Trump’s Deregulatory Moon Shot Stretches Rulemaking Authority

A Trump administration plan to fast-track a wholesale elimination of regulations relies on the courts accepting its novel, expansive view of when agencies can skip laborious procedures normally necessary to rescind—as well as create—rules.

President Donald Trump directed agencies to review their existing regulations against 10 US Supreme Court decisions from the last decade that “recognize appropriate constitutional boundaries on the power of unelected bureaucrats and that restore checks on unlawful agency actions.” Agencies should then summarily eliminate regulations that are unlawful based on those rulings, Trump said in his memo.

The White House’s argument—that agencies finding rules unlawful provides the good cause needed under the Administrative Procedure Act to skip notice-and-comment rulemaking requirements—would go beyond what courts have allowed, administrative law professors and former agency lawyers said.

“You’re talking about gutting the Administrative Procedure Act,” said Kristin Hickman, a University of Minnesota administrative law scholar. “Irrespective of what the president intends, I don’t see courts going along with that approach to the good cause exception.”

The administration’s quick-strike plan published April 9 fleshes out some of the principles Trump laid out in a February executive order. He called on agencies to identify defective or overly burdensome rules, then to deprioritize their enforcement and prepare to modify or rescind them.

The directive is among Trump’s aggressive deregulatory initiatives. The president has ordered several agencies to incorporate conditional sunset provisions to make environmental and energy-related rules expire in as early as a year. He’s also instructed agencies to target 10 regulations or guidance documents to be repealed for every new rule they issue.

The administration has signaled elsewhere that it views the good cause exception as a tool for speedy deregulation. The Department of Health and Human Services issued a policy statement reversing a 54-year-old practice of using the exception sparingly.

Dumping a regulation without complying with the APA’s mandate to first issue a proposal and then collect, analyze, and respond to public comments on it—a process that can sometimes take years—would require dramatically less time and fewer resources, legal observers said.

“Just saying ‘this Supreme Court decision means that this regulation is no longer valid’ is extraordinarily easier than going through the full process,” said Kevin Minoli, an Alston & Bird LLP lawyer and former acting general counsel at the Environmental Protection Agency. “It would make a world of difference.”

Litigating Good Cause

Litigation could stop summary deregulation, though that would require individual lawsuits to save each rule, placing additional demands on public interest groups, unions, and other organizations that have sued to challenge a slew of Trump maneuvers.

While the administration and its allies are trying to limit nationwide injunctions, the APA specifically empowers courts to postpone agency action pending their review.

The administration faces two intertwined obstacles to winning judicial approval: showing both that the rule at issue is unlawful, and that rescinding an unlawful regulation qualifies for the good cause exception.

The APA permits agencies to forgo notice-and-comment rulemaking if it would be “impracticable, unnecessary, or contrary to the public interest.”

Trump argues that keeping unlawful regulations is against the public interest, but that explanation conflicts with how courts have viewed that part of the good cause exception, said Jennifer Selin, an Arizona State University administrative law professor. Courts have focused on whether going through the rulemaking process would hurt the public interest, such as during an emergency when a delay would be harmful, she said.

The memo also claimed that full rulemaking is unnecessary when repeal is needed to comply with Supreme Court precedent.

Agencies wouldn’t need to go through the notice-and-comment process to eliminate a rule identical to what the justices previously struck down, but courts distinguish case holdings in slightly different circumstances, said Anne Joseph O’Connell, a Stanford University administrative law scholar.

“In those contexts, the agency should have to propose a repeal, explain why it thinks a Supreme Court decision compels the same outcome, and take comments,” O’Connell said.

High Court Ammunition

The 10 Supreme Court decisions that Trump instructed agencies to consider create presumptions, or clarify and adjust the relationship between court review and agency actions, said William Buzbee, an administrative law professor at Georgetown University.

“None say presidents can wipe regulations off the books without any full notice-and-comment process and reasoned explanation,” Buzbee said. “None make clear that particular regulations are or were illegal.”

The list of rulings appears to be ordered by importance to the administration’s deregulatory mission, said Aram Gavoor, a George Washington University administrative law scholar.

At the top is Loper Bright Enterprises v. Raimondo, which ended judicial deference to agency interpretation of unclear laws; West Virgina v. EPA, which solidified the court’s major questions doctrine requiring explicit congressional authorization to regulate highly important topics; and Jarkesy v. SEC, which strengthened the right to a jury trial for violating regulations.

Gavoor pointed out broad principles from other listed decisions that could be used to undermine regulations, including the need to factor in costs, to show clear evidence of Congress’ intent, and to prove the subject of regulation shouldn’t be left to the states.

The listed precedents also could be marshaled against rules that involve appropriating property, promoting equity, or regulating religious organizations differently in areas like health care and the workplace, Gavoor said.

The number and significance of the regulations the administration tries to nix without full rulemaking is unclear, as it depends on the determinations of many agency heads, legal observers said.

Agencies have more traditional ways of giving companies immediate relief from regulations that leave less to chance than the Trump administration’s novel approach, said Stacey Halliday, a former EPA attorney who now practices at Arnold & Porter Kaye Scholer LLP. For example, the EPA has scrapped longstanding environmental permitting requirements with an interim rule as it takes public comment.

“The cost-benefit analysis of taking the route that the administration outlines doesn’t completely make sense,” Halliday said.