New on SSRN: Justifying Delay: Why Agencies Delay Compliance Dates and How They Do It

I have posted my latest article, Justify Delay: Why Agencies Delay Compliance Dates and How They Do It, to SSRN.  This article was presented at the Journal of Regulatory Compliance’s 2018 symposium.

Every administration since President Reagan has used compliance delays to postpone the implementation of midnight rules promulgated by the outgoing administration. Recent cases involving the Trump Administration’s delay of Obama Administration rules have reinvigorated courts’ interests in whether such delays require notice and an opportunity for comment under the Administrative Procedure Act (“APA”). Some scholars have written about why incoming administrations use compliance delays to prevent implementation of the previous administration’s “midnight rules.” These delays are often cast as a precursor to repeal, engendering fears that the now-postponed final rule will be reversed. Yet a more overarching discussion of compliance delays is largely absent from the literature.

This Article seeks to fill the literary void with two arguments. First, I argue that compliance delays serve a healthy role in the regulatory process. Part I provides a case study of the Food and Drug Administration’s (“FDA”) Menu-Labeling Rule. Using this case study and other examples, Part II builds a typology of five justifications used by agencies when implementing compliance delays. Part III recognizes that an agency’s justification may not equate to its reason for delay and, therefore, briefly examines how external pressures may distort these justifications. In a brief interlude, I conclude that compliance delays are a valuable procedural tool that leads to additional transparency and responsive governance.

Second, I consider what procedures agencies should be required to use to delay compliance dates. Part IV presents two options—“delay rules” and “enforcement delays”—and the drawbacks of each. Delay rules officially amend compliance dates. However, recent case law suggests that delay rules must be implemented through notice-and-comment rulemaking. In contrast, an agency using an enforcement delay will allow the compliance date to elapse but choose not to enforce the rule for a certain period of time. Courts are critical of enforcement delays, which may lead agencies to implement the policy secretly, only allowing its existence to be leaked in ex parte communications. Part IV concludes by suggesting that agencies will choose enforcement delays over delay rules to avoid the resource costs of notice-and-comment rulemaking.
The conclusion synthesizes these two arguments and suggests that the choice between delay rules and enforcement delays is one of procedure or transparency. If agencies select enforcement delays, the benefits of increased transparency and responsive governance disappear. I argue in favor of transparency, concluding that delay rules should be exempt—in one form or another—from APA rulemaking requirements.

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