Standing Committee Symposium on The Role of Private Institutions in Public Environmental Decisionmaking: Negotiated Rulemaking: A. Negotiated Rulemaking: An Overview

Philip J. Harter

Philip J. Harter is an attorney in private practice in Washington, DC.

Four or five years ago, I tried to fit the time into my schedule to write an article on the possibility of negotiating regulations. I figured that no one would ever take it seriously, and that I would then move on to the practice of law. Today, I am still trying to escape and move on to the practice of law: People did take the idea seriously; many seminars have been held to discuss the concept, and several agencies have used the process. I think it has been established as a viable alternative to traditional notice-and-comment or hybrid rulemaking.

I came to the concept of negotiated rulemaking through the confluence of two backgrounds. One was looking at technical regulation, largely on behalf of the Occupational Safety and Health Administration (OSHA). There were a tremendous number of highly complicated, voluntary technical standards out there, developed in the private sector, that were well beyond OSHA's competence to develop and keep current. It did not have the staff or the resources. It had to find a way of harnessing some of that expertise that existed in the private sector.

Another influence in my background was regulatory reform. Let me describe how those two things came together.

One of the difficulties in the highly complicated rulemakings of environmental and health and safety regulation is that there is almost always a great fight over records. Everybody throws information in, and then arguments are flung back and forth.

There was also a great disquiet over the rulemaking process. It was not working well. From the agency perspective, it was slow, and it was expensive. The private sector was displeased as well.

I tried to see whether there was any reasonable prospect for getting people together to come up with a consensus on a proposed rule. I started talking to people in an effort to find some examples of rules that had been negotiated. They laughed and smiled knowingly. Of course, every rule is negotiated. Party A would come in and talk to the agency administrator; party B would do the same, and party C; and then A would come back. It was really more of a brokering than any kind of negotiation. It was rare — virtually non-existent — that parties actually sat down together in up-front rulemaking conferences to try [17 ELR 10246] to work out a solution.

I therefore had to look for some analogies. Perhaps the best one was in the settlement of lawsuits challenging rules. Quite often, the result of such a settlement was an agreement by the agency to publish a new notice of the proposed rulemaking, largely with the concurrence of everybody involved. After looking at a dozen or more of these settlements, I noticed that in almost every case there was very little comment following the notice of proposed rulemaking. The reason was that the interested parties had agreed to the proposed rule. I found one monumental mistake, however. In one case, there were 450 comments, in a big stack. Somebody had not been at the table at the right time. There is a great value, then, to going through the full rulemaking process after a consensus is reached.

Let's look at what happens in the settlement of these lawsuits. One important thing is that the parties are known. The people who sued, or intervened — cared enough to get involved legally — are there. The issues are crystalized. They are the ones at stake in the litigation. Those that are undisputed fall by the wayside during the course of the proceedings. Each party, including the agency, recognizes that it cannot unilaterally control the outcome. There will be a court decision. Each party can try its best to prevail in the negotiations, but in the end no party has control. One can keep asking for continuances and postponements, but sooner or later the court is going to put down the screws, and there will be a deadline. There is some incentive, therefore, to get together and work it out together — only by cooperating does any party have control over the outcome by actually making the decision; intransigence wins only the roulette of the judge's decision (which is not to say that that is not vital when the important factor is establishing a legal precedent).

How can this process be replicated, in an up-front negotiation without having to go all the way through the rigorous court process? By an adult version of the children's game of telephone. Begin with one party (I've always started with the agency) and go talk to them. The questions to ask of the agency are: What are the issues involved in the regulation? Who are the parties that are likely to be important? Who is likely to want to be there? Who wants to be kept informed? Who can blow it out of the water if they are not there? Who will be affected? You try to get an understanding of what is going on.

Then, go and talk to the people who have just been identified and ask them the same questions. With luck, the circle will close relatively quickly. It is surprising how quickly you can usually get consensus on those issues.

There a few important criteria. First, there should be a relatively finite number of parties. Despite our differences, both Larry Susskind and I would probably agree that there should be fewer than 100. I say that there should be between 15 and 25, and he will argue for twice that number. There must be a limit, however.

The interests must lend themselves to the selection of individuals who can represent them at the table. At times, the concerned people are so scattered that it is impossible to select representatives.

The subject of the negotiation must be ripe for discussion. There must be an identifiable issue that can be placed on the table and wrestled with. People often have difficulty anticipating issues.

There should be a realistic deadline. If possible, it should come from a statutory prescription or directly from the agency ("If you guys don't agree in six months we're going to go do it ourselves.") In general, parties will talk a lot at first, then discussions will be gradually compressed, and a good deal will be accomplished in the final few days.

It is essential that no party be asked to give up on a fundamental issue, something that goes to the core of the organization's basis.

As in a judicial settlement, it is important that the outcome be in doubt. Each party must have some ammunition. It could be access to Office of Management and Budget (OMB) or Congress; it could be the facts; it could be the politics; it could be the law. Where all sides appear to have clout, there is a reason to negotiate.

Lastly, the agency itself, through a senior official, must be interested and willing to use this process to develop regulations. It is pointless to invest the time, effort, and expense of trying to come to agreement if the agency might walk away from it.

The goal is to reach a consensus, which means that each interest is somehow represented in the final agreement. The parties may not be delighted with the result, but they should feel that it is acceptable. And the agreement itself is often not the final step. At times there will be no agreement at all, in part because the agency plans to enact a rule that is merely informed by the discussions that took place.

If the conditions for a negotiation are met, public notice should be given in the Federal Register telling the world: We are planning to do it; here are the interests; here are the issues. If any party thinks they will not otherwise be adequately represented, apply to come in and participate. In each regulatory negotiation that I can recall, parties have indeed come in and said that they wanted to participate in addition to those selected through the convening process.

Next, an advisory committee is convened. The Federal Advisory Committee Act (FACA)¹ requires open meetings in the plenary session, something that at first caused me great concern. The public should not be there, I was told. Openness has not proved to be the sort of inhibiting factor that I initially supposed. An opinion by the D.C. Circuit² says that subcommittees can meet in caucuses, and subcommittee caucuses need not meet openly so long as they do not make committee decisions. In this way, individual groups can work out their differences in private before the meetings go public.

What is nice about FACA is that it provides a mechanism for paying the expenses of the enterprise.

Next, a one or two-day meeting per month is held over perhaps a six month period. Some meetings are run by facilitators. At others, mediators meet frequently with the parties in between sessions to work out tentative agreements on defining issues, so that the parties can focus specifically on what divides them at the public meetings.

I would like to close with an example of a negotiated rulemaking, which took place at the Federal Aviation Administration (FAA). The FAA's standard for flight duty status dated back to the late 1940s, when most of the pilots were 28 year olds, fresh out of the Second World War, flying two-engine prop planes. Now the same guys are 60-65, flying 747's in a very different world. The standard, however, was the same. The FAA had long sought to update it, and had issued a thousand pages about who could take a nap and when. Each attempt by FAA to solve the problem was shot down by some interest or another.

Somewhat in desperation, the FAA Administrator got 25 people together to negotiate. A vast range of problems and [17 ELR 10247] ideas crossed the table, but no agreement was reached. One of the participants later said that the most productive part of that discussion was the posing of choices between evils. Somebody would put out a proposal and say: We propose A and B. In response, the other participants would say: "A is absurd." What that tells you is that if we're going to work with anything, it will have to be B, — and it probably is fairly acceptable.

In the end, the group addressed the FAA: You've heard everything we've said. Go off and write a rule consistent with it. And the FAA did. Not only did the FAA promulgate a final rule, but the rule itself generated scant comment and no lawsuit. For the first time in 30 years, they were successful.

1. 5 U.S.C. App. 2, § 1 et seq.

2. National Anti-Hunger Coalition v. Executive Committee et al., 711 F.2d 1071 (D.C. Cir. 1983).