel burrowing can help
ensure a diversity of viewpoints within agencies so that policies are
genuinely tested by debate before they are adopted.103 Mendelson believes
that in both cases the quality and democratic legitimacy of agency action,
including rulemaking, can improve because the agency’s proposals will be
influenced by a greater diversity of viewpoints. Her view depends on her
conclusion that presidential elections do not necessarily mean that the
electorate has approved every policy espoused by the new President or his
party or rejected every policy espoused by the outgoing President or his
party.
The final issue is quality—are midnight rules of lower quality than
rules promulgated at other times? This is a difficult question to answer.
Some midnight rules are promulgated more quickly than rules in nonmidnight periods and some rulemaking steps, such as OIRA review, are
performed more quickly at midnight than at other times. It may be true that
rules promulgated in less of a rush would be of higher quality, but most
midnight rules are under consideration for a fairly long time and they go
through the usual steps. As noted in Section II.A.1, Katzen explained that
the rulemaking process was accelerated by performing multiple steps simultaneously rather than by skipping or truncating any of the normal steps for
promulgating rules. Judicial review and reexamination by the incoming
administration are adequate to deal with any small number of rules that
might have been rushed out too quickly.
102.
Mendelson, supra note 24, at 627. Mendelson cites the policy debates that occurred
in the early days of the GW Bush administration over the Clinton administration’s “roadless
areas rule” and the rule reducing the permissible level of arsenic in drinking water as debates
that benefited from the midnight timing of the rules. Id. at 619–32.
103.
See id. at 641–42.
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C. Summary
Based on the above analysis and the interviews I conducted in connection with this Report, it appears that midnight rulemaking predominantly
results from hurrying to complete work that has been pending since well
before the November election, which agency officials fear might be scuttled
or delayed by the transition. There is also a sense that outgoing administrations are motivated by a belief that their policies are superior to those of the
incoming administration and that this adds to the motivation to finish as
much as possible before the transition. There are no more than isolated
instances of delay (other than the common delay caused by the usual rigors
of the rulemaking process) and little evidence that waiting to avoid the
political consequences of rules is a widespread occurrence.
III. EVALUATING MIDNIGHT RULES
This Part of the Article discusses the quality of midnight rules. The
question is whether there is any reason to believe that midnight rules are
likely to be of lower quality than rules issued at other times. Performing
this analysis faces the virtually insurmountable problem of measuring the
quality of rules. It may be possible to identify qualitative problems with
some rules anecdotally, but there is no simple, agreed-upon metric for
determining the quality of agency rules. The quality of rules is likely to be
in the eye of the beholder, informed heavily by political views and policy
disagreements. One observer’s regulatory disaster may be another observer’s
great regulatory victory.
Without a direct measure of the quality of rules, some analysts have
employed surrogate measures that are plausibly linked to the quality of
rules. The two principal surrogates involve the length of time midnight
rules are under consideration and whether the rules are rescinded or
amended by the successor administration. These measures are undoubtedly
imprecise and possibly of little value. However, given the difficulty of
constructing more precise apolitical measures of quality, they may be the
best measures available. The first portion of this Part of the Article
discusses the published scholarship that attempts to measure the quality of
midnight rules.
The second portion of this Part discusses the results of the empirical
study of the durability of midnight rules that I conducted in conjunction
with preparing the Report upon which this Article is based. The study looks
at the OIRA-reviewed midnight rules of the last three transitions from one
party to the other and measures the likelihood that each administration’s
midnight rules would be revised or rescinded by the subsequent administration. The midnight periods are compared to the same periods on the
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calendar one year prior to the transition, as a control. The third portion of
this Part looks at the quality of midnight rules in a different way, by asking
whether certain categories of midnight rules are likely to suffer from the
normative defects that many observers find in midnight rulemaking
generally. In light of all of the published attacks on midnight rulemaking in
recent years, this Part analyzes whether some midnight rules should be
criticized even if it is generally very difficult to agree on a measure of
quality that would serve as a basis for criticizing the bulk of midnight rules.
This Part of the Article also summarizes interviews of government officials
and observers on the subject of midnight rulemaking.
A. Measuring the Quality of Midnight Rules
Midnight rulemaking has been under attack at least since 2001, when
Cochran published his quantitative look at the regulatory output of administrations as they left office. In addition to principled objections to
midnight rulemaking, there has been concern expressed that the quality of
midnight rules may be lower than the quality of rules issued without the
pressure of the firm deadline presented by the change in administrations.104
It is, however, very difficult to measure the quality of rules. Analysts’ views
on the quality of rules are likely to be colored by their politics.
In the interviews I conducted in late 2011 and early 2012 in connection
with the ACUS Report upon which this Article is based, I asked each interviewee105 whether they thought that midnight rules were of lower quality
than rules issued at other times. Most interviewees did not believe that
quality is a serious issue with regard to midnight rules. However, some
interviewees expressed concern that in some cases OIRA review was done
hastily and that some other rulemaking steps might have been rushed as
well. GW Bush administration officials did not find quality problems with
the EPA’s midnight rules, except for concerns about one rule that is
discussed below. One interviewee thought that there were many rushed
midnight rules in the GW Bush administration and that these rules were of
lower quality. At least one official involved in the OIRA review process
acknowledged that during the midnight period, OIRA may not go as deeply
into some issues as it would if it had more time. Although there was some
concern expressed that overly political rules without the usual basis in policy might be pushed through during the midnight period, the principal
concern expressed by interviewees from both inside and outside government was that the normal review process might be rushed and thus not as
effective as usual in preventing problematic rules from being issued. One
104.
See Loring & Roth, supra note 11, at 1448.
105.
See supra note * for a list of the interviewees with information on their experience
and affiliations.
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interviewee with lengthy experience in government stated that midnight
rulemaking is not as serious of a problem as it once was because the review
processes in place today are much better at preventing problematic rules
from being issued. Thus, although some concerns were expressed, there was
not a strong consensus that midnight rulemaking leads to lower quality
rules.
Due to the impossibility of constructing objective measures of the quality of rules, analysts have employed surrogate measures to attempt to shed
light on whether midnight rules are likely to be of lower quality than rules
issued at other times. The two primary surrogates employed are length of
time under consideration and durability. The premises underlying the use
of these as surrogate measures of quality are that lengthier consideration
means more thorough consideration, which means higher quality, and that a
durable rule is likely to be of higher quality than a rule that has been
amended or rescinded. These premises are obviously subject to serious
doubt. An administration can take its time and promulgate a low-quality
rule and can hurry and promulgate a high-quality rule. A rule might be
amended or rescinded because the subsequent administration disagrees with
value laden policy aspects of the rule, not because the rule was of low
quality. Thus, although these surrogates may be the best available, it is not
clear that they are strongly indicative of quality.
In terms of overall length of consideration, an analysis conducted for
this Article by O’Connell106 of her data reveals that, on average, midnight
rules are not under consideration for a shorter period of time than rules
issued in non-midnight periods.107 O’Connell looked at the 16,826 completed
rulemakings in her database (drawing from the Unified Agendas from the
fall of 1983 through the spring of 2010)108 where both the NPRM and final
action were issued between the start of the Reagan administration and the
end of the GW Bush administration. She labeled rulemakings that had their
final action between November 1 and January 20 of the final year of an
administration as a midnight rulemaking, a slightly different definition of
midnight rule than used in this Article.
The average duration of rulemakings that did not end in the midnight
period was 461.6 days. The average duration of rulemakings that did end in
106.
The author of this Article thanks Anne Joseph O’Connell for conducting this
analysis of her data especially for the report on which this Article is based.
107.
E-mail from Anne Joseph O’Connell, Professor, University of California, Berkeley, School of Law, to author (Dec. 29, 2011) (on file with author).
108.
The Unified Agenda is the list of all pending and planned regulatory and deregulatory action by federal agencies. It is published twice per year, in Spring and Fall. See
Current Regulatory Plan and the Unified Agenda of Regulatory and Deregulatory Actions, OFFICE
OF INFO. & REGULATORY AFFAIRS, http://www.reginfo.gov/public/do/eAgendaMain (last
visited Oct. 20, 2012).
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the midnight period was 487.7 days. The average duration of all these rulemakings was 462.8 days.109 This is not much of a difference and to the
extent there was a difference, rulemakings that ended in the midnight period were under consideration longer than non-midnight rules.
O’Connell then narrowed her database to rulemakings that started and
ended in the same administration. Among these rulemakings, the difference
in duration between midnight rules and non-midnight rules was more pronounced. Rulemakings that finished before the midnight period took 351.3
days on average, whereas rulemakings that finished in the midnight period
took 428.7 days on average. This pattern holds for every administration
going back to the Reagan administration.
O’Connell then checked her data to see whether there is an increase in
rules of very short duration during the midnight period. Of the nearly
17,000 final actions in her database, 4,664 of them (or about 25 percent)
took 180 or fewer days.110 Of those 4,664 processes, 4,448 finished outside
the midnight period and 216 finished within the midnight period. With 112
total quarters and four midnight quarters, equal distribution of these short
duration actions would produce about forty per quarter or 160 midnight
rules. This means that there were proportionally more short-duration
actions that ended during midnight periods (54 on average versus forty
expected) than during non-midnight periods, with a total of, at most, 56
additional short duration midnight rules since the Reagan administration
than would exist if all short duration completions were evenly distributed.
What does O’Connell’s analysis tell us about whether midnight rules
are rushed through the process as compared to rules issued at other times?
It appears that the data disprove the hypothesis that midnight rules are
rushed. The data make it appear that midnight rulemaking is much more
about completing work on rules that have long been under consideration
than it is about rushing new initiatives out the door before the transition.
The fact that rules issued during the midnight period were under consideration on average longer than other rules suggests that some of these rules
may have been of lower priority than other rules and that some of these
rules may have been more difficult to complete, perhaps because they were
complicated or controversial. This does not mean that there are no cases of
rushed midnight rules. In fact, the greater than expected results for rules
issued after being under consideration for fewer than 180 days during mid-
109.
See generally O’Connell, supra note 16, at 513–18 (providing more information on
duration of rulemaking proceedings).
110.
O’Connell notes that the Unified Agenda lumps all final actions into one category
whether they are rules or something else, so the data include completed proceedings that did
not produce rules.
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night periods suggests that there may be a slight tendency to rush a small
number of rules through the process.
Brito and de Rugy focused on one step of the process leading to rulemaking: review at OIRA.111 Their premise is that “[t]o the extent we believe
that regulatory review is beneficial, midnight regulations are problematic
because they undercut the benefits of the review process.”112 They fear that
at the end of administrations, “[i]f the number of regulations OIRA must
review goes up significantly and the man-hours and resources available to it
remain constant, we can expect the quality of review to suffer.”113 To prove
their point, Brito and de Rugy do not look at the actual duration of OIRA
review of individual regulations. Rather, they merely considered the overall
volume of rules.114
The principal pieces of circumstantial evidence that Brito and de Rugy
examined are the resources available to OIRA to conduct regulatory review
and the number of rules reviewed by OIRA. In their view, because OIRA
operates today with fewer resources than in the past115 and because those
resources are not augmented to help it cope with the flood of midnight
rules submitted for review, it is logical to conclude that “the amount of time
and attention OIRA devoted to each regulation reviewed [is] considerably
less during midnight periods.”116
To support their conclusion, Brito and de Rugy relied on a study conducted by Mercatus Center researcher Patrick A. McLaughlin.117 McLaughlin
conducted a detailed study of OIRA review during midnight periods, in
part, due to doubts that pages in the Federal Register is a good measure of
the volume of regulatory activity.118 McLaughlin’s study revealed an increase
in the number of economically significant119 rules submitted to OIRA for
111.
For an insider’s history of centralized review of regulations, see Jim Tozzi, OIRA’s
Formative Years: The Historical Record of Centralized Regulatory Review Preceding OIRA’s Founding, 63 ADMIN. L. REV. (SPECIAL EDITION) 37 (2011).
112.
Brito & de Rugy, supra note 15, at 183.
113.
Id.
114.
Id. at 186.
115.
Id. at 183–84 (“[I]n real terms, OIRA’s budget has decreased since its inception.”).
116.
Id. at 186. See also Patrick A. McLaughlin, The Consequences of Midnight Regulations
and Other Surges in Regulatory Activity, 147 PUB. CHOICE 395, 409 (2011) (finding that, on
average, review time was twenty-five days shorter during the midnight period).
117.
See McLaughlin, supra note 50.
118.
McLaughlin posits that the number of pages published in the Federal Register
may not reflect the actual volume of regulatory activity because of the possibility that deregulatory action and other non-regulatory documents may inflate the page total. McLaughlin
views the number of economically significant rules reviewed by OIRA as a potentially
superior measure of the actual volume of regulatory activity.
119.
Executive Order 12,866 section 3(f) defines as “significant” any regulatory action
predicted to “[h]ave an annual effect on the economy of $100 million or more or adversely
affect in a material way the economy, a sector of the economy, productivity, competition,
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review during midnight periods of about six regulations per month or about
7%.120 McLaughlin also found that the ratio of economically significant rules
to all regulations increased and that the increase is due to a higher number
of economically significant rules submitted, rather than a decrease in the
review of non-significant rules.121 McLaughlin also found a significant
decrease in the amount of time midnight rules are under review at OIRA:
“[W]hen controlling for the number of economically significant and significant rules as well as differences across administrations, the mean review
time decreased during the midnight period by an astonishing twenty-five
days. That is a 50 percent decrease relative to the mean review time over the
entire period.”122
McLaughlin acknowledges that it is not possible to draw the inference
that faster review at OIRA reduces the quality of rules. As he notes, we
don’t really know whether OIRA was operating at full capacity at any time
and whether shorter total time under review actually indicates reduced
scrutiny. As he states, “there is no way of knowing whether a rule that was
‘under review’ by OIRA for twenty days was actually being worked on for
twenty days or sat on someone’s desk for nineteen days and was worked on
for one day.”123 We also do not know how much OIRA review actually contributes to the quality of rules.124 All we really know is that during midnight
jobs, the environment, public health or safety, or State, local, or tribal governments or
communities[.]” See Exec. Order No. 12,866, 3 C.F.R. § 638 (1994), reprinted as amended in 5
U.S.C. § 601 app. at 745 (2006), and 5 U.S.C. § 601 app. at 108 (Supp. IV 2010).
120.
McLaughlin, supra note 50, at 16. McLaughlin’s analysis of the data eliminates any
explanation other than timing, such as political party of the President, for the increase
during midnight periods.
121.
See id. at 17–19. McLaughlin found that this ratio increased by 42% during the
entire period studied (1981–2007) and by 55% during the midnight periods from 1994 to
2007.
122.
Id. at 21–22. McLaughlin also found that an increase in the ratio between economically significant rules and non-significant rules also causes a decrease in review time.
Although this finding is impressive, McLaughlin may not be completely correct in his
apparent assumption that the volume of rules is what causes reduced time for review. As
McLaughlin seems to understand, the transition between administrations is treated as a
deadline for finishing work on regulations, especially now that all incoming administrations
impose regulatory freezes upon taking office. See id. at 25–26. The reduced review time at
OIRA during midnight periods may be due more to the impending deadline than to the fact
that OIRA has more rules to review without increased resources. Even if only a single
midnight rule were submitted to OIRA on December 15 of a transition year, it would be
expected that this rule would be reviewed quickly to allow the rule to be promulgated before
the end of the term on January 20. In fact, if volume were the only consideration, it would be
expected that review time would increase with a higher volume of rules to review rather than
decrease.
123.
Id. at 19.
124.
As McLaughlin states, “Is the quality of regulations affected by midnight regulations and other election cycle phenomena? While this question seems important, it also
seems unanswerable without some good definition and consistent measure of regulation
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periods, review by OIRA is abbreviated as compared with review during
other periods.
Another study, by McLaughlin and Jerry Ellig, used the Mercatus Center’s Regulatory Report Card project to examine how OIRA review affects
the quality of regulatory impact analysis generally and of midnight rules in
particular.125 Because they were looking only at rules proposed and issued in
2008, they defined midnight rules as “any proposed regulation that had its
OIRA review completed after June 1, [2008], in accordance with the Bolten
memorandum,126 and that became a final rule during the period between
Election Day and Inauguration Day, in accordance with the traditional
definition of midnight regulations.”127 They found that although the midnight
rules in their small sample were not under review for a shorter period of
time at OIRA, the quality of regulatory analysis of midnight rules based on
a score on twelve factors—four of which involve openness, four of which
involve quality of analysis, and four of which involve the use of the
analysis—was lower for what they called prescriptive rules, which are rules
that regulate conduct (as opposed to transfer rules, which are rules that
quality . . . . If more OIRA review time leads to higher quality, then outbursts of regulatory
activity such as those of midnight periods may lead to lower quality regulations. Of course, it
is entirely possible that OIRA review time does not have any effect on regulation quality,
but that does not eliminate the question. Also, even if OIRA review does improve regulation
quality, it is not necessarily the case that the number of days a regulation is ‘under review’
actually correlates to a more thorough review.” Id. at 26–27.
125.
See Patrick A. McLaughlin & Jerry Ellig, Does OIRA Review Improve the Quality of
Regulatory Impact Analysis? Evidence from the Final Year of the Bush II Administration, 63
ADMIN. L. REV. (SPECIAL EDITION) 179 (2011) [hereinafter Does OIRA Review]. The Mercatus Center’s Regulatory Report Card is a study by McLaughlin and Ellig that analyzed
regulatory analyses performed in 2008 and scored them on 12 factors involving openness,
quality of analysis, and use of the analysis. The four openness factors are accessibility of
relevant documents, data documentation, model documentation (how verifiable the models
and assumptions are used), and clarity of the analysis. The four quality of analysis factors are
whether the outcomes identified are desirable, whether the analysis identifies systemic
problems, how well the analysis assesses alternatives, and how well the analysis assesses costs
and benefits. The four use of analysis factors are whether the agency used the analysis in its
decisionmaking, whether the agency maximized net benefits or explained why it chose not
to, whether the rule establishes verifiable measures and goals, and whether the agency indicated what data it will use to assess the regulation’s performance. See Jerry Ellig & Patrick
McLaughlin, The Quality and Use of Regulatory Analysis in 2008 (Mercatus Ctr., George
Mason Univ., Working Paper No. 10-34, 2010), available at http://ssrn.com/abstract=1639747.
126.
The Bolten Memo instructed agencies not to initiate any new rulemaking proceedings after June 1, 2008, and to complete all rulemaking proceedings by November 1,
2008. Memorandum from Joshua B. Bolten, White House Chief of Staff, to Heads of Exec.
Dep’ts and Agencies and the Admin. of the Office of Info. and Regulatory Affairs (May 9,
2008), available at http://www.whitehouse.gov/sites/default/files/omb/assets/omb/inforeg/
cos_memo_5_9_08.pdf. This Memorandum is reproduced in the Appendix to this Article,
available at http://www.mjealonline.org/documents.
127.
Does OIRA Review, supra note 125, at 196.
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involve only revenue).128 While this study is interesting, its narrow focus
and small sample render it of limited value in understanding the midnight
rulemaking phenomenon. In particular, lower scores on the Mercatus Center’s Regulatory Report Card may not translate into lower quality rules, and
the small number of rules proposed and completed between June 1, 2008,
and the end of the GW Bush administration may not be representative of
midnight rules generally.
Jason Loring and Liam Roth conducted a study aimed at another possible proxy for quality of rules: durability.129 Durability of a rule refers simply
to whether a rule is still in effect. The assumption is that lower durability is
correlated with lower quality. This is, of course, not necessarily a valid
assumption. There are many reasons unrelated to quality that may result in
the repeal or amendment of a rule, including policy differences, obsolescence, and statutory changes in Congress. However, without a direct
measure of quality, durability may provide some indication of the quality of
rules, or at least an indication of whether it was worthwhile for the outgoing
administration to promulgate midnight rules.
Loring and Roth defined the midnight period as the period between
the election and the inauguration of the new President. In their study of
two transitions, GHW Bush to Clinton and Clinton to GW Bush, they
identified all regulations promulgated by three agencies (EPA, OSHA, and
NHTSA) during each midnight period, and they sorted them into significant and non-significant categories pursuant to Executive Order Nos. 12,291
and 12,866.130 Using the Federal Register database in Westlaw, they then
determined whether each rule had been amended or rescinded. They considered a regulation as “accepted” by the subsequent administration if it was
not amended or rescinded, even if it had been briefly delayed for further
review pursuant to the common practices of incoming administrations.131
Loring and Roth found that the three agencies issued twenty-three
final rules during GHW Bush’s midnight period, ten of which were significant.132 The same agencies published thirty-three regulations during the
Clinton Midnight Period, sixteen of which were significant.133 In both
administrations, EPA was the most prolific issuer of midnight rules,
followed by NHTSA in the GHW Bush administration, and OSHA in the
Clinton administration. The ratio of significant to non-significant rules in
each administration was similar.134
128.
129.
130.
131.
132.
133.
134.
See id. at 198–202.
Loring & Roth, supra note 11.
Id. at 1451–52.
Id. at 1452.
Id. at 1455 tbl.3.
Id. at 1455 tbl.3.
Id.
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The two incoming administrations reacted differently to their predecessors’ midnight rules. The Clinton administration accepted 43% of the
GHW Bush administration’s midnight rules, amended 48% of the rules, and
rescinded 9% of them.135 The GW Bush administration accepted 82% of the
Clinton administration’s midnight rules, amended 15%, and rescinded only
3%.136 The Clinton administration was more aggressive in amending and
rescinding significant midnight rules than midnight rules overall. It accepted only 30% of the GHW Bush administration’s significant rules from the
three agencies, while amending or repealing 70%.137 The GW Bush administration’s reaction to significant midnight rules was slightly more aggressive
than its reaction to midnight rules generally, accepting 75% of significant
rules and amending or repealing 25%.138
Loring and Roth were struck by the low rate at which each administration rescinded midnight regulations (9 percent by Clinton and 3 percent by
Bush), as opposed to amending them.139 They posited the Supreme Court’s
decision in Motor Vehicle Manufacturers’ Ass’n v. State Farm Mutual Automobile Insurance140 as the explanation for this. They characterized State Farm as
holding that “even deregulation requires a reasoned justification, using the
same ‘arbitrary and capricious’ standard under which a passed regulation
must qualify.”141 They also posited that State Farm may explain the GW
Bush administration’s greater reluctance to even amend the Clinton administration’s midnight rules:
Given President George W. Bush’s anti-regulatory leaning, the
administration may believe it faces an uphill battle in justifying
partial reductions in existing, justified regulations. This would
especially be the case in the area of health and safety, where
deregulation may appear callous and prove more difficult to justify.
This problem, however, would likely not be experienced by the proregulatory Clinton administration. Justifying an amendment that
raised the regulatory bar on health and safety would likely be easier
than justifying one tearing it down. This may explain the Clinton
135.
Id. at 1456 tbl.4.
136.
Id. at 1457 tbl.5.
137.
Id. at 1458 tbl.6.
138.
Id. at 1458 tbl.7. Loring and Roth’s study concludes with a useful appendix of all
the midnight rules they looked at in their study, with information on whether each was
significant or not and whether the incoming administration took any action to amend or
repeal each rule. See id. at 1461–65 apps. A, B.
139.
See id. at 1456–57.
140.
See Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 41–
42 (1983).
141.
See Loring & Roth, supra note 11, at 1457.
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administration’s willingness to amend nearly half (48%) of the
[GHW Bush] administration’s midnight regulations.142
State Farm is a plausible explanation for an overall reluctance to repeal
or amend any final rule, but it is not plausible as an explanation for greater
reluctance to repeal than to amend, or as an explanation for the difference
in behavior between the Clinton and GW Bush administrations. Until FCC
v. Fox Television Stations, some understood State Farm as imposing heightened scrutiny on regulatory changes as compared to initial regulatory
decisions.143 In other words, courts were thought to be more skeptical when
agencies changed existing rules than when they promulgated a new rule in
unregulated territory. This may have been the accepted understanding of
the decision during both the Clinton and GW Bush administrations. But
there is no support for Loring and Roth’s apparent understanding that State
Farm imposed a higher standard of review on rescissions than amendments
and on deregulation than regulation. Moreover, State Farm does not explain
why administrations would prefer amendment to repeal. According to its
principal holding, amendment, just as repeal, must meet the same “arbitrary
and capricious” standard of judicial review.
Perhaps Loring and Roth are correct about the GW Bush administration’s perceptions, but again this would be a serious misreading of even the
pre-Fox Television understanding of State Farm. State Farm imposed the same
standard of review on deregulation as had always existed for regulation. The
reading of State Farm that was rejected in Fox Television was that change
required greater justification than initial regulation. There was never a
suggestion that deregulatory change required greater justification than proregulatory change.
There is a simpler explanation for the preponderance of amendments
over rescissions. Many statutes passed by Congress require agency regulations before they can have any effect. These laws, known as “intransitive
laws,” require action by others, usually agencies, to put them into effect.
When confronted with midnight regulations promulgated under such laws,
the incoming administration’s only real choice is to accept or amend the
rules, because repeal would leave the law unenforced and might violate
statutory deadlines. This need to have regulations in place is a much more
likely explanation for the tendency to amend rather than rescind regulations
than Loring and Roth’s unprecedented misreading of State Farm.
Loring and Roth also offer an explanation for the Clinton administration’s greater willingness to revisit midnight rules than the GW Bush
142.
Id. at 1457 (footnotes omitted).
143.
See Robbins v. Reagan, 780 F.2d 37, 45–46 (D.C. Cir. 1985); Jack M. Beermann,
Combating Midnight Regulation, 103 NW. U. L. REV. COLLOQUY 352, 361–62 (2009).
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administration’s. They raise the possibility that the Clinton administration
started out very liberal, but became more moderate in its second term, so
that GW Bush would be likely to accept more of the Clinton administration’s midnight rules than would the Clinton administration accept those of
GHW Bush.144 This explanation is plausible but highly speculative. There
are two alternative explanations that seem just as plausible: first, the very
close election in 2000 meant the incoming Bush administration did not
have a strong mandate for change, and second, the GW Bush administration
was more interested in moving forward with its agenda than in revisiting
the midnight rules of its predecessor.
For the purposes of this Article, the Loring and Roth study illustrates
that incoming administrations vary in the intensity of their willingness to
revisit the midnight rules of their predecessors and that it is possible for
incoming administrations to revisit, through amendment or repeal, a substantial proportion of the midnight rules they confront upon taking office.
Further information on the durability of midnight rules is contained in
a CRS Report authored by Copeland on GW Bush administration midnight
rules, which contains anecdotal evidence on the status of notable midnight
rules. Copeland describes three rules that went into effect after postponement, including one rule issued under the Endangered Species Act that
Congress legislatively granted the Obama administration permission to
withdraw,145 and twenty-five rules that, as of August 29, 2009, were under
scrutiny. Many of these rules were not in effect, having been “delayed,
stayed, amended, or rescinded.”146 This includes rules that were still under
review by the Obama administration, were being considered for rejection by
Congress, or were the subject of petitions for judicial review. This is not a
particularly high number of rules in light of the total output of 341 rules
144.
See Loring & Roth, supra note 11, at 1441–42, 1456–58.
145.
See COPELAND, supra note 22, at 6–7. See also Mandatory Country of Origin
Labeling of Beef, Pork, Lamb, Chicken, Goat Meat, Wild and Farm-Raised Fish and Shellfish, Perishable Agricultural Commodities, Peanuts, Pecans, Ginseng, and Macadamia Nuts,
74 Fed. Reg. 2658, (Jan. 15, 2009) (to be codified at 7 C.F.R. pts. 60, 65); Special Rule for
the Polar Bear, 73 Fed. Reg. 76,249 (Dec. 16, 2008) (to be codified at 50 C.F.R. pt. 17); Rail
Transportation Security, 73 Fed. Reg. 72,130 (Nov. 26, 2008) (to be codified at 49 C.F.R.
pts. 1520, 1580). As Copeland reports, The Omnibus Appropriations Act, 2009, enacted on
March 11, 2009, granted the Secretary of the Interior permission for 60 days to withdraw the
Polar Bear rule, but the Secretary decided to retain the rule, promising to closely monitor its
implementation to decide whether additional measures are necessary to protect polar bears.
See COPELAND, supra note 22, at 7. Another rule, on “Interagency Cooperation Under the
Endangered Species Act” was withdrawn pursuant to Congress’s permission. See id. at 26
tbl.1.
146.
See COPELAND, supra note 22, at 7–27. Of the 25 rules, Copeland reports that as of
the date of his report, 14 were fully or partially in effect, one was subject to a delay in its
effective date, and the other 10 were not in effect due to agency or court-imposed delays or
rescissions. See id. at 26–27 tbl.1.
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that Copeland characterizes as midnight rules issued by the GW Bush
administration, but it likely represents a higher percentage of rules than are
challenged or revisited during non-midnight periods.
What do these studies tell us about the quality of midnight rules? Not
very much. It seems likely that some midnight rules receive somewhat less
scrutiny from OIRA than rules promulgated at other times, and midnight
rules may be somewhat more subject to amendment and rescission than
rules issued at other times. However, these tendencies are not very pronounced and it is not clear that these possibilities indicate that the rules
issued are of lower quality.
The next qualitative issue is whether midnight deregulation is a special
case; i.e., is there something different when the outgoing administration’s
midnight rules are deregulatory rather than regulatory in effect? As a matter
of form, the GW Bush administration’s midnight rules were similar to the
midnight rules issued by other administrations. By and large, they had been
on the table long before the November election, and because the Bolten
Memo set an early deadline for the completion of rulemaking,147 more of
the administration’s late-term actions were completed before the midnight
period than had been the case in prior transitions.148
147.
See infra Section IV.C..
148.
One noteworthy example of a rule that was published after the Bolten Memo’s
June 15 deadline was a proposal by the Secretary of Labor concerning risk-assessment by
OSHA. This rule, which was not included in the Department of Labor’s Regulatory Agenda
until Fall, 2008, see Requirements for DOL Agencies’ Assessment of Occupational Health Risks,
OFFICE OF INFO. AND REGULATORY AFFAIRS, http://www.reginfo.gov/public/do/
eAgendaViewRule?pubId=200810&RIN=1290-AA23 (last visited Oct. 20, 2012), after the
proposed rule was published, was viewed by some as an effort to make it very difficult for
OSHA to enact new standards protecting workers. The GW Bush administration allegedly
had promulgated only one OSHA standard in its eight years, and that under court order. See
Carol D. Leonnig, U.S. Rushes to Change Workplace Toxin Rules, WASH. POST, July 23, 2008, at
A1. The proposal was first made public via an internet posting on OMB’s website on July 7,
2008, id., and the rule was proposed on August 29, 2008. Requirements for DOL Agencies’
Assessment of Occupational Health Risks, 73 Fed. Reg. 50,909 (proposed Aug. 29, 2008) (to
be codified at 29 C.F.R. pt. 2). That it did not appear on the Department of Labor’s Unified
Agenda until after it had already been proposed is unusual. Of the 29 rules listed as at the
“Final Rule Stage” in the Department of Labor’s Fall 2008 Unified Agenda, this was one of
only two that had not previously been included. The other was a rule concerning a newly
authorized payment to survivors of certain federal employees who died while serving in the
armed forces. That rule was finally promulgated as an interim final rule nearly a year later by
the Obama administration. See Death Gratuity Under the Federal Employees’ Compensation Act, 74 Fed. Reg. 41,617 (Aug. 18, 2009) (to be codified at 20 C.F.R. pt. 10). The risk
assessment rule was not finalized during the GW Bush administration and the proposal was
withdrawn by the Obama administration one year after it was made. Requirements for DOL
Agencies’ Assessment of Occupational Health Risks, 74 Fed. Reg. 44,795 (proposed Aug. 31,
2009) (to be codified at 29 C.F.R. pt. 2).
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There was a perception that the midnight rules issued by the outgoing
GW Bush administration were predominantly deregulatory in nature.149
This perception is only partly accurate. While there was a healthy amount
of deregulatory midnight rulemaking by the GW Bush administration,150
some of that administration’s midnight rules imposed new regulatory burdens, not in terms of new health and safety requirements, but rather in the
form of increased compliance burdens in line with the administration’s
ideological commitments.151 In general, the GW Bush administration’s
midnight regulations reflected what one would expect based on the policies
of the administration, deregulating in the environmental area and regulating
labor unions and abortion providers more strictly.
From one perspective, midnight action removing or easing regulatory
burdens may appear more problematic than midnight action imposing
149.
See Jack M. Beermann, Midnight Deregulation in TRANSITIONS: LEGAL CHANGE,
LEGAL MEANINGS 17 (Austin Sarat, ed., 2012); OMB WATCH, TURNING BACK THE CLOCK:
THE OBAMA ADMINISTRATION AND THE LEGACY OF BUSH-ERA MIDNIGHT REGULATIONS
(2009), available at http://www.ombwatch.org/node/10496 (“Many of these so-called midnight regulations were deregulatory in nature, targeting public protections for the environment, workers, and the general citizenry.”); Blake, supra at 3.
150.
The OMB Watch report contains numerous examples. OMB WATCH, supra note
149. Here are two of them: on December 19, 2008, the EPA published a rule reclassifying
certain fuel wastes that would allow them to be burned rather than disposed of in a more
sensitive manner as hazardous wastes. Expansion of RCRA Comparable Fuel Exclusion, 73
Fed. Reg. 77,954 (Dec. 19, 2008) (to be codified at 40 C.F.R. pt 261). This rule was withdrawn by the Obama administration. Withdrawal of Emission-Comparable Fuel Exclusion
Under RCRA, 75 Fed. Reg. 33,712 (June 15, 2010) (to be codified at 40 C.F.R. pt. 261). On
December 18, 2009, the EPA promulgated a rule exempting farms from the obligation to
report emissions from animal wastes. CERCLA/EPCRA Administrative Reporting Exemption for Air Releases of Hazardous Substances from Animal Waste at Farms, 73 Fed. Reg.
76,948 (Dec. 18, 2008) (to be codified at 40 C.F.R. pts. 302, 355). This rule apparently
remains in effect.
151.
For example, on January 21, 2009, a regulation promulgated by the GW Bush
administration’s Department of Labor imposed increased reporting requirements on Labor
Unions. Labor Organization Annual Financial Reports, 74 Fed. Reg. 3678 (Jan. 21, 2009) (to
be codified at 29 C.F.R. pts. 403, 408). This rule was rescinded by the Obama administration. Labor Organization Annual Financial Reports, 74 Fed. Reg. 52,401 (Oct. 13, 2009) (to
be codified at 29 C.F.R. pts. 403, 408). On December 19, 2008, the Department of Health
and Human Services promulgated a rule requiring health care providers receiving federal
funds to certify that they will allow their employees to withhold services based on religious
or moral grounds. Ensuring That Department of Health and Human Services Funds Do Not
Support Coercive or Discriminatory Policies or Practices in Violation of Federal Law, 73
Fed. Reg. 78,072 (Dec. 19, 2008) (to be codified at 45 C.F.R. pt. 88). This rule was rescinded
in large part by the Obama administration. See Regulation for the Enforcement of Federal
Health Care Provider Conscience Protection Laws, 76 Fed. Reg. 9968 (Feb. 23, 2011) (to be
codified at 45 C.F.R. pt. 88). In the article cited above entitled “The Midnight DeRegulation Express,” two of the five rules discussed imposed new or increased regulatory
burdens, including the health care rule discussed above and another rule increasing local
governments’ intelligence gathering powers. See Blake, supra note 3.
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them, because it appears to be the product of waiting for a period of
reduced political accountability, rather than the simple completion of pending
tasks before the transition deadline. The passage of broad, public interest
programs such as environmental regulation and consumer protection occurs
contrary to public choice predictions that narrow interests opposing regulation are likely to dominate politically and prevent the imposition of
regulatory burdens. Legislation or regulation with broadly enjoyed benefits
and concentrated costs come about when the public demand for them is
more intense than usual. During the midnight period, deregulation may
reflect the narrow interests that were defeated when the regulation first
went into effect. Although the accuracy of this portrayal is uncertain, it is
how some portrayed the GW Bush midnight deregulation, and the ideological nature of the midnight rules imposing increased reporting and other
regulatory burdens exacerbates this perception.
However, the relative desirability of midnight deregulation may simply
be a reflection of one’s views on the merits of regulation generally. From the
perspective of many, a great deal of regulation is contrary to the public
interest, so that any effort to ease regulatory burdens is consistent with the
public interest. Under this view, midnight deregulation is more likely to
reflect the public interest than midnight regulation. People with different
views on the general wisdom of regulation may have irreconcilably different
views on the desirability of midnight deregulation. Understood in this way,
midnight rules reflecting a deregulatory policy are no different from midnight rules imposing additional regulatory burdens.
B. The Volume and Durability of Midnight Rules
This Part reports the results of the study I conducted of midnight rules
that looks at the durability of the midnight rules of the last three administrations.152 While durability is a weak proxy for quality of midnight rules,
using durability has another advantage. It tests whether incoming administrations are spending time reviewing and revising (or rescinding)
midnight rules, which has implications for the general normative desirability of midnight rulemaking.
For purposes of this study, I have designated the final three months of
each administration as the midnight period. This captures all rules issued
from October 20th of the election year through Inauguration Day.153 The
152.
For a disclaimer concerning the statistical validity of the data reported here, see
supra note 4.
153.
Despite the fact that much of the discussion of midnight regulation focuses on
post-election activity, the three-month period, which includes two weeks before the election,
is appropriate for several reasons. First, some of the studies already done, including
Cochran’s seminal work, used this measure. Using a different measure would reduce the
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study takes all the OIRA-reviewed rules during the last three midnight
periods and checks whether they have been suspended, rescinded or amended, (or whether amendments have been proposed).154 It then takes the rules
from three non-midnight periods one year prior to each studied midnight
period, does the same analysis, and then compares the durability of nonmidnight rules to the durability of midnight rules.
The methodology of the study involved first conducting a search for
“final rules” using the OIRA official website155 with the aid of three
research assistants. I then searched and identified all amendments made to
those rules during the succeeding presidential term using the Government
Printing Office Federal Digital System database156 and the Westlaw Federal
Register database. The amendments were further distinguished by two categories: amendments that delayed the effective date of the final rule in order
to give the agency more time to review it, and actual amendments in the
form of proposed rules or final rules.
In order to assess the relative durability of midnight regulations, I set
up three corresponding control periods for each midnight rule period. I
selected the same period on the calendar one year prior to each midnight
regulations period to serve as the corresponding control term (e.g., October
20, 2007, to January 20, 2008, served as the control period for the Bush to
Obama transition). I applied the same three-step search method to identify
the final rules and amendments for the control periods.
In selecting the control periods for this study, I considered which year
within a presidential term is most likely to represent a “normal” sample of
regulatory activity. Factors that may distort regulatory activity, like midutility of much of the earlier work on the subject or would require re-analysis of the data
using the new period. Second, the proportion of the period before the election is relatively
short, making it unlikely that including it will skew the results in any way. Third, while the
most controversial practice may be to wait to promulgate important rules until after the
election, rules issued earlier, for example, once the campaign is in full swing, are still problematic if they are timed for political reasons. If anything, there are good arguments that it
would be appropriate to study regulatory activity throughout the election campaign. However,
the three-month period at the end of an administration is a reasonable time period that
focuses primarily on the post-election period but includes at least a small period of preelection activity, during which the timing of regulatory activity might raise questions. The
post-election period is obviously when political accountability is the most serious issue, but
focus on that period should not be to the exclusion of considering whether actions taken in
other periods are suspect.
154.
Originally, this study was to include examination of whether the rules had been
rejected, in whole or in part, on judicial review. However, this aspect of the study proved
infeasible because of the volume of rules and the difficulty of discerning whether a particular
C.F.R. section under judicial review was derived from a particular rulemaking.
155.
Historical Reports, OFFICE OF INFO. AND REGULATORY AFFAIRS,
http://www.reginfo.gov/public/do/eoHistoricReport (last visited Oct. 19, 2012).
156.
Federal Digital System, U.S. GOV’T PRINTING OFFICE, http://www.gpo.gov/fdsys/
(last visited Oct. 19, 2012).
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term elections, eliminated the second year following a presidential election
as a potential control term. I disqualified the first year of a presidential
administration as a control period because of the historical tendency for
administrative overhaul in the early years of a presidential term. The year
immediately preceding a midnight regulations year was chosen as the control period because it has the fewest potentially distortive external factors,
and therefore reflects the most “normal” comparable period of regulatory
activity.
The final rules, amendments, and judicial review actions were used to
construct a comprehensive database of OIRA-reviewed rulemaking during
the last three midnight periods and their corresponding control periods.
The database is organized by agency name and displays the following
information for each rule if it was available:
Rule name
Federal Register citation
Code of Federal Regulations citation
Date rule was published in the Federal Register
Date the rule became effective
Summary of the rule
Amendment’s Federal Register citation, publication date, effective
date, and summary
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Midnightt Rules: A Reform Agenda
The sttudy results ap
ppear in the taable below:
TABLLE 3: OIRA-R
REVIEWED MIDNIGHT R EGULATION
NS, 1992–200
09
318
300
250
1190
200
174
151
150
89
100
87
50
0
GH
HW GHW
Bushh to Bush to
Clinton Clinton
(M
M)
(C)
GW
GW
Cliinton
Clinton
to GW
B
Bush to Bush to
to GW
B
Bush
O
Obama Obama
Bush (C)
(M)
(C)
(M)
Delays
D
9
4
35
1
9
0
Amendments
A
(propoosed or final)
744
38
45
25
44
23
Final
F
Rules
2335
109
1110
63
121
64
b Table 3, thhere were 2355 OIRA-revieewed final rulles
Ass illustrated by
issued during the GHW
G
Bush to
t Clinton M
Midnight Periood, of which 74
a
or haad amendmen
nts proposed, aas compared w
with 109 during
were amended
the coontrol period, of which 38 were amendeed or had am
mendments prroposed.157 During thee Clinton to GW
G Bush Middnight Periodd, there were 1110
A-reviewed fin
nal rules issuued, of whichh 45 were am
mended or hhad
OIRA
amend
dments propossed, as compaared to 63 rulees during the control periood,
of which 25 were eitther amended or had amenddments propoosed. During tthe
GW Bush
B
to Obam
ma Midnight Period
P
there w
were 121 OIRA
A-reviewed finnal
rules issued,
i
of which 44 were either
e
amendeed or had am
mendments prroposed, as compared
d to 64 OIRA
A reviewed ffinal rules issued during tthe
a
or haad amendmentts proposed.
control period of whhich 23 were amended
he data reveaal a very smaall difference between thee rate at whiich
Th
amend
dments were either finalizeed or propos ed with regaard to midnigght
157.
The absolute numbers of OIR
RA reviewed rulles during the G
GHW Bush adm
minn are higher than
n in other period
ds because after P
President Clintoon issued Executtive
istration
Order 12,866,
1
3 C.F.R. 638 (1994), the number of ruless subject to OIR
RA review declinned
significaantly. See CURTIS W. COPELAN
ND, CONG. RESE
EARCH SERV., R
RL32397, FEDER
RAL
RULEMA
AKING: THE ROL
LE OF THE OFFIC
CE OF INFORMAT
TION AND REGUL
LATORY AFFAIRS
S 12
(2004) (describing
(
signiificant drop in voolume of rules reeviewed by OIRA
A after the issuannce
of Exec. Order No. 12,8666, 3 C.F.R. 117 (1982)).
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rules as compared with the relevant control periods. In the GHW Bush to
Clinton transition, surprisingly, non-midnight rules provoked amendments
more often than midnight rules: 31.4% of midnight rules were either
amended or had amendments proposed, as compared to 34.9% in the control period. In the Clinton to GW Bush transition, 40.1% of midnight rules
were either amended or had amendments proposed, as compared to 39.7%
of rules issued during the control period. In the GW Bush to Obama transition, midnight and control period rules had amendments adopted or
proposed in almost identical proportions: 36.3% of the midnight rules and
35.9% of the non-midnight rules. This study reveals virtually no difference
with regard to the durability of midnight rules, except perhaps in the GHW
Bush to Clinton transition, when midnight rules were slightly less durable
than non-midnight rules. This confirms the sense among most of the interviewees that there are not significant qualitative differences between
midnight rules and non-midnight rules.
C. Interviews on the Quality of Midnight Rules
As part of the preparation of the Report upon which this Article is
based, interviews158 were conducted with experts on midnight rulemaking,
including several people with experience concerning midnight rulemaking
as officials in outgoing administrations, incoming administrations, or both.
The interviewees with experience inside government expressed similar
views regarding midnight rules. As a matter of principle, they generally
considered midnight rulemaking as a legitimate exercise of government
power, since the outgoing administration retains full power to act until the
moment of transition. Principled objections to midnight rulemaking were
also expressed, however, by some. Those involved in reviewing midnight
rules at the outset of administrations found that most rules did not suffer
from any quality problems and that most were routine actions generated by
career staff. Many, including officials involved in reviewing rules at the
outset of the new administration, also expressed the view that incoming
administrations have adequate tools to deal with any problematic midnight
rules. Interviewees reacted skeptically to the suggestion that midnight rules
were timed to overload or embarrass the incoming administration. One
pointed out that rulemaking is very expensive and takes a great deal of time
and effort and thus is unlikely to be used to cause difficulty for the incoming administration. However, at least one interviewee expressed the view
that outgoing administrations sometimes defer decisions in order to push
off an important decision onto the next administration. Further, an inter158.
See supra note * for a list of the interviewees with information on their experience
and affiliations. Notes on the interviews are on file with author, and interviewees have not
been directly quoted in this Article.
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viewee with lengthy government experience expressed the view that rulemaking slows down during the election campaign to minimize controversy
until after the election.
In addition to the principled view that there is something wrong with
increased rulemaking during the midnight period, there were some other
concerns expressed that were mainly on two fronts: rushed rules and diminished public participation. One interviewee thought that at least one
outgoing administration rushed through important ill-considered rules with
inadequate time for review and for genuine public input. There was one
example cited of a rule that was approved by OIRA in one day. Interviewees also claimed that public participation was reduced because comment
periods were short and agencies did not have sufficient time to digest the
comments received. One case was cited in which the agency had to review
300,000 comments in one week to issue the rule on time. Despite these
concerns, however, most interviewees concluded that the negative appearance of midnight rulemaking was much worse than the reality.
IV. REACTIONS OF INCOMING ADMINISTRATIONS TO MIDNIGHT
RULEMAKING
As midnight rulemaking has become a common feature of presidential
transitions, it has produced legal and political consequences. This Part of
the Article details three aspects of these consequences. The first portion of
this Part analyzes the strategies that incoming administrations have developed to deal with the high volume of late-term rules they confront upon
taking office. The second portion of this Part discusses the sparse case law
on the legality of the strategies employed by incoming administrations to
deal with midnight rulemaking. The third Section of this Part explores the
GW Bush administration’s effort to avoid producing midnight rules by
finishing its regulatory work earlier than previous administrations.
A. Reactions of Incoming Administrations to Midnight Rules
On January 29, 1981, on his tenth day in office, President Ronald
Reagan issued a memorandum to twelve department heads and the Administrator of the EPA, directing them to delay the effective dates of recently
published regulations for sixty days and not to promulgate any new regulations during the sixty days following the date of the memorandum.159 The
159.
Memorandum from Ronald Reagan, Pres. of the U.S., to the Sec’y of the Treasury, the Attorney Gen., the Sec’y of the Interior, the Sec’y of Agric., the Sec’y of Commerce,
the Sec’y of Labor, the Sec’y of Health and Human Services, the Sec’y of Housing and
Urban Dev., the Sec’y of Transp., the Sec’y of Energy and the Sec’y of Educ., and the Adm’r
of the Envtl. Prot. Agency (Jan. 29, 1981), available at http://www.presidency.ucsb.edu/
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memorandum was a precursor to Reagan’s creation of the centralized review
process established by Executive Order No. 12,291.160 The memorandum’s
timing was prompted, in part, by the midnight regulatory activity of the
Carter administration. The memorandum stated that the freeze was necessary “to subject to full and appropriate review many of the prior
Administration’s last-minute decisions that would increase rather than
relieve the current burden of restrictive regulation.” The sixty-day period
was apparently designed to allow Reagan’s appointees to gain control of the
agencies involved and for him to establish the centralized review process
adverted to in the memorandum.161
Reagan’s memorandum served as a model for the actions of subsequent
administrations dealing with midnight rules and gaining control of administrative agencies.162 On January 25, 1993, Leon Panetta, the incoming
Clinton administration’s Director of OMB, issued a memorandum instructing agencies not to send any regulations to the Federal Register for
publication until they had been reviewed by a Clinton-appointed agency
head and requesting agencies to withdraw any regulations that had been
submitted to the Federal Register but not yet published.163 On January 20,
2001, President Bush’s Chief of Staff, Andrew Card, issued a memorandum
(the “Card Memorandum”) to the “Heads and Acting Heads of Executive
Departments and Agencies” directing them not to send any proposed or
ws/index.php?pid=44134]#axzz1b4iGvpBn. President Reagan’s Memorandum is reproduced
in the Appendix to this Article, available at http://www.mjealonline.org/documents. The
memorandum contained several exceptions including “regulations that respond to emergency
situations or for which a postponement pursuant to this memorandum would conflict with a
statutory or judicial deadline,” and regulations “issued in accordance with the formal rulemaking provisions of the Administrative Procedure Act . . . ; regulations issued with respect
to a military or foreign affairs function of the United States; . . . regulations related to
Federal government procurement; . . . matters related to agency organization, management,
or personnel; [and] . . . regulations issued by the Internal Revenue Service.” Id.
160.
Exec. Order No. 12,291, 3 C.F.R. 127 (1981), revoked by Exec. Order No. 12,866, 3
C.F.R. 638 (1994), reprinted in 5 U.S.C. § 601 (2006).
161.
Executive Order 12,291, which established centralized review of agency regulations by the Office of Management and Budget, was issued on February 17, 1981. Id. The
Reagan administration issued a comprehensive fact sheet detailing its regulatory program on
February 18, 1981, which included, inter alia, discussion of the regulatory freeze, its examination of Carter administration midnight rules and the establishment of regulatory review
under Executive Order 12,291. Office of the Press Secretary of the White House, Fact Sheet:
President Reagan’s Initiatives to Reduce Regulatory Burdens (Feb. 18, 1981), available at
http://www.thecre.com/pdf/Reagan_RegainInitiatives.PDF. It was released in conjunction
with an address by President Reagan before a Joint Session of Congress on his Program for
Economic Recovery. See Ronald Reagan, Pres. of the U.S., Address Before a Joint Session of the
Congress on the Program for Economic Recovery (Feb. 18, 1981), available at
http://www.presidency.ucsb.edu/ws/index.php?pid=43425#ixzz1iLPpYk97.
162.
Anne Joseph O’Connell endorses these strategies. See O’Connell, supra note 16, at
529–30.
163.
See Regulatory Review Notice, 58 Fed. Reg. 6074 (Jan. 25, 1993).
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final regulation to the Federal Register unless it had been reviewed by an
agency head appointed by Bush, to withdraw any regulations that had been
submitted to the Federal Register, but not yet published, so that they could
be reviewed, and to postpone the effective date of published, but not yet
effective, regulations for sixty days.164
On January 20, 2009, President Obama’s Chief of Staff, Rahm Emanuel,
issued a memorandum instructing executive departments and agencies not
to issue new rules until they had been reviewed and approved by an appointee of Obama, to withdraw any rules from the Federal Register that had not
yet been published, and to “[c]onsider extending for 60 days the effective
date of regulations that have been published in the Federal Register but not
yet taken effect . . . for the purpose of reviewing questions of law and policy
raised by those regulations.”165
164.
Memorandum from Andrew H. Card, Jr., Assistant to the Pres. and Chief of
Staff, to the Heads and Acting Heads of Executive Departments and Agencies (Jan. 20,
2001), available at http://www.presidency.ucsb.edu/ws/index.php?pid=79291. On January 26,
2009, President GW Bush’s OMB Director Mitch Daniels issued a follow-up memorandum,
instructing agencies to withdraw pending rules from OIRA and not to submit new rules or
re-submit withdrawn rules until they have been reviewed by an appointee of the new administration. Memorandum from Mitchell E. Daniels, Jr., OMB Director, to the Heads and
Acting Heads of Executive Departments and Agencies (Jan. 26, 2001) (reproduced in the
Appendix to this Article, available at http://www.mjealonline.org/documents). This Memorandum also instructed agencies to inform OMB before publishing any rules not subject to
OIRA reviews. Id.
165.
Memorandum from Rahm Emanuel, Assistant to the President and Chief of Staff,
The White House, for the Heads of Executive Departments and Agencies (Jan. 20, 2009), in
74 Fed. Reg. 4435, 4435–36 (Jan. 26, 2009). The Emanuel Memorandum was followed the
next day by a memorandum issued by Peter R. Orszag, Director of OMB, directed to heads
and acting heads of executive departments and agencies, with further instructions on the
implementation of the Emanuel Memorandum. The Orszag Memorandum was apparently
not published in the Federal Register, but is available online and is reproduced in the
Appendix to this Article, available at http://www.mjealonline.org/documents. Memorandum
from Peter R. Orszag, Director of OMB, to the Heads and Acting Heads of Executive
Departments and Agencies (Jan. 21, 2009), available at http://www.whitehouse.gov/sites/
default/files/omb/assets/agencyinformation_memoranda_2009_pdf/m09-08.pdf. The memorandum instructs agency heads to be selective concerning the postponement of effective
dates of regulations, not to postpone effective dates indefinitely, and to seek comments on
postponements when possible and on the substantive issues raised by any rules postponed. It
instructed agencies to use their judgment on whether to postpone the effective date of rules
and reopen comment periods based on the following considerations:
(1) whether the rulemaking process was procedurally adequate; (2) whether the
rule reflected proper consideration of all relevant facts; (3) whether the rule reflected due consideration of the agency’s statutory or other legal obligations; (4)
whether the rule is based on a reasonable judgment about the legally relevant policy considerations; (5) whether the rulemaking process was open and transparent;
(6) whether objections to the rule were adequately considered, including whether
interested parties had fair opportunities to present contrary facts and arguments;
(7) whether interested parties had the benefit of access to the facts, data, or other
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The Clinton, Bush, and Obama memoranda contained exceptions for
rules governed by statutory or judicial deadlines. The Bush and Obama
memoranda contained a further exception for specified urgent or emergency
situations, while the Clinton memorandum simply provided for the possibility of additional exceptions to be requested from the Director of OMB.
Obama’s memorandum contained one new feature—it instructed agencies to
reopen the comment period for delayed rules for thirty days, “to allow
interested parties to provide comments about issues of law and policy raised
by those rules.”166
The provisions of these memoranda requiring that no new rules be published until they have been reviewed by an appointee of the new
administration in effect impose a moratorium on new regulations for a short
period after the transition. These were part of efforts by each administration to gain control over the agencies going forward, regardless of any
midnight rules that may have been promulgated before the transition. In
the case of Reagan, this also involved allowing time for his administration
to establish the new centralized review procedure that was being planned.
It appears that incoming administrations have been successful in executing the instructions in these memoranda. For rules that were not yet
published, rule withdrawals have not been reported, except in one case, in
which a rule was later withdrawn on the ground that it should not have been
published because it was pending at the Office of the Federal Register
(OFR) when the Card Memorandum was issued.167 According to an OFR
official interviewed for this Article, before a rule is filed for public inspection, the OFR keeps all activity regarding the rule confidential, including
withdrawal before the rule is made public. It does appear, however, that
agencies have succeeded in withdrawing unpublished rules from the Federal
Register.168
analyses on which the agency relied; and (8) whether the final rule found adequate
support in the rulemaking record.
Id.
166.
Emanuel Memorandum, supra note 165.
167.
See Methodology for Coverage of Phase II and Phase III Clinical Trials Sponsored
by the National Institutes of Health, 66 Fed. Reg. 9199 (Feb. 7, 2001) (to be codified at 32
C.F.R. pt. 1999), discussed in William M. Jack, Comment, Taking Care that Presidential
Oversight of the Regulatory Process is Faithfully Executed: A Review of Rule Withdrawals
and Rule Suspensions under the Bush Administration’s Card Memorandum, 54 ADMIN. L.
REV. 1479, 1485 n.24 (2002). Jack recommends that information on rule withdrawals be made
publicly available.
168.
See Jack, supra note 167, at 1485–86 (“According to an ‘informal’ poll performed by
the Office of Information and Regulatory Affairs (OIRA), agencies promptly responded to
the directives of the Card Memorandum and withdrew a total of 124 regulations, forty of
them final rules, from the OFR’s ‘publication queue’ between January 21, 2001 and early
February 2001.”) (citing OFFICE OF INFO. & REGULATORY AFFAIRS, MAKING SENSE OF
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To understand the power of incoming administrations to withdraw
documents from the Federal Register after they have been submitted but
before they have been published, it is important to understand exactly how
the process works at the OFR. Documents submitted to the OFR go
through three stages. The first stage is submission, which is simply the act
of the agency delivering the document to the OFR for publication in the
Federal Register.169 The second stage is known as “filing for public inspection,” which happens on the second working day after the document is
submitted to the OFR for documents received before 2:00 PM and happens
on the third working day for documents received after 2:00 PM.170 This
schedule gives the OFR time to review the document before it is filed for
public inspection and prepared for publication. Documents are available for
public inspection at the OFR immediately upon filing, and filing is considered legally sufficient notice for the rule to take effect.171 The third stage is
actual publication in the Federal Register, which happens on the working day
after filing.172 There are also provisions for faster filing and publication in
emergencies.173
OFR regulations allow for withdrawal of documents from the Federal
Register by the submitting agency only. OFR regulations do not mention
withdrawal before filing, so presumably this can be freely done. Because the
OFR maintains confidentiality concerning documents until they are filed
for public inspection, there would not necessarily be any public record of a
withdrawal before filing. With regard to documents that have been filed for
public inspection, the relevant regulation174 states such documents “may” be
withdrawn or corrected. Whether an agency can actually withdraw a document depends on how far along production of the printed Federal Register
REGULATION: 2001 REPORT TO CONGRESS ON THE COSTS AND BENEFITS OF REGULATIONS
AND UNFUNDED MANDATES ON STATE, LOCAL, AND TRIBAL ENTITIES 34–35 (2001),
available at http://www.whitehouse.gov/sites/default/files/omb/assets/omb/inforeg/costbenefit
report.pdf.).
169.
In addition to the statutes and regulations cited in this Part, information on the
workings of the Federal Register was gathered in correspondence with Jim Wickliffe, former
OFR Scheduling Supervisor and Amy P. Bunk, Director of Legal Affairs and Policy, Office
of the Federal Register.
170.
1 C.F.R. § 17.2 (2012).
171.
44 U.S.C. § 1507 (“[F]iling of a document, required or authorized to be published
by section 1505 of this title, except in cases where notice by publication is insufficient in law,
is sufficient to give notice of the contents of the document to a person subject to or affected
by it.”). This section is the provision of the Federal Register Act requiring the publication of
Proclamations, Executive Orders, documents having general applicability and legal effect,
and documents required by Congress to be published.
172.
The Federal Register Filing and Publication schedule is contained in the Code of
Federal Regulations. 1 C.F.R. § 17.2 (2012).
173.
1 C.F.R. §§ 17.3–.6 (2012).
174.
1 C.F.R. § 18.13 (2012).
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is and, in some circumstances, whether the OFR is convinced that there are
adequate reasons for withdrawal.175 When an agency requests withdrawal of
a document that has already been filed for public inspection, the OFR
insists on a legal justification such as a legal mistake in the drafting of the
document. If the OFR is not convinced that there is an adequate reason for
withdrawal, it may, in conjunction with the agency, consult the OMB or the
Office of Legal Counsel (OLC) in the Department of Justice for guidance.
Because filing occurs on the opening of the OFR each day at 8:45 AM,
withdrawal is simplest before the day of filing.
Agencies, however, have successfully delayed the effective dates of published midnight rules that have not yet gone into effect.176 For example, on
February 4, 1981, the Reagan Administration’s Secretary of Transportation
issued a blanket notice postponing the effective dates of all Department
rules covered by the memorandum.177 Sometimes changes were made to the
delayed rules, but in many instances, after review, the regulations promulgated by the previous administration were allowed to go into effect as
originally promulgated. Whether incoming administrations were happy
about this, or whether they decided that it was not worth the time or attention to change the prior administration’s rules rather than focus on moving
forward with the new agenda is uncertain.178 Not surprisingly, in some
instances, a new administration’s efforts to change or rescind the prior
administration’s midnight rules were met with resistance by those who
favored the midnight rules.179
The APA’s notice and comment procedures have not prevented incoming administrations from acting quickly to prevent midnight rules from
taking effect before they can be reviewed by the incoming administration.
Agencies in the Reagan administration set a precedent of suspending the
effective dates of midnight rules without notice and comment.180 In the
notices announcing suspensions, agencies in the Reagan administration
175.
Any document withdrawn after filing remains available for public inspection at
the OFR even if it is not published in the Federal Register. Id.
176.
For example, a comment in the Administrative Law Review reported that during
the period between January 21, 2001 and early February 2001, President GW Bush’s administration withdrew 40 final rules and delayed the effective dates of 90 more. See Jack, supra
note 167, at 1485–86.
177.
Notice of Postponement of Pending Regulations, 46 Fed. Reg. 10,706 (Feb. 4,
1981).
178.
Senior EPA officials during the early days of President GW Bush’s presidency
reported that the EPA reexamined many Clinton administration midnight rules and found
no problems with the vast majority of them.
179.
See Howell & Mayer, supra note 30, at 544 (discussing how interest groups fight
to retain what they gained at the end of the prior administration).
180.
APA sections 553(b)(A) and (B) contain several exceptions to the notice and
comment requirement. Administrative Procedure Act, 5 U.S.C. § 553(b)(3)(A)–(B) (2012).
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relied on APA section 553(b)’s provision that allows an agency to promulgate a rule without notice and comment when the agency “for good cause
finds (and incorporates the finding and a brief statement of reasons therefor
in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.”181 The Reagan
administration also found “good cause” for delaying the effective dates
immediately, i.e., without waiting thirty days as specified in APA
section 553(d).182 For example, the Department of Transportation’s (DOT)
notice suspending the effective dates of numerous midnight rules found in
the nation’s “economic condition” good cause for dispensing with notice and
comment and for the need for time to review regulations with imminent
effective dates.183
In some instances, agencies satisfied the APA by finding that notice and
comment would be “impracticable, unnecessary and contrary to the public
interest” because there was insufficient time before the rules’ effective dates
to conduct the review ordered by the President and a notice and comment
period, and because the review was necessary for the health of the economy.184 In at least one instance, a notice of postponement of an effective date
by the National Park Service was justified merely by the existence of
Reagan’s directive, with no finding of good cause for delay and no specification that the usual thirty day delay of rules’ effectiveness was waived.185
During the Reagan administration, when rules were postponed again
beyond the initial sixty days required by the President’s directive, notice
and comment was not employed on the question of whether the rule should
be postponed again. For example, the effective date of a rule issued by the
Materials Transportation Board within DOT concerning the addition of
water to pipelines transporting anhydrous ammonia was postponed for a
second time without notice and comment based on a finding that “no
181.
Id. at § 553(b)(3)(B).
182.
Id. at § 553(d).
183.
Postponement of Pending Regulations, 46 Fed. Reg. 10,706 (Feb. 4, 1981). Similar
language was used in support of delay without notice and comment in several additional
Department of Transportation notices. See, e.g., Amendments of Effective Date of Part 125
and Amendments Adopted in Relation to Part 125, 46 Fed. Reg. 10,705 (Feb. 4, 1981);
Postponement of Pending Regulations, 46 Fed. Reg. 10,906 (Feb. 5, 1981).
184.
Standards of Fill for Wine; Deferral of Effective Date, 46 Fed. Reg. 12,493, 12,493
(Feb. 17, 1981) (to be codified at 27 C.F.R. pt.4). The Department of the Treasury used very
similar language in Napa Valley Viticultural Area; Deferral of Effective Date, 46 Fed. Reg.
12,493, 12,494 (Feb. 17, 1981) (to be codified at 27 C.F.R. pt.9) and Completely Denatured
Alcohol Formula No. 20; Deferral of Effective Date, 46 FR 12,494 (Feb. 17, 1981) (to be
codified at 27 C.F.R. pts. 211, 212).
185.
This notice was issued after the effective date of the original rule, and characterizes
President Reagan’s directive itself as “postponing the effective date of all final regulations for
60-days.” Special Regulations, Areas of the National Park System; Glacier Bay National
Monument, 46 Fed. Reg. 12,496, 12,496 (Feb. 17, 1981) (to be codified at 36 C.F.R. pt.7).
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further information would be provided beyond that already in the record of
this rulemaking.”186 The need for time to perform a review of the benefits of
the rule was cited as the reason for the further delay.187 The finding that
notice and comment is not necessary because “no further information would
be provided beyond that already in the record of this rulemaking” is equivalent to a finding under APA section 553(b) that notice and comment is
“impracticable, unnecessary, or contrary to the public interest.”
During the early days of the Reagan administration, there were further
postponements of the effective dates of rules to comply with Executive
Order No. 12,291. Section 7 of that Order required agencies to “suspend or
postpone the effective dates of all major rules” to the extent allowed by law
except in case of emergency.188 Further suspensions of the effective dates of
rules to allow for review under Executive Order No. 12,291 were ordered,
apparently without notice and comment.189
I was able to find in the Federal Register only one Clinton administration
notice delaying the effective date of a GHW Bush administration midnight
rule. This involved a rule issued on January 19, 1993, by the Health Care
Financing Authority within the Department of Health and Human
Services. In this instance, the agency did not employ notice and comment
procedures and did not give any reason for not employing notice and
comment. It stated as the reason for the delay that “the new administration
wants to fully review the policies in these regulations.”190 The notice did not
refer to the Panetta Memorandum delaying rules at the outset of the administration.191
In a famous non-midnight example, the Clinton administration, in its
first month in office, suspended without notice and comment the effective186.
Transportation of Liquids by Pipeline; Addition of Water to Pipelines Transporting Anhydrous Ammonia, 46 Fed. Reg. 20,556, 20,556 (Apr. 6, 1981) (to be codified at 49
C.F.R. pt. 195).
187.
Id.
188.
Exec. Order No. 12,291, 3 C.F.R. 127 (1981), revoked by Exec. Order No. 12,866,
3 C.F.R. 638 (1994), reprinted in 5 U.S.C. § 601 (2006).
189.
Extension of Effective Dates for Final Rules; Request for Comments, 46 Fed.
Reg. 19,233 (Mar. 30, 1981). Comments were requested on whether the rules were “major
rules” under Executive Order 12,291.
190.
Medicaid Program; Eligibility and Coverage Requirements, 58 Fed. Reg. 9120
(Feb. 19, 1993) (to be codified at 42 C.F.R. pts. 435, 436, 440)
191.
Id. (“This notice delays by 6 months the effective dates and compliance dates of
the final rule with comment period on Medicaid Eligibility and Coverage Requirements
published January 19, 1993 in the Federal Register (58 Fed. Reg. 4908)”). There is an example of a delayed effective date of a rule in the early Clinton administration not related to the
midnight rules issue, and in this case, the agency issued the delay as “Interim Final Rules”
without notice and comment, indicating an administration view that notice and comment is
not necessary to delay the effective date of a final rule. Delay in Application Date for Small
Vehicles, 58 Fed. Reg. 10,989 (Feb. 23, 1993) (to be codified at 49 C.F.R. pt. 665).
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ness of the Reagan administration’s abortion “gag rule,” which regulated
communications between health care providers and patients about abortion
in federally funded family planning clinics. It did not promulgate a substitute for more than seven years.192 In this instance, the agency found “good
cause” for dispensing with notice and comment before suspending the rule,
mainly based on substantive reasons relating to the administration’s view of
the wisdom of the rule.193
Pursuant to the Card Memorandum, the incoming GW Bush administration delayed the effective dates of numerous midnight rules
promulgated by the outgoing Clinton administration. Initial delays were
done by publishing a notice in the Federal Register without notice and comment.194 The GW Bush administration introduced a new reason for
dispensing with notice and comment for the postponement of the effective
dates of midnight rules. In addition to the familiar “good cause” claim,
agencies asserted that actions suspending the effective dates of rules are
exempt from notice and comment as procedural rules.195
192.
Standards of Compliance for Abortion-Related Services in Family Planning
Services Projects, 65 Fed. Reg. 41,270 (July 3, 2000) (to be codified at 42 C.F.R. pt. 59).
193.
Standards of Compliance for Abortion-Related Services in Family Planning
Service Projects, 58 Fed. Reg. 7462 (Feb. 5, 1993) (to be codified at 42 C.F.R. pt. 59). This
Rule had been issued by the Reagan administration and then reinterpreted during the
administration of GHW Bush. See Nat’l Family Planning and Reprod. Health Ass’n v.
Sullivan, 979 F.2d 227 (D.C. Cir. 1992).
194.
U.S. GEN. ACCOUNTING OFFICE, GAO-02-370R, REGULATORY REVIEW: DELAY
OF EFFECTIVE DATES OF FINAL RULES SUBJECT TO THE ADMINISTRATION’S JANUARY 20,
2001, MEMORANDUM 6 (Feb. 15, 2002).
195.
Each suspension by the GW Bush administration was published in the Federal
Register using language similar to the following example to justify the lack of notice and
comment on the delay:
To the extent that 5 U.S.C. section 553 applies to this action, the action is exempt
from notice and comment because it constitutes a rule of procedure under 5
U.S.C. section 553(b)(A). Alternatively, the Department’s implementation of this
action without opportunity for public comment, effective immediately upon publication today in the Federal Register, is based on the good cause exceptions in 5
U.S.C. 553(b)(3)(B) and 553(d)(3), in that seeking public comment is impractical,
unnecessary and contrary to the public interest. The temporary 60-day delay in
effective date is necessary to give Department officials the opportunity for further
review and consideration of new regulations, consistent with the Assistant to the
President’s memorandum of January 20, 2001. Given the imminence of the effective date, seeking prior public comment on this temporary delay would have been
impractical, as sell [sic] as contrary to the public interest in the orderly promulgation and implementation of regulations.
Areas of the National Park System: Delay of Effective Date, 66 Fed. Reg. 8,366, 8,367 (Jan.
31, 2001) (to be codified at 36 C.F.R. pt. 7). A Westlaw search revealed 64 uses of this
language in 2001 in notices delaying effective dates, four of which were for second delays
and one of which was for a third delay. See, e.g., Partial Stay, Amendments, and Correction,
66 Fed. Reg. 12,848, 12,848 (Mar. 1, 2001) (to be codified at 21 C.F.R. pts. 10, 14, 16) (initial
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In some cases, if the regulation was still under review when the sixtyday delay expired, this same language was used to justify further delays
without notice and comment.196 In one case, when comments were taken on
whether to retain the rule, the GW Bush administration ordered a further
delay in the effective date without notice and comment using the same
language with an additional justification that time was needed to review
comments received.197
A report prepared by the Government Accountability Office (GAO)
provides details on the number and nature of rules postponed by the GW
Bush administration pursuant to the Card Memorandum.198 The GAO
summarized the effects of the Card Memorandum as follows:
Our review . . . indicated that federal agencies delayed the effective
dates for 90 of the 371 final rules that were subject to the Card
memorandum. The effective dates for the remaining 281 rules were
either not delayed or we could find no indication in the Federal
Register of a delay. The Departments of Health and Human Services (HHS), Transportation (DOT), and Agriculture (USDA),
and the Environmental Protection Agency (EPA) delayed more
than half of the 90 rules. The agencies considered 65 of the 90
delayed rules to be substantive in nature, and considered 12 to be
“major” rules (e.g., rules with at least a $100 million impact on the
economy).
As of the 1-year anniversary of the Card memorandum, 67 of the
90 delayed rules were postponed for one 60-day period and then
appeared to have taken effect. Eight other rules were delayed for
more than 60 days but appeared to have taken effect. The 15
remaining delayed rules had not taken effect by January 20, 2002.
Although most of the delayed rules had not been changed by the 1year anniversary of the Card memorandum, one had been withdrawn, three had been withdrawn and replaced by new rules, and
nine others had been altered in some way (e.g., changing the
implementation date or modifying a reporting requirement). The
agencies indicated that other rules might be changed in the future,
delay); Medicaid Managed Care: Further Delay of Effective Date, 66 Fed. Reg. 32,776,
32,777 (June 18, 2001) (to be codified at 42 C.F.R. pts. 400, 430, 431, 434, 435, 438, 440,
447) (second delay); Oil and Gas Leasing: Onshore Oil and Gas Operations, 66 Fed. Reg.
41,149, 41,149 (Aug. 7, 2001) (to be codified at 43 C.F.R. pt. 3160) (third delay).
196.
Medicaid Managed Care: Further Delay of Effective Date, 66 Fed. Reg. at 32,777.
197.
Oil and Gas Leasing: Onshore Oil and Gas Operations, 66 Fed. Reg. at 41,149
(Aug. 7, 2001).
198.
U.S. GEN. ACCOUNTING OFFICE, supra note 194.
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and OIRA has placed five of the delayed rules on a list for “high
priority” review. The agencies generally did not provide the public
with a prior opportunity to comment on the delays in effective
dates or rule changes, frequently indicating that notice and comment procedures were either not applicable, impracticable, or were
contrary to the public interest.199
This GAO report explains why only 90 of the 371 rules covered by the
Card Memorandum were actually affected. First, the 371 total includes rules
by independent agencies that were asked, but not required, to follow the
Card Memorandum. According to the report, none of the 30 rules issued by
independent agencies that would have been covered by the Card Memorandum were delayed.200 Second, agencies did not postpone the effective dates
of rules when there was sufficient time before that date to review the
rules.201 Third, the GAO reported that shortly after the Card Memorandum
was issued, it was determined that “certain types of numerous and noncontroversial rules (e.g., air worthiness directives issued by the Federal Aviation
Administration and bridge opening schedules published by the Coast
Guard) should be allowed to take effect as scheduled.”202 The GAO report
states that these rules, and others not delayed pursuant to the Card Memorandum, were allowed to take effect as scheduled with no further notice in
the Federal Register indicating why they were not delayed pursuant to the
Card Memorandum.203 The GAO report also states that within a year of
President GW Bush’s inauguration, 75 of the 90 delayed rules had gone into
effect, most (67) after a single 60-day or shorter delay.204
The GW Bush administration’s review of the previous administration’s
rulemaking activities extended beyond rules that had actually been finalized
in the midnight period. O’Connell reports that “[b]y the end of the first
year of the Administration, hundreds of regulations started but not yet
completed before Bush took office were formally withdrawn.”205 According
to O’Connell, proposed rules that span a presidential transition are 14 percent more likely to be withdrawn than other rulemaking proposals.
199.
Id. at 2–3.
200.
See id. at 4, Table 1.
201.
See id. at 4–5.
202.
Id. at 5.
203.
Id.
204.
Id. at 7. In most cases, the rules went into effect without further notice in the
Federal Register.
205.
O’Connell, supra note 16 at 473; see also id. at 508 fig.10, 509 (detailing the number
of withdrawn rules in President Clinton’s third year (383) and President GW Bush’s second
year (433)).
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When time allowed, the Obama administration sought comment on
whether the effective dates of rules should be postponed.206 Like prior
administrations, when time did not allow, the Obama administration did not
seek comment on whether effective dates should be postponed; however,
this was clearly a disfavored strategy. In one instance, comments were
sought for a remarkably short three days on whether to delay the effective
date of the rule even though the effective date was only seven days after the
opening of the comment period.207 When comments were not sought, there
was less consistency in terms of justifying the lack of notice and comment
before imposing delays than during some other administrations. Interestingly, the language used in some of the notices postponing rules’ effective
dates without notice and comment asserted that normally notice and comment would be required to take such action, but that there was good cause
for dispensing with it in the particular cases. Further, standard practice
during the Obama administration was for agencies to reopen the comment
period for at least thirty days on virtually all rules postponed, as instructed
by the Emanuel Memorandum. Comments were sought on whether the
rules should be retained or altered in any way.
The primary justifications given by agencies in the Obama administration for delay without notice and comment (and for immediate delay
without observing the APA’s minimum thirty-day waiting period for putting new rules into effect) were to allow the public to comment on the rules
and to allow the agency time to consider any new comments received.208 For
206.
See, e.g., Investment Advice—Participants and Beneficiaries, 74 Fed. Reg. 6,007
(Feb. 4, 2009) (seeking comment on proposal postponing, for 60 days, the effective date of a
rule scheduled to take effect on March 23, 2009) (to be codified at 29 C.F.R. pt. 2550). Two
more final rules were subsequently issued staying the effective date of the rule in question
twice. Investment Advice—Participants and Beneficiaries, 74 Fed. Reg. 11,847 (Mar. 20,
2009) (to be codified at 29 C.F.R. pt. 2550); Investment Advice—Participants and Beneficiaries, 74 Fed. Reg. 23,951 (May 22, 2009) (to be codified at 29 C.F.R. pt. 2550). This
example is discussed in Curtis Copeland’s CRS report, supra note 22, at 8 nn. 41–43. Subsequent to the publication of Copeland’s report, this rule was withdrawn and a new rule was
promulgated in its place. See Investment Advice-Participants and Beneficiaries, 74 Fed. Reg.
60,156 (Nov. 20, 2009) (to be codified at 29 C.F.R. pt. 2550) (withdrawal of GW Bush
administration rule); Investment Advice—Participants and Beneficiaries, 76 Fed. Reg.
66,136-01 (Oct. 25, 2011) (to be codified at 29 C.F.R. pt. 2550) (promulgation, after notice
and comment, of substitute final rule). This final rule became effective on December 27,
2011, 21 months after the GW Bush administration’s midnight rule would have taken effect.
207.
See Medicare Program; Changes to the Competitive Acquisition of Certain Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) by Certain
Provisions of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA),
74 Fed. Reg. 6557 (Feb. 10, 2009) (to be codified at 42 C.F.R. pt.414).
208.
These reasons for delay and re-opening the comment period seem to be founded
on a distrust of midnight rules, since presumably the public already had an opportunity to
comment on the rules before they were adopted and the agency already considered those
comments.
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example, in a notice delaying the effective dates of midnight rules concerning Medicaid premiums, the Centers for Medicare and Medicaid Services
within the Department of Health and Human Services stated: “The 60-day
delay in the effective date is necessary to give the public the opportunity to
submit additional comments on the policies set forth in the November 25,
2008 final rule, and to provide an opportunity for CMS to consider all
additional public comments.”209 In language that was used in several other
notices, the agency explained its decision not to seek comment on the delay
as follows:
A delay in effective date and reopening of the comment period is
necessary to ensure that we have the opportunity to receive
additional public comments to fully inform our decisions before the
policies contained in the final rule become effective. Moreover, we
believe it would be contrary to the public interest for the
November 25, 2008 final rule to become effective until we are certain that all public comments, including any additional comments
that are submitted in the reopened comment period, are considered. To do otherwise could potentially result in uncertainty and
confusion as to the finality of the final rule. For the reasons stated
above, we find that both notice and comment and the 30-day delay
in effective date for this action are unnecessary. Therefore, we find
there is good cause to waive notice and comment procedures and
the 30-day delay in effective date for this action.210
In some instances, agencies at the outset of the Obama administration
did not find it necessary to justify the lack of notice and comment on
actions delaying the effective dates of final midnight rules. Rather, sometimes agencies simply declared that the rules’ effective dates were delayed
in order to comply with the Emanuel Memorandum, and reopened them
for further notice and comment on issues and concerns about the rule.211
209.
Medicaid Program; Premiums and Cost Sharing, 74 Fed. Reg. 4888 (Jan. 27, 2009)
(to be codified at 42 C.F.R. pts. 447, 457).
210.
Id. at 4888–89. An example using similar language is Medicare Program; Changes
to the Competitive Acquisition of Certain Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) by Certain Provisions of the Medicare Improvements for
Patients and Providers Act of 2008 (MIPPA), 74 Fed. Reg. 7653, 7654 (Feb. 19, 2009) (to be
codified at 42 C.F.R. pt. 414).
211.
Sale and Disposal of National Forest System Timber; Special Forest Products and
Forest Botanical Products, 74 Fed. Reg. 5107 (Jan. 29, 2009) (to be codified at 36 C.F.R. pts.
223, 261). The EPA at the outset of the Obama administration also delayed the effective date
of midnight rules without citing reasons or making findings in support of the delay. See, e.g.,
Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review
(NSR): Aggregation, 74 Fed. Reg. 7284 (Feb. 13, 2009) (to be codified at 40 C.F.R. pts. 51,
52).
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In some cases, agencies gave reasons for delay without adverting to
APA section 553 or any requirement that good cause exist for either the
delay itself or the immediate effectiveness of the delay. For example, the
Department of Defense delayed the implementation of a new hospital
payment system with a notice, which cited both the Emanuel Memorandum
and the need for more time for implementation as reasons for delay. After
adverting to these two factors, the agency concluded:
In view of both of these developments, the Department is delaying
the effective date of TRICARE’s OPPS until May 1, 2009, and is
inviting additional public comment on the final rule. Any timely
public comments received will be considered and any changes to
the final rule will be published in the Federal Register.212
When agencies at the outset of the Obama administration sought comments on proposals to delay the effective dates of rules, the language
announcing the proposal for the delay in effective date often adverted to the
Emanuel Memorandum and the Orszag Memorandum implementing it. For
example, on February 3, 2009, the Employment Standards Administration
within the Department of Labor published a notice requesting comment on
whether the February 20, 2009, effective date of a rule published on January
21, 2009, should be extended for sixty days.213 The agency gave as the
reason for proposing delay: “to provide an opportunity for further review
and consideration of the questions of law and policy raised by it.”214 The
agency thus sought comments not only on the question of delay but also
“comments generally on the rule, including comments on the merits of
rescinding or retaining the rule.”215 The notice specified two different comment periods: a ten-day comment period on whether to implement the
delay (because otherwise the rule would have gone into effect before the
delay could be implemented) and a thirty-day comment period on the substantive merits of the rule. Because the agency undertook notice and
comment, there was no need for a finding of cause to proceed without those
procedures. However, there was no discussion of why it was appropriate to
revisit a rule that had just been published.
In a curious case on February 11, 2009, the Department of Housing and
Urban Development published a notice seeking comment on whether the
212.
Hospital Outpatient Prospective Payment System (OPPS): Delay of Effective
Date and Additional Opportunity for Public Comment, 74 Fed. Reg. 6228, 6228 (Feb. 6,
2009) (to be codified at 32 C.F.R. pt. 199).
213.
Labor Organization Annual Financial Reports, 74 Fed. Reg. 5899, 5899 (Feb. 3,
2009) (to be codified 29 C.F.R. pts. 403, 408).
214.
Id.
215.
Id.
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March 30, 2009, effective date of a rule published on January 27, 2009,
should be extended for sixty days “[i]n accordance with the memorandum of
January 20, 2009, from the assistant to the President and Chief of Staff,
entitled ‘Regulatory Review.’ ”216 The comment period was thirty days,
which allowed the agency time to decide on postponement before the rule
went into effect. This example is curious because the rule was originally
published on January 27, 2009, one week after Obama became President. It
is not clear how, in light of the Emanuel Memorandum, this rule was published. Perhaps it was issued in violation of the instruction not to issue any
new rules without the approval of an appointee of the new administration.
In some situations, agencies may be legally authorized or even required
to reconsider rules shortly after their issuance, including midnight rules.
The APA grants all interested persons the right to petition for the “issuance, amendment, or repeal of a rule.”217 As Copeland reports, the
implementation of some rules has been delayed while the agency acts on
petitions for reconsideration. The Clean Air Act explicitly grants the EPA
the discretion to stay the effectiveness of a rule under reconsideration for
up to three months.218 Copeland reports that in 2009, the EPA granted
reconsideration of three midnight rules and stayed the effective date of at
least one of them.219
Other tools that incoming administrations can use to mute the consequences of midnight rules involve administrative control over rule
enforcement and the settlement of litigation directed at midnight rules.
Many rules depend on agency enforcement, and the actual substantive
effects of rules can vary widely depending on how they are enforced. In
some situations, the implementation of a final rule depends on further steps
taken by the agency, and if the agency does not act, implementation may be
delayed or even stymied. For example, Copeland reports on two instances
in which a final midnight rule was not enforced by the Obama administration.220 The first involves a Department of Health and Human Services
(HHS) midnight rule that was issued on December 19, 2008, with an effective date of January 20, 2009.221 This rule required HHS to collect
information, which may not be done by a federal agency without OMB
216.
Refinement of Income and Rent Determination Requirements in Public and
Assisted Housing Programs: Proposed Delay of Effective Date, 74 Fed. Reg. 6839, 6839–40
(proposed Feb. 11, 2009) (to be codified at 24 C.F.R. pts. 5, 92, 908).
217.
Administrative Procedure Act, 5 U.S.C. § 553(e) (2006).
218.
Air Pollution Control Act, 42 U.S.C. § 7607(d)(7)(B) (2006).
219.
See COPELAND, supra note 22, at 26 tbl.1.
220.
See COPELAND, supra note 22, at 30–31.
221.
Ensuring That Department of Health and Human Services Funds Do Not Support Coercive or Discriminatory Policies or Practices in Violation of Federal Law, 73 Fed.
Reg. 78,072 (Dec. 19, 2008) (to be codified at 45 C.F.R. pt. 88).
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approval under the Paperwork Reduction Act. Copeland reports that as of
the date of his report, HHS had not requested OMB approval, which
means the rule had no effect.222 Subsequent to the publication of Copeland’s
report, HHS proposed and adopted a final rule rescinding in part and revising the December 2008 rule.223 The other example involves a Department
of the Interior midnight rule on shale oil deposits on federal land.224 The
outgoing Bush administration had begun to implement the rule in January
2009 by issuing a solicitation for bids on a demonstration project under the
rule.225 In February 2009, the Obama administration withdrew the solicitation and opened the matter for comments on the terms and conditions of
leases under the program.226 A new solicitation, with revised terms, was
issued on November 3, 2009.227
Judicial review also presents incoming administrations with the opportunity to affect the substance of midnight rules by using the discretion
agencies have over litigation strategy and settlement agreements. As Rossi
has pointed out, if rules are challenged, an incoming administration might
settle litigation with an agreement to enforce the rules in a manner more in
line with its policy views than with those of the prior administration that
issued the midnight rule being challenged.228
The incoming administration also has enforcement discretion and may
shape the enforcement of a midnight rule to conform to its policy views.
This discretion is not unlimited. In one case, a federal court issued an
injunction requiring implementation of a midnight rule issued by the
Department of Labor on December 18, 2008, that had been challenged on
judicial review by labor interests and suspended by the Department of
Labor after President Obama took office.229 Business interests joined the
222.
COPELAND, supra note 22, at 30.
223.
Regulation for the Enforcement of Federal Health Care Provider Conscience
Protection Laws, 76 Fed. Reg. 9968 (Feb. 23, 2011) (to be codified at 45 C.F.R. pt. 88),
discussed in COPELAND, supra note 22, at 30.
224.
Oil Shale Management—General, 73 Fed. Reg. 69,414 (Nov. 18, 2008) (to be
codified at 3 C.F.R. pts. 3900, 3910, 3920, 3930), discussed in COPELAND, supra note 22, at
30–31.
225.
COPELAND, supra note 22, at 31.
226.
See Withdrawal of the Call for Nominations—Oil Shale Research, Development,
and Demonstration (R, D, and D) Program and Request for Public Comment, 74 Fed. Reg.
8983 (Feb. 27, 2009), discussed in COPELAND, supra note 22, at 31.
227.
Call for Nominations—Oil Shale Research Development and Demonstration
Program, 74 Fed. Reg. 56,867 (Nov. 3, 2009).
228.
Jim Rossi, Bargaining in the Shadow of Administrative Procedure: The Public Interest in
Rulemaking Settlement, 51 DUKE L.J. 1015, 1039–40 (2001).
229.
The rule at issue concerned visas for temporary agricultural workers. Temporary
Agricultural Employment of H-2A Aliens in the United States, 73 Fed. Reg. 77,110 (Dec. 18,
2008) (to be codified at 229 C.F.R. pts. 501, 780, 788). This example is discussed at various
places in Copeland’s CRS report. See Copeland, supra note 22 at 22, 32.
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litigation in support of the 2008 rule. When the agency suspended the new
rule, it put back in place the prior rule that had been issued in 1987. This
was problematic because although the agency sought comments on the
suspension, which it stated was necessary because it did not have the time
or resources to implement the new rule, it explicitly excluded comments on
the merits of the 2008 rule or its 1987 predecessor.230 The court enjoined
the suspension on the ground that the agency violated APA section 553 by
not considering comments on the merits of the action it took, which was to
reinstate, even if temporarily, the 1987 rule.231
A final strategy that incoming administrations might use against midnight rulemaking is to support rejection under the Congressional Review
Act (CRA)232 or other negative action in Congress. The CRA provides an
expedited procedure for Congress to consider whether to legislatively reject
an agency rule. This procedure has been used only once, to reject OSHA’s
ergonomics rule, which was promulgated in the final year of the Clinton
administration. The CRA was the subject of a separate ACUS study233 and
thus was not considered in any depth in the Report upon which this Article
is based. The important point for purposes of this Article is that CRA
rejection is more likely to be effective with regard to midnight rules, since
the President would be less likely to veto Congress’s resolution rejecting a
rule promulgated by a former administration than by the President’s own.234
Even if Congress does not take action under the CRA, it can legislatively rescind, amend, or delay regulations, as it has done on more than one
occasion with regard to midnight rules. For example, in the economic
stimulus bill enacted by Congress in February 2009, Congress legislatively
precluded the implementation of an HHS midnight rule issued on Novem-
230.
Temporary Employment of H-2A Aliens in the United States, 74 Fed. Reg. 11,408
(proposed March 17, 2009) (to be codified at 20 C.F.R. pt. 655, 29 C.F.R. pts. 501, 780, 788)
(“Please provide written comments only on whether the Department should suspend the
December 18, 2008 final rule for further review and consideration of the issues that have
arisen since the final rule’s publication. Comments concerning the substance or merits of the
December 18, 2008 final rule or the prior rule will not be considered.”).
231.
North Carolina Growers’ Ass’n, Inc. v. Solis, 644 F. Supp. 2d 664 (M.D.N.C.
2009) (grant of preliminary injunction), aff ’d, North Carolina Growers’ Ass’n, Inc. v. United
Farm Workers, 702 F.3d 755 (4th Cir. 2012).
232.
Congressional Review Act, 5 U.S.C. §§ 801–08 (2006).
233.
Although ACUS studied the CRA, the committee overseeing the study ultimately
decided not to go forward with any recommendations based on it. See Congressional Review
Act, ADMIN. CONF. OF THE U.S., http://www.acus.gov/research/the-conference-currentprojects/congressional-review-act/ (last visited Oct. 25, 2012).
234.
Presentment to the President is required under INS v. Chadha, 462 U.S. 919
(1983).
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ber 7, 2008, for a period of six and one-half months.235 During that period,
the agency proposed and adopted a final rule rescinding the rule in question.236 This episode shows how, under some circumstances, support from
the incoming administration for congressional action directed at midnight
rules might advance the incoming administration’s efforts to alter or revoke
such rules.
Incoming administrations have tools to deal with some, but not all, of
the other actions that have been taken by administrations just before they
have left office. Executive orders are freely revocable and subject to alteration by the new President, and there are many instances in which incoming
Presidents have revoked executive orders (sometimes quite recent ones)
issued by their predecessor.237 For example, on January 30, 2009, Obama
revoked two of GW Bush’s executive orders concerning regulatory planning
and review, one issued in 2002 and the other issued in 2007.238 Interpretative rules, policy statements, guidance documents, and other regulatory
documents issued without notice and comment are also easily revocable by
an incoming administration. There may, however, be political constraints to
revoking some of these, especially those that must be published in the Federal Register. It also takes time and effort to make sure that revocation is
done properly and that regulatory systems function properly after revocation. Pardons and clemencies issued by an outgoing President are immune
from revocation or alteration by an incoming administration, except perhaps
in the rare circumstance in which they have not been delivered before revocation is ordered.239
Incoming administrations thus have powerful tools to deal with the
previous administration’s midnight rules, but these tools might not be adequate to deal with the entire problem. One issue is the timing of midnight
rules. Although the midnight period that causes the most concern is the
period between the election and the inauguration of the new President, the
volume of regulatory activity appears to increase throughout the entire final
year of two-term presidencies.240 As discussed below, if an outgoing admin235.
Copeland, supra note 22, at 20 (discussing implementation of Clarification of
Outpatient Hospital Facility (Including Outpatient Hospital Clinic) Services Definition, 73
Fed. Reg. 66,187 (Nov. 7, 2008)).
236.
Id. at 20, 20 n.117–118 (citing Medicaid Program: Rescission of School-Based
Administration/Transportation Final Rule, Outpatient Hospital Services Final Rule, and
Partial Rescission of Case Management Interim Final Rule, 74 Fed. Reg. 31,183 (June 30,
2009) (to be codified at 42 C.F.R. pts. 431, 440, 441)).
237.
See HALCHIN supra note 30, at 11 n.38.
238.
Exec. Order No 13,497, 3 C.F.R. 218 (2010) (revoking Exec. Order No. 13,258, 3
C.F.R. 204 (2003) and Exec. Order No. 13,422, 3 C.F.R. 191 (2008) (concerning regulatory
planning and review), amending Exec. Order No. 12,866, 3 C.F.R. 638 (1994)).
239.
See supra note 34.
240.
See generally O’Connell, supra note 17.
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istration succeeds in finishing the bulk of its work more than sixty days
before the end of the term, the incoming administration may not have the
power to suspend the effective dates of rules, since significant rules can be
made effective sixty days after promulgation. Even though such rules would
not meet the technical definition of midnight rules, and there would be no
political accountability concern, given that all rules were done well before
the election, similar concerns of quality and projection of the agenda may
arise if an administration engages in a high volume of regulatory activity
earlier in its eighth year, especially if it appears that agencies rushed to meet
an earlier deadline and increased the volume of activity substantially over
prior years.
The incoming administrations’ regulatory agenda may embody or affect
the new administration’s reactions to midnight rules and leftover rulemaking proposals.241 When an administration takes office, it must decide how
much time and energy to spend looking back and how much time and energy to devote to moving forward with the administration’s own agenda. It
may choose to allow midnight rules to take effect in order to free up
resources to pursue the administration’s own agenda. For rules not yet
completed, the new administration may not be concerned with the effort
that the prior administration put into formulating proposals, and may prefer
to work from scratch on its own proposals instead of completing pending
rules.
B. The Legality of Strategies for Dealing with Midnight Rules
There have not been many cases raising procedural challenges to
incoming administrations’ reactions to midnight rules promulgated by the
previous administration. This is likely due to a combination of factors. In
the vast majority of cases, any challenge to a delay in the effective date of
agency rules is likely to be moot before the challenge would get very far.
Most of the time, after the sixty-day delay to allow the incoming administration to review the previous administration’s midnight rules, the rules
are allowed to go into effect. A case challenging the sixty-day delay is
unlikely to be adjudicated before the sixty days has ended. Cases in which
the incoming administration decides to rescind a midnight rule, or delay its
effective date more than sixty days to allow for further review, are more
likely to be adjudicated by the federal courts on judicial review, but this has
not happened very often. One reason is that once the sixty-day period
expires, the tendency has been to either allow the rule to go into effect, or,
in some cases, to use notice and comment rulemaking to promulgate a
further delay. This would ultimately meet any procedural objection to the
241.
See O’Connell, supra note 16, at 532.
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further delay, except in those cases in which additional delays have been
ordered without notice and comment.
1. Legal Views in the Executive Branch and Commentary
The OLC provided an opinion to the Reagan administration on the
legality of Reagan’s order to agency and department heads delaying the
effective dates of rules for sixty days and ordering a freeze until the centralized review process could be put into place.242 The OLC concluded that
Reagan’s order was lawful. As to rules that had not yet been finalized and
published, the OLC concluded that the delays were lawful because the APA
does not impose any procedural requirements on such an action.243 It
further concluded that even if the delay were subject to substantive judicial
review, “[t]he explanation here—that the new Administration needs time to
review initiatives proposed by its predecessor—is, we believe, sufficient.”244
The OLC opinion offered a different analysis of the President’s power
to delay the effective dates of rules that have been published but had not yet
reached their effective dates. Here, the opinion first proposed that a sixtyday extension of a rule’s effective date is within the agency’s power because
while the APA prescribes only a thirty-day minimum between promulgation and legal effect, it does not prohibit or even discourage agencies from
providing more than thirty-days’ notice of the effective dates of rules.245
The opinion implies that if it would have been lawful to prescribe a longer
period when the rule was first promulgated, the agency retains the power to
lengthen the period even after the rule has been published.246 The opinion
further concludes that extending the effective date of a rule is not itself a
rule and thus does not require advance notice and comment.247 The opinion
242.
Presidential Memorandum Delaying Proposed and Pending Regulations, 5 Op.
O.L.C. 55 (1981).
243.
Id. at 56.
244.
Id.
245.
Id. at 56–57.
246.
Id. at 57.
247.
Id.:
[W]e conclude that a 60-day delay in the effective date should not be regarded as
‘rule making’ for the purposes of the APA. Although such a delay technically alters
the date on which a rule has legal effect, nothing in the APA or in any judicial
decision suggests that a delay in effective date is the sort of agency action that
Congress intended to include within the procedural requirements of § 553(b).
This conclusion is supported by the clear congressional intent to give agencies
discretion to extend the effective date provision beyond 30 days. The purposes of
the minimum 30-day requirement would plainly be furthered if an extension of
the effective date were not considered ‘rule making,’ for such an extension would
permit the new Administration to review the pertinent regulations and would free
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does acknowledge that extensions of effective dates might be subject to
judicial review under the APA, but concludes that although a statement of
reasons for the delay might be required, “a reference to the President’s
Memorandum should be sufficient in most cases.”248
The OLC opinion also concludes that even if a delay in a rule’s effective date is considered rulemaking, agencies have good cause for dispensing
with notice and comment on the delay.
A new President assuming office during a time of economic
distress must have some period in which to evaluate the nature and
effect of regulations promulgated by a previous Administration . . . .
If notice and comment procedures were required, the President
would not be permitted to undertake such an evaluation until the
regulations at issue had become effective. A notice and comment
period, preventing the new Administration from reviewing pending
regulations until they imposed possibly burdensome and disruptive
costs of compliance on private parties, would for this reason be
‘impracticable, unnecessary, or contrary to the public interest.’ 5
U.S.C. § 553(b)(3)(B). This rationale furnishes good cause for
dispensing with public procedures for a brief suspension of an
effective date.249
Note that due to its reliance on the nation being in a period of “economic
distress,” this reasoning may not justify dispensing with notice and comment in transitions that occur under different conditions.
One law review note250 disagrees with the OLC opinion and has argued
strongly that the delays imposed by incoming administrations are unlawful.
The note argues that:
As a matter of administrative law doctrine, [the delays] were
arbitrary and capricious because they did not provide adequate
reasons for their promulgation and because they did not rely on
factors that Congress contemplated when it delegated its legislative
private parties from having to adjust their conduct to regulations that are
simultaneously under review.
Id. (footnote omitted).
248.
Id. The opinion notes that if the effective date of the original rule had been a
“matter of controversy” during the original rulemaking, more specific reasons for delay
would be required. Id. at 57–58.
249.
Id. at 58.
250.
B.J. Sanford, Note, Midnight Regulations, Judicial Review, and the Formal Limits of
Presidential Rulemaking, 78 N.Y.U. L. REV. 782 (2003).
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power. Therefore, a reviewing court should invalidate such delays if
they ever are attempted again.251
The note sorts the documents agencies have employed to announce delays
into two categories: those that rely simply on the President’s order and
those that justify the delay based on the policies underlying the President’s
order. The note finds both deficient for different reasons. “[T]hose that
merely cite the President’s authority should fail automatically because they
do not offer any reason for the delays . . . . Although agencies need not give
elaborate justifications for every brief delay, they must provide some explanation.”252 For those that rely on the reasons underlying the President’s
order to delay the effective dates of midnight rules, the note concludes that
such reasons are inadequate because they are not based on any policy
Congress enacted in the statute underlying the rules: “[T]he cited policies
were the President’s, not those that Congress expressed in the statute creating the agency’s rulemaking authority. In fact, the President’s policies may
even have been hostile to the statute and constituted an attempt to effect its
administrative repeal.”253 The note’s argument rests on the principle that
agencies may justify rulemaking based only on reasons embodied in the
statute that form the basis for the rules.254
Another commentator has taken a more equivocal position on the legality of the actions of incoming administrations directed at midnight rules.255
This commentator concludes that in most cases, a sixty-day delay in the
effective date of a rule may be exempt from notice and comment as a
procedural rule because “a temporary delay may not substantially affect a
party’s interest in a final rule . . . .”256 However, the comment also
concludes that in some cases, a sixty-day delay, and longer delays, may not
be procedural:
If the delay had a substantive impact on a regulated entity or on the
public, the agency should have considered those interests and
determined if the delay could be characterized as procedural.
Without considering these interests, agencies should not have
251.
Id. at 785 (footnote omitted).
252.
Id. at 803.
253.
Id. at 803.
254.
See Massachusetts v. EPA, 549 U.S. 497, 533 (2007) (“To the extent that [the
statute] constrains agency discretion to pursue other priorities of the Administrator or the
President, this is the congressional design.”).
255.
See Jack, supra note 167.
256.
Id. at 1506.
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relied on the blanket explanation that all of the delays were mere
procedural rules.257
The comment assumes that delays in effective dates are rules presumptively subject to notice and comment, and is not persuaded by the repeated,
apparently pro forma assertions by the GW Bush administration that notice
and comment would be “impracticable or contrary to the public interest”
and that “good cause” existed for dispensing with notice and comment. The
bases for the comment’s negative view of these justifications for dispensing
with notice and comment are: first, the brief notice and comment periods
that were held in some cases illustrate that notice and comment was possible; and second, it does not appear that the agencies engaged in a serious
weighing of the costs and benefits of notice and comment before asserting
that it was contrary to the public interest or that good cause existed for not
seeking advance comment.258 The comment allows that notice and comment
for a brief delay might be “unnecessary” and would thus survive scrutiny
under APA section 553.259 The argument is that in such cases the delay “will
not substantially affect a party’s rights and interests because it will not
ultimately restrict a party’s rights created by a duly promulgated rule or
conclusively relieve a regulated entity of the requirements of a duly
promulgated rule.”260
2. Case Law on Reactions to Midnight Regulation
a. Withdrawal of Rules from the Federal Register
The case law suggests that incoming Presidents’ strategy of ordering
agencies to withdraw regulations from the Federal Register before they are
published is lawful and renders the withdrawn rule null and void.261 In
Kennecott Utah Copper v. Department of Interior, the Department of the
Interior (DOI) promulgated a midnight rule concerning certain hazardous
wastes and sent it to the OFR where it was received in the afternoon of
January 19, 1993, the last full day of the GHW Bush administration.262 On
January 21, 1993, the second day of the Clinton administration, the DOI
withdrew the rule before it was published.263 After the DOI promulgated
substitute regulations less favorable to industry, Kennecott Copper sought
257.
Id. at 1507–08 (footnote omitted).
258.
Id. at 1509–10.
259.
Id. at 1510–11.
260.
Id. at 1511.
261.
See Kennecott Utah Copper Corp. v. Dep’t of Interior, 88 F.3d 1191, 1206 (D.C.
Cir. 1996); Chen v. Immigration and Naturalization Service, 95 F.3d 801 (9th Cir. 1996).
262.
Kennecott Copper, 88 F.3d at 1200.
263.
Id. at 1200–01.
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judicial review on numerous grounds, including claims that withdrawing the
regulation from the Federal Register before publication violated the APA and
the Federal Register Act. The court of appeals rejected claims under the
Federal Register Act, holding that the OFR’s understanding and application
of the Federal Register Act allowing withdrawal was reasonable and that it
lacked jurisdiction over Kennecott’s APA claim because the withdrawal of a
rule before publication is not itself a rule subject to judicial review.264 The
court of appeals ignored the midnight rule context of the case, and instead
upheld the OFR’s interpretation allowing withdrawal of rules before publication as a reasonable way of allowing agencies to correct mistakes and
avoid the “needless expense and effort of amending regulations through the
public comment process” later.265
The court also rejected claims, brought by different petitioners, that the
DOI could not withdraw the rule without first allowing notice and comment.266 The DOI argued in response that any violation of the APA was
cured by allowing notice and comment on the substitute regulations that
were promulgated the following year.267 Although the court rejected this
argument on the ground that “the two sets of regulations . . . did not cover
the same issues,”268 it held that the challengers were not entitled to notice
and comment on the withdrawal of the rule from the OFR for two different
reasons. First, the court held that the withdrawn rule had never gone into
effect as a binding rule.269 Second, the act of withdrawal was not a rule
within the APA’s definition of that term mainly because the withdrawn rule
had never gone into effect. Notice and comment, therefore, was not
required before the agency withdrew the not-yet published document.270
This reasoning basically approves of the common presidential strategy of
ordering the withdrawal from the OFR of all rules that had been submitted
but not yet published before the transition.
In Chen v. Immigration and Naturalization Service, an asylum applicant
relied, in part, on a rule that had been sent to the OFR by the outgoing
administration of GHW Bush but was withdrawn before publication by the
incoming Clinton administration.271 The Ninth Circuit held that the withdrawn rule had no legal effect: “In accordance with President Clinton’s
directive, this rule was withdrawn from publication. It was never subse264.
Id. at 1206–07.
265.
Id. at 1206. See supra note 175 and accompanying text (explanation of OFR procedures and the withdrawal of unpublished rules).
266.
Kennecott Copper, 88 F.3d at 1207.
267.
Id. at 1208.
268.
Id.
269.
Id. at 1208.
270.
Id. at 1208–09.
271.
Chen v. Immigration and Naturalization Service, 95 F.3d 801, 804 (9th Cir. 1996).
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quently published; therefore, it has no legal effect and is not binding on this
court.”272 Several additional decisions affirm or assume that the unpublished
rule at issue in Chen has no legal effect because it was withdrawn before
publication.273
One court has taken the contrary view. In Xin-Chang v. Slattery, the
district court held that the withdrawn rule involved in Chen was effective
even though it had not been published.274 This court viewed publication as a
formality unrelated to the legal effectiveness of the rule. The court
considered the rule effective at some earlier (unspecified) stage of adoption,
perhaps when the rule was signed by the agency head and sent to the OFR
for publication. Publication, according to this court, is required only
because, under the APA, an unpublished rule cannot be used against a
member of the public.275 The court concluded that “where a rule confers a
substantive benefit to a person, an agency must comply with it, even if the
rule is not published.”276 The district court’s conclusion was rejected on
appeal by the Second Circuit, which held that the unpublished rule never
became effective.277 The Second Circuit had a technical basis for its
decision: the unpublished version of the rule had no effective date because
the intent of the outgoing administration was for the OFR to insert the
date of publication as the rule’s effective date. Since the rule was never
published, it contained no effective date and thus could not have become
effective without publication.278
An official at the OFR has confirmed that many rules arrive at the
OFR with instructions to insert an effective date, often thirty or sixty days
after publication. OFR regulations contain instructions for computing
effective dates based on agency instructions.279 The reasoning in Zhang v.
272.
Id. at 805.
273.
See Zhang v. Slattery, 55 F.3d 732, 744 (2d Cir. 1995); Chen Zhou Chai v. Carroll,
48 F.3d 1331, 1338 (4th Cir. 1995); Shan Ming Wang v. Slattery, 877 F. Supp. 133, 140
(S.D.N.Y 1995); Si v. Slattery, 864 F. Supp. 397, 403 (S.D.N.Y 1994); Chen v. Carroll, 866
F. Supp. 283, 287 (E.D. Va. 1994); Gao v. Waters, 869 F. Supp. 1474, 1480 (N.D. Cal. 1994).
274.
Xin-Chang v. Slattery, 859 F. Supp. 708, 712 (S.D.N.Y. 1994), rev’d, Zhang v.
Slattery, 55 F.3d 732 (2d Cir. 1995).
275.
Id. at 712. See Administrative Procedure Act, 5 U.S.C. § 552(a)(1)(E) (West,
current through P.L. 112–174); Morton v. Ruiz, 415 U.S. 199, 232–33 (1974).
276.
Xin-Chang, 859 F. Supp. at 712.
277.
Zhang, 55 F.3d at 749.
278.
Id. at 749.
279.
OFR regulations contemplate computation of effective dates when the submitted
rule specifies an effective date measured as a number of days after publication. See 1 C.F.R.
§ 18.17 (2012). The possibility of OFR inserting the date of publication as the effective date
of a rule that states it is effective immediately upon publication is not explicitly contemplated. However, it seems implicit that OFR would have power to insert the date of publication
as the effective date, if the agency specified that the rule goes into at that time. According to
the OFR official interviewed for this project, agencies tend to designate specific effective
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Slattery raises the possibility that the court would not allow an incoming
administration to withdraw a rule sent to the Federal Register with an effective date already designated, as is the case with a substantial number of
rules. However, the court of appeals also appeared to endorse the notion
that the incoming Clinton administration had the power to prevent an
unpublished rule from becoming effective by withdrawing it from the
OFR.280
There is at least one state supreme court decision that found against the
authority of an incoming governor to order withdrawal of unpublished rules
from the state equivalent of the Federal Register. In New Mexico, incoming
governor Susana Martinez issued an executive order upon taking office,
suspending “all proposed and pending rules and regulations under the
Governor’s authority for a ninety-day review period.”281 Claiming authority
under the order, the Acting Secretary of the state Environment Department
instructed the Director of the State Records Center not to publish environmental rules in the New Mexico Register that had been promulgated
during the prior administration. On petitions for mandamus filed by proponents of the rules, the New Mexico Supreme Court ordered the Records
Center to publish the rules, relying on two sets of reasons. First, the court
held that the executive order, which specifically suspended rules under the
Governor’s authority, did not apply to the rules at issue because the Records Center and the environmental agencies involved were statutorily
removed from control by the Secretary and thus the Governor.282 Further,
the Records Center is itself an independent agency not subject to the governor’s control. Second, the Records Center’s own rules require publication
of rules properly submitted unless the issuing authority requests withdrawal, and in this case the withdrawal request was invalid because it was made
by the Acting Cabinet Secretary of the New Mexico Environment Department, rather than the chairs of the agencies that had promulgated the
rules.283 It does not appear that the New Mexico court’s reasoning would
apply to the typical actions of incoming presidential administrations, mainly
because incoming administrations have not applied their regulatory review
procedures to independent agencies, and the federal rule withdrawals have
apparently all been requested by the proper federal agencies.
dates when there are statutory deadlines involved or when a rule must go into effect on a
weekend, which normally would not be the effective date under OFR rules.
280.
Zhang, 55 F.3d at 749 (“This failure to publish was a deliberate step by an incoming Administration to terminate all open initiatives of the outgoing administration. By its
own terms, the Rule never became effective.”).
281.
New Energy Economy, Inc. v. Martinez, 247 P.3d 286, 288 (N.M. 2011) (citing
N.M. Exec. Order No. 2011-001 (Jan. 1, 2011)).
282.
See id. at 293.
283.
See id.
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b. Suspension of the Effective Dates of Published Rules
Suspension or postponement of the effective dates of published rules
raises issues different from those raised by withdrawal of rules that have not
yet made it into the Federal Register. It is generally understood that a rule
is final upon publication in the Federal Register, even if it has an effective
date after the date of publication.284 The legal issues in such cases are: first,
whether a postponement or suspension of the effective date of a rule is itself
a rule under the APA; and second, if so, whether such a rule may be issued
without notice and comment.285
In Natural Resources Defense Council, Inc. v. EPA, the Third Circuit invalidated the Reagan administration’s suspension of a Carter administration
midnight rule286 on discharge of waste into public water treatment works.287
The rule, which had been promulgated to comply with the government’s
obligations under a settlement agreement, was published on January 28,
1981, and carried an effective date of March 13, 1981. On February 12, 1981,
however, pursuant to Reagan’s instructions, the effective date of the rule was
postponed until March 30, 1981.288 Then, on March 27, 1981, the EPA
administrator indefinitely postponed the effective date of the rule, relying
solely on Executive Order No. 12,291 as authority for the postponement.289
The indefinite postponement was challenged on the basis that it was a rule
and thus was subject to the APA’s notice and comment requirements.290
The court of appeals first concluded that the postponement was a rule
under the APA’s definition, presumptively subject to the APA’s notice and
comment requirements.291 The court next determined that the postpone284.
See Envtl. Def. Fund, Inc. v. Gorsuch, 713 F.2d 802 (D.C. Cir. 1983).
285.
JEFFREY S. LUBBERS, A GUIDE TO FEDERAL AGENCY RULEMAKING 119–122 (4th
ed. 2006).
286.
Technically, the rule was promulgated by the Reagan administration. However, it
was clearly a project of the EPA under President Carter, coming out less than 10 days after
President Reagan took office, and the rule was suspended to comply with President Reagan’s
instructions to suspend new rules to allow his administration to review the work of the
Carter administration and put in place the new centralized review process that was in the
works.
287.
Natural Res. Def. Council, Inc. v. EPA, 683 F.2d 752 (3d Cir. 1982).
288.
Id. at 755.
289.
Id. at 756; see Exec. Order No. 12,291, 3 C.F.R. 127 (1981), revoked by Exec. Order
No. 12,866, 3 C.F.R. 638 (1994), reprinted in 5 U.S.C. § 601 (2006).
290.
Natural Res. Def. Council, 683 F.2d at 753.
291.
Id. at 761–62 (“In general, an effective date is ‘part of an agency statement of
general or particular applicability and of future effect.’ It is an essential part of any rule:
without an effective date, the ‘agency statement’ could have no ‘future effect,’ and could not
serve to ‘implement, interpret, or prescribe law or policy.’ In short, without an effective date
a rule would be a nullity because it would never require adherence.”). The D.C. Circuit’s
decision in Environmental Defense Fund, Inc. v. Gorsuch, 713 F.3d 802, appears to agree with
this conclusion.
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ment was subject to the APA’s notice and comment requirement because it
had “a substantial impact upon the public and upon the regulated
industry . . . .”292 The EPA also argued that “good cause” excused its failure
to employ notice and comment procedures because the effective date of the
rule was imminent and it needed additional time to satisfy the Regulatory
Impact Analysis (RIA) requirement of Executive Order No. 12,291. The
court rejected this argument, concluding that nothing prevented the EPA
from complying with the APA and the Executive Order by allowing the rule
to go into effect, preparing an RIA after the fact, and conducting notice and
comment rulemaking on whether to suspend the effectiveness of the rule
based on its findings in the RIA or for other reasons.293 The decision thus
appears to reject the assertion that compliance with the President’s regulatory review instructions and the imminent effective date constitute good
cause to dispense with notice and comment. It is unclear what the court
would hold if the Executive Order and the APA were in irreconcilable
conflict, for example, if the President were to order agencies to suspend the
effective dates of rules immediately, without notice and comment.
In Council of Southern Mountains, Inc. v. Donovan, the court of appeals
approved a six-month “Midnight Suspension” of the effective date of a rule
that the Mine Safety and Health Administration had promulgated two
years earlier.294 The regulation at issue, promulgated in 1978, required mines
to equip their miners with certain safety equipment by December 21,
1980.295 On December 5, 1980, without notice and comment, the Department of Labor extended the compliance date to June 21, 1981, by which time
Reagan would have assumed the presidency, succeeding Carter.296 The
agency argued that there was good cause for dispensing with notice and
comment because the deadline was imminent and there were serious questions about the safety and availability of the new equipment.297 The court
first strongly rejected the argument that the approach of a deadline alone
can provide good cause for dispensing with notice and comment to extend
the deadline, especially when the agency either knew the deadline all along
or created the deadline itself.298 The court then characterized the case as
“close,” but found the agency had good cause for acting without notice and
292.
Natural Res. Def. Council, 683 F.2d at 764.
293.
Id. at 765–66. In fact, this is exactly what the EPA did while the litigation challenging the March 27 postponement was pending. Id. at 757 (citing General Pretreatment
Regulations for Existing and New Sources, 46 Fed. Reg. 50,503 (Oct. 13, 1981) (to be codified at 40 C.F.R. pts. 125, 403)).
294.
Council of S. Mountains, Inc. v. Donovan, 653 F.2d 573 (D.C. Cir. 1981).
295.
Id. at 575.
296.
Id.
297.
Id. at 579.
298.
Id. at 580–81.
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comment, mainly because the unavailability of necessary equipment was
beyond the agency’s control and the agency was working diligently to
implement the rule as soon as possible.299
At a minimum, these decisions indicate that courts will require good
reasons for delaying the implementation of published rules without notice
and comment beyond the mere desire of incoming administrations to
reexamine midnight rules before they go into effect.
Another court of appeals decision that disallowed the suspension of a
midnight rule is Natural Resources Defense Council v. Abraham, but it arose in
a special situation in which the relevant statute prohibited the agency from
“backsliding,” and thus may not be generalizable.300 The Department of
Energy (DOE) published in the Federal Register midnight rules under the
Energy Policy and Conservation Act (EPCA) regarding the energy efficiency of air conditioners with heat pumps on January 22, 2001,301 two days
after Bush became President. Due to the publication schedule, these rules
apparently could not be withdrawn from the Federal Register before publication. The rule listed an effective date of February 21, 2001. On February
2, 2001, adverting to the Card Memorandum, the DOE issued a final rule
without notice and comment302 delaying the effective date of the new efficiency standards until April 23, 2001, or approximately sixty days after the
original effective date.303 On July 25, 2001, the DOE published an NPRM
proposing to withdraw the January 22 rule and substitute less stringent
efficiency standards.304 On May 23, 2002, the DOE adopted these proposed
rules, as well as a related proposal to define terms contained in the EPCA’s
anti-backsliding provision.305 The anti-backsliding provision, in substance,
makes it unlawful for the DOE to relax any previously adopted efficiency
299.
Id. at 582. No further notices appear in the Federal Register, so presumably the
rule was implemented as of that date. As further evidence that the rule was allowed to go
into effect after the delay, the agency issued an emergency training requirement concerning
use of the new equipment in 1987. See Self-Contained Self-Rescue Devices; Emergency
Temporary Standard, 52 Fed. Reg. 24,374 (June 30, 1987) (to be codified at 30 C.F.R. pt.
75).
300.
Natural Res. Def. Council v. Abraham, 355 F.3d 179 (2d Cir. 2004).
301.
Central Air Conditioners and Heat Pumps Energy Conservation Standards, 66
Fed. Reg. 7170 (Jan. 22, 2001) (to be codified at 10 C.F.R. pt. 430).
302.
The rule delaying the standards’ effective date found that notice and comment
were not necessary because the delay was a procedural rule and that in any case notice and
comment could be dispensed with for good cause and because it was impracticable, given the
need to impose the delay quickly. Central Air Conditioners and Heat Pumps Energy Conservation Standards, 66 Fed. Reg. 8745 (Feb. 2, 2001) (to be codified at 10 C.F.R. 430).
303.
Id.
304.
Central Air Conditioners and Heat Pumps Energy Conservation Standards, 66
Fed. Reg. 38,822 (July 25, 2001) (to be codified at 10 C.F.R. pt. 430).
305.
Central Air Conditioners and Heat Pumps Energy Conservation Standards, 67
Fed. Reg. 36,368 (May 23, 2002).
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standard, and the Bush administration’s definitional provisions were
designed to make clear that its actions with regard to these rules did not
constitute backsliding. On judicial review, the Second Circuit held that the
DOE’s amendments violated the EPCA’s anti-backsliding provision and
thus were unlawful. The court rejected the DOE’s interpretation of the
statute, refusing to defer to it under Chevron v. Natural Resources Defense
Council.306
For purposes of this Article, the most interesting aspect of Abraham was
the court’s rejection of the DOE’s claim that it has inherent power to
suspend the effective date of published rules before their effective dates.307
In this particular case, the DOE may have been able to suspend and revise
the rules based on some peculiarities of the statutory structure, if its
February 1, 2001, suspension of the rule had been valid. However, the
Second Circuit found that the February 1 suspension without notice and
comment was not valid because it had the substantive effect of allowing the
DOE to substitute less stringent standards.308 This violated even the DOE’s
own interpretation of the anti-backsliding provision.309
The court also rejected the DOE’s argument that good cause existed for
dispensing with notice and comment for the delay in the rule’s effective
date. Here, the court rejected the implicit argument that the midnight
nature of the rule contributed to good cause for suspending it without
notice and comment. Basically, the court considered the DOE during the
two administrations a single entity, and thus because the emergency (the
imminent effectiveness of the new rules) that necessitated quick action was
created by the DOE itself, there was no good reason for suspension without
notice and comment.310
The court also rejected the argument that the notice and comment procedures the DOE conducted on the replacement standards cured any defect
306.
Natural Res. Def. Council v. Abraham, 355 F.3d 179, 198–200 (2d Cir. 2004)
(referring to Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984)).
307.
Id. at 202–04.
308.
Id. at 204–05.
309.
Id. at 205.
310.
Id.:
We cannot agree . . . that an emergency of DOE’s own making can constitute
good cause. . . . Furthermore, we fail to see the emergency. The only thing that
was imminent was the impending operation of a statute intended to limit the
agency’s discretion (under DOE’s interpretation), which cannot constitute a threat
to the public interest . . . . Therefore, because the February 2 delay was promulgated
without complying with the APA’s notice-and-comment requirements, and
because the final rule failed to meet any of the exceptions to those requirements, it
was an invalid rule.
Id.
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in the process for suspending the rule.311 The court provided two reasons
for rejecting this argument: first, that the notice and comment procedure
concerning the new rule did not address whether the original rule should
have been suspended; and second, that if the suspension was not effective
without notice and comment, the anti-backsliding provision rendered the
replacement standards substantively invalid regardless of the process
employed.312
Abraham apparently rejects one of the common justifications used by
incoming administrations to act without notice and comment when they
delay rules that have already been published—namely, that the incoming
administration needs time to review rules with imminent effective dates. If
the agencies are a single entity before and after the transition, then this
argument is basically unintelligible—the agency has already fully considered
the rule during the initial notice and comment process. Under Abraham,
rather than simply announcing that the prior administration’s published
midnight rule is suspended, the incoming administration may have to
conduct notice and comment rulemaking to prevent the rule from taking
effect.313 This might be impossible in some situations when there is inadequate time for notice and comment before the midnight rule is scheduled to
go into effect.
In another case, discussed above, the Court of Appeals for the Fourth
Circuit found an agency’s suspension of a midnight rule314 contrary to the
APA, but not on grounds applicable to most midnight rule suspensions. In
North Carolina Growers’ Ass’n, Inc. v. United Farm Workers,315 the court
affirmed the grant of a preliminary injunction against the suspension, with
311.
Id. at 206, n.14.
312.
Id.
313.
In most situations, an incoming administration would still be able to revise a
midnight rule by conducting a new notice and comment process. If the incoming administration conducts a new notice and comment rulemaking, it doesn’t really matter whether the
original rule had gone into effect—the second rule would replace the original rule through
the normal process of rulemaking. In Abraham, however, because of the relevant statute’s
anti-backsliding provision, the incoming administration might not have had the power to
revise the standard at all, even via notice and comment rulemaking, at least if the revision
would impose less stringent efficiency standards. With the anti-backsliding provision, even a
new notice and comment process could not replace the old rule with a less-protective one.
314.
See Temporary Agricultural Employment of H-2A Aliens in the United States, 73
Fed. Reg. 77,110 (Dec. 18, 2008) (to be codified at 29 C.F.R. pts. 501, 780, 788). This example is discussed at various places in Copeland’s CRS report. See Copeland, supra note 22, at
22, 32.
315.
N.C. Growers’ Ass’n, Inc. v. United Farm Workers, 702 F.3d 755 (4th Cir. 2012),
aff ’g N.C. Growers’ Ass’n, Inc. v. Solis, 644 F. Supp. 2d 664 (M.D.N.C. 2009). The Court of
Appeals also rejected a purported class action counterclaim brought by the United Farm
Workers to collect additional wages that temporary agricultural workers would have received
had the 2008 rule been validly suspended. See id.
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notice and comment, of a midnight rule concerning visas for temporary
agricultural workers. In the notice requesting comments on the possibility
of suspension, the Department of Labor stated that the suspension was
necessary because it did not have the time or resources to implement the
new rule.316 The court found that the Department of Labor had violated
the APA by suspending the rule and putting back into place a prior rule on
the subject after it explicitly stated that it would not consider comments
on the merits of the 2008 rule or its 1987 predecessor.317 Because most
postponements or suspensions pursuant to notice and comment do not
involve the refusal to consider comments on the merits of reinstating a prior
rule, this application of APA section 553 does not necessarily affect most
suspensions or postponements of midnight rules.318
There is a body of non-midnight case law that subjects rule suspensions
to judicial review on substantive and procedural grounds.319 In a nonmidnight context, it has been held that agency action suspending a rule is
subject to judicial review, and that the agency must have a sufficient policy
justification for the suspension to meet the arbitrary or capricious standard
of judicial review.320
The GW Bush administration relied on an additional justification for
postponing effective dates without notice and comment—namely, that such
actions are “rules of procedure” exempt from the notice and comment
requirements of APA section 553. There is no case law on the specific question of whether this application of the procedural rule exception to notice
and comment is correct. As discussed below, it appears, however, that the
more general case law interpreting the exception supports the conclusion
that a brief delay in the effective date of a rule is a rule of procedure exempt
from section 553’s notice and comment requirements.
316.
Temporary Employment of H-2A Aliens in the United States, 74 Fed. Reg. 11,408
(proposed Mar. 17, 2009) (to be codified at 20 C.F.R. pt. 655, 29 C.F.R. pts. 501, 780, 788).
The proposed rule, basically restoring the substance of the pre-2008 rule, was adopted on
February 12, 2010. See Temporary Agricultural Employment of H–2A Aliens, 75 Fed. Reg.
6884 (Feb. 12, 2010). Thus, the litigation concerned the 2009 growing season only.
317.
N.C. Growers’ Ass’n, Inc., 702 F.3d at 769–70.
318.
In a concurring opinion, Judge Wilkinson recognized the midnight rulemaking
context of the case. See North Carolina Growers’ Ass’n v. United Farm Workers, 702 F.3d
755, 771–72 (4th Cir. 2012) (Wilkinson, J., concurring). He noted that the changing rules
were the result of a political “seesaw” between employers and agricultural workers and that
the court’s decision was “not a matter of tying an agency’s hands in the face of a fresh electoral mandate” but rather an insistence on compliance with the APA. Id. at 772. In his view,
“[t]o have approved the process at issue in this case . . . would have been to generate a
blueprint for agency unaccountability, at odds with the very idea that government at all
levels is subject to the written law.” Id.
319.
See O’Connell, supra note 16, at 530 n.198.
320.
See Pub. Citizen v. Steed, 733 F.2d 93, 105 (D.C. Cir. 1984) (voiding the suspension of tire treadwear grading requirements).
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There is no authoritative understanding of the meaning of the procedural rule exception to the notice and comment requirement. In early cases,
the courts appear to have focused on whether a rule had a substantial impact
on the private party’s substantive rights—the greater the impact, the more
likely a rule would be found to be subject to section 553’s notice and comment requirements.321 In later cases, the courts recognized that many rules
that are truly procedural can have substantial impacts on regulated parties
and have moved away from an emphasis on impact toward a more direct
inquiry into the nature of the rule claimed by the agency to be procedural.
A leading case on the procedural rule exception is American Hospital Ass’n v.
Bowen.322 In that decision, the D.C. Circuit stated that in determining
whether a rule is procedural, the D.C. Circuit “has gradually shifted focus
from asking whether a given procedure has a ‘substantial impact’ on parties
to inquiring more broadly whether the agency action also encodes a substantive value judgment or puts a stamp of approval or disapproval on a
given type of behavior.”323 A brief delay of a rule’s effective date appears
procedural under this standard—the freeze does not necessarily reflect
approval or disapproval of the substance of the rule, it merely provides time
for the agency to review the rule and perhaps take further substantive
action.324
Another legal issue that incoming administrations may confront
involves the standard of review that would be applied to rescissions of, or
amendments to, midnight rules that have become final. In general, a rule is
considered to be final upon publication in the Federal Register, and once that
321.
See, e.g., Pickus v. U.S. Bd. of Parole, 507 F.2d 1107, 1112–13 (D.C. Cir. 1974).
322.
Am. Hosp. Ass’n v. Bowen, 834 F.2d 1037 (D.C. Cir. 1987).
323.
Id. at 1047 (citation omitted). At the Supreme Court, Lincoln v. Vigil, 508 U.S. 182
(1993), held that a decision closing a health clinic serving needy Indian children and reallocating the clinic’s resources to a national program was a rule of agency organization or a
general statement of policy and thus exempt from the APA’s notice and comment requirement despite the fact that the decision had a substantial impact on those who had previously
obtained services at the clinic.
324.
Consistent with the move away from considering the impact of a rule when
determining whether it is procedural under the APA, the D.C. Circuit has held that rules
with great impact on private parties may nonetheless be procedural. See, e.g., Bachow
Commc’ns, Inc. v. FCC, 237 F.3d 683 (D.C. Cir. 2001). The rules held procedural in Bachow
prohibited broadcast license applicants from amending their applications to cure substantive
problems and shortened the period that the FCC would wait before processing applications
(to make sure no mutually exclusive application precluded a license grant). Id. These cases,
especially Bachow, lend support to the argument that a rule delaying the effective date of
another rule is procedural. Although this conclusion means that agencies are legally free to
impose these delays without notice and comment, ACUS has recommended in the past that
agencies voluntarily use notice and comment when promulgating rules of procedure. ADMIN.
CONF. OF THE U.S., RECOMMENDATION 92-1: THE PROCEDURAL AND PRACTICE RULE
EXEMPTION FROM THE APA NOTICE-AND-COMMENT RULEMAKING REQUIREMENTS
(1992).
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happens, a new rulemaking is necessary to amend or rescind the rule.
Incoming administrations always have the option of rescinding or revising
midnight rules by conducting a new notice and comment rulemaking. As a
substantive matter, rules rescinding or amending other rules must meet the
standard of review applicable to rules made under the particular statute
involved.325 In State Farm, the Supreme Court rejected the argument that
rescissions should be reviewed on an extra-deferential standard (the argument being that because rescissions are deregulatory in operation, they
should be treated like decisions not to regulate).326 Rather, the Court held
that rescissions should be reviewed under the arbitrary and capricious
standard that applies to most rules issued after notice and comment.327
State Farm was originally understood to be a potentially serious impediment to rescission or revision of midnight rules. More than one scholar
interpreted State Farm as placing serious restrictions on agencies’ ability to
rescind or amend their rules.328 Under this understanding of State Farm, the
existing rule constituted the regulatory baseline, and any change would need
to be supported by reasons that made the new rule better than the old rule.
Recently, the Supreme Court has clarified that this reading of State Farm
was erroneous. In FCC v. Fox Television Stations, Inc., the Court read the
APA to more freely allow revision and rescission of rules than was previously
thought.329 Under Fox, although agencies must display awareness that they
are making a change, the new rule is not judged as to whether it is a better
325.
See Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 41
(1983) (stating that the procedural and judicial review provisions of the APA apply to orders
establishing, amending, or revoking standards under the National Traffic and Motor Safety
Act because the Act does not suggest a “difference in the scope of judicial review depending
upon the nature of the agency’s action.”).
326.
See id. at 40–44.
327.
Id. at 42–43.
328.
See Beermann, supra note 10, at 1010; Loring & Roth, supra note 11, at 1457.
329.
FCC v. Fox Television Stations, Inc., 556 U.S. 502, 514–15 (2009). In Fox Television, the Court stated that the understanding that State Farm significantly restricted agencies’
ability to amend rules was based on a misreading of a key passage in the State Farm opinion.
That passage stated that rescission of a rule requires “a reasoned analysis for the change
beyond that which may be required when an agency does not act in the first instance.” Id. at 514
(emphasis added) (quoting State Farm, 463 U.S. at 42). This, according to the Court in Fox
Television, “neither held nor implied that every agency action representing a policy change
must be justified by reasons more substantial than those required to adopt a policy in the
first instance.” Id. In other words, the passage in State Farm was misread to imply that
agency decisions to alter existing policy required greater justification than initial agency
decisions to impose regulations. What the State Farm Court actually said was that agency
decisions to alter existing policy needed greater justification than decisions not to act in the
first instance. Decisions to not act in the first instance are normally reviewed under a highly
deferential version of arbitrary, capricious review. See Massachusetts v. EPA, 549 U.S. 497,
527–28 (2007). Decisions to impose new regulatory burdens or alter existing ones are
normally reviewed under the standard version of the arbitrary, capricious standard.
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rule than the prior rule, but rather, whether it is adequately supported by
the rulemaking record.330 After Fox, incoming administrations have more
perceived freedom to rescind and revise midnight rules than was previously
thought to exist under State Farm, although as noted, notice and comment is
probably required to change or rescind any rule that has already been
published in the Federal Register at the time of the transition.
3. The Florida Courts’ Reactions to Midnight Rulemaking
Although it is not directly relevant to the legal issues surrounding midnight rulemaking in federal agencies, it is worth considering a recent
controversy in the State of Florida that occurred when a new governor took
steps similar to those taken by incoming presidents. Upon taking office in
January 2011, Governor Rick Scott issued an executive order suspending all
rulemaking in the state and establishing a centralized review mechanism
similar to that employed at the federal level under Executive Order No.
12,866 and related orders, to be administered by the Office of Fiscal
Accountability and Regulatory Reform (OFARR).331 After the transition
period was over, Scott replaced this order with an order omitting the
suspension of rulemaking, but reiterating that all rules must be reviewed by
the OFARR before issuance.332 These orders were challenged in state court,
and the Florida Supreme Court decided that the governor lacked the power
to suspend rulemaking and require that rules be submitted to centralized
review before promulgation.333 In so holding, the Florida Supreme Court
found that rulemaking is essentially a legislative function with which the
governor could not constitutionally interfere:
[T]he Governor’s executive orders at issue here, to the extent each
suspends and terminates rulemaking by precluding notice publication and other compliance with Chapter 120 absent prior approval
from OFARR—contrary to the Administrative Procedure Act—
infringe upon the very process of rulemaking and encroach upon
the Legislature’s delegation of its rulemaking power as set forth in
the Florida Statutes.334
330.
Fox, 556 U.S. at 515.
331.
Fla. Exec. Order Nos. 2011–01 (Jan. 4, 2011), available at http://www.flgov.com/
wp-content/uploads/orders/2011/11-01-rulemaking.pdf.
332.
Fla. Exec. Order Nos. 2011–72 (Apr. 8, 2011), available at http://www.flgov.com/
wp-content/uploads/orders/2011/11-72-fiscal.pdf.
333.
See Whiley v. Scott, 79 So. 3d 702 (Fla. 2011).
334.
Id. at 713.
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The Florida court further explained:
Executive Orders 11–01 and 11–72 supplant legislative delegations
by redefining the terms of those delegations through binding directives to state agencies, i.e., first by suspending and terminating
rulemaking, second, by requiring agencies to submit to OFARR
any amendments or new rules the agency would want to propose,
and then by causing OFARR to interject itself as the decisive entity
as to whether and what will be proposed.335
If federal courts followed this reasoning, presidential authority to act
against midnight rules, and more generally to supervise the rulemaking
process, would be in doubt. This seems extremely unlikely, because the
principles of Florida law, upon which the Florida Supreme Court relies, do
not appear to be consistent with the federal understanding of presidential
power. Although the legality of centralized review was attacked in the
aftermath of Reagan’s issuance of Executive Order No. 12,291, such review
is now an accepted element of the federal administrative process. Further,
although early cases may have understood rulemaking as a quasi-legislative
function, the current understanding seems to be that the President has a
great deal of authority to supervise the execution of the law as delegated to
agencies by legislation. In sum, federal law is not likely to follow Florida’s
precedent as exemplified by the acceptance of withdrawal of rules before
publication pursuant to presidential directives.
4. Summary and Conclusions Concerning the Legality of Reactions
to Midnight Rulemaking
First, it is lawful for incoming administrations to withdraw rules that
have been submitted to the Federal Register but not yet published and to
order executive branch agencies not to submit any new rules to the Federal
Register until an appointee or designee of the new administration has
reviewed them. Both the OLC opinion and the weight of judicial decisions
support the view that the APA does not prescribe any procedure for withdrawing a submitted rule before publication. The only uncertainty
regarding the first half of this proposition is the view expressed by the
district court in the Xin-Chang336 decision, that publication is a formality
and that a rule, at least one benefiting a member of the public, becomes
effective when it is finalized at the agency; this view was not completely
rejected by the Second Circuit. As to rules that had not been submitted to
335.
Id. at 715.
336.
Xin-Chang v. Slattery, 859 F. Supp. 708 (S.D.N.Y. 1994), rev’d, Zhang v. Slattery,
55 F.3d 732 (2d Cir. 1995).
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the OFR for publication at the time of the transition in administrations, the
power to delay agency action while the new administration puts its officials
into place is inherent in the President’s role as the superintendent of the
executive branch. The only caveat here is that legislative and judiciallyimposed deadlines should be observed. However, even when such deadlines
exist, agencies are often able to delay the rulemaking process because courts
do not tend to order immediate compliance with deadlines.337
Second, the power of agencies to delay the effective dates to simply
allow the new administration to review rules that have been published but
have not yet reached their effective dates without notice and comment is
uncertain. The weight of the authority is mixed on whether notice and
comment is required to delay the effective date of a published rule. The
weight of the case law supports the view that a delay in the effective date of
a published rule is itself a rule presumptively subject to the APA’s notice
and comment requirements.338 There is also support for the contrary view
that a delay in the effective date of a rule is not itself a rule subject to the
APA’s procedural requirements. Assuming that delays are rules, it is less
clear whether rules delaying the effective dates of published rules are within
any of the APA’s exceptions to the notice and comment requirement. What
little case law there is appears to reject the view that the desire of the new
administration to review midnight rules before they go into effect provides
good cause to proceed without notice and comment.339 The GW Bush
administration may, however, have been correct that a brief delay in the
effective date of a rule can be considered a rule of agency procedure, unless
the delay appears to embody value judgments about particular types of
conduct.340 However, a lengthy delay, or a second delay targeting a particular rule for revision, may not be viewed as procedural and may require
notice and comment. Further, courts may require agencies to support delays
with reasons consistent with the policies embodied in the substantive
statutes involved.
337.
See, e.g., Pub. Citizen Health Research Grp. v. Chao, 314 F.3d 143, 159 (3d Cir.
2002) (establishing mediation process to determine schedule for promulgation of rule held
to have been unreasonably delayed).
338.
See Natural Res. Def. Council, Inc. v. EPA, 683 F.2d 752, 761–62 (3d Cir. 1982);
Council of S. Mountains, Inc. v. Donovan, 653 F.2d 573, 580 (D.C. Cir. 1981) (per curiam).
339.
See Natural Res. Def. Council v. Abraham, 355 F.3d 179 (2d Cir. 2004); Natural
Res. Def. Council, 683 F.2d 752. Council of Southern Mountains, Inc. v. Donovan, 653 F.2d 573
(D.C. Cir. 1981), approved a delay in the effective date of a rule without notice and comment,
but only because there were serious questions about the availability of equipment necessary
to comply with the rule, and the rule’s effective date was imminent.
340.
See Am. Hosp. Ass’n v. Bowen, 834 F.2d 1037, 1047 (D.C. Cir. 1987).
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C. The Bush Administration’s Effort to Curb
Its Own Midnight Rulemaking
On May 9, 2008, Bush Chief of Staff Josh Bolten issued a memorandum
(the “Bolten Memo”) directed to “Heads of Executive Departments and
Agencies” under the subject heading “Issuance of Regulations at the End of
the Administration,” directing them to propose any remaining rules by June
1, 2008, and to finalize all rules by November 1, 2008.341 The Bolten Memo
clearly explained the reason for establishing this timetable: after reciting the
Administration’s approach to regulation, the memorandum stated, “[w]e
need to continue this principled approach to regulation as we sprint to the
finish, and resist the historical tendency of administrations to increase regulatory
activity in their final months.”342
The June 1 deadline for proposing rules and the November 1 deadline
for finalizing rules would mean that the GW Bush administration would
issue virtually no midnight rules under the definition used in this Article.
All proposals would be public and subject to comment well before the
election, and all rules would be issued before the election, eliminating the
possibility that rules were held back until after the election to avoid political
consequences.
These deadlines might also, for several reasons, have the effect of
increasing the durability of rules that might otherwise have been issued
later. First, there would be no unpublished rules subject to simple
withdrawal from the Federal Register by the succeeding administration, since
the November 1 deadline would ensure that all finalized rules would be
published in the Federal Register. Second, rules finished by November 1
could theoretically all be final and in effect before the transition. The APA
requires at least thirty days between publication and effectiveness, and the
CRA requires sixty days for rules to which it applies. Assuming no additional particular statutory constraints, any rule that is issued by November 1
could be fully effective by January 1.
It does not appear that the schedule anticipated by the Bolten Memo
would prevent Congress from disapproving rules under the CRA. Due to
the way that certain features of the CRA interact with congressional procedures, it is impossible to know in advance the exact cutoff date between
rules that are subject to action by the new Congress under the CRA and
rules that are not. A report prepared by the CRS concluded the following
341.
Memorandum from Joshua B. Bolten, White House Chief of Staff, to Heads of
Exec. Dep’ts and Agencies (May 9, 2008), available at http://www.whitehouse.gov/sites/
default/files/omb/assets/omb/inforeg/cos_memo_5_9_08.pdf. This Memorandum is reproduced in the Appendix to this Article, available at http://www.mjealonline.org/documents.
342.
Id. (emphasis added).
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concerning the effect of the Bolten Memo’s deadlines on Congress’s power
under the CRA:
If Congress follows [its] general pattern in the second session of
the 110th Congress, the data suggest that any final rule submitted to
Congress after June 2008 may be carried over to the first session of
the 111th Congress, and may be subject to a resolution of disapproval during that session. However, the starting point for the carryover
period could slip to late September or early October if an unprecedented level of congressional activity occurs late in the session.343
The Bolten Memo did not succeed in eliminating midnight rulemaking
in the GW Bush administration, but it reduced it at least somewhat.
According to Susan Dudley, OIRA Administrator at the end of the GW
Bush administration, the number of post-election rules issued in 2008–09
was 100, compared to 143 in 2000–01.344 The number of post-election
economically significant rules was much closer: 27 in 2008–09, compared to
31 in 2000–01.345 The final three weeks of the GW Bush administration
were much less busy than the same period during the Clinton administration, with 20 final rules issued in 2008–09, compared to 72 final rules in the
final 3 weeks of the Clinton administration.346
Dudley also reports that the deadlines in the Bolten Memo were
received with displeasure, both by political appointees and by career officials,
who, as she reports, “had worked hard on many of the regulations nearing
the finish line, and were disappointed when they did not make it across
before January 20.”347 There was great pressure to waive the deadlines,
which the Bolten Memo had promised would occur only in “extraordinary
circumstances.”348 Dudley reports that Bolten decided to allow waivers in
four circumstances. First, in what appears to be the largest category of
waivers, the deadline was waived for “draft final regulations submitted to
OIRA for interagency review before mid-October (two weeks before the
deadline to issue a final rule), [and] OIRA and the agencies worked expeditiously to conclude review.”349 Second, an exemption was provided for
“[f]inal regulations that an agency identified as a high priority and had
provided adequate public notice and opportunity for comment (generally
343.
HALCHIN, supra note 30, at 7.
344.
See Susan E. Dudley, Regulatory Activity in the Bush Administration at the Stroke of
Midnight, THE FEDERALIST SOC’Y, 28 (July, 2009), http://www.fed-soc.org/doclib/
20090720_Engage102.pdf.
345.
Id.
346.
Id. at 29.
347.
Id. at 27.
348.
Bolten, supra note 126.
349.
Dudley, supra note 344, at 28.
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defined as having met the June 1 deadline for publication of the proposed
rule) . . . .”350 Third, “[r]egulations that faced statutory or judicial deadlines
were also granted exceptions, even if they did not meet the first two
criteria . . . .” Fourth, “regulations that were considered presidential priorities” were also exempted.351 Dudley summarizes the effects of the memo as
follows:
[M]idnight regulations are inevitable. But the Bolten memorandum, which supported OIRA’s efforts to impose some restraint on
last minute regulatory activity, had a positive effect. If nothing else,
the early efforts to counteract the midnight regulation tendency
spread out the completion of regulations over a longer period,
providing more time for constructive interagency review. For the
most part, the criteria for receiving an extraordinary circumstance
exemption also ensured an opportunity for public comment.352
Dudley recommends that future administrations issue similar memoranda,
perhaps earlier in their administrations, to reduce midnight rulemaking as
much as possible.353
The Bolten Memo was viewed by some as concerned less with eliminating midnight rulemaking than immunizing rules from easy alteration or
rescission by the next administration.354 This would be the case if there were
a rush to issue a higher than normal number of rules just before the earlier
deadline established by the memo. In 2008, the final full year of the GW
Bush administration, O’Connell found 649 final actions by cabinet agencies
and 118 actions by executive branch agencies, for a total of 767 total final
actions.355 For comparison purposes, in 2000, the final full year of the Clinton administration, cabinet agencies completed 694 actions and executive
branch agencies completed approximately 159 final actions, for a total of 853
350.
351.
Id.
Id.
352.
Susan Dudley, Observations on OIRA’s Thirtieth Anniversary, 63 ADMIN. L. REV.
113, 124–25 (2011).
353.
See id. at 125; Telephone Interview with Susan Dudley, former OIRA Adm’r (Nov.
15, 2011).
354.
See Christopher Carlberg, Essay, Early to Bed for Federal Regulations: A New Attempt to Avoid “Midnight Regulations” and Its Effect on Political Accountability, 77 GEO. WASH.
L. REV. 992, 997–98 (2009); O’Connell, supra note 16, at 504 (characterizing Bolten Memo
as one of GW Bush’s “unprecedented steps to make the rules issued in his final year harder
to overturn”). Carlberg does recognize that “placing a moratorium on federal regulations
during the [M]idnight [P]eriod increases political accountability . . . by prohibiting regulation promulgation during the period the outgoing President is least politically accountable.”
Carlberg, supra at 1001.
355.
These figures are drawn from the text of O’Connell’s article, supra note 16, at 503,
and from supporting data supplied by O’Connell and on file with the author of this Article.
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actions.356 The difference in the number of final actions between the two
administrations (86) is substantial, but not overwhelmingly large. The total
difference in late actions by the two administrations is greater because of
the higher number of rules issued during January by the outgoing Clinton
administration than by the GW Bush administration during its final three
weeks in office.357
The overall picture of late-term rulemaking in the GW Bush administration shows a clear increase in action near the end of the term, even in
the final quarter when, had it been enforced, the Bolten Memo would have
sharply limited rulemaking. The GW Bush administration actually promulgated more economically significant rules in its final quarter than the
record-setting Clinton administration had eight years earlier:
In terms of presidential transitions, cabinet departments finished
more important actions in the last quarter of President Clinton’s
Administration (83 actions) than in any other quarter in the data
for that presidency (the next highest was the second quarter of
1996 with 55 actions). Similarly, cabinet departments and executive
agencies promulgated more final actions (95 and 22 actions, respectively) in the final quarter of President George W. Bush’s
Administration than in any other quarter of his presidency (the
next highest were 72 and 20 actions in the third quarter of the
final year for cabinet departments and executive agencies,
respectively).358
Thus, because many waivers were granted, the effect of the Bolten
Memo appears to be a modest shift of rulemaking to earlier in the GW
Bush administration’s final year. If that is an accurate depiction, then the
Bolten Memo would have addressed only one set of concerns related to
midnight rulemaking, that of delaying the issuance of rules until after the
election to avoid accountability. It would not have addressed the other set of
concerns related to the quality of midnight rules. To the extent that agencies increased the volume of rulemaking and rushed to complete rules
before a slightly earlier deadline, the concerns over the quality of the rules
would be exactly the same if the deadline had been Inauguration Day, as in
prior administrations.
It remains to be seen whether the Bolten Memo will set a precedent for
future administrations. The Obama administration did not issue a similar
directive in 2012 while President Obama was standing for re-election. Now
356.
357.
358.
E-mail from Anne Joseph O’Connell, supra note 107
See supra Section III.B.
O’Connell, supra note 16, at 504.
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that President Obama has been reelected, the opportunity for a directive
like the Bolten Memo will arise in 2016.
V. RECOMMENDATIONS
The Administrative Conference has adopted a set of recommendations
to Congress and agencies relating to the problem of midnight rules. In this
Part, I analyze the strengths and weaknesses of reforms others have
proposed. In the next Part, I provide the Administrative Conference’s
recommendations.
A. Prior Reform Proposals
There have been many proposals for reform of midnight rulemaking,
some directed at limiting the ability of outgoing administrations to engage
in midnight rulemaking and others at enhancing the ability of incoming
administrations to revise or rescind midnight rules.
The simplest proposal that has been floated is for Congress to simply
prohibit midnight rulemaking. Congress could statutorily prohibit rulemaking during the period between Presidential Election Day and Inauguration
Day. This was suggested by Federal Circuit Judge Jay Plager in a debate
reported in the spring 2001 issue of Administrative Law & Regulatory
News.359 Judge Plager suggested:
[One possible] measure would be to have Congress pass a law prohibiting submission of final regulations during the interregnum. Or
Congress might permit publication of regulations during this
period but subject them to special rules, such as automatically
extending them, making them subject to extension without notice
and comment, attaching a presumption of irregularity to them, or
denying them Chevron deference.360
Prohibiting all final rules during the midnight period is unrealistic.
Most midnight rules are routine and are required to implement statutes.
Prohibiting all rulemaking for more than two months would create a backlog that the incoming administration would have to deal with just when it
wants most to get started on its own program. Thus, although it may be
desirable to defer significant and especially controversial rulemakings until
after the transition, shutting the rulemaking process down would not be a
desirable reform.
359.
See William S. Morrow, Jr., Midnight Regulations: Natural Order or Disorderly
Governance, ADMIN. & REG. L. NEWS, Spring 2001, at 3, 18.
360.
Id.
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One legislative proposal was directed at both the power of outgoing
administrations to issue midnight rules and the power of incoming administrations to rescind them. In January 2009, Representative Jerrold Nadler
introduced a bill entitled the “Midnight Rule Act” with the stated purpose
to “delay the implementation of agency rules adopted within the final 90
days of the final term a President serves.”361 The operative provisions of this
proposal simply provided that “a midnight rule shall not take effect until 90
days after the agency head is appointed by the new President” and that
“[t]he agency head appointed by the new President may disapprove of a
midnight rule no later than 90 days after being appointed.”362 “Midnight
rule” was defined as “a rule adopted by an agency within the final 90 days a
President serves in office.”363 The bill allowed the outgoing President to
avoid the ninety-day delay by making a determination, in an executive
order, that the rule is necessary due to an imminent threat to health or
safety or other emergency, necessary to enforce criminal law, necessary for
national security, or issued pursuant to a statute implementing an international trade agreement.
This proposal would provide the incoming administration with a powerful tool to deal with midnight rules, but although it might provide the
basis for reform, it suffers from some weaknesses that should give pause.364
For one, the bill’s language does not provide exceptions for instances in
which the incoming administration would rather have the midnight rules go
into effect immediately, for example, if the incoming administration is of
the same party, likes the rules, or if midnight rules were the product of
cooperation between the incoming and outgoing administrations. At a minimum, any reform along the lines of this proposal should allow the
incoming administration the option of putting midnight rules into effect
immediately. Another problem is that the proposal fails to account for rules
for which a delay may be legally questionable or unnecessary. There is, for
example, no indication that rules required by statutory deadlines or court
orders are exempt. The most significant problem with the proposal is that
the incoming administration’s only option is to disapprove the midnight
rule or allow it to go into effect as written. There is no option to revise a
midnight rule. This means that if the new agency head concludes that a rule
is necessary, even one that is very close to the one promulgated by the prior
administration, the agency must either accept the imperfect rule or engage
in a new rulemaking proceedings to promulgate what might be an only
361.
Midnight Rule Act, H.R. 34, 111th Cong. (2009).
362.
Id.
363.
Id.
364.
For a more complete analysis of Representative Nadler’s proposal, see Beermann,
supra note 143.
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slightly different rule. It would be preferable if the incoming administration
could issue a new rule based on the original rulemaking record,365 supplemented by comments solicited by the incoming administration.
Another proposal aimed at the power of outgoing administrations was
made by Brito and de Rugy. Their proposal grows out of their concern that
during midnight periods, institutional review mechanisms are overwhelmed
by the high volume of rules. They are most concerned with review of significant rules by OIRA under Executive Order No. 12,866.366 Their proposal is
to “cap the number of significant regulations an agency is allowed to submit
to OIRA during a given period.”367 They assert that this reform could be
accomplished either by executive order or by a statute, although given that
they recommend a flexible cap based on resources available to OIRA, it
seems more realistic that the cap would be imposed and administered by the
executive branch.368
Assuming that the volume of rules during the midnight period is a serious problem, Brito and de Rugy’s proposal to cap the number of significant
rules each agency is allowed to submit to OIRA does not seem like an effective reform. To allow for the usual increase in regulatory activity as the
deadline approaches, the authors suggest that the “number should be well
above the ‘normal’ levels of regulatory activity we see during non-midnight
periods . . . .”369 If each agency is allowed to submit rules to OIRA “well” in
excess of the norm during non-midnight periods, this proposal would apparently allow for a great deal of midnight rulemaking, perhaps dampening
but not resolving the problem. Further, it is unclear exactly how much
dampening would occur if rulemaking “well above the normal levels” would
still be allowed.
On another level, the focus on OIRA review seems misplaced. OIRA
review is not a legislatively mandated element of the rulemaking process.
Given that OIRA review was created by an Executive Order, each President
has the unilateral power to abolish it with the stroke of a pen. Rather, it is
part of each President’s internal management of the regulatory system.
Congress has enacted many procedural and substantive requirements for
rulemaking, but it has not required that all regulations or even all significant
regulations go through a review process like OIRA review. The party of
interest in OIRA review is the President, and it is up to the President to
365.
See Ronald M. Levin, More on Direct Final Rulemaking: Streamlining, Not CornerCutting, 51 ADMIN. L. REV. 757, 765 (1999) (arguing that agencies may reconsider recently
promulgated rules without notice and comment).
366.
Exec. Order No. 12,866, 3 C.F.R. 638 (1994), reprinted as amended in 5 U.S.C. §
601 app. at 745 (2006) and 5 U.S.C. § 601 app. at 108 (Supp. IV 2010).
367.
BRITO & DE RUGY, supra note 50, at 18 (emphasis omitted).
368.
Id. at 19.
369.
Id. at 18.
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determine whether the somewhat more rapid review during the midnight
period is adequate. Perhaps a revised Bolten Memorandum could incorporate this suggestion, but it seems to be an unlikely subject of legislation,
given that Congress has not mandated OIRA review under any
circumstances.
A less drastic and more complex suggestion made by Andrew Morriss
and his co-authors is to place regulators on a “budget” and limit their regulatory activity during the midnight period to that allowed by the budget.370
This proposal is consistent with the desire to reduce the amount of midnight rulemaking that is shared by many. The main concern with this
proposal is whether it is necessary given the routine nature of much rulemaking even during the midnight period and whether it would be effective
at curbing the midnight rules that critics believe ought to be curbed, since
agencies could spend their budgets on the most controversial midnight rules
and leave the routine rules to the incoming administration.
Additional proposals have been aimed at enhancing the power of
incoming administrations to deal with the midnight rules left behind. As
discussed above, the legality of the common strategies administrations have
employed to deal with midnight rules is subject to some doubt, especially
the practice of postponing the effective dates of published rules without
notice and comment. In this regard, Judge Plager suggests either automatically suspending midnight rules or making them subject to suspension
without notice and comment.371 As discussed above, the last several incoming administrations have taken this step, and its legality has not been
definitively established, one way or the other. This modest reform would
allow the incoming administration the power and time to reexamine
midnight rules to ensure that they are consistent with the administration’s
policy and not the product of a rushed regulatory process.
Andrew Morriss and his co-authors suggest a related but more substantial reform. Their suggestion is “[m]aking regulations issued ‘at midnight’
(after the election, for example) able to be repealed without a new rulemaking process but simply by issuing a notice in the Federal Register . . . .”372
This is similar to Representative Nadler’s legislative proposal, and it suffers
from the same defect, that it does not appear to allow the incoming administration to take the less drastic step of amending midnight rules and then
allowing them to go into effect as amended. Perhaps the authors would view
this as a friendly amendment to their suggestion, since it is designed, as is
their proposal, to enhance the power of incoming administrations to deal
with midnight rules. The authors make an alternative, related suggestion,
370.
371.
372.
Morriss et al., supra note 70, at 597.
Morrow, supra note 359.
Id.
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that “[r]ules might also be prohibited from going into effect for a period
after the new administration was inaugurated, allowing withdrawal of proposed final rules without new rulemaking.”373 This proposal is based on the
assumption that the incoming administration has the power to withdraw any
published midnight rule before its effective date. That assumption is doubtful and thus if enacted, the reform should include both the extension of the
effective date of all rules issued during the midnight period and an explicit
grant of power to the new administration to withdraw any rules before their
effective dates.
It has also been suggested that incoming administrations might encourage Congress to use the CRA to override midnight rules.374 As discussed
above, the CRA has been used only once, to void Clinton’s ergonomics rule.
While this may support the notion that the CRA is more likely to be successfully used when a new President has taken office and is willing to sign
the resolution of disapproval, the CRA has not proven to be a useful tool to
combat midnight rulemaking. It has been suggested that a new President
could, independent of the CRA, submit a bill to Congress containing a
package of midnight rules that the incoming administrations recommends
Congress legislatively reject.375 This seems even less likely to succeed in
Congress than CRA rejection, since there is likely to be a group in Congress that supports at least one of the rules in the package and has sufficient
strength to prevent passage of the bill. Legislative disapproval thus does not
seem to be a likely avenue for combating midnight rulemaking.
Another question related to possible reforms is whether the Bolten
Memo was desirable and, if so, whether it should be adopted as a model for
future transitions. The Bolten Memo was viewed by some as an effort to
shield the GW Bush administration’s midnight rules from reversal by the
Obama administration and as ineffective since it merely moved midnight up
to “11 PM.” To those concerned with rushed rulemaking processes, an earlier deadline poses the exact same problem as the end of the term—agencies
might rush rules through the process to beat the new “11 PM” deadline. To
critics who view midnight rules as illegitimate attempts to extend the outgoing administration’s agenda into the future, the fact that the GW Bush
administration issued fewer true midnight rules may not be sufficient, given
the high volume of rules (and proposed rules) prior to the Bolten memo’s
deadlines.
To those opposed to midnight rulemaking on principle and those concerned with the incoming administration’s need to review midnight rules,
the Bolten Memo has its virtues. GW Bush administration OIRA Adminis373.
374.
375.
Id.
See Brito & de Rugy, supra note 15, at 189–90.
Id. at 190.
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381
trator Dudley viewed the Bolten Memo as consistent with her principled
stand against midnight rulemaking.376 To those who share her view, the
specter of dozens or even hundreds of midnight rules is ugly and undermines the perceived legitimacy of the administrative state. Fewer postelection rules means less avoidance of political accountability. Additionally,
the incoming administration benefits when the outgoing administration
issues fewer rules with effective dates after the transition because it will not
need to devote resources to reviewing as many rules that have not gone into
effect as of Inauguration Day. It is likely to seem less urgent for the new
administration to review rules that have been final and in effect for several
months than to review those rules that have not gone into effect when the
administration took office.
O’Connell has discussed variants of many of the proposed reforms to
both midnight rulemaking and the responses of incoming administrations,
including making rulemaking more difficult during the midnight period;
subjecting midnight rules to less deferential judicial review; and either
explicitly requiring notice and comment before incoming Presidents suspend the effective dates of midnight rules, or explicitly exempting such
actions from notice and comment.377 She is skeptical of the utility of any of
the many reforms that have been proposed and predicts that agencies and
other political actors will react strategically to any changes:
For instance, agencies might try to evade these restrictions by
promulgating policies through informal adjudications, guidance, or
policy statements. If rescission of finalized regulations were made
more procedurally difficult, agencies might forego trying to change
the regulations and instead just refuse to enforce them. In addition,
what counts as “midnight” might be pushed back to right before an
election, creating the same problems as before. And if the reforms
were to apply to congressional as well as presidential transitions,
agencies would have little time to act without these additional
restraints.
Finally, even assuming that these proposals would be beneficial and
effective, they may not be politically feasible to implement.378
In sum, while some of the proposed reforms relating to midnight rulemaking have merit, no proposal offered to date provides an appropriate
measured response to the realities of the midnight rulemaking
phenomenon.
376.
377.
378.
Interview with Susan Dudley, supra note 353.
Supra note 16, at 972–73.
Id. at 974.
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VI. ACUS RECOMMENDATIONS379
A. Recommendations to Incumbent Presidential Administrations
1.
Incumbent administrations should manage each step of the
rulemaking process throughout their terms in a way that avoids
an actual or perceived rush of the final stages of the process.
2. Incumbent administrations should encourage agencies to put
significant rulemaking proposals out for public comment well
before the date of the upcoming presidential election and to
complete rulemakings before the election whenever possible.
3. When incumbent administrations issue a significant “midnight”
rule—meaning one issued by an outgoing administration after
the presidential election—they should explain the timing of the
rule in the preamble of the final rule (and, if feasible, in the
preamble of the proposed rule). The outgoing administration
should also consider selecting an effective date that falls ninety
days or more into the new administration so as to ensure that
the new administration has an opportunity to review the final
action and, if desired, withdraw it after notice and comment,
before the effective date.
4. Incumbent administrations should refrain from issuing midnight
rules that address internal government operations, such as consultation requirements and funding restrictions, unless there is a
pressing need to act before the transition. While incumbent
administrations can suggest such changes to the incoming
administration, it is more appropriate to leave the final decision
to those who would operate under the new requirements or
restrictions.
5. Incumbent administrations should continue the practice of sharing appropriate information about pending rulemaking actions
and new regulatory initiatives with incoming administrations.
B. Recommendations to Incoming Presidential Administrations
6. Where an incoming administration undertakes to review a midnight rule that has already been published, and the effective date
379.
These recommendations were adopted by the Administrative Conference on June
14, 2012. The recommendations are reproduced here verbatim, without the preamble.
ADMIN. CONF. OF THE U.S., ADMINISTRATIVE CONFERENCE RECOMMENDATION 2012-2:
MIDNIGHT RULES (2012), available at http://www.acus.gov/wp-content/uploads/downloads/
2012/06/Final-Recommendation-2012-2-Midnight-Rules.pdf.
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of the rule is not imminent, the administration should, before
taking any action to alter the rule or its effective date, allow a
notice-and-comment period of at least thirty days. The comment
period should invite the public to express views on the legal and
policy issues raised by the rule as well as whether the rule should
be amended, rescinded, delayed pending further review by the
agency, or allowed to go into effect. The administration should
then take account of the public comments in determining
whether to amend, rescind, delay the rule, or allow the rule to go
into effect. If possible, the administration should initiate, if not
complete, any such process prior to the effective date of the rule.
7. When the imminence of the effective date of a midnight rule
precludes full adherence to the process described in paragraph
six, the incoming administration should consider delaying the
effective date of the rule, for up to sixty days to facilitate its review, if such an action is permitted by law. Before deciding
whether to delay the effective date, however, the administration
should, where feasible, allow at least a short comment period regarding the desirability of delaying the effective date. If the
administration cannot provide a comment period before delaying the effective date of the rule, it should instead offer the
public a subsequent opportunity to comment on when, if ever,
the rule should take effect and whether the rule itself should be
amended or rescinded.
C. Recommendation to Congress
8. In order to facilitate incoming administrations’ review of midnight rules that would not otherwise qualify for one of the APA
exceptions to notice and comment, Congress should consider
expressly authorizing agencies to delay for up to sixty days,
without notice and comment, the effective dates of such rules
that have not yet gone into effect but would take effect within
the first sixty days of a new administration.
D. Recommendation to the Office of the Federal Register
9. The Office of the Federal Register should maintain its current
practice (whether during the midnight period or not) of allowing withdrawal of rules before filing for public inspection and
not allowing rules to be withdrawn once they have been filed for
public inspection or published, absent exceptional circumstances.
383
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CONCLUSION
The midnight rulemaking phenomenon has become a familiar element
of presidential transitions. Whenever an outgoing President is replaced by a
President of a different political party, there is a noticeable increase in
regulatory activity at the end of the incumbent’s term, followed by a freeze
on new rulemaking and a review of the midnight rules promulgated by the
incoming administration. Midnight rulemaking has been condemned by
commentators and media observers from across the political spectrum,
although it is not clear exactly what is wrong with the practice. There are no
strong indications that midnight rules are of lower quality than rules promulgated in non-midnight periods, and it appears that incoming
administrations have tools that are adequate to deal with those few rules
that are problematic. Clearly, however, midnight rulemaking breeds cynicism and distrust of government, and it has negative effects on the
transition of administrations. Because most rulemaking is routine and
necessary to keep the government operating, shutting down all rulemaking
activity once a new President is elected may be a cure that is worse than the
disease. Any reforms directed at midnight rulemaking should take account
of these considerations. Outgoing administrations should aim to complete
their rulemaking activities as early in the final year as possible, should
explain the timing of midnight rules, should minimize the promulgation of
controversial rules during the midnight period, and should smooth the
transition to the new administration as much as possible.
Copyright 2009 by Northwestern University School of Law
Northwestern University Law Review Colloquy
Vol. 103
COMBATING MIDNIGHT REGULATION
Jack M. Beermann
The flurry of regulatory activity by the outgoing administration of
President George W. Bush has raised, once again, the specter of midnight
regulation.1 In contrast to the late-term action of the Clinton Administration, much of the Bush Administration‘s late-term action seems to have
been more deregulatory than regulatory, but from a political and legal
standpoint, that distinction may not make much, if any, difference. While
midnight regulation provokes an instinctively negative reaction, it is not
completely clear what is wrong with it. This uncertainty arises in part because of the different reasons for midnight regulation. In my earlier work
on this subject, I identified four possible reasons for late-term action, and in
this Essay I add a fifth, although I confess a lack of knowledge on whether
this fifth reason is actually a significant factor in midnight regulation. The
original four are: (1) the natural human tendency to work to deadline, which
has been referred to in the literature as the ―Cinderella constraint;‖2 (2) hurrying to take as much action as possible near the end of the term to project
the administration‘s agenda into the future; (3) waiting to take potentially
controversial action until the end of the term when the political consequences are likely to be muted; and (4) delay by some external force that
prevented the administration from taking desired action until late in the
term. The fifth, and new, possible reason for late-term action I call ―timing.‖ Timing is a form of waiting, not based on potential negative consequences, but rather, based on the desire to achieve something positive
before the presidential election in order to help either one‘s own reelection
bid or the election prospects of the incumbent party. One can imagine, for
example, the President delivering an October surprise of favorable regulato
Professor of Law and Harry Elwood Warren Scholar, Boston University School of Law. [email protected]. © 2009, Jack M. Beermann, all rights reserved except that a license is hereby granted
for non-profit reproduction and distribution for educational purposes. Thanks to Michael Harper, Gary
Lawson, William P. Marshall, David Mason, and Nina Mendelson for helpful comments on an earlier
draft of this Essay.
1
‖Midnight regulation‖ is loosely defined as late-term action by an outgoing administration. There
are many types of midnight regulation and many reasons why the volume of administrative action tends
to increase near the end of an administration. For a detailed look at the phenomenon, see Jack M. Beermann, Presidential Power in Transitions, 83 B.U. L. REV. 947 (2003).
2
See, e.g., Jay Cochran III, The Cinderella Constraint: Why Regulations Increase Significantly during Post-Election Quarters (Mar. 8, 2001) (unpublished manuscript, on file with the Northwestern University Law Review), available at http://www.mercatus.org/PublicationDetails.aspx?id=17546 (link).
352
103:352 (2009)
Combating Midnight Regulation
ry action for the automobile industry if Michigan looks like a swing state in
the upcoming election.
Whatever the reason for midnight regulation, there seems to be a general perception that something has gone wrong when an outgoing administration takes important action while the incoming administration is waiting
to take over. Most late-term action is subject to the obvious question of
why, if the regulation was deemed so important, the administration failed to
act during the previous three or seven and three-quarters years. The lines of
normative critique of midnight regulation are fairly evinced by each of the
factors posited above. Thus, even though the Constitution leaves the incumbent in office for approximately eleven weeks after election day, the
public feels uncomfortable when an outgoing administration waits until late
in the term to take politically controversial action or loads up on late-term
actions to project its policy preferences in the future.
There is one consequence of midnight regulation that may not be completely obvious and should be highlighted. Especially as our collective experience with midnight regulation has grown, the outgoing President knows
that the incoming administration is likely to look carefully at late-term actions by the outgoing administration. President George W. Bush certainly
had plenty of experience with the time and energy it took for his administration to freeze and then review dozens of late-term actions taken by the Clinton Administration.3 Some late-term action is so likely to be overturned by
the incoming administration that the outgoing administration may have
acted merely to embarrass the new President or force the new President to
expend political capital on the matter. Before they act, outgoing administrations should take into account the distraction and energy necessarily associated with reviewing late-term actions. The President takes an oath to
―faithfully execute the office of President of the United States,‖4 and the
outgoing President arguably violates that oath if he overloads the incoming
administration with midnight rules and other late-term actions that impede
the incoming President‘s ability to ―take care that that the laws be faithfully
executed‖ immediately upon taking office.5
Taking into consideration the factors discussed above, this Essay examines possible ways to combat midnight regulation. The discussion begins with a recent proposal in Congress to restrict rulemaking activity
during the last ninety days of an outgoing administration by giving the incoming administration the power to ―disapprove‖ of regulations adopted
3
See Beermann, supra note 1, at 949 n.6 (discussing Memorandum for the Heads and Acting Heads
of Executive Departments and Agencies, 66 Fed. Reg. 7702 (Jan. 20, 2001), issued by Andrew Card,
White House Chief of Staff for the first five years of the administration of President George W. Bush,
which suspended the effectiveness of some of the midnight rules of the Clinton administration).
4
U.S. CONST. art. II, § 1.
5
See id. art. II, § 3; Jack M. Beermann & William P. Marshall, The Constitutional Law of Presidential Transitions, 84 N.C. L. REV. 1253, 1273–76 (2006).
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during those final ninety days. Part I of the Essay explains the bill and
identifies potential problems with it. Part II offers two alternative approaches: one involves a simple reform to administrative law, and the other
outlines statutory proposals that differ from the bill proposed by Representative Nadler.
I. REPRESENTATIVE NADLER‘S PROPOSAL
On January 6, 2009, Representative Jerrold Nadler of New York introduced H.R. 34.6 The fundamental provision of the bill is that no rule
adopted in the final ninety days of an outgoing administration (a ―midnight
rule‖) can go into effect until ninety days after the appointment of a new
agency head by the new President.7 The newly appointed agency head may,
during his or her first ninety days in office, disapprove of a midnight rule by
publishing a notice of disapproval in the Federal Register and providing a
notice of disapproval to ―the congressional committees of jurisdiction.‖8
However, if the new agency head takes no action within ninety days, the
midnight rule goes into effect.
Additionally, the bill contains provisions that would enable the outgoing President to put a midnight rule directly into effect. The outgoing
President can do so by declaring in an Executive Order, with separate written notice to Congress, that the rule is ―necessary because of an imminent
threat to health or safety or other emergency; necessary for the enforcement
of criminal laws; necessary for national security; or issued pursuant to a statute implementing an international trade agreement.‖9 The bill further provides that it applies retroactively to all rules issued after October 22, 2008,
which is ninety days before President Barack Obama‘s inauguration. As
these broad provisions might suggest, even a cursory reading of the bill reveals that it has some relatively serious drafting problems. Although an exhaustive enumeration is not possible in this Essay, the following discussion
focuses on a few operational issues that demonstrate why the bill is a less
than ideal solution to the midnight regulation problem.
A. Blanket Delay
The provision, imposing a blanket delay of the effective date of all
rules adopted in the last ninety days of an outgoing administration until ninety days after the appointment of a new agency head, creates several prob6
H.R. 34, 111th Cong. (2009), available at http://frwebgate.access.gpo.gov/cgibin/getdoc.cgi?dbname=111_cong_bills&docid=f:h34ih.txt.pdf (link).
7
Id. § 2(a).
8
Id. § 2(c)(2).
9
Id. § 2(b)(2). This provision is copied verbatim from the Congressional Review Act, 5 U.S.C. §§
801–808 (2006), except for the addition of the requirement that the President act by Executive Order.
The bill also provides that the outgoing President‘s determination that a midnight rule should go into
effect does not deprive Congress of its authority to reject a rule under the Congressional Review Act.
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lems. The bill‘s language does not provide exceptions for instances in
which the incoming administration would rather have the midnight rules go
into effect, for example if the incoming administration is of the same party
or in which midnight rules were the product of cooperation between the incoming and outgoing administrations. There is no provision for allowing
an incoming President to allow all or some midnight rules to go into effect
immediately.10 The bill grants only the outgoing President the authority to
place midnight rules directly into effect and only if certain conditions are
met.11 If those conditions are not met, or if the outgoing administration
would prefer to leave the issue to the incoming administration, the bill‘s
lack of flexibility would be problematic. In some circumstances, and perhaps especially in times of crisis when quick and decisive action is necessary, incoming and outgoing administrations may work together without
regard to the election and inauguration cycle. In such cases, it would likely
be beneficial to allow the incoming administration to allow midnight rules
to go into effect immediately.
The blanket delay of midnight rules may not be as politically beneficial
to the incoming President as one might think. For example, the phenomenon of ―waiting‖ until after election day may enable an outgoing President
to take actions that might benefit the incoming administration with less regard for political consequences. An outgoing President acting responsibly
may take difficult action at the end of the term to pave the way for a smooth
transition. By automatically delaying the effective date of rules in this category unless the outgoing President uses the authority discussed above to
advance the effective date, the bill would increase the political costs to the
outgoing administration and thus discourage this sort of cooperative action.
B. New Agency Head
Another problem related to the blanket delay, perhaps unlikely to occur
in most transitions, is that the bill could place midnight rules into limbo for
extended periods of time. The effective date for midnight rules is ninety
days after the appointment of a new agency head, during which time the
agency head has the authority to disapprove the rule. There is no provision
for a holdover agency head, that is, if the incoming President chooses to
keep the outgoing administration‘s agency head in place, the bill could be
read to preclude rules issued in the last ninety days of the outgoing administration from going into effect for many months or years. This may seem to
be a hyper-technical reading of the bill, but a subject of a midnight rule may
10
The new administration could avoid the provisions of the bill by re-promulgating midnight rules
immediately upon taking office, but that would take some work to make sure the process of repromulgation was done properly. Nor, in most cases, would it save much time because of the minimum
thirty or sixty days required for rules to go into effect, which would presumably start over again on repromulgation.
11
See H.R. 34 111th Cong. § 2(b) (2009).
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have a legal argument that the rule has not gone into effect if there is no
new agency head. This is obviously an unintended consequence—no one
wants to discourage a new President from keeping agency heads from the
prior administration in office. However, a lengthy delay could also result if
the appointment of a new agency head encounters a confirmation problem
or if the incoming administration falls behind in naming new agency heads.
Of course, if one views midnight rules as virtually always a scourge, then
the potential for indefinite delay will not be viewed as much of a problem.
Nevertheless, it does not seem likely that the author of the bill intended to
create the possibility of indefinite delays in the effective dates of rules.
Automatically delaying all midnight rules until the appointment of a
new agency head could also cause political problems for an incoming administration. The incoming administration would find itself in the potentially uncomfortable position of appearing responsible for every rule issued
in the last ninety days of the outgoing administration. Newly appointed
agency heads may then have to spend their first ninety days reviewing midnight rules rather than beginning to work on the new President‘s agenda.
This aspect, however, may be seen by some as a virtue. With the automatic
delay of all midnight rules, the incoming administration can at least delay
the day of reckoning until the ninetieth day after the appointment of a new
agency head. If the incoming administration was granted discretion to pick
and choose among midnight rules to delay, intense pressure may be brought
to bear at the very outset of the administration, and the new agency heads
may be forced to act with great haste in a tense environment. Thus, it is a
judgment call whether discretion is better or worse than an automatic delay,
and for reasons discussed in Part II B, in my judgment the potential benefits
of discretion arguably outweigh the potential costs.
C. Rules That Should Be Exempt
Another general problem with the bill is that it fails to account for rules
for which a delay may be legally questionable or unnecessary. First, there
is no indication that rules required by statutory deadlines or court orders are
exempt. In their transition-related regulatory review instructions to agencies, Presidents George W. Bush and Barack Obama both exempted rules
required by statutory or judicially imposed deadlines.12 Representative
Nadler‘s proposal would create a potential conflict with regard to such
rules, and the bill should either exempt them or at a minimum clarify
whether the bill‘s intent is to delay rules‘ effective dates beyond deadlines
established by statute or court order. Second, there is no mention of rules
not subject to the notice and comment procedures of the Administrative
12
See Executive Office of the President, Memorandum for the Heads and Acting Heads of Executive Departments and Agencies, 66 Fed. Reg. 7702 (Jan. 20, 2001) (from Andrew Card, then White
House Chief of Staff) (link); Executive Office of the President, Memorandum for the Heads of Executive Departments and Agencies, 74 Fed. Reg. 4435 (Jan. 26, 2009) [hereinafter Emanuel Memorandum]
(from Rahm Emanuel, current White House Chief of Staff) (link).
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Procedure Act (APA). Is the intent to include personnel rules and rules relating to government contracts, grants, and benefits, which are completely
exempt from APA § 553? What about interpretative rules, policy statements and guidance documents, which are exempt from § 553‘s notice and
comment provisions? There are good reasons, discussed in Part II below,
for not including rules that the new administration could easily alter without
notice and comment. The bill should at least address this issue.
D. Disapproval Only
A related procedural problem with the bill, equally if not more significant, is that the incoming administration‘s only option is to disapprove the
midnight rule or allow it to go into effect as written.13 There is no option to
revise a midnight rule. This means that if the new agency head concludes
that some sort of rule is necessary, even one that is very close but not exactly the one promulgated by the prior administration, the agency must either
accept the imperfect rule or engage in expensive and time-consuming rulemaking proceedings to promulgate what might be an only slightly different
rule. This can be a real waste if the rulemaking record produced by the
prior administration is likely to support the rule preferred by the new administration, given that the record will still be fresh. Thus, the bill could
lead either to waste or to a new administration allowing a suboptimal rule to
go into effect.
E. Independent Agency Rules
Another significant problem is that the bill is not very specific about
which agencies it covers, and there are good reasons to not extend coverage
of the bill to independent agencies. Because the bill would be inserted into
the APA as 5 U.S.C. § 555a, presumably the APA‘s definition of ―agency‖
would apply. This broad definition includes independent agencies such as
multi-member commissions and the National Labor Relations Board.14 The
bill does not explicitly exempt independent agencies from its coverage, but
the bill is not well-designed for application to them. First, the bill does not
13
The procedure for disapproving a rule contains a quirk that should be abandoned. It provides that
the agency head disapproving a rule does so by ―publishing a statement of disapproval in the Federal
Register and sending a notice of disapproval to the congressional committees of jurisdiction.‖ The main
problem is the requirement that notice go to the ―congressional committees of jurisdiction.‖ The agency
head should be required to send notice to Congress and allow Congress itself to decide which committees should be informed. Committee jurisdiction is a matter of legislative rule and practice, which agency heads cannot interpret authoritatively. The agency head could, as a courtesy, send notice to any
committee that is known to engage in oversight of the particular administrative function, but the effectiveness of the disapproval should not depend on the agency making an accurate determination of which
committees have jurisdiction over the matter in the disapproved rule.
14
See 5 U.S.C. § 551(1) (2006) (defining ―agency‖ to include ―each authority of the Government of
the United States‖) (link). It has never been suggested that this definition does not include the independent agencies.
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identify an ―agency head‖ for a multi-member agency. Is it the agency
chair, or a majority of the agency? Since new Presidents upon taking office
do not normally appoint new agency heads for independent agencies, if the
bill is construed to apply to such agencies, it could force independent agencies to forego issuing rules for the last ninety days of each presidential term.
Second, the midnight rule problem is not as serious with regard to independent agencies because they are bipartisan and because their members serve
for terms of years that do not coincide with the presidential election cycle.
Out of loyalty to the President, independent agencies dominated by the incumbent‘s party might time certain actions with the political consequences
to the President in mind or to avoid rejection by the next Congress. However, because independent agencies are not subject to direct supervision by
any executive branch official, they are less likely than executive branch
agencies to be acting for the reasons that contribute to the general disfavoring of midnight rules. Midnight rule reform is simply not needed for independent agencies, and the bill should address this.15
F. Other Procedural Problems
There are a few other potential procedural problems with the bill
which, though less likely to cause problems, are still worth addressing. The
first concerns the use of the word ―adopted‖ in the definition of ―midnight
rule.‖ A midnight rule is ―a rule adopted by an agency within the final 90
days a President serves in office.‖16 The problem is that the bill does not
contain a definition of the word ―adopted.‖ There is no indication as to
what precise event demonstrates that an agency has adopted a rule. There
are several possibilities, including publication in the Federal Register, submission to the Federal Register for publication, signing a paper indicating
that the agency has adopted a rule, and so on. Any bill on this subject
should make it crystal clear what it means for a rule to be ―adopted.‖
Further, the definition of ―midnight rule‖ creates two situations in
which it will not be immediately known upon adoption whether a rule is a
midnight rule. One situation is where the President is running for reelection, and it will not be known until after election day whether a rule adopted
before election day and less than ninety days before January 20 is a midnight rule. This is not a serious problem, because it throws into uncertainty
only rules adopted in the last two weeks before election day, and none of
these rules will have yet gone into effect since no rule‘s effective date can
be less than thirty or sixty days after adoption, depending on whether it is a
15
It should also be noted that incoming administrations have not included independent agencies in
their actions aimed that the midnight regulatory activity of their predecessors. Both the Card and Emanuel memoranda were directed to the heads of ―Executive Departments and Agencies.‖ This is probably
the result of the lack of midnight activity from independent agencies and doubts about the President‘s
authority to manage their activities.
16
See H.R. 34 § 2(a).
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major rule subject to the Congressional Review Act.17 Nonetheless, it
seems unlikely that the drafters anticipated the situation in which an agency
can adopt a rule without knowing whether it will go into effect as stated in
the rule (in as little as thirty days) or not until ninety days after inauguration
day, which could amount to a delay of 180 days.
The second situation of uncertainty involves the potential for an unexpected application of the bill when the President does not complete the
term, because of either death in office or resignation. In such cases, the bill
would seem to convert to midnight rules all rules issued in the ninety days
before the President left office, delaying their effective date until ninety
days after the new President (normally the incumbent Vice-President) appoints new agency heads. Perhaps midnight regulation concerns exist if a
President is in a political fight that appears headed for impeachment or resignation (think, for example, of Illinois Governor Rod Blagojevich‘s appointment of Roland Burris to fill Barack Obama‘s Senate seat while under
indictment and subject to impeachment proceedings) but occurrences like
this are exceedingly rare. Given that the new President, being the incumbent Vice President, is almost certainly of the same political party as the
prior President and may retain, at least for a time, many of the prior President‘s agency heads, midnight regulation should not be much of a concern,
and application of the bill would lead to the problem of prolonged delay
discussed above when no new agency head is appointed. Thus, the bill as
written could require 180 days of uncertainty even when no one thinks that
the prior President had acted for any of the reasons we normally attribute to
the midnight regulation problem.
For these reasons and more, the bill proposed by Representative Nadler
is not an attractive vehicle for midnight rule reform. However, this does not
mean that some form of midnight regulation reform is not desirable or possible. The next Part proposes some possibilities, some of which build upon
Representative Nadler‘s proposal.
II. MIDNIGHT REGULATION REFORM POSSIBILITIES
This Part raises two different tacks for dealing with midnight regulation. The first section addresses a particular feature of administrative law
that makes it difficult for an incoming administration to repudiate late-term
action by the outgoing administration. Basically, under current doctrine,
once a rule goes into effect, any change must be justified by good reasons
even if the original rulemaking record would have justified a different rule.
In the context of midnight regulation, this is an unfortunate requirement.
The Supreme Court could loosen up on arbitrary and capricious review in
cases involving changes to rules in transition periods, or even more generally in cases where the change is made soon after the issuance of the original
17
5 U.S.C. § 801 (2006) (link).
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rule, or Congress could legislatively provide for more deferential review.
The second section outlines a statutory model that would grant the incoming administration the power to review and reject or modify late-term action
by the outgoing administration, similar to the model that the administrations
of Presidents George W. Bush and Barack Obama followed when they confronted the mass of midnight regulation left behind by their predecessors.
This model is not different in principle from the bill proposed by Representative Nadler, but it employs a more nuanced approach that is more sensitive to the political and legal realities of midnight regulation. Finally, a
simpler statutory approach is raised, which would allow agencies at all
times to revise or rescind recently issued rules when unexpected negative
feedback erupts after a rule is issued.
This discussion assumes that some sort of reform to make it easier to
combat midnight regulation is desirable. However, it should be noted that
even if it is agreed that midnight rules tend to be problematic, it is not completely obvious that reform is necessary. Presidents may already have sufficient tools to deal with midnight regulation, as demonstrated by action
taken by the administrations of Presidents Ronald Reagan, Bill Clinton,
George W. Bush, and Barack Obama to combat the midnight regulatory activity of their respective predecessors.18 For example, in a memorandum
very similar to the one issued at the outset of the prior administration, on his
first day in office President Obama directed his administration not to issue
any new rules until his appointees had a chance to review them, to withdraw from publication any proposed or final rules that had been sent to the
Federal Register but not yet published, and to consider extending the effective date of published rules that had not yet gone into effect so that a new
appointee could review them.19 With regard to published rules, President
Obama‘s order directed that if the agency decided to delay the effective
date, it should immediately reopen the comment period for thirty days to allow public comment on whether changes should be made before the rule is
allowed to go into effect.
Although incoming Presidents already have tools to combat midnight
regulation, those tools may not always be up to the task. While the short
duration of a temporary suspension may often preclude resolution of a legal
challenge while the controversy remains live and justiciable, in a decision
involving the suspension of a midnight rule by the Bush Administration, the
Second Circuit held that once the rule was finalized and published in the
Federal Register, in this case on January 22, 2001—two days after President
George W. Bush took office—the rule had taken effect and could not be
suspended or altered without notice and comment.20 Thus, it appears that
18
For an extended discussion of the tools incoming Presidents have to combat midnight regulation,
see Beermann, supra note 1, at 982–94.
19
Emanuel Memorandum, supra note 12.
20
Natural Res. Def. Council v. Abraham, 355 F.3d 179 (2d Cir. 2004). This case involved a rule
regarding the energy efficiency of central air conditioning and heat pumps. The statutory structure un-
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there is at least a need for reform in the possibly rare situation in which action against midnight rules is subject to legal challenge.
A. Administrative Law Reform
The outgoing administration of G.W. Bush was careful to attempt to
shield its late-term output from revision by the incoming Obama Administration. Josh Bolten, President Bush‘s Chief of Staff, issued a memorandum on May 9, 2008, instructing agencies not to propose any new rules
after June 1, 2008 and to finalize all rules by November 1, 2008.21 The
Bush Administration portrayed this as taking the high road against midnight
regulation by avoiding the unseemly specter of rules being published in the
Federal Register up to and even past inauguration day, as had occurred at
the end of the Clinton Administration. In truth, it was part of an effort to
shield its midnight rules from the types of actions that the Bush Administration had taken against President Clinton‘s midnight rules. Rules completed
more than sixty days before inauguration day would be final and thus not
subject to a freeze or easy process of revision by the new administration.
Thus, Bolten was actually providing agencies a roadmap for avoiding what
the Bush Administration was able to do to some of the Clinton Administration‘s midnight rules.
The Supreme Court‘s application of the arbitrary and capricious standard to rescission and revision of rules has created some of the difficulties
that incoming administrations encounter when trying to undo midnight
rules. Under Motor Vehicle Manufacturers Ass’n v. State Farm Mutual Automobile Insurance Co.,22 once a rule becomes final, rescission or revision
must be justified by reasons for the rescission or revision even if the original record would have supported a different rule or a decision not to adopt
any rule.23 This understanding gives an administration a powerful tool, for
better or for worse, to project its agenda beyond the end of its term.
In State Farm, the Carter Administration‘s rule requiring passive restraints in passenger cars was promulgated in 1977, the first year of the
Carter Administration, but it did not require any car to be equipped with
derlying this rule caused it to be a particularly tricky midnight rule to deal with because under the statute, in what the court called an ―anti-backsliding‖ provision, the agency (Department of Energy) was
prohibited from ever lowering efficiency standards—new rules could only increase efficiency. Thus,
once the court held that the rule was final and effective when published in the Federal Register, the
agency was stuck with it. See id. at 197. Even if the agency had conducted a new notice and comment
period, as required for published rules by President Obama‘s directive, the anti-backsliding provision
may still have prevented the incoming administration from changing this midnight rule.
21
Memorandum from Josh E. Bolten to Heads of Executive Departments and Agencies (May 9,
2008) (on file with the Northwestern University Law Review) available at
http://www.ombwatch.org/regs/PDFs/BoltenMemo050908.pdf (link).
22
463 U.S. 29 (1983) (link).
23
See id. at 44–46.
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passive restraints until 1982, the second year of the next presidential term.24
This put the Reagan Administration in the uncomfortable position of being
the first administration to enforce this regulation even though it did not
agree with the regulation and had actually campaigned on a deregulatory
platform. When the Reagan Administration‘s new agency head attempted
to rescind the requirement, the Court did not ask whether the original rulemaking record would have supported a decision to make no rule at all. Rather, it asked whether there was sufficient new evidence or policy reasons
for rescinding the rule that had been adopted.25 As soon as the initial regulation was adopted, it became the baseline for evaluating future agency action even though it had not actually gone into effect.26
This application of the arbitrary and capricious standard should be
reexamined.27 At least with regard to rules that can fairly be characterized
as midnight regulation, when a new administration takes office, it should
have the freedom to revise or rescind rules that were adopted by the prior
administration if the original rulemaking record would have supported the
new administration‘s decision.28 The baseline should be the statute and regulatory situation before the outgoing administration acted. The possible
counterargument is that this idea pays insufficient heed to the role of agency
expertise and makes regulation look overly political. This objection, however, presumes that midnight regulation is less political than an incoming
administration‘s potential reactions to the regulation. To the contrary, there
are good reasons to believe that a great deal of late-term administrative action is political. Moreover, it is also likely, that in the rush to deadline, even
action motivated largely by expertise will contain more errors than action
24
See Modified Standard 208, 42 Fed. Reg. 34289 (July 5, 1977). There is nothing necessarily nefarious about time lines like this. It makes perfect sense in many situations for new rules to be phased,
strengthened, or even weakened over a long period of time, and in this case, the automobile manufacturers needed a substantial amount of time to prepare for compliance with the rule. Long lag times can also
facilitate the exploration of other options. For example, one feature of the passive restraint rule would
have rescinded the requirement entirely had two-thirds of states adopted laws requiring auto occupants
to wear seatbelts within a certain time. Ultimately, Congress acted to require airbags in all cars, which
is more satisfactory than agency action from a democratic standpoint.
25
See Motor Vehicle Mfrs. Ass’n, 463 U.S. at 40–44.
26
See also Natural Res. Def. Council v. Abraham, 355 F.3d 179, 197 (2d Cir. 2004) (holding that
once energy efficiency rules were published in the Federal Register, they could not be altered in way
that violated the statute‘s anti-backsliding provision).
27
Beermann, supra note 1, at 1009–15.
28
See id. at 1014. This would be procedurally similar to what often occurs when a court overturns
an agency rule on judicial review. When the problem with the rule is lack of a reasoned explanation, the
court can remand the rule to the agency for a better explanation without requiring the agency to engage
in a new round of notice and comment. See, e.g., Chamber of Commerce of U.S. v. S.E.C., 443 F.3d
890, 900 (D.C. Cir. 2006) (―Where the court does not require additional fact gathering on remand . . . the
agency is typically authorized to determine, in its discretion, whether such fact gathering is needed. . . .
If the agency determines that additional fact gathering is necessary, then notice and comment are typically required.‖); Shays v. Federal Election Comm‘n, 414 F.3d 76, 112 (D.C. Cir. 2005) (―Nothing in
our holding necessarily precludes the FEC from remedying deficiencies in its explanation and repromulgating this rule on remand.‖).
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taken under less time pressure. Thus, there are certainly practical reasons
for affording a new administration the freedom to revise or rescind midnight rules when the record would support such a change.
Additionally, two developments in administrative law lend support to
the idea that a different application of the arbitrary and capricious standard
to midnight regulation is possible within the constraints of the law. The
first is the recent recognition, under the Chevron29 rubric, that agencies are
free to reinterpret statutes even when a prior agency interpretation has been
upheld on judicial review.30 Under step two of the Chevron doctrine, which
is reached when an agency interprets an ambiguous statute, a court defers to
any reasonable statutory interpretation. The Court‘s decision in National
Cable & Telecommunications Ass’n v. Brand X Internet Services made
clear that because Chevron‘s step two is a very deferential standard of judicial review, under which various interpretations might have been upheld,
agencies are free to alter their interpretations as long as the new interpretation is also reasonable. The baseline against which the new interpretation is
judged is not the initial interpretation but the statute being interpreted.
The analogy between an agency‘s ability to reinterpret and a new administration‘s ability to revise or rescind is strengthened by the fact that the
Court understands that interpretation under Chevron is not simply a quest
for the best understanding of the words used by Congress, but instead requires choosing among plausible interpretations based at least in part on
considerations of policy. The Supreme Court recognized this in Chevron
when it stated:
In these cases, the Administrator‘s interpretation represents a reasonable accommodation of manifestly competing interests, and is entitled to deference:
the regulatory scheme is technical and complex, the agency considered the
matter in a detailed and reasoned fashion, and the decision involves reconciling conflicting policies. . . . While agencies are not directly accountable to the
people, the Chief Executive is, and it is entirely appropriate for this political
branch of the Government to make such policy choices—resolving the competing interests which Congress itself either inadvertently did not resolve, or
intentionally left to be resolved by the agency charged with the administration
of the statute in light of everyday realities.31
In its Brand X decision, the Court reiterated this understanding, stating
that filling statutory gaps ―involves difficult policy choices that agencies are
better equipped to make than courts.‖32 Thus, the Chevron doctrine—as applied in Brand X to allow an agency to adopt a new, reasonable, interpretation—represents an instance of policy alteration in which the baseline is the
original statute and situation, rather than the intervening policy that is being
29
30
31
32
Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984) (link).
Nat‘l Cable & Telecomms. Ass‘n v. Brand X Internet Servs., 545 U.S. 967, 981–82 (2005) (link).
Chevron, 467 U.S. at 865–66 (citations omitted).
Brand X, 545 U.S. at 980.
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repudiated. There is no apparent reason why an incoming administration
should not enjoy the same freedom to repudiate the late-term actions of its
predecessor as long as the new administration pursues its policies within the
limits imposed by the statutory framework.
Chevron, together with the additional instances detailed below, also
stands for the proposition that the application of the arbitrary and capricious
standard can vary with the circumstances. The APA standard of judicial review that applies to agency rules is the arbitrary and capricious standard.33
The Chevron opinion paraphrased the statutory standard but then actually
constructed what appeared to be a new standard applicable to agency statutory interpretation. The Chevron Court stated that ―legislative regulations
are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute.‖34 This is a paraphrase of the APA‘s ―arbitrary, capricious, an abuse of discretion or otherwise contrary to law.‖35
The Court inserted the word ―manifestly‖ apparently to indicate a degree of
deference to agency legal interpretations that does not appear to be provided
for in the statute as written.36
In at least two subsequent situations, the Court has explicitly endorsed
a more deferential application of the arbitrary and capricious standard based
on the context of the agency action involved. In Massachusetts v. EPA,37
which rejected the EPA‘s refusal to regulate global warming gases, the
Court explained that agency decisions rejecting rulemaking petitions are
subject to judicial review under the arbitrary and capricious standard, and
quoted with apparent approval the D.C. Circuit‘s rule that such decisions
are reviewed on a very deferential standard: ―Refusals to promulgate rules
are thus susceptible to judicial review, though such review is ‗extremely limited‘ and ‗highly deferential.‘‖38
This highly deferential version of the arbitrary and capricious review is
similar to the standard that the Court has applied when reviewing agency
refusals to bring enforcement actions (when such refusals are reviewable
because governing law contains clear criteria for when enforcement is required). In such cases, the Court has stated that review should be very narrow, that the reviewing court should ordinarily look only at the statement of
reasons the agency has provided for not bringing an enforcement action,
and that the reviewing court should not even consider the factual basis for
the decision or facts offered in opposition to the decision.39 This is a far cry
33
5 U.S.C. § 706(2)(A) (2006) (link).
See Chevron, 467 U.S. at 843.
35
5 U.S.C. § 706(2)(A).
36
See Chevron, 467 U.S. at 843.
37
549 U.S. 497, 527 (2007) (link).
38
Id. (quoting Nat‘l Customs Brokers & Forwarders Ass‘n of Am., Inc. v. United States, 883 F.2d
93, 96 (D.C. Cir. 1989)).
39
In Dunlop v. Bachowski, 421 U.S. 560, 573 (1975) (link), the Court stated that review of a refusal
to initiate enforcement action should be very narrow and should not ordinarily look at the record beyond
34
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from the usual practice in cases applying the arbitrary and capricious standard in which the reviewing court looks carefully at the facts and reasoning
underlying the decision in what has been denominated ―hard look‖ review.40
The lesson to be learned from these examples is that the arbitrary and
capricious standard is not a static principle that applies uniformly in all contexts. Rather, the Court has found it appropriate to adjust the scope of review when it finds a different standard more appropriate. While the Court
in State Farm rejected the argument that review should be relaxed when an
agency deregulates, that decision does not necessarily reject the desirability
of an adjustment when an incoming administration acts to deal with midnight regulation by its predecessor. Efforts that enable an incoming administration to easily alter a previous administration‘s late-term action may
discourage midnight regulation in the first place.
Although the focus here is on midnight regulation, this proposal for
reform should probably not be confined to revisions or rescissions by a new
administration, but might be extended to increase agency flexibility whenever an agency changes its position shortly after issuing a rule. If an agency
issues a rule that causes an outcry, either right after issuance or perhaps as a
more distant effective date approaches, there are good reasons for allowing
the agency to make revisions without having to use the initial rule as a baseline. At this early stage, the agency ought to be able to reshape the rule in
any way that would have been supportable based on the original rulemaking
record. In addition to preserving a measure of flexibility, this would also
have a desirable procedural effect. The Supreme Court adverted to the ―inherent advantages of informal rulemaking‖ when it rejected the argument
that courts have the power to require additional procedures in complicated
or important rulemaking proceedings.41 Along these lines, flexibility in the
period immediately following notice and comment would enable an agency
to issue a rule after a single notice and comment period, knowing that if the
rule provokes an unanticipated outcry, revisions supportable under the original record could still be made. Without this flexibility, agencies might be
more reluctant to make desirable revisions if such revisions would require
not only a second round of notice and comment, but also greater justification. They might be more cautious during the initial rulemaking proceedthe bare reasons offered by the agency for not enforcing. ―The necessity that the reviewing court refrain
from substitution of its judgment for that of the Secretary thus helps define the permissible scope of review. Except in what must be the rare case, the court‘s review should be confined to examination of the
‗reasons‘ statement, and the determination whether the statement, without more, evinces that the Secretary‘s decision is so irrational as to constitute the decision arbitrary and capricious. Thus, review may
not extend to cognizance or trial of a complaining member‘s challenges to the factual bases for the Secretary‘s conclusion . . . .‖ Id.
40
See Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402 (1971) (link); Motor Vehicle Mfrs.
Ass‘n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (link).
41
See Vt. Yankee Nuclear Power Corp. v. Natural Res. Def. Council, Inc., 435 U.S. 519, 547
(1978) (link).
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ing, perhaps by adding a second notice and comment period if there is any
perceived likelihood that a rule will provoke a strong negative reaction.
While some people might think more notice and comment would be a good
thing, the Supreme Court‘s preference is to follow Congress‘s model of a
short and sweet notice and comment process.42
B. Alternative Statutory Possibilities
If the Supreme Court declines the invitation to build a solution for the
midnight regulation problem into administrative law, another possibility is
for Congress to create a statutory solution along the lines of Representative
Nadler‘s proposal, but without the defects of that particular bill. The key
would be to design a proposal that discouraged the outgoing administration
from engaging in midnight rulemaking, that gave the incoming administration effective tools to deal with it, or both. Despite its limitations, Representative Nadler‘s bill could serve as the basis for a better proposal if the
problems identified in the first Part of this Essay were remedied. Most of
the problems with the bill could be solved with a few simple changes. Below are five changes that directly address the deficiencies highlighted in the
Nadler bill.
First, the bill should define midnight rules as ―final rules adopted by an
agency in the 90 days before inauguration day, i.e. October 22 through January 20 in presidential election years.‖ ―Adopted‖ should be defined as
something like ―sent to the Federal Register for publication as required by
law.‖ These changes would clarify the timing issues—that the bill should
apply only to presidential transitions in election years and that a rule is
―adopted‖ when it is put in the queue for publication in the Federal Register.
Second, the bill should give the incoming administration the option to
suspend midnight rules for a certain period after inauguration day, perhaps
sixty days, rather than suspend all midnight rules automatically. If the incoming administration takes no action within the sixty day period, the rules
should go into effect as adopted. This avoids the uncertainty of tying the
time period to the appointment of a new agency head, which may not happen at all if the incoming administration is of the same party or if there are
holdovers from the prior administration, or may not happen for a long time
if there is a delay in naming or confirming an incoming agency head. Making action optional with the new administration is preferable to a blanket
automatic suspension because it allows the incoming administration to focus its attention on issues it finds important. This could have the negative
effect of forcing the incoming administration to examine all midnight rules
quickly, but this seems to be a better alternative than a blanket suspension.
This preference is based partly on the perhaps naïve hope that future admin42
See id.; see generally Jack Beermann & Gary Lawson, Reprocessing Vermont Yankee, 75 GW. L.
REV. 856 (2007) (link).
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istrations will seek to avoid midnight rulemaking as consciousness of the
problem increases.
Third, the incoming administration should have the option to alter as
well as disapprove of midnight rules, assuming that the alteration would be
supported by the original rulemaking record. If the agency finds it advisable to make changes beyond those supportable under the original rulemaking record, the agency should have the power to suspend a midnight rule to
allow the time to conduct a new rulemaking proceeding. Under Representative Nadler‘s proposal, review is an all-or-nothing proposition. This ignores the possibility that the incoming administration will find only some of
the features of a midnight rule objectionable. It is easy to imagine the incoming administration objecting only to a limited number of features of a
large midnight rule, and there is no reason for not allowing amendments rather than wholesale rejection. Because of the fear that midnight rules may
be undesirable due to hasty drafting and excessive interest group involvement, the incoming administration should also have the time to conduct a
new rulemaking proceeding, if it decides one is necessary, without the midnight rule going into effect. Administrations have done this without specific authorization. For example, the Clinton Administration suspended the
abortion gag rule in its first week in office and did not promulgate a substitute until its last year in office.43 It would be better if the incoming administration acted with statutory authority rather than created a situation of doubt
and potential costly litigation.
Fourth, ―agency‖ should be defined in the bill to include only Executive Branch agencies and not independent agencies that are less subject to
presidential control. The worst dangers of midnight regulation relate virtually exclusively to the politics of the presidential transition. As explained
above, because independent agencies are not subject to much if any presidential control, midnight rules issued by them are less likely to be designed
to embarrass or hinder the incoming administration or to project an outgoing administration‘s policies into the future. Further, ―midnight‖ at an
independent agency may come later, when expiring terms or impending resignations shift control of the agency to members of the new President‘s party. It would be very difficult and probably unnecessary to write a statute
that identified the proper time during which an independent agency‘s rulemaking activity should be curtailed due to the possibility of midnight regulation.
Fifth, rules not subject to notice and comment should not be included
in any midnight rule reform, mainly because the incoming administration
could very easily alter any such midnight rule under current law.44 If an
43
See Beermann, supra note 1, at 963–64.
There are two sets of exceptions to the APA‘s notice and comment requirements. First, the APA
rulemaking provision does not apply to rules involving military and foreign affairs functions and rules
relating to ―agency management or personnel or to public property, loans, grants, benefits, or contracts.‖
44
http://www.law.northwestern.edu/lawreview/colloquy/2009/9/
367
NO RT HW E ST ER N U NI VE RSI T Y LAW RE VIE W C O LLOQ UY
outgoing agency issues a policy statement or interpretive rule in its waning
moments, the incoming agency can simply issue revisions without delay.
While this would have some of the negative effects of midnight regulation
discussed above, the lack of substantive effect and the ease of rescission or
amendment make midnight interpretive rules and policy statements a much
less serious problem than midnight legislative rules.
In addition to the above proposals, which are designed to cure the defects in Representative Nadler‘s approach, an alternative statutory possibility could consist of a more general reform dealing with the administrative
law issues identified in Part II.A. A provision could be crafted that would
give all agencies the power to revise or rescind rules shortly after adoption,
thereby providing for revisions based on midnight regulation problems, or
simply to allow second thoughts after promulgation even in the absence of a
transition in administrations.45 This provision could, for example, give all
agencies the power to revise or rescind rules within ninety days of adoption
without a new rulemaking proceeding if the new rule (or no rule at all)
would have been supported adequately by the original rulemaking record.
This provision has two virtues—it is simpler than one focused on the midnight rulemaking problem, and it increases regulatory flexibility in all periods, transition or not.
Finally, a far simpler proposal would be to ban outright the adoption of
final rules by executive agencies for a specified period of time prior to inauguration day, for example 120 days, with exceptions for rules required by
emergency, statutory deadline, or court order. This possibility has several
virtues. For one, it would reduce the load that incoming administrations
currently bear—there would be few or no midnight regulations to sift
through since all regulations would have been finalized longer before election day than is currently the case. While this reform might be viewed as an
empty gesture since it would merely move up the deadline, in effect, changing the clock and making midnight come a few months early in election
years has the additional virtue of placing all late-term rules in the sunshine
of the public record long enough before election day for the public to be
made aware of them. This should discourage many midnight rules that appear to be farewell gifts to interest groups. It would, however, not allow
cooperation between incoming and outgoing administrations in my ―waiting
category,‖ within which a cooperative outgoing administration clears away
5 U.S.C. § 553(a) (2006) (link). The notice and comment requirements also do not apply to ―interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice.‖ 5
U.S.C. § 553(b). Publication requirements may still apply. See 5 U.S.C. § 552(a)(1)(D) (2006) (link).
45
A statute to this effect might have led the Second Circuit to allow President George W. Bush‘s
Department of Energy to act against the last-minute rule issued by the Clinton Administration concerning the energy efficiency of central air condition and heat pumps that the Second Circuit held the Bush
Administration could not revise in Natural Resources Defense Council v. Abraham, 355 F.3d 179 (2d
Cir. 2004). It is unclear whether this statutory reform would override the anti-backsliding provision of
the statute at issue in Abraham, but in most situations it would allow agencies to adjust their rules for a
brief period after issuance.
http://www.law.northwestern.edu/lawreview/colloquy/2009/9/
368
103:352 (2009)
Combating Midnight Regulation
difficult issues late in the term as an aid to the incoming administration.
Further, the ban would apply even when it would not be necessary, for example, when an incumbent is reelected or when the new President is of the
same party as the prior President. It also assumes the worst—that all outgoing administrations are behaving badly rather than carrying on the business of government to the end, perhaps even in consultation with the
incoming administration. In such cases, the work of career agency employees could needlessly be slowed to a crawl every four years around election time.
CONCLUSION
Recent research confirms that midnight regulation has long been a feature of the transition between administrations.46 The general view is that
midnight regulation is an illegitimate vehicle for projecting an outgoing
administration‘s policy agenda beyond the end of its term. For this and additional reasons disfavoring midnight regulation, Representative Jerrold
Nadler‘s proposed Midnight Rule Act is a step in the right direction. With
the refinements discussed above, it might prevent some of the most egregious examples of midnight regulation. Reforms to administrative law or
simpler proposals that simply suspend rulemaking activity at the end of
each presidential term might accomplish the same goal. This Essay has outlined and analyzed these various possibilities with the hope of enhancing
the understanding of ways of combating midnight regulation.
46
See Antony Davies & Veronique de Rugy, Midnight Regulations: An Update (George Mason Univ. Mercatus Center Working Paper No. 08-06, 2008) (copy on file with the Nortwestern University Law
Review),
available
at
http://www.mercatus.org/uploadedFiles/Mercatus/Publications/
WP0806_RSP_Midnight%20Regulations.pdf (link).
http://www.law.northwestern.edu/lawreview/colloquy/2009/9/
369
IMPROVING THE
ADMINISTRATIVE PROCESS
A REPORT TO THE PRESIDENT-ELECT
OF THE UNITED STATES
2016
AMERICAN BAR ASSOCIATION
SECTION OF ADMINISTRATIVE LAW AND
REGULATORY PRACTICE
INTRODUCTION
As the forty-fifth American President, you will face a pressing need to improve the process
by which federal agencies make law and affect the lives of millions of Americans. The
American Bar Association’s (ABA) Section of Administrative Law and Regulatory
Practice has prepared this report for your consideration in the hope that we have identified
focused, non-partisan strategies for improvement and reassessment. The Section is
composed of specialists in administrative law. Both politically and geographically diverse,
they include private practitioners, government attorneys, judges, law professors, and
members of nonprofit organizations. Officials from all three branches of the federal
government sit on its governing Council. The views expressed herein are presented on
behalf of the Section of Administrative Law and Regulatory Practice. They have not been
approved by the House of Delegates or the Board of Governors of the ABA and,
accordingly, should not be construed as representing the policy of the ABA.
In generating this report, the Section sought at every stage to achieve consensus among the
broad range of interests represented in our membership. This report is nonpartisan and was
prepared well in advance of the 2016 presidential election. The Council of the Section
finally approved this report on September 9, 2016, to ensure completion prior to the
election. As a result, we believe the recommendations discussed in the report should have
wide support and be susceptible of early acceptance.
EXECUTIVE SUMMARY
This report offers the following recommendations:
•
Transition Workers
 Ensure that your transition workers adhere to the Transition Code of Ethical
Conduct contained in the Appendix to Administrative Conference of the
United States (ACUS) Recommendation 88-1.
•
Appointment of Your Administration
 First, both you and the Senate should act promptly.
 Second, effective administration of regulatory and beneficiary programs
requires the appointment of persons of high ability to positions of
leadership.
 Third, attach considerable importance to appointing a Chairman for ACUS
and to securing the funding it needs for continued effectiveness.
•
Midnight Rulemaking
 First, use a notice-and-comment process when you undertake to review a
midnight rule that has already been published but has an effective date that
is not imminent.
 Second, when the effective date of a midnight rule is imminent, your
administration should consider, if permitted by law, delaying the effective
date of the rule for up to 60 days to facilitate your review.
1
•
Oversight and Improvement of the Rulemaking Process
 First, use effective regulatory planning mechanisms.
 Second, continue the interagency regulatory review process consistent with
the principles and procedures embodied in Executive Order 12866 and
Executive Order 13563, use benefit-cost analysis for economically
significant rules unless prohibited by law, and secure the funding necessary
for its effectiveness.
 Third, ensure appropriate transparency in White House oversight of agency
rulemaking through the Office of Management and Budget’s (OMB) Office
of Information and Regulatory Affairs (OIRA).
 Fourth, the scope of regulatory review properly includes both “significant”
regulatory actions and “significant” guidance documents, and there should
be a streamlined process to review guidance.
 Fifth, support the use of sound scientific risk assessment.
 Sixth, continue and, where appropriate, expand upon existing bilateral and
multilateral regulatory cooperation and coherence efforts between the
United States and other countries, and identify new opportunities for
regulatory cooperation.
 Seventh, extend Executive oversight to many independent regulatory
agencies.
•
Improvements to the Administrative Procedure Act
 Support the improvements to the Administrative Procedure Act (APA)
recommended by ABA Resolution 106B.
•
Posting Guidance on Websites
 Ensure that all agency guidance documents are made available online in a
timely and easily accessible manner.
•
Retrospective Review
 Build on the efforts of previous administrations and take steps to
institutionalize careful, in-depth retrospective review of existing rules.
 Conduct a thorough review of the more than 13,700 Executive orders issued
by all Presidents to date, and consider which are no longer necessary or
appropriate, so that those can be revoked.
•
Use of Information and Communication Technologies
 Continue to improve existing information and communication applications
and dedicate the resources and attention necessary to keep up with
continuous technological evolution.
•
Agency Adjudication
 First, support legislation that would enhance both the legitimacy and
uniformity of agency adjudicatory decisions.
 Second, re-establish a strong Office of Administrative Law Judges (ALJs)
in the Office of Personnel Management (OPM).
2
 Third, provide urgent attention to the burgeoning backlog of cases in some
of the nation’s most important high-volume administrative adjudicatory
programs.
 Finally, encourage agencies to avoid taking excessive time to review frontline decisions in important application adjudications, such as permitting,
licensing, and petitions for waivers.
•
Alternative Dispute Resolution
 First, expand the Administration’s commitment to using Alternative
Dispute Resolution (ADR) techniques in both agency adjudication and
rulemaking.
 Second, build on this foundation by issuing an Executive order to express
support for ADR.
DISCUSSION AND RECOMMENDATIONS
Transition Workers
A hallmark of American government is the orderly and peaceful transition of authority
following the presidential election. As Congress recognized in the Presidential Transition
Act of 1963, a smooth transition is necessary to “assure continuity in the faithful execution
of the laws and in the conduct of the affairs of the Federal Government, both domestic and
foreign,” and it directs all officers of the government to take steps to promote the orderly
transition of power between the outgoing and incoming administrations. In 1988, ACUS
studied the role of the President-elect’s transition organization and adopted
Recommendation 88-1, Presidential Transition Workers Code of Ethical Conduct. 1 The
Recommendation is designed to ensure that the large number of private citizens who
participate in the transition on behalf of the incoming President avoid conflicts of interest
that might arise in the course of the transition.
We urge that your transition workers adhere to the Transition Code of Ethical
Conduct contained in the Appendix to ACUS Recommendation 88-1. This code
requires transition workers to disclose their present employment and the source of funding
for their participation in the transition. It also prohibits transition workers from engaging
in financial self-dealing, misusing government property or non-public agency information,
and representing anyone in matters before the agency during and, for a limited time, after
the transition. Beyond these requirements, is also very important that transition workers be
clearly identified so that federal agencies know who represents the President-Elect before
granting access to government facilities and information. Therefore, we urge your
transition organization to provide each agency with a list of the names of the transition
team for that agency, along with each worker’s written agreement to adhere to the ethical
standards referenced above and the statement disclosing their present employment and
source of funding.
1
ACUS is a free-standing federal agency that studies administrative procedure and makes nonpartisan,
consensus-based recommendations for improvements to the President, Congress, agencies, and the Judicial
Conference. See 5 U.S.C. §§ 591-596; www.acus.gov.
3
Appointment of Your Administration
Among your very first decisions will be to choose the appointees who will people your
administration. At the highest level, this requires senatorial confirmation; but many
appointments are made by you alone or by those whom you appoint to high office with
Senate confirmation. These are political judgments at root, yet we believe law and
experience offer perspectives that are appropriate for us to address here.
First, we urge both you and the Senate to act promptly. Unfilled vacancies imperil
effective administration. Prompt appointments are essential for the government to operate
and to act efficiently and consistently in the public interest. Nonetheless, past Presidents
have not always been prompt in sending nominations forward, and the Senate has not
always been prompt in considering nominations once sent. These problems have only
continued. Your primary control over the administrative apparatus does not reside in your
ability to issue orders or to monitor performance, but rather is exercised through your
selection of sound administrators to lead those agencies. That counsels deep and urgent
attention to the appointment process on all sides.
Second, effective administration of regulatory and beneficiary programs requires the
appointment of persons of high ability to positions of leadership. The appointment of
qualified and committed administrators is necessary to guarantee the faithful execution of
the laws. We recognize that Presidents regularly appoint people who have actively
participated in the successful presidential campaign, or who are party loyalists, or who are
promoted by influential constituency groups. Appointments stemming from these factors
can, of course, be appropriate. Nevertheless, we, as practitioners and others involved in the
substantive areas that will be directly affected by your appointments, urge you not to allow
those factors to overshadow qualities such as competence, leadership ability, and
familiarity with the programs that will fall within your appointees’ charge. We also urge
you to observe the many time-honored qualifications for presidentially appointed offices
that are embedded in legislation, which can help to secure the cooperation of disparate
interests that is essential to the success of governmental programs. Such qualifications in
the people you appoint are important to the fulfillment of your own constitutional
responsibility to take care that the laws be faithfully executed.
Third, we urge you to attach considerable importance to appointing a Chairman for
ACUS and to securing the funding it needs for continued effectiveness. In preparing
this Report, we have been impressed by how often we have been able to draw on ACUS
recommendations. The agency is a continuing source of understanding and consensus
recommendations on administrative procedure.
Midnight Rulemaking
As has been the case for decades, the volume of agency regulations is likely to have
increased substantially in the final months of your predecessor’s administration. As has
become standard practice, your administration will likely undertake a comprehensive
review of regulations that were promulgated late in your predecessor’s term in office to
ensure that these regulations conform to your administration’s policies and meet the high
standards necessary for effective regulation. As previous incoming administrations have
4
done, you may wish to order a halt to the issuance of new regulations until they can be
reviewed by an appointee of your administration, and you may wish to order your
appointees to review all pending regulations and all regulations that have been published
but have not yet gone into effect. If you or anyone in your administration issues such an
order, the order should be published and should contain clear instructions on the procedures
agencies must follow in conducting the review. Most importantly, we urge you to undertake
this review in an orderly and transparent manner, in line with ACUS Recommendation
2012-2, Midnight Rules. 2
First, we urge you to use a notice-and-comment process when you undertake to review
a midnight rule that has already been published but has an effective date that is not
imminent. Under this process, before taking any action to alter the rule or its effective
date, your administration should allow a notice-and-comment period of at least 30 days to
invite the public to express views on the legal and policy issues raised by the rule, including
whether the rule should be amended, rescinded, delayed pending further review by the
agency, or allowed to go into effect. The administration should then take account of the
public comments in determining whether to amend, rescind, delay the rule, or allow the
rule to go into effect. If possible, the administration should initiate, if not complete, this
process prior to the effective date of the rule.
Second, we urge that when the effective date of a midnight rule is imminent, your
administration should consider, if permitted by law, delaying the effective date of the
rule for up to 60 days to facilitate your review. This approach recognizes that an
imminent effective date may preclude full adherence to the process described above.
Before deciding whether to delay the effective date, however, the administration should,
where feasible, allow at least a short comment period regarding the desirability of delaying
the effective date. If your administration cannot provide a comment period before delaying
the effective date of the rule, it should instead offer the public a subsequent opportunity to
comment on when, if ever, the rule should take effect.
Oversight and Improvement of the Rulemaking Process
The scope and complexity of regulation, competing national goals, and economic concerns
have made it a central task of our government to choose wisely among competing priorities
and policy choices. 3 To compound the challenge, Congress often legislates broad goals and
leaves regulatory agencies with the difficult task of filling in the details of regulatory
programs, a process which requires further balancing of competing priorities. 4
Accordingly, it is imperative that the President have an effective, evidence-based
mechanism for interagency review of rules to coordinate regulatory decisions from a broad,
societal perspective. For over 35 years, every President regardless of party affiliation has
supported a coordinated, interagency regulatory review process through OIRA.
2
See 77 Fed. Reg. 47,800, 47,802-04 (Aug. 10, 2012).
See ACUS, Recommendation 88-9, Presidential Review of Agency Rulemaking, 54 Fed. Reg. 5287, 528788 (Feb. 2, 1989).
4
Id.
3
5
It is essential that the development of regulatory policies be guided by thoughtful analysis
that can reconcile tradeoffs, and that regulations be carefully calibrated to achieve their
goals in the most efficient and effective manner possible. Benefit-cost analysis can reveal
the most promising alternatives to achieve statutory goals. In the Clinton Administration’s
first Report to Congress on the Costs and Benefits of Federal Regulation, OMB concluded:
[R]egulations (like other instruments of government policy) have enormous
potential for both good and harm. Well-chosen and carefully crafted
regulations can protect consumers from dangerous products and ensure they
have information to make informed choices. Such regulations can limit
pollution, increase worker safety, discourage unfair business practices, and
contribute in many other ways to a safer, healthier, more productive, and
more equitable society. Excessive or poorly designed regulations, by
contrast, can cause confusion and delay, give rise to unreasonable
compliance costs in the form of capital investments, labor and on-going
paperwork, retard innovation, reduce productivity, and accidentally distort
private incentives.
The only way we know how to distinguish between the regulations that do
good and those that cause harm is through careful assessment and evaluation
of their benefits and costs. Such analysis can also often be used to redesign
harmful regulations so they produce more good than harm and redesign
good regulations so they produce even more net benefits. 5
First, we urge you use effective regulatory planning mechanisms. The Regulatory Plan
of Section 4 of Executive Order 12866 and the statutory Unified Agenda of Federal
Regulations into which it feeds are important both as policy coordination and management
tools for your administration and as early public notice of impending rulemaking activity,
encouraging communication with responsible agencies while impending proposals are
being developed. From an external perspective, however, their use appears to have been
suboptimal: although these elements apply to all agencies, independent commissions as
well as executive agencies, not all have regularly participated in the Section 4 process; not
all intended rulemakings of significance are listed even by participating agencies; provision
of a Regulatory Identification Number (RIN) permitting ready access to documents on
Regulations.gov is often omitted; and publication of the plan has been somewhat irregular.
In particular, the regulatory activities of such agencies can have major public
consequences, and the public deserves to know what such agencies are planning in that
regard.
5
OMB, OIRA, Report to Congress on the Costs and Benefits of Federal Regulation (Sept. 30, 1997), at 10.
6
ACUS Recommendation 2015-1, Promoting Accuracy and Transparency in the Unified
Agenda, 6 identifies several ways to make more effective use of these mechanisms,
including by:
•
Convening the agency heads early in your administration, and at least annually, to
coordinate regulatory priorities.
•
As the Executive order and other instructions currently provide, requiring all
agencies to (1) participate in the Regulatory Plan, (2) list in the Plan and semiannual Regulatory Agenda all planned rulemaking activity of likely public interest,
and (3) create RIN numbers for each such listed rulemaking possibility.
•
Encouraging each agency to maintain a website that contains its regulatory agenda
and is updated in real time to reflect concrete actions taken with respect to rules
such as initiation, issuance, or withdrawal of a rule or change of contact person.
These websites should be linked with the Unified Agenda website.
•
Requiring agencies to improve their listing practices on the Plan and the Agenda.
Agencies should be required to make reasonable efforts to accurately classify all
Agenda items—for example, rules should not be classified as “longterm actions”
when the agency contemplates issuing a proposed or final rule within the next year.
Agencies should be required to explain how all rules were resolved once they have
been listed, rather than removing any rule without explanation.
You may also wish to go further and give careful consideration to the possibility of
implementing by Executive order a regulatory budget applicable to all federal cabinet
departments and agencies. This has often been urged as a valuable, flexible management
and policy-setting tool, but it requires complex accounting of future costs and benefits and
special attention to possible unanticipated consequences.
Second, we urge you to continue the interagency regulatory review process consistent
with the principles and procedures embodied in Executive Order 12866 and
Executive Order 13563, use benefit-cost analysis for economically significant rules
unless prohibited by law, and secure the funding necessary for its effectiveness.
Republican and Democratic Presidents alike have found this approach to be an efficient
way to manage the administrative state, and the Section believes this tradition should
continue to be honored. To ensure that the regulatory review process is effective, efficient
and timely, we recommend you ensure that there are adequate resources available to
implement it. 7
6
80 Fed. Reg. 36,757, 36,757-58 (June 26, 2015).
See ACUS, Statement #18, Improving the Timeliness of OIRA Regulatory Review, 78 Fed. Reg. 76,275,
76,276 (Dec. 17, 2013). When OIRA was created in fiscal year 1981, it had a full-time equivalent (FTE)
ceiling of about 97 staff; by fiscal year (FY) 2016, OIRA had about 47 staff. See Susan Dudley & Melinda
Warren, G.W. Regulatory Studies Center and Washington University in St. Louis, Regulators’ Budget from
Eisenhower to Obama: An Analysis of the U.S. Budget for Fiscal Years 1960 through 2017 (May 17, 2016),
at p. 20 (Table A-3). At the same time, OIRA’s statutory responsibilities have grown through a wide variety
of requirements, including the Small Business Regulatory Enforcement Fairness Act, the E-Government Act,
7
7
Third, we urge you to ensure appropriate transparency in White House oversight of
agency rulemaking through OIRA. From their beginning, the Executive orders creating
the system of centralized executive review of agency rulemaking (e.g., Executive Order
12866) have included openness provisions supporting public trust in their administration.
These provisions have:
•
Committed OIRA to providing public notice of matters under review,
communications and meetings with persons outside the administration, timely
action on matters submitted for its review, and eventual publication of all
documents exchanged between OIRA and the agency during the review process.
•
Committed each agency to revealing its drafts submitted to OIRA for review and
providing “complete, clear and simple” identification of substantive changes
between these drafts and its actions subsequently taken, including identification of
changes made at OIRA’s suggestion or recommendation.
Adherence to these commitments by both OIRA and the acting agencies contributes to
public understanding and trust of this important process, offering some assurance against
its being used in ways inconsistent with its promises of objective review. We urge you to
adhere to these commitments. Assiduous avoidance of delays and respect for openness are
important elements for creating public trust in the process of centralized regulatory review.
Fourth, the scope of regulatory review properly includes both “significant”
regulatory actions and “significant” guidance documents, and there should be a
streamlined process to review guidance. The Section has long supported the extension
of White House oversight to guidance documents. The ABA also has called for public
review and comment on significant interpretive rules and policy statements, 8 a position that
is implemented by the OMB Bulletin for Agency Good Guidance Practices, which is still
in effect today. In the summer of 2007, the Section opposed congressional appropriations
riders that would have defunded both the procedures in Executive Order 13422 for
interagency review of guidance documents and the Good Guidance Practices Bulletin. 9 We
urge you to implement effective procedures for the development and use of guidance as
well as for interagency review of draft guidance documents.
Fifth, we urge you to support the use of sound scientific risk assessment. Many
agencies are responsible for regulating risks to health, safety, or the environment. In order
for them to implement these missions, they must have adequate expertise in state-of-theart risk and benefit assessment methods to support optimal risk management. Under the
the Unfunded Mandates Reform Act, the Congressional Review Act, the Information Quality Act, the
Regulatory Right-to-Know Act, the Small Business Paperwork Relief Act, and various appropriations riders.
8
ABA House of Delegates, Resolution 120C (August 1993). The ABA recommended that: “Before an
agency adopts a non-legislative rule that is likely to have a significant impact on the public, the agency should
provide an opportunity for members of the public to comment on the proposed rule and to recommend
alternative policies or interpretations . . . .”
9
See, e.g., Letter to the Honorable Brad Miller et al. from Professor Michael Asimow, Chair, ABA Section
of Administrative Law and Regulatory Practice (Nov. 19, 2007).
8
sponsorship of our Section, the ABA has developed a detailed recommendation containing
principles for the use of risk assessment in the regulatory process. 10 The recommendation
urges, for example, that risk assessments should be based on a careful analysis of the weight
and quality of the scientific evidence, including such site-specific and substance-specific
information as may be available, as well as information about the range and likely
distribution of risk. It also emphasizes that scientific findings and professional judgment in
risk assessments should be explicitly distinguished from the policy judgments in risk
management. In addition, the recommendation provides that the process should be kept as
free as possible from political bias, and that risk assessments should explicitly acknowledge
and explain the limitations of their methodology, data, and assumptions. As your incoming
administration undertakes to familiarize itself with the challenges of risk assessment and
risk management, we commend the ABA principles to its attention.
Sixth, we urge you to continue and, where appropriate, expand upon existing bilateral
and multilateral regulatory cooperation and coherence efforts between the United
States and other countries, and we urge you to identify new opportunities for
regulatory cooperation. Properly designed and implemented, cooperation between U.S.
and foreign regulators to better align regulations—without reducing health, safety and
environmental protections—can yield significant benefits for consumers and
manufacturers, while promoting U.S. economic growth. These efforts should be focused
on achieving greater coherence and alignment between essentially equivalent standards of
protection that meet at least the U.S. standard. For these reasons, regulatory cooperation
has been endorsed and pursued by Presidents of both parties, with increased emphasis and
activity over the past two Administrations. 11
In addition to delivering benefits by eliminating unnecessary nontariff trade barriers
(NTBs), regulatory cooperation can take the form of mutual recognition of standards, the
sharing of test data, technical and scientific information, and risk assessments, the
elimination of duplicative testing, certification, and inspection requirements, and ensuring
effective use of regulatory analysis and centralized regulatory review. This cooperation can
reduce operational costs for regulatory agencies that are under increasing budgetary
pressure, allowing them to focus limited resources on the highest risk activities, where
regulation can have the greatest benefit.
Seventh, we urge you to extend Executive oversight to many independent regulatory
agencies. While to date, Presidents generally have refrained from applying their regulatory
oversight Executive orders to independent agencies, 12 the ABA’s endorsement of
presidential oversight includes the extension of oversight to the independent regulatory
10
See http://www.abanet.org/adminlaw/risk02.pdf.
See ABA House of Delegates, Resolution 109B (August 2012); Executive Order 13609, Promoting
International Regulatory Cooperation, 77 Fed. Reg. 26,413 (May 4, 2012), ACUS, Recommendation 20116, International Regulatory Cooperation, 77 Fed. Reg. 2257, 2259 (Jan. 17, 2012).
12
But see Executive Order 13272, “Proper Consideration of Small Entities in Agency Rulemaking” (applying
to independent regulatory agencies as well as Cabinet Departments and agencies).
11
9
agencies. 13 In 1990, the ABA recommended that “presidential review should apply
generally to all federal rulemaking, including that by independent regulatory agencies.” 14
Our Section, echoing the clearly presented view of the Office of Legal Counsel 15 and
numerous academic commentators, has taken the position that the independent regulatory
commissions can properly be made subject to the provisions of Executive Order 12866 and
Executive Order 13563 requiring cost-benefit analysis, OMB review, and retrospective
review of rules. (A copy of the Section’s recommendation and report is attached for your
reference.) Much of the policymaking of independent agencies is not functionally distinct
from that of executive agencies, and where that is the case, presidential oversight is
appropriate. The independent agencies already and properly are required to participate in
the regulatory plan, under Section 4 of Executive Order 12866. In Executive Order 13579,
President Obama took the additional step of urging, though not requiring, the independent
agencies to comply with the provisions for cost-benefit analysis and retrospective review
of rules in Executive Order 13563 and Executive Order 12866.
The Supreme Court has clearly and properly held that independent regulatory commissions
are elements of the executive branch, necessarily subject to presidential oversight 16 —
which, of course, must include the constitutional authority to require their written reports
on how they intend to carry out the duties Congress has created for them. Imposing
compliance with the regulatory oversight Executive orders as an obligation could answer
judicial concerns about the need for such analyses, while providing a clear and wellestablished framework for their execution that the judicial expressions necessarily lack. We
strongly urge you to bring the independent regulatory commissions within the requirements
for cost-benefit analysis, OMB review, and retrospective review of rules currently reflected
in Executive Order 12866 and Executive Order 13563.
Improvements to the APA
We urge you to support the improvements to the APA recommended by ABA
Resolution 106B. On February 8, 2016, the ABA House of Delegates adopted ABA
Resolution 106B urging Congress to modernize the rulemaking provisions of the
APA. Intended to help enhance public participation in the rulemaking process and to
provide clearer direction to agencies, the recommended reforms include: (1) codifying the
requirement that an agency fully disclose data and other information used in rulemaking;
13
See ABA House of Delegates, Recommendation: Presidential Review of Rulemaking (Annual Meeting
1990); see also Letter from Administrative Law Scholars on “S. 3468, Independent Regulatory Analysis
Act,” to Senators Joe Lieberman and Susan Collins (Jan. 2, 2013) (affirming President’s authority to direct
independent regulatory agencies to submit their proposed rules for review by OIRA); cf. ACUS,
Recommendation 2013-2, Benefit-Cost Analysis at Independent Regulatory Agencies, 78 Fed. Reg. 41,352,
41,355-57 (June 10, 2013) (providing recommendations of practice of benefit-cost analysis at independent
agencies).
14
ABA Recommendation: Presidential Review of Rulemaking, supra note 13.
15
Memorandum for the Hon. David Stockman, Dir., Office of Mgmt. & Budget, from Larry L. Simms,
Acting Ass't Atty. Gen., Office of Legal Counsel 7 (Feb. 12, 1981), reprinted in Role of OMB in Regulation:
Hearing Before the Subcomm. on Oversight and Investigations of the House Comm. on Energy and
Commerce, 97th Cong., 1st Sess. 158 (1981) (“[U]nder the best view of the law” the proposed Executive
order, eventually issued as Exec. Order No. 12,291, “can be imposed on the independent agencies.”).
16
See Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477 (2010).
10
(2) codifying the requirement that agencies develop a rulemaking record and a public
docket for each rulemaking; (3) establishing a minimum comment period of 60 days for
major rules, subject to an exemption for good cause; (4) tightening and clarify several
outdated definitions; (5) authorizing new presidential administrations to delay the effective
date of so-called midnight rules finalized at the end of the prior administration; (6)
promoting retrospective review of major rules; (7) codifying some provisions and also
improve the usefulness of the Unified Regulatory Agenda; (8) repealing or narrowing
several outdated exemptions from the notice-and-comment process; and (9) requiring
agencies to seek post-promulgation comments on some rules issued without notice and
comment. The resolution also encourages agencies to experiment with reply comment
processes.
In addition to supporting legislative improvements to the APA, we recommend that you
pursue these reforms administratively unless prohibited by law. We also urge you to
consider supporting agency use of negotiated rulemaking in appropriate circumstances. 17
Posting Guidance on Websites
Agencies produce many explanatory documents that can assist the public in understanding
better their legal obligations. Known variously as “guidance, guidelines, manuals, staff
instructions, opinion letters, press releases or other informal captions,” 18 these materials
are formally non-binding but in practice can sometimes become effectively binding, as they
prove pivotal in how agencies choose to carry out their responsibilities and exercise their
discretion. Members of the public need to be able to find relevant guidance documents, but
they are not always accessible on agency websites—and even when the documents are
accessible, they can be very difficult for members of the public to locate. 19
We urge you to make it a priority to ensure that all agency guidance documents are
made available online in a timely and easily accessible manner. The recently enacted
FOIA Improvement Act of 2016 reiterates the longstanding requirement that guidance
meant to influence public conduct be published, and now requires online, rather than print,
publication, thus easing this agency obligation. Even before the enactment of this law, best
practices articulated by OMB included “the goal of making all [agencies’] significant
guidance documents currently in effect publicly available on their Web sites.” 20 The Small
Business Regulatory Enforcement Fairness Act of 1996 similarly has required that
compliance guides for small businesses be posted on an agency’s website in an “easily
17
See 5 U.S.C. §§ 561–570; ACUS, Recommendation 85-5, Procedures for Negotiating Proposed
Regulations, 50 Fed. Reg. 52,895 (Dec. 27, 1985); ACUS, Recommendation 82-4, Procedures for
Negotiating Proposed Regulations, 47 Fed. Reg. 30,708 (July 15, 1982).
18
ACUS, Recommendation 92-2, Agency Policy Statements, 57 Fed. Reg. 30,103, ¶ II(B) (June 18, 1992).
19
ACUS, Recommendation 2014-3, Guidance in the Rulemaking Process, 79 Fed. Reg. 35,988, 35,933 (June
25, 2014) (noting that certain “guides are often difficult to find on agency Web pages”).
20
OMB, Final Bulletin for Agency Good Guidance Practices, 72 Fed. Reg. 3432, 3437 (Jan. 25, 2007).
11
identified location.” 21 ACUS has separately urged agencies to make rulemaking
information generally, 22 and guidance documents in particular, 23 easier to find online.
Retrospective Review
We urge you to build on the efforts of previous administration and take steps to
institutionalize careful, in-depth retrospective review of existing rules. For decades,
both Republican and Democratic administrations have required agencies to subject
significant new rulemaking proposals to an institutionalized process that seeks to anticipate
what impacts the rule is likely to have after it is adopted. Yet after these same rules have
been adopted, they are no longer subject to an institutionalized process of assessing
retrospectively what benefits and costs they have actually produced. Since at least the
Carter Administration, each administration has conducted its own retrospective review of
existing rules, calling upon agencies to remove rules that have become outmoded,
ineffective, or inefficient. The Regulatory Flexibility Act calls upon agencies to review
retrospectively certain rules that have significant impacts on small businesses, 24 and other
substantive statutes occasionally will direct agencies to review specific rules. 25
Notwithstanding these efforts and directives, it remains that “retrospective review of
regulations has not been held to the same standard as prospective review” and the idea of
retrospectively reviewing rules has generally only applied to “subsets of regulations.” 26 In
2011, President Obama issued Executive Order 13563 that articulated the general principle
that agencies “must measure, and seek to improve, the actual results of regulatory
requirements,” and called upon each agency to “periodically review its existing significant
regulations” to determine how well they are working in practice. 27 Under this Executive
order, agencies have undertaken several rounds of retrospective reviews and have reported
only the results of these reviews. This process articulated in Executive Order 13563 is
consistent with a longstanding ACUS recommendation, which calls on agencies to
“develop processes for systematic review of existing regulations.” 28 In 2014, ACUS
reaffirmed its earlier recommendation, expressly endorsed the goals reflected in Executive
Order 13563, and recognized that retrospective review requires adequate funding. 29 It also
urged agencies to start planning for retrospective review at the time they create new rules,
recommended that agencies adopt well-reasoned priorities for retrospective review, and
advised them to undertake retrospective reviews with appropriate levels of methodological
21
Pub. L. No. 110-28, 121 Stat. 205 (2007).
ACUS, Recommendation 2011–8, Agency Innovations in e-Rulemaking, 77 Fed. Reg. 2257, 2264 (Jan. 17,
2012).
23
ACUS, Recommendation 2014-3, supra note 19, at 35,993.
24
See 5 U.S.C. § 610.
25
Joseph E. Aldy, Learning from Experience: An Assessment of Retrospective Reviews of Agency Rules
and the Evidence for Improving the Design & Implementation of Regulatory Policy (Nov. 17, 2014) (report
to ACUS), http://www.acus.gov/report/retrospective-review-report.
26
ACUS, Recommendation 2014-5, Retrospective Review of Agency Rules, 79 Fed. Reg. 75114, 75115 (Dec.
17, 2014).
27
76 Fed. Reg. 3821 (Jan. 21, 2011). Executive Order 13563 was subsequently supplemented with Executive
Order 13579 and Executive Order 13610, which also have called for agencies to undertake more retrospective
reviews.
28
ACUS, Recommendation 95-3, Review of Existing Agency Regulations, 60 Fed. Reg. 43,109, 43,110 (Aug.
18, 1995)
29
ACUS, Recommendation 2014-5, supra note 26.
22
12
rigor and transparency. 30 The ABA Section of Administrative Law and Regulatory Practice
also has advised agencies “on an ongoing basis to invite members of the public to identify
rules that particularly warrant review.” 31 These various recommendations will remain
important for your next administration to pursue; only with retrospective review can the
American public know what value they are getting—or are not getting—from the
regulations adopted by federal agencies.
Second, we urge you to conduct a thorough review of the more than 13,700 Executive
orders issued by all Presidents to date and consider which are no longer necessary or
appropriate, so that those can be revoked. The large total number of Executive orders
and other presidential directives (e.g., presidential memoranda) makes it infeasible for
agency personnel to know and follow them all. Retrospective review and pruning of these
directives is necessary to ensure their viability and effectiveness.
Use of Information and Communication Technologies
The previous two administrations have taken important steps to make the administrative
process more transparent and participatory using various online tools and strategies. The
Bush Administration, for example, established a one-stop, centralized online docketing
system called Regulations.gov, which houses to this day all the rulemaking documents for
all executive agencies, affording the public an opportunity to learn about and submit
electronic comments on proposed rules. The Obama Administration has not only
maintained Regulations.gov but it has initiated other online efforts to promote open and
participatory government, including the White House online petitioning system called “We
the People” and a government-wide online data depository called Data.gov.
These initiatives should be continued and strengthened for several reasons. First, as
members of the public increasingly rely on online forms of communication in personal and
business transactions, they increasingly expect that they will be able to learn about and
interact with their government in an online capacity. Second, as this Section has noted in
previously recommending that government “aggressively advance the use of information
and communication technologies in rulemaking,” these types of “technologies can promote
transparency, enhance the breadth and quality of public participation in regulatory
decisionmaking, help agencies make better rules more efficiently, and provide … data for
use in program oversight and evaluation.” 32
We urge you to continue to improve existing information and communication
applications and to dedicate the resources and attention necessary to keep up with
continuous technological evolution. As much progress as the preceding two
administrations have made toward the achievement of these objectives through new
information and communication technologies, more work remains. Existing applications
30
Id.
ABA Section of Administrative Law and Regulatory Practice, Comments on S.1029, The Regulatory
Accountability Act of 2013 (Dec. 16, 2014). See also Cynthia Farina, Achieving the Potential: The Future of
Federal e-Rulemaking: A Report to Congress and the President (2008) (prepared for the Section’s Committee
on the Status and Future of Federal e-Rulemaking and endorsed by the Section).
32
ABA Section of Administrative Law and Regulatory Practice, Improving the Administrative Process: A
Report to the President-Elect of the United States (2008).
31
13
can be improved still further, such as by incorporating all independent agencies’
rulemakings into Regulations.gov. In addition, as technology continues to evolve, agencies
need to remain vigilant and dedicate resources to keep their systems up-to-date and secure,
in addition to innovating with new technologies altogether (such as machine learning).33
Your administration should make it a top priority to advance the aggressive use of
information and communication technologies in rulemaking.
Agency Adjudication
Although agency use of ADR should be encouraged as an alternative to agency
adjudication (see above), adjudications remain a key aspect of many agencies’
responsibilities. When the APA was enacted in 1946, its adjudication provisions set forth
a standard package of procedures, including use of independent, impartial hearing
examiners, a hearing process, and separation of the functions of investigation, prosecution,
and decision. At the time, there was a widespread expectation that when agencies were
required by statute to provide hearings in adjudications, the hearings would have to comply
with these new provisions, particularly the mandate for an independent, impartial
decisionmaker and separation of functions.
The APA also specifies, however, that these procedural protections are required only for
adjudications “required by statute to be determined on the record after opportunity for an
agency hearing.” 34 Many courts—including the D.C. Circuit—have ceded broad discretion
to agencies to determine for themselves whether the language of their organic statutes
triggers application of APA formal adjudication requirements. As a result, even when
conducting hearings in matters where the decisionmaker is limited by statute to the record
created by the parties, many agencies have managed to avoid the APA’s adjudication
procedures and the use of ALJs that are normally required as presiders in such proceedings.
First, we urge you to support legislation that would enhance both the legitimacy and
uniformity of agency adjudicatory decisions. In 2005, the ABA adopted Resolution 114,
urging Congress to provide the APA protections of an impartial decisionmaker (not
necessarily an ALJ), separation of functions, and prohibition on ex parte contacts to all
non-APA hearings in which the decisions are to be made based upon the evidence compiled
in a statutorily required hearing. We urge you to support enactment of legislation
embodying these requirements.
Second, we urge you to re-establish a strong Office of ALJs in OPM. This office once
was charged with overseeing the nuts and bolts of the ALJ selection process and with
developing policies to improve the program. In recent years, these tasks have been deemphasized in OPM’s organizational chain. Re-establishing the Office would give new
emphasis to these important tasks.
33
For a list of additional possibilities, see Cary Coglianese, “E-Rulemaking: Information Technology and
Regulatory Policy” (2004) (report to the National Science Foundation), available at
https://www.law.upenn.edu/live/files/5565-erulemakingreport2004.
34
5 U.S.C. § 554(a).
14
Third, we urge urgent attention to the burgeoning backlog of cases in some of the
nation’s most important high-volume administrative adjudicatory programs. Social
Security disability backlogs have exceeded one million cases. Programs adjudicating
veterans benefits claims, Medicare reimbursement claims, and immigration cases have
historically experienced high backlogs. We urge your administration to provide resources
and to support initiatives to reduce these backlogs.
Finally, we urge you to encourage agencies to avoid taking excessive time to review
front-line decisions in important application adjudications, such as permitting,
licensing, and petitions for waivers. The overall final agency actions on such important
matters are often significantly delayed, and current principles of review of agency action
mean that such decisions pending in the process of final adjudications—which nonetheless
may be outcome determinative—cannot be challenged until the final decision, making such
pending decisions unreviewable in practice.
Alternative Dispute Resolution
First, we urge you to expand the Administration’s commitment to using ADR
techniques in agency adjudication. The Administrative Dispute Resolution Act, enacted
in 1990 and made permanent in 1996, encourages and provides a statutory framework for
agency use of ADR techniques in agency proceedings. 35 In agency adjudications, the use
of mediation, arbitration, minitrials, settlement judges, and other techniques can provide
more efficient and more satisfying resolution of agency adjudications than formal hearings.
This has been shown to be true in enforcement actions, government contract disputes,
federal tort claims, and many other types of proceedings. Agency use of ombudsmen is
also recognized by the Act and is increasing. These techniques have bipartisan support and
we urge you to strongly encourage them.
Executive Order 12866 currently provides encouragement for the use of negotiated
rulemaking: “Each agency also is directed to explore and, where appropriate, use
consensual mechanisms for developing regulations, including negotiated rulemaking.”36
There is no equivalent Executive order pertaining to ADR generally, although a
presidential memorandum of May 1, 1988 stated: “As part of an effort to make the Federal
Government operate in a more efficient and effective manner, and to encourage, where
possible, consensual resolution of disputes and issues in controversy involving the United
States, including the prevention and avoidance of disputes, . . . each Federal agency must
take steps to: (1) promote greater use of mediation, arbitration, early neutral evaluation,
agency ombuds, and other ADR techniques, and (2) promote greater use of negotiated
rulemaking.”
Second, we urge your Administration to build on this foundation by issuing an
Executive order to express similar support for ADR. In addition, the ADR Act’s
requirement for agencies to designate a senior official as the agency “dispute resolution
specialist,” responsible for developing and implementing the agency’s ADR policy should
be re-emphasized.
35
36
See 5 U.S.C §§ 571–584.
78 Fed. Reg. 51,735 at § 6(a)(1) (Oct. 4, 1993).
15
16
This report was prepared for the Section by an Ad Hoc Committee on
Administrative Law Transition. Members of the Committee included:
Jack M. Beermann
Emily S. Bremer
Jeffrey Bossert Clark
Cary Coglianese
John F. Cooney
Michael A. Fitzpatrick
Michael Eric Herz
Jeffrey Lubbers
Roger Nober
Paul R. Noe
David Rostker
Peter L. Strauss
Christopher J. Walker
The recommendations in the report were endorsed in principle by a vote of the
Council of the Section on August 6, 2016. The Council gave final approval to the Report
on September 9, 2016.
The views expressed herein are presented on behalf of the Section of
Administrative Law and Regulatory Practice. They have not been approved by the House
of Delegates or the Board of Governors of the American Bar Association and, accordingly,
should not be construed as representing the policy of the American Bar Association.
17
Administrative Conference Recommendation 2012-2
Midnight Rules
Adopted June 14, 2012
There has been a documented increase in the volume of regulatory activity during the
last months of presidential terms.1 This includes an increase in the number of legislative rules
(normally issued under the Administrative Procedure Act’s (APA) notice and comment
procedures)2 and non-legislative rules (such as interpretive rules, policy statements, and
guidance documents) as compared to other periods. This spurt in late-term regulatory activity
has been criticized by politicians, academics, and the media during the last several presidential
transitions. However, the perception of midnight rulemaking as an unseemly practice is worse
than the reality.
The Conference has found that a dispassionate look at midnight rules3 issued by past
administrations of both political parties reveals that most were under active consideration long
before the November election and many were relatively routine matters not implicating new
1
One study shows that, as measured by Federal Register pages, rulemaking activity increases by an average of 17
percent in the three months following a presidential election. See Antony Davies & Veronique de Rugy, Midnight
Regulations: An Update (Mercatus Ctr. at George Mason Univ., Working Paper, 2008), available at
http://mercatus.org/uploadedFiles/Mercatus/Publications/WP0806_RSP_Midnight%20Regulations.pdf (studying
the number of pages published in the Federal Register over specific time periods in various presidential
administrations).
2
See 5 U.S.C. § 553.
3
The U.S. House of Representatives’ Subcommittee on Commercial and Administrative Law has previously
suggested midnight rules as a topic suitable for Conference study. See H. SUBCOMM. ON COMMERCIAL & ADMIN. LAW,
109TH CONG., INTERIM REPORT ON ADMINISTRATIVE LAW, PROCESS AND PROCEDURE FOR THE 21ST CENTURY 150 (Comm. Print
2007). (listing among “Areas for Additional Research” the following question : “Should a new President be
authorized to stay the effectiveness of ‘midnight rules’ that are promulgated shortly before a new administration
takes office? If so, should there be limits on the amount of time rules can be delayed”).
1
policy initiatives by incumbent administrations.4 The Conference’s study found that while there
are isolated cases of midnight rules that may have been timed to avoid accountability5 the
majority of the rules appear to be the result of finishing tasks that were initiated before the
Presidential transition period or the result of deadlines outside the agency’s control (such as
year-end statutory or court-ordered deadlines). Accordingly, it appears that the increase in
rulemaking at the end of an administration likely results primarily from external delays, the
ordinary tendency to work to deadline, or simply a natural desire to complete projects before
departing. Nonetheless, the timing of such rulemaking efforts can put a new administration in
the awkward position of having to expeditiously review a substantial number of rules and other
actions to assess the quality and consistency with its policies.
In addition, critics have suggested that administrations have used the midnight period
for strategic purposes. First, administrations are said to have reserved particularly controversial
rulemakings for the final months of an incumbent President’s term in order to minimize
political accountability and maximize influence beyond the incumbent administration’s term.
Such strategic timing is said to weaken the check that the political process otherwise provides
on regulatory activity. Second, there is some concern about the quality of rules that may have
been rushed through the rulemaking process. Third, some fear that midnight rulemaking forces
incoming administrations to expend substantial time, energy, and political capital to reexamine
the rules and address perceived problems with them. Although similar concerns have been
raised with respect to non-legislative rules issued during the midnight period, such rules are not
the focus of this Recommendation because they can be modified or amended without notice
and comment procedures.
4
See Jack M. Beermann, Midnight Rules: A Reform Agenda (Feb. 8, 2012) (report to the Administrative Conference
of
the
U.S.),
available
at
http://www.acus.gov/wp-content/uploads/downloads/
2012/02/Midnight-Rules-Draft-Report-2-8-12.pdf.
5
See, e.g., Beermann, Midnight Rules, supra note 4, at 28 n. 74, 54 n. 137 (citing examples of cases where an
incumbent administration may have timed a midnight rule to avoid accountability).
2
Given these criticisms, there have been many proposals to reform midnight rulemaking,
some directed at limiting the ability of incumbent administrations to engage in it, some directed
at enhancing the ability of incoming administrations to revise or rescind the resulting rules, and
others directed at encouraging incumbent and incoming administrations to collaborate and
share information during the rulemaking process.
The Conference believes that although it may be desirable to defer significant and
especially controversial late-term rulemakings until after the transition of a presidential
administration, shutting the rulemaking process down during this period would be impractical
given that numerous agency programs require constant regulatory activity, often with statutory
deadlines. Thus, the Conference believes that reforms directed at curtailing midnight rules
should be aimed as precisely as possible at the activities that raise the greatest causes for
concern. Reforms should target the problems of perceived political illegitimacy that arise from
rules that that are initiated late in the incumbent administration’s term or that appear to be
rushed through the regulatory process.
Accordingly, this Recommendation proposes reforms aimed at addressing problematic
midnight rulemaking practices by incumbent administrations and enhancing the ability of
incoming administrations to review midnight rules. This Recommendation defines “midnight
rules” as those promulgated by an outgoing administration after the Presidential election. It is
directed at addressing midnight rulemaking of “significant” legislative rules,6 although the
considerations that underlie it may apply to other agency regulatory activities that affect the
public.
6
Executive Order 12,866 defines a rule as “significant” when it is likely to have “an annual effect on the economy
of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity,
competition, jobs, the environment, public health or safety, or state, local, or tribal governments or communities;
create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;
materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or raise novel legal or policy issues arising out of legal mandates, the President’s
priorities, or the principles set forth in the Executive Order.” Exec. Order No. 12,866, 58 Fed. Reg. 51,735 (Oct. 4,
1993).
3
RECOMMENDATION
Recommendations to Incumbent Presidential Administrations
1.
Incumbent administrations should manage each step of the rulemaking process
throughout their terms in a way that avoids an actual or perceived rush of the final stages of
the process.
2.
Incumbent administrations should encourage agencies to put significant
rulemaking proposals out for public comment well before the date of the upcoming presidential
election and to complete rulemakings before the election whenever possible.
3.
When incumbent administrations issue a significant “midnight” rule—meaning
one issued by an outgoing administration after the Presidential election—they should explain
the timing of the rule in the preamble of the final rule (and, if feasible, in the preamble of the
proposed rule). The outgoing administration should also consider selecting an effective date
that falls 90 days or more into the new administration so as to ensure that the new
administration has an opportunity to review the final action and, if desired, withdraw it after
notice and comment, before the effective date.
4.
Incumbent administrations should refrain from issuing midnight rules that
address internal government operations, such as consultation requirements and funding
restrictions, unless there is a pressing need to act before the transition. While incumbent
administrations can suggest such changes to the incoming administration, it is more
appropriate to leave the final decision to those who would operate under the new
requirements or restrictions.
5.
Incumbent administrations should continue the practice of sharing appropriate
information about pending rulemaking actions and new regulatory initiatives with incoming
administrations.
Recommendations to Incoming Presidential Administrations
4
6.
Where an incoming administration undertakes to review a midnight rule that has
already been published, and the effective date of the rule is not imminent, the administration
should, before taking any action to alter the rule or its effective date, allow a notice-andcomment period of at least 30 days. The comment period should invite the public to express
views on the legal and policy issues raised by the rule as well as whether the rule should be
amended, rescinded, delayed pending further review by the agency, or allowed to go into
effect. The administration should then take account of the public comments in determining
whether to amend, rescind, delay the rule, or allow the rule to go into effect. If possible, the
administration should initiate, if not complete, any such process prior to the effective date of
the rule.
7.
When the imminence of the effective date of a midnight rule precludes full
adherence to the process described in paragraph six, the incoming administration should
consider delaying the effective date of the rule, for up to 60 days to facilitate its review, if such
an action is permitted by law.7 Before deciding whether to delay the effective date, however,
the administration should, where feasible, allow at least a short comment period regarding the
desirability of delaying the effective date. If the administration cannot provide a comment
period before delaying the effective date of the rule, it should instead offer the public a
subsequent opportunity to comment on when, if ever, the rule should take effect and whether
the rule itself should be amended or rescinded.
Recommendation to Congress
8.
In order to facilitate incoming administrations’ review of midnight rules that
would not otherwise qualify for one of the APA exceptions to notice and comment, Congress
should consider expressly authorizing agencies to delay for up to 60 days, without notice and
comment, the effective dates of such rules that have not yet gone into effect but would take
effect within the first 60 days of a new administration.
7
The Conference takes no position on whether—absent legislation such as paragraph eight suggests—the law
authorizes administrations to delay the effective dates of rules not yet effective without notice and comment, but
recognizes that prior administrations have done so.
5
Recommendation to the Office of the Federal Register
9.
The Office of the Federal Register should maintain its current practice (whether
during the midnight period or not) of allowing withdrawal of rules before filing for public
inspection and not allowing rules to be withdrawn once they have been filed for public
inspection or published, absent exceptional circumstances.
6
The Final Countdown
Projecting Midnight Regulations
By Sofie E. Miller & Daniel R. Pérez
July 2016
m
Projecting Midnight Regulations
TABLE OF CONTENTS
Introduction ....................................................................................................................................1
Chapter 1 ◆ Midnight Rulemaking: Agency Independence and the Rush to Regulate ........5
What Makes a Regulatory Agency Independent? ........................................................................6
The Midnight Period ....................................................................................................................7
Executive vs. Independent Regulatory Agency Rulemaking during Midnight ...........................8
Data Source, Sample, & Method ..................................................................................................8
Results: Independent Agencies Immune to “Midnight” ............................................................12
Conclusion: Agency Structure Affects Regulatory Output ........................................................14
Chapter 2 ◆ Modeling Midnight: A Quantitative Forecast of Regulatory Activity ............16
Modeling Approach ....................................................................................................................17
Data: Measuring Regulatory Activity ....................................................................................17
Method: Predicting Midnight Regulation...............................................................................18
Defining the “Midnight Period” .............................................................................................19
Types of Regulatory Activity .................................................................................................20
Findings ......................................................................................................................................20
Sensitivity Analysis ................................................................................................................22
Conclusion: Economically Significant Regulation to Increase Substantially ............................25
Conclusion ....................................................................................................................................26
m
Projecting Midnight Regulations
INTRODUCTION
The final months of presidential administrations are accompanied by a significant increase in
regulatory output as the executive branch relies increasingly on unilateral activity in a rush to
implement its remaining policy priorities. This has come to be known as the “midnight period.”
This report contains two robust, quantitative models that contribute to the scholarship in this area
by: predicting the number of economically significant rules likely to be issued during the Obama
administration’s final months, and finding that independent regulatory agencies do not increase
their regulatory output during presidential transitions. These findings indicate that there is more
than a 99% chance that executive regulatory agencies will increase their output of economically
significant rules1 during the midnight period. On average, these models suggest a threefold
increase in economically significant rules—from an average of 4 to 12 per month during each
midnight month. The report also details why this last-minute flurry of regulatory activity may be
of concern and what incoming administrations can do to begin asserting their policy priorities as
they necessarily deal with the remnants of the previous administration’s agenda.2
The Midnight Period
Although this report, and indeed most of the scholarship regarding the midnight period focuses
on analyzing increases in regulatory output in recent decades, anecdotal evidence of the general
tendency for the executive branch to increase its reliance on unilateral actions to continue
shaping policy during its lame-duck period can be found as early as the 19th century.3 Scholars
have confirmed4 the existence of significant increases in regulatory output during the midnight
1
2
3
4
Executive Order No. 12866, 58 Federal Register 190 (Oct. 4, 1993): Sec. 3(f) (1): A rule is considered
economically significant if it is likely to “have an annual effect on the economy of $100 million or more.”
This report reflects the views of the authors, and does not represent an official position of the GW Regulatory
Studies Center or the George Washington University. The Center’s policy on research integrity is available at
http://regulatorystudies.columbian.gwu.edu/policy-research-integrity.
For a description of John Adams’ appointment of “midnight judges” and other last-minute presidential actions
see: William G. Howell and Kenneth R. Mayer, “The Last One Hundred Days.” Presidential Studies Quarterly.
Vol 35, Issue 3 (September 2005).
Using quarterly page counts in the Federal Register as a proxy for regulatory output, see: Jay Cochran III “The
Cinderella Constraint: Why Regulations Increase Significantly During Post-Election Quarters,” (October 2000)
Mercatus Center, Working Papers in Regulatory Studies. For a monthly breakdown and extended dataset
The Final Countdown: Projecting Midnight Regulations
The George Washington University Regulatory Studies Center ◆ 1
Introduction ◆ The Final Countdown: Projecting Midnight Regulations
period as early as 1948. There is also a strong consensus within this literature that the primary
cause5 of this occurrence is the transition from one administration to another. The midnight
period is most commonly defined as the final three months of an administration, occurring either
when a president fails in his bid for reelection or they conclude their second term in office.
There are likely several explanations6 that account for this spike in regulatory output, which
occurs regardless of administration or political party. The most intuitive concerns the incentives
faced by regulators, particularly the president’s political appointees, 7 racing to finish their
regulatory agenda before priorities are shifted by the incoming administration. Staff at regulatory
agencies, in general, are likely to rush to complete rules they have already put work into before
they acquire new managers who might require them to either start over, or cause delays due to
the need to get their new bosses “up-to-speed” on the details of the outstanding regulation.8
Susan E. Dudley, who served as Administrator of the Office of Information and Regulatory
Affairs (OIRA) during the 2008 – 2009 midnight period, recounts her office’s experience in
providing agency oversight during a surge of regulatory activity even after the President’s Chief
of Staff had issued a memorandum to agencies in May 2008 urging them to “resist the historical
tendency of administrations to increase regulatory activity in their final months” and had set a
deadline of November 1, 2008 for completing rules:
Initially, there was broad support for avoiding the midnight crunch, but… we
faced strong objections…not only from political appointees [but] career
employees who had worked hard on many of the regulations, were disappointed
when they did not get them across the finish line before the end…many…had
been through presidential transitions before… [and] did not relish having to break
in a new crew of political appointees before completing their projects.9
Presidential appointees, including agency heads, face additional incentives to complete their
regulatory agenda since the transition to a new administration brings an end to their tenure.
5
6
7
8
9
confirming Cochran’s results, see: Veronique de Rugy & Antony Davies, “Midnight Regulations and the
Cinderella Effect, Journal of Socio-economics, Vol. 38, Issue 6 (December 2009).
Anne Joseph O’Connell “Agency Rulemaking and Political Transitions” Northwestern University Law Review,
Vol 105, No. 2 (2011)
Jack M. Beermann “Midnight Rules: A Reform Agenda” Michigan Journal of Environmental & Administrative
Law. Volume 2, Issue 2 (2013).
Susan Dudley “Reversing midnight regulations” Regulation Vol. 24, No. 1 (Spring 2001) available at:
http://object.cato.org/sites/cato.org/files/serials/files/regulation/2001/4/dudley.pdf
Susan E. Dudley “Observations on OIRA’s Thirtieth Anniversary” Administrative Law Review Vol. 63, Special
Edition (2011) pp. 113-129. Also Beermann (2013)
Dudley (2011) p. 122-3.
The Final Countdown: Projecting Midnight Regulations
The George Washington University Regulatory Studies Center ◆ 2
Introduction ◆ The Final Countdown: Projecting Midnight Regulations
Are Midnight Rules a Problem?
There are several normative claims made regarding the need for reforms that prevent or mitigate
the occurrence of midnight rules.10 The claim that rules issued during the midnight period might
be of significantly lesser quality deserves the most attention. This might be the case for several
reasons. Empirical studies have estimated that for each additional economically significant rule
submitted to OIRA during the midnight period,11 the mean review time for all regulations
decreases by about two thirds of a day.12 Additionally, as agencies rush to meet deadlines and
significantly increase the pace with which they publish rules, it is possible that less time is spent
on ensuring that the regulatory analysis justifying the need for the rule is of good quality. This
likely also has important implications for the time that agencies spend on incorporating valuable
public feedback during notice and comment periods into further improving their rules. Finally,
agencies might lose the opportunity to incorporate feedback from the public altogether for any
rules published as interim final rules.13
Although it is notoriously difficult to measure the quality of regulations (given their scope, the
consideration of unintended consequences, etc.), scholars have attempted to do so.14 Such
findings corroborate that shorter review times correlate with lower-quality analysis. Rules
reviewed during the midnight period, in particular, were rated among the lowest quality of
analysis.15 OIRA is tasked with improving the quality of regulatory analysis, but it is asked to do
significantly more during the midnight period without an increase in staff or budgets to
compensate.16
10
11
12
13
14
15
16
Ibid. Beermann catalogues a thorough list of reasons people object to midnight rules including: views that an
incumbent administration might be attempting to illegitimately impose its agenda on a future administration, the
fact that these rules are published throughout a period when a sitting president is less accountable to the
electorate, and the fact that rules issued during midnight might be of significantly lesser quality (resulting in a
loss of public welfare).
Housed within the Office of Management and Budget, OIRA is responsible for regulatory coordination and
oversight of regulatory agencies. This includes providing feedback to executive regulatory agencies regarding the
regulatory analysis that supports their proposed rules, with the purpose of improving its quality and ensuring that
agencies reasonably considered public input (when applicable) before a final rule is issued.
Patrick A. McLaughlin “The Consequences of Midnight Regulations and Other Surges in Regulatory Activity”
Public Choice, Vol. 147, Issue 3, (June 2011).
Curtis W. Copeland “Midnight Rulemaking: Considerations for Congress and a New Administration” CRS
Report for Congress. November 24, 2008 available at: https://www.fas.org/sgp/crs/misc/RL34747.pdf
Patrick A. McLaughlin and Jerry Ellig, “Does Haste Make Waste in Regulatory Analysis?” (July 13, 2010).
Available at SSRN: http://ssrn.com/abstract=1646743
Ibid.
Susan Dudley and Melinda Warren, “Regulator’s Budget from Eisenhower to Obama” George Washington
University Regulatory Studies Center. Available at:
https://regulatorystudies.columbian.gwu.edu/regulators%E2%80%99-budget-eisenhower-obama
The Final Countdown: Projecting Midnight Regulations
The George Washington University Regulatory Studies Center ◆ 3
Introduction ◆ The Final Countdown: Projecting Midnight Regulations
Responses to Midnight Rules
If there is a legitimate reason to be concerned with the quality of regulations published during the
midnight period, then it is important to know what tools an incoming administration has at its
disposal to begin asserting its control over the regulatory process. This report concludes with a
list of actions that an incoming president and Congress can take to begin implementing their
policy priorities. However, it is worth noting that to underestimate the durability of midnight
regulations would be to ignore the empirical record. Scholars find that the vast majority of rules
persist even in the face of scrutiny by incoming administrations.17 In many cases newly-elected
presidents, in particular, find that they “cannot alter orders set by their predecessors without
paying a considerable political price…or confronting serious legal obstacles.”18
Quantitative Analysis: What to Expect this Midnight?
To summarize, there is a period of significantly increased regulatory activity known as the
midnight period during an administration’s final months in office. There is also a reasonable
concern regarding the quality of analysis that underlies these regulations due to the fact that
important elements of the regulatory process—namely OIRA review and input provided to
agencies via public comments—may be underutilized. Finally, midnight rules are not simple to
undo; the vast majority of them survive the scrutiny of a newly-elected president and Congress.
Given these facts about midnight rules, this report presents two quantitative models to answer
questions in preparation for thinking through the next presidential transition. How likely is it that
the Obama administration will increase its regulatory output during the upcoming midnight
period and to what degree? Are there systematic differences in the way that certain agencies
behave during the midnight period? The report also concludes with a review of the tools
available to the next president and Congress for addressing the midnight output of the previous
administration.
17
18
Jason M. Loring and Liam R. Roth, “Empirical Study: After Midnight: The Durability of the ‘Midnight’
Regulations Passed by the Two Previous Outgoing Administrations” 40 Wake Forest Law Review (Winter 2005)
Howell and Mayer (2005)
The Final Countdown: Projecting Midnight Regulations
The George Washington University Regulatory Studies Center ◆ 4
m
Projecting Midnight Regulations
Chapter 1
Midnight Rulemaking
Agency Independence and the Rush to Regulate
Daniel R. Pérez
Scholars studying bureaucratic structures and their outcomes on policymaking continue to debate
the level of independence that U.S. independent regulatory agencies actually experience vis-à-vis
their executive agency counterparts.19 To what extent do various institutional mechanisms
actually affect agency behavior? This study analyzes the number of rules published by both
executive and independent regulatory agencies, with a specific focus on regulatory activity
during the final three months of presidential administrations, to examine the effects of
institutional structure on agency behavior. Scholars have documented20 significant increases in
regulatory output throughout these final months, commonly referred to as the midnight period.
These midnight months present a unique opportunity to analyze the extent to which executive
and independent regulatory agencies face different pressures and constraints and thus differ in
their response to presidential transitions.
19
20
Neal Devins, David E. Lewis “Not-So Independent Agencies: Party Polarization and the Limits of Institutional
Design” Boston University Law Review. Vol. 88, Issue 2 (April 2008). Rachel E. Barkow “Insulating Agencies:
Avoiding Capture through Institutional Design” Texas Law Review, Vol. 89, Issue 1 (November 2010). Kirti
Datla and Richard L. Revesz “Deconstructing Independent Agencies (And Executive Agencies)” Cornell Law
Review. Vol. 98, Issue 4 (May 2013).
Jay Cochran III “The Cinderella Constraint: Why Regulations Increase Significantly During Post-Election
Quarters,” (October 2000) Mercatus Center, Working Papers in Regulatory Studies. Patrick A. McLaughlin “The
Consequences of Midnight Regulations and Other Surges in Regulatory Activity.” Public Choice, Vol. 147, Issue
3, (June 2011). Anne Joseph O’Connell “Agency Rulemaking and Political Transitions” Northwestern University
Law Review, Vol 105, No. 2 (2011)
The Final Countdown: Projecting Midnight Regulations
The George Washington University Regulatory Studies Center ◆ 5
Chapter 1 ◆ Midnight Rulemaking: Agency Independence and the Rush to Regulate
Daniel R. Pérez
This chapter begins by briefly discussing several of the structural differences commonly
associated with independent agencies. It then proceeds to discuss several causal mechanisms that
could explain the significant increases in regulatory activity observed during midnight months.
Finally, I discuss the findings, their implications, and future research to improve the
sophistication of the model presented in this paper. Ultimately, I find that, contrary to executive
agencies, independent agencies do not significantly increase their regulatory activity during
midnight months.
What Makes a Regulatory Agency Independent?
Many scholars point out that the actual level of independence resulting from an agency’s
structural characteristics may more closely approximate a continuum rather than a binary
classification.21 Nonetheless, those considered independent regulatory agencies contain a mix of
common characteristics22 designed to provide them a certain degree of autonomy relative to
executive agencies. The most common characteristic of independent agencies is that their statues
permit a president to remove appointed agency heads and commissioners only “for cause,” that
is, in cases of “inefficiency, neglect of duty, or malfeasance in office.”23 Other common
characteristics include: not being housed within cabinet departments, multi-member bodies in
place of a single agency head, bipartisan balance requirements, and staggered terms so that
different members’ tenure expire at different times and don’t necessarily coincide with changes
in Presidential administrations. Some agencies even have their own independent funding stream
that does not depend on the annual appropriations process but instead comes from fees levied on
the industry they regulate.24
There are several reasons why policymakers might structure an agency with any mix of these
characteristics, but the reasoning can generally be described as an attempt to reduce the level of
politicization within independent regulatory agency decisionmaking. Carrigan describes that
“with respect to regulation specifically, structuring the agency to be independent of political
21
22
23
24
Jennifer Selin “What Makes an Agency Independent?” American Journal of Political Science, Vol. 59, Issue 4
(October 2015). Also, Datla and Revesz (2013) pp. 825 and Christopher Carrigan, Lindsey Poole “Structuring
Regulators: The Effects of Organizational Design on Regulatory Behavior and Performance” (Working Paper)
Penn Program on Regulation (June 2015) pp. 7, available at: https://www.law.upenn.edu/live/files/4707carriganpoole-ppr-researchpaper062015pdf
For a study of informal mechanisms that may also provide degrees of independence to an agency see: Rachel E.
Barkow “Insulating Agencies: Avoiding Capture through Institutional Design” Texas Law Review, Vol. 89
(2010).
Datla and Revesz (2013), citing language in the Interstate Commerce Act of 1887, which created the first federal
independent regulatory agency—the Interstate Commerce Commission—setup to issue cease and desist order to
railroads if it deemed they were charging customers unfair rates.
Ibid. Examples include the Federal Reserve and the Securities and Exchange Commission.
The Final Countdown: Projecting Midnight Regulations
The George Washington University Regulatory Studies Center ◆ 6
Chapter 1 ◆ Midnight Rulemaking: Agency Independence and the Rush to Regulate
Daniel R. Pérez
control is one way that politicians can more credibly commit to the regulated industry that they
are not going to change the rules capriciously.”25
This research reinforces that executive branch agencies, whose appointee’s terms expire with the
president’s, tend to increase regulatory activity at the end of presidential administrations. This
paper does not attempt to identify or dissect the various forces that may drive this observed
increase in regulatory activity during the midnight period. Rather, it examines whether agencies
structured as independent behave differently than executive branch agencies. The research
hypothesis is the fact that independent agencies are multi-headed, bipartisan commissions whose
members are appointed to staggered terms that span different presidential terms will affect their
regulatory output during presidential transitions.
Ultimately, this chapter’s findings confirm this, allowing a rejection of the null hypothesis that
agency structure has no effect on regulatory output. The multivariate regression estimates that
every midnight month increases the average number of economically significant rules issued by
regulatory agencies threefold—from 4 to 12 per month. Most importantly, the model identifies
executive regulatory agencies as the sole driver of this increase in regulatory output. Independent
agencies do not exhibit a significant increase in their regulatory output during the midnight
period.
The Midnight Period
Jack Beermann points out that there is reason to believe that this last minute regulatory push is
not merely the result of direct intervention on the part of a sitting president.26 His work on
midnight rules includes interviews with officials involved in the rulemaking process in addition
to empirical measures of regulatory activity. He concludes that the observed increases in
regulatory activity are primarily the result of executive branch appointees working to complete
their regulatory agendas and ensure their policy priorities are exercised while they still have the
power to do so:
based on the above analysis and the interviews I conducted in connection with
this Report, it appears that Midnight Rulemaking results predominantly from
hurrying to complete work… that agency officials fear might be scuttled or
delayed by the transition.27
25
26
27
Christopher Carrigan, Lindsey Poole “Structuring Regulators: The Effects of Organizational Design on
Regulatory Behavior and Performance” (Working Paper) Penn Program on Regulation (June 2015) pp. 7,
available at: https://www.law.upenn.edu/live/files/4707-carriganpoole-ppr-researchpaper062015pdf
Jack M. Beermann. “Midnight Rules: A Reform Agenda.” Michigan Journal of Environmental & Administrative
Law. Volume 2, Issue 2 (2013).
Ibid. p. 40
The Final Countdown: Projecting Midnight Regulations
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Chapter 1 ◆ Midnight Rulemaking: Agency Independence and the Rush to Regulate
Daniel R. Pérez
This observation is in line with other scholars who point out that “because agency heads tend not
to retire from public life after their tenure, they… consider the impacts of their decisions on
future career prospects.”28 In summary, the President is not the only—or perhaps even most
important—part of the Executive branch directly responsible for last-minute increases in
regulatory activity.
Executive vs. Independent Regulatory Agency Rulemaking during
Midnight
The midnight period (defined here as November to January during a president’s final year in
office) presents a unique opportunity to quantify whether independent agencies respond
differently to the forces commonly perceived to result in increased regulatory activity during
midnight months. Not only are independent agencies structured with the intent of granting them
a measure of reduced political control from the executive branch, but several aspects of their
institutional design (such as the staggered terms of agency heads) might allow them to better
avoid other pressures, such as meeting deadlines, vis-à-vis executive regulatory agencies.
The following sections analyze data on rules published by both independent and executive
regulatory agencies to quantify the extent to which their regulatory output changes during the
midnight period. The analysis tests my hypothesis that agency structure affects regulatory
behavior during presidential transitions; their bipartisan leadership and staggered term structure
should make them less likely than executive branch agencies to increase regulatory activity in the
final months of a presidential term.
Data Source, Sample, and Method
To study the relative behavior of independent and executive agencies during the midnight period,
I collected data on executive regulatory agency rulemaking using the Reginfo.gov website 29
maintained by the Office of Information and Regulatory Affairs (OIRA) and the General
Services Administration (GSA). I also used the Government Accountability Office (GAO)
database30 for published rules issued by independent regulatory agencies. In order to keep the
data collection process manageable and focus on the rules that were likely to have the greatest
impact, the analysis narrows its scope to focus on rules with expected annual impacts of $100
million or more, or “economically significant”31 rules promulgated by executive regulatory
28
29
30
31
Datla and Revesz (2013)
http://www.reginfo.gov/public/do/eAdvancedSearchMain
http://www.gao.gov/legal/congressional-review-act/overview
Executive Order No. 12866, 58 Federal Register 190 (Oct. 4, 1993): Sec. 3(f) (1): A rule is considered
economically significant if it is likely to “have an annual effect on the economy of $100 million or more.”
The Final Countdown: Projecting Midnight Regulations
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Chapter 1 ◆ Midnight Rulemaking: Agency Independence and the Rush to Regulate
Daniel R. Pérez
agencies and “major”32 rules promulgated by independent agencies. My data cover the period
from November 199733 through January 2016.
It is worth noting in advance that the parameters defining an “economically significant” rule and
a “major” rule are similar but not identical;34 still, the similarities in their classification should be
sufficient to avoid any concerns of measurement validity in treating these rules as equal for the
purpose of analyzing the impact of the midnight period and institutional structure on agency
rulemaking. One final concern is that the dataset might undercount the actual number of “major”
rules issued by independent agencies. Given that these agencies do not benefit from oversight by
OIRA, it is possible that an incentive to under-classify the true cost of a rule exists and will not
be corrected absent this oversight mechanism. Although it’s possible that this could alter the
findings, separate regressions—not included in this paper—that included all rules published by
independent regulatory agencies act as a robustness check. They confirm these findings, namely
that independent agencies do not display increases in regulatory activity during the midnight
period.
Table 1 lists the variables considered; the dependent variable is the number of economically
significant/major rules published by regulatory agencies in a given month. The primary
independent variable is an interaction term identifying a midnight month for an executive
regulatory agency, which was derived by multiplying the indicator variables for whether an
agency was an executive regulatory agency and whether or not the month is a midnight month.
The other variables control for differences due to variations in agency budgets or particular
months of the year.
I first estimated a bivariate regression using the number of large rules issued by agencies as the
dependent variable and whether each rule was issued during a midnight month as the
independent variable for both executive and independent regulatory agencies, separately. I then
estimated a multiple regression using data on the number of regulations issued by both executive
and independent agencies to control for effects that could be the result of differences in: agency
budgets, months of rulemaking, whether an agency is executive or independent, and whether the
rule was issued during the midnight period.
32
33
34
5 U.S.C § 801(a)(1)(A): The CRA defines a major rule as one “likely to result in (1) an annual effect on the
economy of $100 million or more; (2) a major increase in costs or prices for consumers, individual industries,
federal, state, or local government agencies, or geographic regions; or (3) significant adverse effects on
competition, employment, investment, productivity, or innovation, or on the ability of United States-based
enterprises to compete with foreign-based enterprises in domestic and export markets.”
The choice to begin the dataset in November of 1997 allows for consistent classification of “major” rules by
independent regulatory agencies as defined in the Congressional Review Act, 5 U.S. Code § 804
For a concise analysis of this difference see: http://www.regblog.org/2011/09/27/measuring-regulatory-activitywhat-can-we-learn-from-the-unified-regulatory-agenda/
The Final Countdown: Projecting Midnight Regulations
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Chapter 1 ◆ Midnight Rulemaking: Agency Independence and the Rush to Regulate
Daniel R. Pérez
Table 1. Variables
Variable Name
Definition
Level of Measurement
BigRules
Dependent
variable;
economically Interval-ratio
significant or major rules published by
regulatory agencies
ExecXmidnight
Primary independent variable; interaction Nominal
term, that multiplies the indicator
variables: Executive and Midnight
January,
February, etc.
Indicator variables controlling
differences due to month
Budget
Yearly budget allocated to executive or Interval-ratio
independent agencies in $10 billion USD
Midnight
Indicator variable for whether or not the Nominal
month is during a Midnight period
Executive
Indicator variable for whether or not the Nominal
agency is an executive regulatory agency
for Nominal
The results for executive agencies largely confirm the findings in the literature, 35 namely that
executive regulatory agency rulemaking exhibits a statistically significant increase during the
midnight period. The results for independent agencies, which are not analyzed in the literature,
indicate that there is not an appreciable increase in the number of major regulations issued during
midnight months.
Sample Description
Table 2 shows the summary statistics of monthly regulatory activity for executive and
independent regulatory agencies; each for 219 observations (months) from November 1997
through January 2016, with 0 observations missing. Some of the differences in rulemaking
statistics between executive and independent agencies already lend credence to the expectations
of agency behavior during the midnight period as described above.
For executive regulatory agencies, the average number of economically significant rules issued
per month is 4.13 and ranges from a low of 0 to a high of 22. As shown in Figure 1, this
35
Jay Cochran III “The Cinderella Constraint: Why Regulations Increase Significantly During Post-Election
Quarters” George Mason University. Mercatus Center. March 8, 2001. Patrick A. McLaughlin “The
consequences of midnight regulations and other surges in regulatory activity” Public Choice. Vol. 147, Issue 3
(June 2011).
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The George Washington University Regulatory Studies Center ◆ 10
Chapter 1 ◆ Midnight Rulemaking: Agency Independence and the Rush to Regulate
Daniel R. Pérez
distribution is appreciably positively skewed, since there are several large outliers (22 is roughly
a 430% increase from the average number of rules issued per month), most of which occur
during midnight periods.
For independent regulatory agencies, the average number of major rules issued per month is 1.16
and ranges from a low of 0 to a high of 5. Although this distribution is also positively skewed, its
magnitude (much less than executive agencies) also correlates with my initial hypotheses about
independent agency responsiveness to political pressure during the midnight period. Once again,
even these initial calculations suggest that independent agencies do not exhibit significant
increases in regulatory activity measured by the number of major rules published per month.
Table 2. Background Characteristics of Sample
Mean
Median
Min
Max
Economically Significant rules
issued by executive agencies
4.13
4.00
0
22
Major rules issued by
independent agencies
1.16
1.00
0
5
Figure 1. Distribution of Economically Significant Rules, Executive Regulatory
Agencies, from November 1997 through January 2016
The Final Countdown: Projecting Midnight Regulations
The George Washington University Regulatory Studies Center ◆ 11
Chapter 1 ◆ Midnight Rulemaking: Agency Independence and the Rush to Regulate
Daniel R. Pérez
Results: Independent Agencies Immune to “Midnight”
As shown in Table 3, the bivariate regression on executive agency rulemaking demonstrates that
the midnight months are associated with an increase of 8 additional economically significant
rules. This difference was statistically significant at the 1% level (p-value = .000). This indicates
a large, positive effect since the average number of economically significant rules issued by
executive regulatory agencies is 4.13 (this is roughly a 300% increase from an average of about 4
rules to 12 per month). On the other hand, the bivariate regression on independent agency
rulemaking estimated that the midnight period had no effect on the number of major rules
published. The difference was not statistically significant at conventional levels (p-value = .486).
Additional interesting relationships are shown through the multivariate regression results. For
example, holding all other variables constant, there is a statistically significant relationship
between agency budgets and rulemaking, although the effect is fairly weak with an estimated .01
additional rules each month for every $10 billion increase in agency funding; this was
statistically significant at the 1% level (p-value=.000). There was also a reasonably strong
relationship between the month of August and rulemaking, with an estimated 1.22 additional
rules during the month of August. This was significant at the 1% level (p-value=.004). Although
this effect is not accounted for in any major theory, there is at least anecdotal 36 evidence that
agencies promulgate more rules during Congress’ yearly month-long recess in August.
As Table 3 further demonstrates, the effect of the midnight period on agency rulemaking is not
evident unless we account for agency structure. The effect of midnight on regulatory agency
rulemaking without accounting for agency structure is not significant at any conventional level
(p-value=.967). However, when looking at the effect of the midnight period for executive
agencies relative to independent agencies and non-Midnight months, there is a strong, positive
effect (holding all other variables constant). The analysis estimates that a midnight month is
likely to increase executive regulatory output by 8.1 additional economically significant rules
holding constant month and agency budgets; this effect is significant at the 1% level (pvalue=.000). Figure 2 illustrates the average effect of a midnight month on agency rulemaking.
In summary, our primary independent variable of interest—being a regulatory agency during a
midnight month—demonstrated a statistically significant and strong effect on the number of
economically significant rules published; we can comfortably reject a null hypothesis stating that
agency structure has no effect on rulemaking during the midnight period.
36
Dan Goldbeck, “August: The Dog Days of Regulation?” Insight, American Action Forum. August 11, 2015
available at: https://www.americanactionforum.org/insight/august-the-dog-days-of-regulation/
The Final Countdown: Projecting Midnight Regulations
The George Washington University Regulatory Studies Center ◆ 12
Chapter 1 ◆ Midnight Rulemaking: Agency Independence and the Rush to Regulate
Daniel R. Pérez
Table 3. Regression Results of Agency Rulemaking
Midnight Period
Bivariate (Executive
Regulatory Agencies)
8.265***
(.979)
Bivariate (Independent
Regulatory Agencies)
0.354
(.507)
Executive
Regulatory agency
during the Midnight
Period
Agency Budget
Executive Agency
January
February
August
December
Constant
Observations
R2
3.901
219
0.247
1.146
219
.002
Multivariate
0.031
(.766)
8.106***
(1.061)
0.010***
(.002)
0.610
(.494)
0.185
(.431)
-0.528
(.427)
1.222***
(.427)
0.762
(.425)
0.930
438
0.527
Notes: i) * p<0.10 ** p<0.05 *** p<0.01; ii) Dependent variable is the number of economically significant or major
rules published by executive or independent regulatory agencies per month with 219 observations for the bivariate
regressions and a combined 438 observations for the multivariate regression; iii) Standard errors in parentheses; iv)
Data obtained from OIRA and GAO databases.
The Final Countdown: Projecting Midnight Regulations
The George Washington University Regulatory Studies Center ◆ 13
Chapter 1 ◆ Midnight Rulemaking: Agency Independence and the Rush to Regulate
Daniel R. Pérez
Figure 2. Estimate of Midnight Period on Regulatory Agency Rulemaking, Average
Output
12
Number of Rules
10
8
Average Regulatory
Output
6
4
Estimated Output During
Midnight Period
2
0
Economically
Major Rules,
Significant Rules, Independent Regulatory
Executive Regulatory
Agencies
Agencies
Conclusion: Agency Structure Affects Regulatory Output
This analysis demonstrates that independent regulatory agencies behave differently than their
executive agency counterparts during the midnight period. Unlike executive regulatory agencies,
they do not significantly increase their regulatory activity during midnight months (measured by
the number of major rules published). This indicates that there is something systematically
different about independent regulatory agencies that allow them to avoid several of the pressures
that lead to an increase in regulatory output during the final months of presidential
administrations. It supports the hypothesis that the different institutional arrangements of these
agencies makes them less susceptible to pressures to wrap up regulatory activity at the end of a
presidential administration.
The issue of measurement validity was already discussed earlier regarding the slight difference
in terminology between “economically significant” and “major” for classifying rules; ultimately
the difference is not likely to significantly alter the results given our large number of
observations and the fact that separate regressions were run using all rules published as a
robustness check of the results. As far as internal validity is concerned, the control variables
allow the model to account for any spurious relationships that might otherwise challenge causal
assumptions about the midnight period being merely an intervening variable (e.g. perhaps there
is something particular about all Novembers, Decembers, and Januarys, etc.)
The Final Countdown: Projecting Midnight Regulations
The George Washington University Regulatory Studies Center ◆ 14
Chapter 1 ◆ Midnight Rulemaking: Agency Independence and the Rush to Regulate
Daniel R. Pérez
While it’s true that this study looks specifically at independent vs. executive regulatory agency
rulemaking within the U.S., it’s conceivable that its lessons on agency structure and policy
outcomes could be applied as a framework to other jurisdictions outside the U.S.; the findings
might be relevant in thinking through other comparative cases.
Future Research
There are several enhancements that could help increase both the level of sophistication of this
model, and its utility in quantifying the contribution of specific institutional arrangements in
providing independence from the executive branch. This research relies on data on all rules
published by independent agencies and significant rules published by executive regulatory
agencies. Further research could break these down by agency, instead of its current binary
classification of total executive or independent, to help tease out additional information about
regulatory activity during the midnight period.
Finally, an expanded regression model could employ binary indicator variables to estimate the
effects of particular institutional arrangements (staggered terms, multi-member bodies, etc.) for
each agency. This would help disaggregate agencies into a continuum based on the level of their
respective increase in regulatory activity during midnight months. These additions can serve to
strengthen our confidence in the model’s estimates and better quantify the effects of specific
institutional arrangements.
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The George Washington University Regulatory Studies Center ◆ 15
m
Projecting Midnight Regulations
Chapter 2
Modeling “Midnight”
A Quantitative Forecast of Regulatory Activity
Sofie E. Miller
During the last few months of a President’s tenure, regulatory agencies tend to finalize large
swaths of rules in anticipation of a new administration with new regulatory priorities.37 These
last-minute regulations are termed “midnight” rules, and are a matter of speculation leading up to
an election and a new administration.38 The certainty of a new administration in 2017 raises
questions as to how much regulatory activity the public can expect during the waning months of
President Obama’s administration—especially given the perception that President Obama has
been more active on the regulatory front than some of his predecessors.39
Republican and Democratic presidents alike have made use of the final months of their
administrations to promulgate rules to advance their agendas.40 Based on rulemaking activity of
past administrations, our model forecasts how many new rules President Obama will publish at
the end of his term, and whether we can expect significantly more regulatory activity than during
37
38
39
40
Patrick McLaughlin. “The consequences of midnight regulations and other surges in regulatory activity.” Public
Choice Vol. 147:3. 2011.
Cheryl Bolen. “OIRA Wish for 2016: An Orderly Regulatory Process.” Bloomberg BNA. February 1, 2016.
http://www.bna.com/oira-wish-2016-n57982066769/. See also: Nick Timiraos, “Obama Readies Flurry of
Regulations,” The Wall Street Journal, April 7, 2016 http://www.wsj.com/articles/obama-readies-flurry-ofregulations-1460077858, and Tim Devaney, “White House racing to finish new regs,” The Hill. April 8, 2016.
http://thehill.com/regulation/275615-obama-administration-racing-to-finish-regs
Daniel R. Pérez. “President Obama’s Regulatory Output: Looking Back at 2015 and Ahead to 2016.” The George
Washington University Regulatory Studies Center. January 12, 2016.
https://regulatorystudies.columbian.gwu.edu/sites/regulatorystudies.columbian.gwu.edu/files/downloads/West%20Pace%20of%20E.S.%20Rule%20Increased-2.pdf
Jay Cochran. “The Cinderella Constraint: Why Regulations Increase Significantly During Post-Election
Quarters.” The Mercatus Center, George Mason University. March 2001.
http://mercatus.org/publication/cinderella-constraint-why-regulations-increase-significantly-during-post-election
The Final Countdown: Projecting Midnight Regulations
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Chapter 2 ◆ Modeling Midnight: A Quantitative Forecast of Regulatory Activity
Sofie E. Miller
the midnight periods of other administrations. The use of a predictive probabilistic model to
forecast regulatory activity during the midnight period is in contrast to previous studies that have
relied on regressions.41 This model both supports and builds off of previous quantitative analysis
in this field to predict a large increase in economically significant rulemaking during Obama’s
final months in office.
In particular, it forecasts that the number of economically significant rules issued over the next
seven months will exceed President Obama’s previous activity by over 100%. When we use a
more traditional definition of midnight—the post-election quarter between November 2016 and
January 2017—the model predicts an increase of over 200%.
Modeling Approach
This model uses the rate of monthly regulatory activity during the midnight periods of presidents
George H.W. Bush, Bill Clinton, and George W. Bush to predict future rates of regulatory
activity during the 2016-2017 Obama midnight.
Data: Measuring Regulatory Activity
The Office of Information and Regulatory Affairs (OIRA)42 and the Federal Register43 provide
publicly available data on the number of significant rules, economically significant rules, and
total rules finalized during each month of the past two decades. Executive Order 12866 defines a
“significant rule” as a rule that materially alters the budgetary impact of entitlements, grants, user
fees, or loan programs, or one that raises novel legal or policy issues. 44 An “economically
significant” rule is defined as a rule that has an annual effect of $100 million or more on the
economy, or one that adversely affects “the economy, a sector of the economy, productivity,
competition, jobs, the environment, public health or safety, or State, local, or tribal governments
or communities.”45
41
See, for example, Jay Cochran III, The Cinderella Constraint: Why Regulations Increase Significantly During
Post-Election Quarters (Mercatus Center at George Mason University, Working Paper, 2001),
http://www.mercatus.org/PublicationDetails.aspx?id=17546.
Veronique de Rugy & Anthony Davies, Midnight Regulations and the Cinderella Effect, 38 J. Socio-Economics
886, 887 (2009)
Jerry Brito & Veronique de Rugy, Midnight Regulations and Regulatory Review, 61 Admin. L. Rev. 163, 168
(2009).
Patrick A. McLaughlin. “Empirical Tests for Midnight Regulations and Their Effect on OIRA Review Time.”
Mercatus Center Working Paper.
http://mercatus.org/sites/default/files/publication/WPPDF_Empirical_Tests_for_Midnight_Regulations.pdf
42
Data on “significant” and “economically significant” rules back to 1981 is accessible from the Office of
Information and Regulatory Affairs’ website (www.RegInfo.gov).
43
Historical data on number of rules back to 1994 is accessible from the Federal Register
(https://www.federalregister.gov/).
44
Executive Order 12866. “Regulatory Planning and Review.” September 30, 1993.
45
Executive Order 12866. “Regulatory Planning and Review.” Sec. 3(f)(1) September 30, 1993.
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Chapter 2 ◆ Modeling Midnight: A Quantitative Forecast of Regulatory Activity
Sofie E. Miller
Because Executive Order 12866 was signed in 1993, the definitions for economically significant
and significant rules have officially existed for only two midnight periods (Clinton-Bush and
Bush-Obama). However, EO 12866 was preceded by President Reagan’s Executive Order 12291
in 1981, which established a definition for “major” rules that was essentially identical to the
post-1993 definition of “economically significant” rules.46 Therefore the definition for
economically significant rules has remained essentially constant since 1981, which includes five
midnight periods, and these data are also available via OIRA databases. However, available data
on published rules from the Reagan administration is internally inconsistent and cannot be
verified; therefore this model includes only three midnight periods.47 OIRA databases also
contain pre-1993 data on “significant” rules, but this definition is not consistent with the
definitions established in EO 12866 which limits the number of midnight periods for which we
can collect significant rule data.
Within these rule data we can specify the months that represent transitions from one
administration to another, the “midnight” period, and quantify how the rate of regulation during
those periods differs from other sample periods. This model uses the rate of change from the
overall monthly average by presidential administration to measure and predict the rate of
regulatory activity.
Method: Predicting Midnight Regulation
If each month represents a specific case, and each case contains a set number of new rules (or a
percent change from mean regulatory activity), we can randomly select “midnight” cases from
the dataset to represent the different regulatory scenarios that are possible during the Obama
midnight. Each case (month) is associated with a number of new rules and a percentage change
in the rate of regulation. For example, the table below displays some of the months and
associated economically significant rulemaking activities of previous administrations.
46
47
Executive Order 12291. “Federal Regulation.” February 17, 1981. Rescinded by Executive Order 12866,
September 30 1993.
We are interested in the number of published rules, not concluded rules (which indicates the time at which OIRA
completed review of a regulation). Some rules that are listed as “concluded” during the Reagan administration
were never listed as “published” on the OIRA database even if they were actually published; this inconsistency
leads us to omit this data until it can be cross-checked against entries into the Federal Register, which has not yet
been digitized pre-1994.
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Chapter 2 ◆ Modeling Midnight: A Quantitative Forecast of Regulatory Activity
Sofie E. Miller
Midnight Period Economically Significant Rules
(September-January)
Case
Period
Year
Month
# Economically
Significant Rules
% Change from
Average Rate
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
1992
1992
1992
1992
1993
2000
2000
2000
2000
2001
2008
2008
2008
2008
2009
September
October
November
December
January
September
October
November
December
January
September
October
November
December
January
4
2
5
2
28
4
3
10
6
22
1
13
15
9
11
6.08%
-46.96%
32.60%
-46.96%
642.54%
15.65%
-13.27%
189.12%
73.47%
536.05%
-70.38%
285.02%
344.25%
166.55%
225.78%
We build a simulation that randomly selects cases from a sample of midnight months to build a
month-by-month projection of future midnight rulemaking activity for a given time period
scenario, based on the average rate of rulemaking during the Obama administration. Running a
simulation that returns these total rulemaking scenarios 2,000 times provides a range of probable
estimates of regulatory activity during the forthcoming midnight period.
Defining the “Midnight Period”
Typically, the midnight period is defined as beginning after the November presidential election,
and ending with the start of a new administration in January of the following year. However, for
reasons discussed in greater detail below, economically significant regulatory activity was spread
throughout the final year of the Bush 43 administration rather than concentrated in the postelection period. For this reason, and because the more traditional definition limits our model to
nine relevant observations (November 1992 – January 1993, November 2000 – January 2001,
and November 2008 – January 2009), we examine regulatory activity under three definitions of
“midnight.” The model forecasts activity during the last seven months and the last five months,
as well as the final three months of President Obama’s presidency.
Further, this model uses two alternate samples to predict midnight activity. The base case model
uses historical cases from the months being forecasted—e.g., November – January—to predict
regulatory activity during that timeframe in the Obama administration. The second sample, used
for sensitivity purposes, draws on cases that include the previous two months of regulatory
activity (e.g. sampling September – January to forecast November – January).
This model forecasts regulatory activity during the final seven months of Obama’s presidency—
from July 2016 to January 2017—to provide an overview of potential regulatory activity during
the remainder of the President’s tenure. Because this model draws from a pool of observations
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Chapter 2 ◆ Modeling Midnight: A Quantitative Forecast of Regulatory Activity
Sofie E. Miller
that are not traditionally considered part of the midnight period, this forecast is a relatively
conservative estimate of rulemaking during Obama’s final months in office.
Types of Regulatory Activity
This model focuses on output of significant and economically significant final rules published in
the Federal Register. Because of the significant number of total rule output in any given year,
and the relatively small proportion of significant rules,48 midnight periods do not typically affect
total rule output. As a robustness check, this model uses the same parameters to forecast total
rules to indicate whether the modeling approach provides reasonable results.49 We find that the
projected midnight effect on total rules is, as one would expect, essentially nonexistent,
reinforcing the use of this model to predict trends in other types of rulemaking.
In addition, concerns about midnight regulation typically center on increases in significant or
economically significant rules. These rules represent the largest economic impact on private
parties and generally incur both significant costs and benefits to the public. Because of their
substance and substantive impact, these rules are more likely to be a component of a president’s
agenda.
Of note is that these definitions are limited to rules promulgated by the Executive Branch. OIRA,
which keeps data on significant and economically significant rules, does not have authority to
review rules promulgated by independent agencies, such as the National Labor Review Board,
the Consumer Financial Protection Agency, and the Securities and Exchange Commission.
However, other research in this report finds that these are less susceptible to the influence of an
outgoing president’s regulatory agenda, in which case they are less relevant to this model.
Findings
This model predicts a significant increase in economically significant rules, along with a modest
increase in significant rules during Obama’s final months in office. The base case scenario,
which uses percent change in rule activity from the long-term average to forecast the number of
midnight regulations, uses rule data from 1989-2015 for economically significant rulemaking,
and data from 1993-2015 for significant rules.
The below graph shows the distribution of possible outputs of economically significant rules in
the final seven months of the Obama administration. In 97% of runs, the number of economically
significant rules is greater than 33—the Obama administration’s current seven-month average—
indicating that we are likely to see an increase in economically significant rulemaking during the
Obama midnight. The model predicts a mean of 72 economically significant rules between July
48
49
E.g., 3,408 total final rules in 2015, 3,541 in 2014, and 3,659 in 2013. For reference, significant and
economically significant rules constituted only 5.3% and 1.7%, respectively, of all final rules issued in 2015.
We find this approach to be robust because it estimates total rule activity that essentially mirrors the current
administration trends. This is in keeping with historical total rule activity during midnight periods.
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Chapter 2 ◆ Modeling Midnight: A Quantitative Forecast of Regulatory Activity
Sofie E. Miller
2016 and January 2017, a 118% increase over Obama’s current average rate of regulation. In
over 70% of cases, the number of predicted rules exceeds the number issued during Bush 41’s,
Clinton’s, and Bush 43’s final seven months in office (50, 55, and 57, respectively).
Forecasted Economically Significant Rules
(July 2016 - January 2017)
Frequency Over 2,000 Runs
350
300
Projected Obama
Midnight
250
Bush 41
Midnight
200
150
Clinton
Midnight
100
Bush 43
Midnight
50
0
# Economically Significant Rules Projected
This modeling approach suggests a higher rate of growth in economically significant rules than
in significant rules. As seen in the below graph, the model forecasts a mean of 167 significant
rules, far fewer than were issued during the final seven months of the Clinton and Bush
administrations (238 and 242, respectively). However, this is no surprise: Obama has on average
issued between 21% – 40% fewer significant rules per month than the previous two
administrations. Because Obama’s baseline is lower, so too is the probability that his
administration will issue more significant midnight rules than his predecessors.
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Chapter 2 ◆ Modeling Midnight: A Quantitative Forecast of Regulatory Activity
Sofie E. Miller
Forecasted Significant Rule Activity
(July 2016 - January 2017)
Frequency Over 2,000 Runs
300
250
Obama Current
Average
200
150
Projected
Obama
Midnight
100
50
80
90
100
110
120
130
140
150
160
170
180
190
200
210
220
230
240
250+
0
Projected # Final Signficant Rules
While Obama’s rulemaking pace will likely not exceed Clinton’s or Bush’s, in 85% of cases he
is predicted to issue more significant rules during the next seven months than his current sevenmonth average of 136.
Sensitivity Analysis
This analysis is sensitive to multiple parameters, including the type of regulation measured, the
months of rulemaking classified as midnight in the projections, and the scope of the sample used
to draw cases. For sensitivity purposes, we compare results under different scenarios of each
parameter to identify which factors have the greatest impact on forecasts of regulatory activity.
Alternate Midnight Periods
In order to draw on a larger sample of observations, this model’s base case scenario uses data
from July through January of previous midnight periods to predict regulatory outcomes for July
2016 through January 2017. The midnight period is typically defined much more narrowly,
beginning instead during the fall of an election year. While this definition of midnight is more
traditional (and perhaps more relevant because it focuses on activity completed after election
results are known), it does not necessarily represent the final-year regulatory patterns of past
administrations.
An end-of-term regulatory surge has occurred in different time periods for different presidencies.
For example, President Clinton’s and President’s George H.W. Bush’s primary midnight activity
was concentrated in the very final months of their administration. Perhaps to avoid that finalquarter surge, President George W. Bush took action that served to spread an increase in
The Final Countdown: Projecting Midnight Regulations
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Chapter 2 ◆ Modeling Midnight: A Quantitative Forecast of Regulatory Activity
Sofie E. Miller
regulatory activity across several months of his final year in office. 50 These differences in finalyear regulatory patterns, as measured by the number of final economically significant rules
published, are illustrated in the below graph.
# Economically Significant Rules
Comparing Midnights Across Administrations
30
25
20
Bush 41
15
Clinton
10
Bush 43
5
Non-Midnight
Average
0
One cause of this difference in midnight activity was issuance of the May 2008 “Bolten memo”
by Chief of Staff Joshua Bolten, which instructed agencies that final rules to be published by the
end of the Bush administration must be proposed no later than June 1, 2008, and finalized no
later than November 1, 2008.51 In the Obama administration, OIRA Administrator Howard
Shelanski issued a similar memo on January 17, 2016 instructing agencies to adhere to the
timelines for their rules established in the fall 2015 Unified Agenda.52
The pattern of final-year regulatory activity may also be influenced by the Congressional Review
Act of 1996, which established expedited procedures by which Congress could overturn a
regulation. Since, under the CRA, regulations issued in the last few months are potentially
subject to disapproval by the new Congress (and beyond the reach of the outgoing president’s
veto authority) recent outgoing administrations have greater incentives to complete regulatory
priorities before their final quarter.53
50
51
52
53
Susan Dudley. “Regulatory Activity in the Bush Administration at the Stroke of Midnight,” Engage, Vol. 12,
Issue 2, Summer 2009. http://www.fed-soc.org/library/doclib/20090720_DudleyEngage102.pdf
Joshua B. Bolten, Chief of Staff. “Memorandum for the Heads of Executive Departments and Agencies: Issuance
of Agency Regulations at the End of the Administration.” May 9, 2008.
Howard Shelanski, Administrator, Office of Information and Regulatory Affairs. “Memorandum for Deputy
Secretaries: Regulatory Review at the End of the Administration.” December 17, 2015.
https://www.whitehouse.gov/sites/default/files/omb/assets/agencyinformation_circulars_memoranda_2015_pdf/r
egulatory_review_at_the_end_of_the_administration.pdf
Christopher M. Davis & Richard S. Beth. “Agency Final Rules Submitted After May 16, 2016, May Be Subject
to Disapproval in 2017 Under the Congressional Review Act.” Congressional Research Service. February 4,
2016.
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Chapter 2 ◆ Modeling Midnight: A Quantitative Forecast of Regulatory Activity
Sofie E. Miller
It is unclear whether regulatory activity in President Obama’s final year in office will be more
similar to the patterns established by Bush 41 and Clinton or that of Bush 43. For that reason,
this model also forecasts regulatory outcomes for September 2016 through January 2017 and
November 2016 through January 2017. The below chart compares the probability across models
that the Obama midnight will exceed Obama’s current rulemaking average and rates of
regulation during previous midnight periods.
Probability of Regulatory Activity Surpassing
Previous Administrations
100%
90%
80%
70%
60%
% > Obama Average
50%
% > Bush 41 Midnight
40%
% > Clinton Midnight
30%
% > Bush 43 Midnight
20%
10%
0%
July-Jan
Sept-Jan
Model Projections
Nov-Jan
Each model finds strong probability that the Obama midnight will include higher rates of
rulemaking than during the rest of the Obama administration. Likelihood that an Obama
midnight will also surpass the Bush 41 midnight is also strong across models, between 75 – 81%
likelihood. While a forecasted Obama midnight is also likely to surpass both the Clinton and
Bush 43 midnights in all models, it does so at lower rates (between 68 – 75%) depending on the
time periods considered.
Alternate Sampling Periods
As discussed above, this model uses two samples from which to draw midnight observations:
one sample that is limited only to the months being projected, and another which also draws
from the previous two months (e.g. data from July – January is pulled to predict rulemaking in
September – January). Using an extended sample period to forecast regulatory activity under
different definitions of midnight has the advantage of offering more data points, but may be a
less accurate predictor of future activity (since, for example, it includes regulatory output in July
to predict output in December). With this approach, Obama’s midnight is extremely likely to
exceed his current rate of rulemaking in all scenarios, but his midnight is less likely to surpass
previous administrations’. The model outputs are compared and contrasted in the figure below.
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Chapter 2 ◆ Modeling Midnight: A Quantitative Forecast of Regulatory Activity
Sofie E. Miller
100%
Economically Significant Rulemaking Across
Model Specifications
90%
80%
70%
% > Obama Average
60%
% > Bush 41 Midnight
50%
40%
% > Clinton Midnight
30%
% > Bush 43 Midnight
20%
10%
0%
July-Jan
Nov-Jan
Predictive Month-onMonth Sample
July-Jan
Nov-Jan
Expanded Previous
Month Sample
Conclusion: Economically Significant Regulation to Increase
Substantially
Across all models, there is a strong likelihood—greater than 97%—that Obama will issue more
economically significant rules during his final months in office than he has during similar
periods earlier in his administration. Our models find that this administration’s output of
economically significant rules will increase by over 100% over the next seven months, or by
over 200% between November 2016 and January 2017. Our model anticipates that agencies will
finalize approximately 12 economically significant rules per month between September 2016 and
January 2017, an increase more than 150% from Obama’s current rulemaking average. He is
also likely to issue more economically significant rules during the midnight period (regardless of
which definition we use) than his predecessors have.
On the other hand, while Obama is also very likely to increase his significant rulemaking activity
during these periods, his rate of significant rules will not likely surpass previous
administrations’. Our model anticipates that agencies will finalize approximately 30 significant
rules per month between November 2016 and January 2017, an increase more than 50% from
Obama’s current rulemaking average for similar timespans.
The Final Countdown: Projecting Midnight Regulations
The George Washington University Regulatory Studies Center ◆ 25
m
Projecting Midnight Regulations
CONCLUSION
The end of a president’s term provides interesting insights into how political factors influence
rulemaking activity, specifically the issuance of economically significant rules (those with
estimated annual impacts of $100 million or more). As we find earlier in this report, it also
presents a key opportunity to test whether an agency’s structure affects regulatory activity during
presidential transitions.
The final months of an outgoing presidential administration typically generate a significant
volume of regulatory activity. This increased regulatory activity during the “midnight” period
has been documented as early as the Carter administration’s transition to Reagan, 54 and has
accompanied every presidential transition since, regardless of political party.
Several causal mechanisms are likely responsible for the observed increase in regulatory activity
during midnight months. The President is running out of time and Congress is a lame duck in the
wake of a presidential election. As a result, the administration relies on unilateral action that only
requires cooperation from other members of the executive branch, such as issuing regulations, to
propagate its policy priorities.55
There are a number of consequences from this rush to regulate, not the least of which is
constraining the policy options available to the incoming elected president. For example, rules
issued during the latter half of an election year tend to have poorer quality analysis, 56 suggesting
that agencies may have spent less time carefully thinking through the consequences of their rules
before publishing them. Because of the compressed timeframe, midnight regulations may also
suffer from insufficient public participation in the rulemaking process, as the public may not
have time to submit comments and agencies may not have time to incorporate valuable feedback.
An increase in economically significant rules from executive regulatory agencies during
54
55
56
Susan Dudley. “Reversing Midnight Regulations.” Regulation Vol. 24, No. 1 (Spring 2001) available at:
http://object.cato.org/sites/cato.org/files/serials/files/regulation/2001/4/dudley.pdf
William G Howell & Kenneth R Mayer “The Last One Hundred Days.” Presidential Studies Quarterly. Vol 35,
Issue 3 (September 2005).
Jerry Ellig. “Midnight Regulation: Decisions in the Dark?” Mercatus Center at George Mason University.
August 28, 2012. http://mercatus.org/publication/midnight-regulation-decisions-dark
The Final Countdown: Projecting Midnight Regulations
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Conclusion ◆ The Final Countdown: Projecting Midnight Regulations
midnight could also result in less time for review by the Office of Information and Regulatory
Affairs (OIRA), which could also lead to rules of lesser quality. In sum, midnight rules
Findings: Economically Significant Rules to Surge during Midnight
This report uses two robust quantitative methods to predict the number of regulations that
regulatory agencies will issue during the final months of President Obama’s administration: a
regression model that examines both executive and independent agency rulemaking, and a
probabilistic model that forecasts the number of economically significant rules to be finalized.
Both models find that rulemaking increases significantly during the midnight period for
executive branch agencies and predict a surge in economically significant regulation during
President Obama’s midnight period. However, Pérez finds that independent agencies 57 do not
experience a similar increase in rulemaking during this period.
Using a regression model, Pérez finds that there is indeed an increase in regulatory activity
surrounding the midnight period. Specifically, he estimates that during the post-election
midnight quarter (November through January) executive agencies issue an additional eight
economically significant rules58 per month, which would increase rulemaking to a monthly
average of 12 economically significant rules per month. Miller reinforces the direction of these
findings using a predictive model that focuses on executive branch agencies and several
definitions of midnight (the last seven, five, and three months). Running the model over 2,000
simulations, she estimates a total of 12 economically significant rules per month issued between
September and January.
Miller’s model, which draws on rates of rulemaking during previous administrations’ midnight
periods to predict rulemaking for the duration of the Obama administration, suggests a
substantial increase in economically significant rulemaking during the next seven months.
Overall, Miller’s analysis suggests that there is a greater than 97% probability that economically
significant rulemaking will increase between July 2016 and January 2017, and a greater than
99% probability that economically significant rulemaking will increase between November 2016
and January 2017. On average, Miller’s model suggests that agencies with increase the issuance
of economically significant rules by over 150% between September 2016 and January 2017.
These results corroborate findings of prior studies of regulatory activity during the midnight
period. However, the forecast increase in published regulations may be limited to executive
branch agencies; Pérez finds that independent regulatory agencies appear to be relatively
57
58
In the U.S., most regulatory agencies are part of the executive branch, such as the Department of Health and
Human Services, the Occupational Safety and Health Administration within the Department of Labor, and the
Environmental Protection Agency. Others are “independent” regulatory agencies; these are often multi-member
commissions, such as the Federal Communications Commission or the Securities and Exchange Commission.
Economically significant rules are those expected to have an annual effect on the economy of $100 million or
more.
The Final Countdown: Projecting Midnight Regulations
The George Washington University Regulatory Studies Center ◆ 27
Conclusion ◆ The Final Countdown: Projecting Midnight Regulations
unaffected by presidential transitions. These findings contribute to the literature on independent
agencies, and suggest that elements of their institutional design, including the fact that they are
headed by commissioners whose tenure is not tied to the president’s, may lead to different
incentives and behavior than those faced by executive agencies.
Traditional Tools for Revisiting Midnight Regulations
Given that this uptick in regulatory activity represents the policy priorities of an outgoing
presidential administration, what can a newly sworn-in president and congress do to gain control
over the regulatory agenda? As former OIRA Administrator, Susan Dudley, has noted
elsewhere,59 the next president, congress, and the courts have several options for dealing with
last minute regulations from the outgoing president that do not align with their priorities.
Presidents of both parties have used these tools to deal with their predecessors’ midnight rules.
The Next President’s Options
While the next president cannot simply overturn a final regulation without going through the full
notice-and-comment rulemaking procedure, presidents can stop regulations that are not yet
published, delay the effective date of published-but-not-yet-effective regulations, and use
enforcement discretion to modify the impact on citizens of regulations that are already in effect.
Depending on how vigorously the new administration defends litigation over controversial
regulations, it can influence court decisions which may lead to regulations being overturned or
remanded for reconsideration. If congress chooses to use its authority under the Congressional
Review Act (CRA) to disapprove a midnight regulation, the next president can support or veto
that resolution.60
According to Dudley, the next president has two primary options for stopping the flow of new
rules when he or she is in office: 1) preventing regulations from being submitted to the Federal
Register until they first are approved by the new administration, and 2) withdrawing not-yetpublished regulations from the Federal Register.61 While the latter tool has been used by many
past presidents, a pending rule governing the Federal Register may restrict the ability of a
president to pull back unpublished regulations from the Federal Register;62 ironically this rule,
59
60
61
62
Susan E. Dudley. “Regulatory Reboot: Options for Revisiting Midnight Regulations.” The George Washington
University Regulatory Studies Center. February 23, 2016.
https://regulatorystudies.columbian.gwu.edu/regulatory-reboot-options-revisiting-midnight-regulations
Susan E. Dudley. “Improving Regulatory Accountability: Lessons from the Past and Prospects for the Future.” 65
Case Western Reserve Law Review. 2015.
Susan E. Dudley. “Regulatory Reboot: Options for Revisiting Midnight Regulations.” The George Washington
University Regulatory Studies Center. February 23, 2016.
https://regulatorystudies.columbian.gwu.edu/regulatory-reboot-options-revisiting-midnight-regulations
The Administrative Committee of the Federal Register issued a proposed rule in October 2014 (RIN 3095-AB84)
that may limit an incoming administration’s ability to pull back regulations that have been sent to the Federal
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Conclusion ◆ The Final Countdown: Projecting Midnight Regulations
which restricts presidents’ ability to pull back midnight regulations, may itself be published as a
midnight rule.
Other tactics include extending the effective dates of controversial regulations to buy time for a
new administration to consider its legal options. More direct actions, such as revising or
withdrawing already-issued final regulations, are procedurally difficult and extremely time
consuming as they require the rulemaking process to begin again from scratch. Doing so would
require:
seeking public comment on alternative approaches, developing an administrative
record, and issuing a final rule based on that record. This would take at least a
year and probably longer. Then, the rule would most certainly be the subject of
litigation, with plaintiffs being able to point to the previous record to question the
merits of the revised rule.63
The next administration can also determine how vigorously it chooses to defend a predecessor’s
regulations in court, where controversial rules—such as the Clean Power Plan rule64 and the
Waters of the U.S. rule—will likely be litigated.
Congress’ Options for Midnight Regulation
Tools for addressing midnight rules are not limited to the Executive branch; Congress also has
the ability to alter implementation and enforcement of these rules. Two primary options for
reversing midnight rules are the Congressional Review Act (CRA) and the appropriations
process.65
The CRA grants Congress the ability to issue a “joint resolution of disapproval” on a final rule
within 60 session days of when it was issued. While the current Congress has sent many joint
resolutions of disapproval to President Obama, he has unsurprisingly not been willing to sign
them and reverse his own administration’s regulatory priorities. The promise of a new president
in 2017 provides Congress with a new opportunity to use the CRA to disapprove a rule—a power
63
64
65
Register but not yet published; this rule had not been finalized as of the publication of this report. Specifically, as
currently worded, §18.13 would limit agency withdrawals and modifications of documents from the Federal
Register to instances meant “to address an emergency or to prevent a violation of law.”
https://www.gpo.gov/fdsys/pkg/FR-2014-10-28/pdf/2014-25520.pdf#page=1
Susan E. Dudley. “Regulatory Reboot: Options for Revisiting Midnight Regulations.” The George Washington
University Regulatory Studies Center. February 23, 2016.
https://regulatorystudies.columbian.gwu.edu/regulatory-reboot-options-revisiting-midnight-regulations
“The fate of the Obama administration’s signature climate change rule is in the hands of the courts.” E&E
Publishing LLC. http://www.eenews.net/interactive/clean_power_plan/fact_sheets/legal
Susan E. Dudley. “Regulatory Reboot: Options for Revisiting Midnight Regulations.” The George Washington
University Regulatory Studies Center. February 23, 2016.
https://regulatorystudies.columbian.gwu.edu/regulatory-reboot-options-revisiting-midnight-regulations
The Final Countdown: Projecting Midnight Regulations
The George Washington University Regulatory Studies Center ◆ 29
Conclusion ◆ The Final Countdown: Projecting Midnight Regulations
which has only once been used successfully. Though it has not been used successfully since
2001, the CRA is a powerful tool for the legislative branch. After disapproval, agencies are
prohibited by statute from issuing a substantially similar rule.
Via the appropriations process, Congress can also direct agencies to alter enforcement of past
presidents’ regulatory priorities. However, it is worth noting that to underestimate the durability
of midnight regulations would be to ignore the empirical record. Scholars find that the vast
majority of rules persist even in the face of scrutiny by incoming administrations.66 In many
cases newly-elected presidents, in particular, find that they “cannot alter orders set by their
predecessors without paying a considerable political price…or confronting serious legal
obstacles.”67 As a result, it is particularly important for observers and participants to keep an eye
on the impending midnight regulatory activity forecasted in this report.
66
67
Jason M. Loring & Liam R. Roth. “Empirical Study: After Midnight: The Durability of the ‘Midnight’
Regulations Passed by the Two Previous Outgoing Administrations.” 40 Wake Forest Law Review (Winter 2005)
William G. Howell & Kenneth R. Mayer. “The Last One Hundred Days.” Presidential Studies Quarterly. Vol 35,
Issue 3 (September 2005).
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