The editor of this publication is often asked to name several of the most significant surprises which he observed over the past half century working on issues dealing with the administrative state.
Outside the wonky world of regulations the resultant answer would hardly ring an audible chime with the general populace. Nonetheless the question is challenging and is recast to identify regulatory “dumbfounders”. Answers change with the passage of time and rebranding the question as the identification of “dumbfounders” is appropriate because we were in search of a non-existent noun in lieu of a verb to designate a specific event that designates a surprise.
Benefit-cost analysis had its origins in the evaluation of water resource development projects such as dams and waterways. The idea of applying the techniques unique to the analysis of the benefits and costs resulting from the pouring of tons of concrete to build massive public works projects to the analysis of the benefits and costs emanating from piles of paper which compel changes in the social or economic behavior of individuals was dumbfounding to a wide range of personnel within the administrative state; see this post for additional background.
Regulatory agencies routinely issue statements that are not published as regulations and are frequently referred to as guidance. Some inhabitants of the regulatory state believe that the term guidance means exactly what the dictionary says it means: “the act or function of guiding” with an emphasis on to “guide” but not to “compel” which when translated by these individuals into the parlance of the regulators means that the regulators should be extremely deferential to guidance but not bound by it for any period of time, however short, because guidance is solely advisory to both the regulators and private parties.
Nothing could be farther from prevailing practices as enunciated by the administrative law academy; in their view agency guidance governs the actions of agency personnel until which time a party convinces senior management of the agency to the contrary. A related question is if guidance governs the views of agency personnel until it is reversed by a superior, is it not in the best interests of the regulated party to comply with the guidance until it is reversed?
See this report of the Administrative Conference of the US which sets forth the views of interviewees in agencies, industry, and NGOs on the probable prevailing circumstances that discourage regulated parties from seeking departures from guidance, as well as factors that can incline agencies against departing from guidance. Also see this action by DOJ regarding its internal guidance which eliminates any uncertainty whatsoever –why is not the DOJ document the standard to be used by all agencies?: DOJ Guidance Documents
Consequently we conclude that given the definitions advanced by the academicians technically speaking guidance is not binding but it is tantamount to a binding requirement on regulated parties.
Heretofore the gold dumbfounder was the claim that the President did not have the authority to implement centralized regulatory review in the White House Office of Management and Budget. However since the myriad of studies and statements on guidance are increasing both in frequency and significance, the issues concerning regulatory guidance documents have been upgraded to the silver medal status leaving no choice but to relegate an issue which was formerly one of the most contentious issues in the administrative state–centralized regulatory review- to the bronze medal status.