In Defense of the Short Cut

Congress frequently gives administrative agencies a choice of several different tools, including legislative rulemaking, non-legislative rulemaking, and adjudication, to interpret and apply statutes. In theory, an agency should be able to announce an interpretation of a statute through a policy statement, interpretive rule or other form of non-legislative rule (often referred to more generally as “guidance documents”) without incurring the costs or delay of notice and comment rulemaking. As long as the agency does not treat that policy decision as binding, and justifies the decision when it is applied to a concrete factual situation, there should be nothing legally objectionable about the agency’s action. Nevertheless, courts have fashioned a variety of unworkable tests to distinguish between legislative and non-legislative rules, and have frequently struck down rules that agencies characterize as non-legislative rules on the grounds that the rules are, instead, legislative rules, and are invalid because they were not adopted through notice and comment procedures. Many academics have criticized this approach and have suggested that courts, in reviewing an agency’s policy decisions, should simply look at the procedures that the agency uses to make those decisions. If the agency does not use notice and comment rulemaking, the reformers argue, a court should conclude that the agency’s policy decision is a non-legislative rule, and the court should simply accord the policy the effect and deference due to a non-legislative rule, instead of trying to determine whether the policy is a legislative rule or non-legislative rule. This proposal, sometimes referred to as “the short cut,” has generated much scholarly debate, including recent articles by Professors David Franklin and Mark Seidenfeld. Critics argue that the proposal reduces public input in agencies’ policymaking and reduces judicial oversight, because agencies’ non-legislative rules may not be reviewable in court. Supporters of the proposal counter that it does not eliminate public or judicial oversight of non-legislative rules, but merely delays review until the agencies’ policy decisions are applied in a concrete factual setting. This article critiques the proposals of Professors Franklin and Seidenfeld and advances an alternative reform proposal. In order to address the concerns raised by reformers regarding lack of public and judicial oversight of agencies’ policymaking under “the short cut”, without imposing substantial costs on the non-legislative rulemaking process that could discourage its appropriate use, the article proposes (1) an expansion of judicial review for non-legislative rules, but only in cases where an agency’s non-legislative rule is unlikely to ever be applied to a concrete factual situation because it announces a decision to de-regulate or to not enforce the law or regulations in specific instances; and (2) legislation to require posting of significant guidance documents on the Internet, an opportunity for public comment on those documents and posting of the comments on the Internet, without an obligation on the agency to prepare a “concise general statement of the basis and purpose” of the guidance or to respond to the comments.