The Rise and Fall of “Reg Neg” in the United States

Under the Administration Procedure Act (APA), regulatory agencies are required to go through notice-and-comment rulemaking in promulgating regulations, and then subject its final regulation to judicial review if one or more party seeks to challenge the rule. This federal rulemaking procedure caused delays, costs and inefficiencies, and eventually resulted in the “ossification” of rulemaking. Negotiated rulemaking entered the limelight in the late 1980s and early 1990s as a promising alternative to conventional rulemaking procedures for federal agencies to address the ossification problem. Negotiated rulemaking is based on the idea that it would be more efficient and productive to have the parties seek to reach a consensus up front and forego all the subsequent dispute. Congress adopted the Negotiated Rulemaking Act (NRA) in 1990 that supported and outlined the process for agencies that opt to use it. The flaw of the conventional rulemaking procedure is that it is slow, inconvenient and time-consuming. Regulatory negotiation was expected to provide a more efficient, streamlined regulatory process that would produce better rules faster, and the rules would be subject to less litigation. However, it did not revolutionize regulation for the better, or even have a substantial impact, as it was expected. In addition, both of The Environmental Protection Agency (EPA) and Department roteducation (DOe) reported some failure cases. It means that regulatory negotiation may not work as theoretically expected. Several conditions are required for regulatory negotiation to be effective. First, all affected interest must have an opportunity to participate in the rule formulation process. Second, not only must all interested parties participate in the negotiations, they must negotiate in good faith. Third, the issue should be ready and appropriate for negotiation meaning that the subject matter have to be sufficiently developed and narrow enough in scope that the parties can realistically resolve it. If these prerequisites for successful negotiation are met, regulatory negotiation may still be an opportunity for agencies to slightly improve the slow, expensive, and ineffective conventional system of regulation.