Justice Department Tackles Rule By Guidance Letter

The U.S. Department of Justice, November 17 [press release/memo]:

Today, in an action to further uphold the rule of law in the executive branch, Attorney General Jeff Sessions issued a memo prohibiting the Department of Justice from issuing guidance documents that have the effect of adopting new regulatory requirements or amending the law. The memo prevents the Department of Justice from evading required rulemaking processes by using guidance memos to create de facto regulations.

In the past, the Department of Justice and other agencies have blurred the distinction between regulations and guidance documents. Under the Attorney General’s memo, the Department may no longer issue guidance documents that purport to create rights or obligations binding on persons or entities outside the Executive Branch….

“Guidance documents can be used to explain existing law,” Associate Attorney General Brand said. “But they should not be used to change the law or to impose new standards to determine compliance with the law. The notice-and-comment process that is ordinarily required for rulemaking can be cumbersome and slow, but it has the benefit of availing agencies of more complete information about a proposed rule’s effects than the agency could ascertain on its own. This Department of Justice will not use guidance documents to circumvent the rulemaking process, and we will proactively work to rescind existing guidance documents that go too far.”

This is an initiative of potentially great significance. For many decades, critics have noted that agencies were using Dear Colleague and guidance letters, memos and so forth — also known variously as subregulatory guidance, stealth regulation and regulatory dark matter — to grab new powers and ban new things in the guise of interpreting existing law, all while bypassing notice-and-comment and other constraints on actual rulemaking. To be sure, many judgment calls and hard questions of classification do arise as to when an announced position occupies new territory as opposed to simply stating in good faith what current law is believed to be. But the full text of the memo shows a creditable awareness of these issues. Note also, even before the Justice memo, Education Secretary Betsy DeVos’s statement in September, on revoking the Obama Title IX Dear Colleague letter: “The era of ‘rule by letter’ is over.”

Another notable pledge in the DoJ press release:

The Attorney General’s Regulatory Reform Task Force, led by Associate Attorney General Brand, will conduct a review of existing Department documents and will recommend candidates for repeal or modification in the light of this memo’s principles.

Note also this recent flap over certain financial regulations and the possibility that they may have been issued without notice to Congress, which could preserve Congress’s right to examine and block them under the terms of the Congressional Review Act. [cross-posted from Overlawyered; earlier in this space on the era of “rule by letter” at the Education Department]