Federal Agency Guidance and the Power to Bind: An Empirical Study of Agencies and Industries

Abstract

The typical federal agency issues a vast amount of guidance, advising the public on how it plans to exercise discretion and interpret law. Under the Administrative Procedure Act (APA), the agency must follow onerous procedures to issue full-blown regulations (including notice and comment) but can issue guidance far more easily. What justifies this difference, in the familiar telling, is that guidance is not binding in the way regulations are. Agencies are supposed to use guidance flexibly. But critics claim that agencies are not flexible-instead they follow guidance rigidly and thus pressure regulated parties to do the same. If true, this claim means agencies can issue de facto regulations simply by calling them guidance, threatening to make a dead letter of the APA 's constraints.