Reining in the Administrative State: The Administrative Procedure Act

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JACOB BROWN: The Administrative Procedure Act (APA) plays a substantial role in constraining what a presidential administration can accomplish. One small example of this is how the APA prominently features in many of the legal arguments in the flurry of lawsuits attempting to stop the Biden Administration’s student debt relief plan. Whenever an administrative agency (such as the Department of Education or the Department of Agriculture) wants to change its implementation or interpretation of the law, they need to follow the APA’s requirements. These requirements include that the action the agency is taking is not “arbitrary or capricious” and that they go through one of a couple routes to ensure public input into the decision-making process. Due to its breadth, the APA has wide-reaching implications for what the federal government does.

When a bill is signed into law by the President, what the law will do in practice is often unclear, as the executive branch needs to interpret the law. Further, many laws enable administrative agencies to take actions under their authority. For example, the Clean Air Act empowers the Environmental Protection Agency (EPA) to designate “hazardous air pollutant[s]” and regulate these pollutants. Consequently, the APA’s goal is to constrain the government from overreaching and from making unwise or corrupt decisions when implementing and acting under laws. It does so by imposing various procedural and substantive requirements on administrative agencies that wish to substantially change regulations or interpretations of any given law. Due to this breadth, the APA is frequently raised in legal challenges to a wide array of actions by presidential administrations.

Three Key Requirements Imposed by the Administrative Procedure Act on Agency Actions

To understand the APA, it helps to work through what the law requires with an example. The Biden Administration’s student debt relief is being carried out under the authority of the 2003 HEROES Act, which gives the Department of Education broad authority to change policies if “a national emergency” puts student borrowers in a worse financial position. The debt relief plan is subject to the APA’s requirements because it is an action taken by an executive agency (the Department of Education) that implements a policy under the umbrella of a pre-existing or newly-passed law.

Thus, one of the essential requirements at issue in litigation over student debt relief is whether or not the policy meets the requirement of the APA that changes in agency policy stay within the bounds of what was authorized in the HEROES Act. The questions include if COVID still counts as a “national emergency” and if the pandemic puts student borrowers in a worse financial position. Fulfilling this requirement means that the Department of Education not only has to point to which law grants them the authority to relieve thousands of dollars of student loan debt, but also must defend their interpretation of the law as allowing them to do so.

Another key requirement of the APA is that when creating rules, agencies must follow one of a couple of various procedures with the choice frequently dictated by the language in the law giving the agency the authority to take the action. The most famous and common procedural route is the informal or notice-and-comment route. In this route, the agency must give notice to the public of the intended rule change and give them adequate ability to respond with a comment. The agency then must respond to these public comments and justify the proposed rule change. Failing to provide sufficient notice, hindering the ability of the public to comment, or not responding substantially to public criticism can all cause the rule change to be found in violation of the APA (and therefore illegal). Sometimes, Congress will require that an agency follow the formal route to create a rule under the authority of a specific provision of law. In formal rulemaking, the agency and an opposing party convene before an administrative law judge to argue whether the law aligns with APA requirements while following trial-like procedures. The burden of proof lies with the agency to prove that there is substantial evidence to back up the legality of their decisions. 

An agency can also follow several other routes to fulfill the APA’s requirements. In negotiated rulemaking, the agency brings in stakeholders from the beginning to incorporate their feedback before the notice-and-comment process. In direct final rulemaking, the agency bypasses the notice-and-comment process and publishes the action it is taking. However, if they then receive comments opposed to the action, they must go back and follow the notice-and-comment process. Finally, whenever Congress creates a new and different set of procedures to follow for agency actions under the authority of specific parts of legislation, the resulting procedure is known as hybrid rulemaking. This diversity of avenues allows the agency and Congress to adapt the process to what they feel is most appropriate for the circumstances. The procedural routes that can be followed to fulfill the APA can also be bypassed entirely when Congress says that an agency does not need to follow them. This is the case for the student debt relief policy.

The third key requirement imposed by the APA on administrative agency actions is that they must not be arbitrary or capricious. An agency must provide a satisfactory explanation for why its action is warranted from the facts they used to make the decision. Often, the record of facts and reasoning created by following the aforementioned routes is used to establish that an action is not arbitrary or capricious. Turning back to student loan relief, because the Education Department did not go through the notice-and-comment procedures, there is less of a record to show that the plan is not arbitrary and capricious. That is not to say that the plan is necessarily likely to be found to be illegal. Courts are supposed to defer to agency actions. However, the requirement that an action not be arbitrary and capricious still invalidates a substantial amount of actions taken by administrative agencies.

Practical Effects of the Administrative Procedure Act

In practice, the APA’s requirements have four notable effects. First, they make the process of changing how we interpret, implement and enforce laws much slower. On one hand, this is beneficial for the stability of the law and gives interested parties the opportunity to see what changes are coming up and prepare to follow them. On the other hand, it makes it harder to respond to new information and shift priorities if a new administration has just begun. Consequently, the APA requirements trade responsiveness for reliability and stability. The transparency and slowness mandated by the APA are among the reasons that actions related to the military or foreign affairs do not need to follow any of the procedural routes of the APA even if the other key requirements of legality and non-arbitrariness apply to them.

Second, in practice, the requirements can skew how a law is interpreted, implemented and enforced to favor organized interests—often industry and other groups who can create the sort of “significant” comments that agencies need to respond to. On the flip side, though, the procedural requirements may also hinder efforts to influence administrative agencies harder if what the agency wants is hard to justify under the requirements of the APA. 

Third, the APA requirements make administrative agencies more cautious by requiring that they justify their actions both publicly and before the courts. Agencies also know that if they fail to document their full compliance with the requirements of the APA and prove that their actions are warranted by the facts, they could have spent a lot of time and energy for little benefit. This cautiousness is further bolstered by how the APA procedures encourage transparency.

Fourth, the APA’s requirements limit the administrative power of federal agencies. Since everything an agency does under APA must be documented, agencies must put a significant amount of their limited time and resources towards remaining APA compliant.

My Thoughts

Personally, I think that the idea behind the Administrative Procedure Act is excellent. Administrative agencies possess significant power, and few checks exist on how they use it. While controversial actions may garner media attention, most people are not aware of the everyday activities of administrative agencies. As a result, many of their decisions fly under the radar. However, many of these actions can have real and harmful impacts, so having something like the APA to constrain agencies’ power and monitor their actions is necessary. Furthermore, APA requirements give those who might be affected by rule changes a way to challenge them. The importance of the APA as a check on power is why most states have state-level versions of it (although some details may differ).

That being said, it is worth questioning if the APA strikes the right balance between accountability and allowing for agility and flexibility in federal agencies’ response to current issues. The Good Cause Exception to the rulemaking requirements allows some flexibility, especially in an emergency, but the exception is limited. I think there should be carve-outs to some of the APA requirements for smaller changes to rules so that agencies can make those changes without needing to expend all the resources they currently have to. Of course, how to define a “smaller” change to the rules is difficult. Changes to rules can have wide-ranging and unintended consequences that the notice-and-comment procedures are intended to bring to light. Consequently, perhaps the best way to create some sort of exemption for small rules is not to exempt them from any of the requirements, but to make the standard of review lower so less effort needs to be put into documenting compliance.

Ultimately though, the APA is so influential that the best thing that could happen is just that we pay more attention to it. There is not substantial public debate about checks imposed on administrative agencies. We talk a lot about how much authority to give to administrative agencies but comparatively little about the procedures like those in the APA which constrain how agencies use that power. Nevertheless, the procedures governing how agencies use that power shapes what the government can do and how it does it and, therefore, the lives of millions of Americans. Something so important to us all deserves our attention.

Jacob Brown is a freshman studying economics and government. Jacob is from Redmond, Washington, and spends his free time figuring out how fast he can listen to podcasts. He is a member of Georgetown Effective Altruism, the Georgetown Bipartisan Coalition and the Georgetown Moot Court Team.