Amicus Curiae Brief — The School of the Ozarks, Inc., dba College of the Ozarks, Petitioner v. Joseph R. Biden, Jr., President of the United States, et al.

No. 22-816

In the Supreme Court of the United States

__________

THE SCHOOL OF THE OZARKS, INC. D/B/A COLLEGE OF

THE OZARKS,

Petitioner,

v.

JOSEPH R. BIDEN JR., IN HIS OFFICIAL CAPACITY AS

PRESIDENT OF THE UNITED STATES, ET AL.,

Respondents.

__________

On Petition for Writ of Certiorari to the

United States Court of Appeals for the Eighth Circuit

__________

BRIEF OF THE CATO INSTITUTE, ETHICS

AND PUBLIC POLICY CENTER, NATIONAL

FEDERATION OF INDEPENDENT BUSINESS

SMALL BUSINESS LEGAL CENTER, INC.,

REASON FOUNDATION, TAXPAYERS

PROTECTION ALLIANCE, AND MANHATTAN

INSTITUTE AS AMICI CURIAE IN SUPPORT

OF PETITIONER

__________

Rachel N. Morrison

Eric N. Kniffin

ETHICS & PUBLIC POLICY

CENTER

1730 M Street, N.W.

Suite 910

Washington, D.C. 20036

Clark M. Neily III

Counsel of Record

Thomas A. Berry

Gregory J. Mill

CATO INSTITUTE

1000 Mass. Ave., N.W.

Washington, DC 20001

(202) 425-7499

cneily@cato.org

(Additional Counsel Listed on Inside Cover)

Elizabeth Milito

Rob Smith

NFIB Small Business

Legal Center

555 12th St., NW

Suite 1001

Washington, DC 20004

March 30, 2023

Ilya Shapiro

Manhattan Institute

52 Vanderbilt Ave.

New York, NY 10017

i

QUESTION PRESENTED

Whether a notice-and-comment violation, on its

own, can establish Article III standing for a regulated

entity within the applicable zone of interests.

ii

TABLE OF CONTENTS

QUESTION PRESENTED ........................................... i

TABLE OF AUTHORITIES ....................................... iii

INTEREST OF AMICI CURIAE ................................. 1

INTRODUCTION AND SUMMARY OF

ARGUMENT ................................................................ 4

ARGUMENT ................................................................ 7

I. THE

PETITION

RAISES

AN

IMPORTANT QUESTION ABOUT

WHEN AGENCY EVASION OF THE

NOTICE-AND-COMMENT PROCESS

ESTABLISHES STANDING. ........................... 9

A. The Notice-and-Comment Process

Affords Interested Persons a Fair

Process and a Voice. .................................. 10

B. The Notice-and-Comment Process

Benefits

Interested

Persons

by

Improving the Content of Rules. ............... 12

C. Rules That Are Created Without

Notice-and-Comment

Impose

Compliance Costs on Regulated

Entities. ...................................................... 15

II. CERTIORARI IS WARRANTED TO

ENSURE THAT AGENCIES FOLLOW

NOTICE-AND-COMMENT

RULEMAKING WHEN LEGALLY

REQUIRED. .................................................... 18

CONCLUSION .......................................................... 22

iii

TABLE OF AUTHORITIES

Page(s)

Cases

Abbott Lab’ys v. Gardner, 387 U.S. 136 (1967)........... 8

Bloomberg L.P. v. SEC, 45 F.4th 462 (D.C.

Cir. 2022) ................................................................ 12

Christensen v. Harris County, 529 U.S. 576

(2000) ...................................................................... 17

Chrysler Corp. v. Brown, 441 U.S. 281 (1979)

...................................................................... 9, 11, 12

Cmty. Nutrition Inst. v. Young, 818 F.2d 943

(D.C. Cir. 1987) ...................................................... 16

Collins v. Yellen, 141 S. Ct. 1761 (2021) ..................... 7

CSX Transp., Inc. v. Surface Transp. Bd., 584

F.3d 1076 (D.C. Cir. 2009) ..................................... 10

Hewitt v. Comm’r of IRS, 21 F.4th 1336 (11th

Cir. 2021) ................................................................ 12

Home Box Office, Inc. v. FCC, 567 F.2d 9

(D.C. Cir. 1977) .................................................. 9, 10

Jonathan Weinberg, The Right to Be Taken

Seriously, 67 U. Miami L. Rev. 149 (2012)

................................................................ 9, 11, 13, 14

Lujan v. Defenders of Wildlife, 504 U.S. 555

(1992) ........................................................................ 8

Massachusetts v. EPA, 549 U.S. 497 (2007) ............... 8

Mathews v. Eldridge, 424 U.S. 319 (1976)................ 13

Motor Vehicle Mfrs. Ass’n v. State Farm

Mutual Auto. Ins. Corp., 463 U.S. 29 (1983) ......... 14

iv

N.C. Growers’ Ass’n v. United Farm Workers,

702 F.3d 755 (4th Cir. 2012) ............................ 10, 11

NFIB v. OHSA, 142 S. Ct. 661 (2022) ....................... 20

Seila Law LLC v. CFPB, 140 S. Ct. 2183

(2020) ........................................................................ 8

Shell Oil Co. v. EPA, 950 F.2d 741 (D.C. Cir.

1991) ....................................................................... 11

Summers v. Earth Island Inst., 555 U.S. 488

(2009) ........................................................................ 8

Tex. Sav. & Cmty. Bankers Ass’n v. Fed.

Hous. Fin. Bd., 201 F.3d 551 (5th Cir. 2000) ........ 16

United Keetoowah Band of Cherokee Indians

in Okla. v. FCC, 933 F.3d 728 (D.C. Cir.

2019) ....................................................................... 12

United States v. Mead Corp., 533 U.S. 218

(2001) ...................................................................... 17

Statutes

29 U.S.C. 655(c)(1) ..................................................... 20

42 U.S.C. § 3614a ..................................................... 7, 9

5 U.S.C. § 553(b) .................................................. 5, 7, 9

5 U.S.C. § 553(c) ..................................................... 9, 10

Other Authorities

“Implementation of Executive Order 13988 on

the Enforcement of the Fair Housing Act”

(Feb. 11, 2021) ........................................................ 17

Christopher T. Burt, Procedural Injury

Standing After Lujan v. Defenders of

Wildlife, 62 U. Chi. L. Rev. 275 (1995) .................... 8

v

Connor Raso, Agency Avoidance of

Rulemaking Procedures, 67 Admin. L. Rev.

65 (2015) ........................................................... 19, 20

David L. Franklin, Legislative Rules,

Nonlegislative Rules, and the Perils of the

Short Cut, 120 Yale L. J. 276 (2010) ............... 15, 19

Gov’t CA Br., Sch. of the Ozarks, Inc. v.

Biden, 41 F.4th 992 (8th Cir. 2022) (No. 212270) ....................................................................... 15

James R. Copland, The Unelected: How an

Unaccountable Elite is Governing America

(2020) ...................................................................... 19

James Yates, Good Cause Is Cause for

Concern, 86 Geo. Wash. L. Rev. 1438 (2018)

.......................................................................... 11, 20

Jason Webb Yackee & Susan Webb Yackee,

Testing the Ossification Thesis: An

Empirical Examination of Federal

Regulatory Volume and Speed, 1950-1990,

80 Geo. Wash. L. Rev. 1414 (2012) ........................ 21

Jessica Mantel, Procedural Safeguards for

Agency Guidance: A Source of Legitimacy

for the Administrative State, 61 Admin. L.

Rev. 343 (2009) ....................................................... 11

Kristin E. Hickman, Unpacking the Force of

Law, 66 Vand. L. Rev. 465 (2013).............. 10, 12, 14

Kyle Schneider, Judicial Review of Good

Cause Determinations under the

Administrative Procedure Act, 73 Stan. L.

Rev. 237 (2021) ....................................................... 20

vi

Leor Sapir, Regulate Now, Explain Later:

Understanding the Civil Rights State’s

Redefinition of “Sex” (Aug. 2020) ........................... 19

Lisa Schultz Bressman, Beyond

Accountability: Arbitrariness and

Legitimacy in the Administrative State, 78

N.Y.U. L. Rev. 461 (2003) .......................... 14, 15, 18

Mark Seidenfeld, A Civic Republican

Justification for the Bureaucratic State, 105

Harv. L. Rev. 1511 (1992) ...................................... 13

Mark Seidenfeld, Playing Games with the

Timing of Judicial Review: An Evaluation

of Proposals to Restrict Pre-enforcement

Review of Agency Rules, 58 Ohio St. L.J. 85

(1997) ...................................................................... 16

Mark Seidenfeld, Why Agencies Act: A

Reassessment of the Ossification Critique of

Judicial Review, 70 Ohio St. L.J. 251 (2009)

.......................................................................... 14, 21

Mia Costa, Bruce A. Desmarais, & John A.

Hird, Public Comments’ Influence on

Science Use in U.S. Rulemaking: The Case

of EPA’s National Emission Standards,

49(1) Am. Rev. Public Admin. 36 (2019) ............... 14

Robert A. Anthony, Interpretive Rules, Policy

Statements, Guidances, Manuals, and the

Like—Should Federal Agencies Use Them

to Bind the Public?, 41 Duke L.J. 1311

(1992) .................................................................. 5, 16

Ronald M. Levin, Rulemaking and the

Guidance Exemption, 70 Admin. L. Rev.

263 (2018) ............................................................... 16

vii

The Federalist No. 10 ................................................ 13

The Federalist No. 51 ................................................ 13

Todd D. Rakoff, The Choice Between Formal

and Informal Modes of Administrative

Regulation, 52 Admin. L. Rev. 159 (2000) ............ 20

1

INTEREST OF AMICI CURIAE1

Amici are six organizations that have diverse views

and focus on a variety of legal and policy issues. All

either submit public comments on proposed rules as

institutions or employ scholars who have submitted

public comments in their personal capacity. Amici

thus have a strong interest in ensuring that the right

to public notice and comment is preserved for all.

The Cato Institute is a nonpartisan public policy

research foundation founded in 1977 and dedicated to

advancing the principles of individual liberty, free

markets, and limited government. Cato’s Robert A.

Levy Center for Constitutional Studies promotes the

principles of constitutionalism that are the foundation

of liberty. To those ends, Cato conducts conferences

and publishes books, studies, and the annual Cato Supreme Court Review.

Cato has a strong interest in enforcing separationof-powers principles and protecting the right to access

federal court when citizens have been harmed by improper administrative proceedings. Moreover, Cato

scholars frequently submit comments to agencies engaged in notice-and-comment rulemaking. Cato thus

has a strong interest in protecting the right to participate in that procedure.

The Ethics and Public Policy Center (EPPC)

is a nonprofit research institution founded in 1976 and

dedicated to applying the Judeo-Christian moral tradition to critical issues of public policy, law, culture,

1 Rule 37 statement: No part of this brief was authored by any

party’s counsel, and no person or entity other than amici funded

its preparation or submission. All parties were timely notified of

amici’s intent to file this brief.

2

and politics. EPPC’s programs cover a wide range of

issues, including government accountability, judicial

restraint, religious liberty, and personhood and identity.

EPPC has a strong interest in protecting the right

to participate in the agency rulemaking process and in

preserving its own opportunities to help shape public

policy. In recent years, EPPC has become an active

participant in the agency rulemaking process, providing comments on proposed rules and educating others

on how to engage.2 EPPC thus has a strong interest in

protecting its own and others’ rights to participate in

the rulemaking process.

The National Federation of Independent

Business Small Business Legal Center, Inc.

(NFIB Legal Center) is a nonprofit, public interest

law firm established to provide legal resources and be

the voice for small businesses in the nation’s courts

through representation on issues of public interest affecting small businesses. It is an affiliate of the National Federation of Independent Business, Inc.

(NFIB), which is the nation’s leading small business

association. NFIB’s mission is to promote and protect

the right of its members to own, operate, and grow

their businesses. NFIB represents, in Washington,

D.C., and all 50 state capitals, the interests of its members.

NFIB Legal Center has a strong interest in ensuring agencies adhere to the appropriate rulemaking

process. For example, in calendar year 2022, NFIB

submitted 26 comment letters to agencies advocating

on behalf of small businesses in the face of increased

2 See https://eppc.org/engagement-on-agency-actions/.

3

or amended regulatory burdens. NFIB submitted one

petition for agency rulemaking. In 5 of the 26 rules

NFIB commented on, the SBA’s Office of Advocacy

sent letters to the relevant agency identifying flaws in

the agency’s analysis or legal deficiencies in the rule.

By its involvement here, NFIB Legal Center seeks to

maintain the right of regulated entities, like small

businesses, to participate in the rulemaking process.

Reason Foundation is a national, nonpartisan,

and nonprofit public policy think tank, founded in

1978. Reason’s mission is to advance a free society by

applying and promoting libertarian principles and policies—including free markets, individual liberty, and

the rule of law. Reason supports dynamic marketbased public policies that allow and encourage individuals and voluntary institutions to flourish. Reason advances its mission by publishing Reason Magazine, as

well as commentary on its websites, and by issuing

policy research reports. To further Reason’s commitment to “Free Minds and Free Markets” and equality

before the law, Reason selectively participates as amicus curiae in cases raising significant constitutional issues.

The Taxpayers Protection Alliance (TPA) is a

non-profit, non-partisan organization dedicated to educating the public through the research, analysis, and

dissemination of information on the government’s effects on the economy. TPA, through its network of taxpayers, will hold politicians accountable for the effects

of their policies on the size, scope, efficiency, and activity of government. TPA and its staff also seek to educate the public about government transparency and

openness in the United States and around the world.

4

TPA has a strong interest in ensuring the American individuals, organizations, and businesses can

continue to hold government agencies and officials accountable. Public comment periods offered by regulatory agencies are critical to accomplish this task. TPA

has submitted dozens of public comments to agencies,

urging particular action or increased transparency on

the part of government. It is important to TPA’s mission that regulated entities have an opportunity to

provide input and feedback before any regulation is

undertaken.

The Manhattan Institute for Policy Research

is a nonpartisan public policy research foundation

whose mission is to develop and disseminate new ideas

that foster greater economic choice and individual

freedom. To that end, it has sponsored scholarship and

filed briefs opposing laws that interfere with constitutionally protected liberties, delineating the proper procedures for government to follow in issuing regulations, and ensuring that there’s judicial review in both

of these types of cases.

INTRODUCTION AND SUMMARY OF

ARGUMENT

Under the Administrative Procedure Act (APA), if

federal agencies choose to create policy prospectively,

they are typically required to do so through “noticeand-comment rulemaking.” This process guarantees

interested parties an opportunity to influence the development of such rules that have the force and effect

of law.

Of course, there are exceptions. The APA generally

allows agencies to create certain rules without going

through the requirements of notice and comment, such

5

as for “interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice” and when there is “good cause” found that the

normal rulemaking process is “impracticable, unnecessary, or contrary to the public interest.” 5 U.S.C.

§ 553(b). Rules promulgated through the notice-andcomment process are sometimes referred to as “legislative rules,” and those made without such procedures

are called “nonlegislative rules.” See Robert A. Anthony, Interpretive Rules, Policy Statements, Guidances, Manuals, and the Like—Should Federal Agencies Use Them to Bind the Public?, 41 Duke L.J. 1311,

1312–17 (1992). Those exceptions, however, can be superseded by statute. 5 U.S.C. § 553(b).

The Fair Housing Act (FHA) eliminates many, if

not most, of those exceptions for the U.S. Department

of Housing and Urban Development (HUD) when

HUD promulgates rules under the authority of the

FHA. And yet, in response to an executive order by

President Biden, HUD ignored the FHA and issued a

“Directive” in 2021 without notice and comment. That

Directive ordered HUD to change how it enforces the

FHA’s prohibition against sex discrimination in housing. The Directive demands full enforcement against

allegations of discrimination in housing because of

“sexual orientation” or “gender identity.”

In light of the Directive, Petitioner, the College of

the Ozarks, reasonably feared that HUD would require it to reverse its policy of separating residence

halls based on biological sex. For that reason, the College challenged the Directive in court. But the court

below refused to hear the case on the merits, holding

that the College did not have standing.

6

The sole issue before this Court is whether HUD

can avoid judicial review of its decision to ignore the

procedural requirements of the APA and FHA. HUD

argues that its failure to go through notice-and-comment rulemaking in creating department policy set

forth in the Directive did not inflict a cognizable “procedural injury” on the College sufficient to establish

standing, an argument with which the lower court

agreed.

The lower court was wrong. The procedural requirements of notice-and-comment rulemaking are legal obligations and exist for a reason. They hold agencies accountable to the public and foster reasoned decisionmaking. They introduce a democratic element

into administrative processes and create a basis by

which agency rules can be invalidated when they are

“arbitrary and capricious.”

All interested persons, but especially regulated

parties, benefit from this process. The right to noticeand-comment rulemaking is not a bare and meaningless procedural right. When agencies circumvent notice-and-comment rulemaking, it imposes real costs on

parties, and public policy suffers. The violation of that

procedural right is itself sufficient to establish Article

III standing for interested parties, like the College

here.

HUD, like all agencies, might often prefer to avoid

the accountability and deliberation of notice-and-comment rulemaking. And if courts continue to deny judicial review by improperly invoking doctrines of justiciability, agencies will only be more emboldened to skirt

these safeguards. Instead, courts should review such

claims on the merits, and they can do so without

7

unjustifiably burdening the ability of agencies to

promulgate important rules.

As both Petitioner and Judge Grasz (dissenting below) note, “This case highlights the corrosive effect on

the rule of law when important changes in government

policy are implemented outside the normal administrative process.” Pet. at 2. This Court should grant certiorari to ensure that agencies follow the APA’s requirements when making rules and important policy

choices that can affect all aspects of American life.

ARGUMENT

As Petitioner has argued, HUD was required to issue its Directive through the notice-and-comment process outlined in the APA. See 42 U.S.C. § 3614a (requiring HUD to promulgate “all rules” issued under its

jurisdiction through the notice-and-comment process);

5 U.S.C. § 553(b) (establishing the notice-and-comment process for agency rules with limited exceptions).

The court below did not hold otherwise. Instead, the

court held that Petitioner did not have standing to

challenge the denial of the right to submit comment

even if that denial was unlawful. But that decision

misapplied and misunderstood this Court’s standing

doctrine.

To be sure, this Court has held that a plaintiff must

have standing in order to challenge an agency’s directive. Collins v. Yellen, 141 S. Ct. 1761, 1779 (2021).3

But when agencies violate a “procedural right” that is

3 To establish standing, plaintiffs must show that they “suffered an ‘injury in fact’ that is ‘fairly traceable’ to the defendant’s

conduct and would likely be ‘redressed by a favorable decision.’”

Collins, 141 S. Ct. at 1779 (quoting Lujan v. Defenders of Wildlife,

504 U.S. 555, 560–61 (1992)).

8

granted by statute and designed to “protect [a plaintiff’s] concrete interest,” that violation is “special” and

results in relaxed standing requirements. See Lujan,

504 U.S. at 572 n.7 (noting that, for example, such circumstances may not require “meeting all the normal

standards for redressability and immediacy”).

Pre-enforcement challenges, like the one brought

by Petitioner, help guarantee that parties can challenge allegedly unlawful agency rules before incurring

the costs of complying with those rules. See Abbott

Lab’ys v. Gardner, 387 U.S. 136, 153 (1967). When an

agency refuses to follow a legally required procedure,

that “procedural injury” may increase “the risk of future harm to some party.” Christopher T. Burt, Procedural Injury Standing After Lujan v. Defenders of

Wildlife, 62 U. Chi. L. Rev. 275, 85 (1995). That is why,

to establish standing to bring a pre-enforcement challenge, it is enough to show “some possibility” that vacating the rule “will prompt the [agency] to reconsider

the decision” to issue the rule in its current form. Massachusetts v. EPA, 549 U.S. 497, 518 (2007); see also

Seila Law LLC v. CFPB, 140 S. Ct. 2183, 2196 (2020)

(plaintiffs are “not required to prove that the Government’s course of conduct would have been different in

a ‘counterfactual world’ in which the Government had

acted with constitutional authority”).

Far from being a “procedural right in vacuo,” Summers v. Earth Island Inst., 555 U.S. 488, 496 (2009),

the notice-and-comment process mandated by the APA

and FHA protects parties and the general public from

injury. Certiorari here is warranted to protect the interests promoted by the notice-and-comment process

and to clarify that courts must ensure agencies do not

evade legally mandated procedural protections.

9

I. THE PETITION RAISES AN IMPORTANT

QUESTION ABOUT WHEN AGENCY EVASION OF THE NOTICE-AND-COMMENT

PROCESS ESTABLISHES STANDING.

“The legislative power of the United States is

vested in the Congress, and the exercise of quasi-legislative authority by governmental departments and

agencies must be rooted in a grant of such power by

the Congress and subject to limitations which that

body imposes.” Chrysler Corp. v. Brown, 441 U.S. 281,

302 (1979). Congress has granted HUD some statutory

power to promulgate rules. 42 U.S.C. § 3614a. But

when HUD chooses to exercise that power, Congress

has also placed HUD in a “two-way dialogic commitment, in which government decision-makers may not

simply ignore the arguments raised by citizens.” Jonathan Weinberg, The Right to Be Taken Seriously, 67 U.

Miami L. Rev. 149, 150 (2012).

This dialogic requirement is marked by several

well-known procedures under the APA. For instance,

the notice-and-comment rulemaking process includes

a “general notice of proposed rulemaking.” 5 U.S.C.

§ 553(b). To meaningfully alert the public of an expected regulatory action, the notice “must disclose in

detail the thinking that has animated the form of a

proposed rule and the data upon which that rule is

based.” Home Box Office, Inc. v. FCC, 567 F.2d 9, 35

(D.C. Cir. 1977). This is followed by a “comment period,” in which the agency must “give interested persons an opportunity to participate in the rule making

through submission of written data, views, or arguments.” 5 U.S.C. § 553(c). Together, both notice and

the comment period exist “to make criticism or

10

formulation of alternatives possible.” Home Box Office,

Inc., 567 F.2d at 35–36.

At the end of the comment period and “consideration of the relevant matter presented,” any final rule

published in the Federal Register must be a “logical

outgrowth” of the proposed rule. CSX Transp., Inc. v.

Surface Transp. Bd., 584 F.3d 1076, 1079–82 (D.C.

Cir. 2009).4 Further, a final rule must be accompanied

by a “concise general statement of [the rule’s] basis

and purpose.” 5 U.S.C. § 553(c). This requirement includes an obligation “to identify and respond to relevant, significant issues raised during those proceedings.” N.C. Growers’ Ass’n v. United Farm Workers,

702 F.3d 755, 769 (4th Cir. 2012).

These procedures are not mere formalities. The notice-and-comment process facilitates the important

democratic value of allowing interested parties and

the public to participate in deliberative lawmaking.

This participation is critical to the creation of rational

rules that are not “arbitrary or capricious.” And public

participation guards against imposing unnecessary

compliance costs on regulated parties due to harms in

a rule that an agency could have been alerted to.

A. The Notice-and-Comment Process Affords Interested Persons a Fair Process

and a Voice.

The notice-and-comment process provides several

crucial benefits to interested persons during agency

4 The “logical outgrowth” test requires an agency to issue an

additional notice and solicit further comments whenever an

agency “changes its mind about a critical element of a proposed

rule.” Kristin E. Hickman, Unpacking the Force of Law, 66 Vand.

L. Rev. 465, 473–74 (2013).

11

rulemaking. First among them, the process promotes

“fairness” by “affording interested persons notice and

an opportunity to comment.” Chrysler Corp., 441 U.S.

at 316. Without the democratizing elements of notice

and comment, rulemaking in the administrative system would “go relatively unchecked by the public.”

James Yates, Good Cause Is Cause for Concern, 86

Geo. Wash. L. Rev. 1438, 1442 (2018). “[M]eaningfully

representative democratic procedures” such as notice

and comment help legitimize agency action. This is not

only because of the general assumption that all lawmaking should follow some democratic process, but

also because those procedures have intrinsic value for

interested persons.

Regardless of a particular comment’s effect on the

outcome of the rulemaking process, the opportunity to

comment accords a voice to interested parties through

the “obligation of government to attend and respond.”

Weinberg, supra, at 162–63, 174; see also Jessica Mantel, Procedural Safeguards for Agency Guidance: A

Source of Legitimacy for the Administrative State, 61

Admin. L. Rev. 343, 346 (2009) (“Social psychology also

has shown that fair procedures that reinforce the legitimacy of the administrative state strengthen individuals’ normative commitment to obey the law.”).

This obligation to “attend and respond” to the concerns of interested persons is exemplified by two procedural demands: an agency’s responsibility to respond to all “relevant, significant issues raised during”

the comment period, N.C. Growers’ Ass’n, 702 F.3d at

769, and the requirement that final rules must be a

“logical outgrowth” of the preceding notice of proposed

rulemaking. See Shell Oil Co. v. EPA, 950 F.2d 741,

747 (D.C. Cir. 1991). The former requirement ensures

12

that agencies do not ignore the concerns of interested

parties, since failure to respond to such concerns can

result in the invalidation of the action. See, e.g.,

Bloomberg L.P. v. SEC, 45 F.4th 462, 476–78 (D.C. Cir.

2022) (invalidating the SEC’s decision to approve new

reporting requirements proposed by FINRA because

the Commission neglected to give a reasoned explanation in response to Bloomberg’s concerns about the

costs that FINRA, as well as market participants, will

incur from the requirement); Hewitt v. Comm’r of IRS,

21 F.4th 1336, 1338 (11th Cir. 2021) (similarly finding

that the agency erred by not adequately responding to

comments); United Keetoowah Band of Cherokee Indians in Okla. v. FCC, 933 F.3d 728, 741–45 (D.C. Cir.

2019) (same). And the latter requirement likewise ensures that agencies give interested parties a voice for

concerns on all “critical element[s]” of a proposed rule.

See Hickman, supra n.3, at 473–74.

Together, these procedural protections respect the

fundamental right of those who are affected by public

policy to have a fair process for and a voice in its creation. When that right is denied, interested persons are

denied the voice that notice and comment was designed to afford.

B. The Notice-and-Comment Process Benefits Interested Persons by Improving the

Content of Rules.

The notice-and-comment process also benefits interested persons by promoting “informed administrative decisionmaking” and reducing the likelihood of arbitrary and capricious rules. See Chrysler Corp., 441

U.S. at 316. A crucial tenet of our republican system is

that government action should not be captive to the

arbitrary will of a powerful faction. Public policy

13

should not be dictated by a single interest group, but

rather should attempt to advance the public interest

as a whole. See The Federalist No. 51 (“In the extended

republic of the United States . . . a coalition of a majority of the whole society could seldom take place on any

other principles than those of justice and the general

good.”); cf. Mathews v. Eldridge, 424 U.S. 319, 334–35,

344 (1976) (reasoning that the key factor in determining whether a given process is due an individual is the

extent to which the asserted procedural right increases the accuracy of the government’s determination.). Thus, all policymakers—whether in legislatures

or agencies—are legitimized in part by their institutional capacity to “refine and enlarge the public views.”

See The Federalist No. 10.

Notice-and-comment rulemaking helps to foster

“deliberative decisionmaking aimed at furthering public rather than private values.” Mark Seidenfeld, A

Civic Republican Justification for the Bureaucratic

State, 105 Harv. L. Rev. 1511, 1554 (1992). Even when

they have high-minded motivations, agency decisionmakers, like all decisionmakers, “routinely start

the day with incomplete information, unexamined biases, and a limited sense of the possible.” Weinberg,

supra, at 160. Notice-and-comment rulemaking counteracts these biases and helps to “increase the substantive quality of decisions,” because it encourages input from a much broader group with different sets of

knowledge and interests. See id. at 159. Both the regulated parties and the beneficiaries of a proposed rule

have direct knowledge of their own needs—knowledge

that an agency may not have. And notice-and-comment rulemaking also helps gather input from a

greater number of agency staff members and offices

than the more informal procedures for creating

14

“interpretive rules” or “policy statements.” Mark Seidenfeld, Why Agencies Act: A Reassessment of the Ossification Critique of Judicial Review, 70 Ohio St. L.J.

251, 303–04 (2009). In short, the solicitation of information from all interested persons helps expand the

“limited sense” of decisionmakers. Weinberg, supra, at

160

Moreover, because a notice of a proposed rule must

“include sufficient information about the data and reasoning upon which the agency relied in developing its

proposed rules,” the public is able to provide more constructive critiques. Hickman, supra n.3, at 474. Studies have shown that agencies will constructively respond to comments, such as by improving the evidentiary basis for a rule. See generally Mia Costa, Bruce

A. Desmarais, & John A. Hird, Public Comments’ Influence on Science Use in U.S. Rulemaking: The Case

of EPA’s National Emission Standards, 49(1) Am. Rev.

Public Admin. 36 (2019). Public input thus facilitates

“logical and thorough consideration of policy.” Lisa

Schultz Bressman, Beyond Accountability: Arbitrariness and Legitimacy in the Administrative State, 78

N.Y.U. L. Rev. 461, 542 (2003).

Finally, the opportunity for so-called “hard look” judicial review improves the quality of rules. In Motor

Vehicle Manufacturers Ass’n v. State Farm Mutual Automobile Insurance Corp., 463 U.S. 29 (1983), this

Court held that agencies must articulate the basis for

their policy decisions. The Court endorsed the “reasoned decisionmaking” requirement, also known as

the “hard look” doctrine. Id. at 43. That doctrine “calls

on agencies, as a condition of judicial validation of

their policy decisions, to engage in the type of decisionmaking that tends to produce rational decisions.”

15

Bressman, supra, at 528 n.313. “Robust public participation,” among other things, “enhances the later process of judicial review by bringing to light technical issues that generalist judges might not otherwise spot,

thereby enabling courts to engage in meaningful scrutiny of the resulting rules.” David L. Franklin, Legislative Rules, Nonlegislative Rules, and the Perils of the

Short Cut, 120 Yale L. J. 276, 318 (2010). That scrutiny is critical to the promulgation of well-reasoned

rules.

Whether out of expediency or a desire to avoid responding to concerns from interested parties, HUD bypassed notice-and-comment rulemaking in issuing its

Directive. As a result, the College and all other interested persons lost out on the benefits of that process.

Congress created the procedural right to notice-andcomment rulemaking to protect the interests of parties

like the College—parties whose input would have been

valuable to the rulemaking process. The right to participate in that process and to help shape reasoned policymaking is far from a “procedural right in vacuo.”

And the deprivation of that right is an injury that establishes standing.

C. Rules That Are Created Without Noticeand-Comment Impose Compliance Costs

on Regulated Entities.

Notice-and-comment rulemaking “allows affected

parties, who participate in the formulation of the rule,

to anticipate the rule and plan accordingly.” Bressman, supra, at 542. Despite protests that nonlegislative rules—like HUD’s Directive—carry no legal force

on their own, see, e.g., Gov’t CA Br. at 21, Sch. of the

Ozarks, Inc. v. Biden, 41 F.4th 992 (8th Cir. 2022) (No.

21-2270), these rules “as a practical matter can quite

16

readily impose binding standards or obligations upon

private parties.” Anthony, supra, at 1360; see also

Ronald M. Levin, Rulemaking and the Guidance Exemption, 70 Admin. L. Rev. 263 (2018) (contending

that all nonlegislative rules—whether “interpretive

rules” or “policy statements”—can have a practically

binding effect). The decision to either challenge, follow,

or ignore such rules imposes real costs on parties.

Since the notice-and-comment process has the potential to avert those costs by altering the content of a

nonlegislative rule, the benefits of that process are just

as critical for nonlegislative rules as they are in other

rulemaking contexts.

There are at least two ways that nonlegislative

rules can impose costs on parties. First, the text of

such rules can leave little room for discretion by the

agency or the regulated parties. See Cmty. Nutrition

Inst. v. Young, 818 F.2d 943, 946 (D.C. Cir. 1987) (reasoning that some nonlegislative rules fail to “leave[]

the agency and its decisionmakers free to exercise discretion” and are thus practically binding); Tex. Sav. &

Cmty. Bankers Ass’n v. Fed. Hous. Fin. Bd., 201 F.3d

551, 556 (5th Cir. 2000) (same). If such rules either incorrectly interpret statutes or impose arbitrary policy

goals, regulated parties will almost certainly sustain

unjustified costs because of this lack of discretion.

Some such costs are inevitable whether the regulated

parties choose to comply (shouldering unnecessary

compliance costs) or to ignore or challenge the rule (incurring costs of legal challenges, agency enforcement

actions, and penalties). See Mark Seidenfeld, Playing

Games with the Timing of Judicial Review: An Evaluation of Proposals to Restrict Pre-enforcement Review

of Agency Rules, 58 Ohio St. L.J. 85, 121–22 (1997).

17

Second, the costs on interested parties are exacerbated by the deference that courts often give to such

rules. See Christensen v. Harris County, 529 U.S. 576,

587 (2000) (holding that an agency’s statutory interpretations announced in nonlegislative rules are due

Skidmore deference); United States v. Mead Corp., 533

U.S. 218, 231 (2001) (noting that even nonlegislative

rules can possibly receive Chevron deference). Judicial

deference regimes increase the likelihood that erroneous interpretations of law or irrational policy choices

by agencies will be upheld by courts when challenged.

This in turn increases the costs of challenging such

rules. As a result, it is even more important for interested parties to reap the benefits of notice-and-comment rulemaking before a rule is issued.

HUD’s Directive here is an example of a nonlegislative rule that is, for all intents and purposes, binding. While HUD may have strategically chosen to

avoid providing specifics on how it will implement the

Directive, the Directive’s text leaves little room for

agency discretion in pursuing enforcement of complaints that educational institutions have discriminated against individuals on the basis of sexual orientation or gender identity in housing practices. “Implementation of Executive Order 13988 on the Enforcement of the Fair Housing Act” (Feb. 11, 2021),

App.36a–41a. The Directive describes HUD’s previous

approach to discrimination based on sexual orientation or gender identity as “limited” and “insufficient.”

App. at 38a. It calls out institutions of education for

allegedly perpetuating “injustices” in housing. Id. at

37a. And the Directive insists on full enforcement of

the FHA.

18

The costs for the College in anticipating the Directive’s application to its housing policy are obvious.

The Directive’s forceful instructions for the agency to

shift its enforcement priorities put the College to a precarious choice: either change its policy, challenge the

Directive, or ignore the Directive and face likely penalties and the costs of defending its own policy. Indeed,

the College is bearing the costs of this legal challenge.

Regardless of the merits of the Directive’s command,

the College and all interested parties would have benefitted from notice-and-comment rulemaking for this

rule. HUD’s evasion of that process is a “procedural injury” sufficient for standing.

II. CERTIORARI IS WARRANTED TO ENSURE

THAT AGENCIES FOLLOW NOTICE-ANDCOMMENT RULEMAKING WHEN LEGALLY

REQUIRED.

The risk that agencies like HUD will continue to

circumvent notice-and-comment rulemaking is grave.

But it is also unsurprising. Bressman, supra, at 544.

Agencies are inevitably incentivized to avoid noticeand-comment rulemaking in circumstances where

they believe they can avoid judicial review and accountability. As such, certiorari is warranted to ensure

that courts, like the Eighth Circuit, do not casually accept agencies’ assertions that the denial of notice-andcomment rulemaking imposed no injury and created

no standing.

Absent strong judicial enforcement, perverse incentives will continue to push agencies toward the same

shortcut that HUD took here. Indeed, it is frequently

in an agency’s own short-term interest to avoid noticeand-comment rulemaking and the deliberation and accountability it brings. Rulemaking procedures can

19

force agencies to choose “between altering their preferred policy decisions and implementing preferred

policies at a higher political cost,” and can require

“agencies to provide reasoned responses to public criticism, which is subject to additional public criticism

and judicial review.” Connor Raso, Agency Avoidance

of Rulemaking Procedures, 67 Admin. L. Rev. 65, 78–

79 (2015). It is therefore to be expected that agencies

will often find it more convenient to circumvent the notice-and-comment process to quickly achieve their policy goals. See James R. Copland, The Unelected: How

an Unaccountable Elite is Governing America 77–78

(2020) (arguing it has become “all too easy for agencies

to avoid the rulemaking process established by Congress and effectively to rule by fiat”); Leor Sapir, Regulate Now, Explain Later: Understanding the Civil

Rights State’s Redefinition of “Sex” 35 (Aug. 2020)

(Ph.D. dissertation, Boston College) (“In practice . . .

agencies have come to use guidance letters and other

‘interpretations’ as a means of producing desired regulatory goals without going through rulemaking procedures.”).5

Empirical evidence supports this supposition.

Agencies issue a greater number of rules without notice and comment than they do with those procedures.

Franklin, supra, at 306. For example, from 1995 to

2012, agencies “avoided the notice-and-comment process on almost 52% of rules.” Raso, supra, at 91. Agencies commonly justify this choice by attempting to

shoehorn agency rules into notice-and-comment exceptions. One example of this strategy is claiming that

their rules are exempted “interpretative rules” or “policy statements.” Todd D. Rakoff, The Choice Between

5 Available at https://bit.ly/40Mwdxz.

20

Formal and Informal Modes of Administrative Regulation, 52 Admin. L. Rev. 159, 166 (2000). Another example is invoking the “good cause” exception to noticeand-comment rulemaking as a legal justification.

Yates, supra, at 1440. And agencies may also attempt

to avoid notice-and-comment rulemaking by invoking

extremely narrow exceptions found in other statutes.

See 29 U.S.C. 655(c)(1) (permitting immediate effect of

an OSHA emergency temporary standard where a

“grave danger” exists in the workplace); NFIB v.

OHSA, 142 S. Ct. 661 (2022) (noting that of the nine

times OSHA invoked this exception, only one was “upheld in full”). Given the motivations to avoid noticeand-comment rulemaking, the Court should be skeptical of a theory of standing that would exempt an

agency from judicial review for that choice, even when

the agency’s legal theory justifying its alleged exemption is wrong.

Further, courts can mitigate agencies’ tendency to

avoid notice-and-comment rulemaking without halting

the promulgation of necessary rules. Courts are

“skilled at reviewing agency compliance with procedures,” just as courts are adept at reviewing litigants’

compliance with other procedural rules like the Federal Rules of Civil Procedure. Kyle Schneider, Judicial

Review of Good Cause Determinations under the Administrative Procedure Act, 73 Stan. L. Rev. 237, 267

(2021). When courts use that expertise to enforce the

requirements of notice and comment, agencies pay a

higher cost for attempting to avoid the APA’s commands. Of course, agencies “do not face litigation risk

for avoidance unless they are sued,” and, as one would

expect, “empirical analysis shows that agency avoidance of rulemaking procedures increases as litigation

risk decreases.” Raso, supra, at 107. Thus, excessive

21

hurdles to judicial review will decrease the economic

cost of circumventing notice and comment. For that

reason, courts should not be required to quickly accept

agencies’ claims that parties lack standing or that an

issue is “unripe” for review. If agencies know instead

that taking unauthorized administrative shortcuts

will put them at greater risk of successful pre-enforcement challenges, they will be more incentivized to afford parties the benefits of notice-and-comment rulemaking in the first place.

Finally, this Court should not be concerned about

the effect that robust judicial review will have on agencies’ ability to promulgate necessary rules. To be sure,

the possibility of judicial review increases the price of

agency actions and so “discourage[s] agency action

overall.” Seidenfeld, Why Agencies Act, supra, at 301.

But there is little empirical evidence suggesting that

the procedural requirements imposed by the APA and

the courts have inordinately stifled agencies’ ability to

promulgate rules. See Jason Webb Yackee & Susan

Webb Yackee, Testing the Ossification Thesis: An Empirical Examination of Federal Regulatory Volume and

Speed, 1950-1990, 80 Geo. Wash. L. Rev. 1414, 1437–

38, 1454–57 (2012). More importantly, because the

“costs and benefits of regulation to society differ

greatly from the costs and benefits that the agency experiences when it regulates,” discouraging agencies

from acting inappropriately can “counterbalance[]

other influences that might cause agencies to be unduly prone to act when regulation is not warranted.”

Seidenfeld, Why Agencies Act, supra, at 321.

In short, agencies are incentivized to, and often do,

avoid notice-and-comment rulemaking. Careful scrutiny of agencies’ attempts to avoid judicial review puts

22

institutional pressure on agencies to promulgate rules

through proper procedures. This Court should ensure

that agencies like HUD cannot easily circumvent the

protected “procedural right” to the notice-and-comment process.

CONCLUSION

For the foregoing reasons, and those presented by

the Petitioner, this Court should grant certiorari.

........................................... Respectfully submitted,

Rachel N. Morrison

Eric N. Kniffin

ETHICS & PUBLIC POLICY

CENTER

1730 M Street, N.W.

Suite 910

Washington, D.C. 20036

Clark M. Neily III

Counsel of Record

Thomas A. Berry

Gregory J. Mill

CATO INSTITUTE

1000 Mass. Ave., N.W.

Washington, DC 20001

(202) 425-7499

cneily@cato.org

Elizabeth Milito

Rob Smith

NFIB Small Business

Legal Center

555 12th St., NW

Suite 1001

Washington, DC 20004

Ilya Shapiro

Manhattan Institute

52 Vanderbilt Ave.

New York, NY 10017

March 30, 2023