It is no secret that Joe Biden’s administration is racing to finalize a host of regulations before a period of Congressional Review Act (CRA) vulnerability kicks in. Should Republicans recapture control of Congress and the White House, the CRA would give them a fast-track legislative process to repeal the rules issued late in Biden’s term. The 1996 statute, an uneasy compromise between Bill Clinton’s White House and the Newt Gingrich-era Congress, was designed to give Congress, combined with a presidential signature, a filibuster-proof way to repeal unwanted regulations under specific conditions.
Law firms with regulatory expertise anticipate CRA exposure in early 2025 for regulations issued as early as June and perhaps May 2024. The fast-track option is vital for an incoming party with trifecta control because overturning regulations through the ordinary legislative process is rare. Presidents aren’t likely to sign legislation repealing their own administration’s regulations. And the president’s party, even if a Senate minority, will ordinarily block the repeal of rules.
However, as the administration rushes to finalize rules, it must also consider the conservative judiciary’s assault on the administrative state. Speed is vital, but so is ensuring regulations are on the firmest legal footing possible. How should agencies balance what seems like conflicting imperatives?
Fortunately, in specific contexts, policymakers don’t have to, thanks to an underutilized tool recommended in 2018 by the Administrative Conference of the United States (ACUS)—a non-partisan, independent agency of senior federal officials working alongside academics, practitioners, and other private-sector experts. That tool is the “administrative severability clause.”
If a court finds that part of a rule goes beyond the agency’s regulatory authority or lacks adequate justification, the administrative severability clause is a provision in the final rule that advises a reviewing court on how to react. The severability clause explains that should a court conclude certain designated parts of a rule are invalid, the agency intends that the remaining portions of the rule still go into effect. If well-explained, such clauses steer courts away from the default position that any infirmity in a regulation dooms the entire initiative.
For example, a consumer protection regulation might limit the amount of a certain chemical found in food and require food companies’ packaging to display their measurement of that chemical. A severability clause could tell the court how the disclosure provision should be enforced independently if, say, the limit regulation alone is caught up in a legal challenge or vice versa. ACUS recommended that agencies incorporate severability clauses “when an agency recognizes that some portions of its proposed rule are more likely to be challenged than others and that the remaining portions of the rule can and should function independently.” Severability clauses help agencies avoid letting the mere threat of legal challenge cause them to preemptively excise components of the rule that most ruffle industry’s feathers, usually because they are the most protective of the environment, consumers, workers, and so on.
Administrative severability clauses are not a concession that a rule lacks statutory authority. Instead, it reflects the judicial landscape that an agency faces. Agencies that finalize rules this spring will face a sophisticated conservative litigation apparatus seeking to shred Biden’s regulations. Groups like the Pacific Legal Foundation—which gained notoriety for filing one of the first lawsuits against the Education Department’s original student loan forgiveness program—and more traditional anti-regulatory players like the U.S. Chamber of Commerce and Republican Attorneys General are well-versed in challenging, delaying, or altogether dismantling new regulations, often through strategic forum shopping. Judges and justices from the Supreme Court on down have made it easier for litigants to challenge regulatory action by expanding the so-called Major Questions Doctrine, opening the courtroom doors to litigants with questionable claims to standing, and possibly overturning the longstanding principle of judicial deference to agencies’ interpretation of their statutes.
Together, well-monied interests and the courts have successfully delayed or defeated several important regulatory achievements through costly litigation. Among many other examples, they have defeated the Environmental Protection Agency’s Clean Power Plan, blocked the Department of Labor’s COVID-19 vaccine-or-test mandate, and tied up the administration’s plans to increase the minimum wage for workers on federal contractors.
Fortunately for agencies, anti-regulatory groups commenting on proposed rules often signal which parts they will likely challenge. Agencies can point to these adverse comments as part of their rationale for including a severability clause. Also, according to ACUS, courts may be less likely to agree with the agency if the issue of severability arises for the first time in litigation. It is better to be preemptive.
Severability clauses can protect the less controversial portions of regulations by ensuring they take effect independently while the parts that draw the most opposition are litigated. As ACUS suggested and as explained by law professors Charles W. Tyler and E. Donald Elliott, an agency should draft rules so that they both express an intent to be severable and explain how their severable parts can reasonably and effectively operate independently of each other.
Some agencies have gotten on the severability clause bandwagon. The Securities and Exchange Commission’s final rule requiring public disclosure of greenhouse gas emissions included a severability clause, as did the Labor Department’s recent rule establishing a legal test for employee-versus-independent contractor classification and its proposal to update the threshold for overtime eligibility.
Other agencies should follow suit. For instance, as one of us has advocated, the Federal Acquisition Regulatory Council (FAR Council) should include an administrative severability clause in its final rule requiring climate risk and greenhouse gas emissions disclosures from entities that hold large federal contracts. Given the litigious context in which the FAR Council makes policy, it should safeguard as much of the regulation as possible. Rather than disarming unilaterally, it can use a well-crafted severability clause to defend its most hotly contested provisions in court while reducing the risk that the entire regulation is invalidated.
As this example demonstrates, given the complex and litigious landscape surrounding federal regulations, it would be prudent for the administration to continue to leverage severability clauses. Doing so can help ensure that at least parts of these critical regulations can deliver their promised benefits to the public no matter how the elections turn in November.
