FCC Unlikely to Use Order Allowing Agencies to Skip Notice and Comment

The notice-and-comment order, entitled Directing the Repeal of Unlawful Regulations, instructs agency heads to repeal regulations that are “facially unlawful” under a number of recent U.S. Supreme Court decisions. The SCOTUS decisions listed include the major questions doctrine case West Virginia v. EPA; Loper Bright v. Raimondo, which ended Chevron deference; the agency forfeiture case SEC v. Jarkesy; and Students for Fair Admission v. Harvard, which ended affirmative action.

The order said agency heads “shall finalize rules without notice and comment, where doing so is consistent with the ‘good cause’ exception in the Administrative Procedure Act. That exception allows skipping notice and comment when the normal process is “unnecessary” or wouldn't be in the public interest, the order said. “Retaining and enforcing facially unlawful regulations is clearly contrary to the public interest,” and notice-and-comment proceedings “are ‘unnecessary’ where repeal is required as a matter of law to ensure consistency” with law.

Industry-side groups are unlikely to view the process outlined in the order as the optimal way to oust regulations they don’t like, FCC attorneys and lobbyists told us. Repealing a rule without notice and comment immediately puts the repeal on shaky legal footing, while FCC Chairman Brendan Carr already appears on track to strip away regulations using more time-tested processes. For example, comments are due in his FCC-wide “In Re: Delete, Delete, Delete” deregulatory proceeding Friday. With Carr expected to have an FCC majority soon, he has little reason to opt for the order's riskier process over the normal FCC rulemaking route, industry attorneys said.

Free State Foundation President Randolph May agreed that recent SCOTUS rulings create “more space for invocation of the ‘good cause' exemption. But for significant rules whose repeal will be controversial, the question whether they are facially unlawful is likely to be contested in court,” he said. “So invoking the 'good cause' exemption may not end up shortcutting the ultimate repeal process.” May said that for repealing rules that are less controversial, the FCC could use the more established procedure of “direct-final rulemaking,” where the agency publishes rules to be repealed in the Federal Register with a statement that unless adverse comments are received in 30 days, the repeal becomes effective. The FCC “could do this in batches.”

The order's description of the good cause exception to notice-and-comment requirements isn't how that exception has historically been used and is likely to draw adverse court rulings, said administrative law professors and attorneys. “This idea that an agency can just repeal without notice and comment is certain to be tested in the courts,” said American University administrative law professor Jeffrey Lubbers.

The good cause exception is typically used for emergency situations where there isn’t time for a normal process, attorneys told us. When it's invoked, the government usually justifies why it needs to skip the comment process, not provide further justifications for why the rules are illegal, Lubbers said. “One of the reasons you have notice and comment is so that people can comment on the legality of the regulation and the workability of the regulation and possible alternatives to the regulation.” By skipping that, University of Idaho administrative law professor Linda Jellum said, the order gives agency leaders “the power to decide what is legal and what is not” based on their whim.

Though the order calls out rules that may not be in line with a list of specific SCOTUS decisions, it won’t be hard for agencies to use those cases to argue against any rule they wish, Jellum continued. Using the major questions doctrine, “an FCC chairman could say, ‘Hey, this particular rule actually implicates something that's major, so we'll just repeal it.'” The FCC could similarly argue that any rule isn't the best interpretation of a statute and repeal it as conflicting with Loper Bright, she said.

Lubbers said he expects resulting agency repeals of regulations to face a difficult road in the courts. “I would be surprised if the Supreme Court did not defend the notice-and-comment rulemaking process,” he said. “After all, it's kind of the key component of agency rulemaking, and you have a lot of justices who used to be in the D.C. Circuit who decided these cases for some time, and they know that.” Jellum also pointed out that in the Loper Bright decision, SCOTUS explicitly couched the removal of Chevron as a return to the language of the Administrative Procedure Act, which is the basis of agency notice-and-comment requirements.

An order released Wednesday repealing regulations defining a “showerhead” under energy conservation rules could also influence rule repeals at the FCC and other agencies, Lubbers said. In that order, President Donald Trump said, “Notice and comment is unnecessary because I am ordering the repeal.” Generally, when agencies repeal a rule, they also explain why they didn’t consider alternative courses or solutions from the record and justify their choices. “In a normal situation where an agency fails to consider a comment like that, a court could say that the outcome was arbitrary and capricious,” Lubbers said. If the interpretation of rules in the showerhead order stands, it could immunize agencies against those sorts of challenges, he said. “There’s not clear law” on whether such an argument would hold up.