Public Citizen v. Trump: Roadmap for the Resistance

Eight days after President Trump signed his “One-In, Two-Out” Executive Order No. 13771, Public Citizen, the Natural Resources Defense Council, the Communications Workers of America, and Earthjustice filed suit against the President and a dozen or so agency heads, seeking declaratory and injunctive relief.

That order, entitled Reducing Regulation and Controlling Regulatory Costs, instructs agencies to identify two old regulations for removal for each new rule they propose, and to limit net incremental regulatory costs to $0 in the remainder of fiscal year 2017. Plaintiffs allege that it would prevent agencies from maximizing the net benefits of regulation, thus depriving the general public of some unspecified future benefits that might otherwise be delivered by some unspecified future rule.

While I am no lawyer, I feel pretty confident that this lawsuit will fail on ripeness and standing grounds. The legal challenges to Trump’s earlier immigration executive order had serious standing questions of their own, but at least there were identifiable parties who were suffering injuries that were immediate, direct, and concrete. Here, there is no final action for the court to review, and nothing in the “two-for-one” order that directly affects any member of the public.

To try to establish standing, the petitioners offer only strained arguments. For example, the complaint notes that persuading agencies to issue more regulations is an important part of the National Resource Defense Council’s business model. Imagine the frustrations of getting a new regulation through, only to see two older ones rescinded as a consequence! We can feel their pain but, absent a particular controversy, no self-respecting court is going to recognize that as a justiciable injury. This is especially true when the requested relief is that the court enjoin a newly elected President from giving general policy direction to the agencies that now report to him.

Moreover, the hallowed “maximizing net benefits” principle, which the challenged executive order allegedly puts at risk, is not some higher law that would trump Trump. Rather, it is a principle that Presidents have used for decades to guide administrative agencies. It currently resides in E.O. 12866, signed by President Clinton. It is entirely within the new President’s authority to revoke that order, although he would be better advised to keep it. Regulatory benefit-cost balancing enjoys wide bipartisan support in Congress, the approval of economists, and growing acceptance by the judiciary.

Even if it overcame the justiciability problems, the facial challenge to the two-for-one order would likely fail on the merits because the order includes all of the usual caveats—for example, “unless prohibited by law,” “unless otherwise required by law,” and “to the extent permitted by law.” It also includes, “Nothing in this order shall be construed to impair or otherwise affect . . . the authority granted by law”; “This order shall be implemented consistent with applicable law”’ and “This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party.” This order reeks of rule-of-law conformity.

And what does it ask the regulatory agencies to do? Unlike the benefit-cost criterion, used to shape individual regulatory decisions, the two-for-one executive order is more of a priority-setting device to allocate resources and manage the flow of regulations. It enjoins agencies to give more attention to rescinding or revising older regulations and to spend less time expanding the frontiers of government with new regulations. This is hardly a revolutionary notion. President Carter included a similar charge in Section 4 of his E.O. 12044. President Reagan did the same in his E.O. 12291. President Obama called for “Retrospective Analysis of Existing Rules” in Section 6 of his E.O. 13563.

To be sure, not much came from those earlier efforts. Presidents routinely ask agencies to take out the garbage, and agencies routinely ignore them. The real innovation in President Trump’s order is that it tells the agencies how their performance is going to be measured. He expects to see two deregulatory actions for every new regulation, and expects to see cost savings that will be sufficient to offset newly imposed costs.

These are, alas, crude metrics. It would be nice if we could count the dollar cost of regulation with the same precision that we count dollars in the fiscal budget. We could then adopt a regulatory budget, so that agencies might be subject to the limits of congressional “appropriations,” and would not be able to treat every vague authorization as an unbounded license to spend other people’s money. Counting regulatory costs is by its nature imprecise. The Trump executive order, in setting a cost constraint on the margin, can be considered state of the art.

The arguments presented in Public Citizen v. Trump would have a much better chance of success if they were advanced after an agency failed to issue a rule that was statutorily or judicially required by a certain date (a common occurrence),  or after an agency issued a final rule whose details appeared to have been changed to conform to the two-for-one requirements in a way that conflicted with the agency’s statutory charge. The complaint is filled with examples of how this kind of scenario might arise—all of them, at this point, hypothetical.

So why file the lawsuit now, when many of the officials who would be in the position of  defendants have not even taken the oath of office yet? In part, no doubt, because it’s good for fundraising. But I suspect there is another reason. Like the banner unfurled by Greenpeace after the Trump inauguration, the Public Citizen complaint serves as a signal to the “Resist” moles among federal agency personnel. It provides a sort of instruction manual for throwing the game, going through each and every agency, and that agency’s relevant statutes, giving examples of how the executive order might come into conflict with stated statutory purposes. It effectively invites agency personnel to make sure that their rulemaking records include the right evidence to support future legal challenges.

If this strategy works, we can expect to see entering the public record agency memoranda, analyses, and emails that follow the formulae outlined in this proto-lawsuit. One envisions these documents containing rhetorical questions like, “Which two species should we kill off in order to save this endangered one?” One of the reasons President Trump should be looking for experienced appointees is to cope with all of this down-in-the-weeds mischief-making.

President Trump doesn’t need a specific legislative authority to take charge of agencies under his supervision; nonetheless, it might well be helpful if Congress were to weigh in. Lawmakers could include some language in the next whatever-passes-for-a-budget, recognizing the need to constrain regulatory costs, and acknowledging the authority of the chief executive to set rulemaking priorities. It should at least be possible to deprive plaintiffs of the argument that, in seeking to constrain regulatory growth, the President is acting in defiance of the will of Congress.

Reader Discussion

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on February 21, 2017 at 11:20:01 am

Eh. Three thoughts:

1. Agencies must repeal two rules for each new one they adopt. But there is no actual definition of “a rule.” Sure, rules are edicts having the force of law adopted via the Administrative Procedures Act. But I know of no criteria for distinguishing one rule from two rules.

So we can imagine an agency that has two rules: “Do X.” “Do Y.” It wants to adopt a new rule to direct people to do Z. Under Trump, the agency will repeal its existing rules, and adopt a new rule that says say, “Do X, Y, and Z.” Thus the agency will have repealed two rules while adopting one. The only effect will be to cause rules that used to be codified wherever it would be most easy to find them in the Code of Federal Regulations, and now codify them all in a big lump in order to pass the useless “Only adopt one rule for every two rescinded” requirement. This is progress?

2. And yes, every administration issues some pro-forma statement directing agencies to refrain from imposing needless costs. And yes, the people who love this sort of stuff are always disappointed with the results. The moral is not that agencies are recalcitrant (although that might also be true). The moral is that you can’t substitute form for substance. If you think a specific rule imposes more cost than benefit, then you have to focus on that specific rule, and its specific costs and benefits. Formulaic pronouncements are not a substitute for substantive analysis.

Agencies will inevitably deny that their rules impose needless costs. Rather, they will say that it is that naughty, naughty CONGRESS that has imposed the costs by passing statutes. The agency will claim that it is merely reading the expensive, expensive statute and adopting rules to implement it. Congress is the cost-causer; the agency is merely the dutiful messenger. And sure, some people will argue that there might be less expensive ways to implement the statute—but that’s only because those people lack the agency’s subject matter expertise, the agency will argue. Maybe the agency is right; maybe not; there is no formulaic way to resolve this dispute. You need to evaluate each regulation individually and determine as a matter of substance whether there would be a less-costly means of implementing a statute.

3. So I don’t have high expectations for Trump’s latest pronouncement. To the extent that this directive actually does have any effect, then it would make sense for interested parties to litigate—because the executive should not be able to overrule Congress. As Mannix rightly observes, it should be up to Congress to pass laws declaring that their prior statutes should be subordinated to some other objective. (That’s what Congress did in adopting that Religious Freedom Restoration Act.)

True, Obama was able to refrain from implementing the parts of Obamacare or immigration laws that did not suit his objectives. But it was difficult to identify people with standing to object. As Mannix further observes, that may not be true when the Trump Administration declines to implement environmental laws.

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on February 21, 2017 at 12:38:55 pm

Great post, Brian. I would add one point. The E.O. does not actually require agencies to repeal two regulations for every new one proposed. Given the time it takes to repeal rules, a requirement to repeal two existing rules before proposing a new regulation might impede the issuance of new rules with statutory deadlines, especially if the anti-Trump saboteurs game it out that way. But the E.O. does not require repeal prior to proposal. Rather, it directs agencies to "identify" two repeal candidates for every new one proposed.

All the E.O. does, as you say, is give the agencies a general policy direction--reduce regulatory burden--and a simple metric by which OMB, Congress, and the public can measure success and hold agencies accountable. The policy direction is entirely conventional. It's as if Trump said, "There are too many rules, many are obsolete, duplicative, or excessively costly, so start pruning and trimming."

The question then becomes how to measure progress in cutting red tape. As you say, regulatory compliance burdens can be quite subjective and the broader economic impacts of regulation even more so. Number of Federal Register pages is another possible metric but there's no necessary connection between a rule's length and its cost. The simplest, most easily understood metric is the one Trump picked--the net change in the number of rules.

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Marlo Lewis
on February 21, 2017 at 14:53:06 pm

Actually the theories of measuring and managing complex system are worked out fairly well in my area of expertise--software engineering. Computer programs are basically sets of rules.

One of the problems with counting rules is that it is inconsistent. How big is a rule? What makes up a rule? When you start measuring rules and cutting them the people who are affected by them will change the way they are measured and what constitutes them.

A more effective way of working with complex systems of rules is already well known in the software world. We work with something called Function Points.

With Function Points you count the number of interfaces and data storages used in a system and estimate their complexity. This tends to give a more rational scale of the system than counting rules.

The equivalent for government would be to count the number of agencies and their "interfaces" with the public and with other organizations and agencies, and estimate the complexity of those interactions.

To manage the cleanup of administrative systems some measurement of effectiveness and costs is also needed. What are the sources of unneeded costs?

I have a hunch that these are known and well studied topics in the world of government administration.

Part of what Trump is doing here is giving top-down support to the many administrators who support what he is trying to do. The other message of the EO is that under Trump, cost cutters and administration reducers will be rewarded. That message will only have meaning if Trump can follow through with the rewards, so I would bet that that is where the saboteurs would strike the hardest.

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Scott Amorian
on February 21, 2017 at 16:09:36 pm

Well said!

"The equivalent for government would be to count the number of agencies and their “interfaces” with the public and with other organizations and agencies, and estimate the complexity of those interactions. " - and perhaps, we can add, an assessment of the interfaces themselves and whether the *software* was ever intended to interface at certain nexus points.

"That message will only have meaning if Trump can follow through with the rewards, so I would bet that that is where the saboteurs would strike the hardest. "

Great point - look to any mid to large company and one can identify the same internal dynamics taking place. Who gets rewarded and how BUT more importantly who puts the kibosh on the reward.

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