Document Type

Article

Publication Date

9-6-2022

Abstract

Congress routinely enacts statutes that require federal agencies to adopt specific regulations. When Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, for example, it mandated that the Securities and Exchange Commission (SEC) adopt an anti-corruption regulation requiring energy companies to disclose payments they make to foreign governments. Although the Dodd-Frank Act specifically required the SEC to adopt this disclosure requirement, the agency’s eventual regulation was also, like other administrative rules, subject to disapproval by Congress under a process outlined in a separate statute known as the Congressional Review Act (CRA).

After the SEC issued its final disclosure rule as required under the Dodd-Frank Act, Congress passed a joint resolution disapproving the rule under the process authorized in the CRA. Although that disapproval resolution nullified the SEC’s rule, it did not amend the Dodd-Frank Act nor eliminate the statutory command that the SEC adopt a disclosure rule like the very one that Congress had disapproved. Yet the passage of the CRA resolution did trigger a provision in the CRA that prohibits an agency from adopting any subsequent regulation that is “substantially the same” as one that Congress has disapproved. The SEC, in other words, still needed to issue a disclosure regulation, but it could not issue one that was substantially the same as the old one.

In some instances, this might not pose a major problem for an agency, but the SEC found itself in a bind because the Dodd-Frank Act not only required the agency to adopt a disclosure regulation, the statute also provided considerable detail about what needed to be included in that regulation. What emerged was a conundrum—the CRA conundrum—created by the tension between the CRA and substantive statutes such as the Dodd-Frank Act. On the one hand, agencies face statutory mandates to adopt regulations that comport with the detailed provisions of a substantive statute, such as the Dodd-Frank Act. On the other hand, if these agencies’ regulations are then disapproved, they can no longer adopt a regulation that is “substantially the same” as the old regulation.

What is an agency to do? Is there a way for agencies to overcome the CRA conundrum, remaining faithful to both the CRA’s “substantially the same” limitation and the detailed requirements of a substantive statute that mandates regulatory action? In this article, I use the SEC’s predicament to highlight and then tackle the CRA conundrum—one that other agencies have confronted and will continue to confront in the future whenever CRA resolutions disapprove of statutorily mandated rules.

The key to resolving the conundrum is to recognize that Congress’s choice of imprecision in the CRA allows agencies to follow the more specific language contained in substantive statutes, such as the Dodd-Frank Act. The test for substantial similarity in cases of statutory tension must be measured against the discretion the substantive statute affords the agency. A general statute such as the CRA, after all, can only impose obligations on an agency with respect to matters over which it has discretion. An agency that finds itself facing the CRA conundrum simply needs to make sure that any re-issued rule is no longer substantially the same as those portions of the rule over which the substantive statute allowed the agency room to maneuver.

What counts as “substantial,” then, will necessitate an initial judgment about the space available to the agency to act. Even with highly detailed statutory provisions, an agency will almost always still have some discretion available to it over some of the rule’s terms. That discretion must then be exercised in some substantially different way, even if only by making available opportunities for waivers or by extending deadlines for compliance. In the end, the disapproval of a rule under the CRA does not relieve an agency from its obligation to produce a regulation that complies with other statutory obligations but, by viewing “substantial” from the proper perspective, the CRA conundrum can be solved.

Keywords

Administrative law, statutory interpretation, legislative oversight, enabling legislation, organic statute, mandated regulation, Securities & Exchange Commission, Dodd-Frank Act, resource extraction disclosure rule, congressional nullification, agency discretion, canons of construction

Publication Title

Administrative Law Review

Publication Citation

75 Admin. L. Rev. 79 (2023)

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