Agency Rulemaking in the Wake of COVID-19: How to Prepare

To say the regulated community’s situation is fluid during the time of COVID-19 would be an understatement.

Questions swirl regarding compliance obligations, contract enforcement, agency enforcement, and more. At best, there is an inconsistent patchwork of agency responses. What will happen once the dust begins to settle? What will the new regulatory landscape look like? Perhaps now, more than ever, it is important to understand why participation in an agency’s rulemaking process matters and how to prepare for coming changes.

Background

Agency rulemaking (and more generally, administrative law) can be a tricky space to navigate. There are deep questions surrounding constitutional principles of separation of powers, due process, and the infamous Chevron doctrine. Those topics and debates are for another day. More immediately, though, is the need to understand the rulemaking process and why participation matters as it impacts individuals and businesses in the near- and long-term.

The general process of agency rulemaking begins with a law. The relevant agency “fills the gaps” by proposing rules that interpret the law and then publish the rule(s) for a notice and comment period. Finally, the agency adopts the rule(s) and is responsible to enforce defined penalties and fines.

COVID-19

A lot of issues are emerging as the COVID-19 pandemic unfolds. For example, there is much discussion surrounding force majeure provisions and rightly so. Consent decrees, settlements, contracts with vendors, and the like are all being affected by the unforeseen COVID-19 outbreak. Be sure you understand your contractual obligations with private parties as well as agencies.

A lesser discussed topic, though, is the coming change to the regulatory landscape. It is important that businesses are ready for permanent regulatory changes in the wake of COVID-19.

Going forward: Why should you participate in the rulemaking process?

Historically in times of emergency, administrative agencies have adopted regulations that persist through today. We are already seeing the beginnings of regulatory “fixes” that will have lasting impacts on business operations. Consider the additional reasons to participate in the rulemaking process:

• Preserve Your Rights: Once a rule is adopted, it is very difficult to challenge its validity and unwind its implications. Participation from the beginning through written comment and at public hearings preserves objections in the administrative record allowing an opportunity for later challenges if necessary.
• Take a Seat at the Table: Participation in the administrative rulemaking process gets you a “seat at the table” and allows you to provide early feedback and influence on the proposed rule. It also gives businesses a “heads-up” on how agencies interpret laws and intend to enforce regulations. One of the best ways to get involved is through an industry trade group familiar with the issues and players.
• Build Your Network: Engaging with industry stakeholders, trade associations, and relevant agency personnel will prove invaluable later on when agencies begin enforcement efforts.

Things you can do to prepare:

• Review all ongoing obligations found in contracts, Consent Decrees, Administrative Orders and similar. Contact a member of the Rhoades McKee team to assist with interpretation and coordination with involved parties including agencies.
• Understand how relevant local, state, and federal agencies are responding. Each agency is responding at a different rate and in a different way. Know how each affect your ongoing compliance obligations.
• Stay informed of upcoming rule changes. There may be significant changes in the regulatory landscape in the future weeks and months. Stay informed and participate through written and public oral comment to protect your interests in the administrative record. Contact a member of the Rhoades McKee team for assistance.
• Stay healthy! Above all, do everything in your power to protect public health and safety.

The full-service team at Rhoades McKee has the skill, experience, and relationships to guide you through the administrative process and remain accessible to help you address current and future needs. If you have any questions, please contact Audrey Patterson.