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A Statute Is the Starting Gun, Not the Checkered Flag in Phase II of Capital Lobbying

“Most of the people in the state of Illinois, and I think this is true across the country,
are much more affected in their daily lives by operation of the administrative and executive part of government than they are by 90 percent of the bills [of] the General Assembly.”
Former Illinois Governor Dan Walker [1]

The inexperienced assume that once the legislature enacts a law then capital lobbying is over. They imagine the implementing agency dutifully filling the technical gaps administratively necessary to make the statute work. However, to the contrary, lobbying is not over. It just moves across town to the offices of the executing agency.

In this article we will discuss agency:

  • Execution of statutes
  • Menu of administrative options
  • Extra-legal powers

Execution of statutes
“The execution of laws is more important than the making of them.”
Thomas Jefferson

You don’t have a law until the agency says you have a law. And you don’t know what a law means until the agency tells you what it means. Agencies tell you when you have a law and what it means by how they execute a law.

However, when agencies execute laws they may do so in ways that carry out the agency’s agenda, not necessarily the legislature’s nor your interests. Their agenda is a mixture of politics and agency mission. Via their chosen style of execution, agencies give themselves a “second-bite” at the lawmaking apple to get what they didn’t get from the legislature or taking away what lawmakers gave you.  And short of being able to execute or imprison a regulated party, agency actions are every bit as much law as are statutes from which they are drawn. Their agenda may be as broad as rewriting the statute or as tailored as declaratory orders.

To illustrate an agency rewriting a statute consider this experience. After much lobbying, intra-industry negotiation arbitrated by the committee chair, and many flights to the capital, the legislature enacted an industry dream bill. All we needed to make our dream law into reality were the right rules from the Department of Natural Resources (DNR) as the implementing agency. During the rule adoption hearing, agency staff were constantly checking their watches and yawning. Finally, the presiding agency staffer in frustration said to us, “Industry can you hurry this thing up? You see, we’ve already decided what we are going to do but the APA [Administrative Procedures Act] says we have to listen to you anyway. So can you hurry this up?” In the end, DNR adopted a rule that diminished what the legislature gave us and gave itself what the legislature didn’t.

Menu of administrative options

Let’s overview agency options for implementing a statute, specifically as applicable to your principal. We start with the simple and informal and progress to the stringent and enforceable. Agency options include:

  • Custom
  • Entity-specific private law
  • Decrees
  • Adjudication
  • Case law
  • Rulemaking
  • Attorney general advisory opinions

Custom:  Agency practice makes unofficial laws; informal laws that we can call custom. As an agency inspector myself and later as a compliance manager for an electric utility, I found that regulated parties generally do what agency staff request because it’s cheaper and faster to just give the agency what it wants rather than being trapped in agency bureaucracy or face increased enforcement scrutiny. Further, in the normal human dynamic, a good relationship with the district office can lead to agency enforcement discretion favoring a collaborative regulated interest. This is similar to a police officer in a traffic stop weighing which infractions to charge either a respectful or combative driver.

Entity-specific private law: This occurs when agencies grant licenses for a regulated activity or issue licenses (by rule or individual-specific) to operate facilities with provisos tailored to the permittee’s particular operations, site conditions, or past behavior. For example, in Minnesota killing cormorants is generally illegal but, “Dealers are allowed to shoot cormorants at their facilities under the Aquaculture Depredation Order when this becomes an issue.”[2]

Decrees: Agency declaratory decrees (also called a declaratory judgment, statement, or order) interpret how a law or application thereof impacts a particular party’s set of facts. While a particular decree binds only the department and petitioner, the decree itself becomes a precedent for future agency actions.

Adjudication: An agency ruling on an administrative complaint or rule challenge by an affected party becomes precedent as part of the body of agency law. Adjudication may be by staff, in-house hearing officer, or administrative law judge working for the state’s division of administrative hearings.

Case law: This is judge-made law by a district or appeals court in disposing of agency litigation. Case law leads to administrative law when to settle litigation an agency agrees to promulgate agency rules that satisfy an opposing litigant. Or rules may be enacted judicially through content-heavy court-approved settlement decrees, known as sue-and-settle rulemaking.[3]

Rulemaking: Agencies legislate administrative law, that is, regulations or rules. From one page of broad legislature-made law, agencies can make ten pages of highly detailed administrative law, inserting details of execution that in effect can revise the statute. The rulemaking process gives regulated interests their greatest opportunity to effect favorable implementation of a statute. It’s also the best chance for those who lost in the legislature to get from the agency what the legislature wouldn’t give them, including reversing your legislative victory.

Attorney general advisory opinions; While not binding, advisory opinions are persuasive authority for the courts and agencies in the execution of a statute.

Extra-legal powers

The process is the punishment, the imbalance between public and private resources, and judicial and legislative deference to agency actions taken under color of authority are extra-legal powers that discourage regulated parties from resisting agency demands. The net result is free-rein to agencies in imposing even over-the-top demands of regulated parties.

Regulators and regulated know that when dealing with agencies, the process is the punishment. To illustrate, a Lobby School student underwent heightened agency scrutiny, according to him, due to a business competitor’s charges of mis- and malfeasance. In addition to formal complaints, these kinds of charges flow from agency “hotlines” allowing anonymous accusations of wrongdoing.

He recently texted me, “After five years of investigation, they [agency investigators] found no rules were broken, no laws violated, and not one penny missing.” Although the initial complaint was found to be without merit, a sort of “declared innocent,” he went through years of stress and untold dollars defending himself.

Lobby School students, both the regulator and regulated, have reported similar occurrences by them and to them. To avoid undergoing an agency investigation, such as his, a regulated party will acquiesce to agency demands, even those beyond that clearly authorized by law.

Many regulated parties do not have the financial resources to overcome the imbalance between their resources and those of the state. A Lobby School student reported that in a rulemaking challenge his association won every litigation skirmish, but in the end, lost the war. They surrendered because even his household-name state chapter was drained financially for a pyrrhic victory.[4] And as noted above in Custom, for even those with resources, the threat of becoming entangled in agency enforcement bureaucracy is enough for regulated parties to just give the agency what it wants.

Further, when considering resisting agency demands, a regulated party must consider that in light of the legislatively assigned agency mission and superior agency technical expertise, courts[5] and legislatures give agencies the rebuttable presumption of correctness when carrying out their duties taken under the color of agency authority. Attempting to rebut that presumption can be so difficult and expensive that regulated parties simply capitulate.

The right advice for your principal

Experienced advocates realize that after enactment of the statute the good advice they have for their principal is:

As to lobbying, a statute is the starting gun, not the checkered flag. This is because agencies make 90 percent of the body of law and in making law they can take away what the legislature gave you or give what the legislature wouldn’t. In other words, “The execution of laws is more important than the making of them.”

Right-time/right-place lobbying, specifically in rule promulgation and enforcement relationship-building, may influence how agency enforcement will impact your principal’s interests. This demands your principal’s involvement not only in the capitol, but also in the capital, and in the field.

While you can’t make agencies do anything, you might convince them to do something favorable or at least less harmful to your principal. Convincing agencies to adopt administrative rules that benefit your principal is the topic of Guide to Executive Branch Agency Rulemaking: Policy, Procedure, Participation and Post-Promulgation Appeal.

 

 [1] Muchmore, Lynn R. and Thad L. Beyle, eds. “Being Governor: The View from the Office,” (Durham, NC: Duke University Press, (1983), 126.
[2]“Double-crested cormorant,” MN DNR (accessed October 5, 2021) https://www.dnr.state.mn.us/birds/doublecrestedcormorant.html.
[3] “Sue and settle (sometimes hyphenated as sue-and-settle) is a term used to describe cases in which a federal agency is sued by an interested party, declines to defend itself in court, and negotiates a settlement with the plaintiff in a non-adversarial process. Through sue and settle, outside groups sue an agency in order to reach a settlement on terms favorable to the regulatory goals of both. These settlements may require the agency to issue a rule on a particular subject or within a certain timeline.” “The Deep State Project,” Ballotpedia (accessed October 4, 2021) https://ballotpedia.org/Sue_and_settle.
[4] Pyrrhic victory, “a victory or goal achieved at too great a cost.” Dictionary.com (accessed October 6, 2021)  https://www.dictionary.com/browse/pyrrhic-victory.
[5] “Judicial deference is the condition of a court yielding or submitting its judgment to that of another legitimate party, such as the executive branch in the case of national defense.” Wikipedia (accessed October 6, 2021)
https://en.wikipedia.org/wiki/Judicial_deference#:~:text=Judicial%20deference%20is%20the%20condition,the%20case%20of%20national%20defense.

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