Legal Sidebari
Responses to Midnight Rulemaking:
Legal Issues
January 21, 2021
Hours after President Joe Biden took office on January 20, 2021, the White House issued a memorandum
directing agencies to take action with respect to regulations that the Trump Administration issued shortly
before the transition. It is common for federal agencies to increase rulemaking activity during the final
months of a presidential administration—a phenomenon commonly known as “midnight rulemaking.”
Since Election Day, November 3, 2020, agencies in the Trump Administration issued final rules
governing immigration adjudication proceedings; the construction, operation, and maintenance of gas
pipelines; rebates under Medicare Part D; and a host of other subjects. Federal agencies also published a
number of proposed rules that have not yet been finalized.
Since President Reagan took office in 1981, incoming presidential administrations have routinely taken
measures to respond to a prior administration’s midnight rulemaking activities. This Sidebar explains how
the Biden Administration may confront the bevy of rules recently finalized or proposed by the Trump
Administration—including rescinding rules that have already taken effect, and suspending the effective
dates of rules that were finalized by the prior Administration but which had not yet become legally
effective—and how courts generally have responded to challenges to an agency’s rescission or
postponement of a final rule. This Sidebar also addresses actions Congress could take to rescind or
prevent the implementation or enforcement of midnight rules with which it disagrees.
Incoming Presidential Responses to Midnight
Rulemaking
Critics have objected to the midnight rulemaking phenomenon on a variety of grounds, but condemnation
of the practice is not universal. Objections have been based on, among other things, the belief “that the
outgoing administration is illegitimately attempting to project its agenda beyond its constitutionally
prescribed term,” that rules “rushed” through the administrative process may suffer in quality, and that
incoming presidential administrations must spend an otherwise unnecessarily significant amount of time
and resources upon entering office in reviewing and potentially responding to the prior administration’s
midnight activity. Notably, however, a 2012 report commissioned by the Administrative Conference of the
United States concluded that “the overwhelming majority” of rulemaking that occurs during an
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administration’s final months “appears to be the result of simple hurrying to finish tasks that would
inevitably be delayed or derailed by the transition in presidencies.” The report acknowledged, however,
that the practice “puts the new administration in the awkward position of finding it necessary to review a
substantial corpus of rules and other actions to ensure quality and consistency with the new
administration’s policies.”
New presidential administrations have deployed several strategies for the stated purpose of giving
agencies an opportunity to review new or pending rules. These include directing agencies to:
(1) refrain from sending any proposed or final rules to the Office of the Federal Register (OFR) for
publication in the Federal Register;
(2) withdraw from OFR any proposed or final rules that have not yet been published in the Federal
Register; and
(3) postpone or consider postponing for 60 days the effective dates of rules that have been published
in the Federal Register but that have not yet taken effect.
Such directives often exempt rulemakings responding to emergencies “or other urgent circumstances”
(such as those concerning health or safety), as well as rulemakings subject to deadlines imposed by statute
or court order.
On January 20, 2021, the Biden Administration issued a memorandum directing agencies to take the types
of actions described above with regard to the Trump Administration’s midnight rulemakings. With respect
to rules that have been published or issued but have not yet taken effect, the memorandum directs
agencies to consider postponing the rules’ effective dates for 60 days “for the purpose of reviewing any
questions of fact, law, and policy the rules may raise.” The memorandum further directs agencies to
consider opening a 30-day comment period during the postponement to allow interested parties to provide
comments about issues raised by those rules, and to consider delaying rules beyond the 60-day period
where necessary to continue to review questions associated with the rules.
The Biden Administration’s memorandum applies not only to “rules” and “regulatory actions,” but to
guidance documents, which are defined as “any agency statement of general applicability and future
effect that sets forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statutory
or regulatory issue.” The Trump Administration similarly directed agencies to apply its midnight
rulemaking directives to what it defined as “guidance documents” issued during the waning days of the
Obama Administration.
In addition to this memorandum, the Biden Administration issued other directives concerning agency
rulemaking. For instance, one executive order titled “Protecting Public Health and the Environment and
Restoring Science to Tackle the Climate Crisis” directed agencies to review all actions taken at any time
by the Trump Administration that “are or may be inconsistent with, or present obstacles to” the new
administration’s scientific and environmental policy objectives. The executive order also identifies
several rules, many of which were finalized well before the change in administration, that agencies should
consider proposing to suspend, revise, or rescind within a specified time frame. Other new executive
orders more generally call on agencies to pursue actions that may depart from those taken in the prior
administration in areas such as immigration and civil rights, and which could necessitate a review or
reconsideration of rules issued on those topics during the Trump Administration. Still other orders seek
more general changes to the rulemaking process, including through the revocation of earlier executive
orders by the Trump Administration addressing the subject.
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Relevant Legal Principles
Understanding how an incoming administration may address midnight rules requires an understanding of
how agencies promulgate such rules in the first instance. Agencies issue rules in many forms, each subject
to different requirements. Rules intended to have legal effect typically take the form of “legislative rules,”
issued pursuant to authority delegated by Congress. To take effect, these rules must typically undergo the
“informal rulemaking” process set forth in the Administrative Procedure Act (APA). Agencies engaging in
that process generally first must publish a notice of proposed rulemaking in the Federal Register and
allow members of the public an opportunity to submit comments on the proposed rule. The final rule
generally must be published in the Federal Register at least 30 days before the rule becomes effective.
Only a subset of agency rules are required to undergo notice-and-comment rulemaking proceedings under
the APA, however. And the APA provides various exceptions with respect to the categories of rules that
are subject to those procedural requirements. Rules that implicate military or foreign affairs functions;
agency management or personnel; or public property, loans, grants, benefits, or contracts are exempt from
the APA’s notice-and-comment and delayed effective-date requirements. The APA also exempts
interpretative rules, general statements of policy, and rules of agency organization, procedure, or practice
from the statute’s notice-and-comment procedures. An agency also may bypass notice and comment when
it “for good cause finds . . . that notice and public procedure thereon are impracticable, unnecessary, or
contrary to the public interest.” Finally, the APA’s delayed effective-date requirement includes exceptions
of its own. In particular, the requirement that a rule be published in the Federal Register at least 30 days
before it becomes effective does not apply (1) to “a substantive rule” that removes a restriction or
provides an exemption, (2) to interpretive rules or policy statements, or (3) when an agency finds there is
“good cause” for the rule to take immediate effect.
A new administration typically may amend or repeal a rule the previous administration has issued. The
APA includes amendment and repeal in its definition of “rule making,” thus requiring that agencies
comply with applicable requirements not only when issuing a new legislative rule, but also when altering
or rescinding such a rule. Agencies therefore normally must follow notice-and-comment procedures when
amending or repealing legislative rules, but not when amending or repealing an interpretive rule, general
policy statement, or procedural rule.
A new administration also may take action with respect to midnight rules that have not yet taken effect.
First, an agency generally may withdraw a rule in the period of time between when the agency has
transmitted the rule to OFR, and when OFR would publish the rule. But an agency may not withdraw a
rule where it has a nondiscretionary legal responsibility to publish the rule in the Federal Register (e.g.,
when required to do so by statute).
Additionally, an agency can postpone or suspend the effective date or compliance deadlines of a midnight
rule that has already been published and which has not yet taken effect. Courts have uniformly held that
suspension is normally tantamount to an amendment or repeal of a rule. The APA’s procedural
requirements for rulemaking, including for notice and comment, apply with equal force to rule
suspensions, unless an agency can satisfy the APA’s “good cause” exception or another relevant
exception. Although agencies may postpone rules in order to give a new administration an opportunity to
review not-yet-effective regulations issued by the prior administration, the decision to reconsider a rule
does not automatically authorize an agency to postpone a rule pending reconsideration indefinitely. Courts
have pointed out that applying the APA’s rulemaking requirements to rule suspensions prevents agencies
from effectively repealing a final rule by delaying it “while sidestepping the statutorily mandated process
for revising or repealing that rule on the merits.”
In some instances, agencies implementing an incoming administration’s regulatory moratorium have
postponed the effective dates of rules without adhering to the notice-and-comment or delayed effective-
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date requirements. Notably, in such instances the postponements have been relatively short, and the time
required for notice and comment would extend past the rule’s effective date. For example, in January
2017, the Environmental Protection Agency (EPA) invoked the “good cause” exception to bypass those
requirements when it postponed for 60 days the effective dates of 30 rules pursuant to the Trump
Administration’s directive to postpone temporarily all published regulations that had not yet taken effect.
In light of the imminent effective dates of the rules, EPA explained that it would have been impractical
and “contrary to the public interest in the orderly promulgation and implementation of regulations” to
seek public comment prior to postponing them.
Finally, pursuant to Section 705 of the APA, an agency may postpone a rule’s effective date, without
providing notice and an opportunity for public comment, if the rule is pending judicial review and “an
agency finds that justice so requires.” The purposes of a Section 705 stay is not to amend or repeal a rule
but to maintain the status quo while litigation proceeds. While case law on agencies’ use of Section 705 is
limited, district courts have generally allowed agencies to invoke Section 705 only to postpone rules that
are not yet in effect, rather than compliance dates subsequent to the rule’s effective date.
Actions to amend, repeal, or postpone published legislative rules are subject to judicial review. The APA
directs courts to invalidate rules that are governed by that statute if they, among other things, are
“arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” The “arbitrary and
capricious” standard requires that an agency “must examine the relevant data and articulate a satisfactory
explanation for its action including a rational connection between the facts found and the choice made.”
The APA’s arbitrary and capricious standard applies both when an agency issues a rule and when it
rescinds an earlier rule. The Supreme Court has affirmed that agencies must supply a “reasoned analysis”
when changing course. Generally, an agency must explain its departure from its prior regulatory
approach, address prior factual findings that contradict those underlying the new policy, and consider
“serious reliance interests” that are affected by a change in policy.
In sum, the scope of the Biden Administration’s ability to review midnight rules may depend on the
nature of the rule and whether it has been published or taken effect. Agencies have considerable flexibility
to withdraw rules before publication or briefly to postpone effective dates of published rules. But if an
agency issued a rule pursuant to the APA’s notice and comment procedures and the rule has already taken
effect, the new administration generally must adhere to the same procedural requirements to amend or
repeal the rule that the agency followed when it originally promulgated the rule. Additionally, longer
postponements may also be subject to the APA’s notice and comment and delayed effective-date
requirements unless an agency can satisfy a relevant exception.
Considerations for Congress
In addition to actions by administrative agencies to overturn midnight rules, Congress has a number of
options available to it for rescinding or preventing the implementation or enforcement of midnight rules
with which it disagrees. Administrative agencies are creatures of statute and only exercise authority that
has been delegated to them by Congress. Just as Congress may, by statute, authorize or require an agency
to issue rules, it also may directly reject a rule through the normal legislative process. Congress can also
require an agency to rescind or alter a rule by amending the underlying statute granting rulemaking
authority to the agency. Thus, Congress can by statute overturn a recently issued midnight rule.
Congress also, via application of its legislative power, may use the expedited procedures provided by the
Congressional Review Act (CRA) to overturn a presidential administration’s midnight rule. Under the
CRA, an agency must submit a covered rule to Congress before the rule may go into effect and, once
submitted, Congress can use special, fast-track procedures to consider a joint resolution of disapproval of
the rule. If a joint resolution is enacted either by presidential signature or congressional override of a
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presidential veto, the relevant rule “shall not take effect (or continue).” An agency is prohibited from
reissuing a rejected rule “in substantially the same form” or from issuing “a new rule that is substantially
the same,” unless the “rule is specifically authorized” under a subsequently enacted law. Generally, to be
eligible for the CRA’s fast-track procedures in the Senate, the Senate must act on a disapproval resolution
within 60 session days of the rule’s submission. However, if Congress adjourns its annual session sine die
within 60 session days of the Senate or 60 legislative days of the House of Representatives after an
agency submits a rule to Congress, the time period during which Congress must submit and act on a joint
resolution of disapproval under the CRA starts over, allowing Congress to overturn a prior presidential
administration’s midnight rules in the first few months of a new administration. This “lookback
mechanism” may increase the effectiveness of the CRA as a tool for congressional oversight of midnight
rules, because an incoming administration may be less likely to veto a joint resolution of disapproval of a
rule it did not itself issue. (For an overview of the CRA, including its procedures, see CRS Report
R43992, The Congressional Review Act (CRA): Frequently Asked Questions, by Maeve P. Carey and
Christopher M. Davis.)
Congress can also prevent an agency from implementing or enforcing a recently issued midnight rule
through exercise of its authority over appropriations. In addition to allocating money for agency
operations and activities, Congress also is authorized, as the Supreme Court has recognized, to
“circumscribe agency discretion to allocate resources by putting restrictions in the operative statutes.”
Congress can, therefore, use its power of the purse to prevent operation of a midnight rule.
Additionally, Congress may enact legislation to address the general procedures for midnight rulemaking
and congressional review of midnight rules. For example, in the 114th Congress, the proposed Midnight
Rule Relief Act (H.R. 4612 and S. 2582) would have prohibited agencies from proposing or finalizing
“significant rules,” with limited exceptions, in the period between a presidential election and Inauguration
Day in years when there is a lame duck president. Some Members have also introduced bills to amend the
CRA to enable Congress disapprove a group of rules together, as opposed to the current process for
considering a single rule at a time. Accordingly, Congress could both curtail the ability of agencies to
issue midnight rules, and facilitate its own disapproval of such rules through the CRA.
Author Information
Daniel J. Sheffner
Kate R. Bowers
Legislative Attorney
Legislative Attorney
Disclaimer
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