Professor Sean J. Griffith wrote a piece for the Yale Journal on Regulation concerning governance through guidance.
Inhabitants of the administrative state who are concerned about the rule of law may be comforted by the fact that there are rules about making rules. The Administrative Procedure Act (“APA”) requires regulatory agencies to expose prospective rules to democratic processes, most notably the notice and comment period, before they become binding. “Guidance” – regulatory pronouncements issued in the form of advisory manuals, policy statements, interpretative letters, FAQs, and so on – is exempted from these processes. Yet guidance often has the same effect as rule-making. Although technically non-binding, guidance is frequently viewed as binding by regulated entities. The result is a massive loophole in the APA. Agencies’ authority is unconstrained by democratic processes as long as they issue regulatory pronouncements as guidance rather than rules.