Federal agencies can face legal risk if they only provide constructive notice of regulatory changes through publication and FOIA “availability.”
Many federal agencies are running substantial legal risks by providing inadequate notice of significant regulatory changes. That is one of the conclusions we reached after a year-long study for the Administrative Conference of the United States (ACUS).
The goal of the study was to review how agencies provide notice of significant regulatory changes so that ACUS could decide whether to recommend improvements. We interviewed a broad range of interested parties: agency staff, regulated parties, regulatory beneficiaries, business groups, public interest NGOs, unions, micro-businesses, and others. Following deliberations informed by our study, ACUS adopted a recommendation earlier this year that provides guidance to agencies about how to provide more effective notice strategies.
We found that most agencies do a good job of complying with the Administrative Procedure Act’s requirement to publish proposed legislative rules in the Federal Register. According to our interviews, however, constructive notice by publication in the Federal Register—a government publication that runs 70,000 to 95,000 pages each year—is not sufficient to provide actual notice to many potentially interested parties. This is not just a matter of good governance. When agencies do not provide effective notice, but could easily do so using modern means such as email listservs to parties that they know have an interest, they face substantial legal risk.
The U.S. Supreme Court has held that constructive notice by publication is not always sufficient to comply with constitutional Due Process requirements. In Mullane v. Central Hanover Bank, a state law permitted a party bringing a lawsuit to provide constructive notice by publication. Although the bank had previously communicated with interested parties by mail, when filing an action in court it only provided constructive notice by publication. The Supreme Court held that when someone had previously communicated with an affected person by another more effective means and could easily do so again, constructive notice by publication does not satisfy the Due Process requirement to provide notice “reasonably calculated” to provide actual notice “under all the circumstances.”
One court of appeals has held that these principles apply when the executive branch announces regulatory policies that could reasonably be expected to affect the behavior of interested persons.
In addition, the late Justice Lewis Powell observed that it is “totally unrealistic” to assume that “more than a fraction” of people and organizations affected by a regulation—especially small contractors scattered across the country—would know that it was published in the Federal Register—or even know what the Federal Register is. He consequently expressed doubt that it would be constitutional to prevent judicial review of a regulation 30 days after publication.
Under this line of cases, other low-cost, modern, and more effective means of communication—such as email listservs or posting on websites, webinars, and news releases—may be necessary to supplement a rule’s publication in the Federal Register.
Still, although Federal Register publication is not always sufficient, in many cases it proves effective. For this reason, the U.S. Congress and the President have repeatedly directed agencies to make guidance documents available, including in the Federal Register. For instance, the Freedom of Information Act (FOIA) requires agencies to publish “statements of general policy or interpretations of general applicability.”
In addition, the Office of Management and Budget issued a Bulletin for Good Guidance Practices, asking agencies to publish significant guidance documents on agency websites. President Donald J. Trump issued two executive orders to make guidance more available. ACUS has also made recommendations to the same effect.
Although some agencies have complied with these transparency directives, most agencies have not honored these requirements in practice. Many agencies have taken the position that guidance documents are “available” if someone who knows about them can request them under FOIA. Unfortunately, as we note in our study, the courts have tolerated this broad non-compliance by holding only that if the agency did not make the guidance document available, the agency cannot rely on the document in court. That poses no real penalty to agencies because, at least in legal theory, guidance documents do not impose binding legal requirements.
Making guidance available on agency websites would be a simple way to inform the public and stimulate voluntary compliance, but agencies seem reluctant to do so. Some agencies did post guidance when the Trump Administration required them to do so by executive order but removed them again when the Biden Administration revoked the order.
Why are agencies allergic to making their guidance documents public?
One of our interview subjects solved the riddle by observing that former agency employees are more valuable in the private sector if they are aware of agency practices and policies that are not available to the public. This insight reflects a principle of organizational economics: Officials in any organization may be tempted to maximize their own personal welfare rather than the goals of the organization.
The legal risk we describe is one important finding from our research, although it is only part of what we learned. We also learned that larger groups with more resources are more satisfied with agency notice practices than are less-resourced groups. But we also found that even well-resourced organizations struggle with regulatory changes that emerge from guidance documents, adjudicatory decisions, and other material that agencies may not publish in the Federal Register.
Based on our research, ACUS adopted Recommendation 2022-2. The recommendation notes that target audiences for different types of agency notices differ, so there is no one-size-fits-all approach. Agencies should, however, proactively develop notice plans that identify potentially interested parties, evaluate techniques for providing effective notice, and include procedures and metrics for regularly evaluating the effectiveness of their procedures for providing notice. Agencies should then update their notice strategies based on this evaluation.
Some specific tools agencies should consider for providing better notice include:
- creating digests and user manuals that synthesize dispersed agency policies;
- publishing more material on agency websites;
- improving instructions on how to access information on agency websites;
- engaging with intermediary organizations; and
- increasing face-to-face engagement using webinars and video meeting technology.
Getting the word out about significant regulatory changes is not just a matter of reducing legal risks. Agencies benefit from providing actual—as opposed to merely constructive—notice, including increasing voluntary compliance and facilitating public participation and acceptance. By more effectively using the techniques of modern technology described above, agencies can ensure that many more interested parties receive actual notice of significant regulatory changes.
This essay is part of a three-part series on the Administrative Conference of the United States, entitled Using Technology and Contractors in the Administrative State.