Where to Find Authoritative Guidance on Regulatory Meaning, by Kevin M. Stack

by Guest Blogger — Wednesday, Jan. 31, 2018

When regulated entities or the public want to know what a regulation means, where do they look? They will, of course, focus on the text of the regulation. But what other sources bear on how regulations apply? In particular, what is the most authoritative source agencies issue to assist in determining the meaning and application of notice-and-comment rules? The answer is the preamble to the agency’s final rule.

In notice-and-comment rulemaking, the agency must issue a “concise and general statement of . . . basis and purpose” for each rule; that statement, along with other material, comprises what is known as the preamble to final rule or the regulatory preamble. Regulatory preambles have long been a focus in administrative law because, under established doctrines, they are typically the exclusive sources courts consider in evaluating a rule’s validity. At least when viewed through the lens of administrative law, it is easy to think of preambles as relevant only to whether a rule survives judicial review—that is, to think only of their justificatory role. But regulatory preambles also serve a guidance function, or so I argue in Preambles as Guidance and a report to the Administrative Conference of the United States (ACUS) supporting ACUS Recommendation 2014-3.

The early interpreters of the Administrative Procedure Act (APA) anticipated that regulatory preambles would be “important in that the courts and the public may be expected to use such statements in the interpretation of the agency’s rules.” (U.S. Dep’t of Justice, Atty. General’s Manual on the Administrative Procedure Act 32 (1947). In practice, agencies issue a tremendous amounts and varieties of guidance in their regulatory preambles. Preambles clarify the purposes and justifications of their rules; they take interpretive positions, often in response to comments submitted; and they provide application examples (which   usefully unpack). Regulatory drafters anticipate that courts, and presumably others, will rely on preambles, as Christopher Walker’s study of agency drafting reveals. Regulatory preambles, in short, are critical means through which agencies communicate their views about the meaning and application of their regulations.

For a host of reasons, the guidance in preambles (“preamble guidance”) is superior in authority to guidance agencies issue in free-standing guidance documents. First, unlike free-standing guidance documents, the regulatory preambles are necessary to the validity of the regulations they accompany. Second, unlike many guidance documents, regulatory preambles are issued on behalf of the agency, not by lower-level officials or subordinate offices. Third, agencies know that the prospect for their regulations surviving judicial review depends the quality of their preambles. This gives agencies extremely strong incentives to deliberate with care about the contents of their preambles and to establish structures for their review up-and-down the agency’s hierarchy. Fourth, for executive agencies, as Jenifer Nou points out, preambles are part of the rulemaking packages reviewed by OIRA and other members of the executive branch, and occasionally by other agencies as well. Finally, they are published in the Federal Register, the most highly visible, accessible, and searchable compilation of federal regulatory actions. While a small portion of free-standing guidance documents do receive substantial vetting and publication in the Federal Register, that level of review is the norm and is institutionalized only for regulatory preambles, which alone provide the authoritative justification for agency rules. Under current judicial doctrines, preamble guidance also qualify for greater judicial deference.

The superior authority of preamble guidance has implications for how agencies communicate. First, to make the guidance content of their preambles more accessible, agencies should integrate it into their compilations of guidance documents, as called for by ACUS Recommendation 2014-3. Today, many agencies still do not even mention their preambles in their compilations of guidance. Second, agencies should develop reliable electronic means of directing readers to the guidance content of their preambles, another point of the ACUS’s Recommendation 2014-3. They could do so, for instance, by including cross-links between relevant portions of preambles and free-standing guidance documents. It seems odd that such important sources of federal law have less useful hyperlinks than the typical news article or blog post.

Finally, the superiority of preamble guidance also imposes obligations on agency’s internal ordering. In particular, agencies should adopt internal regulations and systems—part of their internal law—to prohibit lower-level officials for issuing guidance that contradicts preamble guidance. Such internal policy could be part of agency’s procedures for approval of guidance, which OMB’s 2007 Final Bulletin for Agency Good Guidance Practices requires agencies to issue. Moreover, when the agency wants to depart from preamble guidance, it should do so only with a level of formality and vetting comparable to that of the original preamble. Agencies could profitably decree that they will only depart from preamble guidance when: (1) the author is the same (or a higher authority) as the entity issuing the original preamble, (2) the revision is published in the Federal Register, and (3) is expressly justified. Those conditions provide a good proxy for the revision receiving a similar level of deliberation as the original preamble. Just as important, they also support the expectations of the public and the regulated that had come to rely preamble guidance as a privileged form of agency communication about the meaning of agency rules.

Kevin M. Stack is Lee S. & Charles A. Speir Professor of Law at Vanderbilt Law School.This post draws on his articles Preamble as Guidance, 84 Geo. Wash. L. Rev. 1252 (2016), and Interpreting Regulations, 111 Mich. L. Rev. 355 (2012), and report to ACUS regarding ACUS Recommendation 2014-3. 

This post is part of a symposium entitled How Agencies Communicate. You can read all the posts here.

Cite As: Author Name, Title, 36 Yale J. on Reg.: Notice & Comment (date), URL.

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2 thoughts on “Where to Find Authoritative Guidance on Regulatory Meaning, by Kevin M. Stack

  1. Susan C Morse

    I am intrigued by the idea of ordering preambles as “superior in authority to guidance agencies issue in free-standing guidance documents.” I wonder, for what purpose? Interpreting the relevant regulations, yes, I see that. For other purposes as well, though? I am trying to think of a good hypothetical. Perhaps the meaning of a term used in a regulation and further explained in the Preamble, but then also used and perhaps explained in a different way in a somewhat related piece of guidance?

    Also — the idea of electronic links to preambles is terrific and even if only that is accomplished through the ACUS recommendations referenced, wonderful result. To the extent that e.g. a piece of informal guidance is treated as more important, I bet as a practical matter that might be chalked up to being able to click on it directly through one of the treatise-like online law compilations.

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  2. Leigh Osofsky

    I think this post makes a persuasive case for the importance of preambles as a form of guidance. What is interesting, and this may just be idiosyncratic personal experience, is that I am not sure that they are treated this way by regulated parties trying to make sense of a regulatory regime. In other words, I tend to think, at least in the tax context, that preambles are not necessarily the first place a researcher looks for more guidance. Perhaps it is because of many of the reasons highlighted in this post regarding the difficulty in assessing preambles, relative to some other forms of regulatory guidance. But I wonder what this behavior by researchers might tell us about the lived experience of administrative law. Do the various administrative law rules regarding hierarchy of rules really govern how they are used by regulated parties, or is there a more on-the-ground set of factors that tends to govern and, if so, how might / should this information feed back into the administrative law rules themselves?

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