[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



 
                   REGULATORY IMPROVEMENT ACT OF 2007

=======================================================================


                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                   COMMERCIAL AND ADMINISTRATIVE LAW

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                                   ON

                               H.R. 3564

                               __________

                           SEPTEMBER 19, 2007

                               __________

                           Serial No. 110-157

                               __________

         Printed for the use of the Committee on the Judiciary


      Available via the World Wide Web: http://judiciary.house.gov



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                       COMMITTEE ON THE JUDICIARY

                 JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California         LAMAR SMITH, Texas
RICK BOUCHER, Virginia               F. JAMES SENSENBRENNER, Jr., 
JERROLD NADLER, New York                 Wisconsin
ROBERT C. ``BOBY'' SCOTT, Virginia   HOWARD COBLE, North Carolina
MELVIN L. WATT, North Carolina       ELTON GALLEGLY, California
ZOE LOFGREN, California              BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas            STEVE CHABOT, Ohio
MAXINE WATERS, California            DANIEL E. LUNGREN, California
WILLIAM D. DELAHUNT, Massachusetts   CHRIS CANNON, Utah
ROBERT WEXLER, Florida               RIC KELLER, Florida
LINDA T. SANCHEZ, California         DARRELL ISSA, California
STEVE COHEN, Tennessee               MIKE PENCE, Indiana
HANK JOHNSON, Georgia                J. RANDY FORBES, Virginia
BETTY SUTTON, Ohio                   STEVE KING, Iowa
LUIS V. GUTIERREZ, Illinois          TOM FEENEY, Florida
BRAD SHERMAN, California             TRENT FRANKS, Arizona
TAMMY BALDWIN, Wisconsin             LOUIE GOHMERT, Texas
ANTHONY D. WEINER, New York          JIM JORDAN, Ohio
ADAM B. SCHIFF, California
ARTUR DAVIS, Alabama
DEBBIE WASSERMAN SCHULTZ, Florida
KEITH ELLISON, Minnesota

            Perry Apelbaum, Staff Director and Chief Counsel
                 Joseph Gibson, Minority Chief Counsel
                                 ------                                

           Subcommittee on Commercial and Administrative Law

                LINDA T. SANCHEZ, California, Chairwoman

JOHN CONYERS, Jr., Michigan          CHRIS CANNON, Utah
HANK JOHNSON, Georgia                JIM JORDAN, Ohio
ZOE LOFGREN, California              RIC KELLER, Florida
WILLIAM D. DELAHUNT, Massachusetts   TOM FEENEY, Florida
MELVIN L. WATT, North Carolina       TRENT FRANKS, Arizona
STEVE COHEN, Tennessee

                     Michone Johnson, Chief Counsel

                    Daniel Flores, Minority Counsel


                            C O N T E N T S

                              ----------                              

                           SEPTEMBER 19, 2007

                                                                   Page

                                THE BILL

H.R. 3564, the ``Regulatory Improvement Act of 2007''............     2

                           OPENING STATEMENTS

The Honorable Linda T. Sanchez, a Representative in Congress from 
  the State of California, and Chairwoman, Subcommittee on 
  Commercial and Administrative Law..............................     1
The Honorable Chris Cannon, a Representative in Congress from the 
  State of Utah, and Ranking Member, Subcommittee on Commercial 
  and Administrative Law.........................................     4

                               WITNESSES

Mort Rosenberg, Esq., Specialist in American Public Law, 
  Congressional Research Service (CRS), Washington, DC
  Oral Testimony.................................................     7
  Prepared Statement.............................................     9
Jody Freeman, Esq., Professor, Harvard Law School, Cambridge, MA
  Oral Testimony.................................................    17
  Prepared Statement.............................................    19
Dr. Curtis W. Copeland, Ph.D., Specialist in American National 
  Government, Congressional Research Service (CRS), Washington, 
  DC
  Oral Testimony.................................................    33
  Prepared Statement.............................................    35
Jeffrey S. Lubbers, Esq., Professor, Washington College of Law, 
  American University, Washington, DC
  Oral Testimony.................................................    49
  Prepared Statement.............................................    51

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Prepared Statement of the Honorable Chris Cannon, a 
  Representative in Congress from the State of Utah, and Ranking 
  Member, Subcommittee on Commercial and Administrative Law......     5
Letter from Justice Stephen Breyer, Supreme Court of the United 
  States, submitted by the Honorable Linda T. Sanchez, a 
  Representative in Congress from the State of California, and 
  Chairwoman, Subcommittee on Commercial and Administrative Law..    78
Letter from Justice Antonin Scalia, Supreme Court of the United 
  States, submitted by the Honorable Linda T. Sanchez, a 
  Representative in Congress from the State of California, and 
  Chairwoman, Subcommittee on Commercial and Administrative Law..    82
Letter from the American Bar Association (ABA), submitted by the 
  Honorable Linda T. Sanchez, a Representative in Congress from 
  the State of California, and Chairwoman, Subcommittee on 
  Commercial and Administrative Law..............................    84

                                APPENDIX
               Material Submitted for the Hearing Record

Prepared Statement of the Honorable John Conyers, Jr., a 
  Representative in Congress from the State of Michigan, 
  Chairman, Committee on the Judiciary, and Member, Subcommittee 
  on Commercial and Administrative Law...........................    93
Response to Post-Hearing Questions from Mort Rosenberg, Esq., 
  Specialist in American Public Law, Congressional Research 
  Service (CRS), Washington, DC..................................    94
Response to Post-Hearing Questions from Jody Freeman, Esq., 
  Professor, Harvard Law School, Cambridge, MA...................    96
Response to Post-Hearing Questions from Curtis Copeland, Ph.D., 
  Specialist in American National Government, Congressional 
  Research Service (CRS), Washington, DC.........................   105
Response to Post-Hearing Questions from Jeffrey S. Lubbers, Esq., 
  Professor, Washington College of Law, American University, 
  Washington, DC.................................................   120


                   REGULATORY IMPROVEMENT ACT OF 2007

                              ----------                              


                     WEDNESDAY, SEPTEMBER 19, 2007

              House of Representatives,    
                     Subcommittee on Commercial    
                            and Administrative Law,
                                Committee on the Judiciary,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 3:04 p.m., in 
room 2141, Rayburn House Office Building, the Honorable Linda 
Sanchez (Chairwoman of the Subcommittee) presiding.
    Present: Representatives Conyers, Sanchez, Johnson, 
Lofgren, Delahunt, Cannon, Jordan, Keller, and Franks.
    Staff present: Susan Jensen, Majority Counsel; Daniel 
Flores, Minority Counsel; Adam Russell, Majority Professional 
Staff Member.
    Ms. Sanchez. This hearing of the Committee on the 
Judiciary, Subcommittee on Commercial and Administrative Law, 
will now come to order. And I will recognize myself for a short 
opening statement.
    Today's hearing provides an opportunity for us to 
officially begin one important project, as well as to formally 
bring to a close a related project. Today we begin the process 
of reauthorizing and securing funding for the Administrative 
Conference of the United States. To that end, I especially 
commend my colleague, the Ranking Member, Mr. Cannon, for his 
leadership in introducing H.R. 3564, the ``Regulatory 
Improvement Act of 2007,'' and for his deep and abiding 
commitment to revitalizing the conference.
    [The bill, H.R. 3564, follows:]

    
    
    
    
    Ms. Sanchez. Today we will also consider the final 
installment of a 2-year study known as the Administrative Law 
Process and Procedure Project for the 21st Century, which was 
sponsored on a bipartisan basis by the Judiciary Committee. Let 
me first explain the project.
    Through the guidance of the Congressional Research Service, 
particularly Mort Rosenberg, Curtis Copeland and T.J. Halstead, 
the Committee undertook a comprehensive analysis of the state 
of administrative law in our Nation. Over the course of this 
project, this Subcommittee held six hearings, participated in 
three symposia, and sponsored three empirical studies.
    Last December, an interim report in excess of 1,400 pages 
was issued, detailing various findings along with 
recommendations for legislative reform and suggested areas for 
further research and analysis. In particular, this report 
addressed: the agency adjudicatory process; public 
participation in the rulemaking process; the role of science in 
the regulatory process; the utility of regulatory analysis and 
accountability requirements; and congressional, presidential 
and judicial review of agency rulemaking.
    One of the project's most enduring legacies, however, will 
undoubtedly be how it underscored the absolute and urgent need 
to have a permanent, neutral, non-partisan think tank that can 
dispassionately examine administrative law and process and that 
can make credible recommendations for reform, namely the 
Administrative Conference of the United States.
    Although reauthorized in the 108th Congress with 
overwhelming bipartisan support, the conference has not been 
funded since, and its current reauthorization expires next 
week. In addition to supporting the reauthorization of ACUS, I 
hope my colleagues on this Subcommittee will also join me in 
the next step, obtaining funding for the conference once and 
for all.
    As I am sure the witnesses at today's hearing will explain 
in great detail, an extremely nominal investment to fund ACUS 
will unquestionably redound in billions of savings in taxpayer 
dollars. Accordingly, I look very much forward to today's 
hearing and to receiving the testimony from all our witnesses.
    I would now like to recognize my colleague, Mr. Cannon, the 
distinguished Ranking Member of the Subcommittee, for any 
opening remarks he may have.
    Mr. Cannon. Thank you, Madam Chair. I think the panel is 
quite familiar with my views on the issue. And so, with your 
permission, I would like to submit my statement for the record 
and want to just reiterate the one thing you said. You said 
many things that I agree with, but getting this thing funded is 
actually really the next big important step, as well as the 
reauthorization for which we are here today. So thank you for 
the hearing. And if you will accept my statement for the 
record, I will submit it.
    Ms. Sanchez. Without objection, so ordered.
    [The prepared statement of Mr. Cannon follows:]
 Prepared Statement of the Honorable Chris Cannon, a Representative in 
 Congress from the State of Utah, and Ranking Member, Subcommittee on 
                   Commercial and Administrative Law
    I would like to extend a warm welcome to the witnesses today, and I 
thank the Chair for scheduling this hearing. I hope that our work today 
leads promptly toward an authorized and appropriated Administrative 
Conference of the United States.
    ACUS was established in the 1960s to foster uniformity, 
effectiveness and fairness in federal administrative procedure. It was 
a small but productive agency that fulfilled its mission well.
    It served innovatively as a ``private-public think tank,'' 
conducting basic research on how to improve the regulatory and legal 
process.''
    It facilitated the interchange among administrative agencies of 
information useful in improving administrative procedure.
    It collected information and statistics from administrative 
agencies and published reports evaluating and discussing procedural 
improvements.
    It served as a resource for Members of Congress and congressional 
committees.
    The initial jurisdiction was intentionally broad, and ACUS was the 
key implementing agency for the Administrative Dispute Resolution Act, 
the Negotiated Rulemaking Act, the Equal Access to Justice Act, the 
Congressional Accountability Act, and the Magnusson-Moss Warranty-
Federal Trade Commission Improvement Act.
    ACUS developed and promoted procedures implementing the Negotiated 
Rulemaking Act, which encourages consensual resolutions accounting for 
the needs of affected interests.
    It recommended a model administrative civil penalty statute that 
has served as the basis for dozens of pieces of legislation.
    It facilitated judicial review of agency decisions and the 
elimination of technical impediments to such review.
    It helped to focus attention on the need for the federal government 
to be more efficient, smaller and more accountable.
    It actively promoted information-technology initiatives, such as 
developing methods by which the public could participate electronically 
in agency rulemaking proceedings.
    The list goes on and on.
    I cannot imagine what kind of regulatory structure we would 
confront had it not been for ACUS' contributions.
    I know that, whatever that structure might have been, it would 
certainly have been much more expensive and more cumbersome.
    As Richard Wiley, former Chairman, Commissioner and General Counsel 
of the Federal Communications Commission, once explained:
    ``ACUS, along with the Office of Federal Procurement Policy, 
convinced successfully some 24 agencies to initiate [Alternative 
Dispute Resolution] and to try to use it in disputes with private 
sector companies and government contracts. Given the fact that you have 
$200 billion going into the Government procurement program every year, 
the potential savings in that one program are simply enormous.''
    To take just one specific agency, the Social Security 
Administration estimated that the Conference's recommendation to change 
that agency's appeals process generated approximately $85 million in 
savings.
    Those figures, of course, were all in yesteryear's dollars.
    What was the cost to the taxpayer? The last appropriation for ACUS 
was merely $1.8 million per year.
    Against this background, it is easy to understand the observation 
of former White House Counsel C. Boyden Gray that ``as long as there is 
a need for regulatory reform, there is a need for something like the 
Administrative Conference.''
    Numerous other authorities, experts and luminaries have also 
weighed in on behalf of ACUS, including Supreme Court Justices Scalia 
and Breyer and prominent members of academia. One law school dean 
perhaps put it best, urging that: ``if the Conference didn't exist, it 
would have to be invented.''
    It also is easy to understand, and to laud, the bipartisan support 
that exists for the Conference's reauthorization and re-funding.
    As I said at the outset, I hope that this hearing is the start of 
finally bringing ACUS back. It can only help us to reinvigorate the 
centuries-old effort to help the government govern best by governing 
least, and to do so by identifying and helping to deploy the 21st 
Century methods that can help us do that in ways we never could before.
    I yield back the remainder of my time.

    Ms. Sanchez. And I just want to thank our witnesses for 
being patient. I know we started this hearing somewhat late due 
to the vote schedule on the floor. We are expecting votes in 
approximately 40 minutes, so we are going to try to get through 
as much of the testimony as possible.
    With that, I am pleased to introduce the witnesses for 
today's hearing. Our first witness is Mort Rosenberg, a 
specialist in American public law in the American Law Division 
at CRS. For more than 25 years, Mr. Rosenberg has been 
associated with CRS. Prior to his service with that office, he 
was chief counsel to the House Select Committee on Professional 
Sports. And he has held a variety of other public service 
positions. In addition to these endeavors, Mr. Rosenberg has 
written extensively on the subject of administrative law.
    Our second witness is Professor Jody Freeman. Professor 
Freeman teaches administrative law, environmental law, and 
natural resources law and is the director of the Harvard Law 
School Environmental Law Program. Her work in administrative 
law focuses on public-private collaboration and governance, 
regulatory innovation, negotiated approaches to regulation, and 
privatization. Prior to joining Harvard Law School, Professor 
Freeman taught for 10 years at my alma mater, the UCLA School 
of Law, where in 2004 she received the law school's Rutter 
Award for Excellence in Teaching, and in 2001, was voted 
professor of the year.
    Our third witness is Dr. Curtis Copeland, a specialist in 
American national government at CRS. Dr. Copeland's expertise, 
appropriately relevant for today's hearing, is Federal 
rulemaking and regulatory policy. Dr. Copeland has previously 
testified before this Subcommittee, and he is one of three CRS 
experts who are assisting the Subcommittee in the conduct of 
its administrative law project.
    His contributions to the project are deeply appreciated. 
Prior to joining CRS, Dr. Copeland held a variety of positions 
at the Government Accountability Office over a 23-year period.
    And our final witness is Professor Jeffrey Lubbers.
    Did I pronounce that correctly?
    Professor Lubbers, if I am smirking, it is because today is 
National Talk Like a Pirate Day. And landlubber is what comes 
to mind when I hear your name. I apologize.
    Professor Lubbers is a fellow in law and government. He 
holds expertise in administrative law, government structure, 
and procedures, regulatory policy and procedures.
    From 1982 to 1995, Professor Lubbers was the research 
director of the Administrative Conference of the United States. 
He has published two books, ``A Guide to Federal Agency 
Rulemaking'' and ``Federal Administrative Procedures Source 
Book.''
    He is also the editor of the American Bar Association's 
(ABA) Developments in Administrative Law and Regulatory 
Practice. In addition to teaching, Professor Lubbers is also an 
administrative law consultant whose clients include numerous 
Federal agencies, law firms, public interest groups, and 
international organizations, including the OECD and World Bank.
    I want to thank you all for your willingness to participate 
in today's hearing. Without objection, other Members' opening 
statements will be placed into the record. And we will ask that 
the witnesses please limit their oral remarks to 5 minutes. 
Your written testimony in its entirety will be placed into the 
record.
    For those of you not familiar with the lighting system, 
when you begin your testimony, the light will appear as green. 
When you have 1 minute remaining, it will warn you by changing 
to yellow. And then when your time expires, it will turn red.
    If the light should turn red and you are in the middle of a 
thought, we will allow you to finish off that thought before 
proceeding to the next person's testimony. After each person 
has presented his or her testimony, Subcommittee Members will 
be permitted to ask questions subject to the 5-minute limit.
    At this time, I would invite Mr. Rosenberg to proceed with 
his testimony.

   TESTIMONY OF MORT ROSENBERG, ESQ., SPECIALIST IN AMERICAN 
 PUBLIC LAW, CONGRESSIONAL RESEARCH SERVICE (CRS), WASHINGTON, 
                               DC

    Mr. Rosenberg. Thank you very much, Madam Chairman, Mr. 
Cannon. Good to be here again and with you. And I am honored to 
be here to talk about the reauthorization and funding of the 
administrative conference.
    This last 3 years has been very rewarding, even though it 
was arduous. And the commitment that the Committee has had to 
this has been wonderful.
    I thought that I might concentrate my remarks with respect 
to two empirical studies that CRS commissioned. And I thought 
it would be useful to devote the time to that because of in 
describing the difficulties encountered by CRS in these 
studies, it underlines and underscores the need for a 
reactivated ACUS.
    ACUS' past accomplishments in providing nonpartisan, 
nonbiased, comprehensive, and practical assessments with 
respect to a wide range of agency processes, procedures and 
practices are very well documented. During the hearings 
considering ACUS' reauthorization in 2004, C. Boyden Gray, a 
former White House counsel during the George G.W. Bush 
administration, testified before your Subcommittee in support 
of reauthorizing ACUS, stating that, ``Through the years, the 
conference was a valuable resource providing information on the 
efficiency, adequacy and fairness of the administrative 
procedures used by administrative agencies in carrying out 
their programs.'' This was a continuing responsibility and a 
continuing need, a need that has not ceased to exist.
    Further evidence of the widespread respect of and support 
for ACUS continued. Work was presented by Supreme Court 
Justices Scalia and Breyer, both of whom worked at ACUS prior 
to their judicial careers.
    Justice Scalia stated that ACUS was an approved and 
effective means of opening up the process to Government to 
needed improvement. And Justice Breyer characterized ACUS as a 
unique organization carrying out work that is important and 
beneficial to the average American at low cost. Examples of the 
accomplishments for which ACUS has been credited range from 
simple and practical such as the publication of time-saving 
resource material to analyses of complex issues of 
administrative process and the spurring of legislative reform 
in those areas.
    I would here note that ACUS' established credibility and 
nonpartisan reputation opened doors at Federal agencies and 
allowed access to ACUS-sponsored research, to internal 
operational information that normally would not have been 
available otherwise. Justice Scalia remarked, ``I think the 
conference's ability to be effective hinged in part on the fact 
that we were a Government agency. And when we went to do a 
study at an agency, we were not stonewalled.''
    ``Very often a member of that agency was on our own 
assembly. And so, the agency would cooperate in the study that 
we did. I think it is much harder to do that kind of a study 
from the outside. The agencies tended to look upon us as 
essentially people from the executive branch trying to make 
things better.''
    Justice Breyer concurred, commenting that, ``the American 
Bar Association's administrative law section's attempts to do 
studies of agencies,'' commenting on that. What the conference 
could do that the Ad Law section couldn't do is just what 
Scalia is talking about. They could get access to the 
information inside the Government and the off-the-record 
reactions of people in charge of those agencies. So it produced 
a conversation that you can't have as easily just through the 
ABA.
    Justice Scalia underlined that point. I was chairman of the 
ad law section for a year. And there is a big difference 
between showing up at an agency and saying ``I am from the 
American Bar Association, I want to know this, that, and the 
other,'' and coming from the administrative conference, which 
has a statute that says agencies shall cooperate and provide 
information. It makes all the difference in the world.
    The CRS experience with its two sponsored empirical studies 
was disappointing for the very reasons alluded to by the 
justices. Professor William West testified before this 
Subcommittee of the reluctance of most agencies to provide him 
with information vital to his study on public participation at 
the development stage of an agency rulemaking proceeding.
    His requests for information were often met with reluctance 
and suspicion. And his most valuable contacts with 
knowledgeable officials were on deep background. With this 
potential obstacle in mind, when CRS considered a comprehensive 
study of science advisory panels in Federal agencies to 
determine, among other things, how many there were, are, how 
were members selected, how issues of neutrality and conflict of 
interest are handled and the impact of advisory body 
recommendations on agency decision making, we provided the 
research group at Syracuse University's Maxwell School of 
Public Administration with letters of introduction from the 
director of CRS and you, Chairman Cannon, as well as the 
Ranking minority Member of the Subcommittee, to try to assure 
agency officials of their bona fide and neutral academic 
purposes.
    Ms. Sanchez. Mr. Rosenberg, I apologize. But your time has 
expired. The time goes quickly.
    Mr. Rosenberg. I would just conclude that----
    Ms. Sanchez. If you would like to conclude.
    Mr. Rosenberg [continuing]. We tried very hard to get 
entree for these people, and we couldn't do it. It is the 
imprimatur and the reputation of ACUS that works and that has 
reestablished these kind of empirical studies will work.
    [The prepared statement of Mr. Rosenberg follows:]
                 Prepared Statement of Morton Rosenberg
















    Ms. Sanchez. Thank you. I appreciate your testimony.
    At this time I would invite Professor Freeman to begin her 
testimony.

          TESTIMONY OF JODY FREEMAN, ESQ., PROFESSOR, 
               HARVARD LAW SCHOOL, CAMBRIDGE, MA

    Ms. Freeman. Madam Chair and Members of the Subcommittee, 
thank you for the invitation to testify today. Let me just 
applaud your efforts and your leadership, both Chair Sanchez 
and Ranking Member Cannon. This is an area of inquiry and study 
that is not the most exciting for everyone. I understand that 
as an administrative law professor. But the truth is nothing is 
more important than ensuring that our Government agency 
policies are fair, effective and efficient.
    Today, very briefly in my short time, I will describe the 
results of a study that I conducted in cooperation with, or at 
the behest of, CRS that is quite a comprehensive study of the 
judicial review of agency rules across all of the circuits over 
an 11-year period. More broadly, I will make two points.
    The first is the desperate need--and I am not overstating--
the desperate need for research and study of the administrative 
process to help Congress engage in meaningful reform. And the 
second point, the benefit to be gained by funding an 
independent agency like the administrative conference, which 
can produce, sponsor and organize that kind of research.
    Just very briefly to make the case, the need for empirical 
data is striking. There are many misconceptions about the 
administrative process that could lead Congress down the wrong 
path to reform and could lead to a vast waste of taxpayer 
dollars.
    Agencies promulgate thousands of rules each year. The rules 
have, as you well know, the force and effect of law. They have 
a dramatic impact on our economy and society. And yet our 
empirical knowledge of how well agencies do this is very thin.
    We do not know, for example, how effective agencies' rules 
are. In fact, the people who study the administrative process 
don't yet agree on what a measure of effectiveness would be.
    We don't know how much time agencies spend on average 
promulgating rules. We don't know if cost benefit analysis and 
other analytic mechanisms used by the president or by Congress 
work and achieve the results they purportedly are designed to 
achieve. We have a lot of mechanisms, both in terms of 
executive orders and statutes that require ante-analysis of 
rulemaking, but very few post-analyses of how well these things 
work.
    There are many myths about the administrative process that 
lasts for years. My favorite is one that circulated and was 
cited in congressional testimony that 80 percent of EPA rules 
are challenged. It was made up.
    Imagine if Congress had gone and tried to reform 
administrative process at the EPA with a totally fabricated 
statistic like that. This is what keeps me awake at night.
    Again, a few more. Among other things we don't know well 
are rules implemented. Do they achieve their goals? Are 
agencies doing better in their use of science? What would 
better mean? Are agencies doing things with data collection 
that could be copied, absorbed by other agencies if we could 
just generalize across them and figure out what best practices 
are?
    Let me turn briefly to our study. The goal of the study was 
to--and this is a study I conducted with my coauthor, Joe 
Doherty, of your alma mater, Chair Sanchez, UCLA School of Law. 
He can't be here, but he is an empirical expert and certainly 
available to answer questions later.
    The goal was to study the rate at which rules are 
invalidated in whole or part, the reasons why, whether there is 
bias on the panels of judges that review these rules, and 
whether there is anything else about, any patterns we could 
detect, in terms of who files these lawsuits and who tends to 
win. And we have submitted for the record a much more detailed 
description.
    And I am sure you are relieved to know I won't take you 
through the tables. I don't have time. Our data show that the 
clear majority, 58 percent, of challenged rules are upheld in 
their entirety. And nearly 80 percent are upheld in whole or 
part, only 11 percent invalidated in their entirety. This is 
again all rules across all circuits for an 11-year period, the 
most comprehensive study we are aware of.
    The results are generally consistent over time across all 
the agencies and unaffected by the composition of the judicial 
panels reviewing the rules. And I can go into any detail you 
wish if you are interested in questions. But the implication of 
this is simply that we don't think the rulemaking process is in 
crisis.
    Agencies are not seeing their rules invalidated at alarming 
rates, nor are there disturbing patterns in terms of alleged 
bias of partisan judicial panels. Nor are we seeing skewed 
results in terms of the likelihood of success of you are a 
corporate versus an environmental versus a Government plan.
    We are contesting past studies. That is, some scholars have 
suggested that one or another agency was having great 
difficulty defending its rules. One study said EPA rules are 
entirely or mostly upheld only 33 percent of the time. That is 
not what our data says.
    Our study challenges that picture is inaccurate. And this 
leads me to my statement in support of ACUS. There remains a 
significant percentage of rules that are invalidated in whole 
or part, which suggests we need additional study about why, why 
do rules fail, and what reasons do judges invalidate them, why 
do judges invalidate them.
    This leads me to the need for ACUS. I am to stop also.
    Ms. Sanchez. You can finish your thought.
    Ms. Freeman. I have three things to say about ACUS. It is a 
bargain, especially at the funding levels being considered by 
this Subcommittee.
    For the last 12 years, we have missed it desperately. I 
could give you examples of what ACUS could have done, but 
wasn't allowed to do. And third, there is no substitute, 
whether within the Government, OMB, GAO or universities for 
what ACUS can accomplish. Thank you.
    [The prepared statement of Ms. Freeman follows:]
                   Prepared Statement of Jody Freeman




























    Ms. Sanchez. Thank you so much for your testimony, 
Professor Freeman.
    I would now invite Dr. Copeland to proceed with his 
testimony.

TESTIMONY OF CURTIS W. COPELAND, PH.D., SPECIALIST IN AMERICAN 
  NATIONAL GOVERNMENT, CONGRESSIONAL RESEARCH SERVICE (CRS), 
                         WASHINGTON, DC

    Mr. Copeland. Thank you, Madam Chairman, Members of the 
Subcommittee. I am pleased to be here today to discuss recent 
rulemaking and administrative law issues that the 
Administrative Conference, or ACUS, might have been able to 
address as well as issues that it might address in the future.
    Although it is ultimately impossible to know what effect 
ACUS would have had on these issues, it is not far fetched to 
say that ACUS would have made a difference in our understanding 
and ability to deal with them.
    One such issue occurred within the last month. On August 
17th, the Centers for Medicare and Medicaid Services sent a 
letter to State health agencies requiring them to use specific 
procedures to ensure that the States' Children's Health 
Insurance Program, or SCHIP, does not substitute for coverage 
under group health plans. Although CMS said it was just 
providing guidance to the States, some observers considered 
this letter a rule that should have been submitted to Congress 
under the Congressional Review Act. Therefore, they said, the 
letter's requirements could not take effect.
    Had ACUS been available, it could have provided 
professional, objective, non-partisan advice to both Congress 
and CMS about whether the letter's requirements had crossed the 
line into rulemaking and, therefore, avoided at least this part 
of the SCHIP controversy. More generally, during the last 
decade ACUS might have published studies, convened panels and 
possibly issued authoritative guidance to all Federal agencies 
regarding this aspect of the rulemaking process.
    ACUS could have also been a player regarding an issue that 
came before this Subcommittee this year, Executive Order 13422, 
and its changes to the presidential regulatory review process. 
One of the most controversial elements of this executive order 
required agencies to designate presidential appointees as 
regulatory policy officers who appear to have been given 
enhanced authority to stop agency rulemaking.
    However, little was known about these policy officers' 
identities or their responsibilities. Even OMB did not know 
whether the new RPO designees were different than the ones 
serving prior to the executive order. Had ACUS been around 
during the last 12 years, it could have conducted studies 
indicating how many of the policy officers were already 
presidential appointees and determine whether the new designees 
represented a significant change. That information may not have 
diffused the controversy, but it might well have led to a more 
informed discussion.
    Another possible issue for ACUS is electronic rulemaking, 
which supporters say has the potential to increase the 
democratic legitimacy, improve regulatory policy decisions and 
decrease administrative costs. However, the Bush 
administration's effort to create a centralized electronic 
docket for all Federal agencies has generated strong 
congressional concern about its funding and management, and 
concerns from others about the functionality of the docket's 
application. ACUS could have provided Congress and the 
Administration advice on all these issues, bringing together 
leading experts to ensure compliance with applicable legal 
requirements and that the new docket system is cost-efficient, 
effective and user friendly.
    Civil penalties is another issue that ACUS could have 
examined more recently. In 1996, the year after ACUS was 
eliminated, Congress enacted legislation requiring agencies to 
examine their civil penalties for at least once every 4 years, 
and if necessary, adjust them for inflation. However, as GAO 
reported 3 years ago, certain provisions in the legislation 
actually prevent agencies from adjusting their civil penalties 
for inflation.
    As a result of this lack of action, the deterrent value of 
civil penalties have declined sharply over the years. Had ACUS 
been available, it might have been able to call attention to 
these problems while the legislation was being considered in 
Congress or could have identified the problems during 
implementation more rapidly. My written statement identifies 
several additional broad areas that ACUS could have addressed, 
including public participation in rulemaking, science in 
rulemaking, the effectiveness of analytic requirements placed 
on the agency rulemaking agencies, privacy protection, 
information access, presidential directives. The list goes on.
    Also ACUS could have helped in the development of what Neal 
Kerwin from the American University called the 
professionalization of rulemaking, ultimately leading to a 
defined career path. Although many organizations within and 
outside of Government have studied these kinds of issues, ACUS 
appears to have been unique in its ability to serve as a 
nonpartisan, deliberative forum and as a long-term source of 
unbiased, objective information on a range of topics.
    Madam Chairman, that concludes my prepared statement. I 
would be happy to answer any questions.
    [The prepared statement of Mr. Copeland follows:]
                Prepared Statement of Curtis W. Copeland




























    Ms. Sanchez. Thank you, Dr. Copeland. And I noticed you 
came in under the 5-minute mark. I appreciate that.
    At this time I would invite Professor Lubbers to begin his 
testimony.

 TESTIMONY OF JEFFREY S. LUBBERS, ESQ., PROFESSOR, WASHINGTON 
      COLLEGE OF LAW, AMERICAN UNIVERSITY, WASHINGTON, DC

    Mr. Lubbers. Thank you very much, Madam Chair and Ranking 
Member Cannon, Members of the Committee. I am very pleased to 
be here today to discuss with you the continuing need to 
reauthorize the Administrative Conference of the United States, 
ACUS.
    I first want to applaud the Committee's leadership in this 
bipartisan effort that led to the successful effort 3 years ago 
to enact the Federal Regulatory Improvement Act of 2004, which 
reauthorized ACUS until the end of this current fiscal year. 
Unfortunately, no appropriations were made available to 
reconstitute ACUS in the past 3 years, so another 
reauthorization is necessary.
    Due to the work of this Committee in fostering studies and 
forums on the importance of the administrative process, I 
believe that at this time the foundation has been laid for a 
successful appropriations effort. So I strongly support a new 
2007 version of the Regulatory Improvement Act, H.R. 3564. And 
I also want to salute the excellent statements and all of the 
work of my fellow panelists who have been so instrumental in 
providing assistance to the Committee in this effort.
    As you mentioned, I spent 20 years of my professional 
career working at ACUS from 1975 until it lost its funding in 
1995. I truly believe it was one of the Federal Government's 
most cost-effective institutions. And it has been sorely 
missed.
    I have written three short articles supporting the revival 
of ACUS, which I am appending to this testimony. In my years at 
ACUS I saw just how cost-effective it was. We had a small staff 
and a small budget, but a large membership of agency 
representatives and private sector experts who donated their 
time in order to see consensus on some of the most vexing 
administrative procedure problems of the day, problems that the 
rest of the Government did not have the time to think about in 
such an ordered way.
    Our small budget was leveraged into savings many times over 
for the Government due to streamlined procedures, efficiencies 
in government-wide operations, and the sharing of information 
among agencies about procedural problems. Perhaps more 
important, the members were drawn from a wide variety of 
backgrounds and interest groups.
    It was heartening to see interest group lawyers who are 
normally strong opponents in the world of litigation, lobbying 
and politics come together in a spirit of cooperation to seek 
consensus on process. I firmly believe that the connections 
forged in the ACUS meetings helped increase civil discourse and 
reduce the level of partisanship in legal Washington, as the 
testimony of Justices Scalia and Breyer demonstrated, also the 
support for reviving ACUS by both the American Bar Association 
and the Center for Regulatory Effectiveness.
    Mr. Copeland, just 2 weeks ago I had a reminder of how ACUS 
is missed. I was asked to provide testimony to a small, 
independent agency that was created in 2003, the U.S. Election 
Assistance Commission.
    This agency was delegated the important function to issue 
standards and provide grants to the States for improvements in 
election processes around the country. Of course, as a Federal 
agency, it is covered by numerous cross-cutting procedural 
statutes such as the APA, Freedom of Information Act, Privacy 
Act, Sunshine Act, Paperwork Reduction Act and Government 
Performance and Results Act, just to name a few, many of which 
require agencies to take affirmative steps to publish 
procedural regulations and guidelines.
    The commissioners were seeking advice on what they had to 
do under these laws. And when I spoke to them, several of them 
said publicly that they wished there was an ACUS today that 
could advise them. Several of the commissioners told me 
privately that they had received no orientation about these 
laws when they were appointed, and now they realized they 
really need some.
    This is just the kind of advice and training that ACUS was 
able to do for new agencies like EAC. I also believe that a 
large inventory of administrative procedure issues has built up 
since ACUS shut its doors in 1995. And I gave kind of a laundry 
list 2 years ago when I appeared before this Committee, and I 
won't repeat them today.
    I also believe that the authorization of appropriations, 
the dollar amounts included in the bill, are appropriate. They 
are about the same in today's dollars as ACUS' highest 
appropriation of $2.3 million in 1992. And to put this amount 
in perspective, I would note that far greater amounts are often 
authorized by Congress for individual studies of the 
administrative process.
    I was personally involved in a congressionally mandated 
study just published today of one aspect of the Social Security 
Program. And the study cost $8.5 million.
    And I can't resist also pointing out the story in last 
Saturday's Washington Post about a report of the Department of 
Justice's inspector general, which found that DOJ spent $6.9 
million in the last 2 years just to host and send employees to 
10 conferences, with a total amount of $81 million for all 
conferences only in those 2 years. So I think the 
administrative conference is quite a bargain in light of these 
figures.
    So in summary, I would suggest that for all of these 
reasons, as elaborated in my attached articles and earlier 
testimony, I would strongly support the reauthorization and the 
reappropriation of this highly effective and cost-saving 
agency.
    Thank you, Madam Chair, Mr. Cannon. And I would be happy to 
try to answer any questions you might have.
    [The prepared statement of Mr. Lubbers follows:]
                Prepared Statement of Jeffrey S. Lubbers










                              ATTACHMENTS








































    Ms. Sanchez. Thank you, Professor Lubbers. We will now 
begin our round of questionings. And I will begin by 
recognizing myself first for 5 minutes.
    Mr. Rosenberg, if ACUS were reconstituted, what, if 
anything, would you recommend be changed about the conference?
    Mr. Rosenberg. I think there should be a broadening of the 
people that make up the assembly so that there is more 
representation from States and localities, more representation 
from management and public administration types, and perhaps 
more in employment law and personnel kinds of people to reflect 
those areas that are now coming to the fore, and perhaps the 
kinds of issues that are raised by the reorganization of DHS, 
and some of the civil liberties kinds of issues that are coming 
up now.
    Ms. Sanchez. And how important would it be to preserve the 
bipartisan and nonpolitical nature of ACUS, especially given 
the topics that you have just given?
    Mr. Rosenberg. Absolutely essential, and also to lend to 
the credibility of opening doors for--just by the fact that 
ACUS is neutral and does open those doors to get the 
information that they need.
    Ms. Sanchez. Professor Freeman, I am going to give you an 
opportunity, as the time ran out, so that you could talk about 
what ACUS could have done but wasn't allowed to do. I am going 
to give you that opportunity now, during questions.
    Ms. Freeman. Thank you. I suppose that a highlight for me 
is the creation of DHS in the wake of September 11th. And this, 
of course, was the most important, massive creation of a 
Government bureaucracy in over 50 years. And not to have had 
some bipartisan and neutral advice for Congress and for others, 
the agencies themselves, to make that transition work smoothly, 
to try to harmonize the national security concerns of those 
agencies with the need for accountability, public access. That 
would have been a great service ACUS could have provided. That 
is just one in a long list.
    The other I would mention is that outsourcing has grown 
over the last couple of decades, but particularly in the last 
several years, there is need for a significant amount of study 
and attention to the implications of outsourcing. There was a 
New York Times blitz on outsourcing over the last year or 2. 
And you have seen this really come to the fore in the wake of 
Hurricane Katrina, as well as Iraq. Those two issues to me are 
things that ACUS could have helped out.
    Ms. Sanchez. Thank you. I appreciate your answers.
    I have more time remaining, but I am going to yield it 
back. We have been called across the street to vote. My 
understanding is there is one vote. So we will run across to do 
that and come back and resume questioning, unless the Ranking 
Member would like to maybe ask a quick question.
    Mr. Cannon. Madam Chair, I only have one question that I 
can just ask for the record.
    Ms. Sanchez. I will yield. I will yield my time to you, my 
remaining time to you, Mr. Cannon.
    Mr. Cannon. Thank you. And then hopefully we can just let 
the panel go.
    I appreciate you being here. We have been in this business 
together for a long time.
    And just a few, Dr. Freeman. And this is not urgent. But in 
your study, you have got EPA being reversed about 54 percent of 
the time. That seems to be way disproportionate to the other 
agencies involved. You have also got, I guess, the FCC as being 
reversed 43 percent and then others, I think, are averaging 
about 28.
    I actually was wondering why EPA, primarily, and then FCC 
are so far statistically out of line with the others. But 
again, that is not urgent. If you want to just give us 
something in writing.
    Ms. Freeman. I am happy to address it in writing. But just 
very, very briefly, actually, I don't think those numbers--I 
wouldn't necessarily agree exactly with that read of the 
numbers. It turns out that EPA is upheld in whole or part 
actually 74 percent of the time. But you are right that they 
have a lower rate of being upheld in their entirety. They are 
the lowest at 46 percent.
    But just to make one comment about this, we did some more 
analysis. And I don't think it is correct at the moment to 
assume that this means there is something wrong with how EPA 
writes its rules. It turns out that most of the cases, 66 
percent of the cases, in which EPA's rules are invalidated in 
whole or part, 66 percent, are Clean Air Act cases. And Clean 
Air Act implementation is extremely complicated, very likely to 
be subject to litigation.
    It may point to the need for Congress to revisit some of 
the most difficult issues in the Clean Air Act. It may not be 
the fault of EPA.
    Mr. Cannon. All right. Thank you.
    I yield back, Madam Chair, to you.
    Ms. Sanchez. Thank you. I am going to ask unanimous consent 
to enter into the record letters that we have received by 
Justice Breyer and Justice Scalia and also the American Bar 
Association to be made part of the record. Without objection, 
so ordered. Those will be made part of the record.
    [The information referred to follows:]
Letter from Justice Stephen Breyer, Supreme Court of the United States, 
   submitted by the Honorable Linda T. Sanchez, a Representative in 
Congress from the State of California, and Chairwoman, Subcommittee on 
                   Commercial and Administrative Law








Letter from Justice Antonin Scalia, Supreme Court of the United States, 
   submitted by the Honorable Linda T. Sanchez, a Representative in 
Congress from the State of California, and Chairwoman, Subcommittee on 
                   Commercial and Administrative Law




   Letter from the American Bar Association (ABA), submitted by the 
Honorable Linda T. Sanchez, a Representative in Congress from the State 
     of California, and Chairwoman, Subcommittee on Commercial and 
                           Administrative Law
















    Ms. Sanchez. My understanding is that there are no further 
questions of the witnesses. So I would like to thank the 
witnesses for their testimony today. Without objection, Members 
of the Subcommittee will have 5 legislative days to submit any 
additional written questions, which we will forward to the 
witnesses and ask that you answer as promptly as you can so 
that they can be made a part of the record. And without 
objection, the record will remain open for 5 legislative days 
for the submission of any other additional materials.
    I realize this has been a bit of a quick and dirty hearing, 
but we do appreciate your attendance and your testimony. You 
will be receiving, as I said, probably additional questions to 
be answered in writing. I thank you for your patience and for 
your time. And with that, the hearing on the Subcommittee of 
Commercial and Administrative Law is adjourned.
    [Whereupon, at 3:40 p.m., the Subcommittee was adjourned.]
                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

Prepared Statement of the Honorable John Conyers, Jr., a Representative 
  in Congress from the State of Michigan, Chairman, Committee on the 
 Judiciary, and Member, Subcommittee on Commercial and Administrative 
                                  Law
    Today's hearing allows us to consider H.R. 3564, the ``Regulatory 
Improvement Act of 2007,'' a measure that would simply reauthorize the 
Administrative Conference of the United States for an additional 4 
years.
    There are few entities that enjoyed more bipartisan support than 
the Administrative Conference. It is also one of the few subject 
matters that both Justices Breyer and Scalia wholeheartedly agree upon, 
as evidenced by their enthusiastic testimony in support of the 
Conference before this Subcommittee in the 108th Congress.
    Let me just mention a few reasons why there has been and continues 
to be such broad bipartisan support for the Administrative Conference.
    First, the Conference helped agencies implement procedures that, in 
turn, saved taxpayers many millions of dollars. It proposed numerous 
recommendations to eliminate excessive litigation costs and long 
delays. Just one agency alone--the Social Security Administration--
estimated that the Conference's recommendation to change that agency's 
appeals process would result in approximately $85 million in savings.
    Indeed, Justice Breyer described the ``huge'' savings to the public 
resulting from the Conference's recommendations, while Justice Scalia 
concurred that it was ``an enormous bargain.''
    Second, the Administrative Conference promoted innovation among 
agencies and how they function. To that end, the Conference 
successfully convinced 24 agencies to use Alternative Dispute 
Resolution to resolve issues with the private sector. It also 
spearheaded the implementation of the Negotiated Rulemaking Act, the 
Equal Access to Justice Act, and the Magnuson-Moss Warranty Act, 
governing consumer product warranties.
    Third, the Conference played a major role in helping agencies 
promulgate ``smarter'' regulations. It did this by working to improve 
the public's understanding of and participation in the rulemaking 
process, promoting judicial review of agency regulations, and reducing 
regulatory burdens on the private sector.
    After we proceed to markup of the legislation reauthorizing the 
Administrative Conference later this afternoon, I will recommend to 
House leadership that this measure be considered on the floor promptly 
in the coming weeks. I also intend to urge our colleagues on the 
Appropriations Committee to fund the Conference as soon as possible.

                                

     Response to Post-Hearing Questions from Mort Rosenberg, Esq., 
   Specialist in American Public Law, Congressional Research Service 
                         (CRS), Washington, DC




                                

   Response to Post-Hearing Questions from Jody Freeman, Professor, 
                   Harvard Law School, Cambridge, MA


















                                

    Response to Post-Hearing Questions from Curtis Copeland, Ph.D., 
  Specialist in American National Government, Congressional Research 
                     Service (CRS), Washington, DC






























                                

Response to Post-Hearing Questions from Jeffrey S. Lubbers, Professor, 
     Washington College of Law, American University, Washington, DC























                                 
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