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Federal Regulations Advisor Insight and Commentary on U.S. Government Regulatory Affairs

Judicial Review of An Orderly Shutdown of Government – Regulatory Process

Posted in Agency Authority, Judicial Review & Remedies, Regulatory Process

The Government is closed – somewhat – and the regulatory process surely is winding down but will not entirely stop.  The funding lapse with closing the books on FY2013 and no appropriations in place for FY2014 set in motion an “orderly shutdown” yesterday.  What that means from a regulatory process perspective is as varied as agency reactions to a lapse in appropriation.  What regulatory processes are essential?  Not all agencies or functions are closed, for some operate on multi-year appropriations or fee receipts.  Agencies and agency functions subject to the lapse in appropriations face a difficult set of choices, and those that take final agency action may face a new challenge in judicial review.

Emergency:  Much is written and debated about what functions and personnel are “essential” although that word appears not in the Anti-Deficiency Act.  The Anti-Deficiency Act is brief to the point of being terse in providing that an officer or employee of the United States (or D.C.) “may not make or authorize an expenditure or obligation exceeding an amount available in an appropriation or fund for the expenditure or obligation.”  At the same time, voluntary service is prohibited “except for emergencies involving the safety of human life or the protection of property.”

Parallels between the concept of “emergency” in the Anti-Deficiency Act and other statutes exist, though imperfectly.  emergency may have many meanings, and it has a foothold in the Administrative Procedure Act (APA):  A final rule may be promulgated under the APA without advance notice and an opportunity for public comment “when the agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable ….”  This last word – impracticable – has been construed by the courts strictly to mean emergency, not dissimilar to the safety of human life or the protection of property.  The interpretation of “emergency” is not – in any of the relevant statutes here – a term of programmatic ambiguity that the agency may be granted deference under Chevron; emergency here is a general term that the courts will interpret for themselves.

Management and Budget:  The Office of Management and Budget has long planned for the potential for a lapse in appropriation.  OMB Circular A-11 – budget preparation and execution – provides guidance to the agencies, but leaves substantial wiggle-room for agencies to interpret and plan their own actions.  Moreover, the circular refers agencies to the advice provided by the Department of Justice (DOJ) Office of Legal Counsel (OLC) nearly 20 years ago.

For itself, OMB’s Office of Information and Regulatory Affairs (OIRA) is largely furloughed – the active staff is two.  An orderly shutdown is likely to impact the review and completion of review of all be a very few regulatory actions, but concluding review is not a final agency action subject to judicial review; few completions are expected but OMB has indicated a completion of review after lapse of appropriation, the Food and Drug Administration (FDA)’s Revision of Postmarketing Reporting Requirements Discontinuance or Interruption in Supply of Certain Products (Drug Shortages) on October 1, 2013.

Regulations Publisher:  The Office of the Federal Register made clear its position in complying with the Anti-Deficiency Act:

In the event of an appropriations lapse, the Office of the Federal Register (OFR) would be required to publish documents directly related to the performance of governmental functions necessary to address imminent threats to the safety of human life or protection of property. Since it would be impracticable for the OFR to make case-by-case determinations as to whether certain documents are directly related to activities that qualify for an exemption under the Antideficiency Act, the OFR will place responsibility on agencies submitting documents to certify that their documents relate to emergency activities authorized under the Act.

In implementing that position, the agency is required to make its own certification:

An agency wishing to submit a document to the OFR during a funding hiatus must attach a transmittal letter to the document which states that publication in the Federal Register is necessary to safeguard human life, protect property, or provide other emergency services consistent with the performance of functions and services exempted under the Antideficiency Act.

These letters (or perhaps a paragraph in the presumably emergency publication request letter) form a necessary post-decision part of the decision’s administrative record.

Judicial Review:  A question not yet answered is whether an agency taking final regulatory action (or even delivering a rule) after a lapse in appropriations that does not fall within an exception to the Anti-Deficiency Act has acted “contrary to constitutional right, power, privilege, or immunity” or “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right” under the APA.

At least one agency – the National Labor Relations Board (NLRB) – lies on the cusp, having extended its deadlines in a notice that was signed (on its face) after lapse in appropriations.

If a court finds that an agency taking the risk has acted in violation of the Anti-Deficiency Act and the APA, it would then set aside that action.  All this may be of short moment when (not if) Congress and the President resolve the appropriations deficiency if the agency can ratify its actions, but the period of lapse would remain a chasm in regulatory authority.