- The Washington Times - Monday, January 15, 2001

Senior officials of any moribund administration tend to do two things, both predictable. They spread their resumes far and wide and they pump out regulations with abandon. While we are not particularly interested in their job hunting, we should be deeply concerned about the long-term implications of their last-minute efforts to flood us with new regulations.
Mr. Clinton's last-minute regulatory zeal is unparalleled 16,000 printed pages of final and proposed regulations and notices in the six weeks preceding Christmas. He's on the verge of eclipsing Jimmy Carter's 20-year-old record and entering the Guinness Book of World Regulations.
In the past few weeks, his administration has issued a 1,550-page patient-privacy regulation that could adversely affect quality of health care, as well as a half-dozen significant environmental regulations, some of which will increase consumer prices and jeopardize jobs.
The ability of a newly issued regulation to withstand rescission by the new administration is a function of timing and process some legacy rules can be delayed, others can be modified but few can be overtly and instantly rescinded. The Administrative Procedure Act (APA) prescribes how rules are to be issued or rescinded. In most cases, an agency cannot issue or rescind a rule unless it first publishes its proposal in the Federal Register for public comment.
A significant portion of any final rule (or rescission) is devoted to discussing why the rule is reasonable in light of the public comments that the agency received in response to the proposed rule. This is so because the agency must show that its action, whether it is issuing a new rule or rescinding an old one, is rational, i.e., in legal parlance, not arbitrary or capricious.
For example, the 1,550-page privacy rule which was put on public display last week devotes nearly 1,400 pages to a discussion of public comments and an explanation of the new rule; the last 150 pages contains the actual rule.
New administrations always have to learn that the APA (and its notice and comment requirements) imposes significant constraints on the ability to act quickly and decisively to rescind a previous administration's last-minute rule-making. Twenty years ago, soon after President Reagan assumed office, the issue arose whether a rule could be rescinded with minimal fanfare. The then-new secretary of transportation sought to rescind the Carter administration's automobile passive restraint (e.g., airbags) rule. Before doing so, he delayed its effective date, solicited comments on the proposed rescission, and after reviewing the comments, ordered the rule rescinded. However, many believed that he failed to provide a coherent reason to support the rescission.
What options are available to a new administration? In real estate, location is everything; in administrative law, timing is everything. There are five potentially significant times in the birth of a new regulation the date that the regulation is signed by the head of the agency, the date it is received by the Office of the Federal Register, the date it is put on public display at the Federal Register, the date it is actually published in the Federal Register and the date that it goes into operation (usually 30 days after publication). The location of the rule on the regulatory assembly line has important ramifications.
For example, on Jan. 19, 1993, the Bush administration, on its last full day, sent over to the Federal Register a signed final rule affecting natural resources. The Clinton administration withdrew the rule two days later, before it had been either put on display or published. Industry groups challenged the Clinton administration's action, arguing that once a rule is signed and sent over to the Office of Federal Register, it cannot be rescinded without going through notice-and-comment rule-making. The Court of Appeals in Washington disagreed, holding that an agency can withdraw documents during the relatively brief processing time before the document is made available for public inspection.
In short, once a rule goes on public display even if it is not formally published in the Federal Register it cannot be withdrawn without going through notice-and-comment rule-making.
Can a new administration endlessly extend the effective date of a new rule? Most rules go into effect 30 or 60 days after they are published in the Federal Register. As a result, virtually all of the Clinton administration's regulatory deluge will not go into effect until after George W. Bush is sworn-in. However, the courts have consistently held that a new administration cannot indefinitely postpone the effective dates of rules. Such a tactic has the same practical effect as rescinding a rule.
What, then, can the new administration do to stem the regulatory tide? Soon after taking office, President Reagan issued a memorandum to his Cabinet directing it to postpone for 60 days the effective date of all final rules that had not gone into effect.
Review of all last-minute rules is especially important from a good government perspective. Rules issued near transition are normally hastily written, tend to be rife with errors, and some cases, may be constitutionally infirm. For example, various portions of the recently issued patient privacy rule are likely unconstitutional. In such a setting, a president has an obligation to refuse to enforce unconstitutional rules and laws.
We hope that President-elect George W. Bush follows the path of President Reagan by imposing a moratorium on all midnight regulations. Complex issues especially when they take three reams of paper to explain and justify warrant careful and considered attention. A rush to regulate benefits no one except the lawyers.

Robert P. Charrow is a partner at Crowell & Moring LLP. Donald J. Kochan is an associate at Crowell & Moring LLP.


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