Professor Parrillo Testifies Before Congress on Regulatory Process 

On March 14, 2018, Professor Nicholas Parrillo ’04 testified before the U.S. House of Representatives Committee on Oversight and Government Reform. Parrillo spoke during a hearing entitled, “Shining Light on the Federal Regulatory Process.”

Parrillo was called to give testimony about a study he conducted in 2016-17 of how federal agencies issue and use guidance documents and how those documents affect regulated parties and other stakeholders. The study was commissioned by the Administrative Conference of the United States (ACUS), an independent federal agency that devises best practices for government administration. Its decision-making body is a combination of agency political appointees, civil servants, industry and NGO representatives, and academics. This past December, ACUS used Parrillo’s study as its empirical basis in unanimously adopting a new set of best practices for how agencies should use guidance.

Guidance documents, as a category, cover all public statements that federal agencies issue, short of full-blown binding regulations, that advise the public on how the agency plans to exercise its discretion or interpret law.

“They are essential and ubiquitous instruments of government administration, and individual companies find them really valuable in figuring what they need to do to stay on the right side of the law,” Parrillo said. “However, these documents are also controversial, because while they are legally supposed to be nonbinding, business people have often complained that, in real life, you have no practical choice except to follow them. To the extent these documents are in fact coercive, they are open to criticism because the bureaucracy has the power to issue them at will, with little process or transparency.”

For example, the law lays out standards for how safe an airplane has to be before it can fly, or what characteristics a food product needs to have before it can be sold as “organic.”  But the law contains a lot of provisions that are open-ended, so agencies like the Federal Aviation Administration or the Department of Agriculture issue guidance documents that provide airlines or farmers with more specifics about what they should do to comply, Parrillo explained.  In the day-to-day work of airplane maintenance or organic farming, the guidance rather than the law is often what provides practical answers to immediate questions. The guidance isn’t itself law – it’s only supposed to be suggestive – but business people sometime think it goes farther than that, according to Parrillo.

“Understanding the question of whether guidance is coercive requires going beyond black-letter doctrine and talking to agency officials and industry attorneys and managers who handle compliance on the ground, which is something I sought to do in this study,” said Parrillo.  “I interviewed 135 individuals across a range of agencies, industries, and NGOs.”

The hearing at which Parrillo testified was focused on how the federal bureaucracy goes about making and enforcing law, including how it uses guidance documents.

“Critics of guidance have a point when they say that regulated parties often have no choice but to follow guidance documents,” explained Parrillo. “But these coercive effects occur only in certain identifiable circumstances, not universally, and even when they happen, these effects typically are not consciously intended by agency officials. The pressure to follow guidance can be mitigated by certain organizational reforms to the bureaucracy that my study and the ACUS best practices identify.”
 
Professor Parrillo specializes in the subjects of administrative law and government bureaucracy and also teaches courses in remedies, legislation, and American legal history. He has a secondary appointment as Professor of History at Yale.