White House Tells Agencies to Quickly Undo ‘Unlawful’ Rules (2)

Federal agencies don’t need to follow the standard rulemaking process to ditch regulations that official deem “unlawful” in some instances, the White House said in a memo issued late Wednesday.

Federal agencies can use the “good cause” exception in US administrative law to overturn some rules without going through the typical, lengthy rulemaking process, the Trump administration said in the memo. Officials were directed to focus those efforts on regulations they say contravene recent Supreme Court decisions.

The memo marks the latest move under President Donald Trump to reshape the government and eliminate rules that the administration says are unnecessary. Under US administrative law, to write rules — or repeal them through new regulations — federal agencies typically must engage in a months- or years-long process that involves taking comment from the public and industry.

The short-term expediency of cutting regulations without the time-consuming and costly process of public notice and comment may be outweighed by litigation, according to Nikesh Jindal, a partner in King & Spalding’s appellate, constitutional and administrative law practice.

The administration could make a strong claim, based on prior court rulings in addition to the memo’s edict, to invoke the good cause exception “to wipe those regulations off the book,” Jindal said in an emailed statement. Still, there will be legal challenges about whether using the exception is lawful, he said.

Litigation on the issue could “break new ground and open up a major new pathway for expedited deregulatory action,” said Kevin King, a partner at Covington & Burling who specializes in administrative law and litigation.

There are still risks to that strategy, as some courts have construed the exception narrowly and denied agencies’ prior attempts to bypass standard requirements to repeal regulations, he said.

If the government’s gamble that courts will accept a broad use of the good cause exception pays off, “the Trump administration will achieve widespread, durable, once-in-a-generation regulatory reform,” King said.

‘Onerous Regulations’

Since Trump took office in January, he and Elon Musk’s Department of Government Efficiency have sought to drastically downsize the federal bureaucracy, undo regulations and assert presidential authority.

“Unlawful, unnecessary, and onerous regulations impede these objectives and impose massive costs on American consumers and American businesses,” the White House said in the memo. The “good cause” exception in administrative law lets agencies “dispense with notice-and-comment rulemaking when that process would be ‘impracticable, unnecessary, or contrary to the public interest.’”

Dennis Kelleher, co-founder of Better Markets, a public policy think tank, said the memo risks damage to consumers, investors and small businesses.

“The White House cannot unilaterally declare that regulations based on and often required by laws passed by Congress are unlawful,” Kelleher said in a statement.

Trump issued other orders late Wednesday with a similar decree to disregard standard regulatory procedures. One directed regulators to rescind — for the second time — rules put in place during Democratic administrations on low-flow shower heads.

(Updates with attorney comments starting in fourth paragraph, showerhead regulations in last.)

--With assistance from Ben Bain and David Scheer.

To contact the reporter on this story:
Lydia Beyoud in Washington at lbeyoud2@bloomberg.net

To contact the editors responsible for this story:
Ben Bain at bbain2@bloomberg.net

Megan Howard, Peter Eichenbaum

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