Joshua Blank (UC Irvine) presents Audit Guides & The Administrative State (co-authored with Leigh Osofsky (UNC)) at Boston College today at 5pm ET as part of its Tax Policy Collaborative hosted by James Repetti and Diane Ring:
Scholars are engaged in deep debate about the transformative power of recent Supreme Court cases that appear to limit the role of agencies in making rules of law. In Loper Bright and West Virginia v. EPA, the Supreme Court overruled a longstanding doctrine of judicial deference to agency rules and prescribed more boundaries around the scope of such rules. Scholars have debated to what extent these changes will usher in new forms of judicial review that will transfer power from agencies to the courts.
This Article argues that this debate misses important elements of where agency action is and where it is going. Agencies must be able to say what the law is to be able to enforce it. Agencies often do so by issuing audit guides—enforcement guidelines that agencies formally direct to internal agents, but which agencies frequently make public as well. When agencies issue these guides, recent Supreme Court case law may shift where agencies state what the law is, but it will not shift whether they will communicate their views. Yet, audit guides have eluded any detailed examination by scholars.
In this Article, we conduct a study that shows how agency decisions in audit guides not only influence perceptions of the law but also are often treated as if they are law by members of the public, agencies, and even by the judicial and legislative branches. Further, in audit guides, agencies inevitably make choices between different legal interpretations. These choices are often not subject to challenge, leaving the agency as the final arbiter of the law.
Our study has several significant implications. First, it offers a counterintuitive rejoinder to current narratives about agency power. Recent attacks on agency rulemaking and enforcement resources suggest that many agencies will have little power to influence the application of the law. In this Article, we illustrate that audit guides can serve as a persistent form of influence, even where agencies do not have the resources to engage in significant enforcement of the law. Indeed, with limited agency resources and less resulting litigation about the law, what agencies say in audit guides may, paradoxically, have a greater impact on public perceptions of the law. Second, we illustrate how agencies’ abilities to use audit guides to pick and choose among existing law and even make new legal pronouncements may undermine recent judicial doctrine that purports to shift power to say what the law is from agencies to courts. Finally, our study also suggests that agencies can use audit guides to infuse the law with greater participatory values that have long been absent from the more formal regulatory process. To this end, we propose a concrete framework for how agencies can better integrate transparency and inclusivity into the development of their audit guides.
